France to reduce armed forces by a fifth

France to reduce armed forces by a fifth

By Ben Hall in Paris

Published: June 16 2008 19:42 | Last updated: June 16 2008 19:42

France is to reduce its armed forces by almost a fifth and close scores of bases under a defence overhaul that will increase spending on spy satellites, cruise missiles and transport.

Long-awaited defence legislative proposals – to be launched on Tuesday by President Nicolas Sarkozy – will aim to modernise Europe’s second most powerful military, creating slimmer but more deployable forces as part of a 15-year national security strategy that stretches beyond conventional territorial defence to deal with terrorism, missile strikes and natural disasters.

France will reduce its army to 88,000 deployable troops – roughly akin to British land forces – but will increase spending on technology and intelligence. In total some 54,000 jobs across all services are due to go.

The document marks a change of direction in several respects from existing French defence doctrine. It confirms France’s intention fully to rejoin Nato’s integrated military command structure, while maintaining complete control over its nuclear strike capability. “This differentiation no longer has its raison d’être,” said an official who helped draw up the white paper.

In return for rejoining Nato’s military command, France will press ahead with plans to boost the European Union’s role in defence.

Intelligence and anticipation of threats will play a greater role with spending on satellite technology to double to €700m ($1.08bn, £552m) a year. From 2015 France will start to put in place a ballistic missile detection system using infra-red sensors on satellites and long-range radar to be fully operational by 2020. It wants other countries to join in the project.

The white paper also redraws the map of possible French military intervention along an axis of potential trouble-spots running from the north Atlantic to the Indian Ocean, stretching from west Africa to south Asia.

The new policy was drawn up against tight spending restraints. As well as cuts in manpower over seven years, the government will seek to close many of the 470 military installations around the country at the risk of a furious political backlash, including from within Mr Sarkozy’s own party.

The government will use cost savings to increase spending on procurement from €15.5bn a year to an average of €18bn a year from 2009-2020.

Priorities will include developing France’s own cruise missile, a fleet of six submarines to fire them, and armoured personnel carriers for the army,

However, a decision on whether to build a second aircraft carrier at an estimated cost of €2.8bn has been put back until 2011 and some other large procurement programmes could also be delayed or scaled down.

Defence spending, which in 2008 amounts to €30bn or 2.3 per cent of gross domestic product, will be frozen in real terms until 2012, and will then rise by 1 percentage point ahead of inflation until 2014.

The defence overhaul will also trigger a transformation of France’s military links with its former colonies in Africa, with all 30 or so defence accords open to review and many expected to be scrapped. Instead of bilateral ties, which have often obliged Paris to intervene militarily on behalf of dubious regimes, France will favour multilateral solutions and intervention alongside European partners.

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Sarkozy invites Syria to French festivities

By Ben Hall in Paris and Roula Khalaf in London

Published: June 13 2008 03:24 | Last updated: June 13 2008 03:24

Nicolas Sarkozy on Thursday signalled a dramatic warming of relations with Damascus by inviting Bashar al-Assad, the Syrian president, to France’s national day celebrations.

The invitation from the president to the festivities in Paris on July 14 – normally accorded only to leaders of France’s closest allies – follows the election last month of a president in Lebanon.

Syria has been regarded as a pariah by the international community because of its interference in Lebanese internal affairs, including its alleged involvement in the killing of Rafiq Hariri, the former prime minister, and its support for radical groups in the Middle East.

Under Jacques Chirac, the former French president and a friend of Hariri, Paris froze relations with Damascus and was the staunchest western supporter of the anti-Syrian government in Beirut.

The Lebanese political crisis pitted Syria against many of its Arab neighbours, in particular ruining its relationship with Saudi Arabia.

However, some western governments have seen two recent moves by Damascus – the acquiescence to an accord resolving Lebanon’s political stalemate that paved the way for the presidential election and the renewal of contacts with Israel on a peace agreement – as an opportunity to steer Syria in a new direction.

Some Arab and European states have tried to renew their engagement with Syria, hoping that co-operation would also encourage Mr Assad to distance himself from Iran, his main regional ally.

Mr Sarkozy has made a point of rewarding foreign leaders who mend their ways and seek to rejoin the international community, such as Muammar Gaddafi of Libya.

Ehud Olmert, the Israeli prime minister, has also been invited to the Bastille Day celebrations, though a formal meeting with Mr Assad is unlikely.

Both leaders have been invited to a Paris summit on July 13 to launch Mr Sarkozy’s Mediterranean Union, an attempt to reinforce economic and security ties around the Mediterranean basin.

However, Thursday’s shift in French policy drew fire from some of the country’s politicians. Pierre Moscovici, foreign affairs spokesman for the opposition Socialists, said Mr Assad’s invitation was inappropriate given Syria’s behaviour.

“To give this country and to its president any sort of succour and the major recognition that comes from its presence on the Champs Elysées bothers me,” he said.

Washington is also likely to be irritated. A state department spokesman this week questioned whether Syria should be rewarded for trying to block the election of a Lebanese president.

Other states, including Britain, tried to engage with Mr Assad when he took over in 2000, only to discover that promises made by Damascus were rarely kept.

Mr Sar­kozy’s experience has not been encouraging. Soon after his election last year he set about re-establishing contact and sent two senior advisers to Damascus. He spoke to Mr Assad on two occasions but was disappointed by Syria’s limited co-operation and broke off contacts in November.

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Germans eye kindergarten for next engineers

By Richard Milne in Vienna

Published: June 16 2008 22:45 | Last updated: June 16 2008 22:45

Germany’s shortage of engineers has become so acute that some of its leading companies are turning to nursery schools to guarantee future supplies.

Industrial giants such as Siemens and Bosch are among hundreds of companies giving materials and money to kindergartens to try to interest children as young as three in technology and science.

Many European countries from Switzerland to Spain suffer shortages of graduates. But the problem is especially acute in Germany, renowned as a land of engineering. German companies have 95,000 vacancies for engineers and only about 40,000 are trained, according to the engineers’ association.

“It is a new development in that we have seen we need to start very early with children. Starting at school is not good enough – we need to help them to understand as early as possible how things work,” said Maria Schumm-Tschauder, head of Siemens’ Generation21 education programme.

Wolfgang Malchow, board member for human resources at Bosch, said: “We are working with kindergartens. This is our future and we need to seize it.”

Heribert Rohrbeck, chief executive of Bürkert, a leading fluid-control systems company that also works with nursery schools, said: “We want to excite children about technology from the earliest age. What they learn then can stay with them for the rest of their lives.”

Siemens has provided about 3,000 “discovery boxes” filled with science experiments for three to six-year-olds to kindergartens throughout Germany, at a cost to the company of €500 ($775) a box. It also trains teachers on how to use them as well as providing similar boxes around the world to pre-schools from China to Ireland.

Bosch sends its apprentices to kindergartens “to explain what they do at work and then later invite them to look around the company”. Franz Fehrenbach, Bosch’s chief executive, said: “Germany is based on innovation – and that needs people.”

Companies are also using other strategies from trying to get more girls to take up engineering to working closely with technical colleges. But groups are also increasingly looking abroad.

The chairman of one large German industrial group said: “The loser here will be Germany, not the companies. We can always go to Asia to find our engineers. So everything we can do here – even something like going into kindergartens – helps.”

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US delays licences to top Chinese banks

By Jamil Anderlini and Geoff Dyer in Beijing and Krishna Guha in Washington

Published: June 16 2008 22:16 | Last updated: June 16 2008 22:16

The US has held back approval of banking licences for China’s two biggest banks because of concerns over the role of China’s sovereign wealth fund as their largest shareholder, US and Chinese officials say.

Industrial and Commercial Bank of China, China’s largest bank by assets, has been lobbying for over a year to set up branch operations in the US. China Construction Bank, the country’s second-largest by assets, put in its application in February.

Officials from both countries and bankers told the Financial Times the US Federal Reserve delayed granting the licences because the banks’ largest shareholder was controlled by China Investment Corp, the country’s sovereign wealth fund.

Senior Chinese officials see the Fed’s move as a political ploy and part of a US negotiating strategy in the bilateral Strategic Economic Dialogue that begin on Tuesday in Annapolis, Maryland. “The US should give a positive sign on the bank licences during the dialogue,” said a senior Chinese financial official who wished to stay anonymous. “If the Americans want to find hurdles, then the Chinese side can easily do the same.”

US officials reject the claim, saying they have yet to grant the licences because of a lack of agreement as to what it would mean for the China’s sovereign wealth fund, ultimately the banks’ biggest shareholder.

US officials say the Fed’s decisions are independent, have been taken on technical grounds and have nothing to do with the countries’ diplomatic negotiations.

In the past, the Fed has cited weak risk management and concerns over money laundering as among the main reasons for not approving Chinese branch applications. Beijing has since introduced extensive anti-money laundering law.

The question of what obligations should apply to the bank’s controlling shareholders remains a stumbling block. The single biggest shareholder in both ICBC and CCB is Central Huijin Investment Company, a government holding company.

Fed officials made it clear from the start that Huijin would have to comply with the US Bank Holding Company Act, which requires certain disclosures and limits the controlling shareholder’s ability to invest in other US industries.

The US believes that the two sides were close to agreement before China reorganised its holding companies, putting Huijin under the control of CIC, the sovereign wealth fund.

Fed officials are considering whether CIC should itself be treated as a bank holding company and subject to the same obligations as Huijin, as the ultimate controlling shareholder in the banks. The Fed position is that a sovereign wealth fund should be treated no differently from any other controlling shareholder.

Lack of transparency at some sovereign wealth funds, including CIC, has been a complaint from western governments. Senior officials in Beijing said the two sides were discussing if the US could soon formally welcome CIC investment as the UK government has done.

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Surge in employees past retirement age

By Norma Cohen, Economics Correspondent

Published: June 17 2008 03:00 | Last updated: June 17 2008 03:00

People employed past pensionable age are the fastest growing group in the labour market, according to official data. The figures signal a significant change in the way Britons work and perhaps an even more profound change in the way they retire.

By March 2008, 1.3m men and women beyond the ages of, respectively, 65 and 60, were in the workforce, a rise of 8.8 per cent year on year. This was a much sharper rise than that for any other age group. The second most marked rise is occurring among those aged between 50 and retirement age, the point where a decade ago employers offered generous early retirement packages in order to shed their more expensive workers.

The data tell an important story: as lifespans expand and retirement benefits shrink, growing numbers are entering, or refusing to leave the workforce, and bosses are gradually changing their perception of the ideal worker. "Older people are the only growing group in the labour market," said Stephen McNair, head of the National Institute of Adult Continuing Education, a think-tank on adult learning. "The positive message is that most people over the age of 50 would like to stay in the workforce longer than they thought they would be allowed."

The data show among men aged 50 to 64 and women aged 50 to 59, there are 6.6m workers, more than there are at the prime working ages of 25 to 34. The year-on-year rate of increase in the number of these older workers is 2.1 per cent.

In part, the shift reflects an underlying demographic change as fertility rates among Britons have dropped sharply. But it also reflects rising longevity - a man born in 1950 who hits his 65th birthday will, on average, live to a few months shy of his 90th - and better health at older ages.

It demonstrates the fact that for some people, work is not the drudgery of the mill or the mine but rather a place to establish social networks and to participate in wider society.

"It's both sides of the coin," said Zina Ambrose, a spokeswoman for Age Concern. "There are those who can't afford to stop working and there are those who want to keep on working because they feel they have a lot to offer."

John Llewellen, senior economic policy advisor at Lehman Brothers, added that the rising workforce participation among older workers also marked a shift in Britain's economy from a heavy manufacturing base to one highly dependent on service provision.

"You're not asking these guys to swing a pick-axe," Mr Llewellen said. Decades ago, at least half the work force was in hard physical labour, he added.

Ros Altmann, a specialist in pensions economics, said that the shift highlights the fact that many people would like to retire more flexibly, perhaps continuing to work part time. "These are bonus years for many people," she said.

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Kerimov sells out of Polymetal, Russia's major silver miner
John Helmer
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16 June 2008 @ 04:56 am EST

Suleiman Kerimov finally did what he was always expected to do with Polymetal, Russia's principal silver miner -- he has sold out.

The move was confirmed in a Monday morning press release from one of the buyers, the ICT group belonging to former Polymetal owner Alexander Nesis. He has acquired a 24% shareholding. The sale to a consortium, which also includes Moscow investor Alexander Mamut (19%), and the PPF group of Prague (25%), also indicates that, in Kerimov's judgement, Russian gold and silver miner valuations have reached their peak for the foreseeable future.

The ICT announcement says no price or valuation will be disclosed in their transaction. ICT says only that it is buying a 24% stake in Polymetal from Kerimov's aggregate holding of 69%. The ICT press release also quotes Nikolai Dobrinov, a partner of Nesis, as hinting that Kerimov may have been obliged to accept less than he once thought his stake was worth.

In January 2006, Kerimov paid $930 million in cash to ICT for 100% of Polymetal. At the London IPO for Polymetal a year later, the target valuation of the company, arranged with Merrill Lynch, Deutsche Bank, and UBS, was $2.4 billion, or $8.72 per share. It subsequently dropped as low as $4.50 last August. The peak this year was $9.85 in March. First word that Kerimov was selling out came shortly afterwards.

Nesis is paying roughly half of what he earned the first time round to buy back in. Vitaly Nesis, Alexander's brother and chief executive of Polymetal through the Kerimov holding, appears to have overcome the pessimism he has been feeling about the company's prospects under its outgoing proprietor.

Kerimov, an opportunistic investor, has also been reported recently as cashing out his Russian stakes in Gazprom and Sberbank.

According to Dobrinov, "in our opinion the Polymetal company shares are underestimated today, and their price has good prospects of growth."

Moscow newspaper reports claim the deal, executed on June 11, was worth $2.1 billion, which would represent a 15% premium to the market capitalization on the day of completion. Since none of the three new buyers will hold more than 30% in Polymetal, no mandatory offer to minority shareholders will be required.

A bulletin from UralSib Bank in Moscow comments that the deal will not be "a major driver for the stock, despite the potential 15% premium to the current market price... we view the return of Polymetal's former shareholder, IST Group, as slightly positive for the company as the current top management team...will likely remain at the helm of the company."

In Moscow trading immediately after Monday's deal announcement, Polymetal's share price dropped 6% to $8.30. After a brief gain in May, when word of the Kerimov sale negotiations first leaked out, the share price has been falling steadily.

Polymetal is Russia's largest silver producer, with output of almost 16 million ounces in 2007. It is the third largest gold producer in the country with 242,000 oz. Paltry profitability in 2005 and 2006 was reported as a result of loan agreements with ABN Amro and other banks, which obliged the mining company to commit for forward sale its gold and silver production at prices well below the market price.

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Goldman Deal Could Point Way For SIVs
The Financial Times (UK)

Goldman Sachs is close to finalising a plan to restructure a $7bn investment vehicle formerly run by London-based hedge fund Cheyne Capital, in a move that could potentially usher in a crucial new phase in the credit turmoil.

The US bank’s proposed reorganisation of the so-called structured investment vehicle is set to be just the first of a number of deals that could see about $18bn worth of SIV assets restructured in the coming months.

The deal, which could be signed as early as Tuesday, is likely to be closely watched by the financial industry, since Cheyne is one of the largest independent SIVs – and the deal marks the first time that any collapsed SIV has been restructured in this way.

Deloitte & Touche, which was brought in as receiver for the SIV formerly known as Cheyne Finance, was on Monday close to signing off on the plan. The SIV went into receivership last autumn when the value of its credit assets, such as mortgage-linked securities, plunged.

The Cheyne restructuring, which has been brokered after nearly 10 months of negotiations, will require the receivers to organise an auction of the Cheyne assets in the coming weeks, to establish a transparent price for these instruments. This is important because in recent months it has often proved impossible to value these murky assets.

Once this price is established, Goldman will then create a new off-balance sheet vehicle to buy the assets, with the transfer of assets being funded by the US bank for just one day before being sold on to the new vehicle. Under the plan senior creditors in the SIV will be given a range of options including reinvesting in this new vehicle.

In addition to the Cheyne fund, Goldman Sachs has been lined up to restructure two other failed SIVs formerly run by hedge funds, called Golden Key and Mainsail, as well as Whistlejacket and Rhinebridge, which were formally managed respectively by Standard Chartered Bank and IKB bank. The same Cheyne model is expected to be applied in some form to all these.

Consequently, the move will bolster hopes that banks are starting to create solutions to the long-running woes of SIVs, and the plethora of other, shadowy credit entities that have exploded in size this decade, in the so-called “shadow banking world”.

The Cheyne deal comes after a protracted debate within the policy making and banking industry about the most effective manner to deal with the problems that have been gripping the shadow banking world. In recent years, institutions such as SIVs have exploded at a dramatic pace, largely unnoticed by regulators or investors. However, when the money market seized up last summer, these entities found their funding sources cut off.

The US Treasury, together with banks such as Citigroup, attempted to organise an industry-wide bail-out of these funds last autumn, to prevent them embarking on an asset firesale. However, this plan floundered, and the SIV problems have subsequently cast a heavy shadow over the credit markets and the banks in recent months.

There have been numerous attempts to restructure this portfolio of assets since it was placed under the control of receivers last year, and proposals from other investment banks but constantly falling markets made them too difficult to execute.

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For Le Monde and the French press, the news is nearly all bad

By Ben Hall in Paris

Published: June 17 2008 03:00 | Last updated: June 17 2008 03:00

Journalists at Le Monde, France's newspaper of reference, face an unenviable choice this summer: kiss goodbye either to one-quarter of their colleagues or to their cherished independence.

The centre-left daily has been plunged into the worst crisis since it was established in 1944 on the orders of Charles de Gaulle. It is haemorrhaging €2m ($3.1m, £1.6m) a month and has accumulated losses of €167m since 2001.

Le Monde, the newspaper of choice for the French elite, is a journalistic and cultural icon. But its editorial independence, a defining feature in an industry all too often marred by proprietorial interference, is under threat. Le Monde is a rarity because its staff hold a controlling stake and a veto over their editor and chief executive.

But that unusual ownership structure is now in question. A plan to shed 129 jobs, two-thirds of which are editorial staff, triggered three days of strikes in April and May, the first in the paper's history.

If it cannot cut its costs, Le Monde risks falling into administration and having to undergo an emergency recapitalisation. This would give its external shareholders, including Lagardère and Prisa, the French and Spanish media groups, the chance to take control from staff.

Le Monde's problems are partly self-inflicted and partly shared with other newspapers around the world. But they are also emblematic of the particular difficulties afflicting the national newspaper industry in France, which is still rooted in industrial structures shaped in the aftermath of the second world war.

The parlous state of France's national newspapers has become such an urgent political issue that President Nicolas Sarkozy last month announced a summit of press, radio and television chiefs this year to discuss the issue. "Democracy cannot function with a press that is permanently on the edge of an econ-omic abyss," Mr Sarkozy said.

French national newspapers, like their counterparts all over the world, are struggling to cope with flagging circulation, shrinking advertising revenues, rising costs and competition from the internet and freesheets. But the French press starts from a position of relative weakness. The circulation of all national titles totals 8m, compared with 16.5m in the UK and 24m in Germany.

Le Monde is France's biggest-selling national daily. But it sold only 359,000 copies a day in 2007, less than half the circulation of Ouest France, which is the country's best-seller and testament to the relative health of the regional press.

Advertising in national newspapers represents 0.08 per cent of national output, one-quarter of that in Britain, and cover prices are among the most expensive in Europe. As a result, French national newspapers are dependent on state handouts.

Patrick Eveno, a historian of the media at the University of Paris Panthéon-Sorbonne, estimates that the national press receives €1.5bn in subsidised postage and tax breaks. "This weakness of advertising revenues for the French daily press cannot simply be linked with the anaemia of the advertising market," he writes in his book The National Daily Press: End of the Road or New Start? "It is also the result of a national daily press which has neglected its readership [and] failed to anticipate social and cultural trends and which in sum turned to the state and to politicians to resolve its commercial problems."

French national newspapers also face higher production costs because of structures introduced after the war. Only members of the Communist print union known as Le Livre are allowed to work in the five printworks permitted to produce the national newspapers; the union also controls recruitment. Although Le Livre's power has weakened, the industry is still paying the price for this closed shop. Higher salaries, absenteeism and lower productivity have made print costs twice as high as for other French presses.

Meanwhile, distribution is controlled by a statutory cooperative created in 1947, which treats all newspapers equally to ensure plurality. Retail sales are also carefully regulated, with newspapers and magazines available in specified press shops, kiosks, bars, tobacconists and some supermarkets.

Last Thursday, national newspapers failed to appear in the kiosks after distribution workers went on strike in protest at restructuring plans. The stoppage came despite full-page advertisements in several dailies warning that union militancy was "killing" the industry.

Poor incomes and the large number of newspapers and magazines unsold have forced more and more newsagents out of business. The Parisian kiosk is fast becoming an endangered species. France now has half the number of outlets as Britain and one-quarter of those in Germany.

On top of low revenues and high costs, the French national newspaper industry lacks consolidation and is undercapitalised. There are no big French press groups apart from Lagardère, whose media interests are focused primarily on magazines and new media. A fragmented structure leaves isolated titles susceptible to takeover by individuals or groups prone to editorial interference and generating conflicts of interest in reporting.

Les Echos, the financial daily sold by Pearson, owner of the Financial Times, to Bernard Arnault's LVMH, has already lost its editor and a clutch of senior staff, amid alleged editorial interference by the new management. Mr Arnault is entitled to nominate two members to the paper's editorial independence board but outraged staff last month when he appointed his 30-year-old son Antoine to one of the seats.

Le Monde's problems stem to a significant extent from its dogged defence of its autonomy. Jean-Marie Colombani, its former editor, tried to secure Le Monde's future by building a diversified press group around it. "This manoeuvre failed because some purchases were not well thought through strategically," says Michel Kajman, deputy editor. "We became heavier and more indebted."

Lacking resources, the paper sought a partnership with Lagardère to develop its website. The venture has been a commercial success, with lemonde.fr the most visited French news site and profitable too. But the website is owned separately and union representatives complain it is simply creaming revenues from the paper.

Other journalists, however, say it is the recalcitrance of the staff association, with its strong anti-capitalist streak, that has pushed the paper to the brink of disaster. "There are some people who find it very natural to ask investors to pay but find it very difficult to accept that they are entitled to some return, however modest," Mr Kajman says.

Other journalists say the resistance of colleagues to job losses is pushing the paper closer to insolvency and the very loss of control that they are fighting to defend. "If we were taken over by Lagardère, which has big defence interests and whose boss is a friend of Sarkozy, it would be the death of Le Monde," says one of its senior reporters.

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Short-selling rules under fire

By Jennifer Hughes and James Mackintosh

Published: June 16 2008 23:18 | Last updated: June 16 2008 23:18

Short sellers will have to declare their positions only once under the City regulator’s new disclosure regime – regardless of how they change.

Details of the new scheme have emerged as hedge funds and their advisers fired a series of technical questions at the watchdog about how the new rules would operate in practice, which it will answer at length on Tuesday.

The move underlines how the rule changes are designed to help boost struggling bank rights issues.

It also became clear small investors wagering as little as £12,500 through spread bets on small companies involved in rights issues could be forced to publish their names under the rules.

Last week the Financial Services Authority stunned the markets with a rule change that from this Friday will require disclosure from anyone selling short the stock of a company involved in a rights issue if the short position amounts to 0.25 per cent or more of the outstanding stock.

Short sellers aim to profit from share price falls by selling stock they have borrowed in the expectation of being able to buy it back more cheaply. Under the new regime, short sellers will from Friday have to report net short positions that meet the new requirements for outstanding rights issues, and will face that obligation for future capital raisings. But they will only have to do so once, regardless of whether their position changes.

This underlined the tight link between the timing of the new rules and the struggles of HBOS and Bradford & Bingley, the buy-to-let specialist that this month was forced to reprice its rights issue. Last week, HBOS shares dipped below their rights issue price, threatening its capital raising process.

One person briefed on the new rules said: “This shows how this is all about the current round of rights issues.

“I can’t see the value in a regime purporting to be attacking market abuse that doesn’t require ongoing disclosure.”

Under the rules a short seller could disclose a 0.25 per cent holding, but then extend it the next day, or even close it, without filing further notification. Alistair Darling, chancellor, is expected to say on Wednesday the new rules are temporary and he is seeking wider dialogue with the City.

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Booming Asian forex trade has dollar-settlement risk: research
AFP
AFP - 2 hours 1 minute ago

BASEL, Switzerland (AFP) - Foreign exchange trading in Asian currencies has surged but is being held back by anti-speculation controls and carries time-zone risk through dollar settlement, a research paper at the BIS has found.
(Advertisement)

The authors of the report suggest that trading and risk management would be improved if settlement via the dollar gave way to use of an Asian currency.

The dollar played a role in "about 97 percent" of all cross trading involving Asian currencies in April 2007, the research says.

"The overwhelming use of the US dollar as a vehicle currency heightens the vulnerability of Asian currencies to settlement risk," according to the paper.

Each step in a foreign exchange transaction is usually settled in the currency's country of issue, which means that deals involving US dollars can be affected by the considerable time difference between Asian markets and New York.

"One currency might have to be paid before receipt of the other currency can be confirmed," the authors, Yosuke Tsuyuguchi and Philip Woolridge, say.

"This can result in sizeable, temporary counterparty exposures."

The paper concludes that "greater use of a regional currency in intra-regional transactions, in place of the US dollar, is one of several ways in which settlement risk could be reduced."

The authors said Europe was an example of what could occur in Asia, noting that in the 1980s, before the creation of the euro, the Deutschemark gradually displaced the dollar in transactions between members of the European Union.

The findings and comments express the authors' own views and not necessarily those of the BIS, known as the central bankers' central bank, which distributed the paper however.

Trading in Asian currencies has grown substantially in recent years, rising in value to 249 billion dollars a day in 2007, but activity is held back by government controls, the study says.

Turnover in 10 Asian currencies, excluding the yen, jumped 130 percent between 2004 and 2007, with the Hong Kong dollar accounting for 40 percent of daily operations, the research paper says.

Trading in the Chinese currency rose more than sevenfold from two billion dollars in 2004 to 15 billion dollars in 2007.

"Inflows to Asian equity markets made an especially large contribution to foreign exchange turnover in April 2007," coinciding with a surge of Asian stock prices and purchases by non-residents.

But "the combined turnover of Asian currencies is still only a small fraction of global turnover," accounting for about 7.5 percent.

In general, foreign exchange trading globally is 30 times the value of trade in goods and services, but trading Asian currencies is far below this ratio except in the case of the Hong Kong currency which exceeds it.

But the study also concludes that "the liquidity of Asian foreign exchange markets continues to be undermined by foreign exchange controls."

Although such controls, which regulate the buying and selling of the local currency, are aimed at minimising speculation and preventing currency misalignments, they impair momentum and growth on foreign exchange markets, according to the paper.

Among the 10 currencies studied, only the Hong Kong dollar and the Singapore dollar are not subject to controls.

The other currencies examined were the Chinese renminbi, the Indian rupee, the Indonesian rupiah, the Korean won, the Malaysian ringgit, the Philippine peso, the Thai baht and the New Taiwan dollar.

The authors say that in instances where controls are applied, central bank approval might be required for buying and selling currencies that are unrelated to financial account transactions.

The requirements are generally designed to discourage offshore trading in the currency "because it is more difficult to monitor than onshore trading."

It says: "This is typically done by making it difficult to settle onshore transactions through the accounts of an affiliate or correspondent bank located onshore -- in other words by restricting the cross-border deliverability of a currency."

As a result, onshore trading in Asian currencies is about twice as high as that for international currencies.

In addition, controls tend to limit the activities of non-residents in onshore markets.

The paper found that transactions with non-residents make up just 25 percent of onshore Asian currency trading against 50 percent for international onshore operations.

In China, non-residents were not allowed to participate in the on-shore market.

"Asian currencies are predominantly traded onshore between residents, whereas international currencies are mostly traded offshore between non-resident ..."

"It seems likely that non-residents will remain minor players in Asian foreign exchange markets so long as offshore trading is restricted," the study predicts.

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Labour headache for Bulgarian rose oil industry
AFP
By Diana Simeonova AFP - 2 hours 43 minutes ago

TARNICHANE, Bulgaria (AFP) - Bulgaria's rose oil industry, supplier to some of the world's leading perfume makers, has emerged from years of post-communist neglect only to find itself with a new headache -- a labour shortage.
(Advertisement)

It is 5 am, and the sun has not yet risen over Bulgaria's famous rose valley at the foot of the Balkan mountains. But the air is already thick with the scent of the oil-bearing Rosa Damascena and hundreds of rose pickers are already out in the fields.

The workers must pick only flowers that are in full blossom and now is the best time to do so because this is when the rose essence is at its most concentrated.

By the afternoon, reacting to the strong sun, the precious substance retreats down into the plant's roots, reducing the oil yield.

Petals must also be processed within 24 hours so as to yield the maximum quantity and highest quality rose oil.

"Any full-bloom flower left unpicked today will have shed its petals by tomorrow and be spoiled," explains rose distillery owner, Filip Lissicharov.

His company, Enio Bonchev Production, has four distilleries in the village of Tarnichane in central Bulgaria, including the oldest running rose oil extraction facility in the country, built by his great-great grandfather in 1909.

Enio Bonchev Production is one of Bulgaria's top five exporters of rose oil and also the biggest rose water producer. It supplies fragrance makers all around the world, from the United States to Japan, France and Germany.

Alongside Turkey and Morocco, Bulgaria is traditionally one of the world's leading exporters of rose oil.

But after the fall of communism in 1989 and the country's ensuing transition to a market economy, many rose fields were neglected or uprooted and production shrunk drastically.

However, the industry has recovered in recent years and currently exports up to 1,500 kilogrammes (1.6 tonnes) of pure rose oil a year from 3,200 hectares (8,600 acres) of fields, producers estimate.

While Turkey remains the biggest exporter, Bulgaria's rose oil producers regard their product as the highest quality, its price topping 4,800-5,000 euros (7,400-7,700 dollars) per kilogramme.

"The aromatic and chemical characteristics of the Bulgarian rose oil are different from the Turkish," and fragrance experts say the Bulgarian product is more versatile, says Juliana Ognyanova of rose oil exporting company, Bulattars.

Bulattars exports 200-220 kilogrammes of oil a year, making it one of Bulgaria's top rose oil exporters.

But the industry is finding it difficult to recruit workers, Ognyanova complained.

"Rose gardening is 90-percent manual labour. And finding workers is a major problem. In the past, there were times when there were no roses. Now there are plenty of roses, but nobody to pick them," she said.

Bulattars has 75 hectares of rose gardens in the region of Pavel Banya and Skobelevo in the heart of the rose valley and employs a workforce of at least 600 in May and June, the peak season for rose-picking.

"We employ mainly pensioners and Roma. Young people no longer want to work in the fields and many went to seek seasonal jobs in Greece, Cyprus, Britain, Spain where pay is better," Ognyanova said.

Enio Bonchev Production said it wanted to expand but also had trouble finding enough workers.

"Even if we plant another 10,000 hectares, we still have a limited number of pickers. Even if they work 24 hours a day and grow two more hands, they still won't be enough," Lissicharov said.

At the height of the season, an estimated 35,000 rose pickers are needed throughout the whole valley.

Finding skilled distillation experts is also a problem, said Lissicharov.

"My distillation technologists are a bit like the Last of the Mohicans in the sector," he said. "No matter how much I know about distillation, I can't do without a technologist."

New experts were coming out of university, but they needed at least five years' of hands-on experience, Lissiacharov said.

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ArabJet may buy troubled airline Silverjet
Reuters
By Elena Moya Reuters - Monday, June 16 12:49 pm

LONDON (Reuters) - ArabJet, a planned premium class airline based in Dubai, is talking to the administrators of SilverJet , the failed business class carrier, about a possible sale, a source familiar with the talks said on Monday.
(Advertisement)

Luton-based SilverJet, which operated three planes between London, Dubai and New York, collapsed into administration last month due to weak demand and record fuel prices.

ArabJet officials in Dubai were not immediately available for comment.

The company aims to have a market base of about 500,000 customers, mostly in Dubai and Saudi Arabia, according to its Web site. ArabJet Holidays and ArabJet Limousine services will be added afterwards, the Web site says.

Talks to buy SilverJet by Kingplace, an Irish-registered company managed by Swiss trust and management company Heritage, collapsed on Friday, when the company made its 420 employees redundant.

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厚労相、医学部定員減の閣議決定見直しも　医師不足に対応

　舛添要一厚生労働相は17日、閣議後の記者会見で、全国的に医師が不足している問題に対応し「（医学部定員の削減に取り組むことを決めた）閣議決定の方針が撤回されればいい」と述べ、見直す方向で調整していることを明らかにした。そのうえで「医療の役割は重いので、それを重視し政策を実行していく」と発言し、医師数を増やす考えを示した。

　舛添厚労相は従来の政府方針を見直し、医師数の増員に向け政策転換したい考え。閣議後に福田康夫首相と会談し「総理の了解を得た」と説明した。

　政府は1997年6月の閣議決定で、医療費の伸びを抑えるため医学部定員の削減や医師国家試験の合格者数を抑制する方針を決めている。だが最近では医師不足が表面化し、患者が緊急時に医療サービスを受けられないなどの問題が指摘されている。

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医師増員：医学部の定員削減見直し　政府が方針転換

　政府は１７日、医学部の定員削減を定めた９７年の閣議決定を見直すことを決めた。閣議後に舛添要一厚生労働相が提案し、福田康夫首相が了承した。来年度予算編成に向けた「骨太の方針」に反映させる。政府は「２２年度には医師不足は解消する」として、削減方針を変えてこなかったが、医師不足の深刻化を受け、政策を全面転換する。具体的な増員数は未定だが、削減分を戻したうえ、さらなる上積みができないか検討するとみられる。

　舛添厚労相は福田首相との会談後の会見で「偏在ではなく、不足しているとの認識に立って医師を増やす」と述べた。具体的な増員目標は「財源の問題もある」と明示しなかった。

　医療費抑制を念頭に置いた医学部定員の削減は８０年代後半に始まり、０７年度の定員はピーク時（８４年度）より８％少ない７６２５人。日本の人口１０００人当たりの医師数は２．０人（０４年度）で、経済協力開発機構（ＯＥＣＤ）加盟国中で最低レベルだ。

　これに対し、舛添厚労相は自身もメンバーに加わる同省の「安心と希望の医療確保ビジョン会議」で、医学部の定員増を主張。提言に方針を明記し、政府として数値目標を打ち出すのが望ましいとの見解を示していた。

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値上げ食品の売上高減、節約志向で自主企画品を選好　日経調査

　食品値上げが相次ぐなか、パン、牛乳、カップめん、しょうゆなどが値上げ後に売上高を落としていることが分かった。日本経済新聞社が主要15品について、日経ＰＯＳ（販売時点情報管理）データと店舗や食品会社への聞き取りで調べた。ただ節約につながる自主企画（プライベートブランド＝ＰＢ）品には売り上げを伸ばすものがあり、消費者が割安な製品を選ぶ傾向が出ている。

　主要15品目の代表的なメーカー品を中心に値上げ前と5月の店頭価格や売上高（来店客1000人当たり）の変化を調べたところ、10品目で値上げ前より売上高が落ちた。

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松下、新興国の販売店網を拡充

　松下電器産業は新興国市場で家電製品の販売店網を一斉に拡充する。インドでは自社製品だけを扱う系列店を2009年度に現行の10倍の200店に増やし、ロシアではショールームを兼ねた専売店を主要都市に置く。社名を今秋「パナソニック」に変更する松下は、成長市場で独自の販売網を構築、ソニーや韓国サムスン電子などに対抗する。日米の景気減速で国内製造業は新興国シフトを強めており、生産・販売体制の整備が進みそうだ。

　インドを含む海外の販売店網は「ブランドショップ」などの名称で展開する。現在、系列店は日本に1万8000店、海外では東南アジアの一部にあるが、新興国での本格的な整備は初めて。販売後の修理などきめ細かいサービス手法を持ち込み、富裕層などへパナソニックブランドの浸透を急ぐ。

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旭硝子、北米で自動車用ガラスを減産

　旭硝子は北米の新車需要低迷に対応して、米国工場で自動車用ガラスの減産に踏み切った。減産幅は米国2工場の生産能力（年300万台分）の約1割程度とみられる。ラインの稼働日数の調整やパート労働者の削減で対応、減産期間は決めていない。信用力の低い個人向け住宅融資（サブプライムローン）問題で北米新車販売が落ちており、需要動向次第で追加策も検討する。

　自動車用ガラスの強度や安全性を高める熱処理などの加工工程で生産能力を引き下げた。同社はケンタッキー州とオハイオ州に加工拠点を1カ所ずつ持つが、減産措置を実施した工場は明らかにしていない。同社の北米の自動車用ガラスのシェアは2割強で首位グループ。主に日系の自動車メーカー向けに供給している。中大型車の販売台数の減少で受注が減少しているという。

------------------------
大阪弁護士会：スポーツ界のトラブル解決へ研究会発足

　高校野球の特待生問題、力士の傷害致死事件、ドーピング……。プロ・アマ問わずスポーツ選手が抱えるトラブルを法律的に解決する方策を考えようと、大阪弁護士会は「スポーツ・エンターテイメント法実務研究会」を発足させた。閉鎖的と指摘されるスポーツ界に風穴を開け、「契約の理念」を根付かせることも狙いにしている。総勢１００人を超す法律の専門家が紛争処理にどこまで貢献できるのか、取り組みに注目が集まる。

　研究会は、元ヤクルトの古田敦氏が９２年、プロ野球の契約更改で初めて代理人契約を結んだ辻口信良弁護士が発起人代表を務める。辻口弁護士を中心に約１０人の有志が「スポーツ選手の地位向上」を目指して設立した「スポーツ問題研究会」（９１年発足）が母体となった。

　代表選手の選考を巡る競技団体内のトラブルなどアマスポーツに関する紛争処理を研究するほか、監督・コーチによる理不尽ないじめや体罰問題にも取り組む方針。「競技団体やチーム内での嫌がらせを恐れて泣き寝入りしている選手も多い」（辻口弁護士）とみられ、気軽に相談してもらうために研修会や講演会などの広報活動にも力を入れる。

　研究会設立には、当初見込みの４０人を大きく上回る１０４人の弁護士が賛同した。その中心は若手弁護士だ。背景には、司法試験合格者の急増に伴う過当競争の中、弁護士業務の領域拡大に寄せる期待もある。辻口弁護士は「法律の光を当てることで、なれ合いでトラブルを処理する風土を変えたい」と話している。問い合わせは研究会事務局の太陽法律事務所（０６・６３６１・８８８８）。

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近聞遠見：なぜ握手拒否事件が＝岩見隆夫

　次のシーンは、昨今の政治の深部をかいま見せた象徴的な瞬間だったかもしれない。

　９日午後６時前、東京・内幸町のプレスセンタービル１０階ホール。出版記念を兼ねて、＜カーティス米コロンビア大教授と「日本の政治」を語る会＞が始まろうとしたときだ。

　会場に先に着いていた発起人の一人、中曽根康弘元首相に、やはり発起人の小泉純一郎元首相が近づいた。周囲に緊張の空気が流れる。なにしろ、いろいろ因縁のあった二人だ。

　小泉が腰をかがめ、右手を差し出して

　「どうも……」

　と握手を求めた。しかし、中曽根は手を出さない。握手を拒んだ。そこは瞬間芸にたけた小泉のこと、すかさず出した手をさっと上げて、あいさつのポーズをとり、しのいだ。

　「ヒヤリとしましたね」

　とあとで何人かがもらした。

　ほんの１、２秒の出来事、気づかない人もたくさんいた。小泉が最初にスピーチし、中曽根は乾杯の音頭をとってすぐに退席、遅れてきた福田康夫首相も一席ぶった。

　さて、このささいなようで見逃しにできない握手拒否事件はなぜ起きたのか。儀礼上も通常はありえない。だが、その瞬間、卒寿（９０歳）を迎えたばかりの中曽根の脳裏を強烈によぎるものがあったのではなかろうか。以下は筆者の推測である－－。

　小泉政権５年半の間に、握手拒否につながると思われる二つの事件が起き、いずれも当コラムで書くことになった。

　最初は小泉による長老追放の荒業である。２００３年１０月１８日付は

　＜中曽根、宮沢は「日本の財産」＞

　の見出しで、中曽根と宮沢喜一元首相の両長老に対し、７３歳の定年制をタテに引退を迫ろうとする動きに反対した。しかし、小泉は同月２３日、二人に直接通告、中曽根は、

　「断じて了承できない。一種の政治的テロだ。おい、敬老精神がないじゃないか」

　と面（めん）罵（ば）したが、小泉は黙殺した。同２５日付コラムは、

　＜情理を尽くしていない＞

　と異を唱えたものの、あとの祭りだった。小泉の、

　「８０歳でも、『まだまだ』と言う人がいる。困っちゃうんだな。これは頭が痛い」

　という街頭演説の一部を紹介している。このとき、中曽根８５歳、宮沢８４歳、後期高齢者だ。

　二つ目は、その２年後、０５年１１月１９日付コラムは、

　＜最長老・中曽根の「怒り」＞

　と題している。当時、中曽根は自民党新憲法起草委員会の前文小委員長をつとめ、素案を練り上げるが、最終確定した草案では中曽根案が全文捨てられ、別ものに替わっていた。小泉の鶴のひと声だったという。

　これには秘話があり、後藤田正晴元副総理が亡くなる（９月１９日）少し前、中曽根に

　「前文案には聖徳太子１７条憲法の『和をもって貴しとなす』の精神をぜひとも入れてほしい。このままでは日本がおかしくなる」

　と懇望、中曽根案には

　＜和を尊び……＞

　と織り込まれた。だが、＜和＞が小泉イズムに合わない。中曽根が、

　「一回の相談もなく、ご聖断のごとき扱いをうけたことは誠に残念、失礼も甚だしい」

　と怒りを爆発させた事件だった。

　長老追放と＜和＞の否定は、小泉時代に作られた後期高齢者医療制度の非情と重なる。（敬称略）＝毎週土曜日掲載

-----------------------------
相撲協会：文科省が財務状況を既に指導

　日本相撲協会の財務状況について、所管官庁の文科省の銭谷真美事務次官は１６日の会見で、昨年度の調査結果を基に是正を指導していることを明らかにした。この件では松浪健四郎副文部科学相が１４日に「（協会が）お金を持ち過ぎている」などとして、収支などを調査する意向を示していた。

　公益法人の指導監督基準では「内部留保は３０％以下が望ましい」と定められている。文科省が実施した昨年度決算の調査で、同協会は６７％に達していることが判明し、是正を求めたという。ただ、銭谷次官は松浪副文科相が言及した調査について「日本相撲協会だけを対象とした特別な調査ではない」と話した。

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新種鉱物：彗星のちりに含有　ＮＡＳＡ、大気中で採取

　【ヒューストン共同】米航空宇宙局（ＮＡＳＡ）が大気中から採取した彗星（すいせい）のちりの中に、新種の鉱物が含まれていることが分かった。国際鉱物学連合が新鉱物だと公式に認定した。見つけたのは、ＮＡＳＡジョンソン宇宙センターの中村圭子研究員らの国際チーム。彗星に由来する新鉱物の確認は世界初。太陽系の成り立ちの解明に役立ちそうだ。

　チームは０３年、太陽系内を約５年周期で回る「グリグ・シェレルップ彗星」の軌道と地球が特殊な条件で重なったのを利用し、高度約２０キロの大気から、飛行機で約５０００粒のちりを集めるのに成功した。

　中村さんは、このうちの一粒を電子顕微鏡で詳細に調べ、長さ１００～６００ナノメートル（ナノは１０億分の１）の楕円（だえん）形の結晶３個を発見。マンガンとケイ素が主成分の「マンガンシリサイド」だと突き止めた。天然には地球に存在しない物質だが、人工合成はされており、次世代半導体として研究されている。

　中村さんによると、太陽系にマンガンシリサイドが存在するとは理論的にも予測されておらず、意外な発見という。結晶は、太陽系誕生期に形成されたとみられる特殊なかんらん石に取り囲まれていたことから、中村さんは「太陽系の外でできた結晶が、太陽系誕生時に彗星に取り込まれた可能性がある」と話している。

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住友林業ツーバイフォー、国産木材の比率高めた住宅

　住友林業子会社の住友林業ツーバイフォー（東京・中央）は、壁や床、屋根に国産のヒノキやスギの合板を使ったツーバイフォー住宅を19日に発売する。従来は4％だった主要構造部分の国産材の使用比率を30％に高める一方、価格は3.3平方メートル当たり56万円からと、ほぼ同程度にする。

　デザインは、切り妻屋根の「ノスタルジア」、水平屋根の「アーバニスト」の2種類。壁や屋根に、表面はヒノキ、内部をスギで作った合板を使用する。土台も国産ヒノキの集成材を使う。初年度は500棟の販売を目標にする。

　国産材を調達する仕組みの整備を進めたため、価格を抑えながら国産材の使用比率を高められたという。

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「ミニ先物」取引急増　10分の1単位で投資可能

　個人投資家の間で、既存の先物商品の10分の1の投資単位で売買できる「ミニ先物」への関心が高まっている。16日には東京証券取引所に、東証株価指数（ＴＯＰＩＸ）先物の投資単位を10分の1にしたミニＴＯＰＩＸ先物が上場した。大阪証券取引所で売買されているミニ日経平均先物は、売買高が日経平均先物の3倍に膨らんでいる。初期投資額が少なく流動性の高い点が人気だが、値動きが激しく損失が膨らむ可能性もある。

　上場初日のミニＴＯＰＩＸ先物の売買高は4748枚（枚は最低取引単位、売買高に価格などを掛けた想定元本ベースの売買代金は66億円）。既存のＴＯＰＩＸ先物の売買高は4万6367枚（同6464億円）だった。

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豪系ファンドＭＧＰＡ、日本の不動産に5000億円投資

　豪金融機関マッコーリーグループが49％出資する不動産ファンド運営のＭＧＰＡは、今後3年以内に約5000億円を日本の不動産に投じる。欧米の年金基金や保険会社などから資金を集め、156億ドル（1兆7000億円弱）のアジア不動産ファンドを16日設立した。このうち少なくとも3割以上を日本の不動産投資に充てる。

　投資対象はオフィスビルや商業施設、賃貸マンションなど。不動産会社や不動産投資信託（ＲＥＩＴ）なども投資対象とする。ファンドのうち出資部分は39 億ドル（4000億円強）で残りは借入金で賄う。ファンドの運用期間は9年で、当初3年のうちに不動産の取得を完了する方針だ。

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平成20年６月17日
金融庁
特定業種に対する金融機関の貸出判断について

最近、融資の申込みに際し、融資申込先の金融機関等から、「貴社のような業種へは融資をしないよう、金融庁から指導されているので、ご融資できない。」という対応をされた、といった情報が金融円滑化ホットライン等に寄せられています。

金融庁が金融機関に対し、特定業種への融資について、抑制的な指導をすることはありません。貸出の判断は金融機関が自らの経営方針によって決定すべきことであり、同様に、金融検査が貸出判断に関与することもありません。

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Israel-Syria talks 'constructive'
Israeli troops in the Golan observe Syria (archive)

Israel and Syria have completed two days of indirect peace talks in Turkey, with Israeli and Turkish officials hailing them as a success.

The two sides have agreed to at least two more sets of talks under Turkish mediation, the officials said.

The Israeli delegation is thought to include two top aides of Prime Minister Ehud Olmert.

Previous peace talks collapsed in 2000 over disagreements about the Golan Heights, occupied by Israel since 1967.

The two sides announced the existence of indirect talks last month.

An unnamed Israeli official told journalists the discussions had been held "in a positive and constructive atmosphere".

"The two sides reiterated their commitment to make progress in the talks and to meet on a regular basis."

Turkish officials also said an agreement had been reached to carry on the talks, although Damascus has not yet confirmed that any talks have taken place.

And it is not thought there is any firm plan for a face-to-face meeting between the two sides.

At the moment, Turkish officials have been passing messages between the two delegations.

Israeli President Shimon Peres said on Sunday that Israeli and Syrian leaders should meet.

He recalled the groundbreaking visit by Egypt's Anwar Sadat to Israel in 1977 which triggered a process that led to a peace treaty.

"If the Syrians really want peace, they must agree to a summit meeting between the Syrian president and the Israeli prime minister," said Mr Peres during a visit to the US.

The Syrian government has insisted peace talks can be resumed only on the basis of Israel returning the Golan Heights.

Israeli authorities, for their part, have demanded that Syria abandon its support for Palestinian and Lebanese militant groups.

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UAE sheikh to face assault trial
Silvano Orsi

A Swiss court is preparing to hear a case against a brother of the UAE president who is accused of assaulting an American citizen in a Geneva hotel.

Silvano Orsi alleges Sheikh Falah al-Nahyan made homosexual advances to him in the bar of the hotel and severely beat him when rejected.

The allegations date back to 2003. Mr Orsi said it has been a "five-year ordeal" to get the case to court.

The sheikh denies assault and has said he is sure "justice would be done".

Mr Orsi, 39, says he was drinking at Geneva's La Reserve hotel with a Saudi friend when the sheikh ordered a bottle of champagne to be sent over to their table.

A few minutes later, Mr Orsi claims the sheikh came over and began molesting him, and when the advances were rejected the sheikh attacked him and whipped him with his belt.

Mr Orsi says he sustained a herniated disc, nerve damage and post-traumatic stress disorder from the assault.

In a pre-trial hearing in 2007, Mr Nahyan, 37, said there had been a short scuffle in the hotel bar after he was accused of being gay.

The three-judge tribunal will begin hearing the case on Thursday and it can impose a sentence of up to two years in prison if the defendant is found guilty.

Mr Nahyan is the son of the late Sheikh Zayed, who died in 2004 and was succeed by Mr Nahyan's older brother, Sheikh Khalifa.

Mr Orsi has said he wants to bring a civil case against Mr Nahyan in addition to the criminal case, because he says to have been too ill to work since the alleged assault.

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New Iranian dress code crackdown
Iranian policewoman stops woman to challenge her on her dress - file picture 2007

Police in Iran have begun a new campaign against Western-style clothing and hairstyles.

Women are being arrested if their headscarves do not fully cover their hair or their clothes show their figures too clearly.

Men are also being stopped for having hairstyles seen as inappropriate.

BBC Tehran correspondent Jon Leyne says it is the latest such drive by the government against what is considered un-Islamic behaviour.

But he adds that many people are continuing to ignore the authorities' warnings.

The dress code imposed after Iran's 1979 Islamic revolution requires women to cover all their hair and wear long, loose-fitting clothes to disguise the shape of their bodies.

Those who violate the rules can receive lashes, fines or imprisonment.

New twist

The Iranian authorities often launch crackdowns before the hot summer months when women like to wear lighter clothing.

Squads of police have been seen in some of Tehran's major squares and parks, our correspondent says.

And in a new twist, Iranians are being asked to specify where they got the clothing or the hairstyle.

One barber's shop is already reported to have been closed down for doing hairstyles deemed inappropriate.

The Tehran police chief said it was the force's duty to prevent such things, in order to increase security and social order.

Despite the many attempts by this government to enforce Islamic standards, it seems to have absolutely no effect in north Tehran, our correspondent says, where some young women continue to perch their hejabs as far back on their hair as possible.

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Egypt bans 92-year-old's marriage
By Frances Harrison
BBC News

Generic picture of the hands of a young and old person

The Egyptian authorities have banned a 92-year-old man from marrying a 17-year-old girl, the Egyptian al-Akhbar newspaper has reported.

The ministry of justice invoked a law which says the age gap between spouses should not exceed 25 years.

Egypt brought in the law prohibiting the marriage of elderly men to very young girls during the Gulf oil boom.

It was an effort to prevent wealthy men from the Gulf states seeking young poor brides from the Egyptian countryside.

Not much is known about the 92-year-old man who tried to marry an Egyptian girl of 17 except that he is an Arab from the Gulf.

An Egyptian justice official said by refusing to endorse their marriage it would now be impossible for the girl to travel abroad with her husband.

However, in special cases, the justice ministry does allow foreign men to marry Egyptian women more than 25 years their junior if they deposit a very large sum of money in the name of their wife at the Egyptian National Bank.

Both husband and wife also have to report in person to the ministry which checks their marriage is genuine to prevent any kind of trafficking in women.

According to the al-Akhbar newspaper, 173 such marriages were allowed in the past year after the foreign husband deposited a sum equivalent to about US $8,000 and was screened.

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Honda makes first hydrogen cars
Honda's president Takeo Fukui (R) in the FCX Clarity

Japanese car manufacturer Honda has begun the first commercial production of a zero-emission, hydrogen fuel-cell powered vehicle.

The four-seater, called FCX Clarity, runs on electricity produced by combining hydrogen with oxygen, and emits water vapour.

Honda claims the vehicle offers three times better fuel efficiency than a traditional, petrol-powered car.

Honda plans to produce 200 of the cars over the next three years.

One of the biggest obstacles standing in the way of wider adoption of fuel-cell vehicles is the lack of hydrogen fuelling stations.

"This is an important day in the history of fuel-cell vehicle technology"
John Mendel, executive vice president of American Honda

Critics also point out that hydrogen is costly to produce and the most common way to produce hydrogen is still from fossil fuels.

Analysis of the environmental impact of different fuel technologies has shown that the overall carbon dioxide emissions from hydrogen powered cars can be higher than that from petrol or diesel-powered vehicles.

'Monumental step'

The first five customers are all based in southern California because of the proximity of hydrogen fuelling stations, Honda said.

US actress Jamie Lee Curtis will be among the first to take delivery of the vehicle, the firm added.

The car will initially be available for lease rather than purchase in California, starting in July, and then in Japan later this year.

It is being built on the world's first dedicated production line for fuel-cell vehicles in Japan.

"This is an important day in the history of fuel-cell vehicle technology and a monumental step closer to the day when fuel-cell cars will be part of the mainstream," said John Mendel, executive vice president of American Honda.

How the technology works

Honda says it expects to lease a few dozen units in the US and Japan in 2008, and about 200 units within three years.

It said the cost of the car, on a three-year lease, would be $600 (£300) a month.

The FCX Clarity is based on Honda's first-generation hydrogen fuel-cell vehicle, the FCX concept car. Honda delivered around 34 of these cars, mainly in the US, of which 10 remain in use.

Booming demand

Many car makers are developing cleaner, more economical vehicles because of high fuel prices and as consumers become more concerned with the environment.

Toyota said it was struggling to keep up with booming demand for its hybrid vehicles because it was unable to make enough batteries.

Hybrid vehicles, such as Toyota's top-selling Prius, switch between a petrol engine and electric motor.

Toyota Motor Corp's executive vice president, Takeshi Uchiyamada, told the Associated Press that new battery production lines could not be added until next year.

"Hybrids are selling so well we are doing all we can to increase production," he said. "We need new lines."

Volkswagen, Europe's biggest car maker said on Monday it wanted to produce a Golf which consumed three to four litres of petrol per 100 kilometres compared with 4.3 litres currently for the most fuel-efficient model.

"In the next few years, we are not going to do without petrol and diesel motors, but the future belongs to the electric car," VW chairman Martin Winterkorn told German newspaper Bild-Zeitung.

HOW A HYDROGEN (PROTON EXCHANGE) FUEL CELL WORKS

* 1 Hydrogen: Constantly pumped in at negative terminal
* 2 Oxygen: Pumped in at opposite positive terminal
* 3 Catalyst: Helps electrons break free from hydrogen atoms
* 4 Membrane: Allows hydrogen ions through but blocks electrons
* 5 Circuit: Electrons flow through circuit to positive terminal
* 6 Electrons and hydrogen ions combine with oxygen, forming water


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燃料電池車の生産開始　ホンダ、日米３年間で２００台販売
FujiSankei Business i. 2008/6/17

　ホンダは１６日、栃木県内で新型燃料電池車「ＦＣＸクラリティ」の生産を開始した。７月から米国、今秋から日本で、リース方式で販売を始める。日米合わせて３年間で２００台の販売を計画している。

　燃料電池車は水素を大気中の酸素と反応させて電気を発生させ、モーターを駆動させて走行する仕組み。走行中に排出するのは水だけで、二酸化炭素（ＣＯ２）をまったく排出しない「究極のエコカー」と呼ばれる。ホンダは「ＦＣＸクラリティ」の組み立てをホンダ四輪新機種センター（栃木県高根沢町）、搭載する燃料電池スタックの製造をホンダエンジニアリング（同芳賀町）でそれぞれ行う。

　電気自動車も走行中にＣＯ２を排出しないが、福井威夫社長は同日の会見で「現在の技術では１００キロ以上の走行距離を求めると、電気自動車では現実の商品にならない」と述べ、クラリティの実用性の高さを強調した。

　ただ、燃料電池自動車は水素を供給するインフラ整備の充実やコスト削減など普及に向けての課題も多く、福井社長は「１０年以内に１０００万円を切る価格にしたい」と話した。

　今回の新型車は２００５年モデルに比べてバッテリーの重量を４０％軽減、容積も５０％に小型化し、部品点数も７４％削減するなど製造コストの抑制に努めているが、「１台あたり数千万円」（ホンダ幹部）といわれている。