reuters: Britain suffered further blows to its economic standing on Monday as two top ratings agencies downgraded its sovereign credit score, judging last week’s vote to leave the European Union would hurt its economy.
Standard & Poor’s stripped Britain of its last remaining top-notch credit rating, dropping it by two grades from “AAA” to “AA” and warning more downgrades could follow.
Fitch Ratings also downgraded its ranking for Britain’s creditworthiness by one notch, and similarly said more cuts could follow.
The ratings agencies effectively added a rubber stamp to the market’s view of the Brexit vote, as sterling tanked to a 31-year low against the U.S. dollar on Monday and stock markets fell for a second trading day since the referendum last Thursday.
It was the first time S&P had chopped an AAA-rated sovereign credit rating by two notches in one move.
“In our opinion, this (referendum) outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK,” S&P said in a statement.
Finance minister George Osborne said on Monday the British economy was strong enough to cope with the volatility caused by Thursday’s referendum.
But the vote has plunged the country into a political crisis, with the ruling Conservative Party looking for a new leader after Prime Minister David Cameron said he would stay on until October, delaying the launch of negotiations with the EU and leaving the country’s economic prospects under a cloud of uncertainty.
The added prospect of a new independence referendum in Scotland, which voted strongly to stay in the EU, threatens the constitutional and economic integrity of the United Kingdom, S&P warned.
Fitch more than halved its growth forecast for Britain’s economy in 2017 and 2018 to just 0.9 percent for both years, from 2.0 percent previously.
Long-dated U.S. Treasury yields fell to session lows after S&P’s decision. British 10-year government borrowing costs had already fallen below 1.0 percent for the first time during European trading hours. [GBP/]
S&P warned financial firms, especially foreign ones, might look to other destinations for investment after Britain leaves the EU.
The remaining major ratings agency, Moody’s, which took away Britain’s AAA-rating in 2013 because of the country’s high levels of debt and slow growth, said on Friday it could cut the rating further.
Moody’s will downgrade the credit rating outlook for major British banks to “negative” on Tuesday because of the fallout from the vote to leave the EU, Sky News reported, citing sources.
Protecting Britain’s credit rating was a top priority of Conservative finance minister George Osborne when he came to power in 2010.
(Additional reporting by Jamie McGeever; editing by William Schomberg and Andrew Roche)
kontan: DALAM kurun waktu ini, Inggris diprediksi bakal mengalami efek domino di bidang ekonomi skala besar akibat pilihan keluar dari Uni Eropa, yang selama ini memungkinkan pergerakan bebas barang dan manusia.
Hal itu disampaikan oleh dosen senior SOAS, Universitas London, Dr Ben Murtagh, yang fasih berbahasa Indonesia dari Departemen Asia Tenggara.
“Karena pasti ada banyak pusat perusahaan, pusat bank, dan lain sebagainya yang berada di Inggris karena Inggris berada di dalam Uni Eropa. Kalau Inggristidak lagi di dalam Uni Eropa, mungkin kantor pusat perusahaan, bank dan lain sebagainya akan pindah ke negara-negara lain dan pasti itu masalah besar,” jelas Murtagh dalam wawancara dengan wartawan BBC Indonesia, Rohmatin Bonasir, Senin (27/6).
Menteri urusan bisnis Inggris, Sajid Javid, telah mengeluarkan seruan agar dunia usaha tidak panik menyusul hasil referendum yang menunjukkan mayoritas rakyat Inggris memilih keluar dari Uni Eropa atau sering disebut ‘Brexit’.
“Fundamental ekonomi kita tetap kuat. Fundamental-fundamental itu cukup kuat untuk menghadapi volatilitas pasar jangka pendek,” tegasnya.
Namun menurut Dr Murtagh -sebagaimana diungkapkan oleh sejumlah kalangan lain- persoalan ekonomi yang menghadang Inggris jauh lebih besar dibandingkan dengan kehadiran imigran di negara ini. Dan masalah ekonomi ini punya efek domino.
“Saya kerja di universitas dan banyak sekali rekan saya di sini warga negara Eropa dan mereka tak tahu apa masa depan mereka. Takut sekali,” tambah Murtagh.
Ketakutan itu, lanjutnya, tidak hanya dirasakan oleh kalangan akademisi dari negara-negara Uni Eropa tetapi juga mereka dari luar Eropa, antara lain karena adanya ketidakpastian masa depan proyek-proyek akademis yang sedang berlangsung.
Hal senada juga disampaikan oleh peneliti pada Lembaga Perubahan Sosial, Universitas Manchester, Dr Gindo Tampubulon.
“Jangka pendeknya memang jelek. Kita sudah melihat bahwa ada kontrak-kontrak dari Eropa yang kemudian diputuskan, lantas karyawannya direlokasi. Dan buat saya sendiri yang punya beberapa proyek bersama Eropa, kita ketar-ketir apakah proyek ini pada tahun kedua atau tahun ketiga akan tetap dijalankan seperti rencana.”
Stabilitas baru, menurutnya, bisa terwujud dalam tempo dua tahun mendatang jika para pemimpin baik kubu Keluar maupun Tetap di Uni Eropa memberikan jalan keluar jelas tentang apa yang bisa dipertahankan dan apa yang bisa diubah.
Arah menuju kemungkinan keterpurukan ekonomi itu dapat dilihat dari pergerakan pasar keuangan begitu hasil referendum diumumkan pada Jumat (24/06). Saham-saham berjatuhan dan mata uang Inggris pound sterling turut anjlok.
Dalam perdagangan Senin (27/06), mata uang pound sterling menyentuh titik terendah selama 31 terakhir terhadap dolar.
Kabar24.com, JAKARTA – Tak ada pilihan lain, Uni Eropa harus direkonstruksi total pascareferendum Inggris yang memenangkan kubu pendukung Brexit alias Britain Exit, keluar meninggalkan perhimpunan negara eropa.
Kurang lebih itulah pesan yang disampaikan milioner investor George Soros, Sabtu waktu setempat pascareferendum di Inggris, Jumat (24/6/2016).
Rekonstruksi menyeluruh, ujar Soros, merupakan satu-satunya cara untuk menyelamatkan Uni Eropa, walau demikian ia juga telah mengingatkan bahwa keputusan Inggris meninggalkan blok negara-negara di Benua Biru itu telah menciptakan disintegrasi di Uni Eropa dan hal itu tak dapat dibatalkan lagi.
Soros, yang sebelum refrendum mengingatkan kemungkinan goncangan keuangan jika Inggris meninggalkan UE, juga menyatakan bahwa efek keputusan itu juga akan berbalik merusak Inggris sendiri.
“Inggris tentu saja tidak akan lebih baik dari negara lain atas keputusannya meninggalkan UE, perekonomian dan masyarakat akan mengalami dampak signifikan dalam jangka pendek dan jangka menengahm” tulis Soros dalam komentarnya di website Project Syndicate.
Soros tercatat meraih untung besar pada tahun 1992 saat pound sterling mengalami crash hingga ke level terendah dan harus dikeluarkan dari mekanisme nilai tukar Eropa.
Ia, awal pekan ini, juga mengingatkan hal serupa akan terjadi. Berbicara sebelum referendum berlangsung, Soros memperkirakan kemenangan Brexit akan menekan mata uang Inggris hingga minimal 15%, bahkan mungkin lebih dari 20%, menjadi di bawah US$1,15. Prediksi itu termuat pada surat kabar Inggris, The Guardian,
Saat Brexit menang, pada Jumat (24/6) pound terkoreksi sekitar 10%, menjadi angka terendah dalam 31 tahun, meski tidak sampai berada di bawah $1.32. Tidak diketahui apakah kali ini Soros juga bermain dan mengeruk untung. Jubir Soros menolak memberi penjelasan apakah sang investor miliuner ini mempertaruhkan dananya untuk Brexit.
“Kini skenario kerusakan yang ditakutkan banyak pihak menjadi kenyataan, menciptakan disintegrasi pada Uni Eropa yang secara praktis tak bisa diperbaiki lagi,” tulis Soros.
“Pasar finansial dunia sepertinya akan bergejolak lama, seiring rumitnya proses politik dan ekonomi atas perpisahan Inggris dari Uni Eropa dibicarakan,”
Ia mengilustrasikan bahwa konsekuensi Brexit ini bisa dibandingkan dengan krisis keuangan pada 2007-2008.
Soros menyebutkan Uni Eropa telah gagal memuaskan kebutuhan dan aspirasi warganya. Meski begitu, ia menyebut perlunya dukungan untuk merekonstruksi UE.
“Setelah Brexit, kita semua yang percaya bahwa UE dibangun oleh nilai dan prinsip-prinsip harus bersama-sama menyelamatkannya, merekonstruksinya secara menyeluruh,” tulis Soros.
“Saya yakin sebagai konsekuensi dari Brexit pada pekan dan bulan-bulan mendatang akan semakin banyak orang yang bergabung dengan kita,” ujar Soros.
Kabar24.com, TIANJIN, China – Keputusan warga Inggris Raya untuk keluar dari Uni Eropa sejalan hasil referendum Jumat (24/6) bisa dinilai lebih dari sekadar Inggris meninggalkan persekutuan negara di Benua Biru itu.
Ekonom Nouriel Roubini menyebutkan, keputusan warga Inggris Raya meninggalkan Uni Eropa bisa diterjemahkan sebagai awal dari perpecahan di kalangan negara-negara yang tersimpul dalam blok negara kerajaan tersebut.
Meski begitu, masyarakat tidak perlu khawatir akan terjadinya resesi atau krisis keuangan atas kemenangan kubu Brexit itu, ujar Roubini, saat berbicara pada forum ekonomi dunia, World Economic Forum, di Tianjin, kawasan utara China, Minggu (26/6/2016).
Nouriel Roubini adalah ekonom Amerika Serikat. Ia mengajar di Stern School of Business, Universitas New York, dan menjabat ketua Roubini Global Economics. Roubini berasal dari keluarga Yahudi Persia, lahir di Turki, dan dibesarkan di Italia.
Dunia terkejut dengan referendum Inggris yang menghasilkan kemenangan Brexit alias British atau Britain exit, keluar dari keuanggotaan di Uni Eropa.
Selain menimbulkan goncangan di pasar modal Jumat (24/6/2016) serta melesatnya komoditas safe haven macam emas, Brexit juga berpotensi menjadi bola salju yang menggelinding membawa isu serupa di sejumlah negara anggota Uni Eropa.
Setidaknya, isu Brexit sempat menular ke Belanda dan Prancis. Sementara, di Inggris muncul dorongan agar dilakukan referendum kedua terkait kemenangan kubu Brexit tersebut.
BRUSSELS, KOMPAS.com – Para petinggi Uni Eropa mengingatkan, Inggris harus bergerak cepat untuk bernegosiasi meninggalkan blok tersebut. Keterlambatan memperpanjang ketidakpastian.
Ketua Komisi Eropa, Jean-Claude Juncker, menekankan “UE dengan 27 negara akan maju terus”.
Hasil referendum Eropa di Inggris telah final bahwa 51,9 persen pemilih menghendaki negara mereka keluar UE dan 48,1 persen mengharapkan Inggris tetap berada di dalam blok 28 negara itu.
Kemenangan kubu yang memilih “leave” itu diikuti pernyataan David Cameron bahwa ia akan mundur dari jabatan perdana menteri pada Oktober mendatang.
Cameron berharap penggantinya akan memimpin Inggris ke arah yang diinginkan oleh kubu Brexit – Inggris keluar dari UE. Cameron mengkampanyekan agar Inggris tetap, “remain”, di blok UE.
Juncker langsung menggelar pertemuan dengan Ketua Parlemen Eropa, Martin Schulz, Ketua Dewan Eropa Donald Tusk, dan Perdana Menteri Belanda, Mark Rutte, Jumat.
Setelah pertemuan para pejabat itu mengeluarkan pernyataan bahwa mereka ‘menyesalkan’ apa yang terjadi di Inggris, tetapi juga ‘sangat menghormati hasil pilihan rakyat Inggris’.
Mereka menyerukan Inggris “untuk memberitahu akibat dari keputusan ini kepada rakyat Inggris sesegera mungkin. Setiap keterlambatan yang tidak perlu akan memperpanjang ketidakpastian”.
“Kami siap untuk memulai negosiasi dengan cepat dengan Inggris mengenai syarat dan ketentuan pengunduran diri dari UE,” kata pernyataan bersama mereka.
Kanselir Jerman Angela Merkel menyatakan “penyesalan yang besar” atas keputusan Inggris. Ia mengatakan,” Ini merupakan tamparan bagi Eropa dan proses penyatuan Eropa”.
Presiden Prancis Francois Hollande mengatakan hasil referendum secara serius menguji Eropa.
“Saya menghormati pilihan yang menyakitkan ini, namun Perancis akan terus bekerja sama dengan negara yang ramah ini,” kata Hollande.
Parlemen Eropa telah menyerukan sesi khusus menggelar rapat darurat pada Selasa (28/6/2016) untuk menyikapi Brexit.
Merkel mengatakan dia akan bertemu Tusk, Hollande, dan Perdana Menteri Italia, Matteo Renzi di Berlin, Senin (27/6/2016).
London, June 24, 2016 (AFP)
The Bank of England “stands ready to provide” more than £250 billion of funds to aid the smooth functioning of markets after the Brexit vote, governor Mark Carney said Friday.
“As a backstop, and to support the functioning of markets, the Bank of England stands ready to provide more than £250 billion ($370 billion, 326 billion euros) of additional funds through its normal facilities,” Carney said in a televised statement.
“The Bank of England is also able to provide substantial liquidity in foreign currency, if required,” he added.
The British central bank had earlier said that it would take “all necessary steps” to ensure monetary and financial stability after Britain’s referendum decision to leave the European Union.
London, June 21, 2016 (AFP)
England football great David Beckham on Tuesday backed Britain to remain in the European Union, hailing the positive influence of European players on British football.
“For our children and their children, we should be facing the problems of the world together and not alone,” said the former Manchester United star.
“We live in a vibrant and connected world where together as a people we are strong. For these reasons I am voting to Remain,” he said in a statement on Facebook, two days before the crucial vote.
Beckham, 41, highlighted the European influence on his star-studded career, during which he won 19 major trophies and spent four years at Real Madrid.
“I grew up with a core group of young British players that included Ryan Giggs, Paul Scholes, Nicky Butt and the Neville Brothers,” he said in a statement.
“That team might have gone on to win trophies but we were a better and more successful team because of a Danish goalkeeper, Peter Schmeichel, the leadership of an Irishman Roy Keane and the skill of a Frenchman in Eric Cantona.”
Beckham also played in Milan and Paris during his 20-year career.
“Those great European cities and their passionate fans welcomed me and my family and gave us the opportunity to enjoy their unique and inspiring cultures and people,” said the former midfielder.
In a divisive and ill-tempered campaign, Beckham stressed that “each side has the right to their opinion and that should always be respected.
“Whatever the result of Thursday’s referendum, we will always be Great,” he added.
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London, June 20, 2016 (AFP)
Britain’s Prime Minister David Cameron led tearful tributes Monday to slain lawmaker Jo Cox, whose brutal murder has opened up fresh splits in the campaign for Britain to leave the EU in a referendum this week.
The killing last week sparked accusations of hate-mongering in an already heated battle for votes before a momentous ballot on Thursday that could determine the political and economic fate of Europe.
Financial markets rallied as prospects for the “Remain” side appeared to brighten in the latest surveys, putting it neck-and-neck with the “Leave” side. London’s FTSE stock market index surged more than three percent and sterling made strong gains.
Meanwhile divisions have surfaced among pro-Brexit campaigners after UK Independence Party leader Nigel Farage released a poster last Thursday showing immigrants trudging through Europe with a headline in red screaming “Breaking Point”.
On that same day, Cox, a 41-year-old mother of two and pro-EU, was on her way to meet members of the public in northern England when an attacker shot and stabbed her, leaving her bleeding on the pavement. She died of her wounds.
– Wiped away tears –
To cries of “hear, hear” in parliament, Cameron called on fellow politicians to remember the Labour Party lawmaker by “uniting against the hatred that killed her, today, and for ever more”.
Cox’s husband Brendan and her children, aged three and five, listened in parliament’s gallery as politicians, sporting white roses in memory of her home county of Yorkshire, paid tribute.
Some lawmakers clutched handkerchiefs and wiped away tears. A white rose and a red rose symbolising her party were left on the bench where she used to sit.
Donations topped £1 million ($1.46 million, 1.3 million euros) to a memorial fund to support causes she backed, such as The White Helmets search and rescue volunteers in Syria.
Minutes before the parliamentary session opened, Cox’s alleged killer, 52-year-old Thomas Mair, appeared in court in London via video link from prison after being charged at the weekend with her murder.
During a short hearing, he spoke only to confirm his name and was ordered to remain in custody. Asked to give his identity at a lower court on Saturday, he had replied: “Death to traitors, freedom for Britain.”
– Outrage over poster –
A close friend of Cox in parliament, Stephen Kinnock, said the lawmaker would have been “outraged” by Farage’s Brexit campaign poster.
“Jo understood that rhetoric has consequences. When insecurity, fear and anger are used to light a fuse, then the explosion is inevitable,” he warned.
The author of the Harry Potter series J.K Rowling called the campaign “one of the most divisive and bitter political campaigns ever waged” in Britain on her website.
Despite the criticism, Farage said the poster was an accurate depiction of the refugee crisis in the EU and accused his rivals of unashamedly using Cox’s death to boost their cause.
Farage has admitted the killing took the momentum out of the Brexit campaign.
“The ‘Remain’ camp are using these awful circumstances to try to say that the motives of one deranged, dangerous individual were similar of half the country or perhaps more who believe we should leave the EU,” he told the BBC.
– ‘Hate and xenophobia’ –
But a senior member of Cameron’s ruling Conservatives, former party chair Sayeeda Warsi, said she was withdrawing support for “Leave” because of the poster.
“Are we prepared to tell lies, to spread hate and xenophobia just to win a campaign?” she asked.
Farage dismissed her defection, describing it as a “Number 10 put-up job” — a reference to Cameron’s Downing Street office — and cast doubt on whether she had ever really been part of the Brexit camp.
The British referendum has opened the prospect of other nations demanding a vote, too, perhaps placing in peril the very survival of the European project, which was born out of a determination to forge lasting peace after two world wars.
“Whatever the UK vote is, we must take a long hard look on the future of the Union. Would be foolish to ignore such a warning signal,” EU president Donald Tusk wrote on Twitter.
– ‘Stay with us’ –
In a television appearance in which he was grilled by audience members, opposition Labour leader Jeremy Corbyn, who is campaigning for “Remain”, said voters “may well” vote to leave.
“If we remain, I believe Europe has got to change quite dramatically to something much more democratic, much more accountable,” Corbyn said.
While the “Remain” camp has tried to focus on the potential economic damage that Brexit could inflict, the “Leave” campaign held out the promise of Britain taking better control of immigration if it leaves the EU.
The “Leave” and “Remain” sides have now battled each other to a stalemate, with each on exactly 50 percent support, according to an average of the last six polls calculated by research site What UK Thinks.
LONDON (MarketWatch) — The people campaigning for Great Britain to leave the European Union want you to think they’re appealing to the greatest instincts and aspirations: the appeal of history, the call of patriotism, the desire for the British people to look beyond Europe to the wider seas.
But if they win the referendum on June 23, that won’t be the reason.
The “Brexit” campaign here has degenerated into racism and xenophobia. And that’s the reason it has suddenly pulled ahead in the polls.
It is immigration, nothing else, that has turned this referendum campaign heavily toward the Brexit side.
Brexit has just aired a television commercial that brings back memories of the infamous Willie Horton commercial on U.S. TV during the 1988 presidential election. (Michael Dukakis, the Democratic candidate and governor of Massachusetts, was attacked by his rival, George H.W. Bush, over a black prisoner who raped a white woman while on a weekend furlough.)
In the Brexit commercial, a Nice White Woman becomes worried that her Nice White Elderly Mother is sick and takes her to the local hospital. And what then unfolds, on a split screen, are two alternative stories about what happens next — one with Britain outside the EU, and one inside.
In the future where Britain is outside the EU, the Nice White Woman and her Nice White Elderly Mother wait a short time with a few other white people before being seen promptly by a nice doctor who makes it all better.
Brexit backer: Don’t be swayed by Goldman Sachs
On the other side of the screen, however, is the future of Britain inside the EU. The woman and her mother wait for hours to be seen … in a waiting room packed to the gills. Noticeably, a high proportion of those waiting seem to be people of color. (And others like the dirty, unshaven East European hoodlums from the movie “Taken.”)
The directors of the commercial are no fools. They’ve cleverly given themselves an “out” against any charges of racism. In both storylines, the nice young nurse who meets the patients is Afro-Caribbean. But the subliminal image, of a waiting room — and by implication, a Britain — teeming with dodgy foreigners is hard to miss.
The commercial comes as the Brexit campaign is playing an aggressively similar card. Media here are suddenly being dominated by scare stories of a “secret plot” to “flood” the country with “1.5 million Turks” immediately if Britain should vote to stay in the EU.
It is immigration, nothing else, that has turned this referendum campaign heavily toward the Brexit side. The latest polls show Brexit pulling ahead, by anywhere from 1 to 7 percentage points. The growing word on the ground here — from people on both sides of the debate — is that unless something changes, the Brexit camp is likely to win.
That is likely to provoke a political crisis here and across the rest of the Union. It is hard to see how Prime Minister David Cameron or his number two, Chancellor of the Exchequer George Osborne, could survive. They are the ones who have mismanaged the “Remain” campaign so badly. But their political rivals within the ruling Conservative party, Brexit champions Boris Johnson and Michael Gove, are also tainted. The referendum has bitterly divided the party.
Everything will be up in the air, and if the markets hate one thing, it’s uncertainty. Meanwhile, the smart money is on Home Secretary Theresa May to emerge as the unity candidate. The bookmakers give her odds of 7/1 to be the next leader.
Washington, June 3, 2016 (AFP)
Moody’s became the third rating agency to remove Finland’s top-flight AAA credit rating Friday, saying it sees no improvement in the country’s debt challenge over the coming five years.
Moody’s cut the Nordic country’s rating by one notch to Aa1 following similar moves by rival rating agencies Fitch and S&P in 2014 and 2015.
The Finnish economy faces weak growth over the coming years that will reduce its resilience to potential shocks, Moody’s said.
Without economic improvement, the agency added, it foresees a deteriorating fiscal position “with no material reversal in the upward trend in the public sector debt burden likely in the next five years.”
Although Finland’s economy resumed growing slowly last year after three years of recession, Moody’s said it expects the country to expand only 1 percent per year over 2016-2017.
The country’s debt burden will continue rising from 60 percent of GDP last year to 67 percent by 2018, it said.
“The rise in Finland’s debt load has been material and the measures planned to reverse it are not without challenges, particularly in a low-growth environment,” Moody’s said.
BERLIN kontan. Kenaikan tingkat investasi mendongkrak perekonomian Jerman pada kuartal pertama. Bahkan pertumbuhannya digadang-gadang merupakan yang tercepat dalam dua tahun terakhir.
Berdasarkan data yang dirilis Federal Statistics Office di Wiesbaden, aktivitas pembangunan di Jerman melonjak 2,3% pada awal tahun ini. Kondisi itu menarik modal investasi dengan kenaikan 1,8%.
Di sisi lain, konsumsi swasta naik tipis sebesar 0,4%. Alhasil, tingkat Produk Domestik Bruto (PDB) Jerman naik 0,7% pada periode Januari hingga Maret. Pencapaian tersebut sejalan dengan estimasi pelaku pasar yang disurvei pada 13 Mei lalu.
Sementara itu, rendahnya angka pengangguran Jerman menggarisbawahi tingkat permintaan konsumen. Sedangkan perusahaan Jerman tengah mengecap manisnya siklus pemulihan ekonomi 19 negara euro, dampak dari stimulus yang digelontorkan Bank Sentral Eropa.
Bank sentral Jerman, Deutsche Bundesbank, optimistis bahwa perekonomian negara mereka mampu mempertahankan pertumbuhannya kendati ekspansi diprediksi melambat pada kuartal ini.
“Pertumbuhan dipengaruhi faktor eksternal, dengan konsumsi swasta dan investasi konstruksi memberikan kontribusi terbesar,” jelas Johannes Gareis, ekonom Natixis di Frankfurt.
Dia menambahkan, dengan melihat pertumbuhan ekonomi di kuartal II, ekonomi Jerman sepertinya sulit mengulangi pertumbuhan ekonomi kuartal satu.
Frankfurt, May 13, 2016 (AFP)
The German economy, Europe’s biggest, grew at its fastest rate in two years in the first three months of 2016, outpacing both the rest of the eurozone and the Group of Seven most industrialised countries, data showed on Friday.
Driven by booming domestic demand, German gross domestic product (GDP) expanded by 0.7 percent in seasonally and calendar-adjusted terms in the period from January to March, the federal statistics office Destatis said in a statement.
That was faster than the growth of 0.3 percent notched up in the preceding quarter and also faster than the 0.5 percent analysts had been predicting for the first quarter of this year.
“Positive impulses came primarily from domestic demand,” the statisticians said.
“Private households and the government increased their spending and investments were also higher,” the statement continued.
The mild weather boosted activity in the construction sector and investment in equipment also increased.
By contrast, foreign trade had a moderately dampening effect because exports did not grow as fast as imports, meaning the overall trade surplus — the balance between imports and exports — fell, Destatis said.
On a 12-month basis, GDP expanded by 1.3 percent in the January-March period compared with the same period a year earlier.
The data are still only preliminary. A more detailed breakdown of the different GDP components will be published on May 24.
– Outpacing its peers –
But economists hailed Germany’s robust economic performance.
“It was the strongest increase in the last two years. Looking at the so far available G7 data shows that Germany even outpaced its peers,” said UniCredit economist Andreas Rees.
The expert conceded that special circumstances, such as the mild winter weather may have given growth an additional boost.
But even without that, the recovery would have gathered pace, he argued.
“The German economy is in the midst of a regime change towards more domestic demand. Both private consumer expenditures and investment in machinery and equipment continued their recovery. We’re sticking to our growth forecast of 1.8 percent for 2016.
Ferdinand Fichtner of the Berlin-based think-tank DIW was more cautious.
“Germany is still only in a moderate upturn,” he said.
Dirk Schlotboeller, economist at the DIHK federation of chambers of commerce, said the German economy had gotten off to a “turbo-charged start” to the year. But the combination of a number of favourable factors — such as cheap oil prices, increased spending related to the refugee crisis and the mild weather — “is unlikely to be repeated again so quickly.”
BayernLB economist Stefan Kipar said the dampening effect of foreign trade was not particularly worrying because exports were not inherently weak.
“Nevertheless, we don’t expect the high rate of growth to continue in the second quarter,” he said.
ING DiBa economist Carsten Brzeski pointed out that the German economy has been recovering for seven consecutive quarters.
“Without the small stagnation in the second quarter of 2014, the economy could now look back at twelve consecutive quarters of economic growth. Very impressive!” he said, but warned that German policymakers should not be complacent.
Separately, the federal statistics office Destatis confirmed a preliminary flash estimate for inflation which showed a 0.1-percent drop in consumer prices in April, largely as a result of falling energy prices.
JAKARTA okezone- Bank Sentral Eropa atau The European Central Bank (ECB) tetap mempertahankan kebijakan ‘ultra-loose monetary‘. Ketatnya kebijakan ini tetap dilakukan meski mendapat kritikan dari Jerman.
Dewan bank sentral menetapkan tingkat suku bunga tetap berada di level 0 persen sementara untuk bunga deposito dipatok minus 0,4 persen. [Baca juga: BI Sebut Bank Sentral Eropa Pangkas Suku Bunga karena ‘Galau’]
Sebelumnya, Menteri Keuangan Jerman Wolfgang Schaeuble mengungkapkan kekhawatirannya mengenai kebijakan ‘ultra low rates’.
“Periode yang panjang dengan suku bunga nol dan negatif bukan situasi yang masuk akal, ” katanya.
Pada bulan Maret lalu, ECB memangkas proyeksi pertumbuhan ekonomi di zona euro, yang memiliki rata-rata 1,4 persen pada tahun 2016.
Bisnis.com, JAKARTA—Bank Indonesia menilai keputusan bank sentral Eropa menurunkan suku bungan acuan menjadi nol persen bakal menarik dana investasi ke negara-negara berkembang termasuk Indonesia.
European Central Bank (ECB) telah menurunkan suku bunga acuannya sebanyak lima basis poin menjadi 0%. Selain itu, fasilitas pinjaman marjinal juga diturunkan menjadi 0,25% dan suku bunga fasilitas depositi menurun menjadi minus 0,4% terhitung 16 Maret 2016.
Deputi Gubernur Senior Bank Indonesia Mirza Adityaswara mengatakan dampak dari aksi ECB itu bakal mempengaruhi aliran modal ke negara emerging market di Asia karena investor pasar modal kurang tertarik terhadap kebijakan suku bunga rendah termasuk di level minus yang dulu diterapkan
Sebelumnya, BI melaporkan dana asing yang masuk ke Indonesia hingga pekan keempat Februari 2016 telah mencapai Rp35 triliun ke surat berharga negara dan pasar modal.
“Dampaknya ke negara emerging market di asia kembali lagi pengaruhnya pada aliran modal, karena kalau Eropa dan Jepang punya suku bunga yang negatif kemudian melonggarkan stimulus moneter maka investasi bagi investor pasar modal menjadi kurang menarik,” jelasnya, di Jakarta, Jumat (11/3/2016).
Namun, dia melihat adanya dampak deflasi yang berkepanjangan di Eropa dan Jepang karena harga barang mengalami penurunan. Hal itu dapat membuat produsen tidak bergairah untuk berproduksi. Harapan suku bunga negatif sebelumnya diharapkan dapat membuat perbankan menyalurkan kredit.
“Tapi permasalahannya perbankannya mau menyalurkan kredit, tetapi permintaan kreditnya tidak terjadi,” imbuhnya.
Mirza menambahkan konsumen berekspetasi harga yang turun sehingga tidak melakukan konsumsi. Produsen juga tidak berproduksi sehingga tidak membutuhkan kredit.
Berlin, March 11, 2016 (AFP)
Consumer prices stagnated in Germany in February, official data showed Friday, with plunging energy prices dragging inflation down.
Germany’s national inflation yardstick, the consumer price index, stood at zero percent in February compared to 0.5 percent in January, the federal statistics office Destatis said, confirming a flash estimate issued earlier this month.
Pointing to a slide in energy prices which reached a 8.5-percent drop year on year for February, Destatis said inflation would have been in positive territory if not for the slump in the oil sector.
Because of its economic weight in Europe, Germany’s consumer price trends are closely watched, especially at a time when the European Central Bank is pouring billions of euros into battling chronically low inflation in the eurozone.
The latest data came a day after the ECB fired off a volley of shots to avert deflation — including slashing already record-low interest rates, announcing that massive new sums would be pumped into the banking system and, for the first time, saying it would begin buying corporate bonds.
London, March 10, 2016 (AFP)
Renowned cosmologist Stephen Hawking was among 150 academics to declare support for Britain remaining in the European Union on Thursday in a letter that said leaving the bloc would damage science and research.
“If the UK leaves the EU and there is a loss of freedom of movement of scientists between the UK and Europe, it will be a disaster for UK science and universities,” the academics wrote in a letter to The Times newspaper.
The over 150 signatories are Cambridge scientists, mathematicians, engineers and economists and all are also fellows of the Royal Society, Britain’s leading scientific institution.
Other signatories included Martin Rees, the astronomer royal and former president of the Royal Society, University of Cambridge physicist Athene Donald, and letter organiser Alan Fersht, a leading chemist.
Britain is due to vote on June 23 on whether to remain in the 28-member bloc. Opinion polls show that the campaign to remain within the EU is slightly ahead, but its lead over the “leave” campaign has narrowed in recent months.
In the letter, the scientists argued that science was vital for Britain’s long-term prosperity and that membership of the EU had increased funding of science and allowed the country to recruit talented researchers from continental Europe.
“Investment in science is as important for the long-term prosperity and security of the UK as investment in infrastructure projects, farming or manufacturing; and the free movement of scientists is as important for science as free trade is for market economics,” they wrote.
DENPASAR okezone – Kegiatan ekspor bunga kering dari perajin di Kota Denpasar, Bali untuk tujuan ke Jerman, belakangan ini terhenti karena terjadinya krisis ekonomi yang melanda negara-negara Eropa.
“Sebenarnya sudah lama kami mengekspor bunga kering ke Jerman, tapi sejak ada krisis ekonomi di Eropa beberapa waktu lalu, maka ekspor itu terhenti. Padahal Jerman itu pasar yang potensial sekali untuk pemasaran bunga kering,” kata Asri Kardha, perajin bunga kering di Denpasar, Minggu (28/2/2016).
Dia melanjutkan, kerajinan bunga kering itu sudah dirintis sejak tahun 1998 dengan menggunakan bahan baku dari alam. Antara lain memakai kulit jagung, daun lontar, buah lotus, buah palem, ‘keloping’ kelapa, buah kepu dan berbagai jenis buah lain yang sifatnya keras.
Bahan baku itu dicari dari berbagai daerah di Bali. Khususnya di Denpasar, Kintamani dan Bedugul. Belakangan pencarian bahan baku dilakukan dengan menggalang kerja sama dengan tukang kebun hotel, pemulung atau tukang sapu di jalanan.
“Soal bahan baku tidak pernah ada masalah, karena pasokan selalu ada. Justru faktor cuaca yang jadi masalah berhubung sekarang ini kan musim hujan. Jadi pengeringan bahan baku terkendala faktor alam,” ujar Asri.
Untuk mengeringkan bahan baku, ucap dia, memang membutuhkan waktu dua hingga empat hari, agar bahan baku benar-benar tidak ada kandungan air. Proses pengeringan pun harus sering dilakukan berkali-kali, apalagi jika bahan baku itu melalui proses pewarnaan.
“Tapi kalau konsumen dari Jerman, lebih suka rangkaian bunga kering dengan warna natural, alami seperti di alam. Tidak pakai pewarna tertentu,” ujar sekretaris Iwapi ini.
Sembari menunggu kemungkinan mengekspor kembali kerajinan bunga kering ke luar negeri, Asri pun mempergiat untuk promosi ke berbagai pameran baik di Bali maupun luar daerah.
“Even tahunan Pesta Kesenian Bali (PKB) tidak pernah dilewatkan dan respon masyarakat sangat bagus. Asal ada produk rangkaian bunga kering baru, selalu diburu. Harga terjangkau, kalau keloping kelapa yang bisa digunakan untuk tempat buah harganya Rp20 ribu,” katanya.
Untuk rangkaian bunga, lanjutnya, harganya mulai dari Rp75 ribu hingga pernah mencapai Rp2,7 juta. “Harga yang terakhir untuk rangkaian bunga setinggi tiga meter, yang dipesan untuk menghias lobi hotel atau perkantoran. Rangkaian bunga berukuran tinggi ramai kalau mau pergantian tahun atau hari raya keagamaan,” ucap dia.
Ketika pasar domestik mulai ramai, katanya, ada permasalahan dengan pengemasan produk. Saat rangkaian bunga itu mau dikirimkan ke konsumen di luar Bali, maka memerlukan pengemasan khusus agar tiba di tempat tujuan dalam keadaan tetap bagus. Pengemasan inilah yang nilainya cukup mahal, sehingga kadang melebihi harga produk kerajinan bunga kering.
“Saya masih mencari-cari produsen produk kemasan produk untuk diajak bekerja sama. Jika masalah kemasan sudah teratasi, maka pasar domestik bisa digenjot pemasarannya. Kalau kirim keluar negeri pakai kontainer jadi barang aman sampai tujuan,” ucap dia.
Washington, Feb 4, 2016 (AFP)
The International Monetary Fund does not wish to slap “draconian measures” on hard-up Greece but wants more government progress on pension reform, IMF chief Christine Lagarde said Thursday.
Lagarde spoke as Greece was hit by a general strike that brought tens of thousands of people into the streets in protest over pension reforms, a key part of Greece’s latest economic bailout by the European Union.
“I really don’t like it when we’re portrayed as this draconian, rigorous, terrible IMF,” Lagarde said in an online news conference.
“We don’t want draconian measures to apply to Greece, which has already made a lot of sacrifices.”
But she insisted that the Greek reform program has to keep on track, notably on pension reforms, a key issue in negotiations between the government and its creditors.
According to Lagarde, the current pension system, which costs the equivalent of 10 percent of the Greek economy annually, is not sustainable and should undergo a profound overhaul.
In Europe, the average pension ratio is 2.5 percent of gross domestic product, she noted.
The Europeans and the IMF have contested certain parts of the reform measures proposed by Athens, sparking the general strike Thursday.
Pension reforms were part of the conditions imposed by the IMF for it to participate in the EU bailout of Greece last July.
The crisis lender, which joined with the European Commission and the European Central Bank in the two prior bailouts of Greece, has not decided whether to join the latest one.
The IMF is calling for reforms by Athens and for the Europeans to ease the country’s debt burden.
“The pension system needs to be reformed, the tax-collection system needs to be improved so that revenues come in and evasion is stopped,” Lagarde said.
“And the debt relief by the other Europeans must accompany this process.”
FRANKFURT okezone – Bank Sentral Eropa (ECB) siap untuk memainkan perannya dalam membantu pemulihan ekonomi, Ketua ECB Mario Draghi memperingatkan risiko-risiko terhadap pertumbuhan.
“Prospek pertumbuhan secara perlahan membaik di negara-negara maju, tetapi prospek di negara-negara berkembang lebih lemah. Secara keseluruhan, pertumbuhan rendah berdasarkan standar-standar historis,” kata Draghi.
“ECB bersedia untuk mengontribusikan perannya guna memastikan bahwa pemulihan tetap secara kuat di jalurnya,” kata dia.
Tetapi, Draghi memperingatkan ada risiko-risiko empat kali lipat yang dapat merusak ekonomi. Menurutnya, kebijakan ekonomi negara-negara anggota zona euro dan ketidakpastian politik seputar proyek Eropa, yang tengah berupaya membujuk Inggris di Uni Eropa, diperkirakan akan memberikan sentimen tersendiri.
“Sebuah solusi yang akan mempertahankan Kerajaan Inggris secara kuat di dalam Uni Eropa, sementara kemungkinan kawasan euro untuk berintegrasi lebih lanjut akan meningkatkan kepercayaan,” katanya.
ECB telah meluncurkan berbagai langkah kebijakan yang berbeda untuk membantu ekonomi zona euro kembali pada jalurnya, terakhir program kontroversial pembelian obligasi yang dikenal sebagai pelonggaran kuantitatif atau QE.
Davos, Switzerland, Jan 21, 2016 (AFP)
French Prime Minister Manuel Valls warned Thursday that the European Union faced a host of dangers and could “fracture” in the months to come.
Valls told reporters he had come to the gathering of billionaires and political leaders in Davos to speak about “all the dangers which could lead to a fracturing of the European project, and not in a few years or decades, but in the next few months”.
He cited terrorism, the refugee crisis and a possible British exit from the bloc among the dangers.
Berlin, Jan 14, 2016 (AFP)
The German economy, Europe’s biggest, grew by 1.7 percent in 2015, fractionally faster than in the year before, the federal statistics office Destatis said on Thursday.
At the same time, Destatis said that Germany notched up a surplus on its public budget equivalent to 0.5 percent of gross domestic product (GDP).
The eurozone’s economy lost steam in the latest quarter as Portugal stalled, Germany slowed and debt-stricken Greece contracted.
Gross domestic product (GDP) across the 19 countries in the single currency bloc rose just 0.3% in the third quarter, according to Eurostat. That defied expectations for growth to hold at 0.4%, according to a Reuters poll of economists. On a year earlier, GDP was up 1.6%, lower than forecasts for 1.7%.
The July to September figures mark a slowdown from eurozone GDP growth of 0.4% in the second quarter and 0.5% in the first quarter and come as the European Central Bank (ECB) hints that it is planning to inject further funds into the eurozone economy to maintain recovery.
Germany, the eurozone’s biggest economy, grew 0.3% as expected, but that was a notch down from 0.4% growth in the previous quarter. France’s economy grew 0.3%, a rebound from no growth in the second quarter.
But Italy, the Netherlands, Portugal and Finland all undershot market expectations. Greece swung from growing 0.4% in the second quarter to shrinking 0.5%.
Italy, the bloc’s third-largest economy after Germany and France, grew 0.2%, behind a Reuters poll forecast for 0.3%. GDP in the Netherlands was up a mere 0.1% against expectations of 0.3%. Portugal did not grow at all and Finland’s economy shrank a larger-than-expected 0.6%.
The ECB president, Mario Draghi, has previously signalled he is prepared to cut interest rates and increase quantitative easing (QE) to stave off the risk of a renewed economic slump in the eurozone. Economists said the latest figures would add to impetus for him to act on recent comments.
“The euro area’s pace of economic growth lost a little momentum in the third quarter, despite the additional central bank stimulus seen so far this year and a weakened, competitive, currency,” said Chris Williamson, chief economist at Markit, which compiles surveys on eurozone economies.
“The subdued pace of growth and persistent weak inflation applies further pressure on the ECB and increases the likelihood of the further measures being announced in December.”
This early estimate of eurozone GDP does not contain any detail on what was driving growth, economists noted. But based on surveys and data out from individual countries it appeared household spending was doing the heavy lifting, they said.
Meanwhile, manufacturers have been struggling with a slowdown in global demand on the back of China’s downturn and turmoil in other emerging market economies.
“Consumers probably saved the day for the eurozone economy in the third quarter. Both the renewed fall in energy prices and the declining unemployment rate have likely boosted disposable income, supporting consumption, in our view the single most important driver of the expansion at this moment,” said Peter Vanden Houte at ING Financial Markets.
“Bottom line: the eurozone recovery is continuing, but it seems like driving with the handbrake on. With the emerging countries still in the doldrums, little acceleration is to be expected in the coming quarters.”
Frankfurt, Sept 30, 2015 (AFP)
German retail sales, a closely watched measure of household confidence, eased in August, amid signs consumer sentiment in Europe’s top economy could be starting to wane, official data showed on Wednesday.
Retailers’ sales slipped by by 0.4 percent in August compared with July, the federal statistics office Destatis said in a statement.
The previous month, retail sales had risen by 1.6 percent.
On a 12-month basis, business had increased strongly, jumping by 2.4 percent in August compared with the same month last year, the statisticians calculated.
Retail sales data are often revised.
Last week, a leading consumer sentiment survey, conducted by the GfK market research institute, found that consumers are beginning to worry about the economic consequences of the huge influx of migrants in Europe’s refugee crisis.
Cheating scandal bodes ill for German economy
SHOGO AKAGAWA, Nikkei staff writer
BERLIN — The Volkswagen emissions scandal has damaged Germany’s reputation for high-quality, environmentally sound manufacturing, shaking the credibility of both the automaker and domestic industry as a whole.
More broadly, Dieselgate threatens to put a damper on Europe’s biggest economy at a time when the region is trying to reignite growth.
The leading European automaker quickly revamped management following revelations that its diesel cars passed U.S. emissions tests by underhanded means. But earnings have yet to feel the impact of the shocking admission. Many of the suspect cars were sold in Europe — at least 2.8 million will need to be checked for the cheating software in Germany alone. Costly recalls loom.
So does the threat of fines. The global financial crisis has galvanized public opinion in rich countries against corporate wrongdoing, and the authorities are eager to throw the book at violators. Volkswagen may also get hit with lawsuits from shareholders hurt by its crashing stock price. And with a tarnished brand, its new-car sales will likely suffer.
The automaker’s strong balance sheet will stand up to considerable financial hardship. The company is expected to try avoiding payroll reductions through a variety of methods, such as shortening work hours, in the event of production cutbacks. But the potential for job losses remains a concern. Jobs are under threat at not only Volkswagen itself, but also at its suppliers, said Marcel Fratzscher, president of the German Institute for Economic Research.
Employment in the nation’s auto industry has grown an annual 2-3%, which works out to almost 20,000 new jobs a year. Should this driver of job creation slow as a result of Volkswagen’s self-inflicted wound, domestic demand may slacken, dragging on the entire European economy.
The contamination spreads
Beyond that, the scandal cuts to the heart of Germany’s image as a manufacturing superpower. The country prides itself on innovations like the diesel engine, developed at the end of the 19th century by its own Rudolf Diesel. A national effort is underway to take manufacturing to a new level, Industrie 4.0, where hardware and computing meld to reduce costs. Anything that discredits Germany’s technological pursuits may sap a vital source of its economic momentum.
All of this poses a very real problem for the European countries economically dependent on Germany. In neighboring Poland, where the Volkswagen group employs more than 10,000 people, media outlets have been covering the scandal in depth. Economy Minister Janusz Piechocinski said he wants an explanation from the automaker, according to a local media report.
Volkswagen’s corporate culture has been blamed for driving it to cheat. CEO Martin Winterkorn, who resigned last week over the scandal, was described as “arrogant” and “authoritarian.” Some compared the top-down way in which the organization is run to the Prussian bureaucracy.
SHOGO AKAGAWA, Nikkei staff writer
But expecting the automaker to fall behind in its home market would be premature. Domestic makes like Volkswagen, Daimler and BMW dominated new-car sales last month. Japanese and other rivals are unlikely to make quick inroads.
The government went so far as to rescue Opel, a local subsidiary of U.S. automaker General Motors, in 2009 out of concern for domestic jobs — and voter opinion. This shows the strength of the public’s bond with the auto industry.
Born out of Nazi-era economic policy, Volkswagen began work on its first factory in 1938. It was run by its home state of Lower Saxony after World War II until its privatization in the 1960s. The group now employs some 600,000 people worldwide, about 270,000 of them in Germany.
Under Winterkorn’s leadership, which began in 2007, German operations grew on the back of swiftly rising exports. Domestic output totaled 2.56 million vehicles last year, up 32% from 2006, despite little demand growth in the home market. The group’s domestic workforce expanded by 90,000 over the same period.
The automaker’s research and development budget — about 11.5 billion euros ($12.8 billion) as of last year — consistently ranks among the highest in the corporate world. Engineers skilled in such fields as environmental and information technology have been recruited in recent years.
Germany is home to other big names in autos, including Daimler and BMW. Its automakers racked up a record-high 367.9 billion euros in sales last year, making their business the biggest domestic industry, with roughly a fifth of the total size, according to the German Association of the Automotive Industry. Exports account for two-thirds of this value. A weak euro has helped sell more German cars abroad in recent years, complementing their reputation for quality and safety.
With additional reporting by Takayuki Kato in Frankfurt, Germany.
Greece’s newly-elected Prime Minister Alexis Tsipras unveiled his new government on Tuesday, giving the crisis-hit country’s key finance portfolio to Euclid Tsakalotos and defence to his nationalist coalition ally, the Independent Greeks.Oxford-educated New Left economist Tsakalotos will face the tough challenge of steering unpopular economic reforms pledged by Tsipras in July in return for Greece’s third bailout by international creditors in five years.The make-up of the new cabinet, announced by its spokeswoman Olga Gerovassili, was largely a carbon-copy of the outgoing government headed by Tsipras, who resigned in August after seven months in office after losing his majority when anti-euro hardliners in his Syriza party quit in anger over the reform-and-rescue deal.Panos Kammenos, who heads the nationalist Independent Greeks, had defence in the previous government.Tsakalotos too ran the crucial finance ministry in the last weeks of the first Tsipras mandate, taking over the portfolio in July from outspoken maverick economist Yanis Varoufakis.Staunchly in favour of Greece remaining in the euro area, he is said to have won the esteem of his European Union peers during negotiations on the controversial 68-million-euro ($97 billion) deal to rescue Greece.Tsipras, whose Syriza party won January elections on an anti-austerity campaign, had said he finally agreed to the harsh belt-tightening measures in the cash-for-reform agreement to keep Greece in the euro.
Party rallies are drawing crowds in most Greek cities ahead of Sunday’s general election, but in the village of Mavrothalassa, deep in the country’s agricultural north, politicians would be wise to stay away.”Political parties have no place here,” says Yiannis Panagis, a farm unionist coordinating a tractor protest outside the area’s defunct tomato processing factory, shut down due to competition from China.”After the election, we know we’ll have the political system against us. But we will not let them turn us into serfs,” he says.Once part of Greece’s tax-privileged classes, farmers are facing a radical income overhaul under the terms of a new international bailout agreed by the leftist government of Alexis Tsipras before his resignation in August.Their income tax rate is to progressively double to 26 percent from 13 percent currently, their pension contributions will rise, and a vital tax break on fuel will be scrapped.Yiorgos, a 37-year-old farmer, describes these measures as the “final nail in the coffin” of the Greek agricultural sector.”I am disappointed and angry. For the first time in my life I don’t want to vote,” Yiorgos says.- Farmers brace to hit back -Greek farmers have suffered years of falling prices, but have faced criticism for being over-reliant on EU subsidies and failing to adapt to a changing market.They mount protests almost every year, blocking toll and border crossings against the rising cost of supplies and the falling price of produce.To avoid taking sides ahead of Sunday’s vote, the protests have been kept local so far.”We will gather to take decisions after the election,” says Stelios Vogiatzis, general secretary of the Panhellenic Farmers’ Union.But the backlash they plan later this year will rival the angry French movement in August that saw highways blocked, foreign trucks ransacked and manure dumped in cities, some warn.”The French mobilisation will be nothing compared to what we are prepared to do if the new government tries to enforce these tough measures,” says 40-year-old sugar beet farmer Zafeiris Kyrgiannakis.”In a few years, the village will be abandoned. The conglomerates will buy our land and put us to work on it. Is this Europe’s plan for us?” adds 43-year-old farmer Thanasis Gegas, a father of two.”For 20 years, governments and parties have lied to us. Now it seems they want to wipe us out,” he says.”I’m one of the few people who stayed behind in the village. But the way this is going, there will be no young people left.”- Failed to adapt -Greek farms tend to be run on a smaller scale than some of their European competitors, which analysts say has left them struggling to keep up.”The Greek agricultural model is condemned to change,” says Stavriani Koutsou, a professor of urban and rural sociology at the technical institute of Thessaloniki.”The average size of a Greek farm is 4.9 hectares compared to over 20 hectares in France. It’s difficult to stay competitive in Europe,” she says.But union leader Vogiatzis argues that the new measures are impossible to manage.”The average farm family earns 12,000 euros ($13,500) a year and with the new tax rates it must pay 6,000 euros. Which family can live on 6,000 euros a year?” he asks.Farmers remain a key voting group in Greece — especially for the conservative New Democracy party, which has a clear shot at taking power on Sunday and has jumped to their defence.Speaking in the agricultural hub of Velestino earlier this month, New Democracy chief Vangelis Meimarakis said he would oppose the tax changes.”The farmers have given what they can to the national effort… It is unthinkable to accept even tougher measures,” Meimarakis said.
His leftist opponent Tsipras has also pledged to renegotiate as much of the bailout as possible to help the country’s poorest citizens.
The next Greek government must approve the farmer tax overhaul in October — or offer credible alternatives — in return for bailout funds.
The 19-nation eurozone grew by 0.4 percent in the second quarter, official data showed on Tuesday, revising upward a first estimate that sparked worries about the health of the European economy.Last month, the EU’s Eurostat agency said the eurozone grew by just 0.3 percent in the April to June period.Eurostat also updated the first quarter growth figure from 0.4 percent to 0.5 percent, boosted by high-growth Ireland which was not included earlier estimates, a Eurostat official said.
US JITTERS: A mixed report on August employment left investors wondering what the Federal Reserve might do about interest rates at a meeting this month. Friday’s report showed the U.S. unemployment rate fell to a seven-year low but employers added fewer jobs than forecast. The Fed’s deputy chairman said earlier that the U.S. central bank still was on track for a rate hike this year, but Friday’s report fueled uncertainty about whether it will feel confident enough to act. The Fed has kept its benchmark interest rate close to zero since late 2008, which has pushed up stock prices.
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WALL STREET: On Friday, the Dow Jones industrial average fell 272.38 points, or 1.7 percent, to 16,102.38. The Standard & Poor’s 500 gave up 29.91 points, or 1.5 percent, to 1,921.22; the index ended the week down 3.4 percent, its second-worst weekly drop of the year. The Nasdaq composite slipped 49.58 points, or 1.1 percent, to 4,683.92.
ENERGY: Benchmark U.S. crude fell 43 cents to $45.62 per barrel in electronic trading on the New York Mercantile Exchange. On Friday, it shed 70 cents to close at $46.05 in New York. Brent crude, used to price international oils, lost 60 cents to $49.02 in London after falling $1.07 to $49.61 on Friday.
CURRENCIES: The dollar gained to 119.28 yen from 119.04 yen on Friday. The euro edged up to $1.1160 from $1.1147.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Jeff Black Christopher Condon
August 30, 2015 — 2:05 AM WIB
Updated on August 30, 2015 — 4:50 AM WIBStronger growth will pull inflation higher in the U.S. and Europe, according to three top central bankers who voiced confidence that their regions will escape from headwinds that are keeping inflation too low.Federal Reserve Vice Chairman Stanley Fischer joined European Central Bank Vice President Vitor Constancio and Bank of England Governor Mark Carney Saturday on a panel at the Kansas City Fed’s annual retreat in Jackson Hole, Wyoming, dedicated to discussing inflation dynamics. Their optimism has not been shared up until now by investors, trading in inflation-protected bonds shows.“Given the apparent stability of inflation expectations, there is good reason to believe that inflation will move higher as the forces holding down inflation dissipate further,” Fischer said in his prepared remarks.“With inflation low, we can probably remove accommodation at a gradual pace,” Fischer said. “Yet, because monetary policy influences real activity with a substantial lag, we should not wait until inflation is back to 2 percent to begin tightening.”While Fischer has left open the option of an interest-rate increase when policy makers meet next month, he didn’t express a preference for acting that soon.“I do not plan to upset your rational expectation that I cannot tell you what decision the Fed will reach by Sept. 17,” he told the symposium Saturday.
Future InflationPrice increases in the U.S. and Europe have been running well below levels targeted by the central banks, where officials are debating what slower Chinese growth and weaker commodity prices could mean for future inflation.While U.S. officials are weighing the timing of their first interest-rate increase since 2006, and the Bank of England may tighten in early 2016, the ECB has heard calls to extend its quantitative easing program to provide more protection against potential deflation.“The link between inflation and real activity appears to have strengthened in the euro area recently,” the ECB’s Constancio said in a paper delivered at Jackson Hole. “Provided our policies are able to significantly reduce the output gap, we can rely on a material effect to help bring the inflation rate closer to target.”
Market ExpectationsInvestors may not share this optimism. Five-year, five-year inflation swaps in the euro area — which reflect expectations for the five-year path of inflation five years from now — show that market-based inflation expectations slid to about 1.65 percent in August from about 1.85 percent at the beginning of the month. That’s almost as low as when the ECB started its quantitative easing program in March.In the U.S., the five-year, five-year forward breakeven rate, 2.16 percent at the beginning of August, slid as low as 1.89 percent on Aug. 24.Such movements show that “we should however be cautious in our assessment that inflation expectations are remaining stable,” Fischer said. Still, “these movements can be hard to interpret, as at times they may reflect factors other than inflation expectations.”Fed Chair Janet Yellen and ECB President Mario Draghi both skipped the Jackson Hole event this year. The ECB Governing Council meets in Frankfurt on Sept. 3 while the Fed’s policy-setting committee gathers on Sept. 16-17. Both banks are short of their 2 percent inflation targets. Euro-zone inflation was 0.2 percent in July, while the price gauge favored by the Fed rose 0.3 percent in the 12 months through July.
U.K. MomentumIn the U.K., Bank of England Governor Mark Carney said “the prospect of sustained momentum” in the economy and a gradual pickup in inflationary pressures “will likely put the decision as to when to start the process of gradual monetary policy normalization into sharper relief around the turn of this year.”He said “recent events” including China’s slowdown so far don’t call for changing the BOE’s strategy for returning inflation to target. U.K. headline inflation was just 0.1 percent in July, well below the bank’s 2 percent goal.While the world’s major central banks are focused on bringing inflation up, the lack of price pressure isn’t a universal problem, said Raghuram Rajan, governor of the Reserve Bank of India.“Unlike our other panelists, I have the problem of dealing with the traditional central banker problem of high inflation and the task of bringing it down,” he said. “We’re disinflating in a world of very low global inflation and that has problems.”Athens, Aug 28, 2015 (AFP)
Greece’s economy grew by 0.9 percent in the second quarter, official date showed Friday, improving on the 0.8 percent figure reported in a flash estimate earlier in August.”Seasonally adjusted data indicate that in the second quarter of 2015 (output) increased by 0.9 percent compared with the first quarter of 2015 against the increase of 0.8 percent that was calculated for the flash estimate,” the state statistics agency said, as the country headed for early elections next month.In the first quarter, the economy grew by 0.1 percent, the agency said, also revising upward its previous estimate of zero growth released on August 13.The figures have come as a surprise as the period in question was marked by fraught talks between Greece and its international creditors that raised fears of a possible Greek exit from the eurozone.Greece on Friday appointed a caretaker government to hold elections expected on September 20, its fifth in six years.Leftist leader Alexis Tsipras is seeking re-election, pledging to soften the blow of an unpopular third bailout that his administration approved in July, splitting his Syriza party.Athens, Aug 11, 2015 (AFP)
Greece and its creditors early Tuesday reached an agreement on fiscal targets for the debt-ridden nation, staying on course for a bailout deal to avert an August 20 default.A government source told state agency ANA that Athens had committed to a primary deficit of 0.25 percent of output in 2015, and a surplus in 2016, meaning that no new fiscal measures will be necessary until then, the source said.In 2016 the primary surplus — the balance not including debt service — will be 0.5 percent, followed by 1.75 percent in 2017 and 3.5 percent in 2018, the source said.There was no immediate detail forthcoming from the government on other sticking points with the creditors, including how to deal with some 90 billion euros in bad loans burdening banks.Greece needs to reach an agreement on its third bailout by August 20, when it must repay 3.4 billion euros ($3.7 billion) to the European Central Bank.Greek Finance Minister Euclid Tsakalotos had earlier urged “optimism that there will be a deal soon” after taking a break from marathon talks with EU-IMF negotiators late Monday to brief Prime Minster Alexis Tsipras.
“We have a discussion… that is going quite well,” Tsakalotos said after the briefing.
“There are issues (the creditors) want to discuss again and again, but I think there should be optimism that there will be a deal soon… I don’t know if it will be tomorrow morning, but soon, it will be soon,” he said.
The talks between Tsakalotos, Economy Minister Giorgos Stathakis, and the ECB, the International Monetary Fund and the European Stability Mechanism aim to finalise the list of new reforms to be required of the Greek government in exchange for a lifeline of up to 86 billion euros ($94 billion).
But Germany may stand in the way of a full disbursement of the third bailout, which comes on top of two earlier rescue packages totalling 240 billion euros.
Appearing to throw cold water on the positive comments from both sides, German government spokesman Steffen Seibert told reporters: “The principle ‘thoroughness over speed’ applies here in particular.”
Berlin favours a stopgap solution such as the short-term EU bridging loan of seven billion euros that enabled Greece to meet debt payments to the IMF and ECB in June and July.
German lawmaker Ralph Brinkhaus, a top official of Chancellor Angela Merkel’s CDU party, said earlier Monday that such a solution would be “better than a bad agreement”.
On the back of expectations of an imminent agreement, the Athens stock exchange on Monday jumped 2.06 percent, its third day of gains.
– Snap elections? –
Greece and its creditors are yet to announce a consensus on other issues, including raising a solidarity tax on large incomes and VAT (sales) taxes on private studies, petrol for farmers and beef.
Any decision affecting farmers — an influential group in Greece — carries political risk and Tsipras last week promised to extract as many concessions as possible from the creditors.
On Monday, the prime minister pledged to cut lawmaker tax breaks and ministers’ salaries in a “symbolic” move to appease Greek society.
“When the issue of scrapping tax breaks for farmers falls on the negotiating table, we cannot pretend not to care about our own tax breaks,” Tsipras said.
The Greek parliament may vote on the accord on Thursday, after which eurozone finance ministers could be asked to approve it on Friday.
Tsipras meanwhile is under pressure from many in his radical left Syriza party who say the new accord will pile further austerity on a weakened economy and goes against the party’s campaign pledges.
But with his popularity among Greeks still high, Tsipras has warned the dissidents of early elections in the autumn if they continue to resist the measures.
Former energy minister Panagiotis Lafazanis, who is opposed to the new bailout agreement, has dismissed it as “a negotiating fiasco” and said Tsipras could not “avoid the outcry by resorting guiltily and hurriedly to elections”.
Iskra, a website of the Lafazanis-led Left Platform, the anti-euro group inside Syriza, on Saturday raised the prospect of snap elections as soon as the first half of September.
Quoting anonymous government sources, the website said the plan was to rush the bailout accord through parliament and then immediately call for snap elections in order to “purge” MPs who oppose the new deal.
However, the government spokeswoman insisted Monday that “there are no electoral thoughts”.
“The election talk cultivated in recent days is neither useful nor does it correspond to reality,” spokeswoman Olga Gerovasili said in a statement, adding that the government was focused on concluding a deal and then negotiating debt relief with its creditors.
Washington, Aug 6, 2015 (AFP)
Greece made a loan interest payment due Thursday to the International Monetary Fund, the institution said, avoiding another default as the debt-riddled country negotiates a third rescue plan.
“Greece has paid the interest charges due to the IMF today,” which amount to about 186.3 million euros ($203.6 million), the International Monetary Fund said in a statement.
The payment was the first time since early June that Greece had met the deadline for its loan payments to the IMF.
Cash-strapped Greece missed a 1.5 billion euro repayment on June 30, becoming the first developed country to default on an IMF loan. Less than two weeks later, Greece missed a 456 million euro payment to the IMF.
When it first defaulted at the end of June, the IMF froze Greece’s access to its resources, including the Fund’s ongoing financing program for the country.
However, on July 20, Greece paid the IMF about two billion euros in arrears, after it received an emergency bridge loan from the European Union, restoring its eligibility for IMF financing.
Representatives of the IMF, the European Commission and the European Central Bank — the international creditors of Greece’s two bailouts since 2010 — are currently in Athens holding negotiations with the Greek authorities on a third bailout.
Greece needs a deal that will unlock bailout funds by August 20, when it must repay some 3.4 billion euros due to the European Central Bank.
After Thursday’s payment to the IMF, Athens still owes about 22 billion euros, according to the Washington-based institution’s website.
The next IMF payment, of about 307 million euros, is due on September 1.
LONDON. Bursa saham Eropa dibuka menguat dipicu spekulasi keputusan Federal Reserve (The Fed) yang akan menaikkan suku bunganya bulan depan.
Indeks Stoxx Europe 600 naik 0,8% pukul 08.18 waktu London dan indeks berjangka Amerika Serikat (AS) naik 0,3% sehubungan indeks MSCI Asia Pacific melemah sebesar 0,2%.
Indeks Bloomberg Dollar Spot memperpanjang kenaikannya, naik 0,2% karena naiknya imbal hasil utang 10 tahun dari Australia ke Jepang. Harga minyak menguat pada hari kedua, sementara harga tembaga kembali turun.
Para pedagang meningkatkan spekulasi mereka pada kenaikan suku bunga AS September nanti setelah kepala Federal Reserve Bank of Atlanta, Dennis Lockhart mengatakan bahwa ia hanya akan mendukung penundaannya dan harus ada penurunan yang signifikan dalam data ekonomi.
Rebound minyak stabil pada pasar komoditas, menekan kerugian diantara saham sektor energi dan pertambangan jelang rilisnya data industri jasa dari China, Jepang dan Amerika Serikat
Indeks dolar Bloomberg, yang mmenelusuri greenback terhadap 10 mata uang utama, naik di hari ketiga ke level tertingginya sejak Maret lalu. Ringgit Malaysia melemah 0,6%, sedangkan won Korea kembali turun, jatuh sebesar 0,7%. Thailand baht turun 0,3% sebelum keputusan suku bunga hari ini yang diproyeksikan untuk menjaga tidak berubahnya biaya pinjaman acuan.
Sumber : KONTAN.CO.ID
BRUSSELS, Aug. 3 (Xinhua) — The eurozone manufacturing sector continued to expand at a solid, steady pace at the start of the third quarter, even as Greek manufacturing activity plunged in July to an all-time low, a survey showed Monday.
The manufacturing purchasing managers’ index (PMI), a key measure of manufacturing activity in euro zone countries, was 52.4 in July, above the earlier flash estimate of 52.2 and close to June’s 14-month peak, according to Markit, a leading global provider of financial information services.
A reading above 50 indicates expansion, while a reading below 50 represents contraction.
The euro zone manufacturing PMI has remained in expansion territory since July 2013.
The survey showed, growth of output, new orders and employment was registered across the consumer, intermediate and investment goods sectors in the euro zone countries in July.
Rates of improvement were comparatively strong at consumer and investment goods producers, whereas only modest rises were seen in the intermediate goods sector.
Among the 19-member states of the euro zone, the deepest contraction of manufacturing sector registered in Greece due to a three-week bank shutdown.
The Greek PMI reading of 30.2 was substantially worse than its previous record low (37.7 in February 2012). Production, new orders, new export orders, employment and purchasing activity all suffered sharp slumps, dropping at the fastest rates on records since Markit began compiling the data 16 years ago.
“Manufacturing output collapsed in July as the debt crisis came to a head,” Phil Smith, economist at Markit which compiles the Greece manufacturing PMI survey said.
“Although manufacturing represents only a small proportion of Greece’s total productive output, the sheer magnitude of the downturn sends a worrying signal for the health of the economy as a whole,” he added.
However, there was no conclusive evidence from survey respondents of events in Greece directly impacting operating performance elsewhere in the currency union’s manufacturing sector.
The most impressive growth rates are being seen in the Netherlands, Spain and Italy, and the latter being notable in enjoying its strongest growth for over four years in July, according to Markit.
“The eurozone manufacturing economy showed encouraging resilience in the face of the Greek debt crisis in July,” Chris Williamson, chief economist at Markit, said.
“Policymakers will be reassured by the robust growth rates seen in these countries and the resilience of the manufacturing sector as a whole, especially as growth is likely to pick up again now that Greece has jumped its latest hurdle in the ongoing debt crisis,” Williamson said.
Editor: Hou Qiang
7:59 AM EST JUL 13, 2015
One of the linchpins of the deal struck Monday morning to prevent Greece’s exit (for now) from the eurozone is a fund that will manage the sale of the country’s state-owned assets. The deal requires that the fund at some point generate €50 billion in cash from the asset sales, to be used for various purposes: half for repaying money borrowed from the eurozone to recapitalize Greek banks; a quarter for investments; and a quarter for reducing the government’s debt burden.
Here are the key details so far:
Why’s the fund necessary?
Germany and its eurozone allies have long complained that Athens hasn’t delivered on pledges to sell these assets as required by its two earlier bailouts, so the fund will provide some assurances there. Since cash from the asset sales will mostly be used to repay debt, the fund comforts Berlin that debts will be repaid.
How will it be operated?
Germany, in a paper circulated over the weekend, proposed the fund and called for it to be located in Luxembourg and run by the Institute for Growth, an entity partly controlled by the German government.
That would’ve been political poison for Greek Prime Minister Alexis Tsipras, who will already have a tough time selling Monday’s deal back home. Instead, the eurozone agreed to have the fund located in Greece, managed by the Greek authorities and supervised by “the relevant European institutions.”
So what will the fund contain?
The statement issued by eurozone leaders after marathon negotiations leaves a number of questions unanswered. First, what assets would qualify to go in the fund? The statement merely requires that they be “valuable.” After six years of recession and counting, Greek liquid assets are scarce; presumably hard assets like beautiful Islands and national treasures are off limits.
One likely source of said assets are the new bank shares that the Greek government will acquire with the money it will borrow from the eurozone’s bailout fund to recapitalize the country’s banks. French President Francois Hollande said as much during his post-summit press conference, arguing this would allow Greece to seed the fund with money it will borrow anyway to recapitalize its banks.
How long will Greece have to sell the assets?
The statement says the assets will be sold over the life of the loans from the eurozone. That’s good news for Greece, since the loans could very well have maturities of 10 years or more.
guardian: Analyst: It’s Merkel 1, Tsipras 0
Demetrios Efstathiou of ICBC Standard Bank says that Greece has been comprehensively routed by Germany in Brussels this weekend:
- Tsipras had to concede on almost every point.
- Merkel comes out as a winner, and should be able to get the deal though the German parliament.
- Germany’s extremely tough position would serve as a warning to other Eurozone nations. There are arguments that she even pushed too far.
- Varoufakis may have gambled, Tsipras and Syriza may have lost, but Greece may be the ultimate winner – Greece has a golden opportunity to implement in record time the drastic reforms that it desperately needed and which successive governments have been unwilling to commit to.
- The formation of a national unity or special purpose government to pass the reforms in the tight time-frame is now required. Elections would have to follow at a later stage.
- The debate will now move on to the reaction of the Greek people. There is no easy answer. Only time will tell. The way I see it is that the Greek people will be relieved to see their banks reopen, their pensions and savings to be still denominated in euros, and the tourist season not destroyed. They should also be celebrating the implementation of structural reforms, but I doubt that.
- Greece must now push through parliament, by Wednesday, July 15th, a series of legislations that include the streamlining of the VAT system, and pension measures.
guardian: European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.
A weekend of high tension that threatened to break Europe in two climaxed on Sunday night at a summit of eurozone leaders in Brussels where the German chancellor, Angela Merkel, and President François Hollande of France presented Greece’s radical prime minister, Alexis Tsipras, with an ultimatum.
In what a senior EU official described as an “exercise in extensive mental waterboarding” to secure Greek acquiescence to talks on a third bailout in five years worth up to €86bn (£62bn), the two leaders pressed for absolute certainty from Tsipras that he would honour what was on offer.
Greeks resigned to a hard, bitter future whatever deal is reached with Europe
Two days of high-stakes negotiations between the finance ministers of the currency bloc resulted in a four-page document that included controversial German elements leaked on Saturday. Those measures included Greece leaving the euro temporarily by taking a “time-out” from the currency bloc if it refuses terms for talks on the new bailout or, in the event of agreement, that Greece sets aside €50bn worth of assets as collateral for new loans and for eventual privatisation. Both passages, however, did not enjoy a consensus among eurozone leaders.
Under the terms set before Tsipras on Sunday night, the Greek parliament has to endorse the entire package on Monday and then pass several pieces of legislation by Wednesday, including on pensions reform and a new VAT regime, before the eurozone will agree to negotiate a new three-year rescue package.
The terms are much stiffer than those imposed by the creditors over the past five years. This, said the senior official, was payback for the emphatic no to the creditors’ terms delivered by the snap referendum that Tsipras staged a week ago.
“He was warned a yes vote would get better terms, that a no vote would be much harder,” said the senior official.
The Eurogroup document said experts from the troika of creditors – the International Monetary Fund, European Commission and European Central Bank – would be on the ground in Athens to monitor the proposed bailout programme. The trio would also have a say in all relevant Greek draft legislation before it is presented to parliament. Furthermore, the Greeks will have to amend all legislation already passed by the Syriza government this year that had not been agreed with the creditors.
Live Greece debt crisis: Athens faces ‘temporary Grexit’ if no deal – live updates
Greece is resisting its creditors demands for even more austerity measures and reforms in Brussels tonight, as bailout talks go to the wire
While Greece’s fate was being debated in Brussels, in Athens the ruling leftwing Syriza party was showing signs of disintegration. Demands that the reforms be approved by the Greek government and put into law by Wednesday were described as “utter blackmail” by leading party members and met with disbelief.
Although sources close to Tsipras said the leader was determined to do whatever was needed to keep Grexit at bay, political tumult also beckoned. Insiders conceded that a cabinet reshuffle – removing ministers who had refused to vote the austerity package through parliament early on Saturday – could come as early as Monday.
By late Sunday night it had become clear that Tsipras’s U-turn on measures he had once spurned had produced a potentially far-reaching split. In addition to 17 MPs breaking ranks at the weekend – stripping his government of a working majority – 15 other lawmakers also indicated they would not approve the agreement in its entirety. The resistance raises the spectre of Tsipras being forced to call fresh elections – a move described as potentially catastrophic for the country.
“Greece can bend up to a point,” said Aristides Hatzis, a prominent political commentator. “But after that there is no bending, only breaking.”
Although billed as the last chance to secure “the ultimate agreement” on the Greek debt crisis, the prospects of a grand political bargain to keep Greece in the eurozone are far from assured.
Entering the leaders’ meeting, Tsipras said he was looking for compromise: “We can reach an agreement if all parties want it.”
But France and Germany are split on their approach to the Greek question, while Finland could refuse outright to sign up to a third bailout for Greece.
France’s Hollande vowed to do everything possible to get an agreement on Sunday night, but Merkel said there wouldn’t be an agreement at any cost.
Other eurozone countries urged Germany to drop its objections. “Grexit has to be prevented,” said Jean Asselborn, the Luxembourg foreign minister. “It would be fateful for Germany’s reputation in the EU and the world.
“Germany’s responsibility is great. It’s about not conjuring up the ghosts of the past,” he told German newspaper Süddeutsche Zeitung. “If Germany goes for Grexit, it will trigger a deep conflict with France. That would be a catastrophe for Europe.”
Italy’s prime minister, Matteo Renzi, was expected to tell Merkel at the leaders’ meeting that “enough is enough” and the eurozone should not humiliate Greece when it had already given up so much.
Earlier on Sunday, eurozone finance ministers said they had made some progress after 14 hours of talks over two days and failing to reach any agreement on Saturday. “We have come a long way, solved a lot of issues, but some big issues still remain,” said Jeroen Dijsselbloem, who chairs the Eurogroup of finance ministers.
Donald Tusk, the president of the European Council, cancelled an emergency full summit of the 28 countries that was to deal with the fallout from Greece’s ejection, in order to give eurozone leaders a last chance to reach an accord saving Greece and forestalling what would be a devastating schism, sowing deep resentment and division between Europe’s leaders.
The intractable problem is that many governments do not trust the Greek government to implement a €12bn (£8.6bn) programme of spending cuts and reforms that will be delivered as part of a bailout. Eurozone governments are seeking proof from Athens it can keep its promises, in exchange for agreeing to start talks on a deal.
“The main obstacle to an agreement is trust,” said Pier Carlo Padoan, finance minister of Italy, one of the countries most sympathetic to Greece.
The Irish taoiseach, Enda Kenny, urged his fellow leaders to “look at the bigger picture”. Kenny, who has been Ireland’s leader since the early days of its own bailout programme, said in his country’s case trust was built incrementally.
“We don’t want to look back in 10 years’ time and think this could have been saved, but wasn’t,” he said.
The German news magazine Der Spiegel called Sunday the biggest day of Merkel’s 10-year chancellorship and appealed to her to “show greatness” and save Europe.
If Der Spiegel was right about the momentousness of Merkel’s day, the same could be said for Hollande of France who, with his government and officials, has been campaigning tirelessly in recent weeks to keep Greece in the euro, helping Athens to draft its proposals.
A decision to go ahead with a so-called Grexit, which has never been closer, would be a shattering failure for Hollande and the resulting Franco-German recrimination would be deeply damaging, say observers.
Athens, July 10, 2015 (AFP)
Greece’s parliament was expected, in the early hours of Saturday, to approve last-ditch government proposals to its eurozone creditors aimed at preventing a dreaded exit from the eurozone.
The reforms proposed by the government have sparked criticism from hardline members of the radical left ruling party Syriza, but most opposition parties have expressed willingness to back them.
A majority of lawmakers from Syriza and other parties earlier on Friday granted their approval in a committee vote. the full plenary session vote is expected to be held early Saturday morning.
“If the current deal comes to pass, it will be a difficult deal,” new Finance Minister Euclid Tsakalotos warned lawmakers.
But he added that the government wanted parliament’s approval “to strengthen the country’s bargaining position, to achieve better terms in the agreement.”
The latest reform proposals put forward by Athens were cheered by France and Italy on Friday, raising hopes that a last-ditch compromise can be reached to prevent a “Grexit.”
In them Greek Prime Minister Alexis Tsipras concedes ground on major sticking points, including creditors’ demands to overhaul pensions, increase sales taxes, and commit to privatisations.
But the proposed measures limit changes on other thorny issues, including tax breaks for Greece’s islands and cuts to military spending.
– Debt mountain –
Tsipras hopes his new offer will open the door to creditors discussing another round of relief from Greece’s suffocating 320-billion-euro ($350-billion) mountain of debt.
The proposal aims to procure financing “for three years, debt adjustment and a front-loaded investment package of 35 billion euros ($38 billion),” a Greek government source said.
But the Greek leader also risks alienating large numbers of the ruling party’s supporters, who rejected in a national referendum last Sunday a very similar set of proposals put forward by Greece’s creditors.
Some 8,000 people gathered in Athens ahead of the parliamentary vote to protest against carrying on with austerity measures, police said.
In a bid to head off a possible challenge to the measures within his hard-left party Syriza, Tsipras urged his lawmakers “to stand united and firm in front of these important decisions.”
Tsakalotos said Friday he believed “many” of his country’s demands for debt relief will be accepted by eurozone partners whose ministers will meet Saturday.
He notably expressed confidence that Greece will be permitted to roll over a debt of 27 billion euros ($30 billion) in bonds held by the European Central Bank to the European Stability Mechanism, which would push back repayments.
Any new Greek rescue needs to be approved unanimously by eurozone members.
– Euro, markets soar –
French President Francois Hollande said “the Greeks have shown a determination to want to stay in the eurozone because the programme they are presenting is serious and credible.”
However he cautioned that “nothing is decided yet.”
Italian Prime Minister Matteo Renzi declared himself “more optimistic” that a deal would be done.
But Germany, leading a bloc of sceptical eurozone nations, said the outcome of crisis talks this weekend was “completely open.”
Germany leads a bloc of eurozone nations saying that, after two bailouts over the past five years totalling 240 billion euros, and 107 billion euros in debt forgiveness in 2012, Greece is looking like bottomless money pit.
The possibility of a breakthrough sent stock markets soaring in Europe, Asia and the US on Friday.
Meanwhile the euro briefly rose above $1.12 for the first time in July before falling back slightly in later trade, still up at $1.1152
– Tsipras’s gamble –
Eurogroup chief Jeroen Dijsselbloem promised that Eurozone finance ministers will make a ‘major’ decision Saturday on whether to endorse the latest proposals from Athens.
“We have to make a major decision. Whichever way,” Dijsselbloem, who is also the Dutch finance minister, told reporters ahead of a cabinet meeting in The Hague.
“But we have to see whether the proposals will genuinely help pull Greece from the doldrums,” he added, two days ahead of a summit of EU leaders on Sunday.
Parliaments in several EU nations, notably Germany, will also have to vote on whether to accept Greece’s reform plan in exchange for another huge bailout — its third in five years.
Tsipras is taking a political gamble by making any concessions to creditors’ demands.
Hardliners in Syriza and coalition partner the Independent Greeks have obstinately rejected further austerity.
But although Greek voters last Sunday roundly voted “No” to accepting tough austerity terms for a bailout that expired June 30, they are alarmed at capital controls that have closed banks and rationed ATM cash.
They also overwhelmingly want to keep the euro.
“The government has to find a deal with its European partners no matter what. We didn’t vote ‘No’ to leave the eurozone,” said a pensioner in Athens, Nikos Eftekidis.
But another pensioner, Giorgos, said the “government’s proposed measures are very tough, I wasn’t expecting that. That’s not what the Greeks voted for.”
Brussels, July 10, 2015 (AFP)
Greece’s international creditors believe its latest debt proposals are positive enough to be the basis for a new bailout worth 74 billion euros, an EU source said Friday.
“There has been positive evaluation of the Greek programme,” the source said, with the EU’s bailout fund, the European Stability Mechanism ready to consider putting up 58 billion euros plus 16 billion euros from the International Monetary Fund for a new debt rescue.
guardian: The Greek government capitulated on Thursday to demands from its creditors for severe austerity measures in return for a modest debt write-off, raising hopes that a rescue deal could be signed at an emergency meeting of EU leaders on Sunday.
Live Greek crisis: Government submits reform plan in bid for new aid deal – live updates
European council president Donald Tusk has backed calls for Greece’s debt sustainability to be tackled as part of a third bailout
Athens is understood to have put forward a package of reforms and public spending cuts worth €13bn (£9.3bn) to secure a third bailout from creditors that could raise $50bn and allow it to stay inside the currency union.
A cabinet meeting signed off the reform package after ministers agreed that the dire state of the economy and the debilitating closure of the country’s banks meant it had no option but to agree to almost all the creditors terms.
Parliament is expected to endorse the package after a frantic few days of negotiation that followed a landmark referendum last Sunday in which Greek voters backed the radical leftist Syriza government’s call for debt relief.
Syriza, which is in coalition with the rightwing populist Independent party, is expected to meet huge opposition from within its own ranks and from trade unions and youth groups that viewed the referendum as a vote against any austerity.
Panagiotis Lafazanis, the energy minister and influential hard-leftist, who on Wednesday welcomed a deal for a new €2bn gas pipeline from Russia, has ruled out a new tough austerity package.
Lafazanis represents around 70 Syriza MPs who have previously taken a hard line against further austerity measures and could yet wreck any top-level agreement.
Emphasising the likelihood of further strife in Greece next week even should a deal be concluded, Brussels officials talked privately of plans to fly in humanitarian aid such as food parcels and medicines to major cities.
The urgency of Greek efforts to prevent an exit from the euro came after Brussels set a midnight Thursday deadline for Greece to produce a package of measures in line with previous demands.
With the support of officials from the French finance ministry, Greek negotiators are believed to have accepted the need for VAT rises and rules blocking early retirement as the price of a deal.
Several EU leaders said the troika of creditors – the European commission, the International Monetary Fund and the European Central Bank – must also make concessions to secure Greece’s future inside the eurozone.
Donald Tusk, who chairs the EU summits, said European officials would make an effort to address Greece’s key request for a debt write-off.
“The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation,” Tusk said.
Tusk, a former prime minister of Poland, aligned himself with France and Italy in seeking a way through the political maze that has defeated all previous efforts to find a breakthrough.
Sources close to Greece’s chief negotiator and finance minister, Euclid Tsakalotos, said he had finalised and submitted a plan of reforms for a third bailout to give creditors time to review it ahead of a summit of EU members on Sunday.
On Thursday, the German finance minister, Wolfgang Schäuble said the possibility of some kind of debt relief would be discussed over coming days, although he cautioned it may not provide much help.
“The room for manoeuvre through debt reprofiling or restructuring is very small,” he said.
Greece has long argued its debt is too high to be paid back and that the country requires some form of debt relief. The IMF agrees, but key European states such as Germany have resisted the idea.
Making Greece’s debt more sustainable would likely involve lowering the interest rates and extending the repayment dates on its bailout loans. Germany and many other European countries rule out an outright debt cut, arguing it would be illegal under European treaties.
The developments on Thursday boosted market confidence that a compromise will be found. The Stoxx 50 index of top European shares was up 2.4% in late afternoon trading.
Prime Minister Alexis Tsipras met with finance ministry officials ahead of the cabinet meeting on Thursday afternoon which finalised his country’s plan, a day after his government requested a new three-year aid programme from Europe’s bailout fund and promised to immediately enact reforms.
The last-minute negotiations come as Greece’s financial system teeters on the brink of collapse. It has imposed restrictions on banking transactions since 29 June, limiting cash withdrawals to €60 per day to staunch a bank run. Banks and the stock market have been shut for just as long.
The closures, which have been extended until Monday, have led to daily lines at cash machines and have hammered businesses. Payments abroad have been banned without special permission.
Greece’s financial institutions have been kept afloat so far by emergency liquidity assistance from the ECB. But the central bank has not increased the amount in days, giving the lenders a stranglehold despite capital controls.
German ECB governing council member Jens Weidmann argued Greek banks should not get more emergency credit from the central bank unless a bailout deal is struck.
He said it was up to eurozone governments and Greek leaders themselves to rescue Greece.
The central bank “has no mandate to safeguard the solvency of banks and governments,” he said in a speech.
The ECB capped emergency credit to Greek banks amid doubt over whether the country will win further rescue loans from other countries. The banks closed and limited cash withdrawals because they had no other way to replace deposits.
Weidmann said he welcomed the fact that central bank credit “is no longer being used to finance capital flight caused by the Greek government”.
Tsipras Asking Grandma to Figure Out If Greek Debt Deal Is Fair
by Matthew CampbellJenny Paris
June 28, 2015 — 7:02 AM WIB
Economists with PhDs and hedge-fund traders can barely stay on top of the vagaries of Greece’s spiraling debt crisis. Now, try getting grandma to vote on it.
That’s what Prime Minister Alexis Tsipras is doing by calling a snap referendum for July 5 on the latest bailout package from creditors. The 68-word ballot question namechecks four international institutions and asks voters for their opinion on two highly technical documents that weren’t made public before the referendum call and were only translated into Greek on Saturday.
Worse, they may no longer be on the table. International Monetary Fund chief Christine Lagarde told the BBC late on Saturday that “legally speaking, the referendum will relate to proposals and arrangements which are no longer valid.”
Tsipras’s decision means everyone from fishermen to taxi-drivers and factory workers will have to form an opinion on the package, with their country’s economic future hanging in the balance. A rejection of the bailout terms could lead to an exit from the euro area and economic calamity; accepting them would probably keep Greece in the euro, but with more austerity.
“Usually in democracies, it’s the technocrats and the politicians who take care of the details, while voters are asked about broader issues and principles,” said Philip Shaw, the chief economist in London at asset manager Investec. “This is a transfer of responsibility from parliament to the voters.”
Tsipras’s surprise referendum came as lawmakers in his left-wing Syriza party voiced opposition to the bailout proposals and threatened to vote against them in parliament, potentially eroding his grip on power. Tsipras has said the proposals will add “unbearable weight” to Greece’s troubles.
Opinion polls show a majority of Greeks support retaining the euro, although further tax increases and spending cuts have few supporters in a country with 25 percent unemployment that’s seen its economy contract by a quarter since 2010.
Greece’s referendum question will read as follows:
“Greek people are hereby asked to decide whether they accept a draft agreement document submitted by the European Commission, the European Central Bank and the International Monetary Fund, at the Eurogroup meeting held on on June 25 and which consists of two documents:
‘‘The first document is called Reforms for the Completion of the Current Program and Beyond and the second document is called Preliminary Debt Sustainability Analysis.
‘‘- Those citizens who reject the institutions’ proposal vote Not Approved / NO
‘‘- Those citizens who accept the institutions’ proposal vote Approved / YES.’’
The two documents reflect the complexity of Greece’s financial predicament. The first includes sections on ‘‘parametric budgetary measures’’ and ‘‘unified wage grid reform.’’ The second has a discussion of the methodological advantages of using ‘‘gross annual financing needs’’ to assess Greece’s debt burden, rather than the more traditional debt-to-GDP ratio.
‘‘What the government couldn’t decide on after five months of talks, the Greek people will have to decide in five days,’’ Antigone Limberaki, a lawmaker with small centrist party To Potami and an economics professor, said during a parliamentary debate on the referendum.
There have been almost no referendums on international bailouts of a country in financial crisis. Greece came close to one in 2011, when then-Prime Minister George Papandreou proposed and then canceled a plebiscite on a debt deal.
Before that, the last time Greeks went to the polls to decide a single question was in 1974, when they voted to retire their monarchy in favor of a presidential republic.
Some Greeks are concerned that the most important question isn’t even on the ballot this time.
‘‘People will vote based on whether they want the harsh measures or not, they may not realize that they’re actually voting on whether to stay in the euro,” said Erato Spyropoulou, who waited in line at a National Bank of Greece AG cash machine in Athens to withdraw money on Saturday morning. “I don’t want the harsh measures either. I’m in debt, but I don’t want to leave Europe.”
Investors are fretting about the same thing.
The ballot question “is dangerous in as much as it doesn’t link the consequences to the question, i.e. potential [euro] exit,” Josh O’Byrne, a strategist at Citigroup in London, wrote in a note to clients.
Eurogroup finance ministers have almost universally condemned the referendum plan, which Tsipras announced late Friday night without warning Greece’s creditors.
It leaves a broad range of questions for them and for the European Central Bank, which is providing emergency funds to keep Greek banks afloat.
There’s another potential wrinkle in the ballot question. It’s based on the state of play as of late this week, and thus on proposals that may no longer be on offer after Greece’s bailout expires on Tuesday and if Greece misses a payment to the IMF due on the same day.
Given the lead time for printing and distributing ballot papers in a country of 10 million residents spread over 227 inhabited islands, that means
voters could be asked their opinion on proposals that aren’t even still on the table when they enter the voting booth.
European finance chiefs shelved efforts to rescue Greece, turning their focus to containing fallout from a looming financial collapse as Greek savers lined up at local banks and ATMs to pull out as many euros as they could.
Meeting in Brussels Saturday evening after rejecting Greece’s request to extend its aid program beyond June 30, the ministers urged the cash-strapped nation to protect its lenders. The European Central Bank, which has kept the nation afloat, is set to discuss Sunday whether to pull the plug on its emergency lending, leaving the country with no backstop.
“Monday could be a bank holiday” in Greece, Ireland’s Michael Noonan told reporters. “It’s not a question of waiting to see what might happen on Monday in terms of crisis. The crisis has commenced.”
The breakdown after a week of nonstop talks followed Prime Minister Alexis Tsipras’s stunning call overnight for a July 5 referendum on spending cuts that he has steadfastly rejected. Recriminations were replaced by wistfulness among the policy makers as the prospect of Greece’s exit from the euro after more than five years of crisis-fighting drew closer.
“Plan B is fast unraveling and becoming Plan A,” said Finland’s Alexander Stubb. The upshot is “potentially a very sad day.”
“Sad day for Europe,” Greece’s Yanis Varoufakis said as he left his 18 counterparts to discuss damage control.
Around Greece, lines formed outside ATMs in an accelerating bank run that may require capital controls to husband the lenders’ dwindling resources.
Tsipras urged voters to reject the terms of the bailout. The Parliament in Athens is scheduled to vote at about midnight to ratify the ballot.
Public opinion is at odds with Tsipras’s hard line, according to a survey published Saturday. Two-thirds say Greece should remain in euro area and 57.5 percent say the government should back down to reach a deal with creditors, the Kapa Research poll for To Vima newspaper showed.
Dijsselbloem told reporters in Brussels that Varoufakis had requested a one-month extension. With “no comprehensive package agreed” to by ministers, Dijsselbloem said the Greek government faces the expiry of its aid program on Tuesday night without any future financing in place.
In the coming days, “Greece will experience acute difficulties,” German Finance Minister Wolfgang Schaeuble told reporters in a briefing that ended with him shrugging his shoulders.
Even if that happens, the other 18 euro countries are in a better position to contain the damage than when the crisis initially spread from Greece in 2011 and 2012, several ministers said.
Varoufakis said that his government rejected the latest offer by creditors — the European Commission, the ECB and the International Monetary Fund — to unlock aid in return for more fiscal austerity because the package gave no hope that Greece would emerge from the economic crisis.
He said the measures, ranging from cuts in pensions to wage curbs, have been “quite clear failures” since Greece first sought aid in 2010, leading to twin bailouts worth 240 billion euros ($268 billion). Still, Varoufakis said, it’s possible that a majority of Greeks will vote in the referendum to accept the creditors’ plan.
Adding further pressure on Greece is a payment to the IMF of about 1.5 billion euros due on June 30.
The ECB has increased Emergency Liquidity Assistance in weekly and sometimes daily increments to the Greek central bank to funnel to the country’s lenders amid a slow-motion bank run. The total stood at almost 89 billion euros as of Friday. That’s up from less than 60 billion euros in February, when the ECB cut Greek banks off from normal refinancing because of the newly elected government’s opposition to reforms linked to the country’s bailout.
While any decision to rein in ELA requires a two-thirds majority in the 25-member Governing Council, that may not be hard to achieve should ECB chief Mario Draghi back it. He would already have weighty support from Germany’s Jens Weidmann. The Bundesbank president said on Thursday that ELA for Greece raises “serious” concerns over monetary financing of governments, which is illegal under European Union law, as Greek banks regularly roll over about 9 billion euros of short-term government debt.
yahoo finance: “Grexit” is a term coined by Citigroup economists Willem Buiter and Ebrahim Rahbari. Gre(ece + e)xit, or Grexit, refers to the possibility that Greece could exit the Eurozone and give up the euro as its currency.
As long as Greece is part of the Eurozone, Greece (GREK) is bound to obey the rules and abide by any guidlines established by the European Central Bank, or ECB. Greece must adhere to the austerity program imposed upon it by the ECB, the International Monetary Fund, and other creditors in the aftermath of the Greek debt crisis of 2010.
Implications of Greece exiting the Eurozone
Greece’s exit from the Eurozone (VGK) would mean it would no longer be bound by the austerity measures that have resulted in massive cuts to public spending. It would also mean that the country would go back to using the Greek drachma, its own independent currency. But how then, would Greece manage to fund its public spending?
The Greek drachma, once revived, is likely to see depreciation in value, at least initially. This stands to reason given Greece’s current economic and political situation.
A weak Greek drachma could help boost exports, as they would become cheaper in international markets. A boost in exports would spell good news for Greek olive oil exporters such as El Renieris & Co and Greekpol. Greece happens to be the world’s largest exporter of extra virgin olive oil.
Meanwhile, a Grexit could have more serious and much larger consequences for Spain (EWP), Italy (EWI), and the global (ACWI) economy, as you’ll discover, next.
Greek Prime Minister Alexis Tsipras said early Saturday he would call a referendum on the outcome of the negotiations with international creditors on Greece’s bailout taking place in Brussels later in the day.”The people must decide free of any blackmail… the referendum will take place on July 5,” Tsipras said in a statement broadcast at 1:00am local time (2200 GMT) on Greek television.Tsipras addressed the nation ahead of a critical meeting of eurozone finance ministers on Saturday, amid heightened anxiety over a possible Greek default next Tuesday that could potentially spark its exit from the eurozone.”For the last six months, the Greek government has led the fight … to find a viable agreement that respects democracy,” Tsipras said.”We were asked to implement austerity measures … allowing the deregulation of the labour market, pension cuts, and an increase in VAT on food products, targeting the humiliation of an entire people,” the premier said.”This is a historic responsibility that now appears for us to decide the future of the country … in the coming days we will have to take decisions upon which future generations will depend.”Tsipras, speaking from the Prime Minister’s official residence in Athens, spoke for about five minutes directly to camera.”Democracy deserved a boost in euro-related matters,” Greek Finance Minister Yanis Varafoukis tweeted following the referendum declaration. “We just delivered it. Let the people decide.”Earlier on Friday, Greece rejected its international creditors’ offer of a five-month, 12-billion-euro ($13.4-billion) extension of its bailout programme, arguing it was unacceptable.The creditors — the European Commission, the European Central Bank and the International Monetary Fund — insist Greece must seal a deal this weekend to avoid an IMF default early next week.However the Greek government argued the reforms demanded alongside the bailout extension would be recessionary and the funding insufficient.Varafoukis said earlier that Greece had a “duty” to reach agreement Saturday with its international creditors.
Tsipras, Merkel and Hollande meet on European Summit sidelines
The negotiations between Greece and its creditors will resume after the conclusion of the Summit on Friday
Friday, June 26, 2015
A meeting on the sidelines of the European Summit between Prime Minister Alexis Tsipras, German Chancellor Angela Merkel and French President Francois Hollande, has concluded. The three leaders, who arranged late on Thursday evening according to the Athens-Macedonia News Agency, met at the offices of the French delegation at the Council of the European Union and did not make any comments on arrival.
Reuters has reported that the three European leaders discussed the possibility of extending the current Greek bailout program, while expires at the end of July. Furthermore, the report claims that the Greek Prime Minister questioned the persistence of the creditors on such harsh measures.
According to Greek government official who spoke to Reuters, the negotiations between the Greek government and the institutions are set to continue after the conclusion of the European Summit on Friday and ahead of Saturday’s Eurogroup. The Eurogroup in Brussels on Saturday is scheduled for 5pm local time (6pm in Greece).
Meanwhile, the Slovak Finance Minister Peter Kazimir expressed his frustration over the ongoing negotiations for Greece and noted that although a deadline has been set for Saturday, he expected the talks to carry on until Sunday. Similarly, the president of the Eurogroup Jeroen Dijsselbloem claimed that while an agreement with Greece was still possible, it required a stronger reform package.
The Italian and Lithuanian Prime Ministers, Matteo Renzi and Algirdas Butkevičius, both appeared optimistic of an agreement being reached. Mr. Renzi argued that he as certain of an agreement on Saturday.
Austrian Chancellor Werner Faymann was more reserved in his estimations and noted that while there was optimism for an agreement, he explained that there were “four to five” different view points on Greece and that the talks regarding Greece in the first day of the Summit was not extensive. As such there was no clear view as to what would occur if an agreement was not reached.
The spokesperson for the German Ministry of Finances Martin Jäger commented that Greece’s international creditors have made compromises in the talks so far and that it was now time for Greece to make a move and accept, what he dubbed, a “very generous” offer.
The neverending story
Greece and its creditors are halfway to reaching a deal. It sometimes seems they always will be
“GREXHAUSTION” was the coinage of choice for one Greek television anchor Thursday night, as euro-zone finance ministers failed for the third time in four days to find a breakthrough in their talks over Greece’s bail-out. Throughout the week proposals and counter-proposals have bounced back and forth between Greece and its creditor institutions, slowly narrowing the differences over issues like pensions and VAT rates. But four days before its twice-extended bail-out expires and a €1.5 billion ($1.7 billion) payment to the IMF falls due, Greece and its far-left prime minister, Alexis Tsipras (pictured at left with Matteo Renzi, Italy’s prime minister, and Angela Merkel, Germany’s chancellor) still have no deal.
There is still time. The finance ministers plan to meet again on Saturday in Brussels, hoping that technical discussions will find accord on the outstanding issues and produce a paper they can sign. If a deal is struck it could be approved by Greece’s parliament on Sunday, and by Germany’s Bundestag and other creditor legislatures on Monday. That in turn could unlock €1.8 billion in profits from an old Greek bond-buying programme currently sitting in euro-zone central banks, enabling Greece to pay the IMF on time. Further bail-out funds would be disbursed in the following weeks, keeping Greece afloat over the summer through a series of redemptions, including a total of €6.7 billion owed to the European Central Bank. According to a document obtained by the Wall Street Journal, the aim would be to extend Greece’s bail-out for the third time, this time until November.
That is, just about, a plausible story. But the wheels may yet come off. The outstanding differences between Greece and its creditors may look small, including whether the VAT rate for hotels should be 13% or 23%, and whether a “solidarity grant” for pensioners should be eliminated by 2018 or 2019. But they mask a mood of extreme resentment on both sides. The Greeks thought a proposal they sent last Monday was a huge gesture towards the institutions. Indeed, the intial reception was warm, and markets lifted on the assumption a deal was imminent. But the mood quickly slumped when the IMF said the Greek plan relied too heavily on tax rises and did not cut pensions enough. Some Greeks have taken to conspiratorial murmurs that the secret plan of the creditors is to force an unacceptable deal on Mr Tsipras, in the hope that his government falls. “The Greek side has bent over backwards to accommodate some rather strange demands by the institutions,” said Greece’s finance minister, Yanis Varoufakis, this morning.
Complicating matters further, the creditor side is split. Several euro-zone finance ministers, including Wolfgang Schäuble, the flinty German, complained at yesterday’s meeting that the “troika” of institutions negotiating with the Greeks—the ECB, IMF and European Commission—had been too lenient on them. The IMF has been the toughest on the Greeks over reforms, but shares with Athens the view that a restructuring of its vast debts, worth nearly 180% of GDP, is necessary. The Germans disagree, at least on the sequencing (they want reforms and cuts now; restructuring later, if at all), but do not want to disburse bail-out funds before the IMF does. All of these complexities must be smoothed out, or at least papered over, before Greece can be saved.
And if it is saved, what then? The deal on the table, short on reforms to Greece’s broken public administration and long on austerity measures, will do little to lift Greece out of the recession into which it has again slumped. It will be signed in a mood of bitterness rather than co-operation. It will not involve the debt relief the Greeks so desperately seek, and will be seen domestically as yet another diktat from outside. Greece has struggled to implement every agreement since its first bail-out five years ago. A radical-left government bullied into yet more austerity is hardly likely to have more luck with this one.
Moreover, discussions have not even begun on what to do with Greece once it needs more funding. The scale of the disagreements over Greece’s second bail-out have concealed the puniness of the sums in question: just €7.2 billion remains in the kitty. With Greece priced out of capital markets and still running deficits it will need more help; few dispute a third bail-out will be needed, probably in the autumn. That will involve more debate, more conditions, more parliamentary ratifications, and almost certainly more nail-biting summitry.
What happens if there is no deal? Greece will miss its IMF payment, but that will not trigger immediate meltdown: credit-rating agencies have said they would not consider Greece in default, and its other creditors, including the ECB and the EFSF (the euro zone’s bail-out fund), would probably follow suit. Failure to find an agreement, though, would probably accelerate further the deposit outflows from Greece’s tottering banks. The ECB, which has been keeping them alive by drip-feeding emergency liquidity assistance, would come under immense pressure to limit its support if Greece finds itself outside of a bail-out for the first time since 2010. Yesterday one of the more hawkish members of the bank’s governing council, Jens Weidmann, said that the liquidity support threatened to violate the ECB’s ban on monetary financing of a government. A cap on ELA would surely trigger capital controls on Greece’s banks.
The question is whether Mr Tsipras, who was elected in January on a promise to tear up Greece’s bail-out programme, would consider this dangerous path preferable to capitulation to the creditors. Many in his own party, fed up with what they consider the bullying tactics of the institutions, are calling for resistance. But others fear that failure to surrender would mark the first step towards a departure from the euro. Mr Tsipras had long hoped to prove that Greece did not have to choose between the path of the creditors and the road that may lead to Grexit. It is now clear that he must.
JAKARTA – Deputi Gubernur Senior Bank Indonesia (BI) Mirza Adityaswara mengatakan, kondisi Yunani di pasar keuangan tahun ini, berbeda dengan 2011 lalu. Hal tersebut, lantaran perbankan Eropa yang memiliki tekanan lebih besar kepada Yunani, dibandingkan kini.
“Pada waktu 2011 dan 2015 perbankan Eropa yang punya eksposure di Yunani besar sekali, Kalau sekarang itu yang sudah hampir tidak ada dampak ke institusi keuangan di Eropa tidak besar,” tutur Mirza di Gedung BI, Jakarta, Jumat (26/6/2015).
Lebih lanjut dia menjelaskan, permasalahan Yunani yang tidak berujung pada penyelesaian berpotensi untuk membuat pasar Yunani bergejolak. Dikarenakan anggaran pemerintahan yang minim, menyebabkan kekurangan likuiditas.
“Tetapi dampak kepada Yunani sendiri jika memang tidak terjadi deal pasar dia akan terus bergejolak tidak dapat likuiditas. Karena anggaran pemerintah tidak cukup, perbankan juga alami situasi kekurangan likuiditas,” pungkasnya.
Sekedar informasi, Pemerintahan Yunani harus membayar sejumlah utang jatuh temponya pada akhir Juni ini kepada International Monetary Fund (IMF). Yunani memerlukan utang baru untuk bisa membayar utang dari IMF tersebut.
Adapun utang Yunani kepada IMF yang jatuh tempo akhir Juni ini mencapai USD1,8 miliar.
Brussels, June 25, 2015 (AFP)
EU President Donald Tusk said Thursday he felt that talks to reach a deal on Greece’s debt crisis with its creditors would end soon with a positive outcome.
“For now, I can only say, that work is underway and for sure it will need still many hours,” Tusk said as he arrived for a two-day EU leaders summit in Brussels.
“The last hours have been critical but I have a good hunch that unlike in Sophocles’ tragedies this Greek story will have a happy end,” he added.
Also arriving for the talks, Belgian Prime Minister Charles Michel said the last stretch of a negotiation was always the hardest.
“I want to have faith, but I know the situation is fragile, difficult,” Michel said.
“I continue to hope that it will be possible to seize an agreement in the coming hours and if we don’t make it, we must work in the coming days and certainly this weekend,” Michel said.
The EU summit is taking place while a high-stakes eurozone finance ministers meeting on Greece is being held in a building next door.
The leaders’ talks will deal primarily with the Mediterranean migrant crisis and plans by Britain to hold a vote on remaining in the European Union.
the economist: The Greek bailout negotiations The new sticking points Jun 24th 2015, 18:48 by P.W. | LONDON MARKETS breathed a sigh of relief on Monday when European leaders were broadly positive about the latest set of proposals from the Greek government. But today the talks are once again in trouble. The creditors, represented by the European Commission and the IMF, have tabled counterproposals and Alexis Tsipras, the Greek prime minister, has already rejected them. Tempers are rising again on both sides. So is a compromise now possible? One battle is over the balance of spending cuts and tax rises. The Greek government dominated by the radical left Syriza party has been unsurprisingly reluctant to cut public expenditure. Its measures to meet a primary budget surplus (ie, before interest payments) of 1% of GDP (€1.8 billion) this year and 2% of GDP next year rely almost exclusively on tax rises. The corporate income tax rate would rise from 26% to 29% in 2016.
Pension contribution rates in the main private scheme would increase by 3.9 percentage points, reversing a previous cut and raising €350m this year and €800m in 2016.
Moreover the Greek plan envisages a oneoff 12% tax on corporate profits (above €500,000), raising almost €1 billion this year and €400m in 2016.
However, the creditors want a smaller increase in the corporate income tax rate, from 26% to 28%. More important, they rule out the oneoff corporateprofit tax and the rise in pension contribution rates, slicing through half the revenue gains of 2.7 billion this year, or 1.5% of GDP, anticipated in the Greek plan. Their rejection makes economic sense since the levies would add to the pressures already facing companies as the Greek economy has deteriorated this year, particularly those firms owed money by the 6/25/2015 The Greek bailout negotiations: The new sticking points | The Economist http://www.economist.com/node/21656123/print 2/2 state, which has stopped paying commercial contractors. But a budgetary package relying more heavily on spending cuts is much harder for Mr Tsipras to sell politically to Syriza and its radical firebrands. Instead of the businessunfriendly tax rises favoured by the Greek government, the creditors want a package that relies more heavily on higher revenue from VAT and thus from consumers (including tourists). In particular they want to raise 1% of GDP in 2016 in higher VAT whereas Mr Tsipras has an objective of 0.75%. Among other things the creditors want to tax restaurant meals at 23% rather than 13%, a lower rate introduced two years ago by the previous government led by Antonis Samaras. The creditors also want steeper cuts on military outlays, of €400m next year rather than €200m. That would present a different difficulty for Mr Tsipras because of his decision to go into coalition with the Independent Greeks, a rightofcentre party, led by Panos Kammenos. Bigger cuts in military spending might be hard for Mr Kammenos, the defence minister, to stomach.
But the biggest sticking point remains pension savings. Rather than securing them by increasing contributions, the creditors want to cut spending. Their main goal is an immediate clampdown on early retirement. Although the statutory retirement age was raised in 2013 to 67 for both men and women (with a minimum age of 62 for those with 40 years’ contributions), older workers have largely been shielded from this change, enabling them to retire early on still favourable terms. The creditors want to impose penalties for early retirement and to phase out the exemptions of older workers by 2022 (rather than 2025 as suggested by Mr Tsipras). They also want the clampdown on early retirement to start immediately rather than in January 2016, as suggested by the Greeks, since this would simply prompt a rush to the exits over the next six months. They also want to raise the contributions paid by pensioners for health care from 4% to 6% rather than to 5% as set out in the Greek plan. And they want to phase out the minimumincome topup payment by the end of 2017 rather than by 2020 (though in their earlier proposals the creditors sought to achieve this by the end of next year). On the face of it, there remains a worryingly big gap between the two sets of proposals. What appeared to have changed at the start of the week was a political desire to reach a deal. Whether that commitment on both sides will prevail now appears even more crucial than before. With leaders once again converging on Brussels for the meeting of the European Council that starts tomorrow, the hope is that this may provide another opportunity for a deal finally to be struck. Since the current bailout agreement expires at the end of June, time is short. Maybe it will concentrate minds. Maybe.
Brussels, June 24, 2015 (AFP)
Greek Prime Minister Alexis Tsipras will continue marathon talks with creditors in Brussels Thursday to thrash out a debt deal to save Athens from default, despite having lashed out at lenders for rejecting his reform plans.
Tsipras held a two-hour late-night meeting with the heads of the European Commission, International Monetary Fund and European Central Bank, Greece’s main bailout monitors, officials said, after seven hours of discussions earlier Wednesday failed to produce a breakthrough.
The parties agreed to resume the talks at 0700 GMT Thursday morning in hopes of finalising a deal in time to present it at a meeting of eurozone finance ministers later in the day.
The 19 ministers from the single currency bloc halted their own talks on releasing further financial aid on Wednesday, saying they did not have enough information to work through the night as planned and that they would start again at 1100 GMT on Thursday.
Time is running out, with Athens needing the extra bailout cash to avoid defaulting on a huge International Monetary Fund payment on June 30, which could send it crashing out of the eurozone with potentially seismic effects for the world economy.
A European source told AFP there was “hope of an agreement between the (creditor) institutions and Greek authorities” from the talks between Tsipras and the EU-IMF.
“We have not reached agreement yet, but we are determined to continue our work towards doing what is necessary,” Jeroen Dijsselbloem, head of the Eurogroup of finance ministers from the 19-country currency union, told reporters after the talks broke up after around one hour.
The Eurogroup talks, the third in less than a week, aim to approve a deal that can then be rubber stamped by national leaders who are meeting at a summit of the 28-state European Union on Thursday and Friday.
– ‘Strange position’ –
Eurozone stock markets fell at close, weighed down by renewed concerns about a deal, with Frankfurt dropping 0.62 percent, Paris sliding 0.24 percent, Madrid 0.82 percent lower, Milan down 0.16 percent and Greece losing 1.77 percent.
Anti-austerity leader Tsipras had flown to Brussels early Wednesday for a crunch meeting with European Commission President Jean-Claude Juncker, IMF chief Christine Lagarde and European Central Bank boss Mario Draghi.
But Athens rejected what it said were fresh demands from its creditors on top of a reform plan that it submitted last week to end a five-month standoff that started with Tsipras’s election in January.
“This strange position maybe hides two things: either they do not want an agreement or they are serving specific interests in Greece,” Tsipras said as he went into the talks.
Tsipras has vowed to end five years of austerity imposed under two bailouts worth 240 billion euros, and has resisted demands by creditors for spending cuts and pension reforms.
But the European-IMF lenders have refused to unlock the last 7.2 billion euros ($8.1 billion) of Greece’s bailout before it expires on June 30, which Greece needs to pay a 1.5-billion-euro IMF loan repayment on the same day.
EU President Donald Tusk warned last week of the risk of a “chaotic uncontrollable Grexident” — Greece crashing out of the euro and perhaps also the EU, which it joined in 1981.
– ECB cash injection –
The new plans submitted Sunday by Greece aim to raise eight billion euros, mostly through new taxes on the wealthy and businesses, VAT increases and a cut in defence spending.
But in counter-proposals handed to Greece on Tuesday, creditors are calling for early retirement to be abolished and an increase in the retirement age from 62 to 67 by 2022, not 2025.
They are sticking to demands for a 23 percent value-added tax rate for restaurants, instead of the current 13 percent. Athens is fearful of the consequences to its valuable tourism sector.
Creditors also propose to increase corporation tax to 28 percent from the current 26 percent, instead of the Greek plan to raise it to 29 percent from 2016 onwards.
And they want defence expenditure to be slashed by 400 million euros instead of the proposed 200 million euros.
As the crisis rages, Greece’s banking system has been kept afloat by cash injections from the ECB as wary Greeks withdraw their deposits, and on Wednesday it increased for the fifth time in eight days emergency liquidity funds.
The Greek government meanwhile warned that any accord would have to be approved by a parliamentary majority before June 30, which risks splitting Tsipras’s Syriza party, where many on the left wing view him as reneging on campaign promises.
Any Greek agreement will also need to deal with what comes next, with EU officials suggesting an extension of the bailout until the end of the year, followed by a possible third aid package to keep Greece afloat.
The two huge bailouts since the Greek crisis erupted in 2010 have left it with debt totalling nearly 180 percent of its annual economic output.
Frankfurt, June 24, 2015 (AFP)
German business confidence fell to its lowest level in four months in June as the outlook for Europe’s biggest economy clouds over, the Ifo economic institute said on Wednesday.
The Ifo institute’s closely watched business climate index fell to 107.4 points in June from 108.5 points in May, the think tank said in a statement. That is the lowest level since February.
It was the second month in a row that the index has fallen and analysts had been expecting a much shallower decline.
“The outlook for the German economy is overcast,” said Ifo president Hans-Werner Sinn.
“The indicator for the current business situation declined this month following three successive increases. Business expectations deteriorated for the third consecutive month and are now only slightly optimistic,” he said.
Ifo calculates its headline index on the basis of companies’ assessments of the current business environment and the outlook for the next six months.
The sub-index measuring current business fell to 113.1 points, while the outlook sub-index slipped by one whole point to 102.0 points, the institute said.
Luxembourg, June 18, 2015 (AFP)
International Monetary Fund chief Christine Lagarde warned Greece Thursday it would get no leeway on a huge debt payment as EU ministers warned they were looking at a “plan B” for a possible default.
Eurozone finance ministers holding a crisis meeting in Luxembourg pressed Athens to finally present a credible reform plan and end the five-month standoff between Greece’s anti-austerity government and its creditors.
But with Athens owing a 1.6-billion-euro payment to the IMF at the end of June and Greece’s international bailout due to expire the same day, they were pessimistic about the chances of a deal on Thursday.
“There will be no period of grace” for the loan payment, Lagarde told reporters before she joined the ministers for their Eurogroup meeting. “I have a term of June 30 — if it’s not paid by July 1, it’s not paid.”
Greece’s creditors are withholding the last 7.2 billion euros of its bailout until Athens caves in, but leftist Prime Minister Alexis Tsipras has refused to make changes to pensions and VAT rates.
Europe’s most powerful leader, German Chancellor Angela Merkel, weighed in on the issue earlier Thursday when she told German lawmakers in the Bundestag she was “still confident” that a deal was possible.
– ‘Not a lot of hope’ –
But the mood was darker in an overcast Luxembourg, where ministers were openly broaching scenarios such as a Greek exit from the euro if it defaults on its debts.
“The next step to make the deal credible, also financially sustainable, will have to come from the Greek side,” the Dutch Eurogroup chief Jeroen Dijsselbloem told reporters.
He added that he did “not have a lot of hope” that the Greeks would present a new plan Thursday.
No deal at the Eurogroup meeting means the issue will likely go to the wire at an EU leaders’ summit in Brussels on June 25 and 26.
Greek Finance Minister Yanis Varoufakis, the motorbike-riding former economist whose relations with his counterparts have been strained, said he wanted to “replace costly discord with effective consensus.”
“Today we are going to be presenting the Greek government ideas,” he added, without specifying whether he meant a new reform plan.
Without the bailout tranche and the IMF deadline missed, Greece would be for the first time in five years financially alone, with its coffers empty and all eyes on what happens next.
“The other option is to prepare the B plan,” said Irish finance minister Michael Noonan, adding that he didn’t fear any “contagion effect” in the case of a “Grexit” — meaning Greece crashing out of th euro.
Finnish Finance Minister Alex Stubb added: “Option number 1 is extension …. Option B could be default.”
The IMF has taken a harder line than its co-bailout monitors the European Commission and European Central Bank, pushing for Europe to write off some Greek debts.
Greece had already bought itself time by bundling four looming IMF loan payments into one lump sum to be paid by June 30 — becoming the first country to use such a possibility since Zambia in the 1980s — and it is losing patience.
– No Waterloo –
The coincidence that the Eurogroup was meeting on the 200th anniversary of the Battle of Waterloo led EU Economic Affairs Commissioner Pierre Moscovici to draw a comparison between then and now.
“I certainly don’t want this to be a ‘Battle of Waterloo’ with the whole of Europe against one state,” he said.
Greece’s central bank warned for the first time Wednesday that the country could suffer a “painful” exit from the single currency area — and even the European Union — if it fails to reach a deal.
Greece has another 6.7 billion euros due to the European Central Bank in July and August and there have been reports of planning for possible capital controls if Greece’s financial system runs dry.
European officials warned that the IMF’s zero-tolerance on July 1 could also force the European Central Bank to cut-off vital financing to Greece’s creaking banks.
Elected in January on a vow to end five years of bailout-imposed austerity, Tsipras warned Wednesday that an EU “fixation” with pension cuts would scupper a deal and harm Europe as a whole.
In a move that seemed calculated to irk other European leaders amid tensions with Russia over Ukraine, Tsipras visited Saint Petersburg Thursday where he will be the star guest at President Vladimir Putin’s investment drive forum.
Frankfurt, June 18, 2015 (AFP)
The euro will not fall if Greece quits the single currency area, German central bank chief Jens Weidmann said in a newspaper interview published on Thursday.
“The continued existence of the euro is not tied to the development in Greece. But certain contagion effects cannot be ruled out because the character of monetary union would be altered by a ‘Grexit’,” Bundesbank president Weidmann told French daily Les Echos.
The interview was also published in the Spanish and Italian dailies El Mundo and La Stampa.
A so-called Grexit would be an exit by Greece from the euro area.
“The character of monetary union would also change if individual countries do not fulfil their responsibilities for a stable currency and turn monetary union into a transfer union which their populations never voted for,” Weidmann continued.
“That is also a contagion effect, the negative consequences of which should not be underestimated.”
He insisted that “the responsibility over whether Greece stays in the eurozone lies with the Greek government.”
“The last few days have shown that there isn’t much time left to reach an agreement,” Weidmann continued.
Eurozone finance ministers were set to hold crunch talks over Greece in Luxembourg Thursday, after a barrage of warnings that the country risks a damaging exit from the EU if it fails to strike a deal with its creditors.
As negotiations between Athens, the EU, ECB and IMF over the last 7.2 billion euro ($8.1 billion) tranche of Greece’s massive international bailout grew increasingly acrimonious this week, officials started openly discussing the prospect of Greece crashing out of the euro.
“The ball is definitely in the court of the Greek government in which direction they want to take their country,” Weidmann said.
“Despite the risks from a state default and possible contagion effects, we have to ensure that the foundations of monetary union as a stability union are not undermined. Aid and solidarity are part of that, but agreements must be adhered to,” he said.
“A revocation of the agreements and a halting of repayments to the partners who have provided aid, or to the European Central Bank, would certainly have consequences for Greece which would be difficult to keep under control,” Weidmann warned.
Tokyo, June 10, 2015 (AFP)
The euro strengthened Wednesday as investors bet Greece is nearing a bailout deal with its international creditors that would avoid a default and possible eurozone exit.
The 19-nation currency rose to $1.1297 and 140.51 yen in Tokyo trade from $1.1280 and 140.23 yen in New York.
Cash-strapped Athens submitted new proposals Tuesday to end a standoff with the European Union and the International Monetary Fund before the latest rescue package expires at the end of June.
The EU’s top official for the euro said Greece and the creditors could be just days from reaching a bailout deal as Prime Minister Alexis Tsipras warned that failure could sink the eurozone.
The creditors have demanded tough reforms in exchange for giving Athens the final 7.2 billion euros ($8.1 billion) of its bailout funds.
“I would say that reaching the agreement within coming days is possible,” Valdis Dombrovskis, the EU vice president for the euro, told reporters.
Failure to reach a deal so far has sparked concerns that Greece could default on its debt and likely tumble out of the eurozone, roiling global markets.
In other trading, the dollar was changing hands at 124.53 yen, little changed from 124.31 yen in New York Tuesday.
Expectations that the US central bank will start raising interest rates before the year’s end — a plus for the dollar — were amplified on Tuesday after the JOLTS (Job Openings and Labor Turnover Survey) report showed a surge in job vacancies.
Separately, a small business survey showed businesses were hiring more people and paying them more.
“The dollar is undergoing an adjustment to its strength right now as solid fundamentals are countered by worries about the negative side of the strong dollar,” said Masato Yanagiya, head of foreign exchange and money trading at Sumitomo Mitsui Banking.
But “with firm data supporting the view for a September rate hike, it’s difficult to stop the appreciation of the dollar,” he told Bloomberg News.
Lisbon, June 10, 2015 (AFP)
As Greece teeters on the brink of possible default, another bailed-out eurozone nation, Portugal, is showing off its relative economic health seeking to set itself apart from the Greek crisis.
Lisbon has said it intends to pay back this month some two billion euros ($2.2 billion) it owes the International Monetary Fund, which comes after it repaid 6.6 billion euros — around a quarter of its debt to the global lender — early.
On the other hand the Greeks have bundled a series of debt payments to the IMF, totalling some 1.6 billion euros, pushing back the deadline to June 30, which has spurred concerns it could be heading toward a messy exit from the eurozone.
Portugal’s centre-right government has made no secret of the differences between it and the radical left party Syriza which is leading Greece.
“One just has to compare (Portugal) with another country in Europe unfortunately close to us that instead of making IMF payments early is postponing them,” Finance Minister Maria Luis Albuquerque said recently.
“The EU rules apply to everyone. The Greeks have to agree to abide by them,” she added.
– ‘Among the weak links’ –
The stakes could not be higher because some economists are concerned that the precedent of a country leaving Europe’s single currency might come back to haunt the eurozone as other countries facing difficulties might feel the heat in the markets.
“Portugal is doing much better than Greece, but despite the progress the country remains among the weak links. Its public debt is one of the highest in the eurozone,” BPI bank economist Paula Carvalho told AFP.
Despite the austerity cure it underwent after being bailed out in 2011, Portugal’s debt increased further last year, reaching 130 percent of GDP — though still below that of Greece’s debt which stands at 175 percent.
But due to the Greek crisis, “Portugal’s borrowing rates have started to rise, and we have witnessed a beginning of a panic in the markets,” said Pedro Lino, manager of financial company Dif Broker.
In his view Italy and Spain are also among the vulnerable countries.
The interest rate on Portugal’s 10-year bonds, a measure of investor confidence, stood at 2.933 percent on Tuesday, after hitting a record low of 1.56 percent in March.
Portugal’s financial future was in much worse trouble in 2011 when, on the brink of default, it received a 78-billion-euro international bailout.
The nation of about 10 million people emerged from the crisis in May 2014 after putting in place an unprecedented austerity programme.
In return for the money, the government had to cut wages, pensions and social benefits, triggering mass street protests by the Portuguese, who continue to grapple with high unemployment and increased taxation.
– Survival concerns –
Portugal’s leaders have been divided on the impact of a possible Greek default.
“Portugal is well equipped to cope with possible instability linked to less positive developments in the negotiations with Greece,” Prime Minister Pedro Passos Coelho said in early June.
Finance chief Albuquerque was less confident: “I am worried not only for Portugal, but for the whole eurozone,” she said.
Portuguese banks have significantly reduced their exposure to Greece, currently at 300 million euros against 6.8 billion euros in 2009. The Portuguese government has also lent over 1.1 billion euros to Athens.
After three years of recession, Portugal returned to growth in 2014 and expects gross domestic product to expand 1.6 percent this year.
Portugal’s budget deficit also fell to 4.5 percent of GDP in 2014 and the government has promised to bring it below 3.0 percent this year.
With a financial cushion evaluated in late March at 17 billion euros, Portugal “can survive for many months without resorting to financial markets,” said Lino from Dif Broker.
But Domingos Amaral, professor of economics at the Catholic University of Lisbon, warned that “if instability in Greece grows and everything goes wrong, it is obvious that this will impact Portugal and the rest of the Europe”.
<org idsrc=”isin” value=”PTBPI0AM0004″>BPI</org>
reuters: A Greek exit from the euro would not mark a return to the debt crisis of 2012, but it would create risks of contagion and change the nature of the monetary union, which was supposed to be permanent, a senior Moody’s rating analyst said on Thursday.
“We don’t think that a Greek exit would be inconsequential,”
Kathrin Muehlbronner, vice-president of sovereign risk at Moody’s told Reuters in an interview in Lisbon.
Many analysts worry that Greece will be forced to leave the euro zone if it fails to reach agreement with its creditors and receive more funds.
“It (a Greek exit) would change the face and the nature of monetary union, which was supposed to be permanent and would then turn out not to be,” Muehlbronner said, adding that Portugal would be at risk of contagion in the case of a Greek exit.
She said the impact of a Greek exit would be limited by the European Central Bank’s quantitative easing program but might hit corporate operations.
“It’s unclear how it would play out,” she said. “The sovereigns in a way are protected by the ECB’s QE. It’s less certain about bank funding and corporate funding and their ability to access markets.”
The ECB’s program has provided a “huge help” to the eurozone and will continue to have a large influence on interest rates until September 2016, when the plan ends.
“So interest rates will remain anchored at very low levels, but they can now only go in one direction, which is up,” she said.
The ECB’s program has also reduced pressure on governments, she said.
“With interest rates so low and funding conditions improving, the pressure has been taken off governments to pursue aggressive fiscal policy measures. That’s clear for the whole eurozone,” she said.
Moody’s rates Portugal Ba1 with a stable outlook – the first notch of speculative grade.
Muehlbronner said Portugal’s rating was held back by the country’s large debt burden. At around 130 percent of GDP, it is the fifth highest in “our entire sovereign rating unit.”
“We do expect the debt to start declining this year, but even assuming fiscal consolidation, growth, you would still be looking at a ratio of 115 percent or so by the end of the decade,” she said.
Portugal’s rating is also undercut by the country’s poor growth after its debt crisis – Lisbon exited a bailout last year, when it grew 0.9 percent after three years of recession.
“Just 1 percent growth following the recent crisis brings up question marks and the possible option of additional reforms to help with the growth performance,” she said, adding she expects higher growth this year.
She said that Moody’s wants to know what fiscal policy will be like under the next government, after elections in the autumn.
“We think there is a need to continue with proactive fiscal measures, the cyclical recovery is too weak to take care of the budget issues by themselves,” she said.
(Reporting By Shrikesh Laxmidas, writing by Axel Bugge, Editing by Larry King)
Brussels, June 3, 2015 (AFP)
Greek Prime Minister Alexis Tsipras held crunch talks with European Commission chief Jean-Claude Juncker in Brussels on Wednesday to try to seal a desperately-needed bailout deal as the country’s debt crisis nears its climax.
Radical anti-austerity leader Tsipras was presenting a reform plan to end a gruelling four-month standoff and unlock the final 7.2-billion-euro ($8.0-billion) tranche of Greece’s international rescue package.
But Greece’s creditors were sceptical and insisted Tsipras had to work from their own tougher proposal if he wants the funds to help make a critical payment to the IMF on Friday and avoid possible default.
Juncker and Tsipras shook hands for the cameras but made no comment — Juncker also avoided a repeat of previous light-hearted moments when he mocked the Greek leader’s refusal to wear a tie — before going in to what the EU described as a “working dinner”.
Eurogroup chief Jeroen Dijsselbloem, the head of the eurozone finance ministers’ bloc who was also in Brussels for the talks, said that it was an “important meeting but I am not expecting a deal this evening.”
Greece’s eurozone partners and its creditors in the EU, European Central Bank and International Monetary fund want a deal by Friday, when Athens must repay the IMF 300 million euros.
Fears of a messy Greek exit from the euro are growing, with its current 240-billion-euro bailout programme is due to run out at the end of June, and a total of 1.6 billion euros in payments due to the IMF in total this month, which Athens does not have.
– Last-minute phone call –
In the hours before the Tsipras-Juncker meeting there were frantic efforts to bridge the gap between the demands of the creditors and the hard-left Syriza government’s determination to end five years of austerity.
Syriza chief Tsipras, who was elected in January on a vow to refuse any more bailout programmes that would mean more painful cuts to Greek finances, appealed to European leaders to show unity.
“We must avoid division,” Tsipras said as he headed for Brussels, adding: “I am certain the leadership of Europe will do what must be done, it will join the side of realism.”
German Chancellor Angela Merkel and French President Francois Hollande acknowledged “the necessity” to lower primary surplus targets — a key sticking point with Athens — during phone talks on Wednesday with Tsipras, Greek sources said.
Athens has insisted on lower targets that would allow it to honour promises to voters to increase public spending, having already made compromises on pension reform and sales tax.
Hollande said a deal could be “days, even hours away”.
But the leader of Europe’s fiscal hawks, German Finance Minister Wolfgang Schaeuble, poured cold water on the prospects of an agreement.
Schaeuble said he had heard some elements of the Greek plan, which “change nothing in my assessment to colleagues in Dresden. It rather confirms it”, referring to a G7 meeting last week when he said optimism was not justified.
Meanwhile ECB chief Mario Draghi said the ECB wanted Greece to remain in the single currency, but that a “strong agreement” was needed.
– Syriza’s nod needed –
Greece was notably absent when the creditors hatched their plan at a closed-door meeting in Berlin on Monday between Hollande, Merkel and Juncker, plus Draghi and IMF boss Christine Lagarde.
They are likely to demand tougher reforms than the 46-page proposal the Greek premier said he would present in Brussels, which aims to overhaul the struggling Greek economy whilst breaking with harsh austerity.
Any deal must be approved by the rest of the eurozone, where Greece’s hardheaded stance during negotiations and its flirting with Russia have alienated some other countries.
Tsipras would meanwhile face the challenge of getting an agreement through a vote at home.
This could be tough given that he is under intense pressure from Syriza’s influential radical wing to reject any reform plan that piles more austerity on the recession-hit country.
Some Syriza officials have said they would rather hold snap elections than accept more austerity.
Paris, June 3, 2015 (AFP)
The French and German economy ministers, in a joint statement to be published in European newspapers Thursday, call for a strengthened eurozone with a common budgetary mechanism and tools to avoid the kind of debt problems Greece is suffering.
“It’s time to strengthen the eurozone by way of the EU’s biggest reform,” Emmanuel Macron and his German counterpart Sigmar Gabriel said in the comments published by France’s Le Figaro, Britain’s The Guardian, Germany’s Die Welt, Spain’s El Pais and other European dailies.
The German and French ministers also stressed that “a stronger eurozone should be the core of a deepened EU.”
The current set up has “faults” which must be repaired “so that the euro maintains its promise of economic prosperity and, more broadly, prevents Europe from drifting towards discontent and divisions,” the French and German ministers said.
“We must reconcile general European interests and national interests,” they added, alluding to “anti-European forces” developing in some EU nations.
French economy ministry sources said that the initiative to better knit the eurozone had two main strands: a common budget capacity and solidarity mechanisms to be rapidly available to help “countries in difficulty”.
The call comes as indebted Greece’s eurozone partners and its creditors in the EU and the International Monetary Fund seek a deal by Friday, when Athens must repay 300 million euros to the IMF as part of a multi-billion euro bailout deal.
It also comes as British Prime Minister David Cameron seeks EU reforms and “a better deal for Britain” ahead of an in-out membership referendum he has promised by 2017.
Macron and Gabriel, who is also Germany’s vice chancellor, called for “an embryo euro area budget” and “a fiscal capacity over and above national budgets” to act as economic stabilisers.
This could mean, for example, a common fund to quickly help national economies in difficulty, a French ministry source said.
The German and French ministers also stressed that “a stronger eurozone should be the core of a deepened EU.”
For the wider EU of 28 nations they propose “new steps” towards a better integrated internal market with a targeted approach in some key sectors, such as energy and hi-tech.
Riga, May 22, 2015 (AFP)
German Chancellor Angela Merkel said Friday there was still a lot of work needed to reach agreement with Greece on its debt bailout, as tortuous talks drag on amid fears Athens could run out of money.
The government of Greek leftist Prime Minister Alexis Tsipras is locked in talks to obtain fresh funding with international creditors who are demanding more tough austerity measures in return.
Tsipras met Merkel and French President Francois Hollande late Thursday on the sidelines of the EU-Eastern Partnership summit in the Latvian capital Riga but their discussions produced no breakthrough.
“It was a very friendly and constructive exchange,” Merkel said as she went into the summit Friday.
“But it is clear, the work with the three institutions has to go on. There is still a lot to do,” she said, referring to the European Union, European Central Bank and the International Monetary Fund who have bailed out Greece twice to the tune of 240 billion euros.
Merkel said she and Hollande had offered Tsipras their good offices if he needed help during the talks but it was up to Athens to reach an accord with the three creditors.
“The conclusion has to be found with the three institutions and it has to be worked very, very intensively,” she added.
Tsipras said he was “very optimistic” as he went into the summit Friday and declined further comment.
An aide to Hollande said earlier that the talks late Thursday had been “friendly and constructive (and had) … focused on the desire to reach an agreement on the current programme.”
A Greek government source said separately that Merkel and Hollande “understood the need for a long-term deal.”
The immediate focus is what reforms the radical left Tsipras can accept in return for the release of a final 7.2 billion euros ($8.2 billion) in bailout funds Athens needs to avoid defaulting on its debt and possibly crashing out of the eurozone.
The delay in reaching an agreement has led to concerns Athens is running critically short of cash and may soon end up defaulting, which could set off a messy exit from the euro.
London, May 12, 2015 (AFP)
European stock markets slid at the start of trading on Tuesday, mirroring sentiment across Asia and on Wall Street over fears about Greece’s eurozone future.
London’s benchmark FTSE 100 index shed 0.90 percent to 6,966.50 points in initial deals.
Frankfurt’s DAX 30 slumped 1.19 percent to 11,534.81 points, and the CAC 40 in Paris lost 1.07 percent to 4,973.92 compared with Monday’s close.
“European equities are trading sharply lower this morning extending yesterday’s losses after Greece’s increasingly dire financial situation is once again taking centre stage,” said Markus Huber, senior analyst at brokers Peregrine & Black.
Greece narrowly averted a default Tuesday that could have seen it crashing out of the euro, but warned it faced another cash crunch in two weeks without a bailout deal with its EU-IMF financiers.
Athens’s new radical left government managed to scrape enough cash together Monday to place the order for the repayment of 750 million euros ($840 million) in loans from the International Monetary Fund,, the finance ministry said, pledging to honour both its international and domestic debt obligations.
Greece won some support in the latest round of debt talks as it battles to keep itself solvent, but eurozone finance ministers have demanded more key reforms before they agree to release the final 7.2-billion-euro tranche of its EU-IMF bailout.
“While the Greeks may have stumped up some cash to appease their creditors in the short term, unless they can get through the current impasse and reach agreement on austerity measures, markets will remain jittery,” said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
Brussels, May 12, 2015 (AFP)
Greece narrowly averted a default Tuesday that could have seen it crashing out of the euro, but warned it faced another cash crunch within two weeks without a bailout deal with its EU financiers.
Athens’s radical new government managed to scrape enough cash together Monday to place the order for the repayment of 750 million euros ($840 million) of IMF loans, the finance ministry said, pledging to honour both its international and domestic debt obligations.
Greece won some support in the latest round of debt talks as it battles to keep itself solvent, but eurozone finance ministers demanded more key reforms before they agree to release the final 7.2-billion-euro tranche of its EU-IMF bailout.
“We welcomed the progress that has been achieved so far… At the same time, we acknowledged that more time and effort are needed to bridge the gaps on the remaining open issues,” a Eurogroup statement said after the meeting in Brussels.
But Greek Finance Minister Yanis Varoufakis — leading the charge for the anti-austerity government of Prime Minister Alexis Tsipras — admitted Athens faced an imminent crisis as it struggles to keep up repayments on its 240-billion-euro bailout.
“The liquidity issue is a terribly urgent issue. It’s common knowledge, let’s not beat around the bush,” said the shaven-headed former economics professor, who has been at loggerheads with his international counterparts.
“From the perspective (of timing), we are talking about the next couple of weeks.”
– Punishing repayments –
Greece faces a punishing debt repayment schedule in coming weeks, owing another 1.5 billion euros to the IMF in June and then another three billion euros to the European Central Bank (ECB) in July and August.
Athens has been squeezing funds from the central and local governments to be able to meet its payments, but mayors are beginning to resist.
World stock markets fell in response to the news, with Asian shares dropping at the open after Wall Street snapped a two-day rally, while the euro was trading at $1.1162 in Tokyo from $1.1208 on Friday.
Led by Germany, the Europeans still expect a rigorous regime of reforms from Athens including cuts to pensions, but Tsipras’s leftist government in power since January has so far refused to deliver on the terms of the bailout.
Eurogroup chief Jeroen Dijsselbloem insisted that a full deal was needed for Greece to get its remaining bailout funds, but raised the possibility of breaking up the reform programme into steps and then making staggered disbursements.
But the eurozone needed “more detailed proposals” from Greece, the Dutchman said, adding there was “a lot of work behind the scenes in Athens that needs to be done.”
EU economic affairs commissioner Pierre Moscovici said that on issues like pensions and the labour market, Greece had to make “alternative proposals for areas of programme that it rejects.”
Varoufakis said he hoped for a deal in coming days.
– Referendum question –
Meanwhile Germany raised the issue of a possible referendum, a prospect already mooted by the Greeks.
“Maybe this would be the right measure to let the Greek people decide if it is ready to accept what is necessary,” powerful finance minister Wolfgang Schaeuble said.
While Varoufakis said the idea was “not on our radar at the moment,” it revives a pledge made by Tspiras at the end of April that, if Greece’s financers push his government to a deal that contravenes their election promises, it would be put to a public vote.
Greece was hoping that the symbolic statement of progress won from the eurozone Monday will help persuade the ECB to keep emergency funds flowing to Greece’s fragile banks.
“The statement is a clear sign that the process is ongoing, and that’s something,” a European official involved in the talks said on condition of anonymity. “But will it be enough for the ECB? I don’t know.”
Tsipras, whose hard-left Syriza party swept to power on an anti-austerity platform, has called for an “honourable compromise,” and the government reportedly plans a number of concessions to win over its creditors.
These include a new VAT rate, along with a restriction on early retirement and an unpopular property tax that would enable the government to save billions of euros as demanded by its creditors.
Frankfurt, April 15, 2015 (AFP)
The European Central Bank will be keen to stress Wednesday that it has no plans to roll back controversial policy measures, as signs multiply that its medicine is beginning to work, analysts said.
ECB chief Mario Draghi is not expected to announce any changes in policy at the governing council’s regular meeting, held a day earlier than usual because of the traditional spring meetings of the World Bank and International Monetary Fund in Washington at the weekend.
But he is likely to underline the positive effects of a raft of different policy measures, including a contested sovereign bond purchase programme launched last month.
And he will be at pains to emphasise that there are no plans to “taper” the measures any time soon, analysts said.
“This week’s ECB meeting should be a non-event. QE has started to work and, for the first time in a long while, the ECB can sit back and relax. ECB president Draghi only needs to be careful not to overdo any self-congratulation, to avoid any premature tapering discussion,” said ING DiBa economist Carsten Brzeski.
QE or “quantitative easing” is a massive 1.1-trillion-euro ($1.2 trillion) sovereign bond purchase scheme aimed at bringing area-wide inflation back up to levels consistent with healthy economic growth.
Under the programme, the ECB aims to buy 60 billion euros of bonds per month until September 2016.
The scheme has its critics, not least the head of the German central bank or Bundesbank, Jens Weidmann, who fear it will lessen pressure on governments to get their economies and finances in order.
– When will tapering begin? –
Opponents are likely to argue for an early roll-back of the programme as the eurozone recovery picks up speed.
New data suggest that QE is already helping to get credit flowing again within the 19 countries that share the euro.
The ECB’s latest bank lending survey, published on Tuesday, showed that credit conditions are easing and demand for loans is on the increase.
“The first month of QE went smoother than some market participants had feared,” said Brzeski.
“We expect the ECB to keep policy rates on hold and do not expect any new measures or changes to the current purchase programme from the ECB meeting. But we expect a fairly dovish tone from Draghi,” said Natixis economist Johannes Gareis.
On the data front, things appear to be moving in the right direction. Inflation was less negative in March than it was the previous month and sentiment indicators are all pointing upwards.
That may provide QE opponents at the ECB governing council with ammunition in calling for an early end to the programme.
Last week, the German business daily Handelsblatt asked “When does the exit begin?”
ECB executive board member Yves Mersch also addressed the issue of a possible “overdosing” on QE recently.
He insisted that if inflation expectations grew above the ECB’s current forecast of 1.8 percent in 2017, “it would, of course, be appropriate to consider whether we need to adjust our plan”.
The latest data, however, shows that risk is still far off.
Prices in the 19-nation single currency bloc were down 0.1 percent in March, less than the drop in January and February but still a long way from the ECB’s target of just under 2.0 percent annual inflation.
“Against the background of a better eurozone outlook, some have argued that the ECB will taper QE before September 2016,” said Gareis.
But “we have some doubts and we do not expect the ECB to taper asset purchases any time soon,” he said.
UniCredit economist Marco Valli agreed.
“We continue to see a low probability that QE will be stopped before September 2016,” he said.
Beijing, March 25, 2015 (AFP)
The inexorable decline of the single currency offers ambitious Chinese firms a bargain buffet of eurozone business, analysts say, with this weekend’s multibillion deal for Italian tyremaker Pirelli only the latest course in an acquisition binge.
Less than a year ago the euro was worth nearly $1.40 on international markets. Earlier this month it stood at less than $1.05, down by a quarter as the European Central Bank embarks on a massive stimulus programme while the US Federal Reserve is widely expected to start raising interest rates.
By the standards of first-world forex markets it ranks as a collapse.
It has recorded a similar performance against China’s yuan currency, falling from almost 8.7 yuan in May to bottom at less than 6.6 yuan. The yuan trades in a tight range against the dollar.
As the unit weakens it makes eurozone acquisitions cheaper for outside buyers and its biggest headline impact may come in terms of Chinese overseas investment, which surged past $100 billion for the first time last year.
“For Chinese going into Europe it can’t get better than this,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China (EUCCC).
“Chinese companies are eager to go outside China as its own domestic economy is slowing down,” he told AFP, adding that profit margins in the rest of the world are higher than in China, according to EUCCC member surveys.
“So I can only expect a major push from Chinese companies to buy into the European company landscape.”
The latest deal came with state-owned chemical giant ChemChina agreeing to buy out the largest shareholder in Pirelli, valuing the purveyor of Formula One accessories and racy calendars at just over seven billion euros — now about 48 billion yuan, or 13 billion yuan less than in May.
– ‘Itching to invest’ –
The euro has flirted with parity against the dollar in recent weeks — for the first time since 2002 — and while the euro rose to $1.0964 on Tuesday it remained within striking distance of more-than-dozen-year lows.
China’s overseas direct investment pushed sharply higher in February, the commerce ministry said, driven by oil giant China National Petroleum Corp putting nearly $3 billion into a Dutch transaction.
“The continued slumps in the euro’s value against the dollar have led the price of eurozone assets to fall, creating an opportunity for Chinese companies to invest and carry out mergers and acquisitions there,” said commerce ministry spokesman Shen Danyang.
Beijing has accrued the world’s biggest foreign exchange reserves and has been running record monthly trade surpluses, with the state-run China Daily newspaper saying in an editorial the country “is itching to invest overseas”.
Private companies are also taking a seat at the table, with billionaire Wang Jianlin buying 20 percent of Spanish league champions Atletico Madrid in January, the first mainland Chinese investment in a top European football club.
Conglomerate Fosun declared victory in February in its long takeover battle for French holiday resorts group Club Med, having repeatedly raised its offer to 939 million euros.
Klaus E. Meyer, a professor at the China Europe International Business School in Shanghai, said Chinese investing abroad generally take a long-term view and are driven by acquiring technology or brands they can exploit domestically.
“The fact that assets in Europe are now cheaper because of the weaker euro means that this sort of asset-seeking foreign investment is likely to increase,” he said.
The Pirelli deal was met with dismay but resignation in Italy, and Derek Scissors of the Washington-based American Enterprise Institute said that given its economic travails, the eurozone will not look askance on inflows from China.
“Most Chinese companies are now sophisticated enough to back off of outright acquisitions when there is political sensitivity, buying smaller stakes in high-profile companies,” he added.
Chinese firms may also already be taking advantage of the weaker euro to raise cheaper capital overseas.
Four China-based non-financial companies issued the equivalent of $2.8 billion in euro-dominated bonds in January and February, according to Dealogic data, more than the $1.9 billion raised in the whole of 2014.
– Trade imbalance –
Nonetheless the consequences of the euro’s decline are not all one-way.
The 28-member EU is China’s biggest trade partner while China is the EU’s second-largest, and China ran a surplus of $126.63 billion last year with the full group, nine of whose members do not use the single currency.
But the euro’s decline makes eurozone goods cheaper elsewhere and Chinese products comparatively dearer.
“When it comes to trade certainly European exporters are going to be very happy as their products are going to be more competitive,” Wuttke said, while Chinese exporters will face tougher times.
“And so I expect actually that this trade imbalance that we have will narrow significantly as we go forward,” he said.
JAKARTA. Gonjang ganjing perkara utang di Eropa memicu euro (EUR) rontok. Mata uang 18 negara anggota Uni Eropa ini memasuki tren bearish jangka pendek. Mengutip Bloomberg, Selasa (10/3) pukul 16.45 WIB, pasangan EUR/USD turun 0,96% menjadi 1,0751. Pairing EUR/JPY merosot 0,41% ke level 130,93. Namun, pairing EUR/AUD naik tipis 0,06% ke 1,4098.
Research and Analyst PT Monex Investindo Futures Agus Chandra menduga, pasangan EUR/USD akan tertekan di jangka pendek. Euro terkapar akibat krisis utang Yunani. Negeri Para Dewa ini belum mencapai kesepakatan perpanjangan utang dengan kreditur. “Ketidakpastian ini merebak di tengah rencana kenaikan suku bunga Bank Sentral AS,” kata Agus.
Analis dan Direktur PT Astronacci International Gema Goeyardi menilai, pasangan EUR/JPY melemah karena euro di posisi tidak menguntungkan. Selain utang Yunani, euro juga diwarnai sentimen negatif menyusul langkah Bank Sentral Eropa membeli obligasi negara di Eropa.
Sementara yen justru sedang positif, lantaran ekonomi Jepang masih bagus. Pada Senin (9/3), neraca berjalan Januari 2015 surplus ¥ 1,06 triliun. Meski meleset dari prediksi, surplus ¥ 1,16 triliun, tapi masih di atas Desember lalu, yakni ¥ 850 miliar. “Selama belum ada perubahan fundamental ekonomi Eropa, tren pairing EUR/JPY masih bearish untuk beberapa waktu ke depan,” prediksi Gema.
Sementara, analis PT Esandar Arthamas Berjangka Tonny Mariano menyebutkan, penguatan pasangan EUR/AUD lebih akibat investor melakukan aksi beli saat posisi sudah di level bawah.
Asal tahu saja, pairing ini sudah merosot sejak 3 Februari ke level terendah enam tahun. “Kenaikan ini bersifat sementara. Euro berpotensi turun lagi, karena efek program pembelian obligasi dan data ekonomi Eropa kurang mendukung,” prediksi Tonny.
Sumber : KONTAN.CO.ID
Athens, March 5, 2015 (AFP)
Cash-strapped Greece had been hoping that the European Central Bank — which is about to pump billions into the eurozone economy — would help ease its torment, but so far the ECB has been markedly reluctant to come to its aid.
These are the key issues over which they are at loggerheads:
– Holder of the purse strings –
The bank — whose governors meet on Thursday — is one of the big three institutions, along with the IMF and the European Commission, who must make sure Greece sticks to the terms of its 240-billion-euro ($265-billion) bailout, and the extension that the country’s new leaders have just agreed.
But new promises of more spending by Greece’s left-wing government to tackle the “humanitarian crisis” in the country got a chilly reception from the ECB’s president Mario Draghi.
“It is far from certain that the bank is ready” to give Greece the helping help that it expects with its creditors, said economist Carsten Brzeski of ING bank.
Athens would like to borrow more money in short-term bonds called treasury bills, its only real means of raising cash on its own.
But neither the ECB nor the other two members of the “troika” that hold Greece’s purse strings are ready to raise the ceiling of 15 billion euros it is allowed to raise in this way.
– Relaxing the rules? –
The governors of the ECB halted in February an exception that temporarily allowed Greek banks to refinance themselves from the ECB in Frankfurt using Greek debt as a guarantee.
As long as the ECB thinks Greece is not doing enough to push through the reforms it would like, this source of financing is unlikely to be restablished.
Since this source of cash was cut, Greek banks have had to borrow from the Bank of Greece at more costly rates through a mechanism called Emergency Liquidity Assistance.
While the debt is formally on the books of the Bank of Greece, the ECB still controls the amount of funds that can be used in this manner, and this too will be on the table on Thursday.
To make matters worse for Athens, the ECB has asked Greek banks to stop buying Greek treasury bills on which the government has so relied, cutting off another lifeline.
– Greece wants what it’s ‘owed’ –
Greek Finance Minister Yanis Varoufakis claims that the ECB owes Greece 1.9 billion euros and wants to use the money to make the next repayment to the IMF at the end of March.
The sum is the money the bank has made on Greek debt it bought up at the height of the crisis, along with the sovereign debt of other struggling eurozone countries.
Although it was agreed in 2012 that money made on Greek debt would go back to Greece, Draghi said last week that first Athens “must conform to the programme”. The money was not the bank’s to give, he claimed, because the profits have already been redistributed to eurozone central banks.
But Varoufakis insisted this was “the Greek people’s money” and demanded to know why “why we are being evaluated” before it is given back.
– ‘No debt restructuring’ –
It is out of the question to restructure the 27 billion euros of Greek debt the ECB holds, one of its directors, Benoit Coeure, said in January.
But Varoufakis claimed that if the debt had been held by private banks, a part of it at least would have been written off during a restructuring in 2012.
Now, however, Athens must pay these obligations as they come due, with 6.7 billion euros falling due to the ECB this summer.
– Athens gets nothing –
While the ECB is about to pump billions into the flagging eurozone economy through “quantitative easing” — buying up at least 1.1 trillion euros of public and private debt — ironically Greece cannot for now benefit from its largesse.
The bank’s rules dictate that it cannot hold more than a third of the sovereign debt of any country. So until Greece pays off the debts that fall due in the summer, it will be excluded from the massive bid to kickstart growth.
Hong Kong, Feb 17, 2015 (AFP)
The euro weakened Tuesday after the showdown debt talks between Greece and its creditors collapsed, raising the prospect the country will be dumped out of the eurozone.
However, many equity markets were unfazed by the trouble in Europe as trade begins to wind down in several Asian bourses ahead of the Lunar New Year holiday at the end of the week.
Tokyo fell 0.24 percent by lunch and Sydney shed 0.40 percent but Hong Kong was 0.11 percent higher, Shanghai added 0.75 percent and Seoul was up 0.17 percent.
Taipei and Mumbai are closed for public holidays.
The closely watched meeting Monday broke down without agreement on Greece’s debt after Athens refused eurozone finance ministers’ demand that it must apply for an extension to its bailout.
Eurogroup head Jeroen Dijsselbloem said the country had the rest of the week to make the request, with the 240 billion euro ($270 billion) lifeline expiring at the end of the month.
But an Athens source dismissed the demand to stick to its current bailout as “absurd”.
Greece’s new far left-led government swept to power last month on a platform of overhauling the terms of the austerity-laden financial aid package, which it says has crippled the economy.
Finance Minister Yanis Varoufakis is looking for a six-month bridging loan to give Greece time and financial help to negotiate a new deal.
However, the 18 other eurozone nations, led by Germany, say any changes must pass within the current programme.
The breakdown hit the euro, which sank to $1.338 and 134.18 yen from $1.1390 and 134.53 yen in London.
It is also sharply down from the $1.1421 and 135.43 yen levels earlier Monday in Tokyo.
“Greece and Germany came to the talks with different preconditions, and the lack of compromise is weighing on the euro,” Yuji Saito, director of foreign exchange at Credit Agricole SA in Tokyo, told Bloomberg News.
The dollar bought 118.34 yen against 118.47 yen.
US markets were closed Monday for a public holiday.
Oil prices moved higher after key crude producer Kuwait signalled that the recent rise in oil prices would hold, while resurgent violence in Libya also provided support.
US benchmark West Texas Intermediate for March delivery rose 12 cents to $52.90 while Brent crude for April gained 30 cents to $61.70.
Gold fetched $1,232.27 an ounce, against $1,233.33 on Monday.
Athens, Feb 11, 2015 (AFP)
Eurozone finance ministers and Greece’s new left-wing government failed to reach a deal Wednesday to renegotiate the country’s huge bailout, a Greek government source said.
“(They) haven’t made a deal. The extension of the agreement has not been accepted,” the source said, adding that talks would continue with the aim of “a mutually beneficial agreement” for Greece’s economy.
Frankfurt, Feb 9, 2015 (AFP)
Germany, Europe’s biggest economy, clocked up a record volume of exports and attained its largest ever trade surplus, data compiled by the federal statistics office Destatis showed on Monday.
Germany exported a record 1.134 trillion euros ($1.28 trillion) worth of goods last year, pushing its trade surplus to a record 217 billion euros, Destatis calculated in a statement.
Rome, Feb 3, 2015 (AFP)
Greece on Tuesday floated proposals to ease the economic pressure generated by its massive foreign debt, boosting stock markets as hopes rose for a deal with its European Union partners.
Italian Prime Minister Matteo Renzi said he believed an accord on the debt terms was possible, and promised Greek counterpart Alexis Tsipras, whom he met in Rome, of Italy’s support in trying to achieve it.
“There has to be change in Europe,” Tsipras said. “We have to put social cohesion and growth before the policies of poverty and insecurity.”
Renzi echoed the call for more growth-orientated policies but pointedly steered clear of any comment on the detail of Greece’s proposals, which he said would be discussed by EU leaders next week.
“The world is calling on Europe to invest in growth, not austerity,” Renzi said, before joking that the election of Tsipras was a “blessing” because it ensured he was no longer Europe’s number one “dangerous lefty”.
The press conference finished on a light-hearted note with Renzi presenting Tsipras with an Italian tie.
Tsipras — whose fondness for open-necked shirts is often highlighted as a badge of his anti-establishment beliefs — promised to wear it when “we finally find a viable solution.”
– Debt swaps not haircuts –
Greek Finance Minister Yanis Varoufakis is pushing the idea of debt swaps that would avoid the need for creditors to accept ‘haircuts’ on the country’s 315-billion-euro ($361-billion) foreign debt, while easing the monthly financing burden on the Athens government.
He said Greece’s ideas would be put to eurozone finance ministers next week ahead of the summit of EU leaders.
Varoufakis heads to Frankfurt Wednesday for talks with European Central Bank officials, who are reported to be opposing a pivotal part of his plan: a request for bridging finance needed to keep the country solvent until June.
According to the Financial Times, the ECB’s opposition could lead to Athens running out of cash at the end of February — a suggestion that may spook markets as much as Tuesday’s developments cheered them.
In its Wednesday edition, the FT reported, citing officials involved in deliberations, that the ECB will refuse Varoufakis’ suggestion of raising 10 billion euros in short-term Treasury bills because it refuses to go above an existing cap of 15 billion euros on such debt issuance.
The Greek minister will have another tricky encounter on Thursday, when he will meet German counterpart Wolfgang Schaeuble in Berlin in what will be a key test of whether his proposals have any chance of being accepted by the EU’s leading powers.
– Athens stocks soar –
The Greek initiative was interpreted by markets on Tuesday as reducing the likelihood of any unilateral debt cancellation, which would entail a risk of reigniting the kind of financial turmoil that has severely damaged leading economies since 2007.
Led by the Athens bourse, which closed up more than 11 percent, stock markets across Europe rose on the news, as did Wall Street.
“After a week of trading insults and threats it looks like the eurozone paymasters and the new Greek government are finally ready to compromise,” said Kathleen Brooks, research director at trading site Forex.com.
The Greek government denied the debt swaps proposal represented a climbdown from election promises to force a renegotiation of its debt terms.
“If we need to use euphemism and the tools of financial mechanisms to get Greece out of its debt-slavery, we will do it,” a spokesman said.
The Greek plan would involve swapping some of the country’s current bonds for new ones under which repayments would be linked to economic growth rates.
Greek bonds owned by the European Central Bank would become “perpetual”, or open-ended, removing the need to make regular repayments at fixed intervals.
– Germany unimpressed –
German Chancellor Angela Merkel was non-committal about the Greek proposals. “It is clear the Greek government is still establishing its position,” she said. “We await their proposals and there will be time enough to discuss them.”
Privately, German officials said there was “little room for manoeuvre” on the debt conditions.
Greece’s debt is worth 1.75 times the country’s entire annual economic output. Because of severe spending cuts, the government now raises substantially more in taxes than it pays to fund services, but that surplus is more than wiped out by the cost of servicing the debt.
US President Barack Obama on Sunday appeared to side with Greece by warning of the dangers of “squeezing” an economy in the grip of recession.
– Next stop Paris –
Tsipras has dismissed the “troika” system monitoring Greece’s economy — the International Monetary Fund, European Commission and ECB — as lacking legal status.
But he also says Greece has no intention of not meeting its outstanding obligations to the bailout creditors.
The new premier is due in Brussels on Wednesday and will also visit Paris in search of support from France, the eurozone’s second-biggest economy and, like Italy, a critic of EU ‘austerity’.
New York, Jan 23, 2015 (AFP)
The euro fell again against the dollar Friday, hitting a new 11-year low a day after the European Central Bank unveiled a vast bond-buying program to revive the eurozone.
The currency market also nervously awaited the outcome of Greece’s general elections Sunday, with polls showing the leftist anti-austerity Syriza party would win, posing a new challenge to the bailout program from the European Union and the International Monetary Fund.
The euro, which fetched $1.1359 late Thursday, tumbled to $1.1115, the lowest level since September 2003.
The ECB’s announcement Thursday of a 1.14-trillion-euro ($1.27-trillion) bond-buying program, or quantitative easing (QE), aims to stimulate growth and avert deflation after the nearly stagnant eurozone saw prices drop in December for the first time in five years.
ECB chief Mario Draghi said the program would continue at least through September 2016.
Analysts said the euro could slide further toward dollar parity as the ECB announcement underscores a growing policy divergence with the US Federal Reserve, which exited its QE program in October and is considering an interest rate hike this year.
“The key factor is that the ECB’s extension of QE is open-ended,” said RIA Capital Markets analyst Nick Stamenkovic.
“In other words, if euro area inflation fails to rise in coming months then further purchases are likely as it attempts to restore price stability over the medium-term.”
But with the Fed looking set to raise interest rates from near zero, where they have been pegged since late 2008 amid the financial crisis, in mid-2015, “the euro looks increasingly likely to reach (dollar) parity by year-end, if not sooner,” he said.
The Fed’s policy arm, the Federal Open Market Committee, meets on Tuesday and Wednesday.
Kathy Lien of BK Asset Management said that part of the dollar index’s more than five percent gain since the beginning of the year reflected the positive outlook for the US economy, which is enjoying relatively strong growth compared with other major economies.
“The main reason why the dollar is performing so well is because central banks around the world are in a race to ease,” Lien said, citing the Bank of Canada’s quarter-point rate cut, the ECB’s QE and dovish minutes from the Bank of England monetary policy meeting.
<pre> 2200 GMT Friday Thursday
EUR/USD 1.1208 1.1359
EUR/JPY 132.03 134.63
EUR/CHF 0.9876 0.9867
EUR/GBP 0.7476 0.7565
USD/JPY 117.80 118.52
USD/CHF 0.8811 0.8725
GBP/USD 1.4994 1.5016
London/Paris (ANTARA News) – Harga saham-saham Eropa mencapai tertinggi dalam tujuh tahun pada Senin (Selasa dinihari WIB), naik untuk hari ketiga karena saham bank-bank Italia rally terkait prospek perubahan tata kelola perusahaan, dan saham Swiss beranjak dari kerugian beberapa minggu terakhir.
Sentimen pasar secara luas telah didukung oleh ekspektasi-ekspektasi Bank Sentral Eropa (ECB) yang pada Kamis nanti mengungkapkan rencannya membeli obligasi pemerintah untuk mencoba melawan deflasi dan menghidupkan kembali pertumbuhan, kata Reuters melaporkan.
“Orang-orang telah membeli sebelum ini,” kata Justin Haque, seorang broker di Hobert Capital Market dikutip Reuters.
Saham-saham dalam bank koperasi Italia naik terpengaruh keputusan rancangan pemerintah yang akan menghapus aturan pemberian satu hak suara untuk setiap pemegang saham, terlepas berapa pun jumlah kepemilikan saham mereka.
Popolare Milano, Banca Popolare dell”Emilia Romagna, Banco Popolare, dan UBI naik antara 8 persen hingga 14 persen.
Bank Swiss Julius Baer naik tertinggi di antara saham-saham terbesar Eropa, naik 5,9 persen. Bank swasta itu mengatakan tidak akan menderita kerugian akibat penurunan dalam dua hari perdagangan setelah keputusan Swiss National Bank soal mata uang franc.
Indeks patokan Swiss, SMI, naik 3,2 persen pasca-terkoreksi 13 persen minggu lalu, setelah keputusan mengejutkan bank sental membuat franc melonjak.
Indeks saham-saham utama Eropa, FTSEurofirst 300, naik 0,2 persen menjadi 1.409,92 poin, setelah menyentuh level tertinggi sejak awal 2008 pada 1.418,11.
Kenaikan indeks itu terpangkas tipis sebelum penutupan, dengan saham-saham minyak dan sumber daya dasar yang menghambat kenaikan.
Analis memperkirakan ECB akan mengumumkan rencananya membeli sekitar 500-600 miliar euro obligasi pemerintah, meskipun tetap ada keraguan mengenai “dandanan” (make-up) pembelian dan bagaimana beban akan dibagi antara ECB dan bank-bank sentral nasional.
Ekspektasi bahwa ECB akan mulai membeli obligasi pemerintah, menurunkan imbal hasil obligasi tersebut dan mendorong beberapa investor beralih ke aset-aset berisiko seperti ekuitas, telah membantu saham Eropa mengungguli Wall Street bulan ini, demikian mengutip Reuters.
Sumber : ANTARANEWS.COM
JAKARTA — Bursa Eropa menguat ke level tertinggi sejak 2008 seiring penguatan sektor minyak menutupi penurunan saham di Swiss.
Indeks Stoxx Europe 600 naik 1,1% ke level 352,4 pada penutupan perdagangan Jumat (16/1/2015).
“Ini sangat sulit untuk melihat arah pergerakan pasar saat ini,” ujar Teis Knuthsen, Chief Investment Officer Saxo Bank A/S’s Private-Banking Unit Hellerup, seperti dikutip Bloomberg, Senin (19/1/2015).
Indeks energi naik paling kencang diantara 19 kelompok industri lainnya. Saham Total SA dan BG Group Plc naik lebih dari 3%.
Source : Bloomberg
JAKARTA. Dollar Amerika Serikat (USD) mendapat sentimen positif dari keputusan Pengadilan Eropa, yang menyetujui Bank Sentral Eropa (ECB) memperlonggar kebijakan moneter. Tapi pelaku pasar juga perlu mencermati kebijakan terbaru Swiss National Bank (SNB).
Data Bloomberg, Kamis (15/1) pukul 16.20 WIB menunjukkan, pasangan EUR/USD melemah 0,29% menjadi 1,1755. Ini adalah level terendah sejak pertengahan Juli 2014. Sementara pairing USD/JPY menguat 0,13% menjadi 117,48. Tapi USD keok oleh dollar Australia (AUD) 0,9% ke level 0,8233.
Ariston Tjendra, Analis Monex Investindo Futures, mengungkapkan, otot USD kuat lantaran sentimen baru terkait keputusan Pengadilan Eropa yang menyetujui kebijakan stimulus ekonomi ECB pada tahun 2012 lalu. Keputusan Pengadilan Eropa ini dapat menjadi legal standing bagi ECB melakukan pelonggaran kebijakan moneter demi mengerem laju deflasi.
“Jika jadi diputuskan pada rapat ECB 22 Januari mendatang, ini positif buat USD tapi buruk buat EUR,” kata Ariston. Hasil keputusan pengadilan Eropa ini sedikit mengubur sentimen negatif dari angka penjualan ritel AS yang buruk.
Namun Tonny Mariano, Analis Harvest International Futures, menilai, pasar tidak terlalu melihat penurunan penjualan ritel. Pasalnya, pasar melihat kondisi ekonomi AS stabil sehingga The Fed bakal mendongkrak suku bunga.
Nanang Wahyudin, Analis SooGee Futures, mengatakan, AUD memang mendapatkan tenaga dari data pengangguran Aussie yang lebih baik dari perkiraan sejumlah pihak. Potensi rebound AUD akan tetap terjaga setidaknya dalam 1-2 hari ke depan.
Pelaku pasar sebaiknya juga mencermati langkah SNB mengakhiri kebijakan melindungi ekonomi dari krisis utang kawasan euro. Suku bunga SNB turun menjadi minus 0,75% dari sebelumnya minus 0,25%. Akibatnya, mata uang Swiss Franc melonjak. Kemarin, Indeks Bloomberg Dollar Spot turun 0,4%.
Sumber : KONTAN.CO.ID
LONDON. Hingga akhir tahun 2014, ancaman deflasi masih membayangi pemulihan ekonomi di kawasan Uni Eropa (UE). Pada Desember 2014, harga barang di daratan Eropa turun 0,2% dibandingkan bulan November 2014. Ini adalah deflasi pertama UE sejak mengalami krisis finansial pada tahun 2009 silam.
Pemicu utama deflasi adalah penurunan harga bahan bakar yang terseret anjloknya harga minyak dunia. Mengacu data sementara Eurostat, harga energi turun 6,3% pada Desember 2014, dibandingkan tahun lalu (year on year). Sementara, harga makanan, alkohol dan tembakau stagnan, setelah naik tipis 0,5% pada November 2014. Harga jasa naik sekitar 1,2% dibandingkan Desember 2013.
Andai harga energi dihitung terpisah, UE inflasi 0,6%,. Angka ini stagnan dengan realisasi inflasi pada November 2014. James Ashley, Kepala Ekonom Capital Economics, menilai, penurunan harga minyak tidak bisa disalahkan. “Ini bukti bahwa kebijakan moneter dan fiskal belum tepat,” ujar dia, mengutip BBC, Rabu (7/1).
Sumber : KONTAN.CO.ID
Jakarta — Nilai tukar euro jatuh ke level terendah sejak Maret 2006 pada sesi pertama perdagangan di pasar Asia, Senin (5/1).
Pelemahan ini sebagai imbas dari berlanjutnya spekulasi European Central Bank akan segera meluncurkan program pelonggaran kuantitatif (QE) untuk membatasi risiko deflasi.
Selain itu, pasar juga merespons negatif terhadap masa depan Yunani yang belum juga menampakkan tanda pemulihan.
Para pelaku pasar melihat euro akan jatuh ke level US$1,1864, setelah sempat menembus level psikologis US$1,20.
NEW YORK, Jan 02, 2015 (AFP)
The euro sank to $1.20 Friday, its lowest level against the greenback since May 2010, as European Central Bank chief Mario Draghi reiterated the possibility of more stimulus coming.
Draghi said in an interview published in the German business daily Handelsblatt that deflation remains a threat and that the ECB needs to be prepared to counter it.
“If inflation is too low for too long, then it can happen that people will bet on a further fall in prices and postpone spending. We haven’t reached that point yet. But we have to prepare for that risk,” Draghi said.
But the risk that the central bank will not be able to move inflation higher “has increased compared to six months ago,” Draghi said.
As a result, the ECB “is currently technically preparing to adjust the size, speed and composition of our measures at the start of 2015, should it become necessary,” he said.
Both currencies meanwhile pulled up against the yen, which had strengthened on its safe-haven appeal ahead of the new year holiday.
<pre> 2200 GMT Friday Wednesday
EUR/USD 1.2002 1.2097
EUR/JPY 144.58 144.87
EUR/CHF 1.2019 1.2027
EUR/GBP 0.7829 0.7765
USD/JPY 120.46 119.76
USD/CHF 1.0002 0.9942
GBP/USD 1.5330 1.5576
MADRID, Dec 30, 2014 (AFP)
Madrid is famed worldwide for its wild nightlife — but locals say recession, unemployment and higher sales tax are changing partying habits in the Spanish capital.
“There’s no denying the crisis. It affects the whole country, and Madrid’s bars and nightclubs are no exception,” said Dani Marin, joint owner of Costello, one of the city centre’s hundreds of drinking establishments.
On a Friday night around Christmas, its basement throbs with live rock music, while upstairs drinkers chat leaning on the bar to the mellower rhythms of a DJ.
It is a typical bar scene in a country devoted to partying out on the town — but people in the business say Spaniards are spending less on that pastime.
“Consumption has fallen a lot,” said Marin. “Sometimes the bar still gets as busy and lively as it was six years ago, but overall our revenues are down by about half.”
After the death of longtime dictator Francisco Franco in 1975 the Spanish capital responded to the country’s newfound freedom with an explosion in creativity in theatre, music and nightlife dubbed “La Movida Madrilena”, which loosely translates as the Madrid scene.
Times have changed, however. The economic crisis that erupted in 2008 due to the collapse of a decade-long property bubble altered things.
“Madrid used to be a city like Berlin or London are now, full of opportunities. It used to have more on offer,” said one bar-goer, Juan Canadas, strolling in Madrid’s trendy Malasana district. “It has lost a bit of its magic.”
The crisis drove up unemployment to a current rate of 24 percent and prompted tough economic austerity measures by the conservative government.
These included raising sales tax from eight to 21 percent in 2012, which has cramped consumption.
“I love Madrid. At our age you find everything you want,” said another festive local, Quiara Lopez, a student of 20, out for a night on the town with a friend.
“You have all kinds of places to go and you can do what you want. But you have to watch what you spend.”
– Shorter weekends –
With 75,000 people working in them, Madrid’s bars, casinos, theatres, restaurants and nightclubs are crucial for the region.
They generate up to 7.5 billion euros ($9.1 billion) in revenues a year, about 4.7 percent of the region’s economy, according to some estimates.
The decline in nightlife has erased nearly one percentage point from the region’s output, said Vicente Pizcueta, spokesman for a Madrid leisure business association.
The drop in business is striking.
“Thursday used to be like part of the weekend,” with the bars packed, said Marin. “Now it is just another day of the week. That is the most remarkable change we have seen.”
Madrid city hall insists it is working to support restaurants and bars, which it says are two of its main tourist draws.
With fewer drinkers coming out to play, bar owners are adapting to survive.
“We have been reinventing ourselves, doing all sorts of things,” German Hughes, manager of the La Palma cafe, which has been open for 20 years.
“We used to have three concerts here a week. Now we have five, plus two book launches and a play. We are putting on more activities so that people have more incentives to come.”
After six hard years, figures suggest that consumer spending is slowly taking off again in Spain. As the economy gradually heats back up, bar owners hope this city’s nightlife will do the same.
“Madrid has changed enormously since the Movida,” said Hughes. “But we who work in nightlife are continuing to fight. We continue to believe that like everything in life, this is part of a cycle that soon will turn better.”
BERLIN, Dec 18, 2014 (AFP)
German business confidence rose again in December, the Ifo economic institute said Thursday, as the prospects for Europe’s biggest economy grew sunnier.
Auspicious factors including the tumbling price of oil and the weak euro sent the Ifo institute’s closely watched business climate index up to 105.5 points this month from 104.7 points in November, the think tank said.
“The outlook for the months ahead continued to brighten,” Ifo chief Hans-Werner Sinn said in a statement.
“Dropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy.”
Ifo calculates its headline index on the basis of companies’ assessments of current business and the outlook for the next six months.
The sub-index measuring current business held steady at 110.0 points compared to last month, while the outlook sub-index climbed 1.3 points to 101.1 points.
The data came on the back of a survey released Tuesday showing a sharp rise in investor sentiment in Germany.
The widely watched investor confidence index calculated by the ZEW economic institute jumped by 23.4 points in December, after increasing for the first time this year in November.
Analysts were encouraged by the improved Ifo index following a positive turnaround in November from long months of decline.
“German business confidence confirmed the decent rebound of the economy in the final quarter of the year,” said Carsten Brzeski of ING-Diba bank in Frankfurt.
He said that the worst crises threatening the economy — the Ukraine conflict and eurozone weakness — had eased of late.
But Brzeski said “complacency” undermining a drive for new economic reforms, Russia’s economic woes and Germany’s over-reliance on exports all posed risks.
Heinrich Bayer, a Postbank analyst, said the Ifo report indicated that German domestic demand “would stay on course for growth while the pressures and insecurities weighing on exports are losing relevance”.
Christian Schulz of Berenberg Bank said the survey “heralds the end of the economic rough patch”.
“Resilient export expectations, a strong competitive position, receding uncertainty over Russia’s action in Ukraine and cheap oil boost the outlook for Germany’s industrial backbone,” he said.
“We expect robust consumption growth to continue in 2015, joined by an investment rebound.”
Economist Jonathan Loynes of Capital Economics in London said that the favourable euro exchange rate and the likelihood of quantitative easing stimulus measures by the European Central Bank appeared to be offsetting concerns about Russia and fresh political instability in Greece.
However he said that the Ifo data was “consistent with only very sluggish growth in German” gross domestic product.
“While the survey provides some comfort that the German economy is still growing, it suggests that growth remains well short of the rates required to drive a decent upturn across the eurozone,” he said.
MADRID, Dec 10, 2014 (AFP)
When Spain’s property bubble burst in 2008, the country was plunged into an economic crisis that threw millions of people out of work.
Now after six hard years, and even though hundreds of thousands of properties stand empty, building has restarted in the country.
The decade before the crash saw an all-out building frenzy in the eurozone’s fourth-largest economy. Around 700,000 houses were built each year during the 2000s until the bubble burst, more than in Britain, France and Germany combined.
At the same time municipal and local governments, flush with cash in part from the sale of building licences, undertook massive infrastructure projects, such as Huesca airport in the foothills of the Pyrenees in northeastern Spain, which opened in 2007 and is now mostly empty.
Nearly 1.9 million people worked in the building sector before the economic crisis. Now the sector employs fewer than 700,000.
But in recent months building firms have started hiring again. The sector created nearly 10,000 jobs in November, according to employment ministry figures published last week.
“It is mostly linked to a rise in public works,” said a spokesman for the National Confederation of Construction, which groups together the majority of Spain’s builders.
The tendency should continue next year since Prime Minister Mariano Rajoy’s budget for 2015 — when he faces local and legislative elections — calls for spending on infrastructure projects to increase by around six percent.
“There is a lot of optimism in the construction sector, in part because of the announcements that have already been made by the public works minister,” said Javier Vaca, director of business development at Spanish builder FCC.
The slight uptick in the sector is not limited to public works, with the building of private homes up slightly as well.
“The improvement in investment in the construction sector that has been noticed since the start of the year seems to have continued during recent months,” the Bank of Spain wrote in its latest bulletin at the end of November.
– ‘Inflection point’ –
Among the factors giving the sector a boost are low interest rates, easier household credit, a rise in the number of building permits issued and a return to modest economic growth, said Miguel Cardoso, chief economist at Spain’s second-largest bank BBVA.
“There are a series of factors that make us think that we have reached an inflection point,” he said.
The number of building permits issued in Spain during the first nine months of 2014 rose by 5.7 percent over the same period last year, according to BBVA.
Home building is up despite a huge stock of unsold homes because many of these empty dwellings are not in urban areas like Madrid and Barcelona where the economy is improving at a faster clip and demand is rising, Cardoso said.
Most of the empty new houses are found along Spain’s extensive coastline or in the interior of the country that were intended as holiday homes or secondary residences, he added.
These encouraging signs will not translate into a rise in the construction sector’s turnover this year, however.
Activity in the sector is expected to fall by 2.4 percent in 2014 before finally rising next year, according to a forecast from the Catalan Institute of Construction Technology (Itec).
It predicts activity will rise 1.8 percent next year before growing by 5.0 percent in 2017.
That is good news for a sector that suffered such a huge fall.
“We didn’t plunge into a cave, we fell down to the catacombs,” said Josep Ramon Fontana, a Spanish member of European construction business research group Euroconstruct.
The construction sector, which accounted for about 20 percent of Spain’s economic output in 2007, now represents just 5.0 percent of it, according to Itec.
Foreign investors have started to return to the sector. Mexican telecoms magnate Carlos Slim, the world’s second-richest man, announced last month that he will invest 650 million euros ($800 million) to become the main shareholder in Spanish builder FCC.
“This time the sector is not the cause of economic growth, it is growing because of economic growth,” Cardoso said.
LONDON, Nov 25, 2014 (AFP)
Lingering eurozone stimulus hopes lifted European stock markets on Tuesday, with sentiment buoyed also by upbeat German data and bumper gains elsewhere, dealers said.
London’s benchmark FTSE 100 index closed up just 0.02 percent to 6,731.14 points and the Paris CAC 40 index gained 0.32 percent to 4,382.31 compared with Monday’s close.
Frankfurt’s DAX 30 rose 0.77 percent to 9,861.21 points, as official data confirmed that the German economy grew 0.1 percent in the third quarter, narrowly avoiding a recession.
ECB chief Mario Draghi last week signalled readiness to act quickly to deter deflation, sparking fresh stimulus hopes.
The comments, combined with China’s surprise rate cut, gave markets a shot in the arm on Friday and have continued to boost share prices.
The French market was also lifted by better than expected data on business climate, with the national data institute reporting a three-point rise on the index to 94 although analysts had expected it to come in at 92.
Michelin topped the risers board, soaring 2.61 percent to 74.70 euros.
Credit Agricole was the next biggest gainer with a 2.49 percent jump to 11.12 euros.
“Stocks in Europe have been on a rip since Mario Draghi twice mentioned the prospects of further monetary easing in the eurozone last week and continued higher today” with the latest German data, said Jasper Lawler, an analyst at CMC.
Asian stock markets traded mixed Tuesday after a Chinese rate cut had fuelled a rally in the previous session, while Tokyo played catch-up following a long holiday weekend.
Tokyo rose 0.29 percent and Seoul was slightly higher, while Sydney shed 0.50 percent and Hong Kong slipped 0.21 percent lower.
However on the upside, Shanghai rallied 1.37 percent to close at 2,567.60 — the highest since August 2011 — following a 1.85-percent increase the previous day.
Monday’s surge came on the back of China’s surprise decision last week to slash interest rates for the first time in two years, in a bid to kickstart growth in the Asian powerhouse nation.
– ‘Be good, but not too good’ –
Wall Street stocks edged higher Tuesday in early trade, adding to Monday’s records after the Commerce Department unexpectedly raised its estimate for third-quarter US economic growth.
About 25 minutes into trade, the Dow Jones Industrial Average stood at 17,826.92, up 9.02 points (0.05 percent).
The broad-based S&P 500 gained 1.73 (0.08 percent) to 2,071.14, while the tech-rich Nasdaq Composite Index added 8.56 (0.18 percent) to 4,763.45.
“Where GDP numbers are concerned, it looks like a case of ‘be good, but not too good’, since any sign of overheating in the US is likely to bring the Fed hawks to the fore,” said Chris Beauchamp of the IG consultancy.
In London foreign exchange deals on Tuesday, the euro was trading at $1.2474, up from $1.2439 late in New York on Monday.
The European single currency eased up to 79.35 British pence from 79.21 Monday. The British pound rose to $1.5718 from $1.5704.
In London, shares in Petrofac recovered to 891 pence after the British energy services group saw the price collapse by 26.45 percent on Monday following a gloomy profits warning that blamed slumping oil prices.
JAKARTA investor daily– Isu bahwa Bank Sentral Eropa (ECB) berencana mengeluarkan stimulus moneter (quantitative easing/QE) seperti dilakukan Bank Sentral AS dan Bank Sentral Jepang turut memicu sentimen positif di lantai bursa. Hampir seluruh bursa saham regional menghijau pada perdagangan Senin (24/11). Indeks harga saham gabungan (IHSG) di Bursa Efek Indonesia (BEI) melonjak 29,71 poin (0,58%) ke level 5.141.76.
Investor asing membukukan pembelian bersih (net buy) senilai Rp 142 miliar, sehingga net buy asing secara year to date mencapai Rp 49,3 triliun. Bersamaan dengan itu, rupiah di pasar spot antarbank Jakarta menguat 17 poin ke level Rp 12.129 per dolar AS.
Berdasarkan kurs tengah Bank Indonesia (BI), rupiah menguat ke posisi Rp 12.122 dari sebelumnya Rp 12.161 per dolar AS. Kalangan analis saham dan para pengelolahedge fund memperkirakan isu QE di Eropa bakal mendominasi sentimen di lantai bursa setidaknya hingga ECB mengumumkan angka inflasi, Jumat (28/11). Isu lain yang diperkirakan memengaruhi pergerakan harga saham ke depan di antaranya earning season (musim laporan keuangan emiten) dan window dressing (aksi para pengelola dana dan emiten untuk menaikkan harga saham demi memperbaiki tampilan portofolio).
Kecuali itu, pasar menunggu ‘kejutan’ lain bank sentral Tiongkok yang Jumat lalu (21/11) memangkas suku bunga acuan untuk pertama kalinya sejak Juni 2012. Meski sebagian analis memprediksi ECB kecil kemungkinan mengeluarkan stimulus moneter seperti QE di AS karena akan dianggap melanggar aturan dan bertentangan dengan garis politik di masing-masing negara zona eruo, sebagian analis lainnya yakin ECB akan menempuh kebijakan tersebut. Keyakinan itu muncul karena pertumbuhan ekonomi di Eropa tetap melambat dengan inflasi yang kelewat rendah.
Keyakinan itu semakin kuat setelah Gubernur ECB Mario Draghi pada pertemuan para bankir, akhir pekan lalu, mengisyaratkan ECB akan menempuh langkah-langkah terobosan demi mendorong pertumbuhan ekonomi ke arah yang lebih kondusif. “Kami bakal menggunakan segala cara yang ada dan segenap mandat yang kami miliki untuk mengembalikan inflasi dan pertumbuhan ekonomi ke jalur normal,” ujar Mario Draghi.
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NEW YORK, Nov 24, 2014 (AFP)
The euro strengthened against the dollar Monday after encouraging German economic data showed business confidence in Europe’s largest economy was pulling out of the doldrums.
The Ifo think tank said its closely watched Ifo business climate index for Germany rose for the first time in seven months in November, to 104.7 points from 103.2 points in October.
“The downturn in the German economy has ground to a halt for the moment at least,” Ifo chief Hans-Werner Sinn said.
The turnaround in the index helped to lift eurozone and US stock markets, as well as the euro.
“After a six-month slide, German business confidence staged a strong rebound in November, illustrating that any swan songs on the eurozone’s biggest economy came too early,” said ING DiBa economist Carsten Brzeski.
In the United States, investors awaited Tuesday’s latest government estimate of third-quarter US economic growth. Economists on average expected the Commerce Department’s initial estimate of a 3.5 percent expansion in gross domestic product will be pared to 3.2 percent.
“Revised US GDP data this Tuesday could activate some selling or profit-taking in the US dollar’s outstanding rally,” said Nawaz Ali of Western Union Business Solutions in a research note.
“The US dollar looks set to record its fifth straight month of gains against a currency basket this week; a run last seen in 2010.”
<pre> 2200 GMT Monday Friday
EUR/USD 1.2439 1.2390
EUR/JPY 147.10 145.88
EUR/CHF 1.2025 1.2011
EUR/GBP 0.7921 0.7916
USD/JPY 118.25 117.75
USD/CHF 0.9666 0.9693
GBP/USD 1.5704 1.5651
LONDON, Nov 06, 2014 (AFP)
Europe’s main stock markets shot up and the euro dropped on Thursday as Mario Draghi signalled that the ECB was readying further monetary stimulus measures if needed to combat deflation and stagnation.
London’s benchmark FTSE 100 index picked up 0.38 percent to 6,503.71 points in afternoon trading, while Frankfurt’s DAX 30 won 1.03 percent to 9,411.68 points and in Paris the CAC 40 gained 0.82 percent to 4,242.86.
European equities had been broadly steady after the ECB and Bank of England had announced, as widely expected, that they were keeping interest rates at record lows.
Analysts had also been expecting Draghi to say already announced measures should be allowed to make an impact, but amid growing calls for action he signalled the central bank stands ready.
“The governing council has tasked ECB staff and the relevant Eurosystem committees with ensuring the timely preparation of further measures to be implemented, if needed,” Draghi told reporters.
Draghi’s comments followed a call by the OECD to overcome its reluctance and undertake quantitative easing given the very weak state of the eurozone economy and the risk of damaging deflation as inflation is running at just 0.4 percent.
“This should include a commitment to sizeable asset purchases (‘quantitative easing’) until inflation is back on track,” the OECD said, adding that the purchases could include government bonds, which the ECB has so far shunned due to political sensitivities in Europe about the central bank underwriting government spending.
Purchase of government bonds was the main element of the recently ended quantitive easing programme by the US Federal Reserve, and Japan last week stepped up its asset purchases in order to support growth.
The ECB has been focusing its monetary stimulus, designed to spur lending and investment by buying financial assets, on packages of loans known as asset-backed securities (ABS) and corporate bonds.
The ECB has said it could inject some one trillion euros ($1.25 trillion) into the economy in this manner.
Capital Economics Senior European Economist Jennifer McKeown had said before Draghi’s announcement that the ECB chief might discuss additional asset purchases.
She said that “a supportive stance from Mr Draghi could boost confidence and prompt a further helpful depreciation of the euro in the meantime.”
– Euro slumps –
The euro duly tumbled on Draghi’s comments to $1.2418 from $1.2484 late in New York on Wednesday.
The euro has shed about 7 percent of its value against the dollar in the past six months.
The European single currency slid to 78.06 British pence from 78.15 pence. But the British pound slid to $1.590 from $1.5973 on Wednesday.
On the London Bullion Market, gold prices gained to $1,144.50 an ounce from $1,142 an ounce on Wednesday.
Wall Street stocks Thursday opened slightly higher following a solid report on US jobless claims ahead of Friday’s major jobs report for October.
Five minutes into trade, the Dow Jones Industrial Average stood at 17,510.70, up 0.15 percent. The broad-based S&P 500 added 0.04 percent to stand at 2,024.31 while the tech-rich Nasdaq Composite Index rose 1.56 percent to 4,622.28.
Asian stock markets diverged on Thursday despite a strong lead from a record-high close on Wall Street as traders welcomed the Republican victory in Tuesday’s US midterm elections.
Tokyo slipped 0.86 percent, giving up some of the more than 10 percent gained in the past week on the Bank of Japan’s monetary easing announcement.
Sydney slipped 0.21 percent but Seoul rose 0.26 percent.
Shanghai added 0.27 percent but Hong Kong closed down 0.20 percent.
BERLIN, Nov 06, 2014 (AFP)
Germany plans an additional 10 billion euros ($12 billion) in public investment by 2018, its finance minister said Thursday, amid calls by some EU partners to do more to help the eurozone economy.
“I will propose to the cabinet that we allocate additional means for public investment in the order of 10 billion euros” by 2018, Wolfgang Schaeuble told reporters.
ECB Finds 25 Banks Failed Stress Test Including Paschi
The central bank in Frankfurt identified a 25 billion-euro shortfall ($32 billion) for the region’s lenders, and said 12 of them have now raised enough funds. Eleven banks need more capital, including Monte Paschi with a gap of 2.1 billion euros.
“Although this should restore some confidence and stability to the market, we are still far from a solution to the banking crisis and the challenges facing the banking sector,” Colin Brereton, economic crisis response lead partner at PwC, said in an e-mailed statement. “The Comprehensive Assessment has bought time for some for Europe’s banks.”
That two-part exam, comprising an Asset-Quality Review of balance sheets as of Dec. 31, 2013, and a stress test, forms one pillar of the ECB’s drive to move the euro zone forward after half a decade of financial turmoil by making its impact on the banking system transparent. Banks will have from six to nine months to fill the gaps and have been urged to tap financial markets first.
The ECB’s stress test was conducted in tandem with the London-based European Banking Authority, which also released results today. The EBA’s sample largely overlaps the ECB’s, though it also contains banks from outside the euro area.
The ECB assessment showed Italian banks in particular are in need of more funds as they cope with bad loans and the country’s third recession since 2008. Monte Paschi, Italy’s third-biggest bank, Banca Carige SpA and two other smaller cooperative lenders have a combined 3.3 billion-euro gap that must be replenished because the measures taken this year weren’t sufficient, the Bank of Italy said in a statement today.
“The minister is confident that the residual shortfalls will be covered through further market transactions and that the high transparency guaranteed by the Comprehensive Assessment will allow to easily complete such transactions,” Italy’s finance ministry said in a statement.
Of the 13 banks that the ECB identified as having not raised enough capital, two Greek ones are exempted because their repair plans are already in progress.
“The Comprehensive Assessment allowed us to compare banks across borders and business models,” ECB Supervisory Board Chair Daniele Nouy said in a statement. “The findings will enable us to draw insights and conclusions for supervision going forward.”
The ECB said lenders will need to adjust their asset valuations by 48 billion euros, taking into account the reclassification of an extra 136 billion euros of loans as non-performing. The stock of bad loans in the euro-area banking system now stands at 879 billion euros, the report said.
Italian banks will have to implement the largest asset-value adjustments according to the findings of the review, equivalent to 12 billion euros. Greek banks will have to revalue by 7.6 billion euros, and German banks by 6.7 billion euros, the report showed.
Italian lenders were buffeted by the stress test, suffering a hit to capital of 35.5 billion euros, followed by French banks with 30.8 billion euros. German banks would see capital reduced by 27 billion euros in the stress scenario, the report said.
Under the simulated recession set out in the assessment’s stress test, banks’ common equity Tier 1 capital would be depleted by 263 billion euros, or by 4 percentage points. The median CET1 ratio — a key measure of financial strength — would therefore fall to 8.3 percent from 12.4 percent.
Nouy has said banks will be required to cover any capital shortfalls revealed by the assessment, “primarily from private sources.”
INILAH.COM, Chicago – Pertumbuhan dan aktivitas Bank Sentral Eropa selain mendorong kenaikan sejumlah saham di Wall Street, ternyata juga mendongkrak harga emas.
Emas berjangka di divisi COMEX New York Mercantile Exchange berakhir naik pada Selasa (22/10) atau Rabu pagi WIB, karena laporan menunjukkan bahwa Bank Sentral Eropa (ECB) akan membeli obligasi korporasi untuk mendukung pertumbuhan.
Kontrak emas yang paling aktif untuk pengiriman Desember naik tujuh dolar AS, atau 0,56 persen, menjadi menetap di 1.251,7 dolar AS per ounce.
Emas naik untuk hari kedua berturut-turut karena sebuah laporan, mengutip sumber-sumber anonim, mengatakan ECB sedang mempertimbangkan pembelian obligasi korporasi di pasar sekunder dalam upaya untuk memerangi deflasi dan mungkin pihaknya memutuskan persoalan secepatnya Desember untuk memulai pembelian awal tahun depan.
ECB baru-baru ini telah meluncurkan serangkaian langkah-langkah untuk menambahkan lebih banyak stimulus bagi perekonomian, termasuk target operasi refinancing jangka panjang dan program-program baru untuk membeli langsung sekuritas berbasis aset dan obligasi.
Investor juga mempertimbangkan harapan bahwa Fed AS akan menunda kenaikan suku bunganya untuk beberapa waktu karena kekhawatiran tentang perlambatan pertumbuhan global sedang meningkat.
Ditambah lagi, ada beberapa kabar baik bagi ekonomi AS karena laporan dari Asosiasi Makelar Perumahan Nasional (NAR) yang berbasis di AS menunjukkan penjualan “existing home” (rumah yang sebelumnya telah dimiliki atau rumah yang sudah dibangun sebelumnya selama satu bulan atau dikenal juga dengan “home resales”) naik 2,4 persen pada September ke tingkat tahunan sebesar 5,17 juta.
Angka itu lebih baik dari yang diperkirakan dan juga merupakan laju tercepat sejauh ini di 2014.
Perak untuk pengiriman Desember naik 19,5 sen, atau 1,12 persen, menjadi ditutup pada 17,549 dolar AS per ounce. Platinum untuk pengiriman Januari naik 15,5 dolar AS, atau 1,22 persen, menjadi ditutup pada 1.283 dolar AS per ounce. (AFP)
Bisnis.com, JAKARTA- Perdebatan mengenai perlu tidaknya European Central Bank (ECB) menambah kucuran stimulus kembali memanas, setelah para pejabat tinggi bank sentral berbeda pandangan.
Anggota Dewan Gubernur ECB Jens Weidmann menuturkan ada risiko yang terkandung dalam operasi stimulus bank sentral. Menurutnya, dalam situasi genting seperti saat ini, peluang terjadinya kekeliruan semakin besar.
“Saya agak khawatir dengan bahaya yang ditimbulkan dari program (kucuran stimulus) ini. Bahaya itu adalah, kami membeli aset-aset dan surat utang dengan nilai yang terlalu tinggi (overpriced),” ungkap Presiden Bank Sentral Jerman (Deutsche Bundesbank) seperti dikutip Bloomberg, Sabtu (11/10/2014).
Jika itu terjadi, Weidmann menjabarkan bank sentral akan semakin terbebani dengan resiko yang sebelumnya ditanggung bank umum.
Sementara itu dalam pertemuan dewan gubernur terakhir bulan lalu Presiden ECB Mario Draghi memberi sinyal akan menambah kucuran stimulus sekitar 1 triliun euro (US$1,3 triliun).
Pertengahan pekan ini, International Monetary Fund (IMF) mengestimasi masih terdapat resiko finansial yang menggelayut area euro pascakrisis pada 2008.
Draghi menegaskan berulang-ulang jajarannya siap menambah stimulus jika diperlukan. “Kami siap mengubah besaran dan atau komposisi dari operasi yang kami lakukan, jika memang dibutuhkan.”
Editor : Linda Teti Silitonga
Khawatir Utang Portugal, Saham Eropa Berguguran
Oleh: Charles MS
Pasar Modal – Senin, 10 Januari 2011 | 15:58 WIB
INILAH.COM, London – Saham Eropa jatuh untuk sesi kedua Senin (10/1), dengan sisa-sisa kekhawatiran terhadap utang zona euro dan krisis utang dari musim pendapatan awal AS yang mendorong investor untuk tetap berhati-hati.
Reuters melaporkan FTSEurofirst 300 indeks turun setelah jatuh 0,3 persen pada hari Jumat. “Krisis utang masih merupakan fitur yang melatarbelakangi kejatuhan saham. Kami melihat beberapa kekhawatiran akibat bunga utang yang terlalu besar yang harus dibayar Portugal dalam waktu dekat. Beberapa negara lain juga akan mendekati pembayaran utang mereka,” kata Keith Bowman, analis perusahaan ekuitas Hargreaves Lansdown.
Sebuah sumber senior di zona euro mengatakan tekanan meningkat kepada Portugal dari Jerman, Perancis dan negara-negara lain agar negara ini mencari bantuan keuangan dari Uni Eropa dan IMF untuk menghentikan penyebaran krisis utang di wilayah tersebut.
Investor juga tengah menunggu hasil pendapatan dari perusahaan aluminium terbesar AS, Alcoa pada Senin malam. Saham tambang merupakan saham terbesar yang turun akibat harga tembaga yang turun tajam. Stoxx 600 Eropa, indeks Bahan Dasar juga jatuh, sedangkan Xstrata turun. Saham Danisco naik 26 persen setelah perusahaan kelompok bahan kimia US DuPont menyatakan akan membeli perusahaan bahan makanan Denmark dan perusahaan enzim senilai US$5,8 miliar.