Cameron Makes Rare Visit to Russia

David Cameron, the British prime minister, has arrived in Moscow for a landmark visit - the first by a British leader to the Russian capital since a former Russian spy died in London from radioactive material poisoning in 2006.

Cameron will meet Russian President Dmitry Medvedev and Vladimir Putin, the prime minister, on Monday, with aims to strengthen business and political ties despite a long-running dispute over the murder of Alexander Litvinenko , a former KGB colonel and an outspoken Kremlin critic who had moved to Britain.

Spain Budget Imposes Further Austerity Measures

Spain has set out its austerity budget for 2013, with new spending cuts but protection for pensions, amid a shrinking economy and 25% unemployment.

Deputy Prime Minister Soraya Saenz de Santamaria called it "a crisis budget designed to exit the crisis".

The new programme of savings, tax rises and structural reforms will be overseen by an new budget authority.

Expectations are growing that Spain will seek a financial bailout from its eurozone partners.

On Friday, results of a stress test on Spain's banks are due to be released.

France open to considering new EU treaty: minister

PARIS | Thu Sep 27, 2012 3:04pm EDT

PARIS (Reuters) - France is open to the idea of a new European Union treaty to deepen integration if it is deemed necessary to improve economic governance in the bloc, French Minister for European Affairs Bernard Cazeneuve said on Thursday.
Cazeneuve was reacting to calls this month by Jose Manuel Barroso, president of the European Commission, and German Chancellor Angela Merkel for a new treaty to help the bloc overcome a sovereign debt crisis through integration.

"If, for greater solidarity, for more efficiency in the mechanisms of mutualizing debt or intervening in the markets, new treaties are necessary, then yes, we'll need new treaties," Cazeneuve told news web site Mediapart during a panel debate.

Austerity protestors clash with police in Madrid

Thousands of Spaniards weary of months of painful austerity measures marched on Madrid’s parliament Saturday but were beaten back by riot police. Angry marchers shouted, “Get out! Get out! They don’t represent us! Fire them!”

Spain’s government was hit by the country’s financial crisis on two fronts Tuesday as thousands of protestors enraged with austerity cutbacks and tax hikes marched on Parliament while its borrowing costs increased in an auction of its debt.
More than 1,000 riot police blocked off access to the Parliament building in the heart of Madrid, forcing the bulk of protesters to stay in a nearby square. Police used batons to push back some protesters at the front of the march as tempers flared.
The demonstration, organized with an “Occupy Congress” slogan, drew protesters weary of nine straight months of painful measures imposed by Prime Minister Mariano Rajoy.
Thousands of angry marchers yelled toward parliament, 250 meters (yards) away, “Get out! Get out! They don’t represent us! Fire them!”
“The only solution is that we should put everyone in Parliament out on the street so they know what it’s like,” said one of the protestors, civil servant Maria Pilar Lopez.
Lopez and others are calling for fresh elections, claiming the government’s hard-hitting austerity measures are proof that the ruling Popular Party misled voters to get elected last November.

Clashes erupt as Greeks protest against austerity

By the 26/09/2012 - 15:13

Clashes erupted in the heart of the Greek capital on Wednesday after at least 50,000 people marched on the parliament to protest against billions of euros in new austerity cuts. The demonstration was one of the biggest in Greece for over a year.

Clashes broke out in central Athens on Wednesday after at least 50,000 people took to the streets of the Greek capital for the largest anti-austerity demonstration the country has seen in over a year.

Although the demonstration was largely peaceful throughout the morning, the atmosphere degenerated after the march hit the Greek parliament, with the angry crowd shouting, “EU, IMF out!” A group of youths dressed in black hurled petrol bombs and bottles at police, sending streaks of flames flying through the streets. Police forces responded with several rounds of teargas, filling the air with clouds of smoke.

Opposition Shut Out in Belarus Election

Protests after the president's victory in 2004 were brutally repressed [AFP]

Official results in Belarus' parliamentary election have delivered an overwhelming victory to parties allied with President Alexandr Lukashenko, meeting predictions by opposition groups who boycotted the vote and claimed it would again be rigged for the president. Lidiya Yermoshina, Central Elections Commission chairwoman, said on Monday that 74.3 per cent of eligible voters had turned out and played down more sceptical assessments by independent election observers, saying that only official turnout tallies would be considered.

Police and protesters clash in Greece

Greek police fired tear gas and stun grenades to disperse a group of around 200 protesters [AFP]

Police in Athens have clashed with protesters during a nationwide strike in protest at a new round of austerity cuts introduced in return for vital EU-IMF loans. The protesters threw firebombs, smashed windows and set fire to garbage on the sidelines of the demonstration on Wednesday near luxury hotels on the capital's central Syntagma square. The police fired tear gas and stun grenades to disperse a group of around 200 protesters. Dozens of people were detained, according to a police source, as crowds moved towards the capital's other central square, Omonia, booing and throwing plastic bottles at the special forces that were present. The protests rallied striking civil servants and private sector workers as well as students and pensioners, who have all been hit by previous rounds of cutbacks in the debt-laden eurozone country. Workers walked off their jobs for the first general strike since the country's coalition government was formed in June, as the prime minister and finance minister worked on a package of 11.5bn euros ($14.87bn) in spending cuts.

Clashes Erupt as Greeks Protest Against Austerity

Clashes broke out in central Athens on Wednesday after at least 50,000 people took to the streets of the Greek capital for the largest anti-austerity demonstration the country has seen in over a year.
Although the demonstration was largely peaceful throughout the morning, the atmosphere degenerated after the march hit the Greek parliament, with the angry crowd shouting, “EU, IMF out!” A group of youths dressed in black hurled petrol bombs and bottles at police, sending streaks of flames flying through the streets. Police forces responded with several rounds of teargas, filling the air with clouds of smoke.

Northern Gripes: The Finns are being hard-nosed because they face their own hardship

IN THE historic heart of Helsinki, leviathan cruise ships can be glimpsed across the harbour ready for their next trip. Just two hours across the Gulf of Finland is Tallinn in Estonia. Continue due south and a weary traveller will eventually reach Athens. If Greece is the awkward customer among southern Europe’s debtor nations, Finland is the stroppy partner among northern creditor nations. It has insisted on special terms on its contributions to euro-zone bail-outs since mid-2011 by getting collateral on its lending. Government ministers eschew high-flown rhetoric about European unity: the foreign minister recently caused a kerfuffle by saying that Finland has contingency plans for a break-up of the euro.

From one perspective, it is hard to see why Finland is being so obstreperous. The country thrived for the best part of a decade after it joined the single currency in 1999. And although it suffered in the recession of 2008-09 it has since made a robust recovery. Unemployment has come down from a peak of 8.7% in early 2010, to 7.5%. Helsinki’s markets are thronged with shoppers and retail sales across the country have been perky. The recovery has been sustained by strong consumer spending, supported by a sturdy housing market. The financial system is in decent shape.

The performance gap: The French government seems to realize at last that urgent action is needed to restore the country's competitivenes

THE end of the early shift, and workers at the Peugeot car factory at Aulnay-sous-Bois, near Paris, are streaming out through the turnstiles. The anger is raw; the disappointment crushing. In July, when the company announced that the plant, which employs 3,000 workers, was to close, President François Hollande loudly branded the decision “unacceptable”. Two months and an official report later, his government has now accepted its fate. “Hollande said that he would look after us,” says Samir Lasri, who has worked on the production line for 12 years: “Now we regret voting for him.”

Waiting for Rajoy: Spain is going to have a bail-out. The question is how and when

IT WAS designed to rescue Spain and, as a result, the euro. So why has the government in Madrid not immediately jumped into the life raft built by Mario Draghi, the president of the European Central Bank, with his bond-buying plan? The answer has a name: Mariano Rajoy, the country’s studiously enigmatic prime minister.

First, Mr Rajoy continues to pretend that Spain might not need a bail-out. “Before taking a decision we must see whether it is really necessary,” he said recently. Few Spaniards are fooled. Mr Draghi’s announcement has pushed bond yields to levels lower than when Mr Rajoy’s centre-right People’s Party won power in November. But that will not hold for ever. Spain’s economic mess—a combination of ailing banks, double-dip recession and 25% unemployment—is getting worse. Mr Rajoy’s labour and other reforms may eventually help, but in the meantime, the patient needs an emergency infusion.

Euro zone will struggle to create fiscal union: former UK PM

NEW YORK | Tue Sep 25, 2012 6:12pm EDT

NEW YORK (Reuters) - Europe is enjoying a moment of calm due to the European Central Bank's plan to buy debt of euro zone countries, but the region will struggle to solve more fundamental problems, former British Prime Minister Gordon Brown said on Tuesday.

Euro falls as risk rally fades, Spain in focus

4:24pm EDT

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The euro slid against the dollar late in the New York session on Tuesday, pressured by a late fall in stocks and commodities as investors grew cautious about developments in debt-plagued Spain.

Spain, in no rush to seek a bailout, prepared for a new round of austerity measures in the 2013 budget but was met Tuesday by protesters who clashed with police in the country's capital.

Spanish Prime Minister Mariano Rajoy has already passed spending cuts and tax hikes worth slightly more than 60 billion euros over the next two years, but half-year figures show the 2012 deficit target slipping from view as tax income forecasts will not be hit due to economic contraction.

Greece faces 20 billion budget gap doubling expectations

Published: 24 September, 2012, 15:40

Edited: 24 September, 2012, 15:40

 

The Greek government reportedly faces a budget shortfall of about 20 billion euros in its effort to meet the international requirements for financial help.

The budget deficit is almost twice as big as previously expected, German magazine Spiegel reported, citing preliminary findings by the European Commission, European Central Bank and International Monetary Fund – so called “troika”.

The country can get the next 31 billion tranche of 173 billion euro bailout only when the deficit gap is closed. If Athens fails to get the next aid slice anticipated since June, the government could run out off money next month. 

The Tipping Point: How Much Austerity is Too Much?

A FORTNIGHT is a long time in the euro crisis. In two short weeks Portugal has gone from being a model pupil, praised in Brussels and Frankfurt for steadfastly pressing ahead with a reform programme tied to a €78 billion ($101 billion) bail-out to a cautionary example of the dangers facing governments which attempt to push austerity beyond the tolerance of long-suffering voters.

With his decision to finance a reduction in company costs through a sharp cut in workers’ take-home pay, Pedro Passos Coelho, Portugal’s prime minister, appears to have taken reform past the limit of what is deemed acceptable by large parts of the electorate. Until then, voters had accepted successive rounds of belt-tightening with grudging resignation.

Eurogroup approves Spanish banking sector bailout

(Reuters) - Euro zone finance ministers approved the terms of a loan of up to 100 billion euros ($123 billion) for Spain to recapitalise its banks on Friday

, but the exact size of the support will only be determined in September.

In a conference call, ministers signed off on a detailed memorandum of understanding with Spain spelling out the terms of the aid, which will be fully disbursed by the end of 2013.

But before Spain can decide exactly how much money it needs, it must see the results of in-depth audits of its banking sector, which is riddled with bad property loans.

"Ministers unanimously agreed today to grant financial assistance for the recapitalisation of financial institutions in response to the Spanish authorities' request," the Eurogroup of euro zonefinance ministers said in a statement."The specific amount will be determined based on a thorough bottom-up assessment of capital needs for individual banks, which has been launched and is expected to be finalised in September."

The bank rescue, and fresh austerity measures and looser fiscal targets agreed with Madrid, are aimed at avoiding a full sovereign bailout that the euro zone could barely afford.

By Jan Strupczewski and Robin Emmott

BRUSSELS | Fri Jul 20, 2012 2:36pm EDT

UK public sector borrowing hits record high of £14.4bn

21 September 2012 Last updated at 07:03 ET

UK public sector net borrowing was £14.4bn in August, the Office for National Statistics has said, the biggest deficit for the month since records began.

The figure was marginally higher than for the same month last year.

Corporation tax receipts fell by 2.1% and benefits payments rose 4.9%.

The figures make it more likely that the government will fail to achieve its aim of wiping out the structural budget deficit by 2015.

The borrowing figures differ depending on whether the temporary effects of one-off financial transactions are included or excluded.

The April 2012 net borrowing figures included two one-off transactions to the government - £28bn from the transfer of the Royal Mail Pension Plan and £2.3bn following the closure of the Special Liquidity Scheme.

The ONS says that for the period April to August 2012, public sector net borrowing, excluding financial interventions such as bail-outs to the banks, was £31bn, £17.4bn lower than in the same period last year.

But if the effect of this Royal Mail and other transactions are stripped out, then public sector net borrowing for April to August 2012 actually increased 22% to £61.3bn, £12.9bn higher than in the same period last year.

Spain gears up for the bank bailout by eurozone partners

21 September 2012 Last updated at 07:17 ET

 

Up to 60bn euros (£48bn; $78bn) will be needed to bail out Spain's banks, according to the country's second biggest lender, BBVA.

The results of independent stress tests of the Spanish banking sector will be published on 28 September.

But previews are already being sent to the country's financial institutions.

The BBC has been told that the Spanish government has already put in place economic reform plans that would allow it to apply for a bailout immediately.

Spain's conservative Prime Minister Mariano Rajoy has in the past insisted Madrid would not become the fourth European capital in recent years to apply for such a bailout, but sources indicate such a programme is now likely.

Spain's banking sector needs recapitalising, and much of the money would come from 100bn euros in European Union funds already pledged by eurozone finance ministers in June.

Analysis: Euro exit talk risks self-fulfilling prophecy

To understand the impact of a potential Greek exit from the euro zone, imagine an operating theater inside a betting shop.

As surgeons prepare to amputate a gangrened foot to prevent infection spreading to healthier parts of the body, gamblers on the sidelines lay bets on which limb will be next for the chop.

Talk of a possible Greek exit has already sapped investors' confidence in the 17-nation single currency area and contributed to higher borrowing costs for Spain and Italy. It is making a planned return to market funding next year harder for Ireland and Portugal, which are implementing tough bailout programs.

Euro zone enters dangerous week buoyed by ECB

By Paul Taylor

PARIS (Reuters) - The euro zone enters a dangerous week, strewn with potential landmines, in a somewhat more optimistic mood after investors welcomed a European Central Bank plan to prevent a breakup of the single currency.

German judges, Dutch voters, IMF inspectors and Brussels regulators could all spring surprises that make it harder to resolve a sovereign debt crisis which is almost three years old and weighing on the world economy.

Wednesday is the main day to watch.

Germany's constitutional court rules then on the legality of the euro zone's permanent financial rescue fund, the European Commission unveils detailed plans for a euro zone banking union, and the Netherlands holds a cliff hanger general election.

Then European finance ministers meet in Cyprus from Friday to try to thrash out differences over banking supervision and possible extra aid for Spain, the zone's fourth biggest economy, and Greece, the problem country that first triggered the crisis.

Greece fails to agree on spending cuts

Finance Minister Yannis Stournaras faces mass protests as he implements a swathe of 'austerity measures' [EPA]

Inspectors from three international funding bodies have arrived in Greece, to see how well it is doing with its programme of cuts. The representatives of the so-called "troika" of creditors - the International Monetary Fund, the European Central Bank and the European Commission are there to examine Greece's economic plans. Officials in the mediterranean nation are preparing to cut another $15bn from its annual budget - despite wides  pread public protests.

The end of peaceful coexistence between Russia and Islam?

Sep 1st 2012 | MOSCOW | from the print edition

FOR years Tatarstan was held up as a model of stability and tranquillity as the Muslim-majority republics of the Russian north Caucasus became embroiled in a separatist conflict that spawned a still-continuing civil war along religious lines. More than half of Tatarstan’s 4m people are Sunni Muslims who have long enjoyed friendly relations with the rest of Russia. Kazan, the regional capital on the Volga river 450 miles (724km) east of Moscow, is a prosperous and attractive city.

That sense of calm has changed since July, when assassins shot dead a prominent Islamic leader, Valiulla Yakupov, and nearly killed Tatarstan’s chief mufti, Ildus Faizov, with a bomb detonated under his car. The exact motive remains unclear but many in Kazan seem to think it is related to the public campaign of both men to combat the rising influence of Salafism, a fundamentalist form of Islam.

Are Norwegians better peace negotiators?

Norway has once again taken the lead in international peace brokering, helping bring the Colombian government and FARC guerrillas to the peace table from mid-October. So what has made the Scandinavian country the world’s expert in negotiating peace?

Pussy Riot releases video of burning Putin portrait

Russian opposition punk band Pussy Riot have released a new video in which they set fire to a portrait of President Vladimir Putin in a stunt likely to anger the Kremlin.

Three of the band’s members - Nadezhda Tolokonnikova, Maria Alyokhina and Yekaterina Samutsevich - were last month given two-year jail sentences each after storming the altar of Moscow’s main cathedral and staging a “punk prayer”, calling on the Virgin Mary to rid Russia of Putin.