NEWS,07.04.2013

French minister confirms 0.1% growth

French Finance Minister Pierre Moscovici said Sunday that France's economy was expected to grow just 0.1% this year, revising downward an official target as the country struggles to get back on its feet.

The French government had initially forecast 0.8% growth in 2013 for the eurozone's second largest economy, which continues to battle rising unemployment, stagnant growth and a stubborn budget deficit.

Speaking on Europe 1 radio, Moscovici also predicted growth for 2014 at around 1.2%.

For 2015, "I think French growth will get back to a cruising speed that will enable it to create jobs," he said, pointing to an expected growth of 2%.

His 2013 prediction confirms those already made by the European Commission and Organisation for Economic Cooperation and Development, which both forecast that the French economy would manage to grow by just 0.1% this year.

Moscovici already said last week that he "feared" growth in France would be around that figure, and Sunday's announcement confirmed this.

Last month, French President Francois Hollande insisted that the country's promised turnaround was still on course, despite near record unemployment, a drop in household purchasing power and thousands of layoffs.

Offshore accounts data reveal crimes

A trove of data obtained by a US-based journalists' group that details thousands of offshore accounts reveals several instances of swindles and other financial crimes, The Washington Post newspaper reported Sunday.

Among the 4 000 US individuals listed in the records, at least 30 were American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct, the report said.

They include billionaire hedge fund manager Raj Rajaratnam, who was convicted in 2011 in one of the biggest insider trading scandals in US history, and Paul Bilzerian, who was convicted of securities fraud, the paper noted.

The report was the latest by prominent newspapers around the world which were given copies of the data for scrutiny by the Washington-based International Consortium of Investigative Journalists.

The head of the ICIJ, Gerard Ryle, obtained the data, involving 2.5 million records of more than 120 000 companies and trusts set up by two offshore companies operating in the British Virgin Islands and in Asia and the South Pacific, on a hard drive after investigating a fraud and offshore haven case in Australia.

Several newspapers, including France's Le Monde and Britain's Guardian, have been publishing revelations based on the data.

The Washington Post's report said the records contained information on at least 23 companies linked to an alleged $230m tax fraud in Russia that was investigated by a Moscow-based lawyer named Sergei Magnitsky.

After Magnitsky informed Russian authorities of his findings, he was accused of fraud himself and thrown in prison, where he died in 2009 under suspicious circumstances.

One of the companies mentioned in the records was used to set up Swiss bank accounts, into which the husband of a Russian tax official deposited millions in cash, the paper said.

Today, there are between 50 and 60 offshore financial centers around the world holding billions of dollars at a time of historic US deficits and budget cuts, The Washington Post said.

Groups that monitor tax issues estimate that between $8 trillion and $32 trillion in private global wealth is parked offshore, according to the paper.

According to fraud experts, offshore bank accounts and companies are vital to those wishing to conceal complex financial crimes.

For example, Allen Stanford, who ran a $7bn Ponzi scheme, used a bank he controlled in Antigua, The Post noted.

And Bernard Madoff, who ran the largest Ponzi scheme in US history, used a series of offshore "feeder funds" to fuel the growth of his scam.

The Washington Post quoted a top official in the US Justice Department's fraud section, Paul Pelletier, as saying US owners of offshore accounts were sometimes trying to hide money from US tax authorities, law enforcement or regulators.

"As a prosecutor, it was very difficult pursuing these people," he said.

Italy to pay €40bn owed to business

The Italian government on Saturday gave its go-ahead for a bill to repay €40bn in debts owed to the private sector over the next 12 months in a bid to stimulate growth.

"The cabinet meeting today approved an urgent decree to pay back the debts of the public sector to the private sector," Prime Minister Mario Monti told a press conference after the talks.

US preparing for possible N Korea actions

The top US military officer said on Sunday the Pentagon had bolstered its missile defences and taken other steps because he "can't take the chance" that North Korea won't soon engage in some military action.
Heightened tensions with North Korea led the United States to postpone congressional testimony by the chief US commander in South Korea and delay an intercontinental ballistic missile test from a West Coast base.
North Korea, after weeks of war threats and other efforts to punish South Korea and the US for joint military drills, has told other nations that it will be unable to guarantee diplomats' safety in the North's capital beginning Wednesday.
US General Martin Dempsey, the Joint Chiefs of Staff chair who just wrapped up a visit to Afghanistan, was asked in an Associated Press interview whether he foresees North Korea taking military action soon.
"No, but I can't take the chance that it won't," he said, explaining why the Pentagon has strengthened missile defences and made other decisions to combat the potential threat.
Dempsey said the US has been preparing for further provocations or action, "considering the risk that they may choose to do something" on one of two nationally important anniversaries in April - the birth of North Korean founder Kim Il Sung and the creation of the North Korean army.
US General James Thurman, the commander of the 28 000 American troops in South Korea, will stay in Seoul as "a prudent measure" rather than travel to Washington to appear this coming week before congressional committees, Army Colonel Amy Hannah said in an e-mail on Sunday to the AP.
Thurman has asked the Senate Armed Services Committee, the House Armed Services Committee, and the House Appropriations subcommittee on defence to excuse his absence until he can testify at a later date.
Dempsey said he had consulted with Thurman about the rising tensions on the Korean peninsula.
Missile test

The Pentagon has postponed an intercontinental ballistic missile test that was set for the coming week at Vandenberg Air Force Base in California, a senior defence official told the AP on Saturday.

The official said US Defence Secretary Chuck Hagel decided to put off the long-planned Minuteman 3 test because of concerns the launch could be misinterpreted and exacerbate the Korean crisis. Hagel made the decision on Friday, the official said.
North Korea's military said this past week that it was authorised to attack the US using "smaller, lighter and diversified" nuclear weapons.
North Korea also conducted a nuclear test in February and in December launched a long-range rocket that could potentially hit the continental US.
The US has moved two of the Navy's missile-defence ships closer to the Korean peninsula, and a land-based system is being deployed to the Pacific territory of Guam later this month. The Pentagon last month announced longer-term plans to strengthen its US-based missile defences.

Citing North Korea's suggestion that diplomats leave the country, South Korean President Park Geun-hye's national security director said the North may be planning a missile launch or another provocation around Wednesday, according to presidential spokesperson Kim Haing.

In Washington, an adviser to President Barack Obama said "we wouldn't be surprised if they did a test. They've done that in the past."

US Senator John McCain said the North's young leader, Kim Jong Un, is playing a game of brinksmanship.

"In the past we have seen this repetitious confrontation, negotiation, incentives to North Korea to better behave, hopes that they will abandon their nuclear quest - which they never will, otherwise, they'd be totally irrelevant," McCain told CBS's Face the Nation.
"And so we've seen the cycle over and over and over again, for last 20 or 30 years. They confront. There's crisis. Then we offer them incentives - food, money. While meanwhile the most repressive and oppressive regime on earth continues to function," he added.
McCain said China "does hold the key to this problem. China can cut off their economy if they want to."

Israel Holocaust memorial day begins

Israel's annual memorial day for the 6 million Jews killed in the Holocaust has begun with a ceremony marking 70 years since the Warsaw ghetto uprising.
The uprising has come to symbolize Jewish resistance against the Nazis in World War II.
Sunday's main ceremony was taking place at Yad Vashem, Israel's official Holocaust memorial. Israel's president and its prime minister were set to speak before hundreds of Holocaust survivors and their families, Israeli leaders, diplomats and others.
The Israeli flag flew at half-staff, and a military honour guard stood at one side of the podium as poems and psalms were read and the Jewish prayer for the dead was recited.
The annual Holocaust memorial day is one of the most solemn on Israel's calendar.

Acting president fears death plot

Venezuela's acting president Nicolas Maduro has accused former US officials Roger Noriega and Otto Reich of plotting to kill him to prevent his victory in next week's presidential elections.
Speaking at a televised campaign event on Saturday, Maduro said the plot also involved "right-wing forces" from El Salvador, which had already dispatched paid assassins to Venezuela to implement the plan.
"Their goal is to kill me," said Maduro, who had been designated by the late Venezuelan leader Hugo Chavez as his heir apparent. "They want to kill me because they know they cannot win free and fair elections."
A presidential election to replace Chavez, who died of cancer last month, will be held on 14 April.
Maduro said part of the plot also involved sabotaging the nation's electrical grid.
Parts of oil-rich Venezuela suffer from regular power outages, a problem opposition leader Henrique Capriles had seized upon to criticise the socialist government that Chavez led for 14 years until his death on 5 March.
On Thursday, Maduro also accused the opposition of plotting to sabotage the national power grid to cause a blackout ahead of the election.
A conservative Mexican-American, Roger Noriega served as US Permanent Representative to the Organization of American States (OAS) from 2001 to 2003.
Otto Reich, a Cuban-American, was the US president's special envoy for the Western Hemisphere, assistant secretary of state and US ambassador to Venezuela.
While vocal critics of Venezuelan policies, both have repeatedly denied any involvement in Venezuelan affairs.

UK wants to change welfare system

Prime Minister David Cameron said on Sunday that Britain's welfare system had "lost its way" and become a "lifestyle choice", amid a raging debate on government cutbacks to state handouts.
Cameron's Conservative-Liberal coalition government, trying to rein in the national budget deficit, is bringing in a series of changes to the system this month - in the face of bitter opposition from the Labour Party.
The debate has been fuelled by the case of Mick Philpott, a nationally notorious welfare-dependent father of 18, who was jailed last week for the manslaughter of six children in setting fire to his own house.
Conservative finance minister George Osborne was blasted by Labour in unusually fierce terms when, asked whether Philpott was a product of the welfare system, he suggested there needed to be a debate about whether taxpayers should be subsidising lifestyles like his.
Opposition Labour finance spokesperson Ed Balls said for Osborne "to link this wider debate to this shocking crime is nasty and divisive and demeans his office".
Writing in The Sun newspaper, Cameron launched a staunch defence of the welfare shake-up, which includes capping the amount a household can claim at national average earnings.
Backfiring
He suggested it was "crazy" that welfare claimants could have a bigger income than workers.
The Conservative leader suggested that a system originally designed to protect the frail and be a "stopgap" was now backfiring.
"It was invented to help people escape poverty, but has trapped too many people in it. It was meant to be a stopgap in hard times, but has become a lifestyle choice for some. It was designed to bring us together, but is causing resentment," he said.
"No-one wants to work hard every day and see their hard-earned taxes being used to fund things they themselves cannot afford or keep generations dependent on welfare.
"So this month we are making some big changes. They are changes that have a simple principle at their heart: we are restoring the fairness that should lie at the very heart of our tax and welfare systems.
"We are saying to each and every hard-working person in our country: we are on your side."
The debate has set not only politicians at each other's throats but also newspapers and commentators of opposing political stripes.
Meanwhile a YouGov opinion poll for The Sun found that six out of 10 voters thought welfare handouts were too generous.
About 67% said the system needed an overhaul while 79% back the government's move to limit a family's welfare payments to 26 000 pounds a year - the average working family income.