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Posts Tagged ‘EU’

China supports EU efforts at financial stability

In Uncategorized on December 21, 2010 at 9:30 am

China supports measures taken by the European Union and the International Monetary Fund to stabilize Europe’s debt crisis, Vice Premier Wang Qishan said Tuesday.

China has also taken steps to help European nations combat the sovereign debt crisis, Wang said at the opening of the third China-EU High-Level Economic and Trade Dialogue.

Wang said the two sides “should have confidence and enhance cooperation to work together for a robust, sustainable and balanced growth,” according to the official Xinhua News Agency.

Last week, EU leaders agreed to the creation of a permanent rescue mechanism for debt-laden countries in 2013 that would replace an existing bailout fund.

Chen Deming, China’s minister of commerce, speaks at a press conference during the 3rd EU-China High-level Economic and Trade Dialogue at the Diaoyutai State Guesthouse in Beijing on Tuesday December 21, 2010.

Ireland last month agreed to borrow up to euro 67.5 billion ($90 billion) from the EU and International Monetary Fund and implement severe spending cuts as its economy staggered under the weight of massively indebted banks.

The Irish rescue followed the EU-IMF bailout of Greece earlier this year and added to fears that other financially weak countries including Portugal and Spain would need bailouts, imperiling the future of the euro common currency.

China has also been involved in bailing out European countries, offering in October to buy Greece’s debt. Last week, Portugal said that China had pledged increased support for its efforts to climb out of a financial crisis, reportedly promising to buy $4 billion in Portugese government debt.

The EU is China’s largest trading partner, while China is the EU’s second-largest trading partner behind the United States, Wang said. Two-way trade for the first 11 months this year reached $433.9 billion, an increase of 33 percent from the previous year.

Wang said global economic recovery is being hampered by weak demand, while world markets have excessive liquidity and are turbulent.

He reiterated that China would implement a prudent monetary policy to ensure the world’s second-largest economy can maintain steady growth.

“China is taking a proactive fiscal policy and stable currency policy, while the EU is actively taking measures to combat the debt crisis,” Wang said. “China and the EU should strengthen cooperation to promote strong, sustainable and all-around growth for the economies of China and EU and even the global economy.”

Other officials participating in the talks include EU Competition Commissioner Joaquin Almunia, EU Trade Commissioner Karel De Gucht and China’s Commerce Minister Chen Deming.

Wang said he expected “substantive” progress during the talks on a wide range of trade and economic issue, including recognition of China’s market economy status and the loosening of EU restrictions on high-tech goods exports.

Wang said China and the EU should cooperate in a variety of sectors, including new energy and environment protection, while fighting protectionist measures.

“We need to jointly resist trade protectionism, advancing Doha round talks for balanced and all-around success,” he said.

Source: SGGP

EU finance ministers to meet on Irish aid plan Sunday

In Uncategorized on November 27, 2010 at 1:51 pm

European Union finance ministers are to meet in Brussels on Sunday to discuss the EU aid plan for debt-ravaged Ireland, a French source said Saturday.

The source familiar with the issue said French Finance Minister Christine Lagarde had called for a meeting of her colleagues from eurozone countries, to be joined afterwards by ministers from the rest of the EU.

Originally it had been planned for them to communicate simply by telephone to approve the package worth 85 billion euros (113 billion dollars) and its conditions, the source added.


Source: SGGP

EU treads uncharted waters to defend single currency

In Uncategorized on October 29, 2010 at 9:40 am

BRUSSELS (AFP) – The European Union faced a new round of risky treaty change Friday after its leaders agreed to embark on landmark reforms designed to wade off another financial crisis by shoring up the euro.

German Chancellor Angela Merkel speaks to media prior to a European Union summit at the European Council headquarters in Brussels. AFP

Sweeping reservations aside, the union’s 27 leaders wound up heated talks that dragged on into the early hours with an agreement to rewrite the EU’s main treaty only 11 months after it came into force.

“This spring we overcame a deep crisis of economic and monetary union,” said EU president Herman Van Rompuy, referring to the bail-out of Greece.

“Our next political duty was to draw the lessons for the future, to make the European economies more crisis-proof.”

Yielding to pressure from an “impassioned” German Chancellor Angela Merkel, leaders agreed to prepare a “limited” change to the hard-fought Lisbon Treaty, a decade in the making after fractious negotiations and failed referendums.

But diplomats warned before the ink was dry that the road even to light change could be rocky.

It will be “very difficult” to get a unanimous agreement on rewriting the treaty, one senior diplomat said.

“It’s mission impossible as there’ll be as many opinions on the subject as there are EU states.”

Germany, backed by France, demanded a rewrite of the Lisbon Treaty to enable it to back the creation of a permanent rescue fund enabling the union to rescue members in financial distress.

The agreement hammered out after seven arduous hours of talks agrees to establish the fund — known as a permanent crisis mechanism — to safeguard the financial stability of the euro area as a whole.

It invites Van Rompuy to undertake consultations on a limited treaty change required to that effect, with more talks set for a December summit and a final decision on “light” treaty change to come into force by mid-2013.

That is the expiry date for a temporary fund set up in May to reassure markets in the aftermath of the Greek crisis.

Germany contributed the lion’s share of eurozone commitments to the 440-billion-euro European Financial Stability Fund, but feared opposition from its powerful constitutional court to further aid failing a change in the EU’s Lisbon Treaty.

But some states fear that referendums in places like Austria or Ireland, whose Prime Minister Brian Cowen said it was “too early” to call, could unleash unintended damage.

Already both houses of parliament in London would have to ratify a change.

“Taxpayers should not be the only ones to shoulder the responsibility,” Merkel said of the type of perpetual rescue fund taking shape.

The treaty contains a clause banning members from bailing each other out.

Van Rompuy however said the clause would remain untouched — another would be changed instead.

Another German demand, for a suspension of voting rights for repeated debt and deficit offenders, was left hanging, to be faced afresh at a December summit.

Agreed economic reforms include tougher sanctions and stricter surveillance, even if penalties would be less severe than initially imagined.

For the first time, states would have to deposit monies with the EU, with the interest potentially withheld even before governments cross an existing three percent of gross domestic product threshold for annual deficits.

Another development would see sanctions applied to states whose overall, accumulated debt goes beyond 60 percent of GDP and who do not take steps sufficiently quickly to bring the level back down.

German Chancellor Angela Merkel speaks to media prior to a European Union summit at the European Council headquarters in Brussels.

Source: SGGP

EU leaders wary of plan to re-open Lisbon treaty

In Uncategorized on October 25, 2010 at 9:35 am

A fractious European Union summit looms this week as the bloc heads for a hard hurdle — a fresh and risky rewrite of its treaty demanded by France and Germany to shore up the euro.

Leaders of the 27-nation bloc face the challenge at a two-day summit starting Thursday to turn the lessons of the 2008-2009 economic crisis into hard and fast rules tightening debt and deficit discipline.

But a controversial Franco-German proposal issued days ago, denounced by many as a “diktat”, calls for the rules to be enshrined in a new draft of the hard-fought Lisbon treaty, which came into force only last December after eight years of tough talks and failed referenda.

“This is an extremely sensitive isssue that frightens the life out of some nations,” said a senior EU diplomat. “It’ll be the hot theme of the summit.”

German Chancellor Angela Merkel, pictured at a meeting of her Christian Democratic Union party in Goslar, Germany, on Saturday, has agreed a controversial deal with France’s Nicolas Sarkozy on the future of EU funding…

The notion of rewriting the fledgling treaty surfaced last week when French President Nicolas Sarkozy and German Chancellor Angela Merkel plastered over their own differences over economic governance in a sudden deal.

In efforts triggered by the emergency rescue of Greece and fears of a cascade of national basket-cases, EU leaders had this year created a 440-billion-euro rescue fund — the European Financial Stability Facility (EFSF) — set to expire in 2013.

Germany, which has been the biggest contributor to EU rescue efforts, favoured a temporary fund to ensure reining in spendthrift nations.

But Merkel last week caved in to Sarkozy’s call for the facility to be made permanent to shore up Europe’s monetary union, which dates back to 1999.

To meet the requirements of the German constitution, however, giving the EFSF eternal life requires a change to the Lisbon treaty, which currently outlaws EU member states from flying to the rescue of a bankrupt eurozone partner.

“The summit will have to indicate how to create a credible mechanism, given concerns in Germany, which refuses to extend it unconditionally,” the diplomat said.

Sarkozy for his part obtained a softening of already tentatively agreed sanctions against deficit offenders, which were supposed to be automatic but now would be more flexible while biting sooner.

The deal has raised hackles across the bloc of half a billion people.

“We’re not happy with what the French and the Germans did,” European Parliament spokesman for economic affairs John Schranz told AFP as lawmakers too prepared to mull the new rules this week.

“We want sanctions to be heavy-hitting and automatic” as opposed to the watered-down vision agreed by Sarkozy and Merkel, he said.

The sanctions climbdown has already been the subject of stern criticism from the head of the European Central Bank, the formal guardian of euro stability.

Budgetary hawks also including the Netherlands, Sweden and Finland do not think the proposed new rules go far enough.

Some in Berlin accuse Merkel of buckling, but others accuse EU finance ministers as a whole of getting “cold feet”.

“It is a step backwards,” said Austrian conservative Othmar Karas.

Worries are high too of opening a new Pandora’s Box in rewriting the Lisbon treaty, though some officials say the new rules could be simply written in when Croatia becomes the EU’s 28th member — which it hopes will be in 2012.

But other members could pile up new demands in exchange for green-lighting the Franco-German accord.

Non-euro Britain for example could come armed with a shopping list, even if senior EU officials insist sanctions will only apply to nations using the single currency.

British Prime Minister David Cameron “will not support anything that involves a transfer of powers from Westminster to Brussels,” a government spokesman said.

While Britain ratified Lisbon without a referendum, Cameron is already planning to bring forward legislation that would make any further dilution of “sovereignty” an issue requiring popular assent.

Source: SGGP

Somali pirates hijack sugar cargo ship with 24 crew: EU

In Uncategorized on August 6, 2010 at 7:20 am

BRUSSELS, Aug 6, 2010 (AFP) – Somali pirates seized a freighter with 24 Syrian and Egyptian crew members in the lawless waters of the Gulf of Aden, the EU’s anti-piracy force said, reporting the second pirate capture this week.

The Syria Star, flagged in Saint Vincent and Grenadines, radioed for help on Thursday and “reported that she was under attack from pirates who had climbed onboard and fired shots at the crew”, said the European Union NAVFOR Somalia mission.

Helicopters were dispatched and tried to establish contact with the ship, which was carrying a cargo of sugar, but they found only an abandoned skiff nearby containing fuel and ammunition, the force said in a statement.

“When warships arrived on the scene shortly after, the Syria Star had reversed course and was heading South East back towards the Horn of Africa under the control of the pirates, who refused to respond to radio contact.”

The vessel’s crew was predominantly Syrian and there were only two Egyptians.

It was the second pirate seizure this week.

On Monday, the sea bandits captured a Panamanian freighter with 23 crew from Egypt, India, Pakistan and Sri Lanka in the Gulf of Aden.

A day later, a Spanish warship foiled an attack on a Norwegian chemical tanker off the Horn of Africa. The vessel was holding seven suspected Somali pirates pending possible prosecution.

This week, a Saudi insurance company said it would pay a 20-million-dollar ransom to free a hijacked ship and its 14-member crew held hostage for five months.

“The owner of the Al-Nisr Al-Saudi ship, which was hijacked by Somali pirates, said the insurance company has agreed to pay a ransom of 20 million dollars to win the release of the ship and its 14-member crew,” Arab News said on Monday.

The pirates had been torturing the crew of 13 Sri Lankans and one Greek as well as threatening to kill them unless the ransom was paid, the daily quoted the ship’s owner, Kamal Arri, as saying.

The tanker, he said, was not carrying any oil when the pirates captured it in the Gulf of Aden in March as it sailed back from Japan to the Saudi port of Jeddah.

Arri said his company had so far lost about eight million dollars as a result of the hijacking.

Foreign naval powers have deployed dozens of warships since 2008 in a bid to secure the Gulf, a crucial maritime route leading to the Suez Canal through which tens of thousands of merchant vessels transit each year.

But pirates have gradually extended their area of operations, seizing ships as far east as the Maldives’ territorial waters and as far south as the Canal of Mozambique.

Naval missions, including the European Union’s Atalanta deployment, have boasted success in curbing attacks but the number of hijacked ships and detained seafarers remains at one of its highest levels since Somali piracy surged in 2007.

Unofficial figures show 2009 was the most prolific year yet for Somali pirates, with more than 200 attacks — including 68 successful hijackings — and ransoms believed to exceed 50 million dollars in total.

Source: SGGP

EU, Canada hit Iran with new sanctions

In Uncategorized on July 27, 2010 at 7:18 am

 The European Union and Canada slapped tough sanctions on Iran’s key energy sector in a bid to block its contested nuclear programme, and the United States said the punitive steps would bite.

European foreign ministers formally adopted the new measures Monday on the oil and gas industries, going beyond a fourth set of UN sanctions imposed over Iran’s refusal to freeze uranium enrichment. Canada then followed suit.

The moves, which follow similar sanctions imposed by the United States, are aimed at reviving moribund talks between Iran and six world powers — Britain, China, France, Germany, Russia and the United States.

“Today we sent out a powerful message to Iran, and that message is that their nuclear programme is a cause of serious and growing concern to us,” EU foreign affairs chief Catherine Ashton told reporters.

“But our objective remains, as I have always said, to persuade Iranian leaders that their interest is served by a return to the table. Sanctions are not an end in themselves,” she said.

File photo shows Iranians working at the zirconium production plant, part of the nuclear facilities (UCF) in Isfahan, Iran.

Iran’s foreign ministry however said the sanctions were not “an effective tool” and would only serve to “complicate” its showdown with the West.

Oil Minister Masoud Mirkazemi said they would have no impact on oil production because European oil firms had “no presence” in Iran’s energy sector.

The EU measures include a ban on the sale of equipment, technology and services to Iran’s energy sector, hitting activities in refining, liquefied natural gas, exploration and production, diplomats said.

New investments in the energy sector are also banned.

Iran is the world’s fourth largest producer of crude oil, but imports 40 percent of its fuel needs because it lacks enough refining capabilities to meet domestic demand.

The Iranian banking sector was also hit by restrictions, forcing any transactions over 40,000 euros (52,000 dollars) to be authorised by EU governments before they can go ahead.

The United States hailed the move, saying the steps “underscore the international community’s deepening concerns about Iran’s nuclear program.”

State Department spokesman Philip Crowley said: “We’ve already begun to see the impact of the sanctions as companies around the world refuse to do business with Iran, rather than to risk becoming involved in Iran’s nuclear program and other illicit activities.”

The identities of those hit by the new measures will be published in the official EU journal on Tuesday. Diplomats said 41 individuals and 22 government entities were concerned.

Canada’s sanctions take aim at Iran’s energy and banking sectors, as well as chemical, biological and nuclear activities, Foreign Minister Lawrence Cannon said.

Canada will also bar all new investment in Iran’s energy industry, particularly crude oil refining and liquefied natural gas.

Ashton has exchanged letters with Iran’s chief nuclear negotiator Saeed Jalili in recent weeks in a bid to revive talks, and Tehran has indicated that the talks could resume in September.

The last high-level meeting between Iran and the six world powers was held in Geneva in October 2009 when the two sides agreed a nuclear fuel swap that has since stalled.

Western powers have demanded that Iran suspend its uranium enrichment programme, fearing that Tehran would use the material to build a nuclear bomb. Tehran says its atomic programme is a peaceful drive to produce energy.

Iran’s actions “are bringing it closer and closer to possessing nuclear weapons which represents a threat,” said Cannon.

British Foreign Secretary William Hague said: “Iran’s ongoing refusal to engage constructively on this issue leaves us no option but to implement these sanctions.”

Israel welcomed the sanctions and urged other countries to follow suit.

Iranian Foreign Minister Manouchehr Mottaki said at the weekend Tehran was ready to hold immediate talks on a nuclear swap deal brokered by Turkey and Brazil in May.

World powers have given the cold shoulder to that deal, a counter-proposal to the October agreement.

Source: SGGP

Iran warns EU against imposing sanctions

In Uncategorized on July 25, 2010 at 11:16 am

Iranian President Mahmoud Ahmadinejad warned the European Union (EU) on Sunday against imposing unilateral sanctions, saying Tehran would react swiftly and cause “remorse.”

“We do not welcome any tension or a new resolution. We seek logic and friendship,” Ahmadinejad said in remarks directed at the EU, which were translated into English by the Press TV channel.

“I should tell you that anyone who adopts a measure against the Iranian nation, such as inspection of our ships and planes, should know that Iran will react swiftly,” the hardliner said.

“Experience shows that such a reaction by the Iranian nation will cause remorse to it (the EU),” he added.

Iranian President Mahmoud Ahmadinejad, pictured in June 2010,

The EU will impose tough sanctions against Iran’s vital oil and gas industries on Monday in a bid to lure Tehran back to the negotiating table over its disputed nuclear programme.

EU leaders and the United States decided to impose their own penalties against the Iranian energy sector soon after the UN Security Council levied its fourth set of punitive measures on June 9.

The sanctions are part of a twin-track approach with EU foreign affairs chief Catherine Ashton seeking to revive moribund talks between Iran and six world powers — the United States, Britain, France, Germany, Russia and China.

Western powers have demanded that Iran suspend its uranium enrichment programme, fearing that Tehran would use the material to build a nuclear bomb. Tehran says its atomic programme is a peaceful drive to produce energy.

The new EU sanctions reportedly include a ban on the sale of equipment, technology and services to Iran’s energy sector, hitting activities in refining, liquefied natural gas, exploration and production.

The EU will also ban dual-use goods that can be used for conventional weapons, and step up vigilance of Iranian banking, barring banks connected to Iran from opening branches.

Ahmadinejad warned that countries supporting the United States in its anti-Iran agenda will be considered as “hostile” towards the Islamic republic.

“Anyone who participates in the (anti-Iran) US scheme, we will consider them as hostile… and Iran will strongly respond to any threat” from them, the hardliner said.

Ahmadinejad, under whose presidency Iran’s relations with the West have deteriorated, said that the US and its aides are “worried by Iran’s progress.”

“By launching a psychological war, they think they can halt the Iranian nation’s progress,” he said, adding that imposing sanctions was also part of a move to halt the nation’s progress.

“They do not want Iran to reach the status it deserves,” he added.

Source: SGGP

EU stress tests bring moment of truth for banks

In Uncategorized on July 23, 2010 at 11:17 am

PARIS, July 23 (AFP) – The European banking system faces a moment of truth Friday when regulators reveal whether it is strong enough to cope with any fresh crisis or needs another huge injection of cash to keep it afloat.

Much depends on the outcome.

The authorities are claiming that the results of the ‘stress tests’ on 91 top lenders will largely be positive, with any problem banks requiring more capital likely to be corralled off safely and then bailed out.

Analysts say that would be a positive outcome — but the tests have to be rigorous and tough enough to convince investors that the books have not been cooked to produce the desired results.

It is about confidence, they say, in the banks, in the regulators, in the financial system and ultimately in the prospects for recovery from the worst recession since the 1930s.

“We should all be bracing ourselves for relief to flow through European financial markets (on the results),” Credit Agricole strategist Mitul Kotecha said.

“More likely, questions will be asked about why did so few banks fail and why the tests were not rigorous enough?”

The global financial crisis devastated the banks, claiming victims among the most iconic names in the business as once abundant credit markets dried up.

Others had to be bailed out to the tune of tens of billions of dollars (euros) by governments who effectively covered the bad debt of the banks by borrowing extensively themselves through issuing bonds.

That at least stabilised the economy, allowing a recovery from early last year, but the cost was heavily indebted governments whose own troubles now threaten the recovery they worked so hard for.

The markets reason that if governments such as Greece and Spain face problems managing their debt, then their sovereign bonds, bought up by the banks to bolster their books, might now be worth a lot less.

Investors want to know exactly how much less, so they can judge if the banks are really sound and can be trusted to pay back what they borrow.

At the same time, governments with huge debt burdens are slashing spending to balance their budgets, which puts economic growth at risk, in turn hitting business and the banks which fund it, to create a dangerous vicious circle.

The problems came to a head earlier this year when Greece had to seek an IMF-EU bailout and Brussels with the International Monetary Fund set up a trillion-dollar fund to protect the whole eurozone project.

To ease nerves, the authorities agreed to test 91 lenders, accounting for 65 percent of the European banking system, promising they would stop the rot and restore credibility, as a similar exercise had done in the United States.

The IMF warned Tuesday of what was at stake.

“Some uncertainty regarding the stringency of the tests is likely to remain,” the IMF said in the report, calling for more transparency and a wider assessment to be made.

The Fund said it wanted “a more detailed disclosure” of outcomes, together with remedial actions by weak institutions to cope with low capital levels.

Stock markets rose sharply on Thursday, in part as investors anticipated a largely positive review of the banks which posted some very sharp gains.

In London, which gained nearly two percent, analyst Michael Hewson of CMC Markets said banks were well-supported, partly on “an expectation that the larger banks should pass (Friday’s) stress tests without too many problems.”

Analysts said, however, that the key issues remained.

“The stress tests now need to give us two crucial indications,” said UniCredit analyst Loredana Federico.

“First, how much more will banks suffer if (economic) growth is significantly lower and sovereign bonds come under more pressure, and second; how many ailing banks are hiding behind the veil of … reassuring eurozone numbers,” Federico said.

ING strategist Jeroen van den Broek said “the greatest fear is that the tests show too little diversification between the good, the bad and the ugly, and is seen by the market as being too optimistic.

“The outcome simply must be realistic; a true classification of the European banking system with necessary capital injections lined up will, in the long term, be beneficial to banking confidence,” he said.

The test results are to be published by the London-based Committee of European Banking Supervisors at 1600 GMT on Friday.

They are expected to show how each bank would cope if economic growth slows sharply, if money owed is not paid, if stock markets plunge or if there is a crisis which slashes the value of government bonds on their books.

The bottom line of the tests is how the balance sheets of the banks would look once they had been adjusted for the effects of such shocks — in other words, would they have enough capital to continue operating.

Source: SGGP

Eurozone unemployment rate stuck at 10 percent: EU

In Uncategorized on July 2, 2010 at 2:20 pm

BRUSSELS, July 2, 2010 (AFP) – Unemployment across the 16 countries which share the euro stuck at a record 10 percent in May for the third month running, European Union data showed on Friday.

Almost 16 million people were out of work in the common currency area as the unemployment rate in the crisis-hit eurozone remained at its highest level since the euro’s creation in 1999, seasonally-adjusted Eurostat figures showed.

The official statistics agency had initially estimated an unemployment rate of 10.1 percent for April, but it revised the figure down to 10 percent.

The unemployment rate in the wider, 27-nation European Union stood at 9.6 percent in May, also unchanged from the previous month, for a total of 23.13 million people without jobs.

Among the eurozone’s biggest economies, unemployment fell slightly in Germany to 7.0 percent in May from 7.1 percent the previous month. It stood still in France at 9.9 percent and in Italy at 8.7 percent.

In Spain, the unemployment rate rose to 19.9 percent compared to 19.7 percent in April.

Source: SGGP

Vietnam to speed up PCA negotiations with EU

In Uncategorized on June 28, 2010 at 4:49 pm

Vietnam to speed up PCA negotiations with EU

QĐND – Monday, June 28, 2010, 22:7 (GMT+7)

Deputy Prime Minister Pham Gia Khiem has called for the completion of the final negotiation round on the Partnership and Cooperation Agreement (PCA) with the European Union (EU) to be signed in Belgium in October.


Mr Khiem made the request at a conference of the National Committee for International Economic Cooperation in Hanoi on June 28, aimed at establishing key tasks for the committee in the second half of this year.

Mr Khiem asked the committee to work more closely with relevant ministries and agencies to finalise the 2010-2020 Free Trade Agreement (FTA) plan to submit to the Prime Minister in July.

He also emphasised the need to complete the report on Vietnam’s economic situation since the country joined the World Trade Organisation (WTO) three years ago, as well as the research on Trans-Pacific Partnership (TPP) Agreement and the technical assistance project in the post-WTO period.

Mr Khiem suggested coordinating with the Government’s negotiation delegation and boosting cooperation in APEC and ASEAN to help accomplish these tasks. It is essential to make an assessment of WTO membership’s impact on Vietnam’s development, he said.

Deputy Minister of Industry and Trade Nguyen Cam Tu, who is also General Secretary of the National Committee for International Economic Cooperation, said so far Vietnam and the EU has completed seven rounds of negotiations on the PCA. However, eh said the EU has not yet fully recognised Vietnam’s market economy status.

Mr Tu said at present 22 countries have already recognised Vietnam’s market economy status.

Source: VOV

Source: QDND