NEWS,05.07.2013

Russian PM sacks ally of oil boss Sechin

Russian Prime Minister Dmitry Medvedev on Friday sacked a senior resources official, believed to be a close ally of Igor Sechin, the boss of state oil firm Rosneft, in a move analysts said was a sign of growing confrontation between the two men.
In an order published on Friday Medvedev dismissed Alexander Popov, the head of Rosnedra, an agency responsible for granting licences to develop natural resources.
Popov was an aide to Sechin when Sechin oversaw Russia's energy sector as deputy prime minister.
Sechin, a close ally of Russian President Vladimir Putin, was last year appointed to head Rosneft, the world's largest publicly listed oil producer, majority-owned by the Kremlin.
Sechin's confrontation with Medvedev's team has grown since then as Sechin has embarked on an aggressive consolidation of assets under Rosneft's control. Medvedev's deputy for energy, Arkady Dvorkovich, has pushed for more privatisation and lower state interference in the strategic industry.
A more recent spat came over a decision by Rosnedra to awarded Rosneft and state gas major Gazprom licenses to tap oil and gas fields in the Arctic, which Dvorkovich has criticised.
Medvedev is also a close ally of Putin and was Russian president when Putin had to step down from the Kremlin as demanded by the constitution after two consecutive terms as president in 2008. Putin appointed Medvedev as prime minister when he returned to the Kremlin in 2012.
"It is clear that the confrontation between Medvedev-Dvorkovich on one hand and Sechin on the other is growing, and all means may be used in that fight," political analyst Stanislav Belkovsky said about Popov's dismissal.
Medvedev's order said Popov was dismissed because his post was being eliminated. In a separate decree Medvedev named Valery Pak as deputy minister of natural resources and the head of Rosnedra.
"Sechin still enjoys great political clout. This (change in Rosnedra) won't undermine his power," Andrey Polishchuk, an analyst with Raiffeisenbank in Moscow said.

Monetary divide to drive dollar surge

US monetary policy is zigging while the rest of the world is zagging, and the world should brace for a protracted dollar surge, more strains for developing economies and volatility in global markets.
After two weeks of signalling by central banks, investors are betting the Federal Reserve will raise US interest rates within 14 months. No similar move is seen in the euro zone, Britain or Japan before 2016 at the earliest  the first major divergence in rate expectations for five years.
Prospects of less Fed money printing and the European Central Bank's promise this week to keep interest rates low have already pushed the gap between US and German 10-year government bond yields to its widest since 2006.
The developing policy gap, and the United States' stronger economic outlook, means many investors are starting to assume the dollar is in the foothills of a mountainous rally.
That could provide a fillip for struggling European and Japanese exporters but would be bad news for emerging economies.
A stronger greenback has a depressive impact on dollar-priced commodities, raises dollar borrowing costs for companies and developing countries, and may ultimately stem the flow of US investment overseas.
Almost half the world's $80 trillion of private pension, insurance and mutual fund savings originates in the United States, and long-term shifts in the dollar's exchange rate can profoundly change their calculation of overseas returns and hence their preference for home or foreign markets.
"It's potentially going to have a big impact on the dollar and US fund managers who are the biggest investors in the global economy," said UBS strategist Manik Narain.
"They have been orchestrating the big inflows into emerging markets and now for the first time in 13 years they are seeing real US interest rates are on the rise."
The dollar has risen sharply against Japan's yen and emerging market currencies all year, but the latest shift in monetary outlooks within the developed world looks likely to push it up against the euro, sterling and other G7 currencies.
"We're big proponents of a stronger dollar it's the central investment thesis of this period," said Scott Thiel, head of global bonds at the world's biggest asset manager, BlackRock which has almost $4 trillion under management.
Others say the order in which countries were sucked into the global crisis is the main issue. But dollar strength still emerges under that scenario.
"There's potential for the appreciation of the dollar versus the euro and also against Asian currencies," said Arnaud de Servigny, chief investment officer at Deutsche Bank Wealth Management. "The entry into the crisis was the US first, followed by Europe, followed by Asia. Now the first out is the US, followed by Europe, and there's some uncertainty in Asia."
Historic shift
Prolonged periods of broad dollar strength have been few and far between since exchange rates were allowed to float in 1973.
Seismic dollar swings in the 1980s also resulted from mismatched economic cycles and monetary policies either side of the Atlantic and were met with bouts of central bank intervention, first to cap the dollar and then to stall its subsequent collapse.
Investors are looking at 1994 as a parallel for the present. Surprise Fed rate rises that year pushed bond yields higher everywhere, even as Germany's Bundesbank - then Europe's most powerful central bank - was furiously easing policy.
The interest rate gap peaked in 1995, the trigger for six years in which the dollar - still the world's main reserve currency - appreciated more than 40 percent on the Fed's broad trade-weighed index.
While the dollar has been gaining strength, the Fed's broad dollar index has risen only 4% so far this year.
The late 1990s saw major crises in emerging markets as dollar strength tightened global financial conditions and depressed world commodity prices, and as US money returned home to what was seen as a relatively safe high-growth story in Silicon Valley.
This week's historic decisions by the ECB and Bank of England to offer "forward guidance" on interest rates stands in contrast to the US Federal Reserve's timetable for less money printing and higher rates over the next two years.
With Japan also still in the midst of a renewed and aggressive monetary easing, the Fed's relatively hawkish leaning looks out of step with its major Group of Seven allies.
And despite attempts by Fed officials to emphasize conditionality, a hefty 195 000 rise in US non-farm payrolls in June will only reinforce that view.
But could a dollar rise itself be enough to make the Fed row back?
Jim O'Neill, former chairman of Goldman Sachs Asset Management and long-term proponent of emerging economies, told Reuters on Friday that the exchange rate fallout may be critical in shaping "reaction functions" around the world.
"The dollar is likely to rise but the Fed doesn't want to preside over a major tightening in financial conditions and so a huge dollar rise may itself contribute to the Fed toning down what it said," said O'Neill.
Big developing countries like China could also help themselves, by further reducing their dependence on the dollar for trade and investment, he added.
"The notion that emerging economies are always vulnerable to the curse of the dollar's exorbitant privilege is in their own (emerging countries') hands."

Greek aid could be split - EU

The next tranche of international aid for Greece could be split into instalments, the EU's top economic official said on Friday, holding out the prospect of a continued hand-to-mouth existence for Greece that threatens to stifle its economy.
Athens had hoped that euro zone finance ministers would sign off on the next €8.1bn tranche of aid when they meet on Monday, although Greek officials have conceded that Greece would not meet targets on reforming its public sector by an end-of-week deadline set by international lenders.
On Friday, however, Olli Rehn, the European commissioner in charge of economic and monetary affairs, confirmed what many officials have expressed privately amid growing frustration with Athens' slow pace of reform, namely, that the tranche could be split into several instalments.
"It is possible, but not certain," Rehn told a seminar in his hometown of Mikkeli, Finland, when asked about the issue. "It all depends on whether Greece can meet all requirements that they are committed to."
He said that talks involving the International Monetary Fund, the European Commission and the European Central Bank, which make up the troika that supervises Greece, would "continue as long as needed".
The euro fell slightly against the US dollar on Rehn's comments to 1.288.
Greece has been kept afloat by emergency loans alone since May 2010, a few months after the start of a debt crisis that sent shockwaves through the eurozone and threatened to push Greece out of the common currency.
The latest instalment is one of the last big cash injections that twice bailed-out Athens stands to receive as part of a €240bn rescue package that expires at the end of 2014. It needs the money in part to redeem about €2.2bn of bonds in August.

But public sector layoffs, which must be implemented alongside state privatisations as a condition of receiving aid, are an incendiary issue in Greece, which is struggling through a sixth year of recession and record high unemployment.

Spain 'told' Snowden was on Bolivia plane

Spain says it and other European countries were told that fugitive NSA leaker Edward Snowden was aboard the Bolivian presidential plane that was diverted to Austria this week, causing a diplomatic row.

Foreign Minister Jose Manuel Garcia-Margallo said on Friday on Spanish National Television "they told us that the information was clear, that he was inside".
The minister did not say who supplied the information and declined to say whether he had been in contact with the United States. But he says European countries' reactions were based on this information.
Bolivia President Evo Morales claims Washington pressured European countries to deny the plane flyover permission on Tuesday on suspicion that Snowden was using the flight as part of his bid to seek asylum.

Iceland rejects Snowden citizenship bid

The parliament of Iceland has rejected a proposal to offer US intelligence leaker Edward Snowden Icelandic citizenship, a parliament spokesperson said on Friday.

The 63-seat parliament late on Thursday voted against the proposal, which had been made by six members of the opposition, including Birgitta Jonsdottir of the Pirate Party and Ogmundur Jonasson, a former interior minister and member of the Left-Green Movement.
In an entry on her blog, Jonsdottir posted a message attributed to Snowden in which he said he had "been left de facto stateless”.
Iceland's centre-right government had already said that Snowden would not be given special treatment, noting that an asylum application would have to be made on Icelandic soil.
Earlier this week, the interior ministry said a fax with an application for asylum that had been sent to Iceland's embassy in Moscow, could not be considered as it was not possible to verify if it had been sent by Snowden.

Similar applications have been sent to 20 other countries.

Snowden makes 6 new asylum applications

Secret-spilling website WikiLeaks says NSA leaker Edward Snowden has put in asylum applications to six new countries as his effort to find refuge from American prosecution falters.

Snowden is believed to be stuck in a Moscow airport transit area and has already sought asylum from more than 20 countries, including Venezuela and Ecuador. Many have since turned him down.
President Barack Obama has publicly displayed a relaxed attitude toward the leaker's movements, but the drama surrounding the flight of Bolivian President Evo Morales - whose plane was abruptly rerouted to Austria over suspicions Snowden was aboard - suggests that pressure is being applied behind the scenes.
WikiLeaks said in a message posted to Twitter on Friday that it would not be identifying the countries involved "due to attempted US interference".

NEWS,26.11.2012

Obama drafts Geithner to crack budget

US President Barack Obama has made Treasury Secretary Timothy Geithner lead White House negotiator in budget talks with Congress aimed at averting the fiscal cliff, a report said Monday The Wall Street Journal said Geithner was viewed on Capitol Hill as a straight-shooter who had a better chance of brokering a deal than Jacob Lew, Obama's former budget chief who has burnt his bridges with some Republicans.If no deal is reached before the end of the year, a poison pill law of tax hikes and massive spending cuts, including slashes to the military, comes into effect with potentially catastrophic effects for the fragile US economy.The report said Geithner, who is preparing to leave his post as treasury secretary early in Obama's second term, has spent months already preparing for the fiscal talks, which will begin this week in earnest in Washington.Geithner will be joined by White House budget and tax experts, including Lew, now Obama's chief of staff, and National Economic Council Director Gene Sperling, the Wall Street Journal said.They will try to hammer out an elusive compromise with congressional aides but final decisions will be made by political leaders such as Obama and Republican House Speaker John Boehner, the report said.In recent days, several leading Republicans have indicated a willingness to accept a deal that includes more revenue from ending loopholes in the tax code in return for cuts in funding to Democrats' beloved welfare programs.Geithner, 51, is not affiliated with any party and has spent his career in government finance and on the political sidelines.He first joined the Treasury at age 27. When George W. Bush became president in 2001, he went to work for the Council on Foreign Relations and the International Monetary Fund.At 42, he was tapped to be head of the Federal Reserve Bank of New York, considered the Fed's second-most influential post because the New York bank interacts directly with a powerful constituency that includes Wall Street.Despite holding high office in the years leading up to the 2008 financial collapse, when regulatory authorities are accused of having been asleep at the wheel, he was tapped by Obama to lead the recovery.Upon assuming office in early 2009, he was charged with overseeing two major bailout packages worth more than $1.5 trillion and aimed at shoring up the country's distressed banking sector.The administration has said that the stimulus, while costly, averted another Great Depression, while conservative critics have branded it a costly expansion of government that has failed to revive the economy.

 

Medvedev does not rule out Kremlin return

Prime Minister Dmitry Medvedev said he is not ruling out a return to the Kremlin after his 2008-2012 single term as Russian head of state but was happy working as premier under his mentor Vladimir Putin."If I have sufficient strength and health, if our people trust me in the future with such a position, then of course I do not rule such a turn of events," Medvedev said in an interview with Agence France-Presse and Le Figaro when asked if he had the ambition for another Kremlin term.Medvedev, who on Monday embarks on a working visit to France, served as president after Putin stepped aside following the maximum two consecutive terms allowed by the constitution after his 2000-2008 stint.But Putin, aged 60, stayed on as a powerful prime minister and Medvedev, aged 47, never fully emerged from the shadow of his fellow Saint Petersburg native, an impression strongly reinforced when Putin returned to the Kremlin in May 2012.Medvedev, who in turn was then appointed prime minister in May, failed to bring about lasting change through a much-trumpeted modernisation programme in his one term as president.But in his interview with AFP, he revealed he had not lost his political ambition. "This returning to the presidency depends on a whole range of factors." "Never say never, especially as I swam in that river once and this is a river that you can swim in twice," he said.Russia will only go to the polls to vote for a president again in March 2018 and in the next half decade society is expected to see major change as the middle class grows and internet use explodes. Putin has also not ruled out standing again.This year's tightly choreographed job swap was criticised for being played out far from the public, and frustration over the return of Putin to the Kremlin fuelled the opposition protests that rocked Russia in the last year.Medvedev acknowledged the protests that began last December had shown a transformation in Russian society that the authorities could no longer ignore."Our society changed, it had become more active and the authorities needed to take account of this and react," said Medvedev, saying the government had done this by introducing electoral reform.Some of Medvedev's supporters who saw him as a possible champion of a refreshed, innovative and more pro-Western Russia were hugely disappointed by his apparent surrender of the Kremlin back to Putin.But Medvedev played up the tight links between the two men, saying he would find it impossible to work under anyone else."I would hardly have become prime minister under another president, I cannot imagine it at all," he said."If there is someone you can work with comfortably as prime minister after being president it is just one person, Vladimir Putin."However Medvedev has distanced himself from Putin on some issues, notably the case of feminist punk rockers Pussy Riot, two of whom have been sent to prison camps for performing a song against the Russian strongman in a church.Reaffirming his belief that they should be released, he said: "I think they have already tasted what prison is... So further punishment in the form of prison is not necessary. This is my personal position."On the case of Russia's best known prisoner, the former tycoon Mikhail Khodorkovsky, Medvedev said court decisions had to be respected but noted that the convict had never made a bid for clemency from the Kremlin.Medvedev admitted that his modernisation drive had so far fallen short but expressed hope there was still time to put his ideas into place."It's true that for the moment modernisation has not turned into a national idea and there has been no kind of radical progress reached."

 

Euro zone to seek Greek aid deal without write-off

Euro zone finance ministers and the International Monetary Fund made their third attempt in as many weeks to agree on releasing emergency aid for Greece today, with policymakers saying a write-down of Greek debt is off the table for now.Greek Finance Minister Yannis Stournaras said he was confident the ministers would reach a deal after Greece fulfilled its part of the deal by enacting tough austerity measures and economic reforms."I'm certain we will find a mutually beneficial solution today," he said on arrival for what was set to be another marathon meeting.Greece, where the euro zone's debt crisis erupted in late 2009, is the currency area's most heavily indebted country, despite a big "haircut" this year on privately-held bonds. Its economy has shrunk by nearly 25% in five years.EU Economic and Monetary Affairs Olli Rehn said it was vital to disburse the next 31 billion euro tranche of aid "to end the uncertainty that is still hanging over Greece". He urged all sides to "go the last centimetre because we are so close to an agreement".Negotiations have been stalled over how Greece's debt, forecast to peak at 190-200% of GDP in the coming two years, can be cut to a more sustainable 120% by 2020.Without agreement on how to reduce the debt, the IMF has held up payments to Athens because there is no guarantee of when the need for emergency financing will end.The key question is: Can Greek debt become sustainable without the euro zone writing off some of the loans to Athens?IMF Managing Director Christine Lagarde said on arrival that the solution must be "credible for Greece".A source familiar with IMF thinking said the global lender was demanding immediate measures to cut Greece's debt by 20 percentage points of GDP, with a commitment to do more to reduce the debt stock in a few years if Greece fulfills its programme.Under the source's scenario, Greece's debt could be reduced to around 125% of GDP by 2020 using a variety of methods including a debt buyback, reducing the interest rate on loans and returning euro zone central bank 'profits' to Greece, but further steps would still be needed to hit the 120% goal.The ministers took an extended break in mid-afternoon while experts worked on how to formulate a link between short-term measures and a credible assurance of eventual debt relief.Germany and its northern European allies have so far rejected any idea of forgiving official loans to Athens.German Finance Minister Wolfgang Schaeuble told reporters on arrival that a debt cut now was legally impossible, not just for Germany but for other euro zone countries, if it was linked to a new guarantee of loans."You cannot guarantee something if you're cutting debt at the same time," he said. That might not preclude debt relief at a later stage if Greece has completed its adjustment programme and no longer needs new loans.The source familiar with IMF thinking said a loan write-off once Greece has established a track record of compliance would be the simplest way to make its debt viable, but other methods such as foregoing interest payments, or lending at below market rates and extending maturities could all help.The German banking association (BDB) said a fresh "haircut" or forced reduction in the value of Greek sovereign debt, must only happen as a last resort.Two European Central Bank policymakers, vice-president Vitor Constancio and executive board member Joerg Asmussen, said debt forgiveness was not on the agenda for now.Asmussen told Germany's Bild newspaper the package of measures would include a substantial reduction of interest rates on loans to Greece and a debt buy-back by Greece, funded by loans from a euro zone rescue fund.So far, the options under consideration include reducing interest on already extended bilateral loans to Greece from the current 150 basis points above financing costs.How much lower is not yet decided - France and Italy would like to reduce the rate to 30 basis points (bps), while Germany and some other countries insist on a 90 bps margin.Another option, which could cut Greek debt by almost 17% of GDP, is to defer interest payments on loans to Greece from the EFSF, a temporary bailout fund, by 10 years.The European Central Bank could forego profits on its Greek bond portfolio, bought at a deep discount, cutting the debt pile by a further 4.6% by 2020, a document prepared for the ministers' talks last week showed.Not all euro zone central banks are willing to forego their profits, however, the German Bundesbank among them.Greece could also buy back its privately-held bonds on the market at a deep discount, with gains from the operation depending on the scope and price. Officials have spoken of a 10 billion euro buy-back at around 30 cents on the euro, that would retire around 30 billion euros of debt, although since the idea was raised the potential gain has fallen as prices have risen.But the preparatory document from last week said that the 120% target could not be reached in 2020, only two years later, unless ministers accept losses on their loans to Athens, provide additional financing or force private creditors into selling Greek debt at a discount.The latest analysis for the ministers showed the debt could come down to 125% of GDP in 2020, one euro zone official with insight into the talks said.

NEWS, 26.05.2012.

I made Russia a freer country: Medvedev

 

President Dmitry Medvedev said on Thursday that Russia had become a freer nation during his four-year term, citing the mass protests of recent months as evidence of change."Spring has come to us, both literally and figuratively. I congratulate you," Medvedev said in a live television interview, his last before he hands the presidency back to Vladimir Putin."Freedom," Medvedev sighed and smiled, "is such a unique feeling that everyone interprets differently."Freedom is a sense of self. And in this sense we've done a lot," he told a group of liberal journalists,who are usually sidelined for their sceptical stance towards the government.Medvedev's political mentor Putin, who became his prime minister after being barred by the constitution from serving more than two successive presidential terms, announced plans in September to return to the Kremlin in a job swap with his close ally.That announcement coupled with fraud-tainted parliamentary polls in December led to the largest protests since the Soviet era, when tens of thousands rallied in Moscow protesting Putin's comeback.Protests lose stingBoth Medvedev and Putin have in the past sought to stress that the protests were the hallmark of a democratic society, and introduced cosmetic political reforms that many analysts called a concession to protesters."Let's ask people who took to various squares whether they are free or not," Medvedev said."It is not important who they support: 'the white', 'the red' or 'the blue'. I am absolutely confident that the overwhelming majority of them will say: 'Yes, I am free because I stand here, I have my own position, I do not like a lot, or on the contrary, I like practically everything, don't you dare touch it. I am free'.""The current accelerated movement towards democracy will not lead to chaos," Medvedev added. "Society has matured."The nascent protest movement has lost much of its sting since Putin's crushing 4 March presidential victory, although it still hopes to muster another major demonstration in Moscow the day before Putin's 7 May inauguration.Medvedev defended his decision to cede the country's top job which has earned him mockery from the liberal opposition and many ordinary Russians calling him a mere seat-warmer incapable of promoting true reform.Hunger strike"We've achieved the political results we were hoping for," said Medvedev, who expects to be appointed prime minister when Putin moves back to the Kremlin."The decisions that were announced in September have been confirmed by political practice and it, as we know, is a criterion of truth.""We've thought it all up not to warm ourselves up but to receive a concrete political result. And we've received it, we've received a mandate to rule," he said.But the outgoing president also spoke disparagingly of the recent 40-day hunger strike by opposition politician Oleg Shein in the southern city of Astrakhan in protest at alleged violations in mayoral elections that he contested."I do not blame anyone. But 'Hunger Games' - I will remind you, is a rather mediocre Hollywood blockbuster, I don't know whether you've watched it or not, I have - whoever does it very often pursues a very obvious political goal."He defended his presidential decisions including the sacking of governors and the reform of the bloated police force, reiterating that Russia's most prominent prisoner Mikhail Khodorkovsky would not be allowed to walk free unless he asked for pardon."Without a request there cannot be a review. This is my firm position."Once Russia's richest man, Khodorkovsky is set to stay in jail until 2016 after being convicted in two fraud trials in what his supporters say is a case of personal vendetta on the part of Putin.

 

Iran: Enriched uranium traces a 'technical issue'

 

A top Iranian nuclear negotiator said that traces of enriched uranium discovered at an underground bunker came from a "routine technical issue," the country's official IRNA news agency reported Saturday.Ali Asghar Soltanieh, Tehran's envoy to the International Atomic Energy Agency, was responding to a report by the U.N. nuclear watchdog that said it had found radioactive traces at an Iranian nuclear site. The uranium found had been enriched to a level that is slightly closer to the threshold needed for nuclear weapons than Iran's previous highest-known enrichment grade.The IAEA said in the confidential report obtained Friday by The Associated Press that it was asking Tehran for a full explanation about the traces. But the report was careful to avoid any suggestion that Iran was intentionally increasing the level of its uranium enrichment.Tehran said the find was a technical glitch, according to the report. Analysts and diplomats said Iran's version sounded plausible.The West suspects Iran is pursuing a weapons program. Tehran denies the charge, saying its nuclear program is aimed at peaceful purposes like power generation and cancer treatment.Soltanieh said the report on Iran's nuclear activities was "historic evidence" that proved the peaceful nature of Iranian nuclear activities, while the uranium discovery was blown out of proportion for political reasons."This issue shows that some intend to damage the existing constructive cooperation between Tehran and the International Atomic Energy Agency," he was quoted as saying.The higher the enrichment, the easier it becomes to re-enrich uranium to the 90 percent needed for weapons grade. As a result, the finding of traces at 27 percent at the Fordo enrichment plant in central Iran sparked international interest.Iran denies any plans to develop nuclear weapons, but has for years declined offers of reactor fuel from abroad, including more recent inducements of 20-percent material if it stops Aproducing at that level. The Islamic Republic says it wants to continue producing 20 percent uranium to fuel its research reactor and for medical purposes.But its refusal to accept foreign offers has increased fears Tehran may want to turn its enrichment activities toward producing such arms. The concerns have been fed by IAEA suspicions that Iran has experimented on components of an atomic arms program — suspicions Tehran also denies.The report cited a May 9 letter from Iranian officials suggesting any enrichment at 27 percent was inadvertent. The letter said the particles were produced "above the target value" and could have been for "technical reasons beyond the operator's control."But the IAEA report did detail some progress in talks between the U.N. nuclear agency and Iran that the agency hopes will relaunch a long-stalled probe into the suspicions that Tehran has worked on nuclear-weapons related experiments.Amano will handover the report on Iran's nuclear activities to the board of directors of the agency later in June.IRNA also reported that Iran's nuclear chief, Fereidoun Abbasi, said Saturday that Tehran will not open the Parchin site until the agency convinces the country it is necessary."If a visit to Parchin is to happen, they should convince us in advance. So far, no reason and evidence has been handed to us," Abbas was quoted as saying.After a short visit to Tehran last week, Amano said Iran and the agency will sign an agreement on inspection to the site, soon.

NEWS, 21.05.2012.

Markets regain ground

 

Markets recovered some ground on Monday on value hunting after last week's heavy losses, but investors remained wary over the eurozone despite world leaders calling for Greece to stay in the monetary union and for Europe to balance austerity with growth. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, buoyed by its technology sector which by far outperformed its peers with a 1.3% gain. Investors scooped cheapened blue chips, helping to lift tech-heavy Korean equity market above a key chart level. The pan-Asian index fell to a 2012 low on Friday, having lost about 6% in the week for its worst weekly performance in nearly eight months. European shares were likely to be even more cautiously traded than Asia, with financial spreadbetters predicting that major European markets would open down as much as 1%. US stock futures were up 0.5%, reflecting a lack of market direction. "Investors saw some attractive valuations in the big tech stocks, which was the most heavily-hit sector during last week's market plunge, but that's about as much additional risk that investors are willing to take on at this point," said Park Suk-hyun, an analyst at KTB Securities. Japan's Nikkei stock average gained 0.4%, after logging a seventh straight week of losses last week, its longest such losing streak since the third quarter of 2011. Leaders of G8 major industrialised nations meeting at the weekend vowed to take steps to combat financial turmoil and revitalise a global economy threatened by Europe's debt crisis, but they offered no specific prescription for debt-crippled Greece which holds fresh elections on June 17. "Today's move is merely a rebound from sharp losses on Friday and it doesn't have momentum to rise strongly. The G8 outcome lacked the punch to give much incentive for markets," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo. Currently, many market players see the main scenario as Greece staying in the euro and European leaders making some compromises to maintain financial lifelines for the country. But deepening banking sector instability in Spain heightened concerns about contagion from Greek political turmoil, keeping investors' risk-aversion intact at least until the Greek election makes clear whether the nation will stay or leave the euro, traders and analysts said. "There's a lot of talk and no substance. Until you get some certainty about Greece and the fear of contagion eases, the volatility is here to stay," said Savanth Sebastian, an economist at CommSec. Growth and fiscal austerity The euro inched up 0.1% to $1.2793, moving away from a four-month low of $1.2642 reached on Friday, which was not far from its trough of 2012. But investor nervousness prevented the yen, widely perceived as a safe haven, to ease significantly from its three-month high against the dollar of ¥79.001 hit on Friday. The yen stood at ¥79.18 on Monday. With a steadying euro, spot gold added 0.4% to $1 598.46 an ounce, after rising more than 1% on Friday. The G8 suggested mounting global support for highly indebted eurozone economies to be allowed to take less strict austerity measures and put more priority on stimulating growth. Reports also suggested Greece's anti-austerity forces could soften their stance to avoid a catastrophic outcome for the nation. Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo, said the G8 comments were positive, but it did not offer a buying incentive for the euro. Rather, he was eyeing whether the yen would breach its 200-day moving average, currently at ¥78.50, and trigger the yen's further climb. Saito said markets were turning to an upcoming European summit on May 23 and comments about the Greece election. The May 23 summit will focus attention on whether European leaders can strike a new balance between growth and the fiscal reforms deemed vital to fixing the eurozone's debt crisis and regaining market confidence in the single currency. Recent opinion polls show Greek voters are returning to the establishment parties that negotiated its bailout, offering potential salvation for European leaders. Alexis Tsipras, the Greek leftist who polled strongly in the inconclusive May 6 election, says he wants talks to keep Greece in the euro. He is looking to forge ties with likeminded European figures such as French President Francois Hollande. Oil prices recovered on Monday, with US crude up 0.5% at $91.90 a barrel, after falling more than 1% on Friday. Brent crude, which closed at its lowest in 2012 on Friday, rose 0.7% at $107.89 a barrel. China's premier called for additional efforts to support growth on Sunday, raising hopes for more stimulus steps to lift demand in the world's second largest economy. He also vowed to maintain his campaign to cool down its property market."Fear index" rising As risk aversion intensified on Friday, the CBOE VIX Volatility index, a gauge of investor anxiety that measures expected volatility in the Standard & Poor's 500 index over the next 30 days, rose 2.5% to close above 25 for the first time since mid-December. Asian credit markets stabilised on Monday on short covering after the G8 meeting, but underlying sentiment was defensive, traders said. The spread on the iTraxx Asia ex-Japan investment-grade index was little changed from Friday, when it reached its widest level since early January.

 

France's Hollande steals show in début

 

In his début in international summitry, Francois Hollande has made a splash - and held his ground on some sharply defined positions.France's new leader grabbed attention at both the weekend's Group of Eight summit in Camp David and at the Nato summit in Chicago ending on Monday, parleying his mandate from voters in a May 6 election and showing he has his finger on the pulse of the public back home.An informal European Union summit on Wednesday will cap his whirlwind first week as French president.Hollande first sped to Berlin to meet Germany's chancellor, he then painstakingly formed a Socialist-led French Cabinet. He jetted to Washington, where he mused about his cheeseburger fetish in an Oval Office get-to-know with President Barack Obama that helped replace memories of Hollande's America-friendly predecessor, Nicolas Sarkozy.Hollande held firm on his two trenchant positions at the summits: His call for pro-growth measures to juice up Europe's lagging economy overshadowed the G-8 meeting, and his promise to break with Nato by pulling French troops out of Afghanistan ahead of other alliance members weighed heavily on the summit in Chicago."There was no embarrassing moment for him, despite the fact that he came right out of the election," said Dominique Moisi, a political analyst with the French Institute of International Relations, IFRI. "The difficulty starts when he comes home... but we all know there won't be any miracles."So far, it's mostly been style over substance. Hollande offered few details about how he would put his plans into practice.The Socialist French president fills a seat that was occupied by Sarkozy, who was often dubbed "Sarko the American" and whose support for a hard line in Iran and Nato's intervention in Libya drew plaudits from US leaders - including Obama. But at home, Sarkozy's brash, in-your-face demeanour in part led to his fall from grace at the ballot box.CharmingSo far, Hollande has ushered in a more inclusive style as French president, and the charm offensive has borne fruit. The timing of the summits also played in his favour: Obama, whose re-election hopes hinge in large part on the American economy's prospects, echoed Hollande's call for pro-growth policies at Camp David on Friday and Saturday.That gave Hollande some momentum going into the Nato summit, where some allies frowned on his early-pullout promises both privately and publicly.Post-electoral honeymoons don't last forever. Much of the questioning that Hollande faced by his trailing press corps centred on his persona, such as his travels in America in 1974 to study a nascent fast food phenomenon and his rapport with other world leaders. Obama playfully teased him for wearing a tie to the casual-dress summit in the Camp David woods and called Hollande his "translator" for French journalists.When one reporter at a French press scrum outside Hollande's Chicago hotel on Monday asked the president if he felt "American," Hollande replied that "I don't know how to take the compliment, if that is one"."But I try to be a Frenchman, who discusses with the Americans - in the hope of making them understand that we have common interests," he said. "I don't try to play the American, and I don't need to play the Frenchman: Be myself."It was aw-shucks charm like that that helped put Hollande, a national lawmaker from rural central France, into the presidential Elysée Palace. Hollande made his name nationally for his quick-witted criticism against a string of conservative governments in France over the last decade, while leader of the Socialist Party.ArticulateAs president, he's morphing from critic to cheerleader. At the summits he subtly claimed credit for France putting on the agenda such ideas as growth, European-supported recapitalisation of ailing Spanish banks or eurobonds to help revive Europe's finances. But he's maintained his sober mindset about Europe's big economic problems.But his personal international rapports are being tested. For all their seeming comity in Berlin last week, Hollande and Chancellor Angela Merkel have lined up against one another politically on both Afghanistan and their prescriptions for European economic health. She champions austerity, he wants pro-growth policies; in Chicago, she reiterated her "in together, out together" mantra for Nato's Afghan mission.Hollande came to the US summits a virtual unknown and benefiting from relatively low expectations. He had first-time introductions to Obama, Merkel, prime ministers Dimitri Medvedev of Russia and Britain's David Cameron all this week. An aide to one of the other G-8 summit attendees, who declined to be identified so as to speak freely about inside details, said that Hollande came across as firm, articulate, and knowledgeable about the agenda items."So far, so good," the political analyst, Moisi, said of Hollande's début on the world stage. "I think what he had to prove was that he was a credible president of France. People had thought that he wasn't: Not just 'Mr Normal'" - an image Hollande campaigned on - "but banal."

NEWS,07.05.2012.

Putin sworn in as Russia's president

 

Vladimir Putin appealed for unity in Russia after being sworn in as president today, pledging to strengthen democracy in his new six-year term.In a glittering ceremony, was inaugurated before nearly 2000 guests in the Kremlin's St Andrew Hall, before being blessed by the head of the Russian Orthodox Church."I will do all I can to justify the faith of millions of our citizens. I consider it to be the meaning of my whole life and my obligation to serve my fatherland and our people," Putin said in a brief speech."We will achieve our goals if we are a single, united people - if we hold our fatherland dear, strengthen Russian democracy, constitutional rights and freedoms."Putin, who was president of the former Soviet republic from 2000-2008 is returning to Russia's highest office after four years as prime minister, said he and the Russian people had already trodden a "difficult path" together."We believed in ourselves and in our powers, strengthened the country and restored the dignity of our great nation. The world has seen Russia reborn, and this is the result of the efforts of our people - shared, intensive work in which everyone has made a personal contribution."He praised Dmitry Medvedev, the ally he steered into the Kremlin when he faced a bar on a third straight term in 2008 and who is set to become prime minister in a job swap that has angered many Russians who are tired of the same leaders."Today we have everything we need to move forward and create a dynamic and developing state: A stable economic and social basis, an active and responsible civil society," Putin said. "I see in this a great service on the part of Dmitry Anatolyevich Medvedev.".A few kilometres across Moscow, several thousand people staged a rally supporting Putin, seen by his backers as the only leader capable of defending Russia's interests on the world stage and the guardian of the economy at home.While Putin's critics have tired of a political system that concentrates power in one man, many of his supporters welcome his domination of the country of more than 140 million."Democracy is the power of the majority. Russia is everything, the rest is nothing!" Alexander Dugin, a Kremlin-aligned nationalist, told the pro-Putin crowd.The rival rallies underlined the rifts opened by Putin's return to the Kremlin and protests that were sparked by allegations of electoral fraud but fuelled by many Russians' frustration that one man continues to dominate the country.Although the protests had lost momentum before Sunday's rally, they have given birth to a civil society, two decades after the collapse of the Soviet Union, that is gradually chipping away at Putin's authority.Putin, who will be 60 in October, grew up in Soviet days and worked as a spy in communist East Germany, is under pressure to show he can adapt to the new political landscape. Few think he has changed much - if at all.Putin has eased up on the choreographed macho antics that burnished his image at his peak in Russia, such as riding horseback barechested and shooting a tiger with a tranquiliser gun.Harder to shake off will be his habit of seeking total control and learning to cope with political opponents and a middle class demanding more political freedom.He has to quell rivalries between liberals and conservatives battling for positions in the new cabinet under Medvedev, who is swapping jobs with Putin. The outcome of the struggle could help determine how far reforms go to improve the investment climate.The $1.9 trillion economy is in better shape than in most European countries but is vulnerable to any change in the price of oil, Russia's main export commodity. The budget is under pressure from Putin's lavish election spending promises.Putin has said he wants to attract more foreign investment by improving the business climate, reduce corruption and red tape, and end Russia's heavy dependence on energy exports. He has not spelled out how he will do this.Putin is likely, as in the past, to use tough anti-Western rhetoric on foreign policy to drum up support if times get tough in Russia. But he has never yielded his strong influence over foreign policy as premier, so a major policy shift is unlikely.

Socialist Hollande ousts Sarkozy in French vote

 

 

Francois Hollande was elected France's first Socialist president in nearly two decades on Sunday, dealing a humiliating defeat to incumbent Nicolas Sarkozy and shaking up European politics.The result will have major implications for Europe as it struggles to emerge from a financial crisis and for France, the eurozone's second-largest economy and a nuclear-armed permanent member of the UN Security Council.Hollande won the vote with about 52 percent, according to several estimates from polling firms based on ballot samples, becoming France's first Socialist president since Francois Mitterrand left office in 1995.Joyful crowds gathered in Hollande's adopted hometown of Tulle and in Paris to celebrate his victory."We are rid of a poison that was blighting our society. A normal president! It gives us a lot to dream about," said Didier Stephan, a 70-year-old artist who was among throngs of supporters at Paris's Place de la Bastille.Even before polls closed and broadcasters released estimates, supporters were chanting "President Hollande!" and "We Won!" at the iconic square.Sarkozy urged leaders of his right-wing UMP party to remain united after his defeat, but warned he would not lead it into June's parliamentary elections, according to political sources present at a meeting at his headquarters.Hollande led in opinion polls throughout the campaign and won the April 22 first round with 28.6 percent to Sarkozy's 27.2 percent -- making the right-winger the first-ever incumbent to lose in the first round.Grey skies and rain showers greeted voters across much of France, but turnout was high, hitting 71.96 percent at 5:00 pm (1500 GMT) according to interior ministry figures. More than 46 million people were eligible to vote.The election was marked by fears over European Union-imposed austerity and economic globalisation, and Hollande has said his first foreign meeting will be with German Chancellor Angela Merkel -- the key driver of EU budget policy.The 57-year-old Socialist has vowed to renegotiate the hard-fought fiscal austerity pact signed by EU leaders in March and to make it focus more on growth, but is facing resistance from Merkel.The French vote coincides with an election in Greece, where voters were also expected to punish the incumbent parties for landing the country in its bleak economic state.Anger over sputtering economies has brought down leaders from Ireland to Portugal since the debt crisis washed over the European continent.

NEWS,02.05.2012

Anti-austerity anger sweeps Europe

Fed up with high unemployment and austerity, May Day protesters took to the streets across Europe on Tuesday in a wave of anger that threatens to topple leaders in Paris and Athens.From the eye of the eurozone debt storm in Madrid to the streets of Paris and Athens, where tottering governments face elections within days, marchers spoke of job losses, spending cuts and hard times.More than two years after the eurozone sovereign debt crisis erupted, frustration with austerity is boiling over across the continent as voters wait in vain for signs of the economic pay-off.

In Spain - suffering the industrialised world's highest jobless rate of 24.4% in the first quarter of 2012 - major unions called protests in about 80 cities.Tens of thousands massed in central Madrid's Neptuno square, decrying the jobless queue, new labour reforms that make it easier and cheaper to fire workers, and a budget squeeze in health care and education."They are going to destroy more jobs with the labour reform," complained 28-year-old graphic designer Sonia Calles."Already in Spain almost everyone is an intern up to the age of 30. And now employment insecurity is going to hit those in their 30s and 40s," she said in the capital.Thousands more rallied in Athens, Thessaloniki and other cities around Greece, five days ahead of cliffhanger general elections with voters fed up with years of austerity."No-one Alone, Together We Will Get There!" read a banner draped on a stage in Athens' central Kotzia square.Polls indicate that Greeks are fleeing the main parties for smaller groups in revenge over a European Union-IMF economic recovery plan that has brought repeated waves of pay and pension cuts.
In Paris, the French presidential election race overcast the day as three powerful political movements battled for attention with competing rallies five days before polling day.Marine Le Pen's anti-immigrant far-right National Front kicked off the May Day events with several thousand supporters marching through central Paris in memory of Joan of Arc, who has become a far-right icon.Le Pen, who scored a record 18% in the April 22 first round, led the march and urged supporters to abstain rather than back President Nicolas Sarkozy or Socialist Francois Hollande in the run-off.Sarkozy's right-wing supporters were gathering at the Place du Trocadero in Paris's posh 16th arrondissement to hear their champion give his last major speech in the capital before the vote.And, on the left, trade unions organised their traditional march to the historic Place de la Bastille.With the latest poll predicting an Hollande win on Sunday by 53 to 47%, Sarkozy is anxious to gain some momentum from the rally.In contrast to Western European rallies, more than 100 000 people held a Soviet-style march through Moscow to celebrate labour day and show support for president-elect Vladimir Putin ahead of his inauguration.Accompanied by kitsch brass music and surrounded by multi-coloured balloons, Putin and outgoing President Dmitry Medvedev led the march through a central Moscow avenue.Police said around 120 000 people took part in the "Holiday of Labour and Spring" march in Moscow.
Elsewhere in Europe, people showed growing frustration with an era of crushing economic hardship.Across Poland and in the Czech Republic's capital Prague, people protested against unemployment, homelessness, and the dogged pursuit of austerity policies.Some 100 000 Social Democratic Party supporters rallied in Vienna for better education and a fairer distribution of wealth, and some 2 000 packed Bulgaria's capital Sofia urging the conservative government to resign.In Turkey, tens of thousands from all political parties packed the emblematic Taksim Square in Istanbul. Some 20 000 police mobilised in the city to ensure security in the marches.

 

Sarkozy goes for broke but Le Pen scorns his advances

 

Nicolas Sarkozy took his re-election bid to the streets of Paris on Tuesday, seeking to hijack the French left's traditional May Day show of force but failing to win over a scornful far right.With five days to go before the French presidential vote, the country's three main political movements were on the march, with three competing street rallies in the capital battling for the electorate's attention.Marine Le Pen, flag-bearer of the far-right anti-immigrant National Front seized on her party's traditional May Day homage to Catholic martyr Joan of Arc to launch another fierce attack on both remaining candidates.She had won just under 18 percent of the vote in the first round on April 22, trailing Sarkozy and the Socialist frontrunner Francois Hollande, who now face each other in a televised debate Wednesday and the run-off on Sunday.Sarkozy has embarked on a determined bid to recruit her supporters to his cause, stressing again and again his promises to cut immigration, withhold voting rights from foreign citizens and oppose gay marriage.But a triumphalist Le Pen scorned his overture, damning Sarkozy and Hollande equally as creatures of the same party duopoly she blames for France's economic woes and loss of sovereignty to Europe and international finance."Who between Francois Hollande and Nicolas Sarkozy will impose the austerity plan in the most servile way? Who will submit the best to the instructions of the IMF, the ECB or the European Commission?" she demanded ironically."On May 6 it's not a president who is to be elected, but a simple employee of the European Central Bank, a Brussels sub-controller of finance, charged with applying the Commission's decisions without question," she said."And, forgive me, with regular reports to Angela Merkel's Germany," she added, as the crowd booed.Le Pen reminded her supporters that they are free to vote as they choose on Sunday, but said that she would cast a blank ballot so as not to endorse either candidate and strongly suggested that they should do the same.She declared that the National Front had set the agenda of the presidential election and imposed itself as the "compass" guiding French politics, and she urged her supporters to back the party in June's legislative election."This movement we have launched cannot be stopped, our victory is inevitable. Nothing will ever be the same again," she said.Polls suggest many of Le Pen's supporters will vote grudgingly for Sarkozy, although not enough to return him to office, and many of the hardcore party members in the crowd in Place de l'Opera disagreed."If I was obliged to vote, with a pistol to my head, I'd probably vote Hollande, because five years ago Sarkozy said he had killed the National Front," said Jean-Marie Cojannot, 66, who had come from the far south.Sarkozy was to meet thousands of his own supporters gathered at his last major rally in the capital across from the Eiffel Tower at the Trocadero, hoping for a last-minute surge to defeat a confident Hollande.And, on the left of the debate, trade unions set out along the boulevards of the Left Bank in bright sunshine on their traditional march to the historic Place de la Bastille.With the latest poll predicting a Hollande win on Sunday by 53 to 47 percent, Sarkozy is anxious to gain some momentum from the rally and said he expected "tens of thousands of French" to take part.Under fire for rallying his supporters on a day traditionally dominated by unions and the left, Sarkozy has hit back with attacks on state benefit recipients and appeals to the middle class.

NEWS,18.04.2012.

Angry North Korea threatens retaliation

A bristling North Korea today said it was ready to retaliate in the face of international condemnation over its failed rocket launch, increasing the likelihood the hermit state will push ahead with a third nuclear test.The North also ditched an agreement to allow back inspectors from the International Atomic Energy Agency. That followed a United States decision, in response to the rocket launch it says was a disguised long-range missile test, to break off a deal earlier this year to provide the impoverished state with food aid.Pyongyang called the US move a hostile act and said it was no longer bound by its February 29 agreement with Washington, dashing any hopes that new leader Kim Jong-un would soften a foreign policy that has for years been based on the threat of an atomic arsenal to leverage concessions out of regional powers."We have thus become able to take necessary retaliatory measures, free from the agreement," the official KCNA news agency said, without specifying what actions it might take.Many analysts expect that with its third test, North Korea will for the first time try a nuclear device using highly enriched uranium, something it was long suspected of developing but which it only publicly admitted to about two years ago."If it conducts a nuclear test, it will be uranium rather than plutonium because North Korea would want to use the test as a big global advertisement for its newer, bigger nuclear capabilities," said Baek Seung-joo of the Seoul-based Korea Institute for Defense Analysis.Defence experts said by successfully enriching uranium, to make bombs of the type dropped on Hiroshima nearly 70 years ago, the North would be able to significantly build it up stocks of weapons-grade nuclear material.It would also allow it more easily to manufacture a nuclear warhead to mount on a long range missile.The latest international outcry against Pyongyang followed last week's rocket launch, which the United States and others said was in reality the test of a long range missile with the potential to reach the US mainland.North Korea has insisted the rocket launch, which in a rare public admission it said failed, was meant to put a satellite into orbit as part of celebrations to mark the 100th birthday of President Kim Il-sung, whose family has ruled the autocratic state since it was founded after World War Two.The peninsula has been divided ever since with the two Koreas yet to sign a formal peace treaty to end the 1950-53 Korean War.Recent satellite images have showed that the North has pushed ahead with work at a facility where it conducted previous nuclear tests.While the nuclear tests have successfully alarmed its neighbours, including major ally China, they also showcase the North's technological skills which helps impress a hardline military at home and buyers of North Korean weapons, one of its few viable exports.The North has long argued that in the face of a hostile United States, which has military bases in South Korea and Japan, it needs a nuclear arsenal to defend itself."The new young leadership of North Korea has a very stark choice; they need to take a hard look at their polices, stop the provocative action," U.S. Secretary of State Hillary Clinton said at a news conference in Brazil's capital.The Swiss-educated Kim Jong-un, who is in his late 20s, rose to power after his father's death last December. The country's propaganda machine has since made much of his physical likeness to his revered grandfather, the first leader and now North Korea's "eternal president".But hopes the young Kim could prove to be a reformer have faded fast. In his first public speech on Sunday, the chubby leader made clear that he would stick to the pro-military policies of his father that helped push the country into a devastating famine in the 1990s.Kim is surrounded by the same coterie of generals that advised his father and he oversaw Sunday's mass military parade.He urged his people and 1.2 million strong armed forces to "move forward to final victory" as he lauded his grandfather's and father's achievements in building the country's military.

Russia creates 'police crimes' unit

Russia on Wednesday created a special unit to investigate crimes committed by the country's vast but corruption-laden police force.The powerful Investigative Committee's decision to form the unit follows a spate of reports of police torture in the country's prisons and a new focus on the problem in Russia's Kremlin-controlled media."The need to create such a special unit is based on objective reasons," the Investigative Committee said in a statement.It said investigators currently looking into police crimes run into "certain difficulties" because officers and their bosses often use their professional skills "to mislead the investigation and avoid criminal responsibility".Interior Minister Rashid Nurgaliyev was forced to report to parliament last week about a spike in reported police violence and other abuses.The recent death in custody of a petty crime suspect after being raped by officers with a champagne bottle has focussed attention on the problem which has dogged Russia for years.Investigators said they have received 65 complaints against the same police precinct in the central Russian region of Tatarstan since the case initially came to light last month.Russia's outgoing President Dmitry Medvedev had made police reforms one of the planks of his four years in power.But he was recently forced to admit that his campaign to improve the police force may take years.