G8 Summit ended with pledge to support growth and Greece

The four day G8 Summit closed out at Camp Davis on Saturday with world leaders coming down in support of growth and saving Greece from the current financial crisis. At the same time, the leaders of the world put the onus on their European counterparts to deal with the financial turmoil before it starts hurting the rest of the world economy.

British PM David Cameron called for “decisive action” and “contingency plan” to combat and tackle the eurozone crisis. He also delicately prodded that the European Central Bank (ECB) should consider printing notes to revive demand in the single currency block.

US President Barack Obama, the host of the Camp Davis Summit, called upon the leaders of France, Germany and Italy to resolve the crisis through restoring public finances and encouraging stimulus. Keeping an eye on his re-election chances, President Obama proposed “stimulus” for job-creating infrastructures, and balancing it with “reforms” in order to address debts and deficits.

Lastly, in order to address the political and economic upheaval in Greece, the leaders of the G8 nations also reaffirmed their interest in keeping Greece within the euro zone. Though, they didn’t propose any solution to tackle the turmoil in Greece.

IAEA chief doubts full nuke disclosure from Iran

On Wednesday, The chief of International Atomic Energy Agency (IAEA), Yukiya Amano, has cast doubt on Iran’s intention to disclose all its nuclear facilities for international monitoring. Incidentally, the day was after Iran had signaled letting international nuclear experts visit its key military site.

In a latest CNN interview, The IAEA chief has revealed that Iran has declared several of its sites that have been used for peaceful purposes. But there could be other facility (s), which IAEA chief believes, that Iran has not disclosed yet and could be used for building nuclear weapons. It is suspected that Iran would try to clean up its facility at Parchin before it handovers it for IAEA inspection.

Reports have confirmed that the monthly production of enriched uranium has tripled in Iran. The reason cited by Iran for high enriched-uranium production is that, it is helpful for cancer therapy and other civilian purposes. Recent satellite images is said to have captured trucks and other heavy vehicles at Parchin.

It has also been confirmed on Wednesday that the five permanent members of the United Nations Security Council (UNSC) along with Germany are going to present a joint statement regarding Iran. The statement that is going to be delivered to the IAEA on Thursday would highlight concern about Iran’s nuclear activities, especially the uranium-enrichment program at Natanz and Fordow.

Iran to discuss its nuclear program with global powers

After more than a year of diplomatic standoff, the six-nation global powers are to resume dialogue with Iran on the highly contentious Iran nuclear program. The announcement came from the Chief of foreign affairs of EU, Catherine Ashton, on Tuesday who is currently acting for the six global powers – the United States, Britain, France, Germany, China and Russia.

The offer for negotiations was made by Iran last month amid tremendous international pressure to halt its nuclear program. On Tuesday, Iran has made another peace offer. For the first time, it has shown willingness to give access to International Atomic Energy Agency (IAEA) nuclear experts to visit its main nuclear complex. By making such an offer, it is believed, Iran is trying to send out the message that its nuclear program is for peaceful purposes only, that it has nothing to hide.

The United States together with the neighboring Israel have been alleging Iran of using its nuclear program for building nuclear weapons. While, Israel has openly declared its intention to destroy Iran’s nuclear facility, the United States has shown marked restrain from making any such comments till now. President Obama of the United States has pointed out “beating the drums of war” is of no use. It has to justify the costs and merits of military action.

In fact, in today’s world, war should not be an option. Whichever side wins, it is colossal loss to mankind. War must not be justified under any pretext.

Pressure mounts on EU to seal Greek bailout deal

Following last week’s bumpy starts over second bailout to Greece, Eurozone finance ministers are pressing ahead to give their final approval to the € 230 billion emergency fund. Time is of crucial factor as Greece has to make € 14.5 billion bond repayment before March 20th or face default. The final meeting that would decide the fate of Greece is scheduled to start at the EU headquarter 1430 GMT onwards on Monday.

Such is the desperation that Premier Lucas Papademos of Greece has already reached Brussels to hold talks with other European leaders. It is believed that the presence of the Greek Prime Minister would lend more weightage to the loan talk. Earlier, Germany had expressed its reluctance on the latest bail-out package to Greece.

The latest deal expects private sector government bond holders to swap their existing old bonds with new bonds. This would bring down the current bond value to about 30 percent. To make it compulsory, the government of Greece is set to pass a new bill this week which would force the bond holders to accept the rate cuts on bonds if they don’t agree volutarily to the new agreement. Besides, a string of other austerity cuts and reforms are waiting to be announced in Greece before the end of this month to appease the concern of its International financial backers.

Greece debt talk suffers a fresh setback

The ongoing negotiation between the government of Greece and the IIF (Institute of International Finance that includes representatives of private banks and investors) has come to a standstill over debt talk. The bone of contention is a fresh demand that Germany and the IMF (International Monetary Fund) is trying to clamp on private creditors of Greek government bonds. As both sides are refusing to budge from their positions, the issue of Greece’s outstanding debt remains unanswered.

Under the new demand, private bondholders are expected to accept lower interest rates on their Greek bonds. Plus, they are supposed to swap their existing bonds with new 30-year bonds with below 4 percent interest rate. Experts are of the opinion that for private investors this could amount to 60%-70% loss on Greek bonds.

An agreement on debt talk was expected to be reached by this Monday. The intention was to give lenders to Greece enough time to arrange for second rescue package of €130 billion prior to EU’s next Summit scheduled on January 30. With participation of private creditors mandatory for receiving further financial aid, the latest setback has cast a doubt on how Greece would come up with €14.5 billion debt repayment on 20th March.

Finding a solution to the latest crisis is important for leaders of EU. This would not only bring down Greece debt on a sustainable path, but would also have a positive impact on eurozone nations as a whole.

Germany and Poland bury their past hatchets to save Eurozone

Mission to save Euro and Eurozone from the ongoing financial crisis has brought together a never-before coalition between Germany and Poland – known enemies whose past are fraught with animosity and war. As the leaders of other EU countries are struggling to reach a common consensus to tackle European debt crisis, leaders of the two countries have taken a united stand.

In a rare gesture, the Prime Minister of Poland, Donald Tusk, has given its full backing to German Chancellor Angela Merkel in her attempt to ask for full change in the treaty. Full and fundamental change in the European treaty is necessary to bring in severe budget cuts and centralized monitoring.

As an ally, Poland brings on the table several brownie points for Germany. Poland enjoys close relationships with countries that belonged to former Soviet Union and countries of northern Europe. Poland is also an enthusiastic supporter of unified Europe and hopes to join Euro in the future. Besides, the commanding position that Poland enjoys among nations outside eurozone also goes well with Germany.

The final clincher was the foreign minister of Poland, Radoslaw Sikorski’s recent comment that set the government and foreign policy departments of Berlin abuzz. “I fear German power less than I am beginning to fear German inactivity.” Radoslaw Sikorski also did not forget to hail Germany as indispensable to Europe.

EU countries divided on Euro before EU Summit

Before Friday’s crucial EU summit, EU countries were reported to be divided on several issues over the debt crisis. Difference of opinion emerged about the ways austerity measures would be ensured among member countries and execution of reform activities (within specific time frames) through a centralized monitoring.

Wednesday also saw Germany advocating for full and permanent change in the European treaty, creation of two separate bailout plans – one for short term and another for long term and extension of debt limits for the protection of Spain and Italy. Some other nations like France, however, want an immediate change in the treaty to deal with the euro crisis.

Since changing the entire European treaty may take up to two years, officials of European Union are exploring other ways to deal with it. Herman Van Rompuy, the euro zone and also the European Council president, proposed a quick fix way to ensure‘fiscal discipline’ and avoid delays of a full change in the European treaty. This requires changing a single protocol wherein leaders of respective nations would, under the directives of European Central Bank as well as European Parliament, enter into an obligation to stay within budget for that time frame. Herman Rompoy further elaborated that those nations who violate this rule could be punished with further economic sanctions and more tax burden or with both.

Experts are of the opinion that punishing offender countries that go over-budget would require full and fundamental changes in the treaty rather than changing just one of the protocols. European institutions must have absolute power to squash national budgets.