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Friday, October 12, 2012

IMF: Austerity is much worse for the economy than we thought


CBC.ca

IMF: Austerity is much worse for the economy than we thought
Washington Post (blog)
Earlier this week, the International Monetary Fund made a stunning admission in its new World Economic Outlook. The IMF's chief economist, Olivier Blanchard, explained in detail that premature efforts to cut the deficit — through tax hikes and spending ...
A Global Perspective: More Economic SlowingNew York Times
IMF multiplier work draws mixed reactionFinancial Times
IMF and Europe in dangerous game of brinkmanship over failing Greek bailoutThe Guardian
Wall Street Journal (blog) -Businessweek -Reuters
all 1,180 news articles »

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IMF, Germany Disagree on Greek Debt


Economic Times

IMF, Germany Disagree on Greek Debt
Voice of America (blog)
German Chancellor Angela Merkel has rebuffed a call by the International Monetary Fund to give Greece more time to meet its budget-cutting goals. German Finance Minister Wolfgang Schaeuble conveyed the chancellor's comment Friday at the IMF annual ...
IMF's Lagarde weighs into Greek bailout talksThe Australian
Schauble: 'No Alternative' to Slashing DebtGreek Reporter

all 1,160 news articles »

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Greek crisis: Divided by a common currency


Economic Times

Greek crisis: Divided by a common currency
Financial Times
More than two years ago, when the Greek financial crisis broke, the newspaper sent a journalist round the streets of Athens trying to persuade passersby to exchange their euros for Greek drachmas – the former national currency. This triggered a ...
Weary of Austerity, More Greeks Oppose BailoutsGreek Reporter

all 8 news articles »

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Greece shocked at EU peace prize amid economic 'war'

Greek people stunned at awarding of Nobel to institution they blame for austerity measure tearing apart their society

There are prizes and prizes. And on Friday night there was no doubt in the minds of most Greeks that the biggest of them all, the Nobel peace prize, had gone to the wrong recipient.

In the country on the frontline of the worst crisis to hit the continent since the second world war, news that the EU had been given the award for its efforts to promote peace and democracy was greeted with bewilderment and disbelief. Three days after tens of thousands of people demonstrated in Athens over a visit by Angela Merkel – some dressed in Nazi regalia — many wondered whether the decision was a joke. Or even a Norwegian ruse to get the increasingly divided, debt-choked nation to bow to Germany's demands for austerity. In the mind of the man who speaks for Syriza, the leftist party that might be a footnote if it were not also Greece's main opposition, the decision had "cheapened" and "harmed" the institution that is the Nobel peace prize.

"I just cannot understand what the reasoning would be behind it," said Panos Skourletis, the party's spokesman. "In many parts of Europe, but especially in Greece, we are experiencing what really is a war situation on a daily basis, albeit a war that has not been formally declared. There is nothing peaceful about it."

Almost three years into the debt crisis that began beneath the Acropolis there is no doubt in the minds of many that Greece is at war – an economic war whose byproducts of poverty and hate, anger and desperation have begun inexorably to tear its society apart. And for the great majority the EU – with Germany at the helm – is solely to blame.

"It's a new kind of war, one without weapons but just as deadly," said Takis Kapeoldasis, a tattoo artist, giving voice to the mood at large. "I don't want to be insulting but it's Europe's policies that have done us over and now it gets the prize of all prizes for peace and reconciliation.

"Those who made this choice should come and walk our streets now while there is peace and harmony because soon it's going to be too late." For young Greeks like Karmela Kontou, who belong to the generation hardest hit by the country's descent into economic and social meltdown, the idea that the EU had been rewarded for its "successful struggle" to reinforce democracy and human rights was especially galling. After all, she said, "more and more Greeks are killing themselves" precisely because they see no light at the end of the tunnel.

Even worse was the democratic deficit. Growing numbers of Greeks feel they have no democratic say over any of the policies that have changed their lives. Greece may be paying for years of profligacy but the coffins of those who could no longer take the pain of being unable to pay extra bills and higher taxes on wages that had also decreased sharply were also lining up.

"The mood is not just dark, it's hopeless. People are killing themselves, the suicide rate is soaring, because they just can't cope and the EU is definitely partly to blame," said a 25-year-old. "I don't know, maybe they are trying to support a project that is going down the tubes because the very least anyone can say is that the decision is really strange"

Petros Markaris, the country's pre-eminent crime writer and a regular commentator on European affairs, thought it was "very wrong" that the EU should be garlanded with a peace prize. The bloc may have been born from the ashes of the devastation of the greatest conflagration on the continent but while it had brought nations together in peace, it had rarely done anything, actively, to promote the concept, he said.

"On the basis of that logic, every country that has lived peacefully deserves the prize," he told the Guardian, adding it was clear the award had become a "prize with an agenda".

The faultlines that had surfaced in Greece as a result of Europe's handling of the crisis and obstinate obsession with austerity were "deeply worrying".

"I don't personally agree that we should bandy the word 'war' around so freely in a country that has been so harmed by [the 1946-49] civil conflict," he said. "But I do believe that the way the economic crisis is being confronted outside Greece by the EU and European central bank and, by our own politicians, is leading the country to catastrophe." With speculation growing that Greece is heading for implosion under EU-IMF pressure – the over-arching reaction to the peace prize announcement was that it was ridiculous. Ioanna Nikolareizi, an Athenian photographer, said: "It's absurd. This is a prize that should go to a human being, not an institution that is going down the drain."


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Chris Grayling says we can take on burglars? Been there. Done that | Deborah Orr

I was brought up in a fight-keen culture – to hit back if someone hit me. I was reluctant at first but when I tried it, it worked

Sometimes, I despair of the left. The Conservative conference this week prompted a couple of such moments. How easy it is for the Tories to press the left's buttons. How embarrassingly predictable and knee-jerk the reactions are. No wonder those little scamps can't resist the temptation.

There has been much huffing and puffing over the so-called Tory obsession with "gerroff my land" attitudes to burglars. Chris Grayling, the justice secretary, wants to give householders more leeway in using "disproportionate force". This provides an easy way for the Conservatives to look like champions of the innocent victim, then sit back and let the left make itself look like the champion of the villain.

At the same time, critics are fond of pointing out that the Conservative fixation is on a problem that is tiny. People are hardly ever convicted of using disproportionate force against burglars, and whenever they are, it becomes a giant media talking point and they get their sentences reduced on appeal.

When I tackled and caught a burglar, I had to sit in court as the defendant made out that I'd been really rough with her, pulling her hair and making her hurt her hand against the railings we'd grappled over. Luckily, the police had photographed the skin-breaking bite mark she gave me, while the record of the HIV test I'd been advised to have at the hospital that evening was also available. A lot of time and money is wasted as criminals stand in witness boxes whining about the sore knee they got when an indignant householder pushed them down the stairs – for nothing!

Then there's the argument that, thus licensed, the entire nation will be sleeping with guns, machetes or baseball bats by their sides, as they leave their front doors wide open, in the hope that some inadequate scrap of humanity will make their day. The journalist Patrick Strudwick, who was horrifically beaten by a burglar, makes the point that had he fought back, he would have ended up either even more badly hurt, or having hurt someone else very badly. Both of those are certainly possibilities. But it's also possible that, confronted with a threatening enough challenge, the attackers might have simply scarpered. Who can say? It's all conjecture.

How one reacts in extremis depends a great deal on the kind of person you are (and also on how good you are at on-the-ground risk assessment). I was brought up in a fairly fight-keen culture – to hit back if someone hit me. I was reluctant at first, but when I tried it, it worked. People just stopped hitting me. Result.

I'm the sort of person who would clump a burglar with the nearest heavy object, if that seemed the best option – and consider it was all their fault – not mine. Appalling, no doubt, but there you go.

I understand that pretending you're asleep is probably more sensible. A lot of people would opt for that, regardless of legislation. But it's a shame that the left betrays what are supposed to be its guiding principles at times like these, and appears to assume that the majority of householders are one handy golf club away from uncontrollable savagery. Ultimately, if a burglar comes into my home – well, I want the right to choose how I handle a situation that I didn't ask to be in, that's all.

Oh, Lord, the right to choose. There's no more powerful and predictable way to invite the left to start looking like a bunch of intransigent extremists than to whistle up yet another round of "debate" about abortion. But the left doesn't lead the debate. In allowing the right to set terms, the left remains forever on the defensive. When Maria Miller, culture secretary, said before the Tory conference that she'd like to reduce the abortion limit from 24 weeks to 20 weeks, I thought: "There they go again." When Jeremy Hunt, health secretary, pronounced that he'd like to see it at 12 weeks, I thought he was out of his tiny mind.

But here's a shocker. Britain is exceptional in Europe when it comes to abortion. Lots of countries offer abortion on request, unlike us, and Britain should too. But the gestational time limits are fascinating. Among EU countries, 16 out of 27 are with Hunt, on 12 weeks. In France, abortion on demand is available until week 12. In Germany, it's also the first trimester. In Italy, it's within the first 90 days. Ah, you say, that'll be the Catholic influence. Perhaps. But that doesn't entirely explain Sweden, at 18 weeks, Denmark, at 12 weeks, and Greece, at 12 weeks.

On this issue, at least, the Tories are in step with Europe, and the left in Britain is out on its own. Well, not completely. Closest to us is the Netherlands, which gives abortion on request up to 13 weeks, and allows it up to 24 weeks if the mother is in distress. Only Cyprus allows abortion notably later than the UK, at 28 weeks, but always under very strict conditions.

Now, I don't point out these facts because I have a hidden agenda as a pro-lifer. I'm as pro-choice as the next progressive type. I understand why some people find all abortion abhorrent – and I think those people are dangerously sentimental, impractical and proscriptive.

I'm certain pro-lifers will never get their way in this country. But it does upset me that they succeed in having such a deadening influence over pro-choice debate. So much so that there is none. It's all about "holding the line" and fearing "the thin end of the wedge".

As with the disproportionate-force issue in burglary, pro-choice supporters will argue that only a very small number of abortions are carried out after week 20 anyway (about 2%). Is it completely mad of me to wonder if perhaps these abortions could be done earlier, if the imperative was there to make a decision sooner? At nearly six months, a woman is pretty seriously pregnant. And we all know that the earlier a termination is carried out, the better. Might an earlier limit actually be of benefit to women? Isn't it even worth discussing? Apparently not.

It's even more heretical to suggest that it might seem odd to ask medical staff to let one foetus die, and move heaven and earth to persuade another at the same stage of development to live. To suggest anything of the sort is to mark yourself out as either some sort of hideous traitor to the cause, or an attention-seeking iconoclast who is playing with fire.

But why? We should control this debate, but we ban it. We thrust it instead into the hands of the right, a group that does include extremists who wish to terminate abortion completely.

Pro-choice people are best placed to deal sensibly with the moral issues that abortion is always going to have to negotiate. It's precisely by digging in our heels that we start looking stubborn and intransigent, rather than sensitive and self-confident. I'm not sure I do want to see the limit changed. But I am sure that I'd like to have an honest, involved and sincere debate about it, before I decide, without being told that this is "giving in" to the right. We do that anyway – by refusing to think and defending, defending, defending, without question or discussion, instead.


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Eurozone crisis: summer promise quickly evaporating

After a few months in which policymakers believed they might have turned the corner, the gloom is descending

The stakes are rising again in the euro crisis. After a few months in which policymakers believed they might have turned the corner, the gloom is descending. A big row between the eurozone and the International Monetary Fund over how to cut Greece some slack, endless Spanish prevarication, egged on by Germany, over whether to ask for a bailout, and deep differences over how to use the bailout funds mean that the promise evident since June is evaporating.

But when EU leaders meet next week in Brussels for the first summit since what was touted as a breakthrough deal at the end of June, there will be no breakthrough, according to a government minister closely involved and other senior officials.

Spain will not ask for a bailout, it is said. The new Greek dilemmas – over whether to extend the rescue programme by two years, how to plug the resulting funding gap, and what to do about Athens's dissolving debt sustainability targets – will simply be shelved, delegated to finance ministers next month.

Instead of these immediate pressing issues, the summit is likely to be taken up with loftier if more remote German-led plans for greater fiscal rigour, discipline and surrender of national powers over fiscal and economic policy, as well as a fight between the 17 eurozone countries and the 10 non-euro members, Britain to the fore, over how powers are wielded at the proposed new eurozone banking supervisor, the European Central Bank.

The new German disciplines, with some of the rough edges smoothed in the "exploratory" proposals from Herman Van Rompuy, chairing the summit, are mostly stick with a little bit of carrot.

They envisage eurozone governments committing to structural reforms of their labour markets and welfare systems in enforceable "contracts". The carrot is that this would be accompanied by the creation – highly complex and it will take a while – of a separate eurozone budget (not to be confused with the EU budget) which would be small (maybe €20bn) and used to cushion the impact of the structural reforms. That's the German idea. The French are demanding that the eurozone budget be spent on relieving "asymmetric shocks" such as subsidising the costs of sudden surges in unemployment.

Van Rompuy's proposals try to please both sides by saying the new budget or fund can be used for the German and the French purposes. Not so much a two-speed Europe, then, as a two-tier Europe, with the eurozone countries increasingly shifting towards a more compact and cohesive federation despite lots of problems, arguments and conflicts. It won't happen quickly. Meanwhile, in Athens and Madrid …


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ECB's Asmussen says Greece could buy back own debt: paper


Kathimerini

ECB's Asmussen says Greece could buy back own debt: paper
Reuters
BERLIN (Reuters) - European Central Bank policymaker Joerg Asmussen was quoted in a newspaper interview saying he could imagine the Greek government using borrowed funds to buy back its own sovereign debt from financial markets in order to reduce ...
ECB's Asmussen sees promising signs from GreeceChicago Tribune
ECB's Asmussen Sees Signs Of Greece Meeting Deficit Targets In 2013RTT News
ECB's Asmussen: More time for Greece means more money neededKathimerini

all 25 news articles »

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European Union's Nobel peace prize win greeted with joy and derision

Oslo committee focuses on union's historical role in ending conflict, but Eurosceptics and many Greeks react with scorn

Applause and derision greeted the news that the European Union had won the 2012 Nobel peace prize, with British Eurosceptics dismissing the award as a "farce" and EU leaders rapturously welcoming a boost to the bloc's sagging self-esteem.

The Nobel committee in Oslo chose to ignore the multiple crises threatening the EU. Instead, it took the longer and bigger view, praising the EU's historical role in promoting reconciliation and peace, and warning its collapse would see an ominous return to "extremism and nationalism".

Announcing the decision, Thorbjørn Jagland, head of the Nobel committee, said: "The main message is that we need to keep in mind what we have achieved on this continent, and not let the continent go into disintegration again." The alternative was "awful wars", he warned bluntly.

The award brought an overjoyed reaction at EU headquarters in Brussels. "The EU is the biggest peacemaking institution ever created in human history," said Herman Van Rompuy, the president of the European council, who chairs EU summits. The award was "the strongest possible recognition of the deep political motives behind our union", he said.

José Manuel Barroso, head of the European commission, tweeted that the prize had been awarded to all 500 million EU citizens. "At its origins, the European Union brought together nations emerging from the ruins of devastating world wars – which originated on this continent – and united them in a project for peace," he said. He added that the EU had reunited a continent "split by the cold war" around common values.

But EU critics reacted with scorn. Ukip leader Nigel Farage said: "This goes to show that the Norwegians really do have a sense of humour. The EU may be getting the booby prize for peace because it sure hasn't created prosperity. The EU has created poverty and unemployment for millions."

Martin Callanan, the Tories' leader in the European parliament, said: "The Nobel peace prize was devalued when it was given to newly elected Barack Obama. By giving the prize to the EU, the Nobel committee has undermined the excellent work of the other deserving winners of this prize. Twenty years ago this prize would have been sycophantic but maybe more justified. Today, it is downright out of touch."

The government, unenthusiastic about the European project, made no comment on the prize. Lord Lamont, the former chancellor, however, called it "ridiculous, preposterous and absurd" at a time when people in the streets of Athens "are dressing up as Nazis".

There was astonishment from some in Greece. Panos Skourletis, spokesman for Syriza, the main opposition party, said: "This decision cheapens the prize and more importantly harms the institution of the Nobel peace award. I just cannot understand what the reasoning would be behind it. In many parts of Europe, but especially in Greece, we are experiencing what really is a war situation on a daily basis albeit a war that has not been formally declared. There is nothing peaceful about it."

Speaking in Oslo, however, Jagland reeled off the EU's achievements. He said a conflict between France and Germany was "unthinkable" after 70 years as postwar allies. He cited the EU's successful expansion in the 1980s, which saw the rightwing dictatorships of southern Europe (Greece, Portugal and Spain) become democracies. He also praised the inclusion of the former communist regimes of eastern Europe after the Berlin Wall came down.

He said the EU had played a key role in Balkan reconciliation. "Ethnically based national conflicts have been settled," he declared. Croatia would join the EU next year, Montenegro was opening membership negotiations and Serbia had candidate status, he said. The EU had also "advanced democracy and human rights" in Turkey, he suggested, overlooking the fact that Turkey's membership application has dragged on inconclusively for decades.

Jagland admitted that the 27-member bloc was not in great shape, wracked by its worst crisis of confidence. He said: "The EU is currently undergoing grave economic difficulties and considerable social unrest." But he stressed: "The Norwegian Nobel committee wishes to focus on what it sees as the EU's most important result: the successful struggle for peace and reconciliation and for democracy and human rights. The stabilising part played by the EU has helped to transform most of Europe from a continent of war to a continent of peace."

The Dutch Eurosceptic Geert Wilders was unimpressed, saying: "Nobel prize for the EU. At a time Brussels and all of Europe is collapsing in misery. What next? An Oscar for Van Rompuy?"

Jean-Luc Mélenchon, leader of France's far-left Front de Gauche, called the award an example of "black humour".

Le Parisien newspaper said the Nobel "comes at a time when European unity is being greatly tested. The eurozone crisis has put difficulties of solidarity between states worried about protecting their interests, in the spotlight. The rich economies of the north are dragging their feet over coming to the aid of southern countries financially strangled by public debt and suffering severe austerity cures."

Jagland defended the committee's seemingly counter-intuitive decision. He spoke repeatedly of the EU's policy of integration towards former Yugoslavia, the scene of bloodbaths just 20 years ago: "We have to keep in mind that not so many years ago people from this part of Europe killed each other in awful wars … We are only focusing on what we have achieved on this continent and what could happen if disintegration starts again."

Slovenia is already a member and Croatia is slated to become the EU's 28th member next year. The praise for the Balkan policy came despite the EU's failures to stop the bloodshed in Bosnia in 1992-95.

In a further paradox, given the emphasis on the EU's prowess at reconciliation, the current six-month presidency is held by Cyprus, a country whose intractable conflict and partition has defied decades of mediation and has contributed hugely to the freeze in Turkey's negotiations to join the EU.

Jagland said the Nobel committee, made up of members from non-EU Norway, was not trying "to save the euro" or attempting to dig Europe out of its current hole. Asked what citizens from Greece, Spain and Ireland would make of its unanimous decision, he said most people from these countries still supported the EU: "I think this historic empathy still remains in the heads of so many Europeans. They don't want to lose what has been achieved. Many may criticise the current policy but that is a different matter."

Jagland said it was up to "EU institutions" to decide who would pick up the gold medal and give a lecture at the ceremony in Oslo on 10 December. One candidate is the former German chancellor Helmut Kohl, though he is in poor health. He said: "The Nobel peace prize for the EU is above all a confirmation of the European peace project."

Additional reporting by Helena Smith in Athens and Kim Willsher in Paris


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Greeks baffled by the EU’s peace prize

Greeks grappled today to understand why the Nobel committee awarded its annual peace prize to the institution that has been battering them with a barrage of austerity measures and pain.



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Citi lowers probability of "Grexit" to 60 percent from 90 percent


Citi lowers probability of "Grexit" to 60 percent from 90 percent
Reuters
ATHENS (Reuters) - Citigroup changed on Friday its view that Greece will almost certainly leave the euro, saying key euro zone players seem to have decided a Greek exit would do more harm than good. The U.S. bank lowered its probability of a "Grexit ...


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Somali Pirates Release Greek-Owned Ship for Ransom


The Guardian

Somali Pirates Release Greek-Owned Ship for Ransom
ABC News
A Liberian-flagged Greek-owned ship and its crew of 21 Filipinos who were held hostage by pirates for eight months have been released following the payment of a $2.3 million ransom, a Somali pirate said Friday. Bile Hussein, a pirate based in Garacad ...
Somali pirates free Greek-owned ship, say ransom was $5.7 mlnReuters
Somali pirate: Greek-owned ship released after $2.3 million ransom is paidWashington Post

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Odds of Greek Exit Falling, Citi Says, But Reckoning's Still on the Table


Wall Street Journal (blog)

Odds of Greek Exit Falling, Citi Says, But Reckoning's Still on the Table
Wall Street Journal (blog)
”It will become evident once again that the Greek program remains off track and Greece's debt is still unsustainable. Unless a write-off of official debt is agreed upon – quite unlikely, in our view – we think a stalemate between Greece and its ...
Citi Slashes The Odds Of An Imminent Greek ExitBusiness Insider

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Morgan Crucible profit warnings hits engineering sector while FTSE falters again

Advanced materials group follows in footsteps of Cookson by reporting disappointing trading

A profit warning from industrial group Morgan Crucible Company sent shares lower across the engineering sector.

The advanced materials company, which provides carbon technology services to the aerospace industry as well as ceramics and body armour, was hit earlier in the week after a sector peer Cookson issued its own warning of a slowdown.

But after it said trading had deteriorated in the third quarter across most of its markets, particularly in Europe and China, its shares lost 28.5p to 227.3p. The slowdown was most pronounced in its advanced materials and technology business, including a delay in body armour contracts from the second half until 2013.

Third quarter revenue was around 10% lower than in the first quarter, so its full year performance would be "materially below the board's previous expectations." It said it was taking actions to cut costs, with a £15m charge in 2012 but annual benefits of £7m to £8m.

Harry Philips at Oriel Securities said:

Following on from Cookson, it will be a case of spotting the next warning. IMI and Bodycote International will top many lists but the lack of a Chinese/Asian exposure will be a plus – much of Morgan and Cookson is the lack of an second half pick up the region.

IMI dropped 21.5p to 904p, Bodycote fell 22.9p to 351.3p, automotive and aerospace group GKN lost 7.1p to 209.9p, Cookson closed 9p lower at 530.5p and controls group Spectris slid 112p to £15.49.

In a rather timely move, analysts at N+1 Singer cut their recommendation Spectris from buy to hold. They said:

We have reduced our forecasts for Spectris, ahead of its third quarter trading statement next week, to reflect the weakening industrial backdrop. We have cut our earnings per share estimates by around 6% [for the next three years]. We have also reduced our target price from 1950p to 1780p.

Overall, the FTSE 100 fell 36.43 points to 5793.32 as Thursday's rally ran out of steam. Over the week the index lost around 80 points as the eurozone crisis dragged on, with investors anticipating a Spanish bailout request as Standard & Poor's downgraded the country's credit rating to BBB minus, one notch above junk status. Talks about Greece's austerity budget also continued, despite a flying visit from German chancellor Angela Merkel to Athens to show support for the country's government.

But better than expected US consumer confidence figures and helped limit the damage.

Banks turned in a mixed performance after contrasting results from US firms JP Morgan Chase - better than expected - and Wells Fargo - disappointing. Lloyds Banking Group added 0.45p to 39.7p but Barclays dipped 0.45p to 232.2p and Royal Bank of Scotland fell 2.9p to 270.9p. RBS floated its Direct Line subsidiary on Thursday at 175p a share, and the insurer closed at 186.5p, down 1.5p on the day.

Elsewhere it proved to be a mixed day for Roman Abramovich.

Evraz, the Russian steelmaker controlled by the billionaire owner of Chelsea football club, was the biggest faller in the FTSE 100, down 13.3p to 234.3p after it temporarily shut its Czech production line due to low demand. The European sector has been hit by the economic downturn, as well as rising costs and cheap imports.

At the same time analysts at Credit Suisse cut their recommendation from neutral to underperform and their target price from 310p to 200p, on falling iron ore and coking coal prices:

As Evraz has a high level of vertical integration with a fairly high cost of mining, it remains highly leveraged to the global bulk commodities' downcycles. As we downgrade iron ore and coking coal price assumptions for 2013-14, we expect a large portion of Evraz's mining operations to become loss-making in 2013.

But on the bright side for Abramovich, Aim-listed AFC Energy, the fuel cell company where his Ervington Investments is paying £8.7m for a 15% stake, added nearly 16% to 38.5p following Thursday's news of his involvement.

Kazakhmys closed 30.5p lower at 715.5p after Barclays moved from overweight to equal weight and cut its price target from 910p t0 765p in a hefty note on the mining sector. On the general market conditions, the bank said:

In 2012 we believe commodity and equity prices have followed a fairly logical and predictable path, as have company management teams. We believe the next step will be an increase in Chinese fixed asset investment, leading to further commodity and equity price increases.

On Kazakhmys in particular, it said:

Our view on Kazakhmys was premised on the assumptions that 1) management had its high cost structure under control and 2) the market had priced this in, neither of which was nor seems to be true now.

Among the mid-caps Bumi continued its recovery after plans to abandon its Indonesian coal business and become a cash shell, adding 21p to 280p.

WH Smith added 5p to 636p, recovering some of Thursday's fall in the wake of news that Kate Swann, widely regarded as having done a good job at the retailer, was stepping down as chief executive next summer. There was some speculation she could move on to Home Retail, down 0.7p at 104.3p, the owner of her former employer Argos. but analyst Nick Bubb said:

It was interesting that the shorts started to run for cover in Home Retail yesterday, on the fear that Kate Swann will march in as chief executive next summer and sort the business out, but successful executives don't usually go back to companies they've worked at before.

Hargreaves Lansdown moved 24p higher to 712p after an upbeat trading statement. The investment firm reported record assets under management of £2bn and revenues up 20% in the first quarter. It said:

Future stock market levels and investor confidence will have a significant part to play during the remainder of our financial year. In the coming months we will be launching our iPad app and a number of other major new initiatives.

It should also benefit from a shake-up of the way financial products are sold. From next year, commissions will be replaced by a fee-based system and Hargreaves believes it has put in place a competitive structure ahead of the changes.

BAE Systems fell 1.4p to 327.1p as the group began looking for a plan B following Wednesday's collapse of its proposed merger with EADS.

Elsewhere in the defence sector, Chemring climbed 7.4p to 342.7p after a deadline for US private equity group Carlyle to either make a firm offer or walk away was extended by the takeover panel from last night to 9 November.

Chemring said the move was "to enable the parties to continue their ongoing discussions regarding a possible offer."

The company, which makes flares, ejector seat mechanisms and bomb detectors, initially announced it had received an approach in mid-August, but a subsequent profit warning raised fears that the predator, Carlyle, might walk away, or at least make a lower offer than originally planned.

Analysts took the latest extension as a good sign. Roger Johnston at Edison Investment Research said:

[This] shows the two sides are trying to thrash out a deal. I still feel it is unlikely a trade buyer will emerge at this time and therefore this is all about price now. Carlyle will feel under no pressure to bid high while Chemring management will not want to go out with a whimper so this will be a finely balanced negotiation. I suggest a price around the 400p mark will be enough to clinch the deal, but whether Carlyle feels this reflects defence uncertainties enough is another matter.


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Greece, in 2012: fascists beating up people while the police look on


The Guardian

Greece, in 2012: fascists beating up people while the police look on
The Guardian
Greece is being held hostage by a police force that increasingly appears beyond state control, and which has long forsaken its role of protecting citizens from the thugs they now side with, and by a government which relishes the distraction the Golden ...
Greece: Minister Supplied neo-Nazi Golden Dawn with Immigrant Children DataIBTimes.co.uk
Golden Dawn, Religious Protest Stops PlayGreek Reporter
Greece takes it out on immigrantsMacleans.ca

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Greece, in 2012: fascists beating up people while the police look on | Yiannis Baboulias

As the EU is awarded the Nobel prize, far-right violence is the norm in Greece – carried out with the police's tacit approval

The timing is nothing if not ironic. On the day the EU has been awarded the Nobel peace prize, we watch as Europe sits idly by and lets fascism brew once again – this time in Greece. If a sharp turn towards religious fundamentalism and fascism is to be avoided, Europe needs to act now.

On Thursday night the Athens premiere of Terrence McNally's play, Corpus Christi, was cancelled following protests by members of the far-right party Golden Dawn (including some MPs) and religious groups.

The protest had a clearly homophobic agenda. Manolis V, a journalist, was attacked by protesters while the police apparently did nothing: "The police is next to us. I shout 'They're beating me, aren't you going to do something?'," he wrote on Twitter. "I move away so I can look on from distance. A well-known Golden Dawn MP follows me. He punches me twice in the face and knocks me to the ground. While on the ground, I lose my glasses. The Golden Dawn MP kicks me. The police are just two steps away but turn their back."

The spectacle of fascists physically attacking people whose moral agenda they disapprove of has become routine in today's Greece. What should come as more of a shock is the tacit approval of the police.

When four protesters were arrested, the Golden Dawn MP Christos Papas boarded the police bus in which they were held, and released one of the prisoners. From the video depicting the incident, we can see that no officer tried to stop him.

Golden Dawn know that the police are on their side, and so do those they attack. Manolis says he is afraid to go to the police and file a lawsuit, because he doesn't want them to have his name and address on record.

The police were not so slow to react two weeks ago when they arrested for blasphemy the man behind the satirical Facebook page of Geron Pastitsios after a question submitted in parliament by a Golden Dawn MP. Nor were they slow to react when anti-fascists clashed with Golden Dawn supporters in Amerikis square and 15 were arrested, and allegedly tortured, last week. To add insult to injury, after announcing that they are conducting an investigation into a "Golden Dawn MP", the police refused to name him, despite having no problem naming teenagers who were preemptively arrested before a demonstration three weeks ago.

The Greek Orthodox church, its huge wealth unscathed by the crisis, is in no rush to condemn its clerics from siding, condoning, instigating and participating in acts of violence and disrespect against immigrants, homosexuals and people who challenge their view of what being Greek and orthodox entails.

Greece is being held hostage by a police force that increasingly appears beyond state control, and which has long forsaken its role of protecting citizens from the thugs they now side with, and by a government which relishes the distraction the Golden Dawn provides from the cuts and tax hikes. The government's unwillingness to revoke parliamentary privileges from those Golden Dawn MPs who participate in or condone violent acts, and to speed up processes to have them prosecuted and condemned, demonstrates this.

Not only have the Golden Dawn refused to apologise for their actions outside Corpus Christi, but the Golden Dawn MP Illias Kasidiaris – famous for physically assaulting a leftwing politician on live TV – didn't miss the chance to hand out warnings: "In any case where the religious sentiment of Greeks is insulted, the Golden Dawn will react dynamically," he said. "If someone tries to stage a play making fun of Muhammad in a Muslim country, he will lose his head. They won't react peacefully as Greeks do."

Judging by Sunday's protest, which Kasidiaris did not attend, "peace" equals abuse, censorship, violence and a complete disregard for the laws Golden Dawn supposedly venerate. Apparently we should just be thankful for not having our heads chopped off.

It is once again time for the Greek people to ask themselves, is the Golden Dawn a legitimate political party? And, as Paul Mason asked a few days ago on Newsnight: is this even a democracy any more?


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Asmussen: Greece could buy back debt to meet its debt goal


Asmussen: Greece could buy back debt to meet its debt goal
ForexLive (blog)
0 comments || Add comment. The ECB can't buy bonds directly; Greek debt/GDP to be far above 120% by 2020; A buyback is not the same as a debt writedown. Presumably the ECB board members means that Greece could use bailout funds (or ESM funds?) ...

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Citi Slashes The Odds Of An Imminent Greek Exit


Citi Slashes The Odds Of An Imminent Greek Exit
Business Insider
Citi's European economics team, one of the most bearish on the Street, has been saying since this summer that they saw the odds of a Greek exit from the euro currency by the end of 2013 at a highly likely 90 percent. Today, though, they are paring ...

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Despite debt crisis, EU wins Nobel Peace Prize





The Norwegian prize jury urged all Europeans to remember those efforts as they tackle the debt crisis tearing at the 27-nation bloc.

The award was hailed at EU headquarters in Brussels and by pro-EU government leaders across the continent but derided by "euroskeptics" who consider the EU an elitist superstate that strips citizens of their rights and erodes national identities.

The announcement was met with mixed reactions in debt-ridden countries like Spain and Greece, where many blame Germany and other northern EU neighbors for the painful austerity measures like higher taxes and job cuts they have endured to salvage their floundering economies.

The Norwegian Nobel Committee honored the EU for promoting "peace and reconciliation, democracy and human rights" in Europe for six decades following the tremendous devastation of World War II.

[...] European unity is being threatened by the debt crisis that has stirred deep tensions between north and south, caused unemployment to soar and sent hundreds of thousands of its citizens into the streets to protest austerity measures.

The debt crisis is also fueling the rise of extremist movements such as Golden Dawn in Greece, which opponents brand as neo-Nazi.

Europe is now stuck in a three-year financial crisis caused by too much government debt.

[...] a fall in government spending has had a damping effect on Europe's economy — in the second quarter of this year, the EU's gross domestic product shrank 0.2 percent compared to the previous quarter.

The region is the U.S.'s largest export customer and any fall-off in demand will hurt U.S. businesses — as well as President Barack Obama's election prospects.

Normally, the prize committee either honors lifetime achievement, like when longtime peace mediator Martti Ahtisaari won in 2008, or promotes a work in progress, such as the 1994 award to Yasser Arafat, Shimon Peres and Yitzhak Rabin, which was meant to boost Mideast peace efforts.


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Somali pirate: Greek-owned ship released after $2.3 million ransom is paid

MOGADISHU, Somalia - A Somali pirate says the Liberian-flagged, Greek-owned bulk carrier MV Free Goddess has been released after payment of a $2.3 million ransom.

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Germany firm on Greece despite IMF pressure

Merkel rebuffs call by the International Monetary Fund to give Greece more time to clean up finances.

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It's not all Greek to USC center Khaled Holmes


It's not all Greek to USC center Khaled Holmes
Los Angeles Times
USC center Khaled Holmes, who has a degree in classics, was pressed by The Times' Gary Klein to name the character he most identifies with. Holmes considered Odysseus and Achilles, then settled on Hercules. “With everything thrown at him, he found a ...

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Europe's Nobel peace prize: bad timing all round | Michael White

Given the EU's current crises, both existential and economic, the Nobel committee could have chosen a better moment

Is it right of the Nobel committee to award this year's peace prize to the European Union at a time when the EU is facing the gravest existential crisis of its 55-year history, and when the continent's elected leaders have repeatedly failed to resolve an economic conundrum which is largely of its own devising? No, I don't think it is.

It smacks of bad timing, just as the committee's award of the same prize to Barack Obama in 2009 – when he'd barely sat down in the Oval Office – was toe-curlingly premature. It damaged the new president's standing at home (where plenty of US voters mistrust do-gooding foreigners) and was deemed sufficiently misjudged to make Obama stay away from Oslo award ceremony. Smart man, given that the winners list contained some failures and a few rascals.

Early reactions to the 2012 award suggest puzzlement. Why now when the protracted eurozone crisis staggers on? Why not earlier, for instance after the successful enlargement into the former Soviet bloc in the years after the Berlin Wall collapsed and the old Soviet Union imploded? Why not later, when the EU has triumphed over its financial problems?

The puzzlement is offset by the delighted noises coming out of Brussels and other major capitals. Did I just hear Italy's Romano Prodi on the BBC saying Europe is more united than at any time since the Roman empire (collapsed 476 AD) and still in need of "more and more unity". That sort of response tips my own reaction towards what Lord David Owen is calling "churlish".

He should talk. He's been pretty churlish towards the EU's record in recent decades, since he swung from ardent enthusiasm towards a more agnostic (and healthy) attitude. The trouble with Brussels is that, unlike some brave and persistent local hero in a world trouble spot - Northern Ireland has had several worthy winners - it doesn't need morale-boosting pats on the back. It's quite good at doing that without any outside help. Too good in fact.

Clearly the citation suggests that the award is meant to encourage EU leaders to press forward with the project as well as to recognise – rather belatedly – that it has helped keep the peace in Europe since 1945. Eurosceptics often appear to forget this, pocketing the gains without much acknowledgement while quibbing about the price of vegetables. War was very terrible twice in the Europe of the 20th century and nearly destroyed it. Perhaps with hindsight we may say it did.

But Nato played at least as big a part and did so sooner at crucial junctures, not least in expanding into the former Soviet bloc after 1989 and in being more effective in the former Yugoslavia of the 1990s. The fact that the US was the dominant player and the Russians the clear and present danger made it easier for Nato to be more decisive and dynamic.

Germany's abject rejection of military force as its main instrument of foreign policy after 200 years of Prussian-led expansionism was also pretty important. If awards are to go to institutions, then both Germany and Nato deserve consideration. Silly you may feel? Well, yes indeed. How about the World Health Organisation or the UN Refugee Agency team? The Red Cross won the award in both world wars.

The trouble with today's timing is that it may encourage renewed complacency of the kind that has marked the protracted eurozone crisis since it startedin 2007 and became lethal when the Bush White House allowed Lehman Brothers to fail the following year. The EU blamed Anglo-Saxon market capitalism for the crisis, as if the structure of the eurozone itself was not as defective as anything done by London, New York or Washington.

More lethal still, the euro's weakness – reckless, under-priced lending to peripheral economies (Greece, Portugal, Ireland etc) which were likely to blow up - has proved much harder to remedy. The major players have usually done too little and too late to impress markets and ratings agencies which have gone from their own complacent assessments to neurosis.

They did it and it's still not clear if they can put it right as the European Central Bank (ECB) struggles to overcome German reluctance to letting it become a real central bank and do whatever it deems necessary to restore confidence and growth.

"We don't want to underwrite Greek debt," say the Germans.

"But you did when you agreed to let them enter your currency union," comes the reply. "You were a pay-day loan operator, Wonga to the poor."

The outcome is pressure to create a trans-eurozone banking union and - who knows – an EU finance ministry with real teeth, and to do so at breakneck speed. The austerity imposed on Greece and other stricken states is creating a backlash in the name of democratic accountability, the resurgence of the very nationalism the EU was created back in 1957 to quell for ever.

It looks ugly and could easily become uglier. If it is averted it will be via a German-dominated core Europe, the kind of outcome which Britain has struggled for centuries - against France, Spain, Russia and Germany itself - to prevent. The future is clouded. Yet the word from Oslo – and from Brussels – is that another Franco-German war is unthinkable. Let us fervently hope they are all right.

But nothing is unthinkable.


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