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The Telegraph – Debt crisis and Greek bond swap: live

March 9, 2012 in PLF News

By Martin Strydom

The Greek government says 85.8pc of bondholders have accepted bond swap offer, moving the country closer to another much-needed bail-out, and this will rise to 95.7pc with the use of collective action clauses to enforce the deal.

Latest

08.00 FTSE 100 opens down 2 points – or 0.05pc – to 5856.72

07.40 Stefanos Manos, a former Greek minister, told Bloomberg TV why the debt swap is good for Greece, but maybe not the EU:

QuoteGreece faces fewer interest payments. We got a reprieve. Whether it is good for Europe I have my doubts.

While Greek Government spokesman Pantelis Kapsis said the result was a “vote of confidence” in Greece’s ability to carry out deep structural reforms to its stricken economy.

QuoteI think it’s a historic moment.

07.35 The yield on Italian and Spanish 10-year bonds have dipped after the bond swap as contagion fears recede. The yields are now 4.75pc and 4.98p.

It looks like the debt deal has been priced in.

07.30 Greece may have avoided a messy default but many commentators remain worried about its prospects. Some are sceptical of the assumption used to calculated the benefits for Greek debts from thebond swap. The economy has weakened further since then and youth unemployment is now above 51pc.

Michael Kemmer, general manager of German bank association BdB, told Bloomberg:

QuoteWe can’t think that Greece is saved and the crisis is over. This is an important step – the private sector showed solidarity. That’s good, but the work has only just begun.

Despite all the justified happiness about this issue we have to note that Greece is only buying time with this and has to do its homework and pursue budget consolidation, savings and its privatisation programme.

07.20 Fears of a CDS payout has triggered selling of the euro. We’ll know more later today:

07.00 Asian markets rose, with Tokyo’s Nikkei rising 1.65pc to close at it highest level in more than seven months on optimism over a Greek debt deal. At one stage it rose above 10,000 mark for the first time since August 1.

Hong Kong’s Hang Seng rose 0,9pc, South Korea’s Kospi gained 0.88pc, and Australia’s S&P/ASX 200 added 1pc.

Markets on the Continent are expected to extend yeterday’s gains when they open in around a hour’s time. Although financial spread-betters say the FTSE 100 could open around 3-4 points, or 0.1pc, lower, pausing for a breath after strong gains in the previous session as investors seek direction from US jobs data this afternoon.

06.45 The French finance minister says the bond swap is good nes and avoids default risk.

Reuters reports that Francois Baroin told RTL radio:

QuoteIt’s good news, its a good success. It’s something that allows us to stay on a voluntary basis that avoids the risk of default.

He said he also had confidence in the Spanish government’s ability to resolve its large deficit pile.

06.40 The euro fell against the before the announcement and then picked up:

Euro edges higher after the news the 85.8pc of bondholders accepted the bond swap. Graph: Bloomberg

06.30 Here’s a flavour of how those in the market view the deal:

NG KIAN TECK, SIAS RESEARCH, SINGAPORE

QuoteThe question now is what will happen to all the credit default swaps in the market. This is what people want to know – is this considered a default, and if it is, who are the winners and losers? We don’t know who the losers are now and they can be quite a substantial amount because the CDS float is not small.”

YUJI SAITO, CREDIT AGRICOLE, TOKYO

QuoteThe headlines from Greece are within expectations and the market reaction (euro selling) is a classic case of buy the rumour, sell the fact.

SURESH KUMAR RAMANATHAN, CIMB INVESTMENT BANK, KUALA LUMPUR

QuoteWe have been warning for the past 2 months that Greece will collapse and that collapse is beginning to play out currently. If ISDA sees the activation of CACs as a credit event, then we have an official sign of a default in Greece. For markets, it will be vital to gauge how much of CDS will be triggered following the activation of CACs. We are likely to see some synchronization of equities, cross currency swap basis in EUR/USD and peripheral bonds and CDS all facing a sell off.

06.22 Josef Ackerman, the respected German banker and chairman of the Institute of International Finance, which helped broker the bond swap for private investors, said the debt deal will help contribute to restroring stability in the eurozone, Bloomberg reports. It quotes him saying:

QuoteThe very strong and positive result provides a major opportunity now for Greece to move ahead with its economic reform program, while strengthening the euro area’s ability to create an economic environment of stability and growth.

The successful completion of the debt exchange will contribute meaningfully to facilitating the official financing for Greece and help Greece to carry out necessary reforms to set the basis for economic recovery. These are important steps towards resolving the Greek debt crisis, addressing the overall fiscal and sovereign debt problems in the euro area, and restoring financial stability, which is essential to foster economic growth and job creation.

06.20 Greek Finance Minister Evangelos Venizelos, calling the swap an “historic event”, in extending its offer to private creditiors holding bonds not governed by Greek law to March 23, warned:

QuoteThere will be no further opportunity for creditors holding those instruments to benefit from the package of ESFS notes, co-financing and GDP linked securities, which formed an important and intergral part of our invitations.

06.15 If a credit event is declared it will create even more uncertainty.

06.10 The Greeks may be happy, but its now universal.

06.09 The International Swaps and Derivatives Association will now meet at 1pm today to decide it the use of Collective Action Clauses constitutes a credit event. If it decides whether Greece has officially defaulted CDSs – insurance against default – will be triggered.

Philip Shaw, economist at Investec, says:

OpinionThe use of the CACs would make it more difficult to argue that this is not a credit event, thereby triggering a CDS payout. However this is not necessarily the catastrophe that many fear. The net exposure to Greek CDSs is relatively small at $3.2bn and one could argue that making sovereign debt insurable after all, could be a positive development.

06.05 The deadline for acceptance of the offer for bonds governed by international law and for state-guaranteed bonds issued by public companies has been extended to March 23.

06.03 Participation in the bond swap will rise to 95.7pc after Greece triggers Collective Action Clauses on those who did not accept to offer, which will forces investors to take loss of as much as 74pc..

06.02 Greece says €172bn of bond were tendered in bond swap. Greece says 69pc of non-Greek bond holders participated and the country says it has received tenders for €152bn under Greek law.

06.00 Breaking …

The Greek government says 85.8pc of bondholders have accepted bond swap offer

05.59 For a bit of background on the Greek debt swap before we get the results it’s worth looking at Louise Armitstead’s story, Greece in last ditch scramble to avoid default.

05.58 Good morning and welcome back to our live coverage of the eurozone debt crisis. The main story today will be the Greek debt swap, with news expected soon on how many investors willingly agreed to take a haircut before the 8pm deadline last night. We’re expecting preliminary results any minute now, as well as a press conference from Evangelos Venizelos in Athens at 11am GMT.

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The Star – Study and the city

February 21, 2012 in Articles, Spotlight

*Photo from guardian.co.uk

February 19, 2012 | By KAREN CHAPMAN

Kuala Lumpur made it to the top 50 of the best global student cities to live in out of 96 eligible locations.

THE mere mention of the word rankings in Malaysia often elicits all kinds of responses from positive and negative feedback to lackadaisical ones. But love or hate them, they cannot be ignored as rankings are an inevitable aspect of today’s higher education scene in most parts of the world and provide a useful basis for comparison.

This time however it was not Malaysian public universities that were being ranked but the city of Kuala Lumpur (KL) itself as a destination for tertiary students.

Malaysia’s capital city is ranked 44th in the inaugural QS Best Student Cities Rankings 2012 released on Thursday.

QS Quacquarelli Symonds Ltd Intelligence Unit head Ben Sowter explains that this new rankings is a new way for prospective students to compare the advantages and disadvantages of the world’s leading study destinations.

“For students, deciding where to study is about more than just choosing the most prestigious university.

“By measuring cities across criteria such as affordability, quality of living and employer reputation, we are able to provide them with a fresh perspective that, used in tandem with other information sources including our QS World University Rankings, will help them make more informed decisions about where and what to study,” he says.

QS also produces the annual QS World University Rankings.

Sowter explains that to be eligible for inclusion in the rankings, cities must have at least two internationally ranked universities, and a population of 250,000.

“A total of 96 cities in the world qualify on this basis, of which we have ranked the top 50,” he adds.

Singapore, at 12th spot, ranked highest among Asian cities. This is followed by Hong Kong and Tokyo (tied at 19), Seoul (23), Beijing (28) Taipei (34), Shanghai (39) and Kyoto (43). Bangkok is ranked 49.

In the global list, Paris tops the rest with London in second spot and Boston third. (see table)

The mechanics

Asked why QS decided to introduce these new rankings, Sowter explains that there is much interest in the World University Rankings and its website, topuniversities.com received over 12 million unique visitors in 2011.

“We regard this as a clear reflection of the demand for the kind of information we produce. We regularly interact and engage with thousands of students around the world through the recruitment fairs we organise each year, our website and social media platforms such as Facebook and Twitter.

“From the feedback that we have received, it is clear that there is a great demand for comparative information that addresses the student experience in a broader way than is possible in a ranking of institutions, such as the QS World University Rankings,” he adds.

Although student views and comments do not form a part of the methodology for the ranking, Sowter says students are encouraged to provide feedback on what makes a great student city from their point of view in their interactions through the various QS platforms.

Any suggestions that are feasible from a data collection point of view may be discussed among the QS Academic Advisory Board when the methodology for the 2013 ranking is reviewed.

The Best Student Cities Rankings methodology comprises 12 criteria, which are divided into five categories, each carrying a weighting of 20%. These categories are rankings, student mix, quality of living, employer reputation and affordability.

KL scores moderately well across four of the five categories, namely rankings, student mix, quality of living and employer reputation.

“However, KL has a very high score for affordability, with Mexico City the only city in the top 50 ranking higher in this criterion. It is this score driven by comparatively low living costs and affordable tuition fees for international students that helps it rank in the global top 50, as well as being one of the top 10 cities in Asia,” explains Sowter.

Universiti Malaya vice-chancellor Prof Tan Sri Dr Ghauth Jasmon says the cosmopolitan nature of KL with its rich mix of culture, race, food and entertainment would have helped place it in the top 50.

“The good quality of education in Malaysia at fairly modest cost would help too. This positive news will in turn bring huge benefits to academic institutions in KL,” he shares.

Higher Education Minister Datuk Seri Mohamed Khaled also welcomed the good news.

Based on his discussions with international students at the institution’s campus, Taylor’s University vice-chancellor Prof Datuk Dr Hassan Said says KL has many positive points including the lower cost of living and Malaysia’s easy accessibility.

“However, I do have some reservations over the instruments and parameters used to measure the rankings and feel that KL should have been placed higher,” he says.

Concurring with Prof Hassan, Sunway Education Group executive director Elizabeth Lee feels KL should have been ranked much higher.

“We have a mature and robust quality system thanks to the Malaysian Quality Framework in place, in comparison to some of our neighbours. English is also widely spoken here.

“Malaysian institutions are veterans in providing off-shore programmes and international education through innovative collaborative partnerships, being the first to pioneer the concept of twinning and have many foreign branch campuses of renowned universities in the country,” she explains.

There is, she adds, plenty of choice available from the relatively more matured private education sector here as well as the more affordable cost of living in KL compared to those ranked ahead.

Explaining further on the methodology, Sowter says the category on rankings measures the number and quality of universities in each city by looking at their performance in the QS World University Rankings.

The indicators have been designed to take into account the variety of internationally recognised universities found in large cities, as well as lending recognition to the locations of the world’s elite institutions.

“As for student mix, this category is designed to look at the student make-up of the city, both overall and from an international perspective.

“Cities with higher proportions of students are likely to be better equipped with the facilities they need, while those with high numbers of international students are more likely to have the facilities to welcome more,” he explains.

The quality of living is based on the results of the Mercer Quality of Living Survey 2011, which ranks the top 50 cities based on 10 criteria inlcuding the political and social environment, economic environment, health and sanitation, recreation, consumer goods and housing.

The employer reputation category measures the reputation of a city’s graduates among graduate employers, using the results of the QS Global Recruiter Survey 2011.

“Employers were asked to identify the universities from which they prefer to recruit graduates. The results are based on over 18,000 responses worldwide,” he says.

Affordability is based on costs associated with a university degree rise, he says, adding that it is one of the key issues for prospective students, particularly those who are considering studying abroad.

This category is subsequently divided into three sections to cover three key areas of student expenditure, namely tuition fees, retail costs and living costs.

Sowter says the research confirms that as well as having internationally competitive universities, Asia’s leading student cities also offer world-class study environments.

“The three top-ranked Asian cities are now major centres for international study and graduate employment,” he adds.

For more information, visit 
www.topuniversities.com

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BBC – ‘Europe is poor so should live within its means’

February 8, 2012 in Articles, Speeches, Spotlight, Tun Dr. Mahathir

February 7, 2012 | By Justin Rowlatt

For decades the West has lectured the East on how to manage its economies. Not any more.

Now the emerging economies of Asia look like models of steady, consistent policy and sustained growth while Europe, America and Japan are mired in debt and are growing achingly slowly, if at all.

So what can the West learn from the East?

According to former Malaysian Prime Minister Mahathir Mohamad, the message is simple but devastating: Europe must face up to the new economic reality.

“Europe… has lost a lot of money and therefore you must be poor now relative to the past,” he reasons in an interview with BBC World Service’s Business Daily.

“And in Asia we live within our means. So when we are poor, we live as poor people. I think that is a lesson that Europe can learn from Asia.”

State of denial

Dr Mahathir is well qualified to pass judgement.

If any Asian leader can make claim to having laid the groundwork for his country’s economic expansion, it is he.

During his two decades in power, Dr Mahathir helped transform Malaysia from a sleepy former colony into an economic tiger.

But his advice will not make happy reading in the capitals of Europe.

Dr Mahathir believes European leaders are in a state of denial.

“You refuse to acknowledge you have lost money and therefore you are poor,” he says.

“And you can’t remedy that by printing money. Money is not something you just print. It must be backed by something, either good economy or gold.”

Dr Mahathir may be 86 years old, but he still holds very strong views.

In particular, he believes Europe and the West must begin the long slow process of restructuring their economies to reduce their dependence on the financial sector.

“I think you should go back to doing what I call real business – producing goods, providing services, trading – not just moving figures in bank books, which is what you are doing.”

His big bugbear is still currency trading, which he believes did huge damage to the Malaysian economy during the financial crisis that hit Asia in the late 1990s.

“Currency is not a commodity”, he says.

“You sell coffee. Coffee… can be ground and made into a cup of coffee.

“But currency, you cannot grind it and make it into anything. It is just figures in the books of the banks and you can trade with figures in the books of banks only.

“There must be something solid to trade, then you can legitimately make money.”

Tough message

But even if Europe takes his advice, Dr Mahathir believes there will be no quick return to economic health.

“To recover your wealth you have to work over many years to rebuild your capacities, to produce goods and services to sell to the world, to compete with the eastern countries,” he says.

European workers are overpaid and unproductive, Dr Mahathir believes.

“I think you have paid your workers far too much money for much less work,” he says.

“So you cannot expect to live at this level of wealth when you are not producing anything that is marketable.”

His message is tough, he acknowledges, before adding with a laugh: “We used to get tough messages from you before, remember?”

“And now, what is the result? Sometimes you undermined our currency and we became very poor. Well, we learn from each other. We were Euro-centric before. I think it should be a little bit Asia-centric now.”

A tough message indeed.

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NYT – European Leaders Agree to New Budget Discipline Measures

January 31, 2012 in Articles, Spotlight

President Nicolas Sarkozy of France, Chancellor Angela Merkel of Germany and Italian Prime Minister Mario Monti in Brussels

January 30, 2012 | By  and 

BRUSSELS — All but two European Union countries agreed Monday to new and tougher measures to enforce budget discipline in the euro zone, but the bloc still showed few signs of producing a comprehensive solution for the sovereign debt crisis or a credible plan to revive fragile economies across Europe’s weakened Mediterranean tier.

The meeting of 27 European Union heads of state and government here in Brussels was aimed at completing the text of a so-called fiscal compact for the 17 nations relying on or intending to join the euro zone — with only Britain and the Czech Republic opting not to adopt the measures.

After a meeting lasting seven hours, the leaders also issued a declaration calling for a new push to restart growth and combat joblessness across the Continent.

But a number of politicians and analysts said the pledge by the European leaders to create new jobs was mostly empty, and others complained that the proposed rules to keep deficits under control contained little to actually help nations with high borrowing costs.

The summit declaration also skirted the continuing problems in Greece, where a second bailout is being held up by the inability of the government in Athens to complete a deal with private holders of Greek bonds over the losses they should accept.

Until Athens and its private-sector creditors can agree on a $132 billion writedown on Greek government debt, the International Monetary Fund and the European Union are not prepared to sign off on a further bailout. Chancellor Angela Merkel of Germany said the Greek situation would not be addressed until after representatives of Greece’s so-called troika of creditors — the European Union, the I.M.F. and the European Central Bank — report back on their investigation into what will be needed for Greece to manage its finances on its own.

Nicolas Sarkozy, the French president, told a news conference at the end of the summit that there would be a “definitive agreement” on the private sector’s involvement in reducing Greek debt in coming days. After Monday night’s summit meeting, informal talks continued between the Greek prime minister, Lucas Papademos, and European officials.

Despite the various other problems to deal with, an agreement on the fiscal compact could clear the way for Germany to accept stronger efforts by the European Central Bank to support ailing countries and a more comprehensive bailout fund aimed at protecting Italy and Spain against the risk of default.

“It is an important step forward to a stability union,” Mrs. Merkel told reporters. “For those looking at the union and the euro from the outside, it is a very important to show this commitment.” Britain, which clashed openly with France and Germany last month over the pact, did not give any ground Monday and was joined by the Czech Republic, which also elected to stay outside.

“We are not signing this treaty,” David Cameron, the British prime minister, said. “We are not ratifying it. And it places no obligations” on the United Kingdom, he said.

He added: “Our national interest is that these countries get on and sort out the mess that is the euro.”

Mr. Sarkozy sounded philosophical about the Britons’ intransigence. “There are different degrees of integration and everyone is free to choose where they stand,” he said.

While European leaders agreed to bring a permanent bailout fund into existence earlier than previously foreseen, they postponed any final decisions on its ultimate size and how it will be financed. The International Monetary Fund has been pressing Europe to commit enough money to provide a credible backstop that would insure that Italy and Spain could pay their bills and continue to finance their debts.

Germany backed away from a suggestion that it wanted the government in Athens to cede temporarily control over tax and spending decisions to a new, all-powerful, budget commissioner before it can secure further bailouts. Italy won its battle to restrict the scope of the fiscal compact, which calls for making it easier to impose sanctions against countries that break European Union budget rules. The text said the compact would make it harder to block sanctions against countries that exceed annual deficit targets but that the same tough system would not apply to nations with excessive overall debt, like Italy.

The compact will come into force in those nations that agree to its terms once 12 euro zone nations have ratified it. That would prevent the project being held up if one or two nations hold referendums on the deal.

Still, impatience with the German focus on belt-tightening loomed large over the summit meeting.

“You don’t have to be an economics professor to know that if you have zero growth you are not going to sort things out,” said Martin Schulz, the president of the European Parliament. Critics of austerity point to Greece, which is being strangled by a vicious cycle of deficit cutting, declining tax revenues and more budget cutting, while making little if any progress on its overall budget deficit.

Guy Verhofstadt, leader of the centrist liberal and democrat group, and a former prime minister of Belgium, took a similar stand.

“The new agreement consolidates fiscal discipline but omits completely to address the other side of the coin — that of solidarity and investment that will create jobs and growth,” Mr. Verhofstadt said. “E.U. leaders should act instead of producing more paper.”

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The Guardian – David Cameron calls for reform of European court of human rights

January 25, 2012 in Articles

David Cameron

David Cameron is expected to say the court has a 'once-in-a-generation' opportunity to reform its work. Photograph: Christopher Furlong/PA

Wednesday 25 January 2012 | By , chief political correspondent

Prime minister to accuse court of unnecessarily overturning judgments reached in credible national courts

David Cameron is to warn that the European court of human rights is in danger of turning into a “small claims court” that fails to deal with serious violations of human rights, unless it embarks on reforms.

Amid anger in Britain at last week’s decision of the court to block the deportation of the Islamist cleric Abu Qatada to Jordan, the prime minister will on Wednesday accuse the court of undermining its reputation by unnecessarily overturning judgments reached in credible national courts.

In a speech to the parliamentary assembly of the Council of Europe in Strasbourg, Cameron will say the ECHR has a “once-in-a-generation” opportunity to reform its work to ensure it focuses on the original intentions of its founding fathers – upholding human rights across the European continent.

The court enforces the European convention on human rights, drafted in 1950 by the Council of Europe, which is designed to ensure universal human rights across Europe. The council has 47 members and is separate from the 27-strong EU.

The prime minister will say: “The court should be free to deal with the most serious violations of human rights; it should not be swamped with an endless backlog of cases. The court should ensure that the right to individual petition counts; it should not act as a small claims court. And the court should hold us all to account; it should not undermine its own reputation by going over national decisions where it does not need to. For the sake of the 800 million people the court serves, we need to reform it so that it is true to its original purpose.”

Britain, which currently holds the presidency of the Council of Europe, wants to implement the reforms by the first half of 2014, when Austria will take over the presidency.

Kenneth Clarke, the justice secretary, is to chair a meeting of fellow justice ministers in April to agree on a ministerial declaration, which will have three elements:

• Immediate steps that the court can take to reduce the backlog of cases, which now stands at 152,800. It is estimated that two-thirds of these cases are inadmissible under the court’s rules. Cameron will say that there should be new and more transparent rules for the appointment of judges on the court.

• Look at amending procedural parts of the convention to set out more clearly which cases the court should have the power to examine.

• Look at the future of the court over the next 20 years to ensure it does not become a court of fourth instance in which appellants seek a “fourth bite at the cherry” if they are unhappy with the decision of their national courts.

The UK government privately believes the court should spend less time focusing on countries such as Britain, France and Germany, which have well-regarded legal systems and a strong record on human rights, and more time focusing on countries such as Russia and Ukraine with less impressive records. Russia accounts for 26.6% of the backlog at the court. Cameron contrasts Britain’s record with other Council of Europe member states, which face cases over extrajudicial killings and torture.

The court found against Bulgaria after an inmate was forcibly placed in a psychiatric institution and held against their will for years. It found against Ukraine over the ill-treatment of prisoners in “training exercises” by special forces, and it found against Russia over the persecution of the children of Chechen dissidents.

The prime minister will make clear that the court should focus on such violations, and will say Britain has a long and exemplary record on human rights. “Human rights is a cause that runs deep in the British heart and long in British history.

“In the 13th century, Magna Carta set down specific rights for citizens, including the right to freedom from unlawful detention. “In the 17th century, the petition of right gave new authority to parliament; and the Bill of Rights set limits on the power of the monarchy. By the 18th century it was said that this spirit of liberty is so deeply implanted in our constitution, and rooted in our very soil, that a slave the moment he lands in England, falls under the protection of the laws, and with regard to all natural rights becomes instantly a freeman.

It was that same spirit that led to the abolition of slavery, that drove the battle against tyranny in two world wars and that inspired Winston Churchill to promise that the end of the ‘world struggle’ would see the enthronement of human rights.

“These beliefs have animated the British people for centuries – and they animate us today.”

Nick Clegg told the cabinet on Tuesday that he wholeheartedly supported Cameron’s campaign on the grounds that defenders of human rights should support the government as it seeks to tackle a backlog of 150,000 cases at the court. The cabinet discussion took place after Sir Nicolas Bratza, the British president of the court, criticised “senior British politicians” for pandering to tabloid newspapers over the court.

In an article in the Independent, Bratza wrote: “It is disappointing to hear senior British politicians lending their voices to criticisms more frequently heard in the popular press, often based on a misunderstanding of the court’s role and history, and of the legal issues at stake.”

The intervention by Clegg shows that Cameron has been careful to calibrate his reforms. The Liberal Democrats agreed in the coalition agreement to establish a commission to “investigate the creation of a British bill of rights that incorporates and builds on all our obligations under the European convention on human rights”. The commission has been carefully balanced to include critics and defenders of the court that enforces the convention.

Sadiq Khan, the shadow justice secretary, said: “David Cameron – instead of engaging in a positive debate about ensuring the workings of the European court on human rights are fit for purpose in these modern times – resorts to the peddling of myths that denigrate the human rights successes of the court and the convention.

“It smacks of throwing ‘red meat’ to the hungry pack of Conservative backbenches so recently emboldened by the prime minister’s waltzing away from the European negotiating table.”

© 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved.

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