Athens, Greece (AHN) – A day after winning a confidence vote in the Greek Parliament, the country’s cabinet approved austerity measures for the 2012 to 2015 budgets and laws for the measures’ application.

The measures include $40 billion (EUR 28 billion) of spending cuts, tax increases, fiscal reforms and sale of government assets.

The next step for the financially challenged government is to secure the approval of the parliament where the ruling party of Prime Minister George Papandreou has enough numbers to pass the measures. However, unlike the confidence vote in which all members of the Socialist Party rallied behind the government, some MPs from the party also oppose the austerity measures.

Papandreou will have to convince the public, who have held several protests the past weeks over the belt-tightening measures. Ahead of the Parliament’s approval of the measures, protesters warned Athens of a major day of action when legislature votes on the issue next week.

Parliamentary approval is required by the European Union and the International Monetary Fund for the two bodies to release the second tranche of Greece’s bailout.

Despite Papandreou’s government winning a vote of confidence, Pimco, the world’s largest bond fund, opined that Greece would still likely default on its debts. Pimco Chief Executive Mohamed El-Erian said in a video conference in Taipei that Greece’s way to solve its financial problem is through a default.

The Pimco executive based his bleak outlook on the Greek government failing to enact measures that would enhance the country’s growth and the fact that no single economic indicator has shown strength due to fears that a restructuring would hurt European banks.

El-Erian said the EU and IMF are risking wasting their funds on the ailing Greek economy. But he said a Greek default alone would not trigger another round of global financial crisis because Greece is too small to create an economic impact on the international community.

He said other eurozone members, particularly Ireland, Portugal, Italy and Spain, must also default on their loans to negatively impact the global financial community.

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New York, United States (AHN) – In what could move the world markets, the hackers have reportedly launched cyber attacks on the International Monetary Fund to seek access of confidential financial information of its member countries.

Experts believe that the hackers, if successful, may manipulate this data or use it to profit from bonds and currencies around the world.

IMF officials consider this to be a sophisticated attack, which involves a method called “spear phishing” that forces individual to click on a false web link.

In an exclusive interview to the “Wall Street Journal”, the World Bank’s former cyber-security specialist, Tom Kellermann, said that the hackers had done necessary survey before the actual attack. “This isn’t malware you’ve seen before,” he said. Kellermann added that the hackers have broad access of IMF plans links to bailout to world economies.

The IMF has played a significant role in handing bailouts to financially-hit European economies like Greece, Ireland and Portugal. So it’s systems contain their sensitive information and also of other countries that may be close to financial collapse. It also has details of talks IMF had with various countries’ leaders, while handing out international bailouts.

According to an internal memo issued last week, IMF’s Chief Information Officer had been warned of the attack after reports of suspicious file transfers. A related investigation showed that a desktop computer “had been compromised and used to access some systems”. The memo stated: “At this point, we have no reason to believe that any personal information was sought for fraud purposes.”

The cyber attack came less than a week after CIA Director Leon Panetta warned the U.S. Congress of possibilities of a devastating cyber attack on financial, government and electricity grid systems.

British Dtex Systems’ cyber security specialist and managing director, Mohan Koo, said that the hackers these days carefully plan attacks on large global organizations.

“The IMF attack was clearly designed to infiltrate the organization with the intention of gaining sensitive ‘insider privileged information’,” Koo said.

“Perhaps most frightening of all is the fact that these type of attacks could quite easily be directed towards Critical National Infrastructure organizations, for example energy and water, where the impact of such a breach would have severe, immediate and potentially life-threatening consequences for everyday citizens,” he added.

IMF refused to comment on the attack’s extent and intruders’ goal, but said that it would remain fully functional.

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Washington, DC, United States (NewsBahn) – The International Monetary Fund has been targeted by computer hackers over the past several months, resulting in a significant breach, the New York Times reported Saturday.

“This was a very major breach,” an IMF official told the Times.

The board of directors was informed of the cyberattack on Wednesday, but the bank did not make a public announcement.

IMF computer files contain confidential data about a country’s financial condition, including information about negotiations over financial bailouts for countries such as Portugal and Greece. Such information is highly sensitive.

IMF spokesman David Hawley told the Times that “We are investigating an incident, and the fund is fully functional.” However, he declined to discuss the scope or nature of the attack.

As a safeguard, the World Bank cut the link it uses to share information with the IMF.

The goal of the attack appeared to be to plant software that would give the attacker a “digital insider presence.”

In the last three months, major national and international corporations have been hit by cyberattacks, including defense contractor Lockheed Martin, Google, Citigroup Inc., and Sony.

In congressional confirmation hearings last week, CIA Director Leon Panetta said “the next Pearl Harbor” could be a cyberattack that cripples the nation’s infrastructure.

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Washington, DC, United States (AHN) – Europeans want to keep their hold on the post of managing director at the International Monetary Fund, which was recently vacated by Dominique Strauss-Kahn after he was charged with sexual assault by a hotel maid.

Names of potential replacements began surfacing over the weekend. British officials supported the replacement of Strauss-Kahn by French Finance Minister Christine Lagarde. Not to be outdone, Mexican officials backed Mexican Central Bank Governor Agustin Carstens for the same position.

British Chancellor George Osborne said Lagarde should be chosen by the IMF board not because she is a European and a French national, but because she is qualified. Osborne said Lagarde displayed real international leadership when she served as chair of the G20 finance ministers this year.

Osborne said Lagarde is the best person to become IMF’s next managing director. The chancellor added that the French finance minister is an advocate of tough austerity measures for nations facing financial problems.

Were Lagarde to win the appointment, she would be the fund’s first female head in six decades.

Mexican Finance Minister Ernesto Cordero, who cited the same argument used by Osborne that Strauss-Kahn’s successor should be selected based on merit and not geography, pushed Carstens for the top IMF post.

Australia, China and South Africa have joined the growing global call for an end to the decades-old gentleman’s agreement that a European should hold the top IMF post and an American head the World Bank. They pushed for an open and transparent selection process to maintain trust, credibility and legitimacy in the fund, whose reputation has been sullied by Strauss-Kahn’s arrest.

The appointment of an IMF managing director is expected to be tackled in the G8 meeting this week. The IMF said it will complete the selection to fill the position by June 30.

Besides Carstens, other candidates mentioned include:

• Montek Singh Ahluwalia – deputy chairman of the Planning Commission in India
• Trevor Manuel – former Finance Minister of South Africa
• Leszek Balcerowicz – who helped oversee Poland’s transition to a free market economy from communism.

Former Turkish Finance Minister Kemal Dervis, who was reportedly on the short list of candidates, said Friday he is not in the running to replace Strauss-Kahn.

Strauss-Kahn is now out of jail on a $1 million cash bond, but is under house arrest in New York.

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Ottawa, Ontario, Canada (AHN) – To curb the alarming rise in Canadian household debt, federal Finance Minister Jim Flaherty urged Canadian banks Thursday to adopt prudent lending policies. He issued the proposal after Statistics Canada found that household debt reached a record-high level in the third quarter of 2010, outpacing even the debts of American households.

The International Monetary Fund has forecast a muted growth for Canada next year largely on account of the growing household debt.

Among the measures that banks could take are to cut the maximum amortization period for mortgages to 25 from the current 35 years, or to institute tougher criteria for lenders to be eligible for government-backed mortgage insurance. The insurance is usually a requirement to secure a bank housing loan.

Two large Canadian banks had earlier asked Ottawa to initiate measures to curb consumer access to bank loans. Flaherty reminded Canadian financial institutions that prudent lending is one of their hallmarks, which is the reason why no Canadian banks collapsed or required government bailout during the recent global financial crisis.

Flaherty also disclosed that the 2011 federal budget will not have any major new spending or new cuts. He said the restraint measures, worth $17.6 billion over five years, placed by the Tory-led government are sufficient to reduce Ottawa’s budget deficit according to timetable.

By not introducing major cuts and spending, the Conservatives would give the political opposition little room to push for a no-confidence vote after Ottawa submits its 2011 budget to the Parliament for approval. A no-confidence vote could trigger a spring election.

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Washington, DC, United States (AHN) – The International Monetary Fund on Wednesday issued a muted growth forecast for Canada for 2011. The multilateral agency gave such an outlook because of the high level of household debt among Canadian households and an expected rise in health care spending.

The IMF said Canada’s housing markets are cooling and the fiscal stimulus is petering. Statistics Canada confirmed last week that the ratio of household debt to disposable income topped 148.1 percent for the third quarter, which even exceeded the ratio in the U.S.

Economists observed that while Canada has the second highest totals on economic performance indicators among the Group of Seven nations, next to Germany, it is still the weakest result for Ottawa since 1994. They pointed to the widening current account deficit of Canada as the country’s weakest spot vis-à-vis Germany.

The IMF also forecast a 2.3 percent gross domestic product expansion for Canada in 2011, which would be less than the expected 3 percent GDP growth rate for this year.

IMF Mission Chief to Canada Charles Kramer agreed with the manner that the Bank of Canada and Finance Department handled the financial crisis, particularly keeping interest rates at a record-low level, extending the deadline to spend the stimulus funds and resisting hiking payroll taxes.

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