NEWS,04.04.2012.

French anti-terror raids: security and protection, or electioneering?

Nicolas Sarkozy's opponents query the 'spectacle' of the raids and their timing in the wake of Mohamed Merah's killing spreeOnce again, France woke to news of a string of dawn raids against suspected Islamists across the country, from the old industrial heartlands of the north to Marseille on the southern coast. Days earlier, rolling TV-news and breakfast bulletins broadcast dramatic images as elite anti-terrorist squads in black body armour smashed windows and bashed down doors shouting "Police!", emerging with hand-cuffed suspects with their faces covered, on residential streets from Nantes to Toulouse.Less than three weeks before the first round of the presidential election, France is gripped by one of its biggest crackdowns on suspected radical Islamists in recent memory. Amplified by TV coverage, it has been led by an unrelenting Nicolas Sarkozy, who is also battling for re-election. Opposition politicians now openly question whether the timing and TV crews are as much linked to electioneering as anti-terrorist crime prevention.France is still in a state of shock and confusion after Mohamed Merah, a 23-year-old unemployed panelbeater from Toulouse, went on a 10-day killing spree across south-west France, executing three paratroopers and shooting children and a rabbi at the gates of a Jewish school. Following a dramatic 32-hour siege at his flat, Merah died in a hail of police bullets as he leapt from the balcony. But questions remain over how Merah  who claimed inspiration from al-Qaida, was heavily armed, on police intelligence files and had been under surveillance  was not picked up earlier and his attacks prevented. Some commentators warn that the new anti-terrorist crackdown, which included the deportation of a handful of preachers, should not be used as a smokescreen to distract from potential failings in the Merah operation.The right-wing Sarkozy had long ago seen his election strategy compared to that of his friend George W Bush's 2004 fight for re-election in the US: styling himself as the only trustworthy protector of the nation in the face of serious threat. A month ago, the danger was impending financial meltdown. Now, it is closer to Bush's own target: Islamist fundamentalism and terrorism. Sarkozy last week likened the Toulouse killings to France's 9/11. The scale of the attacks maybe different, he said, but the national "traumatism" was the same.The justice system will have the last word on the arrests, which were not directly linked to Merah. Preliminary charges have been filed against 13 alleged members of a banned fundamentalist group. An intelligence chief suggested militants were planning a kidnapping. The 10 arrested on Wednesday were suspected of links to Islamist websites and of threatening violence in online forums.But in an election more than ever determined by TV coverage, Sarkozy's opponents queried the "spectacle" of the raids and their timing in the wake of the Toulouse killings. "I'm not questioning all that's being done. I'm simply saying that we should have perhaps done more before," said François Hollande, the Socialist candidate. The government insists the arrests had nothing to do with the elections, but with the security and protection of France.The "Toulouse effect" on the presidential race has so far been limited. Crucially, it allowed Sarkozy, during a week of national mourning, to regain presidential stature. Before Toulouse, he had been heckled so badly on the campaign trail in the Basque country that he took refuge in a bar. Now, over 70% of French people approve his stance at the time of the Toulouse killings. His poll ratings have lifted giving him a narrow lead in the first-round, but Hollande remains ahead in the final 6 May run-off.Yet the shootings have not changed French voters' chief topics of concern: crippling unemployment and the difficulty making ends meet. Crime and terrorism remain low on their list. Indeed, many French people feel disappointed that the presidential debate isn't addressing their everyday worries, and abstentionism could be high. But the extreme-right Front National's Marine Le Pen has used Toulouse to hammer home her rhetoric on fears about Islam,terrorism, immigration and what she warned were fundamentalists festering on France's notorious suburban high-rise estates (even if the raids were often carried out on smart semi-detached houses). To win the election, Sarkozy knows he must court Le Pen's voters. Politicians and religious leaders, have warned against stigmatising French Muslims a long held fear following Sarkozy's recent Front National-inspired election crusade against halal meat.

 

Anna Chapman never got anywhere near seducing a member of US cabinet

Anna Chapman, the famously sultry Russian operative who was arrested in the US with nine others for espionage in 2010, was apparently "close to seducing a sitting member of President Barack Obama's cabinet."The reports were based on an interview that Frank Figliuzzi, the FBI's assistant director of counterintelligence, gave to the BBC in which he called the confessed spy a "honeytrap", adding: "She got close enough to disturb us."The story went viral.There's only one problem with it, though: it's not true in the slightest."It's a completely bogus story,"a defense department spokesman told. "They made a giant leap."Figliuzzi never mentions Chapman, 30, by name in the BBC video. And while he did say that one of the 10 operatives had gotten "close enough to a sitting US cabinet member" to "disturb" the agency, he wasn't talking about Chapman. Nor was he talking about seduction. The New York Daily News picked up the story under the drooling headline: "Sexy Russian spygal Anna Chapman got too close to President Obama's inner circle, FBI official tells BBC."heir article, which ran Wednesday, is maddeningly confusing.In the fourth paragraph, the Daily News reports: A high-ranking FBI official says Anna Chapman was busted in 2010 spy ring because flame-haired sexpot got too close to sitting President Obama cabinet member.But the sixth paragraph directly contradicts this: Flame-haired sexpot Anna Chapman was quickly fingered as the tight-bodied temptress by the British press  but the needle slowly moved in the direction of dowdy New Jersey housewife Cynthia Murphy, who was also taken down in the spy sting.It's not until the twelfth paragraph that the paper admits: Figliuzzi refused to reveal the cabinet member  or the female spy.But the "honey trap" may have actually been G-man speak for cold, hard cash  and the access it can gain with powerful people.So why headline it otherwise?It was ABC News that actually bothered to pick up a phone to call the FBI. The network reports that the spy Figliuzzi was referring to is, in fact, Cynthia Murphy. And by "getting too close" to an Obama cabinet member, he meant as a financial advisor to a Hillary Clinton fundraiser.The FBI, for its part, released a statement denying that Chapman attempted to seduce a cabinet member. Mr Figliuzzi's comments to BBC were consistent with and confined to the information outlined in the criminal complaint that was filed nearly two years ago. There is no allegation or suggestion in the complaint that Anna Chapman or anyone else associated with this investigation attempted to seduce a US cabinet officialChapman, of course, is a red-headed beauty who has since modeled in lingerie for Maxim and hosted a TV programme in Russia. She was ratings and Internet gold when her story broke in 2010  a femme fatale in the flesh. So it's perhaps somewhat understandable that the Telegraph and the Daily News would leap at the opportunity to splash her come-hither photograph on its pages without actually bothering to fact check their stories.

NEWS,03.04.2012.

Crazy gas prices driving German consumers mad

A price board at a petrol station in Berlin, Germany on March 30. The price for "super" at 1.71 euro per liter is approximately $8.56 a gallon.  “Oh nein,” there is another traffic jam at my local gas station.Normally, German drivers only encounter severe congestion on their famed autobahns, where traffic flow is often hampered there by the large number of construction sites regularly installed by the German government to keep its state-of-the-art highways "in order."These days, though, it is not unusual for gas prices to change up to five times per day at German gas stations, a phenomenon which traffic experts refer to as the “yo-yo effect.” When prices are lowered, many inner-city gas stations in Germany see drivers pull up in hordes.Given costs of up to 1.70 Euro (and more) per liter of unleaded fuel  the equivalent of $8.56 per gallon – it should come as no surprise that Germany's drivers have become bargain hunters. (One gallon is equal to 3.78 liters).Critics say that the yo-yo phenomenon is fueled by the highly competitive market and dominance by leading suppliers in the German market, like Aral, Jet or Shell.Retailers and consumers, who see a lowering of prices during lower-demand times and a hike during rush hours or school holidays, are increasingly calling for prices to be directed by supply and demand."When the prices are high in the morning during rush hour and then suddenly drop when most people are at work, our customers often get upset and complain heavily," said Ferdinand Raker, who has been running an independent gas station in the town of Molbergen since 1998."On some days, we see a lowering or raising of the prices by up to 14 euro cents ($0.18) per liter," said Andreas Hoelzel from German automobile club ADAC in Munich. "We understand that there is a competitive market situation, but the extent of price fluctuation is just enormous."It is all about a plethora of petrol pumps in Germany, representatives from the industry argue."This shows that we have a functioning business competition in the German petroleum market, which in comparison to other European countries has an above-average volume of gas stations with its nearly 14,700 outlets nationwide," said Karin Retzlaff from the Association of the German Petroleum Industry, known as MWV.This argument, however, has neither satisfied the average driver nor officials from automobile clubs, who represent Germany's now grumpy motorists.Reports about illegal price fixing among multinationals could not be proven in recent investigations by Germany’s Federal Cartel Office, but experts and media reports are still accusing oil firms of implementing “methods of systematic confusion.“On Monday, weekly “Der Spiegel” news magazine headlined its cover “The Fuel Cartel – How Oil Firms Manipulate the Fuel Prices” and argued in its seven-page analysis that the leading gas companies are using their power in the market to deliberately inflate fuel prices.Frustration over high fuel costs has also set off a high level of fuel thefts across the country, officials say.According to police in Germany's most populous state, Northrhein-Westphalia, diesel thefts, for example, have increased over the course of the past year. (More than 40 percent of German cars are powered by diesel.) An internal survey, which listed all cases with diesel thefts above 100 liters, showed 111 cases in January and 83 in February in this local state alone.The statistics indicate that criminals are mainly targeting fuel depots, heavy construction machines and large trucks. In 2011, state police in Northrhein-Westphalia recorded 986 cases with a total of 344,000 liters (90,875 gallons) stolen.Thieves have become increasingly creative. Police have recorded incidents in which criminals have drilled holes into gas tanks of private cars or used stolen or fake licence plates so that they can remain unidentified at gas stations when they drive off without paying the bill."Last month, I lost 10,000 liters of fuel after thieves signed up for a special debit card with false identifications and then pulled up numerous times with different vehicles to steal my petrol," says Raker, the Molbergen gas station owner. “Police caught the culprit," he said, "but he was broke and I was left with the damage.”With anger on all sides, the mass-circulation BILD newspaper offered a sign of possible relief soon with the headline "Finally! A law against fuel rip-off.“ The article referred to a meeting of Germany's upper house of parliament last Friday, where politicians debated proposals for a new law, which could help calm down fluctuating gas prices.Politicians in Berlin suggested that oil firms should be required to warn of new fuel prices by 2 p.m. on the day before the change, and the altered prices would have to remain unchanged for at least 24 hours.Prices could also be stored in a central public database under a new law, which would give motorists the ability to check the cheapest pump prices in their vicinity with the help of the Internet or modern smart phones.Yet, a decision on a possible new law is not expected before the end of the summer (or, as some believe, might not come at all).And, despite the fact that there now appears to be light at the end of Germany's tunnels in regard to regulations that could stop the rollercoaster ride at the pump, the underlying price for crude oil on the world market is unlikely to fall dramatically any time soon.

NEWS,02.04.2012.

Attack On Iran Would Be 'Disastrous' For Middle East, Turkish Prime Minister Warns

Turkish Prime Minister Recep Tayyip Erdogan warned over the weekend that an Israeli strike on Iran would have "disastrous" consequences for the Middle East, likely sparking a regional war, Turkish newspapers reported on Sunday. Turkey is a major U.S. ally in the region and Erdogan indicated that he had expressed his concerns to President Barack Obama.Speaking to reporters on Saturday, Erdogan was quoted by the Turkish daily Hurriyet as warning against the "disastrous" outcome of a possible Israeli strike against Iran's nuclear facilities, saying: "The entire region would be devastated if Israel strikes Iran."Erdogan also criticized the international community for keeping mum on Israel's alleged nuclear weapons, while threatening Iran over what he said was a peaceful nuclear program."Israel has between 250 to 300 nuclear warheads. Nobody is discussing that," Erdogan said, adding: "Iran says they would not produce nuclear weapons. They are saying that they would produce a specific amount of enriched uranium rods and stop after that."Turkey is set to host a new round of diplomatic talks between Iran and a group of world powers -- the U.S., France, Britain, China, Russia, and Germany -- beginning on April 13.On Monday, Russia's foreign minister also strongly warned against a military attack on Iran, saying that a pre-emptive strike would violate international law. Sergey Lavrov said on a visit to Armenia that an attack on Iran would destabilize the region.Israel and the U.S. have warned that all options remain open, including military action, to prevent Iran from obtaining nuclear weapons.Iran insists its uranium enrichment program is aimed at civilian power generation and research, but Israel and Western nations believe it is a cover for a nuclear weapons bid.Russia, which built Iran's first nuclear power plant, backed some of the previous U.N. sanctions against Tehran, but in recent months has firmly rejected imposing new sanctions and called for dialogue.An end to a nearly decade-long nuclear standoff between Iran and major world powers will be possible if the United States and its European allies recognize Tehran's right to enrich uranium, a former Iranian negotiator said in an editorial. "Talks between Iran and the five permanent members of the U.N. Security Council plus Germany (P5+1), scheduled for next month, provide the best opportunity to break the nine-year deadlock over Iran's nuclear program," Hossein Mousavian, Iran's former chief nuclear negotiator, wrote in an editorial in the Boston Globe. Mousavian, now a visiting scholar at Princeton University in New Jersey, had been seen as a moderate when in the Iranian government. Although he is not currently a policymaker, such public presentations of Iranian thinking is rare. Iran says its nuclear program is peaceful and rejects U.S. and European allegations that it is secretly amassing the capability to produce atomic weapons. Iran has rejected Security Council demands that it halt enrichment and other sensitive nuclear work, saying it has a sovereign right to atomic energy. This has led to four rounds of increasingly stringent U.N. Security Council sanctions, mostly focusing on its nuclear and missile industries, but also targeting some financial institutions, a few subsidiaries of its major shipping firm, and companies linked to the Islamic Revolutionary Guard Corps. In recent months there has been increased speculation about possible Israeli air strikes on Iran's nuclear sites - which some analysts fear could spark a Middle East war. For the talks, expected to take place in mid-April, to open the door to a resolution of the standoff with Iran, Mousavian said the United States and its European allies must make clear that war and coercion are not the only options. They should seek enhanced engagement with Tehran, as U.S. President Barack Obama has repeatedly called for. "This could work - since 2003, Iran has been looking for a viable and durable solution to the diplomatic standoff," wrote Mousavian. Mousavian was Iran's chief nuclear negotiator from 2003 to 2005 before conservative President Mahmoud Ahmadinejad took over from his reformist predecessor Mohammad Khatami. According to Western envoys familiar with Mousavian, he appeared at the time to be genuinely interested in reaching a deal with the West. After he was removed from the nuclear negotiating team, Mousavian was arrested and briefly jailed in 2007 on accusations of espionage. He was acquitted of that charge, which could have carried the death penalty, but was found guilty of "propaganda against the system." Analysts and diplomats said the charges against Mousavian were really a reflection of an internal Iranian dispute over how to handle Iran's atomic dispute with the West. Some Iranians favor the moderate line adopted by Mousavian while others have backed Ahmadinejad's more confrontational approach. Mousavian writes that if a deal that is acceptable to both parties is to be reached, the two sides' "bottom lines" should be identified. "For Iran, this is the recognition of its legitimate right to create a nuclear program - including enrichment - and a backing off by the P5+1 from its zero-enrichment position." "For the P5+1, it is an absolute prohibition on Iran from creating a nuclear bomb, and having Iran clear up ambiguities in its nuclear program to the satisfaction of the International Atomic Energy Agency," Mousavian writes. The West also needs to abandon calls for regime change and accept that "crippling sanctions, covert actions, and military strikes might slow down Iran's nuclear program but will not stop it." "In fact, it is too late to demand that Iran suspend enrichment activities," Mousavian writes. "It mastered enrichment technology and reached break-out capability in 2002 and continues to steadily improve its uranium-enrichment capabilities." The so-called "break-out" capability refers to the ability of a country to construct a nuclear weapon. A U.S. think tank, the Institute for Science and International Security (ISIS), has said that capping Iranian uranium enrichment at 5 percent purity level compared with the 90 percent needed for a bomb could form part of an interim deal that would give time for more substantial negotiations. This and other priority measures would "limit Iran's capability to break out quickly," ISIS said in a report. Among the things the West should offer to Iran is a package that includes recognition of its nuclear rights, ending sanctions, and "normalization of Iran's nuclear file." In return, Iran should offer the IAEA full transparency and permit the most intrusive inspections possible.

NEWS,01.04.2012.

Presidential race heats up as Sarkozy hails manifesto

France’s election race will pick up pace next week after being thrown off course by an Islamist gunman, with Nicolas Sarkozy unveiling his manifesto and opponents set to tear it apart.Mohamed Merah’s killings of three soldiers, a rabbi and three Jewish children in the worst terrorist attacks in France since the 1990 prompted presidential candidates to suspend campaigning for several days from Mar 19 and the nation is only just emerging from a distressed daze. Merah, a 23-year-old Frenchman who said he had links to al Qaida, was buried near Toulouse yesterday.With only three weeks to go before the Apr 22 first-round vote, Sarkozy says he is ready to unveil a fully-fledged manifesto to compete with a weighty 60-point plan presented by Socialist frontrunner Francois Hollande in January. "You’ll have a global project, with financing, next week," Sarkozy said. The manifesto will provide bait to Hollande to come back on the offensive after 10 days of treading water, sidelined as Sarkozy took command over the shooting crisis. On launching his campaign last month, Sarkozy bet that his best chance of overcoming dismal popularity ratings and a strong desire for change was to announce his ideas one-by-one on TV and radio, or campaign speeches, for maximum impact. "As soon as you unveil an idea, it immediately sounds worn out," Sarkozy said, explaining his tactic. Having vowed to halve legal immigration, deport more illegal immigrants, tax fiscal exiles and hold policy referendums, Sarkozy said it was finally time for a full manifesto complete with financial incomings and outgoings. He is expected to launch one before he departs for a trip to the French Indian Ocean island of Reunion on Tuesday. Meanwhile, French police yesterday detained 19 people in a crackdown on suspected Islamist extremists in cities around the country.Sarkozy promised more raids to come, but gave no details about the reasons for the arrests or what the detainees were suspected of."It’s in connection with a form of Islamist radicalism," he said."There will be other operations that will continue and that will allow us to expel from our national territory a certain number of people who have no reason to be here."French Muslims have worried about a backlash after Merah’s attacks, and French leaders have urged the public not to equate Islam with terrorism.But concerns about radical Islam are high, and the government banned a string of international Muslim clerics from entering France for a conference of a fundamentalist Islamic group.

Spain’s €27bn budget cut aims to reassure

 Spain announced deep cuts to its central government budget yesterday as it battles to convince European partners and debt markets it can rein in its budget deficit in the face of growing complaints from the public.The government said it would make savings of €27bn for the rest of 2012 from the central government budget, equivalent to around 2.5% of GDP. The figure includes tax rises and spending cuts of around €15bn announced in December.The cuts come despite popular resistance  a general strike on Thursday disrupted transport, halted industry and saw some minor violence and against a grim economic backdrop; Spain is thought to have fallen back into recession in the first quarter and has the highest unemployment rate in the EU. "Everyone knows the difficult problem we face in this country, and it calls for special efforts in fiscal consolidation and structural reforms to grow and create employment," deputy prime minister Soraya Sáenz de Santamaria said after the weekly cabinet meeting. The centre-right government, which swept to power in November with the largest parliamentary majority in 30 years, has already passed labour market and banking sector reforms that it says can improve competitiveness and reduce wage costs. EU partners have agreed to let prime minister Mariano Rajoy aim for a total 2012 deficit at 5.3% of GDP, a less demanding goal than the 4.4% originally suggested but substantially less than last year’s 8.5%. The Spanish government said it was aiming for a central government deficit equivalent of 3.5% of GDP, a deficit of 1.5% of GDP coming from Spain’s regions and a balanced social security budget. Smaller local authorities expect a deficit equivalent to 0.3% of GDP. The regions announced a deficit of 2.9% of GDP in 2011, meaning that they would have to cut around €15bn to meet the 2012 target. Details were scarce, with the government due to set the budget before parliament on Tuesday, but some economists are concerned that deep austerity measures could hurt already weakened growth and further endanger the deficit targets. The government said it would slash spending by 16.9% across the ministries, with spending at the foreign ministry cut by more than half, and the industry, energy and tourism ministry taking a cut of more than 30%. Total cuts of over €42bn, between the central administrations and the regional authorities, could be tough for an economy struggling to grow, economists warn. "This is as austere as it gets. It’s a tightening of fiscal policy until the pips squeak. There can be no doubting the government’s willingness to curb Spain’s excessive budget deficits," said Nicholas Spiro at Spiro Sovereign Strategy. Rajoy can ill afford to upset nervous bondmarket investors, who on Thursday pushed the yield premium for Spanish 10-year debt close to their highest levels since early January. The premium investors demand to hold Spanish over German debt dipped slightly after the budget announcement to around 356 basis points, suggesting a cautious welcome for the plan intended to improve Madrid’s ability to service its debt. Investors fear, however, that the government may fail to deliver the budget cuts it is promising or will need to announce new measures before the end of the year which could hurt growth.

NEWS,31.03.2012.

US to press on with Iran sanctions

President Barack Obama vowed today to forge ahead with tough sanctions on Iran, saying there was enough oil in the world market - including emergency stockpiles - to allow countries to cut Iranian imports.In his decision, required by a sanctions law he signed in December, Obama said increased production by some countries as well as "the existence of strategic reserves" helped him come to the conclusion that sanctions can advance."I will closely monitor this situation to assure that the market can continue to accommodate a reduction in purchases of petroleum and petroleum products from Iran," he said in a statement.Obama had been expected to press on with the sanctions to pressure Iran to curb its nuclear program, which the West suspects is a cover to develop atomic weapons but which Iran says is purely civilian.The overt mention of government-controlled stockpiles may further stoke speculation that major consumer nations are preparing to tap their emergency stores this year."I do think it was interesting that it was laid out there," said David Pumphrey, an analyst at the Center for Strategic and International Studies."It was sort of like a reminder that yes, this is part of the tool kit," said Pumphrey, a former Energy Department official.Oil markets remain tight, the White House said. Surging gasoline prices have become a major issue in the presidential election campaign."A series of production disruptions in South Sudan, Syria, Yemen, Nigeria, and the North Sea have removed oil from the market," the White House said in a statement.France is in talks with the United States and Britain on a possible release of strategic oil stocks to push fuel prices lower, French ministers said on Wednesday.Senior Obama administration officials told reporters that the United States views releasing emergency stocks as an option, but said no decision has been made on specific actions.Oil prices briefly rallied by about 70 cents on the announcement, but later reversed gains to end almost flat as traders turned mindful of the possible use of reserves."There's been a shift from focus on a threat (by Iran) to close the Strait of Hormuz to whether or not reserves are going to be released," said Dominick Caglioti, a broker at Frontier Trading Co. in New York.Going forward, Obama is required by law to determine every six months whether the price and supply of non-Iranian oil are sufficient to allow consumers to "significantly" cut their purchases from Iran.The law allows Obama, after June 28, to sanction foreign banks that carry out oil-related transactions with Iran's central bank and effectively cut them off from the US financial system."Today, we put on notice all nations that continue to import petroleum or petroleum products from Iran that they have three months to significantly reduce those purchases or risk the imposition of severe sanctions on their financial institutions," said Senator Robert Menendez, co-author of the sanctions law.Obama can offer exemptions to countries that show they have "significantly" cut their purchases from Iran, and recently exempted Japan and 10 EU countries from the sanctions.A senior administration official told reporters that talks continue with China, India, South Korea and other importers."Each day I think really we see a number of positive indicators from a broad range of countries," the official said, citing an announcement by Turkey today that it would cut imports of oil from Iran by 10% as an example.Obama faces a delicate balancing act on Iran, leading up to November US general election. On the one hand, he must show voters he is being tough on the Islamic state.But with oil and gasoline prices surging in response to geopolitical risks, he must also avoid steps that would unduly rattle oil markets. That could threaten the global economy and hurt voters already angered by the rising cost of fuel.Obama also faces pressure from some lawmakers in Congress who want to make sanctions on Iran even tighter. The House of Representatives has already passed additional sanctions, and a bill is pending in the Senate.Senior administration officials briefing reporters declined comment on the proposed new sanctions."We welcome the president's determination and applaud the administration's faithful implementation of the Menendez-Kirk amendment," said a spokesman for Senator Mark Kirk, a Republican who has pushed for additional measures."To build on this momentum, we hope the Senate will consider amendments to the pending Iran sanctions bill that would continue to increase the economic pressure on the Iranian regime," Kirk's spokesman said.

Spain announces deep cuts amid public protest

Spain has announced deep cuts to its central government budget as it battles to convince European partners and debt markets it can rein in its budget deficit in the face of growing complaints from the public.The government said it would make savings of 27 billion euros for the rest of 2012 from the central government budget, equivalent to around 2.5% of gross domestic product. The figure includes tax rises and spending cuts of around 15 billion euros announced in December.The cuts come despite popular resistance - a general strike on Thursday disrupted transport, halted industry and saw some minor violence - and against a grim economic backdrop; Spain is thought to have fallen back into recession in the first quarter and has the highest unemployment rate in the European Union."Everyone knows the difficult problem we face in this country, and it calls for special efforts in fiscal consolidation and structural reforms to grow and create employment," Deputy Prime Minister Soraya Saenz de Santamaria said after the weekly cabinet meeting.The centre-right government, which swept to power in November with the largest parliamentary majority in 30 years, has already passed labour market and banking sector reforms that it says can improve competitiveness and reduce wage costs.EU partners have agreed to let Prime Minister Mariano Rajoy aim for a total 2012 deficit at 5.3% of gross domestic product, a less demanding goal than the 4.4% originally suggested but substantially less than last year's 8.5%.Speaking in Copenhagen after an EU ministerial meeting, Spanish Economy Minister Luis de Guindos said the measures would be implemented as soon as possible, adding that any suggestions that Madrid needed emergency international funds was "absurd".Spain is trying to assure its EU partners that it is in control of slashing its deficit and to avoid needing a bailout package like that of smaller neighbour Portugal."What comforts markets are domestic policies. If we don't do what is needed, then there will be no rescue fund that is big enough," de Guindos said. Finance ministers agreed on Friday to increase a financial firewall to 700 billion euros to ward off fears the euro zone debt crisis could spill over to Spain or Italy, much larger economies than those bailed out previously.The Spanish government said it was aiming for a central government deficit equivalent of 3.5% of GDP, a deficit of 1.5% of GDP coming from Spain's regions and a balanced social security budget. Smaller local authorities expect a deficit equivalent to 0.3% of GDP.The regions announced a deficit of 2.9% of GDP in 2011, meaning they would have to cut around 15 billion euros to meet the 2012 target.Details were scarce, with the government due to set the budget before parliament on Tuesday, but some economists are concerned that deep austerity measures could hurt already weakened growth and further endanger the deficit targets.The government said it would slash spending by 16.9% across the ministries, with spending at the Foreign Ministry cut by more than half, and the Industry, Energy and Tourism Ministry taking a cut of more than 30%.Total cuts of over 42 billion euros, between the central administrations and the regional authorities, could be tough for an economy struggling to grow, economists warn."This is as austere as it gets. It's a tightening of fiscal policy until the pips squeak. There can be no doubting the government's willingness to curb Spain's excessive budget deficits," said Nicholas Spiro at Spiro Sovereign Strategy.Rajoy can ill afford to upset nervous bond market investors, who pushed the yield premium for Spanish 10-year debt on Thursday close to their highest levels since early January.The premium investors demand to hold Spanish over German debt dipped slightly after the budget announcement to around 356 basis points, suggesting a cautious welcome for the plan intended to improve Madrid's ability to service its debt.Investors fear, however, that the government may fail to deliver the budget cuts it is promising or will need to announce new measures before the end of the year which could hurt growth."I suspect that the government could be forced to implement further austerity measures later this year, with lingering economic downturn set to place additional strains on an already perilous budget deficit reduction plan," said IHS Global Insight economist Raj Badiani. "The main risk is that the government's tax revenue projections for 2012 look too optimistic."

NEWS,30.03.2012.

Obama moving ahead with Iran sanctions

Washington - President Barack Obama is moving ahead with tough new sanctions aimed at squeezing Iran's oil exports after determining there is enough crude on world markets to take the step without harming U.S. allies. Obama's move allows the U.S. to go forward with sanctions on foreign banks that continue to purchase oil from Iran. The sanctions aim to further isolate Iran's central bank, which processes nearly all of the Islamic Republic's oil purchases, from the global economy. U.S. officials hope ratcheting up economic pressure will both push Iran to abandon its disputed nuclear program and convince Israel to give sanctions time to take hold before pursuing a military strike on Iran's nuclear facilities. The U.S. and allies believe that Iran is pursuing a nuclear bomb; Iran denies that. Under a sweeping defense bill Obama signed at the end of December, he had until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran. Obama announced his decision in a statement Friday after a source initially confirmed the news to The Associated Press. The president said he based his determination on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors. He said he would keep monitoring the global market closely to ensure it can handle a reduction of oil purchases from Iran. With oil prices already rising this year amid rising tensions over the nuclear dispute between Iran and the West, U.S. officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices. That is particularly important for Obama in an election year that has seen an increasing focus on gas prices. The congressionally mandated sanctions target foreign financial institutions that do business with Iran's central bank - barring them from operating in the U.S. to buy or sell Iranian oil. The penalties are to take effect at the end of June, around the same time Europe's embargo on Iranian oil kicks in. Countries can still avoid the sanctions if they take steps to significantly reduce their imports before then. Domestic and foreign policy concerns have complicated the administration's decision to pursue the oil sanctions. Many of the countries that buy oil from Iran are U.S. allies, including several European Union nations, Japan, South Korea and India. In order to provide flexibility to countries friendly to the U.S., the sanctions bill allows the U.S. to grant waivers to nations that significantly reduce their purchases of Iranian oil. Even before Friday's decision, the State Department announced that it would grant waivers to 10 European Union countries and Japan because of steps they have already taken to cut back on Iranian oil. An E.U. oil embargo, approved in January, is set to take effect in July. Sen. Bob Menendez, a Democrat, who co-authored the sanctions legislation with Republican Sen. Mark Kirk, said he welcomed Obama's support in targeting Iran's Central Bank. Menendez's office says he was also notified of the decision earlier Friday “Today, we put on notice all nations that continue to import petroleum or petroleum products from Iran that they have three months to significantly reduce those purchases or risk the imposition of severe sanctions on their financial institutions,” Menendez said in a statement. He predicted most countries would cut their purchase of oil from Iran, either out of fear of sanctions or a shared fear over the Iran's pursuit of nuclear weaponry. The United States has not said what constitutes a significant reduction in Iranian oil purchases, and analysts believe the administration could use different metrics for different countries. Administration officials say a February report from the Energy Information Administration shows there is excess oil supply on the global market. But the report also showed that prices are high

Suspected Islamists rounded up ahead of French poll

French police arrested 19 people in a crackdown on suspected Islamist networks Friday as President Nicolas Sarkozy made the battle against extremism the keynote of his re-election campaign. Arrests took place in several cities, including Toulouse, where extremist gunman Mohamed Merah was shot dead by police last week after a series of cold-blooded shootings that left seven dead, including three Jewish children. Sarkozy said the arrests targeted “radical Islam” and that the trauma in France after the shootings in Toulouse and nearby Montauban was like that felt in the United States after the September 11, 2001 attacks. Agents from the DCRI domestic intelligence agency and elite police carried out the dawn raids in Toulouse in the southwest, as well as the Paris region, Nantes in the west, Lyon in the southeast and the Provence region. Among those arrested in the Nantes region was Mohammed Achamlane, the head of a suspected extremist group called Forsane Alizza, sources said. Three Kalashnikovs, a Glock pistol and a grenade were seized from his home. Three of the 19 suspects arrested were women, police said. Judicial sources said 17 of those arrested were being held for questioning. In France, suspects in terror-related cases can be held for up to four days without charge. A senior police source told AFP authorities had up to 100 suspected radicals in their sights and Sarkozy said Friday's operation was only a start. “There will be other operations that will continue and will also allow us to expel from our national territory a certain number of people,” said Sarkozy, in the thick of campaigning for an April-May presidential election. “What must be understood is that the trauma of Montauban and Toulouse is profound for our country, a little - I don't want to compare the horrors - a little like the trauma that followed in the United States and in New York after the September 11, 2001 attacks,” he told Europe 1 radio. After trailing Socialist candidate Francois Hollande for months in the polls, Sarkozy has jumped ahead in first-round voter intentions and seen his support rise in the wake of the attacks. Generally seen as stronger on security than Hollande, Sarkozy is keen to make law and order a key issue in a campaign that has so far been dominated by the economy, jobs and spending power, where the Socialist is stronger. The latest poll by CSA released Wednesday said 30 percent of voters would pick Sarkozy and 26 percent would go for Hollande in the April 22 first round. But all polls still predict Hollande winning the May 6 second round. Some of Sarkozy's opponents branded the arrests a public relations stunt, with Steeve Briois, the general secretary of the far-right National Front, calling the raids “an electoral manoeuvre”. “The 'big haul' made overnight by the DCRI and the RAID Ä the elite police unit that shot Merah Ä doesn't fool anyone,” he said in a statement. “Waiting for the horror of the Toulouse killings to start taking action shows the cynicism and opportunism of Nicolas Sarkozy.” But Interior Minister Claude Gueant said: “These are people who on the web... claimed support for a radical extremist ideology, for an ideology of combat.” The arrests came a day after the body of Merah, who was shot dead by a RAID sniper on March 22 at the end of a 32-hour siege at his flat in Toulouse, was buried in the city under heavy police guard.

The 23-year-old had shot dead three soldiers, and three children and a teacher at a Jewish school, in a killing spree this month that shocked the country. On Thursday, France banned four Muslim preachers from entering the country for a conference of the Union of Islamic Organisations in France (UOIF), citing their “calls for hatred and violence”. The ban applies to Saudi clerics Ayed Bin Abdallah al-Qarni and Abdallah Basfar, Egyptian cleric Safwat al-Hijazi and a former mufti of Jerusalem, Akrama Sabri, who had been due in Paris next month. National Front presidential candidate Marine Le Pen on Friday called for the conference to be cancelled and the UOIF to be disbanded. A French court meanwhile has sentenced a 20-year-old man, Mohamed Redha Ghezali, from the same neighbourhood as Merah to three months in prison for praising his crimes, prosecutors in Toulouse said. Ghezali was convicted Thursday of “provoking racial hatred” and “apology for terrorism” and Toulouse prosecutor Michel Valet said the state would “systematically pursue” anyone expressing support for Merah. The Depeche du Midi reported that the man, while haranguing a group of police officers, had said: “My mate Mohamed, that's a real man. It's too bad he didn't have time to finish the job.”

NEWS,29.03.2012.

Spaniards strike against 'unstoppable' job reforms

Spanish workers have staged a general strike to protest against labour reforms which the government declared "unstoppable" but many ignored the action, fearing for their jobs in a country with the EU's highest unemployment rate.Factories across the nation were silent and ports closed, while television and transport were disrupted by the strike against the austerity policies of Prime Minister Mariano Rajoy - whom Spaniards elected by a landslide only four months ago.Police arrested a number of protesters in Madrid while small-scale violence flared in Barcelona, Spain's second city. Tourists were locked out of the Alhambra, a 14th-century Moorish palace in the southern city of Granada which is one of Europe's great cultural monuments.Strikers promised a wave of protests to confront Rajoy's conservative government over reforms making it cheaper for companies to fire staff and dismantling a nationwide system of collective pay bargaining."We don't have much hope, but this is just the beginning," said Trini Cuesta, a 58-year-old employee at a public hospital in Barcelona. "It's not just about labour reform, we're against policies that are provoking social and economic ruin. Social protests must rise."Spain is tipping into its second recession since the end of 2009 and some observers expect at least another million people to join already swollen unemployment lines. The jobless rate is already 23% and almost half of under 25-year-olds are out of work.Rajoy's government said it was committed to making labour reforms which it argues will help to reduce unemployment by making the labour market more efficient. "The agenda for reform is unstoppable," Labour Minister Fatima Banez said.Police presence was particularly heavy around parliament where politicians were putting in a longer work day than usual as Rajoy sought approval for five different measures, including funding for indebted local governments to pay suppliers.Spaniards have so far been tolerant of Rajoy's efforts to reform the labour market and meet strict European Union-imposed deficit goals to ensure it avoids a Greek-style debt crisis.But the general strike, the first since September 2010, showed that patience may be wearing thin. The largest union put support for the strike at 77% while the government said the work day was proceeding normally but gave no overall tally.Spain's blue chip index fell 0.87%, its eighth consecutive session of declines as concerns over the country's finances returned.There were pockets of violence in Barcelona, where protesters set garbage bins on fire and threw chairs from the famed outdoor cafes of Spain's second largest city onto the street, but no injuries were reported.Union members waving red flags gathered in major cities where they plastered stickers on shop windows reading "Closed for Strike", though many remained open for business.Police barricaded parliament and arrested 58 people in Madrid, many of whom were trying to stop people going to work.Many workers crossed the picket lines, saying they feared losing their jobs or unwilling to lose the average of around 100 euros which will be docked from the pay cheques of the strikers.While many Spaniards are fighting to preserve protection for their jobs, others are on short-term contracts of typically six months with little protection.These workers fear their employers could punish strikers by failing to renew their contracts when they expire, and give the job instead to one of the army of unemployed.Fewer than a fifth of Spanish employees are currently affiliated with the country's two biggest unions and many feel they don't represent the wider workforce."A lot of people actually blame the unions in part for the rigidity in the labour market and lack of competitiveness, so they aren't exactly in the position to rally a lot of people and the support for the strike reflects that," said David Bach, political analyst at IE business school in Madrid.

 However, union members are ready for a long fight. "This is the largest cut of (workers') rights since anyone can remember. There has to be a better way to get out of this crisis," UGT union employee Marta Lois, 40, said on Madrid's main street Gran Via, where protesters blocked traffic."Don't forget this is just the first major event of what is likely going to be a long year of demonstrations against government policies," Antonio Barroso, political analyst with Eurasia Group said.Rajoy said on Tuesday his administration would pass a "very, very, austere budget" on Friday. His goal of cutting the deficit this year to 5.3% of gross domestic product implies nominal cuts of at least 35 billion euros ($57 billion).The cuts are meant to keep borrowing costs down as well as working towards meeting the EU's 3% deficit limit next year, but some economists say they will deepen the looming recession.The strike halted overnight production at factories from Barcelona in the north to Cadiz in the south, with unions reporting full stoppages at General Motors Espana, Renault, ArcelorMittal and Acerinox.Transport employees provided a basic level of service, meaning one in four buses and about a third of metro and local trains were expected to run. Most domestic and European flights were grounded although long-haul services continued."We're offering the government a chance to start a different path (of reform) in search of wider consensus," Ignacio Fernandez Toxo, head of Spain's largest union Comisiones Obreras said. "If not there will be rising social conflict."Despite the promises to push on with reforms aimed at winning approval from Brussels, Rajoy's People's Party suffered a surprise setback in a regional election on Sunday, meaning he must measure his steps to avoid provoking wider discontent.A high turnout is expected at an evening march in Madrid that will end at the central Puerta del Sol square, cradle of last year's anti-austerity "Indignant" movement.National grid operator REE estimated electricity demand - a key indicator of economic activity - for Thursday as a whole would drop by 14.8% from Wednesday to 571 gigawatt-hours, a level comparable to a public holiday or a weekend.During the last general strike in September 2010, demand fell by 12.6% from the day before.