May 1, 2024

Germany’s Effort at Clean Energy Proves Complex

But the plan, backed by Chancellor Angela Merkel and opposition parties alike, is running into problems in execution that are forcing Germans to come face to face with the costs and complexities of sticking to their principles.

German families are being hit by rapidly increasing electricity rates, to the point where growing numbers of them can no longer afford to pay the bill. Businesses are more and more worried that their energy costs will put them at a disadvantage to competitors in nations with lower energy costs, and some energy-intensive industries have begun to shun the country because they fear steeper costs ahead.

Newly constructed offshore wind farms churn unconnected to an energy grid still in need of expansion. And despite all the costs, carbon emissions actually rose last year as reserve coal-burning plants were fired up to close gaps in energy supplies.

A new phrase, “energy poverty,” has entered the lexicon.

“Often, I don’t go into my living room in order to save electricity,” said Olaf Taeuber, 55, who manages a fleet of vehicles for a social services provider in Berlin. “You feel the pain in your pocketbook.”

Mr. Taeuber relies on just a single five-watt bulb that gives off what he calls a “cozy” glow to light his kitchen when he comes home at night. If in real need, he switches on a neon tube, which uses all of 25 watts.

Even so, with his bill growing rapidly, he found himself seeking help last week to fend off a threat from Berlin’s main power company to cut off his electricity. He is one of a growing number of Germans confronting the realities of trying to carry out Ms. Merkel’s most ambitious domestic project and one of the most sweeping energy transformation efforts undertaken by an industrialized country.

Because the program has the support of German political parties across the spectrum, there has been no highly visible backlash during the current election campaign. But continuing to put the program in place and maintaining public support for it will be among Ms. Merkel’s biggest challenges should she win a third term as chancellor in Sunday’s election.

Ms. Merkel, of the traditionally conservative and pro-business Christian Democrats, came up with her plan in 2011, in the emotional aftermath of the Fukushima nuclear disaster in Japan. It envisions shutting down all of Germany’s nuclear plants by 2022 and shifting almost entirely to wind and solar power by 2050.

The chancellor’s about-face not only seized the energy initiative from her center-left opponents, it also amounted to a gamble that could prove to be her most lasting domestic legacy — or a debacle whose consequences will be felt for generations.

The cost of the plan is expected to be about $735 billion, according to government estimates, and may eventually surpass even that of the euro zone bailouts that have received far more attention during Ms. Merkel’s tenure. Yet as the transition’s unknowns have grown, so have costs for the state, major companies and consumers.

Mr. Taeuber showed up last Friday, one of three “walk-ins” that day at one of two agencies in Berlin offering aid to people struggling to pay their energy bills. He arrived just as employees from the power company Vattenfall were on the way to his apartment.

Sven Gärtner, an agency employee, called Vattenfall with the promise of a payment plan, sparing Mr. Taeuber from being disconnected. “The boys were already in the basement, but they agreed to pull them back,” Mr. Gärtner said triumphantly.

Since January, Mr. Gärtner said, his group has intervened in more than 350 cases to prevent Vattenfall from leaving one family or another in the dark. In the first six months of this year, about 1,800 sought help, 200 more than in all of 2012.

Article source: http://www.nytimes.com/2013/09/19/world/europe/germanys-effort-at-clean-energy-proves-complex.html?partner=rss&emc=rss

Spain’s Real Crisis Is a Leadership Void, Analysts Say

But while the charge may be simple enough, the case is not. Having previously withheld information from the courts about secret Swiss accounts, the former treasurer, Luis Bárcenas, who now sits in prison, seems less than fully credible, and the courts incapable of digging to the bottom on the matter with real speed.

The result is less a crisis for Mr. Rajoy — though he is certainly damaged, polls show — than one for Spain, its national morale and the credibility of its institutions, with all the risk that the steady drumbeat of allegations will deny recession-hit Spain strong leadership and distract the government from pressing economic concerns as the scandal unspools for years, analysts say.

In fact, Mr. Rajoy’s best defense may be to stonewall and string out the corruption case beyond the end of his scheduled mandate in 2015 and the next election. Given Spain’s overburdened courts, that should not be hard to do.

“Rajoy is the ultimate resistance fighter and he has clearly decided that time will play in his government’s favor,” said José Ignacio Torreblanca, a political columnist and head of the Spanish office of the European Council on Foreign Relations, a research group.

Still, Mr. Torreblanca suggested that Mr. Rajoy was making “a big mistake” if he resorted to stalling tactics in an attempt to keep political pressure at a minimum.

“A prime minister should not only ask people to trust him but instead present a credible story about exactly what happened when faced with such accusations,” Mr. Torreblanca said.

This week, however, the Popular Party rejected a call from opposition parties for Mr. Rajoy to appear in Parliament and explain exactly how the party’s finances had been managed by Mr. Bárcenas. Meanwhile, prosecutors started naming senior Popular Party officials whom they want to appear as witnesses in the case, led by María Dolores de Cospedal, the secretary general of the party.

Mr. Bárcenas was first subpoenaed in 2009, as part of what then appeared to be a mundane graft investigation into whether a group of businessmen had bribes to receive contracts from conservative mayors and regional politicians. He denied at the time ever having had money in Switzerland.

Since January, investigators have unearthed at least €47 million, or $61.4 million, that he allegedly stashed offshore, in Switzerland but also possibly in the United States and other countries. Mr. Bárcenas is next scheduled in court on Monday, and with each appearance speculation mounts that he will turn on his former party colleagues, as they turn on him.

Mr. Bárcenas reportedly left his job as treasurer in 2009 with a trove of documents. This week, the newspaper El Mundo published ledgers that it claimed were the party’s parallel financial accounts, mirroring allegations made in late January by another Spanish paper, El País.

Mr. Bárcenas is being held in a prison outside Madrid since a court judged him to be a flight risk in June. After visiting his friend on Monday, Miguel Duran, a lawyer, told RAC1 radio that Mr. Bárcenas had told him “interesting things.”

“He has enough information to make the government fall,” Mr. Duran said ominously.

Mr. Rajoy and other senior party officials have denied wrongdoing, as has Mr. Bárcenas. Increasingly the scandal boils down to their word against his. Senior party officials have now sought to isolate and even disparage their former colleague, at the risk that Mr. Bárcenas will become even looser with his years of accumulated knowledge of the inner workings of the Popular Party.

By Thursday, Mr. Bárcenas was being called “a delinquent” by Alfonso Alonso, the party’s parliamentary spokesman, “for whom lying has become a way of life.” At the same time, Mr. Alonso acknowledged that “there has been a corruption ring, which is what we want the judiciary to clarify.”

Article source: http://www.nytimes.com/2013/07/13/world/europe/spains-real-crisis-is-a-leadership-void-analysts-say.html?partner=rss&emc=rss

Greek Civil Servants Walk Out Over Ban on Teachers’ Strike

It was the third time this year that Greece’s fragile governing coalition had invoked the emergency measure, the civil mobilization law, to combat trade unions that oppose the austerity measures demanded by the country’s international creditors in exchange for continued rescue financing.

As with Athens subway workers and seamen, who were forced back to work earlier this year, secondary school teachers face arrest and dismissal if they go ahead with a 24-hour strike planned for Friday, the first day of university entrance examinations for high school students. The teachers object to the government’s plans to increase their working hours, fearing the move will lead to staff cutbacks.

But instead of thriving in the face of what political opposition parties have denounced as “blackmail” and “authoritarian tactics” by the government, unions appear increasingly split and weakened.

Tuesday’s strike by the civil servants union, Adedy, which disrupted tax offices and other public services, was not backed by protesting teachers, who were angered by Adedy’s refusal to support their planned walkout on Friday.

Echoing the government’s objections, Adedy said it was reluctant to support a job action that would create havoc for more than 100,000 pupils trying to secure a university or college position amid spiraling youth unemployment, which has topped 64 percent.

The rift bubbled to the surface at a rally by civil servants in Athens on Tuesday, which drew no more than 300 people, when a senior Adedy unionist was harangued by teachers crying, “Traitors!”

Addressing a business conference on Monday night, Prime Minister Antonis Samaras said his government would continue to “protect the public good over sector-specific interests.”

If the authorities make good on this pledge, they may win support from an austerity-weary public that is keen to see the privileges of the few revoked, some say.

“The teachers don’t have the support of the people,” said Takis Michas, a political analyst. “Complaining about extra working hours when you have three months a year paid vacation and when unemployment is skyrocketing is not going to strike a chord with the average Greek.”

Last week, the finance minister, Yannis Stournaras, said authorities had liberalized hundreds of professions that formerly restricted access, including notaries and taxi drivers, and would open dozens more in coming months, including the powerful legal sector.

Article source: http://www.nytimes.com/2013/05/15/world/europe/greek-civil-servants-walk-out-over-ban-on-teachers-strike.html?partner=rss&emc=rss

Mexico’s Planned Telecoms Shake-Up Threatens Slim, Televisa

The long-awaited plan seeks to shake up the telecoms sector by allowing increased foreign ownership of media and phone companies, and giving regulators the power to force asset sales by players controlling more than 50 percent of the market.

“The purpose of these measures is to free up the sector’s potential, and do it as quickly as possible,” President Enrique Pena Nieto said as he presented the plan on Monday.

Flanked by the leaders of Mexico’s main political parties, Pena Nieto said the reform would allow companies to grow, but added they would have to do so with innovation and investment, by improving prices and the quality of their service.

Previous governments have failed to curb the power of Mexico’s telecoms and media tycoons, and fostering more competition in the industry is seen as a crucial yardstick of the new government’s ability to unlock the economy’s potential.

“To build a prosperous Mexico, we must boost competition in all sectors and bring our telecommunications up to date,” Pena Nieto said.

His government, which took office in December, negotiated the reform bill with leaders from the main opposition parties after the two forged an accord with the president in December called the Pact for Mexico.

However, the planned reform may still face a tough road in Congress, where Pena Nieto lacks a majority.

Slim, the world’s richest man, dominates Mexico’s telecommunications market, controlling about 70 percent of its mobile market and 80 percent of its fixed phone lines.

Televisa TLVACPO.MX, controlled by tycoon Emilio Azcarraga, has about 60 percent of the broadcast market.

The bill stipulates that any company with a market share exceeding 50 percent will be deemed dominant.

A dominant player may be subject to sanctions including possible forced asset disposals, it said. It also seeks to curb the ability of companies to suspend legal rulings against them while they appeal decisions.

It aims to increase competition in the television market by auctioning rights to run two new television channels, a process that will not be open to the two most powerful broadcasters, Televisa and TV Azteca.

The bill could also open the door for Slim to the television market, which he has been kept out of so far, but it is unclear whether he will be able to take part in the new auction.

WEALTH DIVIDE

The bill proposed introducing a new telecoms regulator, the Federal Institute of Telecommunications (IFT), along with specialized courts for settling competition disputes.

Mexico’s peso strengthened to its highest point in 18 months early on Monday with traders saying the currency had benefited from optimism about the country’s reform drive.

Pena Nieto has pledged to ramp up economic growth to six percent a year, from about four percent in 2012 and has said that a shake-up of state oil firm Pemex, broadening the tax base and increasing competition will be key.

Asked how much telecoms reform could help Mexico’s economy, Finance Minister Luis Videgaray said some analysts estimated the bill could add up to 1 percentage point to annual growth.

The benchmark IPC stock index slipped 0.7 percent, dragged down by a tumble of more than 3 percent for America Movil and nearly a 1 percent fall for Televisa.

Slim’s companies have not yet responded to requests for comment on the reform.

Televisa’s chief executive, Emilio Azcarraga, said on his Twitter account that Mexico was entering a period of great challenges and opportunities. “Welcome competition,” he said.

The bill also aims to underline Pena Nieto’s commitment to reducing the divide between rich and poor Mexicans. Around half the population lives in poverty, while much of the country’s economic power is concentrated in the hands of a few families.

POLITICAL FIGHT

Some worry that Congress could water down the plan, but lawmakers in Pena Nieto’s centrist Institutional Revolutionary Party (PRI) are confident the bill will succeed.

PRI congressman Hector Garcia said he expected it to pass the lower house of Congress by the end of next week and get Senate approval by the end of the current session on April 30.

“We’re certain it’ll be voted on in the Senate this period,” he said. “The Pact for Mexico stipulates this timeframe.”

While the outline of the bill presented on Monday prompted investors to dump shares in the large incumbents, America Movil and Televisa, smaller companies benefited from the announcement.

Shares of Mexican phone companies Maxcom MXCMCPO.MX and Axtel AXTELCPO.MX, which has waded deep into debt to compete with Slim’s fixed line giant Telmex, gained about 7 percent apiece. Shares in cable firm Megacable MEGACPO.MX rose 2 percent while TV Azteca shares were nearly flat.

“It’s obvious the reform will benefit the companies with the least market share,” said Jorge Nevid, head of trading at brokerage Accival in Mexico City.

Purely in terms of revenue, America Movil could be much harder hit by the reform than Televisa.

Slim’s companies had 67 percent of the 414 billion pesos ($32.99 billion) in total revenue from Mexican phone and television companies in 2012, while Televisa’s cable companies had just 8.5 percent, according to data from market research group The Competitive Intelligence Unit.

(Additional reporting by Elinor Comlay, Alexandra Alper, Lizbeth Diaz and Noe Torres; Editing by Kieran Murray, David Gregorio and Edwina Gibbs)

Article source: http://www.nytimes.com/reuters/2013/03/11/business/11reuters-mexico-telecoms.html?partner=rss&emc=rss

Haruhiko Kuroda Expected to Be Named Head of Bank of Japan

The official, Haruhiko Kuroda, a veteran of global financial circles and current head of the Asian Development Bank, will be nominated as the bank’s governor to take over next month, according to a ruling party lawmaker with knowledge of those plans.

Prime Minister Shinzo Abe has instructed ruling party officials to start negotiating with opposition parties to clear the way for Mr. Kuroda’s appointment, which must be approved by a divided parliament, the lawmaker said.

“This is a critical time for Japan’s economy, and we must avoid, at all costs, a failure to gain parliamentary approval for this appointment,” NHK, the public broadcaster, quoted Mr. Abe as telling ruling party executives Monday morning.

With Mr. Kuroda at its helm, the bank could take much bolder steps to kick-start economic growth. Mr. Kuroda has publicly criticized the Bank of Japan for not going far enough to fight deflation, and has urged the bank to adopt inflation targets and to expand an asset-buying program to pump more cash into the Japanese economy.

Mr. Kuroda’s global experience — as vice minister for international affairs at Japan’s powerful Finance Ministry from 1999 to 2003, and as president of the Manila-based Asian Development Bank starting in 2005 — could also help Tokyo navigate foreign criticism that its monetary policies are intended to weaken the yen to give Japanese exporters a competitive edge.

The yen has weakened by over 10 percent in the last three months as Mr. Abe laid out his monetary agenda, pushing the outgoing central bank governor, Masaaki Shirakawa, to start taking a more aggressive monetary stance. But Mr. Abe had indicated that a change at the bank’s top ranks was needed to break with the bank’s cautious past. On Monday, the yen fell to a 33-month low.

Kikuo Iwata, a professor at Gakushuin University in Tokyo and another vocal critic of the central bank, is set to be tapped for one of its two deputy governor spots, according to the lawmaker. Mr. Iwata is the author of several books, including “Stop Deflation, Now” and “Is the Bank of Japan Really Trustworthy?”

Mr. Kuroda beat out a fellow former senior Finance Ministry official, Toshiro Muto, who had strong backing among both bureaucrats and local politicians but lacks the top-level global contacts. Mr. Muto was also viewed as being more cautious than Mr. Kuroda on monetary policy.

Article source: http://www.nytimes.com/2013/02/25/business/haruhiko-kuroda-expected-to-be-named-head-of-bank-of-japan.html?partner=rss&emc=rss

German Lawmakers Back Latest Round of Aid for Greece

BERLIN — Lawmakers in Germany’s lower house of Parliament easily passed the next round of financial support for Greece on Friday, despite growing doubt among members of Chancellor Angela Merkel’s coalition and opposition parties that the measures will be sufficient to resolve the Greek problem.

As expected, a clear majority of 473 out of 584 lawmakers casting ballots voted in favor of the package of measures agreed to by European finance ministers and international lenders last week that will unlock loan installments totaling €43.7 billion, or $56.7 billion. One hundred lawmakers voted against the measure and 11 abstained.

Germany is one of Greece’s largest creditors and support from Berlin is crucial for the success of the program. Yet with a parliamentary election scheduled for Sept. 22, German politicians from all sides have been reluctant to take on extra financial burdens.

Wolfgang Schäuble, Germany’s finance minister, defended the latest bailout package and praised the restructuring efforts that have been made by the government of Antonis Samaras, prime minister of Greece. But he warned that the current discussion of writing down Greek debt would sap Athens’s drive to continue with the painful course of reforms that Germany has required in exchange for more financial assistance.

“If we say that the debt will be forgiven, then the readiness to save in exchange for further help is weakened. Consequently, this is the false incentive,” Mr. Schäuble said. “If we want to help Greece along this difficult path, then we must go forward step by step.”

The current package aims to cut Greek debt, currently estimated at 175 percent of gross domestic product, down to 124 percent by 2020. Mr. Schäuble acknowledged for the first time that the bailout would cut into Germany’s federal budget, but warned that failure to approve it could be disastrous for the nation and the rest of Europe.

Already the 17 European Union nations using the common currency are in recession. Unemployment in the bloc has also climbed to 11.7 percent, its highest rate since 1995, according to official European figures released Friday.

While the German economy remained largely immune to the suffering on its borders, the most recent official figures show growth slowing and investor confidence dipping.

Against this backdrop, Ms. Merkel has been able to quell calls from within own her center-right coalition for Greece to leave the euro zone, by insisting that the consequences of such a step would be far more dire for Germany than providing more financial assistance.

Ms. Merkel’s government rests on an alliance of her own conservative Christian Democratic Union with the sister party for the state of Bavaria, the Christian Social Union, and the liberal pro-business Free Democrats. It was not immediately clear if a fully majority of her government had supported the bailout measure.

The leading opposition parties, the Social Democrats and the Greens, criticized Ms. Merkel’s government for taking too long to agree to help Greece and for failing to level with German taxpayers about the true cost of the effort, but nevertheless backed the package.

“We will vote for it because we don’t want our reliability as European partners left in any doubt,” Ms. Merkel’s main challenger for the election, Peer Steinbrück of the Social Democrats, told German public television ahead of Friday’s vote. “It has nothing to do with the government.”

Article source: http://www.nytimes.com/2012/12/01/business/global/german-finance-minister-urges-lawmakers-to-approve-greek-debt-deal.html?partner=rss&emc=rss

Seoul Votes a Chaotic Yes to Free Trade With U.S.

Lawmakers of the governing Grand National Party caught the opposition by surprise by calling a snap plenary session. Opposition legislators rushed in but were too late to prevent their rivals from putting the bill to a vote.

In a desperate attempt, one opposition lawmaker detonated a tear gas canister, throwing the National Assembly chamber into chaos. A scuffle erupted, but members of the governing party outnumbered their foes and, while sneezing and wiping tears, passed the deal in a vote of 151 to 7. In the 299-seat National Assembly, 170 members showed up for the vote Tuesday, most of them governing party lawmakers. The opposition members either voted against the bill or abstained.

Glass doors were shattered as legislative aides from the opposition parties tried to barge in, and security guards formed a human barricade.

The government had urged quick approval of the deal, first signed in 2007 but long unratified by either country, arguing that it would help the economy grow. It also said the deal would lessen South Korea’s dependence on trade with China and deepen its alliance with the United States at a time of growing military threats from North Korea.

The opposition argued that the deal would fatten the pockets of big export companies, which dominate the economy, while depriving farmers and small merchants of their livelihoods. Amid widespread distrust of big business and resentment of what is seen as increasing economic inequality, such fears have led thousands of farmers and labor activists to hold almost daily protest rallies outside the Parliament building. In occasional clashes, the police fired water cannons at protesters to stop them from entering Parliament.

“The government will actively pursue measures for farmers and smaller business owners to help improve their competitiveness,” said Choe Guem-nak, the president’s spokesman. “We will also make sure that the free trade agreement will rejuvenate the economy and above all, create jobs for young people.”

Mr. Lee’s rapport with President Barack Obama bore fruit last month when the U.S. Congress passed the free-trade deal by a wide margin despite underlying concerns about the effect it might have on U.S. manufacturing, notably the car industry. The deal was approved by Congress while Mr. Lee was visiting Washington.

“This was an inevitable action we had to take, because we could not make one step of progress in our talks with the opposition, which thought only about its partisan interest,” Kim Ki-hyun, a governing party spokesman, said of the hurried vote. “But we apologize to the people for failing to have a negotiated approval of the deal.”

“We apologize to the people for failing to stop this coup,” said Sohn Hak-kyu, head of the main opposition Democratic Party. “From now on, we will fight to have the deal nullified.”

Farmers’ groups across the country issued statements accusing the government of “giving up our economic sovereignty.”

The Korea Chamber of Commerce and Industry said in a statement welcoming the bill’s approval that the deal would “pave an economic highway” to the United States and make South Korea a trading hub for Asia, Europe and North America.

South Korea, a major exporter of industrial goods like automobiles and consumer electronics, has aggressively sought free-trade deals and has several in effect, with countries including Chile, India, the 10-member Association of Southeast Asian Nations and the European Union. South Korea hopes the deal with the United States will go into effect Jan. 1, said Cho Byung-jae, spokesman for the Foreign Ministry.

Article source: http://feeds.nytimes.com/click.phdo?i=80c874e090cd73ee1efbd6487b62e670

Wall Street Charges Ahead

News that the United States economy grew by more than previously thought in the second quarter of the year and an unexpectedly large drop in the number of weekly jobless claims drove stocks higher.

The Standard Poor’s 500-stock index rose 1.7 percent in early trading, while the Dow Jones industrial average gained 1.7 percent. The Nasdaq composite index added 1.1 percent.

The Commerce Department said the economy grew at an annual rate of 1.3 percent in the April-June quarter, up from an estimate of 1 percent made a month ago. The improvement reflected more consumer spending and more exports.

“The quality of the improvement far outweighs the scale of improvement with the U.S. consumer key to future growth,” said Michael Woolfolk, an analyst at the Bank of New York Mellon. “The risk for the third quarter is to the upside, with the outside possibility that it could well come in at the upper end of the 2.0 to 3.0 percent range.”

Further good news emerged from the Labor Department, which found that jobless claims last week dropped 37,000 to a seasonally adjusted 391,000, the lowest level since April 2. It is the first time applications have fallen below 400,000 since Aug. 6.

The mood in stock markets had already been largely positive after a clear victory for Chancellor Angela Merkel in a vote on beefing up Europe’s bailout fund. More encouraging for the markets, perhaps, was the fact that Mrs. Merkel did not have to rely on support from opposition parties.

In the short term, the vote in favor of an expanded rescue fund — with 523 lawmakers in favor, 85 against and 3 abstentions — indicated that Germany was fully behind efforts to shore up Europe’s defenses against a crisis that has already required three countries to be bailed out and stoked talk that Greece would default.

“The overwhelming majority in the Bundestag is a good sign and will hopefully mark a step change in German commitment to bringing the spiraling crisis under control,” said Sony Kapoor, managing director of Re-Define, an economic research group.

In Europe, the DAX in Germany was up 2.0 percent, as was the CAC 40 in France. The FTSE 100 index of leading British shares was underperforming, trading up 0.3 percent.

The improved appetite for risk on Thursday also helped the euro brush off another survey showing that Europe’s economy was grinding to a halt. When risk appetite is high, the euro usually garners support against the dollar. Following the German vote, it was trading 0.8 percent higher at $1.3629.

Earlier in Asia, the Nikkei 225 index in Japan swung between gains and losses before finishing up 1 percent. The Kospi in South Korea index shot up 2.7 percent. The Shanghai Composite Index in China dropped 1.1 percent. Markets in Hong Kong were closed due to severe weather.

Oil prices tracked equities higher too. Benchmark crude for November delivery rose $1.88 to $83.09 a barrel on the New York Mercantile Exchange.

Article source: http://feeds.nytimes.com/click.phdo?i=7b546591509796a976958dd861962b8f