January - June 2011

Greek Parliament Approves Austerity Plan
29 June 2011 – New York Times – Rachel Donadio and Niki Kitsantonis
On Wednesday, the Greek Parliament voted for a controversial austerity package to secure necessary international aid to prevent a sovereign default in July. The vote was passed by a simple majority of 155 to 138. The approval immediately affected stock markets across Europe and Asia, with rising stocks reflecting more confidence in the Greek situation. However, internal disapproval against the austerity measures is rampant; more protests are flaring in Athens and the national unions are continuing their 48-hour general strike that began on Tuesday. The EU, IMF, and European Central Bank are expected to release approximately $17 billion in aid to Greece if all of the remaining legislation passes.
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Chinese Leader’s Visit to Germany Ends With Large Trade Deals
28 June 2011 – New York Times – Judy Dempsey
Chinese Prime Minister Wen Jiabao ended his five-day European visit by concluding trade deals worth several billion euros with Germany. The deals symbolize a new step for German-Chinese relations as China modernizes its economy and Germany seeks more buyers for its high-tech products. German Chancellor Angela Merkel stated that the trade deals represent “a new chapter.” Bilateral trade between Germany and China was 130 billion euros last year, and Chancellor Merkel said that it could increase to 200 billion euro by 2015. Other sensitive issues, such as technology transfer and intellectual property rights, were brought up during Mr. Jiabao’s visit.
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Commission to propose freezing EU’s long-term budget
27 June 2011 – EurActiv
The European Commission will formally open the debate on the EU’s next long-term budget (2014-2020) on Wednesday, June 29. The next multi-annual financial framework has sparked an enormous debate and the Commission is being bombarded with opposing demands. Many member states, such as Britain, France and Germany, are asking for the EU budget to be frozen in light of the wave of national austerity programs that are sweeping through Europe. However, EU expansion and the new Lisbon Treaty have widened the scope of the EU and necessitated additional funding. The Commission must finalize their proposals before the debate can extend to the Council of the EU and the European Parliament. A budget solution must be reached by December 2012 in order to keep the EU bureaucracy running.
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Senate To Vote On Measure To Restrict US Funds For IMF
23 June 2011 –Kristina Peterson - Dow Jones Newswires
The Senate is set to vote on a Republican amendment, led by Sen. Jim DeMint (R-S.C.), that would prevent US funds from being used in IMF bailouts. The amendment would prevent the IMF from using the credit arrangement it has with the US, totaling up to $100 billion, to support bailouts of foreign nations – rescinding a previous authorization to use the funds that was given in 2009. Losing the U.S. credit line could significantly complicate any IMF attempts to stabilize the European debt crisis. In a statement concerning the amendment, Sen. DeMint explained that “our nation is on the brink of bankruptcy and American taxpayers simply cannot afford to bail out Europe.”
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Greek cabinet approves austerity budget to aid fresh EU-IMF bailout package
23 June 2011 – AFP
A 2012-2015 austerity budget plan has been approved by the Greek cabinet, and laws have been passed to begin its implementation. The implementation of an austerity plan was a key condition for a further EU-IMF bailout aid. The new austerity program will total more than 28 billion euros by 2015, in addition to a privatisation program to raise 50 billion euros. Unions will hold a 48-hour general strike in protest of the new privatization measure. Although, these laws are important steps, the true test will be whether they go into effect in time to get the latest tranche of aid from the eurozone and keep Greece from declaring bankruptcy. Prime Minister Papandreou called for support of the austerity measures, saying that “we have a unique opportunity (to change the country). If we falter, if we lose heart and squander it…history will judge us very harshly.”
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Greek government survives vote as Barroso pushes new plan
22 June 2011 – EurActiv
The Greek government narrowly survived a confidence vote from the Greek assembly on June 21, with 155 votes to 143 and two abstentions. The vote was crucial to avoiding a sovereign default and was a necessary show of support following the new European Commission plan to boost Greek growth with EU funds. While Greek citizens protested the vote and the new austerity measures outside of the parliament, international reactions were very different – the euro made significant gains immediately after the vote passed. Now, the government must actually pass laws to implement the austerity measures before the next meeting of eurozone finance ministers on July 3 or risk losing their bailout and falling into bankruptcy.
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IMF says crisis, slow recovery key risks for Spain
21 June 2011 –Manuel Ruiz and Nigel Davies – Reuters
The IMF reported on Tuesday that Spain’s policy response to the financial crisis was good, but not enough. The Spanish economy is still at risk. In its annual mission report, the IMF stated that “there can be no let-up in the reform momentum, including further enhancing the credibility of fiscal consolidation, completing financial sector restructuring.” Spain’s Economy Minister Elena Salgado said that “we completely agree with the IMF and, in order to do this, we will see this legislature through to the end.” Since the beginning of the eurozone crisis, Spain has been closely watched over concerns that it would eventually follow other members in asking for a bailout package.
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EU Trade Chief in Washington to Foster Transatlantic Trade Ties
20 June 2011 – PR Newswire
EU Trade Commissioner Karel De Gucht is in Washington, DC for two days to meet with representatives of Obama’s administration, Congress and the business community. Commissioner De Gucht is working toward the successful conclusion of the Doha Development Agenda and more concrete results from the Transatlantic Economic Council. Two of the officials that Commissioner De Gucht is meeting with are Deputy National Security Advisor Michael Froman and US Trade Representative Ron Kirk. Following his Washington visit, Commissioner De Gucht will represent the EU at the International Central America Security Strategy Conference in Guatemala.
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Eurozone piles pressure on Greece over austerity
20 June 2011 – EurActiv
After their Sunday meeting in Luxembourg, Eurozone finance ministers decided that the first 12 billion-euro tranche of the new 120 billion-euro Greek aid package will only be released when the Greek parliament manages to pass a deeply unpopular austerity programme, which is set for a vote at the end of June. Without this additional international aid, the country is in danger of default on its debt in July as its bonds reach maturity. Conservative voices in the Greek parliament are still set against the massive changes that the austerity programme will implement in Greece, but Jean-Claude Juncker, the chairman of Sunday’s finance meeting, emphasized that “we very much depend on Greece’s parliament passing all bills…[and] we cannot make an engagement without knowing if the Greek parliament…endorses the commitments made by Greece [to the EU and IMF].”
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Greek PM fights to save government amid crisis and anger
16 June 2011 – CNN Wire Staff
Protests broke out today in Greece as a result of anger over the huge financial crisis the Mediterranean nation has found itself in. The Prime Minister’s inability to create a strong coalition against his competition has shaken Greek confidence in the government and its ability to solve the many issues the nation faces. As the number of unemployed increases, the government is attempting to develop various new policies in order to salvage the economic state of the country. 
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Hungary to Breach EU Budget Limit, Needs Further Steps, IMF Says
15 June 2011 – Andras Gergely – Bloomberg
The IMF warned that Hungary is in danger of breaching the European Union’s budget deficit limit of 3 percent next year, and must start taking more strident financial measures to reduce this risk. Analysts say that Hungary could have a budget gap of 3.3 percent of GDP. In 2008, Hungary received a 20 billion-euro bailout from the IMF and the EU, but the IMF says that “the recovery from the crisis has been modest and important vulnerabilities remain” since many of the fiscal achievements from the bailout have been “unwound” in the last year.
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IMF to rescue Greece with a 2nd multi-bn Euro bailout
15 June 2011 – The Economic Times
Greece will officially receive a second financial aid package from the EU and the IMF just a year after it received a 110 billion euro bailout; the decision was reached by the EU on Tuesday, but specifics will not be discussed until next week. Current estimates for the new bailout range between 90 and 120 billion euros. The day before EU finance ministers agreed to the bailout, Standard & Poor downgraded Greece to the lowest credit rating – CCC – which put it behind even Pakistan and Jamaica. Without the latest bailout, Greece is set to default on many of its July payments. 
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Greece Debt Crisis is Main Stability Threat to Euro Region Banks, ECB Says
15 June 2011 – Jeff Black and Jana Randow – Bloomberg
The euro area faces a very challenging situation that comes mostly from the interconnection of the sovereign debt crisis and the situation of the banking sector,’’ the ECB said in its semi-annual Financial Stability Review. Germany is in favor of extending the maturities of Greek bonds, but the ECB has said that this could be construed as default. Instead, the ECB is in favor of a plan for bondholders to agree to rollover their debt voluntarily.
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Obama fears Greece default
7 June 2011 – CNN – David Blair
US President Barack Obama weighed into Europe's debate about whether to restructure Greek debt on Tuesday, saying it would be "disastrous" for the US if the crisis led to "an uncontrolled spiral and default in Europe." He appeared to side with the European Central Bank, which fears that a restructuring of Greek debt could unleash a financial crisis. President Obama spoke at the White House alongside Angela Merkel, the German chancellor, who is under intense pressure at home to ensure that private sector creditors contribute to a second rescue of Greece. Lawmakers from Ms Merkel's coalition are considering tabling a resolution this week demanding that additional help to Greece be paired with voluntary private creditor involvement, which many investors believe would be tantamount to a default.
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Vote on Bulgaria and Romania bid to join Schengen area
2 June 2011 – The Financial
The European Parliament is preparing to vote on June 8 on whether Bulgaria and Romania should join the Schengen border check-free zone. The Civil Liberties Committee (CLC) is advocating for the admittance of these countries into the Schengen area. The primary concern is that these countries cannot comply with current rules aimed ensuring the security of the EU’s external borders. Bulgaria, for one, borders both Turkey and Greece – an already troublesome border for the organization. The CLC insists that these borders will not increase risks to the EU’s borders in any way. If the two states meet all of the Schengen requirements, the Parliament and the Council of Ministers could potentially admit them into the Schengen area this summer.
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Greece prepares for EU decision
31 May 2011 – Bloomberg News – Maria Petrakis
The European Union and the IMF are both set to release reviews of Greek progress in the next few days that will determine whether the country will receive the fifth installment of its $157 billion bailout. Greek Prime Minister George Papandreou is fighting stiff opposition to the proposed budget cuts and asset sales necessary to receive the financial aid, and he is still unable to gain multiparty support for his plans. The current government is losing ground in Greece, while New Democracy, the main opposition party, has been steadily gaining support from Greek citizens for its refusal to support any austerity plan. Both the EU and IMF assessments will involve a risk analysis, because officials are worried that a multiyear aid package would be a severe financial loss for the institutions if an incoming government refused to support it.
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U.S., EU end rift over beef, luxury goods
28 May 2011 – Reuters
One of the oldest transatlantic trading feuds ended on Friday, May 27. The United States officially lifted import duties on European luxury foods in return for the EU’s promise to allow more sales of hormone-free beef on the continent. The two sides had reached a compromise in 2009, and created a timeline for the gradual reduction of American sanctions in conjunction with a gradual introduction of more US hormone-free beef to European markets. The final phase was not scheduled to be implemented until August of 2012, but was introduced early with great support from both sides. The transatlantic dispute dates back to the 1980s, when the European ban on North American beef led the United States and Canada to place WTO-approved retaliatory sanctions on luxury European items.
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French Minister to Seek Top IMF Job
25 May 2011 – The New York Times – Liz Alderman 
Christine Lagarde, the Finance Minister of France, officially announced her bid to lead the IMF on Wednesday. The announcement was made amidst rumblings from developing nations about the practice of always naming a European to head the global financial organization. IMF representatives from the BRICS countries issued a statement late Tuesday afternoon condemning the tradition and saying it “undermines the legitimacy of the fund.” However, Ms. Lagarde contends that, since the European financial crisis is currently the most daunting task facing the IMF, she would be uniquely prepared to handle the job. The candidacy race is currently between Ms. Lagarde and Mexican central bank governor Agustin Carstens.
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Lagade in wings as candidates emerge for IMF job
23 May 2011 – AFP – Veronica Smith
In the wake of Dominique Strauss-Kahn’s resignation as head of the IMF, four candidates have emerged: French Finance Minister Christine Lagarde, Belgian Finance Minister Didier Reynders, Mexican central bank chief Agustin Carstens, and Kazakh central bank chief Grigori Martchenko. Lagarde is rumored to be the early favorite because of her work on leading the G-20 under the French presidency, but she may face legal trouble over her handling of a high-profile dispute involving tycoon Bernard Tapie and the bank Credit Lyonnais. Emerging economies are seeking to end the gentleman’s agreement that has kept a European heading the IMF and an American in charge of the World Bank. The IMF is expected name a new managing director by June 30. 
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Economic growth rate in Eurozone accelerates
13 May 2011 – BBC News
The eurozone’s growth rate accelerated to 0.8% in the first quarter of 2011, a 0.5% increase from the previous quarter. A German growth rate of 1.5%, accompanied with a surprisingly high 0.8% growth rate from debt-laden Greece underpinned the optimistic outlook of eurozone economies. Analyst Howard Archer predicted a leveling off of growth rates in the coming months, saying “This is almost certainly as good as it gets for the eurozone and growth seems likely to moderate over the coming months in face of significant headwinds.” Portugal’s economy slid into recession after contracting 0.7% in the first quarter of 2011, marking the second consecutive quarter of decline. However analyst Platon Monokroussos responded to overall eurozone growth as “a huge positive surprise, a reading that is significantly above market expectations.” 
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South Korea & EU Close to Free Trade Agreement
April 25 2011 – Korea Herald
The long-anticipated free trade agreement between the European Union and South Korea is expected to pass the standing committee of the South Korean parliament as a ratification bill later this week, representing a key step in the legalization of the agreement. Before the government agreed to exempt stockbreeders to from capital gains taxes when selling their farms, the opposition had voted down the ratification bill for the agreement on several occasions, including last Friday.The ruling party was able to compromise with rival parties’ demands to offer transfer tax cuts to small livestock farms to the bill, removing the last remaining hurdle to the bill’s passage.
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Finnish PM-elect seeks to soothe EU bailout fears
19 April 2011 – Reuters - Jussi Rosendahl and Terhi Kinnunen
Finland's likely next prime minister ruled out proposing major changes to a bailout package for Portugal, seeking to soothe concerns that the Nordic country's new government could block EU plans and upset markets.  But Jyrki Katainen, leader of the National Coalition party that won Sunday's election, also acknowledged that talks to form a new government would take a long time because his party disagrees with anti-euro True Finns party over the bailout plan.  Finland's parliament, unlike others in the euro zone, has the right to vote on the European Union's requests for funds.
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A Divided Portugal Is Unwilling to Commit to Bailout Terms
11 April – The New York Times – Raphael Minder
Portugal’s political feuding continued to play a role in the nation’s efforts to seek relief from mounting debt. The caretaker Socialist government dismissed a European Union request that all of the country’s main political parties take part in negotiating the terms of a bailout package.  Speaking at a meeting of European finance ministers in Hungary, Olli Rehn, the European commissioner in charge of economic and monetary affairs, said Friday that international creditors expected Portugal’s government to take the lead in negotiating the conditions for a bailout, but that “it is essential that we also speak to the opposition parties.” He emphasized on Saturday that bringing debt under control was essential to European growth.
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Portugal bail-out: EU aims for mid-May completion
8 April 2011 – BBC News
Following a formal request for financial assistance by Portugal on Thursday, at a meeting of EU finance ministers today, Commissioner Olli Rehn stipulated that the bail-out aimed at mending Portugal’s disintegrating economy should be completed by mid-May. This timeline would force Portugal to comply with new austerity measures prior to June elections. Rehn went on to estimate the bail-out package to be around 80 bn euros ($115bn) and that Portugal was capable of refinancing its own debt until the completion of the deal. Portuguese Finance Minister Fernando Teixeira dos Santos did not want to discuss figures at the meeting. Commissioner Rehn stipulated that the cross-party consensus was vital to the success of the package and that the austerity measures rejected in the Portuguese Parliament, leading to the resignation of President Jose Socrates, would be a starting point for reforms required to secure the financial assistance package. 
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EU agrees eurozone fund financing
25 March, 2011 – CNN.com - Peter Spiegel
Angela Merkel, the German chancellor, convinced her European counterparts to restructure a new €500bn eurozone bail-out fund so that members will not have to pay cash into the system so quickly. The new fund, set for 2013, will require €80bn in paid-in cash as well as €620bn in guarantees and callable capital so that it can use its full €500bn to rescue debt-ridden countries that suffer a Greece-like implosion.  The sudden change by Germany angered some other EU members, including its normal allies in the Netherlands, but the German proposal was agreed to after a debate that lasted late into the night.
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Thousands rally against EU wage plan
24 Mar 2011 – Al Jazeera
Thousands of protesters urging an end to Europe-wide austerity measures are marching in Brussels, the Belgian capital, outside a venue where regional leaders are meeting. Police fired water cannons and tear gas to disperse groups of demonstrators close to the European Union summit on Thursday, after activists blocked key roads in the city and caused a traffic gridlock. Unions are calling on people to challenge EU leaders' moves to commit governments to a new "Euro Pact" expected to be announced, that seeks to moderate wages to make Europe's economy more competitive in the global market. "The European Commission's annual examination of growth as well as the competitiveness pact launched by German Chancellor Angela Merkel and French President Nicolas Sarkozy will drag wages and social rights down to dangerous levels," Belgium's CES union said in a statement.  EU leaders are due to meet later on Thursday, where the resignation of Jose Socrates, the Portuguese prime minister, is expected to dominate discussions.
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Budget vote looming in Portugal: Socrates to resign if bill fails
23 March 2011 – Wall Street Journal – Patricia Kowsmann
Portuguese Prime Minister José Socrates has said that he will resign Wednesday if the proposed budget bill is voted down. The bill, which the Socrates government proposed earlier this month in response to the persistent financial crisis, includes austerity measures meant to prevent the nation from requiring a financial bailout by the European Union and International Monetary Fund. Socrates claims the measures are vital to decrease the deficit and regain the confidence of bond investors. Main opposition parties have already expressed their intentions to vote against the bill.
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Europe Weighs Financial Rewards for Arab World
7 March 2011 – The New York Times - Stephen Castle
The European Union is drawing up plans for a reset in its relations with the region by increasing support for countries that make democratic reforms at the expense of those that fail to follow suit. According to a document that will be presented to the bloc’s leaders Friday, the Union should now create a partnership with those countries that agree to “adequately monitored, free and fair elections” following years of failed engagement with the southern Mediterranean.  “Those that go further and faster with reforms will be able to count on greater support from the E.U,” says the document, drawn up by the European Commission president, José Manuel Barroso, and the E.U’s foreign policy chief, Catherine Ashton.
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Libya unrest sends oil prices surging to $104 a barrel
6 March 2011 – The New York Post
Escalating violence in Libya sent oil prices to a 29-month high and stoked fears that a sustained run-up in prices will strain consumers in a period of slow growth. Yesterday, crude-oil futures spiked, settling up nearly 2.5 percent to $104.42 a barrel, the highest point since it closed at $106.89 on Sept. 26, 2008. Analysts worry that the strife in Libya might spread to neighboring oil-producing countries like Saudi Arabia. 
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Severe consequences for Portugal if ECB raises interest rates
4 March 2011 – The Associated Press
With a looming interest rate increase crafted by the ECB possible as early as next month, analysts warn that Portugal’s recovery will be longer and more painful. It is uncertain if Portugal will be cornered into a bailout, but rising borrowing costs would have severe implications for a nation trying to steer itself into self-sustainability, as “mortgage rates would rise, business loans would become more expensive, and exporters would have a tougher time if the euro's value keeps rising.” As Joao Pereira Leite, chief of investments at Portugal's Banco Carregosa puts it, “it's definitely bad news for Portugal and the Portuguese. It would be, indirectly, another austerity measure."
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European Central Bank says eurozone interest rates may rise
3 March 2011 – BBC News
Jean-Claude Trichet , president of the ECB, has said eurozone interest rates may rise following the ECB’s next policy summit in April, in order to quell fears of rising inflation. The announcement came after Thursday’s meeting, where the ECB decided to keep rates at 1%. The abrupt rise in commodity prices has caused “price shocks,” which may require the ECB to intervene. Although a possibility, Mr. Trichet made it clear that the decision was to be made at the next meeting, stating "we are never pre-committed. The decision will be taken at the next meeting by the governing council."
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UK economy contracted by 0.6% in last three months of 2010
25 February 201– The Guardian - Julia Kollewe
Britain's economy shrank by 0.6% in the final quarter of last year, a sharper fall than the 0.5% quarterly drop reported last month. Consumer spending also slipped and the economy was kept afloat by higher government spending, which will see sharp cuts in coming months.The Office for National Statistics has maintained that the harsh winter weather in December – the coldest December on record – contributed 0.5 percentage points to the decline.  US economy, meanwhile, grew more slowly than initially estimated in the fourth quarter as government spending contracted at a sharper rate and consumer spending was less robust than first thought. US GDP rose at an annualised rate of 2.8%, revised down from 3.2%. Output from the UK service industries fell by 0.7% between October and December from the previous quarter, rather than 0.5% – led by a 1.1% drop in finance and business services – while industrial production was also revised lower to show growth of 0.7% compared with the earlier estimate of 0.9%. Construction slumped by 2.5%.  TUC general secretary Brendan Barber said: "The government's hope of an upwards revision of growth has been dashed. It's time to wake up and smell an economy in big trouble. We need a plan B that doesn't send it over the edge with deep rapid spending cuts."
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Business Group Tied to U.S. Wades Into Nicaragua’s Politics
February 23, 2011 – New York Times - Eric Lipton
The president of the American Chamber of Commerce of Nicaragua, Róger Arteaga Cano, has been revealed to have organized secret meetings with opposition party leaders in an effort to oust President Daniel Ortega in an election this year. A former official in the previous government led by a rival party, Mr. Arteaga turned the chamber into a harsh critic of Mr. Ortega, the leftist Sandinista party leader and longtime adversary of the United States. He also briefed officials at the United States Embassy in Managua, the capital, and in Washington on his efforts to spur an effective challenge to Mr. Ortega, winning their tacit approval.  The chamber’s activities over the past two years were detailed in interviews with Nicaraguan officials and business executives and in State Department cables obtained by WikiLeaks, illuminating the role the foreign affiliates of the U.S. Chamber of Commerce sometimes play in the politics of their host nations.
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France’s finance minister warns of risks of global imbalances
18 February 2011 – Washington Post
France’s finance minister Christine Lagarde is warning that the world’s powers must confront global imbalances in the world economy to avoid a new financial crisis. Lagarde’s comments come as G20 finance ministers and central bank governors meet in Paris for a financial conference. The dangerous mix of huge surpluses and severe deficits by nations around the globe is not sustainable and "leads us straight into the wall of another debt crisis." The hope, said Lagarde, is for G20 states to "move from understanding to cooperating and collaborating," on economic matters for global stability.
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Europe grapples with youth unemployment
17 February 2011 – The Financial Times - FT reporters
In the 17 countries forming the eurozone, joblessness among the young now stands at 20.4 per cent, up from 14.6 per cent in February 2008, before the start of the financial crisis. In all European Union countries, youth unemployment rates are higher than mainstream joblessness, often by a factor of two to one. Only Germany and the Netherlands have youth unemployment rates below 10 per cent. Policymakers in Brussels have warned of a "lost generation" of young workers, and worry that employment gaps in the early stages of a career can affect wages for several years, if not decades.  "Young people trying to get into the labour market is the biggest employment issue in Europe right now," said John Monks, general secretary of the European trade union confederation, a Brussels-based umbrella group. "Europe hasn't been too bad at keeping people in existing jobs, but it's getting a job in the first place that's the difficult bit." He warned that many were taking part-time or low-paid temping work, meaning the underlying picture is even worse than the figures suggest. 
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Chancellor Merkel proposes EU unity to save euro
1 February 2011 – NY Times
German Chancellor Angela Merkel, ahead of an EU summit on Friday, is proposing augmented unity within the EU as the best chance of rescuing the euro and European economies. Merkel, who outlined her proposal to EU Commission President Jose Manuel Barroso last week, is seeking uniformity within the EU on a wide range of issues including retirement age, education and research, and economic fundamentals such as regulations guiding national debts and corporate tax rates. The proposal has been described as a “competitiveness pact” for Europe which is aimed at solving member-states’ economic woes in the long term. 
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Spain’s Cabinet approves raising retirement age to 67
28 January – Washington Post
The Spanish Cabinet has approved a plan to raise the country’s retirement age by two years to 67; a measure intended to rebound the ailing economy in the long term. This represents a major structural reform which may provide markets a glimmer of hope that Prime Minister Zapatero’s government is taking concrete steps towards reestablishing a sound economy, as the current jobless rate hovers over 20%. Although the measure still needs the approval of Parliament, Zapatero’s Socialist Party has already garnered support from smaller parties to pass the measure. 
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President Sarkozy ‘will not let euro fail’
27 January 2011 – BBC News
In a speech at the World Economic Forum, French President Nicolas Sarkozy pledged the unwavering support of both France and Germany for the European currency, stating “whether it be Chancellor Merkel or myself, never will we turn our backs in the euro. Never will we abandon the euro.” Sarkozy refuted concerns over the future of the currency, which critics claimed was in dire straits after the bailouts of Greece and the Irish Republic, instead reinforcing its importance to the European community, saying “the euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go or be destroyed.”
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British economy contracts slightly, risk of “double dip”
25 January 2011 – NY Times – John F. Burns and Julia Werdigier
Britain’s economy shrank by 0.5% in the last quarter of 2010, falling far short of the 0.5% growth which economists projected. Britain’s economy had grown modestly for four consecutive quarters prior to the release of these figures which shocked Prime Minister David Cameron’s coalition government, putting at risk the politically contentious $128 billion four-year program of tax increases and spending cuts. The figures are in sharp contrast to the coalition government’s promise of imposing the austerity measures while keeping the economy growing. The Labor Party was quick to pounce on the news, with Ed Balls, the chief economic spokesman for Labor saying: “Now, we are seeing the first signs of what the Conservative-led government’s decisions are having on the economy.”
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Germany halts payments to Global Health Fund over corruption allegations
26 January 2011 – Washington Post- John Heilprin
Germany’s development ministry has suspended all payments to the Global Fund to Fight AIDS and Malaria after Associated Press reports sited allegations of widespread corruption within the organization. The ministry has made it clear that its $270 million pledge will be withheld pending a full investigation of the allegations into the $21.7 billion fund. The allegations, made by the fund’s own investigators, include the forging of documents and improper bookkeeping practices, with losses to the tune of $34 million. “We obviously look very closely at the (donated) money now. It’s the money of the German taxpayers, so we have to make sure that it was rightly used,” a ministry spokesman was quoted saying.
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Obama under scrutiny for clues on deficit in speech
Jan 25, 2011 -  Reuters
Obama's State of the Union address at 9.00pm today before a joint session of Congress today is expected stress the search for common ground with Republicans to boost growth and jobs: a tone he is expected to carry into his 2012 re-election campaign. Obama says he will use the speech to talk about measures to boost U.S. competitiveness, jobs and growth, and deal with the deficit and debt in a "responsible" way, possibly through proposing to raise the debt limit. The latter measure is opposed by some Republicans, but is seen by investors as essential for the country to avoid defaulting on its debt.
The address comes after attempts by both parties to conduct politics in a more civil fashion after Congresswoman Gabrielle Giffords was critically wounded in a mass shooting attack in Arizona on January 8. The family of a 9 year old girl killed in the same attack, one of six total deaths, is expected to attend.
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UK: 'Youth unemployment hits record high'
19 January, 2011 – The Guardian - Graeme Wearden
Youth unemployment has reached a record high in the UK, with the total number of adults under 25 and out of work and who are not undergoing education exceeding 951,000 in the final months of 2010. At 20.3%, youth unemployment is now the highest since records began in 1992. The rise in unemployment comes amidst austerity measures under Prime Minister David Cameron, in which public services have undergone extensive budgetary cuts. Former prime Minister Gordon Brown is currently urging the G20 to make youth unemployment a priority, and is scheduled to talk on this issue before world leaders tomorrow. 
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Former Swiss banker leaks off-shore banking info to Wikileaks
19 January 2011 – Washington Post
Former Swiss banker Rudolf Elmer, formerly a senior banker at the Cayman Island location of Swiss bank Julius Baer, has publicly provided Wikileaks founder Julian Assange with confidential account information of about 2,000 account holders. “I am against the system, and I know how the system works, I know that from a day-to-day business,” said Elmer. While Elmer refused to provide the names of the clients whom he claims are guilty of tax evasion, Assange made clear his support for Elmer and his intentions of releasing the information as soon as possible: “I am here today to support him. He is a whistleblower, and he has important things to say.”
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Germany on track to reach EU deficit cap a year early
19 January 2011 – Financial Times
Germany’s Finance Ministry reported that the German deficit will fall below the EU threshold of 3% of GDP in 2011, a year earlier than previous estimates. Moreover, Rainer Bruderle, Germany’s Economy Minister, predicted that another year of decreasing unemployment and strong economic growth would shrink the deficit to 2.5% of GDP. Germany has focused on providing other Eurozone countries an example of how to rebound from economic strain and escalating borrowing. Mr. Bruderle, a senior Free Democrat, predicted tax cuts would be in place before the end of the current parliament in 2013 as a result of the speedy deficit reduction.
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Labor Party leader admits party was wrong on economy
13 January 2011 – The Guardian
Ed Miliband, leader of Britain’s Labor Party, is to admit in a statement that Labor made itself vulnerable to attacks over the flailing state of the economy under former Prime Minister Gordon Brown’s leadership, through failing to address the urgent need to curb spending following the recession. Moreover, Miliband is said to admit that Labor must share responsibility for the deficit due to the lack of proper oversight and regulation of the banking industry. This strategic shift was agreed upon by leaders of the party in a shadow cabinet meeting on Tuesday. Miliband will continue to defend Labor’s stance against accusations that rampant overspending by Labor led to this deficit however.
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Belgian worries increase as debt grows
11 January 2011 - CNN News
The king of Belgium on Monday asked the country's caretaker government to move ahead with public spending cuts. The rise in debt yields caused financial stocks to plummet drastically in 2010. Additionally, political instability in Belgium has resulted in an absent permanent government, preventing any real progress for fiscal consolidation measures, despite having the third highest debt-to-gross domestic product in the European Union behind Italy and Greece. The royal order came after talks to forge a coalition collapsed late last week, leaving few obvious political options in the crisis.
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Portugal bond yields hit new high
10 January 2011 – BBC News
The interest rate Portugal must pay to borrow funds hit a fresh high on Monday, as speculation mounted it would join Greece and the Irish Republic in needing an international bail-out.  The yield on 10-year Portuguese government bonds rose for the fourth consecutive day, hitting 7.16%.  The country's borrowing costs have surged as investors worried over its financial health.  However, Portugal has continued to maintain it does not need rescuing.  Lisbon argues its situation is different from Greece and the Republic of Ireland - both of which have agreed to bail-outs from the European Union and International Monetary Fund.  It says that its deficit and debt are lower than those nations, that it has not suffered a bubble in property prices and that its banks are sound.  And the European Commission said that there were no discussions under way on an EU-International Monetary Fund bail-out of Portugal.
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Eurozone economy suffers growth slowdown
7 January 2011 – BBC News
The eurozone's economy grew by 0.3% in the July-to-September period last year, less than previously estimated.  GDP in the 16 countries using the euro was revised down from the 0.4% reported earlier by the EU's Eurostat office.  That represents a big fall from the 1% growth registered in the second quarter of the year, from April to June.  Much of that decline was due to a big slowdown in Germany, where growth fell from 2.3% in the second quarter to 0.7% in the third quarter.  Germany's growth in the April-to-June period was hailed at the time as exceptional, as it was the country's best quarterly performance since the country's unification in 1990.
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Spain 2010 deficit 'was less than target'
4 January 2011 – Yahoo! News – AFP
Spain's public deficit for 2010 will be "somewhat better" than the government's target of 9.3 percent of annual economic output, Prime Minister Jose Luis Rodriguez Zapatero said on Tuesday.  Spain will also meet its 2011 target for a public deficit equivalent to 6.0 percent of gross domestic product, Zapatero said during an interview with Onda Cero radio.  "Of course we will meet the deficit target of 6.0 percent in 2011, just as we set the goal of reducing the deficit in 2010 to 9.3 percent and today I can say that we are going to be somewhat better than the objective we set," he said.  Spain's public deficit hit 11.1 percent of GDP in 2009, the third-highest in the eurozone after Greece and Ireland, but the
government has vowed to bring it down to the eurozone limit of 3.0 percent by 2013.
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Inflation Jumps in Europe
4 January 2011 – The New York Times – Matthew Saltmarsh
Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services.  Annual inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency.  The release was significant because it means that inflation has breached the European Central Bank’s target of just below 2 percent for the first time since November 2008.  The data “will probably raise some eyebrows at the E.C.B.,” said Martin van Vliet, economist at the Dutch bank ING.
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