European leaders for the first time raised the prospect of the euro area splintering, choosing to treat Greece’s December referendum on the terms of a bailout package as an in-or-out vote on the debt-stricken nation’s future in the currency union.
Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until a vote they said would be on Dec. 4 or Dec. 5 determines whether it deserves a fresh batch of loans needed to stave off default. Greece’s Finance Minister Evangelos Venizelos said the bailout should be implemented without delay and that his nation’s euro membership can’t depend on a referendum.
"The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?" German Chancellor Angela Merkel told reporters after crisis talks hours before a Group of 20 summit set to begin today in Cannes, France. French President Nicolas Sarkozy said Prime Minister George Papandreou’s government won’t get a "single cent" of assistance if voters reject the plan.
The hardball tactics open the door for a nation to leave the currency bloc that at its setup in 1999 capped Europe’s progression from war to prosperity and was declared "irrevocable" by its founding fathers. Polls show most Greeks object to the austerity required for aid, yet more than seven in 10 favor remaining in the euro, a survey last week of 1,009 people published in To Vima newspaper showed.
Unilateral Decision
Papandreou triggered the confrontation with this week’s unexpected, unilateral decision to hold a poll on the additional budget cuts demanded as conditions for a second aid package. His finance chief said in an e-mailed statement that "internal political balances and the future of individuals and political parties of this country is not what matters. What matters is to save and recover the country through the only doable process which is included in the decision of Oct. 26."
"Greece’s position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos. "This acquis by the Greek people cannot depend on a referendum."
Greece’s Nov. 1 announcement, which was designed to force the opposition to back the fiscal cuts, sent Europe’s stocks, currency and bonds tumbling. It came less than a week after leaders worked through the night in Brussels to establish a new plan to help Greece pay its bills, ring-fence Italy and recapitalize banks.
Until the ballot, an already delayed aid instalment of 8 billion euros ($11 billion) will remain on hold, Merkel and Sarkozy said in a late-night appearance in an auditorium better known as the home of the Cannes film festival.
Papandreou, summoned to the French resort with his hold on power weakening at home and subject to a confidence vote tomorrow, defended his decision. Greece "needs a wider consensus" for the bailout demands and will choose to stay in the euro, he told reporters at a separate briefing.
The Greek premier declined to say how the referendum will be worded, saying it "is not the moment" to give the exact language, only that "the question is not just about a program, but do we want to be in the eurozone."
EU treaties make no provision for a country to exit the currency, and the European Central Bank’s legal department said in December 2009 that an expulsion "would be so challenging, conceptually, legally and practically, that its likelihood is close to zero."
A decade since Greece fudged fiscal data to win entry to the euro and two years after it triggered the crisis by revising its budget numbers, successive rounds of tax increases and cuts to wages and pensions have deepened a recession now in its fourth year. The economy will contract 5.5 percent this year and 2.5 percent next, according to its 2012 budget. Unemployment reached 16.5 percent in July.
"The reality is the eurozone is telling Greece look, either you’re in or you’re out," said Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics in Washington. "Beggars can’t be choosers and you’re going to have to make a decision."
Regaining Control
While leaving the euro would allow Greece to regain control of exchange and interest rates, a September report by economists at UBS AG said its new currency would drop 60 percent, and local borrowing costs would jump at least 7 percentage points, imperiling the balance sheets of banks and companies.
Departure from the European Union would cause trade to fall by half even with devaluation. The cost would be as much as 11,500 euros a person in the first year outside the euro and 4,000 euros in following years, according to UBS.
Merkel and Sarkozy also pledged to step up work to prevent Greece’s travails, now exacerbated by a month-long political campaign, from spilling over to the rest of the 17-country euro area.
Finance ministers will accelerate plans to boost the firepower of the 440 billion-euro rescue fund, the two said. On Oct. 27 euro leaders agreed to use leverage to get the fund’s clout up to 1 trillion euros and told banks to raise 106 billion euros by the end of June to fortify their capital.
‘We Are Steeled’
"We are steeled," Merkel said. The EU decisions aimed at bolstering the euro "have to be carried out more quickly. We must have clarity more quickly. Then we will be in a position to have an appropriate response that’s good for the euro, regardless of how the Greek referendum turns out."
German banks held $12.4 billion in Greek government bonds on June 30, according to the Bank for International Settlements. That excludes 7.2 billion euros in Greek government bonds held by FMS Wertmanagement GmbH, the "bad bank" of Germany’s nationalized Hypo Real Estate Holding AG.
French banks lead the group of Greek creditors among foreign banks with overall claims of $55.8 billion, including $10.7 billion in sovereign debt, according to the BIS. The overall figure for French banks is inflated by $43.5 billion in lending to companies and households, mainly because of Credit Agricole SA’s Greek division, Emporiki Bank SA.
In a sign such hopes will be dashed as the turmoil mounts, Chinese Vice Finance Minister Zhu Guangyao said yesterday it’s now "too soon" for his country, holder of the world’s largest currency reserves, to contribute.
"The Cannes summit will likely take us back to the G-20 as crisis manager, but against a backdrop where the unity that had been the hallmark of the G-20 has already begun to fray," said Daniel Price, who helped organize the 2008 summit for President George W. Bush and is now managing director at Washington-based Rock Creek Global Advisors LLC.
Parts from Ref : Simon Kennedy in Cannes at skennedy4@bloomberg.net ; James G. Neuger in Cannes at jneuger@bloomberg.net
Thursday, 3 November 2011
Wednesday, 2 November 2011
Financial Bail out Greece to be told to keep in line
Very Ineresting reading from the bloomberg wires !!
European leaders racing to prevent their week-old debt crisis strategy from unravelling convene emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.
Greek Prime Minister George Papandreou, his hold on power weakening, was summoned to Cannes on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the "only way to resolve Greek debt problems" is through a deal hammered out last week in a six-day crisis-management marathon.
Papandreou triggered the latest upheaval in the two-year- long crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact. Global stocks, the euro and bonds of debt-strapped countries tumbled yesterday as concern of a disorderly Greek default mounted.
"Uncertainty and fear is palpable," Marc Chandler, chief currency strategist at Brown Brothers Harriman & Co. in New York, said by e-mail. "The political cost of the economic austerity does not appear fully appreciated by policy makers or investors."
Papandreou will join a group at about 8:30 p.m. comprising Sarkozy, German Chancellor Angela Merkel, European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde as well as European Union authorities, according to a statement from Sarkozy’s office.
People ‘Perplexed’
Japanese Finance Minister Jun Azumi said today in Tokyo that "everyone is perplexed" by Greece’s referendum decision and that the issue will be discussed at the Cannes summit.
Italian Prime Minister Silvio Berlusconi, under pressure to cut Europe’s second-biggest debt load, convened a special meeting of advisers late yesterday to discuss budget-cutting plans. Like Sarkozy, Berlusconi held crisis talks with Merkel yesterday. His key cabinet ministers will meet today to draft measures for the country’s financial stability legislation, the Italian news agency ANSA said, citing government officials.
Italy and France’s 10-year borrowing costs climbed to the highest levels relative to benchmark German bunds since before the creation of the euro in 1999. Bund yields fell the most on record, with the securities outperforming all their euro-area peers, as investors sought the safest assets. Greek two-year yields climbed to a record high 87.28 percent.
A day after MF Global Holdings Ltd. filed for bankruptcy after bets on European sovereign debt backfired, financial stocks fell with Morgan Stanley sliding as much as 12 percent in New York trading.
Europe ‘Surprised’
P
apandreou’s announcement, which Sarkozy said "surprised all of Europe," threatens to overshadow a Nov. 3-4 Group of 20 summit in Cannes, France. European leaders had designated the talks as a stage to present their plan to stamp out the crisis and end the threat to the global economy.
"The referendum will be a clear mandate and strong message within and without Greece on our European course and our participation in the euro," Papandreou told his ministers in Athens late yesterday, according to an e-mailed transcript.
It will "ensure this course in the most decisive way".
EU officials had hoped to use the Oct. 27 rescue agreement, which includes renewed commitments to fiscal austerity as well as new rescue resources, to anchor their economic agenda at the G-20 summit and secure support from their counterparts. Now, officials meeting as the confidence vote plays out in Athens will be called on to assess the deal’s -- and the euro’s -- future, especially if Papandreou’s government falls and Greece comes under more pressure to default or leave the common currency.
Rescue Fund
European leaders agreed to boost the European Financial Stability Facility’s firepower to 1 trillion euros ($1.4 trillion), set aside 100 billion euros for Greece and provide 30 billion euros in collateral for a debt swap that will give Greece’s investors new, lower-risk bonds at 50 percent of the existing bonds’ face value.
The deal to reduce Greece’s debt load will do nothing to aid the country’s recovery from recession, opposition New Democracy leader Antonis Samaras said on Oct. 27. Papandreou’s majority meanwhile slipped as his support narrowed to 152 lawmakers in the 300-deputy parliament amid a party rebellion.
‘Profound’ Risks
Whether the EU’s plan would succeed "was a matter for debate. But at least there was a plan," Yiannis Koutelidakis of Fathom Financial Consulting in London, said in a note yesterday. "The risks engendered by this move are profound for the euro in general, not just for Greece as the expulsion of any one member state would critically undermine the Economic and Monetary Union."
Such uncertainty "will likely block any" governments outside the euro-area from stumping up cash for its reworked rescue fund as the continent’s leaders would like, said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc. While Brazil and Russia have signalled a willingness to help, Chinese officials say they want more details.
A lack of outside assistance will leave the ECB under pressure to keep buying the bonds of stressed states, Cailloux said. Today’s meetings are Draghi’s first on the international stage since he took over the ECB presidency yesterday from Jean- Claude Trichet and come a day before he chairs a meeting of the ECB’s Governing Council for the first time.
While Nomura Holdings Plc economist Jens Sondergaard said he expects the ECB to leave its benchmark rate at 1.5 percent this week, the "adverse market reaction" to Greece’s referendum call leaves a one-in-three chance of a 25 basis point reduction.
Ref :
Reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ;
Simon Kennedy in Paris at skennedy4@bloomberg.net
Editor responsible for this story: James Hertling at jhertling@bloomberg.net
European leaders racing to prevent their week-old debt crisis strategy from unravelling convene emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.
Greek Prime Minister George Papandreou, his hold on power weakening, was summoned to Cannes on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the "only way to resolve Greek debt problems" is through a deal hammered out last week in a six-day crisis-management marathon.
Papandreou triggered the latest upheaval in the two-year- long crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact. Global stocks, the euro and bonds of debt-strapped countries tumbled yesterday as concern of a disorderly Greek default mounted.
"Uncertainty and fear is palpable," Marc Chandler, chief currency strategist at Brown Brothers Harriman & Co. in New York, said by e-mail. "The political cost of the economic austerity does not appear fully appreciated by policy makers or investors."
Papandreou will join a group at about 8:30 p.m. comprising Sarkozy, German Chancellor Angela Merkel, European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde as well as European Union authorities, according to a statement from Sarkozy’s office.
People ‘Perplexed’
Japanese Finance Minister Jun Azumi said today in Tokyo that "everyone is perplexed" by Greece’s referendum decision and that the issue will be discussed at the Cannes summit.
Italian Prime Minister Silvio Berlusconi, under pressure to cut Europe’s second-biggest debt load, convened a special meeting of advisers late yesterday to discuss budget-cutting plans. Like Sarkozy, Berlusconi held crisis talks with Merkel yesterday. His key cabinet ministers will meet today to draft measures for the country’s financial stability legislation, the Italian news agency ANSA said, citing government officials.
Italy and France’s 10-year borrowing costs climbed to the highest levels relative to benchmark German bunds since before the creation of the euro in 1999. Bund yields fell the most on record, with the securities outperforming all their euro-area peers, as investors sought the safest assets. Greek two-year yields climbed to a record high 87.28 percent.
A day after MF Global Holdings Ltd. filed for bankruptcy after bets on European sovereign debt backfired, financial stocks fell with Morgan Stanley sliding as much as 12 percent in New York trading.
Europe ‘Surprised’
P
apandreou’s announcement, which Sarkozy said "surprised all of Europe," threatens to overshadow a Nov. 3-4 Group of 20 summit in Cannes, France. European leaders had designated the talks as a stage to present their plan to stamp out the crisis and end the threat to the global economy.
"The referendum will be a clear mandate and strong message within and without Greece on our European course and our participation in the euro," Papandreou told his ministers in Athens late yesterday, according to an e-mailed transcript.
It will "ensure this course in the most decisive way".
EU officials had hoped to use the Oct. 27 rescue agreement, which includes renewed commitments to fiscal austerity as well as new rescue resources, to anchor their economic agenda at the G-20 summit and secure support from their counterparts. Now, officials meeting as the confidence vote plays out in Athens will be called on to assess the deal’s -- and the euro’s -- future, especially if Papandreou’s government falls and Greece comes under more pressure to default or leave the common currency.
Rescue Fund
European leaders agreed to boost the European Financial Stability Facility’s firepower to 1 trillion euros ($1.4 trillion), set aside 100 billion euros for Greece and provide 30 billion euros in collateral for a debt swap that will give Greece’s investors new, lower-risk bonds at 50 percent of the existing bonds’ face value.
The deal to reduce Greece’s debt load will do nothing to aid the country’s recovery from recession, opposition New Democracy leader Antonis Samaras said on Oct. 27. Papandreou’s majority meanwhile slipped as his support narrowed to 152 lawmakers in the 300-deputy parliament amid a party rebellion.
‘Profound’ Risks
Whether the EU’s plan would succeed "was a matter for debate. But at least there was a plan," Yiannis Koutelidakis of Fathom Financial Consulting in London, said in a note yesterday. "The risks engendered by this move are profound for the euro in general, not just for Greece as the expulsion of any one member state would critically undermine the Economic and Monetary Union."
Such uncertainty "will likely block any" governments outside the euro-area from stumping up cash for its reworked rescue fund as the continent’s leaders would like, said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc. While Brazil and Russia have signalled a willingness to help, Chinese officials say they want more details.
A lack of outside assistance will leave the ECB under pressure to keep buying the bonds of stressed states, Cailloux said. Today’s meetings are Draghi’s first on the international stage since he took over the ECB presidency yesterday from Jean- Claude Trichet and come a day before he chairs a meeting of the ECB’s Governing Council for the first time.
While Nomura Holdings Plc economist Jens Sondergaard said he expects the ECB to leave its benchmark rate at 1.5 percent this week, the "adverse market reaction" to Greece’s referendum call leaves a one-in-three chance of a 25 basis point reduction.
Ref :
Reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ;
Simon Kennedy in Paris at skennedy4@bloomberg.net
Editor responsible for this story: James Hertling at jhertling@bloomberg.net
Tuesday, 1 November 2011
TAX SUBMISSIONS TO SARS
Dear All
Please note as non provisional tax payers (in summary persons earning a only salary income no other income and not a Company or Trust) who are registered with SARS for e-filling but submitt there tax returns by 25th November 2011. An queries give me a shout for assistance.
Steven
Please note as non provisional tax payers (in summary persons earning a only salary income no other income and not a Company or Trust) who are registered with SARS for e-filling but submitt there tax returns by 25th November 2011. An queries give me a shout for assistance.
Steven
Friday, 21 October 2011
SARS - VOUNTARY DISCLOSURE PROGRAMME DEADLINE
Dear All
Please note the deadline for the current SARS Voluntary Disclosure Programme is the end of October 2011.
If you have any skeleton's regarding any form's of Tax related issue's my advice is to take this window of opportunity !!. SARS will get on to you soon. This gives you an option to deal with any issues on penalties and interest up front and not when you on the back foot.
If you have any queries or issues you want further information on contact me on steven@global.co.za
Please note the deadline for the current SARS Voluntary Disclosure Programme is the end of October 2011.
If you have any skeleton's regarding any form's of Tax related issue's my advice is to take this window of opportunity !!. SARS will get on to you soon. This gives you an option to deal with any issues on penalties and interest up front and not when you on the back foot.
If you have any queries or issues you want further information on contact me on steven@global.co.za
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