Tue, Feb. 14, 2012
(Bloomberg) -- Moody's Investors Service cut the debt ratings of six European countries including Italy, Spain, Portugal, Slovakia, Slovenia and Malta, and said it may strip France and the U.K. of their top Aaa ratings, citing Europe's debt crisis. Caroline Hyde and Mark Barton report on Bloomberg Television's "First Look." (source: Bloomberg)
Showing posts with label France. Show all posts
Showing posts with label France. Show all posts
Tuesday, February 14, 2012
Saturday, December 31, 2011
Chinese acquisitions into Australia trebles
Saturday, 31 Dec 2011
It is reported that though the UK, the US and Canada are home to companies that engaged in 60% of Australian M&A in 2011, Chinese corporates announced deals worth USD 9.9 billion almost three times the USD 3.7 billion notched in 2010 according to Dealogic.
At 15.1%, China market share of inbound M&A volume has been helped by two deals which are yet to close the USD 2.1bn merger between Yanzhou Coal Mining and Gloucester Coal and Hanlong Mining USD 1.65 billion takeover of Sundance Resources.
Both are the largest Chinese Australian tie-ups on record behind Yanzhou USD 3.5 billion acquisition of Felix Resources in 2009 making Australia the most targeted nation by China in 2011 followed by France, Hong Kong, Canada and Brazil.
(Sourced from www.theaustralian.com.au)
It is reported that though the UK, the US and Canada are home to companies that engaged in 60% of Australian M&A in 2011, Chinese corporates announced deals worth USD 9.9 billion almost three times the USD 3.7 billion notched in 2010 according to Dealogic.
At 15.1%, China market share of inbound M&A volume has been helped by two deals which are yet to close the USD 2.1bn merger between Yanzhou Coal Mining and Gloucester Coal and Hanlong Mining USD 1.65 billion takeover of Sundance Resources.
Both are the largest Chinese Australian tie-ups on record behind Yanzhou USD 3.5 billion acquisition of Felix Resources in 2009 making Australia the most targeted nation by China in 2011 followed by France, Hong Kong, Canada and Brazil.
(Sourced from www.theaustralian.com.au)
Thursday, November 3, 2011
Greece crisis: Greece exit from euro possible: France, Germany
Thu, 3 Nov, 2011
CANNES, France: European leaders' long-delayed admission that a break-up of their cherished common currency was a distinct possibility is overshadowing a two-day meeting of the world's largest and fastest growing economies beginning Thursday in this Cote d'Azur resort.
French President Nicolas Sarkozy will welcome Barack Obama of the US, Hu Jintao of China as well as the leaders of India, Brazil, Russia and the other members of the Group of 20 leading world economies in the city made famous by its annual film festival, but the event is far from the star turn the unpopular French leader had hoped to make six months before he faces a tough re-election vote.
Sarkozy and other top EU officials have long held that it was unthinkable for Greece to quit the euro because it would be, Sarkozy has said, ``a failure of Europe.''
But in a late-night press conference with German chancellor Angela Merkel Wednesday, the leaders signalled for the first time that Greece's exit from the euro was indeed possible.
Saying that Europe had ``done everything we could'' to keep Greece in the eurozone, Sarkozy said ``now it is up to them to decide if they want to stay in the euro with us.''
That shift was prompted by the shock decision of Greek Prime Minister George Papandreou to call a controversial referendum on his country's $130 billion European bailout plan in early December that caught European leaders completely off guard and scrambling for a response.
Papandreou's stunning announcement Monday that he would stage a referendum roiled world financial markets and threw into question an ambitious and costly European deal worked out in torturous negotiations a week ago.
Merkel confirmed that Greece did not inform the rest of the eurozone about the referendum. ``This did not happen in a coordinated fashion,'' she said.
She and Sarkozy summoned Papandreou to Cannes for talks Wednesday at which European leaders expressed their anger and pressed him to hold the referendum as soon as possible.
A ``no'' vote in the referendum would have enormous consequences not just for Greece but for the rest of Europe. It could lead to a disorderly Greek default, force Greece out of the 17-nation eurozone, topple many fragile European banks and send the global economy spinning back into recession.
Sarkozy's office announced yet another round of discussions about Greece for Thursday morning, with Germany, Italy, Spain, the IMF and the European Union. The talks will notably not include Greece itself.
Playing hardball, eurozone officials said an (euro) 8 billion ($11 billion) loan that Greece needs within weeks to avoid bankruptcy was conditional on Greece backing the latest rescue deal.
Sarkozy had hoped the meeting of leaders of the Group of 20 leading world economies, in Cannes on Thursday and Friday, would be Europe's chance to assure the rest of the world that a comprehensive plan to deal with its debt crisis had finally been reached after nearly two years of half-measures and procrastination.
Papandreou's gambit ended that lofty ambition and likely derailed Sarkozy's hopes of transforming a successful summit into a boost to his own re-election chances.
The G-20 leaders are slated to discuss food security, reform of the international monetary system and the volatility of commodity prices _ none of which is expected to get much attention or produce any solid conclusions at a summit so dominated by the European quagmire.
Anti-capitalist protesters have not been cowed by the European debt drama, and have staged demonstrations demanding a tax on all financial transactions, an end to tax havens and more aid for development.
(sourced EconomicTimes)
CANNES, France: European leaders' long-delayed admission that a break-up of their cherished common currency was a distinct possibility is overshadowing a two-day meeting of the world's largest and fastest growing economies beginning Thursday in this Cote d'Azur resort.
French President Nicolas Sarkozy will welcome Barack Obama of the US, Hu Jintao of China as well as the leaders of India, Brazil, Russia and the other members of the Group of 20 leading world economies in the city made famous by its annual film festival, but the event is far from the star turn the unpopular French leader had hoped to make six months before he faces a tough re-election vote.
Sarkozy and other top EU officials have long held that it was unthinkable for Greece to quit the euro because it would be, Sarkozy has said, ``a failure of Europe.''
But in a late-night press conference with German chancellor Angela Merkel Wednesday, the leaders signalled for the first time that Greece's exit from the euro was indeed possible.
Saying that Europe had ``done everything we could'' to keep Greece in the eurozone, Sarkozy said ``now it is up to them to decide if they want to stay in the euro with us.''
That shift was prompted by the shock decision of Greek Prime Minister George Papandreou to call a controversial referendum on his country's $130 billion European bailout plan in early December that caught European leaders completely off guard and scrambling for a response.
Papandreou's stunning announcement Monday that he would stage a referendum roiled world financial markets and threw into question an ambitious and costly European deal worked out in torturous negotiations a week ago.
Merkel confirmed that Greece did not inform the rest of the eurozone about the referendum. ``This did not happen in a coordinated fashion,'' she said.
She and Sarkozy summoned Papandreou to Cannes for talks Wednesday at which European leaders expressed their anger and pressed him to hold the referendum as soon as possible.
A ``no'' vote in the referendum would have enormous consequences not just for Greece but for the rest of Europe. It could lead to a disorderly Greek default, force Greece out of the 17-nation eurozone, topple many fragile European banks and send the global economy spinning back into recession.
Sarkozy's office announced yet another round of discussions about Greece for Thursday morning, with Germany, Italy, Spain, the IMF and the European Union. The talks will notably not include Greece itself.
Playing hardball, eurozone officials said an (euro) 8 billion ($11 billion) loan that Greece needs within weeks to avoid bankruptcy was conditional on Greece backing the latest rescue deal.
Sarkozy had hoped the meeting of leaders of the Group of 20 leading world economies, in Cannes on Thursday and Friday, would be Europe's chance to assure the rest of the world that a comprehensive plan to deal with its debt crisis had finally been reached after nearly two years of half-measures and procrastination.
Papandreou's gambit ended that lofty ambition and likely derailed Sarkozy's hopes of transforming a successful summit into a boost to his own re-election chances.
The G-20 leaders are slated to discuss food security, reform of the international monetary system and the volatility of commodity prices _ none of which is expected to get much attention or produce any solid conclusions at a summit so dominated by the European quagmire.
Anti-capitalist protesters have not been cowed by the European debt drama, and have staged demonstrations demanding a tax on all financial transactions, an end to tax havens and more aid for development.
(sourced EconomicTimes)
Sunday, October 16, 2011
European debt crisis to end in three years: central bank advisor
Sun, Oct16, 2011 | By xinhua
BEIJING, Oct. 16 (Xinhua) -- The European Union debt crisis will end in three years at the latest, meanwhile the euro will not fall apart and EU countries will be strengthened via reforms, said Li Daokui, a central bank advisor, on Saturday.
Greece and Portugal are sure to default on their debt repayments, and they will have to tackle long-term structural problems imbedded in their economies, Li, a member of the Monetary Policy Committee with the People's Bank of China, said in a forum held by Tsinghua University.
Germany and France are capable of bailing themselves out by pumping liquidity into banks and other financial institutions through fiscal measures, Li said.
The advisor said he is more concerned about the economic crisis in the United States, which he referred to as "long-term" and "political."
The government's deficit was relatively easy to cope with, but social problems, which have stoked the current spate of unrest in the United States, are a thornier issue and more difficult to solve, Li said.
Amid the faltering global economy, Chinese policymakers should deepen economic restructuring and should not do a complete turnaround in macro-economic policies, the advisor said.
BEIJING, Oct. 16 (Xinhua) -- The European Union debt crisis will end in three years at the latest, meanwhile the euro will not fall apart and EU countries will be strengthened via reforms, said Li Daokui, a central bank advisor, on Saturday.
Greece and Portugal are sure to default on their debt repayments, and they will have to tackle long-term structural problems imbedded in their economies, Li, a member of the Monetary Policy Committee with the People's Bank of China, said in a forum held by Tsinghua University.
Germany and France are capable of bailing themselves out by pumping liquidity into banks and other financial institutions through fiscal measures, Li said.
The advisor said he is more concerned about the economic crisis in the United States, which he referred to as "long-term" and "political."
The government's deficit was relatively easy to cope with, but social problems, which have stoked the current spate of unrest in the United States, are a thornier issue and more difficult to solve, Li said.
Amid the faltering global economy, Chinese policymakers should deepen economic restructuring and should not do a complete turnaround in macro-economic policies, the advisor said.
Thursday, October 13, 2011
BHP Billiton: Raw material prices will come down in long run
Thursday, 13 October 2011
Mining giant BHP Billiton's chief executive ferrous and coal Marcus Randolph said at the 45th annual meeting of the World Steel Association (worldsteel) held in Paris on October 13, that steelmaking raw material prices, including prices of iron ore and coking coal, have increased significantly in the last 10 years since raw material demand has grown so fast that raw material producers have been unable to keep up.
Mr. Randolph stated that almost half of the seaborne iron ore trade is destined to China, while he predicted that the apparent steel consumption of China, which is currently a bit higher than 400 kg per capita will continue to rise for a while and then will begin to trend sideways at about 600 kg per capita. Thus, at some point the growth of China's iron ore demand is expected to slow down. According to Mr. Randolph's presentation, between 2010 and 2020 world iron ore demand will grow by four percent, while seaborne demand is expected to rise by five percent, as the seaborne trade is dominated by Chinese demand. As for coking coal, Mr. Randolph told attendees that, while China had been a net exporter of coking coal in the past, the country reached its coking coal production limit by 2008. As a result the growth in the seaborne coking coal trend differs from that for iron ore. Between 2010 and 2020, world coking coal demand is foreseen to rise by three percent, while seaborne demand is expected to increase by five percent in the same period.
In order to close the gap between demand and supply, Randolph said that huge investments are being implemented. Between 2010 and 2020, iron ore production in Australia is expected to increase by 15 percent, iron ore output is predicted to rise in Brazil by 12 percent, by 49 percent in West Africa and by three percent in India. However, supplies may still fall short even if all these projects are completed, the BHP Billiton official warned.
As for coking coal, between 2010 and 2020 coking coal output in Australia is expected to increase six percent, the output is predicted to grow by 15 percent in China, by 14 percent in Russia, five percent in Canada and 39 percent in South Africa.
Marcus Randolph defended the short-term pricing system, stating that the annual negotiations result in the buildup of large debts from the difference between the old price and the new price, and that deliveries get cancelled when spot prices are below the contract price or when low cost suppliers have been forced to cut production. Randolph said that market pricing mechanisms are now more transparent and the development of forward markets gives customers financial management tools.
Finally, Mr. Randolph told attendees that he expects iron ore prices to come down; however, the speed with which this happens, he said, will depend on project developments in Africa, Mongolia and Russia.
Tags: iron ore , coking coal , raw mat , Australia , China , Oceania , Far East , BHP , conferences , steelmaking , East Asia and Pacific
(sourced steelorbis)
Mining giant BHP Billiton's chief executive ferrous and coal Marcus Randolph said at the 45th annual meeting of the World Steel Association (worldsteel) held in Paris on October 13, that steelmaking raw material prices, including prices of iron ore and coking coal, have increased significantly in the last 10 years since raw material demand has grown so fast that raw material producers have been unable to keep up.
Mr. Randolph stated that almost half of the seaborne iron ore trade is destined to China, while he predicted that the apparent steel consumption of China, which is currently a bit higher than 400 kg per capita will continue to rise for a while and then will begin to trend sideways at about 600 kg per capita. Thus, at some point the growth of China's iron ore demand is expected to slow down. According to Mr. Randolph's presentation, between 2010 and 2020 world iron ore demand will grow by four percent, while seaborne demand is expected to rise by five percent, as the seaborne trade is dominated by Chinese demand. As for coking coal, Mr. Randolph told attendees that, while China had been a net exporter of coking coal in the past, the country reached its coking coal production limit by 2008. As a result the growth in the seaborne coking coal trend differs from that for iron ore. Between 2010 and 2020, world coking coal demand is foreseen to rise by three percent, while seaborne demand is expected to increase by five percent in the same period.
In order to close the gap between demand and supply, Randolph said that huge investments are being implemented. Between 2010 and 2020, iron ore production in Australia is expected to increase by 15 percent, iron ore output is predicted to rise in Brazil by 12 percent, by 49 percent in West Africa and by three percent in India. However, supplies may still fall short even if all these projects are completed, the BHP Billiton official warned.
As for coking coal, between 2010 and 2020 coking coal output in Australia is expected to increase six percent, the output is predicted to grow by 15 percent in China, by 14 percent in Russia, five percent in Canada and 39 percent in South Africa.
Marcus Randolph defended the short-term pricing system, stating that the annual negotiations result in the buildup of large debts from the difference between the old price and the new price, and that deliveries get cancelled when spot prices are below the contract price or when low cost suppliers have been forced to cut production. Randolph said that market pricing mechanisms are now more transparent and the development of forward markets gives customers financial management tools.
Finally, Mr. Randolph told attendees that he expects iron ore prices to come down; however, the speed with which this happens, he said, will depend on project developments in Africa, Mongolia and Russia.
Tags: iron ore , coking coal , raw mat , Australia , China , Oceania , Far East , BHP , conferences , steelmaking , East Asia and Pacific
(sourced steelorbis)
Tuesday, October 11, 2011
Europe warned of systemic crisis over debt
Tue Oct 11, 2011
By Sakari Suoninen and Martin Santa
Frankfurt/Bratislava (Reuters) - Europe's top financial watchdog warned on Tuesday that the euro zone's sovereign debt crisis has become systemic and threatens global economic stability unless decisive action is taken urgently.
European Central Bank President Jean-Claude Trichet issued the dramatic warning as chairman of the European Systemic Risk Board, created to avoid a repeat of the 2008 financial crisis, amid growing fears that Greece will default on its massive debt.
"The crisis is systemic and must be tackled decisively," Trichet told a European Parliament committee in his final appearance before retiring at the end of the month.
"The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."
European banking regulators meanwhile asked banks across the continent to provide updated data on their capital position and sovereign debt exposures to help reassess their need for recapitalisation.
Germany and France, the leading powers in the 17-nation euro zone, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit delayed until Oct. 23.
But they must first resolve differences over how to recapitalise banks, whether to force a Greek debt restructuring or stick to a voluntary deal with private bondholders and how to use the euro zone's rescue fund.
Trichet was speaking before international lenders were due to deliver a provisional verdict on Greece's troubled reform and austerity programme, while the fate of the euro zone's rescue fund hung in the balance in Slovakia's parliament.
Slovak Prime Minister Iveta Radicova raised the stakes in a battle to win approval for new powers for the European Financial Stability Facility by tying the decision to a vote of confidence in her centre-right government.
The small, liberal SaS party, the only member of the five-party ruling coalition which opposes the EFSF, said it would abstain, depriving the government of the votes needed to pass the motion.
EU diplomats expressed confidence that the EFSF agreement approved by the 16 other euro zone countries would eventually be ratified, noting that the Slovak parliament can hold a second vote if ratification is rejected at the first attempt. However, it may bring down the government in Bratislava.
TORTURED PROGRESS
In Athens, inspectors from the European Commission, the European Central Bank and the International Monetary Fund were due to issue a statement after completing an extended review of Greece's tortured progress on its bailout programme.
Anti-austerity protesters blocked ministries and state workers went on strike as Greeks awaited the verdict on whether international lenders will hand over a vital tranche of aid needed to stave off imminent bankruptcy.
The so-called troika is due to send a detailed report to euro zone finance ministers and the IMF board next week, and it was not clear whether Tuesday's statement would contain a clear recommendation on releasing the 8 billion euros the government needs to pay salaries and pensions in November. Its next major debt redemption is due in December.
Speaking shortly before the statement was due, Finance Minister Evangelos Venizelos told a conference: "Greece is and will always be a member of the euro zone, a member of the euro."
Europe's inability to draw a line under the crisis has caused growing international alarm, with Japan weighing in on Tuesday after the United States and Britain pressed EU leaders to take decisive action.
Japan said it would consult with the United States before it considers buying more euro zone bonds. Finance Minister Jun Azumi urged Europe to restore market confidence in the run-up to a Group of 20 finance leaders' meeting in Paris this week.
Azumi repeated that Japan stood ready to buy more euro zone bonds so long as Europe comes up with a solid scheme to solve a crisis that has resulted in financial rescues for Greece, Ireland and Portugal.
Interbank lending rates in Europe continued to rise amid growing concern over European banks' ability to handle the debt crisis, despite the prospect of massive ECB liquidity support.
Three-month Euribor rates , traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, rose to 1.570 percent from 1.567 percent.
Some European banks voiced concern at the prospect of being forced by governments to raise additional capital some say they do not need, possibly taking public money.
Germany's banking association said Europe should look at recapitalisation on a case-by-case basis rather than taking a blanket approach apparently envisaged by Berlin and Paris.
The director of the BDB association, Michael Kemmer, also told ARD television that politicians should stick to a July agreement on voluntary private bondholder involvement in a rescue plan for Greece.
That deal envisaged a 21 percent writedown on Greek debt for banks and insurers that participate in a bond swap to reduce and stretch out Greece's debt burden.
However, German Finance Minister Wolfgang Schaeuble and the chairman of euro group finance ministers, Jean-Claude Juncker, have said that figure may no longer be sufficient and the talks may have to be reopened.
Speaking on Austrian television late on Monday, Juncker refused to rule out a mandatory debt restructuring for Greece, which many market analysts and economists say is bound to happen in the coming months.
Many analysts see the rush to recapitalise European banks as a prelude to an enforced write-down of 50 percent or more on their Greek debt holdings. (sourced Reuters)
By Sakari Suoninen and Martin Santa
Frankfurt/Bratislava (Reuters) - Europe's top financial watchdog warned on Tuesday that the euro zone's sovereign debt crisis has become systemic and threatens global economic stability unless decisive action is taken urgently.
European Central Bank President Jean-Claude Trichet issued the dramatic warning as chairman of the European Systemic Risk Board, created to avoid a repeat of the 2008 financial crisis, amid growing fears that Greece will default on its massive debt.
"The crisis is systemic and must be tackled decisively," Trichet told a European Parliament committee in his final appearance before retiring at the end of the month.
"The high interconnectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond."
European banking regulators meanwhile asked banks across the continent to provide updated data on their capital position and sovereign debt exposures to help reassess their need for recapitalisation.
Germany and France, the leading powers in the 17-nation euro zone, have promised to propose a comprehensive strategy to fight the debt crisis at an EU summit delayed until Oct. 23.
But they must first resolve differences over how to recapitalise banks, whether to force a Greek debt restructuring or stick to a voluntary deal with private bondholders and how to use the euro zone's rescue fund.
Trichet was speaking before international lenders were due to deliver a provisional verdict on Greece's troubled reform and austerity programme, while the fate of the euro zone's rescue fund hung in the balance in Slovakia's parliament.
Slovak Prime Minister Iveta Radicova raised the stakes in a battle to win approval for new powers for the European Financial Stability Facility by tying the decision to a vote of confidence in her centre-right government.
The small, liberal SaS party, the only member of the five-party ruling coalition which opposes the EFSF, said it would abstain, depriving the government of the votes needed to pass the motion.
EU diplomats expressed confidence that the EFSF agreement approved by the 16 other euro zone countries would eventually be ratified, noting that the Slovak parliament can hold a second vote if ratification is rejected at the first attempt. However, it may bring down the government in Bratislava.
TORTURED PROGRESS
In Athens, inspectors from the European Commission, the European Central Bank and the International Monetary Fund were due to issue a statement after completing an extended review of Greece's tortured progress on its bailout programme.
Anti-austerity protesters blocked ministries and state workers went on strike as Greeks awaited the verdict on whether international lenders will hand over a vital tranche of aid needed to stave off imminent bankruptcy.
The so-called troika is due to send a detailed report to euro zone finance ministers and the IMF board next week, and it was not clear whether Tuesday's statement would contain a clear recommendation on releasing the 8 billion euros the government needs to pay salaries and pensions in November. Its next major debt redemption is due in December.
Speaking shortly before the statement was due, Finance Minister Evangelos Venizelos told a conference: "Greece is and will always be a member of the euro zone, a member of the euro."
Europe's inability to draw a line under the crisis has caused growing international alarm, with Japan weighing in on Tuesday after the United States and Britain pressed EU leaders to take decisive action.
Japan said it would consult with the United States before it considers buying more euro zone bonds. Finance Minister Jun Azumi urged Europe to restore market confidence in the run-up to a Group of 20 finance leaders' meeting in Paris this week.
Azumi repeated that Japan stood ready to buy more euro zone bonds so long as Europe comes up with a solid scheme to solve a crisis that has resulted in financial rescues for Greece, Ireland and Portugal.
Interbank lending rates in Europe continued to rise amid growing concern over European banks' ability to handle the debt crisis, despite the prospect of massive ECB liquidity support.
Three-month Euribor rates , traditionally the main gauge of unsecured interbank euro lending and a mix of interest rate expectations and banks' appetite for lending, rose to 1.570 percent from 1.567 percent.
Some European banks voiced concern at the prospect of being forced by governments to raise additional capital some say they do not need, possibly taking public money.
Germany's banking association said Europe should look at recapitalisation on a case-by-case basis rather than taking a blanket approach apparently envisaged by Berlin and Paris.
The director of the BDB association, Michael Kemmer, also told ARD television that politicians should stick to a July agreement on voluntary private bondholder involvement in a rescue plan for Greece.
That deal envisaged a 21 percent writedown on Greek debt for banks and insurers that participate in a bond swap to reduce and stretch out Greece's debt burden.
However, German Finance Minister Wolfgang Schaeuble and the chairman of euro group finance ministers, Jean-Claude Juncker, have said that figure may no longer be sufficient and the talks may have to be reopened.
Speaking on Austrian television late on Monday, Juncker refused to rule out a mandatory debt restructuring for Greece, which many market analysts and economists say is bound to happen in the coming months.
Many analysts see the rush to recapitalise European banks as a prelude to an enforced write-down of 50 percent or more on their Greek debt holdings. (sourced Reuters)
Monday, August 22, 2011
Greek collateral deals negative for rating - Moody's
Monday 22 August 2011
LONDON (Reuters) - A series of agreements forcing Greece to provide collateral in return for aid from foreign governments would be negative for the credit ratings of Greece and other troubled euro zone states, Moody's ratings agency said on Monday.
The agency also said such deals showed a lack of will in some euro zone countries that put more pressure on Germany and France to take stronger steps to support the euro project.
Austria, the Netherlands and Slovakia said on Friday they wanted collateral on their loans to Greece after Finland secured such a commitment, but Greek officials have said they were not talking to countries other than Finland about such a plan.
Moody's warned that the pursuit of such agreements could delay the next tranche of aid for Greece and threaten to cause a default on payments on its debt.
It said a proliferation of collateral agreements would also limit the availability of funds for future bailout programs, and that for these reasons it expected other euro area members ultimately to reject the Finland-Greece deal.
"The tentative Finnish-Greek collateral accord raises concerns about the willingness and ability of some euro area policymakers to implement measures that may prove necessary to preserve the stability of the European Monetary Union," it said.
"This reticence places greater pressure on Germany and France to stake out a strongly supportive stance towards the euro area, with more concrete and immediate effect than the proposals the two countries made last week, in order to shore up the single-currency project."
LONDON (Reuters) - A series of agreements forcing Greece to provide collateral in return for aid from foreign governments would be negative for the credit ratings of Greece and other troubled euro zone states, Moody's ratings agency said on Monday.
The agency also said such deals showed a lack of will in some euro zone countries that put more pressure on Germany and France to take stronger steps to support the euro project.
Austria, the Netherlands and Slovakia said on Friday they wanted collateral on their loans to Greece after Finland secured such a commitment, but Greek officials have said they were not talking to countries other than Finland about such a plan.
Moody's warned that the pursuit of such agreements could delay the next tranche of aid for Greece and threaten to cause a default on payments on its debt.
It said a proliferation of collateral agreements would also limit the availability of funds for future bailout programs, and that for these reasons it expected other euro area members ultimately to reject the Finland-Greece deal.
"The tentative Finnish-Greek collateral accord raises concerns about the willingness and ability of some euro area policymakers to implement measures that may prove necessary to preserve the stability of the European Monetary Union," it said.
"This reticence places greater pressure on Germany and France to stake out a strongly supportive stance towards the euro area, with more concrete and immediate effect than the proposals the two countries made last week, in order to shore up the single-currency project."
Saturday, August 13, 2011
Life after the U.S. rating downgrade
Aug 12, 2011
By Nipun Mehta, Reuters
The unthinkable (for some) happened last week when the U.S. economy was downgraded from ‘AAA’ to ‘AA+’ with a negative outlook by Standard & Poor’s, one of the three large global rating agencies.
That led to an interesting situation where European economies like France and the UK are rated higher than the U.S., despite huge concerns about their financial condition. The event would undoubtedly have hurt the American ego, particularly since S&P announced that there could be more downgrades in the offing.
That this was an event that was imminent is accepted by many, but what is in store for the global economy and the Indian economy going forward?
There are several concerns that will keep haunting the central banks, the equity markets and governments around the world. These include:
- What if the UK and France are downgraded too?
- Will the other two rating agencies also downgrade U.S. in a few weeks’ time?
- How long before some U.S. companies and state and local governments get downgraded?
- Why is Spain still rated AA, Italy A+ and Ireland BBB+, when India and Brazil are rated ‘BBB-‘, by Standard & Poor’s? Will these European economies be downgraded soon?
- At ‘BBB-‘, why are India and Brazil rated the same as Portugal which has serious economic issues?
While a downgrade of one or more of the European economies is waiting to happen, one can rest assured that any such event can and will have a severe contagion effect on the other EU economies due to their linkage. Several European banks would undergo a rating change too under such circumstances.
The fact remains that even as far as the EU is concerned, the situation is delicate and we continue to tread on thin ice. Amidst all this is the bigger question of how long the U.S., being the world’s largest economy, will take to come out of the recessionary condition. One could just see another round of QE3 in the U.S. or a round of bank funding that we witnessed by France and the UK in 2008.
The other issue is of fiscal discipline by these countries which are facing a deep financial crisis. The easiest thing to reduce deficits is to raise taxes. What is always difficult for governments is to reduce expenditure as this could further lead to potentially slowing down the economy. It’s always a fine balance that needs to be created between inflationary pressures (that events like quantitative easing measures create) and recessionary conditions (which reduced expenditure can potentially create).
Given the global concerns, world equity and commodity markets will be affected even if they may not be directly impacted by the downgrade. Global currency and bond markets have already seen considerable volatile movements due to movement of large funds into and out of them.
While crude and commodity prices have eased post the event, how long they continue to fall, or sustain at lower levels will determine the inflation levels in several economies, as well as profitability of several companies in the manufacturing sector.
Select Asian economies on the other hand presently face the opposite task of inflationary pressures due to fast paced growth. It is due to this that equity markets in select Asian economies will possibly stabilise faster than the European or U.S. markets.
Risk aversion has ensured that funds move to safer asset classes like gold. One should not be surprised if part of these funds move to emerging economies once there are signs of stability in the global markets.
As far as Indian markets are concerned, once the global negative news subsides, it will be a choice between fundamentals, liquidity and valuations. While interest rate concerns, domestic scams and lack of decision making by the government continue to pull down sentiment, fundamentals remain strong and valuations are becoming increasingly attractive.
What is missing is the FII liquidity which can drive the markets upwards. In a situation where both the U.S. and EU face deep concerns over their fiscal policies, it may not be too long before emerging markets and India start attracting flows. We do need to closely watch policy action by the RBI.
Nibble into the equity markets if you have the risk taking ability to see some more volatility arising out of possible announcements from the U.S./ EU economies. If not, wait till there is greater stability in the global markets.
Euro zone crisis reaches France, turns existential
Aug12, 2011 |By Paul Taylor, Reuters
PARIS (Reuters) - It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.
As jitters over Paris' prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France's plight.
The sight of the euro zone's number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.
The fragile edifice of support for weaker European states would start to crumble if France, the second contributor to the euro zone's rescue fund, were to face a debt downgrade.
All three major ratings agencies reaffirmed this week that no such downgrade was in the works, but that didn't suffice to calm markets.
Up to now, Sarkozy has projected himself as an energetic statesman orchestrating the rescue of the euro zone. Suddenly he had to turn to crisis management at home.
This week's perfect summer storm wiped 10 billion euros off French banks' market value and left France looking at times like the country in need of help itself.
The disclosure that the economy failed to grow at all in the second quarter, after a healthy 0.9 percent spurt in Q1, amplified concerns about the government's ability to meet its target of cutting the deficit to 5.7 percent of GDP this year.
Worryingly, household consumption fell by the biggest amount in a decade, suggesting consumers are reining in spending because they fear hard times and higher taxes ahead.
UNPALATABLE CHOICES
Just eight months before the first round of a presidential election, Sarkozy faces unpalatable choices between removing more tax breaks to increase revenue and cutting public spending, both of which could further depress anaemic growth.
The centre-right president has tried to upstage his Socialist opposition by proposing to introduce a German-style fiscal rule on deficit reduction in the constitution. Socialist votes would be needed to achieve the required super-majority.
Socialist leaders have refused so far to cooperate with what they call Sarkozy's "trap" and sought instead to blame him for increasing the deficit with tax give-aways for the rich.
The issue is bound to be one of the major battlegrounds of the campaign for the presidential election next April and May.
Sarkozy's approval ratings have improved since Socialist front-runner and former IMF head Dominique Strauss-Kahn was forced out the race after his arrest in New York on sexual assault charges.
But both main contenders for the Socialist nomination, Francois Hollande and Martine Aubry, are still ahead of the president in the polls at the moment.
IRRATIONAL AND RATIONAL
French authorities are still not entirely sure what hit them this week. There were both rational and irrational reasons for the market attack.
When Standard & Poor's knocked the United States off its triple-A perch last Friday, markets started looking for who else might be in line, turning a spotlight on France, with the biggest debt and deficit ratios among the six AAA-rated euro zone countries.
Economist Jacques Attali, a former top aide to President Francois Mitterrand, noted that S&P had specifically compared France with the United States, saying it was the only other AAA country that would have a similar debt ratio in 2015.
"Contrary to what everyone says, we are explicitly singled out," Attali told the daily Le Monde in an interview.
"Hence we must a bring our debt down below 85 percent of GDP by the end of 2013, and get back to 70 percent in this decade. That won't be easy."
The cost of insuring French public debt against default reached a new peak during the week yet by Friday, France's 10-year bond yield had fallen back below 3 percent for the first time since November 2010, hardly a sign of imminent meltdown.
The country does have an Achilles' heel: stress tests have shown that its banks are among the most heavily exposed to debt in the euro zone periphery, particularly Greece and Italy.
The sight of the European Central Bank buying Italian bonds on the secondary market to prevent Rome's borrowing costs rising to unsustainable levels, and reports that Greece's debt swap would be extended to bonds maturing up to 2024, combined with wild market rumours to hit French lenders.
Shares in Societe Generale plunged as much as 23 percent on Wednesday before closing 15 percent lower. BNP Paribas and Credit Agricole suffered lesser hits.
A senior SocGen executive told Reuters the bank was worried that heightened market tensions culd lead to a 2008-type credit crunch in which banks stop lending to one another.
French regulators, joined by their Italian, Spanish and Belgian counterparts, banned short-selling of financial shares on Thursday in a temporary response to try to halt rumour-driven herd behaviour. Bank shares rose modestly on Friday.
A senior risk manager at a large European bank, speaking on condition of anonymity, said one reason for the losses on French and European bank shares was that short sellers were targeting banks instead of government bonds.
"Because it's increasingly difficult to trade CDS on sovereign debt, short sellers take bank shares as proxy for sovereign bonds of the respective countries. If you bet on losses of French sovereign bonds for instance, short selling of French banks is very promising," he told Reuters.
Under cover of anonymity, several traders and government officials suggest hedge funds had shorted French debt in anticipation of a downgrade and turned on the banks when it became clear this was not going to happen.
A French fund manager said he clearly witnessed a "France bashing session" on Wednesday.
He said a U.S. bank had sent a market-wide message citing six reasons to sell shares of a French investment firm. The reasons invoked were "because it is French", six times.
PARIS (Reuters) - It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.
As jitters over Paris' prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France's plight.
The sight of the euro zone's number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.
The fragile edifice of support for weaker European states would start to crumble if France, the second contributor to the euro zone's rescue fund, were to face a debt downgrade.
All three major ratings agencies reaffirmed this week that no such downgrade was in the works, but that didn't suffice to calm markets.
Up to now, Sarkozy has projected himself as an energetic statesman orchestrating the rescue of the euro zone. Suddenly he had to turn to crisis management at home.
This week's perfect summer storm wiped 10 billion euros off French banks' market value and left France looking at times like the country in need of help itself.
The disclosure that the economy failed to grow at all in the second quarter, after a healthy 0.9 percent spurt in Q1, amplified concerns about the government's ability to meet its target of cutting the deficit to 5.7 percent of GDP this year.
Worryingly, household consumption fell by the biggest amount in a decade, suggesting consumers are reining in spending because they fear hard times and higher taxes ahead.
UNPALATABLE CHOICES
Just eight months before the first round of a presidential election, Sarkozy faces unpalatable choices between removing more tax breaks to increase revenue and cutting public spending, both of which could further depress anaemic growth.
The centre-right president has tried to upstage his Socialist opposition by proposing to introduce a German-style fiscal rule on deficit reduction in the constitution. Socialist votes would be needed to achieve the required super-majority.
Socialist leaders have refused so far to cooperate with what they call Sarkozy's "trap" and sought instead to blame him for increasing the deficit with tax give-aways for the rich.
The issue is bound to be one of the major battlegrounds of the campaign for the presidential election next April and May.
Sarkozy's approval ratings have improved since Socialist front-runner and former IMF head Dominique Strauss-Kahn was forced out the race after his arrest in New York on sexual assault charges.
But both main contenders for the Socialist nomination, Francois Hollande and Martine Aubry, are still ahead of the president in the polls at the moment.
IRRATIONAL AND RATIONAL
French authorities are still not entirely sure what hit them this week. There were both rational and irrational reasons for the market attack.
When Standard & Poor's knocked the United States off its triple-A perch last Friday, markets started looking for who else might be in line, turning a spotlight on France, with the biggest debt and deficit ratios among the six AAA-rated euro zone countries.
Economist Jacques Attali, a former top aide to President Francois Mitterrand, noted that S&P had specifically compared France with the United States, saying it was the only other AAA country that would have a similar debt ratio in 2015.
"Contrary to what everyone says, we are explicitly singled out," Attali told the daily Le Monde in an interview.
"Hence we must a bring our debt down below 85 percent of GDP by the end of 2013, and get back to 70 percent in this decade. That won't be easy."
The cost of insuring French public debt against default reached a new peak during the week yet by Friday, France's 10-year bond yield had fallen back below 3 percent for the first time since November 2010, hardly a sign of imminent meltdown.
The country does have an Achilles' heel: stress tests have shown that its banks are among the most heavily exposed to debt in the euro zone periphery, particularly Greece and Italy.
The sight of the European Central Bank buying Italian bonds on the secondary market to prevent Rome's borrowing costs rising to unsustainable levels, and reports that Greece's debt swap would be extended to bonds maturing up to 2024, combined with wild market rumours to hit French lenders.
Shares in Societe Generale plunged as much as 23 percent on Wednesday before closing 15 percent lower. BNP Paribas and Credit Agricole suffered lesser hits.
A senior SocGen executive told Reuters the bank was worried that heightened market tensions culd lead to a 2008-type credit crunch in which banks stop lending to one another.
French regulators, joined by their Italian, Spanish and Belgian counterparts, banned short-selling of financial shares on Thursday in a temporary response to try to halt rumour-driven herd behaviour. Bank shares rose modestly on Friday.
A senior risk manager at a large European bank, speaking on condition of anonymity, said one reason for the losses on French and European bank shares was that short sellers were targeting banks instead of government bonds.
"Because it's increasingly difficult to trade CDS on sovereign debt, short sellers take bank shares as proxy for sovereign bonds of the respective countries. If you bet on losses of French sovereign bonds for instance, short selling of French banks is very promising," he told Reuters.
Under cover of anonymity, several traders and government officials suggest hedge funds had shorted French debt in anticipation of a downgrade and turned on the banks when it became clear this was not going to happen.
A French fund manager said he clearly witnessed a "France bashing session" on Wednesday.
He said a U.S. bank had sent a market-wide message citing six reasons to sell shares of a French investment firm. The reasons invoked were "because it is French", six times.
Saturday, May 7, 2011
Greece denies may quit euro, European ministers meet
Sat May 7, 2011 5:58am IST
By Michele Sinner and Dina Kyriakidou
LUXEMBOURG/ATHENS (Reuters) - Top finance officials of the euro zone's biggest economies met to discuss Greece's debt crisis on Friday and Athens denied a media report that it was considering whether to leave the bloc.
Jean-Claude Juncker, head of the group of euro zone finance ministers, said the meeting in Luxembourg was attended by ministers from Germany, France, Italy and Spain. He said there was a broad discussion of Greece and other international economic issues.
Juncker denied a report in Germany's Spiegel Online magazine that the talks were held to discuss the possibility, raised by Athens, of Greece withdrawing from the 17-member euro zone, as well as the idea of restructuring Greece's 327 billion euro ($470 billion) sovereign debt.
"We have not been discussing the exit of Greece from the euro area. This is a stupid idea. It is in no way -- it is an avenue we would never take," he told reporters.
"We don't want to have the euro area exploding without reason. We were excluding the restructuring option, which is discussed heavily in certain quarters of the financial markets..."
But Juncker said a meeting of all euro zone finance ministers on May 16 would discuss whether Greece needed a further economic plan, beyond the 110 billion euro bailout which it obtained from the European Union and the International Monetary Fund in May last year. He did not elaborate.
Greek Finance Minister George Papaconstantinou attended the Luxembourg talks, his finance ministry said. It added that Greece remained committed to repairing its finances and returning to economic growth.
"The minister was invited to exchange views (on issues including) economic developments in Greece," the ministry said. "It is clear that during this meeting it was never discussed or posed as an issue whether Greece would remain in the euro zone."
The Luxembourg talks were also attended by European Central Bank President Jean-Claude Trichet and Olli Rehn, the European commissioner for economic and monetary affairs, Juncker said.
EURO FALL
Earlier in the day, the euro fell nearly 1 percent against the dollar and the cost of insuring Greek debt against default was quoted at a record high in response to the Spiegel report.
"The government has raised the possibility of leaving the euro zone and reintroducing its own currency," Spiegel said without citing its sources.
Despite its international bailout Greece, which joined the euro zone in 2001, has been unable to cut its budget deficit as fast as planned amid a deep recession. It has been raising taxes and slashing spending but is still plagued by tax evasion, corruption and the economy's lack of competitiveness.
Financial markets have been speculating for months that Athens will eventually have to restructure its debt and with the political will for more austerity starting to flag, some Greek politicians have been suggesting a "soft" restructuring which might involve lengthening maturities on the country's bonds.
An exit from the euro zone could help the economy in the long term; Greece would be able to cut interest rates and having its own, weak currency would boost exports and tourism.
But there is no legal procedure for leaving the zone, and the risks and immediate costs of the process -- Greece could face bank runs, and banks around the region could be damaged -- mean the government is likely to fight hard to avoid that option.
Although taxpayers in rich euro zone states such as Germany are becoming increasingly reluctant to fund weak euro zone states, their governments prize the currency union as one of Europe's great political achievements. The EU is currently negotiating a bailout with Portugal, the third state it is rescuing after Greece and Ireland.
A German government official told Reuters on Friday that a Greek exit from the euro zone "is not planned and was not planned", while a spokesman for the Austrian finance ministry said a breakup of the bloc would be "absolutely unthinkable".
Spiegel quoted from what it said was an internal German finance ministry paper that German Finance Minister Wolfgang Schaeuble was taking with him to Luxembourg, which warned that a Greek exit "would lead to a significant depreciation of the domestic currency versus the euro" and increase Greece's debt levels to 200 percent of gross domestic product. Its debt is officially projected to climb to 153 percent of GDP this year.
(Additional reporting by Jan Strupczewski and Luke Baker in Brussels, Andreas Rinke, Matthias Sobolewski and Noah Barkin in Berlin, Lefteris Papadimas in Athens and euro zone bureaux; Writing by Andrew Torchia; editing by Tim Pearce, sourced Reuters)
By Michele Sinner and Dina Kyriakidou
LUXEMBOURG/ATHENS (Reuters) - Top finance officials of the euro zone's biggest economies met to discuss Greece's debt crisis on Friday and Athens denied a media report that it was considering whether to leave the bloc.
Jean-Claude Juncker, head of the group of euro zone finance ministers, said the meeting in Luxembourg was attended by ministers from Germany, France, Italy and Spain. He said there was a broad discussion of Greece and other international economic issues.
Juncker denied a report in Germany's Spiegel Online magazine that the talks were held to discuss the possibility, raised by Athens, of Greece withdrawing from the 17-member euro zone, as well as the idea of restructuring Greece's 327 billion euro ($470 billion) sovereign debt.
"We have not been discussing the exit of Greece from the euro area. This is a stupid idea. It is in no way -- it is an avenue we would never take," he told reporters.
"We don't want to have the euro area exploding without reason. We were excluding the restructuring option, which is discussed heavily in certain quarters of the financial markets..."
But Juncker said a meeting of all euro zone finance ministers on May 16 would discuss whether Greece needed a further economic plan, beyond the 110 billion euro bailout which it obtained from the European Union and the International Monetary Fund in May last year. He did not elaborate.
Greek Finance Minister George Papaconstantinou attended the Luxembourg talks, his finance ministry said. It added that Greece remained committed to repairing its finances and returning to economic growth.
"The minister was invited to exchange views (on issues including) economic developments in Greece," the ministry said. "It is clear that during this meeting it was never discussed or posed as an issue whether Greece would remain in the euro zone."
The Luxembourg talks were also attended by European Central Bank President Jean-Claude Trichet and Olli Rehn, the European commissioner for economic and monetary affairs, Juncker said.
EURO FALL
Earlier in the day, the euro fell nearly 1 percent against the dollar and the cost of insuring Greek debt against default was quoted at a record high in response to the Spiegel report.
"The government has raised the possibility of leaving the euro zone and reintroducing its own currency," Spiegel said without citing its sources.
Despite its international bailout Greece, which joined the euro zone in 2001, has been unable to cut its budget deficit as fast as planned amid a deep recession. It has been raising taxes and slashing spending but is still plagued by tax evasion, corruption and the economy's lack of competitiveness.
Financial markets have been speculating for months that Athens will eventually have to restructure its debt and with the political will for more austerity starting to flag, some Greek politicians have been suggesting a "soft" restructuring which might involve lengthening maturities on the country's bonds.
An exit from the euro zone could help the economy in the long term; Greece would be able to cut interest rates and having its own, weak currency would boost exports and tourism.
But there is no legal procedure for leaving the zone, and the risks and immediate costs of the process -- Greece could face bank runs, and banks around the region could be damaged -- mean the government is likely to fight hard to avoid that option.
Although taxpayers in rich euro zone states such as Germany are becoming increasingly reluctant to fund weak euro zone states, their governments prize the currency union as one of Europe's great political achievements. The EU is currently negotiating a bailout with Portugal, the third state it is rescuing after Greece and Ireland.
A German government official told Reuters on Friday that a Greek exit from the euro zone "is not planned and was not planned", while a spokesman for the Austrian finance ministry said a breakup of the bloc would be "absolutely unthinkable".
Spiegel quoted from what it said was an internal German finance ministry paper that German Finance Minister Wolfgang Schaeuble was taking with him to Luxembourg, which warned that a Greek exit "would lead to a significant depreciation of the domestic currency versus the euro" and increase Greece's debt levels to 200 percent of gross domestic product. Its debt is officially projected to climb to 153 percent of GDP this year.
(Additional reporting by Jan Strupczewski and Luke Baker in Brussels, Andreas Rinke, Matthias Sobolewski and Noah Barkin in Berlin, Lefteris Papadimas in Athens and euro zone bureaux; Writing by Andrew Torchia; editing by Tim Pearce, sourced Reuters)
Monday, March 28, 2011
Euro coal June DES ARA trades at USD 128 per tonne
Monday, 28 Mar 2011
Traders and utilities said that prompt European physical coal prices held steady again on Friday, held up more by strong swaps values than physical demand.
Utility sources said that demand for coal in Europe has shrivelled now that German utilities have bought what they need for the near-term and stockpiles in France, Britain and Scandinavia are fairly high.
A European utility source said that "We're still getting offers of almost every type of coal but there's nowhere to put it even if the discount to API2 drops further and we were tempted to buy.”
Prices of close to USD 130.00 a tonne DES ARA do not reflect the abundance of coal supply in Europe but have been hoisted to that level by strong coal swaps prices.
Traders said that swaps have been reacting more to oil volatility and Middle East unrest plus an improvement in the dark spread the profit to be made from generating using coal as fuel, rather than fundamental factors.
One trader said that "Europe is horrible at the moment. Nobody's buying anything, not even the Scandinavians.”
Low water levels on the Rhine and Danube rivers mean barges carrying coal cannot sail fully loaded. This is also dissuading German buyers from taking more prompt coal at present.
In Asia the market seems to be rebalancing quickly after the initial panic about distressed cargoes as a result of the Japanese earthquake and tsunami. (sourced Thomson Reuters)
Traders and utilities said that prompt European physical coal prices held steady again on Friday, held up more by strong swaps values than physical demand.
Utility sources said that demand for coal in Europe has shrivelled now that German utilities have bought what they need for the near-term and stockpiles in France, Britain and Scandinavia are fairly high.
A European utility source said that "We're still getting offers of almost every type of coal but there's nowhere to put it even if the discount to API2 drops further and we were tempted to buy.”
Prices of close to USD 130.00 a tonne DES ARA do not reflect the abundance of coal supply in Europe but have been hoisted to that level by strong coal swaps prices.
Traders said that swaps have been reacting more to oil volatility and Middle East unrest plus an improvement in the dark spread the profit to be made from generating using coal as fuel, rather than fundamental factors.
One trader said that "Europe is horrible at the moment. Nobody's buying anything, not even the Scandinavians.”
Low water levels on the Rhine and Danube rivers mean barges carrying coal cannot sail fully loaded. This is also dissuading German buyers from taking more prompt coal at present.
In Asia the market seems to be rebalancing quickly after the initial panic about distressed cargoes as a result of the Japanese earthquake and tsunami. (sourced Thomson Reuters)
Friday, March 18, 2011
Thousands of foreigners flee from Tokyo
Fri Mar18 2011 14:25:25
BEIJING, March 18 (Xinhuanet) -- Airlines in Tokyo are scrambling to fly thousands of passengers out of the Japanese capital as fears about the country's nuclear crisis mount and several countries urge their citizens to leave.
Thousands of foreigners flock to Tokyo's Narita international airport as fears over Japan's nuclear crisis are mounting.
An increasing number of governments are urging their citizens to leave the earthquake and tsunami-devastated country.
Japan is taking desperate measures to contain the nuclear leak at the Fukushima power plant, but many travelers are worried about radiation levels.
Barbara Turoff, retired American, said, "I was going to go back anyway, just for a vacation, but I'm leaving earlier because I'm concerned because I really don't know the situation about the radiation. It keeps changing."
Other evacuees say the threat of radiation is scarier than the earthquake itself.
Thibault Brex, French evacuee, said, "If there was a radioactive cloud we just wouldn't know if it would come into our town. And with that you don't feel or hear anything, so you can't do anything and that's something we absolutely can't control no matter what people say. I was more worried about the radiation than about the earthquake. "
Scores of flights to Japan were halted or rerouted this week on fears of radiation leaks from the stricken nuclear plant -- and private jet companies say they've been inundated with requests to help evacuate people.
Some countries have begun testing their citizens returning from Japan for signs of radiation exposure. (source: CNTV.cn)
Thousands of foreigners flock to Tokyo's Narita international airport as fears over Japan's nuclear crisis are mounting.
An increasing number of governments are urging their citizens to leave the earthquake and tsunami-devastated country.
Japan is taking desperate measures to contain the nuclear leak at the Fukushima power plant, but many travelers are worried about radiation levels.
Barbara Turoff, retired American, said, "I was going to go back anyway, just for a vacation, but I'm leaving earlier because I'm concerned because I really don't know the situation about the radiation. It keeps changing."
Other evacuees say the threat of radiation is scarier than the earthquake itself.
Thibault Brex, French evacuee, said, "If there was a radioactive cloud we just wouldn't know if it would come into our town. And with that you don't feel or hear anything, so you can't do anything and that's something we absolutely can't control no matter what people say. I was more worried about the radiation than about the earthquake. "
Scores of flights to Japan were halted or rerouted this week on fears of radiation leaks from the stricken nuclear plant -- and private jet companies say they've been inundated with requests to help evacuate people.
Some countries have begun testing their citizens returning from Japan for signs of radiation exposure. (source: CNTV.cn)
Wednesday, March 9, 2011
Greek PM seeks consensus on economy in meetings with opposition party leaders
Wed, Mar08, 2011 23:55:28
ATHENS, March 8 (Xinhua)-- Prime Minister George Papandreou said Tuesday he will seek national consensus on dealing with the Greek debt crisis in a series of meetings with opposition parties and through a "comprehensive package solution" in the European Union.
"We need responsibility from all political forces. We are determined to support in Brussels that the only solution on the current crisis in Greece and Europe is a comprehensive package solution. Otherwise, there is no solution. On this basis I will fight," Papandreou said during talks with main opposition New Democracy (ND) Party leader Antonis Samaras.
Stressing that his government respects different views, the prime minister asked that parties on the right and left support his stance ahead of a crucial extraordinary summit of eurozone-member states Friday in Brussels and the March 24-25 EU summit.
Samaras on his part, noted that the ND always stood for national consensus in difficult times. He repeated his party's stance that Greece should change policies and re-negotiate terms of the memorandum signed last May with the EU and International Monetary Fund in order to secure a multi-billion euro rescue package to avoid default.
Local analysts expect similar responses in separate meetings later Tuesday from the leaders of other parties represented in parliament, such as the Greek Communist Party (KKE) and the Popular Orthodox Rally (LAOS).
Papandreou was also scheduled to hold talks with non-parliamentary Democratic Alliance and Democratic Left parties' leaders later Tuesday, before flying to Paris to meet French President Nicolas Sarkozy on Wednesday ahead of the EU summits.
Experts in Athens said that during talks with Sarkozy, Papandreou likely would try to secure support to convince German Chancellor Angela Merkel to accept an extension of the repayment period of the EU-IMF aid by Greece and lower interest rates.
During a cabinet meeting Monday, Papandreou stated his intention to seek a "comprehensive package solution" for the crisis in Brussels, leaving open the prospect of using veto power to block any other solution, clashing with Germany. Editor: yan
Petrol prices hit record in France
Mar07, 2011 06:47 pm
Petrol prices rose to a record high in France last week, with a litre of 95-octane petrol costing on average 1.5067 euros, according to information published Monday by a government agency.
he price, equivalent to $7.97 per US gallon, beat the previous record set in June 2008 of 1.4971 euros.
A litre of 98-octane petrol rose to an average of 1.5417, also beating the record of June 2008 of 1.5326 euros ($8.15 per US gallon).
The price of diesel, which accounts for 78 percent of sales in France, rose to an average of 1.3513 euros per litre ($7.15 per US gallon), some 10 cents below its record price.
Petrol prices at the pump have risen as the price of crude oil has jumped on markets due to tension and unrest in north Africa and the Middle East.
On Monday, New York's main contract, light sweet crude for delivery in April, hit $106.95 a barrel -- the highest level since September 2008.
In London, Brent North Sea crude for April rose 88 cents to $116.85.
The prices are still far below the record $147 per barrel set in 2008.
EU summit to take only minor steps on debt crisis
Mar8, 2011, 10:13 PM
By Luke Baker
BRUSSELS (Reuters) - Euro zone leaders will take the next cautious steps in their year-long effort to quell the region's debt crisis at a summit on Friday, but the meeting is unlikely to produce a breakthrough.
The top item on the agenda for the 17 heads of state and government is to agree a "competitiveness pact", a deal Germany and France are pushing the rest of the euro zone to adopt to show their commitment to overhauling their economies.
The pact has been watered down since it was put forward by German Chancellor Angela Merkel and France's Nicolas Sarkozy last month, and now looks likely to win approval from the rest of the euro zone leaders, many of whom were alarmed by the initial proposals.
The more stringent elements, such as a commitment to abandon inflation-linked wage increases, are likely to be dropped, but there should be agreement on measures to limit public deficits, gradually increase retirement ages to reflect demographics, and work towards a common corporate tax base.
Any agreement is likely be hailed by EU leaders -- particularly Germany and France -- as a major step forward in the battle to stem the debt crisis, which has already led to bailouts for Greece and Ireland and still threatens Portugal.
But analysts regard competitiveness as a sideline issue that barely nudges the euro zone closer to tackling the fundamental problems underpinning the crisis -- bad banking debts and heavily-indebted sovereign nations with poor growth prospects.
"The competitiveness pact as it stands is largely meaningless, it's beside the point right now," said Simon Tilford, chief economist of the Centre for European Reform, a London-based think tank.
"The immediate issue is debt restructuring and bank recapitalisation and they're not dealing with that."
Friday's summit is only likely to lay the ground for a meeting of all 27 EU leaders in Brussels on March 24-25, when they hope to agree on a "comprehensive package" of measures they hope will draw a line under the crisis.
PORTUGAL BACK UNDER PRESSURE
Measures under discussion as part of the comprehensive package include reforms to the European Financial Stability Facility (EFSF), the 440 billion euro fund set up last May and used to bail out Ireland, and the creation of the European Stability Mechanism, a permanent fund that will replace the EFSF from mid-2013, and more banking stress tests.
Among issues to be resolved is whether the effective capacity of the EFSF will be increased to its full 440 billion euros. Because of guarantees needed for the fund to retain its triple-A credit rating, its effective capacity is currently 250 billion euros.
If Germany gets the rest of the euro zone to sign up to the competitiveness pact on Friday, there is an expectation that that will make Berlin more disposed to agree to a strengthening of the EFSF, which almost all other euro zone members want.
But Merkel's political allies at home are adamantly opposed to bolstering the EFSF, which would require more taxpayer-backed guarantees, and neither do they want the fund to be used to buy distressed euro zone debt, as many other countries favour.
Merkel's coalition lost an important regional election in Hamburg last week and is expected to lose another in Baden-Wuerttemberg on March 27, piling pressure on the chancellor to stick closely to what voters want, which is no more German taxpayer funds being used for EU bailouts.
A month ago, an enlargement of the effective lending capacity of the EFSF looked likely, as did the possibility of the fund being used to buy distressed euro zone bonds on the secondary market, or to lend money to countries such as Greece and Ireland to buy back bonds. All now look questionable.
"The wiggle room, the political room for manoeuvre on the part of the Germans, is worryingly limited," said Tilford.
"They are going to have to deliver something (on March 24-25) because the market reaction otherwise could be pretty adverse, but I fear that very little is going to be delivered."
European leaders, particularly Herman Van Rompuy, the president of the European Council, have cast the end-March summit as a defining moment, when the euro zone finally gets on top of a crisis that has wrought turmoil for more than a year.
But because of German domestic politics, persistent disagreement among member states over the best course of action, and external factors such as the likelihood that the European Central Bank will raise euro zone interest rates next month, the crisis may be about to enter another, more uncertain phase.
For months Portugal has said that it does not need EU/IMF assistance and can continue to fund itself in the market. But if there is no breakthrough on March 24-25, the likelihood of Portugal needing a bailout will increase. Already the majority of EU states believe this will happen in April.
That points to a renewed round of pressure on the debt of peripheral or highly-indebted euro zone states, with not only Portugal, but Spain, Belgium and Italy in the picture.
"Portugal will be forced into a bailout and will subsequently, like Ireland and Greece, be forced to restructure its debt," said Tilford. "Portugal looks very vulnerable."
The top item on the agenda for the 17 heads of state and government is to agree a "competitiveness pact", a deal Germany and France are pushing the rest of the euro zone to adopt to show their commitment to overhauling their economies.
The pact has been watered down since it was put forward by German Chancellor Angela Merkel and France's Nicolas Sarkozy last month, and now looks likely to win approval from the rest of the euro zone leaders, many of whom were alarmed by the initial proposals.
The more stringent elements, such as a commitment to abandon inflation-linked wage increases, are likely to be dropped, but there should be agreement on measures to limit public deficits, gradually increase retirement ages to reflect demographics, and work towards a common corporate tax base.
Any agreement is likely be hailed by EU leaders -- particularly Germany and France -- as a major step forward in the battle to stem the debt crisis, which has already led to bailouts for Greece and Ireland and still threatens Portugal.
But analysts regard competitiveness as a sideline issue that barely nudges the euro zone closer to tackling the fundamental problems underpinning the crisis -- bad banking debts and heavily-indebted sovereign nations with poor growth prospects.
"The competitiveness pact as it stands is largely meaningless, it's beside the point right now," said Simon Tilford, chief economist of the Centre for European Reform, a London-based think tank.
"The immediate issue is debt restructuring and bank recapitalisation and they're not dealing with that."
Friday's summit is only likely to lay the ground for a meeting of all 27 EU leaders in Brussels on March 24-25, when they hope to agree on a "comprehensive package" of measures they hope will draw a line under the crisis.
PORTUGAL BACK UNDER PRESSURE
Measures under discussion as part of the comprehensive package include reforms to the European Financial Stability Facility (EFSF), the 440 billion euro fund set up last May and used to bail out Ireland, and the creation of the European Stability Mechanism, a permanent fund that will replace the EFSF from mid-2013, and more banking stress tests.
Among issues to be resolved is whether the effective capacity of the EFSF will be increased to its full 440 billion euros. Because of guarantees needed for the fund to retain its triple-A credit rating, its effective capacity is currently 250 billion euros.
If Germany gets the rest of the euro zone to sign up to the competitiveness pact on Friday, there is an expectation that that will make Berlin more disposed to agree to a strengthening of the EFSF, which almost all other euro zone members want.
But Merkel's political allies at home are adamantly opposed to bolstering the EFSF, which would require more taxpayer-backed guarantees, and neither do they want the fund to be used to buy distressed euro zone debt, as many other countries favour.
Merkel's coalition lost an important regional election in Hamburg last week and is expected to lose another in Baden-Wuerttemberg on March 27, piling pressure on the chancellor to stick closely to what voters want, which is no more German taxpayer funds being used for EU bailouts.
A month ago, an enlargement of the effective lending capacity of the EFSF looked likely, as did the possibility of the fund being used to buy distressed euro zone bonds on the secondary market, or to lend money to countries such as Greece and Ireland to buy back bonds. All now look questionable.
"The wiggle room, the political room for manoeuvre on the part of the Germans, is worryingly limited," said Tilford.
"They are going to have to deliver something (on March 24-25) because the market reaction otherwise could be pretty adverse, but I fear that very little is going to be delivered."
European leaders, particularly Herman Van Rompuy, the president of the European Council, have cast the end-March summit as a defining moment, when the euro zone finally gets on top of a crisis that has wrought turmoil for more than a year.
But because of German domestic politics, persistent disagreement among member states over the best course of action, and external factors such as the likelihood that the European Central Bank will raise euro zone interest rates next month, the crisis may be about to enter another, more uncertain phase.
For months Portugal has said that it does not need EU/IMF assistance and can continue to fund itself in the market. But if there is no breakthrough on March 24-25, the likelihood of Portugal needing a bailout will increase. Already the majority of EU states believe this will happen in April.
That points to a renewed round of pressure on the debt of peripheral or highly-indebted euro zone states, with not only Portugal, but Spain, Belgium and Italy in the picture.
"Portugal will be forced into a bailout and will subsequently, like Ireland and Greece, be forced to restructure its debt," said Tilford. "Portugal looks very vulnerable."
(Editing by Stephen Nisbet,sourced:Reuters)
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