Euro zone pushing for tougher policing of Greece - sources
* Surrendering powers to task force may appease Germany,
anger IrelandBy John O’DonnellBRUSSELS, Oct 17 (Reuters) - Some euro zone countries want a
European Commission task force to be given extra powers to
oversee the sale of Greek state assets and the country’s civil
service under a far-reaching plan to tighten supervision of
Athens, EU sources have told Reuters.The radical proposal, dismissed by some officials as a form
of colonialism and which may be shot down in the face of strong
opposition, underscores mounting pressure for stricter policing
of Athens, with some ready to see its sovereignty clipped.Euro zone leaders meet on Sunday to discuss further aid for
Greece and tighter controls are high on the agenda. One official
said there was wide support for closer supervision of Athens,
which has made scant progress on privatisation and other
reforms.”It’s that or not getting the money,” said one euro zone
source, who supports the idea of letting the Commission’s Greece
task force “take over some of the sovereign fuctions of the
state” to “get the machine running”.”It is assistance imposed from outside. It’s where outsiders
take over some elements of the operation,” he said of the
proposal, which would involve deploying several hundred
technical experts on the ground to administer Greece.”The idea is living in some capitals. There is no
alternative.”The Commission has already dispatched a small number of
officials to Greece as part of the EU/IMF ‘troika’ that is
responsible for assessing how well Athens is doing with meeting
economic targets. In addition, the Commission’s task force helps
Athens on tax reform and tapping EU structural funds.”The scale of the intervention is unparalleled,” said the
source. “If there was a track record of responsible management,
such as in Ireland, things would be different. But that track
record is lacking in Greece.”Greece is set to receive another 8 billion euros of EU/IMF
aid in November — the latest payment from a 110 billion euro
bailout agreed last year — and is expected to get another
multi-billion-euro package of support soon.With the economy stagnating, lenders are banking on Athens’
selling assets such as ports and power companies to raise funds.
It has said it will generate 50 billion euros by 2015, but has
so far raised roughly 1.3 billion euros via privatisations.Other officials, while declining to comment on the specific
tighter-oversight proposal, said there was widespread political
support to impose stronger policing on Athens.”Support for stronger supervision is certainly there,” said
one.Another source said there was a desire to establish a
permanent body to take on some of the work of the troika, which
consists of inspectors from the Commission, the European Central
Bank and the International Monetary Fund.”You need someone who can speak Greek but who is not on the
side of the Greeks,” said the source. “Their powers would be
tied to the conditionality of the loan. It has to be presented
carefully - call it technical assistance or something. You can’t
trample all over them.”Such a blatant move to impinge on sovereignty would put the
the European Commission in an uncomfortable position. It wants a
bigger role in setting national budgets but draws the line at
implementing them.”The task force is administrative,” said a spokesman for the
EU’s executive arm. “Its role is to support Greece and we don’t
intend to change this mandate.”AUTHORITYUnder the proposal, which chimes with a Dutch initiative for
countries asking for financial aid to be placed under
“guardianship”, the Commission’s Greek task force could be
bolstered to hundreds of staff.The body, run by a German, Horst Reichenbach, would be
handed some executive powers, giving it the final say over, for
example, privatisations.It echoes a suggestion made earlier this year by Germany’s
top official in Brussels, energy Commissioner Guenther
Oettinger, that EU officials should take a leading role in Greek
tax collection and privatisations.”It is a matter of authority,” said the first source. “There
will be a lot of resistance. The formal authority is not in
their hands — Greeks must accept that.”However, one EU official cautioned that the idea would
encounter fierce resistance in Athens, Dublin and other
capitals, making it all but unworkable as such a programme would
require their support.”Giving the task force executive powers is an idea which has
been in the air,” he said. “But the Greeks would never accept
that and neither should they.”While such a move may reassure lenders such as Germany that
further loans to Greece are safe, it would likely antagonise
Ireland, which would fear receiving the same treatment, despite
having made rapid progress on spending cuts.
PRESS DIGEST - British business - Oct 18
Evraz , a Russian steel producer part-owned by Roman
Abramovich, is set to take its place in the FTSE 100 in a move
that will compound the dominance of natural resource stocks in
London’s leading index.EQUITABLE LIFE GROUP ATTACKS UK TREASURYThousands of Equitable Life policyholders in Britain could
die before they receive compensation amid continuing government
“incompetence,” the mutual’s chief campaign group has warned.BUMI PULLS OUT OF INDONESIA DEALBumi , the mining investment vehicle founded by Nat
Rothschild, has pulled out of a $2 billion deal to raise its
stake in its Indonesian partner to 75 percent.The TelegraphBP PARTNER AGREES TO HELP WITH OIL SPILL COSTSAnadarko , one of BP’s partners involved in
the Gulf of Mexico oil spill, has agreed to pay $4 billion
towards clean-up costs and civil claims resulting from the
accident.G4S TO TAKEOVER MOVE FOR RIVAL ISSSecurity group G4S is set to become one of the
world’s largest private sector employers after agreeing a deal
to buy the cleaning and catering provider ISS for
5.2 billon pounds.BERLIN EXPERTS FEAR EURO BREAKUPPlans to increase the firepower of Europe’s bailout
machinery with extra leverage threaten France’s AAA rating and
risk setting off a dangerous chain of events, a top German
institute has warned.The GuardianIPHONE 4 SALES HEADING FOR NEW GADGET WORLD RECORDApple has sold more than 4 million of its new
iPhone 4S smartphones in just three days since its launch, with
handsets snapped up at a speed that is likely to set the record
for the world’s fastest selling consumer electronics gadget.The IndependentSACKED BOSS OF OLYMPUS PASSES PAPERS TO SFOMichael Woodford, the chief executive fired by Olympus
after just two weeks in the post, on Monday told the
company he “welcomed” their threats of legal action, as he
passed crucial documents to Britain’s Serious Fraud Office.
Wall Street protests go global; riots in Rome
Galvanized by the Occupy Wall Street movement, protests began in New Zealand, touched parts of Asia, spread to Europe, and resumed at their starting point in New York with 5,000 marchers decrying corporate greed and economic inequality.After weeks of intense media coverage, U.S. protests have still been smaller than G20 meetings or political conventions have yielded in recent years. Such events often draw tens of thousands of demonstrators.The demonstrations by the disaffected coincided with the Group of 20 meeting in Paris, where finance ministers and central bankers from major economies were holding talks on the debt and deficit crises afflicting many Western countries.The Occupy Wall Street movement has gathered steam for a month, culminating with the global day of action. It remains unclear what momentum the movement, which has been driven by social media, has beyond Saturday.While most rallies were relatively small and barely held up traffic, the Rome event drew tens of thousands of people and snaked through the city center for miles (kilometres).Hundreds of hooded, masked demonstrators rampaged in some of the worst violence seen in the Italian capital in years, setting cars ablaze, breaking bank and shop windows and destroying traffic lights and signposts.Police fired volleys of tear gas and used water cannon to try to disperse militant protesters who were hurling rocks, bottles and fireworks, but clashes went on into the evening.Smoke bombs set off by protesters cast a pall over a sea of red flags and banners bearing slogans denouncing economic policies the protesters say are hurting the poor.The violence sent many peaceful demonstrators and local residents near the Colosseum and St John’s Basilica running into hotels and churches for safety.NOT AS LARGE AS HOPEDAmerican protesters are angry that U.S. banks are enjoying booming profits after getting massive bailouts in 2008 while average people are struggling in a tough economy with more than 9 percent unemployment and little help from Washington.In New York, where the movement began when protesters set up a makeshift camp in a Lower Manhattan park on September 17, organizers said the protest grew to at least 5,000 people as they marched to Times Square in midtown Manhattan.Some were disappointed the crowd was not larger.”People don’t want to get involved. They’d rather watch on TV,” said Troy Simmons, 47, who joined demonstrators as he left work. “The protesters could have done better today. … People from the whole region should be here and it didn’t happen.”The Times Square mood was akin to New Year’s Eve, when the famed “ball drop” occurs. In a festive mood, protesters were joined by throngs of tourists snapping pictures, together counting back from 10 and shouting, “Happy New Year.”Police said three people were arrested in Times Square after pushing down police barriers and five men were arrested earlier for wearing masks. Police also arrested 24 people at a Citibank branch in Manhattan, mostly for trespassing.Small and peaceful rallies got the ball rolling across the Asia-Pacific region on Saturday. In Auckland, New Zealand’s biggest city, 3,000 people chanted and banged drums.In Sydney, about 2,000 people, including representatives of Aboriginal groups, communists and trade unionists, protested outside the central Reserve Bank of Australia.Hundreds marched in Tokyo. Over 100 people gathered at the Taipei stock exchange, chanting “we are Taiwan’s 99 percent” and saying economic growth had only benefited companies while middle-class salaries barely covered basic costs.In Hong Kong, home to the Asian headquarters of investment banks including Goldman Sachs, over 100 people gathered at Exchange Square in the Central district. Students joined with retirees, holding banners that called banks a cancer.Portugal was the scene of the biggest reported protest action, with more than 20,000 marching in Lisbon and a similar number in the country’s second city Oporto, two days after the government announced a new batch of austerity measures.Hundreds broke through a police cordon around the parliament in Lisbon to occupy its broad marble staircase.”This debt is not ours!” and “IMF, get out of here now!,” demonstrators chanted. Banners read: “We are not merchandise in bankers’ hands!” or “No more rescue loans for banks!”Around 4,000 Greeks with banners bearing slogans like “Greece is not for sale” staged an anti-austerity rally in Athens’ Syntagma Square, the scene of violent clashes between riot police and stone-throwing youths in June.Many were furious at how austerity imposed by the government to reduce debt incurred by profligate spending and corruption had undermined the lives of ordinary Greeks.In Paris, around 1,000 protesters rallied in front of city hall, coinciding with the G20 finance chiefs’ meeting, after coming in from the working class neighborhood of Belleville where drummers, trumpeters and a tuba revved up the crowd.”This is potentially the start of a strong movement,” said Olivier Milleron, a doctor whose group of trumpeters played the classic American folk song “This land is your land.”“THE INDIGNANT ONES”The Rome protesters, who called themselves “the indignant ones,” included unemployed, students and pensioners.”I am here to show support for those don’t have enough money to make it to the next pay check while the ECB (European Central Bank) keeps feeding the banks and killing workers and families,” said Danila Cucunia, a 43-year-old teacher.”We can’t carry on any more with public debt that wasn’t created by us but by thieving governments, corrupt banks and speculators who don’t give a damn about us,” said Nicla Crippa, 49. “They caused this international crisis and are still profiting from it. They should pay for it.”In imitation of the occupation of Zuccotti Park near Wall Street in Manhattan, protesters have been camped out across the street from the headquarters of the Bank of Italy for days.The global protests were a response to calls by New York demonstrators for others to join them. Their example has prompted similar occupations in dozens of U.S. cities.At a small protest in Dublin, Ireland, Gordon Lucas, an unemployed software developer said “We don’t have economic democracy anymore. … I don’t feel I am being represented.”In Madrid, around 2,000 people gathered for a march to the central Puerta del Sol. Placards read: “Put the bankers on the bench” and “Enough painkillers — euthanasia for the banks.”“It’s not fair that they take your house away from you if you can’t pay your mortgage, but give billions to the banks for unclear reasons,” said 44-year-old telecom company employee Fabia, who declined to give her surname.In Germany, thousands gathered in Berlin, Hamburg, Leipzig and outside the European Central Bank in Frankfurt.Demonstrators gathered peacefully in Paradeplatz, the main square in the Swiss financial center of Zurich.In London, around 2,000 people assembled outside St Paul’s Cathedral, near the City financial district, for a rally dubbed “Occupy the London Stock Exchange.”Joe Dawson, 31, who lost his job as a product developer at Barclays Bank, said he had taken his two children aged 10 and 8 to the rally to show them people had a voice.”I’m not passive anymore and I don’t want them to be. This is their future too,” Dawson said. “I work four jobs part-time, I take whatever I can get.”WikiLeaks founder Julian Assange told the crowd: “I hope this protest will result in a similar process to what we saw in New York, Cairo and Tunisia,” he said, referring to revolutions in the Arab world.Outside of New York, similar protests were held in other U.S. cities and Canada. Hundreds turned out in Washington, D.C., while a couple of thousand people gathered near Toronto’s financial district as well as in Portland, Oregon.A protest in Los Angeles drew about 5,000 people.
September retail sales rise on car sales
Consumer spending accounts for about two thirds of U.S. economic activity, and the Commerce Department data suggests growth at the end of the third quarter might have been stronger than previously thought.Excluding autos, sales increased 0.6 percent in September, above forecasts for a 0.3 percent gain.Sales of motor vehicles and parts rose 3.6 percent, the biggest gain since March 2010. That increase — along with higher sales of furniture, gasoline and electronics — made up for lower grocery store and building material sales. Spending at restaurants and bars also rose.Consumer confidence rebounded modestly in September after dipping in early August to its lowest in more than three decades.Confidence sank deeply over the summer when a bruising battle over the U.S. budget slammed stock prices and pushed the nation to the brink of default. Even with September’s modest improvement, Americans were still more worried about the economy’s outlook than at any point since 1980. The Thomson Michigan’s preliminary consumer sentiment survey for October will be released later on Friday and is expected to creep higher.Stripping out sales of gasoline, autos and building materials, so-called core retail sales rose 0.6 percent in September.Excluding the 1.2 percent rise in gasoline sales, retail sales were 1.1 percent.
Liberia to release first election results
* Voting in second poll since war hailed free and fairBy Richard Valdmanis and Alphonso TowehMONROVIA, Oct 13 (Reuters) - Liberia is to release a first
batch of official results on Thursday from its hotly-contested
presidential election, in which Nobel laureate Ellen
Johnson-Sirleaf is seeking a second term.The vote is seen as a test of Liberia’s progress since the
1989-2003 civil war killed nearly a quarter of a million people
and left infrastructure in ruins. If smooth, the election could
pave the way to billions of dollars in investment in Liberia’s
mining, energy and agriculture sectors.”We are all waiting for the results, and from my
perspective, I think they will be accepted,” said Amadou Kante,
a resident of the Sinkor neighbourhood in the capital Monrovia.A local media association, the Liberia Media Center (LMC),
published unofficial partial results on Wednesday showing
Johnson-Sirleaf just ahead of her main rival Winston Tubman,
with just over 96,000 votes to his nearly 80,000 of a total
220,000 votes counted.Around 1.8 million Liberians registered for Tuesday’s
election, the second since the fighting and the first to be
organized locally. If no candidate wins an outright majority,
the two front-runners from a field of 16 will go into a run-off
vote scheduled for early November.Ex-rebel leader Prince Johnson was a distant third with just
under 20,000 votes, the LMC said, adding the tally was based on
its reporters calling in results that are being pinned up at
polling stations across the country.Official preliminary figures will be released by the
National Election Commission on Thursday. Many voters were tuned
to radio or television stations as the LMC’s unofficial tally
came through.Voting on Tuesday passed off peacefully in Monrovia.
Observer groups said they had received no reports of trouble
elsewhere in the country of four million people, but have
expressed concern that the results could be a flashpoint.”The mission is of the view that there were no major
irregularities and incidents of violence. It estimated that on
the whole, the elections of October 11, 2011 were conducted
under acceptable conditions of freedom of voters and
transparency of the process,” Attahiru Jega, head of the
observation mission from West African bloc ECOWAS, said on
Wednesday.Johnson-Sirleaf got a pre-poll boost with her award of the
Nobel Peace Prize last Friday, but rivals have said Liberians
will judge her on her success in fighting poverty in a country
with an average annual income of $300 a head.A dispute over the results of the 2005 election that brought
Johnson-Sirleaf to power as Africa’s first freely elected female
head of state triggered days of rioting.
Greece to get loan, Trichet sees systemic crisis
After a weeks-long review of the country’s finances, inspectors from the European Union, IMF and European Central Bank said an 8 billion euros loan tranche should be paid in early November after approval by euro zone finance ministers and the International Monetary Fund.But they warned Greece had made only patchy progress in meeting the terms of a bailout agreed in May last year.”It is essential that the authorities put more emphasis on structural reforms in the public sector and the economy more broadly,” the troika said in a statement.It said additional measures were likely to be needed to meet debt targets in 2013 and 2014 and a privatization drive and structural reforms were falling short. Decisive implementation of existing plans should allow next year’s debt goals to be met, it said.The money will only buy Greece and its euro zone partners a small window of time.Germany and France, the leading powers in the 17-nation euro zone, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit delayed until October 23.After Athens admitted it would not meet its deficit target this year, there is a growing acceptance that a second Greek bailout agreed in July may not be sufficient and a rush is now on to beef up the currency bloc’s rescue fund and bolster its banks.Europe’s top financial watchdog warned that the euro zone’s sovereign debt crisis had become systemic and threatened global economic stability unless decisive action was taken urgently.European Central Bank President Jean-Claude Trichet issued the dramatic warning as chairman of the European Systemic Risk Board, created to avoid a repeat of the 2008 financial crisis, amid growing fears that Greece will default on its massive debt.”The crisis is systemic and must be tackled decisively,” Trichet told a European Parliament committee in his final appearance before retiring at the end of the month.”The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond.”European banking regulators meanwhile asked banks across the continent to provide updated data on their capital position and sovereign debt exposures to help reassess their need for recapitalization.Industry sources said the EU banking regulator has demanded lenders achieve a core capital ratio of at least seven percent in a new round of internal stress tests and banks that fail to reach that mark would be asked to bolster their capital.For a comprehensive deal to come together, the bloc’s leaders must resolve differences over how to recapitalize banks, whether to force a Greek debt restructuring or stick to a voluntary deal with private bondholders and how to use the euro zone’s rescue fund.The fate of that fund rests with Slovakia’s parliament, the only one in the euro zone yet to ratify more sweeping powers.Slovak Prime Minister Iveta Radicova raised the stakes in a battle to win approval for new powers for the European Financial Stability Facility by tying the decision to a vote of confidence in her center-right government.The small, liberal SaS party, the only member of the five-party ruling coalition which opposes the EFSF, said it would abstain, forcing the government to turn to opposition parties to push through a deal.Even if they lose the vote, Radicova and two of her ruling coalition partners have vowed to push through ratification with opposition support. But that may come at the price of a cabinet reshuffle or early elections.TORTURED PROGRESSEurope’s inability to draw a line under the crisis has caused growing international alarm, with Japan weighing in on Tuesday after the United States and Britain pressed EU leaders to take decisive action.Tokyo said it would consult with Washington before it considers buying more euro zone bonds. Finance Minister Jun Azumi urged Europe to restore market confidence in the run-up to a Group of 20 finance leaders’ meeting in Paris this week.Azumi repeated that Japan stood ready to buy more bonds if Europe comes up with a solid scheme to solve a crisis that has resulted in financial rescues for Greece, Ireland and Portugal.Interbank lending rates in Europe continued to rise amid growing concern over European banks’ ability to operate, despite the prospect of massive ECB liquidity support.Some European banks voiced concern at the prospect of being forced by governments to raise additional capital some say they do not need, possibly taking public money.Germany’s banking association said Europe should look at recapitalization on a case-by-case basis rather than taking a blanket approach apparently envisaged by Berlin and Paris.The director of the BDB association, Michael Kemmer, also told ARD television that politicians should stick to a July agreement on voluntary private bondholder involvement in a rescue plan for Greece.That deal envisaged a 21 percent writedown on Greek debt for banks and insurers that participate in a bond swap to reduce and stretch out Greece’s debt burden.However, German Finance Minister Wolfgang Schaeuble and the chairman of euro group finance ministers, Jean-Claude Juncker, have said that figure may no longer be sufficient and the talks may have to be reopened.Speaking on Austrian television late on Monday, Juncker refused to rule out a mandatory debt restructuring for Greece, which many market analysts and economists say is bound to happen in the coming months.Many analysts see the rush to recapitalize European banks as a prelude to an enforced write-down of 50 percent or more on their Greek debt holdings.
