NEWS,25.07.2013

Protesters block gas drilling site

Protesters blocked access to a drilling site in southern England on Thursday as part of a campaign against the controversial "fracking" process used in shale gas exploration, illustrating the potential battle ahead for Britain's nascent shale industry.
Estimates have said Britain may have major shale reserves which could help reverse a rising dependency on energy imports, but the industry is having to tread carefully in order to reassure a sceptical public and vocal environmental lobby.
Cuadrilla Resources is readying a site to drill a well near the village of Balcombe in West Sussex. The well is a conventional one that will not use fracking, but Cuadrilla has fracked elsewhere, and is one of a handful of companies with access to shale acreage that might be fracked in future, and so its activities have become a target for anti-fracking protests.
A spokesman for the privately-owned company said on Thursday that protesters had stopped vehicles from accessing the site.
Hydraulic fracturing or fracking retrieves gas and oil trapped in tight layered rock formations by injecting high-pressure water, sand and chemicals.
The protest has been organised by campaign group 'Frack Off'. They fear that Cuadrilla, the only company to have fracked a well exploring for shale gas in Britain at its Lancashire site, could seek to frack in Sussex at a later date.
"We have tried other methods. We now have no choice but to take matters into our own hands and protect ourselves from the threat fracking poses to our health and environment," said protester Alex Griffiths in an email from Frack Off.
Drilling and fracking wells will in the next few years be critical to establish whether shale gas can be commercially produced in Britain, where fracking is controversial. It was banned for a year in 2011 after triggering small earthquakes, and concerns remain amongst environmental groups that chemicals used could reach water supplies.
The Cuadrilla spokesman said that the company hoped to begin drilling at the site early next week and that the vehicles were carrying parts for the drilling rig.
UK utility Centrica recently bought a quarter stake in Cuadrilla's northern England shale licences. French oil company Total has also said it would like to explore for shale gas in Britain.

Eurozone credit slump deepens

Loans to the euro zone's private sector shrank by more than expected in June, starving the economy of the funds needed to sustain recovery and piling pressure on the European Central Bank to take fresh action.
Loans to the private sector shrank by 1.6% from the same month a year ago, ECB data released on Thursday showed, a bigger fall than even the lowest forecast in a poll of economists, which gave a mid-range reading of -1.1%.
The latest weak lending figures highlight one of main obstacles to recovery in the eurozone, where purchasing manager indexes (PMI) showed private industry expanded for the first time in more than a year in July.
Lacklustre demand is dragging on the appetite for credit, while banks restrain lending to repair their balance sheets.
In a step to reviving lending to the bloc's struggling small and mid-sized businesses, the ECB said last week it would let banks use more of the assets once blamed for triggering the financial crisis as collateral for cheap loans.
Howard Archer, economist at Global Insight, said the weak lending figures heaped pressure on the ECB to do more.
"The further marked fall in lending to eurozone businesses in June maintains pressure on the ECB to come up with concrete measures aimed at improving credit availability to companies, especially small and medium-sized ones," he said.
"We think it is very possible that the ECB will eventually take its key policy rate down from 0.50% to 0.25% as we anticipate that the euro zone will continue to find it very tough to develop clear growth," he added.
The ECB holds a policy meeting next Thursday. No change in interest rates is expected.
An ECB survey released on Wednesday showed that eurozone banks, facing tougher capital requirements, tightened lending standards for both companies and home loans in the second quarter even though their access to funding eased.
Seeking to reassure markets unnerved by the US Federal Reserve's exit plan from money printing, the ECB said earlier this month it would keep interest rates at record lows for an extended period and may yet cut further.
ECB policymakers have since qualified this forward guidance, with Bundesbank chief Jens Weidmann said on July 11 the ECB had not "tied itself to the mast".
A poll of 70 economists published on Wednesday showed the ECB is probably done cutting interest rates but may still take other measures to stimulate an economy that may soon creep out of recession.
The survey was conducted before the PMI survey suggested the euro zone private sector grew this month for the first time since January 2012 news that will ease pressure on the ECB to further loosen monetary policy.
Banks granted non-financial firms €12bn ($16bn) less in loans in June than in the previous month, data adjusted for sales and securitisations showed, after a fall of €18bn in May.
Euro zone M3 money supply a more general measure of cash in the economy grew at an annual pace of 2.3% in June, slowing from 2.9% in May and below the consensus forecast of 3.0% in a poll of analysts.

EU lagging behind on 4G

EU member states should do more, and faster, to introduce next-generation 4G mobile phone services if Europe is to reap the benefits of the new technology.
About 75% of the European Union population of about 500 million has no access to 4G services, EU Digital Agenda Commissioner Neelie Kroes said on Thursday.
In stark contrast, in the United States more than 90% of the population had 4G access, she said.
Kroes said that of the 28 member states, three - Cyprus, Ireland and Malta - had no 4G at all while only Germany, Estonia and Sweden had advanced systems in place.
There was virtually no 4G coverage in rural areas across the EU, Kroes said, with the EU accounting for only five percent of global 4G connections.
"This is no way to run an economy. It means ... that Europeans living in rural areas and those on holiday get treated like second-class citizens," Kroes said.
"It doesn't matter where you are, you pay money for a device and mobile subscription and it should work."
4G operates five times faster than the current 3G network and allows users to download large e-mail attachments quickly, watch live television without buffering, make high-quality video calls and play live games on the go.
It is seen as the next essential step in the telecommunications revolution and Kroes has repeatedly lambasted EU countries for lagging behind.
Earlier this week, she said she had to reluctantly agree to delays in nine out of 14 member states who had committed to free up 800 megahertz bandwidth for 4G use by January this year but had failed to make the deadline.

Detroit bankruptcy hearings begin

A judge is considering what to do with challenges to Detroit's bankruptcy from retirees who claim their pensions are protected by the Michigan Constitution.

US Bankruptcy Judge Steven Rhodes settled into his chair shortly after  14:00 GMT. The city wants him to put a stop to lawsuits in other courts, especially after an Ingham County judge said state officials ignored the constitution and acted illegally in approving the bankruptcy last week.
The state appeals court temporarily stopped three lawsuits challenging the bankruptcy process on Tuesday.
As lawyers for some of the thousands of creditors arrived Wednesday, they passed protesters holding a banner saying: "Cancel Detroit's debt. The banks owe us."
The case is expected to last at least a year.

Britain's economy picks up speed

Britain's economy sped up between April and June on the back of stronger spending by consumers and businesses and giving a boost to the government less than two years before an election.
It came at the same time as a raft of UK company earnings reports showing growth picking up.
Gross domestic product rose 0.6% in the second quarter compared with the previous three months, in line with forecasts, preliminary data from the Office for National Statistics showed.
That was double the pace of growth in the first three months of the year but the economy still remains smaller than before the 2008-09 recession, suggesting to some economists that it still needs nurturing by the Bank of England.
The numbers were a boost for finance minister George Osborne, who has fended off calls from the International Monetary Fund and the opposition Labour party to spend more to speed up growth.
"Britain is holding its nerve, we are sticking to our plan, and the British economy is on the mend - but there is still a long way to go and I know things are still tough for families," Osborne said in a statement.
"So I will not let up in my determination to make sure we put right all that went wrong in our economy."
Growing signs of a pick-up in the British economy have coincided with a narrowing of Labour's lead over the Conservatives in some opinion polls.
The recovery also comes as other countries in Europe are struggling to show any growth at all.
Compared with a year earlier, Britain's economy expanded 1.4%, faster than 0.3% in the first quarter. It was the fastest increase since early 2011 although it was boosted by an extra working day in the April-June period this year.
Sterling weakened after the data and British government bond prices pared losses as some investors had been betting on stronger growth which would have reduced further the chance of the Bank of England pumping more money into the economy.
It was the first time that all sectors of the economy  agriculture, production, construction and services - grew since the third quarter of 2010.
The Bank of England's new governor, Mark Carney, may see the data as a sign that the economy is edging closer to what he has termed "escape velocity" or sustainable growth, though he is still likely to judge it needs extra help to get there.
From next month, Carney is widely expected to start providing detailed guidance on how long interest rates will remain low, in an effort to encourage consumers to spend and businesses to borrow and invest.
Still smaller
Britain's economy remains 3.3% smaller than in the first quarter of 2008 which was its peak before the financial crisis plunged the country into recession, tempering the good news about the growth in the second quarter.
"This confirms our view that we are heading down the road to recovery, even if there are likely to still be a few bumps ahead," said Neil Bentley, deputy director-general of British employers group CBI.
"Underlying conditions are quite weak as consumers are still saddled with debt and despite the global economy picking up, the potential for getting knocked off course remains."
Thursday's data showed that output in Britain's service sector - which makes up 78% of GDP - rose by 0.6% in the second quarter after ticking up 0.5% in the first three months of the year.
Services provided the strongest contribution to overall growth, adding 0.5 percentage points, with the retail, hotels and restaurants and the business services and finance components accounting for the bulk of the increase.
Industrial output was 0.6 percent higher while construction - which now accounts for around 6% of GDP after shrinking sharply after the financial crisis - expanded by 0.9%.
Upbeat company news reinforced the sense of an economy on the mend. Telecoms operator BT, for example, posted first quarter profits comfortably ahead of forecasts driven in part by a good performance from the retail division.
Improving construction and housing markets helped two of the biggest trade suppliers, Travis Perkins and Howden Joinery post increased first-half profits.
Consumers, a key engine of Britain's economy, are perking up too. They are now more optimistic about the economy than at any point since April 2010, as measured by a new consumer confidence index by market researchers YouGov and the Centre for Economics and Business Research.
The ONS's preliminary estimates of GDP are among the first released in the European Union, and are based partly on estimated data. On average, they are revised by 0.1 percentage points up or down by the time a second revision is published two months later, but bigger moves are not uncommon.

Obama: Our economy can be stronger

US President Barack Obama sought to inject momentum into his economic and domestic policy agenda on Wednesday with a speech designed to clarify his vision for his second term and hammer Republicans in the House of Representatives for getting in his way.
Obama defended his government's record managing the economy through the recession in his first term and said new spending on infrastructure and education were needed now to grow the middle class, which he argued would boost the nation's economy.
"As Washington prepares to enter another budget debate, the stakes for our middle class could not be higher," Obama said in remarks prepared for a crowd of cheering supporters in a gymnasium at Knox College in Galesburg, Illinois.
Galesburg left a lasting impression on Obama, a former Illinois state senator, early in his political career when the town struggled after it lost its factories.
Obama faces a battle this fall with Republicans in Congress over the budget and raising the debt ceiling.
While the president wants to increase investment in areas he argues would spur economic growth, Republicans want to cut spending and try to force the administration to scale back its signature healthcare program.
"We'll need Republicans in Congress to set aside short-term politics and work with me to find common ground," Obama said.
"It may seem hard today, but if we are willing to take a few bold steps - if Washington will just shake off its complacency and set aside the kind of slash-and-burn partisanship we've seen these past few years  our economy will be stronger a year from now," he said.
Obama plans to expound on his ideas in speeches across the country in the weeks ahead. His address on Wednesday did not include major new policy proposals, but new ideas are expected to be sprinkled in future remarks.
Obama has said he doesn't believe his speech will change minds in Congress, but he hopes to reach their constituents to exert pressure on lawmakers from their home states.
The buildup to Obama's speech has been relentless, as the White House seeks to get past a rough start to his second term, which has been dominated by a series of thorny domestic and foreign issues.
An early push to toughen gun laws failed in Congress, and the Republican-led House of Representatives has said it will not move ahead on sweeping immigration reforms passed by the Senate.
The White House has also been thrown off-message by controversies over phone and internet surveillance, and over the Internal Revenue Service's targeting of conservatives groups seeking tax-exempt status.
Republicans dismissed the speech as being long on rhetoric and short on ideas.
"Americans aren't asking the question 'where are the speeches?' They're asking 'where are the jobs?'" said John Boehner, Speaker of the House of Representatives.

Don't discount the EU

THE 6th South Africa-European Union (EU) summit was held on July 18 and this was, perhaps, well overdue. Tensions between South Africa and the EU have been high since South Africa joined the Brics bloc, comprising Brazil, Russia, India, China and South Africa.

The theme of the summit was ‘Job creation through inward investment’ and aptly so, since several European countries, along with South Africa, are battling unemployment.

The situation worsened through European investors being wary of developments in South Africa after the country cut bilateral investment treaties with Belgium, Luxembourg and Spain and will do so with a total of roughly 12 EU countries.

South Africa’s joining of the Brics and the cutting of bilateral investment treaties has raised fears that these moves will be at the expense of its long-standing ties to Europe’s developed economies.

As an economic region, the EU remains South Africa's leading trade partner and, perhaps even more importantly, three-quarters of our foreign direct investment (FDI) stock originates from the EU.

Given the traditionally and current strong ties between us and the EU, any changes in the EU can consequently have a significant impact on the local economy.

For example, if the EU can turn around its 18 months of economic contraction, South African exports to the region might start to increase again and its contribution toward FDI might become even more substantial.

On the other hand, EU regulations impacting our exports to the region can just as easily hinder local manufacturers and exacerbate the trade deficit.

For example, in the week before the summit, the EU notified the World Trade Organisation (WTO) of a draft commission regulation on food.

As one of our major exports to the EU, this regulation will affect far more than just the agricultural sector. Consider the minimum wage for farmworkers, the rising petrol price and now the mandatory compliance to this regulation.

These costs, of whatever nature, all contribute to the already struggling economy through impacting the farmers and workers, the packaging, distribution and export companies.

The difference among the three costs (wages, petrol and regulation) is that we have a say in what the final EU regulation looks like. In other words, before the regulation comes into effect, we are allowed to review and comment on the draft regulation.

If the comments are of a national interest, the department of trade and industry takes a national stance on the regulation and engages the EU through the WTO. This formally initiates a dispute in the WTO.

If the consultations prove fruitless after 60 days, South Africa can request adjudication by a panel.

While it appears as though we are moving to favour the Brics nations, we cannot simply ignore developments in the EU.

Should it recover from its current slump, the EU still offers a significant market for our exports and a large source of investment for our development.