Arrested for role in phone hacking, News Corp’s Neil Wallis was hired by Scotland Yard. Is he linked to the Climategate hoax?
July 22, 2011 No CommentNeil Wallis, the man behind the phone hacking for News Corp, was also hired by Scotland Yard to consult for them — right at the same time, coincidentally, that the Yard decided not to dig deeper into the phone hacking — which is unbelievable, when you wrap your head around it. Likewise, I’m sure you remember when climate-change deniers — especially those employed by Fox News — seized on some hacked emails and then had a field day. Keith Olbermann wonders if Wallis had a hand in the leaked emails and breaks it down. Ultimately, you have to wonder if the fake “ClimateGate scandal” was a product of hacking by News Corp as well. : The Murdoch Phone-Hacking Scandal may have just metastasized. The so-called “Climate-Gate” controversy — in which e-mails about global warming were stolen from researchers at Britain’s University of East Anglia in November, 2009 — now turns out to bear the stamp of Neil Wallis, one of the key figures in Murdoch’s hacking of the phones, voicemails, and other electronic communications of thousands of people. Wallis is unique in this scandal. He had been the Executive Editor of Murdoch’s News Of The World when hacking was at its peak. Yet in 2009 he wound up being hired by the police as a public relations consultant while the police investigated the hacking scandal. And he wound up spying for Murdoch’s people on what Scotland Yard was investigating. Wallis was, as the New York Times put it, “reporting back to News International while he was working for the police on the hacking case.” Moreover, while Wallis was keeping Murdoch’s organization apprised of what and whom the police were investigating, the police were trying to convince other news organizations not to cover the story — a suppression of evidence that benefited both the police and Rupert Murdoch. As the British newspaper The Guardian reported last Friday: “Scotland Yard’s most senior officers tried to convince the Guardian during two private meetings that its coverage of phone hacking was exaggerated and incorrect without revealing they had hired Neil Wallis…” It was neither exaggerated nor incorrect. Last Thursday, Neil Wallis was arrested. Last night, it was revealed that while acting as a double-agent for Scotland Yard and Murdoch, Wallis was also consulting Conservative Party Leader David Cameron during the 2010 election that saw Cameron rise to become the nation’s Prime Minister. Today, bobbing up to the surface through this vast ocean of ethical filth, comes Neil Wallis’s role… in “Climate-Gate.” On November 20th, 2009, somebody broke into a computer server at the Climatic Research Unit at the University of East Anglia, and stole thousands of emails and computer files. The documents were leaked to Climate Change Deniers, and although exhaustive analysis later proved that the emails merely revealed scientists’ anxiety that Climate Data and Research were being properly handled and studied, the Deniers have treated those emails as if they were a kind of Holy Grail of fraud. They claim the emails not only disproved all of climate change, but also that they proved that scientists had doctored data in order to exaggerate the urgency of an international conference on climate change coming up the next month in Copenhagen in Denmark. As the corporations and lobbyists who sought to feed the myth that there is no man-made climate change disseminated, exploited and deliberately misinterpreted the stolen e-mails — and used Fox News and other Murdoch enterprises as their principle venues — the victims, the Climatic Research Unit at the University of East Anglia, decided they’d better hire a public relations pro to help them fight back. They hired… Neil Wallis… read on More and more information is coming out in the very real Rupertgate scandal, and Wallis is in the middle of it all. UPDATE: James Murdoch has now had his testimony questioned by former NOTW executives: Evidence on phone hacking given to MPs by News International chairman James Murdoch has been called into question by two former executives at the firm. He told the media committee on Tuesday he had not been “aware” of an email suggesting the practice went wider than a “rogue” News of the World reporter. But ex-NoW editor Colin Myler and ex-NI legal manager Tom Crone have now said they “did inform” him of the email. Mr Murdoch later said he “stands by his testimony”. Meanwhile, the BBC has learned the FBI plans to contact actor Jude Law following claims his mobile phone was hacked during a visit to the US. It is alleged a story published by the NoW in 2003 was based on information obtained from his voicemail which, if proved, could lead to charges in the US because his phone would have been operating on a US network. News International denies the claims.
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Click here to view this media A group of “gay barbarians” danced and threw glitter in the lobby of a Christian clinic owned by Republican presidential candidate Michele Bachmann after staff said that her husband Marcus would not be coming out to “discipline” them. ColumbusGoHome.com issued this statement: Today a horde of gay barbarians descended upon Michele and Marcus Bachmann’s “pray away the gay” clinic and demanded that Marcus come out and discipline them for their “deviant” behavior. Marcus Bachmann, who conducts “reparative therapy” at the clinic intended to convert homosexuals, has said that gays are “barbarians who need to be disciplined.” The horde requested to speak directly with Bachmann and experience some “discipline” for themselves. When Marcus was no where to be found, the barbarians glittered the empty waiting room and reception area while chanting, “You can’t pray away the gay — baby, I was born this way!”
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Council committee votes in favour of turning St Piran’s Day into extra holiday in Cornwall Many Cornish people believe the far south-west of England is a nation apart from the rest of Britain. Now councillors have voted in favour of turning its “national” saint day into a bank holiday just for Cornwall. Members of Cornwall council’s corporate resources overview and scrutiny committee have approved the idea of making St Piran’s Day – 5 March – into a bank holiday. Supporters of the idea argue that many Cornish people already treat St Piran’s Day as an extra holiday and claim it may attract more tourists to the lively celebrations. Others worry that business will be harmed if Cornwall has a day off when the rest of the UK is hard at work and will confuse visitors. Doris Ansari, one of the longest serving councillors, said she was in favour of a St Piran’s bank holiday. “A lot of people take St Piran’s Day off anyway,” she said. Councillor Steve Double, said: “I am proud to be Cornish but I struggle to see how it will actually work if we have a different bank holiday to the rest of the country.” Double, who used to work in a bank, said he could foresee difficulties if banks were closed on 5 March in Cornwall but not across the rest of the country. Councillor Steve Eva, said: “I can’t support this. We should have the same bank holidays as the rest of the country.” St Piran is the patron saint of tin miners. He is accepted by many as Cornwall’s national saint and his flag – a white cross on a black background – will be familiar to many holidaymakers. According to the St Piran Trust , he was probably born in Ireland in the 6th century. One legend has him being tied to a millstone in Ireland and rolled off a cliff into a storm-whipped sea. The sea immediately became calm and he floated safely to Cornwall. In recent years there have been moves, some supported by the council and lovers of Cornwall’s heritage, to boost St Piran’s Day and make it more akin to St Patrick’s Day, which is celebrated joyously not only in Ireland but across the globe. Many pub landlords have seen the commercial benefits of hearty St Piran’s Day celebrations and put on themed events. The corporate resources overview and scrutiny committee was split 50-50 over the idea of a separate bank holiday and it took the casting vote of the chairman to push it through. The idea will now be debated by the full council. The department for culture, media and sport is consulting about moving the May Day bank holiday to a different date. A decision is expected early in 2012. Cornwall council attracted headlines, and some criticism, earlier this summer when it emerged it was mooting a £1-a-night tax on visitors. Cornwall Steven Morris guardian.co.uk
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Temperatures nearing 40C and high humidity leave 22 dead, fill hospital emergency rooms and exacerbate midwest drought A stifling US heatwave which has left at least 22 people dead and set dozens of all-time local temperature records is moving east across the country, bringing temperatures approaching 40C along with high humidity. The US National Weather Service had hot weather warnings in place for large sections of the country’s centre and east. The so-called heat index, a calculation of how warm it feels through the combination of temperature and humidity, exceeded 120F (49C) in parts of the midwest over recent days, with similar conditions expected into the weekend. “The combination of prolonged high levels of temperature and humidity will cause a potentially dangerous public health situation through Saturday,” the service warned on its website . On Wednesday, 55 different places saw record high temperatures, with another 60 all-time highs matched, the service said. It has blamed at least 22 deaths on the heatwave, many of them of older people. Ohio’s health department said hospital emergency rooms had been three to four times busier than normal due to cases of heatstroke and heat exhaustion. The heatwave has also reached the big cities of the east coast, with both New York and Washington DC expected to experience temperatures of around 38C or 39C over the next couple of days – bringing thousands flocking to swimming pools or coastal areas – before the mercury dips to a relatively tepid 30C. “Do not take this threat lightly,” the National Weather Service warned. “The length of this heatwave will pose a very real and dangerous health risk to at-risk groups and those that do not have access to air conditioning.” During the weekend the heatwave is expected to cover half the US. Many in the midwest have flocked to air-conditioned shopping malls or cinemas. Massive air conditioner use in southern Michigan on Thursday saw thousands of homes lose power, forcing officials to move older people without electricity to cooled communal buildings. The heat has exacerbated an existing drought in the midwest crop belt, affecting areas in Iowa, Illinois, Wisconsin, Indiana, Ohio and Michigan, the US Drought Monitor said. Texas remains gripped by a particularly severe drought, with 75% of the state affected. United States Natural disasters and extreme weather Peter Walker guardian.co.uk
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US defence secretary to certify that repealing prohibition will not hurt military’s ability to fight The US defence secretary, Leon Panetta, is set to end the ban on gay people serving openly in the armed forces, certifying that repealing the 17-year-old prohibition would not hurt the US military’s ability to fight. His decision comes two weeks after US military chiefs told Panetta that ending the ban would not affect military readiness. Dismantling the ban fulfils a 2008 campaign promise by Barack Obama, who helped usher the repeal through Congress and signed it into law late last December. The move triggered vehement opposition from some in Congress and initial reluctance from military leaders, who worried that it could trigger a backlash and erode troop cohesion on the battlefield. Defence officials said the announcement would be made later on Friday. Obama is also expected to certify the change. Repeal of the ban would become effective 60 days after certification, which could open the military to gay servicemen and women by the end of September. The “don’t ask, don’t tell” policy, adopted under Bill Clinton, has come under an onslaught of legal challenges, including a federal court ruling early in July that ordered the US government to immediately stop enforcing the gay ban. Days later, however, the Obama administration appealed the ruling, saying that abruptly ending the ban would complicate the orderly process for repeal that had already been set in motion. A San Francisco appeals court agreed, but added a caveat: the government could not investigate, penalise or discharge anyone for being openly gay. The military services have conducted extensive internal studies and about five months of training to gauge how troops would react to the change. A survey last year found that some two-thirds would not care if the ban was lifted. Opposition to the repeal was strongest among combat troops, particularly marines. The bulk of the military has been trained on the new law, including a complex swath of details about how the change will or will not affect housing, transfers or other health and social benefits. In most cases, the guidelines demand that gay men and lesbians are treated just as any other soldier, sailor, air crew or marine is treated. As training went on this year, senior military leaders said they had seen no real problems. Panetta’s predecessor as US defence secretary, Robert Gates, told the Associated Press that people had been “mildly and pleasantly surprised at the lack of pushback in the training”. There will still be differences, however, since same sex partners will not be given the same housing and other benefits as married couples. Instead, they will be treated like unmarried couples. Aubrey Sarvis, executive director of the Servicemembers Legal Defence Network, a national organisation representing gay troops, said Panetta’s action was welcomed by gay and lesbian troops “who have had to serve their country in silence for far too long”. US military Gay rights United States guardian.co.uk
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US defence secretary to certify that repealing prohibition will not hurt military’s ability to fight The US defence secretary, Leon Panetta, is set to end the ban on gay people serving openly in the armed forces, certifying that repealing the 17-year-old prohibition would not hurt the US military’s ability to fight. His decision comes two weeks after US military chiefs told Panetta that ending the ban would not affect military readiness. Dismantling the ban fulfils a 2008 campaign promise by Barack Obama, who helped usher the repeal through Congress and signed it into law late last December. The move triggered vehement opposition from some in Congress and initial reluctance from military leaders, who worried that it could trigger a backlash and erode troop cohesion on the battlefield. Defence officials said the announcement would be made later on Friday. Obama is also expected to certify the change. Repeal of the ban would become effective 60 days after certification, which could open the military to gay servicemen and women by the end of September. The “don’t ask, don’t tell” policy, adopted under Bill Clinton, has come under an onslaught of legal challenges, including a federal court ruling early in July that ordered the US government to immediately stop enforcing the gay ban. Days later, however, the Obama administration appealed the ruling, saying that abruptly ending the ban would complicate the orderly process for repeal that had already been set in motion. A San Francisco appeals court agreed, but added a caveat: the government could not investigate, penalise or discharge anyone for being openly gay. The military services have conducted extensive internal studies and about five months of training to gauge how troops would react to the change. A survey last year found that some two-thirds would not care if the ban was lifted. Opposition to the repeal was strongest among combat troops, particularly marines. The bulk of the military has been trained on the new law, including a complex swath of details about how the change will or will not affect housing, transfers or other health and social benefits. In most cases, the guidelines demand that gay men and lesbians are treated just as any other soldier, sailor, air crew or marine is treated. As training went on this year, senior military leaders said they had seen no real problems. Panetta’s predecessor as US defence secretary, Robert Gates, told the Associated Press that people had been “mildly and pleasantly surprised at the lack of pushback in the training”. There will still be differences, however, since same sex partners will not be given the same housing and other benefits as married couples. Instead, they will be treated like unmarried couples. Aubrey Sarvis, executive director of the Servicemembers Legal Defence Network, a national organisation representing gay troops, said Panetta’s action was welcomed by gay and lesbian troops “who have had to serve their country in silence for far too long”. US military Gay rights United States guardian.co.uk
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Eurozone debt crisis takes a positive turn with bailout deal for Greece, hammered out at an emergency summit in Brussels on Thursday night Financial markets have welcomed the long-awaited rescue package for Greece and the strengthening of the eurozone’s bailout fund. The €109bn (£95bn) bailout deal for Greece, which was hammered out at an emergency summit of eurozone leaders in Brussels on Thursday night, sent the euro and shares rallying across Europe on Friday morning. The value of government debt in crisis-hit Greece, Spain and Italy rose for a second day. Banking stocks, which have recently been battered by the eurozone debt crisis, were among the top risers, amid relief that a bank levy was off the table, at least for now. “It is encouraging they have come up with something and dealt with some of the restructuring,” said Louise Cooper, markets analyst at BGC Partners. “The markets have got excited about it. But the cuts to Greek debt do not put the country on a sustainable footing for growth and do not take us where we want to be.” As part of the deal, the eurozone’s €440bn rescue fund established in May last year, known as European Financial Stability Facility (EFSF), will be given broader powers to help prevent the debt crisis spreading to Italy and Spain. The package agreed after weeks of bad-tempered, intense haggling, was the most radical action from the eurozone since it created the bailout fund. Currently the fund can only be used as a “last resort” to rescue a eurozone country whose plight jeopardises the stability of the euro as a whole. Under the 16-point blueprint agreed on Thursday night , the fund will be able to intervene on the secondary markets to buy up the bonds of struggling debtor countries from private investors. It can also take preemptive or “precautionary” action to nip a debt crisis in the bud by, for example, agreeing lines of credit, and supply loans to struggling eurozone countries who would use the money to shore up and recapitalise their banks. Such aid would apply, unlike at present, to countries not already in bailout programmes. The package will also allow Greece to roll over maturing debt and pay a lower interest rate on its bailout loans. The banking sector will exchange and roll over €54bn of Greek debt, with private investors taking a haircut worth 21% of the market value of their debts. Lacking detail Economists at Barclays Capital said the summit results were “more than expected but not enough to make us sleep comfortably”. “The official statement lacks detail in key areas such as private sector involvement for Greece and collateral requirements. Also, the envisaged reforms of the EFSF lack detail and we are struck that, given the additional tasks envisaged for the EFSF, the size of the EFSF is not even discussed in the document.” The euro rallied to a two-week high against the dollar, hitting $1.4440 before steadying around $1.4409. The FTSE 100 index in London climbed nearly 40 points to 5938, a gain of 0.65%, with insurers Aviva and Legal & General and banks Barclays and Royal Bank of Scotland leading the gains. Spain’s Ibex and Italy’s FTSE MIB index gained nearly 1%. The yield, or interest rate, on government bonds fell in Greece, Spain, Italy and Portugal. Gary Jenkins, head of fixed income research at Evolution Securities, said: “We questioned whether the proposals agreed in the euro area leaders’ summit would go down as the day they saved the eurozone and took the first steps towards a fiscal union or whether it would be the traditional short-term sugar rush proposal which does not stand up to scrutiny or the test of time … It might actually be somewhere in between.” “The proposals were slightly better than expected but maybe not good enough to take away the possibility of further contagion if the economic situation deteriorates. They did take Greece off the naughty step, put their arms around them and basically said ‘take your time, pay us back whenever you can’. By extending maturities and reducing interest rates they have certainly given more support to Greece, Ireland and Portugal.” European debt crisis European banks Europe Greece Euro Euro Julia Kollewe Ian Traynor guardian.co.uk
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Eurozone debt crisis takes a positive turn with bailout deal for Greece, hammered out at an emergency summit in Brussels on Thursday night Financial markets have welcomed the long-awaited rescue package for Greece and the strengthening of the eurozone’s bailout fund. The €109bn (£95bn) bailout deal for Greece, which was hammered out at an emergency summit of eurozone leaders in Brussels on Thursday night, sent the euro and shares rallying across Europe on Friday morning. The value of government debt in crisis-hit Greece, Spain and Italy rose for a second day. Banking stocks, which have recently been battered by the eurozone debt crisis, were among the top risers, amid relief that a bank levy was off the table, at least for now. “It is encouraging they have come up with something and dealt with some of the restructuring,” said Louise Cooper, markets analyst at BGC Partners. “The markets have got excited about it. But the cuts to Greek debt do not put the country on a sustainable footing for growth and do not take us where we want to be.” As part of the deal, the eurozone’s €440bn rescue fund established in May last year, known as European Financial Stability Facility (EFSF), will be given broader powers to help prevent the debt crisis spreading to Italy and Spain. The package agreed after weeks of bad-tempered, intense haggling, was the most radical action from the eurozone since it created the bailout fund. Currently the fund can only be used as a “last resort” to rescue a eurozone country whose plight jeopardises the stability of the euro as a whole. Under the 16-point blueprint agreed on Thursday night , the fund will be able to intervene on the secondary markets to buy up the bonds of struggling debtor countries from private investors. It can also take preemptive or “precautionary” action to nip a debt crisis in the bud by, for example, agreeing lines of credit, and supply loans to struggling eurozone countries who would use the money to shore up and recapitalise their banks. Such aid would apply, unlike at present, to countries not already in bailout programmes. The package will also allow Greece to roll over maturing debt and pay a lower interest rate on its bailout loans. The banking sector will exchange and roll over €54bn of Greek debt, with private investors taking a haircut worth 21% of the market value of their debts. Lacking detail Economists at Barclays Capital said the summit results were “more than expected but not enough to make us sleep comfortably”. “The official statement lacks detail in key areas such as private sector involvement for Greece and collateral requirements. Also, the envisaged reforms of the EFSF lack detail and we are struck that, given the additional tasks envisaged for the EFSF, the size of the EFSF is not even discussed in the document.” The euro rallied to a two-week high against the dollar, hitting $1.4440 before steadying around $1.4409. The FTSE 100 index in London climbed nearly 40 points to 5938, a gain of 0.65%, with insurers Aviva and Legal & General and banks Barclays and Royal Bank of Scotland leading the gains. Spain’s Ibex and Italy’s FTSE MIB index gained nearly 1%. The yield, or interest rate, on government bonds fell in Greece, Spain, Italy and Portugal. Gary Jenkins, head of fixed income research at Evolution Securities, said: “We questioned whether the proposals agreed in the euro area leaders’ summit would go down as the day they saved the eurozone and took the first steps towards a fiscal union or whether it would be the traditional short-term sugar rush proposal which does not stand up to scrutiny or the test of time … It might actually be somewhere in between.” “The proposals were slightly better than expected but maybe not good enough to take away the possibility of further contagion if the economic situation deteriorates. They did take Greece off the naughty step, put their arms around them and basically said ‘take your time, pay us back whenever you can’. By extending maturities and reducing interest rates they have certainly given more support to Greece, Ireland and Portugal.” European debt crisis European banks Europe Greece Euro Euro Julia Kollewe Ian Traynor guardian.co.uk
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China accuses Lai Changxing of running huge smuggling operation but rights activists say he will not receive fair trial China has welcomed a Canadian court’s decision to extradite Lai Changxing – its most-wanted fugitive, but lawyers and rights activists have expressed doubt that he would have access to a fair trial back home. The federal court cleared the way on Thursday for the extradition of Lai and he could be sent home as early as Saturday, dismissing concerns that he could be tortured or executed once he arrives back in China. Beijing has sought the deportation of Lai, accusing him of running a multibillion-dollar smuggling operation in the southeastern city of Xiamen in the 1990s. Lai fled to Canada with his family in 1999 and claimed refugee status, saying the allegations against him were politically motivated. “The Chinese government’s stance on Lai Changxing returning to China to stand trial is clear. We welcome the Canadian court’s decision,” the foreign ministry said in a statement. The verdict was issued just after the visit of Canada’s foreign minister, John Baird, to China, where he said “both the Canadian people and the Chinese people don’t have a lot of time for white-collar fraudsters”. China promised Canada in a diplomatic note that Lai would not be tortured or executed and that Canadian officials would have access to him. “The fact that Canadian government officials appear willing to accept on face value the Chinese government’s assurances that it will respect due legal process suggests a near-willful ignorance of the sharp deterioration in China’s human rights environment since mid-February 2011,” said Phelim Kine, a researcher for Human Rights Watch , in an email. “[The] Canadian government’s confidence in the Chinese legal system is curious given that since mid-February 2011, rule of law has been under intensified attack and the Chinese government has been routinely deploying thuggish, unlawful tactics to harass, silence and intimidate lawyers, artists and civil society activists.” The case exploded in the special economic zone of Xiamen in southeastern Fujian province in the mid-1990s when Jia Qinglin, now China’s fourth-ranked official, was head of the province. Beijing has accused Lai’s business empire, the Yuanhua Group, of bribing officials to allow a massive smuggling ring in a scandal that implicated more than 200 senior figures, including Jia’s wife at the time, Lin Youfang. China put more than 300 suspects on trial and sentenced 14 to death, including provincial officials and a former vice-minister of public security, in a case Beijing has used for a propaganda campaign against corruption. Lai admitted in a 2009 interview with Toronto’s Globe and Mail newspaper that he had avoided taxes by exploiting loopholes in the law, but he denies bribery charges. He said that had he not been in Canada he would have been executed. Canada has no death penalty and will not usually extradite anyone to a state where capital punishment is practised without assurances the suspect will not be executed. Many Chinese legal experts and human rights activists said it was unlikely Lai could receive a fair trial in China. “Unless the investigators, prosecutors and judges he will confront dramatically alter their customary practices, Lai will not receive a fair trial by international human rights standards or Canadian criminal justice standards,” Jerome Cohen, an expert in Chinese law at New York University, said. Cohen was called by the Canadian government as an expert witness at Lai’s refugee hearing several years ago. “The real question is what detailed provisions has the PRC promised to make to assure Canada that there will be little risk of torture before Lai is convicted and during the undoubtedly long period of his prison sentence.” Reflecting the intensity of China’s official position, state media in 2001 cited then-premier Zhu Rongji as saying Lai “should die three times, and even so that wouldn’t be enough”. John Kamm, executive director of the Dui Hua Foundation, a US-based group that promotes prisoners’ rights in China, said: “Without a presumption of innocence – indeed with the presumption of guilt – how does one get a ‘fair trial?’” But he said Chinese assurances and the offer to allow Canadian diplomats access to Lai should offer some protection. “If he were tortured or executed, the damage to Sino-Canadian relations would be massive, and would no doubt deter other countries from extraditing suspects who allegedly committed capital crimes back to China,” he said. Canada China Human rights guardian.co.uk
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Bailout fund turned into much more ambitious instrument in deal hatched following months of dithering European leaders have sealed a new €109bn bailout for Greece and erected defences against the debt crisis spreading to Italy and Spain by turning the eurozone’s 15-month-old bailout fund into a much more ambitious instrument resembling an infant European monetary fund. The deal, hatched at an emergency summit in Brussels of eurozone leaders, following months of dithering and division, also entailed large losses for Athens’ private creditors, making it almost certain that Greece would become the first eurozone country to be deemed to be in some form of default on its sovereign debt. A 16-point blueprint provided for a vast expansion in the role and powers of the €440bn bailout fund established in May last year. The package agreed after weeks of bad-tempered, intense haggling and only resolved at the last minute, was the biggest response from the eurozone since it created the bailout fund. Currently the fund can only be used as a “last resort” to rescue a eurozone country whose plight jeopardises the stability of the euro as a whole. Under the radical action, the fund will be able to intervene on the secondary markets to buy up the bonds of struggling debtor countries, to take preemptive or “precautionary” action to nip a debt crisis in the bud by, for example, agreeing lines of credit, and to supply loans to struggling eurozone countries who would use the money to shore up and recapitalise their banks. Such aid would apply, unlike at present, to countries not already in bailout programmes. “By the end of the summer, Angela Merkel and I will be making joint proposals on economic government in the eurozone. Our ambition is to seize the Greek crisis to make a quantum leap in eurozone government,” pledged French president Nicolas Sarkozy. “The very words were once taboo. We will give a clearer vision of the way we see the eurozone evolving. We have done something historic. There is no European Monetary Fund yet – but nearly.” While Sarkozy talked up the new powers for the bailout fund, Merkel emphasised that the key aims were to provide relief for Greece’s crippling debt burden and to ensure that private lenders to Greece took losses on their investments to that end. “I am satisfied with the result. We showed we’re up to the challenge,” she said. Greece’s private creditors will take losses of around 20% by agreeing to take part in buybacks of Greek bonds, rolling over Greek debt, or swapping maturing bonds. “We agree to support a new programme for Greece and to fully cover the financing gap,” the eurozone leaders said. “The total official financing will amount to an estimated €109bn.” In addition to that total, the private sector would contribute €37bn, it appeared, although there was some confusion over the precise makeup. The deal, a trade-off between Germany, which insisted on investor losses, and France, which relishes the greater powers of intervention for the bailout fund, left Jean-Claude Trichet, the head of the European Central Bank, the main loser. He had vehemently opposed Merkel. The transformation of the bailout fund was directed not so much at Greece as at containing the threat of contagion to other vulnerable eurozone countries, an attempt to curb market uncertainty over the fate of the euro. The terms of the new bailout, following last year’s failed €110bn rescue package, mean that EU leaders are resigned to living with a form of default, however temporarily and however “selectively”. Trichet said that the expected “selective default” would not trigger a credit event, meaning that the debt insurance markets would not face big claims for payouts. Trichet also stressed that the leaders had offered pledges that Greece was a one-off and that investors would not face losses anywhere else in the eurozone as part of bailout packages. “As far as private sector involvement in the euro area is concerned, we would like to make clear that Greece requires an exceptional and unique solution,” the leaders declared. Senior German and French bankers briefed the leaders yesterday on various models for private sector involvement. German government sources indicated creditors were writing off 20% of their investments. Senior eurozone sources said the expected default would last no longer than two months. The Dutch government said that objections to accepting selective default, mainly from the ECB, had been overcome. Trichet had warned that the bank will no longer keep Greek banks afloat by supplying liquidity for defaulted bond collateral. That role would probably shift, at least temporarily, to the eurozone bailout fund. “We will provide adequate resources to recapitalise Greek banks if needed,” the summit announced. German government sources said they had received assurances from the international ratings agencies that they would not rush to judgment in declaring a Greek default but would take their time in studying the deal. The eurozone loans would be provided at interest rates of 3.5%, two points lower than currently, while the maturity of loans to Greece would be more than doubled to at least 15 years and possibly to 30. There was also good news for Ireland and Portugal, whose borrowing costs for their eurozone bailouts would also fall to 3.5%. European debt crisis Greece Euro European banks Europe Currencies Euro European Union Economics European monetary union Europe Ian Traynor guardian.co.uk
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