We begin close to home with a headline from Salon:
California faces water shortages and wildfires as “mega-drought” gets even worse
The fire danger is “about as high as it can be,” one meteorologist warned
The year 2013 was California’s driest on record, featuring the least rainfall since the state started keeping track in 1849. And so far, 2014 is off to a bad start.
A full 63 percent of the state is in extreme drought conditions, according to the U.S. Drought Monitor — up from 23 percent just last week and extending into northwestern Nevada. Precipitation for the water year (which begins October 1) is less than 20 percent of normal levels in the areas of most extreme drought. Up in the Sierra Nevada mountains, snowpack — a major repository for the state’s water supply — is between 10 and 30 percent of normal, with many locations now in the bottom 5th percentile. Two of the state’s lakes are only 36 percent full; the San Luis Reservoir in Central Valley is down to 30 percent.
“It’s really serious,” Gov. Jerry Brown said Monday. “In many ways it’s a mega-drought; it’s been going on for a number of years.” Any day now, he’s expected to announce that California is officially in the midst of a drought.
More from the New York Times:
As California’s Drought Deepens, a Sense of Dread Grows
On Friday, Gov. Jerry Brown made it official: California is suffering from a drought, perhaps one for the record books. The water shortage has Californians trying to deal with problems that usually arise midsummer. With little snow in the forecast, experts are warning that this drought, after one of the driest years on record last year, could be as disruptive as the severe droughts of the 1970s.
Under state law, that would allow the governor to “waive laws or regulations and expedite some funding,” said Jeanine Jones, deputy drought manager for the state Department of Water Resources. “It does not create a new large pot of money for drought response or make federal funding available.”
Reuters gets defensive:
Latest perk on Google buses: security guards
First, San Francisco-based commuters to Google Inc got buses with plush seats and free WiFi. Now, they are getting security.
In recent days, men with earpieces have closely monitored passengers boarding Google commuter buses at the site of at least one bus stop in San Francisco’s Mission District. Their presence comes a few weeks after Google buses were targeted by protesters who blame tech-industry employees for rising city rents.
Gone are the days when mentioning Google as an employer gave young technology workers a certain counterculture credibility. As the company has expanded well beyond its Web search-engine roots to become a behemoth encompassing advertising, smartphones, finance and social networking, it has gone from scrappy start-up to a Goliath that many resent for its power.
In San Francisco, many long-time residents believe the influx of richly compensated workers at Google and other big technology companies such as Facebook Inc and Twitter Inc has pushed rents to unaffordable levels in neighborhoods that once were homes to the working class.
The Denver Post bites:
Edible marijuana sales shattering sales projections in Colorado
A one-month supply of marijuana edibles, gone in the first three days of January; that’s what the area’s largest supplier is saying about the incredible demand for the product since recreational sales were legalized in Colorado on Jan. 1.
“We are working hard,” said Joe Hodas, chief marketing officer for Dixie Elixirs and Edibles. “We like to call ourselves the future of cannabis.”
There is so much demand for edibles right now, they limit customers to two edible products a day at recreational pot shops like LoDo Wellness at 16th St. and Wazee in downtown Denver.
The Guardian pays out:
Goldman Sachs pays employees average of $383,000 after profits rise 5%
US bank’s 32,900 global employees to hear size of individual bonuses, while fixed-income trading operation had fall in profits
Goldman Sachs paid its bankers an average of $383,000 (£233,000) in 2013, after profits for the year rose by 5% to $8bn.
Putting a fresh focus on the debate over bankers’ pay, Goldman’s 32,900 global employees will be told the size of their individual bonuses on Thursday.
The bank set aside $2.19bn in the quarter ending December 31 to compensate employees, up 11% from a year earlier but down 8.1% from the previous quarter. Goldman partners were told about their bonuses on Wednesday.
From the Los Angeles Times, class debt:
Banks embracing a housing-bubble favorite: interest-only loans
Customers for interest-only loans are often self-employed and capable of making big down payments and maintaining fat bank accounts.
Most of the risky mortgages that triggered the financial crisis have disappeared from the marketplace, and lenders will have even more reason to avoid them because of a new federal crackdown on loose lending.
But one housing-bubble favorite — the interest-only loan — will remain a common offering to well-heeled home buyers, despite new rules from the Consumer Financial Protection Bureau. The rules, which took effect last week, exclude interest-only loans from “qualified mortgage” status, which protects lenders from liability over defaults.
Bankers don’t seem worried about affluent clients missing payments. With high-end home prices on the rise, they have recently embraced jumbo mortgage lending, including interest-only mortgages. That trend continued this week as the banks reported earnings, with Bank of America Corp. saying 36% of its fourth-quarter mortgages were jumbo loans, up from 23% of originations in the first quarter.
Bloomberg Businessweek retaliates:
Scandal Bowl: UNC Suspends Research by Academic Fraud Whistle-Blower
The most outrageous scandal infecting the business of big-time college sports just took a turn for the much worse. The University of North Carolina, famed for its outstanding academics and championship-winning basketball team, announced late Thursday that it had suspended research on athlete literacy by Mary Willingham.
A campus tutor employed by the university, Willingham has done more than anyone else to shed light on classroom corruption at Chapel Hill related to keeping sports stars eligible to play. The shadow cast on her research speaks volumes about the university’s unwillingness to come to terms with the undermining of academic standards in the service of athletics.
From Romenesko, more blood on a California newsroom floor:
Orange County Register owner names new newsroom leaders, confirms 32 layoffs
Orange County Register owner and publisher Aaron Kushner confirms in a memo that 32 newsroom employees were laid off today, and that Ken Brusic and other top editors have resigned. (I’m told they quit in protest of the layoffs.)
Local editor Rob Curley has been promoted to top editor.
CNBC cops out:
Battle over police pensions in US cities takes ugly turn
A drive by some American cities to cut costly police retirement benefits has led to an extraordinary face-off between local politicians and the law enforcement officers who work for them.
Another copout from Al Jazeera America:
NYPD agrees to ‘largest protest settlement in history’
New York City civil rights activists hail settlement over 2004 RNC demonstrations as a victory against mass arrests
In what civil rights lawyers have called “the largest protest settlement in history,” New York City has agreed to pay $18 million to protesters who said they were wrongly arrested at the 2004 Republican National Convention, where then-president George W. Bush was nominated for a second term.
The settlement ends nearly a decade of legal battles between the New York Police Department and plaintiffs who said police forces mishandled their arrests and violated their First Amendment rights.
Approximately 1,800 people were arrested, out of nearly 800,000 protesters, mostly on charges of parading without a permit or disorderly conduct. The circumstances of those arrests were heavily disputed, according to a statement from the New York City law department.
Red state blues from The Guardian:
North Carolina’s poorest hit by federal cuts: ‘Unless someone helps, we’re bust’
As Congress wrangles with whether to restore long-term unemployment benefits, North Carolina is already experiencing the hardship likely to unfold unless the program is restored
Debt for the rising generation from Bloomberg Businessweek:
Student Loans, the Next Big Threat to the U.S. Economy?
Outstanding student debt topped $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent, according to the Federal Reserve Bank of New York. By contrast, delinquencies for mortgage, credit card, and auto debt all have declined from their peaks.
The New York Federal Reserve’s move to measure the size of the student loan load says a lot about how concerned the central bank is about a possible threat to the economy. “Our job is to really understand what’s happening in the financial system,” and the “very rapid rise in student loan debt over the last few years” can “actually have some pretty significant consequences to the economic outlook,” New York Fed President William Dudley told reporters in November. “People can have trouble with the student loan debt burden—unable to buy cars, unable to buy homes—and so it can really delay the cycle.”
The federal government is the source and backer of most of the loans. “I’m always made very nervous by a credit market that benefits from government guarantees and is expanding very rapidly,” Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said on Jan. 10 at a Greater Raleigh Chamber of Commerce event in North Carolina. “That’s what we’re seeing with student loans, and it’s what we saw with housing.” As the New York Fed’s Dudley explained in November, “to the extent that student loan burdens become very, very high, there are presumably going to be losses” to the federal government.
For our first global story, this from TheLocal.ch:
Inequality poses world’s greatest risk: report
The growing gulf between the rich and the poor represents the biggest global risk this year, the World Economic Forum declared on Thursday ahead of this month’s Davos summit.
The Geneva-based institution issued the gloomy warning in its annual Global Risks survey, published before its annual get-together of decision-makers at the Swiss mountain resort of Davos from January 22nd-25th.
“The chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade,” the WEF concluded.
In its Global Risks 2014 report, which is based on a survey of more than 700 experts from industry, government, academia and civil society, the WEF outlined possible events that could damage the world economy this year.
The London Telegraph heads to the MINT:
How to invest in the ‘MINT’ emerging markets
Mexico, Indonesia, Nigeria and Turkey have been tipped as the next economic giants. Can savers make money or is this the latest investment fad?
The chances are you have probably heard that Mint is no longer just a peppermint sweet; it is now also an investment acronym which in the next decade or two could prove extremely profitable for investors.
The concept, which groups the countries of Mexico, Indonesia, Nigeria and Turkey, has been popularised in recent weeks by respected economist Jim O’Neill, the man who also coined the BRIC term in 2001, identifying Brazil, Russia, India and China as the next global economic powerhouses.
Splitting the difference with EUbusiness:
Bundesbank sees ‘limited’ risk of eurozone deflation
There is only a “limited” risk of deflation — or falling prices — in the 18 countries that share the euro, the head of Germany’s central bank or Bundesbank, Jens Weidmann, said on Thursday.
His remarks came after, and in contrast to, a warning from the head of the International Monetary Fund on Wednesday that the “ogre” of deflation was a potential threat to the world economy.
Eurozone inflation slowed to just 0.8 percent in December from 0.9 percent in November, according to the latest data published by the Eurostat statistics agency.
Auto anxieties from the London Telegraph:
Car sales in Europe at lowest level since 1995
New registrations fell 1.7pc in 2013, the sixth consecutive year of decline, although sales picked up at the end of the year
Car sales in the European Union were at their lowest level for 18 years in 2013, as slumps in certain crisis-hit eurozone states outweighted an improvement in other countries including the UK.
New registrations fell by 1.7pc to 11.9m, according to ACEA, the European Automobile Manufacturers’ Association. This was the worst level since ACEA begin recording data for the enlarged EU in 2003, and the worst for the block of 15 European countries the body had previously measured since 1995.
Car sales have slumped since the financial crisis and are now 26pc down on 2008, although sales rebounded towards the end of the year as the eurozone exited recession.
Disestablishmentarianism from EUobserver:
MEPs call for dismantling of EU bailout ‘troika’
The “troika” of international lenders, which sets the terms of eurozone bailouts with little or no democratic oversight, should be replaced by an EU system which is accountable to the European Parliament, MEPs say.
“All European instruments that are not based on EU law are provisional. EU instruments should be based on the community method, with the European Parliament acting as democratic legitimator and control body,” Austrian centre-right deputy Othmar Karas told press in Strasbourg on Wednesday (15 January).
Karas is drafting a report together with a French Socialist colleague, Liem Hoang-Ngoc, on the work of the troika.
Gimme shelter from New Europe:
MEPs ask for an EU wide strategy for the homeless
The MEPs once again asked from the European Commission to form an EU-wide strategy for the homeless.
On 16 January, the MEPs adopted a resolution asking from the Commission to finally establish a European strategy for the homeless. According to the resolution adopted by 349 votes to, 45, with 113 abstentions an EU homelessness strategy should focus on housing, cross-border homelessness, quality of services for the homeless, prevention and homeless young people. According to the MEPs even though the responsibility for tackling homelessness lies with EU countries an EU strategy for the homeless must have a complementary role to play.
The European Commission has already acknowledged that homelessness levels have risen recently in most parts of Europe and the crisis seems to have aggravated the situation. Moreover, the profile of the homeless population has been changing and now includes more young people and children, migrants, Roma and other disadvantaged minorities, women and families are increasingly at-risk of homelessness.
Another new record from EUobserver:
Poverty in Europe at ‘unprecedented levels’
EU social affairs commissioner Laszlo Andor told MEPs in Strasbourg Thursday that poverty in Europe is at an all time high. “Poverty has risen in Europe, mainly in the more peripheral countries and regions, reaching unprecedented levels among those who are more vulnerable, such as homeless people,” he said.
More Banksters Behaving Badly from The Guardian:
HSBC and Citigroup suspend foreign exchange traders amid rigging probe
US regulators arrive in London to step up joint investigation with Financial Conduct Authority into alleged market manipulation
HSBC and Citigroup have both suspended foreign exchange traders as a global probe into possible currency market manipulation intensified.
Regulators from the United States arrived in London this week, stepping up an investigation in which they are working with Britain’s financial watchdog, the Financial Conduct Authority, to determine whether traders at some of the world’s biggest banks colluded to manipulate the $5.3 trillion-a-day (£3.2tn) foreign exchange market.
The investigations centre on senior traders’ communication of client positions via electronic chatrooms, which also featured prominently in a probe into the rigging of a key interest rate known as the London interbank offered rate, or Libor.
Sky News bubbles selectively:
House Prices ‘Risk Becoming Unsustainable’
A report warns of the consequences of the growing gulf between homes for sale and demand in some areas of the UK.
Surveyors have warned that house prices risk becoming unsustainable in some areas because low home supply is failing to meet high demand in the market.
The Royal Institution of Chartered Surveyors (Rics) measured the strongest level of sales in six years ahead of Christmas.
Its report predicts prices will rise by 5% on average in each of the next five years but warns that a lack of properties for sale risks people paying far more than market value to secure a home.
From The Independent, so much for du seigneur?:
Calls to abolish outdated rights for lords of the manor that ‘serve no purpose in the 21st century’
The title is a hangover from the feudal era and does not automatically bring with it physical property, but entitlements and duties that would have once been held by a medieval seigneur are often included
And along that line, one of those entitlements or duties? From the London Times:
Fancy-dress dogging on duke’s estate upsets villagers
Police have been called to an aristocrat’s estate to crack down on sex parties involving groups of men dressed in fairy wings, tutus and PVC.
The Badminton Estate, owned by the Duke of Beaufort, is being plagued by groups of men congregating in farm buildings in fancy dress.
Nick Bush, a tenant farmer, asked the police to intervene after battling in vain to deter the men.
RT bets on the come line:
UK worsens global hunger crisis by ‘blocking reforms on food speculation’
The UK is being accused of attempts to block EU reform to prevent food speculation. It took EU negotiators three years to agree on a regulation against speculation by banks and hedge funds which drives up food prices, aggravating the global hunger crisis.
The deal introduces new rules to limit speculation on products linked to what people eat, such as wheat, corn, soybeans or sugar. The new controls will set limits on the number of food contracts that banks and other finance institutions can hold, pushing traders to open their activity to greater public scrutiny.
Representatives of the EU’s 28 governments and EU lawmakers clinched the deal on the outlines of the Markets in Financial Instruments Directive (MiFiD) in Strasbourg late on Tuesday. The bloc’s executive arm, the European Commission, has promised that the rules on agricultural derivatives would “contribute to orderly pricing and prevent market abuse, thus curbing speculation on commodities and the disastrous impacts it can have on the world’s poorest populations.”
An Irish booster shot from Independent.ie:
Moody’s upgrades Ireland to Investment Grade after bailout exit
RATING agency Moody’s has upgraded Ireland’s government debt from “junk” to higher quality “investment grade” status.
International money markets reward Ireland with low interest rates, bailout chief says
The country is now regarded as a lower risk investment by all of the main credit agencies for the first time since 2011.
Finance Minister Michael Noonan said the move will help to lower borrowing costs for companies and individuals.
Norwegian anxieties for naught from TheLocal.no:
Norway’s open border brings few Romanians
Norway has seen few extra Romanians and Bulgarians since it lifted border restrictions at the end of 2012, belying fears in the UK of a floods of migrants.
The richest country in Europe with a generous welfare state, Norway could be expected to be a top draw for low-salaried Eastern Europeans.
But between January and December 2013, it saw just 4,904 Romanians and Bulgarians registering for work using their European Economic Area (EEA) citizenship, a rise of just 24 percent on the year before, when they needed to apply for special work permits.
Amsterdam next, with a not of disapproval from DutchNews.nl:
Dutch business leaders slam cabinet polices, support at record low
Dutch business leaders are extremely unhappy with the current right-left coalition’s policies and think the cabinet is failing to tackle the crisis.
Employers’ organisation VNO-NCW questioned 471 company bosses about their attidudes to the VVD-PvdA government and current policy. In total, the cabinet scored just 4.9 out of 10 – a record low according to the Telegraaf.
Prime minister Mark Rutte was rated 5.4, well below most of his senior ministers. Top ranked minister was finance chief Jeroen Dijsselbloem, who scored 6.6.
Germany next, where TheLocal.de restores a commons:
Hamburg buys its energy grid back for €400 million
Energy giant Vattenfall said on Thursday it had “unwillingly” agreed to sell the electricity grid in Hamburg back to the city, as approved by a referendum last year.
The value of the transaction, still to be determined, is expected to be about €400 million. Vattenfall has a 74.9 percent stake in the electricity grid company, Stromnetz Hamburg, while the remaining 25.1 percent belongs to the German city.
“The value of the entire electricity grid company has preliminarily been agreed at €550 million euros,” the Swedish company said. “However, both parties have agreed on a minimum value of €495 million.”
France next and the origin of the feces from TheLocal.fr:
Tonnes of dung dumped at French parliament
As if President François Hollande didn’t have enough crap to deal with right now, protesters sent tonnes more his way on Thursday when they dumped a lorry-load of manure outside the French parliament.
Weeks after hundreds of chickens were let loose, several tonnes of steaming dung were dumped from a lorry in front of the parliament building on the Quai d’Orsay on Thursday morning during what French police termed “un attentat à la crotte” or “poop attack”.
The lorry carried a simple message to President François Hollande and his buddies in parliament: “Hollande and the political class should get out, make way for the Fifth Republic”. The driver was arrested soon after dropping the steaming cargo.
Spain next, and another austerian demand from El País:
Eurogroup and EC insist Spain needs second round of labor reform
EU commissioner Rehn says Brussels engaging in “constructive dialogue” with Rajoy government on the issue
The president of the Eurogroup, Jeroen Dijsselbloem, on Thursday reiterated calls for Spain to undertake a second round of reforms of the labor market in order to strengthen the country’s recovery from a deep recession.
As Dijsselbloem himself told reporters during a visit to Beijing accompanied by the European Union commissioner for economic and monetary affairs, Olli Rehn, he had already made a speech in Madrid in October along the same lines. “New labor reforms will work, not only in Spain, but also in other countries,” he said.
In a report released in December, the OECD also suggested that severance pay remains high in Spain and that more cuts were necessary to tackle high unemployment, which currently stands at 26 percent.
The labor reform introduced in February 2012 cut severance pay for permanent workers from 45 days of wages for each year of service to 33 days, and the maximum amount from 42 months’ salary to 24 months. It also introduced a series of so-called “objective causes” such as falling sales and technological and organizational changes that allow companies to lay off workers en masse with severance pay of only 20 days’ wages for every year worked, up to a maximum of one year’s salary.
From EurActiv, schismatic:
Spanish ruling party rebels launch new conservative party
Rebels from Spain’s ruling conservative People’s Party launched a new political party on Thursday (16 January), hoping to tap into public discontent over sky-high unemployment, graft scandals and surging separatism in Catalonia.
Leaders of the new party, named Vox (voice in Latin), accuse Prime Minister Mariano Rajoy of being too soft on Catalan and Basque separatism and of breaking election promises by, for example, raising taxes.
“Millions of Spaniards … feel abandoned by the political system, which is infested with corruption scandals and at the beck and call of private interests,” Santiago Abascal, a former PP member on the Vox executive committee, told reporters.
More schismatics from El País:
Catalan assembly approves motion to seek leave to hold self-rule referendum
Three Socialist lawmakers break with party line to vote in favor of proposal
“We are not voting on the political future of Catalonia, but the form in which Catalans will decide it”
The Catalan regional assembly on Thursday approved a motion to ask the national Congress for permission to hold a referendum on the independence of the region from the rest of Spain.
The proposal was approved by members of the ruling center-right nationalist CiU bloc, the Catalan Republic Left (ERC) and the ICV leftist-green group. Three members of the Catalan branch of the main opposition Socialist Party (PSC) broke ranks to vote in favor of the motion, while the center-left Candidature for Popular Unity (CUP) abstained. The conservative Popular Party (PP) and the centrist Citizens party voted against.
TheLocal.es gets going:
Spain’s expat exodus continues
Spain lost nearly 200,000 registered foreign residents in 2012 as the country’s economic crisis continued to bite, official figures released on Friday show.
The new figures from Spain’s National Statistics Institute (INE) highlight the continuing fall in the number of registered foreign residents in Spain.
According to the data, there were 190,020 fewer foreigners registered with Spain’s local town halls on January 1st 2013 than on the same date a year earlier.
While these figures fail to take into account the huge number of foreigners in Spain who fail to register on their local civil register (padrón), the decline suggests many people are leaving because of the country’s economic crisis
And thinkSPAIN tracks turmoil:
Burgos burns as boulevard riots leave 40 in custody
VIOLENT protests in the central Spanish city of Burgos over controversial works on a main boulevard have led to 40 arrests and widespread damage.
Five days of riots, with wheelie-bins set alight and bottles smashed as well as physical fights have blackened the otherwise peaceful and picturesque city’s landscape – but as yet, calls for the work to stop have not been answered.
Some 8,000 residents have formed a working party to fight plans to spend in excess of eight million euros on revamping the C/ Vitoria in the Gamonal neighbourhood, money they feel could be better spent on public services.
On to Lisbon and a boost from El País:
S&P removes threat to further cut Portugal’s debt rating
Agency sees growing signs of economy stabilizing
Standard & Poor’s on Friday affirmed its junk-status BB rating for Portugal’s long-term sovereign debt after withdrawing a threat to further downgrade it, but maintained its negative outlook on the rating.
Portugal is aiming to successfully exit its 78-billion-euro bailout program later this year and return to the long-term debt markets. The IGCP debt-management arm of the government successfully tested the waters last week with a 3.25-billion-euro issue of five-year bonds
S&P said it expects the center-right Social Democrat-led coalition of Prime Minister Pedro Passos Coelho to have met its deficit-reduction target of 5.5 percent of GDP last year and make progress on achieving its 4.0-percent target for this year.
Italy next, with diplomatic debauchery from TheLocal.it:
‘Bunga bunga’ claims hit US consulate in Italy
An ex-employee of the US consulate in Naples has claimed her former boss slept with his staff and gave prostitutes free access to the property, Italian media has reported.
Kerry Howard, who worked at the consul until 2012, said she was forced to quit after whistleblowing about the behaviour of former Consul General Donald Moore.
During his time in Naples, Moore allegedly slept with a number of staff and prostitutes, Il Sole 24 Ore reported. The diplomat also allegedly gave the women the code to enter the consulate at night without being detected.
“Women are like candy, unwrap them and throw them away,” Moore was quoted as saying.
Retro racism from The Independent:
Italian MP Gianluca Buonanno ‘blacks up’ to deliver racist anti-immigration rant in parliament chamber
Northern League politician asks parliament whether people needed to ‘go around painted black’ in order to receive state benefits
An Italian MP has “blacked up” to deliver a staggering anti-immigration rant in the country’s parliament, smearing his face from a makeup pad and asking whether “we need to be a bit darker” to get benefits from the state.
Gianluca Buonanno, a politician with the right wing Northern League party, took the opportunity on Wednesday night to criticise “latecomers” and “non-EU” citizens who receive pensions despite, he claimed, having “never worked a day in their lives”.
Looking for the Toxic Avenger with Spiegel:
The Mafia’s Deadly Garbage: Italy’s Growing Toxic Waste Scandal
For decades, the Mafia has been dumping toxic waste illegally in the region north of Naples. Recently declassified testimony shows that leading politicians have known about the problem for years, yet done nothing about it — even as the death toll climbs.
After the jump, Greek crimes and crises, Ukrainian repression, Latin American violence, Indian inflation, Thai violence, Chinese “reforms,” environmental woes, and Fukushimapocalypse Now. . .
For our first Greek headline, there’s this from Europe Online:
Greece central bank predicts finance institutions need more capital
Greece’s banks are likely to require additional capital after stress test results are published this month, Central Bank Governor George Provopoulos said Thursday.
Stress tests have been carried out on the country’s four largest banks – the National Bank of Greece, Piraeus, Alpha Bank and Eurobank – to determine whether a 28-billion-euro (38-billion-dollar) recapitalization by the country’s bank rescue fund has left the banks capable of dealing with future shocks.
The Hellenic Financial Stability Fund has about 8 billion euros left to cover any capital shortfalls revealed by the stress tests.
Greek Reporter contracts:
Eurostat: Greece’s deflation at -1.8% in December
Greece recorded a deflation of -1.8% in December, according to data published today by Eurostat in Brussels.
The average inflation rate in the Eurozone fell to 0.8% in December compared to 0.9% in November, while inflation in the EU remained stable at 1%.
On an annual basis (from December 2012 to December 2013), Greece recorded the lowest inflation rate in the EU (-1.8%), followed by Cyprus (-1.3%), Bulgaria (-0.9%) and Latvia (-0.4%). The highest inflation rates were recorded in Estonia, Great Britain and Austria (2%) and Finland (1.9%).
In December 2012 inflation in Greece was at 0.3%, while in the Eurozone it was 2.2% and 2.3% in the EU.
Kathimerini English pushes:
Greek government aims for February deal with troika
With an exact date for the return of troika inspectors to Athens still unclear, government officials are aiming for a comprehensive settlement on pending reforms and other issues next month to ensure that negotiations are not open in the countdown to European and local authority elections in May, Kathimerini understands.
Troika inspectors are expected to return to Athens before the end of the month but officials rejected media reports on Thursday that envoys would be in the Greek capital on January 20 or 22.
According to sources, the government is keen to use the additional time to prepare thoroughly for talks so that a full agreement can be reached next month on the reforms and other prior actions that Athens must implement to clinch sub-tranches of rescue funding through May.
ANA-MPA gets defensive:
European Stability Mechanism’s Regling defends troika’s policies in Greece
“Private investors thinking about investing in Greece, won’t do it for the time being for more than 10 years,” Klaus Regling, chief executive of the European Stability Mechanism said on Wednesday.
Speaking in European Parliament, during a hearing by a “troika report” commission examining the legality of the troika’s actions in overdebted countries in Europe, Regling said the troika’s interventions were necessary; he acknowledged that the structural measures it imposed created difficulties and predicted that in the near future Europe will have a supervisory system without the IMF.
Commenting on the sustainability of the Greek debt, Regling underlined that “Greece is a special and complex case” because it was different from previous experiences of the International Monetary Fund.
MacroPolis has a mixed review:
Building activity posts first rise in 20 months but overall picture grim
Greek building activity (as measured by the number of building permits) rose by 4.1 percent year-on-year (yoy) in October for the first time since February 2012, according to the Hellenic Statistical Authority (ELSTAT). The respective surface area number recorded a modest 1 percent increase, while volume also rose 5.7 percent.
The aggregate figures, which strip out the monthly volatility, show that building activity is persistently deep in the red. In particular, the 12-month trailing average indicates that building permits have slumped 36.9 percent. Building activity to October also points to a sharp drop of 31.2 percent in permits. As expected, the bulk of total building activity (more than 90 percent) is related to the private sector.
Optimistic opining from ANA-MPA:
BoG governor sees signs economy is stabilising
The Greek economy is showing stronger signs of stabilization, Bank of Greece (BoG) governor George Provopoulos said on Thursday.
“Forecasts that the recession will end in 2014 are well-founded, provided that there is no political polarization ahead of the European elections,” Provopoulos told the Parliamentary Committee on Economic Affairs.
He also attributed a rise in non-performing loans, which have surpassed 30 pct of total loans, to the last years’ unprecedented recession and the PSI, “which cut 41-42 billion euros from banks and almost wiped out their capital,” as opposed to banks’ strategies.
Alienation from ANSAmed:
Crisis: disappointment urges thousands of Greeks to migrate
In search of employment and greater opportunities abroad
The ongoing financial crisis and recession of the Greek economy – added to a record unemployment rate of 27.8% last October – is forcing thousands of Greek citizens to migrate to other European countries in search of job opportunities and better working conditions, as daily To Vima reports.
Tens of thousands of doctors and engineers are abandoning Greece, with the USA and European countries such as Germany and Great Britain being the most popular destinations. Middle Eastern countries have also seen an increase of migration from Greece. The Norway Post recently noted how migration from southern European countries increased dramatically in recent years, with immigration from Greece having increased by 49% in the year between November 2012 and 2013.
More austerity for the most traumatized from To Vima:
Government considering the suspension of OAED family benefit
The bailout commitment to reduce insurance contributions has forced government to consider the drastic cut
According to a report by Ta Nea, the government is considering the suspension of employment agency OAED’s family benefit, due to its bailout commitment to reduce employer insurance contributions.
With the IMF pressuring the government to implement the reduction of insurance contributions, the government has little room to bargain and negotiate; the government’s alternative will be to carry out further pension cuts, which it wants to avoid at all costs.
This family benefit amounted to 8.22 euros per month for one child, 24.65 euros for two children, 55.47 for three children, 67.38 euros for four children, 78.68 euros for five children and so forth. This benefit was available to IKA insurance policy holders in cases where their contract either did not make provisions for such a benefit, or it was less than the OAED benefit.
Most austerity from Kathimerini English:
Closure of state bodies to hit urban planning, say experts
Experts expressed dismay on Thursday at the government’s decisions to shut down organizations responsible for urban planning in Athens and Thessaloniki, as well as another public body that is overseeing the creation of pedestrian routes linking the Greek capital’s archaeological sites.
The government presented legislation for public consultation on Wednesday that foresees the closure of 21 state organizations. Those include the Organization for Planning and Environmental Protection of Athens, also known as the Organization of Athens, and the equivalent body in Thessaloniki, which were established in 1985.
“The decision to close the two organizations is a huge leap backward, to a time when each municipality in Athens did whatever it wanted without taking their neighbors into account,” a former president of the Organization of Athens, current National Technical University of Athens professor Yiannis Polyzos, told Kathimerini.
At its peak, the Organization of Athens employed 70 people but today it has just five staff members.
ANSAmed goes bargain basement:
Foreign interest in investing in Greece is growing
From United Arab Emirates, Qatar and China
Funds from the United Arab Emirates and Qatar are seeking ways to get involved in funding Greek small and medium-sized enterprises, as foreign interest in investing in Greece is growing on a number of fronts, daily Kathimerini reports. According to a senior Development Ministry official, representatives of the Investment Corporation of Dubai (ICD) recently visited the heads of Greece’s four systemic banks to discuss ways of investing in corporate loans adding up to 700 million euros. At the same time Qatar remains interested in investing 1 billion euros in the Hellenic Investment Fund, as evidenced by the fact that its government has sent Athens a series of letters containing questions on technical matters.
The law for the foundation of the investment fund was voted on in the last few days of 2013 and the process for its organization and operation is already under way. The investments of Chinese groups in Piraeus are at a much more advanced stage. Chinese telecommunications giant ZTE is set to launch the pilot operation of its logistics center early next month, ahead of its official inauguration on February 20. Today or tomorrow state privatization fund TAIPED’s governing board is expected to issue its approval of the text of the contract concerning the sale of the former airport plot at Elliniko in southern Athens. The draft contract will then be forwarded to the three interested parties as an invitation for their binding bids.
Greek Reporter realigns:
SYRIZA Killing New Democracy, PASOK in Attica
A series of scandals, unresolved talks with the country’s international lenders, and the escape of a terrorist seem to be taking their toll on Prime Minister Antonis Samaras’ coalition government and his New Democracy Conservatives, who have fallen 7.7 percent points behind their rival, the Coalition of the Radical Left (SYRIZA) in the critical Attica region including Athens.
SYRIZA, which opposes the austerity measures being imposed by the government, had been battling for the lead in surveys for a year with New Democracy, both sides barely one percent apart, but now has a lead of 24.6-16.9 percent in the poll taken by GPO for Newcast.
That comes in the wake of a series of arrests involving a scandal at the failed state-owned Hellenic Postbank, the defense ministry, a publisher charged with failing to pay his taxes and as Samaras is trying to assert the country is poised to make a comeback. Voters aren’t buying it.
And ANA-MPA goes for the jugular:
SYRIZA official attacks government, presents party’s proposals on banking system
A banking system that remains under state control, setting up a bank to support development and a special organization that will deal with ‘bad loans’ are the three main points in Radical Left Coalition’s (SYRIZA) agenda for the banking system, SYRIZA’s Yiannis Milios, responsible for the main opposition party’s economic policy, said on Thursday.
“First of all, [we must have] public control of the banking system. It should retain its public nature, not because we support state control ‘whether or no’ but because this is a necessary in order to implement a different set of policies,” he said in an interview with the Greek website Left.gr.
“Secondly, setting up a parallel financing sector, which will not form a part of the systemic banks. I am talking about a special-purpose development bank, about social solidarity funds and instruments to support of initiatives offering support and tackling the humanitarian crisis. Third, and possibly most important of all, dealing with non-performing, ‘bad loans’. We should have a special state-controlled organization… This should be able to consider the cases of small households and businesses that cannot repay their loans,” he pointed out.
Kathimerini English says no:
Siemens executive denies bribes role
Heinrich von Pierer, a former president and managing director of Siemens, denied in an Athens court on Thursday any knowledge of the bribes the Greek branch of the German firm is alleged to have paid to public officials to secure contracts.
According to sources, von Pierer told magistrate Maria Nikolakea said that he had no part in the 1997 multimillion agreement, known as the 8002 contract, for Siemens to digitize OTE telecom’s network. He said that the comapny’s information and communication networks department was responsible for the deal.
Von Pirer also denied knowing former Transport Minister Tasos Mantelis, currently on trial for allegedly accepting payments from Siemens. The German executive said it was not usual practice for Siemens to “sponsor” politicians. Mantelis claims the payment was an election campaign contribution.
Austerian enthusiasm from EUbusiness:
Kerry praises Greece for tough economic choices
US Secretary of State John Kerry praised the Greek government Friday for making “tough choices” to resolve the country’s economic crisis and said he believed the situation was improving.
Kerry welcomed Greek Foreign Minister Evangelos Venizelos to the State Department, as Greece takes over the rotating presidency of the European Union.
“I want to congratulate Greece on assuming the EU presidency, and we look forward very much to working with them in that role, but also in continuing the path towards economic recovery,” the top US diplomat said.
Deadly intolerance from EnetEnglish.gr:
Police failed to intervene as Fyssas was murdered
Transcripts from the night of the stabbing emerge
Despite reporting that Golden Dawn elements were chasing people through the streets, a police motorcycle unit stationed close to where Pavlos Fyssas was fatally stabbed was instructed not to intervene during incident
Fresh evidence has emerged that suggests that police officers on the scene where a leftist hip-hop singer was fatally stabbed in September were instructed not intervene as the attack took place.
According to transcripts of communications between the police’s rapid response command and motorcycle units in the minutes immediately before and after the fatal attack, officers were in close vicinity to the spot where Pavlos Fyssas was knifed by a supporter of the neonazi Golden Dawn party.
The transcripts were among the material being used in the case against leading Golden Dawn members, who are accused of founding and running a criminal organisation. A magistrate in Piraeus, who is investigating Fyssas’ murder, requested the material, which would appear to corroborate the testimony provided by Fyssas’ girlfriend, who said that police – despite her pleas for help – remained idle during the attack.
Greco-chutzpah from ANA-MPA:
Golden Dawn deputy sues prosecutor and examining magistrates
Ultra-right Golden Dawn (Chryssi Avghi) MP Ilias Kassidiaris on Friday filed a suit against examining magistrates Ioanna Klapa and Maria Dimitropoulou as well as prosecutor Isidoros Doyiakos for breach of duty in connection with the GD case.
Kassidiaris claims that the remand warrants issued for Golden Dawn deputies Giorgos Germenis, Panagiotis Iliopoulos and Stathis Boukouras were signed on 9 January and the three deputies testified on 11 and 12 January.
A quesiton of timing from Kathimerini English:
Samaras mulling cabinet reshuffle and whether to call snap elections in October
SYRIZA’s declaration that it will attempt to force national elections in February over the successor to President Karolos Papoulias has forced Prime Minister Antonis Samaras and his aides to begin discussing when to carry out a cabinet reshuffle and whether the government should pre-empt the opposition’s move by calling snap elections itself later this year.
Sources have told Kathimerini that Samaras is receiving two different sets of advice regarding the reshuffle. One school of thought is that the changes to his cabinet should happen around April, before the European Parliament and local elections in May. By that point, Greece would have got through the most challenging part of its EU presidency and the prime minister could send a signal of commitment to reforms by replacing ministers who are underperforming.
However, the competing view is that a reshuffle before the elections would weaken the government’s hand as Samaras would be forced to explain why he was changing his ministers for the second time in less than a year. Also, some of Samaras’s advisers believe that the reshuffle would be useful to leave until after the May elections in case the government achieves a disappointing result.
On to Cyprus and a downer from ANSAmed:
Crisis: Cyprus; construction dropped 33% y/y in Q3 of 2013
The Cyprus Index of Production in Construction for the third quarter of 2013 declined by 32.9% year on year, CNA reports quoting figures released by the national Statistical Service (CyStat). The index is provisionally estimated at 45.6 units (base year 2010=100).
Production in buildings declined by 31% whereas civil engineering projects registered a decrease of 37.1% year on year. Furthermore, according to CyStat, the Output Prices Index in Construction for the third quarter of 2013 is provisionally estimated at 100,7 units recording a decrease of 0,7% over the second quarter of 2013.
On to the Ukraine with Bloomberg:
Ukraine Targets Protesters With New Rules as Lawmakers Brawl
Ukraine, battling the biggest anti-government demonstrations in almost 10 years, passed a slew of legislation to curb people’s ability to protest.
As scuffles between lawmakers left one with a split lip and another with an injured forehead, bills were approved yesterday to keep closer tabs on mobile-phone use and make erecting tents in public places illegal. Parliament had originally convened to discuss the 2014 budget, which was adopted without debate as opposition parties tried to block the session.
The new laws, which require President Viktor Yanukovych’s signature, risk inflaming street rallies that began two months ago when the government snubbed a European Union cooperation pact in favor of closer ties with Russia. Demonstrators demanding the dismissal of the government and snap elections have vowed to maintain their makeshift tent camp in downtown Independence Square until presidential elections next March.
According to the lawsuit, this indicates that the detentions were pre-decided.
Latin America next, starting with armed intervention from BBC News:
Mexican government says ‘vigilantes not the target’
The Mexican government has tried to reassure vigilantes in the western state of Michoacan that they are not the target of its security operation.
Hundreds of troops have been sent to the area to restore order after groups of vigilantes clashed with members of the Knights Templar drug cartel. Many of the “self-defence groups” have refused to heed the government’s call to lay down arms.
The interior minister said “they’re not our target, the criminals are”. Minister Miguel Angel Osorio Chong said he wanted to convince the vigilantes that “we are going to do our job”.
More from the Associated Press:
Mexico gov’t now faces vigilante groups it backed
Vigilantes in violent Michoacan state insist they won’t lay down their guns until top leaders of a powerful drug cartel are arrested, defying government orders as federal forces try to regain control in a lawless region plagued by armed groups.
Federal authorities find themselves struggling to rein in a monster they helped create in this state in western Mexico: citizen militias that rose among farmers and lime pickers to fight the powerful Knights Templar Cartel.
“They said they’re not going to bother us, but they don’t want us to keep advancing,” Hipolito Mora, head of the self-defense group in the town of La Ruana, said Wednesday. The vigilantes now control the 17 municipalities that make up southwestern Michoacan — about a third of the state. “They don’t want us to carry our guns in view,” Mora said.
And still more from BBC News:
Mexico replaces security chiefs in conflict-hit Michoacan
Mexican authorities have said top security officials will be replaced in the western state of Michoacan that has recently been rocked by violence.
Hundreds of troops have recently been deployed to restore order after groups of vigilantes clashed with a drug gang.
But many vigilantes are refusing to heed the government’s call to disarm.
This is despite reassurances by the federal government that the “self-defence groups” are not the target of an ongoing security operation.
Weighty measures from The Guardian:
Mexico enacts soda tax in effort to combat world’s highest obesity rate
Health officials in the United States look to Mexico’s new law as an experiment in curbing sugar consumption
A groundbreaking tax on sugar-sweetened beverages recently passed in Mexico could provide the evidence needed to justify similar laws across low- and middle-income countries and cities in the US, experts believe.
Campaigners and public health experts are watching closely to see what impact Mexico’s tax has on consumption. Mexico, where 32.8% of the population is obese, is now the country with the biggest weight problem in the world, according to the UN’s Food and Agricultural Organisation, overtaking the United States. The impact on health has been serious – 14% of the population has diabetes. Rates of high blood pressure, which can lead to stroke and heart