GM Pensions May Be ‘Garbage’ With $16 Billion at Risk (Update2)

GM Pensions May Be ‘Garbage’ With $16 Billion at Risk (Update2)
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By Holly Rosenkrantz

April 8 (Bloomberg) -- Den Black, a retired General Motors Corp. engineering executive, says he’s worried and angry. The government-supported automaker is going bankrupt, he says, and he’s sure some of his retirement pay will go down with it.

“This is going to wreck us,” said Black, 62, speaking of GM retirees. “These pledges from our companies are now garbage.”

As the biggest U.S. automaker teeters near bankruptcy, workers and retirees like Black are bracing for what may be $16 billion in pension losses if the Pension Benefit Guaranty Corp. has to take over the plans, according to the agency. As many as half of GM’s 670,000 pension-plan participants might see their benefits trimmed if that happened, an actuary familiar with the company’s retirement programs estimates.

The possibility that GM might dump its pension obligations is likely to intensify debate over the treatment of executives of companies that receive U.S. aid. GM Chief Executive Officer Rick Wagoner, ousted by the Obama administration last month, may receive $20.2 million in pensions, according to a regulatory filing.

“The core issue is fairness,” said Harley Shaiken, a labor professor at the University of California at Berkeley. “To have workers lose a significant amount of their pension after giving a lifetime to building a company is devastating under any circumstance. It’s made all the more worse by the symbolism of a $20 million payoff at the top.”

Issue for Obama

Measured by participants, GM’s pension plan would be the largest taken over by the PBGC, a quasi-government corporation created by Congress in 1974 to protect pension programs of bankrupt companies.

Dealing with pensions may be one of the thorniest issues facing President Barack Obama in a GM bankruptcy. Unions including the United Auto Workers rallied behind his candidacy, spending $52 million to help elect him last year, according to Washington-based OpenSecrets.org, which tracks campaign spending.

In an election-night poll conducted by Peter D. Hart Research Associates, union members identified protecting pensions and Social Security and reducing health-care costs as their top goals for the new administration.

“It’s going to be a very political decision,” said John Casesa, who follows the auto industry as managing partner of Casesa Shapiro Group, a New York consulting firm. “I’m not really sure how this will go.”

$20 Billion Short

GM’s pension system had a $20 billion shortfall as of Nov. 30, 2008, based on numbers the company provided the PBGC, said Jeffrey Speicher, a PBGC spokesman. By law, the agency would be able to make up only $4 billion of that, he said.

“The rest would be lost,” Speicher said in an interview.

GM fell 7 cents, or 3.5 percent, to $1.93 at 4:15 p.m. in New York Stock Exchange composite trading and has dropped 40 percent this year.

Current and future retirees of Chrysler LLC, the other U.S. automaker on life support, would forgo $7.1 billion, Speicher said. Chrysler’s plan is underfunded by $9.3 billion, and the agency would cover $2.2 billion, he said.

Chrysler’s plan, with 250,000 members, would be the second- largest taken over by the PBGC. The biggest to date was the 120,000-member United Airlines plan, absorbed by the PBGC in 2005. The agency had an $11.2 billion deficit itself as of Dec. 31.

The $16 billion that would be lost by GM workers and retirees is a “big deal,” said Frank Todisco, senior pension fellow at the American Academy of Actuaries in Washington. “That’s a significant haircut on one’s benefits.”

Maximum Amount

The maximum amount that PBGC can pay retirees 65 or older is $54,000 a year. They would lose anything they get over that amount. Beneficiaries under 62 would be likely to lose a supplement of $15,000 to $18,000 paid by the GM plans to bring pensions up to $36,000 annually, according to the actuary with knowledge of the plans, who declined to be identified discussing potential cuts.

GM declined to disclose pension benefits or discuss what might happen to them should it file for bankruptcy.

“We won’t speculate on the matter,” said Renee Rashid- Merem, a spokeswoman for Detroit-based GM, which has received $13.4 billion in U.S. aid and asked for as much as $16.6 billion more.

Obama on March 30 gave GM until June 1 to come up with deeper cuts in debt and labor costs than proposed by Wagoner to avert bankruptcy. He gave Chrysler until May 1 to form an alliance with Italy’s Fiat SpA.

“Our goal, of course, is to do everything realistic to protect workers and their pensions,” said White House spokesman Bill Burton.

Chrysler’s Plans

“We expect Chrysler’s pension plans to be nearly fully funded and have ample liquidity to continue benefit payments as required,” said Michael Palese, a spokesman for the Auburn Hills, Michigan-based company.

Christine Moroski, a United Auto Workers spokeswoman in Detroit, declined to comment.

Black, the former engineering executive, says he worked at GM for 34 years and for two years at Delphi Corp., the bankrupt auto-parts supplier formerly owned by the automaker.

“If GM loses the pensions, it would mean 25 percent of my source of income would evaporate,” said Black, who declined to say what his retirement pay is. “I would have to go back to work.”

Returning to work may not be an option for other GM retirees, Black said. “I’ve talked to lots of folks who would be devastated,” he said.

Not All Companies

Not all companies that go bankrupt dump their pension obligations, said Speicher, the PBGC spokesman. Northwest Airlines Corp. emerged from bankruptcy in 2007 without terminating its plans, he said.

GM’s plan also is in relatively better shape than others, because it’s about 87 percent-funded, according to the actuary, compared with the typical pension plan’s 60 percent to 70 percent funding.

“The question of whether GM’s pension obligations are too great to allow it to operate effectively is a complicated one, and far from obvious,” said Andrew Oringer, an employee- benefits lawyer at White & Case LLP in New York.

“Nobody really knows” what would happen with GM pensions in a bankruptcy, said Jack Dickinson, president of an advocacy group for GM retirees called Over the Hill Car People.

The “PBGC doesn’t want to touch it, they’ve got their own problems,” said Dickinson, 65, who worked for 34 years in sales and management at GM. “We’re just hoping they take a hands-off approach. We depend on that money; we earned it, and it’s part of our compensation.”

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Party Ends for Russian Rich After $230 Billion Losses (Update1)
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By Anastasia Ustinova

April 8 (Bloomberg) -- Champagne and caviar are out in Moscow, and vodka and pelmeni dumplings are back in.

Rich Russians, stung by the end of the biggest economic boom in their history, are tempering the opulent lifestyles that made the city of 10 million the bling capital of Europe.

Demand for private jets and $500,000-a-week yachts has collapsed, while a survey by restaurant consulting group Restcon found revenue at high-end eateries has halved. Luxury-clothing boutiques selling brands such as Alexander McQueen and Stella McCartney are closing down.

“A new lifestyle mentality is taking shape,” said Roman Trotsenko, 38, the millionaire founder of airport builder Novaport. “People aren’t really in the mood to party.”

Moscow had 74 billionaires a year ago, more than any other city in the world. Now it has 27, according to Forbes magazine. The 25 richest Russians lost a combined $230 billion during six months last year as the value of their companies plunged along with commodity prices, according to Bloomberg calculations.

The government expects the economy to shrink 2.2 percent this year after expanding about 7 percent a year since 1999. Unemployment is at a four-year high of 8.5 percent. The proportion of people who consider themselves “poor” has doubled to 14 percent in the past year, according to the All- Russian Center for the Study of Public Opinion in Moscow.

“You just can’t party when others are starving,” said Boris Teterev, president of Rolls-Royce Motor Cars Moscow, which opened in 2004 to cater to Moscow’s nouveau riche.

‘Spending Isn’t Fashionable’

Trotsenko said Russians are increasingly spending more time with their families, on trips to theaters and museums and “home parties” with vodka and pelmeni.

Conspicuous consumption was socially acceptable during the boom, when unemployment was falling and wages were rising, said Trotsenko, who is worth $70 million, according to Finans magazine, a Russian competitor of Forbes.

Teterev, 55, who has a personal fortune of $200 million, according to Finans, envisages Rolls-Royce sales will fall by as much as a third this year. That’s about twice the rate of decline that Milan-based industry group Altagamma predicts for Russia’s $5.7 billion luxury market as a whole.

“Spending just isn’t fashionable anymore,” said Kirill Shishkov, co-owner at Teorema Holdings, which develops residential and commercial property in St. Petersburg.

Shishkov, 37, who spoke by mobile phone en route to the Swiss Alps, also is among the 400 Russians who are worth at least 2 billion rubles ($60 million) each, according to Finans.

‘Moral Debts’

While part of the change in spending behavior is due to shrinking fortunes, politics is playing a role, said Alexander Dobrovinsky, a corporate and divorce lawyer whose clients have included the ex-wife of billionaire Alexei Mordashov, 43, chief executive officer of steelmaker OAO Severstal.

Many oligarchs are seeking state protection from Western creditors and don’t want to irritate the Kremlin with outlandish behavior at a time when the government has declared social spending its top priority, Dobrovinsky said.

“The private jets are still there, but the names of the owners have been scratched off,” said Dobrovinsky.

President Dmitry Medvedev spelled it out last month, saying the wealthiest Russians need to focus more on their businesses and less on personal spending to help the country weather the worst economic crisis in a decade.

“People became very wealthy in a very short time,” Medvedev, 43, a lawyer by training, said in a March 15 television interview. “Now it’s time to repay debts, moral debts, because this crisis is a test of maturity.”

‘Anti-Glamour’

Medvedev was voicing support for what state television and talk radio call the “anti-glamour revolution.”

Alexander Lebedev, 49, said many of his fellow billionaires “accumulated huge debt buying all those mega-yachts and private jets” and will struggle to pay it back. “Medvedev is not going to reeducate them, but real life will,” said Lebedev, whose assets, including 29 percent of airline OAO Aeroflot, are worth $1.9 billion, according to Finans.

A lot of the decline in spending is simply down to image, said Teterev at Rolls Royce. “People who lost their money now pretend it’s trendy, but if you have resources, you will never get rid of your driver or your cleaning staff,” he said.

There’s also evidence the Russian party is just moving elsewhere, away from the Kremlin’s gaze.

“We’re sold out this season,” said Alexi Usati, owner of Retrohunt, a Namibian company that offers Russian clients “hunting and safari adventures” for $150,000 each.

‘Fast, Slick, Cheap’

There’s no sign of crisis, either, at Most, a French restaurant a block from Red Square that recently charged a couple $16,000 for dinner. “Our guests are used to this lifestyle,” General Manager Mikhail Dolgi said.

Moscow authorities last month allowed dozens of people to demonstrate downtown against ostentatious spending, with placards saying, “Glamour is a party during the plague.”

“The glamour lifestyle is promoted by those who agree with the pro-American lifestyle and want to destabilize our society during these difficult times,” said Alexander Bovdunov, a spokesman for Eurasia Youth Union, which organized the event.

In February, Medvedev banned his staff from vacationing abroad without permission after three Kremlin officials were spotted partying in the glitzy French ski resort of Courchevel, according to the Kommersant newspaper.

Mikhail Prokhorov, then CEO of OAO GMK Norilsk Nickel, embarrassed the Kremlin two years ago by flying in a planeload of women for a private party and getting arrested on suspicion of pimping. He was cleared of any wrongdoing because the judge ruled there wasn’t enough evidence.

Prokhorov, 43, now Russia’s richest man, appears to have gotten the message and is even leading the charge against the same opulence he displayed in Courchevel.

Snob, his lifestyle magazine for jetsetters, last month declared the new motto for Moscow: “Fast, Slick and Cheap.” Snob told its readers that “saving money is the trendiest thing to do at the moment.”

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Switzerland in tax talks with Japan, Poland

Yesterday, 06:06 pm
AFP

Switzerland is engaged in talks with Japan and Poland about bolstering dual taxation agreements after the easing of its banking secrecy laws, the government said Wednesday.

Finance Minister and President Hans-Rudolf Merz said after a cabinet meeting that a total of 14 countries have so far asked to revamp dual taxation agreements with Switzerland.

He confirmed that talks with the United States to incorporate OECD standards on exchanging income tax information would start on April 28 .

Switzerland announced on March 14 that it would ease its bank secrecy laws and help foreign authorities track down cases of tax evasion, following months of international pressure on offshore financial centres for more cooperation.

Merz said the talks with Japan were at an "advanced stage."

But negotiations with the United States could take more time because of legal issues, especially with a US tax evasion lawsuit targeting customers at Swiss bank UBS, he added.

Germany -- whose Finance Minister Peer Steinbrueck has been at the forefront of trenchant criticism of the Swiss and banking secrecy -- has still not made a formal request for talks.

Merz said "satisfactory preconditions" for talks with Germany did not exist yet and suggested that some of Steinbrueck's comments still rankled.

No list was given of the countries that had approached Switzerland but two weeks ago Merz said they included the Netherlands and Denmark.

The first revised dual taxation agreement to be concluded could be subject to an optional nationwide referendum, the federal government confirmed.

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Russia banking crisis just beginning: top banker

Yesterday, 04:07 pm
AFP Anna Smolchenko

Russia's banking crisis has only just begun and the government has been slow to react, the head of its largest bank said Wednesday, contradicting optimistic comments by Prime Minister Vladimir Putin.

The blunt comments by Sberbank chief executive German Gref, who also said bad loans in Russia were increasing by 20 percent a month, came just two days after Putin said the threat to the banking system had receded.

"A banking crisis in Russia is in its very beginning and it will come from the real (non-financial) sector of the economy," the RIA-Novosti news agency quoted Gref as saying at a conference.

"Slow decision making and the weakening of regulatory requirements led to the accumulation of bad debts," said Gref, a former long-serving minister of economic development under Putin's presidency.

"The topic of bad debts is the most key and painful. This is an unpopular political theme."

Overdue loans in Russia are increasing by 20 percent a month, he said, as companies are struggling to repay debts.

Arkady Dvorkovich, President Dmitry Medvedev's top economic adviser, issued a similar warning, saying that another wave of the economic crisis would follow and Russia's banking system will be "seriously" affected, ITAR-TASS reported.

Authorities expect that the ratio of non-performing loans in the system will rise to 10 percent by year's end from the current level of 3.3 percent.

In a report posted on Sberbank's website Wednesday, Gref said that "probably no one has a precise estimate for the amount of problem loans" in Russia and it could end up being over 10 percent.

In 1998, when the country defaulted on debt and devalued the ruble, the amount of non-performing loans was 40 percent, Gref said, citing International Monetary Fund data.

He added that he had forecast at a government meeting in September 2008 that gross domestic product would contract by four percent.

"Everybody was laughing at it back then," said Gref. "But it is obvious today that these are absolutely real figures that will apparently be realized."

The remarks by Gref -- who was appointed to head Sberbank in 2007 -- came on the heels of Monday's announcement by Putin that the government had managed to avert a banking crisis.

"The threat of a banking system (crisis) has receded. And it had been literally on the doorstep," Putin told the Russian parliament as he presented his government's anti-crisis plans.

He also said the ruble had stabilised after losing over a third of its value and that inflation would likely drop in 2009.

Mounting economic troubles have cast doubt on the future of Putin's government, whose popularity is largely based on the growth and stability achieved during his eight-year presidency that ended in 2008.

Putin said the government planned to spend at least 1.4 trillion rubles (42 billion dollars) this year to fight the effects of the crisis.

That figure rises to 3.0 trillion rubles if central bank reserves and those of other government institutions are taken into account, Putin said.

Authorities have repeatedly slammed banks for stashing away state money and converting it into foreign currency instead of channeling the funds into the productive sectors of the economy in the form of loans.

Medvedev defended Wednesday the state's right to regulate commercial banks' lending rates as a temporary measure to confront the crisis.

"Ideally, there is no need to regulate lending rates but in a difficult situation -- for six months to a year -- these processes should be implemented according to different scenarios," he told the governing United Russia party.

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Insight: Gold standard debate roars on

By Gillian Tett

Published: April 8 2009 17:43 | Last updated: April 8 2009 21:34

A few months ago, Terry Smith, head of Tullett Prebon, the interdealer broker, chaired a panel at the World Economic Forum meeting in Davos which was asked to produce one concrete recommendation to fix the global financial crisis.

The top pick? Not anything on toxic assets or fiscal spending. Instead, this gaggle of leading financiers called for a new reserve currency, akin to an old-style gold standard.

“Two-thirds of the world’s assets are denominated in a fiat currency issued by a country whose authorities are taking policy actions which seem inevitably to lead to its debasement,” explains Mr Smith, noting that “it seems . . . the Chinese have now concluded that this is not acceptable”.

Just a bit of pie-in-the-sky posturing of the sort that often occurs in high-altitude Davos? Perhaps. But Mr Smith is hardly a do-gooding, state-loving dreamer; on the contrary, Tullett Prebon is about as ruthlessly free-market as they come.

Moreover, these musings about a gold standard are currently cropping up in all manner of unlikely places. One savvy European property developer (who aggressively sold most of his holdings in early 2007) recently told me that he is now moving a growing proportion of his assets from government bonds into gold, even at today’s elevated prices.

“The logical conclusion of where we will end up eventually is with some type of gold standard,” he explains, arguing that future inflation will almost inevitably cause a future collapse in government bonds.

Half a world away in the Middle East, some sovereign wealth funds now say that they are stocking up enthusiastically on food and gold, due to similar reasoning.

Meanwhile, in New York a (still) formidable American hedge fund recently circulated private research that echoes the reasoning of Mr Smith. Most notably, this hedge fund points out that since the world abandoned the gold standard on August 15, 1971 credit creation has spiralled completely out of control.

But this four-decade long experiment with fiat currency is not just something of a historical aberration, it argues – but potentially very fragile too. After all, the only thing that ever underpins a fiat currency is a belief that governments are credible. In the past 18 months that belief has been tested to its limits. In coming years it could be shattered, particularly if the current wave of extraordinary policy measures unleashes a wild bout of inflation.

Hence the chatter about a gold standard. Indeed, as the debate bubbles up, some financiers are now even emailing each other an extraordinary little essay that Alan Greenspan himself wrote in support of a gold standard back in the 1960s, called “Gold and Economic Freedom”*.

In the years since he penned this essay, Greenspan has partly backed away from those ideas (and he blatantly ignored their implications when he was at the Fed.) But now they look prescient.

“Under a gold standard, the amount of credit that an economy can support is determined by the economy’s tangible assets . . . [but] in the absence of the gold standard . . . there is no safe store of value,” Greenspan wrote back then, pointing out that without a gold standard in place, there is little to prevent governments indulging in wild credit creation. “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

Of course, for the moment all this muttering about gold is simply wild speculation. Even if western leaders suddenly were to decide they wished to turn back the clock, the logistics of embracing a new gold standard would be mind-boggling. UBS, for example, calculates that the US reserve of gold are so small, relative to its monetary base, that a price above $6,000 an ounce would be needed to reintroduce a gold standard. To implement that standard in Japan, China and the US, the price would be more than $9,000. Moreover, right now few western governments have any motive to even entertain the debate, given that inflation may soon seem the least bad way to tackle the current overhang of debt.

But what this debate does show is just how much cognitive dissonance – and utter uncertainty – continues to stalk the markets. It might seem almost unthinkable to propose a return to a gold standard, in other words. However, the key point is that the last 18 months have already produced a stream of once unimaginable events.

Given that, shell-shocked investors are increasingly reluctant to rule anything out, as they stare at such uncharted waters. So while I would not bet today on a gold standard returning any time soon, I would also not bet that the debate dies away. Nor would I bet that the gold price crashes too far from its current rate of $900, while so much fear continues to stalk the world.

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Downbeat outlook prevails inside Fed

By Krishna Guha in Washington

Published: April 8 2009 20:30 | Last updated: April 8 2009 22:40

The Federal Reserve sharply downgraded its economic outlook at its latest meeting only three weeks ago, minutes released on Wednesday revealed, challenging the view that green shoots of recovery are now plain to see.

“The staff’s projections for real GDP in the second half of 2009 and 2010 were revised down,” the minutes say. Fed staff no longer expected growth would recover this year, and instead forecast that output would “flatten out gradually” in the second half and then “expand slowly next year”.

While Fed policymakers took note of some news that was better than expected on housing and consumer spending, they appeared reluctant to put much weight on this. Most “viewed downside risks as predominating in the near term”.

Officials worried about “adverse feedback effects as reduced employment and production weighed on consumer spending” and a “weakening economy boosted the prospective losses of financial institutions, leading to a further tightening of credit ­conditions”.

The downgrade to the forecast led the Fed to announce that it would sharply increase its purchases of assets and would start buying Treasuries for the first time to try to support growth.

The minutes reveal disagreement within the Fed as to how robust the eventual recovery will be. Some officials “believed that the natural resilience of market forces would become evident later this year”. But others “saw recovery as delayed and weak”. Some worried that the crisis could ultimately lead to a reduction in the potential growth rate of the US economy.

While there has been better news since the March 18 meeting, the tenor of the Fed discussion suggests most policymakers will treat this data with scepticism.

Investors shrugged off the Fed’s assessment. The S&P 500 index dipped but closed back up nearly 1.2 per cent. The yield on 10-year Treasuries declined 6 basis points to 2.83 per cent.

Fed officials were concerned about the “degree and pervasiveness of the decline in foreign economic activity”. Policymakers “did not interpret the uptick in housing starts in February as the beginning of a new trend”, the minutes say.

Some policymakers noted “tentative signs of stabilisation in consumer spending in January and February”. But “others suggested that strains on household balance sheets from falling equity and house prices, reduced credit availability and the fear of unemployment could well lead to further increases in the savings rate that would damp consumption growth”.

While businesses were liquidating excess inventories, ratios of inventories to sales remained high. Given this, “participants anticipated further employment cutbacks . . . though perhaps at a gradually diminishing rate”.

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Met embarrassed after terror leak

By Bob Sherwood and Andy Bounds

Published: April 8 2009 19:09 | Last updated: April 8 2009 23:29

The Metropolitan police was facing embarrassment after the country’s most senior counter-terrorism officer inadvertently leaked details of an imminent anti-terror operation shortly before police swooped on 12 suspects.

Bob Quick, an assistant commissioner in charge of the counter-terror unit at Scotland Yard, was photographed going into Downing Street on Wednesday carrying a dossier in full view. It clearly revealed details of co-ordinated raids to arrest alleged al-Qaeda-linked activists believed to be planning an attack in the UK.

Within hours of the picture’s release, the North West Counter-Terrorism Unit mounted raids in Manchester, Liverpool and Lancashire. Twelve men were arrested in seven locations under the Terrorism Act during a co-ordinated operation that started at 5.30pm. Hundreds of officers from the Merseyside, Greater Manchester and Lancashire forces raided eight addresses. MI5 officers were also understood to be taking part and searches were continuing last night.

After press photographers captured Mr Quick’s dossier, newspapers were banned from publishing the pictures in a rare D-notice issued by the Ministry of Defence to safeguard national security.

But there was speculation that the possibility of a leak of police plans, and even knowledge of Mr Quick’s arrival at Downing Street, had caused the police to accelerate the anti-terror operation for fear that the suspects could be alerted.

Mr Quick had gone to Downing Street to brief a high-level meeting, chaired by Gordon Brown, prime minister, about the anti-terror operation.

Among the papers under his arm was a white briefing document marked “secret”. The information it contained included the secret operation code, names of participating forces and senior officers, locations of the raids, the number of suspects sought for detention and details about the threat.

The Met said: “[Mr Quick] has openly said he made a mistake in leaving a document in open view and has apologised to the commissioner and colleagues.”

However, police refused to confirm links between the security breach and the raids.

On Wednesday afternoon armed counter-terrorism officers raided four addresses in the Cheetham Hill area of Manchester, including an internet café, while others targeted a building at Liverpool John Moores University, houses near Liverpool University and a guest house in Clitheroe, Lancashire. One suspect was detained on the M602 in suburban Manchester.

Det Chief Supt Tony Porter, head of the North West CTU, said: “Today’s action is part of a continuing investigation and we have acted on intelligence received.”

Police declined to confirm reports that those arrested were Pakistani nationals or indicate whether a terror attack had been imminent.

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Don’t rule out Dubai comeback

By Roula Khalaf

Published: April 8 2009 19:08 | Last updated: April 8 2009 19:08

Traffic is thinner, housing prices are in freefall, and hotels are more affordable. Schools that once furiously turned students away are suddenly welcoming, and snobbish sports clubs are unexpectedly friendly.

This is the new Dubai – a city that, for the fortunate ones who are holding on to their jobs, now feels a lot more pleasant.

The gossip among expatriates – and they form the vast majority of the population – is about how the global financial crisis has arrested the city-state’s wild ride and driven some of their friends away.

Even the most cynical residents admit Dubai is down but not out and that it will eventually make a comeback as a less exuberant and, above all, as a more liveable place.

It will take determination, however, to endure the economic downturn and to shift Dubai’s mindset from insatiable ambition for bigger and glitzier towers to more modest aspiration and cautious crisis management.

It took months for the government to admit the emirate had overleveraged and overextended itself as it rushed to build the Middle East’s leading business hub. Even today, Dubai remains obsessively keen to keep its problems out of the public eye.

Yet Dubai is also starting to act. It swallowed its pride and borrowed $10bn (with as much available still) from the federal government of the United Arab Emirates – in effect, its richer neighbours in Abu Dhabi – to help refinance its debts and to assist government-affiliated companies to pay their bills.

And it has started to restructure and to consolidate its sprawling government-affiliated conglomerates, which had thrived on competing against each other, feeding the construction frenzy that has now ground to a halt, and leaving contractors fuming about unpaid bills.

The Dubai model was based on thinking big and accomplishing the impossible, but the city-state has been forced to scale back as projects are put on hold or scrapped.

In the short term, there is more pain in prospect. Everyone in the city is waiting for the end of the school year to see how many expatriates leave. The government claims there are still more people moving in than out but some banks forecast the population will shrink by as much as 17 per cent.

To limit the pain, Dubai will have to act even more vigorously on two fronts. First, it has still to convince the markets it is capable of engineering a fundamental restructuring.

The emirate likes to be known as an outwardly, cosmopolitan city, but it has not come to terms with the responsibility alongside that – crucially, the need for transparency.

“We don’t have a problem about Dubai repaying its debts. Our question is: can they implement what they have to?” says a senior banker. “They’re not providing information and it’s a badly timed silence.”

Second, Dubai should find some way to allow expatriates who lose their jobs (and therefore their residency visas) to stay on in the city.

Lay-offs leave residents in a legal limbo, if not actually a legal nightmare, and the jails are filling up with people accused of bouncing cheques, which is a criminal offence in the emirate.

The scale of the problem has even prompted Dubai’s police chief to call for a change in regulations.

“Dubai doesn’t have legal infrastructure. But now that contractors are not being paid, employees are being laid off [and consequently] Dubai as a financial centre faces a big test,” another banker points out.

If these central problems were to be tackled, then Dubai could, as its officials are hoping, be among the first to rebound when the global economy recovers. Dubai as the region’s main business centre remains viable.

Even neighbours that secretly rejoice at its present distress will admit that.

Despite the misguided focus of recent years upon real estate, the economy has solid foundations. Dubai, after all, is the region’s main trading hub, with ports and airports unmatched in the Gulf. Tourism, too, will recover, and the emirate will probably remain the favourite finance base for the Middle East.

As one eminent businessman expresses it: “By [forming] a service economy, Dubai has become a clearing house for this part of the world, where suppliers of goods and services meet buyers.” The city-state will endure two bad years, he forecasts. But he concludes by insisting: “[Even as] a scaled-down version, it will still work.”

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UAE groups fail to pay bills

By Andrew England in Abu Dhabi

Published: April 9 2009 05:36 | Last updated: April 9 2009 05:36

Lord Mandelson has raised concerns about the failure of developers in the United Arab Emirates to pay British contractors, and has sought reassurances from local rulers that financial commitments will be honoured.

The UAE, particularly Dubai, has been hit hard by the global financial crisis, and some contractors and consultants have complained that they have not been paid for up to six months. Government-linked developers dominate the UAE’s property sector, and cash-strapped Dubai-affiliated companies are thought to owe billions of dollars.

Lord Mandelson, the business secretary, told the Financial Times he had raised the issue with Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler, and Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, the UAE’s capital, “stressing the need to give reassurance and confirmation that contractors will be paid”.

He said: “I have had concern expressed to me about [delayed payments]. “Nobody thinks that anyone in Dubai or Abu Dhabi is going to default, and people understand the delay, but what they want is reassurance that the delay will not become permanent and that bills will be paid because these are contractors employing very large quantities of labour.”

He said he was encouraged by what he was told, with assurances that fresh liquidity would be coming into the market.

Dubai received a $10bn (£6.8bn) loan from the UAE’s federal government last month as part of a $20bn bond issue made by the emirate. Funds are expected to start being disbursed to government-linked companies in the next few weeks.

Property, which had accounted for up to a third of Dubai’s gross domestic product, has been badly hit by the financial crisis .

Abu Dhabi, with about 95 per cent of the UAE’s hydrocarbons, has significant financial resources, but some contractors have also complained of delays in payments. It has recently raised $3bn as part of a $10bn bond programme to help finance projects, ease credit markets and help develop the domestic bond market.

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ING to focus on Europe

1 hour 25 mins ago
Reuters

Dutch financial services group ING Group said on Thursday it plans to divest operations worth up to 8 billion euros (7.2 billion pounds) to reduce risk and focus on Europe, life insurance and retirement services.

ING , which was loss-making in 2008 and got a 10 billion euro injection from the Dutch state last October, said in a statement it wants to divest non-core activities worth 6 to 8 billion euros, or 10 to 15 businesses.

It had previously targeted divestments of 2 to 3 billion euros and had already sold a stake in ING Canada .

($1=.7553 Euro)

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果樹に被害「植物のウイルス」　都内のウメから検出
2009.4.8 23:16

　東京大植物病院と農林水産省などは８日、海外でサクラ属の果樹に被害が広がっている植物ウイルス「プラム・ポックス・ウイルス（ＰＰＶ）」を、国内で初めて東京都青梅市内のウメから検出したと発表した。

　ＰＰＶはモモ、スモモ、アンズなどに感染し果実が成熟する前に落下するなどの被害をもたらす。ウメでの自然感染が確認されたのは世界で初めてとしている。人には感染しないので果実を食べても問題はないという。

　検査した難波成任・東京大教授によると、青梅市内で栽培されたウメに昨年七月、異常が見つかり調査を開始。葉や花弁に、斑点やまだら模様など感染を示す症状を確認し、遺伝子解析などの結果、ＰＰＶを検出した。

　ＰＰＶはアブラムシのほか、感染した苗木などからも広がることがあるという。農水省は東京都に対し、ウイルスが確認された場所のアブラムシを防除するよう要請。今後、ウメやモモなどの生産地で発生例がないか全国調査を行う予定。

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「眺望利益」認定、相模湾見渡す別荘地で建築禁止の仮処分
大学教授の別荘から見下ろした相模湾の眺望
隣接地に住宅が建てられた場合の眺望（設計図などに基づき合成）＝２枚とも大学教授提供

　相模湾を見下ろす神奈川県真鶴町の別荘の所有者が、海側に高さ約８メートルの住宅を新築しようとしている隣接地の所有者に対し、「風光明媚(めいび)な眺望が奪われる」として、建築差し止めを求めた仮処分申し立てで、横浜地裁小田原支部が差し止めを命じる決定をしていたことが分かった。

　決定は６日付で、片田真志裁判官は「別荘からの良好な眺望は法的保護に値する」と述べた。眺望を保護すべき利益として建築禁止を命じる司法判断は極めて珍しい。

　申し立てたのは東京都内の私立大学教授（５９）。決定などによると、教授は３０年以上、真鶴半島の付け根部分の斜面にある別荘を家族で利用してきたが、２００６年に隣接地を購入した女性が高さ約８・３メートル、幅４０メートル以上の２階建て住宅の新築を計画した。１階部分は主に支柱、居住スペースは２階にある構造で、昨年８月に建築確認を終えた。

　教授は、設計図などをもとに眺望予想図を作成し、「計画通り住宅が完成すれば、水平線や丘陵地の住宅街などの美しい眺めが、壁に遮られて見えなくなる」と主張。女性側は「眺望の制限は小さく、計画変更には多大な費用がかかる」と反論していた。

　決定は、眺望を気に入って別荘として使用してきた教授には、良好な眺望を享受できる「眺望利益」があると認定。隣人女性について、「平屋建てでも良好な眺望が得られるのに、自らの都合だけで設計を行い、事前の交渉も避けている。工事の続行は眺望を奪い、眺望利益の侵害にあたる」と指摘し、双方が協議して利害を調整するよう付言した。

　眺望や景観を巡っては、栃木・日光で杉の伐採を伴う国道拡幅工事を巡る訴訟で、宇都宮地裁が１９６９年、文化的価値を認めて事業認定を取り消した判決（２審で確定）がある。国立マンション訴訟の１審では、東京地裁が２００２年、建物の一部撤去を命じたが、２審で逆転した。

　住宅地の景観を巡っては、今年１月、漫画家の楳図かずおさんの「赤白ストライプ」の自宅を巡る訴訟で、東京地裁が、近隣住民の景観利益を認めず請求を棄却している。

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「家賃高くて」仏総領事館、大阪から京都に“流出”へ
フランス総領事館が移転する予定の関西日仏学館（京都市左京区で）＝菊政哲也撮影

　在大阪・神戸フランス総領事館（大阪市中央区、館員６人）がオフィス賃料の節減を理由に来年１月、京都市内に移転することがわかった。

　西日本を管轄する総領事館、領事館を多くの国が大阪に置く中、主要８か国の「流出」は２００７年にカナダが領事館を閉鎖して以来２例目で、今後、拍車がかかる可能性もありそうだ。京都では初の総領事館となる。

　仏大使館などによると、大阪城そばの高層ビルにある総領事館を、京都大近くの関西日仏学館（京都市左京区）内に移す。経済分野の機能は残す方針で、フィリップ・フォール駐日大使が近く関係先に説明する。

　大使は仏大使館のホームページで、パリの姉妹都市・京都に移ることで「フランス人と日本人との交流が一層広がる」と説明。移転理由は「賃貸料の節約」としているが、経済力を増す名古屋の存在を考慮し、関西・中部圏を統括するのに中間の京都が有利との判断もあったとみられる。

　移転先の同学館は１９２７年、高名な詩人だった当時の駐日大使ポール・クローデルらが設立。文化の普及や交流の場として仏政府が運営している。

　外務省などによると、関西には多い時で３０か国以上の総領事館、領事館があったが、現在は１９か国で、うち大阪は１７か国。

　大阪府の重枝豊英・国際交流監は「大阪の国際化や、ビジネスチャンスを得る上で重要な存在。できれば残ってほしいが、文化に力を入れている国なので京都がいいと判断したのだろう」と話している。

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弁護士会が容疑者支援　京都府警は送検　高１殺害事件

2009年4月9日15時2分

　京都府舞鶴市で昨年５月、高校１年の小杉美穂さん（当時１５）が殺害された事件で、京都弁護士会は、殺人・死体遺棄容疑で逮捕された中勝美容疑者（６０）＝窃盗罪で服役中＝に対し、同弁護士会の刑事委員会から刑事事件に詳しい若手弁護士を派遣した。中容疑者から選任されれば、委員会をあげてバックアップする。一方、京都府警舞鶴署捜査本部は９日午前、中容疑者を京都地検に送検した。

　昨年１１月に中容疑者が窃盗容疑で逮捕されて以降、京都弁護士会所属の藤居弘之弁護士らが府警の家宅捜索に立ち会うなどしてきたが、殺人・死体遺棄容疑での逮捕を受けて、弁護士会は刑事委員会から新たに小嶋敦弁護士を派遣した。

　弁護士会によると、女子高生が殺害されて埋められた重大事件で世の中の注目度が高いうえ、犯行を直接裏付ける物証が乏しく、中容疑者が否認を続けていることから自白を強要される恐れなどがあるとして、輪番の当番弁護士ではなく、刑事弁護に慣れた弁護士が必要と判断した。すでに、小嶋弁護士は７日、中容疑者が留置されている府警山科署（京都市）に接見に訪れている。選任されれば、中容疑者から取り調べの状況を聞き取ったり、刑事裁判の仕組みを教えたりする。

　一方、中容疑者は９日午前９時２０分ごろ、同署から京都地検へ身柄を送致された。中容疑者を乗せたワゴン車が山科署の駐車場を出ると、報道各社のカメラマンらが一斉にシャッターを切った。約３５分後、京都地検に到着した。京都地裁が地検の勾留（こうりゅう）請求を認め次第、中容疑者への本格的な取り調べを始め、事件の全容解明を急ぐ。

　捜査関係者によると、中容疑者は雑談には応じるものの、殺人・死体遺棄容疑については「やってないことを説明できない」「他のやつがやったことでなぜ捕まらねばならないのか」などと否認しているという。

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力士暴行死、母「相撲道どこにいったのか」　前親方公判

2009年4月9日11時32分

　大相撲・時津風部屋の序ノ口力士斉藤俊（たかし）さん（当時１７）＝しこ名・時太山（ときたいざん）＝の暴行死事件で、傷害致死罪に問われた前親方山本順一被告（５９）の公判が９日、名古屋地裁であった。斉藤さんの母利枝（としえ）さん（４４）が意見陳述し、「あなたからは反省の態度は感じられない。良心、情はあるのですか。あなたの相撲道はどこにいったのですか」と訴えた。昨年の兄弟子の公判と前親方の公判を通じて、利枝さんが法廷に立つのは初めて。

　利枝さんは、昨年、前親方から届いた手紙や公判で繰り返された謝罪の言葉に対し、法廷で「本当のことを言わないまま頭を下げられても、あなたの気持ちも事件の真相も伝わってこない」と話した。

　また、事件直後に前親方が自宅を訪れた際に、無表情なまま腕を組んで「通常のけいこだった」としか言わず、その後に、ビール瓶で殴ったことを認めたことに対し、「なぜ最初から本当のことを言ってくれなかったのか」と問うた。そして「なぜ俊があんな無残な姿で死ななければならなかったのか。あのとき、『逃げておいで』と言えなかったのか、後悔しています」と悲しみを吐露した。

　最後に、同罪で有罪が確定した兄弟子らは前親方の指示に従わざるを得なかったとして、「事件の全責任はあなたにあると思います。事件の真相を明らかにし、俊の無念を晴らすことが私たちにできるただ一つのこと。納得できるように、重い実刑が下されることを望みます」と結んだ。

　意見陳述の間、前親方はじっと目を閉じたまま、利枝さんの話を聴いていた。前親方は起訴事実を否認している。

　この日は、父正人さん（５２）の証人尋問の予定だったが、療養中のため、利枝さんが出廷した。

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時太山の母「責任は親方、実刑望みます」

　大相撲時津風部屋の序ノ口力士時太山（当時１７、本名斉藤俊さん）暴行死事件で、傷害致死罪に問われた元親方山本順一被告（５９）の公判が９日、名古屋地裁（芦沢政治裁判長）であり、初めて斉藤さんの母利枝さん（４４）が出廷し「事件の全責任はあなた（山本被告）にある。重い実刑を切に望みます」などと述べた。

　斉藤さんの父正人さん（５２）が体調不良で入院し出廷できなかったため、利枝さんの意見陳述となった。

　法廷で利枝さんは「俊が生きていれば今年で２０歳。土俵での活躍に家族で声援を送っていたかもしれない」と述べ、「同じような年代の子どもを見ると、やり切れない思いで胸がつぶされそうになる」と声を震わせた。

　また「『逃げておいで』となぜ言ってやれなかったのか」「親方夫婦なら俊を育ててくれると思った。だまされてしまった」と悔やみ、「俊がどれだけ苦しかったのか、つらかったのか想像できない」と語気を強めた。

　山本被告に「良心や情はあるのか。あなたの相撲道はどこにいったのか」と問い掛け、「本当のことを言わないまま頭を下げられても、あなたの気持ちは全く伝わってこない」と述べた。

　山本被告はほおを紅潮させたまま、目を閉じて聞き入っていた。

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「全責任、元親方に」　力士死亡事件、母親が意見陳述

2009年4月9日 夕刊

　大相撲時津風部屋の力士だった斉藤俊（たかし）さん＝当時（１７）、しこ名・時太山（ときたいざん）＝がけいこ場で死亡した事件で、傷害致死罪に問われた元時津風親方山本順一被告（５９）の公判が９日、名古屋地裁であった。俊さんの母利枝さん（４４）が出廷し「事件の全責任は、弟子にとって絶対的な存在だったあなた（山本被告）にある。私たちが納得できる重い実刑を望みます」と述べた。

　利枝さんは、病気療養中の父正人さん（５２）の代わりに意見陳述。「俊が生きていれば、今年で２０歳。土俵での活躍に家族で声援を送っていたかもしれない。やり切れない思いで胸がつぶされそうになる」と用意した文面を涙声で読み上げた。

　山本被告が「通常のけいこの範囲だった」と痛めつける目的を否定していることについて、利枝さんは「けいこで、なぜあんな傷ができるのか。土俵の上では人を死なせても罪にならないのか。あなたに預けたことを後悔している」と厳しい遺族感情を訴えた。

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４月中にも抜き打ち尿検査を実施…相撲協会生活指導部特別委員会

　日本相撲協会が大麻など違法薬物の抜き打ち尿検査を実施する態勢を整えたことが７日、分かった。今月中にも実施できる見通しで、昨年８月の元若ノ鵬、今年２月の元若麒麟による大麻不法所持での逮捕を受けて、協会がようやく薬物撲滅へ動き出す。

　協会は２月に違法薬物に関する禁止規定を寄付行為に定め、春場所中には力士、親方を含む全協会員９４８人から検査への同意書を回収した。この日、東京・両国国技館で開かれた生活指導部特別委員会に出席した日本アンチドーピング機構の大西祥平専門委員は、近日中に協会と国内唯一の専門検査機関となる三菱化学メディエンスと検査に関する契約書を交わすことを明言。「契約が整えば検査ができることになります」と断言した。

　抜き打ち検査は大西委員と相撲診療所の吉田博之所長が日程を決定。基本的には各部屋単位で実施する見込みで、友綱理事（元関脇・魁輝）が実施責任者となり、判定については伊勢ノ海理事（元関脇・藤ノ川）が責任者となる。採取した尿はすべて専門機関で検査し判定するが「陽性反応が出ない限りは検査の有無は公表しません」と大西委員は話した。

　◆マニュアル本詰め作業実施　○…この日の特別委員会では一連の不祥事を受けて作成している「力士のあり方」と題する生活、土俵の両面に関するマニュアル本についての詰めの作業が行われた。冊子は約４０ページにわたり土俵での所作、生活態度、さらには報道陣への受け答えなど事細かに記されている。外国人力士にもしっかり理解してもらえるようにＤＶＤの制作も決定。今月中の完成を目指しているが外部の塔尾武夫委員は「非常によくできている」と評価していた。

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力士の「手引書」にマスコミ対応も明記

　日本相撲協会は７日、東京・両国国技館で生活指導部の特別委員会を開いた。一連の不祥事を受けた力士のあり方を記した手引書や、大麻などの薬物検査について話し合われた。

　手引書は約４０ページで、今月中の完成を目指す。漫画家のやくみつる外部委員から、丁寧なマスコミ対応を徹底させるべきとの意見が出て、新たに盛り込まれた。日本語が苦手な外国人のために、動画を収録したＤＶＤも添付される。

　薬物検査は陽性者が出ない限り公表されない。昨年解雇された元露鵬、元白露山は公の場で簡易検査を受けたが、大西祥平外部委員は「そのような場所でやることはない」と話した。協会が結果を操作したと疑われないために、検査は専門機関に委ね、協会は尿の採取のみを行う。

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相撲協会の抜き打ち尿検査今週中にも開始

　日本相撲協会の生活指導部特別委員会が７日、東京・両国国技館で開かれ、大麻など違法薬物の使用をチェックする抜き打ち尿検査を早ければ今週中にも開始することになった。同委員会の大西祥平委員（慶大教授）は「明確に話してしまうと抜き打ちにならない」と前置きしつつ「検査を実行可能な段階まできた」と説明した。

　検査は同委員会の友綱理事（元関脇魁輝）を実行の統括にすえ、実際の検査では大西委員ら専門家が尿を採取。それを同委員らが世界反ドーピング機関（ＷＡＤＡ）公認の分析機関に直接持ち込み、協会が関与できないようにする。大西委員は「結果の発表は陽性の場合のみで、陰性だった場合は発表しないと思う」と話した。

　このほか、力士の常識や礼儀作法を記した角界マニュアル（作成中）にマスコミの対応の仕方なども盛り込み、ＤＶＤもつけることを決めた。

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抜き打ち尿検査　近く実施可能に　相撲協会

2009年4月8日11時17分

　大相撲の大麻問題で、日本相撲協会の生活指導部特別委員会は７日、親方、力士らを対象とした抜き打ち尿検査が、今週中にも実施可能になることを明らかにした。

　大西祥平委員（慶大スポーツ医学研究センター教授）によると、検査会社との契約が今週中にも結ばれるためという。陽性反応が出た場合のみ対象者を公表する。大西委員は「抑止が目的のため、検査は１人複数回やる場合もある。元露鵬の際は（関取衆が集まる）力士会の場で検査したが、抜き打ちという性格上、力士会でやることはもうあり得ない」と話した。

　検査結果のデータ管理は同委員会の伊勢ノ海委員長（元関脇藤ノ川）、検査をいつ実施するかなどは友綱理事（元関脇魁輝）が責任者になるという。