Sarkozy to ’speculators’: Lay off Greece

PARIS — Speculators beware: The euro zone’s biggest powers will back Greece through the debt crisis that has jeopardized all 16 nations in the common currency, French President Nicolas Sarkozy said Sunday.

Greek Prime Minister George Papandreou, in Paris as part of a four-city tour seeking firmer EU and U.S. support for new austerity measures to rein in its massive budget gap, received from Sarkozy the most outspoken support for his plans yet.

The French leader, coveting the chance to play the statesman with regional French elections to begin next Sunday, issued a warning to traders who would bet against the euro zone’s willingness to defend a member state. And in a show of high-stakes poker with speculators, he purposely didn’t detail what measures the bloc might take.

Papandreou’s government has committed to a severe austerity plan to reduce Greece’s massive 12.7 percent budget deficit, and has warned that going to the International Monetary Fund is an option if a European solution is not found.

“The Greek government … took the measures asked of it. Euro zone states must now be ready to take theirs,” Sarkozy told a news conference alongside Papandreou at the French presidential palace.

“Of course, the future of Greece is in question, but it’s also that of Europe being played out,” Sarkozy said. “Europeans have created a common currency — all the countries that share this currency must show solidarity.”

Sarkozy, who along with German Chancellor Angela Merkel is seeking to calm markets and bring down Greece’s high borrowing costs, didn’t spell out any specific ideas.

“Concrete, precise methods exist — ones we don’t need to communicate about tonight, certainly not,” he said. “But they will allow us — when the time comes — to show that Greece isn’t just supported politically but supported in all the aspects of its eventual requests.”

French Finance Minister Christine Lagarde is working with her European counterparts, the European Central Bank and the EU’s executive Commission “on a certain number of precise measures,” Sarkozy said.

“If Greece needs them (the measures), we’ll be there,” he said. “Speculators … must know that ’solidarity’ means something.”

France, Germany and Greece will take a common initiative to fight speculation, and the euro zone’s two biggest economic powers “have decided to do what’s necessary so that Greece is not isolated,” Sarkozy said.

Papandreou insisted he’s not looking for money, but the ability to raise money in the debt market on the same interest-rate terms as those in other European countries. Because Greece’s national debt is considered more risky in the market, Athens must pay high interest rates to lenders — and that in turn hampers its ability to pay down its debt.

“What we ask is for an intervention so we can borrow,” he said, without specifying.

Papandreou also suggested the euro-zone should consider creating a “European Monetary Fund” that could support a member in times of crisis, though he acknowledged that such a move would require changing EU treaties.

After the news conference with Sarkozy, Papandreou told reporters that Germany, France, Greece and the informal eurogroup would in coming days detail how they plan to deal with credit default swaps on sovereign debt — the forms of insurance against a borrower defaulting on its obligations.

The need for Greece to seek help from the IMF has now receded, Papandreou said, but added that the option was still open. He said talks are under way in the EU toward finding a mechanism that would allow Greece to reduce its borrowing costs, though he did not specify.

Papandreou’s stop in Paris was the third of a four-stop swing aimed to drum up support for measures announced last week that cut civil servants’ pay, froze pensions and hiked fuel, alcohol, sales and other taxes.

He left Paris Sunday for Washington, where he was scheduled to meet Monday with Secretary of State Hillary Clinton and President Barack Obama on Tuesday. On Friday, he visited Luxembourg and Berlin.

Papandreou’s Socialist party came to power in October and shocked Europe by quickly revising the government’s budget deficit to 12.7 percent of gross domestic product for 2009 from below 4 percent earlier that year.

“The situation we inherited was worse than our worst nightmare,” Papandreou said in a statement to a Greek newspaper.

Sarkozy is seen as far more sympathetic to Greece’s problems than Merkel. The French leader spoke for about 45 minutes Sunday with Merkel before meeting with Papandreou.

The austerity plan, approved by Greece’s Parliament on Friday, has sparked strikes and violent demonstrations. Protesters clashed with riot police in central Athens and a new general strike has been called for Thursday, on top of another planned for March 16.

Location: Gatundu, Kenya

My name is Maia Pelleg and I'm a Kiva Fellow who is posted in Kenya with KADET (The Kenya Agency for the Development of Enterprise and Technology). KADET recently became an active Kiva partner so much of my work has involved helping them to implement their Kiva-related field operations and conducting Kiva trainings and orientation sessions for branch personnel. I've met dozens of KADET staff members, and my motivation to continue to impact communities through microfinance has been fueled by their passion, hard work and dedication. I've also had the opportunity to meet a number of KADET clients at weekly borrower groups and in one-on-one interactions.

I met Hilderh Akinyi Okwaro (http://www.kiva.org/lend/129628) in late November as I accompanied a credit officer, Danielton, in the field. Hilderh’s shop is in on a busy street just outside the town center of Kisumu. Kisumu, Kenya’s third largest city, is set on the serene shore of Lake Victoria and offers a distinct culture from the bustling capital city of Nairobi. Kisumu’s atmosphere is tranquil, sultry, and relaxed. The layout of the town turns its back on the water, focusing on a commercial center and land that links to the rest of Kenya, rather than the lake that connects Kenya to Uganda and Tanzania.

Danielton and I arrive at Mama Hilderh’s shop on boda-bodas, bicycle taxis consisting of a bicycle and a padded seat on the back. Droplets of sweat trickle down my driver’s neck; the humidity is relentless. I climb off the back of the bike and walk towards Hilderh’s shop. It’s a tin rectangular structure with large boxy holes excised from the metal for windows. The wooden door looks like one that would be placed on a barn, although instead of red it’s painted sky blue. The outside is painted blue as well, with a black trim along the bottom. The corrugated tin roof leaves a ripple effect above the entryway. A white sign with black and red writing announces Hilderh’s business: Kanyaish Tailoring & Training Center.

We walk through the doorway to find Hilderh sitting behind a sewing machine, a stretch of brown and yellow fabric inside the grips of the needle. She wears a floral tunic over a long black skirt, a measuring tape draped over her neck, and clips of fabric scattered in her hair and around her chair. Vibrant cloth of greens, reds, blues, purples and yellows line the wall behind her. On the wall opposite the windows are posters of women wearing beautiful brightly patterned Kangas. Their dresses and blouses are intended as model designs from which customers can choose.

After introductions and pleasantries are exchanged, I ask Hilderh about her loan. This is her third loan from KADET, and Hilderh tells me she spent the 43,000 Kenyan shillings (~$575) on two second-hand sewing machines for her students, cloth and other materials for dress-making, and school fees for her children.

I ask Hilderh what motivated her to become a tailor and to start her own business. She tells me: “First I was just a housewife. I was not staying with my husband properly. We were having problems. That’s why I decided to learn something. I wanted to be financially independent. So in 2002 I decided to train as a tailor and then in 2003 I took the certification test and I became a full tailor.”

At 45 years old, Hilderh now supports her husband (who lives separately upcountry) and her three children. She credits KADET with her success: “I was not having enough money... I had too many customers and not enough material to satisfy their needs. When KADET came to talk to our group we found it was good. The capital I’ve accessed through KADET has allowed me to grow my business. Now I can say my business has grown. Now it is famous. If you ask where is Hilderh, a tailor, everyone will tell you I am here.”

Besides selling clothing, Hilderh teaches students. I turn my attention to the opposite side of the room, where seven girls sit on benches, three working on sewing machines and the others using paper bags for material as they create dresses and blouses by hand. Hilderh introduces me to these girls. Each one is at least 18 years old. Most pay 12,000 KES (~$160) a year for Hilderh’s instruction and guidance. Three are orphans that Hilderh teaches and mentors for free.

I have met many borrowers working as tailors, but this is the first time I’ve seen one extending his or her knowledge to others in the community. I ask Hilderh why she decided to open a training center for young women. She tells me: “My youngest child was sponsored by World Vision. Someone in America donated money to help him eat and to pay for his needs when I couldn’t. An organization that takes street girls and street boys and trains them came to me and asked if I would assist in training the girls. I agreed. I train them for one year. Then they go for their test and get a certificate. I want to help them. I’ve received help and now I want to share my skills with others.”

Hilderh designed the training program herself. The girls are required to come to Hilderh’s shop five days a week from 8am – 5pm. There are five elements to the curriculum:

1. How to behave as a tailor. (A lesson on respect.)

2. How to talk to customers

3. How to manage a workshop.

4. How to manage money and to save.

5. How to create (pattern drafting, cutting fabric, sewing, and ironing).

One of Hilderh’s dreams is to expand her business so that she can provide opportunity for more members of her community. She has already hired two of her former students as employees. Not only does she want to be able to employ more, but she also hopes to be able to train more “street girls for no fees”.

Hilderh says she has two other dreams. The first is for her children to complete college and to find employment so that they can sustain themselves. The second is to own her own home. Currently Hilderh lives with her four children in a rental home with no running water. “One day,” Hilderh says, “we won’t pay rent. We will have our own property.”

Thank you for supporting Kiva borrowers like Hilderh! To continue to support KADET's clients, please see their currently fundraising loans: http://www.kiva.org/lend?partner_id=133&status=fundRaising&sortBy=New+to+Old

Best regards,

Maia