Archives for November 2015

Protests also occurred in 12 other Greek towns and cities, with pensioners holding placards and chanting “We can’t live on 300 euro.”

Pensions are a vital source of income for families in Greece, and have been cut repeatedly during the last years of austerity.

READ MORE: Athens strikes deal with creditors to unlock €12bn – minister

“Pensions will be cut. The cuts in health care are huge. We’re at the point of not having health care, of not having medication. We can’t just idly stand by,” said Yannis Antoniou, head of a bank pensioners association.

Pensioner Christos Kirikas told Reuters that the administration of Greek Prime Minister Alexis Tsipras is to be blamed for the ongoing economic crisis.

“They need to hear us. They should be ashamed of themselves, these parties on the left who are starving us. I worked for 50 years of my life and now we are going hungry. Why is this happening?”  Kirikas said.

Tsipras called on the leaders of the Greek opposition parties to hold an emergency meeting to seek consensus on pension reform.

The nation’s discontent has been growing since the government agreed to accept unpopular terms of a €86 billion bailout. It took a long time for Athens to strike a deal with the creditors who demanded large-scale reforms in the pension scheme and labor market as well as changes to the tax system and other austerity cuts. In August, international lenders (the IMF, the ECB and the European Commission) agreed to a third bailout program for crisis-stricken Greece.

READ MORE: €86bn loan over 3 years: Eurogroup agrees to launch third bailout program for Greece

Earlier this month, the country’s administration approved a law, scrapping most early retirement benefits, raising the retirement age and increasing contributions for healthcare. The regulation was passed to unlock the bailout funds and forced thousands of angry workers out on the streets.

Article source: https://www.rt.com/business/323653-greece-pensioners-protests-austerity/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“In the heat of the moment, without all the information, it would be wrong to make unguarded statements,” Albayrak said at his swearing-in ceremony in Ankara. “We have close friendly cultural and economic relations with Russia not only in energy, but also across other economic sectors. I am not pessimistic about our energy relations.”

The minister assured the Turkish people that they should not fear the coming winter due to concerns that Russia could halt economic cooperation.

Russian gas makes up for about 43 percent of the Turkish market. Last year, Russia supplied 27.4 billion cubic meters (bcm) of gas to the country, primarily through the Blue Stream pipeline that passes across the Black Sea. The two countries agreed to increase the supplies of the Russian gas to 30 billion bcm due to Turkey’s growing energy demand, especially in the winter months.

Nuclear energy is also an area of energy cooperation between the two countries.

Turkey relies on Russia for almost 65 percent of its energy imports. In 2010, the two countries signed an agreement under which Russia’s Rosatom will construct Turkey’s first nuclear power station at Akkuyu.

Moscow and Ankara have the promising Turkish Stream project. The pipeline aims to deliver Russian natural gas to Turkey via the Black Sea. The construction of the pipeline which was scheduled to begin in June was delayed as the two countries failed to reach an intergovernmental agreement.

However, Tuesday’s events are likely to affect future joint projects. A Russian Su-24 bomber was shot down by Turkish fighter jets near the Turkish-Syrian border. Turkey claimed that the plane violated Turkish airspace and did not respond to warnings.

Russia insists the aircraft stayed in Syrian airspace the entire time. The one surviving Russian pilot stated that the jet never violated Turkish airspace and no warning was given.

Russian President Vladimir Putin called the incident “a stab in the back delivered by accomplices of the terrorists,” and warned it would not go unanswered.

Article source: https://www.rt.com/business/323450-turkey-reaction-economic-ties/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Major operators Pegas Touristik, Natalie Tours, Biblio Globus and Tez Tour have announced they are ending package holidays to Turkey.

Russian Foreign Minister Sergey Lavrov canceled his visit to Istanbul over the jet incident and recommended Russians not visit Turkey in the near future.

The boycott could be a serious blow to Turkey’s tourism industry. Turkey is one of the favorite and main tourist destinations for Russians. More than three million tourists from Russia visited the country last year, with over one million holiday makers in the first half of 2015.

The tourism industry accounts for 11 percent of Turkey’s GDP, or $170 billion. The disruption of flights from Russia could cost Turkey about $30 billion a year, according to analysts.

President Putin warned Ankara on Tuesday that the downing of the Russian warplane will have grave consequences for Russia’s relations with Turkey. Most experts expect Moscow’s response to be economic.

The latest events could bring considerable damage to the Turkish economy, said Vice President of the Center for Strategic Communications Dmitry Abzalov. 

“Right now, relations between Moscow and Ankara are tense. Primarily it concerns the transportation of energy and nuclear power, and other sectors as well,” Abzalov told the Prime Agency.

The construction of Turkey’s first nuclear power plant at Akkuyu by Russia’s Rosatom could be hit the hardest, according to analysts. Russia and Turkey signed an agreement on the $20 billion project four years ago. The nuclear power plant with a 4800 megawatt capacity could allow Ankara to reduce the cost of power generation and energy. The country is interested in developing its own generating capacity.

Another major project for the two countries is the Turkish Stream pipeline which aims to deliver Russian natural gas to Turkey via the Black Sea. The construction of the pipeline which was scheduled to begin in June was delayed as the two countries failed to reach an intergovernmental agreement. It could possibly be frozen now, according to experts.

On Wednesday, Russia’s food safety regulator Rosselkhoznadzor stopped a 162 ton shipment of chicken from Turkey for not having proper food safety certificates.

Trade between Russia and Turkey was over $30 billion at the end of 2014. Last month Russian Deputy Foreign Minister Alexei Meshkov said trade could reach $100 billion with the help of joint projects.

Turkey is one of the most important suppliers of fruits and vegetables to Russia, and its role in the Russian market has increased since Moscow’s introduction of the food embargo on EU countries. The loss of this market will be significant for Ankara, experts say.

“There are a lot of Turkish companies operating in the construction business in the Russian market; there is cooperation in the tourism sector. The termination of relations with Moscow on these issues will be negative for the Turkish economy, and it will hit the national currency the lira,” Abzalov said.

A Russian Su-24 bomber was shot down on Tuesday by Turkish fighter jets near the Turkish-Syrian border. Turkey claims that the plane violated Turkish airspace and did not respond to warnings. Russia insists that the plane remained in Syrian airspace.

Article source: https://www.rt.com/business/323400-russia-business-turkey-jet/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Turkish social media has posted photos of Turkish President Recep Erdogan’s son Necmettin Bilal having dinner in an Istambul restaurant with an alleged ISIS leader, who it is claimed participated in massacres in Syria’s Homs and Rojava, the Kurdish name for Syrian Kurdistan or Western Kurdistan.

There is speculation Bilal Erdogan is directly involved in the black market oil business with Islamic State.

“IS has big money, hundreds of millions or even billions of dollars, from selling oil. In addition they are protected by the military of an entire nation. One can understand why they are acting so boldly and blatantly. Why they kill people in such atrocious ways. Why they commit terrorist acts across the world, including in the heart of Europe,” said Russian President Vladimir Putin on Tuesday, after a Turkish F16 downed a Russian Su-24 jet near the Turkish-Syrian border.

Last October, the US Under Secretary for Terrorism and Financial Intelligence David Cohen said Islamic State was earning $1 million a day from oil sales. “According to our information, as of last month, ISIL [now more commonly known as ISIS] was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transported the oil to be resold. It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq, and then resold into Turkey,” he said.

According to Russian Prime Minister Dmitry Medvedev, the middlemen in Turkey are not only entrepreneurs, but are Ankara officials. Turkey is protecting Islamic State because of “direct financial interest of some Turkish officials relating to the supply of oil products refined by plants controlled by ISIS.”

Russian political analyst Igor Yushkov from the National Energy Security Fund said Moscow’s anti-terror operation in Syria makes such business much more difficult.

“Nowadays the truck columns have to disperse and their payload has grown smaller. Before the operation buyers would visit the oilfields themselves, now they have had to organize a new cluster,” he told Gazeta.ru. He added that oil extraction will decrease because ISIS lacks qualified specialists.

A member of the expert council of the Russian Oil Industry Union Eldar Kasayev said Islamic State is selling oil at $15–25 per barrel, which is much cheaper than the Brent benchmark, trading at $45-50.

“By reselling it, Ankara has the opportunity to earn extra income and continue to bomb the Kurds, saying its bombing radicals,” he said.

LISTEN MORE:

Article source: https://www.rt.com/business/323391-isis-oil-business-turkey-russia/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“There is practically no repair work going on in Ukraine”, Novak told Vesti FM.

“Extremists don’t allow workers to repair the damaged power stations. At the same time, it is strange that the authorities in Ukraine cannot provide access to the energy facilities,” he added.

Members of the neo-Nazi Right Sector group and Crimean Tatar activists in the Kherson region have been reportedly blocking repair work at four sites, thwarting promises made by the Ukrainian Energy Ministry to repair the destroyed transmission towers and power lines within days.

READ MORE: State of emergency, blackout in Russia’s Crimea after transmission towers in Ukraine blown up

According to Novak, the energy crisis is trouble not only for Crimea, but for the neighboring Kherson region in Ukraine and Kiev’s energy sector as a whole. In response, Russia could cut off coal supplies to Ukrainian power stations, which could partly disrupt their output.

Novak said Crimea’s local power plants are now covering 35-40 percent of the energy needs of the peninsula. An additional 300 diesel generators will be sent from the Russian mainland, he added.

Last Sunday, Crimea switched to autonomous reserve power after transmission towers in the adjacent Ukrainian Kherson region were blown up, causing a blackout. Nearly 1.9 million people were left partly or fully without electricity.

Crimea gets about 70 percent of its energy from Ukraine. To cut the dependence from Kiev, Russia is now building a power bridge from the mainland to the peninsula. The bridge will be constructed in two stages. The first is expected to be operational before the end of the year and provide Crimea with 400 MW of power. The second stage will increase the power to 800-840 MW and is scheduled to be finished next summer. Crimea’s consumption is currently 1,000 MW per day, according to Novak.

Article source: https://www.rt.com/business/323234-crimea-russia-energy-ukraine/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

The number of new Chinese businesses created annually has nearly doubled since 2010, increasing from 811,100 to 1,609,700 last year, the research revealed.

The Chinese government has ramped up efforts to support the slowing economy. It is stimulating new business creation, particularly in IT. Beijing has decided to transform the economy from exports-and investment-orientated into one led by consumer spending and services. Earlier this month, the country set a goal to achieve a “moderately prosperous” society by 2020.

The United Kingdom is second after China with 581,173 newly established businesses in 2014, compared with the 385,741 start-ups created four years ago.

“New business creation is accelerating more quickly in the UK than in any of its Western rivals,” the UHY report said.

India came third on the list with a 46 percent increase in the number of start-ups. Almost 100,000 new businesses were created in the country last year.

“Western European economies tended to see a bigger increase in the number of new business ‘births’ compared to other developed economies,” the report noted.  The UK, Italy, Germany, and France had increases in the number of new businesses higher than the G7 average of 31 percent.

According to the research, many countries have experienced an explosion of alternative finance providers, which helped improve start-ups’ access to finance. It also noted that governments can’t afford slowing the introduction of more business-friendly policies if they want to sustain growth in the number of new businesses and to manage the global impact of the slowdown in the Chinese economy.

“The next few years are not going to be without their own challenges, and governments globally need to find ways to help these new start-ups to grow into successful businesses and even the next generation of multi-nationals,” said the Chairman of UHY Bernard Fay.

Article source: https://www.rt.com/business/323122-china-businesses-creation-research/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“OPEC has to do something very soon … We don’t agree with the position that says the market, some way, is going to dictate the price of crude oil. We don’t agree with that position of Saudi Arabia,” the minister said on the sidelines of the Gas Exporting Countries Forum (GECF) summit in Tehran.

He also told reporters that Venezuela is urging the cartel to adopt an ‘equilibrium price’ which covers the cost of new investment in production capacity. The country sees the `equilibrium price’ at $88 a barrel, according to Del Pino, who added that Saudi Arabia and Qatar are to consider the proposal.

“We cannot allow that the market continue controlling the price,” he said. “The principles of OPEC were to act on the price of the crude oil, and we need to go back to the principles of OPEC.”

According to Del Pino, low oil prices would affect future oil investment. That could mean not meeting future demand growth for oil and could lead to a spike in prices later.

“And ‎we don’t want that kind of cycle of low price and high price, it is not good for consumers or producers. We need to send to the market a signal of stabilization, and that signal of stabilization is not what we are doing now…. We are destroying the price of crude oil. The speculative market is the one that is controlling the market,” Del Pino said.

OPEC ministers are planning to meet on December 4 to determine the cartel’s output policy. The group of 12 OPEC countries supplies about 40 percent of the world’s production. In July its output hit a three-year high, when the cartel pumped 31.5 million barrels per day (bpd).

Despite the perpetual appeals to reduce output and support crude prices, OPEC has been refusing to do so as the organization is trying to maintain its market share.

Oil prices have almost halved in the last 12 months as a result of a global supply glut.

Brent futures for January were trading 93 cents lower on Monday, at $43.73 per barrel. The price for West Texas Intermediate was down one dollar 25 cents at $40.65 per barrel at 11:00am GMT.

Article source: https://www.rt.com/business/323079-venezuela-oil-price-opec/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“It’s not a secret that the European cheese culture is at a much higher level than it is in Russia. That’s why we’ve come up with an idea to send our technologist to France. We intend to make cheese superior to the one made in Russia now,” said Taras Kozhanov the Director of local maker Lukoz Saba.

According to Kozhanov, his dairy had an idea to make European products long before the embargo, but the Kremlin’s decision to ban food from the EU has sped up the process.

Despite French technology, raw materials in Lukoz’s cheese will be mostly Russian, said Kozhanov.

“As you know, cheese is 95 percent milk. Certainly, all the milk will be Russian. However, we use French and Dutch yeast, because Russian yeast is inferior in quality,” he said.

“There is good milk in Russia. But you have to find it and pay more. I hope that with time Russian producers will understand that it’s more profitable to make good milk, not just milk,” Kozhanov added.

There are lots of ways to do business, but sending workers to French dairies is the best way to understand the process, said the cheese maker. Later, Lukoz wants to invite French specialists to Russia.

Kozhanov said Russian authorities haven’t made any specific requirements concerning the production and are offering subsidies if the company provides certain paperwork. Lukoz employs 200 people and intends to double that number soon.

The cooperation between the countries is facilitated by Business France, a French agency for export promotion. However, the Kremlin’s policy to make and buy Russian has made French exporters change the way they do business in Russia.

According to the head of its Moscow food and agriculture department Natalya Shtykalo, the government agency is now exporting technology to Russia instead of food.

“Russian cheese makers are now faced with an import substitution task, so are other producers. We are also working in accordance with Russian government policy. Thus, we recently invited Russian goat cheese makers to France. One of them will buy a big herd of Alpine goats to make French cheese in Russia,” she said.

“Russian citizens are lacking quality French cheese. The small market offered by Switzerland, Argentina, Morocco, Tunisia and other exotic producers is not enough for Russia,” Shtykalo added.

Article source: https://www.rt.com/business/322872-french-cheese-russia-dairy/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

In December, EU officials are due to decide on sanctions policy against Russia.

According to Wall Street Journal sources, Brussels is considering three options. The toughest one includes extending sanctions by a year; a milder ruling includes half a year rollover. And the third option is a three-to-four month extension to show Moscow that tensions are easing.

“The fact that we have Russia and the West on speaking terms again is a good thing. It could lead to better cooperation, and better cooperation could lead to reconsidering the sanctions. We are seeing a situation that seems to be more an overlap in common interests,” Moritz Kraemer, managing director of sovereign ratings at Standard Poor’s, told Bloomberg.

But besides certain advantages, the easing of sanctions would be a challenge for the Russian economy.

Pros

Russia’s investment climate will improve. European and US investors will be able to return to the Russian market. This will help to reverse capital outflow.

Russian banks and companies will return to the global financial markets. At present, they are cut off from long-term (over 30 days) international financing by western banks.

According to Rosneft CEO Igor Sechin, the Russian oil major hasn’t cancelled any projects with western companies. The lifting of sanctions is likely to speed up these projects.

A demand for the dollar will drop, and the Russian ruble is likely to significantly strengthen. This will increase people’s wages in dollar terms, and is likely to boost consumer spending, currently suffocating under a weak domestic currency. Consumers will also have more options with goods that are currently banned in Russia returning to the shelves.

Cons

The strengthening ruble in combination with low oil prices poses a problem for the Russian budget. Moscow calculated on $50 per barrel crude and 63 rubles per dollar exchange rate for its 2016 budget. A weaker ruble helps offset low oil prices.

This spring, when the ruble was at its strongest in 2015 (49-50 rubles per dollar), was the toughest period for the Russian budget. Russian business daily Kommersant estimates the budget could lose about 800 billion rubles because of the difference between real and projected oil prices.

However, if oil prices rebound or GDP grows more than the targeted 0.7 percent, this problem could be mitigated.

Article source: https://www.rt.com/business/322806-russia-sanctions-lifting-budget/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“We have hailed the banking union in the eurozone after 2012-2013. If you look at the details, it’s a banking disunion. There’s more divergence between our banking sectors now than there was before, under the guise of supposedly a banking union,” the former finance minister told RT’s Max Keiser.

WATCH MORE: MAX KEISER INTERVIEW WITH YANIS VAROUFAKIS

He added that the “European Stability Mechanism” has evolved into an “instability mechanism.”

Referring to his resignation in July 2015, Varoufakis said he did not believe Prime Minister Tsipras should have surrendered to the country’s creditors at the time, largely because he didn’t believe Greece would actually have been expelled from the eurozone if it didn’t comply with the strict terms imposed. 

However, the Greek parliament went on to pass the sweeping austerity measures demanded by lenders in July, in order to open talks on a new multi-billion-euro bailout package to keep the country in the euro.

“The way [Tsipras] puts it is that he had a choice between instant death, being expelled from the eurozone, or signing an agreement that would buy him some time. Where we disagreed was where this whole thing is going to end up if we surrendered, and also what it would mean to actually carry on the fight…,” Varoufakis said.

But despite disagreeing with Tsipras, the former finance minister acknowledged that “we shouldn’t underestimate the severity of the situation he [Tspiras] was facing” at the time.

READ MORE: Greek snap election: New Democracy concedes defeat to Tsipras’s leftist Syriza

Addressing the “bureaucrats of the Troika” on the other side of the negotiating table, Varoufakis noted that they “loathe the notion of a people that are empowered enough to vote in a government that says ‘no’ to them.” He said they “lambasted” Greece, “lied through their teeth about what we were proposing,” and “pretended we didn’t have reasonable proposals.”

“The only reasonable proposals on the table were ours,” he said.

Article source: https://www.rt.com/business/322722-greece-bailout-troika-varoufakis/?utm_source=rss&utm_medium=rss&utm_campaign=RSS