Investor confidence in Greek debt sunk again today as two large uncertainties remain with the proposed EU-IMF bailout. One being that the sever austerity measures that will be required of Greece well into the future might prove unacceptable to the general populace. Given Greeks penchant for large-scale demonstrations in the past, this is no passing worry. Many view the current troubles as the sole responsibility of the previous government, and balk at the penalties being placed on them. A second worry is the German government. Chancellor Angela Merkel has publicly stated that she will back the aid package if Greece accepts the stringent multi-year austerity measures. Rumors persist however that she is attempting to delay the vote in the German Parliament until after May 9, when domestic elections take place. Seeing as Greece needs the funding pronto, this delay would throw a wrench in the deal. German lawmakers have announced that they will quickly vote on the proposed deal as soon as the IMF completes talks on the terms of the deal. Many German lawmakers, while they are certainly aware of how unpopular this deal is domestically, view the issue less as bailing out Greece and more a direct challenge to the Euro.
A frequent complaint of the World Bank is the limited role played by many developing nations. After a shift in voting power today, that is still largely the case, with emerging and developing countries having less than a 50% stake in proceedings. China, however, appears to be the big winner after the shift. Commensurate with its growing economic clout, China now sits behind only the US and Japan in terms of voting power. This session also saw member countries offering to contribute a further 3.5 bn to offset losses suffered in the recent global financial hiccup.
Congressional reports show that over the past five years 41 foreign companies have helped develop Iran’s energy sector. The size of some of these companies investments is worth mentioning: the China National Petroleum Company has investments of around $2 bn and the Daewoo Corporation of South Korea has contracts for shipping tankers of $384 million. This would seem to be non-compliance under the Iran Sanctions Act, which opens up companies with investments of over $20 million to sanctions. However, this provision of the act has never been used. This report seems to be part of the Obama administration’s effort to directly pressure American and foreign companies to disclose and end their ties to Iran.