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Debt crisis: nervous world awaits Greek polling day - Daily Telegraph
Without the next tranche of its €130bn bailout Greece could soon default – whoever wins that remains a possibility.
No party is likely to win outright. The final public polls, published on June 4, showed that New Democracy was leading Syriza by two percentage points.
Private polling conducted since suggests that gap has widened a touch.
That would leave New Democracy leader Antonis Samaras able to form a coalition with the fast-diminishing socialist party Pasok and a smaller grouping, the Democratic Left.
None of the parties was able to lead a government after the May 6 election.
Dimitrios Tsmocos, a senior economic aide to Mr Samaras, said a victory for Syriza and its young leader Alexis Tsipras would "transform the Greek economy into a lunar landscape".
Yet New Democracy is also seeking to end many of the harsh cuts contained in the memorandums of understanding between Greece and the European Commission, International Monetary Fund and European Central Bank, which have propelled Syriza's astonishing rise into second place from a party that polled 4pc in 2009.
"The difference is we are seeking a mutually-agreed time extension of the memorandum, not a unilateral abrogation of signed obligations," Mr Tsmocos told The Daily Telegraph.
Greece has so far performed woefully in meeting the memorandum's requirements for economic liberalisation that might have provided encouragement of a recovery.
But troika officials concentrated more on the imposition of large horizontal cuts to pensions and public sector wages, as well as tax hikes, which have helped impoverish millions.
Deepening misery and a sense of a society coming apart are palpable. The riots that scarred the capital's centre for 18 months may have abated, but soup kitchens are overrun, businesses are closing and even the once infamous traffic jams have receded.
Voluntary medical clinics are providing free life-saving drugs every day to hundreds of patients who have lost their health insurance, usually because they have exceeded a year of unemployment.
"This is a state of war, people can't get their basic needs," said Athanassios Kaproassos, an industrial designer who volunteers at the MKIE clinic in southern Athens.
"We have pensioners coming here who have 500 euros to live on and their medication is 300 a month. It is just incredible this is happening in Greece, a modern country in Europe."
Despite Germany's public unwillingness to cut the Greeks any slack, Mr Tsmocos and his party are convinced that "Europe's ears are open" to a more "pro-growth" approach.
"I think the Germans have realized that the fiscal medicine was too strong for the patient and are now reconsidering.
"The question is, is there enough time for Greece and the rest of southern Europe?" he asked.
India govt nominates finance minister for president - Channel NewsAsia
India govt nominates finance minister for president
Posted: 15 June 2012 2113 hrs
NEW DELHI - Indian Finance Minister Pranab Mukherjee, under fire for his recent handling of the rapidly slowing economy, is to step down after being named Friday as the ruling coalition's candidate for president.
The United Progressive Alliance (UPA) government, led by Mukherjee's Congress Party, announced that the 77-year-old minister would be its nominee for the largely ceremonial post of Indian head of state which falls vacant in July.
"There is broad support for his candidature," Congress supremo Sonia Gandhi said in a statement at a meeting of UPA leaders at the residence of Prime Minister Manmohan Singh.
The nomination means Mukherjee will have to resign as finance minister, with television reports suggesting he might step down on June 24.
There was no immediate announcement regarding his likely successor.
Although the president is India's titular head of state, the post is largely ceremonial, with real executive power residing with the prime minister and the cabinet.
Indian presidents are selected by an electoral college comprising MPs from both houses of parliament and state legislatures.
The election will be held July 19.
The choice of who will succeed the incumbent president, Pratibha Patil, has exposed fresh cracks in the increasingly fractured coalition, with its partners clashing over which candidate to put forward.
"The UPA appeals to all political parties and all members of parliament and members of state legislative assemblies to support the candidature of Pranab Mukherjee," Gandhi said in her statement.
Mukherjee's nomination comes at a time of growing criticism of his handling of the economy, which has slowed dramatically at a time of stubbornly high inflation and a depreciating rupee.
"I don't think that I am the depository of all knowledge and and expertise in our government. In our party there are a number of people who can handle the difficult economic situation," Mukherjee told reporters after his nomination.
"The prime minister himself (Manmohan Singh) is an eminent economist and under his stewardship we will overcome the temporary crisis."
In the January-March period, the economy grew just 5.3 percent, its slowest quarterly expansion in nine years.
Earlier this week, Standard & Poor's warned India could be the first of the BRIC emerging economies to lose its investment-grade rating unless the Asian giant revives its growth and spurs reforms.
In April, the firm changed India's credit outlook to negative from stable, maintaining India's rating at "BBB-" but warning it faced at least a one-in-three chance of losing its status if its public finances worsened.
"BBB-" is just one notch above "junk", which carries an increased risk of default and would see India having to pay higher interest rates on its public borrowing.
- AFP/ir
Money & Cost in China (3) - People's Daily Online
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Can foreigners open a bank account in China? If yes, how? Foreigners can open bank accounts in most banks in China. The process is fairly straight forward. A passport is required at whichever bank you choose. In addition, different banks may require ...Throwing money at banks won't solve economic crisis, Ed Balls says - The Guardian
Ed Balls has warned that an emergency multibillion-pound package to inject lending into the British economy still fails to address the lack of economic confidence and demand. The shadow chancellor said the Bank of England's thinking still seemed to be driven by Montagu Norman, the governor who led it through the depression of the 1930s.
He said the measures announced on Thursday night at the Mansion House in London by the chancellor, George Osborne, and the bank's governor, Mervyn King, should have been implemented two years ago and would not work if businesses were not investing.
Osborne warned that the "debt storm" on the continent had left the UK and the rest of Europe facing their most serious economic crisis outside wartime. In a joint proposal between the Bank of England and the Treasury, banks will receive cut-price funds, provided they pass on the benefits to their business customers.
This new "funding for lending" scheme could provide an £80bn boost to loans to the private sector within weeks and alleviate growing fears of a second slump since the start of the financial crisis in 2007.
In a second scheme, within the next few days the bank will begin pumping a minimum of £5bn a month into City institutions to improve their liquidity.
Balls told Sky News: "Simply giving the banks billions of pounds doesn't translate into loans to business. If business is not investing and creating jobs and if our economy is not growing, that's the fundamental problem, and I've said consistently for two years that you can't do this simply by throwing money at the banks.
"You've got to accept that the fiscal plans of the chancellor haven't worked, they've backfired, they've taken us back into recession."
Speaking on BBC Radio 4's Today programme, Balls compared the government's fiscal policy to the 1930s depression era: "It failed then and it's failing now".
He said the announcements were a clear sign that the bank was worried. He did not dismiss the injection of cash for lending in principle, but argued that fiscal, as opposed to monetary policy was critical to recovery, pointing out that, apart from Italy, the UK was the only country in the G20 in recession.
The government has described the plans as an attempt to stretch its "plan A" to the limit. There has been concern from some banks that the plan does not change the dynamic as they will be expected to take the risk on the loans.
The treasury minister Mark Hoban told Today that the government's fiscal tightening had had no impact on growth. He said taxpayers' money would not be at risk as a result of the £80bn bank credit scheme.
Conservative MP Andrew Tyrie, chairman of the Commons treasury select committee, welcomed the plans: "The measures look as if they will encourage lending to businesses by ensuring liquidity is more easily available to banks."
Balls said: "The Bank of England's new funding for lending scheme is a significant admission that the government's existing policies have failed. Businesses will be desperately hoping it is more successful than George Osborne's Project Merlin and credit-easing schemes which have actually seen net lending to businesses fall."
He said Osborne's speech was dangerously complacent. "He is sticking with policies that have choked off the recovery, pushed up unemployment and are leading to £150bn of extra borrowing."
Balls also attacked Osborne over his remarks about a possible Greek exit from the eurozone.
"I was at the Mansion House last night and there was a frisson around the room when our chancellor started openly talking about whether Greece should leave the eurozone. I do not think that is a very wise or sensible thing to do," he told BBC Breakfast.
"I think Greece has got to sort out its issues – and that is a matter for Greece. What I am really worried about in the eurozone is that countries like Spain or Italy – which are huge, to which we as a country are very exposed – they have not sorted out their problems.
"Unless we get a global growth plan going, including in the eurozone, you can't turn this round. I am afraid that our government seems to be urging the wrong actions in Europe as it takes the wrong actions here in Britain too."
The shadow chancellor pointed out that Osborne had "snuck out another U-turn" in his speech, in particular to the objectives of the new financial policy committee at the bank.
"Labour and business organisations like the CBI have been calling for the new financial policy committee to have supporting economic growth as one of its key objectives. The chancellor voted against our amendment on this but in the face of an imminent defeat in the House of Lords he has now backed down."
Debt crisis: tensions mount as Angela Merkel attacks French economy - Daily Telegraph
G20 leaders meet in Los Cabos on Monday afternoon for talks dominated by the deepening eurozone crisis and the result of close elections that could put Greece on course to leave the EU's single currency.
Eurozone finance ministers are on standby for an emergency telephone conference on Sunday night, if Greek exit polls put the radical Left Syriza coalition in the lead, to trigger contingency plans, including possible capital controls in the event of a run on banks in Greece, Portugal or Spain.
A victory for Syriza could prompt a default and Greek exit of the eurozone.
In the event of political chaos in Greece or a financial meltdown drawing in Spain and Italy on Monday following the result of the Greek elections, an emergency meeting of G7 ministers will be held in the wings of the G20 gathering in the Mexican resort.
As tensions within the eurozone deepened on Friday, the German chancellor dismissed "quick fixes" and refused to consider any discussion on pooling debt for eurobonds or Germany underwriting bank deposits in other eurozone countries.
She hit out at Mr Hollande for blocking EU supervision of national spending and supporting eurobonds, which she warned would "mask" divergences between Germany and "mediocre" or declining eurozone economies, such as that of France.
"If you look at the development of unit labour costs between Germany and France, differences have now been growing a lot more strongly, a topic that must be discussed," Mrs Merkel said.
Mr Hollande, elected last month, has announced plans to increase the cost for companies of laying off workers after a jump in French unemployment.
Senior German and EU officials have expressed concern that the Socialist policies will bring market turbulence to France and increase French borrowing costs, threatening the country's long-term credit rating.
"France needs its AAA or else the euro cannot bear the debt burden. Germany cannot do it alone," said a eurozone official.
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