European Politico-economics QA Mega-thread - Page 238

Greece hopes to conclude negotiations with international creditors by early Tuesday at the latest, a Greek official said as talks continued in Athens on a new multi-billion euro bailout designed to keep the country from financial ruin.

Greece's finance and economy ministers were locked in negotiations with representatives of creditors on Sunday, which stretched until the early hours of Monday. Greek officials have previously said they expect the bailout accord to go to the country's parliament for approval by Aug. 18.

"Efforts are being made to conclude the negotiations, the horizon is by Monday night or early Tuesday," said a Greek official who declined to be named.

"When the new bailout comes to parliament for a vote it will be one bill with two articles - one article will be the loan agreement and the MoU (memorandum of understanding) and the second article will be the prior actions," the official said, referring to measures Greece needs to take for the bailout accord to take effect.

A second official said: "From 12 midnight the two sides started the final stretch, ‎discussing the final stretch - combing through the final text, sentence by sentence, word by word."
uk.reuters.com
The negotiations began on July 20. A senior Greek finance official told Reuters the aim was for euro zone finance ministers to review the accord on Friday, Aug. 14.

Athens is negotiating with European Union institutions and the International Monetary Fund for up to 86 billion euros (£60.89 billion) in fresh loans to stave off economic collapse and stay in the euro zone.

The bailout must be in place by Aug. 20, when Greece has a repayment falling due to the European Central Bank.

One senior EU official said there had been "outstanding cooperation" from the Greek side, which was keen to have a deal in place the soonest possible.

But the official said sticking points for some member states was still the size of the overall bailout, which some wanted reduced from the up to 86 billion agreed at the euro summit last month because of the political sensitivity.

For the Greek side, Greek sources said a key source of concern was how to deal with a mountain of non-performing loans in the banking sector, a factor likely to weigh on a potential recapitalisation bill for the banks.

The Greek side wants to set up a 'bad bank' to handle this, while creditors want non performing loans bundled and sold to distressed asset funds. Non performing loans represented about 35 percent of overall loan portfolios in the first quarter of 2015, a level likely to increase during recent weeks from the imposition of capital controls.

The size of the first tranche, which is likely to be at least 20 billion euros, was also a source of some concern among lenders.

Of that figure, Greece needs a 10 billion euro buffer for bank recapitalisation, 7 billion to reimburse the bridge loan for July and more than 3 billion to pay the ECB in August.

"Until the MoU is on the table and signed, we are still cautious," the EU official said.

Mario Draghi could be forgiven for lingering a little longer on the sun lounger this August.

For the first summer since he took office as president of the European Central Bank, the region’s four biggest economies are posting growth, spurred by a weaker euro and lower oil prices that are boosting consumer spending. Fears about deflation have abated, and another year of ECB extraordinary stimulus means economic tailwinds are likely to persist.

Reports on Friday will probably show output in the 19-nation bloc expanded for a ninth quarter, with Germany, France, Italy and Spain all growing. This relatively smooth sailing stands in contrast to the summer of 2012, when Draghi said he’d do “whatever it takes” to keep the union together. A year later, his home country Italy lumbered on in its longest recession since World War II, while August 2014 marked Draghi’s shift toward quantitative easing in Jackson Hole.

“It fits in to the general picture of a gradual recovery taking shape,” said Anatoli Annenkov, a senior economist at Societe Generale in London. “Certainly for the ECB this is probably one of the first summers where they are not so actively engaged.”

Euro-area gross domestic product expanded 0.4 percent in the three months through June from the previous quarter, according to the median forecast of economists in a Bloomberg survey. That would match the pace of the first quarter.

Other key dates

August:
ECB stress tests of Greek banks begin; asset quality review to be completed by month-end.
Aug. 12: Merkel returns from 3-week vacation to host cabinet meeting, providing forum for progress on Greece to be discussed.
Aug. 12: Greece to auction 875 million euros in 13-week T-bills.
Aug. 14: Greece needs to refinance 1.4 billion euros in T-bills.
Greek government aims to submit bailout bill to parliament.
Also possible date for Eurogroup conference call on Greece if Memorandum of Understanding has been agreed.
Aug. 17 or 18: Probable date for special session of Bundestag to vote on Greek bailout.
Aug. 18-19: Greek parliament vote on bailout agreement expected.
Aug. 20: Greece needs to repay ECB 3.2 billion euros in bond redemptions; creditors may need to provide another bridge loan, depending on progress in negotiations.
Would be very surprising if program agreed in time for parliamentary ratifications and disbursement of funds to meet Aug. 20 deadline, JPMorgan economist Malcolm Barr says.
After this point, ECB’s decisions on its Emergency Liquidity Assistance program could become controversial again if likelihood of deal in doubt.

September:
Greece’s ruling Syriza party set to hold emergency congress as Prime Minister Tsipras tries to quell internal opposition; party split may force early snap elections.

October:
ECB stress tests of Greek banks to assess recapitalization due to be completed.
Royal Bank of Scotland strategist Alberto Gallo estimates 25 billion euros of European Stability Mechanism funds planned should be enough to recapitalize the four Greek banks; warns any delay in negotiations also leads to delay in recapitalization process.
First review of Greek bailout deal to assess adherence to terms.

Greece and international lenders are rushing to put the final touches on a multi-billion euro bailout deal to keep the nation in the euro zone and prevent a financial meltdown.

Here are some of the details of what Greece is required to do for up to 86 billion euros in fresh aid.

"PRIOR ACTIONS"

Greek media reported on Monday that some of the "prior actions", or measures required before bailout aid is disbursed, now under discussion include:

- scrapping tax breaks for farmers who now receive subsidised fuel

- tighter regulations on a repayment system in instalments for individuals owing back taxes to the state

- a gradual increase in a "prepaid" income tax mechanism that asks taxpayers ranging from the self-employed to small businesses to pay upfront on forecast income

- increase in a 'solidarity tax' paid by earners in the 50,000-100,000 euro annual bracket to 6 percent from 4 percent.

PASSED

Greece passed a raft of prior actions in July including:

- simplifying VAT rates and applying tax more widely

- cutting back on pensions and making the national statistics agency independent.

- measures to overhaul its civil justice system- adopting EU bank resolution and bail-in rules, applicable from Jan. 1 2016.

TO COME

Greece's bailout agreement is also expected to set a clear timetable for following measures:

- ambitious pension reform; product market reform including Sunday trading, pharmacy ownership, milk and bakeries;

privatise electricity transmission network; review collective bargaining, industrial action and collective dismissals; strengthen financial sector, including action on non-performing loans and eliminate political interference.

Greeks will also have take the following actions:

- privatisations - involving transfer of assets to an independent sovereign wealth fund in Greece designed to raise 50 billion euros, three-quarters of which would be used to recapitalise banks and to decrease debt

- cut costs of public administration and reduce political influence over it.

On August 10 2015 09:18 LegalLord wrote:

A lot of the merits of electric cars, at least in terms of environmental benefit, are an illusion. How much pollution comes from the production process for a battery? Where does the energy that powers the battery come from, and does that source pollute? Is there energy loss in transmission when using the charger? And are you comparing your data to older cars, or the newer, more efficient and less polluting models, which have substantially higher MPG and substantially lower overall emissions than old cars?

In short: I will believe that there is a viable and economical electric car when I see one. Until then, it's either unproven or a gimmick. The concept has been around for half a century, and I'm not willing to bet that it's been solved just yet, or that it can be solved with a little push.


Try living in a large (area-wise) city in the US. I definitely drive more than 80km/day on a somewhat regular basis.


You could buy a good, reliable, used luxury car for $10k - or you could buy a Tesla for triple that price. Even if it is marginally better overall, it would be a hard sell to most.


I would personally compare Google's work more to something like AT&T Bell Labs - a playground for a monopoly that has enough money to be able to pursue ideas that may or may not pan out and prove profitable. Google is pretty much a monopoly when it comes to internet advertising, and so it can afford to pursue ideas that are questionable but impressive if they do manage to work out (and Google, just like Bell Labs, has many expensive failures to its names that it can afford to just write off).


I consider success to be a proven business idea. His ideas seem more like unproven fantasies that have made him very wealthy by abusing the government and the stock market. It will, of course, be interesting to see if his ideas do pan out, and more power to him if they do. But personally, I think it's better to err on the side of caution when it comes to extravagant ideas, especially those that look suspiciously like a racket.

The Union of Concerned Scientists24 came up with a way to directly compare car emissions, regardless of the type of car it is—a metric called “miles per gallon equivalent,” or MPGghg (ghg stands for greenhouse gases).

MPGghg is how many miles per gallon a gas car would need to achieve in order to match the carbon emissions of an EV (in the EV’s case, the emissions come from the plant that makes the electricity). In other words, if an EV gets 40 MPGghg, it means it emits the exact same amount of carbon as a gas car that gets 40 MPG.

The average new gas car gets 23 MPG. Anything above 30 MPG is really good for a gas car, and anything below 15 or 17 is bad. For reference, remember that an EV running on just coal would have an MPGghg of 30 (so even in a hypothetical entirely coal-powered state, an EV would be the same as a highly efficient gas car), and an EV running on just natural gas-powered electricity would have an MPGghg of 54 and just top the Toyota Prius, which runs at 50 MPG.

On August 11 2015 22:59 MoltkeWarding wrote:


If those are the claims in the book, it is either the consequence of extremely poor research or willful polemics. Not only are the numbers wrong, it is a fundamental misattribution of Marshall's Policy Planning Staff's goals; the essential point of the Draper-Kennan economic recovery programmes were the restoration of European and Japanese economic independence, but such loans were not preferential loans; the United States already had to intervene with stopgap loans in Western Europe after the war to prevent widespread starvation and bankrupcy, a policy which was costing the United States billions per annum, quite apart from the responsibilities of the United States as an occupying power in Germany and Japan, countries in which quotas on industrial production were placed in the postwar years. The US made a great contribution in German recovery simply by fighting for liberalisation of the economic regime under occupation against the other occupying powers, particularly the French; but saying that she created the economic miracle is hyperbole.

The problem in postwar Europe was not lack of demand; the Europeans were going insolvent paying for American imports year over year ; it was their lack of productivity and self-sufficiency that was costing the Americans the burden of subsidizing European survival.

The Marshall Plan’s effects were primarily political and psychological

Like Japan however, it was the Europeans who managed the recovery of their own economies (or lack thereof, in a few cases.)