NEWS,11.12.2012

  Italy petrol strike threatens to hit economy

Italian petrol stations began a 60-hour strike today to protest against rising costs and falling profits, causing long queues as drivers rushed to fill up before pumps closed.Hitting at the peak shopping period before Christmas, the strike comes at unwelcome time for retailers.Weak consumer spending has been a key factor in Italy's sluggish economy, which has been dipping in and out of recession since 2008."It is incredible, with all that petrol costs us nowadays, that they can even think of going on strike," Rome resident Ida Lauro said as she queued in her car.Unions have agreed to maintain minimum service on motorways, with at least one station open every 100 km.In a joint statement, unions said they called the strike to combat "a true aggression against the roughly 24,000 small businesses and 120,000 workers in the sector".They say oil companies have forced stations to absorb the costs of discounting campaigns, allowing them a profit of just one euro for every 100 euros ($155) or 55 litres of petrol sold.Oil distributors in Italy Esso and Shell were not immediately available for comment. A government attempt to come to an agreement with the unions this week fell through.Workers will demonstrate outside government buildings in Rome later today to pressure the state to intervene.The strike will end on Friday morning on ordinary roads and late on Thursday on motorways.Between December 17 and 22 the petrol stations will refuse to pay oil companies for refills. Then, between Christmas and New Year, they will refuse credit and debit card payments in protest at bank charges on electronic payments.Mario Monti's technocrat government has cut spending and raised taxes since it was appointed last year to pull Italy out of a debt crisis, and is the focus of increasing protests.The government was thrown into crisis last week when the party of former Prime Minister Silvio Berlusconi withdrew its support, prompting Monti to announce he would resign once the 2013 budget bill is passed before Christmas.

US to keep strong presence in Mideast

The US military will retain a "strong presence" in the Middle East despite a strategic shift to Asia, Defence Secretary Leon Panetta said on Tuesday during a visit to Kuwait. The US plans to deploy a majority of its naval fleet to the Asia-Pacific along with other advanced weaponry but Panetta insisted that a robust American force would remain in place in the Middle East.Panetta spoke to journalists aboard his plane travelling to Kuwait City on a two-day visit to discuss bolstering security ties amid tumult in the region and tensions with Iran."Let me assure you that the United States is strong enough that we can maintain a strong presence in the Middle East as well as in the Pacific," he said.He acknowledged that the US had to be "flexible" in managing its forces in a more austere era and that it would have only one aircraft carrier in the Middle East for about two months to allow for maintenance work on another carrier, the USS Nimitz.The American military still had nearly 50 000 troops and warships positioned across the region, he said."But in the end, I am very confident that we're going to be able to maintain the ships and forces we need in order to respond to any contingency."The US has deployed more ships and aircraft in the strategic Gulf over the past year after Iran threatened to close the strategic Strait of Hormuz if Western countries boycotted Iranian oil exports.Kuwait's emir, Sheikh Sabah al Ahmad al Sabah, held talks at his residence with Panetta in the presence of the crown prince, the prime minister, defence minister and senior officials, the state-run Kuna news agency reported.Kuna provided no details about the talks.During the visit, which ends on Wednesday, Panetta also plans to meet some of the 13 500 US troops stationed in the Gulf state to thank them for their service ahead of the Christmas holidays.His visit is the first to the emirate by a Pentagon chief in five years."We share a history of co-operation that goes back to the first Gulf War," in 1991 that ousted Iraqi occupation forces, Panetta said of Kuwait, calling the country an "important partner"."I look forward to discussing with the government of Kuwait how can we enhance that co-operation in the face of regional security challenges in the area," he said."Our presence in Kuwait and throughout the Gulf helps enhance the capabilities of partner nations, deters aggression and helps ensure that we're better able to respond to crises in the region."Panetta's visit coincides with a wave of protests in the oil-rich Gulf state, with thousands of opposition demonstrators demanding fresh elections due to a bitter dispute over amendments to the country's electoral law.Kuwaiti activists have called for protesters to camp outside parliament next Saturday on the eve of its opening session.

N Korea removes rocket from launch pad

North Korea has removed a long-range rocket from its launch pad for repair, South Korean media reported on Tuesday, a day after Pyongyang extended the widely-criticised mission's launch window.According to analysis of the latest satellite imagery, the entire three-stage Unha-3 carrier has been removed to a nearby assembly facility, Yonhap news agency quoted a military source as saying."It seems that North Korea has pulled down the rocket from the launch pad to fix technical problems," the source said.The defence ministry refused to confirm the report which, if true, would signal a lengthy delay in the launch schedule.North Korea says the rocket is being used to put a satellite into orbit, but the United States and its allies insist the launch is a disguised ballistic missile test.North Korea had originally provided a 10-22 December window for launching the rocket, but that was extended by another week on Monday when a "technical deficiency" was discovered in the first-stage engine.Yonhap's military source said Pyongyang was expected to go ahead with a launch after repair works are completed.The North's decision to try and launch the rocket in winter has led analysts to suggest a political imperative behind the timing, which may have overruled technical considerations.New leader Kim Jong-Un is believed to be extremely keen that the launch falls around the first anniversary of the death of his father and former leader Kim Jong-Il on 17 December.The possibility that the launch has been rushed has been backed by missile experts, sceptical that the problem which resulted in the failure of the North's last rocket launch in April could have been resolved in just eight months.North Korea is banned from conducting missile tests under UN resolutions triggered by Pyongyang's two nuclear tests in 2006 and 2009.The latest planned launch has been condemned by the United Nations, as well as the United States and its main military allies in Asia, Japan and South Korea.Russia has joined international calls for Pyongyang to cancel the mission, while China, North Korea's sole major ally and its biggest trade partner and aid provider, has expressed concern.EU foreign ministers said on Monday that an eventual launch would be a "provocative act" in breach of UN resolutions and require an international response.UN diplomats inside and outside the Security Council have started consultations behind the scenes on what action to take if Pyongyang goes ahead with the launch.According to Japanese reports, Japan, the United States and South Korea have agreed to demand the UN Security Council strengthen sanctions on North Korea to levels that match those on Iran.That would include increasing the list of financial institutions, entities and individuals already subject to asset freezes.

Berlusconi, Monti set fiery campaign tone

Italy's Silvio Berlusconi on Tuesday set the tone for his election campaign saying nobody should care about bond spreads, and accusing Mario Monti of being "German-centric" as the prime minister said he had spared Italy from the same fate as Greece."Who cares about the spread?" the 76-year-old Berlusconi, who is running for the sixth time in two decades, said in an interview with Canale 5 television part of his media empire."The spread is a trick and an invention with which they tried to bring down the majority that ruled this country," said the three-time prime minister and billionaire, referring to his last government which collapsed in November 2011 following a parliamentary revolt and panic on the markets.The spread is the differential between Italian and benchmark German 10-year sovereign bonds  a closely watched measure of investor confidence.The spread had narrowed to below 300 points last week but has widened since Berlusconi's People of Freedom (PDL) party said on Thursday that it was withdrawing its support for Monti's government.Berlusconi then announced he would run for prime minister and Monti said he would resign as soon as parliament approves next year's budget, bringing forward the likely date for elections to February.There is growing speculation that Monti will also decide to run in the election although he has so far declined to comment, saying only that he is not considering the option "at this stage".The spread was around 349 points on Tuesday, while the stock market inched up 0.64% in afternoon trading - a day after it trailed other European bourses reacting to the weekend of political drama and the re-emergence of Berlusconi.Polls say the favourite to win is centre-left leader Pier Luigi Bersani, a cigar-chomping former communist and two-time minister who spearheaded a liberalisation drive when he was in office.Berlusconi on Tuesday also criticised Monti as "too German-centric" and said that all the main economic indicators had worsened since the former Eurocrat was installed in power.He continued saying that Italy's record-high public debt of nearly $2.6 trillion, or around 120% of gross domestic product, was "not as high as they want to make you think".Monti also gave an interview to Rai public television in which he said that the government had to be "very careful" and "calm" about bond spreads.In a rare moment of candour on his personal life, he revealed his own grandson had been nicknamed "spread" at his kindergarten and recognised the word as his own name when he heard it on television.Monti also warned about rising populism ahead of the elections, saying: "There is a tendency to over-simplify things, to present magical solutions."And he defended his record in government saying: "We have made great progress but at a cost. In the short term, there has not been growth."I would appreciate it if someone could explain to me how it would have been possible financially to spare Italy from suffering the same fate as Greece and make it grow at a rapid rate," he said.Newspaper Il Fatto Quotidiano's online edition said the contrasting interviews with Monti and Berlusconi on Tuesday were a "head-on clash"."Each one used their own language, but this really is a challenge at a distance," the paper said.Berlusconi also announced that only 10% of the party's candidates in elections now expected in February would be chosen from current lawmakers.Fifty percent of the candidates will come from the business community, 20% from local government and 10% from the world of culture, he said, without explaining where the remaining 10% would come from.The PDL has been riven by infighting and hit by a series of fraud investigations since Berlusconi stepped down last year and retreated from the political fray before suddenly returning last week to the dismay of several dissident party members. Berlusconi also said he would be holding talks later on Tuesday with Roberto Maroni, leader of the populist Northern League party, on forming a possible coalition.Berlusconi's PDL and the Northern League won the last general election in 2008 but there have been tensions between the two parties in recent years.

NEWS,02.12.2012

Osborne sticking with UK austerity plan

British finance minister George Osborne said on Sunday that he would stick with his deficit-reduction programme when he presents a half-yearly fiscal statement on Wednesday. The Chancellor of the Exchequer declined to comment more specifically on whether he would be able to meet debt targets, but stressed he did not believe Britain should borrow more or increase spending. At his "Autumn statement" on Wednesday, Osborne is expected to defend his stringent economic policies as the only credible way of solving the government's biggest political problem - its failure to deliver a strong recovery. "It's clearly taking longer to deal with Britain's debts, it's clearly taking longer to recover from the financial crisis than anyone would have hoped, but ... to turn back now ... would be a complete disaster for our country," he said in a BBC television interview. British media reported on Sunday that Osborne plans to cap the amount of tax relief high earners receive on their pension contributions alongside reining in the welfare budget. Osborne declined to comment on the reports, but did not reject the proposals directly when questioned in the interview. He also declined to say if the country's independent fiscal watchdog would show him still on track to eliminate Britain's underlying budget deficit within the next five years, or to have debt as a share of national income on a downward path by the 2015/16 tax year.

Merkel not ruling out Greek 'haircut'

German Chancellor Angela Merkel has not ruled out a so-called "haircut", or write-down, on Greek debt in the next few years, in an interview with a Sunday newspaper, marking an apparent softening in position.After being vehemently opposed to accepting a "haircut," Merkel told Bild am Sonntag that it could be considered from 2014 if Greece's financial situation improves, according to a pre-released article."If Greece one day again manages with its revenue without getting new debt, then we must look at and assess the situation. That is not the case before 2014/15 if everything goes according to plan," she told the paper.Opposition politicians have accused Merkel of playing down the need for a write-down of Greek debt holdings by public institutions such as other eurozone governments and the European Central Bank, because of federal elections expected to take place on September 22.In the Bild interview, Merkel contested that she had refused a "haircut" due to the looming elections."The current aid programme for Greece runs until 2014, for the achievement of certain budgetary goals we have given the Greeks two years more time until 2016," she said.Many in Germany consider a write-down of Greek debt holdings inevitable.But on Friday, Finance Minister Wolfgang Schaeuble said speculation on a "haircut" sent "the wrong incentive" to Greece because it reduced the pressure on the Athens government to enact structural economic reforms.Some eurozone states have said they would "not exclude" the possibility of writing off some debt from 2015 onwards.Merkel also said she favoured considering tougher sanctions for indebted eurozone states."In the long term I am definitely of the opinion that we consider how we develop in our law procedures for states which do not comply with their commitments," she said.Merkel also told Bild that she understood the scepticism of many of her compatriots over Greece but that she saw a determination in Athens to reorganise the country and that rescuing Greece from economic collapse was in Germany's best interests.On Friday she secured the vote from German lawmakers to release €43.7bn in aid to debt-wracked Greece agreed after tortuous talks between eurozone finance ministers.

UK over-50s ignorant about retirement

Britain's over-50s are in blissful ignorance of how little their pension pots will pay out and need an urgent financial health check if their retirements are to be as comfortable as they expect, an industry report said. Workers approaching retirement in the next 15 years need to see their pension pots grow by almost 80% to meet their expectations, the National Association of Pension Funds (NAPF) said on Friday. "Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last," Joanne Segars, chief executive of the NAPF, said in a statement. The burden of managing a pension at retirement has increasingly fallen on employees, as defined contribution (DC) pensions, rather than final-salary schemes, become the more dominant form of retirement saving. The introduction of the government-backed auto-enrolment scheme where people are required to opt out rather than opt into retirement saving could lead up to 8 million additional workers being signed up for pensions, which will likely be DC pension memberships. Yet a third of workers aged 52 to 64 remain ignorant about what their private pension income may provide in retirement, while 59% of workers have never thought about how many years of retirement they need to finance, a report by the Institute for Fiscal Studies and supported by the NAPF said. Women in their 50s are living to an average of 88 - four years longer than expected - while men are living to 85, overshooting life expectancy by around two years, when compared with national projections of life expectancy, the report said. Annuities, which many British retirees buy to ensure a steady income, are meanwhile becoming more expensive, meaning people will expect their savings pots to generate a higher annuity income than it actually does. Private pension firms have also been accused of failing to disclose some of the costs they levy on customers' investment funds, leaving people unaware that their pension savings were being eroded by the charges. The NAPF represents 1 300 pension schemes in the UK with 16 million members and assets of around £900bn.

North Korea plans new rocket launch

North Korea said it would carry out its second rocket launch of 2012 as its youthful leader Kim Jong-un flexes his muscles a year after his father's death, in a move that South Korea and the US swiftly condemned as a provocation.North Korea's state news agency announced the decision to launch another space satellite on Saturday, just a day after Kim met a senior delegation from China's Communist Party in the North Korean capital of Pyongyang.China, under new leadership, is North Korea's only major political backer and has continually urged peace on the Korean peninsula, where the North and South remain technically at war after an armistice, rather than a peace treaty, ended the 1950 - 1953 conflict.No comment on the planned launch was available from Beijing's foreign ministry.In Washington, US State Department spokesperson Victoria Nuland condemned the launch plan as a provocative threat to the Asia-Pacific region that would violate UN resolutions imposed on Pyongyang after past missile tests."A North Korean 'satellite' launch would be a highly provocative act that threatens peace and security in the region," she said in a written statement."North Korea must abide by its international obligations under UN Security Council resolutions that clearly articulate what it can and cannot do with respect to missile technologies," said Pentagon spokesperson George Little.Seoul's foreign ministry called the move a "grave provocation". Japan's Kyodo news agency said Prime Minister Yoshihiko Noda had ordered ministries to be on alert for the launch."North Korea wants to tell China that it is an independent state by staging the rocket launch and it wants to see if the United States will drop its hostile policies," said Chang Yong-seok, a senior researcher at the Institute for Peace Affairs at Seoul National University.North Korea is banned from conducting missile or nuclear-related activities under UN resolutions imposed after earlier nuclear and missile tests. The country says its rockets are used to put satellites into orbit for peaceful purposes, but that assertion is not widely accepted outside of Pyongyang.Washington and Seoul believe that the impoverished North is testing long-range missile technology with the aim of developing an intercontinental ballistic missile capable of carrying a nuclear warhead.Pyongyang's threats are aimed, in part, at winning concessions and aid from Washington, analysts say.The failed April rocket launch took place to celebrate the 100th anniversary of the birth of North Korea founder Kim Il Sung and the latest test will take place close to the 17 December date of the death of former leader Kim Jong-il.It will also come as South Korea gears up for a 19 December presidential election in a vote that pits a supporter of closer engagement with Pyongyang against the daughter of South Korean dictator Park Chung-hee.The April test was condemned by the UN, although taking action against the North is hard as China refuses to endorse further sanctions against Pyongyang.North Korea is already one of the most heavily sanctioned states on earth thanks to its nuclear programme.Pyongyang has few tools to pressure the outside world to take it seriously due to its diplomatic isolation and its puny economy.The state that Kim Jong-un inherited last December after the death of his father boasts a 1.2 million-member military, but its population of 23 million, many malnourished, supports an economy worth just $40bn annually in purchasing power parity terms, the US Central Intelligence Agency asserts."The North's calculation may be that they have little to lose by going ahead with it at this point," said Baek Seung-joo of the Korea Institute for Defence Analyses in Seoul.Baek said the test planned for December would likely be no more successful in launching a satellite than the April one that crashed into the sea between China and North Korea after flying just 120km. "Kim Jong-un may be taking a big gamble trying to come back from the humiliating failure in April and in the process trying to raise the morale for the military," Baek said.North Korea's space agency said on Saturday that it had worked on "improving the reliability and precision of the satellite and carrier rocket" since April's launch.