How the world sees Greece
“On a day like this, it’s nice to die pleasantly and standing upright in public view. My name is Pavlos Fyssas from Pireaus, [I’m] Greek with all that entails – not just a flag.” These were the prophetic lyrics of 34-year-old musician Pavlos Fyssas in a hip-hop song he wrote less than a year before being stabbed to death on the streets of his neighbourhood by a middle-aged sympathiser of Greece’s extreme-right party, the Golden Dawn.
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Leading shares end month on a negative note as US government faces shutdown and Italy sees confidence vote
Markets ended the month on a downbeat note as political chaos in the US and Europe sent shares sharply lower.
As the deadline approached for a US government shutdown, with politicians looking unlikely to reach an agreement on the country's budget, investors headed for safety. Elsewhere the Italian government faced the prospect of a confidence vote on Wednesday after Silvio Berlusconi told his party to resign from the coalition, while in Greece the arrest of Golden Dawn members renewed political uncertainty in the struggling country.
On top of that an HSBC manufacturing survey for China came in at 50.2, up from 50.1 but lower than the initial reading of 51.2.
So the FTSE 100 finished at 6462.22, down 50.44 points but up around 50 points on the month. Michael Hewson, senior market analyst at CMC Markets UK, said:
Market sentiment today has been primarily driven by politics and will likely continue to do so until such time the political situations in both Italy and the US get resolved to everyone's satisfaction, with widespread losses across the board, with Italian markets leading the decliners today.It's not been a great way to end the month, but...equity markets across Europe have had a broadly positive September, and a very positive third quarter, so today's declines while fairly large, do need to be put in that wider context.Housing companies built up some good gains, following the UK government's decision to bring forward the next stage of its Help to Buy programme, a £12bn mortgage guarantee scheme to boost the housing market, and mortgage approvals reaching a five year high.
Persimmon put on 25p to £10.86, making it the biggest riser in the leading index. Among the mid-caps, Barratt Developments was 6.5p better at 308.6p. Both were also helped by positive comments from JP Morgan Cazenove. The broker said:
The housebuilders underperformed the market by around 11% in the third quarter, impacted by worries over the scale of upside and longer-term sustainability of earnings, driven in turn by concerns over eventual interest rate increases, cost inflation and speculation that Help to Buy could be withdrawn; all of which are concerns that we believe to be misplaced. Despite taking what we view as a conservative stance on house price inflation, volume growth and cost inflation, our earnings per share estimates for 2014 and 2015 are around 25% ahead of Bloomberg consensus. We view the recent sell-off as a buying opportunity.Among the other builders, Bellway added 53p to £13.15 and Taylor Wimpey climbed 3.4p to 100.4p.
Worries about a slowdown in China, as evidenced by the HSBC survey, helped send mining shares lower. Anglo American fell 22p to £15.18, Glencore Xstrata dropped 7.3p to 336.7p and Rio Tinto lost 44p to £30.23.
Aerospace and defence group were unsettled by the possible US government shutdown, with BAE Systems down 12.3p at 454.4p and GKN 10.1p lower at 342p.
But Shire rose 11p to £24.78, lifted by City hopes for its next range of products and cost saving announcements. Analysts at JP Morgan Cazenove raised their recommendation on the pharmaceutical group from neutral to overweight and their price target from £22.70 to £30.
Among the other risers G4S - currently providing security for the Conservative party conference - edged up 0.4p to 254.3p following weekend reports that an activist hedge fund, Cevian Capital, is pushing for the company to sell its cash solutions arm, which accounts for 25% of profits.
Elsewhere Unilever was down 17p at £24.40 as ING said it could be affected by any negative comments about emerging markets from a Nestle investor presentation. After the market closed Unilever reported signs of a slowdown. The Dove and Ben & Jerry's business said it was on track to meet its 2013 priorities but said emerging markets had seen weaker growth in the third quarter, partly due to currency weakening. Developed markets remained flat to down, meaning overall growth for the quarter would be 3% to 3.5%. In the second quarter it saw a 5% rise in underlying sales.
Reckitt Benckiser edged up 2p to £45.20 despite a sell not from Liberum. It said:
The debate on Reckitt shares is more on how to value Pharmaceuticals (21% of earnings in 2012) than on the core business. Taking reasonable 11 to 12 times EBITDA multiples for the core unit implies an enterprise value for Pharmaceuticals of £6bn to £8bn which could only be justified if Pharmaceuticals' earnings grew 50%-100% in 2014 – we find that unrealistic given current competitive dynamics and recent earnings trends.Liberum was more positive on ITV, down 0.5p at 175.3p:
Press reports out that ITV has sold the old Granada TV studios in Manchester for £26.5m subject to redevelopment planning permission. Probably not included within analyst forecasts for cashflow (it is not in ours; we have 2013 net cash of £194m) so gives ITV more flexibility if it wants to return cash.William Hill added 1p to 403p after signing a partnership agreement with gaming system specialist Net Entertainment to distribute its casino games over the UK bookmaker's network.
But rival Ladbrokes lost another 2.5p to 169.2p after falling 9% in the wake of Thursday's profit warning, which was mainly due to a shortfall in its digital division.
PersimmonBarratt DevelopmentsBellwayTaylor WimpeyAnglo AmericanGlencore XstrataRio TintoBAE SystemsGKNShireG4SUnileverReckitt BenckiserITVWilliam HillLadbrokesNick Fletchertheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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Some critics say Recep Tayyip Erdogan's proposals do not go far enough in driving Turkey's faltering democratisation
Turkey's prime minister, Recep Tayyip Erdogan, unveiled the first big package of liberalising reforms in years on Monday, making overtures to the large Kurdish minority and proposing that headscarved women be allowed to sit in parliament and work as civil servants for the first time in the history of the Turkish republic.
The proposals, which have been repeatedly delayed due to their potentially incendiary impact, followed a summer of the largest and most persistent anti-government protests in Erdogan's 11 years in power.
At a press conference in Ankara, where journalists were not allowed to ask questions, Erdogan announced that the headscarf ban would be lifted for women in public offices except for those that require uniforms such as the military, police and the courts. The ban has long been one of Turkey's most contentious laws and many analysts see the reform as an important step towards more democratic rights.
The raft of reforms unveiled on Monday It was Erdogan's third package of reforms in more than a decade in office, and he promised more to come. "This is not the first package, and it will not be the last," he said.
The measures partly returned Erdogan to the reformist zeal of his early years in power, after months of being accused of being an intolerant authoritarian because of his draconian, violent response to weeks of street protests in June. However, critics said the proposals did not go nearly far enough in driving Turkey's faltering democratisation.
The reforms aim at keeping on track the year-old peace process between the government and Kurdish rebels of the Kurdistan Workers' party (PKK), to bring to an end to one of the world's longest-running ethnic conflicts, costing up to 40,000 lives over 30 years. Erdogan suggested lowering the election threshold for a political party to enter parliament from 10% to 5% of the national vote, which would finally make it possible for pro-Kurdish and other small parties to qualify.
He proposed relaxing the rules for state funding for political parties, enabling the Peace and Democracy party (BDP), the main Kurdish party, to receive cash. Further reforms include the abolition of the nationalist student pledge in primary and middle schools that forces pupils of all ethnicities to proclaim themselves "honest, hard-working Turks".
Erdogan said the government would allow mother-tongue education in private schools. Kurds, who are estimated to form 20% of the country's population, have long been demanding the right to be educated in their own language. Original Kurdish village names will be restored and a ban on the letters q, w and x – used in Kurdish but not in Turkish – will be lifted.
Analysts welcomed the government's proposals as important to Turkey's liberalisation. "I see [the reforms] as a very positive step in the right direction", said the journalist and commentator Oral Calislar. "Of course it does contain shortcomings, but especially the abolition of the nationalist school pledge and the reform of the election threshold will have a very positive impact on the peace process with Kurds."
The co-chair of the pro-Kurdish BDP, Gülten Kisanak, said the package failed to meet their expectations. "Was this really a package worth waiting for? Kurds wished for the Kurdish problem to be solved, Alevis [Turkey's largest religious minority] wished for freedom of religion, and other discriminated groups in Turkey wished for more participatory governance. They've fought for that for years. We say very clearly that this package does not meet any of these expectations. It is not a package that responds to Turkey's need for democratisation."
Vahap Coskun, an assistant professor at the Dicle University in Diyarbakir, the predominantly Kurdish city in the south-east, said the failure to change arbitrary anti-terrorism laws, which criminalise mainly Kurdish politicians and journalists was a major flaw: "In order to bring the peace process forward, these unjust terror trials need to be resolved," he said.
Many criticised Erdogan's failure to address other sensitive minority rights issues. Kurdish language education in state schools remains impossible and the prime minister barely made any concessions to greater religious and cultural rights for the large Alevi minority. He also failed to restore a Greek Orthodox monastery near Istanbul to its church owners.
"The package is completely cosmetic," said Koray Caliskan, a political scientist at Istanbul's Bosporus University. "[Erdogan] gave more freedom to three letters than he did to 10 million Kurds in Turkey. What about more local autonomy that Kurds have been waiting for?"
Caliskan also complained that mother-tongue education would only be available in non-state schools: "Offering this only to children of the rich is not a step towards more equality in Turkey, but towards greater inequality." He said the lack of any reforms concerning Alevi rights was another disappointment. "Alevis were not mentioned at all. This package is empty."
The government has said it is working on a separate package for Alevi rights. Coskun said Monday's proposals should be met with optimism: "I think that the importance of these reforms should not be understated. Now it is time to pressure the government, both in parliament and in civil society, to continue and move forward with Turkey's democratisation."
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The patient may appear to be on the mend. But with chill winds blowing in from the European periphery, the euro is far from safe
A little more than a year ago, in the summer of 2012, the eurozone, faced with growing fears of a Greek exit and unsustainably high borrowing costs for Italy and Spain, appeared to be on the brink of collapse. Today, the risk that the monetary union could disintegrate has diminished significantly – but the factors that led to it remain largely unaddressed.
Several developments helped to restore calm. The European Central Bank (ECB) president, Mario Draghi, vowed to do "whatever it takes" to save the euro, and quickly institutionalised that pledge by establishing the ECB's "outright monetary transactions" programme to buy distressed eurozone members' sovereign bonds. The European stability mechanism (ESM) was created, with €500bn (£419bn) at its disposal to rescue eurozone banks and their home governments. Some progress has been made on a European banking union. And Germany has come to understand that the eurozone is as much a political project as an economic one.
Moreover, the eurozone recession is over (though five periphery economies continue to shrink, and recovery remains very fragile). Some structural reform has been implemented and a lot of fiscal adjustment has occurred. Internal devaluation (a fall in unit labour costs to restore competitiveness) has occurred to some extent – in Spain, Portugal, Greece, and Ireland, but not in Italy or France – improving external balances. And, even if such adjustment is not occurring as fast as Germany and other core eurozone countries would like, they remain willing to provide financing, and governments committed to adjustment are still in power.
But beneath the surface calm of lower spreads and lower tail risks, the eurozone's fundamental problems remain unresolved. For starters, potential growth is still too low in most of the periphery, given ageing populations and low productivity growth, while actual growth – even once the periphery exits the recession, in 2014 – will remain below 1% for the next few years, implying that unemployment rates will remain very high.
Meanwhile, levels of private and public debt. domestic and foreign, are still too high, and continue to rise as a share of GDP, owing to slow or negative output growth. This means that the issue of medium-term sustainability remains unresolved.
At the same time, the loss of competitiveness has been only partly reversed, with most of the improvement in external balances being cyclical rather than structural. The severe recession in the periphery has caused imports there to collapse, but lower unit labour costs have boosted exports insufficiently. The euro is still too strong, severely limiting the improvement in competitiveness that is needed to boost net exports in the face of weak domestic demand.
Finally, while the fiscal drag on growth is now lower, it is still a drag. And its effects are amplified in the periphery by a continuing credit crunch, as undercapitalised banks deleverage by selling assets and shrinking their loan portfolios.
The larger problem, of course, is that progress toward banking, fiscal, economic and political union, all of which are essential to the eurozone's long-term viability, has been too slow. Indeed, there has been no progress whatsoever on the latter three, while progress on the banking union has been limited. Germany is resisting the risk-sharing elements of such a union, such as common deposit insurance, a common fund to wind up insolvent banks, and direct equity recapitalisation of banks by the ESM.
Germany fears risk-sharing would become risk-shifting, and that any form of fiscal union would likewise turn into a "transfer union", with the rich core permanently subsidising the poorer periphery.
At the same time, the entire regulatory process for the financial sector is pro-cyclical. The new Basel III capital-adequacy ratios, the ECB's upcoming asset-quality review and stress tests, and even the European Union's competition rules (which force banks to contract credit if they receive state aid) all imply that banks will have to focus on raising capital at the expense of providing the financing needed for economic growth.
Moreover the ECB, in contrast to the Bank of England, is unwilling to be creative in pursuing policies that would ameliorate the credit crunch. Unlike the US Federal Reserve and the Bank of Japan, it is not engaging in quantitative easing; and its "forward guidance" that it will keep interest rates low is not very credible. On the contrary, interest rates remain too high and the euro too strong to jump-start faster economic growth in the eurozone.
Meanwhile, austerity fatigue is rising in the eurozone periphery. The Italian government is on the verge of collapsing; the Greek government is under intense strain as it seeks further budget cuts; and the Portuguese and Spanish governments are having a hard time achieving even the looser fiscal targets set by their creditors, while political pressures mount.
And bailout fatigue is emerging in the eurozone's core. In Germany, the next coalition government looks set to include the Social Democrats, who are pushing for a bail-in of the banks' private creditors, which would only exacerbate balkanisation of the eurozone's banking system; and populist parties throughout the core are pushing against bailouts for banks and governments alike.
So far, the grand bargain between the core and the periphery has held up: the periphery continues austerity and reform while the core remains patient and provides financing. But the eurozone's political strains may soon reach a breaking point, with populist anti-austerity parties in the periphery and populist anti-euro and anti-bailout parties in the core possibly gaining the upper hand in next year's European parliament elections.
If that happens, a renewed bout of financial turbulence would weaken the eurozone's fragile economic recovery. The calm that has prevailed in eurozone financial markets for most of the past year would turn out to be only a temporary respite between storms.
• Nouriel Roubini is Chairman of Roubini Global Economics, and professor of economics at the Stern School of Business, New York University.
Copyright: Project Syndicate, 2013
Eurozone crisisEuroEuropean Central BankEuropean UnionEuropean monetary unionEconomicsBankingEuropean banksBasel IIIFinancial crisisItalyGermanyFinancial sectorEuropeNouriel Roubinitheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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Athens (AFP) - Greece's Golden Dawn neo-Nazi party regularly organised "assault militias" in which dozens of members would ride the streets on motorbikes, hitting immigrants with a stick, according to a government report and testimonies cited in the Greek press on Monday.
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NEW YORK (AP) — Alexander Maksik, a 40-year-old literary novelist, has learned a great deal about life and art and the unexpected ways they can meet.
A graduate of the University of Iowa's celebrated creative writing school, he is a widely praised author whose books include "You Deserve Nothing," about an American teacher in Paris fired for having an affair with a student, and a new release, "A Marker to Measure Drift," about a homeless Liberian woman on a Greek island.
But in an otherwise exemplary career, there is one catch: "You Deserve Nothing" was based on real events, about Maksik and his student, and has become the subject of ongoing debate. Several one-star reviews appeared on Amazon.com, from commenters alleging that they were former students at the American School of Paris who were disgusted by the book. Some reviewers who liked "You Deserve Nothing" were unsettled when they learned of the similarities, first revealed on the website Jezebel, between the author and his character.
"At the first hint that the affair — between a 17-year-old girl and a 33-year-old man — was real, I felt my stomach twist," wrote Brian Hurley of fictionadvocate.com. "What had been a racy, convention-defying romance in the novel suddenly felt like a craven, embarrassing scandal."
Maksik has been reluctant to discuss the controversy, but spoke at length about it during a recent interview with The Associated Press. Drinking tea at a cafe on Manhattan's Upper West Side, Maksik is as regretful about his private behavior as he is forceful about his right to use it for his novel, one he thinks should be liked or dismissed based on the quality of the book itself.
"I was in bad shape, and this thing had happened and I wondered how I allowed it to happen, how I had made all these decisions," says Maksik, whose graying hair is offset by his youthful, open expression.
"And it was a very upsetting time for me. I was humiliated. I was ashamed and angry at myself and angry in general. And this was the only thing I thought I could do," he says. "It was an effort to make sense of what had happened, and an effort to turn this horrible experience into some version of art."
Maksik is in privileged company when it comes to turning private experience into literary material. Truman Capote alienated high society friends when he transcribed their intimate conversations into his novel "Answered Prayers." Poet Robert Lowell quoted from the letters of his ex-wife, Elizabeth Hardwick, in his collection "The Dolphin." John Cheever drew upon embarrassing family moments for his short stories.
Maksik began working on the book soon after he lost his job in 2006. He wanted to tell a story of moral failure.
"I had times that I felt, 'You can't do this.' Then I would say, 'Worry about that when you finish the novel,'" he says, adding that while the book's plot is based on fact, the characters differ greatly.
"Clearly there are parallels, clearly there are similarities. But I was never such a talented teacher. I was never so charismatic. I never had legions of fans."
Maksik says he and his former student remained in touch while he was working on the novel, and she knew he was writing it. According to Maksik, she ceased communication after "You Deserve Nothing" came out. (The woman's identity has not been made public.)
He was unsure if the novel would ever be published, but through author friends his manuscript was read by literary agent Eric Simonoff, whose clients include Jhumpa Lahiri and Jonathan Lethem.
Simonoff said he initially struggled to find a publisher, with some editors put off by the subject matter and others worried the book would not appeal to women. "You Deserve Nothing" was eventually acquired by Europa Editions. Aware that the story was autobiographical, publisher Kent Carroll brought in an attorney.
"We identified a whole series of things — names of people, names of streets in Paris, descriptions of buildings — that we thought might be close to real people, real places — and we had all of those changed," Carroll said.
The son of educators, Maksik was born in Los Angeles in 1973 and grew up in a home filled with books. When he was a teenager, the family moved to Ketchum, Idaho, the final home of Ernest Hemingway, whose Paris memoir "A Moveable Feast" helped inspire him to live overseas.
Even before Paris, classrooms had been the settings for some troubling experiences. In 2002, Maksik was forced out from an Orthodox Jewish middle school in Los Angeles. Maksik had angered parents and administrators by teaching work that included an Arab perspective, including Naomi Shihab Nye's young adult novel "Habibi."
"I was quite young and arrogant," he says. "I think I was right. But I didn't handle it well."
Carroll said "You Deserve Nothing" sold 20-25,000 copies, a high enough number that Maksik attracted strong interest among publishers for his second novel. His editor now at Knopf, Jordan Pavlin, said she competed "fiercly" for "A Marker," which she remembered reading in "one great gulp."
"And when I finished I literally put my head down on the desk and wept. It was truly one of the most powerful reading experiences I ever had."
Now living in Manhattan and supporting himself through his writing, Maksik considers "A Marker" a far more mature and compassionate work than "You Deserve Nothing" — one that risks not being too close to life, but too far from it. In it, he imagines the life of an African woman, Jacqueline, who has fled civil war.
Maksik is working on a new novel, and says his ideal path would be to make each book better than the one before, leaving "You Deserve Nothing" as simply the opening of a great literary career.
But he may not be done with the story: Maksik hopes to reach an agreement soon for film rights to "You Deserve Nothing."
"I'm not concerned," Maksik said. "My interest is the same as it was when I wrote the novel: that it be of the highest quality and evaluated on its merits."
News Topics: Arts and entertainment, Books and literature, Book publishing, Literary fiction, Fiction, Entertainment, Publishing, Media and entertainment industry, Industries, BusinessPeople, Places and Companies: Truman Capote, Robert Lowell, Elizabeth Hardwick, John Cheever, Jhumpa Lahiri, Jonathan Lethem, Ernest Hemingway, Manhattan, New York City, New York, United States, North America
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. This article is published under the terms of the News Licensing Group, LLC. privacy policy, in addition to the terms of use and privacy policy for this website.
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Height of Dutch state guarantees increase tenfold since 2008 2013-09-30 13:13:13
THE HAGUE, Sept. 30 (Xinhua) -- The height of the Dutch state guarantees has increased a tenfold since 2008, according to a report published by the Dutch Court of Audits on Monday.
By the end of 2012 the Netherlands has soared up to 201 billion euros (271 billion U.S. dollars), the report states. The loan guarantees are destined to Ireland, Greece, Portugal and Spain and are provided by the European financial institutions.
Thanks to these guarantees institutions such as the European Central Bank, the IMF and the European Stability Mechanism were able to lend more money to these countries.
According to the Dutch Court of Audits, it is not clear how risky the issue of these guarantees could be. The Dutch auditors think Finance Minister Jeroen Dijsselbloem should provide more clarity about potential risks.
The Court of Audits also wants the minister to give an opinion on the creditworthiness of the institutions to which the Netherlands issues the guarantees. But according to Dijsselbloem this may negatively affect the creditworthiness of the institutions. Enditem
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Pharmaceutical group lifted by buy note on drug pipeline, cuts and possible acquisitions
Shire is among the risers in a down market, lifted by City hopes for its next range of products and cost saving announcements.
Analysts at JP Morgan Cazenove raised their recommendation on the pharmaceutical group from neutral to overweight and its price target from £22.70 to £30. They said:
Upcoming phase III newsflow could drive significant upgrades. In the first quarter of 2014 Shire will report headline data for three phase III studies, Vyvanse Depression ($1bn potential), Vyvanse Binge Eating ($0.3bn potential) and Lifitegrast for Dry Eye ($0.5bn potential). Together these three products could contribute around $2bn in annual sales, 40% of the current topline. We believe consensus reflects only around $1bn. Cost savings announcement could offer further upside, with an update likely at third quarter 2013 results. Based on our call with the chief executive, the third quarter could see Shire discuss the potential for further selling, general and administrative savings, driven by simplification of the business and highlight the slack within R&D for 2014 and beyond, as the late-stage pipeline completes development, giving fuel for in-licensing.Acquisitions likely to be a third driver of upgrades, funded by net cash position. Shire is already net cash, we forecast a $3bn or so net cash position by the end of 2014, giving significant firepower to expand the late stage pipeline. Shire's increased Vyvanse promotion hasn't yet led to acceleration in prescriptions, however on our chief executive call Shire expressed confidence they could beat our $285m third quarter Vyvanse forecast. Following recent share-price weakness, the lack of a rebound appears appreciated.Shire is currently up 20p at £24.87, while the FTSE 100 is down 45.63 points at 6467.03 on growing US, Italian and Greek political worries.
Among the other risers G4S - currently providing security for the Conservative party conference - has edged up 0.1p to 254p following weekend reports that an activist hedge fund, Cevian Capital, is pushing for the company to sell its cash solutions arm, which accounts for 25% of profits.
But Unilever is down 14p at £24.43 after ING said it could be affected by any negative comments about emerging markets from a Nestle investor presentation. The bank's analyst Marco Gulpers said:
In our view Nestle might update on volumes being impacted in emerging markets as consumers are being impacted by inflationary pressures (like in India where food inflation is up 18.8% since July) but also we could hear more about cost inflation spiralling related to weakening emerging market currencies trends. With Unilever seen as the emerging market play any negatives from Nestle will be seen as a negative read-across to Unilever at current valuation levels.Elsewhere Reckitt Benckiser has edged up 1p to £45.19 despite a sell not from Liberum. It said:
The debate on Reckitt shares is more on how to value Pharmaceuticals (21% of earnings in 2012) than on the core business. Taking reasonable 11 to 12 times EBITDA multiples for the core unit implies an enterprise value for Pharmaceuticals of £6bn to £8bn which could only be justified if Pharmaceuticals' earnings grew 50%-100% in 2014 – we find that unrealistic given current competitive dynamics and recent earnings trends.Liberum was more positive on ITV, down 1.4p at 174.4p:
Press reports out that ITV has sold the old Granada TV studios in Manchester for £26.5m subject to redevelopment planning permission. Probably not included within analyst forecasts for cashflow (it is not in ours; we have 2013 net cash of £194m) so gives ITV more flexibility if it wants to return cash. ShireG4SUnileverReckitt BenckiserITVNick Fletchertheguardian.com © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds |
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