No Greek budget cuts, no bailout aid: German Finance Minister

FRANKFURT (Reuters) - German finance minister Wolfgang Schaeuble warned that a veto of the Greek government's austerity plans by parliament this week could mean Athens will not receive a bailout tranche it needs to remain solvent.

"If the package is rejected, which no one expects actually, then the prerequisites would no longer exist for the IMF, EU and euro zone countries to release the next tranche of aid," he told German Sunday newspaper Bild am Sonntag.


Athens needs to get its fifth slice of a 110 billion euro ($155.7 billion) EU/IMF bailout worth 12 billion euros, without which the country would be unable to cover pressing funding needs after July 15.

"The stability of the entire euro zone would be in danger and we would need to quickly ensure that the risk of contagion for the financial system and other euro area countries would be contained," he said.

The Greek parliament is due to vote on Wednesday and Thursday on measures that include 6.5 billion euros worth of extra austerity steps for this year and savings of 22 billion euros for 2012-2015 to cut deficits and keep qualifying for EU/IMF aid. It also speeds up the sale of state assets under a 50 billion euro privatization program.

"We are doing everything to prevent the crisis from escalating, but we must be ready for everything. That's our responsibility and we are preparing ourselves for that," he said.

"I am confident that a majority can be found in the Greek parliament for the austerity package," Schaeuble added.

The PASOK part of Greek Prime Minister George Papandreou counts 155 MPs in a 300-strong parliament, but his already razor thin majority may be undermined by two announced defections.

In Bild am Sonntag, Finance Minister Schaeuble also said that he expected private sector creditors to participate willingly in a second bailout package, which is likely to be similar in size to the 110 billion euros of EU/IMF loans from May 2010 and should tide Greece over until the end of 2014.

"Stabilizing the situation in Greece and bringing it under control is really in the absolute interest of all investors. Therefore the private sector doesn't need any additional incentives," Schaeuble said.

German banks, which say they have some 10-20 billion euros in exposure to Greece, have called for the state to guarantee their risk with taxpayer money should they participate in some form of a debt rollover.

Separately, German Sunday weekly Welt am Sonntag reported that German banks were expected to name what kind of maturity extension on Sunday that they are willing to accept.

Welt am Sonntag wrote that as of Friday banks were only offering to grant a one-year extension, instead of the five that the German government wanted.

Speaking to Bild am Sonntag, Schaeuble also said that he was confident his coalition could muster up the votes necessary to approve the creation of the European Stability Mechanism (ESM), the permanent fund to finance euro zone sovereign bailouts that goes into effect in 2013.

"I don't have the slightest doubt that once the summer break is over the treaty over the European Stability Mechanism finds a sufficient majority in the Bundestag and Bundesrat," he said, referring to the upper and lower houses of parliament.

Neighbors Lend a Hand to Flood-Ravaged North Dakota Town

Chased from their homes by rising floodwaters and bunking with friends, clergymen Mike Johnson and Mike Pancoast did what seems to come naturally to folks around here: They hopped into a car and headed for a nearby town to help others evacuate.

"There are people who need help and they need it now and we're able to do it, so let's go," Johnson said Saturday before hitting the road for the North Dakota town of Velva, about 20 miles downstream from Minot, where the Souris River was nearing its peak after swamping an estimated 4,000 homes. TheNational Weather Service predicted the river's crest later in the weekend would be 2 feet lower than earlier projected, welcome news in the battered community.

Johnson, associate pastor of Christ Lutheran Church, was uncertain about the fate of his own apartment building, although his belongings were safely in the hands of parishioners and friends in town. Fellow Lutherans from Stanley, an hour's drive west, took charge of his office equipment and files. "They just showed up on Tuesday and carted stuff off for us," he said.

Similar stories of people helping each other, often without being asked and demanding nothing in return, were a heartwarming counterpoint to the destruction from unprecedented flooding along the Souris valley in north-central North Dakota. Brought together by word of mouth, church and civic networks, social media and random encounters, those with housing and supplies to spare gave willingly to those without.

So many opened their doors that while some 11,000 people were evacuated from neighborhoods nearest the river, only a few hundred used shelters at Minot State University and the City Auditorium.

"For the rest of the country, that is kind of mind boggling. But ... that's how we are in North Dakota," Sen.John Hoeven said.

A Facebook page called "Minot ND Flood Help" drew volunteer offers to haul furniture, care for pets, clean laundry and even give therapeutic massages -- many from outside town.

Patrica Eide of Tioga, about 85 miles west, posted an offer to loan her 30-foot camper to a displaced family. It quickly drew a taker: a man with a wife and three children who were living in their van since being evacuated.

"We could probably rent that thing for $500 a month, but I told my husband there's no way I'm going to be greedy," Eide, 62, said by phone. "God just had better plans for our camper than renting it."

She was preparing to haul it to Minot with a load of canned tomatoes and green beans, a grill, propane and other supplies. "I think we've got `em covered," she said.

Mike Pancoast and his wife Kari, both associate pastors at First Lutheran Church, were staying with Minot State campus pastor Kari Williamson after the rising river threatened their church and adjacent brick parsonage. Like Johnson, they didn't know how high the waters would rise, but were confident enough to move most of their clothes and other belongings to higher floors instead of removing them. Their four children were staying with her parents in Minnesota.

"We've kept it together pretty well, although it's not to say we're a solid rock through this," Mike Pancoast said, sipping coffee at the kitchen table of Williamson's ranch-style house. "It's one thing to go and visit somebody and stay in their house and enjoy their hospitality for a couple of days. It's another thing to move in indefinitely and wonder, have we overstayed our welcome?"

Johnson was staying with parishioners David and Laurie Weber. Their teenage sons Preston and Dylan accompanied him to Velva after spending Thursday on their bikes, going door-to-door to help evacuees move furniture.

A common sight was garages packed with televisions, books, clothing and other items as residents turned their homes into temporary storage units for flood victims. Williamson was keeping things for students at Minot State.

Across the street, a trailer stuffed with household belongings stood in Derek Cumbie's driveway. His garage was a veritable warehouse after several friends dropped off their things.

Two were staying with Cumbie, 26, a captain at Minot Air Force Base.

"I've been really impressed with how people in this community are helping each other, so I wanted to do my part," he said.

The river had been expected to peak at some 8 1/2 feet above major flood stage, but it leveled off hours earlier and was only rising by tiny amounts later Saturday. The National Weather Service dropped the projection by about 2 feet as upstream flows weakened.

City officials applauded when Minot Mayor Curt Zimbelman announced the peak forecast at a news conference. He warned the sustained high water flows were likely to last for three to four days, enough to put significant strain on the city's newly built earthen levees.

"You've got that deterioration on the dikes. If you see how fast that water is moving, it's scary," Zimbelman said. "We're concerned that we can hold it, and it's critical that we keep a vigilant eye on this."

Minot's Broadway Street bridge over the Souris, which is its most important connection between the north and south sections of the city, is likely to remain closed until the crest recedes, the mayor said.

Problems at Minot's water treatment plant prompted the state Department of Health to issue a "boil order" on Saturday for users of city water. It also applies to the Minot Air Force Base, about 13 miles north of town, which gets its drinking water from Minot's municipal system.

Alan Walter, Minot's public works director, said water plant workers discovered that untreated water had gotten into the city system, and he believe the problem would be remedied in one or two days.

Zimbelman said city officials were "not completely sure at this point" that Minot's water supply had been contaminated.

"It has not been fully tested ... to show that it is contaminated," Zimbelman said. "There is just a concern at this point, so we're taking precautions."

Greek ministers appeal to MPs to back austerity plan

(Reuters) - Greek ministers urged wavering members of the ruling Socialist party on Saturday to do their duty in a knife-edge vote in parliament next week and back painful austerity measures that lenders demand as the price for fresh bailout loans.
Finance Minister Evangelos Venizelos offered to talk to any MP who might have concerns. "I believe that the sense of responsibility will ultimately prevail, the God of Greece is great," he said on TV station Alter.
With Prime Minister George Papandreou's majority down to a handful of votes, one deputy from his PASOK party said on Friday he would vote against the measures, joining another party rebel who announced his opposition earlier this month.
The mix of spending cuts, state selloffs and tax hikes demanded by international lenders to reduce Greece's enormous public debt has caused bitter resentment among ordinary Greeks, who have taken to the streets in daily protests.
A two-day general strike is planned next week to coincide with the votes, following a rolling series of strikes at companies including Greece's dominant electricity producer PPC, which is slated for privatisation next year.
Unable to borrow on the markets because of the ruined state of its public finances, Greece depends on international support to avert bankruptcy in the next few days, an event that could plunge the global economy into turmoil.
But international lenders have demanded a clear commitment to reform and if parliament fails to back either of two key austerity votes on June 29 and 30, the EU and the IMF may refuse to release a vital 12-billion euro funding that Greece needs immediately or to approve a new bailout package.
Athens accepted a package of 110 billion euros of EU/IMF loans in May 2010 but now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.
Justice Minister Miltiadis Papaioannou urged his fellow MPs to back the unpopular measures. "They must shut their ears to all the criticism they are hearing and do their duty," he said in an interview on TV station Mega.
Despite heavy pressure from European leaders including German Chancellor Angela Merkel, the conservative New Democracy opposition party, has refused to support the package, meaning two or three votes either way could decide the outcome.
Papandreou's government now has 155 seats in the 300-strong parliament. Austerity measures have cost the Socialists five defections since their October 2009 election victory with a majority of 160 MPs.
The embattled prime minister last week sacrificed his previous finance minister, George Papaconstantinou, in a reshuffle to smooth the passage of the austerity plan but opinion polls still show him trailing the opposition.
Papandreou's MPs solidly backed the new government in a vote of confidence on Wednesday. But doubters maintain their opposition to higher taxes and the planned sale of shares in some state-controlled companies.
"Shops are shutting down every day and we are taking anti-growth measures," party maverick Thomas Robopoulos, a car dealer from Greece's second city, Thessaloniki, and one of the few businessmen in parliament told Reuters.
Austerity measures have pushed Greece into its deepest recession in 37 years, with GDP declining more than 4 percent last year. Unemployment has surged to a record 16.2 percent in March with youth jobless rates now at 43 percent.
Venizelos acknowledged that many of the measures he agreed with inspectors from the EU and the IMF late on Thursday were unfair and harsh, but said they were necessary to stave off default.

US eager to deepen cooperate on anti-corruption in India

The United States is eager to deepen its cooperation with India on anti-corruption issues, especially in the field of money laundering and terrorism financing, a top Obama Administration official has said.

"We are very eager to deepen our cooperation with the Indian government (on anti-corruption issues)," the Under Secretary of Treasury for International Affairs Lael Brainard told a group of Indian reporters yesterday when asked about the on-going popular anti-corruption movement in India.

"We have put forward a number of ways that we would be happy to do that including extending technical assistance," Brainard said in response to a question.


"We are looking forward during the discussions on Tuesday next week talking further about the challenges both sides are facing and some of the ways we work here to counter money laundering and terrorism financing.

"We are very eager to deepen co-operation in that area," said the top Treasury official ahead of the next week's India-US Economic Dialogue.

When asked if corruption in India would affect trade and investment in India, she said: "We know from a lot of research and economics that one of the key factors in explaining the health of the investment environment is how much transparency there is and how effective are safeguards against corruption."

"So generally speaking it is very beneficial for purpose of foreign direct investment, for purposes of domestic investment to be able to have an environment which is effective at combating corruption," she said.