May 10, 2016

May 10, 2016

NEED TO KNOW

New Act in Greek Drama


The never-ending drama over Greece's public finances entered another phase over the past few days when Parliament voted on a range of hotly debated reform measures.

And as in any good stage piece, the actors were in place to play their part. After years of political wrangling and in-fighting, these roles are well-rehearsed in Athens.

The Greek government, still attempting to appease its creditors and woo international bond markets, passed an overhaul late Sunday of the state pension and social security system that raises workers' benefit contributions and increases their taxes.

As expected, financial markets welcomed the reform package – Greek 10-year bond yields hit their lowest level in four months on Monday – and demonstrators as usual accompanied the vote by protesting in front of the Greek Parliament, with trade unions claiming that the country cannot handle more austerity.

Although most are nonviolent, individual protestors threw petrol bombs and police responded by firing tear gas into crowds, as they have during previous rounds of debt negotiations.

Those observing the show are likely feeling sensations of déjà vu.

But Greek Prime Minister Alexis Tsipras of the left-wing SYRIZA party has promised a breakthrough this time around.

“We have an important opportunity before us for the country to break this vicious cycle, and enter a virtuous cycle,” Tsipras told the Greek Parliament during a debate on the reforms.

The reforms were essential for other talks to gain speed, Tsipras argued. The Eurogroup, the committee of Eurozone country finance ministers, began discussions Monday for more aid and debt relief measures following Sunday's vote.

The Eurogroup's aim is to avoid a default, and a repeat of last summer's nail-biting negotiations, when the deadline for Greece's next repayments arrives – the country will owe an estimated $2.6 billion to the IMF and other creditors by the end of July. 

But the Eurogroup's negotiations could result in around double that amount released to help Greece cover upcoming bills. That will only happen, however, if the cabal of finance ministers agree that Greece has met the terms outlined in previous bailouts, including budget savings that amount to roughly 3 percent of Greece's GDP in the next two years.

Unfortunately for Tsipras, it's unlikely that Sunday's reforms are going to hit these targets.

As IMF head Christine Lagarde warned in a letter to the Eurogroup last week, these targets are unrealistically high. If the Eurogroup doesn't grant Greece a bit more leeway, it will require another austerity package amounting to an additional 2 percent of GDP, Lagarde argued.

The Greek government is balking at more austerity – with unemployment still at 24 percent, further cuts could be socially catastrophic and push the country to breaking point, it says.

But the Eurogroup continues to toe the party line set by German Finance Minister Wolfgang Schäuble, rejecting the IMF's calls for new targets. 

We'll see what happens. The Eurogroup will discuss Greek debt and any possible relief in two weeks.

Meanwhile, the Greek drama will go on: Protestors protesting, the Greek government and EU leaders posturing, and the majority of Greeks bracing – for more taxes they cannot pay.

WANT TO KNOW

Nuclear-armed Boy King Crowned


The corpulent and unpredictable as well as triumphant Kim Jong-un demonstrated his absolute power over the Hermit Kingdom on Monday as the latest in a family dynasty that has ruled North Korea for 70 years.

A highly choreographed North Korea’s Workers’ Party congress anointed Kim as party chairman, an elevation from his more pedestrian old title of “first secretary”.

Experts noted that Kim, 33, rose to chairman far quicker than his forebears. “He’s an arrogant and calculating dictator, but he’s consolidated power faster than his grandfather did,” Brookings Institution expert Katharine Moon told The Washington Post.

Meanwhile, in his speech before the congress, Kim said he would continue researching nuclear weapons but also pursue more economic development and “normalizing” relations with “once hostile” nations.

Is it possible Kim will use his absolute power to change North Korea’s stance toward South Korea and the US? Kim wasn’t clear, but he’s young enough that he has time to try.

Syrian Ceasefires


The Syrian government announced a third extension of a ceasefire in Aleppo on Monday that would last for another 48 hours, the New York Times reported.

The US and Russian governments have been cooperating to keep the ceasefire alive, though plenty of violations have occurred. The two powers also agreed to a nationwide truce, though it wasn’t clear whether every part of the country was immediately heeding that agreement yet.

The Islamic State and the Al-Qaeda-linked Nusra Front aren’t included in the ceasefire agreement. They are still fighting in Aleppo, where 300 civilians have died in recent days.

Past ceasefires haven't prevented fighting. Government air raids hit rebel-held areas in Aleppo, activists said. Rebels bombarded a government-held neighborhood, killing a child, state media and another observer group said.

But, in the same period, the Nusra Front killed 13 members of Iran's elite Revolutionary Guards and took the town of Khan Touman, just south of Aleppo, as the rebels and government occupied each other.

Even as one Syria agrees on peace, another Syria descends further into darkness.

Brazil: No More Impeachment?


The acting speaker of Brazil's lower house of Congress, Waldir Maranhão, got his job last week when the South American country’s Supreme Court suspended his predecessor on allegations of obstructing justice and intimidating legislators.

Imagine the hornets’ nest Maranhão kicked when he announced Monday that he wanted to annul the lower house’s impeachment vote last month against Brazilian President Dilma Rousseff?

That vote triggered a process that’s now playing out. The Senate, for example, will vote on Wednesday to determine whether Rousseff should face an impeachment trial or not.

Rousseff allegedly broke fiscal laws by borrowing from state-owned banks to cover the government’s budget deficit and fund social welfare spending. The president has called the impeachment push a “coup” and has vowed to fight the charges.

Her side gained recently when former house speaker Eduardo Cunha was suspended for corruption allegations tied up with the infamous Operation Carwash investigation into Petrobras, the state-owned oil company.

Cunha ironically led the impeachment campaign against Rousseff.

DISCOVERIES

The Rise of the Bison


The Bison is now the official mammal of the US after President Barack Obama signed the National Bison Legacy Act into law Monday.

The law doesn’t necessarily protect the bison or change any laws governing the mammal. It just acknowledged the role of the bison in American history, from the energy and materials the animals provided Native Americans to how they came to symbolize the American West after the arrival of colonizing Europeans.

From the North Dakota State University Bison to the bison on the seal of the Department of the Interior since 1912, the big furry bovines are part of American culture.

And the good news: From the brink of extinction, bison are now bouncing back in population numbers due to more interest in them — for their meat and skins. It’s nice to see the hype paying off.

jbhatti
Tue, 05/10/2016 – 06:02