NEWS,22.02.2013

Ultra-cheap eurozone loans hit a snag

 

Eurozone banks do not seem ready to repay as much as expected of the ultra-cheap three-year loans made available to them by the European Central Bank last year, official data showed on Friday.The ECB announced that 356 eurozone banks have signalled their intention to repay early €61.1bn ($80.5bn) of a second batch of special long-term refinancing operations or LTROs, launched last year to avert a looming credit crunch in the single currency area.That is much lower than the €130bn some analysts had been expecting.The LTROs are injections of liquidity into the banking system with ultra-long maturities of three years.They were launched in two batches - €468.19bn in December 2011 and €529.5bn in February 2012.At the time, they were widely credited with pulling Europe back from the brink of a dangerous credit crunch.Both rounds of LTRO included provisions to allow early repayment after one year, if banks so chose.The first repayment window opened on January 30, when 278 banks repaid €137bn.And the second window opens on February 27.After that, repayments can continue on a weekly basis, depending on demand.Total repayments so far amount to €212.3bn or 21% of the combined total of €1.02 trillion in LTROs.ECB chief Mario Draghi has argued that the fact that eurozone banks are ready to repay early such a large chunk of their emergency loans "reflects the improvement in financial market confidence."But analysts suggested the lower-than-expected repayments for the second batch is a signal that banks are still not ready to rely solely on the normal funding markets, especially with the Italian elections looming this weekend."The uncertainty ahead of the general political elections in Italy could have led some banks that had decided to exit to postpone their repayment," said Giuseppe Maraffino and Laurent Fransolet of Barclays Research."Should this have been the case, the repayment in the following weeks could be higher than at the previous three paybacks in the weeks following the January 30 payback, which averaged €4.1bn," the analysts said.The ECB did not provide a national breakdown of banks that are repaying and few banks have made public their repayment plans.

Spain approves urgent job refoRms

The Spanish government has approved a package of urgent reforms it hopes will create jobs for young people and help slash the country's 26% unemployment rate. The measures approved on Friday include scrapping company social security payments for a year for young people as long as the company takes on long-term unemployed people aged over 45.Other measures include limiting monthly social security payments to €50 for six months for under 30s setting up their own businesses and the possibility of allowing people to use lump sum unemployment payments to start a company.Some 6 million people have lost their job since the economy went into freefall with the collapse of the real estate sector in 2008. The unemployment rate for people under 25 is a staggering 55%.

US youth now more credit savvy – study

The recession had a strong impact on young Americans who saw the credit crisis up close: they are taking on less credit card debt, delaying plans to buy homes and owning fewer cars, according to a study released on Thursday.From 2007 to 2010, the median debt of US households headed by people aged 35 and younger fell by 29% - from $21 912 to $15 473 - while debt of older Americans fell by just 8%, to $30 070, according to a Pew Research Center study titled "Young Adults After the Recession."Residential property accounts for at least three-quarters of average American debt, so much of the drop may be connected to a decrease in home ownership. The number of Americans under 35 who own their primary residence dropped to 34% in 2011 from 40% in 2007, Pew said.Meanwhile, the percentage of homeowners over age 35 fell by 2 percentage points to 72%."As younger people invest in education and wait longer to enter the workforce or start families, that may mean they will wait longer to buy homes," said Richard Fry, a senior economist at Washington-based Pew and the author of the study.Young adults are cutting back on credit card usage as well. Young households with credit card debt fell by 10 percentage points to 39% between 2007 and 2010.Car ownership is an area in which younger Americans also cut back. The number of households led by adults under 35 with auto debt fell by 12% between 2007 and 2010. The typical outstanding car loan fell to $10 000 from $13 000.As unemployment drove many young people to return to school, student debt increased during the recession. By 2010, 40% of households headed by young adults had student debt, up from 34% in 2007 and 26% in 2001.Squeezed by increasing student debt, younger Americans are cutting debt in other areas. Their median level of debt fell to $15 473 in 2010 from $17 938 in 2010, according to the study.

Iran 'installing new nuclear equipment'

World powers condemned Iran just days before talks on its controversial nuclear programme, after an International Atomic Energy Agency (IAEA) report said it had begun installing advanced equipment at one of its main nuclear plants."On 6 February 2013, the Agency observed that Iran had started the installation of IR-2m centrifuges" at the Natanz plant, the IAEA report said."This is the first time that centrifuges more advanced than the IR-1 have been installed" at the plant in central Iran, the UN atomic watchdog added.One official said Iran intended to install around 3 000 of the new centrifuges at Natanz enabling it to speed up the enrichment of uranium.This process is at the heart of the international community's concerns about Iran's nuclear programme, since highly enriched uranium can be used in a nuclear weapon.The US State Department denounced the development as "yet another provocative step" by Iran and White House spokesperson Jay Carney warned Tehran it had a choice. "If it fails to address the concerns of the international community, it will face more pressure and become increasingly isolated," he said on Thursday."The burden of sanctions could be eased, but the onus is on Iran to turn its stated readiness to negotiate, into tangible action."Britain expressed "serious concern".Israel, the Middle East's sole if undeclared nuclear-armed state, warned that Tehran was "closer than ever" to achieving the amount of enriched uranium to make a nuclear bomb.The report was "severe" and "proves Iran is continuing to rapidly advance to the red line" that Prime Minister Benjamin Netanyahu has said the international community must draw to prevent Iran obtaining an atomic weapon, Netanyahu's office said.Israel has refused to rule out bombing Iran's nuclear facilities. Despite the developments at Natanz, the IAEA's quarterly report seen by AFP also noted that Iran had not started operating any new equipment at its Fordo plant.Fordo is of more concern to the international community, since it is used to enrich uranium to fissile purities of 20%: At Natanz it is mostly to 5%.The ability to enrich to 20% is technically speaking considerably closer to 90%, the level needed for a nuclear weapon.Iran has so far produced 280kg of 20% uranium, of which around 110kg have been diverted to fuel production, the new report said.Experts say that around 250kg are needed for one bomb, although creating a weapon requires several other steps and if Iran were to start further enriching to weapons-grade this would be detected by the IAEA.Iran denies seeking atomic weapons but many in the international community suspect otherwise, The UN Security Council has passed several resolutions calling on Iran to suspend all uranium enrichment.The IAEA report came ahead of a new meeting between Iran and six world powers - the US, China, Russia, Britain, France and Germany - in Kazakhstan on 26 February.These will be the first talks between the parties since three rounds of meetings ended in stalemate in Moscow last June.The so-called P5+1 called on Iran to suspend all 20% enrichment, shut down Fordo and export its 20% stockpile.But they stopped short of offering Tehran substantial relief from UN Security Council and unilateral Western sanctions that last year began to cause major economic problems for the Gulf country.A Western diplomat said Wednesday that the P5+1 would come to Almaty with an offer containing "significant new elements".Reports have said that the powers could ease sanctions on Iran's trade in gold and other precious metals.On Thursday, US State Department spokesperson Victoria Nuland urged Iran to consider "another path" than the nuclear bomb."They have an opportunity to come to those talks ready to be serious, ready to allay the international community's concerns, and we hope they take that opportunity," she said.Parallel efforts by the IAEA dating back more than a year to press Iran to grant it access to sites, documents and scientists involved in what the agency suspects were past efforts to develop nuclear weapons remain stalled.The new report said that although the IAEA board had adopted two resolutions on the urgent need to resolve these issues with Iran, they had not been able to reach agreement with Tehran on the way forward.It added however that the Vienna-based IAEA's "commitment to continued dialogue is unwavering".

Mexico vigilantes challenge government

Fed up with the police's failure to curb crime, armed vigilante groups have spread to at least four Mexican states, manning checkpoints, patrolling streets and in one case killing a "suspect" in a shootout.The proliferation of self-policing poses a challenge to the government of President Enrique Pena Nieto, who inherited a drug war that had killed about 70 000 people in six years when he took office in December.Raul Plascencia Villanueva, head of the National Human Rights Commission, said the vigilante trend must be rejected, warning that there is "a very fine line between self-defence organisations and paramilitary groups".Although self-defence groups have long existed in Mexico, they began to expand last month, when hundreds of men donned masks and took up machetes and hunting rifles in the rural mountains of the southwestern Guerrero state.In recent weeks, more groups have emerged in the neighbouring state of Michoacan, the southern state of Oaxaca and the central state of Mexico, which surrounds Mexico City.In Guerrero, the civilians decided to police their own streets after a community leader was kidnapped in early January.The vigilantes say the local police are too corrupt, unwilling or unable to stop drug gangs - a charge often levelled against police in Mexico.The vigilantes detained 53 people, accusing them of a slew of crimes from murder to kidnapping and extortion, and held them in makeshift jails in remote villages.They handed the last of their detainees to authorities this week after long negotiations, but the self-policing took a deadly turn on Wednesday. Crisoforo Garcia, a leader of the vigilante movement, said a squad was on a "routine patrol" in the mountain village of El Refugio when it was attacked by a group of armed men, one of whom was killed in the resulting gunfight.Interior Minister Miguel Angel Osorio Chong met with leaders of the Guerrero vigilante movement, agreeing to find a way to make the community police forces legal in return for the handover of 31 suspects Gerardo Rodriguez, a security expert and director of the Mexico Seguridad consultancy, said it was a "dangerous" deal, because giving legitimacy to these groups "shows the Mexican state's inability at the federal and local level to bring security and justice to these towns""It is a new flashpoint of insecurity for the Mexican state that can escalate," Rodriguez said. Community police forces that are tolerated by the authorities have existed in Guerrero since 1995, allowing indigenous groups to mete out justice according to their own traditions. But the vigilantes who have taken up arms in recent weeks were outside this local system, in which prisoners face public justice and sentences that include years of hard labour in various towns.The growth of vigilante squads has sparked a debate among politicians, with some pointing fingers at state governors and other saying federal policymakers should do more to help."It is a governability crisis, because it demonstrates the total absence of the police," said Senator Ernesto Cordero, a leading member of the opposition National Action Party.Manlio Fabio Beltrones, the leader of the ruling Institutional Revolutionary Party (PRI) in the lower house of Congress, said governors should "reconsider the way their governments work" if they "are not capable enough to offer protection, safety and justice" to their populations.Guerrero's leftist Governor Angel Aguirre said federal lawmakers should provide more resources to state governments to improve security. Fausto Vallejo, the PRI governor of Michoacan, suggested that the community police forces should be legalised and given training and equipment.Pena Nieto has vowed to shift the focus of the drug war towards reducing the daily violence plaguing much of the country. He wants to form a paramilitary "gendarmerie" to replace the thousands of troops deployed by his predecessor since 2006.But the government has said soldiers will remain deployed until the level of violence falls.

NEWS,11 AND 12.02.2013

Obama speech to focus on economy, guns

President Barack Obama will be looking across a vast partisan divide on Tuesday night as he reports to congress and the nation with his annual State of the Union speech, which is closely monitored as the blueprint for his goals for the year. They include job creation and a push for the ambitious progressive plans he outlined in his second inaugural address three weeks ago.Obama hopes he can encourage lawmakers to join him in reforming laws on gun ownership and immigration and boosting taxes to raise government spending power. The president's priorities also include easing back on spending cuts and addressing climate change.He'll also address the news from North Korea, which said it successfully detonated a nuclear device on Tuesday in defiance of UN warnings. The White House said the president would make the case that the nuclear programme had only further isolated the impoverished nation.Aware of the partisan gridlock gripping Washington, Obama is banking on his popularity and the political capital from his convincing re-election in November as he calls on Americans to join him in his vision for what he calls a fairer country with greater opportunity for all.With Republicans in control of the House of Representatives and exerting influence in the Democratic-controlled Senate, Obama plans immediately afterward to make a two-day, three-state foray to take his message directly to the American people. Congress fought the president to a near standstill on virtually every White House initiative during his first term - though he succeeded in overhauling the health care system.In his second term, Obama has decided that he may stand a better chance of moving his agenda through congress by drawing support from outside the capital rather than from within.Massive federal spending cuts that will hit the US economy on 1 March if a compromise isn't hammered out with Congress will surely colour Obama's speech like nothing else. Some economists predict those cuts could push the US back into recession even before it has fully recovered from the Great Recession - the most serious economic downturn in more than 70 years.The cuts will slice deeply into spending for the Pentagon and a range of social programmes. Obama says he wants "a balanced approach" to tackling the spiralling deficit with a mix of increased tax revenue and cuts in spending.The opposition declares it will not give ground on raising taxes.While the deep cuts, which grew out of a failure to reach a deal in 2011, were conceived as a blow to the budget that is unacceptable to both parties, some Republicans are threatening to let it go forward if Obama does not agree to big cuts in the so-called social safety net programmes such as Medicare and Medicaid, which provide health care and other assistance to the elderly and poor, as well as Social Security retirement benefits.Obama also was expected to refocus on creating jobs in a country where the unemployment rate remains at nearly 8%. He failed to address the issue in any depth in his inaugural address, leaving his political opponents an opening to criticise him for ignoring an issue of over-riding importance.Obama also is deeply invested in pushing for new laws aimed at curbing gun violence. Spurred by the mass shooting in December at a Connecticut school that killed 20 children and six adults, Obama and like-minded Democrats are pushing for tougher regulations requiring universal background checks for gun buyers and bans on military-style assault weapons and high-volume ammunition magazines.He will no doubt return to the issue on Tuesday night in the face of angry opposition from the National Rifle Association gun rights lobbying group, many Republicans and even some moderate Democrats. They say any change in gun laws would violate the Constitution's Second Amendment guarantee of the right to bear arms.To underscore the president's position, first lady Michelle Obama will sit with the parents of a Chicago teenager shot and killed just days after she performed at the president's inauguration. Twenty-two House members have invited people affected by gun violence.On the other side of the issue, Republican Representative Steve Stockman says he's invited rocker Ted Nugent, a long-time gun control opponent who last year said he would end up "dead or in jail" if Obama won re-election.Another presidential priority - and possibly the most likely to succeed in getting passed by congress- is granting illegal residents a pathway to citizenship as part of an overhaul immigration reform. The initiative is deeply unpopular in many House Republicans' districts, but it has the support of some prominent Republican lawmakers who understand that their party needs to soften its stance on immigration if it is to win crucial Hispanic votes.Obama will face continuing opposition to any proposal he puts forward in an effort to curb climate change. Given that any major climate bill is unlikely to pass the divided congress, the White House has said Obama intends to move forward on issuing rules to control carbon emissions from power plants as he relies increasingly on his executive authority instead.Senator Marco Rubio, a fast-rising Republican star, was picked by the party's mainstream leadership to give its traditional response immediately after Obama speaks. The first-term Cuban-American senator is seen as a potential 2016 presidential candidate. Senator Rand Paul of the Republicans' tea party wing, a loose collection of lawmakers determined above all else to shrink government and lower taxes, plans to give an unofficial response.

Global body warns G20 on financial unity

 

The global banking industry on Monday urged the Group of 20 economic powers to deliver on pledges to harmonise financial regulation, warning their commitment appears to be fraying. The Institute of International Finance said its members were "deeply troubled" by the current trend toward "increasingly fragmented financial regulation. "The tendency of nations to act to protect their own financial service sectors and taxpayers against future global risk "is threatening to undo decades of cross-border cooperation," the IIF said in a statement. "If we fail to preserve the spirit and the fact of international harmonisation of financial regulation, we run the risk of inhibiting the global economic regeneration so desperately needed by people everywhere. "In a letter to G20 finance ministers and central bankers to meet on Friday and on Saturday in Moscow, the IIF, which represents more than 450 financial institutions around the world, called on the G20 powers to renew their willingness to work together for the good of the global economy. "We believe the G20 must reinvigorate the policy coordination process and recommit to the cooperative spirit of the London and Pittsburgh G20 Summits," the letter said.

Dutch minister wants banking pay cuts

Dutch Finance Minister Jeroen Dijsselbloem wants all bank employees to take a pay cut in return for the state support that has been given to most of the country's biggest banks, he told a local newspaper in an interview published on Monday.Dijsselbloem, who is also chair of the Eurogroup of eurozone finance ministers, nationalised the Netherlands' fourth-largest bank and insurance group, SNS Reaal, ten days ago.ABN AMRO was nationalised and both ING and Aegon were bailed out by the state in 2008. The bank rescues and high salaries earned by senior bankers have prompted a public outcry at a time of budget cuts and austerity measures."We have saved jobs partly thanks to state support. Therefore I think it is reasonable for employees to also make a contribution," Dijsselbloem told De Telegraaf, the Netherlands' largest circulation newspaper."It is true that banks' collective labour agreements are quite generous, also for regular employees. I think there is every reason for banks' collective labour agreements to be more sober, and it really has to happen now," he said. Dijsselbloem wants the labour agreements between unions and employer groups, which usually cover one or several years, to be severed and adjusted, he told the paper.Dijsselbloem has no power to lower salaries in a specific sector. He can levy specific taxes on banks, though not their employees."I want the sector to take action on its own. Society wants a clear signal. I will put pressure on this," he said.Dijsselbloem last week defended in parliament the annual salary of €550 000 ($735 900) for the newly appointed SNS Reaal chief executive, Gerard van Olphen, saying the pay was needed to attract a qualified banker.

North Korea sends nuclear message

North Korea's nuclear test may be aimed at showing its foes it can deliver a missile with a warhead but it is still a long way from being able to threaten the US, experts say. The Comprehensive Nuclear Test Ban Treaty Organisation (CTBTO), an international monitoring agency in Vienna, said an "explosion-like" event that North Korea described as a nuclear test had a seismic magnitude of 5. This was bigger than similar tests it carried out in 2006 and 2009.CTBTO executive secretary Tibor Toth said the action "constitutes a clear threat to international peace and security and challenges efforts to strengthen global nuclear disarmament and non-proliferation". North Korea said the test, which drew swift international condemnation, had used a miniaturised device.The secretive Asian state is widely believed to be trying to develop a device that is compact and light enough to fit on top of a ballistic missile "something that has long been considered out of the North's technical reach," the Stockholm International Peace Research Institute (Sipri) said.A successful test would bring it one step closer to having the capability of building a long-range ballistic missile that could deliver a nuclear weapon, Sipri said.Nuclear proliferation expert Mark Fitzpatrick of the International Institute for Strategic Studies in London said: "It won't be possible to confirm from afar, but the claim of a successful miniaturised device is consistent with expectations that the test would be of a warhead that can fit in the nose cone of one of its missiles."Jim Walsh of Massachusetts Institute of Technology said: "It seems as if Pyongyang wants to send the message  true or not that it can employ a missile with a nuclear warhead and that previous problems with their nuclear tests have been overcome."However, North Korea still had a long way to go before it could credibly threaten the US with nuclear weapons, said Daryl Kimball from the Arms Control Association, a US-based research and advocacy group."It is likely to be years away from fielding an ICBM (Intercontinental Ballistic Missile), which could deliver a nuclear warhead to the US mainland. There is still time to halt and reverse current trends before North Korea's nuclear capabilities become more substantial."An international test-ban treaty was negotiated in the 1990s but has not yet taken effect because not all holders of nuclear technology have ratified it. The Vienna-based CBTBO monitors possible breaches, looking out for signs of atomic tests, including seismic waves and radioactive traces.Experts say it can take days or more to detect possible radioactive signs that would confirm with absolute certainty that a nuclear test had taken place.Seen as a cornerstone of efforts to free the world of atomic bombs, the test ban treaty enjoys wide support around the world. But of the five officially recognised nuclear weapon states, the US and China have yet to ratify it."Though confirmation will take some time, given the seismic signature and the important fact North Korea has never lied when it comes to nuclear tests, I think we can take them at their word and assume this was the explosion of a nuclear device," a Western diplomat in the Austrian capital said. Kimball also said the test was an embarrassment for China's leadership and Pyongyang may have jeopardised the aid and diplomatic support it receives from Beijing.China criticised the previous tests but did not roll back on aid. But Beijing had signalled that if North Korea undertook further tests, it would not hesitate to reduce assistance."Indeed, Beijing could do much more to apply pressure. Past Chinese diplomatic and economic support has allowed North Korea to ignore world opinion, in spite of the desperate state of its economy and hunger-ravaged population. It is important that Beijing now demonstrate its last warning was sincere," Kimball said.

NEWS,16.11.2012

Road closures in Israel indicate military build-up

The Israeli army said today it was closing three roads that lead to, or border the Gaza Strip, in an indication of a probable military build-up in the area.Shortly before, political sources said Defence Minister Ehud Barak was seeking government approval to mobilise up to 75,000 reserve troops for Israel's Gaza campaign, in a sign of preparations for a possible ground offensive.Western governments are watching Egypt's response to the attacks for signs of a more assertive stance towards Israel since an Islamist came to power in the Arab world's most populous nation.President Mohamed Mursi is mindful of anti-Israeli sentiment among Egyptians emboldened by last year's Arab Spring uprising but needs to show Western allies his new government is no threat to Middle East peace.His prime minister, Hisham Kandil, visited Gaza today in a demonstration of solidarity after two days of strikes by Israeli warplanes targeting Gaza militants."We see what is happening in Gaza as blatant aggression against humanity," Mursi said in comments carried by Egypt's state news agency. "I warn and repeat my warning to the aggressors that they will never rule over the people of Gaza."I tell them in the name of all the Egyptian people that Egypt today is not the Egypt of yesterday, and Arabs today are not the Arabs of yesterday."The Egyptian foreign minister also spoke to his counterparts in the US, Jordan, Brazil and Italy on Friday to discuss the situation in Gaza, a statement from the foreign ministry said.Mohamed Kamel Amr spoke to US Secretary of State Hillary Clinton about the necessity of cooperation between the US and Egypt to end the military confrontations. Amr stressed the necessity of Israel ending attacks on Gaza and a truce being rebuilt between the two sides, the statement said.Mursi's toppled predecessor Hosni Mubarak was a staunch US ally who upheld a cold but stable peace with Israel.The new president has vowed to respect a three-decade peace treaty with the Jewish state. But ties have been strained by protests that forced the evacuation of Israel's ambassador to Cairo last year and cross-border attacks by Islamist militants.More than 1000 people gathered near Cairo's al-Azhar mosque after prayers, many waving Egyptian and Palestinian flags."Gaza Gaza, symbol of pride", they chanted, and "generation after generation, we declare our enmity towards you, Israel"."I cannot as an Egyptian, an Arab and a Muslim just sit back and watch the massacres in Gaza," said protester Abdel Aziz Nagy, 25, a member of the Muslim Brotherhood.Protesters were marching from other areas of Cairo towards Tahrir Square, the main rallying point for last year's uprising.

Iran ready to double nuclear work in bunker -IAEA

Iran is set to sharply expand its uranium enrichment in an underground plant after installing all the centrifuges it was built for, a United Nations report said, a move likely to increase Western alarm about Tehran's nuclear course.It also showed Iran's stockpile of its most sensitive nuclear material grown and was getting closer to an amount that could be sufficient for a nuclear weapon.The latest quarterly International Atomic Energy Agency (IAEA) report on Iran came 10 days after the re-election of US President Barack Obama, which raised hopes for a revival of nuclear diplomacy with Iran following speculation that Israel might attack the nuclear facilities of its arch-enemy soon.But the UN watchdog's findings underlined the tough task facing world powers seeking to pressure Iran to curb atomic activity they fear is aimed at developing a nuclear weapons capability, a charge Tehran denies."The report paints the picture of Iran's continued lack of cooperation with the IAEA, and details its continued enrichment and installation of centrifuges in violation of UN Security Council resolutions," a senior Western diplomat said.The Islamic state has put in place the nearly 2800 centrifuges that the Fordow enrichment site was designed for and is poised to double the number of them operating to roughly 1400 from 700 now, according to the confidential IAEA report."They can be started any day. They are ready," a senior diplomat familiar with the IAEA's investigation said.If Iran chose to dedicate the new machines to produce higher-grade uranium, it could significantly shorten the time required for any bid to build an atomic bomb. Iran says it needs to refine uranium to make reactor fuel.In another potentially worrying development for the West, Iran appears to have virtually stopped converting this uranium into making civilian reactor fuel since the previous report.As a result, the stockpile of uranium gas refined to a fissile concentration of 20 percent increased by nearly 50 percent to 135 kg, the latest report said, still below the level of 200-250 kg experts say would be sufficient for an atomic bomb if refined further."This puts added pressure on the West's diplomacy with Iran, which has to operate on a tighter schedule," said research fellow Shashank Joshi at the Royal United Services Institute.Israel has recently signalled that an attack on Iran was not imminent - after months of talk that it might be on the cards soon by pointing to Iran's decision earlier this year to use part of its 20 percent uranium for civilian purposes."As Iran's 20% stockpile approaches around 240 kg, the Israeli sabre-rattling will resume,"

French PM tries to reassure Berlin

France's German-speaking prime minister has offered a worried Berlin reassurances his government would reduce the deficit and prevent France from becoming the next victim of the euro crisis by applying a new economic model.Jean-Marc Ayrault, making his first visit to Berlin since Francois Hollande became president, told German Chancellor Angela Merkel that France would find its own way to reduce spending and boost economic growth and jobs, rather than copying Germany."My challenge, the government's challenge, is to reform what isn't working, to correct what is too weak, but to keep the profound values that make France what it is," he told a joint news conference after talks with the conservative chancellor."The job that is under way is constructing the new French model," said Ayrault, a Socialist.A  report that Merkel's finance minister had asked the German government's economic advisers to consider preparing policy recommendations for France has stirred outrage in Paris.But Merkel said she would never dare to evaluate the decisions of the French government and added diplomatically: "We want a strong France just as France wants a strong Germany, so that together we can become a strong Europe."Ayrault also held a 20-minute meeting with German Finance Minister Wolfgang Schaeuble, who emerged saying Germany and France did not "grade" each others' economic policies.But it was clear French pride had been stung. Ayrault told a conference in Berlin organised by the Sueddeutsche Zeitung newspaper that his host country Germany also had its problems."The German population is ageing quicker than the French, which poses problems for pensions and social security," said the French premier."This sort of understanding for other countries' problems I expect it for my own country too."Paris is under intense pressure to improve French economic competitiveness relative to Germany and southern European countries that have implemented painful reforms to bring down their own debt in the face of a crippling three-year crisis.German officials are worried that without bolder reforms, France could get sucked into the crisis which has forced bailouts of Greece, Portugal and Ireland in what would be a crushing setback for the bloc's efforts to stem the turmoil.In response to calls by industrialist Louis Gallois for cuts in labour charges to reverse decades of industrial decline, the French government has now announced plans to grant companies 20 billion euros in annual tax credits to lower labour costs.Ayrault cited this as one example of the "courage" France's Socialist government was showing on economic reforms.His knowledge of Germany and its language may have been one of the reasons for his appointment. Relations between Merkel and the new president are often contrasted with the close partnership - especially on the euro crisis that she enjoyed with Hollande's conservative predecessor Nicolas Sarkozy.Hollande criticised Merkel's focus on austerity for the euro zone during his election campaign and the new Franco-German leadership couple have not got off to the best start."The main thing is to build a personal relationship," Ayrault said, adding that although the two governments belonged to opposing political factions, their relationship had to be "ueberparteilich" the German word for non-partisan.Ayrault and Merkel both rejected suggestions that the French premier's plans to meet Germany's centre-left opposition Social Democrats on Friday - less than a year before federal elections when Merkel will seek a third term undermined this ideal."The important thing is for us to work together well," said Merkel.

NEWS,29.09.2012

US embassy warning: Philippines on alert

Philippine security forces were on stepped-up alert on Saturday after the US embassy issued an emergency advisory about an alleged threat against Americans in the capital."As a matter of precaution, we have augmented security," deputy presidential spokesperson Abigail Valte said. "Police visibility has been heightened."The US embassy said in its advisory that the "threat against American citizens in metropolitan Manila ... has been detected by reliable security forces" but it did not give details on the nature of a possible attack."This threat remains in effect until October 10," the embassy said in the advisory posted on its website on Friday.Britain, Australia and Canada also issued warnings to their citizens, citing the US advisory."Any attack could be indiscriminate, and we advise British nationals to exercise particular caution and extra vigilance in places frequented by expatriates and foreign nations," Britain's advisory said.Australia stressed the need for its citizens to avoid travelling to the conflict-wracked southern region of Mindanao, and Canada urged its citizens to be "extremely vigilant and increase their personal security awareness"."Bomb attacks could occur at any time in Manila and other key cities," Canada said in its advisory. "Targets could include places frequented by foreigners, such as large shopping malls and convention centres."Philippine police earlier stepped up security at the US embassy in Manila after violent protests in several countries over a US amateur film considered insulting to Islam.

Last Western detainee leaves Gitmo

The last Western detainee held at the Guantanamo Bay US military prison has returned to Canada after a decade in custody and has been transferred to a maximum security prison in Canada where he awaits parole, Canada's public safety minister said on Saturday.Vic Toews said that 26-year-old Omar Khadr arrived at a Canadian military base on a US government plane early on Saturday and was transferred to the Millhaven maximum security prison in Bath, Ontario.Khadr pleaded guilty in 2010 to killing a US soldier in Afghanistan and was eligible to return to Canada from Guantanamo Bay last October under terms of a plea deal. Khadr was 15 when he was captured in 2002 in Afghanistan, and has spent a decade at the Guantanamo prison set up on the US naval base in Cuba to hold suspected terrorists after the September 11, 2001 attacks. He received an eight-year sentence in 2010 after being convicted of throwing a grenade that killed Army Sergeant 1st Class Christopher Speer during a 2002 firefight.Toews noted that the US government initiated the transfer and suggested that Canada had little choice but to accept him under Canadian law."Omar Khadr is a known supporter of the al-Qaeda terrorist network and a convicted terrorist," Toews said. "Omar Khadr was born in Canada and is a Canadian citizen. As a Canadian citizen, he has a right to enter Canada after the completion of his sentence."John Norris, Khadr's Canadian lawyer, has said Khadr would be eligible for parole as early as the spring of 2013. It will be up to Canada's national parole board to release him, Toews said."I am satisfied the Correctional Service of Canada can administer Omar Khadr's sentence in a manner which recognises the serious nature of the crimes that he has committed and ensure the safety of Canadians is protected during incarceration," Toews said.

Iran condemns US for taking group off terror list

Maryam Rajavi, President-elect of Iranian opposition party National Council of Resistance of Iran, smiles as she attends an international conference on Iran policy in Brussels. Maryam Rajavi, the Paris-based head of the exiled opposition group, said in an interview that she hopes the organization can now have the ear of the world's diplomats to help bolster its bid to overthrow Iran's clerical regime. She stressed that its goal was to replace the Islamic Republic with a democratic government Iran condemned on Saturday the Obama administration for taking an Iranian militant group formerly allied with Hussein off the U.S. terrorism list, saying it shows Washington's "double standards."The Mujahedeen-e-Khalq (MEK), which began as a guerrilla movement fighting Shah Mohammed Reza Pahlavi, helped overthrow the monarch in 1979 then quickly fell out with the Islamic Republic's first leader, Khomeini. It fought in the 1980s alongside Saddam's forces in the eight-year Iran-Iraq war but disarmed after the U.S. invasion of Iraq in 2003.The State Department delisted the group on Friday, meaning that any assets the MEK has in the United States are unblocked and Americans can do business with the organization. On Saturday, at their Paris headquarters, MEK members gathered to celebrate, tossing flower petals and displaying photos of members killed in the past 15 years."We call on the international community to respect the will of the Iranian people for a regime change in Iran," Maryam Rajavi, the Paris-based head of the exiled opposition group, said Saturday.Iranian State TV criticized the decision, saying that the U.S. considered the MEK "good terrorists" and claims Washington is using the group to work against Tehran. State radio said the move highlights President Barack Obama's anti-Iranian sentiments."There is much evidence of the group being involved in terrorist activities. Delisting them shows America's double standard policy on terrorism," state TV said. The U.S. distinguishes between "good and bad terrorists" and the MEK are now "good terrorists because the U.S. is using them against Iran," the report also said, adding that Washington and Israel use the group to spy on Iran's nuclear program.The U.S. and its allies accuse Iran of using its civilian nuclear program as a cover to develop nuclear weapons. Iran has denied the claims, saying the program is peaceful and is intended for electricity generation and scientific research.The State Department said the MEK hasn't committed terror for more than a decade. The group has also complied with demands that over 3,000 of its once-armed members abandon their base in Iraq near the Iranian border for a camp outside Baghdad, an essential step to ending their decades-long presence in Iraq.The group claims it is seeking regime change through peaceful means, aiming to replace Tehran's clerical system with a secular government.However, a senior State Department official suggested that removing MEK from the U.S. terrorist list does not translate into a shared common front against the Islamic Republic. The official said Washington does not view MEK as an opposition movement that can promote democratic values in Iran. The official on Friday briefed reporters on condition of anonymity because he wasn't authorized to speak publicly on the matter.In a rare interview on Friday, Rajavi said "the most important impact ... will be seen inside Iran.""The balance of power is going to change. For example, the first message for the Iranian people will be they won't fear increasing their activity and increasing their demonstrations," she said. The fear "will evaporate ... and that will lead to the expansion of anti-regime activities within Iran."Iran says MEK is responsible for the deaths of more than 12,000 Iranians over the past three decades, including senior government officials.The MEK spent huge sums of money over years lobbying for removal from the U.S. terror list, holding rallies in European capitals and elsewhere that featured luminaries like former Homeland Security Secretary Tom Ridge from the administration of George W. Bush. Former House Speaker and presidential candidate Newt Gingrich was among those recently welcomed by the MEK to Paris.The group was protected in Iraq under Saddam Hussein, but its members are disliked by the new Iraqi government, dominated by Shiite Muslims like those in Iran.The United States had insisted the MEK's members leave Camp Ashraf, their home in Iraq, as a condition for removal from the terrorist list. All but several hundred militants are now located in Camp Liberty, a former U.S. base outside Baghdad, looking for placement in third countries.The MEK was removed from the European Union's terrorist list in 2009.

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.