NEWS,05 AND 06.04.2013

Obama to offer entitlement cuts in budget

President Barack Obama will make key concessions to Republican foes next week when he unveils his US budget that proposes cuts to cherished entitlement programs, the White House said on Friday.
Obama's fiscal blueprint slashes the deficit by $1.8 trillion over 10 years, in what a senior administration official described as a "compromise offer" that cuts federal spending, finds savings in Social Security, and raises tax revenue from the wealthy.
Republicans led by House Speaker John Boehner are widely opposed to any new tax hikes, after the president secured $600bn in increased tax revenue in a year-end deal.
But Obama's concession to conservatives in the form of reduced cost-of-living payouts for Social Security benefits could revive consideration of a deficit-reducing "grand bargain" that has proved elusive in recent years.
Such cuts to public pension programmes and public health insurance for the elderly - seen as sacred cows for Obama's Democrats  have been longstanding demands of Republicans.
"While this is not the president's ideal deficit reduction plan, and there are particular proposals in this plan like the CPI (consumer price index) change that were key Republican requests and not the president's preferred approach, this is a compromise proposal built on common ground," the administration official said.
The president is willing to "do tough things to reduce the deficit," but only in the context of a package that includes new revenues from the wealthy, the official added.
"This isn't about political horse trading; it's about reducing the deficit in a balanced way that economists say is best for the economy and job creation."
Obama's new revenues will draw in part from capping retirement savings plans for millionaires, and closing some loopholes that benefit the rich.
The annual budget deficit is projected at 5.5% of gross domestic product for the fiscal year ending in September. Under the Obama budget, that would decline to 1.7% of GDP by 2023.
Combined with the $2.5 trillion in savings already achieved since negotiations in 2010, the Obama budget would bring total deficit reduction to $4.3 trillion over 10 years, slightly higher than the overall goal agreed to by both parties for stabilizing the national debt.
Boehner offered a lukewarm reaction to the plan.
"One of the best things President Obama can do is follow the House and outline a balanced budget next week  one that includes entitlement reforms that are not conditional on enactment of more tax increases, which will suppress growth instead of encourage it," Boehner said in a statement.

Petrol price fixing probe ends - report

Prosecutors in Italy have wrapped up a probe triggered by suspicions that the country's steep petrol prices were the result of manipulation by several large oil firms, media reported Friday.
The results of the investigation into seven companies - ENI, Shell, Esso, Total ERG, Tamoil, Q8 and API - have been sent to legal authorities in Rome and Milan for possible further action.
Italian motorists pay the highest prices at the pump in the European Union, according to the European Commission's directorate general for energy.
The newspaper La Stampa said the Varese prosecutor's office in northern Italy, which conducted the probe at the urging of a consumer group, suspected the oil companies of "carrying out speculative moves to boost the price of fuel at the pump".
But the head of Italy's biggest oil company ENI, Paolo Scaroni, told reporters on Friday the probe was just the latest official scrutiny of what he described as unavoidably high petrol prices.
"There are several reasons fuel prices in Italy are higher than elsewhere in Europe. To name just one, there are 24 000 service stations in Italy compared with 9 000 in Britain with a total equivalent consumption, so these service stations, in Italy, need a bigger margin" to achieve profitability, he said.
He also cited reduced station opening hours, and noted that Italian service stations cannot sell other items, such as newspapers or cigarettes, to augment revenues.
"There is nothing underhanded," he said.
The average price for unleaded petrol in Italy at the end of 2012 was €1.75 per litre ($8.60 per gallon), according to the European Commission's directorate general for energy.
That compared with €1.50 per litre in France, €1.56 per litre in Germany, and €1.63 per litre in Britain, the data showed, according to the Commission's Eurostat statistics office.

Panicked Cypriots queue at banks

Panicked Cypriots queued outside banks on Friday on rumours that a new levy would be imposed on deposits as part of a bailout, but the authorities moved quickly to assure them this was not the case.
Cyprus wrapped up talks this week paving the way for the €10bn ($13bn) bailout from EU-led lenders, but fears swirled that it was still well short of the €5.8bn to fund its end of the deal.
As the speculation spread on Friday morning, customers formed long queues outside some of the larger branches of the Co-op bank, prompting the government to issue a denial of the reports as "unjustified" and "groundless".
"Such an issue was never tabled or discussed, therefore we categorically state that no such issue exists, not even as an intention," said the finance ministry.
"The memorandum has been agreed with the troika and it does not include any additional measure that leads to the need to implement any new haircut on deposits," it said, referring to the EU, European Central Bank and IMF.
The ministry said the measures agreed by the Eurogroup on March 25 for restructuring the Cypriot banking sector were being implemented and the system was "on track towards stabilisation and consolidation".
The central bank also denied reports of any plans to introduce a "general" haircut of deposits to pay for the conversion of uninsured deposits above €100 000 into shares in the island's biggest lender, the Bank of Cyprus (BoC).
"We refute this because such an action is not provided for in the policy decisions taken by the Eurogroup," it said in a statement.
The supervisory authority for the Co-op societies also warned anxious customers to ignore "slanderous rumours" being spread by text messages that a haircut on deposits was imminent.
Under the deal to downsize the banking sector, large BoC depositors could lose all of the remaining 60% of their balances over 100,000 euros depending on the costs of winding up and merging second-largest lender Laiki.
Savers in that bank will have to wait for years to see any of their cash over €100 000.
Banks have been operating under stringent capital controls since they reopened last week, after a near two-week lockdown prompted by fears of a run on deposits.

Global miners to hire more staff

Despite the unpredictability of the global mining industry, the prospect of hiring more staff is on the cards, according to a survey by Pedersen & Partners.

From the 160 companies surveyed across the sector, 33% indicated that they will be hiring more staff, while 50% said they will maintain their work force.

The results show that:

• 28% indicate they will be hiring new employees,
• 5% indicate they will be bringing back staff that were laid off,
• 50% will maintain their current staffing levels, and
• 15% suggest they will be restructuring.

The survey noted that the overall perception is that miners appear to be cautiously optimistic with most firms predicting that 2013 will be very similar to last year or improving somewhat.

However, it was not all good news, several small mining firms with market caps below $10m will not survive through the next year, the survey stated.

"Those with proven projects and strong management reputations may be subject to acquisitions or find more fluid funding through private equity, streaming, flow through shares and eventually, some institutional financing."

According to respondents 47% expect mergers and acquisitions to be a part of their growth strategy this year, while 31% said it will be considered for the right opportunity and 22% ruled it out altogether.

The last five years have been a turbulent time for mines with the global recession, operational restructurings, production cuts as well as expenditure reduction. This resulted in flagging confidence in the mining sector.

Mining in SA

The mining sector in South Africa, which is the backbone of the economy, has faced several challenges in recent months, including proposed job cuts, a series of wildcat strikes and the Marikana massacre in which more than 44 people died.

Data released by Statistics South Africa in March showed that total mining production was 3.1% lower in 2012 compared with 2011.

Finance Minister Pravin Gordhan stated in his National Budget speech in February that mine strife resulted in a revenue shortfall of R16.3bn, estimated to be 5.2% of the 2012/13 gross domestic product.

However, Mines Minister Susan Shabangu said in February that the country is committed to a strong mining industry, adding that the industry had grown from 993 mines in 2004 to almost 1 600 mines.

"We will continue to ensure that an enabling environment is created, while at the same time developing an environment that is responsive to the changing global economic environment and the dynamism of the contemporary mining industry," she said.

US trade deficit shrinks to $43bn

The US trade deficit edged lower in February after a big jump in January, government data released Friday showed.
The commerce department reported the trade gap shrank to $43bn, down from the revised $44.7bn in January.
The decline, which came after a large 16.7% deficit increase in January, surprised analysts who had projected a deficit of $44.7bn.
US exports grew 0.8 percent to $186bn, strengthened by the exports of industrial goods (up 4.5%) and automobiles (up 1.6%).
Meanwhile, US imports held steady at $228.9bn.
US imports of crude oil, which represent more than 10% of imported goods by the US, dropped 5.6% to $23.6bn.
But US imports of foreign automobiles rose 4.6% between January and February to reach $24.8bn.
On a 12-month basis, the US trade deficit has dropped by 3.5%.

Ireland slowly recovering

Ireland's central bank said on Friday the country's gradual economic recovery was broadly on track, barely changing its growth forecasts but warning the government it could not afford to ease back on its austerity programme.
It predicted gross domestic product would expand by 1.2%, a touch below the 1.3% foreseen three months ago, and kept its 2014 growth forecast at 2.5%.
Bailed out in late 2010, Ireland has been one of the few eurozone economies to grow over the past two years and closed in on weaning itself off emergency assistance last month by raising €5bn ($6.42bn) in a landmark 10-year bond sale.
The International Monetary Fund (IMF), one of Ireland's bailout lenders, struck a similar note on Wednesday when it said the economy would grow by 1.1% this year, the first time in six quarterly reviews it has not marked down its view for 2013.
However like the IMF, which cautioned that Ireland's gradual recovery remained highly uncertain, the central bank said its medium-term assessment for the export-focused economy relied on a pick-up in external demand from the second half of 2013.
"The gradual recovery of the Irish economy is continuing," the central bank said in its latest quarterly review.
"The prospects for such a recovery must be treated with some caution, however, given the high degree of uncertainty regarding the near-term outlook for world demand."
The bank said that while recent surveys, particularly in consumer sentiment, pointed to an easing in the rate of decline in the eurozone, the bloc was facing a delayed emergence from recession, and that would have knock-on effects for Ireland.
Export growth - driven completely by the booming services industry - would fall to 2.5% this year as a result, down on the 3% expected in January, while expansion in 2014 was marked down by just under the same amount to 5%.
That should be mostly offset by a lower than previously expected drop of 0.2% in consumer spending this year and slightly quicker rise of 0.4% in 2014. The fall in domestic demand may, finally, be nearing an end, the bank said.
With any growth in the domestic economy slight at best, unemployment is still forecast to fall only slightly, to 13.9% next year even though the estimated rate fell to 14% over the last two months.
The bank added that while unemployment rates for those with the lowest levels of education were around four times higher than those with third-level qualifications, in absolute terms the majority of the unemployed come from higher education.
It gave a cool reception to the government's promise to voters of a 20% reduction in the €5.1bn of austerity measures planned by 2015, following a deal struck with the European Central Bank to ease its the burden of its bank-assumed debt.
"Full implementation of the announced budget measures remains essential to preserve market confidence and to keep a buffer against negative shocks," the bank said.

Germans back Merkel's crisis management

A new poll shows Germans widely approve of Chancellor Angela Merkel's crisis management following a bailout deal for Cyprus, suggesting it remains a key asset for the leader as she prepares to seek a third term in elections in September.

The poll for ARD television published on Friday also showed Merkel's popularity riding high and that of centre-left challenger Peer Steinbrueck, who had a gaffe-strewn start to his campaign, sinking further.
But, although Merkel's conservative bloc is easily the biggest single party, it gave neither Merkel's current centre-right coalition nor the combination of Steinbrueck's Social Democrats and the Greens a parliamentary majority.
Merkel's hard-nosed handling of the debt crisis has long been popular at home, though many in the nations that have been bailed out resent the austerity and reform policies attached to the deals.
The poll of 1 002 people, conducted on Tuesday and Wednesday, found 65% agreed that Merkel has "acted correctly and decisively in the euro crisis”.
Only 33% thought that the German government thinks too little about the well-being of people in crisis-hit countries as it works to rescue the euro.
Fifty percent said it was right that investors and bank depositors in Cyprus had to contribute to the bailout for the small island nation.
Merkel's government was insistent that large depositors should help pay, but was criticised by Germany's opposition for initially accepting a short-lived plan that would have involved a levy on small deposits as well.
The survey found that 68% were satisfied with Merkel's work, unchanged from last month, and that Finance Minister Wolfgang Schaeuble was close behind, with 63%. But Steinbrueck's rating was down four points to 32%.
Still, the survey pointed to one risk for Merkel: It found that 75% of respondents believed the worst of the euro crisis is still to come.
Germany's economy so far has been relatively unscathed by the crisis, even as several countries suffer recessions.
A new group calling itself Alternative for Germany, which advocates scrapping the euro in its current form, plans to launch itself as a party on 14 April and run in the 22 September elections.
It's unclear whether it will be able to make any impact; another party, the Free Voters, has failed to make any inroads with a more moderate platform of opposition to the current bailout policies.
The ARD poll gave a margin of error of plus or minus up to 3.1 points.

North Korea advises diplomats to leave

Foreign diplomats in Pyongyang huddled on Saturday to discuss a North Korean evacuation advisory as concerns grew that the isolated state was preparing a missile launch at a time of soaring nuclear tensions.
The heads of all EU missions had agreed to meet to hammer out a common position after Pyongyang warned embassies it would be unable to guarantee their safety if a conflict broke out and that they should consider leaving.
Most of their governments made it clear they had no plans to withdraw any personnel, and some suggested the advisory was a ruse to fuel growing global anxiety over the current crisis on the Korean peninsula.
"We believe they have taken this step as part of their country's rhetoric that the US poses a threat to them," a British Foreign Office spokesperson said in London.
Missiles
The embassy warning coincided with reports that North Korea had loaded two intermediate-range missiles on mobile launchers and hidden them in underground facilities near its east coast.
"The North is apparently intent on firing the missiles without prior warning," the South's Yonhap news agency quoted a senior government official as saying.
They were reported to be Musudan missiles, which have never been tested, but are believed to have a range of around 3 000km, which could theoretically be pushed to 4 000km with a light payload.
That would cover any target in South Korea and Japan, and possibly even reach US military bases located on the Pacific island of Guam.
The White House said on Friday it "would not be surprised" by a missile test.
"We have seen them launch missiles in the past.... And it would fit their current pattern of bellicose, unhelpful and unconstructive rhetoric and actions," White House spokesperson Jay Carney said.
'Provocative act'
The Pentagon warned any such test would be "a provocative act", with spokesperson George Little urging Pyongyang to "follow international norms and abide by their commitments".
North Korea, incensed by UN sanctions and South Korea-US military drills, has issued a series of apocalyptic threats of nuclear war in recent weeks.
The North has no proven inter-continental ballistic missile capability that would enable it to strike more distant US targets, and many experts say it is unlikely it can even mount a nuclear warhead on a mid-range missile.
Nevertheless, the international community is becoming increasingly skittish that, with tensions showing no sign of de-escalating, there is a real risk of the situation spiralling out of control.
The latest expression of concern came from Communist icon Fidel Castro, who warned the danger of a nuclear conflict erupting was higher than it had been at any time since the 1962 Cuban missile crisis.
If war broke out on the Korean peninsula, "there would be a terrible slaughter of people", Castro wrote in a front-page article in Granma, the Cuban Communist Party's newspaper.
UN won't withdraw
The United Nations said it had no plans to pull staff out after the North Korean warning message to embassies and NGOs in Pyongyang.
Spokesperson Martin Nesirky said UN chief Ban Ki-moon was "studying the message," and added that UN staff "remain engaged in their humanitarian and developmental work" throughout North Korea.
According to the British Foreign office, embassies and organisations were told to inform the Pyongyang authorities by 10 April what assistance they would require should they wish to evacuate.
"Our understanding is that the North Koreans were asking whether embassies are intending to leave, rather than advising them to leave," the spokesperson said.
Russian Foreign Minister Sergei Lavrov said Moscow was consulting with China over the warning, as well as the United States and other members of the stalled six-party talks on North Korea.
In South Korea, a Navy official told Yonhap that two Aegis destroyers with advance radar systems had been deployed - one off the east coast and one off the west coast - to track any missile launch.
North Korea refused on Saturday to lift a ban on South Koreans accessing their companies in a joint industrial zone on the North side of the border.
Entry to the Seoul-funded Kaesong complex has been barred since Wednesday.

Castro urges calm in North Korean crisis

Communist icon Fidel Castro on Friday called on North Korea and the United States to avoid confrontation and reminded both sides of their "duties" towards peace.

"If a war breaks out there, there would be a terrible slaughter of people" in both North and South Korea "with no benefit for either of them”, Castro wrote in a front-page article in Granma, the Communist Party's newspaper.
Now that the North Korean government "has demonstrated its technical and scientific advances, we remind them of their duties with those countries that have been their great friends."
Castro urged North Korea to remember that "such a war would affect... more than 70% of the planet's population”, and decried "the gravity of such an incredible and absurd event" in such a densely populated region.
Castro said the present crisis presents the most serious risk of a nuclear war since the 1962 Cuban missile crisis, a two-week standoff between the United States and the Soviet Union over placing nuclear missiles in Cuba.
The "duty" to avoid the conflict is also in the hands of Washington "and of the people of the United States”, Castro said.
If a war breaks out, President Barack Obama's second term "would be buried in a deluge of images that would portray him as the most sinister personality in the history of the United States."
Castro, 86, handed over power to his brother Raul in 2006 but remains influential in Cuba and among leftists worldwide.
Meeting Kim Il-Sung
In his article, the Cuban leader recalled "the honour" of meeting Kim Il-Sung, the founder of the North Korean regime and grandfather to current leader Kim Jong-un.
The late North Korean leader, who died in 1994, was a "historic figure, notably brave and revolutionary," Castro wrote.
Castro also wrote that North Korea "has always been friendly with Cuba, as Cuba has been always and will continue to be" friendly with North Korea.
Castro writes an occasional column titled "Reflections of Comrade Fidel" that runs in state media. This is his first column since June 2012.
North Korea, incensed by UN sanctions and South Korea-US military drills, has issued a series of apocalyptic threats of nuclear war in recent weeks.
On Thursday the North Korean army said it had received final approval for military action, possibly involving nuclear weapons, against the threat posed by US B-52 and B-2 stealth bombers taking part in the joint drills.

NEWS,16.12.2012

Venezuelan elections a test for Chavez

Venezuelans are choosing governors and state lawmakers on Sunday in elections that have become a key test of whether President Hugo Chavez's movement can endure if the leader leaves the political stage.Voters in some areas of Caracas were awakened before dawn by fireworks and reveille blaring from speakers mounted on trucks. But turnout in the initial hours of voting appeared to be much lower than the country's October presidential vote, when long lines snaked out of polling stations and Chavez won another six-year term.The vote is the first time in Chavez's nearly 14-year-old presidency that he has been unable to actively campaign. He hasn't spoken publicly since undergoing cancer surgery on Tuesday in Cuba.Governorships in all of the country's 23 states are being decided in the elections. Chavez's party currently controls all but eight of the states, and if it maintains its dominance the vote could help the president's allies deepen his socialist policies, including a drive fortifying grass-roots citizen councils that are directly funded by the central government.For the opposition, the elections are apt to determine the fate of its leadership. The most pivotal race involves opposition leader Henrique Capriles, who gave Chavez his stiffest challenge yet in the October presidential election, and is now running for re-election in Miranda state against Elias Jaua, Chavez's former vice president.The elections could also be an important dry run for new presidential elections if cancer cuts short Chavez's presidency.Chavez is due to be sworn in for another term on 10 January. But if his condition forces him to step down, Venezuela's constitution requires that new presidential elections be called promptly and held within 30 days.Chavez said before undergoing the surgery that if he's unable to continue, Vice President Nicolas Maduro should take his place and run for president.Alida Delgado, a lawyer, was waiting to vote outside a school in an affluent neighbourhood of Miranda state. She said she favoured Capriles because Chavez's government has left the country immersed in rampant crime and economic troubles. She said one of her sons moved away to Canada several years ago in search of work as a business manager.As for Chavez, Delgado said: "I hope he recovers, but I think there's going to be change.""God willing, I think that soon we're going to have new elections," Delgado said, adding: "May the opposition win."Chavez's son-in-law, Jorge Arreaza, who is also the government's science and technology minister, said in a Saturday phone call from Havana broadcast on television that the president had called for supporters to turn out to vote.Arreaza said Chavez is in full control of his mental faculties and has been talking with his children and getting daily visits from Fidel Castro while recovering slowly from the surgery, which was his fourth cancer-related operation since June 2011.Chavez's political allies framed the election as a referendum on his legacy, urging people to dedicate the vote to Chavez. The government put up banners on lampposts reading "Now more than ever, with Chavez."Jesus Hernandez, a public school employee, said he would vote for Jaua out of support for Chavez. "We have a leader, and we have to follow that leader."If the Chavistas gain or even hold steady, the executive branch could strengthen its hold on the grass roots, as communal councils decide such questions as who gets a new roof, or which streets need repairs, distributing the funds directly. Chavez's opponents have objected to the government's campaign to develop such state-funded "communes" because they bypass the traditional authority of state and local elected officials.The closeness of the vote to Christmas and apparent apathy among many voters suggested a low turnout. In the last presidential election, 81% of registered voters turned out, but gubernatorial elections tend to draw fewer people.Some said a low turnout could be a hazard both for Chavez's camp and the opposition.Political analyst Carlos Raul Hernandez said he thinks Chavez's illness could keep some voters away because he's developed "a style of messianic leadership" in which he stands out far above his political allies."There are a lot of people who are only interested in Chavez, not at all the governors," Hernandez said.

Hugo Chavez Cancer Surgery: Fidel Castro Meets With Venezuelan President

President Hugo Chavez is in full control of his mental faculties and has been talking with his children and getting daily visits from Fidel Castro while recovering slowly from cancer surgery in Cuba, his son-in-law said Saturday.Chavez has been recovering favorably despite some "moments of tension" after Tuesday's surgery and is now in a "process of stabilization," Science and Technology Minister Jorge Arreaza said on Venezuelan television in a phone call from Havana.It's unclear when Chavez might be well enough to return home, but Information Minister Ernesto Villegas expressed hope it could be soon. Chavez, who was re-elected in October, is due to be sworn in for another six-year term on Jan. 10."We're extremely hopeful that the president may be with us very soon. But it would also be irresponsible on my part to speak of dates," Villegas told The Associated Press."We're confident that President Chavez will be here to take office on Jan. 10. Now, in the event that weren't possible, our people would have to be prepared to understand it," Villegas said.He spoke during a ceremony in downtown Caracas attended by Vice President Nicolas Maduro and other government officials as well as visiting leaders from other countries.Arreaza's phone call became the centerpiece of the televised ceremony, and he said Castro has come to see Chavez every day since the surgery."He always stops by to personally find out about El Comandante's health condition and also to share his knowledge with all of us, and to give the family courage and encouragement," said Arreaza, who is the husband of Chavez's eldest daughter, Rosa.Chavez has long shared a close friendship with the former Cuban president, describing him as being like a father and mentor.The 58-year-old Venezuelan leader underwent his fourth cancer-related operation in Cuba after tests found the illness had come back despite previous operations, chemotherapy and radiation treatments. He previously had said in July that tests showed he was cancer-free.Throughout his treatments in Cuba, Chavez has kept secret some details about his pelvic cancer, including the exact location and type of tumors removed. Venezuela's government has said Chavez suffered complications during a complicated six-hour surgery but has since been recovering progressively.Arreaza said there had been "moments of tension, above all on (December) 11 and 12, but we've overcome them one by one.""The president has begun to communicate with his close relatives," he said. Arreaza said that as Chavez began to speak, he told him of "his deep love for his people.""El Comandante has fought a great battle, and, as he told us, he will overcome each of these moments little by little. He's getting better," Arreaza said.Chavez also called for his supporters to vote in Venezuela's gubernatorial elections Sunday, Arreaza said."He is now completely in full intellectual conditions to send this message to the Venezuela," Arreaza added.Maduro told Arreaza to give Chavez a message: "Tell him that the people here are on their feet working, battling." Maduro expressed confidence that Chavez's allies will win Sunday's elections.Maduro also said National Assembly President Diosdado Cabello made a quick trip to Havana on Friday along with Attorney General Cilia Flores and they were in contact with Chavez's family."Praying together, we're going to achieve the miracle," Maduro said.The vice president, whom Chavez recently designated his preferred successor, also repeated his government's condemnation of President Barack Obama's criticisms this week of "authoritarian policies" in Venezuela. Maduro called Obama's comments "unacceptable."Saturday night's ceremony was held on the eighth anniversary of the creation of the leftist Bolivarian Alliance, or ALBA, bloc of nations, which includes Venezuela, Bolivia, Cuba and other nations.Maduro read aloud a letter from Castro in which he said "the name of Hugo Chavez is admired and respected throughout the world." The former Cuban president was quoted as writing that "the doctors are fighting with optimism" for Chavez's recovery.Bolivian President Evo Morales, who attended the event in Caracas, told the television network Telesur that he hadn't yet been able to travel to Cuba but that he hoped to meet with Chavez soon. He didn't give details.Chavez's daughter Maria, who was with the president in Havana, thanked supporters for their prayers in a message on her Twitter account."We are continuing to battle along with papa," she said, expressing trust in "the hand of God!"

Kim Jong Il Death Anniversary Celebrated With Rocket As Centerpiece By North Korea

North Korea parlayed the success of last week's rocket launch to glorify leader Kim Jong Un and his late father on Sunday, the eve of the first anniversary of his death.The successful firing the rocket on Wednesday – ostensibly to place a satellite in space was a clear sign that Kim will continue his father Kim Jong Il's militaristic hardline policies despite international condemnation.The West sees the rocket as a thinly-disguised way of carrying out U.N-banned tests of long-range missile technology, which it says not only threatens regional stability but is also a waste of resources when millions of North Koreans have little to eat in the famine-beset country crying out for economic reforms.It is also feared that after the rocket launch, Pyongyang will press ahead with a nuclear test to build a warhead small enough to be carried by a long-range missile.At a somber memorial service Sunday to start a fresh round of mourning, North Korea's top leadership predictably eulogized Kim Jong Il and his son, who is certain to have gained national prestige and clout by going ahead with the rocket launch.Kim Yong Nam, president of the Presidium of North Korea's parliament, credited Kim Jong Il with building Pyongyang's nuclear weapons program, and called the satellite launch a "shining victory" and an emblem of the promise that lies ahead with his son in power.Top military official Choe Ryong Hae, meanwhile, warned that the army was prepared to defend the country's sovereignty.Wednesday's launch was North Korea's second attempt in eight months to fulfill Kim Jong Il's 14-year quest to put a satellite into space. International experts confirmed that the rocket succeeding in reaching space.Criticism of the launch was swift. The United States called it a covert test of missile technology, and U.N. Security Council condemned the launch as a violation of resolutions barring Pyongyang from developing its nuclear and missile programs.However, the launch fit neatly into the preparations to mark the first anniversary of Kim's death and the rise of his young son.Even before his death, Kim Jong Il had laid the ground for his son to inherit a government with national policies focused on science, technology and improving the economy. The son has been characterized as forward-thinking and tech-savvy  and the kind of man bold enough to take a gamble on a tricky rocket launch.A launch in April, sent amid festivities to mark the centenary of the birth of North Korea founder Kim Il Sung, ended in failure shortly after liftoff.Kim Jong Un made clear his intention to treat Wednesday's successful launch as a gift to his father.He invited scientists in charge of the launch from a west coast launch pad to Pyongyang for the mourning rites, including a visit to the mausoleum where Kim Jong Il's body is believed to be lying in state "to report to him" on the success of the launch, according to state media. Kim Jong Il's body has not been seen since the funeral that followed his Dec. 17, 2011, death of a heart attack. The mausoleum that houses the embalmed body of his father, Kim Il Sung, is expected to reopen this week. Both bodies will then be on display. The mood in North Korea has been subdued this month in the run-up to the anniversary. However, news of the launch cheered people and the regime held a mass rally on Friday at the main plaza in Pyongyang. Starting Saturday, North Koreans began streaming to a bronze statue of Kim on Mansu Hill and to Kim Il Sung Square to pay their respects, many laying white mourning flowers and bowing before his image. On Sunday, a solemn Kim Jong Un joined the memorial service at the Pyongyang Indoor Stadium on the eve of the anniversary of Kim Jong Il's death. Kim, whose entrances and exits usually are accompanied by a triumphant welcome song and a swell of cheers, entered the stage in silence, followed by top Workers' Party, government and Korean People's Army officials, as well as his aunt and uncle.A military band played the militaristic "Song of Gen. Kim Jong Il" as officials and the audience bowed toward the massive portrait of Kim hung above the stage.Tight security surrounded the gymnasium near Pyongyang's Pothong Gate. Armed soldiers in helmets posted along the street outside diverted traffic and pedestrians while more guarded every entrance to the building. The handful of foreign journalists allowed to cover the event, including The Associated Press, were searched by armed soldiers.In his speech, Kim Yong Nam called Kim Jong Il a "peerless patriot" who strengthened the military and stood up to the United States. The U.S. and North Korea signed a truce, not a peace treaty, at the close of the 1950-53 Korean War, and Pyongyang cites American troops in South Korea as a key reason for building its atomic weapons program. As the hourlong ceremony came to a close, the band briefly played the mournful refrain to "The General Will Always be With Us." After the musicians put down their instruments, Kim Jong Un stood up and led a silent procession out.