TIME Greece

Everything to Know About Greece’s Debt Vote

It could have serious consequences for Europe's future

Q. Why and when are the Greeks voting on this referendum?

A. The Greek government called the referendum because it failed to get acceptable terms for debt relief and further assistance in four months of negotiations with the creditors. It felt it couldn’t agree to the last set of proposals received before the expiry of its bailout, because they couldn’t square it with their election promise to end austerity.

The referendum will be on Sunday, 5th July.

Q. So what are the Greeks actually being asked to vote on?

A. They’re being asked to vote on a set of proposals drafted by IMF, ECB and European Commission officials that were never formally completed or published.

This is the actual ballot. As you can see, the “No” (OXI) option, recommended by the government, is above the “Yes” (NAI) option.

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For the non-Greek readers, (or for those who only know ancient Greek), here’s a translation:

Screen Shot 2015-07-02 at 16.18.50

The two documents referred to can be found here and here (debt sustainability analysis).

Q. What are the key points?

A. The most contentious demand is that Greece squeeze another 1% of GDP in savings out of its battered pension system, specifically by eliminating top-ups that have been desperately needed by poorer pensioners to keep themselves above the breadline in recent years. The other big point is the elimination of VAT exemptions for Greece’s islands. The government argues this threatens the existence of the tourism industry on the islands.

The DSA, meanwhile, almost–but not quite–brings itself to admit that the debt load is unsustainable. If Greece adopts and implements the conditions immediately, it says, then the debt-to-GDP ratio could fall to 124% by 2022 from over 175% right now. That’s the best case scenario, and not one that sits comfortably with the last five years’ experience. It’s also not many people’s idea of sustainability.

Q. What happens if Greece votes ‘Yes’?

A. A ‘Yes’ vote would be the first step towards a third bailout agreement for Greece (the IMF suggested today that Greece will need €50 billion, or $56 billion, in financing to get it through to the end of 2018, as well as a 20-year grace period). The last one expired Tuesday.

Q. Could the Greek government collapse?

A. Probably. It has campaigned for a ‘No’ vote, so the blow to its credibility would be huge. Its electoral mandate–to end austerity while keeping the euro–would be obsolete. Individual ministers have already said they’ll resign in that event. However, the radical left-wing Syriza party is by far the largest in parliament, a large part of its lawmakers won’t sign any new bailout deal, and there is no stable pro-bailout majority without it. That points to new elections. Quite how negotiations could resume, and quite how the banks could reopen, in those circumstances isn’t clear.

Q. If Greece votes ‘No’, what happens?

A. Prime Minister Alexis Tsipras claims that a ‘No’ vote will strengthen the Greeks’ negotiating position by showing the strength of resistance to further austerity. However, the creditors have shown no sign that it would change their position. More likely is that the continued uncertainty will make it impossible for the banks, which have been closed since Monday, to reopen. They would be immediately faced with demands for cash that they can’t possibly meet. In practical terms, the banks couldn’t open again until the bulk of their liabilities–i.e. customer deposits–had been re-denominated in a new Greek currency. This would lead to a large part of the country’s savings being wiped out.

Q. Could this vote result in Greece leaving the Eurozone?

A. Absolutely, because it would be clear that the political will to share a currency with Germany and others was no longer there. How we get from A. to B. is unclear, because there are no precedents and no provisions for it in the E.U.’s treaty. There is a provision for leaving the E.U., but not even Tsipras wants to do that.

Q. Is the bailout deal they’re voting on even still on the table?

A. Not officially, but the creditors will look stupid, merciless and irresponsible if they don’t react to a ‘Yes’ vote with something to relieve the immediate pressure on Greece’s banks and the economy at large, and a large part of the political dynamic in this process is about dodging blame for the whole mess. It’s tempting to think that, once Syriza is out of government, some form of debt restructuring will become politically possible. The creditors would rather eat dirt than reward a party, and individual ministers, that they regard as dangerous charlatans.

Q. What does this mean for the global economy?

A. A ‘Yes’ vote would remove one of the big geopolitical risks that are currently holding back investment in the Eurozone, which would be a clear bonus to global growth (the Eurozone is over two-thirds of the E.U. economy, which about 20% of world GDP).

A ‘No’ vote, could have quite mild consequences if Greece can be kept inside the Eurozone and the ECB douses the flames of market fear with a flood of liquidity. That wouldn’t be as good for the economy, but it would at least contain the damage to financial markets. But a ‘No’ vote that leads to “Grexit” is another matter. Again, one would expect the ECB to throw money at the markets to keep volatility down, but the sight of European integration going into reverse would nix a basic geopolitical assumption of the last 60 years. The resulting political uncertainty could be highly damaging for investment not only in Europe, but also further afield.

 

TIME Economy

U.S. Unemployment Rate Drops to 5.3%

Employers Post Most Job Openings In Four Years In June
Spencer Platt—Getty Images A "now hiring" sign is viewed in the window of a fast food restaurant on August 7, 2012 in New York City.

But labor force participation dropped

The United States labor market put in a tepid performance in June, with the addition of only 223,000 jobs, according to a report released by the Bureau of Labor Statistics on Thursday.

That was short of analysts’ exceptions, which put estimates for June job growth in the 225,000 to 230,000 territory.

According to the household survey, unemployment declined to a seven-year low of 5.3% in June, after inching up to 5.5% in May.

Though the jobs report’s top line numbers were not too bad, a closely-watched sub-indicator didn’t show such good news: hourly wages remained flat in June. That stagnation could delay a long-awaited hike in interest rates. After the May jobs report showed that wages had increased by 8 cents per hour, Federal Reserve chair Janet Yellen said at a press conference June 17 that “wage increases are still running at a low level, but there have been some tentative signs that wage growth is picking up.”

Thursday’s report—released a day early because of the observation of the July 4th holiday on Friday—also showed that labor force participation dipped by 432,000 or 0.3% in June after an increase of similar size in May. The share of Americans participating in the labor market fell back from 62.9% in May to 62.6%–its lowest since 1977.

The number of long-term unemployed who’ve been without a job for 27 weeks or more declined by 381,000 to 2.1 million in June. Over the past 12 months that figure—which currently makes up 25.8% of the unemployed—has decreased by nearly 1 million.

TIME apps

Snapchat Just Added a Bunch of New Features

Yahoo Set To Invest $20 Million In Snapchat
Peter Macdiarmid—Getty Images In this photo illustration the Snapchat app is used on an iPhone on October 6, 2014 in London, England.

Sore thumbs, rejoice

Ephemeral messaging app Snapchat is rolling out a few new features in an effort to make the software easier to use, the company said in a blog post Wednesday.

Most notably, users no longer have to press their thumb down on the screen while viewing pictures or video they’ve received — sore thumbs rejoice! Now, a simple tap on the screen will suffice.

Snapchat is also adding a new way for users to add friends to their contact list with an “Add Nearby” feature that can come in handy in group situations. Snapcodes, the QR codes people can scan with their phones to instantly add the code’s owner to their contacts, are getting two upgrades: they can now be personalized with a selfie “so that it’s easier for friends to recognize you when you add them on Snapchat,” and they can be shared outside the app.

And last but not least, Snapchat is rolling out two-factor authentication for some added security. The company’s been vulnerable to hackers in the past, including in late 2013 when attackers stole and released the usernames and numbers of some 4.6 million Snapchat users.

TIME Companies

Macy’s Is Cutting Ties With Donald Trump

The department store will phase out Trump menswear line

Macy’s said on Wednesday it was phasing out its Donald Trump line of menswear as a result of the Republican presidential candidate’s derogatory comments last week about Mexican immigrants.

It was the second time in less than a week that Trump, a real estate developer cum reality-television star, has seen a major business partner sever ties after comments in which he accused many undocumented Mexicans of committing serious crimes, including murder, rape, and drug dealing. Last week, Comcast’s NBCUniversal canceled plans to air Miss USA and Miss Universe — the network’s joint venture with Trump — while also opting not to invite Trump back for another season of his reality show The Celebrity Apprentice.

“Macy’s is a company that stands for diversity and inclusion,” the department store said. “We are disappointed and distressed by recent remarks about immigrants from Mexico,” Macy’s added, decrying Trump’s depiction of Mexicans, Mexican Americans and Latinos, “who have made so many valuable contributions to the success of our nation.”

Those contributions also presumably include helping Macy’s return to fast growth. The retailer has made it a major priority to reach Latinos, the fast growing major segment of the U.S. population, by allowing its stores in areas like Miami, Los Angeles, New York, Dallas and Houston, among others, tailor their assortment to local tastes. Macy’s reported a slight drop in comparable sales last quarter, making it extremely risky to alienate such a sizable part of its customer base.

Macy’s started selling Trump’s menswear line — including $70 dress shirts, $65 ties, and cuff links and watches — in 2004. Trump, who declared his candidacy for the presidency last week, has also appeared in Macy’s commercials.

In a speech last week, Trump said of Mexican immigrants: “They’re bringing drugs, they’re bringing crime, they’re rapists,” adding: “Some, I assume, are good people.” After Univision cut ties with Trump’s Miss USA Pageant, Trump sued the Spanish-language network for $500 million.

Macy’s came under additional pressure earlier this week when Move.on published a petition, which now has 728,311 signatures, calling on the retailer to dump Trump.

In a statement obtained by PBS, Trump said it was he who had ended the Macy’s relationship, and that in any case, he was uncomfortable with the fact that his line there was made in China.

“Clearly, NBC and Macy’s support illegal immigration,” The Donald said. “Both Macy’s and NBC totally caved at the first sight of potential difficulty with special interest groups.”

This article originally appeared on Fortune.com

TIME facebook

Here’s Why Facebook Just Changed Its Logo

It's a more modern design

Chances are you missed a subtle change to Facebook’s logo Tuesday.

The company has refreshed the logo, which displays the full spelling of the brand. The most conspicuous amendment lies in the shape of the ‘a': it’s now rounded off to a single-story as opposed to its previous double-story version. The letters are also slimmer, and there’s also more white all round.

“We set out to modernize the logo to make it feel more friendly and approachable,” Facebook creative director Josh Higgins told Brand New.

The new logo is also apparently better suited to viewing on mobile devices. “This is actually a huge change and it’s much more than the ‘a,’” Howard Belk, co-chief executive and chief creative officer of branding firm Siegel+Gale, told the Wall Street Journal. “It’s driven by mobile.”

The result of a collaboration between Facebook’s in-house team and Process Type Foundry’s Eric Olson, the new Facebook logo will be showing up across Facebook sites and apps soon. The familiar ‘f’ stand-alone logo on the upper corner of Facebook’s main site – also called a favicon – will stay as it is.

TIME arctic oil exploration

Polar Bears and Walruses Are Spoiling Shell’s Arctic Drilling Plans

A Greenpeace activist covers the logo of
MICHAL CIZEK—AFP/Getty Images A Greenpeace activist covers the logo of the Shell oil company to protest Shell's Arctic oil drilling project in the north of Alaska.

Obama administration cites wildlife protections

Royal Dutch Shell’s Arctic oil exploration plans have been dealt a major blow after the Obama administration cited wildlife protections that prevent the company from drilling two wells into the Chukchi Sea this summer.

The US Fish and Wildlife Service issued a letter spelling out details of a 2013 regulation, highlighting that companies could not place two drilling rigs within 15 miles of each other, Reuters reported. This was put in place to protect animals in the area — walruses, polar bears, and other mammals — that are sensitive to the sound of drilling activity. Walruses, for example, are said to plunge into the sea during drilling, endangering the population.

The letter forces Shell to reevaluate its intention of using two drills off Alaska, which are currently about nine miles apart. The company had plans to invest $1 billion in its Arctic project this year, adding to the $6 billion the company has already spent over the past eight years. Shell told Fuel Fix that the company intends to move ahead with its plan: “We are evaluating the letter of authorization issued today and will continue to pursue the 2015 program,” said Shell spokesman Curtis Smith. “That includes drilling in the Chukchi Sea once open water permits.”

Environmentalists will count this as a small win in their battle to shelf the drilling project. “We think the Department of the Interior needs to rescind its approval because it was predicated on this double-drilling (scenario),” Earthjustice staff attorney Erik Grafe said to Fuel Fix.

TIME Disney

Disney’s New CFO Is Its Highest-ranking Woman Ever

Christine McCarthy EVP, CRE Alliances & TreasurerThe Walt Disney Comapny
Holly Brobst—The Walt Disney Company Christine McCarthy

The company is sure to earn plaudits for the move

When Disney’s Christine McCarthy was promoted this week to chief financial officer, she didn’t just become the company’s first female CFO. She also became its most senior female executive ever, Bloomberg points out.

Disney made the announcement on Wednesday night in a press release, with CEO Bob Iger saying that McCarthy’s “strong leadership and keen financial acumen make her an ideal” CFO. He continued: “She is highly respected in the finance sector, and in this new role she will have even more impact on creating value for Disney shareholders.”

McCarthy has been with the “Mouse House” since 2005, most recently as an executive VP of corporate real estate and alliances, and treasurer. Disney’s statement credits her with having built the company’s finance team. “I am humbled and honored to be entrusted with the role of CFO of this incredibly dynamic company,” McCarthy said in the statement.

This move is a big deal for women in Fortune 500 C-suites, and it’s likely to bring plaudits for Iger and Disney. Only 24 companies on the Fortune 500 have female CEOs. Facebook COO Sheryl Sandberg sits on Disney’s board of directors, but it has never had a female CFO, or COO. Disney’s most profitable arm is ESPN, which — as a 2012 Fortune story noted — “is male, while much of Disney skews female.” More recently, the Frozen movie, with its two female heroines, has been a revenue bonanza for Disney — it was the highest-grossing animated film of all time and a sequel is on the way.

Disney and its chief executive have been the subject of two major Fortune print features in the past three years: the first, in 2012, focused on Iger’s stewardship of the company and how he built it into the powerhouse it is today; the second, which was the cover of our January 2015 issue, gave an inside look at Iger’s obsession with technology and his involvement with the new Star Wars franchise.

McCarthy replaces Jay Rasulo. Disney announced earlier this month that Rasulo would resign the role, but did not reveal his successor at that time.

Bob Iger, meanwhile, is set to retire in 2018, and there has been speculation over who will be Disney’s next chief. Reports have indicated that Tom Staggs, the company’s new COO, is the obvious next in line; Bloomberg wrote that Rasulo’s resignation ended an apparent “competition” between the two. But with McCarthy in as CFO, might Disney end up with a female CEO?

TIME internet cable cuts

Somebody Is Cutting Internet Cables, Causing Massive Outages

530073665
Westend61—Getty Images/Westend61 San Francisco.

At least 11 attacks have happened over the last year

The FBI is investigating a mysterious string of attacks on fiber optic cables in the San Francisco Bay area, including one that severely disrupted Internet service at numerous businesses and residential buildings Tuesday morning.

At least 11 physical attacks on these cables have occurred in at least 10 Bay area cities — such as Fremont, Berkeley, San Jose, and Walnut Creek — over the last year, dating back to at least July 6, 2014, FBI Special Agent Greg Wuthrich told USA Today. “When it affects multiple companies and cities, it does become disturbing,” Wuthrich said. “We definitely need the public’s assistance.”

The latest attack, which happened at 4.20 a.m. PT on Tuesday, was particularly alarming as it appeared to have been a concerted strike on three Internet cables belonging to wholesalers Level 3 and Zayo. The result was a huge outage for those living in and around Sacramento for a good part of the day. According to Wave Broadband, an Internet provider to the area, service was restored by 11.40 p.m. on Tuesday evening.

The vandalism brings up concerns about the security of the country’s existing Internet infrastructure. Cutting these lines requires tools that penetrate a tough outer layer. According to Wuthrich, the acts happened in remote areas unmonitored by cameras, and perhaps by vandals dressed as utility workers who have accessed the underground vaults containing the cables. “Different companies have thousands of these vaults,” Wuthrich said in a separate LA Times report.

The area has been a hotbed for such attacks over recent years. Fiber-optic cables at four California locations were clipped on April 9, 2009, affecting more than 50,000 people in Santa Clara, Santa Cruz and San Benito counties, according to The San Francisco Chronicle. On April 16, 2013, suspects cut cables and opened fire on electrical transformers outside San Jose, causing more than $15 million in damage.

TIME employee benefits

Why Employers Are Offering More Generous Benefit Packages

Doctors Seek Higher Fees From Health Insurers
Adam Berry—Getty Images

Fewer workers are using nap rooms

Employers are offering more generous benefit packages, primarily driven by improvements in health care coverage.

Of the 402 human resource departments that responded to a survey from the Society of Human Resource Management, 35% said they were improving their benefits packages and 58% said they were keep them the same in 2015. Last year, only 28% of respondents said they were improving their packages.

Over the past five years, employers have especially improved mental health coverage, with 91% saying they would improve coverage in 2015, up from 82% in 2011. Over the same period, contraception coverage also improved, with 83% of employers making improvements this year, up from 69%, and the percentage of employers boosting critical illness insurance rising from 22% to 34%. Health savings accounts, which are tax-deductible accounts for medical expenses, have also seen an uptick, with usage rising 8% in the past five years.

As health care expenses rise for the majority of companies, many are offering preventative health benefits in order to tamp down spending in the long run, the study found. Those include health and lifestyle coaching, wellness programs, and smoking cessation programs, among others. Meanwhile, nap rooms, which were considered a preventative measure on the study, logged a 4% decrease in the past five years.

In terms of leave benefits, paid maternity and parental leave has increased in prevalence in the past five years. Flexibility is on the rise too: 56% of employers this year reported allowing workers to telecommute on an ad-hoc basis, compared to 42% in 2011.

According to the study, employers sink much of employee compensation in benefits that workers don’t notice in their paychecks: almost a third of private industry employee compensation came in the form of benefits in 2014. “In an environment with limited compensation growth in most sectors of the U.S. economy, a competitive benefits package can make the difference in attracting top talent to an organization,” the study said.

TIME TiVo

Pretty Much Everybody Is Binge-watching TV

TV Addict
FPG—Getty Images I want my binge TV.

A new TiVo survey says 9 out of 10 people binge on television.

If you’ve ever seen the hours melt away as you watched episode after episode of your favorite (or any) television show . . . Congratulations! You’re easily in the majority.

A survey released on Tuesday by TiVo finds that 9 out of 10 people are engaging in “binge viewing,” which the digital video recording company defines as watching more than three episodes of a particular TV show in one day. According to TiVo, 92% of respondents to the company’s latest Binge Viewing Survey said they have engaged in the act of television gluttony at some point.

Not surprisingly, binge-watching is also less frowned upon, with only 30% of respondents reporting a negative view of binge-viewership (there would appear to be some self-loathers in that bunch) compared to two years ago, when more than half of respondents felt the term “binging” had negative connotations.


Most people said they binge-watch simply because they fall behind on watching new episodes of a certain show, while others said they simply didn’t hear about a new show until several episodes had already aired and they wanted to catch up. But 32% of those surveyed said they intentionally avoided watching certain programs until an entire season, or the whole series, had ended so that they could then binge-watch the show.

Of course, you may want to take the report’s findings with a grain of salt. Most of the survey’s respondents are TiVo subscribers (about 30,000 people out of 42,000 surveyed) and one would imagine that people who are willing to pay for the DVR service are also probably more likely to binge-watch recorded shows.

Those who did participate in the survey, though, mostly seem to be doing their binge-watching in one place: Netflix. TiVo found that 66% of those surveyed use Netflix to binge-watch their favorite programs, with Netflix original series House of Cards and Unbreakable Kimmy Schmidt topping the list of the most-recently binged upon shows. (Does that mean people are still working their way through the new season of Orange is the New Black?) Those results aren’t all that surprising given all of the work Netflix has done to expand its stable of original content as the online streaming platform looks to challenge more traditional media outlets like broadcast and cable television networks.

Despite binge-watching’s march toward ubiquity, there are still some downsides to the voluntary force-feeding of television series. For instance, 31% of respondents to TiVo’s survey said they have lost sleep to their binging habit while another 37% said they have spent an entire weekend binging on a show.

It may be a contradiction, but please do remember to binge in moderation.

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