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.

US urges Greece, Macedonia to resolve name row July 19, 2011

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

US Secretary of State Hillary Clinton has urged Greece and Macedonia to resolve a long-standing name row that has undermined relations and blocks Skopje’s EU and NATO entry bids.

“We have made it very clear that we support the negotiations that have gone on between Skopje and Athens,” Clinton told Greece’s SKAI TV in a recorded interview that aired Monday.

“We think that there is an opportunity here,” she added on the sidelines of a three-day trip to Athens to express US support for Greece’s debt recovery efforts.

The two countries have been at loggerheads since Macedonia proclaimed independence from the former Yugoslavia in 1991, with Greece insisting that the use of the name Macedonia implies a claim on Greek territory.

Macedonian officials say name change could lead to a denial of the country’s language and national identity.

Almost two decades of UN-led negotiations over the name dispute have been fruitless.

Skopje officially became a candidate for EU membership in 2005, but Athens has blocked its accession to the 27-nation bloc and NATO.

Macedonia also filed an application with the International Court of Justice in November 2008, claiming Greece was violating its rights by blocking its membership of NATO pending the resolution of the name dispute.

“The government in Skopje needs to know that it will not be able to move forward on its European integration until it does resolve this (issue). And, obviously, Greece has to be willing to accept how the name is resolved,” Clinton said.

“So, we have encouraged as strongly as we can that this matter be finally taken care of,” she said before flying on to India, the next leg of a regional trip.

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.

Has Obama forgotten Turkey? May 28, 2011

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

 

 

As the aging regimes of the Middle East fall one by one in the face of the political tsunami that has washed across the region, there can be little doubt that Turkey’s foreign policy position lately has managed to attract much attention across the world.

Turkey is like a star that can talk to both the East and the West, as it manages relations with the European Union and normal ties with Israel. Just a few signs of this generally shining tableau include support by 151 nations for Turkey’s candidacy for a spot on the UN Security Council, ongoing EU membership accession talks, the holding of the position of General Secretary for the Islamic Conference Organization, and Turkey’s appearance and actions on a wide variety and breadth of international platforms. Some of these platforms include the Arab League, the African Union, the Gulf Union, and the Conference of Undeveloped Countries.

When Turkey — which had for many years followed more of a “wait and see” set of policies — started taking active steps not only towards solving its own Cyprus, Armenian, and Kurdish problems, but also in trying to find solutions to giant international problems involving Palestine, Lebanon, Syria and Iran, it was inevitable that all eyes would turn to Turkey.

Despite the good intentions driving these efforts on both domestic and international fronts, no real concrete results have been achieved. And there have been questions posed as to why it is Turkey who is getting so involved in issues that outsize it. Perhaps the lack of results from the efforts made on the Iran, Syria-Israel and Lebanon fronts has helped Turkey to see the limitations of its own influence.

But just as these efforts — some of which have inspired jealousy, others of which have sparked competition — have brought about concrete economic profit, they have also allowed Turkey to really perceive its own soft strength, of which it was not aware until now. And thanks to all this, the image of a passive Turkey in the region and in the world has changed.

Turkey has turned into a global actor whose actions and whose leaders’ speeches are eagerly awaited and closely watched. Some of the greatest contributions made to this process — a process in which factors from the nation’s dynamic civilian society to its economic performance, from its historical depth to its experiences of democracy — have been made by the trio President Gül, Prime Minister Erdoğan, and Foreign Minister Davutoğlu. The most concrete leg of the new set of policies being followed by Turkey — which cover everything from foreign trade to tourism figures — has been the “zero problems with neighbors” policy. The results brought about by this particular policy are clear enough when one observes that in 2008, Russia became Turkey’s biggest foreign trade partner, or that Turkey increased trade levels with its neighbors sevenfold. Up until now though, we have really just judged by rule of thumb how Turkey’s neighbors view the new Turkey, and how they perceive the changes here.

In order to bring clarity to this issue, a piece of research into the perceptions of Turkey by intellectuals from seven of our nation’s neighboring countries has been very helpful. The study was overseen by Professor Savaş Genç of Fatih University.

The details from this study were reflected in yesterday’s Turkish media; the results appear striking and call for thought by politicians throughout Turkey. The vast majority of intellectuals from Turkey’s neighboring countries do believe that Turkey has been very active of late in foreign policy, and that Turkey has increased its weightiness on the global stage. They attribute this positive change in foreign policy to three basic factors: the AK Party rule, the EU accession process and liberalization of the economy. The most underscored aspect of Turkey’s changed foreign policy is its balanced approach to both the East and the West. Among those who believe that Turkey has edged closer to the Islamic world, especially among those neighboring countries which are not majority Muslim, there is doubt about the sustainability of this set of politics. It is very meaningful not only that a strengthened and democratized Turkey sees opportunity even in Armenia, but that Turkey is perceived by so many as a port in any disastrous storm.

In the research carried out by Fatih University, one of the most striking results was the fact that 62% of the respondents said they saw Turkey as a model for the rest of the Middle East. What makes this particular result even more meaningful is that it completely dovetails with results from research done in 2010 in Arab countries by the Turkish Economic and Social Studies Foundation (TESEV). In the TESEV research, 66% of respondents said they saw Turkey as a regional model.

What is strange is that these realities — which are visible to the naked eye and which are verified by so much detailed research — do not seem evident in Turkish society itself. Also, there is the fact that despite all this, the West seems resolute in ignoring the new Turkey. While Europe’s rough and rude barriers to Turkey are already evident and clear, how is it that when US President Obama describes his Middle East vision, he could talk about Indonesia, India, and even Brazil, but not mention Turkey? Why is it that the same Obama — who made his first diplomatic visit a visit to Ankara — seems now to have forgotten Turkey? In light of the critical and new developments in places like Libya, Iran and Syria, Turkey needs to think about how to not only maintain, but also develop the valuable credit it has gained on the global stage.