NEWS,21.10.2012

Britain set to officially exit recession

Britain was this week set to confirm its official exit from a deep recession, although a return to growth would fail to signal a rosy future for the country's fragile economy, according to analysts.Economists' consensus forecast is for Britain, which is not part of the eurozone, to have returned to growth in the third quarter, or July-September period, after falling into a double-dip recession in late 2011.Positive retail sales data published last week added to market belief that British gross domestic product (GDP) had turned positive heading into 2013.All will be revealed on Thursday, when the Office for National Statistics publishes its first estimate of third-quarter GDP."The release of the preliminary GDP data for the third quarter should see the UK officially exit recession after three quarters of contraction," said Howard Archer, chief UK economist at IHS Global Insight research group.But he warned: "The UK still has a very tough job in developing significant sustainable growth given tighter fiscal policy, ongoing serious problems in the eurozone and generally soft global growth."In addition, there are still significant pressures facing consumers that are likely to limit the upside for their spending for some time to come," Archer added, citing rising inflation on higher energy and food prices and an uncertain jobs outlook despite recent positive employment figures as some of the reasons.British annual inflation slowed to almost a three-year low at 2.2% in September, recent official data showed, but analysts warned that recent domestic energy price hikes would reverse the decline over the coming months.With inflation falling for now, the Bank of England has left the door open for more stimulus in the form of quantitative easing (QE).The bank's nine-strong Monetary Policy Committee (MPC) has underpinned the British economy with a total of £375bn in new money since March 2009."With any recovery currently looking feeble and fragile, we lean towards the view that a majority of MPC members will decide to give the economy a further helping hand in November through more quantitative easing," said Archer.Under QE, the central bank creates new cash which is used to purchase assets such as government and corporate bonds to increase lending by retail banks and boost economic activity.Double-dip recessionBritain escaped a deep downturn in late 2009 but fell back into recession at the end of 2011. The recent London Olympics and celebrations to mark Queen Elizabeth II's Diamond Jubilee on the British throne failed to deliver a major boost to growth."The economy is likely to continue to underperform in coming quarters, with roughly zero real GDP growth over 2012-13 combined," said Citi analyst Michael Saunders.The Conservative-Liberal Democrat coalition government blames Britain's economic ills on the debt crisis in main trading partner the eurozone and on the high level of debt inherited from the previous Labour administration.But the main opposition Labour party claims that Britain's downturn is mainly a result of rapid and hefty cuts to state spending by the coalition that have resulted in thousands of job losses across the civil service.British GDP contracted by 0.4% in the second quarter after shrinking by 0.3% in the first - and by 0.4% in the final quarter of 2011."The UK data week ahead may well prove to be noteworthy with UK third-quarter GDP figures... set to have a plus sign in front of them for the first time since the third quarter of 2011," said Victoria Clarke, an analyst at Investec financial group."Indeed, we expect that the forthcoming release... to show UK GDP having risen by 0.6% on the quarter, its strongest showing since the third quarter of 2010."

Troubles grow in Spain banking rescue

Spain seems condemned to pay for its own banking rescue after Germany flatly refused to let the eurozone's future bank supervisor do so, analysts say.That is bad news for Spain's soaring public debt.But it is only one of a series of concerns now emerging from a eurozone bailout of Spain's banks, which have been bogged down with bad loans since a 2008 property crash, diplomatic sources and analysts say.Madrid had battled for a eurozone banking supervisor to be allowed to pump capital directly into its weak banks as part of a planned banking union for the 17-member single currency bloc.That would have relieved Spain of the need to pay back an estimated €40bn it plans to use from a €100bn eurozone credit line.But German Chancellor Angela Merkel, who faces general elections next year, left no room for doubt about her position on direct recapitalisation for banks that have already been bailed out."There will not be a retroactive direct recapitalisation," she said on Friday after a European Union summit, which agreed to work on setting up a eurozone banking union with supervisory powers during 2013.A French government source said the question of direct aid for Spain's banks was not settled.But after the EU summit, a European diplomat was clear: "Spanish banks won't be recapitalised before the end of 2013, probably in 2014."That would leave Spain holding the bill for the rescue loan, which was agreed with the eurozone in June and signed in July."Spain is going to ask for about €40bn from the liquidity line," said Daniel Pingarron, analyst at Spanish brokerage IG Markets. "That means the Spanish public debt grows automatically."In fact, Spain's 2013 budget already takes into account a payment of €30bn for the banking fix, pushing the level of public debt to 90.5% of gross domestic product from an expected 85.3% this year.But the banking rescue is also running into other serious problems, analysts say.Another European diplomatic source said Madrid was balking at the eurozone's insistence that investors in stricken banks' subordinated debt and preference shares take losses before any bailout.'There's a stalemate'This is particularly sensitive in Spain where the banks sold billions of euros in preference shares to ordinary customers, many of whom believed the complex instruments were a form of savings."There is a stalemate here," said Edward Hugh, an economist based in Barcelona.Prime Minister Mariano Rajoy's conservative government and the eurozone authorities were at odds over the preference shares because of Madrid's reluctance to force the bank clients to lose their savings, he said.At the same time, the two sides seemed to be struggling over the implementation of a "bad bank", created to mop up the bad assets held by commercial banks and then to sell them to investors, he said.Latest data show more than one in 10 Spanish bank loans has gone bad, a new record.The Spanish bad bank is set to launch on November 19 under the name of SAREB with a formal ceiling of €90bn in so-called toxic assets, an economy ministry official said.But the key unresolved question is how to value the bad assets.The lower the price, the easier it is to attract investors. But a low price also could push up bank losses and force the Spanish government to pump in yet more money.With the cost of the bailout being added to Spanish debt under the existing accords, Madrid is trying to handle the bailout "on a shoestring," Hugh said."Europe is pressing them obviously for a lower price and is pressing them to do the preference shares but Spain seems to telling them to go and walk," the analyst said.In any case, Hugh said, the final cost of the banking bailout is likely to rise."At some stage there is obviously going to be more," he said.Indeed, Moody's Investors Service estimated this month that the Spanish banks would require between €70bn and €105bn.If the cost of the banking bailout was €40bn, or four percent of Spanish GDP, then Spain may be able to handle it, Hugh said. But more capital eventually will be needed, he warned."The story has not ended yet."

Wealthy Presidential Campaign Donors Driving The Election

 

Individual donors to U.S. presidential candidates can contribute up to $2,500 for the state-by-state party nominating contests and another $2,500 for the general election. But independent groups called Super PACs have no limits on what they can raise from individuals, corporations or labor unions.

Here is a look at wealthy individuals who have contributed at least $1 million to the major "super" political action committees as disclosed to the Federal Election Commission.


RESTORE OUR FUTURE

Total raised as of Sept. 30: $110.5 million

(Supports Republican presidential candidate Mitt Romney)

* Bob Perry - Houston builder who was a major donor to Swift Boat Veterans for Truth, a group that helped undermine 2004 Democratic presidential nominee John Kerry by attacking his Vietnam War record. Total donations: $10 million

* Sheldon Adelson - billionaire Las Vegas casino magnate who built the Venetian hotel and casino. Donation: $5 million

* Miriam Adelson - Sheldon's wife. Donation: $5 million

* Bill Koch - brother of conservative financiers David and Charles Koch. He runs Oxbow Carbon, a Florida-based firm that is also a donor and shares its address with another contributor, Huron Carbon. Total donations, including through firms: $4 million

* Steven Lund - runs Nu Skin, a Utah skin care and cosmetics company whose former executives have been linked to two other firms that share an address in Provo, Utah, and donated to the Super PAC: F8 LLC and Eli Publishing. Lund's wife Kalleen is also a donor. Total donations from the Lunds and firms: $3 million

* Julian Robertson - hedge fund industry legend at Tiger Management. Total donations: $1.3 million

* Crow Holdings - Dallas-based investment firm managing the wealth of the family of the late Dallas real estate mogul Trammell Crow, whose sons Harlan and Trammell S. Crow are also donors. Total Crow Holdings and Crow donations: $1.3 million

* Harold Simmons - billionaire Dallas banker and CEO of Contran Corp who has contributed to PACs supporting Rick Perry and Newt Gingrich. Donations: $1.3 million

* Frank VanderSloot - Idaho businessman who runs the nutritional and cosmetics company Melaleuca. The firm and its subsidiaries have also donated. Total donations: $1.1 million

* The Villages of Lake Sumter - a community in Florida run by billionaire Gary Morse, who is also a donor alongside his wife Renee and their several children. Along with the Morse family, thirteen companies controlled wholly or partially by Morse that share an address in The Villages have also contributed. Total donations of all: $1.7 million.

* Kenneth Griffin - Chicago-based hedge fund manager and CEO of Citadel LLC. Total donations: $1.1 million

* Bob Parsons - billionaire founder of web hosting giant Go Daddy. Donation: $1 million

* Jim Davis - chairman of New Balance Athletic Shoes Inc. Donations: $1 million

* Stanley Herzog - CEO of Missouri-based Herzon Contracting Corp. Donation: $1 million

* Bruce Kovner - billonaire hedge fund manager at Caxton Alternative Management. Donation: $1 million

* Rocco Ortenzio - Pennsylvania healthcare executive and founder of Select Medical Corp. Total donations: $1 million

* John Childs - founder of private equity firm J.W. Childs Associates LP in Florida. Donation: $1 million

* Edward Conard - a New York investor and former executive at Bain Capital, a private equity firm co-founded by Romney. Donation: $1 million

* John Kleinheinz - Texas hedge fund manager for Kleinheinz Capital Partners Inc. Donation: $1 million

* J.W. Marriott Jr. - chairman and CEO of Marriott International, brother of Richard. Total donations: $1 million

* Richard Marriott - chairman of Host Marriott International. Total donations: $1 million

* Robert McNair - owner of the Houston Texans football team. Donation: $1 million.

* Robert Mercer - New York hedge fund manager at Renaissance Technologies. Donation: $1 million

* John Paulson - a prominent New York hedge fund manager at Paulson and Co. Donation: $1 million

* Rooney Holdings Inc - private investment firm formed in 1980s to acquire the Manhattan Construction Co. and has since expanded into many areas. Total donations: $1 million

* Paul Singer - hedge fund manager who helped fund efforts to legalize gay marriage in New York. Donation: $1 million

* Paul and Sandra Edgerly - Paul Edgerly of Brookline, Massachusetts, is an executive at Bain. The Edgerlys each have given $500,000. Total donations: $1 million

* Steven Webster - private equity executive at Avista Capital in Houston. Total donations: $1 million

* Robert Brockman - executive at Reynolds and Reynolds, a Dayton, Ohio-based car dealership support company that shares a P.O. Box with CRC Information Systems Inc, Fairbanks Properties LLC and Waterbury Properties LLC, which split the donation three ways. Total donations: $1 million

* Miguel Fernandez - chairman of MBF Healthcare Partners, a private equity firm. MBF Family Investments also donated to the Super PAC. Total donations: $1 million

* Renco Group Inc. - owned by New York billionaire Ira Rennert, another frequent contributor to Republicans this year. Donation: $1 million

* OdysseyRe Holdings Corp - reinsurance underwriting company in Stamford, Connecticut that is a U.S. subsidiary of Toronto-based Fairfax Financial. Donation: $1 million


PRIORITIES USA ACTION

Total raised as of Sept. 30: $50.1 million

(Supports Democratic President Barack Obama)

* James Simons - billionaire hedge fund manager, founder of Renaissance Technologies Corp. Donation: $3.5 million

* Fred Eychaner - founder of Newsweb Corp. Donation: $3.5 million

* Jeff Katzenberg - chief executive of DreamWorks Animation. Donation: $3 million

* Steve Mostyn - Houston attorney. Donation: $2 million

* Irwin Mark Jacobs - former CEO of Qualcomm Inc. Donation: $2 million

* Jon Stryker - billionaire activist and heir to the medical supply company fortune of his grandfather. Donation: $2 million

* Anne Cox Chambers - billionaire daughter of James M. Cox, founder of Cox Enterprises. Total donations: $1.5 million

* National Air Traffic Controllers Association - union representing more than 16,000 workers. Donation: $1.3 million

* S. Daniel Abraham - billionaire creator of Slim-Fast brand, chairman of S. Daniel Abraham Center for Middle East Peace. Donation: $1.2 million

* Barbara Stiefel - retiree in Coral Gables, Florida. Donation: $1.1 million

* United Auto Workers - Donations through various funds: $1.1 million

* Kareem Ahmed - chief executive at Landmark Medical Management in California. Donation: $1 million

* David Boies, Jr - New York lawyer. Donation: $1 million

* Morgan Freeman - Hollywood actor. Donation: $1 million

* Amy Goldman - writer and heiress to the New York real estate fortune of Sol Goldman. Donation: $1 million

* Franklin Haney - owner and CEO of FLH Company, a Washington-based real estate company. Donation: $1 million

* Bill Maher - stand-up comedian. Donation: $1 million

* Mel Heifetz - real estate developer and gay activist. Donation: $1 million

* Michael Snow - Minnesota lawyer. Donation: $1 million.

* Steven Spielberg - film director. Donation: $1 million.

* Ann Wyckoff - Seattle philanthropist. $1 million.

* Service Employees International Union Committee on Political Education - union representing more than 2 million workers. Donation: $1 million.

* United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry - union representing some 340,000 workers. Total donations: $1 million


AMERICAN CROSSROADS

Total raised as of Sept. 30: $68 million

(Supports Republican candidates for federal offices)

* Harold Simmons - Total donations together with Contran Corp: $15.5 million

* Bob Perry - Total donations: $6.5 million

* Robert Rowling - an Irving, Texas, businessman and a conservative and active Republican donor. His company, TRT Holdings Inc, which runs Omni Hotel and Gold's Gym chains, is also a donor. Total donations: $4 million

* Joe Craft - billionaire coal executive from Tulsa, Oklahoma, and CEO of Alliance Holdings, which is also a donor. Total donations: $2.1 million

* Jerry Perenchio Living Trust - a trust of billionaire television tycoon A. Jerrold Perenchio, who is a former chairman of Spanish-language broadcaster Univision. Donation: $2 million

* Crow Holdings - Dallas-based real estate investment firm. Total donations: $1.5 million

* Weaver Holdings and Weaver Popcorn - Indiana-based company specializing in popcorn. Total contributions: $1.9 million

* Stephens Inc - a Little Rock, Arkansas, broker dealer. Total donations: $1.3 million

* Armstrong Group - telecommunications conglomerate in Pennsylvania. Donation: $1.3 million

* JWC III Revocable Trust - Donatoin: $1.3 million

* Robert Brockman - executive at Ohio-based Reynolds and Reynolds. Similarly to Restore Our Future, three firms sharing a P.O. Box - CRC Information Systems Inc, Fairbanks Properties LLC and Waterbury Properties LLC - split the donation three ways. Total donations: $1 million

* Whiteco Industries - Indiana-based company involved in advertising, construction, entertainment and hotels. Donation: $1 million

* The Mercury Trust - entity linked to California private equity firm of Saul Fox. Donation: $1 million

* Clayton Williams Energy Inc - Midland, Texas-based drilling company. Donation: $1 million

* Jay Bergman - of PETCO Petroleum Corporation. Donation: $1 million

* Kenneth Griffin - Citadel Investment Group chief executive. Total donations: $1 million

* Wayne Hughes - Founder of Public Storage. Total donations: $1 million

* John Childs - Chairman and CEO of Boston-based JW Childs Associates. Total donations: $1 million

* Philip Geier - New York executive. Total donations: $1 million

* Irving Moskowitz - a Florida bingo magnate who runs a charity in California and is known for his support of Jewish settlers in East Jerusalem. Donation: $1 million

* Robert Mercer - co-CEO of hedge fund Renaissance Technologies. Donation: $1 million (Reporting by Patrick Temple-West, Alexander Cohen and Alina Selyukh; editing by Todd Eastham)

NEWS,22.09.2012

Afghanistan in flux as U.S. surge troops exit

The U.S. military says it has now fully withdrawn the last of the 33,000 "surge troops" sent to pacify Afghanistan two years ago, but they are leaving behind an uncertain landscape of rising violence and political instability that threaten to undo considerable gains in security, particularly in the former Taliban strongholds in the south and southwest.As the troops head for home, a good week ahead of schedule, the U.S. coalition and its Afghan partners are bedeviled by a host of problems.The tempo and audacity of Taliban attacks have increased. Insider killings of Americans by Afghan troops have raised tensions between the allies, forcing severe cutbacks in strategically vital training programs. Both governments are arguing publicly over whether to keep battlefield prisoners locked up without trial, while nervous officials on all sides are worrying that riots over an inflammatory anti-Muslim video, which have killed dozens in other countries, will break out in Afghanistan.Friday's milestone, which still leaves 68,000 U.S. troops in Afghanistan, was announced on the other side of the planet by Defense Secretary Leon Panetta, during a trip to New Zealand, while both U.S. and Afghan officials in Kabul studiously ignored the moment, at least in public.Some pro-government Afghans boasted it showed their own forces were ready to take over, while pro-Taliban forces exulted that they were not, but most Afghans just worried about what it would really mean for the final two years of the U.S. presence in the country."What did the surge give us?" a senior U.S. official reflected Friday, speaking anonymously as a matter of military policy. "We're going to hit a point where, I won't say that's as good as it gets, but now it's up to them to hold what we gave them. Now, really, it's Karzai's turn."No one claimed there was not a great deal yet to be done against an insurgency that its foes describe as tenacious and determined. "They're not going to go away for years," the senior official said. "Every fighting season the Taliban, or some number of them, come out of the corner and they're ready to fight again."Both U.S. and Afghan officials have acknowledged the seriousness of the green on blue attacks, which this year have seen the killings of more than 50 U.S. soldiers at the hands of their Afghan allies.

US Navy's new floating base gets a workout in Gulf 

A new, key addition to American-led naval efforts to ensure Mideast oil keeps flowing has emerged as an unusual mix of a ship combining decades' worth of wear and tear with state-of-the-art technology and a largely civilian crew.After winning a reprieve from the scrapyard, the USS Ponce was reborn through a rush retrofit earlier this year and turned into a floating base prowling the waters of the Persian Gulf. It is now getting its biggest workout since refurbishment as the centerpiece for sweeping naval exercises under way that serve as a very public warning to Iran. The Islamic Republic has threatened to shut the Gulf's entrance at the Strait of Hormuz, the route for a fifth of the world's oil supplies, and would likely use mines to do so.Anti-mine divers on practice drills deployed in small boats off the Ponce's stern gate early Saturday, and MH-53 minesweeping helicopters launched from the ship kicked up sea spray as they hauled mine-detecting equipment through the water. Later in the day, a U.S. destroyer pulled alongside, fighter jets roared past and gunners fired thunderous rounds from .50 caliber machine guns during a simulated encounter with a hostile vessel.Senior Navy officials in the Gulf are quick to downplay talk of conflict with Iran, which is locked in a dispute with the U.S. and its allies over Tehran's disputed nuclear program. The West suspects Iran aims to develop a nuclear weapon; Tehran denies the charges.U.S. military officials in the region insist the exercises, which include forces from more than 30 countries, are defensive and not directed at any country. They prefer to focus instead on the Ponce's role as an innovative new tool to help ensure security in the region, and on the need to train with allies to keep sea lanes open.Still, the message is clear."Any extremist group, any country that puts mines in the water would be cautioned" by the exercises, said Marine Gen. James R. Mattis, the U.S. Central Command chief, during his first visit onboard the Ponce since it deployed June 1. "We do have the means to take mines out of the water if they go in. We will open the waterways to freedom of navigation."Military leaders believe the Norfolk, Va.-based Ponce is central to that mission.More than half the length of most U.S. aircraft carriers, the Ponce can accommodate multiple helicopters on deck and small boats in a well deck below.The ship was originally an amphibious transport dock built at the height of the Vietnam War. Those types of vessels are typically used to carry landing forces of Marines.It's now known as the Navy's first "afloat forward staging base-interim," a name given because the Ponce is meant to be a stopgap until a similar base built from scratch is delivered. That won't happen until at least 2015."This will more or less act as a test for using floating platforms in the sea for military operations," Riad Kahwaji, chief executive of the Dubai-based Institute for Near East and Gulf Military Analysis, said of the reconfigured Ponce. "There'll be a lot of defense industry officials observing the performance of this."Much of the original ship remains, including the tight Marine-style bunks stacked four high from floor to ceiling in some parts of the ship. But there are plenty of 21st Century additions too.Berths for around 100 people were removed and replaced with a high-tech joint operations center, where streaming video and data feeds can be shown on flat-screen displays.Powerful MK-38 guns installed during conversion include remotely controlled digital cameras that let operators zoom in on far-off targets of interest. And a ScanEagle surveillance drone launched from and recovered by the ship keeps an eye on the sea for miles around all day long.In its new role, the Ponce is initially intended to be a close-to-the-action support hub for mine-clearing ships, coastal patrol vessels and helicopters. Ships can take on fuel and supplies without having to return to port, and a wide range of repairs can be handled by machinists onboard. That means far less downtime for minesweepers and other vessels using the Ponce as a stopping-off point, according to analysts and Navy officials.The Ponce's Spartan accommodation can also handle hundreds of additional personnel, such as the French anti-mine divers in distinctive camouflage shorts currently onboard. In theory, special operations forces could also fill bunks aboard the Ponce, which is able to launch the small boats and helicopters they often use.There is also the benefit of not needing to secure approval from allied countries where U.S. troops are based before conducting operations from an offshore staging base such as the Ponce."A country that's believed to be friendly to the U.S. could overnight become hostile to the U.S., and this could pose a threat to U.S. operations," Kahwaji said, citing recent violence directed at American embassies in response to an anti-Islam film.Although it is under the command of a Navy captain, most of the Ponce's crew are civilians. It has more than 155 civilian crew members from the Military Sealift Command and 55 Navy sailors, according to the ship's commanding officer, Capt. Jon Rodgers. The number of civilian crew can fluctuate depending on who is onboard.The MSC is normally responsible for running about 110 supply ships and other non-combat vessels for the Navy, but the Ponce's hybrid crew is unusual.Visitors arriving by helicopter are met on the flight deck by some crew in uniform and others in civilian coveralls. Civilian employees keep the floors and toilets clean, and dish out corned beef hash and French toast on the mess deck. Some of the MSC crew members have dreadlocks  a no-no for enlisted sailors and many are in their 40s or beyond. A handful are older than 60.It's not just the civilian crew that's showing its age. The Ponce is among the Navy's oldest ships. Construction began in 1966, and it was commissioned during the Nixon administration in 1971.Rust is prevalent throughout the ship, and many of the fittings retain a Cold War feel."Just walk around and you can see," said Kevin Chavis, 45, a retired Navy electronics specialist from Brooklyn who is now part of the Ponce's civilian crew. "Yeah, it's old. But just like a car, if you change the filters and the oil, it'll keep running."

Chavez's record: an oil bonanza squandered?

 

On the streets of Caracas, vast slums blanket the hillsides while squatters hang laundry in the windows of abandoned buildings. Trash-strewn alleys are riddled with potholes and lined with broken streetlamps. The city's main waterway, the polluted Guaire River, is known more for sewage than swimming.While oil has ushered in spectacular construction projects for glittering Middle Eastern cities, including the world's tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi, it's brought relatively meager changes to Venezuela, which holds the world's largest proven oil reserves.Nearly 14 years after President Hugo Chavez took office, and despite the biggest oil bonanza in Venezuela's history, there's little outward sign of the nearly one trillion petrodollars that have flowed into the country.Venezuela has undoubtedly changed during Chavez's tenure. The populist president has used the oil wealth to buttress his support through cash handouts, state-run grocery stores and a gamut of other social programs. With more money in the economy, incomes are higher and the number of people living in poverty has fallen.Unemployment has dropped from more than 13 percent in 1999 to about 8 percent. The country has also achieved rapid improvement on the U.N. Human Development Index, which measures a range of indicators from living standards to life expectancy."We're applying a successful program successful politically, successful socially, successful economically," Chavez said at a news conference. "With flaws, of course, but it's successful. We're laying the foundations of a historic project that will take our entire lifetime."All of which makes him a tough incumbent to beat in the upcoming Oct. 7 election.Yet some experts say Chavez could have done much more to improve the country's infrastructure, boost its economy and invest in the very oil industry that keeps Venezuela afloat."It's overwhelmingly clear that Venezuela has wasted the windfall," said Francisco Monaldi, an economist and director of the International Center of Energy and the Environment at Caracas' IESA business school. "You should have had much greater economic growth, much greater reduction of poverty."Among Latin American countries, the economies of Brazil, Chile, Peru and Argentina all have expanded more rapidly than Venezuela's since Chavez took office in 1999, recording average growth between 3 and 5 percent a year.Venezuela, by contrast, averaged a 2.8 percent annual increase of gross domestic product between 1999 and 2011, according to International Monetary Fund figures. By that measure, the country was outperformed by every other member of the Organization of Petroleum Exporting Countries except Libya. Even war-torn Iraq posted higher growth.Some Venezuelans, such as tennis instructor Naybeth Figueroa, say Chavez has simply channeled money toward his "Chavista" supporters while neglecting deeply ingrained problems such as soaring murder rates, inflation, crumbling infrastructure and poor government services. Venezuela now ranks among the most violent and corrupt places on earth."The country is falling to pieces," Figueroa said. "Where is the oil money going?"On a rutted unpaved road in the countryside outside Caracas, unemployed housewife Moreli Gonzalez lives in a shack with a dirt floor and walls made of rusting sheets of zinc. She is thankful to Chavez that she now receives a $280-a-month cash benefit through a program called "Mothers of the Neighborhood Mission.""Now we have everything," said Gonzalez, who credits a government education program with helping her learn to read and a state-run grocery down the road that has made food more affordable."We eat better," she said, showing off cupboards filled with bags of rice and pasta. "My children didn't used to eat snacks. Now they eat well."

Finding Poland's sunken royal treasures

Capitalizing on low water levels in Warsaw's Vistula River, police are teaming up with archaeologists to recover gigantic marble and alabaster treasures that apparently were stolen from royals in Poland by Swedish invaders in the mid-17th century.A police Mi-8 helicopter hovered over a riverbed on Thursday, lifting ornaments such as the centerpiece of a fountain with water outlets decorated with satyr-like faces.For police, it was gratifying to provide the chopper and assist Warsaw University archaeologists in "this very important mission of retrievingpriceless national treasures,"saidMariusz Mrozek, a spokesman for Warsaw police.Archaeologists have long known that such well-preserved treasures were located in the riverbed in the Warsaw area, but not exactly where.The archaeologists and frogmen, led by Hubert Kowalski, have previously retrieved some of the stolen stone ornaments from the Vistula riverbed in three years of searching for the sunken treasures. Butonly now, with the river much lower than normal, thanks to recent heat waves and droughts, their findings have become spectacular."This is a precious find. These elements were stolen from Warsaw's royal residences and palaces," said Marek Wrede, a historian at the Royal Castle.The valuable artistic objects marble floor tiles, parts of archways and columns  were robbed from Warsaw by the Swedes who overran the nation in mid-17th century and took heavy loads of spoils from across the country. Today's items probably came from the Royal Castle and from a royal country residence, the Kazimierz Palace.The artifacts probably were being carried by a barge that sank, one of the many such vessels that ferried loot down the river to the Baltic Sea and to Sweden.The find is precious for Poland, which has been repeatedly plundered by neighboring armies over the centuries, including Nazi Germany and the Soviet Red Army during World War II.Kowalski said he knew about the hidden artifacts from 17th century letters that mentioned barges that had sunk in the area.First word of where the treasures might be came in 1906 when sand barge operators discovered some items, but could retrieve only a few.Kowalski said his team is now busy cleaning the newly retrieved items, which are "very well preserved, given the 350 years in water."

Iran accuses Siemens of nuclear sabotage

Iran accused Germany's Siemens on Saturday of implanting tiny explosives inside equipment the Islamic Republic purchased for its disputed nuclear program, a charge the technology giant denied.Prominent lawmaker Alaeddin Boroujerdi said Iranian security experts discovered the explosives and removed them before detonation, adding that authorities believe the booby-trapped equipment was sold to derail uranium enrichment efforts."The equipment was supposed to explode after being put to work, in order to dismantle all our systems," he said. "But the wisdom of our experts thwarted the enemy conspiracy."Siemens denied the charge and said its nuclear division has had no business with Iran since the 1979 revolution that led to its current clerical state."Siemens rejects the allegations and stresses that we have no business ties to the Iranian nuclear program," spokesman for the Munich-based company Alexander Machowetz said.Boroujerdi, who heads the parliamentary security committee, alleged that the explosives were implanted at a Siemens factory and demanded the company take responsibility.Any sale of nuclear equipment to Iran is banned under U.N. sanctions, raising the possibility that if it indeed has some, it may have been acquired through third parties. Boroujerdi did not say when or how Iran obtained Siemens equipment. Despite a wide array of international sanctions, Germany remains one of Iran's most important trading partners.The U.S. and its allies suspect Iran's nuclear work is aimed at producing weapons. Iran says it only wants to enrich uranium for peaceful purposes, and asserts it has been the target of a concerted campaign by Israel, the U.S. and their allies to undermine its nuclear efforts through covert operations.Some Iranian officials have also suggested in the past that specific European companies may have sold faulty equipment to Iran with the knowledge of American intelligence agencies and their own governments, since the sales would have harmed, rather than helped, the country's nuclear program.According to Iran, the alleged campaign has included the abduction of scientists, the sale of faulty equipment and the planting of a destructive computer worm known as Stuxnet, which briefly brought Iran's uranium enrichment activity to a halt in 2010.Iran's nuclear chief, Fereidoun Abbasi, said Monday that separate attacks on Iran's centrifuges through tiny explosives meant to disable key parts of the machines were discovered before the blasts could go off on timers.Abbasi also told the U.N. nuclear agency in Vienna that "terrorists and saboteurs" might have infiltrated the International Atomic Energy Agency, after the watchdog's inspectors arrived at the Fordo underground enrichment facility shortly after power lines were blown up through sabotage on Aug. 17.Iran has repeatedly accused the IAEA of sending spies in the guise of inspectors to collect information about its nuclear activities, pointing to alleged leaks of information by inspectors to U.S. and other officials.Five nuclear scientists and researchers have been killed in Iran since 2010. Tehran blames the deaths on Israel's Mossad spy agency as well as the CIA and Britain's MI-6. Washington and London have denied any roles. Israel has not commented.Boroujerdi said the alleged leaks of nuclear information to its adversaries by the IAEA may finally push Tehran to end all cooperation with the agency."Iran has the right to cut its cooperation with the IAEA should such violations continue," he said.

NEWS, 12.06.2012.

France keen for budgetary union in Europe

 

France said today it would support taking steps towards budgetary integration in Europe, as Berlin wants, but the first priority must be to agree urgent measures to solve the euro zone's debt crisis.Following talks in Paris with his German counterpart Michael Link, France's European Affairs Minister Bernard Cazeneuve said the issues could be worked on in parallel but a fiscal union could not be built until the current crisis has been brought under control.His comments were the latest sign EU leaders are aiming for an ambitious compromise at a June 28-29 summit where France and southern euro zone countries would get an agreement from Berlin to a growth pact and a path towards a banking union and euro bonds in return for a commitment to work towards fiscal union.Separately, a presidential source said President Francois Hollande will outline France's position in a written submission to the European Council in the days ahead."We very much wish to continue the political discussion on the process of greater economic and monetary integration and we believe, like our German friends, in the building of a political Europe," Cazeneuve told reporters, flanked by Link."At the same time, what comes out of integration measures cannot constitute the response to the urgency of the crisis we face," he added. "We continue to say that given the scale of the crisis we need urgent solutions for growth."Hollande, France's first Socialist president in 17 years and little known internationally before he won the May 6 election, has come to power as political woes in Greece and Spain's banking crisis have thrust the euro zone into new turmoil.His challenge to German Chancellor Angela Merkel's insistence on austerity-only policies looks set to result in EU leaders agreeing on a pro-growth pact to accompany a budget discipline pact agreed earlier this year.But calls by Paris and Madrid for a banking union giving a cross-border agency supervisory powers over European lenders and for steps towards mutualised debt have prompted Merkel to demand agreement in return on an eventual fiscal union that would give Brussels more power over budgets.Compromises Hollande is more open to the idea of ceding sovereignty to EU institutions to safeguard the euro than was his conservative predecessor Nicolas Sarkozy, but faces a struggle selling the idea to a public that is angry over economic gloom it increasingly sees as resulting from monetary union.Hollande is on track to win a solid Socialist bloc majority in a parliamentary election runoff on Sunday that should make it easier for him to cut a deal with Berlin, as he would not need the support of eurosceptic hard-left lawmakers.A top European Central Bank policymaker, Joerg Asmussen of Germany, said he expected relations between France and Germany, the EU's biggest powers, would settle down after the election."I am relatively relaxed (about relations)... I am very certain that after that (the election runoff) the German-French engine will function, which is a necessary precondition to get progress in Europe," he told a business gathering in Berlin.The French presidential source said Paris's preparatory text for the June 28-29 treaty would seek to find "positive talking points and areas of agreement". Cazeneuve said the days ahead would be about compromise."We want to find a way for the European Union to overcome this crisis and for that you need compromises," Cazeneuve said."There will be no political integration if we do not suceed in overcoming the financial and economic crisis and we will not manage to overcome the crisis if we do no not have a supplementary process of integration."Earlier on Tuesday, French Finance Minister Pierre Moscovici said an aid package of up to 100 billion euros for Spain's banks was the first step towards a banking union in the euro zone."What we did for Spain was a convincing step forward but we must go further still," he told Europe 1 radio. "It is the moment where Europeans must define the framework for definitively consolidating the euro in political, budgetary and social terms."Germany believes that a banking union - comprising a common financial regulator and a single deposit guarantee and capitalisation fund for banks - could only work if anchored in a fiscal union with powers to stop members breaking budget rules.Hollande is to meet senior German SPD social democrats in Paris on Wednesday for discussions on Europe as the centre-right Merkel battles to obtain the two-thirds majority support she needs to ratify the EU's fiscal pact and pass a bill on the new European Stability Mechanism, a permanent bailout fund.The SPD leaders will sit down with Merkel earlier on Wednesday as they try to agree a proposal for a financial transaction tax that the SPD wants to make a condition for its support for the upcoming European bills.Even before his election, Hollande had the support of Germany's left for his push for growth instruments like joint project bonds to fund infrastructure projets and an increased lending capacity by the European Investment Bank.

Details emerging of plan B for Greek exit

 

European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro.EU officials have told Reuters the ideas are part of a range of contingency plans.They emphasised that the discussions were merely about being prepared for any eventuality rather than planning for something they expect to happen - no one Reuters has spoken to expects Greece to leave the single currency area.But with increased political uncertainty in Greece following the inconclusive election on May 6 and ahead of a second election on June 17, there is now an increased need to have contingencies in place, the EU sources said.The discussions have taken place in conference calls over the past six weeks, as concerns have grown that a radical-left coalition, SYRIZA, may win the second election, increasing the risk that Greece could renege on its EU/IMF bailout and therefore move closer to abandoning the currency.No decisions have been taken on the calls, but members of the Eurogroup Working Group, which consists of euro zone deputy finance ministers and heads of treasury departments, have discussed the options in some detail, the sources said. Belgium’s finance minister, Steve Vanackere, said at the end of May that it was a function of each euro zone state to be prepared for problems.These discussions have been in that vein, with the specific aim of limiting a bank run or capital flight.As well as limiting cash withdrawals and imposing capital controls, they have discussed the possibility of suspending the Schengen agreement, which allows for visa-free travel among 26 countries, including most of the European Union."Contingency planning is underway for a scenario under which Greece leaves," one of the sources, who has been involved in the conference calls, said."Limited cash withdrawals from ATMs and limited movement of capital have been considered and analysed."Another source confirmed the discussions, including that the suspension of Schengen was among the options raised."These are not political discussions, these are discussions among finance experts who need to be prepared for any eventuality," the second source said."It is sensible planning, that is all, planning for the worst-case scenario."The first official said it was still being examined whether there was a legal basis for such extreme measures."The Bank of Greece is not aware of any such plans," a central bank spokesman in Athens told Reuters when asked about the sources' comments.The vast majority of Greeks - some surveys have indicated 75 to 80%- like the euro and want to retain the currency, something Greek politicians are aware of and which may dissuade them from pushing the country too close to the brink.However, SYRIZA is expected to win or come a strong second on June 17.Leader plans to tear up bailout Alexis Tsipras, the party's 37-year-old leader, has said he plans to tear up or heavily renegotiate the 130-billion-euro bailout agreed with the European Union and International Monetary Fund.The EU and IMF have said they are not prepared to renegotiate.If those differences cannot be resolved, the threat of the country leaving or being forced out of the euro will remain, and hence the need for contingencies to be in place.Switzerland said last month it was considering introducing capital controls if the euro falls apart.In a conference call on May 21, the Eurogroup Working Group told euro zone member states that they should each have a plan in place if Greece were to leave the currency.Belgium's Vanackere said two days after that call that it was a basic function of each euro zone member state to be prepared for any eventuality."All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid," he told reporters."We must insist on efforts to avoid an exit scenario but that doesn't mean we are not preparing for eventualities."