Archive for May, 2011

European court: Khodorkovsky’s rights violated

Tuesday, May 31st, 2011 | Finance News

PARIS – The European Court of Human Rights has ruled that Russian oil magnate Mikhail Khodorkovsky's rights were violated after his arrest in 2003 and ordered Russia to pay him euro24,000 ($35,000) in damages and court costs.

The court in Strasbourg, France, said Tuesday it found violations in the conditions Khodorkovsky faced in court and in a remand prison, the length of time he was held pending investigation and trial, and in procedural flaws related to his detention.

The court rejected Khodorkovsky's complaint that the prosecution against him was politically motivated.

Khodorkovsky — once Russia's richest man and seen as a political threat to Vladimir Putin — has been behind bars for nearly eight years.

A Moscow appeals court last week upheld his second conviction on charges of stealing oil from his own company.


Japan jobless rate rises, factory output anemic

Tuesday, May 31st, 2011 | Finance News

TOKYO – Japan's unemployment rate rose for the first time in six months in April and industrial production remained anemic after a record drop in the aftermath of March's earthquake and tsunami.

The twin disasters have already sent Japan's economy back into recession and Moody's Investors Service warned Tuesday it could downgrade Japan's sovereign credit rating due to the faltering economy and massive public debt.

The jobless rate edged up to 4.7 percent from 4.6 percent in March due to job losses in the retail and wholesale sectors, the Ministry of Internal Affairs and Communications said. The number of workers in those sectors dropped in April by 390,000 from a year earlier.

"A lot of part-time workers in the wholesale and retail sectors lost their jobs due to weak demand following the March tsunami," said Hiroshi Watanabe, economist at the Daiwa Institute of Research.

The number of workers in the hotel and restaurant businesses in April fell by 30,000 from a year earlier, underscoring a plunge in tourism following the March disasters and an ongoing crisis at a tsunami-crippled nuclear power plant.

Japan's industrial production — a key barometer of economic health — inched up 1 percent in April from the previous month after plunging a record 15.5 percent in March amid supply disruptions in the wake of the disasters.

The earthquake and tsunami killed more than 24,000 people and destroyed hundreds of factories in Japan's coastal northeast, forcing manufacturers such as Toyota Motor Corp. and Sony Corp. to suspend production.

Auto production alone plunged 60.1 percent in April from a year earlier because of manufacturing disruptions caused by parts shortages.

While overall April factory output fell short of a projected rise of 2.2 percent, the government said industrial production will pick up quickly in coming months, with a rise of 8 percent expected in May and another 7.7 percent in June.

"A slump in production after the March disasters hit the bottom in March and April, and a recovery in factory output, especially in the auto sector, is under way," said senior economist Hideki Matsumura at the Japan Research Institute.

The ministry said output in the transport machinery sector, which includes auto production, will surge 35.7 percent in May and 36.7 percent in June. Automakers have said domestic production is recovering fast as shortages of parts ease.

"Output at Japanese factories looked hopeless after the March earthquake. But supply conditions improved, and each company is making utmost efforts to recover from the disaster. A fast recovery underlined the strength of Japanese manufactures," said Watanabe, the Daiwa economist.

The Japan Automobile Manufacturers Association reported Tuesday that vehicle production in April totaled 292,001 vehicles, marking a dramatic drop from 731,829 vehicles a year earlier. It was the seventh straight month of year-on-year declines.

Japanese automakers have been forced to lower production in Japan, and aren't expecting to return to pre-disaster levels until later this year.

The ratio of job offers to job seekers in April fell to 0.61, meaning there were 61 jobs available for every 100 job seekers.

The government also said average spending by Japanese households in April declined 3 percent from a year earlier to 292,559 yen ($3,620).


Greece to draw new EU-IMF loan for reforms: report

Tuesday, May 31st, 2011 | Finance News

ATHENS (AFP) – Greece will receive a new loan from Europe and the International Monetary Fund in return for additional spending cuts and a faster rate of privatisations, a newspaper report said Tuesday.

Top-selling Ta Nea daily said Athens had concluded a deal with its 'troika' of creditors -- the EU, IMF and the European Central Bank -- that includes "a new loan", according to sources in Brussels.

Eleftherotypia daily said the new loan could be up to 60 billion euros ($86 billion) to enable Greece to meet its payments schedule from 2012 onwards.

In return, the government will make additional cuts of up to 10 percent to higher-paid civil servants and impose a stricter hiring procedure, only replacing one in ten job openings, said Ta Nea, which is politically close to the ruling Socialist party.

A new entity called the Public Property Fund, independent from the state, will also be created to oversee the privatisation drive, both dailies said.

Greece is currently locked in negotiations with representatives from the three organisations which last year bailed out the country with a 110-billion-euro ($157-billion) loan.

It needs a scheduled instalment of the loan, worth 12 billion euros, to pay its bills in July.

But the IMF has threatened to withhold its share of the funding without a broader agreement that will make Greece's debt -- over 350 billion euros -- sustainable.

Greek Finance Minister George Papaconstantinou has said the talks are expected to conclude by Wednesday at the latest.

Ta Nea said an agreement will be announced on Friday afternoon, after the close of European markets.

"The EU-IMF report will note that Greece's debt is not viable and point out delays in the fiscal adjustment and structural reforms programme," it said.

An emergency eurozone summit for June 5-6 is also expected to be announced on Friday, the daily said.

At least three eurozone states -- Finland, the Netherlands and heavyweight Germany - have expressed reservations towards a new Greek bailout.

The privatisation drive, designed to raise some 50 billion euros by selling choice state assets such as the Hellenic Telecommunications Organisation and part of the Public Power Corporation, has met with union opposition.

Greek unions are meeting on Wednesday to finalise another general strike, expected to coincide with a European worker mobilisation on June 21.