Marcus: Global recovery years away
If things do not get any worse it will probably
still take a number of years before the world is back to more normal growth and
output gaps are fully closed‚ Reserve Bank governor Gill Marcus cautioned on
Tuesday.
Speaking at a FM Top Companies awards function‚ she said there would probably be at least one or two more forms of the crisis before it could safely be said that recovery was sustainable.
“The economic environment is a difficult one. The world is in its sixth year of crisis: a crisis that has repeatedly mutated‚ shifting its epicentre from a sub-prime crisis to systemic banking crisis; a liquidity‚ fiscal deficit and sovereign debt crisis. Measures taken to address each of these elements have had unintended consequences. Austerity measures have contributed to an unemployment crisis of immense proportions‚ particularly for the young.
“There will probably be at least one or two more forms of the crisis before we can safely say that recovery is sustainable. And even then‚ as we can see in the United States where there are signs of recovery‚ the measures that are outlined to be taken very cautiously and with considerable conditionality‚ such as a tapering off of Quantitative Easing‚ have also had unintended consequences‚” Marcus said.
As had been seen in recent days and weeks‚ the exchange rates of many emerging market economies had been impacted negatively by an outflow of capital. This development could well mark the start of a new mutation of the ongoing global crisis‚ she added.
“If things do not get any worse it will probably still take a number of years before the world is back to more normal growth and output gaps are fully closed. Even then‚ there is debate about whether that new normal would be at a lower rate of growth than in the past. All in all‚ it is a very uncertain and difficult decade for individuals‚ companies and countries‚” Marcus said.
South Africa’s weak first quarter annualised growth rate of 0.9 per cent was‚ to some extent‚ consistent with what was seen happening globally and in other emerging markets and these developments had‚ in part‚ contributed towards a weaker rand exchange rate. But domestic factors had also contributed.
“These have to do with lost production in the mining sector‚ instability caused by violent and often illegal strike action and persistent capacity constraints in infrastructure‚ electricity in particular‚” Marcus noted.
The source of this vulnerability‚ she pointed out‚ was primarily a large current account deficit‚ a high budget deficit‚ rising public debt and relatively low foreign exchange reserves as well as high household indebtedness and inflation close to the top of the target range - all suggesting limited room for fiscal or monetary support.
Speaking at a FM Top Companies awards function‚ she said there would probably be at least one or two more forms of the crisis before it could safely be said that recovery was sustainable.
“The economic environment is a difficult one. The world is in its sixth year of crisis: a crisis that has repeatedly mutated‚ shifting its epicentre from a sub-prime crisis to systemic banking crisis; a liquidity‚ fiscal deficit and sovereign debt crisis. Measures taken to address each of these elements have had unintended consequences. Austerity measures have contributed to an unemployment crisis of immense proportions‚ particularly for the young.
“There will probably be at least one or two more forms of the crisis before we can safely say that recovery is sustainable. And even then‚ as we can see in the United States where there are signs of recovery‚ the measures that are outlined to be taken very cautiously and with considerable conditionality‚ such as a tapering off of Quantitative Easing‚ have also had unintended consequences‚” Marcus said.
As had been seen in recent days and weeks‚ the exchange rates of many emerging market economies had been impacted negatively by an outflow of capital. This development could well mark the start of a new mutation of the ongoing global crisis‚ she added.
“If things do not get any worse it will probably still take a number of years before the world is back to more normal growth and output gaps are fully closed. Even then‚ there is debate about whether that new normal would be at a lower rate of growth than in the past. All in all‚ it is a very uncertain and difficult decade for individuals‚ companies and countries‚” Marcus said.
South Africa’s weak first quarter annualised growth rate of 0.9 per cent was‚ to some extent‚ consistent with what was seen happening globally and in other emerging markets and these developments had‚ in part‚ contributed towards a weaker rand exchange rate. But domestic factors had also contributed.
“These have to do with lost production in the mining sector‚ instability caused by violent and often illegal strike action and persistent capacity constraints in infrastructure‚ electricity in particular‚” Marcus noted.
The source of this vulnerability‚ she pointed out‚ was primarily a large current account deficit‚ a high budget deficit‚ rising public debt and relatively low foreign exchange reserves as well as high household indebtedness and inflation close to the top of the target range - all suggesting limited room for fiscal or monetary support.
Berlin hails US ties 50yrs after JFK speech
Germany hailed the endurance of transatlantic
ties on Wednesday on the 50th anniversary of US president John F Kennedy's
stirring Cold War declaration "Ich bin ein Berliner", with
celebrations across the reunited city.
Ahead of the main commemoration ceremony at the old West Berlin town hall where JFK addressed 450 000 people in 1963, Foreign Minister Guido Westerwelle said the historic speech remained "unforgettable for us Germans".
"Berlin was a divided city, the Cold War had separated Germans along the Wall," he said in a statement. "President Kennedy gave Berliners new hope in difficult times and all Germans new confidence."
Westerwelle said last week's visit to Berlin by President Barack Obama, in which he borrowed tropes from Kennedy's speech to call for stronger transatlantic co-operation on global crises, showed that the spirit of Kennedy's pledge was alive and well.
"Shared history has become vibrant German-American friendship, which in a world of fundamental change is as important today as it was then," he said.
"In his speech at the Brandenburg Gate, President Obama underlined the partnership of values that binds us together which Kennedy had hailed. That is a good foundation to weather the challenges of 21st century globalisation together."
‘Ich bin ein Berliner’
Kennedy's eight-hour visit on 26 June 1963 came at a critical stage of the Cold War, and Berlin was on the front line.
It was only a year since the United States and Soviet Union nearly went to war in the Cuban missile crisis, and two years after East Germany's communist regime erected the Berlin Wall, cleaving the city in two.
In an electrifying 10-minute address, Kennedy gave Berliners what they wanted to hear: a condemnation of the Wall and a promise that the free world stood by them.
"Freedom has many difficulties and democracy is not perfect but we have never had to put a wall up to keep our people in, to prevent them from leaving us," the defiant president said, in a firm rejection of communist appeasement.
At the end, Kennedy uttered the immortal words: "All free men, wherever they may live, are citizens of Berlin and therefore, as a free man, I take pride in the words 'Ich bin ein Berliner' [I am a Berliner]."
His vow, just five months before he would be assassinated in Dallas, was greeted with rapturous applause from the crowds of Berliners thronging the square.
Ahead of the main commemoration ceremony at the old West Berlin town hall where JFK addressed 450 000 people in 1963, Foreign Minister Guido Westerwelle said the historic speech remained "unforgettable for us Germans".
"Berlin was a divided city, the Cold War had separated Germans along the Wall," he said in a statement. "President Kennedy gave Berliners new hope in difficult times and all Germans new confidence."
Westerwelle said last week's visit to Berlin by President Barack Obama, in which he borrowed tropes from Kennedy's speech to call for stronger transatlantic co-operation on global crises, showed that the spirit of Kennedy's pledge was alive and well.
"Shared history has become vibrant German-American friendship, which in a world of fundamental change is as important today as it was then," he said.
"In his speech at the Brandenburg Gate, President Obama underlined the partnership of values that binds us together which Kennedy had hailed. That is a good foundation to weather the challenges of 21st century globalisation together."
‘Ich bin ein Berliner’
Kennedy's eight-hour visit on 26 June 1963 came at a critical stage of the Cold War, and Berlin was on the front line.
It was only a year since the United States and Soviet Union nearly went to war in the Cuban missile crisis, and two years after East Germany's communist regime erected the Berlin Wall, cleaving the city in two.
In an electrifying 10-minute address, Kennedy gave Berliners what they wanted to hear: a condemnation of the Wall and a promise that the free world stood by them.
"Freedom has many difficulties and democracy is not perfect but we have never had to put a wall up to keep our people in, to prevent them from leaving us," the defiant president said, in a firm rejection of communist appeasement.
At the end, Kennedy uttered the immortal words: "All free men, wherever they may live, are citizens of Berlin and therefore, as a free man, I take pride in the words 'Ich bin ein Berliner' [I am a Berliner]."
His vow, just five months before he would be assassinated in Dallas, was greeted with rapturous applause from the crowds of Berliners thronging the square.
Democrat wins US Senate election
Longtime Democratic US Representative Edward
Markey defeated Republican political newcomer Gabriel Gomez in a special
election on Tuesday for the state's US Senate seat long held
by John Kerry.
Markey, aged 66, won the early backing of Kerry and much of the state's Democratic political establishment, which was set on avoiding a repeat of the stunning loss it suffered three years ago, when Republican state Senator Scott Brown upset Democratic state Attorney General Martha Coakley in the election to replace the late Democratic Senator Edward Kennedy.
Gomez, a 47-year-old businessman and former Navy Seal, positioned himself as a moderate and Washington outsider who would challenge partisan gridlock, contrasting himself with Markey, who was first elected to the US House of Representatives in 1976.
Markey defeated Gomez by a margin of 55% to 45%. His victory does not change the balance of power in the Senate since Governor Deval Patrick had appointed a Democrat to fill the seat for several months until the special election. There are currently 52 Democrats and two independents who caucus with the majority in the 100-seat Senate.
Tuesday's contest served as a reminder that President Barack Obama has vowed to play a more aggressive political role for his party through next year's mid-term elections with huge stakes for his legacy and final-term agenda. Democrats face several competitive Senate contests in less-friendly terrain in 2014, when their grip on the Senate majority will be tested.
The White House, led by Obama himself, invested heavily in the Massachusetts' election, fuelled largely by widespread fear of another Brown-like surprise.
Moral victory
"The people of Massachusetts can be proud that they have another strong leader fighting for them in the Senate, and people across the country will benefit from Ed's talent and integrity," Obama said in a statement on Tuesday night.
Republicans claimed a moral victory of sorts, having forced Democrats to deploy their biggest political stars in an election in which Markey enjoyed significant advantages in Democrat-friendly Massachusetts. Markey's victory follows personal visits by Obama, First Lady Michelle Obama, Vice President Joe Biden, and former President Bill Clinton.
Markey, who declared victory two hours after the polls closed, ticked off a slew of legislative priorities. He said he wanted to help spark a "green energy revolution", protect seniors, boost job growth in Massachusetts and ensure young people can attend college without shouldering enormous debt.
Gomez said he called Markey to congratulate him and wished him "nothing but the best". He said he'd waged the campaign with honour and integrity but was heavily outspent by Democrats in the five-month election.
"Not every fight is a fair fight," Gomez said in his concession speech. "Sometimes you face overpowering force. We were massively overspent. We went up against literally the whole national Democratic Party. And all its allies."
Markey outspent Gomez throughout the race, and Republicans were unable to match a well-oiled Democratic field organisation in an election that saw relatively light turnout in much of the heavily Democratic state.
Kerry left the Senate this year after being confirmed as US secretary of state. Markey will fill out the remainder of Kerry's term, which expires in January 2015, meaning that another Senate election will be held a year from November.
Though Markey has a lengthy career in Congress, he will become the state's junior senator to Elizabeth Warren, who has been in office less than six months after defeating Brown in November.
Markey, aged 66, won the early backing of Kerry and much of the state's Democratic political establishment, which was set on avoiding a repeat of the stunning loss it suffered three years ago, when Republican state Senator Scott Brown upset Democratic state Attorney General Martha Coakley in the election to replace the late Democratic Senator Edward Kennedy.
Gomez, a 47-year-old businessman and former Navy Seal, positioned himself as a moderate and Washington outsider who would challenge partisan gridlock, contrasting himself with Markey, who was first elected to the US House of Representatives in 1976.
Markey defeated Gomez by a margin of 55% to 45%. His victory does not change the balance of power in the Senate since Governor Deval Patrick had appointed a Democrat to fill the seat for several months until the special election. There are currently 52 Democrats and two independents who caucus with the majority in the 100-seat Senate.
Tuesday's contest served as a reminder that President Barack Obama has vowed to play a more aggressive political role for his party through next year's mid-term elections with huge stakes for his legacy and final-term agenda. Democrats face several competitive Senate contests in less-friendly terrain in 2014, when their grip on the Senate majority will be tested.
The White House, led by Obama himself, invested heavily in the Massachusetts' election, fuelled largely by widespread fear of another Brown-like surprise.
Moral victory
"The people of Massachusetts can be proud that they have another strong leader fighting for them in the Senate, and people across the country will benefit from Ed's talent and integrity," Obama said in a statement on Tuesday night.
Republicans claimed a moral victory of sorts, having forced Democrats to deploy their biggest political stars in an election in which Markey enjoyed significant advantages in Democrat-friendly Massachusetts. Markey's victory follows personal visits by Obama, First Lady Michelle Obama, Vice President Joe Biden, and former President Bill Clinton.
Markey, who declared victory two hours after the polls closed, ticked off a slew of legislative priorities. He said he wanted to help spark a "green energy revolution", protect seniors, boost job growth in Massachusetts and ensure young people can attend college without shouldering enormous debt.
Gomez said he called Markey to congratulate him and wished him "nothing but the best". He said he'd waged the campaign with honour and integrity but was heavily outspent by Democrats in the five-month election.
"Not every fight is a fair fight," Gomez said in his concession speech. "Sometimes you face overpowering force. We were massively overspent. We went up against literally the whole national Democratic Party. And all its allies."
Markey outspent Gomez throughout the race, and Republicans were unable to match a well-oiled Democratic field organisation in an election that saw relatively light turnout in much of the heavily Democratic state.
Kerry left the Senate this year after being confirmed as US secretary of state. Markey will fill out the remainder of Kerry's term, which expires in January 2015, meaning that another Senate election will be held a year from November.
Though Markey has a lengthy career in Congress, he will become the state's junior senator to Elizabeth Warren, who has been in office less than six months after defeating Brown in November.
Snowden spends 4th day at Moscow airport
US intelligence leaker Edward Snowden on
Wednesday spent a fourth day at a Moscow airport with his onward travel plans
still a mystery after Russian President Vladimir Putin rejected calls for his
extradition to the United States.
The United States told Russia it has a "clear legal basis" to expel Snowden but anti-secrecy website WikiLeaks, which helped organise his flight from Hong Kong, said he risks being stuck in Russia "permanently".
Meanwhile Venezuela's President Nicolas Maduro, who by coincidence is expected in Moscow next week for an energy summit, said Caracas would consider any asylum request from Snowden just as Ecuador is doing.
In his first comments on the chase for the former contractor that has captivated world attention, Putin on Tuesday confirmed that Snowden had arrived in Moscow but said he had never left the airport's transit zone.
"He arrived as a transit passenger... He did not cross the state border," Putin said at a news conference in Finland late on Tuesday. "For us, this was completely unexpected," he added.
"Mr Snowden is a free man, the sooner he selects his final destination point, the better for us and for himself," he said.
Travel plans unknown
Snowden who leaked revelations of massive US surveillance programmes to the media, had been expected to board a flight for Cuba on Monday, reportedly on his way to seek asylum in Ecuador.
But he never did and Putin hinted that his onward travel plans were still unknown. His US passport has been cancelled but WikiLeaks says he left Hong Kong with a refugee document supplied by Ecuador.
Snowden's extended stay in Moscow has prompted comparisons with the Tom Hanks hit film The Terminal about a man living in an airport, while British gambling website William Hill has opened betting on his final destination.
"Cancelling Snowden's passport and bullying intermediary countries may keep Snowden permanently in Russia," WikiLeaks said in a statement on Twitter.
The US urged Russia to use all means to expel Snowden, who arrived at Moscow's Sheremetyevo airport on a flight from Hong Kong on Sunday despite the US issuing a request for his arrest in China.
"While we do not have an extradition treaty with Russia, there is nonetheless a clear legal basis to expel Mr Snowden," National Security spokesperson Caitlin Hayden said.
Debriefing denied
Hayden said that Snowden could be expelled on the basis of his travel documents and the pending charges against him. However Putin insisted that Russia could not extradite Snowden as it has no extradition agreement with the United States.
Putin said he would prefer not to deal with cases such as those of Snowden and WikiLeaks founder Julian Assange, who is holed up in Ecuador's embassy in London to avoid allegations of sexual assault in Sweden.
"It's the same as shearing a piglet: There's a lot of squealing and not much wool," he said.
But Putin dismissed speculation that Snowden a potential intelligence goldmine was being purposely held up at the airport to be interrogated by Russian spies.
WikiLeaks also denied he was being debriefed by the Russian security services and confirmed that British activist Sarah Harrison from its legal team "is escorting him at all times".
Snowden had been expected to travel on with the state carrier Aeroflot on Monday to Havana, but never appeared on the flight. He has not been spotted in the airport, located north-west of Moscow, and is speculated to be inside a capsule hotel in the transit zone.
There is no scheduled flight from Sheremetyevo to Havana on Wednesday. The RIA Novosti quoted unidentified sources as saying that Snowden had also booked on Tuesday's flight to Havana but the reservation had been cancelled a few hours before take-off.
'Ill-considered pressure'
The Interfax news agency cited an unnamed source in Snowden's entourage claiming he is in limbo because his passport was cancelled by the US.
"Snowden's American passport is annulled, he has no other ID with him. Therefore he is obliged to stay in the Sheremetyevo transit zone, since he can neither enter Russia nor buy a ticket," the source said.
Snowden abandoned his high-paying intelligence contractor job in Hawaii and went to Hong Kong on 20 May to begin issuing a series of leaks on the NSA gathering of phone call logs and internet data, triggering concern from governments around the world.
Hong Kong, a special administrative region under Chinese rule that has maintained its own British-derived legal system, said the US government request to arrest him did not fully comply with its legal requirements.
But White House spokesperson Jay Carney lashed out at Beijing, saying its failure to "honour extradition obligations" had dealt a "serious setback" to efforts to build trust with new President Xi Jinping.
The United States is applying "ill-considered pressure" that will only serve to "bring Moscow and Beijing closer together", Alexei Pushkov, head of the Russian lower house of parliament's foreign affairs committee, wrote on Twitter on Wednesday.
The dispute risks sharpening tensions between Washington and Moscow as well as Beijing when they are struggling to overcome differences to end the conflict in Syria.
The United States told Russia it has a "clear legal basis" to expel Snowden but anti-secrecy website WikiLeaks, which helped organise his flight from Hong Kong, said he risks being stuck in Russia "permanently".
Meanwhile Venezuela's President Nicolas Maduro, who by coincidence is expected in Moscow next week for an energy summit, said Caracas would consider any asylum request from Snowden just as Ecuador is doing.
In his first comments on the chase for the former contractor that has captivated world attention, Putin on Tuesday confirmed that Snowden had arrived in Moscow but said he had never left the airport's transit zone.
"He arrived as a transit passenger... He did not cross the state border," Putin said at a news conference in Finland late on Tuesday. "For us, this was completely unexpected," he added.
"Mr Snowden is a free man, the sooner he selects his final destination point, the better for us and for himself," he said.
Travel plans unknown
Snowden who leaked revelations of massive US surveillance programmes to the media, had been expected to board a flight for Cuba on Monday, reportedly on his way to seek asylum in Ecuador.
But he never did and Putin hinted that his onward travel plans were still unknown. His US passport has been cancelled but WikiLeaks says he left Hong Kong with a refugee document supplied by Ecuador.
Snowden's extended stay in Moscow has prompted comparisons with the Tom Hanks hit film The Terminal about a man living in an airport, while British gambling website William Hill has opened betting on his final destination.
"Cancelling Snowden's passport and bullying intermediary countries may keep Snowden permanently in Russia," WikiLeaks said in a statement on Twitter.
The US urged Russia to use all means to expel Snowden, who arrived at Moscow's Sheremetyevo airport on a flight from Hong Kong on Sunday despite the US issuing a request for his arrest in China.
"While we do not have an extradition treaty with Russia, there is nonetheless a clear legal basis to expel Mr Snowden," National Security spokesperson Caitlin Hayden said.
Debriefing denied
Hayden said that Snowden could be expelled on the basis of his travel documents and the pending charges against him. However Putin insisted that Russia could not extradite Snowden as it has no extradition agreement with the United States.
Putin said he would prefer not to deal with cases such as those of Snowden and WikiLeaks founder Julian Assange, who is holed up in Ecuador's embassy in London to avoid allegations of sexual assault in Sweden.
"It's the same as shearing a piglet: There's a lot of squealing and not much wool," he said.
But Putin dismissed speculation that Snowden a potential intelligence goldmine was being purposely held up at the airport to be interrogated by Russian spies.
WikiLeaks also denied he was being debriefed by the Russian security services and confirmed that British activist Sarah Harrison from its legal team "is escorting him at all times".
Snowden had been expected to travel on with the state carrier Aeroflot on Monday to Havana, but never appeared on the flight. He has not been spotted in the airport, located north-west of Moscow, and is speculated to be inside a capsule hotel in the transit zone.
There is no scheduled flight from Sheremetyevo to Havana on Wednesday. The RIA Novosti quoted unidentified sources as saying that Snowden had also booked on Tuesday's flight to Havana but the reservation had been cancelled a few hours before take-off.
'Ill-considered pressure'
The Interfax news agency cited an unnamed source in Snowden's entourage claiming he is in limbo because his passport was cancelled by the US.
"Snowden's American passport is annulled, he has no other ID with him. Therefore he is obliged to stay in the Sheremetyevo transit zone, since he can neither enter Russia nor buy a ticket," the source said.
Snowden abandoned his high-paying intelligence contractor job in Hawaii and went to Hong Kong on 20 May to begin issuing a series of leaks on the NSA gathering of phone call logs and internet data, triggering concern from governments around the world.
Hong Kong, a special administrative region under Chinese rule that has maintained its own British-derived legal system, said the US government request to arrest him did not fully comply with its legal requirements.
But White House spokesperson Jay Carney lashed out at Beijing, saying its failure to "honour extradition obligations" had dealt a "serious setback" to efforts to build trust with new President Xi Jinping.
The United States is applying "ill-considered pressure" that will only serve to "bring Moscow and Beijing closer together", Alexei Pushkov, head of the Russian lower house of parliament's foreign affairs committee, wrote on Twitter on Wednesday.
The dispute risks sharpening tensions between Washington and Moscow as well as Beijing when they are struggling to overcome differences to end the conflict in Syria.
Hardliner picked as head of Netanyahu party
An Israeli deputy minister and leader of the
radical right in Prime Minister Benjamin Netanyahu's Likud has been elected as
the head of the party's presidency, reports said on Wednesday.
The election of 42-year-old Danny Danon as Likud president during an initial party vote on Tuesday night enabled him to score political points against the premier, Israeli media said.
The role is largely symbolic, but belies the growing influence of the hardline settler lobby within the rightwing party.
Although Netanyahu will remain as head of the party, members will on Sunday choose who will preside over three key institutions the central committee, the Likud bureau, and the secretariat - in a vote likely to highlight exactly how much of a threat the premier faces from party rebels.
Danon, who serves as deputy defence minister, is widely expected to be voted in as chairperson of the central committee, which decides on all the key policy issues.
Leadership of the Likud bureau, which sets the party's ideology, is expected to go to deputy foreign minister Zeev Elkin, another party rebel.
Wider revolt
And one of the frontrunners for the chairpersonship of the Likud secretariat is Miri Regev, another rebel from the party's far right.
Danon sparked uproar this month when he came out against a Palestinian state a position firmly at odds with Netanyahu's public stance on the issue.
"If Secretary Kerry, whose efforts we support, were to pitch a tent halfway between here and Ramallah - that's 15 minutes away driving time - I'm in it, I'm in the tent," Netanyahu told the Washington Post last week in reference to US Secretary of State John Kerry.
"And I'm committed to stay in the tent and negotiate for as long as it takes to work out a solution of peace and security between us and the Palestinians."
But Danon said the government was not serious about it and that moves to create one would be opposed by most of the coalition.
Netanyahu appears to be facing a wider revolt on the two-state solution, after Israeli ministers began openly expressing their opposition to the creation of an independent Palestinian state.
Possibility of quitting
Analyst Yossi Verter said in Haaretz newspaper that "Netanyahu now finds himself in the worst possible situation for a party chairman: He's not a player. He doesn't count".
Commentators pointed out the prime minister had not even presented his candidacy for president of the party at the Likud conference, as Danon's victory seemed assured.
Faced with this opposition, Netanyahu could even quit Likud, as did former premier Ariel Sharon, who exited the same party to create the centrist Kadima in 2005, wrote Verter.
"It's hard to know what he's thinking: Either he has lost his fighting spirit and is giving up, or in his heart, he knows that in the next election, he won't be running at the head of this party," he added.
The election of 42-year-old Danny Danon as Likud president during an initial party vote on Tuesday night enabled him to score political points against the premier, Israeli media said.
The role is largely symbolic, but belies the growing influence of the hardline settler lobby within the rightwing party.
Although Netanyahu will remain as head of the party, members will on Sunday choose who will preside over three key institutions the central committee, the Likud bureau, and the secretariat - in a vote likely to highlight exactly how much of a threat the premier faces from party rebels.
Danon, who serves as deputy defence minister, is widely expected to be voted in as chairperson of the central committee, which decides on all the key policy issues.
Leadership of the Likud bureau, which sets the party's ideology, is expected to go to deputy foreign minister Zeev Elkin, another party rebel.
Wider revolt
And one of the frontrunners for the chairpersonship of the Likud secretariat is Miri Regev, another rebel from the party's far right.
Danon sparked uproar this month when he came out against a Palestinian state a position firmly at odds with Netanyahu's public stance on the issue.
"If Secretary Kerry, whose efforts we support, were to pitch a tent halfway between here and Ramallah - that's 15 minutes away driving time - I'm in it, I'm in the tent," Netanyahu told the Washington Post last week in reference to US Secretary of State John Kerry.
"And I'm committed to stay in the tent and negotiate for as long as it takes to work out a solution of peace and security between us and the Palestinians."
But Danon said the government was not serious about it and that moves to create one would be opposed by most of the coalition.
Netanyahu appears to be facing a wider revolt on the two-state solution, after Israeli ministers began openly expressing their opposition to the creation of an independent Palestinian state.
Possibility of quitting
Analyst Yossi Verter said in Haaretz newspaper that "Netanyahu now finds himself in the worst possible situation for a party chairman: He's not a player. He doesn't count".
Commentators pointed out the prime minister had not even presented his candidacy for president of the party at the Likud conference, as Danon's victory seemed assured.
Faced with this opposition, Netanyahu could even quit Likud, as did former premier Ariel Sharon, who exited the same party to create the centrist Kadima in 2005, wrote Verter.
"It's hard to know what he's thinking: Either he has lost his fighting spirit and is giving up, or in his heart, he knows that in the next election, he won't be running at the head of this party," he added.
Kerry: Leaders serious on peace talks
Israeli and Palestinian leaders are both committed to reviving peace talks, US Secretary of State John Kerry said on Wednesday, but he acknowledged that progress on the long-stalled negotiations would be difficult.
Israeli-Palestinian talks broke down in late 2010 in a dispute over construction of Jewish settlements on occupied West Bank land that Palestinians want as part of their future state.
Kerry, who held separate talks with both sides in May, said Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas wanted the peace process to move forward. This would be Kerry's fifth attempt to restart talks.
"I believe they believe the peace process is bigger than any one day or one moment, or certainly more important to their countries than some of their current political challenges," he told a news conference in Kuwait with Foreign Minister Sheikh Sabah Khaled al-Sabah.
"That is why both of them have indicated a seriousness of purpose. I would not be here now if I didn't have the belief this is possible," he said.
Kerry said he did not want to set any deadlines for the peace process but added that there needed to be progress before the UN General Assembly in September.
