NEWS,14.01.2013

US not a bargaining chip - Obama

President Barack Obama demanded on Monday that Congress quickly raise the federal debt limit and warned that he will not allow the Republican opposition to "collect a ransom for crashing the US economy," setting out again a tough negotiating position on an issue that threatens to shut down the American government.In the final news conference of his first term, the president said: "The full faith and credit of the United States of America is not a bargaining chip. And they better decide quickly because time is running short."Obama said Republicans who want to dramatically cut spending in return for raising U.S. borrowing limits "will not collect a ransom in exchange for not crashing the economy.""We are not a deadbeat nation," he declared.Obama further said he was not willing to continue facing prolonged and bitter debates on the debt, a current reality that he says are hurting the U.S. recovery from the Great Recession."I don't think anybody would consider my position to be unreasonable here".Until the partisan fight over the debt ceiling broke out in 2011, the limit on borrowing had been increased by Congress as a matter of course.But with a surge in Tea Party Republicans elected to the House of Representatives in 2010, the opposition party has sought to use the power over the debt to enforce its desires for smaller government and spending cuts.Obama said he was willing to consider future deficit cuts, but only if they are done independently from a vote to raise the $16.4 trillion debt limit.In a blunt rebuttal to Republicans who say they will not agree to any more tax increases, the president said taxes and spending both must be on the table.He said he is "open to making modest adjustments to programmes like Medicare to protect them for future generations," and wants to close tax loopholes at the same time.Obama spoke less than a week before his inauguration for a second term, and several days after he signed legislation that narrowly averted a "fiscal cliff" of automatic spending cuts and across-the-board tax increases.Combined with other bills he signed earlier in the term, he said he and Congress have reduced deficits by about $2.5 trillion over a decade, somewhat less than the $4 trillion he said is necessary to get them down to a manageable size."I'm happy to have a conversation about how we reduce our deficits in a sensible way," he said, but added repeatedly he wasn't willing to let congressional Republicans use the debt limit as leverage in negotiations over spending cuts.Failure to raise the debt limit would put the United States into a first-ever default, a step that Obama said could "blow up the economy."Congressional Democrats have recently urged the president to lift the debt limit unilaterally. He said as he has before that he won't do it, that Congress had voted for the spending that resulted in federal borrowing, and should now agree to pay the bill.

Obama warns Congress of economic chaos

President Barack Obama warned Congress on Monday that a refusal to raise the United States debt ceiling next month would trigger economic chaos.Obama, at a news conference, said the US economy was poised for a good year as long as Washington politics did not interfere.He said a Republican refusal to lift the debt ceiling could lead the US into a debt default, which would prevent the government from being able to provide Social Security benefits to some seniors and possibly tip the economy into recession."It would be a self-inflicted wound on the economy," Obama said.Obama argued that he has agreed to plenty of government spending cuts and that it was now time for an overhaul of the tax code to close loopholes and for some modest tinkering with entitlement programmes to reach a balanced deficit-reduction package. Obama said that he would be willing to take over authority for raising the US borrowing limit if Congress does not want to increase the debt ceiling.Obama was asked at a news conference about differences he is having with congressional Republicans over raising the $16.4 trillion debt ceiling that the country is expected to hit as soon as the middle of next month."This is about paying your bills," he said. "We've got to stop lurching from crisis to crisis to crisis."Obama said the economy would be damaged if a Washington impasse over raising the debt ceiling led to a government shutdown."My hope is that common sense prevails," Obama said.Obama said it is possible that the Republican-led House of Representatives could vote against raising the debt ceiling. If a government shutdown results, "It will damage our economy," he said.

UK finance jobs nosedive over scandals

The number of financial services staff sacked or suspended in Britain last year for reasons such as wrongdoing reached the highest level in five years, law firm Pinsent Masons said on Monday.Citing figures obtained through a Freedom of Information request, Pinsent Masons said 1 373 individuals were dismissed or suspended from financial services jobs, as distinct from those who lost their jobs through general redundancy programmes, a 76% increase on the previous 12 months.The finding comes after a succession of financial scandals and efforts by regulators to clamp down on misdemeanours.Britain's Financial Services Authority (FSA) regulator, due to be replaced later this year, has for instance beefed up its efforts to tackle market abuse over the last few years, successfully prosecuting a number of high-profile insider dealing cases.Last year also saw a string of bank scandals, including mis-selling of financial products and the manipulation of global benchmark interest rates, as well as the prosecution of former UBS trader Kweku Adoboli for the biggest fraud in British history, which cost the Swiss bank $2.3bn."The FSA has increasingly shown that it is cracking down on financial crime and market abuse. Financial services firms are operating under increased scrutiny and as a result employers are imposing industry rules more strictly," said Helen Farr, a London-based partner at Pinsent Masons."Enforcement activity has clearly had an impact on firms' willingness to tolerate wrongdoing. Firms now appear much more likely to discipline employees for offences," Farr said.The law firm said the 1 373 total was based on changes to the employment status of individuals who have to be authorised by the FSA, and included people disciplined for poor performance or sacked for other reasons, as well as for wrongdoing.It also said the overall number of job losses in the financial sector had reached its highest level since 2008, with 36 868 people losing their jobs last year.That took the total number of people who had left their posts over the past five years to 177 697, it said.Banks worldwide are shedding jobs as stricter regulations and eurozone worries take their toll on trading income and investment banking operations. "The total number of job losses in the sector is striking," Farr said. "While it should be kept in mind that many of these people may have been re-employed and some will have simply transferred internally, the numbers certainly tell a story."

Eurozone factory output falls again

 

Output at eurozone factories fell for the third straight month in November and against expectations of a rise, but the end of 2012 probably marked the deepest point in the bloc's recession.Industrial production in the 17 countries sharing the euro fell 0.3% in November from the previous month, continuing its fall since the European summer, the EU's statistics office Eurostat said on Monday.Factory output, two-thirds of which is generated by Germany, France and Italy, was also down almost 4% on an annual basis in the month. Economists polled by Reuters expected a very modest, 0.1% rise in November from October, and a 3.2% fall on an annual basis The eurozone's debt crisis has driven a vicious cycle of falling business consumer morale and rising, record unemployment that has sucked away demand for factory-made goods, ranging from cars to food.While the eurozone avoided a break-up last year, helped by a European Central Bank announcement of a plan to buy government bonds, households are suffering the most from the crisis. Production of durable consumer goods such as televisions fell nearly 8% in November compared to a year earlier.But production of machinery to produce other goods, an indicator of future business, rose 0.7% in November from October, after two months of losses.If production of those capital goods continues to increase, that could support business surveys and the view of the ECB that the eurozone will recover from recession in 2013 and that the economy hit bottom in the fourth quarter of last year."The worst is behind us," David Mackie, an economist at JP Morgan said in a research note. "We believe that the euro area will exit recession in the first half of this year," he said.

Cameron takes dim view of EU referendum

British Prime Minister David Cameron on Monday played down the prospect of a near-term referendum on Britain's membership of the European Union, ahead of a long-awaited speech on the issue he is expected to deliver next week.Cameron told BBC radio an in-out referendum soon would be a "false choice", and made clear that although he did not think Britain would "collapse" if it left the EU, it was in Britain's interests to stay in the 27-member bloc.Cameron says he plans to renegotiate Britain's ties with the EU and seek the public's fresh consent for the new deal. He told the BBC he believes he has allies in his efforts to repatriate more powers from Brussels.