NEWS,05.10.2012

Venezuela's Chavez faces cliffhanger election

Venezuelan President Hugo Chavez faces the toughest election of his 14-year rule on Sunday in a vote pitting his charisma and oil-financed largesse against fresh-faced challenger Henrique Capriles' promise of jobs, safer streets and an end to cronyism.Chavez, 58, staged a remarkable comeback from cancer this year and wants a new six-year term to consolidate his self-styled socialist revolution in the OPEC nation.Capriles, a boyish 40-year-old state governor, has run a marathon eight-month campaign of house-by-house visits that have galvanised the historically fractured opposition and set up its best shot at the presidency since Chavez's election in 1998.Defeat for Chavez would defenestrate Latin America's leader of anti-US sentiment while potentially boosting oil companies' access to the world's largest crude reserves.Victory would allow Chavez to continue a wave of nationalisations and consolidate control over the economy, though a recurrence of his cancer would weaken his leadership and possibly give the opposition another chance.In torrential rain, red-shirted supporters of the president filled much of downtown Caracas on Thursday for his final rally."Chavez will not fail the Venezuelan people," the president said, soaked to the skin in a dark raincoat, on a stage before a sea of fans. "You know that my loyalty to the people almost brought me to the point of death. This is my path."The former military officer, who survived a short-lived coup in 2002, has developed a near cult-like following by casting himself as a messianic reincarnation of 19th century liberation hero Simon Bolivar while pushing billions of dollars in oil revenue into social programmes.Most best-known pollsters put Chavez in front. But two have Capriles just ahead, and his numbers have edged up in others.The opposition leader has had more momentum in the final days of the campaign and he is confidently predicting victory."The time has come to leave the past behind," the opposition leader told a cheering crowd on Thursday, wrapping up a grueling months-long series of rallies across the country.The vote is also a cliffhanger for other left-wing governments in the region, from Cuba to Ecuador, who depend on Chavez's discounted oil sales and generous financial assistance.Emotional ties Seamlessly flipping from jocular prankster to blustering anti-capitalist crusader, Chavez's stories of his poor but happy childhood in a small village have helped him create an emotional bond with poor Venezuelans who see him as one of the family.For nearly a decade, he has won over voters with free health clinics, subsidized groceries and new universities.Over the last year he launched programs to give pensions to the elderly, stipends to poor mothers, and tens of thousands of new homes were handed over on live TV to tearful supporters.Everywhere Chavez has gone on the campaign trail, supplicants have shouted to him asking for help getting a home or a job, or thrust hand-written letters at his staff."I work for the state and I'm offended that the loser (Capriles) says we're made to attend and made to wear red!" said Paulo Garralaga, at Thursday's giant rally in Caracas. "I came to support Chavez and to tell him I'm going to vote for him."Yet day-to-day issues are overshadowing ideological fervor.Nationalisations have weakened private enterprise and given party apparatchiks growing control over jobs. Weak law enforcement, dysfunctional courts and plentiful arms have made Venezuela more violent than some war-zones. Frequent blackouts are an annoying reminder of squandered oil income."Each one of you should make a list of the problems that you have, and ask yourself, how many of those problems has this famous revolution solved for you?" the wiry and sports-loving Capriles intoned at one of his final rallies.The business-friendly law graduate easily won an opposition primary election in February and has united anti-Chavez parties like no one before him. His rallies have been notably more energetic and swollen with ecstatic fans in the final weeks.Sporadic violence has dogged the campaign, with three Capriles activists shot dead last weekend, demonstrating the volatile atmosphere and potential for violence around the vote.Capriles has promised to shed Chavez's doctrinaire vision of a state-led economy for a pragmatic balance between social welfare and free enterprise. He calls himself an admirer of Brazil's market-friendly left, which has pulled close to 35 million people into the middle class over a decade.Chavez has made ample use of state resources to bolster his campaign, speaking for hours about the virtues of socialism in "chain" broadcasts that all public access channels are required to run. The electoral authority has demurely declined to regulate such broadcasts, calling them "institutional" messages.Despite complaints of Chavez's advantages, opposition leaders say they see little risk of fraud during the electronic balloting itself. There will be no formal international observation of the vote, though local groups will be present and voting centers will have witnesses from both sides.Chavez's frequent vote victories over the last 14 years have undermined shrill opposition criticism that he is a dictator.But he has never had to hand over power. Though he accepted defeat in a 2007 referendum on his proposed overhaul of the constitution, in less than a year he used special decree powers to make many of the changes that voters had rejected.A win for Chavez could prompt a sell-off of Venezuelan bonds, which have risen steadily since June and jumped in recent weeks as investors bet on a possible Capriles win.Venezuela's heavy borrowing has made its debt among the most actively traded emerging market bonds - creating an odd romance between Wall Street and one of the world's most virulent critics of capital markets.Capriles is promising to improve the country's finances by cutting wasteful expenditures and halting politically motivated gifts to allied left-wing and anti-American nations."President Chavez, I thank you for what you have been able to do," the opposition leader said at his final campaign rally, in Lara state, in a rare direct use of his opponent's name."With the greatest respect: the time has come to move forward, and you will not be able to stop the people's advance."

Washington Doesn't Like Democratic Elections in Venezuela, Because of the Result

On May 30, Dan Rather, one of America's most well-known journalists, announced that Venezuelan President Hugo Chávez would die "in a couple of months at most." Four months later, Chávez is not only alive and campaigning but widely expected to win re-election on Sunday. Such is the state of misrepresentation of Venezuela it is probably the most lied-about country in the world  that a journalist can say almost anything about Chávez or his government and it is unlikely to be challenged, so long as it is negative. Even worse, Rather referred to Chávez as "the dictator"a term that few, if any, political scientists familiar with the country would countenance.Here is what Jimmy Carter said about Venezuela's "dictatorship" a few weeks ago: "As a matter of fact, of the 92 elections that we've monitored, I would say that the election process in Venezuela is the best in the world."Carter won a Nobel Prize for his work through the election-monitoring Carter Center, which has observed and certified past Venezuelan elections. But because Washington has sought for more than a decade to de-legitimize Venezuela's government, his viewpoint is only rarely reported. His latest comments went unreported in almost all of the U.S. media.In Venezuela, voters touch a computer screen to cast their vote and then receive a paper receipt, which they then verify and deposit in a ballot box. Most of the paper ballots are compared with the electronic tally. This system makes vote-rigging nearly impossible: to steal the vote would require hacking the computers and then stuffing the ballot boxes to match the rigged vote.Unlike in the United States, where in a close vote we really have no idea who won (see Bush v. Gore, 2000), Venezuelans can be sure that their vote counts. And also unlike the U.S., where as many as 90 million eligible voters will not vote in November, the government in Venezuela has done everything to increase voter registration (now at a record of about 97 percent) and participation.Yet the U.S. foreign policy establishment (which includes most of the American and Western media) seethes with contempt for Venezuela's democratic process. In a report timed for the elections, the so-called "Committee to Protect Journalists" says that the government controls a "media empire," neglecting to inform its readers that Venezuelan state TV has only about 5-8 percent of the country's television audience. Of course, Chávez can interrupt normal programming with his speeches (under a law that pre-dates his administration), and regularly does so. But the opposition still has most of the media, including radio and print media -- not to mention most of the wealth and income of the country. The opposition will most likely lose this election not because of the government's advantages of incumbency  which are abused throughout the hemisphere, including the United States. If they lose, it will be because the majority of Venezuelans have dramatically improved their living standards under the Chávez government. Since 2004, when the government gained control over the oil industry and the economy had recovered from the devastating, extra-legal attempts to overthrow it (including the 2002 U.S.-backed military coup and oil strike of 2002-2003), poverty has been cut in half and extreme poverty by 70 percent. And this measures only cash income. Millions have access to health care for the first time, and college enrollment has doubled, with free tuition for many students. Inequality has also been considerably reduced. By contrast, the two decades that preceded Chávez were one of the worst economic failures in Latin America, with real income per person actually falling by 14 percent from 1980-1998.In Washington, democracy has a simple definition: does a government do what the State Department wants them to do? And of course here, the idea of politicians actually delivering on what they promised to voters is also an unfamiliar concept. So it is not just Venezuela that regularly comes under fire from the Washington establishment: all of the left and newly independent governments of South America, including Argentina, Ecuador, and Bolivia are in the cross-hairs (although Brazil is considered too big to get the same treatment except from the right). But the State Department tries to keep its eyes on the prize: Venezuela is sitting on 500 billion barrels of oil, and doesn't respect Washington's foreign policy. That is what makes it public enemy number one, and gets it the worst media coverage.But Venezuela is part of a "Latin American Spring" that has produced the most democratic, progressive, and independent group of governments that the region has ever had. They work together, and Venezuela has solid support among its neighbors. This is Lula da Silva last month: "A victory for Chávez (in the upcoming election) is not just a victory for the people of Venezuela but also a victory for all the people of Latin America . . . this victory will strike another blow against imperialism." South America's support is Venezuela's best guarantee against continuing attempts by Washington - which is still spending millions of dollars within the country in addition to unknown covert funds to undermine, de-legitimize, and destabilize democracy in Venezuela.

The Lifeline for Damascus and Tehran Is in Putin's Hands

The collapse of the Iranian currency by one-third of its value over a week will leave an impact on Iran's nuclear and strategic ambitions - especially through the gateway of Syria. Russia may thus find itself in need of salvaging its Iranian ally for numerous reasons, among them, its need for Iran in its battle against the United States in its Muslim neighborhood, in the wake of the American withdrawal from Afghanistan. There are three schools of thought on where things are going in the relationship between the United States and Iran, and what it entails in terms of indications and repercussions in the Middle East and for Russia.The first states that President Barack Obama - who is likely to win a second term  will not bomb Iran no matter what and that the Islamic Republic of Iran will therefore obtain military nuclear capability, and perform a nuclear test within a year or two.The second states that there is no escaping a military confrontation between the United States and Iran, which would start with an Israeli strike against Iranian nuclear sites, followed by Iranian retaliation against economic locations in Arab countries in the Gulf region. Finally, the third states that sanctions are leading Iran to collapse from within, and that the deterioration in the value of the currency and the economy at large will lead to reducing Tehran's ability to fund the regime in Damascus and Hezbollah in Lebanon. At the end of the day, it is purported, Russia will not be able to bankroll Iran and save it at the economic and nuclear levels.Each of those schools of thought advances detailed and noteworthy scenarios. What they have in common is that the Russian-Chinese-Iranian alliance with the regime in Damascus will not be able to maintain President Bashar Al-Assad in power, no matter how long it takes. In addition, prolonging the conflict in Syria will lead to a war of attrition, in a civil war that could lead to dividing Syria in a manner similar to what took place in the former Yugoslavia. Yet opinion is divided over this scenario, with some considering it possible, while others believe otherwise. Another common denominator is the assessment of both US President Barack Obama and Russian President Vladimir Putin, as both lacking in strategic visions and thinking into long-term interests. Obama is, in the view of some, arrogant and stubborn, as well as an isolationist who lacks the courage to take the initiative and prefers to hide behind the American aversion to further interventions, instead of being a leader who knows where the interest of the United States lies in these times of transitions and new strategic equations. As for Putin, he is, again in the opinion of some, aman of posturing and excessive Russian nationalism, who values himself highly and considers himself to be the leader of a superpower - while Russia remains at the level below. He adopts revenge as a policy in the face of offense, and does not care for the price paid by innocent civilians in return. Vladimir Putin exploited the North Atlantic Alliance (NATO) in Afghanistan, then rebelled against it in Libya and is now taking revenge against it over the dead bodies of innocent Syrians. Former US President George W. Bush did favors to both Russia and China in Afghanistan, in his war against terrorism and Islamic extremism. The aim was to eradicate Islamic extremism in Afghanistan before it spreads and reaches the five Muslim republics that surround Russia and come near to China, without Moscow and Beijing participating in covering the exorbitant cost. Barack Obama made the mistake of not satisfying Putin in a so-called "Grand Bargain", including by not granting Russia the port of Tartus. Yet what he is preparing to do in Afghanistan may well unintentionally represent a lethal blow for Vladimir Putin. The withdrawal of the United States within the framework of NATO's withdrawal from Afghanistan may well represent the tipping point for Russia to slip into a war against Islamic extremism on its home soil and in its immediate neighborhood in the five Muslim republics. Vladimir Putin will find himself alone in such a confrontation, of which he has sowed the seeds himself in Syria, when he could have done the opposite if he had not made use of his veto for a third time, committing a major strategic blunder in the process.Vladimir Putin may well be forced to wage his own war on terror as George W. Bush had done in the past - and in fact probably believes himself to be doing just that in Syria. Bush summoned Al-Qaeda and groups like it to Iraq and waged the war there in order to keep terrorism away from American cities, as he said. Similarly, Putin contributed to the arrival of jihadists to Syria through the series of vetoes he made use of at the Security Council, in revenge for what NATO did in Libya. He thus encouraged the rise of extremism in Syria, while demonstrations had at the beginning been secular and only demanded reform in Syria. Bush entered into a war with his troops in Iraq. Putin is gathering a budget of around 70 billion dollars to confront the Muslim extremism arriving at his gates. Bush offered Iraq to Iran and played the Shiite-Sunni card based on the fact that the 9/11 terrorist attacks had been the work of Sunnis. Putin is allying himself with Iran on the same confessional basis, but also for reasons connected to his hatred of the United States on the one hand, and of the Arabs on the other. He respects Iran's arrogance and despises the weakness and fragmentation of the Arabs. He also finds a common denominator between himself and Tehran's mullahs in their absolute hatred of the United States and their need to confront it - yet only through proxy wars. This kind of thinking reveals Vladimir Putin's ignorance of both the Arabs and Iran, and it will lead him to take Russia down a slippery slope to collapse, if he does not correct his course quickly before it is too late. What he is doing in Syria is investing against himself in the Muslim republics and in Chechnya. And if he is to correct his course, Syria is the place to start, as it would improve his relations with the leaderships of the Arab Maghreb and would lead him to partner with them, with the Gulf countries and with the United States to eradicate the Jihadist extremism that is spreading in the Arab Maghreb. The interviews conducted by Al-Hayat last week with Libyan President Mohamed El-Magariaf and Tunisian President Moncef Marzouki, show the extent to which this trend has proliferated. There is no use for Russia to be alone in the forefront, and this is what will happen after the withdrawal of the United States from Afghanistan, the stronghold of jihadists, as well as the base from which this new jihadist action will be launched against Russia as a result of the stances taken by Vladimir Putin and of his short-sightedness. He will come to regret it. So will China, if it continues to follow the direction into which Putin is taking it. Indeed, it in turn is exposed to this, particularly in Turkestan (Xinjiang), and will suffer after the Western withdrawal from Afghanistan, which will become the center of Russia and China's entanglement with Jihadistextremism. China in turn will foster enmity with the Arabs because of Syria, and will not benefit from allying itself with the losers in Damascus or perhaps in Tehran. Iran will not be among the losers according to the first scenario, adopted by the school that states that it will obtain nuclear capabilities after performing a military nuclear test some say will take place within a year or two. After the test, it will be too late. Then, an arms race will begin in the Gulf region, and there are indications that serious precautionary preparations are being made by some Gulf countries capable of obtaining nuclear capabilities. Then, it will be too late for the United States and for Israel, as they will not be able to rein in Iran or the nuclear arms race in the Arab region. Yet this will not mean salvation for the regime in Damascus, because Iran moving to the level of a nuclear power will make it, in the opinion of some, more cautious and careful not to get implicated in confrontations. Indeed, it will not make use of nuclear weapons even if it obtains them - it will behave like a nuclear power and will avoid proxy wars because it will have no need for them. Thus, according to those who are of this opinion, Tehran will adopt of policy of neglecting the regime in Syria as well as Hezbollah in Lebanon, because it will stabilize and position itself at the nuclear level, and rein itself in at the regional level.As for Israel, what is referred to as the "weakness" of its Prime Minister, Benjamin Netanyahu, will lead Iran to move forward at the nuclear level, according to an opinion held by some, especially as the US President will not let himself be dragged into bombing Iran on behalf of Israel. The second scenario is based on the assumption that Israel will direct a military strike against Iranian sites that would implicate the United States and force Obama to intervene militarily, if Iran were to respond to Israel at the military level. Yet there is information indicating that Iran will not take revenge on Israel directly or on American troops in the region, but will rather respond by striking against vital economic locations in Arab countries in the Gulf. Then too, some deem it likely that the United States will not be able to stand idly by and will be forced to strike against Iran, because directing military strikes against such vital economic locations would represent a blow to interests essential to the United States. Thus, according to this scenario, a war between the United States and Iran will take place either way.It is unlikely for Iran's leadership to remain completely silent in the face of an Israeli strike, because this would represent a national offense and would be perceived as weakness at the domestic level. If it does remain silent, this could be because it would have come very close or even become ready to perform a nuclear test. Matters developing in the direction of a war between the United States and Iran will lead to a quicker collapse of the regime in Damascus. Hezbollah could get implicated by using the Lebanese scene as an arena for Iran's revenge on Israel, and thus in turn quickly collapse. Or it could disassociate itself from the issue and choose to reform its ways.The third scenario is based on economic collapse within Iran, which would start with the sharp devaluation of its currency and would go through an economic crisis that would turn the Iranian interior against the leadership in Tehran. Such decay will lead to Tehran being forced to seriously lower the support it is extending to its ally in Damascus, which in turn has entered the cycle of economic erosion and decay. It will also lead to reducing Iranian funding of Hezbollah in Lebanon as well. Indeed, the three of them are subject to economic sanctions that will become increasingly stifling, even if they have tremendous reserves of weapons. No matter how arrogantly they behave, these sanctions will weaken and besiege them. Their lifeline to salvation rests in Putin's hands alone, but he in turn is besieged, after having allowed himself to commit strategic mistakes he may well sorely regret.

NEWS,04.10.2012

Spain central bank undercuts budget as rescue looms

Spain's central bank chief undercut the government's proposed 2013 budget today, saying it was based on over-rosy forecasts for economic growth and tax revenue.Speaking to a parliamentary budget committee, newly-appointed Central Bank Governor Luis Maria Linde delivered a blunt message as Prime Minister Mariano Rajoy weighs when to seek an international bailout."This outlook ... is certainly optimistic in comparison with the outlook shared by the majority of international organisations and analysts," he said.Linde said the government, which has already hiked taxes and cut tens of billions of euros in costs, should consider further steps this year to meet next year's deficit target of 4.5% of gross domestic product agreed with the European Union.Expectations that Rajoy will request a euro zone rescue package before the end of the year lowered Spain's borrowing costs at a Treasury auction on Thursday of 4 billion euros in government bonds.The yield on bonds due in 2014 dropped significantly to 3.282% from 5.204% when it was last sold in July.But market pressure could return if Rajoy drags his feet on seeking a bailout or is held back by German reluctance to put more assistance for Spain to its parliament.The European Central Bank has pledged to support Spain by buying its short-term debt on the open market, but only once Madrid signs up to the conditions attached to European aid."Markets are giving Spain the benefit of the doubt in anticipation of a rescue. Foreign investors need to see some sort of conditional backstop in place before seriously thinking about buying Spanish debt again," said Sassan Ghahramani, head of New York-based hedge fund consultancy SGH Macro.The euro zone is considering aiding Spain by providing insurance for investors who buy government bonds in a move designed to maintain Spanish access to capital markets, shaping a rescue differently than the previous full bailouts of Greece, Ireland and Portugal.The bond gaurantee scheme, which is under consideration and has not been decided yet, would achieve two important aims. Spain would be rescued without draining Europe's entire bailout fund and there would be no contagion to Italy.ECB head Mario Draghi praised Spain's fiscal consolidation and economic reforms but reiterated that countries would have to make a formal application and sign up to strict conditions to benefit from the bank's bond-buying programme.Central banker warns A rescue looks increasingly on the cards, as a prolonged recession complicates efforts to cut government spending.Tens of thousands of protesters gathered near parliament in Madrid on three nights last week, demonstrating against the austerity measures and demanding changes in government.Anger over costly rescue plans for banks has increased with one in four workers jobless. The shrinking economy has eaten into tax revenue and also pushed up unemployment benefit costs.Much of the savings from aggressive cost-cutting have gone to servicing debt due to high borrowing costs.Linde said most independent forecasters expect a 1.5% economic contraction in Spain next year, rather than the 0.5% fall on which the government based its calculations.Rajoy sent a tough budget to parliament on Saturday with 13 billion euros in savings from spending cuts and tax increases.The budget included a 1% increase in state pensions next year but Rajoy has not yet said whether he will maintain an inflation-pegged rise in pension payments as well.Linde said an inflation adjustment to pensions would be so costly as to endanger budget execution.The government is also taking on additional debt - some of it from European rescue funds - to bail out troubled banks and cash-strapped regional governments.The central bank chief also urged ministers to make a prudent forecast for revenue next year, saying the tax-take outlook in the 2013 budget was subject to downside risks.Fitch ratings agency also flagged the budget as unrealistic but said it would not downgrade Spanish bonds to junk status if the country sought a bailout and unlocked ECB bond-buying."Some of the assumptions certainly are optimistic in terms of the Spanish budget, nonetheless we do think that they're putting in place a programme which is consistent with giving support. And we'll give some tine to see how that will evolve," Fitch's head of sovereign ratings David Riley said in an interview with Reuters on Thursday.Fellow credit watchdog Moody's is due to decide this month whether to downgrade Spain's sovereign rating to junk.The yield on Spain's benchmark 10-year bond traded slightly higher on Thursday at 5.8% . In July, before Draghi announced the ECB's bond-buying programme, the Spanish 10-year yield spiked above 7%, a level seen as unsustainable.

Russia dismisses talk of new spy scandal with US

Russia said today that the Kremlin had nothing to do with a network alleged by the United States to be smuggling military technology to Moscow.The US Justice Department said on Wednesday it had broken up an elaborate network aimed at illegally acquiring US-made microelectronic components for Russian military and spy agencies.It charged 11 people with taking part.The Russian Foreign Ministry expressed surprise at the allegations."The charges are of a criminal nature and have nothing to do with intelligence activity," Deputy Foreign Minister Sergei Ryabkov told Russian news agencies.The situation had caused deep concern in Russia, whose relations with its former Cold War enemy are difficult despite President Barack Obama's call for a new start.Authorities were questioning the Russian nationals who were among the accused, Ryabkov said.Foreign Ministry spokesman Alexander Lukashevich said Washington had informed Moscow that the charges were criminal and unrelated to espionage."We will look into this situation and what really happened, and what charges are being imposed on our citizens," he said.US authorities had "not properly informed" Russia of the arrest of its citizens and Russian diplomats were seeking access to them, he added. A consul had met one in a courtroom, he said.Foreign Minister Sergei Lavrov said in an interview this week that Moscow and Washington must do more to strengthen relations because the "reset" called for by Obama could not last forever.Republican candidate Mitt Romney has accused Obama of being soft on Moscow during his four-year term and described Russia as the United States' "number one geopolitical foe".In a case in 2010 that harked back to the Cold War, the United States arrested 10 suspected Russian agents who were later sent back to Russia in the biggest spy swap since the Soviet era.Security experts puzzled The US Justice Department said 11 people, and companies based in Houston, Texas and Moscow, had been accused on Wednesday of illegally exporting high-tech components to Russian security agencies.The US companies from whom the components were bought were not identified.A US official said Alexander Fishenko, a Kazakhstan native who immigrated to the United States in 1994 and has frequently travelled to Russia, had been charged with operating in the United States as an unregistered agent of the Russian government.He was being held in custody with seven others in Houston.The Justice Department said the three others were in Russia including Sergei Klinov, identified as CEO of Apex System, which it said served as a certified supplier of military equipment to Russia's government, working through subsidiaries.Klinov, reached by telephone in his office in Moscow, said he had learned about the accusations from media reports."Honestly, I am very upset. I just don't know what to say. Everyone has his own truth and it is somewhere in the middle,".Asked whether he worked either for the security services or for the Defence Ministry, he said: "I am floored by this. I don't know what I'm supposed to say."Russia's Federal Security Service, successor of the KGB, and the Defence Ministry denied immediate comment.Another person facing accusations was named as Yuri Savin and described as the marketing director of Russia-based company Atrilor. The company denied having an employee of that name.Asked about the allegations, a Russian security expert said such practices has not been unusual in Soviet times.

US: Secret chemical tests raise concerns

Doris Spates was a baby when her father died inexplicably in 1955. She has watched four siblings die of cancer, and she survived cervical cancer.After learning that the US army conducted secret chemical testing in her impoverished St Louis neighbourhood at the height of the Cold War, she wonders if her own government is to blame.In the mid-1950s, and again a decade later, the army used motorised blowers atop a low-income housing high-rise, at schools and from the backs of vehicles to send a potentially dangerous compound into the already-hazy air in predominantly black areas of St Louis.Local officials were told at the time that the government was testing a smoke screen that could shield St Louis from aerial observation in case the Russians attacked.But in 1994, the government said the tests were part of a biological weapons programme and St Louis was chosen because it bore some resemblance to Russian cities that the US might attack. The material being sprayed was zinc cadmium sulfide, a fine fluorescent powder.Now, new research is raising greater concern about the implications of those tests. St Louis Community College-Meramec sociology professor Lisa Martino-Taylor's research has raised the possibility that the army performed radiation testing by mixing radioactive particles with the zinc cadmium sulfide, though she concedes there is no direct proof.But her report, released late last month, was troubling enough that both US senators from Missouri wrote to army Secretary John McHugh demanding answers.Aides to Senators Claire McCaskill and Roy Blunt said they have received no response. Army spokesperson Dave Foster declined an interview request from The Associated Press, saying the army would first respond to the senators.The area of the secret testing is described by the army in documents obtained by Martino-Taylor through a Freedom of Information Act request as "a densely populated slum district". About three-quarters of the residents were black.Spates, now 57 and retired, was born in 1955, delivered inside her family's apartment on the top floor of the since-demolished Pruitt-Igoe housing development in north St Louis. Her family didn't know that on the roof, the army was intentionally spewing hundreds of pounds of zinc cadmium sulfide into the air.Three months after her birth, her father died. Four of her 11 siblings succumbed to cancer at relatively young ages."I'm wondering if it got into our system," Spates said. "When I heard about the testing, I thought, 'Oh my God. If they did that, there's no telling what else they're hiding.'"Mary Helen Brindell wonders, too. Now 68, her family lived in a working-class mixed-race neighbourhood where spraying occurred.The army has admitted only to using blowers to spread the chemical, but Brindell recalled a summer day playing baseball with other kids in the street when a squadron of green army planes flew close to the ground and dropped a powdery substance. She went inside, washed it off her face and arms, then went back out to play.Over the years, Brindell has battled four types of cancer - breast, thyroid, skin and uterine."I feel betrayed," said Brindell, who is white. "How could they do this? We pointed our fingers during the Holocaust, and we do something like this?"Martino-Taylor said she wasn't aware of any lawsuits filed by anyone affected by the military tests. She also said there have been no payouts "or even an apology" from the government to those affected.The secret testing in St Louis was exposed to Congress in 1994, prompting a demand for a health study. A committee of the National Research Council determined in 1997 that the testing did not expose residents to harmful levels of the chemical. But the committee said research was sparse and the finding relied on limited data from animal testing.It also noted that high doses of cadmium over long periods of exposure could cause bone and kidney problems and lung cancer. The committee recommended that the army conduct follow-up studies "to determine whether inhaled zinc cadmium sulfide breaks down into toxic cadmium compounds, which can be absorbed into the blood to produce toxicity in the lungs and other organs".But it isn't clear if follow-up studies were ever performed. Martino-Taylor said she has gotten no answer from the army and her research has turned up no additional studies. Foster, the army spokesperson, declined comment.Martino-Taylor became involved years ago when a colleague who grew up in the targeted area wondered if the testing was the cause of her cancer. That same day, a second colleague confided to Martino-Taylor that she, too, lived in the test area and had cancer.Martino-Taylor decided to research the testing for her doctoral thesis at the University of Missouri. She believes the St Louis study was linked to the Manhattan Atomic Bomb Project and a small group of scientists from that project who were developing radiological weapons. A congressional study in 1993 confirmed radiological testing in Tennessee and parts of the West during the Cold War."There are strong lines of evidence that there was a radiological component to the St Louis study," Martino-Taylor said.Blunt, in his letter to the army secretary, questioned whether radioactive testing was performed."The idea that thousands of Missourians were unwillingly exposed to harmful materials in order to determine their health effects is absolutely shocking," the senator wrote.McCaskill agreed. "Given the nature of these experiments, it's not surprising that Missouri citizens still have questions and concerns about what exactly occurred and if there may have been any negative health effects," she said in a statement.Martino-Taylor said a follow-up health study should be performed in St Louis, but it must involve direct input from people who lived in the targeted areas."Their voices have not been heard," Martino-Taylor said.

NEWS,03.10.2012

Costly US intelligence effort 'inaccurate'

A multibillion-dollar information-sharing programme created in the aftermath of 9/11 has improperly collected information about innocent Americans and produced little valuable intelligence on terrorism, a US Senate report concludes. It portrays an effort that ballooned far beyond anyone's ability to control.What began as an attempt to put local, state and federal officials in the same room analysing the same intelligence has instead cost huge amounts of money for data-mining software, flat screen televisions and, in Arizona, two fully equipped Chevrolet Tahoes that are used for commuting, investigators found.The lengthy, bipartisan report is a scathing evaluation of what the Department of Homeland Security has held up as a crown jewel of its security efforts. The report underscores a reality of post-9/11 Washington: National security programmes tend to grow, never shrink, even when their money and manpower far surpass the actual subject of terrorism. Much of this money went for ordinary local crime-fighting.Disagreeing with the critical conclusions of the report, the Department of Homeland Security (DHS) says it is outdated, inaccurate and too focused on information produced by the programme, ignoring benefits to local governments from their involvement with federal intelligence officials.Because of a convoluted grants process set up by Congress, Homeland Security officials don't know how much they have spent in their decade-long effort to set up so-called fusion centres in every state. Politically important money Government estimates range from less than $300m to $1.4bn in federal money, plus much more invested by state and local governments. Federal funding is pegged at about 20% to 30%.Despite that, Congress is unlikely to pull the plug. That's because, whether or not it stops terrorists, the programme means politically important money for state and local governments.A Senate Homeland Security subcommittee reviewed more than 600 unclassified reports over a one-year period and concluded that most had nothing to do with terrorism. The panel's chairperson is Democrat Carl Levin of Michigan, the ranking Republican Tom Coburn of Oklahoma."The subcommittee investigation could identify no reporting which uncovered a terrorist threat, nor could it identify a contribution such fusion centre reporting made to disrupt an active terrorist plot," the report said.When fusion centres did address terrorism, they sometimes did so in ways that infringed on civil liberties. The centres have made headlines for circulating information about Ron Paul supporters, the ACLU, activists on both sides of the abortion debate, war protesters and advocates of gun rights.One fusion centre cited in the Senate investigation wrote a report about a Muslim community group's list of book recommendations. Others discussed American citizens speaking at mosques or talking to Muslim groups about parenting.'Out of date'No evidence of criminal activity was contained in those reports. The government did not circulate them, but it kept them on government computers. The federal government is prohibited from storing information about First Amendment activities not related to crimes."It was not clear why, if DHS had determined that the reports were improper to disseminate, the reports were proper to store indefinitely," the report said.Homeland Security Department spokesperson Matthew Chandler called the report "out of date, inaccurate and misleading". He said that it focused entirely on information being produced by fusion centres and did not consider the benefit the involved officials got receiving intelligence from the federal government.The report is as much an indictment of Congress as it is the Homeland Security Department. In setting up the department, lawmakers wanted their states to decide what to spend the money on.Time and again, that set-up has meant the federal government has no way to know how its security money is being spent.Collaboration urgedInside Homeland Security, officials have long known there were problems with the reports coming out of fusion centres, the report shows."You would have some guys, the information you'd see from them, you'd scratch your head and say, 'What planet are you from?'" an unidentified Homeland Security official told Congress.Until this year, the federal reports officers received five days of training and were never tested or graded afterward, the report said.States have had criminal analysis centres for years. But the story of fusion centres began in the frenzied aftermath of the 11 September 2001 attacks.The 9/11 Commission urged better collaboration among government agencies. As officials realised that a terrorism tip was as likely to come from a local police officer as the CIA, fusion centres became a hot topic.But putting people together to share intelligence proved complicated. Special phone and computer lines had to be installed. The people reading the reports needed background checks. Some information could only be read in secure areas, which meant construction projects.All of that cost money.Independent operationMeanwhile, federal intelligence agencies were under orders from Congress to hire more analysts. That meant state and local agencies had to compete for smart counterterrorism thinkers. And federal training for local analysts wasn't an early priority.Though fusion centres receive money from the federal government, they are operated independently. Counterterrorism money started flowing to states in 2003. But it wasn't until late 2007 that the Bush administration told states how to run the centres.State officials soon realised there simply wasn't that much local terrorism-related intelligence. Terrorist attacks didn't happen often, but police faced drugs, guns and violent crime every day. Normal criminal information started moving through fusion centres.Under federal law, that was fine. When lawmakers enacted recommendations of the 9/11 Commission in 2007, they allowed fusion centres to study "criminal or terrorist activity". The law was co-sponsored by Senators Susan Collins and Joe Lieberman, the driving forces behind the creation of Homeland Security.Five years later, Senate investigators found, terrorism is often a secondary focus."Many fusion centres lacked either the capability or stated objective of contributing meaningfully to the federal counterterrorism mission," the Senate report said. Continued support"Many centres didn't consider counterterrorism an explicit part of their mission, and federal officials said some were simply not concerned with doing counterterrorism work."When Janet Napolitano became Homeland Security secretary in 2009, the former Arizona governor embraced the idea that fusion centres should look beyond terrorism. Testifying before Congress that year, she distinguished fusion centres from the FBI-led Joint Terrorism Task Forces (JTTF) that are the leading investigative and analytical arms of the domestic counterterrorism effort."A JTTF is really focused on terrorism and terrorism-related investigations," she said. "Fusion centres are almost everything else."Congress, including the committee that authored the report, supports that notion. And though the report recommends the Senate reconsider the amount of money it spends on fusion centres, that seems unlikely."Congress and two administrations have urged DHS to continue or even expand its support of fusion centres, without providing sufficient oversight to ensure the intelligence from fusion centres is commensurate with the level of federal investment," the report said.And following the release of the report, Homeland Security officials indicated their continued strong support for the programme.

 

IMF: Crisis to last 10 years

The world economic crisis could take 10 years to run its course, the IMF's chief economist Olivier Blanchard told Hungarian business news site Portfolio.hu in an interview published on Wednesday."It's not yet a lost decade," Blanchard said, "but it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape."Urging greater solidarity between member countries of the eurozone and more integration in fiscal and economic policy, he said Europe "has to go forward" with integration to make the common currency zone a success."It cannot stay where it is. I think nobody really wants to go back," he said."When a country is doing poorly the others have to be willing to help in various ways, not only out of solidarity, but because trouble in one country may well spill over to theirs."This is why the fiscal union and the banking union proposals being worked on as we speak are so important," he explained.Blanchard also said the United States has a fiscal problem which it hasn't dealt with yet."Most analysts are confident that when it needs to be done it will be done. I hope they are right," he said.Elsewhere, Blanchard said Japan faced a difficult fiscal adjustment and could take decades to solve its debt problems, but that the IMF did not forecast any hard landing for China."China has probably taken care of its asset boom although it has slower growth than before," he said.

Iran presses on despite currency woes

Iran will press on with its nuclear programme despite the problems caused by Western sanctions, including a dramatic slide in the value of its currency, President Mahmoud Ahmadinejad said on Tuesday."We are not a people to retreat on the nuclear issue," he told a news conference in Tehran."If somebody thinks they can pressure Iran, they are certainly wrong and they must correct their behaviour," he said.Ahmadinejad's comments came amid an accelerated slide in Iran's currency, which has now lost more than 80% of its value compared with a year ago - with 17% of its value shed on Monday alone.The rial slipped another 4% on Tuesday to close at 36 100 to the dollar, according to exchange tracking websites.Ahmadinejad said the plunge was part of an economic "war" waged by the West on the Islamic republic and "a psychological war on the exchange market".Under 'enormous pressure'Iran, he said, had sufficient foreign currency reserves.Those reserves were estimated at around $100bn at the end of last year, thanks to surging oil exports.The White House said on Tuesday that Iranians blamed their leaders for the rising deprivation caused by US and international sanctions over Tehran's nuclear programme.White House spokesperson Jay Carney said the fast-deteriorating economic situation in Iran, which has also sparked price hikes in basic foods, was a sign the government in Tehran was under "enormous pressure"."The Iranian people are aware of who is responsible for the circumstances that have befallen the Iranian economy as a result of the regime's intransigence in its refusal to abide by its obligations."The US Treasury estimates Iran's foreign earnings have been cut by $5bn a month under the Western economic measures.Criticism over talksIn his media conference, Ahmadinejad backtracked on hints he had made during a visit to New York at the UN General Assembly that Iran could consider direct negotiations with the United States on the nuclear issue."Direct negotiation is possible, but needs conditions, and I do not think the conditions are there for talks. Dialogue should be based on fairness and mutual respect," he said.But he also said: "I think that this situation cannot last in the relations between Iran and the United States."Hardliners in Iran criticised Ahmadinejad on his return for opening the door to the possibility of talks with the United States. That also fuelled criticism that his government has mismanaged the economy.The chairperson of Tehran's chamber of commerce, Yahya Ale-Eshagh, was quoted as saying by the Mehr news agency that "part of this [currency] tumult is due to sanctions".No vote of confidenceBut he also said "the person who is not able to manage in a time of crisis should not continue working in his post".Mohammad Bayatian, a member of parliament on an industry and mines commission, said, according to the parliamentary website icana.ir, that "a petition has been prepared to question the president".He said the petition was "due to the government not paying attention to the parliament's remarks over its management of the forex market".The parliament's presiding board was to decide whether to admit the petition. If it goes ahead, it would only be to hear Ahmadinejad speak on the issue, and it would not involve a confidence vote or other serious procedure.Mehdi Mohammadi, a figure close to Iran's Supreme National Security Council, wrote in a piece for the Vatan Emrouz newspaper on Tuesday: "Is the currency situation in the market due to sanctions? No... The problem is not a lack of [foreign] currency."Israel 'not a concern'He blamed the government, and unidentified "mafias" he said were profiting from the currency volatility.Mohammadi also said holding talks with the United States was not an option."Past experience shows that speaking of negotiations in these conditions only sends a signal of weakness. The enemy only makes concessions and takes you seriously when you're strong," he wrote.On the prospect of a military conflict breaking out over the nuclear issue, Ahmadinejad reaffirmed that he was "not very concerned" about persistent threats from Israel."Iran is not a country to be shaken by, let's say, a few firecrackers," he said.

NEWS,02.10.2012

One step forward, two back for Greece on debt

Every step Greece takes to shore up its finances seems to make it harder for Athens to make the numbers add up in the long-term, especially when it comes to its spiralling debt.Monday's 2013 budget plan contained some positive news - for example, the expectation that Greece will have a primary budget surplus, before debt financing costs, for the first time since 2002 - as well as some more alarming forecasts.Chief among those was an acknowledgement that the economy will shrink again next year, by 3.8%, the sixth annual contraction in succession, and that the debt-to-GDP ratio will rise to 179.3% in 2013, a dauntingly high figure.The bottom line is that Greece is in a worse state now than even the most pessimistic forecast just six months ago.The relationship between growth and debt is the focus of the European Commission, the European Central Bank and the International Monetary Fund - the troika of inspectors currently in Athens poring over the government's projections.In the coming 4-6 weeks, the troika will publish its latest report assessing whether Greece's debt is sustainable in the longer-term, something many private sector economists have already concluded is not the case.In its last analysis published in March, the troika said Greece needed to get its debts down to 120% of GDP by 2020 for the situation to be manageable and concluded the goal was achievable under certain optimistic assumptions.But as so often with the Greek economy in the past three years, most of the assumptions are already way off-target and the likelihood of Athens meeting the 2020 goal is now even slimmer than it was then.That makes it all the more likely that Athens will have to go through another debt restructuring, involving further losses for bondholders, if it is to return to solvency. And this time it is the official sector - mostly European governments and their taxpayers - who will have to take a hit rather than the private sector.That would be a major blow to German Chancellor Angela Merkel, whose country is the biggest contributor to euro zone rescue funds, and diplomats say she would be eager to avoid such an event before a September 2013 German general election."Debt reduction will still require a herculean domestic fiscal adjustment," JP Morgan said in an analysis of Greece's deteriorating debt predicament back in July."The upshot of this arrangement is that the inevitable decisions on burden-sharing that lie ahead will relate to official creditors and Greek citizens," it said, noting 70% of Greek debt would be in official sector hands by 2014."Ugly picture" Perhaps the clearest illustration of how far Greece has strayed in the past six months - during which time it has held two elections and so far failed to push through the legislation needed to cut spending and raise revenue - is set out in black and white in the troika's 10-page analysis from March.In that report, written just after private investors took a 70% writedown on their Greek bond portfolios, the EU/IMF inspectors said they expected public debt to peak at 170% of GDP in 2014 under a worst-case scenario.Wisely, they added a proviso: "The debt trajectory is extremely sensitive to programme delays, suggesting that the programme could be accident prone, where sustainability could come into question."Indeed, the debt next year is now forecast to be 10 percentage points higher than even the worst-case figure, and could go on rising in 2014, depending on whether grow returns."It's an extremely ugly picture," said an EU economic adviser responsible for coming up with solutions to the crisis."The truth is, everyone knows Greece needs another debt restructuring but no one wants to acknowledge it right now because the contagion impact remains."A further concern is that even if Greece were magically to get its debt down to 120 percent of GDP by 2020 - an adjustment of around 120 billion euros in seven years - there is no hard-and-fast rule that says it will then be sustainable.For some countries with low growth, a debt level of 90% of GDP is hard to sustain. Others, such as Japan, can survive with debts approaching 200% of GDP."When it comes to Greece, we just used 120% because that's where Italy's debt level was at the time and Italy had managed to sustain it," an EU official closely familiar with the troika's work

Sanctions failing to halt Iran: Israel

 

International sanctions against Iran are biting but are not slowing the country's nuclear programme, Israel's strategic affairs minister Moshe Yaalon said on Tuesday."The sanctions and the pressure in place against Iran for around the past two years are effective, but the centrifuges continue to turn," Yaalon told Israeli public radio."There is a sanctions clock, and the Iranian nuclear programme is getting closer and closer to the red line," he added."We think it is necessary to impose harsh sanctions, economic, political or otherwise, against Iran, and we retain the military option," Yaalon said."But the fact is that diplomacy is not working and the sanctions have not had the desired effect because Iran is continuing its nuclear programme."Israel, the Middle East's sole if undeclared nuclear power, and much of the international community, believe Iran's nuclear programme masks a weapons drive Tehran says the programme is for peaceful energy and medical purposes, but has been slammed with increasingly harsh sanctions that have squeezed the country's economy.On Monday, Iran's currency plummeted at least 17% in trading, prompting the US State Department to describe the freefall as evidence that sanctions were putting pressure on the Iranian government."From our perspective this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy. It's under incredible strain," State Department spokesperson Victoria Nuland said.

Russia tells Nato to stay away from Syria

Russia told Nato and world powers on Tuesday they should not seek ways to intervene in Syria's civil war or set up buffer zones between rebels and government forces.Moscow further called for restraint between Nato-member Turkey and Syria, where violence along their shared border has strained relations between the former allies.Tensions have flared since a mortar round fired from inside Syria struck the territory of Turkey. Ankara has threatened to respond if the strike were repeated.When asked by Interfax if Moscow worried whether the tense border situation could prompt Nato to intervene to defend Turkey, its easternmost member, Deputy Foreign Minister Gennady Gatilov warned against any such step."In our contacts with partners in Nato and in the region, we are calling on them not to seek pretexts for carrying out a military scenario or to introduce initiatives such as humanitarian corridors or buffer zones." Turkish Prime Minister Tayyip Erdogan, one of Assad's most caustic critics, recently lashed out at Russia for blocking efforts at the UN Security Council to exert pressure on Assad and said Moscow's stance allowed massacres in Syria to continue.Turkey has floated the idea of setting up "safe zones" inside Syria to protect civilians from the conflict but that would also have to be approved by the Security Council.Russia and China have vetoed three Security Council resolutions condemning Syrian President Bashar Assad and have blocked attempts to impose further sanctions on his government or intervene more directly in the conflict.Ankara has repeatedly complained of artillery and gunfire spilling over the border into Turkey, leading to threats of retaliation.Assad may cling to power"We believe both Syrian and Turkish authorities should exercise maximum restraint in this situation, taking into account the rising number of radicals among the Syrian opposition who can intentionally provoke conflicts on the border," Gatilov was quoted as saying.The West accuses Russia of supporting Assad in the bloody 18-month conflict and imposing a stalemate in the Security Council as violence in Syria has spiralled.Moscow says Syrians themselves should decide their fate and says it will veto any Security Council resolution that could serve as a springboard for military intervention.Russia accuses the West of overstepping its mandate when it set up a no-fly zone in Libya last year, leading to the fall of Muammar Gaddafi to a popular uprising and insurgency.Western diplomats in Moscow say Russia seems to believe Assad may still successfully cling to power though they see Russia's dialogue with some Syrian opposition groups as an attempt to secure its interests there if he were overthrown.

NEWS,01.10.2012

Greek 2013 budget sees 6th year of recession

Greece will bring forward painful budget cuts to end a decade of primary deficits while grappling with a sixth year of recession, according to a 2013 budget draft aimed at satisfying international lenders.The government unveiled a tough austerity budget after Finance Minister Yannis Stournaras met the so-called "troika" of International Monetary Fund, European Commission and European Central Bank inspectors, whose approval is vital to unlock the next instalment of aid, urgently needed to avoid bankruptcy.Greece will aim for a primary surplus before debt servicing of 1.1% of GDP next year, the first positive balance since 2002, after a 1.5% deficit in 2012. But the economy will shrink for a sixth year, by 3.8%.There was no immediate comment from either EU authorities or the IMF on the budget, but Greek Finance Ministry officials said the troika still objected to some of the measures.Economic output will have declined by a quarter since 2008 in a vicious spiral of austerity and recession, with the most heavily indebted euro zone nation repeatedly missing targets set under its EU/IMF bailouts and at risk of being forced out of the single currency bloc.Analysts said even the recession scenario set out in the budget appeared optimistic, given Greece's slow reform efforts and a weakening euro zone economy."Chances are the budget targets will be missed because of the deeper recession which the cuts will bring and the inability to meet privatisation targets," said Xenofon Damalas, head of investment services at Marfin Egnatia Bank.The general government deficit, including debt servicing costs, will come to 4.2% of GDP next year from 6.6% in 2012, while unemployment will rise to 24.7%.The draft gave no target for privatisation revenues. In a sign of the daunting scale of Greece's problems, public debt is projected to reach 179.3% of GDP next year despite a major writedown of debt owed to private investors this year.Painful cuts The budget will make more cuts to public sector pay, pensions and welfare benefits as part of an 11.5 billion euro austerity package of savings spread out over the next two years."We must hold on tight to the helm to make the difficult turn," Stournaras said. "It's the only way for the Greek economy to return to the righteous cycle of fiscal stability and growth."Labour unions were quick to respond, vowing new strikes this month after a crippling walkout marked by clashes last week."We don't have any other option. We can't just sit around doing nothing," said Nikos Kioutsoukis, general secretary of the largest private sector union GSEE.Austerity-weary Greeks have taken to the streets in often violent protests against waves of salary and pension cuts that have driven many to the edge.Prime Minister Antonis Samaras, who has vowed this is the last round of cuts, also met the troika chiefs later on Monday to convince them to lift their last objections, but there appeared to be little progress."There are discussions on the measures. The troika wants clarifications," Stournaras told reporters after the meeting. Officials said inspectors doubt about 2 billion worth of measures would actually be delivered.Dozens of protesters waving Greek flags and shouting "out with the troika" jeered the international creditors' envoys as they entered the finance ministry on Monday.At stake is a 31.5 billion euro instalment from a 130 billion euro second bailout keeping Greece afloat. Lenders have made clear no money will be disbursed without credible measures.However, two German magazines reported on Saturday that Athens would receive its next aid tranche despite budget shortfalls and slow progress on reforms because the euro zone does not want any country to leave the common currency.Lenders are coming to terms with the fact Greece will need more time, more funding or a restructuring of official debt - that owed to European governments - to survive. Sources have told the IMF would prefer bondholders to take another haircut, but EU governments, which would incur most of the losses, would rather give Athens more time."Those who accept Greece's optimistic predictions want to gain time to resolve the debt crisis overall," Damalas said. "But talk has already begun that the austerity measures are not enough and a new, official haircut will be needed, which explains the tension between the IMF and the EU."

Italy fights tax evasion on YouTube

Italy's tax agency on Monday launched its own channel on YouTube to tell Italians how to pay their taxes, as the government pursues a sweeping crackdown against evasion aimed at boosting public finances. Videos lasting one or two minutes inform viewers fed up with bureaucracy in clear and simple language on questions like how to obtain a card for health services, how to register a house rental contract or how to pay taxes online.Eight videos were visible on the website  on Monday but the tax agency said that new videos would be posted soon.The agency specified that the clips had been produced at no extra cost.Italy's tax authorities have long been criticised for using overly complex bureaucratic language and methods, making it hard to fulfil all requirements.Since coming to power last year, Prime Minister Mario Monti has stressed Italians must see paying taxes as a sign of civility. Tax evasion is estimated at between €120bn and €150bn ($150bn - $194bn) a year.With high-profile raids on luxury resorts and bars, tax authorities managed to recover €12.7bn in unpaid taxes last year - a 15.5 percentage point increase from 2010 - and are intending to claw back even more this year.

New finance minister for Japan

Japanese Prime Minister Yoshihiko Noda appointed as finance minister on Monday a veteran lawmaker expected to follow his line on budget reform and currency intervention in a new cabinet unveiled ahead of an election due in months.Koriki Jojima, 65, who served as the parliamentary affairs chief for the ruling Democratic Party of Japan (DPJ), will take charge of the world's third largest economy as it teeters on the brink of recession, hurt by a global slowdown and a strong yen.Noda, who took office in September 2011 as the Democrats' third prime minister in as many years, had changed his cabinet line-up twice before. The third reshuffle is seen as a last-ditch effort to boost the Democrats' sagging ratings.Analysts said neither Jojima nor the other nine new ministers would have much impact on government policy, with the shake-up mainly designed to give those with greatest voter appeal more prominent roles within the party or cabinet.Jojima replaced Jun Azumi, 50, an eloquent and experienced campaigner who once worked as a presenter at public broadcaster NHK and who took over a senior party post.Similarly, photogenic Goshi Hosono, 41, left his post as environment minister to become party policy chief.Jojima is likely to toe Noda's line on the need for fiscal reforms given he was instrumental in securing a political deal on the prime minister's plan to double the sales tax to 10% by October 2015. "Noda clearly eyes elections in reshuffling the cabinet and party line-ups this time," said political commentator Harumi Arima.Little is known about Jojima's views on monetary and currency policies, but he is expected to stick with the government line on the need to work with the central bank to beat deflation and to act firmly against excessive yen gains. "I doubt if Noda took into account the need to put the right person in the right place," said Kyohei Morita, chief Japan economist at Barclays Capital. "The fact that he can reshuffle the cabinet so many times in a year indicates that bureaucrats, not politicians, guide policies including currency intervention.""As such, I see no change in currency policy whereby authorities give verbal warning when the dollar falls below ¥78 and stand ready to intervene in case of excessive gains," he said, adding the new minister hardly grabbed market attention.Opposition seen strongNoda retained his foreign and defence ministers in the reshuffle that comes amid heightened tension with China over a long-simmering row over a chain of East China Sea islands administered by Japan but also claimed by China and Taiwan.Noda told reporters that Japan had no plan to bring the dispute to the International Court of Justice, and that from Japan's perspective there was no question of its sovereignty over the islands. Japan has taken a separate dispute with South Korea to the court.Some commentators took Noda's appointment as education minister of Makiko Tanaka, a former foreign minister and the daughter of Kakuei Tanaka, who normalised diplomatic relations with China four decades ago, as a move to improve ties with Beijing.Noda told reporters the sole purpose of the shake-up was to improve the functioning of the cabinet.Opinion polls show the main opposition Liberal Democratic Party, ousted in 2009 after half a century of almost non-stop rule, will likely come first in the election, meaning Jojima's time in office could be short.Noda, 55, promised in August to call general elections "soon" in return for backing on his contentious sales tax plan. But the former finance minister remains coy on the timing of the vote.