jump to navigation

U.S. Companies Brace for an Exit From the Euro by Greece September 3, 2012

Posted by Yilan in EU, European Union, US, USA, Yunanistan.
Tags: , , ,
add a comment

A flea market in Athens. In a survey this summer, an advisory firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more to follow.

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone.

That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeedthe euro in other countries.

Stock markets around the world have rallied this summer on hopes that European leaders will solve the Continent’s debt problems, but the quickening tempo of preparations by big business for a potential Greek exit this summer suggests that investors may be unduly optimistic. Many executives are deeply skeptical that Greece will accede to the austere fiscal policies being demanded by Europe in return for financial assistance.

Greece’s abandonment of the euro would most likely create turmoil in global markets, which have experienced periodic sell-offs whenever Europe’s debt problems have flared up over the last two and a half years. It would also increase the pressure on Italy and Spain, much larger economic powers that are struggling with debt problems of their own.

“It’s safe to say most companies are preparing,” said Paul Dennis, a program manager with Corporate Executive Board, a private advisory firm.

In a survey this summer, the firm found that 80 percent of clients polled expected Greece to leave the euro zone, and a fifth of those expected more countries to follow.

“Fifteen months ago when we started looking at this, we said it was unthinkable,” said Heiner Leisten, a partner with the Boston Consulting Group in Cologne, Germany, who heads up its global insurance practice. “It’s not impossible or unthinkable now.”

Mr. Leisten’s firm, as well as PricewaterhouseCoopers, has already considered the timing of a Greek withdrawal — for example, the news might hit on a Friday night, when global markets are closed.

A bank holiday could quickly follow, with the stock market and most local financial institutions shutting down, while new capital controls make it hard to move money in and out of the country.

“We’ve had conversations with several dozen companies and we’re doing work for a number of these,” said Peter Frank, who advises corporate treasurers as a principal at Pricewaterhouse. “Almost all of that has come in over the transom in the last 90 days.”

He added: “Companies are asking some very granular questions, like ‘If a news release comes out on a Friday night announcing that Greece has pulled out of the euro, what do we do?’ In some cases, companies have contingency plans in place, such as having someone take a train to Athens with 50,000 euros to pay employees.”

The recent wave of preparations by American companies for a Greek exit from the euro signals a stark switch from their stance in the past, said Carole Berndt, head of global transaction services in Europe, the Middle East and Africa for Bank of America Merrill Lynch.

“When we started giving advice, they came for the free sandwiches and chocolate cookies,” she said jokingly. “Now that has changed, and contingency planning is focused on three primary scenarios — a single-country exit, a multicountry exit and a breakup of the euro zone in its entirety.”

Banks and consulting firms are reluctant to name clients, and many big companies also declined to discuss their contingency plans, fearing it could anger customers in Europe if it became known they were contemplating the euro’s demise.

Central banks, as well as Germany’s finance ministry, have also been considering the implications of a Greek exit but have been even more secretive about specific plans.

But some corporations are beginning to acknowledge they are ready if Greece or even additional countries leave the euro zone, making sure systems can handle a quick transition to a new currency.

In Europe, the holding company for Iberia Airlines and British Airways has acknowledged it is preparing plans in the event of a euro exit by Spain.

“We’ve looked at many scenarios, including where one or more countries decides to redenominate,” said Roger Griffith, who oversees global settlement and customer risk for MasterCard. “We have defined operating steps and communications steps to take.” He added: “Practically, we could make a change in a day or two and be prepared in terms of our systems.”

In a statement, Visa said that it too would also be able to make “a swift transition to a new currency with the minimum possible disruption to consumers and retailers.”

Juniper Networks, a provider of networking technology based in California, created a “Euro Zone Crisis Assessment and Contingency Plan,” which company officials liken to the kind of business continuity plans they maintain in the event of an earthquake.

“It’s about having an awareness versus having to scramble,” said Catherine Portman, vice president for treasury at Juniper. The company has already begun moving funds in euro zone banks to accounts elsewhere more frequently, while making sure it has adequate money and liquidity in place so employees and suppliers are paid without disruption.

FMC, a chemical giant based in Philadelphia, is asking some Greek customers to pay in advance, rather than risk selling to them now and not getting paid later. It has also begun to avoid keeping any excess cash in Greek, Spanish or Italian bank accounts, while carefully monitoring the creditworthiness of customers in those countries.

“It’s been a very hot topic,” said Thomas C. Deas Jr., an FMC executive who serves as chairman of the National Association of Corporate Treasurers. Members of his group discussed the issue on a conference call last Tuesday, he added.

American companies have actually been more aggressive about seeking out advice than their European counterparts, according to John Gibbons, head of treasury services in Europe for JPMorgan Chase.

Mr. Gibbons said a handful of the largest American companies had requested the special accounts configured for a currency that did not yet exist.

“We’re planning against the extreme,” he said. “You don’t lose anything by doing it.”

Advertisements

Clinton Pushes Cyprus Solution in Turkey, Greece July 20, 2011

Posted by Yilan in Cyprus, Turkey, US, USA, Yunanistan.
Tags: , , ,
add a comment

US Secretary of State Hillary Rodham Clinton arrives in Athens

Photo: AP/Saul Loeb, Pool
US Secretary of State Hillary Rodham Clinton disembarks from her plane upon her arrival in Athens, as she continues her regional diplomatic tour, Saturday, July 16, 2011.

U.S. Secretary of State Hillary Clinton has begun a visit to Greece after telling officials in Turkey she wants to see an early solution to the Cyprus dispute. Clinton’s talks with Greek officials will also cover that country’s economic crisis.

U.N.-sponsored peace talks between the Greek and Turkish authorities on Cyprus have been underway since 2008 with little visible success.

But Clinton, as she ended a two-day visit to Istanbul said she supported Turkish calls for a resolution of the long-running conflict by 2012, when Cyprus is due to take over the European Union presidency for the first time.

“We don’t think the status quo on Cyprus benefits anyone. It’s gone on for far too long. We believe both sides would benefit from a settlement. And we strongly support the renewed, re-energized effort that the United Nations is leading, and that the Cypriots themselves are responsible for, because ultimately they’re the ones who are going to have to make the hard decisions about how to resolve all of the outstanding issues,” she said.

Turkey has threatened to freeze relations with the E.U. if Cypus assumed the presidency without a settlement of the dispute.

Clinton said the United States wants to see a bi-zonal, bi-communal federation on the island and “would like to see it as soon as possible.”

Cyprus has been divided along ethnic lines since 1974 when Turkish troops occupied the northern third of the island in response to a coup in Nicosia aimed at union with Greece.

The last major push for a settlement foundered in 2004 when a U.N. backed referendum on a bi-zonal federation was voted down by Greek Cypriots.

A senior official traveling with Clinton said the Greek economic crisis would dominate her meetings in Athens and that Clinton would press both in public and private for support for Prime Minister George Papandreou’s austerity program, aimed at securing additional European and international rescue loans.

Before leaving Istanbul Saturday, Clinton told young Turks at a televised coffee shop dialogue that she was troubled by Turkey’s arrest of dozens of journalists and said it was “inconsistent” with the economic and political progress the country has been making.

Media watchdog groups say about 60 reporters are jailed, many working for leftist or Kurdish publications. The Secretary also noted the issue at a closing press event with Turkish Foreign Minister Ahmet Davutoglu.

“Turkey’s upcoming constitutional reform process present an opportunity to address concerns about recent restrictions that I heard about today from young Turks, about the freedom of expression and religion, to bolster protections for minority rights, and to advance the prospects for (Turkish) E.U. membership, which we who wholly and enthusiastically support,” she said.

Clinton paid a high-profile call on Istanbul-based Orthodox Christian Ecumenical Patriarch Bartholomew, who has complained of church seizures and other harassment by Turkish authorities.

In her public remarks with Foreign Minister Davutoglu, Clinton urged the reopening of the Halki Seminary, an Eastern Orthodox theological school that was shut down by Turkish authorities in 1971.

Obama: “I will talk to Papandreou over name issue again” May 29, 2011

Posted by Yilan in America, Macedonia, US, USA.
Tags: , , , ,
add a comment

“Macedonia is a perfect example. Whenever I meet with the Macedonian President, we are talking about the name issue. This frustrates me. I promise You President Ivanov that I will again speak to Papandreou on the issue. I believe he is also ready for a solution”, said Obama.

President Gjorge Ivanov took part late Friday at the working dinner of participants at the 17. meeting of Presidents of Central European States with United States President Barack Obama, MIA reports from Warsaw.

Ivanov stressed Republic of Macedonia was the only country in the world to have additional condition for UN accession, as well as the only country to have additional condition for NATO membership and EU integration, saying this condition is irrational and absurd.

“As a country we have met all conditions for NATO accession and continuation of our EU integration process. Republic of Macedonia was the only country emerging from the former state without conflicts and wars”, stressed Ivanov.

He added that Macedonia enhanced its eternal tradition of coexistence and tolerance with the Ohrid Accord, which represents the most successful agreement in the region, whereas the country has built a unique model of integration without assimilation, producing regional stability.

“The Republic of Macedonia wants a solution. Macedonia demonstrated its constructiveness prior to the Bucharest summit. PM Papandreou should be assisted in making a concrete step forward”, said Ivanov.

U.S. President Obama stressed Central and Eastern European countries have achieved remarkable success they should be proud of.

“Macedonia is a perfect example. Whenever I meet with the Macedonian President, we are talking about the name issue. This frustrates me. I promise You President Ivanov that I will again speak to Papandreou on the issue. I believe he is also ready for a solution”, said Obama.

He added all countries from the region of Central and Eastern Europe have individual problems – ethnic, political, economic.

“We all have different problems. We are imperfect creatures, but the most important thing is that differences and problems are settled in a peaceful manner, through political means, dialogue and institutions”, said Obama.

According to him, the most important thing is to keep the NATO and EU doors open for all who want to join and meet criteria.

“My message to everyone on this table is – be proud of your progress, we are behind you, we will support you. We only ask one thing in return – work together with us towards democracy, freedom and common objectives. Your problems come to me through our ambassadors, the State Department and Washington. I assure you this evening’s talks will yield results”, underlined U.S. President Obama.

Many Turks see US as greatest threat January 16, 2011

Posted by Yilan in America, Turkey, US.
Tags: , , , ,
add a comment

A new survey finds that 42.6% of Turks see Washington as the “greatest external threat”.

 

photo
A woman attends the funeral of her son, a Kurdish rebel allegedly killed by Turkish soldiers. Many Turks view the US as not doing enough about Kurdish rebels operating out of northern Iraq. 

In a recent poll by Metropoll, which is alleged to have connections with Turkey’s ruling Justice and Development Party (AKP), 23.7% of the 1,500 respondents cited Israel as the country’s biggest threat. However, more than 42% cited the United States.

In comparison, 3% of Turks named Iran, 2.3% said Greece, 2.1% cited Iraq and 1.7% said Russia.

The survey appeared to give credence to the frequently espoused view that Turkey, a longtime NATO member, is drifting away from the West. Since the AKP first took power in 2002, the party has been accused of harboring a secret plan to establish an Islamic state within Turkey, orienting the country eastward, and increasing relations with Iran.

Little evidence has appeared to substantiate this. The AKP’s plans are likely exaggerated as the world struggles to create a new vocabulary to discuss the rapid changes taking place with the rise of emerging countries and power shifts within Turkey.

“It is no longer possible to sustain the current world order, which, based as it is on a skewed notion of centre-periphery relations, merely produces injustice and inequality,” Turkish Prime Minister Recep Tayyip Erdogan wrote recently in an op-ed for New Europe magazine.

While the AKP espouses a foreign policy of “zero problems” with its neighbours, such as Iran, and seeks to build a range of largely trade-based relationships around the world, Turkey still maintains that it is a Western partner.

Why then did Turks name the United States as their number one threat?

The results of the survey could stem from a belief that the US is only the country with the capabilities and presence in the region to hurt Turkey, some analysts said.

Klaus Jurgens, a columnist for the local newspaper Today’s Zaman, says he is concerned by the survey’s results. “Is it a general hostility, or is [it] that the US does not support Turkey?” he said.

Many Turks perceive the US as not doing enough to aid the country’s fight against Kurdish rebels who operate from bases in northern Iraq.

Jurgens says the perceived threat from the US comes, in part, from a failure by the Turkish government to explain it foreign policy adequately to the public.

 

“This is a chance for the government to wake up and tell them we live in an international community,” Jurgens said.

According to Metropoll, the main concern of Turkish citizens is the economy. Jurgens cited democratisation as Turk’s second chief concern. Understanding foreign policy was a distant third or fourth priority. “The US as a threat, [Turks] would know better only if someone tells them,” he said.

This is unlikely as the country begins an election year.

“Until after the next election in June, the prime minister will focus on domestic issues,” Jurgens said.

Turkey’s Biggest Threat? Ask Uncle Sam January 16, 2011

Posted by Yilan in America, Turkey, US, USA.
Tags: , , , , , , ,
2 comments

Turkey’s neighborhood is often considered a bit rough round the edges: conflict-riven Iraq to the south, nuclear-aspirant Iran next door, the restless Caucasian states and the Russian bear to the East. Even to the west, in New Europe, the bordering Balkan states have been plagued by periodic conflict.

Turkish military officers here used to — and often still do — say as much in presentations about regional threats to schoolchildren in ‘national security’ lessons that form part of the state curriculum.

But ask Turks to name their biggest external threat and the source is a long way — and seven time zones — from the country’s borders: the United States.

According to a wide-ranging survey carried out by the Ankara-based MetroPOLL Strategic and Social Research Center in December, some 43% of Turks said they perceive the U.S. as the country’s biggest threat, followed by Israel, with 24%. Just 3% of those surveyed considered Iran a major threat.

This trend isn’t new. Though the U.S. is Turkey’s strategic ally, it has become steadily more unpopular here, receiving the lowest favorability score from Turks in every Global Attitudes survey conducted between 2006 and 2009 by the Washington-based Pew Research Center.

Still the survey from MetroPOLL — which quizzed 1,504 people in 31 provinces in December — appears to mark a sharp acceleration in antipathy towards American and particularly Israeli policy.

“This is the highest ratio ever on the external threat question among our surveys,” says Professor Özer Sencar, chairman of MetroPOLL, which is affiliated to the governing AK-party. “The U.S. foreign politics since the Iraqi invasion, the war in Afghanistan, repeated Armenian bills in the U.S. Congress and the negative statements that Turkish leaders make about the U.S. and Israel play a major role in this perception.”

Predictably, hostility toward Israeli policy spiked after the Mavi Marmara affair, which saw nine activists killed after Israeli commandos boarded a flotilla seeking to end the blockade of Gaza. The MetroPOLL survey says 63% of Turks now want to freeze diplomatic relations with Jerusalem.

Back in the Cold War days, Ankara’s allegiance was clearer — a NATO member which bordered the Soviet Union, it was a staunch ally of Washington.

Turkey’s still a steadfast NATO member: it has the security group’s second-largest military force and in November formally agreed to house a NATO missile shield, despite public protest. But with the Islamist-leaning government of Prime Minister Tayyip Erdogan sweeping to power in 2002, and still comfortably the most popular party here, Ankara’s foreign policy priorities have shifted significantly in the past decade.

Partly as a product of Mr. Erdogan’s Foreign Minister, Ahmet Davatoglu, who pursued a ‘peace with all neighbors’ policy, relations with old rivals Greece and Armenia — as well as Iran — have warmed. According to MetroPOLL, the number of Turks considering Greece and Armenia the principal threat to national security is now just 2% and 1%, respectively.

The perceived reorienting of Turkey’s foreign policy has ruffled feathers in Washington and Brussels, despite Ankara’s denials that its priorities have changed. The MetroPOLL survey will be cited by those who say Turkey’s deteriorating ties with the U.S. and Israel and closer relations with Iran demonstrate that NATO’s sole Muslim-majority member is moving away from the West.