Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts
Saturday, December 19, 2020
Friday, July 29, 2011
Portugal starts labor reforms to get bailout funds
LISBON:Fitch Ratings has postponed its decision on Portuguese credit standing to the fourth quarter from the end of July, giving the new centre-right government more time to implement austerity under an EU/IMF bailout plan.
But it warned in a report on Thursday that the rating remains under pressure and failure to meet fiscal targets or a serious deterioration of economic performance from an expected contraction of 2 percent this year would weigh on its review.
It said there are "significant risks around the GDP forecast".
Fitch had previously said it would come to a decision on whether to downgrade Portugal by the end of this month.
Portugal "remains on Rating Watch Negative. Historically, most Fitch RWN have been resolved with a downgrade, but not always," Fitch analyst Douglas Renwick told Reuters when asked about the likelihood of a rating cut in the fourth quarter.
Earlier this month, ratings agency Moody's slashed Portugal's rating to junk status and said it might need a second bailout, causing its bond yields to blow out and triggering a wave of criticism in Europe for not giving the government time to implement the terms of the 78-billion-euro bailout.
The other two main agencies -- Fitch and S&P -- both rate Portugal at BBB-minus, at the very bottom of investment grade.
Fitch said its review will take into account a lower lending rate and longer maturities of bailout loans announced at last week's Eurogroup summit for Greece, Ireland and Portugal, as well as the first quarterly EU/IMF review of Portugal's performance under the bailout, due in mid-September.
Lisbon is committed to a strict calendar of measures subject to quarterly reviews by outside monitors. Bailout funds could be withheld if targets are not met.
Employers say the cut in compensation will help reduce unemployment, currently at a record 12.4 percent, by allowing companies to recruit workers without committing to potentially large future payouts.
"A company that needs, due to an increase in orders or to move into new markets ... to take on new staff, doesn't currently do it because the (financial) burden it takes on is so high that companies avoid hiring," Antonio Saraiva, president of the Confederation of Portuguese Industry, told AP.
But trade unions say it erodes workers' rights, and several hundred people staged a protest outside Parliament.
At the moment, staff are entitled to the equivalent of 30 days' pay for each year they have worked at a company. The government wants to cut that to 20 days and set a ceiling of 12 years.
The center-right coalition government has enough votes in Parliament to ensure its proposal would be approved.
Meanwhile, Finance Minister Vitor Gaspar said the government intends to slash state spending by 10 percent next year. The cuts will include a "drastic" reduction in the number of public bodies, he said.
Also, the government announced a progressive liberalization of the energy market with the removal of regulated tariffs from July 1 next year. That meets another stipulation of the bailout package.
Ratings agency Moody's earlier this month downgraded Portuguese bonds to junk status. Fitch, another ratings agency, said Thursday it will review Portugal's credit rating in October.
"The likelihood of further structural reforms under the EU-IMF program, combined with an improvement in Portugal's export structure over recent years, enhances the medium-term economic outlook for Portugal," Fitch said.
"Nevertheless, the burden of private sector and foreign indebtedness also weigh on the prospects for sustained economic recovery, essential for restoring confidence in the solvency of the Portuguese state," it said.
Portugal is in a recession that is forecast to continue through 2013.
Nafissatou Diallo, Strauss-Kahn's accuser, was misquoted: lawyer
Maid accusing Dominique Strauss-Kahn of sexually assaulting her in a Midtown Hotel did not call an imprisoned pal about the former IMF boss's wealth, her lawyer said Wednesday after a marathon meeting with prosecutors.
The call, which attorney Kenneth Thompson said they reviewed at during a nearly eight-hour meeting, reportedly involved the woman, Nafissatou Diallo, telling the friend "I know what to do" after hearing that Strauss-Kahn was a very rich man.
The implication made by Strauss-Kahn's lawyers has been that Diallo is trying to cash in on a lawsuit against the former head of the International Monetary Fund and that anything that occurred was consensual.
"For the last several hours we have been upstairs listening to that tape and that tape shows that the victim never said the words, 'He has a lot of money and I know what to do,' " Thompson told reporters after the lengthy meeting.
The quote was misleading in my opinion because the quote made it seem like the sole focus was on his money and how to get his money. Her sole and primary focus is on what happened to her."
Thompson said Diallo was merely confiding in her friend about the attack and that "the very first time she spoke to the gentleman in jail about Dominique Strauss-Kahn she never said one word about his money."
The second time she spoke to the friend after the attack it was the jailed friend, who Diallo denied being romantically involved with, who mentioned that Strauss-Kahn was wealthy, Thompson said. Her response was unclear.
The meeting involved a Fulani interpreter to convey the meaning of the conversation, one of "several" prosecutors have recorded, between the Guinean maid and the inmate, Thompson said.
Prosecutors declined to comment on the meeting.
Her lawyer, Kenneth P. Thompson, insisted that taped conversations between Diallo and the inmate do not suggest that Diallo wanted to exploit the case to make money off Strauss-Kahn, CNN reports.
Law enforcement officials had earlier told Thompson as well as journalists that the tapes include Diallo saying “words to the effect of: ‘Don’t worry, this guy has a lot of money. I know what I’m doing.’ ”
After listening to the tapes with Diallo, Thompson said Wednesday that his client's statements were mischaracterized.
"He said that at no point did she raise the issue of Mr. Strauss-Kahn’s wealth or status in the way that prosecutors had described it. Rather, he said, the man she was speaking with, who initiated the calls to Ms. Diallo, remarked during one conversation that Ms. Diallo could stand to gain money from the case, but she quickly dismissed the idea and said it was a matter for her lawyer," The Times reports.
“It is a fact that what they told me and what they told you was not accurate,” Thompson told reporters. “Ms. Diallo never said, ‘I am going to get this guy’s money’ or anything about scheming to get his money.”
Furthermore, Thompson said the tapes show that Diallo's depiction to police of what happened in the hotel room is consistent with what she told her friend immediately after the incident.
The district attorney's office did not comment on the meeting, Reuters reports.
The lawyer's assertions add a new twist to the case, which took a turn when prosecutors said they had found discrepancies in Diallo's account of her past and the hotel incident, suggesting she may not be credible. Strauss-Kahn's lawyers have called on Manhattan District Attorney Cyrus Vance to drop the case.
Applause for Lagarde's IMF debut
Emerging markets are increasingly losing faith in the International Monetary Fund due to its overtly European focus and questionable handling of the ongoing sovereign debt crisis, Ashmore’s head of research Jerome Booth has said.
Speaking to Citywire Global, Booth said that growing disillusionment among managers of emerging market funds was valid given the IMF’s recent activity.
Most notably, the IMF has agreed to pledge €78.5 billion to Greece, Ireland and Portugal through to 2014 and, earlier this month, it was also involved in thrashing out the €109 billion rescue package for Greece.
Although it has not stated how much it intends to contribute to the second Greek bailout.
Commenting on its involvement, Booth said: ‘The IMF risks its credibility by putting more money into Greece and arguably it should not have participated anyway in the existing bailout programme. The criticism is that it is now throwing good money after bad and I think that is an extremely valid concern.
Political nature of the current U.S. debt crisis may serve as a global economic harbinger.
“Given the current political situation within the U.S. with respect to spending cuts and tax rises, it would not be unreasonable to question future political appetite for future contributions to the IMF,” said Michael Hewson, market analyst with Britain’s CMC markets, in a report.
In Britain, there was consternation among some groups in June when they discovered the government had allowed a £9-billion ($13.9-billion) increase in IMF contributions. This may be a sign of fights to come, Mr. Hewson said.
He added that with these new fiscal realities and possible future contention, it’s necessary to reconsider the future of IMF funding, especially because its services will likely remain necessary in Europe for “quite some time to come.”
It could also lead to “a dilution of U.S. power and influence,” Mr. Hewson said.
Emerging market economies recently stood in opposition to the unwritten rule that European and U.S. governments choose the head of the IMF and World Bank, respectively. The recent appointment of Christine Lagarde as head of the IMF was approved with assurances that she would make the appointment more merit based.
According to Mr. Hewson, these same countries have demonstrated disquiet over the IMF’s special treatment of Europe’s debt crisis in contrast to how it has dealt with bailouts in the past. A political shift of this nature could make future bailout deals that much more onerous and conditional as the balance of power shifts to traditionally overlooked countries with the fiscal means to prop up the fund.
Thursday, July 28, 2011
Humphrey-Hawkins Meets the IMF
International Monetary Fund has issued a warning to France, telling the country that unless more spending cuts are implemented they will miss their plan to have the budget deficit 3% of output by 2013. reports the FT.
A new report from the IMF found that France's growth and tax revenues are unlikely to meet French expectations.
In order to make up the shortfall, the country should cut spending or face a downgrade, the fund recommended.
Just as the Humphrey-Hawkins legislation in the 1970s put a new burden on the U.S. Federal Reserve, that of seeking full employment, so did Madame Lagarde appear to add a mission for the IMF, which was founded after World War II to help manage international capital flows to ward off balance-of-payment crises.
Noting that joblessness and bleak career prospects for the young are a factor in not only unrest-gripped emerging nations but most developed countries as well, Lagarde told the Council on Foreign Relations that this issue is part of a “social instability” challenge to be met at the Fund. (It was one of three “challenges,” she said, the other two being sovereign debt and economic growth. Growth and social instability meet at the workplace. )
In an extension of that thought in her prepared text, not delivered, she also mentioned that “older generations are fighting to protect their health and pension benefits. Combine the two, and we may face a ‘clash of generations,’ to borrow a term coined by the scholar David Rothkopf.”
This area may come naturally to a woman who just spent four years as minister of economic affairs, finances and industry in France, a nation whose government actively tends to such things.
You might say, however, that Lagarde and the IMF will have their work cut out for them in tackling labor and benefits issues. As she herself acknowledged, her managing director post lacks direct international authority except when nations fall “under program” at the Fund, meaning that they require a workout to manage their monetary (and increasingly, economic) emergencies.
Perhaps in the gathering fiscal and financial storm, more sovereigns will yield to such suasion. (Some no doubt would like to see the politically-conflicted U.S. subjected to an IMF workout.) If Lagarde and her protean crew go on to tackle this nut on a global scale, we can hope that they show more skill in balancing financial stability with labor-force management than has the Humphrey-Hawkins Fed.
EU, IMF inspectors in Greece to evaluate debt progress
ATHENS, - Greece may not sell its full stake in gaming monopoly OPAP (OPAr.AT), the key asset on the 2011 privatisation list, but it still plans to meet revenue targets set by the EU and the IMF, the finance minister said.
Debt-choked Greece has agreed with its international lenders to sell its 34 percent stake in Europe's biggest betting company in the fourth quarter of this year, as part of a drive to raise 50 billion euros from privatisations by 2015.
But contrary to what is stipulated in the EU and IMF reports, Venizelos said Greece might not sell the stake because there could be alternative ways to raise money from the company.
"We have not pledged to sell OPAP; we have pledged that we will have revenues from OPAP (to reduce) the public debt," Venizelos told lawmakers. "The cabinet will appraise what is the best way to raise the revenues targeted.
Greek daily newspaper Kathimerini said senior representatives from Greece's foreigner lenders are expected in Athens by mid-August.
Eurozone leaders agreed to easier lending terms and a new 109-billion-euro (157-billion-dollar) bailout for the debt-ridden country earlier this month.
Athens has also promised to make good on its decision to sell off 50 billion euros worth of state assets by 2015, including 5 billion this year.
The new bailout comes in addition to the 110-billion-euro bailout that Athens secured from eurozone partners and the IMF last year.
Eurozone ministers decided that private investors will swap Greek bonds for longer maturities at lower interest rates.
The Greek Finance Ministry said procedures for a voluntary swap, which will begin in August, should be completed the following month.
Tapes prove DSK maid was no ‘gold digger’
Former International Monetary Fund chief Dominique Strauss-Kahn's next court appearance on charges of sexual assault and attempted rape was delayed for three weeks by New York prosecutors.
Strauss-Kahn, 62, was scheduled to appear in state court in Manhattan Aug. 1 on charges of assaulting a hotel maid. Strauss- Kahn, who is free as he awaits trial, has denied wrongdoing.
The court appearance was rescheduled for Aug. 23, said Erin Duggan, a spokeswoman for Manhattan District Attorney Cyrus Vance Jr.
"The investigation into this pending criminal case is continuing," Duggan said today in an e-mailed statement. "We will have no further comment."
Strauss-Kahn's lawyers, William Taylor and Benjamin Brafman, said in an e-mailed statement that they consented to Vance's request for a postponement.
"We hope that by Aug. 23 he will have reached the decision to dismiss," the defense attorneys said in their statement.
Kenneth P. Thompson, a former federal prosecutor who is representing the accuser, said today in a phone interview that she would "soon" file a civil lawsuit.
Tapes also established that Diallo recounted the attack to the man during their first conversation, showing that her focus was on what had happened to her, not on the former IMF chief’s wealth or stature, News.com.au quoted Thompson, as saying.
“Information has been put out there about Diallo that now I know was false. She never was scheming to take DSK''s money, and that's a fact,” Thompson said.
Diallo spent eight hours with prosecutors from the district attorney's office listening to and translating a phone recording, which had raised doubts about her credibility.
The newspaper has reported, citing an anonymous law enforcement official, that Diallo said, ‘Don't worry, this guy has a lot of money. I know what I'm doing,’ to her friend shortly after Strauss-Kahn's arrest.
But on the tapes, her mentions of Strauss-Kahn's resources and her knowing what to do are made at different points, and in contexts that cast them in a considerably different light, Thompson said.
The session marked the 32-year-old's first meeting with prosecutors since they said they had doubts about her credibility because she hadn't been truthful about her background or what she did right after the May 14 encounter.
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