IMF relaxes debt-cutting target for Greece

Updated 25 November 2012
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IMF relaxes debt-cutting target for Greece

ATHENS: The International Monetary Fund has relaxed its debt-cutting target for Greece and only a 10 billion-euro ($13-billion) gap remains to be filled for a vital aid installment to be paid, Greece's finance minister said Friday.
But other sources involved in talks between euro zone finance ministers and the IMF cautioned that the funding gap was far bigger than suggested by Greece, and the two sides were not on the verge of striking a deal to solve the euro zone's most intractable problem, they said.
Finance Minister Yannis Stournaras signaled a compromise was near by saying the IMF had agreed to declare Greece's debt viable if it is projected to fall to 124 percent of GDP in 2020, giving ground on its earlier target of 120 percent.
The Eurogroup of euro zone finance ministers has already agreed on measures to reduce Greek debt to 130 percent of GDP in 2020, Stournaras said. "That leaves a gap of 5-6 percentage points of GDP to be covered — about 10 billion euros," he told reporters in Brussels.
The EU and IMF are considering bringing the debt down through a combination of interest rate cuts and extension of maturities on the country's loans, plus a debt buyback and a plan under which the European Central Bank would forego profits on its Greek bond holdings, a Greek Finance Ministry official told Reuters.
Teetering on the verge of bankruptcy, Greece is increasingly frustrated that its lenders are still squabbling over a deal to unlock fresh aid even though the government has pushed through unpopular austerity cuts that brought thousands on to the streets.
Athens says time is running out and that it needs its next installments of almost 44 billion euros in aid to recapitalize banks and stabilize its economy. Its next big debt repayment falls due in mid-December.
It expects the aid to be paid out in one installment, the government spokesman told Greek radio, playing down recent speculation that it could dribble out in bits.
The euro hit a three-week high against the dollar on growing optimism that Greece's lenders were close to an agreement.
Euro zone finance ministers, the IMF and ECB failed earlier this week to agree how to get Greek debt down to an manageable level and will have a third go at resolving the issue on Monday.
"I am expecting a result," Finnish Finance Minister Jutta Urpilainen told reporters when asked if a deal would be struck at Monday's meeting. "There are different alternatives being discussed all the time. I do believe that next Monday we can reach a sustainable and credible result."

A senior source involved in the negotiations confirmed that the IMF would now accept 124 percent as a target but was dismissive of the gap amounting to only 10 billion euros.
"There are still things missing to an agreement," the source said. "The 10 billion is too optimistic."
A Greek Finance Ministry official said the ECB could relinquish 9 billion euros of profits on the Greek bonds it holds, as part of the measures to bring debt in 2020 down from a previous estimate of 144 percent of GDP.
Other options include saving 8 billion euros from cutting the interest rate, extending maturities on Greek debt and spending 10 billion euros to buy back around 30 billion euros in debt at a deep discount.
Greece has already begun preparations for the buyback, which could be completed by the end of the year if euro zone finance ministers approve the move, the official said.
According to current government projections, Greek debt is seen at 340.6 billion euros, or 175.6 percent of GDP at the end of 2012. It is expected to peak at 357.7 billion euros, almost 191 percent, in 2015.
According to a document circulated at the Eurogroup meeting, Greece's debt cannot be cut to 120 percent of GDP by 2020 unless euro zone member states write off a portion of their loans to Greece, which Germany has said would be illegal.
The document prepared for the meeting of euro zone finance ministers and seen by Reuters spelled out several options now cited by Greek officials - including using about 10 billion euros to buy back bonds at between 30 and 35 cents in the euro.
Many Greek retail bondholders are still angry about a debt restructuring earlier this year that imposed heavy losses on private holders of Greek debt.
About 40 retail bondholders pushed past security at the ruling conservative New Democracy party's offices in Athens yesterday, pelted a portrait of party founder Constantinos Karamanlis with eggs and scuffled with guards.


Taxi drivers, Uber square up on Istanbul’s roads

Updated 22 April 2018
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Taxi drivers, Uber square up on Istanbul’s roads

  • Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone
  • This has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey

ISTANBUL: Istanbul’s bright yellow taxis, ubiquitous and perennially honking for custom, appear ingrained in the daily life of the Turkish metropolis.
But could the fast-growing ride sharing app Uber make them a thing of the past?
Uber has enjoyed soaring popularity in Istanbul, where users appreciate the cashless payment system, security and convenience of hailing a cab by phone.
But, as in several other European cities, this has stoked antagonism with official taxi drivers, who have brought legal cases in Istanbul in a bid to have the app blocked in Turkey.
Tensions have also spilt over into violence, with Uber drivers complaining of being verbally harassed, beaten up or even shot at.
Kemal Kuru, an Uber driver since last year, said he was cornered and beaten by a group as he set off for a concert hall in the Sisli district last month on a job.
“I went to pick up a customer around midnight but someone blocked the road and harassed me verbally,” he told AFP.
“I got out of the car and all of a sudden 10 people attacked me... My teeth were broken and my lip was split.”
Kuru said the assailants could not be immediately identified as they fled into the darkness. But he pointed the finger at taxi drivers.
“I believe our income is getting on their nerves and they think we are stealing their customers.”
In March, shots were fired at an Uber vehicle in Istanbul’s Kucukcekmece district. The driver escaped unhurt.
Uber drivers say they are easily targeted as the vans they generally drive are unusual in the city.
But representatives of official taxi companies condemn such accusations — widely publicized in the Turkish media — as a stunt to discredit their business.
Eyup Aksu, head of the main taxi drivers’ association in Istanbul, accused Uber of launching a “publicity campaign” in an attempt to influence the pending legal cases.
“Taxi drivers have never resorted to violence against Uber. This is a smear campaign to blacken the reputation of taxis,” he told AFP in his Istanbul office.
There are almost 17,400 official yellow taxis in Istanbul, providing an essential and relatively affordable service in a gigantic city where public transport often falls short.
But as new competitors like Uber have emerged, the official taxis have often failed to keep pace with changing times and society.
They have been slow to implement systems to pay by card, install panic buttons that help female passengers in particular feel more secure and are only now considering lights to indicate if the cab is occupied or free.
In a bid to trump Uber, Istanbul taxis are themselves now becoming part of a digital network called iTaksi that allows passengers to order them from their phone.
Aksu admitted some deficiencies in the taxi sector but said taxis were transforming to catch up with Uber’s standards.
“We are shifting to luxurious taxi transport. We now have VIP transport in some touristic places and airports,” he said.
Meanwhile horror taxi stories abound in Istanbul — not just from incredulous tourists but also exasperated locals — about being over-charged, driven a circuitous route to ramp up the meter or being given fake change.
In a well publicized case, an Istanbul court this month handed a taxi driver a suspended jail term for having taken a Saudi passenger on an epic city tour rather than to the airport as requested.
But Istanbul taxi drivers insist they are working hard to make an honest living from a tough business where margins were already tight and now squeezed further by Uber’s presence.
Taxi drivers rent their car from the owner of the license, whose cost of 1.5 million lira (300,000 euros, $370,000) is well beyond most drivers.
The number of license plates available for taxis has stayed stable as the city’s population boomed, driving up their price.
Taxi driver Burhan Yuksek, looking for passengers in the busy waterside Eminonu district, said his business is suffering “hugely” because of Uber.
“I work by a hotel. We used to receive 40-50 calls daily from the hotel and currently it has dropped to 15-20,” he said. “They are pirates. They are stealing our labor and bread.”
Taxi drivers feel they have political backing, with President Recep Tayyip Erdogan regularly pictured drinking tea with the taxi community.
In the bigger of two legal actions brought by taxi drivers’ associations against Uber, an Istanbul court is due to resume hearing the case on June 4.
The tension in Turkey is one of a number of headaches for Uber and its new chief executive Dara Khosrowshahi, who took over last August after founder Travis Kalanick was ousted following a series of scandals.
In London where its drivers number around 40,000, Uber lost its license over its approach to reporting serious criminal offenses and its criminal record checks for drivers.
But it is allowed to operate in the British capital pending an appeal set for later this year.
Uber also put a temporary halt to its self-driving car program in the United States after an accident involving one of its cars near Phoenix killed a pedestrian.
In service for three years in Turkey, Uber has 5,000 vehicles and 8,000 drivers in Istanbul.
Vedat Kaya, of the Tourism and Development Platform, said Uber represented a “revolt against the taxi monopoly,” adding that some 4,500 taxi drivers had already switched to work with Uber.
Former taxi driver Yavuz Sarac, who joined Uber last summer, says he did it after realizing he would not own his own business “no matter if I work for 150 years.”
“Uber has presented new opportunities. I’ve owned my business,” he said, complaining that taxi drivers were exploited by the plate owners, while the Uber license was much less costly.
“I earn a living for my family. To me, it is a kind of escape from slavery to freedom.”