By Kenneth Rapoza, Contributor
Indian Central Banker Duvvuri Subbarao said his country does not need any money from the International Monetary Fund, thank you very much. …read more
Source: FULL ARTICLE at Forbes Latest
Portuguese Prime Minister Pedro Passos Coelho has survived a no confidence vote as he struggles to prevent early elections amid deep differences over the austerity measures the country is pursuing in return for rescue funds.
The proposal, pushed in Parliament by the Green Party, failed by 131 votes to 87.
Coelho, who is leader of the Social Democrats, is negotiating with the junior party in the coalition, a couple of weeks after the government almost collapsed. Coelho is also talking with the main Socialist opposition to see if an agreement can be cobbled together.
A deadline of Sunday has been set.
Portugal has been relying on 78 billion euros ($101 billion) of bailout funds from its euro partners and the International Monetary Fund for the past couple years.
Source: FULL ARTICLE at Fox World News
Cyprus’ government says the Cabinet has decided to issue a license to build the bailed-out country’s first casino resort.
Spokesman Christos Stylianides said Thursday that the license will be granted to the successful bidder within 12 months in order to provide a quick boost to public finances and help the battered economy with jobs and revenue.
To prevent the collapse of its wobbly banking sector and avoid bankruptcy, Cyprus signed in March a 23 billion euro ($30 billion) financial rescue deal with it euro partners and the International Monetary Fund.
Under the deal’s terms, Cyprus forced large depositors in the country’s two biggest commercial banks to take steep losses on their savings. The country also imposed restrictions on money transfers and withdrawals to head off a bank run.
Source: FULL ARTICLE at Fox World News
Cyprus’ finance minister says he’s optimistic that international creditors will confirm that the country is sticking to the terms of its financial rescue when they complete their first assessment.
Haris Georgiades says the quickest way to shed the harsh terms of the 23 billion euro ($29.9 billion) bailout that the country signed in March is it to faithfully implement them.
He said Tuesday that the government aims to slash spending by 11 percent by next year, but won’t impose new taxes.
Officials from the European Commission, the European Central Bank and International Monetary Fund begin the assessment Wednesday.
Georgiades said the focus will be on quickly restoring the decimated banking sector back to health in order to get the tanking economy moving again.
Source: FULL ARTICLE at Fox World News
Unions opposing austerity measures in Greece are staging their fourth general strike this year as the government prepares to start axing public sector jobs.
Tuesday’s walkout is disrupting flights, public transport, state hospitals and other services, while demonstrations are planned throughout the day.
The public sector has so far been spared from the job cuts that have hit the rest of the Greek economy since the country got its first international bailout in 2010.
However, the government has been forced to launch the cuts — 15,000 firings by the end of 2014 and 12,500 transfers this year — so it can continue receiving rescue loans from the International Monetary Fund and the other countries using the euro.
Parliament is set to vote on the new measures Wednesday.
Source: FULL ARTICLE at Fox World News
Hungary is considering paying back early a bailout loan from the International Monetary Fund and also wants to close the organization’s office in Budapest.
National Bank of Hungary President Gyorgy Matolcsy said Monday in a letter addressed to IMF chief Christine Lagarde that while they “appreciate the valuable support” the Washington-based group gave the country, the stand-by credit program “is almost complete.” As such, it was no longer necessary for the IMF to keep an office in Hungary.
In 2008, during a Socialist-led government, Hungary received a rescue credit line of 20 billion euros ($25 billion at the time) from the IMF and other creditors. But Prime Minister Viktor Orban’s government chose not to renew the deal in 2010 to avoid closer IMF scrutiny of its economic policies.
Source: FULL ARTICLE at Fox World News
Egypt’s shattered economy was boosted this week by Gulf allies pledging billions of dollars in aid, but analysts say this simply buys time as political turmoil deepens its economic malaise.
The millions of ordinary Egyptians angered by record high unemployment, soaring inflation and chronic fuel shortages who took to the streets two weeks ago demanding Mohamed Morsi’s resignation blamed him for letting the economy nosedive.
Fuel supplies have returned, after panic buying before the military coup on July 3, and three Gulf monarchies relieved at the toppling of Egypt’s Islamist president have pledged $12 billion in assistance.
But dire security problems and political instability mean a return of the tourists and foreign investment that Egypt so desperately needs are a distant prospect.
And progress remains stalled on negotiations with the International Monetary Fund on a $4.8-billion loan.
“Even if they do agree on the loan, I just don’t believe that we’re going to see a flood of investment,” said financial analyst Andrew Cunningham.
“The country has been in turmoil since 2011, there’s just been a military coup and they’re shooting people on the streets. This is hardly an attractive prospect.”
Gulf pledges of financial assistance are a lifeline for the new administration.
Foreign reserves have fallen by almost 60 percent since the revolution that toppled Hosni Mubarak in February 2011, to 14.9 billion dollars in June — the equivalent of just three months of imports.
Kuwait offered $4 billion in cash, loans and fuel, with Saudi Arabia contributing $5 billion and the United Arab Emirates another $3 billion.
But Cunningham warned that, while welcome, the cash injection was not a long-term solution.
“We’re still talking plasters and bandages. The challenges are enormous and they are structural. Egypt’s economy has been badly managed for decades, and it didn’t improve under Morsi.”
Illustrating the severity of the problem, the latest data from Egypt’s official statistics agency shows that unemployment jumped after Mubarak’s ouster and then rose steadily over the next two years to reach a record 13.2 percent in March.
Problems Egypt’s new rulers will have to confront if they are to reverse the inexorable decline include corruption, poor education, a bloated public sector, low productivity and unsustainable food and fuel subsidies.
“They need to fix the entire system,” said Ahmed Galal, head of the Eco Research Forum.
“It’s going to be difficult to do, but it’s doable, with a lot of dedication,” he told AFP, adding that stability and appointing a competent government will be crucial if Egypt’s economic woes are to be resolved.
This week Hazem al-Beblawi, a former finance minister and accomplished economist with long experience of working with international financial institutions, was named prime minister.
But his task of forming a national unity government was immediately complicated by Morsi’s Muslim Brotherhood rejecting any offer of jobs in the new cabinet.
US intelligence firm Stratfor believes the instability goes far beyond political divisions.
It said growing poverty and joblessness, “arguably among the root causes of the uprising in 2011”, was part of a “swelling trend” that motivated the recent protests.
“It is possible that the new government will find …read more
Source: FULL ARTICLE at Fox World News
Icelanders were voting Saturday in a parliamentary election that could return to power the center-right parties that led the country into economic collapse five years ago — and stall plans to join the European Union.
Polls show the Progressive and Independence parties, who oppose EU membership, leading the Social Democrat-Left-Green coalition that has governed Iceland during four years of crisis and uneven recovery.
“The government that many people thought was cleaning up the mess is getting severely punished for the last four years,” said political analyst Egill Helgason. “I don’t know whether they deserve it. In many ways I think not. But this is politics — cruel.”
A volcano-dotted North Atlantic nation with a population of just 320,000, Iceland went from economic wunderkind to financial basket case almost overnight when the credit crunch took hold in 2008.
In the first years of this century — under a coalition of the Independence and Progressive parties — Iceland‘s economy experienced a credit-fueled boom that saw its banking sector grow to nine times annual gross domestic product.
Then all three major commercial banks collapsed within a week of one another in October 2008. The value of the country’s currency plummeted, while inflation and unemployment soared. Iceland was forced to seek bailouts from Europe and the International Monetary Fund.
A wave of protest — dubbed the Saucepan Revolution after the pots and pans banged by demonstrators — ended with the government blamed for the crisis replaced with a left-of-center alliance led by Prime Minister Johanna Sigurdardottir, which opened EU membership talks.
Since then, Iceland has in many ways made a strong recovery. Unemployment has fallen and the economy is growing.
But inflation remains naggingly high, and many Icelanders still struggle to repay home and car loans they took out — often in foreign currencies those value soared after the crash — in the years of easy credit.
Both the Progressive and Independence parties are appealing to voters with promises to ease austerity. Progressive Party chief Sigmundur David Gunnlaugsson is promising to write off some mortgage debt, taking money from foreign creditors.
Independence Party leader Bjarni Benediktsson is offering lower
Source: FULL ARTICLE at Fox World News
Slovenian officials have a message for the world: Don’t panic — we won’t be the next to fall.
The tiny European Union member is trying to convince its people and foreign investors that it won’t be the next in line for a banking system collapse and a messy international bailout.
“We are absolutely no Cyprus,” says new Slovenian Prime Minister Alenka Bratusek. “We don’t need help. All we need is time.”
But time is running out for the Balkan state, once considered an East European success story and a model for the rest of the region on how to build a post-communist economy. With few specifics from leaders on a rescue plan, some economists are skeptical they can live up to their promises.
Slovenia desperately needs fundamental reform of its banking and economic system if it is to avoid the same fate as Cyprus, a fellow member of the 17-strong group of European Union countries that use the euro. The island nation was forced to ask for a bailout from its fellow eurozone countries, the European Central Bank and the International Monetary Fund when it could not afford to support its bloated banking sector.
Now the fear is Slovenia could face the same fate. While its overall public debt load is well below the EU average, the country of 2 million is facing difficulties refinancing its debt. That has fueled fears that Slovenia — which accounts for 0.4 percent of the eurozone’s overall economy — could become the sixth eurozone nation to require assistance.
At the core of Slovenia‘s problems are its state-run banks, which control about 60 percent of the country’s banking sector.
The Alpine country’s banks have been on a lending spree for years, loaning money to unprofitable state companies or privileged officials who used the cash to buy the firms they ran, using the state assets as collateral.
Many such businesses have now collapsed or have huge debts. A recent report by the Organization for Economic Cooperation says that the equity of the state banks has been “virtually wiped out.” As much as 15 percent of all loans are now non-performing, the third-highest ratio in the eurozone, the Paris-based group said.
“In Slovenia, tycoons have stolen everything,” Mico Pavic, a retired construction worker said at
From: http://feeds.foxnews.com/~r/foxnews/world/~3/1xSwTH-vlvY/
Cyprus‘ president says the bailed-out country will open casinos and bolster its tourism sector to get the economy going again.
Nicos Anastasiades unveiled on Friday a first batch of measures he said are designed to boost growth in an economy that is projected to shrink by 13 percent until 2015.
He said Cyprus would also give businesses tax breaks for hiring new workers and set up solar energy parks. Young people will be granted state and church-owned land for cultivation. And those having homes or businesses seized because they’re unable to pay off loans would be able to stay on as renters, he said.
Cyprus agreed last month on a 23 billion euro ($30 billion) rescue package with its euro area partners and the International Monetary Fund.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/S82kNP4FuSM/
By Eamon Murphy
Filed under: GDP, European Union, Economy
Carmen Reinhart and Kenneth Rogoff are at the top of the economics profession, with influence inside and outside the academy. Both have worked in senior positions at the International Monetary Fund; both have chairs at Harvard. Rogoff was a chess grandmaster in his mid-twenties, before giving up the royal game to focus on economics. “I’m not a great mathematician,” he told the Financial Times, explaining the relation between his interests, “but game theory really clicked for me.” This method of analysis offers insight into government behavior during a debt crisis, Rogoff suggested: “One of the reasons that Carmine Reinhart and I hit it off, is that we are both incredibly cynical about governments.”
Now the most influential product of their collaboration – an argument widely considered to have laid the basis for the West’s recent shift toward austerity economics – has been shown to rest in large part on a simple error, a spreadsheet coding mistake discovered by a 28 year-old graduate student at the University of Massachusetts Amherst named Thomas Herndon.
“I almost didn’t believe my eyes when I saw the basic spreadsheet error,” Herndon told Reuters. “I was like, am I just looking at this wrong? There has to be some other explanation.” Herndon asked his girlfriend for confirmation that he wasn’t missing something. He was right, she said.
The story begins with a large-scale research project carried out by Reinhart and Rogoff, investigating hundreds of years of financial crises around the world. The result was a well-received 2009 book, This Time Is Different: Eight Centuries of Financial Folly. They also published a paper based on a selection of their data, titled “Growth in a Time of Debt” (2010), which claimed to show that economic growth slows appreciably once a country’s public debt to GDP ratio gets above 90 percent.
It was an argument bound to receive attention from the press and policymakers, because, according to some projections, the U.S. was set to pass that purported 90 percent red line in the coming decade. And the Reinhart-Rogoff result achieved notoriety on both sides of the Atlantic: Reinhart testified before the National Commission on Fiscal Responsibility and Reform; Paul Ryan cited the study in his 2013 budget, “The Path to Prosperity: A Blueprint for American Renewal”; and European Union Economic and Monetary Affairs Commissioner Olli Rehn spoke in February of “serious academic research” that indicated an economic danger zone above 90 percent debt-to-GDP. (The G20 countries have said they will soon consider a proposal “to cut public debt over the longer term to well below 90 percent of gross domestic product,” The Fiscal Times reports.)
The Washington Post editorial board even presented the “Growth in a
From: http://www.dailyfinance.com/on/reinhart-rogoff-debt-GDP-spreadsheet-error/
The price of oil rose above $88 per barrel on Friday as traders waded back into commodities following sharp sell-offs.
Benchmark crude for May delivery was up 36 cents to $88.09 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract for West Texas Intermediate rose $1.05, or 1.2 percent, to finish at $87.73 a barrel on Thursday.
Oil dropped $2.04, or 2.3 percent, on Wednesday, which was in its fourth daily drop of at least 2 percent in April. Crude had lost $10 a barrel over the past two weeks as the outlook for the global economy weakened and oil supplies remained high. The relatively low prices have rekindled investor interest, analysts said.
A dimmer outlook for global economic growth has caused the price of oil and other commodities to drop sharply. This week China reported slower-than-expected economic growth while the International Monetary Fund lowered its outlook for world economic growth for this year.
In London, Brent crude, which is used to price oil used by many U.S. refiners, was up 40 cents at $99.53 on the ICE Futures exchange.
In other energy futures trading on the Nymex:
— Gasoline rose 0.6 cent to $2.754 per gallon.
— Heating oil rose 1.2 cents to $2.78 a gallon.
— Natural gas fell 0.5 cent to $4.396 per 1,000 cubic feet.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/NBhqUayBAKU/
The price of fell to near $86 a barrel Thursday in Asia after economic data from Europe suggested global demand for energy will remain subdued.
Benchmark oil for May delivery was down 20 cents to $86.48 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract dropped $2.04, or 2.3 percent, to close at $86.68 in New York on Wednesday — the fourth daily drop of at least 2 percent in April.
Economic reports from Europe this week were a disappointment. Germany reported a drop in investor confidence, France cut economic growth forecasts, and unemployment rose in Britain. On top of that, the International Monetary Fund lowered its outlook for world economic growth this year to 3.3 percent from 3.5 percent.
The gloom began Monday, when a report of slower-than-expected economic growth in China helped trigger a broad sell-off in commodities that included the biggest one-day drop in the price of gold in 30 years.
Ample crude supplies globally made it easy for investors to set aside the latest data from the American Petroleum Institute showing a drop in U.S. inventories for the week ending April 12. Supplies fell by 354,000 barrels from the prior week to 384.1 million barrels. A drop in supplies can be due to higher demand but the week to week data is volatile.
In London, Brent crude, which is used to price oil used by many U.S. refiners, was down 18 cents to $97.51.
In other energy futures trading on Nymex:
— Heating oil rose 1.1 cent to $2.746 a gallon.
— Natural gas fell 2.2 cents to $4.192 per 1,000 cubic feet.
— Gasoline fell 0.2 cent to $2.719 per gallon.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/is-eFsX6ifE/
Treasury Secretary Jacob Lew called on Europe‘s leaders to pursue pro-growth policies in the short term rather than trim their budget deficits, noting that the U.S. economy is “inextricably tied” to the health of its global partners.
Lew’s comments were delivered in a speech at Johns Hopkins University School of Advanced International Studies previewing this week’s global finance meetings in Washington.
Earlier this week, the International Monetary Fund lowered its outlook for the world economy this year, predicting that government spending cuts will slow U.S. growth and keep the euro currency alliance in recession.
Lew also said he would keep pressing other countries to avoid pursuing policies aimed at gaining trade advantages. The comments underscored U.S. concerns about China and Japan devaluing their currency to make their products cheaper overseas.
From: http://feeds.foxnews.com/~r/foxnews/national/~3/6AESUMavMG0/
The French government has lowered its growth projections and acknowledged that its won’t deficit fall as quickly as promised.
In a report Wednesday, the government says growth will be just 0.1 percent this year and 1.2 percent next. Those are down from the previous projections of 0.8 percent and 2 percent.
Even after the downgrades, the forecasts are above those expected by others. On Tuesday, the International Monetary Fund slashed its forecasts, predicting France will contract 0.1 percent this year and grow 0.9 percent next.
Since the government has said it won’t cut any more spending, lower growth means higher deficits: As a result, it won’t slash the deficit to 3 percent of annual gross domestic product until next year and won’t balance the budget during President Francois Hollande‘s term.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/HWxxEMu5_Rg/
The price of oil was down slightly Wednesday as some stability returned to commodities markets after wild swings.
Benchmark oil for May delivery was down 7 cents to $88.65 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 1 cent to settle at $88.72 per barrel on the Nymex on Tuesday.
Crude was down almost 3 percent Monday, part of a broad sell-off in commodities that included gold recording its biggest one-day drop in 30 years. Gold and industrial metals fell hard after China reported that economic growth slowed unexpectedly in the first three months of the year. The world’s second-largest economy grew by 7.7 percent over a year earlier, slower than many forecasts.
Separately, the International Monetary Fund on Tuesday said it was lowering its outlook for world economic growth this year to 3.3 percent, down from its forecast in January of 3.5 percent. It expects U.S. economic growth of 1.9 percent this year, down from its January estimate of 2.1 percent. It expects that the combined economy of the 17 euro countries will shrink 0.3 percent in 2013.
Lorraine Tan, director at Standard & Poor’s equity research in Singapore, said that a “pretty sluggish” global economic recovery, increasing energy production in the U.S. and slightly slower growth in China are putting pressure on oil prices.
“The drivers for oil prices to go higher aren’t really there,” she said.
Brent crude, which is used to price oil used by many U.S. refiners to make gasoline, rose 28 cents to $100.19 a barrel on the ICE Futures exchange in London.
In other futures trading on the Nymex:
— Wholesale gasoline rose 1.3 cents to $2.787 a gallon.
— Heating oil rose 0.3 cent to $2.809 a gallon.
— Natural gas rose 2.3 cents to $4.183 per 1,000 cubic feet.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/WDq7Ey3asXw/
Cyprus‘ attorney general says parliament must vote on the 23 billion euro ($30 billion) bailout deal the country has agreed on with international creditors.
Petros Clerides confirmed to the Associated Press on Tuesday that the deal Cyprus reached with its euro partners and the International Monetary Fund must secure parliamentary approval to become valid.
In a written statement Tuesday, deputy government spokesman Victoras Papadopoulos said the government will act according to law.
Cypriot lawmakers have already approved many of the austerity measures that were mandated by the creditors — the European Commission, the European Central Bank and the IMF. They include cuts to government salaries, tax increases and an overhaul of the troubled banking sector.
The new vote will also cover extra measures that have been agreed upon since then.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/mGaNtcZctAM/
A team from the International Monetary Fund has left Egypt without securing a broad backing from the country’s opposition for the government‘s economic plan.
The IMF mission was in Egypt for nearly two weeks of talks with government officials and the opposition around possible political consensus for a $4.8 billion loan request. Egypt is deeply polarized and this has further battered the economy.
Andreas Bauer, who headed the IMF group, said Tuesday the “mission made progress” on “possible financial support.”
The statement suggests a deal still hinges on the government‘s ability to reign in spending on energy subsidies and raise taxes.
Ahmed Kamel of the opposition Congress Party met with the IMF for two hours and says the deal must be done in a way that protects the poor.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/zFhFhWmrrwE/
International debt inspectors have reached an agreement with Greece on the country’s economic reforms, including the firing of civil servants, paving the way for the debt-ridden country to receive the next installment of its bailout pot.
The review by the International Monetary Fund, European Commission and European Central Bank is part of a regular process under which Greece receives installments of its multi-billion euro bailout if it meets certain conditions. Greece has been dependent on the rescue loans since 2010.
In a joint statement Monday, the three institutions said recent steps taken by Greece suggest that targets for March “are likely to be met in the near future.” As a result, they said the eurozone could soon agree to disburse 2.8 billion euros ($3.7 billion) pending from last month.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/EMGG0NmzR-s/
Spain‘s National Court is holding an extradition hearing for a former bank employee wanted by Switzerland for allegedly stealing confidential information related to thousands of customers with Swiss accounts.
Herve Falciani, a French-Italian citizen, allegedly removed data linked to at least 24,000 customers of HSBC’s Swiss subsidiary, potentially exposing many to prosecution by tax authorities in their home countries. He passed a list of names to French authorities.
France‘s former Finance Minister, Christine Lagarde, now head of the International Monetary Fund, relayed the list to the U.S. and many European Union countries.
Spanish politicians oppose Falciani’s extradition, saying he is helping authorities investigate tax fraud, a touchy issue given Spain‘s recession and sky-high unemployment.
French prosecutor Eric de Montgolfier is due to attend Monday’s hearing as a witness.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/qfzixzNNMLI/
