Citibank plans to close the account Venezuela uses to make international payments, President Nicolas Maduro said on Monday, accusing the US-based bank of a &quot;financial blockade&quot;. 
 
&quot;Citibank, with no warning or communication, says that it is going to close the Central Bank and Bank Of Venezuela account. That is what you call a financial blockade,&quot; the embattled president said in televised remarks. 
 
He said the move amounted to an &quot;inquisition&quot; by US President Barack Obama&#39;s administration.&nbsp;Maduro said his South American nation, a major oil producer, uses the account to make payments &quot;within 24 hours, to other accounts in the United States and worldwide&quot;. 
 
Maduro&#39;s socialist government has often claimed that US &quot;right wing&quot; interests and local business elites were trying to blockade his state-led economy and prevent Venezuela&#39;s access to international credit. 
 
&quot;Do you think they are going to stop us by putting in place a financial blockade? No, ladies and gentlemen, nobody stops Venezuela. With Citibank or without it, we are moving forward. With Kimberly or without, we are moving.&quot; 
 
Venezuela&#39;s government said just hours earlier that it would take over operations at facilities where US consumer goods giant Kimberly-Clark just shut down, citing unworkable economic conditions.&nbsp;The American company announced on Saturday it would cease production, saying that it was impossible to get enough hard currency to buy raw materials, and that inflation was surging. 
 
&quot;We are going to sign, at the workers&#39; request... to authorise immediate occupation of the workplace known as Kimberly-Clark de Venezuela... by its workers,&quot; Labor Minister Oswaldo Vera said at the facility&#39;s plant in the central city of Maracay. 
 
The country&#39;s economy has been hard hit by the plunging value of its main export, oil. Analysts also criticise its state-led economy of gross mismanagement leading to shortages of toilet paper, diapers and food. 
 
Vera signed the document to loud cheers and&nbsp;he said machines would be back in operation within hours.&nbsp;In a sign of Maduro&#39;s concern at mounting social unrest, the president on Thursday replaced the head of the National Guard.&nbsp; 
 
The Venezuelan opposition launched efforts to remove the president after winning control of the legislature in January.&nbsp;But Maduro has challenged his rivals through the Supreme Court, which they accuse him of controlling. 
 
(AFP)

He accuses the US-based bank of a 'financial blockade', says the move amounts to an 'inquisition' by the Obama administration

Citibank plans to close the account Venezuela uses to make international payments, President Nicolas Maduro said on Monday, accusing the US-based bank of a "financial blockade". "Citibank, with no warning or communication, says that it is going to close the Central Bank and Bank Of Venezuela account. That is what you call a financial blockade," the embattled president said in televised remarks. He said the move amounted to an "inquisition" by US President Barack Obama's administration. Maduro said his South American nation, a major oil producer, uses the account to make payments "within 24 hours, to other accounts in the United States and worldwide". Maduro's socialist government has often claimed that US "right wing" interests and local business elites were trying to blockade his state-led economy and prevent Venezuela's access to international credit. "Do you think they are going to stop us by putting in place a financial blockade? No, ladies and gentlemen, nobody stops Venezuela. With Citibank or without it, we are moving forward. With Kimberly or without, we are moving." Venezuela's government said just hours earlier that it would take over operations at facilities where US consumer goods giant Kimberly-Clark just shut down, citing unworkable economic conditions. The American company announced on Saturday it would cease production, saying that it was impossible to get enough hard currency to buy raw materials, and that inflation was surging. "We are going to sign, at the workers' request... to authorise immediate occupation of the workplace known as Kimberly-Clark de Venezuela... by its workers," Labor Minister Oswaldo Vera said at the facility's plant in the central city of Maracay. The country's economy has been hard hit by the plunging value of its main export, oil. Analysts also criticise its state-led economy of gross mismanagement leading to shortages of toilet paper, diapers and food. Vera signed the document to loud cheers and he said machines would be back in operation within hours. In a sign of Maduro's concern at mounting social unrest, the president on Thursday replaced the head of the National Guard. The Venezuelan opposition launched efforts to remove the president after winning control of the legislature in January. But Maduro has challenged his rivals through the Supreme Court, which they accuse him of controlling. (AFP)

Venezuela President: Citibank planning to close account used to make international payments

China&#39;s growth slipped to a new seven-year low of 6.6 per cent in the second quarter, according to an AFP survey, despite government efforts to spur activity in the world&#39;s second-largest economy. 
 
The forecast for expansion in gross domestic product (GDP), based on a poll of 17 economists, represents an easing from 6.7 per cent in the first three months of the year. 
 
As the world&#39;s biggest trader in goods, China is crucial to the global economy and its performance affects partners from Australia to Zambia. Investors worldwide have been worried by its slowing growth. 
 
&quot;Momentum remains downward, so if the government would like to maintain a 6.5 per cent minimum growth rate in the next several years, more aggressive stimulus will be needed,&quot; Brian Jackson, Beijing-based economist at IHS Economics, said. &nbsp; 
 
The slowdown comes as policymakers seek to retool the economy, embracing weaker growth as a trade-off for structural reforms to wean the country off cheap exports and massive government spending in favour of domestic consumption. 
 
GDP expanded 6.9 per cent in 2015 - its weakest in a quarter of a century - and the government has targeted growth in a range of 6.5-7 per cent for this year. The AFP poll forecasts China will just meet the goal, predicting 6.6 per cent. 
 
Official Chinese figures are viewed with widespread scepticism, and just days ago the government altered its growth calculation method for the second time in less than a year. 
 
&quot;China&rsquo;s quarterly GDP releases are being greeted with increasing scepticism and for good reason,&quot; Capital Economics said in a recent research report. &quot;The speed of growth that it points to is increasingly hard to believe given the clear structural drags that the economy is facing.&quot; 
 
Still, most wave off fears of a &quot;hard landing&quot; for China.&nbsp;&quot;We expect data for the second quarter of 2016 to further reinforce our view that China has not collapsed,&quot; PNC Financial Services Group senior international economist Bill Adams said in a research note, though he added the country still faces &quot;daunting challenges&quot;. 
 
Loosening seen 
 
Lower commodity prices, a decline in private spending and weak exports all dragged on the economy in the April-June period, analysts said.&nbsp; 
 
Adding to the uncertainty, recent flooding in China could cut into industrial production although at the same time give the government the opportunity to build infrastructure for water control, which could be positive for longer-term growth. 
 
&quot;Infrastructure will likely remain a key sector that policy makers rely on to stabilise growth,&quot; Rong Jing, an economist at BNP Paribas in Beijing, said.&nbsp;Britain&#39;s decision to exit the European Union, could actually benefit China, some analysts argue. 
 
&quot;If &#39;Brexit&#39; results in slower growth in the UK and anxiety in the developed West and in emerging Europe, the Chinese share of global growth could rise even higher,&quot; Andy Rothman, investment strategist at Matthews Asia, said in a research note. 
 
In order to maintain expansion, the central bank must maintain its loose monetary policy, possibly by again cutting the proportion of funds banks must set aside as reserves as well as interest rates - which it has already lowered six times since late 2014. 
 
An annual summer gathering of Chinese leaders at the beach resort of Beidaihe could yield other economic policies after the State Council, or cabinet, called for support to boost private investment, analysts said.&nbsp; 
 
&quot;The government is likely to introduce further loosening but not necessarily strong stimulus,&quot; Zhao Yang, an economist at Nomura in Hong Kong, said.&nbsp;&quot;Economic growth will likely continue to slow down in the next two to three years,&quot; he said, adding the level could drop to 5.0 per cent or even less. 
 
(AFP)

An AFP survey, based on a poll of 17 economists, says the slowdown comes as policymakers opt for weaker growth but structural reforms

China's growth slipped to a new seven-year low of 6.6 per cent in the second quarter, according to an AFP survey, despite government efforts to spur activity in the world's second-largest economy. The forecast for expansion in gross domestic product (GDP), based on a poll of 17 economists, represents an easing from 6.7 per cent in the first three months of the year. As the world's biggest trader in goods, China is crucial to the global economy and its performance affects partners from Australia to Zambia. Investors worldwide have been worried by its slowing growth. "Momentum remains downward, so if the government would like to maintain a 6.5 per cent minimum growth rate in the next several years, more aggressive stimulus will be needed," Brian Jackson, Beijing-based economist at IHS Economics, said. The slowdown comes as policymakers seek to retool the economy, embracing weaker growth as a trade-off for structural reforms to wean the country off cheap exports and massive government spending in favour of domestic consumption. GDP expanded 6.9 per cent in 2015 - its weakest in a quarter of a century - and the government has targeted growth in a range of 6.5-7 per cent for this year. The AFP poll forecasts China will just meet the goal, predicting 6.6 per cent. Official Chinese figures are viewed with widespread scepticism, and just days ago the government altered its growth calculation method for the second time in less than a year. "China’s quarterly GDP releases are being greeted with increasing scepticism and for good reason," Capital Economics said in a recent research report. "The speed of growth that it points to is increasingly hard to believe given the clear structural drags that the economy is facing." Still, most wave off fears of a "hard landing" for China. "We expect data for the second quarter of 2016 to further reinforce our view that China has not collapsed," PNC Financial Services Group senior international economist Bill Adams said in a research note, though he added the country still faces "daunting challenges". Loosening seen Lower commodity prices, a decline in private spending and weak exports all dragged on the economy in the April-June period, analysts said. Adding to the uncertainty, recent flooding in China could cut into industrial production although at the same time give the government the opportunity to build infrastructure for water control, which could be positive for longer-term growth. "Infrastructure will likely remain a key sector that policy makers rely on to stabilise growth," Rong Jing, an economist at BNP Paribas in Beijing, said. Britain's decision to exit the European Union, could actually benefit China, some analysts argue. "If 'Brexit' results in slower growth in the UK and anxiety in the developed West and in emerging Europe, the Chinese share of global growth could rise even higher," Andy Rothman, investment strategist at Matthews Asia, said in a research note. In order to maintain expansion, the central bank must maintain its loose monetary policy, possibly by again cutting the proportion of funds banks must set aside as reserves as well as interest rates - which it has already lowered six times since late 2014. An annual summer gathering of Chinese leaders at the beach resort of Beidaihe could yield other economic policies after the State Council, or cabinet, called for support to boost private investment, analysts said. "The government is likely to introduce further loosening but not necessarily strong stimulus," Zhao Yang, an economist at Nomura in Hong Kong, said. "Economic growth will likely continue to slow down in the next two to three years," he said, adding the level could drop to 5.0 per cent or even less. (AFP)

New survey says China?s Q2 growth slips to a seven-year low of 6.6%

Oil prices rebounded in Asia today after tanking nearly five per cent the day before on fresh worries about an oversupply, while traders await the release of key US jobs data. 
 
The commodity plunged Thursday in response to official figures showing US commercial inventories fell less than expected last week, indicating softer demand in the world&#39;s top oil consumer as the crucial driving season kicks in. 
 
The data added to an already downbeat mood on markets as investors worry about the longer-term fallout from Britain&#39;s vote to leave the European Union (EU). 
 
At around 0650 GMT, the US benchmark West Texas Intermediate was up 26 cents, or 0.58 per cent, at $45.40 and Brent gained 32 cents, or 0.69 per cent, to $46.72. 
 
WTI plunged 4.8 per cent and Brent sank 4.9 per cent on Thursday after the US Department of Energy (DoE) reported stockpiles fell 2.2 million barrels in the week ending July 1. The market was expecting a 2.5 million barrel drop, according to Bloomberg News. 
 
Both contracts are more than six per cent lower down from last Friday. 
 
The DoE also reported a much smaller than expected decline in petrol stockpiles during the peak summer driving season when Americans take to the road for their holidays. Gasoline stockpiles fell 100,000 barrels, well below the forecast 350,000. 
 
IG Markets analyst Bernard Aw said traders were looking for bargains after Thursday&#39;s &quot;substantial drop&quot; in prices, but added the oversupply concerns will linger. 
 
&quot;What&#39;s even more important was the lack of decline in the gasoline inventories, given that the summer driving season in the US still has two more months to go,&quot; Aw said. 
 
&quot;Traders now fear that we could see a worsening of the supply overhang when summer is over,&quot; he added.&nbsp; 
 
Prices were also given some support after a militant group in Nigeria, Africa&#39;s biggest oil producer, said it attacked more oil infrastructure in the country&#39;s south, ignoring a call for unity from President Muhammadu Buhari. 
 
(AFP)&nbsp; 
&nbsp;

The data added to an already downbeat mood on markets as investors worry about the longer-term Brexit fallout

Oil prices rebounded in Asia today after tanking nearly five per cent the day before on fresh worries about an oversupply, while traders await the release of key US jobs data. The commodity plunged Thursday in response to official figures showing US commercial inventories fell less than expected last week, indicating softer demand in the world's top oil consumer as the crucial driving season kicks in. The data added to an already downbeat mood on markets as investors worry about the longer-term fallout from Britain's vote to leave the European Union (EU). At around 0650 GMT, the US benchmark West Texas Intermediate was up 26 cents, or 0.58 per cent, at $45.40 and Brent gained 32 cents, or 0.69 per cent, to $46.72. WTI plunged 4.8 per cent and Brent sank 4.9 per cent on Thursday after the US Department of Energy (DoE) reported stockpiles fell 2.2 million barrels in the week ending July 1. The market was expecting a 2.5 million barrel drop, according to Bloomberg News. Both contracts are more than six per cent lower down from last Friday. The DoE also reported a much smaller than expected decline in petrol stockpiles during the peak summer driving season when Americans take to the road for their holidays. Gasoline stockpiles fell 100,000 barrels, well below the forecast 350,000. IG Markets analyst Bernard Aw said traders were looking for bargains after Thursday's "substantial drop" in prices, but added the oversupply concerns will linger. "What's even more important was the lack of decline in the gasoline inventories, given that the summer driving season in the US still has two more months to go," Aw said. "Traders now fear that we could see a worsening of the supply overhang when summer is over," he added. Prices were also given some support after a militant group in Nigeria, Africa's biggest oil producer, said it attacked more oil infrastructure in the country's south, ignoring a call for unity from President Muhammadu Buhari. (AFP)

Oil prices rebound in Asia as investors await key US jobs data

A protest by Zimbabwean taxi drivers against a police crackdown turned violent on Monday when residents joined in and hurled rocks at police, who fired teargas to disperse the rioters. 
 
In the last month, Zimbabwe has witnessed spontaneous protests against government corruption, shortages of money and government plans to circulate local bank notes as the southern African nation struggles with a drought and a slowing economy. 
 
Zimbabwean taxi drivers, along with owners of taxi firms, accuse police of seeking to raise money for their operations by imposing hefty fines on their vehicles, which they say impacts on their business. 
 
Police spokeswoman Charity Charamba told reporters that anti-riot police had deployed in two townships outside Harare and arrested 30 people in connection with the violence. 
&nbsp;
<blockquote class="twitter-tweet" data-lang="en">
Police brutality in Harare. Door to door tactic has been adopted now <a href="https://t.co/oX2ho8st8a">pic.twitter.com/oX2ho8st8a</a>
&mdash; Itai Pfungwadzapera (@itaipfungwa1987) <a href="https://twitter.com/itaipfungwa1987/status/749952447444025344">July 4, 2016</a></blockquote>
<script async src="~/platform.twitter.com/widgets.js" charset="utf-8" type="text/javascript"></script> 
 
Charamba said &quot;all those who are inciting and engaging in violence that such misconduct will be severely dealt with&quot;. 
 
A Reuters witness said taxi operators teamed up with residents in Epworth township, south of central Harare, to attack police with stones. Police fired teargas, beat up protesters and broke down doors at some houses, saying they were looking for organisers of the protest. 
 
In Mabvuku township, to the east of the capital, police fired teargas as taxi operators blocked roads with stones and burning tyres, taxi driver Aaron Mapani said. 
 
Monday&#39;s clashes come days after residents protested in the border town of Beitbridge, 600 kilometres south of the capital Harare, last Friday against restrictions on imports of basic goods from South Africa. 
 
(Reuters)

Police fired teargas, beat up protesters and broke down doors at some houses, saying they were looking for organisers of the protest

A protest by Zimbabwean taxi drivers against a police crackdown turned violent on Monday when residents joined in and hurled rocks at police, who fired teargas to disperse the rioters. In the last month, Zimbabwe has witnessed spontaneous protests against government corruption, shortages of money and government plans to circulate local bank notes as the southern African nation struggles with a drought and a slowing economy. Zimbabwean taxi drivers, along with owners of taxi firms, accuse police of seeking to raise money for their operations by imposing hefty fines on their vehicles, which they say impacts on their business. Police spokeswoman Charity Charamba told reporters that anti-riot police had deployed in two townships outside Harare and arrested 30 people in connection with the violence. Police brutality in Harare. Door to door tactic has been adopted now pic.twitter.com/oX2ho8st8a — Itai Pfungwadzapera (@itaipfungwa1987) July 4, 2016 Charamba said "all those who are inciting and engaging in violence that such misconduct will be severely dealt with". A Reuters witness said taxi operators teamed up with residents in Epworth township, south of central Harare, to attack police with stones. Police fired teargas, beat up protesters and broke down doors at some houses, saying they were looking for organisers of the protest. In Mabvuku township, to the east of the capital, police fired teargas as taxi operators blocked roads with stones and burning tyres, taxi driver Aaron Mapani said. Monday's clashes come days after residents protested in the border town of Beitbridge, 600 kilometres south of the capital Harare, last Friday against restrictions on imports of basic goods from South Africa. (Reuters)

Zimbabwe protests turn violent as taxi drivers and citizens face off against cops

Call it the law of unintended consequences. A measure to save Greece from the abyss of a default and crashing out of the eurozone now holds its economy in a stranglehold, preventing its recovery. 
 
Cast back a year: the standoff between the Greek government of Prime Minister Alexis Tsipras and the EU and IMF over the terms of a new rescue plan for the country was reaching breaking point. 
 
The talks on a third bailout had been going nowhere since Tsipras took power in January after sweeping elections on an anti-austerity platform, and the EU and IMF warned the country&#39;s place in the eurozone was at risk if it didn&#39;t accept more spending cuts and tax hikes. 
 
Meanwhile, Greeks had been taking out more and more of their savings out of banks, with 20 per cent gone when during the night of June 26 to 27 Tsipras shocked the world by announcing he would put the bailout conditions to a referendum vote. 
 
In order to prevent a run on banks, Greece imposed capital controls, limiting cash withdrawals to 420 Euros ($465) per week. 
 
The restriction is still in place, and it&#39;s having a long-term impact on the economy. 
 
Consumption was down 1.3 per cent in the first quarter of this year compared with the same period in 2015, even though prices have been falling in Greece. 
 
Overall, the Greek economy, which had begun growing again at the end of 2014, shrank by 1.4 per cent in the first quarter of 2016. 
 
&#39;Who has 420 Euros?&#39; 
 
For many Greeks, the 420-Euro weekly limit was not too much of a brake on spending as they had already been progressively tightening their belts since Greece&#39;s first 110-billion-Euro international bailout in 2010. 
 
&quot;Families have cut their expenses so much these past years of the crisis that it didn&#39;t really create a problem ... who now has more than 420 Euros per week to spend?&quot; said Dimitris Sotiropoulos, a draftsman and father of three children. 
 
However, the impact has been greater on businesses, as trade figures show: imports plunged by 12.8 per cent and exports by 11.7 per cent. 
 
The controls, which hampered the ability to import goods and conduct business abroad, added to the &quot;tax pressure and collapse of the social security system&quot; of recent years, said Thanassis Kalabalikis, president of the Athens manufacturers&#39; federation. 
 
&quot;Small entrepreneurs, who before the crisis were the backbone of the Greek economy, had already taken a blow from seven years of recession, and capital controls just added to the sluggishness,&quot; he said. 
 
Some 26,000 Greek businesses of all sizes have shut their doors since capital controls were introduced. 
 
For Panayiotis Petrakis, an economics professor at the University of Athens, &quot;limitations on the free flow of capital and the lack of liquidity are preventing the recovery of the economy and don&#39;t encourage confidence among investors.&quot; 
 
Greece finally clinched the 86-billion-Euro bailout at the end of July, helping to bring back a certain amount of economic stability, including by a recapitalisation of its battered banks at the end of the year. 
 
Low prices, black market 
 
The Greek government has relaxed the capital controls in recent months, in particular allowing higher withdrawals on funds returned from abroad. 
 
A commission is also in place to examine requests from businesses and individuals for transactions above transfer limits. 
 
However, experts worry that capital controls could remain in place to the end of the year, or even to mid-2017, given the experience of fellow Eurozone member Cyprus which took two years to lift capital controls it imposed during the height of its crisis in 2013. 
 
Louka Katseli, a former economy minister who now is the board chairwoman at the private lender National Bank of Greece, is among those who believes the capital controls will be lifted later rather than sooner. 
 
For that, she believes that three conditions need to be met: there are effective incentives for funds to return to the country, the problem of dodgy loans on bank balance sheets has been resolved, and most importantly Greece that receives a positive evaluation from its international creditors in a review later this year. 
 
The only advantage of the capital controls has been to encourage Greeks to use other means of payments when they can: bank transfers and card payments inside the country were not restricted. 
 
That would help reduce problematic tax evasion, if more Greek businesses install card terminals. 
 
&quot;People have adapted but not businesses, as the installation of card terminals has been a headache, because in addition to many bank commissions many indebted companies are in such a terrible state they don&#39;t have the right to install them,&quot; said Kalabalikis. 
 
The result has been, according to Sotiropoulos, that &quot;prices have fallen even more and fostered the black market&quot; as businesses are inclined &quot;to offer considerable discounts to get sales by not issuing a receipt and dodging the tax payments&quot;. 
 
(AFP)

To prevent a run on banks Greece limited cash withdrawals to 420 Euros per week, which is having a long-term impact on the economy

Call it the law of unintended consequences. A measure to save Greece from the abyss of a default and crashing out of the eurozone now holds its economy in a stranglehold, preventing its recovery. Cast back a year: the standoff between the Greek government of Prime Minister Alexis Tsipras and the EU and IMF over the terms of a new rescue plan for the country was reaching breaking point. The talks on a third bailout had been going nowhere since Tsipras took power in January after sweeping elections on an anti-austerity platform, and the EU and IMF warned the country's place in the eurozone was at risk if it didn't accept more spending cuts and tax hikes. Meanwhile, Greeks had been taking out more and more of their savings out of banks, with 20 per cent gone when during the night of June 26 to 27 Tsipras shocked the world by announcing he would put the bailout conditions to a referendum vote. In order to prevent a run on banks, Greece imposed capital controls, limiting cash withdrawals to 420 Euros ($465) per week. The restriction is still in place, and it's having a long-term impact on the economy. Consumption was down 1.3 per cent in the first quarter of this year compared with the same period in 2015, even though prices have been falling in Greece. Overall, the Greek economy, which had begun growing again at the end of 2014, shrank by 1.4 per cent in the first quarter of 2016. 'Who has 420 Euros?' For many Greeks, the 420-Euro weekly limit was not too much of a brake on spending as they had already been progressively tightening their belts since Greece's first 110-billion-Euro international bailout in 2010. "Families have cut their expenses so much these past years of the crisis that it didn't really create a problem ... who now has more than 420 Euros per week to spend?" said Dimitris Sotiropoulos, a draftsman and father of three children. However, the impact has been greater on businesses, as trade figures show: imports plunged by 12.8 per cent and exports by 11.7 per cent. The controls, which hampered the ability to import goods and conduct business abroad, added to the "tax pressure and collapse of the social security system" of recent years, said Thanassis Kalabalikis, president of the Athens manufacturers' federation. "Small entrepreneurs, who before the crisis were the backbone of the Greek economy, had already taken a blow from seven years of recession, and capital controls just added to the sluggishness," he said. Some 26,000 Greek businesses of all sizes have shut their doors since capital controls were introduced. For Panayiotis Petrakis, an economics professor at the University of Athens, "limitations on the free flow of capital and the lack of liquidity are preventing the recovery of the economy and don't encourage confidence among investors." Greece finally clinched the 86-billion-Euro bailout at the end of July, helping to bring back a certain amount of economic stability, including by a recapitalisation of its battered banks at the end of the year. Low prices, black market The Greek government has relaxed the capital controls in recent months, in particular allowing higher withdrawals on funds returned from abroad. A commission is also in place to examine requests from businesses and individuals for transactions above transfer limits. However, experts worry that capital controls could remain in place to the end of the year, or even to mid-2017, given the experience of fellow Eurozone member Cyprus which took two years to lift capital controls it imposed during the height of its crisis in 2013. Louka Katseli, a former economy minister who now is the board chairwoman at the private lender National Bank of Greece, is among those who believes the capital controls will be lifted later rather than sooner. For that, she believes that three conditions need to be met: there are effective incentives for funds to return to the country, the problem of dodgy loans on bank balance sheets has been resolved, and most importantly Greece that receives a positive evaluation from its international creditors in a review later this year. The only advantage of the capital controls has been to encourage Greeks to use other means of payments when they can: bank transfers and card payments inside the country were not restricted. That would help reduce problematic tax evasion, if more Greek businesses install card terminals. "People have adapted but not businesses, as the installation of card terminals has been a headache, because in addition to many bank commissions many indebted companies are in such a terrible state they don't have the right to install them," said Kalabalikis. The result has been, according to Sotiropoulos, that "prices have fallen even more and fostered the black market" as businesses are inclined "to offer considerable discounts to get sales by not issuing a receipt and dodging the tax payments". (AFP)

For Greeks, emergency economic measures feed today's crisis

Britain is expected to submit an application to leave the European Union (EU) following Thursday&#39;s referendum, after which it would have two years to negotiate an exit. Below are possible consequences for Britain and the EU of a Brexit. 
 
ECONOMY 
 
Britain would no longer be subject to EU budget rules, which limit a government&#39;s budget deficit to 3 per cent of Gross Domestic Product (GDP) and public debt to 60 per cent of GDP.&nbsp;It could therefore run whatever budget shortfall it wants without admonishment from the European Commission and other EU ministers. It would also be free from the Commission&#39;s monitoring and advice on future actions. 
 
FINANCE 
 
Financial services firms based in Britain, from banks to clearing houses and funds, could lose their money-spinning EU &quot;passports&quot;, which allows them to sell services across the 28-nation bloc with low costs and a single set of rules. 
 
The passporting system has contributed to making London one of the world&#39;s most important financial centres. UK has been a gateway to European financial market for Non-EU banks based in UK.&nbsp;Some American, Japanese and other non-European banks that have European headquarters in London have said they would consider moving parts of their business inside the European Union, in the event of a BREXIT. 
 
Capital Requirement regulations is legislated through Financial Conduct Authority Handbook and Prudential Regulation Authority Handbook. BREXIT would not likely cause any immediate change in these requirements, however, a certain divergence might be expected in the future. 
 
Individuals and Corporates are covered under EU&#39;s insolvency regulations. This is relevant to banks in their dealings with their borrowers with operations in Member States of EU. Unless replaced by an alternative agreement with the EU or individual EU Member State, banks lending to such borrowers who take enforcement proceedings and/or institute insolvency proceedings in the UK, may find themselves exposed to the risk of competing insolvency proceedings being commenced in one or more other jurisdictions and of not being able to rely on the primacy of the UK proceedings. 
 
Market volatility has caused concerns among borrowers for being exposed to lending risks. 
 
BREXIT would have an impact on capital market instruments.&nbsp;The bond instruments issued in UK, may be amended by borrowers given the conditions in UK post BREXIT. Amendments in syndicate agreements would be costly and ineffective as decisions would be delayed and inadequate. 
 
TRADE 
 
The rest of the EU has a trade surplus in goods of about 100 billion Euros ($110 billion) with Britain, while Britain exports some 20 billion Euros in services than it imports, principally due to financial services. 
 
BREXIT campaigners say if would be in the EU&#39;s interest to agree a free trade deal with Britain even if it leaves the bloc. 
 
However, there tends to be more of a focus on goods than services in free trade deals. Switzerland, where financial services are a larger share of GDP than in Britain, has no general access to EU financial service markets and runs a financial services trade deficit with the bloc. 
 
COMPETITION 
 
British companies acquiring EU peers would still need approval from the UK competition watchdog and the European Commission, resulting in more legal costs and the risk that each delivers a different ruling. 
 
Britain will have a free hand to aid ailing companies or industries without fear of EU action but it will also not be able to oppose subsidies granted by EU governments to their own national champions. 
 
ENERGY 
 
Leaving the EU could make UK energy infrastructure investment costlier and delay new projects at a time when the country needs to plug a looming electricity supply gap. 
 
The uncertainty after BREXIT could make energy investors demand higher returns for the risk of less favourable conditions. Oil and gas majors, BP and Shell are among energy companies who warned about the potential downside. 
 
CLIMATE 
 
Britain is the second-largest emitter of greenhouse gases in Europe and its utilities are among the largest buyers of carbon permits in the EU Emission Trading System (ETS). 
 
Although most analysts believe Britain will remain in the cap-and-trade scheme, the vote is viewed as bearish for the market as Britain would no longer be able to drive tough reforms to drive up the price. 
 
BREXIT would also disrupt the bloc&#39;s plans to share out the burden of its Paris climate change pledge. 
 
The environmentally minded also worry that EU climate targets would be less ambitious without British leadership to balance against more reluctant member states such as coal-dependent Poland. 
 
AVIATION 
 
A BREXIT could call into question EU agreements on open airspace that have granted the region&#39;s airlines unlimited access to the skies of fellow member states, benefiting both UK and EU airlines. 
 
It would also affect transatlantic routes because of the EU-U.S. Open Skies agreement, which gives British airlines unlimited flying rights to the United States. 
 
FOREIGN POLICY 
 
Along with France, Britain is the leading foreign policy power in the EU, boasting a large military and close ties with the United States. After a BREXIT, Washington has made clear it will be less interested in London as an ally because of a perceived loss of influence. 
 
Britain would no longer be bound by joint EU positions, for instance on economic sanctions against Russia. Britain would remain a member of NATO. 
 
JUSTICE AND HOME AFFAIRS 
 
Britain has multiple exemptions from justice and home affairs policies, notably not being part of bloc&#39;s Schengen zone of free travel. 
 
It is not clear what restrictions Britain might place on foreign arrivals. The EU has vowed to respond in kind. 
 
Britain currently recognises other EU members&#39; arrest warrants, exchanges police information, including personal data, and is a member of the bloc&#39;s police agency Europol.&nbsp;Its future involvement, including access to EU databases, could diminish, meaning less cooperation on policing and fighting crime. 
 
DEMANDS BY STAKEHOLDERS 
 
With the impact of BREXIT on several sectors of UK, Britain&#39;s biggest banks have put forward their list of demands to the politicians. 
 
1. Exit from the EU should be made smoothly over time, so there is no change over time 
 
2. UK should negotiate to attain a mechanism similar to the passport regime, so that UK operating firms have access to continental market 
 
3. Promote competitiveness of London financial market implying that the UK politicians should promote a level playing field in global financial regulation, throwing the UK fully into a leading role in the G20, Financial Stability Board, Basel Committee, World Bank and International Monetary Fund. It also means slashing red tape. 
 
4. Banks and finance firms are keen to ensure that the finance sector is not cut off from the international jobs market. This implies that Britain should press the case for continued access to skilled talent from the EU and the rest of the world in order to boost the UK&rsquo;s competitiveness. The banks are also lobbying for accommodating immigration rules. 
 
IMPACT OF BREXIT ON MARKET 
 
Australia lost $56 billion in a day after BREXIT result was clear. 
 
Asian stocks are dumped as Global economic conditions remain uncertain. 
 
Wall Street and British Sterling also observed a slump.&nbsp; 
 
For markets, BREXIT signals failure of monetary policy and change in political attitude that may encourage governments around the world pursue more inward-looking policies,thus, restricting free flow of trade and finance.&nbsp; 
 
(With inputs from Reuters)

With BREXIT, there would be impact on several sectors such as Economy, Finance, Trade, Aviation, Energy, Climate etc.

Britain is expected to submit an application to leave the European Union (EU) following Thursday's referendum, after which it would have two years to negotiate an exit. Below are possible consequences for Britain and the EU of a Brexit. ECONOMY Britain would no longer be subject to EU budget rules, which limit a government's budget deficit to 3 per cent of Gross Domestic Product (GDP) and public debt to 60 per cent of GDP. It could therefore run whatever budget shortfall it wants without admonishment from the European Commission and other EU ministers. It would also be free from the Commission's monitoring and advice on future actions. FINANCE Financial services firms based in Britain, from banks to clearing houses and funds, could lose their money-spinning EU "passports", which allows them to sell services across the 28-nation bloc with low costs and a single set of rules. The passporting system has contributed to making London one of the world's most important financial centres. UK has been a gateway to European financial market for Non-EU banks based in UK. Some American, Japanese and other non-European banks that have European headquarters in London have said they would consider moving parts of their business inside the European Union, in the event of a BREXIT. Capital Requirement regulations is legislated through Financial Conduct Authority Handbook and Prudential Regulation Authority Handbook. BREXIT would not likely cause any immediate change in these requirements, however, a certain divergence might be expected in the future. Individuals and Corporates are covered under EU's insolvency regulations. This is relevant to banks in their dealings with their borrowers with operations in Member States of EU. Unless replaced by an alternative agreement with the EU or individual EU Member State, banks lending to such borrowers who take enforcement proceedings and/or institute insolvency proceedings in the UK, may find themselves exposed to the risk of competing insolvency proceedings being commenced in one or more other jurisdictions and of not being able to rely on the primacy of the UK proceedings. Market volatility has caused concerns among borrowers for being exposed to lending risks. BREXIT would have an impact on capital market instruments. The bond instruments issued in UK, may be amended by borrowers given the conditions in UK post BREXIT. Amendments in syndicate agreements would be costly and ineffective as decisions would be delayed and inadequate. TRADE The rest of the EU has a trade surplus in goods of about 100 billion Euros ($110 billion) with Britain, while Britain exports some 20 billion Euros in services than it imports, principally due to financial services. BREXIT campaigners say if would be in the EU's interest to agree a free trade deal with Britain even if it leaves the bloc. However, there tends to be more of a focus on goods than services in free trade deals. Switzerland, where financial services are a larger share of GDP than in Britain, has no general access to EU financial service markets and runs a financial services trade deficit with the bloc. COMPETITION British companies acquiring EU peers would still need approval from the UK competition watchdog and the European Commission, resulting in more legal costs and the risk that each delivers a different ruling. Britain will have a free hand to aid ailing companies or industries without fear of EU action but it will also not be able to oppose subsidies granted by EU governments to their own national champions. ENERGY Leaving the EU could make UK energy infrastructure investment costlier and delay new projects at a time when the country needs to plug a looming electricity supply gap. The uncertainty after BREXIT could make energy investors demand higher returns for the risk of less favourable conditions. Oil and gas majors, BP and Shell are among energy companies who warned about the potential downside. CLIMATE Britain is the second-largest emitter of greenhouse gases in Europe and its utilities are among the largest buyers of carbon permits in the EU Emission Trading System (ETS). Although most analysts believe Britain will remain in the cap-and-trade scheme, the vote is viewed as bearish for the market as Britain would no longer be able to drive tough reforms to drive up the price. BREXIT would also disrupt the bloc's plans to share out the burden of its Paris climate change pledge. The environmentally minded also worry that EU climate targets would be less ambitious without British leadership to balance against more reluctant member states such as coal-dependent Poland. AVIATION A BREXIT could call into question EU agreements on open airspace that have granted the region's airlines unlimited access to the skies of fellow member states, benefiting both UK and EU airlines. It would also affect transatlantic routes because of the EU-U.S. Open Skies agreement, which gives British airlines unlimited flying rights to the United States. FOREIGN POLICY Along with France, Britain is the leading foreign policy power in the EU, boasting a large military and close ties with the United States. After a BREXIT, Washington has made clear it will be less interested in London as an ally because of a perceived loss of influence. Britain would no longer be bound by joint EU positions, for instance on economic sanctions against Russia. Britain would remain a member of NATO. JUSTICE AND HOME AFFAIRS Britain has multiple exemptions from justice and home affairs policies, notably not being part of bloc's Schengen zone of free travel. It is not clear what restrictions Britain might place on foreign arrivals. The EU has vowed to respond in kind. Britain currently recognises other EU members' arrest warrants, exchanges police information, including personal data, and is a member of the bloc's police agency Europol. Its future involvement, including access to EU databases, could diminish, meaning less cooperation on policing and fighting crime. DEMANDS BY STAKEHOLDERS With the impact of BREXIT on several sectors of UK, Britain's biggest banks have put forward their list of demands to the politicians. 1. Exit from the EU should be made smoothly over time, so there is no change over time 2. UK should negotiate to attain a mechanism similar to the passport regime, so that UK operating firms have access to continental market 3. Promote competitiveness of London financial market implying that the UK politicians should promote a level playing field in global financial regulation, throwing the UK fully into a leading role in the G20, Financial Stability Board, Basel Committee, World Bank and International Monetary Fund. It also means slashing red tape. 4. Banks and finance firms are keen to ensure that the finance sector is not cut off from the international jobs market. This implies that Britain should press the case for continued access to skilled talent from the EU and the rest of the world in order to boost the UK’s competitiveness. The banks are also lobbying for accommodating immigration rules. IMPACT OF BREXIT ON MARKET Australia lost $56 billion in a day after BREXIT result was clear. Asian stocks are dumped as Global economic conditions remain uncertain. Wall Street and British Sterling also observed a slump. For markets, BREXIT signals failure of monetary policy and change in political attitude that may encourage governments around the world pursue more inward-looking policies,thus, restricting free flow of trade and finance. (With inputs from Reuters)

Consequences of BREXIT

The deaths of 14 Nepali guards in Afghanistan have highlighted the Himalayan nation&#39;s role as supplier of security forces to the world, an industry fuelled by poverty and built on the centuries-old reputation of its Gurkha troops for courage and loyalty. 
 
While the number of Gurkha soldiers Britain recruits annually in the impoverished nation has fallen in recent years, global demand for Nepalis as private security guards remains high. 
 
&quot;Everyone wants a Gurkha to protect their assets -- from a billionaire in Hong Kong to private firms in Kabul,&quot; said Mahesh Shrestha, Nepal country manager for British security giant G4S. 
 
&quot;Gurkhas have always been a big craze as far as the market for security (personnel) is concerned,&quot; Shrestha told AFP. 
 
The industry provides lucrative jobs for retired Gurkhas as well as former Nepal army and police staff willing to risk their lives in conflict zones around the world. 
 
Nepalis were first recruited overseas by the British East India Company after the Anglo-Nepali war that ended in 1816. 
 
Impressed by their bravery, the British struck a deal to hire their former foes as soldiers, using Gurkha troops to crush riots in 19th-century India and fight for Britain in World Wars I and II. 
 
The Gurkhas&#39; World War I exploits also secured the Himalayan kingdom&#39;s sovereignty via a 1923 treaty between Nepal and Britain. 
 
Famed for their ferocity and skillful use of razor-sharp curved kukri knives, the Gurkhas have fought in every British conflict for the last two centuries. 
 
More than 45,000 have died in action. 
 
They have also enlisted in the Singapore police force and the Indian army, whose former chief of staff Sam Manekshaw is reported to have said: &quot;If a man says he is not afraid of dying, he is either lying or is a Gurkha&quot;. 
 
Today, private security firms seek to trade on that reputation when they advertise their recruitment of Nepalis -- including non-Gurkhas -- to prospective clients. 
 
As a result, Nepalis enjoy a virtual monopoly in the private security sector in countries like Malaysia, where companies are only allowed to hire them or locals as guards. 
 
&quot;Thanks to the Gurkhas&#39; fame... people think Nepalis are loyal, honest, hardworking men who can survive anywhere and cope with tough conditions,&quot; G4S&#39;s Shrestha said. 
 
Fuelled by desperation 
The hillside towns the Gurkhas come from are islands of relative prosperity in Nepal thanks to salaries and pensions which are substantially higher than local wages. 
 
Thousands of young men apply to join the British Gurkhas each year, but only around 230 make the final cut. Their tests include a 4.6-kilometre (2.9-mile) race up a steep hill while carrying a basket packed with rocks. 
 
The British army now employs around 2,500 Gurkhas, down from an all-time high of 112,000 during World War II, and many have taken jobs as security guards in conflict zones like Afghanistan, where 14 Nepalis working for the Canadian embassy were killed in a bomb attack this week. 
 
They are more expensive than Afghan security, but are seen as more reliable and their physical similarity allows them to blend in better than other foreigners. 
 
&quot;Young Nepali males don&#39;t really have many options at home and so they seek dangerous jobs overseas... because of their desperation,&quot; journalist Kunda Dixit told AFP. 
 
Nepali migrant workers play a critical role in propping up the country&#39;s economy: their remittances make up about 30 percent of gross domestic product. 
 
Authorities say some 3,300 Nepalis currently work in Afghanistan as security guards but accurate figures for the total number employed across the world are hard to come by. 
 
Despite the dangers, commentators say the deaths this week will do little to stop other Nepalis from venturing into war zones in desperate pursuit of work, as the country struggles to recover from last year&#39;s massive earthquake. 
(AFP)

Famed for their ferocity and skillful use of razor-sharp curved khukri knives, Gurkhas fight for the British, Indian and Nepalese armies

The deaths of 14 Nepali guards in Afghanistan have highlighted the Himalayan nation's role as supplier of security forces to the world, an industry fuelled by poverty and built on the centuries-old reputation of its Gurkha troops for courage and loyalty. While the number of Gurkha soldiers Britain recruits annually in the impoverished nation has fallen in recent years, global demand for Nepalis as private security guards remains high. "Everyone wants a Gurkha to protect their assets -- from a billionaire in Hong Kong to private firms in Kabul," said Mahesh Shrestha, Nepal country manager for British security giant G4S. "Gurkhas have always been a big craze as far as the market for security (personnel) is concerned," Shrestha told AFP. The industry provides lucrative jobs for retired Gurkhas as well as former Nepal army and police staff willing to risk their lives in conflict zones around the world. Nepalis were first recruited overseas by the British East India Company after the Anglo-Nepali war that ended in 1816. Impressed by their bravery, the British struck a deal to hire their former foes as soldiers, using Gurkha troops to crush riots in 19th-century India and fight for Britain in World Wars I and II. The Gurkhas' World War I exploits also secured the Himalayan kingdom's sovereignty via a 1923 treaty between Nepal and Britain. Famed for their ferocity and skillful use of razor-sharp curved kukri knives, the Gurkhas have fought in every British conflict for the last two centuries. More than 45,000 have died in action. They have also enlisted in the Singapore police force and the Indian army, whose former chief of staff Sam Manekshaw is reported to have said: "If a man says he is not afraid of dying, he is either lying or is a Gurkha". Today, private security firms seek to trade on that reputation when they advertise their recruitment of Nepalis -- including non-Gurkhas -- to prospective clients. As a result, Nepalis enjoy a virtual monopoly in the private security sector in countries like Malaysia, where companies are only allowed to hire them or locals as guards. "Thanks to the Gurkhas' fame... people think Nepalis are loyal, honest, hardworking men who can survive anywhere and cope with tough conditions," G4S's Shrestha said. Fuelled by desperation The hillside towns the Gurkhas come from are islands of relative prosperity in Nepal thanks to salaries and pensions which are substantially higher than local wages. Thousands of young men apply to join the British Gurkhas each year, but only around 230 make the final cut. Their tests include a 4.6-kilometre (2.9-mile) race up a steep hill while carrying a basket packed with rocks. The British army now employs around 2,500 Gurkhas, down from an all-time high of 112,000 during World War II, and many have taken jobs as security guards in conflict zones like Afghanistan, where 14 Nepalis working for the Canadian embassy were killed in a bomb attack this week. They are more expensive than Afghan security, but are seen as more reliable and their physical similarity allows them to blend in better than other foreigners. "Young Nepali males don't really have many options at home and so they seek dangerous jobs overseas... because of their desperation," journalist Kunda Dixit told AFP. Nepali migrant workers play a critical role in propping up the country's economy: their remittances make up about 30 percent of gross domestic product. Authorities say some 3,300 Nepalis currently work in Afghanistan as security guards but accurate figures for the total number employed across the world are hard to come by. Despite the dangers, commentators say the deaths this week will do little to stop other Nepalis from venturing into war zones in desperate pursuit of work, as the country struggles to recover from last year's massive earthquake. (AFP)

Gurkhas to guards: Nepalis doing dangerous jobs abroad

China and Poland have agreed on Monday to upgrade their ties to a comprehensive strategic partnership during Chinese President Xi Jinping&#39;s&nbsp;visit to the country.

The move was made as Xi met with Polish President Andrzej Duda, in a bid to further promote cooperation across the board and benefit the two peoples.

Xi said at the meeting that the two peoples have enjoyed lasting friendship since the two countries established diplomatic relations 67 years ago.

The two countries have borne fruitful results in high-level and people-to-people exchanges, and economic and trade cooperation, especially since they established a strategic partnership in 2011, said Xi.

He added that China has cherished the traditional friendship with Poland and stands ready to work with Poland to push forward the bilateral relations in a sound and steady way.

Xi also called for efforts to enhance mutual trust, align development strategies of the two countries and boost interconnectivity and production cooperation under the Belt and Road initiative.

Bilateral cooperation in economy and trade, finance, agriculture, science and technology should be promoted, according to Xi.

Hailing the bilateral ties, Duda said that Poland is willing to strengthen cooperation within the framework of the Sino-Polish comprehensive strategic partnership in various areas including the Belt and Road initiative, the Asian Infrastructure Investment Bank, and people-to-people exchanges.

A joint statement on the establishment of a comprehensive strategic partnership was inked after the meeting, as well as a memorandum of understanding on a bilateral cooperation blueprint.

Poland is the second leg of Xi&#39;s Eurasia tour. Before visiting Poland, Xi visited Serbia from June 17 to June 19.

After visiting Poland, Xi will travel to Uzbekistan for a state visit and attend a summit of the Shanghai Cooperation Organization. 
 
(Reuters)

A bunch of cooperation agreements signed covering various aspects, including infrastructure construction, education, culture and aerospace

China and Poland have agreed on Monday to upgrade their ties to a comprehensive strategic partnership during Chinese President Xi Jinping's visit to the country. The move was made as Xi met with Polish President Andrzej Duda, in a bid to further promote cooperation across the board and benefit the two peoples. Xi said at the meeting that the two peoples have enjoyed lasting friendship since the two countries established diplomatic relations 67 years ago. The two countries have borne fruitful results in high-level and people-to-people exchanges, and economic and trade cooperation, especially since they established a strategic partnership in 2011, said Xi. He added that China has cherished the traditional friendship with Poland and stands ready to work with Poland to push forward the bilateral relations in a sound and steady way. Xi also called for efforts to enhance mutual trust, align development strategies of the two countries and boost interconnectivity and production cooperation under the Belt and Road initiative. Bilateral cooperation in economy and trade, finance, agriculture, science and technology should be promoted, according to Xi. Hailing the bilateral ties, Duda said that Poland is willing to strengthen cooperation within the framework of the Sino-Polish comprehensive strategic partnership in various areas including the Belt and Road initiative, the Asian Infrastructure Investment Bank, and people-to-people exchanges. A joint statement on the establishment of a comprehensive strategic partnership was inked after the meeting, as well as a memorandum of understanding on a bilateral cooperation blueprint. Poland is the second leg of Xi's Eurasia tour. Before visiting Poland, Xi visited Serbia from June 17 to June 19. After visiting Poland, Xi will travel to Uzbekistan for a state visit and attend a summit of the Shanghai Cooperation Organization. (Reuters)

China, Poland to lift ties to comprehensive strategic partnership

The European Union&#39;s banking watchdog will move from London to another European capital if Britain decides to quit the bloc in a referendum this week, its chairman said in an interview published on Sunday. 
 
Britain votes on June 23 on whether to stay in the 28-member bloc, a choice with far-reaching consequences for politics, the economy, defence and diplomacy on the continent. 
 
The London-based European Banking Authority (EBA), founded in 2011 as a reaction to the global financial crisis, operates as a pan-EU regulator, writing and coordinating banking rules across the bloc. 
 
&quot;If the British should decide to leave the EU, we actually would have to move to another European capital,&quot; Andrea Enria, head of the EBA, told the German newspaper Welt am Sonntag. 
 
While betting odds have consistently indicated a vote to remain in the EU, opinion pollsters have so far painted contradictory pictures of how Britons will vote. 
 
The EBA is currently working on an EU single rulebook aimed at ensuring a level playing field for all banks across the 28-country bloc&#39;s capital market. 
 
&quot;This work needs to be completed irrespective of the result of the referendum,&quot; said Enria, an Italian national. &quot;We must ensure that there are no different rules between the countries that have the euro and those that do not have it.&quot; 
 
Enria said the European banking sector was more stable now than five years ago, but there was still need for consolidation. 
 
&quot;If you look at the balance sheets of banks, you could actually ask yourself whether such low profitability and such low return on investment are sustainable in the long term,&quot; he said. 
 
Banks should speed up their efforts to deal with non-performing loans and change their internal business culture in order to avoid future scandals and fines, Enria said. 
 
That banks have hardly made any progress in these two areas is the reason why the European Central Bank (ECB) is struggling to boost lending and generate more growth despite its bond-purchase programme, he added. 
(Reuters)

European Banking Authority is making arrangements to shift head office in case Britain opts out of the European union, says EBA's chairman

The European Union's banking watchdog will move from London to another European capital if Britain decides to quit the bloc in a referendum this week, its chairman said in an interview published on Sunday. Britain votes on June 23 on whether to stay in the 28-member bloc, a choice with far-reaching consequences for politics, the economy, defence and diplomacy on the continent. The London-based European Banking Authority (EBA), founded in 2011 as a reaction to the global financial crisis, operates as a pan-EU regulator, writing and coordinating banking rules across the bloc. "If the British should decide to leave the EU, we actually would have to move to another European capital," Andrea Enria, head of the EBA, told the German newspaper Welt am Sonntag. While betting odds have consistently indicated a vote to remain in the EU, opinion pollsters have so far painted contradictory pictures of how Britons will vote. The EBA is currently working on an EU single rulebook aimed at ensuring a level playing field for all banks across the 28-country bloc's capital market. "This work needs to be completed irrespective of the result of the referendum," said Enria, an Italian national. "We must ensure that there are no different rules between the countries that have the euro and those that do not have it." Enria said the European banking sector was more stable now than five years ago, but there was still need for consolidation. "If you look at the balance sheets of banks, you could actually ask yourself whether such low profitability and such low return on investment are sustainable in the long term," he said. Banks should speed up their efforts to deal with non-performing loans and change their internal business culture in order to avoid future scandals and fines, Enria said. That banks have hardly made any progress in these two areas is the reason why the European Central Bank (ECB) is struggling to boost lending and generate more growth despite its bond-purchase programme, he added. (Reuters)

EU banking watchdog to leave London in case of Brexit

Reserve Bank of India (RBI), central bank of India, Governor Raghuram Rajan, who has faced criticism from members of the ruling party for keeping interest rates too high, stunned officials on Saturday by announcing he would step down when his term ends on September 4. 
 
Rajan, a former chief economist at the IMF, has been popular with foreign investors for his efforts to tackle inflation, and won praise for helping rescue India from its worst currency crisis in more than two decades after taking the helm in September 2013. 
 
But in a nearly 900-world letter to staff he said he planned to return to academia, even as he noted two of his actions - the creation of a monetary policy committee to set interest rates and the clean-up of the banking sector - remained unfinished. 
 
&quot;While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016,&quot; Rajan said in the letter released by the RBI. 
 
&quot;I will, of course, always be available to serve my country when needed.&quot; 
 
Rajan, who is on leave from the University of Chicago, was appointed RBI Governor by the previous Congress government, where he had served as chief economic advisor to the finance minister for about a year before taking the helm of the central bank. 
 
&quot;The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly,&quot; Finance Minister Arun Jaitley said in a tweet on Saturday. 
 
Although feted by investors, Rajan had faced strident criticism from right-wing members of Prime Minister Narendra Modi&#39;s Bharatiya Janata Party, including parliament member Subramanian Swamy, who has waged a public campaign against his economic policies. 
 
Rajan had also veered into topics - such as intolerance in society - that have angered some BJP members, as did recent comments that were seen by some government officials as playing down their economic accomplishments. 
 
&quot;GOOD TEACHER&quot; 
 
Still, Rajan was known to have a good working relationship with Modi, with the Prime Minister calling the RBI governor a &quot;good teacher&quot; on economic matters, and government officials had previously told Reuters that Modi&#39;s administration would re-appoint the governor, should he wish to stay on. 
 
Many of Rajan&#39;s key accomplishments have come in close collaboration with the Modi government. 
 
Rajan pushed for inflation targeting to tackle India&#39;s history of volatile prices, which was then unveiled by the government last year. 
 
He has also worked with the government on the creation of a monetary policy committee as well as the clean-up of heavily indebted banks - both of which may now have to be tackled by his successor. 
 
Current RBI Deputy Governor Urjit Patel, State Bank of India chairman Arundhati Bhattacharya, the finance ministry&#39;s Chief Economic Adviser Arvind Subramanian and the government&#39;s Economic Affairs Secretary Shaktikanta Das have previously been named by analysts as potential replacements should Rajan depart. 
 
Analysts said markets would likely react negatively on Monday, at a time when global factors such as Britain&#39;s referendum on European Union membership are already weighing. Though many analysts had speculated Rajan could decide not to pursue a second term, few had foreseen it would come in the form of a letter to staff. 
 
Senior government and RBI officials contacted by Reuters said they had been taken by surprise at the announcement. 
 
&quot;This will be seen as a disappointment by the market particularly the international investors&#39; community,&quot; said Ananth Narayan, regional head of financial markets for ASEAN and South Asia at Standard Chartered Bank. 
 
&quot;And we can only hope the government quickly announces a strong replacement to fill his big shoes.&quot; 
(Reuters)

Investors loved him, Modi had a strong like but more right-wing members of India's ruling party were strident critics

Reserve Bank of India (RBI), central bank of India, Governor Raghuram Rajan, who has faced criticism from members of the ruling party for keeping interest rates too high, stunned officials on Saturday by announcing he would step down when his term ends on September 4. Rajan, a former chief economist at the IMF, has been popular with foreign investors for his efforts to tackle inflation, and won praise for helping rescue India from its worst currency crisis in more than two decades after taking the helm in September 2013. But in a nearly 900-world letter to staff he said he planned to return to academia, even as he noted two of his actions - the creation of a monetary policy committee to set interest rates and the clean-up of the banking sector - remained unfinished. "While I was open to seeing these developments through, on due reflection, and after consultation with the government, I want to share with you that I will be returning to academia when my term as Governor ends on Sept. 4, 2016," Rajan said in the letter released by the RBI. "I will, of course, always be available to serve my country when needed." Rajan, who is on leave from the University of Chicago, was appointed RBI Governor by the previous Congress government, where he had served as chief economic advisor to the finance minister for about a year before taking the helm of the central bank. "The Government appreciates the good work done by him and respects his decision. A decision on his successor would be announced shortly," Finance Minister Arun Jaitley said in a tweet on Saturday. Although feted by investors, Rajan had faced strident criticism from right-wing members of Prime Minister Narendra Modi's Bharatiya Janata Party, including parliament member Subramanian Swamy, who has waged a public campaign against his economic policies. Rajan had also veered into topics - such as intolerance in society - that have angered some BJP members, as did recent comments that were seen by some government officials as playing down their economic accomplishments. "GOOD TEACHER" Still, Rajan was known to have a good working relationship with Modi, with the Prime Minister calling the RBI governor a "good teacher" on economic matters, and government officials had previously told Reuters that Modi's administration would re-appoint the governor, should he wish to stay on. Many of Rajan's key accomplishments have come in close collaboration with the Modi government. Rajan pushed for inflation targeting to tackle India's history of volatile prices, which was then unveiled by the government last year. He has also worked with the government on the creation of a monetary policy committee as well as the clean-up of heavily indebted banks - both of which may now have to be tackled by his successor. Current RBI Deputy Governor Urjit Patel, State Bank of India chairman Arundhati Bhattacharya, the finance ministry's Chief Economic Adviser Arvind Subramanian and the government's Economic Affairs Secretary Shaktikanta Das have previously been named by analysts as potential replacements should Rajan depart. Analysts said markets would likely react negatively on Monday, at a time when global factors such as Britain's referendum on European Union membership are already weighing. Though many analysts had speculated Rajan could decide not to pursue a second term, few had foreseen it would come in the form of a letter to staff. Senior government and RBI officials contacted by Reuters said they had been taken by surprise at the announcement. "This will be seen as a disappointment by the market particularly the international investors' community," said Ananth Narayan, regional head of financial markets for ASEAN and South Asia at Standard Chartered Bank. "And we can only hope the government quickly announces a strong replacement to fill his big shoes." (Reuters)

Reserve Bank of India chief Raghuram Rajan to step down

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