IMF calls for faster Italy reform
Italy's recession-bound economy should begin to recover from the end of this year but its growth outlook remains weak and Enrico Letta's government must accelerate its reform efforts, the International Monetary Fund said on Thursday.
At the end of annual consultations with Italy, the IMF said the eurozone's third largest economy would contract by 1.8% this year, worse than its previous projection of a 1.5% fall in output.
Next year will see growth of 0.7%, the Fund said in its concluding statement, up from its previous forecast of 0.5%, but it warned that the risks to its outlook are tilted to the downside and market sentiment remains fragile.
Italy's reform efforts need to be complemented at the European level, the Fund said, urging direct asset purchases by the European Central Bank and more long-term cheap loans "of considerable tenor" to euro zone banks.
Italy is mired in its longest post-war recession, with gross domestic product shrinking for seven consecutive quarters since the middle of 2011 and unemployment at a record high above 12 percent.
The IMF said it expected the recession to end towards the end of this year, supported by exports.
Recent data has been mixed, with some signs of revival in the manufacturing sector but a persistent slump in construction, retail and services, as domestic demand remains extremely weak.
"Accelerating the momentum for reform will be essential to jumpstart growth and create jobs," the IMF said.
"Europe will also need to play its part with actions to address financial fragmentation and strengthen further the currency union," it added.
Italy has been euro zone's most sluggish economy for more than a decade. After years of stagnation and recession its gross domestic product is lower now, in inflation-adjusted terms, than it was at the end of 2001.
"Italy's growth prospects over the medium term will strengthen only with the implementation of comprehensive reforms," the IMF said.
It said reforms adopted by Italy in recent years did not go far enough and called for greater deregulation of the service sector and the labour market and reform of a "lengthy and inefficient" justice system.
It urged a single, more flexible labour contract for new workers and said Italy should accelerate its stalled privatisation programme.
Italian authorities must also closely monitor Banca Monte dei Paschi di Siena's restructuring plan and be ready to act if Italy's third-largest lender misses its financial targets, the Fund said.
Vatican posts small 2012 surplus
The Vatican, embroiled in scandal involving its bank, released a rare bit of good news on its finances on Thursday, announcing that it had posted a $2.2m budget surplus in 2012.
However, figures released showed donations to a fund for use by the pope dropped by nearly 12% in 2012.
The fall coincided with the year the Vatican was hit by a leaks scandal and the arrest of former Pope Benedict's butler.
The Vatican bank, which has been the subject of scandals for decades, is currently under investigation by Italian magistrates for money laundering. The bank, officially known as the Institute for Works of Religion (IOR), denies the accusations.
A Vatican spokesman said he believed the worldwide economic crisis was responsible for a drop to $56.9m from $69.7m the year before in Peter's Pence, a special collection taken up each year for use by the pope.
The surplus of $2.2m in 2012 was due "mainly to good performance in financial management", according to the statement, released following two days of meetings by Vatican officials, some attended by Pope Francis, to review the financial situation.
The Vatican budget includes costs for the running of the Catholic Church's central administration, known as the Holy See, and its embassies around the world. The main costs are its 2 823 personnel.
The budget for the running of the State of Vatican City, a tiny sovereign state surrounded by Rome, is part of an autonomous administration and has its own budget. Vatican City State, which employs 1 936 people, had a surplus of $23m in 2012.
While the Vatican bank's figures were not given in the statement, it said the bank gave $50m of its profits to the pope "in support of his apostolic and charitable ministry".
The Vatican bank announced separately earlier this year that it had profits of €86.6m ($112.34m) in 2012
The bank's top two managers resigned on Monday, three days after a Vatican prelate with connections to the bank was arrested by Italian authorities on charges of plotting to smuggle $20m from Switzerland.
Obama, Merkel discuss US spy concerns
President Barack Obama spoke with German
Chancellor Angela Merkel on Wednesday to address mounting European concerns
about broad US surveillance programs.
Germany and other European nations are in uproar over last month's revelations by a US IT contractor that the National Security Agency has been scooping up vast amounts of data on Americans and foreigners.
"The president assured the chancellor that the United States takes seriously the concerns of our European allies and partners," according to a readout of the call between the two leaders.
The White House said they agreed to a "high-level meeting" between US and German security officials in the coming days to address intelligence matters, and that a US-EU dialogue on intelligence collection and data protection would begin as early as 8 July.
That appeared to be a concession of sorts to European Union demands to set up working groups looking at the extent of the US snooping into phone data, emails and web searches.
Outrage
Obama and Merkel, who faces criticism from the opposition less than three months from elections in Germany, also discussed the upcoming launch of sensitive US-European trade talks.
With some Europeans expressing outrage at how US data gathering could leave them exposed, French President Francois Hollande has threatened to block the negotiations until France can be sure spying on EU institutions has ended.
At an EU conference in Berlin on youth unemployment, the 28-nation bloc presented a joint reaction to the claims of US mass surveillance.
EU Commission president Jose Manuel Barroso announced the bloc's position - that talks aimed at establishing the world's largest free trade area run parallel with the US-EU working groups.
On a visit to Berlin this month, Obama reassured Merkel that American spies were not "rifling" through the emails of German and French citizens.
Diplomatic row
In Germany, a country whose history makes it deeply sensitive to personal surveillance, the issue is particularly troublesome.
At the centre of the revelations is fugitive US intelligence leaker Edward Snowden, who, with his US passport revoked, has been holed up in Moscow's international airport.
Snowden has sought asylum in more than 20 countries, and suspicion surged this week that the 30-year-old was on the plane of Bolivian President Evo Morales, who had been in Moscow.
The flight was diverted and forced to land in Austria after several European nations closed their airspace to the plane, triggering an international diplomatic row.
Germany and other European nations are in uproar over last month's revelations by a US IT contractor that the National Security Agency has been scooping up vast amounts of data on Americans and foreigners.
"The president assured the chancellor that the United States takes seriously the concerns of our European allies and partners," according to a readout of the call between the two leaders.
The White House said they agreed to a "high-level meeting" between US and German security officials in the coming days to address intelligence matters, and that a US-EU dialogue on intelligence collection and data protection would begin as early as 8 July.
That appeared to be a concession of sorts to European Union demands to set up working groups looking at the extent of the US snooping into phone data, emails and web searches.
Outrage
Obama and Merkel, who faces criticism from the opposition less than three months from elections in Germany, also discussed the upcoming launch of sensitive US-European trade talks.
With some Europeans expressing outrage at how US data gathering could leave them exposed, French President Francois Hollande has threatened to block the negotiations until France can be sure spying on EU institutions has ended.
At an EU conference in Berlin on youth unemployment, the 28-nation bloc presented a joint reaction to the claims of US mass surveillance.
EU Commission president Jose Manuel Barroso announced the bloc's position - that talks aimed at establishing the world's largest free trade area run parallel with the US-EU working groups.
On a visit to Berlin this month, Obama reassured Merkel that American spies were not "rifling" through the emails of German and French citizens.
Diplomatic row
In Germany, a country whose history makes it deeply sensitive to personal surveillance, the issue is particularly troublesome.
At the centre of the revelations is fugitive US intelligence leaker Edward Snowden, who, with his US passport revoked, has been holed up in Moscow's international airport.
Snowden has sought asylum in more than 20 countries, and suspicion surged this week that the 30-year-old was on the plane of Bolivian President Evo Morales, who had been in Moscow.
The flight was diverted and forced to land in Austria after several European nations closed their airspace to the plane, triggering an international diplomatic row.
Turkey: Morsi ousting is undemocratic
Turkey on Thursday said the military intervention that ousted Egypt's Islamist president
Mohammed Morsi did not reflect the people's will and urged the country to
"return to democracy".
Turkey's Islamic-rooted Justice and Development Party (AKP) government - which grappled with its own mass anti-government demonstrations last month - had established friendly ties with Morsi and his Muslim Brotherhood movement.
"The power change in Egypt was not a result of the will of the people. The change was not in compliance with democracy and law," Deputy Prime Minister Bekir Bozdag said in Ankara.
"In all democratic countries, elections are the only way to come to power," he said.
Egypt's army on Wednesday ousted and detained the country's first democratically elected president in an abrupt end to his first year in office after days of bloodshed and protesters calling for his resignation.
"Everyone... who believes in democracy should naturally oppose the way this power change happened because a situation that cannot be accepted by democratic people has emerged in Egypt," said Bozdag.
Call for release of leaders
He added that he hoped "Egypt would return to democracy, to a structure where the will of people prevails again".
Turkish Foreign Minister Ahmet Davutoglu told reporters in Istanbul that an elected leadership's removal from power through "illegitimate means" was "unacceptable" and called for free and fair elections.
"This intervention should not overshadow the democratic gains of the January 25 revolution," he said, warning that an interruption of the democratic process would be a loss for all Egyptian people.
He also called for the immediate release of detained Egyptian political leaders. Security forces in Egypt have begun arresting leading figures in the Muslim Brotherhood, with state media reporting that 300 warrants had been issued.
Davutoglu held telephone conversations with his US, German, French, British and Qatari counterparts late on Wednesday ahead of the military intervention, a diplomatic source said.
Turkish media reported that Prime Minister Recep Tayyip Erdogan had cut short a holiday and was due to chair a mini-summit later in the day to discuss the latest developments in Egypt.
Turkey's Islamic-rooted Justice and Development Party (AKP) government - which grappled with its own mass anti-government demonstrations last month - had established friendly ties with Morsi and his Muslim Brotherhood movement.
"The power change in Egypt was not a result of the will of the people. The change was not in compliance with democracy and law," Deputy Prime Minister Bekir Bozdag said in Ankara.
"In all democratic countries, elections are the only way to come to power," he said.
Egypt's army on Wednesday ousted and detained the country's first democratically elected president in an abrupt end to his first year in office after days of bloodshed and protesters calling for his resignation.
"Everyone... who believes in democracy should naturally oppose the way this power change happened because a situation that cannot be accepted by democratic people has emerged in Egypt," said Bozdag.
Call for release of leaders
He added that he hoped "Egypt would return to democracy, to a structure where the will of people prevails again".
Turkish Foreign Minister Ahmet Davutoglu told reporters in Istanbul that an elected leadership's removal from power through "illegitimate means" was "unacceptable" and called for free and fair elections.
"This intervention should not overshadow the democratic gains of the January 25 revolution," he said, warning that an interruption of the democratic process would be a loss for all Egyptian people.
He also called for the immediate release of detained Egyptian political leaders. Security forces in Egypt have begun arresting leading figures in the Muslim Brotherhood, with state media reporting that 300 warrants had been issued.
Davutoglu held telephone conversations with his US, German, French, British and Qatari counterparts late on Wednesday ahead of the military intervention, a diplomatic source said.
Turkish media reported that Prime Minister Recep Tayyip Erdogan had cut short a holiday and was due to chair a mini-summit later in the day to discuss the latest developments in Egypt.
'Democracy doesn't work' in Arab states
The ousting of Egyptian President Mohammed
Morsi proves that democracy does not work in non-Western states, a top lawmaker
close to President Vladimir Putin said on Thursday.
"The events in Egypt show that there is no quick and peaceful transition from authoritarian regimes to democratic politics," said Alexei Puskov, chairperson of parliament's foreign affairs committee.
"This means that democracy does not work as a panacea, especially in countries that are not part of the Western world," he told the Interfax news agency.
Puskov does not voice Russia's official position on foreign affairs, but his thinking often reflects that of senior government officials.
The foreign ministry was expected to issue its own statement later on Thursday.
"The events in Egypt show that there is no quick and peaceful transition from authoritarian regimes to democratic politics," said Alexei Puskov, chairperson of parliament's foreign affairs committee.
"This means that democracy does not work as a panacea, especially in countries that are not part of the Western world," he told the Interfax news agency.
Puskov does not voice Russia's official position on foreign affairs, but his thinking often reflects that of senior government officials.
The foreign ministry was expected to issue its own statement later on Thursday.
Japan gears up for decisive election
Campaigning began on Thursday in an election
expected to strengthen Prime Minister Shinzo Abe's control over parliament,
ushering in the stability he needs to fix Japan's floundering
economy.
Voters nationwide will go to the polls on 21 July to elect half of the 242 seats in the upper house of the legislature.
With approval ratings as high as 70%, Abe is expected to romp home, bagging control of both chambers and not having to face a public vote for three years.
Supporters say he will use that political clout to force changes on cosseted and inefficient industries, like agriculture, and to cut a swath through labour laws that businesses claim make it too difficult to hire and fire workers.
Detractors say he will abandon the economic project of his first six months and get back on his hobby horse - revising the constitution, boosting the military and re-assessing Japan's wartime history.
"We want to... stabilise politics and bring you the actual feeling" that the economy is picking up, Abe said in a party leaders' debate on Wednesday.
‘Abenomics’
As of 10:30 (0130 GMT), 428 candidates were registered at the board of elections. The number of candidates will be confirmed after the 17:00 (0800 GMT) deadline.
For the first time in Japanese politics, Internet election campaigns are allowed in the upper house vote, with candidates and parties permitted to update followers on Facebook and Twitter.
The opening months of the Abe administration have seen a blizzard of economic policies, starting with vast government spending programmes and a flood of easy money from the printing presses of the central bank.
The drive dubbed "Abenomics" - is intended to be completed with reforms that the prime minister hopes will make it easier to do business in Japan.
Details are scant at present, but Abe's wish list includes lowered corporate taxes, special business zones in some big cities, more women in the workplace and Japan's participation in a mooted free trade area encircling the Pacific Ocean.
Bolster military
Abe said on Wednesday he would also liberalise the electricity market, in a move supporters hope will free the country from the stranglehold of massive monopolistic utilities that generate and supply power.
Opponents say the premier's focus on the economy is a ruse designed to fool voters into giving him enough power to change Japan's hallowed pacifistic constitution.
They say with a majority in both houses, he will look to bolster the country's already-well equipped armed forces and switch their role from that of "self defence force" to full-fledged military.
They point to visits by his ministers to Yasukuni shrine, the believed repository of the souls of around 2.5 million war dead including 14 leading war criminals and a place seen by Japan's Asian neighbours as a symbol of Tokyo's imperialist past.
No party currently controls the upper chamber, although the Democratic Party of Japan have been the largest single grouping over the last few years.
However, their drubbing in December's general election when Abe's Liberal Democratic Party swept to power, combined with vicious factional infighting has left them in disarray.
Fukushima
They and other challengers are struggling to find a coherent message to sell to voters, who have on the whole warmed to Abenomics and the green shoots of economic growth it has nurtured.
Their only trump card may be atomic power all the main opposition parties have pledged to end nuclear generation sooner or later, while Abe has said he wants reactors restarted once they pass new safety tests.
That will be the hardest sell and could prove his Achilles' heel in a country still badly scarred by the disaster at Fukushima.
Abe kicked off his campaign on Thursday morning with speeches at railway stations in Fukushima city, around 50km from the crippled nuclear plant. He is due in Tokyo later in the day.
Banri Kaieda, leader of the DPJ, began the day in Iwate, one of prefectures hardest hit by the 2011 tsunami.
Voters nationwide will go to the polls on 21 July to elect half of the 242 seats in the upper house of the legislature.
With approval ratings as high as 70%, Abe is expected to romp home, bagging control of both chambers and not having to face a public vote for three years.
Supporters say he will use that political clout to force changes on cosseted and inefficient industries, like agriculture, and to cut a swath through labour laws that businesses claim make it too difficult to hire and fire workers.
Detractors say he will abandon the economic project of his first six months and get back on his hobby horse - revising the constitution, boosting the military and re-assessing Japan's wartime history.
"We want to... stabilise politics and bring you the actual feeling" that the economy is picking up, Abe said in a party leaders' debate on Wednesday.
‘Abenomics’
As of 10:30 (0130 GMT), 428 candidates were registered at the board of elections. The number of candidates will be confirmed after the 17:00 (0800 GMT) deadline.
For the first time in Japanese politics, Internet election campaigns are allowed in the upper house vote, with candidates and parties permitted to update followers on Facebook and Twitter.
The opening months of the Abe administration have seen a blizzard of economic policies, starting with vast government spending programmes and a flood of easy money from the printing presses of the central bank.
The drive dubbed "Abenomics" - is intended to be completed with reforms that the prime minister hopes will make it easier to do business in Japan.
Details are scant at present, but Abe's wish list includes lowered corporate taxes, special business zones in some big cities, more women in the workplace and Japan's participation in a mooted free trade area encircling the Pacific Ocean.
Bolster military
Abe said on Wednesday he would also liberalise the electricity market, in a move supporters hope will free the country from the stranglehold of massive monopolistic utilities that generate and supply power.
Opponents say the premier's focus on the economy is a ruse designed to fool voters into giving him enough power to change Japan's hallowed pacifistic constitution.
They say with a majority in both houses, he will look to bolster the country's already-well equipped armed forces and switch their role from that of "self defence force" to full-fledged military.
They point to visits by his ministers to Yasukuni shrine, the believed repository of the souls of around 2.5 million war dead including 14 leading war criminals and a place seen by Japan's Asian neighbours as a symbol of Tokyo's imperialist past.
No party currently controls the upper chamber, although the Democratic Party of Japan have been the largest single grouping over the last few years.
However, their drubbing in December's general election when Abe's Liberal Democratic Party swept to power, combined with vicious factional infighting has left them in disarray.
Fukushima
They and other challengers are struggling to find a coherent message to sell to voters, who have on the whole warmed to Abenomics and the green shoots of economic growth it has nurtured.
Their only trump card may be atomic power all the main opposition parties have pledged to end nuclear generation sooner or later, while Abe has said he wants reactors restarted once they pass new safety tests.
That will be the hardest sell and could prove his Achilles' heel in a country still badly scarred by the disaster at Fukushima.
Abe kicked off his campaign on Thursday morning with speeches at railway stations in Fukushima city, around 50km from the crippled nuclear plant. He is due in Tokyo later in the day.
Banri Kaieda, leader of the DPJ, began the day in Iwate, one of prefectures hardest hit by the 2011 tsunami.
