Europe, China Agree Currency Deal

Europe Risks Energy Crisis From Green Subsidies, CEOs Say

Coast guard spokesman Marco Di Milla says “a good number” of the estimated 200 people have been rescued. He says the coast guard received a satellite phone call from the boat and was able to locate it based on the satellite coordinates. A Maltese armed forces statement says that since the boat was in Maltese search and rescue waters, a Maltese aircraft was sent up and reported that the boat had capsized and that “numerous” people were in the water. The aircraft dropped a life raft and a patrol boat soon arrived at the scene. ALSO THIS WEEK: Italy detains suspected boat captain as death toll hits 275 Egypt’s state news agency says the coast guard received a call for help Friday from a boat carrying the migrants and naval forces went out to the rescue. It said the survivors were 72 Palestinians, 40 Syrians, and four Egyptians. The nationalities of those who drowned were not immediately available. Officials said rescue efforts continued. At least 70,000 Syrians are registered in Egypt as refugees. Many non-registered, including thousands of Palestinians who also fled the war in Syria, use the country as a stop before making the perilous sea trip to Europe. Thousands of Egyptians also make the sea journey to flee poverty and high unemployment.

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Enlarge Image Mr. Borges arrived at the fund in November 2010, six months after the first Greek bailout was agreed. He left 12 months later citing ill healthbut said in the interview that the real reason was his marginalization over the design of the 73 billion (roughly $99 billion) Greek program. Brussels Beat The Other Big Brake on Euro-Zone Growth: Private-Sector Debt (8/15/13) The Washington-based IMF joined the European Commission and the European Central Bank as a “troika” of institutions in handling the Greek, and subsequently the Irish, Portuguese and Cypriot bailouts. It started well. When the IMF team arrived in Athens in April 2010, one European official there described it as “almost like the U.S. Marine Corps arriving in a war zone.” The fund and its expertise, he said, were “indispensable.” But it wasn’t long before tensions emerged. The fund, Mr. Borges said, pulled a template program from the shelf, failing to consider that Greece’s policy options were severely limited by its membership of the euro. “Greece is the saddest case of all,” Mr. Borges said. “The program was wrong from the start.” Three years on, troika staffers now recount how they were involved in shouting matches over Greek growth projections, bank restructurings and public debt-to-output ratios. “We had to negotiate the figuresThat’s not how it is supposed to work,” a European official said, referring to hourslong debates about projecting Greece’s 2013 growth rate. A big source of tension has been the IMF’s Debt Sustainability Analysis, which is heavily based on projections of the ratio of government debt to economic output. IMF rules prevent the fund from giving aid to states unable to repay their debts, so this analysis has been critical in ensuring the fund continues lending.

IMF and Europe Part Ways Over Bailouts

debt loses some appeal in Hong Kong In June, China struck a similar agreement with the Bank of England worth up to 200 billion yuan. The deal with the ECB comes as political gridlock in the U.S. weakens the U.S. dollar against many other global currencies. A spokesperson for the ECB said the deal had been in the works for the last few months. China’s wine obsession spurs Bordeaux sales The yuan, also called the renminbi, currently trades directly with the U.S. dollar, the Australian dollar and the Japanese yen . In September, the Bank for International Settlements announced the Chinese yuan was the ninth most traded currency in the world. The yuan was involved in 2.2% of foreign exchange trading worldwide in April, the period examined by the report, more than double its share in April 2010. The dollar was involved in 87% of all trades, the euro was part of 33% of trades, and the Japanese yen was involved in 23%.

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How can we dream of an industrial renaissance with such a differential? Enel SpA (ENEL) Chief Executive Officer Fulvio Conti called for an end to Robin Hood taxes and aid. Id rather see the Sheriff of Nottingham for most of the legislation. Lets restore normal and eliminate state intervention and subsidies. The EU started a debate in March on a new set of climate and energy rules as the 28-nation bloc seeks to ensure security of supply and cut greenhouse gases. A framework for the decade to 2030 is needed to give investors legal certainty, spur innovation and prepare for a global climate deal, the European Commission said in a consultation paper at the time. At the same time, the EU is considering options to overhaul the 53 billion-euro ($72 billion) carbon market after emission-permit prices slumped to a low of 2.46 euros in April amid a record glut of permits. In addition to broader reforms in coming years, the emissions-trading system needs a short-term fix, GDF CEO Gerard Mestrallet said. Without a carbon signal, we will not have any visibility, and we will not be in a position to invest. Carbon Collapse The collapse of the carbon price has made coal, the dirtiest source of power, also one of the cheapest. The switch to coal and requirements to buy renewable power have sapped the profitability of natural-gas-fired plants, leading to the widespread shutdown of combined-cycle gas turbine plants, which are among the cleanest. Fifty-one gigawatts of the blocs electricity capacity is mothballed, equivalent to the combined capacity of Belgium , the Czech Republic and Portugal , the utilities said in a brochure given to reporters today. Energy consumers should be billed only for energy, said EON CEO Johannes Teyssen who also is president of the Eurelectric industry lobby. At present European consumers help pay for subsidies to promote renewable-power generation through larger energy bills. Bigger Bills More than 50 percent of the bill European consumers are paying today has nothing to do with power generation and networks, and thats because of political decisions, said Iberdrolas Ignacio Galan. That has already created a lot of distortions. Energy bills rose 17 percent in four years for domestic consumers and 21 percent for industrial consumers, the utilities said today in the brochure. European Union leaders in May urged faster integration of the blocs power and gas markets as a way to lower costs after the U.S.