Monthly Archives: February 2012


Still super, Mario?

By Tom Burgis and Esther Bintliff on the news desk in London with contributions from our correspondents around the world. All times GMT.

Another big day for “Super” Mario Draghi, the European Central Bank president. 800 banks borrowed a total of €529bn under the ECB’s liquidity programme — more than last time. We were watching too for ripples from Dublin’s decision to hold a referendum on the eurozone fiscal pact.

19.20: We’re going to wrap up the live blog for today, so here’s a final round-up of today’s events:

  • In round two of the European Central Bank’s Long-Term Refinancing Operation (or LTRO), 800 European banks borrowed €529.5bn
  • A larger number of banks borrowed money than last time (when 523 banks borrowed €489bn)
  • About €310bn of net new liquidity was added to the system
  • More than two thirds of the volume was taken up by banks in three countries, thought to be Spain, Italy and France. Among the biggest takers of funds was Italy’s Intesa SanPaolo, with €24bn, double the amount it took in the December operation. UK bank Lloyds is believed to have been the biggest non-eurozone taker of funds, receiving €11.4bn.
  • In the markets, risk assets were initially firm on the back of the LTRO figures, but later fell back as Fed chairman Ben Bernanke spoke to Congress and dampened speculation that further monetary easing was on its way
  • On the plus side, US growth data for the fourth quarter was revised upwards, from 2.8 per cent to 3 per cent
  • The FT’s Brussels bureau chief Peter Spiegel got a copy of the draft conclusions from the EU council summit that begins tomorrow
  • EU Commission president Barroso met with Greek prime minister Lucas Papademos – see our 17.58 update

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It is a measure of how much the ideological climate has changed over the last thirty years that Francois Hollande’s announcement today – that he would increase France’s top rate of income tax to 75% – seems so outlandish.

Even by European standards, a top-rate of tax at this level would make France a real outlier. Currently, Sweden has the highest top-rate of tax in Europe at 56.5%. Germany’s top rate is 47.5% and France is at just 41%. The fact that Britain has a top-rate of 50% – currently significantly higher than France – is a source of considerable embarrassment to George Osborne, the UK chancellor. He, for one, would be delighted if Mr Hollande is elected president of France in May, and makes good on his promise. Read more

From the FT’s Brussels Blog:

Over the last 24 hours, a flurry of activity has taken place surrounding Greece’s €200bn debt restructuring, most of it expected but some of it potentially destabilising. Because the moves involve highly technical – but still significant – judgements by occasionally obscure groups, Brussels Blog thought it was time for another guide to what to watch for in the ensuing days.

The most eye-catching announcement was the one made last night by Standard & Poor’s declaring Greece to be in “selective default”. Luxembourg prime minister Jean-Claude Juncker, chair of the group of eurozone finance ministers, put out a statement saying the move was “duly anticipated” – and he’s right. S&P signalled this way back in June when the first talk of a Greek restructuring began.

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Cuban President Raul Castro (left) welcomes Venezuelan President Hugo Chávez to Cuba last Friday for cancer treatment. Photo: AP

One of the more interesting lines of speculation about Hugo Chávez’s deteriorating health and possible death is what it might mean for the socialist Venezuelan president’s many foreign allies. These include Cuba and Nicaragua in the Venezuelan near abroad, to further-flung friends in Syria and even China. Read more

By Gideon Rachman

“No one can here understand how the international community can let this happen.” So said Marie Colvin, in an interview given from Homs, just a day before she herself was killed by a Syrian bombardment.

A Russian Channel One undated television grab shows a man identified as Adam Osmayev, one of the suspected militants alleged to have conspired to kill Russian PM Vladimir Putin. Photo AFP/Getty

If you’re planning to bump off a world leader, then doing so in the middle of an election campaign is a good guarantee of maximum impact. But in Russian Prime Minister Vladimir Putin’s case, assassination “plots” seem to crop up so regularly around election time there is reason to be suspicious. Read more

Outside reaction to the crises in Syria and Iran

Gideon Rachman is joined by FT diplomatic editor James Blitz, commodities editor Javier Blas and US diplomatic correspondent Geoff Dyer to discuss the outside world’s reaction to the crises in Syria and Iran.

Rick Santorum continues to nip at Mitt Romney’s heels in the race for the Republican’s US presidential candidacy. Stepping back from the fray in Washington’s Rock Creek Park, Edward Luce, US columnist, assesses Mr Santorum’s chances in next week’s primaries.

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A pro-Putin rally. Photo AP

One round or two? For all the protests against Vladimir Putin, that has long been the only real question surrounding Russia’s presidential election, now just 10 days away. Will he get more than 50 per cent of the vote in the first round on March 4, with or without a little “massaging”, or will he be forced into a run-off with another candidate three weeks later? Read more

Marie Colvin spent much of her career as a journalist telling the stories of ordinary people whose lives had been devastated by war. But her death in Homs today, may actually do more to bring home the horrors of the Syrian conflict to a western audience, than the thousands of reports that have been filed on the suffering of ordinary Syrian civilians.

The heroic war correspondent is a staple character in western films – and somebody that western audiences easily identify with. Colvin, who was killed alongside Remi Ochlik, an award-winning French photographer, certainly fitted the mould. She had bravely covered conflicts all over the globe. Read more

Among political types, Rick Santorum has often jokingly been compared to Ned Flanders – that pious but kindly neighbour of The Simpsons who makes hot cocoa for Bart. On Tuesday the Drudge Report dug up (or was handed) the audio from a speech Mr Santorum delivered in Florida four years ago, which puts that comparison into the shade. It would be hard to imagine Ned Flanders talking quite so apocalyptically.

In his address, which is worth hearing in full, Mr Santorum said Satan was winning his war to take over America’s institutions. Having worked his way through American academia, which was “the first to fall”, the devil used the “domino effect” to topple “mainline Protestantism”, then “popular culture” and now “politics and government” in America. Read more

After the latest Greek bail-out, there is a great deal of focus on whether the new deal is economically or financially-sustainable. The FT’s story on the leaked “downside scenario” report suggests that even those putting the deal together have severe doubts about whether it will stick.

But it is not just economic sustainability that matters. There is also the question of whether the deal is politically sustainable? What if the voters simply reject the deal? Read more

Josefina Vázquez Mota. Photo AP

Women currently govern some 40 per cent of Latin America’s population. If Josefina Vázquez Mota wins Mexico’s presidential elections in July, that figure will rise to 60 per cent. “I will be Mexico’s first presidenta (female president),” Ms Vázquez said this month after she won the primary of the conservative National Action PartyRead more

Welcome back to our continuing coverage of the eurozone crisis.

After more than 13 hours of talks, a second bail-out for Greece was agreed early on Tuesday morning. We’ll be bringing you reaction to the deal throughout the day. All times are GMT. By John Aglionby, Leyla Boulton and Tom Burgis on the news desk in London.

We’re going to wrap up now since, after getting no sleep last night, diplomats and officials across the eurozone appear to be heading home while Athens remains abuzz with how it will meet its side of the second Greek bail-out. To recap today’s highlights:

  • Negotiators for private bondholders have backed the latest Greek deal forcing them to accept a haircut, but avoiding a disorderly default next month.
  • While the euro rallied, European equities closed down as the deal left investors unimpressed while US stocks neared a post-financial crisis high, driven by psychological thresholds .
  • Evangelos Venizelos, Greek finance minister, told an Athens press conference that the official offer on the bond swap would be made to bond holders by the end of this week. A government official added that the collective action clause, forcing holdout investors to participate, would be approved by parliament on Thursday.
  • Reaction on the streets of Athens was muted, with leftwing parties saying the deal was bound to make the recession worse. Aleka Paparriga, Greek Communist party leader, said “it’s not impossible that this crisis will turn into a disorderly default within months”.
  • Lucas Papademos, prime minister, convened a cabinet meeting to put the finishing touches to a pile of legislation that must pass in parliament by the end of February – if Greece’s credibility is to be maintained at the March 2 summit of European leaders, the next stage towards getting funding from the bailout agreed overnight.
  • Greek government officials confirmed that the country will hold a general election at the end of April or the beginning of May.

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By Gideon Rachman

The question of whether a war will break out over Iran’s nuclear programme has been around for so long that it is easy to become almost blasé. In 2006 Benjamin Netanyahu, the Israeli prime minister, was already asserting dramatically: “It’s 1938 and Iran is Germany.”

Photo: Getty

Welcome back to our continuing coverage of the eurozone crisis.

By Esther Bintliff and John Aglionby in London and Anjli Raval in New York, with contributions from correspondents around the world. All times GMT.

It was decision day on the Greek bail-out. After so many twists to this saga here is a round-up of what came out of the meeting of eurozone finance ministers after more than 13 hours of talks, courtesy of Peter Spiegel and Alex Barker of the FT’s Brussels bureau.

  • A long-delayed €130bn second bail-out for Greece was agreed on.
  • Further “haircuts” were pushed for after a confidential debt analysis showed that the previously-negotiated deal would cost €136bn and would only lower Greek debt to 129 per cent, rather than 120 per cent, of economic output by 2020.
  • Although Greek bondholders agreed in October to accept a 50 per cent cut in the face value of their bonds, they will now be offered a “voluntary” deal with a haircut of 53.5 per cent.
  • That will get Greek debt levels to 120.5 per cent by 2020, close to the IMF’s goal for long-term debt sustainability.
  • The euro rose 0.8 per cent to 1.3257 on the news, before falling back to 1.3263 at 4.20 GMT.

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By Shawn Donnan, FT World News Editor

Anthony Shadid (C) as he interviews residents of Cairo's impoverished Imbaba neighborhood, during the Egyptian revolution. AFP PHOTO/ED OU FOR THE NEW YORK TIMES

Anthony Shadid (C) as he interviews residents of Cairo's impoverished Imbaba neighborhood, during the Egyptian revolution. AFP PHOTO/ED OU FOR THE NEW YORK TIMES

The Middle East and its conflicts have generated plenty of great works of journalism. However, the reporting produced by Anthony Shadid, the New York Times correspondent who died on assignment in Syria on Thursday, was exceptional.

While many others have found a calling in grand analysis of the region’s geopolitics, his was in the often heartwrenching stories of its people.

For more than a decade, the two-time Pulitzer Prize winner gave the Middle East’s citizens a compelling voice in a western media often more prone to stereotype and cliché. Read more

Further uncertainty in Greece and Chinese princeling Bo Xilai under pressure

This week Gideon Rachman discusses with Peter Spiegel, FT’s Brussels bureau chief, whether time really has run out for Greece. He also talks to Jamil Anderlini, FT’s Beijing bureau chief, about Bo Xilai, the Chinese princeling who recently suffered a severe blow to his chances of becoming a member of the Communist party leadership. Read more


This handout picture released by North Korea's official Korean Central News Agency shows the statues of former North Korean President Kim Il Sung (L) and late leader Kim Jong Il (R) riding on horses together after being unveiled at the Mansudae Art Studio in Pyongyang on February 14, 2012

KCNA/AFP/Getty Images

Let’s face it, equestrian statues have since ancient times been an effective way for countries/governments/propaganda machines to honour their leaders and heroes (the earliest preserved equestrian statue is the Rampin Rider, found in the Acropolis).

So perhaps it is not surprising that North Korea decided to cast a larger-than-life bronze version of their late leader, Kim Jong-il, and his father Kim Il-sung, both gripping the reins of two rather spectacular ponies (the contrasting postures of the riders and their steeds are rather interesting – share your thoughts on any coded messages in the comments below).  Read more

Bye bye Robert Zoellick! Photo: JOHANNES EISELE/AFP/Getty Images

Robert Zoellick goes from the World Bank, no doubt biding his time and eyeing up the possibility of a job as secretary of state or Treasury secretary in a future Republican administration (most likely Romney – he’s not really a Santorumite), and for the second summer in a row, the starting flag drops on the race to run one of the world’s top financial institutions.

Given that the quid of the Euro-American stitch-up worked to install Christine Lagarde at the IMF last summer, the pro, as it were, will most likely drop into place with an American appointment this year. To John Cassidy’s list of possibles I’d add John Kerry – international name recognition, interest in development, administrative experience –  though that could depend on whether he has something else in mind. Read more