DAVOS WATCH: Hollande, King Abdullah, Draghi, Greek vote

AP News
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Posted: Jan 23, 2015 2:38 PM
DAVOS WATCH: Hollande, King Abdullah, Draghi, Greek vote

DAVOS, Switzerland (AP) — The World Economic Forum held in the Swiss ski resort of Davos has the official goal of "improving the state of the world." In practice, it's a massive networking event that brings together 2,500 heads of state, business leaders, philanthropists and artists.

Here are some glimpses of what's happening and being discussed Friday at Davos:

HOLLANDE TOPS BILL

Each year's forum is shaped by outside events — and the recent terror attacks in Paris gave French President Francois Hollande headline status at Davos.

Hollande linked the forum's bread-and-butter economic themes to the need for greater vigilance and security after the terror attacks earlier this month in Paris that left 20 people dead, including three gunmen.

The French president urged his audience to combat tax havens and money laundering, and to ensure that potential sources of terrorist financing are "dried up."

"So you, the lifeblood of the economic world, the heads of the major corporations — I would ask you not only to be watchful, I would ask you to get involved," Hollande said.

—By John Heilprin, , Twitter: http://www.twitter.com/johnheilprin

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GREECE'S BIG DAY

Two days ahead of a Greek election in which the left-wing Syriza party is leading, German Finance Minister Wolfgang Schaeuble angrily dismissed suggestions that his country has not done enough to help Greece over the past few crisis years.

Schaeuble told a panel in Davos that Berlin did "whatever could be done in difficult times again and again" to help beleaguered Greek governments deal with the economic problems they faced in order to remain a member of the eurozone, whether it was in lending billions to Athens or getting the International Monetary Fund to help out too.

While insisting that Berlin has not modelled any Greek exit from the 19-country eurozone, Schaeuble did warn that any incoming Greek government would not be eligible for the European Central Bank's new stimulus program if it ditches the reform program required for the bailout cash. The ECB announced a 1.1 trillion-euro (about $1.25 trillion) bond-buying program Thursday to help boost the ailing 19-country eurozone economy. Greece can join in under certain conditions.

—By Pan Pylas, Twitter: http://www.twitter.com/panpylas

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SOROS WARNING

George Soros, the legendary financier, has warned that the European Central Bank's newly announced government bond-buying program could create an asset bubble that will further widen the gap between rich and poor across the 19-country eurozone.

At a World Economic Forum panel, Soros said he remains a critic of Germany's stance in particular. Germany, the biggest economy in the eurozone, has been a cheerleader for the austerity program that many countries have had to pursue in return for bailout cash. Soros reckons the eurozone would do better if Germany loosened the purse strings a bit, both for itself and elsewhere in the eurozone.

Soros said his main concern over the ECB's a 1.1 trillion-euro (about $1.25 trillion) bond-buying program is that will benefit the owners of assets as the money generated from the stimulus flows through the financial system. That, he warned, "will have political consequences....We need a better balance between fiscal policy and monetary policy."

Soros also foresaw financial instability that can create turmoil.

—By Pan Pylas, Twitter: http://www.twitter.com/panpylas

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RUSSIAN FREEDOM

It could be decades before Russians see Western-style democracy, according to the country's deputy prime minister, Igor Shuvalov.

In a heated debate over the merits of the 1991 collapse of the Soviet Union, which created greater freedoms but also a period of economic chaos, Shuvalov said it is still too early for Western-style freedoms in Russia.

"Freedom and liberty should go hand in hand with cultural development," he said. He argued that complete freedom of the press requires people to exercise personal control to avoid mudslinging and defamation.

"Do you think we don't want Western democracy?" he said. "Of course we'd love it, but it can't happen overnight. It happens through decades of hard work."

-By Carlo Piovano, Twitter: http://www.twitter.com/cpiovano

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CHEVRON SLAMS MOCK AWARD

Environmental group Greenpeace Switzerland and the Berne Declaration, which campaigns for responsible business, gave their "Lifetime Award" for the most irresponsible corporation in the past ten years to oil giant Chevron. The groups claim Chevron was responsible for one of the world's worst-ever environmental disasters in the Ecuador rainforest. Chevron saw off competition from, among others, commodities trader Glencore and Walmart in the online poll that the organizers claim garnered 64,000 votes.

Paul Paz from the U.S.-based nominating organization, Amazon Watch, accepted the award on behalf of Chevron and slammed the company for refusing to comply with a 2013 Ecuadorian verdict that ordered it to pay $9.5 billion in damages and cleanup costs for oil spillages in the 1970s and 1980s.

Justin Higgs, a spokesman for Chevron, said the award was "nothing more than a stunt to distract attention from the fact that the lawsuit against Chevron in Ecuador has been proven to be meritless and the product of unprecedented fraud." He pointed to the fact that a U.S. federal court found that the lawyers behind the case committed "mail and wire fraud, money laundering, witness tampering and obstruction of justice."

The organizers won't be presenting another award as they think the World Economic Forum has lost its symbolic power.

—By Pan Pylas, Twitter: http://www.twitter.com/panpylas

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SAUDI KING MOURNED

The death of Saudi Arabia's King Abdullah was one of the main talking points, with a host of participants paying tribute. Among them were Shimon Peres, the former president of Israel, who said Abdullah's death represented a "real loss for peace in the Middle East."

Mounir Fakhry Abdel Nour, the Egyptian trade minister, said Abdullah did a lot to unify the Arabs but that Saudi Arabia was "in good hands" with his successor, King Salman bin Abdul-Aziz Al Saud.

Pierre Moscovici, the European Union's Commissioner for Economic and Financial Affairs, described Abdullah as "a personality of peace and strong leadership." Canadian Foreign Minister John Baird said Salman will "be a strong leader not just for the kingdom but for the region."

Meanwhile, King Abdullah II of Jordan canceled his appearance at a session on advancing Middle East security and peace.

—By Pan Pylas, Twitter: http://www.twitter.com/panpylas

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DRAGHI PLAUDITS

Due to the European Central Bank's new bond-buying program, ECB chief Mario Draghi is being hailed in stock markets around the world. On Friday, European markets added to the stellar gains they enjoyed in the wake of the announcement Thursday.

The ECB president also garnered the support of two leading international economic policymakers at the World Economic Forum.

Christine Lagarde, the International Monetary Fund's managing director, told The Associated Press that the stimulus announcement was "well done, well-communicated" and laid out her hope it will be effective.

Meanwhile, Draghi's counterpart at the Bank of England, Mark Carney, said the move was a "welcome step" and "absolutely necessary to preserve the prospects of medium-term prosperity in Europe." Although Carney cautioned that the measure was not enough to shake the 19-country eurozone economy out of its slumber, he said it creates some of the "necessary conditions."

—By Pan Pylas, , Twitter: http://www.twitter.com/panpylas