Eurozone approves Greek bailout extension. (The 19-nation Eurogroup urged Greece to develop and broaden the list of reform measures)

Greece secured a four-month extension of its financial rescue on Tuesday when its euro zone partners approved a reform plan that backed down on key leftist measures and promised that spending to alleviate social distress would not derail its budget.

Oil Prices Rising, Brent Crude Now Selling for Over $62 a Barrel

Brent crude has climbed to $62 per barrel in Asian trade on February 17, despite growing uncertainty regarding the Eurozone's future which has been caused by the recent failure in Greece's debt negotiations.

On the New York Mercantile Exchange, light crude futures for March delivery were traded at $53.16 per barrel, while on London’s ICE Futures exchange Brent crude for April delivery mounted by $0.70/1.1% reaching $62.10 a barrel.

Meanwhile the talks over a new financing deal for Greece broke down Monday, sparking controversy between Athens and its creditors. 

A growing uncertainty regarding the economic prospects of Greece within the bloc is predictably undermining the euro. 

In contrast, the US dollar is strengthening steadily. Experts note that the trend is likely to sour oil-market sentiments; however, Brent crude has beaten its second-highest record since the beginning of the year.
 [sputniknews.com]
17/2/15
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• Oil Prices Not Expected to Return to $100 per Barrel ...

Greece offers olive branch as search for allies begins

Greece sought to repair relations with its international creditors on Saturday (Jan 31) as the new anti-austerity government began a charm offensive in European capitals, even as Germany insisted it would not support any debt relief...

Just hours before Finance Minister Yanis Varoufakis headed to Paris to seek support for a renegotiation Greece's massive loans, Prime Minister Alexis Tsipras said he believed a deal could be reached with the European Union (EU) and International Monetary Fund (IMF).

"No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt," Tsipras said in a statement issued to the Bloomberg news agency.

In its first meeting with creditors since it took office, the Greek government clashed with the head of the Eurozone finance ministers on Friday over its plans to rethink its rescue package and to halve Greece's debt.

Tsipras, who will himself visit Italian Prime Minister Matteo Renzi and French President Francois Hollande next week, said Greece had no intention of reneging on its commitments to the European Union and International Monetary Fund.

"My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda, in no way entails that we will not fulfil our loan obligations to the ECB (European Central Bank) or the IMF," he said. "On the contrary, it means that we need time to breathe and create our own medium-term recovery programme."

This includes aiming to balance the budget - excluding debt repayments - and clamping down on tax evasion, corruption and policies which favour only a wealthy few, he said.

"I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole," Tsipras said.

GERMANY HOLDS FIRM

Varoufakis was to leave for Paris on Saturday night with talks scheduled with French finance minister Michel Sapin and economy minister Emmanuel Macron on Sunday. Neither he nor Tsipras are intending to visit Germany, which has shouldered the bulk of Greece's loans and which strongly objects to Athens' plans.

Merkel on Saturday ruled out fresh debt relief for Greece, telling the Hamburger Abendblatt daily: "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt."

"I do not envisage fresh debt cancellation," she said, as a new poll for broadcaster ZDF found 76 per cent of Germans oppose any reduction in debt.

Portuguese Prime Minister Pedro Passos Coelho also opposes any renegotiation of Greece's debt, saying it would "go against the interests of Portugal and the Portugese people".

Despite a restructuring in 2012, Greece is still lumbered with a debt pile of more than 315 billion euros, upwards of 175 per cent of gross domestic product (GDP) - an EU record.

But in its first week in power, the government scrapped the privatisation of Greece's two main ports and the state power company and announced a major raise in the minimum wage.

Varoufakis also raised the stakes by saying that Greece wanted direct access to its EU-IMF creditors and would no longer work with their widely hated fiscal audit staff team, known as the "troika".

Martin Schulz, the German head of the European Parliament, told the Frankfurter Allgemeine on Saturday that this position was "irresponsible".

GREEK BANK FEARS

Varoufakis's comments followed a strained meeting on Friday with Jeroen Dijsselbloem, who represents finance ministers from the 19-nation Eurozone. Dijsselbloem warned Athens that "taking unilateral steps or ignoring previous arrangements is not the way forward".

Greece has been promised another 7.2 billion euros (US$8.1 billion, S$10.9 billion) in funds from the EU, IMF and European Central Bank (ECB), but this is dependent on the completion of a review of reforms at the end of February.

• Varoufakis has said his government does not want the loans, but there are concerns Greece cannot survive without them. These concerns are focused on Greece's banks, which are helping the state stay afloat by purchasing its treasury bills - and which are being supported by the ECB.

• "If the ECB turns the tap off, it's over," Alexandre Delaigue, economics professor at the elite French military academy Saint-Cyr, told AFP.

The stunning success of Syriza in last Sunday's polls sent shockwaves through Europe and gave encouragement to other anti-austerity parties.

Tens of thousands of people, meanwhile, took to the streets of Madrid on Saturday in support of the Spanish party Podemos, which has been surging in polls ahead of elections later this year. Like Syriza, Podemos has found popular support by targeting corruption and rejecting austerity programmes aimed at lifting the countries out of deep economic crisis.

- AFP/fl
[channelnewsasia.com]
31/1/15 --1/2/15
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• Greece warned against trying to reverse bailout deals

Spain’s solar industry to collapse as govt introduces draconian profit caps

One of the main producers of renewable energy in Europe, Spain’s solar industry, is edging toward bankruptcy. Producers say they’ll be unable to repay credits after the government’s decision to cut subsidies. Banks will suffer and jobs will be lost.
Energy Minister José Manuel Soria has introduced a new compensation plan for calculating levels of "reasonable profitability" for renewable-energy production, distribution and transportation. It will reduce payments to companies serving the nation's electrical system by up to 2.7 billion euro annually. It’s hoped the move could help cope with the electricity system deficit that has been growing since 2005 and now exceeds 25 billion euro.

To sap the annual deficit, which has been estimated by the government at 4.5 billion euro this year, Spain is set to raise consumers' electric bills by about 3.2 percent starting from August, contributing about 400 million euro in extra revenue for the system this year and 900 million euro next year, the Wall Street Journal reports.


Experts are warning that with the increased levies on self-consumed solar energy so high many households will have to pay more for the electricity they generate themselves than they would for regular grid power. 
The main trade association for Spain's electric utilities which distribute most the country's electricity said "the cuts will compel our member companies to undertake a drastic reduction in jobs and review their investments in Spain," Asociación Española de la Industria Eléctrica (Unesa) warned.

Spain has over 4GW of installed capacity. For several years the government reportedly pushed electricity retailers to pay above-market, unaffordable prices to renewable-power producers.

This handout picture released by Gemasolar shows the Torresol Energy Gemasolar thermasolar plant in Fuentes de Andalucia near Sevilla, southern Spain. (AFP Photo/Gemasolar)

Big subsidies triggered a boom in solar-power installations that, according to the Wall Street Journal, far exceeded official government targets. Between 2006 and 2012, when renewable-energy output doubled, Spain boasted the fourth-largest such industry in the world, according to the Economist.

In 2012 clean energy subsidies in Spain hit 8.6 billion euro, nearly 1 percent of GDP. To fund the expansion, Spanish banks lent the solar-energy companies nearly 30 billion euro. Potential loan defaults could worsen the already heavy burden on Spanish banks. The government is said to be in talks with banks to forestall bankruptcies, with five of the biggest utilities saying the new reforms will jointly cost them 1 billion euro a year.

With the new plan brought into action, the government has capped profits for the solar energy sector at 7.5 percent before tax to 5.5 percent after tax. Spanish trade associations have been shocked by the decision saying the new rate is less than the rate that industry insiders are able to borrow at, leading many to “bankruptcy because they won't be able to repay the credit that financed them.”

According to the energy minister, "this reform is not wedded to any part of the electric sector."

"We did what we had to do," Soria said. 
http://rt.com/business
23/7/13

Greece has finished talks with its creditors

Greece has finished marathon talks with the ‘Troika’ of creditors over its €31.5bln aid package, according to the Greek Prime Minister Antonis Samaras.
“Today we finished talks on the austerity measures and the budget. We did everything possible,” the Prime Minister said on Tuesday. "Should the agreement be approved [by the Parliament], and the budget adopted, Greece will remain within the Eurozone and will go out of the crisis.”
Samaras added that Athens had achieved “significant improvement” in the deal on offer, and warned of “chaos” if the measures were rejected by MPs.

At the moment Greece is seeking to receive another €31.5bln tranche out of the second bailout package amounting €130bln. In return the country should save €13.5bln in two years, with the exact ways of reaching the target remaining vague. The so-called Troika of creditors that includes the European Union, the International Monetary Fund and the European Central Bank may ask Greece to implement around 150 reforms within 2 years, Germany’s Spiegel said last week. This will include certain changes to minimum wage rules, as well as abolishing professional privileges.
The announcement from Samaras has caused immediate reaction from bloggers on the internet.Comments largely grin at the PM’s calling negotiations ‘successful,’ while in fact “the scale of the austerity that will be heaped on Greeks has increased by billions of euros since the measures were originally mapped out after Greece's second bailout back in March,” the Guardian blogger said.
Greece austerity package went from €11.5bln to €13.5B, €5.5bln of cuts in 2013 that turned into €9.5bln.
Labor reforms that had long remained an outstanding issue were agreed earlier on Sunday, with no detail revealed.

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