1 Greece and Eurozone creditors gear up for clash
over bailout (San Francisco Chronicle) Greece's new radical left government has
shot the first salvo in what is expected to be a tough clash with fellow
eurozone countries over budget cuts that Athens says are choking the life out
of its economy.
The government of Prime Minister Alexis Tsipras said
it would ignore key budget commitments, privatizations and reforms previous
administrations had promised in exchange for rescue loans from fellow eurozone
countries. The hard line prompted a quick warning from the European Union and
sent local investors into a panic on the prospect that the country might get
cut off from its financial lifeline.
Tsipras' radical Syriza party won general elections
over the weekend on a pledge to scrap the some austerity budget cuts, tax hikes
and reforms that had been promised. The measures were meant to reduce debt, but
had devastating side-effects for the economy, causing a years-long economic
depression and spike in unemployment to over 25 percent.
The party also wants to cancel billions of euros
(dollars) in repayments, something eurozone creditor nations have ruled out. As
Tsipras' ministers took up their positions, they announced they were abandoning
several commitments: the privatization of Greece's power utility, a refinery,
the country's two biggest ports and several airports would be scrapped, and the
minimum wage would be restored to pre-crisis levels.
Among the most contentious issues will be Syriza's
promise to Greeks to seek forgiveness of more than half of Greece's 240 billion
euros ($272 billion) in rescue loans. The Greek government has debt repayments
coming in March so it needs to reach a deal with eurozone countries relatively
quickly.
2 US jobless claims at 15-year low (Khaleej Times) The
number of Americans filing new claims for unemployment benefits tumbled last
week to its lowest level in nearly 15 years, adding to bullish signals on the
labour market.
Initial claims for state unemployment benefits
dropped 43,000 to a seasonally adjusted 265,000 for the week ended on January
24, the lowest since April 2000, the Labour Department said. It was the biggest
weekly decline since November 2012.
The drop, which far exceeded economists’
expectations for a fall to only 300,000, probably exaggerates the strength of
the jobs market as the data included the Martin Luther King holiday, which
means fewer claims were likely processed.
Non-farm payrolls likely increased 230,000 after
rising 252,000 in December, according to a survey of economists. That would
mark the 12th consecutive month of jobs gains above 200,000, the longest
stretch since 1994.
3 UK young hit by wage slump (Heather Stewart in The
Guardian) British workers are taking home less in real terms than when Tony
Blair won his second general election victory in 2001, with men and young
people hit hardest by the wage squeeze that followed the financial crisis,
according to new research.
The Institute for Fiscal Studies thinktank said
wages were 1% lower in the third quarter of 2014 than in the same period 13
years earlier after taking inflation into account. Jonathan Cribb, an author of
the report, said: “Almost all groups have seen real wages fall since the
recession.”
However, the study finds that women have been
relatively cushioned from the worst of the wage cuts because they are more
likely to be in public sector jobs, where wages fell less rapidly during the
early years of the downturn. Aided at the start of the crisis by the relative
stability of public sector wages, women’s average hourly pay fell by 2.5% in
real terms between 2008 and 2014, the IFS found, while men’s pay fell by 7.3%.
The IFS also singled out younger workers as among
the biggest victims of the falling living standards that have become widespread
in post-crash Britain. “Between 2008 and 2014, there is a clear pattern across
the age spectrum, with larger falls in earnings at younger ages,” the thinktank
found in a detailed study of the state of the labour market.
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