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Greek Cabinet approves plans If you think the people of Greece are mad now, just wait.
The governmnet today took another big step toward a new round of austerity measures that threaten to slash government jobs and drive up taxes.
Already, there are widespread protests against the government in an extremely harsh economic climate. Unemployment is running at about 16 per cent, and for young people it's far, far worse.
Today, the Cabinet approved the plans, aimed at helping Greece meet targets tied to an international bailout, which now must go to a parliamentary vote.
It's already known that the government plans to sell off state assets, cut the public sector and hike property taxes. Reports today said they also includes a special tax on incomes and a hike in the sales tax at restaurants.
ECB signals rate hike The European Central Bank has set the stage for another interest rate hike next month, putting mounting concerns over inflation ahead of the troubles of the weak nations under its umbrella.
ECB chief Jean-Claude Trichet held his benchmark rate steady at 1.25 per cent today, but warned that "strong vigilance" is needed on inflation, a signal to the markets to expect a rate hike on July 7. At the same time, the ECB came in with a new forecast, projecting that consumer prices will rise 2.6 per cent this year, an inflation rate above its comfort level.
Mr. Trichet, whose mandate is to control inflation, is in a tough spot. As the central banker for 17 countries in the monetary union of the euro zone, he has to weigh developments in both the stronger countries, such as Germany, and the weaker ones, such as Greece, Portugal and Ireland, which can ill afford higher borrowing costs.
Today's comments indicate he will not be held back by the troubles in the peripheries, a move that may serve to heighten already rising tensions within the group. Mr. Trichet has been firm that he wants no restructuring of Greek debt, and he reiterated this point today.
"Despite all of the problems experienced by the peripherals, inflation is the primary motivator behind the ECB's decision," said senior economist Jennifer Lee of BMO Nesbitt Burns.
"Inflation is 'likely to stay clearly above 2 per cent over the coming months' and risks are to the upside. They updated their latest growth and inflation forecasts this morning and although they were revised higher for 2011, they were tweaked a tad lower in 2012 ... Look for a July rate hike as the ECB attempts to cool inflation and possibly one more after that before Trichet's term is up in October."
Mr. Trichet shrugged off the idea that an increase in rates will add pressure to the peripheral member states.
"When we solidly anchor inflation expectation in the euro area as a whole, we are anchoring stability and also anchoring confidence," he said. "It's good by definition for all countries."
The Bank of England also held rates steady today, at 0.5 per cent.
Unions under fire Organized labour is under fire the world over amid an increasingly uncertain economic outlook, The Globe and Mail's Emily Jackson reports.
As the financial crisis fades, new crises appear, and the age of austerity sets in, unions are struggling to make gains at the bargaining table and hold on to jobs. Cutbacks and strikes are in the headlines daily.
In Canada, the Canadian Union of Postal Workers is in the midst of rotating strikes against a profitable Canada Post. At Air Canada , unions are rallying today and could soon set a strike deadline.
In the United States, labour is in the sights of state governments. And in Europe, which is struggling with a debt crisis, government jobs are a frequent target.
Many public sector workers in Greece are off the job today to demonstrate against their government's plans to sell off state assets and slash the public sector. In Spain, government officials are meeting with labour leaders to discuss reforms.
- Why unions are in for a long, hot summer
- Greek workers strike to protest austerity
- Greece at the brink as politics takes centre stage
- Postal union considers escalation in strikes as talks stall
- Air Canada flight attendants call for conciliator
The little guys He describes himself on Twitter as "CTO, founder of i4i, dragon boater, family guy." Grand achievements though they may be, Michel Vulpe is no doubt destined to become known as the guy who took on Microsoft and won.
The U.S. Supreme Court had the final word today in a long-running and widely followed patent dispute between Microsoft Corp. and i4i, a Toronto-based tech shop founded by Mr. Vulpe and his partner, Loudon Owen.
The small Toronto company launched legal action against the software giant in 2007, alleging Microsoft had infringed on a text manipulation software patent in its popular Word program. A U.S. jury awarded i4i $290-million today.
The case ran up the appeals ladder to the top court, which ruled against Microsoft today in upholding a lower court judgment.
Mr. Vulpe has for years worked with groups like the Smithsonian, the U.S. Food and Drug Administration, and the Vatican with his technology, which makes it much easier to handle documents.
According to a report several years ago in The Globe and Mail, he helped the Smithsonian, for example, on a system to document its holdings, which number more than 130 million.
"You can imagine the complexity of trying to identify with words and write in documents that describe all this stuff," Mr. Vulpe told The Globe at the time.
"Imagine what a database like that would look like. It's not a bank, it's not an insurance company. It's millions of documents that are written by curators, engineers, art historians and anthropologists about collections as diverse as the jewels of the Nile to the space shuttle to what's in a jungle."
With Mr. Owen, who co-invented the technology, Mr. Vulpe founded i4i in 1993, which operates from a small office in downtown Toronto. Fresh from Geac, he started up next to a shiatsu massage clinic in Toronto, and, an ROB Magazine profile pointed out, frequented his new office with his dog Jack.
Mr. Owen, in turn has an MBA from INSEAD, and a law degreed from Osgoode. After his family moved to Canada from Indonesia, he attended the prestigious Upper Canada College in Toronto, then went on to the University of Toronto, where he became a boxing champion.
As the magazine put it, Mr. Owen was the hard-driving business executive alongside Mr. Vulpe's nerdy programmer.
Wonder whether Microsoft knew all this before it took them on.
Trade deficit widens Canada's trade deficit widened in April to $924-million as exports fell 1.9 per cent, outpacing a decline in imports of just 0.6 per cent. The April deficit was up from $417-million in March, Statistics Canada said today.
Export volumes slipped 1.1 per cent, and prices 0.9 per cent, largely because of a decline in shipments of machinery and equipment. Import volumes actually increased 1 per cent, but prices slid 1.5 per cent. Auto imports suffered, hurt by the March earthquake and tsunami in Japan.
In the key U.S. markets, Canadian exports climbed for the second consecutive month, but imports rose at a faster pace, narrowing the surplus in Canada-U.S. trade to $3.9-billion.
Trade with other countries eroded, with exports dropping 7.9 per cent and imports 4.1 per cent.
"Today's report suggests the Canadian economy started Q2 on a weak footing," said economic analyst Leslie Preston of Toronto-Dominion Bank.
"The decline in Canada's exports is consistent with the current soft patch we are seeing in the second quarter data globally. We do expect a lot of the forces hitting global growth in Q2 to be transitory, with the impact from the Japanese earthquake, and higher energy prices (which peaked in late April) starting to fade in the coming months."
U.S. jobless claims rise New claims for jobless benefits rose in the United States last week, remaining above the key 400,000 mark, as America's labour market continues to suffer.
Last week, the U.S. reported a stalled jobs market, and earlier this week Federal Reserve Chairman Ben Bernanke warned of its "frustratingly slow" healing.
Last week, the U.S. Labor Department said today, new claims for benefits climbed to 427,000.
"Note that claims have been grinding higher in the past two months or so, negatively impacted by Japanese supply-chain related shutdowns," said economist Robert Kavcic of BMO Nesbitt Burns. "Encouragingly though, the four-week average has now dipped in three consecutive weeks, currently sitting at 424,000."
In Economy Lab today
It would appear the great global housing recovery of 2011 has been put on hold. Globe and Mail real estate writer Steve Ladurantaye reports on a new Scotia Capital study.
In International Business today
There are concerns that Denmark's heated immigration debate and approach to foreigners is taking an economic toll, frightening away skilled workers and damaging competitiveness. Naomi Powell reports from Stockholm.
In Personal Finance today
- The new frontier: Putting groceries on credit cards
- Seven hints for holding a cottage in trust
- Five ways to save on real estate fees
From today's Report on Business