Eurozone officials are due to make the decision on the first 3 billion euro tranche of the 10 billion euro bailout loan to Cyprus from the troika of international creditors – the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission (EC). The financial aid comes with around 2.5 percent interest and is to be paid back over a 12-year period after a grace period of a decade.The restructuring of banks and the gradual lifting of restrictions on capital movement were among the priorities for the island’s aid programme, as a senior eurozone official told the Cyprus Mail.Depositors in the island’s biggest banks – Bank of Cyprus and Laiki Bank will practically pay for the bailout. To collect the money, Nicosia decided to tax of up to 60 percent on deposits of over 100,000 euro in the two big banks.Russia, one of the closest business partners with Cyprus, also agreed to assist the troubled island. Moscow agreed to cut the interest rate to 2.5 percent from 4.5 percent on a loan it fixed in 2011. Maturity dates remain under discussion, even though Cyprus’s Foreign Minister Ioannis Kasoulides said Russia had agreed to extend the terms of the loan. “Requests for an extension were received, and we promised that the request would be dealt with. If anyone wants to draw the conclusion from that promise that a deal has already been signed, let them do so,” Russian Deputy Finance Minister Sergei Storchak told journalists on the sidelines of the annual congress of the European Bank for Reconstruction and Development. Under the initial terms the money should be paid back within four and a half years.Greece will also be on the agenda of Monday’s meeting, as the Eurogroup ministers will decide on the next two installments to Greece totalling 7.4 billion euro.A week ago the International Monetary Fund said Greece is “making progress” in overcoming “deep-seated problems”, adding that country still needed to find ways to tackle its financial problems with structural reform rather than draconian cuts. “Progress on fiscal adjustment has been exceptional by any international comparison,” the IMF said in its regular report. But this primarily came as a result of slashing jobs and salaries, which caused “unequal distribution of the burden of adjustment,” the IMF said.Who’s next… Slovenia?The Brussels meeting will take place amid continued concerns for Slovenia which is seeking ways to avoid the need for a bailout package.At the end of April Moody’s Investors Service cut the country’s credit rating to junk status, saying the banking system was struggling and the national balance sheet was deteriorating. In this situation privatizing Slovenia’s largely state-owned banking sector and creating a “bad bank” to take over non-performing loans were the priority goals, according to Prime Minister Alenka Bratusek, talking to The Economic Times.Last week Slovenia’s government tailored an austerity plan to raise 540 million euro in new taxes to balance the budget without international help. Under the game plan, the government is due to partially privatize 15 state-run companies, such as Slovenia’s second-largest bank Nova Kreditna Banka Maribor and Ljubljana airport.Though having jumped to 64 percent of the country’s GDP, Slovenia’s debt remains at the lower end of that scale in the euro area, Bratusek said.German Finance Minister Wolfgang Schaeuble also believes Slovenia can get by without an international bailout, provided it introduces reforms.”Slovenia can manage (without a bailout program). However it must also carry out some painful restructuring (of its economy),” Schaeuble told SWR 2 radio. … Read More
Market Buzz: Chinese macro data to drive floors
The Asian economic powerhouse is expected to release data on retail sales, industrial manufacturing and April’s urban investment figures. “Forecast readings are shadowing forth a slight growth for all of the free indicators,” Investcafe analyst Darya Pichugina said, adding that some analysts are not quite so optimistic.“There’s no visible improvement in the macro situation,” analyst Liu Guangming of Beijing’s Dongxing Securities Co. said, according to Bloomberg.China’s overall economic performance has been largely disappointing: Despite recent trade figures showing an improved economic climate, fears persist of a downturn in the world’s second-largest economy.In April, Chinese exports rose 14.7 percent year-on-year and imports increased 16.8 percent, both outperforming analyst expectations, the People’s Republic Customs Administration reported last Wednesday. However, Citigroup economist Ding Shuang warned that the improved figures may be reflecting “over-invoicing [by exporters].”China also faces a brutal GDP forecast in 2013. In March, China’s projected GDP growth was cut from 7.9 percent to 7.7 percent, due to weak global export demand. April manufacturing data was also disappointing, with an HSBC report on the service sector showing its weakest expansion since August 2011.Across Asia, Japanese shares are trading higher on Monday, with the Nikkei 225 gaining 1.24 percent; floors in Hong Kong and Shanghai are currently closed.Russian stocks closed Friday’s session in the red, with the RTS falling 1.54 percent to 1,429.78 and the MICEX declining 0.47 percent to 1,426.25. A sharp cut in economic forecast for Russia issued by the European Bank for Reconstruction and Development (EBRD) on Friday could be one of the main reasons the selloff on Russian floors, Investcafe analyst Anna Bodrova explained. The EBRD revised its forecast for the Russian economy, predicting GDP growth of 1.8 percent in 2013 – a sharp downgrade from the previous forecast of 3.5 percent.European markets finished higher on Friday, with French stocks leading the region. The CAC 40 was up 0.64 percent, London’s FTSE 100 added 0.49 percent and Germany’s DAX gained 0.19 percent to close at a record high of 8,278.59 points.North and South American markets have traded mixed recently: The S&P 500 and the Dow Jones remained above key psychological levels last week – 15,000 and 1,600, respectively. The Nasdaq rose 1.7 percent for the week, and the Latin American Bovespa lost 0.61 percent. … Read More
Afghan marathon: US troops passing the baton to mercenaries ahead of 2014 withdrawal
According to the latest census on contractors accompanying US forces performed by the Professional Overseas Contractors industry group, the US employs 110,404 people in Afghanistan, 33,444 of which are Americans. Their job classifications include everything from base support to construction and from logistics to security.“There are already far more contractors or mercenaries in Afghanistan than there are [US] troops,” Middle East expert, Phyllis Bennis told RT. Once US troops withdraw, it will be up to this private military to train the Afghan police and army. They will also take charge of the development and reconstruction effort. All of this is stipulated in the Afghan-American strategic partnership agreement which allows a small number of US forces to remain in the country until 2024. Under this strategic partnership agreement the remaining troops – the number of which has not yet been made public – will remain “until the future government in Afghanistan says that they can’t,” Bennis says. But since only a small number of US military personnel will stay, these “would likely be mainly special forces” whose only job “will be largely to kill Afghans, not to do anything else,” Bennis believes. “We don’t know either the final number, if that’s been agreed to yet it’s being held privately, and we also don’t know the critical question of whether the Afghan government will allow those US troops to serve with immunity. That was the reason they were all pulled out of Iraq,” she added. The military troops however may have to leave all together if the Afghan government refuses to grant them immunity, leaving US soldiers prone to prosecution.“The Obama administration was not prepared to have US troops who might be accused of war crimes and might indeed be guilty of war crimes be sent to trial in Iraqi courts,” Bennis explained. “They may face the same decision in Afghanistan.” In any case, experts agree, the US paid contractors will stay in Afghanistan for many years to come.According to casualty figures, contractors are also the primary targets of armed attacks by insurgents in the county. In 2011, at least 430 workers employed by American contractors lost their lives as the US began relying less on military enforcements and more on performance by way of private companies. By comparison, the US military reports that 418 of their own soldiers died that year.With an estimated cost of some $627 billion in Afghanistan since 2001, that is some $50 billion a month, the US aims to reduce its military spending. However it will still pay for contractors to remain as long as the troop contingent stays for a decade.The government spent $516 billion on contracts in 2012 all over the world, according to Bloomberg government study. “Between 2001 and 2011, dollars obligated to contract awards by DOD more than doubled, and contract spending outpaced growth in other DOD outlays,” according to an analysis by the Center for Strategic and International Studies which discovered DOD spent $375 billion on contracts in 2011.For instance the USAID spent just $1.6 billion on contracts in 2000 – but in 2011 that number rose to $9 billion. The State Department $700 million in 2000 but was awarded $4 billion in 2011.US government agencies do not disclose the funds they spend on contracts related to the war effort.At the height of the US war in Iraq more than 150,000 contractors were employed there. Around 8,500 remain today, including 2,356 Americans.“In Iraq, at its peak, we had at least as many, sometimes many more contractors as we did troops in battle areas,” Stephen Schooner, a professor of government contract law at George Washington University was quoted by the Fiscal Times. … Read More
Billions of US tax dollars potentially funding Afghan terrorism – report
The “alarming” findings were greeted with calls for urgent action to mend the weak links in US regulations.The report, titled ‘Contracting with the Enemy’ and published by the Special Inspector General for Afghanistan Reconstruction (SIGAR), draws attention to the mismanagement of the Department of Defense’s (DOD) funds.According to the document, such oversights mean that “millions of contracting dollars could be diverted to forces seeking to harm US Military and civilian personnel and derail the multi-billion dollar reconstruction effort.”Last year, the US invested around $1.7 million and awarded 9,733 contracts in Afghanistan; it is unclear how much of this may have been diverted to the insurgency.Criticism in the report focuses on Section 841 of the National Defense Authorization Act 2012 and its ambiguous wording. The legislation allows the DOD to discontinue a contract with a company found to have links to Afghan insurgent groups.However, blunders in the section’s wording make it likely that US money is slipping through the net and contributing to terrorism.Firstly and most importantly, Section 841 only applies to contracts over $100,000 which excludes approximately 80 percent of Afghan contractors. Secondly, the report found that many of the contractors are not made aware of their legal obligation to avoid companies with insurgent links.Furthermore, information on companies that have been blacklisted under Section 841 is not properly disseminated by the DOD: “CENTCOM [Central Command] began posting Section 841 designations on its public website in January 2013; however, contracting officers and prime contractors are not required to regularly review the information,” the report explained.Finally, Section 841 will expire when US forces pull out in 2014, increasing the danger of funds being funneled to extremist groups.“SIGAR currently has 73 open recommendations. If all of them were accepted, the U.S. government could potentially save about $450 million,” said John Spoko, Special Inspector General for Afghanistan Reconstruction to press. He went on to say that the US government had failed to implement an anti-corruption plan that had been previously put forward.“More than two years ago, SIGAR recommended that the United States develop an integrated anti-corruption strategy. Although the U.S. Embassy in Kabul produced a draft strategy, it was not adopted,” he said. … Read More
Fire partially destroys Europe’s oldest theatre university in central Moscow
“The fire was extinguished, but the firefighters are still watering the down building as well as going through the burned structures,” Aleksandr Gavrilov from the Emergency Ministry has told Itar-Tass.The fire caused no injuries or casualties but completely devastated the third floor of the building. At one point the building’s roof was at risk of collapsing.One former student of the university told RT he was “hoping that the library is ok.” Another GITIS graduate told RT that she feels like her”home is gone.”The firefighting crews spent almost the whole night extinguishing the blaze. It was localized after spreading across more than 500 square meters.Police officers working at the scene said that the entire third floor of the building has burnt. Reports suggest that the costume room might have burnt too.The building was saved from much greater damage by the fact that the fire department is right next door and got to the scene in four minutes.The Ministry of Culture has announced that it will aid the reconstruction effort and the students of the university.The Russian University of Theatre Arts was originally founded in 1878 as the Shestakovsky Music School and in 1934 it became the State Institute for Theatre Arts (GITIS), the largest and oldest independent theatrical arts school in Russia.The institution has 8 faculties and operates on the principle of “student-teacher-student”. Upon graduation, the student receives a diploma of higher education from the Russian University of Theatre Arts (GITIS) with a Magister’s qualification. … Read More
Can we build a sustainable Japan?
Whatever happened to Japan’s sustainable reconstruction?I asked myself that question as I stood on a beach in Sendai in northeastern Japan’s Miyagi Prefecture two weeks ago.I had arrived in Miyagi via Fukushima, the prefecture just to the south. In Fukushima I talked to people living through the most intensely-scrutinized environmental disaster in Japan’s history: the triple meltdown at the Fukushima Daiichi nuclear power plant that followed the tsunami and earthquake of March 11, 2011. Over 150,000 people are still living as evacuees, often in tiny temporary houses and subsidized apartments, as efforts at decontamination moves slowly forward. Many told me they didn’t ever want to return home, no matter how safe the government promised they would be.I was hoping to find a more positive story in Miyagi.Continue Reading… … Read More
US misspent billions on fruitless Iraq ‘reconstruction’
One decade after the US invaded Iraq, the reconstruction efforthas been largely deemed a failure. In his final report to Congress,a 171-page assessment titled “Learning from Iraq”, SpecialInspector General for Iraq Reconstruction Stuart Bowen concludedthat the costs of the war far surpassed the results.“You think if you throw money at a problem, you can fix it.It was just not strategic thinking,” Kurdish governmentofficial Qubad Talabani, son of Iraqi president Jalal Talabani,told auditors of the report.“You can fly in a helicopter around Baghdad or other cities,but you cannot point a finger at a single project that was builtand completed by the United States,” Iraq’s acting interiorminister told Bowen, who said that dumping so much money into awarzone simply created a “triangle of political patronage” thatinstigated further corruption.Bowen interviewed numerous American and Iraqi officials, many ofwhom criticized the US for taking on too many large projectswithout consulting Iraqis. When American troops withdrew, many ofthese projects were largely abandoned and Iraq continues to look asbroken as before.Additionally, Americans “wore out [their] welcome” byplanning to “do it all and do it our way” – all whilewasting taxpayer dollars, Deputy Secretary of State William J.Burns told the inspector general.The US has spent more than $60 billion in reconstruction grants,which comes out to about $15 million for each day of the conflict.A $2.4 billion fund set up by Congress to rebuild Iraq’s water andelectricity systems and to provide food, healthcare and governancewas largely wasted. President George W. Bush asked for $20 billionmore just a few months after the March 2003 invasion to accomplishthese goals.Abandoned projects include a 3,6000-bed prison that cost $40million but was never finished or used and a $108 millionwastewater treatment center that still remains unfinished. The USalso spent millions repairing infrastructure they blew up,including a $75 million pipeline and a $29 million bridge innorth-central Iraq. Contractors were also found to have overchargedthe US government for supplies, with one contractor charging thePentagon $900 for a $7 control switch.“Waste and fraud at the levels we saw are a symptom of afailure to have a structure in place to effectively plan forstabilization and reconstruction operations, execute suchoperations and be held accountable for them,” Bowen said in aninterview with Business Week.The failures in Iraq have raised concern over the future ofAfghanistan after the 2014 withdrawal of US troops. The USgovernment has spent $90 billion on reconstruction projects inAfghanistan over the course of 12 years, which US officials areafraid could go to waste if oversight isn’t coordinated better.Ten years after the American invasion of Iraq, the countryremains impoverished and plagued by near-daily deadly bombings. Fewpeople have access to electricity and clean water, and someprojects that the US spent millions on have been reduced to nothingbut rubble.“If we had better controls and better planning, betteroversight, better quality assurance, better quality control all inplace, we would have wasted less – for sure. There is no doubtabout that,” Iraqi Prime Minister Nouri al-Maliki toldBowen. … Read More
