DAVOS, Switzerland (AP) — The World Economic Forum held in the Swiss ski resort of Davos has the official goal of “improving the state of the world.” In practice, it’s a massive networking event that brings together 2,500 heads of state, business leaders, philanthropists and artists.
Here are some glimpses of what’s happening and being discussed Friday at Davos:
GREECE’S BIG DAY
Two days ahead of a Greek general election in which left-wing Syriza is tipped to emerge as the biggest single party, German Finance Minister Wolfgang Schaeuble angrily dismissed suggestions that his country has not done enough to help Greece over the past few crisis years.
Schaeuble told a panel at the World Economic Forum that Berlin had gone out of its way to help the beleaguered Greek governments of the recent past deal with the acute economic problems that they faced, whether it was in lending billions to Athens or getting the International Monetary Fund to help out, too.
While insisting that Berlin has not modelled any Greek exit from the 19-country eurozone, he did warn any incoming government that it would not be eligible for the European Central Bank’s new stimulus program if it ditches the reform program required for the bailout cash. On Thursday, the ECB announced a 1.1 trillion-euro (about $1.25 trillion) bond-buying program to help boost the ailing 19-country eurozone economy. Greece can join in on certain conditions.
-By Pan Pylas, Twitter: http://www.twitter.com/panpylas
SOROS WARNING
George Soros, the legendary financier, has warned that the European Central Bank’s newly announced government bond-buying program could create an asset bubble that will further widen the gap between rich and poor across the 19-country eurozone.
At a panel on the World Economic Forum, Soros said he remains a critic over Germany’s stance in particular. Germany, the biggest economy in the eurozone, has been a cheerleader for the austerity program many countries have had to pursue in return for bailout cash. Soros reckons the eurozone would do better if Germany loosened the purse strings a bit, both for itself and elsewhere in the eurozone.
Soros said his main concern over the ECB’s a 1.1 trillion-euro (about $1.25 trillion) bond-buying program is that will benefit the owners of assets as the money generated from the stimulus flows through the financial system, further widening the gap between rich and poor. That, he warned, “will have political consequences….We need a better balance between fiscal policy and monetary policy.”
Soros also foresaw financial instability that can create turmoil.
-By Pan Pylas, Twitter: http://www.twitter.com/panpylas
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RUSSIAN FREEDOM
It could be decades before Russians see Western-style democracy, if the country’s deputy prime minister, Igor Shuvalov, is to be believed.
In a heated debate over the merits of the collapse of the Soviet Union, which created greater freedoms but also a period of economic chaos, Shuvalov said it is still too early for Western-style freedoms in Russia.
“Freedom and liberty should go hand in hand with cultural development,” he said. He argued that complete freedom of the press requires people to exercise personal control to avoid mudslinging and defamation.
“Do you think we don’t want Western democracy?,” he said. “Of course we’d love it, but it can’t happen overnight. It happens through decades of hard work.”
-By Carlo Piovano, Twitter: http://www.twitter.com/cpiovano
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SAUDI KING MOURNED
The death of Saudi Arabia’s King Abdullah was one of the main talking points, with a host of participants paying tribute. Among them were Shimon Peres, the former president of Israel, who said Abdullah’s death represented a “real loss for peace in the Middle East.”
Mounir Fakhry Abdel Nour, the Egyptian trade minister, said Abdullah did a lot to unify the Arabs but that Saudi Arabia was “in good hands” with his successor, King Salman bin Abdul-Aziz Al Saud.
Beyond voices from the Middle East, Pierre Moscovici, the European Union’s Commissioner for Economic and Financial Affairs, described Abdullah as “a personality of peace and strong leadership.” Canadian Foreign Minister John Baird said Salman will “be a strong leader not just for the kingdom but for the region.”
Meanwhile, King Abdullah II of Jordan has canceled his appearance at a session on advancing Middle East security and peace.
-By Pan Pylas, Twitter: http://www.twitter.com/panpylas
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DRAGHI PLAUDITS
Following his announcement Thursday that the European Central Bank was ready to embark on a 1.1 trillion-euro (about $1.25 trillion) bond-buying program, Mario Draghi is being hailed across stock markets around the world. On Friday, European markets added to the stellar gains they enjoyed in the wake of the announcement.
The ECB president also garnered the support of two leading international economic policymakers at the World Economic Forum.
Christine Lagarde, the International Monetary Fund’s managing director, told The Associated Press that the stimulus announcement was “well done, well-communicated” and laid out her hope that it will be effective.
Meanwhile, Draghi’s counterpart at the Bank of England, Mark Carney, said the move was a “welcome step” and “absolutely necessary to preserve the prospects of medium-term prosperity in Europe.” Though he cautioned that the measure was not enough to shake the 19-country eurozone economy out of its slumber, he said it creates some of the “necessary conditions.”
-By Pan Pylas, , Twitter: http://www.twitter.com/panpylas
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