Merkel Changes Stance on Aid to Greece

  After talks with Nicolas Sarkozy, Chancellor Angela Merkel said banks could not be forced to participate in the bailout.

BERLIN — Chancellor Angela Merkel of Germany retreated Friday from demands that private financial institutions be pressured to participate in efforts to rescue the Greek economy, a compromise that seemed to offer some breathing space in Europe’s efforts to confront its potentially ruinous debt crisis.

TimesCast | The Greek Financial Crisis Evangelos Venizelos in Athens on Friday after being sworn in as the new Greek finance minister, part of a shakeup of the government as protests spread over the country's austerity measures.

Her critics in the European Central Bank and in many European capitals had argued that any requirement that private investors absorb some losses risked plunging Greece into a disorderly default on its enormous debt.

But after a two-hour meeting with President Nicolas Sarkozy of France, whose banks are among the most heavily exposed in the Greek debt crisis, Mrs. Merkel relented, saying, “We would like to have a participation of private creditors on a voluntary basis.” She acknowledged, too, that there was no legal way of forcing banks to participate.

“This should be worked out jointly with the E.C.B,” she added, referring to the European Central Bank. “There shouldn’t be any dispute with the E.C.B. on this.” It was her second major political reversal in a month and could compound her political woes at home.

Mrs. Merkel spoke shortly after the embattled Greek prime minister, George Papandreou, reshuffled his cabinet after days of turbulence on the streets of Athens and within the political elite. In the most prominent change, he named Evangelos Venizelos, the former defense minister, as finance minister in place of George Papaconstantinou, who has been the highly visible face of the austerity drive.

Critics dismissed the change as cosmetic. Yanis Varoufakis, a political economist at the University of Athens, told Skai television that “not even God almighty” as finance minister could redeem the situation. Nevertheless, the combination of the cabinet changes and the agreement between France and Germany on Friday calmed jittery markets.

Behind most calculations about the Greek crisis lies the much broader worry about whether financial woes in Athens will lead to a domino collapse of other weak euro zone economies, such as those of Portugal and Ireland, and create a “credit event” similar to the one that froze global markets after the Lehman Brothers bankruptcy. To stave off an imminent default, Greece needs the next $16.8 billion installment of a $155 billion loan package it received a year ago. But Greece is also likely to need another longer-term bailout — estimated at up to $84 billion — before it can get its budget deficit, currently at 7.5 percent of gross domestic product, into a surplus.

The potential for European chaos is immense. The European Central Bank itself holds billions of euros in shaky Greek debt and has firmly opposed anything that could set off what rating agencies call a “credit event,” or default.

Officials with the European Union and the International Monetary Fund have expressed confidence that an agreement to release the next loan installment could emerge from a meeting of euro zone finance ministers on Sunday in Luxembourg, while the question of the proposed second rescue package could be put off until July. Mrs. Merkel’s retreat was all the more significant because German voters have registered loud concerns that their tax money, levied on a country known for prudence and restraint, is being used to spare Greece from the results of its own mismanagement and profligacy. With the demand for private lenders to be brought into the rescue, Mrs. Merkel had hoped to show German voters that the banks would share their pain.

The German leader also reversed her energy policies this month, moving up the deadline for Germany to close down most of its nuclear power stations to 2022. While she said publicly that her change of mind was a result of the nuclear disaster in Japan, many analysts saw it as a desperate attempt to recover political ground after a series of defeats in local elections.

Mrs. Merkel’s junior coalition partners, the Free Democrats, are also weak, leaving her bereft of powerful allies. “This coalition, as everyone knows, is an alliance for ill, not good,” The Süddeutsche Zeitung of Munich said in an editorial on Friday.

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Climate Changes Hinder Crop Yields, Study Finds

Wheat yields in recent years were down by more than 10 percent in Russia and by a few percentage points each in India, France and China compared with what they probably would have been without rising temperatures, according to the study.

Corn yields were off a few percentage points in China, Brazil and France from what would have been expected, said the researchers, whose findings were published in Friday’s issue of the journal Science.

Some countries saw small gains from the temperature increases, however. And in all countries, the extra carbon dioxide that humans are pumping into the air acted as a fertilizer that encouraged plant growth, offsetting some of the losses from rising temperatures caused by that same greenhouse gas.

Consequently, the study’s authors found that when the gains in some countries were weighed against the losses in others, the overall global effect of climate change has been small so far: losses of a few percentage points for wheat and corn from what they would have been without climate change. The overall impact on production of rice and soybeans was negligible, with gains in some regions entirely offsetting losses in others.

But the authors of the study — David Lobell and Justin Costa-Roberts of Stanford University, and Wolfram Schlenker of Columbia University — pointed out that temperature increases were expected to accelerate in coming decades, making it likely that the challenges to food production will grow in an era when demand is expected to rise sharply.

Over the period covered by the study, 1980 to 2008, temperatures increased briskly in many of the world’s important agricultural regions. A notable exception was the United States: for reasons climate scientists do not fully understand, temperatures in the Midwestern corn and soybean belt during the summer crop-growing season have not increased in recent decades.

“One way to think of it is that we got a pass on the first round of global warming,” Dr. Lobell said.

However, the study found that in virtually all of Europe, large parts of Asia and some parts of Africa and South America, temperatures during the growing season have warmed by an average of several degrees since 1980, increasing the likelihood of extremely hot summer days. The study also looked at rainfall, but changes were relatively minor compared with the temperature increases.

Plants are known to be sensitive to high temperatures, especially if the hot days occur when they are flowering. “In many of these countries, a typical year now is like a very warm year back in 1980,” Dr. Lobell said.

Wheat, rice, corn and soybeans account for the majority of calories consumed by the human race, either directly or as meat from animals raised on grains. Because demand for these grains is inflexible and rising, the losses from climate change probably accounted for price increases of about 6 percent in the four major commodities, the study’s authors found.

At today’s grain prices, that calculation implies that climate change is costing consumers, food companies and livestock producers about $60 billion a year.

“We aren’t talking about the sky falling,” Dr. Lobell said. “But we are talking about billions of dollars of losses. Every little bit of production is valuable when we’re trying to feed the world.”

If the price estimate is correct, it makes climate change a small contributor to a large trend. The prices of many foodstuffs have doubled or tripled in recent years as a result of a host of factors, including rapidly rising food demand in Asia, government mandates to use crops for biofuel production and extreme weather that may or may not be linked to climate change.

The authors of the new study specifically excluded the effects of extreme weather like brief heat waves and flash floods because of limitations in the data that they used. For that and other reasons, Dr. Lobell said, the study’s estimate of the impact of climate change is probably conservative.

View the original article here

Climate Changes Hinder Crop Yields, Study Finds

Wheat yields in recent years were down by more than 10 percent in Russia and by a few percentage points each in India, France and China compared with what they probably would have been without rising temperatures, according to the study.

Corn yields were off a few percentage points in China, Brazil and France from what would have been expected, said the researchers, whose findings were published in Friday’s issue of the journal Science.

Some countries saw small gains from the temperature increases, however. And in all countries, the extra carbon dioxide that humans are pumping into the air acted as a fertilizer that encouraged plant growth, offsetting some of the losses from rising temperatures caused by that same greenhouse gas.

Consequently, the study’s authors found that when the gains in some countries were weighed against the losses in others, the overall global effect of climate change has been small so far: losses of a few percentage points for wheat and corn from what they would have been without climate change. The overall impact on production of rice and soybeans was negligible, with gains in some regions entirely offsetting losses in others.

But the authors of the study — David Lobell and Justin Costa-Roberts of Stanford University, and Wolfram Schlenker of Columbia University — pointed out that temperature increases were expected to accelerate in coming decades, making it likely that the challenges to food production will grow in an era when demand is expected to rise sharply.

Over the period covered by the study, 1980 to 2008, temperatures increased briskly in many of the world’s important agricultural regions. A notable exception was the United States: for reasons climate scientists do not fully understand, temperatures in the Midwestern corn and soybean belt during the summer crop-growing season have not increased in recent decades.

“One way to think of it is that we got a pass on the first round of global warming,” Dr. Lobell said.

However, the study found that in virtually all of Europe, large parts of Asia and some parts of Africa and South America, temperatures during the growing season have warmed by an average of several degrees since 1980, increasing the likelihood of extremely hot summer days. The study also looked at rainfall, but changes were relatively minor compared with the temperature increases.

Plants are known to be sensitive to high temperatures, especially if the hot days occur when they are flowering. “In many of these countries, a typical year now is like a very warm year back in 1980,” Dr. Lobell said.

Wheat, rice, corn and soybeans account for the majority of calories consumed by the human race, either directly or as meat from animals raised on grains. Because demand for these grains is inflexible and rising, the losses from climate change probably accounted for price increases of about 6 percent in the four major commodities, the study’s authors found.

At today’s grain prices, that calculation implies that climate change is costing consumers, food companies and livestock producers about $60 billion a year.

“We aren’t talking about the sky falling,” Dr. Lobell said. “But we are talking about billions of dollars of losses. Every little bit of production is valuable when we’re trying to feed the world.”

If the price estimate is correct, it makes climate change a small contributor to a large trend. The prices of many foodstuffs have doubled or tripled in recent years as a result of a host of factors, including rapidly rising food demand in Asia, government mandates to use crops for biofuel production and extreme weather that may or may not be linked to climate change.

The authors of the new study specifically excluded the effects of extreme weather like brief heat waves and flash floods because of limitations in the data that they used. For that and other reasons, Dr. Lobell said, the study’s estimate of the impact of climate change is probably conservative.

View the original article here

Your Money: The Changes to Save a Big Idea

 

In fact, he spent about a decade working on it, finally succeeding when the Class Act, short for Community Living Assistance Services and Support, became law as part of last year’s landmark health insurance package.

The Class Act promises a lot: eligibility for most people, no matter their health status, as long as they are working at least a little; a benefit of at least $50 or so a day that lasts until death if necessary; and a premium structure that will offer big discounts for lower-income people but still won’t require any federal money.

This all turned out to be a bit too optimistic. In recent months, Kathleen Sebelius, the secretary of health and human services, has said that it will be difficult to make the offering both affordable and actuarially sound without some alterations.

She and her staff are making some changes, and the law gives them a certain amount of leeway. Their ultimate challenge is to make sure that the premium is not so low that there won’t be enough money to pay claims. But it also cannot be so high that it will scare off the young, healthy people who could subsidize all of the infirm people attracted to the plan’s generous eligibility rules (or frighten the employers of younger adults, who might encourage them to sign up).

Plenty of politicians are furious about the fact that something like this became law without the long-term numbers adding up. The far more interesting question, however, is why Senator Kennedy felt this law was necessary in the first place.

Here’s the blunt truth: Medicare generally won’t pay for as much nursing home or in-home care as many people think it will. Your cash savings may well be insufficient, especially if you want to leave plenty of money for a spouse who may outlive you. Your family may not be willing or able to take care of you. And if you do spend all of your assets to qualify for Medicaid, there’s no guarantee Medicaid will pay for the quality of care you want and do so close to friends or family.

So we better hope that the Class Act works and helps lots of Americans. Because if it doesn’t, plenty of people will be right back in denial-land again.

That said, there are some people who have already purchased long-term care insurance from a commercial company. Limra, a market research firm, figures there are about seven million of them.

Some buy it out of an abundance of caution, while others do it because their employers offer subsidized premiums as a benefit. Many others have seen family members spend hundreds of thousands of dollars on care or struggled to provide care themselves when there was no money left.

Even so, the insurance companies can make this a tough product to love, given their unexpected price jumps or occasional outright abandonment of the business.

How can the federal government possibly hope to do better? There are at least three ways.

First, it can enlist the help of employers, who could each make the government plan available to many thousands of employees.

According to an Aon Hewitt survey of over 1,300 large employers, 50 percent already made long-term care insurance available in 2010. But would those employers really want to replace what they have with a government program that would probably offer a lower level of benefits? Or would they offer it alongside their current plans?

As for the half of employers who do not offer any plan now, will their wary human resources executives really be first in line for a new government program?

The second way to potential success here is through automatic enrollment: getting those employers who do sign on to put every employee in the government plan and let individuals opt out later if they so choose.

The Class Act specifically mentions this possibility, though it does not seem to require it. The idea comes straight from the 401(k) playbook. According to an estimate from David L. Wray, president of the Profit Sharing/401k Council of America, which represents the interests of employers, about 38 percent of employees who have access to 401(k) plans work for employers who automatically enroll new workers.

Nobody, however, currently makes their employees buy long-term care insurance, according to Guy Bertsch, vice president for long-term care operations at Unum, which claims to sell far more policies through the workplace than any other company.

The authors of the Class Act were clearly worried about what would happen if employers did not sign everyone up automatically, though. Indeed, at employers that do not provide long-term care insurance free to everyone but still make it available for employee purchase, voluntary buy-in tends to be below 10 percent, Mr. Bertsch said.

Finally, there’s the possibility of rebranding the product to make it more relevant to young adults. Connie Garner, a former member of Senator Kennedy’s staff who worked closely with him on the Class Act, says she believes long-term care insurance has an image problem. “People think it’s for the lady with the blue hair in a wheelchair,” she said.

Ms. Garner, who is a nurse practitioner and now runs an advocacy group called AdvanceClass, speaks to groups about the fact that young adults who see themselves as invincible are only one dive into shallow water away from needing in-home care for the rest of their lives. That, she said, often moves parents in the audience to volunteer to pay for any premiums for their children, given that they would be discounted in the Class Act’s plan.

 

Your Money: The Changes to Save a Big Idea

 

In fact, he spent about a decade working on it, finally succeeding when the Class Act, short for Community Living Assistance Services and Support, became law as part of last year’s landmark health insurance package.

The Class Act promises a lot: eligibility for most people, no matter their health status, as long as they are working at least a little; a benefit of at least $50 or so a day that lasts until death if necessary; and a premium structure that will offer big discounts for lower-income people but still won’t require any federal money.

This all turned out to be a bit too optimistic. In recent months, Kathleen Sebelius, the secretary of health and human services, has said that it will be difficult to make the offering both affordable and actuarially sound without some alterations.

She and her staff are making some changes, and the law gives them a certain amount of leeway. Their ultimate challenge is to make sure that the premium is not so low that there won’t be enough money to pay claims. But it also cannot be so high that it will scare off the young, healthy people who could subsidize all of the infirm people attracted to the plan’s generous eligibility rules (or frighten the employers of younger adults, who might encourage them to sign up).

Plenty of politicians are furious about the fact that something like this became law without the long-term numbers adding up. The far more interesting question, however, is why Senator Kennedy felt this law was necessary in the first place.

Here’s the blunt truth: Medicare generally won’t pay for as much nursing home or in-home care as many people think it will. Your cash savings may well be insufficient, especially if you want to leave plenty of money for a spouse who may outlive you. Your family may not be willing or able to take care of you. And if you do spend all of your assets to qualify for Medicaid, there’s no guarantee Medicaid will pay for the quality of care you want and do so close to friends or family.

So we better hope that the Class Act works and helps lots of Americans. Because if it doesn’t, plenty of people will be right back in denial-land again.

That said, there are some people who have already purchased long-term care insurance from a commercial company. Limra, a market research firm, figures there are about seven million of them.

Some buy it out of an abundance of caution, while others do it because their employers offer subsidized premiums as a benefit. Many others have seen family members spend hundreds of thousands of dollars on care or struggled to provide care themselves when there was no money left.

Even so, the insurance companies can make this a tough product to love, given their unexpected price jumps or occasional outright abandonment of the business.

How can the federal government possibly hope to do better? There are at least three ways.

First, it can enlist the help of employers, who could each make the government plan available to many thousands of employees.

According to an Aon Hewitt survey of over 1,300 large employers, 50 percent already made long-term care insurance available in 2010. But would those employers really want to replace what they have with a government program that would probably offer a lower level of benefits? Or would they offer it alongside their current plans?

As for the half of employers who do not offer any plan now, will their wary human resources executives really be first in line for a new government program?

The second way to potential success here is through automatic enrollment: getting those employers who do sign on to put every employee in the government plan and let individuals opt out later if they so choose.

The Class Act specifically mentions this possibility, though it does not seem to require it. The idea comes straight from the 401(k) playbook. According to an estimate from David L. Wray, president of the Profit Sharing/401k Council of America, which represents the interests of employers, about 38 percent of employees who have access to 401(k) plans work for employers who automatically enroll new workers.

Nobody, however, currently makes their employees buy long-term care insurance, according to Guy Bertsch, vice president for long-term care operations at Unum, which claims to sell far more policies through the workplace than any other company.

The authors of the Class Act were clearly worried about what would happen if employers did not sign everyone up automatically, though. Indeed, at employers that do not provide long-term care insurance free to everyone but still make it available for employee purchase, voluntary buy-in tends to be below 10 percent, Mr. Bertsch said.

Finally, there’s the possibility of rebranding the product to make it more relevant to young adults. Connie Garner, a former member of Senator Kennedy’s staff who worked closely with him on the Class Act, says she believes long-term care insurance has an image problem. “People think it’s for the lady with the blue hair in a wheelchair,” she said.

Ms. Garner, who is a nurse practitioner and now runs an advocacy group called AdvanceClass, speaks to groups about the fact that young adults who see themselves as invincible are only one dive into shallow water away from needing in-home care for the rest of their lives. That, she said, often moves parents in the audience to volunteer to pay for any premiums for their children, given that they would be discounted in the Class Act’s plan.

 

US Skeptical About Syrian Law Changes

 David Gollust | State Department ?April 19, 2011

Mourners attend the funerals of protesters killed in earlier clashes in the Syrian city of Homs, April 18, 2011

The United States expressed skepticism Tuesday that a vote by Syria’s cabinet to end 48 years of emergency rule will actually ease human rights conditions there. The State Department confirmed U.S. opposition to Syria’s candidacy for the U.N. Human Rights Council.

Officials here say any gains from the vote lifting the state of emergency in Syria would apparently be negated by companion legislation regulating public protests, and they are renewing their call on authorities in Damascus to end violence against demonstrators.

The action by the Syrian cabinet followed a speech by Syrian President Bashar al-Assad Saturday in which he promised to end the harsh emergency law in effect since 1963.

The cabinet Tuesday ratified draft legislation ending the state of emergency, and abolishing a special security court widely criticized by human rights activists. But it also approved a measure regulating peaceful protests that would require permission from the Syrian Interior Ministry for any demonstration.

At a news briefing, State Department Acting Deputy Spokesman Mark Toner said the Syrian legislation, awaiting the signature of President Assad, may not yield any net gain for human rights in the country.

"In light of some of the comments we’ve seen from the interior minister, this new legislation may prove as restrictive as the emergency law it replaced," said Toner. "More fundamentally, there was more violence overnight, soldiers firing on peaceful protestors. Obviously the violence there continues to raise serious concerns. And it remains clear that the Syrian government need to urgently implement broader reforms."

Toner said that while President Assad has cast himself as a reformer, "we have seen a lot of words and not a lot of action" and that it is for the Syrian people to decide whether he has done enough.

Amnesty International says at least 200 people have been killed by security forces since demonstrations for democratic reforms began in Syria a month ago.

The? U.S. spokesman confirmed that the United States will oppose Syria’s candidacy for membership on the U.N. Human Rights Council.

Syria is running unopposed for one of four seats reserved for Asian countries on the 47-nation council. It is thus is likely to win a seat unless another Asian country comes forward to contest the vote, set for late May.

Spokesman Toner said the Obama administration believes that given the Damascus government’s actions against its own people, it would be "inappropriate and hypocritical" for Syria to join the Human Rights Council.

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