January 26, 2021

Veiled Warning to Britain From a Bloc Leader

BRUSSELS — The man who represents the 27 leaders of the European Union warned Thursday of widespread opposition to steps that may be necessary to keep Britain as a member of the bloc.

Herman Van Rompuy, the president of the European Council, said he saw “no impending need to open the E.U. treaties” to address the complaints of countries like Britain that are outside the euro zone and that object to “federal Euroland” rules governing the bloc.

“Nor do I feel much appetite for it around the leaders’ table,” Mr. Van Rompuy said in a speech he delivered Thursday evening
in London at the Policy Network, a center-left research organization.

An aide to Mr. Van Rompuy said the comments were meant to underline that there was no immediate need to change treaties to ensure the stability of the euro and that the comments were not referring to any demands for treaty change that Britain may seek in the future.

Still, Mr. Van Rompuy’s remarks appeared to be a pointed warning to Prime Minister David Cameron, who in January promised British voters a referendum within the next five years on whether to stay in the bloc on revised membership terms, or to leave.

Mr. Cameron’s stance is widely regarded as a bet that his country is big and important enough to win concessions from the bloc, including a change in the European Union treaty if necessary. But a number of European leaders, as well as critics in Britain, have also warned that Mr. Cameron could lose that gamble and end up overseeing the country’s voluntary exclusion from the bloc.

Mr. Van Rompuy also faulted the British approach as overly confrontational in a European Union that has a long tradition of consensual decision-making.

“How can you possibly convince a room full of people when you keep your hand on the door handle?” said Mr. Van Rompuy, without naming Mr. Cameron.

“How to encourage a friend to change, if your eyes are searching for your coat?” he added.

In the speech, Mr. Van Rompuy said that “leaving the club altogether, as a few advocate, is legally possible” but that such a move “would be legally and politically a most complicated and unpractical affair.”

Mr. Van Rompuy’s remarks began soon after Mario Monti, the departing Italian prime minister, warned during a speech in Belgium of renewed dangers to the European Union on its southern fringe.

Mr. Monti was roundly defeated during the weekend in elections that left no party with a majority in the new Parliament in Rome. The ballot also showed the emergence of the anti-establishment Five Star Movement, founded three years ago by the comedian Beppe Grillo, and the resurgence of Silvio Berlusconi, who was forced from office in November 2011 after a collapse in confidence in his ability to run the country.

In his speech, Mr. Monti, who described himself as a fervent supporter of budgetary discipline, said that one of the main problems the European Union faced was that reforms associated with such policies took a long time to bear fruit.

“If the gains from virtue are not seen, the insistence on virtue may be short-lived,” he told an audience of antitrust lawyers at a conference in Brussels, where he formerly served as the bloc’s commissioner for competition policy.

Mr. Monti said that “strategy at the E.U. level” was in danger of being undermined by “the most simplistic, some would say populistic” trends, adding the caveat that he was not referring to the elections in Italy.

Article source: http://www.nytimes.com/2013/03/01/business/global/eu-leader-suggests-europe-will-not-change-to-satisfy-critics.html?partner=rss&emc=rss

News Analysis: In Tighter Loan Rules, Wiggle Room for Banks

Richard Cordray, director of the Consumer Financial Protection Bureau, at a House panel last year.Win McNamee/Getty ImagesRichard Cordray, director of the Consumer Financial Protection Bureau, at a House panel last year.

Homeowners got their first big chance to judge the fledgling regulator charged with policing abusive lending after the introduction of a broad set of mortgage rules on Thursday.

The regulator, the Consumer Financial Protection Bureau, gets mostly high marks for the policies, which are intended to prevent the practices that fueled the subprime debacle and the foreclosure crisis. But the agency made a few concessions to banks that consumers advocates say could leave borrowers vulnerable.

“While the bureau’s new rules promote” affordable loans and better products, “they still leave the door open for abuses,” said Alys Cohen, a lawyer at the National Consumer Law Center.

The new rules, broadly outlined in the Dodd-Frank regulatory overhaul, will have enormous influence on the mortgage market. They are intended to ensure consumers don’t receive home loans with deceptive terms or onerous debt burdens.

In short, banks have to make affordable mortgages, and if they don’t, they face a greater legal liability. Under the new rules, it will be much harder for banks to give out mortgages without properly checking income, or with interest payments that suddenly jump to much higher levels.

“These rules now require lenders to determine that borrowers have enough income to repay loans,” said Michael D. Calhoun, the president of the Center for Responsible Lending. “This common-sense requirement would have prevented much of the damage of the mortgage and financial crisis.”

Even so, lenders managed to put their stamp on the regulation, winning some important features.

As part of a fervent lobbying effort, banks warned repeatedly that strict regulations could crimp lending at a time when the housing market was just starting to get back on its feet. Regulators seemed to give some credence to that concern. Citing the “fragile state” of the housing market, the bureau said it would allow new mortgages to meet more flexible standards for affordability during a phase-in period of up to seven years.

“It appears the rules are written so that they would not disturb the housing recovery,” said Kathy Kelbaugh, a senior analyst at Moody’s Investors Service who focuses on mortgages.

This concession will have implications for a new product called the qualified mortgage. Such loans, which are expected to be the most common, will have to meet the affordability standards that apply to all mortgages. They will also be subject to a significant additional condition: Borrowers’ combined debt payments cannot exceed 43 percent of income.

But the phase-in period will effectively allow banks to make qualified loans with higher debt burdens for up to seven years if the loans conform to standards set by government mortgage entities like Fannie Mae or the Federal Housing Administration. Such entities have reasonably high standards, but it is a loophole that banks could exploit.

The bureau’s biggest headache was deciding how to devise a required legal shield for banks. Such protection would largely insulate banks from lawsuits when certain loans go into foreclosure.

It seems odd that the banks got this advantage, given the abuses during the housing bust. And such shields don’t exist in other important industries; automakers have to comply with clear standards and don’t get automatic legal relief for doing so.

But Congress provided the shield to encourage banks to write qualified mortgages. Lawmakers felt banks might cut back on lending if they feared the new standards increased their chances of getting sued.

Still, the bureau had some freedom. And in the end, the agency chose to apply two types of shields.

Banks get more protection on prime qualified mortgages — those with lower rates made to borrowers with better credit. The shield on these loans is called a safe harbor. This substantially limits a borrower’s ability to claim in court that a loan was not affordable and therefore ran afoul of the rules.

The banks get less protection on subprime qualified mortgages — those with higher interest rates that will most likely go to borrowers with weaker credit. On these loans, the weaker shield gives borrowers more leeway to contest whether a loan was affordable.

Consumer advocates think that all qualified mortgages, not just the subprime variety, should have had the weaker shield. Some analysts think the banks may have been overstating the need for a legal shield to lend.

“Despite the claim that banks can’t make loans without a safe harbor, they have done so for decades,” Ms. Cohen said.

Officials at the federal agency stress that borrowers can still challenge loans made under the safe harbor shield. For instance, a borrower can sue the bank if it can be shown that a loan didn’t meet the basic debt-to-income requirements, and therefore wasn’t considered qualified.

The rules also allow borrowers to introduce oral evidence to make their cases. A borrower could tell the court about a conversation with a loan officer that suggested a loan was unaffordable from the outset and should not have been made. For instance, a borrower might have told the bank that a big bonus might not re-occur, but the bank assumed the payment would be annual.

But consumer advocates and some industry lawyers say that the safe harbor provision, in practice, will make it difficult for borrowers to pursue an exhaustive legal inquiry. So the safe harbor is seen as a big win for the banks.

“I think the safe harbor is pretty safe,” said Elizabeth L. McKeen, a partner at the law firm, O’Melveny Myers.

Consumer advocates also contend that the bureau overemphasized the debt-to-income ratio. Equally important for some homeowners, they say, is how much money they have after making debt payments. The bureau calls this residual income. A lower-income family might have a debt-to-income ratio of 43 percent or below. Yet the household may not have enough money to meet other living expenses like utilities and grocery bills.

The bureau recognizes that residual income is important for some borrowers. For the subprime qualified mortgages, the bureau explicitly allows the borrower to cite insufficient residual income when legally contesting the mortgage. But this residual income feature doesn’t exist for the prime qualified mortgages, which will probably make up most of the market.

The bureau could have demanded lenders take residual income into account for prime qualified mortgages to lessen the chances they find loopholes in the rules. But such decisions reflect the difficulty the bureau will face in policing the industry. Push too hard, and lenders might cut back on lending. Give too much, and lenders might take advantage of consumers.

“There’s this constant struggle between protection and access to credit,” said Leonard N. Chanin, a partner at Morrison Foerster.

Article source: http://dealbook.nytimes.com/2013/01/10/in-tighter-loan-rules-wiggle-room-for-banks/?partner=rss&emc=rss

Roundup: Mets Lose Spring Training Stadium Sponsor

On Friday, workers at the Mets’ spring training ground in Port St. Lucie, Fla., are expected to remove all signs related to Digital Domain, the animation company that held the stadium’s naming rights before filing for bankruptcy three months ago.

The Mets are now looking for a new sponsor for the stadium, owned by St. Lucie County. Digital Domain, which bought the naming rights in 2010 and had the rights through 2018, owed the county $100,000 this year for the rights and owed the Mets a similar amount.

But the county received only two of four required payments, with $50,000 still unpaid, according to Erick Gill, the county spokesman. It was not immediately clear how much the Mets received from Digital Domain and whether the team, too, is still owed money for 2012.

Gill said the loss of a naming rights partner would not hurt the county, because hotel taxes, which pay for the operation of the stadium and the bonds used to finance its construction, are higher than forecast this year.

Attendance at the stadium, which also hosts the St. Lucie Mets of the Florida State League, has been strong, Gill said, and the county receives a percentage of parking and concessions revenue.

The impact on the Mets is less clear. They lost about $70 million in 2011, so every bit of lost revenue hurts. And this is not the first time a spring training naming rights partner has faltered.

Before Digital Domain, the Mets had a deal with Core Communities, which named the stadium Tradition Field, after one of its real estate ventures. But that deal was terminated after Core Communities failed to make its payments.

To generate more revenue, the Mets and St. Lucie County are also trying to lure a second major league team to Port St. Lucie for spring training.

That could require the addition of more offices and practice fields to the facility, which has already gone through several face-lifts. The county has hired a consultant to do a feasibility study.

JACKSON TO JOIN CUBS Edwin Jackson, who went 10-11 with a 4.03 earned run average for the Washington Nationals last season, agreed to a contract with the Chicago Cubs, a person in baseball with knowledge of the deal said. Jackson has a career record of 70-71 with seven teams. (NYT)

POLANCO HEADED TO MARLINS The former All-Star third baseman Placido Polanco agreed to a $2.75 million, one-year contract with the Miami Marlins, plugging the final hole in the team’s projected lineup following a payroll purge.

The 37-year-old Polanco battled injuries this year and hit .257 with 2 home runs and 19 runs batted in in 90 games with Philadelphia. (AP)

Article source: http://www.nytimes.com/2012/12/21/sports/baseball/mlb-roundup.html?partner=rss&emc=rss

DealBook: U.P.S. Offers Concessions to Secure TNT Express Takeover

European antitrust authorities have raised concerns over U.P.S.'s proposed $6.8 billion takeover of TNT Express.Peter Dejong/Associated PressEuropean antitrust authorities have raised concerns over U.P.S.’s proposed $6.8 billion takeover of TNT Express.

LONDON — United Parcel Service said on Friday that it had submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed takeover of the Dutch shipping company TNT Express.

U.P.S. said the remedies would include the sale of certain business units and the granting of access to some of its airline network to rivals. The company, based in Atlanta, did not provide specifics on which of its operations would be sold.

European antitrust authorities had raised concerns that the proposed 5.2 billion euro, or $6.8 billion, takeover of TNT Express would significantly reduce competition in the Continent’s package delivery sector.

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Joaquín Almunia, the European competition commissioner, had called on U.P.S. to offer significant concessions to gain regulatory approval for the takeover.

‘‘The proposed remedies aim to address the European Commission’s concerns regarding the competitive effects of the intended merger on the international express small package market in Europe,’’ U.P.S. said in a statement on Friday.

U.P.S. added that the concessions would not change the terms of its offer for TNT Express.

As part of the concessions, the deadline for European regulators to rule on the takeover has been extended until Feb. 5.

The continuing antitrust concerns have weighed on the deal since it was first announced in March. Stock in TNT Express is currently trading at a 20.5 percent discount to U.P.S.’s offer of 9.50 euros-a-share, though TNT’s share price has risen around 41 percent over the last 12 months.

TNT Express announced earlier in November that it would sell its airline operations to win antitrust approval for the deal with U.P.S.

ASL Aviation, which already owns 90 aircraft used for freight and passenger services, had agreed to buy Group TNT Airways and Pan Air Lineas Areas, which are both owned by TNT. The sale, whose financial terms were not disclosed, is dependent on U.P.S.’s successful take over of TNT Express.

If U.P.S. succeeds in its multibillion-dollar offer, the deal would be largest acquisition in the 105-year history of the American company, whose biggest purchase to date was its $1.2 billion takeover of the Overnite Corporation, in 2005, according to data from Capital IQ.

Article source: http://dealbook.nytimes.com/2012/11/30/u-p-s-offers-concessions-to-secure-tnt-express-takeover/?partner=rss&emc=rss

New York Developers Take Advantage of Financing-for-Visas Program

The number of foreign applicants, each of whom must invest at least $500,000 in a project, has nearly quadrupled in the last two years, to more than 3,800 in the 2011 fiscal year, officials said. Demand has grown so fast that the Obama administration, which is championing the program, is seeking to streamline the application process.

Still, some critics of the program have described it as an improper use of the immigration system to spur economic development — a cash-for-visas scheme. And an examination of the program by The New York Times suggests that in New York, developers and state officials are stretching the rules to qualify projects for this foreign financing.

These developers are often relying on gerrymandering techniques to create development zones that are supposedly in areas of high unemployment — and thus eligible for special concessions — but actually are in prosperous ones, according to federal and state records.

One of the more prominent projects is a 34-story glass tower in Manhattan that is to cost $750 million, one-fifth of which is to come from foreign investors seeking green cards. Called the International Gem Tower, it is rising near Fifth Avenue in the diamond district of Manhattan, one of the wealthiest areas in the country.

Yet through the selective use of census statistics, state officials have classified the area as one plagued by high unemployment, the federal and state records show. As a result, the developer has increased the project’s chances of attracting foreigners who will accept little, if any, return on their investment in the project if it means they can secure American visas for their families.

A senior federal immigration official, Alejandro Mayorkas, acknowledged in an interview on Friday that the program might need more scrutiny. Mr. Mayorkas and other federal officials said they were concerned that some of the maps that New York and other states were approving might not adhere to the spirit and intent of the regulations.

The Times’s review of the program in New York indicates that several other major projects are also based on questionable maps.

For example, the Battery Maritime Building, at the foot of Manhattan near Wall Street, has been classified as being located in an area that needs help attracting jobs. That designation is the result of a development zone whose outlines resemble a gerrymandered political district, project documents show.

The zone snakes up through the Lower East Side, skirting the wealthy enclaves of Battery Park City and TriBeCa, and then jumps across the East River to annex the Farragut Houses project in Vinegar Hill, Brooklyn.

In fact, the small census tract that contains the Farragut Houses has become a go-to area for developers seeking to use the visa program: its unemployed residents have been counted toward three projects already.

The giant Atlantic Yards project in Brooklyn, which abuts well-heeled brownstone neighborhoods, has also qualified for the special concessions using a gerrymandered high-unemployment district: the crescent-shaped zone swings more than two miles to the northeast to include poor sections of Crown Heights and Bedford-Stuyvesant. A local blogger and critic of Atlantic Yards, Norman Oder, has referred to the map as “the Bed-Stuy Boomerang.”

Since 2008, developers have raised or have planned to raise close to $1 billion on these projects in New York City, according to federal and state records. Almost all of that money would come in increments of $500,000 — much of it from residents of China — and pour into wealthy areas.

In interviews, New York State economic-development officials praised the program but were reluctant to accept responsibility for administering it. Indeed, some state officials who certified projects for the program acknowledged that they did not know what was being built. They said they were following guidance from federal regulators.

“This program serves as a valuable tool to support job-creating projects that will put areas of high unemployment on a continued path to economic recovery and growth,” said Austin Shafran, a spokesman for Empire State Development, the state agency that oversees the program in New York.

Urged on by federal and state officials, investors in faraway places like Shanghai and Seoul along with American developers have been flocking to the program, which was created by Congress during the recession of 1990.

Article source: http://feeds.nytimes.com/click.phdo?i=138481adc9000297b5f7ce3ed4f6539a

Facing Call for Concessions, Verizon Workers Vote to Authorize Strike

But the union leaders are resisting any suggestion of givebacks, saying the overall company is making plenty of money. The company earned $6.9 billion in net income for the first six months of this year, amid strong growth in its majority-owned Verizon Wireless cellphone operation. And Verizon’s hefty investment in its FiOS TV and Internet services is starting to pay off.

The battle lines between the sides were drawn more sharply on Thursday, when the Communication Workers of America announced that in balloting by 35,000 of its members at Verizon, 91 percent had authorized their leaders to call a strike as soon as Aug. 7, after the contract expires.

Verizon officials were quick to note that such a vote did not necessarily mean a strike would occur. Such votes are routine in contentious contract discussions, and negotiators usually reach a settlement before the strike deadline.

However, Verizon and union officials agree that the company’s demands are far more sweeping than in previous years. Verizon says it is pushing hard for flexibility and to hold down costs because its wireline business — which, unlike its wireless operation, is heavily unionized — faces such intense competition, much of it nonunion.

“We’re looking to make meaningful changes in the contract, which reflect the state of the wireline business as well as the economy,” said Lawrence Marcus, Verizon’s senior vice president for labor relations. “The wireline business is basically fighting to reverse a 10-year decline in our profitability.”

Verizon is pressing its unionized workers to begin contributing to their health care premiums, proposing that workers pay $1,300 to $3,000 for family coverage, depending on the plan. The company says the contributions are similar to those made by its 135,000 nonunion employees.

Verizon also wants to make it easier to lay off workers without having to buy them out and wants to tie raises more closely to job performance, denying annual raises to subpar performers.

The company also has called for freezing pensions for current employees and eliminating traditional pensions for future workers, while making its 401(k) plans somewhat more generous for both groups. It would also like to limit sick days to five a year, as opposed to the current policy, which company officials say sets no limit.

“Verizon has put on the table the most aggressive set of contract demands we’ve ever seen,” said Robert Master, a spokesman for the communications workers. “From our perspective, this hugely profitable company that made $20 billion over the last four years, despite the worst economy in 75 years, seems determined to turn tens of thousands of secure middle-class jobs into lower-wage, much less secure jobs.”

The union has sought to put Verizon on the defensive, repeatedly highlighting that its top five executives received a total of $258 million, including stock options, over the last four years. The union is planning a big protest Saturday outside Verizon’s headquarters in Lower Manhattan.

“I’m not a financial wizard, but if you can afford to pay a C.E.O. millions a year, then how can you ask workers to slash their benefits?” said Paula M. Vinciguerra, president of the communications’ workers’ local on Maryland’s Eastern Shore. “I was raised with the idea of shared sacrifice.”

Verizon said many field technicians earned $95,000 a year, including overtime, with an additional $50,000 in benefits. But union officials said the field technicians and call center workers generally earned $29 to $37 an hour, translating to $60,000 to $77,000 for a full-time worker, with benefits worth an additional $25,000 a year.

The Verizon contracts that expire at 12:01 a.m. Aug. 7 cover nearly 45,000 workers, from Massachusetts to Virginia, including thousands of Verizon employees in the International Brotherhood of Electrical Workers. That union is holding a separate strike authorization vote.

Jim Spillane, a spokesman for the electrical workers, declined to comment on Verizon’s proposals or the contract talks.

The crux of the clash is Verizon’s financial health. The company says the wireline division is struggling, while the union says Verizon’s overall business is thriving.

Craig Moffett, a telecommunications analyst at Sanford C. Bernstein, said: “It’s hard to argue with Verizon’s basic premise that the wireline business is a troubled business. They are going to have to find ways to shrink that business to maintain any semblance of viability.”

Last year, Verizon’s wireline division trimmed its work force by buying out 11,900 workers. Its wireline operations — which include home phones and FiOS — had revenues of $41.2 billion last year, down 2.9 percent from the previous year. At Verizon Wireless, a joint venture with Vodafone Group, a British company, revenue was $63.4 billion, a 5.1 percent increase over the previous year.

Verizon reported that its wireline operating income was $606 million for the first six months of this year, compared with $9.0 billion at Verizon Wireless.

Jeff Kagan, founder of a telecommunications research company in Atlanta, said Verizon’s landline division had no competition until the last decade.

Verizon has lost business to wireless companies, to companies like Vonage and Skype and to cable television companies, many of them nonunion like Comcast and Time Warner, Mr. Kagan said. “When you have competition with companies that are not unionized, it’s a different world,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=11e670036ffe5878e4edd41b327caa9d

Germany Rejects Talk of Easing Bailout Terms

Debt-ridden Greece wants international lenders to further ease terms of the 110 billion euro, or roughly $160 billion, bailout granted a year ago by the International Monetary Fund and the European Union. It will most likely need additional assistance to plug a 27 billion euro hole next year.

On Tuesday, a day after Standard Poor’s cut Greece’s credit rating again, the country sold 1.62 billion euros of six-month treasury bills at 4.9 percent, up from 4.8 percent in April.

The Irish government, meanwhile, is watching to see what concessions Greece might win in hopes of softening Ireland’s 85 billion euro rescue package.

But Mrs. Merkel, as leader of Europe’s strongest economy and the biggest contributor to the rescue package, gave no indication that Germany would be willing to grant more aid — and certainly not at a meeting of European finance ministers next week.

She said she would wait until officials from the European Union, the European Central Bank and the International Monetary Fund completed their assessment of Greece’s progress, particularly concerning how it was carrying out its “bold reforms.” That report is due in June.

“First we need to hear what the status is,” Mrs. Merkel told reporters in Berlin. “Only then can I decide what, if anything, needs to be done. We don’t do Greece any favors by speculating about more aid.”

She said that Greece had made progress over the last year and that it was always known that “it would be a difficult path.” But she said efforts to improve competitiveness and reduce deficits must continue. “Every country should continue with them,” she said.

Mrs. Merkel faced enormous pressure at home last year not to grant a single euro in aid to Greece until Athens agreed to a tough austerity package and a radical savings program across the public sector.

While such public opposition has subsided, Mrs. Merkel now faces opposition within her own coalition. The Free Democrats, her junior partners, want to push through a motion at their party congress this weekend to prevent any more rescue packages for indebted euro states.

Mrs. Merkel brushed aside this opposition, saying she was convinced the Free Democrats would support the overall package.

Indeed, with Philipp Rösler expected to be elected the new leader of the Free Democrats this weekend — succeeding the foreign minister, Guido Westerwelle — and also taking over the Economics Ministry, Mrs. Merkel can expect more unity inside the coalition, government officials said Tuesday.

A new plan may include pushing back Greece’s budget goals, giving it additional aid and mildly restructuring its sovereign debt, officials and analysts have said.

Irish officials insist that their country’s debt burden, expected by the I.M.F. to peak at 125 percent of gross domestic product in 2013, is manageable — for now.

A leading Irish economist wrote in The Irish Times on Saturday that the country’s debt would hit 250 billion euros by 2014, bringing Ireland’s debt-to-G.D.P. ratio closer to Greece’s. The economist, Morgan Kelly, who has been called Ireland’s Doctor Doom for his gloomy predictions, said the country faced bankruptcy because of the European Union and I.M.F. bailout.

Mr. Kelly accused Patrick Honohan, Ireland’s central bank governor, of putting the European Central Bank’s interests over those of Ireland, which Mr. Honohan denied.

“The heavy debt and the growth of that debt is a serious problem and needs to be managed in discussion and in negotiation with our European partners,” Mr. Honohan said in an interview with the state broadcaster RTE.

Pat Rabbitte, the Irish energy minister, told RTE that the interest rate of 5.8 percent that Ireland is paying on its European loans “must be reduced, and in my own view the debt must also be rescheduled.”

Prime Minister Enda Kenny said in Dublin on Tuesday that talks on reducing that rate were under way with Ireland’s European partners.

European finance ministers will take up the issue on Monday and Tuesday in Brussels. Irish officials are hoping for a reduction of one percentage point.

“After the meeting next week, we will know whether a conclusion can be reached,” Mr. Kenny said, according to Reuters.

German officials, however, backed by the French, have been seeking some concession from the Irish in return for a reduction like the one given earlier to Greece, particularly regarding Ireland’s relatively low corporate tax rate. The Germans want the Irish to come up with some initiative, like agreeing to work on realigning the corporate tax base.

Article source: http://feeds.nytimes.com/click.phdo?i=9d33352ec8228315cc305d8c49981a33

Media Decoder: Live Nation Teams Up With Groupon Amid Worries About Concert Season

Live Nation Entertainment, the world’s biggest concert promoter, is teaming with the popular coupon site Groupon to sell discounted tickets.

The companies announced on Monday that they had formed a joint venture, GrouponLive, which, like Groupon, will offer consumers discounts on tickets for limited periods of time. GrouponLive is to become operational “in time for the summer concert season,” the companies announced. Terms of the deal were not disclosed.

For Live Nation, the arrangement could be a convenient way to help fill up its amphitheaters and sidestep criticism. Last year, with concert attendance off by 9.4 percent, some shows in its amphitheaters — a major part of its summer touring business — were canceled, and at others employees in sandwich signs sold tickets at fire-sale prices. That heavy discounting was criticized by many artist managers, who felt that steep discounts at the door seemed to devalue their artists.

“Our success is based on selling tickets and filling seats and GrouponLive gives us another platform to achieve this,” Michael Rapino, Live Nation’s president and chief executive, said in a statement.

In the usual economics of a concert tour, most of the face value of a ticket goes to the artists, and the promoter makes its profit on ancillaries like parking and concessions. Live Nation owns or controls 48 amphitheaters in North America.

Groupon, founded in 2008, is said to be planning an initial public offering that would value the company at $15 billion or more.

Article source: http://feeds.nytimes.com/click.phdo?i=94a81bbe323cead691d952f31cc986dd

China Policy Main Topic for the G-20

WASHINGTON — The United States and its allies, frustrated in their efforts to pressure China directly to change its economic policies, are seeking to enlist other developing nations in an international campaign that China may find more palatable.

At a meeting of finance ministers from the Group of 20 nations on Friday, the United States hopes to advance a set of proposed standards for judging the risks that individual nations pose to the global economy. Those standards could be used by the end of the year to put a spotlight on China for suppressing its currency to keep its exports cheap.

Even if the exercise succeeds, the benefits are unlikely to be tangible or clear. The United States and China have wrangled for years over the relative value of their currencies. The Chinese have made modest concessions in recent years, but mostly because of internal concerns about inflation and economic dependence on exports.

A senior Treasury official said that it was important for countries to establish shared standards, and in particular to highlight that large deficits and large surpluses were two sides of the same issue and merited the same concern.

“This hasn’t been on the table in the past, but that’s where the conversation is moving now and that’s helpful,” said Lael Brainard, the Treasury under secretary for international affairs.

The purpose of the standards is not lost on China, which has resisted the process. In February, the Chinese fought successfully to exclude one important measure, reserves of foreign currencies, from the list of proposed standards.

China holds more than $2.85 trillion in foreign currency, the world’s largest reserve. It has pursued an aggressive policy of printing renminbi to buy foreign currencies, lifting the value of those currencies and holding down the value of its own.

Earlier this week, a senior Chinese official published an article blasting the standards as a “political tool” intended to make developing nations like China pay for the economic recovery of developed nations like the United States.

Li Yong, vice minister of finance, wrote that developed nations were responsible for overprinting their own currencies, driving up the price of commodities and creating inflationary pressures in developing countries. Mr. Li wrote that the real goal of those countries was to increase demand for their own exports.

“The issue of external imbalances is a sensitive topic related to the development rights and growth potential of China and other emerging economies, and is another political tool, after the exchange rate, used by developed nations such as the U.S. to curb China’s economic development,” Mr. Li wrote in the article, which was published on the Web site of the finance ministry.

Still, China has shifted slowly in the direction sought by the international community in recent years. China’s policy makers adopted a five-year plan in October that calls for domestic consumption to replace exports as the driver of economic growth. The country also has allowed its currency to appreciate 4.4 percent against the dollar since last June. American officials describe this as an effective increase of 10 percent because the rate of inflation in China is much higher than in the United States.

The United States has embraced an elevated role for the Group of 20 as the primary forum for international economic coordination.

The Group of 7, which previously played that role, is composed of nations with economies driven by consumption, and currencies that float freely in response to demand. The new seats at the table, by contrast, are held mostly by nations like China, India and Brazil that manage their currencies to create a competitive advantage for their exports.

There is broad agreement that the unbalanced relationship between those two sets of countries — debtors on the one hand, exporters on the other — is a major fault line that threatens global stability. There is much less agreement about the proper allocation of the economic pain associated with potential solutions.

The goal of the current process is to break that controversial issue into manageable pieces. France, the current chairman of the group, has spent this year simply trying to create agreement on the rules for analyzing nations that can be completed by the time heads of state meet in Cannes this fall. Those rules would be used to single out nations that posed the greatest risks for further study.

A French official said he hoped there would be “incremental progress” on Friday.

As if to underscore the gap that must be bridged, the two sides will meet separately on Thursday. Finance ministers from the Group of 7 will consult quietly in Washington. Meanwhile, heads of state from Brazil, Russia, India, China and South Africa — the emerging powers known as BRICS — are meeting on the Chinese island of Hainan.

The governor of Australia’s central bank, Glenn Stevens, meanwhile warned Wednesday there was too much of a focus on the relationship between the United States and China.

Describing the issue of global imbalances in terms of two countries, he said, “risks oversimplifying problems and therefore lessening the likelihood of solutions.” Mr. Stevens spoke to the American Australian Association in New York.

He noted that the United States once described its trade problems in terms of Japan.

David Jolly contributed reporting from Paris and Xu Yan contributed research from Shanghai.

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