FDI in multi-brand retail set to get 100% backing!
Geithner calls for action on euro debt crisis!
India gold demand near record!
Army denies cautioning Antony on deals with US!
Troubled Galaxy Destroyed dreams, chapter 834
Palash Biswas
http://indianholocaustmyfatherslifeandtime.blogspot.com/
Trade Unions, affiliated to Left and Right Political Parties of the ruling Zionist Manusmriti Hegemony BETRAYED the Working Class Excluded communities as AI employees called off stir after HC order and Govt tough talk!It was all round Economism around which Indian Caste Hindu led Trade union Movement revolved all these Six decades and NEVER addressed the basic Issues or the fundamental Rights of the producers of the Wealth! After Delhi High Court restrained them from continuing with their strike, Air India employees unions on Wednesday decided to call off the strike. The employees will be joining work soon.
Earlier, the government on Wednesday gave a free hand to Air India to crack down on a section of its employees on strike calling their action irresponsible, as the state-owned airline cancelled another 76 flights across the country.
Thousands of passengers were left stranded on the second day of the strike by the cash-strapped airline's engineers and ground staff, who account for about 60 per cent of the entire staff strength.
Representatives of striking employees and top officials also held one round of talks here in a bid to end the standoff but the deadlock continued.
Air India cracks the whip, employees end strikeIBNLive.com - 23 minutes ago New Delhi: Air India employees union called off its two-day old strike on Wednesday evening but not before a strong message from the Government. The 48 hour impasse that grounded the national carrier came to end after 15 employees were sacked, ... Patel gives free hand to AI to deal with striking employeesEconomic Times - 56 minutes ago 26 May 2010, 2222 hrs IST, PTI NEW DELHI: Taking exception to the "illegal and irresponsible" strike by a section of Air India staffers, the government today gave a free hand to the airline to take firm measures to restore normalcy in its operations, ... Air India strike: Railways booths for stranded passengersNDTV.com - 3 hours ago PTI, Wednesday May 26, 2010, New Delhi The Indian Railways made special arrangements to set up "May I Help You" booths at major airports across the country to help stranded air passengers during the strike called by Air India employees. ...
17 Air India union leaders and staffers sacked for strikeThe Hindu - 1 hour ago PTI The services of 17 employees, including union leaders who led the 33-hour strike in Air India, have been terminated and 15 engineers suspended, airline CMD Arvind Jadhav said Wednesday night. "This strike was illegal. ... Air India strike ends after being ruled illegal; workers sacked New Delhi/Mumbai: A two-day Air India strike came to an end on Wednesday after the Delhi high court said it was illegal and the national carrier dismissed 17 officials, including union leaders, and suspended 15 engineers, in the strongest action it has ... Thousands stranded on second day of Air India strikeSify - 3 hours ago Thousands of passengers across the country and abroad were stranded due to a flash strike by Air India employees which continued for the second day Wednesday leading to as many as 140 flight cancellations or diversions. The strike not only affected ... Mumbai High court declines to stay Air India staff strikeSify - 3 hours ago The Bombay High Court Wednesday declined to grant ex-parte relief to Air India, which sought the court's intervention for a stay on the two-day old agitation by a section of its employees. A division bench of Justices SJ Kathawala and RG Ketkar ... AI stir off after Delhi HC's gag order, 15 union leaders sackedHindustan Times - 1 hour ago The two-day wildcat strike by some 15000 employees of Air India was called off on Wednesday evening after a Delhi High Court restraining order, even as thousands of domestic and international travellers were left fuming after over 140 flights of the ... Heading home, by all meansHindustan Times - 12 minutes ago Thousands of passengers faced the brunt of the strike by Air India employees on its second day at Delhi's Indira Gandhi International Airport. Many passengers who had booked Air India tickets had to finally reach their destinations by trains, ... Northern Rly starts special trains to ease chaosHindustan Times - 12 minutes ago Northern Railway swung into action by making special arrangements at the Delhi airport — a computerised rail ticket reservation counter. With a large number of passengers stranded at the airport due to cancelled flights, many were sent to their ... | Timeline of articlesNumber of sources covering this story
Images Oneindia  dailynews365 Press Trust of ...  ABC News The Hindu  NDTV.com  The Hindu  Hindustan Times  Rediff |
The unions are protesting against a 'gag order' on members for talking to the media after Saturday's air crash in Mangalore and 'delay' in payment of salaries. The management however clarified there is only one general circular and that there was no 'gag order".
In all 110 flights, mostly domestic, have been cancelled since the flash strike began on Tuesday at a time when it is peak summer rush. On May 16, Air India flew a record number of 50,308 passengers on its network.
Taking exception to the "illegal and irresponsible" action by Air India employees, civil aviation minister Praful Patel stepped in and backed the management and said the airline is free to take firm measures to restore normalcy in its operations.
"Air India management is free to take all appropriate action and I am sure they are going to adequately respond. The management needs to act adequately and firmly", Patel told reporters after a meeting with civil aviation secretary M Madhavan Nambiar and airline CMD Arvind Jadhav.
Issuing a stern warning to the striking employees, he said "such absolutely irresponsible behaviour like this needs strong action... Strong, appropriate and decisive action should be taken. ...No one can take law into their own hands".
Patel, who apprised Prime Minister Manmohan Singh on the situation, later briefed the Union Cabinet.
Asked whether government is going to invoke the Essential Services Maintenance Act (ESMA) against the striking employees, he said the future course of action is left to the airline management.
"The government will go by the advice of the management", Patel said amid reports that finance minister Pranab Mukherjee had spoken to him on the need for some tough action against erring employees. Jadhav on Tuesday night said termination of services of employees was not ruled out.
The Air Corporation Employees Unions and All India Aircraft Engineers Association, which are leading the strike, together claim a membership of about 20,000 employees or about 60 per cent of the staff strength.
ET Exclusive: Don't blame the Greeks for the crisis, says Joseph Stiglitz
26 May 2010, 0830 hrs IST,George Smith Alexander & Sugata Ghosh,ET Bureau Housewives in Greece and Spain didn't blow up money as the world thinks they did. They are suffering because of a reckless Wall Street and central banks which didn't want to upset the apple cart. The euro will survive, but the price would be volatility and turmoil. And soon, US markets will battle with another round of mortgage defaults and turmoil. Not our words. Joseph Stiglitz 's. One of the most outspoken critics of Fed and George Bush, Mr Stiglitz is "sufficiently pessimistic" about the world economy. Men like him and Paul Krugman give politicians the intellectual ammunition to lead the government's intervention in markets. But does he feel a moral obligation? In an interview with ET , the Nobel Prize winner and Columbia University professor, speaks his mind even as he reminds the world that Washington is still not getting it right and that it's being bought over by banks which are desperate to water down the new rules for financial markets. Mr Stiglitz is in India to attend a forum organised by Standard Chartered Bank. Excerpts: It's evident that Greece has no immediate fix and over the next decade, other regions of the world may face similar problems. Isn't it time for leading nations to sit together and reset the entire global debt? What's clear is that the current approach in Europe is wrong. The current approach is to try to impose extreme austerity. That will lead to a weaker economy and lower tax revenues, and so the reduction in deficits will be much smaller than hoped. It's a kind of austerity which failed in Argentina. The current approach of saying that you just have to get rid of the deficit is not going to work and is going to push the world into a double dip or a global slowdown. So, the only alternative is some form of debt restructuring. It is clear that if there was confidence in Greece, it could make step payments. This would be more like two situations — Brazil and Argentina. Brazil had a debt crisis which was helped over by liquidity. It even had a debt write-off. Once the market irrationalities had worn off, it started to grow and now no one thinks of Brazil as having a large debt problem. Most of the countries are, I think, in the Brazilian situation. If interest rate remains relatively low and market remains calm, then they won't have any difficulties. |
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Posted: 26 May, 2010, 1815 hrs IST
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We do need new knowledge to better traverse the growth path going forward.
The market of one billion consumers in Africa has tremendous implications for businesses, investors, policymakers and donors.
Editorial The secret of PM's success Gursharan Kaur and Sonia Gandhi — two women behind PM's success Credible financial statements SMEs should embrace globally accepted accounting standard. Reforming political funding India needs drastic overhaul in its political system. | ||
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Comments & Analysis Options before the eurozone & Greece There is a need to think more deeply of the available options before Greece and the eurozone. Politics, culture and obscenityEven in the best of times, politics and literature share a troubled relationship. Education through entrance testsRaising the standard of entrance exams for higher learning will result in improving the education and foundation of lakhs of students who cannot make it to quality institutions. | ||||||||
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The two-day strike forced dozens of flight cancellations days after one of its aircraft crashed in southern India, killing 158 people.
At least 13,000 passengers were stranded because of the strike called by Air India's ground and technical staff, who said they were protesting against a company "gag" order on union leaders speaking to reporters about Saturday's accident.
The striking employees said the "gag" order had also asked them not to speak about the airline's safety issues or staff problems. They said two of their leaders had been threatened with dismissal for speaking to the media on these issues.
Employees called off the strike after meetings with the Chief Labour Commissioner (CLC) and the Delhi High Court's directive issued on Wednesday, asking employees to resume work as soon as possible, court officials said.
"In view of the court order and successful meetings with the CLC, we have decided to call off the strike," Vivek Rao, general secretary of Air Corp Employees Union, told reporters.
Air India spokesman K. Swaminathan said 76 flights were cancelled on Wednesday. Among them were 18 international flights to destinations including Singapore, Muscat, Abu Dhabi and Bangkok.
Flights to the United States, Britain, Tokyo, Hong Kong and other long-haul destinations were operating, he said.
Some 15,000 employees had joined the strike.
The ailing airline is expected to lose millions of rupees in refunds. The airline lost $875 million in the fiscal year ended March 2009.
An aircraft of the airline's budget arm Air India Express crashed while negotiating a tricky landing in Mangalore on Saturday, killing all but eight of 166 people on board in India's worst air disaster in a decade.
The reasons for the crash are not yet known and investigators were analysing the plane's flight data recorder.
Geithner calls for action on euro debt crisis!
| Wednesday May 26, 10:42 AM | Source: Hindustan Times |
Wary FIIs exit India
Mumbai, May 25 -- Europe has been eloquent in its argument that the debt crisis on the Euro zone is nowhere near the sub-prime crisis of 2008, but apparently foreign institutional investors (FIIs) in India are not convinced.
FIIs are repeating their withdrawal strategy of September and October 2008, which has led to a steep fall in the Bombay Stock Exchange (^BSESN : 16387.84 +365.36
)'s benchmark Sensex and weakening of the rupee.
FIIs have pulled out a total of Rs 8,488 crore from the Indian equity market in May - the highest in 18 months since October 2008, when they withdrew Rs 15,347 crore after Lehmann Brothers crashed.
This has led to an 8.75 per cent fall in the Sensex in May - the biggest in a month since November 2008.
As of now investors are moving to safer territories. "There is a flight to safety into the US sovereign bonds and that is expected to continue till the FIIs ascertain for themselves that there are no more negative surprises coming from Europe to start investing into emerging markets," said Dilip Kadambi, managing director, RBS Investment Banking.
"As of now investors are cautious on taking country risk and most of the outflows are redemption related," said CJ George, managing director, Geojit BNP Paribas Financial Services.
At a time when the FII's were pumping in money, both the stock markets and the rupee were appreciating but now both have weakened. Experts feel the FIIs will return when Europe stabilises. "Given the fact that India remains one of the most attractive destinations, I think that whatever is going out now will come back," said George.
Reuter reports:
U.S. Treasury Secretary Timothy Geithner said on Wednesday that financial markets want to see euro zone countries put into action their $1 trillion standby package designed to stabilise the European currency.
Geithner, on a visit to London, also urged Europeans to work for a globally consistent approach to financial reform as the European Union said it might go it alone with a crisis levy on banks.
After talks with his British counterpart, George Osborne, Geithner said of the EU plan to support indebted states: "It's a good programme (and) has got all the right elements. What markets want to see is action."
The fund would provide heavily conditioned loans to euro zone governments that had difficulty borrowing on capital markets after a separate bailout for Greece failed to calm fears of a sovereign debt default in southern European countries.
European shares rallied by 3 percent from Tuesday's nine-month lows and Wall Street was more than 1 percent up but the euro remained under pressure amid continuing signs of banks' reluctance to lend to euro zone counterparts exposed to south European sovereign debt.
Geithner's stress on coordination of new regulation appeared aimed chiefly at Germany, Europe's biggest economy, which stunned markets and angered EU partners by unilaterally banning some speculative financial trades last week.
He is due to meet German Finance Minister Wolfgang Schaeuble in Berlin on Thursday after dinner in Frankfurt with European Central Bank President Jean-Claude Trichet.
On his flight to Europe from China, Geithner told reporters he would "emphasise the importance of a carefully designed global approach" to the next stage of financial reform.
Business television channel CNBC said he would also urge the Europeans to stress test their banks to identify those that need new capital and restore market confidence in the banking system.
The executive European Commission outlined a framework on Wednesday for a levy on banks' assets, liabilities or profits to pay in advance for the cost of future crises, setting the stage for a showdown on the tax at G20 summit in Toronto next month.
"On this question, we can go forward by ourselves, on our own," Barnier told Reuters. "It is not up to the United States to pay for the financial stability of Europe."
The Commission said the proceeds of a bank levy should be ring-fenced for national bank resolution funds, putting Brussels at odds with France and Britain, which want the money to help strapped national budgets.
Fears that Europe's debt crisis could engulf some banks have made them reluctant to lend to each other as happened during the 2007-2009 financial crisis.
The costs for banks to borrow dollars from each other crept up to a new 10-month high on Wednesday.
Money markets are "pricing in for a credit crunch", said Michael Pond, Treasury strategist at Barclays Capital in New York. "A crisis of confidence is developing once again."
OECD UPBEAT
The Paris-based Organisation for Economic Co-operation and Development said the global economy was recovering faster than expected from recession with Asia leading the way but remained at risk from huge debts in developed countries.
The OECD survey was relatively upbeat about the euro zone, forecasting growth of 1.2 percent this year and 1.8 percent in 2011 -- a more optimistic forecast than the European Commission's 0.9 and 1.5 percent respectively.
The OECD also said banks remained vulnerable, noting the high price of credit default swaps to protect bond investments.
European regulators conducted a confidential assessment of the solvency of national banking systems last September, but their reassuring conclusion failed to dispel doubts because they did not test individual banks or publish detailed findings.
Any European stress tests would have to differ from those conducted by U.S. regulators early last year, because Europe lacks a huge bailout fund like the $700 billion Troubled Asset Relief Program to plug any capital deficiencies found.
GERMAN BAN "COUNTER-PRODUCTIVE"
A senior U.S. Treasury official said Washington was unhappy with Berlin's "counter-productive" decision to go it alone in banning naked shorting of shares in top financial companies and sovereign euro bonds and related transactions in sovereign credit default swaps.
Geithner has also criticised European Union proposals to regulate hedge funds and private equity, warning that they could discriminate against non-European funds.
Far from yielding to widespread criticism, Berlin proposed on Tuesday extending restrictions on such speculative trades to include all shares, a government source said.
In the latest move in a German-inspired Europe-wide austerity drive meant to restore market confidence, Italy's cabinet approved a multibillion-euro package of budget cuts designed to slash the government's deficit to beneath the EU ceiling of 3.0 percent of GDP by 2012.
The 24 billion euro ($29.49 billion) plan includes a four-year freeze on public sector salaries, and a reduction in state personnel by replacing only one in five leavers.
EU Economic and Monetary Affairs Commissioner Olli Rehn said Italy's budget cuts were "very significant" and would help restore confidence in the euro zone. Credit ratings agencies Standard and Poor's and Moody's both said the package put Italy's finances on a sounder footing and should assure markets.
Italy's largest trade union, CGIL, with about five million members, said it would decide on a national strike after evaluating the measures to be presented by Prime Minister Silvio Berlusconi later on Wednesday.
(Additional reporting by Sumeet Desai in London, Daniel Flynn and Deepa Babington in Rome; writing by Paul Taylor, editing by Mike Peacock/Toby Chopra)
Air India employees call off strike
The two-day strike by employees of Air India was called off after the Delhi HC restraining order. More
Top Stories
As of 1 hour ago
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Meanwhile, Indian Army denies cautioning Antony on deals with US!
The Indian Army's Additional Directorate General (Public Information) at the General Staff Branch of the Integrated Headquarters of the Ministry of Defence said on Tuesday that a news report suggesting that the Chief of Army Staff, General V K Singh, had warned Defence Minister A K Antony on going ahead with Government to Government deals with the US was wrong and based on "hearsay".Additional Director General (Public Information) Major General Sanjeev Madhok said in a release: "The article mentions a letter written by the Chief of Army Staff to the Hon'ble Raksha Mantri Shri A K Antony on Foreign Military Sales (FMS). The news item is based on hearsay."
The article reported that General Singh had red-flagged the FMS purchases from the US, and written to Antony, cautioning him about problems that he counter with the FMS.
Over the past several years, the Indian defence establishment has been using the FMS programme of the US Government for major defence acquisitions.
In these non-tender purchases, the US Government procures the equipment on behalf of the Indian Government from its military companies, and takes a commission for the services rendered through the Pentagon's Defense Security Cooperation Agency (DSCA).
The 33-hour flash strike by a section of Air India employees was called off on Wednesday following a Delhi High Court order, but the management cracked down on strike leaders sacking 15 and suspending 13 others.
Several more employees involved in the strike which began on Tuesday afternoon and disrupted hundreds of flights, are likely to be either terminated or suspended, highly-placed sources said tonight, indicating that a total of upto 100 employees would face action.
Akshaya Tritiya festival may have been a damp squib, but India's gold demand for the quarter to end-March was robust, and could match the levels seen in the first quarter of 2007, when total demand stood at 211 tonnes, a senior official of the World Gold Council (WGC) said on Monday.
Demand for gold in Q1 has been robust, growth in value terms are in double digits, close to 40-45 percent..., Ajay Mitra, managing director India and Middle East, WGC, said in an interview, ahead of the release of quarterly demand figures on Wednesday, adding they look close to 2007 numbers.
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We expect the momentum to continue in coming months on excess surplus cash and liquidity, said Mitra, adding gold offers better returns than other asset class.
MCX gold struck a record high of 18,424 rupees on May 17, when safe haven buying overseas supported the yellow metal.
India recorded a 13 percent rise in consumption to 180.7 tonnes in the fourth quarter to end December 2009.
Demand had revived in 2010 in the world's largest consumer, after a dismal performance in 2009, when the worst monsoon in 37 years badly hit gold sales.
While gold sales have generally been good so far this year, the major gold buying festival of Akshaya Tritiya earlier this month saw a fall in demand due to record high prices, traders and retailers said. See
India's gold consumption during Akshaya Tritiya last year stood at 45 tonnes.
However, Mitra said sales for Akshaya Tritiya have been good on expectations of higher prices.
They (jewellers) have repeated their good sales in all jewellery category, Mitra said, without giving details on quantity consumed.
Mitra sees further growth in investments into Exchange Traded Funds (ETF).
The 3-4 tonnes of increase in investment in ETFs in recent months is remarkable and could be the next driver for growth, Mitra said.
India's gold collection under exchange-traded funds more than doubled to cross the 10-tonne mark in April, data from the funds showed. See
Investments into diamonds have been witnessing significant growth from the urban upper middle class, Mitra added.
India is the world's fourth biggest diamond consumer accounting for about 7 percent of total consumption, while the U.S. leads with 40 percent.
FDI in multi-brand retail set to get 100% backing
25 May 2010, 0437 hrs IST,Deepshikha Sikarwar,ET Bureau| NEW DELHI: The commerce and industry ministry is likely to propose 100% foreign direct investment (FDI) in multi-brand retail, opening the doors to the likes of Wal-Mart and Tesco, but will suggest stiff local sourcing requirements and mandatory investments in backward linkages. "We are preparing the paper that will be placed for public debate in some time," a senior official of the department of industrial policy and promotion (Dipp), the nodal body for foreign investment policy, told ET. Though the earlier view within the department was to keep the FDI limit at 51%, same as in single-brand retail, it has veered around to keeping it much higher and even pegging it at 100% to have an intense debate on the subject, he added. A final decision on the proposed cap will be taken after deliberations with the consumer affairs ministry, the nodal department for retail, he said.
Interestingly, in another paper on FDI in defence, the department has proposed foreign investment up to 74%. The paper on retail will be the second in a set of six discussion papers proposed to be put out by Dipp. The paper is also expected to make it mandatory for big multi-brand foreign retailers to create a back-end cash-and-carry for small shopkeepers, giving them benefit of scale on the sourcing side. "The idea is that big multi-brand retail outlets should enable growth of small retailers and not threaten their existence," the official said. Mandatory domestic procurement will ensure improved returns for farmers while strong back-end linkages will contribute to the development of food processing and cold chains in the country. The suggestions are consistent with the UPA government's emphasis on technology upgradation and flow of investments into the farm sector. The lack of cold chains in the country leads to wastage of about 40% of the farm produce, causing a loss of about Rs 50,000 crore annually, according to industry estimates. To further prevent any danger to small shopkeepers, particularly in small cities, MNC retailers will be allowed to set up stores only in cities with population upwards of one million, as per the discussion paper being given finishing touches by Dipp. They will also have to have stores with a minimum built-up area as the government wants to ensure that these lead to employment generation. Both the Left and BJP are completely opposed to opening up of multi-brand retail, a sector that employs millions, in the country. A parliamentary standing committee headed by BJP leader Murli Manohar Joshi had, in fact, recommended a complete ban on FDI in retail. However, the UPA government, sans the Left, seems more open to the idea of opening up multi-brand retail to FDI. Finance minister Pranab Mukherjee had in his 2010-11 budget speech said: "... The second element of the strategy relates to reduction of significant wastages in storage as well as in the operations of the existing food supply chains in the country. This needs to be addressed. Prime Minister Manmohan Singh recently said, "We need greater competition and, therefore, need to take a firm view on opening up of the retail trade." |
Business
Air India cracks the whip, employees end strikeIBNLive.com - 29 minutes ago New Delhi: Air India employees union called off its two-day old strike on Wednesday evening but not before a strong message from the Government. Patel gives free hand to AI to deal with striking employees Economic Times Obama says will not rest until Gulf oil spill plugged FREMONT, California (Reuters) - President Barack Obama said on Wednesday a top-kill procedure being attempted by BP Plc (BP.L) should greatly reduce or eliminate the flow of crude from the Gulf of Mexico oil spill -- if it works. In Louisiana, wildlife shows effects of gulf oil spill Washington Post Banks meet on cards for base rate consensusBusiness Standard - 44 minutes ago The guessing game by banks on each other's base rate is expected to be over soon when country's top bankers meet - at the behest of State Bank of India (SBI) - to discuss the new loan pricing mechanism. SBI hikes short-term corporate loan rates Financial Express Tata Steel posts a hefty Rs 2009-cr loss in FY10NDTV.com - 52 minutes ago PTI, May 26, 2010 (Mumbai) The steel major Tata Steel posted a consolidated net loss of Rs 2009 crore in FY10,against net profit of Rs 4950.90 crore in the previous fiscal, amid poor demand from across the globe following the global recession. Tata Steel posts loss in FY10, better than forecast Economic Times Tata Steel sees demand surge, posts net loss in FY10 Reuters India M&M: Going green all the way From being a tractor and utility vehicle player, the company has been steadily expanding its operations. The stake purchase in Reva by Mahindra & Mahindra (M&M) enhances the latter's scope of operations, as it gets set for the future of the automotive ... Mahindra close to buying out Reva Times of India M&M goes electric with Reva BloombergUTV Indian Hotels earmarks Rs 260-cr capex for FY11; Q4 PAT up 56%Business Standard - 47 minutes ago PTI / Mumbai May 26, 2010, 22:27 IST Tata Group hospitality arm Indian Hotels Company, which reported a 56.6 per cent jump in Q4 PAT at Rs 59.91 crore against Rs 38.25 crore in year-ago period today, said it has earmarked up to Rs 260 crore capex to ... Indian Hotels Company posts net loss of Rs 136 cr in FY'10 Economic Times OIL net jumps six-fold on price, volume Hindustan Times Sensex pulls back 365 points on short-coveringEconomic Times - 5 hours ago MUMBAI: Indian stock market indices ended near the day's high Wednesday, on short-covering ahead of May F&O series expiry. Nifty ends 110 pts higher on short covering, global cues Moneycontrol.com Govt revenue at Rs 12296 cr from BWA bid on day 3NDTV.com - 2 hours ago PTI, May 26, 2010 (New Delhi) The bid for the pan-Indian broadband wireless access spectrum rose to Rs 4198 crore on the third day of the auction on Wednesday against the base price of Rs 1750 crore. BWA auction: Govt rev crosses $2.6 bn mark on Day 3 Moneycontrol.com BWA auction price touches Rs. 3200 cr The Hindu S Tel to invest 700 crore in 3GEconomic Times - 21 minutes ago CHENNAI: Telecom operator S Tel, a joint venture between the Siva group and Bahrain-based Batelco, said it is investing Rs 700 crore for acquisition of 3G spectrum and roll out of services on Wednesday. S Tel to invest Rs 700 crore for 3G spectrum, network Business Standard Jewellery demand keeps sheen on tradeBusiness Standard - 2 hours ago The demand for gold in India and China will continue to grow in 2010, driven by demand for jewellery (as opposed to investment), in spite of high local prices, the World Gold Council (WGC) has said. Indian appetite increases four-fold to 147 tonne Financial Express Gold demand stays weak as prices hit record Economic Times Is Bhel due for a re-rating?Livemint - 30 minutes ago Rising costs and pricing pressures did not quite impact Bharat Heavy Electricals Ltd's operating profitability in the March quarter. Bajaj Electricals Q4 net dips 21% Hindu Business Line Airtel writes to Raja, says 2G fee demand unfairHindustan Times - 2 hours ago The country's largest telecom service provider Bharti Airtel on Wednesday opposed the recommendation of Telecom Regulatory Authority of India (TRAI) that operators pay for 2G spectrum that they hold beyond 6.2 MHz. Sunil Mittal opposes spectrum policy NDTV.com Companies withdraw TDSAT petition Economic Times How will new IDRs be taxed in India?Livemint - 55 minutes ago The first-ever issue of Indian depository receipts (IDRs) by a foreign company is now available in India with Standard Chartered Plc offering them. Muted response to StanChart IDR; FIIs continue to stay away Financial Express StanChart IDR subscribed 0.10 times on Day 2 Business Standard Lodha wins Mumbai plot in record dealMoneycontrol.com - 14 hours ago Real estate firm Lodha Developers paid more than twice the asking price to win a plot of land in central Mumbai for Rs 4050 crore (USD 850 million), in what is seen as the single largest land transaction in the city. Lodha Developers bags Wadala deal for Rs40.50bn India Infoline.com Gold climbs to hit another record of Rs 18660NDTV.com - 4 hours ago PTI, May 26, 2010 (Mumbai) Gold continued its north-bound journey to breach its overnight peak on the back of sustained buying spree by stockists and speculators in view of wedding season as well as firming trend in the overseas markets. Gold surges to Rs 18660 per ten gm Sakaal Times India, Turkmenistan explore energy cooperation India and Turkmenistan on Tuesday discussed energy cooperation and signed several agreements signalling the desire of both countries to strengthen bilateral ties. RBI asks banks to be vigilant against money scheme dealsBusiness Standard - 44 minutes ago PTI / Mumbai May 26, 2010, 22:41 IST In an effort to protect people from financial frauds, the Reserve Bank of India (RBI) today advised banks to be vigilant against transactions related to various money schemes, including cheap funding programmes and ... RBI alerts on fraud in remittance transactions Financial Express RBI asks states to manage cash balances effectively Moneycontrol.com CBI raids top NHAI officials' houses in Delhi and JaipurTimes of India - 16 hours ago NEW DELHI/JAIPUR: At a time when awarding of national highway projects is back on track, corruption charges against two top NHAI officials has come as a big blow to the authority's claim of following transparent norms in the bidding process. NHAI officers, two others sent to CBI custody by court Hindustan Times Bathinda refinery to start by March 2011 - HPCL NEW DELHI (Reuters) - Hindustan Petroleum Corp Ltd said the 180000 barrels-per-day Bathinda refinery will start operations by February or March of 2011. Rs 30000-cr HPCL refinery on west coast Hindustan Times HPCL plans to set up Rs 30000-cr refinery Business Standard Coal India IPO gets a leg upMoneycontrol.com - 4 hours ago The initial public offering of Coal India has got a shot in the arm, after the Cabinet Committee on Economic Affairs (CCEA) shortens the process for appointment of investment bankers. India cabinet OKs plan to hasten state firm sales Economic Times |
MARKETS
365.36MARKET UPDATE
Today the domestic market opened strong as most Asian stocks gained, but came off their early highs on jitteriness in the market. However the market soon gained momentum after a firm opening triggered by higher Asian stocks. The market once again pared gains in early afternoon trade. But the Sensex again recovered from lower level later as European stocks opened on a positive note in the afternoon session which led to buying interest among investors. The market remained volatile through out the session as investors roll over position ahead of the expiry of derivative segment tomorrow. In the final hour of the trading session the investors showed buying interest across the sectors which pulled the market further up to end its session on high note after hitting 3-1/2 month lows on Tuesday, 25 May 2010.
Among the Sensex pa... » Send to friends
During the afternoon trading session at BSE, TCS reported the top gainer from the Sensex pack, as the stock is now trading higher by (4.08 per cent) while Grasim Inds dipped by (18.16 per cent).
At 2:30 PM BSE SENSEX was at 16,305.00 up by 282.52 points or by (1.76 per cent) and the NSE Nifty was trading at 4,892.20, up by 85.45 points or by (1.78 per cent).
The BSE MIDCAP was at 6,566.57 up by 77.57 points or by (1.20 per cent) and the BSE SMLCAP was at 8,270.49 up by 94.25 points or by (1.15 per cent).
The BSE IT index was at 5,058.81 up by 123.96 points or by (2.51 per cent). The main gainers were TCS (3.52 per cent), Patni Computer (2.23 per cent), HCL Tech (2.06 per cent), Infosys (2.04 per cent), Wipro (2.00 per cent), Rolta India (1.49 per cent) and Financial Tech (0.95 per cent).
The BSE Realty index was at 2,939.12 up by 69.58 points or by (2.42 per cent). The main gainers were Peninsula Land (4.02 per cent), Unitech (3.48 per cent), Sobha Dev (3.01 per cent), HDIL (2.98 per cent), DLF (2.52 per cent), Indiabulls Real Est (2.46 per cent)... » Send to friends
The market breadth showing overall strength was strong at the moment. On BSE, out of 2,780 stocks traded so far, 1742 stocks advanced whereas 950 stocks declined and 88 stocks were unchanged.
At 1:30 PM, the BSE Sensex is trading higher by 267.34 points or 1.67 per cent at 16,289.82 while the NSE Nifty was at 4,890.20 higher by 83.45 points or by 1.74 per cent.
The BSE MIDCAP was at 6,558.51 higher by 69.51 points or by 1.07 per cent while the BSE SMLCAP trading at 8,264.84 higher by 88.60 points or 1.08 per cent.
On the economic front The Power Minister, Mr. Sushil Kumar Shinde has said that confidence among the foreign investor needs to be created in power sector to attract FDI in the power sector.
Although in the Electricity Act, 2003 a provisions for 100 per cent FDI in the power sector is created but till now there is not much response. However many corrective steps has been taken now to help the power sector grow, which is restoring confidence among foreign investors, said Mr. Shinde.
Gainers from the Sensex Pack till now are - » Send to friends
At 12.30 PM BSE SENSEX was trading at 16,265.14 up by 242.66 points or (1.51 per cent) and the NSE Nifty was trading at 4,879.25 up by 72.50 points or (1.51 per cent).
The BSE MIDCAP was at 6,551.53 up by 62.53 points or by (0.96 per cent) and the BSE SMLCAP was at 8,266.60 up by 90.36 points or by (1.11 per cent).
On the economic front, as per the recent study, India became the UAE''s largest trading partner in 2009, ousting China from the top position and accounting for nearly 15 per cent of the country''s total commercial exchanges.
Besides, Heavy Industries Minister, Mr. Vilasrao Deshmukh said that steps are being taken to renew sick public sector units (PSUs) through joint... » Send to friends
Standard Chartered Plc received a muted initial response as the issue received bids for 1.11 crore shares compared to 20.4 crore shares on offer. The price band for the IDR is Rs. 100-115 each. Retail investors will be allotted shares at 5 per cent discount to the issue price. The issue closes on May 28, 2010. Ten IDRs will represent one underlying equity share of Standard Chartered Plc.
On the sectoral front, all the 13 Indices traded up in the range of 0.64 per cent-2.53 per cent. Auto stocks jumped on robust car sales numbers that rose 39.5 per cent to 143,976 cars in April 2010 over April 2009, source SIAM. Banking and Realty stocks spurted on bargain hunting as the stocks were hammered in previous trading sessions. Metal stocks gained on the back of rise in commodity prices globally.
The Market breadth, indicating the overall strength of the market, was strong. On BSE, out of 2602 stocks traded so far, 1,824 shares advanced while 697 shares declined. Nearly 81 shares are unchanged.
As per NSE updates, Sterlite Ind (up by 3.72 per cent), » Send to friends
At 10.30 IST, the BSE Sensex is trading higher by 239.02 points or by (1.49 per cent) at 16,261.5 and the NSE Nifty is trading up by 71.85 points or by (1.49 per cent) at 4,878.6.
The BSE Mid Cap is now trading higher by 82.3 or by (1.26 per cent) at 6,571.3 and the BSE Small Cap is trading higher by 124.71 points or by (1.52 per cent) to 8,300.96.
Hindustan Construction Company spurted 1.71 per cent to Rs 104.05 after the company informed that it has secured an order worth Rs 887.92 crore from Nuclear Power Corporation of India for civil works for the main plant of Rajasthan Atomic Power Project.
Marico Ltd surged by 2.14 per cent to Rs. 102.70 after a new th... » Send to friends
At 09.20 IST, the BSE Sensex is trading higher by 206.73 points or 1.29 per cent at 16,229.21 and the NSE Nifty is trading up by 65 points or 1.35 per cent at 4,871.75.
The BSE Mid Cap is trading up by 97.32 points or 1.49 per cent at 6,586.32 and the BSE Small Cap is trading up by 135.19 points or 1.65 per cent to 8,311.43.
The top gainers of the BSE Sensex pack are Mahindra & Mahindra (Rs. 530.50, +2.78 per cent), Hindalco Indus (Rs. 140.90, +2.32 per cent), Reliance Communication (Rs. 141.55, +2.17 per cent), Jaiprakash Associates (Rs. 118.65, +2.15 per cent) and Sterlite Industries Ltd (Rs. 620.00, +2.01 per cent) among others.
The Overall market breadth is strong as 1,330 stocks are advancing while 253 stocks are declining and the 28 stocks remained unchanged on BSE.
On Tuesday, the US market closed flat from loss reported in the early hours of trade. The S&P 500 fell by 3 per cent to its lowest level since November in ... » Send to friends
In the major indices, the Dow Jones Industrial Average (DJIA) closed with a loss of 22.82 points or 0.23 per cent lower at 10,043.75, while NA... » Send to friends
| Tuesday May 25, 01:51 AM | Source: Indian Express Finance |
PM pegs growth at 10%, harps on pro-poor policies
By fe BureausPrime Minister Manmohan Singh on Monday said the UPA-II government's path is 'well laid out', as it seeks to strengthen the 'pro-poor policies' and focus on rapid economic expansion, with a medium-term target of 10% a year. Addressing a press conference here to mark completion of the first year of the Congress-led government's second term, Singh asserted that the targeted growth rate is achievable, "given our savings and investment rates".
Investment rate in the economy was 31.7% of the gross domestic product in the third quarter of last fiscal ending December one of the highest in the world.
Although Singh did not spell out his plans on the long-pending financial and economic reforms, analysts said that the target he set out for himself would entail a prompt reform push. Singh himself has pitched for higher investment in social and economic infrastructure, enhanced farm productivity and a fresh impetus to the manufacturing sector all of which would involve key reform steps.
"The PM may not have mentioned economic reforms on Monday, but it is implicit in the agenda set out for a 10% growth in the medium term, that also touches upon the need for increased investments in infrastructure. If we are to have $1 trillion investment in infrastructure during the next five year plan, obviously, it entails development of the corporate bonds market as well as broader financial sector reforms," Samiran Chakraborty, regional head of research, India, Standard Chartered told FE.
Singh said that the government expects 8.5% GDP growth this fiscal, significantly higher than the previous year's 7.2%.
On inflation which is almost at double-digit level and a cause for concern for policymakers, he said it would moderate to around 5-6% in December, and hinted at a permanent Centre-state mechanism to monitor the inflationary tendencies. Inflation, especially the resultant high price of basic foods that affects the common man, was the first question he had to answer in the conference. Headline inflation for the month of April stood at 9.58%, and the latest weekly inflation numbers saw food inflation inching up for the second straight week to touch 16.49%.
The PM said the government is committed to speed up economic growth to a spectacular 10% a year in the near future, which he said would require putting more money into social and economic infrastructure and in boosting agricultural productivity.
Government estimates in February showed that agriculture output may have decreased by 0.2% last fiscal due to the severe drought leading to an 8% fall in food grain output, 5% dip in oilseed production and 11.8% fall in sugarcane output. Manufacturing sector, on the contrary, showed a rebound to 10.9% in 2009-10 compared to a meagre 2.8% growth the year before as the government cut taxes and the RBI helped in lowering the cost of funds.
The PM did not make any comment on oil sector reform, the urgency of which has come to the fore with the prospect that the average yearly price of Indian basket of crude this fiscal would be over $90 a barrel. Neither was any mention in his opening statement or later while answering queries about the much-sought-after steps to open up insurance, banking and retail sectors to overseas players.
"Most important pending reform is the oil sector reform. We have already missed the bus last year when oil prices were low. This is now the most opportune time for implementing these reforms," said Bank of Baroda chief economist Rupa Rege Nitsure.
The prime minister made the self-critical assessment that his coalition government could have done more in its first year. He however listed out the positives as well. "We have given our country a government which works, which has delivered high rates of growth, which has accelerated the process towards inclusive growth and I have every reason to believe we will complete our term," Singh said.
Singh said the projected 8.5% growth this fiscal is widely regarded as one of the best performances among the larger economies of the world. The ruling coalition, which came back to power last year on the promise of an 'inclusive growth' agenda is betting on a fast economic growth to take more than one third of the country's 1.2 billion people out of poverty.
'Agni 5 can target China, Pak by 2011'
India is likely to enter the elite club of nations with Inter-Continental Ballistic Missile (ICBM) capability as the over 5,000 km range Agni-5 missile was expected to become a reality by next year."Work is progressing satisfactorily in the development of Agni-5, which is expected to become a reality next year. With this, DRDO would have given India a comprehensive indigenous strategic capability, available with only a few nations of the world," DRDO chief V K Saraswat said at the National Technology Day awards function here.
Agni-5 will be the first canistered ballistic missile with range of over 5,000 km into Indian inventory, bringing possible military targets in the whole of China and Pakistan within striking range. The missile is likely to be tested early next year.
Missiles which are capable of being launched from canisters can be fired from multiple platforms and are easily transportable.
Commenting on the Indian missile programme, Saraswat said, "the success of Agni-3 and other tests have confirmed India's strategic deterrence capability, which could not have been possible without the preceding developmental efforts in these programmes."
FMCG cos ad spend killing profit
They swear by slogans like 'how can your shirt be whiter than mine'. This cutthroat rivalry among FMCG players is pushing some, including market leader HUL, to spend more than what they earn on ads and promotion.Hindustan Unilever spent a whopping Rs 2,449.02 crore on advertising and promotions during the last fiscal, ended March 31, 2010 -- way higher than the company's net profit of Rs 2,164.61 crore for the same year.
During the fiscal, the company witnessed the same trend over three quarters, when advertising and promotion expenses were higher than the company's net profit. Even in the October-December quarter, ad expenses at Rs 632.88 crore were not far below the net profit of Rs 649.11 crore.
In the last quarter ended March 31, 2010, these expenses stood at Rs 626.52 crore, as against net profit of Rs 581.2 crore. During the January-March quarter, HUL was engaged in a fierce advertising battle with rival Procter & Gamble on claims and counter-claims about how its detergent was superior than the other.
While P&G's Indian Home Care division is not listed and therefore its quarterly figures could not be ascertained, one of the group's listed entities in the country, P&G Hygiene & Health Care Ltd also spent more than its profit on advertising and sales promotion. But, this was not the case in the previous two quarters of the current fiscal, as also in the last fiscal year ended June 2009.
Another listed entity of the P&G Group, Gillette India, spent less than its net profit on advertising and sales promotion in the three quarters of the current fiscal and in the last fiscal ended June 2009.
The other Indian FMCG firm having spent more than profits on these fronts is Marico, whose advertising and sales promotion expenses stood at Rs 351.11 crore as against net profit of Rs 233.54 crore in FY'10.
Companies like Dabur India, Colgate-Palmolive and Jyothy Labs, however, spent less than profits on these counts.
Globally also, FMCG companies spend large amounts on advertising. Global giant Unilever, the parent of HUL, spent much more than its net profit during 2009. The company spent 5.3 billion euro on advertising and promotion last year, 2009, as against net profit of 3.66 billion euro.
In comparison, these expenses stood lower at 5.05 billion euro, than net profit of 5.28 billion euro in 2008.
Rival P&G recorded a total advertising cost, including TV, print, radio, internet and in-store ad expenses, of 7.6 billion dollars in 2009, as against net earnings of 13.4 billion dollars.
During 2008, these expenses for P&G stood at 8.6 billion dollars, again lower than about 12 billion dollar of net profit.
Timeline of articles
Global rich want trusts, Swiss banks stay wary
26 May 2010, 2116 hrs IST,REUTERSRich bank customers are showing a growing interest in Anglo-Saxon trusts as a way to structure their wealth, but Swiss private banks are reluctant to up their offer as international pressure on tax disclosure builds.
Trusts, a legal concept born in 13th-century England to safeguard the assets of knights leaving for the Crusades, make up an estimated $5-trillion global market and are viewed by lawyers and accountants as a growth area for the heavily pressed Swiss offshore banking industry.
Switzerland, the world's leading offshore centre, came under attack during the credit crisis by cash-strapped nations seeking to recoup tax revenues and its banks are seeking a new business model while traditional bank secrecy is eroding.
Several Swiss private bankers told Reuters they had noticed an increase in demand by wealthy customers for trusts, which are appealing to clients from emerging markets such as Latin America or Russia as they offer protection from expropriation, forced inheritance laws or expensive divorce settlements.
Trusts -- seen by some experts as only worthwile for clients with at least $2 million in assets -- can also help reduce a client's tax burden as the assets are passed on to a third party in a low-tax jurisdiction.
But many Swiss private bankers remain wary of trusts as such structures could attract more unwelcome attention from foreign tax authorities, and there is an intrinsic conflict of interest for trustees between their loyalty to the client and to the bank that employs them.
"The market has seen an increase in demand," said David Zollinger, who heads the New Markets division at Switzerland's oldest private bank Wegellin.
"(But) my perception is that Swiss private banks are gradually curbing their offer in this field. There is not only a conflict of interest and anyway these days banks that provide structures to clients run the risk to be considered an auxiliary to whatever offence the client may have committed abroad."
Nevertheless, demand is strengthening in many regions including Asia, where wealth is being passed on by self-made billionaires to the next generation.
To the private banks, trusts they can also offer a source of stability as the assets are normally held long-term.
"Once in the trust, the assets are looked after for the benefit of the family and therefore tend to be very sticky assets," said Nick Warr, a partner at law firm Taylor Wessing.
All major Swiss private banks, including UBS and Credit Suisse, offer trust services.
GROWTH MARKET?
Although the Swiss have no trust legislation per se, Switzerland recognises foreign law with regards to trust and is home to scores of legal and financial professionals active in this business, mainly on behalf of non-Swiss-based customers.
'Off the ground'
Cricketer Harbhajan Singh at a promotional event in Kolkata on Wenesday. PTIAir India strike
Stranded passengers due to strike by Air India's ground and technical staff standing outside the airport. IE photo: Renuka PuriExtreme heat
Foreign tourists brave the heat on a hot day near Rajpath in New Delhi. (PTI)Walk in style!
Models walk the ramp during a fashion show in Jaipur. (PTI)Buddhist monks
Buddhist monks carry saplings of the Holy Bodhi tree and relics of Lord Buddha on the occasion of Budh Purnima. (PTI)In Depth: Full Coverage
Business
Mahindra to buy 55.2 pct stake in Reva
Mkts recover, Sensex ends 365 pts up
The benchmark Sensex rebounded by over 365 pts on buying by funds and short covering. Striking AI staff talks peace as 100 flights cancelled
Air India cancelled another 100 flights across the country leaving thousands of passengers stranded. With AI staff on strike, pvt airlines make hay
AI employees call off stir after HC order and Govt tough talk
AI employees call off stir after HC order and Govt tough talk
The 33-hour flash strike by a section of Air India employees was called off following a Delhi High C...
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'Indian involved in cricket match-fixing'
Caste census cracks Cabinet
PM Manmohan Singh chaired a Cabinet meet, but failed to solve the controversial caste-based census c... Canada denies visa to IB man, grants it after govt talks tough
Sneak into India fast and do something big: Hizb
'Agni 5 can target China, Pak by 2011'
Bail plea: No immediate relief for Rathore
Rathore was jailed after a sessions court enhanced his prison term to 18 months in Ruchika molestati...http://www.indianexpress.com/
PM wanted auctions or higher fees for 2G
| Font Size |
Anandita Singh Mankotia,Rishi Raj
Posted: May 26, 2010 at 2258 hrs ISTNew Delhi The Prime Minister may have left the fate of telecom minister A Raja to the outcome of the ongoing CBI investigation into the alleged 2G spectrum scam, but the fact is that Manmohan Singh himself favoured auctions or revision of entry fee, which was at that time benchmarked to old figures.
In a letter to Raja on November 2, 2007, a copy of which is with FE, the PM said: "In order that spectrum use efficiency gets directly linked with correct pricing of spectrum, consider (i) introduction of a transparent methodology of auction, wherever legally and technically feasible, and (ii) revision of entry fee, which is currently benchmarked on old spectrum auction figures." The PM wrote the letter when the matter relating to new licences was being deliberated in the government.
Aware that DoT had received a large number of applications for fresh licences against the backdrop of inadequate spectrum to cater to overall demand, the PM had said: "Since spectrum is limited, even in the next several years, all these licensees may never be able to get spectrum."
"The telecom policy that had been approved by the Union Cabinet in 1999 specifically stated that new licences would be given subject to availability of spectrum," added the PM.
In fact, through its recommendations in August, 2007, the Telecom Regulatory Authority of India (Trai) had also had suggested that licence fee should be reviewed, but the suggestion was tweaked by Raja. An earlier Trai recommendation had clearly stated that new licences should be given only once the government ascertains that there's enough spectrum to ensure proper growth of existing operators.
Raja, however, went ahead and granted licences to eight new operators in January, 2008 at old prices, something which the PM had cautioned against. The Central Vigilance Commission (CVC) found irregularities in the process and called for a CBI investigation, which is currently on.
At his press conference on Monday, when the PM was questioned on Raja's role in the 2G spectrum scam, this is what he had to say: "It is true that if you compare figures of what was collected in 2G and then through the auction of 3G spectrum, there is a huge gap. Some complaints were received by the CVC and passed onto the CBI. The investigation by the CBI is on and it would not be appropriate for me to comment on it. Our government is clear, however, that wherever we find corruption, at any level we will take action."
http://www.expressindia.com/latest-news/PM-wanted-auctions-or-higher-fees-for-2G/623641/ Search this story
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| Tuesday May 25, 10:50 PM |  |
Indian oil firms eyeing gas fields in Turkmenistan
NEW DELHI (Reuters) - Indian oil firms are looking at acquiring stakes in gas fields in Turkmenistan, Central Asia's top gas exporter, in a bid to meet the growing energy demand of Asia's third-largest economy.
"We are looking at some of the blocks...We offered to invest in onshore gas producing fields," Oil Secretary S. Sundareshan told reporters on Tuesday.
Oil Minister Murli Deora along with the oil secretary and executives from state-run firms on Tuesday met Turkmenistan President Gurbanguly Berdimuhamedov, who began his three-day visit to India on Monday.
India has been aggressively scouting for overseas oil and gas assets to meet the supply deficit in Asia's third-largest oil consumer.
India's 2009/10 oil product consumption, a proxy for oil demand in the country, rose an annual 3.5 percent, higher than the government estimates of 2.4 percent, while its annual crude output rose 0.5 percent and gas output was up nearly 45 percent.
Both sides discussed a Turkmenistan-Afghanistan-Pakistan- India (TAPI) pipeline, Deora said, without elaborating further.
The pipeline, valued at $4 billion, has long been discussed by governments and energy companies, but instability in Afghanistan has so far made its construction impossible.
Pakistan and India had expressed interest in buying up to 70 billion cubic metres of Turkmen gas a year, or twice as much as initially proposed under the draft TAPI project, a Turkmen government source earlier told Reuters.
Deora said India has also offered to set up a petrochemical plant in Turkmenistan, if gas supplies are guaranteed.
(Reporting by Nidhi Verma; editing by Malini Menon and Keiron Henderson)
| Wednesday May 26, 04:10 PM | |
March quarter growth seen strongest since Dec 07
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| |
REUTERS FORECAST - India's economy probably grew 8.7 percent in the March quarter from a year earlier, its strongest since December 2007, the median forecast of 20 economists showed. Forecasts in the survey ranged between 7.3 and 9.4 percent.
The predicted growth, on the back of robust manufacturing and a pick up in consumer spending, would be an acceleration from an annual 6 percent expansion in the December quarter.
A poll of 22 economists showed Asia's third-biggest economy likely grew 7.2 percent in the financial year ended March 31, up from 6.7 percent in 2008/09.
FACTORS TO WATCH:
* Manufacturing production climbed 14.3 percent in March from a year earlier, compared with a fall of 3.3 percent in March 2009. Consumer goods output rose an annual 10.6 percent in March from 1.3 percent from a year earlier.
* In April, the Reserve Bank of India raised key interest rates by 25 basis points for the second straight month to tame near double-digit inflation and said further hikes were likely as it moves policy towards pre-crisis settings.
* Last week, RBI Governor Duvvuri Subbarao told reporters the central bank had not yet fully exited from its accommodative monetary stance. "We have begun policy exit; we have to traverse down that line," he said.
* Industrial output grew 10.4 percent in the 2009/10 fiscal year, faster than an upwardly revised 2.8 percent in 2008/09.
MARKET IMPACT:
* Stronger-than-expected growth data could briefly push up bond yields and overnight indexed swap rates but investors are focused more on how the euro zone crisis may impact the central bank's pace of policy tightening.
* Traders will also await April's infrastructure output growth data due on Monday, and the HSBC Markit Purchasing Managers' Index for May expected a day later.
* The yield on the benchmark 10-year government bond has fallen 28 basis points in May as worries about the euro zone's debt crisis triggered demand for safe-haven debt.
(Reporting by Anurag Joshi; Additional reporting by Mumbai and New Delhi bureaux; Editing by Ranjit Gangadharan & Kazunori Takada)
(For more business news on Reuters Money visit http://www.reutersmoney.in)
| Wednesday May 26, 09:20 PM | |
Indian Hotels earmarks 2.6 bln rupees for expansion
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MUMBAI (Reuters) - Indian Hotels Co Ltd plans to spend around 2.6 billion rupees in FY11 on new projects across India, its chief financial officer Anil Goel told reporters on Wednesday.
The owner of the Taj luxury chain plans to open properties in New Delhi, Bangalore, Hyderabad and Guwahati, Goel said.
"We have enough projects under implementation in the next twelve months. The idea is to focus on growth this year...we are seeing visible improvement in the market," Goel said.
The firm plans to add 1,647 rooms this fiscal, across 13 properties in India and overseas, said Ajoy Misra, senior vice president, sales and marketing.
It had added 822 rooms in the previous year.
The hotel chain, part of the Tata conglomerate, reported a consolidated net loss of 1.36 billion rupees in 2009/10 compared with a profit of 124.6 million rupees a year ago.
Consolidated profits were hurt "due to the drop in profitability of its hotels in the USA because of the impact that the recession had in that market," as well as a slowdown in the domestic market, it said in a statement.
India's hotel and tourism industry is currently recovering from a near two-year economic slowdown made worse by the terror attacks in Mumbai in November 2008, which hit tourism traffic.
The Taj Mahal property of Indian Hotels in southern Mumbai was one of the sites hit by the terror attacks.
Officials said there has been a steady increase in occupancy levels though room rates were not rising as fast.
"The fourth quarter has been encouraging. Occupancy seems to have come back to levels seen in 2007/08. Rates are however lagging a bit," Misra said.
"The good news is that rates have started rising, above the third quarter and certainly above the first and second quarters".
The firm has raised 7 billion rupees in 2009/10 by issuing low coupon non convertible debentures and used the proceeds to retire some of its foreign currency debt.
Its net debt as of March 31 stood at 38 billion rupees.
Indian Hotels shares ended 2.95 percent lower at 98.85 rupees in a firm Mumbai market.
2010: A Greek Odyssey
Times of India - Sudipto Mundle - 1 hour ago
Though bigger than the Dubai debt hiccup a few months ago, the Greek debt crisis is nowhere near the scale of the Great Recession that hit the world two ...Can the European Union survive the debt crisis? - Christian Science Monitor
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OECD: Greek Economy To Shrink 3.7% In 2010
Wall Street Journal - 8 hours agoATHENS (Dow Jones)--Greece's crisis-hit economy is expected to shrink 3.7% this ... said the balance of risks for the Greek economy is "on the downside. ...Euro Debt Crisis Threatens Global Recovery, OECD Says - RTT News
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Bank urged to raise UK interest rates - Financial Times
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Geithner calls for action on EU crisis plan
Reuters - Stefan Wermuth - 3 hours ago
Washington has been dismayed by how far the Greek crisis has spread to the rest of the euro zone and once again put the entire world banking system under ...UK opposes EU bank regulation - HULIQ
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Gold demand to strengthen in 2010
Professional Jeweller - Rachael Taylor - 58 minutes ago
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Commerce ministry closely watching Eurozone events
Economic Times - 3 days ago23 May 2010, 0046 hrs IST, PTI NEW DELHI: Commerce minister Anand Sharma has ... "I do not foresee any major impact (of the Greek crisis on our economy), ...Greek tragedy won't play out in India: FM
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Credit market risk indicators increasingly on radar screen
Globe and Mail - 6 hours ago26, 2010 8:12AM EDT They're esoteric credit market risk measures with the weird, ... In March, just before the Greek crisis started to worry investors, ...
Factbox: Austerity measures around eurozone
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Euro fears grow as economic uncertainty continues
Bild.com - 2 hours agoThe reason: Uncertainty over whether the Euro and Greek crisis is putting ... increase of 1.9 per cent in Germany's gross domestic product (GDP) for 2010! ...Euro crisis weighs on German consumer sentiment: GfK - AFP
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Crisis may be death knell for euro's lofty ambitions
Globe and Mail - 18 hours ago26, 2010 7:07AM EDT Once trumpeted as a peer to the US dollar on the international ... central bank said in a report that "in the wake of the Greek crisis, ...ASIA FX: US Dollar Holds Mixed Bias, Euro Remains Soft - Market News International
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2010: A Greek Odyssey
Can the European Union survive the debt crisis?
Greek crisis, German politics
Germany: Europe's reluctant ATM
World debt crisis: eight reasons you should care
Plunge in the euro is somewhat orderly
World debt crisis: Eight reasons you should care
Too soon to mark 'W' recovery amidst economic chaos
Mini-Depression or Great Recession?
Is the Falling Euro an Opportunity or a Threat to US Importers?
Euro Crisis Is Tip of the Iceberg
Italy Adopts $30 Billion of Cuts in EU Deficit Push
Defining moment for the European project
Ongoing Efforts By European Officials To Contain Debt Crisis But No Response ...
How Low Can The Euro Go -- And Does It Matter?
Too small is 'too big' to fail
Europe and the Euro: In Freefall
Greece: Europe's 'Trishanku'
Bad news for everyone
The Weekly Standard The 'Beneficial Crisis'
The Greek crisis and lessons
Greek Debt Crisis and Bailout Not as Bad As You think
Greece to exit recession 2011
Scenarios: Europe's debt woes could weigh on US recovery
Markets scare Europe into action on spending
Debt crisis spills into Spain, propels dollar
The Macro View: Cost of euro currency stability – an eyewatering €750bn?
Europe debt crisis takes dent on China
EU Crisis Update: Market Remained Weak Despite Stabilization. Risk To The Downside
Our Mythical Greek Bailout
| Wednesday May 26, 09:20 PM | |
Indian Hotels earmarks 2.6 bln rupees for expansion
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MUMBAI (Reuters) - Indian Hotels Co Ltd plans to spend around 2.6 billion rupees in FY11 on new projects across India, its chief financial officer Anil Goel told reporters on Wednesday.
The owner of the Taj luxury chain plans to open properties in New Delhi, Bangalore, Hyderabad and Guwahati, Goel said.
"We have enough projects under implementation in the next twelve months. The idea is to focus on growth this year...we are seeing visible improvement in the market," Goel said.
The firm plans to add 1,647 rooms this fiscal, across 13 properties in India and overseas, said Ajoy Misra, senior vice president, sales and marketing.
It had added 822 rooms in the previous year.
The hotel chain, part of the Tata conglomerate, reported a consolidated net loss of 1.36 billion rupees in 2009/10 compared with a profit of 124.6 million rupees a year ago.
Consolidated profits were hurt "due to the drop in profitability of its hotels in the USA because of the impact that the recession had in that market," as well as a slowdown in the domestic market, it said in a statement.
India's hotel and tourism industry is currently recovering from a near two-year economic slowdown made worse by the terror attacks in Mumbai in November 2008, which hit tourism traffic.
The Taj Mahal property of Indian Hotels in southern Mumbai was one of the sites hit by the terror attacks.
Officials said there has been a steady increase in occupancy levels though room rates were not rising as fast.
"The fourth quarter has been encouraging. Occupancy seems to have come back to levels seen in 2007/08. Rates are however lagging a bit," Misra said.
"The good news is that rates have started rising, above the third quarter and certainly above the first and second quarters".
The firm has raised 7 billion rupees in 2009/10 by issuing low coupon non convertible debentures and used the proceeds to retire some of its foreign currency debt.
Its net debt as of March 31 stood at 38 billion rupees.
Indian Hotels shares ended 2.95 percent lower at 98.85 rupees in a firm Mumbai market.
(Reporting by Aniruddha Basu; Editing by Ramya Venugopal)
| Wednesday May 26, 03:30 AM | |
Brazil to grow, Europe may hurt global recovery - IMF
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SAO PAULO (Reuters) - Brazil's economy could surge this year, a stark contrast to the risks the euro zone debt crisis pose to the global economy, the International Monetary Fund's managing director said on Tuesday.
Dominique Strauss-Kahn told reporters "the 7 percent (growth) will certainly be a reality" for Brazil in 2010.
With that much expansion in Latin America's largest economy, he said there was a "risk of overheating and I think the government is perfectly aware of this and is taking action."
"Our forecast for 2011 is that the economy will go back to something like 4.5 or 5 percent (growth)," Strauss-Kahn said.
In contrast, the euro zone sovereign debt crisis is the biggest threat to the global economic recovery, he said at a separate event in Sao Paulo.
Economists in a weekly central bank survey saw roaring growth of 6.46 percent for Brazil this year, even as European countries like Greece, Spain and Portugal struggle with weighty debt loads that have prompted fears of sovereign defaults.
Strauss-Kahn said those fiscal problems must be addressed as European countries seek to expand their economies and that the remaining work on overhauling financial regulation must be consistent to avoid derailing the global economy further.
Investors have been unconvinced by a $1 trillion lifeline announced by the European Union and the IMF to reinforce the euro and contain fiscal problems, with riskier assets such as stocks tumbling around the world.
Brazil's benchmark Bovespa stock index fell more than 3 percent in intraday trade on Tuesday as investors ran to safe havens such as the U.S. dollar. The index pared some of those losses to close down 1.22 percent.
(Reporting by Ana Nicolaci da Costa; Writing by Luciana Lopez; Editing by John O'Callaghan)
World stocks bounce off 9-month lows
Buying kicked in on stocks after global indices hit their lowest levels since last August this week, and Wall Street also looked set to open on a firm note.
The MSCI index of world stocks rose 1 percent after falling 1.8 percent on Tuesday while emerging stocks rose 2.2 percent, partially recovering Tuesday's 4 percent decline -- their biggest one-day fall in over a year.
The euro was down on the day but above lows hit on Tuesday while the oil price rallied nearly 3 percent, climbing back above $70 a barrel after a U.S. industry report showed a steep drop in gasoline stockpiles.
Financial markets remained jittery, however, and investors still appeared inclined to reduce risk exposure because of tough financing conditions in the euro zone that are fuelling fears the slowdown in credit will hit the banking sector.
Tightening U.S. banking regulation and talk of war on the Korean peninsula are also weighing on risk appetite, which means equity gains could prove fleeting.
"We are technically very oversold so we expect to see a bounce in the market," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
"But the longer-term picture is still quite challenging ... Italy has just made cuts to its budget which mean the economy will be put under severe pressure for quite some time."
By 1120 GMT, the FTSEurofirst 300 index of top European shares was up 2 percent, recouping almost all of the previous session's losses.
Banks rose the most, with British banks Lloyds Banking Group and Royal Bank of Scotland up 5-6 percent and the rebound in energy and commodity prices boosted mining and oil firms.
U.S. stock futures were higher. S&P 500 and Nasdaq futures rose 0.7 percent each while Dow Jones futures were up 0.5 percent by 1120 GMT.
However, close to $4 trillion has been wiped off the MSCI world stocks index since April 15 and many investors expect selling to resume once the bargain hunters step away.
"I don't interpret (higher shares) as a sign that risk appetite is coming back to the market," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.
MarketDuration: 03:51
Posted: 26 May, 2010, 1825 hrs IST
Duration: 01:26
Posted: 26 May, 2010, 1821 hrs IST
Speed up defence research, deliver on time: Manmohan to scientists
Armed forces have temptation to opt for imported weapons: DRDO
Overcome temptation to buy arms abroad, says DRDO chief
"In many areas, we have moved fast, but our competitors have often moved faster. It is a fact our current level of self-reliance in defence R and D (research and development) is less than our capabilities and it needs to be stepped up significantly," Dr. Singh said, addressing defence scientists here on the occasion of National Technology Day. more by Manmohan Singh - 2 hours ago - The Hindu (17 occurrences) |
PM says self-reliance in defence R&D must be stepped up
Public-private partnership in defence a must: PM
Onus of self-reliance should be shared by all, says DRDO chief
Indian Military Admonished To Buy More In-Country
Govt to encourage Public-Pvt partnership in Defence sector: PM
Srinivasan misused position to help his team: Modi
Suspended IPL boss wants inquiry committee to not contain BCCI president ...
Modi asks BCCI chief to withdraw from probe
Lalit Modi ups ante against BCCI brass
'No one can doubt my integrity'
Suspend and issue show-cause notice to Srinivasan, says Modi
BCCI decides to do away with post-match IPL parties in season four
SELF DEFENCE - No holds barred: Modi attacks BCCI
Manohar pushed Kochi bid, Srinivasan attempted to 'fix' match: Modi
| Wednesday May 26, 03:10 AM | |
U.S. consumer confidence rises despite market upheaval
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By John Parry
NEW YORK (Reuters) - U.S. consumer confidence rose in May to its highest level in more than two years as an improving jobs outlook defied for now the growing fears about European debt market turmoil and threats to global growth.
By contrast, the U.S. housing market, another pillar of the economy, is looking shaky after the expiration at the end of April of a home buyer's tax credit.
Jobs were key to consumers recovering their nerve. A Conference Board report on Tuesday said fewer of those surveyed found jobs "hard to get." Consumers account for more than two-thirds of U.S. economic growth.
After more than 8 million jobs were shed in a long-running economic downturn, U.S. payrolls grew for four straight months including April.
"It appears that consumers are focusing on the improvement in the labor market as an indication that things are getting better," said Tom Simons, money market economist with Jefferies & Co in New York.
U.S. consumer confidence rose for the third-straight month in May, to 63.3, from a downwardly revised 57.7 in April.
The median of forecasts from analysts polled by Reuters was for a reading of 59.0 in May.
The optimism of the U.S. consumer contrasts with recent signs of consumer demand in Europe, which have been mixed.
Financial markets mostly ignored the data and worried about Europe's public debt crisis. Prices of U.S Treasury bonds rose. Major stock indexes lost about 2 percent but rallied late in the session to end little changed for the day.
The May consumer confidence survey results showed Americans were little affected by the euro zone debt crisis or the resulting sharp sell-off in U.S. stocks earlier this month.
"Apparently they're not paying too much attention to what's going on in Europe," Simons said.
"Given what's going on, the fact that confidence is continuing to improve shows that the U.S. consumer is very provincial and not sort of globally minded as to how they think the developments in Europe will affect corporations in the United States and their ability to hire workers," he said.
The Dow Jones industrial average on May 6 briefly fell nearly 1,000 points -- its biggest-ever intraday point drop. The Conference Board survey's cut-off date for the latest survey was May 18, and it is unclear how consumers responded to the latest leg down in markets.
Graphic on consumer confidence http://link.reuters.com/nyj36k
Graphic on March home prices http://link.reuters.com/mej36k
HOUSING HITTING FLOOR?
Housing, a cornerstone of the U.S. economy that crumbled in the credit crisis and contributed to the most protracted recession in decades, is still rickety, data showed.
"Most forecasters think it is a floor, and they think we'll be bouncing around it this year maybe, but then it's going to start going up, but not everyone agrees on that," Robert Shiller, an economist and co-founder of the S&P/Case-Shiller Home Price Index, told Reuters Insider on Tuesday.
Single-family home prices in 20 major cities were unchanged in March from February, but fell in the first quarter on renewed price pressure as sellers and buyers braced for a tax credit to expire on April 30, Standard & Poor's/Case Shiller home price indexes showed on Tuesday.
Prices have rebounded from lows hit during the crisis, yet the end of tax incentives for home buyers, combined with mounting foreclosures, suggest more weakness, S&P said.
For the first three months of the year, S&P's national home price index fell 3.2 percent, unadjusted, compared with a 1 percent drop in the fourth quarter.
But Californian cities, among the hardest hit by the credit crunch, posted gains.
Yet the performance of the domestic economy is not the only concern for the United States, given the danger that economic weakness or a surge in government debt yields could become a global phenomenon, analysts worry.
A worst-case scenario for the United States would be cascading sovereign debt defaults that spread into larger European economies.
Banks could clamp down on lending to protect their capital base. Goldman Sachs has estimated a "severe" credit crunch would take about 1.5 percentage points off of U.S. economic growth, potentially triggering a double-dip recession.
U.S. bank exposure to the entire euro area is estimated at $1 trillion.
After the worst recession in 70 years, the health of the economy is a key issue for American voters in the November congressional elections that are expected to be rough on many incumbent politicians.
(Reporting by Lynn Adler, Emily Flitter, Emily Kaiser, Caroline Valetkevitch and Wanfeng Zhou; Writing by John Parry; Editing by Kenneth Barry)
- Laura and hardy- HT - Wed 26 May, 04:37 PMI drive my Octavia around the industrial areas of Surat, where the roads are bad, and I feel that I am ruining my car. My heart is set on the Yeti, but the local dealer doesn?t seem to know the possible launch date. I don?t want to compromise by...
- Wary FIIs exit India- HT - Wed 26 May, 10:42 AMEurope has been eloquent in its argument that the debt crisis on the Euro zone is nowhere near the sub-prime crisis of 2008, but apparently foreign institutional investors (FIIs) in India are not...
- Sensex at 3-month low on EU worries- HT - Wed 26 May, 10:12 AMThe Sensex dipped 2.7 per cent to close at a three-month low of 16,022 points on Tuesday. The index briefly slipped below the 16,000 mark during the day on the European Union?s warning of weak economic growth unless major reform initiatives are...
- Strike cripples Air India, leaves fliers stranded- HT - Wed 26 May, 10:12 AMIn a huge blow to the ailing national carrier ? its image severely dented by the Mangalore crash and reeling under severe financial losses ? nearly 14,000 Air India (AI) employees went on a flash strike on Tuesday, affecting domestic and...
- BWA spectrum price likely to double today- HT - Wed 26 May, 09:42 AMThe auction of Broadband Wireless Access (BWA) spectrum has really picked up and the price for pan-India spectrum is set to more than double on Wednesday, the third day of...
- Eurofever dips Sensex to 16K- HT - Wed 26 May, 09:21 AMEurope sneezed a threat of slow economic recovery and markets across the world caught the cold...
Financial Express News
Financial Express News
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EARLIER HEADLINES
- Select export sectors likely to get more sops, fresh review in July- Financial Express - Wed 26 May, 12:23 AM
- Aban Offshore to raise $400 m; profit up 8%- Financial Express - Wed 26 May, 12:23 AM
- NHPC set to park funds in MFs; profit surges 94.43%
- Financial Express - Wed 26 May, 12:23 AM - Tata Beverages logs 19% rise in consolidated profit in FY10- Financial Express - Wed 26 May, 12:23 AM
- SpiceJet to garner $75 million through GDR, follow-on issue- Financial Express - Wed 26 May, 12:23 AM
NI News
ANI News
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EARLIER HEADLINES
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| Wednesday May 26, 10:50 PM | |
Telcos raise 3G funds, RBI assures on liquidity
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By Devidutta Tripathy and Swati Bhat
MUMBAI (Reuters) - Mobile carriers scrambled to secure funds to pay for 3G licences and the Reserve Bank of India (RBI) moved to calm fears of a cash crunch after an auction of high-speed mobile spectrum raised $14.3 billion, nearly double the government's target.
Short-term interest rates have risen this week ahead of a May 31 deadline for carriers to pay for spectrum they won in the auction that ended last week after 34 days of bidding.
After market hours on Wednesday RBI announced measures to ease liquidity tightness.
RBI raised the limit on bank borrowing under its repo facility by 0.5 percent of their deposits to meet liquidity requirements due to heavy fund outflows due in coming weeks. It also said it will conduct a second repo auction every day until July 2.
These ad-hoc measures have been taken to address the temporary liquidity tightness that may arise on account of advance tax payments and outflow towards auction payment for 3G spectrum and will be effective from Friday, RBI said.
No. 6 carrier Idea Cellular said on Wednesday it raised about 35 billion rupees ($740 million) from domestic banks and financial institutions.
No. 5 carrier Tata Teleservices, 26 percent owned by Japan's NTT DoCoMo, had raised about 46 billion rupees ($973 million) from domestic market sources, a person with knowledge of the matter said.
State Bank of India (SBIN.NS : 2173.6 +18.5) (SBI), the country's top lender, said successful bidders in last week's auction have asked it for funding totalling 180 billion rupees.
SBI Chairman O.P. Bhatt told reporters the bidders may only draw half that sum but the bank had surplus cash to meet "all of it".
Reserve Bank of India Deputy Governor K.C. Chakrabarty said the central bank would ensure adequate liquidity in the banking system.
Telecommunications companies have raised around $4 billion rupees via short-term debt and syndicated loans, a large chunk of it this week, to help fund their 3G spectrum purchases.
SPIRITED BIDDING
While the spirited bidding was welcomed by a deficit-strapped government, it has fuelled investor worries that mobile carriers already locked in a margin-crushing price war and facing billions of dollars in network construction costs were overpaying.
Bharti Airtel (BHARTIARTL.BO : 264 -0.15
), which a source this week said had raised 85 billion rupees through an onshore six-year syndicated loan facility to fund 3G spectrum, complained that the high cost of bidding had thwarted its ambitions of securing a pan-Indian 3G footprint.
A separate auction for wireless broadband spectrum started this week, with bids for one set of nationwide licences reaching $676 million on the second day of auction, which means companies will have to raise more money.
Morgan Stanley estimates New Delhi will raise a combined 921 billion rupees from the rights to 3G and broadband airwaves.
SHORT-TERM RATES RISE
The fixing for the yield on the three-month Reuters Certificate of Deposit (CD) benchmark rose to 5.50 percent on Wednesday, its highest in more than two months, and bankers said it was likely to rise further.
The liquidity jitters were worsened when State Bank of India, a rare issuer of short-term debt, on Wednesday raised about 10 billion rupees via CDs.
Although an SBI source said the money was raised to meet a mismatch at a subsidiary, the timing bolstered a view in the market that the bank was concerned liquidity could be tight in coming days.
Bhatt said there was adequate liquidity in the banking system and that liquidity was unlikely to move into deficit due to the 3G payments.
But he added that the bank is seeing a 25-50 basis points upward revision in sub-BPLR (benchmark prime lending rate) loan rates due to the rise in short-term rates.
(Additional reporting by Suvashree Dey Choudhury; Writing by Tony Munroe and Jeanette Rodrigues; Editing by Surojit Gupta and Mike Nesbit)
RECENT BUSINESS NEWS
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Will the Euro Survive the Greek Crisis?
One decade later, the euro is in serious trouble. The problems result from the recent economic crisis which have badly affected the economy of Greece, one of the countries of the eurozone. Analysts doubt whether the government in Athens is able or willing to address Greece's financial problems. If not, the other 15 nations using the euro will suffer the consequences, which is something they are not likely to accept.
Thomas Mayer, the chief economist of Deutsche Bank, warned last week: "The situation is more serious than it has ever been since the introduction of the euro. […] If the Greece situation is handled badly, the Eurozone could break down, or face major inflation."
The problems of the euro affect the entire world. The EU currency was not introduced because of economic considerations, but because the European Union is pretending to be a genuine state and states are expected to have single national currencies. Hoping to become a powerful political force in its own right, the EU adopted the euro as the common currency of some 327 million Europeans, so that the currency's economic power would prefigure the political power to be. The eurozone represents the second largest economy in the world. During the past decade, the euro became the second largest reserve currency after the U.S. dollar. With banknotes and coins in circulation for more than €790 billion, the euro has surpassed the U.S. dollar's circulation. The euro appeared to be very strong, with the value of the U.S. dollar, the British pound, and other currencies dramatically falling in comparison to it – one of the causes of Greece's problems. Tourism is a major economic sector in Greece. For tourists from outside the eurozone, such as the Americans and British, the country became too expensive as a holiday destination. Last year, when the world economic crisis also affected Europe, with a huge drop in the numbers of EU-citizens, such as Italians, that headed for Greece, the Greek economy collapsed and the Greek government was no longer able to pay the country's public debts.
With Greece facing bankruptcy, the fears about Greece's financial situation has led to a drop in value for the euro. Last week, the finance ministers of Germany and the Netherlands – the two eurozone countries which in pre-euro days had the strongest currencies in the EU: the German mark and the Dutch guilder – announced that they will not help Greece solve its problems. Polls indicate that 70% of the Germans oppose using their taxes to bail out other countries. Despite the EU propaganda line that EU citizens share a common European national identity, this is simply not true. As a leader in the Financial Times Deutschland noted earlier this month: "Spain believes in 'more Europe'. Whether that's the case for Germany as well one cannot be so sure any more."
Moreover, the German economy has also been badly affected by the crisis. Last year, Germany's GDP fell by 5%, the biggest drop since the war, with a drop of 15% in exports and 20% in sales of German manufacturers. The German people are not prepared to lift countries such as Greece, Romania, Spain, Portugal and Ireland out of the recession at its own expense.
There is also a lot of anger towards the Greeks in the other EU countries: for some years Greece seems to have covered up its bad economic performance by officially presenting better economic figures than was the case. The promise of the Greek government to reduce Greece's budget deficit from 12.7% of GDP in 2009 to 2.8% in 2012, is being met with scepticism. Many doubt whether the government in Athens will be strong enough to resist the domestic pressure from the powerful trade unions against the radical deficit-cutting efforts which are needed, while others doubt that the Greeks will refrain from manipulating the economic data again.
Unwillingness to help the Greeks is huge within a eurozone currently facing an unemployment rate of 10% of the workforce, the highest figure since the single currency was introduced eleven years ago. Under EU rules, however, all the 27 member states of the EU, not just the 16 member states of the eurozone, are obliged to help the Greeks if the EU decides to bail them out. Article 122 of the EU Treaty, which went into force last December, states: "Where a member state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the council of ministers, on a proposal from the European Commission, may grant, under certain conditions, Union financial assistance."
This decision is taken on a majority vote. Consequently Britain, which always refused to join the eurozone, might be forced to help save the euro. The British press has already reported that if an EU rescue fund for the Greeks matches the Greek budget deficit, and if the EU decides that member states have to contribute in accordance with their own share of the total EU economy, Britain might be forced to pay a £7 billion bill to bail out Greece – or perhaps even more, if other bankrupt eurozone countries, such as Spain are excused their share.
British Eurosceptics fear that if Greece, which represents 3% of EU GDP, is bailed out, other eurozone countries facing financial difficulties (Spain, Portugal, Italy) might claim the same treatment. This, they say, would saddle Britain with a bill of £50 billion to save a currency in which the Brits have never believed.
Even though European public opinion is opposed to a bailout plan for the Greeks, Irwin Stelzer wrote in The Wall Street Journal recently that he expects European politicians to present just such a plan. "There is so much political capital invested in the euro by the political class," he wrote. "that even the stern and parsimonious [German Chancellor] Angela Merkel will in the end contribute to a bailout fund if necessary."
However, there also are indications to the contrary. Greek politicians might feel that the only way to avoid civil unrest in Greece may be to drop the euro and re-establish their own national currency, the Greek drachme. This will allow the Greek government to devalue the currency in order to stimulate exports and economic growth – a political-monetary tool which Athens lacks if it remains in the eurozone. It seems that some people at the European Central Bank (ECB), which controls the euro, are in favor of such a move.
On Jan. 17, Ambrose Evans-Pritchard wrote in the London Daily Telegraph that at the ECB headquarters in Frankfurt the legal ground is being prepared for a euro break-up. A major problem, however, appears to be that once a country has accepted the euro it cannot get rid of it unless it leaves the EU altogether. "This is a warning shot for Greece, Portugal, Ireland and Spain. If they fail to marshal public support for draconian austerity, they risk being cast into Icelandic oblivion." Apart from Britain and Denmark, two countries which obtained opt-outs in the EU treaties, all EU member states are obliged to join the eurozone or peg their currencies to it. Former IMF analyst Desmond Lachman is quoted in CityAM warning: "There is every prospect that within two to three years...Greece's European membership will end with a bang."
Evans-Pritchard reports, however, that the dominant view in financial circles in the City of London seems to be that "if a rescue [a bailout of Greece] turns out to be necessary, a rescue will be mounted." This is a bet, says Evans-Pritchard, that Berlin will do "what it did for East Germany: subsidise forever. It is a judgment on whether EMU is the binding coin of sacred solidarity or just a fixed exchange rate system like others before it. Politics will decide."
Which brings us back to Milton Friedman. When politicians decide to rule economic and monetary issues, the results are usually catastrophic.
Former Soviet Dissident Warns For EU Dictatorship
Mr Bukovsky paid a visit to the European Parliament on Thursday at the invitation of Fidesz, the Hungarian Civic Forum. Fidesz, a member of the European Christian Democrat group, had invited the former Soviet dissident over from England, where he lives, on the occasion of this year's 50th anniversary of the 1956 Hungarian Uprising. After his morning meeting with the Hungarians, Mr Bukovsky gave an afternoon speech in a Polish restaurant in the Trier straat, opposite the European Parliament, where he spoke at the invitation of the United Kingdom Independence Party, of which he is a patron.
Mr Bukovsky was one of the heroes of the 20th century. As a young man he exposed the use of psychiatric imprisonment against political prisoners in the former USSR (Union of Soviet Socialist Republics, 1917-1991) and spent a total of twelve years (1964-1976), from his 22nd to his 34th year, in Soviet jails, labour camps and psychiatric institutions. In 1976 the Soviets expelled him to the West. In 1992 he was invited by the Russian government to serve as an expert testifying at the trial conducted to determine whether the Soviet Communist Party had been a criminal institution. To prepare for his testimony Mr Bukovsky was granted access to a large number of documents from Soviet secret archives. He is one of the few people ever to have seen these documents because they are still classified. Using a small handheld scanner and a laptop computer, however, he managed to copy many documents (some with high security clearance), including KGB reports to the Soviet government.
An interview with Vladimir Bukovsky
Listen to it here
Paul Belien: You were a very famous Soviet dissident and now you are drawing a parallel between the European Union and the Soviet Union. Can you explain this?
According to Communist doctrine as well as to many forms of Socialist thinking, the state, the national state, is supposed to wither away. In Russia, however, the opposite happened. Instead of withering away the Soviet state became a very powerful state, but the nationalities were obliterated. But when the time of the Soviet collapse came these suppressed feelings of national identity came bouncing back and they nearly destroyed the country. It was so frightening.
PB: Do you think the same thing can happen when the European Union collapses?
VB: Absolutely, you can press a spring only that much, and the human psyche is very resilient you know. You can press it, you can press it, but don't forget it is still accumulating a power to rebound. It is like a spring and it always goes to overshoot.
PB: But all these countries that joined the European Union did so voluntarily.
VB: No, they did not. Look at Denmark which voted against the Maastricht treaty twice. Look at Ireland [which voted against the Nice treaty]. Look at many other countries, they are under enormous pressure. It is almost blackmail. Switzerland was forced to vote five times in a referendum. All five times they have rejected it, but who knows what will happen the sixth time, the seventh time. It is always the same thing. It is a trick for idiots. The people have to vote in referendums until the people vote the way that is wanted. Then they have to stop voting. Why stop? Let us continue voting. The European Union is what Americans would call a shotgun marriage.
PB: What do you think young people should do about the European Union? What should they insist on, to democratize the institution or just abolish it?
VB: I think that the European Union, like the Soviet Union, cannot be democratized. Gorbachev tried to democratize it and it blew up. This kind of structures cannot be democratized.
PB: But we have a European Parliament which is chosen by the people.
VB: The European Parliament is elected on the basis of proportional representation, which is not true representation. And what does it vote on? The percentage of fat in yoghurt, that kind of thing. It is ridiculous. It is given the task of the Supreme Soviet. The average MP can speak for six minutes per year in the Chamber. That is not a real parliament.
Transcript of Mr Bukovsky's Brussels speech
Listen to it here
In 1992 I had unprecedented access to Politburo and Central Committee secret documents which have been classified, and still are even now, for 30 years. These documents show very clearly that the whole idea of turning the European common market into a federal state was agreed between the left-wing parties of Europe and Moscow as a joint project which [Soviet leader Mikhail] Gorbachev in 1988-89 called our "common European home."
The idea was very simple. It first came up in 1985-86, when the Italian Communists visited Gorbachev, followed by the German Social-Democrats. They all complained that the changes in the world, particularly after [British Prime Minister Margaret] Thatcher introduced privatisation and economic liberalisation, were threatening to wipe out the achievement (as they called it) of generations of Socialists and Social-Democrats – threatening to reverse it completely. Therefore the only way to withstand this onslaught of wild capitalism (as they called it) was to try to introduce the same socialist goals in all countries at once. Prior to that, the left-wing parties and the Soviet Union had opposed European integration very much because they perceived it as a means to block their socialist goals. From 1985 onwards they completely changed their view. The Soviets came to a conclusion and to an agreement with the left-wing parties that if they worked together they could hijack the whole European project and turn it upside down. Instead of an open market they would turn it into a federal state.
According to the [secret Soviet] documents, 1985-86 is the turning point. I have published most of these documents. You might even find them on the internet. But the conversations they had are really eye opening. For the first time you understand that there is a conspiracy – quite understandable for them, as they were trying to save their political hides. In the East the Soviets needed a change of relations with Europe because they were entering a protracted and very deep structural crisis; in the West the left-wing parties were afraid of being wiped out and losing their influence and prestige. So it was a conspiracy, quite openly made by them, agreed upon, and worked out.
In January of 1989, for example, a delegation of the Trilateral Commission came to see Gorbachev. It included [former Japanese Prime Minister Yasuhiro] Nakasone, [former French President Valéry] Giscard d'Estaing, [American banker David] Rockefeller and [former US Secretary of State Henry] Kissinger. They had a very nice conversation where they tried to explain to Gorbachev that Soviet Russia had to integrate into the financial institutions of the world, such as Gatt, the IMF and the World Bank.
In the middle of it Giscard d'Estaing suddenly takes the floor and says: "Mr President, I cannot tell you exactly when it will happen – probably within 15 years – but Europe is going to be a federal state and you have to prepare yourself for that. You have to work out with us, and the European leaders, how you would react to that, how would you allow the other Easteuropean countries to interact with it or how to become a part of it, you have to be prepared."
This was January 1989, at a time when the [1992] Maastricht treaty had not even been drafted. How the hell did Giscard d'Estaing know what was going to happen in 15 years time? And surprise, surprise, how did he become the author of the European constitution [in 2002-03]? A very good question. It does smell of conspiracy, doesn't it?
Luckily for us the Soviet part of this conspiracy collapsed earlier and it did not reach the point where Moscow could influence the course of events. But the original idea was to have what they called a convergency, whereby the Soviet Union would mellow somewhat and become more social-democratic, while Western Europe would become social-democratic and socialist. Then there will be convergency. The structures have to fit each other. This is why the structures of the European Union were initially built with the purpose of fitting into the Soviet structure. This is why they are so similar in functioning and in structure.
It is no accident that the European Parliament, for example, reminds me of the Supreme Soviet. It looks like the Supreme Soviet because it was designed like it. Similary, when you look at the European Commission it looks like the Politburo. I mean it does so exactly, except for the fact that the Commission now has 25 members and the Politburo usually had 13 or 15 members. Apart from that they are exactly the same, unaccountable to anyone, not directly elected by anyone at all. When you look into all this bizarre activity of the European Union with its 80,000 pages of regulations it looks like Gosplan. We used to have an organisation which was planning everything in the economy, to the last nut and bolt, five years in advance. Exactly the same thing is happening in the EU. When you look at the type of EU corruption, it is exactly the Soviet type of corruption, going from top to bottom rather than going from bottom to top.
If you go through all the structures and features of this emerging European monster you will notice that it more and more resembles the Soviet Union. Of course, it is a milder version of the Soviet Union. Please, do not misunderstand me. I am not saying that it has a Gulag. It has no KGB – not yet – but I am very carefully watching such structures as Europol for example. That really worries me a lot because this organisation will probably have powers bigger than those of the KGB. They will have diplomatic immunity. Can you imagine a KGB with diplomatic immunity? They will have to police us on 32 kinds of crimes – two of which are particularly worrying, one is called racism, another is called xenophobia. No criminal court on earth defines anything like this as a crime [this is not entirely true, as Belgium already does so – pb]. So it is a new crime, and we have already been warned. Someone from the British government told us that those who object to uncontrolled immigration from the Third World will be regarded as racist and those who oppose further European integration will be regarded as xenophobes. I think Patricia Hewitt said this publicly.
Hence, we have now been warned. Meanwhile they are introducing more and more ideology. The Soviet Union used to be a state run by ideology. Today's ideology of the European Union is social-democratic, statist, and a big part of it is also political correctness. I watch very carefully how political correctness spreads and becomes an oppressive ideology, not to mention the fact that they forbid smoking almost everywhere now. Look at this persecution of people like the Swedish pastor who was persecuted for several months because he said that the Bible does not approve homosexuality. France passed the same law of hate speech concerning gays. Britain is passing hate speech laws concerning race relations and now religious speech, and so on and so forth. What you observe, taken into perspective, is a systematic introduction of ideology which could later be enforced with oppressive measures. Apparently that is the whole purpose of Europol. Otherwise why do we need it? To me Europol looks very suspicious. I watch very carefully who is persecuted for what and what is happening, because that is one field in which I am an expert. I know how Gulags spring up.
It looks like we are living in a period of rapid, systematic and very consistent dismantlement of democracy. Look at this Legislative and Regulatory Reform Bill. It makes ministers into legislators who can introduce new laws without bothering to tell Parliament or anyone. My immediate reaction is why do we need it? Britain survived two world wars, the war with Napoleon, the Spanish Armada, not to mention the Cold War, when we were told at any moment we might have a nuclear world war, without any need for introducing this kind legislation, without the need for suspending our civil liberaties and introducing emergency powers. Why do we need it right now? This can make a dictatorship out of your country in no time.
Today's situation is really grim. Major political parties have been completely taken in by the new EU project. None of them really opposes it. They have become very corrupt. Who is going to defend our freedoms? It looks like we are heading towards some kind of collapse, some kind of crisis. The most likely outcome is that there will be an economic collapse in Europe, which in due time is bound to happen with this growth of expenses and taxes. The inability to create a competitive environment, the overregulation of the economy, the bureaucratisation, it is going to lead to economic collapse. Particularly the introduction of the euro was a crazy idea. Currency is not supposed to be political.
I have no doubt about it. There will be a collapse of the European Union pretty much like the Soviet Union collapsed. But do not forget that when these things collapse they leave such devastation that it takes a generation to recover. Just think what will happen if it comes to an economic crisis. The recrimination between nations will be huge. It might come to blows. Look to the huge number of immigrants from Third World countries now living in Europe. This was promoted by the European Union. What will happen with them if there is an economic collapse? We will probably have, like in the Soviet Union at the end, so much ethnic strife that the mind boggles. In no other country were there such ethnic tensions as in the Soviet Union, except probably in Yugoslavia. So that is exactly what will happen here, too. We have to be prepared for that. This huge edifice of bureaucracy is going to collapse on our heads.
This is why, and I am very frank about it, the sooner we finish with the EU the better. The sooner it collapses the less damage it will have done to us and to other countries. But we have to be quick because the Eurocrats are moving very fast. It will be difficult to defeat them. Today it is still simple. If one million people march on Brussels today these guys will run away to the Bahamas. If tomorrow half of the British population refuses to pay its taxes, nothing will happen and no-one will go to jail. Today you can still do that. But I do not know what the situation will be tomorrow with a fully fledged Europol staffed by former Stasi or Securitate officers. Anything may happen.
We are losing time. We have to defeat them. We have to sit and think, work out a strategy in the shortest possible way to achieve maximum effect. Otherwise it will be too late. So what should I say? My conclusion is not optimistic. So far, despite the fact that we do have some anti-EU forces in almost every country, it is not enough. We are losing and we are wasting time.
More on this topic, see:
Czech President Warns Against Europeanism, 27 August 2005
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All time:
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- First Trio "Married" in The Netherlands
- The Rape of Europe
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- Our Lady of Cultural Differences
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2010: A Greek Odyssey
Sudipto Mundle, May 27, 2010, 12.00am ISTThe global financial system seems remarkably fragile. Greece accounts for less than 2 per cent of the combined GDP of the European Union. Yet, it has set that entire region in turmoil and this in turn has spooked investors across the globe. During the past month stock markets have declined not only in Europe but also in the US and throughout Asia. The decline is now beginning to spill over into commodities like copper and oil.
Greece is in a tight spot. A public debt stock amounting to 115 per cent of GDP is likely to rise to 150 per cent by 2014. This is partly because its large fiscal deficit is adding nearly 14 per cent of GDP to the debt stock annually, and partly because Greek GDP is declining by 4 per cent to 5 per cent per year. Getting back to a sustainable fiscal path will require cutting the fiscal deficit by 10 per cent of GDP by 2014, after allowing for an interest burden amounting to 7.5 per cent of GDP.
Such harsh fiscal compression is not politically feasible. Even the much milder austerity programme announced earlier this month had Greeks rioting in the streets to defend their entitlements and jobs. Nor does Greece have the option to moderate the fiscal compression, combining it with aggregate expenditure switching from imports to exports through devaluation. It is locked into the euro and no longer has its own currency.
Investors are aware of all this. They are also aware of similar debt crises potentially looming in Spain, Portugal, Ireland, Italy and even the UK. Hence, the risk of contagion in case Greece defaults on its debt. It was to stem the fears that European leaders announced a $1 trillion bailout package on May 10, worked out in collaboration with the IMF. This is partly money on the table but mostly guarantees of assistance. Moreover, the 'independent' European Central Bank (ECB) was persuaded to announce that it would buy Greek government bonds three days after its head, Jean-Claude Trichet, announced that the ECB would do no such thing. Initial market reaction was positive. But sentiments turned bearish when investors realised that even this large package would only postpone the date of final reckoning for sovereign Greek debt.
What is the outlook going forward? Three possible scenarios can be envisaged. Greece could withdraw from the EU, revive its own currency and devalue the drachma to stimulate growth and ease the fiscal burden. However, this is quite unlikely since no European country is prepared to see the EU's unravelling at present. Alternatively, Greece can remain in the EU and impose harsh fiscal compression to meet its debt obligations. However, the markets are already discounting this option as being politically infeasible. The third and most likely outcome is that Greece will remain in the EU, and combine politically feasible austerity measures with some debt restructuring, that is, a managed and partial haircut for investors exposed to Greek and derivative debt. The markets are probably factoring in this outcome right now, hence the decline.
How will all this affect India? Finance minister Pranab Mukherjee and RBI governor D Subbarao have both indicated that the impact on India will be limited. They are probably right. Though bigger than the Dubai debt hiccup a few months ago, the Greek debt crisis is nowhere near the scale of the Great Recession that hit the world two years ago. Even then the impact on India was quite muted. Hence, it is reasonable to expect that the fallout of the present crisis will be relatively benign.
Nobody knows how soon the markets will settle. If market volatility is sustained, economic recovery in Europe and other advanced countries will be disrupted. Oil prices will remain soft. There will be an initial capital flight from Europe to the US and other 'safe' advanced country markets. Then fear will give way to a search for better returns, and we should see a significant increase in capital flows to relatively safe emerging markets like India. However, there will be an adverse negative impact on the incipient recovery of India's exports. On balance, a modest negative net impact.
If the markets settle soon, Europe and advanced countries elsewhere will resume their recovery. This will drive up oil prices, but it will also help sustain the recovery of Indian exports. Finally, the settling of markets in Europe notwithstanding, we will probably still see enhanced capital flows to India. On balance, a modest net positive impact.
The writer is emeritus professor, National Institute of Public Finance and Policy, New Delhi.
http://timesofindia.indiatimes.com/Home/Opinion/Edit-Page/2010-A-Greek-Odyssey/articleshow/5977788.cms
2010 European sovereign debt crisis
From Wikipedia, the free encyclopedia
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In early 2010 fears of a sovereign debt crisis or the 2010 Euro Crisis[1] developed concerning some countries in Europe[2] including: Greece, Ireland,[citation needed] Spain,[3] and Portugal.[4] This led to a crisis of confidence as well as the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.[5][6]
Concern about rising government deficits and debt levels[7][8] across the globe together with a wave of downgrading of European Government debt[9] has created alarm on financial markets. The debt crisis has been mostly centred on recent events in Greece, where there is concern about the rising cost of financing government debt. On 2 May 2010, the Eurozone countries and the International Monetary Fund agreed to a €110 billion loan for Greece, conditional on the implementation of harsh Greek austerity measures.[10] On 9 May 2010, Europe's Finance Ministers approved a comprehensive rescue package worth almost a trillion dollars aimed at ensuring financial stability across Europe.[11]
[edit] Greek government funding crisis
[edit] Causes
The Greek economy was one of the fastest growing in the eurozone during the 2000s; from 2000 to 2007 it grew at an annual rate of 4.2% as foreign capital flooded the country.[12] A strong economy and falling bond yields allowed the government of Greece to run large structural deficits. According to an editorial published by the Greek newspaper Kathimerini, large public deficits are one of the features that have marked the Greek social model since the restoration of democracy in 1974. After the removal of the right leaning military junta, the government wanted to bring disenfrachised left leaning portions of the population into the economic mainstream. In order to do so, successive Greek governments have, among other things, run large deficits to finance public sector jobs, pensions, and other social benefits.[13] Initially currency devaluation helped finance the borrowing. After the introduction of the euro Greece was initially able to borrow due the lower interest rates government bonds could command. Since the introduction of the Euro, debt to GDP has remained above 100%.[14] The global financial crisis that began in 2008 had a particularly large effect on Greece. Two of the country's largest industries are tourism and shipping, and both were badly affected by the downturn with revenues falling 15% in 2009.[14]
To keep within the monetary union guidelines, the government of Greece has been found to have consistently and deliberately misreported the country's official economic statistics.[15][16] In the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001 for arranging transactions that hid the actual level of borrowing.[17] The purpose of these deals made by several subsequent Greek governments was to enable them to spend beyond their means, while hiding the actual deficit from the EU overseers.[18]
In 2009, the government of George Papandreou revised its deficit from an estimated 6% (or 8% if a special tax for building irregularities were not to be applied) to 12.7%.[19] In May 2010, the Greek government deficit was estimated to be 13.6%[20] which is one of the highest in the world relative to GDP.[21] Greek government debt was estimated at €216 billion in January 2010.[22] Accumulated government debt is forecast, according to some estimates, to hit 120% of GDP in 2010.[23] The Greek government bond market is reliant on foreign investors, with some estimates suggesting that up to 70%[citation needed] of Greek government bonds are held externally.[24] Estimated tax evasion costs the Greek government over $20 billion per year.[25] Despite the crisis, Greek government bond auctions have all been over-subscribed in 2010 (as of 26 January).[26] According to the Financial Times on 25 January 2010, "Investors placed about €20bn ($28bn, £17bn) in orders for the five-year, fixed-rate bond, four times more than the (Greek) government had reckoned on." In March, again according to the Financial Times, "Athens sold €5bn (£4.5bn) in 10-year bonds and received orders for three times that amount."[27]
[edit] Downgrading of debt
On 27 April 2010, the Greek debt rating was decreased to 'junk' status by Standard & Poor's amidst fears of default by the Greek government.[28] Yields on Greek government two-year bonds rose to 15.3% following the downgrading.[29] Some analysts question Greece's ability to refinance its debt. Standard & Poor's estimates that in the event of default investors would lose 30–50% of their money.[28] Stock markets worldwide declined in response to this announcement.[30]
Following downgradings by Fitch, Moody's and S&P,[31] Greek bond yields rose in 2010, both in absolute terms and relative to German government bonds.[32] Yields have risen, particularly in the wake of successive ratings downgrading. According to the Wall Street Journal "with only a handful of bonds changing hands, the meaning of the bond move isn't so clear."[33] As of 6 May 2010, Greek 10-year bonds were trading at an effective yield of 11.31%.[34]
On 3 May 2010, the European Central Bank suspended its minimum threshold for Greek debt "until further notice",[35] meaning the bonds will remain eligible as collateral even with junk status. The decision will guarantee Greek banks' access to cheap central bank funding, and analysts said it should also help increase Greek bonds' attractiveness to investors.[36] Following the introduction of these measures the yield on Greek 10-year bonds fell to 8.5%, 550 basis points above German yields, down from 800 basis points earlier.[37]
[edit] Austerity and loan agreement
On 5 March 2010, the Greek parliament passed the Economy Protection Bill, expected to save €4.8 billion[38] through a number of measures including public sector wage reductions. Passage of the bill occurred amid widespread protests against government austerity measures in the Greek capital, Athens.[39] On 23 April 2010, the Greek government requested that the EU/IMF bailout package be activated.[40] The IMF has said it was "prepared to move expeditiously on this request".[41] Greece needs some of the money before 19 May, when it faces a debt roll over of $11.3bn.[42][43][44] On 2 May 2010, a loan agreement was reached between Greece, the other eurozone countries, and the International Monetary Fund. The deal consists of an immediate €45 billion in low interest loans to be provided in 2010, with more funds available later. A total of €100 billion has been agreed.[45][46] The interest for the Eurozone loans is 5%, considered to be a rather high level for any bailout loan. The government of Greece agreed to impose a fourth and final round of austerity measures. These include:[47]
- Public Sector limit introduced of €1,000 to bi-annual bonus, abolished entirely for those earning over €3,000 a month.
- Cuts of 8% on public sector allowances and 3% pay cut for DEKO (public sector utilities) pay cheques.
- Freeze on increases in public sector wages for three years.
- Limit of €800[clarification needed] to 13th and 14th month pension installment.[clarification needed] Abolished for those pensioners receiving over €2,500 a month.
- Return of special tax (LAFKA) on high pensions.
- Changes planned to the laws governing lay-offs and overtime pay.
- Extraordinary taxes on company profits.
- Increases in VAT to 23%, 11% and 5.5%.
- 10% rise in taxes on alcohol, cigarettes, and fuels.
- 10% increase in luxury taxes.
- Equalisation of men's and women's pension age limits.
- General pension age does not change but a mechanism is introduced to scale them to life expectations changes.
- Creation of a financial stability fund.
- Average retirement age for public sector workers increased from 61 to 65.[48]
- Public-owned companies to diminish from 6,000 to 2,000.[48]
On 5 May 2010, a national strike was held in opposition to the planned spending cuts and tax increases. Protest on that date was widespread and turned violent in Athens, killing three people and injuring dozens.[49]
According to research published on 5 May 2010, by Citibank, the EMU loans will be pari passu and not senior like those of the IMF. In fact the seniority of the IMF loans themselves has no legal basis but is respected nonetheless. The amount of the loans will cover Greece's funding needs for the next three years (estimated at 30bn for the rest of 2010 and 40bn each for 2011 and 2012). Citibank finds the fiscal tightening "unexpectedly tough". It will amount to a total of €30 billion (i.e. 12.5% of 2009 Greek GDP) and consist of 5 pp of GDP tightening in 2010 and a further 4 pp tightening in 2011.[50]
[edit] Danger of default
Without a bailout agreement, there was a possibility that Greece would have been forced to default on some of its debt. The premiums on Greek debt had risen to a level that reflected a high chance of a default or restructuring. One analyst gave a 80 to 90% chance of a default or restructuring.[51] Martin Feldstein called a Greek default "inevitable."[52] A default would most likely have taken the form of a restructuring where Greece would pay creditors only a portion of what they were owed, perhaps 50 or 25 percent.[53] This would effectively remove Greece from the euro, as it would no longer have collateral with the European Central Bank.[citation needed] It would also destabilise the Euro Interbank Offered Rate, which is backed by government securities.[54]
Since Greece is on the euro, it cannot print its own currency. This prevents it from inflating away a portion of its obligations or otherwise stimulating its economy with monetary policy. For example, the U.S. Federal Reserve expanded its balance sheet by over $1.3 trillion since the global financial crisis began, essentially printing new money and injecting it into the system by purchasing outstanding debt.[55]
The overall effect of Greece being forced off the euro, would itself have been small for the other European economies. Greece represents only 2% of the eurozone economy.[56] The more severe danger is that a default by Greece will cause investors to lose faith in other Eurozone countries. This concern is focused on Portugal and Ireland, all of whom have high debt and deficit issues.[57] Italy also has a high debt, but its budget position is better than the European average, and it is not considered amongst the countries most at risk.[58] Recent rumours raised by speculators about a Spanish bail-out were dismissed by Spanish President Mr. Zapatero as "complete insanity" and "intolerable"[59]. Spain has a comparatively low debt amongst advanced economies, at only 53% of GDP in 2010, more than 20 points less than Germany, France or the US, and more than 60 points less than Italy, Ireland or Greece[60], and it doesn't face a risk of default[61]. Spain and Italy are far larger and more central economies than Greece, both countries have most of their debt controlled internally, and are in a better fiscal situation than Greece and Portugal, making a default unlikely unless the situation gets far more severe.[62]
[edit] Objections to proposed policies
See also May 2010 Greek protestsThe crisis is seen as a justification for imposing fiscal austerity[63] on Greece in exchange for European funding which would lower borrowing costs for the Greek government.[64] The negative impact of tighter fiscal policy could offset the positive impact of lower borrowing costs and social disruption could have a significantly negative impact on investment and growth in the longer term. Joseph Stiglitz has also criticised the EU for being too slow to help Greece, insufficiently supportive of the new government, lacking the will power to set up sufficient "solidarity and stabilisation framework" to support countries experiencing economic difficulty, and too deferential to bond rating agencies.[65]
An alternative to the bailout agreement, would have been Greece leaving the Eurozone. Wilhelm Hankel, professor emeritus of economics at the University of Frankfurt am Main suggested[66] in an article published in the Financial Times that the preferred solution to the Greek bond 'crisis' is a Greek exit from the euro followed by a devaluation of the currency. Fiscal austerity or a euro exit is the alternative to accepting differentiated government bond yields within the Euro Area. If Greece remains in the euro while accepting higher bond yields, reflecting its high government deficit, then high interest rates would dampen demand, raise savings and slow the economy. An improved trade performance and less reliance on foreign capital would result.
[edit] Possible spread beyond Greece
One of the central concerns prior to the bailout was that the crisis could spread beyond Greece. The crisis has reduced confidence in other European economies. Ireland, with a government deficit of 14.3 percent of GDP, the U.K. with 12.6 percent, Spain with 11.2 percent, and Portugal at 9.4 percent are most at risk.[67][68][69]
In April 2010, following a marked increase in Irish 2-year bond yields, Ireland's NTMA state debt agency said that it had "no major refinancing obligations" in 2010. Its requirement for €20 billion in 2010 was matched by a €23 billion cash balance, and it remarked: "We're very comfortably circumstanced".[70] On 18 May the NTMA tested the market and sold a €1.5 billion issue that was three times oversubscribed.[71]
According to the Financial Times: "So far, investors have concentrated their ire on peripheral eurozone economies because of the zone's inability to resolve cleanly the Greek crisis. That is understandable, say many economists, but they add that the focus on continental Europe is unfair."[72] According to the European Commision, the U.K. budget deficit will surpass Greece's as worst in EU this calendar year.[73]
Shortly after the announcement of the EU's new "emergency fund" for eurozone countries in early May 2010, Spain's government announced new austerity measures designed to further reduce the country's budget deficit.[74] The socialist government had hoped to avoid such deep cuts, but weak economic growth as well as domestic and international pressure forced the government to expand on cuts already announced in January. As one of the largest eurozone economies the condition of Spain's economy is of particular concern to international observers, and faced pressure from the United States, the IMF, other European countries and the European Commission to cut its deficit more aggressively.[75][76]
Niall Ferguson writes that "the sovereign debt crisis that is unfolding ... is a fiscal crisis of the western world".[77] Financing needs for the Eurozone in 2010 come to a total of €1.6 trillion, while the US is expected to issue US$1.7 trillion more Treasury securities in this period,[78] and Japan has ¥213 trillion of government bonds to roll over.[79] The countries most at risk are those that rely on foreign investors to fund their government sector. According to Ferguson similarities between the U.S. and Greece should not be dismissed.[80]
For 2010, the OECD forecasts $16,000bn will be raised in government bonds among its 30 member countries. Greece has been the notable example of an industrialised country that has faced difficulties in the markets because of rising debt levels. Even countries such as the US, Germany and the UK, have had fraught moments as investors shunned bond auctions due to concerns about public finances and the economy.[81] According to Niall Ferguson in the Financial Times: "Only two things have thus far stood between the US and higher bond yields: purchases of Treasuries by the Federal Reserve and reserve accumulation by the Chinese monetary authorities. But now the Fed is phasing out such purchases and is expected to wind up quantitative easing. Meanwhile, the Chinese have sharply reduced their purchases of Treasuries from around 47 per cent of new issuance in 2006 to 20 per cent in 2008 to an estimated 5 per cent last year."[82]
[edit] Long-term solutions
European Union leaders have made two major proposals for ensuring fiscal stability in the long term. The first proposal is the creation of a common fund responsible for bailing out, with strict conditions, an EU member country. This reactive tool is sometimes dubbed as the European Monetary Fund by the media.[83] The second is a single authority responsible for tax policy oversight and government spending coordination of EU member countries. This preventive tool is dubbed the European Treasury.[84] The monetary fund would be supported by EU member governments, and the treasury would be supported by the European Commission. However, strong European Commission oversight in the fields of taxation and budgetary policy and the enforcement mechanisms that go with it have been described as infringements on the sovereignty of eurozone member states[85] and are opposed by key EU nations such as France and Italy, which could jeopardise the establishment of a European Treasury.
Some think-tanks such as the CEE Council have argued that the predicament some EU countries find themselves in is the result of a decade of debt-fueled Keynesian policies pursued by local policy makers and complacent EU central bankers,[86] and have recommended the imposition of a battery of corrective policies to control public debt. Some senior German policy makers went as far as to say that emergency bailouts should bring harsh penalties to EU aid recipients such as Greece.[87] Others argue that an abrupt return to "non-Keynesian" financial policies is not a viable solution and predict the deflationary policies now being imposed on countries such as Greece and Spain might prolong and deepen their recessions.[88] The Economist has suggested that ultimately the Greek "social contract," which involves "buying" social peace through public sector jobs, pensions, and other social benefits, will have to be changed to one predicated more on price stability and government restraint if the euro is to survive.[89] As Greece can no longer devalue its way out of economic difficulties it will have to more tightly control spending than it has since the inception of the Third Hellenic Republic.
Regardless of the corrective measures chosen to solve the current predicament, as long as cross border capital flows remain unregulated in the Euro Area,[90] asset bubbles[91] and current account imbalances are likely to continue. For example, a country that runs a large current account or trade deficit (i.e., it imports more than it exports) must also be a net importer of capital; this is a mathematical identity called the balance of payments. In other words, a country that imports more than it exports must also borrow to pay for those imports. Conversely, Germany's large trade surplus (net export position) means that it must also be a net exporter of capital, lending money to other countries to allow them to buy German goods.[92] The 2009 trade deficits for Spain, Greece, and Portugal were estimated to be $69.5 billion, $34.4B and $18.6B, respectively ($122.5B total), while Germany's trade surplus was $109.7B.[93] A similar imbalance exists in the U.S., which runs a large trade deficit (net import position) and therefore is a net borrower of capital from abroad. Ben Bernanke warned of the risks of such imbalances in 2005, arguing that a "savings glut" in one country with a trade surplus can drive capital into other countries with trade deficits, artificially lowering interest rates and creating asset bubbles.[94][95]
A country with a large trade surplus would generally see the value of its currency appreciate relative to other currencies, which would reduce the imbalance as the relative price of its exports increases. This currency appreciation occurs as the importing country sells its currency to buy the exporting country's currency used to purchase the goods. However, many of the countries involved in the crisis are on the Euro, so this is not an available solution at present. Alternatively, trade imbalances might be addressed by changing consumption and savings habits. For example, if a country's citizens saved more instead of consuming imports, this would reduce its trade deficit. Likewise, reducing budget deficits is another method of raising a country's level of saving. Capital controls that restrict or penalize the flow of capital across borders is another method that can reduce trade imbalances. Interest rates can also be raised to encourage domestic saving, although this benefit is offset by slowing down an economy and increasing government interest payments.[96]
The suggestion has been made that long term stability in the eurozone requires a common fiscal policy rather than controls on portfolio investment.[97] In exchange for cheaper funding from the EU, Greece and other countries, in addition to having already lost control over monetary policy and foreign exchange policy since the euro came into being, would therefore also lose control over domestic fiscal policy.
[edit] Controversies
[edit] Credit rating agencies
The international credit rating agencies – Moody's, S&P and Fitch – have played a central[98] and controversial role[99] in the current European bond market crisis.[100] As with the housing bubble[101][102] and the Icelandic crisis,[103][104] the ratings agencies have been under fire. The agencies have been accused of giving overly generous ratings due to conflicts of interest.[105] Ratings agencies also have a tendency to act conservatively, and to take some time to adjust when a firm or country is in trouble.[106] In the case of Greece, the market responded to the crisis before the downgrades, with Greek bonds trading at junk levels several weeks before the ratings agencies began to describe them as such.[98]
Government officials have criticised the ratings agencies and the German finance minister has said traders should not take global rating agencies "too seriously" following downgrades of Greece, Spain and Portugal. Guido Westerwelle, German foreign minister, called for an "independent" European rating agency, which could avoid the conflicts of interest that he claimed US-based agencies faced.[107] According to the Financial Times "The latest furore over the agencies' role in the sovereign debt market"[107] is likely to bring about more supervision of these agencies. Germany's foreign minister suggested the European Union should create its own rating agency. He spoke after downgrades of Greece and Portugal roiled financial markets.[98]
European leaders are reportedly studying the possibility of setting up a European ratings agency in order that the private U.S.-based ratings agencies have less influence on developments in European financial markets in the future.[108][109] Due to the failures of the ratings agencies, European regulators will be given new powers to supervise ratings agencies.[99] These supervisory powers will come into effect in December 2010.
In a response to the actions of the private U.S. based ratings agencies the ECB announced on 3 May that it will accept as collateral all outstanding and new debt instruments issued or guaranteed by the Greek government, regardless of the nation's credit rating.[110]
[edit] Media
There has been considerable controversy about the role of the English-language press in the regard to the bond market crisis.[111][112] Spanish Prime Minister José Luis Rodríguez Zapatero ordered the Centro Nacional de Inteligencia intelligence service to investigate the role of the "Anglo-Saxon media" in fomenting the crisis.[113][114][115][116] No results have so far been reported as a result of this investigation.
According to the Madrid daily El País, "the National Intelligence Center (CNI) was investigating 'whether investors' attacks and the aggressiveness of some Anglo-Saxon [sic] media are driven by market forces and challenges facing the Spanish economy, or whether there is something more behind this campaign.'"[117][118][119] The Spanish Prime Minister has suggested[120] that the recent financial market crisis in Europe is an attempt to draw international capital away from the euro[121] in order that countries, such as the U.K. and the U.S., can continue to fund their large external deficits which are matched by large government deficits.[7] The U.S. and U.K. do not have large domestic savings pools to draw on and therefore are dependent on external savings.[122] This is not the case in the Eurozone which is self funding.[123]
Greek Prime Minister Papandreou is quoted as saying that there was no question of Greece leaving the euro and suggested that the crisis was politically as well as financially motivated. "This is an attack on the eurozone by certain other interests, political or financial".[124]
[edit] Role of speculators
Financial speculators and hedge funds engaged in selling euros have also been accused by both the Spanish and Greek Prime Ministers of worsening the crisis.[125][126] Angela Merkel has stated that "institutions bailed out with public funds are exploiting the budget crisis in Greece and elsewhere."[127]
The role of Goldman Sachs[128] in Greek bond yield increases is also under scrutiny.[129] It is not yet clear to what extent this bank has been involved in the unfolding of the crisis or if they have made a profit as a result of the sell-off on the Greek government debt market.
In response to accusations that speculators were worsening the problem, some markets banned short selling for a few months.[citation needed]
[edit] Timeline of Greek crisis
Below is a brief summary of some of the main events in the Greek Sovereign debt crisis.[130]
[edit] October 2009
- A new Greek government is formed after the election, led by PASOK, which received 43.92% of the popular vote, and 160 of 300 parliament seats.
[edit] November 2009
- 5 Nov.: New budget draft reveals a deficit of 12.7% of GDP, more than twice the previously announced figure.
- 8 Nov.: Final budget draft aims to cut deficit to 8.7% of GDP in 2010. Draft also projects total debt rising to 121% of GDP in 2010 from 113.4% in 2009.
[edit] December 2009
- 8 Dec.: Fitch Ratings cuts Greece's rating to BBB+ from A-, with a negative outlook.
- 14 Dec.: Greek PM Papandreou outlines first round of policies to cut deficit and regain investor trust.
- 16 Dec.: S&P cuts Greece's rating to BBB+ from A-.
- 22 Dec.: Moody's cuts Greece's rating to A2 from A1.
[edit] January 2010
- 14 Jan.: Greece unveils the Stability and Growth Program which aims to cut deficit from 12.7% in 2009 to 2.8% in 2012.
- Jan. xx: 5-year bond issue is five-times oversubscribed but yields and spreads rise.
[edit] February 2010
- 2 Feb.: Government extends public sector wage freeze to those earning less than EUR 2,000 a month.
- 3 Feb.: EU Commission backs Greece's Stability and Growth Program and urges it to cut its overall wage bill.
- 24 Feb.: One-day general strike against the austerity measures halts public services and transport system.
- 25 Feb.: EU mission in Athens with IMF experts delivers grim assessment of country's finances.
[edit] March 2010
- 5 Mar.: New public sector wage cuts and tax increases is passed and estimated to generate savings of EUR 4.8 bn. Measures include increasing VAT by 2% to 21%, cutting public sector salary bonuses by 30%, increases on fuel, tobacco and alcohol consumption taxes and freezing state-funded pensions in 2010.
- 11 Mar.: Public and private sector workers strike.
- 15 Mar.: EMU finance ministers agree on mechanism to help Greece but reveal no details.
- 18 Mar.: Papandreou warns Greece will not be able to cut deficit if borrowing costs remain as high as they are and may have to go to the IMF.
- 19 Mar.: European Commission President José Manuel Barroso urges EU member states to agree a standby aid package for Greece. Barroso says the EMU countries should be on stand by to make bilateral loans.
- 25 Mar.: ECB President Jean-Claude Trichet says his bank will extend softer rules on collateral (accepting BBB? instead of the standard A-) for longer (up to 2011) in order to avoid a situation where one ratings agency (Moody's) basically decides if an EMU country's bonds are eligible for use as ECB collateral.
- Mar.: €5bn in 10-year Greek bonds sold – orders for three times that amount are received.
[edit] April 2010
- 11 Apr.: EMU leaders agree bailout plan for Greece. Terms are announced for EUR 30 bn of bilateral loans (roughly 5% for a three-year loan). EMU countries will participate in the amount based on their ECB country keys. Rates for variable rate loans will be 3m-Euribor plus 300 bp + 100 bp for over three-year loans plus a one-off 50 bp charge for operating expenses. For fixed rate loans rates will be swap rate for the loan's maturity, plus the 300 bp (as in variable) plus the 100 bp for loans over three years plus the 50 bp charge.
- 13 Apr.: ECB voices its support for the rescue plan.
- 15 Apr.: Olli Rehn says there is no possibility of a Greek default and no doubt that Germany will participate in the bail out plan. In the mean time there had been serious objections from parts of German society to the country's participation in the Greek bail-out.
- Apr. Sale of more than 1.5 billion euros Greek Treasury bills met with "stronger-than-expected" demand, albeit at a high interest rate.
- 23 Apr.: Greece officially asks for the disbursement of money from the aid package effectively activating it.
- 27 Apr.: Standard and Poor's downgrades Greece's debt ratings below investment grade to junk bond status.
- 27 Apr.: S&P downgrades Portuguese debt two notches and issues negative outlook, warning that further downgrades to junk status are likely. Stock indices around the world drop two to six percent on the news.
- 28 Apr. S&P downgrades Spanish bonds from AAA to AA-
[edit] May 2010
- 1 May: Protests against the proposed austerity measures in Athens.
- 2 May: Greece announces the latest, fourth, raft of austerity measures.
- 3 May: The ECB announces that it will accept Greek Government Bonds as collateral no matter what their rating is. This effectively means scrapping the BBB-floor in the case of Greece and increasing the likelihood of similar announcements in case other countries run the risk of being downgraded to junk status.[131]
- 4 May: First day of strikes against the austerity measures. Global stock markets react negatively to fears of contagion.[132]
- 5 May: General nationwide strike and demonstrations in major cities in Greece turned violent. Three people were killed when a group of masked people threw petrol bombs in a Marfin Bank branch on Stadiou street.[133][134]
- 6 May: Concerns about the ability of the Eurozone to deal with a spreading crisis effectively caused a severe market sell off, particularly in the US where electronic trading glitches combined with a high volume sell off produced a nearly 1,000 point intra-day drop in the Dow Jones Industrial Average, before it recovered somewhat to close down 347.
- 7 May: Volatility continued to accelerate with an increasing CBOE VIX index and a major widening in currency spreads, particularly dollar-yen and dollar-euro.
- 8 May: Leaders of the eurozone countries resolved in Brussels to take drastic action to protect the euro from further market turmoil after approving a $100 billion bailout plan for Greece.[135]
- 20 May: Fourth general strike in Greece against wage cuts.
[edit] EU emergency measures
On 9 May 2010, Europe's Finance Ministers approved, in an emergency meeting, a rescue package that could provide 750 billion Euros for crisis aid aimed at ensuring financial stability across Europe.[11] The package announced has three components:[136]
- The first part expands a €60 billion (US$70 billion) Eurogroup's stabilisation fund (European Financial Stabilization mechanism).[136] Countries will be able to draw on that fund but activation will be subject to strict conditionalities. It is intended to help any member of the eurozone that is struggling to finance its debts because of high interest rates demanded by the financial markets.[137] All EU countries contribute to this fund on a pro-rata basis, whether they are eurozone countries or not.[138]
- The second part worth €440 billion (US$570 billion) consists of government-backed loans to improve market confidence. The loans will be issued by a Special purpose vehicle (SPV) managed by the Commission and backed by the explicit guarantee of the EMU member states and the implicit guarantee of the European Central Bank. All eurozone economies will participate in funding this mechanism, while other EU members can choose whether to participate. Sweden and Poland have agreed to participate, while the UK's refusal prompted strong criticism from the French government, along with a threat that eurozone countries would not support the pound in the case of speculative attacks.[139] Denmark will not contribute despite its participation in the European Exchange Rate Mechanism.[140]
- Finally the third part consists of €250 billion (US$284 billion), half the size of the EU participation, with additional contribution from the International Monetary Fund.[141][142]
The agreement also allowed the European Central Bank to start buying government debt which is expected to reduce bond yields.[143] (Greek bond yields fell from over 10% to just over 5%;[144] Asian bonds also fell with the EU bailout.[145])
The ECB has also announced a series measures aimed at reducing volatility in the financial markets and at improving liquidity:[146]
- First, it began open market operations buying government and private debt securities.
- Second, it announced two 3-month and one 6-month full allotment of Long Term Refinancing Operations (LTRO's).
- Thirdly, it reactivated the dollar swap lines[147] with Federal Reserve support.[148]
Subsequently, the member banks of the European System of Central Banks started buying government debt.[149]
Stocks worldwide surged after this announcement as fears that the Greek debt crisis would spread subsided,[150] some rose the most in a year or more.[151] The Euro made its biggest gain in 18 months,[152] before falling to a new four-year low a week later.[153] Commodity prices also rose following the announcement.[154] The dollar Libor held at a nine-month high.[155] Default swaps also fell.[156] The VIX closed down a record almost 30%, after a record weekly rise the preceding week that prompted the bailout.[157]
Despite the moves by the EU, the European Commissioner for Economic and Financial Affairs, Olli Rehn, called for "absolutely necessary" deficit cuts by the heavily indebted countries of Spain and Portugal.[158] Private sector bankers and economists also warned that the threat from a double dip recession has not faded. Stephen Roach, chairman of Morgan Stanley Asia, warned about this threat saying "When you have a vulnerable post-crisis economic recovery and crises reverberating in the aftermath of that, you have some very serious risks to the global business cycle."[159] Nouriel Roubini said the new credit available to the heavily indebted countries did not equate to an immediate revival of economic fortunes: "While money is available now on the table, all this money is conditional on all these countries doing fiscal adjustment and structural reform."[160]
After initially falling to a four-year low early in the week following the announcement of the EU guarantee packages, the euro rose as hedge funds and other short-term traders unwound short positions and carry trades in the currency.[161]
[edit] See also
[edit] References
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[edit] External links
- New York Times Map of European Debts
- Protests in Greece in Response to Severe Austerity Measures in EU, IMF Bailout – video report by Democracy Now!
- 'The Greek Crisis – Politics, Economics, Ethics' Audio podcast of debate held at Birkbeck College University of London on 5 May 2010
- NYT Diagram – Interlocking Debt Positions of European Countries – 1 May 2010
- Google - public data: Government Debt in Europe
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