There are fears of more violence during the rallies called by trade unions as the public mood hardens, a BBC correspondent in Athens says.

Meanwhile the government is finalising emergency legislation demanded by international lenders.

It says Greece has avoided a nightmare scenario by agreeing to the bailout.

The country has already been through a massive austerity programme in return for an earlier bailout, and many are angry at the prospect of years more hardship.

Athens last week saw the worst rioting in years after parliament passed the deeply unpopular austerity measures.

More confrontations between protesters and police are expected on Wednesday over the measures demanded by other eurozone governments and the International Monetary Fund as a condition for the rescue.

“Workers in our country refuse to accept the barbarity of the tougher neo-liberal measures that have been extortionately imposed by our creditors,” the GSEE private sector trade union warned earlier this week.

“And that is why they will continue and step up their struggle… to block the destruction of our society”.

Under Tuesday’s agreement hammered out after marathon talks in Brussels:

• Greece will undertake to reduce its debt from 160% of GDP to 120.5% by 2020
• private holders of Greek debt will take losses of 53.5% on the value of their bonds, with the real loss as much as 70%
• eurozone experts will permanently monitor Greece’s economic management
• a constitutional change will give priority to debt repayments over the funding of government services

‘Daily struggle’

On Tuesday, Finance Minister Evangelos Venizelos said the deal had given Greece a new opportunity, and had “avoided the nightmare scenario”.

“What we have is the clear, explicit commitment of our peers that they will support us even after the end of the programme, until Greece returns to the markets,” he said.

The country has just over a week to approve a round of spending cuts of more than 3bn euros tied to the bailout.

At Tuesday’s cabinet meeting, ministers discussed emergency legislation. A parliamentary vote is expected on Thursday.

The bill proposes cutting the current 751-euro minimum monthly wage by 22%, and also further cuts of pensions, reports say.

Opinion polls suggest that the two parties in the coalition, which currently dominate parliament, are facing huge losses at the next election, scheduled for April.

Parties on the far left and far right, which are set to make big gains, are opposed to the bailout deal.

The head of the opposition Communist party has vowed to oppose new cuts.

“We insist on daily struggle to thwart the measures and this struggle cannot be a defensive one,” said Aleka Papariga.

Eurozone leaders hailed the deal as a triumph, and said it had saved Greece from going bankrupt.

Former Greek Prime Minister George Papandreou told the BBC’s Hardtalk programme that Greece had made major sacrifices and deserved more respect from international analysts and financial markets.

“We have made major sacrifices in Greece,” he said.

]]> http://www.moneymedia.co.im/greece-bailout-large-protests-expected-against-cuts/feed/ 0 http://www.moneymedia.co.im/appleby-expands-into-china/ http://www.moneymedia.co.im/appleby-expands-into-china/#comments Tue, 21 Feb 2012 10:25:41 +0000 admin http://www.moneymedia.co.im/?p=732 Appleby, a well-known name in the Isle of Man, is expanding its legal, fiduciary and administration services into mainland China.

The firm will open a new office in Shanghai on April 2, a few days before the tax information exchange agreement between the Isle of Man and China – the world’s biggest exporter – comes into force.

Managing Partner of Appleby Isle of Man, Sean Dowling, says China’s been a significant market of interest to the Island for some time, with Chinese investors likely to be attracted by access to the European VAT network and zero per cent corporate tax rates.

Mr Dowling says the Island is in an ideal position to offer services to Chinese individuals and businesses, and extending the company’s reach with a physical presence in mainland China offers good prospects for growth.

The Shanghai office will work in tandem with Appleby’s Hong Kong office which has served clients in Asia for 20 years.

The euro was little changed from Monday’s closing price, while leading European stock markets edged lower in early trading.

London’s FTSE, the Paris Cac and Frankfurt’s Dax index were all down between 0.1% and 0.2%.

Shares across Europe rose on Monday in anticipation of a deal being reached, with bank shares doing well.

Europe’s banking industry has been bolstered by support from the European Central Bank.

In the latest bailout deal, Greece is to receive loans worth more than 130bn euros (£110bn; $170bn).

In return, it will undertake to reduce its debts to 120.5% of its GDP by 2020 and accept an “enhanced and permanent” presence of EU monitors to oversee economic management.

Greece needs the funds to avoid bankruptcy on 20 March, when maturing loans must be repaid.

‘Problems remain’

“Effectively Europe’s banks have been given almost half-a-trillion euros at 1%, very cheap money that has sort of ring-fenced the banks from the crisis. The thinking is that banks will not go bust if Greece fails,” said Louise Cooper, market analyst at BGC Partners.

But she said few in the markets thought the latest bailout was the answer.

“This just puts off the inevitable. It’s the second deal in two years. You’re talking almost 20,000 euros per person [in Greece] in total bailout funds and even that amount has not solved Greece’s problems. That suggests the money has not been well spent,” she added.

“It [the deal] probably avoids a messy and chaotic default on 20 March, there are still a lot of steps to go through before then, but does it solve any of its problems? No.”

Four of those affected were board directors.

Mr Daniels is expected to lose between 40% and 50% of a £1.45m bonus, or between £600,000 and £700,000.

BBC business editor Robert Peston says they are being penalised over their role in the mis-selling of payment protection insurance (PPI).

This involved the sale of insurance that, in theory, covered repayments if borrowers were unable to continue repayments through illness or unemployment, but in many cases those taking out the policies would not have been eligible to claim on them.

Our business editor says three other board directors are expected to see about £250,000 of their bonus taken from them.

About six other executives, below board level, would lose around £100,000 each.

This is the first time a British bank has taken back bonuses from executives, following a financial performance that was worse than expected.

The return of some of the bonuses, which were demanded by regulators after the banking crisis of 2008, are being made after pressure from politicians and the Financial Services Authority.

Results

Lloyds Banking Group is the UK’s biggest lender and owns the Halifax, the Bank of Scotland and the Cheltenham and Gloucester.

It has been forced to set aside £3.2bn to cover compensation for those customers who were mis-sold PPI.

The bank will publish its results this Friday and is expected to announce a loss of about £3.5bn.

The bank has not yet formally announced its plans for the return of some of the bonus money.

Its current chief executive, Antonio Horta-Osorio, said in January he would not take an annual bonus for 2011.

Our business editor says the move may have a deterrent effect in future, making bankers more likely to consider the consequences when they launch new products or do assorted deals.

It’s always good to bounce ideas off like-minded folk, to hear their interpretation of matters and circumstances that can often appear as plain as the nose on your face, but which, when viewed from a different perspective, assume a radically contrasting hue.

Like my pal, I’m much more of a saver than a borrower, although unlike him, I still have a rump of borrowing I’m eager to eradicate while interest rates remain at an historic low. His reaction to this near-term strategy was unexpected – he believed that with rates so ridiculously low, surely this was an ideal time to increase personal borrowing rather than pay down debt.

Assuming you’re in the market to borrow, there is undoubtedly merit in such an argument, provided you can borrow at reasonable cost, but I’m not and before rates start heading north again, perhaps in two years’ time, I would like to reduce debt as much as possible. Statistics suggest I’m not alone in harbouring such an ambition.

Savers and investors outnumber borrowers by a factor of six and, as the first group accept that there’s little chance of savings returns improving in the near future, should  they have any existing borrowing, reducing capital balances currently looks like a very sensible use of cash.

Base rates have been at their present level of 0.5% since March 2009 and most people are now used to them being there. But this is by no means their ‘neutral’ level, which is closer to 4% – 5%. If few saving opportunities present themselves, it seems quite natural to pay down debt, although not entirely at the expense of saving, because when interest rates start motoring again (and they will), a large swath of borrowers are in for an almighty shock.

However, unless you have a lump sum with which you can comfortably remove borrowing in one fell swoop, there is great merit in allocating at least a proportion of your monthly / quarterly ‘surplus’ to investment.

While this is easier said than done, those in a position to should ignore property, bonds, gold and cash and instead invest in equities. Here, my pal and I agreed – not just because according to a report published last week, shares remain the best asset class for long-term investing.

A mammoth study by the London Business School (LBS) on behalf of Credit Suisse covering the 112-year period since 1900 found that the average real (ie, after inflation) annual return on UK shares is 5.2%. Over the same period, bonds have yielded 1.5%, property 1.3% and cash a paltry 1%

Furthermore, the impressive performance of shares for more than a century is not attributable to wonderful company management or even the miracle of compound interest, courtesy of reinvesting dividends, but to an ‘equity risk premium’ which, according to the LBS authors, has averaged around 3.5%.

They suspect it will hover around the same level in future – enough, surely, to persuade savers and investors to ensure a proportion of any ‘spare’ capital is invested, either directly or indirectly, into the stock market.

Manx government figures indicate the global space industry was worth about $300 billion in 2011, and the Island’s share of the profits reached the $1 billion mark.

The Isle of Man is home to twelve space firms involved in work developing space tourism technology and satellite communications.

Space Foundation chief executive Elliot Pulham says there is great potential

The government says it reiterates the UK’s commitment to nuclear energy “as part of a diversified energy mix”.

The coalition says the agreement will create a number of commercial deals in the nuclear energy field, worth more than £500m and creating 1,500 UK jobs.

Defence will also be on the agenda as PM David Cameron and President Nicolas Sarkozy hold a summit in Paris.

An announcement about joint development of a future unmanned aircraft is also expected.

‘Joint framework’

“This joint declaration will signal our shared commitment to the future of civil nuclear power, setting out a shared long term vision of safe, secure, sustainable and affordable energy, that supports growth and helps to deliver our emission reductions targets,” a statement from Downing Street said.

The two governments will work together with the International Atomic Energy Agency (IAEA) “to strengthen international capability to react to nuclear emergencies and establish a joint framework for cooperation and exchanging good practice on civil nuclear security”.

The move comes 11 months after the tsunami in Japan which wrecked the nearby the Fukushima Daiichi nuclear plant, leaking radioactive material into the air and sea.

UK and French public and private sector bodies in the civil nuclear power industry will also work more closely in a number of areas.

These include education and training; research and development, and security.

“As two great civil nuclear nations, we will combine our expertise to strengthen industrial partnership, improve nuclear safety and create jobs at home,” said Mr Cameron.

Eight sites

Last June, ministers announced plans for the next generation of UK nuclear plants.

The government confirmed a list of eight sites it deems suitable for new power stations by 2025, all of which are adjacent to existing nuclear sites.

The sites are: Bradwell, Essex; Hartlepool; Heysham, Lancashire; Hinkley Point, Somerset; Oldbury, Gloucestershire; Sellafield, Cumbria; Sizewell, Suffolk; and Wylfa, Anglesey.

Rolls-Royce is expected to win a £400m ($632m) share in the building of the first of the planned power plants.

France’s Areva will supply the core of the nuclear reactors and Rolls-Royce will supply other engineering work.

“Rolls-Royce will become our prime manufacturing partner to supply some £100m of key critical components of the reactor for each EPR [next generation nuclear power plant] that’s constructed in the UK.” said Robert Davies from Areva UK.

Rolls-Royce plans to build a factory in Rotherham to meet orders resulting from the deal.

Earlier this month, the US Nuclear Regulatory Commission approved the first nuclear reactors to be built in the country since 1978.

In a three-hour conference call on Wednesday, the ministers scrutinised Greece’s planned budget cuts.

The single currency bloc praised Greece’s “substantial progress”, but demanded more detail, including a full timeline for implementing the measures.

A decision on the bailout is expected to be finalised on Monday.

Greece faces a looming deadline in mid-March when it needs to make repayments on a 14.5bn-euro bond, or face bankruptcy.

The EU and IMF have demanded that Greece make deep cuts and restructure its economy in return for the bailout.

‘Bottomless pit’

Speaking after a conference call between the 17 eurozone finance ministers on Wednesday, Jean-Claude Juncker, head of the so-called Eurogroup, praised the progress Greece had made.

But he said more work was needed to strengthen oversight of how Greece would implement its austerity plans.

The BBC’s Chris Morris in Brussels says the call reflects scepticism that Greece is willing or able to deliver on its promises of reform.

The “troika” of institutional lenders – the EU, the International Monetary Fund (IMF) and the European Central Bank (ECB) – had been demanding that Greece identify 325m euros of further spending cuts.

Mr Juncker said work on this had been carried out, including a timetable for implementation.

The ministers also insisted that the major Greek political parties promise in writing to implement the cuts, regardless of who wins a general election scheduled for April.

Leaders of the two main parties have now signed letters committing them to enacting the changes.

Meanwhile, President Karolos Papoulias hit out at German Finance Minister Wolfgang Schaeuble, whose comments during the talks stirred anger in Greece.

“I do not accept having my country taunted by Mr Schaeuble, as a Greek I do not accept it,” Mr Papoulias said.

Earlier, Mr Schaeuble said: “We can help, but we are not going to pour money into a bottomless pit.”

The unemployment rate was 8.4%, the Office for National Statistics said.

The number of people claiming Jobseeker’s Allowance last month increased by 6,900 to 1.6 million.

The number of young people without a job edged down to 1.038 million in the three months to December, taking the unemployment rate for 16-to 24-year-olds to 22.2%.

The number of job vacancies rose to 476,000 in the three months to January.

The ONS data also showed that average earnings increased by 2.0% in the year to December, unchanged from the previous month.

Consumer Prices Index (CPI) inflation in the UK fell to 3.6% in January, down from 4.2% in December, according to the Office for National Statistics (ONS).

Retail Prices Index (RPI) inflation – including mortgage interest payments – fell to 3.9% from 4.8%.

VAT went up from 17.5% to 20% in January 2011, pushing up inflation that year.

The drop brings CPI inflation to a 14-month low. However, the rate remains well above the Bank of England’s 2% target.

The government said it expected the inflation rate to continue to fall this year.

“Inflation fell significantly in January for the second month in a row, which is good news for family budgets. The Bank of England and other forecasters expect inflation to keep falling through this year, providing additional relief,” said a statement from the UK Treasury.

In addition to the impact of VAT, smaller increases in the cost of commodities and oil than seen a year earlier also helped to bring the inflation rate down, according to the ONS.

The average price of petrol in January rose by 0.6p a litre, compared with a 5.4p rise last year.

Diesel was up 0.7p a litre, compared with a 5.8p rise in January 2011.