NEWS,14.12.2012

EU holds back on eurozone overhaul

European leaders doused hopes of a radical eurozone overhaul on Friday, after brokering deals to control banks and refloat Greece seen as adequate to stem the immediate crisis.The last EU summit of a year that saw Greece close to bankruptcy and bigger Latin countries pressured to overhaul their economies in line with German demands saw a series of ambitious proposals effectively kicked into the long grass.Despite worries over political uncertainty in Italy, flagship plans to fix fundamental flaws criticised since the introduction of the single currency were put to one side until late 2014 at the earliest.Europe's effective paymaster, German Chancellor Angela Merkel, hinted that "financial aid" could in the future be given to countries committing to reforms as part of moves towards greater economic co-ordination in the bloc.In the eurozone alone, joblessness is heading towards the 20 million mark after a year of devastation and with recession set to last throughout much of 2013.However, the sense of imminent panic on financial markets that dominated much of 2012 decision-making has receded significantly since the European Central Bank (ECB) issued a long-resisted but near-unlimited guarantee in the summer to stand behind countries in financial difficulty."No doors were closed," said Jose Manuel Barroso, the head of the executive European Commission.Yet ideas heavily promoted by EU President Herman Van Rompuy over the last six months, including a central eurozone budget, seemed to fizzle out.Van Rompuy said he would present another report to leaders in June 2013, as well as proposing that national governments sign up to contracts with the EU on reforms."All the hard work is beginning to pay off. A lot has been achieved over the course of a year," he insisted."This work is not over: the dynamic will carry on in the coming year," pledged Van Rompuy.French President Francois Hollande said that late-2014, when a new Commission is installed, "would be the time we could envisage a new phase with a modification of the treaties."The resumption of loans to Greece followed a successful plan to wipe tens of billions of euros from the country's debt pile.A first payment of €34.3bn would be flowing to Athens "as early as next week," said outgoing Eurogroup chair and Luxembourg Prime Minister Jean-Claude Juncker.The accord prompted Greek Prime Minister Antonis Samaras to declare that "Grexit", the idea that Greece would be forced out of the 17-nation bloc, was "dead.""Greece is back on its feet," declared an ecstatic Samaras, who has pushed through painful economic reforms demanded by international creditors, sometimes in the face of violent street protests.Meanwhile, the deal for the eurozone's largest banks to come under the aegis of the ECB from March 2014 was hailed by its head Mario Draghi as "an important step towards a stable economic and monetary union, and towards further European integration".Despite a noticeably more bullish tone at the summit, fears over Italy lurked in the background, after Prime Minister Mario Monti, credited with important reforms there, said he was stepping down soon.Former leader Silvio Berlusconi had hinted that he might stand for a fourth time but appeared to row back, telling Belgian television that he had "so much to do" outside politics.Hollande downplayed the chance Berlusconi would run in a future election, saying: "I don't think there is a very serious likelihood" of this."Merkel underlined a closing of ranks at the summit. "I made clear that the government of Mario Monti has done a great deal of helpful work for the confidence that Italy is now enjoying again," she said.Leaders were to reconvene later Friday at 10:00am (09:00 GMT) to discuss moves towards a common security and defence policy as well as to take a position on the Syria crisis.

Fiscal cliff looming larger

Wall Street declined as US House Speaker John Boehner renewed concern about the lack of progress in talks aimed at preventing US$600 billion in tax increases and spending cuts taking effect on January 1."Unfortunately, the White House is so unserious about cutting spending that it appears willing to slow-walk our economy right up to the 'fiscal cliff,'" Boehner told a news conference.Failing to reach a deal to avoid the so-called fiscal cliff could push the world's largest economy into recession next year, the non-partisan Congressional budget office has forecast.Further evidence of the glacial pace of negotiations has increased uncertainty about the outlook for the economy and corporate profits."There's a lot of confusion. Nobody knows what's going to happen with the cliff," Tom Schrader, managing director of US equity trading at Stifel Nicolaus Capital Markets in Baltimore.In afternoon trading in New York, the Dow Jones Industrial Average fell 0.44 percent, the Standard & Poor's 500 Index shed 0.56 percent, while the Nasdaq Composite Index dropped 0.75 percent.Positive economic data, while welcome, did little to help the mood. New claims declined 29,000 to a seasonally adjusted 343,000, according to the Labor Department."The labour market might be improving a bit quicker than expected," David Sloan, an economist at 4Cast in New York, told Reuters. And two separate reports from the Commerce Department showed that retail sales increased 0.3 percent last month, following a 0.3 percent slide in October, while business inventories gained 0.4 percent in October.Shares of Best Buy soared, last up 14.9 percent, after a report in the Minneapolis Star-Tribune newspaper that company founder Richard Schulze will offer to buy the consumer electronics retailer by the end of the week.In Europe, the Stoxx 600 Index ended the day with a 0.4 percent drop from the previous close. That was its first drop this month, according to Bloomberg. National benchmark stock indexes declined in Frankfurt, Paris and London, falling 0.4 percent, 0.1 percent and 0.3 percent respectively.Standard & Poor's today cut its crediting rating outlook for the UK to negative from stable.Meanwhile, UBS faces a fine of about US$1 billion next week to settle charges of rigging the Libor interest rate benchmark, Reuters reported, citing a person familiar with the situation."The global settlement is about US$1 billion," the source told Reuters on Thursday. "It's expected early next week on Monday or Tuesday."

No need for Spain bailout right now - PM

Spain's Prime Minister Mariano Rajoy insisted on Friday that his country currently had no need of a bailout from the Eurozone to fix its public finances. Spain will seek help to ease its borrowing costs if necessary, but "currently we do no need to and therefore we have not asked for it", he told Cadena Ser radio.Rajoy has for months been fending off speculation that Spain will seek help from Eurozone emergency funds, which would trigger supportive action by the European Central Bank."We will use this mechanism only if necessary for the interests of the Spanish people," said Rajoy, interviewed on the sidelines of a European Union summit in Brussels.He spoke a day after European leaders approved a new system of banking supervision for the Eurozone, a key move for Spain, the bloc's fourth-biggest economy.Spain has had to seek a Eurozone bailout for its banks, ruined by financial turmoil in recent years, and speculation mounted that it would have to seek aid when its borrowing costs surged to danger levels in July.But Rajoy has held off from making such a demand and Spain has managed to complete its financing operations for 2012 without outside help.Figures released by Spain's central bank on Friday showed that the level of debt owed by Spanish banks to the European Central Bank decreased for a third month running in November, to €340.8bn.This indicated that Spanish banks were finding it easier to raise money on regular financial markets, a sign of recovering confidence in the sector whose collapse has fuelled a bitter recession in Spain.Other data from the Spanish central bank Friday showed that Spain's public debt rose to a fresh record at 77.4% of gross domestic product in September and was forecast to reach at least 85.3% by the end of 2012.

NEWS,30.06.2012

Germany agrees to concessions in eurozone pact

 

By the end of a vital two-day summit here, European diplomacy had played out like soccer, with Spain and Italy - the two nations headed to the Euro 2012 finals - emerging victorious and the Germans returning home in shock.After a marathon 14 hours of talks, the deal that came together saw Berlin offer surprise concessions that could aid both Madrid and Rome in their desperate struggle to stave off economic collapse, even as it hinted at new political dynamic in Europe.Amounting to a series of highly technical rule changes, the deal addressed the core of the questions facing Europe: Who will cover the tab for its 2 1/2-year-old debt crisis, and how?Troubled eurozone countries could now have more options for aid, including using a pool of European rescue funds to directly recapitalize ailing banks. That, in turn, could spare governments the humiliation of having to ask for aid themselves to channel to domestic banks, sidestepping the kind of intrusive financial inspections imposed on Greece, Ireland and Portugal.The change could ultimately halt a toxic cycle that, while holding countries accountable for their banks' errors, also saw the balance sheets of indebted nations sink deeper into the red as they took on ever more rescue cash to bail out their financial institutions.The new plan would kick in only once a regional supervisor is established to regulate banks in the 17-nation eurozone - itself a major step that could see regulators based at the European Central Bank override the authority of national governments, bolstering market confidence in the region's financial system. Leaders said they would agree on such a move by the end of the year.In addition, leaders agreed that countries could access bailout funds to buy up their government bonds on open markets - and thus bring down dangerously high borrowing costs - with fewer conditions attached.The compromise reached here Friday fueled new optimism about the region's ability to finally break the diplomatic impasses that have made its debt crisis as much political as economic."We have taken decisions that were unthinkable just some months ago," European Commission President Jose Manuel Barroso said.The breakthrough also signaled a reshaping of Europe's political landscape.German Chancellor Angela Merkel, the frugal East German physicist, had laid down the rules for coping with the crisis through her alliance with Nicolas Sarkozy when he was France's president. But with his successor, the intellectual socialist Francois Hollande, leaning more toward the Italian and Spanish leaders' vision of crisis management, a new three-against-one dynamic took hold here.Backed by the French, Spanish Prime Minister Mariano Rajoy, a conservative who is protective of Spanish pride, and Italian Prime Minister Mario Monti, a sober and highly respected former EU official, resorted to brinksmanship. Both leaders vowed to block a $150 billion growth plan, seen as a centerpiece of the forum, if they did not win major concessions. Against their united front, Merkel blinked."The discussions were hard and tense," Monti said Friday. "But it was worth the effort.""This was not France and Germany arriving with a solution, like in the past," added Hollande. "It was France and Germany, along with others, reaching a solution. That's why it took so long and went so far."

 

Angela Merkel: Big Loser Of Eurozone Showdown

 

Angela Merkel was portrayed across Europe as the big loser of a euro zone showdown in Brussels after the German chancellor was forced to accept the crisis-fighting measures championed by countries struggling with their debts.Newspapers in Spain, Italy and France on Saturday toasted the triumph of their leaders - Mario Monti, Mariano Rajoy and Francois Hollande - in pushing Merkel into a U-turn that would long have been unthinkable.Even German newspapers said Merkel had been made to accept demands for the euro zone rescue fund to be able to inject aid directly into stricken banks from next year and intervene on bond markets to support troubled member states."There's no doubt about it - the chancellor was blindsided at the euro summit," wrote influential columnist Nikolaus Blome of Bild, a daily with 12 million readers.The summit ended on Friday with agreement on new steps to try to prevent a catastrophic breakup of the single currency.Popular at home for insisting on austerity measures and tough conditions for those indebted euro zone states getting help, Merkel was quick to put a positive spin on the summit, telling reporters: "We had an interest in finding solutions."There was no sign that the summit had damaged her reputation on Friday as both houses of parliament voted to back the euro zone's permanent bailout scheme. And Merkel does not face any particular political challenge at the moment.But the concessions of "Frau Nein" were far bigger than earlier compromises in the name of saving the euro."Merkel caves in - money for ailing banks," read the headline on Germany's left-leaning Sueddeutsche Zeitung.Bild wrote: "Italy and Spain got what they wanted: It'll be easier to borrow excessively again... It was the first time in more than two crisis years that euro states didn't follow Germany's orders."Footballing comparisons have been widespread after Italy knocked Germany out of the Euro 2012 tournament in a shock 2-1 victory on Thursday."This time it was worse, the defeat was about the euro," said respected Deutschlandfunk radio.'1-0 TO HOLLANDE'In France, left-leaning daily Liberation had a front page splash showing Hollande and Merkel dressed in their national football shirts with "1-0 to Hollande" over the top. It devoted its first four pages to his summit triumph.Liberation said it was the pressure from Hollande, Monti and Rajoy that made Merkel buckle and accept a growth plan and banking union mechanism. It applauded his negotiating prowess."The night the South made Merkel cave in," was the headline over a Liberation report on the Brussels summit.France's right-leaning daily Le Figaro called Spain and Italy the real winners. "Just like in football, it is thanks to Italy and Spain that the dynamics of the match have changed and that Angela Merkel has been forced back against the wall."Italy's leading daily, Corriere della Sera, captured the euphoric mood in Italy. A front-page cartoon "A super Mario in Brussels too" showed Monti in the triumphant clenched-fists pose of Italy striker Mario Balotelli after his second goal against Germany. The diminutive figures of an annoyed-looking Merkel and a meek-looking Hollande watch him."Italy is not just a great team, it's a great country and it may be good to remember it," the paper wrote, giving credit to Monti for making Italy a leading player in Europe again.Left-leaning daily La Repubblica noted that after four years during which Germany had "dictated both the music and the lyrics" at euro zone summits, three of the four main countries had refused to dance to Merkel's beat."Although the Chancellor retains her undisputed primacy at the heart of the Council, she was forced to listen to them."Spanish newspapers saw a victory too - particularly in the fact that inspectors from the European Union, International Monetary Fund and European Central Bank would not put Spain under the same scrutiny as countries bailed out earlier.But El Mundo noted that as Spain gets support for its troubled banks: "the Men in Black... will be atop the Pyrenees watching over everything we do."In bailed-out Portugal, Publico newspaper mocked Merkel's U-turn, saying: "Nein! Non! No! Yes!".In the northern European countries aligned with Germany in demanding tough measures for indebted countries getting help, Merkel was also identified as the loser with the softening of terms for the most indebted."The southern euro countries are taking the north hostage," wrote Dutch financial daily Het Financieele Dagblad.

NEWS,21.06.2012

Auditors: Spanish banks need up to $78BN

Spain's troubled banks could need as much as (EURO)62 billion ($78.76 billion) in new capital to protect themselves from economic shocks, according to independent auditors hired by the government to assess the country's struggling financial sector.The Spanish government will use the auditors' report as the basis for their application for a bailout loan from the 17 countries that use the euro.Announcing the reports' findings Thursday, Deputy Bank of Spain Governor Fernando Restoy noted that this worst-case scenario was far below the (EURO)100 billion ($127.04 billion) loan offered by eurozone finance ministers two weeks ago.Spain's banking sector is struggling under toxic loans and assets from the collapse of the country's property market in 2008. Concerns that Spain's economy is so weak that it could not afford the cost of propping up its banks has sent its borrowing costs soaring to levels not seen since it joined the European single currency in 1999. The worry is that Spain could soon find itself unable to finance its debts by itself and join Greece, Ireland and Portugal in seeking a rescue loan for not just the banks but the whole country.The stakes are huge: Spain is the eurozone's fourth-largest economy and would seriously hit the bloc's finances should it need bailing out. The country is struggling through a recession with a 24.4 percent jobless rate. On top of this, government's main customers at its debt auctions are Spanish banks  the sector now being bailed out. In a sign of how reluctant the markets are to invest in Spain, the country had to pay sharply higher interest rates to raise (EURO)2.2 billion ($2.8 billion) in a bond auction Thursday.The audits of Spain's lenders, carried out by consultancies Roland Berger and Oliver Wyman, covered 14 banking groups that account for 90 percent of the sector in Spain. The country will use the reports' findings to decide how big a bailout loan to ask for.Restoy and Deputy Economy Minister Fernando Jimenez Latorre declined to outline individual banks' needs.In the auditors' stress test for the worst-case economic scenario  a fall in gross domestic product of 6.5 percent over the period 2012-2014  most of the banks were deemed to be in a "comfortable" position, Restoy said."We're not talking about the imperative capital necessities of the banks. We're not talking about someone urgently needing such and such an amount of capital to deal with their obligations," said Restoy. "We're talking about the capital that would be needed if we were to see a situation of extreme tension which is very unlikely to come about.""We should keep in mind we are not talking about how much capital an entity needs to survive. We're talking about how much capital an entity will need to confront a situation of extreme stress," he added.Economy Minister Luis de Guindos, in Luxembourg with eurozone colleagues to discuss Spain's aid request, said a formal petition would be made within few days. Eurozone finance ministers offered Spain a bailout loan of up to (EURO)100 billion on June 9. The terms of the loan  for which Spain, rather than banks, will ultimately be responsible for  still have to be negotiated.A more thorough series of audits by four other companies is scheduled to be completed by the end of July.Oliver Wyman Inc, gave a worst-case range of (EURO)51 billion-(EURO)62 billion in new capital needs while Roland Berger Strategy Consultants GmbH gave a single figure of (EURO)51 billion.The release of the audits Thursday will probably not eliminate market nervousness about Spain because more thorough audits of the nation's banks are now being conducted and those results are not expected until September, said Mark Miller, an analyst with Capital Economics in London."At face value it looks as if there is a reasonable safety margin given that up to (EURO)100 billion is potentially available," he said. "Having said that, the extent of the economic situation in Spain could even deteriorate beyond what is being described as an adverse scenario."Some investors will likely still be nervous over whether the auditors' reports discovered most if not all of the toxic assets on the balance sheets of Spain's banks, Miller said. And their fears are compounded by concerns that Greece might still end up having to leave the single currency, further destabilizing the eurozone and especially Spain.The results of the audits are good news for Spain because both companies came up with similar numbers and the overall figures were lower than some estimates of the banking sector's recapitalization needs, said Gayle Allard, an economist with Madrid's IE Business School."I think it's a fantastic result because there was talk of needs of (EURO)70 billion to (EURO)80 billion and that the loan could have been for (EURO)100 billion," she said.Investors could still easily find something to scare them about the results, Allard said, "but I don't think there's any reason to do so."She added: "The audits have come in better than anyone has expected, there's still some uncertainty, but if both of them are coming to the conclusion of those numbers we've got to be in the ballpark."

Eurozone Crisis Causing 'Deeper And More Broad-Based' Economic Downturn

The downturn in the euro zone's private sector is becoming entrenched, business surveys showed on Thursday, as falling new orders and employment levels dent confidence.June is the fifth consecutive month activity across the 17-nation bloc has declined, dragging down heavyweights Germany and France and likely increasing calls for the European Central Bank to take action to support the economy.Markit's Eurozone Composite Purchasing Managers' Index, a combination of the services and manufacturing sectors and seen as a guide to growth, held steady at 46.0 this month, the lowest since June 2009 when the bloc was mired in a deep recession.That was better than a slide to 45.5 predicted by economists but the index has been below the 50 mark that divides growth from contraction in all but one of the last 10 months."It is a worryingly steep downturn we are seeing and it is spreading from the periphery, which has been falling at an increased rate, through to Germany. It is becoming deeper and more broad-based," said Chris Williamson, chief economist at Markit.The data pointed towards a second quarter contraction of around 0.6 percent, Markit said.Having held steady at the start of the year, the bloc's economy will contract 0.2 percent in the current quarter and narrowly escape recession by stagnating again in the next, according to economists.While the ECB is not seen cutting interest rates from their record low of 1.0 percent anytime soon, a growing and significant minority are saying the bank will be forced to act as the outlook worsens.The danger of Greece crashing out of the euro zone eased after pro-bailout parties won weekend elections, but risks are mounting that Spain, the euro zone's fourth-largest economy, will need a full-blown international rescue.The two-and-a-half year old crisis has hobbled the global economy, and world leaders meeting in Mexico piled pressure on the euro zone to move towards a fiscal and banking union to fix the crisis that now threatens to engulf Spain.With uncertainty reigning, optimism among survey participants dwindled to its lowest level since March 2009. The business expectations index for services firms slumped to 50.8 from May's 57.4, the biggest one month drop since the aftermath of the Lehman Brothers collapse in late 2008."Companies are getting increasingly rattled by the crisis that is engulfing the region, and there are clear knock-on effects for the real economy," Williamson said.COUNTING THE COSTThe PMI for the dominant service sector nudged up to 46.8 from May's 46.7, beating expectations for 46.4, but chalking up a fifth straight sub-50 reading.It was a similar picture in the manufacturing sector, which drove a large part of the bloc's recovery from the last recession, where activity declined for the 11th straight month.Its 44.8 reading was the lowest since June 2009 and missed the 44.9 forecast. The output index for the sector fell to 44.4 from 44.6, the lowest since May 2009.And things are unlikely to improve anytime soon as composite new business declined for the 11th month, with the index coming in at 45.2, just up from May's 44.6. The survey also showed that firms have been running down old orders for a year.To reduce costs, and giving an indication of their prospects, factories reduced headcount for the fifth month, with the employment sub-index falling to 46.5 from 47.1, its lowest since January 2010."It's a sign that companies are expecting things to get worse and not better," Williamson said.Earlier data from Germany, Europe's largest economy, showed its manufacturing sector contracted at its fastest pace since June 2009 while its service sector barely expanded, posting its lowest reading in seven months.In neighbouring France activity declined in both sectors, albeit it at a more moderate pace than last month.

NEWS,18.06.2012

Greek leaders seek coalition, want to ease bailout

Greece's conservative leader has pushed for a new coalition government after a narrow election victory, pledging to soften the debt-laden country's punishing austerity programe despite opposition from Germany.A brief relief rally on international financial markets after Sunday's Greek vote quickly fizzled out as it became clear that Antonis Samaras's New Democracy had failed to win a convincing popular mandate to implement the deep spending cuts and tax increases demanded by the European Union and the IMF.Radical left-wing bloc SYRIZA and a host of smaller parties opposed to the punishing conditions attached to the $206 billion bailout won around half the votes cast, though fewer seats because the electoral system rewards the first placed party disproportionately.Samaras received a mandate to form a coalition government from the president today, but talks looked set to run into at least tomorrow. He said the country would meet its commitments under a bailout saving the country from bankruptcy and a dramatic exit from the euro zone.But Samaras added: "We will simultaneously have to make some necessary amendments to the bailout agreement, in order to relieve the people of crippling unemployment and huge hardships."Samaras met with SYRIZA's charismatic leader Alexis Tsipras, who ruled out joining the government, and with the third-placed PASOK Socialists, who did not commit. PASOK leader Evangelos Venizelos said negotiations "must be wrapped up" on Tuesday.The small Democratic Left party indicated it would be ready to support Samaras if the bailout deal could be softened.Greece's economy is forecast to contract 5% this year after shrinking 7% last year. Protests regularly choke the centre of Athens, some hospitals are running short of medicines, thousands of businesses have closed and beggars and rough sleepers are multiplying.During the election campaign, Samaras called for cuts in taxes, hikes in unemployment benefits, pension rises and two more years to meet fiscal targets.But Germany, already irritated at what it sees as the slow pace of Greek reform, ruled out more than minor delays to some targets in the rescue package - Greece's second since 2010.Chancellor Angela Merkel, speaking at a meeting of G20 leaders in Mexico, said any loosening of Greece's agreed reform pledges would be unacceptable and reiterated that Athens had to stick to the commitments it had already made.Germany says deal "not negotiable" Samaras voted in 2010 against the first $174 billion rescue because he thought it was too harsh. He now said Greece should have until 2016, not 2014, to meet fiscal targets set by under the bailout. Venizelos wants a further year to reform.German Foreign Minister Guido Westerwelle said the substance of the bailout agreement was "not negotiable", but he said creditors might be willing to offer some flexibility on timing for some of the targets, given the time lost in campaigning."We're ready to talk about the time frame as we can't ignore the lost weeks, and we don't want people to suffer because of that," he told German radio today.There was frustration in Berlin that Samaras had campaigned on a promise to renegotiate the bailout, given the scale of resistance among those stumping up the cash.European Central Bank Executive Board member Joerg Asmussen warned that extending the 2014 deadline for Greece to cut its budget deficit to below three percent of GDP would mean fresh money for Athens."I can only generally point out that if one is pressing to shift fiscal targets, one should be so honest to also say that as long as a country is running a primary deficit, extending the fiscal targets will automatically mean that there will be an additional external financing need," Asmussen said.With an emboldened SYRIZA bloc led by former communist student leader Tsipras at the head of a powerful opposition, the new government could face protests soon after taking office. SYRIZA almost doubled its share of the vote since a previous election on May 6, which produced stalemate.

US and EU haggle over trade barriers

The United States and the European Union, stung by past failures to liberalize trade, are struggling over how to tackle regulatory barriers in areas ranging from financial services to chemicals that pose the biggest obstacle to a transatlantic free trade pact.A joint US-EU working group is due to deliver interim recommendations this month on how to leverage one of the world's largest trade relationships to create more jobs on both sides of the Atlantic and bolster economic growth.Businesses both in the United States and Europe want Washington and Brussels to strike a deal that removes trade hurdles by requiring both to accept each other's consumer- and environmental-protection standards.They envision an agreement in which a car tested for safety in the United States would not have to be tested again in Europe, or a drug deemed safe by Brussels would not have to be approved by US government experts.There's a good chance the upcoming report from the team led by US Trade Representative Ron Kirk and European Union Trade Commissioner Karel De Gucht will be no more than a "stock-taking" of the talks so far, with the real meat of the recommendations in a final report near the end of the year.Peter Rashish, vice president for Europe and Eurasia at the US Chamber of Commerce, said he hopes for a forward-leaning document that sets the stage for ambitious talks that would begin when the final report is put out."We need a strong statement that a US-EU trade deal would be a big boost to jobs and growth, given the challenges both the US and the EU economy face right now," Rashish said.The United States and the EU have proven records of sealing bilateral free trade agreements, including deals each has struck with South Korea that some have suggested be used a template for a transatlantic pact.Also, tariffs on manufactured goods traded between the two economic blocs are generally low, and there are few sectors where dismantling the remaining tariffs would create political opposition to a pact. That has raised hopes a deal to eliminate the remaining duties could be struck quickly once talks begin.Drag on for years Even so, US and EU officials worry about launching negotiations that could drag on for years without success, such as the Doha round of world trade talks, which started in 2001 and never reached an agreement.A joint effort late in the administration of former President George W. Bush to eliminate European barriers to US poultry exports flopped so badly that the United States in frustration filed a case against the EU at the World Trade Organization."What you've got is a deep-seated suspicion on each side that the other side can't deliver," said Bill Reinsch, president of the National Foreign Trade Council, which represents major US exporters like Boeing, Caterpillar and Microsoft.Reinsch noted that the United States has disappointed the EU in recent talks on allowing foreign firms to bid on more US state and local government contracts."So there's this extensive poking around to figure what can be delivered," Reinsch said.Recent consultations have driven home how difficult it could be to address regulatory differences that impede trade in areas from food to chemicals to financial services, although both sides see a potentially big payoff from achieving that."What is really bothering companies on both sides of the Atlantic right now is not so much tariffs, but the duplication of regulatory requirements," a European official said.Those are harder to tackle because they involve regulators such as the US Food and Drug Administration, the European Medicines Agency and the European Food Safety Authority that are outside the purview of typical trade agreements."I think the regulatory piece is certainly the most challenging and I think we have to agree on what success would look like on regulatory matters" within the 18 to 24 months both sides hope it will take to reach a deal, Rashish said.That would probably require a recognition that some issues will still need further work after an initial free trade agreement is signed, he said.The US Chamber of Commerce has proposed starting with areas, such as autos, chemicals and pharmaceuticals, where the two sides have comparable, high-level standards to protect consumers and the environment but different specific requirements for The idea would be that after determining that US and EU regulatory regimes produce similar levels of protection, agreements would be reached to recognize each other's requirements in those areas as essentially equivalent, thereby removing them as barriers to trade, and setting a foundation for moving into additional areas, Rashish said.

NEWS,16.06.2012

Greece election 'euro versus drachma'

 

Conservative leader Antonis Samaras has told Greeks they face a stark choice between staying in the euro or a "nightmare" return to the drachma in an election that threatens to send shockwaves through the single currency.Samaras's New Democracy party is neck and neck with the radical leftist SYRIZA going into Sunday's pivotal vote, with SYRIZA leader Alexis Tsipras threatening to tear up the punishing terms of the 130 billion euro bailout that is keeping Greece from bankruptcy.Addressing supporters at his final campaign rally, Samaras pledged again to renegotiate the bailout's punishing terms in order to promote growth and jobs, but said that to go head to head with the country's European partners would mean the end of Greece's euro membership."We are going into an election to decide the future of Greece and of our children," Samaras, 61, told the crowd of several thousand waving Greek and EU flags in the capital's central Syntagma square."The first choice the Greek people must make is: euro versus drachma.""There are some outside Greece who want the country to be the black sheep and push it out of the euro. We will not please them," Samaras said, in a speech laced with the anti-immigrant rhetoric on the rise in Greece as the economy flounders.Neither party is expected to win outright, and negotiations will follow to create a pro- or anti-bailout coalition government.Nightmare Euro zone officials have hinted they might give a new Greek government some leeway on how it reaches debt targets set by the EU/IMF bailout package, but there would be no change to the targets themselves.Greece's lenders say they will turn off the taps if the country rejects the bailout. Tsipras says Europe is bluffing - it cannot afford to cut Greece loose and risk the contagion for the much larger economies of Spain and Italy, he argues.Greeks say overwhelmingly that they do not want to leave the euro, but neither do they want the pension, job and wage cuts arising from the bailout which have helped condemn the country to five years of record-breaking recession."I'm optimistic because I hope people will think as Greeks when they vote and not give in to anger," 61-year-old pensioner Anthi Zoitou said during Friday's rally."I voted for another party ... in the previous election," said 32-year-old economist Antonis Kargas, "but will vote for New Democracy now. The dilemma facing Greece is whether it holds onto its European prospects."Sunday's vote is a re-run of a May 6 election that produced stalemate.Tsipras has rejected forming a government of national unity, but Samaras said the country could not afford a third election."We cannot withstand it," he said. "We are in favour of renegotiating (the bailout) for jobs and to remain in the euro; this is what the Greek people want.""Should young people have opportunities to work or will we allow today's incredible unemployment to become a nightmare?"

Investors seek shelter before Greek vote

Traders and investors are taking all bets off the table before this weekend’s Greek elections, which may decide whether Athens stays in the eurozone. Greece votes on Sunday in a second attempt to choose a government that will decide whether to back the terms of its international bailout. G20 officials say central banks are ready to act to calm markets if needed. But investors are not taking any chances. “People are just totally hands off, they don’t want to know. Why would anyone want to deal this side of the weekend?” said Steve Larkins, head of sales trading at Seymour Pierce. “With the Greek elections coming up, Monday morning could be a disaster for someone taking a big bet over the weekend.” Hedge funds, typically among the most aggressive market players, are also wary, taking on only 10%-30% of their maximum permitted bets on risky assets, said Gerry Fowler, global head of equity and derivative strategy at BNP Paribas. “There are so many risks that just can’t be modelled... it really creates a market where no one can do anything with conviction and it’s a matter of wait and see,” he said. Global fund managers’ cash balances have jumped to 5.3% this month, their third-highest level on record, according to a Bank of America Merrill Lynch survey. Equities investors have been reluctant to roll over, or replace, options contracts which expire on Friday, as they opt for neutral positions. Some 1.4 million futures contracts on Euro STOXX 50 index of eurozone blue chips are yet to be rolled over, according to Eurex data. Shake out The shaking out of positions has led to high volumes. Monday was the Euro STOXX 50 index’s most active day of 2012 and this has been one of the year’s most active weeks. In currency markets, the euro has rallied versus the dollar  - arguably a counter-intuitive move given the eurozone crisis. Traders say the rebound has been driven by investors’ desire to unwind the large number of net short bets built up in the single currency. “As far as the euro/dollar is concerned, I am going square into the Greek elections. I have a feeling, either way, things will drag on for a while and that gives us enough reaction time,” Stuart Frost, head of Absolute Returns and Currency at fund manager RWC Partners. Position squaring was a factors behind a selloff this week in safe haven German government debt, which had been a favourite place for investors to sit out the crisis, even if that meant paying Berlin for the privilege. “Positioning is pretty square,” said one London-based bond trader. “People might still be a little bit long in longer-dated bonds but that’s probably because they haven’t been able to get out... A lot of bets have come off the table.” Another trader said the moves in the Bund futures signalled “that a lot of desks are either taking less risks themselves or have been told (to) stop taking risk until after the election”. Most sellers of insurance against a default on Greek government debt, known as credit default swaps (CDS), declined to quote before the weekend, dealers said. “I’d be surprised if anyone would want to dive in before the election with (Greek) bonds trading at 10 cents on the euro. "If we get some stability with the election then we’d expect trading to pick up again,” said one head of European credit trading at a major US bank. Ready for rollercoaster Investor nervousness is evident in the big gap between actual volatility on the Euro STOXX 50, which has fallen to two-month lows below 20, and the implied volatility as measured by the VSTOXX which has stayed stubbornly high around 32. “The spread between realised and implied volatility has gone up in a way that would explain the market is pricing in some Greek weekend risk,” said Abhinandan Deb, European head of equity derivatives research at Bank of America Merrill Lynch. Implied volatility reflects options pricing and is a measure of expected price swings. In the currency market, one-week implied volatilities have jumped to around 15.40%, the highest in six months and almost double the level of realised volatility. “Expect a rollercoaster in the markets,” said Stefan Angele, head of investment management, Swiss & Global Asset Management, although he advised keeping some positions, such as an "underweight" stance on the financial sector. With so much nervousness and so much money off the table, the markets could be poised for wild swings come Monday morning. “There is a gigantic number of shorts in euro/dollar so any headline that comes out over the weekend that indicates that Europe is safe will create the scope for a massive squeeze up on Monday,” said Jeremy Batstone-Carr, director of private client research investment strategy at Charles Stanley.

NEWS,20.04.2012.

A five-point checklist to help you prepare for another global crisis

The IMF just downgraded growth in Europe and projects a recession of -0.3 per cent in 2012. Imagine you are minister for finance in an average developing country. You survived the 2008-2009 global crisis, presided over more than five years of respectable economic growth, a boom in commodity prices fills your treasury with cash, and your central bank does not quite know how to keep your currency from appreciating. Old problems persist — too many young people are unemployed, your industrial sector is small and aging, and plenty of public money is wasted or simply missing. But, all in all, you feel pretty good about how things are going under your watch. Suddenly, you learn that a new global crisis may be looming on the horizon. Think of another rich country defaulting on its debt, pulling other rich countries’ banks into trouble. East Asia can no longer find avid consumers in the West for its exports, so it cuts back on its own consumption of raw materials. Commodity prices begin to fall, and your politicians start to worry aloud. What do you do then? Or better, what can you do now to prepare for all that? Five key measures may help. First, secure your financing — for at least the next 24 months. The last thing you want in the middle of a storm in international finance is to default on your payments. If you do, already-nervous investors — foreign and local — will rush for the door. Not to speak of what soldiers, teachers and civil servants would do if they were unpaid. So, calculate your cash needs as if all your expenditures were untouchable, and sign today the loans you know you will need tomorrow. (With interest rates currently at rock-bottom, this is smart debt management anyway.) While you are at it, assume that a good 10 per cent of those grants that developed nations regularly give you will no longer come in. It would also be nice if public companies that manage your oil, gas or minerals could buy insurance against their prices falling too much (this is called “hedging” in financial jargon); unfortunately, if they have not done it before, it is probably too late now. Second, prioritise your investments. Decide now which project you will slow down, postpone or drop, if you were to run out of money. In a way, you are looking for projects that are not “shovel ready”, that is, those that cannot be quickly implemented. Rule of thumb: if it involves massive, never-done-before, pride-of-the-nation construction, it probably can be put on hold. Remember, cutting investment expenditures is always tricky — the interest of the politically-connected are usually affected. You don’t want to have that discussion during a crisis. Third, audit your social safety nets. There will be plenty of people in need as jobs disappear and incomes fall. Poor families will respond in ways that may hurt them, and your country, in the long run — pulling teenagers from high school is the typical example. You will then be called upon to fund temporary employment programmes, feed children in schools, and pay for direct cash transfers. Fourth, stress test your banks. Your financial system is probably small and isolated from the sub-prime sophistication of Wall Street. It is made up mostly of banks that hold the deposits of the urban middle class and handle the remittances of the Diaspora. What would happen to your banks if, all of a sudden, foreign currency became expensive and scarce? Are their loans concentrated on a few construction or trading companies that would go belly up if the commodity boom came to an end? And are banks lending to each other? To each others’ owners? Your central bank should be able to answer all these questions — it is supposed to supervise banks in real time. So it can alert you early. And, fifth, identify who will suffer when crisis strikes. Who are the winners and losers? (Yes, there are winners in this.) Will the impact be felt in a single, remote rural area where your commodities are produced or extracted, or will it be primarily an industrial affair, hurting middle classes across cities? Will the affected belong to a specific racial, religious or regional group? Whose consumption will get more expensive? And whose assets will lose most value? This kind of “political economy analysis” is invaluable because it will highlight the roadblocks in your decision-making. One final point that may not depend entirely on you as finance minister. It would help to decide who, when the time comes, will speak for the government and what the message will be. Typically, in days of turbulence, cabinets tend to become dissonant and perceptions of policy paralysis — if not incompetence — make things worse. That would be a pity. All told, it is possible — and not too difficult — to get ready, at least for the first wave of impacts from a potential new global crisis. And if the crisis never comes, so much the better.

NEWS,18.04.2012.

Angry North Korea threatens retaliation

A bristling North Korea today said it was ready to retaliate in the face of international condemnation over its failed rocket launch, increasing the likelihood the hermit state will push ahead with a third nuclear test.The North also ditched an agreement to allow back inspectors from the International Atomic Energy Agency. That followed a United States decision, in response to the rocket launch it says was a disguised long-range missile test, to break off a deal earlier this year to provide the impoverished state with food aid.Pyongyang called the US move a hostile act and said it was no longer bound by its February 29 agreement with Washington, dashing any hopes that new leader Kim Jong-un would soften a foreign policy that has for years been based on the threat of an atomic arsenal to leverage concessions out of regional powers."We have thus become able to take necessary retaliatory measures, free from the agreement," the official KCNA news agency said, without specifying what actions it might take.Many analysts expect that with its third test, North Korea will for the first time try a nuclear device using highly enriched uranium, something it was long suspected of developing but which it only publicly admitted to about two years ago."If it conducts a nuclear test, it will be uranium rather than plutonium because North Korea would want to use the test as a big global advertisement for its newer, bigger nuclear capabilities," said Baek Seung-joo of the Seoul-based Korea Institute for Defense Analysis.Defence experts said by successfully enriching uranium, to make bombs of the type dropped on Hiroshima nearly 70 years ago, the North would be able to significantly build it up stocks of weapons-grade nuclear material.It would also allow it more easily to manufacture a nuclear warhead to mount on a long range missile.The latest international outcry against Pyongyang followed last week's rocket launch, which the United States and others said was in reality the test of a long range missile with the potential to reach the US mainland.North Korea has insisted the rocket launch, which in a rare public admission it said failed, was meant to put a satellite into orbit as part of celebrations to mark the 100th birthday of President Kim Il-sung, whose family has ruled the autocratic state since it was founded after World War Two.The peninsula has been divided ever since with the two Koreas yet to sign a formal peace treaty to end the 1950-53 Korean War.Recent satellite images have showed that the North has pushed ahead with work at a facility where it conducted previous nuclear tests.While the nuclear tests have successfully alarmed its neighbours, including major ally China, they also showcase the North's technological skills which helps impress a hardline military at home and buyers of North Korean weapons, one of its few viable exports.The North has long argued that in the face of a hostile United States, which has military bases in South Korea and Japan, it needs a nuclear arsenal to defend itself."The new young leadership of North Korea has a very stark choice; they need to take a hard look at their polices, stop the provocative action," U.S. Secretary of State Hillary Clinton said at a news conference in Brazil's capital.The Swiss-educated Kim Jong-un, who is in his late 20s, rose to power after his father's death last December. The country's propaganda machine has since made much of his physical likeness to his revered grandfather, the first leader and now North Korea's "eternal president".But hopes the young Kim could prove to be a reformer have faded fast. In his first public speech on Sunday, the chubby leader made clear that he would stick to the pro-military policies of his father that helped push the country into a devastating famine in the 1990s.Kim is surrounded by the same coterie of generals that advised his father and he oversaw Sunday's mass military parade.He urged his people and 1.2 million strong armed forces to "move forward to final victory" as he lauded his grandfather's and father's achievements in building the country's military.

Russia creates 'police crimes' unit

Russia on Wednesday created a special unit to investigate crimes committed by the country's vast but corruption-laden police force.The powerful Investigative Committee's decision to form the unit follows a spate of reports of police torture in the country's prisons and a new focus on the problem in Russia's Kremlin-controlled media."The need to create such a special unit is based on objective reasons," the Investigative Committee said in a statement.It said investigators currently looking into police crimes run into "certain difficulties" because officers and their bosses often use their professional skills "to mislead the investigation and avoid criminal responsibility".Interior Minister Rashid Nurgaliyev was forced to report to parliament last week about a spike in reported police violence and other abuses.The recent death in custody of a petty crime suspect after being raped by officers with a champagne bottle has focussed attention on the problem which has dogged Russia for years.Investigators said they have received 65 complaints against the same police precinct in the central Russian region of Tatarstan since the case initially came to light last month.Russia's outgoing President Dmitry Medvedev had made police reforms one of the planks of his four years in power.But he was recently forced to admit that his campaign to improve the police force may take years.

NEWS,17.4.2012

 New US anti-drug policy stresses treatment, prevention

 

The White House unveiled a new drug policy strategy Tuesday that veers away from imposing heavy prison sentences for illicit drug use and focuses instead on prevention and treatment.Officials said the new approach looks at drug addiction as a treatable disease rather than a crime."Outdated policies like the mass incarceration of nonviolent drug offenders are relics of the past that ignore the need for a balanced public health and safety approach to our drug problem," said Gil Kerlikowske director of the National Drug Control Center in a statement."The policy alternatives contained in our new strategy support mainstream reforms based on the proven facts that drug addiction is a disease of the brain that can be prevented and treated and that we cannot simply arrest our way out of the drug problem," he said.The announcement of a revised administration drug policy approach comes just days after a regional summit in Cartagena, Colombia, where leaders from across the Americas agreed to consider alternatives to the US-led "War on Drugs," which over the decades has claimed tens of thousands of lives, but yielded only meager results.Obama at last weekend's summit told his counterparts from Mexico, Central and South America that he opposed legalising drugs, but agreed for the first time to direct talks on the thorny issue of rampant drug consumption in the United States -- the world's most voracious consumer of cocaine.The US leader also agreed to ramped up US efforts to stem the flow of money and arms toward Latin America.His administration's revamped drug policy accelerates administration efforts to divert non-violent drug offenders into treatment instead of incarceration, while imposing stiffer penalties on major drug traffickers.Officials said the new anti-drug strategy also puts a greater emphasis on the healthcare system and youth outreach.The overall goal is to break "the cycle of drug crime, incarceration and arrest," said Charles Ramsey, chief of police in the city of Philadelphia and one of the key partners from the field of law enforcement in the effort."Policing in the 21st century means being tough but smart in how we address our nation's drug problem," he said."Those of us in law enforcement understand that too often drug addiction is the underlying cause of crime," he said, adding that enforcement can play a vital role in breaking the vicious cycle.Officials said they also would ramp up efforts to secure America's southern border with Mexico, increase US antidrug cooperation with overseas partners and target violent international drug gangs.The policy shift comes at a time when illicit drug use in the United States is on the decline.The administration said drug abuse currently is only about one-third the rate it was in the late 1970s.

 

Barak says Israel never ruled out attacking Iran

Israeli Defence Minister Ehud Barak on Tuesday said his country has never promised the United States it would hold off from attacking Iran while nuclear talks were taking place. The comments, in which Barak said that a diplomatic push to reach a compromise with Iran was a waste of "precious time," further exposed a rift between Israel and the US over how to deal with the Islamic Republic and its nuclear programme. Israel, arguing that a nuclear Iran would pose an existential threat, has said it will not allow Tehran to acquire a nuclear weapon. It cites Iranian calls for Israel's destruction, Iran's support for Arab militant groups and its development of long-range missiles capable of striking the Jewish state. Fearing that Iran is moving quickly toward nuclear capability, Israel has repeatedly threatened to attack if the country's uranium enrichment program continues to advance. Enrichment is a key process in developing weapons, and Israel says Iran is closely approaching a point where it can no longer be stopped. The US favours diplomacy and economic sanctions, and has said military action on Iran's nuclear facilities should only be a last resort if all else fails. Officials from the United States, Russia, China, Britain, France and Germany met with Iran in Istanbul last weekend to discuss the country's nuclear programme. The talks were described as positive, and they agreed to meet again on May 23 in Baghdad. Barak told Israel's Army Radio he did not believe the talks would prevent Iran from developing a nuclear weapon. "We regret the time being lost. This is precious time," he said. Earlier this week, Israeli Prime Minister Benjamin Netanyahu previously said Iran got a "freebie" from the international community, saying the May meeting gave the Iranians an additional five weeks to continue uranium enrichment without any restrictions. He said Iran should be forced to stop this immediately. Netanyahu was publicly rebuked by President Barack Obama who said the US had not "given anything away" in the talks. Iran insists its nuclear program is for peaceful purposes and says it does not seek a bomb. But the US and its allies do not take the promise seriously. The Obama administration has urgently sought to hold off Israeli military action, which would likely result in the US being pulled into a conflict as well.

NEWS,06.04.2012.

Fears of another motorbike serial killer after four shootings in Paris

Police in Paris have linked a 7.65mm gun to four separate murders in the Essone area of the capital since November, raising the possibility of another serial killer following the death of Mohamed Merah in Toulouse on 22 March.The fourth victim, a 47-year-old woman of Algerian origin, was shot four times in the head on Thursday. The gunman was seen to flee on a motorbike.Interior Minister Claude Guéant told radio  Europe-1: "This series of killings deserves our maximum attention and we're putting all our resources into this affair." Prosecutor Marie-Suzanne Le Quéau told a press conference that police were trying to determine whether there the victims were linked, and whether there was one killer or more than one: "On the theory of a serial killer, I will simply say that three of the murders  the second, third and fourth, show similarities."However, it was also stressed that as yet no terrorism link had been made, unlike in the seven murders around Toulouse by Merah, who also used a motorbike.Le Quéau said that a suspect in the first attack was still being held, but had retracted a confession. The fourth victim, Nadjia Lahsene, was shot while in the entrance hall of her housing block in the district of Grigny. A neighbour was quoted as saying: "Everyone is in shock. She didn't feel threatened. She's a normal person, simple, no history." Police appealed for witnwsses who saw the gunman, described as tall and slim.The first victim, Nathalie Davids, a 35-year-old lab assistant, was shot in her block's carpark in Grigny on 27 November. On 22 February, her 52-year old neighbour, Jean-Yves Bonnerue, was killed in the entrance to their building. The third, an 81-year old man, was shot in the suburb of Ris-Orangis on 19 March. 19th.Le Queau said that over 100 officers have been deployed to investigate the case and carry out identity checks in the area of the attacks. All were killed execution-style, with shots in the head. Le Quéau also said that all four deaths occurred at the same time of day, around 4 to 6 pm. Their locations are also near two trunk roads, allowing a fast escape.Following the first murder, a man aged 46 was arrested in December; he had been jilted during an affair with the woman, and had a record for petty crime. While in custody and with his lawyer, the man had confessed, but he then made a retraction in front of the investigating judge.The killings come as France is still distressed by the terror attacks in the south that left dead three Jewish children and a rabbi, plus three paratroopers. Mohamed Merah, the al Qaeda-inspired gunman, also used a powerful motorbike. He was identified, put under siege in his flat, and shot dead while leaping out of the window.France is holding the first round of its presidential election on 22 April, and the Toulouse case has played into a sharpening of the tone in the campaign; an opinion poll put Socialist François Hollande's lead over President Nicolas Sarkozy at its narrowest so far.

Tearful Hugo Chávez prays for God to spare him from cancer

'I have more to do for this country,' Venezuelan president pleads at pre-Easter mass after latest round of treatment in CubaThe Venezuelan president wept in a televised speech from the Catholic service in his home state of Barinas. His voice broke as he eulogised Jesus, the revolutionary fighter Che Guevara and the South American independence hero Simon Bolívar. "Give me your crown, Jesus. Give me your cross, your thorns so that I may bleed. But give me life, because I have more to do for this country and these people. Do not take me yet," Chávez said, standing below an image of Jesus with the Crucifix. Chávez said he had held faith that his cancer would not return after his first two operations last year  which removed a baseball sized tumour from his pelvis  but it did."Today I have more faith than yesterday," he said. "Life has been a hurricane ... but a couple of years ago my life began to become not my own any more. Who said the path of revolution would be easy?"Very little is known about the 57-year-old president's condition, including even what type of cancer he has. Chávez has undergone three operations in less than a year and received two sessions of radiotherapy. He has said the latest surgery was successful, that he is recovering well and will be fit to win a new six-year term at an election in October. But big questions remain about his future and on Thursday the strain appeared to show."Never forget that we are the children of giants ... I could not avoid some tears," the former soldier said as his parents and other relatives looked on from the church rows. Chávez soon seemed to recover his composure, joking with his brother Adan in the congregation that few people were watching because it was Easter, when Venezuelans typically hit the beach. After 13 years of his rule over the continent's biggest oil exporter, Chávez's sickness has thrown its politics into turmoil in the run-up to the election on 7 October.Flying back and forth to Havana for treatment, Chávez has been forced to run a kind of virtual campaign via Twitter and appearances on state television, while his opposition rival Henrique Capriles tours the country.He returned to Barinas late on Wednesday from Havana, where he had undergone a second session of radiotherapy. He said it went well and that all the test results had been positive.But in the absence of detailed information on his condition, Venezuelans have hunted for clues in his appearance each time he is on state TV. One local news website ran a large photo of his heavily perspiring brow after he disembarked from the jet.One Venezuelan opposition journalist who has broken news on Chávez's condition in the past reported that his medical team continued to disagree among themselves over the best course, and a Brazilian blogger said he might travel there for treatment.Capriles has mostly kept quiet about the president's illness, preferring to wish him a speedy recovery so that he can beat him in a fair fight at the polls.But the youthful state governor has criticised Chávez for choosing to be treated abroad, saying it sends a bad message to ordinary Venezuelans if he does not trust local doctors.Capriles, 39, took issue this week with repeated comments by Chávez and his allies that Jesus must have been a fellow leftist radical. "This theme is an obsession of the eternal candidate," Capriles said on Twitter, referring to Chávez. "This holy week we should remember Christ was neither socialist nor capitalist.In the latest opinion poll released last month the president had a solid 13 percentage point lead over Capriles, but many voters remained undecided.

NEWS,05.04.2012.

Retiree's suicide jolts Greece, triggers violence

A Greek retiree shot himself dead in Athens' main square Wednesday, blasting politicians over the country's financial crisis in a suicide note that triggered violent clashes hours later between police and anti-austerity protesters. Riot police fired tear gas and flash grenades after protests attended by some 1,500 people turned violent, and youths hurled rocks and petrol bombs outside Parliament. Authorities reported no injuries or arrests. The 77-year-old retired pharmacist drew a handgun and shot himself in the head near a subway exit on central Syntagma Square which was crowded with commuters, police said. The square, opposite Parliament, has become the focal point of frequent public protests against Greece's two-year austerity campaign. The incident, during morning rush hour, jolted public opinion and quickly entered political debate, with the prime minister and the heads of both parties backing Greece's governing coalition expressing sorrow. "A pharmacist ought to be able to live comfortably on his pension," said Vassilis Papadopoulos, a spokesman for the "I won't pay" group. "So for him to reach the point of suicide out of economic hardship means a lot. It shows how the social fabric is unraveling." Greece has relied on international rescue loans since May 2010. To secure them, Athens implemented harsh austerity measures, slashing pensions and salaries while repeatedly raising taxes. But the belt-tightening worsened the recession and led to thousands of job losses that left one in five Greeks unemployed. "As a Greek, I am truly shocked," Dimitris Giannopoulos, an Athens doctor, said before the protest. "I am shocked because I see that (the government is) destroying my dignity ... and the only thing they care about are bank accounts." Police said a handwritten note was found on the retired pharmacist's body in which he attributed his decision to the debt crisis. According to a text of the note published by local media, the man said the government had made it impossible for him to survive on the pension he had paid into for 35 years. "I find no other solution than a dignified end before I start searching through the trash for food," read the note. Police did not confirm whether it was genuine. Greece has seen an increase in suicides over the past two years of economic hardship, during which the country repeatedly teetered on the brink of bankruptcy. Police did not release the pharmacist's name and offered few other details. By Wednesday evening, dozens of written messages had been pinned to the tree under which the man shot himself, some reading: "It was a murder, not a suicide," and "Austerity kills." Hundreds of protesters made their way across the street from the square to outside Parliament and the Tomb of the Unknown Soldier, chanting: "This was not a suicide, it was a state-perpetrated murder" and "Blood flows and seeks revenge." Dozens of riot police stood guard. Papadopoulos, the protest organizer, said the suicide shows Greeks can take no more austerity. "This suicide is political in nature and heavy in symbolism. It's not like a suicide at home," Papadopoulos said in a telephone interview. "There was a political suicide note, and it happened in front of a clearly political site, Parliament, where the austerity measures are approved." Prime Minister Lucas Papademos issued a statement as protesters gathered at the site of the suicide. "It is tragic for one of our fellow citizens to end his life," he said. "In these difficult hours for our society we must all  the state and the citizens  support the people among us who are desperate." Government spokesman Pantelis Kapsis described the incident as "a human tragedy," but said it should not become part of the political debate. "I don't know the exact circumstances that led that man to his act," Kapsis said. "I believe we must all remain calm and show respect for the true events, which we do not yet fully know." Evangelos Venizelos, leader of the Socialist party, said the suicide "is so overwhelming that it renders any political comment unbecoming and cheap." "Let us reflect on the condition of the country and of our society in terms of solidarity and cohesion," said Venizelos, who served as finance minister for eight months before resigning to lead the Socialists. Conservative party head Antonis Samaras said the tragedy highlighted the urgency of getting Greece out of the crisis. "Unfortunately, this is not the first (suicide)," he said. "They have reached record levels." More protests are planned Thursday.