Date: Tuesday 08 May 2012
Post-election chaos in Greece provoked new fears last night that the debt-ravaged nation would not keep its commitments to Europe and may be forced out of the euro. A day after Greeks voted overwhelmingly against further austerity, the Athens stock-market plunged, and Citibank said that there was now a 75% probability of Greece leaving the Eurozone in 12 to 18 months. The biggest party to emerge from the electoral calamity admitted that it could not form a government. Nouriel Roubini, a widely followed economist at New York University, said on Twitter: “Greek membership in EZ is now at risk with serious contagion risks for the rest of the periphery. EZ policy uncertainty now sharply higher,” says The Times.
David Cameron is to declare that there is “no going back” on harsh spending cuts after seeing the leaders of France and Greece swept from power by public anger at austerity. The Eurozone is in “extreme trouble” and headwinds from the turmoil threaten Britain’s recovery, he will warn. In a rare joint appearance with Nick Clegg, the Prime Minister and his Deputy will rededicate themselves and their parties to protecting the country from “the financial storm”. Two years on from their sun-dappled press conference in the Downing Street rose garden, the Liberal Democrat and Conservative leaders will restate the case for the Coalition to “rescue the economy from the mess left by Labour,” The Telegraph writes.
A new Eurozone crisis is looming as Spain signalled on Monday it was ready to bail out ailing banks after markets shrugged off the election results in France and Greece. Prime minister Marian Rajoy indicated the Government was ready to intervene to save banks wrestling with the collapse of the housing market. Bankia, Spain's fourth biggest bank, is the first in line for state aid. Rodrigo Rato, chairman and former IMF managing director, swiftly resigned after it was disclosed the finance ministry was preparing to refinance the bank and introduce legislation to protect the balance sheets of others. Spain, which also signalled it could dock its only aircraft carrier to save €30m a year, is already struggling to cope with an austerity drive that has pushed the jobless total up to nearly 25% of the workforce. Mr Rajoy insisted that any bank bail-out would not compromise the tough targets set by Brussels to reduce the budget deficit. Peter Kenny, managing director at Knight Capital, said Spain's action was positive because "it's them taking ownership of their own issues," The Telegraph reports.
Israeli Prime Minister Benjamin Netanyahu reached a surprise agreement with the Kadima opposition party for a unity government in the early hours of this morning, jettisoning plans for an early election. Kadima agreed to a deal in which Shaul Mofaz, who only took over as his party’s leader six weeks ago, would become deputy prime minister and a minister without portfolio in the new cabinet. The two leaders negotiated the deal even as the Knesset, Israel’s parliament, was voting through a motion to end its current session to clear the way for the early election Mr Netanyahu had said he wanted, The Times reports.
The resurgence in the housing market ran out of steam last month as levels of first-time buyers dropped and concerns about the economy increased. A housing survey by the Royal Institution of Chartered Surveyors showed that 19% more surveyors had reported falls rather than rises in house prices across the country in April. “Expectations for future prices also reached their lowest level this year,” it added, “with 17% more surveyors predicting further falls in value.” Although London was the only part of the country where prices rose, it was at the slowest rate since the middle of 2011, the institution said. Elsewhere, prices were either flat or in decline, with the West Midlands and Wales recording the most significant drops in prices, according to The Times.
Tullow Oil said that the Ngamia-1 exploration well onshore in Kenya – a 50:50 joint venture with Toronto-listed Africa Oil – had found more crude oil buried in the rock beneath the soil of Turkana than the company had previously announced. Tullow said: "Many leads and prospects similar to Ngamia have been identified and, following this discovery, the outlook for further success has significantly improved." The Ngamia structure is the first prospect to be tested as part of a multi-well drilling campaign in Kenya and Ethiopia. Al Stanton, an analyst at Royal Bank of Canada, said: "Considerable uncertainty still surrounds the commerciality of the Ngamia oil accumulation but, given the scale of their [Tullow and Africa Oil's] acreage position and repeat potential, we expect the participants' stocks to react strongly to the news," The Telegraph says.
Google's Android mobile operating system breached Oracle's copyright, a jury has found, in a $1bn (£630m) court battle between the two technology giants. Oracle is suing Google for breaching seven patents and copyright claims relating to Java, the computer programming language Oracle took ownership of when it bought Sun Microsystems in 2010. However, it has only scored a partial victory in what is a three-part courtroom drama. The jury in San Francisco, who were asked to answer four questions about the copyright in nine lines of Java code that are also used in Android, were unanimous on three questions but reached deadlock on a fourth. Jurors could not agree whether Google's breach amounted to "fair use" under copyright law, landing a blow to Oracle's chances of winning substantial damages, according to The Telegraph.
French president-elect François Hollande appeared to be on a collision course with Germany last night over his election pledge to renegotiate Europe’s fiscal pact, which imposes strict budgetary discipline on member states. German chancellor Angela Merkel issued a stark warning to France’s first Socialist head of state in 17 years, as she insisted it was not possible to renegotiate the debt crisis pact, signed by the 17 nations that use the euro – and nine other European countries – in March. Ms Merkel, speaking yesterday, said: “We in Germany are of the opinion, and so am I personally, that the fiscal pact is not negotiable. “It has been negotiated and has been signed by 25 countries. We are in the middle of a debate to which France, of course, under its new president will bring its own emphasis. But we are talking about two sides of the same coin – progress is only achievable via solid finances plus growth.” Less diplomatically, Ms Merkel’s Christian Democrat parliamentary party leader, Volker Kauder, said: “Germany is not here to finance French election promises,” The Scotsman reports.
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