Wednesday, April 30, 2014

Bloomberg News - German Unemployment Falls a Fifth Month as Economy Grows

German unemployment fell more than twice as much as forecast in April in a sign that Europe’s largest economy will continue to lead the recovery in the euro area.
The number of people out of work decreased for a fifth month, dropping a seasonally-adjusted 25,000 to 2.872 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decline of 10,000, according to the median of 25 estimates in a Bloomberg News survey. The adjusted jobless rate was unchanged at 6.7 percent, the lowest level in two decades.
Germany has benefited from ultra-low interest rates in the euro area and the emergence last year of the 18-nation currency bloc from its longest-ever recession. The Bundesbank said this week that consumer sentiment and demand for housing construction in the country remain “exceptionally favorable.”
“Germany is well known for its exports but we also see a very positive trend for domestic demand,” said Heinrich Bayer, an economist at Deutsche Postbank AG in Bonn. “That’s good news for the country’s labor market and, of course, for the economy in the entire euro area.”
The number of unemployed shrank by 14,000 in western Germany and 11,000 in the eastern part of the nation, today’s report showed.

Euro-Area Unemployment

The German economy grew 0.4 percent in the final three months of 2013, twice as fast as the euro area. Gross domestic product figures for the first quarter are due to be published on May 15.
Volkswagen AG, Europe’s largest automaker, reported a 22 percent gain in first-quarter operating profit yesterday, helped by record sales at its luxury Porsche and Audi brands.
Germany’s jobless rate contrasts with the rest of the currency bloc. Unemployment in the region probably held at 11.9 percent in March, according to a separate Bloomberg survey before data due on May 2.
The state of the euro-area economy is “is pretty severe,” European Central Bank President Mario Draghi said this month. His “biggest fear” is a protracted stagnation that leads to high unemployment rates becoming structural, he said on April 3 after officials kept the benchmark interest rate unchanged at a record-low 0.25 percent.
The central bank’s 24-member Governing Council will gather in Brussels next week and announce its interest-rate decision on May 8. Draghi has said the ECB stands ready to deploy unconventional measures such as a negative deposit rate or quantitative easing if needed to fight the threat of deflation.
Euro-area inflation data for April will be published at 11 a.m. in Luxembourg today. Prices probably rose 0.8 percent from a year ago, compared with 0.5 percent in March, according to the median estimate in a Bloomberg survey. German inflation accelerated less than economists forecast this month, data from the Federal Statistics Office in Wiesbaden showed yesterday.
To contact the reporter on this story: Stefan Riecher in Frankfurt at

Tuesday, April 29, 2014

Bloomberg News - China’s Income Inequality Surpasses U.S., Posing Risk for Xi

Photographer: Brent Lewin/Bloomberg
People watch a street performer as he sits with monkeys in the Tianhe district of Guangzhou. The growing wealth disparity that accompanied China’s breakneck growth in the decade through 2011 has increased the risk of social instability in the world’s most populous nation.
The income gap between the rich and poor in China has surpassed that of the U.S. and is among the widest in the world, a report showed, adding to the challenges for President Xi Jinping as growth slows.
A common measure of income inequality almost doubled in China between 1980 and 2010 and now points to a “severe” disparity, according to researchers at the University of Michigan. The finding conforms to what many Chinese people already say they believe -- in a 2012 survey, they ranked inequality as the nation’s top social challenge, above corruption and unemployment, the report showed.
The growing wealth disparity that accompanied China’s breakneckgrowth in the decade through 2011 has increased the risk of social instability in the world’s most populous nation. Xi is engineering a slowdown in economic expansion to below 8 percent and leading a campaign against corruption as he grapples with rising unrest, credit risks, and pollution choking the country’s biggest cities.
“The main economic risk of the growing income equality in China is that it will spill over into popular political dissent,” said Glenn Levine, an economist at Moody’s Analytics in Sydney. “The challenge for the administration and Xi Jinping is to keep the economy growing and keep employment growing at a rate that keeps the populace satisfied with the existing political and economic model.”

Chinese Data

Using data from six surveys conducted by five universities in China, the University of Michiganresearchers calculated a measure of income inequality, the Gini coefficient, and compared it to earlier estimates.
In 2010, the Gini coefficient for family income in China was about 0.55 compared with 0.45 in the U.S. In 1980, the gauge in China was 0.30. A coefficient of 0.5 or higher indicates a severe gap between rich and poor, according to the report, which also said the Chinese government stopped releasing the data in 2000 when the gauge reached 0.41.
A reading of zero means all income is evenly distributed and 1 represents complete concentration.
“Since the 1980s, the rise of income inequality has been far more dramatic in China than in the U.S.,” the researchers wrote. Government policies that favor urban over rural residents and coastal over inland regions have contributed to the gap’s rapid growth in China, the report found.

Unrest Predictor

The official estimate for the income gap last year was about the same as in 2012, with the statistics bureau giving a Gini coefficient of 0.473, after 0.474 the previous year. That’s above the 0.4 level that the United Nations has said is a predictor of social unrest.
“It’s not clear at this point how big of an issue inequality is to the average Chinese peasant or factory worker,” Levine said. “At the moment the main gripe of the broader population appears to be around corruption of the elites” and the environment, he said.
China is minting more millionaires than any other emerging economy, according to a 2013 Asia-Pacific Wealth Report from Capgemini and RBC Wealth Management, which put their ranks at 643,000, up 14.3 percent from 2012.

Corruption Campaign

Xi has overseen a campaign against corruption that led to the arrest of officials in the government, business and the military. The ruling Communist Party has also sought to check the activities of online commentators and arrested microbloggers on charges of spreading false rumors. China’s government censors its Internet heavily, blocking websites such as Facebook and deleting postings on Weibo that it deems a threat to social stability.
China is approaching an anniversary that offers a stark reminder of its past struggle to manage popular dissent. On June 4, 1989, Chinese leaders ordered the army to clear thousands of protesters from Tiananmen Square, during which hundreds of people were killed.
More recently, factory strikes and separatist attacks have highlighted growing social unrest at a time of widening inequality and increasing tensions between the state and ethnic minorities.

Factory Strike

Workers at Yue Yuen Industrial Holdings Ltd. (551)’s shoe factory in China stopped work this month in a dispute over company benefit contributions, crimping output at the maker for brands such as Nike Inc. and Adidas AG. Last week, Xi warned against rising threats to social stability and national security, after 29 people were killed in a knife attack at a railway station in the south-west city of Kunming last month -- an incident officials blamed on members of the ethnic Uighur separatist movement.
The University of Michigan study will be published online this week in the Proceedings of the National Academy of Sciences of the United States of America.
“Chinese recognize income inequality as a serious social problem; on the other hand, they seem to have high tolerance for income inequality,” said co-author Yu Xie, a sociology professor and a researcher with the university’s Institute for Social Research in Ann Arbor, Michigan. “They don’t like it, but they seem to accept it as a fact of life. Something they have to pay for fast economic growth.”
To contact the reporters on this story: Lorraine Woellert in Washington; Sharon Chen in Singapore at
To contact the editors responsible for this story: Paul Panckhurst; Stephanie Phang at; Joshua Fellman at jfellman@bloomberg.netCarlos Torres at Stephanie Phang

Friday, April 25, 2014

BBC News - Russia's credit rating downgraded by S&P

Credit ratings agency Standard & Poor's has cut Russia's rating to one notch above "junk" status.
An armed man stands guard outside a building seized by pro-Russia separatists in the eastern Ukrainian city of Slavyansk on April 25, 2014
Ukraine's crisis is a significant concern for many of Russia's foreign investors
The move comes as foreign investors continue to take money out of the country amid tensions over the situation in Ukraine.
S&P downgraded Russia's rating to 'BBB-' from 'BBB'.
Also on Friday, Russia's central bank raised its key interest rate from 7% to 7.5% as it sought to defend the value of the rouble.
Capital flight
Announcing the downgrade, S&P said: "In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy."
The agency said this could "further undermine already weakening growth prospects".
It warned that further downgrades were possible if the West imposed tighter sanctions against Moscow.
Investors have been pulling money out of Russia since last year when the country's economy ran into trouble, but this process has intensified in recent weeks amid concerns over Ukraine.
In the first three months of this year, foreign investors have withdrawn $63.7bn (£37bn) from Russia, and economic growth has slowed significantly - it is expected to grow at no more than 0.5% during 2014.
Russian shares, which have traded lower this week, fell further following the downgrade, with the MICEX stock index slipping over 1.6% at one stage.
Russia's central bank said its rate rise was because of a higher inflation risk and the weakness of the rouble. The Russian currency has lost nearly 8% against the dollar this year.
The bank said its move would enable it to lower inflation to 6% by the end of 2014 and added it did not plan on cutting rates in coming months.
Russia's Economy Minister Alexei Ulyukayev dismissed S&P's move, saying that "partially, it is kind of a politically motivated decision".
However, analysts said other credit rating agencies were likely to follow suit.
"Russia is going backwards as reflected by developments in relations with Ukraine and the West," said Timothy Ash, analyst at Standard Bank.
He said the move was "bad for investment, bad for capital flows, and bad for broader political, economic reform and institutional reform".

Thursday, April 24, 2014

Bloomberg News - S. Korea’s Economy Grows More Than Forecast as Exports Climb

Photographer: SeongJoon Cho/Bloomberg
A worker walks past containers stacked at the Port of Pyeongtaek in Pyeongtaek, South Korea. Exports weathered the won’s 8 percent climb against the dollar over the past year.
South Korea’s economy expanded at a faster pace than forecast, showing momentum that could boost inflation pressures and build a case for a rate increase.
Gross domestic product grew 0.9 percent in January-March period from the previous quarter, the Bank of Korea said today in a statement in Seoul, above the median 0.8 percent estimate of 13 economists surveyed by Bloomberg News. From a year earlier, GDP increased 3.9 percent, the most in three years.
Exports weathered the won’s 8 percent climb against the dollar over the past year and private consumption increased, indicating households are coping with record debt. The central bank, which is monitoring any economic effects of last week’s ferry disaster, forecasts growth will accelerate to the quickest pace this year since 2010, helping push inflation up to its target band.
“The economy is doing well broadly, across exports, consumption and jobs,” said Lee Chul Hee, a Seoul-based economist at Tongyang Securities Inc, although the ferry disaster may damp consumer sentiment temporarily. “Inflation will rise to near 3 percent later this year,” prompting an interest rate increase by the first quarter of next year at the latest, he said.
The won rose 0.1 percent to 1038.25 against the dollar as of 11:00 a.m. in Seoul, while the Kospi Index was down 0.2 percent.

Rising Exports

Electronics and petrochemical products led a 1.7 percent increase in the nation’s exports from the previous quarter. Private consumption rose 0.3 percent on higher expenditures on durables such as automobiles.
Growth was constrained by weakness in business investment, with spending on facilities dropping 1.3 percent. Government expenditure fell 0.2 percent. The pace of overall GDP expansion matched the gain in the final quarter of last year.
The BOK raised its 2014 growth forecast to 4 percent from 3.8 percent projected in January and projected a 4.2 percent expansion for next year, after leaving its key rate unchanged at its April 10 meeting, the first under Governor Lee Ju Yeol.
Growth will pick up to near potential and inflation -- at 1.3 percent in March -- will rise into the BOK’s target range of 2.5 percent to 3.5 percent this year, even as weakness in emerging economies and monetary tapering by the U.S. Federal Reserve pose risks, Lee said on April 10.
The central bank may consider lifting its policy rate when demand starts to drive consumer price pressures, Lee said.

‘Hawkish’ Governor

The governor’s “hawkish” remarks prompted Goldman Sachs Group Inc. economist Kwon Goohoon to drop his call for a rate cut and instead forecast the central bank would remain on hold this year.
The BOK will raise its policy rate to 2.75 percent by the first quarter of next year, according to the median of 26 economists surveyed by Bloomberg News.
Growth is on the track projected by the central bank, BOK Director General Jung Yung Taek told reporters in Seoul after the data was released. The central bank will closely watch for any impact from the ferry sinking on consumption and the economy, he said.
To contact the reporter on this story: Eunkyung Seo in Seoul at

Tuesday, April 22, 2014

BBC News - Japan's trade deficit quadruples in March

Japan's trade deficit quadrupled in March as export growth slowed and energy imports continued to rise.
A natural gas power station in Japan
Japan's energy imports rose after the 2011 earthquake and tsunami
A weak Japanese currency, which pushed up the cost of imports, also contributed to the widening gap.
The deficit rose to 1.45 trillion yen ($14bn; £8.4bn), up from 356.9bn yen during the same month a year ago.
Japan's energy imports have been rising after it shut all its nuclear reactors in the aftermath of the earthquake and tsunami in 2011.
According to the latest trade data, imports of Liquefied Petroleum Gas (LPG) rose more than 8% in March, compared to the same month last year. Meanwhile, imports of Liquefied Natural Gas (LNG) rose nearly 4%.
And Japan is having to pay more for those imports after a series of aggressive policy moves aimed at spurring economic growth - including a huge boost to the country's money supply - have weakened the yen sharply.
The Japanese currency fell nearly 10% against the US dollar between March 2013 and March this year.
The latest figures show that while LPG imports rose 8.1% in volume during March, the value of those imports rose more than 18%.
Similarly, the volume of LNG imports rose nearly 4%, while the value of those shipments jumped 14%.
Sales tax impact?
Japan's overall imports rose 18.1% in March, compared to a year ago, while exports rose at an annual rate of 1.8%.
Some analysts suggested that Japan's recent sales tax hike also played a part in boosting imports during the month.
The rise in the sales tax - also known as consumption tax - came into effect on 1 April.
The sales tax has been increased to 8% from 5% and it will rise again, to 10%, in October 2015.
Analysts said the hike had seen increased demand among Japanese consumers in March, as they looked to buy goods ahead of prices rising once it had been implemented.
Marcel Thieliant, Japan economist at Capital Economics, said that looking ahead "consumers are likely to rein in spending in the wake of this month's consumption tax hike, which should reduce import demand".
There has also been growing speculation that Japan is looking to restart some of its nuclear reactors. If that happens, such a move is likely to help reduce its energy imports as well as its trade deficit.
"The trade shortfall is likely to narrow in the second quarter, which should provide some support to GDP growth even as domestic demand is set to plunge," Mr Thieliant said.

Thursday, April 17, 2014

Bloomberg News - Dollar Falls as Yellen Pledges to Support Economy; Pound Gains

The dollar fell against most of its Group of 10 peers after Federal Reserve Chair Janet Yellen said the central bank has a “continuing commitment” to support the economic recovery.
The pound rose to the highest in more than four years after data yesterday showed the U.Kunemployment rate fell to the lowest since 2009, adding to signs the economy is gaining traction. The yen strengthened, snapping a four-day decline versus its U.S. peer before Japan’s Cabinet Office releases its monthly economic report. The Australian and New Zealand dollars erased earlier gains and are set to drop this week.
“It looks like people are pretty keen to go short on the U.S. dollar again, and that’s having positive ramifications across a number of currencies today,” said Chris Weston, the chief market strategist at IG Ltd. in Melbourne. “Sterling looks reasonably strong. The U.K. continues to look relatively healthy compared with other regions.”
The dollar fell 0.2 percent to $1.3844 per euro as of 7:02 a.m. in London. It slid 0.2 percent to 101.99 yen, after rising 0.7 percent in the previous four days. The Japanese currency fetched 141.18 per euro from 141.24 yesterday.
The pound gained 0.2 percent to $1.6831, after reaching $1.6837, the highest since November 2009. The Australian dollar lost 0.1 percent to 93.61 U.S. cents, set to fall 0.4 percent this week. New Zealand’s kiwi was little changed at 86.32 U.S. cents after gaining as much as 0.3 percent. It has fallen 0.6 percent since April 11.
Financial markets in the U.S., U.K., Germany, Hong Kong, Singapore, Australia and New Zealand are among those that will be closed for a holiday tomorrow.

‘Take Profits’

“Before the Easter long weekend in the U.S. and Europe, and after U.S. stocks fell in after-hours trading, traders are selling the dollar to take profits,” said Yuji Saito, a director of foreign exchange at Credit Agricole SA in Tokyo.
Yellen, in her first major speech on her policy framework as Fed chair, said U.S. central bankers must be mindful of how short the Fed is of its goals of full employment and price stability.
“The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained,” Yellen told the Economic Club of New York yesterday. The employment shortfall “remains significant, and in our baseline outlook, it will take more than two years to close,” she said.

Fed Outlook

The Fed chief said in March that the central bank may start to increase borrowing costs from near zero “around six months” after concluding its asset-buying program, which economists forecast will end in October.
The pound climbed after data yesterday the unemployment rate dropped below the 7 percent threshold that Bank of England Governor Mark Carney set as an initial guide for considering a boost in interest rates.
The jobless rate, as measured by International Labour Organization methods, dropped to 6.9 percent in the three months through February from 7.2 percent in the quarter through January, theOffice for National Statistics said yesterday. The median forecast in a Bloomberg News survey of economists was a decline to 7.1 percent.

Best Performer

The pound rose 5.2 percent in the past six months against a basket of nine other developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes, the biggest gain within the group. The dollar rose 0.6 percent and the euro climbed 2 percent, while the yen dropped 3.8 percent.
Bank of Japan Governor Haruhiko Kuroda said the central bank will examine both upside and downside risks and make policy adjustments if needed. He spoke today at the central bank’s branch manager meeting in Tokyo.
Standard Chartered Plc revised its forecast for the yen against the dollar, predicting it will be at 100 by June 30 from a previous estimate of 104.
“In the absence of a serious downturn in the economy, the central bank may prefer to remain on the sidelines,” Standard Chartered analysts including Callum Henderson, the Singapore-based global head of foreign-exchange research, wrote in an e-mailed note to clients dated yesterday. “There is potential for some investors expecting further easing by the BOJ in the near term to be disappointed.”
The BOJ will expand what is already unprecedented easing by July, according to 72 percent of economists surveyed by Bloomberg. Policy makers announce their next decision on April 30.
To contact the reporters on this story: Kevin Buckland in Tokyo at; Kristine Aquino in Singapore at

Tuesday, April 15, 2014

BBC News - China gold demand to rise, World Gold Council says

China's demand for gold is set to rise by about 20% over the next few years, the World Gold Council has estimated, as the population becomes more wealthy.
Gold barsChina's demand for gold shows no sign of letting up
The council estimates private sector demand for gold in China will rise to at least 1,350 tonnes by 2017.
Chinese customers bought 1,132 tonnes of gold last year, in jewellery as well as gold bars and coins for investment.
The forecast comes as China becomes the world's largest gold-consuming nation since last year, overtaking India.
The World Gold Council says China is at the "centre of the global gold eco-system", as rapid urbanisation creates a rising middle class.
Albert Cheng, from the World Gold Council, said: "The cultural affinity for gold runs deep in China and when this is combined with an increasingly affluent population and a supportive government, there is significant room for the market to grow even further.
"Whilst China faces important challenges as it seeks to sustain economic growth and liberalise its financial system, growth in personal incomes and the public's pool of savings should support a medium term increase in the demand for gold, in both jewellery and investment."
According to the council, consumers bought a record amount of gold last year, with Asia's economic heavyweights China and India in the top two spots.
In Western markets demand for the precious metal remained strong, particularly in the US, where people bought a lot of gold jewellery as well as gold bars and coins.

Monday, April 14, 2014

Reuters News - World trade picture improves but 2014 still below trend: WTO

World Trade Organization (WTO) Director-General Roberto Azevedo attends a news conference on world trade in 2013 and prospect for 2014 in Geneva April 14, 2014. REUTERS/Denis Balibouse
World Trade Organization (WTO) Director-General Roberto Azevedo attends a news conference on world trade in 2013 and prospect for 2014 in Geneva April 14, 2014.
(Reuters) - The World Trade Organization slightly raised its 2014 forecast for growth in global goods trade to 4.7 percent on Monday, saying it did not expect a return to the historical trend level of 5.3 percent until 2015.
"If GDP forecasts hold true, we expect a broad-based but modest upturn in the volume of world trade in 2014 and further consolidation of this growth in 2015," WTO Director General Roberto Azevedo told a news conference in Geneva.
Although the 2014 forecast represents a brighter picture than the 4.5 percent growth that the WTO expected at the time of its last forecast in September, it is still gloomier than its predictions a year ago because the European Union's economic recovery took longer to materialize than expected.
"EU demand has been weighing on world imports for the past couple of years but it's starting to turn around," said WTO economist Coleman Nee.
"We will be watching very closely to see if the recovery in the EU disappoints," Azevedo added.
Azevedo said it was unclear if trade had permanently stopped growing at twice the speed of gross domestic product, which had been the trend until the global economic crisis.
He said 80 percent of the protectionist policies implemented since 2008 were still in place but he hoped they would be removed as economic growth improved.
"It's not on the level - not even nearly close to the level - that we had after the 1929 crisis. But it's measurable and regrettable."
The WTO does not forecast trade in services, but said that the dollar value of global services exports grew 6 percent to $4.6 trillion in 2013, against two percent growth in 2012.

(Reporting by Tom Miles; editing by Stephanie Nebehay, John Stonestreet)

Friday, April 11, 2014

BBC News - Putin warns Europe of gas shortages over Ukraine debts

Russian President Vladimir Putin has warned European leaders that Ukraine's delays in paying for Russian gas have created a "critical situation".
Pipelines transiting Ukraine deliver Russian gas to several EU countries and there are fears that the current tensions could trigger gas shortages.
Pro-Russian separatists are holed up in official buildings in Donetsk and Luhansk, eastern Ukraine.
Meanwhile, a European human rights body has stripped Russia of voting rights.
The Parliamentary Assembly of the Council of Europe (PACE) monitors human rights in 47 member states, including Russia and Ukraine.
Protesting against Russia's annexation of Crimea last month, PACE suspended Russia's voting rights as well as Russian participation in election observer missions.
The Russian delegation had boycotted the meeting. Its leader, Alexei Pushkov, described the proceedings as a "farce.
Pro-Russian protesters in Donetsk. 10 April 2014
Activists inside the Donetsk government building have proclaimed a "Donetsk Republic"
Russian state gas giant Gazprom says Ukraine's debt for supplies of Russian gas has risen above $2bn (£1.2bn; 1.4bn euros).
Gazprom said on Wednesday it could demand advance payments from Kiev for gas but President Putin said the company should hold off, pending talks with "our partners" - widely believed to mean the EU.
In a letter to European leaders, President Putin warned that the "critical" situation could affect deliveries of gas to Europe, his spokesman Dmitry Peskov said.
The letter released by the Kremlin says that if Ukraine does not settle its energy bill, Gazprom will be "compelled" to switch over to advance payment, and if those payments are not made, it "will completely or partially cease gas deliveries".
Mr Putin adds that Russia was "prepared to participate in the effort to stabilise and restore Ukraine's economy" but only on "equal terms" with the EU.
And he says that while Russia has been subsidising the Ukrainian economy with cheap gas, Europe has been exploiting its raw materials and worsening its trade deficit.
The US state department later said it condemned "Russia's efforts to use energy as a tool of coercion against Ukraine".
Spokeswoman Jen Psaki said the price Ukraine was being charged for its gas was "well above the average price paid by EU members".
Nearly a third of the EU's natural gas comes from Russia.
Previous Russian gas disputes with Ukraine have led to severe gas shortages in several EU countries. The EU says it has extra gas supplies and reverse-flow technology to deal with any such disruption now.
Buildings occupied
In Kiev, the authorities said Ukraine would not prosecute pro-Russian activists occupying official buildings in Donetsk and Luhansk if they surrendered their weapons.
The separatists in the east - a mainly Russian-speaking region with close ties to Russia - are demanding referendums on self-rule. In Donetsk they have declared a "people's republic". Gunmen have been seen among the protesters in Luhansk.
Ukraine has accused Russia of stirring up the unrest, a claim Moscow denies.
Meanwhile, Nato has unveiled satellite images it says show some 40,000 Russian troops near the Ukrainian border in late March and early April, along with tanks, armoured vehicles, artillery and aircraft.
British Brigadier Gary Deakin, speaking at Nato military headquarters in Belgium, said it was a force that was "very capable, at high readiness, and... close to routes and lines of communication".
A Russian military officer said the images dated from August last year and denied there had been a build-up of troops along the border, Russia's Ria Novosti news agency reported.
Satellite image taken 22 March 2014, and provided by Supreme Headquarters Allied Powers Europe (SHAPE) on 9 April 2014, shows what is purported to be a Russian military airborne or Spetznaz (Special Forces) brigade at Yeysk, near the Sea of Azov in southern RussiaSeveral satellite images have been released by the Supreme Headquarters Allied Powers Europe of the Russia/Ukraine border areas. This photo, which Nato says was taken on 22 March, appears to show Russia's elite Spetsnaz forces stationed at Yeysk in southern Russia, near the border
Satellite image taken 27 March 2014, and provided by Supreme Headquarters Allied Powers Europe (SHAPE) on 9 April 2014, shows what is purported to be a Russian artillery battalion at a military base near Novocherkassk, east of the Sea of Azov in southern Russia. This image purports to show a Russian artillery battalion at a military base near Nonocherkassk, east of the Sea of Azov in southern Russia
Satellite image taken 27 March 2014, and provided by Supreme Headquarters Allied Powers Europe (SHAPE) on 9 April 2014, shows what are purported to be Russian military tanks and vehicles at a military base near Kuzminka, east of the Sea of Azov in southern Russia. This apparently shows Russian tanks at a base near Kuzminka on 27 March
Ukraine fears that the Russian separatist actions are a provocation similar to the protests that gripped Crimea days before Russian troops annexed the peninsula last month. Russia denies the claim.
President Putin said on Thursday his decision to annex Crimea was taken after secret opinion polls and had not been planned in advance.
Speaking to political supporters near Moscow, he said the first poll showed 80% of the Crimean population wanted to join Russia. He said he had not made any decision until it was "clear what the mood of the people was".
Russia, the US, Ukraine and the EU are to hold talks in Geneva next Thursday to try to resolve the impasse, EU diplomats have said.
They will be the first four-way talks since the crisis began.
Russian Foreign Minister Sergei Lavrov told US Secretary of State John Kerry by telephone on Wednesday that the meeting should focus on fostering dialogue among Ukrainians and not on bilateral relations among the participants.
In another development, the Kremlin announced that President Putin had sacked 14 generals. They were sacked from the emergencies ministry and prison service, as well as regional branches of the interior ministry and the Investigative Committee (Russia's equivalent of the FBI).
It was not immediately clear if the move was a routine step. Russia has some 800 generals in its army alone.
BBC map of cities in eastern Ukraine

Thursday, April 10, 2014

Bloomberg News - Greek Bond Sale Said to Top $4 Billion in Market Return

Photographer: Angelos Tzortzinis/Bloomberg
A Greek national flag flies above the national parliament building in Athens. The Greek government had been shut out of bond markets since March 2010 and kept afloat with bailouts totaling 240 billion euros from the euro area and the IMF
Greece is ending a four-year exile from international markets with a bond sale of 3 billion euros ($4.2 billion), more than the government estimated, according to a person familiar with the matter.
The order book for the issue, which carries a coupon of 4.75 percent, exceeded 20 billion euros, said the person, who asked not to be identified because he isn’t authorized to speak about it. A Greek government official told reporters in Athens yesterday that Greece sought to raise 2.5 billion euros in the five-year bond issue.
“Greece returns to the bond markets under the same or even better terms than Ireland and Portugal,” Greek Deputy Prime Minister Evangelos Venizelos told reporters in Athens today after meeting with Prime Minister Antonis Samaras.
Greece, which has been bailed out twice, carried out the world’s biggest sovereign-debt restructuring and teetered on the brink of exiting the euro, had been shut out of bond markets since March 2010 and kept afloat with aid totaling 240 billion euros from the euro area and theInternational Monetary Fund.
Those funds necessitated the regular presence in Athens of officials from the so-called troika of the European Commission, the European Central Bank and the IMF, which became associated with austerity measures that triggered a political and social backlash.

‘Important Milestone’

“We welcome this,” Poul Thomsen, the IMF’s mission chief to Greece, said yesterday. “It’s a fundamental objective of the program to bring Greece back to market and this is an important milestone in this regard, and that clearly speaks to the success of the program.”
The yield on Greek 10-year bonds climbed three basis points, or 0.03 percentage point, to 5.92 percent at 11:10 a.m. London time. The rate fell 27 basis points yesterday, and touched 5.80 percent, the least since February 2010.
Greek securities returned 33 percent in the year through yesterday, the most among sovereign-debt markets tracked by the Bloomberg World Bond Indexes.
A car bomb exploded outside one of the Bank of Greece’s offices in central Athens this morning as a reminder of the upheaval that continues to rock the country almost four years after it resorted to calling for outside aid. Police said no one was injured in the bombing.

Some Damage

Protests, strikes and even bombings have been regular occurrences in Greece since then. Today’s device exploded at about 6 a.m. outside a building belonging to the Bank of Greece, causing some damage to surrounding buildings, a police spokeswoman said by phone.
Greece won approval this month from euro-area members for an 8.3 billion-euro aid payment, the first disbursement from its bailout program since December. The government and European Union predict that the Greek economy will expand 0.6 percent in 2014 after six consecutive years of contraction that has cost about a quarter of the nation’s economic output and sent theunemployment rate surging.
“The real economy is showing encouraging signs of recovery,” Greek Finance Minister Yannis Stournaras said at a conference in Athens today.
Greece’s unemployment rate dropped to 26.7% in January from 27.2% in the previous month, according to data today from the Athens-based Hellenic Statistical Authority.
The country still faces challenges including deflation. Consumer prices calculated using a harmonized EU method dropped 1.5 percent in March from a year earlier, the 13th straight decline. Non-performing loans ballooned to 31.7 percent of total lending at the end of 2013, according to data provided by the Bank of Greece.
To contact the reporters on this story: Marcus Bensasson in Athens; Hannah Benjamin in London at

Wednesday, April 9, 2014

Reuters News - G20 to focus on boosting global growth, not Crimea: official

International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at a news conference during the G20 Central Bank Governors and Finance Ministers annual meeting in Sydney, February 23, 2014. REUTERS/Jason Reed
International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at a news conference during the G20 Central Bank Governors and Finance Ministers annual meeting in Sydney, February 23, 2014.
(Reuters) - Global financial leaders will thrash out details of individual country pledges to boost growth and overhaul their economies at this week's meetings in Washington, a senior Australian official said on Tuesday.
Group of 20 countries promised at their last meeting in Sydney in February to lift global output by an extra 2 percent over five years, with individual action plans due later this year.
Although geopolitical risks stemming from the crisis in Ukraine were also on the table, growth would take center stage, Australia's G20 Finance Deputy Barry Sterland said in a telephone interview.
"To build momentum on those growth strategies is really a key goal for this meeting," he said. "A big focus of this meeting is going to be building on that growth ambition, discussing the sorts of measures that are needed to meet the Sydney growth goal."
Australia chairs the bloc of advanced and developing economies this year and has asked for firm plans to address gaps in each country's policy settings in the second half of 2014.
According to a document prepared for the G20 by European Union finance ministers, reform drafts so far have fallen short and more ambitious work is needed in areas including investment, employment and competition.
The International Monetary Fund forecast global growth at 3.6 percent this year while warning of geopolitical risks amid a tug of war between Russia and Western countries over Ukraine.
Russia, also a G20 member, has been hit with EU and U.S. sanctions over its annexation of Ukraine's Crimea region.
G20 officials have said they expect the group's communiqué, to be issued after Friday's meeting, will not specifically mention the crisis in Ukraine.
Sterland said there would be a discussion of the "full range" of geopolitical risks, but noted that Ukraine had already been an issue at the last G20 just six weeks earlier, and there was no plan for joint action against Russia.
"That sort of theme would not be on the agenda for this meeting," Sterland said.
Australia's Foreign Minister Julie Bishop has said it depends on G20 member countries whether Russia is invited to the G20 leaders' summit this year.
At Friday's meeting, emerging markets are again expected to raise concerns about spillover effects from central banks normalizing policy in advanced economies, a worry which featured prominently at the Sydney meetings.
The U.S. Federal Reserve is on track to wind up bond purchases by the end of this year as the U.S. economy recovers, although the European Central Bank is under pressure to do more to support growth.
The G20's February communiqué said that the timing of monetary policy withdrawal should be conditional on the outlook for price stability as well as growth - sounding a note of caution given the euro zone's extremely low inflation.
"Those comments in Sydney seem to remain appropriate. We are taking an approach to keep the communiqués relatively tight," Sterland said.
The ECB has so far resisted calls from the IMF to ease monetary policy further although it said last week it was ready to start asset purchases, also known as quantitative easing, if inflation proved persistently low.
A German government official said Germany planned to tell the IMF and G20 partners it sees no deflation tendencies in Europe, noting instead that low inflation came from lower energy prices and moderate wage hikes.

(Reporting by Krista Hughes in Washington and Cecile Lefort in Sydney; Additional reporting by Jan Strupczewski in Brussels, Lidia Kelly in Moscow and Gernot Heller in Berlin; Editing by Lisa Shumaker)