EU Week Ahead Dec. 9-13: Pre-Christmas Scramble

December 9, 2013, 4:43 AM

By Tom Fairless

The Wall Street Journal

The pre-Christmas summit bonanza moves into full swing this week, as European Union governments scramble to finalize legislation that they pledged to have in place by year-end. In particular, EU finance ministers hope to reach a deal on a system to centralize control of failing banks, known as the single resolution mechanism: Germany has so far held out against the European Commission’s plan for a central decision-making authority and fund, which it worries could violate EU treaties. Euro-zone finance ministers will also gather to discuss the progress of the bloc’s bailed-out members, with Greece, as ever, high on the agenda.

China Adopts Board-Game Strategy to Blunt U.S. Pivot to Asia

By Bloomberg News  Dec 10, 2013 8:42 AM GMT+0200

The foreign policy strategy emerging from China’s new leadership may include a series of incremental steps calibrated to blunt U.S. influence across Asia and sow doubt about America’s commitment to its allies in the region.

Potential next steps following last month’s imposition of an air defense zone over the East China Sea in the face of U.S. condemnation include more vigorously challenging aircraft that enter the area, imposing a similar zone over disputed territory in the South China Sea and asserting naval control over islands also claimed by other nations.

Greece: Public sector no longer too large

By Associated Press, Published: December 6

ATHENS, Greece — Greece no longer has too many public servants and is close to reaching staff reduction targets demanded by bailout lenders two years before the deadline, the government said Friday.

Administrative Reform Minister Kyriakos Mitsotakis also insisted that his bailed out eurozone member country is on the brink of recovery.

The number of workers on the state payroll has been slashed from 913,000 at the end of 2009 to 681,392 on Nov. 30, with annual spending on wage costs reduced by just over one-third, the government said.

Slower China inflation reduces worries of tighter policy

BY KEVIN YAO

BEIJING Mon Dec 9, 2013 2:58am EST

(Reuters) - China's annual consumer inflation unexpectedly slowed in November, easing market fears of any imminent policy tightening as authorities meet this week to outline their policy and reform priorities for 2014.

Rising money market rates and bond yields indicate the People's Bank of China (PBOC) is tightening liquidity conditions, to reduce debt levels and contain credit growth, but there is little sign of a sharp turnaround in monetary policy.

Annual consumer inflation unexpectedly slowed to 3 percent in November from an eight-month high of 3.2 percent, the National Bureau of Statistics said on Monday. Analysts had expected the inflation rate to hold steady at October's level.

Greece's Reforms Have Only Cracked the Surface

Powerful vested interests thrive on the levies, fees, subsidies and barriers to entry that Greece needs to eliminate.

The Wall Street Journal

By ARISTIDES N. HATZIS

Dec. 5, 2013 3:15 p.m. ET

Last week Ángel Gurría, the secretary-general of the Organization for Economic Co-operation and Development, visited Athens to present the OECD's latest economic survey of Greece. Since 2010, the report said, Greece "has made impressive headway in cutting its fiscal and external imbalances and implementing structural reforms to raise labor market flexibility and improve labor competitiveness."

But the OECD also emphasized that "more needs to be done." The organization's assessment of competition in four key sectors in Greece, also released last week, identified 555 problematic regulations and 329 provisions.

Greek Parliament Approves 2014 Budget

Move Comes As the County and Bailout Creditors Are at Odds Over Budget Cuts for Next Year

The Wall Street Journal

Greece's parliament early Sunday morning approved the government's 2014 budget, ahead of an important meeting of eurozone finance ministers next week and despite not having agreed with bailout creditors over further cutbacks needed for next year.

By Nektaria Stamouli

ATHENS—Greece’s parliament early Sunday morning approved the government’s 2014 budget, ahead of an important meeting of eurozone finance ministers next week and despite not having agreed with its bailout creditors over further cutbacks needed for next year.

Corruption in the Middle East

More than red tape

Dec 8th 2013, 18:52 by S.B. | MANAMA

The Economist

THE latest Corruption Perceptions Index by Transparency International, a lobby, does not make happy reading for those in the Middle East. Five Arab countries come among the bottom ten countries for corruption: Somalia, Sudan, Libya, Iraq and Syria. The highest ranking of the 177 states included in the study is the UAE at 26. Qatar comes two places further down. Israel fares slightly worse in 36th position. The other Gulf countries do best among the remaining Arab states: Bahrain, Oman, Saudi Arabia follow the UAE and Qatar. Egypt. which desperately needs to kick start its economy after almost three years of turmoil, comes in at a lousy 114 (joint with Indonesia).

Nelson Mandela

The long walk is over

Dec 5th 2013, 22:10 by The Economist

Strikes in Greece

The Economist

University staff have been on strike for 13 weeks without an end in sight

Dec 7th 2013 | ATHENS |

WHAT a difference a crisis can make. The same Greek students who used to stage months-long sit-ins to press for a bigger say in running university affairs are now desperate to get back to studying. A strike by administrative staff has shut Athens University and the Athens polytechnic, the country’s best higher-education institutions, for 13 weeks. New undergraduates have been unable to register for courses, let alone attend classes. Striking administrators have locked lecture halls, libraries and laboratories and kept the keys. “We’ve effectively lost the first semester of this academic year…so dozens of my students won’t be able to take their degrees on time,” says a frustrated law professor.

Kazarian Says Greece Needs Clean Numbers for Investors

By Marcus Bensasson - Dec 6, 2013 2:01 AM GMT+0200

Bloomberg 

Paul Kazarian, the U.S. investor buying up Greek government bonds, calls the European Union’s accounting “completely irrational” and wants to help finance an alternative to allow Greece to return to the debt markets.

The founder of Japonica Partners & Co. said in a Dec. 3 interview in Athens that applying International Public Sector Accounting Standards would give bond markets the same kind of audited financial statements that equity investors are accustomed to. Kazarian, who started a tender offer for the Greek securities in June, said the EU method of measuring member states’ public finances overstates the level of indebtedness.

“If you really want to be back in the capital markets and soon, you have to deliver, you have to show some early wins,” Kazarian, 58, said. “Show your debt number, give access to it and verify it, and then have the dialogue: ‘So which number is right?’ Is it a legal definition that has absolutely no economic rationality to it, or is the world-class standard the right debt number?”

Greece Struggles to Outlaw Its Golden Dawn Fascist Party

Conservative Government Mounts Risky Effort to Declare Group a Criminal Organization

The Wall Street Journal

By MARCUS WALKER and MARIANNA KAKAOUNAKI

Updated Dec. 4, 2013 11:37 p.m. ET

PIRAEUS, Greece—At a dark crossroads here in September, Greek police kept a safe distance while black-clad activists from the fascist movement Golden Dawn chased and attacked Pavlos Fyssas, a 34-year-old rapper.

China Bans Financial Companies From Bitcoin Transactions

By Bloomberg News - Dec 5, 2013 12:25 PM GMT+0200

China’s central bank barred financial institutions from handling Bitcoin transactions, moving to regulate the virtual currency after an 89-fold jump in its value sparked a surge of investor interest in the country.

Bitcoin plunged more than 20 percent to below $1,000 on the BitStamp Internet exchange after the People’s Bank of China said it isn’t a currency with “real meaning” and doesn’t have the same legal status. The public is free to participate in Internet transactions provided they take on the risk themselves, it said.

The ban reflects concern about the risk the digital currency may pose to China’s capital controls and financial stability after a surge in trading this year made the country the world’s biggest trader of Bitcoin, according to exchange operator BTC China. Bitcoin’s price jumped more than ninefold in the past two months alone, prompting former Federal Reserve Chairman Alan Greenspan to call it a “bubble.”

Global shares stabilize after sell-off, euro firm before ECB

BY MARC JONES

LONDON Thu Dec 5, 2013 7:43am EST

(Reuters) - European shares steadied on Thursday after three days of selling, as focus turned to whether the European Central Bank will offer any new economic stimulus after the Bank of England left its interest rates at a record low.

Markets remained under pressure amid speculation about the future of U.S. monetary stimulus. That kept bond yields elevated and left shares struggling to recover from this week's declines.

European shares .FTEU3 were virtually flat before the 1245 GMT ECB rate decision and 1330 GMT news conference, as traders waited to hear what the head of the bank, Mario Draghi, had to say..EU

This one number explains how China is taking over the world

Posted by Neil Irwin on December 3, 2013 at 12:40 pm

The Washington Post

An announcement Tuesday by the obscure-sounding Society for Worldwide Interbank Financial Telecommunication, better known as SWIFT, may not get much ink. China's currency, it reported, was used in 8.66 percent of global trade finance transactions in October, the group said. It's now the No. 2 most widely used currency for trade finance, supplanting the euro.

But that is a lot more important than it might sound. It gives an important window into how the global economy is changing--and why America's long reign of economic dominance is at risk.

Greek deputy PM says lenders 'footdragging' on bailout review

ATHENS Mon Dec 2, 2013 8:01pm IST

(Reuters) - Greece's deputy prime minister accused its lenders of Monday of obstructing bailout talks after inspectors from the EU and IMF postponed a visit over a lack of progress on reforms.

The troika of the European Commission, the European Central Bank and the International Monetary Fund have been pushing Greece to accept measures that do nothing to fix the country's finances, said Evangelos Venizelos, also head of the left-wing PASOK party, a junior partner in the coalition government.

"Nothing justifies a new round of friction, foot-dragging and tension with the troika. Nothing," Venizelos said in a speech at a conference.

GREECE - Factors to Watch on December 3

Tue Dec 3, 2013 1:05pm IST

ATHENS, Dec 3 (Reuters) - Here are news stories, press

reports and events, which may affect Greek financial markets on

Tuesday:

   

    GREEK DEPUTY PM SAYS LENDERS "FOOTDRAGGING" ON BAILOUT

REVIEW

    Greece's deputy prime minister accused its lenders of Monday

of obstructing bailout talks after inspectors from the EU and

IMF postponed a visit over a lack of progress on reforms.

   

Why China is fixated on the Moon

David Shukman

Science editor

BBC

The Moon could be a "beautiful" source of minerals and energy, a top Chinese scientist has told the BBC.

Exotic materials including helium-3 and the potential for solar power could prove invaluable for humankind, he says.

The comments come from Prof Ouyang Ziyuan of the department of lunar and deep space exploration.

His first interview with the foreign media provides insights into China's usually secretive space programme.

Prof Ouyang was speaking ahead of the first Chinese attempt to land an unmanned spacecraft on the lunar surface.

Golden Dawn Rally: Greece's Ultra-Right Party Holds Protest Outside Parliament

Reuters  |  Posted: 11/30/2013 2:20 pm EST

ATHENS, Nov 30 (Reuters) - About 1,000 supporters of Greece's Golden Dawn party gathered outside parliament on Saturday to protest against the pre-trial detention of their leader Nikolaos Mihaloliakos on charges of forming a criminal organisation.

Clad in black clothes, carrying torches and Greek flags, the ultra-right party's supporters shouted slogans such as "hands off Golden Dawn, don't jail nationalists" to the sound of Greek folk and marching songs.

The protest took place under the watch of riot police, mobilised to shield it from counter-rallies by rival leftist groups nearby. Events unfolded peacefully after police banned all marches in the area to prevent clashes.

Metro-North Passenger Train Derails in New York, Killing Four

Officials Say 63 Injured in Commuter Train Cars off Tracks Near Spuyten Duyvil Station on Hudson Line

The Wall Street Journal

By TED MANN, ALISON FOX And MARA GAY

Updated Dec. 1, 2013 11:28 a.m. ET

A Metro-North train derailed in New York City Sunday morning, killing four people on board and scattering rail cars near the water's edge, authorities said.

The southbound diesel train on the Hudson line derailed about 100 yards from the Spuyten Duyvil station in the Bronx at about 7:30 a.m., a railroad spokeswoman said. Officials said there were 63 others injured, with 11 in critical condition.

The people’s panopticon

The Economist

It is getting ever easier to record anything, or everything, that you see. This opens fascinating possibilities—and alarming ones

Nov 16th 2013 | SAN FRANCISCO

ABOUT halfway through Dave Eggers’s bestselling dystopian satire on Silicon Valley, “The Circle”, the reader meets Stewart, a bald, silent, stooped 60-year-old who has “been filming, recording, every moment of his life now for five years”. Stewart is the first of the novel’s characters to make all his actions visible to anyone with a computer who cares to look—the first “transparent man”.