ARAB TIMES, MONDAY, AUGUST 13, 2012
‘Spain won’t need bailout’ new Barclays chairman to review ‘entire’ business
German Foreign Minister Guido “I consider Spain a very strong The new chairman of Barclays except getting it right.” trillions of dollars in loans and Barclays to pare back its invest-
Westerwelle said he does not think country with a strong economy.” Bank says he’ll undertake a top-to- Walker said he wanted to review investments such as bonds, auto ment banking arm, Barclays
Spain’s government will need help The eurozone in mid-July approved bottom review of the embattled the company’s business plan, but loans and derivatives. Capital. But Walker, who takes
from European relief funds, accord- an aid package for Spanish banks business, telling a British newspa- didn’t want to sound “threatening.” The scandal has damaged the over from Agius on Nov 1, seemed
ing to an interview in a Sunday with funds of up to 100 billion euros. per that he isn’t wedded to any of Walker is due to replace bank’s reputation and led to a slew cool to the idea, telling the
newspaper. In return, it imposed strict condi- his predecessor’s policies. Marcus Agius, who offered his of resignations — most publically Telegraph he wanted to remain a
Speaking to the Bild am Sonntag, tions, especially on the financial Asked if he was committed to the resignation last month following that of former Chief Executive Bob “universal bank.”
he said that “the Spanish government sector, and Madrid must also meet current business plan of Barclays, the imposition of a $453 million Diamond. Regulators are still But Walker did seem to suggest
with its Prime Minister (Mariano) its pledges to cut its deficit by 2014 which is reeling from a massive fine for manipulating the critical weighing whether to bring criminal changes in the way the retail end
Rajoy shows great determination in and implement recommendations rate-fixing scandal, David Walker London interbank offered rate, or charges against those involved. of the bank works, saying “in prin-
implementing its reforms. This is why by the European Commission on told The Sunday Telegraph that he LIBOR, which is used to calculate Market-watchers had speculated ciple” he was in favor of charging
I am optimistic.” economic issues. (AFP) wasn’t “committed to anything borrowing costs for hundreds of that the scandal would prompt customers for bank accounts. (AP)
9.3 bln pound event has failed to lift tourism: official
British economy struggles to secure golden Olympics boost
LONDON, Aug 12, (AFP): With the Rance told AFP. were warned to stay away amid fears that London,” she added. Britain’s Office for National Statistics from the first three months of this year.
London Olympics set to wrap up Sunday, But she added: “All the signs are that London’s transport system could not cope Businesses complained of being side- has already said that Olympic tickets sold Meanwhile the nation’s coalition gov-
analysts said Britain’s recession-hit econ- the Olympics have not delivered addi- with millions of extra people descending lined as tourists made a beeline for the last year would be incorporated into gross ernment, which has been hosting country
omy was unlikely to have won a major tional visitors to London and the UK. In on the capital. Games and avoided the capital’s other domestic product figures for the third leaders such as Russian President
boost from the Games that have been a fact, it is expected that numbers may well The Games had long been heralded as attractions and shopping destinations, quarter, despite the bulk having been paid Vladimir Putin on the sidelines of the
triumph for the nation’s athletes. end up having fallen by well over 30 per- a key boost to the British economy but while non-sports fans opted to stay at for last year. Olympics, said it hoped to strike trade
While Britain’s construction sector ben- cent.” industry body the European Tour home or delay their trips. Asked about the long-term benefits to deals during the event.
efited hugely before the Olympics, experts Following claims in the first few days Operators Association said tourist num- The Bank of England’s chief econo- the economy from the Olympics, Dale And it believes it can generate ¬£13
have said the 17-day sporting spectacle had of the Games that they had turned bers had fallen “dramatically” in the first mist Spencer Dale last week said the said: “Those type of effects are a lot hard- billion of business, including almost half
not delivered significant financial rewards London into a ghost town, British Prime few days of the Games. Olympics would provide only “a small er to try and work out and I don’t think it coming from foreign direct investment,
and neither was it expected to in the Minister David Cameron urged people to “Hotels have been cutting their prices positive contribution” to the British econ- will have a material impact in our projec- over the next four years as a direct result
months and years ahead. “come back into the capital.” and many shopping areas, restaurants, omy. tions.” of the Olympics.
Mary Rance, chief executive of tourism And his words seem to have made an theatres, attractions and entertainment “There may well be some extra spend- Analysts have said the Games could But Slavena Nazarova, economist at
body UKinbound, said the Olympics which impact, with retailers across London’s venues have seen a significant reduction ing from tourism, but as many of us know added 0.3 percentage points to British French bank Credit Agricole, said the
have cost British taxpayers ¬£9.3 billion main shopping district in and around in business,” added Rance. there has also been travel disruption, output in the third quarter, or July to longer-term target was “a little exaggerat-
($14.5 billion, 11.8 billion euros) to stage Oxford Street reporting an increase in “Although it must be said that shop- more people are going on holiday. So I September period. ed” given that Cameron had not included
have failed to lift her sector. sales and a higher footfall in the days ping centres like Westfield Stratford City, think those effects are small. Britain escaped a deep downturn in late the greatest benefit thus far — the boost
“From a positive perspective, the after Cameron’s remarks. next to the Olympic Park, have benefited “But the contribution from ticket sales 2009 but fell back into recession at the end to the construction sector as a result of
Olympics have been a catalyst for huge In the run-up to the Olympics, which significantly — and over recent days vis- and TV rights may lead to a very small of 2011. Latest official data showed GDP transforming a disused part of east
investment in infrastructure in London,” began on July 27, commuters and tourists itors seem to be returning to central boost to GDP in the third quarter.” slumped 0.7 percent in the second quarter London to host much of the Games.
Economic policy ‘frozen’: analysts
Romania recovery now
Swiss banks sweat it out
coming under ‘threat’
BUCHAREST, Aug 12, (AFP):
The recovery in Romania’s econo-
my after two years of severe reces-
She added that foreign investors
need political stability as well as a
as US, Europe mull redress
sion is now coming under threat,
analysts warn, victim to the
stable and transparent legal system.
The IMF, which is conducting an
Berne needs a deal to remove the taint from financial industry
months-long political crisis that has assessment mission in Romania,
engulfed the EU country. voiced concern over the ongoing ZURICH, Aug 12, (RTRS): Swiss banks hoping to atone for ilar agreements elsewhere in Europe. So the Swiss may be in limbo for a while.
Prime Minister Victor Ponta told political disputes and urged the decades of complicity in tax evasion may be left to sweat it out The wait is painful for a country which counts on banking for 7 percent of its eco-
the International Monetary Fund government to focus on economic nomic output: until Swiss banks know how much information they need to share with
this past week that his centre-left reforms. for months as the United States and Germany ponder the foreign tax authorities they will struggle to attract new clients.
government was determined to “Over the last few years right level of punishment. As a result the share prices of its top banks — Credit Suisse and Julius Baer are
continue cost-cutting reforms and Romania has made progress in Switzerland has long dodged US accusations of hiding money for wealthy among those being investigated — are falling as investors fret about earnings.
stick to plans to sell stakes in major recovering from the financial crisis Americans. But now eleven Swiss banks are under investigation in the United “We are prepared to sign a settlement with the US for the Swiss banks today. We feel
energy companies that underpin and the economy has made States and there is pressure too from Europe where burdened taxpayers want we have made a constructive proposal to the US but it is up to them to accept it or not,”
recovery plans. progress in stabilising inflation and scalps after numerous banking scandals. The Swiss need a deal to remove the said Switzerland’s Finance Minister Eveline Widmer-Schlumpf.
But analysts say that economic the budget situation but the current taint from their financial industry. “This depends on whether the US is willing to reach a settlement before or after their
policy is “frozen”, held hostage by turmoil has taken its toll on the However, Washington must factor forthcoming elections into its thinking, and elections, which is unclear at the moment,” she said.
the political war underway between economy,” chief negotiator Erik de Germany is delaying ratification of a tax deal key to Switzerland’s efforts to strike sim- Both Widmer-Schlumpf and chief negotiator Michael Ambuehl have dampened
the ruling Social-Liberal Union Vrijer said. expectations for a US deal by November,
coalition and centre-right President Romania obtained a 20-billion- stoked as recently as last month by the
Traian Basescu, targeted by an euro ($25-billion) rescue package finance minister herself.
impeachment move launched six from the IMF, the EU and the “There is an open window after the
weeks ago. World Bank in May 2009, in summer lull, but it’s relatively tight.
Romanians which cast ballots in exchange for drastic spending cuts. Otherwise, I think we’re looking at next
a controversial referendum last In March 2011, the IMF and the year,” said Martin Naville, chief execu-
month voted overwhelmingly for EU provided a fresh credit line of tive of the Swiss-American Chamber of
Basescu’s removal, but its validity five billion euros to be drawn only Commerce in Zurich.
is being disputed and there have in case of emergency. Deal
been allegations judges have been De Vrijer added that investor Switzerland’s efforts to spur along a
pressured and intimidated. confidence and Romania’s standing deal include tentatively agreeing with the
“Stop the circus, try building in financial markets have lately US Foreign Account Tax Compliance
something,” urged recently the been undermined, while the cost of Act, an anti-tax evasion law known as
Ziarul Financiar daily, voicing the borrowing surged. FATCA.
exasperation of the business com- “It is important for the govern- The rules on enforcing FATCA have
munity. ment to focus on macroeconomic yet to be finalised, but many Swiss
Blocked priorities, which means pushing bankers see it as a crippling blow that
ahead with sound budgetary poli- effectively prevents their clients from
“The economy is clogged, investing in US securities.
money is no longer changing cies and with reforms that will
enable the economy to grow Acquiescing to FATCA was a tactic to
hands, the public administration is build goodwill for a Swiss bank deal, a
blocked, major decisions are faster,” he stressed.
source close to the talks said.
delayed and no important contracts Financial analyst Aurelian But the strategy doesn’t seem to be
are signed,” economic analyst Dochia deplored the government is paying off.
Doru Lionachescu of Capital too busy quarrelling with the presi- Washington is now pushing banks in
Partners consulting firm told AFP. dent instead of taking steps to boost Switzerland to divulge names and finan-
The first victim of the political the economy. cial details of wealthy Americans hiding
row has been the local currency, the “Politicians don’t realize how money in their accounts, spurred on by
leu, which has lost nearly five per- dramatic the situation is both in success in 2009 when UBS handed over
cent of its value over the past few Romania and internationally,” he data to avert a criminal indictment.
weeks. said, stressing that the Balkan “Contrary to what may appear as inac-
The depreciation will lead to country’s economy is closely tivity, the US is in fact keeping the pres-
hikes in the prices of fuel and of linked to the eurozone, although it sure on Swiss banks, which are like mice
other imported goods. is not part of it. before a snake,” said Martin Janssen, pro-
Romania emerged from two “The main thing we should have Visitors admire the giant cruise ship ‘Celebrity Reflection’ as it leaves the Meyer shipyard in Papenburg, northern Germany fessor of finance at the University of
years of severe recession by post- avoided was to dig our own grave. on Aug 12. The 319 meter (1,046 ft) long ship was built for US shipping company Celebrity Cruises and has room for Zurich. “The US is really maximising its
Unfortunately this is exactly what around 3,000 passengers. (AP) position here.”
ing 2.5 percent growth in 2011, but The tension is such that Swiss bankers
the economy has lost steam. we are doing.”
Also: are afraid they will be personally targeted
It dipped into recession at the
beginning of this year, and an SARAJEVO: Bosnia is likely to tip Patience with Greece reform efforts wearing thin by US officials if they leave the country,
after Credit Suisse and Julius Baer hand-
expectations of a recovery are back into recession in 2012 and the ed over employee names to US authori-
evaporating quickly. Balkan country’s political instabili- ties.
The forecast for growth this year
has been cut from 1.5 to 1.0 per-
cent, and a drought which has
ty prevents reforms necessary for
turnaround, central bank governor
Kemal Kozaric said Friday.
Germany warns of Greek aid veto Originally a gesture towards coopera-
tion, the move now has many Swiss
bankers hunkered down at home, fearful
severely affected wheat and maize “We are heading towards reces- of arrest and extradition if they leave
crops will hurt overall economic sion. Economic tendencies show us BERLIN, Aug 12, (AFP): Germany will the requirements”. Focus. Switzerland.
performance, analysts pointed out. that we are going into this direc- block any new aid to ailing Greece if He noted it was impossible to force a “I’ve lost my illusions,” said Roesler, Adding to the agony, several key US
While some of Romania’s slow- tion,” Kozaric said in an interview Athens does not fully comply with the country out of the eurozone but assumed who is also vice chancellor and leads the officials plan to step down, which could
down is a spillover from the trou- to the Oslobodjenje daily. terms of previous rescue packages, even the “Greek government knows what it pro-business Free Democrats in mean negotiations having to be reset.
bles of its larger EU partners, the Kozaric said industrial produc- if other countries support unlocking needs to do if it is not in a position to ful- Germany’s ruling coalition. Internal Revenue Service commission-
political gridlock threatens to tion fell by 6.7 percent in the first funds, a senior lawmaker said Sunday. fil the reform requirements.” “I proposed with German businesses a er Doug Shulman and Treasury Secretary
The deputy head of Chancellor Angela Germany “has reached the limits of whole series of support measures for the Timothy Geithner, who discussed the
aggravate the situation further. half of the year compared to the
Merkel’s conservative parliamentary what it can bear,” he added. Greek government. The Greeks have hard- case with Widmer-Schlumpf in April, are
Faced with the endless squab- same period in 2011, while exports He said he also opposed the European
bling, central bank governor were 5.1 percent lower. bloc, Michael Fuchs, told business daily ly responded to our offers,” he told Focus both scheduled to depart after the elec-
Handelsblatt that Berlin was ready to use Central Bank providing further emer- according to an advance copy of an article tion. Secretary of State Hillary Clinton,
Mugur Isarescu abandoned his After Bosnian economy con- gency loans to Greece and thus becom-
its veto if it is unhappy with findings to appear in its Monday edition. credited by Swiss officials with helping
courteous tone and came close to tracted by 2.9 percent in 2009, in ing a “covert money printing press”. negotiations over a settlement for UBS in
using a four-letter word in a public 2010 it rebounded by 0.7 percent a from the Greece creditors “troika”. On July 22 Roesler had voiced his
“You can quote me: even if the glass is Pledges doubts concerning the possibility of 2009, is also leaving her job.
address, hoping this will draw the grew by 1.3 percent last year, Another key US contact, Attorney
politicians’ attention. according to the data by the Central half-full, that is not enough for a new aid Fuchs said that if Greece fails to live Greece staying in the eurozone, saying
package,” he said in an interview to up to its reform pledges, then “the ECB that in his view there had been “nothing General Eric Holder, the top law enforce-
“We depend on the international bank said. ment officer, is under pressure after a
markets and they will punish us Kozaric said the International appear in the paper’s Monday issue. cannot open up detour possibilities and frightening” about a Greek exit “for a
“Germany cannot and will not agree to provide money that the Greeks could not long time”. Republican-led Congress found him in
severely,” Isarescu stressed. Monetary Fund (IMF) was set to contempt of Congress for withholding doc-
that.” otherwise get from the (European) rescue The next day the German government
In this tense environment, approve a new 400-million-euro uments in a gun-running sting operation.
Germany, Europe’s biggest economy, funds”. said it was torn between hope and scepti-
investors have shown increased ($493 million) loan to Bosnia in But all of that could be trumped by the
is waiting with eurozone partners for the Patience with Greece’s sputtering cism about Greece’s ability to meet its
caution and capital flows have September which would enable report on Greece from a so-called troika commitments to its international credi- “fiscal cliff” — a combination of tax
dried up. local governments to cover their reform efforts is wearing thin in hikes and automatic spending cuts that
of inspectors from the European Union, Germany, Europe’s effective paymaster, tors. will take effect at the end of the year if
“The political crisis and the insta- budget deficits. International Monetary Fund and The responsibility for managing the
bility is has spurred could make “But this will be only a by-pass with leading members of Merkel’s ruling lawmakers in the Democratic-controlled
European Central Bank. coalition openly questioning its ability to debt crisis for Germany however rests Senate and Republican-controlled House
some entrepreneurs delay their deci- ... Certain reforms should be car- Their verdict, which is expected by with Finance Minister Wolfgang
sions to invest in Romania,” a west- ried out,” Kozaric insisted, warning stay in the eurozone. are unable to reach a compromise.
mid-September, will determine if Athens The government’s official line is that it Schaeuble, not Roesler. By that point, if the Swiss haven’t got
ern diplomatic source said. that the constant crisis caused by receives the next installment of 31.5 bil- Germany, Europe’s biggest economy,
will wait for the troika report before a deal, they will face an even longer wait.
“The question is how foreign local political elite have prevented lion euros ($38.7 billion) in rescue funds. is now waiting with its eurozone partners
drawing any conclusions. The going is equally sluggish closer to
companies that considered invest- economic growth. Fuchs said that even if other eurozone German Economy Minister Philipp for the auditors’ report on Greece, which
ing in Romania will react to the sit- The IMF has reduced its forecast home. Crisis-hit European countries in
countries call to release the funds after Roesler expressed disappointment with will determine if Athens receives the need of extra income are delaying settle-
uation,” said Annika Pattberg of for Bosnia’s economic growth to the report, “Germany will use its veto” as the efforts of debt-wracked Greece to next tranche of 31.5 billion euros as part ment with Switzerland as a flourishing
Germany Trade and Investment zero in 2012. part of the EFSF temporary rescue fund implement necessary reforms, in an of its second bailout. The report is trade in leaked bank client data tilts the
if it concludes that Greece “has not met interview with the weekly magazine expected by mid-September. talks further in their favour.