The EU and IMF heaped pressure on Greece on Thursday, warning of the perilous state of the country’s finances, days ahead of a controversial referendum that could determine its future in the eurozone.
As Greece’s leftist leaders staked their political lives on the outcome of tomorrow’s vote, the IMF warned the country’s growth prospects had deteriorated dramatically since the SYRIZA party came to power in January.
The Washington-based lender slashed its forecast for Greece’s growth this year to zero, from 2.5 percent, and warned it would need at least an additional 50 billion euros (US$55.5 billion) to stabilize its finances over the next three years.
The IMF — which along with the EU and ECB has lent Greece 240 billion euros since 2010 — also predicted any new bailout deal would rely more on Europe’s largesse, including 36 billion euros from Brussels.
The bleak picture came as Greek Minister of Finance Yanis Varoufakis warned the government “may very well” resign if Greeks spurn its call to vote “No,” although Greek Prime Minister Alexis Tsipras cast doubt on whether he would definitely go in a TV interview.
Exasperated leaders in Brussels warned the eurozone would be plunged into “unknown” territory if the Greek government got its way in the vote, which they said was effectively a referendum on the country’s place in the 19-country eurozone and even the EU.
European Parliament President Martin Schulz told German business daily Handelsblatt his confidence in Greece’s leaders had reached “rock bottom” and said a “Yes” vote tomorrow would likely trigger new elections.
Meanwhile, French President Francois Hollande warned a “No” could send the eurozone “into the unknown,” and Eurogroup President Jeroen Dijsselbloem said: “In case of a ‘No,’ Greece’s situation will become exceptionally difficult.”
The stakes are high for the country’s 11 million people, who saw banks close this week and businesses shutter in the latest economic blow after years of painful recession and austerity.
“Now it’s only the banks, but if there’s a run on supermarkets and fuel starts running out, it could lead to riots, to chaos, even to a coup by the sort of military junta, which seized the country in 1967,” Athens lawyer Georgiadis Aris said.
Some EU officials have warned the outcome could determine Greece’s future in the euro and even the EU, although Italian Prime Minister Matteo Renzi — also grappling with huge debt issues— on Thursday sought to play down the risks.
“As far as I’m concerned, Greece will not leave the euro. It will do all it can to reach an agreement” with its international creditors, Renzi said on Rai 1 TV.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure