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Title: EU states monitor spread of civil unrest
Source:
emportal/EUobserver.com
URL Source: http://www.emportal.co.yu/en/news/region/76792.html
Published: Jan 27, 2009
Author: EUobserver
Post Date: 2009-01-27 15:02:39 by X-15
Keywords: None
Views: 252
Comments: 19
EU member states are "intensively" monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece. EU member states are "intensively" monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece. The worst street disturbances for 50 years struck Reykjavik on Thursday (22 January), as police streamed a hardcore of a few hundred anti-government protesters in the early morning with pepper spray and then tear gas after an earlier crowd of around 2,000 gathered outside the Althingi, the country's parliament, to demand the government resign. The crowds surrounded the building while banging pots and pans and shooting off fireworks. The demonstrators also lobbed paving stones, rolls of toilet paper and shoes. It was the second day of protests after on Wednesday protesters jostled Minister Geir Haarde's limousine, pummelling it with cans of soft drinks and eggs. The regular demonstrations have strained the government coalition, with the ruling Independence Party on Thursday saying it "realises that there will be elections this year." Iceland is not an EU member, but the protests could result in it being the first European country to see its government brought down by the economic crisis. "It's a democracy that has its problems like many other states as a result of the economic crisis," European Commission external relations spokeswoman Christiane Hohmann said. The events in Iceland come hot on the heels of anti-government clashes in Latvia, Lithuania and Bulgaria in recent days, where economic discontent mixed with local issues erupted in violence. Trade unions in Greece meanwhile warn that further strikes are still likely, after protracted street fighting by students and young workers in December that caused billions in damage. Concern about the spreading unrest is high on the EU agenda, as governments find it increasingly more expensive to borrow money, putting pressure on social programmes. "There are concerns. The EU shares them. It is one of the major challenges for the Spring European Council," said a senior EU official, referring to the quarterly gathering of EU leaders. EU ambassadors in Brussels are discussing the issue and receiving "regular updates", according to another official, although he added that more intelligence on the situation is needed to see whether the riots are "part of a social trend" or manipulation by opposition elements. Lithuania's interior minister visited Latvia to discuss public security problems related to the economic crisis even before the Vilnius and Riga riots last week. Lithuania is currently collecting "all available information about similar events in other member states" and sharing it with "concerned" countries Estonia, France, Germany and Latvia, a Lithuanian diplomat told the EUobserver. "Intensive share of information" is also taking place between the Baltic states and Poland, he added. Following the ructions in Vilnius, 11 further peaceful demonstrations were organised around the country by trade-unions. "Due to the declining economic [situation] and problems raised by it, a possibility of similar meetings still remains, but we hope that riots will not be repeated," he said. More to come In a Wednesday interview with the BBC, the head of the International Monetary Fund, Dominique Strauss-Kahn, predicted that the economic downturn will cause more unrest. "[It could happen] almost everywhere, in Europe certainly, and also in emerging countries," he said. "You've had some strikes that look like normal, usual strikes, but it may worsen in the coming months." Asked which countries were most at risk, Mr Strauss-Kahn mentioned Hungary, Ukraine, Latvia and Belarus. "It can be my own country [France], the UK, it can be eastern Europe," he said. "The situation is really, really serious," he added. Posters's comment: pots and pans, paving stones, toilet paper, shoes...these can be weathered by any government and serve as a harmless relief-valve to pacify the un-armed peasants of Ye Olde Europe. We, OTOH, are armed. So, why are we waiting while Obummer and Congress give this nation the final gang-bang that will finish us off as a First World nation??
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#2. To: X-15 (#0)
Holy crap. I hope people take the time to read and digest this. It's heading here.
#9. To: Jethro Tull, -15 (#2)
Holy crap. I hope people take the time to read and digest this. It's heading here. online.wsj.com/article/SB123241187496396133.html Wall Street Journal Article * JANUARY 19, 2009, 10:27 P.M. ET Baltic Downturn Deepens as Political Unrest Grows Austerity Programs Are Already Fomenting Protests in the Street By JOEL SHERWOOD The once high-flying Baltic nations won't see any relief to their budgetary problems as they head into deeper recessions than previously forecast, the European Commission said Monday. The more-pessimistic outlook follows street protests last week across the region over government measures designed to shore up strained public finances. The commission, the European Union's executive arm, cut gross domestic product predictions for the economies of Latvia, Estonia and Lithuania on Monday, saying the global financial crisis would exacerbate a downturn as property markets slacken and credit freezes. Latvia had the EU's highest GDP growth rate each year from 2004 to 2006, when expansion peaked at 12.2%. Growth rates weren't far behind in Estonia and Lithuania. But Latvia and Estonia fell into recession last year, while growth slowed markedly in Lithuania, following the global credit crunch and as imbalances in the economy, such as high inflation rates and current account deficits, hindered economic development. The commission said Latvia's GDP would shrink 6.9% this year -- the biggest economic contraction in 2009 in the 27-member EU -- after a 2.3% drop last year. This is a steep downward revision from the survey released in November, when the commission predicted a 2.7% GDP decline for Latvia. The commission also slashed its forecasts for Estonia and Lithuania, foreseeing contractions of 4.7% and 4.0%, respectively for the two countries. Total government debt in the region, which shrank in the middle of the decade as economies boomed and tax money flowed in, will expand in the next two years, with Latvia's rising to 42.9% of GDP in 2010 from 16% last year. Government measures to try to soften the damage to their finances have sparked violent public protests. Lithuania's plans to slash public sector wages by some 12% to 15% and trim pension payments, announced earlier this month, followed an austerity program approved by Latvia's parliament in December. Violent demonstrations over such measures erupted last week in both Latvia's capital, Riga, and Lithuania's capital, Vilnius. The unrest poses one of the biggest threats to political stability in the region since the countries gained independence from the former Soviet Union in 1991. Latvia's President Valdis Zatlers has threatened to dissolve parliament within three months unless it adopts a law allowing voters to force snap polls, as discontent over the country's center-right government's economic stewardship simmers. "We cannot continue with confrontation. We have to accomplish concrete tasks to gain public trust," Mr. Zatlers said to reporters last week. Lithuania's Prime Minister Andrius Kubilius, who took office last month, has pleaded for restraint. "I ask for your patience and understanding -- all of us are responsible for our country, for its future," said Mr. Kubilius after riots Friday, the government press service reported. Write to Joel Sherwood at joel.sherwood@dowjones.com
Holy crap. I hope people take the time to read and digest this. It's heading here. online.wsj.com/article/SB123301430208417569.html Wall Street Journal Article * JANUARY 27, 2009, 1:50 P.M. ET A Refinancing Crunch Emerges By JOANNA SLATER In a world of scarce capital, companies in emerging markets may find themselves fighting for the crumbs. A host of companies in developing countries need to raise money this year, a task that is growing more difficult, if not impossible. J.P. Morgan Chase & Co. estimates that such companies need to refinance more than $200 billion in external debt in 2009, with the largest borrowing needs in Russia, Turkey, Mexico, South Korea and the United Arab Emirates. Since September, however, international capital markets have been effectively closed to such borrowers. That means they must rely on cash or local borrowing sources to meet various obligations. If they can't, they may try to renegotiate with their creditors or seek government aid, and failing that, face default. With credit markets in crisis mode, firms in developing economies, like Russian steelmaker Severstal, face particularly tough refinancing prospects. In its report, J.P. Morgan noted a recent increase in the number of Latin American companies that have defaulted on payments or are breaching the terms of their debt agreements, a so-called technical default. It also listed 17 companies in emerging markets that could join the club this year. Those at risk of technical default included OAO Severstal, a Russian steel company; Greentown China Holdings Ltd., a Chinese real-estate firm; and PT Arpeni Pratama Ocean Line, an Indonesian shipper. They didn't respond to requests for comment. In another sign of the deteriorating health of borrowers, Fitch Ratings downgraded the credit ratings of 88 emerging-market companies in the fourth quarter of 2008, the most in at least seven years. Such events are on the rise world-wide as the economic climate worsens. Companies with fewer borrowing needs and a cushion of cash are the most likely to emerge unscathed. If global borrowing conditions ease, emerging-market companies will face extensive competition for investor attention. In developed markets, governments are rolling out large stimulus packages, which they will need to finance via debt markets, thus risking crowding out would-be borrowers elsewhere. Emerging economies were some of the last to succumb to the global downdraft. Once the credit crunch deepened and commodity prices tanked, their prospects dimmed. Amid the rout in global markets, corporate debt in emerging markets plunged. The premium demanded by investors for such debt over U.S. Treasurys ballooned from a little more than two percentage points in late August to about nine currently, according to a J.P. Morgan index that tracks a broad group of corporate dollar-denominated bonds. Some individual countries are higher: A sub-index of Russian corporate debt carries a premium of 11 percentage points over Treasurys. In other words, borrowing costs are prohibitive. The task of refinancing debt also is complicated by currency fluctuations, because companies have a mismatch between revenues in local currency and borrowings in currencies such as the dollar. Pockets of serious vulnerability are evident in Russia, Ukraine and Kazakhstan, where companies borrowed heavily while the going was good. Companies in Russia face "a triple whammy," says Eric Jayaweera, head of emerging-market credit trading for UBS in London. There is a credit crunch globally, the domestic banking system is under huge strain, and oil prices have crashed, he notes, a massive problem for an energy exporter such as Russia. For all but the strongest companies, "the only way these guys can refinance themselves is through the government bailing them out," says Max Wolman, a portfolio manager at Aberdeen Asset Managers in London. He points to the fact that Moscow recently released a list of 295 companies deemed strategically important. "If you're not on that list, you are screwed," he says. Evraz Group, a large Russian steel company, is one of those on the government's list and illustrates the shift in fortune experienced by the country's businesses. Last spring it easily raised $2 billion in dollar-denominated bonds. Now those bonds are trading at a little above 50 cents on the dollar, indicating a high level of financial distress. It also has $300 million in debt maturing in August. J.P. Morgan said the company could be at risk of violating contractual obligations on its debt this year. Of course, the levels at which these bonds are trading overestimate the actual chance of default, Mr. Jayaweera notes. Like other assets, they have been caught up in a wave of forced selling and a retreat from riskier markets. Write to Joanna Slater at joanna.slater@wsj.com
Top • Page Up • Full Thread • Page Down • Bottom/LatestEU member states are "intensively" monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece.
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#13. To: Jethro Tull (#2)
EU member states are "intensively" monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece.
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