Archives for May 2015

Reuters / Alkis Konstantinidis

Greece may miss a deadline for a deal with creditors this week, as the parties haven’t made any progress in talks, Bloomberg sources close to the negotiations said, accelerating fears of an Athens default.

READ MORE: ‘Can’t Pay, Won’t Pay’: Greece has no money to make IMF payment, interior minister says

Greece remains too far from striking a debt deal with its international creditors, unnamed sources who wished to remain anonymous told Bloomberg.

Last week German Chancellor Angela Merkel and French President Francois Hollande set a target to reach a deal by the end of May.

As the stalemate in negotiations drags on, Greece is losing liquidity and the economy is being pushed deeper into recession.

Deposit withdrawals are growing rapidly, and inability to make debt payments have aroused new doubts about the country’s ability to stay in the eurozone.

However, the European Central Bank (ECB) have left the level of €80.2 billion emergency cash available to Greek banks unchanged from a week ago, said two sources.

Athens hope to reach a settlement by June 5, when the first IMF payment of almost €1.6 billion, due next month, is to be made, Greek Finance Minister Yanis Varoufakis said on Tuesday.

A great Greek debt guide: What Greece owes to whom, when. http://t.co/j5Elp6TbcWpic.twitter.com/ZsFUfQdbHJ

— Neil King (@NKingofDC) May 26, 2015

The US will urge its G-7 counterparts to find a pragmatic solution to the Greek question, said US Treasury Secretary Jacob J. Lew on Wednesday in London.

Greek officials are meeting creditors on Wednesday in Brussels in an attempt to reach a settlement.

Last week, Greek Interior Minister Nikos Voutsis warned the country wouldn’t be able to pay the next €300-million installment to the IMF on June 5 if it didn’t receive additional assistance from lenders.

Article source: http://rt.com/business/262389-greece-debt-talks-fail/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Kevin Coombs

The European Union and Switzerland have signed a tax transparency agreement that will put an end to Swiss banking secrecy for EU residents. The sides will start automatically sharing data on residents’ financial accounts from 2018.

“Today’s agreement heralds a new era of tax transparency and cooperation between the EU and Switzerland. It is another blow against tax evaders, and another leap towards fairer taxation in Europe,” European commissioner for economic and financial affairs, Pierre Moscovici, said in a press release on Wednesday.

The shared data will include names, addresses, tax identification numbers and dates of birth, as well as a broad set of other financial and account balance information, according to the document.

“This new transparency should not only improve Member States’ ability to track down and tackle tax evaders, but it should also act as a deterrent against hiding income and assets abroad to evade taxes,” the press release said.

READ MORE: Switzerland publishes names of foreign tax evaders – reports

The new EU-Swiss agreement is in line with the new OECD/G20 global standard for the automatic exchange of information.

The commission is currently concluding negotiations with Andorra, Liechtenstein, Monaco and San Marino regarding similar agreements.

Switzerland has been taking steps to tackle its reputation as the world’s biggest haven for offshore accounts.

Earlier this week, the country published names of foreign tax evaders after it had received numerous requests from Russia, France, Germany, India and other countries.

Last year, Switzerland agreed to share data and tax information with Singapore, also known as an offshore financial center.

A law enacted in Switzerland in 1934 strictly limited any information shared with third parties, including tax authorities, foreign governments, or even the Swiss authorities. In 2013, the Swiss government said it intended to sign an international agreement sponsored by the OECD to end the special secrecy clients of Swiss banks enjoy. The newly-inked tax agreement on transparency will end that in 2018.

Article source: http://rt.com/business/262333-switzerland-eu-tax-agreement/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The number of participants representing foreign companies at St. Petersburg International Economic Forum this year will be higher than in 2014, Russian Deputy Prime Minister Sergey Prikhodko told journalists ahead of the major economic forum.

“The number of foreign companies and heads of state will be higher, last year it was 152, while this year it will be 170,” Prikhodko, head of this year’s forum’s committee said. Business representatives from Russia and 64 countries, numbering some 1,352, have already confirmed their participation in the forum, he added. More than 400 Russian companies will also take part.

READ MORE: Russia’s 19th St. Petersburg Economic Forum to focus on anti-crisis plan

Only 45 percent of the participants represented foreign companies at last year’s forum, while 55 percent were from Russian companies. The total number of foreigners at SPIEF 2014 was 40 percent lower compared to the previous year. Many US companies didn’t attend the event due to pressure over the Ukraine crisis.

READ MORE: Sneak peek: St. Petersburg International Economic Forum

This year St. Petersburg International Economic Forum (SPIEF) is titled: “Time to Act: Shared Paths to Stability and Growth” and will focus on new global challenges. Russia’s anti-crisis plan will be one of the key topics. The Shanghai Cooperation Organization (SCO) and BRICS Business Forums along with the G20 Advisory Forum are the key international events on the Forum’s agenda.

READ MORE: Key economic forums in Russia and Asia agree to cooperate

The 19th Forum will be held on June 18-20 in St. Petersburg. It has become a leading global business event over the past years. Over 7,500 people took part in SPIEF 2014, including heads of 248 foreign and 445 Russian companies. Some 175 agreements were signed for more than 400 billion rubles.

Article source: http://rt.com/business/262097-spief-foreign-attendance-high/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The International Monetary Fund (IMF) headquarters building is seen in Washington, DC (AFP Photo / Yuri Gripas)

Cash-strapped Greece will allegedly be allowed to skip payment to the International Monetary Fund (IMF) on June 5 and have time to negotiate a funding deal without defaulting, if it manages to reimburse all June’s repayments at the end of the month.

“There is the possibility of putting together several payments that Greece would need to make to the IMF in the course of June and then just make one payment,” a senior eurozone official close to the talks with Athens told Reuters.

The struggling country is due to pay the IMF €300 million on June 5 as the first of four June tranches totaling €1.6 billion.

READ MORE: ‘Can’t Pay, Won’t Pay’: Greece has no money to make IMF payment, interior minister says

However, Greece could only skip payment if it provides markets and citizens with a trustworthy plan of a funding deal, because missing the payment could instigate an alarm on the market and a bank run.

While Greece intends to liberalize its economy, amend its pension system and run a reasonable primary budget surplus, its creditors are demanding oppressively high surplus targets, making Athens’ goal unreachable, said Greek Finance Minister Yanis Varoufakis on Tuesday.

“Our government cannot accept – and will not accept – a cure that, over a five-year period, has proved worse than the disease,” the finance minister added, referring to austerity measures that dragged the country’s economy into years of recession.

READ MORE: ‘I wish we had drachma, never entered monetary union’ – Greek finance minister

Last week, Greek Interior Minister Nikos Voutsis said the country wouldn’t be able to pay the next installment of €300 million to the IMF on June 5 unless it received extra financial aid from creditors.

Athens owes billions of euros to the troika of international lenders – the IMF, the ECB and the European Commission – and is unable to pay without a further €7.2-billion bailout.

Article source: http://rt.com/business/262101-greece-loan-payment-skip/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russian President Vladimir Putin (RIA Novosti / Alexey Nokolsky)

Russian President Vladimir Putin spoke out against excluding foreign companies from the Russian government procurement program, saying the local market shouldn’t be deprived of competition.

“Should we wholly exclude foreigners, taking advantage of the situation kindly provided to us by our partners and competitors? We should be careful here. Maybe we are able to do that, but do we need to completely deprive the domestic market of foreign competition? Probably not,” said Putin at the 10th annual Business Russia forum in Moscow Tuesday.

“It’s a dangerous thing to do”, he added.

Turning his attention to small and medium businesses, the president said they should be on a level playing field with government-run companies.

He also stressed that they should strive for quality, as it is very important to consumers.

For example, the Ford Motor Company became so good not only because it perfected assembly-line production, but also combined price and quality of the goods, catering to the masses. This is a golden rule of business not to be forgotten, Putin said.

Local RD centers

It is important for businesses to build their own research agencies that can scout and bring new technology to Russia, tapping the positive experience of foreign companies, said Putin. He advocates the creation of domestic research and development centers.

READ MORE: Russia’s PM signs multibillion dollar anti-crisis plan

“We should not limit ourselves to localizing car manufacturing and putting paint on cars and detailing them, though that’s also a high-tech process. We have to design the technology,” said Putin.

Russia has been pursuing import substitution policy since last year, when anti-Russian economic sanctions were introduced by the US and its allies. As a counter-measure, Russia introduced a food embargo against countries that supported sanctions.

Both Russia and the West have admitted that the so-called ‘sanctions war’ was a dead-end policy, disadvantageous to the both parties.

Article source: http://rt.com/business/262073-putin-import-substitution-balance/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Nikolay Patrushev, Secretary of the Russian Security Council (RIA Novosti / Sergey Guneev)

Western countries have withdrawn from BRICS countries more than $3.5 trillion over the last 10 years to suppress the group, said Russian Security Council Secretary Nikolay Patrushev, adding that nearly half of the sum was pulled out in the last 3 years.

“West is using International financial institutions as leverage more and more often. Our countries will be primarily deterred by informational impact, not military, by artificial exacerbation of national, religious and cultural conflicts,” Patrushev said on Tuesday at the fifth meeting of BRICS high representatives for security issues.

BRICS New Development Bank (NDB) expected to be launched in 2015-2016 is a countermeasure to the Western financial pressure as the bank will provide economic resilience, he said.

READ MORE: BRICS leadership passes to Russia, $100bn development bank ‘main priority’

Secretary of the Russian Security Council said it was necessary for BRICS nations to increase cooperation in areas such as joint struggle against terrorism, extremism, separatism and cross-border crime.

Among other topics, Patrushev said BRICS was becoming more influential at world’s political stage.

Russia’s and China’s firm stance, supported by other BRICS nations, prevented foreign military intervention in Syria, encouraged the destruction of Syrian chemical weapons, preventing them from falling into terrorists hands, he said.

READ MORE: BRICS establish $100bn bank and currency pool to cut out Western dominance

The NDB was established at most recent 6th BRICS summit in July 2014 by Brazil, Russia, India, China and South Africa. A $100 billion worth bank is expected to become a key lending institution, rivaling Western dominance in the financial sector.

The seventh BRICS summit is scheduled for early July and will be held in the Russian city of Ufa, Bashkortostan, this year. Russia was chosen to assume the BRICS rotating leadership in April 2015.

Article source: http://rt.com/business/262001-brics-west-money-withdrawal/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The tower of the Institute for Works of Religion (IOR) in Vatican (Reuters / Tony Gentile)

The Vatican’s Institute for Religious Works (IOR), notorious for its money laundering and tax evasion, announced a €69.3-million profit in 2014, 24 times bigger than in 2013. Officials credit that to clearing up the bank’s finances.

“The long-term, strategic plan of the Institute revolves around two key objectives: putting the interests of the clients first by offering appropriate and improved services and by de-risking the activities of the Institute,” said Jean-Baptiste de Franssu, IOR chairman since July 2014.

The bank launched a financial clean-up program in 2013 after longstanding accusations of violations, including money laundering and tax evasion.

In that program IOR closed more than 4,500 non-church related accounts, tightened up regulatory standards and focused on improving returns for its customers.

READ MORE: Holy reveal: Vatican bank publishes annual report for the first time

The IOR will donate €55 million of their profits to the Holy See for the Vatican’s main budget. The remaining €14.3 million will be contributed to the IOR’s retained earnings reserve.

The bank works differently from all other financial institutions in the world. The IOR’s workforce is little more than 100 people, mostly Italians. Supervisory functions are performed by the cardinals.

About 50 percent of the bank’s clients are various Catholic organizations. Another 14 percent comes from Holy See institutions, 9 percent are cardinals, bishops and priests, while others are members of the Catholic community.

About 25 percent of the IOR’s operations comprise cash transactions, enough to suspect the bank of money laundering.

READ MORE: Two men caught with $4.1tn worth of fake bonds at Vatican Bank

In September 2010, the Italian financial police seized €23 million worth of Credito Artigiano bank accounts, belonging to IOR, and arrested IOR President Ettore Gotti Tedeschi. He was subsequently sacked from his post in May 2012.

In 2013, a former Vatican accountant Monsignor Nunzio Scarano was accused of illegally transferring money from Switzerland through the IOR.

Article source: http://rt.com/business/261957-vatican-bank-growing-profit/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters/Olivia Harris

Malaysia Airlines, which lost two of its planes last year, is to sack one-third of its 20,000 staff on Wednesday as part of a major reorganization aimed at making the ill-fated company more efficient.

The axing will take place it two steps: first all of the carrier’s 20,000 employees will be laid off, then two-thirds will be rehired under new contracts.

According to the sources, up to 8000 employees on Malaysia Airline’s (MAS) staff may lose their jobs by the end of the year, The Straits Times reported.

“The 6,000 will be terminated at the same time, but some will be released in phases to manage the transition,” the source said.

Executive chairman of PricewaterhouseCoopers, Mohammad Faiz Azmi, who was appointed MAS administrator in charge of staff reduction, will be the man signing the termination letters.

The employees will be sent two letters at the same time: one informing them of their termination, and the other offering either a new contract or an invitation to the retraining program for the sacked workers.

Moral is reportedly low among Malaysia Airline’s staff, who say they’re anxious about their future.

“It is a very sad period in our lives. I never thought this day would come when I first joined the airline more than two decades ago. I cannot even think about how I am going to pay for my house and car loans,” one of MAS’ employees told The Straits Times.

READ MORE: Berlin knew Ukraine unsafe for flights before MH17 crash – reports

Following the restructuring, the carrier will abandon most of its international flights and mainly operate domestically, the Malaysia Chronicle reported.

The staff cuts won’t affect the airline’s flight operations and all prior schedules and reservations will be maintained, Christoph Mueller, Malaysia Airlines CEO, said in a statement.

MAS was heavily in debt even before 2014, but losing two planes last year put the company in an even more difficult situation.

On March 8 last year, Flight MH370, with 239 people aboard, disappeared from radar on route from Kuala Lumpur to Beijing and was never found.

Four months later, on July 17, Flight MH17, with 289 people on board, was shot down while flying over the conflict zone in eastern Ukraine, where the government forces were fighting against the local militias.

Article source: http://rt.com/business/261893-malaysia-airlines-staff-reduction/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / STR

Switzerland has reportedly published the names of foreigners wanted for tax frauds after requests from Russia, France, Germany, India and other countries. This may mark the end of Swiss bank privacy tradition, dating back to the 1930s.

After the government of Switzerland received numerous formal requests from foreign tax authorities, it decided to list the names, birthdates and nationalities of alleged tax evaders in its federal newspaper, Deutsche Welle said referring to the report in Swiss media Sonntagszeitung.

The data will be publicly available on the Internet, which will allow the people on the list to protest the publication in court.

Banks have little interest in seeking customers who no longer keep their accounts in Switzerland, said Alexandre Dumas, a Swiss federal tax authority official.

READ MORE: HSBC exposed in tax evasion data leak

This year has seen Switzerland trying to tackle its reputation of the world’s biggest haven for offshore accounts.

In March, Swiss authorities and the EU reached an agreement to stand against tax frauds. The settlement is aiming at transparency, vital to ensure that each EU country can collect the tax revenues it is due, said Pierre Moscovici, European Commissioner for economic and monetary affairs.

In February, Swiss prosecutors launched a money-laundering probe against British multinational HSBC bank’s office in Geneva. The investigation was based on a series of leaked documents, the so-called Swiss Leaks, which provided information until 2007 and told about more than 100,000 clients with accounts worth $100 billion

Swiss banking secrecy originates from 1934, when a Federal Act on Banks and Savings Banks was introduced. Article 47 of the Act made it a criminal offence to disclose the identity of clients. The 1934 Swiss act is still in force with breach of professional confidentiality in banking is still punishable.

Article source: http://rt.com/business/261857-switzerland-banking-secrecy-law/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Reuters / Beawiharta

Iran and Indonesia have agreed to build 48 small-scale hydroelectric power plants. The two countries seeking to improve ties harmed by sanctions over Tehran’s nuclear program.

The power plants will be constructed in Indonesia by Iranian companies in the next five years, Iranian Energy Minister Hamid Chitchian said after a conference with Indonesian economy minister Sofyan Djalil, Press TV reported Monday.

“Indonesia plans to commission and build 48 power plants in line with climatic changes in the country. Similarly, the country would commission small-scale hydroelectric power plants with 1-10 megawatt capacity range”, Indonesian minister said, adding that Iranian contractors “would be of great help in Indonesian electricity market in that specific activity.”

READ MORE: Obama signs bill letting Congress weigh in on Iran nuclear deal

Djalil headed the Indonesian delegation of trade and economic experts in Tehran for the 11th Iran-Indonesia joint economic commission. With the looming agreement on Tehran’s nuclear program the two countries started improving ties. They signed a memorandum of understanding for cooperation in the fields of industry, investment, trade, customs and banking.

Jakarta intends to resume oil imports from Iran, joining China, India, Japan and South Korea that are the main customers of the Iranian crude in Asia. The country currently imports 800,000 to 900,000 barrels per day of crude oil.

Last year Iran and Indonesia signed an agreement to build a refinery in Indonesia to process 300,000 barrels per day of Iranian heavy crude oil. The project requires around $3 billion of investment, 70 percent of which will be covered by Indonesians and the rest by Iran.

Trade between Iran and Indonesia stood at $450 million last year, a drop on the $2 billion before the West intensified sanctions on Iran in 2012. Banking is the main hurdle in the cooperation as money transactions with Iran have been restricted by sanctions.

Iran and the P5+1 powers (China, France, Russia, UK, US and Germany) agreed on a preliminary deal over the country’s nuclear program earlier in April. Under the framework, Iran will not pursue new enrichment facilities, or heavy water reactors, for 15 years. A final agreement must be reached by June 30, 2015.

Iran was placed under harsh international sanctions as the West believes that it is developing its nuclear program to make an atomic bomb. Tehran has denied all the accusations.

Article source: http://rt.com/business/261801-iran-indonesia-plants-construction/?utm_source=rss&utm_medium=rss&utm_campaign=RSS