Sunday, 10 June 2012

Spanish Bailout: Big Questions Still Remain

While European soccer players were expertly kicking the ball down the field this weekend in the Euro 2012 tournament, European finance ministers were expertly kicking their debt crisis down the road.
Spain's request on Saturday for a 100 billion euro loan (about $125 billion) to recapitalize its banks seems likely to be at least a short-term solution to the worries lately that have gripped European financial markets, raising concerns about a global economic slowdown that could push the United States back into recession.
As the odds of a bank run in Spain have increased in recent weeks, Spanish borrowing costs have soared, while the values of the euro and risky assets such as stocks and commodities have tumbled. Saturday's news could at least temporarily reverse some of those ugly moves.
Even better for Spain, it gets to avoid additional austerity measures as a condition of the loan, as Greece and other bailed-out nations have suffered in the recent past.
But still some big questions linger.
First, will 100 billion euros ultimately be enough? A report by the International Monetary Fund suggests this will be more than enough and that Spanish banks need to raise 60 billion to 80 billion euros to mollify investors and cover losses in Spain's real estate market.
But those losses might continue to grow, which would mean that Spain has to go back to the well again. JPMorgan Chase analysts recently estimated that Spain could need as much as 350 billion euros, the Telegraph reported.

Afghanistan's U.S.-Funded Counter-Narcotics Tribunal Convicts Nearly All Defendants, Records Show

The Counter-Narcotics Justice Center, which was completed in 2009 with U.S. support, houses the only court to handle major narcotics crimes in the country. It has a conviction rate of nearly 98 percent, which one defense advocate calls "absurd."
KABUL, Afghanistan -- On a recent Tuesday morning, Ahmad Kazim, a 29-year-old Iranian, found himself sitting in a suspect box in a white-walled room, awaiting a trial for drug trafficking.
Three months ago, Kazim was busted driving across the border from western Afghanistan to Iran, in a car stuffed with more than 28 kilos of opium. Kazim says he had no idea it was in there: A friend had asked him to drive some bags of rice across and he never inspected the packages. Prosecutors said the drugs were concealed in dozens of small canisters throughout the car, indicating obvious planning.
Because the contraband weighed more than 10 kilos, Afghan law mandated that Kazim's case be transferred across the country to the only court in the nation that deals with major narcotics cases, the U.S.-funded Counter-Narcotics Tribunal, in Kabul.
"I don't feel good," he told The Huffington Post from his seat in the courtroom. He looked to the sky and offered a meek smile. "Only God knows what will happen to me today."
Predicting Kazim's fate, however, was much simpler than that. Internal records show that nearly 98 percent of defendants at this court are convicted.
For the next 40 minutes, the judge discussed the facts of the case with the prosecutor, who read out a sheet of charges, and a private defense attorney, who offered a counter-narrative and pleaded for leniency from the court. No evidence was introduced, no witnesses were called, and Kazim, who spent the whole trial sitting shell-shocked, was never invited to speak. Then, the court adjourned.
Fifteen minutes later, word trickled out to the defense lawyer and Kazim's brother, waiting in the hallway: Kazim had been found guilty. He would spend the next 17 years in the feared Pul-e Charkhi prison in eastern Kabul.