NEWS,28.04.2013

AA in US colleges may be restricted

Thirty-five years after the US Supreme Court set the terms for boosting college admissions of African Americans and other minorities, the court may be about to issue a ruling that could restrict universities' use of race in deciding who is awarded places.
The case before the justices was brought by Abigail Fisher, a white suburban Houston student who asserted she was wrongly rejected by the University of Texas at Austin while minority students with similar grades and test scores were admitted.
The ruling is the only one the court has yet to issue following oral arguments in cases heard in October and November, the opening months of the court's annual term which lasts until the early summer. A decision might come as early as Monday, before the start of a two-week recess.
As hard as it is to predict when a ruling will be announced, it is more difficult to say how it might change the law. Still, even a small move in the Texas case could mark the beginning of a new chapter limiting college administrators' discretion in using race in deciding on admissions.
For decades, dating back at least to the John F Kennedy administration of the 1960s, US leaders have struggled with what "affirmative action" should be taken to help blacks and other minorities. In the early years, it was seen as a way to remedy racial prejudice and discrimination; in the more modern era, as a way to bring diversity to campuses and workplaces.
Since 1978, the Supreme Court has been at the centre of disputes over when universities may consider applicants' race. In that year's ground breaking Bakke decision from a University of California medical school, the justices forbade quotas but said schools could weigh race with other factors.
In another seminal university case, the court in 2003 reaffirmed the use of race in admissions to create diversity in colleges. But with the current bench more conservative than the one in 2003, there is a strong chance a majority of the justices will undercut that decade-old ruling on a University of Michigan case.
Writing for the majority in that case, Grutter v. Bollinger, Justice Sandra Day O'Connor declared that "the path to leadership" should be "visibly open to talented and qualified individuals of every race and ethnicity." That meant public universities must be able to take special steps to enrol minorities, O'Connor wrote.
O'Connor retired in January 2006 and her successor as the regular swing vote on racial dilemmas has been Justice Anthony Kennedy, who dissented in the 2003 case and may well author the ruling to come in the latest case. The student in the case, Abigail Fisher, graduated from Louisiana State University last year.
Racial diversity
Notably, during oral argument in the University of Texas case on 10 October, Kennedy referred to the "hurt" and "injury" caused by screening applicants by race. However, Kennedy's comments during arguments suggested that he was not ready to vote to forbid all racial criteria in admissions.
In his dissenting opinion in the 2003 Michigan case, he wrote that the court has long accepted universities' stance that racial diversity enhances the educational experience for all students, while insisting such policies be narrowly drawn.
Kennedy's view of when exactly race can be considered and of the discretion of college administrators in the matter are likely to be crucial.
Marvin Krislov, now president of Oberlin College in Ohio and a past vice-president and general counsel of the University of Michigan, said on Friday that university administrators were concerned about how broadly it might sweep and whether it will ultimately reduce the number of minority students on campus.
"Colleges and universities care deeply about student body diversity," he said, adding of his colleagues in higher education: "We're all watching and waiting."
Once oral arguments are held, the court's deliberations on a case are shrouded in secrecy. The timing of a particular decision is not known in advance. And racial dilemmas have never been easy for the court, a point underscored by the current delay.
When the justices ruled in the 1978 case Regents of the University of California v. Bakke, they issued six separate opinions. None drew a majority. Four justices would have upheld a program that set aside a certain number of slots for minority applicants; four justices would have struck it down.
Justice Lewis Powell provided the essential fifth vote, allowing universities to consider race and ethnic origin but forbidding quotas or a reserved number of places. Powell planted the seed of the diversity justification that blossomed in O'Connor's opinion in 2003.
The Michigan case divided the bench 5-4, with O'Connor joining with the more liberal members of the bench to allow race as a consideration in admissions. In a 2007 dispute testing the use of race in student placements to ensure diversity in school districts, the court tipped the opposite way. Conservatives, including O'Connor's successor Samuel Alito, curtailed such public school integration plans.
Only eight of the nine justices will be deciding the Texas case. Justice Elena Kagan, a former US solicitor general, has taken herself out of the dispute because of her prior involvement in the case. The government is siding with the University of Texas.
The challenged programme supplements a Texas state policy guaranteeing admission to the university for high school graduates scoring in the top 10% at their individual schools. University of Texas administrators argue that the "Top 10" programme does not make the university sufficiently diverse.
The Texas approach, with the dual programmes, is distinct. The larger issue is how a decision would affect other universities.
"The court seems to have been leaning away from allowing affirmative action for some time," said University of Virginia law professor John Jeffries, a former law clerk and biographer of Justice Lewis Powell. "If they close the door that, potentially, is a very big deal."

Obama pokes fun at himself

President Barack Obama poked fun at himself, his political opponents, the news media and even his wife's hairstyle late on Saturday at the annual White House Correspondents' Dinner.
The dinner, where around 3 000 guests dine in a massive hotel ballroom, is greeted with near hysteria in Washington, normally a strait-laced town where celebrity is calculated in degrees of political power rather than box office pulling power.
In recent years, the dinner has been transformed from a chance for journalists and their bosses to meet with government officials into a full-bore celebrity party, with A-listers imported from Hollywood - a "nerd prom" as some call it.
"These days I look in the mirror and have to admit, I'm not the strapping young Muslim Socialist that I used to be," Obama said in one of his choice jokes, mocking that belief among a radical conservative fringe of Americans.
He then showed a montage of pictures showing him in a haircut with bangs like his wife Michelle wore on inauguration day.
Targets of Obama's humour included billionaire Sheldon Adelson, who spent $100 million backing Mitt Romney and other Republican candidates in the 2012 race; conservative radio provocateur Rush Limbaugh; the three major cable news networks; and several conservative Republican politicos.
The humour was mostly made up of inside jokes for news junkies, though the president ended with a clip in which Hollywood director Steven Spielberg announced a new movie - "Obama," starring Daniel Day-Lewis. The president then appeared acting as if he were Day-Lewis preparing for the role.
Among stars sighted were South Korean rapper Psy, singer Barbra Streisand, Hollywood actors Day-Lewis, Bradley Cooper, Michael J Fox, Kevin Spacey, Nicole Kidman, Ian Mckellen and Michael Douglas, and movie directors Spielberg and George Lucas.
Obama ended on a serious note, making reference to the people of Boston affected by the marathon bombings, those in Texas affected by the deadly fertilizer plant explosion, and victims of flooding in the midwestern United States.
The night's featured comedian was Conan O'Brien, who mocked US politicians and the media but also had choice words for North Korean leader Kim Jong-Un.
"In the past we've had really scary enemies like Saddam Hussein and Hitler," said O'Brien. "Now our nemesis is a pouty teenage boy who dresses like Rosie O'Donnell at the Emmys."
Kim "doesn't understand that we aren't afraid of him. What that guy doesn't get is that we already have an unstable peninsula that will ultimately bring down America. It's called Florida."
The reference was to the constant electoral headaches coming from the southern US state.
For the first time, celebrity cable news network E! covered the Oscars-style red carpet entrance to the party at the Washington Hilton hotel live as the stars rolled up.
Not everyone was impressed with the news media-Washington power elite lovefest.
"#1 legacy of tonite's #nerdprom: Merriam-Webster just added a 4th definition for 'incestuous,'" wrote political pundit Larry Sabato in a Twitter message.
The event "was pathetic," wrote former Republican vice presidential candidate Sarah Palin, also on Twitter. "The rest of America is out there working our asses off while these DC assclowns throw themselves a #nerdprom."
Famed NBC News anchor Tom Brokaw caused a stir last year when he slammed the dinner's growing glitz, and declined his invitation this year.
White House Correspondents Association president Ed Henry of Fox News took steps to try to damp down the Hollywood influence, cutting back on tables for news organisations that rarely cover the White House.
Henry also noted that the dinner raises funds for journalism scholarships.

NEWS,12.11.2012

Brazil Violence: At Least 140 Murdered In Sao Paulo Over Past Two Weeks

 

At least 140 people have been murdered in South America's biggest city over the past two weeks in a rising wave of violence, Sao Paulo's Public Safety Department says.Killings in Sao Paulo began sharply increasing in September, a month in which 144 people were killed, the department's website says. It says a total of 982 homicides took place in the city during the first nine months of the year.The victims included 90 police officers, most of them gunned down while off duty.A Public Safety Department official said Saturday that the killings of police have been ordered by imprisoned leaders of an organized crime group called the First Capital Command in reprisal for a crackdown on the drug trade. The official spoke on condition of anonymity because he was not authorized to speak to the press.The First Capital Command is one of Brazil's most notorious organized crime groups. Based in Sao Paulo state prisons, the group allegedly was behind several waves of attacks on police, government buildings, banks and public buses in 2006. Those assaults and counterattacks by police in the slums killed more than 200 people.With the latest violence, shops and schools in some Sao Paulo districts closed early this past week as rumors of gang-imposed curfews spread. "In view of the wave of violence in the city's south zone, the school's directors decided to send staff and students home early so as to assure their safety," Eliane Valerio de Souza, administrative assistant at a professional training school, told the newspaper Folha de S. Paulo.Sao Paulo state authorities last week said incarcerated leaders of the First Capital Command suspected of using smuggled cellphones to order attacks and coordinate drug sales, murders of rival gang members and the purchase of weapons, would be transferred to a maximum security federal prison outside the state.On Thursday, one of the gang's lower echelon leaders was sent go a federal penitentiary in northern Brazil. Others are expected be transferred by the end of the month.

Greece Racist Attacks Increase Amid Financial Crisis

 

The attack came seemingly out of nowhere. As the 28-year-old Bangladeshi man dug around trash bins one recent afternoon for scrap metal, two women and a man set upon him with a knife. He screamed as he fell. Rushed to the hospital, he was treated for a gash to the back of his thigh.Police are investigating the assault as yet another in a rising wave of extreme-right rage against foreigners as Greece sinks further into economic misery. The details vary, but the cold brutality of each attack is the same: Dark-skinned migrants confronted by thugs, attacked with knives and broken bottles, wooden bats and iron rods.Rights groups warn of an explosion in racist violence over the past year, with a notable surge since national elections in May and June that saw dramatic gains by the far-right Golden Dawn party. The severity of the attacks has increased too, they say. What started as simple fist beatings has now escalated to assaults with metal bars, bats and knives. Another new element: ferocious dogs used to terrorize the victims."Violence is getting wilder and wilder and we still have the same pattern of attacks ... committed by groups of people in quite an organized way," said Kostis Papaioannou, former head of the Greek National Commission for Human Rights.As Greece's financial crisis drags on for a third year, living standards for the average Greek have plummeted. A quarter of the labor force is out of work, with more than 50 percent of young people unemployed. An increasing number of Greeks can't afford basic necessities and healthcare. Robberies and burglaries are never out of the news for long.With Greece a major entry point for hundreds of thousands of illegal migrants seeking a better life in the European Union, foreigners have become a convenient scapegoat.Some victims turn up at clinics run by charities, recounting experiences of near lynching. Others are afraid to give doctors the details of what happened and even more afraid of going to the police. The more seriously hurt end up in hospitals, white bandages around their heads or plaster casts around broken limbs."Every day we see someone who complained of (some form) of racist violence," said Nikitas Kanakis, president of the Greek section of Doctors of the World, which runs a drop-in clinic and pharmacy in central Athens that treats the uninsured.Racist attacks are not officially recorded, so statistics are hard to come by. In an effort to plug that gap and sensitize a population numbed by three years of financial crisis, a group of rights groups and charities banded together to document the violence.They registered 87 cases of racist attacks between January and September, but say the true number runs into the hundreds."Most of the time the victims, they don't want to talk about this, they don't feel safe," Kanakis said. "The fear is present and this is the bigger problem."Frances William, who heads the tiny Tanzanian community of about 250 people, knows the feeling well."People are very, very much afraid," he said, adding that even going next door to buy bread, "I'm not sure I'll be safe to come back home."The community's cultural center was attacked several weeks ago, with amateur video shot from across the street showing a group of muscled men in black T-shirts smashing the entrance. Earlier that day, children standing outside during a birthday party were threatened by a man brandishing a pistol, William said.The recent elections showed a meteoric rise in popularity of the formerly marginalized Golden Dawn, which went from less than half a percent in 2009 elections to nearly 7 percent of the vote and 18 seats in the country's 300-member parliament in June.Campaigning on a promise to "clean up the stench" in Greece, the party whose slogan is "blood, honor, Golden Dawn" has made no secret of its views on migrants: All are in the country illegally and must be deported. Greece's borders must be sealed with landmines and military patrols, and any Greeks employing or renting property to migrants should face punishment.The party vehemently denies it is involved in racist attacks."The only racist attacks that exist in Greece for the last years are the attacks that illegal immigrants are doing against Greeks," said Ilias Panagiotaros, a burly Golden Dawn lawmaker who divides his working time between Parliament and his sports shop, which also sells military and police paraphernalia.His party is carrying out a "very legitimate, political fight . through parliament and through the neighborhoods of Athens and of Greece," he said.The party's tactics handing out food to poor Greeks, pledging to protect those who feel unprotected by the police are working. Recent opinion polls have shown Golden Dawn's support rising to between 9 and 12 percent.In late August, the conservative-led coalition government began addressing the issue of illegal immigration by rounding up migrants. By early November, they had detained more than 48,480 people, arresting 3,672 of them for being in the country illegally.Rights groups also warn that what started as xenophobic attacks is now spreading to include anyone who might disagree with the hard-right view. Greek society must understand that the far-right rise doesn't just concern migrants, said Kanakis."It has to do with all of us," he said. "It's a problem of everyday democracy."

U.S. To Become World's Largest Oil Producer, Exceeding Saudi Arabia, By 2020: International Energy Agency

 

The United States will become the world's largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast on Monday.In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production thanks partly to a boom in shale gas output as well as more efficient use of energy will allow the U.S., which now imports around 20 percent of its energy needs, to become nearly self-sufficient around 2035. That is "a dramatic reversal of the trend seen in most other energy-importing countries," the Paris-based IEA said in its report. "Energy developments in the United States are profound and their effect will be felt well beyond North America and the energy sector."Rebounding U.S. oil and gas production is "steadily changing the role of North America in global energy trade," the IEA said.For example, oil exports out of the Mideast will increasingly go to Asia as the U.S. becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets. Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran's alleged plan to develop nuclear weapons.The IEA added that global trends in the energy markets will be influenced by some countries' retreat from nuclear power, the fast spread of wind and solar technologies and a rise in unconventional gas production.The agency concluded that despite the rising use of low carbon energy sources, huge subsidies will keep fossil fuels "dominant in the global energy mix.""Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path," the IEA said.Global energy needs are forecast to increase by a third by 2035, with 60 percent of the additional demand coming from China, India and the Middle East.

NEWS,18.10.2012

Clashes erupt at Greek anti-austerity protests

Greek police clashed with anti-austerity protesters hurling stones and petrol bombs on the day of a general strike that brought much of the near-bankrupt country to a standstill.In the second major walkout in three weeks, almost 40,000 protesters marched in Athens in a bid to show EU leaders meeting in Brussels that new wage and pension cuts will only worsen their plight after five years of recession.Tensions mounted when a small group of protesters began throwing pieces of marble, bottles and petrol bombs at police barricading part of the square in front of parliament, prompting riot police to fire several rounds of teargas to disperse them.A 65-year old protester died of a heart attack, hospital sources. Another three people were injured. Police detained about 50 protesters suspected of attacking them.Most business and public sector activity ground to a halt at the start of the 24-hour strike called by the country's two biggest labour unions, ADEDY and GSEE."Enough is enough. They've dug our graves, shoved us in and we are waiting for the priest to read the last words," said Konstantinos Balomenos, a 58-year-old worker at a water utility whose wage has been halved to 900 euros and who has two unemployed sons.It was the third time since late September that tens of thousands of Greeks have taken to the streets holding banners and chanting slogans to show their anger at austerity policies imposed by EU and IMF lenders in exchange for aid.Some were carrying Greek, Spanish and Portuguese flags and shouted: "EU, IMF out"."Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite," said Yannis Panagopoulos, head of the GSEE private sector union, one of two major unions that represent about 2 million people, or half of Greece's workforce.Greece is stuck in its worst downturn since World War Two and must make at least 11.5 billion euros of cuts to satisfy the "troika" of the European Commission, European Central Bank and IMF, and secure the next tranche of a 130-billion-euro bailout.Lenders demand austerity European Union leaders will try to bridge their differences over plans for a banking union at a two-day summit which starts on Thursday. No substantial decisions are expected, reviving concerns about complacency in tackling the debt crisis which exploded three years ago in Greece.The austerity policies being pursued in Europe's indebted Mediterranean countries at the behest of Germany and other rich euro zone members will drive the euro apart, protesters warned."This can't go on. We sure need measures but not as tough as the ones (German Chancellor Angela) Merkel is asking for," said Dimitris Mavronassos, a 40-year-old shipyard worker who has not been paid for six months.The strike emptied streets and offices in Athens. Ships stayed in port, Athens public transport was disrupted and hospitals were working with emergency staff, while public offices, ministries, bakeries and other shops were shut.Newspaper kiosk owners, lawyers, taxi drivers and air traffic controllers were among those protesting over the cuts, which include further drastic reductions in welfare and health spending.Opinion polls show rising anger with the terms of the bailout keeping the economy afloat, and Greeks becoming increasingly pessimistic about their country's future."The new, painful package should not be passed," the ADEDY public sector union said in a statement."The new demands will only finish off what's left of our labour, pension and social rights."During Hundreds of youths pelted riot police with fire bombs, bottles and chunks of marble Thursday as yet another Greek anti-austerity demonstration descended into violence, less than a month after more intense clashes broke out during a similar protest.Authorities said around 70,000 protesters took to the street in two separate demonstrations in Athens during the country's second general strike in a month as workers across the country walked off the job to protest new austerity measures the government is negotiating with Greece's international creditors.Thursday's strike was timed to coincide with a European Union summit in Brussels later in the day, at which Greece's economic fate will likely feature large.Riot police responded with volleys of tear gas and stun grenades in the capital's Syntagma Square outside Parliament as protesters scattered during the clashes, which continued on and off for about an hour. Another general strike in late September had also seen limited, but much more intense, clashes between protesters and police.A 65-year-old protester suffered a fatal heart attack during the demonstration but efforts to revive him failed. The organizers of the protest march he participated in said the man had fallen ill before any rioting had broken out.Four demonstrators were injured after being hit by police, volunteer paramedics said. The Health Ministry said two of the protesters were treated in hospital and that their injuries were not serious. Three policemen also required hospital treatment.Hundreds of police had been deployed in the Greek capital ahead of the demonstration. Police said seven people were arrested Thursday, out of more than 100 detained.The strike grounded flights, shut down public services, closed schools, hospitals and shops and hampered public transport in the capital. Taxi drivers joined in for nine hours, while a three-hour work stoppage by air traffic controllers led to flight cancellations. Islands were left cut off as ferries stayed in ports.Athens has seen hundreds of anti-austerity protests over the past three years, since Greece revealed it had been misreporting its public finance figures. The country has been surviving since then with the help of two massive international bailouts worth a total (EURO)240 billion ($315 billion). To secure them, it has committed to drastic spending cuts, tax hikes and reforms, all with the aim of getting the state coffers back under some sort of control.But while significantly reducing the country's annual borrowing, the measures have made the recession worse. By the end of next year, the Greek economy is expected to be around three quarters of the size it was in 2008. And with one in four workers out of a job, Greece has, along with Spain, the highest unemployment rate in the 27-nation European Union."We are sinking in a swamp of recession and it's getting worse," said Dimitris Asimakopoulos, head of the GSEVEE small business and industry association. "180,000 businesses are on the brink and 70,000 of them are expected to close in the next few months."The country's four-month-old coalition government is negotiating a new austerity package with debt inspectors from the EU, International Monetary Fund and European Central Bank. The idea is to save (EURO)11 billion ($14.4 billion) in spending largely on pensions and health care and raise an extra (EURO)2.5 billion ($3.3 billion) through taxes."In 2011, only 20 percent of businesses were profitable," Asimakopoulos said. "So these new tax measures present small businesses with a choice: Dodge taxes or close your shop."After more than a month and a half of arguing, a deal seems close. On Wednesday, representatives from the EU, International Monetary Fund and European Central Bank, said there was agreement on "most of the core measures needed to restore the momentum of reform" and that the rest of the issues should be resolved in coming days.

Why Spain's Economic Doldrums Could Be Good For Startups

 

Spain is having a rough month. Again.Standard & Poor's downgraded its rating on the country by two notches last week, which has brought Spain close to junk status. On Saturday, thousands of people marched through the streets of Madrid, where they protested the Spanish government's latest austerity cuts. And the country's hiring situation remains bleak, with unemployment hovering around 25 percent.But could this kind of sour environment ultimately turn out to be a sweet one for start-ups?"This landscape is perfect for entrepreneurship," says Josemaria de Churtichaga, associate dean for IE School of Architecture in Madrid. "I'm not defending the crisis but in some way the crisis is helping to change or should help to change the attitude within the young people, which I think is the mass that is suffering more -- and, at the same time, is the mass that has been living too well for the last decades, too protected from their parents, too protected by the state."Certain universities in Spain are more aggressively pushing for the creation of homegrown entrepreneurs who could launch and oversee new ventures and the Spaniards who might work there. One tactic, besides teaching courses on entrepreneurship: getting students from business schools as well as engineering or science departments to participate in startup or acceleration labs, and prepping recent grads to pitch their business plans in front of potential investors. But the academic efforts may also mean students both those wanting to launch a business, and others seeking a job at an existing organization need to be taught to become much more competitive as a way to survive in Spain's uncertain economy. "I sometimes wonder whether we should emphasize more some facets of managerial personality, like competition," says Santiago Iniguez de Onzono, dean of IE Business School in Madrid. "Should we make our graduates more fierce, more willing to compete in a really tough way as some others do?"Companies are also playing a nurturing role in the growth of new startups. Everis, a technology consultancy that is headquartered in Madrid, hosts speed dating-like meetings between entrepreneurs and investors, who boast more than 40 million euros in funds to help grow startups during the first stage of operation. The initiative could spur innovation and job creation in the country's tech sector, says David Garcia Hernandez, a director at Eversis.Creative minds have also carved out a space in an old garage near Madrid's CaixaForum Museum for entrepreneurs who want to start or nurture enterprises with a socially driven mission. Known as Hub Madrid, which launched three years ago, it is designed to be a shared working space where member entrepreneurs "are challenging you, provoking you, inspiring you to do what it is you're passionate about and also makes an impact," says Max Oliva, a Hub Madrid co-founder. Around 300 members have been paying between 15 to 300 euros a month to garner access to this shared space. It encourages collaboration through rounded desks, where there is no hierarchical "head" of the table, as well as non-ergonomic seats that regularly "encourage" people to get up and mingle near the kitchen or a library built of old wine cases. A second floor is being completed, where giant holes punched through the walls are supposed to encourage more discussion flow and better opportunities for eavesdropping, which could lead to new collaborations. "It's an ever-changing space to provoke sparks, to provoke accidents, to provoke failures that are positive failures," says Churtichaga, who helped design Hub Madrid.Other companies are working closely with local universities to provide additional training to students who are looking for a leg up in a tough hiring climate. Emzingo, for one, sends MBA candidates from Spain and other countries from around the world to South Africa and Peru, where students work with NGOs to improve and expand operations through mini-consulting projects. The for-profit social enterprise provides students with leadership development training as part of the experience and is a growing network of alumni (more than 75 so far), including some who have landed jobs at companies such as McKinsey, PwC, Bayer and Johnson & Johnson. "We're working now [on] placement after the MBA, so that's an extra benefit that you get for going through the program," says Pablo Esteves, who is based in Madrid and works as Emzingo's director of branding and partnerships.

Exhibition explores love, hate of money

New York - How does money make you feel? Fearful, stressed, happy?

US financial guru Suze Orman has teamed with the producer of the popular Body Worlds exhibits for a new traveling show to look at how we relate to and understand money.Orman, media star and author of best-selling books on personal finance, described the finance-themed exhibit as "an extension of my life's work as a financial educator, and an innovative way to teach people about money".The interactive, multi-media exhibit, "Economia: Money Matters," will begin a five-year, nationwide next year, starting in Chicago. The admission-charging show will move on to other venues that include science and natural history museums.Gail Vida Hamburg, who designed and developed the exhibition, said she hit on the idea several years ago."I found a study about worry, stress and depression and their links to money or rather the lack of money ... I realized that I could synthesize all of this information into a designed exhibition with multimedia and interactives (displays)," said Hamburg, who designed the Body Worlds traveling exhibition of preserved human corpses that has toured Europe, North America and Asia.The Money Matters exhibit spans 7 000 square feet with galleries on phases of life ranging from College Road to Third Phase, or retirement. It aims to meet national and state financial literacy goals for children and adults.Hamburg, who founded museum exhibit firm Rainworks Omnimedia in 2010, believes the show's appeal is universal because money is something that everyone has a relationship with throughout life.Orman has described the show as a walk through the life of money, and the effect it can have on you."It will be entertaining," she said in a statement, "and when you're having fun learning, the lessons stay with you."Hamburg said she addressed finance's fear factor by engaging people with various exhibits and displays."How do you make it easy for visitors to understand the power of compounding?" she asked, adding that it has traditionally been taught with graphs or charts or calculators.She decided to approach it differently using visitor prompts, and entry into a computer terminal and to show the results through the growth of actual physical objects."We should all be so smart with money and channel our inner Suze Orman. But we're not and we don't. Unless you're an MBA or an economist or a freak, you don't want to read about SEP-IRA or social security or student loan interest rates."The goal of the exhibition "is to give visitors the tools and resources for financial self actualization," she added.

NEWS,09.07.2012

Germans prefer old school media

 

Americans love to publicly debate it, British people hardly ever pay for it online and Germans prefer to get theirs through more traditional means, according to a survey about media consumption released on Monday.The survey looked at the consumption habits in Britain, the United States, Germany, Denmark and France, and found that TV and online platforms are now the overwhelming choice for news.Although computers remain the most popular medium on which to view news, with at least 74% doing so in the last week across the board, at least 20% had used a mobile for the same purpose in the same period. Around 8.5% used a tablet computer, while e-readers and other devices remained niche products.The report pointed to a more flexible and personalised consumption model which no longer relied on home or office internet access.The increasing range of mobile devices was adding to the news experience, it said, rather than replacing other forms of access.London-based journalist Nic Newman, who wrote the study, said: "Of those surveyed, nearly eight out of 10 people accessed online news every week, but the transition from print to digital is much slower in other European countries." Germans showed the greatest allegiance to traditional forms of media for news, with only six out of 10 using online sources over the last week, compared to an average of eight of 10 everywhere else.Nearly seven out of 10 pick up a newspaper or tune in to the radio.In Britain, only four percent had ever paid for digital news, compared to 12% in Denmark, and between six and eight percent elsewhere. However tablet users, who accounted for 13% of the sample, were just as likely to shell out for news applications such as the Guardian's or the Daily Telegraph's as they were to use free ones.While traditional media brands dominated people's usage across Europe, over half of all Americans polled also cited newer sources such as Huffington Post and Gawker. Nearly seven out of 10 people in the US used polls, comment boxes and sharing functions to engage with the news, compared to roughly four out of 10 in most other countries.The survey was conducted by YouGov on behalf of the Reuters Institute for the Study of Journalism at the University of Oxford. It involved a representative sample of more than 6 000 people during April.

 

Eurozone to force Spain banks to hike capital

Eurozone finance ministers have said they will oblige Spain's battered banks to further boost the share of rock-solid core capital on their books at a meeting on Monday, the daily El Pais said."All Spanish entities will have to raise their high quality 'core capital' to 9%," the daily said, citing European sources with knowledge of the negotiations.So far, only the biggest Spanish banks have had to keep such a high ratio of core capital as a proportion of total assets.The meeting in Brussels is to discuss details of a eurozone rescue loan of up to €100bn euros ($125bn) to salvage Spain's banks, laden with loans that turned bad after a 2008 property market crash.It comes as investors show deep misgivings about Spain's finances despite the banking rescue.A European Union summit from June 28-29 had been hailed as a brekathrough for promising a eurozone bank union to keep the lenders in line and making it easier for the bloc's new bailout fund to help states in trouble.But investors' concerns have returned, in part because of doubts over the details and timetable for implementing the banking rescue and the sweeping EU summit agreements.Spanish 10 year government bond yields surged to 7.026% in morning trade from 6.912% late on Friday, a worrying sign for Madrid for future debt issues.Prime Minister Mariano Rajoy has warned that his country cannot afford to finance its operations at such high interest rates over the long term, raising the spectre of an all-out state bailout.Link Securities said it seemed that the EU summit agreements would be respected.That would allow EU rescue mechanisms to pump rescue loan money directly into Spain's banks without adding to the nation's fast-rising sovereign debt, it said.It also would ensure that the EU rescue mechanism does not take priority over other lenders for repayment in the case of a Spanish default, a prospect that had unnerved potential investors, Link Securities said."Now they have to decide when and how this plan will be implemented, and what will be asked in exchange," it said."One of the non-negotiable conditions imposed by the 'men in black' is the creation of a 'bad bank'," which would pool all the toxic property-related loans, said business daily Expansion.Analysts at Spanish brokerage Renta 4 said they did not expect any protocol to be signed at the Brussels talks on Monday. But ministers may agree on a draft deal to be signed at their next meeting July 20, they said.

 

Spanish Borrowing Costs Rise To Dangerously High Levels

 

Spain's borrowing costs rose to dangerously high levels Monday as finance ministers of the 17 countries that use the euro began to gather in Brussels to discuss terms of a rescue package for the country's stricken banks.The interest rate, or yield, on the country's 10-year bonds hit 7 percent Monday morning, a level that market-watchers consider is unaffordable for a country to raise money on the bond markets in the long term and the point at which Greece, Ireland and Portugal all sought an international bailout. Stocks on Madrid's benchmark index fell 1.7 percent. The yield later fell back down to 6.99 percent.The yield indicates the interest rate a government would have to pay to raise money from financial markets when it holds bond auctions. While Spain can afford the high rates for a few weeks at least, it would find them too expensive in the longer term.Spanish officials had originally indicated that it would decide on Monday how much the country's troubled banks would get from a €100 billion ($124 billion) lifeline from other members of the 17-country eurozone. Spain's bank industry has been struggling since 2008 under the weight of toxic loans and assets following a collapse in the country's property market.But an official with Spain' economy ministry said last week that the meeting of eurozone finance ministers was not expected to generate a figure for how much Spain would tap. Ministers planned to discuss terms of the loan and may or may not finalize some of them at the evening session, said the official, who spoke on condition of anonymity in keeping with policy.Outside auditors are expected to complete rigorous assessments of Spanish banks by July 31. Separate stress tests will also be conducted on individual lenders banks to determine how much each bank needs to strengthen its balance sheets against further economic shocks if they can't raise capital on their own, the official said. These results are due to be published in mid-September.The Spanish official's comments reflect those made by a European official in Brussels last week, who said that no numbers for the overall loan amount would be coming out until bank-by-bank stress tests had been completed. The official added that one of the aims of Monday's meeting would be to get a "political understanding" of the memorandum of understanding for Spain's loan so ministers could start paving the way in their countries to get the bailout approved. Spain's loan needs the green light from all 17 countries using the euro.Investors fear a full-blown bailout of Spanish public finances would be too large for the eurozone to handle. The country's economy is the fourth largest among the 17 nations that use the common euro currency  behind Germany, France and Italy - and it is also larger than those of Greece, Ireland and Portugal combined.The interest rate on Spanish 10-year bonds hit a eurozone high of 7.18 percent in intraday trading on June 18 before closing at 7.12 percent that day, according to financial data provider FactSet.

 

Russia's highest court backs WTO entry

 

Russia's highest court ruled on Monday that a hard-won deal to join the World Trade Organisation (WTO), that will oblige Moscow to cut import tariffs and open up key sectors in its economy to foreign investment, was in line with the constitution.The ruling, issued by the Constitutional Court in a unanimous decision from its headquarters in St Petersburg, clears the way for a final parliamentary vote to ratify entry into the 155-member global trade rules club.The vote will take place on Tuesday with a majority of lawmakers expected to rubber-stamp accession. The original deal was clinched last December after 18 years of often-difficult talks. Russia, whose $1.9 trillion economy is the largest outside the WTO, would become a full member 30 days after ratification.The court's ruling quashed a case brought by lawmakers from the opposition Communist and Just Russia parties who had unsuccessfully argued that the ratification procedure and parts of the accession deal were unconstitutional.Recently elected for a third presidential term, President Vladimir Putin had long appeared ambivalent over WTO entry but warmed to the process after Russia's economy was hit hard by the global recession of 2008-2009.According to a World Bank study, the growth uplift that Russia could expect from joining the WTO could be 3.3% over the medium term and as much as 11% in the long run.Under the deal, Russia would gradually cut averageimport tariffs to 7.8% from 10% and open up investment in sectors such as telecommunications, while shielding its banking sector from overall foreign control.Russia managed to protect hefty subsidies to promote its domestic auto industry and negotiated a long transitional period for reducing state aid to farmers.

NEWS,08.07.2012

Mr. Hollande, Which Mitterand Will You Be?

On December 1, 1983 I was invited to attend Baron Guy de Rothschild's lecture at Columbia Business School reprising why he left France in 1981 and decided to set up a new Rothschild Bank in New York. Impeccably elegant, surrounded by his wife and an entourage, he reiterated his famous statement: "A Jew under Petain, a pariah under Mitterrand" coined when France's then Socialist president had dared to nationalize the venerable Banque Rothschild.Barely a year later in 1984 Francois Mitterrand totally reversed course and began to institute his unique brand of socialist capitalism or capitalist socialisme.During the presidential campaign Francois Hollande consistently evoked the name and legacy of Francois Mitterrand who governed France from 1981 till 1995. Following the Socialist victory (although less than a two thirds majority) in the National Assembly on June 17, he had a very auspicious start on foreign policy, taking a stand in alliance with Italy and beleaguered Spain, against German Chancellor Angela Merkel's draconian calls for continued austerity. Hollande garnered credit for helping to push forward the agenda toward a potential banking union and greater shared responsibility among Euro members.But now reality sets in and Francois Hollande's domestic agenda, modeled on Mitterrand 1981 is under serious scrutiny.Similar to Mitterrand, true to his base, Hollande promised increases in public sector jobs, expenditures, and benefits, lowering the age of retirement and sharp tax increases on corporations, banks and high end incomes (up to 75% marginal rates on income above 1 million euros a year). The policies also include fostering SMEs, increase in R&D and lower tax rates for smaller enterprises.Before presenting his budget, Hollande wisely ordered a report on the state of French finances by the independent Cour des Comptes, but the results present a serious challenge to his agenda. The report makes clear that France already ranks among the highest tax rates, but more importantly, at 56 percent of GDP, one of the highest public spending rates. It calls for curbs on public expenditures, tax reforms rather than increases and stringent discipline to cut the budget deficit.Yet in the last week Hollande has ramped up his rhetoric persisting that the rich, corporations, banks should foot the bill for deficit reduction.As history proved this may be a slippery road to take.Francois Mitterrand came to power on May 10, 1981 as the first president from the Socialist party since Prime Minister Leon Blum's ill fated tenure in 1936. Tired of a decade of post-Gaullist weak and corruption laden administrations, in the throes of a recession with 13% inflation, the French electorate was ready for radical change and welcomed Mitterrand with a deluge of red roses. In his first year Mitterrand increased the public sector, implemented a fifth week of paid vacation, put the retirement age at 60, imposed tax increases on banks and industry, nationalized 39 large and medium size banks including Paribas and Banque Rothschild (the largest French banks, Society Generale and Credit Lyonnais had been nationalized since 1946) and fully took over all major industrial firms including Thomson and even France's oldest company Saint Gobain.By 1983 the results already proved disastrous as France lost its competitive edge in banking, commerce, media, growth stagnated, foreign investment slumped, and the franc weakened compounded by brain drain and capital flight.Mitterrand responded forcefully and brilliantly by making a complete U-turn!Within one year nationalization morphed into "denationlization" i.e. reprivitaization (although the state held the majority shareholding, but there was a resurgence of private investment and confidence in the strong franc policy). Following a visit in fall 1984 to the Reagan White House, Mitterrand gave an interview to the French business publication Expansion: "the American people are a formidable repository of energy and initiative. Their ability to couple industry and universities is a masterpiece of intelligence and practical sense... The lesson I took back is that we must now organize our continent. I admire the virtues of this nation, I want to know them and become closer to them." Strong praise indeed from a Socialist leader in the 1980s!True to his word, in the next decade Mitterrand would oscillate from center left to to center right, from capitalist socialism to socialist capitalism, (including two center-right imposed co-habitation governments led by Jacques Chirac in 1987 and Edouard Balladur in 1993).He won re-election in 1988, justifying these reversals in the name of French prestige and French "Colbertian" tradition which promoted industrial and banking expansion abroad, massive surges in export driven trade, the strong franc ("franc fort") pushing as he stated "socialisme at the limits of liberalism." He established a solid relationship with Reagan, Bush I and Thatcher in the full glory years of "cowboy capitalism." He also created a unique partnership with Chancellor Helmut Kohl, balancing the German dream of a united Europe and the Gaullist legacy of French sovereignty.After total regulation, he espoused greater deregulation after 1987, allowing French style privatization: state influenced industrial policy in the name of competitiveness and economic nationalism.In 1993 as France announced a second wave of privatizations including BNP Renault and Air France, John Fund in the Wall Street Journal wrote "A French Lesson for Clinton" attacking Clinton's initial tax increases and calling on the new president to emulate Mitterrand's pragmatic recognition of "the world wide tide toward lower tax rates and economic freedom."In 2012 these views may all seem discredited and reduced to historical irony, but although Hollande's challenges are different, the larger issues are still very relevant.Implementing a popular but unrealistic set of social measures in a recessionary environment with high unemployment, risking capital flight and lack of investor confidence, moving toward a more contentious relationship with Germany in the middle of the EU debt crisis may appear as short term solutions, but they carry long term risks.To his credit Hollande has chosen seasoned politicians from the left and center of the Socialist Party out of the old Mitterrand team; Lauent Fabius, Mitterrand's PM in 1983, Michel Sapin and Pierre Moscovici who served in more hard left positions under Beregovoy and Jospin in the 1990s.He has shown a more pragmatic stance in EU negotiations, yet never having been in a ministerial position, can he master Mitterrand's skills to parry and counter-parry the demands of his base, an EU in crisis and a skeptical and nervous French electorate?Mitterrand in the mid 1980s proved his elasticity as a politician. Was he a hypocrite, a false Socialist or did he understand the deeper currents of history as he decried capitalism but never underestimated its power; as he defended France's role in all international negotiations from the unification of Germany, Maastricht and Gatt, yet never lost sight that France and Germany had to work together toward a European resolution.Can Hollande emulate this model? Therefore President Hollande, when you evoke Mitterrand, which Mitterrand?

 

Putin orders probe into Russia flood deaths

 

Russia's president ordered investigators on Sunday to determine whether more could have been done to prevent the deaths of at least 150 people in severe flooding in the Black Sea region that turned streets into rivers, swept away bridges and inundated thousands of homes as many residents were sleeping.Vladimir Putin, who was criticized in past years for a delayed or seemingly indifferent response to disasters, flew to the region in southern Russia committed to showing he was taking charge of the situation.He ordered the head of Russia's investigative agency to establish whether enough had been done to warn people about the floods. Federal prosecutors also said they were investigating whether the population had been properly protected from "natural and technological catastrophes."Russia has seen a series of natural and man-made disasters in recent years, many of them blamed on aging infrastructure or lax safety rules.Torrential rains dropped up to a foot of water in less than 24 hours, which the state meteorological service said was five times the monthly average. The water rushed into the hard-hit town of Krymsk early Saturday with such speed and volume that residents said they suspected that water had been released from a reservoir in the mountains above. Local officials denied this, saying it was not technically possible to open the sluices.Federal investigators, however, acknowledged Sunday that water had been released from the reservoir, but they insisted it did not cause the flooding and the dam had not been breached.Krymsk received a total of about 221 millimeters (almost nine inches) of rain overnight, but 50 millimeters (two inches) of that came in less than an hour late Friday, the meteorological service said.The heaviest rain fell in Gelendzhik, a popular seaside vacation spot about 200 kilometers (120 miles) up the coast from Sochi, where preparations are under way for the 2014 Winter Olympics. Novorossiisk, a major Black Sea port, also was affected.The Interior Ministry said Sunday that 150 bodies had been recovered, 139 of them in Krymsk and nine in Gelendzhik, including five who were electrocuted after a transformer fell into the water. The majority of the dead were elderly who were unable to escape the sudden deluge.Residents of Krymsk described a wave of water that washed over the hoods of cars and inundated one-story homes. Some sought refuge on roofs and in trees.Viktor Nikolyuchiny said he and his wife were roused by their daughter, who lives a block away."I came out and the water was already up to my waist," he was quoted by the RIA Novosti news agency as saying Sunday. "My wife has difficulty walking, and if not for our neighbor she would have drowned." He said they waited out the storm at the neighbor's home, which unlike theirs has a second story.Putin arrived Saturday evening and viewed the damage from the air. Television footage of Krymsk shot from Putin's helicopter showed the city of 57,000 people partially submerged in muddy water. The city stadium looked more like a lake.Across the Krasnodar region, more than 5,000 homes were flooded.The Krasnodar region governor said during a meeting with Krymsk residents on Sunday that the first warnings of possible flooding came at 10 p.m. Friday, and the heaviest rainfall was from 1 a.m. to 4 a.m. Saturday."Do you think we could have warned each of you and that you would have gotten up and left your homes?" Gov. Alexander Tkachev asked, according to RIA Novosti.The city set off a siren at around 4:30 a.m., but the residents said they didn't hear it, the news agency reported.As an indication of the lingering concern over the condition of the water reservoir, Putin sent Emergencies Minister Vladimir Puchkov to inspect the dam. Puchkov reported Sunday that he had flown over the dam in a helicopter and saw no evidence of any damage.

 

Heat wave kills 30 in US

 

Americans dipped into the water, went to the movies and rode the subway just to be in air conditioning on Saturday for relief from unrelenting heat that has killed at least 30 people across half the country.The heat sent temperatures soaring over 38°C in several cities, including a record 40.5°C in Washington, St Louis 41°C, and Indianapolis 40°C, buckled highways and derailed a Washington-area train even as another round of summer storms threatened.The heat sent temperatures soaring in more than 20 states.At least 30 deaths were blamed on the heat, including nine in Maryland and 10 in Chicago, mostly among the elderly. Three elderly people found dead in their houses in Ohio had heart disease, but died of high temperatures in homes lacking power because of recent outages, officials said. Heat was also cited as a factor in three deaths in Wisconsin, two in Tennessee and three in Pennsylvania. Officials said the heat caused highways to buckle in Illinois and Wisconsin. In Maryland, investigators said heat likely caused rails to kink and led a green line train to partially derail in Prince George's County, Maryland, on Friday afternoon. No one was injured, and 55 passengers were safely evacuated.Thousands of mid-Atlantic residents remained without power more than a week after deadly summer storms and extreme heat struck the area, including 120 000 in West Virginia and about 8 000 in the suburbs around Baltimore and Washington, DC In the Washington area, the utility company Pepco asked customers to conserve power, saying the heat was stressing the system. "This is becoming a black swan of heat waves, in the sense that it's such a long heat wave, such a severe heat wave and encompassing such a large area," said Chris Vaccaro, spokesman for the National Oceanic and Atmospheric Administration. 

NEWS,21.06.2012

Auditors: Spanish banks need up to $78BN

Spain's troubled banks could need as much as (EURO)62 billion ($78.76 billion) in new capital to protect themselves from economic shocks, according to independent auditors hired by the government to assess the country's struggling financial sector.The Spanish government will use the auditors' report as the basis for their application for a bailout loan from the 17 countries that use the euro.Announcing the reports' findings Thursday, Deputy Bank of Spain Governor Fernando Restoy noted that this worst-case scenario was far below the (EURO)100 billion ($127.04 billion) loan offered by eurozone finance ministers two weeks ago.Spain's banking sector is struggling under toxic loans and assets from the collapse of the country's property market in 2008. Concerns that Spain's economy is so weak that it could not afford the cost of propping up its banks has sent its borrowing costs soaring to levels not seen since it joined the European single currency in 1999. The worry is that Spain could soon find itself unable to finance its debts by itself and join Greece, Ireland and Portugal in seeking a rescue loan for not just the banks but the whole country.The stakes are huge: Spain is the eurozone's fourth-largest economy and would seriously hit the bloc's finances should it need bailing out. The country is struggling through a recession with a 24.4 percent jobless rate. On top of this, government's main customers at its debt auctions are Spanish banks  the sector now being bailed out. In a sign of how reluctant the markets are to invest in Spain, the country had to pay sharply higher interest rates to raise (EURO)2.2 billion ($2.8 billion) in a bond auction Thursday.The audits of Spain's lenders, carried out by consultancies Roland Berger and Oliver Wyman, covered 14 banking groups that account for 90 percent of the sector in Spain. The country will use the reports' findings to decide how big a bailout loan to ask for.Restoy and Deputy Economy Minister Fernando Jimenez Latorre declined to outline individual banks' needs.In the auditors' stress test for the worst-case economic scenario  a fall in gross domestic product of 6.5 percent over the period 2012-2014  most of the banks were deemed to be in a "comfortable" position, Restoy said."We're not talking about the imperative capital necessities of the banks. We're not talking about someone urgently needing such and such an amount of capital to deal with their obligations," said Restoy. "We're talking about the capital that would be needed if we were to see a situation of extreme tension which is very unlikely to come about.""We should keep in mind we are not talking about how much capital an entity needs to survive. We're talking about how much capital an entity will need to confront a situation of extreme stress," he added.Economy Minister Luis de Guindos, in Luxembourg with eurozone colleagues to discuss Spain's aid request, said a formal petition would be made within few days. Eurozone finance ministers offered Spain a bailout loan of up to (EURO)100 billion on June 9. The terms of the loan  for which Spain, rather than banks, will ultimately be responsible for  still have to be negotiated.A more thorough series of audits by four other companies is scheduled to be completed by the end of July.Oliver Wyman Inc, gave a worst-case range of (EURO)51 billion-(EURO)62 billion in new capital needs while Roland Berger Strategy Consultants GmbH gave a single figure of (EURO)51 billion.The release of the audits Thursday will probably not eliminate market nervousness about Spain because more thorough audits of the nation's banks are now being conducted and those results are not expected until September, said Mark Miller, an analyst with Capital Economics in London."At face value it looks as if there is a reasonable safety margin given that up to (EURO)100 billion is potentially available," he said. "Having said that, the extent of the economic situation in Spain could even deteriorate beyond what is being described as an adverse scenario."Some investors will likely still be nervous over whether the auditors' reports discovered most if not all of the toxic assets on the balance sheets of Spain's banks, Miller said. And their fears are compounded by concerns that Greece might still end up having to leave the single currency, further destabilizing the eurozone and especially Spain.The results of the audits are good news for Spain because both companies came up with similar numbers and the overall figures were lower than some estimates of the banking sector's recapitalization needs, said Gayle Allard, an economist with Madrid's IE Business School."I think it's a fantastic result because there was talk of needs of (EURO)70 billion to (EURO)80 billion and that the loan could have been for (EURO)100 billion," she said.Investors could still easily find something to scare them about the results, Allard said, "but I don't think there's any reason to do so."She added: "The audits have come in better than anyone has expected, there's still some uncertainty, but if both of them are coming to the conclusion of those numbers we've got to be in the ballpark."

Eurozone Crisis Causing 'Deeper And More Broad-Based' Economic Downturn

The downturn in the euro zone's private sector is becoming entrenched, business surveys showed on Thursday, as falling new orders and employment levels dent confidence.June is the fifth consecutive month activity across the 17-nation bloc has declined, dragging down heavyweights Germany and France and likely increasing calls for the European Central Bank to take action to support the economy.Markit's Eurozone Composite Purchasing Managers' Index, a combination of the services and manufacturing sectors and seen as a guide to growth, held steady at 46.0 this month, the lowest since June 2009 when the bloc was mired in a deep recession.That was better than a slide to 45.5 predicted by economists but the index has been below the 50 mark that divides growth from contraction in all but one of the last 10 months."It is a worryingly steep downturn we are seeing and it is spreading from the periphery, which has been falling at an increased rate, through to Germany. It is becoming deeper and more broad-based," said Chris Williamson, chief economist at Markit.The data pointed towards a second quarter contraction of around 0.6 percent, Markit said.Having held steady at the start of the year, the bloc's economy will contract 0.2 percent in the current quarter and narrowly escape recession by stagnating again in the next, according to economists.While the ECB is not seen cutting interest rates from their record low of 1.0 percent anytime soon, a growing and significant minority are saying the bank will be forced to act as the outlook worsens.The danger of Greece crashing out of the euro zone eased after pro-bailout parties won weekend elections, but risks are mounting that Spain, the euro zone's fourth-largest economy, will need a full-blown international rescue.The two-and-a-half year old crisis has hobbled the global economy, and world leaders meeting in Mexico piled pressure on the euro zone to move towards a fiscal and banking union to fix the crisis that now threatens to engulf Spain.With uncertainty reigning, optimism among survey participants dwindled to its lowest level since March 2009. The business expectations index for services firms slumped to 50.8 from May's 57.4, the biggest one month drop since the aftermath of the Lehman Brothers collapse in late 2008."Companies are getting increasingly rattled by the crisis that is engulfing the region, and there are clear knock-on effects for the real economy," Williamson said.COUNTING THE COSTThe PMI for the dominant service sector nudged up to 46.8 from May's 46.7, beating expectations for 46.4, but chalking up a fifth straight sub-50 reading.It was a similar picture in the manufacturing sector, which drove a large part of the bloc's recovery from the last recession, where activity declined for the 11th straight month.Its 44.8 reading was the lowest since June 2009 and missed the 44.9 forecast. The output index for the sector fell to 44.4 from 44.6, the lowest since May 2009.And things are unlikely to improve anytime soon as composite new business declined for the 11th month, with the index coming in at 45.2, just up from May's 44.6. The survey also showed that firms have been running down old orders for a year.To reduce costs, and giving an indication of their prospects, factories reduced headcount for the fifth month, with the employment sub-index falling to 46.5 from 47.1, its lowest since January 2010."It's a sign that companies are expecting things to get worse and not better," Williamson said.Earlier data from Germany, Europe's largest economy, showed its manufacturing sector contracted at its fastest pace since June 2009 while its service sector barely expanded, posting its lowest reading in seven months.In neighbouring France activity declined in both sectors, albeit it at a more moderate pace than last month.