Tentative deal for US missile base in Poland

Tentative deal for US missile base in Poland

By Daniel Dombey in Washington and Jan Cienski in Warsaw

Published: July 3 2008 02:26 | Last updated: July 3 2008 02:26

The US and Poland have capped months of negotiations with a tentative agreement to station a US missile defence base on Polish soil, officials said on Wednesday.

The deal, which is still subject to final approval by the government of Donald Tusk, Polish prime minister, removes one of the final big obstacles to a programme that is controversial within the US and viewed with suspicion by Russia. “We are satisfied with the way things are going,” said a senior US official.

Officials would not comment on the contents of the agreement to station 10 interceptor missiles in Poland amid some nervousness in Washington that it could still be rejected. Radoslaw Sikorski, Poland’s foreign minister, has indicated misgivings about the programme in the past.

But the US hopes that the final deal will be agreed by the time Condoleezza Rice, US secretary of state, visits Europe next week.

She is scheduled to sign a similar agreement in the Czech Republic, which has agreed to host a radar facility for the missile defence system.

The tentative agreement with Poland could allow the US to begin construction on the European sites of its missile defence system before the end of this year, which would make it more difficult for the next US administration to change tack.

While John McCain, the Republican presidential hopeful, supports the initiative as a way of protecting the US and its allies against a possible threat from Iran, advisers to Barack Obama, the Democratic candidate, are less enthusiastic.

The Democrats have traditionally been more doubtful about the technical capability and budgetary cost of the $11bn-a-year (€7bn, £5.5bn) missile defence programme as a whole, which also includes bases in California and Alaska.

Mr Tusk’s government, which came to power last year, has also been sceptical about the benefits of missile defence, amid concerns that it would detract from Poland’s security, stoked by Russian threats that it could target Poland if construction went ahead.

But officials say the mood of the negotiations had improved markedly in the past few weeks. Only recently, the US had reached out to Lithuania to see whether it might consider hosting the interceptor bases instead of Poland.

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China in clampdown on ‘hot’ money

By Geoff Dyer in Beijing

Published: July 2 2008 22:47 | Last updated: July 2 2008 22:47

China announced a major strengthening of capital controls on Wednesday in an attempt to limit the amount of speculative “hot money” entering the economy, which is frustrating its efforts to contain inflationary pressures.

In an announcement on its website, the State Administration of Foreign Exchange (Safe), the country’s foreign exchange regulator, said that exporters would be required to park revenues in special accounts while the authorities verified the funds were the result of genuine trade.

The new system risks becoming a cumbersome burden for exporters, such as suppliers of cheap goods to western retailers.

Exporters will now be required to provide documentary evidence that their invoices are based on genuine transactions if they wish to change dollars into renminbi. The regulator said the new computer system for checking invoices would be introduced in August 4. A trial period begins on July 14.

Recent leaked figures showed record inflows of capital entering China over the past two months. Officials believe some money came in illegally after companies exaggerated export revenues.

China has become an attractive country for investors and companies because interest rates are now above US levels and the renminbi is expected to appreciate.

According to Reuters, China’s foreign exchange reserves increased by a record $114.8bn in April and May to $1,800bn. Although it is impossible to calculate how much of that inflow is short-term, speculative capital, the figures were substantially higher than the combined numbers for the trade surplus and foreign direct investment.

The capital inflows have made economic management more difficult because, even though domestic inflation has been high in recent months, the Chinese central bank has been reluctant to raise interest rates for fear of attracting more hot money.

Authorities have so far prevented the inflows from causing money supply to grow too sharply by issuing bonds and lifting bank reserve requirements.

However, the bond issues are expensive and some economists believe that the reserve requirements cannot go much higher before smaller banks start to suffer. The authorities are also worried about the impact on the financial system if many investors ever decided to withdraw large amount of funds from the country at the same time.

Although the Chinese authorities have long experience of managing capital controls, the risk is that the new system will be a burden that will damage business.

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Fear over Israel’s threat to strike Iran

By Roula Khalaf in London, Daniel Dombey in Washington and Tobias Buck in Jerusalem

Published: July 2 2008 19:28 | Last updated: July 2 2008 19:28

Less than a year ago, diplomats in the Middle East were taking bets on the likelihood of a US military attack on Iran, with some assessing it at higher than 50 per cent.

Those odds subsided after the National Intelligence Estimate, the co-ordinated view of US intelligence agencies, concluded in December that Iran had halted its weapons programme in 2003.

But now the betting is back on.

As Tehran has accelerated its uranium enrichment programme instead of suspending it, speculation has mounted that Israel is preparing to do the job itself, possibly even before the US presidential elections in November.

Suspicions were fuelled by recent Israeli military manoeuvres over the Mediterranean, which some US officials described as target practice for an Iran strike.

Admiral Mike Mullen, the chairman of the joint chiefs of staff, flew to Israel over the weekend for meetings with defence officials. Although the Pentagon said little, some analysts interpreted the trip as a show of American concern over Israel’s plans for Iran.

The official Israeli line remains that the government supports the diplomatic process and that Iran is a problem for the world, not only for Israel.

Diplomatic tensions

August 2003 IAEA inspectors find traces of highly enriched uranium at nuclear facility in Natanz

October 2003 Tehran agrees to stop producing enriched uranium

April 2005 Iran announces plans to resume uranium conversion at Isfahan

September 2005 President Mahmoud Ahmadi-Nejad declares that Iran has an ‘inalienable right’ to produce nuclear fuel

February 2006 IAEA votes to refer Iran to the UN Security Council

December 2006 Security Council passes resolution imposing sanctions on Iran

October 2007 US passes sanctions against three Iranian banks

November 2007 US National Intelligence Estimate concludes Iran halted its nuclear weapons programme in 2003

June 14 2008 EU, plus Russia, China and the US, make new offer of political, economic and security guarantees if Iran suspends enrichment

July 1 2008 Iran says offer is acceptable ‘in principle’

“If you want to do it you don’t talk about it,” says one Israeli official. The same official also says that Ehud Olmert, the prime minister, has “adamantly requested that we all shut up”.

Officials point out that the Israeli government is focused on taming surrounding threats – through a truce with Hamas, the militant group in Gaza, a prisoner exchange with Lebanon’s Hizbollah and indirect peace talks with Syria.

Although Israel is concerned that the diplomatic impasse over Iran will allow Tehran to master nuclear technology, the rather fragile state of the Israeli coalition and the cloud of a corruption probe hanging over Mr Olmert suggest this is not the time to launch a major military offensive.

Given the limited damage likely to be inflicted on Iran, and the risk of provoking a wider war at a time when oil prices are already sky high, such threats may be designed primarily to make the world nervous and toughen diplomatic resolve.

The sabre rattling has coincided with a package of incentives offered last month to Iran by world powers through Javier Solana, the European Union foreign policy chief, in order to encourage it to rein in its nuclear programme.

Tehran does appear to be taking the offer more seriously than diplomats anticipated. Ali-Akbar Velayati, a prominent advisor to Ayatollah Ali Khamenei, Iran’s supreme leader, suggested this week that Iran could accept a proposed stage of pre-negotiations, during which it would freeze the expansion of its nuclear programme in return for the UN Security Council halting further sanctions.

Mr Solana has yet to receive an official response to the offer. But, given the rising tensions, Iran’s strategy could well be to show sufficient flexibility and thwart possible Israeli plans until a new US administration takes over.

Although Iranian officials repeatedly describe Israel as weak, it is clear that the regime is taking the risk of an offensive seriously. The head of Iran’s Revolutionary Guard, its elite military force, at the weekend spooked oil markets by declaring that retaliation for a strike could include blocking oil routes and hitting Israel with long-range missiles.

Meanwhile, one of the main questions occupying US policy analysts is whether Washington would give a “green” light to Israel.

The US would have to bear some of the political consequences of an Israeli bombing campaign against Iran’s nuclear sites. Public opinion in the region would be outraged if Israel, the only nuclear power, attacked Iran, a fellow Muslim country – particularly as no one has proved that Tehran is currently developing nuclear weapons.

There could be military consequences too. Iranian officials have warned that an attack by Israel would be treated as if it were waged by Washington, hinting that US bases in the region might be targets of retaliation.

US intelligence estimates, meanwhile, suggest there is still time to deal with Iran diplomatically – Tehran would probably only be technically capable of having a weapon sometime during 2010-2015, according to the NIE.

The White House, however, could be of a different mind. Dick Cheney, vice- president, is known to be particularly tough on Iran but his influence with President George W. Bush appears to have declined.

On Wednesday, Mr Bush again emphasised “multilateral diplomacy”. He last week began the process of taking North Korea off the US terrorist list, a step Mr Cheney was unenthusiastic about.

Moreover, an Israeli attack on Iran in the coming months would introduce an unpredictable factor into the US presidential election, given the uncertain consequences. Barack Obama, the Democratic candidate, has campaigned on more diplomatic engagement with Iran, while John McCain, his Republican rival, has taken a tougher approach.

Some analysts suggest that, unless Iran accepts the international offer on the table and begins negotiations on the fate of its nuclear programme, Israel might want to act before the poll – particularly if Mr Obama is ahead in the campaign.

As Iran ponders its response to the diplomatic offer – made by the five permanent members of the UN Security Council plus Germany – some Israeli experts worry that the US and Israel are engaging in a dangerous game.

Alex Fishman, an Israeli analyst, says the US administration – which first leaked news of the Israeli military manoeuvres – has been using the threat of an Israeli attack to intimidate Iran.

“Israel’s strategic military force is serving as a pawn in the hands of the administration to bring this crisis to a situation of near-explosion until someone blinks first,” he wrote on Wednesday in Yedioth Ahronoth, an Israeli newspaper.

“The problem is that threats of this type have a dynamic of their own, and they may yet be self-fulfilling. What will happen if the Iranians don’t blink?”

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OECD sees 9% rise in jobless

By Andrew Taylor, Employment Correspondent

Published: July 2 2008 09:06 | Last updated: July 2 2008 09:06

The number of people out of work in the world’s leading economies is expected to rise by 9 per cent to 34.8m by the end of next year under the impact of the credit crunch, the Organisation for Economic Cooperation and Development reported on Wednesday.

The effects of the rise may be more muted than in previous downturns, however, with employment markets starting from a historically very strong position. The total number of jobless even after next year’s forecast rise will still be slightly below the average struck between 1995 and 2005, says Angel Gurría, OECD general secretary.

“Labour markets have shown significant improvements over the past decade. The average unemployment rate dropped to 5.6 per cent in the OECD area in 2007, the lowest rate since 1980, ” the OECD said.

“Employment has also increased significantly and, on average, two-thirds of the working-age population now have a job, an unprecedented achievement in the post-war era.”

The Paris-based organisation forecasts that the employment rate across 30 OECD countries will still be only 6 per cent in 2009, compared with a 6.6 per cent average between 1995 and 2005, which it described as a “fairly strong period for employment”.

Rising unemployment, however, should dampen fears of inflationary pay rises as workers worry more about retaining their job than using their bargaining power to increase real pay.

“Against this background, the growth in real compensation per employee should slow down in 2008 in the majority of the 30 OECD countries and be broadly in line or below productivity gains,” said the organisation.

It warned against complacency, however, saying that “labour market conditions remain difficult for some groups.” The unemployment rate in the US for example was expected to rise to 6.1 per cent next year a percentage point higher than its recent 10 year average.

The average unemployment rate in Europe by comparison was expected to “remain essentially unchanged during the next two years”. The biggest European rises in the jobless rates were likely to occur in Iceland, Ireland, Spain and Turkey while unemployment rates would fall in the Czech Republic, Poland and the Slovak Republic, said the OECD.

It expected the unemployment rate to remain essentially unchanged in Japan and Korea.

Employment growth has already slowed in the OECD area declining from 1.7 per cent in 2006 to 1.5 per cent last year. It is expected to fall to just 0.7 per cent this year and 0.5 per cent in 2009. Increases in the size of the labour force, partly driven by increased migration, however means that the jobless total will rise over the next two years, said Mr Gurría.

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How Saudi football went pro

By Andrew England

Published: July 2 2008 17:34 | Last updated: July 2 2008 17:34

Football was always a passion for Rakan Alharthy. An uncle was president of one of Saudi Arabia’s leading clubs and used to take him to games. But when the young Arsenal fan decided to turn his love into a business, doubters in his family were numerous and vocal.

“At the beginning my father and brothers thought I was wasting money,” he says. “They thought: ‘Oh, what are you saying? Sport is a losing business.’”

But the family indulged his ambition. They invested SR250,000 in Sela Sport, a company Mr Alharthy set up in the 1990s when he was studying medicine at King Saud University.

His view was that football in Saudi Arabia – which had been an amateur affair, financially dependent on the government and state entities – could develop into a vibrant business.

He has gone some way to living his dream. Sela today is an integral part of a family group that had focused on telecoms and real estate.

Last year revenue was SR75m ($20m) and that is expected to increase significantly this year. Sela has helped sell the sponsorship rights of three clubs for five years to Saudi Telecom Company. The overall value of the deal was about $200m, Mr Alharthy says. The company is also involved in the sale of the sponsorships rights for four years of the Saudi national football teams. That deal, with the Zain mobile phone operator, is worth about $40m.

In both cases Sela had held the rights and will manage and operate the contracts. “We buy the rights, package it and sell it,” Mr Alharthy says.

Sport has become big business throughout the Gulf. Where once were only traditional horse racing meetings, countries now host high-profile international events, including an F1 Grand Prix in Bahrain (and Abu Dhabi next year) and big-name golf and tennis tournaments in the United Arab Emirates and Qatar. The oil-rich states have the cash to bring athletes to the region.

In some cases they give foreigners nationality to compete under their colours.

Sela Sport began life in more humble circumstance by arranging transfers between Saudi clubs. Thanks to the assistance of a European players’ agent, the company has had a hand in the transfers of big-name players, including Sergei Rebrov’s £11m transfer to Tottenham Hotspur, the English premiership side, in 2000.

Mr Alharthy also helped arrange a move by Hristo Stoitchkov, a former Bulgarian star, from Barcelona to Al-Nasr, a Saudi club. The move was short-lived but, for Stoitchkov at least, lucrative.

The company has since broadened its portfolio to include sponsorship and event management.

Mr Alharthy, 34, got his break when the Saudi football federation gave Sela a licence to act as a players’ agent for Fifa, football’s world governing body, and then employed it to recruit a coach for the national team ahead of the 1998 World Cup in France.

Sela arranged a deal that brought Carlos Alberto Parreira, the Brazilian coach who led his country to World Cup victory in 1994, to the kingdom. It was a marriage that ended in tears when Mr Parreira was sacked after the Saudi team suffered a 4-0 drubbing at the hands of France.

But Sela was on its way. Sandor Varga, a Hungarian listed by Fifa as a players’ agent, acts as its representative and cuts the deals behind some of the big money transfers. The Saudi company provides the financial and business back-up.

The pair met in the 1990s when Mr Varga was working as assistant coach at a Saudi club and Mr Alharthy was involved in a community football tournament during the holy month of Ramadan.

“We work as a team,” Mr Alharthy says. “He comes back, we discuss the prices. I can handle one side and he handles the other.”

In 1999, as his father sought to retire, the young doctor had to decide between his medical career and the life of a businessman. He chose the latter and is now not just Sela Sport’s president but also vice-chairman of Sela Holdings, which oversees the sports company and a medical entity.

Saudi clubs pay rates that lure big-name players who are nearing the end of their careers and looking to boost their bank balances before hanging up their boots.

“We pay more money than Africa, we pay more than any country in the Gulf and we are maybe competing with Japan if not paying more,” Mr Alharthy says.

The difference between today and a decade ago, he says, is that then companies looked at donations to sport as a form of social responsibility and did not realise the commercial potential.

He says his company introduced the concept of the press conference to the Saudi football game and the use by sponsors of match-day tickets to advertise. Sela has generated SR1.45bn that has gone into football in the past two years, Mr Alharthy says.

“This is the secret of it: when you start communicating with the public and with the football fans, with the football community, it becomes revenue for your investment.”

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A nightmare day for UK plc

Published: July 2 2008 19:30 | Last updated: July 2 2008 19:30

The credit crunch has caught up with corporate Britain. Two examples on Wednesday show how far the impact has spread beyond the banking sector. Shares in Taylor Wimpey lost almost half their value after the UK’s largest housebuilder by volume said that it had failed to secure a cash injection to repair its balance sheet. Marks and Spencer, the retail heavyweight, saw its share price drop by more than one-fifth in response to a profit warning. It is a moment to send shivers down the spine of UK plc.

Though each of the two groups has contributed to its own woes, their news is part of a broader bleak picture. The credit squeeze hit last summer, but only now is a range of companies acknowledging that falling property prices and weak consumer demand are taking a toll.

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Bahrain goes to work on labour reform

By James Drummond

Published: July 2 2008 17:14 | Last updated: July 2 2008 17:14

When it comes to labour issues, Gulf governments have a habit of talking about reform but producing little in the way of action.

But two years after a law was passed – and in the face of opposition from the business community – Bahrain has pushed through a series of increases in the price that sponsors of foreign employees must pay for their work permits.

The increases, which came into force this week, form part of a package of reforms designed to make employing Bahrainis more attractive to employers.

A permit for a non-Bahraini worker has risen to BD200 ($533), payable every two years. Sponsors must pay a further BD10 monthly fee on every expatriate worker and BD90 for each family member of expatriate workers.

The additional revenues are being recycled into training schemes for Bahrainis.

Reformers say the old system of fees and quotas created disincentives to employing Bahrainis. Expatriates were cheaper.

“It is a painful exercise that we have to go through,” says Jasim Husain Ali, a Shia member of parliament for the opposition Wefaq party.

“This is the price of delaying reforms for so long, doing too little. Now we have reached the stage when we don’t have the luxury of delaying things.”

Mr Ali, who is on the parliament’s finance and economic committee, puts unemployment in the Bahraini economy at 8 per cent to 12 per cent. But there is considerable under­employment and many Bahrainis work at levels below their formal qualifications or for only a few hours a day, he says.

“The authorities must do something with unemployment growing . . . Our population is growing very fast. Expats are putting a downward pressure on wages at a time of inflationary pressures in the economy.”

Unemployment is particularly sensitive in Bahrain because of a low-level but bitter conflict between the authorities and the island’s Shia majority.

One of the issues underlying the confrontation is the relative economic disadvantage of the Shia. Young Sunnis can always find jobs in the security services, an option that is not open to Shia.

Bahrain has lower oil reserves and production than its fellow Gulf states. Although Bahrain has enjoyed a bonanza in earnings in the past several years, it has been forced to reform its labour market more radically than other Gulf states that have more oil.

A study by the International Labour Organisation published last month found that Bahrain had created 84,000 private-sector jobs since 1990 but 58,000 of these had gone to foreigners. Many of the jobs created for Gulf nationals were informal and temporary, which the ILO said was the result of inflexible rules on hiring and firing and the high cost of social insurance.

As a quid pro quo of the latest reforms, the quotas of Bahraini nationals whom employers must hire have been cut.

Amal Kooheji, head of human capital development at the government’s Labour Fund, says the next step is to introduce labour market flexibility. Under existing rules, non-Bahrainis need a sponsor’s permission to move jobs.

“[Increased flexibility will] try to put fair competition between the Bahraini and the non-Bahraini. Because if the Bahraini can move and the non-Bahraini cannot, the private sector will never improve its working conditions,” Ms Kooheji says.

Last month the US State Department said in a report that, in spite of efforts to combat people trafficking, some foreigners in Bahrain still faced “conditions of involuntary servitude such as unlawful withholding of passports, restrictions on movements, non-payment of wages, threats, and physical or sexual abuse”.

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Scottish Coal to Supply Scottish Power, FT Says (Correct)

By Chris Peterson

July 3 (Bloomberg) -- Scottish Coal signed a five-year agreement worth 700 million pounds ($1.4 billion) to supply Scottish Power Ltd. with fuel, equivalent to half the mining company's annual output, the Financial Times reported, citing Scottish Coal officials.

Details are likely to be announced today, the FT said.

Scottish Power, which is owned by Spain's Iberdrola SA, burns between 4 million and 6 million metric tons of coal a year, much of it imported, the newspaper said.

Scottish Coal, owned by Midland & Scottish Resources Plc, will supply 2 million tons of coal a year at an undisclosed fixed price; expanding existing open-cast mines and starting new ones will probably create 100 jobs, the FT added.

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Foreign investment boosts brand Britain

By John Willman, Business Editor

Published: July 3 2008 02:54 | Last updated: July 3 2008 02:54

Britain attracted a record level of overseas investment last year, according to official figures released on Wednesday that showed more than 100,000 jobs had been created or protected in a fifth successive year of growth.

UK Trade & Investment, the Whitehall agency, said the number of inward investment projects rose 10 per cent to 1,573 in the year to April 2008. These had created more than 45,000 jobs and safeguarded a further 58,500 – up 23 per cent and 39 per cent respectively on the previous year.

Foreign acquisitions accounted for 30 per cent of the total, down 3 per cent. But the number of new arrivals rose 9 per cent to 653, while 436 companies had expanded their UK operations – a 30 per cent rise on the previous year.

Digby Jones, trade and investment minister, said the continuing growth in inward investment reflected the attractiveness of the UK to overseas companies.

“As I travel round the world banging the drum for Britain, I hear the same messages again and again. Investors tell me ‘you welcome us, you welcome the competition and you don’t protect your markets’.

“Britain is seen as a good place to do business, and as a good platform for operating in the rest of Europe.”

The biggest source of inward investment remained the US, with almost a third of the projects accounting for almost 30,000 of the jobs created or safeguarded. The number fell 11 per cent on the previous year, however, as US companies wrestled with the fallout from the credit crunch.

Germany became the second biggest source of foreign investment projects, with the number rising 39 per cent to 104. There were also increases in the number of projects from India, which contributed 75, and China, with another 59.

Lord Jones said the figures showed a surge of investment in research and development in the UK – up 83 per cent – which reflected the strength of Britain’s universities, four of which are in the global top 10.

There had also been a rise in investment in advanced engineering, up 61 per cent with 182 projects supporting more than 30,000 jobs. Environmental technology projects also rose to 59 – up 22 per cent.

“When I fly to Riyadh, the Airbus wings are made in north Wales,” said Lord Jones, “I am picked up in a Jaguar with the security people in a Range Rover – both made in Birmingham ... Downtown there will be fabulous environmental engineering equipment – all British.”

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Plan to include Hizbollah in UK list condemned

By Ferry Biedermann in Beirut

Published: July 3 2008 03:46 | Last updated: July 3 2008 03:46

Sayyed Hassan Nasrallah, the leader of Lebanon’s Hizbollah movement, on Wednesday condemned the British government for placing his group’s armed branch on the UK terror list.

The Hizbollah leader mentioned the role of Great Britain in the founding of Israel and the current deployment of troops in Iraq and Afghanistan. “The wrongdoer’s decision is thus a medal of honour to us,” he said in a speech via video link that focused on the details of an impending prisoner exchange with Israel.

The UK Home Office had earlier on Wednesday announced that it would ask parliament to place the Islamist group’s armed wing on the list of banned terrorist organisations.

Hizbollah, the Shia group backed by Syria and Iran, is considered a terrorist group by Israel and the US but has so far escaped that label in most of Europe. In most of the Arab and Muslim world Hizbollah is seen as a legitimate resistance movement against Israel.

The main reason for the ban given by the Home Office focused on Iraq. “Hizbollah’s military wing is providing active support to militants in Iraq who are responsible for attacks both on coalition forces and on Iraqi civilians, including providing training in the use of deadly roadside bombs,” it said.

British troops are deployed in the south of Iraq where several Iraqi MP’s have accused Hizbollah of having had a training camp for Shia militants. They implied that the group is now operating from Iran.

Jalal Talabani, Iraq’s president, recently said that several people,“claiming to belong to Hizbollah” had been arrested in Iraq. But he did not accuse the movement itself of involvement in violence in his country.

The Home Office also mentioned Hizbollah support for militant Palestinian groups.

It emphasised that the ban was aimed exclusively at the movement’s armed wing. “This means that it will be a criminal offence to belong to, fundraise and encourage support for the military wing of the organisation,” it said.

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No Loans at Mountain 1st Means Bank Credit Drying Up (Update2)

By Mark Pittman
More Photos/Details

July 2 (Bloomberg) -- Mountain 1st Bank & Trust Co. Chief Executive Officer Greg Gibson forecast 12 percent loan growth for his North Carolina bank this year. Instead, he's spending more time handing out freshly baked cookies than extending credit.

Gibson is ``standing on the brakes'' because Mountain 1st, owned by 1st Financial Services Corp. of Hendersonville, North Carolina, can no longer sell trust-preferred stock to raise capital for loans so customers can buy airplanes or build veterinary clinics, Gibson said in a June 20 telephone interview. The bank, with $650 million in assets, is among more than 8,000 across the U.S. caught for the past six months in the shutdown of the $117 billion market for the securities, a hybrid of debt and equity.

The fallout from the subprime-mortgage collapse is spreading from global lenders such as Citigroup Inc. and UBS AG to local ones, including Lansing, Michigan-based Capitol Bancorp, FirsTier Corp. of Northglenn, Colo. and Mountain 1st, which tempts customers at log cabin-style branches with cookies and coffee. Less capital for such hometown banks may stymie Federal Reserve Chairman Ben Bernanke's effort to prevent a credit crunch.

``There is no question there is a problem,'' said Chris Cole, senior regulatory counsel for the Independent Community Bankers of America, a Washington-based trade group for about 5,000 lenders. ``Banks need the capital to lend. So that problem of raising capital causes a further slowdown. This inability to raise capital points to a damping of the whole economy.''

10-Fold Growth

So-called community banks and larger lenders have sold trust-preferred securities, known as TruPS, for about a dozen years. Collateralized debt obligations became the biggest buyers, generating enough demand to expand the market 10-fold, according to Merrill Lynch & Co. index data. The CDOs packaged the shares and sliced them into pieces with varying credit ratings.

Community banks such as FirsTier were too small to attract insurance companies or mutual funds and sold the securities to CDOs instead, in issues of $10 million or $20 million at a time, according to Fitch Ratings analyst Nathan Flanders.

The market was upended after mortgage foreclosures reached a record high of 2.47 percent for all loans in the U.S., starting a credit-market meltdown that sent investors fleeing to safer government securities.

As the preferred market seized up, the Standard & Poor's Small Cap Regional Banks Index has fallen 34 percent this year, leaving banks unable to sell common stock without diluting existing shareholders. Cut off from fresh capital, some lenders may file for bankruptcy, according to ICBA's Cole.

Too Small

Trust-preferred shares were attractive to banks because dividends are paid out of pre-tax income and may be suspended without penalty. The stock is considered Tier 1 capital, a lender's most basic layer.

U.S. banks can lend $12 for every dollar raised through the securities, so $100 million of the preferred shares may become as much as $1.2 billion in credit, based on Basel I banking rules.

Only 10 banks out of about 2,000 issuers halted dividends in the seven years ending in September, and all but two resumed distribution, according to Flanders.

Since September, 23 banks, including Pasadena, California- based IndyMac Bancorp Inc. and Omni Financial Services Inc. of Atlanta, stopped making preferred-stock dividend payments. IndyMac has fallen 89 percent and Omni 81 percent this year.

`Extremely Skittish'

Omni's chief financial officer, Shaun Williams, who said in a regulatory filing that he would resign on July 18, didn't return a telephone message. Katie McFadzean of the MWW Group, a public-relations firm representing IndyMac, declined to comment.

``The investment community is now extremely skittish about the magnitude of future mortgage losses and that is damping demand for raising capital through this particular channel,'' said Richard DeKaser, chief economist for Cleveland-based National City Corp.

Billionaire investor Wilbur Ross is looking to buy regional banks that fail during the coming crisis. Ross said he plans to wait until after the government cleans up the banks' balance sheets.

``The regional banks will have a harder time than the large ones getting capital,'' Ross said in an interview yesterday. During the 1990s savings and loan crisis, ``we lost 2,600 banks, but we still have 8,000 left. We'll lose another 1,000 or so this time.''

No Golf

Mountain 1st was founded in 2004 in western North Carolina's Smoky Mountains. The bank had planned three months ago to sell its first issue of trust-preferred shares, said Gibson, a 51- year-old certified public accountant who served as an executive at 12 other lenders prior to his current job.

The sale of $8 million to $12 million of shares to finance expansion has been shelved for now, said Gibson. A $10 million issue can support $120 million in loans, he said. That's equivalent to about 20 percent of the bank's assets.

``The market went from wide open to the spigot getting turned off,'' Gibson said. ``I can't recall a market as deep and as wide as this one go to nothing as this one has.''

Without access to the trust-preferred market, the bank has quit lending for building lots, golf courses and second-home developments, Gibson said.

If the market doesn't open up soon, the bank's parent may sell a different form of security in August, convertible trust- preferred shares paying a dividend of 8.5 percent to 9 percent and carrying an option to buy common stock at 1.7 to 1.9 times book value, Gibson said. Investors would gain if the price rises to its historical multiple of 2.5, he said.

The shares would be marketed to current holders, he said.

Fueling Growth

``Banks were using trust-preferred to fuel balance-sheet growth,'' said Mark Evans, executive vice president of ICBA Securities, a unit of the community lenders' trade group. ``If you cut off the supply, you curtail the growth.''

FirsTier, started by Joel Wiens in Nebraska in 1963, sold three trust-preferred issues since its founding in 2003. All were placed in CDO transactions by Bear Stearns Cos., said Len McIlvennan, the company's chief financial officer. Bear Stearns was bought by JPMorgan Chase & Co. last month in a bailout arranged by the Federal Reserve.

``It was so easy to create a trust-preferred security before,'' he said. ``Now you can't get in the market, so now you're out of luck''

About $46 billion of trust-preferred CDOs were sold since 2000, Flanders said. None has been created since November. Flanders said May 21 that he may downgrade parts of 59 CDOs because so many banks had defaulted or deferred dividends.

Moody's Investors Service said today that it will review all CDOs backed by bank trust-preferred securities, according to a report by analysts John Park and James Brennan.

Market Dead

``Clearly, the market is moribund, or, if that's not the right word, dead,'' said John Duffy, chief executive of KBW Inc., a New York-based investment bank that sold a CDO of trust- preferred securities about once a quarter last year.

Investors bought trust-preferred CDOs under the assumption that multiple lenders wouldn't suspend dividends simultaneously, said Joshua Rosner, a managing director at investment-research firm Graham Fisher & Co. in New York, who's working on a paper about the bank securities.

If the economy worsens, lenders' inability to obtain more capital means they'll face ``selling themselves, merging, raising dilutive equity or blowing up,'' he said.

Along with a possible sale of convertible shares, Mountain 1st's Gibson says he's trying to boost deposits to fund loans.

``We're still growing,'' said Gibson, ``We want to. Business is too hard to come by. You can't totally kill it, not just shutter the windows and bolt the doors.''

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生保の経営破綻、公的資金制度廃止へ　金融庁

　金融庁は生命保険会社の財務の健全性に問題が発生した場合のセーフティーネット（安全網）を巡る制度を見直す。経営破綻した時に注入できる公的資金制度を来年3月末の期限切れ後に廃止、業界内での資金拠出による相互援助方式に一本化する方向で検討する。3日に再開する金融審議会（首相の諮問機関）で議論を始め、保険業法改正を目指す。

　生保会社が破綻した場合、まず業界でプールしている資金を充て、必要に応じて各社に追加金の負担を求める仕組みになっている。追加金の負担額が各社の健全性を損なう恐れがある場合、国が生命保険契約者保護機構に補助金を出す「政府補助規定」を保険業法で定めている。政府補助は来年3月末までの時限的な措置で、これを延長するかどうかが焦点の1つになっていた。

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コンビニで風邪薬・鎮痛剤の販売可能に　厚労省

　厚生労働省は2009年度から、コンビニエンスストアなどでも風邪薬や鎮痛剤を一定の条件で販売できるようにする。改正薬事法の省令を整備し、来年4月の施行を目指す。インターネットやカタログを使ったビタミン剤の販売も解禁する。医薬品の効き目や副作用の強さが一目でわかるように、製薬会社には3段階の区分で表示することも義務づける。消費者にとっては医薬品の購入が便利になり、安全性の評価もしやすくなりそうだ。

　医薬品の情報提供を拡充する改正薬事法は06年に国会で成立した。小泉純一郎元首相の規制改革の一環で、医薬品の利便性や安全性を高めるのが狙いだ。ただ表示や陳列の仕方といった具体的な運用方法が決まっておらず、厚労省はその細目を定める省令づくりを急いでいる。

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15日の一斉休漁、養殖業者も参加　出荷や給餌を休止

　魚類養殖業者の全国組織である全国海水養魚協会（本部・神戸市）は2日、大阪市内で代表者会議を開き、主要漁業団体が15日に一斉休漁するのに合わせて養殖場の出荷も休止することを決めた。フグや稚魚などを除いて給餌作業も休止する。原油価格高騰の影響でカタクチイワシなど生エサや輸入魚粉の価格も上昇しており、ほかの漁業団体と足並みをそろえて政府に窮状を訴える。

　同協会は愛媛、長崎などの魚類養殖業者の団体を束ねる組織。傘下の養殖業者数は約2100に上る。「養殖用のエサ代は一昨年に比べ約3割上昇している」（嶋野勝路会長）といい、資金繰りが悪化して廃業する養殖業者も出ている。

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蓄電池用炭素素材、韓国に生産拠点　新日石が現地大手と合弁

　新日本石油は韓国石油大手のＧＳカルテックスと提携し、蓄電池用の炭素素材を韓国で生産する。現在は携帯電話用バッテリーなどで使われており、今後は太陽光発電システムや風力発電の蓄電池向けの需要拡大が見込める。同社は国内では川崎市に生産設備を設けて試験生産を始めている。韓国にもＧＳカルテックスと生産拠点を整備し、需要拡大が見込めるアジア市場を開拓する。

　3日午後、韓国で調印し発表する。まず両社で事業化調査を実施。採算性が確認できれば税制面の優遇措置がある韓国南東部の慶尚北道・亀尾市で合弁工場を建設する。2010年に商業生産を開始。15年に年商50億円を目指す。

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キリンＨＤ、豪乳業買収で連合検討　ニュージーランド大手と

　キリンホールディングスは3日、買収を検討しているオーストラリア乳業2位のデアリーファーマーズについて、ニュージーランドの乳業大手フォンテラと共同で買収する方向で検討に入った。他の乳業大手と連携することで豪の独占禁止法への抵触を回避するとともに、買収の競合相手だったフォンテラと組むことで交渉を有利に進める。キリンはデアリーファーマーズ買収へ一歩前進する。

　キリンＨＤは同日、フォンテラと組むことについて「話し合いはしている」と認めた。共同買収の具体的な手法は交渉中という。デアリーファーマーズ買収についてはキリンＨＤ、フォンテラなど3社が買収に名乗りを上げていた。

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日航と全日空、関空中心に減便・廃止検討へ

　日本航空と全日本空輸は3日、燃料価格の高騰を受け、採算の悪化している関西国際空港から北海道や九州など地方空港を結ぶ路線を中心に減便や廃止する検討に入った。7月末から8月にかけて、具体的な路線を決め、地元自治体や国土交通省と調整に入る。早ければ10月以降の運航計画に路線の廃止・減便を盛り込む。ただ、両社はこれまでも地方空港間の路線の廃止や減便を実施しており、地元の反発も予想され、調整が難航する可能性が高い。

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ウェザーニューズ、超小型衛星の打ち上げを計画

　ウェザーニューズは3日、2010年をメドに超小型衛星を打ち上げる計画だと発表した。衛星と地上の間のレーザー光の減衰の度合いによって、大気中の温暖化ガスの量などを測る仕組みで、同社が手掛ける気象情報サービスなどに役立てるという。衛星のカメラを使って、北極海などの氷の状態も分析する計画だ。

　1辺が20センチ程度で、重さ2―3キログラムの小型衛星1基をまず運用する。大型の人工衛星を打ち上げる際、一緒に運んでもらう「ピギーバック」方式での打ち上げを想定している。開発から打ち上げまでにかかる事業費は約1億円と見込んでいる。

　地上用の機器は、世界各地の企業や学校などから「サポーター」を募集し、置いてもらう考えだ。

　同社は、東京大学や千葉大学とともに、2005年から衛星とそれを使った観測の研究開発を続けている。

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森ビル、臨海副都心にオフィス棟　12年開業目標

　森ビルは2日、臨海副都心にある江東区青海の約2万平方メートルの事業用地を東京都から取得すると発表した。取得額は約221億円。オフィスビルと、東京の街並みの模型や都市関連の専門書が閲覧できる都市展示施設を建設する。2012年8月の開業を目指す。

　計画によると、取得用地に地上18階建て（高さ約88メートル）のオフィス棟と、低層の都市展示棟を建設する。建設費は約500億円。延べ床面積は計約11万7000平方メートル。植樹や壁面・屋上緑化で、敷地面積の約40％分を緑化する。

　オフィス棟には成長が見込める映像やアニメ、音楽などのコンテンツ産業の事業所を誘致する。都市展示棟は「東京都市ミュージアム」として東京の都市模型を展示し、都市や建築に関する専門書が読めるコーナーも設置。模型や映像などの常設展示を無料とするほか、企画展や講演会などを開き、「楽しみながら東京や日本の文化を学ぶ文化施設にする」（同社）という。

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派遣業規制、「専ら派遣」も強化　与党方針、日雇い原則禁止

　与党が検討している労働者派遣制度見直しの基本方針の原案が2日、明らかになった。労働者派遣法を改正し、通訳など専門性が高い一部の業種を除いて日雇い派遣を禁止する。グループ企業など特定企業を主な派遣先とするいわゆる「専ら派遣」の規制も強化する。

　基本方針は8日に開く与党の「新雇用対策に関するプロジェクトチーム」（座長・川崎二郎元厚生労働相）で決定する。8月後半にも召集する臨時国会に改正案を提出するよう政府に求める。

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休眠財団の肩書宣伝　エビ投資詐欺の黒岩容疑者、勧誘に利用か

　ワールドオーシャンファーム（破産手続き中）のエビ養殖投資詐欺事件で、同社会長の黒岩勇容疑者（59）が2006年、当時休眠状態だった文部科学省所管の財団法人の理事長に就任、投資説明会でこの肩書を宣伝していたことが3日、関係者の話でわかった。警視庁生活経済課は文科省所管財団の信用性を出資金集めに利用したとみている。

　財団は東京都江東区の「日本奉仕会」。「奉仕運動の推進」を目的に1953年に設立され、故吉田茂元首相が初代理事長を務めた。

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国立大運営費、学部ごと評価し交付金に差　文科省方針

　文部科学省は国立大学の運営費交付金について2010年度から、教育や研究の実績を学部ごとに評価して交付金の配分額に差を付ける方針だ。交付金を一律に年1％削減する現行制度を見直し、大学ごとに削減率を変えることも検討する。配分にメリハリを付けるとともに、成果主義を採り入れて大学間の競争を促す。

　運営費交付金は08年度予算で1兆1813億円。教員数や学生数で配分額がほぼ決まり、実績が反映されるのは一部にとどまっている。

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横領事件：ＦＩＦＡに支払い命令　スイスの裁判所

　国際サッカー連盟（ＦＩＦＡ）に絡む横領事件でスイスの裁判所は２日、ＦＩＦＡに対し訴訟費用として約１１万８０００スイスフラン（約１２２７万円）の支払いを命じた。

　ＦＩＦＡは、マーケティング代理店のＩＳＬが財政難であることを知りながら監査を怠り、ＩＳＬは７年前に倒産。ＩＳＬの役員６人は詐欺罪で立件されたが無罪となり、ＩＳＬを含む企業グループＩＳＭＭの幹部は横領罪で有罪となっていた。

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リニア中央新幹線：「品川始発」　ＪＲ東海、最終調整

　２５年に東京－名古屋間で「リニア中央新幹線」の営業運転を目指すＪＲ東海が、首都圏の始発駅を東海道新幹線品川駅（東京都港区港南）で最終調整していることが分かった。既存の新幹線や近郊路線との連絡がよく、近くの車両基地を活用できるメリットがある。起点が絞られたことで、中間駅をめぐる自治体の誘致合戦が本格化しそうだ。

　リニア建設に当たってＪＲ東海は、深さ４０メートルの大深度地下を基本にしているが、４０メートルに満たない場合や地上施設を建設する際は地権者の同意が必要となる。品川駅の地下なら、出入り口などの関連施設を地上に設けても、こうした手続きは不要だ。同社は既にボーリングによる地質調査に着手している。

　さらに、品川駅から南に約３キロ離れた品川区八潮には東海道・山陽新幹線の点検修復作業を行う東京第１、第２車両所（計約３８万平方メートル）があり、リニアへの活用も検討する。リニアの車両基地は計画ルートの沿線に確保する方針だ。

　都心部に拠点のなかったＪＲ東海は、０３年１０月の品川駅開業に合わせ、「のぞみ」の大量投入や全列車停車など、品川の拠点化を進めてきた。一方、始発駅の有力候補だった東京駅や新宿駅は、スペース確保や地権者の同意が困難と判断した模様だ。【斎藤正利】

＝＝＝＝＝＝＝＝＝＝＝＝＝＝

　■ことば
　◇リニア中央新幹線構想

　磁力で浮上するリニアモーターカーを時速５００キロで走らせ、東京－名古屋間を４０分で結ぶ。山梨実験線を１３年度までに延伸整備し、営業路線に転用する。総事業費５兆１０００億円はＪＲ東海が自己負担する。

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回収した偽装かば焼きから合成抗菌剤検出、神港魚類が公表
特集 商品偽装

　神港魚類は３日、回収した偽装かば焼きから、発がん性が指摘され、食品衛生法で養殖魚などへの使用が禁止されている合成抗菌剤「マラカイトグリーン」を検出したと発表した。

　発表によると、２日までに同社が回収した約１３トンの中から微量を検出し、神戸市保健所に届けた。同社はこれまでに約４９トンを販売し、一部が店頭で売られていた。

　神港魚類は農水省の検査直後の６月１９日から、販売した偽装かば焼きの回収を始め、安全確認検査を行っていたという。

　今回の偽装に関与したとされる魚秀の親会社「徳島魚市場」が輸入した中国産かば焼きからもマラカイトグリーンが検出され、徳島県が昨年７月、販売自粛を指導した。

　マラカイトグリーンを巡っては、昨年７月、魚秀の親会社「徳島魚市場」が輸入した中国産かば焼きからも検出され、約４トン分を回収。徳島県は同月、これらについて販売自粛を指導した。

　本来は焼却処分することが求められていたが、同社は今年６月、「適当な処分業者がみつからなかった」として、焼却しなかったことを明らかにしていた。

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「支持率低迷なら衆院選前に首相退陣も」公明・神崎前代表

　公明党の神崎武法・前代表は２日夜、千葉県市原市での党会合で講演し、「次の衆院選はいつになるか分からない。福田首相の支持率がこれから上がり、福田氏の手で解散になるのか、あるいは支持率が低迷して福田氏が代わり、次の首相で解散になるのか、それも分からない」と述べ、今後の内閣支持率の動向次第では、衆院選前に福田首相が退陣する可能性もあるとの見方を示した。

　与党の実力者が、公の場で首相退陣の可能性に言及したのは神崎氏が初めて。

　４月の衆院山口２区補欠選挙での自民党候補敗北などを受け、公明党内に「首相の支持率が低迷したままでは次期衆院選は戦えない」と不満が出ている。神崎氏の発言は、こうした党内の空気を代弁したものと見られる。