November 22, 2024

You are here: Home / Archives for national leaders

Germany Approves Euro Bailout Plan; Slovakia Vote Awaits

September 30, 2011 by Leave a Comment

By passing the measure, Germany promised to increase its share of the loan guarantees to 211 billion euros, or about $287 billion, from 123 billion euros, as agreed by national leaders in Brussels back in July. Under the euro zone’s tortuous procedures, however, all 17 European Union countries that use the euro must approve the agreement, a process that has revealed ever more fissures, layers of decision-making and political complexity that add up to a worrisome inability to react quickly and decisively to upheaval in fast-moving financial markets.

“The markets see that Europe cannot decide anything quickly, and uncertainty is always an inducement to speculation,” said Gustav Horn, director of the Macroeconomic Policy Institute in Düsseldorf, Germany.

The process also leaves the European Union potentially hostage to its smaller members. A significant hurdle was overcome when Finland passed the bailout fund measure on Wednesday despite domestic objections and an unresolved dispute over its demand for collateral from Greece. (Estonia and Cyprus approved the plan on Thursday, and a vote in Austria is expected on Friday.)

Similar fears have been voiced about Slovakia, an impoverished nation from the former Communist bloc whose people suffered mightily to adopt the euro and have little stomach for bailing out richer countries like Greece. Of the handful of countries left to approve the measure, it is the only remaining wild card. Some leading Slovak politicians have been highly critical of the agreement, and the governing coalition itself is divided about supporting the fund.

The speaker of Parliament in Slovakia, Richard Sulik, has said he will do whatever he can to stop the bailout fund from coming to a vote, even as advocates have desperately sought a compromise.

But the combined pressure of the euro zone members will probably be more than Mr. Sulik and other opponents can bear. A spokeswoman for Parliament, Beata Skyvova, said that the speaker and the prime minister met on Thursday, but that no deal had been announced.

Analysts have already said that the fund, even if it passes in all 17 countries, will probably be too small to defend against speculative attacks on deeply indebted European nations. Nevertheless, although the German vote perhaps offered nothing more than momentary relief, it was the crucial step to move the fight forward to the next stage.

“Without Germany’s participation, nothing would have been possible,” Mr. Horn said. “This project would have been dead.”

For the beleaguered German leader, Chancellor Angela Merkel, Thursday’s vote represented a sorely needed victory. Mrs. Merkel has been sharply criticized for her opposition to economic stimulus and disparaged over her slow reaction to the crisis. Under her stewardship, the project of European integration seems to move forward only when forced by circumstances and specifically by financial markets. Yet step by tentative step, move forward it has.

In the historic Reichstag building, graffiti from Red Army soldiers who conquered the capital of Nazi Germany still adorn the walls. Outside the Reichstag, the home of the German Parliament, a protester held a sign reading “Europe Finance Suicide Fund,” a play on the name of the bailout fund, the European Financial Stability Facility.

“The chancellor’s path is extremely contentious, with the public plainly opposed because it is unclear what limit there is to how far Germany has to jump in to cover Greece’s debt,” said Werner J. Patzelt, a political scientist at Technical University in Dresden.

The German public is staunchly against paying the debts of other Europeans, stereotyped in the news media here as spendthrifts compared with the virtuously frugal Germans. But as Europe’s largest economy, Germany is the only nation with the fiscal wherewithal to pull fellow countries in the euro zone out of trouble.

Government statistics on Thursday showed that even as economic growth has stalled, unemployment has continued to fall in Germany, defying the trend that has pushed joblessness higher across Europe, particularly in recession-stricken economies like Greece and Spain. The Federal Labor Agency reported that the unemployment rate dropped to 6.6 percent in September from 7 percent in August.

Germany continues to preach savings over stimulus to contain the debt crisis, withstanding sustained pressure from American policy makers and opting for the path of fiscal discipline supported by the Netherlands and Finland.

“We here in Germany are now on the right path, and the rest of Europe has recognized that,” said Joachim Pfeiffer, a member of Parliament from Mrs. Merkel’s Christian Democratic Union. “Just a year ago we were still fiercely criticized, including by the Americans. Today, Germany is the model for Europe.”

Stefan Pauly contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=c823877cfeb7d472f72080cf94fd5d74

Filed Under: Business News Tagged With: , ,

European Union Seeks Power to Block Bilateral Energy Deals

September 8, 2011 by Leave a Comment

BRUSSELS — The European Union’s executive arm announced plans on Wednesday aimed at stopping its countries from striking bilateral deals that cede too much power to oil and gas exporters like Russia.

Europe needs to look “beyond its borders to ensure the security of energy supplies” and “act together and speak with one voice,” the European Union energy commissioner, Günther Oettinger, said at a news conference.

The proposal represents a bid by the authorities in Brussels to take more control over a sector where countries zealously guard their sovereignty and where powerful utilities still dominate a number of crucial markets.

Mr. Oettinger said he wanted the right to demand information on energy deals involving member states and third countries before such deals are signed. Under the plan, the European Commission, the union’s executive arm, would publicize any concerns. If those concerns were ignored, the commission could sue member countries to change the terms of any agreements that threatened to jeopardize the union’s overall energy security.

The proposal would require approval by member states and the European Parliament.

Governments might balk if major oil and natural gas companies vying for new contracts in places like Libya insisted that sharing such information would jeopardize their negotiations.

But Mr. Oettinger said he was optimistic for passage after national leaders in February backed the idea of more centralized management of international energy deals. He also said the commission could be trusted to preserve confidentiality in commercially sensitive cases.

European Union authorities struggled last year to make sure Poland and Russia gave other operators access to a natural gas pipeline called Yamal, which is partly owned by Gazprom, the Russian monopoly gas exporter.

Europe’s relations with Russia in the energy sphere have long been tricky.

Russia supplies nearly a quarter of Europe’s natural gas. But those supplies have been interrupted in recent years because of disputes between Russia and its neighbors, like Ukraine, leading to severe shortages in parts of Europe in the depths of winter.

Mr. Oettinger said there were not “any immediate concerns” about cutoffs this coming winter as a result of continuing tension between Russia and Ukraine.

But European authorities continue to push plans to build a pipeline called Nabucco to deliver natural gas to Europe from the Caspian region, bypassing Russia.

On Wednesday, Mr. Oettinger reiterated his call for European Union governments to give him a mandate to negotiate an agreement with Azerbaijan and Turkmenistan on a trans-Caspian gas pipeline. That pipeline would be a crucial feeder for Nabucco. But Russia has long held influence in the Caspian region and wants to tap natural gas there, too.

Mr. Oettinger also said he could request similar mandates in the future in cases where the European Union would be relying on energy infrastructure outside the Union, like Desertec, a solar and wind energy project in North Africa.

Desertec is a project aiming to deliver as much as 15 percent of the European Union’s electricity needs through high-voltage transmission lines under the Mediterranean Sea.

European officials said negotiating contracts at the union level could make it easier to ensure the security of investments in solar power in countries like Tunisia, Libya, Morocco and Algeria.

Article source: http://feeds.nytimes.com/click.phdo?i=76669ad0ffad10cc48b83c32ef64c729

Filed Under: Business News Tagged With: , ,

I.M.F. Reports Cyberattack Led to ‘Very Major Breach’

June 11, 2011 by Leave a Comment

WASHINGTON — The International Monetary Fund, still struggling to find a new leader after the arrest of its managing director last month in New York, was hit recently by what computer experts describe as a large and sophisticated cyberattack whose dimensions are still unknown.

The fund, which manages financial crises around the world and is the repository of highly confidential information about the fiscal condition of many nations, told its staff and its board of directors about the attack on Wednesday. But it did not make a public announcement.

Several senior officials with knowledge of the attack said it was both sophisticated and serious. “This was a very major breach,” said one official, who said that it had occurred over the last several months, even before Dominique Strauss-Kahn, the French politician who ran the fund, was arrested on charges of sexually assaulting a chamber maid in a New York hotel.

Asked about the reports of the computer attack late Friday, a spokesman for the fund, David Hawley, declined to provide details or talk about the scope or nature of the intrusion. “We are investigating an incident, and the fund is fully functional,” he said.

Because the fund has been at the center of economic bailout programs for Portugal, Greece and Ireland — and possesses sensitive data on other countries that may be on the brink of crisis — its database contains potentially market-moving information. It also includes communications with national leaders as they negotiate, often behind the scenes, on the terms of international bailouts. Those agreements are, in the words of one fund official, “political dynamite in many countries.” It was unclear what information the attackers were able to access.

The concern about the attack was so significant that the World Bank, an international agency focused on economic development, whose headquarters is across the street from the I.M.F. in downtown Washington, cut the computer link that allows the two institutions to share information.

A World Bank spokesman said the step had been taken out of “an abundance of caution” until the severity and nature of the cyberattack on the I.M.F. is understood. That link enables the two institutions to share nonpublic data and conduct meetings, but users of the system say that it does not permit access to confidential financial data.

Companies and public institutions are often hesitant to describe publicly the nature or success of attacks on their computer systems, partly for fear of providing information that would be useful to the individuals or countries mounting the efforts. Even so, Google has recently been aggressive in announcing attacks and, in one recent case, of declaring that its origin was China, an accusation the Chinese government quickly denied.

But in the case of the I.M.F., officials declined to say where they believe the attack originated — a delicate subject because most nations are members of the fund.

The attacks were likely to have been made possible by a technique known as “spear phishing,” in which an individual is fooled into clicking on a malicious Web link or running a program that allows open access to the recipient’s network. It is also possible that the attack was less specific, a case in which an intruder was testing the system merely to see what was available.

The fund said that it did not believe that the intrusion into its systems was related to a sophisticated digital break-in at RSA Security that took place in March, which compromised some information that companies and governments use to control access to their most sensitive computer systems. RSA notified its clients of the loss of its data, and last month hackers attempted to use the information stolen from RSA to gain access to computers and networks at the Lockheed Martin Corporation, the nation’s largest military contractor.

After that attack, the World Bank briefly shut down external access to its most sensitive systems, for fear that the stolen information could make it a target. But it quickly resumed its normal operations and says it has seen no evidence of any attacks.

David E. Sanger reported from Washington, and John Markoff from San Francisco.

Article source: http://feeds.nytimes.com/click.phdo?i=1b91bbbbfce5d1aeee83ff42dd487707

Filed Under: Business News Tagged With: , ,