Cyprus Mail www.cyprus-mail.com
Friday, September 7, 2012
€1
CYPRUS
SPORT
FILM
Bank union rejects Popular’s
Federer and Roddick bow out of US Open back
Selena Gomez gets raunchy in new movie 13
voluntary scheme 2
ECB bid to beat eurozone crisis Analysts dub move ‘potential game changer’
T
HE EUROPEAN Central Bank yesterday unveiled its most ambitious plan yet to halt Europe’s financial crisis with a pledge to buy unlimited amounts of the government bonds of countries struggling to manage their debts. Large-scale purchases of short-term government bonds would drive up their price and push down their interest rate, or yield, making it less expensive for countries to borrow money. It represents the clearest sign yet that ECB president Mario Draghi is willing to live up to his pledge to do “whatever it takes” to save the single currency. “Under appropriate conditions, we will have a fully effective backstop to prevent potentially destructive scenarios,” Draghi told a news conference after the central bank’s monthly meeting. Draghi said the ECB would only help countries that signed up to and implemented strict policy conditions, with the eurozone’s rescue fund also buying their bonds, and preferably with the IMF involved in designing and monitoring the conditions. The new plan goes well beyond the ECB’s earlier, limited bond-purchase programme, which was not big enough to decisively lower borrowing costs. After the ECB plan dubbed Outright Monetary Transactions or OMT - was announced, the yields on government bonds across Europe fell and stock markets rallied. “This is a potential gamechanger,” says Jacob Kirkegaard, research fellow at
the Peterson Institute for International Economics. “This is the first time the ECB has committed its balance sheet in this way. And the way it is done is politically sustainable in Europe.” But the ECB’s pledge of support came with a caveat: countries that want the central bank to help with their debts must first seek emergency aid from the bailout funds managed by the 17 countries that use the euro and submit their economic policies to the scrutiny of the International Monetary Fund. That puts enormous pressure on heavily indebted countries such as Spain and Italy, which have been reluctant to seek help from their euro partners. Christine Lagarde, Managing Director of the IMF, welcomed the ECB plan and said the organisation stood “ready to co-operate”. Analysts warned that while the ECB plan would provide short-term relief to European countries and financial markets, it does not address underlying economic weakness across the region, which could persist for years. Still, investors cheered the move. Spain’s interest rate on three-year bond was down 0.17 percentage points to 3.73 % while its 10-year bond was down 0.3 percentage points on the day at 6.12%. Meanwhile Italy’s 10-year rate was down 0.1 percentage points at 5.33% and its rate for three-year bonds was down 0.06 percentage
TURN TO PAGE 11
Uniformed officers in the security forces stage a symbolic hanging during a rally before the Greek Parliament in central Athens yesterday, to protest cuts to security forces’ pay and benefits (EPA)
Plenty more fish in the sea after farm cages sabotaged IT WAS fisherman’s paradise yesterday in the Limassol area after thousands of sea bream were released from a nearby fish farm. The company which owns the farm, off Governor’s Beach, said the cages had been sabotaged, releasing some 70 tonnes of sea bream worth around €400,000. That did not matter much to dozens of fisherman who scr ambled to the Governor’s Beach area after hearing that thousands of fish were loose.
Television footage showed lines of fishermen knee-high in the water, filling bucket after bucket with sea bream. “They caught a lot, they filled dustbins,” one said. One man said he caught five kilos in two hours – a woman said she netted 25 fish. Nets, buckets, coolers, were all filled to the brim. For some people, it appeared that catching the fish took as long as changing the bait. “As long as they bite we will be
here,” said a man who had caught three kilos. Authorities said the company had reported to police that the release was an act of sabotage. The company said it must have taken place between 4pm on Tuesday and 6am Wednesday. They told police that the perpetrator or perpetrators had cut 56 ropes that supported the cages, thereby causing them to sink and setting the fish free.