Greek party leaders prepare for crucial debt talks

ATHENS: Greek coalition leaders are studying a draft deal on harsh cutbacks needed to secure a €130 billion ($170 billion) bailout that will help the country avoid a looming bankruptcy next month.

The office of Prime Minister Lucas Papademos said Wednesday that the heads of the three parties backing his interim coalition government received the draft 50-page austerity document, drawn up with the country’s debt inspectors, earlier in the day.

A meeting of Papademos with the party leaders, originally scheduled for 1100 GMT, was delayed until 1300 GMT to give parties more time to study the draft.

The coalition talks have been postponed over the last three days to make time for exhaustive negotiations with representatives of the European Union, the European Central Bank and the International Monetary Fund, on whose approval the continued flow of Greece’s vital rescue loans depends. Without the bailout, Greece would not have enough money to pay off a big bond redemption payment next month, triggering a default that risks sending shockwaves throughout financial markets and the global economy.

The three organizations, known collectively as the “troika”, have demanded further measures to improve Greece’s competitiveness and economic stability — including new private sector wage and pension cuts, public sector layoffs and cuts in health, pension and defense spending — before they approve the new €130 billion ($170 billion) bailout.

The troika’s proposals have horrified unions, who held a general strike Tuesday. Greeks have already been hit with a spate of salary cuts and drastically increased taxation over the past two years, amid record-high unemployment and a five-year recession.

Labor Minister Giorgos Koutroumanis told Parliament last week that a demanded reduction in the €751 ($985) monthly minimum wage would quicken the Greek economy’s contraction and hit the revenues of struggling pension funds that have already lost €20 billion ($26 billion) since 2009.

But Athens has minimal ground for maneuver. Without the rescue loans, the country will default on its massive debts in March, when it faces a €14.5 billion ($19 billion) bond redemption.

Stocks advanced Wednesday, while the euro was trading near two-month highs, as global markets were hopeful a deal would be struck in Athens. Greek shares were 3 percent up in midday trading.

“We are finally approaching the endgame of the Greek talks,” said Gary Jenkins, managing director at Swordfish Research. “Ultimately it is difficult to see how they can do anything other than agree a deal. After all, the alternative is a disorderly default which could lead to a much deeper economic depression and potential civil unrest.”

Late Tuesday, Greece’s private creditors signaled progress on a separate, linked agreement that would cut the country’s privately held debt load by 50 percent, or some €100 billion ($131 billion). The intention behind the writedown is to ensure that Greece’s long-term debts are sustainable. Banks, pension and hedge funds and other private holders of devalued Greek bonds are expected to swap their current bonds for new ones worth 50 percent less than the original face value, with longer repayment terms and a lower interest rate. They are also expected to get a €30 billion payment as part of the bond swap deal.

Representatives of the Institute of International Finance, which has been leading the talks for private bondholders, had a “constructive meeting” with Papademos, IIF spokesman Frank Vogl said.

Papademos and Finance Minister Evangelos Venizelos will soon brief the rest of the 17-nation eurozone on the proposed deal, Vogl said — a sign the bond-swap deal could be close.

The meeting of eurozone finance ministers could happen as soon as Thursday in Brussels, according to officials, although that will depend on an agreement in Athens on the terms of the second bailout.

If political leaders accept the demanded austerity, Greek officials say a cabinet meeting will approve the deal, likely later Wednesday. Parliament will then have to vote on the deal over the weekend.

Ratification should prove quite simple provided all three coalition partners back the deal, as they control a combined 252 of Parliament’s 300 seats — well enough to carry the vote even if there is a limited backbencher rebellion.

Greece has been kept solvent since May 2010 by payments from a €110 billion ($145 billion) international rescue loan package. When it became clear the money would not be enough, a second bailout was decided last October.

The Greek government has already accepted that it must cut 15,000 state jobs in 2012 to get the new bailout, and reduce 2012 spending by a further €3.3 billion ($4.3 billion) as well as wage costs in the private sector and recapitalize banks without nationalizing them.

But disagreement remains on the extent of those cuts between party officials, who are set to face national elections in late April — after the debt deals have been sealed and implemented.

The majority Socialists, main rival conservatives and the small right-wing LAOS party are also at odds over when the elections should be held.

The Socialists, who handed over power to Papademos in November and are trailing badly in opinion polls, want him to stay through parliament’s four-year term that ends in late 2013. But conservatives, buoyed by their lead in opinion polls, are demanding an April vote according to plan.

LAOS leader George Karatazferis criticized eurozone heavyweights France and Germany on Tuesday, saying they were carrying out an “aggressive humiliation of Greece” with their demands for new austerity measures.

A disorderly bankruptcy by Greece would likely lead to its exit from the eurozone, a situation that European officials have insisted is impossible because it would hurt other weak countries like Portugal, Ireland and Italy.

German Chancellor Angela Merkel also argued strongly against the prospect.

“The euro is not just an economic project, it is also a political project — and I am not going to participate in pushing Greece out of the euro,” she said late Tuesday. “It would have incalculable consequences.” AGENCIES

Asia stocks plummet on slower world growth

 

Asian stock markets fell Monday, with slower-than-expected growth in the US and uncertainty about a tentative deal to resolve Greece s debt crisis weighing on investor sentiment.

 

Japan s Nikkei 225 index fell 0.6 percent to 8,785.22. South Korea s Kospi was 1.2 percent lower at 1,940.82 and Hong Kong s Hang Seng dropped 0.5 percent to 20,401.32. Australia s S&P/ASX 200 lost 0.4 percent at 4,272.40.

 

Benchmarks in Singapore and the Philippines also fell. Shares in mainland China were mixed after being closed for a week for Chinese New Year holidays. Taiwan and New Zealand rose.

 

European leaders were to meet later Monday in Brussels to discuss austerity and belt-tightening measures as well as a tentative deal reached Saturday between Greece and its private investors that could avert a disastrous Greek default on its debt.

 

If the deal holds and works, it will help prevent a potential shock to the world banking system. But it doesn t resolve the weakening economic conditions in Greece and other European nations as they rein in spending to get their debts under control.

 

Stan Shamu of IG Markets in Melbourne said that “the Greece debt issues will remain a source of uncertainty and might dampen the risk mood ahead of the EU summit today.”

 

Under the agreement, investors holding 206 billion euros ($272 billion) in Greek bonds would exchange them for bonds with half the face value. The replacement bonds would have a longer maturity and pay a lower interest rate.

 

The deal would reduce Greece s annual interest expense from about 10 billion euros to about 4 billion euros. When the bonds mature, Greece would have to pay its bondholders only 103 billion euro.

 

It is unclear how investors who buy and sell the bonds of other debt-burdened countries, such as Italy, Spain and Portugal, will react. If they drive up borrowing costs for those countries, the debt crisis could get worse.

 

Private investors hold two-thirds of Greece s debt, which is equal to an unsustainable 160 percent of its annual economic output. By restructuring the debt, Greece hopes to make it a more manageable 120 percent by decade s end.

 

On Wall Street, stocks mostly fell Friday after the government said the U.S. economy grew more slowly than expected in the last three months of 2011.

 

Economic growth for October through December came in at an annual rate of 2.8 percent. That was the fastest of 2011 but lower than the 3 percent that economists were looking for.

 

The Dow Jones industrial average fell 0.6 percent to 12,660.46. The Standard & Poor s 500 index fell 0.2 percent to 1,316.33. The Nasdaq composite rose 0.4 percent to 2,816.55.

 

Benchmark oil for March delivery was down 36 cents to $99.20 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 14 cents to end at $99.56 per barrel on the Nymex on Friday.

 

In currencies, the euro fell to $1.3180 from $1.3208 late Friday in New York. The dollar rose slightly to 76.74 yen from 76.72 yen.
 

Euro, stocks rally, Spain gets respite but Portugal hit

LONDON: The euro and European stocks rallied strongly on Wednesday and pressure on Spain eased, but the eurozone debt crisis weighed heavily with a credit watch for Portugal and Germany struggling to sell bonds.

Leading EU figures warned that financial markets were underestimating the will of EU leaders and institutions to defend the euro and the eurozone.

But in a new sign of the extent of anxiety among investors, a German bond issue was undersubscribed.

“Markets are still concerned about the debt crisis spreading to other countries,” said Commerzbank analyst Ulrich Leuchtmann.

The euro shot above 1.31 dollars in trading here, a day after hitting a two-month low point under 1.30 dollars. The Madrid stock market meanwhile surged more than 3.0 percent in early afternoon trading.

“For all of the woes around at the moment the equity markets

Euro falls to two month low after Irish deal

TOKYO: The euro touched a fresh two-month low Monday in Asia, as the official rescue package for debt-ridden Ireland failed to ease the market’s worries about the health of eurozone economies.

The euro fell to 1.3181 dollars before recovering to 1.3220 in late-morning trading in Tokyo, compared with 1.3247 in US markets Friday afternoon. The currency stood at 111.14 yen, also slipping from 111.30 in US trade.

The unit began the day on a stronger tone, reaching an intraday high of 1.3291 shortly after 7:00 am (2200 GMT) following the announcement on Sunday of Ireland’s 85-billion-euro (113 billion dollars) bailout.

But it gradually lost steam as it slipped to its lowest level since late September on persistent fears that other nations, namely Spain and Portugal, may soon be lining up for help.

While the Irish package may “stabilize things a little bit,

Euro nations lean on Portugal to seek help: report

LONDON: Euro zone nations and its central bank are urging Portugal to apply for a financial bailout from a European rescue fund, Financial Times Deutschland reported on Friday.

Without revealing its sources, the paper said a majority of euro zone countries and the European Central Bank were putting pressure on Portugal to follow Ireland and Greece and seek aid in order to save Spain — European Union’s fifth-largest economy — from having to do the same.

The paper quoted a source in Germany’s finance ministry as saying: “If Portugal were to use the fund, it would be good for Spain, because the country is heavily exposed to Portugal.”

The German Finance Ministry could not immediately be reached for comment on the report which suggested that despite public displays of confidence, euro area leaders were alarmed at the prospect of the debt crisis engulfing ever

Euro struggles near lows as debt crisis festers

LONDON: The euro struggled near a two-month low as the euro zone debt crisis showed signs of spilling over from Ireland to other euro zone members even after Ireland unveiled an ambitious austerity plan.

Traders say Portugal and increasingly Spain are seen as potentially in need of help while Dublin’s belt-tightening plan has come under fire for sticking to economic growth assumptions, unveiled earlier this month, seen as too optimistic.

Trade was thin, however, due to the U.S. Thanksgiving holiday on Thursday. Some market players said the fall in the euro as well as the Aussie reflected short-covering in the U.S. dollar before the holiday.

“The market is being driven by position adjustments typical in November plus the euro zone problems,” said Minori Uchida, a senior analyst at the Bank of Tokyo-Mitsubishi UFJ.

The euro shed 0.2 percent on the day

Nigerian FIFA official denies vote selling claims

A Nigerian Fifa official has denied allegations of corruption and said that he offered to sell his vote in the contest to host the 2018 World Cup. Amos Adamu told that he welcomed the Fifa investigation into the claims.
Mr Adamu allegedly said he wanted cash to build pitches in Nigeria. Tahiti’s Reynald Temarii, president of the Oceania Football Confederation, is also alleged to have asked for a payment, in his case to finance a sports academy. He denies the claim, suggesting that his comments on the Sunday Times video had been taken out of context.
Mr Adamu and Mr Temarii, both members of Fifa’s 24-man executive committee, were suspended by the organisation for 30 days on Wednesday. Fifa is the international governing body of association football.
The Fifa ethics committee will investigate this and I am very happy about it because this will enable the whole world to know the truth of the matter, Mr Adamu told.
Mr Adamu, who is also president of the West African Football Union, is said to have told the undercover reporters he wanted $800,000 (500,000) to build the four artificial football pitches in Nigeria. A 24-strong Fifa committee will decide by secret ballot on 2 December who should host the tournament.
However, Fifa is also investigating Spain, Portugal and Qatar in connection with alleged collusion over voting for the 2018 and 2022 World Cups. Spain and Portugal are making a joint 2018 bid, while Qatar is eyeing 2022. Collusion between bidding countries is strictly forbidden by the regulations.

Germany, India, S.Africa to join UN council

UNITED NATIONS: The U.N. General Assembly on Tuesday elected Germany, India, South Africa and Colombia to two-year seats on the U.N. Security Council, while Canada and Portugal went to a second round of voting.

Either Canada or Portugal will join the other four countries to serve two-year terms beginning in January 2011 and ending in December 2012 as non-veto-holding members of the 15-nation body, the powerhouse of the United Nations with the authority to impose sanctions and deploy peacekeeping forces. AGENCIES

Fifa WC quarterfinals set for today

JOHANNESBURG: In the Friday”s first match, Brazil will play the Netherlands at Nelson Mandela Bay Stadium in Port Elizabeth, South Africa. Some are calling this game worthy of a World Cup final. Both teams seem to be in top form before the game.

The Dutch have won all four of their World Cup matches, and Brazil coach Dunga describes them as a very difficult opponent. He says they are a solid team with technical quality and their style of soccer is very similar to South American football.

Brazil is one of four South American teams to reach the final eight.

The five-time World Cup champions will be without midfielder Elano, who scored in each of Brazil”s first two matches. He has been ruled out of the game against the Netherlands after bruising a bone in his right ankle during a victory over Ivory Coast.

But, the Brazilians have so much talent and depth that Elano”s absence is not expected to have much impact. They have won three matches and drawn with Portugal, and are coming off a convincing three-nil victory over South American rival Chile.

The winner of the Brazil-Netherlands match will face either Ghana or Uruguay in the semifinals. Those teams meet in Friday”s second quarterfinal at Soccer City Stadium in Johannesburg.

Uruguay, which lifted the World Cup trophy in 1950 and at the inaugural tournament in 1930, is aiming for its first World Cup semifinal appearance in 40 years. “The Black Stars” of Ghana, meanwhile, are bidding to make history for Africa. No African team has ever reached the World Cup semifinals.

Ghana”s Serbian coach, Milovan Rajevac, says the prospect of becoming the first African team to reach the final four will motivate his squad. And Asamoah Gyan, who has a team-leading three World Cup goals for Ghana in South Africa, says “The Black Stars” are delighted to be representing Africa at this stage.

“We are so happy for this qualification because it is so important for we Ghanaians and the whole of Africa,” said Gyan. “We qualified for the 1/16th [Round of 16], that was four years ago in Germany. And this time, we were able to qualify to the quarterfinals. So, I think it is a big achievement for the Black Stars.”

Another member of “The Black Stars,” midfielder Sulley Muntari, says Ghana has much respect for Uruguay.

“They are a very good side – a very, very, very good side. So, we are not going to underrate them. We are just going in to play our football and try our best to win,” said Muntari.

Uruguay features top strikers Luis Suarez and Diego Forlan, who was born into a family of footballers. His father, Pablo, played for Uruguay at both the 1966 World Cup in England and the 1974 World Cup in Germany. Ghana coach Rajevac describes Forlan as a fine player and his team will need to beware of Uruguay”s attacking threat.

Obama to guarantee McChrystal a 4-star pension

WASHINGTON: President Barack Obama will guarantee former Afghanistan commander General Stanley McChrystal a four-star pension despite firing him last week over comments disparaging civilian leaders.

Continued here: 
Obama to guarantee McChrystal a 4-star pension

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