Stocks, Commodities Drop as Euro Weakens on Greek Crisis (Source: Bloomberg)
Stocks fell, commodities slid to the cheapest level this year and the euro weakened to a three-month low amid growing concern Greece will exit the European currency. The MSCI All-Country World Index (MXWD) slid 1.6 percent at 4 p.m. in New York and the Standard & Poor’s 500 Index sank 1.1 percent to 1,338.35, with both slipping to the lowest levels in more than three months. The euro slid to less than $1.29 for the first time since January. Yields on U.S. seven-year debt and 10- year U.K. and German bonds fell to records, while costs to insure against a Spanish default jumped to an all-time high. The S&P GSCI gauge of commodities dropped 1.1 percent.
European finance ministers grappled with the costs of keeping Greece in the euro area or letting it go, as a post- election political feud prevents the nation from forming a new government following the May 6 election. President Karolos Papoulias told Greek political leaders that banks face the threat of collapse if deposits continue to dwindle amid the instability. In the U.S., JPMorgan Chase & Co. (JPM) fell for a second day after reporting a $2 billion trading loss. “The markets are going to play hard ball and the European governments are going to play hard ball too,” John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. His firm oversees $207 billion. “The odds of Greece leaving the euro are higher. It’s an enormous game of chicken that they are playing with each other. To the degree it does represent the democratic process in Greece, it makes it more likely they default and the Europeans have to do something.”
GLOBAL MARKETS-Riskier assets hit as Euro zone worries grow
LONDON, May 14 (Reuters) - The euro hit four month lows and shares fell as the increasing likelihood of a new election in Greece worsened the sense of crisis in the euro zone and China's latest move to loosen monetary policy only added to investor risk aversion.
"Selling rallies in risk assets seems the best way to make money in most asset classes given the event risk is still very real this week." said Chris Weston, an institutional dealer at IG Markets.
Investors Missing Rally Dump Bearish Bets Most Since 2008 (Source: Bloomberg)
As individuals bail out of U.S. stocks at the fastest rate in three decades, professional speculators have cut bearish bets by the most since 2008. Money managers are net short 19,375 contracts on the Standard & Poor’s 500 Index, down 82 percent from a four-year high in September even after the figure jumped from 3,584 last week, data compiled by Bloomberg and the Commodity Futures Trading Commission show. U.S. equity mutual funds recorded $18 billion of outflows in April, the most since at least 1984, according to preliminary data from the Investment Company Institute. Hedge funds and other institutions are speculating the index will extend its 23 percent rally since October after 69 percent of S&P 500 companies beat first-quarter earnings estimates and economists projected accelerating U.S. growth this year. Bears say last week’s addition to bets on declines show short sellers have completed almost all of the buying they are likely to do, depleting demand for equities.
“For the professional side, stocks look pretty compelling,” David Goerz, chief investment officer at Highmark Capital Management Inc., said in a telephone interview from San Francisco on May 9. His firm oversees about $17 billion. “Underlying economic strength is much more resilient than anybody expected it to be this year.”
Asia Stocks Fall for Fifth Day on Greece, Italy Concerns (Source: Bloomberg)
Asian stocks fell as the political impasse in Greece added to speculation the nation will leave the euro union and Moody’s Investors Service cut the credit ratings of 26 Italian banks, damping demand for riskier assets. Nippon Sheet Glass Co. (5202), a glassmaker that counts Europe as its No. 1 market, slumped 4.2 percent in Tokyo after saying it may continue to suspend some production in Europe this year on slumping demand. BHP Billiton Ltd., Australia’s biggest oil producer and the world’s largest mining company, fell 2.4 percent after metal prices declined. Mainland Chinese developers may be active today in Hong Kong after a report that Shanghai tightened home-purchase restrictions. “Investors would think if Greece goes, maybe Portugal, Spain and Italy go,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “It would further erode confidence in Europe.
While it might be positive news, I think we may go through a period of fairly intense uncertainty if they end up leaving.” The MSCI Asia Pacific Index slid 0.8 percent to 117.10 as of 9:29 a.m. in Tokyo. More than four stocks declined for each that rose on the measure, which is headed for its fifth successive day of losses and lowest close since Jan. 16. The Asian gauge declined before markets in Hong Kong and China open.
Japan’s Topix Falls to Four-Month Low on European Risks (Source: Bloomberg)
May 15 (Bloomberg) -- Japanese stocks fell, with the Topix Index dropping to a four-month low, as the political impasse in Greece added to speculation the nation will leave the euro and the ratings of 26 Italian banks were cut by Moody’s Investors Service, damping demand for riskier assets. Nippon Sheet Glass Co. (5202), which gets 39 percent of its sales in Europe, slumped 5.2 percent to its lowest level on record. Kawasaki Kisen Kaisha Ltd. (9107) led shipping companies lower after a gauge of cargo rates slid. Hokuetsu Kishu Paper Co. dropped 5.8 percent after saying profit will fall 41 percent. The Topix lost 0.7 percent to 751.60 as of 9:18 a.m. in Tokyo, heading for the lowest close since Jan. 19. More than four shares fell for each that rose. The Nikkei 225 Stock Average (NKY) dropped 0.5 percent to 8,929.29, with trading volume 22 percent above the 30-day average.
“Investors would think if Greece goes, maybe Portugal, Spain and Italy go,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has almost $100 billion under management. “I think we may go through a period of fairly intense uncertainty if they end up leaving.”
Dow Falls to Lowest Level Since January on Greece Concern (Source: Bloomberg)
U.S. stocks declined, sending the Dow Jones Industrial Average to the lowest level since January, as Greece struggled to form a new government amid growing speculation the nation may leave the European currency. Financial and energy shares fell the most among 10 groups in the Standard & Poor’s 500 Index. JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) sank at least 2.6 percent as European lenders slumped. Alcoa Inc. (AA) and Schlumberger Ltd. (SLB) slid more than 1.5 percent to pace declines in commodity producers. Symantec Corp. (SYMC), the biggest seller of security software, retreated 1.4 percent after Goldman Sachs Group Inc. cut its recommendation.
The S&P 500 slid 1.1 percent to 1,338.35 at 4 p.m. New York time, the lowest since Feb. 2. The Dow fell 125.25 points, or 1 percent, to 12,695.35. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against S&P 500 losses, rose 10 percent to an almost four-month high of 21.87. About 6.6 billion shares changed hands on U.S. exchanges, in line with the three-month average. “The fear factor is definitely higher,” said Madelynn Matlock, who helps oversee about $14.7 billion at Huntington Asset Advisors in Cincinnati. “The whole European (SX7P) political situation is really the focus at this point. Nobody really knows what’s going to happen next and the market hates uncertainty.”
European Stocks Drop on Greek Deadlock, Merkel’s Setback (Source: Bloomberg)
European stocks retreated, snapping two days of gains, as Greece moved closer to a possible exit from the euro currency union and German Chancellor Angela Merkel’s party lost a state election. Banks paced losses, with HSBC Holdings Plc (HSBA) dropping 1.5 percent. Infineon Technologies AG (IFX), Europe’s second-largest semiconductor maker, retreated after Chief Executive Officer Peter Bauer decided to step down. ING Groep NV (INGA) tumbled 6 percent as European Union regulators will reexamine its rescue by the Dutch government. The Stoxx Europe 600 Index lost 1.8 percent to 247.43 at the close of trading. All 19 industry groups on the gauge fell. The Stoxx 600 has pared this year’s gains to 1.2 percent as an inconclusive election in Greece left political parties struggling to form a government, risking the collapse of proposed austerity measures.
“With no new Greek government in sight, I think that we will see continued insecurity and volatility in financial markets this week,” said Alessandro Fezzi, senior market analyst at LGT Capital Management AG in Pfaeffikon, Switzerland. The impasse “will lead us to new elections in June, which will prolong investors’ insecurity as they worry about possible contagion risks, especially regarding Spain.”
Emerging Stocks Fall as Commodities Push Russia to Bear Market (Source: Bloomberg)
Emerging-market stocks fell as a plunge in commodities sent Russian and Brazilian equities tumbling and investors speculated China’s cut in banks’ reserve ratios won’t be enough to stem the economic slowdown. The MSCI Emerging Markets Index dropped 2 percent to 952 by 4:31 p.m. in New York, the lowest since Jan. 16. Russia’s dollar-denominated RTS Index (RTSI$) declined, pushing the gauge into a bear market, while the Micex index fell to a seven-month low. Brazil’s Bovespa retreated 3.2 percent, the most since Sept. 22. Brookfield Incorporacoes SA (BISA3), the nation’s fourth-largest homebuilder by revenue, was the leading decliner in Brazil and on the emerging nations’ gauge. Commodities dropped for a ninth day, extending their longest losing streak since 2008, as oil slumped to $94.78, the lowest level in almost five months.
The announcement by the People’s Bank of China on May 12 that it’s cutting the amount of cash banks must set aside as reserves was deemed insufficient to support lending and stop an economic slowdown by Lars Christensen, chief emerging-market analyst at Danske Bank A/S. “It’s a pretty bad day and the main problem is China,” Christensen said by phone from Copenhagen today. “China’s slowing down impacts commodity prices so commodities are now taking a beating. That’s certainly not good news for some of the major emerging markets like Russia and Brazil.”
Euro Weakens to Four-Month Low on Greek Turmoil (Source: Bloomberg)
The euro fell to an almost four-month low amid mounting doubts that Greece can avoid an exit from the currency union as the region’s finance ministers meet for a second day in Brussels. Greece’s President will call a meeting of leaders of all parliamentary parties except for an ultra-nationalist party today to make the case for a government of prominent non- politicians. The 17-nation currency traded 0.1 percent from a three-month low against the yen before a report forecast to show Europe’s economy contracted. Demand for the Australian dollar was limited before the central bank releases minutes of its last meeting, when it cut interest rates by 50 basis points. “The intense uncertainty in Greece is hard to see coming out well for risk appetite at this point,” said Greg Gibbs, a currency strategist at Royal Bank of Scotland Group Plc in Sydney. “Looking at the fundamentals and at the developments in Europe, it’s all very bearish for the euro.”
The euro traded at $1.2833 as of 8:39 a.m. in Tokyo from $1.2823 yesterday, after earlier sliding to $1.2816, the weakest level since Jan. 18. The currency was little changed at 102.48 yen from 102.39 yesterday, when it reached 102.23, the lowest since Feb. 16. The yen was at 79.87 per dollar from 79.85.
FOREX-Euro hits 4-mth low on Greece jitters; Aussie dips
SINGAPORE, May 14 (Reuters) - The euro hit its lowest level in nearly four months after Greek political leaders failed in their latest efforts to form a ruling coalition, keeping investors on edge over the risk of the country exiting the euro zone.
"I think they will steer the rudder that way, even if that leads to costs on the inflation front. If that is the case, the direction would be toward weakness in the currency," he said.
Workers Lacking Skills Hinder More Factory Gains: Economy (Source: Bloomberg)
Paul Bonin has no problem getting enough orders to keep his South Bend, Indiana, factory busy. What he can’t find are enough qualified employees to work on the assembly lines. “The biggest challenge we face is a skilled labor force,” said Bonin, president of Bertrand Products Inc., which makes transmission parts for helicopters. He said he sees opportunities to fill more orders, “but I can’t take the work because I can’t find the workforce.” The inability to locate employees with the right abilities is holding back manufacturing, the industry that led the U.S. out of the worst recession since the 1930s, just as the economy shows signs of cooling. The number of factory jobs waiting to be filled climbed to 326,000 in March, the most since November 2007, according to data from the Labor Department. “The manufacturing sector is clearly showing signs of a skills mismatch,” said Dean Maki, chief U.S. economist at Barclays in New York. “It is likely to weigh on manufacturing growth.”
Spark in Sales of Cars and Trucks Drives U.S. Economy (Source: Bloomberg)
Car sales that are running at the fastest pace in four years are poised to reverberate through the world’s largest economy as a spillover into production, profits and jobs for Americans may be starting. Auto purchases have exceeded a 14 million annual rate in each month this year, the strongest performance since early 2008, according to Ward’s Automotive Group. Government data show motor-vehicle output contributed half of the first quarter’s 2.2 percent economic growth. General Motors Co. (GM), the world’s largest automaker last year, boosted its 2012 industry-sales forecast, Ford Motor Co. (F) will add factory shifts and Chrysler Group LLC is stepping up hiring as demand rises. The resurgence -- from assembly lines and dealerships to steelmakers, freight lines and loan providers -- signals the U.S. is headed for lasting, robust growth, says Joseph Carson, director of global economic research at AllianceBernstein LP in New York.
“We’re starting to see the spark in the auto sector that was missing initially” during the recovery from the recession, said Carson, a former GM economist. “It tells you there’s a certain momentum. A whole host of areas could see the multiplier effect. We’re at the beginning of a very long and durable cycle.”
JPMorgan’s Trades Probed by U.S. National Bank Agency After Loss (Source: Bloomberg)
The Office of Comptroller of the Currency said yesterday that it is examining JPMorgan Chase & Co. (JPM)’s activities and evaluating their transactions following a $2 billion loss that shook up bank leadership. “The OCC is examining the bank’s activities and is in continuous dialogue with bank personnel and other regulatory colleagues as we evaluate details related to the specific transactions as well as the surrounding risk management processes that resulted in this unexpected loss,” Bryan Hubbard, an OCC spokesman, said in an e-mail. The regulator, which oversees national banks including JPMorgan Chase Bank N.A., also is evaluating risk management strategies and practices at other large banks to validate their understanding of risk levels and controls. The OCC said JPMorgan’s losses affect its earnings while not presenting a threat to the safety and soundness of the bank.
The “vast majority” of the bank’s chief investment office that suffered the loss was part of the national bank, Hubbard said. JPMorgan Chase Bank N.A.’s deposits are insured by the Federal Deposit Insurance Corp. The bank used a new model for calculating its trading risk in the first quarter that Chief Executive Officer Jamie Dimon, 56, said was inadequate. Former FDIC Chairman Sheila Bair said yesterday that the change to the so-called value-at-risk calculation “is something I can only assume the regulators were aware of and briefed on.”
Facebook Said Set to Finish Taking IPO Orders Tomorrow (Source: Bloomberg)
Facebook Inc. (FB) plans to stop taking orders tomorrow for its initial public offering, two days ahead of schedule, according to a person with knowledge of the transaction. Facebook will likely finish taking orders for the IPO after U.S. markets close May 15, said the person, who declined to be identified as the plans are private. The offer of 337.4 million shares at $28 to $35 each has been oversubscribed, according to people with knowledge of the matter, who declined to say by how much orders exceeded the amount of stock on offer. Jonathan Thaw, a spokesman for Facebook, declined to comment. “They’re swamped with the orders that are in,” said Jon Merriman, chief executive officer at investment firm Merriman Holdings Inc. (MERR) in San Francisco. “They just need time to determine the price. They can send the message -- the books are closing, send in your orders now.”
The world’s most popular social-networking site, led by CEO Mark Zuckerberg, is seeking a market value of as much as $96 billion. At that level, Facebook would surpass United Parcel Service Inc. (UPS) as the most valuable company in history to go public in the U.S., based on market capitalization, data compiled by Bloomberg and Dealogic show.
China Growth Seen at 13-Year Low by Pimco (Source: Bloomberg)
China’s slowdown may deepen as policy makers unwind the excesses of a record credit boom while only gradually increasing stimulus, leaving 2012 growth at the weakest in 13 years, Pacific Investment Management Co. says. “The economy is unlikely to bottom until the third quarter,” Ramin Toloui, Pimco’s global co-head of emerging markets portfolio management in Singapore, said in e-mailed comments May 13. “Policy makers will progressively turn the dial toward more stimulus, but not in the aggressive manner of 2009,” restrained by the goal of tempering the credit-fueled property market, he said. Pimco, which oversees the world’s largest bond fund, sees Chinese growth this year in the “mid-7 percent range,” a pace unseen since 1999. Its call is still lower than that of banks from Citigroup Inc. and JPMorgan Chase & Co. to Bank of America Corp. and UBS AG, which all pared their forecasts after April economic data were released last week.
A more measured pace of stimulus now than the record fiscal package and lending boom of 2009 may help reduce the risk of an eventual credit bust. China’s central bank has so far held off on lowering interest rates, opting May 12 to execute the third reduction in banks’ reserve requirements since November. The reserve-ratio cuts are “meant to control the risk of a hard landing, not to avoid a soft landing,” said Stephen Jen, managing partner at SLJ Macro Partners LLP in London and former head of currency research at Morgan Stanley. “These monetary policies are reactive, very different from what some analysts had been expecting -- something much more aggressive and pre- emptive.”
Largest S. Korea Fund to Seek More Investment Quota in China (Source: Bloomberg)
South Korea’s National Pension Service, the country’s biggest investor, plans to seek approval to buy more yuan-denominated Chinese stocks after using up the initial quota of $100 million it received in March. The $316 billion pension fund plans to use that allotment by September and will pick two managers “soon” to handle the investments, Chairman Jun Kwang Woo said in an interview in Seoul yesterday. The fund also aims to expand investments to Chinese bonds and so-called alternative investments later, he said, without being more specific. “Given the size of our portfolio and the size of the first tranche, I think it’s natural to increase the quota down the road,” Jun, 63, said, without detailing how much more quota the fund plans to apply for. “I do expect some bumps in the road to further growth. But that doesn’t give an excuse to understate the true potential of the economy.”
Jun’s comments come as data show China’s economy, the world’s second largest, is slowing and as the nation’s stocks get cheaper. The benchmark Shanghai Composite Index has fallen 61 percent from its October 2007 record and traded for 12.7 times reported earnings as of yesterday, or 61 percent below the average level of 32.4 since 1997. China said on May 12 it will cut the amount of cash that banks must set aside as reserves for the third time in six months after data showed that industrial production grew the least since 2009 in April and new yuan loans missed estimates. International interest in yuan-denominated assets is rising as China’s economy expands and its government accelerates the opening of its capital markets.
Japan to Experience Power Shortages This Summer, Panel Says (Source: Bloomberg)
Kansai Electric Power Co. (9503) and two other Japanese utilities may have power shortages this summer without supplies from nuclear reactors, a government panel said. Kansai Electric, the utility most dependent on nuclear power, may face the biggest shortage of 14.9 percent, the independent committee said in a draft report published May 12. Kyushu Electric Power Co. and Hokkaido Electric Power Co. may have shortages of 2.2 percent and 1.9 percent, the report said. Japan is reviewing its electricity outlook as it heads toward a nuclear-free summer while debating the first restart of atomic reactors idled for regular safety checks since the Fukushima disaster in March last year. Based on the conclusion of the panel, the government will decide on power-saving measures, which may include rolling blackouts.
Kansai Electric’s service area may face a more severe power shortage than the deficit forecast in Tokyo Electric’s region last year, according to the report. In addition to the Kansai region, power supply and demand are expected to be tight in Hokkaido, Shikoku and Kyushu. Utilities should have at least 3 percent surplus capacity to deal with potential demand spikes or accidents at power plants, the report said. Tokyo Electric Power Co. and four other utilities were estimated to meet the target, it said.
India Inflation Quickens, Curbing Room for Cutting Rates (Source: Bloomberg)
Indian inflation unexpectedly accelerated in April, crimping the central bank’s scope to bolster economic growth by extending interest-rate cuts. Stocks fell, reversing earlier gains. The benchmark wholesale-price index rose 7.23 percent from a year earlier, after climbing 6.89 percent in March, the Ministry of Commerce and Industry said in a statement in New Delhi today. The median of 32 estimates in a Bloomberg News survey was for a 6.67 percent gain. Reserve Bank of India Governor Duvvuri Subbarao signaled last month that inflation might limit the room for further cuts after he slashed the benchmark rate by half a percentage point, flagging price risks from the fiscal deficit, energy costs and a weaker rupee. Greece’s political turmoil and a deepening debt crisis in Europe are increasing pressure on Asian nations to support growth as exports falter from Taiwan to Malaysia. China cut banks’ reserve requirements on May 12 to revive demand.
“The Reserve Bank of India faces somewhat of a dilemma,” Robert Prior-Wandesforde, Singapore-based director of Asian economics at Credit Suisse Group AG, said in a note after the report. “Our guess is that the chance of a June rate move has diminished.”
Euro Chiefs May Offer Leniency to Greece (Source: Bloomberg)
European governments hinted at giving Greece extra time to meet budget-cut targets, as long as the financially stricken country’s feuding politicians put together a ruling coalition committed to austerity. Calling talk of a Greek pullout from the euro “nonsense” and “propaganda,” Luxembourg Prime Minister Jean-Claude Juncker said only a “fully functioning” Greek government would be entitled to tinker with the conditions attached to 240 billion euros ($308 billion) of rescue aid. “The government would have to stand by the program,” Juncker told reporters after chairing a meeting of euro-area finance ministers in Brussels late yesterday. “If there are dramatic changes in circumstances, we wouldn’t close ourselves off to a debate over extending the deadlines.”
Greece’s post-election impasse multiplied the signs of stress in European markets yesterday. The euro fell for the 10th time in 11 days and stocks surrendered a two-day gain. Bond yields in recession-wracked Spain, the next potential candidate for financial support, touched a five-month high. “The euro breakup story is gathering steam again,” Marchel Alexandrovich, a senior European economist at Jefferies International in London, said in a research note. “If Greece were to ever exit the euro, no amount of reassuring comments will convince investors that other countries won’t soon follow.”
Greek President Pitches New Government Plan (Source: Bloomberg)
Greek President Karolos Papoulias proposed a government of prominent non-politicians to steer the country and avert new elections as doubts mount that Greece can avoid an exit from the euro area. Papoulias will call a meeting of all leaders of parties represented in parliament except for an ultra-nationalist party for 2 p.m. in Athens tomorrow to discuss the proposal, said Evangelos Venizelos, the leader of Pasok, the third-biggest party. Venizelos spoke after meeting with Papoulias and the leaders of two other parties. “Pasok is taking a responsible stance,” Venizelos said in comments televised live on state-run NET TV. “We support a government of prominent figures as a necessary solution.”
The new plan threatens to extend the political gridlock that has left the country without a government for more than a week since the inconclusive May 6 elections. Democratic Left leader Fotis Kouvelis, who attended today’s meeting, said he was opposed to the plan and will attend tomorrow to press for his unity government proposal, which has already been rejected by the second-biggest party, Syriza. Papoulias spent yesterday trying to coax the country’s three biggest parties into a coalition. If his efforts fail, new elections will need to be called.
Greece Euro-Exit Debate Goes Public (Source: Bloomberg)
European finance ministers grappled with the costs of keeping Greece in the euro area or letting it go, as Greece’s post-election political feud dragged on with little progress toward forming a government. German Finance Minister Wolfgang Schaeuble said Europe has done the “utmost” to prop up the financially stricken country, limiting any further room for leniency after about 240 billion euros ($308 billion) of aid pledges. “There’s no easy way for Greece, whatever the outcome will be,” Schaeuble told reporters before a meeting of euro-area finance ministers in Brussels today. “It’s not about the question of being more or less generous toward Greece. It’s simply about what is still economically justifiable, what can be done that’s still convincing in economic terms, that still has credibility.” Signs of stress abounded in European markets today. The euro fell for the 10th time in 11 days and bond yields in recession-wracked Spain, the next potential candidate for financial aid, touched a five-month high.
Euro Officials Begin to Weigh Greek Exit as Euro Weakens (Source: Bloomberg)
Greece’s possible exit from the euro moved to the center of Europe’s financial-crisis debate, rattling markets as authorities in Athens struggled to form a government. Meetings brokered by Greek President Karolos Papoulias were set to continue today after Syriza, the leading anti-bailout party, rejected a unity government following inconclusive elections May 6. That moved the country closer to a new vote, with at least five European central bankers broaching the once- taboo topic of its exit from the euro. “We’re really getting to a denouement,” Michael O’Sullivan, head of portfolio strategy at Credit Suisse Private Banking, said today in a Bloomberg Television interview. “We’re getting to the part where a decision has to be made” on whether Greece leaves the 17-nation currency union, he said.
Euro finance ministers meeting today in Brussels may discuss the bailout for Greece, as well as the situation in Spain, where the government last week made a fourth attempt to clean up banks. Getting German Chancellor Angela Merkel to weaken her demand that debt cutting be the core of the crisis response will be a key objective of new French President Francois Hollande when the two meet tomorrow in Berlin.
Greek President to Meet Four Party Leaders Tomorrow (Source: Bloomberg)
Greek President Karolos Papoulias will meet with political party leaders at 7:30 p.m. tomorrow as discussions on forming a national unity government continue, state-run NET TV said, without citing anyone. New Democracy leader Antonis Samaras, Pasok leader Evangelos Venizelos and the head of the Democratic Left party Fotis Kouvelis will attend the meeting, NET reported. NET initially said that Syriza party head Alexis Tsipras was also expected to attend the meeting, but later reported he would not be taking part. Syriza is the second-largest party in Parliament and the biggest party opposed to the terms of the country’s international bailout. Greece may face new national elections unless a government is formed following the inconclusive voting on May 6. Kouvelis said he regretted that his proposal to form a unity government had failed.
Papoulias said that there is no unity government at this time due to the refusal of the Syriza party to back such a proposal, Kouvelis told reporters in Athens today, after meeting with the president. He spoke in comments televised live on state-run NET TV.
Greece Turns Balkan, Serbia Joins Europe in Key Votes (Source: Bloomberg)
Two elections took place in the Balkans on May 6, and when historians look back, I think they’ll see a tipping point: The day Serbia ceded to Greece its place as the region’s most troublesome country. In the late 1800s, Otto von Bismarck, famously said that the next war in Europe would begin because of some “damned foolish thing in the Balkans.” Of course, he was right. This year marks the centenary of the start of the Balkan Wars in 1912, pitting Serbia, Greece, Bulgaria and Montenegro against the Ottoman Empire. The conflict served as a prelude to World War I, triggered two years later when a Serb assassinated Archduke Franz Ferdinand, in Sarajevo.
In a few years’ time, it may be conventional wisdom to say that the demise of the euro, or whatever else now lies ahead of Europe, was again sparked by some damned foolish thing in the Balkans. Only this time, war is unlikely and Serbia won’t be the culprit. That honor would go to mendacious Greek leaders, their statisticians and an election in which Greek voters put their country’s position in Europe at risk.
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