The Star Online: World Updates
The Star Online: World Updates |
- ANALYSIS - Greek PM buys time, but will he implement reforms?
- U.S. set for big Afghanistan troop cut: Sen. Reid
- Force of Chile's volcanic eruption eases, ash spews
| ANALYSIS - Greek PM buys time, but will he implement reforms? Posted: 17 Jun 2011 09:24 PM PDT ATHENS (Reuters) - Greek Prime Minister George Papandreou's cabinet reshuffle has probably paved the way for approval of a harsh austerity package but there are doubts over whether it will be implemented.
Papandreou, his own political survival on the line, plumped for party insiders and rivals to neutralise opposition instead of tough policy cops, in a wholesale shake-up of his cabinet on Friday. He replaced unpopular Finance Minister George Papaconstantinou, architect of the reform package, with powerful party insider Evangelos Venizelos, hitherto the defence minister. The reshuffle should appease discontent within his Socialist Party (PASOK), making it much more likely that he will win a confidence vote on Tuesday. That will in turn enable the approval of a 28-billion-euro austerity package on top of cuts that have driven unemployment up to 16 percent and extended a recession into its third year. The package is essential in return for a new bailout from the European Union and International Monetary Fund. But although the new cabinet is expected to approve headline figures agreed with the EU and IMF, they may look for wiggle room when it comes to passing laws to meet those targets. Comments from both the prime minister and his new finance chief after the shakeup appeared to fuel that concern. Papandreou told the new cabinet they had the resolve to push through reforms and save the Greek economy. But he said the new team would try to focus more on supporting growth -- a difficult prospect for a country trying to cut its budget deficit. Venizelos said he would go to Brussels on Sunday to try to reach agreement on changes to the plan already approved in parliamentary committee. "Our fiscal targets can afterwords be served by other means if these means are accepted by our partners," he told Mega TV. "All the changes, as marginal as they may be, to the mid-term plan and the implementation law, serve social justice." SHIFTING COST CUTS? Papandreou has also appointed Pantelis Oikonomou, an outspoken opponent of the bailout, as deputy finance minister. Oikonomou has said that Greece should not sell loss-making companies because no one would buy them, nor profitable ones because Greeks should not lose their dividends. "Those who are called to implement the mid-term budget plan believe in it less than Papaconstantinou," said Stefanos Manos, a political commentator and former finance minister, reflecting cynicism about the new cabinet. Facing widespread public anger and daily demonstrations that turned violent on Wednesday, the new ministers may seek to shift some of the cost cuts or tax hikes away from previously agreed areas. Papaconstantinou had been praised by EU and IMF officials for his efforts to implement reforms but had already failed to meet a target for cutting the budget deficit from 15.4 percent of annual output in 2009 to 8 percent in 2010. Venizelos is Papandreou's main party rival and close to PASOK deputies who have criticised the package as too severe. Papandreou failed to convince his first choice, ex-European Central Bank Vice-President Lucas Papademos, an internationally respected figure who analysts say would probably have adhered strictly to the letter of the deal with the EU and IMF. Analysts said introducing a new economic team could also pose problem in talks with lenders, particularly since little is known about Venizelos's financial expertise or whether his main priority will be impressing a domestic audience or Brussels. "(EU) finance ministers have been talking for months and now, in a very crucial, delicate phase, they suddenly have to talk to somebody new," said Kornelius Purps, a bond analyst at UniCredit. "It doesn't make it simpler to introduce a new partner about whom little is known." TOUGH SELLOFFS Papandreou had previously shown signs of trying to win public support by softening his plans. Just before the reshuffle, and facing a growing backbench rebellion, Papaconstantinou agreed to refrain from raising the tax on heating fuel and to keep the tax-free threshold on property at 200,000 euros ($283,200), rather than 100,000, as the plan originally envisioned. Venizelos is likely to seek similar solutions. "Some of the measures that have already been announced might not be implemented," said one Greek analyst who wished not to be named. "He can leave out of the austerity package a few social groups, or make the fiscal consolidation softer." In a sign of deep market concern over Greece's will to repay its debt mountain, equivalent to 150 percent of the annual economic output, the cost of insuring its government debt against default hit yet another record high on Friday before falling back. Papandreou's decision to ditch 15 senior and deputy members of his cabinet at the height of negotiations with lenders has caused consternation among EU leaders. Papandreou's reshuffle has appeased his critics but could have opened the way for further clashes over policy now that his closest ally in pursuing EU- and IMF-mandated belt-tightening is no longer at his side. "His position as party leader and as prime minister has been severely, possibly permanently, damaged," said Eurasia Group analyst Wolfango Piccoli. "Greece is set for snap polls in a few months." Copyright © 2011 Reuters Full Feed Generated by Get Full RSS, sponsored by USA Best Price. | ||
| U.S. set for big Afghanistan troop cut: Sen. Reid Posted: 17 Jun 2011 09:24 PM PDT WASHINGTON (Reuters) - The United States is on the verge of announcing a "substantial" drawdown of American troops from Afghanistan, Senate Majority Leader Harry Reid said on Friday. "There's going to be a drawdown. I am confident that it will be one that's substantial. I certainly hope so," the leading Senate Democrat said during an interview with PBS Newshour.
There currently are about 100,000 U.S. troops fighting in Afghanistan, up from about 34,000 when President Barack Obama, a Democrat, took office in 2009. Meanwhile, U.S. House of Representatives Speaker John Boehner, the top Republican in Congress, continued to criticize Obama's handling of U.S. air strikes against Libyan leader Muammar Gaddafi. "He has failed to communicate to the American people why continuing this mission is critical to our national security," Boehner said in a statement. Boehner also complained that the White House had decided to "conceal" whether the Justice Department's Office of Legal Counsel backed Obama's legal basis for military operations against Libya. Boehner said on Thursday that Congress could cut funding for U.S. military involvement in Libya, ratcheting up tension between lawmakers and the White House over the NATO-led air war. Reid, in the PBS interview, defended Obama's military activities against Libya, which were undertaken without approval from the U.S. Congress. He said the 1973 U.S. War Powers Resolution, which sets out the powers of the president and Congress on U.S. military action, "has no application" to operations under way against Libyan leader Muammar Gaddafi, noting no U.S. combat troops were committed there. Besides, Reid added, "This thing's going to be over before you know it anyway." Republicans in the House of Representatives have threatened to cut funding for U.S. military operations in Libya because Obama did not get lawmakers' consent. An anti-war Democrat, Representative Dennis Kucinich, on Friday said he would try to halt U.S. funds for the "unauthorized war in Libya" with an amendment to a defense spending bill expected on the House floor next week. On Afghanistan, Reid noted that the American public suffered "war fatigue" from combat there that has been going on for nearly 10 years. Reid, who met this week with General David Petraeus, the U.S. commander in Afghanistan, said he thought the administration could announce the troop drawdown the week after next. But he added that he had "no inside information." The war in Afghanistan against the Taliban insurgency is costing U.S. taxpayers more than $110 billion a year. (Reporting by Richard Cowan; Editing by Eric Walsh) Copyright © 2011 Reuters Full Feed Generated by Get Full RSS, sponsored by USA Best Price. | ||
| Force of Chile's volcanic eruption eases, ash spews Posted: 17 Jun 2011 09:24 PM PDT SANTIAGO (Reuters) - The force of a volcanic eruption in Chile that has spewed an ash cloud that caused air traffic chaos around the globe has eased slightly, emergency officials said on Friday. Ash from a volcano in Chile's Puyehue-Cordon Caulle chain that erupted on June 4 after decades lying dormant has forced the sporadic cancellation of hundreds of flights in recent weeks, from Argentina to Australia.
Experts say fine ash particles belched into the air and carried around the world by winds could potentially continue to hamper air travel for months. But a decrease in the force of the eruption raises hopes the eruption is stabilizing. "The volcanic activity has eased, but it continues to be a moderate eruption," a spokeswoman at national emergency office ONEMI told Reuters. The eruption sent a towering ash cloud soaring up to 20 miles (30 km) into the atmosphere, though the cloud has since shrunk to just a few kilometers in height. The eruption has grounded flights as far away as New Zealand because of the ash, which can damage jet engines, and the chaos in South America has buffeted airlines including Chile's LAN, Brazil's TAM and Gol. LAN briefly interrupted domestic Chilean flights south to Patagonia on Friday due to to the ash, before resuming services. Air travel in northern Europe and Britain was hit last month after Iceland's most active volcano at Grimsvotn sent a thick plume of ash and smoke 15.5 miles (25 km) into the sky. The Chilean eruption has also coated picture-postcard tourist towns in southern Argentina with gray ash, impacting livestock and deterring visitors during the lucrative winter season. In April last year, the eruption of another Icelandic volcano, Eyjafjallajokull, led to 100,000 canceled flights, affecting 10 million people at a cost of $1.7 billion. Chilean volcanoes tend to spew more ash than European volcanoes like Iceland's, because the magma is thicker and rises more slowly. As a result more ash is expelled. It was the latest in a series of volcanic eruptions in Chile in recent years. Chile's Chaiten volcano erupted spectacularly in 2008 for the first time in thousands of years, spewing molten rock and a vast cloud of ash that reached the stratosphere. The Llaima volcano, one of South America's most active, erupted in 2008 and 2009. Chile's chain of about 2,000 volcanoes is the world's second-largest after Indonesia's. Some 50 to 60 are on record as having erupted, and 500 are potentially active. (Reporting by Simon Gardner and Alexis Krell; Editing by Eric Walsh) Copyright © 2011 Reuters Full Feed Generated by Get Full RSS, sponsored by USA Best Price. |
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