Markets suffered another day of wild swings yesterday amid continued concerns over the Greek debt crisis and its effect on the euro.
The latest round of selling was sparked by reports that the French President, Nicholas Sarkozy, had threatened to pull France out of the euro if Germany failed to get onside with a bailout of the heavily indebted Greek economy. The uncertainty was exacerbated when Josef Ackermann, the chief executive of Deutsche Bank, suggested in an interview that Greece might not ever pay back its debts.
The turmoil saw the FTSE 100 ending down 170.8 points at 5262. Across the Atlantic the Dow opened sharply down, while other major European markets finished deeply in the red.
The euro also fell steeply on global currency markets. Against the dollar it dropped under $1.24, to its lowest level since October 2008. The weakness in the euro also meant that the pound gained ground against the single currency, rising nearly 1 per cent, or just over a cent. Since the beginning of 2010, as the debt crisis has worsened, the euro has lost about 13.5 per cent against the dollar.
Yesterday G7 finance ministers held a conference call to discuss the global economic situation and the ongoing crisis. George Osborne, the Chancellor, is understood to have told his counterparts that the Government’s priority is an accelerated outline reduction of Britain’s fiscal deficit. Mr Osborne has promised an emergency budget within 50 days of the new Government taking office.
It came amid speculation that the UK could be the next country to face a speculative attack if the eurozone does stabilise as a result of the Greek bailout. Some commentators have even suggested that France might not be immune from the contagion.
George Buckley, economist at Deutsche Bank, said: “There is still a lot of uncertainty out there and you can’t solve everything with a single package. The coalition looks stable at the moment but there will be disagreements and that has even been recognised by both parties.” He said there was a wider concern throughout Europe: that governments might not act to cut deficits soon enough. “And if they don’t, where do we go next?”
Philip Shaw, economist at Investec, said: “Markets are still concerned that Europe is stalling, and that’s an issue for them, because they are always unsure until some time after governments actually take action to introduce austerity measures and that there is evidence that the measures are actually working.”
Mr Shaw added: “As far as Greece is concerned it is far from clear that it is actually out of the woods. The package covers its financing needs until 2011 but if it fails to implement the [austerity] measures or its economy takes a sharper downturn than was expected, then by next year the country may find it difficult to borrow money at an interest rate that it is prepared to pay.”
Economists say Britain does have several advantages over Greece and other eurozone countries with debt problems such as Spain, Portugal and even Italy, which collectively with Ireland have been given the unflattering acronym of Piigs by economists.
The UK has a floating exchange rate and its debt is much longer-term than Greece. It also has a flexible economy and a stable tax base, which is collected. However, David Buik, partner at BGC Partners, said: “I doubt there is a single person on the planet who can seriously put his hand on his heart and say that he is certain that Greece at the bottom and even the UK can service or repay its debt over the timetables that have been set out. Politicians have simply not been willing to talk about the pain that doing this will inflict.”
Istanbul-born economist Nouriel Roubini says the current turmoil in Greece would not have occurred if the European-Union member had looked east to Turkey and took copied its reform effort after the 2001 crisis. Speaking to businesspeople in Bursa, Roubini says Turkey’s membership in the EU will only strengthen the union and predicts a revival in membership talks
If Greece had followed Turkey’s lead in making financial reforms in 2000-2001, it would not be in such dire straits today, one of the world’s most prominent economists told Turkish business leaders Wednesday in Bursa.
Nouriel Roubini spoke at an event organized by the Automotive Industry Exporters Unions. The renowned economist, dubbed “Dr. Doom” because of his early prediction of the global financial crisis, addressed nearly 400 people, most of whom paid 350 euros to listen to him.
Evaluating the worst global recession since the 1930s, Roubini said when the United States economy sneezed, the world would generally catch a cold, in the latest crisis, however, it had come down with “pneumonia.”
“But the recent news is good,” Doğan news agency quoted him as saying. “The recovery has started. The debate is whether it will be a V-shaped, fast recovery, a U-shaped slow recovery or a W-shaped, double-dip recovery. My opinion is it will be a U-shaped process. This recovery will not be stable and steady.”
Touching on positive economic data coming from the U.S., Europe and Japan, Roubini said newly developing economies will recover faster than Turkey and economies in Asia. He predicted a gross domestic product growth of 3 percent for the U.S., 2 percent in the eurozone, 5 to 6 percent in Turkey and 9 percent in China this year.
“In the second half of the year, the growth rate might slow down in the U.S., dragging average annual growth down to around 2 percent,” he said.
Turkey and other developing markets derived the correct lessons from the 2001 crisis and engaged in structural reforms, Roubini said. “Meanwhile, developed economies [in the West] started to have problems.”
Reflecting on the importance of the U.S. economy in exiting the global crisis, Roubini said the stimulus policies implemented by governments worldwide are of crucial importance, as there will be trouble if they are implemented for too long or if they are curtailed too soon.
Drama in Greece
The reason the Greek drama engulfed eurozone economies is because “it did not implement structural reforms in time” and because of high budget deficits, the economist said.
“The crisis in Greece will create huge problems,” he said. “Some countries might leave the euro. A possible intervention by the International Monetary Fund would only postpone the problem, not solve it. This crisis is a crucial test for the eurozone. If Greece had followed Turkey’s post-2001 reforms, it would not be in this situation today.”
Turkey’s importance in the global economy will increase further, according to Roubini. “But Turkey should diversify in the trade sense,” he said. “It should orient toward new markets. Besides Europe, it should develop trade relations with the Middle East and Asia. These regions will post [remarkable] growth in the following period.”
Turkey is “moving on its path” by taking the necessary lessons from the past, Roubini said. “It is open to foreign investment. Its labor costs are relatively low. It could be a center for financial inflows from Europe to the Middle East. It may be a trade center between the east and the west. You have a strong workforce, but it needs training.”
Erdoğan’s suggestion ‘might not work’
Reflecting on Prime Minister Recep Tayyip Erdoğan’s suggestion that every member company of the Turkish Union of Chambers and Commodities Exchanges employ one extra worker to overcome unemployment, Roubini said this “might not work.” What the government has to do instead is engage in “structural, fiscal and financial reforms,” he said, according to the daily Hürriyet.
Lord Chancellor’s Department report condemns secret soundings
By Robert Verkaik, Legal Affairs Correspondent
Judges and senior lawyers admit that the system under which they are appointed is riddled with corruption and open to widespread abuse.
Judges and senior lawyers admit that the system under which they are appointed is riddled with corruption and open to widespread abuse.
In a damning report produced by the Lord Chancellor’s Department, it is likened to “the old-fashioned class or caste system” by many of the judges and QCs interviewed.
The findings will deeply embarrass the Lord Chancellor, Lord Irvine of Lairg, who has repeatedly rejected calls to end the “secret soundings”, whereby judges and senior lawyers are consulted on the suitability of judicial candidates.
Responses from 137 sitting judges or senior lawyers showed a “clear consensus” for the appointments processes to be “based on openness, objectivity, and selection on merit rather than patronage”. It is the first detailed research to include judges.
Of the 137 respondents only 10 said no changes were needed to the system. A total of 52 were interviewed face-to-face.
One judge said: “I don’t know what the criteria are for silk… maybe there is a document somewhere that I haven’t seen but it seems to me that it depends on who you know, what committee you sit on rather than anything else. There doesn’t seem to be a system of interview. It seems to be on general reputation and I think that is unreliable.”
Many of those who responded expressed concern that the present system deterred applications from women and the ethnic minorities. Women account for 11 per cent and ethnic minorities for 1.7 per cent of all judges in England and Wales, according to figures from 1999.
A serious concern among those consulted was the domination of an “elite group of chambers” in both London and the regions from which most appointments were made.
One white barrister admitted: “I’m the wrong person to ask about the difficulties in applying for silk. I mean in these chambers usually everyone gets silk, usually the first time of asking and everyone becomes made a judge. It is a sort of ‘golden road’.”
The report’s authors, Kate Malleson, of the London School of Economics, and Fareda Banda, of the School of Oriental and African Studies, said many respondents wanted proper recruitment of under-represented groups.
The report said: “The need for the active encouragement of good candidates and the adoption of processes which are, and can be seen to be, more open and objective were most commonly proposed as ways of improving the accessibility and fairness of the processes.”
However, the authors noted that there was widespread support for efforts by the Lord Chancellor to increase the number of women and ethnic minority judges. One respondent described it as a vicious circle, saying: “Black and Asian barristers don’t get the work because they are considered to be incompetent and because they don’t get the work they are considered to be incompetent.”
The respondents felt that there was a need for a judicial appointment commission with many favouring a broad range of membership including judges, lawyers and civil servants. The authors said that the growing concern about the unrepresentative background of the judiciary had become more acute because of the “ten-fold” increase in the size of the judiciary since the 1970s.
Last year Sir Leonard Peach produced a report on the process by which judicial and silk appointments are made, commissioned by the Lord Chancellor.
Avustralya’da eski Labor milletvekilerinden Tayfun E. Eren dostumuzun hasmı ve Türk davasına 1999’dan beri aktif bir şekilde sürekli köstek olan Dollis ile ilgili arkaplan aşağıda… En son Assyrian “Genocide” ve Pontus konusunu planlayan ve yürürlüğe sokan kişi bu Dollis… 1999 dan evvel de Avusturalya meclisinde Yunanistan’ın ‘köstebek’ görevini yapıyordu. Şu anda Papandreou’nun danışmanlarından oluyor kendileri… Ve 1999’dan beri de Yunanistan’ın Dışişlerinde çalışıyor… İlgililerin dikkatine sunulur… Detaylı bilgi isteyenler Turkish Forum’a başvurabilirler…
Saygılar,
Tayfun E. Eren
Haluk Demirbag
—
George Papandreou faces early test after winning Greek elections
Peter Wilson, Europe correspondents
From:The Australian
October 05, 2009 1:57PM
Greek socialist party leader George Papandreou after being elected prime minister of Greece. Picture: Getty Images Source: The Australian
GREEK voters have thrown out their five-year-old conservative government and made centre-left leader George Papandreou prime minister, a post previously held by both his father and grandfather.
Mr Papandreou, a US-born former foreign minister, will follow his father Andreas and grandfather George in heading Greece’s government but he faces urgent economic challenges and a major battle to curb corruption.
AUDIO: Peter Wilson talks to George Papandreou
The PASOK socialist party that his father founded in 1974 is expected to win about 160 seats in the 300-seat parliament, reassuring markets by securing a stable majority at a time when urgent government reforms are needed.
Mr Papandreou pledged to “turn a page” on scandals and economic malaise associated with the outgoing conservative government.
“We stand here united before the great responsibility which we undertake,” Mr Papandreou told cheering supporters in central Athens when the result became clear.
“We have a mandate to turn a new page,” Mr Papandreou said as supporters of his Pasok party celebrated the socialists’ return to power after more than five years in opposition.
“Today we start together the great national effort of placing the country back on a course of revival, development and creation. We don’t have a day to waste.”
He said PASOK had waged “a good fight to bring back hope and smiles on Greeks’ faces … to change the country’s course into one of law, justice, solidarity, green development and progress”.
PASOK won by a larger than expected margin of 44per cent to 34per cent over the conservative New Democracy party.
Mr Papandreou, 57, told The Australian last week that if elected he would make several reforms to help members of the Greek diaspora in Australia and elsewhere, making it easier for them to work in Greece and to vote in Greek elections.
He said he would change Greece’s tough education rules so as to recognise three-year bachelor degrees issued by Australian universities as the equivalent of four-year Greek degrees, removing a hurdle that has long frustrated Australians wanting to work in Greece.
He also vowed to allow the one million-plus registered Greek voters who live overseas to vote by mail or at local consulates instead of the current system which requires them to travel to Greece to cast a ballot.
Often criticised in Greece for speaking English more fluently than Greek, Mr Papandreou has fought PASOK’s old-style party chieftains in a bid to modernise the party, dropping from its candidate list several factional heavies including the former prime minister Costas Simitis.
The defeated prime minister, Costas Karamanlis beat Mr Papandreou in elections in 2004 and 2007 but yesterday resigned the leadership of New Democracy to accept responsibility for his failed gamble of calling a snap election just half way into a four-year term of parliament.
Dora Bakoyannis, the 55-year-old foreign minister who served as mayor of Athens during the 2004 Olympic Games, is the frontrunner to replace him as leader of the conservative party, a post once held by her father Constantine Mitsotakis.
Mr Karamanlis had called for an austere series of government cuts to rein in the deficit and national debt but he was hampered by the fact that he had made little progress in the previous five years on his vows to fight corruption and reform an outdated government bureaucracy.
Mr Papandreou campaigned on a promise of a 3 billion Euro ($5b) stimulus package but faces immediate talks with Euro zone officials concerned that Greece’s budget deficit is already twice the 3 per cent of GDP allowed under the rules of the common currency.
The socialist leader has vowed to increase wages and pensions and fund the extra spending by increasing taxes on the rich and cracking down on tax evasion.
Raised in Sweden and the US when his father was in political exile, Mr Papandreou promised to appoint an advisory panel of foreign economic experts and tackle Greece’s high levels of corruption and its tradition of new governments handing out state jobs and contracts to their own cronies.
A senior job in the new administration is certain to go to close Papandreou advisor Demetri Dollis, a former Victorian Labor MP who served as deputy leader of the state opposition before being stripped of his ALP preselection by then leader Steve Bracks in 1999 for spending too much time overseas.
Mr Dollis held a high-level job in the foreign ministry when Mr Papandreou was foreign minister and has worked in Mr Papandreou’s personal office over the past five years.
, October 05, 2009
[2]
Papandreou looks to Greek diaspora as he forms new cabinet
George Papandreou is expected to tap international talent for his government to help tackle Greece’s multiple crises
Helena Smith in Athens
guardian.co.uk, Tuesday 6 October 2009 10.50 BST
George Papandreou is expected to announce his cabinet later today. Photograph: Simela Pantzartzi/EPA
Greece‘s socialist leader George Papandreou was sworn in as prime minister this morning amid clear indications that the new government he will lead will seek to tap talent in the diaspora to address the multiple crises facing the country.
The English-speaking prime minister, propelled into office following an overwhelming victory in Sunday’s elections, is expected to announce a cabinet this afternoon to take on Greece’s financial and economic crisis and social malaise.
US-born Papandreou was educated in Sweden, England and Canada and is a Harvard University fellow. His closest aides include English-speaking Greeks born and brought up in Africa, America and Australia. The 57-year-old politician is himself more comfortable speaking English than Greek.
“Part of my identity is being a Greek of Greece and a Greek of the diaspora,” Papandreou told the Guardian. “I think in many ways being Greek is being ecumenical, open to the world. We are a country that has always been open with ideas and contact with the rest of the world as a shipping nation and tourist destination.”
Through his network of connections as head of Socialist International, the global grouping of leftwing parties, Papandreou has already embarked on talks with renowned experts in the fields of economy and public health. The Nobel economics laureate Joe Stiglitz is in touch with him “on a daily basis”, offering advice on how to rescue Greece’s debt-ridden economy from the brink of bankruptcy.
Also a Harvard professor and international health expert now sits in the Greek parliament following his appointment as a non-elected MP with Papandreou’s Pasok party.
“George has always said there is an untapped world and that is the other Greece in the diaspora that he is going to work with, talk to and take advice from to help us get the country out of this situation,” said Dimitris Dollis,a Greek Australian who is among Papandreou’s senior advisers. “Ties with the diaspora are going to be much stronger.”
Among candidates for prominent cabinet roles are George Papaconstantinou, a graduate of New York University and the London School of Economics who worked at the OECD in Paris, and Louka Katseli, a former economics professor at Yale.
After years of introspection under the outgoing centre-right government, Greece is also expected to become far more “open and outward looking” in its foreign policy under Papandreou, who won international plaudits back in the 90s when he almost single-handedly improved relations with Turkey by daring to pursue reconciliation.
“Being parochial is a state of mind and we want to get out of it,” said a source close to Papandreou who will be one of his senior foreign affairs advisers. “The [outgoing] conservatives chose to tread water in a turbulent sea, no initiatives were taken and relations with out neighbours gradually stalled. Our approach is going to be a lot more cosmopolitan, open and creative which is George’s natural inclination.”
The change in style has been welcomed by western diplomats startled by the rise of nationalism and xenophobia in Greece in recent years.
And amid speculation that Papandreou will assume responsibility for foreign affairs – at least initially – many are hopeful that relations with neighbouring Turkey, Macedonia and the rest of Europe will improve. In Istanbul and Ankara there were scenes of jubilation with some Turks cracking open bottles of champagne when news of Pasok’s victory came through. In recent months ties with Turkey have worsened with tensions in the Aegean rising noticeably.
https://www.theguardian.com/world/2009/oct/06/george-papandreou-sworn-greek-pm, 6 October 2009
[3]
Greek NGO teacher Lerounis returns to Greece after release by Afghan Taliban militants
Greek teacher and NGO worker Athanassios Lerounis arrived in Athens on Saturday following his release earlier in the week by Afghan Taliban militants seven months after they kidnapped him in the Chitral region in northern Pakistan.
Lerounis, chairman of the non-governmental organisation Greek Volunteers, was kidnapped outside his museum in the remote Kalash valley last September, while his guard was fatally shot. He had been working on a cultural project in the area since 2001.
Professor Lerounis, a Greek teacher and social worker, was kidnapped on September 8, 2009 following an attack on the Kalash village of Brun, in Pakistan, where he lived. He was abducted outside the ethnological museum Kalash-Dur he had created himself in Pakistan to preserve and showcase the culture of the Kalash people. Lerounis has also founded two primary schools, three motherhood centers and the Kalash Cultural Center in Bumburate Valley.
Lerounis was released in Nooristan province in Afghanistan on Wednesday, and Pakistani officials took him to Chitral later that night. He was taken to the Greek embassy in Islamabad on Friday morning to await transportation back to Greece arranged by the Greek government.
A visibly moved and relieved Lerounis arrived Saturday at Athens’ ‘Eleftherios Venizelos’ International Airport, where he thanked everyone who had helped in securing his release.
“I am very happy to be standing on Greek ground after so many months. A big thank you to the people in Pakistan, the Greek government and the personal interest of the prime minister, who acted as a human being and not a politician,” Lerounis told waiting reporters.
Lerounis also thanked prime minister George Papandreou’s personal envoy to Islamabad, ambassador-at-large Dimitris Dollis, and the Greek ambassador in Islamabad Petros Mavroidis, who accompanied the NGO volunteer on his flight to Greece, as well as all people who were supportive throughout his ordeal.
Dollis confirmed a statement by Wazir on Thursday that no ransom was paid, adding that Lerounis’ release was a big success of the Greek government, Greek diplomacy and the country, and called Lerounis “an example of perseverance”.
Asked if he would return to the Kalash tribe, Lerounis said that “with the support of the Greek and Pakistani government, I would like to return there some day and continue my work”.
http://www.hri.org/news/greek/ana/2010/10-04-12.ana.html#10, 12 April 2010
The chief public prosecutor’s office searched more than 230 business premises across Germany – including those of international giant Deutsche Bank – as well as the homes of accused individuals.
More than 1,000 officials from the tax fraud investigation office, theFederal Criminal Police Office (BKA) and different police authorities took part in the raids.
Searches also took place simultaneously in other EU member states.
Around 150 people are under suspicion of VAT evasion over the trading of greenhouse gas emission permits.
Wednesday morning at 8.20am in Frankfurt: A large contingent of police and other officials arrived at Deutsche Bank. They pulled out their ID at the entrance and entered the building on Theodor Heuss Allee.
Shortly afterwards, a convoy of vehicles with investigators and specialists from the BKA turned up and pulled into the underground car park with blue lights flashing.
In response to an enquiry from BILD.de, a spokesman from the bank said: “We can confirm that we are one of the 230 entities which were searched. We are co-operating with the public prosecutor’s office.”
A spokesman for another major institution, Commerzbank, said it had not been involved in the raids.
WHAT IS IT ALL ABOUT?
The trick is called VAT carousel or missing trader fraud, and according to BILD’s information the current suspected cases add up to a lost revenue of around €1 billion for the German government.
HOW IT WORKS
Dealers in different EU countries buy and sell permits which allow industrial enterprises to release a certain amount of greenhouse gases.
On the sale from dealer A to dealer B across a state border, no VAT is due. Upon the resale of the permits by dealer B to dealer C within the same country (i.e. Germany), VAT does become owed which dealer C can then claim back from the tax office.
Dealer B owes the authorities 19 per cent in VAT – it doesn’t pay, but pockets the 19 per cent and disappears off the market.
The permit is passed along from dealer to dealer until it arrives back at dealer A, which starts a new chain or carousel.
A car bomb has exploded outside a police station in Northern Ireland, injuring two people, days after the final formal steps for the peace process in the province were put in place.
The device blew up at the Newtownhamilton police station late Thursday night after a warning was telephoned to a Belfast hospital, police said.
A car bomb was defused at the same spot in the county of Armagh 10 days ago. The Continuity IRA, which opposes the peace process and last year killed a police officer in the bloodiest three days in Northern Ireland for more than a decade, claimed responsibility for that bomb.
A day earlier another republican group opposed to the peace process, the Real IRA, had detonated a bomb near the Northern Ireland offices of domestic spy agency MI5. The Real IRA shot dead two British soldiers last year, two days before the killing of the police officer.
The latest attacks were apparently timed to coincide with the transfer of police and justice powers from London and the appointment of Northern Ireland’s first justice minister.
The moves are the last formal steps under a process, launched by a 1998 peace deal, that has resulted in self-rule for the province by a government representing both Republicans and Unionists.
Police said they were investigating reports of shots being fired before Thursday’s bombing, which shattered windows and forced homes to be evacuated and residents to be put up in a high school.
“Those who planted this bomb want to drag Northern Ireland back to the dark days of murder and mayhem, they want to undermine the political process, they want politics to fail,” said David Ford, the newly-appointed justice minister.
“I am determined that we will all continue to stand together so that they will not succeed,” Ford, the leader of the non-sectarian Alliance Party, said in a statement.
Northern Ireland’s political leaders, First Minister Peter Robinson and Deputy First Minister Martin McGuinness, a former IRA commander, also condemned the attack.
Analysts have warned that republican dissidents remain active, and police have said the risk of attack, chiefly on security forces, is severe.
Police said the two wounded people had been taken to hospital but their injuries were not believed to be life-threatening.
In a separate incident, a pipe bomb exploded outside a house in Coalisland in County Tyrone, shattering windows but injuring no one, police said.
(Writing by Marie-Louise Gumuchian in Dublin; editing by Kevin Liffey)
