NEWS,11.03.2013

Greek economy shrinks 5.7%

Greece's ailing economy contracted by 5.7% in the fourth quarter of 2012 in an annual comparison, provisional data from the state statistics agency showed on Monday.

The agency said the contraction was slightly lower than the previous estimate of 6.0% for the fourth quarter announced a month ago.

Combined with contraction data given for the first, second and third quarters, Greece's economy shrank by 6.4% in 2012.

This is slightly better than the 6.5% estimate contained in Greece's current budget.

The 2013 budget forecasts another contraction of 4.5% this year before the economy limps back into growth in 2014.

In 2011, Greece's economy shrank by 7.1%. Overall, it has contracted by more than a fifth since 2008.

The coalition government of conservative Prime Minister Antonis Samaras has made achieving growth its top priority as the nation struggles to meet its commitments to international creditors.

EU bans animal-tested cosmetics

The European Union is banning the sale of new cosmetic products containing ingredients tested on animals.

The 27-country bloc's executive arm, the European Commission, said on Monday the ban will take effect immediately.

Animal rights groups cheered the news, but industry trade body Cosmetics Europe said the ban comes too early and "acts as a brake on innovation."

The EU has banned animal testing of finished cosmetic products since 2004. The ban on cosmetics containing animal-tested ingredients was first decided four years ago but initially left loopholes for certain tests following resistance from cosmetics companies.

While the industry's rabbits and guinea pigs will now be spared, consumers are unlikely to notice immediate changes because products containing ingredients that were tested on animals before the ban can remain on the shelves.

Chavez death: Cuba has lost 'best friend'

Cuba's Fidel Castro praised the late Venezuelan President Hugo Chavez on Monday as a champion of the poor and said Cubans had lost their best friend ever, in his first comments on the death last week of his socialist ally.

Castro said the news, although not unexpected, had been a hard blow.

"On the 5th of March, in the afternoon hours, died the best friend the Cuban people had in their history," Castro wrote in a column published in Communist Party newspaper Granma.

"We have the honour of having shared with the Bolivarian leader the same ideals of social justice and of support for the exploited," said the 86-year-old Castro who led Cuba's 1959 revolution, ruled the country for 49 years and still plays a behind-the-scenes role.

"The poor are the poor in any part of the world," he said.

During Chavez' years in power, he and Castro forged a close personal and political relationship that resulted in extensive Venezuelan aid to the communist island and a shared strategy for promoting Latin American unity against US influence in the region.
 

Chavez helped rescue Cuba from desperate economic times that followed the 1991 collapse of the Soviet Union, its former top ally, by providing two-thirds of its oil in a barter deal for the services of Cuban professionals, most of them doctors and nurses.

He also signed a number of joint ventures aimed at integrating the two countries' economies.

Chavez, aged 58, was diagnosed with cancer in the pelvic region in June 2011 by Cuban doctors and underwent four surgeries on the Caribbean island, which has an extensive medical system and provides free care to its people.

Except for a set of photographs, Chavez was never seen in public again following his last operation in December and he died on Tuesday in Caracas.

Castro said he had received a phone call via satellite notifying him of what he called "the bitter news".

"The significance of the phrase used was unmistakable. Although we knew the critical state of his health, the news hit us hard," wrote Castro, who resigned as Cuba's president five years ago because of his own health problems.


"I remembered the times he joked with me saying that when both of us finished our revolutionary work, he would invite me to spend time by the Arauca River in Venezuelan territory, which reminded him of the rest he never had," Castro said.

Raul Castro, who succeeded his older brother as Cuba's president, represented the island on Friday at Chavez' funeral.

Chavez' death has raised worries in Cuba that Venezuelan aid will cease to flow to the island.

His preferred successor, Nicolas Maduro, is favoured to win an April election to replace Chavez and expected to continue his Cuba policies for the immediate future.

However, if more conservative opponent Henrique Capriles pulls off an upset victory, he has promised to put an end to Venezuela's oil largesse.

Castro closed his column by paraphrasing a famous quote from another late friend and revolutionary, Ernesto "Che" Guevara, the Argentine physician who fought alongside him in the Cuban revolution.

"Until victory always, unforgettable friend," Castro wrote of Chavez.

EU anti-terror head warns of threat

The EU's anti-terror chief warned Europe on Monday to remain on its guard, especially against the threat of European jihadists who are finding new safe havens from Syria to Mali.

Gilles de Kerchove, marking a day of remembrance for victims of terror, said the threat remained real whether "it stems from terrorist organisations or lone actors”.

Recent successes against al-Qaeda and associated groups, such as in Mali after the French intervention there in January, were positive, Kerchove said in a statement.

"But we know that terrorists are constantly seeking out new safe havens where they have space to operate, taking advantage of conflict situations," he said.

If most of those fighting to overthrow President Bashar Assad have a stake in the future of their country, "Syria has also turned into a destination for European jihadists who want to profit from the situation there, and who may also pose a threat to our societies upon their return," he said.

Pakistan, Nigeria, Yemen and the Horn of Africa remained unstable while the situation in the Maghreb and the Sahel also "has to be watched closely", he said.

"We must continue to help vulnerable countries address injustices, to combat terrorist ideology," at the same time fully respecting human rights and the rule of law, Kerchove said.

"Together, we must continue to fight terrorism in and outside Europe since far too many people have fallen victim to it," he concluded.

UN: Human rights abuses spiral in Iran

Human rights violations in Iran spiralled in 2012, a UN monitor said on Monday in a report spotlighting abuses including repression of freedom of speech, torture and secret executions.

"There has been an apparent increase in the degree of seriousness of human rights violations in the Islamic Republic of Iran," Ahmed Shaheed said in his report to the UN Human Rights Council (UNHRC).

Shaheed highlighted "frequent and disconcerting" reports about "punitive state action" against a number of groups, including the jailing of opposition politicians, journalists and human rights campaigners.

He also expressed concern about rights violations affecting women and religious and ethnic minorities, and retaliatory action against individuals that Tehran suspects of co-operating with UN monitors.

Such abuses remain "widespread", "systemic" and "systematic", said Shaheed, former foreign minister of the Maldives who was named the UN's Iran monitor in 2011.

Shaheed, who is forbidden from visiting the country, said he regretted Tehran's unwillingness to co-operate with him, despite his repeated efforts.

He wrote his report by contacting campaigners, exiles and victims of the abuses.

"Moreover, a lack of government investigation and redress generally fosters a culture of impunity," he said, emphasising that this undermined global human rights accords signed by Iran.

The torture of detainees was also an ongoing concern which Shaheed said he had raised in a previous report.

"The Iranian government maintained that allegations of torture in the country are baseless since the country's laws forbid the use of torture and the use of evidence solicited under duress," he said.

"The existence of legal safeguards does not in itself invalidate allegations of torture, and does not remove the obligation to thoroughly investigate such allegations," he added.

Turning his focus to executions, Shaheed said while 297 were officially announced by the government - 58 of them carried out in public - some 200 "secret executions" had been acknowledged by family members, prison officials or members of the judiciary.

Nearly 500 executions - both official and unofficial - were carried out in 2012, compared to 661 in 2011, and 542 the year before.

Despite that drop, the number of executions had, nevertheless, risen progressively in recent years, Shaheed said, having stood at less than a hundred a year a decade ago.

He said he was "alarmed" by the escalating rate "especially in the absence of fair trial standards" and for offences that did not warrant capital punishment including alcohol consumption, adultery and drug-trafficking.

All eyes on Vatican chimney

Forget all the artistic masterpieces. The most gazed-at item at the Vatican this week will be a humble, copper, 2m-high chimney that will pipe out puffs of smoke to tell the world if there's a new pope.

Black smoke means "not yet." White smoke means "pope elected."

When three Vatican firefighters hoisted the chimney to its perch a few days ago, it was a visual cue that preparations for the conclave to elect retired Pope Benedict XVI's successor were in high gear.

The Sistine Chapel and its magnificent Michelangelo-frescoed ceiling were made off limits to tourists. Two metal stoves were then installed in a far corner, away from the chapel's altar and the area where the cardinals will write out their picks for the next pope on slips of paper.

In the past, counted ballots went into just one iron stove along with damp wood chips or wet clumps of straw to create black smoke if the vote didn't yield a pope.

But the smoke signal system has been unreliable, triggering nervous cries of "It's white" and emphatic choruses of "No, it's black!" in the various tongues of the faithful and curious who flock to St Peter's Square for a glimpse of the chimney.

So in 2005, for the conclave that made Benedict pope, the Vatican tried something different: A second stove was installed that produces smoke from a chemical compound whipped up by the Vatican's own technicians. The smoke from the burned ballots from the first stove and the coloured smoke from the second stove were funnelled up one pipe that leads to the chimney and the outside world.

But that solution hardly made the distinction between black and white smoke any clearer - and confusion still was the order of the day.

It's a big unknown whether the Vatican has improved its technology this time around.

The sequestered cardinals will have a first chance to vote early on Tuesday evening. If they fail to pick a pope, the next few days can see as many as two rounds of balloting each morning and two rounds each afternoon, until one man clinches the required two-thirds majority.

The weather forecast promises to cloud the situation even further.

Rain, sometimes heavy, is predicted through Thursday, with Friday's skies forecast to be partly cloudy.

The Vatican says it will shine spotlights on the chimney for the evening votes.

In following the conclave, it will be wise not just to keep your eyes open, but your ears as well: The bells of St Peter's Basilica will be set ringing when a new pope has been chosen.

Bigger fights loom after fiscal deal

President Barack Obama and congressional Republicans looked ahead on Wednesday toward the next round of even bigger budget fights after reaching a hard-fought fiscal cliff deal that narrowly averted potentially devastating tax hikes and spending cuts.The agreement, approved late on Tuesday by the Republican-led House of Representatives after a bitter political struggle, was a victory for Obama, who had won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans.But it set up political showdowns over the next two months on spending cuts and on raising the nation's limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time."Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC, adding Republicans would have the political leverage against Obama in that debate. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."Republicans, who acknowledged they had lost the fiscal cliff fight by agreeing to raise taxes on the wealthy without gaining much in return, vowed the next deal would have to include significant cuts in government benefit programs like Medicare and Medicaid health care for retirees and the poor that were the biggest drivers of federal debt."This is going to be much uglier to me than the tax issue ... this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC."This is the debate that's going to be far more serious. Hopefully, now that we have this other piece behind us hopefully we'll deal in a real way with the kinds of things our nation needs to face," he said.Obama urged "a little less drama" when the Congress and White House next address thorny fiscal issues like the government's rapidly mounting $16 trillion debt load.The fiscal cliff showdown had worried businesses and financial markets, and US stocks soared at the opening after lawmakers agreed to the deal.The Dow Jones industrial average surged 262.45 points, or 2.00%, at 13 366.59. The Standard & Poor's 500 Index was up 29.79 points, or 2.09%, at 1 455.98. The Nasdaq Composite Index was up 77.45 points, or 2.57%, at 3 096.97. The crisis ended when dozens of Republicans in the House of Representatives buckled and backed a bill passed by the Democratic-controlled Senate that hiked taxes on households earning more than $450 000 annually. Spending cuts of $109bn in military and domestic programs were delayed only for two months.Economists had warned the fiscal cliff of across-the-board tax hikes and spending cuts would have punched a $600bn hole in the economy this year and threatened to send the country back into recession. House Republicans had mounted a late effort to add hundreds of billions of dollars in spending cuts to the package and spark a confrontation with the Senate, but it failed.In the end, they reluctantly approved the Senate bill by a bipartisan vote of 257 to 167 and sent it on to Obama to sign into law. "We are ensuring that taxes aren't increased on 99% of our fellow Americans," said Republican Representative David Dreier of California.The vote underlined the precarious position of House Speaker John Boehner, who will ask his Republicans to re-elect him as speaker on Thursday when a new Congress is sworn in. Boehner backed the bill but most House Republicans, including his top lieutenants, voted against it.The speaker had sought to negotiate a "grand bargain" with Obama to overhaul the US tax code and rein in health and retirement programs that will balloon in coming decades as the population ages. But Boehner could not unite his members behind an alternative to Obama's tax measures.Income tax rates will now rise on individuals earning more than $400 000 and families earning more than $450 000 per year, and the amount of deductions they can take to lower their tax bill will be limited. Low temporary rates that have been in place for the past decade will be made permanent for less-affluent taxpayers, along with a range of targeted tax breaks put in place to fight the 2009 economic downturn. However, workers will see up to $2 000 more taken out of their paychecks annually with the expiration of a temporary payroll tax cut.The non-partisan Congressional Budget Office said the bill will increase budget deficits by nearly $4 trillion over the coming 10 years, compared to the budget savings that would occur if the extreme measures of the cliff were to kick in. But the measure will actually save $650bn during that time period when measured against the tax and spending policies that were in effect on Monday, according to the Committee for a Responsible Federal Budget, an independent group that has pushed for more aggressive deficit savings.

US averts fiscal cliff

A weary Congress sent President Barack Obama legislation to avoid the economy-threatening fiscal cliff of middle class tax increases and across-the-board spending cuts late on Tuesday night, hours before financial markets reopen after the New Year's holiday.The bill's passage on a 257-167 vote in the House of Representatives sealed a hard-won political triumph for the president less than two months after he secured re-election while calling for higher taxes on the wealthy.The economic as well as political stakes were considerable. Economists have warned that without action by Congress, the tax increases and spending cuts that technically took effect with the turn of the new year at midnight could cause unemployment to spike and send the economy into recession.The extraordinary late-night House vote took place less than 24 hours after the Senate passed the measure in the pre-dawn hours on New Year's Day. The legislation cleared the Senate hours after Vice-President Joe Biden and Senate Republican Leader Mitch McConnell, veteran negotiators, sealed a deal.In addition to neutralising middle class tax increases and spending cuts that technically took effect on Monday at midnight, the legislation raises tax rates on incomes over $400 000 for individuals and $450 000 for couples. Remarkably, in a party that swore off tax increases two decades ago, dozens of Republicans supported the bill in both houses of Congress.Supporters of the bill in both parties expressed regret that the bill was narrowly drawn, and fell far short of a sweeping plan that combined tax changes and spending cuts to reduce federal deficits. That proved to be a step too far in the two months since Obama called congressional leaders to the White House for a post-election stab at compromise.Majority Republicans did their best to minimise the bill's tax increases, just as they abandoned their demand from earlier in the day to add spending cuts to the package "By making Republican tax cuts permanent, we are one step closer to comprehensive tax reform that will help strengthen our economy and create more and higher pay cheques for American workers," said Rep Dave Camp of Michigan, chairperson of the tax-writing House Ways and Means Committee.He urged a vote for passage to "get us one step closer to tax reform in 2013" as well as attempts to control spending.House Democratic leader Nancy Pelosi also said the legislation included "permanent tax relief for the middle class", and she summoned lawmakers to provide bipartisan support as the Senate did.The bill would prevent an expiration of extended unemployment benefits for an estimated two million jobless, renew tax breaks for businesses and renewable energy purposes, block a 27% cut in fees for doctors who treat elderly Medicare patients, stop a $900 pay increase for lawmakers from taking effect in March and head off a threatened spike in milk prices.The bill would also raise the top tax rate on large estates to 40% from 35%, and taxes on capital gains and dividends over $400 000 for individuals and $450 000 for couples would be taxed at 20%, up from 15%.It would stop $24bn in spending cuts set to take effect over the next two months, although only about half of that total would be offset with spending reductions elsewhere in the budget.Even with enactment of the legislation, taxes are on the rise for millions.A 2 percentage point temporary cut in the Social Security payroll tax, originally enacted two years ago to stimulate the economy, expired with the end of 2012. Neither Obama nor Republicans made a significant effort to extend it.The fiscal cliff measure had cleared the Senate on a lopsided pre-dawn New Year's vote of 89-8, and House Republicans spent much of the day struggling to escape a political corner they found themselves in."I personally hate it," Rep John Campbell of California said of the measure, giving voice to the concern of many Republicans that it did little or nothing to cut spending.Majority Leader Eric Cantor, the No 2 House Republican, told reporters at one point: "I do not support the bill. We are looking, though, for the best path forward."Within hours, Republicans abandoned demands to add spending cuts to the bill and agreed to a simple yes-or-no vote on the Senate-passed bill.They feared that otherwise the Senate would refuse to consider any alterations, sending the bill into limbo and saddling Republicans with the blame for a whopping middle class tax increase. One Senate Democratic leadership aide said majority leader Harry Reid would "absolutely not take up the bill" if the House changed it. The aide spoke on condition of anonymity, citing a requirement to keep internal deliberations private.If the House failed to pass the Senate bill it would mean that any fiscal deal would have to start all over when a new Congress, with dozens of new members, is seated Thursday. And any change in the legislation would require the Senate to re-pass the measure before it could go to Obama for his signature.Despite Cantor's remarks, Speaker John Boehner took no public position on the bill as he sought to negotiate a conclusion to the final crisis of a two-year term full of them.House Democrats met privately with Biden for their review of the measure and the party's leader, Pelosi, said afterward that Boehner should permit a vote.The non-partisan Congressional Budget Office said the measure would add nearly $4 trillion over a decade to federal deficits, a calculation that assumed taxes would otherwise have risen on taxpayers at all income levels. There was little or no evident concern among Republicans on that point, presumably because of their belief that tax cuts pay for themselves by expanding economic growth and do not cause deficits to rise.The relative paucity of spending cuts was a sticking point with many House Republicans. Among other items, the extension of unemployment benefits costs $30bn, and is not offset by savings elsewhere.For all the struggle involved in the legislation, even its passage would merely clear the way for another round of controversy almost as soon as the new Congress convenes.With the Treasury expected to need an expansion in borrowing authority by early spring, and funding authority for most government programs set to expire in late March, Republicans have made it clear they intend to use those events as leverage with the administration to win savings from the Medicare health care programme for the elderly and other government benefit programmes.McConnell said as much moments before the 02:00 Tuesday vote in the Senate - two hours after the advertised "cliff" deadline."We've taken care of the revenue side of this debate. Now it's time to get serious about reducing Washington's out-of-control spending," he said. "That's a debate the American people want. It's the debate we'll have next. And it's a debate Republicans are ready for."Obama, who had campaigned for re-election on the promise of protecting households making under $250 000 a year from a tax increase, praised the agreement after the Senate's vote. Some liberal Democrats were disappointed that the White House did not stick to a harder line in negotiations, considering that Obama nlonger faces re-election."While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," Obama said in a statement. "This agreement will also grow the economy and shrink our deficits in a balanced way - by investing in our middle class, and by asking the wealthy to pay a little more."The fiscal cliff came about because tax rate cuts enacted in 2001 and 2003 during president George W Bush's administration were set to expire at the end of the year.The threatened across-the-board reductions in government spending, which would slice money out of everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut spending. That solution grew out of the two parties' inability in 2011 to agree to a grand bargain that would have taken a big bite out of the deficit which has averaged about $1 trillion a year.If Obama and Congress failed to act, about $536bn in tax increases touching nearly all American workers and about $110bn in spending cuts, about 8% of the annual budgets for most federal departments, were scheduled to start going into effect beginning in January. 

Digital sales break £1bn barrier

Greek manufacturing activity shrank for the 40th month running in December, hurt by weak domestic demand and slumping export orders, leading firms to shed yet more jobs, a survey showed on Wednesday.Markit's purchasing managers' index (PMI) for Greek manufacturing, which accounts for roughly 15% of the economy, fell to 41.4 points in December from 41.8 in November. The index has now held below the 50 mark dividing growth from contraction ever since September 2009, just before the country's massive debt problems came to light, triggering the crisis that has plagued Greece.December's decline in manufacturing output was the steepest in four months, bringing the average for the fourth quarter to 41.4, down from an average reading of 42.0 in the third quarter.In November, Greece adopted a new round of austerity measures to qualify for its next batch of EU/IMF bailout payments, expected to keep its economy in recession for the sixth straight year in 2013.The government expects gross domestic product (GDP) to contract by 4.5% next year from 6.5% in 2012."December data showed no sign of the downturn in Greece's manufacturing sector easing," said Markit senior economist Phil Smith."Of particular concern was a faster contraction in new export orders, a trend which has deteriorated considerably since the start of the year," he said.Greek manufacturers saw a near-record drop in new orders from abroad in December, exceeded only by heavier falls in November 2008 and January 2009.Weak sales led manufacturers to shed staff again in December, weighing on the country's record-high unemployment rate of 26%. Almost 24% of surveyed firms reported a reduction in payroll numbers since November. Despite falling demand, input price inflation continued to rise in December on the back of higher raw material prices. Competitive pressures led firms to cut output prices to secure new business.

Singapore growth quells recession fears

Singapore's economy grew in the fourth quarter, avoiding a technical recession despite disappointing growth figures for 2012, government data showed on Wednesday. Gross domestic product (GDP) rose 1.1% year-on-year in the three months to December from zero growth in the previous quarter, the Ministry of Trade and Industry said .On a quarter-on-quarter basis, the trade-dependent economy expanded by a seasonally adjusted annualised 1.8%, reversing a revised 6.3% contraction in the third quarter. The figures are based on estimates. Analysts feared the economy had likely slipped into a technical recession after two successive quarters of contraction. Prime Minister Lee Hsien Loong said in a speech on 1 January 2013 that GDP rose 1.2% for the full year. This was below the government's target for the economy to expand 1.5-2.5%"Overall growth of just over 1.0% is low by historical standards but it's still growth," said CIMB Research economist Song Seng Wun.The manufacturing sector shrank by an annualised 10.8% quarter-on-quarter as the European debt crisis and the sluggish US economy weakened global demand. Manufacturing contracted by 0.2% in 2012.Construction also contracted 8.9% quarter-on-quarter but grew 8.8% on year. The services sector expanded 1.2% overall in 2012.Premier Lee said GDP was expected to grow 1.0-3.0% in 2013 due to expected continued weakness in global demand.

India aims to stop welfare fraud

India will pay billions of dollars in social welfare money directly to its poor, under a new program that aims to cut out the middlemen blamed for the massive fraud that plagues the system.Previously officials only handed out cash to the poor after taking a cut - if they didn't keep all of it for themselves and were known to enrol fake recipients or register unqualified people. The program inaugurated on Tuesday would see welfare money directly deposited into recipients' bank accounts and require them to prove their identity with biometric data, such as fingerprints or retina scans.Finance Minister P. Chidambaram has described the venture as "nothing less than magical," but critics accuse the government of hastily pushing through a complex program in a country where millions don't have access to electricity or paved roads, let alone neighbourhood banks.The program is loosely based on Brazil's widely praised Bolsa Familia program, which has helped lift more than 19m people out of poverty since 2003. It will begin in 20 of the country's 640 districts on Tuesday, affecting more than 200 000 recipients, and will be progressively rolled out in other areas in the coming months, Chidambaram said Monday. The country has 440m people living below the poverty line.  "In a huge new experiment like this you should expect some glitches. There may be a problem here and there, but these will be overcome by our people," Chidambaram said.He appealed for patience with the program, which he called "a game changer for governance."The opposition Bharatiya Janata Party has accused the ruling Congress party of using the program to gain political mileage ahead of elections expected in 2014.As a first step, the government has said it plans to begin directly transferring money it would spend on programs such as scholarships and pensions.Eventually the transfers are expected to help fix much of the rest of India's welfare spending, though Chidambaram said the government's massive food, kerosene and fertilizer distribution networks - which are blamed for much of the corruption and lost money would be exempt.The program will eliminate middlemen and transfer cash directly into bank accounts using data from Aadhar, a government project working to give every Indian identification numbers linked to fingerprints and retina scans. Currently hundreds of millions of Indians have no identity documents.On Monday, 208 activists and scholars published an open letter expressing concern that the government was forcing the poor to enroll in Aadhar to get welfare benefits without putting safeguards in place to protect their privacy. They also expressed fears that the government planned to eventually replace the food distribution system for the poor, the largest program of its kind in the world."Essential services are not a suitable field of experimentation for a highly centralized and uncertain technology," they wrote. Others said the government was trying to do too much too soon."A very important concern is if we are ready for this sort of thing. The banking infrastructure is very poor, people are far from these banks, when they exist they are overcrowded. Sometimes people have to walk for a day to get to the bank," says Reetika Khera, a development economist with the New Delhi-based Institute for Economic Growth.Mihir Shah, a member of India's Planning Commission accepts that the government's timeline is "unrealistic," but said many critics had confused the lack of readiness with flaws in the plan itself."My question to them is, is it better than what is there today? That is the only way we can judge policy. I don't think there's a perfect solution to any of mankind's problems," he said.Shah said a lot more work needed to be done before cash transfers could become a reality across the country. The identification drive needed to reach the vast majority of India's poor, and villages needed banking infrastructure and Internet connectivity.

NEWS,02.12.2012

Osborne sticking with UK austerity plan

British finance minister George Osborne said on Sunday that he would stick with his deficit-reduction programme when he presents a half-yearly fiscal statement on Wednesday. The Chancellor of the Exchequer declined to comment more specifically on whether he would be able to meet debt targets, but stressed he did not believe Britain should borrow more or increase spending. At his "Autumn statement" on Wednesday, Osborne is expected to defend his stringent economic policies as the only credible way of solving the government's biggest political problem - its failure to deliver a strong recovery. "It's clearly taking longer to deal with Britain's debts, it's clearly taking longer to recover from the financial crisis than anyone would have hoped, but ... to turn back now ... would be a complete disaster for our country," he said in a BBC television interview. British media reported on Sunday that Osborne plans to cap the amount of tax relief high earners receive on their pension contributions alongside reining in the welfare budget. Osborne declined to comment on the reports, but did not reject the proposals directly when questioned in the interview. He also declined to say if the country's independent fiscal watchdog would show him still on track to eliminate Britain's underlying budget deficit within the next five years, or to have debt as a share of national income on a downward path by the 2015/16 tax year.

Merkel not ruling out Greek 'haircut'

German Chancellor Angela Merkel has not ruled out a so-called "haircut", or write-down, on Greek debt in the next few years, in an interview with a Sunday newspaper, marking an apparent softening in position.After being vehemently opposed to accepting a "haircut," Merkel told Bild am Sonntag that it could be considered from 2014 if Greece's financial situation improves, according to a pre-released article."If Greece one day again manages with its revenue without getting new debt, then we must look at and assess the situation. That is not the case before 2014/15 if everything goes according to plan," she told the paper.Opposition politicians have accused Merkel of playing down the need for a write-down of Greek debt holdings by public institutions such as other eurozone governments and the European Central Bank, because of federal elections expected to take place on September 22.In the Bild interview, Merkel contested that she had refused a "haircut" due to the looming elections."The current aid programme for Greece runs until 2014, for the achievement of certain budgetary goals we have given the Greeks two years more time until 2016," she said.Many in Germany consider a write-down of Greek debt holdings inevitable.But on Friday, Finance Minister Wolfgang Schaeuble said speculation on a "haircut" sent "the wrong incentive" to Greece because it reduced the pressure on the Athens government to enact structural economic reforms.Some eurozone states have said they would "not exclude" the possibility of writing off some debt from 2015 onwards.Merkel also said she favoured considering tougher sanctions for indebted eurozone states."In the long term I am definitely of the opinion that we consider how we develop in our law procedures for states which do not comply with their commitments," she said.Merkel also told Bild that she understood the scepticism of many of her compatriots over Greece but that she saw a determination in Athens to reorganise the country and that rescuing Greece from economic collapse was in Germany's best interests.On Friday she secured the vote from German lawmakers to release €43.7bn in aid to debt-wracked Greece agreed after tortuous talks between eurozone finance ministers.

UK over-50s ignorant about retirement

Britain's over-50s are in blissful ignorance of how little their pension pots will pay out and need an urgent financial health check if their retirements are to be as comfortable as they expect, an industry report said. Workers approaching retirement in the next 15 years need to see their pension pots grow by almost 80% to meet their expectations, the National Association of Pension Funds (NAPF) said on Friday. "Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last," Joanne Segars, chief executive of the NAPF, said in a statement. The burden of managing a pension at retirement has increasingly fallen on employees, as defined contribution (DC) pensions, rather than final-salary schemes, become the more dominant form of retirement saving. The introduction of the government-backed auto-enrolment scheme where people are required to opt out rather than opt into retirement saving could lead up to 8 million additional workers being signed up for pensions, which will likely be DC pension memberships. Yet a third of workers aged 52 to 64 remain ignorant about what their private pension income may provide in retirement, while 59% of workers have never thought about how many years of retirement they need to finance, a report by the Institute for Fiscal Studies and supported by the NAPF said. Women in their 50s are living to an average of 88 - four years longer than expected - while men are living to 85, overshooting life expectancy by around two years, when compared with national projections of life expectancy, the report said. Annuities, which many British retirees buy to ensure a steady income, are meanwhile becoming more expensive, meaning people will expect their savings pots to generate a higher annuity income than it actually does. Private pension firms have also been accused of failing to disclose some of the costs they levy on customers' investment funds, leaving people unaware that their pension savings were being eroded by the charges. The NAPF represents 1 300 pension schemes in the UK with 16 million members and assets of around £900bn.

North Korea plans new rocket launch

North Korea said it would carry out its second rocket launch of 2012 as its youthful leader Kim Jong-un flexes his muscles a year after his father's death, in a move that South Korea and the US swiftly condemned as a provocation.North Korea's state news agency announced the decision to launch another space satellite on Saturday, just a day after Kim met a senior delegation from China's Communist Party in the North Korean capital of Pyongyang.China, under new leadership, is North Korea's only major political backer and has continually urged peace on the Korean peninsula, where the North and South remain technically at war after an armistice, rather than a peace treaty, ended the 1950 - 1953 conflict.No comment on the planned launch was available from Beijing's foreign ministry.In Washington, US State Department spokesperson Victoria Nuland condemned the launch plan as a provocative threat to the Asia-Pacific region that would violate UN resolutions imposed on Pyongyang after past missile tests."A North Korean 'satellite' launch would be a highly provocative act that threatens peace and security in the region," she said in a written statement."North Korea must abide by its international obligations under UN Security Council resolutions that clearly articulate what it can and cannot do with respect to missile technologies," said Pentagon spokesperson George Little.Seoul's foreign ministry called the move a "grave provocation". Japan's Kyodo news agency said Prime Minister Yoshihiko Noda had ordered ministries to be on alert for the launch."North Korea wants to tell China that it is an independent state by staging the rocket launch and it wants to see if the United States will drop its hostile policies," said Chang Yong-seok, a senior researcher at the Institute for Peace Affairs at Seoul National University.North Korea is banned from conducting missile or nuclear-related activities under UN resolutions imposed after earlier nuclear and missile tests. The country says its rockets are used to put satellites into orbit for peaceful purposes, but that assertion is not widely accepted outside of Pyongyang.Washington and Seoul believe that the impoverished North is testing long-range missile technology with the aim of developing an intercontinental ballistic missile capable of carrying a nuclear warhead.Pyongyang's threats are aimed, in part, at winning concessions and aid from Washington, analysts say.The failed April rocket launch took place to celebrate the 100th anniversary of the birth of North Korea founder Kim Il Sung and the latest test will take place close to the 17 December date of the death of former leader Kim Jong-il.It will also come as South Korea gears up for a 19 December presidential election in a vote that pits a supporter of closer engagement with Pyongyang against the daughter of South Korean dictator Park Chung-hee.The April test was condemned by the UN, although taking action against the North is hard as China refuses to endorse further sanctions against Pyongyang.North Korea is already one of the most heavily sanctioned states on earth thanks to its nuclear programme.Pyongyang has few tools to pressure the outside world to take it seriously due to its diplomatic isolation and its puny economy.The state that Kim Jong-un inherited last December after the death of his father boasts a 1.2 million-member military, but its population of 23 million, many malnourished, supports an economy worth just $40bn annually in purchasing power parity terms, the US Central Intelligence Agency asserts."The North's calculation may be that they have little to lose by going ahead with it at this point," said Baek Seung-joo of the Korea Institute for Defence Analyses in Seoul.Baek said the test planned for December would likely be no more successful in launching a satellite than the April one that crashed into the sea between China and North Korea after flying just 120km. "Kim Jong-un may be taking a big gamble trying to come back from the humiliating failure in April and in the process trying to raise the morale for the military," Baek said.North Korea's space agency said on Saturday that it had worked on "improving the reliability and precision of the satellite and carrier rocket" since April's launch.

NEWS,25.11.2012

Thousands of Italians rally against austerity

Tens of thousands of students and workers rallied across Italy today, to protest against austerity measures imposed by Prime Minister Mario Monti's technocrat government.Appointed a year ago when Italy came close to a Greek-style debt crisis, Monti has pushed through painful tax increases and spending cuts to try to rein in public finances at a time when schools and universities say they desperately need more support."We need to fight for our rights. This government doesn't represent us and these austerity measures and all the cuts they've introduced are totally anti-democratic," said student protester Tommaso Bernardi, attending a rally in Rome.Far-right group Casapound marched through the capital Rome later on Saturday, chanting "Monti, go away!". Anti-fascists staged a counter-demonstration in another part of town."This government is making the nation starve and is destroying the social welfare system," said Casapound president Gianluca Iannone. "The weakest are hit hardest - the disabled, students and single-income families."Police organised different routes and times for the rallies to reduce the risk of violence after scuffles broke out between police and demonstrators during protests on November 14 that saw the police criticised for heavy-handed tactics.Several thousand students and workers also rallied in other cities including Naples, Florence and Catania.No clashes were reported but the widespread protests highlighted the scale of discontent in the recession-hit country ahead of parliamentary elections next year."We need to change this country, starting from investments in schools, universities and culture," said Michele Orezzi, a university union coordinator, adding that Italy's education system was "crumbling into pieces".With youth unemployment at about 35%, more than three times the national average, and Monti's austerity policies biting into education spending, school pupils and university students have taken an active role in anti-government protests.Much anger is focused on an education reform bill going through parliament that would give schools more autonomy and allow them to accept other sources of funding than the state. Protesters believe this is intended to encourage privatisation.Students have occupied schools around Rome in recent weeks to express their anger and frustration at repeated funding cuts, chaining gates shut and camping inside classrooms.Monti has defended his austerity plan, saying he believes his technocrat government will be remembered for having helped Italy pull itself out of a deep economic crisis without needing to resort to external aid.Italy has been the European Union's most sluggish economy for more than a decade, fuelling investor concerns about its ability to bring down public debt of around 126% of output.

World Week Ahead: Deal or no deal for Greece?

Two deals might help extend last week's momentum on equity markets in the US and Europe -one that helps the US avoid its fiscal cliff and a second that would end the immediate threat of Greece defaulting on its debt.Optimism was fuelled on both fronts last week, though the timing for an agreement by US lawmakers on preventing automatic tax increases and spending cuts worth about US$607 billion set to kick in on January 1 remains more open-ended. Officials from the White House and Congress will resume negotiations this week.US President Barack Obama said on November 18 he was "confident" a new US budget deal would be reached. Meanwhile, EU commissioner Olli Rehn on Thursday said he saw no reason a deal on Greece could not be concluded tomorrow when euro-zone finance ministers, the International Monetary Fund and the European Central Bank meet again.Greek Finance Minister Yannis Stournaras expressed confidence that the IMF would ease earlier deficit targets imposed on the debt-stricken nation, thus opening the door to the transfer of more funds."It's a done deal," Stournaras told reporters in Brussels on Friday after meeting with EU officials and IMF Managing Director Christine Lagarde, Bloomberg reported.Commitment to resolving budgetary and debt issues that risk hampering both US and European economies bolstered stocks last week.In the Thanksgiving holiday shortened week in the US, the Dow Jones Industrial Average gained 3.3%, the Standard & Poor's 500 advanced 3.6% and the Nasdaq Composite climbed 4%.In the past five days, the benchmark Stoxx Europe 600 Index jumped 4%. It is the first time the gauge has gained every day of the week since July 1, 2011, according to Bloomberg.The advance in European stock prices came even though EU leaders struggled to see eye to eye in talks about the next seven-year budget for the region and a two-day meeting late last week ended in failure.European Council President Herman Van Rompuy said they decided to abandon the special summit on the 2014-2020 EU budget, worth about 1 trillion euros, and would try to reach a compromise early next year, according to Reuters.On the US economic front in the days ahead, investors will eye the latest reports on durable goods orders and consumer confidence on Tuesday, weekly jobless claims on Thursday, the Chicago Purchasing Managers Index and personal income and outlays on Friday. The Federal Reserve's beige book is due on Wednesday.Also, three reports on the housing market might confirm the recent data indicating strength and optimism in this industry's pace of recovery.The S&P/Case-Shiller home price index for September, due Tuesday, is expected to show the eighth straight month of increases, while new home sales for October, due Wednesday, and October pending home sales data, due Thursday, are also expected to show a stronger housing market.The US Treasury is set to auction US$35 billion of two-year notes on Tuesday, US$35 billion of five-year securities Wednesday and US$29 billion of seven-year debt on Thursday.The first clues on how retailers fared on Black Friday, the day after Thanksgiving, will also provide a helpful indicator on the state of the American consumer. The National Retail Federation predicts sales during the holiday season to increase 4.1% this year, down from last year's 5.6% growth.On Friday, Europe offered some surprisingly good economic news. The Ifo institute's business climate index unexpectedly rose, climbing to 101.4 in November from 100 in October, the first increase in eight months.That helped the euro finish what had already been a good week on an even more positive note, rising 1.8% against the greenback and climbing 3.2% against the Japanese yen in the past five days."Certainly sentiment towards euro has changed," Camilla Sutton, chief currency strategist in Toronto at Bank of Nova Scotia, told Bloomberg News. The euro "rallied slightly again after we got German confidence numbers, which highlighted better-than-expected business sentiment."

International arbitration for tax disputes

The United States is undefeated in the nearly two years since it began settling corporate tax disputes with Canada through a winner-takes-all process popularly known as baseball arbitration.Tax lawyers and accountants in both countries said the US Internal Revenue Service had won three of the binding decisions and Canada none. They said the IRS had collected a significant sum of money, possibly in excess of $100m.Launched in December 2010, the arbitrations follow the rules for resolving salary disputes between Major League Baseball players and their teams. In the tax game, however, the companies forced to pay and the payments remain confidential. The United States has had similar agreements with France since 2004 and Belgium and Germany from 2006, but no cases involving them have gone to baseball arbitration, the tax experts said.Baseball arbitration plans are in pending tax treaties with Hungary, Luxembourg and Switzerland. Future treaties with the United Kingdom and Japan may have the same provisions, tax experts said.The arbitration process arises often in tax questions involving a multinational company's transfer pricing taxes, where two countries disagree over which of them should collect corporate taxes. The winning country gets the tax revenue. The loser goes home empty-handed. Companies like the baseball arbitration provision because it lends certainty to their tax bills. Companies can request that countries go to arbitration if revenue agents cannot settle their tax disputes in two years.Aiming too high?The arbitration panels are made up of three experts, one chosen by each country and the third by the other two experts. Revenue agents from each country submit a tax bill number to the panel. The panel picks the number it thinks is closest to the right answer. Tax experts on both sides said Canada had lost all three disputes because it was trying to hit home runs  seeking too much in taxes during arbitration."Canada has lost three in a row," said Dale Hill, a former manager of Canada's cross-border tax negotiations with the United States and a partner with Gowling Lafleur Henderson LLP in Ottawa. "Maybe Canada has been more aggressive," Hill said.David Rosenbloom, a Washington, DC-based US tax lawyer at Caplin & Drysdale, said: "The Canadian Revenue Agency has developed over the years a habit of taking really extreme and unwarranted positions. It's almost as though they're unaware arbitration is in the treaty." Richard McAlonan, who directs the IRS negotiating program,his month that the agency had resolved a "handful" of the cases. He declined further comment. The Canadian Revenue Agency said in a statement that it prefers to resolve its tax disputes with the United States "at the negotiating table". Going to arbitration "would be the last resort", the CRA said. It declined to comment on the cases, citing confidentiality rules in the treaty. Canada's losses may mean its revenue agents will be more cautious in tax negotiations with the United States. The countries negotiate 75 to 100 cases a year, Hill said. "It's going to get tougher for Canada to negotiate," he said. Treaties pending The tax treaties with Hungary, Luxembourg and Switzerland passed the US Senate Foreign Relations Committee in 2011. But Republican Senator Rand Paul has so far prevented all three treaties from going before the full Senate.A spokesperson for Paul could not be reached for comment. Paul has previously objected to the treaties' provisions that require more sharing of US taxpayer information. New treaty arbitration provisions with Switzerland and the UK would especially benefit the pharmaceutical industry, while auto companies would appreciate the provision in a Japanese treaty, said Lorraine Eden, a professor at Texas A&M University.Companies in both sectors have a lot of transfer pricing tax uncertainty and can face double taxation if unable to force countries into binding arbitration, she said.UK-based GlaxoSmithKline reached a $3.4bn transfer pricing settlement with t he IRS in 2006. But the UK did not accept the US settlement, and Glaxo faced UK taxes on the same profits, Eden said."Would they like the opportunity to go to binding arbitration and settle this? Absolutely," Eden said.

NEWS,18.10.2012

Clashes erupt at Greek anti-austerity protests

Greek police clashed with anti-austerity protesters hurling stones and petrol bombs on the day of a general strike that brought much of the near-bankrupt country to a standstill.In the second major walkout in three weeks, almost 40,000 protesters marched in Athens in a bid to show EU leaders meeting in Brussels that new wage and pension cuts will only worsen their plight after five years of recession.Tensions mounted when a small group of protesters began throwing pieces of marble, bottles and petrol bombs at police barricading part of the square in front of parliament, prompting riot police to fire several rounds of teargas to disperse them.A 65-year old protester died of a heart attack, hospital sources. Another three people were injured. Police detained about 50 protesters suspected of attacking them.Most business and public sector activity ground to a halt at the start of the 24-hour strike called by the country's two biggest labour unions, ADEDY and GSEE."Enough is enough. They've dug our graves, shoved us in and we are waiting for the priest to read the last words," said Konstantinos Balomenos, a 58-year-old worker at a water utility whose wage has been halved to 900 euros and who has two unemployed sons.It was the third time since late September that tens of thousands of Greeks have taken to the streets holding banners and chanting slogans to show their anger at austerity policies imposed by EU and IMF lenders in exchange for aid.Some were carrying Greek, Spanish and Portuguese flags and shouted: "EU, IMF out"."Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite," said Yannis Panagopoulos, head of the GSEE private sector union, one of two major unions that represent about 2 million people, or half of Greece's workforce.Greece is stuck in its worst downturn since World War Two and must make at least 11.5 billion euros of cuts to satisfy the "troika" of the European Commission, European Central Bank and IMF, and secure the next tranche of a 130-billion-euro bailout.Lenders demand austerity European Union leaders will try to bridge their differences over plans for a banking union at a two-day summit which starts on Thursday. No substantial decisions are expected, reviving concerns about complacency in tackling the debt crisis which exploded three years ago in Greece.The austerity policies being pursued in Europe's indebted Mediterranean countries at the behest of Germany and other rich euro zone members will drive the euro apart, protesters warned."This can't go on. We sure need measures but not as tough as the ones (German Chancellor Angela) Merkel is asking for," said Dimitris Mavronassos, a 40-year-old shipyard worker who has not been paid for six months.The strike emptied streets and offices in Athens. Ships stayed in port, Athens public transport was disrupted and hospitals were working with emergency staff, while public offices, ministries, bakeries and other shops were shut.Newspaper kiosk owners, lawyers, taxi drivers and air traffic controllers were among those protesting over the cuts, which include further drastic reductions in welfare and health spending.Opinion polls show rising anger with the terms of the bailout keeping the economy afloat, and Greeks becoming increasingly pessimistic about their country's future."The new, painful package should not be passed," the ADEDY public sector union said in a statement."The new demands will only finish off what's left of our labour, pension and social rights."During Hundreds of youths pelted riot police with fire bombs, bottles and chunks of marble Thursday as yet another Greek anti-austerity demonstration descended into violence, less than a month after more intense clashes broke out during a similar protest.Authorities said around 70,000 protesters took to the street in two separate demonstrations in Athens during the country's second general strike in a month as workers across the country walked off the job to protest new austerity measures the government is negotiating with Greece's international creditors.Thursday's strike was timed to coincide with a European Union summit in Brussels later in the day, at which Greece's economic fate will likely feature large.Riot police responded with volleys of tear gas and stun grenades in the capital's Syntagma Square outside Parliament as protesters scattered during the clashes, which continued on and off for about an hour. Another general strike in late September had also seen limited, but much more intense, clashes between protesters and police.A 65-year-old protester suffered a fatal heart attack during the demonstration but efforts to revive him failed. The organizers of the protest march he participated in said the man had fallen ill before any rioting had broken out.Four demonstrators were injured after being hit by police, volunteer paramedics said. The Health Ministry said two of the protesters were treated in hospital and that their injuries were not serious. Three policemen also required hospital treatment.Hundreds of police had been deployed in the Greek capital ahead of the demonstration. Police said seven people were arrested Thursday, out of more than 100 detained.The strike grounded flights, shut down public services, closed schools, hospitals and shops and hampered public transport in the capital. Taxi drivers joined in for nine hours, while a three-hour work stoppage by air traffic controllers led to flight cancellations. Islands were left cut off as ferries stayed in ports.Athens has seen hundreds of anti-austerity protests over the past three years, since Greece revealed it had been misreporting its public finance figures. The country has been surviving since then with the help of two massive international bailouts worth a total (EURO)240 billion ($315 billion). To secure them, it has committed to drastic spending cuts, tax hikes and reforms, all with the aim of getting the state coffers back under some sort of control.But while significantly reducing the country's annual borrowing, the measures have made the recession worse. By the end of next year, the Greek economy is expected to be around three quarters of the size it was in 2008. And with one in four workers out of a job, Greece has, along with Spain, the highest unemployment rate in the 27-nation European Union."We are sinking in a swamp of recession and it's getting worse," said Dimitris Asimakopoulos, head of the GSEVEE small business and industry association. "180,000 businesses are on the brink and 70,000 of them are expected to close in the next few months."The country's four-month-old coalition government is negotiating a new austerity package with debt inspectors from the EU, International Monetary Fund and European Central Bank. The idea is to save (EURO)11 billion ($14.4 billion) in spending largely on pensions and health care and raise an extra (EURO)2.5 billion ($3.3 billion) through taxes."In 2011, only 20 percent of businesses were profitable," Asimakopoulos said. "So these new tax measures present small businesses with a choice: Dodge taxes or close your shop."After more than a month and a half of arguing, a deal seems close. On Wednesday, representatives from the EU, International Monetary Fund and European Central Bank, said there was agreement on "most of the core measures needed to restore the momentum of reform" and that the rest of the issues should be resolved in coming days.

Why Spain's Economic Doldrums Could Be Good For Startups

 

Spain is having a rough month. Again.Standard & Poor's downgraded its rating on the country by two notches last week, which has brought Spain close to junk status. On Saturday, thousands of people marched through the streets of Madrid, where they protested the Spanish government's latest austerity cuts. And the country's hiring situation remains bleak, with unemployment hovering around 25 percent.But could this kind of sour environment ultimately turn out to be a sweet one for start-ups?"This landscape is perfect for entrepreneurship," says Josemaria de Churtichaga, associate dean for IE School of Architecture in Madrid. "I'm not defending the crisis but in some way the crisis is helping to change or should help to change the attitude within the young people, which I think is the mass that is suffering more -- and, at the same time, is the mass that has been living too well for the last decades, too protected from their parents, too protected by the state."Certain universities in Spain are more aggressively pushing for the creation of homegrown entrepreneurs who could launch and oversee new ventures and the Spaniards who might work there. One tactic, besides teaching courses on entrepreneurship: getting students from business schools as well as engineering or science departments to participate in startup or acceleration labs, and prepping recent grads to pitch their business plans in front of potential investors. But the academic efforts may also mean students both those wanting to launch a business, and others seeking a job at an existing organization need to be taught to become much more competitive as a way to survive in Spain's uncertain economy. "I sometimes wonder whether we should emphasize more some facets of managerial personality, like competition," says Santiago Iniguez de Onzono, dean of IE Business School in Madrid. "Should we make our graduates more fierce, more willing to compete in a really tough way as some others do?"Companies are also playing a nurturing role in the growth of new startups. Everis, a technology consultancy that is headquartered in Madrid, hosts speed dating-like meetings between entrepreneurs and investors, who boast more than 40 million euros in funds to help grow startups during the first stage of operation. The initiative could spur innovation and job creation in the country's tech sector, says David Garcia Hernandez, a director at Eversis.Creative minds have also carved out a space in an old garage near Madrid's CaixaForum Museum for entrepreneurs who want to start or nurture enterprises with a socially driven mission. Known as Hub Madrid, which launched three years ago, it is designed to be a shared working space where member entrepreneurs "are challenging you, provoking you, inspiring you to do what it is you're passionate about and also makes an impact," says Max Oliva, a Hub Madrid co-founder. Around 300 members have been paying between 15 to 300 euros a month to garner access to this shared space. It encourages collaboration through rounded desks, where there is no hierarchical "head" of the table, as well as non-ergonomic seats that regularly "encourage" people to get up and mingle near the kitchen or a library built of old wine cases. A second floor is being completed, where giant holes punched through the walls are supposed to encourage more discussion flow and better opportunities for eavesdropping, which could lead to new collaborations. "It's an ever-changing space to provoke sparks, to provoke accidents, to provoke failures that are positive failures," says Churtichaga, who helped design Hub Madrid.Other companies are working closely with local universities to provide additional training to students who are looking for a leg up in a tough hiring climate. Emzingo, for one, sends MBA candidates from Spain and other countries from around the world to South Africa and Peru, where students work with NGOs to improve and expand operations through mini-consulting projects. The for-profit social enterprise provides students with leadership development training as part of the experience and is a growing network of alumni (more than 75 so far), including some who have landed jobs at companies such as McKinsey, PwC, Bayer and Johnson & Johnson. "We're working now [on] placement after the MBA, so that's an extra benefit that you get for going through the program," says Pablo Esteves, who is based in Madrid and works as Emzingo's director of branding and partnerships.

Exhibition explores love, hate of money

New York - How does money make you feel? Fearful, stressed, happy?

US financial guru Suze Orman has teamed with the producer of the popular Body Worlds exhibits for a new traveling show to look at how we relate to and understand money.Orman, media star and author of best-selling books on personal finance, described the finance-themed exhibit as "an extension of my life's work as a financial educator, and an innovative way to teach people about money".The interactive, multi-media exhibit, "Economia: Money Matters," will begin a five-year, nationwide next year, starting in Chicago. The admission-charging show will move on to other venues that include science and natural history museums.Gail Vida Hamburg, who designed and developed the exhibition, said she hit on the idea several years ago."I found a study about worry, stress and depression and their links to money or rather the lack of money ... I realized that I could synthesize all of this information into a designed exhibition with multimedia and interactives (displays)," said Hamburg, who designed the Body Worlds traveling exhibition of preserved human corpses that has toured Europe, North America and Asia.The Money Matters exhibit spans 7 000 square feet with galleries on phases of life ranging from College Road to Third Phase, or retirement. It aims to meet national and state financial literacy goals for children and adults.Hamburg, who founded museum exhibit firm Rainworks Omnimedia in 2010, believes the show's appeal is universal because money is something that everyone has a relationship with throughout life.Orman has described the show as a walk through the life of money, and the effect it can have on you."It will be entertaining," she said in a statement, "and when you're having fun learning, the lessons stay with you."Hamburg said she addressed finance's fear factor by engaging people with various exhibits and displays."How do you make it easy for visitors to understand the power of compounding?" she asked, adding that it has traditionally been taught with graphs or charts or calculators.She decided to approach it differently using visitor prompts, and entry into a computer terminal and to show the results through the growth of actual physical objects."We should all be so smart with money and channel our inner Suze Orman. But we're not and we don't. Unless you're an MBA or an economist or a freak, you don't want to read about SEP-IRA or social security or student loan interest rates."The goal of the exhibition "is to give visitors the tools and resources for financial self actualization," she added.