NEWS,04.02.2013

Media lampoons Berlusconi's tax promise

Silvio Berlusconi's rivals lampooned him as a snake charmer and a TV huckster selling pots and pans on Monday after he promised sweeping tax cuts if his centre right wins Italy's election this month.The former prime minister launched his "last great electoral and political battle" on Sunday with a plan to reduce government spending, enact fiscal reform and what he called a "shock proposal" - reimbursing Italians for a much-hated tax on primary residences imposed last year.Forced from power in 2011 after financial market turmoil that threatened to push Italy into a Greek-style debt crisis, Berlusconi has focused his comeback hopes on attacking the austerity policies of Mario Monti's technocrat government."Even an imbecile is able to invent new taxes and impose them on citizens but only an intelligent person can cut costs," Berlusconi said at a rally in Milan, the northern city where he made his media and real estate fortune. But the day after, it was Berlusconi who was mercilessly derided by most newspapers and political opponents. Corriere della Sera, Italy's leading paper, ran a cartoon depicting him dressed as a smiling joker in a carnival outfit throwing coins and banknotes to everyone in his wake.Monti called Berlusconi "a snake charmer" and accused him of trying to sell "a dream even more fantastic than that in Alice in Wonderland".Just about the only comfort Berlusconi found in the media was in a headline in Il Giornale, a newspaper owned by his family: "Finally, More Money".The real estate tax, known as IMU, was imposed on primary residences last year by Monti to help with Italy's financial crisis, after it had been abolished in 2008 by Berlusconi.It is estimated to have raised some €4bn last year, a sum Berlusconi dismissed as no more than 0.5% of the €800bn annual budget.He said he would scrap the tax at his first cabinet meeting and refund payments already made. He promised to phase out a regional tax on businesses, reduce personal income tax rates, not hike value added tax (VAT) or impose a "wealth tax" on higher earners."This can work if alternative revenues are found," said Professor Fabio Marchetti, a tax expert at Rome Luiss university. "But I think it is rather utopian and demagoguery because it would make us the only country with no tax on primary residences." Berlusconi was criticised even by former allies.Giulio Tremonti, economy minister in the last Berlusconi government, said reimbursing the real estate tax "would objectively create a problem for public accounts."Vittorio Feltri, a journalist who was for years the editor of Il Giornale, said: "If the state can't find the money to pay its suppliers or make tax refunds, where is it going to find the money to reimburse the real estate tax?"Berlusconi said the money would come in part from striking a deal with Switzerland to tax financial activities there by Italian citizens."But a possible accord with Switzerland is still in stormy waters," said Professor Marchetti, adding that it could never be worked out before the new government takes office in April.Berlusconi promised to save money by cutting government waste, halving the number of parliamentarians, and eliminating public financing of political parties. Income would come from new taxes on things he called "not of primary necessity" - tobacco, gambling and lottery tickets."Some people will buy into it and it certainly will have an effect on some people's voting intentions but the unknown is how much of an effect it can have," said Marchetti.Most opinion polls indicate that the centre-left coalition, headed by Democratic Party secretary Pier Luigi Bersani, will win the Feb. 24-25 election. But the gap between the centre left and the centre right has narrowed steadily since Berlusconi returned to active politics. ($1 = 0.7301 euros)

German car sales down

New car registrations in Germany, a key measure of demand in one of the most crucial sectors of Europe's top economy, fell sharply in January, official data showed on Monday.Some 192 100 new cars were registered in January, a slump of 9% compared with the same month a year earlier, the VDA auto industry calculated.Export sales of German-made cars were down as well, falling by 8% to 310 700 units in January.In terms of output, the number of cars rolling off the production line fell by 11% to 394 300, VDA added.

 

Obama: more tax revenue needed

President Barack Obama said on Sunday more tax revenue would be needed in the coming years to reduce the US deficit but raising tax rates was not a key issue."I don't think the issue right now is raising rates," Obama said in an interview on CBS."There is no doubt we need additional revenue, coupled with smart spending reductions in order to bring down our deficit. And we can do it in a gradual way so that it doesn't have a huge impact," he said.At the beginning of the year Obama pushed through legislation to address the US fiscal cliff that raised income tax rates on households making more than $450 000 a year.

UK banks face break-up under new law

Britain's biggest banks will face being broken up if they fail to ring-fence their retail and investment arms, under draft legislation set to be announced by finance minister George Osborne on Monday.The new law will empower the government and a new banking watchdog to "electrify the ring-fence" if banks refuse to separate high-risk operations from savers' deposits.Launching the Banking Reform Bill, Chancellor of the Exchequer Osborne was due to say that banks will no longer be able to become "too big to fail", forcing the taxpayer to bail them out.The government had already announced plans to force banks to ring-fence operations by 2019, in a bid to avoid taxpayers having to bail out troubled banks as was the case during the financial crisis.But the draft law has been toughened up to include "electrification" of the ring-fence after the Parliamentary Commission on Banking Standards complained last month that the proposals fell "well short of what is required".Osborne had previously warned the commission against "unpicking the consensus" on structural reform of the banking sector but appears to have accepted its warning that the draft law left room for loopholes.The announcement puts the finance minister on a collision course with Britain's banks, which claim the legislation would make London less attractive as a global financial centre."This will create uncertainty for investors, making it more difficult for banks to raise capital, which will ultimately mean that banks will have less money to lend to businesses," said Anthony Browne, chief executive of the British Bankers' Association."Above all, what banks and business need is regulatory certainty so that banks can get on with what they want to do, which is help the economy grow."But Osborne was set to tell bankers: "When the RBS (Royal Bank of Scotland) failed, my predecessor Alastair Darling felt he had no option but to bail the entire thing out."Not just RBS on the high street, but the trading positions in Asia, the mortgage books in sub-prime America, the property punts in Dubai."I want to make sure that the next time a Chancellor faces that decision they have a choice. To keep the bank branches going, the cash machines operating, while letting the investment arm fail."If passed, the Banking Reform Bill would also establish a new watchdog for the industry and force investment and retail banks to have separate bosses.

No sign US eavesdropped on Cole suspect

A judge at Guantanamo Bay refused on Monday to suspend a pre-trial hearing for the prisoner accused of orchestrating the attack on the USS Cole, ruling that defence lawyers had offered no evidence supporting their suspicion that the CIA can eavesdrop on their private conversations with their client.Army Colonel James Pohl said that unless the defence can offer evidence of eavesdropping, the hearing for Abd al-Rahim al-Nashiri would continue."I can't stop a trial simply because something might happen," Pohl told defence attorney Navy Lieutenant Commander Stephen Reyes during a heated exchange at the start of the scheduled four-day hearing.Pohl granted ali-Nashiri's lawyers a three-hour recess to consider whether they can ethically continue representing him if they suspect that their privileged conversations are being monitored.The hearing was held at the US naval base in Cuba. AP watched a video feed of the hearing at Fort Meade.Al-Nashiri, a Saudi national, is charged with orchestrating the 2000 attack on the USS Cole, which killed 17 sailors and wounded 37. He has been imprisoned at the Guantanamo since 2006, after being held by the CIA in a series of secret prisons. He is considered to be one of the most senior leaders in al-Qaeda.The eavesdropping issue sprang from an episode last week in another Guantanamo case in which an undisclosed government agency unilaterally silenced courtroom loudspeakers to prevent spectators from hearing classified information. Pohl, who was surprised by the action, ordered the agency on Thursday to disconnect the equipment.Reyes said the defence wants to know whether any third party can secretly monitor privileged conversations at the courtroom defence table, in a nearby holding cell or elsewhere on the base.Prosecutor Anthony W Mattivi assured the judge that no such capability exists. Reyes wasn't satisfied."Now that we know there's a man behind the curtain, we can't say, 'Ignore the man behind the curtain’," Reyes said.Reyes said he especially wants to know if the CIA can eavesdrop on those conversations."If it is the CIA that is conducting the listening, this is the same organisation that detained and tortured Mr al-Nashiri," Reyes said.A CIA inspector general's report said al-Nashiri was waterboarded and threatened with a gun and a power drill because interrogators believed he was withholding information about possible attacks against the US. Such practices were allowed under rules approved by the George W Bush administration but many them have since been repudiated as torture.

NEWS,09.07.2012

Germans prefer old school media

 

Americans love to publicly debate it, British people hardly ever pay for it online and Germans prefer to get theirs through more traditional means, according to a survey about media consumption released on Monday.The survey looked at the consumption habits in Britain, the United States, Germany, Denmark and France, and found that TV and online platforms are now the overwhelming choice for news.Although computers remain the most popular medium on which to view news, with at least 74% doing so in the last week across the board, at least 20% had used a mobile for the same purpose in the same period. Around 8.5% used a tablet computer, while e-readers and other devices remained niche products.The report pointed to a more flexible and personalised consumption model which no longer relied on home or office internet access.The increasing range of mobile devices was adding to the news experience, it said, rather than replacing other forms of access.London-based journalist Nic Newman, who wrote the study, said: "Of those surveyed, nearly eight out of 10 people accessed online news every week, but the transition from print to digital is much slower in other European countries." Germans showed the greatest allegiance to traditional forms of media for news, with only six out of 10 using online sources over the last week, compared to an average of eight of 10 everywhere else.Nearly seven out of 10 pick up a newspaper or tune in to the radio.In Britain, only four percent had ever paid for digital news, compared to 12% in Denmark, and between six and eight percent elsewhere. However tablet users, who accounted for 13% of the sample, were just as likely to shell out for news applications such as the Guardian's or the Daily Telegraph's as they were to use free ones.While traditional media brands dominated people's usage across Europe, over half of all Americans polled also cited newer sources such as Huffington Post and Gawker. Nearly seven out of 10 people in the US used polls, comment boxes and sharing functions to engage with the news, compared to roughly four out of 10 in most other countries.The survey was conducted by YouGov on behalf of the Reuters Institute for the Study of Journalism at the University of Oxford. It involved a representative sample of more than 6 000 people during April.

 

Eurozone to force Spain banks to hike capital

Eurozone finance ministers have said they will oblige Spain's battered banks to further boost the share of rock-solid core capital on their books at a meeting on Monday, the daily El Pais said."All Spanish entities will have to raise their high quality 'core capital' to 9%," the daily said, citing European sources with knowledge of the negotiations.So far, only the biggest Spanish banks have had to keep such a high ratio of core capital as a proportion of total assets.The meeting in Brussels is to discuss details of a eurozone rescue loan of up to €100bn euros ($125bn) to salvage Spain's banks, laden with loans that turned bad after a 2008 property market crash.It comes as investors show deep misgivings about Spain's finances despite the banking rescue.A European Union summit from June 28-29 had been hailed as a brekathrough for promising a eurozone bank union to keep the lenders in line and making it easier for the bloc's new bailout fund to help states in trouble.But investors' concerns have returned, in part because of doubts over the details and timetable for implementing the banking rescue and the sweeping EU summit agreements.Spanish 10 year government bond yields surged to 7.026% in morning trade from 6.912% late on Friday, a worrying sign for Madrid for future debt issues.Prime Minister Mariano Rajoy has warned that his country cannot afford to finance its operations at such high interest rates over the long term, raising the spectre of an all-out state bailout.Link Securities said it seemed that the EU summit agreements would be respected.That would allow EU rescue mechanisms to pump rescue loan money directly into Spain's banks without adding to the nation's fast-rising sovereign debt, it said.It also would ensure that the EU rescue mechanism does not take priority over other lenders for repayment in the case of a Spanish default, a prospect that had unnerved potential investors, Link Securities said."Now they have to decide when and how this plan will be implemented, and what will be asked in exchange," it said."One of the non-negotiable conditions imposed by the 'men in black' is the creation of a 'bad bank'," which would pool all the toxic property-related loans, said business daily Expansion.Analysts at Spanish brokerage Renta 4 said they did not expect any protocol to be signed at the Brussels talks on Monday. But ministers may agree on a draft deal to be signed at their next meeting July 20, they said.

 

Spanish Borrowing Costs Rise To Dangerously High Levels

 

Spain's borrowing costs rose to dangerously high levels Monday as finance ministers of the 17 countries that use the euro began to gather in Brussels to discuss terms of a rescue package for the country's stricken banks.The interest rate, or yield, on the country's 10-year bonds hit 7 percent Monday morning, a level that market-watchers consider is unaffordable for a country to raise money on the bond markets in the long term and the point at which Greece, Ireland and Portugal all sought an international bailout. Stocks on Madrid's benchmark index fell 1.7 percent. The yield later fell back down to 6.99 percent.The yield indicates the interest rate a government would have to pay to raise money from financial markets when it holds bond auctions. While Spain can afford the high rates for a few weeks at least, it would find them too expensive in the longer term.Spanish officials had originally indicated that it would decide on Monday how much the country's troubled banks would get from a €100 billion ($124 billion) lifeline from other members of the 17-country eurozone. Spain's bank industry has been struggling since 2008 under the weight of toxic loans and assets following a collapse in the country's property market.But an official with Spain' economy ministry said last week that the meeting of eurozone finance ministers was not expected to generate a figure for how much Spain would tap. Ministers planned to discuss terms of the loan and may or may not finalize some of them at the evening session, said the official, who spoke on condition of anonymity in keeping with policy.Outside auditors are expected to complete rigorous assessments of Spanish banks by July 31. Separate stress tests will also be conducted on individual lenders banks to determine how much each bank needs to strengthen its balance sheets against further economic shocks if they can't raise capital on their own, the official said. These results are due to be published in mid-September.The Spanish official's comments reflect those made by a European official in Brussels last week, who said that no numbers for the overall loan amount would be coming out until bank-by-bank stress tests had been completed. The official added that one of the aims of Monday's meeting would be to get a "political understanding" of the memorandum of understanding for Spain's loan so ministers could start paving the way in their countries to get the bailout approved. Spain's loan needs the green light from all 17 countries using the euro.Investors fear a full-blown bailout of Spanish public finances would be too large for the eurozone to handle. The country's economy is the fourth largest among the 17 nations that use the common euro currency  behind Germany, France and Italy - and it is also larger than those of Greece, Ireland and Portugal combined.The interest rate on Spanish 10-year bonds hit a eurozone high of 7.18 percent in intraday trading on June 18 before closing at 7.12 percent that day, according to financial data provider FactSet.

 

Russia's highest court backs WTO entry

 

Russia's highest court ruled on Monday that a hard-won deal to join the World Trade Organisation (WTO), that will oblige Moscow to cut import tariffs and open up key sectors in its economy to foreign investment, was in line with the constitution.The ruling, issued by the Constitutional Court in a unanimous decision from its headquarters in St Petersburg, clears the way for a final parliamentary vote to ratify entry into the 155-member global trade rules club.The vote will take place on Tuesday with a majority of lawmakers expected to rubber-stamp accession. The original deal was clinched last December after 18 years of often-difficult talks. Russia, whose $1.9 trillion economy is the largest outside the WTO, would become a full member 30 days after ratification.The court's ruling quashed a case brought by lawmakers from the opposition Communist and Just Russia parties who had unsuccessfully argued that the ratification procedure and parts of the accession deal were unconstitutional.Recently elected for a third presidential term, President Vladimir Putin had long appeared ambivalent over WTO entry but warmed to the process after Russia's economy was hit hard by the global recession of 2008-2009.According to a World Bank study, the growth uplift that Russia could expect from joining the WTO could be 3.3% over the medium term and as much as 11% in the long run.Under the deal, Russia would gradually cut averageimport tariffs to 7.8% from 10% and open up investment in sectors such as telecommunications, while shielding its banking sector from overall foreign control.Russia managed to protect hefty subsidies to promote its domestic auto industry and negotiated a long transitional period for reducing state aid to farmers.

NEWS,13.04.2012.

Russia rebukes North Korea for rocket launch

 

Russia has criticised North Korea for its rocket launch, saying that Pyongyang had defied the UN Security Council and that neighbouring powers all opposed it. Russia had urged Pyongyang not to conduct the launch, warning it would violate a UN Security Council resolution regardless of its purpose and complicate efforts to revive six-party talks over North Korea's nuclear programme."UN resolutions contain concrete calls not to conduct such launches, and this is the shared approach of ... Russia, China, the United States, South Korea and Japan," the Interfax news agency quoted Foreign Minister Sergei Lavrov as saying."These five (nations) are united in their position," said Lavrov, who was meeting the Chinese and Indian foreign ministers in Moscow today.Lavrov, whose country is a Group of Eight member along with six Western states and Japan, joined G8 foreign ministers in a statement condemning the launch and saying they were ready to consider measures in response.China's initial reaction sounded less critical, calling for calm and restraint from all sides.North Korea admitted its much hyped long-range rocket failed to deliver a satellite into orbit today while US and South Korean officials said it crashed into the sea a few minutes after launch.Regional powers have said that what North Korea has described as the launch of a weather satellite, months after Kim Jong-un succeeded his father as the leader of the reclusive state, is a disguised test of a long-range ballistic missile."UN Security Council Resolution No. 1874 demands that the DPRK (North Korea) refrain from any launches using ballistic rockets. This applies to both military and civilian launches," Interfax quoted an unnamed Russian diplomat as saying.Russia, which shares a short border with North Korea - Moscow's client in the Soviet era - called on Pyongyang last month to refrain from the launch, expressing serious concern and calling for restraint from all sides.Russia has often balanced criticism of North Korea's nuclear activities and its missile launches with calls on other major powers to refrain from belligerent actions against Pyongyang, which it says can be counterproductive.A permanent member of the UN Security Council, Russia is displeased when nations defy council resolutions, and North Korean missile tests have sparked concern among Russians living on the country's Pacific coast in the past.The UN Security Council was to meet today to discuss a possible condemnation of the launch, but Western diplomats said China was not expected to support new sanctions.Russia has been a participant in six-party talks with Pyongyang last held three years ago and hosted the late North Korean leader Kim Jong-il last August in Siberia, but has less influence on Pyongyang than China.McCully said the launch had violated the UN Security Council Regulations and had undermined efforts to build peace and stability in the region."It is a major disappointment following their recent agreement with the United States to put a moratorium on long-range missile launches," he said.  "The New Zealand government strongly urges North Korea to abide by its obligations under UN Security Council resolutions, cease its provocations, and take steps to denuclearise." 

Cancer hasn't dimmed Hugo Chavez's electoral hopes

With less than six months left until Election Day, Venezuelan President Hugo Chavez has hardly hit the campaign trail. Instead, he has been consumed with his fight against cancer, repeatedly traveling to Cuba for treatment and publicly vowing to defeat his illness. While cancer would end the presidential ambitions of many politicians, Chavez's struggle against the disease has in fact become his main rallying cry. Cancer could serve as a political asset if his health holds through the October vote, and that's the big "if" hanging over Venezuelan politics. Last week, Chavez offered his starkest outlook yet as he wept while holding hands with his parents at a Mass and then pleaded to Jesus Christ to give him more life. "Give me your crown, Christ," Chavez said in live footage broadcast nationwide. "Give me your cross, 100 crosses. I'll carry it, but give me life because there are still things left for me to do for these people and for this homeland. Don't take me away yet." Chavez said later that he has faith in a "miracle" as he undergoes radiation therapy in Cuba following two surgeries that removed tumors from his pelvic area. So far, what appears to be a serious life-or-death crisis hasn't dented his political support. To the contrary, one recent poll showed Chavez with a lead of 14 percentage points over rival Gov. Henrique Capriles. The poll by the firm Datanalisis had a margin of error of 2.5 percentage points. Chavez has managed to hold on to support even while his main image has been that of an ailing president climbing or descending airplane stairs on his frequent flights to and from Cuba for treatment. On top of that, many Venezuelans are supporting him despite 25-percent inflation and one of the worst homicide rates in the world. Information Minister Andres Izarra, one of Chavez's key aides, said on Monday that the president won't be out campaigning door-to-door like his rival because "he doesn't need to." Izarra also said Chavez's spirits are being lifted by his supporters. "That love of the people, it's arisen like a balsam, like part of his medicine, like part of his treatment to completely recover," Izarra said during a televised speech. On Friday, Chavez is expected to rally his supporters on the 10th anniversary of his return to power after a short-lived 2002 coup, and he has drawn a parallel between his cancer fight and his survival during that coup, when he was restored to the presidency amid large pro-Chavez street protests. "At that time, the love of the people rescued Chavez from the edge of death," Izarra said. "This time the love of the people is also rescuing Chavez from a particular health situation, in which if it weren't for that love, I'm sure his ailments would perhaps be greater." Eduardo Gamarra, a Latin American studies professor at Florida International University in Miami, said compassion elicited by Chavez's illness "has naturally played to his advantage in the electoral process." "Not only President Chavez but certainly his supporters and certainly the people handling his political campaign are taking full advantage of it. And I think it would be crazy for them not to do so," Gamarra said. Chavez's illness also presents a challenge for the opposition, Gamarra said, because it might appear "cold and callous" to attack a seriously ill leader. For both sides in Venezuela's divided political landscape, Chavez's illness has the potential to be a game-changer. The subject of what would happen if Chavez were to die is taboo among his political allies, as leaders of his United Socialist Party of Venezuela insist that Chavez will be their candidate and that there is no backup plan. In the meantime, Chavez is adeptly using the uncertainty to once again cast himself as the protagonist in a larger narrative, at times evoking his own tragic hero, 19th century independence leader Simon Bolivar, who survived an assassination attempt and then resigned the presidency amid failing health. Bolivar was 47 when he died, and historians have generally cited tuberculosis as the cause. At a televised meeting this week, Chavez, 57, said the independence leader had been "left without people, left without soldiers." "What a painful end," Chavez said. In speeches and rallies, Chavez has regularly shouted the slogan: "We will live and we will win!" It appears to be both his personal mantra and his political bet. The odds of that bet remain unclear. Since he announced his diagnosis last June, Chavez has kept secret specifics about his illness such as the type of cancer and the precise location of the tumors that have been removed. Some medical experts say based on Chavez's accounts, it's very possible his cancer could come back yet again. "The tumor is recurrent, and to us that indicates that his chances for a cure are minimal because in cancer care, the best treatment is the first treatment," said Dr. Julian Molina, an oncologist at the Mayo Clinic Comprehensive Cancer Center in Rochester, Minnesota. He noted that Chavez underwent surgery for a second tumor in February, indicating that his chemotherapy was ineffective. Other medical experts say that depending on the type and grade of Chavez's cancer, the outlook might not be so grim. Given Chavez's treatment regimen, he could have a soft-tissue sarcoma, said Dr. Steve Hahn, professor of radiation oncology at the University of Pennsylvania's Perelman School of Medicine. "It's not necessarily pessimistic," Hahn said. "If he had a low-grade sarcoma, then he really has very little chance of it spreading elsewhere and the radiation, if it prevents it from coming back in the pelvis ... that should pretty much hopefully be the end of the story for him, end of the story meaning control of his disease." Chavez's face has at times appeared puffy during his cancer treatments, and in September he acknowledged taking steroids along with other medications. Doctors say steroids can be prescribed as an anti-nausea medication to cope with the effects of chemotherapy and can help increase appetite and energy levels. Molina noted that excessive steroids use can spur side effects such as fluid retention, mood swings and increased blood pressure. "It's always possible that they gave him a short course of steroids, he felt good, and then he requested that, you know, keep on this. It's very hard when you're a president and you have the powers to say 'this is what I want to do,'" Molina said. The dearth of hard information about Chavez's illness, as well as the fluctuations in his tone and appearance, have fueled speculation and rumors about Chavez's health in the Venezuelan media and on the street. Chavez, for one, has urged political allies not to waste time responding to the gossip. Chavez communicated with the nation on Wednesday through several messages on his Twitter account while finishing his latest round of radiation treatment in Cuba. "I'm putting on my combat boots!" one of the messages read. "Wait for me!!" That night, Chavez made yet another homecoming at Caracas' airport, smiling as he descended the airplane stairs next to one of his daughters and saying he was doing well. He appeared vigorous as he chatted with aides at the presidential palace and reminisced about the 2002 coup during a televised talk that ended nearly an hour after midnight. Chavez's legions of supporters have shown intense loyalty to their hero, regularly gathering at government-organized events to pray for his health. On a downtown Caracas avenue, lampposts have been festooned with banners showing a healthy Chavez smiling and wearing the red beret of his years as an army paratrooper, along with the slogan: "Onward Commandant!" At one recent pro-Chavez rally outside the presidential palace, Magalys Martinez said she's optimistic Chavez can overcome his illness. "He very much wants to live," said Martinez, herself a cancer patient. "For this illness, what he needs to have is ambition to live." Another supporter at the rally, 63-year-old Bernarda Mena de Palacios, said she's thankful to Chavez for a government-run education program that helped her earn her high school diploma. "We're praying for the president," she said. "I have faith he's going to come out victorious. We can't lose a president like him."