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Is Greece Edging Closer To Euro Exit?

Written By Unknown on Selasa, 17 Februari 2015 | 16.01

No-one expected the Eurogroup summit to end all the differences between Greece and the eurozone countries behind its bailout.

But, equally, no-one really expected it to end in the kind of acrimony we saw earlier in Brussels.

In the event, what we have witnessed is yet another demonstration of what happens when the euro collides with democratic politics.

It all comes back down to the key issue Syriza campaigned on in the Greek elections last month: ending the current €240bn bailout programme and replacing it with something more humane.

Most of Greece's euro counterparts have insisted that to do so is simply impossible - that if Greece wants to borrow more cash and continue to enjoy financial support from the European Central Bank, it must sign up to an extension of the existing programme, due to expire at the end of the month.

However, doing so represents what Yanis Varoufakis, the Greek finance minister, has described as a red line.

Instead, he would rather agree to a separate "bridging loan" without the full conditions attached to the existing bailout (but with, he insists, "some conditionality, to build trust").

He claims that he was privately given such a promise by the European Commissioner in charge of the economy, Pierre Moscovici, last week.

But, in Mr Varoufakis' rendering, at the Eurogroup meeting on Monday afternoon, Mr Moscovici's draft proposal was replaced by Eurogroup head, Jeroen Djisselbloem, with something else entirely - an alternative communique that pledged that Greece should continue with the existing programme.

A copy of this document, with Mr Varoufakis' disapproving penmarks scrawled all over it, was leaked to the press.

In chaotic scenes, the meeting broke down within minutes.

Given it was billed as the make-or-break moment for the euro, the collapse of talks looks, on the surface of it, to be deeply worrying.

However, the reality is that Monday's deadline was always a self-imposed one.

The talks will continue in the coming days, and there is likely to be another Eurogroup meeting to confirm things as soon as something can be hatched behind the scenes.

But with every setback, worries grow that Greece could be edging slowly towards a possible default - or indeed a chaotic exit from the single currency.

There are still many more levers to be pulled by both sides between now and then. But the fact that a key meeting could break down so easily is a reminder that things will hardly be plain sailing in the coming weeks.

In other words, things are likely to get even worse before they get any better.

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London Population Growth Drives Homebuyers Out

By Jonathan Samuels, Sky News Correspondent

London's population is set to reach a record high of 8.6 million people, with housing expected to be a major General Election issue.

With limited space and prices that have gone through the roof, one survey suggests bricks and mortar could be as significant as the NHS in the ballot this May.

According to research by estate agents Your Move and Reeds Rains, one in six tenants (16%) say housing is the issue most likely to affect their vote.

Sky News visited what has been billed as the smallest house currently on the market in the UK. The tiny one-room home in Islington is just over 150 square feet, with an asking price of £275,000.

You have to climb on to the kitchen surface to get into bed, the dining room is a pull-out table, and you can touch opposite walls at the same time.

"Obviously the price is quite absurd but I don't think the project is absurd," says architect Chris Dyvik, who took inspiration from caravans and boats.

"You might see similar types of compact units being built. People need to be creative in London to survive with these housing prices."

It is unlikely anyone would live in such a place for more than a few nights at a time, but the fact that such a small space can command such a big asking price means questions continue to be asked about London's property bubble.

Last year, some 60,000 30-somethings left London, the highest number ever. Soaring house prices have put homes out of reach for most first-time buyers.

According to the Office for National Statistics, 67% of the 25 to 34 age group were homeowners in 1991. By 2012 this had dropped to 43%.

George Cheetham got fed up with prices going up and up during the buying frenzy in London last year.

"Week-by-week, house prices grew," he said.

"You'd go for a viewing in the same street one week and by the next it had gone up by about £10,000."

He moved to Bristol, buying a three-bedroom flat with a garden, something which would have been impossible in the capital.

"It just didn't seem a realistic market to buy in, it was very easy for us to say enough is enough" he said.

Soaring prices have been partly driven by foreign investors.

Estate agent Savills estimates up to 70% of newly-built properties in central London are bought by foreign investors, with many flats in prime locations lying empty.

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Gallery: Property: What £1m Can Buy You

We take a look at what £1m can buy you around the UK. For example this one bedroom flat in Chelsea's Lennox Gardens, London, at exactly £1m. All photos courtesy of rightmove.co.uk

The modestly-sized flat is being sold in one of London's most sought-after areas. Pic: rightmove.co.uk

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Greece Facing 'Disaster' As Talks Break Down

Greece has been warned of an impending "disaster" after crisis talks between the country's finance minister and Eurozone counterparts broke up without agreement in Brussels.

The country rejected a draft proposal put forward by European finance ministers that would see an extension of Greece's international bailout package.

Dutch finance minister Jeroen Dijsselbloem, who chaired the meeting, says Athens now has until Friday to request an extension or risk seeing the bailout expire at the end of the month.

If that happens the Greek state and its banks could face a looming cash crunch.

Greece's finance minister, Yanis Varoufakis, said negotiations will continue, adding he has "no doubt" an agreement will be reached that would be "therapeutic to Greece and for Europe".

But he added his country will not implement recessionary measures such as pension cuts and VAT hikes.

Greece's anti-austerity Syriza government recently swept to power on a promise to scrap the bailout as it stands.

But with Greece running out of money, Maltese finance minister Edward Scicluna said the country faces "disaster" unless it extends the bailout, which is due to end on 28 February.

"Greece has to adjust, to realise the seriousness of the situation," he said.

"It all depends on the realisation by Greece of the real seriousness of the situation because time is running out."

Mr Dijsselbloem said a "positive outcome" was still possible if Greece asked for the extension by the end of the week.

He said further talks are dependent upon Greece requesting a bailout.

"Given the timelines we have... we can use this week but that is about it," he said.

"The general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the programme."

Many in the financial markets think a failure to secure agreement will leave Greece little option but to leave the euro.

European stock markets fell on Tuesday in reaction to the deadlock, with Greek banks suffering losses of up to 10% in early trading.

Mr Varoufakis and other European finance ministers are scheduled to remain in Brussels for routing talks on the EU economy today.

Sky's Economics Editor Ed Conway said: "The talks have broken down in rather acrimonious fashion.

"The ball is once again in Greece's court. European finance ministers leaving the talks said it was now up to Greece and its prime minister and ministers to request an extension to the deal.

"Otherwise the Eurogroup are not going to continue talking and there is the real prospect increasingly of Greece either defaulting or leaving the euro.

"The big problem is that Greece is potentially going to run out of money quite soon."

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Ex-HSBC Boss Lord Green To Quit Industry Body

Written By Unknown on Senin, 16 Februari 2015 | 16.01

Lord Green is to step down from a financial services industry body amid claims HSBC enabled tax avoidance while he was in charge.

A former trade minister in the coalition government, the peer will step down as chairman of TheCityUK's Advisory Council with immediate effect.

He was the chairman of HSBC from 2006 to 2010, and is facing considerable pressure to answer questions about the behaviour of the bank's Swiss division.

Sir Gerry Grimstone, who will be succeeding Lord Green in his TheCityUK role, said: "Stephen Green is a man of great personal integrity who has given huge service to his country and the City.

"He doesn't want to damage the effectiveness of TheCityUK in promoting good governance and doing the right thing, so has decided to step aside from chairing our Advisory Council."

Sir Gerry also stressed that Lord Green's departure "was entirely his own decision".

In a speech to the Welsh Labour conference in Swansea, Ed Miliband warn that "he will not back down" in his campaign on tax avoidance.

The Labour leader also launched a fresh attack on the Prime Minister, who he claimed is "turning a blind eye" to the practice, which mainly benefits the rich and powerful.

Mr Miliband welcomed Lord Green's decision to step down.

He said: "I think it is right that he has done that. I think the bigger question is David Cameron and the questions he has got to answer.

"He has still not accounted for why he appointed Lord Green in the first place, when it was already public knowledge about what happened at HSBC.

"He has still not explained whether over the three years or so that Lord Green was a minister, whether he actually asked about what was going on about HSBC when it was public knowledge.

"The questions are mounting for David Cameron to answer."

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HSBC Issues Apology Over Banking Standards

HSBC has taken out adverts in national newspapers offering "sincerest apologies" over past activities at its Swiss operations.

In the open letter to its customers, shareholders and colleagues, HSBC's group chief executive Stuart Gulliver described recent media coverage about practices at the Swiss Private Bank eight years ago as a "painful experience".

However, the Business Secretary has said he wants greater assurances about tax transparency.

Vince Cable told Sky's Murnaghan programme that what emerged is "striking and unacceptable" - and he has called on former HSBC boss Lord Green to answer specific allegations about the business.

The full-page HSBC advert states: "We would like to provide some reassurance and state some of the facts that lie behind the stories.

"The media focus has been on historical events that show the standards to which we operate today were not universally in place in our Swiss operations eight years ago.

"We must show we understand that the societies we serve expect more from us. We therefore offer our sincerest apologies."

The bank added that since 2008 it had established a "much tighter central control around who are our customers".

It said it had also implemented tougher standards around tax transparency.

Earlier this week Mr Gulliver sent a memo to the bank's staff saying the revelations were painful and frustrating.

The adverts come amid a political row over tax avoidance, with Labour leader Ed Miliband on Saturday vowing to carry out an inquiry into the UK's tax authority should his party win power in the next General Election.

Mr Miliband argued that people not paying their fair share of tax had left "a £34bn hole in the nation's finances".

Promising an "aggressive" review into Her Majesty's Revenue and Customs (HMRC) if his party wins in May, Mr Miliband pointed to suspicions of "sweetheart deals" with wealthy firms.

And the shadow chancellor, Ed Balls, has told Sky News a "crackdown" is needed because there had only been one prosecution out of more than a thousand cases of tax avoidance at HSBC's private Swiss arm.

"Was that because the Conservatives were back-peddling, brushing it under the carpet? Was it because the HSBC boss had now become a minister? Was it because their donors were involved in that HSBC activity? I think we need answers from David Cameron and George Osborne, and we need them soon," he added.

This week, Mr Miliband seized on allegations about tax avoidance by HSBC clients to brand Prime Minister David Cameron a "dodgy Prime Minister, surrounded by dodgy donors".

Speaking on Sky News, Mr Cable said: "I think the worst period we went through was 10 years ago, when all the leading banks were offering industrial-scale tax avoidance to British citizens to avoid British tax - and they were doing it out of London.

"There are still things happening that should definitely not be happening."

After a week of clashes between Mr Miliband and Mr Cameron, the former Tory chancellor Ken Clarke said there needs to be agreement on a "more sensible and defensible" system for funding political parties.

Mr Clarke told The Observer newspaper that the Conservatives should break their reliance on wealthy donors and embrace the need for more state funding of politics.

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Rival Firm Snaps Up Zolfo Cooper In Â£60m Deal

By By Mark Kleinman, City Editor

The consolidation of London's professional services industry will accelerate this week when a division of Zolfo Cooper, an adviser on corporate restructurings, is snapped up in a deal worth just under $100m (£65m).

Sky News has learnt that AlixPartners, a New York-based advisory firm, is close to agreeing a takeover of the UK and European arm of Zolfo Cooper, an independent player in a sector increasingly dominated by global heavyweights.

Insiders said that AlixPartners had scheduled a board meeting on Sunday to approve the deal, with an announcement about the transaction expected as early as Monday.

If completed, the takeover will bring together two of the most prolific City advisers on the restructuring of companies which have run into financial or operational difficulties.

Zolfo Cooper has in recent weeks been working on a deal to secure the future of Intertain, the leisure group behind the Walkabout chain of bars.

The company is owned by Better Capital, the investment vehicle set up by Jon Moulton, who was forced to place another of his companies, City Link, into administration on Christmas Eve.

Zolfo Cooper's European operations are operated using the firm's name under licence from the US firm of the same name.

The takeover of its London-based operations is expected to crystallize significant payouts for its partners, although they are likely to remain with the combined group.

Among the firm's other assignments are the restructuring of Stemcor, the steel trading company which is part-owned by Margaret Hodge, the Labour MP who chairs the Commons Public Accounts Committee.

Last year, Zolfo Cooper also worked on a deal which saw dozens of Strada restaurants change hands.

For AlixPartners, the acquisition will be an important step towards achieving a five-year target of becoming the "leading global advisory, consulting, and interim management firm specialising in restoring, protecting, and enhancing corporate performance and value".

Employing more than 1200 people, AlixPartners is itself majority-owned by CVC Capital Partners, the private equity group which is the largest shareholder in Formula One motor racing.

CVC took control of AlixPartners in June 2012, with the financial terms of the deal remaining undisclosed.

Private equity investors have shown increased interest in professional services groups, while the big four accountancy firms have also been diversifying their offering by swallowing specialist players in areas such as cyber-security, investor relations and restructuring.

AlixPartners and Zolfo Cooper both declined to comment on Sunday.

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ITV's Norman Courted Over Tesco Chairmanship

Written By Unknown on Minggu, 15 Februari 2015 | 16.01

By Mark Kleinman, City Editor

Tesco has approached the former Conservative MP Archie Norman about becoming its chairman as the UK's biggest retailer nears a decision on a crucial component of its revival plan.

Sky News has learnt that Tesco has been holding "active talks" with Mr Norman about taking over from Sir Richard Broadbent, although he is not the only candidate in the frame for the role.

The company, which is in the process of shedding thousands of jobs as it attempts to rebuild its reputation in the wake of a commercial trading scandal, is said to be keen to decide on its next chairman by the end of the month.

John Allan, the former chairman of Dixons Retail, also remains in talks with Tesco's board about the job, according to a person close to the process.

Mr Norman's name has been associated with the impending vacancy ever since Sir Richard indicated last autumn that he would step down this year.

Now the chairman of ITV, he spent eight years as a Conservative MP during the party's last period in Opposition.

He made his name as a businessman while chief executive and then chairman of Asda between 1991 and 2000, with subsequent roles including chairmanships at Energis and HSS, the tool-hire chain.

Mr Norman would be a popular choice among Tesco shareholders, many of whom have bemoaned the lack of retail experience on its board.

One hurdle to Mr Norman taking the role could be his existing range of international business interests, which include chairing the London operation of Lazard, the investment bank, the toy retailer Hobbycraft, and serving as a director of Target and Coles in Australia.

If he took the Tesco job he would almost certainly have to relinquish some of these positions.

Tesco's recruitment process remains fluid and it still remains possible that another person could become its new chairman.

A decision could be announced as early as next week.

Sir Ian Cheshire, the former chief executive of DIY retailer Kingfisher, was also approached about the job but withdrew from the process after preliminary talks.

Sir Richard's intention to step down emerged after Tesco overstated profits by £263m because of its inaccurate booking of revenue from suppliers.

The Serious Fraud Office has launched a formal criminal investigation, which sources say is likely to take about a year to conclude, while the Groceries Code Adjudicator and the Financial Reporting Council are undertaking separate inquiries

Tesco suspended nine executives over the affair, four of whom have left the company, with most of the rest now reinstated.

The retailer's next chairman will have to grapple with the fallout from the supplier scandal as well as helping Dave Lewis, the new chief executive, navigate what analysts say is the toughest environment for big food retailers for many years.

Last month, Mr Lewis outlined proposals to relocate Tesco's head office, close dozens of stores and terminate its defined benefit pension scheme in an effort to save costs.

He also plans to sell a stake in Dunnhumby, its customer loyalty arm, and has announced a long-term price-cutting initiative across hundreds of core grocery items.

Sky News revealed two weeks ago that Mr Lewis had begun a cull of head office staff which is expected to involve thousands of job cuts.

The debate over Tesco's decline was recently reignited when Sir Terry Leahy, the former chief executive, blamed his successor, Philip Clarke, for "a failure of leadership".

A series of profit warnings last year led to Mr Clarke being sacked, but analysts pointed out that some of Tesco's least successful initiatives in recent years, including its expansion into the US and China, had taken place during Sir Terry's tenure.

Earlier this month, Tesco said it would pay more than £2m in "liquidated damages" to Mr Clarke and Laurie McIlwee, its former finance director, after concluding that there was no legal basis for withholding the payments.

The process of recruiting a new chairman is being led by Patrick Cescau, Tesco's senior independent director, along with JCA Group, a City headhunter.

Tesco and Mr Norman declined to comment.