Ranks of the rich swelling - report
The number of millionaires in the world jumped 9.2% to 12 million last year, in part because of simultaneous strength in the stock, bond and real estate markets, according to a study of the high-net-worth population.
The survey, released on Tuesday by RBC Wealth Management and Capgemini Financial Services, tracked high-net-worth people, whom it defined as those with more than $1m that they can invest.
North America was home to the highest number of millionaires - 3.7m. But the study projected that the Asia-Pacific region, which held the top spot in 2011, would reclaim it.
Part of the strength in North America came from rising equities markets - the Standard & Poor's 500 stock index gained 13% in 2012. North American investors put 37% of their money into stocks, a higher proportion than people in the Asia-Pacific region, where investors tend to be more conservative, the study said.
The amount of wealth held by the world's richest people also increased substantially, rising 10% to $46.2 trillion, well above the pre-economic crisis level of $40.7 trillion in 2007.
The study forecast high-net-worth wealth would increase 6.5% annually to $55.8 trillion by 2015, mainly because of growth in the Asia-Pacific region.
The survey found that 53% of wealthy US individuals would prefer to have a single firm handle their financial accounts.
However, a 2011 study from Boston-based research firm Aite Group showed more than half of high-net worth investors held their money in four or more financial institutions.
"Having one super-adviser would be preferred, but finding someone who can do that well is hard," said Aite analyst Sophie Schmitt.
The RBC-Capgemini survey polled more than 4 000 high-net-worth people globally in February and March, including 736 Americans.
Switzerland buries US tax law
Swiss lawmakers dealt a death blow on Wednesday to a draft law which aimed to protect the country's banks from criminal charges in the United States for helping wealthy Americans evade tax.
The Swiss government has warned that the bill's failure could prompt impatient US prosecutors to indict banks, though it could still use an executive order to allow them to hand over data to try to avoid criminal charges.
The bill, which lawmakers from both the centre-left and right opposed for widely differing reasons, was designed to let banks sidestep Swiss secrecy laws by disclosing their US dealings so they could avoid prosecution. With or without the law, they will still seek out of court settlements with US authorities that could cost the industry as much as $10bn.
Parliament's lower house voted 123 to 63 against debating the legislation, effectively killing the law, even though the upper house had confirmed its support earlier in the day.
Switzerland's banking lobby expressed regret about the vote and urged the government to do everything possible to help banks reach settlements under a US Department of Justice programme.
"Switzerland must not take the risk of a further indictment of a bank lightly," the Swiss Bankers Association said in a statement.
Finance Minister Eveline Widmer-Schlumpf said the government would do everything in its power but its options were limited without the bill.
The protection of client information has helped to make Switzerland the world's biggest offshore financial centre, with $2 trillion in assets. But the haven has come under fire as other countries have tried to plug budget deficits by clamping down on tax evasion, with authorities investigating Swiss banks in Germany and France as well as the United States.
Experts were divided over the threat posed to Swiss banks by parliament's decision to oppose the law.
"The Americans will get the data they want. They will not stop until they have it," said Martin Naville, head of the Swiss-American Chamber of Commerce. "It is taxing the patience of our American friends. When their patience is over, there will be indictments, perhaps just one or two, but it will be more than enough to create chaos."
No one was immediately available for comment at the US Department of Justice.
Wegelin precedent
Earlier this year a U.S. indictment felled Switzerland's oldest private bank, Wegelin. It paid a $58m fine and closed its doors for good after pleading guilty to helping wealthy Americans evade taxes through secret accounts.
Shares in Basler Kantonalbank, one of the banks under US investigation seen at immediate risk, closed down 2.5%, compared with broadly positive Swiss stocks.
But Peter V. Kunz, professor for business law at Berne University, was more sanguine.
"I think bankers will be indicted, but I don't really see banks getting indicted... as there may not be enough evidence to accuse them of systematically violating US law," he said.
"Wegelin was indicted and settled but in my view this was a singular case. I don't see it as a model case for Swiss banks."
The government's attempt to fast-track the legislation through parliament to meet a US ultimatum angered many lawmakers in the fiercely independent country.
Right-wing lawmakers opposed the bill on the grounds that it could set a precedent that might prompt other countries to seek concessions from Switzerland. The centre-left also rejected it for different reasons, believing Swiss banks should be forced to face the music for aiding tax evasion.
Lawmakers from both the lower and upper house endorsed a statement saying they supported a solution to the long-running tax dispute despite the defeat, and called on the government to allow banks to cooperate under existing laws.
Protracted negotiations
Switzerland's biggest bank, UBS, was forced to pay a $780m fine in 2009 and deliver the names of more than 4,000 clients to avoid indictment, giving the US authorities information that allowed them to pursue other banks.
Since then, the government has tried to reach a settlement for the whole financial industry, but has been hamstrung by Swiss secrecy laws and bickering among banks over who should pay the heavy fines.
US authorities have more than a dozen banks under formal investigation, including Credit Suisse, Julius Baer, the Swiss arm of Britain's HSBC, privately held Pictet in Geneva and local government-backed Zuercher Kantonalbank and Basler Kantonalbank.
UK backs jail time for reckless bankers
Bankers who are reckless with customers' or taxpayers' money could face criminal charges and have bonuses and pensions clawed back, according to proposals backed by Britain's prime minister on Wednesday.
Many Britons blame bankers' risk-taking for the 2008 financial crisis and subsequent economic slump and were furious when the former boss of RBS left the bank with a pension of almost £17m even after a state rescue.
He later agreed to a cut and was stripped of his knighthood but it was one in a series of banking scandals that increased pressure on Prime Minister David Cameron to get tougher on a sector contributing billions of pounds to the British economy.
The parliamentary commission on banking standards he set up last year after Barclays was fined for manipulating interest rate benchmarks said on Wednesday the law should be changed so that bankers found guilty of "reckless misconduct in the management of a bank" could face jail.
The UK Treasury said the new rules could be in place before the end of 2015 but lawyers said it would be hard to prove when a banker had taken too much risk or simply made a mistake.
Asked in parliament whether he supported the report's recommendations on criminal penalties and pay, Cameron said: "Penalising, including criminal penalties ... bankers who behave irresponsibly, I say yes."
Lawyers doubted that new laws would be effective.
"There is likely to be a considerable burden of proof - merely miscalculating or being negligent in an assessment of risk most likely won't be enough," said Michael Isaacs, head of banking litigation at law firm Pinsent Masons.
The commission also recommended a new pay code to better balance risk and reward, with bonuses deferred for up to ten years with the aim of preventing bankers taking risks for short term reward, one of the factors blamed for the crisis.
It also proposed that the UK financial regulator would be granted a new power enabling it to cancel all bonuses and pension rights not yet paid out to senior executives in the event of their banks needing taxpayer support.
Watered down
Banking industry sources said banks were likely to accept many of the proposals in principle, including the threat of criminal sanctions, but will lobby for some to be watered down, including the 10-year deferral on bonuses.
"The commission's conclusions contain many constructive proposals to help fix the issues which have afflicted the industry, most importantly in the emphasis on personal responsibility and accountability," said HSBC Chairman Douglas Flint.
The cross-party commission, which includes former British finance minister Nigel Lawson and Justin Welby, head of the Anglican church, recommended senior bankers are held personally responsible and regulators granted greater powers.
Commission member Pat McFadden said it would be "pressing the government very hard in the coming weeks" to make sure the proposals are implemented. The government has set itself a four week deadline to give a formal response.
"I think all of us who were engaged in this process over the last year very much hope this is not a report which is going to gather dust," he told Reuters.
The British Bankers Association, a lobby group, said it would work with government and regulators to take forward proposals from what it described as the "most significant report into banking for a generation".
Unpopular
Bankers are deeply unpopular in Britain where the economy has narrowly avoided a triple-dip recession and is expected to show tepid growth at best through next year.
"I think jail sentences would be suitable," Ben Stewart, a 34-year-old cabinet maker said in Whitechapel, not far from the City of London, the traditional financial heartland.
"It's fraud a lot of what they've done. Even if it's not legally fraud, I think by most people's moral compass, they'd find it quite distasteful."
The commission recommended the industry adopt two new registers for senior bankers and other employees to make sure the most important responsibilities within banks were assigned to specific individuals.
The 'Senior Persons Regime' would enable those responsible for failures to be identified more easily and provide a stronger basis for action to be taken against them, the report said.
The Financial Conduct Authority, the financial services industry watchdog which took over regulation of banks in April, said it was "learning from the regulatory mistakes of the past".
The commission also urged the government to immediately consider a range of strategies for RBS, which is 81% state-owned, including a possible break-up.
Some commission members, including Lawson, have advocated hiving off RBS's toxic loans into a 'bad bank' leaving the remaining 'good bank' better able to lend to British businesses and households. But Finance Minister George Osborne said such a move would be complicated, time consuming and costly.
The report said the government had interfered in the running of RBS and Lloyds Banking Group, in which it holds a 39% stake, and said RBS was being held back by having the government as its main shareholder.
The level of the government's influence over RBS has come under scrutiny since chief executive Stephen Hester was ousted last week with the Treasury's approval.
Osborne is set to lay out strategies for returning RBS and Lloyds Banking Group to full private ownership in his annual speech to financiers in the City of London on Wednesday.
Big expectations for Obama Berlin speech
Five years and 50 years. As President Barack
Obama revisits Berlin, he can't escape those anniversaries and the inevitable comparisons to
history and personal achievement.
His 26-hour whirlwind visit to the German capital caps three days of international summitry for the president and marks his return to a place where he once summoned a throng of 200 000 to share his ambitious vision for American leadership.
That was 2008, when Obama was running for president and those who supported him at home and abroad saw the young mixed-race American as a unifying and transformational figure who signified hope and change.
Five years later, Obama comes to deliver a highly anticipated speech to a country that's a bit more sober about his aspirations and the extent of his successes, yet still eager to receive his attention at a time that many here feel that Europe, and Germany in particular, are no longer US priorities. A Pew Research Centre poll of Germans found that while their views of the US have slipped since Obama's first year in office, he has managed to retain his popularity, with 88% of those surveyed approving of his foreign policies.
Obama also has an arc of history to fulfil.
Fifty years ago next week, President John F Kennedy addressed a crowd of 450 000 in that then-divided city to denounce the Soviet bloc and famously declare "Ich bin ein Berliner", German for "I am a Berliner". Since then, presidents from Ronald Reagan to Bill Clinton have used Berlin speeches to articulate broad themes about freedom and international alliances.
Need for activism
Obama, fresh from a two-day summit of the Group of Eight industrial economies, will speak at the Brandenburg Gate, a symbol of Germany's division and later reunification. It is a venue that German Chancellor Angela Merkel denied him in 2008, saying only sitting presidents were granted such an honour.
The past context and the weight of it are not lost on the White House.
"This is a place where US presidents have gone to talk about the role of the free world essentially," said Obama's deputy national security adviser, Ben Rhodes. "He is seeking to summon the energy and legacy of what's been done in the past and apply it to the issues that we face today."
Rhodes said Obama will make the case that even though the Berlin Wall came down 23 years ago and the threat of nuclear war has dissipated, the type of activism apparent during the Cold War needs to be applied to such current challenges as climate change, counterterrorism and the push for democratic values beyond the United States and Europe.
A senior administration official said Obama will also renew his call to reduce the world's nuclear stockpiles, including a proposed one-third reduction in US and Russian arsenals. He is not expected to outline a timeline for this renewed push. The official insisted on anonymity in order to preview the issue before the president's speech.
Obama will also hold a joint news conference with Merkel.
Merkel surprised by scope of spying
The visit was attracting widespread attention in Germany. People waved and snapped photos as Obama sped by after his arrival and a thick cluster awaited the motorcade as it passed the Brandenburg Gate. An evening news show in Berlin devoted itself to the president's visit, highlighting "Das Biest", or "The Beast", as the president's armoured limousine is called.
There have been a few small protests, including one directed against the National Security Agency's surveillance of foreign communications, where about 50 people waved placards taunting, "Yes, we scan."
Merkel has said she was surprised at the scope of the spying that was revealed and said the US must clarify what information is monitored. But she also said US intelligence was key to foiling a large-scale terror plot and acknowledged her country is "dependent" on co-operating with American spy services.
For Merkel, the visit presents an opportunity to bolster her domestic standing ahead of a general election in September.
The US and the Germans have clashed on economic issues, with Obama pressing for Europe to prime the economy with government stimulus measures, while Merkel has insisted on pressing debt-ridden countries to stabilise their fiscal situations first.
But the two sides have found common ground on a trans-Atlantic trade pact between the European Union and the US At the just-completed G8 summit, the leaders agreed to hold the first talks next month in the US.
His 26-hour whirlwind visit to the German capital caps three days of international summitry for the president and marks his return to a place where he once summoned a throng of 200 000 to share his ambitious vision for American leadership.
That was 2008, when Obama was running for president and those who supported him at home and abroad saw the young mixed-race American as a unifying and transformational figure who signified hope and change.
Five years later, Obama comes to deliver a highly anticipated speech to a country that's a bit more sober about his aspirations and the extent of his successes, yet still eager to receive his attention at a time that many here feel that Europe, and Germany in particular, are no longer US priorities. A Pew Research Centre poll of Germans found that while their views of the US have slipped since Obama's first year in office, he has managed to retain his popularity, with 88% of those surveyed approving of his foreign policies.
Obama also has an arc of history to fulfil.
Fifty years ago next week, President John F Kennedy addressed a crowd of 450 000 in that then-divided city to denounce the Soviet bloc and famously declare "Ich bin ein Berliner", German for "I am a Berliner". Since then, presidents from Ronald Reagan to Bill Clinton have used Berlin speeches to articulate broad themes about freedom and international alliances.
Need for activism
Obama, fresh from a two-day summit of the Group of Eight industrial economies, will speak at the Brandenburg Gate, a symbol of Germany's division and later reunification. It is a venue that German Chancellor Angela Merkel denied him in 2008, saying only sitting presidents were granted such an honour.
The past context and the weight of it are not lost on the White House.
"This is a place where US presidents have gone to talk about the role of the free world essentially," said Obama's deputy national security adviser, Ben Rhodes. "He is seeking to summon the energy and legacy of what's been done in the past and apply it to the issues that we face today."
Rhodes said Obama will make the case that even though the Berlin Wall came down 23 years ago and the threat of nuclear war has dissipated, the type of activism apparent during the Cold War needs to be applied to such current challenges as climate change, counterterrorism and the push for democratic values beyond the United States and Europe.
A senior administration official said Obama will also renew his call to reduce the world's nuclear stockpiles, including a proposed one-third reduction in US and Russian arsenals. He is not expected to outline a timeline for this renewed push. The official insisted on anonymity in order to preview the issue before the president's speech.
Obama will also hold a joint news conference with Merkel.
Merkel surprised by scope of spying
The visit was attracting widespread attention in Germany. People waved and snapped photos as Obama sped by after his arrival and a thick cluster awaited the motorcade as it passed the Brandenburg Gate. An evening news show in Berlin devoted itself to the president's visit, highlighting "Das Biest", or "The Beast", as the president's armoured limousine is called.
There have been a few small protests, including one directed against the National Security Agency's surveillance of foreign communications, where about 50 people waved placards taunting, "Yes, we scan."
Merkel has said she was surprised at the scope of the spying that was revealed and said the US must clarify what information is monitored. But she also said US intelligence was key to foiling a large-scale terror plot and acknowledged her country is "dependent" on co-operating with American spy services.
For Merkel, the visit presents an opportunity to bolster her domestic standing ahead of a general election in September.
The US and the Germans have clashed on economic issues, with Obama pressing for Europe to prime the economy with government stimulus measures, while Merkel has insisted on pressing debt-ridden countries to stabilise their fiscal situations first.
But the two sides have found common ground on a trans-Atlantic trade pact between the European Union and the US At the just-completed G8 summit, the leaders agreed to hold the first talks next month in the US.
Obama calls for nuclear reductions
Issuing an appeal for a new citizen activism in
the free world, President Barack Obama renewed his call on Wednesday to reduce
US and Russian nuclear stockpiles and to confront climate change, a danger he
called "the global threat of our time."
In a wide-ranging speech that enumerates a litany of challenges facing
the world, Obama said he wanted to reignite the spirit that Berlin displayed when it
fought to reunite itself during the Cold War."Today's threats are not as stark as they were half a century ago, but the struggle for freedom and security and human dignity, that struggle goes on," Obama said at the city's historic Brandenburg Gate before a crowd of 6 000 invited guests under a bright, hot sun.
"And I come here for this city of hope because the test of our time demands the same fighting spirit that defined Berlin a half-century ago."
He called for a one-third reduction of US and Russian nuclear stockpiles, saying it is possible to ensure American security and a strong deterrent while also limiting nuclear weapons.
Obama's address, delivered from behind bullet-proof glass, comes nearly 50 years after John F Kennedy's famous Cold War speech in this once-divided city.
The president has previously called for reductions to nuclear stockpiles. But by addressing the issue in a major foreign policy speech, Obama signalled a desire to rekindle an issue that was a centrepiece of his early first-term national security agenda.
The president discussed non-proliferation with Russian President Vladimir Putin when they met on Monday on the sidelines of the Group of 8 summit in Northern Ireland. During Obama's first term, the US and Russia agreed to limit their stockpiles to 1 550 as part of the New START Treaty.
In Moscow, Russian foreign policy aide Yuri Ushakov said that plans for any further arms reduction would have to involve countries beyond Russia and the United States.
"The situation is now far from what it was in the '60s and '70s, when only the USA and the Soviet Union discussed arms reduction," Ushakov said.
Withdrawal
Obama's calls for co-operation with Moscow come at a time of tension between the US and Russia, which are supporting opposite sides in Syria's civil war. Russia also remains wary of US missile defence plans in Europe, despite US assurances that the shield is not aimed at Moscow.
Germany's foreign minister, Guido Westerwelle, is a strong advocate of nuclear disarmament and has long called for the removal of the last US nuclear weapons from German territory, a legacy of the Cold War.
The Buechel Air Base in western Germany is one of a few remaining sites in Europe where they are based.
Under an agreement drawn up when they formed a coalition government in 2009, Merkel's conservatives and Westerwelle's Free Democratic Party agreed to press Nato and Washington for the nuclear weapons to be withdrawn, but did not set any time frame.
Nuclear stockpile numbers are closely guarded secrets in most nations that possess them, but private nuclear policy experts say no countries other than the US and Russia are thought to have more than 300.
The Federation of American Scientists estimates that France has about 300, China about 240, Britain about 225, and Israel, India and Pakistan roughly 100 each.
Obama defends terrorism tactics in Berlin
President Barack Obama defended US intelligence
methods on a visit to Berlin on Wednesday, telling Chancellor Angela Merkel and wary Germans that Washington was not monitoring
the e-mails of ordinary citizens or damaging civil liberties.
Obama is popular in Germany but revelations before the trip that the United States has a covert internet surveillance programme, codenamed Prism, have caused outrage in a country where memories of the eavesdropping East German Stasi secret police are still fresh.
Merkel said at a joint news conference that also touched on Afghanistan, Syria and the global economy, that the two leaders had held "long and intensive" talks on the spying issue, and pointed out that some questions still need to be cleared up.
"This is not a situation in which we are rifling through the ordinary e-mails of German citizens or American citizens or French citizens or anybody else," said Obama, on his first visit to the German capital as president.
"This is not a situation where we simply go into the internet and start searching any way we want. This is a circumscribed system directed at us being able to protect our people and all of it is done under the oversight of the courts."
Obama was later due to speak to a crowd of roughly 4 000 invited guests at the Brandenburg Gate, which used to stand alongside the Berlin Wall dividing communist East Berlin from the capitalist West of the city.
Tension in Afghanistan
His visit comes on the 50th anniversary of John F Kennedy's famous Ich bin ein Berliner speech. Seizing on the Cold War theme, Obama is expected to announce plans to sharply reduce nuclear arms stockpiles, an initiative he kicked off with a speech in Prague in 2009 but which involves complex negotiations with Russia.
At the news conference, he touched on tensions with Afghan President Hamid Karzai over US plans to begin talks with the Taliban to try to seek a negotiated peace after 12 years of war, acknowledging "huge mistrust" between the Western-backed government in Kabul and its arch-foes.
"We do think that ultimately we're going to need to see Afghans talking to Afghans about how they can move forward and end the cycle of violence there so they can start actually building their country," Obama said.
As a sign of displeasure with the US move, Karzai has suspended talks with Washington on a troop agreement. But Obama said he welcomed Karzai's announcement that Afghan forces would soon take responsibility for security from the US-led Nato peacekeeping force.
On Syria, Obama said reports that the United States was ready to "go all in" to war in the country were exaggerated. He reiterated his view that President Bashar Assad's government had used chemical weapons, while acknowledging that Russia was sceptical on this point.
For her part, Merkel said Germany would not deliver weapons to the rebels, even though a European Union arms embargo on Syria has lapsed.
Pragmatic relationship
Obama arrived in Germany from a two-day summit with Group of Eight leaders in Northern Ireland where he and other leaders clashed with Russian President Vladimir Putin over Syria.
He last came to Berlin in 2008, during his first campaign for the presidency. Back then, Merkel refused to allow him to speak at the Brandenburg Gate. Instead he spoke down the road in Berlin's Tiergarten park, attracting a crowd of 200 000 - largely enthusiastic admirers.
The Democrat has forged a pragmatic - if not warm - relationship with the conservative Merkel, who is hoping to get a boost out of the visit months before a German election.
In a message which seemed designed for her domestic audience, she told Obama at the news conference that balance was essential in government monitoring of Internet communications.
"I made clear that although we do see the need for gathering information, the topic of proportionality is always an important one and the free democratic order is based on people feeling safe," said Merkel, who grew up in the communist East and experienced the Stasi first hand.
Obama said the US had thwarted at least 50 threats because of its monitoring programme, including planned attacks in Germany.
Reassurance on drones
"So lives have been saved and the encroachment on privacy has been strictly limited," he said.
A poll last week showed 82% of Germans approve of Obama, but the magic of 2008, when he was feted like a rock star, has faded amid concerns about his tactics in combating terrorism.
In a nod to the criticism, Obama defended his failure to close the Guantanamo Bay prison on Cuba that his predecessor George W Bush opened after the invasion of Afghanistan in 2001, shortly after the 11 September attacks in New York and Washington.
He also reassured Germans that the US military was not using German bases to launch unmanned drone attacks.
For Obama, who grew up in Hawaii and spent part of his childhood in Indonesia, Europe has sometimes seemed an after-thought. The signature foreign policy initiative of his first term was his "pivot" to Asia.
But analysts say plans to create a free-trade zone between the United States and European Union are a sign that he is repositioning policy to focus on Europe.
Enduring bonds
"The Obama administration has found it harder than expected to work with emerging powers and has fallen back to a more traditional reliance on European allies," said Charles Kupchan, professor of international affairs at Georgetown University.
"Washington doesn't have better options. And when it comes to who to engage in Europe, Germany grows stronger and stronger."
Obama spoke of "enduring bonds based on common values" that linked the United States to Europe.
Obama is popular in Germany but revelations before the trip that the United States has a covert internet surveillance programme, codenamed Prism, have caused outrage in a country where memories of the eavesdropping East German Stasi secret police are still fresh.
Merkel said at a joint news conference that also touched on Afghanistan, Syria and the global economy, that the two leaders had held "long and intensive" talks on the spying issue, and pointed out that some questions still need to be cleared up.
"This is not a situation in which we are rifling through the ordinary e-mails of German citizens or American citizens or French citizens or anybody else," said Obama, on his first visit to the German capital as president.
"This is not a situation where we simply go into the internet and start searching any way we want. This is a circumscribed system directed at us being able to protect our people and all of it is done under the oversight of the courts."
Obama was later due to speak to a crowd of roughly 4 000 invited guests at the Brandenburg Gate, which used to stand alongside the Berlin Wall dividing communist East Berlin from the capitalist West of the city.
Tension in Afghanistan
His visit comes on the 50th anniversary of John F Kennedy's famous Ich bin ein Berliner speech. Seizing on the Cold War theme, Obama is expected to announce plans to sharply reduce nuclear arms stockpiles, an initiative he kicked off with a speech in Prague in 2009 but which involves complex negotiations with Russia.
At the news conference, he touched on tensions with Afghan President Hamid Karzai over US plans to begin talks with the Taliban to try to seek a negotiated peace after 12 years of war, acknowledging "huge mistrust" between the Western-backed government in Kabul and its arch-foes.
"We do think that ultimately we're going to need to see Afghans talking to Afghans about how they can move forward and end the cycle of violence there so they can start actually building their country," Obama said.
As a sign of displeasure with the US move, Karzai has suspended talks with Washington on a troop agreement. But Obama said he welcomed Karzai's announcement that Afghan forces would soon take responsibility for security from the US-led Nato peacekeeping force.
On Syria, Obama said reports that the United States was ready to "go all in" to war in the country were exaggerated. He reiterated his view that President Bashar Assad's government had used chemical weapons, while acknowledging that Russia was sceptical on this point.
For her part, Merkel said Germany would not deliver weapons to the rebels, even though a European Union arms embargo on Syria has lapsed.
Pragmatic relationship
Obama arrived in Germany from a two-day summit with Group of Eight leaders in Northern Ireland where he and other leaders clashed with Russian President Vladimir Putin over Syria.
He last came to Berlin in 2008, during his first campaign for the presidency. Back then, Merkel refused to allow him to speak at the Brandenburg Gate. Instead he spoke down the road in Berlin's Tiergarten park, attracting a crowd of 200 000 - largely enthusiastic admirers.
The Democrat has forged a pragmatic - if not warm - relationship with the conservative Merkel, who is hoping to get a boost out of the visit months before a German election.
In a message which seemed designed for her domestic audience, she told Obama at the news conference that balance was essential in government monitoring of Internet communications.
"I made clear that although we do see the need for gathering information, the topic of proportionality is always an important one and the free democratic order is based on people feeling safe," said Merkel, who grew up in the communist East and experienced the Stasi first hand.
Obama said the US had thwarted at least 50 threats because of its monitoring programme, including planned attacks in Germany.
Reassurance on drones
"So lives have been saved and the encroachment on privacy has been strictly limited," he said.
A poll last week showed 82% of Germans approve of Obama, but the magic of 2008, when he was feted like a rock star, has faded amid concerns about his tactics in combating terrorism.
In a nod to the criticism, Obama defended his failure to close the Guantanamo Bay prison on Cuba that his predecessor George W Bush opened after the invasion of Afghanistan in 2001, shortly after the 11 September attacks in New York and Washington.
He also reassured Germans that the US military was not using German bases to launch unmanned drone attacks.
For Obama, who grew up in Hawaii and spent part of his childhood in Indonesia, Europe has sometimes seemed an after-thought. The signature foreign policy initiative of his first term was his "pivot" to Asia.
But analysts say plans to create a free-trade zone between the United States and European Union are a sign that he is repositioning policy to focus on Europe.
Enduring bonds
"The Obama administration has found it harder than expected to work with emerging powers and has fallen back to a more traditional reliance on European allies," said Charles Kupchan, professor of international affairs at Georgetown University.
"Washington doesn't have better options. And when it comes to who to engage in Europe, Germany grows stronger and stronger."
Obama spoke of "enduring bonds based on common values" that linked the United States to Europe.
Peacekeeping: Ban warns of new threats
UN Secretary General Ban Ki-moon said on
Wednesday the world body's peacekeeping efforts face growing dangers from
non-traditional threats such as suicide bombers and improvised explosive
devices.
Ban told reporters on a visit to a peacekeeping training base near the Chinese capital that the UN must ensure that peacekeepers have the necessary training and specialised skills to face the threats.
These threats "are not new to the UN, but they are more intense," Ban said.
Ban's comments came at the start of a three-day visit to China to meet with newly appointed President Xi Jinping and Premier Li Keqiang. Their discussions are expected to include China's growing involvement in UN affairs, along with international topics including tensions on the Korean Peninsula.
He said peacekeepers need to react rapidly and gather and analyze information on remote areas. In order to ensure that capability, the UN is deploying drones for the first time to its mission in the Democratic Republic of the Congo, Ban said.
Ban also praised China's commitment to peacekeeping efforts. China has dispatched 22 000 troops to 23 missions, more than the other four permanent members of the UN Security Council combined.
"I applaud this solidarity," Ban said, noting 14 Chinese peacekeepers have died while serving.
Threatened
In all, nearly 3 000 peacekeepers have died in the line of duty since the first were deployed 65 years ago - 103 of them last year in Congo, Darfur, Sudan, Ivory Coast and other countries. Eight more civilian contractors, such as pilots, also died during deployment with peacekeeping missions in 2012.
The United Nations currently has more than 113 000 personnel serving in 16 UN peacekeeping and political missions.
In the latest crisis to hit peacekeeping efforts, Austria announced it would pull out its 377 peacekeepers from the 911-member UN force in the Golan Heights after fighting from the Syrian civil war threatened their positions earlier this month.
That will leave just 341 Philippine soldiers and 193 from India in the strategic area along the border with Israel.
Philippine Foreign Secretary Albert del Rosario told reporters on Wednesday that his country will keep its peacekeepers in place at least until 3 August. It will then consider a request from Ban to stay on, del Rosario said.
Ban told reporters on a visit to a peacekeeping training base near the Chinese capital that the UN must ensure that peacekeepers have the necessary training and specialised skills to face the threats.
These threats "are not new to the UN, but they are more intense," Ban said.
Ban's comments came at the start of a three-day visit to China to meet with newly appointed President Xi Jinping and Premier Li Keqiang. Their discussions are expected to include China's growing involvement in UN affairs, along with international topics including tensions on the Korean Peninsula.
He said peacekeepers need to react rapidly and gather and analyze information on remote areas. In order to ensure that capability, the UN is deploying drones for the first time to its mission in the Democratic Republic of the Congo, Ban said.
Ban also praised China's commitment to peacekeeping efforts. China has dispatched 22 000 troops to 23 missions, more than the other four permanent members of the UN Security Council combined.
"I applaud this solidarity," Ban said, noting 14 Chinese peacekeepers have died while serving.
Threatened
In all, nearly 3 000 peacekeepers have died in the line of duty since the first were deployed 65 years ago - 103 of them last year in Congo, Darfur, Sudan, Ivory Coast and other countries. Eight more civilian contractors, such as pilots, also died during deployment with peacekeeping missions in 2012.
The United Nations currently has more than 113 000 personnel serving in 16 UN peacekeeping and political missions.
In the latest crisis to hit peacekeeping efforts, Austria announced it would pull out its 377 peacekeepers from the 911-member UN force in the Golan Heights after fighting from the Syrian civil war threatened their positions earlier this month.
That will leave just 341 Philippine soldiers and 193 from India in the strategic area along the border with Israel.
Philippine Foreign Secretary Albert del Rosario told reporters on Wednesday that his country will keep its peacekeepers in place at least until 3 August. It will then consider a request from Ban to stay on, del Rosario said.
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