Tuesday, March 31, 2015
Friday, March 27, 2015
Thursday, March 26, 2015
Wednesday, March 25, 2015
(Reuters) - Greece risks running out of cash by April 20 unless it secures fresh aid, a source familiar with the matter told Reuters on Tuesday, leaving it little time to convince skeptical creditors it is committed to economic reform.
After talks with EU leaders including German Chancellor Angela Merkel in the past week, Athens said it will present a package of reforms to its euro zone partners by Monday in the hope of unlocking aid and avoiding a messy default.
"It will be done at the latest by Monday," government spokesman Gabriel Sakellaridis told Mega TV.
Merkel did not reveal details from her meetings with Greek Prime Minister Alexis Tsipras, but she did tell members of her conservative party at a closed-door meeting in parliament on Tuesday that Greece needs to work with the European Central Bank, the International Monetary Fund and the European Commission to unlock the cash injection it needs.
"Time is short," she said, according to party allies.
Comments from the German foreign minister and the chairman of euro zone finance ministers suggested slightly more optimism among Greece's partners that it may be moving closer to meeting the conditions needed to receive more cash.
"That process is moving once again, I say with some cautious satisfaction. Now there's hard work happening on complementary additions to the (reform) list," said Eurogroup chairman Jeroen Dijsselbloem, who is also Dutch finance minister.
"That they’re all but broke, we knew already," he told RTL Nieuws television. "But my message to the Greeks is then every time again: So then, work with us as quickly as possible on an adjustment to the program."
Athens is hoping the finance ministers will approve its list and allow the return of about 1.9 billion euros ($2.1 billion) in profits made by the European Central Bank on Greek bonds, the source familiar with the matter said.
The source said Athens also expected the return of about 1.2 billion euros in cash left in the Greek bank bailout fund that was taken back by the euro zone last month - something euro zone officials said the euro zone bailout fund would discuss on Wednesday.
Greece argues that its own bank rescue fund should have returned only 9.7 billion euros to the euro zone rather than 10.9 billion euros, since it had used its own cash reserve rather than EFSF bonds to make that recapitalization.
Greek officials have not gone into detail about the latest reform list. Sakillarides said only that it would not contain recessionary measures but structural changes.
The reforms are deeply sensitive for Tsipras, who came to power in January pledging to end austerity policies but was forced to accept an extension to a hated bailout program under the threat of a banking collapse.
Greece has received two bailouts totaling 240 billion euros since 2010 but its economy has shrunk by 25 percent partly due to austerity measures imposed by the lenders. One in four Greeks is out of work, and more than half of all young people.
Tsipras discussed the reforms with Merkel in Berlin on Monday. Sakellaridis said that in a four-hour working dinner they discussed only the outline without going into depth.
Both leaders voiced mutual goodwill during a visit that appeared to have cleared the air after weeks of public acrimony between Athens and Berlin.
German Foreign Minister Frank-Walter Steinmeier said after meeting Tsipras on Tuesday that an improved climate between the two countries would help start serious negotiations for a solution to Greece's debt problems.
The politician told reporters this alone would not solve Greece's financial problems, but it was "no doubt a precondition to begin serious talks in the coming days".
Greek financial markets rallied. The two-year bond yield fell nearly 2 percentage points on the day to below 20 percent.
A spokesman for the European Financial Stability Facility bailout fund said Dijsselbloem had asked the agency to review the Greek case for the cash refund, and had also asked the Eurogroup Working Group to work on the issue.
The move appeared to be a gesture of encouragement to Tsipras after euro zone ministers previously said Athens would get no more money until its reforms were approved by the Eurogroup and implemented to the satisfaction of the creditors.
The source familiar with the government's cash position said Athens had lately relied on repo transactions - where it borrows money from state entities - to cover its cash crunch, but could continue to rely on that only for a few more weeks.
"Although it will be hard, the country can make it without help until about April 20, using the short-term borrowing from public entities," the source said.
Tuesday, March 24, 2015
Monday, March 23, 2015
Friday, March 20, 2015
Companies that aid tax evasion will face penalties as part of plans announced by the Chief Secretary to the Treasury, Danny Alexander.
There will be a new criminal offence for firms that aid economic crime.
In addition, tax investigation authorities will no longer have to prove "intent to evade tax" to prosecute offenders.
Mr Alexander called for a corporate tax evasion crackdown in February.
BBC business editor Kamal Ahmed said that "the difficulty of proving intent has been one of the major reasons for tax evasion cases collapsing".
Mr Alexander said: "For too long, our tax system struggled with the fact that a small minority felt it perfectly OK to indulge in tax avoidance and commit the crime of tax evasion.
"The public will not tolerate being stolen from any more."
For offshore evaders there will be a "strict liability" criminal offence, he said.
"Strict liability will bring and end to the defence of 'I knew nothing, it was my accountant, my lord'," he said.
The government will also introduce a new offence of corporate failure to prevent tax evasion and of making tax evasion possible.
"No longer should any organisation be able to get away with facilitating or abetting others to evade tax," he said.
Companies which allow their employees to help others evade tax will be treated as accomplices, he added.
Financial penalties for offshore evaders will be increased and linked to underlying assets.
"A billionaire evading £5m of tax won't just be liable for that £5m," he said.
There will also be a new civil offence, so that those who help evaders will have to pay fines that match the amount of tax being dodged.
"If you help someone evade £1m of tax, you risk a penalty of £1m or even more yourself," he said.
Tax authority HMRC will also be given new powers to name and shame offenders, he added.
Labour's shadow chief secretary to the Treasury, Christopher Leslie, said the government had not made it clear how these plans would be put into practice.
"Are these genuinely new powers to tackle tax evasion, or just a series of press releases to give the impression of activity?" he said.
'Prudent to wait'
Professional accountancy body the ICAEW said the public was "rightly concerned about tax evasion", but that the government should wait for relatively recent rules to take effect before bringing in new laws.
"Over the last few years, the government has introduced measures to reduce evasion and aggressive avoidance," said Frank Haskew, head of the ICAEW tax faculty.
"It would be more prudent to see the effect these have first before introducing the raft of new laws that they have proposed," he added.
Tax professional body the Chartered Institute of Taxation (CIOT) said that while tax evasion is a serious crime, the government's proposal that intent to evade tax will not be necessary for a conviction could net innocent people.
"UK and international taxation is a minefield of complexity and, while some taxpayers do actively seek to hide their income by intentionally failing to declare it, there are others who simply make mistakes in their financial affairs without intending to act wrongly," said CIOT tax policy director Patrick Stevens.
"A taxpayer may fall within the ambit of the offence without any intention or knowledge on their part."
Thursday, March 19, 2015
(Reuters) - The Federal Reserve on Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signaling it is in no rush to push borrowing costs to more normal levels.
The U.S. central bank removed a reference to being "patient" on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery.
Fed officials also slashed their median estimate for the federal funds rate - the key overnight lending rate - to 0.625 percent for the end of 2015 from the 1.125 percent estimate in December.
The cut to the so-called "dot plot," together with other economic concerns cited by the Fed, sent a more dovish message than investors were expecting, and pushed market bets on the central bank's rate "lift-off" from mid-year to the fall.
"Just because we removed the word 'patient' from the statement doesn't mean we're going to be impatient," Fed Chair Janet Yellen said in a press conference after Wednesday's statement.
Stocks on Wall Street surged and oil prices jumped as much as 5 percent after the Fed statement. The dollar tumbled against other major currencies and the U.S. 10-year Treasury yield dipped below 2 percent for the first time since March 2.
In its quarterly summary of economic projections, the Fed cut its inflation outlook for 2015 and reduced expected U.S. economic growth. The policy statement repeated its concern that inflation measures were running below expectations, weighed down in part by falling energy prices.
"I just don't see any price or wage pressure out there," said Craig Dismuke, chief economist for Vining Sparks. "June is not off the table but it's unlikely. September is the most likely time for the first rate hike. They might get one hike in this year, maybe two."
The Fed noted that a rate increase remained "unlikely" at its April meeting and said its change in rate guidance did not mean it has decided on the timing for a rate hike. Yellen told reporters that a June move could not be ruled out.
The Fed statement, however, allowed enough flexibility for the central bank to move later in the year, stressing that any decision would depend on incoming data.
"The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium-term," the Fed said.
It had previously said it would be patient in considering when to bring monetary policy back to normal.
Goldman Sachs economist Jan Hatzius said in a research note that the Fed's statement and projections suggested a hike in September rather than June, citing the "dot plot" shift and changes to the central bank's assessment of the economy.
Yellen has kept rates at near zero since taking over as head of the central bank in February, 2014, though she has also overseen a steady whittling of loose money promises.
And while she lays the ground for "lift-off," the Fed continues to grapple with muddy economic data: strong job creation, continued growth, and healthy consumer demand in the United States, but a global collapse in oil prices and a rapid run-up in the dollar that could mean the Fed remains far from its 2 percent inflation target.
The Fed on Wednesday downgraded its view of economic activity, saying growth has "moderated somewhat," a departure from its view in December, when it cited economic activity expanding at a solid pace.
Economists and investors were watching closely for the Fed to drop "patient" from its rate guidance language, as a sign that the central bank will shift toward making rate decisions on a meeting-by-meeting basis.
"Let me emphasize again, that today's modification of the forward guidance should not be read as indicating that the committee has decided on the timing of the initial increase in the target range for the federal funds rate," Yellen said in the press conference.
"In particular, this change does not mean that an increase will necessarily occur in June. Although we can't rule that out."
The federal funds rate has been at its low point since December of 2008. The last time the Fed raised rates was in June 2006, when a roaring housing market and strong economic growth prompted it to push its target rate to 5.25 percent.
There were no dissents on the Fed statement.