Greeks agree on austerity, unions call strike
This cleared the way for the eurozone to decide on a bailout package, but unions called a new strike against the terms.
A final agreement has been reached among Greek political leaders on additional austerity measures demanded by EU-IMF creditors in return for a loan bailout, a government source said on Thursday.
“There is a final agreement on the measures,” the source told AFP hours before eurozone finance were set to decide on a new bailout worth 130 billion euros ($171 billion), averting a default and ending a chapter in the eurozone crisis.
A deal by banks to write-down Greek debt was also at hand, an EU diplomat said.
The Greek government coalition parties had balked overnight at cutting 650 million euros in supplementary pensions, and argued until almost the last minute on Thursday over finding savings in other areas of the budget.
The message from Brussels meanwhile was that the shortfall in cuts, however small, had to be bridged, by whatever means.
European Central Bank chief Mario Draghi told reporters in Frankfurt that he had received a phone call from Greek Prime Minister Lucas Papademos just minutes earlier and “he told me that agreement has been reached and has been endorsed by major parties.”
An EU diplomat told AFP there is also “consensus” on the voluntary writedown by private creditors of their holdings of Greek bonds — “the biggest debt restructuring ever.”
Private creditors, who are negotiating an exchange of bonds that will save Greece at least 100 billion euros, are to meet on Thursday in Paris before the Europgroup meeting, according to a spokesman.
Greece has run up total debt of about 350 billion euros, roughly 160 percent of its gross domestic product, and the IMF has insisted that level be brought down to a maximum of 120 percent of GDP in 2020 in order for a further bailout to go ahead.
The deal would likely see the face value of the 200 billion euros in bonds that private creditors hold be cut in half, but their total losses may hit 70 percent given they will receive 30-year bonds at lower interest rates.
The bond exchange will take several weeks to perform, raising concerns whether it can completed before Greece faces 14.5 billion euros in payments due on March 20 and defaults, which could spark a domino effect that undermines the entire euro common currency project.
The main private and public-sector unions called a 48-hour general strike on Friday and Saturday to fight “barbaric” new wage and pension cuts.
“We categorically reject this framework to impoverish and bankrupt society and the economy,” the leading union GSEE said.
According to the Greek press, the measures under consideration included slashing the minimum wage by 22 percent, sweeping cuts to salaries and pensions and 15,000 public sector job losses.
Anguish over the measures was exacerbated as official data showed the jobless rate exceeding a million people, or 20.9 percent of the workforce.
If eurozone finance ministers approve the deal at a meeting due to begin at 1700 GMT the programme of reforms will be put before the Greek parliament on Friday, ahead of a vote on Sunday.
In principle, the government coalition can rely on support from 255 of the 300 deputies, but the political stakes are high as the parties prepare for early legislative elections in April.
Far-right leader Georgios Karatzaferis, the first to emerge from the coalition talks, denounced the troika for heaping unreasonable pressure on the Greek government to enact more painful cuts to public spending.
“I made clear my intentions right at the start of the meeting. I cannot in one hour sign up to a plan which will affect the country for 40 or 50 years with receiving (legal) assurances that the measures are going to get the country out of its impasse,” he told reporters.–AFP
Asian stock falls on China inflation, Greece delays
Asian markets were mostly lower Thursday after marathon talks over Greece s massive debt ended without firm agreement as China s annual inflation rate hit a three-month high.
Tokyo dipped 0.38 percent, Sydney was down 0.40 percent and Seoul lost 0.64 percent in morning trade, after closing at a half-year high on Wednesday.
Hong Kong, which also reached a six-month high on Wednesday s Asian market rally, lost 0.51 percent while Shanghai shares were flat, up 0.02 percent.
Greek coalition leaders ended lengthy talks on austerity measures Wednesday, with one remaining point of disagreement — pensions cuts — keeping alive fears it may default, a result that would send shockwaves across the eurozone and beyond.
Agreement on new measures demanded by the European Union, the International Monetary Fund and the European Central Bank and on a debt writedown by banks would open the way for a second rescue package for Greece, and close a key chapter in the eurozone s debt crisis.
The money is vital to prevent Greece from defaulting on 14.5 billion euros ($19.2 billion) worth of payments to bond holders, due next month, as the country struggles under a 350-billion euro debt mountain.
Investors are now awaiting meetings of the European Central Bank and Bank of England on Thursday, with the focus firmly on what stand they will take on further stimulus for slowing regional economies.
China said annual inflation hit 4.5 percent in January, its highest level in three months, after slowing to 4.1 percent in December as government efforts to curb bank lending and surging property prices took effect.
The rise was mainly attributed to the Lunar New Year holiday last month.
Retail spending typically soars during the festival, the most important celebration in the Chinese calendar, as consumers splash out on food, wine and gifts for family and friends.
“The CPI (inflation) numbers will have a negative effect on the market. Continued high inflation means policy will continue to be tighter than the market had expected,” Chen Wei, an analyst at China Minzu Securities, told Dow Jones Newswires.
Before January, China s inflation had eased for five straight months after hitting a more than three-year high of 6.5 percent in July and analysts said the downward trend would likely resume in February as the economy slowed.
On Wall Street, the Dow Jones Industrial Average edged up 0.04 percent by the close Wednesday while the broad-based S&P 500 rose 0.22 percent and the tech heavy Nasdaq Composite added 0.41 percent.
The euro was under pressure in early Asian trade, hitting $1.3215 against the dollar before gaining ground to change hands at $1.3251 and 102.22 yen, from $1.3260 and 102.14 yen in New York late Wednesday.
The dollar was at 77.13 yen, edging up from 77.03 yen in New York.
New York s main oil contract, West Texas Intermediate (WTI) light sweet crude for delivery in March, gained 22 cents to $98.93 a barrel and Brent North Sea crude for March was up 20 cents to $117.40 in morning trade.
Gold was at $1,732.40 an ounce at 0350 GMT, little changed from New York on Wednesday.
Greek austerity talks stalled, minister heads to Brussels
Greek leaders failed on Thursday to agree on a reform and austerity program, the price of a financial bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country s financial backers with an incomplete deal.
Venizelos will travel to Brussels later on Thursday, where his fellow euro zone finance ministers had hoped he would present a commitment to make budget savings worth 3.3 billion euros ($4.4 billion) this year.
But after all-night talks with leaders of the three parties in the Greek coalition and with officials from the EU and IMF, Venizelos emerged shortly before dawn to say that one issue remained unresolved.
“I am leaving for Brussels in a short while with the hope that the Eurogroup meeting will be held, and a positive decision on the new program will be taken,” he told reporters.
“The financial survival of the country in the coming years depends on the new program … It is time of responsibility for everyone.”
Venizelos did not say what the problem was or why he was not certain the Brussels meeting on the 130 billion euro bailout would go ahead.
A spokesman for the socialist PASOK party said disagreement over pension reform had been the stumbling block.
A senior government official said the party chiefs had agreed on how to make about 90 percent of the promised savings, leaving a relatively small hole in the calculations.
Athens had to close this gap quickly, said the official. “Greece has another 15 days to specify fiscal savings worth 300 million euros,” he said on condition of anonymity.
PM HOPES
Earlier, Prime Minister Lucas Papademos said he hoped the party leaders could sort out their differences before the euro zone finance ministers meet at 1700 GMT.
Prospects for a long-awaited deal on Greece s second bailout since 2010 appeared to brighten when the finance ministers chairman Jean-Claude Juncker called the Brussels meeting – which IMF managing director Christine Lagarde will also attend – to examine the bailout and accompanying bond swap.
On offer from the European Union and International Monetary Fund is a package involving the new rescue funds – which Greece needs to avoid a chaotic default when big debt repayments fall due on March 20 – and a bond swap with private creditors to ease the nation s huge debt burden.
In return, Athens must accept conditions requiring big cuts in many Greeks living standards. The smallest member of the coalition, the far-right LAOS party, was particularly uncomfortable with the measures.
“The president of LAOS George Karatzaferis expressed serious reservations,” said Papademos, a former central banker brought in when a PASOK government collapsed last November.
Panos Beglitis, spokesman for PASOK which is in the coalition along with LAOS and the conservative New Democracy party, said they had disagreed over the level of cuts to supplementary pensions needed to safeguard the pension system.
However, Beglitis told reporters the leaders had agreed to cut the minimum wage by 22 percent as part of efforts to make the economy more competitive. Plans to scrap bonuses paid to private sector workers at Christmas, Easter and in the summer had been dropped.
Two sources close to the Athens talks said the government would promise spending cuts and tax rises totaling 13 billion euros from 2012 to 2015, almost double the seven billion it originally pledged.
Crude prices higher in Asian trade
Crude prices edged higher in Asian trade Thursday on hopes that protracted talks over a Greek debt deal were set for a conclusion, analysts said.
New York s main contract, West Texas Intermediate (WTI) light sweet crude for delivery in March, gained 18 cents to $98.89 a barrel and Brent North Sea crude for March was up 21 cents to $117.41 in the afternoon.
“Crude futures rose… on hopes that a deal to bail out debt-strapped Greece was near,” said Phillip Futures in a commentary.
Greek government coalition talks on austerity measures ended on Wednesday with the prime minister s office saying one remaining point of disagreement remained — cuts to pensions. It added that it hoped for a complete deal to be reached by Thursday evening.
Representatives of the European Union, the International Monetary Fund and the European Central Bank, have been organising massive bailout loans for the debt-ridden country.
Greece desperately requires emergency funds from its eurozone partners to avoid defaulting on 14.5 billion euros ($19.2 billion) worth of payments to bond holders due on March 20.
Other analysts however cautioned against raising expectations too high.
“At present, we await the outcome of a Greek meeting today but I wouldn t suggest anyone clears their diary for this,” Justin Harper, head of research at IG Markets Singapore, told AFP.
“We ve seen too many meetings and deadlines postponed, moved and cancelled altogether for people to get too worked up about this latest line in the sand ,” he added.
Traders were also closely watching developments in Iran, where lawmakers backed unspecified “retaliatory measures” prepared by Tehran s oil and trade ministries against a European oil embargo.
“In our view, unless Iran is able to secure an alternative buyer, the decision is likely to remain in the form of rhetoric and a threat,” Barclays Capital said in a commentary.
However the situation surrounding the Islamic republic remained tense, “with the risk of miscalculation resulting in a messy military endgame rising”, it added.
Western countries have accused Iran of seeking to develop nuclear weapons but Tehran has insisted its atomic programme is for civilian purposes.
Naeem Lodhi termination case: Court reserves
The Islamabad High Court (IHC) has reserved the verdict in the matter of former secretary defence Lt Gen Khalid Naeem Lodhi (retd) who has challenged his termination from service by the prime minister on January 10.
The court is likely to announce the decision today.
Romania’s government collapses
Romania s government has collapsed following weeks of protests against austerity measures, the latest debt-stricken government in Europe to fall in the face of raising public anger over biting cuts.
Emil Boc, who had been prime minister since 2008, said Monday he was resigning “to defuse political and social tension” and to make way for a new government. Thousands of Romanians took to the streets in January to protest salary cuts, higher taxes and the widespread perception that the government was not interested in the public s hardships in this nation of 22 million.
President Traian Basescu quickly appointed Justice Minister Catalin Predoiu, the only Cabinet member unaffiliated with a political party, as interim prime minister to serve until a new government is approved.
Basescu also nominated Mihai Razvan Ungureanu, the head of Romania s foreign intelligence service, as the country s new prime minister and asked him to form a Cabinet. Parliament must approve Ungureanu and his ministers in 60 days, or the legislature will be dissolved and new elections held.
Boc s party and his allies still have a majority in Parliament, but opposition parties late Monday called for Basescu to resign and for early parliamentary elections to be scheduled now.
In a brief statement Ungureanu, a former foreign minister, said his priority as prime minister would be “the economic and political stability of Romania.” He is considered a loyal ally of Basescu and pro-American in his outlook.
But the opposition said it opposes Ungureanu and that it will continue the boycott of Parliament it began last week. “We are not going anywhere with this new government,” said Crin Antonescu, head of the opposition Liberal Party.
Boc s resignation came as Romania is starting to feel the effects of the widespread cuts that the government put in place in exchange for a €20 billion ($26 billion) loan from the International Monetary Fund, the European Union and the World Bank in 2009, to help pay salaries and pensions after its economy shrank by more than 7 percent.
In 2010, Boc s government increased the sales tax from 19 percent to 24 percent and cut public workers salaries by a quarter to reduce the budget deficit.
Jeffrey Franks, the head of the IMF mission to Romania, said Sunday he is confident that economic reforms the fund demanded in exchange for the loan would continue, even if the current government steps down.
On Monday, Boc urged the nation s feuding politicians to elect a new government quickly. He said he had taken “difficult decisions thinking about the future of Romania, not because I wanted to, but because I had to.”
Christian Mititelu, a political commentator and former head of the BBC Romanian service, said: “There is a lot of resentment. The austerity measures seem to have penalized those who worked for the state, retirees and people who depended on social security.”
Political commentator Radu Tudor said Boc s resignation was merely a ploy by the president to boost the election chances of the governing Democratic Liberal Party, which Basescu used to lead, by getting rid of an unpopular government.
Basescu was elected president in 2004 and his mandate expires in 2014. Parliamentary elections are currently scheduled for November.
Romania s problems go deeper than its economic woes. Strong hostility between the government and opposition parties is reflected daily in the media. Opposition politicians and journalists who are critical of the government claim they are harassed.
Basescu, who has been criticized for being outspoken and confrontational, has said he is committed to reform and is openly disdainful of the opposition. He has been credited by the IMF for his reforms and attempts to fight corruption. Opposition politicians hailed the government s collapse.
“This is a victory for those that demonstrated on the streets,” said Antonescu. “The most corrupt, incompetent and lying government” since the 1989 anti-communist revolt has gone, he said.
Victor Ponta, the leader of the opposition Social Democracy Party, said he would ask Basescu to call early elections.
Boc, meanwhile, defended his record.
“I know that I made difficult decisions, but the fruits have begun to appear,” he said in a statement. “In times of crisis, the government is not in a popularity contest, but is saving the country.”
Romania has announced plans to join the eurzone by 2015, even though as he served in office Boc saw the region s financial crisis bring down governments in Greece, Italy, Ireland and Portugal.
Hundreds lose life in freezing Europe
Bitterly cold weather sweeping across Europe claimed more victims on Sunday, brought widespread disruption to transport services, and left thousands without power with warnings that low temperatures would continue into next week.
Hundreds have lost their lives in eastern Europe as freezing weather sweeps across the continent westwards, while major airports warned that services would be delayed or cancelled.
Steven Keates, a weather forecaster at Britain s Met Office, said the severe wintry conditions were expected to last, and spread to other areas.
“It will still be very cold, maybe not quite the exceptional temperatures we ve seen this last week, but still very cold,” he told Reuters.
“(It will be) perhaps turning increasingly unsettled across southern and eastern Europe, so that will probably bring a risk of snow for Italy across to Greece and up round the Balkan countries.”
A state of emergency was declared in Bosnia after the cold snap claimed its seventh victim, and avalanches and strong winds cut off hundreds of villages in eastern parts.
Helicopters were needed to deliver aid packages to mountainous areas and take the sick to hospital.
Greece also declared an emergency situation in the western Peloponnese peninsula after heavy rain caused flooding and an 82-year old woman drowned while trying to escape her house.
Nine more deaths from freezing temperatures were registered in Ukraine overnight, emergency services said, taking the death toll to 131 from a nine-day cold spell, the most severe in the country for six years with night temperatures down as low as minus 33 Celsius (minus 27 Fahrenheit) in parts.
Many of the dead were homeless people with bodies being found in the streets under snow, in rivers and in doorways. More than 3,000 heated tents have been set up around the country to provide makeshift accommodation for the homeless.
In Poland, Prime Minister Donald Tusk asked local authorities to waive the ban on admitting inebriated individuals to homeless shelters as eight more people died taking the death toll to 53, PAP news agency reported.
The extreme cold also caused the death of at least three people in Hungary, national news agency MTI said, and at least five people froze to death in Lithuania over the weekend in Lithuania as the temperature fell below -30 Celsius overnight.
Transport networks were also badly hit as the chilling weather moved west, prompting severe weather warnings to be issued across much of France and Britain.
London s Heathrow, Europe s busiest airport, said it had cancelled about half of its normal services as more than 15cm (6 inches) of snow fell in parts of England overnight and temperatures dropped to almost -10 Celsius.
Many of Britain s other airports were forced to shut runways overnight and warned of further disruption, while rail services were affected and motorways near London were brought to a standstill, forcing some divers to abandon their vehicles.
In Paris, the Eiffel Tower received a coating of snow and more downfalls were expected to bring problems to the French capital s main airports.
The French death toll rose to five, after a 12-year old boy died of hypothermia after falling into a frozen pond in eastern France and two homeless people were found dead.
Meanwhile about 86,000 Italians were left without power because of trees falling on power lines, Livio Gallo, head of state power company Enel told SkyTG24 television. The deaths of 13 people were blamed on the bad weather,
Italian police said, including three men who died of heart attacks while shoveling snow.
Two highways in central Italy that cross the Apenines remained closed, the Interior Ministry said, while in Rome, schools and public offices are to remain closed until at least Tuesday, Mayor Gianni Alemanno said.
He urged people to get out and clean sidewalks, and said the city had handed out 2,350 free shovels. While the cold snap has brought death and misery across Europe, some made the most of the conditions.
Snowboarders took to the streets of the Bosnian capital Sarajevo after it was blanketed by a record snowfall of 107 cm.
The traditional Sartai horse race on ice also went ahead in Lithuania and local media reported more than a dozen men and women from a health club went swimming in a lake near Vilnius.
Meanwhile in Belgium, police found that overnight temperatures of about -10 Celsius were so low that machines to test motorists alcohol levels did not work.
20th Amendment to be approved with consensus: PM
Prime Minister Syed Yousuf Raza Gilani on Wednesday said the proposed 20th Constitutional Amendment would be tabled and approved from the Parliament with consensus.
The Prime Minister, while talking to the members and leaders of the coalition parties at a dinner he hosted for them here at the PM House on Wednesday, said the government would not bulldoze anything in the House.
Gilani informed the coalition partners that he has already talked to Chief of JUI-F, Maulana Fazlur Rehman and sought his cooperation for the smooth passage of the 20th Constitutional Amendment.
Besides the MNAs, the dinner was attended by various leaders of the coalition parties including Chaudhry Shujaat Hussain, Haji Munir Khan Orakzai, Haider Abbas Rizvi, Babar Ghauri, Ghulam Muhammad Bilour, Haji Khuda Bakhsh Rajar and Saima Akhtar Bharwana.
The coalition partners assured the Prime Minister of their full support for the adoption of the 20th Constitutional Amendment. They said the Amendment would benefit all the parties by giving legal cover to the bye-elections.
The Prime Minister thanked the coalition partners for strengthening democracy and political system in the country.
Pakistan, Afghanistan agree on joint strategy against terrorism
Foreign Minister Hina Rabbani Khar met her Afghan counterpart Zalmay Rasoul during her visit to Kabul. They also reiterated their commitment to steer bilateral relations between the two countries in accordance with the principles of sovereignty, territorial integrity, independence, mutual respect and the UN Charter.
According to a Joint Communiqué‚ issued from Islamabad and Kabul simultaneously: “The two sides held in-depth consultations to work out a programme of enhanced engagement for promoting bilateral cooperation in diverse fields, re-affirmed the historical, cultural and religious bonds of friendship that exist between the two the countries and their peoples, reiterated commitment to steer bilateral relations in accordance with the principles of sovereignty, territorial integrity, independence, mutual respect and the UN Charter, agreed that a strong, robust and independent bilateral relationship would greatly contribute to peace and stability in the region and emphasised the need of working together towards enhanced bilateral engagement for deepening interaction in diverse fields including security, development, transit, trade, economic and investment linkages, infra-structure and energy connectivity and people to people contacts for harnessing mutual benefits.”
Earlier, Foreign Minister Hina Rabbani Khar called on Afghan President Hamid Karzai and discussed Pak-Afghan relations.
Karzai told Khar that his country wanted better relations with Pakistan and expansion of cooperation in different fields.
Afghan Foreign Minister Zalmay Rasoul says President Hamid Karzai will travel to Islamabad on February 16-17 to further strengthen ties.
European shares up on Greek hopes
European shares rose on Tuesday on hopes Greece was nearing a debt swap deal needed to avoid a messy default, while European leaders agreed on stricter budget discipline measures to help prevent further debt accumulation in the region.
Banks, many of which have been a focus in the euro zone debt crisis due to their exposure to euro zone peripheral debt were among the top performers, with the STOXX Europe 600 Banks index rising 1.2 percent.
“They have made progress in Greece and the European leaders have endorsed the fiscal pact,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities. “There is optimism in the market.”
“It lowers the risk of instability to the financial system and company earnings. We are overweight defensive, but this is something that could make us change our portfolios as it diminishes the risk to the financial system.”
By 0806 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.5 percent at 1,035.89 points.
