The European Union Times |
- Greece becomes first developed nation to default on international obligations
- Kiev Should Fix Its ‘Chronically Broken Economy’ Instead of Any Debt Talks
- Americans Have No Idea Why They Are Celebrating the 4th of July
- Threat of US-Russia War Growing – Pentagon
- Robot kills a man at Volkswagen plant
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Posted: 02 Jul 2015 03:49 AM PDT
 The International Monetary Fund has confirmed that it didn’t receive the €1.6 billion payment from Athens that was due by the end of June 30, Brussels time, making Greece the first developed country to default on its international obligations. IMF spokesman Gerry Rice said in a statement that Greece had asked for a repayment extension earlier Tuesday and that the fund’s board will consider it “in due course.” The news hardly comes as a surprise. On Tuesday, Greek Finance Minister Yanis Varoufakis told journalists that Athens would not make the IMF debt payment on time. Skipping a payment to the IMF is referred to as arrears in the fund’s terminology. It should be officially confirmed by IMF chief Christine Lagarde, who in a month should notify the fund’s executive board. In fact, this could be classified as a default, like any other failure to pay debts on time. This could trigger a cross-default on Greece’s multibillion-dollar commitments to the European Financial Stability Fund (EFSF). The IMF cannot issue new loans to a country that is in arrears. The question now is what’s next for the country’s financial system, the people and its membership of the Eurozone. On Tuesday, Greece asked the European Stability Mechanism (ESM), which includes all of the 19 Eurozone members, for a new bailout to cover the country’s financial needs for the next two years. The request included a restructuring plan for Greece’s debt to the European Financial Stability Facility (EFSF), which accounts for about 63 percent of the country’s total debt. The Eurogroup refused to extend the bailout program to Greece, and rejected Greek Prime Minister Alexis Tsipras’ latest request for a new bailout, Finnish Finance Minister Alexander Stubb said Tuesday. However, the Eurogroup, consisting of Eurozone finance ministers, is to discuss new proposals from the Greek government Wednesday. German Chancellor Angela Merkel said Tuesday that her country will not consider a third bailout for Greece before the July 5 referendum in Greece takes place, various media outlets have reported. On June 5, Greece invoked a 1970s IMF rule that allowed it to bundle all of its €1.6 billion payments due June into one, thus avoiding immediate default. However, it failed to pay even under these conditions. Greece is also due to pay €6.6 billion to the ECB in July and August. The ECB has already turned down Greece’s request to expand the €89 billion emergency liquidity assistance (ELA) to Greece by an additional €6 billion to tackle deposit flight. This resulted in the closure of most Greek banks for a week and putting a limit on ATM withdrawals to €60 a day. The country also has to make payments to private creditors, including €2 billion in Greek Treasury bills that are due on July 10. If they fail to do that, the ratings agency Standard & Poor’s said it would designate Greece as being in default. Greece’s radical left Syriza government, led by Prime Minister Alexis Tsipras, came to power aiming to end austerity measures, and has repeatedly said its goal is to stay within the euro. On Saturday, the government announced a national referendum on the creditors’ offer to the country. Even if the referendum is not on Greece leaving the Eurozone, many leading European politicians have said that a “No” answer would be equivalent to a refusal to stay within the European Union. Voting “No” would mean a suicide for Greece, European Commission President Jean-Claude Juncker said Monday. However, German Finance Minister Wolfgang Schaeuble said Tuesday that Greece could maintain its membership in the Eurozone even if the nation votes against austerity reforms this Sunday. Source           |
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Posted: 02 Jul 2015 03:18 AM PDT
 The International Monetary Fund (IMF) has recently called on Ukraine and its creditors to continue negotiations on the country’s debt, but the editor-in-chief of the business and finance media company thinks that Kiev should instead concentrate on “fixing what is absolutely, chronically broken economy” and launch immediate reforms. The International Monetary Fund (IMF) has called on Ukraine and its creditors to continue negotiations on the country’s debt, according to a statement the Fund issued on Wednesday. In mid-June, Ukraine asked its creditors to write down 40 percent of the sovereign bonds they held so that the country could meet the IMF’s bailout terms. However, the bondholder committee ruled out any haircuts. Ukrainian Finance Minister Natalie Jaresko also said that the creditors had refused to aid Ukraine in its recovery and warned that Kiev would stop debt payments unless the talks saw progress. Ben Aris, editor-in-chief of the media company Business New Europe, however, explained to Radio Sputnik that negotiating with the bondholders in not a top priority for the Ukrainian government. “When the government should be concentrated on fixing what is absolutely, chronically broken economy, it is in meltdown, they are spending their time dealing with bondholders which don’t have to make a deal,” he said. “They should be concentrating on reforms, fixing things,” he added. “I edrm don’t see why the IMF didn’t come up with the extra $5 billion in the first place in order to free the government in order that they could deal with this first rather than having these impossible talks with the bondholders.” He then explained his point of view. “You can see Ukraine’s arguments: what they are trying to avoid is that sort of extended pretend solution that is being used in places like Greece where the debt keeps mounting. It is just you put off the payment on the hope that sometime in the future. the economy will be flourishing and that you can pay the debt out of the income which is much larger.” “You basically indebt future generations, in that case. So, they’ve [Ukrainian government] taken quite a pragmatic line: let it just happen now and deal with it now and not indebt future generations.” However the bondholders, he explained, are taking a very reasonable line: we have invested in sovereign debt which is guaranteed by the country and why should we pay for the disaster that is the Ukrainian economy. You lend this money in good faith, we want our money. However we are prepared to wait rather than take it lost, we are prepared to pay the money we invest and get back the interest rate later. And the precedent was set by Russia itself, said Aris, when in 1998 it technically defaulted on its bonds by putting a moratorium on payment for five years. And in the end everybody got their money back and they got profits, they got interest payments on that, they just had to wait a bit longer. “So, it comes down to this principle decision: are the bondholders responsible for the mess, should they participate in the losses because of the economic problems; as at the end of the day, they invest with all these risks involved. Or, should the government be open to what they [the bondholders] want to see – just the delay and pay the money, but pay it several years later.” Aris however explained why it might not work in Ukraine as it worked in Russia years ago: “The Ukraine economy is [totally broken]: the GDP is a fraction of what it is in Russia and it is, in fact, the last great investment story in Eastern Europe. Because of all of the catch-up growth that places like Russia and even Belarus have enjoyed in the last 20 years, Ukraine has done nothing in the way of reforms and so the economy is tiny; incomes in Ukraine are a quarter or a third of what they are in Russia.” “I think that Ukraine is going to dissolve,” he therefore warned. “The bondholders are holding out, they refuse to have a haircut, there is no reason why they should have a haircut, they don’t have to. And the terms of the bonds are such that they can refuse this pill that is being offered to them.” “And it is important because if Ukraine defaults on official debt, then the IMF under its own rules may not lend to Ukraine anymore. And it would scuttle the whole bailout program. But if they impose their haircut program on bondholders than why would any bondholder buy Ukrainian bonds ever again?” he asked, rhetorically. Source      |
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Posted: 02 Jul 2015 03:05 AM PDT
With Americans set to celebrate Independence Day this weekend, Mark Dice illustrated that many beachgoers in San Diego don’t even know when the Declaration of Independence was signed or what the 4th of July even represents. When asked, “What country famously broke away from England to start their own country in the late 1700’s,” one man responded, “I have no idea man, I don’t know.” Asked what Americans were celebrating on the 4th of July, another woman said that Independence Day was to recognize “the day that we overtook the south….it’s our independence….from the south,” a reference to the civil war which took place almost a hundred years later. Another woman was also almost a century out of date with her knowledge, guessing that Abraham Lincoln signed the Declaration of Independence. She then topped her ignorance again by claiming that this occurred in 1964. When a man is asked, “What country did we declare our independence from, his wife responds, “California,” before the man says, “I don’t know,” but still assures Dice that he will be celebrating the occasion anyway. Yet another woman was unable to name one of the founding fathers of America, while a man walked away as soon as he heard the question. It was left to a man on vacation from Italy to finally answer correctly that America celebrated its independence from Britain in 1776. The video correlates with numerous polls that illustrate the staggering level of ignorance many Americans have when it comes to the founding of their own country. A 2011 Maris poll found that, “Only 58 percent of residents know that the United States declared its independence in 1776.” Around a quarter of U.S. citizens have no idea who America declared its independence from. The numbers are even more depressing when it comes to America’s youth. 14 per cent of teens think that the U.S. declared independence from France, while another 5 per cent thought it was Canada. Going on the anecdotal evidence of this video, if anything those figures aren’t likely to have improved over the last four years. Source      |
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Posted: 02 Jul 2015 02:45 AM PDT
 An American military report has warned of a growing probability of the United States fighting a war with a major power, Russia or China, with “immense” consequences. The report released on Wednesday by General Martin Dempsey, the chairman of the Joint Chiefs of Staff, singles out Russia and China as aggressive countries and a threat to US security interests. “Russia’s military actions are undermining regional security directly and through proxy forces,” it says. The study points to the alleged presence of Russian troops in Ukraine as a source of tension between Washington and Moscow. Relations between the United States and Russia are at their lowest point since the end of the Cold War in 1991, largely due to the crisis in Ukraine. The ties deteriorated after US-backed forces ousted the Ukraine’s elected president Viktor Yanukovych in February 2014. The US and its allies accuse Moscow of sending troops into eastern Ukraine in support of the pro-Russian forces. Moscow has long denied involvement in Ukraine’s crisis. Moscow says Washington is responsible for the escalating tension in Ukraine through sending arms in support of the Ukrainian army. Meanwhile, ties between China and the US have also strained after Washington recently accused Beijing of cyber spying. Washington also says it wants Beijing to reduce tensions in the South China Sea, where the country is locked in territorial disputes with its neighbors. Beijing insists Washington must stay out of the row. “China’s actions are adding tension to the Asia-Pacific region,” the Pentagon document states. The US military report also warns of growing technological challenges and increasing global instability. “When applied to military systems, this diffusion of technology is challenging competitive advantages long held by the United States such as early warning and precision strike,” the paper said. In an interview with Press TV last week, an American political and economic scholar said the growing conflict between the United States and Russia over the Ukraine conflict is a result of Washington struggling to maintain its hegemony and making “extremely provocative moves” in Eastern Europe. “The conflict that Washington has created with Russia is entirely Washington’s doing,” said Dr. Paul Craig Roberts, an economist who served as an assistant secretary of the treasury for economic policy in the Ronald Reagan administration. “It’s a serious situation in which the United States is driving Europe into a conflict with Russia, and it’s all about the United States protecting its hegemony, protecting its unique power status,” Dr. Roberts said on Friday. “And in order to protect its status, it has to bring tremendous pressure on Russia and also on China in order to try to make those countries accept Washington’s leadership and to comply with Washington’s foreign policies,” he added. “So this is a dangerous situation but the fault is entirely in Washington,” Dr. Roberts concluded. Source      |
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Posted: 02 Jul 2015 02:34 AM PDT
 A machine on an assembly line grabbed a worker and thrust him against a metal slab, causing lethal injuries. The tragedy occurred at a plant belonging to German automaker Volkswagen (VW) in Baunatal, on Monday. A 21 year old man, who is not an employee of the plant, was assembling the robot for a new motor production line, according to the Local.de. His Meissen-based company had built the machine for the automaker. He was the only person in the proximity of the machine. Other workers were standing in the outer area. The robot grabbed the man and threw him against a metal slab. He suffered a severe blow to the chest area and died in hospital. VW spokesman Heiko Hillwig said that human error is to blame for the incident, according to the Associated Press. He said that the machine is programed to grab auto parts and manipulate them. It operates in a restricted area of the plant. The factory at Baunatal, 100 kilometers north of Frankfurt, is the second largest for the Volkswagen brand. It doesn’t make vehicles, but assembles components for other plants. Source     |
