NEWS,29.11.2012

The Politics of Fear

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

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

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

 

EU outlines stop-gap 2013 budget

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

BoE urges UK banks to boost capital

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

US stocks and euro sell-off on Boehner comments

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

NEWS,22.11.2012

Summit fatigue leads to bad decisions

The European Union may have won the Nobel Peace Prize this year, but to many EU leaders, officials, diplomats and even journalists, it can feel more like a torture chamber.Increasingly, Europe is governed at night by leaders in an advanced state of exhaustion, disregarding scientific evidence that this can lead to bad decisions, or non-decisions.Over the past three years, the EU has held 25 summits to try to tackle its debt crisis and related economic turmoil, with few of those meetings ending before 3 or 4 am, usually after 12 hours or more of near-fruitless negotiation. Add to that more than 40 finance ministers' meetings, the most recent of which ended at 5 am on Wednesday, again without agreement, and it is easy to see how a set of institutions designed to foster peace and stability in Europe can end up delivering frustration, angst and head-numbing pain."I'll put it this way: I woke up at 5 am or 5:30 am yesterday and we ended in the morning around 4 am," Slovak Prime Minister Robert Fico complained after the last, largely unsuccessful summit in October. "This is how all of us operate, we adopt very serious decisions under pressure," he said, referring to the EU's increasingly weary heads of state and government. The EU's 27 leaders gathered for another summit on Thursday and Friday, this time to try to hammer out an agreement on around €1 trillion ($1.3 trillion) of spending over the next seven years. It promises to be a bruising clash of national interests rather than the model of reconciliation and harmony commended by the Nobel committee, although it will still be "jaw, jaw" rather than "war, war". Gatherings to negotiate the long-term budget only happen every 6 or 7 years and are notorious for running over deadline and for being extremely hard-nosed and ill-tempered affairs. Former British Prime Minister Tony Blair described his experience of it in 2005 as the most difficult negotiation he handled while in office, tougher even than the 1998 Northern Ireland peace talks that led to the Good Friday agreement. Already EU officials are warning that these budget talks could run into Saturday and Sunday, making it what is known in diplomatic circles as a "four-shirt" summit.Staff at the European Council in Brussels, where EU leaders meet, have been told to be ready to work into Saturday at least. British Prime Minister David Cameron has cleared his schedule for the entire weekend, a spokesperson said. French President Francois Hollande has done the same. Journalists, around 1 500 of whom are accredited to cover the meeting, took up residence in the vast glass and steel entrance hall on Thursday morning and will stay encamped there until a deal is done, or negotiations break down. The effect on the EU's public image among its 500 million citizens is unedifying."It's not exactly glamorous and some would say it's downright torture," said one EU diplomat, a veteran of at least 30 EU summits. "Everyone gets extremely fed up."Sweden has organised extra bedding for its diplomats to take a rest in their delegation room if necessary.Bad decision making? The larger issue, though, is whether the pressure-cooker atmosphere and endlessly drawn-out negotiating schedule is conducive to good decision-making.Everyone knows that drivers should take a rest after four or five hours at the wheel to avoid accidents. Shouldn't the leaders of nation states take the same precaution lest they take a bad decision that might run their country off the road?A study published by three academics in the Proceedings of the National Academy of Sciences in the United States last year showed that a judge's willingness to grant parole can depend to a large extent on how tired he or she is and when they last ate.The study examined more than 1 000 parole decisions made by experienced judges over a 10-month period. It found that the more decisions judges have to make, the more difficult it becomes to stay consistent, they get decision fatigue."The theory determines that decision-making capacity is a limited resource, and when many decisions are made in sequence, the mental capacity diminishes," Professor Shai Danziger of Ben-Gurion University, one of the authors, said at the time.That could be a lesson for EU leaders and the political advisers, diplomats and hangers-on who have to help them make the right decisions time and again for days in a row.One experienced EU ambassador, a veteran of multiple foreign postings in high-pressure places, said a lesson could be drawn from how Israel handles Middle East talks.When the Oslo peace accords were being negotiated with the Palestinians in the mid-1990s, Israel would change its negotiating team every six hours or so to avoid fatigue and the risk of mistakes."No one can negotiate at full capacity for more than six hours at a time, you just can't concentrate that long," the ambassador said. "They wanted to make sure they had a fresh team that was at its sharpest."China has employed similar tactics in business and trade negotiations, officials say.By contrast, EU leaders will have at least 12 straight hours of negotiation on each of the next two days and more if the meeting drags on into the weekend.And if that isn't enough, there's another meeting of finance ministers starting on Monday evening.

Lessons of the Gaza War

Now that the cease-fire between Israel and Hamas has begun to take effect (at least for now), it's time to begin to assess the outcome of the war, and where we go from here.

1. The big star and game changer is the Iron Dome anti-missile defense system. Without it, there would have been many more Israeli casualties, and the Netanyahu government would undoubtedly have sent ground troops into Gaza. Look for the immediate hot topic in security circles to be anti-missile defense systems, and look for American aid to Israel to increase on this front. President Obama has already indicated his support.
2. Israel often has a hawkish reputation, but it is amazing that it has watched as Hamas and Hezbollah on its southern and northern borders gradually escalated missile capabilities. We Americans wouldn't have done that if some group developed much less of a capability on our Canadian or Mexican borders, let alone both. Look for Israeli hawks and doves to both argue that their analysis was correct, and recommend policies accordingly.
3. Hamas is a big winner. Even in the last hours of the conflict, it was still capable of attacking Israel. Look for an enhanced Hamas prestige among Palestinians and in the Arab world. More troubles for the U.S., Israel, and the Palestinian Authority.
4. But, at least in the short term, look for a longer term truce and the dramatic reduction of missiles from Gaza raining on Israel, and therefore a limit on Israeli retaliations. Look for both sides to declare victories; greater standing for Hamas, and enhanced deterrence for the Israelis.
5. The new Islamist Egyptian government performed well in becoming the main sponsor of the cease-fire agreement, but the Sinai -- the conduit for arms to Gaza -- has become more lethal than ever. Look for pressure to increase on Egypt to do something about Sinai, and for quiet discussions calling for the addition of western advisers to help to regain Cairo's control. Egypt's role in the cease-fire and its weakness in Sinai could and should actually enhance the Israeli-Egyptian peace treaty if it is handled properly.
6. Iran is a big winner. It managed to provide the missiles to Hamas via Sudan and through the Sinai that had the greatest psychological impact on both Israelis and Arabs alike by seeming to threaten Tel Aviv and even Jerusalem.
7. At the same time, the confrontation with Iran becomes more complex, as there will be mixed interpretations of the meaning of the Gaza War. On the one hand, there will be less enthusiasm for an attack on its developing nuclear weapons program among the already wary Israeli public and a significant number of security specialists, reinforced by American and European caution. On the other hand, others will argue that the Hamas arsenal suggests that a nuclear Iran would be even more dangerous. Look for intensified disputes in the months to come about a possible attack on Iran, even tougher sanctions, and more pressure on President Obama to both try to reach a negotiated settlement on that front and to consider American action.
8. Similarly, as suggested in the cease-fire agreement, there will be alleviation of the already-diminished Israeli blockade of Gaza. Look for much greater flexibility on civilian goods entering Gaza and much more attention to the passage of Libyan and Iranian arms (through Sudan to Egypt) to Hamas.
9. The Palestinian Authority under Mahmoud Abbas is a big loser. It will be more difficult than ever to bolster the Fatah leadership on the West Bank as Hamas grows in stature. The United States will be challenged to provide more economic aid and more diplomatic activity on the peace process. Look for much more attention to the Israeli-Palestinian peace process than at any time since mid-2011, when President Obama's initiative at the time quickly fizzled.
10. American efforts will be more complicated than ever because of the imminent Palestinian bid to become a non-member observer state at the UN. At least in the short term, membership will strengthen Abbas, but the missile war with Israel strengthens the possibility of Hamas leadership. The U.S. cannot afford Hamas, an ally of Iran, potentially representing Palestine at the UN, should Abbas weaken further. Look for the U.S. to try to square the circle by increasing its opposition to the Abbas UN initiative, and simultaneously attempting to strengthen Abbas through economic aid and the resumption of diplomacy on the peace process front. That might have the chance of some success if the conflict over the UN bid, now presumed to trigger diminished aid to Abbas, can somehow be resolved.

During the Gaza War, President Obama was traveling in Southeast Asia, as part of the administration's vaunted "pivot" to Asia. It's a good policy, but the Middle East followed him there. As the president contemplates new appointments in the foreign policy arena, he will have to consider that just as the U.S. necessarily begins to pay more attention to the Asian front, the conflicts and problems of the Middle East will stubbornly remain. We will be stuck with a very complex region we cannot ignore for a very long time to come.

NEWS,11.11.2012

What did they learn?

The 2012 presidential election shattered spending records, further polarised a divided country and launched a thousand hashtags. The race appeared to be a nail-biter going into Tuesday night but in the end, it came down to the state that most had been saying for weeks that it would Ohio.

Here are five things we learned from Tuesday:

1. The GOP has a Latino problem

"If we don't do better with Hispanics, we'll be out of the White House forever," says Republican strategist and CNN contributor Ana Navarro, who was the national Hispanic co-chair of Senator John McCain's 2008 presidential campaign.

"The big issue Republicans are going to have to wrestle with is the Hispanic issue," adds Republican strategist and CNN contributor Ari Fleischer, who served as former president George W Bush's first press secretary. "Republicans are going to have to find a different way forward."

The national exit polls tell the story. Latinos are the fastest growing-segment of the population. Their share of the vote expanded from 9% in 2008 to 10% in this election. The president won 67% of the vote four years ago. He increased that to 71% this year.

Latinos were crucial in helping Obama win the battleground states of Colorado and Nevada, and in putting the president in the lead for Florida's 29 electoral votes. And they were just as important in turning the former swing state of New Mexico into what appears to be an increasingly safe state for the Democrats.

If the current trend continues, Arizona and Texas could turn from red to purple.

The 2012 election is a loud wake-up call for the GOP to change its stance on illegal immigration.

And that's being acknowledged by arguably the best known Latino Republican senator.

"The conservative movement should have particular appeal to people in minority and immigrant communities who are trying to make it, and Republicans need to work harder than ever to communicate our beliefs to them," said Senator Marco Rubio of Florida in a statement on Tuesday night.

2. The youth vote came up big and the white vote got smaller

A big question heading into Election Day was whether younger voters would show up at the polls.

More of them did than last time.

According to national exit polls, 18-29 year olds increased from 17% to 18% of the electorate from 2004 to 2008. They made up 19% of the electorate this time around. That jump in size from four years ago made up for the president's drop in capturing the youth vote, from 66% in 2008 to 60% in 2012.

It wasn't just age, but also race, that worked in the president's favor.

Obama's share of the white vote dropped from 43% four years ago to 39% this year. But that was negated by the shrinking of the white vote from 74% of the electorate four years ago to 72% now. And the African-American percentage of the electorate stayed steady at 13%. Some GOP strategists said that the white vote needed to be 74% for Romney to win.

"The youth vote and the black vote turned out once again and that's to the president's credit," Fleischer said.

3. The auto bailouts helped drive Obama to victory in Ohio

For months, the Obama campaign touted the taxpayer bailouts of General Motors and Chrysler, and they were given prominent prime-time placement during the Democratic National Convention in early September.

It's a strategy that the Obama campaign thought could be the difference in Ohio, a major base for the auto industry that eventually decided the election.

"The American auto industry is back on top," Obama said campaigning last week in the Buckeye State.

The bailouts were started under President George W Bush in 2008 but Obama grabbed the keys to the programme the next year, managing and funding the assistance.

Romney opposed the bailout and pushed for a privately financed and managed bankruptcy of the two automakers. The Obama campaign and other Democrats have attacked Romney over his opposition to the federal intervention, which aided the companies through their eventual bankruptcies.

And in the final weeks leading up the the election, the Obama campaign highlighted pushback by General Motors and Chrysler to a Romney TV ad and a radio spot this past week that claimed both domestic auto makers were sending US jobs to China.

It seemed to work. Nearly six in 10 Ohio voters said they approved of the federal government's role in helping the troubled domestic automakers, and according to exit polls, the president won three quarters of those voters.

4. Romney wasn't able to expand the map

Much was made of campaign visits by Romney and his running mate, Representative Paul Ryan, to Pennsylvania in the final weekend before the election, and Romney's return to the Keystone State on election day.

The Romney campaign and allied super PACs supporting the GOP nominee flooded Pennsylvania airwaves in the final weeks with a flurry of TV ads.

To a lesser degree, there was a similar push in Minnesota, another solidly Democratic state where public opinion polls tightened last month.

There was talk by Romney campaign officials of being on offense and of expanding the electoral map.

It didn't pan out.

While Romney performed stronger than 2008 Republican nominee John McCain in Pennsylvania and Minnesota, it wasn't enough. And of the swing states that swung blue four years ago, it appears Romney was only able to turn Indiana and North Carolina red again.

Romney's 'all' proved not enough

5. What will $6bn get you?

We had a Democratic president, a Republican House of Representatives, and Democratic Senate going into the 2012 election. And we'll have a Democrat in the White House, with a Republican House and a Democratic Senate after the election.

When all the bills are in, total spending for the 2012 election (all federal and state races) could top a record-breaking $6bn. And what did all that money buy?

Some would argue ... nothing.

 

Greece votes on budget to unlock aid

Parliament in Athens are preparing to vote on an annual budget that will cut spending and raise taxes yet again but which the government insisted will kill off talk of Greece being forced out of Europe's currency union.An anti-austerity demonstration called by major trade unions mustered thousands of protesters outside during the debate but a spokesman for conservative prime minister Antonis Samaras's coalition reflected confidence the government majority would see the 2013 budget bill pass, probably around midnight."With today's vote, we put an end to the Grexit talk," Simos Kediglou told a Greek television channel, using the term coined for the possibility Greece might force to exit the euro zone.The measure, following a separate package of belt-tightening approved last week, should ensure Athens receives further credit from international lenders and so avoid imminent insolvency.However, many of the 10 million Greeks, driven to despair by five years of debt-laden economic slump, fear attempts to cut the public deficit will only deepen the crisis and many poorer citizens say living standards in a country where unemployment is running at 25% are becoming hard to bear."All those measures throw us back 50 years," said Thymios Marvitsas, 75, during a communist protest march to parliament during the budget debate. "Our pensions and wages are cut. My life is getting harder and harder."Police estimated the crowd outside parliament at 13,000.Arguments about the wisdom of cutting spending have also divided the political establishment and today's vote poses a test of confidence in Samaras's three-party coalition.It managed to pass Wednesday's austerity and reform package by only a narrow majority after the smallest of the partners, Democratic Left, abstained. However, its leaders have said the party will vote for the 2013 budget and, with Samaras having nominal support from 168 of the 300 members, it should pass.Hours later, euro zone finance ministers meet in Brussels for talks likely to be dominated by the Greek crisis though a final decision on extended more credit is not expected.Securing both pieces of budget-cutting legislation has been a condition of renewing bailout funding and unlocking more than 30 billion euros in financing from the International Monetary Fund and European Union later this month.The government, formed after a tumultuous election in June, has ignored sliding poll numbers and occasionally violent street protests in pursuit of favour with its creditors."Today we must demand sacrifices so there is hope for future generations," Finance Minister Yannis Stounaras told parliament on Saturday. "Re-establishing our credibility is our only passport to recovery."For the opposition, Panagiotis Lafazanis of the leftist SYRIZA party, responded: "For three years you have been going from bailout to bailout, rescue to rescue."You've already bankrupted the Greek people."According to the budget draft, the Mediterranean state's economy will shrink for its sixth year running, by 4.5%.The budget deficit will be 5.2% of gross domestic product (GDP), down from 6.6% expected this year. But once the cost of paying interest on its huge debt is removed, Greece will show a tiny surplus for the first time in decades.These deficit figures assume Athens's lenders will extend a deadline for it to narrow its fiscal shortfall by two years in exchange for the new belt-tightening package.The biggest cost-reductions next year are pension cuts of up to 15% for almost half the total 9.4 billion euros in budget savings and public wages cuts of 1.2 billion.Greece's fiscal adjustment has hit workers more than the wealthy elite. This has become a sore point in a nation where media have published lists of bankers, lawyers and shipping magnates who they say have moved cash to Switzerland."It's always the same. The poor pay and no one touches the rich and the tax evaders. Winter is coming and I can't afford heat," said 41-year-old housewife Angeliki Petropoulou.

Brics eye $240bn forex reserves pool

Leading emerging market countries are discussing pooling up to $240bn in foreign exchange reserves to protect themselves from short-term liquidity pressures, according to documents outlining plans by the five Brics nations.Brics countries China, Russia, India, Brazil and South Africa announced a working group in June to look into jointly pooling reserves and creating a new development bank to fund infrastructure projects in the developing world.According to the documents, the pool of central bank money would be available to Brics facing balance of payments difficulties. Some, however, are also pushing for a precautionary credit line, similar to the IMF's that provides countries with insurance against outside economic shocks.The move is part of growing frustration among the Brics and other developing countries with the continued dominance by the United States and European countries of global institutions like the International Monetary Fund and World Bank.Brics officials meeting on the sidelines of a recent G20 summit of finance ministers from developed and developing nations sought to advance their plans ahead of a Brics leaders' summit in South Africa in March.Planned currency swap arrangements would also give Brics the ability to lend to each other to keep markets liquid. fficials at the G20 Brics meeting, who spoke on condition of anonymity, said China had emphasised that the size of the reserve pool needed to be sufficiently big to be taken seriously by markets.Officials believe that the Brics reserve pool should be similar in size to the Chiang Mai Initiative of southeast Asian countries, which was doubled to $240bn in May to boost their protection against external shocks. The Chiang Mai program, first agreed in 2000, has never been put to use because it would require the country to request a program from the IMF, which was blamed for insufficient bailouts during the Asian currency crisis of 1998.Eswar Prasad, a Cornell University economics professor and senior fellow at the Brookings Institution in Washington, said the proposed plan for pooling resources posed a "strong and serious challenge to existing global monetary arrangements.""Irrespective of the logic and possible complications of these schemes to pool their funds, these proposals from the Brics may have the salutary effect of prodding global monetary reforms along at a faster pace," Prasad said.Countries like China are keen to see its currency, the yuan, added to the IMF basket of currencies, currently including the pound, yen, euro and dollar, that make up the IMF unit of account, the Special Drawing Right.   While a number of the Brics believe disbursements from the reserve pool should be made in US dollars, others preferred to use the SDR. "In terms of disbursement, the preference would be to use the US dollar or other reserve currencies, but the view was also expressed that part of the disbursements could be made available in Brics national currencies," according to the documents.Discussions are also looking at what conditions should be attached to the reserve pool. One question is whether the scheme should be linked to an IMF program, which could be a bitter pill to swallow for any of the Brics. Some Brics are arguing for a partial link to the IMF, with an initial quick disbursement subject to rules of the pooling. The Brics are also considering creating a new development bank to support financing of long-term infrastructure projects for emerging and developing economies, to meet the pressing need for roads, railways, ports and electricity.The Brics bank would be in competition with the World Bank and other multilateral development banks, which also provide loans for infrastructure projects. However, countries like India are already facing limits on its borrowing from the World Bank.The Brics documents noted that existing multilateral development banks are under-capitalised compared to the growing needs of emerging economies and developing countries.The new bank would initially issue non-concessionary project-linked finance to members, meaning that the financing would be at a higher cost. A small window of low-cost loans could be considered as the bank expanded, the documents said.The World Bank and other institutions have long insisted that lending to poor countries should involve low-interest loans to avoid pushing up their debts to unsustainable levels.

NEWS,10.11.2012

Obama 'open to compromise' to avoid cuts

Newly re-elected President Barack Obama has offered to deal with Republicans to avert a looming US fiscal calamity but insisted a tax increase for the very rich must be part of the bargain.Obama reminded Republicans that his approach to avoiding steep tax hikes and spending cuts due in January, which could trigger another recession, had just won the backing of Americans at the polls.He spoke just hours after John Boehner, the Republican Speaker of the House of Representatives, had repeated his party's commitment not to raise anyone's tax rates as part of a deal to address the fiscal crisis.In his first event at the White House since beating Republican Mitt Romney in Tuesday's election, Obama called on Congress to work with him to produce a plan and invited congressional leaders to meet with him next week."I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas," he said.The "fiscal cliff" of steep government spending cuts and tax increases due to be implemented under existing law in early 2013 is Obama's most pressing challenge after winning a second term.Aimed at cutting the federal budget deficit, the planned measures could take an estimated $600 billion out of the economy and severely hinder economic growth.While striking a conciliatory tone toward the Republican House majority, Obama said voters supported his ideas, including raising taxes on the wealthiest Americans."I just want to point out, this was a central question during the election. It was debated over and over again. And on Tuesday night we found out that the majority of Americans agree with my approach," he said.Earlier, Boehner called on Obama to play a more active role in addressing the issue and urged the president to take the lead in negotiations."This is an opportunity for the president to lead. This is his moment to engage the Congress and work towards a solution that can pass both chambers," Boehner told a news conference.While disagreeing on immediate measures to avert the looming crisis, Obama and Republicans may find common ground in calls for enactment over the next six months of a larger package of deficit reduction measures, including a rewrite of US tax laws.The non-partisan Congressional Budget Office reiterated on Thursday that if left unaddressed, the abrupt fiscal tightening would knock the economy back into recession, with unemployment rates soaring back to about 9%. The rate is now 7.9%.But it also warned of a crisis ahead if the United States does not stem the growth of its exploding deficit.Partisan squabbling over the budget crisis will also harm the US economy, according to a strong majority of economists polled after Tuesday's presidential election.

Chavez On Obama Reelection: President Should Forget Global Wars, Fix Domestic Problems

 

The U.S. government's chief antagonist in Latin America, Hugo Chavez of Venezuela, has advised newly re-elected U.S. President Barack Obama to avoid further entanglement in international conflicts and concentrate on fixing internal problems."He should reflect first on his own nation, which has a lot of economic and social problems. It's a divided, socially fractured country with a super-elite exploiting the people," the socialist president said late on Thursday in his first reaction to Obama's victory this week.The maverick Chavez, who has inherited Fidel Castro's mantle as Latin America's most voluble challenger of U.S. power and policy, said it was time Obama pulled back from global affairs."He should dedicate himself to governing his country and forget dividing and invading other nations," added Chavez, who has constantly criticized U.S. involvement in Iraq, Afghanistan and other hot spots around the world.To the disappointment of the U.S. government, Chavez was re-elected for another six-year term in October, providing a continued platform to implement his self-styled socialist revolution and keep railing against Washington.The 58-year-old Chavez, a quieter figure these days after a year of debilitating treatment for two bouts of cancer, had backed Obama over Republican challenger Mitt Romney in the White House.Nevertheless, he does not disguise his disappointment in Obama, accusing him of perpetuating the same aggressive foreign policies as his predecessor, George W. Bush.Since his Oct. 7 presidential election victory over opposition challenge Henrique Capriles, Chavez has been relatively subdued, only popping up on state television once or twice a week in meetings with ministers.He has made no major new policy announcements, beyond promising more efficiency in government and a widening of socialist "communes" across Venezuelan society.Many Venezuelans expect a devaluation of the bolivar currency in coming months the black market rate is three times the official one and perhaps more nationalizations in an economy where Chavez has radically increased state ownership.Speaking at a Cabinet meeting, Chavez made light of nationalization concerns, urging businesses not to fear him."Come and invest! Don't believe the fairy tale that we're going to expropriate you," he said in comments on state TV.Earlier in the week, Chavez plied the same line, espousing a supposed new moderation toward private business that critics scoff at as hypocritical and barely believable."It's totally false that I have a plan to expropriate everyone," he said then. "Don't be deceived by that tale of 'here comes the wolf.' Lies. I'm urging you to come and work."He was less conciliatory in his view of Venezuela's upcoming state elections on Dec. 16, casting them in his Thursday appearance as a continuation of the state's battle against "counter-revolutionary" candidates of "the bourgeoisie.""We have to keep fighting this ideological confrontation," he urged his candidates for governorships in the 23 states.The most closely watched vote is in Miranda state, where incumbent governor Capriles aims to hold off a challenge from Elias Jaua, a heavyweight Chavez ally and former vice president.Should Capriles lose, it would dent his status as Venezuela's main opposition leader and deal another blow to the coalition of anti-Chavez parties already demoralized by their failure to oust him from the presidency.However, pollster IVAD put Capriles way ahead this week, with 55 percent of voter intentions versus 34 percent for Jaua. The opposition currently holds seven states.

A Trade Policy for President Obama's Second Term

 

President Obama's trade policy in his first term included working with Congress to pass free trade agreements with South Korea, Colombia and Panama, continuing negotiations on the Trans-Pacific Partnership and expanding it to include Canada and Mexico. Moreover, Obama set a goal of doubling exports by 2014, established a trade enforcement council and increased WTO dispute settlement to enforce existing international trade laws. He also effectively managed the complex U.S.China economic relationship, getting China to more effectively protect US intellectual property rights and ending China's so-called indigenous innovation policies. During the next four years the president should build on this progress and develop a comprehensive trade policy that does three things: 1) builds greater cooperation with China 2) pursues comprehensive and high quality free trade agreements; and 3) articulates a vision for moving the WTO Doha Round forward.The size of U.S.-China trade makes building this bilateral relationship key to achieving Obama's goal of doubling exports and for making progress on broader U.S. goals on an international level. But the size and growing trade deficit - which in 2011 was $295 billion and is on track to be even larger in 2012 - feeds concerns about unfair Chinese business practices and American economic and manufacturing decline, which ultimately makes advancing the economic relationship with China rather difficult.The challenge for Obama is that the size of trade deficit is unlikely going to change much in the next four years because of China's role in global supply chains as the major assembly point for goods made from components sourced from South East Asia, Europe, the U.S. and Japan. In this light, the U.S.-China trade deficit is the accumulation of declining U.S. trade deficits with countries like Japan, South Korea and Malaysia as businesses in these countries have shifted production to China. This shift to more efficient and cost-effective production conditions has led to significant decreases in the prices of these imported goods to American businesses and consumers. One way to reduce the bilateral trade deficit would be to address China's undervalued currency. An undervalued renminbi (RMB) has the effect of making Chinese imports cheaper and American exports to China more expensive. Therefore a revaluation would reduce the deficit by increasing U.S. exports to China and reducing imports from China. The dispute about China's undervalued currency has also negatively affected broader U.S. trade goals, such as concluding the WTO Doha Round since the undervalued RMB caused developing country to resist further reductions in tariffs due to concerns about competition from cheap Chinese imports. That said, the net economic impacts of China's undervalued currency for the U.S. are unclear as a lower RMB also leads to cheaper goods for American consumers and businesses. While an appreciating RMB will likely lead businesses to relocate to lower cost countries and thereby reduce the U.S.China trade deficit, it will not lead to a decrease in the overall U.S. trade deficit.But reducing these US concerns about the RMB and the trade deficit, other areas for cooperation with China like clean energy should open up. President Obama supports developing green energy in the U.S. and China's 12th Five Year Plan includes ambitious domestic renewable energy goals. These goals could be complimentary with the U.S. specializing in high-end green technologies and services and China manufacturing components like solar photovoltaic cells. A liberalized trading regime in green energy would underpin this outcome, leading to the most efficient allocation of resources and reducing the costs of renewable energy in both countries. But concerns in the U.S. about Chinese subsidies for renewable energy and a U.S. focus on developing green manufacturing capacity has already led to WTO litigation. Both countries should instead use the trading system to support this common goal and build on the recent agreement in APEC to reduce tariffs on a range of environmental goods by expanding the list of environmental goods and addressing other trade barriers affecting green energy goods and services.Currently, the Trans-Pacific Partnership is the only significant free trade agreement (FTA) the U.S. is pursuing and completing the negotiations should certainly be a priority for the next Obama administration. The main outstanding issue is whether Japan will join the current negotiations. While Japan's participation would slow down the talks, it would secure Japan's support for the trade and investment rules that the U.S. wants for the Asia-Pacific region and provide economic heft to the TPP. All this would increase the incentive for other countries to join the TPP and create further momentum toward an Asia-Pacific FTA, reinforcing Obama's broader strategic "pivot" towards Asia.A big potential new FTA is with the EU the US's largest bilateral trading partner. Most tariffs between the US and the EU are already low, so improving market access will require addressing so-called behind the border regulatory measures such as on genetically modified organisms, vehicle safety standards and pharmaceutical health and safety laws. Prior experience addressing trade barriers in the Transatlantic Economic Council suggests that making progress on these issues will not be easy. However a US-EU FTA would certainly deliver economic benefits for the U.S. and European Union.President Obama can be expected to continue to efforts to conclude parts of the WTO Doha Round, focusing on a services agreement, expansion of the international technology agreement and trade facilitation. However, only multilateral trade liberalization will deliver the largest economic benefits for the U.S. and globally, and the U.S. as the necessary leader and largest beneficiary of the multilateral trading system should develop a strategy for concluding the WTO Doha Round during the next four years.

NEWS,20.10.2012

1 000s rally against UK austerity drive

Tens of thousands of people took to the streets of London and other British cities on Saturday in protest against government spending cuts, with union leaders expected to call for a general strike.Marchers carried signs reading "No cuts" and "Cameron has butchered Britain", condemning the austerity measures introduced by Prime Minister David Cameron's coalition government in a bid to reduce Britain's huge deficit."This is not a crisis that is going to sort itself out through cuts," 19-year-old protester Jonathan told."We've had a double-dip recession now, and we are here today to show we are not going to stand it any longer."Britain climbed out of a deep economic downturn in late 2009 but fell back into recession at the end of 2011.Protesters paused to boo at Cameron's Downing Street residence, and shouted "Pay your taxes!" at a Starbucks coffee shop.Starbucks was embroiled in a row this week after it was reported that the US giant paid just 8.6 million ($13.8m) in British corporation tax over 14 years.At a huge rally in Hyde Park at the end of the march, opposition Labour leader Ed Miliband attacked Cameron for "cutting too far and too fast"."He clings to an economic plan that isn't working," Miliband told protesters. "Self-defeating austerity is not the answer.""Austerity isn't working"But Miliband was booed by the crowd when he said that any government in power at the moment would have to make some spending cuts."There will still be hard choices," he said. "I do not promise easy times."Brendan Barber, general secretary of the Trades Union Congress umbrella body, said the cuts were "hammering the poorest and the most vulnerable"."We have a stark and united message for the government," he was due to tell the Hyde Park rally."Austerity isn't working. It is hitting our jobs, our services, our living standards."His speech added: "Ministers told us that if we only accept the pain, recovery would come. Instead we have been mired in a double dip recession.” Dave Prentis, leader of Britain's biggest public sector trade union Unison, said government cuts were pushing hundreds of thousands of state employees out of work."We are here for the millions of people who don't have a voice," he said. "We just can't take any more."But Cameron, whose Conservative Party shares power with the centrist Liberal Democrats, insisted that that spending cuts were needed to balance Britain's budget."Today Ed Miliband is headlining a rally calling for an end to every single spending cut needed to clear the deficit," he said in a message posted on his Twitter account.London's Metropolitan Police did not provide an estimate for the number of demonstrators, but the TUC expected tens of thousands of people to join the 4.8km march.Scottish police said about 5 000 people took part in the Glasgow protest.

Obama, Romney gear up for final debate

US President Barack Obama and his Republican rival, Mitt Romney, on Saturday began preparing for their final debate, with Obama hunkering down at Camp David and Romney staying in Florida.The third and last of their debates is scheduled for Monday at Lynn University in Boca Raton, Florida.On Friday, Obama set an aggressive tone accusing Romney of suffering from policy "Romnesia", a barb dismissed by the Republican as pettiness 18 days before the election.One night earlier, both men had traded light-hearted banter at a charity dinner, but on Friday the verbal attacks turned nasty, with the Democratic incumbent taunting Romney's efforts to tack to the center as polling day looms."Mr.Severely Conservative wants you to think he was severely kidding about everything he said over the last year," Obama said at a rally attended by some 9,000 people at a university campus outside Washington.The Obama camp's previous bid to skewer Romney with insulting tags - such as pushing the Robin-Hood-in-reverse term "Romney Hood" to tarnish his tax policies - have done nothing to protect the president's shrinking poll lead.But, with the pair's last of three head-to-head debates set for Monday, the campaign returned to its tried and tested formula of branding Romney an untrustworthy flip-flopper."I mean, he's changing up so much and backtracking and sidestepping, we've got to name this condition that he's going through. I think it's called 'Romnesia.' That's what it's called," Obama told the crowd.The Republican nominee meanwhile campaigned in the biggest political battleground of all, Florida, where Monday's debate will be held, and he didn't hesitate to strike back at the president's comments."They've been reduced to petty attacks and silly word games," Romney told a crowd of more than 8,500 people at Daytona Beach, adding that Obama's re-election bid "has become the incredible shrinking campaign.""This is a big country, with big opportunities and great challenges, and they keep on talking about smaller and smaller things."Romney, accompanied by his running mate Paul Ryan, laid into the incumbent for failing to map out his plan for another four years should he win re-election."They have no agenda for the future, no agenda for America, no agenda for a second term."While Romney's camp dismissed Obama's taunt as a gimmick, the image of Romney as a flip-flopper, one that his fellow conservatives have hit him with in the past, might yet gain traction with undecided voters.ShamelessOne source that definitely does not back the multimillionaire private equity baron is The Salt Lake Tribune, the local paper in the home city of Romney's Mormon faith, albeit a liberal one that endorsed Obama in 2008.In an editorial, the paper lavished praise on Romney for saving the city's 2002 Winter Olympics, but said his subsequent courting of the right-wing Tea Party movement and refusal to detail his tax plan should rule him out."Romney has raised the most frequently asked question of the campaign: 'Who is this guy, really, and what in the world does he truly believe?'" it said."Politicians routinely tailor their words to suit an audience. Romney, though, is shameless, lavishing vastly diverse audiences with words, any words, they would trade their votes to hear."While Obama was addressing crowds in Virginia, a state he won narrowly in 2008 but where Romney is making up ground, his Vice President Joe Biden flew to Florida, where three of the race's four main figures were stumping for votes.Obama won both states in 2008, but as a measure of the tightness of this year's contest, the two are now up for grabs, with Florida leaning toward Romney, according to a widely-read poll average by website RealClearPolitics.There, Romney won an endorsement from the Orlando Sentinel, whose editorial reflected a widely-held disappointment in Obama's handling of the economy."We have little confidence that Obama would be more successful managing the economy and the budget in the next four years," wrote the editors, who endorsed Obama in 2008.On Monday night both men will be in the Sunshine State, in Boca Raton for a televised debate focused on foreign affairs.Going into the campaign, Obama was seen as strong on foreign policy, thanks to his withdrawal of US troops from Iraq and decision to order a mission that killed Aa-Qaeda kingpin Osama Bin Laden.But Romney's camp has hammered the president on his handling of the Middle East, accusing him of neglecting ally Israel and of underestimating the threat of extremist passions unleashed by the Arab Spring revolts.

Castro rumour mill continues to churn

The rumour mill surrounding the health of Fidel Castro churned anew on Friday despite a letter from the aging Cuban revolutionary published by state media and denials by relatives at home and in the United States that he is on death's door. Social media sites and some news organisations have reported allegations by a Venezuelan doctor that Castro, 86, suffered a massive stroke, was in a vegetative state and had only weeks to live, though the same doctor, Jose Rafael Marquina, has made some claims before that have not panned out.Marquina told the newspaper ABC in Spain that Castro had suffered a "massive embolism of the right cerebral artery" and while not on life support or breathing artificially, was "moribund" at a house in a gated former country club in western Havana.Marquina also said Venezuelan President Hugo Chavez had travelled suddenly to Havana to be with his friend and ally, an account that could not be immediately verified.Reached by The Associated Press, Marquina said his sources were in Venezuela, but he would not identify them or say how they were in a position to have information about Castro's health.He also indicated he had received corroborating evidence from sources on Twitter, but would not say who.In April, Marquina said that Chavez, who has been battling an undisclosed kind of cancer, was in his "last days" and would not last to November. With less than two weeks to go, the Venezuelan leader says he's beaten the illness and appears stronger in public.Castro's health is considered a matter of national security in Cuba and few details are released.Rumours that the former Cuban leader has died or is near death have circulated repeatedly for years, but they gained force after he failed to issue a public statement congratulating Chavez on his 7 October election victory.Castro has not been seen in public since March, when he received visiting Pope Benedict XVI. He has also stopped writing his once-constant opinion pieces, the last of which appeared in June.There was no immediate comment from the Cuban government on the latest claims, but a letter attributed to Castro was published Thursday by Cuban state media. In it, he congratulated graduates of a medical school on the occasion of its 50th anniversary.Two close family members of Castro have also recently denied he is in grave condition. Juanita Castro, the former leader's sister, told  in Miami that reports of her brother's condition are "pure rumors" and "absurd."Son Alex Castro told a reporter for a weekly Cuban newspaper that his father "is well, going about his daily life".