UK hedge funds wary of signing up to code -survey

UK hedge funds wary of signing up to code -survey
Mon Nov 17, 2008 10:11am EST

LONDON (Reuters) - Fewer than one in ten UK-managed hedge fund firms plan to sign up to the Hedge Fund Standards Board's best-practice code for the industry, according to a report from hedge fund consultants Kinetic Partners.

In a survey published on Monday of more than 100 funds managing more than half of UK-run hedge fund assets, Kinetic also found nearly one-fifth of funds said they will definitely not comply with the practice standards, while two-thirds have not yet decided.

The HFSB, which represents managers of about half the hedge fund assets in Europe, recommended standards on disclosure and governance in a bid to counter criticism that the industry is too opaque, and to stave off formal regulation.

On Thursday, some of the U.S.'s richest hedge fund managers including George Soros and Philip Falcone appeared before lawmakers and agreed that regulators should be given greater insight into how they make their money.

Kinetic said most of the funds it polled were strongly supportive of the standards, though none said they had been asked by their investors to adopt them and fewer than 5 percent had already signed up.

The code of practice was devised by the Hedge Fund Working Group, which comprised 14 leading hedge fund executives mainly based in London.

"It is essential that effective, appropriate self-regulation is applied to hedge funds," said Julian Korek, a member of Kinetic.

"The global hedge fund industry faces a time of acute stress, characterised by fund closures, increased redemptions, liquidations and litigation, and there will be pressure on governments to regulate more heavily."

Last month Antonio Borges, chairman of the HFSB, said financial regulators could be swayed into implementing potentially harmful rules in the wake of the credit crisis.

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Bank of England discussed 200bp rate cut

By Norma Cohen, Economics Correspondent

Published: November 19 2008 10:00 | Last updated: November 19 2008 21:31

The Bank of England’s monetary policy committee considered cutting rates by as much as two percentage points in early November, before voting unanimously to cut rates by 1.5 percentage points, the largest single move since it was created in 1997.

The discussions, detailed in the minutes of the meeting released on Wednesday, prompted economists to speculate that another cut of half a point might be on the cards when the monetary policy committee meets next on December 4.

Matthew Sharratt, economist at Bank of America, said the minutes showed the MPC “still believes it has a whole lot of unfinished business to get through in terms of rate-easing in coming months”.

Several economists suggested rates would go lower still next year. Peter Spencer, economic adviser to the Ernst & Young ITEM Club, forecast a half-point cut in December followed by more in 2009.

“Though Libor rates have come down in recent weeks, yesterday’s spread of 112 basis points remains very wide by historical standards. It is crucial that this spread continues to narrow in the coming months so that the full impact of looser monetary policy can feed through into the real economy,” Mr Spencer said.

Members were concerned by signs that the economy was beginning to slow sharply amid the contracting of credit, while the inflationary pressures so evident a few months earlier appeared to be abating, the minutes showed.

Although members believed a cut of at least two points was needed to prevent inflation falling below its target, they were concerned at how the markets would interpret a cut of that size. “Too large a surprise could pose upside risks to the inflation target if the resulting depreciation of sterling was excessive,” the minutes noted. “There was a risk that such a move might be misinterpreted as a change in the committee’s reaction function, which would damage the credibility of the target.”

But the minutes also show that despite the unanimous vote, there were disagreements about the extent and timing of any additional cuts.

Some members pointed to the government’s announced plans to bring forward spending in the hope of providing some fiscal stimulus to the economy. “Consequently, it would make sense for the committee to reassess the required scale of monetary easing after the chancellor’s pre-Budget report.”

On the economic climate, members noted several ominous developments including a further tightening in the availability of credit, a drop in output and a slowdown in the demand for consumer services and durables.

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Short View: Reading the renminbi

By John Authers

Published: November 19 2008 19:08 | Last updated: November 19 2008 19:08

One of the last key variables for world markets that responds to government control is the Chinese exchange rate. Many investors are now trying to read the mind of Chinese officials.

For years, China had allowed the renminbi to rise steadily against the dollar. This pleased the US and made Chinese exports less competitive, while removing heat from the Chinese economy.

That steady appreciation came to an abrupt halt in early July. Since then, despite all the titanic forces moving world markets, the renminbi-dollar exchange rate has barely moved.

But this applies only to the dollar. On a trade-weighted basis, the renminbi continued to rise, particularly against other Asian currencies. But there has been active depreciation against the Japanese yen.

This combination logically entails that the dollar must rise against other currencies and that the yen must do so even more. That in turn implies the end of the “yen carry trade” – in which investors borrowed in yen and parked in higher-yielding currencies. Given that the weak dollar was correlated with the strong oil price, it also implied the oil price would fall.

Indeed, the oil price started to fall, the dollar started to rise and the yen carry trade started to lose money, in July, just as China’s currency stopped rising against the dollar.

What theories explain this? One is that it was China’s best way to get oil prices down. Another suggests it is down to broader foreign policy – being a good neighbour by letting the currency rise against other Asian currencies. With the Chinese economy slowing down, it was a sensible move to administer some stimulus. Some investors believe it may have been a message to Candidate Obama, who wanted China to be named a currency manipulator.

Whatever the truth, a further implication is that oil could rise, and the dollar fall, once renminbi appreciation resumes.

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View of the Day: Dollar rally over?

By David Powell

Published: November 19 2008 15:32 | Last updated: November 19 2008 15:32

Is the dollar’s recent rally coming to an end?

David Powell, currency strategist at Bank of America, believes the dollar has lost several important sources of support.

The global shortage of dollar liquidity – one of the primary reasons for the US currency’s strength as the financial crisis escalated in September – has been sharply reduced by the extraordinary measures introduced by central banks to ease money market stress, he says.

Furthermore, the repatriation of the dollar, which prevented its retracement as tensions in the wholesale funding markets were reduced, may no longer provide the currency with much support moving forward.

Private sector flow data indicate the repatriation of foreign investments to the US is slowing sharply, Mr Powell says.

“A third factor behind the resilience of the dollar seems to have been the steady return offered by longer-dated US Treasuries, when compared with the sharp drop in German Bund yields. However, the fall in the euro against the dollar appears excessive even when compared to drop in the 10-year Bund-Treasury yield spread.

“In addition, a dollar retracement is likely to gain momentum from the pattern of seasonal weakness normally seen in December. As such, we affirm our year-end euro/dollar forecast of $1.38 and outlook for a return to $1.44 by the first quarter of 2009 before the pair resumes a more gradual sell-off.”

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Argentina backs expropriation of Aerolineas

By Jude Webber in Buenos Aires

Published: November 19 2008 17:11 | Last updated: November 19 2008 17:11

In a decision likely to intensify investor concerns about Argentina, legislators have recommended the expropriation of the debt-laden flag carrier, Aerolineas Argentinas.

The move, taken in Congress late on Tuesday, comes hot on the heels of government plans to nationalise the country’s private pension system, which many investors see as an ill-concealed asset grab to ease a $21bn debt-servicing bill next year and a severe blow to the security of property rights in Argentina.

The government says it is seeking to rescue the airline and guarantee services, many between far-flung Argentine cities not served by any other carrier. It is expected to move swiftly to return the troubled company to state ownership after nearly two decades in Spanish hands after the expropriation recommendation by a bicameral commission that monitors privatisations.

Aerolineas was sold to Spanish flag carrier Iberia in a 1991 privatisation. Marsans, a travel group, took over in 2001. But with the airline crippled by debts of $890m (£592m, €705m), paralysed by strikes and on the verge of collapse, Marsans agreed in July to sell the company and its smaller but financially healthier sister Austral to the government, at a price to be agreed by both sides. It has vowed to sue if the expropriation goes ahead.

The government rejected a valuation commissioned by Marsans from Credit Suisse, which put the two companies’ worth at up to $500m. The government sought a state court valuation, which established a negative value of some $600m for Aerolineas, which Marsans rejected.

Marsans complains that the July agreement, which has now technically expired, provided for an independent third valuation in case of disagreement. It says any valuation should take account of future cash flow and rejected as derisory the government’s latest, symbolic, offer to pay just one peso (30 US cents, 24 euro cents, 20p) for the airlines.

The government, which has been following a strategy of renationalising key assets, has been administering Aerolineas since July and has been pumping in an estimated 60m pesos a month to keep aircraft flying. Aerolineas has 80 per cent of the domestic air market but operates all of its 33 routes at a loss.

Marsans says it has invested $900m in Aerolineas and blames the government for keeping tariffs frozen and the airline’s six unions for multiple strikes since 2005 that pushed Aerolineas into the red. Unions say Marsans failed to make promised investments.

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Scrutiny body to rein in BBC Worldwide

By Ben Fenton, Chief Media Correspondent

Published: November 19 2008 02:00 | Last updated: November 19 2008 02:00

The scrutiny body for the BBC is moving to rein in the broadcaster’s commercial ambitions, its chairman said on Tuesday.

The BBC Trust will tighten the guidelines for the operation of BBC Worldwide, the corporation’s commercial arm, Sir Michael Lyons told MPs.

Sir Michael said his organisation, which replaced the board of governors as the supervisory body for the state-owned broadcaster, had heard the chorus of complaint from the commercial sector about the reach of BBC Worldwide.

“The trust has already decided that we need to tighten both the mission and the guidelines around BBC Worldwide,” Sir Michael told the House of Commons select committee on culture, media and sport.

“It is now an appropriate time to review the boundaries of [Worldwide’s successful activities] and we are of the view that they need to be modestly contained and the detail of that we will make public once we have finished our inquiries.”

The hearing was convened to take the BBC’s evidence on the activities of Worldwide, a separately run arm that last year had revenues of £919m ($1.4bn) and profits of £117m, which it returned to the public service arm of the corporation.

The broad and deep reach of Worldwide, which in addition to selling BBC programmes around the world runs its own channels, publishes magazines, furnishes advertising-supported websites and now owns the Lonely Planet travel guides, has caused alarm among commercial rivals.

Independent producers, newspaper groups, magazine publishers and rival travel businesses have all protested to the committee that an unrestrained Worldwide is a threat to their trade.

John Whittingdale, committee chairman, expressed concern at its “increasingly ambitious growth strategy”. “Do you see any boundaries to BBC Worldwide’s activity?” he asked.

Sir Michael acknowledged the concern of critics and said the trust had decided to launch an internal probe into the matter. It was “well advanced” but unfinished.

He said: “I can assure you they are going to be tested ... and I don’t think you are going to be disappointed with the conclusions.”

Later, Sir Michael’s officials said details of the new “boundaries and guidelines” would be published early next year.

Currently, investment by Worldwide has to meet four criteria: that it is commercially efficient, that proposals fit with the “public purpose” of the BBC, and that they do not “jeopardise the good reputation of the BBC or the value of the BBC brand” or distort the market.

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Dallying with Syria

Published: November 19 2008 19:35 | Last updated: November 19 2008 19:35

First France, and now Britain. The courtship of Syria proceeds apace. There is, of course, nothing wrong with engagement, as the Bush years have taught us. Ideally, however, robust diplomacy should be harnessed to a coherent strategy. That is what is lacking in the cosying up to Bashar al-Assad and his regime.

Mr Assad owes his re-entry into polite geopolitical society in the first instance to Nicolas Sarkozy. The Syrian leader became persona non grata under President Jacques Chirac after the 2005 assassination of Rafiq Hariri, the former Lebanese prime minister, which was linked by United Nations investigators to Damascus. Syria, above all, was on the US black list, not just for backing Hizbollah and Hamas but because the regime facilitated the passage of jihadis into Iraq – even allowing recruiting in full view of the US embassy in Damascus.

Western reappraisal of Syria began in May, after Mr Assad gave his blessing to the Doha agreement settling – at least for now – the stand-off Damascus had helped create in Lebanon. But he would, wouldn’t he? The deal gave Syria’s allies, led by Hizbollah, which had just overrun West Beirut, veto powers over the elected Lebanese government. The Syrian gambit is to obstruct, if it cannot prevent, the UN tribunal on Hariri’s murder.

Syria’s tentative reopening of talks on peace with Israel, through Turkish mediation, does address a strategic objective of enormous importance to the region. For the Assad regime, however, it looks like a get-out-of-jail-free card. Syria has not changed its regional behaviour.

Mr Sarkozy, nonetheless, invited him to a summit in Paris and sat him in the front row on Bastille Day. Mahmoud Abbas, who has taken great risks to try for peace with Israel to no avail, was sat at the back alongside a Somali delegate. The message this sends to the Middle East is disastrous. Now, David Miliband, UK foreign secretary, has journeyed to Damascus to call Syria a potential force for stability. Damascus is gleefully exploiting these vain attempts to peel Syria off from its alliance with Iran.

This tactic is an evasion. It avoids the need for a real strategy to deal with Iran. Tehran, empowered by the US upending of the Sunni order in Iraq, now holds high cards throughout the region. It has just played one: encouraging its allies in Baghdad to endorse a new deal on US troops in Iraq. That seems to respond to the election of Barack Obama, who called during the campaign for talks with Iran. The need is to get Iran interested in regional stability, not a dalliance with Damascus premised on an illusion.

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Double blow for Syria’s energy security

By Anna Fifield in Damascus

Published: November 20 2008 01:27 | Last updated: November 20 2008 01:27

The decline in crude prices has taken oil-producing nations by surprise, but few will be hurt as much as Syria, which is grappling with rapidly falling supply. The double blow has huge implications for the economy.

“Energy is a problem,” says Nabil Sukkar, an economist who heads the Syrian Consulting Bureau. “Our energy-generating capacity is below demand and our oil reserves are falling, while our gas reserves have not been developed rapidly enough.” Dwindling Syrian resources are often cited by analysts as one of the main reasons the country needs to end its international isolation, a process that has now started with improved ties with Europe. David Miliband, UK foreign secretary, was in Damascus this week in the latest sign of a thaw in ties between the west and Syria.

While fighting off pressure from the US and other western states over alleged interference in Iraq, Lebanon and the Palestinian territories, Syria has struggled for economic survival.

The energy sector comprises a large chunk of its economy and oil revenues have funded a quarter of the expenditure in the nation’s huge public sector. Five years ago oil comprised more than half of Syria’s $29bn in income, but last year it contributed only $3.8bn to revenues totalling $22bn (€17.6bn, £14.7bn).

The International Monetary Fund says Damascus will face unsustainable budget deficits by 2015 unless it can find new sources of income.

The decline in oil production – it fell by 6.5 per cent to 394,000 barrels a day last year and is set to shrink further – will also weigh on growth, which has averaged 4.5 per cent in the past three years, due mainly to oil.

The IMF estimates that the non-oil parts of the economy contracted 7.3 per cent last year, worse than the 6.4 per cent shrinkage in the previous year. In particular, Syria’s agricultural sector has been suffering from the worst drought in 40 years, which has put 1m people at risk of malnutrition and caused more than 100,000 to lose half their livestock.

But encouraging the non-oil sector and developing new sources of growth will be difficult unless the energy shortages are solved, as Syria lacks energy supplies to power new industries.

Sectors essential for industrialisation – such as cement and steel – are among the worst hit by energy shortages. The government now requires anyone wanting to build an energy intensive factory to set up a power-generating plant, a sizeable investment that is hindering some from expanding just when Syria needs such products for construction.

Electricity power stations, fuelled primarily by oil and natural gas, are unable to meet demand. New plants are being built, including some solar power stations funded with Gulf investment. However, Syria’s plans to add 3,000MW of power-generating capacity by 2010 have been hindered by delays.

Some analysts see the energy crisis as a chance to shake up the economy and accelerate restructuring.

“They are well aware of the need to increase non-oil revenues and have taken a series of measures in this direction,” says Nassib Ghobril, head of research at Lebanon’s Byblos Bank. “So the sudden drop in global oil prices might accelerate the implementation of reforms.”

Already, reform-minded politicians are using the need for change in the energy sector to introduce sensitive ideas to Syria’s “social market economy”.

Abdullah Dardari, deputy prime minister for economic affairs, suggests the private sector should play a greater role in electricity supply. “We are developing a private partnership policy to bring in investments in the energy sector,” he says. “The essential prerequisite for a sustainable energy policy is to have the correct prices.”

Electricity and oil have been heavily subsidised for decades. The government expects to spend $7bn on energy subsidies this year.

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Daewoo to cultivate Madagascar land for free

By Song Jung-a and Christian Oliver in Seoul, and Tom Burgis in Johannesburg

Published: November 19 2008 17:18 | Last updated: November 19 2008 17:18

Daewoo Logistics of South Korea said it expected to pay nothing to farm maize and palm oil in an area of Madagascar, half the size of Belgium, increasing concerns about the largest farmland investment of this kind.

The Indian Ocean island will simply gain employment opportunities from Daewoo’s 99-year lease of 1.3m hectares, officials at the company said. They emphasised that the aim of the investment was to boost Seoul’s food security.

“We want to plant corn there to ensure our food security. Food can be a weapon in this world,” said Hong Jong-wan, a manager at Daewoo. “We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”

Daewoo said it had agreed with Madagascar’s government that it could cultivate 1.3m hectares of farmland for free when it signed a memorandum of understanding in May. When the company signed the contract in July, it agreed to discuss costs with Madagascar. But Daewoo now believes it will have to pay nothing.

“It is totally undeveloped land which has been left untouched. And we will provide jobs for them by farming it, which is good for Madagascar,” said Mr Hong. The 1.3m hectares of leased land is almost half the African country’s current arable land of 2.5m hectares.

But Madagascar could also benefit from Daewoo’s investment in roads, irrigation and grain storage facilities.

However, a European diplomat in southern Africa said: “We suspect there will be very limited direct benefits [for Madagascar]. Extractive projects have very little spill-over to a broader industrialisation.”

Asian nations have increasingly looked to Africa to meet their resource needs in the past five years or so. China has been particularly aggressive in building up stakes in oilfields and mines on the continent, sometimes facing accusations of neo-colonialism.

But now the countries are moving from minerals and oil into food. Roelof Horne, who manages Investec Asset Management’s Africa fund, said he expected to see more farmland investments on the continent. “Africa has most of the underutilised fertile land in the world,” he said, though he cautioned that “land is always an emotive thing”.

Apart from Daewoo, an increasing number of South Korean companies are venturing into Madagascar, investing in projects from nickel mines to power plants. State-run Korea Resources recently signed a preliminary agreement with Madagascar to expand collaboration on resources development including mining projects for other metals.

Daewoo plans to start maize production on 2,000 hectares from next year and gradually expand it to other parts of the leased land. The company plans to plant maize on 1m hectares in the western part of Madagascar and oil palm trees on 300,000 hectares in the east.

The company plans to ship the bulk of the harvests back to South Korea and export some supplies to other countries. It is unclear if any of the production will remain in Madagascar, an impoverished nation where the World Food Programme provides food relief to about 600,000 people – about 3.5 per cent of the population.

The WFP, the UN agency in charge of emergency food relief, said more than 70 per cent of Madagascar’s population lives below the poverty line. “Some 50 per cent of children under three years of age suffer retarded growth due to a chronically inadequate diet,” it said.

The pursuit of foreign farm investments follows this year’s food crisis, which saw record prices for commodities such as wheat and rice, and food riots in countries from Egypt to Haiti. Prices for agricultural commodities have tumbled by about half from such levels but nations are concerned about long-term supplies.

Daewoo said it chose to invest in Madagascar because it remains relatively untouched by western companies. “The country could provide bigger opportunities for us as not many western companies are there,” said Mr Hong.

Daewoo plans to develop the arable land in Madagascar for farming over the next 15 years, and intends to provide about half South Korea’s maize imports. South Korea, a heavily populated but resource-poor nation, is the fourth-largest importer of maize.

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Food security deal should not stand

Published: November 19 2008 19:46 | Last updated: November 19 2008 19:46

Pirates are not the only source of concern off the African coast. The deal South Korea’s Daewoo Logistics is negotiating with the Madagascan government looks rapacious. Alas, it is but the latest brazen example of a wider phenomenon. In the name of food or energy security, cash-rich states are seeking to buy up natural resources in poor countries. While foreign capital and technology should be welcomed by countries with surplus resources, the terms and scale of the present deal raise serious questions.

Any agreement must ultimately be in the interest of the local population. The Madagascan case looks positively neo-colonial. If the deal is sealed with the vague promises by Daewoo Logistics being mooted, the Madagascan people stand to lose half of their arable land.

Instead of a commitment to share the benefits of higher productivity from foreign investment in agricultural technology and infrastructure in return for a fair lease value for the land, the South Korean firm looks set to get the land for a notional amount and mere talk of creating jobs. The Madagascan state may officially own the land in question, but small-scale farmers who have worked it for generations stand to lose their livelihoods. Much of the land, moreover, is currently forest. This potentially valuable resource in the fight against climate change would be destroyed for good.

Far from being a win-win deal, the benefits are also not clear for South Korea. One day, the Madagascan fields may produce up to half its corn imports. But consider what might happen in times of food scarcity. Madagascans would hardly stand by and watch as food is shipped from their ports. China has learnt this lesson. While happily exploiting mineral resources in Africa, China has backtracked from agricultural endeavours there.

Despite the easing of food prices, the issue of food security continues to haunt grain importers in the Middle East, North Africa and Asia. The price of food is often not the prime concern. Instead, the curb on agricultural exports by countries such as Argentina during the recent food shortage scare raised the spectre of importers not being able to lay their hands on produce at all.

Solutions to these problems exist that would benefit both exporters and importers while not reeking of neo-colonialism. Helping local farmers to raise productivity and sell surplus on world markets through loans from development banks would be one. But competing with them for scarce food is bound to fail unless old-style colonialism is resurrected. That day must not come.

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Welcome fades for wealthy nations

By Javier Blas in London

Published: November 20 2008 01:06 | Last updated: November 20 2008 01:06

The initial welcome given to rich countries’ investment in African farmland by agricultural and development officials has faded as the first ventures prove to be heavily weighted in favour of the investors.

The United Nations Food and Agriculture Organisation warned of such a trend when it said this year that the race to secure farmland overseas risked creating a “neo-colonial” system.

The FAO’s concerns were raised after Gulf companies farming on Sudanese land used only the country’s land and water, relying on overseas supplies of fertiliser, seeds, specialised labour and tractors. Similar examples were found in Pakistan.

“As details of the first overseas farmland investments emerge, the enthusiasm is fading away day by day,” said Alex Evans, a development expert at the Center on International Co-operation at New York University.

Below:
Arab states lead search for soil

He said that farmland investment still enjoyed strong support as “a generic proposition” as it could give poor countries access to capital, agricultural knowhow, jobs, infrastructure and markets for their crops. But Mr Evans warned that such investment needed to “present a clear benefit for the host country and not only for the investor”.

David Hallam, head of trade at the FAO, said farmland investments needed to have benefits for the host country not only in terms of generating jobs but also through “technology transfer, food security, poverty reduction and income growth through the multiplier effects of local sourcing of inputs. We would also have concerns about inappropriate models of agricultural production being introduced, which may have limited spillover benefits and even negative environmental impacts.”

The deal by South Korea’s Daewoo Logistics to lease arable land in Madagascar for 99 years with no upfront payment but only the promise to provide jobs has exacerbated concerns about lack of balance between investor and host.

The company would, however, have to make a significant investment to put the land into production, such as building roads, grain storage and irrigation systems, which would bring badly needed infrastructure to Madagascar, officials said.

Even so, agribusiness consultants and development officials said they were surprised by the fact that Daewoo would pay nothing for the lease, although they noted that investors in Ethiopia were obtaining long-term arable land leases at very low cost. Some east African countries, including Ethiopia, eager to attract investors and lacking oil or mineral resources, have leased their arable land at minimal cost in the hope that the resulting job creation and investment in farming infrastructure will be compensation enough.

The FAO plans soon to issue guides of how farmland investments could be drawn up to benefit both investors and host countries.

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Arab states lead search for soil

Middle East and north African countries have hitherto been the most active investors seeking overseas farmland, with Saudi Arabia, the United Arab Emirates, Egypt and Libya leading the group.

So far little is known about the details of their plans, but government missions have visited sites in Pakistan, Ethiopia, Sudan, Uganda, Angola, Kazakhstan, Ukraine, Thailand and the Philippines.

In the private sector, Al-Qudra Holding, an Abu Dhabi-based investment company, said in August it planned to buy 400,000 hectares of arable land in several African and Asian countries, while small Saudi companies are already farming in Sudan.

Asian investors had until now maintained a lower profile, with China ditching plans to invest in overseas farms to concentrate in raising its domestic production. South Korea and Taiwan are exploring deals mostly in Mongolia, Vietnam and Thailand, and Seoul has signed a deal for palm oil in Indonesia.

The Japanese private sector, particularly trading companies such as Marubeni, has avoided Africa, concerned about exporting crops from a hungry continent, and has concentrated on Brazil, the US, Uruguay and Argentina.

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UK auction of carbon permits brings in £54m

By Fiona Harvey and Jim Pickard

Published: November 19 2008 17:21 | Last updated: November 19 2008 17:21

The first auction of carbon dioxide permits netted the government £54m ($80.9m) on Wednesday as bidders fought for the right to emit greenhouse gases.

Almost 4m permits were sold in an auction that was four times over-subscribed. Previously, all of the emissions permits allocated to UK businesses under the European Union’s trading scheme were given out free.

The government has pledged to auction another 80m permits in the next four years, which is likely to bring in revenues of more than £1bn. The identities of bidders were not disclosed, but electricity producers were expected to be the main buyers as they had their free allocation of permits cut by 30 per cent.

The government hailed the auctions as a model they hoped would be followed by other European countries. “This is the most economic, efficient and effective way of [making companies pay for their emissions],” said Angela Eagle, exchequer secretary to the Treasury.

The free allocation of permits in the first phase of the scheme, from 2005 to 2008, enabled power companies in the UK and other countries to make windfall profits by raising electricity prices to cover the notional cost of having to buy permits, despite receiving them free. The government said on Wednesday the auctions should not result in further electricity price increases, as the cost of permits had already been factored in.

The UK is pushing for power generators to have to pay for all of their carbon permits in the third phase of the EU scheme, from 2013, arguing that electricity producers tend to be well-insulated from international competition.

Some green campaigning groups criticised the government for resisting calls to spend the auction proceeds on combating climate change. “Gordon Brown ... needs to kickstart a clean energy economy, and this money could be used to make it happen,” said Robin Oakley, of Greenpeace.

But environmentalists were cheered by a concession from the government on renewable energy. A late amendment to the climate change bill, which is expected to receive royal assent this month, makes it easier for small-scale renewable energy projects to obtain subsidies. Any project producing up to 5MW of electricity – equivalent to about three to four wind turbines – will qualify for a “feed-in tariff” rather than the current subsidy system. Under such tariffs, generators are guaranteed a higher price than normal for their electricity for several years.

Ministers had long rejected feed-in tariffs, despite a Labour rebellion over the issue.

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Russia shows it can play in US backyard

By Charles Clover and Benedict Mander

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

Dmitry Medvedev, Russia's president, will begin a tour of Latin America next week that has raised eyebrows in Washington, mainly because of his stop-off in Venezuela, which has been a thorn in side of US influence in the region under President Hugo Chávez.

Experts say the timing of the visit is not accidental. Following US support for Georgia in the brief war with Russia last August, they believe the visit is motivated primarily by a desire to show Moscow can meddle in a traditional US sphere of influence.

"The Russians want to demonstrate that two can play at this game," said Dmitry Simes of the Nixon Centre in Washington.

"Clearly, the visit is a gesture towards the US," he said. "While business is a consideration, and Russian clearly has business interests in Venezuela, I don't think you need to send President Medvedev for this. The trip is motivated by politics."

As well as helping with the building of Venezuela's first nuclear reactor - which Mr Chávez has repeatedly assured is "for peaceful purposes" - Mr Medvedev will oversee joint naval exercises in the Caribbean. He will also visit Brazil, Cuba and Peru.

Mr Chávez, who has visited Moscow three times this year, is deepening his alliance with Russia in a drive not only to challenge Washington's influence in the region, but also to reduce dependence on traditional sources of foreign investment and credit.

Venezuela hopes the establishment of a $4bn (€3.2bn, £2.7bn) bilateral bank to fund development projects - having already set up similar joint banks with Iran and China - will help offset difficult and expensive access to more traditional credit lines.

Mr Medvedev's visit will also give impetus to a string of deals signed earlier this month with Russian companies to develop Venezuela's energy and mineral resources. Plans are also under way to set up a direct Caracas-Moscow flight.

Few question the provocative nature of Venezuela's budding friendship with Russia, piqued by the US's support for Georgia in the conflict last August. It is part of an attempt by both countries to challenge US dominance.

But Venezuela's boisterous president wants to do more than just poke in the eye what he refers to as "the empire".

"One of the foundations of Venezuela's relation with Russia is its interest in securing investment and technology transfers, which capitalist companies aren't interested in helping with," said José Antonio Ejidio, of the Venezuelan foreign ministry's Institute of Diplomatic Studies.

After difficulties in attracting private investment to develop Venezuela's natural gas reserves - the largest in the continent - Russia's Gazprom began drilling for gas last week in the Gulf of Venezuela in a joint project with PDVSA

, Venezuela's state energy company.

Venezuela has a mixed record with international companies, which are hesitant to invest, not least since ExxonMobil and Conoco Phillips abandoned multibillion-dollar investments after the state took majority control of projects in the oil-rich Orinoco Belt last year.

The latest controversy blew up earlier this month when the government announced plans to take over one of Latin America's largest gold mines, operated by Canada's Crystallex. The government is now planning to develop the mine in a joint venture with Rusoro, a company with Russian backing and executives.

Although Venezuela's strategic partnership with Russia may help to mitigate the country's uncertain investment climate, foreign direct investment remains low. In 2007, Venezuela received just $600m in FDI, compared with $15.3bn in Chile and $37.7bn in Brazil.

Others question whether Venezuela's friendship with the US's biggest antagonists such as Russia might not spoil prospects for improved relations with a new administration led by Barack Obama.

John Walsh, an analyst at the Washington Office on Latin America, remains optimistic. "There's a good chance that they do improve, although that's not to say that Chávez will give up his aims to encourage a multipolar world," he said. "Bush was an easy sparring partner and worked wonders for Chávez politically. That won't be so easy with Obama."

Mr Ejidio said: "Like it or not, President Obama will have to deal with the fact that countries in Uncle Sam's backyard now have independent foreign policies and make their own minds up about who their most trustworthy partners are."

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China leader set to sign Peru trade deal

By Naomi Mapstone in Lima

Published: November 19 2008 02:00 | Last updated: November 19 2008 02:00

When Hu Jintao, China's president, arrives in Lima today for the Asia Pacific Economic Co-operation forum he will be accompanied by the biggest delegation.

Twelve ministers and almost 600 business leaders and support staff are escorting the Chinese premier, who is poised to sign a bilateral trade agreement that could see China overtake the US as Peru's main trading partner. The scale of China's delegation underscores expectations in the region about the country's future role.

"It is inevitable that China will become Peru's number one trading partner," said Juan F. Raffo, chair of Apec's business advisory council. "China now has 300m people that are comparable to US citizens in their consumption . . . That figure is growing. Their 1.3bn citizens, minus the elderly, are sooner or later going to jump the fence and consume at developed-world levels."

Luis Valdivieso, Peru's finance minister, told the Financial Times that China would be crucial in helping Peru to diversify its markets. "We are very concerned about the recession that is going on in the US [and] Europe and the slowdown in Japan. So for us, China becomes an important partner," he said. "The US will remain an important partner because we are also starting to implement a free-trade agreement with them. I think what is important is that we diversify."

China already has significant investments in Peru, including Chinalco's $2.2bn investment in the Toromocho copper mine.

Mercedes Aráoz, Peru's trade and tourism minister, said Peru was "very close" to signing the China trade deal and would also announce the start of talks with South Korea this week.

The deal with China would bring opportunities for Peru in agriculture and manufacturing. Exclusions and an agreement on customs co-operation would protect sectors such as textiles with dumping concerns, she said.

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Tibetan diaspora maps out way ahead

By Amy Yee in Dharamsala

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

They have come to this small Indian hill town from far corners of the world, from Toronto to Tennessee, New Delhi to New York, Moscow to Brussels, the hills of northern India and the tropics of the south.

Nearly 600 prominent Tibetan exiles representing a far-flung diaspora have flocked to Dharamsala, the seat of the government-in-exile, for an unprecedented "special meeting" to discuss the future of their homeland.

Monks in crimson robes, men wearing formal Tibetan chuba tunics and women in traditional dresses gathered for an opening ceremony on Monday where musicians blew Tibetan horns and beat large drums.

After the ceremony Tibetan activists, scholars, religious leaders, heads of cultural institutions and politicians in the government-in-exile mingled outside a school auditorium and sipped yak butter tea before starting week-long talks that could signal a turning point in Tibetan politics.

Gauging public opinion and creating a strong Tibetan mandate are the main goals of the forum. Envoys of the Dalai Lama, the spiritual leader, who were in Beijing for talks this month spoke bitterly about China's criticism that the exile government was not entitled to speak on behalf of the Tibetan people.

One perennial issue likely to be discussed is the Dalai Lama's moderate "middle way" versus a more forceful push for independence from China, as espoused by groups such as the Tibetan Youth Congress.

The Dalai Lama called for this meeting two months ago amid stalled talks with China, simmering tensions after violent unrest in Tibet this year, and the looming weight of the 50th anniversary of the spiritual leader's flight from Tibet next March.

Meanwhile, arrests of protesters have quietly gathered pace in Tibet and China after the Beijing Olympics, according to the Tibetan Centre for Human Rights and Democracy in Dharamsala.

In some of his most forceful remarks yet, the Dalai Lama has voiced deep dismay over inaction from Beijing and admitted his "middle way" push for autonomy under China has so far proved fruitless.

Leaders of the Tibetan exile government lay prostrate before a large photo of the Dalai Lama at Monday's opening ceremony, but the Nobel laureate is absent from the entire meeting in order to let delegates speak candidly about the thorny issues.

As tensions rise in Tibet and the 73-year-old Dalai Lama ages, many see the Tibetan community as at a crossroads. Some activist groups and the more radical youth congress are becoming impatient with his moderate approach and are demanding full independence from China. As dissent brews and concerns grow that future pro-Tibet demonstrations could erupt into violence, Tibetans are grappling to find common ground.

In spite of dissatisfaction, however, all groups give full support to the spiritual leader.

"The Tibetan issue is at a critical stage," says Karma Chophel, speaker of the exile government's parliament. "There is great turmoil all over Tibet. They resent the treatment meted out to them."

The delegates have been organised into 15 sub-committees that will discuss the broad theme of "what to do about the Tibetan issue". Tomorrow they will present their recommendations, which could be brought before parliament in the months ahead and enacted in policy.

Mr Chophel says that a telephone poll of 17,000 people in Tibet shows 8,000 will follow the Dalai Lama's lead, 5,000 believe the "middle way" should be changed and 2,000 say it should continue.

How that will translate into policy remains to be seen, but Tibet's exile government says it will follow the will of its people. "We are committed to a genuine democratic system. Democracy means to respect public opinion," says Samdhong Rinpoche, prime minister.

However, autonomy or independence is not the sole focus of talks. "This meeting is not just about independence and the middle way," says Tenzin Losel, a 28-year-old researcher from Dharamsala. "The way China has been dealing with Tibet is a no-win situation. We have to show them they have to be concerned with us. They just can't ignore us."

Thinlay Tharchin, a 45-year-old businessman representing Russia's Tibetan community, says his committee had so far discussed how to make connections with Chinese people, how to push for the release of political prisoners and how to unite under the Dalai Lama's leadership.

Whatever results are presented tomorrow, the meeting could at least revitalise the Tibetan movement.

Lhadon Tethong, executive director of Students for a Free Tibet in New York, says the meeting is "hugely important because people are committed to Tibetan democracy in exile. There may be differing opinions but people are still committed to a resolution of this issue."

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Prospect of car industry aid 'remote' after corporate jets blunder

By Daniel Dombey in Washington

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

Democratic legislators said yesterday that chances were remote of approving $25bn (£17bn) in new aid for the troubled US car industry, as congressmen ridiculed the chief executives of the big three for travelling by corporate jet to ask for support, reports Daniel Dombey in Washington .

"There's a delicious irony of seeing private luxury jets flying into DC and people coming off them with tin cups in their hands, saying that they're going to be trimming down and streamlining their businesses," Gary Ackerman, a Democrat from New York, said at a House of Representatives hearing with the heads of the three companies.

"It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo . . . Couldn't you all have downgraded to first class or jet-pooled to get here?" he asked Alan Mulally of Ford, Robert Nardelli of Chrysler and Rick Wagoner of General Motors.

In light of reports that the three executives travelled to Capitol Hill in three separate corporate jets, congressman Brad Sherman asked them during the hearing yesterday to raise their hands if they had flown commercially. None did.

The attention garnered by the executives' personal expenses has further diminished support on Capitol Hill for Democratic plans to grant the industry a $25bn "bridge loan" in addition to a $25bn programme to make the sector more energy efficient.

But the party lacks the support it needs from Senate Republicans to pass the measure without procedural wrangling.

Yesterday Chris Dodd, one of the chief Senate champions of granting aid, described the prospect of a bill as "remote".

The executives argued that without the aid the industry could be fatally stricken, with disastrous effects for the economy.

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Call for ambitious German stimulus

By Ralph Atkins in Vienna, Tony Barber in Brussels and Bertrand Benoit in Berlin

Published: November 19 2008 23:35 | Last updated: November 19 2008 23:35

Germany should launch a much more ambitious economic stimulus package as part of a concerted European response to the gathering economic crisis, a European Central Bank policymaker has urged.

Ewald Nowotny, Austria’s central bank governor, also called for an acceleration of eastern European aid programmes in an interview with the Financial Times, in what amounts to one of the boldest calls yet by a central banker for more aggressive action at a time when much of the continent is already in recession.

The European Commission is preparing to announce an EU-wide economic recovery programme next Wednesday.

EU diplomats said on Wednesday that the Commission would invite the 27 EU member states to launch fiscal stimulus packages of their own, but these would be determined by each government’s budget situation.

In line with Mr Nowotny’s comments, the Commission is expected to propose faster spending on aid for poorer regions of the EU, especially central and eastern Europe.

There would also be measures for the car and construction industries. However, whatever is decided must be approved by EU leaders at a meeting on December 11-12.

Germany’s economy minister, Michael Glos, said during a television appearance on Wednesday that the 27 states would be each asked to contribute 1 per cent of their gross domestic product to a growth package that would be worth “about €130bn” overall.

Draft German budget figures for 2009 show the federal and regional governments have earmarked €4bn to cover the cost of the 15 growth-boosting measures steps it adopted two weeks ago, far less than 1 per cent of GDP. The German government later made it clear that Berlin’s commitment would include measures the government had already adopted, which it argues amount to €32bn over two years, or more than 1 per cent of GDP.

Mr Nowotny said Germany could afford a growth-boosting package equivalent to 2 per cent of the country’s gross domestic product – or about €50bn. “There is really a lot of room for manoeuvre especially in Germany, so I think you should use it,” he said.

At the same time, he suggested European Union regional aid could be frontloaded in eastern Europe.

Compared with other countries such as France and Italy, Germany’s public sector deficit remains modest as a share of GDP. In Berlin, however, calls for a bigger fiscal stimulus have prompted warnings about the rising burden that has already been imposed on public finances by the economic slowdown.

Although there is concern in Berlin at the rapid deterioration of the German economy, the government is wary of abandoning its budget-balancing plans after having to postpone its goal for eradicating the federal deficit within two years.

There are also doubts about whether a large-scale fiscal stimulus would boost consumption. Officials say consumers would be tempted to channel nearly all their additional income from lower taxes or higher benefits into savings.

In private, officials point out that few European governments apart from the UK have actually delivered on promises to support their economies in the hope, the officials suggest, that Germany would move to boost consumption first.

Germany’s federal budget deficit could rise to almost double the government’s original target next year, coalition politicians warned Wednesday.

The German parliament’s budget committee is preparing to finalise a revised draft 2009 budget in the so-called “cleaning session”, an all-day meeting of MPs and finance ministry officials, on Thursday.

The sharp rise in federal borrowing from an originally planned €10.5bn to between €16bn and €18bn means the government is unlikely to hit its new target of balancing the budget by the end of the next parliament in 2013. Finance ministry documents distributed to members of the budget committee ahead of today’s session show the government now expects a €10bn deficit in 2012.

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Berlin resists growing pressure to spend its way out of recession

By Bertrand Benoit in Berlin

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

Germany is resisting pressure to follow the US and other European economies in spending its way out of the recession.

Politicians and civil servants around Angela Merkel, chancellor, have no shortage of arguments as to why going down the Keynesian route would be wrong.

They claim that, given Germans' tendency to save rather than spend, any extra cash in higher benefits or lower taxes financed by borrowing would end up in bank accounts.

"We had an 11 per cent savings rate. Now it's risen to 13 per cent," says a chancellery official. "Given the current uncertainty, you can expect any additional income to go straight into higher savings."

Another argument, mentioned by Peer Steinbrück, finance minister, is that while a fiscal boost could help Germany, Europe's largest economy is so big it would have to be large enough to be beyond the reach of Berlin's public coffers.

This is why the government has favoured what it calls "leverage" measures: limited subsidies and incentives designed to trigger a disproportionate rise in investments and consumption.

The package of 15 growth-boosting measures adopted by the cabinet two weeks ago may only be worth €12bn (£10bn, $15bn) over two years - minuscule by international standards - but the government expects it to generate €50bn in investments and consumption over the same period.

One final argument against a classic fiscal boost is that it would fail to tackle the main factor behind Germany's recession - the collapse in demand for German exports.

"This is a fallacious argument," says Dirk Schumacher, economist at Goldman Sachs. "The German economy is imbalanced, with no consumption and high exports. It is a mirror image of the US and very much like China. This is precisely why we need to encourage consumption now."

There is a political explanation too for Berlin's restrictive fiscal stance. While the government opposes a fiscal boost, legislators are open to loosening the public purse, but they cannot agree on how. Ms Merkel's Christian Democratic Union this week called for substantial income tax cuts. The Social Democratic party, junior partner in the grand coalition, favours infrastructure investments.

A general election due in less than a year and a political debate growing more polarised means they are unlikely to strike a deal.

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Bosnia tensions and nationalist rhetoric drive EU allies to seek control

By Tony Barber in Brussels

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

European, US, Russian and other representatives responsible for preserving Bosnia-Herzegovina's stability started talks yesterday on whether to replace the international controls that have kept order since the 1992-95 civil war.

A rise in political tensions and nationalist rhetoric among the main Bosnian Muslim and Bosnian Serb political parties is causing alarm in the European Union, which fears Bosnia's weak central government institutions may not hold up under the pressure.

As a result, Javier Solana, the EU's foreign policy chief, and Olli Rehn, the enlargement commissioner, are proposing that the international office that has supervised Bosnia since 1995 should be shut next year and replaced with a reinforced EU presence.

Russia is sympathetic to the idea, as are the Bosnian Serbs, who have long objected to international supervision.

US officials want the EU to take more responsibility for what they see as a fundamentally European security problem but they are also anxious not to see Bosnia descend into chaos and land Barack Obama, the president-elect, with another international crisis after he takes office in January.

Bosnia was divided under the US-brokered Dayton peace accords of 1995 into a Serb Republic and a Muslim-Croat federation, each with powers of self-government and each occupying about half the country. Dayton handed overall supervisory authority to an international high representative, currently Miroslav Lajcak of Slovakia, whose job is to hold the country together and stop attempts to undermine the 1995 peace deal.

According to an EU official, the bloc should not assume more responsibility for Bosnia unless the European authority that replaces the international high representative has "residual powers of last resort" - such as the right to intervene if Bosnia's unity is in danger.

The present arrangements have prevented a return to war but have done little to remove the poison between Muslims and Serbs.

EU officials say the atmosphere has deteriorated this year, partly because of Haris Silajdzic, a Bosnian Muslim leader who advocates the Serb Republic's abolition, and Milorad Dodik, his Bosnian Serb rival, who occasionally threatens to hold a referendum on secession from Bosnia.

Progress was visible this month when leaders of the country's three nationalities agreed on steps to change Bosnia's constitution and on the desirability of holding a census by 2011.

But EU officials say Bosnia's politicians have yet to show the mutual tolerance and commitment to undertake hard reforms needed to put the country firmly on the road to EU membership.

Bosnia signed a pre-accession agreement with the EU in June, but the dream of joining the EU in 2014 - the 100th anniversary of the assassination in Sarajevo of the Austrian archduke Franz Ferdinand, the event that triggered the first world war - is now beyond reach.

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Insurers warn against weaker reform

By Nikki Tait in Brussels

Published: November 19 2008 02:15 | Last updated: November 19 2008 02:15

Leading insurers were on Tuesday trying to prevent a radical reform of insurance supervision across the EU from being watered down, warning that this would contradict priority measures that won broad political support from world leaders at last weekend’s G20 summit.

But as diplomats meet on Wednesday to discuss the issue in Brussels, the possibility of a compromise deal – under which the so-called “group supervision” proposals would be very substantially weakened – appeared to be looming, with both the French and Germans thought likely to give this support.

The question would then be whether countries – such as the UK – which do not want to see the proposals diluted – could muster sufficient votes to block such a move.

The so-called “Solvency II” legislation involves sweeping new capital rules for insurers, due to come into force in 2012. One of its key planks is the idea of “group supervision” for companies with cross-border operations. This would establish a lead supervisor in an insurer’s home state, which would set capital requirements across the whole insurance group. The lead supervisor would then work in co-operation with local regulators in the states where the group had subsidiaries.

But the plan has faced trenchant opposition from some member states which fear they will play second fiddle to regulators in larger countries, such as France, Germany and UK, where many insurers are headquartered.

The current French presidency has been struggling to find a compromise which would keep the legislation moving forward – the latest suggestion being that the “group support” regime, designed to underpin group supervision in practical terms, could be lost.

That prospect on Tuesday caused Britain’s Association of British Insurers to send an urgent letter to Lord Myners, City minister at the UK Treasury, warning that there was a danger of a “worst of all worlds” outcome.

“As a complete negation of the move to cross-border supervision by colleges (of supervisors) that was key to the G20 discussions in Washington DC last weekend, there seems an acceptance by some member states of a limited traditional regulatory system, circumscribed by national solo supervision,” the ABI claimed.

“As events in banking markets have shown, such an approach is hopelessly outdated, so why allow it to become the basis of a 21st century supervisory framework for Europe?”,

The ABI letter echoes a similar appeal from the CEA, the European insurance and reinsurance federation, to the French presidency and European Commission last week.

In its letter, the CEA claimed that the group support regime was “crucial to ensure that European insurers can compete in a global economy while policyholders are granted a high level of protection”.

If a watered-down compromise on supervision is agreed at Wednesday’s meeting the matter could come back on to EU finance ministers’ agenda in early December for approval.

But there would then be the problem of significantly different proposals emanating from the council and parliament, and possibility of a prolonged hiatus next year as further negotiation took place.

“Wednesday’s vote on Solvency II is the first real test of how the EU will rise to the G20 challenge of addressing the need for cross-border supervision and adopt group supervision. The alternative – carve it out and duck the issue – will be a clear case of Europe yet again having fine words and few actions,” said Peter Vipond, the ABI’s director of regulation, on Tuesday.

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Measures that could end the drought

By Jean Eaglesham and George Parker

Published: November 19 2008 23:39 | Last updated: November 19 2008 23:39

The multibillion-pound package of support for small business that Alistair Darling, the chancellor, will unveil on Monday will be a mix of initiatives on bank lending, insurance and tax breaks. The motivation is simple: the credit drought is causing serious damage.

In theory, Gordon Brown solved the crisis in October with the £400bn bail-out. Ministers have laboured to convince banks to restart lending to businesses, stop axing overdrafts and loans and cease raising credit costs unilaterally for seemingly healthy companies.

Mr Brown told MPs on Wednesday: “We are meeting banks and building societies almost every second day to consider the technical issues and other reasons why the lending has not happened in some cases. We are ready to take further measures ... ”

Below:
The scheme that minds the gap

The need for such “further measures” is being driven home by irate businesses in calls and e-mails to MPs about the banks’ stance. The 4.5m-strong small business sector was being “starved of finance” with one in three companies struggling to get credit, the Federation of Small Businesses said this week. The British Chambers of Commerce said hundreds of businesses could be “bust by Christmas”.

The pre-Budget report initiative for small businesses will stress the vital importance of the sector. But business will be more concerned about ministers’ ability to convert their exhortations to bank executives into actual lending by risk-averse branch managers. The package is expected to include:

Extension of Small Firms Loan Guarantee Scheme

The criteria for getting state-backed loans will be relaxed. Ministers are looking at measures to cover short-term finance as well as loans – the BCC has called for a temporary extension to cover overdrafts. But the chancellor is wary about giving a blanket taxpayer guarantee to all business lending, not least because of European Union state aid rules.

“Some businesses will not have a problem during the downturn,” said one official. “It’s not obvious that we could justify underwriting lending to companies that could borrow anyway.”

Fresh bank undertakings

Lord Mandelson, the business secretary, is pressing the banks to agree tougher standards governing their relations with small business. Ministers would like commitments on issues such as the amount of notice given before the terms of credit are changed.

Particular pressure is being applied to the three banks backed by the £37bn taxpayer-funded recapitalisation deal. Ministers are looking for some lever to ensure that the undertakings from Lloyds TSB, HBOS and Royal Bank of Scotland to maintain the “availability” of lending at 2007 levels have some real impact. Mr Brown’s office said: “We need the banks to fulfil their commitments under the terms of the recapitalisation programme. We have to make sure that happens.”

European-backed loans

The chancellor is likely to unveil more details about which banks are ready to start providing loans from the European Investment Bank, under the deal announced this autumn to bring forward £4bn of lending over four years.

Credit insurance

Lord Mandelson is looking at ways to ensure the sudden cull of credit insurance cover does not bring down supply chains and send businesses to the wall. The withdrawal of insurance protecting suppliers against the risk the buyer does not pay for goods and services bought on credit is hitting thousands of companies.

Export credit

The Export Credits Guarantee Department is expected to extend the insurance it provides for overseas business contracts to those of less than five years. Ministers fear the withdrawal of private sector insurers from the market for contracts of less than two years is exacerbating cashflow pressures.

Procurement

The PBR will include the recommendations of Anne Glover, commissioned to investigate how small business can access more of the £150bn spent each year by the state on goods and services. The venture capitalist has been asked to examine whether the public sector should have a target of awarding 30 per cent of its business to small enterprises in the next five years.

.............

The scheme that minds the gap

The Small Firms Loan Guarantee scheme has helped about 100,000 businesses with loans totalling £5bn since it was set up in 1981 .

The scheme has been seen as crucial to closing the “funding gap” – the inability of tens of thousands of the UK’s 4.5m small businesses to get bank loans. The scheme aims to fill this gap by offering a government guarantee for 75 per cent of the debt, in return for the company paying an annual premium of 2 per cent of the outstanding balance on the loan to the Department for Business. This state-backed support is aimed at small businesses – turnover up to £5.6m – that have a viable business proposition but lack the security to get commercial finance. Loans of up to £250,000 are offered for business development.

The principles behind the scheme attract broad business and political support; but its history has been somewhat chequered, particularly of late.

Businesses trading for more than five years were excluded from the scheme in December 2005, amid concerns about high rates of default. But the five-year rule led to a collapse in lending in 2006, and the restriction being axed in this year’s Budget.

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Failure to keep contracts fuels shipping crisis

By Robert Wright in London and John Burton in Singapore

Published: November 20 2008 02:00 | Last updated: November 20 2008 02:00

The dry bulk shipping industry's crisis is being fuelled by unprecedented levels of contract breaches, an industry summit heard yesterday.

According to people present at the London meeting, arranged by the Baltic Exchange, there were widespread complaints about breaches of contracts both by industry customers and by some ship operators.

Industry confidence relies heavily on the assumptions parties will abide by contracts even when conditions move sharply against them. Rates to charter ships have collapsed in the last few weeks, which has led customers with contracts to charter ships at higher rates to break them and hire ships at the new, lower prices. Capesize vessels, the largest kind, which cost an average $233,988 per day to hire at the market's peak in June, now cost just $3,691 per day.

The meeting, which was closed to the press, heard some customers had claimed to be unable to honour contracts of affreightment - agreements to give certain shipowners set levels of cargo per year - because there was nothing to ship in the current difficult economy. However, they had then chartered other shipowners' vessels at far lower prices.

One shipowner referred to the situation as "war", one participant said, while several participants said a shipowner had suggested the sector stage a co-ordinated 25 to 30-day strike to remind customers of their importance. That suggestion was immediately dismissed.

The crisis has been particularly acute because shipowners often charter vessels to companies that then charter them on, raising concern about possible defaults by other parties in such complex transactions.

The meeting considered the possibility of setting up a central clearing-house to clarify parties' responsibilities in such transactions.

The crisis facing global shipping was further underlined yesterday when Singapore's Neptune Orient Lines, the world's number seven container shipping line, warned about the severity of the crisis facing the sector, saying the "severe and prolonged downturn" could last several years.

The line, which had already said it would slip into loss in the fourth quarter and has started to lay up ships, announced it would cut 1,000 jobs, or 9 per cent of its workforce, and leave its US headquarters in Oakland, California.

"The negative conditions we are seeing in the market place are unprecedented in our industry's history," said Ron Widdows, chief executive. "What we are seeing goes beyond a normal cyclical downturn."

NOL, like other container carriers, is heavily exposed to European and North American consumer demand because its main business is to ship Asian-manufactured consumer goods to the world's most developed economies. Its warning comes only days after Denmark's AP Moller-Maersk, owner of by far the world's largest container line, announced an unprecedented fall in volumes on the key Asia-Europe route.

Most of NOL's job cuts will be in North America, where the company's cost base is highest. The most symbolic announcement is the plan to close the Oakland US headquarters and move to a cheaper location. The downtown office block was the historic headquarters of American President Lines, which NOL bought in 1997. NOL's ships still operate under the APL brand.

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Daily Mail profit falls 9 percent

Reuters

Newspaper group Daily Mail & General Trust posted a 9 percent fall in full-year pretax profit, and said its consumer media units were being affected by the challenging economic environment.

The publisher of the Daily Mail, Mail on Sunday and London's Evening Standard reported pretax profit of 262 million pounds on Thursday, down from 288 million pounds, on revenue that was 3 percent ahead at 2.31 billion pounds.

Adjusted earnings per share fell 3 percent to 47.9 pence, it said.

"Although the worsening economic conditions had an adverse impact on the newspaper and property businesses, our B2B divisions continued to perform well," said Chief Executive Martin Morgan, who took the helm last month.

"The short-term outlook remains difficult and we are taking decisive action to defend profitability."

The company said it had put revenue and cost initiatives in place worth nearly 100 million pounds.

Daily Mail said in September it saw its results at the low end of expectations, with the market forecasting pretax earnings of 257 to 279 million pounds, excluding amortisation and impairment of intangible assets and exceptional items.

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U.S. financials need at least $1-1.2 trillion -analyst

Reuters

(Reuters) - The U.S. financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said.

Eight financial companies -- Citigroup Inc, Morgan Stanley, Goldman Sachs Group Inc, Wells Fargo & Co, JPMorgan Chase & Co, American International Group Inc, Bank of America Corp and GE Financial -- are in greatest need of capital, he said.

"Debt or TARP capital is not true capital. Long-term debt financing is not the solution. Only injections of true tangible common equity will solve the current crisis," he said in a note dated November 19.

Currently, the U.S. financial system has $37 trillion of debt outstanding, he noted.

Combined, these eight companies have roughly $12.2 trillion of assets and only $406 billion of tangible common capital, or just 3.4 percent, the analyst said in his note to clients.

Miller said these institutions need somewhere between $1 trillion and $1.2trillion of capital to put their balance sheets back on solid ground and begin to extend credit again, given their dependence on short-term funding and the illiquid nature of their asset bases.

Since the summer of 2007, Wall Street has been hammered by a sharp pullback in debt markets, which began with mortgage woes and escalated into a credit crisis, slowing economic activity around the world.

RECAPITALIZATION NEEDS

The bulk of the capital will have to come from the U.S. government, Miller said. The government needs to take the initial steps to begin the process, and private capital and earnings can finish the job.

"The quicker the government acts, the sooner the financial system can work through its current problems and begin to supply credit again to the economy," he said.

The U.S. government must declare a bank-dividend holiday and convert the TARP funding into pure tangible common equity to get the credit markets functioning.

Also, the government should support a centralized CDS clearinghouse that backstops all transactions and eliminates the cross-default problem, the analyst said.

Top U.S. financial regulators said on Friday they were working on developing a centralized clearinghouse for credit default swaps, the exotic instruments that have exacerbated the financial crisis of recent months.

The weakened economy and global credit crisis had pushed the U.S. government into bailing out companies including insurer AIG, investment bank Bear Stearns, and mortgage companies Fannie Mae and Freddie Mac.

Regulators have also shown a willingness this year to intervene when banks appeared to struggle. They pushed Wachovia Corp into finding a buyer and arranged for JPMorgan to buy Washington Mutual Inc's banking assets after worried customers began to yank deposits.

Miller, however, said it could take three to five years for the financial system to fix itself completely, with adequate capital and appropriately priced interest rate and credit risk.

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Malta's Refugee Influx Makes It EU's Back Door `By Accident'

By Blanche Gatt

Nov. 19 (Bloomberg) -- Tesfay Bekurezion Gebredngle paid $1,300 to make the clandestine boat trip from North Africa to Sicily. Instead, the Eritrean refugee was taken to Malta, an island a thousandth of Italy's size.

``We saw lights in the distance and the captain told us it was Italy,'' said Gebredngle, 30, who braved the Mediterranean Sea only to fall 60 miles short of his destination. ``As we got closer, a patrol boat came out of the darkness.'' The Maltese coast guard arrested the 34 passengers and crew.

Malta, which joined the European Union in 2004, has become a dumping ground for unsuspecting refugees trying to reach the continent. They are left by their traffickers because the island is the first point reached by boats from war-torn parts of Africa. Under EU rules, Malta cannot refuse anyone who may qualify for international protection.

Now the Maltese are asking their EU partners to help absorb the wave of immigration. The government is lobbying larger countries to provide financial and diplomatic aid to implement an immigration agreement signed by all 27 EU leaders on Oct. 16.

The accord allows for easier relocation of people granted international protection and speedier repatriation of migrants who don't qualify, said Carmelo Mifsud Bonnici, Malta's minister of justice and home affairs.

``Malta has to have more help, better help,'' said Joanna Drake, the EU's chief representative in the capital, Valetta. ``The problem of illegal immigrants in Malta is growing bigger and the present remedies are not stemming the influx.''

December Meeting

The foreign ministers of Malta, Italy and Libya, a departure point for African immigrants, plan to meet in December to discuss the matter, the Maltese government said on Oct. 29.

Malta now accepts about two-thirds of arrivals seeking protection, triple Europe's average rate. A record 2,522 immigrants arrived in the country from January to September, the government said. From 2002 to 2007, Malta received about 6,900 immigrants and granted residence to about half.

Malta has a population of about 400,000 living on 316 square kilometers (122 square miles), one-fifth the size of London. It ``has by far the highest national population density figure for any EU member state,'' the Ministry of Justice and Home Affairs said in an e-mailed response to questions. ``The country has a small labor market prone to saturation.''

Since Malta joined the EU, protected status has become a ticket to entry into the rest of the bloc. The island also entered the borderless so-called Schengen zone on Jan. 1, allowing Maltese citizens, legal residents and visitors with valid visas to travel without passport checks in 22 EU countries to as far east as Poland and as far west as France.

Accidental Tourists

When someone is granted legal status in Malta, he or she can apply for a 90-day travel permit to go anywhere else in the EU. Many don't come back, according to Neil Falzon, head of the United Nations High Commission for Refugees in Malta.

``All of them want to go Europe,'' said Monsignor Philip Calleja, head of the Emigrants' Commission, a church group that assists migrants. ``They end up in Malta by accident.''

Obtaining protection from persecution at home can take as long as 18 months, with migrants held in Maltese detention centers for at least part of that time. They must save up enough money to buy a ticket to somewhere else before they can get the travel permit. Some then land back in Malta.

Abdi Abdul Rashid left Mogadishu, Somalia, with his wife almost three years ago to escape civil war. They crossed Ethiopia and Sudan mainly by foot before arriving in Benghazi, Libya, 18 months later. They were arrested at the Libyan border.

Drowned Escapees

A year later, after working to save the $600 to pay for a boat to take them to Italy, they landed in Malta when their trafficker insisted crossing the rest of the way was too dangerous. At least 36 corpses have been found off the coast of Malta since June.

``We wanted to go to Europe because it is impossible to live in Somalia,'' said Rashid, 22. ``Somalia is without a government. You can't go to school, you can't get a better life. You can't go out of your house or some people will kill you.''

More than 1,000 of the people in this year's influx come from Somalia, with those from Nigeria, Mali, Ivory Coast, Ghana and Eritrea making up the bulk of the remainder, according to the Ministry of Justice and Home Affairs.

Rashid has spent nine months in Malta, six weeks of it in detention. He's waiting to see whether he and his wife and newborn baby will be allowed to stay in the EU. He now lives in a center for immigrants, living off a weekly stipend from the government and picking up whatever odd jobs he can.

Odd Jobs

Gebredngle spent 18 months crossing North Africa from Eritrea before heading to Europe. He had been given money by his father, the owner of two hotels and a supermarket chain, to make the journey and avoid being drafted into the military, he said.

After being apprehended by the Maltese coastguard, Gebredngle spent six months in a detention center. Released to a low-security center, he got a job working in Sirens bar in St. Paul's Bay during the summer tourist season.

``I am doing whatever odd jobs I can to save money for the boat to Italy,'' Gebredngle said, in between waiting on tables. ``I have to find a way there.''

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American Express, Big 3 latest to come begging

BY HELEN KENNEDY
DAILY NEWS STAFF WRITER

Wednesday, November 12th 2008, 9:58 PM

Two more pillars of the American economy are coming to Washington hat in hand: American Express and Detroit's Big Three.

The struggling New York-based credit giant reportedly wants a $3.5 billion bailout. American Express got permission to become a bank holding company this week, making it eligible for a piece of the $700 billion bailout.

American Express has been hurt by rising defaults amid the housing crisis. Last month, it announced it would cut 7,000 jobs after a 24% drop in third-quarter profits.

Meanwhile, the Big Three automakers' woes were rising and Washington talk of a bailout of Detroit was getting more urgent.

GM, Ford and Chrysler bet heavily on trucks and SUVs just in time for gas price hikes and the credit crunch to kill sales.

However, the carmakers employ hundreds of thousands of people, support a million retirees and have a vast economic footprint, from advertising to health care. Analysts say a Big Three collapse would cost the economy 3 million jobs and $60 billion in one year.

Treasury Secretary Henry Paulson, the keeper of the Troubled Asset Relief Program bailout, snapped his wallet shut yesterday on the carmakers. "The intent of the TARP was to deal with the financial industry," he said.

House Financial Services Committee Chairman Barney Frank plans to introduce a bill next week that would give the Big Three $25billion in loans from the rescue fund.

"A collapse of the American automobile industry would be the worst possible thing that could happen at a time when we are already weakened," said the Massachusetts Democrat.

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ＭＫＳ、運営中の主力ファンドの解散検討

　国内ファンド運営大手のＭＫＳパートナーズが、運営中の約600億円の主力ファンドを解散する検討に入ったことが20日、明らかになった。既に新規の投資は凍結しており、今後投資先の株式売却を進めたうえで、来年にも投資家に資金を分配する。

　世界的な金融危機により、国内外の投資ファンドは資金調達が難しくなっており、新たな投資も手がけにくくなっている。国内最古参のＭＫＳのファンド解散は、ファンド業界の苦境を象徴する動きといえそうだ。

　ＭＫＳの現在のファンドは2004年に運用を開始。旧カネボウから事業を引き継いだクラシエホールディングスや靴下メーカーの福助などに投資してきた。(15:22)

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30代後半フリーター支援　厚労省、増加受け12月から

　厚生労働省が検討していた30歳代後半のフリーター支援策が12月から動き出す。試験雇用した企業に補助金を支給するほか、企業が試験雇用後に正社員として雇えば奨励金を支給する。これまで30歳代前半までの支援策はあったが、就労形態の不安定なフリーターの「高齢化」が進んでいることに対応する。

　厚労省は19日開いた労働政策審議会（厚労相の諮問機関）の職業安定分科会に施策の概要を報告した。具体的には、30歳代後半のフリーターを試験雇用した場合に企業に対して月額4万円を3カ月間支給。その後、正社員にすれば大企業向けに30万円、早期離職者が多い中小企業向けには15万円上乗せし45万円とする。30歳代後半フリーターの就職支援を狙いに全国のハローワークの相談員を約70人増員する。(09:38)

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10月の輸出額、01年12月以来の大幅減　貿易赤字639億円

　財務省が20日発表した10月の貿易統計速報（通関ベース）によると、輸出総額は前年同月比7.7％減の6兆9261億円となった。世界的な金融危機が響き、2001年12月以来、約7年ぶりの大幅な減少率を記録した。欧米向けの減少が続き、アジア向けも6年8カ月ぶりのマイナスに転じた。貿易収支は 639億円の赤字で、10月としては1980年以来、28年ぶりの赤字となった。

　日本の貿易収支は8月に3321億円の赤字となり、1月を除いて約26年ぶりの赤字を記録した。10月は2カ月ぶりの赤字。輸入総額は7.4％増の6兆9901億円だった。(11:02)

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10月の貿易収支、639億円の赤字

　財務省が20日朝に発表した10月の貿易統計（速報、通関ベース）によると、輸出額は前年同月比7.7％減の６兆9261億円、輸入額は同7.4％増の６兆9901億円で、輸入額から輸出額を差し引いた輸入超過額（貿易赤字）は639億円となった。

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貿易統計：１０月貿易赤字６３９億円　金融危機、輸出急減

　財務省が２０日発表した１０月の貿易統計（速報）によると、輸出額から輸入額を差し引いた貿易収支は６３９億円の赤字となった。貿易赤字は２カ月ぶり、１０月としては１９８０年以来２８年ぶり。欧米の金融危機が世界に拡大したことを受け、輸出が前年同月比７・７％減と急減、ＩＴバブル崩壊を受けた０１年１２月（同１４・５％減）に次ぐ大幅減少となった。対米、対欧に続き、対アジア輸出も０２年２月以来６年８カ月ぶりに減少に転じた。

　輸出は６兆９２６１億円と４カ月ぶりの減少。対米が同１９・０％減、対欧が同１７・２％減となり、いずれも自動車輸出が３割近い減少になったのが響いた。増加を維持してきた対アジアの輸出も同４・０％減と前年割れに転じ、日本経済の先行き不安を強める結果となった。輸入は、１３カ月連続の増加で、同７・４％増の６兆９９０１億円。原油輸入価格は９月以降下落し、輸入全体の伸びも５カ月ぶりに１ケタにとどまった。【清水憲司】

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大手損保、9月中間純利益63％減　損保ジャパン、通期で赤字

　米国発の金融危機の影響が損害保険会社にも及んできた。東京海上ホールディングスなど大手損保7社が19日発表した2008年9月中間決算は、合計の連結純利益が694億円と前年同期より63％減った。金融市場の混乱による有価証券の評価損や、金融保証保険に伴う損失が計2000億円にのぼったことが響いた。下期も追加損失を見込んでおり、損害保険ジャパンは2009年3月期通期の最終損益が520億円の赤字になる。

　純損益では日本興亜損害保険が増益だった以外は、5社が減益、富士火災海上保険は赤字だった。「（米金融危機の影響が）予想以上の規模、スピードで広がった」（三井住友海上グループホールディングスの遠藤勇専務）(07:00)

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「金融保証保険」で損失1200億円　損保3社の今期

　企業倒産や金融商品の元本割れに備える「金融保証保険」による損失も収益を圧迫する。損害保険ジャパンなど大手3社が同事業で計上する損失額は計1200億円超に上る。

　金融保証保険は保証の対象となる企業が倒産して借金の返済が滞ったり、金融商品が元本割れしたりした場合、保険会社に保険金の支払い義務が発生する仕組み。米アメリカン・インターナショナル・グループ（ＡＩＧ）の経営が悪化した要因となったクレジット・デフォルト・スワップ（ＣＤＳ）に似た機能を持つ。 (07:00)

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信金中金、海外業務撤退へ　傘下信金支援、容易に

　信用金庫の上部組織である信金中央金庫は19日、海外での預金や融資などの銀行業務から撤退する方針を固めた。2009年3月期中にも、米ニューヨーク支店と香港支店を駐在員事務所に格下げする。これに伴い、必要な自己資本比率が国際基準行の8％から国内基準行の4％に下がる。義務付けられる自己資本の水準を低くすることで、自己資本の目減りを招く傘下信金への資本支援をやりやすくする効果がある。

　現在、国会に提出している金融機能強化法改正案で信金中金は、公的資金注入の対象として明記されている。信金中金は実際に公的資金の注入を要請するかどうか、法案審議を注視しながら最終判断する構えだ。(07:00)

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ＮＹＳＥユーロネクスト、ＣＤＳ清算システム導入

　来日した欧米取引所連合、ＮＹＳＥユーロネクストのジャンフランソワ・テオドール副ＣＥＯ（最高経営責任者）は日本経済新聞に対し、企業倒産などで将来資金が焦げ付いた場合に損失を肩代わりするクレジット・デフォルト・スワップ（ＣＤＳ）の清算機関を設立する方針を明らかにした。

　ＣＤＳは投資家同士が相対で取引している金融派生商品の一種で、市場の全体像が見えないことが世界的な信用不安を引き起こす一因となった。15日に閉幕した緊急首脳会合（金融サミット）の行動計画でも、ＣＤＳの透明性を高めるための清算機関設立が盛り込まれた。(07:00)

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神奈川県が炭素税　法人・個人に導入へ調整

　神奈川県は二酸化炭素（ＣＯ2）排出量に応じて課税する「炭素税」を独自に導入する方向で調整に入った。法人だけでなく個人も課税対象とし、ＣＯ2排出量削減が遅れている家庭での抑制を促す。一方、東京都は19日、検討していた炭素税の導入を当面、見送ることを決定。代わりに省エネ設備を導入した家庭や企業への都税を軽減する方針を決めた。

　神奈川県は知事の諮問機関である地方税制等研究会が、炭素税の導入案のたたき台をまとめた。ガソリンや灯油だけでなく、化石燃料を使って製造する電気やガスについても、料金に上乗せする形で、新税を徴収する案を示した。(07:00)

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コンビニ売上高、10月8.1％増　タスポ効果続く

　日本フランチャイズチェーン協会が20日まとめた10月のコンビニエンスストア売上高（11社、既存店ベース）は前年同月比8.1％増の6347億円だった。前年実績を上回るのは6カ月連続。たばこ自動販売機用成人識別ＩＣカード「ｔａｓｐｏ（タスポ）」導入で、店頭でのたばこの販売が増えたことが、引き続き寄与した。

　来店客数が11億753万人と7.4％増えたほか、平均客単価も0.6％伸びた。(18:01)

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10月の世界粗鋼生産、12％の大幅減　中国や米国落ち込む

　世界鉄鋼協会（ワールドスチール、旧国際鉄鋼協会＝ＩＩＳＩ）が20日まとめた10月の世界粗鋼生産（速報値、66カ国・地域）は1億51万トンで、前年同月比12.4％減と大幅に落ち込んだ。世界の生産の3分の1を占める中国の減少に歯止めがかからなかったほか、世界規模の景気減速の影響を受け日米欧でもそろって減少。9月は6年9カ月ぶりに前年実績を下回ったが、引き続きマイナスとなった。

　中国の生産量は3590万トンと前年同月より17.0％も減少。米国は同16.8％減の705万トンだった。日本も1％台のプラスから2.7％のマイナスに転じた。(16:00)

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松坂屋、銀座店の催事場を閉鎖　84年の歴史に幕

　Ｊ・フロントリテイリング傘下の松坂屋は84年の歴史がある銀座店（東京・中央）の催事場を閉鎖し、30代前後向けのエステサロンなどに改装して29日にオープンする。主要店舗の催事場廃止はＪフロントでは初めてで、百貨店大手でも珍しい。

　銀座店の催事場は1924年の開業時に設置。7階の半分超、広さ約850平方メートル余りのスペースで衣料品や雑貨、食品のバーゲンセールなど会期が1 週間前後の催事を開いてきた。だが売り上げは店舗全体（2007年度は156億円）の1割未満と伸び悩んでいた。中心客層が60代前後と高齢化し、主要顧客層としている30代前後とずれも生じていた。(09:38)

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伊藤忠、中国食品最大手に出資　700億円で20％、現地市場を開拓

　伊藤忠商事は中国の加工食品で最大のシェアを持つ頂新グループに20％出資する。出資額は700億円。伊藤忠は同グループと日本企業との提携を支援、食の安全や品質にかかわる日本の技術を生かして中国市場を開拓する。伊藤忠は8月に穀物輸入などを手掛ける大手食料企業、中糧集団とも提携している。高い成長が見込める中国市場で複数の日本メーカーを巻き込んで原料から加工、物流、販売に広がるネットワークを構築する。円高を背景に日本企業による海外での出資や買収が加速してきた。

　頂新グループは中国の即席めん最大手「康師傅」（本部・天津市）や、コンビニエンスストアの「ファミリーマート」を展開する「頂全」（本部・上海）など、有力食品関連企業を傘下に持つ。伊藤忠は同グループの持ち株会社（本部・台北）に出資する。(07:00)

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蘭フィリップス、ＬＥＤ照明で日本進出

　オランダのフィリップスは2009年から国内の発光ダイオード（ＬＥＤ）照明市場に本格参入する。専業のカラーキネティクス・ジャパン（東京・江東）の機器をフィリップスのブランドで販売するほか、両社の技術を組み合わせた商品を開発して投入する。商業・公共施設向けに強いカラーキネティクス・ジャパンの販路を活用し、成長市場を取り込む考え。

　ＬＥＤ照明は白熱電球や蛍光灯より省エネ性能が高く、長時間使用できる。フィリップスは海外ではＬＥＤ照明の大手。国内は日本法人のフィリップスエレクトロニクスジャパン（東京・港）を通じて、自社のＬＥＤ機器や部品の一部をオフィス・店舗などに少量販売しているだけだった。(07:00)

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インド、自動車輸出が本格化　スズキが欧州向け戦略車

　大手自動車メーカーがインドからの乗用車輸出を本格化する。現地最大手のスズキは19日、主に欧州に輸出する小型戦略車を発表した。韓国・現代自動車や仏ルノーも欧州や新興国への輸出基地としてインドを活用しており、今年度（2008年4月―09年3月）の輸出は初めて30万台に乗る見通し。世界的な小型車需要の高まりを受け、インドが世界的な自動車供給基地として浮上してきた。

　スズキは排気量1000cc級の新型車「Ａスター」をニューデリーで発表した。インドからの輸出を前提に開発した初の小型車で、19日にまずインドで発売した。価格は34万7000―41万2000ルピー（67万―80万円）。09年1月に対欧輸出を始め、最終的な輸出先は最大150カ国に達する見込みだ。(07:00)

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仏アレバ、日本製鋼所に1.3％出資　原発鉄鋼品の長期購入契約

　原子力発電関連メーカーの仏アレバは、原発機器向け鉄鋼品を製造する日本製鋼所に1.3％出資した。鉄鋼品の長期購入契約も締結、資本関係を結ぶことで協力関係を強めて基幹部材の安定調達を目指す。日本製鋼所は同契約を受け約300億円の増産投資に踏み切る。世界で原発の建設計画が相次ぐ中、増産に備えたメーカー間の提携が活発になってきた。

　アレバは今秋、株式を取得した。取得額は不明だが、19日の日本製鋼所の終値で計算すると取得額は約40億円となる。株式取得には日本製鋼所も同意。アレバは買い増しの意向はないと日本製鋼所に伝えている。(07:00)

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ホクレンと乳業各社、乳価上げ合意　酪農経営なお厳しく

　ホクレン農業協同組合連合会（札幌市）と大手・中堅乳業メーカー15社との生乳価格（乳価）交渉が、来年3月に平均7％引き上げることで妥結した。異例となる年度途中の大幅値上げは実現するものの、ホクレンが求めていた年内値上げは見送りに。酪農家の手取り価格に反映されるのは来年4月で、飼料高による厳しい経営環境は依然続く。

　生乳はホクレンが農協を通じて集め、牛乳やチーズ、バターといった用途別に値決めし、乳業メーカーに販売する。今回合意した主な用途別価格は、道内生乳の5割弱を占めるバターや脱脂粉乳といった加工原料向けが6％高い1キログラム約67円。生クリーム向けも6％高い約78円、チーズ向けが8％高い55円、牛乳向けは10％高い約109円となる。

　ホクレンが各農協に払う乳価は1キログラム当たり平均5.3円（7％）上昇し、80円台を超える見通しだ。4月の値上げと合わせると、上げ幅は10円を超す。

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暴力団との関係遮断、企業の75％が規定

　警察庁と日本弁護士連合会などが今年8月、全国の企業を対象に暴力団などへの対応の実態などを聞いたアンケート調査で、回答した企業の4分の3が暴力団などとの関係を絶つために社内で行動指針などの規定を整備していることが20日、分かった。契約書などに暴力団排除条項などを盛り込んでいる割合は2割強にとどまった。

　調査は、昨年6月に政府が「企業が反社会的勢力による被害を防止するための指針」を公表してから1年が経過したことを受け、日本経済団体連合会に加盟する企業など全国3000社を対象に実施。46％にあたる1385社が回答した。(16:00)

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駒大だけじゃない「デリバティブ」時事通信も大やけど

「６億損失の可能性」

　資産運用で行っていたデリバティブ（金融派生商品）取引で、約１５４億円の損失を出した駒沢大学（東京）。運用難の時代にこの手のハイリスク商品に手を出し、大やけどをした企業は多い。経済情報に強いといわれる大手通信社、時事通信社（東京）でもかつて、デリバティブ取引が会社を揺るがす大問題になった。

　駒大のケースでは、２００７年度に外資系金融機関３社とデリバティブの一種「金利スワップ」「通貨スワップ」を内容とする計約１００億円の取引を契約した。しかし世界的な金融危機の影響で多額の含み損が発生、今年１０月２９日に契約を解除した。損失額は１５４億５０００万円に上ったという。

　この手の失敗例は意外と多く、時事通信社でもデリバティブ取引で会社が大きく揺らぐ事態になったことがあった。

　関係者によると、時事では０４年６月１６日、契約期間５年のデリバティブ取引を国内銀行と契約。想定元本は約５０億円だったという。

　「（時事が）契約したデリバティブ取引は『米ドル金利スワップ』と呼ばれるもの。米国の金利水準が下がれば下がるほどもうかり、逆に上昇するほど損をするというものだった」（関係者）

　この取引がなんとも不可思議なものだった。

　「このデリバティブ契約を結んだ際、当時のグリーンスパンＦＲＢ（米連邦準備制度理事会）議長は利上げに前向きな姿勢をみせていた。実際、米国では０４年６月以降、短期市場金利の指標となるフェデラルファンド金利が１０回ほど引き上げられた。経済に強いはずの時事が、金利が下がるほどもうかるデリバティブ取引を契約したのは理解に苦しむ行為だった」（同）

　米国の金利が上昇局面にあるのに、金利が下がればもうかるデリバティブ取引を契約するのは、自殺行為ともいえる。

　結局、億単位の損失が発生する公算が高まり、時事は０５年５月に開いた取締役会で取引の解約を決めた。

　解約理由について、時事の財務経理担当役員は０５年６月２５日に開かれた定時株主総会で、「（解約せず満期まで保有した場合）金利動向次第によっては最終的に５億、６億、これ以上の損失をこうむる可能性さえ想定される」と説明。途中解約した場合の違約金は約１億２０００万円で済むため、被害が少ないほうを選択したわけだ。

　このデリバティブ取引を契約した時事幹部は社内調査に対して、「デリバティブの契約の提案は銀行側からあった。会社（時事通信社）の営業支援になり、銀行側とも友好な関係が保てるため、契約した」と説明したという。

　時事のケースも駒大のケースも、安易にデリバティブ取引に手を出すと大やけどすることを示している。

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厚相経験者も恐々…苦情、脅迫電話に「顔出し拒否」

　厚生次官連続テロに関し、厚相経験者も強い衝撃を受けている。脅迫電話を受けたことを明らかにした議員もいれば、顔出しでのコメントを拒否する議員、マスコミや野党に責任を転嫁する議員も出ている。

　自民党の尾辻秀久参院議員会長は１８日、「地元事務所に『刺すぞ』と電話があった」ともらした。関連は不明だが、事件に巻き込まれた２人の元次官は小泉純一郎元首相の２度の厚相時代に次官を務めた。一方の尾辻氏は小泉内閣で厚労相を務めた経験がある。

　後援会事務所関係者によれば、電話があったのは今年の春ごろ。年配と思われる声の男が電話口から「後期高齢者医療制度を作ったときの大臣だろう。刺すぞ」と怒鳴ったという。

　同制度を実施する法案が成立したのは小泉首相－川崎二郎厚労相時代なのだが、事務所関係者は「なにかあるたびに苦情の電話はかかってきます」という。

　歴代の厚相、厚労相を務めた現職国会議員には、自民党では小泉氏、津島雄二氏、丹羽雄哉氏、尾辻氏、川崎氏、柳沢伯夫氏、舛添要一氏らがおり、民主党にも渡部恒三氏、羽田孜氏、菅直人氏がいる。

　ある厚労相経験者は１９日、テレビ記者に顔出しでのコメントを求められると、「大臣経験者も狙われているとなると、顔を出して話すのはまずいでしょう。新聞にオフレコの形で出るのならいいけど」と拒否した。

　津島氏は同日、「厚労省の仕事の成果をほとんど評価できないような論評ばかり行われている。マスコミも考えてもらいたい」と指摘、野党やメディアによる厚労省批判に矛先を向けた。

　一方、公明党の漆原良夫国対委員長は同日、「（警備の）対象についてはみんなですよ。僕は坂口（力氏）、我が大臣も注意してもらいたいと申し上げましたけれどもね」と語った。恐怖の波紋が収まる気配はない。

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北朝鮮のくだらない主張…「日本こそ拉致の本拠地だ」

　北朝鮮の朝鮮労働党機関紙「労働新聞」は２０日、北朝鮮に日本人が拉致された疑惑があると主張する日本側の資料は、「南朝鮮（韓国）の謀略機関がひそかにでっち上げて日本に提供したものだ」と主張する論評を掲載した。

　論評はまた、三重県で１０月に起きた女子高生誘拐事件や２０００年に新潟で発覚した９年以上に及ぶ女性監禁事件など日本で起きた拉致、監禁事件を引き合いに出し、「日本こそ拉致の本拠地だ。他国の拉致問題で騒ぐのではなく、国内の深刻な拉致事件に取り組むべきだ」と指摘した。

ZAKZAK 2008/11/20

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首相が陳謝、撤回…「医師は社会常識がかなり欠落」

　麻生太郎首相は２０日午後、日本医師会の唐沢祥人会長と官邸で会い、「医師は社会常識がかなり欠落している人が多い」との自身の発言について謝罪し、撤回した。

　唐沢氏が「現場の医師は厳しい状況の中で精いっぱい努力している」と抗議したのに対し、首相は「発言が誤解を与えているようだし、不適切だった。すみませんでした」と陳謝した。

　首相は１９日の全国知事会議で、医師不足に関し「（医師は）ものすごく価値観が違う」などと発言。その後「まともなお医者さんが不快な思いをしたというのであれば申し訳ない」と陳謝したが、医療関係者らが反発したほか、政府、与党内からも「誤解を招く」と批判が出ていた。

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割りばし事故：医師、２審も無罪　東京高裁

　東京都杉並区で９９年、保育園児の杉野隼三君（当時４歳）ののどに割りばしが刺さり死亡した事故を巡る控訴審で、東京高裁は２０日、業務上過失致死罪に問われた医師、根本英樹被告（４０）に対し、１審・東京地裁の無罪判決（０６年３月）を支持し、検察側の控訴を棄却する判決を言い渡した。阿部文洋裁判長は「脳の損傷を疑う注意義務があったとは言えない」と述べた。

　隼三君は９９年７月、近所の盆踊り会場で転倒。救急車で杏林大付属病院（三鷹市）に運ばれた。耳鼻咽喉科の医師だった根本被告はのどに塗り薬をつけて家に帰したが、隼三君は翌朝死亡。司法解剖の結果、盆踊りの会場で食べた綿あめの割りばしがのどに刺さり、一部が脳に残っていたことが判明した。

　検察側は「適切な治療をしなかった」として起訴したが、根本被告は無罪を主張。１審・東京地裁が「治療に過失はあったが、救命や延命の可能性は極めて低かった」と無罪を言い渡したため、検察側が控訴していた。

　両親が根本被告らに賠償を求めた民事訴訟では東京地裁が２月、「脳の損傷を予見するのは不可能」と過失を否定し、請求を棄却する判決を言い渡している。【伊藤一郎】

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汚染米：１５５０トンを放置…０５年度売却米まで　農水省

　事故米の不正転売問題で、農林水産省が中国産のもち米から０５年に殺虫剤「メタミドホス」を検出していたにもかかわらず、食用として売却した１５５０トンを回収せず放置していたことが分かった。食用として流通していれば食品衛生法違反の恐れがある。

　農水省によると、０３年度に中国からもち米約５０００トンを輸入し０５年度まで約１５５０トンを売却した。その後、残留農薬基準の規制強化制度が導入されたため、同省は０５年１２月から、残ったもち米の残留農薬を調べたところ、基準の５倍にあたるメタミドホス（０．０５ｐｐｍ）を検出した。しかし、売却分について販売先に連絡をせず、追跡調査もしなかった。残りの３４５０トンは汚染米として処理された。

　石破茂農相は１４日の閣議後会見で「国として追跡調査などをすればよかったということはある。今後同様なことが起きた時の対応を関係省間で検証したい」と述べた。【奥山智己】

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殺虫剤混入：「もち吉」４０代従業員が告白し自殺

　福岡県直方市の米菓会社「もち吉」が製造・販売した和菓子「えん餅」から高濃度の殺虫剤成分「フェニトロチオン」が検出された問題で、製造にかかわっていた４０代の男性従業員が１９日に自殺していたことが分かった。「私がやりました」という内容の文書を同社にファクスで送ってきたといい、同社はこの従業員が混入に関与したとみている。

　同社によると、従業員は正社員で、えん餅のあん製造を担当していた一人。１９日午前６時ごろ、同社にファクスで「仕事になじめなかった。私がやりました。申しわけありません」という内容の文書が送られてきたという。

　同社は県警に相談。警察官が従業員の行方を捜したところ、同日に同県飯塚市内の山中で首をつって死んでいるのを見つけた。

　文書にある「仕事になじめなかった」という点について、同社は「調査中」としている。文書は、自ら希望した包装作業のラインから製造作業のラインに配置が換わったことなどを挙げているという。

　県や同社のこれまでの調査で、１０月２９日に製造されたえん餅のあんから食品衛生法に定める基準値（０．０１ｐｐｍ）の約７０００倍にあたる７０～１．１ｐｐｍのフェニトロチオンを検出。通信販売で購入した１９人のうち１１人から、１０月３０日～１１月２日に「臭気や舌先に刺激を感じた」といった苦情などが寄せられた。健康被害などは確認されていない。

　同日製造のえん餅は７１１４個で、６０００個は工場で保管されているが、２９８個が通信販売で、８１６個は全国各地の百貨店などで販売されたとみられている。同じあんは１０月２８日～１１月２日の製造分に含まれている恐れがあることから、県は計１４万５１２８個の自主回収を同社に指示。同社は１５日にえん餅の生産を停止し、回収を進めている。

　これまでの調査で、原料である小豆の残留農薬の可能性や流通・販売過程での混入の可能性は低いことが判明。県警も製造時の人為的な混入の疑いが強いとみて偽計業務妨害容疑などで捜査していた。【入江直樹】

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イージス艦：迎撃ミサイルＳＭ３の発射試験に失敗

　防衛省は１９日午後４時２１分（日本時間２０日午前１１時２１分）、米ハワイ沖で、海上自衛隊のイージス艦「ちょうかい」（佐世保基地所属）搭載の海上配備型迎撃ミサイル（ＳＭ３）の発射試験を実施した。しかし、標的の模擬中距離弾道ミサイルを迎撃できず失敗に終わった。防衛省が詳しい経緯を調べている。

　イージス艦の発射試験は昨年の「こんごう」に続き２回目だが、今回は標的となるミサイルの発射時間があらかじめわからない状態で実施した。米海軍がハワイ・カウアイ島の米ミサイル発射施設から標的の模擬ミサイルを発射。ちょうかいは数百キロ離れた海上で探知し、ＳＭ３を発射した。試験費用は約６０億円。【本多健】

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防衛省「ＳＭ３」標的迎撃に失敗…試験に６０億円費用

　防衛省は２０日、海上自衛隊のイージス艦「ちょうかい」が、弾道ミサイルを撃ち落とす海上配備型迎撃ミサイル（ＳＭ３）の発射試験を米ハワイ沖で実施したが、標的の迎撃には失敗したと発表した。試験には総額約６０億円の費用が掛かったが、失敗により、日本のミサイル防衛（ＭＤ）システムは運用面での課題を露呈した。

　同省によると、試験は１９日午後４時２０分（日本時間２０日午前１１時２０分）に行われ、米軍がハワイ島のミサイル発射施設から打ち上げた標的の模擬弾を、数１００キロ沖合に停泊中のちょうかいがレーダーで探知。ＳＭ３を発射したが、打ち漏らした。

ZAKZAK 2008/11/20

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海自無線ＬＡＮ：セキュリティー甘く傍受可能

　海上自衛隊舞鶴基地（京都府舞鶴市）と呉基地（広島県呉市）に停泊している護衛艦に、セキュリティーの甘い非暗号化の無線ＬＡＮが設置され、第三者が通信内容を傍受できる状態だったことが分かった。実際に電子メールのパスワードなどが流出した。海自は「インターネット接続用で、防衛に関する重要情報は扱っていない」としているが、専門家は「情報セキュリティーの基本が分かっていない。直ちに対策をとるべきだ」と非難している。

　関係者によると、舞鶴基地に停泊中の護衛艦数隻から発信された無線ＬＡＮの電波は、暗号化が施されておらず、電子メールを送受信する際に必要なＩＤとパスワードや閲覧中のサイト情報などが今月上旬に傍受できたという。また呉基地に停泊中の護衛艦からも同様の無線ＬＡＮの電波が確認された。

　無線ＬＡＮは利便性から、会社や家庭での利用が浸透しているが、悪意の人物が非暗号化の無線ＬＡＮを使って通信を盗み見するなどのケースが問題化している。

　海自幕僚監部広報室は非暗号化の無線ＬＡＮの存在を認め、「艦の隊員がネットに接続してサイトを閲覧したり、メールをやり取りした。防衛上見られて困る情報はないが、ネットワーク情報が明らかになるのは好ましくない。無線ＬＡＮは廃止する方向で進んでいる」と話した。【高橋望】

　▽軍事アナリストの小川和久さんの話　情報セキュリティーにとって最悪。あまりに無防備といえる。防衛省、自衛隊をあげて直ちにセキュリティー保全を行う必要がある。

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Russian Black Sea Fleet to make officer cuts

19.11.2008, 18.59

MOSCOW, November 19 (Itar-Tass) -- The Russian Black Sea Fleet is reducing the number of officers as part of the overall military reform in Russia, the fleet’s command said on Wednesday.

“The concept of the future fleet implements plans for creating new military control bodies, taking into account relevant commanders’ suggestions for maintaining the combat capability of the fleet during reorganisation,” Black Sea Fleet Commander, Vice Admiral Alexander Kletskov said.

“A directive will be issued in the fleet shortly to provide the legal basis for the transition to a new fleet,” he added.

According to unofficial information, up to 2,000 officers may be dismissed in the Black Sea Fleet.

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Russia army to upgrade 30 percent of arms and hardware in 3-5 years

19.11.2008, 18.30

MOSCOW, November 19 (Itar-Tass) --The Russian army will upgrade one-third of arms and hardware in the next three to five years, chief of the Russian Army General Staff, General of the Army Nikolai Makarov said.

“We plan to equip the army with new arms and hardware by 30 percent in next three to five years and bring this indicator to 80-100 percent by 2018-2020,” Makarov said on Wednesday.

He said, “Less than 20 percent of the Armed Forces are permanent readiness units, i.e. those that can carry out combat missions, and over 80 percent are truncated units and formations, i.e. those where officers and warrant officers have no subordinated personnel”.

“By building the army as we plan, we will have 100 percent of permanent readiness units and formations,” the generalsaid.

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What America Owes Mexico
20.11.2008 Source: Pravda.Ru URL: http://english.pravda.ru/opinion/columnists/106723-America_Mexico-0

By Babu G. Ranganathan

As an American, let me say that the United States owes much to Mexico.

In the 19th century the United States, which was experiencing great industrial, technological and economic growth, sought to expand to the Pacific Ocean. But, there was one big problem. Mexico was in the way. Western land belonged to Mexico. So, the United States invented a doctrine called Manifest Destiny which said that the nation which could better use the land had the right to it. The United States forcibly took what are now California, Arizona, New Mexico, and Texas from Mexico. This was raw aggression and it was morally wrong. When the United States seized these lands from Mexico they became first U.S. territories ruled directly from Washington D.C. Afterwards, when enough Americans from other parts of the country settled into these territories and formed the majority, the federal government in Washington allowed the people in the territories to vote on statehood and to have their own individual state governments.

The United States can partly correct the great injustice and wrong which committed against Mexico by giving legal status to Mexican workers in the U.S. who are doing jobs that most Americans refuse to do. No one is being hurt and everyone wins. But, isn't this giving amnesty to illegal immigrants? Not completely because the United States does owe Mexico at least this much for taking hundreds of thousands of square miles of territory from them. Also, in life there is a time for mercy as well as a time for justice. In this case it is even practical on our part to give mercy. There is no conceivable way that America can deport the millions of Mexicans already, and the employment vacuum this will cause will be felt in every American's pocket book. Americans are taking a lot of the work the Mexicans do for granted.

The overwhelming majority of Mexican workers are law-abiding and work very hard for low wages but that money means a lot for them and their families back home. They do pay billions in payroll taxes. Yes, they may have gotten their social security and I.D. numbers on the black market, but the tax money that's withdrawn weekly from their paychecks is very real. If they were given legal status then they would be paying even more in taxes. With all the baby boomers retiring soon America will need all the hard earned tax money from Mexican workers. America has aborted nearly forty million unborn babies since 1973, so Americans don't have enough people in the workforce to support social security once all the baby boomers retire.

These immigrant workers are not the "barbarians at the gates of Rome" as Pat Buchanan dramatizes them to be. They probably have far superior moral and family values than that of the average American. They're even the same religion as Pat Buchanan: Roman Catholic. Within a couple of generations, if not sooner, these Mexicans will have become Americanized and be speaking and writing fluent English. Other immigrants, the Irish, Italians, etc. have done so within a couple of generations.

America should do what's right, just, merciful, and compassionate and give amnesty to the hard working laborers from south of the border.

The author, Babu G. Ranganathan, is an experienced Christian writer. Mr. Ranganathan has his B.A. with academic concentrations in theology and biology. As a religion and science writer he has been recognized in the 24th edition of Marquis Who's Who In The East. The author's articles have been published in various publications including Russia's Pravda and South Korea's The Seoul Times. The author's website may be accessed at: www.religionscience.com.

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Putin to return in the Kremlin as long-term president?
19.11.2008 Source: Pravda.Ru URL: http://english.pravda.ru/russia/kremlin/106722-putin_president-0

As soon as Dmitry Medvedev offered to extend the presidential term from four to six years, rumors appeared immediately saying that the suggestion had been made to bring Vladimir Putin back in the Kremlin and make him stay there as long as possible.

Medvedev said in his interview with Le Figaro newspaper that the planned constitutional amendments would touch upon only the next president of the Russian Federation. Medvedev did not specify if Vladimir Putin could become the next president after him.

A change of the Constitution may give the Russian administration an opportunity to keep the current state of affairs unchanged during a very long period of time. In addition, Medvedev’s suggestion showed that the Russian administration had taken a firm grip on the reins of government.

Medvedev made the suggestion during the critical moment for Russia, when crude prices collapsed against the background of the financial crisis. This is the time when Russia had to open its stabilization fund.

Putin was successfully solving the question of Russia’s centralization during his stay at power. Putin’s actions at this point resulted in the fact that even strong regional leaders, for example the president of Tatarstan, failed to defend some of their privileges which they obtained during Yeltsin’s rule.

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World’s only private resort for billionaires goes bankrupt
19.11.2008 Source: Pravda.Ru URL: http://english.pravda.ru/business/companies/106720-resort_billionaires-0

World’s only private ski and golf resort for billionaires, Yellowstone Club (Montana, USA), has gone bankrupt. The club, which has Microsoft founder Bill Gates among its members, is unable to call in its credits, RIA Novosti reports. The company, which serves billionaires, has thus failed to withstand the financial crisis.

The most expensive and luxurious resort in Montana has filed for bankruptcy on account of its debts evaluated at $343 million. The debts had been saved as a result of the aggressive expansion politics and an intention to build additional offices in Scotland, Mexico and on the Caribbean islands.

Yellowstone is the location of the most expensive house in the world – the estate of logging tycoon Tim Blixseth worth $167 million. Blixseth founded the club in 1999. The resort has “cheaper” offers too – priced from 4 to 16 million dollars.

It is worthy of note that 125 members of the platinum club wrote a letter to Blixseth in May of the current year to set out their concerns about the policies that the resort administration was running.

The club had a very costly membership. A new member was supposed to receive an invitation from an existent member, pay the membership fee ($250,000), purchase a plot of local land (from $2 million) and finally build a house there. The monthly membership fee made up $16,000. In return, the club could offer the dream of any skier – ski rides on splendid slopes with no one else around.

Tim Blixseth built his 4,900-square-meter house of stone and wood. The house comes with 650,000 square meters of land. There are ten rooms and a pool in the building. The indoor pool can be quickly transferred into the outdoor pool with the help of the sliding glass wall.