Showing posts with label european. Show all posts
Showing posts with label european. Show all posts

Tuesday, June 4, 2013

NEWS,04.06.2013



Carbon emissions get nod from airlines


Global airlines have agreed on a proposal for tackling aircraft emissions in a bid to break international deadlock over an issue that has stoked fears of a carbon trade war.
Airlines representing 85% of global traffic urged governments to adopt a single market-based system designed to offset growth in their post-2020 emissions against the funding of projects to cut emissions deemed harmful to the environment.
The decision is designed to offer governments a basis for negotiation after United Nations talks failed to resolve a stand-off between the European Union and a broad flank of other countries over an issue with cross-border implications.
Airlines have been racing to avert a trade war after the European Union suspended an emissions trading scheme for a year to give opponents time to agree on a global system.
So far, little progress has been made in the UN effort to craft an agreement to lower emissions from international air travel, raising doubts that a September target date can be met.
The International Air Transport Association (Iata), a group of 240 originally state-owned airlines set up to help the UN harmonise aviation after World War II, backed the plan after balancing the interests of airlines usually noted for cut-throat competition.
State-owned Chinese and Indian airlines voted against the measure, echoing what analysts see as the reluctance of their governments to set a precedent for wider climate control talks.
Iata's director general earlier said that failure to agree a common position would expose the airline industry to a "patchwork horror story" of different regulations.
Airlines have been trying to use a slim window of opportunity to smooth over their own divisions and seize the initiative before the UN's aviation body meets in September.
One of the most sensitive topics is whether the whole industry should pay for its emissions or whether the airlines growing the most should pay the most.
Airlines in the Gulf and Asia are growing at a much faster pace than those in mature European and North American markets.
The Iata plan includes safeguards to protect the various camps.
"It is a question of finding the right sweet spot," said American Airlines Chief executive Thomas Horton.

Humanity Imperiled


What is the future likely to bring?  A reasonable stance might be to try to look at the human species from the outside.  So imagine that you’re an extraterrestrial observer who is trying to figure out what’s happening here or, for that matter, imagine you’re an historian 100 years from now assuming there are any historians 100 years from now, which is not obvious and you’re looking back at what’s happening today.  You’d see something quite remarkable.
For the first time in the history of the human species, we have clearly developed the capacity to destroy ourselves.  That’s been true since 1945.  It’s now being finally recognized that there are more long-term processes like environmental destruction leading in the same direction, maybe not to total destruction, but at least to the destruction of the capacity for a decent existence.
And there are other dangers like pandemics, which have to do with globalization and interaction.  So there are processes underway and institutions right in place, like nuclear weapons systems, which could lead to a serious blow to, or maybe the termination of, an organized existence.
How to Destroy a Planet Without Really Trying
The question is: What are people doing about it?  None of this is a secret.  It’s all perfectly open.  In fact, you have to make an effort not to see it.
There have been a range of reactions.  There are those who are trying hard to do something about these threats, and others who are acting to escalate them.  If you look at who they are, this future historian or extraterrestrial observer would see something strange indeed.  Trying to mitigate or overcome these threats are the least developed societies, the indigenous populations, or the remnants of them, tribal societies and first nations in Canada.  They’re not talking about nuclear war but environmental disaster, and they’re really trying to do something about it.
In fact, all over the world Australia, India, South America there are battles going on, sometimes wars.  In India, it’s a major war over direct environmental destruction, with tribal societies trying to resist resource extraction operations that are extremely harmful locally, but also in their general consequences.  In societies where indigenous populations have an influence, many are taking a strong stand.  The strongest of any country with regard to global warming is in Bolivia, which has an indigenous majority and constitutional requirements that protect the “rights of nature.” 
Ecuador, which also has a large indigenous population, is the only oil exporter I know of where the government is seeking aid to help keep that oil in the ground, instead of producing and exporting it and the ground is where it ought to be.
Venezuelan President Hugo Chavez, who died recently and was the object of mockery, insult, and hatred throughout the Western world, attended a session of the U.N. General Assembly a few years ago where he elicited all sorts of ridicule for calling George W. Bush a devil.  He also gave a speech there that was quite interesting.  Of course, Venezuela is a major oil producer.  Oil is practically their whole gross domestic product.  In that speech, he warned of the dangers of the overuse of fossil fuels and urged producer and consumer countries to get together and try to work out ways to reduce fossil fuel use.  That was pretty amazing on the part of an oil producer.  You know, he was part Indian, of indigenous background.  Unlike the funny things he did, this aspect of his actions at the U.N. was never even reported.
So, at one extreme you have indigenous, tribal societies trying to stem the race to disaster.  At the other extreme, the richest, most powerful societies in world history, like the United States and Canada, are racing full-speed ahead to destroy the environment as quickly as possible.  Unlike Ecuador, and indigenous societies throughout the world, they want to extract every drop of hydrocarbons from the ground with all possible speed. 
Both political parties, President Obama, the media, and the international press seem to be looking forward with great enthusiasm to what they call “a century of energy independence” for the United States.  Energy independence is an almost meaningless concept, but put that aside.  What they mean is: we’ll have a century in which to maximize the use of fossil fuels and contribute to destroying the world.
And that’s pretty much the case everywhere.  Admittedly, when it comes to alternative energy development, Europe is doing something.  Meanwhile, the United States, the richest and most powerful country in world history, is the only nation among perhaps 100 relevant ones that doesn’t have a national policy for restricting the use of fossil fuels, that doesn’t even have renewable energy targets.  It’s not because the population doesn’t want it.  Americans are pretty close to the international norm in their concern about global warming.  It’s institutional structures that block change.  Business interests don’t want it and they’re overwhelmingly powerful in determining policy, so you get a big gap between opinion and policy on lots of issues, including this one.
So that’s what the future historian if there is one would see.  He might also read today’s scientific journals.  Just about every one you open has a more dire prediction than the last.
“The Most Dangerous Moment in History”
The other issue is nuclear war.  It’s been known for a long time that if there were to be a first strike by a major power, even with no retaliation, it would probably destroy civilization just because of the nuclear-winter consequences that would follow.  You can read about it in the Bulletin of Atomic Scientists.  It’s well understood.  So the danger has always been a lot worse than we thought it was.
We’ve just passed the 50th anniversary of the Cuban Missile Crisis, which was called “the most dangerous moment in history” by historian Arthur Schlesinger, President John F. Kennedy’s advisor.  Which it was.  It was a very close call, and not the only time either.  In some ways, however, the worst aspect of these grim events is that the lessons haven’t been learned.
What happened in the missile crisis in October 1962 has been prettified to make it look as if acts of courage and thoughtfulness abounded.  The truth is that the whole episode was almost insane.  There was a point, as the missile crisis was reaching its peak, when Soviet Premier Nikita Khrushchev wrote to Kennedy offering to settle it by a public announcement of a withdrawal of Russian missiles from Cuba and U.S. missiles from Turkey.  Actually, Kennedy hadn’t even known that the U.S. had missiles in Turkey at the time.  They were being withdrawn anyway, because they were being replaced by more lethal Polaris nuclear submarines, which were invulnerable.
So that was the offer.  Kennedy and his advisors considered it and rejected it.  At the time, Kennedy himself was estimating the likelihood of nuclear war at a third to a half.  So Kennedy was willing to accept a very high risk of massive destruction in order to establish the principle that we and only we have the right to offensive missiles beyond our borders, in fact anywhere we like, no matter what the risk to others and to ourselves, if matters fall out of control. We have that right, but no one else does.
Kennedy did, however, accept a secret agreement to withdraw the missiles the U.S. was already withdrawing, as long as it was never made public.  Khrushchev, in other words, had to openly withdraw the Russian missiles while the U.S. secretly withdrew its obsolete ones; that is, Khrushchev had to be humiliated and Kennedy had to maintain his macho image.  He’s greatly praised for this: courage and coolness under threat, and so on.  The horror of his decisions is not even mentioned try to find it on the record.
And to add a little more, a couple of months before the crisis blew up the United States had sent missiles with nuclear warheads to Okinawa.  These were aimed at China during a period of great regional tension.
Well, who cares?  We have the right to do anything we want anywhere in the world.  That was one grim lesson from that era, but there were others to come.
Ten years after that, in 1973, Secretary of State Henry Kissinger called a high-level nuclear alert.  It was his way of warning the Russians not to interfere in the ongoing Israel-Arab war and, in particular, not to interfere after he had informed the Israelis that they could violate a ceasefire the U.S. and Russia had just agreed upon.  Fortunately, nothing happened.
Ten years later, President Ronald Reagan was in office.  Soon after he entered the White House, he and his advisors had the Air Force start penetrating Russian air space to try to elicit information about Russian warning systems, Operation Able Archer.  Essentially, these were mock attacks.  The Russians were uncertain, some high-level officials fearing that this was a step towards a real first strike.  Fortunately, they didn’t react, though it was a close call.  And it goes on like that.
What to Make of the Iranian and North Korean Nuclear Crises
At the moment, the nuclear issue is regularly on front pages in the cases of North Korea and Iran.  There are ways to deal with these ongoing crises.  Maybe they wouldn’t work, but at least you could try.  They are, however, not even being considered, not even reported.
Take the case of Iran, which is considered in the West not in the Arab world, not in Asia  the gravest threat to world peace.  It’s a Western obsession, and it’s interesting to look into the reasons for it, but I’ll put that aside here.  Is there a way to deal with the supposed gravest threat to world peace?  Actually there are quite a few.  One way, a pretty sensible one, was proposed a couple of months ago at a meeting of the non-aligned countries in Tehran.  In fact, they were just reiterating a proposal that’s been around for decades, pressed particularly by Egypt, and has been approved by the U.N. General Assembly.
The proposal is to move toward establishing a nuclear-weapons-free zone in the region.  That wouldn’t be the answer to everything, but it would be a pretty significant step forward.  And there were ways to proceed.  Under U.N. auspices, there was to be an international conference in Finland last December to try to implement plans to move toward this.  What happened? 
You won’t read about it in the newspapers because it wasn’t reported only in specialist journals.  In early November, Iran agreed to attend the meeting.  A couple of days later Obama cancelled the meeting, saying the time wasn’t right.  The European Parliament issued a statement calling for it to continue, as did the Arab states.  Nothing resulted.  So we’ll move toward ever-harsher sanctions against the Iranian population it doesn’t hurt the regime and maybe war. Who knows what will happen?
In Northeast Asia, it’s the same sort of thing.  North Korea may be the craziest country in the world.  It’s certainly a good competitor for that title.  But it does make sense to try to figure out what’s in the minds of people when they’re acting in crazy ways.  Why would they behave the way they do?  Just imagine ourselves in their situation.  Imagine what it meant in the Korean War years of the early 1950s for your country to be totally leveled, everything destroyed by a huge superpower, which furthermore was gloating about what it was doing.  Imagine the imprint that would leave behind.
Bear in mind that the North Korean leadership is likely to have read the public military journals of this superpower at that time explaining that, since everything else in North Korea had been destroyed, the air force was sent to destroy North Korea’s dams, huge dams that controlled the water supply a war crime, by the way, for which people were hanged in Nuremberg.   And these official journals were talking excitedly about how wonderful it was to see the water pouring down, digging out the valleys, and the Asians scurrying around trying to survive.  The journals were exulting in what this meant to those “Asians,” horrors beyond our imagination.  It meant the destruction of their rice crop, which in turn meant starvation and death.  How magnificent!  It’s not in our memory, but it’s in their memory.
Let’s turn to the present.  There’s an interesting recent history.  In 1993, Israel and North Korea were moving towards an agreement in which North Korea would stop sending any missiles or military technology to the Middle East and Israel would recognize that country.  President Clinton intervened and blocked it.  Shortly after that, in retaliation, North Korea carried out a minor missile test.  The U.S. and North Korea did then reach a framework agreement in 1994 that halted its nuclear work and was more or less honored by both sides.  When George W. Bush came into office, North Korea had maybe one nuclear weapon and verifiably wasn’t producing any more. 
Bush immediately launched his aggressive militarism, threatening North Korea “axis of evil” and all that so North Korea got back to work on its nuclear program.  By the time Bush left office, they had eight to 10 nuclear weapons and a missile system, another great neocon achievement.  In between, other things happened.  In 2005, the U.S. and North Korea actually reached an agreement in which North Korea was to end all nuclear weapons and missile development.  In return, the West, but mainly the United States, was to provide a light-water reactor for its medical needs and end aggressive statements.  They would then form a nonaggression pact and move toward accommodation.
It was pretty promising, but almost immediately Bush undermined it.  He withdrew the offer of the light-water reactor and initiated programs to compel banks to stop handling any North Korean transactions, even perfectly legal ones.  The North Koreans reacted by reviving their nuclear weapons program.  And that’s the way it’s been going.
It’s well known.  You can read it in straight, mainstream American scholarship.  What they say is: it’s a pretty crazy regime, but it’s also following a kind of tit-for-tat policy.  You make a hostile gesture and we’ll respond with some crazy gesture of our own.  You make an accommodating gesture and we’ll reciprocate in some way.
Lately, for instance, there have been South Korean-U.S. military exercises on the Korean peninsula which, from the North’s point of view, have got to look threatening.  We’d think they were threatening if they were going on in Canada and aimed at us.  In the course of these, the most advanced bombers in history, Stealth B-2s and B-52s, are carrying out simulated nuclear bombing attacks right on North Korea’s borders. 
This surely sets off alarm bells from the past.  They remember that past, so they’re reacting in a very aggressive, extreme way.  Well, what comes to the West from all this is how crazy and how awful the North Korean leaders are.  Yes, they are.  But that’s hardly the whole story, and this is the way the world is going.
It’s not that there are no alternatives.  The alternatives just aren’t being taken. That’s dangerous.  So if you ask what the world is going to look like, it’s not a pretty picture.  Unless people do something about it.  We always can.

China Tried To Convince North Korea To Stop Conducting Nuclear Tests: Source


China told an envoy of North Korean leader Kim Jong-un that Pyongyang should stop conducting nuclear and missile tests, but the North showed little sign of heeding the request, said a source with knowledge of the talks held late last month.
Kim dispatched Choe Ryong-hae, vice chairman of the country's top military body, to explain North Korea's recent actions but he got a lukewarm reception from his Chinese hosts, said the source, who has close ties to Beijing and Pyongyang.
North Korea's 30-year-old leader took power in December 2011 and has carried out two long-range rocket launches and a nuclear weapons test since then. He also embarked on a months-long campaign of threats against South Korea and the United States.
"(North) Korea has not mellowed," said the source, who did not attend the meetings but has since spoken to both sides to which he has regular access.
Choe, nominally a general but with no known military experience, is the Korean People's Army's top ideologue. He showed up in Beijing in full military regalia, in contrast to his suited Chinese counterparts.
Experts have said the three-day visit was an attempt by North Korea to mend fences with its only major diplomatic ally, which has been critical of Pyongyang.
After the meetings, in which Choe eventually held talks with Chinese President Xi Jinping, North Korea promised to take "positive steps for peace" while China repeated its mantra of wanting "calm and restraint" on the Korean peninsula.
FOCUS ON ECONOMY, NORTH TOLD
Beijing tried to convince Pyongyang to stop its nuclear and missile tests, which "put China in a difficult position and are not conducive to (North) Korea", the source said. China advised North Korea to focus on rebuilding its ruined economy instead, something it has said before.
North Korea's recent actions drew international condemnation and put Beijing under pressure, especially from Washington, to rein in Pyongyang. It also helped reinforce an American strategy of rebalancing its security policies toward the Asia-Pacific.
China is North Korea's biggest trade partner and aid donor. Choe was shown a special enterprise zone during his visit, but he did not raise the issue of aid during his talks, the source added.
Asked if Pyongyang had agreed to halt nuclear tests, the source said that for the North: "It hinges on necessity."
North Korea has repeatedly said it will never abandon its nuclear weapons, calling them its "treasured sword".
The source did not say if Beijing spelt out any consequences should the North conduct further tests.
Choe met officials from the Chinese government, the military and ruling Communist Party.
China has grown increasingly frustrated with Pyongyang. It agreed to new U.N. sanctions after Pyongyang's latest nuclear test in February, and Chinese banks have curbed business with their North Korean counterparts in the wake of U.S. sanctions on the country's main foreign exchange bank.
A former senior U.S. official said Beijing's insistence that North Korea halt testing would be in line with recent signs it was running out of patience with Pyongyang.
"What I've heard from talking to Chinese officials and American officials who are talking to them is that top Chinese officials now emphasize that the principal goal is to terminate the nuclear weapons programme of North Korea," the ex-official said.
"Usually, in the past that's been buried (by the Chinese)."
Choe presented a hand-written letter from Kim to Xi. Chinese media gave no details of its contents at the time, but the source close to Pyongyang and Beijing described it as "terse".
Kim stressed in his letter that "the traditional friendship created by the older generation of revolutionary leaders should not waver at any time", said the source.
China has backed North Korea since Mao Zedong sent Chinese troops to bolster Communist forces under then North Korean leader Kim Il-sung - Kim Jong-un's grandfather - during the 1950-53 Korean war.
The nuclear and rocket tests and verbal threats were partly aimed at forcing the United States and South Korea to sign a permanent peace treaty with North Korea to replace the armistice agreement that ended that conflict, the source said.
HANDSHAKES, NOT HUGS
North Korea felt the reception Choe got was lukewarm, said the source. It was the most important visit to China by a North Korean delegation since the young Kim's uncle, a kingmaker among Pyongyang's ruling elite, visited Beijing in late 2012.
"There was no bear hug between Wang Jiarui and Choe when they met," the source noted, referring to the Chinese Communist Party's International Department minister, who is responsible for dealing with foreign political parties. Such greetings have been a tradition between North Korean and Chinese leaders, who once saw their relationship as "close as lips and teeth".
China has repeatedly urged North Korea to return to the so-called six-party talks, which are aimed at getting Pyongyang to give up its nuclear weapons.
Choe told the Chinese this format did not work. In 2009, Pyongyang said it would never return to the talks, which also included South Korea, the United States, Japan and Russia.
North Korea would instead seek bilateral talks with the various parties first, said the source, without elaborating.
Abandoning its nuclear weapons programme could not be a prerequisite for talks, Choe told his hosts.
That makes talks with Washington a non-starter since U.S. officials say North Korea must take meaningful steps on denuclearisation before there can be dialogue.
KIM FIRMLY IN CHARGE, CHINESE TOLD
Choe told his Chinese hosts that Kim had consolidated his power since the death of his father, Kim Jong-il, in December 2011, through the weapons tests and war threats that saw Pyongyang put its armed forces on alert this year.
There has been repeated speculation that the North's young leader had been challenged by some elements in the military, although these assessments have been impossible to verify given the closed nature of North Korea.
"Through mobilising troops, Kim Jong-un wanted to see who obeyed and who refused to obey his command," the source said.
Just under a year ago, Kim ousted Vice Marshal Ri Yong-ho, North Korea's leading military figure, as army chief of staff. A couple of days later North Korean media named Kim as marshal of the army.
"Many (officers) have been rounded up or sacked. Ri Yong-ho was arrested on counter-revolutionary crimes," the source said. He declined to say if Ri was jailed or executed.
"There had been some opposition to Kim Jong-un when he was named marshal. He has gotten rid of this."

Tuesday, May 7, 2013

NEWS,07.05.2013



EU targets banks to help consumers


The European Commission will propose new rules to make it easier for consumers to open and switch bank accounts, as well as see what banking fees they are being charged.

The proposal, to be published on Wednesday and which could become law in the European Union in three years, also requires banks to shoulder the administrative burden when clients switch accounts, such as transferring direct debits.

Officials with knowledge of the draft law said it would also oblige banks to spell out their charges in a standardised way, making it easier for customers to compare.

The Commission wants at least one bank in each country to offer a basic account, allowing people currently outside the banking system to deposit cash and pay bills.

The EU executive will also suggest giving citizens the legal entitlement to open an account, acting out of a growing sense of frustration that efforts to cajole banks into better self-regulation is not working.

Studies by Commission officials showed that banks did not offer enough information on switching accounts and that consumers did not know what fees they paid for banking services.

The studies also found that 58 million citizens in Europe had no bank accounts - including half the populations of Bulgaria and Romania.

The Commission hopes introducing a standard guide to fees for people opening an account, as well as an annual summary of charges and establishing a national comparison website will change this.

Under the new rules, consumers wanting to switch banks would only have to inform the new bank, which would then be obliged to tell gas, electricity and other providers of the changes to account payments.

The proposal will go to EU member states for their approval or possible change before the changes can be introduced.


China braces for surge in gold imports


Chinese gold imports are likely to swell further after rising strongly for a second straight month in March, as investors seek safety from economic uncertainty and after prices plunged to a two-year low last month.

"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.

"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April. 

He said China's gold consumption in the first quarter probably rose 10% to 15% from 255.2 tonnes in 2012. Net gold flows from Hong Kong to China, the world's number two gold consumer after India, rose to 223.519 tonnes in March from 97.106 tonnes in February, data from the Hong Kong Census and Statistics Department showed on Tuesday (www.censtatd.gov).

In March, Shanghai gold futures fetched premiums of more than $30 to global prices, making it cheaper to buy the metal overseas. April could see imports swell further after the drop in international prices spurred frenzied buying in Asia, leading to a shortage of gold bars and coins in Singapore as well as Hong Kong, which is China's main source for gold imports.   

Demand for gold from India and China is a major factor in global prices, with the World Gold Council saying the two countries account for more than a third of global appetite. China produced 403 tonnes of gold in 2012, but consumption was more than double at 832.2 tonnes.

Gold tumbled to around $1 321 an ounce on April 16, its lowest in more than two years, after a fall below $1 500 and fears of central bank sales led to a sell-off that stunned investors and prompted them to slash holdings of exchange-traded funds.

It stood at around $1 460 on Tuesday.

 "April imports will be stronger than March," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The world was buying gold and China was no different at all."

Heavy traffic 

The drop in gold prices has prompted a gold rush in China, with Chinese shoppers flocking to retailers to buy jewellery and gold bars.  

A spokesman for Hong Kong jewellery chain Chow Tai Fook , the world's largest jewellery retailer by market value, told that traffic at its China stores jumped by 50% during the May Day holidays.

The surge in Chinese travellers during the three-day May Day holiday also drove gold sales in Hong Kong to rise by an estimated 50%, with total gold sales from April 29 to May 2 reaching some 40 tonnes, local media quoted Haywood Cheung, president of the Hong Kong Gold and Silver Exchange, as saying. 

The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said.

With China's economy still on shaky ground, investors could increasingly be turning to gold as a so-called safe-haven investment. 

China's annual export growth may have picked up slightly in April due to a low comparison from a year ago, while import growth probably eased, a Reuters poll showed, suggesting the underlying momentum for both the domestic and global economies remains tepid. Gold exports to China from Hong Kong hit an all time high  of 557.478 tonnes in 2012.


Companies 'cooking books' to meet targets


Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young says in its latest Fraud Survey published on Tuesday.
One in five of almost 3 500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said.
In addition 42% of board directors and top managers surveyed said they were aware of "some type of irregular financial reporting".
And despite scandals and regulatory failures in the wake of the credit crunch, almost a quarter of top financial services staff surveyed said they were aware of manipulation and almost 10% of all staff said their companies had understated costs, overstated revenues or used unprincipled sales tactics.
Meanwhile, almost half of the sales staff surveyed across all sectors did not consider anti-corruption policies to be relevant and more than a quarter thought it acceptable to offer personal gifts or services to win or retain business.
In India, over a third felt justified in offering cash - triple the number in Western Europe.
"Our survey shows that to find growth and improved performance in this environment, an alarming number appear to be comfortable with or aware of unethical conduct," said David Stulb, head of E&Y's fraud investigation and dispute services practice.
In Spain, ranked alongside Russia and just below Nigeria and Slovenia, 61% of staff believed companies often exaggerated results, compared with only 7% in Finland.
And E&Y said the vast majority of managers from Norway to Nigeria and Russia to Greece were feeling the pressure to deliver a good financial performance over the next 12 months, despite little optimism that business conditions would improve.
They were now forced to balance the risks of expanding into rapid-growth markets, where winning contracts can go hand-in-hand with corruption, cutting costs further and piling pressure on staff or suppliers - or distorting results, the firm said.
E&Y warned multinationals based in mature markets they could be more vulnerable to the risks of unethical behaviour. One quarter of those asked thought watchdogs in rapid-growth markets focussed more on the behaviour of foreign businesses.
The consultancy called on managers to ask more robust questions focus on key risks, such as poor due diligence accounting checks of intermediaries and associates, and punish unethical behaviour.

Egypt replaces economy ministers


Egypt announced a cabinet reshuffle on Tuesday that removed two ministers closely involved in talks with the International Monetary Fund (IMF) and increased the representation of President Mohamed Mursi's Muslim Brotherhood in government.

The opposition had been demanding the installation of a politically neutral cabinet to oversee parliamentary elections later this year.

Prime Minister Hisham Kandil announced nine changes to his cabinet. These included the appointment of Amr Darrag, a senior official in the Brotherhood's Freedom and Justice Party, as planning minister.

The outgoing minister, Ashraf al-Arabi, had played a central role in talks with the IMF over a $4.8bn loan seen as crucial to easing a deep economic crisis. Egypt has yet to seal a deal with the IMF.

Fayyad Abdel Moneim, a specialist in Islamic economics, was appointed as finance minister, replacing Al-Mursi Al-Sayed Hegazy, another expert on Islamic finance who was appointed in January, the last time Kandil reshuffled the cabinet.

Abdel Moneim received a doctorate from Al-Azhar University in Islamic economics in 1999.

The government has been widely criticised for failing to revive an economy that is in deep crisis because of more than two years of political turmoil.

Another Brotherhood member, Yehya Hamed, was appointed investment minister. The new cabinet includes at least 10 politicians affiliated to the Muslim Brotherhood or the FJP, compared to eight in the old one.

Ahmed Suleiman was named as justice minister, replacing Ahmed Mekky, who resigned last month in protest at efforts by Mursi's Islamist allies to purge the judiciary.

The ministers of interior, defence and foreign affairs were left unchanged.


Crisis sees rise in German immigration


An influx of people from crisis-hit southern European countries like Spain, Italy and Greece has led to the biggest surge in German immigration in nearly 20 years.
The Federal Statistics Office said 1.081 million immigrants flocked to Germany last year, up 13% from 2011 and the highest number since 1995.
Leading the way were arrivals from countries in eastern Europe and from southern eurozone countries, struggling with recession and high unemployment as a result of the currency bloc's three-year old debt crisis.
The number of immigrants coming from Spain, Greece, Portugal and Italy rose by 40% or more compared to the prior year.
"The rise in immigration from EU countries hit by the financial and debt crisis is particularly strong," the Statistics Office said.
Safe haven
Germany has been a rare pillar of strength during the crisis, benefitting from deep structural reforms introduced a decade ago, competitive small-and-medium sized companies and record low interest rates resulting from its status as a safe haven.
Unemployment, at 6.9%, is hovering just above a post-reunification low.
By contrast, more than one in four workers in Spain and Greece are without a job, and youth unemployment in these countries is close to 60%.
This has made Germany, Europe's largest economy, an increasingly attractive destination, despite barriers like the language.
Still, the numbers from southern Europe remain fairly small in total terms compared to those from the east.
A total of 34 109 people came from Greece and 29 910 from Spain in 2012.
That compared to 176 367 from Poland and 116 154 from Romania.


Thursday, November 29, 2012

NEWS,29.11.2012



The Politics of Fear


To those who were surprised that the European Union received the Nobel Peace Prize, I say: "Think twice." This was not only a deserved award for Europe's contribution to bringing peace and stabilizing democracies in the recent past  the Nobel Committee was also sending a clear warning to contemporary leaders. I could almost hear them saying: "On this difficult odyssey, don't abandon ship. In today's world, the EU is too valuable to squander."It was an indirect but powerful rebuttal to the dangerous nationalist and populist rhetoric some politicians have adopted when describing the recent financial crisis.This message couldn't have come at a better time.Like ghosts from the past, we see political violence, xenophobia, migrants being scapegoated and extreme nationalism creeping into our public debates even into our parliaments. This is a Europe diverging from its founding principles. Principles that rendered nationalistic hatreds an anathema.But it is these politics of fear that seem to have incapacitated Europe. A Europe seemingly incapable of ending this crisis, a fractious Europe. This has undermined a sense of trust between us and in our European institutions. This climate does not inspire confidence either in our citizens or the markets. Nor will our retreat into a renationalization of Europe be the solution.My recent experience in dealing with the financial crisis in Greece and in Europe has confirmed my belief that this is a political crisis more than a financial one.I am convinced that, with the political will, we could have avoided much pain, squelched market fears and stabilized the euro, while at the same time reformed ailing, unsustainable economies such as ours in Greece. Despite media hype to the contrary, it is the Greek people who first and foremost have wanted this change. Instead, we allowed fear and mistrust to overcome us. And fear begets more fear and uncertainty. Instead of understanding, we have name-calling. Instead of collective, transparent action by our institutions, we have moved into a mode where the community method is undermined by makeshift intergovernmental decision-making, with the balance of power tipping dangerously towards the very large member states. Instead of real, necessary reform and fiscal responsibility, we are implementing an overdose of austerity dealing more with symptoms and less with the root causes of the economic woes of Europe. Instead of rewarding superhuman efforts, we are condemned for our shortcomings. More than anything else, it has been this political climate that has undermined our common efforts to deal with today's financial crisis. Whether it is banks or governments, we have adopted a passive, almost defeatist, attitude, which we cloak in the language of "caution and responsibility. "It is our responsibility to break this cycle of fear and mistrust now. We are vastly underestimating our own capacities as a union. Our capacity to calm markets or create jobs. We again need to believe in the great capacity of our peoples north and south, west and east. We must rekindle the spirit that united us in 1989 when the Berlin Wall fell. We know the difficulties we then faced. But we did not cower. We decided to invest in the potential Europe and our peoples had. And there is so much hidden or untapped potential in our youth, our experience, our diversity and our cultures.But this not simply an issue of political will. We must combine this will with an understanding of our real weaknesses. Over the decades we have become more and more interdependent in Europe. This was not by chance, this was by design -- from the days of Monnet and Schuman. It is this interdependence that has made the wars of the past unthinkable.But if interdependence is important to keep the peace, it is not enough to make us effective, adaptive, powerful on the global scene. Neither does interdependence guarantee the democratic empowerment of our citizens and the liberation of our peoples' potential.In fact, this interdependence today is seen by many as a straight jacket, hindering us rather than giving us the capacity to deal with new global challenges. The debate about the breakup of the euro, or even euro-exits, is a case in point.Our citizens, therefore, wonder whether this European structure is still useful or if we should go our own separate, independent ways. As in The Odyssey, the sirens are beckoning that we change course. However sweet their song, we know their purpose is that we crash on the shallow rocks. If we are to avoid these rocks, we need to radically rethink our governance structures and policy responses so that we capitalize on our strengths and neutralize our weaknesses.Three fundamental principles must underpin a more progressive Europe.First, we must strengthen Europe's institutional capacity. Priority today must be in the financial-economic sphere. The eurozone is the world's largest economy, the euro is the world's second reserve currency and on aggregate we have strong economic fundamentals; but we are not able to leverage our strengths due to weak or missing institutions. Despite significant progress such as:

- More robust fiscal monitoring;
- The European Stability Mechanism;
- The Six-Pack to strengthen governance and oversight; and
- A broader mandate for the European Central Bank, with the recent introduction of Outright
Monetary Transactions, we must go one step further. 


We have already pooled our risks, now we must pool our strengths. Eurobonds and a federal banking union are vital tools to safeguard the EU from similar crises and set our economy on a more stable footing. Second, we need to liberate and reenergize Europe's human capacity. High unemployment needs to be offset by investment in our human capital, education, research, green growth and the necessary infrastructure for green energy and a knowledge society. In our race towards competitiveness, we are emulating models that have little to do with our traditions. In many emerging markets, a lack of collective bargaining and democratic accountability, low wages, substandard working conditions and denigration of the environment combined with tax havens which have robbed countries of huge revenues up to 11 billion euros per year in Greece alone may offer a temporary comparative advantage. But in seeking growth, we cannot race to the bottom. We must base our competitiveness on quality, not inequality. Third, we must strengthen our democratic capacity. We need innovative democratic institutions that will empower our citizens and strengthen the legitimacy of our decisions .The EU's complex decision-making process has been an outcome of a delicate historical balance between member states. Today, however, people feel they are sidelined by these decisions. In trying to confront its fiscal deficit, Europe has run up a democratic deficit. As we take the next steps towards European integration, we must give ownership of this process to the people. Policies imposed on citizens without their active consent are doomed to fail. Already, a frustrated, educated but unemployed younger generation is losing faith in our European institutions and values. This vacuum has created fertile ground for populism and extremism. When our citizens feel disempowered, they will turn to saviors or target scapegoats as they do not participate through dialogue and responsible deliberation to understand and solve common problems. Europe can regain the confidence of the markets, but first we must regain the confidence of our citizens. That is why I called for a referendum in Greece, so that people could debate and decide on their own future. There is nothing wrong with European countries ceding sovereignty in the interest of creating a stronger Europe. Indeed, they already have. But as we do so, we need to rethink how our representatives in the Union are elected and how decisions are made. An EU president, elected by a European Parliament (or even a directly elected president), European-wide referenda, forms of more direct citizen participation and the use of social media are ideas already ripe to explore. This new Europe, as I see it, will not be the product of one grandiose decision, dictated by an elite minority of powerful nations or some anonymous bureaucrats in Brussels. Small, incremental but complementary steps -made by each of us individually and all of us together -will build the values and the foundations for the Europe that we want. Democracy and education will give new capacity to our citizens and that, in the end, will empower Europe and reinforce its legitimacy in our societies and around the world. We do have a choice. Either we empower Europe and its citizens and become a catalyst for humanizing our global economy, or globalization will dehumanize our societies and undermine the European project. As a citizen of Europe, I vote for the first choice.

 

EU outlines stop-gap 2013 budget


European Union negotiators have provisionally agreed to fix the bloc's spending at nearly 133 billion euros ($209 billion) in 2013, as part of a deal that adds 6 billion euros to spending this year.The agreement which must now be approved by EU governments and the European Parliament ensures stable funding for EU programmes next year.It also guarantees the continuation of several employment, education and research programmes this year that had been threatened with cancellation because of a funding gap."There was an agreement on the draft package for the 2013 budget that will be submitted to the European Council and Parliament in the coming days," a spokesman for the European Commission said in a statement.But one EU official warned that the approval of governments and lawmakers was far from guaranteed. "I'm not sure that everyone is going to be happy with this package, particularly among some MEPs," said the official, speaking on condition of anonymity. A successful conclusion to the 2013 budget row would allow governments and officials to focus on the far thornier subject of the bloc's next long-term budget, for 2014-2020.EU leaders failed to reach a deal on that 1 trillion euro ($1.57 trillion) budget at a summit in Brussels last week, and are expected to try again early next year.As part of Thursday's deal, EU payments next year will be limited to a maximum of 132.84 billion euros ($US208.97 billion).That would have represented an increase of 2.9% compared with this year far below the rise of 6.8%demanded by the European Parliament and the executive Commission, and only a small real increase after inflation is taken into account. But the extra 6 billion euros agreed for this year means that spending in 2012 will now amount to 135 billion euros the highest level ever and as a result, the budget will actually fall by 1.6% next year. During previous rounds of talks, the Commission had insisted that an extra 9 billion euros was needed to fill the 2012 funding shortfall. But at Thursday's meeting, the EU's executive said it could forgo some of the extra funds while it checked whether all the conditions for payment had been met.About three-quarters of the EU's annual budget is spent on farm subsidies and funding for new motorways, bridges and other public infrastructure projects in poorer eastern and southern European member countries.

BoE urges UK banks to boost capital


British banks need to act now to bolster their defences against financial shocks, as many have underestimated the cost of loans going sour and future fines for misconduct, the Bank of England (BoE) has said.Underlining a growing sense of urgency about capital defences, outgoing BoE Governor Mervyn King said that while the problem was "manageable", he wanted the banks' regulator to report back by March on what steps banks were taking, and warned that he did not want them to cut lending."Our primary concern has been to ensure that UK banks have sufficient capital ... so that they are on a solid footing to support economic growth," King told a news conference."The problem is manageable, and is already understood at least in part by markets. But it does warrant immediate action," he added.King made the comments as he presented the half-yearly report by the BoE's Financial Policy Committee, which from next year will take charge of British bank regulation.He said that the government would not need to put extra money into Royal Bank of Scotland or Lloyds Banking Group, the two banks in which it has held controlling stakes since the financial crisis. Instead, he said banks could raise funds by issuing contingent debt that converts into equity in a crisis, or by restructuring actions - often a euphemism for asset sales. The BoE said that British banks' true capital position was probably worse than relatively healthy official numbers imply, and this was already hurting investors. "Progress by banks in raising capital has slowed and investor confidence remains low," the BoE said in its half-yearly Financial Stability Report. "Market concerns are likely to reflect in part uncertainty about bank capital adequacy."he BoE has repeatedly urged British banks to raise capital levels, and November's report marks a stepping up of these recommendations, despite a slight reduction in the risks facing the financial system due to an easing in euro zone tensions. "UK banks' capital buffers, available to cushion losses and maintain the supply of credit following realisation of a stress scenario, are not as great as headline regulatory capital ratios imply," it said.King also confirmed the new effort would apply to international banks with British subsidiaries which are regulated by the Financial Services Authority.The BoE identified three main areas where banks were over-optimistic about how much capital they had.First, information from supervisors suggested some British banks would suffer bigger losses on loans than they had made provision for, according to the report.Second, it said banks had also persistently underestimated the scale of fines they would face for past misconduct, adding that external analysts had suggested further costs of 4 billion to 10 billion pounds ($7.8 billion to $31 billion) for missold payment protection insurance and the LIBOR rate-rigging scandal. Finally, the BoE criticised the "complex and opaque" system banks use to calculate the riskiness of its assets, with the amount of capital that banks estimated they needed sometimes varying threefold between banks for the same type of assets.The report also revealed muted results from the BoE's June effort to get banks to boost lending, by paving the way for up to 500 billion pounds of liquidity reserves held by the banks to be run down.But it noted that just 31 billion pounds had been released and that it was mostly used to repay debt rather than provide direct support to credit growth.The BoE cautioned that it was "too early" to judge the impact of the initiative.

US stocks and euro sell-off on Boehner comments


US stocks and the euro sold off after US House Speaker John Boehner said there had been "no substantive progress" in talks to avoid the fiscal cliff.Republican Boehner made the comments after speaking with President Barack Obama and Treasury Secretary Timothy Geithner, saying there was a real danger no agreement would be reached to avoid $US607 billion of automatic tax increases and spending cuts that kick in on January 1. Democrats had "yet to get serious about spending cuts," Boehner said.There was no mention of the optimism he cited 24 hours ago that gave a boost to Wall Street and was echoed around the globe.The Congressional Budget Office has warned that falling off the fiscal cliff could drive the US jobless rate back up to 9.1% by the end of 2013 and send the world's biggest economy back into recession.The dollar pared its decline against the euro, which traded recently at $US1.2967, having early touched $US1.30.US stocks did recover some ground after the selloff.The Dow Jones Industrial Average was up 0.2% and the Standard & Poor's 500 Index up 0.4%."One minute the portents for a deal on the fiscal cliff are negative, the next minute they are positive," Mike Mason, a senior trader at Sucden Financial Private Clients in London, told Reuters."This is likely to be the pattern all the way up to the deadline on January 1. Equities are sure to remain volatile and trading subdued until there is any concrete outcome to these negotiations."Economic data in the US was mixed, though the revised reading for gross domestic product in the third quarter was 2.7%, up from the 2% pace previously published.That just missed the estimate in a Bloomberg survey of 2.8% and marks an acceleration from the second quarter's 1.3% growth.Consumers, though, were subdued. Household spending rose a revised 1.4%, down from the first reading of 2%, according to the Commerce Department. Economists were hoping the revision would only be down to 1.9%.Yet the US trade deficit shrank for revised to US$US403 billion from an initial estimate of $US413.7 billion and inventories turned positive.And an index of pending home resales beat estimates by rising 5.2%, according to the National Association of Realtors, while the number of Americans applying for jobless benefits fell 23,000 to 393,000 last week, according to the US Labor Department.Stocks in the UK rallied, as did equity markets across Europe, which closed before Boehner made gloomier noises about the US fiscal cliff.The FTSE 100 advanced 1.2%, with Rio Tinto up 5.1%. Germany's DAX 30 climbed 0.8% and France's CAC 40 was up 1.5%.In the UK, Lord JusticeLeveson's long-awaited report into media ethics that followed the phone hacking scandal at Rupert Murdoch's News Corp called for a new independent media regulator to stamp out unethical behaviour.UK Prime Minister David Cameron, who himself was tarnished by associations with Murdoch's lieutenants in Britain, have a tepid welcome to the report while saying he wouldn't support new law to enshrine such a body.