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Europe Keeps Pressure on Athens

July 8, 2013 by Leave a Comment

As many as 5,000 Greeks, including hundreds of angry police officers on motorbikes, joined protests on Monday against renewed calls by international creditors to cut 15,000 civil service jobs, and to put thousands of public workers on reduced wages ahead of possible dismissal, in a country where unemployment already tops 27 percent.

The mayor of Athens was hospitalized briefly Sunday night after workers assaulted him as he left a meeting to discuss municipal layoffs, and the mayor of Greece’s second-largest city, Salonika, threatened to quit on Monday rather than face deeper cuts.

The protests have flared after a period of relative calm in Greece and revived questions about the ability of Prime Minister Antonis Samaras to carry out the cuts being demanded — and indeed about the very survivability of his government.

International creditors have already granted more than 200 billion euros, or $257 billion, in financial assistance to the euro zone’s crisis-hit countries, but the demands for deeper reforms that have accompanied the aid are badly dividing the government in Greece, as well as those in Italy and Portugal.

Last week, the government of Prime Minister Pedro Passos Coelho of Portugal, considered something of a model nation by international markets and creditors, nearly came apart as support waned for the austerity program he was charged with implementing in exchange for Portugal’s 78 billion euro bailout.

He reshuffled his cabinet over the weekend after Finance Minister Vítor Gaspar quit abruptly last week.

Top of the agenda at the ministers’ monthly gathering in Brussels was how much of the next batch of a promised 8 billion euros in emergency aid they should release to Greece.

At a news conference in Brussels on Monday, the Dutch finance minister, Jeroen Dijsselbloem, said euro ministers decided to make a disbursement of 2.5 billion euros to Greece, with a further disbursement of 500 million euros in October, on the condition that the country meets a set of reform commitments by July 19.

In addition, the ministers agreed that profits of about 2 billion euros made by the European Central Bank on the purchases of Greek bonds would be given to Greece in two disbursements.

Rather than pay the bulk of Greece’s aid in a lump sum, the ministers stuck to a plan to stagger the aid in order to keep up the pressure on Greece to reform what they say is a bloated and inefficient public sector. There was little hint of relief on the horizon.

“The path for Greece will remain a difficult one,” said Wolfgang Schäuble, the German finance minister, ahead of the meeting. “I would warn against any illusions.”

Despite the evident anger in the streets in Greece, representatives of Greece’s so-called troika of lenders — the International Monetary Fund, the European Central Bank and the European Commission — made clear that they expected the Greek government to do more, including curbing excessive spending in health care.

But the Greeks have little choice but to comply. Three years after the government’s debt crisis blew a hole in its public finances and threatened to knock the country out of the euro zone, Greece remains dependent on two aid packages of 240 billion euros.

Payments to Greece of smaller amounts of bailout money began late last year, when lenders began pressing for tighter control in exchange for disbursements following serious concerns the country was backsliding on reforms like dismantling protected sectors of the economy.

One strategy ministers were discussing on Monday evening was to slice one component of the aid from European governments worth 4.8 billion euros into two or three parts, and to impose further strictures on Greece that must be met before the end of the month for those slices to be released in full, or in part.

A final decision on the aid could be made in a teleconference later in July, according to Euorpean Union diplomats with direct knowledge of the discussions.

James Kanter reported from Brussels.

Article source: http://www.nytimes.com/2013/07/09/business/global/greece-and-lenders-near-deal-on-new-austerity-measures.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Ford Profit Rises on Strong North American Sales

April 24, 2013 by Leave a Comment

Ford, the nation’s second-largest automaker, said its revenue grew 10 percent in the quarter to $35.8 billion, compared with the year-ago period, and its market share continued to increase in the United States.

Despite unsettled economic conditions in international markets, the company reiterated forecasts that its full-year profits would at least match its performance in 2012.

“Our strong first-quarter results provide further proof that our One Ford plan continues to deliver,” said Alan R. Mulally, Ford’s chief executive.

Ford shares closed Tuesday at $13.36, up 2.3 percent and were up slightly in premarket trading. The results were better than analysts had expected, with Ford reporting a pretax profit of $2.1 billion, or 41 cents a share, exceeding forecasts of 37 cents a share, according to Thomson Reuters.

Ford said that strong sales in its core North American market propelled the company to its 15th consecutive profitable quarter. The company’s sales in the United States rose 11 percent in the first three months of this year, compared with a 6 percent increase for the overall industry.

In North America, Ford posted a pretax profit of $2.4 billion, a 14 percent improvement over the same period a year ago. The company said it was the best quarterly performance since it began reporting the region as a separate business unit in 2000.

The company has steadily rebuilt its product lineup in recent years, bringing out new versions of mainstay vehicles like the Explorer SUV and expanding production of smaller, more fuel-efficient cars like the Focus.

But Ford, like most other major automakers, continued to struggle overseas in the first quarter.

The company reported a pretax loss of $462 million in Europe – about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expects to lose up to $2 billion this year in Europe, where weak economic conditions have driven new vehicle sales to their lowest level in decades.

The company is closing a major assembly plant in Belgium, and accelerating other cost cuts in Europe. Ford said the “outlook for the business environment in Europe remains uncertain.”

In South America, Ford reported a pretax loss $218 million, after earning a profit of $54 million in the same period last year. The company said currency issues in Venezuela and Argentina depressed its results, but that it still expected to break even in the region for the entire year.

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it earned a pretax profit of $6 million in the region compared with a $95 million loss a year ago.

Article source: http://www.nytimes.com/2013/04/25/business/ford-profit-rises-on-strong-north-american-sales.html?partner=rss&emc=rss

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Thailand Set to Sell Off Huge Stockpile of Rice

March 28, 2013 by Leave a Comment

SUPHAN BURI, THAILAND — Thailand is set to sell 500,000 metric tons of rice on world markets at a loss as it scrambles to offload a record stockpile deteriorating in warehouses filled with grain bought under a government program.

The two-year-old policy of paying farmers more for rice than it is worth on international markets is straining the country’s finances, has cost Thailand its spot as world’s top exporter of the grain and has provoked concern at the World Trade Organization.

Although officials publicly deny that the politically sensitive effort is in a crisis, the government is looking at measures to stem ballooning losses that so far are estimated at $6 billion.

A Thai official also said this month that the government might cut the price it pays to a level closer to the value of rice in international markets, prompting an angry response from farmers. Bangkok may also stop buying lower-quality strains of the crop.

Rival producers like India and Vietnam, which have stepped into the vacuum caused by the exit of Thai exporters from the market, are watching closely in case Thailand dumps millions of tons of rice onto well-supplied world markets, causing prices to slump.

In questions brought before a World Trade Organization committee this week, the United States again challenged Thailand to explain how it planned to dispose of the rice.

Government stockpiles are estimated at a record 17 million metric tons of milled rice, nearly twice what Thailand used to export each year before the program was implemented two years ago.

An unraveling would be politically costly for Prime Minister Yingluck Shinawatra, given that the program helped her win millions of rural votes when she was elected in 2011.

Farmers say payments have been delayed, with the state bank running the program complaining that it has received only a fraction of the funds needed.

“The government might have run out of money. I’ve had to wait for two months,” said Prasert Chamsopa, 66, a farmer in the rice-growing province of Suphan Buri who had sold 35 tons from his paddy to the government.

According to the agricultural cooperative in the province, which is north of Bangkok, more than 1,000 farmers have experienced similar problems and were getting ready to stage coordinated protests with farmers in other provinces.

That leaves the government in a bind: It is committed to buying yet more rice, which it has no room to store and which it is unable to sell without suffering a huge loss.

One grade of Thai rice was offered at $545 per metric ton this week, down from $570 early this year but still above offers for the same grade from India of as much as $450 per ton and from Vietnam of about $400 a ton.

A Commerce Ministry official said that Thailand planned to release as much as 500,000 metric tons from older crops onto the market by April, and that the sale would be based on market prices.

“We accept that some of the rice is from the previous crop, which is quite old and the quality is not very good, so it’s impossible to ask for very high prices,” said Thikumporn Nartworathus, deputy director of the foreign trade department of the Commerce Ministry, adding that it would be sold via a tender or government-to-government deals.

Traders and industry officials say the government will suffer big losses if it sells now with plentiful supplies available from India and Vietnam and with the baht hitting a 16-year high this month, making Thai rice more expensive in dollar terms.

The intervention program, criticized by academics, economists and the International Monetary Fund, is coming under increasing global scrutiny.

At the W.T.O.’s agriculture committee meeting this week, Washington asked Thailand to say whether stocks were being exported or used domestically.

In questions seen by Reuters, the U.S. delegation said Thailand had previously said that data on the program, including figures on rice exports, were on government Web sites, but that the data had been discontinued.

Article source: http://www.nytimes.com/2013/03/29/business/global/thailand-set-to-sell-off-huge-stockpile-of-rice.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,