Germany defends austerity measures ahead of G20

June 25, 2010 By Leave a Comment

(Reuters) – Finance Minister Wolfgang Schaeuble rejected criticism that Germany was endangering economic recovery with austerity measures, saying the government had a “well-conceived” exit strategy from its stimulus spending.

In a guest column for the Handelsblatt newspaper on Thursday, Schaeuble said he could not understand criticism from abroad that Germany was “wrecking the recovery with austerity measures” because Berlin was doing a lot to stimulate growth.

“There is an implicit accusation that we’re not living up to our international responsibilities as far as economic policies are concerned,” Schaeuble wrote in a contribution for the business daily ahead of the G20 summit this weekend in Toronto.

“I cannot understand this argument because Germany has taken sweeping measures since 2008 to stabilize the economy. We’ve done that on top of all the automatic stabilizers we have (such as higher social welfare spending) that play a much smaller role in countries from which we’re now being criticized.”

Germany recently announced plans for 80 billion euros in budget cuts over the next four years, a package it hopes will bring the structural deficit of Europe’s biggest economy within European Union limits by 2013.

U.S. Treasury Secretary Timothy Geithner and top White House economic adviser Lawrence Summers wrote in a Wall Street Journal piece on Tuesday that G20 peers should not risk undermining growth for the sake of cutting deficits, echoing a similar call from President Barack Obama.

‘WELL-CONCEIVED EXIT STRATEGY’

Schaeuble pointed to Germany’s budget deficit climbing to five percent of gross domestic product (GDP) as evidence of its commitment to growth-boosting measures.

“It’s true that an abrupt and ill-conceived exit from the stabilization measures could endanger their success,” he said. “But a credit-financed stimulation of demand cannot become a permanent, drug-like fix.

“We need a well-conceived exit strategy. The German government has one. The first consolidation measures won’t take effect until 2011 and amount to less than 0.5 percent of GDP. There’s no way that can be called hitting the brakes.”

Germany, Europe’s largest economy, has vigorously defended its plans to pursue the 80 billion euro savings measures euros in the next four years after Obama preached patience in clamping down on public spending.

On Thursday, Chancellor Angela Merkel dismissed criticism in a separate interview with ARD TV that Germany was not doing enough to stimulate its economy.

Merkel said she had told Obama in a phone call that Germany had done much to support economic growth with stimulus measures.

“Germany is doing much more in 2010 for the worldwide economic recovery than (other countries) on average,” she said.

(Writing by Erik Kirschbaum; editing by Mike Peacock)

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Germany defends austerity measures ahead of G20

June 25, 2010 By Leave a Comment

BERLIN, June 24 (Reuters) – Finance Minister Wolfgang Schaeuble rejected criticism that Germany was endangering economic recovery with austerity measures, saying the government had a “well-conceived” exit strategy from its stimulus spending.

In a guest column for the Handelsblatt newspaper on Thursday, Schaeuble said he could not understand criticism from abroad that Germany was “wrecking the recovery with austerity measures” because Berlin was doing a lot to stimulate growth.

“There is an implicit accusation that we’re not living up to our international responsibilities as far as economic policies are concerned,” Schaeuble wrote in a contribution for the business daily ahead of the G20 summit this weekend in Toronto.

“I cannot understand this argument because Germany has taken sweeping measures since 2008 to stabilise the economy. We’ve done that on top of all the automatic stabilisers we have (such as higher social welfare spending) that play a much smaller role in countries from which we’re now being criticised.”

Germany recently announced plans for 80 billion euros in budget cuts over the next four years, a package it hopes will bring the structural deficit of Europe’s biggest economy within European Union limits by 2013.

U.S. Treasury Secretary Timothy Geithner and top White House economic adviser Lawrence Summers wrote in a Wall Street Journal piece on Tuesday that G20 peers should not risk undermining growth for the sake of cutting deficits, echoing a similar call from President Barack Obama. [ID:nN22169279]

‘WELL-CONCEIVED EXIT STRATEGY’

Schaeuble pointed to Germany’s budget deficit climbing to five percent of gross domestic product (GDP) as evidence of its commitment to growth-boosting measures.

“It’s true that an abrupt and ill-conceived exit from the stabilisation measures could endanger their success,” he said. “But a credit-financed stimulation of demand cannot become a permanent, drug-like fix.

“We need a well-conceived exit strategy. The German government has one. The first consolidation measures won’t take effect until 2011 and amount to less than 0.5 percent of GDP. There’s no way that can be called hitting the brakes.”

Germany, Europe’s largest economy, has vigorously defended its plans to pursue the 80 billion euro savings measures euros in the next four years after Obama preached patience in clamping down on public spending.

On Thursday, Chancellor Angela Merkel dismissed criticism in a separate interview with ARD TV that Germany was not doing enough to stimulate its economy. [ID:nLDE65N04E]

Merkel said she had told Obama in a phone call that Germany had done much to support economic growth with stimulus measures.

“Germany is doing much more in 2010 for the worldwide economic recovery than (other countries) on average,” she said. (Writing by Erik Kirschbaum; editing by Mike Peacock)

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MONEY MARKETS-Euro Libor dips after ECB extends liquidity

June 12, 2010 By Leave a Comment

LONDON, June 11 (Reuters) – Euro Libor rates edged down on
Friday on expectations the extended provision of unlimited
European Central Bank longer-term liquidity will keep interest
rates anchored for many more months.

The ECB extended on Thursday its three-month full allotment
liquidity providing operations until September. It reinstated
such operations in May as interbank markets showed signs of
renewed stress, a partial reversal of the central bank’s
fledgling exit strategy.

The ECB had already said it would provide unlimited one-week
and one-month operations until October, but analysts expect
these also to be extended until at least the end of the year.

“This would virtually guarantee that the overnight liquidity
overhang will keep Eonia rates depressed into 2011,” said Lena
Komileva, head of G-7 economics at Tullett Prebon.

The Eonia EONIA= overnight rate fixed at 0.334 percent,
close to where it has been since the third quarter of 2009.

The Euribor interest-rate futures strip <0#FEI> flattened as
the market strengthened its view that euro zone interest rates
would remain at their record low 1 percent.

Commerzbank said expectations for a first ECB rate hike
remain centred on mid-2012, while Eonia is only seen topping 1
percent after the end of 2011 as enough excess liquidity is
expected to remain in the system.

That is despite 442 billion euros of one-year funds maturing
at the beginning of July.

“Despite the 442 billion expiry and the resulting drop in
deposit facility usage, excess liquidity is likely to remain
large enough to keep Eonia rates close to where they are in
coming months,” said Commerzbank rate strategist Christoph
Rieger.

But that may not be the case for Euribor interbank lending
rates, he added.

“With more banks looking to fund collateral from the 442
billion 12-month expiry in the market, the upside bias in
Euribor rates and spreads looks set to continue.”

Benchmark three-month Euribor rates EURIBOR3MD= inched up
to 0.719 percent, but the equivalent Libor rates < EUR3MFSR=>
were a fifth of a basis point lower at 0.65188 percent.

Morgan Stanley rate strategist Laurence Mutkin said Eonia
would probably only rise if excess liquidity in the euro zone
financial system fell below around 40 billion euros.

It stands at more than 300 billion euros with record amounts
above 365 billion euros being deposited at the ECB overnight.

“What nobody knows is how much of that is there in
preparation for the one-year funds rolling off or how much is
there because that’s where banks feel most comfortable putting
their money,” Mutkin said.

Three-month U.S. dollar Libor rates < USD3MFSR=> were a
touch higher at 0.5376 percent.

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Clinton admits to shortfall of trainers for Afghan troops as exit strategy is agreed

April 24, 2010 By Leave a Comment

Tallinn (Estonia), Apr.24 (ANI): U.S. Secretary of State Hilary Clinton has admitted that Washington is aware of there being a ””shortfall of trainers”” for local troops in Afghanistan, but believes that with sufficient mentoring the latter can support themselves against the Taliban.

Her comment surfaced as NATO agreed on a road map for the future of Afghanistan.

According to The Independent, the NATO summit ended here last night without details of the framework for a handover of security to President Hamid Karzai””s forces being made public.

The Independent has learned, however, that an area will be deemed ready for transfer if serious violence has been in abeyance for a period of time, if there is access to power by different ethnic and tribal elements and if the conditions are present for development projects taking place in relative safety.

According to senior diplomatic sources, clusters of provinces, rather than individual ones, will be transferred to “provide critical mass” able to withstand the Taliban.

The decisions on the locations for handover and the timeframe involved will be made at a NATO conference later this year after talks between Western and Afghan government officials.

The start of the handover will not, however, mean that troops can start to withdraw.

British troops in particular will have to wait before pulling out as the areas in the south where they are based – the main battleground with the Taliban –– will be among the last to be transferred to Afghan control.

NATO Secretary General, Anders Fogh Rasmussen said: “The future of this mission is clear and visible: more Afghan capability and more Afghan leadership… But it will not be a pullout. It will not be a run for the exit… Our soldiers will move into a more supportive role. So, it will be a gradual process. This is conditions-based and not calendar-driven.”””” (ANI)

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U.S. bailout cost seen lower at $89 billion: report

April 13, 2010 By Leave a Comment

(Reuters) – The government’s bailout of the financial system is expected to cost $89 billion, much lower than earlier projections, the Wall Street Journal reported on Sunday, citing Treasury Department officials.

The Journal also said that Treasury officials were looking into ways to disentangle the government from its nearly 80 percent stake in American International Group Inc (AIG.N).

The officials are hopeful that the bailed-out insurer could be on its own within a year, the paper said.

Last month, Reuters reported that the government was likely to follow an exit strategy similar to what it had used with Citigroup Inc (C.N) to untangle itself from AIG.

In April last year, U.S. congressional budget analysts had estimated the net cost to taxpayers for the government’s financial rescue program to be $356 billion.

The $89 billion estimate is also 42 percent less than the savings-and-loan crisis, the paper said.

The figure, however, does not include losses at Fannie Mae (FNM.N) and Freddie Mac (FRE.N), which are projected to be $370 billion through 2020, the Journal said.

The officials see a profit of $8 billion from the Treasury’s investment of $245 billion in banks, the paper said.

A Treasury official did not have immediate comment.

(Reporting by Paritosh Bansal; Editing by Diane Craft)

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Online dating sites helping people cheat on partners!

March 27, 2010 By Leave a Comment

Sydney, Mar 27 (ANI): Internet dating sites are making a profitable business by offering cheating spouses an array of partners to have an affair with.

One such site operator is Noel Biderman, who uses the line “Life is short. Have an affair!” to advertise his online dating service, ashleymadison.com, which he claims has more than 5 million philandering members, including 10,000 in Australia.

But Biderman”s site is not the only one offering to help you find that special someone when you already have a special someone.

An Internet search throws up countless websites for cheating spouses, including meet2cheat.com.au, affairsclub.com, lonelyhousewives.com, philanderers.com and benaughty.com.

“I”m often asked if all these sites are causing more affairs,” the Sydney Morning Herald quoted vice-president of Relationships Australia NSW, Anne Hollonds, as saying.

“To some extent it”s easier, you can just sit at a computer. But these tend to be people who are wanting to escape their circumstances and derive the benefits from having a liaison with someone else.

“There have always been people who wanted to do that but they found other ways of doing it,” she stated.

Affairs used to start in the office and end with the discovery of lipstick on the collar but the digital age has allowed them to unfold entirely in cyberspace.

Males outnumber females two to one on ashleymadison.com. Female users tend to fall into one of three categories: the desperate housewife, the other woman or the third and fastest-growing group, the honeymoon female – a newlywed “canvassing an exit strategy” after realising marriage is not what she expected.

Loraleigh, a member of ashleymadison.com, who not surprisingly, did not wish to give her last name, went looking for sex with no strings attached.

“I”ve been married for 16 years and my husband is seven years older,” she said.

“His libido has dropped and mine hasn”t; in fact mine has increased. He”s older and not as fit as I am. I go jogging, I box, I swim, I”m trying to get rid of excess energy,” she revealed.

The hanky-panky is usually limited to instant message or webcam exchanges but she has met one user.

“I work in the health industry and you don”t flirt with people at work. It”s simply not done, so for me this was the obvious choice,” she added. (ANI)

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Exit package sought to combat grape glut

March 19, 2010 By Leave a Comment

Australia’s peak grape growing body says it is continuing discussions with the Government about an exit strategy for vignerons suffering from the grape glut.

It is expected up to 8,000 hectares of vineyards will be left unharvested across Australia this year, causing a biosecurity threat for other growers.

Wine Grape Growers Australia says many farmers cannot afford to remove their vines.

The group’s executive director, Mark McKenzie, says it is working on a financial assistance package with the Government.

“We continue to have discussions with the Government to come up with mechanisms like the farm exit grant type scheme that may be applied in the future,” he said.

“We certainly would like it applied to vineyards right across Australia who are not necessarily in drought declared areas but quite clearly are doing it very tough financially.”

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Brown faces crisis as defence aide quits over Afghan war strategy

September 4, 2009 By Leave a Comment

London, Sep. 4 (ANI): Gordon Brown is faced with another crisis after an aide to Defence Secretary Bob Anisworth, Eric Joyce, resigned over his handling of the war in Afghanistan.

The timing of Joyce’s resignation has reportedly infuriated Downing Street, as it came on the eve of Brown’s speech on Afghanistan.

Brown is set to deliver a major speech on Friday that will re-state Britain’s mission in Afghanistan, The Telegraph reports.

But Joyce, a former army major, has already warned Brown that the public is growing increasingly weary of his claim that the war in Afghanistan is being fought to protect Britons from terrorism at home.

“I do not think the public will accept for much longer that our losses can be justified by simply referring to the risk of greater terrorism on our streets. Nor do I think we can continue with the present level of uncertainty about the future of our deployment in Afghanistan,” The Telegraph quoted Joyce as saying.

In his long resignation letter that was handed to Number 10 last night, Joyce asked Brown to start thinking about an Afghanistan exit strategy. “We also need to make it clear that our commitment in Afghanistan is high but time limited. It should be possible now to say that we will move off our present war-footing and reduce our forces there substantially during our next term in government,” he said.

He also attacked the Labour party, saying it would lose the election if it did not look as if the party cared about defence and got a “grip” on the issue.

“We must make it clear to every serviceman and woman, their families and the British public, that we give their well-being the highest political priority. Labour must remember that service folk and their families are our people and we must at literally all costs continue to show by our actions that we mean it,” he said.

However, Ainsworth said the picture painted by Joyce was not one he “recognised.”

“Eric Joyce is, of course, entitled to his opinion and whilst we thank him for his service as a junior parliamentary aide, it is vital that we have a leadership team that is fully committed to our mission in Afghanistan,” Anisworth said. (ANI)

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New Zealand reluctant to send more troops to Afghanistan

April 21, 2009 By Leave a Comment

Wellington – New Zealand is reluctant to send more troops to Afghanistan because it believes the situation there is becoming more unstable, Prime Minister John Key said Monday.

“The determining factor is whether we can see a plan, whether the plan in our opinion is likely to work and whether it fits in with our long-term exit strategy,” he said at his weekly news conference.

The United States has asked New Zealand to commit more troops to Afghanistan on top of the 130 army engineers it has working in Bamyan province as a provincial reconstruction team (PRT).

News reports have said that Washington would like a unit of New Zealand’s crack Special Air Services forces, who were last deployed in Afghanistan in 2006, to return as part of President Barack Obama’s plan to increase foreign troop levels in Afghanistan to better combat Taliban and al-Qaeda fighters.

But Key said, “The risk assessments that I’m getting from Afghanistan is that our troops in the PRT in Bamyan province are becoming more at risk – in other words, the situation in Afghanistan is becoming more unstable.

“It would be my long-term desire to exit our commitment in Afghanistan,” he said.

Key said the government was reviewing the military situation in Afghanistan before it made a final decision on sending more troops. (dpa)

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New years’ halt to Sri Lanka fighting: president

April 14, 2009 By Leave a Comment

COLOMBO (Reuters) – Sri Lanka’s president on Sunday ordered the military not to attack the Tamil Tigers during a two-day holiday in order to allow thousands of civilians to escape a no-fire zone where they are being held by the separatists.

Soldiers have encircled the remnants of the Liberation Tigers of Tamil Eelam (LTTE) in a 17 square km (6 sq mile) no-fire zone on the northeast coast, and are close to crushing them as a conventional force and ending Asia’s longest-running civil wars.

President Mahinda Rajapaksa said that people should be “given uninhibited freedom of movement from the no-fire zone” in the Sinhala and Tamil New Year period on Monday and Tuesday.

“With this objective in view, His Excellency has directed the armed forces of the state to restrict their operations during the New Year to those of a defensive nature,” the presidential statement said.

There was no immediate comment from the LTTE, whose agreement to let the people go is essential. The United Nations and witnesses say people are being kept as human shields and forced conscripts or being shot as they try to flee.

In late January, Rajapaksa gave a 48-hour window of safe passage to civilians and urged the Tigers to let them go, but the rebels refused.

The LTTE so far has refused any diplomatic entreaties to get them to let people leave whom they insist are staying by choice.

Diplomats have been working furiously to negotiate an exit strategy for the people, who number 60,000 according to the government and around 100,000, according to the United Nations.

Rajapaksa again urged the LTTE to surrender.

“In the true spirit of the season, it is timely for the LTTE to acknowledge its military defeat and lay down its weapons and surrender. The LTTE must also renounce terrorism and violence permanently,” the statement said.

The Tigers have vowed not to give up their fight for a separate nation for Sri Lanka’s Tamil minority, which has engulfed the Indian Ocean island nation in a civil war that has killed at least 70,000 since 1983.

Since LTTE fighters wear vials of cyanide in case of capture, surrender is seen as unlikely despite the overwhelming military firepower facing them.

The mediators of Sri Lanka’s peace process — the United States, Britain, Norway and Japan — on Friday urged the Tigers to end the “futile fighting” and urged the military not to fire into the no-fire zone so the civilians will be safe.

The military denies shooting into civilian areas and says claims it does are Tiger propaganda. It has also refused all calls for a ceasefire, saying the Tigers repeatedly have used them to regroup to fight another day.

In the latest of a series of international demonstrations over the war, around 100,000 people marched through London on Saturday to demand a ceasefire between Sri Lankan forces and the Tigers.

The march through central London, organized by a British Tamil group, was the biggest yet in a week of demonstrations by Tamils and their supporters in various cities.

(Writing by Bryson Hull; Editing by Jerry Norton)

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Obama says military option in Afghanistan is not open-ended

March 23, 2009 By Leave a Comment

Washington, Mar.23 (ANI): President Barack Obama has said that the United States must look for a way out of the war in Afghanistan, suggesting that the military build-up in that landlocked country will not be open-ended.

“There’s got to be an exit strategy. There’s got to be a sense that this is not perpetual drift,” Obama told “60 Minutes” on CBS in a wide-ranging interview.

Obama’s remarks, which were recorded on Friday, indicated that the administration, which has more troops and resources in Afghanistan than European countries do, is also working toward a long-term strategy.

Last month, he announced that he would send 17,000 more American troops to Afghanistan this spring and summer, adding to the 36,000 already there.

According to the New York Times, Obama said the United States is keen to redefine its mission in Afghanistan, away from the Bush administration’s broader strategy of promoting democracy, civil society and governance in Afghanistan and toward getting the country to a point where it is not used to start attacks on the United States.

Asked what the United States’ mission in Afghanistan should be, Obama replied: “Making sure that Al Qaeda cannot attack the U.S. homeland and U.S. interests and our allies. That’s our No. 1 priority.” (ANI)

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Obama puts the brake on troop surge in Afghanistan

February 8, 2009 By Leave a Comment

Washington, Feb.8 (ANI): U.S. President Barack Obama has called on America’s defence chiefs to review their strategy in Afghanistan before going ahead with a troop surge.

According to a report in the Dawn newspaper, some senior Democrats have expressed concern about the military preparing to send up to 30,000 extra troops without a coherent plan or exit strategy.

The Pentagon is set to announce the deployment of 17,000 extra soldiers and marines, but Defense Secretary Robert Gates postponed the decision after Obama raised some questions about the lack of strategy.

According to the paper, he is said to have asked both Gates and the US Joint Chiefs of Staff: “What’s the endgame?” and did not receive a convincing answer.

“Obama is exactly right. Before he agrees to send 30,000 troops, he wants to know what the mission and the endgame is,” the Dawn quoted Larry Korb, a defence expert at the Center for American Progress, a Washington think tank, as saying.

During his election campaign, Obama had promised to deploy an extra 7,000-10,000 troops in Afghanistan, but the military has since inflated its demands.

The United States has been pushing Britain to send several thousand more troops but there is just as much disagreement and confusion among British defence chiefs over the long-term aim. Gordon Brown is set to receive a full briefing this week.

General Sir Richard Dannatt, the army chief who will step down this summer, has insisted that troops need a rest and believes he can send only one battle group, senior defence sources said.

General Sir David Richards, his successor, believes that the two extra battle groups the Americans have asked for is the minimum the UK should send, sources said. (ANI)

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