Eurozone crisis live: Spanish scandal hearings, Greek ferry workers end strike

Luis Bárcenas, the man at the heart of the Spanish illegal payments scandal, questioned today. Greek seaman strike broken. Scuffles as Athens farmers hand out food. IFS report: UK missing budget targets. Berlusconi’s popularity keeps rising…

Powered by article titled “Eurozone crisis live Greek ferry workers end strike as crowds flock for free food” was written by Graeme Wearden, for on Wednesday 6th February 2013 17.30 UTC

5.30pm GMT

Greek government holding talks over industrial unrest

Over to Greece again — where we learn the governing coalition partners are now holding talks to discuss how best to handle a range of pressing issues including the resurgence in industrial action

Our correspondent Helena Smith reports that leaders have also been meeting Germany’s main opposition leader today.

She writes:

Prime Minister Antonis Samaras began the talks with his junior partners against a backdrop of protests and mounting discontent. The government’s recourse to mobilization of striking seamen today, and metro workers a few weeks ago, has deeply troubled both of his power-sharing partners especially Fotis Kouvellis, head of the small Democratic Left party. Aides say the meeting will also focus on protesting farmers. The socialist Pasok leader, Evangelos Venizelos, is particularly concerned by the looming showdown between farmers who are enraged by higher taxes and production costs and have threatened blockades of central arteries up and down the country, and a government that under pressure from international lenders has almost no room for manoeuvre.

Meanwhile, says Helena, the German chancellor Angela Merkel’s challenger in the country’s autumn general election has also been visiting Athens – and, it would seem, saying all the right things.

She writes:

He may be gaffe prone back home but in Greece Peer Steinbruck, the Social Democrat candidate for the German chancellorship, has been busy making statements that are music to the ears of those who met him today. The politician said it was clear that the debt-choked country “needs time to succeed in its stabilisation and for people to regain confidence.”

After holding talks with his fellow Social Democrat Evangelos Venizelos, the German leader insisted that confidence in Greece was vital if it was to lure foreign investment again.

“Confidence is absolutely necessary for investments not just from Greeks but foreigners because very simply … austerity alone cannot bring results,” he said noting that Greek workers and pensioners had already suffered cuts in the range of 30 and 40 percent.

The social democrat who was also given an overview of the Greek economy by finance minister Yiannis Stournaras added that “measures that would not be imposed on our own people should not be imposed on another country.”

5.05pm GMT

Berlusconi’s popularity keeps rising

Hello again. Some rather alarming news from Italy – Silvio Berlusconi narrowed the lead of front-runner Pier Luigi Bersani to within the margin of error of an opinion poll for the first time.

With the elections taking place on February 24th and 25th, the coalition of Berlusconi’s People of Liberty Party and the Northern League is now attracting 29.4% of the vote, up 0.1%.

Bersani’s left-leaning coalition is polling at 33.1%, down 0.2 percentage points.

The polling data has a margin of error of 4%, so Berlusconi could actually be ahead — having pledged to abolish Italy’s unpopular property tax.

The election is likely to be decided in a couple of regions, including Lombardy in the north. It’s looking increasingly close….

More here

2.27pm GMT

Germany cool on France’s euro views

Germany has hit back at the suggestion from the French president, François Hollande, that the euro was overvalued – and that new exchange rate controls are needed.

German chancellor Angela Merkel’s spokesman, Steffen Seibert, argued that the euro was not overvalued, if you took a long view.

Via Reuters, here are the quotes from Seibert:

If you look at the historic context, the German government is of the view that the euro is not overvalued at the moment.


There will certainly be a conversation about that … but the view of the German government is that exchange rate policy is not a suitable instrument to increase competitiveness…You only achieve short-term impulses through targeted devaluation. A long-term strengthening of competitiveness is not achieved in that way


Our basic conviction is that exchange rates should reflect economic fundamental data.

PS: updates may be light this afternoon due to other events….

Updated at 2.40pm GMT

12.51pm GMT

Poland’s central bank has cut its headline interest rate by a quarter-point, to 3.75%, in the latest example of monetary policy easing.

12.50pm GMT

Photos: Protests in Athens

Here are some more photos from the protests at Athens’ Piraeus port today: (see 11.20am):

Updated at 1.53pm GMT

11.34am GMT

Video: Free food giveaway in Athens

Meanwhile, Helena reports that Greek media are running shocking footage showing desperate Greeks fighting with one another earlier today outside the agriculture ministry in central Athens, where farmers, protesting agianst production costs, were handing out free fruit and vegetables.

Here are two clips from the scene:

In commentary run alongside the video, the Greek news portal Newsit described the scenes that followed the farmers’ decision to set up a makeshift market as “chaotic.”

Newsit added:

These people are not beggars, they are the victims of an economic crisis that like a hurricane has swept over and levelled entire families.

They are people next door who until yesterday had jobs and lead a normal life. Today, these people, swallowing their pride and dignity, are going wherever they can to find a little free food, standing in line as they did today in Vathis square.

Updated at 11.41am GMT

11.20am GMT

Protests as Greek ferry workers forced back to work

A huge rally is underway in the port of Piraeus, in Greece, as protesters gather in solidarity for striking seamen who were forced to return to work this morning or be sacked.

Other workers are now striking in sympathy.

Our correspondent Helena Smith reports:

Thousands of communist militants, unionists and other supporters have converged on Pireaus to denounce the government’s decision to mobilise seamen this morning.

The KKE communist party leader Aleka Papariga also joined the rally as political forces opposed to the strident terms of the bailouts debt-received Greece has received from the EU and IMF hit back in solidarity for the seaman.

Crews and dock workers returned to work under threat of being fired — with the first ferries setting sail and riot police leaving the port — but other sectors have now walked off the job in a massive display of support for the strikers. At noon local time employees operating bus lines, trolleys and the suburban railway network began a four-hour work stoppage as the civil servants union, ADEDY, and the country’s biggest private sector force, the General Confederation of Greek Labour (GSEE), retaliated with a 24-hour strike.

Both unions have released withering statements decrying the conservative-dominated coalition’s “undemocratic” decision to break up the seamens’ strike.

The ADEDY union said:

ADEDY wholeheartedly denounces the government decision to move ahead with the policy of mobilizing striking seamen.

It is the second time in less than two weeks that it has resorted to this anti-democratic practice of penalizing workers and strike action, confirming with its action that democracy, and the fundamental rights of workers, have effectively been suspended.

The government, ADEDY continued, should know that the “systematic undermining” of the hard-earned rights of unions and workers “violate the country’s constitution and international and European treaties protecting the rights of workers.” The use of martial law “in a democratic European” was outrageous.

The president of the Panhellenic Union of Seamen, Antonis Dalacogiorgos, said protesters would march on the merchant marine ministry within the day while the union’s central committee would also meet to decide on what course of action to take.

Updated at 11.26am GMT

11.07am GMT

How eurozone breakup would send UK national debt soaring

Another line from the IFS Green Budget – it predicts that a euro breakup would send UK into a deep recession, pushing national debt above 100% of GDP.

Here’s the graph (via Sky’s Ed Conway, whose also at the IFS briefing)

Updated at 11.10am GMT

10.33am GMT

IFS Green budget predicts more blues for the UK

Bad news for chancellor George Osborne, and the rest of the UK, from the Institute for Fiscal Studies.

In its latest Green Budget, the IFS warned that Britain will have borrowed £64bn more than expected by the time of the next general election in 2015.

It also predicted that 1.2m public sector jobs will have been cut by 2018 – 300,00 more than previously estimated.

The Guardian’s economics editor, Larry Elliott, is at the event, and radios in that:

The UK’s leading tax and spending experts said that the public finances would be in a worse state in 2015 than permitted under the plans made by the last Labour government to tackle the deficit.

In its annual health check on the public finances, the IFS said the chancellor was allowing extra borrowing to take the strain during the current parliament at the expense of another bout of austerity after the 2015 election.

On the eurozone, the report (produced with Oxford Economics) predicted a 0.2% contraction this year – with the risks ‘balanced’ (so a less worrying situation than last year).

Updated at 11.01am GMT

10.08am GMT

Key event

Japan’s Nikkei index closed at its highest level for four and a half years this morning.

It jumped by 3.8% in its biggest one-day rally in almost two years, finishing 416.83 points higher to 11,463.75.

The trigger was the news yesterday that Bank of Japan governor Masaaki Shirakawa is stepping aside three weeks early – meaning the process of priming the printing presses, driving inflation towards 2% and going for growth can begin a bit earlier.

Updated at 10.26am GMT

9.46am GMT

ArcelorMittal dented by Euro woes

Europe’s economic woes have hurt the world’s largest steelmaker, ArcelorMittal.

ArcelorMittal posted a net loss of $3.99bn (€2.94 billion) for the 2012, with sales down 14%.

The heavy loss was mainly due to a $4.8bn of charges and write-downs related to its European operations, where it has closed one factory in Belgium and mothballed another two, in Spain and France.

Chief executive Lakshmi Mittal pointed the blame firmly at Europe:

2012 was a very difficult year for the steel industry, particularly in Europe where demand for steel fell a further 8.8%.

He added that this year will also be tough:

Although we expect the challenges to continue in 2013, largely due to the fragility of the European economy, we have recently seen some more positive indicators.

The closure of ArcelorMittal’s plant in Belgium will cost 1,300 jobs, and is deeply unpopular. Workers took to the streets to protest late last month:

Updated at 9.47am GMT

9.35am GMT

Shares up again

European stock markets are mostly up again in early trading, clawing back some more of Monday’s losses. Eurozone fears continue to abate….

FTSE 100: up 32 points at 6314, +0.5%

German DAX: up 18 points at 7683, +0.25%

French CAC: up 10 points at 3705, +0.28%

Spanish IBEX: up 52 points at 8144, +0.6%

Italian FTSE MIB: down 13 points at 16698, – 0.07%

Mike van Dulken, head of research at Accendo Markets, says trader are:

prepared to overlook eurozone woes, giving greater weight to the improved [economic] macro outlook.

Updated at 9.42am GMT

9.26am GMT

Speaking of Greece… there is deep concern that the country’s neo-Nazi Golden Dawn party has begun a support drive in Germany.

Golden Dawn has set up a cell in the southern German city of Nuremberg, from where it plans to target young Greeks who have moved to Germany seeking employment.

As we reported last night:

Greek community leaders in Germany have condemned the arrival of the party, also known as Chrysi Avgi, and called on authorities to clamp down on a group that they said had shown its readiness to use violence in Greece and could attempt to do the same in Germany.

Golden Dawn, which has close to 20 seats in the Greek parliament, has described the move on its website as the “answer of expat Greeks to the dirty hippies and the regime of democratic dictatorship in our homeland”.

More here

Updated at 9.27am GMT

9.06am GMT

Riot police sent into Piraeus harbour

Here’s the latest details of the attempt to break the Greek seaman’s strike this morning, via AFP:

Riot police were sent to Greece’s main harbour, Piraeus, early on Wednesday to end a strike by seamen that has disrupted ferry services to the country’s myriad islands for nearly a week.

Television footage showed a cordon of riot police deployed at the harbour to keep a strike support force away from ships taking on passengers and cargo.

8.37am GMT

High court judge to quiz PP ex-treasurer

Good morning, and welcome back to our rolling coverage of the eurozone financial crisis and other key events in the global economy.

The Spanish cash-for-contracts row that broke last week continues to dominate our attention this morning. Luis Bárcenas, the former treasurer of the governing People’s party, will face an anti-corruption prosecutor today.

Bárcenas will be quizzed on those dramatic allegations that he ran a secret scheme where senior party officials received secret payments from business people, who were rewarded with government contracts.

High court judge Pablo Ruz has also begun a probe, after documents dramatically published last week showed that up to €22m was concealed in a secret ‘slush fund’ run by Bárcenas. If true, those involved could have broken rules on money laundering and tax fraud.

El Pais reports this morning that Ruz’s investigation isn’t limited to Bárcenas:

Ruz has also issued an injunction against Jesús Sepúlveda, the former mayor of Pozuelo, an upscale Madrid dormitory town, to answer questions on alleged irregular payments and gifts made to him and his family by the Gürtel corruption ring in the period 2000-2005.

Sepúlveda is the former husband of Health Minister Ana Mato, who has denied receiving luxury goods and trips as gifts from the ring.

Despite the legal activity, speculation that the scandal could force Mariano Rajoy to resign as prime minister have somewhat died down. There’s a growing belief that Spain’s slow-moving legal system means Rajoy is safe, for a while at least…

Also coming up this morning… Greek police will attempt to end a six-day strike by its seamen. As Helena Smith reported from Greece last night:

The Greek government said that as of 6am Wednesday protestors will be issued with mobilisation papers that will give them little choice but to return to work or be fired.

Addressing reporters, Kostas Mousouroulis, the merchant marine minister, said: “The government has made every possible effort to satisfy the demands of seamen. We exhausted dialogue and came up with specific solutions.

We’ll be tracking the latest developments in Spain, Greece, and beyond through the day – including the OECD’s latest verdict on the UK economy (at 3pm GMT).

Updated at 8.55am GMT © Guardian News & Media Limited 2010

Published via the Guardian News Feed plugin for WordPress.

  • trade online

Join the discussion