Thursday, June 30, 2016

Brexit isn’t the most serious threat to the EU — the euro is

Updated by Timothy B. Lee on June 29, 2016, 10:10 a.m. ET


Central banks like the US Federal Reserve and the European Central Bank play a critical role in modern economies.

Money is an essential fuel for economic activity, and it’s the job of a central bank to supply enough to allow for robust economic growth. If they supply too much, they produce inflation. Producing too little can tip the economy into a recession — or make an existing recession worse than it would otherwise be.

Tuesday, June 28, 2016

Turkey Moves To Restore Relations With Russia And Israel On The Same Day

Closer ties could mean a boost to Turkish tourism, gas prospects for Israel and greater security cooperation.
 06/27/2016 03:19 pm ET | Updated 14 hours ago

The Huffington Post

Sophia Jones
Middle East Correspondent, The WorldPost

ISTANBUL — Turkish leaders on Monday announced a series of landmark moves meant to normalize ties with Russia and Israel after years of tumultuous relations with the two leading world powers.

Strengthened relations — a result of a deal with Israel and a letter to the Russian president calling for restored ties — could lead to a boosted economy and tourism sector in Turkey, lucrative Mediterranean gas prospects for Israel and greater security cooperation at a crucial time in the region.

Greece’s Fragile Economy Faces New Tests After Brexit

“Our effort to exit the crisis becomes more complicated because this decision disrupts our economy,” says one Greek politician.
 06/27/2016 04:14 pm ET

The Huffington Post

The United Kingdom’s decision to leave the European Union in a so-called “Brexit” has sent shocks through Europe, raising questions about the continent’s political and economic future.

Markets around the world plunged in the wake of the unexpected referendum results. The Athens stock exchange fell by 15 percent in the immediate aftermath of British voters’ decision, while bank shares dropped by 30 percent.

Greece’s already-fragile economy faces new challenges in an increasingly unpredictable post-Brexit world. Especially worrisome are the potential effects Britain’s decision could have on two of the country’s essential industries: shipping and tourism.

World stocks, sterling fight back after Brexit beating

Tue Jun 28, 2016 5:11am EDT Related: HOUSING MARKET, DAVOS

World stocks rose for the first time in three days and sterling and the euro climbed on Tuesday, as investors made a rush for Brexit-bashed assets hammered by some of the biggest falls since the 2008 collapse of Lehman Brothers.

Bargain hunting trumped still widespread uncertainty over Britain's vote to leave the European Union, as the bloc's leaders, including soon-to-be-ex UK Prime Minister David Cameron, headed for their first post-vote meeting in Brussels.

European shares .FTEU3 jumped 2.4 percent in early trading having plunged over 10 percent since Friday.

How Britain Could Exit ‘Brexit’

The Interpreter

The New York Times

WASHINGTON — In the days since Britons voted to leave the European Union, the so-called “Brexit” referendum has created such severe turmoil that public attention is increasingly focused on an extreme option: Can they get out of it?

Prime Minister David Cameron said on Monday that he considered the referendum binding and that “the process of implementing the decision in the best possible way must now begin.” But he also said he would leave that process to his successor, after his expected resignation in October. This opens a window of at least four months during which time Britain could decide not to proceed, and avoid consequences from Europe.

'Why are you here?' Juncker asks Brexit lawmakers

Tue Jun 28, 2016 4:53am EDT Related: WORLD


European Commission President Jean-Claude Juncker asked lawmakers of Britain's anti-EU UKIP on Tuesday why they had attended a European Parliament session to discuss the consequences of the British vote to leave the bloc.

"We must respect British democracy and the way it has expressed its view," Juncker said in a speech to parliament, words that were greeted by rare applause from the UKIP members present.

Monday, June 27, 2016

Having Won, Some ‘Brexit’ Campaigners Begin Backpedaling


The New York Times

LONDON — Freed from the shackles of the European Union, Britain’s economy would prosper and its security would increase. Britain would “take back control” of immigration, reducing the number of arrivals. And it would be able to spend about 350 million pounds, or about $470 million, a week more on health care instead of sending the money to Brussels.

Before Thursday’s referendum on the country’s membership in the 28-nation bloc, campaigners for British withdrawal, known as Brexit, tossed out promises of a better future while dismissing concerns raised by a host of scholars and experts as “Project Fear.”

But that was before they won.

With financial markets in turmoil, a big drop in the pound and the prospect of further chaos, some supporters of Brexit are backpedaling on bold pronouncements they made just a few days earlier. “A lot of things were said in advance of this referendum that we might want to think about again,” Liam Fox, a former cabinet minister, told the BBC, including when and how Article 50 — the formal process for leaving the European Union — should be invoked.

Brexit: France and Germany 'in agreement' over UK's EU exit

37 06 2016

German Chancellor Angela Merkel and French President Francois Hollande have said they are in "full agreement" on how to handle the fallout from the UK's decision to leave the European Union.
Mr Hollande warned that "separated, we run the risk of divisions, dissension and quarrels".
The two will hold talks later in Berlin amid a flurry of diplomatic activity in the wake of so-called "Brexit".
The pound fell further in early trading in Asia on Monday as markets reacted.
UK Chancellor George Osborne made a statement before the start of trading in the UK in a bid to calm markets.
He said the UK was ready to face the future "from a position of strength", although he accepted the economy would have to confront challenges and that further volatility on financial markets was likely.

Nervous Greeks worry Brexit may lead to Grexit

By Richard Galpin
BBC News, Athens
26 June 2016

Its people and government are embittered by the imposition of harsh austerity measures by the EU and IMF.
Those bailout conditions have brought years of deep recession and high unemployment, but have done little to reduce Greece's huge debt burden.
And as a frontline country in the migrant crisis, Greece feels let down by Brussels and EU member states, in its struggle to cope with the arrival of more than a million refugees and migrants over the past 18 months.
The anger shows in a pan-European survey published by the Pew Research Center earlier this month, in which Greeks top the table in their response to many of the questions asked.
For example, 71% of those who took part had an unfavourable view of the EU - far higher than in the UK.
More than 90% disapproved of the way the EU was handling economic issues and the migrant crisis.

Sterling and euro struggle as Brexit shock lingers

 Mon Jun 27, 2016 3:37am EDT


Sterling stayed under siege on Monday, holding above a 31-year low against the dollar, with sentiment distinctly sour after Britain opted to exit the European Union, triggering shockwaves across global markets.

The euro was also under pressure, pulled down by sterling, as Brexit clouded the future of the European Union. Safe-haven currencies like the yen and the Swiss franc extended gains, much to the discomfiture of the Japanese and Swiss central banks.

Sterling was down 1.8 percent at $1.3460 GBP=D4, having hit a trough of $1.3228 on Friday, its lowest since 1985. It recovered from a low of $1.3356 struck in Asia on Monday after British Chancellor George Osborne sought to assure markets that he was staying on and that the economy was in good shape.

Friday, June 24, 2016

Brexit: what happens when Britain leaves the EU

Updated by Timothy B. Lee on June 24, 2016, 12:20 a.m. ET


Voters have voted in favor of Brexit: British exit from the European Union. That means that in the coming months, British and European leaders will begin negotiating the terms of Britain's departure.

Britain's exit will affect the British economy, immigration policy, and lots more. It will take years for the full consequences to become clear. But here are some of the most important changes we can expect in the coming months.

The process of leaving the EU will take years

A Brexit vote is not legally binding, and there are a few ways it could theoretically be blocked or overturned. However, as the BBC notes, "it would be seen as political suicide to go against the will of the people as expressed in a referendum."

China Is Not Trying to ‘Rule the Waves’

 06/23/2016 02:10 pm ET

The Huffington Post

Liu Xiaoming
China’s ambassador to Great Britain

LONDON — “Rule, Britannia! Rule the waves!” This was the patriotic chant of the British Royal Navy when the British Empire was taking shape. That naval power was the force that enabled Britain to rise to world dominance 250 years ago.

Today, some suggest that China is singing a 21st-century version of this famous song with new verses: “China rule the waves“. These commentators imply China is turning the South China Sea into a “South China Lake“ by building military bases and blocking the freedom of navigation.

Britain shocks world: breaks with European Union, British leader steps down

The Washington Post

By Griff Witte, Karla Adam and Dan Balz June 24 at 3:51 AM
LONDON — British voters defied the will of their leaders and international allies by cutting ties with the European Union in a stunning result Friday that threw financial markets into turmoil and forced Britain’s prime minister to resign.

As Britain absorbed the ground-breaking news, the political fallout reached to the highest level with Prime Minister David Cameron saying he would step down after championing the campaign to remain in the European Union.

Five alarming immediate reactions to Brexit from the markets

By Zachary A. Goldfarb June 24 at 12:51 AM

The Washington Post

The United Kingdom voted Thursday to leave the European Union, a historic turn that underscored the deep fraying of the European political and economic union. It will take days, months and years to fully grapple with the consequences, but the earliest reactions from markets seemed to confirm experts' fears that Brexit would be deeply disruptive. While markets have previously been buffeted by global financial shocks -- including Greece's crisis last year -- many experts did not think the U.K. would actually take the gamble of leaving the E.U. It's certainly possible that markets will calm down overnight and throughout the weekend — no one can promise to offer an accurate forecast — but immediate signs from across the world were alarming.

Thursday, June 23, 2016

ECB lends a helping hand to Greece

Greek's ailing banks will be given access to the European Central Bank's refinancing program. The move brings Greece closer to financial normalization, a gift for its compliance in passing tough austerity measures.

Deustche Welle

Cash-strapped Greek banks will be able to borrow cheap money from the ECB starting June 29, the ECB's Governing Council decided on Wednesday.
This requires that the ECB waives its minimum rating requirement, allowing Greek banks to post government-guaranteed debt - even though it is rated as "junk" - as collateral in exchange for ECB funding.
Greek brokerage Euroxx said the move "will be essential for the reduction of Greek banks' funding costs, which along with the gradual easing of capital controls should also help the all-important return of deposits into the system."

Pound, Euro Rise Ahead of Brexit Vote

Recent polls suggest stronger support for the “Remain” camp easing investors’ fears

The Wall Street Journal

Updated June 22, 2016 4:49 p.m. ET

The pound and euro rose against the dollar on Wednesday, as markets were relatively calm a day ahead of the U.K. vote on continued European Union membership.

The pound was recently quoted up 0.3% at $1.4691. The euro recently rose 0.5% to $1.1297.

The referendum over the so-called Brexit is scheduled for Thursday. The U.K. Treasury has estimated a British departure from the EU would drag down the pound by at least 12%. Analysts expect the euro also would be negatively impacted in the event of a Brexit, which could raise questions about the future of the 28-member bloc.

U.S. warns China against provocations once court rules on sea claims

Wed Jun 22, 2016 6:43pm EDT



The United States warned China on Wednesday against taking "additional provocative actions" following an impending international court ruling on the South China Sea that is expected to largely reject Beijing's broad territorial claims.

A senior State Department official voiced skepticism at China's claim that dozens of countries backed its position in a case the Philippines has brought against Beijing and vowed that Washington would uphold U.S. defense commitments.

Wednesday, June 22, 2016

Greece's bailout funds released; EU's Juncker hails Greek efforts

Tue Jun 21, 2016 8:16am EDT Related: WORLD, GREECE


Greece got more than 7 billion euros in bailout funds on Tuesday after a review of the country's progress in implementing economic reforms, the head of the euro zone's bailout fund told reporters in Athens.

Greece needs the money to pay off growing state arrears, maturing ECB bonds and International Monetary Fund loans. Talks with its foreign creditors over Greece's efforts to implement a reform program have dragged on for six months.

Friday, June 17, 2016

Greece Gains Fresh Loans From Eurozone Fund

Approval of $8.4 billion in loans should ensure Greece doesn’t default to creditors this summer

The Wall Street Journal

June 17, 2016 3:48 a.m. ET

LUXEMBOURG—Senior officials from eurozone finance ministries agreed Friday on a disbursement of fresh loans to Greece worth some €7.5 billion ($8.4 billion), bringing to a conclusion a protracted review of the country’s bailout and ensuring the country doesn’t default to its creditors later this summer.

Thursday, June 9, 2016

Europe Prepares to Pick Who Can Run Greece’s Banks

Greece agreed to implement rules on bank boards as part of the country’s bailout last year

The Wall Street Journal

June 8, 2016 5:30 a.m. ET

ATHENS—European authorities are seeking to replace a third of the board members at Greece’s major banks, among the toughest actions by regulators since the financial crisis. And Louka Katseli is a major target.

The former socialist parliamentarian was named chairwoman of National Bank of Greece SA last year, one of several politicized appointments that European regulators say saps investors’ confidence in Greek banks and makes it harder to clean up a mountain of bad loans.

Wednesday, June 8, 2016

Greece Secures Bailout Money With Airport Real Estate Deal

JUNE 7, 2016

The New York Times

ATHENS — Greece on Tuesday signed a major privatization deal that will fulfill a key condition for the release of further bailout funding, but it will also displace thousands of refugees.

The deal, for a huge luxury real estate project on the site of the capital’s former international airport, was made in a memorandum of understanding between the state privatization agency, Taiped, and a consortium of Greek, Arab and Chinese companies. The land sits on a prime piece of coastline in Elliniko in southern Athens.

Elliniko is part of an ambitious privatization program by Greece’s leftist-led government and the country’s international creditors. Apart from Greece’s power board and other state companies, the portfolio of Greek assets for sale includes former government buildings, beaches and hotels.

The deal, which was frozen for a year and a half because of protests, was hailed as a breakthrough. Taiped’s chairman, Stergios Pitsiorlas, said the site, which covers four square kilometers, or 1.5 square miles, would accommodate “the largest urban regeneration project in Europe,” and create thousands of jobs for the debt-ridden nation. The site will also have the largest metropolitan park in Europe, he said. The office of Prime Minister Alexis Tsipras said the investment would help “restart the economy.”

Currently, however, the site is home to some 3,000 refugees who live in a makeshift settlement in the former airport building. The structure also houses several small companies, chiefly shipping and advertising firms. It had served as sports venues for the 2004 Olympics in Athens.

The government has promised to clear the site and relocate the refugees to a yet-to-be-determined location by November.

The deal was one of the few loose ends needed for creditors to sign off on 7.5 billion euros, about $8.5 billion, in bailout money after the approval of fresh austerity measures in recent weeks.

Addressing the European Parliament in Strasbourg, France, on Monday, Pierre Moscovici, the European commissioner for economic and financial affairs, said Greek authorities had done “95 percent of the changes necessary” to unlock the money.

First signed by the previous conservative-led coalition in November 2014, the privatization deal was held up after protests by local residents and authorities.

It was clinched after locals “came around to the idea,” Mr. Pitsiorlas said in an interview. The developers also agreed to demands by the Greek state for the site to include more green spaces, and to pay maintenance costs. The site will also have malls, golf courses and luxury homes.

The consortium of Lamda Development, the Abu Dhabi-based real estate firm Al Maabar and the Chinese conglomerate Fosun International has pledged 915 million euros, about $1 billion, to lease the plot for 99 years. Another 7 billion euros, about $7.9 billion, will go toward the creation of parks, luxury homes, golf courses and the extension of the public transportation and drainage network over 15 years. According to Mr. Pitsiorlas, the project would create more than 40,000 jobs.

The “new living standard” envisioned for Elliniko in a video on Lamda Development’s website is a far cry from the current state of the site, described as a “mass ghetto” by a local mayor, Yiannis Konstantatos.

Despite pressure from creditors to sell off state assets, a succession of governments have raised just over 2.5 billion euros from privatizations, including the leasing out of Greek regional airports and the Greek horse race betting organization, compared to an initial target of 50 billion euros.

Tuesday, June 7, 2016

Greek Merchants Cry Foul as Netflix, Airbnb Escape New Taxes

 Nikos Chrysoloras

June 7, 2016 — 4:03 AM EEST


For Panos Papadopoulos, what’s worse than the Greek government’s new taxes is that they don’t apply to his overseas rivals.

The chief executive officer of Forthnet SA, Greece’s biggest pay-television company, says the new levies make his battle against the likes of Netflix Inc. even harder. The story is similar for hotel-industry executives who say they face higher taxes that Internet-based services like Airbnb Inc. escape.
For its latest bailout tranche from creditors, Greece has reached deeper into its economy and is raising taxes on everything from beer, Internet use, phone services to pay-TV. It has increased the general sales levy and income taxes, prompting businesses to say growth will be damped in an economy that has shrunk by more than a quarter since 2008. Executives like Papadopoulos say what’s more galling is that the new levies give companies operating outside Prime Minister’s Alexis Tsipras’s jurisdiction an edge.

In Greece’s Economic War of Attrition, Tsipras Counts on Peace

 Marcus Bensasson

 Nikos Chrysoloras

June 6, 2016 — 5:00 AM EEST


From street protests and collapsing governments to eleventh-hour deals and financial lifelines, Greece has gotten used to lurching from crisis to crisis during its endless economic meltdown.

Prime Minister Alexis Tsipras is relying on it being different this time after finance ministers in the euro region agreed to disburse more funds and the European Central Bank on Thursday said it would be willing to let banks increase their access to its cheaper credit. Even Eurogroup head Jeroen Dijsselbloem, the face of Europe’s standoff with Tsipras last year, said “an important corner” had been turned.

Saturday, June 4, 2016

French Prime Minister Expresses Support for Greece

France is interested in investing in Greece in areas of energy, transportation and tourism

The Wall Street Journal

June 3, 2016 11:52 a.m. ET
ATHENS—French Prime Minister Manuel Valls on Friday expressed his country’s interest in investing in Greece and promised the crisis-battered country more support with reforms needed to overcome the financial crisis, as well as help in dealing with the refugee crisis.

“A eurozone without Greece, a Schengen Treaty without Greece, represents another view of Europe that we do not share,” Mr. Valls said during a press conference with his Greek counterpart Alexis Tsipras.
He said he was confident the next bailout funds for Greece would be disbursed soon and added that he hoped a solution for Greece’s debt problems would be found.

Why Greece’s Syriza Party Is Embracing Austerity Now

COMMENTARY by  Sotirios Zartaloudis  JUNE 3, 2016, 1:00 AM EDT


Question is, how long will it last?
For more than five years, Greece has been dominating the global news, with fears of default and an exit from the Eurozone or even the European Union (EU). While experts predict political and financial disaster, I would say Greece appears to be returning to some level of normalcy, although it still has a long way to go before it returns to economic and political stability.