China: Wealth and Democracy

Will Western levels of income mean that China adopts Western models of democracy?

By Christopher Ernest Barber

June 10, 2014

http://thediplomat.com/2014/06/china-wealth-and-democracy/

In a recent article, I discussed a report tabled by the IMF on China’s economic future. In it, IMF economists Malhar Nabar and Papa N’Diaye argued that if Chinese authorities are able to complete the necessary economic reforms, then China will become a high-income economy by 2030. In nominal terms, high-income economies have a Gross National Income (GNI) of more than $12,616 per capita. This effectively demarcates those nations that are rich and those that are not. Of course, while China will enter the rich nations club, with its current GNI of $5,720, the dragon economy will have a long way to go in order to match the sheer wealth of the United States (which has a GNI of $52,340). Nevertheless, given its relative size, China is set to overtake the United States as the world’s largest economy by 2030.

Russia warns Ukraine of ‘irreversible consequences’ after cross-border shelling

By Karoun Demirjian and Michael Birnbaum July 13 at 7:46 PM

The Washington Post

MOSCOW— Russia on Sunday accused Ukraine of lobbing a shell over the border and killing a Russian civilian and warned of “irreversible consequences,” in a sharp escalation of rhetoric that raised fears of a Russian invasion in Ukraine’s east.

The accusation, which Ukrainian officials denied, set off furious denunciations in Russia, with one senior legislator calling for pinpoint airstrikes on Ukrainian soil of the sort he said Israel was making in the Gaza Strip.

Ukrainian security officials, meanwhile, said that about 100 military vehicles driven by “mercenaries” had attempted to cross the border from Russia early Sunday, and that Ukraine’s military had destroyed some of the vehicles.

Deadlock Blocks Iraqi Leadership Vote as ISIS Makes Gains Toward Baghdad

By ALISSA J. RUBIN and SUADAD AL-SALHYJULY 13, 2014

The New York Times

BAGHDAD — As Iraq’s deadlocked Parliament was again unable to reach a deal to name a new speaker on Sunday, Sunni militants carried out a raid near Baghdad, a symbolically significant attack signaling their intent to move closer, even if only by a few miles, toward the Iraqi capital.

Although the pretext for the delay was a severe sandstorm that prevented northern Iraq’s Kurdish lawmakers from flying to Baghdad, the real reason appeared to be that last-minute deals between the largest Shiite bloc and the Sunnis were falling apart.

Chechen in Syria a rising star in extremist group

(The Washington Post)

BY ASSOCIATED PRESS July 2 at 12:33 PM

BEIRUT — A young, red-bearded ethnic Chechen has rapidly become one of the most prominent commanders in the breakaway al-Qaida group that has overrun swaths of Iraq and Syria, illustrating the international nature of the movement.

Omar al-Shishani, one of hundreds of Chechens who have been among the toughest jihadi fighters in Syria, has emerged as the face of the Islamic State of Iraq and the Levant, appearing frequently in its online videos — in contrast to the group’s Iraqi leader, Abu Bakr al-Baghdadi, who remains deep in hiding and has hardly ever been photographed.

Kurdish region is exploring whether to be part of Iraq or whether to be independent

The Washington Post

BY KAREN DEYOUNG AND STEVEN MUFSON July 2 at 8:46 PM

Iraq’s Kurdistan region is pursuing two separate paths to the future, one as part of Iraq and one as an independent state, said senior Kurdish officials who met with Secretary of State John F. Kerry on Wednesday in Washington.

But even if a suitable government is formed in Baghdad — for Kurds, one that does not include Prime Minister Nouri al-Maliki — “we are not ready to go back to pre-June 9,” when Islamist militants began their advance across the northwest part of the country, said Fuad Hussein, chief of staff to Massoud Barzani, president of the Kurdistan Regional Government.

Russia Demands New Cease-Fire in Ukraine as Foreign Ministers Seek Path to Peace

By DAVID M. HERSZENHORNJULY 2, 2014

The New York Times

MOSCOW — In a stern warning that cited civilian casualties in war-torn eastern Ukraine, Russia on Wednesday demanded that the Ukrainian government reinstate a cease-fire and halt its military operation aimed at suppressing the pro-Russian separatist insurrection that has destabilized the region for more than three months.

“Again we resolutely demand that the Ukrainian authorities — provided they are still able to evaluate sensibly the consequences of the criminal policy they conduct — to stop shelling peaceful cities and villages in their own country, to return to a real cease-fire in order to save human lives,” the Foreign Ministry said.

Why the run on banks?

Bulgaria

Jul 1st 2014, 17:32 by G.K. | SOFIA

IN A country struggling with rampant corruption, a weak judiciary and unstable government, the Bulgarian banking system has consistently won praise for its stable institutions, high liquidity and low risk. In the past few weeks that system has come under attack in the worst run on banks in 17 years.

The central bank said runs on First Investment Bank (FIB) and Corporate Commercial Bank (CCB), the country’s third and fourth largest lenders, in the past two weeks were part of a “deliberate and systematic attempt to destabilise Bulgaria's banking system”. According to the authorities, criminals tried to disrupt the system by sending e-mails and text messages urging people to withdraw their funds from several large banks.

Euro-Zone Inflation Rate Stays at Lowest Level in Over Four Years

Figures Underline the Scale of the Challenge Facing the ECB

The Wall Street Journal

By PAUL HANNON And TODD BUELL CONNECT

Updated June 30, 2014 6:38 a.m. ET

The euro zone's annual rate of inflation was unchanged in June, stuck at its lowest level in more than four years, while bank lending to households and businesses declined in May.

The ECB took steps on June 5 designed to stave off the threat of dangerously low inflation in Europe, including cutting a key interest rate below zero for the first time to get banks to lend more to credit-starved customers.

Greek Bonds Beat Lottery as Funds Surge on Smashed Glass

By Maria Petrakis  Jun 26, 2014 2:01 AM GMT+0300

Bloomberg

The woman who died in a burning Athens bank still smiles at Giorgos Mastorakos on his way to the delicatessen he owns around the corner.

The wreaths and tributes no longer cascade onto the road to mark the spot where she and her two colleagues were killed in violence in May 2010 after the country’s unsustainable debts and ensuing financial decline resulted in the first depression since World War II. At the makeshift memorial that fewer people visit on the anniversary of the deaths, the photo of the woman’s face is framed by an anarchist sign and withering bouquets.

Mastorakos, 64, and his employees helped those who escaped the burning building. “And that’s when the questions began: Did so-and-so get out? Have you seen that person?” he said.

Oil and the Iraqi Civil War: How Security Dynamics May Affect Oil Production

Brookings

Kenneth M. Pollack | June 23, 2014 11:00am

http://www.brookings.edu/blogs/up-front/posts/2014/06/23-oil-iraqi-civil-war-pollack

It should be obvious that a key consideration for the United States arising from the revived civil war in Iraq is its potential to affect Iraqi oil production. Iraq is now the second largest producer in OPEC. And although Americans are ecstatic about fracking, energy experts have been warning that future oil prices are more dependent on increasing Iraqi production than North American shale. In October 2012, the International Energy Agency stated that, “The increase in Iraq’s oil production in the Central Scenario of more than 5 [million barrels per day] over the period to 2035 makes Iraq by far the largest contributor to global supply growth. Over the current decade, Iraq accounts for around 45% of the anticipated growth in global output.”

Is Greece losing its reform drive?

By Hugo Dixon JUNE 23, 2014

Reuters

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

Is Greece losing its reform drive? Prime Minister Antonis Samaras has stuck to a harsh fitness programme for two years. But just as it is bearing fruit, he has sidelined some reformers in a reshuffle. There is only one viable path to redemption for Athens: stick to the straight and narrow.

The Greek economy is not out of the woods yet, although the measures taken to balance public finances and restore the country’s competitiveness are having their effect.

Εξαιρούνται και τα δάνεια του EFSF στη διαπραγμάτευση για μείωση χρέους

Οι ουσιαστικές παρεμβάσεις θα αφορούν τα διμερή 52,9 δισ. ευρώ από τα συνολικά 223,1 δισ. που έχει λάβει η χώρα

Δευτέρα, 23 Ιουνίου 2014 07:01

Ναυτεμπορική

Eκτός της διαπραγμάτευσης για τα μέτρα μείωσης του δημόσιου χρέους μένουν τα δάνεια του EFSF και σε συνδυασμό με την de facto εξαίρεση και των δανείων του Διεθνούς Νομισματικού Ταμείου, οι προσδοκίες για να τεθεί σε βιώσιμη τροχιά το δημόσιο χρέος περιορίζονται δραματικά.

Από το σύνολο των δανείων που έχει λάβει η Ελλάδα μέχρι τώρα, από Ευρωζώνη, EFSF και ΔΝΤ, συνολικού ύψους 223,1 δισ. ευρώ, οι ουσιαστικές παρεμβάσεις περιορίζονται στο ποσό των 52,9 δισ. ευρώ.

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.