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Turkey plans water pipeline link with Cyprus

by on October 28, 2010

Turkey plans water pipeline link with Cyprus

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Turkey plans water pipeline link with Cyprus

European Ministers Vow to Avoid Continent-Wide Austerity Amid Debt Crisis

by on May 18, 2010

By James G. Neuger and Stephanie Bodoni May 18 (Bloomberg) — European finance ministers said Greece’s debt crisis won’t unleash a continent-wide austerity drive with the potential to tip the economy back into a recession and further undercut the euro. Only high-deficit countries including Spain and Portugal will be ordered to make additional deficit cuts, while budget policies will remain untouched in better-off nations such as Germany and Finland. “Not everyone will accelerate consolidation in a very uniform way,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters early today in Brussels after a meeting of ministers from the 16 euro countries. “That would lead to a very restrictive fiscal stance for the euro area as a whole, which would risk depressing economic growth .” Concern that tight fiscal policies would choke the economy contributed to the euro’s 3.4 percent drop against the dollar in the week since euro leaders offered a 750 billion-euro ($925 billion) rescue package for debt-burdened governments. The meeting resumed at 9 a.m. with all 27 European Union finance ministers set to adopt a draft law to tighten hedge-fund regulations that has drawn objections from the U.K. and the U.S. The euro fell today to its lowest level against the dollar since April 2006, slipping as much as 0.7 percent to $1.2315. It was unchanged at $1.2395 as of 8:20 a.m. in London. ‘Technical Details’ The core of the loan package, a 440 billion-euro fund backed by national guarantees that would buy distressed countries’ bonds, will be set up with the help of the European Investment Bank and will operate under Luxembourg law. The euro-area ministers will meet again on May 21 to work on “a certain number of technical details” of the unprecedented emergency lending mechanism, said Luxembourg Prime Minister Jean-Claude Juncker , who chaired last night’s Brussels meeting. The euro-area economy expanded 0.2 percent in the first quarter, faster than the 0.1 percent forecast by economists, as a global recovery boosted exports, offsetting consumers’ reluctance to increase spending. The International Monetary Fund said last month that the region’s economy may expand only 1 percent this year, even as the Washington-based IMF raised its global growth forecast for this year to 4.2 percent from 3.9 percent, citing a faster expansion in emerging economies including China. ‘Credible Currency’ Finance chiefs said there is no reason for global investors to desert the euro, touting the European Central Bank’s record in keeping inflation close to its 2 percent ceiling during the currency’s first 11 years. “The euro is a credible currency,” Juncker said. “Price stability has been fully maintained in the euro area over 11 years and will equally be maintained in the years to come. This is a major feature of the euro and a major asset for investors.” Spain unveiled on May 14 the biggest budget cuts in at least 30 years to bring down a deficit estimated by the EU at 9.8 percent of gross domestic product this year, more than three times the bloc’s 3 percent limit. Portugal followed a day later, pledging to slash wages and raise taxes to pare its projected 8.5 percent shortfall. “Every time you do some cuts in the budget it is possible to have a small contraction in the economy,” Spanish Economy Minister Elena Salgado said. “But we think this moment the balance has to be on the fiscal consolidation side.” Financial Backstop Juncker hailed the “courageous measures” and said the finance ministers will pass judgment on them on June 7. Italian officials said on May 16 that the government may make an extraordinary reduction in a deficit projected by the EU to hit 5.3 percent of GDP this year. France, heading for an 8 percent deficit, is slated to submit its latest spending and tax plans to the EU this week. In a first discussion of improvements to Europe’s economic management, the ministers concluded that proposals for better coordination of national budgets, speedier penalties for violators and stricter monitoring of high-debt countries “go in the right direction,” Juncker said. Under the euro’s German-inspired Stability and Growth Pact, countries with deficits above the 3 percent limit face fines as high as 0.5 percent of GDP unless they get the budget back into compliance. No country has been fined during the euro’s 11-year lifespan. Germany and France teamed in 2005 to dilute the rules after overstepping the limits for three years in a row. Sanctions Proposals by the European Commission would extend the threat of sanctions to cover countries that fail to push their budgets toward balance during “good economic times,” even if the deficit is below the threshold. Rehn also called for cutting off EU development-aid funds from the euro region’s poorest countries more quickly to penalize any deficit overruns. Currently six euro countries — Cyprus, Greece, Malta, Portugal, Slovakia and Slovenia — are eligible for the “cohesion” fund, available to countries with GDP per capita less than 90 percent of the EU average. To contact the reporters on this story: James G. Neuger in Brussels at jneuger@bloomberg.net ; Stephanie Bodoni in Brussels at sbodoni@bloomberg.net @bloomberg.net.

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European Ministers Vow to Avoid Continent-Wide Austerity Amid Debt Crisis

Erdogan Visit May Smooth Path for Greek Defense Cutbacks to Reduce Deficit

May 14, 2010

By Patrick Donahue and Ben Holland May 14 (Bloomberg) — Fear of Turkey’s army led Greece to become the European Union’s biggest military spender as a share of the economy in the past decade. Now, détente between the neighbors offers Prime Minister George Papandreou a route to squeeze extra savings from his country’s army. Papandreou hosts Turkish premier Recep Tayyip Erdogan , who may also want to cut military spending, in Athens today. Matching cuts from strategic rival Turkey would help Greece make the reduction in military expenditures it pledged in return for $139 billion of International Monetary Fund and European Union loans to stave off a debt default . Greece has spent 50 billion euros ($63 billion) on the military in the past decade, with the budget rising each year since 2003 as the army added fighter jets, submarines and tanks. They are mostly for defense against Turkey: the two NATO members came close to war over territorial rights in the Aegean in 1996, and though ties have improved their pilots regularly engage in mock dogfights above its waters. A Greek pilot was killed in 2006 after colliding with a Turkish plane. Turkey and Greece “are allies not competitors” and “we might together decide to reduce the defense allocation of our respective budgets,” said Egemen Bagis , Turkey’s minister for EU membership negotiations, in an interview in Istanbul late yesterday before departing for Athens. He declined to say whether the two premiers will agree on such cuts today. Erdogan told Greece’s state-run NET television last night that both countries have “very high defense spending.” Unarmed Flights “We can reduce this spending and divert this money away from the weapons industry to other areas,” he said. As an initial step toward disarmament, Erdogan proposed that fighter planes from both countries flying over the Aegean should take off unarmed. Papandreou has to slash the budget deficit to 3 percent of gross domestic product by 2014, from last year’s 13.6 percent to meet its commitments to the IMF and EU. Concern that he won’t be able to meet that target sent yields on 10-year Greek debt to 12.4 percent last week, before European central banks started buying the bonds of indebted EU nations after agreeing to a $1 trillion bailout. Yields rose 28 basis points to 7.64 percent at 12:55 p.m. in Athens today. “It’s inevitable to try to find a way with Turkey to limit defense equipment expenditures on both sides of the Aegean,” said Yannos Papantoniou , Greece’s finance minister from 1994 till 2001 and defense minister for the next two years. One way is for Erdogan and Papandreou to build “a better political understanding,” he said. Education, Not Arms Erdogan met Greek President Karolos Papoulias after arriving in Athens today. He’s accompanied on the trip by 10 Cabinet ministers who’ll attend a joint meeting with their Greek counterparts later today. Greek military spending was 3.6 percent of gross domestic product in 2008, the EU’s highest, and the country with a population of 11 million was the world’s fifth-biggest weapons importer between 2005 and 2009, according to the Stockholm International Peace Research Institute. Beneficiaries of the spending include Duesseldorf-based steelmaker and shipbuilder ThyssenKrupp AG, which is supplying submarines for the Greek navy under a contract worth more than 2.5 billion euros ($3.2 billion). Greece fell behind on payments to the company last year. Turkey’s population is 72 million and its 600,000-strong army is the second-biggest in the North Atlantic Treaty Organization after the U.S. Turkey’s Finance Ministry says defense spending will be about $10 billion this year, or 1.5 percent of GDP. SIPRI, whose estimates are typically higher than government figures, says it was 2.1 percent of GDP in 2007. No Peace Dividend “The conflict with Turkey has been overwhelmingly the thing that’s been keeping Greek military spending as a share of GDP and the arms purchases high” since the Cold War ended, said Sam Perlo-Freeman , head of SPIRI’s military expenditure project. “In the rest of Europe it’s been for the most part completely flat or declining over the last 10 years.” Papandreou has announced defense savings of about 500 million euros this year. The cuts were visible on March 25, Greece’s independence day, when celebrations lacked the usual tank parades and air displays. For Erdogan, cutting military spending may help curb the political influence of Turkey’s army, which has ousted four governments since 1960. Throughout a seven-year premiership Erdogan has clashed with generals who view his Islamist-rooted party as a threat to Turkey’s secular system. Coup Plot Trial Dozens of military officers are facing trial on charges of plotting to oust Erdogan. Prosecutors say the plan involved attacks on non-Muslim minorities and provoking Greece into shooting down a Turkish plane, to destabilize Erdogan’s government. “If they can strike some kind of deal with the Greeks, it would help Erdogan increase leverage over the military,” said Wolfango Piccoli , an analyst at the New York-based Eurasia Group, which measures political risk. It will take time because “with military spending the cutting needs to be gradual, it can’t be done overnight.” Turkey keeps about 30,000 troops on Cyprus since a 1974 invasion to reverse a coup by supporters of union with Greece. In 1996 Turkey and Greece exchanged threats over ownership of uninhabited rocks in the Aegean. Other disputes include definitions of airspace and territorial waters. “There is more or less a consensus in this country that there is a challenge, a threat from Turkey,” making some areas of the military budget hard to cut, said Thanos Dokos , the director of the Hellenic Foundation for European and Foreign Policy in Athens. Still, “the Greek armed forces were in need of an overhaul in spite of the crisis,” Dokos said. “The crisis will be an opportunity to trim them down.” To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net ; Ben Holland in Istanbul at bholland1@bloomberg.net .

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National Bank of Greece Is Pick of Analysts Who Say Country Won’t Default

May 3, 2010

By Niklas Magnusson May 3 (Bloomberg) — National Bank of Greece SA , the worst performer on Bloomberg’s index of European financial stocks this year, is a favorite of analysts, who say those betting on a Greek default have got it wrong. National Bank gained 24 percent in three days last week as the European Union and International Monetary Fund worked out a 110 billion-euro ($146 billion) rescue for Greece. Yesterday, officials said the bailout would include a 10 billion-euro fund to make sure Greek banks stay adequately capitalized. “Greece won’t default on its debt, not at all, and while Greek bonds and stocks have been hammered, the banks can recover,” said Vassilios Vlastarakis , an analyst at Beta Securities in Athens who rates National Bank “overweight.” “Greek banking stocks will thrive over the next two to three years.” National Bank received “buy” ratings from 68 percent of analysts since the start of 2010, data compiled by Bloomberg show, even as the stock fell 32 percent in Athens trading. Only five of the 52 companies on the Bloomberg Europe Banks and Financial Services Index got higher marks. Beta predicts National Bank will climb to 19 euros from 12.35 euros, where it closed in Athens trading on April 30. Should bad loans show a larger increase than Beta estimates in the first quarter, the broker may cut its rating to “equal- weight,” Vlastarakis said. National Bank trades at 0.84 times book value , compared with 1.16 times for Oslo-based DnB NOR ASA , the European bank rated highest by analysts, and 0.96 times for the Bloomberg Europe banking index. Turkish Profits Greece’s largest bank may weather the crisis in part because of its unit in Turkey, which accounted for 46 percent of the Athens-based company’s profit in 2009. While National Bank had a net loss of 194 million euros in Greece in the fourth quarter, earnings in Turkey amounted to 93 million euros. The Turkish unit is its “most valuable asset right now,” Vlastarakis said. Nikos Koskoletos , an analyst at EFG Eurobank Ergasias SA, raised his rating on National Bank to “buy” from “hold” on April 21, saying in a note to clients that the bank’s liquidity and margins will underpin its profit before provisions. Eurobank has a 17.9-euro share-price estimate on National Bank. Founded in 1841, the company operates in Turkey through its Finansbank unit, and also has units in Albania, Bulgaria, Cyprus, Egypt, Romania and Serbia. An “extended geographic footprint outside Greece is also deemed as positive,” Koskoletos said in the note. Cut to Junk Standard & Poor’s lowered Greece’s credit rating below investment grade on April 27, and cut National Bank , EFG Eurobank, Alpha Bank and Piraeus Bank SA to junk as well. The rating company said the banks are at risk because of their holdings of government bonds. Asset quality and profitability will remain under pressure as the economy shrinks and drives up loan losses, S&P said. The extra yield that investors demand to hold Greek debt over German bunds surged to 826 basis points on April 28 after the S&P rating cut. It eased to 594 points on April 30 as signs of an agreement emerged. The Portuguese spread jumped to the most since at least 1997 last week and the premium on Spain climbed to the highest since March 2009. European policymakers are trying to avoid a Greek debt restructuring and stamp out signs of a contagion. The bailout will give Greece time to fix its budget before returning to the market to borrow, which it wants to do “as soon as possible,” Finance Minister George Papaconstantinou said in Athens yesterday. Bank Support Fund Greece’s fiscal deficit stood at 13.6 percent of gross domestic product last year, the EU’s statistics office said last week, higher than the government’s April 7 estimate of 12.9 percent. Greece agreed to budget cuts of 30 billion euros, or 13 percent of GDP, including wage reductions and a three-year freeze on pensions, Papaconstantinou said yesterday. Greece’s main sales tax rate will rise to 23 percent from 21 percent. The Greek bailout includes a support fund for domestic banks, which are likely to face mounting bad loans as the economy contracts, officials from the EU and IMF said yesterday. The objective “will be to ensure that the Greek banks are well capitalized at all times,” Servaas Deroose , deputy director general of the European Commission’s economic and financial affairs department, said yesterday. “The Greek banking system is actually quite well capitalized,” said Poul Thomsen , the IMF European Department deputy director. “But clearly, with this dramatic program, the contraction in nominal GDP, we do expect to see an increase in non-performing loans.” Of the 25 analysts covering National Bank, 17 have “buy” ratings, four advise holding the stock and four counsel selling. The company had a fourth-quarter net loss of 87 million euros on higher loan-loss provisions. To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

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Papandreou Says Greece’s Survival at Stake in Talks on $159 Billion of Aid

April 30, 2010

By Maria Petrakis and Natalie Weeks April 30 (Bloomberg) — Greek Prime Minister George Papandreou said the nation’s survival was at stake in talks to win a potential $159 billion European Union-led bailout that included budget cuts denounced by unions as “savage.” “Now, today, immediately, what is at stake is the survival of the nation,” Papandreou said in parliament in Athens today. “This is the ‘red line.’” He said talks with the EU and International Monetary Fund were “tough,” with his government resisting “not in the street with rocks, but in negotiations.” Greek stocks rose and the euro strengthened as an EU spokesman said an agreement on the rescue package could come as soon as tomorrow. Signs of the accord that may require 24 billion euros ($32 billion) in austerity measures ended a bond market selloff across Europe this week. Moody’s Investors Service said yesterday Greece was vulnerable to a “multi- notch” downgrade if measures don’t go far enough. Greece’s fiscal crisis rippled through Europe this week, sending the euro to its lowest in a year after Germany’s reluctance to approve emergency funds sparked a drop in Greek bonds and Standard & Poor’s cut the country’s credit rating to below investment grade. S&P followed its Greek downgrade with cuts for Portugal and Spain. Papandreou’s budget cuts may include a three-year wage freeze for public workers and eliminating two of their 14 annual salary payments, the ADEDY union said. Greece’s NET Radio reported that cuts could amount to 10 percentage points of gross domestic product. The deficit was 13.6 percent of GDP in 2009. ‘Unprovoked Attack’ “We find ourselves before the most savage, unprovoked and unjust attack,” Spyros Papaspyros , head of the ADEDY civil servants union, said in Athens late yesterday after meeting Papandreou. “The answer will be given in the street.” The pending wage cuts will overshadow tomorrow’s annual Labor Day celebrations, usually marked by rallies and picnics, which unions called on Greeks to join before the “coming storm.” The slogan is: “The Croesus-es should pay for the crisis,” a reference to the ancient king renowned for his wealth. Public transport will be halted between 5 a.m. and 7 a.m. “It’s a tall order to assume that Greeks will be convinced because for years they have been used to getting a different type of treatment from their governments,” said Michael Massourakis , chief economist at Alpha Bank, the country’s third largest, in a telephone interview. “Papandreou doesn’t have the luxury of choosing the context or pace of the adjustment.” Weekend Meeting Shopkeepers plan to shut their stores on May 5, joining a strike organized by the GSEE union, the nation’s biggest. European governments are speeding up efforts to finalize a rescue package after the Greek crisis threatened to spread through the rest of Europe this week. French Finance Minister Christine Lagarde said euro-region officials will probably hold talks this weekend after European Central Bank President Jean- Claude Trichet yesterday said policy makers must create a “sense of direction” to help overcome the fiscal crisis. Signs of a renewed drive to tackle the crisis sparked a 7 percent rally in Greece’s ASE benchmark general index yesterday, with National Bank of Greece jumping 30 percent in the past three days. It was up 0.7 percent at 2 p.m. in Athens. The yield on Greek 10-year government bonds, which surged to 11.406 percent on April 28, was at 9.07 percent. The euro gained 0.6 percent against the dollar to $1.3315. Stuck Papandreou is stuck between investors, who want faster deficit cuts, and voters and unions, who are already chafing from existing austerity measures. Elected in October on pledges to raise wages for public workers, Papandreou has been forced to cut salaries, curb spending and raise taxes to reduce a deficit that was more than four times the EU’s limit last year. Other deficit-cutting steps include increasing sales tax and raising the cap on the number of workers who can be fired to 4 percent from 2 percent, Kathimerini newspaper said, without saying where it got the information. Greeks may also be shifting money out of the country in the face of higher taxes and more austerity measures. Deposits in Greek banks fell for a third month in March, leading to a 4.5 percent drop in the first quarter. That coincided with a fourth monthly increase in deposits held in Cyprus by local branches of Greek banks on the island. Political Risks Voters’ anger about further cuts has been partly focused on the IMF and the political risks facing Papandreou are highlighted by the lender’s most recent involvement in Europe. In Hungary, the first EU member to turn to the Washington- based lender, voters this month ousted the ruling Socialist party two years after it accepted a bailout. Fiscal conditions attached to the $27 billion loan exacerbated the country’s recession as unemployment soared to a record, souring support for the government. Sixty-five percent of Greek voters polled by researcher Alco for the Proto Thema newspaper last week said Papandreou must reject any measures that lead to more wage and pension cuts. Papandreou, who said last week that his country faces a “new Odyssey,” will now have to convince voters that they don’t have a choice, said Alpha Bank’s Massourakis. Even after a bond-market rally, Greece must pay 11.741 percent to borrow for two years. Germany pays 0.79 percent. “It’ll be difficult, but at end of the day people will realize that these are necessary because the country doesn’t have access to borrowing anymore,” he said. To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net Natalie Weeks in Athens at nweeks2@bloomberg.net

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Apple’s IPad Holds Appeal for Some Consumers, Leaves Others Wanting More

April 3, 2010

By Arik Hesseldahl and Connie Guglielmo April 3 (Bloomberg) — Lucas Paraskeva traveled to New York from Nicosia, Cyprus, to be one of the first consumers to get his hands on an iPad, the tablet-style computer from Apple Inc. that goes on sale at 9 a.m. in New York today. “It will be the gadget of the year,” Paraskeva, 29, a computer programmer, said yesterday outside the Apple store on Fifth Avenue in Manhattan, as employees set up barriers to control crowds expected to line up for the $499 device. Paraskeva and his girlfriend Maria Agroti will be among the consumers who are projected by Piper Jaffray & Co. analyst Gene Munster to buy 200,000 to 300,000 iPads this weekend. With the iPad, Apple bets it can succeed where rivals such as Microsoft Corp. failed: building a following for a device that’s bigger than a mobile phone, yet has fewer features than a laptop. Analysts at iSuppli Corp. say Cupertino, California-based Apple may sell 7.1 million iPads globally this year, driven in part by “early adopters.” Users can surf the Internet, peruse digital books, watch video and play games on the iPad. It doesn’t have a built-in camera or support Adobe Systems Inc. ’s Flash software, used to watch much of the video on the Web. The device also lacks features that let users carry out multiple tasks at once. “The iPad’s attractive design, compelling applications and multitouch capability, key components of Apple Inc. ’s past successes, will help to offset the initial omission of Adobe Flash from the device,” El Segundo, California-based iSuppli said yesterday in a statement. ‘Going to Wait’ Jason Herbert, a restaurant owner from Rochester, New York, is eager to buy one. “It will be really cool,” Herbert, 39, said yesterday outside the Fifth Avenue store . His friend, Dan Bresnan, has yet to be won over. “The first version doesn’t have things that I might want, like the ability to multitask,” said Bresnan, 40, a car salesman in Rochester. “I’m going to wait.” Reviewers who tested the iPad praised its ability to deliver digital books and video quickly and said it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Apple is trying to remake the tablet — a thin, handheld computer that’s essentially a big screen without a physical keyboard. Also known as slate computers, tablets have been available since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. Apps The iPad’s success will depend partly on the attractiveness of applications that run on it. As consumers weighed whether to brave crowds at stores or awaited home delivery of iPads ordered ahead of time, television networks, game makers, and newspaper publishers unveiled iPad friendly versions of their products. CBS Corp., owner of the most-watched U.S. TV network, said April 1 it will offer episodes of shows such as “Survivor” and “CSI.” Walt Disney Co . will release iPad applications for ABC TV shows and ESPN games. Netflix Inc. , the movie-rental company, said yesterday that members will be able to instantly watch programming streamed to the iPad. Apple declined to comment, said Natalie Kerris , a spokeswoman for the company. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed yesterday for Good Friday. IPhone Redux? The iPad will again test Apple’s ability to conquer new markets. Since returning to the company in 1997, Chief Executive Officer Steve Jobs revived the Macintosh computer business, reshaped digital music with the iPod and used the iPhone to push Apple into mobile telephony. Gains in those areas have propelled Apple revenue and profit to records . First weekend sales will give an early sign whether the iPad can replicate previous hits. Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York, projects sales of 300,000 to 400,000 iPads for today and tomorrow combined. That compares with the 270,000 iPhones sold in the first weekend after its 2007 debut. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. At the outset, iPads will connect to the Web though localized hot spots that feature Wi-Fi technology. Yisrael Frenkel, a business analyst, said he will wait until later this month, when Apple starts selling a version that runs on AT&T Inc. ’s third-generation wireless network. “I’ll use it for e-mail and for graphics and photos,” said Frenkel, 33. With the 3G version, “wherever you are you can get on the Net, and get e-mail and get things done.” To contact the reporter on this story: Arik Hesseldahl in New York at arik_hesseldahl@businessweek.com Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net Amy Thomson in New York at athomson6@bloomberg.net

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Apple’s IPad Holds Appeal for Some Consumers, Leaves Others Wanting More

April 3, 2010

By Arik Hesseldahl and Connie Guglielmo April 3 (Bloomberg) — Lucas Paraskeva traveled to New York from Nicosia, Cyprus, to be one of the first consumers to get his hands on an iPad, the tablet-style computer from Apple Inc. that goes on sale at 9 a.m. in New York today. “It will be the gadget of the year,” Paraskeva, 29, a computer programmer, said yesterday outside the Apple store on Fifth Avenue in Manhattan, as employees set up barriers to control crowds expected to line up for the $499 device. Paraskeva and his girlfriend Maria Agroti will be among the consumers who are projected by Piper Jaffray & Co. analyst Gene Munster to buy 200,000 to 300,000 iPads this weekend. With the iPad, Apple bets it can succeed where rivals such as Microsoft Corp. failed: building a following for a device that’s bigger than a mobile phone, yet has fewer features than a laptop. Analysts at iSuppli Corp. say Cupertino, California-based Apple may sell 7.1 million iPads globally this year, driven in part by “early adopters.” Users can surf the Internet, peruse digital books, watch video and play games on the iPad. It doesn’t have a built-in camera or support Adobe Systems Inc. ’s Flash software, used to watch much of the video on the Web. The device also lacks features that let users carry out multiple tasks at once. “The iPad’s attractive design, compelling applications and multitouch capability, key components of Apple Inc. ’s past successes, will help to offset the initial omission of Adobe Flash from the device,” El Segundo, California-based iSuppli said yesterday in a statement. ‘Going to Wait’ Jason Herbert, a restaurant owner from Rochester, New York, is eager to buy one. “It will be really cool,” Herbert, 39, said yesterday outside the Fifth Avenue store . His friend, Dan Bresnan, has yet to be won over. “The first version doesn’t have things that I might want, like the ability to multitask,” said Bresnan, 40, a car salesman in Rochester. “I’m going to wait.” Reviewers who tested the iPad praised its ability to deliver digital books and video quickly and said it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Apple is trying to remake the tablet — a thin, handheld computer that’s essentially a big screen without a physical keyboard. Also known as slate computers, tablets have been available since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc. Apps The iPad’s success will depend partly on the attractiveness of applications that run on it. As consumers weighed whether to brave crowds at stores or awaited home delivery of iPads ordered ahead of time, television networks, game makers, and newspaper publishers unveiled iPad friendly versions of their products. CBS Corp., owner of the most-watched U.S. TV network, said April 1 it will offer episodes of shows such as “Survivor” and “CSI.” Walt Disney Co . will release iPad applications for ABC TV shows and ESPN games. Netflix Inc. , the movie-rental company, said yesterday that members will be able to instantly watch programming streamed to the iPad. Apple declined to comment, said Natalie Kerris , a spokeswoman for the company. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed yesterday for Good Friday. IPhone Redux? The iPad will again test Apple’s ability to conquer new markets. Since returning to the company in 1997, Chief Executive Officer Steve Jobs revived the Macintosh computer business, reshaped digital music with the iPod and used the iPhone to push Apple into mobile telephony. Gains in those areas have propelled Apple revenue and profit to records . First weekend sales will give an early sign whether the iPad can replicate previous hits. Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York, projects sales of 300,000 to 400,000 iPads for today and tomorrow combined. That compares with the 270,000 iPhones sold in the first weekend after its 2007 debut. Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. At the outset, iPads will connect to the Web though localized hot spots that feature Wi-Fi technology. Yisrael Frenkel, a business analyst, said he will wait until later this month, when Apple starts selling a version that runs on AT&T Inc. ’s third-generation wireless network. “I’ll use it for e-mail and for graphics and photos,” said Frenkel, 33. With the 3G version, “wherever you are you can get on the Net, and get e-mail and get things done.” To contact the reporter on this story: Arik Hesseldahl in New York at arik_hesseldahl@businessweek.com Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net Amy Thomson in New York at athomson6@bloomberg.net

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Apple’s IPad Sales to Begin, With Some Wanting More From `Gadget of Year’

April 2, 2010

By Arik Hesseldahl and Connie Guglielmo April 2 (Bloomberg) — Lucas Paraskeva traveled to New York from Nicosia, Cyprus, to be one of the first consumers to get his hands on an iPad, the tablet-style computer from Apple Inc. that goes on sale tomorrow. “It will be the gadget of the year,” Paraskeva, 29, a computer programmer, said outside the Apple store on Fifth Avenue in New York, where employees were setting up barriers to control the throngs expected to line up for the $499 device. Paraskeva and his girlfriend Maria Agroti will be among the 200,000 to 300,000 consumers projected by Piper Jaffray & Co. analyst Gene Munster to buy an iPad this weekend. With the iPad, Apple bets it can succeed where rivals such as Microsoft Corp. failed: building a following for a device that’s bigger than a mobile phone, yet has fewer features than a laptop. Analysts at iSuppli Corp. say Cupertino, California-based Apple may sell 7.1 million iPads globally this year, driven by “early adopters” and users drawn by its “touch-screen-based interface.” Users can surf the Web, peruse digital books, watch video and play games on the iPad. It doesn’t have a built-in camera or support Adobe Systems Inc. ’s Flash software, used to watch much of the video on the Web. It also lacks features that let users carry out multiple tasks at once. “The iPad’s attractive design, compelling applications and multitouch capability, key components of Apple Inc. ’s past successes, will help to offset the initial omission of Adobe Flash from the device,” El Segundo, California-based iSuppli said today in a statement. ‘Going to Wait’ Jason Herbert, a restaurant owner from Rochester, New York, is eager to buy an iPad. “It will be really cool,” Herbert, 39, said outside the Fifth Avenue store . His friend, Dan Bresnan, has yet to be won over. “The first version doesn’t have things that I might want, like the ability to multitask,” said Bresnan, 40, a car salesman in Rochester. “I’m going to wait.” Reviewers who tested the iPad praised its ability to deliver digital books and video quickly and said it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.” Apple is trying to remake the tablet — a thin, handheld computer that’s essentially a big screen without a physical keyboard. Also known as slate computers, tablets have been available since the 1990s, without ever catching on. They currently account for less than 1 percent of the personal- computer market, according to research firm Gartner Inc. Apps The iPad’s success will depend partly on the attractiveness of applications that run on it. As consumers weighed whether to brave crowds at stores or awaited home delivery of iPads ordered ahead of time, television networks, game makers, and newspaper publishers unveiled iPad friendly versions of their products. CBS Corp., owner of the most-watched U.S. TV network, will offer episodes of shows such as “Survivor” and “CSI.” Walt Disney Co . will release iPad applications for ABC TV shows and ESPN games. Netflix Inc. , the movie-rental company, said today that members will be able to instantly watch programming streamed to the iPad. The Wall Street Journal and Discovery Communications’ MythBusters also announced versions of their programs tailored for the new device. Apple declined to comment, said Natalie Kerris , a spokeswoman for the company. Apple , which has more than doubled in the past year, rose 97 cents to close at a record $235.97 yesterday in Nasdaq Stock Market trading. U.S. markets are closed today for Good Friday. To contact the reporter on this story: Arik Hesseldahl in New York at arik_hesseldahl@businessweek.com Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net Amy Thomson in New York at athomson6@bloomberg.net

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Eastern Europe, Central Asia Lead Global Stock Rally From Post-Lehman Low

March 9, 2010

By Bloomberg News March 9 (Bloomberg) — Eastern European and Central Asian equity markets led gains in the year since global stocks sank to their lowest level after the bankruptcy of Lehman Brothers Holdings Inc. The Ukrainian Equities Index has surged more than fourfold since March 9 last year when global and U.S. benchmark indexes slid to lows. That’s the biggest gain among 93 global stock measures tracked by Bloomberg. Gauges in Kazakhstan, Romania, Russia, Hungary, Estonia and Cyprus have more than doubled. “Emerging markets have gotten over a bad bout of flu and are well on their way to recovery,” said Shane Oliver , Sydney- based head of investment strategy at AMP Capital Investors, which oversees about $90 billion. “For developed markets, the cancer has gone into remission.” The MSCI World Index , which tracks developed markets, has gained 70 percent since March 9 last year, when it sank to the lowest level in more than 13 years. Stocks had plunged worldwide after Lehman Brothers’ bankruptcy filing in September 2008 triggered panic in financial markets and pushed the global economy toward recession. The Standard & Poor’s 500 Index has advanced 68 percent in the past 12 months. Emerging markets are likely to perform better than those in developed nations given better growth prospects, Oliver said. Sri Lanka’s Colombo All-Share Index surged 135 percent in the past year with the end of the island’s civil war. Argentina’s Merval Index and Turkey’s ISE National 100 Index were also among the top 10 gainers. Skyworth Rallies Hong Kong-listed Skyworth Digital Holdings Ltd. , which sells color televisions in China, has surged more than 12-fold in the past year as China sought to boost consumer spending by giving rebates for household appliance purchases by residents in rural areas. Skyworth is the best gainer on the MSCI Emerging Markets Index and the MSCI Asia Pacific Index. Stock measures in Slovakia, Ecuador and Bahrain had the biggest declines in the past year. Acom Co., Japan’s third- largest consumer lender by market value, is the worst performer on the MSCI Asia Pacific Index. Its stock has declined 46 percent as profit plunged 92 percent in the nine months ended Dec. 31, after the company reduced loans and cut jobs to cope with tougher lending laws. — Chua Kong Ho . Editors: Reinie Booysen , Richard Frost To contact the Bloomberg News staff on this story: Chua Kong Ho in Shanghai at Kchua6@bloomberg.net

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Eastern Europe, Central Asia Lead Equities in Year Since Post-Lehman Low

March 9, 2010

By Bloomberg News March 9 (Bloomberg) — Eastern European and Central Asian equity markets led gains in the year since global stocks sank to their lowest level after the bankruptcy of Lehman Brothers Holdings Inc. The Ukrainian Equities Index has surged more than fourfold since March 9 last year when global and U.S. benchmark indexes slid to lows. That’s the biggest gain among 93 global stock measures tracked by Bloomberg. Gauges in Kazakhstan, Romania, Russia, Hungary, Estonia and Cyprus have more than doubled. “Emerging markets have gotten over a bad bout of flu and are well on their way to recovery,” said Shane Oliver , Sydney- based head of investment strategy at AMP Capital Investors, which oversees about $90 billion. “For developed markets, the cancer has gone into remission.” The MSCI World Index , which tracks developed markets, has gained 70 percent since March 9 last year, when it sank to the lowest level in more than 13 years. Stocks had plunged worldwide after Lehman Brothers’ bankruptcy filing in September 2008 triggered panic in financial markets and pushed the global economy toward recession. The Standard & Poor’s 500 Index has advanced 68 percent in the past 12 months. Emerging markets are likely to perform better than those in developed nations given better growth prospects, Oliver said. Sri Lanka’s Colombo All-Share Index surged 135 percent in the past year with the end of the island’s civil war. Argentina’s Merval Index and Turkey’s ISE National 100 Index were also among the top 10 gainers. Skyworth Rallies Hong Kong-listed Skyworth Digital Holdings Ltd. , which sells color televisions in China, has surged more than 12-fold in the past year as China sought to boost consumer spending by giving rebates for household appliance purchases by residents in rural areas. Skyworth is the best gainer on the MSCI Emerging Markets Index and the MSCI Asia Pacific Index. Stock measures in Slovakia, Ecuador and Bahrain had the biggest declines in the past year. Acom Co., Japan’s third- largest consumer lender by market value, is the worst performer on the MSCI Asia Pacific Index. Its stock has declined 46 percent as profit plunged 92 percent in the nine months ended Dec. 31, after the company reduced loans and cut jobs to cope with tougher lending laws. — Chua Kong Ho . Editors: Reinie Booysen , Richard Frost To contact the Bloomberg News staff on this story: Chua Kong Ho in Shanghai at Kchua6@bloomberg.net

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GM Names Microsoft’s Liddell CFO to Shake Up `Inbred’ Finance Department

December 21, 2009

By David Welch Dec. 21 (Bloomberg) — General Motors Co. , reaching outside the auto industry for a new chief financial officer, hired Microsoft Corp. ’s Chris Liddell as vice chairman and CFO. Liddell, 51, takes his new post effective Jan. 1, GM said in a statement today. Liddell, whose plan to leave Microsoft was announced Nov. 24, succeeds CFO Ray Young , who becomes GM’s vice president of international operations on Feb. 1. The move helps Chairman and Chief Executive Officer Ed Whitacre shore up a financial operation criticized by the Treasury’s auto task force. Hiring a CFO new to Detroit-based GM also extends Whitacre’s imprint on management since becoming CEO on Dec. 1 when the board ousted Fritz Henderson . “It had to be an outsider,” said Maryann N. Keller , a senior adviser at consultant Casesa Shapiro Group LLC in New York. “GM’s finance department was too inbred.” Liddell, a New Zealand native, joined Microsoft in 2005 and was the first outsider to be named finance chief in more than two decades. He oversaw $3 billion of expense reductions in the past fiscal year, including Microsoft’s first companywide job cuts, and its first bond offering. Liddell was previously CFO at International Paper Co. , the largest U.S. maker of cardboard shipping boxes, and was CEO at Carter Holt Harvey Ltd., then New Zealand’s second-largest public company. ‘Depth and Experience’ “Chris brings a depth and experience to this job that were unmatched,” Whitacre said in the statement. “Chris will lead our financial and accounting operations on a global basis and will report directly to me.” Like Whitacre, the former AT&T Inc. chairman and CEO who was named in June to lead a revamped GM board, Liddell comes to Detroit without a background in the auto industry. He will have to rebuild a finance group thinned by cost cuts and voluntary departures as staff members jumped to other jobs during GM’s slide toward a June 1 bankruptcy filing. While at Microsoft, Liddell played a crucial role in the Redmond, Washington-based company’s failed bid to acquire Yahoo! Inc. last year. He worked earlier in his career as an investment banker as managing director and joint CEO for CS First Boston NZ Ltd. GM’s new board includes three directors with private-equity experience. Microsoft didn’t disclose Liddell’s plans when saying last month that he would leave on Dec. 31. The week before that announcement, people familiar with GM’s CFO recruiting said the field had been narrowed to two finalists. Whitacre’s Imprint Henderson’s exit meant that the hiring was completed by Whitacre, who has been reshaping the team put in place by his predecessor when GM left Chapter 11 in July. On Dec. 4, Whitacre picked new North American and European presidents and moved Vice Chairman Bob Lutz to be an adviser for design and product development. Whitacre gave some of Lutz’s marketing duties to Susan Docherty , who was promoted to vice president of sales, service and marketing from U.S. sales chief. Two of Docherty’s three general managers for GM brands also were replaced this month. The new assignment for Young, 47, was announced Dec. 14. Stronger financial controls will be pivotal as GM works to end losses of at least $88 billion from 2004 until its June 1 bankruptcy filing. GM said Nov. 16 that it generated $3.3 billion in cash in the third quarter while losing $1.15 billion. ‘Weakest Finance Operation’ The automaker may have had the “weakest finance operation any of us had ever seen in a major company,” Steven Rattner , the former chief adviser to the task force that reorganized GM in a 40-day bankruptcy, said in an article in Fortune magazine in October. GM reorganized its accounting department in 2006 by consolidating the controller and chief accounting officer jobs under Nicholas Cyprus . The changes came after GM that year restated results back to 2000 and earlier said it found flaws in annual regulatory reports for 2006, 2005 and a revised 2004 filing. “This is not the company that Alfred Sloan and Donaldson Brown invented,” said consultant Keller, referring to the former GM chairman and vice chairman who established modern financial practices for large corporations. Financial History GM’s missteps in recent decades included “decisions like getting into the mortgage business or buying into Fiat or buying Saab,” Keller said. “They stifled investment in North America. They borrowed money to pay a dividend . The pure financial management of this company has been bumbling and incompetent.” Young became CFO in March 2008, succeeding Henderson, after four months as group vice president for finance. People familiar with the matter said in September that Young was likely to leave his post, and a month later he was said to probably be bound for international operations. He joined GM in 1986. Early repayments of $7.84 billion in U.S. and Canadian government loans and preparing for an initial public offering add to Liddell’s challenges as CFO. GM said Dec. 18 that it returned $1 billion to the U.S. Treasury, the first installment on $6.7 billion in federal borrowing due in July 2015, and $192 million to Export Development Canada. Those moves came three days after Whitacre set a target of completing the payments by the end of June. An IPO may be held in next year’s second half, according to GM, which is 61 percent owned by the U.S. government. The other stakes are held by a United Auto Workers retiree trust; the governments of Canada and Ontario; and the remnants of GM’s bankrupt predecessor, now known as Motors Liquidation Co. To contact the reporter on this story: David Welch in Southfield, Michigan, at david_welch@businessweek.com

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ECB Said to Weigh Switching to Adjustable Interest Rate on 12-Month Loans

November 25, 2009

By Jana Randow and Gabi Thesing Nov. 25 (Bloomberg) — European Central Bank officials are debating whether to put an adjustable interest rate on December’s 12-month loans, with some saying it risks being interpreted as a signal they will tighten monetary policy in 2010, according to people familiar with the discussions. As the ECB moves closer to withdrawing emergency support for the economy, officials are examining whether to make the rate on next month’s loans track any increase in the bank’s key rate. While a final decision hasn’t been made, the 22-member Governing Council is leaning toward sticking with a fixed rate of 1 percent, said the people, who declined to be identified because the discussions are private. The ECB is offering banks unlimited funds for 12 months as part of its strategy to get them lending again. Some officials fear putting a floating rate on the loans would prematurely fuel expectations that the ECB will lift its benchmark rate from 1 percent next year, which could in turn raise the cost of money on markets and propel the euro higher. The risk of lending at a fixed rate is that it may undermine the effect of any increase in the benchmark should the ECB deem it necessary. Altering the rate “is always going to be interpreted as a signal for future monetary policy,” said Laurent Bilke , an economist at Nomura International in London who used to work at the ECB. “The only way to avoid that problem is to continue as they have been doing.” An ECB spokeswoman declined to comment. No Signal Policy makers have already agreed that the December 12- month tender will be the last, even though some wanted to retain the option of using the tool again. The bank may also reduce the frequency of its three-month and six-month tenders next year to one of each per quarter, one of the people familiar with the deliberations said. While scaling back lending operations is the first step in the ECB’s exit strategy, officials don’t want to signal rate increases are in any way imminent, the people said. At the same time, there are diverging views on the Governing Council over how long to leave the ECB’s expansionary policies in place. Executive Board member Juergen Stark said on Nov. 17 that the response to the crisis “should not sow the seeds for new imbalances,” and the ECB is “moving closer to phasing out our liquidity measures.” Others on the council, such as Athanasios Orphanides of Cyprus, are concerned that the economy is too weak to drive inflation back toward 2 percent, the ECB’s medium-term goal. Key Plank The central bank’s survey of professional forecasters shows inflation is expected to average 1.6 percent in 2011. The 12-month loans are one of the key planks in the ECB’s response to the financial crisis. They allow banks to borrow as much money as they want for a year at the benchmark rate. The ECB retained the option of adding a spread to the rate on the December loans, the third offering, which would help to limit demand. A spread is considered unlikely, the people said. Another option being examined is to tie the rate on the loans to market rates. Council members will probably reject that because it’s too complicated, the people said. Banks drew 75 billion euros ($112 billion) in September’s 12-month tender, down from 442 billion euros in the first tender in June, which was the highest amount ever allotted in an ECB refinancing operation. ‘I Exclude Nothing’ The 16-nation euro region emerged from its worst recession since World War II in the third quarter. Economists expect the ECB to raise its key policy rate in the third quarter of 2010, according a Bloomberg News survey. Under that scenario, if the ECB elected to lend the 12- month funds in December at a fixed 1 percent, banks would have cash for at least three months at a cheaper rate than the ECB’s key rate. ECB President Jean-Claude Trichet said this week he’ll give details on the next tranche of 12-month loans after the bank’s Dec. 3 policy meeting in Frankfurt. “We will decide on whether or not we will have indexed rates or fixed rates like we did before,” he said in Madrid. “I exclude nothing.” To contact the reporters on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net ; Gabi Thesing in Frankfurt at gthesing@bloomberg.net

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Competitive Technologies inks distribution deal for Greece and Cyprus

October 8, 2009

Competitive Technologies inks distribution deal for Greece and Cyprus

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Raymond J. Learsy: T.Friedman’s Take On "Wimps" and "The Cheese Eating Surrender Monkeys"

September 22, 2009

In his Sunday New York Times column, “Real Men Tax Gas” 09.20.09, Tom Freidman had admiring words commenting on the French. Drawing sharp contrast between Americans, designated as “wimps”, while the French are lauded for generating some eighty percent of their electricity from ‘clean’ nuclear power plants. In contrast it is pointed out that we haven’t built a nuclear facility since the Three Mile Island accident in 1979. The United States generates 20 percent of its electric energy through nuclear power whereas France’s electric grid quotient from ‘clean’ nuclear power is 80%. Friedman’s contention, that the paucity of our commitment to nuclear power combined by our lack of gumption to reduce our oil consumption through a gas tax or carbon tax, qualifies us as being wimps . This in sharp contrast to the likes of France, and as also cited in his column, Denmark. That we, in essence have become the “The Cheese Eating Surrender Monkeys.” But in making this broad brush judgment a key point is lost. The issue doesn’t simply attain to limiting fossil fuel consumption by significantly increasing gasoline taxes as Friedman suggests. It attains to something much more fundamental. France’s governance emanates from an elite corp of public servants, graduates of the “grands ecoles” who run the sinews of the Ministries of State. It has given France a government whose dedication and commitment to the general weal is keenly suited to a fiercely competitive world. Ours, by contrast is progressively dysfunctional, where the electorate has become increasingly powerless, neutered by moneyed and narrow constituencies whose parochial interests are served by an increasingly token government molded to do their bidding and override the general good with growing abandon. France, has a government with vision having the welfare of the general public foremost in its sights. Examples of its accomplishments in recent years has not only been a uniquely efficient power grid, but according to the World Heath Organization, France is first in the WHO’s ranking of world health systems. This while the United States lingers 37th in ranking (behind, with apologies, such as Malta, Morocco, Colombia, Cyprus, Costa Rica, and on. I’m sure you get the drift). In addition France has what is generally understood to be the most efficient high speed rail service in the world, with plans to expand it to the four corners of the nation (please see “High Speed Rail Speeding Ahead at Snail’s Pace” 09.03.09). This required years of planning and determination, the kind of vision that once, too many years ago, brought us to the moon. France’s high speed rail network is so successful that Guillaume Pepy, president of the French Rails, SNCF, would comment a year ago, that not building a four track high speed railway roadbed had been a mistake. Other than the lame Amtrak corridor in the northeast, which is only intermittently conducive to high speed travel, we have none. Further the French government’s priorities address lifestyle and quality of life issues in a dimension barely understood by those who govern us. Fully cognizant of the importance of Culture and Art in all its disciplines to the full life of its citizens, the French Government’s commitment is massive compared to ours wher our government grudgingly sets aside slightly in excess of $150 mm/year toward the budget of the National Endowment of the Arts (NEA). Were the budget of the NEA comparable to the budget of France’s Ministry of Culture on a pro rata basis, then the NEA’s budget would be approximately $9 billion. Yes, the mandates are not altogether the same, but the sums speak volumes. Culture is integral to the French government’s call for better ways to calculate a nation’s economic health. It is their contention, with the advent of the financial crisis, that a broader basis of measurement is called for. That the obsession with ‘gross domestic product’ needs be altered to include such factors as health care availability, leisure time, as well as environmental concerns triggered by over consumption. To quote France’s head of state, Nicolas Sarkozy, “The (financial) crisis doesn’t only make us free to imagine other models, another future, another world. It obliges us to do so.” The French government is also aware of the dramatic divergence between the earnings of the general workforce and the egregious excess of executive compensation, and those of bankers and traders who have brought the “free market” to the edge of ruin. Where we have been slow to act, the French government has reacted with vigor and focus setting forth tough rules and declaring clearly that those banks that do not abide by the new program limiting pay and establishing disclosure rules of bonus payments will be barred from the generally lucrative and supportive government mandates . To that end Sarkozy stated clearly and unequivocally, “We will not work with banks that do not apply the rules”. But lest this be considered a paean exclusively to French governance consider China. Here is a society with an elite corps of public servants. Only the best and the brightest from the very top schools gain access to what is today the almost ludicrously misnamed the “Communist Party”. As David Brooks, with aplomb and tongue in cheek , appropriately observed in a long ago brilliant New York Times Op-ed Column (“The Dictatorship of Talent”, 12.04.07), “Imagine the Harvard Alumni Association with an Army… this is a government of talents. It rules the way a wise father rules the family”. To further quote Brooks, “In the West there are tensions between government and business elites. In China these elites are part of the same social web, cooperating for mutual enrichment”. And by “mutual enrichment” he had the general good of the nation in view, not as here the “mutual enrichment” of Wall Street cronies. And how does that play out. I can report from personal experience. In 1980 I was in Beijing. I had organized the first sale of a cargo of American produced chemical fertilizer (diammonium phosphate -don’t ask) to mainland China . Beijing was a sea of bicycles, with a sea of mankind peddling away in Mao suits. Perhaps the tallest building in Beijing at the time was the Beijing Hotel whose access was restricted to foreigners and government authorized personnel. Fast forward thirty years later. China is a teeming landscape of modern cities, unruly traffic in spite of a purring infrastructure of roads and rail. In three decades 350 million people have been brought into the consumer class, an accomplishment of herculean dimensions. Yes there are issues of civil liberties and pollution. But these are being addressed. China is already lapping the United States on environmental technology and as to Mr. Friedman’s lament about America’s reticence to build nuclear power plants, know that China plans to build 25 by the year 2025. All this raises a much more fundamental question. Given our current structure of government and the way it functions, how are we going to compete, and to hold our own in years to come as we go head to head with societies that are far better equipped to deal with the exigencies of the future and the long term planning that is essential is to meeting the challenges ahead? We are hardly a nation of wimps. Sadly, we have a government that is barely functioning. We have a government class too readily looking after its own interests and those of their campaign paymasters, rather than the nation as a whole. This has not always been the case. The American people are and have shown themselves to be capable of extraordinary accomplishments throughout their history. But today, in this world given the leadership of other societies much needs be done to change the way we govern ourselves and the way our government functions.

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The end of Cyprus’ real estate boom

August 11, 2009

Latest news on the Cyprus property market. … Follow this link: The end of Cyprus' real estate boom

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