Europe at wit's end over austerity?

(Financial Times) -- Europe may have hit the political limits of how far it can go with austerity-led economic policies because of the growing opposition in the eurozone's recession-hit periphery, the European Commission's president said on Monday.

José Manuel Barroso said that while he still believed in the need for sweeping economic reforms and drastic cuts in budget deficits, such policies needed to have "acceptance, politically and socially", which was now at risk.

"While this policy is fundamentally right, I think it has reached its limits in many aspects," Mr Barroso said. "A policy to be successful not only has to be properly designed. It has to have the minimum of political and social support."

Mr Barroso's comments come as advocates of the eurozone's austerity-led crisis response are on the defensive following a voter revolt in Italy, a deepening recession in much of the bloc and the tarnishing of a highly-influential academic treatise arguing high government debt severely hinders economic growth.

 

 The Euro logo is seen in front of the European Central bank ECB in Frankfurt/Main, Germany, on April 4, 2013

Mr Barroso's views are particularly influential because the commission has sweeping new powers to rule on whether struggling eurozone countries are able to ease up on belt-tightening.

His remarks came the same day Eurostat released data showing debt in many struggling eurozone countries continues to rocket despite unprecedented budget cuts and tax increases.

Of the four eurozone countries receiving rescue aid from the EU last year, only Greece saw its debt levels decrease, from 170 per cent of economic output in 2011 to 157 per cent -- still the highest in the EU.

Irish, Spanish and Portuguese debt levels all hit euro-era highs last year, with Portugal close to surpassing Italy as the second most indebted nation in the eurozone. Lisbon's debt jumped to 124 per cent of gross domestic product from 108 per cent, narrowly behind Rome's, which rose from 121 per cent to 127 per cent. Overall, eurozone sovereign debt rose to 90.6 per cent of GDP last year, the highest on record.

The report also highlighted the periphery's divergence from the eurozone's core, particularly Germany, which was the only EU country to post a budget surplus in 2012 but also saw its debt level remain flat for the third straight year.

In another sign that Germany is decoupling from the rest of the eurozone, German tax revenue increased 3.4 per cent in the first quarter of 2013. In March alone, the increase was 5.7 per cent on last year, according to official figures, even though economic growth was 1.5 per cent.

"Falling unemployment and higher wages are the biggest contributors to this development," said Jens Boysen-Hogrefe, an economist and expert for public finances at the Kiel Institute, who cautioned the trend may not continue since it relied heavily on a high turnover in real estate. The sales tax on land and houses rose by 14.3 per cent in March.

Still, Mr Boysen-Hogrefe said the new data made it unlikely that Germany would post a budget deficit of 0.5 per cent of GDP this year, as finance minister Wolfgang Schäuble has estimated, noting Berlin would save €11bn alone on lower borrowing costs in the bond market.

© The Financial Times Limited 201

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Samsung Elec. Estimates Q1 Operating Profit at W8.7 Tln

• 
• Samsung Electronics estimates its first quarter revenue at 52 trillion won and an operating profit of eight-point-seven trillion won.
  
  The preliminary estimate puts Samsung’s sales up 14-point-nine percent and its operating profit up 52-point-nine percent from the first quarter last year.
  
  On-quarter, sales are anticipated to fall seven-point-two percent and operating profit one-point-six percent. However, Samsung fared relatively well in the first three months of the year given the first quarter is typically a low season.
  
  Since the figure reflects the loan-loss provision of some 600 billion won related to patent lawsuits with Apple, the actual operating profit is likely to be larger.
  
  Samsung's favorable first quarter earnings are attributed to increased smartphone sales and improved profitability in semiconductors.

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Koh Rong airport plans foggy

An artist’s impression, above, shows what a proposed airport would look like on the island of Koh Rong. Image Supplied

Plans are in place for a new $10 million international airport on Koh Rong island, but questions remain as to when construction would commence and when funding would be available.

Designs for the roughly 7,200-square-metre airport terminal, which will consist of Khmer- and resort-style architecture, were completed two years ago, said Edward Billson, managing director of MAP Architects, a Hong Kong-based firm that is handling Koh Rong’s master plan.

With 2,650 metres of runway, even bigger planes like the Airbus A321 will be able to land. The airport will be located in the centre of Koh Rong, which is the only area on the island with flat land, Billson said.

But construction, which will take two years, can only start “when the funding is arranged”, he added.

The airport is part of the first phase of Koh Rong’s development plans, which also includes establishing luxury resorts. With 28 beaches, Koh Rong has been billed as Asia’s next big island destination.

But the developer, local conglomerate Royal Group, is still sourcing for investments for the island, said Billson.

Royal Group was granted a 99-year lease in 2008 from the government to develop the 78-square-kilometre island, along with its partner, Hong Kong real estate company Millennium Group.

Millennium Group then dropped out “a long time ago”, said Royal Group’s chief finance officer, Mark Hanna. According to another source familiar with the project, “both parties were not getting along with each other [mainly due to] a lack of ability to attract funding in a timely manner.”

Billson said he was not aware of how much money had been raised so far. “[The island] is a big project and will take a long time to complete development,” he said.

But funding, if slow, appears to be on the right track. Royal Group told him last year that the airport would be operational in the next five to 10 years, Billson said. Officials at Royal Group, including Chairman Kith Meng, declined to comment when contacted by the Post.

Earlier this week, Royal Group established a joint venture to launch a new national carrier called Cambodia Airlines. If the airport is launched, the airline would “of course” fly to Koh Rong, with flights from Siem Reap and Phnom Penh “definitely a possibility”, said Hanna.

According to Billson, the airport hopes to attract direct flights from Bangkok, Hong Kong and Singapore, because “that is where investors have money and would be interested in setting up villas in Koh Rong”.

But not all feel the airport is a good idea. Managing director of Koh Rong Dive Centre, Sakip Capal, said, “[The airport is the] wrong project, as we do not need an international airport – we already have one at Sihanoukville [about 40 kilometres away].”

Instead, Royal Group should invest in faster boats so that visitors can be ferried from Sihanoukville – the main portal to Koh Rong – in half an hour, he added. Currently the ferries take two hours.

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Ferrari sees business growth in Japan in midst of Europe, China slump

 

Top Italian luxury sports car makers Ferrari are slowly being convinced that business will grow in Japan, in light of the sales numbers early this year. Supported by a weakening yen, the global luxury vehicle brand saw almost twice growth in the Japanese market compared to the larger and more consistent U.S. market last quarter, and all this with European sales weakening and the decrease of demand in China.
According to the Japan Automobile Importers Association on Thursday, registered purchases of the ultra-luxury car brand have increased by 40 percent in the first quarter of 2013, totaling to around 144 new vehicles purchased in Japan. And though North America was Ferrari’s biggest market last year (over 2,000 deliveries) and China is still the biggest automobile market in the world, Japan is still proving to be a significant hub for Ferrari sales, owing to the fact that the country is home to the world’s biggest active Ferrari owners’ club, with more than 600 members, this according to the group’s website. “The growth is very promising, and I think we can expect these super luxury brands to introduce more models that they hadn’t introduced to Japan before and to strengthen their dealership networks,” said Yoshiaki Kawano, a Tokyo-based auto analyst at industry researcher IHS Automotive. “The optimism for an economic recovery is spreading.” Ferrari plans to take advantage of this growth, even putting up a new after-service facility in the country this month. “We are ever more committed to offer a quality of service to cater to the needs of our growing number of Japanese clients in every step of ownership,” said Herbert Appleroth, head of the company’s operations in the country.
The central Japanese government is optimistic about the surge in demand for luxury cars. This, to them, can only be signs that Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda’s “Abenomics” is gradually gaining momentum, taking the yen value down and reviving a culture of spending in the country. “It seems like demand is coming back,” said Michiaki Ishida, a spokesman for the auto importers association. “Some people are reacting to Abenomics, so the trend may continue.” The stock market is showing continuous and consistent signs of improvement, climbing back to levels before the collapse in September 2008. All in all, households have become more confident about spending their money, giving a great confidence in the market about Japan’s economic outlook.

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Coming today: A Facebook phone?

(CNN) -- The long-rumored Facebook phone might finally be ready to make its debut.

The company is expected to announce a new HTC smartphone running a special Facebook-centric version of Android on Thursday, according to numerous rumors and leaks on tech sites and major publications including The New York Times, The Wall Street Journal and 9to5Google.

Expanded smartphone integration is a logical step for the social media company, which has been working hard to increase its mobile presence and make more money off of mobile advertising.

The only official hint doled out by Facebook so far is that the announcement has something to do with Google's Android mobile operating system, with the invite asking press to "Come see our new home on Android" at its Menlo Park, California headquarters.

Facebook CEO's new project

Do you have Facebook Graph Search yet?

Rumors of a Facebook phone have been swirling for years, but CEO Mark Zuckerberg has repeatedly denied the company was "building" a phone, saying Facebook was not interested in becoming a hardware company.

Those carefully worded denials should still stand. If rumors prove true, Facebook hasn't built a phone, it's just partnered with a phone manufacturer to place its service and apps more front and center on a typical Android smartphone.

That device is expected to be an HTC 4.3-inch smartphone called the HTC First that bears a passing resemblance to the iPhone, comes in multiple colors, and packs in the usual mid-range specs at moderate price. There doesn't seem to be much that's exceptional or new about the hardware itself beyond the Facebook makeover.

Screens shots that purportedly show the new Android homepage, possibly called Facebook Home, show buttons along the top for common Facebook actions, such as updating a status, posting a photo or checking into a location, and icons for the major Facebook apps including Instagram and Messenger in the center of the screen.

Facebook might also release a similar new standalone Facebook Android app for all Android phones.

The homepage retooling would expand Facebook's reach beyond the standalone Facebook app, spreading its presence into more parts of the smartphone experience. People would end up spending larger amounts of time using the social network's features, in turn giving Facebook more opportunities to collect data and serve up relevant ads.

Smartphone users are already checking Facebook an average of 14 times a day, according to a recent survey by IDC. Facebook was the most popular mobile app across platforms in 2012 in the U.S. according to comScore, and in January more people were checking Facebook on their mobile devices than desktop computers for the first time.

If priced low enough, a Facebook-centric phone could be appealing to Facebook fans in developing countries, where the network is popular and smartphone sales are still rising sharply. The partnership could also be a boost for Taiwanese phone manufacturer HTC, which has been struggling to keep up with smartphone leaders Samsung and Apple.

Facebook has been focusing intensely on mobile since going public in mid-2012. In the past year it has revamped its iOS and Android mobile apps and started displaying ads on mobile devices. As a result, the company has had signficant success making money on mobile. According to a recent report from research company eMarketer, Facebook is currently the second largest mobile ad publisher in the U.S. after Google, and is expected to make $964.9 million in mobile ad revenue in 2013.

This is the third major product announcement from Facebook in recent months. The first was for Graph Search, an advanced search tool for more effectively drilling down into your Facebook to network to find people and pages and companies. Last month the company unveiled a redesigned news feed that looks more like its mobile apps.

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Logistics and insurance firms driving office market

Increases in Cambodia’s GDP and foreign direct investment (FDI) are helping to drive the supply and demand in the Kingdom’s office sector, according to a new report from global property agents CBRE.

The report says demand from international occupiers looking to enter the emerging market of Cambodia remains strong.

Increasingly, international businesses are favouring Cambodia, in particular Phnom Penh, mainly due to the stable economic growth and the integration with the ASEAN Economic Community in 2015.

The office market remains positive with the imminent arrival of the Vattanac Capital, Cambodia’s first international Grade-A office building, which is now due for completion later this year. This will set a precedent for future development, and bring further confidence to the sector.

To meet demand, a further 34,000 square metres of newly completed, grade-A office space is likely to become available this year, CBRE says.

Grade B office space is also set to increase by 15,000 square metres, with the completion of GT Tower increasing the current supply by 30 per cent to 190,000 square metres.

Occupancy rates are positive, with the majority of medium-sized Grade B/C multi-tenant office buildings enjoying 90 per cent occupancy. The current office vacancy rate across the market for multi-tenant purpose-built office buildings stands at 18 per cent, or 34,200 square metres of available space.

The majority of office space in Phnom Penh is still low-grade space in terms of international standards.

More established businesses continue to drive the market through expansion requirements, generally taking additional space within the existing office, or relocating in search of larger floor coverage.

Transactions in the 50-100 square metres range will continue to dominate, much as they did in 2012, especially for logistic and manufacturing companies from countries such as Korea, Japan and China, as well as other areas of Asia.

Due to the high demand, and the slow release of new office development, landlords at the mid- to high-tier end of the market are reportedly taking a bullish attitude on renewals and taking on new tenants.

Tenants are also motivated by good incentives offered for space of 500 square metres and over.

The prime-rent index across Phnom Penh shows an annual growth of 3 per cent, with further prime rental growth expected toward the end of 2013.

Whilst well located grade-B offices have enjoyed a 10 per cent annual increase, Grade-C space has declined slightly, with a number of tenants looking to improve their professional image by relocating into higher quality offices.

Across all office grades, the current market average rent is equal to $15 per square metre, although this is set to increase with the launch of the first Grade A office space increasing the average rents.

In addition, parking spaces are becoming increasingly favoured by new tenants, as they require additional space for their employees. Landlords also benefit as it provides an additional income-stream of up to $160 per space.

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Nissan LEAF production rolls out in the United Kingdom

Nissan‘s Sunderland factory in England has started production of its all-electric car, the Nissan Leaf, last week, marking the first time that the cars are produced in Europe. The car manufacturer has invested almost $640 million in the 30-year-old plant, as well as for the construction of a battery plant, for the production of the car’s lithium-ion batteries.
British Prime Minister David Cameron welcomed the investment and considers it a major boost for the country’s automotive industry. His government has spent around $610 million to make the UK a “leading market for ultra low-carbon vehicles,” and he believes Nissan’s move is a reflection of the growing confidence in the UK as a good business environment for companies like theirs.
The five-door environment friendly hatchback has sold 50,000 units worldwide but until recently, has mostly been produced in its plant in Oppama. Late last year, Nissan announced that they were going to produce the car’s complicated “eMotor” in their Smyrna plant in Tennessee for the first time. Together with the production in Sunderland, the new version of the car now has more than 100 updates and a longer range of 124 miles.
Domestically in the UK, a locally produced Nissan LEAF will cost $36,000, subtracting already the $7,620 government subsidy. This is a $3,800 mark down from the previous Japan-manufactured models. The sales of the LEAF in 2012 were less than satisfactory, falling short of the targeted 40,000 units sold. This has prompted the company to drop the prices and offer a more “economic” version of the car.

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New carrier to take off

Angkor Airway plane lands at Phnom Penh International Airport. Photograph: Vireak Mai/Phnom Penh Post

A new national carrier is set to break into the Kingdom’s  monopolised domestic airline market with the formal establishment yesterday of Cambodia Airlines, stoking hopes of cheaper airfares.

Cambodia Airlines will launch flights by the third quarter of this year linking Phnom Penh, Siem Reap and Sihanoukville, said Mark Hanna, chief finance officer of Royal Group, which has a 51 per cent stake in the joint venture airline.

Regional flights would begin in October, and Cambodia Airlines is also considering launching services to more obscure domestic destinations such as Battambang, Ratanakkiri and Mondulkiri, he said, ahead of the signing ceremony yesterday.

“We are looking at Southeast Asia and China, and will be flying to the major regional hubs,” Hanna said.

“Long-haul flights will start next year,” he added. He could not confirm any specific destinations, and declined to reveal the airline’s paid-up capital.

Philippines-based food, beverage and packaging giant San Miguel Corporation, which already has significant holdings in Philippine Airlines, owns the remaining 49 per cent stake of the joint venture.

The arrival of a new player in Cambodia’s airline market will likely up the ante for Cambodia Angkor Air (CAA), which until now has enjoyed total market share of the Kingdom’s scheduled domestic flights.

A January report from the Centre for Aviation found that CAA’s monopoly had led to unusually high fares, causing domestic air travel to shrink by about 15 per cent since roughly 170,000 domestic passengers took to the skies in 2008.

The government later disputed these claims, with Council of Ministers Secretary of State Tek Reth, himself chairman of CAA, arguing that other local airlines operating chartered flights were free to launch scheduled domestic flights. He said international carriers were forbidden from entering the Cambodian domestic market and that it was standard practice for countries to impose such restrictions. With the new Cambodia Airlines in the works, experts said yesterday they believed the industry would benefit.

“With more competition, I believe ticket prices may go down, but I don’t know by how much,” Cambodian Association of Travel Agents president Ang Kim Eang said.

The new airline has been more than 10 years in the making for the Royal Group, which set up a company called Cambodia Airlines in 2002.

“We didn’t launch [the airline] because we were looking for a suitable partner,” Hanna said.

Negotiations had begun last year with San Miguel, he said. That  year, San Miguel bought a 49 per cent stake in the loss-making Philippine Airlines for $500 million.

Philippine Airlines had a good network of long-haul destinations in the US and Europe, so “We can feed into this network,” Hanna said.

Cambodia Airlines hopes to bring in two Dash-8 aircraft for domestic flights and two Airbus A321s to fly overseas. The airline will submit its flight plans to SSCA “over the next couple of months”.

Cambodia Airlines and Royal Group chairman Kith Meng said the new carrier would “contribute to Cambodia’s economic growth by creating employment opportunities, bringing in foreign investors and building a strong aviation industry.”

Both Cambodia Angkor Air and Cambodia Airlines insisted they were not worried about the competition that lay ahead.

“The number of tourism arrivals  in Cambodia is growing quickly every year,” Hanna said.

“Cambodia Airlines] believes there is a demand for two airlines in this country.”

Meanwhile, Reth said: “[Cambodia Airlines] is the newcomer. We have been flying in this market for more than three years — they should be worried about us.”

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US stocks pushed to new record highs, bolstered by solid US manufacturing orders and strong results from US automakers.

Traders work on the floor of the New York Stock Exchange. (AFP/Spencer Platt)

NEW YORK: US stocks pushed to new record highs on Tuesday, bolstered by solid US manufacturing orders and strong results from US automakers.
The Dow Jones Industrial Average closed at an all-time record high of 14,662.01, up 89.16 (0.61 per cent).
The broad-based S&P 500 also reached a new record, gaining 8.08 (0.52 per cent) at 1,570.25.
The tech-rich Nasdaq Composite Index added 15.69 (0.48 per cent) at 3,254.86.
The rally followed a US Department of Commerce report that showed new orders for manufactured goods rose 3.0 per cent in February, topping expectations of a 2.6 per cent increase.
General Motors, Ford and Chrysler reported their best US monthly sales performances since 2007. GM cited "a strengthening economy and new products" as factors behind the result.
GM gained 0.5 per cent, while Ford added 0.9 per cent.
Oil refiners took a beating after Valero said new US environmental regulations would cost the company hundreds of millions of dollars. Valero dropped 5.7 per cent.
Marathon Petroleum slid 4.9 per cent and Phillips 66 lost 3.5 per cent.
Health-care equities rose after the Centres for Medicare and Medicaid Services announced it would increase payments under the Medicare Advantage program by 3.3 per cent in 2014 instead of cutting payments as previously expected.
Dow component UnitedHealth Group Inc. jumped 4.7 per cent, Humana put on 5.5 per cent, Aetna added 3.7 per cent, WellPoint rose 1.5 per cent and Cigna climbed 2.9 per cent.
Youth-oriented clothing chain Urban Outfitters rose 3.8 per cent after disclosing in an SEC filing that comparable store sales in the current quarter were "high single-digit positive."
Nuance Communications, which provides dictation and transcription services, among other voice and language services, gained 5.7 per cent after activist investor Carl Icahn took a 9.3 per cent stake in the company.
Hewlett-Packard shed 5.2 per cent after Goldman Sachs lowered its rating to "sell" from "neutral."
Delta Air Lines fell 8.1 per cent after trimming its estimates for March 2013 air travel business.
The Nasdaq OMX Group, which runs the Nasdaq Exchange, dived 12.8 per cent after announcing an acquisition of the eSpeed platform for electronic trading in US Treasuries.
Bond prices fell. The yield on the 10-year Treasury rose to 1.86 per cent from 1.84 per cent late Monday, while the 30-year increased to 3.10 per cent from 3.09 per cent. Bond prices move inversely to yields.

- AFP/fa

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Air force ready to aid Thais in South Korea

Thai people living in South Korea are still leading normal lives, but Thai authorities say they are ready to provide assistance if the tense situation on the Korean Peninsula intensifies.

The Foreign Ministry said on Tuesday there are about 43,000 Thais in South Korea, and that the Thai embassy in Seoul is carefully monitoring the situation.
According to the embassy, Seoul had not issued security warnings yet and international airlines were operating normally.

South Korean marines stand on K-55 self-propelled howitzers during an exercise against possible attacks by North Korea near the border village of Panmunjom in Paju, South Korea on Monday. (AP Photo/Ahn Young-joon)

The ministry will consider how best to provide assistance for Thai people in South Korea if the tensions intensify and disrupt their lives.
Bangkok has expressed its concern about a possible confrontation between North and South Korea, warning it would affect regional stability. It has called on Pyongyang to listen to the global community and discontinue its nuclear weapons programme and other provocative activities.
The government urged all sides to exercise patience and prudence and resolve the conflict through talks.
Air force chief Prajin Jantong said two C-130 transport aircraft and an Airbus 310 were standing by ready to evacuate Thai people within 48 hours if fighting breaks out between South Korea and North Korea.
"It is difficult to predict the situation and whether North Korean leader Kim Jong Un is brave enough [to attack]," ACM Prajin said.
Meanwhile, North Korea announced on Tuesday it was "readjusting and restarting" all facilities at its main Yongbyon nuclear complex, including a reactor mothballed in 2007, AFP reported, quoting the official KCNA agency.
A nuclear energy spokesman said the move was being made in line with a policy of "bolstering the nuclear armed force both in quality and quantity" as well as solving "acute" electricity shortages.
Tensions have been high since the North's young new leader, Kim Jong-un, ordered a nuclear weapons test in February, breaching United Nations sanctions and ignoring warnings from North Korea's closest ally, China, not to do so.
In protest at joint South Korean-US military drills, North Korea last month declared it was ripping up the armistice that ended the 1950-53 Korean war void and threatened a "pre-emptive nuclear strike" on South Korean and US targets.
On Saturday, it announced that it had formally entered into a "state of war" with South Korea.
Seoul and Washington have warned of severe repercussions in the event of any aggression, with the US deploying nuclear capable B-52 and B-2 stealth bombers, as well as F-22 stealth fighters over South Korea as a "deterrence".
The advanced F-22 Raptors were deployed to Osan Air Base, the main US Air Force base in South Korea, from Japan to support ongoing bilateral exercises, the US military command in South Korea said in a statement that urged North Korea to restrain itself.
"[North Korea] will achieve nothing by threats or provocations, which will only further isolate North Korea and undermine international efforts to ensure peace and stability in Northeast Asia," the statement said.

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Cypriots Feel Betrayed by European Union

 

Angelos Tzortzinis for The New York Times

Charalambos Alexandrou, shown with his wife, Aliki Perganti, had a lucrative job in construction after Cyprus joined the European Union in 2004. Today, he has much less work.

By LIZ ALDERMAN

NICOSIA, Cyprus — Like a lot of Cypriots, Charalambos Alexandrou helped build his country into a modern Mediterranean paradise.

As money flowed into the island’s banks after Cyprus joined the European Union in 2004, the country embarked on a construction boom. He landed a lucrative roofing job, at first for sleek homes and shops, and then for the mansions that took over olive groves and vineyards. The demand for his skills only accelerated after the country was admitted into the euro currency union in 2008.

But in the last two weeks, he has watched his finances slide as the foundations of his country crumble during the collapse of the banking system. The severe terms of the country’s 10 billion euro ($13 billion) international bailout have tied up everyone’s cash, forced huge losses on the strictest savers and are expected to hasten a deep recession that may take years to overcome.

Mr. Alexandrou, 30, says he understands that the crisis in Cyprus was brought on by bank mismanagement and even financial corruption.

What most pains him and many others here, though, is that central bankers and other international financial officials have, by letting their country’s 860,000 citizens suffer for the sins of a powerful few, shattered Cyprus’s solidarity with the European Union.

Cyprus is no poor cousin to the European Union, they say. Instead, it is a country with a small, but remarkably multilingual, solidly educated and until now comfortably middle-class population — people who consider themselves precisely the type of Europeans the rest of the union should be proud to have anchor its border with the Middle East.

Many Cypriots now feel great shock and anger at what they consider their economic excommunication.

“Not everyone here is Russian, or making money illegally, or laundering money,” Mr. Alexandrou said. “Most of us are normal people living normal lives.”

He sat, face grim, with his wife, Aliki, and their energetic 18-month-old son, Alexandros, in the living room of their modern white house on the outskirts of Nicosia. “Now we see that nothing good has come from European solidarity,” he said.

For Cypriots, joining the European Union and adopting the euro were significant achievements. After decades of internal strife and foreign occupation, Cyprus regarded acceptance into the European family as a promise of stability and the chance to forge a more modern economy.

During the boom times, Mr. Alexandrou acknowledged, Cyprus, like many European countries, lived beyond its means. But while it is time for the country to pay for its follies, he said, “there is the sense that no one in Europe really cares what happens to us.”

Some of his fellow Cypriots have vented their resentment in protests, shouting anti-German epithets and burning the European Union flag. Cypriots are relatively stoic compared with their more fiery brethren in bailed-out Greece, but there is deep-seated anger over the perception that Europe is kicking Cyprus while it is down.

“We made sacrifices to integrate Cyprus into the great European family,” Antigoni Papadopoulou, a member of Parliament, said last week as Cyprus tried to negotiate its bailout. But “there is a real lack of European solidarity,” she said.

With encouragement and subsidies from Brussels, Cyprus moved away from an agricultural economy toward an emphasis on services that support business, finance and communications. Manufacturing was also allowed to lapse, with locally made goods — whether shoes or pharmaceuticals — all but disappearing.

Cyprus’s leaders seized the opportunity to recast the island as a strategic hub at the crossroads of Europe, the Middle East and Asia. Their ambition was to emulate the wealthy, discreet European money havens of Luxembourg and Switzerland, thus securing a comfortable way of life for their people.

 

A version of this article appeared in print on April 2, 2013, on page B1 of the New York edition with the headline: Cypriots Feel Betrayed by European Union.

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Businesses regroup after fire

Security guards chat yesterday in front of the remnants of a business destroyed during Sunday’s blaze in Sihanoukville. Photo Supplied

A day after a blaze ripped through Sihanoukville’s Serendipity Road – one of the tourist town’s  busiest streets – business owners affected by the fire were picking up the pieces.

“Everything is black; it’s just charcoal,” said Craig Warren of Mick and Craig’s, a restaurant and guesthouse that saw the restaurant half of his business go up in flames on Sunday afternoon.

“We’re just trying to put a smile on things at the moment,” Warren added. “We’re accessing the situation and will be talking to our landlord to see if we can work something out.”

Although they intended to clean-up and reopen, none of the businesses contacted by the Post said they had any insurance to cover the damage.

Nuria Zoco of Zoco Clothes said affected business-owners were interviewed by the police yesterday but were still in shock.

No one was injured in the fire, and police are still investigating its cause.

Zoco said: “For sure we will reopen again, but with the Khmer New Year coming, it’s hard to actually get someone to come and repair the damage.”

She added that with the water shortage Sihanoukville was currently facing, none remained to help with the clean-up anyway.

“This is a massive problem right now. If there was water, the fire probably would not have taken down that many buildings,” said Zoco.

The fire started just before noon on Sunday and raged for more than two hours. But because of the water shortage, firefighters arrived on site only to find the hydrants dry.

While they were waiting for the mains to be turned on, the fire spread. In addition to Mick and Craig’s and Zoco Clothes, the fire razed the Monkey Republic guesthouse and restaurant, where the fire is suspected to have begun, a dive shop and a laundromat.

Prak Prakod, director of provincial water supply authority (WSA), said the current water shortage was unprecedented.

He added that the WSA was in talks with ANCO Brothers – a company that supplies water to some provinces – to make up the shortfall until the wet season.

Perhaps a bit too late, he promised: “Next month, we will have a good water supply.”

ADDITIONAL REPORTING BY KHOUTH SOPHAK CHAKRYA

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Battery overheats in Mitsubishi hybrid, from same manufacturer of Dreamliner power source

 

Japanese automaker Mitsubishi Motors Corp. said at a briefing in Tokyo yesterday that the lithium-ion battery in one of its Outlander plug-in hybrid has overheated last week while it was charging prior to delivery. It said that the battery was found damaged and had a weird odor about it. It clarified, however, that no injuries or damage to dealership had resulted from it.
The lithium-ion battery for the Outlander was manufactured and supplied by the joint venture between GS Yuasa Corp, Mitsubishi Corp and Mitsubishi Motors. GS Yuasa, of course, is known as the supplier of the massively grounded Boeing 787 Dreamliners. Mitsubishi said that the batteries in its hybrid vehicle are made in a different factory and are designed differently from that of Boeing’s. In the initial assessment, Mitsubishi said that the short-circuit may have been caused by metal chips and foreign objects found in the battery. They may have entered the battery during production and passed inspection unmarked. It warns owners not to charge the batteries while they figure out the extent of the problem.
Mitsubishi Motors is said to halt production and deliveries of the Outlander. An official said that the estimate for stoppage would be one to two weeks. As of the moment, they are only contemplating on a massive recall, but none has yet to be announced.

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Panasonic pulls out of New York Stock Exchange listing

Japanese consumer electronics mogul Panasonic Corporation announced yesterday that it will no longer trade in the New York Stock Exchange (NYSE) and will be pulling out its equities soon enough. It said it is set to apply to voluntarily de-list its American Depositary Shares in the NYSE, as well as remove registration of those shares from the Securities and Exchange Commission. It aims to complete delisting by July.
According to the company, one of the reasons it has decided to stop trading in the NYSE is because of the increase in volume of trading Japanese stocks by investors overseas. It also cites the similarities in disclosure standards by the United States and Japan. The expense of reporting requirements is said to have also played a role in the decision. “The continued listing on the NYSE is not economically justified taking into account the fact that the trading volume of Panasonic’s ADRs on the NYSE accounts for only a small fraction of the total trading volume of Panasonic’s shares.” said an official release.
Also yesterday, Panasonic President Kazuhiro Tsuga said that the company will spend 250 billion yen (approx. $2.65 billion) for the restructuring of its operations, which is aimed to be completed on 2015. It will involve rearranging 88 business units to form a more compact 49 units, which includes the transfer of its logistics to Nippon Express Co. Ltd. The restructuring will lessen the electronics aspect of the business and expand on the automotive and home products aspect

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Middle class willing to spread investments beyond property

Property buyers look at real estate models in Hangzhou, Zhejiang province. According to a report by Forbes China, 96.7 percent of the Chinese middle class own apartments. [Photo/China Daily]

The Chinese middle class — the main driving force behind national consumption — is growing rapidly and investing in many areas of the economy, not just property.
So says a report from Forbes China, which now identifies the country's middle class as those with "investable" financial assets worth between $100,000 and $1 million.
Its Chinese Mass Affluent Group Report 2013, released on Thursday, said their financial assets are spread across cash, deposits, securities, funds, bonds, insurance and other financial wealth management products, as well as individually held property.
Over the past four years, the total financial assets of the Chinese middle class remained at 1.33 million yuan ($213,900) per capita, said Shi Guowei, research director of Forbes China, who co-wrote the report.
The numbers reached 10.26 million by the end of 2012 and are expected to rise to 12.02 million by the end of this year.
Zhou Jiangong, the editor in chief of Forbes China, added: "The Chinese middle class has been overlooked in the past few years, but they are playing a significant role in the economic and social development of the country.
"As urbanization proceeds, the Chinese mass affluent, or the middle class, will of course expand."

Although the examination claims 96.7 percent of Chinese middle class own apartments, and 39.9 percent have three or more apartments, Lyu Qi, the chief wealth management expert at Beijing-based wealth management company CreditEase, and a co-writer of the report, warned that the time to quickly accumulate wealth via property had ended.

"The ways the Chinese accumulate their personal wealth have been oversimplified, in that property became the most popular means of investment.
"There really is a lack of diversity in financial products with fixed income due to the country's little-developed interest rate marketization and the infantile asset-backed securitization.
"There is a huge amount of deposits, while domestic consumption has not yet been boosted," said Lyu. "But there will be an undisputable growing need for wealth management products in future."

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Google and Ogooglebar: Who owns the meaning of words?

(Copyright: Getty Images)

How do you say “something that cannot be found on the web using a search engine” in Swedish?

Until this week, you could have said ogooglebar, a term sanctioned by no less than the Language Council of Sweden, and roughly equivalent to the English speaker’s mouthful “ungooglable.”
Unfortunately for search-challenged Scandinavians, Google didn’t like the idea of its name being part of a general term for online search, and suggested amending the definition to describe only searches performed via Google. The Language Council – which is dedicated to documenting the emergence of new words in Swedish – didn’t think much of this, or fancy a lengthy legal process. So the word was removed from the official list of new Swedish terms.
Whether absence from this list will make much difference to Swedish speaking habits remains to be seen, although it seems unlikely. As the Council put it in an online statement on 26th March – at least so far as I can tell, courtesy of none other than Google’s translation service – “Google has namely forgot one thing: language development do not care about brand protection. No individual can decide about the language.” The grammar may be iffy, but the point is clear. Courtesy of the internet, the furore around ogooglebar is likely only to spread its usage.
There are larger concerns at stake here, however. I’ve spent much of the last year writing a book about language and technology, and the rise of “ungooglable” and its international equivalents marks one of the most characteristic linguistic evolutions of our age: binary vocabulary.
Unfollow, unfriend
To take just a handful of terms, consider what it means to “like” and to “unlike”, or to “favourite” and to “unfavourite”; how you can “follow” and “unfollow”, or “friend” and “unfriend”, other people; and how you constantly “click” or “unclick” onscreen boxes.
In each case, what’s on offer is a near-miraculous promise of agency: the possibility of words and actions that are, unlike those taking place in the real world, entirely reversible. There’s nothing that cannot be undone in an instant, then done again at will (the word “undone” itself has existed in English for around 700 years but, when Shakespeare and his predecessors used it, they usually implied death or destruction: a far cry from pressing “Ctrl-Z” on a keyboard).
Even “ungoogleable” has a reassuring kind of certainty to it. On the one hand lies the ordered, searchable realm within which we conduct our daily digital business. On the other, there’s the stuff we’re best off not worrying about: a messy, unsearachable space spanning everything from cyber-dissidents to criminals, via paywalls and anonymous networks.
Except, of course, the boxes of online experience are never quite as tidy as they seem. “Untag” yourself from an embarrassing public image – or indeed from an image that doesn’t actually show you at all – and both the deed and the undeed will remain recorded forever. Unfollow or unfriend someone you know and they will vanish from view – but they may well never forget or forgive. No matter how many times you click undo, the machine records and remembers.
Reversible words promise a kind of perpetual present, in which everything can always be exactly the way you want it (provided you only feel one of two ways). Yet data itself only accumulates. Whether you consider yourself to be ogooglebar or not, the digital book of your life is steadily being written within somebody’s servers – and few of its words will ever be unwritten.

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Aero aiming to open up Kingdom

Last Updated on 29 March 2013

By Low Wei Xiang and May Kunmakara

Water way to travel: A Cessna 208 Caravan Amphibian plane docks on the Tatai river in Koh Kong province after a test flight by airline Aero Cambodia. Photo Supplied

LOCAL private airline Aero Cambodia intends to launch domestic chartered flights by the end of this year once it receives approval from the government.

The airline is preparing to apply for its air operator certificate from the State Secretariat of Civil Aviation (SSCA) and hopes to receive it by the end of the year, Aero Cambodia’s CEO Brian Naswall, said.

“We hope to go where Cambodia Angkor Air doesn’t go,” with potential destinations including Koh Kong, Battambang and Ratanakkiri, he said.

Eco-tourism is big in Ratanakkiri, but the road conditions make the journey uncomfortable, he said. Air travel is faster – flying from Phnom Penh to Ratanakkiri would take an hour and 15 minutes, he added.

Aero Cambodia also hopes to launch a Phnom Penh to Sihanoukville route, should no other airline do so first, according to Naswall. Earlier this year, the Post reported that Cambodia Angkor Air would likely start the same route this April.

“We will start off with chartered flights and, if our customers demand more, we may start scheduled flights,” he said. Airlines typically use chartered flights, organised via private hiring arrangements, to test market demand for new routes.

The airline’s eventual destinations would also depend on whether it can afford the airport fees and whether its test flights are successful, Naswall said.

Earlier this year, trial flights were executed successfully at Sihanoukville, Koh Kong and the islands around Koh Rong with the 12-seater Cessna 208 Caravan Amphibian plane. Having an amphibious plane allows the airline to reach more destinations, Naswall said.

The model is one of the six aircraft that Aero Cambodia hopes to eventually bring in, which will also include smaller planes like the two-seater Cessna 150.

A Cessna 208 Caravan Amphibian made in 1998 costs about $1.7 million.

Aero Cambodia, founded in 2010, consists of investors from Cambodia, Australia, Canada, and the US, most of whom are based in Cambodia, said Naswall, a US citizen and a licensed pilot.

“Finding investors from beyond Cambodia is the biggest challenge, as many do not know much about the country,” Naswall said.

He added he is also “trying to work to set up a [different] fee structure for smaller aircraft with the government, which has been very helpful”.

It costs more to fly each passenger with a smaller plane, so the airline is trying to keep costs low, he said.

Aero Cambodia would be Cambodia’s fourth local airline. Currently, Cambodia Angkor Air, Skywing Airlines, and TonleSap Airlines operate either regular or chartered flights, Soy Sokhan, SSCA’s undersecretary of state, said.

According to another SSCA undersecretary of state, Eng Soursdey, while “there are airfields in almost every province” in Cambodia, only four are currently usable – the domestic airports at Battambang, Stung Treng, Ratanakkiri and Koh Kong.

These airports have navigation facilities and staff working there, he said, even though he believes no airline currently flies there.

Co-chair of the Government-Private Sector Working Group on Tourism, Ho Vandy, said Aero Cambodia’s planned flights will boost tourism here. “Tourists spend a short time here, but they want to see many places.”

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Cyprus capital controls 'may last a month'

The BBC's Tim Willcox was in the city of Nicosia when the banks opened their doors to customers

Restrictions on cash withdrawals, money transfers and the movement of cash in and out of Cyprus could remain in place for a month, the foreign minister says.

Ioannis Kasoulides said capital controls would be lifted gradually, appearing to contradict earlier estimates that curbs would end in days.
He spoke at the end of a first day of operations in almost two weeks for the country's crisis-hit banks.
Earlier, the president praised Cypriots who queued in orderly fashion for cash.
Nicos Anastasiades hailed the country's "maturity and responsibility" on a day that saw many wait to access their cash.

Cyprus capital controls

The government has appointed three former supreme court judges to investigate possible criminal activity in the crisis.

The tight capital controls were put in place after a 10bn-euro bailout deal was agreed with the EU and IMF.
Withdrawals over 300 euros are banned, and there are limits on moving money.
Branches were replenished with cash overnight and police were deployed amid fears of a run on the banks.
Some queues did form but the mood was generally calm.
Branches began to open at noon local time (10:00 GMT) and closed at 18:00 (16:00 GMT).
Some did not open on time, causing tension among customers. The longer queues formed outside branches of Laiki, which is being wound up.
Some armed police were deployed in cities and hundreds of staff from the private security firm G4S are guarding bank branches and helping to transport money.
One customer in a queue in Nicosia told the BBC's Tim Willcox he was withdrawing the allowed daily amount of 300 euros ($383; £253) but would take out all of his money if he could.
Our correspondent says the predictions of a stampede did not materialise and in some places there were more journalists than depositors.
Another customer, jewellery shop owner, Roula Spyrou, told AFP news agency: "There's going to be queues so I'm not going to spend so many hours there to get 300 euros."
Loss of trust Cyprus is the first eurozone member country to bring in capital controls.
Cyprus needs to raise 5.8bn euros ($7.4bn; £4.9bn) to qualify for a 10bn-euro bailout from the European Commission, European Central Bank and the International Monetary Fund, the so-called troika.
As part of the bailout plan, depositors with more than 100,000 euros will see some of their savings exchanged for bank shares.
An earlier plan to tax small depositors was vetoed by the Cypriot parliament last week.
As it became clear that calm was being maintained, President Nicos Anastasiades tweeted his gratitude.
"I would like to thank the Cypriot people for their maturity and collectedness shown in their interactions with the Cypriot Banks," he wrote.
Officials later confirmed that the president would take a 25% pay cut, with cabinet ministers accepting a 20% pay cut.
The stock exchange, shut since 16 March, remained closed on Thursday and will not reopen until after Easter.
In a statement issued on Wednesday, the ministry of finance insisted the capital control measures were temporary and were needed to "safeguard the stability of the system".
They would be reviewed each day, the ministry said.
But Mr Kasoulides, the foreign minister, appeared to contradict this in remarks to reporters on Thursday.
"A number of restrictions will be lifted and gradually, probably over a period of about a month according to the estimates of the central bank, the restrictions will be fully lifted," Reuters quoted him as saying.
The severe new rules have been imposed to prevent a torrent of money leaving the island and credit institutions collapsing.
As well as the daily withdrawal limit, Cypriots may not cash cheques.

Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month.
Transactions of 5,000-200,000 euros will be reviewed by a specially established committee, with applications for those over 200,000 euros needing individual approval.
Travellers leaving the country will only be allowed to take 1,000 euros with them.
Many economists predict the controls could be in place for months.
The unprecedented restrictions represent a profound breach of an important principle of the European Union, says the BBC's economics correspondent Andrew Walker.
That principle holds that capital, as well as people and trade, should able be to move freely across internal borders, he says.
However, the European Commission said member states could introduce capital controls "in certain circumstances and under strict conditions on grounds of public policy or public security".
But it added that "the free movement of capital should be reinstated as soon as possible".
One employee of the Bank of Cyprus told the BBC that everybody's jobs were at risk.
"If the Bank of Cyprus collapses, all the small business, the large businesses, everything collapses. They cannot buy anything, import anything, export anything. There is nothing," she said.

Are you in Cyprus? Have your finances been affected by the banking crisis? You can send us your experiences using the form below.

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BRICS summit kicks off in Durban

DURBAN - The fifth BRICS summit opened in Durban, South Africa, Tuesday night with President Jacob Zuma hosting a banquet for his counterparts of the five-member grouping and African heads of state and government at the special invitation.
The theme of the summit is: BRICS and Africa: Partnership for Development, Integration and Industrialization.

Chairpersons of all African regional economic blocs and the New Partnership for African Development are expected to participate in the BRICS leaders-Africa Dialogue Forum on Wednesday under the auspices of the African Union, amid greater recognition of and greater interaction with regional institutions on the continent.
They will join Zuma and Presidents Dilma Roussef of Brazil, Vladmir Putin of Russia and Xi Jinping of China and Prime Minister Manmohan Singh of India.
Among other things, BRICS leaders will endorse an agreement by their finance ministers to establish a BRICS development bank, which will finance infrastructural development within the five emerging economies. If it expands to include other nations, it will provide an alternative source of funding from the International Monetary Fund and World Bank.
The summit is expected to assert BRICS as a growing but already influential force in global economics, governance, peace and security, which it will tackle in the face of political problems in countries like Syria, which has since asked BRICS to assist find a political solution.
Earlier on Tuesday, businesspeople from BRICS nations held a Business Forum and came up with recommendations which they will present to their leaders during a breakfast session on Wednesday.
Two agreements between China and Brazil and 10 between South Africa and Russia were signed Tuesday.
The first between China and Brazil were a Memorandum of Understanding on Bilateral Cooperation in Macroeconomic, Fiscal and Financial Policies and the second one was a currency swap agreement to broaden access to financial resources between the two countries whenever the need arises.
One of the agreements South Africa and Russia signed enables the former to service hundreds of Russian-made helicopters operating in sub-Saharan Africa at a facility in Johannesburg run by state-owned Denel Aviation Company.
The service center will also train helicopter technicians and pilots, thus helping increase helicopter engineering talent in Africa.
Other agreements were on air safety, education, arts and culture, fishing, mining, transport, energy and science and technology.
The deal was a result of deepening Russia-South Africa relations in the context of their membership in BRICS.
The summit ends Wednesday with the signing of agreements on green economy cooperation co-financing and on infrastructure co- financing for Africa, the launch of a BRICS Business Council and the announcement of the declaration on the establishment of the BRICS Think-Tanks Council that was signed on March 11.

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Cyprus making 'superhuman' effort to reopen banks by Thursday

The head of the Cypriot central bank has said that "superhuman" efforts are being made to open the country's banks on Thursday.

Banks in the country have been shut for more than a week as a controversial bailout was negotiated, which will see depositors take losses.
"We have to restore the public's trust in banks," Panicos Demetriades said.
Meanwhile, the BBC has learned that Cyprus is planning to impose a weekly limit on cash withdrawal


"We have to restore the public's trust in banks," Panicos Demetriades said.
Meanwhile, the BBC has learned that Cyprus is planning to impose a weekly limit on cash withdrawals.
The country's draft capital controls include export limits on euros and a ban on cashing cheques, said Newsnight economics editor Paul Mason.
In addition, fixed-term deposits will have to be held until maturity.
"A superhuman effort is being made for the banks to open on Thursday," Mr Demetriades said. He also confirmed that "temporary" capital controls will be imposed on the island, but he would not spell out the restrictions and how long they would last.
Banks have not been open since 15 March. Their reopening had been ex
pected after Cyprus agreed a deal with the International Monetary Fund (IMF) and the European Union (EU) that releases 10bn euros in support.

The Cypriot authorities had previously said all that but the biggest two banks would open on Tuesday, but they have remained shut while the finer details of capital controls are handled by the Cypriot central bank.
'Not decided'

Earlier, Cyprus's finance minister earlier confirmed that depositors with more than 100,000 euros could see 40% of their funds converted into bank shares.
But Michalis Sarris also said that Cypriot depositors with less than 100,000 euros in their accounts "will not be hit".
"The exact percentage is not... yet decided but it is going to be significant," he told the BBC.
Bank of Cyprus chairman Andreas Artemis handed in his resignation but local reports suggested that the troubled bank's board had rejected his resignation.
Later, Mr Sarris told reporters: "The exit of Cyprus from the eurozone, which could mean the exit from the EU, would be disastrous, politically and economically. We do not even want to contemplate it."
In other Cyprus-related development

• The Department for Work and Pensions has said British pensions will not be paid into Cypriot bank accounts for the foreseeable future and has advised expats to open UK accounts
• Piraeus, Greece's third-biggest lender, said it has signed an agreement to acquire all of the deposits, loans and branches owned by the Greek subsidiaries of three Cypriot banks - Bank of Cyprus, Laiki, and the Hellenic Bank - for 524m euros (£445m)
• The head of the eurozone group of finance ministers, Jeroen Dijsselbloem, said there were no apparent signs of increased withdrawals of savings from peripheral to core countries in the region as a result of the Cyprus crisis.
• Chancellor George Osborne has said the Treasury is working on a "British solution" for the 13,000 UK customers of Cyprus Popular Bank, part of Laiki Bank, who could lose a proportion of their savings above the 100,000 euros (£85,000) cut-off limit.

Capital controls The final size of the loss faced by investors will depend on how the government decides to protect pensions, Mr Sarris said.
He confirmed that all Cypriot banks will remain closed until Thursday and that capital controls will be placed on the size and the amount of money people will be allowed to withdraw once the banks have reopened.
These restrictions would "probably be a bit stricter" on the country's two largest banks, Bank of Cyprus and Laiki, and would remain in place until the banking system "stabilises", he said.
The exact details of this "two-tier system" would be hammered out with the banks later on Tuesday, he said.
Mr Sarris is expecting "some bleeding, some outflow" of funds once the banks reopen, but believes that once EU bailout funds begin flowing "in a matter of weeks", confidence will return.
Although the economy would be badly hit by the economic crisis, Mr Sarris admitted, he maintained that it could benefit from "an energy boom", referring to the exploratory Aphrodite gas fields off the southern coast of the island.
"Yes, there will be a problem but we will overcome it in a relatively short period of time", he said. He also said his government had renegotiated more favourable loans terms with Russia.

It was conditional on Cyprus itself raising 5.8bn euros, most of which looks likely to come from depositors with more than 100,000 euros (£85,000) in Bank of Cyprus and Laiki or Popular Bank.

'Unique case' Members of the European Central Bank (ECB) have been emphasising their view that Cyprus is an isolated case within the eurozone, and that the proposed rescue plan would not be applicable to other eurozone countries.
Speaking to reporters at a conference in Prague, Ewald Nowotny, member of the ECB's governing council, said: "Cyprus is a special case. It is no model for other instances" - a view earlier expressed by Benoit Coeure, ECB executive board member.
On Monday, Jeroen Dijsselbloem, head of the eurozone's finance ministers, had spooked the markets when he suggested Cyprus's bailout could serve as template for crises elsewhere - comments he later retracted.
Many analysts had been concerned that the Cyprus crisis would spread to the wider eurozone had the country been forced to give up the single currency.
There were fears that the country's possible exit from the euro would trigger a loss of confidence across the single currency bloc, and prompt investors to withdraw from other troubled economies, such as Greece.

Do you have funds in Cyprus banks? How is the banks' closure affecting you? What is your reaction to the bailout? Send us your comments and experiences using the form below.

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