CROATIA
Croatia may finish EU accession talks by end of 2010: commissioner
Feb 10, 2010, 14:32 GMT
Strasbourg - Croatia could finish accession negotiations with the European Union in 2010, setting the Balkan country up to become the bloc's 28th member within two to three years, the new commissioner for EU enlargement said Wednesday.
'If the country fulfils all outstanding issues, I remain confident that accession negotiations can be concluded this year,' Stefan Fule told the European Parliament in Strasbourg.
However, Fule warned that Croatia still has work to do on reforming the judiciary, fighting corruption and organized crime.
It also has to maintain cooperation with a UN tribunal set up to punish crimes committed in the civil wars that took place in former Yugoslavia in the 1990s.
Members of parliament (MEPs) endorsed Croatia's negotations in a resolution passed with 582 votes in favour, 24 against and 37 abstentions.
'The level of cross-party agreement and the lack of controversy on this issue is (...) a clear signal that we are nearing the end of the process,' said Bernd Posselt, a German MEP from the conservative European People's Party (EPP).
If EU-Croatia talks were to conclude in 2010, an accession treaty would have to be drawn up, signed and ratified by all the current 27 members of the EU. That process is expected to take up to two years.
The Czech commissioner appeared in parliament on his first day in office, as the EU executive which he is a member of was approved only Tuesday by MEPs.
The assembly also approved resolutions on Turkey, urging the country to speed up its reforms, and on Macedonia, calling for a resolution of a name dispute with Greece that prevents accession negotiations with the EU from starting
CYPRUS
Cyprus airline staff demonstrate over possible closure
FAMAGUSTA GAZETTE 09.FEB.10
Staff and cabin crew at state-owned airline Eurocypria today demonstrated outside Parliament.
The president of the Pilots's Union, Andreas Kalos, warned that the possible closure of the airline would have catastrophic consequences to the island's tourism industry which has seen an 11 percent drop in arrivals in light of the financial crisis and the weakening strength of the sterling against the euro.
Eurocypria staff called on the MPs to examine the severity of the issue at hand and shoulder their share of the responsibility.
The airline staff noted that they had already made numerous sacrifices in the past due to financial issues, adding that they would do the same again for the good of the company and the island's economy
Parties back EDEK’s claim of being ‘kept in the dark’
By Stefanos Evripidou Published on February 10, 2010
REACTIONS TO the withdrawal from government and Christofias’ response came thick and fast yesterday. Socialist leader Omirou said the president’s reply reflected unchanging positions which proved that EDEK’s decision was the right one. He argued again that the party’s requests for more briefings and “collective consultations” on the negotiations had fallen on deaf ears in two years.
He accused Christofias of missing a chance to withdraw the proposal on a rotating presidency when the Turkish Cypriot side submitted a host of confederal proposals to the table.
On the question of EDEK members recently appointed on the boards of semi-government organisations (SGOs), Omirou said he advised those board members to remain at their posts, unless the president wished to raise the issue. EDEK had benefited greatly from DIKO’s decision not to submit candidates for the SGO boards last year.
DIKO vice-president Nicolas Papadopoulos yesterday backed EDEK’s claim that Christofias had kept the parties in the dark during negotiations. “The rule was always that the government partners were briefed after decisions were taken and after the generous offers made,” said Papadopoulos.
He gave as an example the proposal for a rotating presidency, submitted last February. “We didn’t know about it. Nobody said anything to us and we learnt about it from the leaked UN documents.”
EVROKO leader Demetris Syllouris went a step further, accusing the president of putting the interests of the Republic and Cypriot Hellenism “in a most precarious position, due to (his) amateur handling, based on vague expectations”.
Greens deputy Georgios Perdikis said EDEK’s decision was totally justified, placing full responsibility for the move on Christofias.
DISY spokesman Haris Georgiades also lent credence to the view that there was a lack of information and consultation on the talks. It’s one thing to brief parties after the event and another to discuss policy and strategy before, he said, adding that Christofias was demanding unconditional support without the necessary preceding consultation.
AKEL leader Andros Kyprianou countered, saying that all parties were given documents to study and respond to before each chapter was to be discussed in the talks. “This happened every time,” he said.
He also argued that the president has successfully achieved “far more convergences” today than was achieved in 2004, and this without making concessions, as many have claimed. Regarding the “casus belli”, the rotating presidency, Kyprianou said EDEK’s reaction seemed a little late since the proposal was tabled exactly a year ago. “I think this hypersensitivity is belated. It would be a blessing to hear what solution EDEK proposes, and not in general and vague times,” he added.
Government spokesman Stefanos Stefanou also defended the government’s handling of the talks, noting that all negotiating documents had been submitted to the parties, who did not always voice their disagreement as they are making out.
Cyprus - Serbia Defence Agreement
Wed, 10/02/2010 - 18:16 — Sarah Fenwick
Cyprus and Serbia have signed an agreement to boost military cooperation, said the ministry of defence today.
Minister Costas Papacostas and Serbian counterpart Dragan Sutanovac said that the main aim is to cooperate in training and peace missions and provides for military staff exchange and joint military drills
GREECE
Tax and spending policy ready
Wednesday February 10, 2010
Finance minister presents program to reduce public servants’ pay and alter taxation to bring in more revenue
A range of public spending cuts and tax adjustments were presented by the government yesterday as it attempts to back up its promises to rescue public finances with actions.
Following an announcement last week by Prime Minister George Papandreou that PASOK would take drastic measures to prevent Greece from defaulting, Finance Minister Giorgos Papaconstantinou unveiled more specific policies.
These included plans to cut the supplementary pay of public servants by 10 percent. The salaries of Papandreou and his ministers will also be cut. Papaconstantinou said there would be no more hirings in the public sector this year apart from in the health service.
He also announced changes to the tax system, which will now contain more tax brackets and will lead to higher earners paying more.
The tax-free threshold will be set at 12,000 euros. People earning 12-16,000 euros will pay 18 percent tax, those on 16-22,000 will be taxed at a rate of 24 percent, those making 22-26,000 will pay 26 percent, for salaries of 26-32,000 the rate will be 32 percent and for 32-40,000 it will rise to 36 percent. Anyone earning 40-60,000 euros will pay 38 percent tax and those who make more than 60,000 will be taxed at a rate of 40 percent.
Citizens will need to produce receipts equal to 30 percent of their income in order to ensure that their first 12,000 euros are not taxed. This measure is designed to stamp out tax evasion and the minister said that cash registers would now have to be installed in all businesses, including gas stations and taxis.
Papaconstantinou also said that anyone owning property worth 400,000 to 500,000 euros would pay an extra tax of 0.1 percent and that the rate would rise so that those owning homes valued at more than 800,000 would pay 1 percent of their value in tax annually.
Greek Strikes Defy Papandreou’s Bid to Stop Crisis (Update1)
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By Maria Petrakis and Natalie Weeks
Feb. 10 (Bloomberg) -- Prime Minister George Papandreou’s drive to get Greece’s ballooning budget under control is being challenged in the streets today as striking labor unions shut down schools, hospitals and flights.
Air-traffic controllers and civil-aviation workers are effectively closing down Greek airspace as part of the 24-hour work stoppage by ADEDY, the umbrella group representing about 600,000 civil servants. Some 483 international and domestic flights have been canceled, a spokeswoman for Athens International Airport, Greece’s biggest, said by telephone.
Protests against Papandreou’s plans to freeze wages and reduce benefits come after European Union leaders, set to meet at a summit in Brussels tomorrow, signaled they may aid the country if progress in cutting the deficit is made. Bonds have slumped in Greece and in the euro area’s southern edge as investors examine budget shortfalls across the 16-nation bloc.
“The concern is whether the strike will be a one-off or the first of a long series of street demonstrations involving other parts of the economy,” said Giada Giani, an economist at Citigroup Global Markets in London. “We need to see a prolonged period of strikes before we know whether the government’s willingness will be affected.”
ADEDY opposes Papandreou’s plans and may call out its workers again on Feb. 24, when the biggest private-sector group GSEE holds its own 24-hour strike. Today’s walkout, with rallies in Athens and other cities and towns, is organized labor’s first major challenge since the Oct. 4 election of Papandreou, a socialist who unions backed in the vote.
Union Threats
“Cutting public-sector salaries is an easy political choice,” Spyros Papaspyros, chairman of the ADEDY civil servants union, said this week. “Attacks that start on the public sector will lead to attacks on all.”
The unions are contesting measures demanded by the EU and investors to reduce a deficit of 12.7 percent of gross domestic product last year to within the EU’s 3 percent limit in 2012. Greece’s fiscal woes have stoked concerns that it may need a bailout and helped spark a rout in global stocks.
Spain and Portugal, also suffering from gaping deficits after the worst recession since World War II, have been sucked into a market selloff that has seen the euro fall to a nine- month low against the dollar on concern that swelling shortfalls will stifle Europe’s recovery.
Bonds Jump
Greek, Spanish and Portuguese bonds jumped yesterday after the EU signaled it may aid Greece. The euro rose the most in more than five months and the Greek 10-year bond yield dropped the most since at least 1998.
Greek 10-year yields fell 47 basis points to 5.92 percent at 8:29 a.m. in London, the most since at least 1998. Two-year yields fell 52 basis points to 5.76 percent after sliding 32 basis points yesterday. The Greek-German 10-year yield spread narrowed 55 basis points to 269 basis points.
The premium investors demand to buy Greek debt over comparable German bonds ballooned on Jan. 28 to the highest since 1998 amid concern that Papandreou’s deficit plan relied too much on one-off measures for revenue and not enough on spending cuts.
The benchmark Athens stock index gained 3.7 percent to 1,964.51 at 11 a.m. in Athens, spurred by a 7.9 percent gain in National Bank of Greece SA, the country’s largest lender.
EU Support
Olli Rehn, who today takes over as European economic affairs commissioner, said the EU may offer Greece “support in the broad sense of the word.” In Germany, Michael Meister, financial affairs spokesman of Chancellor Angela Merkel’s Christian Democratic Union, said “we are considering support.”
Hours before the strike, Greek Finance Minister George Papaconstantinou reiterated a hiring freeze for civil servants. He also said the government will offer a tax amnesty on funds held abroad in a bid to boost revenue,
While forbidden by law to take part, police, fireman and coast guard workers said they will also join the work stoppage.
“This game of speculation is being played out at the expense of the worker,” said Yiannis Grivas, the head of the union of tax collectors, which held a 48-hour strike last week and will rally again on Feb. 17.
Still, not all public workers are striking.
More than 64 percent of 2,299 people polled in the two days after Papandreou announced additional deficit-cutting measures believe his government is moving in the right direction and the measures are necessary, according to a Kappa Research poll for To Vima newspaper on Feb. 7.
“Why should I strike and lose 50 euros?” said Effie Strati, a childcare worker at a state-run nursery. She said all her colleagues will be at work.
To contact the reporter on this story: Maria Petrakis in Athens at
Last Updated: February 10, 2010 04:41 EST
Europe can help out cash-strapped Greece without IMF, says Brussels10 February 2010 | 06:03 | FOCUS News Agency
Brussels. The European Commission on Tuesday urged European leaders to offer clear support" for Greece in return for real efforts from Athens to resolve its budget crisis, ruling out the need for IMF help, AFP diclosed, as quoted by EUbusiness.
"We don't need to call in the IMF," EU Economic Affairs Commissioner Joaquin Almunia told the European parliament in Strasbourg.
He said he hoped an emergency economic EU summit in Brussels Thursday would offer "clear support" for Greece "in exchange for clear commitment (from the Greek authorities) that they will meet their responsibilities.
"You don't get support for free," he stressed, but "in exchange for clear commitment (by the Greek authorities) ... that they will meet their responsibilities."
The markets have been wondering for weeks whether the EU will offer Greece financial aid in order to protect the eurozone as a whole.
Germany, the eurozone's biggest economy, is preparing an aid plan to help Greece resolve its massive debt problems, the Financial Times Deutschland reported.
In its Wednesday edition, the newspaper said German Finance Minister Wolfgang Schaeuble was working on both a bilateral basis and at the European level on putting together a package to help Athens.
Almunia warned that Greece's fiscal crisis poses a serious risk to the rest of the 16-nation eurozone.
The Greek situation is a "matter of common concern for the eurozone and the EU as a whole," he said, stressing that serious and persistent internal and external imbalance "threatens stability" in the country.
This in turn presents a "serious risk of spillover into other parts of the euro area."
Greece's under-fire Socialist government is struggling to slash a debt mountain expected to hit over 290 billion euros (396 billion dollars) this year.
The Greek labour minister said Tuesday he would raise the average rate of retirement by two years to 63 by 2015 as part of a series of measures to clean up its indebted public sector.
The moves are aimed at taming the country's massive debt and a runaway public deficit equal to 12.7 percent total economic output, which have shaken the euro and put pressure on Greek fund raising efforts.
EU Commissioner Almunia insisted that recourse to the International Monetary Fund could and should be avoided.
"If we have appropriate levels of coordination, if we've got political commitment, if we use the instruments that we have available ... we do have more than enough instruments to do what's needed," he said.
But Swedish Finance Minister Anders Borg maintained that discussion of an IMF role in resolving Greece's debt crisis should not be ruled out.
Speaking in Paris after meeting French counterpart Christine Lagarde, Borg said "discussing the role for the IMF in dealing with the situation shouldn't be taboo," one of his spokeswomen told AFP.
"Greece has taken a first step toward restoring public finances and rebuilding market confidence but much more remains before confidence is restored," he told Sweden-based journalists in a telephone conference.
The IMF said last week that a Greek government austerity package aimed at restoring the country's financial health was "appropriate."
The measures include a public salary freeze, an increase in petrol taxes and a hike in the retirement age.
The 27 EU heads of state and government will meet in Brussels on Thursday for a crisis summit, with the Greek budget crisis expected to be to the fore.
Almunia said he would like EU states to make "a clear demand on all member states, starting with Greece, that they fulfill their obligations and put into practice the measures they have promised to adopt on economic and monetary issues."
Greece says not counting on any new EU rescue cash
LONDON, Feb 10 (Reuters) - Greece is not counting on any new rescue funds from the European Union, Economy Minister Louka Katseli told Reuters television in an interview on Wednesday.
"There is no question of a deal," Katseli said. "We have an ongoing collaboration with the EU ... towards the implementation of our stability and growth programme, which we delivered, it was approved."
She spoke as EU ministers prepared to discuss a potential response to Greece's deepening debt crisis later in the day ahead of an EU summit on Thursday. In Athens, thousands of Greek civil servants marched during a 24-hour strike over a planned wage freeze, testing government resolve to tackle a debt crisis which has shaken the euro zone.
ECB Council to Discuss Greek Fiscal Crisis Tonight, People Say