GENEVA, SWITZERLAND – Easyjet is adding three new cities in southern Europe to its 2012 summer flight schedule: Catania, Sicily in Italy, Athens, Greece and Venice, Italy.
The first will be at least twice a week and the other two three times a week, starting 18 April 2012.
©2011 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
GENEVA, SWITZERLAND – Bond markets were nervous Monday as Greece scurried to put in place a 100-day emergency coalition government that will push through a bailout plan before money runs out. Governments in the eurozone rushed to placate the traders as Italy’s borrowing reached its highest-ever point, raising new fears about its financial stability.
Reuters reports that Lucas Papademos appears to be the front-runner to lead the coalition government, which would be in place until new elections in February. He is a former vice-chairman of the European Central Bank.
Italian Prime Minister Silvio Berlusconi is calling for a confidence vote, vigorously denying he is planning to resign. Italy’scost of borrowing reached its highest ever level Monday, with AP noting that “if the cost of borrowing rises too much, Italy might not be able to refinance its debt. Italy is the euro zone’s third-largest economy and is too big be bailed out by Europe’s financial rescue fund.”
Links to other sites: BBC, Economist, Miami Herald/AP
©2011 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
CANNES, FRANCE – European Union leaders and the IMF, on the sidelines of the G20 meeting in Cannes 3 November, have given Greece an ultimatum, saying that its citizens must decide if the country will remain part of the eurozone: a vote against a recently negotiated bailout would be seen as a vote against Greek participation in the eurozone.
The threat follows what the Guardian describes as “a blunt warning from Jean-Claude Juncker, chairman of the eurogroup, that the sixth tranche of the original €110bn bailout was now in jeopardy.” At risk: €8 billion approved just two weeks ago.
An emergency cabinet meeting was scheduled for 11:00 Thursday morning in Greece. More members of the prime minister’s own party are defecting Thursday morning, saying they will not support him in a confidence vote scheduled for Friday night, with the resulting loss of his majority in parliament.
George Papandreou, prime minister, has called for a referendum next month on the EU bailout plan and, under pressure from EU leaders at a Wednesday night meeting, he agreed to hold it earlier, 4 December.
Links to other sites: Financial Times, Guardian, Le Monde (Fr)
GENEVA, SWITZERLAND – Europe’s politicians reacted with surprise and anger during the day Tuesday to the surprise announcement by Greek Prime Minister George Papandreou that he wants a referendum that will allow Greeks to vote on an EU bailout package. In Greece, there were calls Tuesday evening for the prime minister to resign.
The package was drawn up last week. Ireland also has a bailout package and the Globe and Mail, Canada, reports: “The summit last week was to deal with the uncertainty in the euro zone…and this grenade is thrown in just a few short days later,” European affairs minister Lucinda Creighton said. “‘Legitimately there is going to be a lot of annoyance about it.’” citing Reuters.
Le Monde in France underscores fears that Greece will drop out of the eurozone, triggering a broader crisis. Stock markets around Europe fell, the Paris newspaper notes: Madrid down 4.19 percent, Frankfort down 5 percent, Athens 6.9 percent and Milan 6.8 percent. Markets in London and Switzerland were calmer but nevertheless fell by 2.2 percent and 2.49 percent respectively.
Links to other sites: Financial Times, Reuters
BERN, SWITZERLAND – Greece is the latest country to consider a bilateral tax agreement with Switzerland, a move that will not please everyone in the European Community. Bern announced Thursday afternoon that “State Secretary Michael Ambühl and Ilias Plaskovitis, the general secretary in the Greek Ministry of Finance, conducted talks on a possible tax agreement between Switzerland and Greece. Both parties discussed the possibility of a tax agreement like the ones Switzerland signed a few weeks ago with Germany and the United Kingdom.”
Bern notes that “the aim is to regularize the assets held by Greek taxpayers in Swiss bank accounts in the past as well as to introduce a tax at source on future investment income. Switzerland would forward the tax revenue to the Greek authorities on an anonymous basis. In addition, mutual market access for financial services should be improved.”
The two governments will now need to decide if they are opening negotiations. But Greece, with its just-announced EU bailout, could be under pressure from the EU, which is not entirely happy with Switzerland’s agreements with individual EU countries, according to PwC’s bimonthly “EU Tax Newsletter” in September. “It is widely believed in Brussels that the European Commission’s President Barroso and the EU’s Tax Commissioner Semeta have missed out on an opportunity to make the case for European integration / the “Community” method and publicly oppose the bilateral agreements by Germany and the UK, as they objectively undermine the EU’s position vis-à-vis Switzerland regarding tax fraud and tax avoidance and harmful tax competition (EU-wide Code of Conduct on Business Taxation), and talks with the US regarding Fatca [foreign ], wrote Bob van der Made, PwC Netherlands.
GENEVA, SWITZERLAND – Europe’s financial outlook is gloomy today: Italy’s economy slipped another notch late Tuesday 4 October, Greece was refused another loan by the European Union, and the euro fell in early Wednesday trading in Asia.
Moody’s downgraded Italy’s government bond rating from Aa2 to A2 and gave a negative outlook because of long-term debt financing risks and the economy’s slow growth. It is the first cut for Italy by the ratings agency in two decades, reports Bloomberg, and follows the 20 September cut by S&P. Italy is now the sixth country in the euro region to have its credit rating cut this year.
Meanwhile, European finance ministers delayed giving Greece the euro 8 billion bailout money it needs to avoid defaulting while insisting the EU will not allow it to default. Markets rallied in Europe on the more positive news that the ministers have agreed a coordinated approach to EU banks’ capitalization is needed, with the commissioner for economic affairs, Olli Rehn telling the Financial Times, “Capital positions of European banks must be reinforced to provide additional safety margins and thus reduce uncertainty,” adding that “This should be regarded as an integral part of the EU’s comprehensive strategy to restore confidence and overcome the crisis.”
Links to other sites: Bloomberg, Financial Times, RT News, Russia (video)
GENEVA / ZURICH, SWITZERLAND – Flights in and out of Greece have been cancelled or in some cases delayed during a two-day nationwide strike 5-6 October that began early Wednesday, over austerity measures.
Swiss has cancelled its two flights to Athens from Geneva today.
Trains are not running, hospitals are operating only on an emergency basis and many schools are closed as the country’s main union, which represents about half the work force according to Reuters, defies the government.
Hundreds of thousands are expected to strike today.
GENEVA, SWITZERLAND – World stock markets slid early Wednesday 13 July as investors’ nerves were tested, first by Ireland Tuesday evening becoming the third Eurozone country after Greece and Portugal to have its sovereign debt given a junk rating, then by news from Italy that borrowing costs are at their highest level in a decade.
Italian Prime Minister Silvio Berlusconi called on Italians Wednesday morning to make sacrifices, saying national unity is needed to reduce what he referred to as the country’s debt mountain. Parliament is scrambling to pass a deficit-reducing budget by Friday, before a European Union meeting on budgets.
The Financial Times reports that Moody’s downgrading Tuesday of Ireland’s debt is based on reasoning “similar to that used in Portugal’s downgrade to junk last week, a move that provoked a furious reaction from European policymakers who threatened new regulation of rating agencies.”
France is watching warily, with Le Monde saying markets are affected by “sharp concern” that the debt problem is moving beyond Greece, Portugal, and Ireland and is now threatening Italy and Spain.
©2011 Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
Geneva, Switzerland (GenevaLunch) – Thousands of workers in Athens and the rest of Greece took to the streets Wedneday 11 May for a 24-hour general strike that closed schools, offices, media outlets and transport companies, including airlines and Athens airport for four hours. The strike is the second since January, but clashes between police and protesters have not reached the same scale as those during 2010 protests.
The strike was called by the country’s major unions as the government meets with IMF (International Monetary Fund) officials to find a way forward, with Greece slipping on its targets to reduce government spending and increase revenues in order to cut the budget deficit.
Greece has promised to cut $33 billion from its budget by 2015, but the belt-tightening reforms and tax increases designed to make it happen are far from popular.
The LA Times summed up the situation neatly: “Ancient Greeks coined the word ‘austerity’. Modern Greeks are resenting it.”
Links to other sites: Bloomberg, Irish Times, Los Angeles Times
The International Monetary Fund gives the UK generally high marks in its appraisal of the government’s economic and fiscal recovery package, but warns that Britain’s banks are dangerously exposed to sovereign risks in Spain, Portugal, Ireland and Greece. Saying that “economic revovery is underway in the UK”, the IMF also recognizes that UK’s banks performed relatively well in the European Central Bank’s stress tests this summer.
UK banks’ exposure to the more indebted and fragile European economies is similar to that of German or French banks in absolute terms, the IMF says in its report (p.78/79), but is much higher as a percentage of GDP, because the UK banking sector contributes much more to GDP than banks in either Germany or France. It notes that the four main British banks have sovereign exposure of £7.8 billion.
Links to other sites: Daily Telegraph, The Independent
Bern, Switzerland and Athens, Greece (GenevaLunch) – The Swiss embassy in Athens received a package with a bomb Tuesday 2 November, one of five embassies in the city to receive such packages. The bomb sent to the Swiss was not thrown into the courtyard, nor did it explode, contrary to initial international media reports, according to the Department of Foreign Affairs in Bern, although it sent out a flame .
The news comes the day after a young Greek man was arrested on suspicion of having sent a package, intercepted in Greece, to French President Nicolas Sarkozy as well as to the Belgian, Dutch and Mexican embassies Monday. An employee in a courier delivery service was injured when one of them exploded at the company’s office.
The other four packages sent Tuesday, to the Bulgarian, Chilean, German and Russian embassies, were dismantled by bomb specialists from the Greek police.
Metal was detected in the package delivered to the Swiss embassy, prompting a check. Based on initial information, the local embassy team at the gate, considering the package suspect, threw it into a courtyard. It is unclear if the flame shot out when it was thrown.
Riot police used tear gas to dislodge striking workers at the Acropolis site in Athens, Greece 14 October. Many of the workers are on short-term contracts that will not be renewed at the end of the month because of Greece’s austerity measures. Other workers claim they have not been paid for 22 months.
The historical site, Greece’s most important tourist draw, had been closed for two days. Strikers protesting the austerity measures have closed ports and archeological sites this past summer, often stranding tourists. Tourism is a major element in Greece’s economy, and revenues have been down almost eight percent in 2010.
Links to other sites: BBC, Daily Telegraph, RTT News
Update 26 August Zurich, Switzerland (GenevaLunch.com) - The Swiss franc rose to a new high as the euro slipped below CHF1.30 Wednesday 25 August. The Swiss National Bank decided earlier this year that it would no longer intervene to halt the rise of the franc after losing more than CHF14 billion from selling francs to slow down the currency’s appreciation. The euro has been under pressure with bond yields soaring in Greece and Irish debt being downgraded. The Swiss franc has been acting as a safe haven for investors worried about Europe and the fear of a double dip recession in the USA.
Yields on 10-year Swiss bonds fell to 1.02% as funds swept into Switzerland. The strong Swiss franc might be good news for those who earn Swiss salaries but it will make it harder for Swiss exporters to compete.
The Wall Street Journal notes in an article published Thursday that the man widely considered likely to become Switzerland’s next finance minister, Johann Schneider-Ammann, is strongly in favour of a weaker franc, and he backed the SNB’s intervention policy earlier this year. Schneider-Ammann is the head of Swissmem, the machinery industry’s association, and he has close ties to industry in general. The current finance minister, Hans-Rudolf Merz, retires in October. Both are centre-right politicians.
Three flights, to Barcelona, London and Milan, were cancelled and several others delayed in Athens Sunday evening when Greek air traffic controllers went on a mini-strike, providing only minimal coverage after a Friday court ruling that a 48-hour strike would be illegal, reports ats/Le Nouvelliste. The cancelled flights to Spain and the UK were Easyjet’s.
Swiss banks’ stress tests shows “both banks would still have a solid capital base” in case of global recession
Basel, Switzerland (GenevaLunch.com) – Credit Suisse and UBS, Switzerland’s two large banks, would both have capital ratios of at least 8 percent, should they be subject to stresses from a global economic recession, Finma, the country’s financial regulatory body, said Friday evening 23 July.
Finma published the results of its stress tests on the two banks, conducted since 2008, in parallel with announcements by the European Union and 91 of its largest banks about the results of EU bank stress tests.
Seven of the 91 European banks failed the stress tests, five “caja” or savings banks in Spain, Germany’s Hypo Real Estate and Greece’s ATE bank, a result that led, according to the Financial Times, to investors signalling “their distrust of the assumptions underlying the tests and the surprisingly small number of banks to fail the tests.”
Finma explained in publishing its results that the stress tests were developed with the Swiss National Bank, the country’s central bank. “Analyses of this kind are a key component of its normal supervisory activities. Finma requires Credit Suisse and UBS to have sufficient excess capital and liquidity to enable them to absorb unforeseen events at any time. The large banks should therefore have a tier 1 ratio of at least 8 percent even under such stress scenarios. If this requirement were not met, Finma would work with the institution in question to consider reducing its risk positions and/or strengthening its capital base and then instruct suitable measures.”
The stress tests check the banks’ capacity to deal with specific scenarios. “The latest scenario covers different regions of the world over a two-year period. It assumes a global recession, accompanied by a slump in prices on the financial and real estate markets,” Finma says in its press release. “Developments in Europe have also been added, with specific and very sharp shocks assumed for some European countries. In view of UBS and Credit Suisse’s relatively low exposure to these countries, however, the impact of these particular shocks turns out to be small.”
Greece: A wet grave waits many of the migrants and refugees who try to join the European Eldorado by crossing the Evros river. Left to their destiny by those who smuggle them across this 200-plus km long waterway that separates Greece and Turkey, panic and darkness are often fatal to those who cannot swim. On a day in May 2010, the bodies of three young Africans were pulled out of the current by Greek policemen. (photo: UNHCR / J Bjoergvinsson)
Update 11:15 Geneva, Switzerland (GenevaLunch.com) - Sixteen people, who appear to have been mainly Somalis, drowned 29 June while crossing the Evros River between Turkey and Greece, according to UNHCR. It is the second accident in the same area in a month: in late May three young people died while attempting to cross in the same area.
There has been a three-fold increase in “irregular” arrivals in the European Union via Greece, through the Evros River, in 2010 compared to the same period in 2009, according to the UNHCR (UN High Commissioner for Refugees).
Arrivals through the Eastern Aegean islands have considerably decreased says the Geneva-based UN group: available statistics show that at least 287 people lost their lives trying to reach the EU in 2009.
“Sixteen people lost their lives because they felt they had no other option than to enter the EU through the clandestine services of smugglers,” notes Giorgos Tsarbopoulos, head of the UNHCR office in Greece.
“We have every reason to believe that the majority had a legitimate need to seek international protection in the EU. This tragic incident highlights the need for states to protect people at sea and crossing rivers, regardless of their motivation for doing so.”
Bulgaria may opt out of the Russian pipeline that will carry crude oil to Greece, saying people living along the Black Sea don’t want it and fear that the project is not environmentally sound, reports the Moscow Times. Bulgarian Prime Minister Boiko Borisov made the announcement after a meeting with European Union officials, but other members of the government hastened to point out that Sofia had not officially decided not to participate. The government press office later said Borisov would wait for an environmental assessment of the 300 km project.
Links to other sites: Novinite, Bulgaria, Radio Free Europe
Three people have died in Athens and four are reportedly missing after a fire bomb hit a bank in central Athens. The victims were Marfin bank employees, according to CNN, and another 20 employees are reported to be trapped on floors above the fire. Several cars, trash bins and buildings have been set on fire elsewhere in the city as the anti-austerity measures strike and protests turn violent.
A general strike Wednesday 5 May has pulled Greece to a standstill as Greeks resist austerity measures announced by the government. Planes, trains and ferries went on strike for 24 hours at midnight, following the lead of the public sector, which began a 48-hour strike Tuesday, crippling the economy.
Solar energy projects in Spain are being downsized and two major companies are holding off on plans to go public or sign new investment deals, as the country moves to reduce its energy liabilities. Solar energy is heavily subsidized, although most of that is passed directly on to customers. The Greek public debt crisis has Spain, along with other countries including Ireland and Portugal, worried about their own level of public debt and future liabilities. Standard & Poor’s cut its credit rating 28 April. Spain, with long hours of sunlight, has one of Europe’s most developed solar energy programmes.
Links to other sites: Bloomberg, New York Times, wikipedia
The announcement of a senior European official on 29 April, who said the EU is near an emergency rescue plan for Greece’s economy has stirred reactions all over the world.
Time magazine sees the effort as being “too late,” the Toronto Star says the EU “fumbled,” while the Financial Times talks about critics “lining up to rap” German Chancellor, Angela Merkel, over the crisis.
Portugal nervous as it watches Greek debacle
Prices of shares throughout Asia and Europe slid Wednesday 28 April as investors became nervous about the impact on Europe of Greece’s financial situation. The rate of borrowing for Greece rose to its highest level in 14 years Tuesday while the country’s finance minister said it could no longer afford to borrow, and the US ratings agency Standard & Poor’s downgraded Green bonds to junk status. Portugul, which was also downgraded, is closely watching the Greek situation. The president of the European Council, Herman Van Rompuy, insisted Wednesday that Greece will not be restructuring its debt.
Links to other sites: Bloomberg, Financial Times, MSNBC, Times, UK
Country should be able to avoid becoming first euro zone default
Greek Finance Minister George Papaconstantinou said after weekend talks with the IMF (International Monetary Fund) and other European countries, which he described as having gone well, that Greece should receive funds in May, in time to avoid defaulting on its loans. The country faces a 19 May deadline for payments. The amount of the full bailout package is not yet known but it appears likely that it will be larger than the figure of 45 billion mentioned before Greece formally applied for aid Friday 23 April.
Asian stocks rose strongly on the news, as worries diminished over the impact of Greece’s situation on global economic growth.
Links to other sites: Bloomberg, Financial Times, Reuters, UK
© Chappatte, distributed by Globe Cartoon. More cartoons on Chappatte’s web site. Geneva-based Patrick Chappatte works for the International Herald Tribune, for Geneva newspaper Le Temps, and for NZZ am Sonntag. All cartoons reproduced with permission.
The IMF (International Monetary Fund) said Friday 26 March that it is watching developments in Greece closely, after the euro zone countries agreed to provide Greece with loans, with help from the IMF. But IMF and European Union (EU) rules covering loans are not aligned and the situation may force the IMF to reconsider its position. The euro zone decision does not provide immediate relief to Greece, but can be activated “only once Greece is shut out of debt markets and not until eurozone stability is threatened,” the Telegraph reports, and few of the players seem happy with the EU decision, which creates uncertainty even while it appears on the surface to aid Greece.
Greek airspace and airports as well as ferries are closed Thursday 11 March, with Greek workers from the country’s two largest unions calling a third general strike in the past month, the second in just a week. The unions are fighting the country’s austerity measures, designed to cut the public debt, which is four times higher than that allowed by the European Union.
