Greece
Wants Special ECB Help While Going ‘Cold Turkey’ on Aid - (www.bloomberg.com) Greece is counting on the European Central Bank
to maintain a financial lifeline while the week-old government in Athens
negotiates new terms on its international bailout package, Finance Minister
Yanis Varoufakis said. While the country is “desperate” for funds, it will
forgo further disbursements of emergency aid until negotiating a “new social
contract” with its creditors, he said. He set an end-May deadline for reaching
a deal on a revamped rescue with the euro area and the International Monetary
Fund. “For that period, we’re not going to ask for any more loans,” Varoufakis
told reporters today in Paris after meeting French Finance Minister Michel
Sapin. “During this period, it is perfectly possible in conjunction with the
ECB to establish the liquidity provisions that are necessary.” The danger for
Prime Minister Alexis Tsipras, who won power on Jan. 25 following pledges to
undo more than four years of austerity tied to emergency aid, is that both the
country’s banks and the government could be left without funding as soon as
next month. Greece has until end-February to qualify for an aid payment of as
much as 7 billion euros ($7.9 billion) and hasn’t indicated any willingness to
seek an extension.
Union
strikes at 9 US refineries amid contract war - (www.cnbc.com) Union leaders called strikes on Sunday at nine
U.S. refineries in a bid to pressure oil companies to agree to a new national
contract covering workers at 63 plants. The walkouts, the first held in support
of a nationwide pact since 1980, target plants that together account for more
than 10 percent of U.S. refining capacity. The discord comes as plunging crude
prices force oil companies to slash spending. Royal Dutch Shell, the lead industry negotiator, indicated talks
had Ubroken down. "We remain committed to resolving our differences with
USW at the negotiating table and hope to resume negotiations as early as
possible," Shell said. Shell activated a strike contingency plan at its
sprawling joint venture refinery in Deer Park, Texas, to keep operating
normally. Other companies have said they could call on trained managers to use
as replacement workers, so the strikes are not expected to cause gasoline
prices to spike. The United Steelworkers union (USW) did not say at which
plants the strikes would be held.
Barack
Obama Plans to Tax Overseas Cash Piles - (www.ft.com) President Barack Obama will propose raising $238bn by levying a
one-off tax on the cash piles held by US companies overseas to repair the US’s
crumbling roads and bridges. The measure, a key plank of the US president’s
budget to be outlined on Monday, would impose a 14 per cent “transition” tax on
the estimated $2tn in earnings US companies have amassed overseas, the White
House said on Sunday. The proposed tax is less than half the top corporate tax
rate in the US, which stands at 35 per cent and which critics claim gives
incentives to American companies to hoard earnings abroad instead of investing
them at home. The proposal is likely to attract opposition, and would mean a
significant tax rise for companies, particularly in the technology and
pharmaceuticals sectors that have been shifting profits to low-tax countries
such as Ireland and Bermuda. Critics say the existing offshore cash mountains
testify to the aggressive foreign tax planning by US companies, while
businesses cite them as evidence of the handicaps they face under an
uncompetitive US tax regime. Mr Obama will also propose a 19 per cent tax on
future foreign earnings, giving companies a credit on foreign taxes and
allowing them to be reinvested in the US with no additional penalty. Under the
current system, US companies pay little or no tax on their earnings abroad
until they are brought back into the US.
There
will be a major cancellation of debt in Europe — but it's not in Greece - (www.businessinsider.com) Thousands
of Croats will see their debts written-off on Monday as part of an attempt to
boost the economy by helping households to regain access to basic facilities
including bank accounts. The scheme, which has been dubbed "fresh
start", will see the debts of around 60,000 citizens erased by banks,
telecoms and utilities operators as part of a deal with the government. Around
2.1bn kuna (£20m) worth of bad debts are expected to be written off by
creditors who have signed up to the scheme. None will be refunded for their
losses. Qualifying households must have debts lower than 35,000 kuna (£3,500),
and their monthly income should not be higher than 1,250 kuna. Croats who own
property or have any savings will not benefit from the deal. "We assess
that this measure will be applicable to some 60,000 citizens," said
Milanka Opacic, Croatia's deputy prime minister. "Thus they will be given
a chance for a new start without a burden of debt." It is estimated that
the program will give 20pc of the 317,000 Croatians whose accounts were frozen
in July last year due to bad debts access to their accounts again.
Europe
Fractures: France "Prepared To Support Greece" In Debt Renegotiations - (www.zerohedge.com) Despite Angela Merkel's insistence on numerous occasions this past week
that there will be "no debt renegotiations," it appears a schism at
the core of Europe is opening. As France24 reports, following a meeting
between France's finance minister Michel Sapin and Greece's finance minister
Yanis Varoufakis, the press conference had a considerably more amicable tone
that Friday's Dijsselbloem dissing. "France is more than
prepared to support Greece," Sapin said adding that Greece’s efforts to
renegotiate were "legitimate." Sapin urged a "new
contract between Greece and its partners." As France24 reports, France’s Socialist government offered support
Sunday for Greece’s efforts to renegotiate debt for its huge bailout plan, amid
renewed fears about Europe’s economic stability. The backing was a victory for
Greek Finance Minister Yanis Varoufakis, holding talks with European officials
to push for new conditions on debt from creditors who rescued Greece’s economy
to save the shared euro currency. Worries have mounted that Greece’s new far
left government might not pay back its debts. Varoufakis is also visiting
London and Rome – and said Sunday that he would visit Berlin. The German
government has been particularly angry at the new Greek government’s position
and bluntly rejected suggestions that Greece should be forgiven part of its
rescue loans. Varoufakis insisted that Greece wants to pay the money back, but
said he wants new terms and new negotiating partners, arguing that “it’s not
worth” discussing with the so-called “troika” of creditors who set the strict
terms for Greece’s rescue.
Obama
wants a one-time tax on the $2 trillion of profits that US companies are
hoarding overseas - (www.businessinsider.com)
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