Geithner Vows to Recoup AIG Bonuses as Lawmakers Express Fury
Share | Email | Print | A A A
By Ryan J. Donmoyer and Laura Litvan
March 18 (Bloomberg) -- Treasury Secretary Timothy Geithner told congressional leaders the U.S. will recoup executive bonuses paid by American International Group Inc. as outraged lawmakers raced to take back such payments from all companies getting federal bailouts.
Geithner, who has come under fire from Congress over the AIG payments, said in a letter to lawmakers last night the government will recover the money by requiring it be repaid from company operations and deducting the amount from the next $30 billion in aid being provided to the insurer. He also said the government will work to accelerate the “wind down” process of restructuring AIG.
The senior members of the Senate Finance Committee from both parties proposed taxes totaling 70 percent on bonuses at AIG and other companies getting federal money during the U.S. financial meltdown. House Speaker Nancy Pelosi directed committees there to draft several alternatives and said her chamber may consider a bill as early as this week. Other lawmakers introduced their own plans.
“Millions lost their jobs; it’s an outrage that the people who somewhat caused this problem are now paying themselves bonuses,” Senate Finance Chairman Max Baucus, a Montana Democrat, said yesterday in Washington. He and ranking Republican Chuck Grassley of Iowa also proposed limiting some forms of deferred compensation to $1 million at companies getting bailout funds.
New York-based AIG paid $165 million in executive bonuses after taking taxpayer-funded bailouts totaling $173 billion. AIG also budgeted $57 million in “retention” pay for employees who will be dismissed, according to a March 2 filing to the Securities and Exchange Commission.
Liddy Testimony
AIG Chief Executive Officer Edward Liddy testifies today before a subcommittee of the House Financial Services Committee. Panel Chairman Barney Frank said yesterday the government has a stronger legal case to reclaim the AIG bonuses now that the government owns a majority of the company.
“I think the time has to exercise our ownership rights,” Frank told reporters. “And then say, as owner, ‘No, I’m not paying you the bonus. You didn’t perform. You didn’t live up to this contract.’”
Geithner’s letter said Treasury lawyers determined that it would be “legally difficult” to prevent AIG from paying the bonuses because they were required by contracts.
Repayment Requirement
“We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of retention rewards just paid,” Geithner wrote. “In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments.”
He also said criticism of Liddy is “unjustified” because the contracts were in place before he took over at the company last year.
The political heat generated by AIG bonuses indicates declining public and congressional support for shoring up beleaguered financial institutions with government funds, and may make it tougher for President Barack Obama’s administration to win approval for future bailouts.
Obama this week chastised the insurer for awarding the bonuses to staff of the derivatives unit blamed for the firm’s near collapse in September. New York Attorney General Andrew Cuomo said he’ll subpoena AIG for details on the payouts.
Answers Sought
Senate Banking Committee Chairman Chris Dodd of Connecticut said he wants the Federal Reserve, which is overseeing AIG’s bailout, to explain how it will resolve the situation.
“I would recommend they give back those bonuses,” Senate Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor. “We as a Congress are not defenseless.”
Pelosi said she directed the Financial Services, Judiciary and Ways and Means committees to draft legislation this week that would recoup misspent public funds from companies that received taxpayer assistance.
She said options include authorizing the U.S. attorney general to reclaim “prior and future excessive compensation” payments, barring retention bonuses at companies getting Treasury funds, and recouping the money through tax laws.
“Most appallingly, while millions of Americans struggle through this economy, those who have received the largest measure of taxpayer assistance from the Treasury Department have shown no restraint,” Pelosi said in a statement.
Taxes on Bonuses
The tax on bonuses proposed by Baucus and Grassley would apply to amounts over $50,000 paid starting Jan. 1, 2009, and to the full amount of any retention bonuses. The proposal would force AIG and other companies to pay overseas employees’ share of the excise tax.
Baucus said he believed the tax would succeed in recouping “most of the bonuses” paid by companies that get federal bailout funds.
House Ways and Means Committee Chairman Charles Rangel said he opposed using the tax code to take back the bonuses.
“It is tough, to me, to think of the tax code as a political weapon,” Rangel said in an interview. “I would hope and assume we have alternatives to the tax code” for taking back bonuses. He said he was working with other lawmakers to develop a “legislative response to this problem.”
Wyden, Snowe
Senators Ron Wyden, an Oregon Democrat, and Olympia Snowe, a Maine Republican, said in a statement the AIG bonuses might have been avoided if Congress had earlier adopted their amendment to force companies that use bailout funds to pay excessive bonuses to either return the money or pay a tax on it.
Also among lawmakers announcing proposals to recoup bonuses paid by AIG and other bailout recipients were Democratic Representatives Carolyn Maloney of New York Earl Blumenauer of Oregon.
Senator Charles Schumer, a New York Democrat, said in a speech on the Senate floor that he, Reid and other lawmakers sent a letter to AIG’s Liddy asking executives to return the bonuses to their “rightful owners.” He said if the money isn’t refunded, Congress will pass laws to “tax these bonuses at a very high rate.”
The disclosure on expenses for “employees expected to be terminated” may signal AIG is planning staff cuts after leaving employment unchanged last year, according to regulatory filings.
“As part of restructuring the company, we will ultimately eliminate jobs that are, at the moment, critical to maintaining ongoing operations and winding down certain businesses,” said Christina Pretto, an AIG spokeswoman.
-------------------------
Mexican Banks ‘Party’ May End as Economy Shrinks: Week Ahead
Share | Email | Print | A A A
By Jose Enrique Arrioja and Valerie Rota
March 17 (Bloomberg) -- Grupo Financiero Banamex SA, the Mexican unit of Citigroup Inc., contributed 11 percent to its parent’s total sales in 2008 after doubling profits the previous six years. The good times for Banamex and its Mexican rivals may be ending, according to Fitch Ratings.
“The party for the Mexican banks is over,” said Peter Shaw, an analyst at Fitch in New York. “Profit will not be the same as the last two or three years.”
Mexican lawmakers and bankers meet this week in Acapulco at an annual banking conference amid mounting speculation revenue from the local units of international lenders is set to tumble as Latin America’s second-largest economy shrinks.
Citigroup, Banco Santander SA and HSBC Holdings Plc all have subsidiaries in Mexico that traditionally helped buoy profit for their parents because of expanding demand from Mexicans for consumer loans and mortgages. Citigroup Chief Executive Officer Vikram Pandit said last month that the U.S. bank and its Mexican unit “are one and the same.”
“The future of Citi is in emerging markets,” Pandit said at a press conference in Mexico City, according to a company statement. “It’s in Latin America. It’s in Mexico with Banamex.”
Banamex Earnings
Profits at Mexico City-based Banamex doubled from 2002, the first full year it was part of the U.S. bank, through 2007, Citigroup Latin America Chief Executive Officer Manuel Medina- Mora said last year. Banamex revenue climbed 6.3 percent in 2008 to 85 billion pesos ($5.86 billion), Chief Executive Officer Enrique Zorrilla said last month. Citigroup’s 2008 sales fell 33 percent to $52.8 billion, according to Bloomberg data.
Now, after New York-based Citigroup received $45 billion in government rescue funds and its shares tumbled 73 percent this year, the outlook for Mexican banking subsidiaries also is dimming as the country heads for its first recession in eight years. The deepening slump in the U.S., the destination for 80 percent of Mexican overseas sales, is curbing export revenue and trimming remittances that help keep up local consumer demand.
Mexican banks will have a “complicated year because of pressures from defaulted loans, a byproduct of the economic backdrop,” said Juan Partida, a banking analyst with UBS AG in Mexico City. UBS estimates Mexico’s economy will contract as much as 4 percent this year.
Paulo Carreno, a spokesman for Banamex in Mexico City, didn’t return calls seeking a comment. Ovidio Cordero, a press representative for Madrid-based Santander, declined to comment. Ruth Lavelle, a press officer at London-based HSBC, didn’t reply to an e-mail request seeking a comment.
Shrinking Economy
Mexico’s economy will shrink 1.9 percent in 2009, according to the average forecast of 30 economists surveyed by the central bank and published this month. Morgan Stanley said yesterday that the economy will contract 5 percent this year. Mexico’s gross domestic product expanded 1.5 percent in 2008, central bank Governor Guillermo Ortiz said in January, after growing 3.2 percent in 2007.
Migrant worker remittances will decline this year after falling in 2008 for the first time since the central bank began tracking transfers in 1995, Mexican Deputy Finance Minister Alejandro Werner said last month. Mexico’s unemployment rate surged to 5 percent in January, the highest since the statistics agency began measuring the data in 2000.
Consumer Lending
While Shaw wrote in a report last month that bad loans will keep rising, Deutsche Bank AG recommended last week that investors take an “overweight” position in Mexican financial stocks. New York-based strategist Guilherme Paiva said Mexican banks will benefit from an increase in lending to consumers who have low debt levels relative to disposable income.
The recommendation helped send shares of billionaire Carlos Slim’s Grupo Financiero Inbursa SA to their biggest gain since 2002, and pushed up Grupo Financiero Banorte SAB, Mexico’s largest publicly-traded bank.
“Banks are going to suffer, but the year is not going to be a catastrophe,” said Angelica Bala, a banking analyst with Standard & Poor’s in Mexico City. “The capitalization of the Mexican banks is the system’s strength.”
Legislators from the nation’s three biggest political parties and bankers will get together on March 19 and 20 in Acapulco, Mexico. President Felipe Calderon, Ortiz, Finance Minister Agustin Carstens and former U.S. Federal Reserve Chairman Alan Greenspan are scheduled to speak at the conference.
Markets
Mexico’s benchmark Bolsa index rose 14 percent last week, its biggest weekly advance since October, to 19,437.01. Cemex SAB, the largest cement maker in the America, led gains, advancing 30 percent to 8.63 pesos. TV Azteca SA, the second- largest Mexican television broadcaster, fell the most, dropping 4.3 percent to 4.41 pesos.
Yields on Mexico’s benchmark 10 percent bond due December 2024 dropped 33 basis points, or 0.33 percentage point, to 8.74 percent. The bond’s price rose 3 centavos last week to 110.75 centavos per peso, according to Santander.
Mexico’s currency strengthened 4.6 percent last week to 14.5221 per U.S. dollar, compared to 15.5667 on March 6. The peso gained another 1.9 percent yesterday to 14.2576 per dollar while Mexican markets were closed for a holiday.
The following is a list of events in Mexico this week:
Event Date Forecast Industrial Production January March 18 -9.2% Overnight Rate March 20 7.25% Aggregate Supply and Demand 4Q March 20 -2.0%
----------------------------
Qatar Thrives on Natural Gas as Companies, Workers Flee Dubai
Share | Email | Print | A A A
By Henry Meyer and Camilla Hall
March 17 (Bloomberg) -- As Dubai scales back plans to build a waterfront development twice the size of Hong Kong Island, 30,000 workers off the coast of Doha in Qatar are constructing a $14 billion luxury residential project called the Pearl.
The first residents will move into condominiums costing as much as $1.4 million on a man-made island this summer, and boutiques including Sonia Rykiel and Stefano Ricci are already doing business on the marina looking onto the Persian Gulf. From the quayside, where yachts are moored, building sites are visible in the distance with cranes stretching up into the sky.
Gas-rich Qatar, the Gulf’s fastest-growing economy, is spending more than $100 billion in the next three years on projects including a new financial district and international airport. This comes as Dubai suffers a real-estate crash spurred by its dependence on banking and tourism, and the region’s oil- producing economies, such as Saudi Arabia, dip into reserves to avoid recession.
“Qatar doesn’t seem to have any problems; the money is there,” said Lionel Scharly, chairman of the French luxury design company Scharly Designer Studio. After visiting Dubai in December and deciding not to do business, he is bidding for work at the Pearl and plans to open an office in Doha. “In Dubai, everyone is talking about the crisis,” he said from Paris.
A sheikhdom smaller than the U.S. state of Connecticut, with a population of about 1 million, Qatar in 2008 had the world’s second-highest per capita income, at $101,000, after Liechtenstein. It is hurt less than neighbors by the slump in oil prices to $47 a barrel, from more than $147 last July, because of a bet its rulers made 25 years ago: natural gas.
LNG Exporter
Today, Qatar is the world’s largest exporter of liquefied natural gas. Most of the LNG is sold on 25-year contracts, which although renegotiable, aren’t subject to the same price volatility as oil. LNG prices paid by Japan, the biggest importer, have fallen 13 percent since July, compared with the 68 percent plunge in crude.
With the world’s third-largest natural-gas reserves, after Russia and Iran, Qatar plans to more than double LNG output to 77 million tons a year in 2011. It will earn more than $153 billion in gas sales over the next three years, according to the International Monetary Fund.
That means the government will continue to post budget surpluses and can finance 60 percent of the planned investments, according to the Doha-based unit of HSBC Holdings Plc.
Science and Technology
Construction of a deepwater port is to start next year amid expansion of a science and technology park and an education hub. Qatar is also building an energy quarter and new installations for LNG exports in partnership with companies including Royal Dutch Shell Plc, Exxon Mobil Corp. and ConocoPhillips.
Sheikh Hamad bin Khalifa al-Thani, who deposed his father in a bloodless coup in 1995, accelerated the development of gas by plowing billions of dollars into building facilities to export LNG, which is natural gas chilled to liquid form and then transported by ship. By the end of 2010, 14 LNG plants are due to be operational.
The leadership “has put the country onto a very fast growth rate with measured steps,” said Reiji Joseph, director of corporate finance at the Qatari branch of KPMG, the auditing and consulting firm.
At the Pearl, two young women wearing jeans and high heels under traditional black Islamic robes were shopping at French luxury retailer Hermes International SCA. Leaving the store with shopping bags and orange leather Hermes handbags under their arms, they waited for a chauffeur-driven car to pick them up. In the city’s restored Souq Waqif, Doha’s oldest market, diners crowded tables on the terraces of upscale restaurants.
World Exception
While the world experiences recession in 2009, Qatar’s economy is forecast by the IMF to expand at the fastest rate in more than a decade -- 29 percent. The median growth estimate of seven economists surveyed by Bloomberg is 9 percent.
Saudi Arabia, the largest Arab economy and the world’s top oil exporter, expects a 65 billion-riyal ($17 billion) deficit this year, after posting a record budget surplus of 590 billion riyals in 2008. Standard Chartered Plc in January cut its growth forecast for the kingdom to 1 percent from 2 percent.
The United Arab Emirates economy, meanwhile, will contract by between 0.5 and 1 percent in the first half before recovering to annualized growth of 0.5 percent, Standard Chartered says. Dubai, the second-biggest U.A.E. sheikhdom, ran up $80 billion of debts to banks to become a financial and tourism hub.
Villas on Hold
Government-owned real-estate developer Nakheel PJSC has financing for only 700 villas at Dubai’s Waterfront project, after planning to build 10,000. Emirates, the sheikhdom’s airline, announced on March 11 that it will reduce weekly flights to Shanghai and Beijing.
State-owned Qatar Airways Ltd. said the same day that it will add six routes to Australian and Indian cities next winter and raise frequency on other routes at the end of this month.
The Qatari arm of Vinci SA, the world’s biggest construction company, got 2,500 applications last month when it advertised in Dubai, 400 kilometers (250 miles) away, for 100 white-collar jobs. The company, based near Paris, is about to start building the world’s longest bridge, between Qatar and Bahrain. The $4.5 billion project is expected to employ 10,000 people.
“It’s much easier to hire than it was a year ago,” said Gerald Mille, chief executive officer of Vinci’s joint venture with state-owned Qatari Diar. “We put the ads in Dubai and it worked immediately.”
--------------------------------
Transsexual’s Fight for Education Pits Egypt Law Against Islam
Share | Email | Print | A A A
By Daniel Williams
March 17 (Bloomberg) -- To the Egyptian government, to her doctors, and especially to herself, Sally Mursi is a woman. To al-Azhar University, the most prestigious Islamic school in Egypt and the Middle East, she’s a man.
Twenty-one years ago, Mursi, 43, went through a sex-change operation as she was about to enter her fourth year at al-Azhar’s medical school, where classes are segregated by gender under Muslim traditions of piety. Al-Azhar officials expelled her, saying she couldn’t go to the men’s classes because she was impersonating a woman -- or to the women’s classes because she was actually a man.
Since then, al-Azhar has refused to abide by repeated court orders to readmit Mursi, filing appeals. The contest has become a battle between civil law and religious fiat, reflecting conflicting attitudes about sexuality in an increasingly pious country.
For Mursi, the struggle is a singular and lonely quest for self-worth as she challenges a major Islamic institution and copes with public curiosity.
“Mursi is suffering from being the first Egyptian transsexual to go public, combined with the fact that Egypt has not worked out the relation between state and religion,” said Hossam Baghat, 29, legal officer for the Egyptian Initiative for Personal Rights, an independent civil-rights organization.
Two years ago, Ali Gomaa, al-Azhar’s top religious official, issued a decree describing Mursi as corrupt and unfit “to live among men or women.” The edict hit all the newspapers, with photos of Mursi as a belly dancer -- a job she took to make money after her expulsion.
‘Guise of a Woman’
Then al-Azhar lawyers sent her a letter with “to the person in the guise of a woman” on the envelope. The letter went to the wrong address, and suddenly neighbors who didn’t know Sally was once male shunned her. Little boys shouted vulgar catcalls when she went outside, she said in an interview.
“I am sure that I will never be admitted to al-Azhar. No matter. I was created by God, and what I have done is between me and God. I am a good person. I have to clear my name. This is a case of finding respect as a human being.”
In the Muslim Middle East, the issue of transsexuality is far from settled. Kuwait’s parliament passed a law in 2007 that makes it a crime to imitate or dress like the opposite sex. Iran’s government, by contrast, subsidizes sex-change operations, considering transsexuality a medical condition.
If not for the publicity, Mursi would probably attract little attention on the streets of Cairo. She dresses in modest Islamic clothing: a head scarf, long sleeves and slacks to cover what the pious consider immodest.
Suicide Attempt
She originally applied to medical school in 1985 partly to comprehend herself. From adolescence, she felt she was a woman, despite her sexual organs. She once slit her wrists in despair.
Mursi went through three years of psychiatric care before beginning hormone treatment. Her doctors issued a report declaring her fit for a sex change as a person alienated from his biological sex. When the operation to remove her male genitals was complete, the government gave Mursi documents that declared her female. Mohammed Abdullah Mursi became Sally in the eyes of bureaucratic Egypt.
When she reappeared at al-Azhar in 1988, however, the disciplinary committee summoned her, said she was deformed and told her she couldn’t go to classes. That began a series of lawsuits and countersuits that culminated two years ago in a court order that al-Azhar must let Sally in.
‘Exile, Isolation’
After she won, Gomaa, 55, who is also Egypt’s senior Islamic legal authority, issued his decree in favor of the university, saying that “exile, isolation and similar methods” were the way to deal with Mursi. Gomaa’s teachings are widely followed in Egypt, where many people seek Islamic-based advice on everyday affairs.
Al-Azhar appealed to annul the order; a hearing is set for May 6. The university’s lawyer, Ali Abdul Kader, 47, said the thousand-year-old school abides by Islamic, not secular, law.
“Al-Azhar exists to spread Islamic teaching. How can it accept a homosexual? And a belly dancer?” Mursi is simply a eunuch, he said, and a homosexual to boot, all in breach of Islam.
He was sitting in a courtroom with Mursi awaiting the latest hearing on another lawsuit: She is suing al-Azhar for defamation. He chatted amiably, even bawdily, with her.
“You know Sally, if you had kept your equipment, you could have had sextuplets,” he joked. “We men are trying to find ways, you know, to make ours bigger. You get rid of yours.”
Mursi laughed lustily. “Let’s date,” she answered.
Suspect Roundup
For all the mirth, there is intolerance in Egypt toward both transsexuals and gays. Police occasionally round up suspected homosexuals, scan their mobile phones and detain anyone whose number appears in the directory. The country’s professional medical union -- dominated by the Muslim Brotherhood, a group that wants to institute Islamic law in Egypt -- forbade sex- change operations six years ago.
Heba Kotb, who is the Middle East’s only television sex adviser, asserted in an interview that the Muslim religion excludes transsexuality as a medical condition and considers it an expression of homosexuality -- and therefore sinful.
“No one is free to choose one’s own sex,” said Kotb, 41. “You have to accept what you have. He did this to himself and has to pay. I can’t bring myself to call him her.”
Sally’s case “is rare, but it speaks to which law rules in Egypt: the government’s or the religious,” said Mamdouh Nakhla, 44, a lawyer from the Kalema Center for Human Rights who is representing Mursi. “It is unusual that a court would take on al-Azhar. It is to Sally’s credit that she is willing to fight.”
--------------------------
‘Medieval’ U.S. Law Firm Pay Structure Buckles (Update1)
Share | Email | Print | A A A
By Carlyn Kolker
March 16 (Bloomberg) -- U.S. law firms, including Orrick, Herrington & Sutcliffe LLP, Shearman & Sterling LLP and WolfBlock LLP, are abandoning tradition as they cut costs in the deepening recession by imposing merit pay, slashing salaries and generally putting an end to decades of associate entitlement.
The firms are responding to the plunge in corporate, real estate and finance work by overhauling compensation for associates, who often total as many as two-thirds of a firm’s lawyers. Some, like Orrick, are beginning to reward lawyers based on performance rather than seniority. Others plan to cut salaries for starting associates, just two years after top firms raised pay to compete for talent.
“In the current economic crisis, we see the final demise of the medieval guild in the American legal profession,” said Joel Henning, a law firm consultant at Hildebrandt International Inc.
Law firms have operated for decades with associate pay structures that don’t reward performance, Henning said. The industry’s retooling comes as dozens of firms including DLA Piper, the world’s second-largest law firm with 3,700 lawyers; Latham & Watkins LLP; White & Case LLP; Holland & Knight LLP and Orrick, have collectively terminated thousands of attorneys.
“One of the best things firms are doing is breaking the ridiculous lockstep structure of associate compensation,” Henning said. “There is no other profession that operates that way.”
1,100-Lawyer Firm
Orrick is a 1,100-attorney firm based in San Francisco whose clients include Wells Fargo & Co., the third biggest U.S. bank by deposits, and PG&E Corp., California’s largest utility owner. The firm said it plans to discard guaranteed raises to associates in July. It has fired lawyers twice in the past year, including 100 this month and 40 in November.
Associate pay increases will be based on merit, not just on seniority as has been done throughout the legal industry, Orrick Chief Executive Officer Ralph Baxter said in an interview.
The firm originally intended to introduce the change next year. It decided to switch in July because of the deterioration of the economy, Baxter said.
Orrick will also introduce new tiers of associates, or salaried lawyers, replacing the traditional single-track system where some become partners who share in the firm’s profits after about eight years, Baxter said. Under the new structure, associates will be able to stay at the firm permanently, drawing salaries, he said.
Law Firm Reforms
Orrick’s reforms will let lawyers know if they’re likely to make partner and allow those unwilling to work the long hours required for that position to stay at the firm, Baxter said.
Clients typically pay much less for work done by a law firm associate than that performed by a partner.
“We will be perceived as a law firm that is adapting to the marketplace,” Baxter said.
Washington-based law firm Howrey introduced a similar plan in January, and McGuireWoods LLP started one two years ago.
Associates are evaluated based on how many hours they bill, feedback from partners and client satisfaction, McGuireWoods Managing Partner Thomas Cabaniss said in an interview.
New York-based Shearman & Sterling also will base associate bonuses on merit, rather than grant them in lockstep fashion, partner Matthew Bersani said in February.
When Howrey announced it was switching compensation systems in 2007, the firm was seen as “committing suicide” because it wouldn’t be able to compete for personnel, said law firm consultant Peter Zeughauser, chairman of Newport Beach, California-based Zeughauser Group.
‘Substantial Number’
Now, Zeughauser said, “a very substantial number of firms are considering something like this.”
Howrey spent more than a year seeking advice from consultants and input from associates before finally implementing the new merit-based compensation program, firm spokeswoman Christine Till said in an interview.
The current standard for starting pay at the top firms, about $160,000, was set in January 2007 when New York-based firms including Simpson Thacher & Bartlett LLP and Sullivan & Cromwell LLP raised pay 10 percent from $145,000. Other firms across the country followed suit. Salaries for most senior associates at the biggest firms seldom rise past $400,000, Henning said.
Associate salaries at some firms are less than 10 percent of partners’ shares of the profits. Per-partner profit at New York’s Cravath, Swaine & Moore LLP was $2.5 million last year. It was $2.14 million at Philadelphia-based Dechert LLP, according to the American Lawyer, a trade magazine.
Richmond, Virginia-based McGuireWoods this month cut starting salaries by 10 percent, from $160,000 to $144,000, and froze pay for existing associates.
10 Percent Cut
Philadelphia-based WolfBlock cut pay at all associate levels by 10 percent in February to preserve five to 10 jobs, Chairman Mark Alderman said. The 300-attorney firm eliminated some positions, he said, declining to say how many.
Some New York-based and so-called national firms are also considering cutting first-year pay, according to two heads of large firms who declined to be named because the discussions aren’t public.
“It’s unprecedented to have a rollback,” said Zeughauser.
Other firms have introduced less drastic measures to keep down associate costs.
Leave the Firm
Pillsbury Winthrop Shaw Pittman LLP, the San Francisco- based firm whose clients include Chevron Corp., the second- biggest U.S. energy company, and Bank of America Corp., the biggest U.S. bank, announced this month it would pay associates a year’s salary if they left the firm and worked for a year at an approved charity or legal-services organization. The firm has fired 55 associates this year. The salary would be what the organization would pay them as an employee, the firm said.
“At Pillsbury, we start with the following premise,” said firm Chairman James Rishwain. “We are in a new economy, and no assumption is safe.”
Skadden, Arps, Slate, Meagher & Flom LLP, the New York- based law firm, will pay associates one-third of their salaries to work at public interest organizations for a year, the firm announced this month.
The firm is also making the offer to associates who were slated to begin working at the firm later this year, firm executive partner Robert Sheehan said in a March 12 memo.
The reduction in law firm compensation brought on by the recession may reverse years of excessive pay for attorneys, said Henning, the law firm consultant.
“This is an opportunity to do things that should have been done a long time ago,” he said.
--------------------------
China forex reserves drop 30 bln dlrs
56 mins ago
AFP
* Print Story
China's foreign exchange reserves, the world's largest, fell by about 30 billion dollars in January, partially due to a drop in the value of non-dollar assets, Chinese media reported Wednesday.
China's foreign exchange reserves, the world's largest, fell by about 30 billion dollars …More Enlarge photo
The report in the China Business News, which cited an unnamed source, did not specify the size of China's foreign exchange reserves at the end of January.
China's foreign exchange reserves stood at 1.95 trillion dollars at the end of last year. The central bank is scheduled to release quarterly figures of reserves in mid-April.
China's foreign exchange reserves fell 25.9 billion dollars in October, the first drop since December 2003, according to earlier reports.
China is believed to have invested the bulk of its reserves in assets denominated in US dollar-denominated assets, such as safe but low-yielding US Treasury bonds, but has been working to diversify to improve returns.
China may have lost more than 80 billion dollars of its foreign exchange reserves after buying into equities just before world markets collapsed last year, the Financial Times said Monday.
------------------------
SKorea expected to initial EU trade pact in May
1 hour 8 mins ago
AFP
* Print Story
South Korea said Wednesday it expects to initial a free trade agreement (FTA) with the European Union in May, as both sides prepare to wrap up almost two years of negotiations.
Lee Hye-Min, deputy minister for trade and chief negotiator, said talks in Seoul next Monday and Tuesday will be the final negotiating round.
"The upcoming eighth round of negotiations will be the final round of talks between the chief South Korean and EU FTA negotiators," Lee told a briefing.
"It will be possible to initial the agreement in late May."
Next week's talks would focus on lifting tariffs on industrial goods and agricultural products among other topics.
Based on their outcome trade ministers from both sides will meet to finalise and formally declare the deal, Lee said, adding no time and place for this has been fixed.
Yonhap news agency, quoting multiple officials, said Monday the two sides had agreed to eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years.
Regarding the sensitive auto trade, they agreed to eliminate tariffs on cars with an engine displacement of over 2.5 litres within three years, it said.
For less powerful cars they reportedly agreed to scrap tariffs within five years.
According to Dong-a Ilbo newspaper, Brussels has suggested the two sides officially announce their deal at a meeting of G20 countries in London on April 2 and Seoul was "positively" reviewing the offer.
Asia's fourth-largest economy started talks in May 2007 with the EU. The 27-nation bloc was South Korea's second largest trading partner after China last year, with two-way trade reaching about 80 billion dollars.
The European bloc is the largest foreign investor in South Korea, with outstanding investment reaching 43.40 billion dollars at the end of 2007.
European carmakers had called last month for a halt in the negotiations, saying the European Union risks getting too little from South Korea in return for granting it full access.
South Korea currently exports 600,000 vehicles to Europe annually while the European Union exports only 22,000, according to the carmakers.
------------------------
Eurozone recession to deepen, says IMF
By Krishna Guha in Washington, Bertrand Benoit in Berlin and Chris Giles and Daniel Pimlott in London
Published: March 17 2009 21:23 | Last updated: March 17 2009 23:34
The International Monetary Fund will on Wednesday tear up forecasts it made for the world economy at the start of this year and predict a deeper recession with a heavier slump in the eurozone.
Fund economists have responded to the pace and severity of the downturn, in light of the severe contraction in the world economy in the last three months of 2008, to cut further gloomy forecasts for growth in 2009 that it made in January.
Teresa Ter-Minassian, an adviser to Dominique Strauss-Kahn, the IMF managing director, dropped a strong hint on Tuesday of what to expect.
Citing internal draft forecasts drawn up in late February, she said the IMF expected the world economy to shrink by 0.6 per cent this year, instead of growing 0.5 per cent as it had predicted.
“The scenario will be worse but the managing director has already said this,” she said in Lisbon. “This is a true global crisis, impacting all parts of the world and countries at different levels of development.”
The eurozone economy was forecast to contract by 3.2 per cent in 2009, she said, against the earlier forecast of a 2 per cent decline. The US would shrink by 2.6 per cent (1.6 per cent), and Japan 5 per cent (2.6 per cent), making it the worst-hit big economy. The IMF in Washington said the figures cited by Ms Ter-Minassian were “unofficial” and “out of date”.
The imminent revisions come amid differences between Europe and the US over how to tackle the recession. Christoph Schmidt, an economic adviser to Angela Merkel, Germany’s chancellor, said mounting public debt and excessive liquidity could tip the US into an inflationary spiral.
Professor Schmidt’s comments are unlikely to be welcomed by the Obama administration, which is advocating looser fiscal and monetary policies worldwide.
“I see an inflationary risk in the US in the medium term because of the development of money supply there,” he said. “There is a danger that [governments] could start considering inflation as a way to reduce the burden of public debt.”
Mervyn King, Bank of England governor, called on big economies to take collective action to boost growth and for governments to “be prepared to hold whatever proportion of equity capital turns out to be necessary” in vulnerable banks.
The Bank of Japan unveiled a draft plan to provide up to Y1,000bn (€7.7bn) in subordinated loans to large commercial banks, in its latest effort to stem the global economic crisis.
The BoJ move follows the Bank of England’s decision to buy UK government debt and the Swiss National Bank’s announcement of its plan to intervene in currency markets to drive down the Swiss franc.
-------------------------
07:42 GMT, Tuesday, 17 March 2009
Ziedan wins Arabic fiction prize
Youssef Ziedan, an Egyptian academic and author
Youssef Ziedan, an Egyptian academic and author, has won the second International Prize for Arabic Fiction for his novel Azazeel, or Beelzebub.
He will receive US $60,000 (£43,000), as well as a guarantee that his work will be translated into English.
The novel, set in 5th Century Egypt and Syria, focuses on doctrinal conflicts in early Christianity.
It was criticised by Egypt's Coptic Church as an attempt to destroy Christian doctrine.
The prize is awarded in association with Britain's prestigious Booker Prize Foundation and is funded by the Emirates Foundation.
-------------------------
US Senator: AIG execs should consider suicide
17 hours ago
WASHINGTON (AFP) — A prominent US Senator has suggested that top executives of the bailed-out insurer AIG ought to quit or kill themselves, which he described as the Japanese model of honorably taking responsibility.
Senator Charles Grassley, the top Republican on the Senate Finance Committee, told a radio station in his home state of Iowa that the insurance giant's shamed leaders had stoked public anger with lavish bonuses.
"The first thing that would make me feel a little bit better towards them [is] if they would follow the Japanese example and come before the American people and take that deep bow and say I'm sorry and then either do one of two things: resign or go commit suicide," Grassley told WMT radio.
"In the case of the Japanese, they usually commit suicide before they make any apology," he said after AIG awarded some 165 million dollars in bonuses -- going largely to the same London-based traders who brought ruin to the firm.
American International Group has received 180 billion dollars in rescue funding from taxpayers, but a backlash has grown amid reports of lavish parties and, now, bonuses.
"The attitude of these corporate executives and bank executives, and most of them are in New York, that somehow they're not responsible for their company going into the tank," Grassley said.
"I suggest, you know, obviously, maybe they ought to be removed," he said.
AIG was deemed to be too big to fail, given the complex ties it built with financial institutions worldwide through so-called credit default swaps linked to the tanking property market.
---------------------------
March 17th, 2009
Tell us what you really think Senator Grassley
Post a comment (8)
Posted by: Donna Smith
Tags: Front Row Washington, AIG, Chuck Grassley, financial bailout, House of Representatives, politics, Senate
WASHINGTON - How outraged can they be?
U.S. lawmakers are clearly outraged by the $165 million in bonuses being paid to executives at bailed-out insurer American International Group. For the last two days, they’ve been talking about it in press releases, at news conference and in speeches on the floor of the Senate and House.
But no one says it more colorfully and more bluntly than Republican Senator Chuck Grassley — so far.
grassley“From my standpoint, it’s irresponsible for corporations to give bonuses, at this time, when they are so sucking the tit of the taxpayer,” Grassley said at a news conference on Tuesday.
Grassley, an Iowa farmer, is most likely just channeling what many taxpayers are thinking.
The U.S. Treasury and Federal Reserve has put up to $180 billion at AIG’s disposal to keep them afloat and prevent the insurance giant from sinking the global financial system. The company said it had contract obligations to pay out some $165 million in retention bonuses to employees.
Grassley on Monday had some other colorful comments about AIG executives saying they should perhaps adopt what he called the Japanese approach to taking responsibility for their actions and “resign or go commit suicide.”
He pulled back from that “rhetoric” saying he obviously does not want people to kill themselves.
But Grassley says executives at AIG and other companies that ran to the government for money after “running their corporations into the ground” owe U.S. taxpayers an apology and ought to consider resigning.
Grassley’s Senate office phones have been ringing off the hook since the suicide remark with about half the callers saying his remarks were insensitive and half agreeing with him, an aide said.
Grassley also received numerous comments of praise on his Facebook page, including one who lauded that the senator “had the guts to stand up and say what the taxpayers are thinking.”
--------------------------------
Syria Will Appoint Ambassador to Lebanon Only After Lebanese Elections
Pro-Syrian Lebanese politicians told the Lebanese daily Al-Nahar that Syria would not appoint an ambassador to Lebanon before the Lebanese parliamentary elections, slated for June 2009, and before the makeup of the new parliament and its head become known. They added that Syria would not allow the election of another leader who would boycott it, as did Al-Siniora.
The Lebanese daily Al-Safir reported that Rami Murtadha, advisor to the Lebanese foreign minister, would arrive in Damascus tomorrow (March 16, 2009) for the official opening of the Lebanese embassy in Syria, and that he would serve as a deputy to the Lebanese ambassador.
Source: Al-Safir, Lebanon, March 14, 2009; Al-Nahar, Lebanon, March 15, 2009.
-----------------------
Lebanon opens embassy in Syria for first time
By ALBERT AJI – 1 day ago
DAMASCUS, Syria (AP) — Lebanon on Monday opened an embassy in Syria, sealing the establishment of full diplomatic relations between the long-feuding rivals for the first time since they gained independence from France in the 1940s.
Relations between the neighboring countries reached a turning point in August when they agreed to establish ties and demarcate their contentious border. The agreement marked a final break in Syria's longtime dominance over its smaller neighbor.
Syria opened an embassy in Beirut in December.
Full diplomatic relations between the two countries has been a pressing demand from Lebanon's anti-Syrian factions, the United States and other Western nations.
Lebanon has named career diplomat Michel Khoury, currently Lebanon's ambassador to Cyprus, as its ambassador in Damascus. Khoury is expected to take office next month.
The new Lebanese Embassy, situated next to the U.S. mission, was opened with little fanfare. Lebanese Charge d'Affaires Rami Mourtadaha watched as the Lebanese flag was raised over the building.
A sign reading "The Embassy of the Lebanese Republic" was posted at the entrance.
No Syrian officials were seen at the opening ceremony and Syria has yet to name its ambassador to Lebanon.
Syrian Foreign Minister Walid al-Moallem said his country will name an ambassador to Lebanon soon, but gave no specific date.
"We raised our flag (at our embassy) in Lebanon some time ago. We hope to appoint a Syrian ambassador to Lebanon soon," al-Moallem told reporters at a joint press conference in Damascus with Arab League chief Amr Moussa.
Moussa praised the "new push" in Syrian-Lebanese relations, saying establishing full diplomatic ties is the best way to improve the countries' bilateral relations.
Syria has dominated its smaller neighbor since the 1970s, when it sent its army into Lebanon, then engulfed in civil war.
Syria's hold unraveled in 2005, after former Lebanese Prime Minister Rafik Hariri was killed in a car bombing that many Lebanese blame on Syria — a charge Damascus denies.
After Hariri's assassination, Syria caved to U.S.-led international pressure and Lebanese outrage and withdrew its troops from Lebanon in April 2005.
-----------------------
Lebanese Embassy opens in Damascus in an unprecedented development
Tuesday, March 17, 2009 11:14 GMT
For the first time in Lebanese-Syrian relations history, a Lebanese Embassy opened on Monday in Damascus as a start of an unprecedented chapter of diplomatic relations between Lebanon and Syria never seen before since the two states were established after the fall of the Othman regime in 1920.
A Lebanese official reported that the Lebanese flag was raised on the building in central Damascus noting that Lebanon has named Ambassador Michel El Khoury to Damascus who will join the Embassy on a later stage while Damascus did not name yet its Ambassador to Lebanon.
------------------------
11:23 GMT, Monday, 16 March 2009
Lebanese flag raised in Damascus
Lebanese embassy in Damascus
Lebanon has opened its first embassy in the Syrian capital Damascus five months after the neighbours set up diplomatic ties following decades of turbulence.
Lebanese charge d'affaires Rami Mortada raised his country's distinctive cedar flag over the building in Abu Remmaneh.
The diplomatic deal in October ended a 60-year impasse since independence was gained from colonial France.
Lebanon has named Michel al-Khoury, currently stationed in Cyprus, as its first ambassador to Syria.
Syria has not named its envoy to Lebanon. It opened an embassy in Beirut in December.
Tension has been high between the neighbours since the 2005 assassination of Lebanon's former Prime Minister Rafik Hariri. Many Lebanese blame Damascus for the killing, but it denies involvement.
In April 2005, the Syrian army pulled out of Lebanon, ending a 29-year presence during which Damascus held the reins of power in Lebanon.
-------------------------
Syria: Japanese Grant for the Rehabilitation of Al-Neirab Camp in Aleppo
Japanese government and United Nations Relief and Works Agency for Palestine Refugees (UNRWA) signed Sunday an agreement in which Japan offers USD 4.3 million to rehabilitate al-Neirab camp in Aleppo.
The grant will be allocated to building a school and two residential complexes of 60 units as well as paving roads and constructing centers for social development.
Governor of Aleppo Tamer al-Hejjeh pointed out to the significance of cooperation between Japanese government and UNRWA, calling for carrying out more of societal development projects in al-Neirab camp and upgrading service and living conditions of the inhabitants.
Japanese Ambassador in Damascus Masaki Koniiida hailed the Syrian government's efforts exerted in caring and providing services for Palestinian refugees, voicing hope that this donation will help improve the living conditions of the Palestinians and realizing societal development.
UNRWA Deputy Commissioner- General Filippo Grandi praised the Japanese Grant which aims at achieving human and societal development in the camp making it an example to follow by other donors countries.
-------------------------
UNRWA: Japan contributes US$4.3 million to UNRWA Neirab Rehabilitation Project in Aleppo
His Excellency Masaki Kunieda, the Japanese Ambassador to Syria, signed an agreement today with UNRWA Deputy Commissioner-General Filippo Grandi for a US$ 4.3 million grant for the Neirab Rehabilitation Project, Aleppo.
The funds will be used for the construction of one school, two neighborhood blocks (i.e. 60 housing units, roads, infrastructure and outside spaces), one community centre and a range of community development activities focusing on the creation of grassroots community activities and services.
Welcoming the donation, Grandi said: "This is a further evidence of Japan's support for Palestine refugees and demonstrates the unique partnership between UNRWA and Japan. With this contribution, Japan is helping to give these refugees a home that they can feel proud to live in and a real sense of community. It’s a genuine contribution to the peace and stability of the region." He also expressed his profound gratitude for the generous and continued assistance from Japan and affirmed the importance of this housing project, which he described as essential in improving the living conditions of this vulnerable group. He also thanked the Syrian government for the continued efforts to support the Neirab Rehabilitation Project.
Ambassador Kunieda stressed that Japan is committed to continuing its support for Palestine refugees. "Our contribution testifies Japan's continued support to improve the living conditions of Palestine refugees and comes within Japan's peace-building scheme."
Mr. Ali Mustafa, Director-General of the General Authority for Palestinian Arab Refugees in Syria expressed appreciation to the Japanese government for its assistance to UNRWA, and to the Syrian government for its overall support to Palestine refugees living in Syria.
The ceremony was attended by the Governor of Aleppo, Dr. Tamer al-Hijjeh, who underlined the continued support of the Aleppo Governorate to the Neirab Rehabilitation Project and highlighted the solidarity of the Syrian people in support of UNRWA's emergency appeal for Gaza.
The project, one of the biggest that UNRWA has implemented in its sixty year history, will rehabilitate the Neirab camp which houses 18,000 refugees. Neirab has some of the worst living conditions among the Agency’s 58 camps. The project, which underlines UNRWA’s commitment to community participation, involves the refugees themselves at every step of the rehabilitation process including planning and design.
Japan has been a major donor to Agency projects for many years. The Palestine refugee community in Syria has benefited from the highly successful Japanese International Cooperation Agency (JICA) volunteers' scheme and their work with UNRWA school children.
Some 4.6 million Palestine refugees in UNRWA’s five fields of operations – Jordan, Lebanon, Syria, Gaza and the West Bank, including East Jerusalem – are eligible for Agency services, including education, healthcare, social services, shelter, micro-credit loans and emergency aid. UNRWA employs nearly 30,000 staff, the vast majority of whom are Palestine refugees. UNRWA’s operations are financed almost entirely by voluntary contributions from donors.
-----------------------
シリア・アラブ共和国に対する無償資金協力「ネイラブ・パレスチナ難民キャンプ整備計画」に関する交換公文署名式について
平成21年3月15日
1. 3月15日（日曜日）（現地時間同日）、シリアのアレッポ県に所在するネイラブ・パレスチナ難民キャンプにおいて、我が方国枝昌樹駐シリア国大使と先方フィリッポ・グランディ国連パレスチナ難民救済事業機関（UNRWA）事務次長（Mr. Filippo Grandi, Deputy Commissioner-General, the United Nations Relief and Works Agency for Palestine Refugees in the Near East）との間で、3億8,900万円の平和構築のための無償資金協力「ネイラブ・パレスチナ難民キャンプ整備計画」（the Programme for Camp Rehabilitation and Community Development in Neirab Camp）に関する交換公文の署名式が行われました。
2. 1948年の第一次中東戦争により、多くの人々がヨルダン川西岸、ガザ、そしてシリア、ヨルダン等の周辺諸国に流出しパレスチナ難民となりました。シリア北部のネイラブ難民キャンプには現在も約1万8,000人の難民が滞留していますが、その生活環境は非常に厳しい状況にあります。特に、 2008年末に生じたガザ情勢の悪化は、シリアを含むイスラエル周辺地域に滞留するパレスチナ難民の将来への不安や反イスラエル感情を急激に高めていることから、国際社会としても、これら難民の急進化を防止するための対策を早急に図っていく必要性が生じています。本計画は、ネイラブ難民キャンプ内の生活環境を改善することにより、同キャンプ難民の穏健化を図り、中東和平プロセスの進展を側面的に支援することを目的としています。
3. 本計画により、約430名の就学児童のための学習環境を整備するために学校が建設されるほか、約280名の難民キャンプ住民のための住宅が建設され、併せてコミュニティ・センターの整備及び地域社会開発支援活動を通じて、約2,200名の難民が啓発教育や各種研修活動等を受講できるようになります。
4. 本計画は、3月2日（月曜日）にエジプトで開催された、ガザ復興のためのパレスチナ経済支援に関する国際会議において、伊藤信太郎外務副大臣が表明した当面2億ドルの支援の一環として実施するものです。
（参考）
1. シリア・アラブ共和国は、面積約18.5万平方キロメートル、人口1,990万人（2007年世銀）、人口1人当たりのGNI（国民総所得）約1,760米ドル（2007年世銀）。
2. 計画実施地域地図・写真（添付）（PDF）PDF
http://www.mofa.go.jp/mofaj/gaiko/oda/data/zyoukyou/h20/090315_1.html
---------------------------
Crop Scientists Say Biotechnology Seed Companies Are Thwarting Research
Article Tools Sponsored By
By ANDREW POLLACK
Published: February 19, 2009
Biotechnology companies are keeping university scientists from fully researching the effectiveness and environmental impact of the industry’s genetically modified crops, according to an unusual complaint issued by a group of those scientists.
Skip to next paragraph
Enlarge This Image
Craig Lassig for The New York Times
Insect-resistant corn varieties are bred to repel rootworms.
Enlarge This Image
Craig Lassig for The New York Times
Ken Ostlie, an entomologist, said Syngenta had withdrawn its permission and a study about corn and rootworms had to stop.
“No truly independent research can be legally conducted on many critical questions,” the scientists wrote in a statement submitted to the Environmental Protection Agency. The E.P.A. is seeking public comments for scientific meetings it will hold next week on biotech crops.
The statement will probably give support to critics of biotech crops, like environmental groups, who have long complained that the crops have not been studied thoroughly enough and could have unintended health and environmental consequences.
The researchers, 26 corn-insect specialists, withheld their names because they feared being cut off from research by the companies. But several of them agreed in interviews to have their names used.
The problem, the scientists say, is that farmers and other buyers of genetically engineered seeds have to sign an agreement meant to ensure that growers honor company patent rights and environmental regulations. But the agreements also prohibit growing the crops for research purposes.
So while university scientists can freely buy pesticides or conventional seeds for their research, they cannot do that with genetically engineered seeds. Instead, they must seek permission from the seed companies. And sometimes that permission is denied or the company insists on reviewing any findings before they can be published, they say.
Such agreements have long been a problem, the scientists said, but they are going public now because frustration has been building.
“If a company can control the research that appears in the public domain, they can reduce the potential negatives that can come out of any research,” said Ken Ostlie, an entomologist at the University of Minnesota, who was one of the scientists who had signed the statement.
What is striking is that the scientists issuing the protest, who are mainly from land-grant universities with big agricultural programs, say they are not opposed to the technology. Rather, they say, the industry’s chokehold on research means that they cannot supply some information to farmers about how best to grow the crops. And, they say, the data being provided to government regulators is being “unduly limited.”
The companies “have the potential to launder the data, the information that is submitted to E.P.A.,” said Elson J. Shields, a professor of entomology at Cornell.
William S. Niebur, the vice president in charge of crop research for DuPont, which owns the big seed company Pioneer Hi-Bred, defended his company’s policies. He said that because genetically engineered crops were regulated by the government, companies must carefully police how they are grown.
“We have to protect our relationship with governmental agencies by having very strict control measures on that technology,” he said.
But he added that he would welcome a chance to talk to the scientists about their concerns.
Monsanto and Syngenta, two other biotech seed companies, said Thursday that they supported university research. But as did Pioneer, they said their contracts with seed buyers were meant to protect their intellectual property and meet their regulatory obligations.
But an E.P.A. spokesman, Dale Kemery, said Thursday that the government required only management of the crops’ insect resistance and that any other contractual restrictions were put in place by the companies.
The growers’ agreement from Syngenta not only prohibits research in general but specifically says a seed buyer cannot compare Syngenta’s product with any rival crop.
Dr. Ostlie, at the University of Minnesota, said he had permission from three companies in 2007 to compare how well their insect-resistant corn varieties fared against the rootworms found in his state. But in 2008, Syngenta, one of the three companies, withdrew its permission and the study had to stop.
“The company just decided it was not in its best interest to let it continue,” Dr. Ostlie said.
Mark A. Boetel, associate professor of entomology at North Dakota State University, said that before genetically engineered sugar beet seeds were sold to farmers for the first time last year, he wanted to test how the crop would react to an insecticide treatment. But the university could not come to an agreement with the companies responsible, Monsanto and Syngenta, over publishing and intellectual property rights.
Chris DiFonzo, an entomologist at Michigan State University, said that when she conducted surveys of insects, she avoided fields with transgenic crops because her presence would put the farmer in violation of the grower’s agreement.
An E.P.A. scientific advisory panel plans to hold two meetings next week. One will consider a request from Pioneer Hi-Bred for a new method that would reduce how much of a farmer’s field must be set aside as a refuge aimed at preventing insects from becoming resistant to its insect-resistant corn.
The other meeting will look more broadly at insect-resistant biotech crops.
Christian Krupke, an assistant professor at Purdue, said that because outside scientists could not study Pioneer’s strategy, “I don’t think the potential drawbacks have been critically evaluated by as many people as they should have been.”
Dr. Krupke is chairman of the committee that drafted the statement, but he would not say whether he had signed it.
Dr. Niebur of Pioneer said the company had collaborated in preparing its data with universities in Illinois, Iowa and Nebraska, the states most affected by the particular pest.
Dr. Shields of Cornell said financing for agricultural research had gradually shifted from the public sector to the private sector. That makes many scientists at universities dependent on financing or technical cooperation from the big seed companies.
“People are afraid of being blacklisted,” he said. “If your sole job is to work on corn insects and you need the latest corn varieties and the companies decide not to give it to you, you can’t do your job.”
-------------------------
BoJ ramps up purchase of government bonds
By Mure Dickie in Tokyo
Published: March 18 2009 12:52 | Last updated: March 18 2009 12:52
The Bank of Japan is to increase its purchases of Japanese government bonds by nearly a third, the latest in a series of increasingly assertive measures by the central bank to respond to the pressures created by the global financial crisis and a fierce domestic recession.
The BoJ said its decision to raise buying of JGBs from Y1,400bn a month to Y1,800bn was intended to ensure there was enough liquidity in the financial system to ensure its stability.
However, the move will also help to hold down bond yields and smooth financing for Japan’s government just as it prepares to start drawing up a new package of fiscal measures to stimulate the world’s second largest economy.
The BoJ has been widely criticised by Japanese politicians and officials for what they see as its overly-conservative response to the current downturn, the country’s sharpest in decades.
Masaaki Shirakawa, BoJ governor, is deeply reluctant to return to the policy of “quantitative easing” that the bank used to try to boost growth from 2001 to 2006 and the bank’s policy board unanimously voted to maintain its current 0.1 policy interest rate.
However, the BoJ has become gradually more bold in its efforts to boost financial system liquidity and support financial institutions, this week unveiling a draft plan that would see it provide up to Y1,000bn in subordinated loans to large commercial banks.
The loan scheme is intended as a safeguard to be used if conditions worsen for local lenders that have so far been much less affected by the global financial turmoil that US or European counterparts but have seen their capital bases hit by falls in the value of their equity holdings.
By supporting banks, the BoJ hopes to encourage lending to the country’s corporate sector.
The bank, which is already buying corporate debt itself to help ensure companies can access credit, said on Wednesday that fundraising for the crucial financial year-end period through this month had “mostly been completed”.
However, the bank added markets could remain under stress, with economic conditions “likely to continue deteriorating for the time being”.
By increasing its JGB purchases and buying corporate debt, the BoJ is mirroring in a more cautious way the balance sheet expansions being undertaken by counterparts in the US and UK.
However, the BoJ has avoided describing its actions as marking a return to quantitative easing, which it defines as providing excess liquidity to the financial system by targeting the level of reserves held by banks along with a commitment to long-term low or zero interest rates.
Some analysts say the distinction is increasingly irrelevant. “The Bank’s actions are boosting the monetary base and ramping up its balance sheet, which is QE in all but name,” wrote Julian Jessop chief international economist at Capital Economics in a research note.
The increased purchase of government bonds will be welcomed within the administration of Taro Aso, Japan’s prime minister, who is currently preparing the ground for a new package of stimulus measures likely to be sent to the Diet early in the fiscal year that begins in April.
------------------------
Sovereign wealth funds: Nobody wants to be first to buy in
By Michiyo Nakamoto
Published: March 17 2009 11:47 | Last updated: March 17 2009 11:47
To say that foreign funds have generally not felt welcome in Japan would be an understatement.
Until recently, foreign funds of all stripes, whether activist hedgers or longer-term private equity, were generally jumbled together and described unflatteringly as “vultures”.
Japanese red tape was another barrier that put off many foreign outfits.
“A lot of investors told us that when they considered investing in Japan and looked into the matter, they identified many obstacles,” says Shoichi Saito, head of Sovereign Wealth Fund sales at Daiwa SMBC, the investment bank.
But a growing recognition that Japan needs investment from abroad to sustain growth, coupled with the global crisis, is breaking down some of the protectionist forces that have hitherto discouraged many foreign funds from investing in Japan.
In an unexpected shift in policy, the Japanese government is poised from this April to relax rules that have imposed a huge tax burden on foreign funds investing in Japan.
What is more, government institutions from the Ministry of Economy, Trade and Industry, to the Financial Services Agency are taking the initiative to encourage investment from foreign funds into Japan.
“Japan’s real economy is declining, so companies will have to spin off non-core businesses and investment from funds will become very important,” says Tetsuya Hamabe, director of the International Finance Division at Meti.
Amid the global financial crisis, Japanese banks will not provide funds to restructure and revitalise companies, nor are western financial institutions capable of doing so, Mr Hamabe says.
Equally important, Japan needs risk capital to help support venture businesses, which can provide new drivers of economic growth.
Japanese funds are generally too small to provide the degree of risk capital needed to ensure the country can restructure existing industries and sow the seeds of new businesses, Mr Hamabe says.
In order to encourage more funds to invest in Japan, Meti worked with the Ministry of Finance to implement changes to Japan’s permanent establishment taxation.
Under the existing rules, non-resident investors face capital gains tax in Japan if they invest through an offshore partnership which has a 25 per cent or more stake in a Japanese company.
Under the amended rules, however, such investors will not be subject to capital gains tax in Japan if they fulfill certain conditions, of which the critical one is that they do not individually own a 25 per cent stake in the Japanese company.
The change was particularly important to attract sovereign wealth funds from Middle Eastern countries, which do not have tax treaties with Japan that would exempt them from those capital gains tax rules.
While many US and European private equity funds already have operations in Japan, and Singapore and Norway’s sovereign wealth funds have made several investments in Japan, sovereign wealth funds from the Middle East are a relatively untapped source of new money.
In November 2007, Dubai International Capital surprised the world by taking an undisclosed stake in Sony, estimated at between $500m and $1bn. In that same year, the Abu Dhabi government’s oil fund, IPIC, took a 20 per cent stake in Cosmo Oil, a Japanese oil refiner and distributor.
But such examples are few and far between.
“To be blunt, Middle Eastern investment in Japan has been basically zero,” says Yasutake Sakamoto, an official in the sovereign wealth fund sales unit at Daiwa SMBC.
While Standard & Poor’s teamed up with the Tokyo Stock Exchange and launched an index of shariah-compliant listed companies in Japan in 2007, there are still no products, such as exchange traded funds, based on the index, according to the TSE.
One of the problems is a lack of familiarity among Middle Eastern countries about Japan. And the lack of precedents makes it difficult for Middle Eastern sovereign wealth funds to take the plunge, Mr Sakamoto says.
“They are all interested, but nobody wants to be the one to jump in first,” says Mr Saito.
That is not surprising, considering that those who did invest are likely to be nursing huge losses, as they are in other parts of the world.
Sony’s share price is about 70 per cent below its level of about Y6,000 in November, 2007, when DIC took its stake.
What is more, Japanese companies have not been particularly open to investments from funds, Middle Eastern or otherwise.
Nevertheless, there is optimism that sovereign wealth funds in general, and Middle Eastern ones in particular, will look increasingly to Japan as a potential market for their significant funds.
Japanese technology, particularly that related to the environment, should be of interest to Middle East SWFs, which want to introduce advanced technology to their countries and create jobs, points out Mr Saito.
Meti, for its part, is keen to attract investment into start-ups in new technology, ranging from solar energy to advanced biotechnology.
“Until now, Japan wasn’t even on the radar screen,” says Mr Saito.
With fierce competition for Middle Eastern investment from countries, such as Singapore, Japanese officials are aware that they need to market the attractions of investing in Japan.
The grim outlook for Japanese company earnings amid the global recession is another deterrent to investment.
But “there is no question that in the medium to long term, foreign SWF’s investments in Japan will increase,” says Mr Saito.
“It’s a question of timing,” he explains.
-------------------------
S&P applies credit rating downgrades across Dubai
By Robin Wigglesworth in Abu Dhabi
Published: March 18 2009 02:00 | Last updated: March 18 2009 02:00
Standard & Poor's lowered its ratings on a series of big government-linked companies in Dubai yesterday, owing to the emirate's deteriorating economic outlook.
The credit rating agency also put four Dubai-based banks on review for downgrade, predicting that a contracting economy and wilting property market will weigh on the emirate's financial institutions.
Dubai's half-decade of rapid growth and extravagant construction projects has been abruptly reversed by the credit crunch, exposing an $80bn pool of largely short-term debt.
But while default risks have faded owing to support from the United Arab Emirates government - of which Dubai is one of seven small states - the weakening
property sector is increasingly causing concern.
Hundreds of billions of dollars of projects have been shelved or cancelled after a lack of financing and thousands of expatriates who have lost their jobs are fleeing, sometimes absconding from mortgage and credit card debts.
"The global economic downturn continues to depress some of Dubai's key economic sectors, including trade, tourism and commerce," the rating agency said in a statement.
S&P added: "Demand in the all-important real estate sector also continues to show clear signs of having abated, with indications that a sharp correction in the real estate market, and an associated contraction in development and construction, is currently under way."
The rating agency expects Dubai's economy to contract between 2 per cent and 4 per cent this year.
Emaar Properties, DIFC Investments, DP World, Jebel Ali Free Zone, Dubai Multi Commodities Centre Authority and Dubai Holding Commercial Operations Group - an investment vehicle owned by Dubai's ruler - were all downgraded and kept on outlook for further rating cuts.
The outlook for the emirate's financial sector is also dimming.
Profits are falling at banks and analysts warn of a rise in non-performing loans.
Mashreqbank, Dubai Islam-ic Bank and the debt of merged Emirates Bank International and National Bank of Dubai were all placed on review for downgrade by S&P.
The agency said it expected the "interventionist" federal government to shore up systemically important banks and government-linked entities, adding some support to long-term ratings.
Dubai has been extended a $10bn lifeline by the federal government.
-------------------------
Israel's technology entrepreneurs switch from growth to survival
By Vita Bekker and Tobias Buck
Published: March 18 2009 02:00 | Last updated: March 18 2009 02:00
Israel's high-tech entrepreneurs have attracted billions of dollars in venture capital over the past decade, launching a dizzying number of start-ups and winning a reputation for innovation in fields such as software, semiconductors and biotechnology.
But with funding drying up and the global financial crisis hitting clients and investors around the world, entrepreneurs including Dan Barak have now been forced to turn their attention from growth to survival.
Mr Barak, 32, is the co-founder and chief executive of BloggersBase, an online service for bloggers that was launched last year after attracting $125,000 in start-up funding. For the past two months, the company has approached more than 15 investors and venture capital firms in an effort to raise another $700,000-$2m, but so far without success.
"This is a very bad time," says Mr Barak. "Most of the venture capital firms are very careful. We hear a lot of 'we're focusing on existing investments' or 'we have a portfolio company that's in the same niche'."
While they search for funds, Mr Barak and his co-workers are trying to keep costs as low as possible. They are forgoing salaries, sharing one car among the six employees, working from a one-room office with second-hand furniture in central Israel and managing the company's marketing themselves.
The story is the same across Israel's high-technology industry, which accounts for one-third of the country's exports and tens of thousands of highly-paid jobs. Beyond its direct economic relevance, the sector is also something of a point of pride for Israelis, and a visible symbol of the country's emergence as a developed economy.
However, the credit crisis is now draining the industry of its life-blood - risk capital. Funds raised by Israeli high-tech companies from venture investors fell in the fourth quarter of 2008 by 22 per cent compared with the same period the year before. It was the lowest quarterly amount in two years, according to the Israel Venture Capital Research Center.
Since last October, when the financial crisis intensified, more than 5,000 high-tech employees in Israel - or 7 per cent of a total of some 70,000 - have been laid off. Industry leaders have warned the cuts may triple this year.
High-tech companies have been forced to cut costs across the board, including introducing a four-day week and a hiring freeze, slashing bonuses, trimming the number of holidays and switching to cheaper leased company car models and cancelling trips for staff.
Headhunters report that average high-tech salaries have dropped as much as 18 per cent.
Investors, too, are feeling the pain. Orna Berry, the chairwoman of the Israel Venture Association and a partner at the Gemini Israel Funds, says: "This year will be very tough for venture capital firms." Ms Berry expects Israeli high-tech companies' fundraising from venture capital firms to halve from the $2.1bn recorded in 2008, and predicts the number of new Israeli start-ups will also halve from last year's level.
Venture capital firms, Ms Berry adds, are now mainly providing funds to companies that have already raised enough capital to survive for at least two years.
How long the slump will last is hard to say, says Izhar Shay, a general partner at the venture capital firm Canaan Partners, which holds offices in Israel, the US and India and has $3bn under management: "In Israel, the crisis is still unfolding and we have not yet fully understood the extent of how severe it will be."
He adds: "This is being considered a very significant crisis for the Israeli high-tech industry. The number of employees being let go is going to grow significantly, the number of companies being shut down will be painful and the level of venture capital investments in the Israeli high tech is going to drop to dangerous levels."
Even more than their counterparts in Europe and Asia, Israeli executives and investors are looking to the US for a solution to the crisis. Israeli companies, especially in the technology sector, are heavily dependent on the American market, which is also where many Israeli companies are listed.
Ms Berry pins her hopes on the new US president: "A lot will depend on the Obama administration, the level of control it demonstrates in the financial markets and its return to growth plan."
--------------------------
Libya eyes more property in west
By Heba Saleh in Tripoli
Published: March 18 2009 02:00 | Last updated: March 18 2009 02:00
Libya's $70bn sovereign wealth fund is on the lookout for investments in western real estate markets, as Muammer Gaddafi's regime flexes its financial muscle after emerging from its international isolation.
Unlike many Middle Eastern funds, which are sitting on substantial losses, the Libya Investment Authority was set up only in 2007 and is scouring the globe for opportunities in the downturn.
In an interview with the Financial Times in Tripoli, Mohamed Layas, the LIA's chief executive officer, said that after buying, through an affiliate, an office block in London, the fund was looking for more investments in property.
"The strategy is that we have to increase our investment in real estate, mainly in commercial buildings, and to invest in portfolios where they concentrate mainly on real estate in different parts of the world, in Europe and the US," he said.
"We received many offers that are under consideration."
Mr Layas said most of the fund's capital was still in cash and that it was set to receive a fresh allocation this year from the government, despite the sharp drop in oil prices, the country's main source of revenue.
"Almost 75 per cent of our assets are still liquid, which is a unique position compared to similar institutions," he said.
"We want to benefit from the situation of the market today. It is a very good opportunity for us to look for good investments which we can buy in Europe, in the United States and in other markets."
The LIA is steering clear of investments in the financial sector and seeking instead safer opportunities in real estate, services and utilities.
Private equity firms and other western investors have taken notice and have been knocking on the LIA's door.
While he would not talk specifically about foreign partners, Mr Layas said the LIA was mandating banks in Europe and the US to run its portfolio investments until it builds up the expertise to do so on its own. "We are not ready here to run the show locally," he said. "We are building the institution. We are sending people for training. We hire experts from abroad and we seek advice from consultants."
He said the LIA and the Qatar Investment Authority had already set up a joint $2bn (€1.5bn, £1.4bn) fund that was about to start investing both internationally and within the two countries.
According to Mr Layas, the LIA also has a $5bn Africa portfolio which has been investing in real estate, hotels, agriculture, mining and communications in different countries around the continent. Another $8bn of the fund's assets is specifically earmarked for long-term investments.
Beyond portfolio investment, the fund, according to Mr Layas, will consider direct investment in companies, including entering into joint ventures in Libya with foreign partners. The LIA is already developing oilfields with BP and National Oil Corporation, the national oil company. It has also worked in partnership with Norway's Yara in a fertilizer plant venture.
-----------------------
Private equity firms beat path to Tripoli
By Henny Sender in New York
Published: March 17 2009 23:04 | Last updated: March 17 2009 23:04
In an elaborate tent on the outskirts of Tripoli, David Rubenstein, co-founder and managing director of the Carlyle Group, and Steven Schwarzman, chief executive of Blackstone, gathered with a group of men last year to celebrate a wedding.
It was an unlikely scene, given Libya’s history. But the presence of two of the most prominent figures in the US financial community made sense because of the identity of the groom – Mustafa Zarti, deputy director of the Libyan Investment Authority, a sovereign wealth fund with tens of billions of dollars waiting to be invested.
All this fresh capital is unusual in a financial world where so many big players are reeling from recent reversals. As a result, executives from private equity firms and investment funds have been beating a path to Libya to court officials of the LIA.
Libya is being encouraged to invest in US funds by state department officials looking to solidify a relationship that has improved since Libya agreed to hand over suspects in the 1988 bombing of a Pan American flight over Lockerbie, Scotland, and the United Nations lifted sanctions against the country in 2003.
“They are just starting to open up,” says one banking executive with responsibility for sovereign wealth fund relationships in the Middle East. “They understand there has to be a natural evolution.”
Tripoli is moving slowly, having developed little formal expertise during its years as a pariah.
So far, two private equity firms have received funds from the LIA. Carlyle led the way, thanks in part to the efforts of Mr Rubenstein, who first travelled to Tripoli in 2006.
More recently, Libya has invested hundreds of millions of dollars in Goldman Sachs Asset Management vehicles. These include investments in a Goldman loan fund, which invests in the management of young hedge funds seeded by the Kuwait Investment Authority, according to people familiar with the matter.
Saif al-Islam Gaddafi, son of Muammer Gaddafi, the country’s leader, has come to be regarded as the new face of Libya for foreign executives, despite having no direct responsibilities at the LIA.
In November he came to the US and met prominent financial executives. Mr Schwarzman hosted a lunch at his Park Avenue apartment for the younger Mr Gaddafi. Frank Carlucci, former defence secretary and retired chairman of Carlyle, hosted a dinner for him in a private room at the City Club. Other financial services executives, such as TPG’s David Bonderman, plan to visit Tripoli soon.
Mr Zarti, a veteran of Libya’s oil industry, has ambitious plans to improve the LIA and is close to the young Mr Gaddafi, executives say.
“He is a whirling dervish of a man,” says one senior Credit Suisse executive who has had extensive dealings with the LIA. “When he meets with you, he does not engage in social foreplay. He asks directly, what have you got for me to invest in?”
-------------------------
Algeria’s Sonatrach to boost investment bt 41%
ByCarola Hoyos in Vienna
Published: March 17 2009 17:46 | Last updated: March 17 2009 17:46
Sonatrach, the Algerian energy group and Europe’s second-largest gas provider, has increased its domestic and international investment programme by 41 per cent in anticipation of a recovery in demand for oil and gas.
The company has boosted its investment to $63.5bn for the five years from 2009 to 2013. This compares with a previously announced five-year investment programme of $45bn for 2008-2012.
“In the long term, everybody knows the major supply of energy will come from oil and gas,” Chakib Khelil, Algeria’s energy minister, said on Tuesday. “If you don’t believe that, you don’t believe in anything.”
Algeria expects to boost its exports of natural gas to 100bn cubic metres by 2015, up from 62bn today. That target does not include the trans-Saharan gas pipeline that Algeria and Nigeria are in early stages of developing.
Algeria’s ambitious investment programme – which includes petrochemical plants and refineries as well as oilfield expansion aimed at maintaining the country’s output capacity at about 1.4m barrels a day – comes in spite of the collapse in oil and gas prices over recent months and Algeria’s Opec commitment to boost oil prices by temporarily cutting production.
Oil prices have fallen by about $100 a barrel since they reached a high of $147 a barrel last July. This has already led to the delay or cancellation of 35 out of 150 Opec-member oil projects, Sonatrach said.
But Mr Khelil said the resolve of the group of 20 developed countries to stimulate the global economy, would help push oil prices to $60 a barrel this year.
On Sunday, Opec decided against a new round of cuts in oil production. But the cartel said it would remove another 800,000 barrels a day from the market as its members moved to fulfil pledges already made to cut production by 4.2m barrels a day.
Mr Khelil said: “All the declarations we made are based on the assumption that the G20 will come up with a good package. Based on that, things will get better and that will help the oil price.”
Sonatrach needed an oil price of $40-50 a barrel for its investments to pay off, he said. Mr Khelil was also confident prices would recover to the $70-80 a barrel level needed to allow expensive investments, such as those in the deep waters off Brazil and in the Canadian oil sands, to be profitable. Such a price was also needed to persuade consumers to use energy efficiently and so alternative energies, such as solar, can be developed, he said.
-------------------------
Berlin warns US on inflation spiral
By Bertrand Benoit in Berlin
Published: March 18 2009 02:00 | Last updated: March 18 2009 02:00
Mounting public debt and excessive liquidity in the economy could tip the US into an inflationary spiral, a senior economic adviser to Angela Merkel, German chancellor, has warned.
The comments by Christoph Schmidt, one of the five "wise men" who advise the German government on econ-omic policy, cast fresh light on the transatlantic rift over how to tackle the global economic crisis. He spoke as US and German officials met yesterday in Washington to tackle differences over how to save Opel, the ailing subsidiary of General Motors.
"I see an inflationary risk in the US in the medium term because of the development of money supply there," Prof Schmidt told the Financial Times. "There is a danger [governments] could start considering inflation as a way to reduce the burden of public debt."
The Princeton-educated economist did not see such a risk in Europe. "When adop-ting fiscal stimuli, you have to balance their benefits against the dangers of rising public debt. There is a trade-off and I think countries like France and Germany have found the right balance."
Prof Schmidt, who joined the five wise men - in fact four men and a woman - last month, echoes the French and German governments, which have vigorously re-jected pressure from Washington for looser fiscal and monetary policies in Europe.
There is widespread concern in US economic and government circles that continental Europeans either underestimate the severity of the crisis or are relying too much on a swift revival of US demand to support their exports.
The European Central Bank shares the German government's misgivings about excessive public debt and has said overly loose monetary policy created the asset price bubble whose bursting triggered the crisis.
Klaus Zimmermann, president of the DIW economic institute in Berlin, backed Prof Schmidt's argument, telling the FT: "The central banks in the US and the UK are now literally printing money. This creates an inflationary potential that is difficult to stop. It is tempting for a government to look at inflation as an easy way out of debt, especially if you consider mass unemployment the more immediate threat and especially if you are suspicious of tax rises, as the US generally is."
Prof Schmidt admitted Germany faced its worst downturn in living memory but said a third fiscal stimulus would do little to help, saying the US probably overestimated the capacity of fiscal stimuli to boost growth.
On the contrary, he said, governments should start preparing to reduce their interference in their countries' economies.
The interventionism of the past few months, he said, "has created new dangers. Now is a good time for governments to start thinking about how they will balance their budgets, reduce their debts, withdraw from the economy and hand things over to the market."
He said the same applied to central banks, which "will have to return to less expansive policies and will face a lot of difficulties when they start reabsorbing liquidity".
Prof Schmidt said leaders of the Group of 20 economies should make the fight against protectionism a focus of discussions at its April 2 meeting in London.
"Our system of open trade is in danger. What the US is doing to support its car industry, for instance, is indefensible."
Germany's economics minister also criticised the US, saying the "Buy American" provision in its stimulus bill could push other countries towards protectionism.
--------------------------
France raises a glass to VAT victory
By Ben Hall in Paris
Published: March 17 2009 21:47 | Last updated: March 17 2009 21:47
The cost of a long lunch in a French bistro should become significantly cheaper after Paris won a seven-year battle with the European Union to allow it to slash the value-added tax on meals.
But how to pay the unpalatable €3.25bn ($4.2bn, £3bn) bill taxpayers are being stuck with is prompting a debate over just what price to extract from the French restaurant industry.
France savoured victory last week when it finally won German approval for President Nicolas Sarkozy’s plan to cut VAT on restaurant meals from 19.6 per cent to the EU minimum of 5.5 per cent.
But the triumph has come when public finances are under severe strain and French ministers are due to meet restaurant industry leaders on Wednesday to make sure they cut the price of meals but create jobs in return.
Independent experts and some government insiders, including many in the finance ministry, are sceptical about whether either will happen.
“The question is whether the rebate is going to go to restaurant owners or be passed on to customers,” said Alexander Law, chief economist at Xerfi, a Paris-based consultancy. “I don’t think it will be passed on fully.”
The restaurant industry has long campaigned for the tax cut, promising to generate jobs. Restaurants and cafés were one of the few sectors of the French economy where employment grew in 2008 and industry groups had promised to pass on the benefits of a VAT cut three-ways: job creation, raising wages and cutting prices.
Christine Pujol, president of the UMIH restaurant industry body, said not meeting those commitments could lead to the VAT being perceived as “another gift” to the restaurant industry. But with her members now “seriously suffering from the effects of the economic crisis . . . it is clear that we won’t be able to do all of those things”, said Ms Pujol.
For Mr Sarkozy, the tax cut has yielded a simple political victory: he succeeded where his predecessor, Jacques Chirac, failed. Mr Chirac issued the populists promise to cut VAT as part of his 2002 presidential campaign, but he could not fulfil his promise. VAT changes require unanimous EU approval and until last week Germany refused to lift its veto.
●The vast majority of French people support nationwide protests set for Thursday to denounce the government’s economic policies, according to two polls published on Tuesday, Reuters reports from Paris.
The surveys make grim reading for Mr Sarkozy, who faces growing discontent over the gathering recession and fears that the social unrest might degenerate. Mr Sarkozy offered a series of concessions after a first day of union action on January 29 brought up to 2.5m people on to the streets, but labour leaders said they were dissatisfied by the measures and called for a second round of rallies on Thursday.
Some 78 per cent of people support the movement, an IFOP poll for Paris Match magazine showed on Tuesday, with 53 per cent of Mr Sarkozy’s own centre-right voters in favour. A separate BVA poll for Les Echos newspaper said 74 per cent of those questioned thought the action was justified.
Le Canard Enchainé, an investigative weekly, quoted Mr Sarkozy on Tuesday as saying he feared a repeat of the May 1968 uprising, when rioters rocked Paris and strikers shut down France.
“Social issues often heat up in May,” Mr Sarkozy was quoted as saying, adding that he expected a big turnout on Thursday.
“It’s normal. We are entering the toughest phase of the crisis.”
--------------------
Bulgari rocked by resignation of finance chief
By Vincent Boland in Milan
Published: March 18 2009 02:00 | Last updated: March 18 2009 02:00
Shares in Bulgari fell sharply yesterday after the unexpected resignation of its chief financial officer, highlighting the impact of the global financial crisis on the luxury goods industry.
Bulgari announced late on Monday that Alberto Nathansohn, who had been chief financial officer since May 2006, would leave at the end of April.
The move came a week after the Italian jewellery and watches group announced a 45 per cent fall in net profits for 2008 to €83m ($108m) following a slump in sales of luxury goods products in the fourth quarter of last year.
Bulgari said Mr Nathansohn was leaving "to seize new professional opportunities".
He is being replaced by Flavia Spena, the company's current head of human resources and a 20-year Bulgari veteran.
Her elevation - she is to retain her existing functions - led some analysts to suggest that the group's decision to combine corporate finance with other executive functions was a short-term cost-cutting measure that sent the wrong signal to investors.
Analysts at UniCredit said the resignation of Mr Nathansohn was "not good news for Bulgari".
They said the company was operating in a tough environment where it might be wiser to seek operational efficiencies than immediate cost savings, and that the outgoing CFO was in the best position to implement such a strategy.
Bulgari's shares fell 5.27 per cent in Milan to €2.83, after slumping by more than 50 per cent in the past six months as the luxury goods industry was squeezed by the global financial crisis.
The company is seen to be vulnerable in its two main sectors - watches and jewellery - and in all its markets, including the US, Europe and Japan.
Several analysts who follow Bulgari have rated its shares a "sell" because they continue to trade at a premium to peer groups in spite of the sharp fall in the stock price in recent months and the continued deterioration in the economic environment.
UniCredit reiterated its "sell" recommendation yesterday. In a report on March 3, analysts at HSBC said 2009 would be "tough at all levels" for the company.
Francesco Trapani, Bulgari's chief executive, said the company was facing "difficult upcoming months".
Bulgari has been a puzzle for analysts and investors for some time.
There is concern that its rapid expansion and the addition of business lines such as accessories, which are less exclusive - and less exclusively priced - than its core watches and jewellery, have diluted the value of its brand.
"They have created these lower-end lines that have affected the cachet of the brand in the eyes of some high-end spenders," said a Milan-based analyst, speaking on condition of anonymity.
-------------------------
Swiss banks divided on tax evasion move
By Haig Simonian
Published: March 18 2009 01:33 | Last updated: March 18 2009 01:33
In the plush reception rooms of Switzerland’s private banks, where discreet staff offer clients refreshments before their private bankers saunter in, the alarm bells have started ringing.
Last week’s decision by the Swiss government to ease the country’s vaunted bank secrecy rules has prompted fears among private bankers about a huge outflow of funds as foreign clients seek safer refuges.
But the government’s decision to make it easier for tax authorities abroad to seek information about evasion has also highlighted a division between Switzerland’s bigger, largely Zurich-based, banks, and their smaller Geneva counterparts.
“We welcome the decision by the Swiss government, and we are convinced this will strengthen Switzerland as a financial centre,” said Andres Luther, a spokesman for Zurich-based Credit Suisse, Switzerland’s second biggest bank.
Minister calls for a level playing field
The partial lifting of banking secrecy in Luxembourg is conditional on other private banking hubs changing their own rules, its Treasury minister told investors on Tuesday as he tried to reassure them on the long-term prospects of the Grand Duchy as a financial centre, writes Stanley Pignal .
Luc Frieden, who oversees Luxembourg’s financial centre, called for “a level playing field” among banking centres, and pointed to a more limited dilution of banking secrecy than Germany and France are pushing for.
“We will not accept that some countries are pushing for more than OECD standards,” he said, referring to the Organisation for Economic Co-operation and Development rules aiming to dilute banking confidentiality.
He insisted that banking details would be handed over only after “a clear nexus has been established in the country of origin”.
Speaking to the Financial Times, he added that the agreement of rival financial centres – Switzerland, Austria, Lichtenstein, Singapore and Hong Kong – had been “a key factor” in Luxembourg’s decision to cave in to international pressure.
For full story see www.ft.com/europe
By contrast, Geneva’s private bankers have been more wary. “Of course there is some concern. You are talking about competitive advantages that are being put in jeopardy,” acknowledged Michel Dérobert, of the Geneva private bankers’ association.
On Tuesday the smaller private banks called for the government to pass regulatory and tax reforms to keep Switzerland competitive.
“I think we’ll have to do more to improve what Switzerland has to offer,” said Mr Dérobert.
The reason for the differences is that Switzerland’s smaller private banks have lacked the resources to develop the new networks in neighbouring countries or high growth regions that their bigger rivals have pioneered in recent years.
Switzerland’s biggest banks, led by UBS and Credit Suisse, but including Julius Baer and Vontobel, as well as Basel-based Sarasin, have spent significantly on such expansion.
The steps have been taken partly to tap into new business – but also in anticipation of growing threats to Swiss banks’ traditional “offshore” activities.
The business was highly lucrative for the Swiss. Financial services today account for about 13 per cent of gross domestic product – unusually high, even for a developed country. Although private banking accounts for only a proportion of that total, it remains a mainstay of the Swiss financial services industry.
Most recently, a second factor has alarmed all the banks irrespective of their size.
They have watched with growing concern as UBS, the world’s leading wealth manager, has been the subject of intense US investigations into the activities of some of its Switzerland-based private bankers.
Last month the bank agreed to pay $780m (€600m, £555m) to settle criminal charges brought by the US Department of Justice and the Securities and Exchange Commission, although a separate civil action by the US Internal Revenue Service remains unresolved.
The highly conspicuous probe revealed details of UBS staff using encrypted computers and being trained in anti-surveillance techniques on their trips to visit US clients. A whistleblower even described squeezing diamonds into a tube of toothpaste to transport assets without detection.
Such revelations sent shockwaves through the sector. Top bankers maintain the behaviour was egregious. And UBS itself, which has since wound down the unit concerned, said the failings were limited to a small group.
But the investigations, coming against the background of a wider international crackdown on tax evasion, has deeply worried many private bankers.
At the height of the UBS investigation, the bank told staff to avoid crossing the Atlantic. One former employee, holding dual nationality, even handed the keys of his Florida holiday home to Swiss friends because he was too frightened to visit.
------------------------
Russian defence reform stirs disquiet
By Charles Clover and Isabel Gorst in Moscow
Published: March 18 2009 01:49 | Last updated: March 18 2009 01:49
The head of Russia’s military intelligence service, the GRU, was reported in the Russian press to have resigned on Tuesday after special forces soldiers under his command took part in an anti-government demonstration earlier this month.
General Valentin Korabelnikov was absent from a meeting of top defence officials on Tuesday when Dmitry Medvedev, Russian president, spoke about military reforms. The reforms, announced last year, would slash the officer corps by half in a bid to create a more agile force.
“The main task is to qualitatively improve the combat readiness of our forces, above all our strategic nuclear forces,” Mr Medvedev said, adding that Nato was continuing to expand closer to Russia’s borders.
A ministry representative told Interfax news agency that Gen Korabelnikov was “on vacation” and declined to comment on reports that he had resigned.
On March 9, covert operation specialists from one of the GRU brigades due to be demobilised as part of the reforms took part in a demonstration in Novosibirsk demanding the resignation of Anatoly Serdiukov, defence minister.
“They didn’t participate as soldiers, but some of them were there as individuals” said Alexei Rusakov, a deputy in the Berdsk city council, who helped organise the demonstration.
The GRU protest and Gen Korabelnikov’s absence on Tuesday underline the depth of resentment over the reforms. Opposition to the cuts is adding to a climate of instability in Russia, which is reeling from the economic crisis.
Russia’s military has been historically cautious about getting involved in politics.
Public anti-government protests, while still small, are becoming more common as unemployment and wage arrears rise.
On Monday a message posted on the defence ministry website assured members of the 67th GRU brigade that they would be given different jobs in the armed forces. “The officers of the 67th brigade are the elite of our military, our ‘golden foundation’ and no one has the intention of rejecting their priceless military service,” it said.
The reforms were first broached in October, following Russia’s victorious war against Georgia, which nonetheless exposed the lack of modern equipment and a top-heavy military bureaucracy.
The war also caused tension between the army and the Kremlin, according to retired officers, who said the generals were unhappy with the political decision to end the conflict before Georgia was completely defeated.
Lev Ponomarev, a human rights organiser in Moscow and opposition figure, said the government was committing a grave error by proceeding with the military reforms in a climate of unrest. “The reform of the army was planned before the crisis, and maybe it was a rational thing to do then. But now, in this environment, to dissolve two brigades of GRU, who are specialists in secret warfare, I can’t think of anything stupider.”
---------------------------
Russia to rearm over Nato expansion
By Isabel Gorst in Moscow
Published: March 17 2009 14:55 | Last updated: March 17 2009 14:55
Russia said it would re-arm its military and boost its nuclear forces in response to the expansion of Nato to its western frontiers and the increased threat of international terrorism.
Dmitry Medvedev, Russian president, said on Tuesday: “The main task is to qualitatively improve the combat readiness of our forces, above all our strategic nuclear forces.”
Speaking at a rare meeting with military leaders in Moscow, Mr Medvedev said Nato was continuing to expand closer to Russia’s borders. Russia was also under threat from “local crises and international terrorism.”
Mr Medvedev was speaking less than a fortnight after Moscow and Washington pledged to try to improve relations, which sank to the worst low since the Cold War during the administration of former US president George W. Bush.
Russia perceives Nato’s eastern expansion, coupled with US plans to deploy a ballistic missile shields in eastern Europe, as a threat to its national security.
Mr Medvedev said Russia had the financial muscle to improve its armed forces despite the financial crisis engulfing the country.
“Never in the history of modern Russia have there been such favourable conditions to create a contemporary highly efficient armed forces,” he said.
The creation of a modern army was crucial to protect Russia against outside aggression and underpin the growing of the economy and wellbeing of citizens, he said.
Mr Medvedev admitted that the war with Georgia last summer had exposed shortcomings in the Russian military that should be rapidly redressed.
Although Russia’s military campaign in Georgia was successful, the war exposed the army’s lack of modern equipment and the top-heavy bureaucracy.
Russia has since launched plans to transform the army into a lighter more agile force.
It has also raised hackles in Nato by establishing military bases in Georgia’s breakaway regions of South Ossetia and Abkhazia and announcing plans to base part of its Black Sea fleet on the Abkhazian coast.
-------------------------
Reformers sense switch of focus in US campaign against illegal drugs
By Harvey Morris in New York
Published: March 16 2009 02:00 | Last updated: March 16 2009 02:00
The US spends $1,400 a -second in the war on drugs, according to a recent -Harvard study, while the savings and revenue that could be generated by legalising narcotics would equal a 10th of Barack Obama's -fiscal stimulus plan.
With neighbouring Mexico descending towards the -status of a narco-state and with US jails crammed with small-time drug offenders, experts in the field have launched a debate on whether a 40-year crackdown, and the more than $1,000bn (£716bn €773bn) that has been spent on it, has had any impact on -narcotics abuse or on the violent trade that feeds it.
Government ministers and officials gathered in Vienna for the highest-level international conference in 10 years on the drugs question last week issued a declaration re-affirming a commitment to combating narco-trafficking.
But differences emerged at the United Nations' Commission on Narcotic Drugs over whether the emphasis should be on prevention or cure.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, acknowledged in Vienna that the "world drug problem has been contained but not solved". However, an unintended consequence of international drug control efforts had been the creation of a "criminal black market of staggering proportions".
While opposing calls for the legalisation of narcotics, Mr Costa said: "When mafias can buy elections, candidates, political parties - in a word, power - the consequences can only be highly destabilising. While ghettos burn, west Africa is under attack, drug cartels threaten central America and drug money penetrates bankrupt financial institutions."
Drug reformers greeted the Mr Obama's nomination of Gil Kerlikowske, at present the Seattle police chief, to serve as head of national drug control policy as indicating a likely switch in emphasis from enforcement to treatment. "The success of our efforts to reduce the flow of drugs is largely dependent on our ability to reduce demand for them," the drug tsar nominee said.
As the debate intensifies, some experts are offering radical solutions, including decriminalisation, at least in the case of marijuana. The anti-prohibitionists include civil libertarians, former drug war enforcers and some legislators.
In cash-strapped California, Tom Ammiano, Democratic assemblyman for San Francisco, has introduced a bill to tax and regulate -marijuana, which is estimated - at $14bn annually - to be the state's most lucrative crop. "With our state in an on-going fiscal crisis, it is time to bring this major piece of our economy into the light of day," he said.
Jeffrey A. Miron, a senior economics lecturer at -Harvard and free-market -libertarian, estimated in a paper published in December that the drugs war in the US alone cost authorities $44.1bn a year. Legalising all banned drugs, in contrast, would raise $32.7bn annually in taxation.
Federal spending in this area alone has risen 10-fold since the presidency of -Ronald Reagan.
While mainstream experts do not believe legalisation is either likely or socially beneficial, Jack Cole, a former enforcer turned reformer, disagrees: "I think it's going to happen."
The former New Jersey undercover drug enforcement agent told a church audience: "I felt very bad about my part in implementing what today I've decided is not just an unjust war on drugs but is a terribly destructive policy."
-------------------------
Moscow signs deal to sell S-300 air defense systems to Iran
18.03.2009 Source: Pravda.Ru URL: http://english.pravda.ru/russia/kremlin/107253-air_defense_Iran-0
Russia signed a contract with Iran to deliver air defense systems S-300 (SA-10A Grumble). Russia has not made any deliveries of such systems to Iran before, Russian defense officials said.
“In spite of the fact that the contract was signed two years ago there were no shipments of S-300 systems made to Iran. However, the contract is being executed step by step,” an anonymous defense official told RIA Novosti.
The deal is evaluated at hundreds of millions of dollars.
“The further execution of the contract will greatly depend on the international situation and the decision of the Russian administration,” the official added.
In 2008, Russia executed a contract to deliver eight S-300 battalions to China. The deal was evaluated at one billion dollars.
The S-300 is a series of Russian long range surface-to-air missile systems produced by the Almaz Scientific Industrial Corporation all based on the initial S-300P version. The S-300 system was developed to defend against aircraft and cruise missiles for the Soviet Air Defence Forces. Subsequent variations were developed to intercept ballistic missiles.
The S-300 system was first deployed by the USSR in 1979, designed for the air defense of large industrial and administrative facilities, military bases, and control of airspace against enemy strike aircraft.
The S-300 is also capable of destroying ballistic missile targets, and is regarded as one of the most potent anti-aircraft missile systems currently fielded. Its radars have the ability to simultaneously track up to 100 targets while engaging up to 12. S-300 deployment time is five minutes.
The S-300PT (NATO reporting name SA-10a GRUMBLE) is the original version of the S-300 system which became operational in 1978. In 1987 over 80 of these sites were active, mainly in the area around Moscow.
This system broke substantial new ground, including the use of a phased array radar and multiple engagements on the same FCS. Nevertheless, it had some limitations. It took over 1 hour to set up this semi-mobile system for firing and the hot vertical launch method employed scorched the TEL.
It was originally intended to fit the Track Via Missile guidance system onto this model. However, the TVM system had problems tracking targets below 500 m. Rather than accept the limitation, the Soviets decided that the tracking of low altitude targets was a must and decided to use a pure command-guidance system until the TVM head was ready. This allowed the minimum engagement altitude to be set at 25 m.
Improvements to the S-300P have resulted in several major subversions for both the internal and the export market. The S-300PT-1 and S-300PT-1A (SA-10b/c) are incremental upgrades of the original S300PT system. They introduce the 5V55KD missile and the cold launch method thereafter employed. Time to readiness was reduced to 30 minutes (broadly comparable to Patriot) and trajectory optimizations allowed the 5V55KD to reach a range of 75 km.
--------------------------
Russian designer creates revolutionary car engine
18.03.2009 Source: Pravda.Ru URL: http://english.pravda.ru/science/tech/107254-revolutionary_car_engine-0
74-year-old Russian designer Robert Grigoryants has developed an engine which can make a revolution in the engine industry.
Robert Grigoryants, a teacher of the Volgograd Agricultural Academy, managed to find more than 20 principal differences between his engine and its western analogues.
“My engine works without any noise. It is absolutely harmless to our environment. It is the most economic engine ever created and it can work even without transmission,” the inventor says.
“I have already calculated that 10,000 such engines with the 600 horse-power capacity can save up to 2.6 billion roubles ($7.5 million) a year in terms of fuel economy and 16 million roubles ($500,000) in terms of metal economy,” Robert says.
Robert has turned to the Russian government with a request to use his invention for the good of Russia.
Read also: "Secret Russian weapons” still terrify Americans"
He is sure that his engine will help Russia become the most completive car producer in the world.
----------------------------
France’s return to NATO may bring unpleasant surprises to Washington
18.03.2009 Source: Pravda.Ru URL: http://english.pravda.ru/world/europe/107256-france_nato-0
The Parliament of France approved Nicolas Sarkozy’s decision to bring France back to NATO. Sarkozy took a great risk in his initiative: he could lose the support of the government. It would not be correct o say that France’s decision to return to NATO is a landmark victory of the United States. Quite on the contrary, the participation of France in the alliance may create quite a number of serious problems for Washington.
Deputies of the National Assembly of France approved the idea to retrieve the country’s NATO membership. NATO members must approve the decision of the French administration during the summit, which is slated to take place on April 3-4, although it does not seem that any problems could arise at this point.
Making a speech last week in Paris, President Sarkozy said that France, which pulled out from the alliance in 1966 under Charles de Gaulle, would retrieve its membership. Sarkozy particularly said that France must take an important place in the organization to become stronger and more influential, albeit independent. The French president added that it would help the country in the struggle against terrorism, the proliferation of nuclear weapons and other modern-day threats.
Sarkozy was supposed to win the support of more than a half of the National Assembly deputies, as well as the same amount of senators’ votes. Sarkozy’s party fellows take 317 of 577 seats in the lower house and 151 of 343 seats in the upper house. He needed to win the support of socialists and communists. However, Sarkozy’s followers did not prove to be reliable.
A deputy with the Union for Popular Movement said that France virtually never left NATO. France will actually return to the command structure of the alliance, taking into consideration the fact that France takes an active part in Afghanistan and Kosovo missions.
Another deputy of the same party said that he did not see a reason for France to join any organization, because it would not help to strengthen the country’s influence in the alliance. Even if France joins NATO, it will not be able to change the essence of the organization, since it is solely a US machine.
French Prime Minister Filon decided to link the NATO voting with the vote of no-confidence to the government. Many French experts said that it was an attempt of the ruling majority to show pressure on the deputies not to let them vote against the government on account of the forthcoming elections, the preparations to which depend on the government.
France pulled out from NATO in 1966. Then-President Charles de Gaulle explained the decision with a need to conduct US-independent foreign policies. It goes without saying that France’s relations with the United States worsened after De Gaulle’s decision. He ordered foreign military men to leave France. NATO’s headquarters moved from Paris to Brussels in 1966 too.
Formally, France remained a NATO member. The country continued to share its intelligence information with the allies, to take part in political meetings of the alliance and even participated in military operations in former Yugoslavia and Afghanistan. France was not involved in the planning of those military operations, and French generals were not included in the military command.
It is worthy of note that Sarkozy is a member of the party, which was founded by Charles de Gaulle. The party’s wing, which supports the nation’s US-independent political course, is still very strong. However, Sarkozy has been a long-time supporter of developing closer ties with Washington: his aspiration came contrary to political views of his predecessors within 40 years.
At the same time, Sarkozy had to find compromises with those who opposed the development of cooperation with the USA. Sarkozy believes that France’s return as a full-fledged NATO member would improve Europe’s role in the alliance. In addition, he supports the idea of creating the NATO-independent army of the European Union. Therefore, it is not clear yet, whether the United States is going to be pleased or displeased with the return of the great European nation.
Vadim Trukhachev
--------------------------
Will NATO break up at last?
18.03.2009 Source: Pravda.Ru URL: http://english.pravda.ru/opinion/columnists/107252-NATO_break-0
By Hans Vogel
At the beginning of April, NATO will celebrate its sixtieth anniversary and it plans to do so in a big way. Admittedly not without a sense of historical drama, the ceremony is to be held in two venues, one in Strasbourg (France), the other in the German town of Kehl, just across the Rhine. The location is symbolic, for this border region has long been a bone of contention between France and Germany.
For more than one thousand years-from the Treaty of Verdun in 843 to 1945-the rivalry between these two nations has marked the very history of Europe. After the end of World War II, however, the peace and the ensuing special relationship between France and Germany have been crucial for the process of what is called European Unification. Since the establishment in 1949 of the German Federal Republic, the Franco German entente has been symbolized by numerous joint public appearances of French and German leaders.
Apparently short on ideas, NATO has decided to stage its birthday party on the franco-german border, at a time when the ancient Franco German rivalry has been replaced by something much more serious: the resuscitation of the Cold War by the US. The Strasbourg/Kehl event thus also serves as a smokescreen in order to hide what is really going on.
Well then, apart from being an instrument of the New Cold War, what are NATO's accomplishments, what can it be proud of at its upcoming birthday party?
NATO was founded in 1949 to defend the recent US conquests in Western Europe (the nations that were "liberated" by the US in 1945) against an attack by the Soviet Union. Until the dissolution of the Soviet Union in 1991, there has indeed been no international war in Europe. To attribute this solely to NATO would be a fallacy. The Soviet Union is at least as responsible for this stability by virtue of its strict adherence to the principle of peaceful coexistence. All along, however, critics were accusing NATO of in fact being an aggressive alliance. They were right: no sooner had the Soviet Union been dismantled then NATO showed its true colors and became the aggressive monster it was claimed to be.
Not long after its creation, it became clear NATO was an excellent instrument for the consolidation of US hegemony in Europe. Invoking the interests of collective security, the US first set up a network of clandestine cells to carry out resistance and sabotage in the event of a Soviet conquest of Western Europe. This secret organization is known under the name of Gladio. When the feared Soviet conquest did not materialize, Gladio was used instead to create "false-flag" incidents, such as terror bombings, kidnappings and shootings. The blame was invariably put on leftwing or communist subversion. Examples are the 1980 bombing of the Bologna train station and the 1978 assassination of the Italian politician Aldo Moro.
A Christian Democrat, Aldo Moro was actively trying to create a government with the Italian Communist Party, the biggest in the country. Under the NATO umbrella, no method was shunned when it came to stopping the Communists. Therefore, Aldo Moro was killed but the assassination was made to look like it was the work of leftist extremists. Whenever communist parties in Western Europe seemed likely to gain at elections, the box of tricks was opened to compromise communist leaders, to isolate them and to ensure that they would not form part of any new government.
NATO is also a conduit for the sale of expensive US-made weaponry, especially aircraft. By the mid-1950s, competing European arms producers such as France and Great Britain were practically shut out from the major deals for military aircraft. Increasingly, NATO countries were turned into a captive market for the US military-industrial complex, turning out its products behind high protective barriers.
No method was shunned to peddle mediocre and often shoddily made, but overpriced US fighter aircraft: cajoling, pressure, intimidation, blackmail, bribery. Hundreds of European pilots have perished in accidents with such US-made "flying coffins". Nevertheless, one by one, European competitors were eliminated. The British aerospace industry, important in the 1950s and still producing first-rate aircraft well into the 1970s, saw its European markets vanish.
Today, only France still produces fine fighters, but it is prevented from selling them to NATO-partners. The US has finally been able to turn almost all of its NATO clients into lucrative markets for its own military industry. Indeed, weapons are about the only products US industry is still able to make. The JSF is the latest in a long series of expensive junk the Europeans are forced to buy.
Over the years, the US has established hundreds of military bases all over Europe. Experience shows that once the US has acquired bases, it will not voluntarily abandon them. Nations that expel the US are severely punished, just ask Cuba, Iran and Libya: The US needs its foreign bases to support its global military adventures. That is why it has been expanding its network of foreign bases into Poland, Hungary, Romania and Bulgaria.
All things considered, you bet the US sorely needs NATO! But the question is, does NATO need the US? I would suggest the US needs NATO more than the NATO clients need the US. Without NATO, they would do just fine. The only real danger at the moment comes in the form of Washington's belligerent, adventurous policies and the ensuing wars in which the NATO clients are being dragged along.
Originally founded in order to counter a Soviet military threat, in 1991 all of a sudden NATO found itself without a reason for its existence. Indeed, many in Europe believed that once the Cold War had ended, NATO would soon be dismantled. How wrong they were! Of course, the US wanted to keep NATO, since they needed it as a tool for their dominance over Europe. Thus, a new formula was found and a new justification for NATO's existence. Virtually unopposed, NATO could now be used in a more aggressive fashion to reshape Europe according to the wishes US imperialists.
In 1993, NATO gave itself its first assignment taking the lead in the break-up of Yugoslavia. Under US leadership, NATO sided with assorted Muslim terrorist and criminal gangs in Kosovo, Bosnia-Herzegovina and Macedonia. By 1995 NATO deployed thousands of troops in the Balkans and carried out intensive bombing raids on a wide range of targets in Yugoslavia. In the spring of 1999, NATO began a bombing campaign to bring Serbia to its knees. Within a few weeks, the entire Serb infrastructure, its communications, energy supplies, power installations, telecommunications, TV-channels, industrial plants, were reduced to rubble. Almost 6.000 innocent Serb civilians were killed.
Contravening all rules of civilized conduct, NATO aircraft dropped cluster bombs and fired depleted uranium munitions all over Serbia. In the end, however, the stated objectives was realized: the permanent break-up of Yugoslavia into a number of postage stamp-sized states firmly under US tutelage. Bosnia-Herzegovina had turned into an outright US protectorate, Kosovo followed in 2008. Since 2001, the Yugoslav scenario has been applied to Afghanistan and since 2003 (by the US and the "coalition of the willing", including some NATO clients) to Iraq.
Today, NATO's mission in Afghanistan is regarded as the most important in its history, one on which the very future of the alliance hinges. However, based on NATO's performance so far, this future does not look bright at all.
Indeed, NATO, under its US masters, is committing the most elementary mistakes, that is to say, those against which the greatest military thinkers in the world have been warning. If one takes the teachings of the ancient Chinese philosopher Sun Tzu (4th century BC) as a guide, the NATO Afghanistan campaign is a dismal failure already. In chapter three of the Art of War, the Chinese sage wrote: "to subjugate the enemy's army without doing battle is the highest of excellence." But in chapter two he stated:
"When doing battle, seek a quick victory." After eight years in Afghanistan, victory is still nowhere in sight. On the contrary, NATO's enemy, the Taliban, are getting stronger by the day, supported by increasing numbers of Afghans who are sick and tired of being shot at in their homes by nervous, trigger-happy US and NATO soldiers. Sun Tzu extensively warned against protracted wars and he is supported by thousands of years of history: "I have heard of military campaigns that were clumsy but swift, but I have never seen military campaigns that were skilled but protracted." Yet NATO's planners and their US bosses in the Pentagon apparently thought here was nothing to learn from history or the teachings of wise men. This is now proving to be extremely costly but they cannot claim they did not know this beforehand. After all, Sun Tzu wrote:
"If the army is exposed to a prolonged campaign, the nation's resources will not suffice." Indeed, we can all tell the War in Afghanistan is a prolonged campaign and its cost is already appalling. Yet all lessons from the past are ignored. Of course, the US, as NATO's boss, is chiefly to blame. US military planners are even ignoring the teachings of their own favorite strategic military author, French Baron Henri de Jomini. All West-Point graduates have supposedly read Jomini's Art of War, in which he stated "the celebrated maxim of the Romans, not to undertake two great wars at the same time, is so well known and so well appreciated as to spare the necessity of demonstrating its wisdom." Yet here they are, fighting two major wars, one in Afghanistan. The other in Iraq.
Likewise, the advice of the famous Clausewitz, though admittedly more difficult to grasp than that of Jomini or Sun-Tzu, is being ignored at all counts. Among the many points of advice offered by Clausewitz, let us cite only one in order to demonstrate the foolishness of NATO's strategy in Afghanistan: "there is no higher and simpler law of strategy than that of keeping one's forces concentrated." One quick look at the map of NATO deployment in Afghanistan (some 50.000 of which 20.000 are US) shows that its forces are spread all over the country. More than 1.100 US and NATO troops have been killed and their numbers are rising.
All pointless deaths, really, since the Taliban are back in control of most of the country. The Taliban have adopted fighting methods from their colleagues in Iraq and are now using IED's with lethal effect. US bungling in Afghanistan is irritating its NATO clients. US and NATO air strikes have so far cost the lives of perhaps 50.000 innocent Afghan civilians. The ensuing anger among the Afghans is taken out on all NATO troops. No wonder all but the most servile and obsequious NATO clients are reluctant to heed US demands for more cannon fodder. After all, no nation wants its soldiers to be sitting ducks in a colonial war whose dubious benefits they will never share. As a result of the Afghanistan adventure, NATO is beginning to show some serious rifts.
So why is NATO so keen on celebrating its sixtieth birthday? Usually, it is an anniversary that is skipped. One celebrates twenty-five years or fifty, or seventy-five, but sixty? It is an unusual number, like celebrating a fortieth anniversary. In 1989, both the German Federal Republic and the German Democratic Republic celebrated their fortieth anniversary. Within two years, the GDR had ceased to exist while the Federal Republic had drastically changed by absorbing the GDR. Therefore, the upcoming party does not augur well for NATO, I am afraid. Even traditional anniversary terms may carry a curse.
During the entire decade just prior to the First World War, most European countries organized big celebrations to commemorate anything from national unification to the birthdays of major national heroes. Never before had there been a period with such an abundance of official festivities. But in hindsight, it was only the introduction to the biggest disaster ever to befall European Civilization, the war that effectively ended it. Well, I may be reading too much into it. Perhaps NATO celebrates its sixtieth year just because of a general feeling that it is finally up for retirement at sixty-five!
Let us hope, therefore, that NATO's sixtieth anniversary celebration will be the beginning of its end. Europe, Afghanistan, indeed the whole world would be such a better place without NATO!
-------------------------
Russia's top secret spaceport no longer secret
17.03.2009 Source: Pravda.Ru URL: http://english.pravda.ru/russia/history/107245-Plesetsk_Cosmodrome-0
Plesetsk Cosmodrome is a Russian spaceport, located in the Arkhangelsk region, about 800 km north of Moscow and south of Arkhangelsk. During the Cold War period it was a super secret military facility. Now Plesetsk starts working for peaceful purposes sending peaceful satellites to the orbit.
Plesetsk was originally developed by the Soviet Union as a launch site for intercontinental ballistic missiles. Construction started in 1957 and it was declared operational for R-7 rockets in December 1959. The urban-type settlement of Plesetsk in the Arkhangelsk region had a railway station, essential for the transport of missile components. A new town for the support of the facility was named Mirny, Russian for "peaceful". By 1997, more than 1,500 launches to space had been made from the site, more than for any other launch facility, although the usage has declined significantly since the breakup of the Soviet Union.
The existence of Plesetsk Cosmodrome was originally kept secret, but it was discovered by British physics teacher Geoffrey Perry and his students, who carefully analyzed the orbit of the Cosmos 112 satellite in 1966 and deduced it. After the end of the Cold War it was learned that the CIA had begun to suspect the existence of an ICBM launch site at Plesetsk in the late 1950s. The Soviet Union did not officially admit the existence of Plesetsk Cosmodrome until 1983.
This month Plesetsk Cosmodrome will be used to launch of ESA's Gravity field and steady-state Ocean Circulation Explorer.
GOCE is ESA's first Earth Explorer mission and will map global variations in the gravity field with extreme detail and accuracy and will be placed into a low altitude orbit by a Russian Rokot vehicle from the Plesetsk Cosmodrome. This will result in a unique model of the geoid, which is the surface of equal gravitational potential defined by the gravity field, satnews.com reports.
This model of the gravity field is crucial for deriving accurate measurements of ocean circulation and sea-level change, both of which are affected by climate change. GOCE-derived data are also much needed to understand more about processes occurring inside Earth and for use in practical applications such as surveying and levelling.
------------------------
三井ハイテック、創業者遺族に高額弔慰金１４億円
2009.3.18 13:17
精密金型製造の三井ハイテック（北九州市）は、創業者で昨年７月に死去した三井孝昭前会長の遺族に弔慰金として１４億４０００万円を支払うことを決めた。４月２１日の株主総会での決議を経て支払う。
同社は平成２１年１月期連結決算で純損益が４１億円の赤字（前期は１６億円の黒字）に転落。同社は「業績悪化により功労金などは上乗せしなかった。社内規定に基づき、勤続年数や功績を考慮した」としている。積み立ててきた役員退職慰労引当金から支払う。
企業創業者への高額弔慰金としては、松下電器産業（現パナソニック）の松下幸之助氏に約１１億円が払われた例などがある。
三井氏は熊本県八代市出身。昭和２４年に前身の三井工作所を創業。約６０年間社長や会長を務め、同社を金型や半導体パッケージ用「ＩＣリードフレーム」の製造大手に育て上げた。
--------------------------
大相撲：大麻問題 元露鵬ら２人の仮処分申請却下－－東京地裁
尿検査で大麻の陽性反応が出て日本相撲協会から解雇されたロシア出身の元露鵬（２９）と元白露山（２７）の兄弟が、協会を相手取り力士としての地位確認などを求めた仮処分申し立てで、東京地裁（三浦隆志裁判官）は１６日、申し立てを却下した。
２人は協会の抜き打ち検査と精密検査で大麻の陽性反応が出たため、０８年９月に解雇された。三浦裁判官は「検査の結果に加え、結果に対してしかるべき説明をしておらず、２人は自ら大麻を使用したと認められる」と認定。「解雇は不当に重い」という主張も「協会の名誉を棄損し、解雇には合理的な理由がある」と退けた。兄弟側の代理人を務める塩谷安男弁護士は「到底納得できず、即時抗告を申し立て、上級審の判断を頂く」とのコメントを出した。
------------------------
元露鵬、元白露山仮処分申請却下
昨年９月に日本相撲協会を解雇されたロシア出身の元露鵬、元白露山が、力士としての地位保全等を求める仮処分申請が１６日、東京地裁に却下された。
元露鵬側は昨年９月に行われた薬物検査がずさんだったなどとして、解雇無効を求める本訴の判決が出るまで、仮に力士としての地位保全を求めていた。東京地裁は「ずさんであったとはいえない」とし、検査の正当性を認めた。これにより、給料の支払いを受けられなくなり、元露鵬側が係争中の、解雇無効を求める裁判を続けることが金銭的に難しくなった。
----------------------------
元露鵬らの地位確認、東京地裁が却下
大麻問題で昨年９月に日本相撲協会を解雇された元幕内露鵬と元十両白露山の力士としての地位確認を求めて申請した仮処分について東京地裁は１６日、「解雇には合理的な理由が存し、社会通念上相当で有効なものであると言わざるえない」とし、これを却下した。元露鵬、元白露山の代理人、塩谷安男弁護士は「納得できない。上級審での判断をいただく所存です」と近日中に東京高裁へ即時抗告する方針を示した。
--------------------------
どうするお寺の普請（下） 檀家本位で活路
2009年3月18日
「寄付は先代からの日々の交流の積み重ねだと思う。消極的な檀家（だんか）さんもいたが、次第に理解してもらえたように思う」
東京都大田区の円応寺の山川弘巳住職（４３）は、約十年前の本堂建て替えをこう振り返る。
少子高齢化で檀家が減るなか、寺の普請費用の工面は大きな課題だ。そのなかで新たな取り組みがある。
同寺の檀家は約百五十軒。建て替えに際し山川住職と総代役員らが多く負担。寺の預貯金も拠出した。山川住職は当時兼業していた大学職員の給与で生活、住職の給与は貯蓄して備えた。さらに檀家を増やそうと改築で空いた敷地を墓地にするなど自助努力を徹底した。
二〇〇七年に新しい本堂が落慶した千葉県市川市の不動院も同様だ。島根太真住職（５６）は「資金の半分は寺で出そうと土地を処分した」と話す。建設費を抑えるため五社から見積もりも取った。それでも檀家一軒四十五万円の寄付を要請せざるを得なかった。
実際に“希望額”以下の寄付もあったが、「寄付は強制ではない。全部を檀家さんに支えてくれと言うのは難しい」。そこで「寺の所有地での不動産収入も運営には必要」とマンション経営など収入確保に腐心する。
自助努力の一方、両寺とも檀家の理解を得るために、日ごろのつながりを重視する。二人とも「仏事以外でも、お寺を使ってほしい」と二階を本堂、一階を多機能スペースにした。山川住職は建て替え工事中に会報も発行、寺の状況を檀家に知らせた。
檀家離れを考え音楽会などを開催、こうしたイベント情報を会報で届けている東京都内の寺の男性住職（４５）は「今後、大きな寄付をいただくなら、寺の年収、運営経費、建設費といった、寺の情報開示が一番大事になる」と指摘する。
◇
愛知県小牧市の福厳寺は約三十年前から、全国的にも珍しい寄付を求めない会員制度で運営している。大学で宗教社会学を教えた高瀬武三住職（７４）は「死者の儀礼に固まった寺を、生きている人が心を癒やせる心の理想郷にしたかった」と話す。
会員制導入は、檀家一軒百万円程度の寄付が必要だった本堂の改修を契機にした。檀家約三百五十軒を訪れ、自らの考えや会費制による負担軽減などを説明。話し合って規約などを準備した後、檀家を解散。約四年がかりで会員制「護持会」を発足させた。
寺自体は曹洞宗だが宗派を問わず、入会金一万円、年会費六千円だ。寺とのつながりを深めるため五十回忌までの年忌供養を行い、年間行事に積極的に参加することも求めている。
現在会員は約千三百人で、法事の布施も増えた。整体診療所、スポーツジムなど「生きている人」を癒やす事業も展開する。
寺を運営する宗教法人は約七万七千（〇七年、文化庁調査）。コンビニ店舗数の約一・八倍という身近さだが、若い世代ほど仏教や寺は縁遠い。
「檀家は『家の宗教』で、個人の信仰ではない場合があるから、寺と檀家の間に溝が出てくる。努力しないお寺にも問題がある」
仏教事情に詳しい第一生命経済研究所の小谷みどり主任研究員はこう指摘した上で、「家族で寺との付き合いや墓をどうするか話し合ってみては」とアドバイスする。
-------------------------
国債買い取り額「かなり限界に近い」 日銀総裁会見
日銀の白川方明総裁は18日、長期国債の買い取り増額を決めた金融政策決定会合の後に記者会見し、「（買い取り額は）かなり限界に近い」と述べて日銀券発行残高の範囲内に収めるルールの枠内でぎりぎりまで拡大したという認識を明らかにした。長期資金の供給増を通じて市場の安定確保に全力を挙げ、景気の落ち込みを防ぐ姿勢を強調した。
会合では政策委員の全員一致で増額を決めた。日銀はコマーシャルペーパー（ＣＰ）買い取りなど企業の資金繰り支援策を相次ぎ実施。総裁は「年度末の資金繰りにはおおむねメドがついた」とする一方、「年度明け後も厳しい経済金融情勢が続くとみられ、引き続き積極的な資金供給を行っていくことが重要と判断した」と語った。
市場では政府の財政支出拡大に伴う国債増発で長期金利が上昇するのを抑える狙いがあるとの見方がある。総裁は「今後の国債増発への対応を念頭に置いて実施するわけではない」とし、財政の穴埋めや長期金利を低下させることが目的ではないと強調した。(00:33)
-------------------------
公務員制度改革、止まらぬ迷走 新組織、再び「内閣人事局」に
政府は18日、ずれ込んでいた国家公務員制度改革関連法案の3月中の閣議決定にメドを付けた。だが中央省庁の幹部人事を一元管理する新組織の名称は再び「内閣人事局」に戻り、規模や権限が縮小するなど妥協も目立つ。国会提出後の与野党修正の動きにも「巻き返し」をうかがう霞が関の思惑がちらつき、迷走が止まる気配はない。
甘利明行政改革担当相と鳩山邦夫総務相、中馬弘毅自民党行政改革推進本部長は18日、国会内で協議。新組織の名前を当初の「内閣人事局」とする方向で合意した。名称は昨年6月に成立した国家公務員制度改革基本法に明記されていたが、総務省行政管理局の移管を前提に一時は「内閣人事・行政管理局」に変える方向が固まっていた。
しかし行革相と総務相らは18日、行政管理局を丸ごと移さず、電子政府や独立行政法人管理、行革機能を総務省に残す方針で一致。行政管理局をすべて移さないなら、名称は内閣人事局のままでよいという判断だ。(18日 23:01)
------------------------
「名ばかり管理職」和解：広がる残業減の動き
名ばかり管理職問題の控訴審で和解を受け入れた日本マクドナルドは、訴訟の長期化による従業員の士気低下やイメージダウンを回避した格好だ。問題が大きくクローズアップされたことを受け、外食産業ではアルバイトを増やして残業時間を減らす動きが広がっているが、景気悪化の中、人件費削減圧力は強く、従業員の待遇の改善にはつながっていないのが実情だ。
マクドナルドは１８日、「社員の労働環境など仕事と家庭の調和の取り組みを続ける」などのコメントを発表した。同社は昨秋始まったこの訴訟の和解交渉を前に、０８年８月から店長らの残業代の支払いを始めた。ただ、アルバイトを過去２年間で２万人増やし、店長の残業時間を現在月８～１０時間に抑え、総人件費の伸びを抑えている。
こうした動きは外食産業を中心に他社にも広がっている。残業代の支払いは従業員の離職を食い止める狙いもあるが、外食不振の中、総人件費を増やさない制度改正が目に付く。
ファミリーレストラン「ロイヤルホスト」を展開するロイヤルホールディングスは、店長ら約１０８０人に対し年内に残業代を支給する。総人件費は全体で年間１０００万円程度の増加にとどまるという。居酒屋チェーン「ワタミ」も今年４月から、店長約６００人のうち管理職にあたらない４５０人について残業代を払うが、手当は引き下げる方針だ。
外食産業は人件費が売り上げの３割に達し、コスト抑制の圧力は人件費に向きがち。景気悪化で、「残業代を申告しにくい雰囲気が出ている」（外食関係者）との声もあり、制度見直しがサービス残業の解消に結びつかない可能性もある。
-------------------------
国直轄事業：自民「負担金制度見直し」…衆院選にらみ思惑
自民党で、追加経済対策の検討に合わせた地方へのリップサービスが目立つ。１８日に大阪市で講演した古賀誠選対委員長は、道路や河川など国の直轄事業の一定割合を地元自治体が負担する「直轄事業負担金制度」の見直しを明言し、制度廃止論の急先鋒（せんぽう）である橋下徹大阪府知事にエールを送った。地方重視の姿勢には、次期衆院選での支援を期待する思惑も透けている。
古賀氏は「思い切って見直す議論が必要だ」と述べ、橋下氏を「高く評価している」と持ち上げた。公務で遅れて到着した橋下氏は、古賀氏の発言を伝え聞き「地方は霞が関（官僚）の奴隷状態だ。政権与党の厳然たる力で日本を根本的に変えてほしい」と応じた。
自民党は追加対策で公共事業を中心とした歳出圧力を強めるが、負担金制度は地方財政を圧迫しかねない。道路族重鎮である古賀氏の見直し発言には、公共事業を確保する狙いがある。同時に、知名度が高い橋下氏の支援を得れば、無党派層の支持獲得にもつながると計算しているようだ。
石原伸晃幹事長代理も１６日、名古屋市での講演で、追加対策として中部国際空港の国際競争力強化や港湾整備を挙げ、「中部圏に限って言えばムダ（な公共事業）ではない」と言い切った。
自民党は今後、宮崎県の東国原英夫知事らにも選挙協力を求める方針だ。ただ、東国原氏は衆院選での政党支援について、先月の記者会見で「国民や地方にどういう政策を打ってくれるか。政策重視だ」と述べるにとどめた。
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment