NEWS,28.03.2013

Putin orders surprise military exercises

Russian President Vladimir Putin on Thursday ordered surprise military exercises in the Black Sea region involving 7 000 troops and dozens of ships to test the army's battle readiness, the Kremlin said. In typical Putin style, the order was presented to the Defence Minister Sergei Shoigu in a sealed envelope in the middle of the night at 04:00, with the drills to start immediately.Putin's spokesperson Dmitry Peskov indicated the order was aimed at testing out the battle readiness of the Russian armed forces and said Moscow was not obliged to warn its partners of the plan."Today at 04:00 am the president of the Russian Federation and supreme military commander Putin gave the order to the defence minister to begin major military exercises in the Black Sea region," Peskov said."We are talking about major exercises, intended as a check," he added in a statement carried by Russian news agencies. He said the exercises would involve 36 ships and up to 7 000 troops.A defence ministry source told the state RIA Novosti news agency that the military drills, which would involve live firing, were already under way and would be wrapped up by the end of the week.Peskov said Putin had already warned the armed forces that they would be subject to sudden checks of their battle preparedness."If we remember what the president said at the council of the defence ministry a little time ago, then we will remember his words that the practice of sudden checks will continue," Peskov added.Putin drew up the sudden order overnight while flying home from South Africa where he attended the summit of Brics emerging economies in Durban.Peskov said 36 ships from the Russian Black Sea Fleet's base in the Ukrainian Crimean city of Sevastopol and the Russian port of Novorossiisk would be involved in the exercises.Aviation, paratroopers and special forces would also take part, Peskov said."According to international practice, exercises involving up to 7 000 people do not require us to inform our partners in advance," he said.The defence ministry's chief spokesperson Igor Konashenkov told RIA Novosti that the drills would involve 7 000 troops, up to 20 military jets and helicopters and 50 pieces of artillery.Key littoral states on the Black Sea include Turkey, Ukraine and Russia's foe Georgia with whom Moscow fought a brief war in 2008. EU members Bulgaria and Romania also have a Black Sea coastline. Peskov said the exercises would take place on three military test ranges on Russian territory.Military reformRussia embarked on a major campaign of military reform after its war with Georgia showed up weaknesses in the reactivity of the armed forces despite the military victory over Tbilisi.The government is seeking to make the army more responsive to the demands of modern warfare by modernising technology and shaking up command structures. Independent military analyst Alexander Golts said that as long as the element of surprise was genuine, the exercises were a good idea "to test the battle readiness of the army".Analyst Pavel Felgenhauer, a military commentator for the opposition Novaya Gazeta newspaper, said Putin was keen to make another display of Russian military might to the West."This is sabre rattling in the place nearest [to Europe] to make a demonstration of our intentions," he said.The exercises represent a major test for Shoigu, one of Putin's closest allies who became defence minister late last year after previous incumbent Anatoly Serdyukov, the architect of the military reform, was implicated in a graft scandal.RIA Novosti said that the manoeuvres come after a similar sudden exercise was ordered in February in Russia's central and southern regions that was the first unscheduled check of the armed forces in 20 years. After those exercises, Russia's top general Valery Gerasimov said a number of systemic problems and shortcomings of military hardware had been uncovered.

Kremlin watchdog slams NGO raids

Members of Kremlin's own rights council on Thursday denounced "unprecedented" raids on activist groups, saying the searches were aimed at paralysing their work and muting their role as a rare critical voice in Russia. Russian prosecutors and tax inspectors have in recent weeks staged a wave of searches of at least 100 leading Russian and foreign non-governmental organisations (NGOs), including Human Rights Watch and Amnesty International."A mass campaign of searches of NGOs is unprecedented in the last 25 years," said Sergei Krivenko, a top official at Memorial rights group and a member of the Kremlin's rights council that advises President Vladimir Putin on rights.He compared the raids to the pressure on civil society under Soviet dictator Joseph Stalin."It can only be compared with a campaign of 1929 when religious organisations were shut down en masse and 1937-1938, when all foreign organisations were closed down," Krivenko, whose group was searched for several days, told a news conference.Pavel Chikov, head of Agora rights association, who is also a member of the Kremlin's rights council, told the same news conference that so far a hundred groups from 25 regions across Russia have reported searches.The raids are being spearheaded by prosecutors and involve members of the FSB security service, police and even Russia's consumer rights watchdog Rospotrebnadzor, he added."First and foremost prosecutors are interested in non-governmental organisations involved in political activities, protest activities, criticism of the authorities and NGOs with foreign financing," he told reporters."Their possible aim is to paralyse NGOs for some time and intimidate them."Rights activists link the searches to a controversial law forcing foreign-funded NGOs involved in politics to carry a "foreign agent" tag.The measure was fast-tracked through parliament upon Putin's return to the Kremlin in May last year in the face of unprecedented protests against his 13-year rule.Rights groups vowed to boycott the law, while Putin said last month that the legislation should be enforced.Tax and fire inspectorsMikhail Fedotov, the head of the Kremlin's rights council, said it was unclear why so many officials including tax inspectors and fire inspectors were involved in the searches."Do they want to check whether NGOs make explosives?" he said. "They found that one group lacked a plan on how to exterminate rats."Earlier this week, the EU called the searches "worrisome", while German officials said the raids on German groups could lead to a deterioration of ties.A US state department spokesperson said Washington was "very concerned" by the searches.In a bid to deflect the mounting criticism, the general prosecutor's office issued a statement on Thursday, saying the current searches were being carried out in accordance with a plan for this year. The results of the checks, it said, will help determine "problem issues and ways to solve them" including by tweaking the current legislation.The prosecutor's office noted that NGOs could file a complaint if they believed their rights and interests were violated, promising that all such complaints would be "swiftly" looked into.In the latest searches, prosecutors on Thursday also visited the offices of Russia's oldest rights organisation, the Moscow Helsinki Group. Its veteran head Lyudmila Alexeyeva led the drive to boycott the "foreign agent" law."Of course, it's possible to make our life a living hell, but we are used to it - they make our life hell and we go on living," the 85-year-old campaigner told AFP.

Top firms scramble for oil wealth

Lebanon's Energy Ministry says 50 companies have participated in a pre-qualification process to win licenses for oil and gas work off the Lebanese coast. The ministry says the companies include Chevron and Exxon Mobil from the United States and Royal Dutch Shell.Lebanon is a resource-poor nation and any finds could help it pay off what is one of the highest debt rates in the world.The names of winning companies will be announced on April 18.Recent Israeli discoveries of oil and gas have raised tensions between Lebanon and neighboring Israel, which are in a state of war. Both countries claim a small maritime area of 850 square kilometers (328 square miles) in the Mediterranean.

US jobless claims rise

The number of Americans filing new claims for unemployment benefits rose more than expected last week, but probably not enough to suggest the labour market recovery was taking a step back.Initial claims for state unemployment benefits increased 16 000 to a seasonally adjusted 357 000, the Labour Department said on Thursday. Still, they remained in the middle of their range for this year.The prior week's claims figure was revised to show 5000 more applications than previously reported. Economists polled by Reuters had expected first-time applications last week to rise to 340 000.Last week's report contained annual benchmark revisions to the series and the model used by the government to iron out seasonal fluctuations.Last week's increase pushed claims above the 350 000 level for the first time since mid-February.The four-week moving average for new claims, a better measure of labour market trends, rose 2 250 to 343 000, but remained below the 350 000 level.That could offer hope job growth this month retained some of the momentum from February. Nonfarm payrolls increased 236 000 last month, with the unemployment rate falling to a four-year low of 7.7%.Claims over the next several weeks will be watched closely for signs of layoffs related to $85bn in government budget cuts known as the "sequester." So far, there is little sign the across-the-board spending cuts are affecting the job market.A Labour Department analyst said no states had been estimated and there were no special factors influencing the report.Claims, however, could become volatile in the coming weeks because of the early timing of Easter and spring breaks, which could throw off the so-called seasonal factor.The labour market is being closely watched by the Federal Reserve, which last week said it would maintain its monthly $85bn purchases of mortgage and Treasury bonds to foster faster job growth.The number of people still receiving benefits under regular state programs after an initial week of aid dropped 27 000 to 3.05 million in the week ended March 16. That was the lowest since June 2008.The so-called continuing claims covered the period for the household survey from which the unemployment rate is derived.

Strict controls as Cyprus banks reopen

Cypriots will finally get access to their bank accounts later on Thursday after a nearly two-week lockdown, but under tight restrictions unprecedented in the eurozone.With world markets still jittery over the crisis, the banks closed since March 16 will reopen from 12:00pm (10:00 GMT) until 6:00pm (16:00 GMT), the central bank confirmed.But Finance Minister Michalis Sarris has imposed temporary limits on daily withdrawals to €300 to prevent a run on the banks that could wreak havoc on the island's already fragile economy.He also banned the cashing of cheques and ordered those travelling abroad not to take more than €1 000 out of the country.Five shipping containers reportedly filled with billions of euros were delivered to the central bank in Nicosia late Wednesday, an AFP photographer said.Under a deal agreed in Brussels on Monday, Cyprus must raise €5.8bn to qualify for a €10bn bailout from the "troika" of the European Union, European Central Bank and International Monetary Fund.Depositors with more than €100 000 in the top two banks Bank of Cyprus (BoC) and Laiki or 'Popular Bank' face losing a large chunk of their money.Cyprus also agreed to major reforms to its banking system, which is heavily dependent on Russian money an estimated $31bn in corporate and private deposits.Monday's deal kept the Mediterranean island from crashing out of the euro but it has provoked fury at home.OnWednesday, around 1 500 anti-austerity protesters marched on the presidential palace to protest the EU-IMF rescue package, which delivers a major hit to big depositors and threatens thousands of jobs.Under the government-imposed restrictions, money transfers to accounts outside Cyprus are forbidden, with some exceptions, and there is a limit of €5 000 monthly in credit or debit card purchases while abroad.Sarris said the strict capital controls would be temporary.But in comments to the private television station Sigma on Wednesday night he warned: "We will see worse days in 2013... the economy will go into deeper recession."Cyprus is the first eurozone country to impose capital controls after bailouts unlike Greece, Spain, Portugal and Ireland, which have also received multi-billion-dollar rescue packages.Sarris's decree said that the restrictions were in place to prevent a run on the banks as depositors tried to get their money out, which would see the financial system collapse and destabilise the economy.The bailout involves restructuring BoC and eventually winding down Laiki, whose "good" assets will be absorbed by the bigger bank.BoC chief executive Yiannis Kypris was sacked by the central bank governor on Wednesday a day after the bank chairman's resignation was rejected.Laiki depositors face losses of up to 80% on deposits above €100 000, while BoC savers have been warned they stand to lose 40%.Thanks in part to comments by Eurogroup chief Jeroen Dijsselbloem on Monday that appeared to suggest the harsh terms of the Cyprus deal could be repeated elsewhere - comments later retracted the markets remained nervous.At one point Wednesday the euro sank to below the $1.28 line for the first time since November. In Tokyo trade on Thursday morning, the euro was still under pressure, fetching $1.2785 and ¥120.33.European and US stock markets closed down, and in early trading on Thursday in Asia markets were also slipping amid fears over Cyprus.Investors were worried about "the 'contagion effect' of a possible run on banks spreading to other parts of the eurozone," SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires.Bank employees union ETYK have appealed to the public not to take out their frustrations on bank staff, saying that they too are "victims of criminal acts".In the Greek capital Athens on Wednesday night, a bomb exploded near the home of former BoC executive Nikos Tsakos, a Greek ship owner who had served on the board of the Cypriot lender. Nobody was injured.

Obama calls for action on guns

US President Barack Obama on Thursday urged lawmakers to take serious action against gun violence, telling Americans not to forget the tragedy of the mass shooting in Newtown, Connecticut just months ago. "Tears aren't enough, expressions of sympathy aren't enough," Obama said.Congress is currently considering a bill that would institute background checks on all gun purchases and punish those who buy weapons with the intention of turning them over to criminals.Obama also reiterated his calls for a ban on assault weapons, which is not included in the main legislation to be considered by Congress.Harry Reid, leader of the majority Democrats in the Senate, did not include the proposal in the bill because he felt it was unlikely to pass amid opposition from gun-rights advocates. However, an assault weapons ban will likely be voted on as an amendment to the main measure."There's absolutely no reason why we can't get this done," Obama said. "But the reason we're talking about it here today is because it's not done until it's done. And there are some powerful voices on the other side that are interested in running up a clock of changing the subject or drowning out the majority of the American people to prevent any of these reforms from happening at all."He called on Americans to remember the shooting in Newtown that left 20 children and six teachers dead just over three months ago, saying the tragedy should be turned into action."Shame on us if we've forgotten. I haven't forgotten those kids," he said.Obama's message coincided with the release of details of the police investigation into the Sandy Hook Elementary School shooting.First deathThe shooter, Adam Lanza, 20, killed his mother in the home they shared on 14 December, then went to the school in Newtown, Connecticut and turned his gun on children and teachers. The police documents show that he took his own life within five minutes of shooting his way into the building, Connecticut state attorney Stephen J Sedensky III said.Lanza used a single weapon - a Bushmaster .223-caliber rifle to kill the children and school employees, then used a Glock 10 millimetre handgun to kill himself, the records show. Investigators also found a loaded 12-gauge shotgun in the car he drove to the school and shotgun ammunition.Other details of the investigation reveal that Lanza had a gun safe in his bedroom and had received a Christmas card from his mother with a check inside for the purchase of a gun, according to a search warrant.Details of the investigation also said police interviewed a person who said that Lanza rarely left his home and was an avid gamer, who played the computer war game Call of Duty.A recent poll published by CNN shows public support for major restrictions on guns or making all guns illegal has declined from 52% immediately after the shooting to 43% now.

US flies stealth bombers over South Korea

The United States said two nuclear-capable B-2 stealth bombers flew "deterrence" missions over South Korea on Thursday, defying apocalyptic threats of retribution from North Korea against ongoing war games.The deployment of the stealth bombers was clearly meant to deliver a potent message to Pyongyang about the US commitment to defending South Korea against any aggression as military tensions on the Korean peninsula soar.It came shortly after the North severed its last-remaining military hotline with South Korea and put its rocket units on combat status with a threat to target US bases in the Pacific region.The two B-2s, from Whiteman Air Force base in Missouri, flew the 20 800km round-trip in a "single continuous mission", dropping dummy ordnance on a target range in the South, the US military said in a statement."This ... demonstrates the United States' ability to conduct long-range, precision strikes quickly and at will," the statement said.The bombers were participating in South Korean-US military exercises that have incensed North Korea, which has threatened to unleash a second Korean War and launch pre-emptive nuclear strikes on South Korea and the US mainland.US, South in new pact"The B-2 bomber is an important element of America's enduring and robust extended deterrence capability," the US statement said.Earlier on Thursday, US Defence Secretary Chuck Hagel told his South Korean counterpart that Seoul could rely on all the military protection the United States has to offer - nuclear, conventional and missile defence.The US and South Korean militaries signed a new pact last week, providing for a joint military response to even low-level provocation by North Korea.The use of the stealth bombers is sure to prompt a fresh outcry from Pyongyang, which has already denounced the use of US B-52 bombers in the joint exercises as a rehearsal for a nuclear strike.While most analysts have dismissed the bulk of the North Korean threats as rhetorical bluster, there are concerns that even a minor incident could swiftly escalate in such a volatile environment.In its latest protest at the military drills, North Korea announced on Wednesday that it was severing its military hotline with the South, saying it was no longer needed given that "war may break out any moment".Communication line severedThe joint drills are held every year and are regularly condemned by Pyongyang as rehearsals for invasion.Their staging this year came as tensions were already riding high following the North's long-range rocket launch in December and its nuclear test last month.The North has severed the military hotline before, most recently in March 2009, again in protest at the annual South Korean-US military exercises. In that case, the line was reconnected less than two weeks later.Several weeks ago North Korea severed a Red Cross hotline that had been used for government-to-government communications.Among other things, the military hotline was used on a daily basis to organise movement in and out of the Kaesong industrial complex - a joint South-North Korean venture established in 2004.The South Koreans used the line to give the North the names of those seeking entry to Kaesong, guaranteeing their safety as they crossed one of the world's most heavily militarised borders.The crossing was operating normally on Thursday, officials said, adding that they had had used a civilian link to get the names to the North Korean guards.North Korea has always been wary of allowing crises in inter-Korean relations to affect the zone, which lies 10km inside its side of the border and is a crucial hard-currency earner for the communist state.

Patient Cypriots queue as banks reopen

Cypriots queued calmly at banks as they reopened on Thursday under tight controls imposed on transactions to prevent a run on deposits after the government was forced to accept a stringent EU rescue package to avert bankruptcy. Banks were shut almost two weeks ago as the government negotiated a €10bn international bailout, the first in Europe's single currency zone to impose losses on bank depositors.Bank staff turned up for work early as cash was delivered by armoured trucks, and queues of at least a dozen people formed at branches in the capital, with uniformed security guards on duty.Doors opened at noon but initially at least there was no sign of any major run on the banks, as had been feared.A lot of money had already left electronically. Figures published by the Central Bank of Cyprus on Thursday showed that savers from other euro zone countries withdrew 18% of their deposits from the stricken island in February, as talk of a tax on bank accounts rose.Overall private sector bank deposits in Cyprus fell by 2.2% to €46.4bn last month, after a similar drop in January.Authorities say the emergency rules imposed to limit withdrawals and prevent a bank run will be temporary, initially for seven days, but economists say they will be difficult to lift as long as the economy is in crisis.The capital controls decree was taped to the windows of bank branches and staff handed out copies to customers. In Nicosia, there was relief, but some apprehension about what might happen."You've no idea how much I've been waiting for this," said 64-year-old pensioner Froso Kokikou, waiting in line at a branch of Cyprus Popular Bank, also known as Laiki."I feel a sense of fear and disappointment having to queue up like this; it feels like a Third World country, but what can you do?" Kokikou said. "This is what they imposed on us and we have to live with it."Kostas Nikolaou, a 60-year-old pensioner, said the uncertainty of the past two weeks had been "like a slow death".He added: "How can they tell you that you can't access your own money in the bank? It's our money, we are entitled to it."Many of those waiting in line were elderly people, who said they had run out of cash because they did not have bank cards.The Cyprus stock exchange said it would remain closed on Thursday.On international markets, German 10-year bond yields fell to their lowest level since August on fears of spill-over from the Cyprus crisis to other struggling euro zone members. Yields fell 2 basis points to 1.256%. Traders cited the risk that depositors in other countries could take fright at any signs of a run on deposits in Cyprus.Container trucks loaded with cash pulled up inside the compound of the central bank in the capital Nicosia on Wednesday night to prepare for the reopening, a central bank source said.As in all countries that use the euro, Cyprus's central bank supplies cash for its banks from the European Central Bank (ECB) in Frankfurt. Officials have promised that enough funds will be on hand to meet demand. The ECB did not comment on reports it had sent extra cash to the island.Cash LimitA finance ministry decree limited cash withdrawals to no more than €300 per day and banned the cashing of cheques.The island's central bank will review all commercial transactions over €5 000 and scrutinise transactions over €200 000 on an individual basis. People leaving Cyprus may take only €1 000 with them.A police source told Reuters that passengers leaving Cypriot airports were subject to extra searches. Officers had orders to confiscate cash above the €1 000 limit.With just 860 000 people, Cyprus has about €68bn in its banks a vastly outsized financial system that attracted deposits from foreigners, especially Russians, as an offshore haven but foundered when investments in neighbouring Greece went sour.The EU and International Monetary Fund (IMF) concluded that Cyprus could not afford a rescue unless it imposed losses on depositors, seen as anathema in previous euro zone bailouts.That view has angered Cypriots, whose foreign minister said his country was sacrificing too much for the bailout."Europe is pretending to help us but the price to pay is too high: nothing less than the brutal destruction of our economic model," Ioannis Kasoulides told the French newspaper Les Echos.‘Cyprus euro’Cyprus's financial difficulties have sent tremors through the already fragile single European currency. The imposition of capital controls has led economists to warn that a second-class "Cyprus euro" could emerge, with funds trapped on the island less valuable than euros that can be freely spent abroad. Reflecting fears of a spill-over, ratings agency Moody's said it kept euro zone strugglers Ireland and Portugal on negative outlook, citing the Cyprus bailout as an extra risk.The European Commission said the capital controls were legal and justified under EU law provided they were strictly temporary and proportionate. The EU executive said it would monitor "the need to extend the validity of or revise the measures".The bailout, agreed in Brussels on Monday, looks set to push Cyprus deeper into an economic slump, shrink the banking sector and cost thousands of jobs.Cyprus Popular Bank, the country's second biggest, will be closed and its guaranteed deposits of up to €100 000 transferred to the largest bank, Bank of Cyprus.Deposits of more than €100 000 at both banks, too big to enjoy a state guarantee, will be frozen, and some of those funds will be exchanged for shares issued by the banks to recapitalise them.While big depositors will lose money, the authorities say deposits up to €100 000 will be protected.