NEWS,06.11.2012

What to watch for on US election night

As Americans troop to the polls to decide between President Barack Obama and Republican challenger Mitt Romney, here's a guide to what to watch for on election night:

Polls close:

The continental United States covers four times zones from east to west. The first polling stations close at 19:00 Eastern Time (00:00 GMT) in Georgia, Indiana, Kentucky, South Carolina, Vermont and Virginia. Polls close in California and several other western states at 23:00 Eastern Time (04:00 GMT). Everyone will be watching for early results in the battleground state of Virginia as a potential bellwether of the night ahead.At 19:30 pm Eastern Time (00:30 GMT) polls close in North Carolina and all-important Ohio. A win for Romney in North Carolina, one of the more conservative swing states, would keep his hopes alive. But no Republican has won the White House without taking Ohio, and a loss there would put Romney in a massive hole.Others will start to fall into place after 20:00 Eastern Time (01:00 GMT), when the most populous swing state, Florida, closes along with most eastern states. An Obama win in Florida would be monumental for his re-election hopes, as polls have shown the Sunshine State leaning to Romney in recent weeks.West Coast states generally close three hours later.

Results:

This year, the nation's broadcast networks ABC, CBS and NBC, plus cable giants CNN and FOX, are conducting exit polls of some 25 000 voters, mainly in key states. Those figures, together with telephone polls and vote counts from precincts, will be used in formulating state predictions, which are made only after polls close.Partial results will be posted by some states, and networks will show such results ahead of predicting the state's winner.

Key states:

A candidate must win 270 of 538 electoral votes to clinch the White House. Eleven states, collectively representing a jackpot of 146 electoral votes, are up for grabs, according to RealClearPolitics. As a measure of how tight the race is this year, Obama won every one of these states in 2008. Of the 11, Obama's campaign says traditional Democrat states Michigan, Pennsylvania and Wisconsin are in his column. But Republicans have made late campaign moves there.

The Obama scenario:

Based on recent poll averages, Obama is a lock in 18 states totalling 201 electoral votes. He has notable leads in Michigan (16 electoral votes) Pennsylvania (20) and Wisconsin (10). If Obama holds those states, he needs just Ohio (18) and Iowa (6) to win re-election. Or just Florida (29).Look for Virginia (13) and North Carolina (15) as key early tests; if Obama wins one of them, it'll be a long night for Romney.

The Romney scenario:

The challenger's path to victory is narrower. He is assured 24 states representing 191 electoral votes, leaving him 79 short. If Obama holds Michigan, Pennsylvania and Wisconsin, Romney must win two of the three biggest toss-ups - Florida, Ohio and Virginia - as well as most of the other battlegrounds.Look for New Hampshire (4) as a key early test; it's small, but potentially indicative of how the night may turn for Romney.

Congress:

All 435 seats in the House of Representatives are up for grabs, as are 33 seats in the Senate. Republicans are expected to hold the House. The Democrats' 53-47 majority in the Senate is more tenuous. A race to watch is the Massachusetts battle between Republican incumbent Scott Brown and Elizabeth Warren. Other key Senate contests are in Indiana, Missouri and Virginia.

Early voting:

More than 30% of Americans are expected to vote before Tuesday - either absentee or in person.

Recount?

Each state has its own recount rules. In the 2000 election between George W Bush and Al Gore, some Florida counties launched recounts while others did not. With the prospect of very close results in some states, phalanxes of lawyers on each side are prepared to bring legal action, raising the potential for final result delays.

The Ohio question:

A nightmare scenario may be brewing in crucial Ohio, where authorities sent absentee ballot applications to every voter. People who applied for such ballots but then decide to vote in person will be required to cast provisional ballots that are sealed until it can be proven that they haven't already voted.Some 200 000 provisional ballots may be cast, and state law does not allow them to be opened until 17 November.Complicating the count are mail-in ballots, which can arrive as late as November 16 so long as they are post-marked by 5 November.And if the results are within 0.5 percentage points, an automatic recount of all ballots is triggered.

US: Voters now have centre stage

 

President Barack Obama and Republican challenger Mitt Romney have closed out their hard-fought and deeply negative battle for the White House, yielding centre stage to voters who face a stark choice on Election Day between fundamentally different visions for the country's future.After months of campaigning and billions of dollars spent in the battle for leadership of the world's most powerful country, Obama and Romney were in a virtual nationwide tie ahead of Tuesday's election, an overt symptom of the vast partisan divide separating Americans in the early years of the 21st century.Obama appeared to have a slight edge, however, in some of the key swing states such as Ohio that do not vote reliably Democratic or Republican. That gives him an easier path to reach the 270 electoral votes needed to win the presidency.
"I feel optimistic but only cautiously optimistic," Obama said on "The Steve Harvey Morning Show." ''Because until people actually show up at the polls and cast their ballot, the rest of this stuff is all just speculation."

Different American versions

Romney also reached out on Ohio drive-time radio, where he said told voters to remember as they go to the polls that the country is hurting financially under Obama's policies. "If it comes down to economics and jobs, this is an election I should win," Romney told Cleveland station WTAM.Under the US system, the winner of the presidential election is not determined by the nationwide popular vote but in state-by-state contests. The candidate who wins a state - with Maine and Nebraska the exceptions - is awarded all of that state's electoral votes, which are apportioned based on representation in Congress.Both sides cast the Election Day choice as one with far-reaching repercussions for a nation still recovering from the biggest economic downturn since the Great Depression and at odds over how big a role government should play in solving the country's problems."It's a choice between two different visions for America," Obama declared Monday in Madison, Wisconsin, asking voters to let him complete work on the economic turnaround that began in his first term. "It's a choice between returning to the top-down policies that crashed our economy, or a future that's built on providing opportunity to everybody and growing a strong middle class."Romney argued that Obama had his chance and blew it."The president thinks more government is the answer," he said in Sanford, Florida. "No, Mr. President, more jobs, that's the answer for America."

Jobs on the line

It wasn't just the presidency at stake Tuesday: All 435 seats in the House of Representatives, a third of the 100 Senate seats, and 11 governorships were on the line, along with state ballot proposals on topics ranging from gay marriage to legalising marijuana. Democrats were expected to maintain their majority in the Senate, with Republicans doing likewise in the House, raising the prospect of continued partisan wrangling no matter who might be president.Obama's final campaign rally, Monday night in Des Moines, Iowa, was filled with nostalgia as he returned to the state which launched him on the road to the White House in 2008 with a victory in its lead-off caucuses over Hillary Rodham Clinton, now his secretaryof state. A single tear streamed down Obama's face during his remarks, though it was hard to tell whether it was from emotion or the bitter cold.

Changing times

There has been little of the euphoria that propelled Obama to the White House four years ago, America's first black president promising hope and renovation to a nation weighed down by war and a near financial meltdown.The economy has proven a huge drag on Obama's candidacy as he fought to turn it around after the deepest recession since the Great Depression of the 1930s, a downturn that was well under way when he replaced George W Bush in the White House on 20 January 2009.Unable to bridge America's fierce partisan divide, especially on taxes and debt, Obama was thwarted in his efforts to pass aggressive plans for jobs creation and deficit reduction.He ended the war in Iraq and the US intelligence and military tracked down and killed Osama bin Laden, but a new host of Middle East crises - especially the war in Syria and the deadly attack on the US Consulate in Libya - shadowed the last months of the campaign.Obama, making his last run for office at the still-young age of 51, urged voters in Iowa to help him finish what they started four years ago. The president credits his auto-industry bailout, stimulus plan and other policies for ending the recession. He points to recent positive economic reports and a slow but steady drop in the unemployment rate.
"I've come back to Iowa one more time to ask for your vote," Obama told 20 000 supporters at the outdoor rally."This is where our movement for change began."

Romney presidency

Romney, 65, assailed Obama's economic policies amid the recession, and promised to bring change that he asserted Obama had only talked about."Talk is cheap, but a record is real," Romney said before a crowd of about 10,000 in New Hampshire on Monday.If elected, Romney would be the first Mormon US president. At times, the former Massachusetts governor has struggled to connect with the protestant evangelicals who are a core constituency of the Republican Party, especially because of his shifting positions on some social issues such as abortion.Romney, the ultra-wealthy founder of a private equity firm, worked doggedly to keep the race instead focused on the economy, and polls suggest that he succeeded in persuading many Americans he has the right credentials to steer America to better times. His selection of the young Wisconsin congressman Paul Ryan as his running mate put Romney squarely on the side of the conservative Tea Party movement that has been a driving force of the Republican Party in recent years.

Debt, taxes

Obama and Romney have spent months highlighting their sharp divisions over the role of government in Americans' lives, in bringing down the stubbornly high unemployment rate, reducing the $1 trillion-plus federal budget deficit and reducing a national debt that has crept above $16 trillion.Obama insists there is no way reduce the staggering debt and safeguard crucial social programmes without asking the wealthy to pay their "fair share" in taxes. Romney, who claims his successful business background gives him the expertise to manage the economy, favours lowering taxes and easing regulations on businesses, saying this would spur job growth.The final Washington Post-ABC News tracking poll, released on Monday, showed Obama with support from 50% of likely voters to 47% for Romney. The poll had a margin of error of 2.5 percentage points.More than 30 million absentee or early ballots have already been cast, including in excess of 3 million in Florida.

Battleground states

In surveys of the battleground states, Obama held small advantages in Nevada, Ohio, Iowa and Wisconsin - enough to deliver a second term if they held up, but not so significant that they could withstand an Election Day surge by Romney supporters. Romney appears to be performing slightly better than Obama or has pulled even in North Carolina, Virginia and Florida.The biggest focus has been on Ohio, an industrial state that has gone with the winner of the last 12 presidential elections, which both candidates visited on Monday. No Republican has ever won the White House without carrying Ohio.Both campaigns say the winner will be determined by which campaign is better at getting its supporters to the polls. The president needs the overwhelming support of blacks and Hispanics to counter Romney's big lead among white males."I encourage you to stand in line as long as you have to," Vice President Joe Biden told television cameras at a polling place in his home state of Delaware, where he and his wife were among the first voters.Election Day turnout was heavy in several storm-ravaged areas in New York and New Jersey, with many voters expressing relief and even elation at being able to vote at all, considering the devastation from Superstorm Sandy.

Obama, Tearful, Finishes Campaign In Iowa, Where It Started

 

As sentimentality goes, President Barack Obama hosting the last campaign event of his political career in Des Moines, Iowa, is hard to top. The Hawkeye State launched the then-junior senator from Illinois to national prominence. And there is a movie script-like quality to having such a historic political trajectory emerge out of the frosty cornfields. Speaking just steps from his 2008 caucus headquarters on Monday evening, it seemed at times as if the magic hadn't faded. "I came back to ask you to help us finish what we started because this is where our movement for change began," Obama declared. "To all of you who’ve lived and breathed the hard work of change: I want to thank you. You took this campaign and made it your own ... starting a movement that spread across the country."When the cynics said we couldn't, you said yes we can. You said yes we can and we did. Against all odds, we did," he said.Wiping the occasional tear from his eye, and looking over a crowd of 20,000, Obama concluded with the same story that he told on the last day of his '08 campaign: about the origins of his signature "fired-up-ready-to-go" chant. The arc of his first term in office was seemingly complete. But if anything, the late night rally in Des Moines underscored how different Obama's first and second White House runs have been. For all its poignant undertones, Monday night marked the end of a campaign that had little of the emotional appeal of four years ago. There was no sweeping "hope" narrative, no history-making proposition, no shadows of the Bush years to escape. Instead there was a business-like approach to a daunting task: how to re-elect a president with a slate of accomplishments, but with reduced popularity, a poor economy and no novelty. "The biggest difference between 2008 and 2012 is that the sense of the mission changed," said one Obama campaign adviser who, like nearly everyone, would discuss the campaign's inner workings only on condition of anonymity. "In 2008, there was the sense of optimism and hope around the mission of changing the world. In 2012, the mission is as much the clear-eyed recognition of how important stopping the other side is. It is a grimmer, more realistic sense of mission."How Obama's aides traversed this path is a story that will be told in greater detail in the election post-mortems. But months of conversations and notes kept in documents and notepads tells part of the story. And it shows a team that, while lacking the heartstrings of 2008, stayed true to other guiding principles: data-driven decision-making and solid execution. "There has always been a laser-like focus on the part of the campaign on how to get where they need to be," explained Hari Sevugan, who served as a spokesman for the 2008 campaign. "It was about delegates in 2008 and pathways to 270 Electoral College votes in 2012. "The formula, then and now, was always inspiration and energy at 30,000 feet and a no-nonsense attitude toward numbers and mechanics on the ground."It started in the spring of 2011, when top advisers to the president conducted a series of focus groups to get a clear sense of what was in store. What they found was sobering. Voters were gloomy about their current situation. Worse, they assumed their kids would inherit poorer lots than their own. They didn't all blame the president. In fact, they still liked him. But they had to be convinced of two things: That their lives could get better and that Obama was the person who could affect that. To accomplish those two tasks, the president's aides made a series of decisions. The first was to chart specific maps to 270 electoral votes. The second was to figure how best to operate within the boundaries of that map. The third was to unearth ways to make their campaign cash go further than their opponent's. In December 2011, campaign manager Jim Messina unveiled five pathways to victory during a briefing with a group of reporters. Virtually every state he identified as critical has maintained that distinction, with the exception of Arizona (which, even then, was labeled a longshot). There were some miscalculations. Messina assumed that New Hampshire and Wisconsin would both remain solidly in Obama's camp. He also gave equal weight to paths involving North Carolina (now, a reach) as those involving Ohio (less so). But the paths have largely endured. Meanwhile, aides plotted a comprehensive messaging shift and a media campaign to complement it. In December 2011, the president delivered a speech in Kansas designed to break the conversation away from deficit reduction and the debt ceiling debacle and on to job creation and economic security. The campaign booked $25 million worth of ads for May 2012 alone to build off that message. Again, not everything was pitch-perfect. The first two ads focused on clean energy, which would diminish as an issue outside of a few critical states (Iowa and Colorado). But the groundwork was laid. "It's been a very disciplined campaign, incredibly focused," said former Ohio Gov. Ted Strickland, one of the campaign's top surrogates. "And they have followed their plan as far as I can tell, without any significant deviation." The campaign began to pinch pennies. Aides booked ad purchases in bulk, instead of week by week. They gave a public okay to super PACs, despite the president's previous opposition. And they decided, like in 2008, to hoard resources, rather than share with other Democratic campaign committees. There was one place they splurged. Aides bet big on a ground game, hoping that direct "persuasion" person-to-person contacts could move the dial a few, critical, notches. "We never set out to run the same campaign and the organizational stuff which the president has always strongly believed in -was born out of a necessity of knowing that these states were going to be one- to three-point races if we were lucky," said one top Obama campaign official. And like 2008, staff members had conviction in their strategy. In the early summer, when a lagging jobs market had top Democrats fretting that Romney could win an election focused on the economy, aides scoffed at the proposition. "They are operating under the Woody Allen theory that 90 percent of life is just showing up," one top campaign official said at the time. "But there is such intense scrutiny in candidates for president. If people don't feel comfortable with who you are, it is very tough. In a race that is all about economics, this guy's profile is not a great profile." The official was right. And yet, when the campaign did put a microscope to the Romney profile launching attacks on his private sector record there were howls again. Once more, the campaign didn't budge. "Predictable for our party," another aide said of the criticism over the Bain attacks, "but stupid and wrong." It was easy, of course, to ignore the second-guessing when the plan was proving fruitful. But after the first debate, the campaign's internal resolve was tested. Publicly, aides projected calm. Privately, some were stoked with anxiety over the president's performance. Internal discussions took place over whether to alter the map or message. They tinkered with the latter "they changed their emphasis," said one top consultant to the campaign, "not giving up on the Romney-extremism but focusing more on the shifting positions." But they struck with the former. "Same map, tighter race," is how the aforementioned Obama campaign adviser put the post-debate mindset. The next month was a dizzying scramble that saw the president restore some of what he gave up that night in Denver. But even after Obama gave one final slap of the lectern and wave to the Iowa crowd on Monday, the final verdict is out on whether the decisions he and his staff made were correct. The campaign is projecting confidence. Part of it is common pre-election preening. A lot of it is faith in numbers. But a good deal of it is because, while it may not have the same feel as 2008, they've been here before. "There is no doubt about it," top adviser David Axelrod told The Huffington Post, when asked whether he felt the campaign had a leg up because of experience. "The experience of having done it helps. The people who are running our operations are the people who have been with us for five years."

NEWS,27.10.2012

Economic report not all bad for Obama

Republican challenger Mitt Romney used a government report showing tepid economic growth to hammer President Barack Obama less than two weeks before Election Day, but the report also had some good news for the president.With the Commerce Department reporting a modest 2% growth rate unlikely to make a big dent in unemployment, Romney said Obama inherited a bad situation when he took office and "made the problem worse." He criticised Obama for failing to reduce borrowing and spending, protect entitlement programs or reach deals with Republicans.The report also provided ammunition for Obama: It showed the economy grew for the 13th straight quarter at a rate that - though modest - beat expectations. Obama claims progress during his term on fixing the economy, though conceding it hasn't been fast enough, and says Romney's policies would only make matters worse.The economy remains the race's dominant issue. But voters who are still undecided aren't likely to be swayed by Friday's mixed report from the Commerce Department, experts said.Growth in the July-September quarter climbed slightly but was still too weak to stir significantly more hiring. The pace of expansion increased to a 2% annual rate from 1.3% in the April-June quarter, led by more consumer and government spending. This year's third-quarter growth is slightly below the 2.2% average pace since the recession ended in June 2009."For the average American, I don't think changes in quarterly GDP" make a big difference in their perception of the economy, said Andrew Kohut, president of the Pew Research Centre. "It's certainly good for the president that the number is not bad because that would resonate."With 11 days until the election, the economy is being kept afloat by revitalised consumer spending and the early stages of a housing recovery. But more than three years after the Great Recession ended, the US continues to struggle because businesses are reluctant to invest, and slower global growth has cut demand for American exports. The recovery is still the slowest since World War II.The latest report did exceed expectations in GDP growth and showed some progress in consumer spending, which drives 70% of economic activity.Obama took office during the worst downturn since the Great Depression and says his policies stabilised the economy later that year. He argues that his massive stimulus package and auto bailout helped it grow in 2010.

 

US economic growth accelerating

US economic growth accelerated in the third quarter as a last minute spurt in consumer spending and a surprise turnaround in government outlays offset the first cutback in business investment in more than a year.Even so, the stronger pace of expansion fell short of what is needed to make much of a dent in unemployment, and it offered little cheer for the White House ahead of the closely contested Nov. 6 presidential election.Gross domestic product grew at a 2% annual rate, the Commerce Department said on Friday in its first estimate of the third quarter, a pick-up from the second quarter's 1.3% pace. But to make substantial headway cutting the jobless rate, the economy needs to grow by more than a 2.5% pace over several quarters.The growth was a bit better than economists had expected, in part because of a surge in government defence spending, which was not expected to last. defence spending rose at its fastest pace in three years, and combined with the rise in household consumption and a jump in home building to strengthen domestic demand."The economy still has only weak forward momentum," said Nigel Gault, chief US economist at IHS Global Insight in Lexington Massachusetts. "Some underlying fundamentals are improving, but uncertainty at home and abroad is holding back the business sector."US stocks ended the day little changed, with corporate earnings holding greater sway over market sentiment, while Treasury debt prices rose. The dollar was flat against a basket of currencies.Since climbing out of recession, the US economy has faced a series of headwinds ranging from high gasoline prices to the debt turmoil in Europe and, lately, fears of US government austerity. The economy has struggled to exceed a 2% growth pace and remains about 4.5 million jobs short of where it stood when the downturn started.White House adviser Alan Krueger said the GDP report underscored the need to extend tax cuts for the middle class and small businesses, as President Barack Obama has proposed. Obama's Republican challenger, Mitt Romney, described it as evidence of the president's failed policies.In the third quarter, consumers shrugged off the impending sharp cuts in government spending and higher taxes that are due early next year and went on a bit of a shopping spree, buying automobiles and snapping up Apple Inc's iPhone 5.Consumer spending, which accounts for about 70% of US economic activity, grew at a 2% rate after increasing 1.5% in the second quarter.A separate private-sector report showed consumer sentiment rose this month to its highest point in five years, another sign households are little worried by the looming fiscal cliff at year end that will raise income taxes and is estimated to drain about $US600 billion from the economy next year unless Congress acts.High stock prices and firming home values have made households a bit more willing to take on new debt, supporting consumer spending even in the face of higher gasoline prices.An inflation gauge in the government's GDP report rose at a 1.8% rate, up from the second quarter's 0.7% pace. But a core measure that strips out food and energy costs slowed to a 1.3% rate, suggesting the rise in overall inflation will be temporary.Even so, with about 23 million Americans either out of work or underemployed, consumers might have to cut back, especially if they get slapped with a higher tax bill in 2013.Incomes were squeezed in the third quarter rising just 0.8% after accounting for inflation and taxes and households slowed their saving to ramp up their spending.Government spending, which snapped eight straight quarters of declines, accounted for 0.7%age point of GDP growth. defence outlays jumped at a 13% annual rate, the most since the second quarter of 2009, after dropping for three consecutive quarters. The surge was mainly in defence services installation, and support for both weapons and personnel.Fears of the fiscal cliff hammered business spending, which dropped at a 1.3% pace, the first decrease since the first quarter of 2011."We are being really cautious about (the) kinds of investments we make and the kinds of risks we are taking in this environment," the chief executive of consumer products maker Newell Rubbermaid Inc, Mike Polk, told on Friday.Worries over slower global growth have weighed on the corporate sector, which has issued a series of disappointing third-quarter earnings reports. According to Thomson Reuters data, 63% of companies have posted revenues below analysts' expectations; several have also announced job cuts.Slowing global demand, particularly weakness in Europe and China, caused US exports to contract for the first time since the first quarter of 2009. Exports declined by 1.6%, outstripping a 0.2% decline in imports, marking the first drop in imports for three years.Another spot of weakness in the GDP report were inventories, which were squeezed by a drought in the US Midwest. Farm inventories cut 0.42%age point from GDP growth and could remain a drag in the fourth quarter.Home building, which has been a weak spot in the economic recovery, surged at a 14.4% rate, thanks in large part to the Federal Reserve's ultra-accommodative monetary policy stance, which has driven mortgage rates to record lows.Economists say housing  the epicentre of the last recession  will contribute to growth this year for the first time since 2005.

Rightwing 'Big Bang' hits Israeli politics

The rightwing alliance between Israeli Prime Minister Benjamin Netanyahu and his foreign minister has polarised political forces in Israel ahead of next January's parliamentary election.Netanyahu and Avigdor Lieberman's surprise announcement late on Thursday that their respective Likud and Yisrael Beitenu parties would run on a joint ticket was dubbed "the rightwing Big Bang" by the Israeli press.Alongside the ultra-nationalist Yisrael Beitenu, the premier's right-wing Likud - already predicted to win the vote would be able to form a broad nationalist bloc leaning strongly to the right.Such a move would also allow Netanyahu to overcome, to some degree, the chronic instability of past coalition governments in the country."Israel needs a strong coalition government based on a political list based on genuine cooperation," Netanyahu said on Thursday evening."We ask the people to support strengthening the state, and I want a clear mandate so I can take care of the basic" issues.Israeli media quoted a survey by an adviser to Lieberman, according to which the joint list would receive 51 seats in the 120-seat Knesset, or parliament, when the votes are cast on January 22.Other polls, however, predict an outcome of less than 42 seats, the current combined number of Likud (27) and Yisrael Beitenu (15), the third largest political force in the Knesset."We are not worried about the polls, what interests us is the construction of a broad nationalist camp," Lieberman said at a news conference on Friday."Israel must move away from a reality of many parties to a system of larger parties. We will probably never reach two, like in the United States, but must achieve a system of four or five parties to ensure governmental stability," he added.Assuming his expected victory takes place, Netanyahu is certain to remain premier.But the Likud has vehemently denied a report of a premiership rotation deal with Lieberman, a populist authoritarian certain to receive a key position in the future cabinet.The leaders of the political centre and left denounced the "nationalist" and even "racist" Likud.Lieberman, a settler who was chief of Netanyahu's staff during his first term as prime minister in the late 1990s, is famous for his anti-Arab and nationalistic statements."The demon is out of its nationalistic closet. Netanyahu has removed his mask," the leader of the centre-right Kadima party Shaul Mofaz told public radio, calling on the centre to unify. "Bibi" Netanyahu and Lieberman's together might "encourage the centre-right parties to announce close cooperation in a national salvation front," wrote Yossi Sarid, former Knesset member for the left-wing Meretz party in a column in left-leaning daily Haaretz.Such a front would have "but a single mission: no to 'Biberman'."Speaking on public radio, Labour chief Shelly Yachimovich called for the creation of a "centre-left bloc, consisting of the centrist parties and moderate members of the Likud."In recent weeks media have noted the ambitions of potential candidates, such as former prime minister Ehud Olmert and former foreign minister Tzipi Livni, to head a centrist bloc to compete with Netanyahu.The Likud-Yisrael Beitenu alliance also threatens the orthodox parties, which could lose the pivotal role they have wielded in past coalitions, and they could even be excluded from the next one.According to commentators, Netanyahu's pact with Lieberman implies the adoption of at least some of Yisrael Beitenu's platform.Its policies include military conscription of rabbinic seminary (yeshivot) students and reducing the power of the Chief Rabbinate on matters such as conversions.The Israeli parliament decided earlier this month that the election would be held on January 22, 2013, nine months before its scheduled date.

EU lawmakers cancel Iran visit

A planned visit to Iran by five Euro MPs was called off on Saturday after Tehran refused to let them meet with a jailed activist lawyer and a filmmaker, just a day after the two were awarded a prestigious European human rights prize."The five MEPs were about to leave for Tehran when delegation chair (Tarja) Cronberg received a phone call from the Iranian ambassador to the EU, saying they would not be allowed to meet with the two Sakharov Prize winners," jailed lawyer Nasrin Sotoudeh and filmmaker Jafar Panahi, a European Parliament source said.Sotoudeh, 47, who is serving an 11-year jail sentence for conspiring against state security, and Panahi, 52, who is under house arrest and has been banned from making films for 20 years, were awarded the 2012 Sakharov Prize on Friday."The Islamic Republic of Iran categorically rejected any pre-conditions. Therefore this visit has been cancelled," the Young Journalists Club, an affiliate of the state broadcaster, reported on its website.The Isna news agency quoted Hossein Sheikholeslam, international affairs advisor to the speaker of parliament, as saying that Iran had "rejected a pre-condition set by the European parliamentary delegation to meet with two prisoners".EU sanctions"If the delegation agrees to visit Iran under the initially agreed conditions and agenda, then there is no objection to the visit... But we cannot accept the current pre-condition."Iran has cracked down on both since its disputed June 2009 presidential election.Sotoudeh is a leading human rights campaigner known for her work as a lawyer representing opposition activists, while Panahi has been acclaimed at international festivals for his gritty, socially critical movies.The human rights and democracy prize "is a message of solidarity and recognition to a woman and a man who have not been bowed by fear and intimidation and who have decided to put the fate of their country before their own", Parliament President Martin Schulz said on Friday.Schulz had also warned that the visit would be cancelled if the delegation was unable to meet Sotoudeh and Panahi.The rights award comes on the heels of tough new EU sanctions against Iran aimed at forcing a breakthrough in talks between global powers and Tehran on its disputed nuclear programme.After a biting oil embargo took effect in July, EU foreign ministers last week tightened the economic noose by targeting dealings with Iran's banks, shipping and gas imports.The last visit by a European parliamentary delegation to Iran was in 2007.

NEWS,10.07.2012

Russia to ratify agreement to join WTO

 

Russia's parliament is expected to ratify on Tuesday an agreement to join the World Trade Organisation (WTO) in a move that will push Moscow to open up its economy.Russia, the largest economy outside the global trade organisation, has spent 18 years trying to negotiate its entry into the body. Now that the talks are over, the Russian government, which has strongly advocated the entry, is facing criticism from many businesses and opposition politicians that the WTO membership would hurt domestic producers by flooding the market with cheaper imports.Activists including several dozen Communist Party deputies staged a protest outside the State Duma (lower house of the Russian parliament) on Tuesday morning to protest Russia's accession, which is considered a done deal since the Duma is controlled by President Vladimir Putin's party."The WTO is death to Russia!” one of the posters held by a protester.Thousands of Russian businesses are wary that the low import duties and caps on subsidies that are a condition of joining the WTO will hurt their businesses. The government, however, insists that the WTO rules will help weed out inefficient players from the market and make Russian companies and their products more competitive abroad.Russia's Economic Development Minister Andrei Belousov sought to play down those fears in a debate with lawmakers on Tuesday.He said that the government would still be able to prop up agriculture and machinery companies with subsidies and businesses would have five to seven years before Russia cuts down duties and subsidies to WTO-assigned levels."Who would want to invest in a country which wouldn't play by international rules?" Belousov said at the Duma hearing. "The WTO is a guarantee that Russian business will have the same rules to go by at home and abroad."

Eurozone offers Spain €30bn for banks

 

Eurozone finance ministers agreed on Tuesday to offer Spain €30bn this month to help its distressed banks as they raced to stay ahead of market scepticism.After nine hours of talks, Jean-Claude Juncker, the Luxembourg premier who also heads the Eurogroup, said a memorandum of understanding for Spain would be formally signed "in the second half of July," with €30bn available by the end of the month.Juncker, who has been in the job since 2005, was reappointed by the 17 ministers during talks Monday which ended well after midnight.Spain, under increasing pressure as sceptial markets pushed its borrowing costs dangerously high again, had called for up to €100bn in direct aid at a June 28-29 "breakthrough" EU summit.Aiming to keep the momentum going, ministers also agreed to extend a deadline for Spain to cut its public deficit to the EU 3.0% limit by one year to 2014 because of the difficult economic conditions Spain faces.At the same time, however, Juncker stressed that Madrid must implement measures needed to bring its public finances into line with EU norms.EU economic affairs commissioner Olli Rehn said Spain's public deficit - the shortfall of revenue to spending - was now expected at 6.3% of Gross Domestic Product this year, 4.5% in 2013 and then 2.8% in 2014.Spain in May revised its 2011 public deficit figure, saying that it stood at 8.9%, up from 8.51% reported earlier and way above the original 6.0% target for the year.Spanish Prime Minister Mariano Rajoy announced on Saturday that he would take additional steps soon to cut the public deficit and said "Europe must fulfil the accords as swiftly as possible."Juncker, widely seen as one of the founding fathers of the euro, confirmed he would stay on as head of the Eurogroup but would not serve a full two-and-a-half year term, expecting to step down early next year.In another key appointment, Germany's Klaus Regling, head of the eurozone's temporary EFSF bailout fund, was named to run its permanent successor, the European Stability Mechanism.The June summit agreed that the ESM will be able to inject funds directly into needy banks, conditional on a new European bank regulator being put in place, so as to avoid adding to the debt burden of the affected state.Asked if such a state would have to provide guarantees on such bank funding, Juncker answered with a simple "No."Rehn confirmed that position, a key issue for nervous investors, but also highlighted the importance of getting the new regulator - to be built around the European Central Bank - in place quickly.The European Financial Stability Facility (EFSF) was set up in 2010 after a first Greek bailout but it became clear after Ireland and Portugal also had to be rescued that a more powerful backstop was needed.The ESM has funds of €500bn and was supposed to be operational from this month but it has been delayed, with final ratification still pending in several member states.French Finance Minister Pierre Moscovici said the meeting had been able to make progress on several fronts and had established a heavy timetable through to the end of the year.ESM direct funding for struggling banks will "allow us to tackle the roots (of the debt crisis) by breaking the link between the banking crisis and the sovereign debt crisis," Moscovici added.The Spanish bank accord should be concluded by end-July and ultimately run up to €100bn, he said, also highlighting the need for Madrid to implement tough reforms of the sector.Juncker and Rehn said the meeting had also discussed the situation in Greece, taking note of what its newly elected government has planned, and had also reviewed the position in Cyprus, which has just asked for EU aid.Cyprus, current holder of the EU's rotating presidency, blames its problems on its banks' heavy exposure to Greece, and its aid programme is expected to be completed by September.The finance ministers' conclusions will be submitted later Tuesday to a meeting of all 27 EU finance ministers who will have initial market reaction to help focus their minds.The June summit pledges to help Spain's banks, set up a new banking regulator and ease the way for the ESM to play a greater role, were hailed as a "breakthrough" which sparked sharp market gains.But in the past week, sentiment has turned negative again, with analysts dismissive and expecting little follow-up to sustain the summit momentum.

Eurozone in freefall?

Signs are growing that Europe's economic and monetary union may be fragmenting faster than policymakers can repair it. Eurozone leaders agreed in principle on June 29 to establish a joint banking supervisor for the 17-nation single currency area, based on the European Central Bank (ECB), although most of the crucial details remain to be worked out. The proposal was a tentative first step towards a European banking union that could eventually feature a joint deposit guarantee and a bank resolution fund, to prevent bank runs or collapses sending shock waves around the continent. The leaders agreed that the eurozone's permanent bailout fund, the €500bn European Stability Mechanism, would be able to inject capital directly into banks on strict conditions once the joint supervisor is established. But the rush to put first elements of such a system in place by next year may come too late. Deposit flight from Spanish banks has been gaining pace and it is not clear a eurozone agreement to lend Madrid up to €100bns in rescue funds will reverse the flows if investors fear Spain may face a full sovereign bailout. Many banks are reorganising, or being forced to reorganise, along national lines, accentuating a deepening north-south divide within the currency bloc. An invisible financial wall, potentially as dangerous as the Iron Curtain that once divided eastern and western Europe, is slowly going up inside the euro area. The interest rate gap between north European creditor countries such as Germany and the Netherlands, whose borrowing costs are at an all-time low, and southern debtor countries like Spain and Italy, where bond yields have risen to near pre-euro levels, threatens to entrench a lasting divergence. Since government credit ratings and bond yields effectively set a floor for the borrowing costs of banks and businesses in their jurisdiction, the best-managed Spanish or Italian banks or companies have to pay far more for loans, if they can get them, than their worst-managed German or Dutch peers. The longer that situation goes on, the less chance there is of a recovery in southern Europe and the bigger will grow the wealth gap between north and south. With ever-higher unemployment and poverty levels in southern countries, a political backlash, already fierce in Greece and seething in Spain and Italy, seems inexorable. ECB president Mario Draghi acknowledged as he cut interest rates last week that the north-south disconnect was making it more difficult to un a single monetary policy. Two huge injections of cheap three-year loans into the eurozone banking system this year, amounting to €1 trillion, bought only a few months' respite. "It is not clear that there are measures that can be effective in a highly fragmented area," Draghi told journalists. Conservative German economists led by Hans-Werner Sinn, head of the Ifo institute, are warning of dire consequences for Germany from ballooning claims via the ECB's system for settling payments among national central banks, known as TARGET2. If a southern country were to default or leave the euro, they contend, Germany would be left with an astronomical bill, far beyond its theoretical limit of €211bn liability for eurozone bailout funds. As long as European monetary union is permanent and irreversible, such cross-border claims and capital flows within the currency area should not matter any more than money moving between Texas and California does. But even the faintest prospect of a Day of Reckoning changes that calculus radically. In that case, money would flood into German assets considered "safe" and out of securities and deposits in countries seen as at risk of leaving the monetary union. Some pessimists reckon we are already witnessing the early signs of such a process. Any event that makes a euro exit by Greece - the most heavily indebted member state, which is off track on its second bailout programme and in the fifth year of a recession - look more likely seems bound to accelerate those flows, despite repeated statements by EU leaders that Greece is a unique case. "If it does occur, a crisis will propagate itself through the TARGET payments system of the European System of Central Banks," US economist Peter Garber, now a global strategist with Deutsche Bank, wrote in a prophetic 1999 research paper. Either member governments would always be willing to let their national central banks give unlimited credit to each other, in which case a collapse would beimpossible, or they might be unwilling to provide boundless credit, "and this will set the parameters for the dynamics of collapse", Garber warned. "The problem is that at the time of a sovereign debt crisis, large portions of a national balance sheet may suddenly flee to the ECB's books, possibly overwhelming the capacity of a bailout fund to absorb the entire hit," he wrote in 2010, after the start of the Greek crisis, in a report for Deutsche Bank. European officials tend to roll their eyes at such theories, insisting the euro is forever, so the issue does not arise. In practice, national regulators in some EU countries are moving quietly to try to reduce their home banks' exposure to such an eventuality. The ECB itself last week set a limit on the amount of state-backed bank bonds that banks could use as collateral in its lending operations. In one high-profile case, Germany's financial regulator Bafin ordered HypoVereinsbank (HVB), the German subsidiary of UniCredit, to curb transfers to its parent bank in Italy last year, people familiar with the case said. Such restrictions are legal, since bank supervision is at national level, but they run counter to the principle of the free movement of capital in the EU's single market and to an integrated currency union. Whether a single eurozone banking supervisor would be able to overrule those curbs is one of the many uncertainties left by the summit deal. In any case, common supervision without joint deposit insurance may be insufficient to reverse capital flight. German Chancellor Angela Merkel, keen to shield her grumpy taxpayers, has so far rejected any sharing of liability for guaranteeing bank deposits or winding up failed banks. Veteran EU watchers say political determination to make the single currency irreversible will drive eurozone leaders to give birth to a full banking union, and the decision to create a joint supervisor effectively got them pregnant. But for now, Europe's financial disintegration seems to be moving faster than the forces of financial integration.

NEWS,26.06.2012

British economy in the 'middle of a deep crisis'

 

Britain's economic outlook has worsened markedly in the space of just six weeks due to the deepening euro zone crisis and signs that a global slowdown is taking root in the United States and emerging markets, the Bank of England said today.BoE Governor Mervyn King told legislators the world is not yet halfway through the financial crisis that began in 2008, and that Britain risked a downward spiral as businesses continue to put off investment due to the turmoil in the euro zone.His comments bolster expectations that the BoE will launch a new round of asset purchases next month under its quantitative easing programme, and suggested the central bank and British government may need to come up with further measures.Evoking the depression-ridden 1930s, King said it would be difficult to overcome the hit to confidence from the "black cloud" of uncertainty with consumer and business spending alone."We are in the middle of a deep crisis, with enormous challenges to put our own banking system right and challenges for the rest of the world that they are struggling with," King told parliament's Treasury Committee.Britain's economy slipped into its second recession since the start of the financial crisis around the turn of the year and fears of a longer slump have been rising as companies hold back investment and exports suffer from the euro zone crisis.The government and BoE announced two schemes on June 14 to get credit flowing through the economy, but finance minister George Osborne remains under pressure to increase spending to jump-start growth.Osborne announced on Tuesday that he would cancel a planned rise in fuel duty, providing some relief for hard-pressed consumers and businesses.An unexpected leap in borrowing in May, however, highlighted the constraints for the government, which has pledged to erase a budget deficit still at around 8 percent of GDP.Speaking two days before a European Union summit at which measures to spur growth will be a focus, King called on euro zone countries to finally accept that some of the huge debt pile will never be paid back."I am pessimistic (about the euro zone outlook). I am particularly concerned because over two years now we have seen the situation in the euro area get worse and the problem being pushed down the road," King said."In the last six weeks ... I am very struck by how much has changed since we produced our May Inflation Report," he added.Global worries Earlier this month, the central bank's Monetary Policy Committee voted 5-4 against buying more government bonds with newly created money to boost the economy.King was one of those favouring buying another 50 billion pounds of gilts, to take the total to 375 billion pounds."The remarks of Sir Mervyn King and other MPC members are pretty grim, and fan belief that the Bank of England is likely to pull the Quantitative Easing lever again in July," said IHS Global Insight economist Howard Archer.Policymakers Ben Broadbent and Spencer Dale who both voted against more stimulus in June and David Miles all identified the euro zone debt crisis as the main threat to Britain's economy in their annual reports to parliament.Chief economist Dale said he thought easing credit costs might be a better option to help the economy, while Broadbent also said he would take new schemes designed to do so into account when deciding how to vote next month.The new 'funding for lending' scheme - designed to lower banks' funding costs in return for more lending to companies and households by allowing them to swap illiquid assets for more liquid ones should be up and running within weeks, King said.Lasting damage? Britain has not recovered from the 2008/2009 slump, which left many Britons worse off. Now, fears are rising that a prolonged recession will do lasting damage to the economy."What has particularly concerned me in the last several months - why I have voted for more easing policy was my concern about the worsening I see in the position in Asia and other emerging markets," King said."And my colleagues in the United States are more concerned than they were at the beginning of the year about what is happening to the American economy," he added.The central bank governor remained adamant that QE cash injections could still stimulate the economy."We haven't run out of road in terms of our basic policy weapon, asset purchases, and we are prepared to use that if necessary," King said.But he agreed with the view of the Bank for International Settlements - published in its annual report on Sunday - that ultra-low interest rates pose dangers in the long run, and said monetary policy alone would not end the crisis.

 

'Mr Euro' named Greek finance minister

 

Yannis Stournaras, a well-respected liberal economist, was appointed Greece's new finance minister today after the sudden resignation of the first choice for the job at a crucial moment for the debt-laden country.The new conservative-led government scrambled to make a quick decision on the post after banker Vassilis Rapanos quit yesterday on the advice of doctors after spending four days in hospital with dizziness and abdominal pains.His sudden resignation threw the government into confusion at a time when it faces the daunting task of trying to persuade sceptical international lenders to ease the harsh terms of a bailout that has enraged the population.With Greece weeks away from running out of cash and in desperate need of a minister to lead negotiations with lenders, party officials said the three ruling coalition leaders quickly agreed on Samaras's choice of Stournaras, 55, who is nicknamed "Mr Euro" in Greece.He faces a difficult juggling act pushing for more time and money from sceptical foreign lenders while coaxing reluctan officials at home to push through unpopular reforms."Stournaras is a serious, respected person who will inspire some confidence in the markets.But he is entering a bad government, where many old-style, spendthrift politicians are occupying key positions," said political analyst John Loulis."He will have to wage a hard battle against them. He is entering the wolf's lair and he won't survive without the prime minister's solid support."The Samaras government has been in place less than a week but already looks accident prone after deputy Shipping Minister George Vernikos also resigned yesterdayHe had been attacked by the media and opposition for using offshore companies.Ministers are banned from using such companies, which are a common tactic by wealthy Greeks to avoid taxes.Stournaras is an economics professor at the University of Athens and the head of the influential IOBE think-tank. Most recently he was development minister in the caretaker government that led Greece to elections on June 17.Described by colleagues as affable, he is considered an ardent supporter of structural reforms to make the economy more competitive - ideas that are likely to win him favour with international lenders exasperated with the slow pace of reform.

NEWS,16.05.2012.

Judge to lead Greece in emergency Government

 

 Greece put a senior judge in charge of an emergency Government yesterday to lead it to new elections on June 17.In a sharp blow to confidence, sources at the European Central Bank it had halted liquidity operations with some Greek banks because their capital had been too far depleted.The move would mean those banks are no longer able to park assets at the ECB in return for cash, and would have to seek costlier emergency financing from the Bank of Greece.It was not clear which banks, or how many of them, were affected. One person familiar with the matter said the capital of four Greek banks was so depleted they were operating with negative equity capital.Greeks have been withdrawing hundreds of millions of euros (dollars) from banks in recent days as the prospect of the country being forced out of the European Union's common currency zone seems ever more real - although there has so far been no sign of a run on bank branches in Athens.European leaders who once denied vociferously that they were fretting over Greece leaving their currency union have given up pretence.Asked if he was concerned about a Greek exit, European Central Bank chief Mario Draghi said simply: "No comment".Political leaders failed to form a government following an inconclusive parliamentary election on May 6, leaving the state with its coffers almost empty and no elected cabinet in place to satisfy lenders it deserves the money needed to stay afloat.President Karolos Papoulias, whose powers as head of state are limited, named supreme administrative court head Panagiotis Pikrammenos as caretaker prime minister.He will have no power to take political decisions, only to carry Greece into the vote.The parliament that was elected on May 6 will convene today and be immediately dissolved, a presidency source said.The interim leader is little known. State television said he was born in 1945 and studied law in Athens and Paris. A court source said he would name as few ministers as possible."Thank you for your trust, and I believe that I am worthy of this mission," Pikrammenos said at a meeting with the president. "This is purely a caretaker government. However, it escapes no one that our country is going through difficult times."He repeated a joke he said he had read in the press, that his own name, which translates as "sorrowful" in English, made him suited to be the last prime minister of a political era.Leftists lead A new poll confirmed what other surveys have shown: that radical leftists who reject a bailout agreed with the EU and IMF are poised for victory, and the two establishment parties that agreed the rescue are sinking further after an historic wipeout 10 days ago.The leftists argue they can tear up the bailout and keep the euro, but European leaders say if Greece fails to meet promises to them, lenders will pull the plug on financing, driving Athens to bankruptcy and a swift exit from the EU single currency.On Monday, according to an official account, the president told party chiefs that figures from the central bank headed by George Provopoulos showed savers had withdrawn up to 800 million euros ($1 billion) from banks."Mr. Provopoulos told me there was no panic, but there was great fear that could develop into a panic," the president was quoted as saying in minutes of a meeting that failed to yield agreement on a cabinet."Withdrawals and outflows by 4 pm when I called him exceeded 600 million euros and reached 700 million euros," he said. "He expects total outflows of about 800 million euros, including conversions into German Bunds and other such things."Several banking sources told Reuters similar amounts had also been withdrawn on Tuesday. Nevertheless, there was no sign of panic or queues at bank branches in Athens on Wednesday. Bankers dismissed suggestions that a bank run was looming.A senior executive at a large Greek bank: "There is no bank run, no queues or panic. The situation is better than I expected. The amount of deposit withdrawals the president mentioned referred to three days, not one."Still, some were taking no risks. A 60-year-old textiles store owner who gave his name only as Nasos said he had transferred 10,000 euros over the phone to a bank in fellow eurozone state Cyprus on Tuesday afternoon."Any way you see it, things are difficult. If they call elections on June 17 - then everyone will take their money out on the Friday." That June 17 date was later confirmed.Charles Dallara, chief negotiator for the body representing private sector holders of Greek bonds, said there had been "a pickup in deposit flight from Greece".Dallara, who as head of the International Institute of Finance spent months negotiating the largest ever sovereign debt restructuring, said a Greek exit from the euro zone would be "somewhere between catastrophic and Armageddon" for Europe.

Merkel, Hollande promise joint growth strategy

 

 New French President Francois Hollande and German Chancellor Angela Merkel have acknowledged differences over how to boost growth in recession-plagued Europe, but pledged to forge a joint approach in time for an EU summit next month.The Socialist Hollande jetted to Berlin yesterday only hours after being sworn in to meet Merkel, a conservative, for the first time, arriving over an hour late after his plane was hit by lightning and he was forced to return briefly to Paris.The meeting was being closely watched for signs the leaders of Europe's biggest economies will be able to move beyond a war of words over how to resolve the debt crisis that now threatens to tear apart the 13-year-old currency bloc.Hollande sharply criticised Merkel during his election campaign for insisting on tough austerity to bring down suffocating debt levels across the euro zone. She in turn had backed Hollande's rival, conservative incumbent Nicolas Sarkozy.Supported by others in southern Europe, Hollande has vowed to shift the focus to growth and reopen a tough new set of budget rules that Merkel and other EU leaders agreed to adopt earlier this year - a step considered taboo in Berlin."I said it during my election campaign and I say it again now as president that I want to renegotiate what has been agreed to include a growth dimension," Hollande told a joint news conference with Merkel at the Chancellery in the German capital.Merkel's five-year double act with Sarkozy earned the duo the moniker "Merkozy" for their close cooperation during Europe's debt crisis. The new Franco-German couple - referred to by some as "Merkollande" - took care to play down their differences on Tuesday, hoping to send a signal of unity at a time when speculation is growing that Greece may have to exit the euro zone and return to the drachma."Growth has to feed through to the people. And that's why I'm happy that we'll discuss different ideas on how to achieve growth," Merkel said.They said the goal was to present joint proposals at a European Union summit in late June.Growth pact Instead of reopening Merkel's "fiscal compact", they are expected to complement it with a new "growth pact".Berlin has already signalled it is open to several ideas favoured by Hollande, including more flexible use of EU structural aid, a bigger role for the European Investment Bank and the introduction of "project bonds" to foster investments in infrastructure like transportation and energy networks.But most economists agree that these steps will make little difference to countries like Greece, which is in its fifth year of recession and has seen unemployment surge to 22 percent.That means Germany is likely to come under pressure to take additional steps, like giving struggling euro countries more time to reduce their deficits, a step it has so far resisted for fear of spooking jittery financial markets.Although the reserved Merkel learned over time to work with the impulsive Sarkozy, her advisers often complained about his erratic behaviour and some believe she will ultimately form a closer bond with the more outwardly cautious Hollande.The two were born less than a month apart, grew up in religious households and both scorn the flashy styles of their more charismatic predecessors, Sarkozy and Gerhard Schroeder.Hollande noted that French and German leaders of different political stripes had a long history of working well together to promote the common European project, referring to Schroeder and Jacques Chirac, as well as to Helmut Kohl and Francois Mitterrand, and Helmut Schmidt and Valery Giscard d'Estaing.After the news conference, the two leaders dined on lamb schnitzel and asparagus on the eighth floor of the Chancellery, overlooking the Tiergarten park and the Reichstag parliament building. Aides said they had a broad conversation on topics ranging from economic and foreign policy to bilateral issues.Hollande later flew back to Paris. He is due in Washington later in the week to meet US President Barack Obama ahead of G8 and NATO summits at Camp David and Chicago.Hollande finds himself in the hot seat from day one. Earlier on Tuesday, Greece abandoned a nine-day hunt for a government and called a new election that could hand victory next month to leftists opposed to the terms of the country's EU/IMF bailout.A growing number of policymakers in Europe have warned over the past week that if Greece does not stick to the budget cuts and structural reforms agreed with its international lenders, it may have no future in the currency bloc.Both Merkel and Hollande said they wanted Athens to remain a part of the euro project and stood ready to explore ways to support the Greek economy so it could return to growth: "Like Mrs. Merkel, I want Greece to remain in the euro zone," Hollande said.

NEWS,05.04.2012.

Retiree's suicide jolts Greece, triggers violence

A Greek retiree shot himself dead in Athens' main square Wednesday, blasting politicians over the country's financial crisis in a suicide note that triggered violent clashes hours later between police and anti-austerity protesters. Riot police fired tear gas and flash grenades after protests attended by some 1,500 people turned violent, and youths hurled rocks and petrol bombs outside Parliament. Authorities reported no injuries or arrests. The 77-year-old retired pharmacist drew a handgun and shot himself in the head near a subway exit on central Syntagma Square which was crowded with commuters, police said. The square, opposite Parliament, has become the focal point of frequent public protests against Greece's two-year austerity campaign. The incident, during morning rush hour, jolted public opinion and quickly entered political debate, with the prime minister and the heads of both parties backing Greece's governing coalition expressing sorrow. "A pharmacist ought to be able to live comfortably on his pension," said Vassilis Papadopoulos, a spokesman for the "I won't pay" group. "So for him to reach the point of suicide out of economic hardship means a lot. It shows how the social fabric is unraveling." Greece has relied on international rescue loans since May 2010. To secure them, Athens implemented harsh austerity measures, slashing pensions and salaries while repeatedly raising taxes. But the belt-tightening worsened the recession and led to thousands of job losses that left one in five Greeks unemployed. "As a Greek, I am truly shocked," Dimitris Giannopoulos, an Athens doctor, said before the protest. "I am shocked because I see that (the government is) destroying my dignity ... and the only thing they care about are bank accounts." Police said a handwritten note was found on the retired pharmacist's body in which he attributed his decision to the debt crisis. According to a text of the note published by local media, the man said the government had made it impossible for him to survive on the pension he had paid into for 35 years. "I find no other solution than a dignified end before I start searching through the trash for food," read the note. Police did not confirm whether it was genuine. Greece has seen an increase in suicides over the past two years of economic hardship, during which the country repeatedly teetered on the brink of bankruptcy. Police did not release the pharmacist's name and offered few other details. By Wednesday evening, dozens of written messages had been pinned to the tree under which the man shot himself, some reading: "It was a murder, not a suicide," and "Austerity kills." Hundreds of protesters made their way across the street from the square to outside Parliament and the Tomb of the Unknown Soldier, chanting: "This was not a suicide, it was a state-perpetrated murder" and "Blood flows and seeks revenge." Dozens of riot police stood guard. Papadopoulos, the protest organizer, said the suicide shows Greeks can take no more austerity. "This suicide is political in nature and heavy in symbolism. It's not like a suicide at home," Papadopoulos said in a telephone interview. "There was a political suicide note, and it happened in front of a clearly political site, Parliament, where the austerity measures are approved." Prime Minister Lucas Papademos issued a statement as protesters gathered at the site of the suicide. "It is tragic for one of our fellow citizens to end his life," he said. "In these difficult hours for our society we must all  the state and the citizens  support the people among us who are desperate." Government spokesman Pantelis Kapsis described the incident as "a human tragedy," but said it should not become part of the political debate. "I don't know the exact circumstances that led that man to his act," Kapsis said. "I believe we must all remain calm and show respect for the true events, which we do not yet fully know." Evangelos Venizelos, leader of the Socialist party, said the suicide "is so overwhelming that it renders any political comment unbecoming and cheap." "Let us reflect on the condition of the country and of our society in terms of solidarity and cohesion," said Venizelos, who served as finance minister for eight months before resigning to lead the Socialists. Conservative party head Antonis Samaras said the tragedy highlighted the urgency of getting Greece out of the crisis. "Unfortunately, this is not the first (suicide)," he said. "They have reached record levels." More protests are planned Thursday.