NEWS,02.06.2013

Police fire tear gas as protests spread

Turkish police fired tear gas at protesters in Ankara on Sunday while thousands of people occupied Istanbul's main Taksim Square on the third day of mass demonstrations against Turkey's Islamist-rooted government.

Interior Minister Muammer Guler said more than 1 700 people had been arrested in the unrest that has spread to 67 cities nationwide, though most have since been released.

In Istanbul, a sea of protesters from across Turkey's political spectrum flooded Taksim a day after police pulled out of the area, waving flags and chanting "Government, Resign!" and "Istanbul is ours, Taksim is ours!"

From a nearby rooftop, a banner with the words: "Do not surrender" was unfurled.

Taksim has been at the heart of a wave of protests that have spread across the country in the biggest public outcry against Prime Minister Recep Tayyip Erdogan's government since it took power in 2002.

Rights groups have complained about what they said were a "disgraceful" heavy-handed response by police to the demonstrations while Turkey's Western allies appealed for restraint.

The unrest began as a local outcry against plans to redevelop Gezi Park near Taksim, but after a heavy-handed police response quickly snowballed into broader protests against what critics say is the government's increasingly conservative and authoritarian agenda.

Routine

After two days of violence, the situation appeared to have calmed in Istanbul on Sunday after police pulled out of Taksim and officials adopted a more conciliatory tone.

But in Ankara police fired tear gas and used water cannon to disperse about 1 000 protesters who were attempting to march on the prime minister's high-security office, images that were shown live on a television network.

Amnesty International said some protesters had been left blinded by the massive quantities of tear gas and pepper spray used by police.

Amnesty's Europe director John Dalhuisen said police excesses had become routine in Turkey "but the excessively heavy-handed response to the entirely peaceful protests in Taksim has been truly disgraceful."

Human Rights Watch said the number of injured was higher than official figures suggested and that one protester had lost an eye.

Turkey's Nato allies Britain, France and the United States have all urged the Erdogan government to exercise restraint.

German protesters clash with cops

German police used pepper spray and batons against thousands of anti-capitalist demonstrators from the Blockupy movement on Saturday during a second day of protests in Frankfurt against Europe's austerity policies.
Planned rallies in struggling euro zone members Spain and Portugal drew fewer people than expected, but in Germany's financial capital around 7 000 protesters marched with signs reading "Make love, not war" and "IMF - get out of Greece".
The protest was initially peaceful but small groups of masked protesters then hurled stones and smoke bombs at the police who responded with force.
Several protesters and police officers were hurt before the action died down later in the evening. Police at the scene said several arrests had been made, but could not say how many.
A first day of protests on Friday in Frankfurt succeeded in paralysing some of the city's financial institutions, cutting off access to the ECB's iconic tower office building and Deutsche Bank's headquarters.
Police anger
Police angered marchers on Saturday by halting them before they could pass close to the ECB building after protesters let off firecrackers.
In a statement, Blockupy accused the police of wanting to "escalate" tensions and of blocking a legitimate protest.
"This is scandalous," spokesperson Ani Diesselmann said. "The (original) route was approved by several legal institutions."
Police said officers had been repeatedly attacked by the small group of demonstrators, making it necessary for them to use force and pepper spray.
Protests against the "troika" of international lenders that has bailed out struggling euro zone states - the International Monetary Fund, the European Central Bank (ECB) and the European Union - were planned in several countries on Saturday.
Europe's Blockupy movement was formed after the Occupy Wall Street movement in 2011. They blame the budget cuts and labour market reforms supported by the ECB, the IMF and European financial and political leaders for driving the continent into a recession that has left more than a quarter of Greeks and Spaniards out of work and millions of Europe's poor worse off.
Germany's own economy has been fairly resilient to the crisis and many in Europe's struggling southern states blame Chancellor Angela Merkel for enforcing the painful policies in exchange for EU funds which largely come from Germany.
As well as the ECB, on Friday the Blockupy demonstrators targeted several large commercial banks, stores and Frankfurt airport.

Central Europe hit by floods

Authorities in parts of central Europe issued disaster warnings and scrambled to reinforce flood defences on Sunday as rivers swollen by by days of heavy rain threatened to burst their banks.

Several people have died or are missing in the floods in Germany, the Czech Republic and Switzerland.
Czech officials warned that the waters of the Vltava river could reach critical levels in Prague late on Sunday.
Interim mayor Tomas Hudecek said authorities were considering whether to shut down parts of the capital's subway network and called on people not to travel to the city.
In the nearby city of Trebenice a woman was found dead in the rubble after a summer cottage collapsed due to the raging water, Czech public television reported.
Czech Prime Minister Petr Necas said 200 soldiers had been deployed so far to help local authorities.
In Germany, where at least four people have died or are missing, Chancellor Angela Merkel promised federal support for affected areas and said the army would be deployed if necessary.
Several cities, including Chemnitz in the east and Passau and Rosenheim in the south issued disaster warnings.
Passau, which is located at the confluence of three rivers, could see waters rise above record levels of 2002, said mayor Juergen Dupper.
A German news agency reported that large stretches of the Rhine, Main and Neckar rivers have been closed to shipping.
Evacuations are also taking place in neighbouring Austria and Switzerland.
Meteorologists are predicting the rainfall will ease in the coming days.

14 die in US storms

Tornadoes and floods in the United States killed at least 14 people, including two children, officials said on Saturday, with most of the fatalities in Oklahoma where a monster twister struck last month.
Friday night's storms battered areas in and around Oklahoma City with high winds, heavy rain and hail, much of it near where 24 people were killed in the 20 May tornado.
The Oklahoma Medical Examiner's Office announced nine fatalities in the state and said five of the victims have not been identified, while the sheriffs' offices in towns east of Oklahoma City confirmed two other people had died.
In Missouri, authorities said three people died from severe flooding in the wake of the storms.
Streets turned into rivers, with stranded cars submerged in water as high as their door handles in some places. CNN said a massive sink hole off a major road developed due to the deluge, halting traffic.
The National Weather Service's Storm Prediction Centre in Norman, Oklahoma, warned that the severe weather was shifting eastward again Sunday, with damaging winds and heavy downpours and possibly small hail and isolated tornadoes expected to threaten northern Virginia through Maine.
And northern Mexico was also bracing for severe thunderstorms, strong winds, and possibly hail and tornadoes.
Local broadcaster KOCO reported that 77 people had been admitted to hospitals with storm-related injuries.
Power company OG&E, meanwhile, reported 65 000 outages by late on Saturday, down from a high of 120 000, and the American Red Cross has opened shelters for those in affected areas.

Southern California's wildfire explodes

A fire that destroyed at least five structures and threatened hundreds of others exploded in size overnight, burning dangerously close to two communities north of Los Angeles.

Erratic wind spread the blaze in the Angeles National Forest to nearly 106km² on Sunday, triggering the evacuation of nearly 1 000 homes.

Matt Corelli of the Forest Service said that five structures had been razed by the fire and at least 10 other structures were damaged.

Crews working in steep terrain expected cooler weather after temperatures above 38ºC on Saturday.

The wind pushed the fire up and down steep slopes, creating embers that sparked spot fires in different directions.

The fire was about 20% contained.

A huge plume of smoke could be seen from various parts of northern Los Angeles county and air-quality officials warned against strenuous outdoor activity.

The blaze broke out near a hydro-electric plant near the Los Angeles aqueduct on Thursday, forcing about 200 evacuations in the mountain community of Green Valley.

Evacuations remained in effect for the Cottonwood campground and two youth probation camps along Lake Hughes Canyon Road.

The flames were chewing thick, dry brush that hasn't been burned in about a dozen years.

The cause of the fire was under investigation.

NEWS,12.05.2013

G7 to press on with bank reforms

Group of Seven finance officials agreed on Saturday to redouble efforts to deal with failing banks and gave a green light to Japan's drive to galvanise its economy.
British finance minister George Osborne said the finance ministers and central bankers meeting 40 miles outside London focused on unfinished bank reforms, with signs that plans for a eurozone banking union are fraying.
"It is important to complete swiftly our work to ensure that no banks are too big to fail," Osborne told reporters after hosting a two-day meeting in a stately home set in rolling countryside.
"We must put regimes in place ... to deal with failing banks and to protect taxpayers and to do so in a globally consistent manner," he said.
The emergency rescue of Cyprus after a near meltdown in March served as a reminder of the need to finish an overhaul of the banking sector, five years after the world financial crisis began.
Germany has come under pressure to give more support to a banking union in the euro zone. The plan could help strengthen the single currency area, but Berlin worries it may pay too much for future bank bailouts if it signs up to a scheme to wind up stricken lenders.
While the first step to create a single bank supervisor under the European Central Bank - looks set to be in place by mid-2014, a second pillar, a 'resolution' fund to close failed banks, is in doubt. And there is little prospect that a single deposit guarantee scheme will ever see the light of day.
A senior US Treasury official said the talks at the 17th-century Hartwell House zeroed in on the need not just for better bank supervision but also to clean up balance sheets so lending can pick up.
"There was a sense of urgency among the euro area participants," the official said.
German Finance Minister Wolfgang Schaeuble countered that the eurozone was no longer the main risk to the world economy.
As at previous international meetings, Japan escaped any censure for printing money on a scale that has pushed the yen sharply lower.
Osborne said the G7 - the United States, Germany, Japan, Britain, Italy, France and Canada - reaffirmed that fiscal and monetary policy should be aimed at domestic concerns, not currency manipulation.
"We will not target exchange rates," Osborne said. "I would say that the statement by the G7 of earlier this year was a successful statement and one that has been held to."
The yen hit a four-year low against the dollar on Friday , driven in part by Japanese investors shifting into foreign bonds, a move that had been expected since the Bank of Japan unveiled a massive stimulus plan.
But having urged Tokyo for years to do something to revive its economy, other world powers are not in a strong position to complain now that it is doing so. Then there is the fact that central banks such as the Federal Reserve and Bank of England have printed money in the way the Bank of Japan is.
Japanese Finance Minister Taro Aso said the G7 had levelled no criticism at Japan's monetary policy but Schaeuble said there had been "intense discussions" and that the situation would be monitored carefully.
Growth debate
Debate has also heated up about the need for governments to ease up on austerity, something Germany, Britain and Canada view with caution but Washington, Paris and Rome favour.
Osborne said there was less disagreement about whether governments should focus on debt-cutting or growth-boosting measures than is commonly assumed.
"Everyone is clear that there needs to be credible medium-term fiscal consolidation ... We also agreed that there needs to be flexibility," he said. "Growth prospects remain uneven and we can't take the global recovery for granted."
But his suggestion before the meeting that it should consider what more monetary policy could do to support economic recovery appeared to fall on deaf ears.
"There wasn't any call to do more," European Central Bank chief Mario Draghi told reporters after the meeting.
"It is quite clear that all central banks have done a lot, each one within its own mandate. So (the meeting) was just taking note of this ... All of us have really been active."
Several officials from visiting delegations questioned why Britain had called the gathering just three weeks after they and others met at International Monetary Fund meetings in Washington, but Bank of England Governor Mervyn King said the informal nature of the discussions had paid dividends.
"Freed from burden to agree a communique, the principals engaged more with each than I can recall before and as a result genuinely made real progress in taking forward some of the questions and issues that are facing the G7," he said.

Experts cautious over equities rally

Optimism is blowing through stock markets around the world, lifting many of them to record high levels but this contrasts with widespread economic gloom and leads some analysts to wonder if some of it is just hot air.
Records have been created with increasing speed since the beginning of May.
The main DAX index in Frankfurt has reached a new record high level, and the markets in London and Tokyo have returned to the levels reached in October 2007 just before the financial crisis began.
Wall Street in New York is leading the way and sets a fresh record almost every day.
But the stock market in Paris lags behind. The main CAC 40 index has just risen to the level last reached in the middle of 2011 and is far below the record high level of almost 7,000 points set in October 2000, and still trails the 4,332 points registered just before the collapse of Lehman Brothers bank in the United States in September 2008.
Analysts at Swiss Life private investment managers commented recently that the markets "are swimming in the midst of paradox", questioning the strong rises at a time when the global economic situation is a long way from being stabilised and is even deepening in some places, including in Europe.
In financial circles, experts give various explanations for the rise of stock markets in mature economies.
Some hold that it is an artificial bull market driven by huge amounts of money pushed into economies by central banks. Others say that the rises are justified because investors are anticipating a recovery of the world economy and a recovery of those stocks which have fallen heavily.
"The dichotomy between the real economy and the financial sphere is widening and this is worrying," commented Guillaume Garabedian, a portfolio manager at French brokers Meeschaert Gestion Privee.
He held that that stock markets were rising mainly because central banks had been applying highly accommodating monetary policies, reducing their key interest rates, and pushing huge amounts of liquidity into the financial sector.
All classes of assets have been boosted by this, even the riskiest assets such as debt bonds issued by crisis-hit countries in southern Europe which are able to place their bonds despite still being in difficulty.
The rise of asset prices could even lead to a new financial bubble, some analysts are beginning to warn.
At Capital Spreads, Jonathan Sudeira said that "despite the efforts of the central banks, the volume of trading is falling and the high levels reached by some shares is beginning to look unjustified for traders who are being asked at the same time not to take account of the economic situation."
The "bulls", meaning those who think that share prices will continue to rise on a healthy and justified basis, also have their arguments. At the moment, they seem to have the upper hand.
"Extremely favourable" context
Portfolio managers in dealing rooms say that investors are encouraged by signs that the US economy is recovering, by underlying strength of activity in Germany, encouraging statements by the leaders of big companies about the outlook for the end of the year, and by the removal of the risk that the eurozone might collapse.
At French Natixis bank, economist Philippe Waechter said that apart from the policies of the central banks, the situation in the United States, still the guiding light for stock markets around the world, was satisfactory and explained why optimism had lifted the indices.
"There is growth, certainly it is moderate, but it is there and so there is positive anticipation," he said.
He noted that portfolio managers were looking for good rates of return from the shares they hold and consequently were inclined to go for riskier shares which offered higher returns.
In addition, companies which were cautious about trying to expand their businesses, were buying their own shares which pushed up the value of those stocks.
"Overall, we are in a context which is extremely favourable for stock markets," he said.
Garabedian said that the question boiled down to analysing the fundamental causes of the rise.
"Because if the markets are rising for reasons which are not sufficiently viable, the correction will be severe," he warned.

Clinton did not make Benghazi call

A seasoned diplomat who penned a highly critical report on security at the US consulate in Libya that was attacked last year defended his scathing assessment on Sunday but absolved then-Secretary of State Hillary Clinton.

Thomas Pickering, whose career spans four decades, stood by his conclusion in the report that decisions about the consulate were made well below the secretary's level.
His comments during several television show appearances were unlikely to quiet renewed Republican demands for accountability for the attacks in Benghazi that left four Americans dead, including US Ambassador Chris Stevens. Democrats say Republicans are trying to exploit the Benghazi deaths to undercut Clinton, an early favourite for the Democratic presidential nomination in 2016.
"We knew where the responsibility rested," said Pickering, who headed the Accountability and Review Board that investigated the attack, along with retired Admiral Mike Mullen, the former chair of the Joint Chiefs of Staff.
"They've tried to point a finger at people more senior than where we found the decisions were made," Pickering said of Clinton's critics.
Pickering and Mullen's report released in December found that "systematic failures and leadership and management deficiencies at senior levels" of the State Department meant that security was "inadequate for Benghazi and grossly inadequate to deal with the attack that took place."
The Obama administration has tried to move past the controversy, but a steady drip of new information is fuelling Republican claims that the government initially misled the public about the nature of the assault.
The House Oversight and Government Reform Committee last week heard a riveting minute-by-minute account from a former top diplomat in Libya about the two night time attacks on 11 September, 2012. Gregory Hicks, a former deputy chief of mission to Libya, detailed his phone conversations from Tripoli with Stevens.
Hicks and two other State Department witnesses criticized the Pickering and Mullen's review. Their complaints centred on a report they consider incomplete, with individuals who weren't interviewed and a focus on the assistant secretary level and lower.
Cover-up
The hearing produced no major revelation but renewed interest in the attacks that happened during the lead-up to the November 2012 presidential election.
The top Republican on the oversight committee, Republican Darrell Issa, said he wants sworn depositions with Pickering and Mullen. Issa said his panel has not been provided sufficient details on the State Department review, such as a list of everyone the investigators interviewed or a full transcript of those conversations.
"We want the facts. We're entitled to the facts. The American people were effectively lied to for a period of about a month," Issa said.
Republicans are insisting on exploring what happened at the consulate, what might be done to prevent future such attacks and what political calculations went into rewriting talking points the US Ambassador to the United Nations, Susan Rice, used on news shows the Sunday after the attack.
A series of e-mails that circulated between the State Department and the CIA led to weakened - and, in some cases, wrong - language that Rice used to describe the assault during a series of five television interviews the Sunday after the attacks.
"I'd call it a cover-up," said Senator John McCain, a Republican. "I would call it a cover-up in the extent that there was wilful removal of information, which was obvious."
2016 campaign
"I was surprised today that they did not probe Secretary Clinton in detail," Senator Kelly Ayotte said, of the review board.
One Republican eyeing a White House run, Senator Rand Paul, said at a public appearance that he thinks the Benghazi attack "precludes Hillary Clinton from ever holding office".
Clinton's allies said Republicans were looking to weaken her ahead of a potential 2016 campaign.
"This has been caught up in the 2016 presidential campaign, this effort to go after Hillary Clinton," said Senator Dick Durbin, a Democrat. "They want to bring her in because they think it's a good political show and I think that's unfortunate."

NEWS,16.01.2013

Obama unveils $500m gun-control proposals

President Barack Obama on Wednesday launched the most sweeping effort to curb US gun violence in nearly two decades, announcing a $500m package that sets up a fight with Congress over bans on military-style assault weapons and high-capacity ammunition magazines just a month after a shooting in Connecticut killed 20 school children.Obama also signed 23 executive actions, which require no congressional approval. But the president, speaking at the White House, acknowledged the most sweeping, effective actions must be taken by lawmakers."To make a real and lasting difference, Congress must act," Obama said. "And Congress must act soon." He added, "I'll put everything that I've got into this."Obama was joined by children who wrote him letters about gun violence in the weeks following the Connecticut shooting. Families of the children killed in the shooting, as well as survivors, were also in the audience.The president appealed to the nation's conscience, but his announcement promises to set up a bitter fight with a powerful pro-gun lobby that has long warned supporters that Obama wanted to take away their guns.The US has the highest rate of gun ownership of any country in the world, and pro-gun groups see any move on gun restrictions as an offense against the right guaranteed by the Second Amendment of the US Constitution. Critics counter that the country's founding fathers never could have foreseen assault weapons more than two centuries ago, when guns were intended for the common, not individual, defence, guns were often stored in community areas and rifles fired one shot at a time."This is the land of the free and the home of the brave, and always will be," Obama said, acknowledging the right to possess and bear firearms. "But we've also long realised ... that with rights come responsibilities."Emotions have been high since the Connecticut shooting, which Obama has called the worst day of his presidency. He largely ignored the issue of gun violence during his first term but appears willing to stake his second term on it now. He'll have to contend with looming fiscal issues that have threatened to push whatever he proposes aside, at least for a while.Gun control advocates also worry that opposition from the powerful National Rifle Association (NRA) and its allies in Congress will be too great to overcome. The NRA released an online video on Wednesday that called Obama an "elitist hypocrite" for having armed Secret Service agents protect his daughters at school while not committing to installing armed guards in all schools. The NRA insists that the best way to prevent more mass shootings is to give more "good guys" guns.The White House called the NRA video "repugnant and cowardly”.The public appears receptive to stronger federal action on guns, with majorities of Americans favouring a nationwide ban on military-style rapid-fire weapons, according to a new AP -GfK poll. Three-quarters of Americans said they reacted to the Connecticut shooting with deep anger, while 54% said they felt deeply ashamed it could happen in the US.The poll also shows 51% said they believed laws limiting gun ownership infringe on the public's right to bear firearms.White House officials, seeking to avoid setting the president up for failure, have emphasised that no single measure - even an assault weapons ban - would solve the scourge of gun violence. But without such a ban, or other sweeping Congress-approved measures, it's unclear whether executive actions alone can make any noticeable difference.The president asked Congress to renew the ban on high-grade, military-style assault weapons that was first signed into law by then-president Bill Clinton in 1994, but expired in 2004. Obama also called for limiting ammunition magazines to 10 rounds or fewer, and he proposed a federal statute to stop purchases of guns by buyers who are acting for others.The president also called for a focus on universal background checks. About 40% of gun sales take place without background checks, including those by private sellers at gun shows or over the internet, according to the Brady Campaign to Prevent Gun Violence.The president's framework is based on recommendations from Vice President Joe Biden, who led a wide-ranging task force on gun violence. Beyond the gun control measures, Biden also gave Obama suggestions for improving mental health care and addressing violent images in video games, movies and television.States and cities have been moving against gun violence as well. New York Governor Andrew Cuomo on Tuesday signed into law the toughest gun control law in the US, and the first since the Connecticut shooting. The law includes a tougher assault-weapons ban and provisions to try to keep guns out of the hands of mentally ill people who make threats.The NRA criticised the bill, saying in a statement, "These gun control schemes have failed in the past and will have no impact on public safety and crime."In Washington, it's unclear how much political capital Obama will use in pressing for congressional action.The White House and Congress will soon be consumed by three looming fiscal deadlines, each of which is expected to be contentious. And the top Republican in the Senate, Mitch McConnell, has warned the White House that it will be at least three months before the chamber considers gun legislation.Congress, in any case, can move slowly. The chair of the Senate Judiciary Committee said on Wednesday he'll begin hearings in two weeks on gun safety proposals. Democratic Senator Patrick Leahy, a gun owner, said he envisions a series of hearings examining violence in popular media and how to keep guns safe, among other topics.Leahy's plan could take more time than Obama has urged.Obama's long list of executive orders includes the following:Ordering tougher penalties for people who lie on background checks and requiring federal agencies to make relevant data available to the federal background check system.Ending limits that make it more difficult for the government to research gun violence, such as gathering data on guns that fall into criminal hands.Requiring federal law enforcement to trace guns recovered in criminal investigations.Giving schools flexibility to use federal grant money to improve school safety, such as by hiring school resource officers.Giving communities grants to institute programs to keep guns away from people who shouldn't have them.

Republicans ready for debt-ceiling battle

Republican lawmakers are preparing to introduce legislation to direct the US Treasury to make interest payments on American bonds first and then prioritise other government outlays in case Congress does not raise the debt ceiling.Supporters of the idea see it as a politically palatable alternative to default, which could rattle markets as occurred in the summer of 2011. The likelihood of another market-unsettling event is challenging Republicans to find another idea as they use the debt ceiling as leverage to extract spending cuts from President Barack Obama.But critics, including some Republicans, say prioritising payments is largely unworkable and would not fool the markets.The Treasury hit the $16.4tn debt ceiling, or the legal amount it is allowed to borrow, on New Year's Eve and started moving funds around so that the government can continue paying its bills. But the department said it will run out of funds as early as mid-February. Among those advocating the approach is Republican Senator Pat Toomey of Pennsylvania, who is expected to reintroduce legislation next week to instruct the Treasury to make sure bond-holders, got paid first if Congress does not raise the debt ceiling by the deadline.In the House of Representatives, Arizona Republican David Schweikert introduced legislation that would force the Treasury to prioritize payments to bond-holders, Social Security recipients and military salaries."No one is talking about default except for the president," said Patrick Tiberi, a Republican Representative from Ohio who heads a tax-writing subcommittee."He doesn't need to default because he has enough revenue, money coming in from the taxes that you guys pay to pay bills," Tiberi told reporters on Tuesday."Ninety-nine percent of my constituents would say that sending out Social Security payments and keeping veteran hospitals open is a bigger priority than national parks," he said. But former advisers to Republican President George W Bush say the idea is unworkable for a number of reasons, including the fact that tax revenue does not come in at the same rate that payments are due."Prioritisation is impossible," said Tony Fratto, who was Deputy Press Secretary for Bush and a spokesperson on economic policy who fought through approximately seven debt limit increases with Congress. "Is the government really going to be in the position of withholding benefits, salaries, rent and contract payments, in order to pay off Treasury bond-holders? That would be a political catastrophe," Fratto said.Keith Hennessey, Bush's National Economic Council director, said prioritisation was a bad idea that could increase credit risk and said it would be irresponsible."Payment prioritisation doesn't stop payments, it just delays them. Then the aggrieved party sues the government, and probably wins, and it turns into a bloody mess," Hennessey, now an economist at Stanford, said in a blog post this week.Even when the government was operating under a budget surplus, as it did from 1998 through 2001 under President Bill Clinton, the Treasury still had to borrow or issue debt to make its regular payments because its income fluctuates month-to-month.The department is expected to run out of ways to stave off a default as early as mid-February, and Republican lawmakers say they will refuse to give the Obama administration the votes needed to raise the debt cap unless Democrats agree to spending cuts and changes to federal benefits programs.On 15 February, the government is expected to take in about $9bn in revenues and is required to pay bills amounting to $52bn, according to the think tank the Bipartisan Policy Centre, which analysed Treasury's cash flows. The Treasury Department has said ensuring that bond investors got paid before others would be a "default by another name."And in the past, Treasury officials have said the department lacks the formal legal authority to establish priorities to pay obligations, according to the non-partisan Congressional Research Service.

Germany to bring gold home

Germany's central bank is hauling home tens of thousands of gold bars currently stored in the US and France, in a high-security operation spread over eight years. All 374 tons of German gold held in Paris vaults will be moved back to the Bundesbank's vaults in Frankfurt by 2020, the bank said on Wednesday. A further 300 tons of gold stored in New York will also be brought back.In total, the shipments are worth $36bn at current market prices and represent about 19% of Germany's gold reserves - the world's second-largest after the United States.Once the shipment is complete, Frankfurt will hold half of Germany's 3 400 tons of reserve gold - currently worth about $183bn - with New York retaining 37% and London storing 13%.But don't expect the Bundesbank to reveal how it's going to keep the valuable cargo safe on its way back to Germany - especially after the stunning raid of a Berlin bank earlier this week in which burglars tunnelled 30m to reach the safety deposit room."For security reasons we can't discuss that, partly to protect the gold, partly to protect the staff that will be carrying out the transfer," said spokesperson Moritz August Raasch."But of course since we transport large sums of money around Germany every day, we've got a certain amount of experience with this."During the Cold War, Germany kept most of its gold abroad for fear it could fall into the hands of the Soviet Union if the country was invaded.Another reason was that it's easier to swap the reserves for foreign currency in London, Paris and New York, where gold is traded.Since France, like Germany, switched to the euro more than a decade ago, storing gold in Paris was no longer necessary, the Bundesbank said.The move follows criticism last year from Germany's independent Federal Auditors' Office, which concluded that the central bank failed to properly oversee its gold. The auditor suggested the central bank should carry out regular inspections of the gold held abroad.The auditors' report stunned Germany, where the Bundesbank routinely tops polls of the nation's most trusted institutions. The central bank was taken aback and maintained it didn't see the need for more scrutiny in overseeing the reserves, saying "there is no doubt about the integrity of the foreign storage sites."But several politicians jumped on the issue and called for some of the reserves to be repatriated.The Bundesbank isn't taking any chances should anything happen to the gold on its way back to Frankfurt.

Renewed talks on Iranian nuclear probe

Senior UN investigators opened a new round of talks on Wednesday with Iranian officials in Tehran in the hopes of restarting a probe into allegations that the Islamic Republic carried out atomic bomb trigger tests and other suspected weapons-related studies. The semi-official ISNA news agency reported that negotiations started at the headquarters of Iran's Atomic Energy Organisation. It gave no further details.The UN meetings are considered an important test of Iran's willingness to address Western concerns before the possible resumption of wider dialogue with the US and other world powers.Negotiations with the six nations - the US, Russia, China, Britain, France and Germany - fell apart more than six months ago and Iran has proposed getting them back on track, perhaps as soon as later this month.The US and others hope the talks will result in an agreement by the Islamic Republic to stop enriching uranium to a higher level that could be turned relatively quickly into the warhead-grade material.Iran denies such aspirations, insisting it is enriching only to make reactor fuel and to make isotopes for medical purposes.ISNA said EU Foreign Policy Chief Catherine Ashton has agreed restart the next round of world power talks with Iran on 28-29 January, but no decision has yet been made on the venue. The last round, held in Moscow in June, ended in stalemate.The official IRNA news agency, however, said the talks may not resume until early February.Before departing on Tuesday for Iran, UN team leader Herman Nackaerts said the International Atomic Energy Agency hoped to "finalise the structured approach" that would outline what the agency can and cannot do in its investigation.The UN nuclear watchdog wants to revisit Parchin, a military site southeast of Tehran, to probe allegations that Iran may have tested components needed to develop a nuclear weapon. Tehran has steadfastly denied any such activity.Iran says IAEA's suspicions are based on forged intelligence provided by the CIA, the Israeli Mossad, Britain's MI-6 and other intelligence agencies, and that Tehran has not been allowed to see the materials to respond to them.The IAEA also is trying to follow up other suspicions, including whether Iran did computer modelling of nuclear warhead core. The agency says it has intelligence information indicating Iran carried out preparatory work for a nuclear weapons test, and development of a nuclear payload for Iran's Shahab 3 intermediate range missile - a weapon that can reach Israel.Iranians say they have a bitter memory of allowing IAEA inspections and providing replies to a long list of queries over its nuclear program in the past decade. Now, Tehran says such queries should not be revived.Iran's Foreign Ministry spokesperson Ramin Mehmanparast said on Tuesday that Iran provided detailed explanations to IAEA questions on six outstanding issues in the past but instead of giving Iran a clean bill of health, the agency levelled new allegations on the basis of "alleged studies" provided by Iran's enemies.Iran uses that term to refer to allegations about Parchin and other claims that it says the IAEA levels only to keep the issue alive.Tehran has in the past allowed IAEA inspectors twice into Parchin, but now it says any new agency investigation must be governed by an agreement that lays out the scope of such a probe."Obligations of the other party must be clearly specified. If a claim is to be raised on a spot in Iran every day and [the UN agency] seeks to visit our military facilities under such a pretext... this issue will be unending," Mehmanparast said on Tuesday.President Mahmoud Ahmadinejad acknowledged on Wednesday that sanctions have slowed down Iran's growth and disrupted its foreign trade and said the country must move away from a dependence on oil revenues to overcome sanctions.Addressing parliament, Ahmadinejad said "structural changes" are needed in Iran's economy to overcome the sanctions.Iran is under toughed Western oil and banking sanctions over its refusal to halt uranium enrichment. The US and its allies fear Iran may ultimately be able to develop nuclear weapons, a charge Tehran denies.

NEWS,20.12.2012

US Budget talks turn frosty

Momentum stalled on Wall Street as did budget talks between Democrats and Republicans aimed at preventing the US from falling over a fiscal cliff at the end of the month. Today Republicans in Congress will vote on House Speaker John Boehner's plan to raise taxes on incomes over US$1 million, a plan President Barack Obama would veto as he's nows seeking a US$ 400,000 threshold. Officials from Obama's administration told leaders of US business and financial-services groups that negotiations with Boehner have deteriorated in the last 24 hours, Bloomberg News reported, citing a person familiar with the meeting. "The market still believes that there will be an announcement of some sort. But as the clock is ticking, the most you're going to get is a stop-gap measure," Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. Whether those expectations will prove correct is increasingly challenging to ascertain."It is very difficult to say if the optimism out there is warranted," Alec Young, global equity strategist at S&P Equity Research in New York. "We don't know what's going on behind the scenes, and that makes it very difficult to account for all the uncertainty out there."In afternoon trading in New York, the Dow Jones Industrial Average gained 0.11 percent and the Standard & Poor's 500 Index rose 0.09 percent. The Nasdaq Composite Index slipped 0.14 percent. The latest data showed that the US economy expanded 3.1 percent in the third quarter-stronger than previously estimated, and that existing home sales rose a better-than-expected 5.9 percent in November. However, the number of Americans filing new claims for jobless benefits climbed more than predicted in the latest week."It is great to see this kind of growth, but investors know it could all disappear if there's no deal on the cliff," Todd Schoenberger, managing partner at LandColt Capital in New York. "Macro data may be on the back burner for a while." In Europe, the Stoxx 600 Index closed with a gain of almost 0.1 percent for the day. Shares in Frankfurt and Paris eked out an advance of nearly 0.1 percent, while those in the UK slipped by a similar narrow margin.UK retail sales unexpectedly shrank in November, raising concerns the nation's economic outlook is darkening. "The economic outlook has got worse and consumers are probably still really uncertain," Rob Wood, an economist at Berenberg Bank in London and a former Bank of England official, told Bloomberg. "There's no good news ahead for them in the near term."

US fiscal cliff talks falter

US President Barack Obama and House Speaker John Boehner duelled over the fiscal cliff on Wednesday, and despite narrowing differences remained stubbornly at odds over how to avoid looming tax hikes and spending cuts. Obama leaned heavily on Republicans to end the stalemate and compromise on a deficit reduction deal to avert the so-called "fiscal cliff," saying he hoped a year-end deal was possible. But Boehner pressed ahead with a controversial "Plan B" that extends tax breaks for everyone earning less than $1m per year, and said the House would pass the measure Thursday despite Obama threatening a veto."The principal that rates are going to need to go up he conceded. I said I'm willing to make some cuts," Obama told reporters. "What separates us is probably a few hundred billion dollars. The idea we would put our economy at risk because you can't bridge that gap doesn't make a lot of sense."The two sides have struggled over how to prevent tax hikes on all Americans and federal spending cuts that kick in beginning January 1.Obama has offered to extend Bush-era tax breaks for households making under $400,000 a year as part of a 10-year deficit reduction plan.Boehner presented his counter-offer of extending the tax breaks for everyone making under $1m annually. Both offers have been summarily rejected, although each side says talks are ongoing.Despite the brinksmanship pushing right up to the deadline, Obama characterized Republican refusal to acquiesce to his plan as "puzzling," adding that there was "no reason why we should" tumble over the fiscal cliff."At some point," Obama said, "there's got to be... a recognition on the part of my Republican friends that, you know: take the deal."Boehner has said he would be satisfied with a balanced $1 trillion in tax revenues and $1 trillion in spending cuts, much of it from entitlement programs like Medicare, as part of a 10-year deal.He has dismissed the latest White House offer as including $1.3 trillion in new revenues, with $850bn in net spending reductions.After Obama's White House appearance, Boehner called a snap press conference to throw down the gauntlet, saying the House would pass his "permanent tax relief" for 99.81% of Americans."Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history."Democratic Senate Majority Leader Harry Reid said it had no chance of passing in the chamber.Plan B has puzzled many because it offers no spending cuts - the idea is that those could be finalized early in 2013 and he could be seen as encouraging anti-tax Republicans to effectively vote for a tax hike on the wealthy."What is the speaker trying to prove?" asked an exasperated House Democratic leader Nancy Pelosi.Obama, she said, "keeps opening doors for the speaker to go through," but Boehner's vote announcement "just slammed the door in the president's face."But Pelosi was careful to say she remained optimistic about a year-end resolution that could pass both chambers of Congress."Let's be positive. We're hoping to have an agreement," she said.Boehner risks a backlash by some conservative groups who see his extension of tax breaks for those earning up to $1m as a mere "bargaining tactic" that does not come close to solving the fiscal crisis."We don't buy into the Washington-speak, suggesting that these are actually tax cuts," Andy Roth, vice president of government affairs for the the conservative Club for Growth, which opposes the bill.But Americans for Tax Reform, headed by Grover Norquist whose anti-tax pledge has been signed by most Republicans in the House, has given lawmakers the green light, saying Boehner's plan technically does not raise taxes.Top business representatives met senior Obama aides at the White House later on Wednesday including Treasury Secretary Timothy Geithner.Senior officials told the business leaders, including Tom Donohue from the US Chamber of Commerce and Tim Pawlenty of the Financial Services Roundtable, that Boehner's plan could put the US economy on a path to go over the fiscal cliff, said sources familiar with the consultations.Obama acknowledged that part of the hesitation about signing on to some of the steepest deficit reduction in decades might lie with Republican refusal to cooperate with him."But you know, at some point they've got to take me out of it and think about their voters, and think about what's best for the country," he said.

Australia abandons budget surplus plans

Australian Treasurer Wayne Swan on Thursday conceded for the first time he was unlikely to deliver a budget surplus this financial year, a backdown the opposition called "humiliating".Earlier this year, Swan declared the "deficit years of the global recession" over and since then he has insisted a surplus was on the cards, despite plunging commodities prices sending clear signs that all was not well.The government of Prime Minister Julia Gillard had forecast a surplus of Aus$1.1bn for 2012/13, hoping to salvage its flagging popularity among voters with an election due next year. Swan's climb down came after the Finance Department's latest monthly statement showed tax revenue in the first four months of the financial year was down Aus$3.9bn on expectations. "That's a really big hit to revenue, it's a huge whack to revenue," Swan told reporters. "Obviously dramatically lower tax revenue now makes it unlikely that there will be a surplus in 2012/13."He said volatility in the global market, combined with lower commodity prices and the high Australian dollar had created a "very unusual" situation."That unusual combination of events has weighed heavily on our revenues, particularly our business tax revenues," he said. Swan declined to speculate on the magnitude of any deficit."At the end of the day, I don't care about the political outcomes, I care about the economic outcomes," he said. "And the responsible course of action here in terms of the economic jargon is to let the automatic stabilisers work on the revenue side of the budget."The conservative opposition said it was another broken promise. "What this demonstrates is you just can't trust this government to manage the economy and you just can't trust this government to tell the truth," opposition leader Tony Abbott said. In the May budget, Swan announced the surplus plans funded by deep cuts to defence and foreign aid spending. He vowed an ambitious Aus$33.6bn in savings, slashing Aus$5.5bn from military spending and trimming Australia's overseas aid by Aus$2.9bn, along with a raft of other reforms to tax and welfare benefits.

Death penalty moratorium in UN

A record 111 countries voted on Thursday for a moratorium on capital punishment at a keynote UN General Assembly human rights meeting. Although not legally binding, campaigners say the vote held every two years sends a strong signal to the slowly shrinking number of nations including China, Iran and the United States that still execute prisoners.There were 111 votes in favour of a moratorium, four more than in 2010.Among the 41 countries that voted against the moratium were the United States, China, Japan, India, Iran, North Korea and Saudi Arabia. Thirty-four countries abstained. European nations have pressed hard for votes backing a moratorium. But Norway's ambassador Geir Pedersen said the growing numbers backing an end to capital punishment show "this is no longer dominated by western countries. This is a global campaign." "The importance of the vote is that it sends a very strong message to the international community across the board," Pedersen. "The General Assembly is the one place where all nations are represented and you have a strong majority in favor of a moratorium." "There is a global trend toward fewer countries executing people and for us, it is an important issue of principle," the ambassador added. Pedersen said that when he raises objections to the death penalty in bilateral talks with countries that impose capital punishment, "we have the feeling that they are on the defensive."About 150 countries now have a moratorium or an outright ban on capital punishment. Just 21 nations were reported to have carried out executions in 2011, according to rights groups.But the rights groups said the countries that still carry out executions remain hardcore. China executes thousands of prisoners a year, rights groups say, and Iran put to death more than 650 people in 2011, making it the highest per capita executioner. Some countries defended maintaining their capital punishment at a UN committee meeting last month where 110 countries voted for a moratorium. Japan said it had to keep the possibility of hanging prisoners because "heinous" crimes are still being committed. Thursday's vote was held a day after UN Human Rights Commissioner Navi Pillay called on Iraq to move toward abolishing the death penalty. Iraq executed 70 people in the first six months of this year, compared to 67 for the whole of 2011, and 18 in 2010, according to the UN mission in the country. "The number of executions so far in 2012, and the manner in which they have been carried out in large batches, is extremely dangerous, cannot be justified, and risks seriously undermining the partial and tentative progress on rule of law in Iraq," Pillay said. A world congress against the death penalty is to be held in Madrid in June.