Will the IMF Apologize to Greece?

Fund's Failure to Recognize Athens' Fiscal Success Has Had Negative Consequences

The Wall Street Journal

By SIMON NIXON

June 15, 2014 4:21 p.m. ET

The International Monetary Fund has apologized to the U.K. but what about Greece? Managing Director Christine Lagarde has acknowledged that the IMF'S warning last year that Britain was "playing with fire" by pushing ahead with its deficit-reduction strategy—just at the moment that a robust recovery kicked in—was a mistake.

But this mistake was responsible for nothing worse than a few red faces—unlike the IMF's slowness to recognize Greece's remarkable success in delivering a 2013 budget surplus before interest costs. This had real consequences.

China economic clout good for U.S.: Column

Ted C. Fishman 4:05 p.m. EDT June 15, 2014

USA Today

Instead of feeling threatened, Chinese buying power can help us and improve relations.

Early this spring, the World Bank announced that, by one measure, the size of the Chinese economy at the end of 2011 was nearly equal to that of the U.S. and, this year, it will be bigger. Americans are fearful of China lately. A bigger economy seems to be giving China sharper elbows. The Asian giant has been pressing territorial demands. China's military supports cyber spies who steal American industrial secrets. China's President Xi Jinping warns the U.S. in speeches that America will get burned if America stymies China's assertion of its goals.

Should Americans feel threatened? Surprised?

Can Iraq Survive?

By: Daniel Benjamin

The Boston Globe

Opinion | June 12, 2014

The news from Iraq has been so bad for so long, it has become difficult to distinguish the merely depressing from the genuinely disastrous. But the fall of Mosul, the country’s second largest city, to jihadi forces this week provided a shock well above and beyond the quotidian misery — one that looks like a turning point, or even an end point, for post-Saddam Iraq.

Former Finance Minister Named Greece's Central Bank Governor

Appointment of Yannis Stournaras Is Seen as Ensuring Continuity of Overhaul Drive

The Wall Street Journal

ATHENS—Former Greek Finance Minister Yannis Stournaras was named the country's new central bank governor, a move that ensures continuity in Greece's overhaul drive.

In a statement, the general council of the Bank of Greece TELL.AT +0.60%  said it had unanimously recommended Mr. Stournaras to the position, which must now be approved by Greece's government but which is seen as a formality.

The announcement was expected following this week's cabinet reshuffle and comes after months of lobbying by Mr. Stournaras, 57 years old, who was eager to leave government and take over the helm at the central bank. He will succeed Gov. George Provopoulos when his six-year term ends next week.

Greece Has A New Finance Minister. What Does It Mean For Investors In Greek Equities?

Disclosure: I own GREK, NBG, CMRE, and DRYS

Forbes

Yannis Stournaras is out and Gikas Hardouvelis is in — via a Greek government restructuring announced by Prime Minister Antonis Samaras recently.

Like Stournaras, Hardouvelis brings strong academic credentials to the country’s most important ministry, and a wealth of experience as an advisor to the former Prime Minister Costas Simitis, and as chief economist at Eurobank Group.

Mr. Hardouvelis’ appointment comes at a time the country is striving to get out of a depression which parallels that of the Great Depression in the 1930s.

A Plan to Revitalize Greece Harvard Business Review

By Alexander S. Kritikos  Jun 9, 2014 3:00 PM GMT+0300

Bloomberg

Greece is finally showing signs of recovering from its 2008 crash. However, as much as macroeconomic reforms are needed, the future of the Greek economy will be determined by its competitiveness, which concerns costs, but is also measured by innovation.

In that regard, Greece finds itself at a crossroads. It can improve its competitiveness by reducing costs in its traditional sectors, such as tourism, agriculture, and trade. Or it can aim higher – by laying the groundwork for higher value-added goods production.

Samaras Names Hardouvelis New Greek Finance Minister

By Nikos Chrysoloras and Paul Tugwell  Jun 10, 2014 10:35 AM GMT+0300

(Corrects debt-to-GDP figure in second paragraph, spokeswoman in fifth.)

Greek Prime Minister Antonis Samaras named Gikas Hardouvelis as the country’s new finance minister, replacing Yannis Stournaras in a cabinet overhaul.

Hardouvelis will try to lead the debt-stricken nation out of a six-year recession and strike a deal with euro-area member states later this year on relieving some of Greece’s debt burden. Debt is forecast to peak in 2014 at 177.2 percent of gross domestic product according to the latest review of the country’s bailout program.

Germany's Schaeuble says 3rd Greek bailout likely to be less than 10 bln euros-magazine

BERLIN, June 1 Sun Jun 1, 2014 9:10am EDT

(Reuters) - German Finance Minister Wolfgang Schaeuble reckons a third bailout for Greece would be less than 10 billion euros, significantly smaller than each of the previous aid packages, German magazine Focus reported.

Greece was cut off from markets in 2010 as the true scale of its debt burden became apparent. After four years of painful measures to contain debt, two bailouts totalling 240 billion euros and a hit on private bondholders, the Greek economy is expected to return to modest growth this year.

Ukraine Forces Appear to Oust Rebels From Airport in East

By SABRINA TAVERNISE and ANDREW ROTHMAY 26, 2014

The New York Times

DONETSK, Ukraine — The new Ukrainian government struck the separatists in this eastern province with a major military offensive on Monday, battling them over an important provincial airport in ground fighting that lasted for hours. The rebels were left scattered and shaken, just one day after a successful national election they had tried to disrupt.

The airport battle was the first time the Ukrainian military had moved so aggressively against the separatists, who took over government buildings in two eastern provinces in March, after weeks of low-grade military maneuvers meant to stop their spread to other areas.

China Said to Push Banks to Remove IBM Servers

By Bloomberg News  May 27, 2014 9:58 AM GMT+0300

The Chinese government is pushing domestic banks to remove high-end servers made by International Business Machines Corp. (IBM) and replace them with a local brand, according to people familiar with the matter, in an escalation of the dispute with the U.S. over spying claims.

Government agencies, including the People’s Bank of China and the Ministry of Finance, are reviewing whether Chinese commercial banks’ reliance on IBM servers compromises the country’s financial security, said the four people, who asked not to be identified because the review hasn’t been made public.

The review fits a broader pattern of retaliation after American prosecutors indicted five Chinese military officers for allegedly hacking into the computers of U.S. companies and stealing secrets. Last week, China’s government said it will vet technology companies operating in the country, while the Financial Times reported May 25 that China ordered state-owned companies to cut ties with U.S. consulting firms.

China and Japan trade barbs after close encounter over South China Sea

Chinese defence ministry calls on Japan to stop all reconnaissance activity after jet incident over disputed territory

Associated Press in Beijing

theguardian.com, Sunday 25 May 2014 16.10 BST

Chinese and Japanese officials have traded accusations after Chinese fighter jets came within a few dozen metres from Japanese military aircraft that had entered Beijing's air defence zone over the East China Sea.

China's defense ministry claimed that a Japanese surveillance plane and one other entered the zone on Saturday during a joint military drill with the Chinese and Russian navies.

Greece's Golden Dawn to enter EU Parliament for first time

Exit polls give the party, which denies it subscribes to neo-Nazi ideology, around a 10 per cent of the Greek vote

The Guardian

By Fiona Govan, Athens8:29PM BST 25 May 2014

Golden Dawn, Greece’s extreme Right party, looked set to enter the European Parliament for the first time after winning between 9 and 10 per cent of the vote, exit polls showed on Sunday.

The party, which denies accusations that it is a criminal organisation following neo-Nazi ideology, was Greece’s third most popular party in the election and looked set to send three MEPs to Brussels.

“Golden Dawn is the third political power in Greece, it’s the only party that shows such a steep rise,” said Ilias Kasidiaris, the Golden Dawn spokesman who is known to have a swastika tattoo on his upper arm, at party headquarters following publication of exit polls.

Protest Parties Surge in Greece, France in Early EU Votes

By James G. Neuger  May 25, 2014 10:16 PM GMT+0300

 Bloomberg

Protest parties surged in Greece and France in European Parliament elections, in a sign of the anti-European mood across the economic divide opened up by the sovereign debt crisis.

Voters in Greece, the first crisis victim, handed first place to Syriza, the party which argues the bailouts weren’t generous enough, according to a NERIT TV exit poll that gave it as much as 30 percent support. In France, the anti-immigration National Front led with 25 percent, estimates by TNS Sofres, Ipsos and Ifop showed.

“The sovereign people have declared that they are taking their destiny back into their own hands,” Marine Le Pen, head of the National Front, told a rally in suburban Paris broadcast on France 2 television. It is time for “politics of the French, for the French, with the French.”

Greece’s Syriza Wins EU Elections in Warning to Samaras

By Marcus Bensasson and Nikos Chrysoloras  May 26, 2014 9:52 AM GMT+0300

Bloomberg

Greece’s main opposition Syriza party placed first in elections to the European Parliament without winning by a big enough margin to destabilize Prime Minister Antonis Samaras’s government, with almost all votes counted.

“In the short run there is no problem of government stability,” Dimitris Sotiropoulos, associate professor of political science at the University of Athens, said in a phone interview. “While both governing parties have lost several percentage points each, their combined popular support is above the popular support of the main opposition.”

China-Russia Gas Deal Should Unleash A Euro-Fracking Revolution

Forbes

Christopher Helman

Forbes Staff

Russia and China today cut a $400 billion, 30-year deal whereby Gazprom will deliver at least 1.3 trillion cubic feet of natural gas to China annually. Russia will build $55 billion worth of pipelines and processing plants to deliver the gas from Siberia.

This is a lot of gas, about one-fifth of China’s current annual demand. And it should be causing concern across Europe, which last year relied on Russia for about 30% of its gas supply, or about 6 trillion cubic feet.

German state aims to revive "tight" gas fracking

Thu May 8, 2014 2:21pm GMT

* Lower Saxony houses most gas reserves, wants to exploit them

* Aims to raise acceptance in context of shale gas debate

By Vera Eckert

FRANKFURT, May 8 (Reuters) - Germany's state of Lower Saxony plans to launch a legal move in parliament next month that will seek to end a ban on new exploration for deep-lying gas using the "fracking" technology deployed in the country for over 30 years.

$400 Billion Gas Deal Shows Russia Looking To China To Replace Western Money

Forbes

Chris Wright, Contributor

The news that China and Russia have signed a $400 billion deal through which Gazprom will supply China National Petroleum Corp with 30 years of natural gas is the clearest illustration yet that Russia will be looking east, not west, for international funding.

Last week, in Will China Save Russia With Investment?, I reported a series of new Russia-China deals were about to be launched by the two countries’ sovereign wealth funds, the Russian Direct Investment Fund and China Investment Corporation. Those deals have since been announced: they involve Vcanland, a developer of tourism infrastructure and senior living communities; the first ever railway bridge over the Amur River on the Russia-China border; and logistics services investment.In dollar terms, they may have involved as much as $1 billion of investment, but while the number itself is insignificant compared to the outflows Russia is experiencing, the trend is very important – and is underlined by the new gas deal.

Greek current account deficit shrinks in March

Thu May 22, 2014 4:21am EDT

ATHENS, May 22 (Reuters) - Greece's current account deficit

shrank in March from the same month last year, according to

balance of payments figures released by the central bank on

Thursday.

    The deficit stood at 44 million euros ($60.12 million) from

1.24 billion euros in March 2013.

    Tourism revenues rose to 195 million euros in March from 151

million in the same month in 2013.

***************************************************************

    KEY FIGURES (bln euros)        2014         2013

    January                                     -0.295       -0.314

    February                                   -0.709       -0.684

    March                                       -0.044       -1.241

    -------------------------------------------------

    source: Bank of Greece   

($1 = 0.7318 Euros)

 (Reporting by George Georgiopoulos; Editing by Karolina

Tagaris)

A Finland model for Ukraine?

By David Ignatius, Published: May 21

The Washington Post

After months of war fever over Ukraine, perhaps the biggest surprise is that citizens there will be voting to choose a new government in elections that observers predict will be free and fair in most areas.

This electoral pathway for Ukraine seemed unlikely a few weeks ago, given Russian President Vladimir Putin’s annexation of Crimea and his covert campaign to destabilize the Russian-speaking areas of eastern Ukraine. There were dire warnings of a new Cold War, and even of a ground war in Ukraine. The country seemed at risk of being torn apart.

Putin appears, at this writing, to have decided that Russia’s interests are better served by waiting — for the nonaligned government he expects will emerge from Sunday’s elections — than from an invasion or some radical destabilization. The Russian leader may be ready to accept a neutral country, between East and West, where Russia’s historical interests are recognized. During the Cold War, such an outcome was known as “Finlandization.”

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