News That Matters

? country in the outmost Southeastern part of the EU has grasped the headlines for quite some time. With only 2% of the EU’s economy and just 2.5% of its debt it became the “Witch” that is haunted by puritan Northern Europeans. It is claimed as the epicenter of laziness, lust and unproductively for the whole of the Continent, a bad example that pious Northerns should be feared and loath at the same time.

This country is Greece and it must be punished! But is it really the witch hunt that has started in 2009 the most stupid move ever made in the entire European history? Is it worth to blame Greeks for the lonely dark winters up in the North and for the depression syndrome that cripples the lives of dozens of millions northern Europeans, as if Greece makes the weather?
The technocratic government of Mario Monti has made significant progress towards overhauling Italy’s economy since it came to office last year, but has not done enough to combat tax evasion and the country’s sizeable black economy, an EU finding to be released this week has determined. The European Commission report, which is still in draft form and was obtained by the Financial Times before its publication on Wednesday, carries significant weight under new EU rules that give Brussels the right to fine and sanction eurozone countries that do not follow its recommendations.

In a country where wealth matters more than most if only because of its extreme shortage being a teacher once meant making a decent living. However, as salaries for corporates ector jobs have soared and those for professors have stagnated, the respect afforded to academics and the subsequent desire of students to become them seems to have done the same. A government panel said recently that India’s shortage of faculty staff could be “significantly higher” than the 40 per cent widely estimated. While the prestigious Indian Institutes of Management and Indian Institutes of Technology which cater to less than 40,000 of India’s roughly 16m college students are largely immune to the overall shortage, even they have come under fire for lacking top-quality professors.

Newedge, a leading broker, is abandoning the Greek stock market in a sign of mounting concern over the country’s future in the eurozone.  The broker has told clients that it will process only sell orders, and stop extending margin loans for existing positions in Greek securities, according to a memo obtained by the Financial Times.  A list of securities subject to the new restrictions include foreign-listed shares and American depositary receipts for Greek companies including Alpha Bank, Coca-Cola Hellenic Bottling and Paragon Shipping, a New York-listed shipowner that is headquartered in Greece.


Iran has said it will continue to stockpile highly enriched uranium and has ruled out the inspection of a suspect military site in a sign of Tehran’s frustration that concessions on its nuclear programme may not result in relief from international sanctions.  Fereydoon Abbasi-Davani, the head of Iran’s Atomic Energy Organisation, said over the weekend that there was “no reason” to end enrichment of uranium at 20 per cent concentration, which is easy to transform to the 90 per cent level needed for a bomb.

Spain, Italy and Greece, already fighting a financial and economic crisis, are now facing an oil crisis. Olive oil, that is.  The price of the Mediterranean diet staple has plunged to a 10-year low as domestic consumption in the top producing southern European countries has fallen because of the economic crisis. That fall has coincided with a bumper olive crop in Spain, the biggest grower, creating a glut that has forced the EU to intervene to reduce the surplus amid worries about rural incomes. “The market is in serious crisis,” said Pekka Pesonen, head of the Copa-Cogeca farming union in Brussels. “This crop is vital for the main producing countries in terms of maintaining employment in their rural areas.”

The UN-backed peace plan for Syria was in disarray on Sunday after armed rebels said they would no longer abide by a ceasefire and a local network of protesters demanded the departure of UN observers. The calls came as the UN Security Council unanimously condemned Friday’s massacre in Houla near the city of Homs, which left at least 108 people dead, including 49 children and 34 women. The council said civilians had been shot “at close range” and suffered “severe physical abuse”. It was one of the worst atrocities in the regime’s campaign to crush a 14-month revolt against Bashar al-Assad’s regime.
Asian stock markets were mixed Monday as investors weighed news of political progress in Greece against Spain’s deteriorating financial situation, while resources plays outperformed in Sydney and the euro advanced. Japan’s Nikkei Stock Average was flat, Australia’s S&P/ASX 200 climbed 0.8%, Hong Kong’s Hang Seng Index added 0.3%, China’s Shanghai Composite Index was flat, and India’s Sensex was up 0.6%.

Switzerland is considering capital controls to fight a sharp rise in the Swiss franc in the event of a euro-zone collapse. Capital controlstools that directly influence the inflow of capital into Switzerlandare a radical measure that the Alpine nation hasn’t employed since the 1970s. The risk of a potential Greek exit from the euro has increased in recent weeks as the political crisis in Athens has intensified, heightening worries about possible effects on other heavily indebted euro-zone nations. This is strengthening the Swiss franc, traditionally considered a refuge in times of economic and political turbulence. Switzerlandsurrounded by, but not a member of, the European Unionis seen as a haven of fiscal and political stability, but turbulence in the currency bloc is a major risk for its economy. The country depends heavily on exports for growth, and the strong franc is hindering exports at a time when demand is slumping in the euro zone, Switzerland’s biggest trade partner.

Ireland’s Prime Minister Enda Kenny used a nationally televised speech Sunday to urge voters to endorse the European Union’s fiscal treaty by a large majority in a referendum later this week, or risk plunging the country into a crisis like that facing Greece.  Opinion polls published Saturday and Sunday show that the new treaty is likely to be approved by voters, who fear that without the support of the rest of the euro zone, they could face political and economic turmoil on a scale that rivals Greece’s current tribulations.

Spain will pump €19 billion ($24 billion) into troubled lender Bankia SA, BKIA.MC -7.43%the bank said on Friday, effectively nationalizing the country’s third-largest bank in a dramatic effort to assuage concerns about the stability of its financial sector. Worries about Spain’s banks, which are saddled with billions of euros in toxic real-estate loans, have heightened in recent weeks as Greece’s political crisis has intensified and investors contemplate the effects of a potential Greek exit from the euro. Sentiments darkened on Friday as Standard & Poor’s cut its ratings on the credit-worthiness of Bankia and four other Spanish banks. The rating firm also revised its assessment of Spain’s economic risk, saying it believes the country is entering a double-dip recession that will lead to a large increase in troubled assets.

Moody’s Investor Service Friday downgraded a range of major banks in Sweden and Norway, citing their strong reliance on wholesale funding, low profit margins and risk to asset quality. Moody’s said the funding and margin issues left the banks susceptible to unexpected losses from which it would be a challenge for them to rebuild capital. It also highlighted risks to asset quality, with the Swedish economy exposed to weakness in Europe and the banks’ variable-rate mortgage books vulnerable to interest rate changes.

A mystery over the fate of Myanmar’s vice president is raising concerns about the continuing lack of transparency in the Myanmar political system, despite major political and economic reforms over the past year. Dissident media and some international news organizations reported earlier this month that Vice President Tin Aung Myint Oo had resigned or temporarily stepped down, citing unidentified government sources and family members. Myanmar’s government hasn’t officially acknowledged any departure of the vice president, and officials contacted declined to comment on the record. However, a government official familiar with the situation confirmed in response to questions that Mr. Tin Aung Myint Oo, who is 61 years old, was out on “medical leave” with “a serious medical problem” and “may be” considering resignation. The official declined to provide further details.

Asia’s richest man laid out his succession plans Friday, putting his older son at the helm of his business empire and promising his younger son funding to embark on new investments. Li Ka-shing, the 83-year-old owner of Hong Kong’s biggest supermarket chain and with assets globally in telecommunications, oil and real estate, remains actively involved in the operations of his flagship blue-chip companies. On Friday he said he had no plans to retire anytime soon, but sought to put to rest frequent media speculation in the city on the future of his multi-billion dollar companies. His net worth was estimated at US$25.5 billion, according to Forbes Magazine, making him the world’s ninth-richest person.
Anti-tobacco advocates in Indonesia plan to file a class action lawsuit this month using cases of child addicts in the hope of forcing tougher regulations on a society where one in three people smokes. It is a rare attempt of its kind to constrain a tobacco industry which looks to the world’s fourth most populous country and its growing appetite for cigarettes to replace dwindling sales elsewhere. The suit against tobacco companies and the Indonesian government argues that feeble regulation has left children dangerously exposed to the risks of smoking.
JPMorgan Chase & Co. (JPM)
, the biggest U.S. bank, increased the capital of its China unit by 2.5 billion yuan ($394 million) to meet rising demand for financial services in the world’s fastest-growing major economy. The second infusion since the local subsidiary was incorporated in 2007 will bring its capital to 6.5 billion yuan, the New York-based lender said in an e-mailed statement today. The U.S. bank also received approval from the China Banking Regulatory Commission to open a branch in Suzhou. JPMorgan joins Australia & New Zealand Banking Group Ltd. (ANZ) and DBS Group Holdings Ltd. (DBS) in adding to investments in China, seeking a bigger share of the world’s third-biggest banking market, where local currency loans have grown by an average 22 percent a year since 2008. Foreign banks may lend a maximum of 10 percent of their net capital to a single borrower, which limited their participation in the three-year lending boom.
To euro zone countries in need, euro bonds would be a noble expression of European solidarity and a crucial instrument for preserving the common currency. To Germans and quite a few others, though, euro bonds would be a lot like co-signing a loan for a deadbeat brother-in-law. Those caricatures have dominated a debate that has left Europeans deeply divided on a central question: Should euro zone countries create common bonds to reduce borrowing costs for members that cannot get affordable credit on their own? But despite the intensity of the debate, even as political upheaval in Greece and bad bank loans in Spain mushroom into existential threats to the currency union, the euro bond remains only the vaguest of concepts.

International Monetary Fund chief Christine Lagarde says she has more sympathy for poor African children than Greeks suffering under the country’s economic problems and austerity measures. Making clear that the IMF has no plans to relent on its austerity requirements for the country, Lagarde said she was aware that many Greeks were struggling to access services like healthcare because of the country’s economic crisis, but believed people in other countries deserved more sympathy. “I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education,” she said in an interview with the U.K.’s Guardian newspaper published Saturday. “I have them in my mind all the time. Because I think they need even more help than the people in Athens.”

Citigroup’s Automated Trading Desk (ATD) had trading losses of around $20 million stemming from Facebook’s botched initial public offering on Nasdaq OMX Group’s U.S. exchange, a source with knowledge of the situation said on Friday.  The unit’s losses were in addition to claims by market makers Knight Capital Group and Citadel Securities, which each had losses of $30 million to $35 million.UBS AG, the other large market maker involved in the IPO of the social networking company on May 18, has not disclosed any losses.
Greece’s public finances could collapse as early as next month, leaving salaries and pensions unpaid unless a stable government emerges from the June 17 election, according to Lucas Papademos, the technocrat prime minister who left office after this month’s inconclusive vote. Mr Papademos warned that conditions were deteriorating faster than expected with cash flow likely to turn negative in early June amid a sharp fall in tax revenues and a loosening of spending controls during two back-to-back election campaigns. Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments, and has also accelerated outflows of deposits from local banks.
U.S. consumer sentiment rose to its highest level in more than four years in May as Americans stayed optimistic about the job market, while higher income households expected to see bigger wage increases, a survey released on Friday showed. The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same. It was the highest level since October 2007. “Unfortunately, consumer confidence is still extremely vulnerable to a reversal, as occurred in the past two years,” survey director Richard Curtin said in a statement. “While their most optimistic expectation for job growth could go unfulfilled without much harm, if the recent slowdown in job growth persists in the months ahead, it could form the basis for a third retreat in confidence.”
Manmohan Singh is holding talks with Burmese President Thein Sein as he makes the first official visit to Burma by an Indian prime minister since 1987. Mr Singh said he hoped to strengthen trade and diplomatic co-operation during his three-day trip. He will also meet opposition leader Aung San Suu Kyi, whose mother once served as Burma’s ambassador to India. The two nations share a 1,600km (1,000 mile) border, but relations have often been uneasy. The Delhi government cold-shouldered Burma’s military rulers during the 1990s, infuriating the generals by openly supporting Ms Suu Kyi.

The insurance market Lloyd’s of London is preparing contingency plans for the possibility of the euro collapsing, its chief executive has said. With Greece facing new elections in June and anti-bailout feelings high, there are fears Athens may be forced to exit the eurozone. In a Sunday Telegraph interview, Richard Ward said Lloyd’s needs to “prepare for that eventuality”. He said that Lloyd’s would settle claims using multiple currencies.
When Hong Kong scrapped all taxation on alcohol sales in 2008, it sent the price of investment wine into the stratosphere. Tax cuts on wine purchases are now set to happen in India, so will a new flood of buyers reverse recent price declines? Bordeaux first growths are the most traded commodity in the wine market – and the price has been slumping since March. The Liv-ex Fine Wine 50 index tracks these young wines, and the recent decline has shown no sign of stopping. The index has plunged by almost 23pc over the past year, but is still showing gains of 70pc over the last five years. However, the Liv-ex Fine Wine Investables index, which is designed to mirror a typical wine investment portfolio, is more important for ordinary investors.   The index peaked in January and prices are down 17.1pc in the last 12 months, but are still showing a 55.2pc five-year gain.

While most investors have either been choking back the tears or avoiding the beleaguered, recession-hit eurozone, one wealthy Arabian emirate has been on a trolley dash. Over the past three months, Qatar – a state no bigger than Yorkshire – has embarked on the financial equivalent of a £7bn supermarket sweep. It has snaffled up key stakes in mining giant Xstrata, luxury goods group LVMH, French media group Lagardere and oil majors Royal Dutch Shell and Total. Some have speculated that the departure of Anthony Armstrong – ex-M&A chief at the emirate’s investment arm Qatar Holdings (QH) – has propelled others with a bigger thirst for acquisitions to the front of the queue, not least chief executive Ahmad Mohamed Al-Sayed.

The UK’s services sector is showing signs of an upturn in fortunes, according to a CBI survey, which has offered some glimmers of hope for George Osborne after a week of gloomy economic news. Despite the uncertainty surrounding the future of the euro, confidence among services businesses such as restaurants and hotels is hardening after slumping in the past nine months, with companies’ expectations for the future improving. Firms anticipate both their activity and their profitability will pick up in the next three months, according to the quarterly survey.  Ian McCafferty, the CBI’s chief economic adviser, said: “Despite the continued uncertainty emanating from Europe, there are some signs that conditions in the UK service sector are beginning to improve slightly.”

Embattled British high street will struggle with effects of recession until 2020. The country’s beleaguered high street will not recover for another three years and will underperform for the rest of the decade, according to leading economic commentators. Retailers will have to weather a “tough trading environment” as householders’ hoarding of cash and debt repayment mean consumer spending will fail to return to pre-recession levels before at least 2015. The forecast from the Ernst & Young ITEM Club suggests the worst of the recession could be behind us but warns a recovery could be derailed by consumer habits and put under renewed pressure by rapidly increasing mortgage costs. The economists expect Bank of England interest rates, the foundation for mortage costs, to climb to 4-5pc by 2015, leading to a quadrupling in the percentage of household disposable income going towards debt interest payments to 3.2pc.
Goldman Sachs is considering breaking up the $2bn (£1.3bn) sale of the Swedish oil group owned by the Saudi billionaire Mohammed al-Amoudi. It is understood that most potential bidders, possibly including the UK pair BP and Shell, for Svenska Petroleum Exploration’s assets are not interested in the whole group, due to its broad geographic spread. The company has offshore production and exploration fields in five west African countries, the Norwegian North Sea and Latvia. An industry source said that bidders, which include private-equity players keen on cashing in on the growing African oil and gas market, had expressed interest in individual countries and regions.
Australian banks need to catch up with the rest of the world and make financial transactions faster for customers, Reserve Bank boss Glenn Stevens says. In a world where people conduct financial transactions on their smartphones while travelling to work, the wait time for receiving funds, usually the next business day, is not good enough, Mr Stevens said today. Speaking at the Australian Payments Clearing Association Limited’s 20th Anniversary Symposium in Sydney, Mr Stevens said Australia’s payments system would need to meet the demands of new technology and the associated expectations people have.
When the architects of the euro started drawing up plans for its creation in the late 1980?s, economists warned them that a viable monetary union required more than an independent central bank and a framework for budgetary discipline. Study after study emphasised asymmetries within the future common-currency area, the possible inadequacy of a one-size-fits-all monetary policy, the weakness of adjustment channels in the absence of cross-border labour mobility, and the need for some sort of fiscal union involving insurance-type mechanisms to assist countries in trouble. Beyond economics, many observers noted that European Union citizens would accept tight monetary bonds only if they were participating in a shared political community. The former president of the Bundesbank, Hans Tietmeyer, liked to quote a medieval French philosopher, Nicolas Oresme, who wrote that money does not belong to the prince, but to the community. The question was, which political community would support the euro?
China recently sped up the approval process for a slew of major projects as the world’s second-largest economy looks toward investment to boost its slowing economy, local media reported Monday. Following a call to “stabilize economic growth,” which was announced last week by the State Council, China’s Cabinet, many ministries have instituted policies allowing private investment in sectors that had previously been monopolized and heavily state-controlled. In May, the speed of approvals for major projects by the National Development and Reform Commission (NDRC), China’s top economic planner, has been “impetuous,” the Beijing-based newspaper China Times reported.

China is making all-out efforts to encourage private investment in more heavily state-controlled and monopolized sectors amid concerns that its economy might slow further in the coming months. Since China’s transport, railway and health ministries issued guidelines last month to permit private capital to develop those sectors energetically, the banking sector and the state-owned enterprises (SOEs) have joined in the drive. The move came in line with other recent measures announced by the central government to open state-controlled and monopolized sectors wider to private investment, in a bid to stimulate tepid economic growth. Being drafted are detailed rules concerning private investment in more monopolized industries, such as electricity, oil and natural gas, said an official with the National Development and Reform Commission (NDRC), the country’s top economic planner.

The Gambian government and the U. S.- based Camac Energy Company signed a petroleum exploration and production deal for offshore operations in the West African country, officials said here on Friday.Under the newly signed agreement, Camac is allowed to hold licenses for offshore oil blocks A 2 and A 5. Camac is a privately-owned global energy company engaged in the exploration, development and operation of oil properties in Africa and South America.
Uncertainty in the euro zone will continue for the next few years, acting as a drag on the UK economy, Bank of England policy maker Spencer Dale was quoted as saying in a newspaper on Sunday.
Britain is not a member of the single currency bloc, but it depends on the economic area for 40 percent of exports. The UK economy slipped back into recession in the first quarter of this year and data continues to show Britons have been shopping much less and factories are getting fewer orders. “I’d expect the uncertainty (in the euro zone) to continue for the next few years, even if some of the worst outcomes are avoided,” he was quoted in the Sunday Times as saying. “It will continue to act as a drag on our economy.”
The Indonesian Ambassador, Andi M. Ghalib said here on Saturday that the trade ties between his country and India were growing at a steady pace and could reach $45 billion mark by 2015. “I hope that the volume of business between the two countries would reach $45 billion by 2015,” the Ambassador who had come here for an event told mediapersons.  The volume of trade between the two countries last year was about $14 billion.  Mr. Ghalib said that an indication of the warm ties between the two countries came when the Indonesian President was invited to be the chief guest at the Republic Day parade two years back.
Attributing the slide in rupee value to various domestic and global factors, Union Finance Minister Pranab Mukherjee today said the Reserve Bank was taking steps to arrest the currency’s depreciation.
“There are a lot of reasons for this (depreciation). There is demand and supply in the market. In the US, there is surplus investment. It used to be a safe haven,” he told reporters here.  “Europe used to be an important destination for exports, but demand there is uncertain,” he said, adding global recovery was
South Korea’s business sentiment for June fell from a month earlier due to mounting eurozone concerns and a growth slowdown in China, a poll showed Monday. The monthly business survey index (BSI) for the upcoming month came in at 98.3, down from 104.7 tallied for May, according to the Federation of Korean Industries (FKI), the lobbying group of the country’s large businesses. A BSI reading below the break-even 100 mark means pessimists outnumber optimists. The poll surveyed the country’s 600 largest businesses in terms of sales.

South Korea’s international air passenger traffic surged 22.6 percent in April from a year earlier due to a sharp rise in visitors from Japan and other countries, and more Koreans going abroad, the government said Monday. The number of international air passengers came to some 3.75 million last month, the highest number for the month of April, according to the Ministry of Land, Transport and Maritime Affairs. The previous record was reached in April 2011, when numbers hit 3.07 million. The ministry attributed the growth to a rise in the number of Japanese visitors arriving in the country during the Golden Week, and South Koreans going overseas to places like Southeast Asia.
Iran is in talks with Tajikistan to import as much as one billion cubic meters of potable water, Iranian Energy Minister Majid Namjou said on Sunday. The volume to be imported has not been yet finalized, but it is anticipated that one billion cubic meters of water will be imported, Namjou added.  He made the remarks on the sidelines of the 9th meeting of the Iran-Tajikistan Joint Economic Commission, which opened in Tehran on Sunday.

Iran’s non-oil exports (excluding gas condensates and petrochemicals) grew by 32.6 percent in the first two months of the current calendar year (March 20-May 20), the IRNA News Agency quoted the Trade Promotion Organization of Iran deputy director as saying, without giving a specific figure on the value of exports. Kiyumars Fathollah Kermanshahi added that non-oil exports are projected to hit $75 billion in the current calendar year.  Iran has scaled up its trade with 160 countries in the past calendar year, which ended on March 19, despite being embattled with global economic sanctions, the head of the Customs Administration said in April.