RTC Director

German Leader Pressed to Soften Austerity Stance on Greece

German Chancellor Angela Merkel faced pressure Wednesday in Brussels to soften her economic austerity stance that threatens to push Greece out of the euro currency zone.

Leaders of 27 European Union countries discussed ideas on how to spur economic growth across the bloc and solve the European currency crisis during a dinner summit in the Belgian capital.

France and Germany, once unified in pushing the tough measures, are at odds since France's new president, Socialist Francois Hollande, took office earlier this month.

Mr. Hollande is urging economic growth as a way out of crisis instead of austerity measures alone. The German leader said she was willing to look into ways of helping Greece, but rejected a call for eurobonds — jointly pooled eurozone debt — saying that they would help stimulate growth in the eurozone.

Ahead of the meeting, former Greek prime minister George Papandreou said this was a “make or break” moment for Greece and for Europe.

“We have made major sacrifices, because we want to see a transparent Greece, a competitive Greece, a dynamic Greece, and a just Greece. And we want to remain in the euro. But we also need time and understanding, and we need understanding that this is a wider crisis. It is a crisis where we need to go beyond name-calling and scapegoating (blaming each other) and we need to collectively pull our strength.”

Greek Socialist leader Evangelos Venizelos said that the situation in Greece is very fragile and expressed hope that with the support of Europe's Socialists, a solution can be found.

Europe's leaders are not expected to come up with any concrete plan of action before new Greek elections in June. If anti-austerity politicians win out, Greece may have to leave the 17-member common currency zone.

Klaus Larres is a professor of international relations at the University of North Carolina at Chapel Hill and an expert on European integration. Larres told VOA that Greece may be forced to leave the eurozone regardless of the election results because international creditors will stop financing the country if it does not commit to harsh debt-reducing measures.

“That will mean an escape from the country by all investors in Europe and all global investors. A lot of Greek people will withdraw all their funds from the Greek banks — their euro savings — before the drachma is introduced, and it will lead to collapse of the Greek banking system and also the Greek economy. It will make imports into Greece extremely expensive because the new drachma will be devalued at a considerable extent thus exports into Greece will become rather expensive, including medicine, oil, all other goods, the Greeks are actually very dependent on and it will lead to a severe crisis in Greece.”

Larres says European leaders are preparing contingency plans for a possible Greek exit from the currency zone, which would affect international banks and hurt the global economy.

Uri Dadush, an economist with the U.S.-based Carnegie Endowment for International Peace, told VOA he believes the austerity measures will prevail.

“I think in the end, the austerity measures will prevail because that is the logic of the market. So my view is that the austerity policies for virtually every country in Europe mandated, because of the fact that the markets will not finance increased deficits and indeed they will not finance current levels of deficit. They want to see reductions. The markets have lost confidence.”

On the eve of the summit, the European Parliament agreed to a pilot program that would use nearly $300 million of so-called project bonds in 2012 and 2013 to finance about $5.8 billion of investment projects.

Leaders at the summit may also consider assisting large and troubled European bank

s like those in Spain that are struggling under the economic crisis.

VOA

by RTC Director

US Charges Chinese Salesman with Illegally Exporting Nuclear Equipment

U.S. authorities have arrested a Chinese employee of a technology manufacturer for allegedly smuggling uranium enrichment equipment into China.

Agents arrested Qiang Hu at a hotel in the northeastern state of Massachusetts.

He is suspected of illegally exporting thousands of pressure measuring sensors to China from MKS Instruments in Massachusetts.

The devices are used to enrich uranium and could be used in nuclear bombs.

The U.S. Justice Department says Qiang is MKS's sales representative in its Shanghai office.

by RTC Director

Iran Nuclear Talks Hit Snag

Continuing talks between Iran and global powers have hit a snag as the West rebuffed Tehran's call for an immediate easing of economic sanctions and official Iranian media said the proposals on the table needed to be significantly revised.

The negotiations in Baghdad were extended for a second day into Thursday, as U.S. and European officials said they remained committed to finding a solution to the impasse.

Western representatives presented a package Wednesday that calls on Tehran to freeze production of nuclear fuel enriched to 20 percent purity, considered a short step away from weapons grade. The plan also seeks to close an Iranian enrichment facility built inside a fortified military bunker near the holy city of Qom.

In exchange, the P5+1 group offered benefits, including medical isotopes, some nuclear safety cooperation and spare parts for civilian airliners, much needed in Iran. The P5+1 includes the five permanent members of the U.N. Security Council plus Germany.

The Iranian side indicated that ending impending Western sanctions on Tehran's oil trade is key for the talks to advance. But diplomats from the six world powers have refused to consider postponing the new harsher measures.

Iran's state-run IRNA news agency said Tehran presented its own package Wednesday, including details on what mutual compromises Iran and its international counterparts should make.

IRNA criticized the proposal from the six-nation group, saying it makes too many demands of Iran while offering too little in return.

Iran said its enrichment work is meant for medical research and generating electricity. Western nations fear Iran could quickly upgrade its uranium to the 90 percent purity needed for nuclear weapons.

Baghdad University professor Said Dahdhoh told VOA's Kurdish service that Iran wants the talks to be comprehensive and focus on more than just the nuclear dispute. He said Tehran also wants the West to clarify its stand on Bahrain and other regional issues.

Shi'ite Iran has strongly criticized plans by Bahrain's minority Sunni leadership to seek a political union with Sunni-dominated Gulf states. Bahrain's ruling family is an ally of Washington that provides the U.S. Navy with a key regional base.

World powers have insisted for months that talks focus solely on the disputes with Iran's nuclear program.

This is the second round of a dialogue that resumed last month in Istanbul after a break of more than a year.

Published reports say the six-nation group is reviving a 2009 proposal for Iran to ship out its stockpiles of low-enriched uranium in return for higher-enriched fuel for a medical research reactor in Tehran.

Iran is seeking pledges from the world powers to ease U.N. and Western sanctions imposed on the country for defying international demands for a suspension of enrichment.

Israel sees a nuclear-armed Iran as a threat to its existence and refuses to rule out military action against the Iranian nuclear program.

Israeli officials have urged the world powers not to compromise on their demand for a stop to Iranian enrichment work. Those officials also have expressed concern that Iran will make empty promises of concessions to buy more time to covertly develop nuclear weapons.

by RTC Director