Did being part of the EU protect them from the Financial Crisis

Turmoil Spurs US Plant Closures, EU Layoffs At ArcelorMittal

December 10th, 2008

By Alex MacDonald

In a sign of the severity of the economic downturn, ArcelorMittal (MT), the world’s largest steelmaker, announced plans to close two U.S. steel processing plants and lay off several hundred workers in the European Union.

ArcelorMittal plans to close its finished steel processing plant in Lackawanna, N.Y., by the end of April and plans to close its finished steel processing plant in Hennepin, Ill., sometime in the future, although no date was disclosed. The two closures will result in 545 job losses, 260 of which are located at the N.Y. plant and 285 of which are located at the Illinois plant.

Meanwhile, ArcelorMittal rolled out voluntary redundancy programs in Europe over the past week or so that would eliminate 3,550 mostly white-collar jobs through voluntary layoffs. The company is eyeing 6,000 job cuts in Europe out of 9,000 job cuts globally.

The closures and layoffs are in line with the company’s plans to cut 35% of its global steel production capacity during the fourth quarter and saving $1 billion annually by cutting 3% of its global workforce.

Both steel plants supply the auto market, where demand has slumped so dramatically that the U.S.’s three largest car manufacturers are now seeking federal government funds to avert bankruptcy.

The closures are part of ArcelorMittal’s global restructuring program to weather the economic downturn.

The decision to close ArcelorMittal Lackawanna was “purely an economic business decision based on the extraordinary economic conditions we face today,” the company said in a statement.

The Lackawanna plant has inherent disadvantages due to its location that lead to higher costs, longer customer lead times, and higher inventory levels than other ArcelorMittal finishing facilities in the US, the company said.

Meanwhile, at Hennepin, “the company had to make the tough decision to close the…facility, consolidate operations and move production to other ArcelorMittal facilities in the U.S.” in order to remain competitive.

ArcelorMittal now has announced plans to lay off 19% of its U.S. salaried workforce of 15,543 people and has announced more than half of its planned job cuts in Europe.

The United Steelworkers union and other relevant stakeholders were notified about the plant closures and job layoffs. They are now negotiating with the Luxembourg-based company to arrive at a compromise.

Jim Robinson, the director of USW’s District 7 said the union was aware that ArcelorMittal faced operational issues at the two plants but was surprised by the company’s decision to close the plants.

“They called us before they announced but we did not know this specifically” beforehand, he said.

Robinson dismissed views that ArcelorMittal has underinvested in the plants. “I don’t think the issue is lack of investment over time, I think it’s an issue of the company’s overall strategy.” He declined to elaborate further.

ArcelorMittal is one of many steelmakers globally that have announced production cuts and layoffs. U.S. Steel Corporation (X), the world’s tenth-largest steelmaker by volume, announced last week it would temporarily idle an iron ore mining facility and two steel works. The move will affect 3,500 employees.

Corus, Europe’s second largest steelmaker by volume and the European arm of India-based Tata Steel Ltd (500470.BY) has cut production by 30% and has shed about 500 jobs from the U.K.

In Europe, ArcelorMittal is seeking voluntary redundancies equal to 1,400 jobs in France, 800 in Belgium, 750 in Germany, and 600 in Spain. Most of them are white collar jobs. ArcelorMittal’s American depositary shares recently traded up 8.9% to $25.99 on the New York Stock Exchange.

Company Web site: http://www.arcelormittal.com

Source

EU businesses expect 1 million job losses in 2009

Brussels – European Union businesses called Monday for a cut in interest rates amid predictions that the bloc’s economic slowdown could lead to more than 1 million jobs being lost in 2009.

BusinessEurope, which groups national business federations from 34 European countries, also called on governments to ensure a continued flow of credit and to approve structural reforms aimed at improving the continent’s competitiveness.

According to its latest Economic Outlook, EU gross domestic product (GDP) is predicted to grow by just 0.4 per cent in 2009, compared to 1.4 per cent this year, with exports, imports and private consumption levels all slowing.

Unemployment is predicted to increase from 7 per cent to 7.8 per cent, with the loss of 1.1 million jobs, compared to a net job creation of more than 2 million in 2008.

“The most fundamental preoccupation of the business community is obviously the way in which the impact of the financial market turmoil will play out,” the paper said.

“Even though a fully-fledged credit crunch has not yet appeared in Europe, uncertainty about the impact for companies and consumer markets has increased tremendously.”

Source

SEMI Europe calls for investment to avoid mass job losses in semiconductor industry

December 10 2008

During the third SEMI Brussels forum, SEMI Europe declared that the decline in the European semiconductor industry could potentially put half a million European jobs at risk. SEMI Europe presented its White Paper to EU officials and urgently appealed for the EU and national policymakers to invest to support the European semiconductor industry citing the industries importance to the health and global competitiveness of the EU economy.

The equipment/materials producers and the semiconductor device manufacturers contribute around €29 billion to the EU economy and provide around 215,000 jobs. The European semiconductor industry is also a significant contributor to the GDP in EU countries such as France, Germany, Ireland, the Netherlands and the UK.

“If semiconductor manufacturers leave Europe, indigenous equipment & materials producers will face an uncertain future”, said Franz Richter, Chairman of the SEMI European Advisory Board. “The current economic crisis and rising unemployment underscore the urgent need to safeguard jobs in the European semiconductor industry. Supporting a robust and competitive semiconductor industry in Europe is critical to keeping jobs in Europe across all industries and supporting key European economies.”

The decline of the market share even during the increase in total volumes sold reflects that manufacturing is changing and moving away from Europe because of the unfavourable global level playing field conditions. The European equipment and materials manufacturers that supply the semiconductor industry with machinery and parts are for the most part small or medium-sized European businesses that heavily rely on the future European semiconductor industry to guarantee their own future and the 105,000 jobs they embody.

Further information on the Brussels forum is available here.

Source

Spanish auto sector highly exposed to global crisis

December 11 2008

By Robert Hetz

MADRID,

Spain’s car industry, which became Europe’s third largest, thanks to a cheap workforce, has lost cost advantage and could shrink as companies slash costs at foreign plants and save politically-sensitive jobs at home.

As executives at multinational manufacturers weigh up Spain’s ageing factories, relatively high wage costs and weak competitiveness against their own domestic markets and cheaper alternatives, the country’s plants are clear targets as the credit crunch saps demand all over the world.

“The big decisions are being taken abroad, not here, and managers in London, Paris and Detroit prefer to close a plant here and not in their home market,” said the director of one Spanish parts plant, who asked not to be named.

Unlike Germany, France or Italy, Spain’s auto industry has no nationally-owned car maker and little control over decisions on the future of its 18 foreign-owned plants, which employ around 70,000 people.

And unlike the case of Britain, Spain’s plants are older and less productive, and the country lacks a more skilled workforce or much tradition of home-grown research and development.

Global car makers, also including Peugeot, Opel and Volkswagen, built most of their Spanish plants in the 1970s when Spain was a low-cost backwater, well placed to serve Northern European markets.

Since the 70s, Spain has lost its price advantage as living standards have caught up with the European average. In 2007, per capita income overtook that of Italy. At the same time, new competitors have emerged as low-cost manufacturing centres.

Spain’s auto-sector salaries averaged 22.83 euros ($29.64) an hour last year, above the European average and around three times the 6.93 euros in Poland and 8.83 euros in the Czech Republic, Europe’s new manufacturing hubs, alongside North Africa.

NORTH AFRICA PASSES SPAIN FOR RENAULT

Renault plans to make 200,000 cars at its plants in North Africa in 2010 and double that within a couple of years, overtaking production from its Spanish operations.

The global credit crunch has hurt demand for new cars across Europe, with new car registrations in November falling 36.8 percent in the UK, 18 percent in Germany, 30 percent in Italy and 50 percent in Spain.

With some 84 percent of cars built in Spanish plants for export, manufacturers are finding fewer financial or political reasons for remaining in the country as international competition rises.

Spanish plants are ideal candidates for the inevitable cuts across Europe, head of Ford Espana Jose Manuel Machado said, as salaries rise and productivity fails to rise at a similar rate.

Machado’s comments came before the U.S. company announced production cuts of 120,000 units at its Almussafes plant in Valencia, and the temporary layoff of 5,200 workers.

Job cuts are expected from most of the major manufacturers, with more than 60 filings listing potential layoffs by private companies made to the government, which may affect up to 40,000 workers, Spain’s main union UGT said.

As Spain’s unemployment rate soars to the highest in the European Union and the economy nears recession, the government is keen to keep the industry, which accounts for around 5 percent of gross domestic product, in the country.

Spain has earmarked 800 million euros for the sector as part of measures worth a total of around 50 billion euros to stimulate the economy.

But this aid may not be enough.

“It’s a good gesture from the government, but obviously the amount of money is insufficient. It would be less than 80 million euros per manufacturer,” said Jose Antonio Bueno of consultancy Europraxis.

The sharp fall in new car sales in Spain has also affected the manufacturers’ showrooms and spare parts centres throughout the country.

Concessions for new and second-hand cars and garages employ around 278,000 people in Spain, and 16,000 of those jobs are at risk, the association for the sector, Ganvam, estimates.

“Four years ago we sold two or three cars a day, but now its not even two a week,” said Adela Benito, who has worked in a Madrid-based Renault showroom for 20 years. (Reporting by Robert Hetz; Additional reporting by Tomas Gonzalez; Writing by Paul Day; Editing by Rupert Winchester)

Source

Swedes want government bailout for Volvo

In a new survey just released, 68 percent of Swedes want to see the Swedish government bail out its beleaguered carmaker Volvo. Although Volvo is owned by US carmaker Ford, Swedes would like its government to temporarily take control of the nation’s iconic firm, as many residents fear Volvo may disappear entirely from Sweden in the near future.

The Local newspaper reports that support for government intervention is piling in from all sides of the political arena. Some 65 percent of those polled who support the bailout side with one of the governing Alliance parties, and 73 percent of all left bloc voters approve of a government bailout.

Peter Larsson of the Swedish Association of Graduate Engineers points out that Volvo’s current crisis is not minor. “One thing is certain, there are no dollars on their way over the Atlantic,” Larsson said, referring to the massive problems currently faced by the “Big Three” US carmakers – Ford, Chrysler, and (Saab-owner) General Motors.

Rolf Wolff, dean of the school of business at Gothenburg University, told The Local: “If Volvo Cars disappears as a base for industrial knowledge and skills, then Sweden will never again be a part of the auto industry. All the knowledge and skills would be lost, and with it all future associated development potential would be gone.”

Maud Olofsson, Sweden’s minister of trade and industry, has expressed doubts whether the government would be able to better manage Volvo than the car firm itself. For now, the issue has been placed on the political back burner, but the crisis at Volvo and Ford goes on.

Source

This is just the tip of the iceburg.  Seems no one is safe from the Financial Crisis. Not even EU members.

There are 27 member of the European Union.

austria 1. Austria
belgium 2. Belgium
UK 3. UK
denmark 4. Denmark
germany 5. Germany
greece 6. Greece
ireland 7. Ireland
spain 8. Spain
italy 9. Italy
luxembourg 10. Luxembourg
netherlands 11. Netherlands
portugal 12. Portugal
finland 13. Finland
france 14. France
sweden 15. Sweden
cyprus 16. Cyprus
czech 17. Czech Republic
estonia 18. Estonia
hungary 19. Hungary
latvia 20. Latvia
lithuania 21. Lithuania
malta 22. Malta
poland 23. Poland
slovakia 24. Slovakia
slovenia 25. Slovenia
bulgaria 26. Bulgaria
romania 27. Romania

EU members and when they joined.

1952 Belgium, France, Germany, Italy, Luxembourg, Netherlands

1973 Denmark, Ireland, United Kingdom

1981 Greece

1986 Portugal, Spain

1995 Austria, Finland, Sweden

2004 Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia

2007 Bulgaria, Romania

Source

Hungary’s Letter of Intent to the IMF

World Bank lends to Bulgaria to tackle poverty, jobless

Latvia mulling IMF loan as crisis sweeps Nordic region

EU, Iceland, Canada Suffering Fall Out, Caused By US Crisis

Europeans Angry at their Money being Used for Bailouts

The £2trillion question for British economy

Europe catches America’s financial disease

How Britain’s banks will never be the same again

Economist, deregulation and loose fiscal policies lead to Meltdown

World Leaders Must Roll Back Radical WTO Financial Service Deregulation

Ryanair to appeal EU’s ‘corrupt’ support of Alitalia takeover

Ashley Mote Revealing European Union Corruption

The EU budget is necessarily corrupt

EU leaders tear up rules of Eurozone

Starting to remind me of the Corruption in the US where the Crisis started.

141 states support Depleted Uranium Ban

Campaign Against Depleted Uranium

Sign Petition to Ban DU

What is DU?

  • Depleted Uranium is a waste product of the nuclear enrichment process.
  • After natural uranium has been ‘enriched’ to concentrate the isotope U235 for use in nuclear fuel or nuclear weapons, what remains is DU.
  • The process produces about 7 times more DU than enriched uranium.

Despite claims that DU is much less radioactive than natural uranium, it actually emits about 75% as much radioactivity. It is very dense and when it strikes armour it burns (it is ‘pyrophoric’). As a waste product, it is stockpiled by nuclear states, which then have an interest in finding uses for it.

DU is used as the ‘penetrator’ – a long dart at the core of the weapon – in armour piercing tank rounds and bullets. It is usually alloyed with another metal. When DU munitions strike a hard target the penetrator sheds around 20% of its mass, creating a fine dust of DU, burning at extremely high temperatures.

This dust can spread 400 metres from the site immediately after an impact. It can be resuspended by human activity, or by the wind, and has been reported to have travelled twenty-five miles on air currents. The heat of the DU impact and secondary fires means that much of the dust produced is ceramic, and can remain in the lungs for years if inhaled.

Who uses it?
At least 18 countries are known to have DU in their arsenals:

  • UK
  • US
  • France
  • Russia
  • China
  • Greece
  • Turkey
  • Thailand
  • Taiwan
  • Israel
  • Bahrain
  • Egypt
  • Kuwait
  • Saudi Arabia
  • India
  • Belarus
  • Pakistan
  • Oman

Most of these countries were sold DU by the US, although the UK, France and Pakistan developed it independently.

Only the US and the UK are known to have fired it in warfare. It was used in the 1991 Gulf War, in the 2003 Iraq War, and also in Bosnia-Herzegovina in the 1990s and during the NATO war with Serbia in 1999. While its use has been claimed in a number of other conflicts, this has not been confirmed.

Health Problems

  • DU is both chemically toxic and radioactive. In laboratory tests it damages human cells, causing DNA mutations and other carcinogenic effects.
  • Reports of increased rates of cancer and birth defects have consistently followed DU usage.
  • Representatives from both the Serbian and Iraqi governments have linked its use with health problems amongst civilians.
  • Many veterans remain convinced DU is responsible for health problems they have experienced since combat

Information from animal studies suggests DU may cause several different kinds of cancer. In rats, DU in the blood-stream builds up in the kidneys, bone, muscles, liver, spleen, and brain. In other studies it has been shown to cross both the blood-brain barrier and the placenta, with obvious implications for the health of the foetus. In general, the effects of DU will be more severe for women and children than for healthy men.

In 2008 a study by the Institute of Medicine in the US listed medical conditions that were a high priority to study for possible links with DU exposure: cancers of the lung, testes and kidney; lung disease; nervous system disorders; and reproductive and developmental problems.


Epidemiology

What is missing from the picture is large-scale epidemiological studies on the effects of DU – where negative health effects match individuals with exposure to DU. None of the studies done on the effects on soldiers have been large enough to make meaningful conclusions. No large scale studies have been done on civilian populations.

In the case of Iraq, where the largest volume of DU has been fired, the UK and US governments are largely responsible for the conditions which have made studies of the type required impossible. Despite this, these same governments use the scientific uncertainties to maintain that it is safe, and that concerns about it are misplaced.

However, in cases where human health is in jeopardy, a precautionary approach should prevail. Scientific scepticism should prevent a hazardous course of action from being taken until safety is assured. To allow it to continue until the danger has been proved beyond dispute is an abuse of the principle of scientific caution.

Environmental Impacts
The UN Environment Programme (UNEP) has studied some of the sites contaminated by DU in the Balkans, but it has only been able to produce a desk study on Iraq. Bullets and penetrators made of DU that do not hit armour become embedded in the ground and corrode away, releasing material into the environment.

It is not known what will happen to DU in the long term in such circumstances. The UNEP mission to Bosnia and Herzegovina found DU in drinking water, and could still detect it in the air after seven years – the longest period of time a study has been done after the end of a conflict.

Uranium has a half life of 4.5 billion years, so DU released into the environment will be a hazard for unimaginable timescales.

Decontaminating sites where DU has been used requires detailed scrutiny and monitoring, followed by the removal and reburial of large amounts of soil and other materials. Monitoring of groundwater for contamination is also advised by UNEP. CADU calls for the cost of cleaning up and decontaminating DU affected sites to be met by the countries responsible for the contamination.

The Campaign
CADU is a founder member of the International Coalition to Ban Uranium Weapons (ICBUW) – now comprising over 102 member organisations in 27 countries.

CADU and ICBUW campaign for a precautionary approach: there is significant evidence that DU is dangerous, and faced with scientific uncertainty the responsible course of action is for it not to be used. To this end CADU and ICBUW are working towards an international treaty that bans the use of uranium in weapons akin to those banning cluster bombs and landmines.

Through the efforts of campaigners worldwide the use of DU has been condemned by four resolutions in the European Parliament, been the subject of an outright ban in Belgium, and brought onto the agenda of the United Nations General Assembly.

Source

Sign Petition to Ban DU

International Campaign to Ban Uranium Weapons

141 states support second uranium weapons resolution in UN General Assembly vote

The United Nations General Assembly has passed, by a huge majority, a resolution requesting its agencies to update their positions on the health and environmental effects of uranium weapons.
December 2 2008

The resolution, which had passed the First Committee stage on October 31st by 127 states to four, calls on three UN agencies – the World Health Organisation (WHO), the International Atomic Energy Agency (IAEA) and the United Nations Environment Programme (UNEP) to update their positions on uranium weapons. The overwhelming support for the text reflects increasing international concern over the long-term impact of uranium contamination in post-conflict environments and military ranges.

In the 17 years since uranium weapons were first used on a large scale in the 1991 Gulf War, a huge volume of peer-reviewed research has highlighted previously unknown pathways through which exposure to uranium’s heavy metal toxicity and radioactivity may damage human health.
Throughout the world, parliamentarians have responded by supporting calls for a moratorium and ban, urging governments and the military to take a precautionary approach. However the WHO and IAEA have been slow to react to this wealth of new evidence and it is hoped that this resolution will go some way to resolving this situation.

In a welcome move, the text requests that all three agencies work closely with countries affected by the use of uranium weapons in compiling their research. Until now, most research by UN member states has focused on exposure in veterans and not on the civilian populations living in contaminated areas. Furthermore, recent investigations into US veteran studies have found them to be wholly incapable of producing useful data.

The text also repeats the request for states to submit reports and opinions on uranium weapons to the UN Secretary General in the process that was started by last year’s resolution. Thus far, 19 states have submitted reports to the Secretary General; many of them call for action on uranium weapons and back a precautionary approach. It also places the issue on the agenda of the General Assembly’s 65th Session; this will begin in September 2010.

The First Committee vote saw significant voting changes in comparison to the previous year’s resolution, with key EU and NATO members such as the Netherlands, Finland, Norway and Iceland changing position to support calls for further action on the issue. These changes were echoed at the General Assembly vote. Once again Japan, which has been under considerable pressure from campaigners, supported the resolution.

Of the permanent five Security Council members, the US, UK and France voted against. They were joined by Israel. Russia abstained and China refused to vote.

The list of states abstaining from the vote, while shorter than in 2007, still contains Belgium, the only state to have implemented a domestic ban on uranium weapons, a fact that continues to anger Belgian campaigners. It is suspected that the Belgian government is wary of becoming isolated on the issue internationally. Two Nordic states, Denmark and Sweden continue to blow cold, elsewhere in Europe Poland, the Czech Republic, Portugal and Spain are also dragging their feet, in spite of a call for a moratorium and ban by 94% of MEPs earlier this year. Many of the abstainers are recent EU/NATO accession states or ex-Soviet republics such as Kazakhstan.

Australia and Canada, both of whom have extensive uranium mining interests and close ties to US foreign policy also abstained.

The resolution was submitted by Cuba and Indonesia on behalf of the League of Non-Aligned States.

Voting results in full

In favour:

Afghanistan, Algeria, Angola, Antigua and Barbuda, Argentina, Armenia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bhutan, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Chile, Colombia, Comoros, Congo, Costa Rica, Côte d’Ivoire, Cuba, Cyprus, Democratic People’s Republic of Korea, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Finland, Germany, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Iceland, India, Indonesia, Iran, Iraq, Ireland, Italy, Jamaica, Japan, Jordan, Kenya, Kuwait, Lao People’s Democratic Republic, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands, Mauritania, Mauritius, Mexico, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nauru, Nepal, Netherlands, New Zealand, Nicaragua, Niger, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Qatar, Rwanda, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Saudi Arabia, Senegal, Serbia, Singapore, Solomon Islands, South Africa, Sri Lanka, Sudan, Suriname, Swaziland, Switzerland, Syria, Tajikistan, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkmenistan, Tuvalu, Uganda, United Arab Emirates, United Republic of Tanzania, Uruguay, Uzbekistan, Vanuatu, Venezuela, Viet Nam, Yemen, Zambia, Zimbabwe.

Against:

France, Israel, United Kingdom, United States.

Abstain:

Albania, Andorra, Australia, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Georgia, Greece, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Luxembourg, Micronesia (Federated States of), Palau, Poland, Portugal, Republic of Korea, Republic of Moldova, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, The former Yugoslav Republic of Macedonia, Turkey, Ukraine.

Absent: Central African Republic, Chad, China, Democratic Republic of the Congo, Fiji, Gabon, Gambia, Kiribati, Monaco, Saint Kitts and Nevis, Seychelles, Sierra Leone, Somalia.

Source

Honor Vets by Learning About Depleted Uranium

November 11, 2008

by Barbara Bellows

As Europe mourns in Verdun today for those lost in “The War to End All Wars”, World War I, we could look to another moment in European history to shed light on the most aggressively silenced story of the Bush administration.

In late 2000 and January 2001, reports were exploding across Europe about the rise in cancer amongst NATO soldiers who had served in the “peacekeeping missions” in Bosnia and Kosovo. The effects of the depleted uranium in the U.S. and U.K. weapons could not be ignored.

But history shows that the United Nations and the World Health Organization could be intimidated. The report from the WHO – that detailed how the DU vaporized upon impact into tiny particles that were breathed in, or consumed through the mouth or entered through open wounds, where the irradiating bits attacked cells all the way through the body, causing mutations along the way – was shelved under pressure from the U.S.

Even now, the major U.S. news organizations do not touch the subject, though the international press cannot ignore it. Even last month, a Middle Eastern Reuters reporter discussed the health damages because of the contaminated environment with Iraqi En Iraqi Environment Minister Nermeen Othman,

“When we talk about it, people may think we are overreacting. But in fact the environmental catastrophe that we inherited in Iraq is even worse than it sounds.”

And The Tehran Times further endangers their country by continuing to report on the problem, calling it a war crime.

And across the internet, retired Air Force Lt. Col. Roger Helbig seeks to intimidate anyone who dares to bring up the subject.

But we evolve, and the United Nations First Committee has overwhelmingly passed a resolution, on October 31st, calling for “relevant UN agencies, in this case the International Atomic Energy Association (IAEA), World Health Organisation (WHO) and United Nations Environment Programme (UNEP) to update and complete their research into the possible health and environmental impact of the use of uranium weapons by 2010.” The only countries that voted against it were the United States, the United Kingdom, Israel and France.

Meanwhile, to help the reader get to the point, I’ve put together the following.  Although the facts, for the most part, do not contain links, there is a list of the references at the end.

Ten Essential Facts:

1. Depleted uranium, the nuclear waste of uranium enrichment, is not actually “depleted” of radiation; 99.3% of it is Uranium238, which still emits radioactive alpha particles at the rate 12,400/second, with an estimated half life of 4.5 billion years.

2. Depleted uranium is plentiful – there are 7 pounds remaining for every pound of enriched uranium – and requires expensive and often politically-contentious hazardous waste storage.

3. Depleted uranium is less of a problem for the nuclear industry when it is cheaply passed on to U.S. weapons manufacturers for warheads, penetrators, bunker-busters, missiles, armor and other ammunition used by the U.S. military in the Middle East and elsewhere, and sold to other countries and political factions.

4. Depleted uranium is “pyrophoric”, which makes it uniquely effective at piercing hard targets, because upon impact, it immediately burns, vaporizing the majority of its bulk and leaving a hard, thin, sharpened tip – and large amounts of radioactive particles suspended in the atmosphere.

5. Depleted uranium weaponry was first used in the U.S. bombing of Iraq in 1991, under President George H. W. Bush and Defense Secretary Dick Cheney.

6. Depleted uranium weaponry was later used by President Bill Clinton in the NATO “peace-keeping” bombing missions in Bosnia, Kosovo and Serbia. By January 2001, as the 2nd President Bush and Dick Cheney were moving in to the White House, there was a furor in Europe over the news of an alarming increase in leukemia and other cancers amongst the NATO troops who’d served in the Balkans.

7. The World Health Organization suppressed a November 2001 report on the health hazards of depleted uranium by Dr. Keith Baverstock, Head of the WHO’s Radiation Protection Division and his team, commissioned by the United Nations. Baverstock’s report, “Radiological Toxicity of Depleted Uranium”, detailed the significant danger of airborne vaporized depleted uranium particles, already considerably more prevalent in Iraq than the Balkans due to the difference in military tactics, because they are taken into the body by inhaling and ingesting, and then their size and solubility determines how quickly they move through the respiratory, circulatory and gastrointestinal systems, attacking and poisoning from within as they travel, and where the damages occur. In addition, the report warns that the particles tend to settle in the soft tissue of the testes, and may cause mutations in sperm. In 2004 Dr. Baverstock, no longer at the WHO, released the report through Rob Edwards at Scotland’s Sunday Herald.

8. The George W. Bush/Dick Cheney administration twisted the meaning of the failure of the World Health Organization to produce evidence of depleted uranium’s health hazards, turning it into evidence that there was no link between exposure to depleted uranium and the increases in cancer in Europe and Iraq; instead, as presented in the January 20, 2003 report by the new Office of Global Communications, ironically titled Apparatus of Lies: Saddam’s Disinformation and Propaganda 1990 – 2003, the depleted uranium uproar was only an exploitation of fear and suffering. Two months later, Bush-Cheney-Rumsfeld-Wolfowitz-Rice began to “Shock and Awe” Baghdad by again dropping tons of depleted uranium bombs on densely populated areas.

9. On March 27, 2003, significant increases in depleted uranium particles in the atmosphere were detected by the air sampler filter systems of the Atomic Weapons Establishment at 8 different sites near Aldermaston Berkshire, Great Britain, and continued at 4-5 times the previous norm until the end of April 2003, after the Coalition forces declared the war over. This information only came to light in a report on January 6, 2006 by Dr. Chris Busby, due to his diligent fight for access to the data through Britain’s Freedom of Information law.

10. We have a new, intelligent President, who is willing to listen.  It is up to us to bring this to his attention.  THIS IS HOW WE CAN HONOR VETERANS.

VALUABLE REFERENCES:

Department of Defense description of self-sharpening depleted uranium: click here

Dr. Keith Baverstock’s November 2001 report, suppressed by the World Health Organization:
Rob Edwards article on Baverstock:

Karen Parker, a Human Rights and Humanitarian Law Lawyer:  Scroll down on the page and you’ll find her documents on DU.

January 2003 White House Report – Apparatus of Lies:

January 2006 Chris Busby report: click here

Source

Depleated Uranium Information

Or Google it there is tons of information out there.

Be sure to encourage those who are still not supporting the ban,  that it  is something that needs to be banned.

This is an extremely dangerous form of Pollution.

We, the people, need to let governments and the United Nations know that these weapons can have no part in a humane and caring world. Every signature counts!

  1. An immediate end to the use of uranium weapons.
  2. Disclosure of all locations where uranium weapons have been used and immediate removal of the remnants and contaminated materials from the sites under strict control.
  3. Health surveys of the ‘depleted’ uranium victims and environmental investigations at the affected sites.
  4. Medical treatment and compensation for the ‘depleted’ uranium victims.
  5. An end to the development, production, stockpiling, testing, trade of uranium weapons.
  6. A Convention for a Total Ban on Uranium Weapons.

The life you save may be your own.

Sign Petition to Ban DU

Published in: on December 4, 2008 at 1:10 pm  Comments Off on 141 states support Depleted Uranium Ban  
Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Foreign currency loan crux for fomer communist bloc

November 5 2008

Eastern European markets are feeling the pinch as investors pull money out of the region and local currencies plunge. Plunging domestic currencies mean higher monthly payments for businesses and households repaying foreign-denominated loans, forcing them to scale back spending.

In Budapest, project manager Imre Apostagi says the hospital upgrade he’s overseeing has stalled because his employer can’t get a foreign-currency loan.

The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, the euro and Swiss francs. Now banks are curtailing the loans as investors pull money out of eastern Europe‘s developing markets and local currencies plunge.

“There’s no money out there,” said Mr Apostagi, a project manager who asked that the medical-equipment seller he works for not be identified to avoid alarming international backers.

“We won’t collapse, but everything’s slowing to a crawl. The whole world is scared and everyone’s going a bit mad.”

Loans

Foreign-denominated loans helped fuel eastern European economies including Poland, Romania and Ukraine, funding home purchases and entrepreneurship after the region emerged from communism.

The elimination of such lending is magnifying the global credit crunch and threatening to stall the expansion of some of Europe’s fastest-growing economies.

“What has been a factor of strength in recent years has now become a social weakness,” said Tom Fallon, head of emerging markets in Paris at La Francaise des Placements, which manages $11bn.

Since the end of August, the Hungarian forint has fallen 16pc against the Swiss franc, the currency of choice for Hungarian homebuyers, and more than 8pc against the euro.

Foreign currency loans make up 62pc of all household debt in the country, up from 33pc three years ago.

Romania’s leu dropped more than 14pc against the dollar and 3.2pc against the euro.

Poland’s zloty declined more than 17pc against the dollar and 6.8pc against the euro, and Ukraine’s hryvnia plunged 22pc to the dollar and 11.5pc to the euro.

That’s even after a boost this week from an International Monetary Fund (IMF) emergency loan programme for emerging markets and the US Federal Reserve‘s decision to pump as much as $120bn into other developing countries.

The Fed said yesterday that it aims to “mitigate the spread of difficulties in obtaining US dollar funding”.

In Kiev, Ukraine, Yuriy Voloshyn, who works at a real-estate company, says he’s decided to abandon plans to buy a new television because of his dollar-based mortgage. His monthly payments have risen by 18pc, or 1,000 hryvnias (€130), since he took out the loan seven months ago.

“I only have money to pay for food and my monthly fee to the bank,” Mr Voloshyn(25) said. “I can’t even dream about anything else.”

Rafal Mrowka, a driver from Ostrow Wielkopolski in western Poland, says he became addicted to checking foreign currency rates as monthly installments on his Swiss-franc mortgage jumped 25pc.

Nervous

“I’ve even stopped getting nervous, now I can only laugh,” the 32-year-old, first-time property owner said.

The bulk of eastern Europe’s credit boom was denominated in foreign currencies because they provided for cheaper financing. For example, Hungarian consumers borrowed five times as much in foreign currencies as in forint in the three months to June.

Now banks including Munich-based Bayerische Landesbank and Austria‘s Raiffeisen International Bank Holding AG are curbing foreign-currency loans in Hungary.

In Poland, where 80pc of mortgages are denominated in Swiss francs, Bank Millennium SA, Getin Bank SA and PKO Bank Polski SA have either boosted fees or stopped lending in the currency.

The extra burden on borrowers is making a bad economic outlook worse, said Matthias Siller, who focuses on emerging markets at Baring Asset Management in London, where he manages about $4bn.

If borrowers believe local interest rates are prohibitive and foreign currency lending dries up, it means “a sharp deceleration in consumer spending,” Mr Siller said. “That will bring serious problems for the economy.”

The east has been the fastest-growing part of Europe, with Romania’s economy expanding 9.3pc in the year through June, Ukraine 6.5pc and Poland 5.8pc. The combined economy of the countries sharing the euro grew 1.4pc in the period.

Ukraine, facing financial meltdown as the hryvnia drops and prices for exports such as steel tumble, has agreed to a $16.5bn loan from the IMF while Hungary secured $26bn in loans from the IMF, the EU and the World Bank. The government forecast a 1pc economic contraction next year, the first since 1993.

The Hungarian central bank raised its benchmark interest rate by three percentage points to 11.5pc last month to defend the forint.

“Panicked customers are calling to say they’re afraid the interest on their mortgages will go up or that they won’t be able to secure mortgages,” said Nikolett Gurubi, director of lending at Otthon Centrum Belvaros, the downtown Budapest branch of a real estate agency.

“We’ve been observing a return to a good old banking rule, to lend in a currency in which people earn,” said Jan Krzysztof Bielecki, chief executive officer of Poland’s biggest lender, Bank Pekao SA.

It stopped non-zloty lending in 2003.

“Earlier, banks competed on the Swiss franc market watching only sales levels and not looking at keeping an acceptable risk level.”

The problem is a “good lesson to all of us”, Polish President Lech Kaczynski said last month at a press conference in Warsaw, where he urged Poles to stick to zloty lending.

Source

Not all are pleased with IMF loan

By Robert Hodgson

November 4 2008

The leader of the main opposition party Fidesz last week slammed the government for turning to the IMF to bolster the shaky economy. Viktor Orban said the move compromises Hungary’s sovereignty and reduce its room for financial manoeuvre. “It is shameful and painful that Hungary has to give up a part of its sovereign decisions because it has plunged into a crisis,” he said.

Orbán was not the only dissenting voice. “May God save Hungary from drawing the EUR 20 billion loan that is to be jointly provided by the IMF, the EU and the World Bank,” said property tycoon Sándor Demján, one of Hungary’s richest citizens and head of a national employers and entrepreneurs lobby group. “What Hungary really needs is to start structural reforms of its bloated public administration, pension, education and taxation systems and put an end to overspending. We must start saving; we cannot build a welfare state on loans,” he told the left-wing daily Népszabadság last Wednesday. He added that, under the circumstances, the issue of tax cuts can be set aside for six months.

Also less than ecstatic about the IMF bailout proposal was István Éger, head of the Hungarian Chamber of Physicians. Fearing that underpaid public health workers will be at the sharp end of the cutbacks that the IMF is demanding as a condition for the loan, he turned to President László Sólyom and Hungarian Academy of Sciences chairman József Pálinkás, asking for an independent study into whether such drastic cutbacks are necessary. The planned cancellation of the “thirteenth-month” bonus salary payment and other compulsory honorariums would create labour shortages that endanger patient care, Éger said last Wednesday.

Only last September, Éger had called for the government to raise doctors’ salaries to at least 70% of the EU average by 2013. Doctors’ wages vary from hospital to hospital, for example at Budapest Szent János Hospital, the average basic gross wage was HUF 331,000 (EUR 1,284) a month in March this year, while at the Szent Imre Hospital it is a mere HUF 237,000 (EUR 919). “The liberal economics mindset that created this crisis has suffered a global defeat, while at the same time the leaders of this country are preparing to accept terms dictated by the same mindset,” Éger added.

Last Friday, Finance Minister János Veres said the government will put a bill before Parliament within two weeks which, if passed, would allow the authorities to draw down on the IMF loan and channel money into the banking sector if required.

Source

The financial crisis and the opposition

By Vision Consulting

November 6 2008

Opposition needs to appear to be constructive rather than contrary as tough decisions loom

The most important issues in Hungarian politics at the moment are still management of the crisis, the HUF 375 billion (EUR 1.44 billion) spending cut announced by the government and the USD 25 billion (EUR 19.51 billion) loan granted by the International Monetary Fund, the World Bank and the European Union. The position of Prime Minister Ferenc Gyurcsány as “crisis manager” is likely to strengthen in the short-term. The opposition is still trying to find its feet in this new scenario.

MDF: stand on our own

At the national summit the Hungarian Democratic Forum (MDF) proposed a spending cut of approximately HUF 1 trillion (EUR 3.85 billion), considerably more than the government. The Forum’s criticism of the IMF agreement is related to this. According to its party leaders, the crisis should be managed from the state’s “own resources” through a spending cut, and the loan amount should on no account be spent on day-to-day matters . The latter is rational, but the government itself is not planning to spend the USD 25 billion, so the MDF’s tough approach does not really pose a challenge to the Hungarian Socialist Party (MSZP) minority government.

In reality it is a question of the considerably weakened MDF trying to become the favoured party among influential economic figures by taking a stance in favour of a larger spending cut. Despite its rhetorical attacks the Forum is in fact closer to the MSZP than the other parliamentary parties in terms of the budget.

SZDSZ: in line, & in the shadows

The Alliance of Free Democrats (SZDSZ) since leaving the coalition has not managed to adopt a new position as a decisive opposition party, nor as a political force capable of bringing down the prime minister and setting up a government of experts.

It has given in to pressure and is negotiating with the MSZP on significant policies, and has lost political weight. The “crisis-managing” prime minister has adopted the liberals’ proposal of a law putting a ceiling on spending and is reducing the deficit. The SZDSZ is incapable of triumphing in these questions, and has faded into the background beside Gyurcsány’s words and actions.

The liberals’ ultimate condition for rejoining the coalition is a tax-reform timetable, and that has not been fulfilled. The prime minister has made vague promises on this issue, but in the current situation his hands are tied.

The tax reform fund proposed by the SZDSZ is the guarantee for starting to reduce taxes, but not now: the money potentially saved in 2009 would be collected in this fund, which in the second half of 2009 at the earliest could be used as a basis for reducing taxes, and it is not yet known how much money can be collected. Overall we can say that the SZDSZ’s tough-sounding rhetoric is designed to obscure the fact that they have moved closer to the government.

Fidesz: Hungary shamed

Fidesz’s situation is also difficult: the consistency of the party’s communications has lessened, despite the fact that for a long time this has been one of its main strengths. Aside from the fundamental contradiction that Fidesz wishes to introduce immediate radical tax reductions without cutting spending, the party also took a unique stance in connection with the role of the IMF.

The party first stressed that negotiations should have been launched with the EU, and not the IMF. Next deputy chairman Mihály Varga expressed disappointment at the EU’s unresponsiveness: “It makes me question whether it’s worth being a member of the European Union.” With this statement he indirectly justified the government’s decision to turn to the IMF: if the EU is not willing to help, then the government has to look elsewhere. The government finally signed a joint loan guarantee agreement with the World Bank, the International Monetary Fund and the European Union.

Next Fidesz used its last remaining argument that Hungary has been shamed as the only EU country to have need to seek such assistance. Raising the question of responsibility is undoubtedly important. However at the time of crisis management, seeking a solution can compete with the issue of responsibility, and in the former respect the prime minister had the advantage.

A different game now

Just as swift crisis management has offered the prime minister a chance to strengthen his position, the prolonged real economy crisis could offer Fidesz a similar political opportunity. The next year of the Gyurcsány government could be spent in an ever-deepening crisis. That will make the MSZP’s already problematic situation extremely difficult. At this stage, however, we know little about whether the crisis will change voters’ expectations of political figures in the long-term, and whether, for example, Fidesz will be forced to adopt a less-confrontational style of politics. If that is the case then the outcome of the next elections will also depend on Fidesz’s ability to adapt.

Source

Hungary’s Letter of Intent to the IMF

BUDAPEST,

November 6 2008

Following are excerpts from the a Letter of Intent which Hungary’s central bank and government sent to the International Monetary Fund and published on the central bank’s website http://www.mnb.hu on Thursday.

‘Financial market stress in Hungary has intensified in past weeks as a result of events in global financial markets. In response, the government and the central bank of Hungary (Magyar Nemzeti Bank, MNB) have developed a comprehensive strategy to firmly anchor macroeconomic policies and reduce financial market stress. We request that the Fund support our program through a Stand-By Arrangement (SBA) for a period of 17 months in the amount of SDR10.5 billion (EUR 12.5 billion). This arrangement, in conjunction with support of EUR 6.5 billion under the EU’s balance of payment financing facility and other multilateral and bilateral commitments, will signal the international community’s support for our policies.

We have discussed with IMF staff our economic program, which is outlined below. Our main objectives are to (i) reduce the government’s financing needs and improve longterm fiscal sustainability, (ii) maintain adequate capitalization of the domestic banks and liquidity in domestic financial markets, and (iii) underpin confidence and secure adequate external financing. The government is in the process of considering additional steps to improve the competitive position of the economy, which are fully consistent with the program.

‘The first review of the program will take place by February 15, 2009 and the second review by May 15, 2009. We believe that the policies set forth in this letter are adequate to achieve the objectives of our economic program, but the Government stands ready to take additional measures as appropriate to ensure the achievement of its objectives.’

FINANCING NEED

‘Gross external financing needs will decline over the course of 2009, due to the smaller fiscal and current account deficits, and will be partly covered by EU structural funds (a stable source of inflows) and already committed foreign direct investment inflows. We cautiously assume net outflows from the non-financial private sector and a reduction in the government’s net issuance of external debt. Foreign banks, however, are expected to largely maintain their exposure in Hungary (see below). At the same time, we aim to gradually increase the MNB’s foreign reserves as a precaution against unexpected outflows. The resulting external financing need of some EUR 20 billion can be covered by drawing on resources from the IMF, support under the EU’s balance of payment facility and other official creditors. Any additional support from other international financial institutions will be used to further augment our foreign reserves.

FISCAL DISCIPLINE

‘The government is committed to maintaining fiscal discipline in the long-term, recognizing that this is a key element in retaining investor confidence. We therefore intend to continue budget consolidation in the 2010 budget – to be discussed with IMF staff as part of the program – and beyond; new medium-term fiscal targets will be contained in the forthcoming convergence program and our medium-term fiscal framework. To put fiscal sustainability on a permanent footing, we have already submitted to parliament a draft fiscal responsibility law, which establishes fiscal rules on public debt and primary deficit, strengthens the medium-term expenditure framework (rolling three-year expenditure ceilings) and creates a fiscal council to provide independent and expert scrutiny. We plan to enact this law by end-December 2008 (a structural benchmark).’

FINANCIAL SECTOR POLICIES

‘The Hungarian banking system complies with regulatory capital requirements and has been profitable. Liquidity risk has recently increased due to the drop in global risk appetite which has increased banks’ funding costs and shortened maturities. However, most of the external funding comes from parent banks in the euro area, which now have access to liquidity through ECB facilities and which have pledged their continuous support of their subsidiaries in Hungary, as reaffirmed in the joint statement of MNB and leading banks in Hungary of October 17, 2008. The MNB and the HFSA will monitor this commitment closely, and provide summary information on a daily basis to IMF staff. Domestic funding has not shown any signs of stress and any stress would be contained by the liquidity facilities mentioned below. In addition, the government has not only increased the level of deposit insurance coverage of retail deposits from HUF 6 million to HUF 13 million (in line with EU agreements) but also pledged to provide a blanket guarantee on all deposits. The government stands ready to take further measures to ensure the stability of bank funding, if needed.

We have developed, in consultation with IMF staff, a comprehensive package of support measures available to all qualified domestic banks, to buttress their credibility and confirm our commitment to preserving their key role in the Hungarian economy. The domestic banks have entered this period of market stress with strong solvency positions, which they have been able to preserve so far in spite of the severity of the turmoil. We are nevertheless in the process of providing a support package in line with best practices, ensuring a level playing field within the EU. The banking sector package contains provisions for added capital and funds a guarantee fund for interbank lending. Funding will be divided as follows: Total funding of HUF 600 billion will be divided evenly between the Capital Base Enhancement Fund and a and the Refinancing Guarantee Fund. The Package is available to private Hungarian banks of systemic importance. The Capital Base Enhancement Fund has been sized to bring the eligible banks’ capital adequacy ratio (CAR) up to 14 percent. The Guarantee Fund is meant to bring comfort to the providers of wholesale funding and secure the refinancing of the eligible banks. Its endowment of HUF 300 billion will be invested in euro denominated government bonds of Euro area countries and managed by the MNB. Open for new transactions until end-2009, it will guarantee the rollover of loans and wholesale debt securities with an initial maturity of more than 3 months and up to 5 years, against a fee and with appropriate safeguards. This package should also ensure that the domestic banks remain capable of playing a responsible role vis-à-vis their foreign subsidiaries. We will submit a bill to this effect to parliament by November 10 and request an extraordinary procedure to pass the bill as soon as possible (structural performance criterion). We will monitor carefully the impact of a possible deterioration of borrowers’ capacity to repay their loans as the economy slows. Recent pressures on banks’ funding are being addressed by their management in close coordination with the HFSA and MNB. We welcome the involvement of EBRD in further strengthening the Hungarian banking system.’

(Reporting by Krisztina Than; editing by David Stamp)

Source

October 27 2008

By Krisztina Than

BUDAPEST

An IMF rescue deal steadied Hungary’s battered currency on Monday, but a downgrade in Romania’s debt rating to “junk” status showed the ripples of the global crisis were still spreading across emerging markets.

After reaching a $16.5 billion loan agreement with Kiev to shore up Ukraine’s teetering economy, the International Monetary Fund said on Sunday it would finalize a deal with Budapest in the next few days to bolster Hungary’s near-term stability.

Facing the worst global financial crisis since the 1930s, emerging Europe has watched foreign investors once bullish on the region’s prospects of strong economic growth and deeper integration into the European Union dump their assets.

In particular, there is concern that countries like Ukraine and EU members Hungary, Romania, Bulgaria and the Baltic states may not be able to handle their large foreign debt burdens, which could spark financial crises.

News of Hungary’s IMF deal sent the forint 2 percent higher. The currency’s almost 20 percent dive in the last month had spooked investors across the ex-communist bloc, previously seen as safer than most other emerging economies.

“The purpose … is to create a safety net for Hungary,” Prime Minister Ferenc Gyurcsany said.

Turkey’s central bank governor said he would welcome some form of arrangement with the IMF, adding to growing calls for the government to strike a deal.

Budapest turned to the IMF to shore up its markets after investors sold off Hungarian assets on worries over its banking system and the financing of its large external debt.

ROMANIAN CUT TO JUNK

Ratings agency Standard & Poor’s cited just such a reason when it cut Romania’s sovereign rating to junk status on Monday and said its outlook was negative, sending the leu currency 3 percent lower to a 10-day low against the euro.

It also cut to stable from positive its outlook for Poland — where a deputy finance minister warned of capital flight on Monday from Polish units to their euro zone-based owners — due to falling international markets and tightening credit.

S&P said it had cut Romania because of mounting risks to its real economy due to rising private sector debt and a dependency on its need to borrow on increasingly uncertain foreign markets.

It said policymakers had ignored warnings and were instead focused on general elections scheduled for November 30.

The IMF did not disclose the size of its package for Hungary, but analysts said it should be over $10 billion, based on the IMF’s agreement in principle with Ukraine to a $16.5 billion standby loan, also announced on Sunday.

“The policies Hungary envisages justify an exceptional level of access to Fund resources,” IMF Managing Director Dominique Strauss-Kahn said in a statement.

Analysts said the Hungarian package could give support to the forint in the short term and would likely set conditions for the government to tighten state spending further.

“The package will be fairly large, an amount exceeding $10 billion,” said Eszter Gargyan at Citigroup. “Hopefully it will have conditions which would require structural changes to ensure a sustainable fiscal position.”

DAIMLER BOOST

Providing a shot in the arm for Hungary’s ailing economy, Germany’s Daimler signed a deal with the government to invest 800 million euros ($995.4 million) in a new plant that will produce over 100,000 compact cars a year from 2012.

Despite improved sentiment, Hungary’s debt agency scrapped a two-month T-bill auction on Monday as demand has remained low, and the stock market was down 6.9 percent.

Hungary’s government and central bank have scrambled to reassure investors that the foreign-dominated banking system is stable and have tried to jump start the all-but-frozen markets for foreign currency swaps and government bonds.

The main problem is a strong demand for FX funding, particularly in euro and Swiss francs, in the banking sector after a boom in lending to households and companies.

(Additional reporting by Sandor Peto, Gergely Szakacs, Balasz Koranyi, and Michael Winfrey in Prague)

(Writing by Krisztina Than and Michael Winfrey; Editing by Jon Boyle)

Source

Hungary to give banks $3 billion capital boost

BUDAPEST, Hungary (AP) — Hungarian financial authorities say they are ready to provide local banks up to 600 billion forints ($3 billion, 2.3 billion euros) to boost banks capital and help them refinance debts.

The government plans to present the package to parliament on Monday and ask for speedy approval. Half would be guarantees to help the banks refinance.

Hungary would get a stake in the banks participating in the state aid.

The aid package for banks comes as part of the $25.1 billion standby loan for Hungary announced last month by the International Monetary Fund, the European Union and the World Bank.

Source

Published in: on November 6, 2008 at 12:06 pm  Comments Off on Hungary’s Letter of Intent to the IMF  
Tags: , , , , , , , , , , , , , , ,

Big deficits may force Turkey towards IMF

By Selcuk Gokoluk

ANKARA

Turkey will face a balance of
payments problem next year that could snuff out growth if the
government does not overcome its reticence to join the queue of
emerging countries seeking International Monetary Fund help.

Politicians are loath to ask for IMF help before municipal
elections next year given the public backlash against the six
years of fiscal austerity demanded by the IMF in return for
helping Turkey through a financial and economic crisis in 2001.

However, economists say its $70 billion foreign exchange
reserve is not a large enough buffer given the current account
deficit is seen rising to $50.4 billion in 2009 and the funding
need of the private sector is estimated at around $90 billion.

Turkey’s business community has therefore been calling for
an IMF loan deal to limit the fallout from a global financial
crisis which has already forced Ukraine, Hungary, Iceland and Serbia to seek IMF help.

Such aid comes with strings attached and while the
government is reluctant to accept big spending curbs and other
painful steps that might exacerbate the economic slowdown,
economists say IMF credit may be the only source of credit if
Turkey finds itself in a balance of payments difficulties.

“Turkey is not an EU member with access to the European
Central Bank credit lines that have been made available, nor
does it have a swap line with the (United States’) Fed as do a
few other emerging markets now to boost dollar liquidity,”
Kristin Lindow, Moody’s Investors lead sovereign analyst for
Turkey, told Reuters.

Turkey is carrying out accession negotiations with the
European Union, but is not expected to join the 27-members bloc
for several years at the earliest.

FINANCING NEEDS
Turkey’ economy is in much better shape than it was in 2001,
when it had a severe crisis and signed one of the biggest ever
IMF bailouts but some economists say the Treasury may not be
able to maintain its current cash holding.

Government spending is expected to pick up in coming months
and appetite for Turkish bonds has faded as investors favour
safe-heaven U.S. dollar assets.

Analysts say Ankara needs $15-$20 billion IMF credit to meet
its short-term financing needs, even if such help is made
contingent on measures such as cutting spending, raising taxes,
accelerating privatisation, and increasing interest rates to
correct fiscal and external imbalances and control inflation.

“For the first time in a couple of years, the balance of
payment will be a binding concern for Turkey in the sense that
Turkish corporates might have to cut back their borrowing from
international markets,” said Reinhard Cluse, economist at UBS.

It is estimated the non-bank corporate sector will roll over
roughly $20 billion in debt in the coming months.

Curbs on firms’ ability to borrow will dampen economic
activity, which has already weakened.

The economy expanded by 1.9 percent in the second quarter, a
a sharp slowdown from 6.7 percent in the first quarter, and some
economists expect it will grow by only 2-3 percent next year.

Turkish banks have strong loan/deposit and capital adequacy
ratios compared with their western peers and are tightly
regulated, but this is not the case for manufacturing firms.

“I don’t think banks will have a problem rolling over their
debt. The unknown factors are more in the non-financial sectors.
The non-financial sector firms borrowed $18 billion in the first
eight months. This is a very high figure,” said JP Morgan Chase
senior economist Yarkin Cebeci said.

“An IMF deal will cut the size of the shock waves even if it
can’t stop the financial volatility. More importantly is that an
IMF deal will comfort both the financial and non-bank corporate
sectors,” Cebeci added.

An IMF deal would also help shore up financial market
sentiment, economists said. Global financial turmoil has hit
Turkish markets in the last two months, with the lira losing one
third of its value and stocks halving in value.

“An IMF deal will ensure a gradual and softer fall. If the
market attempts to make a correction on their own, the fall will
be sharper and faster…I mean further slowdown of growth and
more lira weakening,” Merrill Lynch EMEA economist Turker
Hamzaoglu said.

(Editing by Swaha Pattanaik)

Source

Iceland had to raise their interest rates up to 18 per cent to get their loan from the
IMF

Published in: on November 6, 2008 at 11:27 am  Comments Off on Big deficits may force Turkey towards IMF  
Tags: , , , , , , , , , , , , , ,

Prime Minister’s plea on oil prices as he tours the Middle East to secure IMF funding

By Nigel Morris

November 1 2008

Gordon Brown flies out to the Gulf today on a mission to persuade the region’s oil-rich states to help combat the global economic meltdown.

He is expected to meet the leaders of Qatar, Saudi Arabia and the United Arab Emirates and ask them to pump billions of pounds into the International Monetary Fund (IMF), which is struggling to cope with pleas for help from countries facing collapse in their financial system.

The Prime Minister will also urge them not to cut production in an effort to reverse the slide in oil prices over the past month. The size of the challenge facing the British economy was underlined on the eve of the tour, as Mr Brown was warned that levels of debt and borrowing will climb higher than during the last recession in the early 1990s.

A report by the independent Institute for Fiscal Studies concluded that the Government was going into the recession with a “significantly higher” level of debt than in 1990. Even excluding the cost of nationalising Northern Rock, public sector net debt is due to reach 39.7 per cent of gross domestic product this year and is “very likely” to rise above 46.2 per cent within the next couple of years.

The Prime Minister has sought to emphasise the “global” nature of the economic downturn. Ahead of his latest trip abroad he signalled fears that the $250bn (£155bn) fund available to the IMF to help fragile economies might not be enough to cope with the extent of global downturn. Hungary, Iceland and Ukraine have already agreed emergency loans, while other countries queuing up for help include Belarus, Turkey and – critically for regional security – Pakistan.

Mr Brown believes the IMF’s coffers should be topped up by the rapidly-growing economies of the Gulf region, whose revenues have soared as fuel prices leapt this year. He is also targeting China, which is sitting on large reserves of capital.

The extra cash required by the IMF to counter the international turbulence could amount to hundreds of billions of dollars. But Mr Brown will probably run into opposition in the region, whose leaders have already expressed dismay that they are being asked to tackle a problem that has its roots in the turmoil in the American sub-prime mortgage market.

The Prime Minister will also express his opposition to the decision of the Organisation of the Petroleum Exporting Countries to cut output from today by 1.5 million barrels a day.

The Gulf nations, which produce more than half of the world’s oil, have seen the price of a barrel fall from a high of $147 (£91) in July to below $65 yesterday. The Prime Minister’s spokesman said yesterday: “We recognise over that over the long-term global demand for oil is increasing, so over the long-term price is likely to increase. But what we want to avoid is the sharp increases we have seen in recent months.” Mr Brown is also planning to renew his call on the Gulf states to invest in renewable energy technology.

He is being accompanied by Peter Mandelson, the Business Secretary, and Ed Miliband, the Energy and Climate Change Secretary, and more than 20 business leaders.

During a visit to Edinburgh yesterday, Mr Brown said low interest rates and falling inflation, along with lower national debt than other countries, would help Britain survive the turbulence. “It is the first global crisis that we are having to deal with in this new industrial age where so much is global. I am confident that the opportunities for our economy are great in the years to come.”

The shadow Chancellor, George Osborne, yesterday accused the Prime Minister of trying to “spend his way out of recession” at the risk of exacerbating the downturn and saddling future generations with huge tax increases to combat rising national debt.

In a speech drawing dividing lines between Conservative and Labour approaches to the economic crisis, he denounced Mr Brown as irresponsible for suggesting that the Government can “borrow without limit” to stave off recession.

He said the policy of borrowing more to pay for a state “spending splurge” was “a cruise missile aimed at the heart of the economy”, which could require tax rises equivalent to 4p on income tax. But he was attacked by Labour and Liberal Democrat opponents for being “confused” and “out of his depth” in his analysis.

The credit crisis: Latest developments

*PM to urge Gulf states not to cut oil production as Opec reduces output by 1.5 million barrels a day

*Osborne accuses Brown of trying to ‘spend his way out of a recession’

*Barclays to take £7.3bn from investors in Abu Dhabi and Qatar in bid to maintain bonus packages

*Investors in the Middle East could end up owning as much as one-third of banking giant’s shares

Source

Published in: on November 1, 2008 at 4:03 pm  Comments Off on Prime Minister’s plea on oil prices as he tours the Middle East to secure IMF funding  
Tags: , , , , , , , , , , , , , , , , , , , , , , , ,