Greek police detain an anti-austerity protester during an operation to remove a small group of European demonstrators from central Syntagma square in Athens.
Greek police detain an anti-austerity protester during an operation to remove a small group of European demonstrators from central Syntagma square in Athens.

Loosening lips on a Greek euro exit



BRUSSELS // A year ago, it was nearly impossible to get a diplomat in Brussels to talk about the possibility of Greece leaving the euro zone. Now, it is the opening to most conversations.

But while it may have become commonplace to discuss a Greek exit, the practicalities are far more complicated than many outside observers acknowledge.

It is not even clear Greece can leave the common currency. The European Union's Lisbon Treaty does not make any such provision - it only considers a country leaving the EU.

Theoretically, a country cannot be forced out of the bloc - it has to decide of its own accord whether it wants to stay.

But with the announcement yesterday that Greece would have to return to the polls later in June after politicians had failed to form a new government, the country could be left with no choice but to leave the euro zone.

Greece remains without a government since its inconclusive election May 6 left parliament split between supporters and opponents of a European bailout package reviled by Greeks for imposing deep wage, pension and spending cuts. Polls show the leftist Syriza party, which rejects the bailout and placed second in last week's vote, is now on course to win.

When asked whether it was legally possible under the EU treaties to force Greece out of the 27-country union, one eurozone diplomat replied: "In theory it's not, but it's a bit like the drummer in the band - if the band doesn't like the drummer, there are ways of getting rid of the drummer."

The diplomat added a caveat and warned that everyone had to think seriously about the ramifications.

"I'm saying it may be doable, but in this case it could mean the band breaks up and never plays again."

The tone from the European Commission, the EU's executive, has shifted too.

On Monday, its spokeswoman Pia Ahrenhilde-Hansen said: "We wish Greece will remain in the euro and we hope Greece will remain in the euro ... but it must respect its commitments.

"Greece has its future in its own hands and it is really up to Greece to see what the response should be," she said.

Ireland's central bank chief and European Central Bank policymaker, Patrick Honohan, said at the weekend that a Greek exit would not be attractive.

"Technically, it can be managed," he told reporters at a conference in Estonia. "It would be a knock to the confidence for the euro area as a whole ... It is not necessarily fatal, but it is not attractive."

Article 50 of the Lisbon Treaty is the relevant piece of legislation should an EU country wish to withdraw.

It says that if such a decision is taken, an agreement would have to be drawn up with the other 26 member states. That would have to be approved by a qualified majority of EU countries and be backed by the European Parliament.

The rules would appear to leave the decision in the hands of the departing country. But when asked if that were the case during a meeting in Brussels last week, Wolfgang Schaeuble, the German finance minister, said it was not necessarily so.

Life could be made uncomfortable for Greece, which could involve shutting off financing, not just from the euro zone's European Financial Stability Facility (EFSF) bailout fund but from the European Central Bank too. Already there are signs of that sort of pressure being applied to Athens.

Last week, the EFSF agreed to disburse the latest tranche of aid to Greece, a €5.2 billion (Dh24.5bn) payment, but retained €1bn of the total, saying it was not immediately necessary.

Diplomats are worried, however, that talk about Greece leaving the euro or the EU is increasing the likelihood of such an eventuality, without taking into account the consequences.

One complaint is that the vast majority of the decisions have been in the hands of finance ministers and euro zone treasury departments who have a tendency to look at the raw numbers and not at the broader social and political implications.

"We're in danger of driving a country over the edge without really stopping to think what it could all mean," said a senior official from a euro zone country.

"I'm not hearing sufficient discussion of what this means for Greece as a society, or for peace and security in Europe."

As well as concern about the potential for severe financial and social breakdown in Greece as a result of leaving or being forced out of the euro zone, the official mentioned the risk of unchecked migration, the threat of a rise in right-wing or violent political movements, or even a military coup.

"Is it controllable? We have to think more broadly. What is really going to happen?" he said.

COMPANY PROFILE

Company: Eco Way
Started: December 2023
Founder: Ivan Kroshnyi
Based: Dubai, UAE
Industry: Electric vehicles
Investors: Bootstrapped with undisclosed funding. Looking to raise funds from outside

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

A Dog's Journey 

Directed by: Gail Mancuso

Starring: Dennis Quaid, Josh Gad, Marg Helgenberger, Betty Gilpin, Kathryn Prescott

3 out of 5 stars

The Bio

Amal likes watching Japanese animation movies and Manga - her favourite is The Ancient Magus Bride

She is the eldest of 11 children, and has four brothers and six sisters.

Her dream is to meet with all of her friends online from around the world who supported her work throughout the years

Her favourite meal is pizza and stuffed vine leaves

She ams to improve her English and learn Japanese, which many animated programmes originate in

Biog:

Age: 34

Favourite superhero: Batman

Favourite sport: anything extreme

Favourite person: Muhammad Ali 

RIVER SPIRIT

Author: Leila Aboulela 

Publisher: Saqi Books

Pages: 320

Available: Now

THE BIO

Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13 

Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier

Favourite place to travel to: Any walkable city. I also love nature and wildlife 

What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents. 

Favorite place to go in the UAE: A quiet beach.

MATCH INFO

Asian Champions League, last 16, first leg:

Al Jazira 3 Persepolis 2

Second leg:

Monday, Azizi Stadium, Tehran. Kick off 7pm

The Continental: From the World of John Wick

Created by: Greg Coolidge, Shawn Simmons, Kirk Ward
Stars: Mel Gibson, Colin Woodell, Mishel Prada
Rating: 3/5

THE DETAILS

Solo: A Star Wars Story

Director: Ron Howard

2/5

TERMINAL HIGH ALTITUDE AREA DEFENCE (THAAD)

What is THAAD?

It is considered to be the US's most superior missile defence system.

Production:

It was created in 2008.

Speed:

THAAD missiles can travel at over Mach 8, so fast that it is hypersonic.

Abilities:

THAAD is designed to take out  ballistic missiles as they are on their downward trajectory towards their target, otherwise known as the "terminal phase".

Purpose:

To protect high-value strategic sites, such as airfields or population centres.

Range:

THAAD can target projectiles inside and outside the Earth's atmosphere, at an altitude of 150 kilometres above the Earth's surface.

Creators:

Lockheed Martin was originally granted the contract to develop the system in 1992. Defence company Raytheon sub-contracts to develop other major parts of the system, such as ground-based radar.

UAE and THAAD:

In 2011, the UAE became the first country outside of the US to buy two THAAD missile defence systems. It then stationed them in 2016, becoming the first Gulf country to do so.

MATCH INFO

Uefa Champions League quarter-final second leg:

Juventus 1 Ajax 2

Ajax advance 3-2 on aggregate

Abu Dhabi traffic facts

Drivers in Abu Dhabi spend 10 per cent longer in congested conditions than they would on a free-flowing road

The highest volume of traffic on the roads is found between 7am and 8am on a Sunday.

Travelling before 7am on a Sunday could save up to four hours per year on a 30-minute commute.

The day was the least congestion in Abu Dhabi in 2019 was Tuesday, August 13.

The highest levels of traffic were found on Sunday, November 10.

Drivers in Abu Dhabi lost 41 hours spent in traffic jams in rush hour during 2019

 

THREE

Director: Nayla Al Khaja

Starring: Jefferson Hall, Faten Ahmed, Noura Alabed, Saud Alzarooni

Rating: 3.5/5

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone


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