Germany’s new central bank president Jens Weidmann warned debt-laden Greece that international creditors will pull out aid if it fails to pursue painful cuts to tackle its huge deficit as promised.
“Greece’s capacity for [debt] payment depends foremost on the attitude of the government and the people,” the hawkish Bundesbank chief told Welt am Sonntag daily in an interview that was published yesterday.
“A lot of aid has been given, but under strict conditions such as massive and swift privatizations. If these commitments are not upheld, there will no longer be a basis for additional aid,” he said. “Greece would have made its own choice and should assume the undeniably dramatic consequence of a default on its payments.”
Photo: Reuters
Although a potential Greek default would likely make life hard for eurozone member nations the single currency will survive “and remain stable even in that case.”
Despite a landmark 110 billion euro (US$160 billion) bailout agreed last year, Greece’s 350 billion euro debt load has only become heavier as a deeper-than-expected recession last year weighed on government income.
The European Central Bank has until the end of this month to decide on a second bailout for Greece, but remains divided over the role of the private sector.
Germany wants a second rescue package to include contributions by private creditors, banks and investment funds as the price of Berlin’s involvement.
Diplomats say the need is estimated at more than 90 billion euros — one-third to come from eurozone nations and the IMF, one-third from sell-offs of Greek state assets and the final 30 billion euros from the bank rollovers.
The latter two components are uncertain and it is also uncertain whether the headline 90 billion euro figure includes remaining tranches of the existing 110 billion euro package mustered last year.
While expressing sympathy for public resentment in Greece toward the reforms, the current process is “inevitable” for the country to become more competitive and put its financial house back in order, Weidmann said.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
RSS