Thailand’s prime minister says she hopes the process of draining floodwater through Bangkok can be sped up now that peak high tides have passed.
Prime Minister Yingluck Shinawatra said Monday that “if there is no more additional water, the current runoff might not cause heavy flooding in Bangkok.” She said there was still a massive amount of water that needs to pass through the capital’s drainage network as it makes its way down from flooded provinces in the north quick cash.
Record high tides pushing up the Chao Phraya River from the Gulf of Thailand have made draining the water from Thailand’s worst flooding in a half-century more difficult. That has put extreme pressure on Bangkok’s flood defenses, though they have largely held and most of the city remains dry.
Toronto
International pressure grew on Europe to find a lasting solution to the debt crisis that is shaking global financial markets, as the leaders of Greece, Germany and France were to hold talks Wednesday in an emergency teleconference.
U.S. Treasury Secretary Timothy Geithner said Europe’s leaders know they’ve “been behind the curve” but he also sought to soothe investors, claiming the eurozone governments understood the severity of the situation and have the financial firepower “to do what it takes to hold this thing together.”
Fears that Greece was heading rapidly towards a chaotic default have roiled markets for days, both across the 17-nation eurozone and globally.
Many investors are convinced Greece will not be able to fix its public finances under its current economic plans. Interest rates on the country’s 10-year government bonds soared to new record highs hitting the alarming level of 25.3 percent on Wednesday, more than 23 points higher than the German equivalent.
German Chancellor Angela Merkel spoke out this week to calm the market jitters and to distance herself from her vice chancellor, Philipp Roesler, and others who suggested a Greek bankruptcy was possible.
Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou will discuss the situation Wednesday evening, after a government meeting Papandreou called to address urgent fiscal reforms. The finance ministers from the wider 17-nation eurozone will meet on Friday in Poland.
Hours before the teleconference, Sarkozy and his prime minister “with a single voice reaffirmed France’s determination to put everything in place to save Greece,” French government spokeswoman Valerie Pecresse said of a Cabinet meeting in Paris.
Sarkozy wants the call to focus on “the need for efforts in return and commitment from Greece,” she said.
Europe’s big trading partners, like the U.S. and China, made clear that they want the crisis contained.
Geithner, who will join eurozone finance ministers this weekend in a meeting in Poland, stressed that European governments have to show they “stand behind” the financial system so that it can fund and finance the economic recovery.
“I think they recognize that they’re going to have to do more to earn the confidence of the world,” Geithner said in an interview with American news channel CNBC.
As Treasury chief and previously in his role as head of the New York Federal Reserve, Geithner has been central in the U.S. response to the financial crisis that flared up after the collapse of Lehman Brothers investment bank in 2008.
He dismissed suggestions Europe was about to have its own Lehman moment. “Europe has a tradition of much more indulgence, support for their institutions. … there is no chance that the major countries of Europe will let their institutions be at risk,” he said.
China’s Premier Wen Jiabao said European countries needed to tackle their debt problems and make changes to help restore global financial stability and steady economic growth. Beijing has shown interest in helping financially troubled European countries by investing or buying their bonds.
“Countries must first put their own house in order,” Wen said.
It was unclear whether there would be statements after Wednesday’s teleconference from any of the three countries involved. Indications as to how the talks went would likely affect markets.
Roesler said Germany would deliver a “clear signal to the Greek government” that it must push ahead with reforms, including an ambitious privatization program that has lagged far behind targets.
Speaking during a visit to Rome, Roesler said it was “fundamentally important to re-establish the strength of the Greek state.” He said he planned to go to Greece with a delegation of German industrialists to see what investments could be made to help the Greek economy.
Traders hoped that some form of new support would emerge from the talks, pushing Greek shares higher. The main Athens index outperformed its counterparts in Europe, closing up 1.67 percent.
Some analysts were more skeptical, however.
“I could only see (the teleconference) having a damage-limitation objective because there have been too many rumors … as to what Germany or what our European partners are thinking about Greece,” said economist Vangelis Agapitos.
The main fear of a Greek bankruptcy is that it could destabilize other financially troubled European countries such as Portugal, Ireland, Spain or Italy. It would also have a knock-on effect on banks, many of which are large holders of Greek government bonds. Moody’s on Wednesday downgraded the credit ratings of two French banks, Societe Generale and Credit Agricole.
“We are confronted with the most serious challenge of a generation. This is a fight for the jobs and prosperity of families in all our member states,” European Union Commission President Jose Manuel Barroso told the European Parliament in Strasbourg, France. “This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself.”
Greece relies on funds from last year’s euro110 billion ($150 billion) international bailout. But the lifeline could be cut if the country continues to miss fiscal and reform targets.
The quarterly payout depends on reviews by Greece’s international debt inspectors _ the European Commission, European Central Bank and International Monetary Fund, known as the troika.
The next batch, worth euro8 billion, is due in late September, but there were fears the troika would not approve its disbursement after the debt inspectors suspended their review earlier this month. They are due to return to Athens in coming days. Without the next installment, the country has enough cash to keep it going only until mid-October.
Greece’s government spokesman, Elias Mossialos, said Monday he believed the country would receive the funds.
In July, Greece was granted a second, euro109 billion rescue package, but the terms of that deal have yet to be finalized, with Finland asking for extra collateral guarantees.
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Pylas reported from London. Gabriele Steinhauser in Brussels, Sylvie Corbet in Paris, Theodora Tongas in Athens and Frances D’Emilio in Rome contributed.
The eurozone needs a “quantum” leap toward economic integration, the incoming chief of the European Central Bank said Monday, as the bond yields of countries with shaky finances, like Greece and Italy, jumped amid increased investor tensions.
Mario Draghi warned that measures like the bank’s buying of bonds to stabilize markets were only temporary fixes and that only substantially more integration would address the fundamental problem of a lack of coordination of the eurozone’s fiscal policies.
The movement in bond yields on Monday showed just how varied investors’ confidence was in different eurozone countries. Borrowing rates jumped in countries considered high-risk, such as Greece, Italy and Spain and fell in Germany, widely considered a safe haven in times of financial turmoil.
Speaking at a conference in Paris, Draghi dismissed the idea of eurobonds _ debt issued jointly by the eurozone countries. Some have argued this would help weaker countries borrow more easily because they wouldn’t have to pay such high interest rates, which in turn make their debts bigger. But stable countries like Germany would likely see their rates rise.
Instead, Draghi suggested the eurozone should adopt rules that would require more budget discipline. There is already a proposal that would require all eurozone countries to balance their budgets. Profligate spending during boom times funded by cheap debt is one of the root causes of the current crisis.
Market tensions were high on Monday, both due to worries about some countries’ debt problems and a global financial sell-off triggered by concerns that the U.S. economy may slip back into recession.
The difference in interest rates between the Greek and benchmark German 10-year bonds, known as the spread, spiraled to new records on Monday, topping 17.3 percentage points. Yields on the Greek bonds were above 18 percent.
High yields mean borrowing is more expensive for Greece, making it even harder to reduce its debt load.
In fact, its yields are so high that Greece has been relying since last year on funds from a euro110 billion ($157 billion) package of bailout loans from other European Union countries and the International Monetary Fund. On July 21, European leaders agreed on a second bailout, worth an additional euro109 billion.
Italy’s own 10-year bond yields jumped to 5.45 percent amid signs that the government in Rome is wavering in its commitment to enforce its austerity program.
ECB chief Jean-Claude Trichet in recent days has called on Silvio Berlusconi’s government to push through with the deficit-cutting measures promised in August.
Italy’s stability is of particular concern because it would be too expensive to rescue for the eurozone. In an effort to steady the yields, the ECB has been buying Italian and Spanish bonds in recent weeks, driving down the interest rates fast cash without a hassle.
On Monday, the bank announced that it had increased its purchases last week to euro13.3 billion ($18.8 billion). That’s double the euro6.65 billion spent the previous week.
Draghi indicated that such makeshift measures would continue, including making sure the European Financial Stability Facility _ the eurozone’s bailout fund _ takes over the bond purchases and has enough cash in it.
But, not forever.
“The Programme (of bond-buying) is temporary and fully sterilized,” he said in the version of his speech published on the Bank of Italy’s website. “In other words, it should not be taken for granted by member states.”
The eurozone needs to quickly solve the root of their problems, he said.
“The crisis starts from the incompleteness of the European construction,” he said, and important reforms need to be made to solve it. “Overall, the aim of this effort should be a quantum step up in European economic integration.”
Draghi’s remarks echoed those made by the current ECB chief, who spoke at the same conference.
Trichet said that one solution for the debt crisis would be to eventually create a “federation” with a central finance ministry for the continent that would have the power to force countries to make the difficult decisions that European leaders can only now pressure them to make.
He did not mention Italy, but he and other European officials have recently had to urge Rome to make budget cuts or risk destabilizing the entire eurozone.
“We can imagine a federal government with a federal finance minister,” he said, who would “be capable of imposing this or that decision on any country that is not acting in the interest of the greater good of the federation.”
In the heyday of the boom, several European countries spent more than the EU rules allowed. After the global financial crisis further hurt their finances, countries like Greece and Portugal came close to bankruptcy and were saved only by international rescue packages.
New legislation that would give budget rules more teeth has been floundering for months as the European Parliament and EU member states have failed to agree on more automatic sanctions.
Trichet called Monday for those news rules to be strengthened further.
Separately in Brussels, a group of former European leaders and economists also called for closer economic and fiscal integration to save the currency union.
But the group, which includes former German Chancellor Gerhard Schroeder, former British Prime Minister Tony Blair and U.S. economist Nouriel Roubini _ went further, demanding the creation of eurobonds. France and Germany, the eurozone heavy weights, have so far rejected issuing such bonds.
Stocks are falling at the close of trading as investors’ attention returns to the weak economy and Europe’s debt problems.
The Dow Jones industrial average is down 519, or 4.6 percent, to 10,720. It’s the third time in the last five trading days that the Dow lost more than 500 points. The S&P 500 is down 51 points, or 4.4 percent, to 1,121. The Nasdaq is down 101, or 4.1 percent, to 2,381.
European bank stocks fell on worries that the region’s debt problems are getting worse bad credit payday advance. That pulled down U.S. bank stocks. Financial stocks in the S&P 500 lost more than 7 percent.
The drop erases Tuesday’s big gain following a Federal Reserve pledge to keep rates low. The Fed said it expects the recovery to remain slow.
A few thousand protesters rallied in Cairo and other Egyptian cities Friday to press the country’s military rulers for faster change, but searing summer heat and a growing weariness among some Egyptians with continual protest diminished the large numbers seen in past weeks.
The smaller number came a day after the prime minister replaced nearly half his Cabinet in a nod to demands from the protesters that most activists dismissed as not going far enough.
Still, a die-hard core of several hundreds activists who have been camped out in Cairo’s Tahrir Square for more than two weeks in continual protest insisted they would go on.
More than five months after mass street demonstrations drove President Hosni Mubarak from power, many Egyptians worry that their “revolution” has stalled.
While Mubarak, his sons and a number of his associates are behind bars, protesters see traces of his regime throughout the government. Some have also come to distrust the military council that assumed power after Mubarak’s fall, accusing it of dragging its feet on trials of former regime officials and those accused of killing protesters during the uprising.
“The military council is against the revolution, and we’re here to put pressure on them to stay with the revolution,” said Ahmed al-Sharawi, 21, an engineering student who has been camped out in Tahrir. “If we go home, the revolution will fail,” he said.
Others come to the square for different reasons, not least the carnival-like atmosphere that has taken over.
Activists have blocked traffic on all streets leading in, turning the large interchange at Cairo’s heart into a pedestrian-zone _ a rare luxury in this overcrowded city of 18 million, famous for it reckless drivers and traffic jams.
Inside, vendors have wheeled in carts or set up shop on the sidewalks, selling pretzels, fruit, plastic guns and revolution-themed T-shirts, headbands and wall clocks. Cold drinks are the biggest seller, necessary in a season when midday temperatures regularly top 100 Fahrenheit (38 Celsius).
In the southern city of Luxor, usually hotter than Cairo, activists postponed midday protests for what they called “the Friday of decisiveness” until evening because of the heat.
Also limiting the protests’ size was the decision by the Muslim Brotherhood, Egypt’s best organized political force, not to participate.
Some who come for the atmosphere in Tahrir oppose the sit-in.
“I don’t like the way the tents look,” said Haisam al-Halawani, 28, who strolled in Friday afternoon with his wife Rasha. “Sure, people should come and say what they want, but then they should go home. We don’t need all these tents.”
Still, the pair visits the square weekly, to people-watch, listen to speeches and have a snack and a cold drink.
Al-Halawani agrees with many of the protesters’ demands, especially that former regime officials face prosecution, but he said the protesters expect too much, too fast.
“Not everything will change in one day,” he said.
In another square across town, a few hundred protesters calling themselves “the silent majority” held a counter-demonstration in support of the military council.
Inside the Tahrir tent camp, al-Sharawi, the engineering student, listed the reasons he’s been sleeping in a tent in a traffic circle for more than two weeks: He distrusts the military, wants to see former regime officials tried and said the Cabinet is stocked with Mubarak associates.
But when asked about the new Cabinet sworn in the day before, whose members have few links to Mubarak, he confessed ignorance.
“I haven’t read about that yet,” he said. “I was just going to look for a newspaper.”
He and his fellow tent-dweller Mohammed Shaban rejected the idea that other Cairenes say blocking traffic impedes work.
“If they want to work, they need to protest with us so we can get all our demands and go home,” said Shaban, 22.
In the meantime, the men live on pita bread and preserved cheese, do their laundry in a bucket and wash at a nearby mosque.
“We were in the army, where they give you a cup of water and say, Take a bath! So we’re used to it,” said al-Sharawi, recalling the compulsory stint in the military that Egyptian young men must serve.
They say they’ll remain until “the revolution” is complete.
“Other people bring KFC with them when they protest,” he said. “Not us. We don’t want food or money. If we get all of our demands, Egypt will be richer than America.”
A shipping company says Somali pirates fired a rocket-propelled grenade at an oil tanker off the coast of Yemen and may have caused a fire during an attempted hijacking.
Central Mare Inc., the Greek company that manages the oil tanker Brillante Virtuoso, said Thursday that firefighting efforts would extinguish the pockets of smoke rising from the ship. The ship is carrying 141,000 metric tons of fuel oil.
The company says a fire that ignited in the crew’s accommodation area does not threaten to ignite the cargo guaranteed high risk personal loans.
Pirates attacked the ship 20 miles (30 kilometers) from the port of Aden on Wednesday, but as a result of the fire the pirates abandoned their efforts to overtake the ship.
Sudan’s president threatened to block pipelines in the south if the government there doesn’t pay to transit oil or share it with Khartoum, the official news agency reported Wednesday.
Southern Sudan voted overwhelmingly in January to secede from Sudan and become an independent country in July. That vote was part of a 2005 peace deal that ended more than two decades of war.
The two governments are still negotiating how oil wealth will be shared between the north and the south.
President Omar al-Bashir’s comments late Tuesday in the port city of Port Sudan seem to be hardening his side’s negotiating position, particularly in the context of borders clashes.
Al-Bashir said the southerners “have one of three options: either we share the oil, or they pay fees and taxes for every single barrel that passes through the north or we will shut down the pipeline,” according to Sudan’s official news agency.
Relations between the two partners remained rocky throughout the transitional period, and tension has increased since the vote. Oil is at the center of the fraught relations, as most of it lies in the south, but all the pipelines and the transporting port are in the north.
The south, which does not have any refineries of its own, relies on oil for more than 95 percent of its budget.
Even so, al-Bashir said his country still wants good relations with the south.
Troops from northern Sudan moved into the disputed central Abyei region last month, sending tens of thousands of people who are aligned with the south fleeing.
After regional mediation, the two sides signed an agreement Monday to demilitarize the area.
President Barack Obama urged north and south Sudan to agree to an immediate cease-fire in the state of South Kordofan. In a statement, he praised an agreement to allow Ethiopian peacekeepers into the contested Abyei area.
The U.S. says Sudanese forces have shelled and bombed the area and that there are reports that forces aligned with the government are arresting and allegedly executing southern Sudanese forces and sympathizers.
Obama said reports of attacks based on ethnicity were “deeply disturbing.”
A private research group forecasts that the economy will grow modestly over the next few months after a late-spring slump.
The Conference Board said Friday that its index of leading economic indicators rose 0.8 percent last month. That’s a rebound from April, when the index dropped 0.4 percent _ the first decline since June 2010. A string of declines would indicate that a recession was coming.
The May report showed marked improvement in most areas measured. And it suggests the economy will regain some of the momentum it lost this spring, when high gas prices cut into consumer spending and businesses pulled back on hiring.
Eight of the 10 measures the Conference Board uses to calculate the index increased. In April, only four showed improvement.
Still, Conference Board economist Ken Goldstein cautioned that economic growth will be “choppy” through summer and fall. The weak housing market remains weak. And even though there has been some relief in recent weeks from the high gas and food costs, prices remain elevated.
The Conference Board is a private research group based in New York. It uses data that has mostly already been released about real estate, manufacturing, employment, consumer confidence and financial markets in calculating the leading indicator index payday loans for bad credit. The Conference Board also includes its own estimates about manufacturers’ new orders and the country’s money supply.
A lot of economic data over the past month had disappointed investors and led many economists to lower their growth expectations for this year. Economists recently surveyed by The Associated Press cut their growth outlook to a 2.6 percent annual rate, down from an estimate of 2.9 percent in April. In January, they had forecast 3.2 percent growth for the year.
Some economists say the disruption to the manufacturing sector from Japan’s earthquake will ease and job creation will pick up again in the second half of the year. A survey of CEOs of the country’s biggest companies showed more than 60 percent of them planned to spend more on equipment over the next six months, a sign of confidence. More than half expected their U.S. work forces would grow.
House Democrats emerged from a meeting with President Barack Obama on Thursday sounding at loggerheads with the GOP over how to reduce the deficit as a crucial deadline for U.S. creditworthiness approaches.
Democratic leaders talking to reporters outside the White House emphasized the need for new revenues as part of any deficit-cutting deal _ which generally means new taxes or fees adamantly opposed by Republicans.
They bashed GOP plans to remake Medicare and simultaneously insisted compromise would be reached and acknowledged that the hardest work remains to be done.
“This is a thousand-mile journey that we’re on here, and we are taking some first steps,” said Rep. James Clyburn, D-S.C.
At stake is an unprecedented default on U.S. debt obligations if Congress fails to raise the federal government’s borrowing limit by Aug. 2. The Treasury Department warns failure to act would plunge the economy into crisis.
Republicans are insisting on spending cuts topping $1 trillion as the price for their vote to increase the debt ceiling. The urgency was underscored Thursday as Moody’s Investor Service said the U.S. government could lose its sterling credit rating if Congress and the Obama administration don’t reach agreement to raise the borrowing limit and reduce deficits over the longer term.
House Democratic leaders insisted they’d get the job done.
“It has to be clear: We’re not going to default,” said House Minority Leader Nancy Pelosi, D-Calif.
Negotiations on finding spending cuts to meet Republican demands are being led by Vice President Joe Biden, and Democratic leaders involved in the talks said there’d been progress. Areas such as farm subsidies and federal pensions have been targeted for cuts. The Biden group next meets June 9.
“We have made progress on some important issues,” said Rep. Chris van Hollen, D-Md., top Democrat on the House Budget Committee. “Have we engaged on the huge, what I refer to as the politically nuclear issues? No, but the reality is that you have to begin a walk with the first step.”
Earlier Thursday, the White House pushed back against calls from Republicans for Obama to show more leadership on the deficit and offer more specifics.
“We are at a point now where we don’t need new plans,” said presidential spokesman Jay Carney, arguing that Obama has already offered one payday loans guaranteed no fax. “We need to find common ground around the shared goal of significant deficit reduction.”
A day after House Republicans held their own meeting with the president at the White House, Carney also shrugged off Speaker John Boehner’s offer to negotiate directly with the president to speed things along. Boehner said Wednesday that Biden’s negotiations aren’t making fast enough progress and said he was willing to get involved directly with Obama.
“The vehicle for these negotiations is the talks led by the vice president,” Carney said. “And we feel that those talks have been productive.” He said Obama “may or may not” talk with Boehner as the Biden negotiations proceed.
The U.S. government hit its $14.3 trillion borrowing limit on May 16, and the Treasury is using a series of extraordinary maneuvers to meet financial obligations. The administration hasn’t said how large an increase in the debt limit it will seek, though the last one was around $2 trillion for a year.
Republicans say any increase in the debt limit must be matched by spending cuts of the same magnitude, while the Obama administration argues that the debt limit must be increased regardless.
Obama’s plan for reducing the deficit by $4 trillion over 12 years relies half on spending cuts but also eliminates tax breaks and loopholes, whereas Republicans say tax increases are off the table and also contend Obama’s plan lacks specifics. The argument has been particularly fierce around Medicare, the giant health insurance program for Americans 65 and older. Democrats are gaining politically from public opposition to a GOP proposal to send future beneficiaries shopping for health insurance in the private market.
Republicans contend that they at least have a plan for Medicare. Republicans dismiss as insufficient Obama’s proposals aimed at paring back the program, which include empowering an independent board to recommend policies to reduce the growth of Medicare spending.
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