By David McIntyre and Stanley White (found on www.bloomsberg.com)
June 5 (Bloomberg) --
The euro rose to a record versus the yen on prospects the European Central Bank will raise interest rates tomorrow, widening the yield differential with Japan.
The yen is the world's worst performer this quarter as the lowest borrowing cost among major economies spurs investors to borrow in Japan to buy higher-yielding assets. The spread between European and Japanese three-month benchmark lending rates reached a five-year high.
``Japanese mutual funds are selling yen and buying currencies like the euro,'' said Takehiko Jimbo, currency manager in Tokyo at Mitsubishi UFJ Trust & Banking Co., a unit of Japan's biggest lender by assets. ``The ECB is set to raise rates tomorrow, and I think President Jean-Claude Trichet will sound hawkish about future policy.''
The euro traded to an all-time high of 164.49 yen and was at 164.43 as of 6 a.m. in London, from 164.27 in New York yesterday. It was at $1.3498 against the dollar from $1.3489. The dollar bought 121.82 yen from 121.77. The single European currency may rise to 164.80 yen and $1.3550 today, Jimbo said.
Japanese rates of 0.5 percent compare with Europe's 3.75 percent and 5.25 percent in the U.S. That gap has caused the yen to decline 4.2 percent against the euro and 3.2 percent versus the dollar this quarter.
The ECB will lift its benchmark rate tomorrow to 4 percent, according to all 52 economists surveyed by Bloomberg News. The advantage of European three-month London interbank offered rates over Japan's is 3.43 percentage points, the most since May 2002.
China Syndrome
Japan's currency may gain for a second day against the dollar as investors may unwind so-called carry trades, borrowing yen for higher returns elsewhere. China's benchmark stock index has tumbled 21 percent from a May 29 peak after the government tripled the tax on share trades.
The CSI 300 Index extended declines today after the government's main business newspaper signaled officials won't try to stop a slide that erased more than $500 billion of market value since May 30.
``The Chinese stock market is falling again,'' said Ryohei Muramatsu, manager of Group Treasury Asia at Commerzbank in Tokyo. ``This could lead to carry trade unwinding and buying of the yen,'' which may advance to 121.52 against the dollar and 164 per euro today, he said.
15-Year Lows
Japan's currency hovered near the lowest in more than 15 years against the Australian and New Zealand dollars, two beneficiaries of the carry trade.
Against the Australian dollar, the yen fell to 101.82, the lowest since April 1992. It dropped to a 17-year low of 91.28 against the New Zealand dollar. Interest rates in both countries are at least 5.75 percentage points higher than those in Japan. The Kiwi, as New Zealand's currency is known, rose to 74.94 U.S. cents, the highest since it was floated in March 1985.
The dollar may be bolstered by speculation Federal Reserve Chairman Ben S. Bernanke today will signal the U.S. economy is resilient and inflation is not yet tamed, adding to expectations the Fed doesn't need to lower interest rates.
``He may say economic growth is picking up and express concern over inflation,'' said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Co. in Tokyo. ``This would be supportive of the dollar,'' which may rise to 122 yen and $1.3450 per euro today, he said.
The U.S. currency may extend a 1.3 percent advance against the yen in the past month as Bernanke will discuss housing and the economy via satellite at an International Monetary Conference at 2:15 p.m. in Cape Town, South Africa. Bank of Japan Governor Toshihiko Fukui and ECB President Trichet will also speak at the conference.
Traders reduced the odds of a Fed rate cut by the end of 2007 to 24 percent from 100 percent at the start of May.
The dollar also may benefit from a drop in yen options volatility to the lowest in almost 11 years. The decline may encourage investors to borrow yen to buy securities denominated in higher-yielding currencies such as the dollar.
Volatility implied by one-month dollar-yen options dropped to 5.85 percent, the lowest since Bloomberg started tracking the data in 1995. Traders quote implied volatility, a measure of expected exchange-rate swings, as part of setting options prices.
To contact the reporter on this story: David McIntyre in Sydney at dmcintyre2@bloomberg.net ; Stanley White in Tokyo at swhite28@bloomberg.net
Tuesday, June 5, 2007
Underwriting ABN
Published: June 4 2007 11:53 Last updated: June 4 2007 22:20 (source www.ft.com)
“Money’s too tight to mention” warbled Simply Red. The consortium bidding for ABN Amro has found the opposite is true. It has faced relentless sniping about the financing of its €71bn offer. It stresses that the capital raisings are “fully underwritten”. But what does that actually mean?
Precise detail remains limited but the broad thrust is that Merrill Lynch would act as the lead underwriter for the rights issues for Fortis and Santander, as well as for Royal Bank of Scotland’s preference shares and Santander’s mandatory convertibles. The rest of the funding – through disposals and debt facilities – cannot be underwritten but accounts for only a small portion of the deal. It is likely, therefore, that Merrill is on the hook for funds in excess of half its market capitalisation.
(read the rest of this article at www.ft.com)
“Money’s too tight to mention” warbled Simply Red. The consortium bidding for ABN Amro has found the opposite is true. It has faced relentless sniping about the financing of its €71bn offer. It stresses that the capital raisings are “fully underwritten”. But what does that actually mean?
Precise detail remains limited but the broad thrust is that Merrill Lynch would act as the lead underwriter for the rights issues for Fortis and Santander, as well as for Royal Bank of Scotland’s preference shares and Santander’s mandatory convertibles. The rest of the funding – through disposals and debt facilities – cannot be underwritten but accounts for only a small portion of the deal. It is likely, therefore, that Merrill is on the hook for funds in excess of half its market capitalisation.
(read the rest of this article at www.ft.com)
Banks profit from asset-backed securities
By Paul J Davies in London
Published: June 3 2007 22:00 Last updated: June 3 2007 22:00
Investment banks are increasingly reliant on the business of turning mortgages and other kinds of debt into complex bond-like products to generate a significant share of their profits, according to research to be published Monday.
Banks globally saw revenues of almost $30bn from asset-backed securities business in 2006, which analysts at JPMorgan estimate is as big as the revenues generated by equity derivatives or cash equities trading.
Read the rest of this article at www.ft.com
Published: June 3 2007 22:00 Last updated: June 3 2007 22:00
Investment banks are increasingly reliant on the business of turning mortgages and other kinds of debt into complex bond-like products to generate a significant share of their profits, according to research to be published Monday.
Banks globally saw revenues of almost $30bn from asset-backed securities business in 2006, which analysts at JPMorgan estimate is as big as the revenues generated by equity derivatives or cash equities trading.
Read the rest of this article at www.ft.com
Shanghai shares suffer further losses
By Jamil Anderlini in Hong Kong (www.ft.com)
Published: June 5 2007 06:03 Last updated: June 5 2007 06:03
Chinese shares closed down 5.7 per cent Tuesday morning as investors continued to dump stocks on fears the market correction will go on.
By the close of morning trade, the Shanghai Composite Index had fallen to 3,462.52 points, roughly the same level it was at two weeks ago.
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Some 100 companies, including Air China and Shanghai International Port, fell the daily limit of 10 per cent. Just 57 of the 1,400-odd companies listed in Shanghai and Shenzhen ended the morning up.
The Shenzhen Composite Index fell 6.5 per cent to end the morning at 976.38.
The falls in Shenzhen and Shanghai were exacerbated by fund managers liquidating holdings in response to massive redemptions by retail investors, who tend to trade mutual funds in the same speculative way as individual stocks.
The government sought to reassure investors again Tuesday with another round of soothing front-page articles in the main financial papers saying the current correction is a temporary phenomenon that will not effect the wider bull market.
The fall on Tuesday morning extends a slide that began last Wednesday after the government tripled the stamp duty on stock transactions to 0.3 per cent.
The Shanghai market has dropped 20 per cent in a week from the record high of 4,334.92 points it reached last Tuesday.
Published: June 5 2007 06:03 Last updated: June 5 2007 06:03
Chinese shares closed down 5.7 per cent Tuesday morning as investors continued to dump stocks on fears the market correction will go on.
By the close of morning trade, the Shanghai Composite Index had fallen to 3,462.52 points, roughly the same level it was at two weeks ago.
ADVERTISEMENT
Some 100 companies, including Air China and Shanghai International Port, fell the daily limit of 10 per cent. Just 57 of the 1,400-odd companies listed in Shanghai and Shenzhen ended the morning up.
The Shenzhen Composite Index fell 6.5 per cent to end the morning at 976.38.
The falls in Shenzhen and Shanghai were exacerbated by fund managers liquidating holdings in response to massive redemptions by retail investors, who tend to trade mutual funds in the same speculative way as individual stocks.
The government sought to reassure investors again Tuesday with another round of soothing front-page articles in the main financial papers saying the current correction is a temporary phenomenon that will not effect the wider bull market.
The fall on Tuesday morning extends a slide that began last Wednesday after the government tripled the stamp duty on stock transactions to 0.3 per cent.
The Shanghai market has dropped 20 per cent in a week from the record high of 4,334.92 points it reached last Tuesday.
Sarkozy appeals to ‘outmoded’ Brown
By John Thornhill in Paris (source www.ft.com)
Published: June 4 2007 22:09 Last updated: June 4 2007 22:09
Nicolas Sarkozy, France’s president, has urged Gordon Brown to leave behind his “outmoded” views on the European Union when he takes over as British prime minister next month.
Describing him as one of Europe’s great finance ministers, Mr Sarkozy said: “Gordon Brown has advanced and modernised the British economy over 10 years. I hope that in moving from Number 11 to Number 10 Downing Street he understands that Europe is not outmoded.”
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His comments underline the deep unease a number of EU leaders feel about the European policy Mr Brown will pursue. As UK chancellor, he largely limited himself to demanding economic reform in Europe and has often seemed keen to distance himself from Brussels for domestic political purposes.
Appealing to Mr Brown to accept the need for a simplified institutional treaty, Mr Sarkozy told the Financial Times and selected foreign journalists: “Europe has need of the UK and the UK has need of Europe.”
Since being elected last month, Mr Sarkozy has been pushing a rapid relaunch of the European Union, arguing for a pared-down constitutional treaty that could be adopted by parliamentary vote. There is concern in several European capitals about how far Mr Brown is prepared to go to overhaul the EU’s machinery and decision making rules.
Mr Sarkozy has struck up a warm relationship with Tony Blair, Britain’s outgoing prime minister, who was the first European leader to visit the president-elect in Paris. Mr Sarkozy has hinted that Mr Blair is prepared to do a deal on a new treaty at the Brussels summit later this month. “I have spoken to Blair about this and I don’t think that one country will carry the risk of blocking Europe,” he said.
The French president said Europe’s leaders accepted the need for a new, short and simplified institutional treaty. He had great confidence in Angela Merkel, Germany’s chancellor and holder of the EU’s rotating presidency, who has been leading attempts to broker a deal.
However, Mr Brown has been notably cooler than Mr Blair about the need for a new European treaty. Mr Sarkozy, a former finance minister, dealt with Mr Brown at meetings with his European counterparts.
Mr Sarkozy defended France’s commitment to agriculture, saying that the security of Europe’s food supplies was vital.
The president also criticised the EU’s trade policy for being excessively liberal and suggested that Peter Mandelson, the British trade commissioner, should be stripped of this responsibility.
Although he described Mr Mandelson as a man of “remarkable intelligence,” he said that such an important dossier should be entrusted to the president of the European commission, José Manuel Barroso. Asked whether he thought Mr Brown shared his vision on trade, Mr Sarkozy said: “No. I don’t think that everybody shares my opinion. I don’t have this arrogant vision. He is more liberal than I am.”
Published: June 4 2007 22:09 Last updated: June 4 2007 22:09
Nicolas Sarkozy, France’s president, has urged Gordon Brown to leave behind his “outmoded” views on the European Union when he takes over as British prime minister next month.
Describing him as one of Europe’s great finance ministers, Mr Sarkozy said: “Gordon Brown has advanced and modernised the British economy over 10 years. I hope that in moving from Number 11 to Number 10 Downing Street he understands that Europe is not outmoded.”
ADVERTISEMENT
His comments underline the deep unease a number of EU leaders feel about the European policy Mr Brown will pursue. As UK chancellor, he largely limited himself to demanding economic reform in Europe and has often seemed keen to distance himself from Brussels for domestic political purposes.
Appealing to Mr Brown to accept the need for a simplified institutional treaty, Mr Sarkozy told the Financial Times and selected foreign journalists: “Europe has need of the UK and the UK has need of Europe.”
Since being elected last month, Mr Sarkozy has been pushing a rapid relaunch of the European Union, arguing for a pared-down constitutional treaty that could be adopted by parliamentary vote. There is concern in several European capitals about how far Mr Brown is prepared to go to overhaul the EU’s machinery and decision making rules.
Mr Sarkozy has struck up a warm relationship with Tony Blair, Britain’s outgoing prime minister, who was the first European leader to visit the president-elect in Paris. Mr Sarkozy has hinted that Mr Blair is prepared to do a deal on a new treaty at the Brussels summit later this month. “I have spoken to Blair about this and I don’t think that one country will carry the risk of blocking Europe,” he said.
The French president said Europe’s leaders accepted the need for a new, short and simplified institutional treaty. He had great confidence in Angela Merkel, Germany’s chancellor and holder of the EU’s rotating presidency, who has been leading attempts to broker a deal.
However, Mr Brown has been notably cooler than Mr Blair about the need for a new European treaty. Mr Sarkozy, a former finance minister, dealt with Mr Brown at meetings with his European counterparts.
Mr Sarkozy defended France’s commitment to agriculture, saying that the security of Europe’s food supplies was vital.
The president also criticised the EU’s trade policy for being excessively liberal and suggested that Peter Mandelson, the British trade commissioner, should be stripped of this responsibility.
Although he described Mr Mandelson as a man of “remarkable intelligence,” he said that such an important dossier should be entrusted to the president of the European commission, José Manuel Barroso. Asked whether he thought Mr Brown shared his vision on trade, Mr Sarkozy said: “No. I don’t think that everybody shares my opinion. I don’t have this arrogant vision. He is more liberal than I am.”
Monday, June 4, 2007
Obama sorry for interrupting Yankees-Sox
MANCHESTER, New Hampshire (CNN) — Sen. Barack Obama, D-Illinois, knows he had stiff competition for attention in New Hampshire Sunday night. He told supporters as he showed up at a viewing party following the debate, “I don’t want to interrupt the Yankee-Red Sox game.”
The crowd chanted “we are part of something great” as a smiling Obama arrived at Murphy’s Tap Room. He shook hands and met supporters for about 15 minutes before saying he had to catch a plane.
He didn’t directly mention his performance in the debate but said, “I hope you are as energized as I am.”
– CNN Political Desk Managing Editor Steve Brusk
The crowd chanted “we are part of something great” as a smiling Obama arrived at Murphy’s Tap Room. He shook hands and met supporters for about 15 minutes before saying he had to catch a plane.
He didn’t directly mention his performance in the debate but said, “I hope you are as energized as I am.”
– CNN Political Desk Managing Editor Steve Brusk
Edwards, Clinton, Obama Skirmish on Iraq, Health Care in Debate
By Catherine Dodge and Jeff Bliss
June 4 (Bloomberg) -- The three leading Democratic presidential candidates -- John Edwards, Hillary Clinton and Barack Obama -- skirmished over the Iraq war and health-care coverage in a debate last night.
In the forum, which was devoted more to rhetorical or political points than substantive differences, Edwards, 53, a former North Carolina senator, was the aggressor. In the sharpest exchange of the evening, he went after Clinton and Obama, saying they failed to provide leadership on Iraq by ``quietly'' voting May 24 against funding for the war, without forcefully arguing for their positions.
``They cast the right vote, and I applaud them for that,'' Edwards said in the second debate among the eight Democratic candidates, which was held in Manchester, New Hampshire. ``But the importance of this is, they're asking to be president of the United States,'' and ``there's a difference between leadership and legislating.''
The comment sparked a rebuke from Obama, an Illinois senator, who said that unlike Edwards, he opposed the war dating back to 2002. ``You are about 4 1/2 years late on leadership on this issue,'' Obama, 45, said to Edwards. ``And, you know, I think it's important not to play politics on something that is as critical and as difficult as this.''
Edwards, then a U.S. senator, voted in 2002 to give President George W. Bush authority to wage war in Iraq. Obama, who wasn't elected to the U.S. Senate until 2004, publicly opposed the war two years earlier as an Illinois state politician.
Minor Differences
Clinton, a New York senator who is leading in most polls, said criticism of the war should be directed at Bush and the Republican Party, not the Democrats. ``This is George Bush's war -- he is responsible for this war,'' she said. ``The differences among us are minor. The differences between us and the Republicans are major.''
Delaware Senator Joseph Biden, 64, was the only one of the candidates to vote for the war-funding measure last month. He defended his vote, saying he wants to draw down troops ``immediately,'' but the money is needed because ``lives are at stake.''
Edwards also sought to put Obama on the defensive over health care, saying he was ``the first person to come out with a specific, truly universal health-care plan.''
He said a plan Obama presented last week isn't ``completely universal,'' because it wouldn't cover all 45 million Americans who lack coverage.
Health Care
Obama countered by saying he disagrees with Edwards that coverage should be mandatory. His emphasis is on driving down costs because ``most families want health care but they can't afford it.''
All the top candidates said they would finance expanded health care, in part by repealing Bush's tax cuts for more affluent Americans. The candidates only differed slightly in identifying who would be considered affluent: Edwards said he would repeal tax cuts for anyone making more than $200,000, while Obama said he would terminate the tax reductions for those making more than $250,000.
Clinton said all the candidates agree on repealing the tax cuts, and said the bigger issue was how to fund other priorities. She didn't provide any specifics.
Analysts said that most of the candidates did well while stressing that the three leading contenders, Clinton, Obama and Edwards, dominated the forum.
`Two Tiers'
It ``reinforced the whole idea that there are two tiers of candidates,'' said Dante Scala, a politics professor at St. Anselm College in Manchester.
These top three contenders successfully projected personas they're counting on to appeal to voters. Edwards enhanced his status as the aggressive outsider with the pointed criticism of his opponents.
Striking a tough and knowledgeable image, Clinton said she would be firm with Iran on terrorism, while stressing diplomacy over military action.
``In my administration, diplomacy -- patient, careful diplomacy'' would be a priority, she said.
Clinton departed from her usually serious tone to display a flash of humor while discussing the Bush administration's foreign policy.
``We've had an administration that doesn't believe in diplomacy,'' she said. ``You know, they have every so often Condi Rice go around the world and show up somewhere and make a speech, and occasionally they even send Dick Cheney -- and that's hardly diplomatic in my view.''
Obama's Role
Obama played the role of the measured uniter, pledging to change the tax code in response to the increasing financial demands on Americans.
``Folks are feeling hit from all sides,'' he said. ``The burdens and benefits of this new global economy are not being spread evenly across the board.''
The candidates also generally struck a restrained posture on fiscal matters. Obama criticized earmarks, the pet projects lawmakers insert into spending legislation. New Mexico Governor Bill Richardson, 59, called for a constitutional amendment mandating a balanced budget. Senator Christopher Dodd of Connecticut, 63, said government should adopt a ``pay as you go'' approach to federal budgeting, while Clinton warned ``there is no free lunch'' when it comes to paying for programs.
The two-hour debate was largely dominated by national security and foreign-policy issues. The candidates either were not asked about or only made passing references to taxes, trade, the global economy, poverty, education or social issues like abortion.
Immigration, Sudan
In brief exchanges, they generally agreed on immigration, gays in the military, and how to deal with Sudan and Pakistan.
They also all agreed on former President Bill Clinton, who played the same role as the presiding spirit of the Democratic contest as the late President Ronald Reagan has for Republicans.
When asked how they would use Bill Clinton in their administration if elected, the candidates agreed he should be a global ambassador to improve relations. ``When I become president, Bill Clinton, my dear husband, will be one of the people who will be sent around the world as a roving ambassador to make it very clear to the rest of the world that we're back to a policy of reaching out and working and trying to make friends,'' Hillary Clinton said.
The debate at St. Anselm College -- organized by CNN, Manchester's WMUR television station and the New Hampshire Union Leader -- was marred by technical difficulties, including audio breakdowns, voiceovers from candidates and cameramen wandering the stage.
At several points, the candidates also objected to being asked to give a show of hands on questions such as whether Osama Bin Laden should be targeted for assassination if there would be civilian casualties.
When moderator Wolf Blitzer asked the candidates whether they believed English should be the official language of the U.S., Obama objected. ``When we get distracted by those kinds of questions, I think we do a disservice to the American people,'' he said.
To contact the reporters on this story: Catherine Dodge in Washington at cdodge1@bloomberg.net ; Jeff Bliss in Washington at jbliss@bloomberg.net
June 4 (Bloomberg) -- The three leading Democratic presidential candidates -- John Edwards, Hillary Clinton and Barack Obama -- skirmished over the Iraq war and health-care coverage in a debate last night.
In the forum, which was devoted more to rhetorical or political points than substantive differences, Edwards, 53, a former North Carolina senator, was the aggressor. In the sharpest exchange of the evening, he went after Clinton and Obama, saying they failed to provide leadership on Iraq by ``quietly'' voting May 24 against funding for the war, without forcefully arguing for their positions.
``They cast the right vote, and I applaud them for that,'' Edwards said in the second debate among the eight Democratic candidates, which was held in Manchester, New Hampshire. ``But the importance of this is, they're asking to be president of the United States,'' and ``there's a difference between leadership and legislating.''
The comment sparked a rebuke from Obama, an Illinois senator, who said that unlike Edwards, he opposed the war dating back to 2002. ``You are about 4 1/2 years late on leadership on this issue,'' Obama, 45, said to Edwards. ``And, you know, I think it's important not to play politics on something that is as critical and as difficult as this.''
Edwards, then a U.S. senator, voted in 2002 to give President George W. Bush authority to wage war in Iraq. Obama, who wasn't elected to the U.S. Senate until 2004, publicly opposed the war two years earlier as an Illinois state politician.
Minor Differences
Clinton, a New York senator who is leading in most polls, said criticism of the war should be directed at Bush and the Republican Party, not the Democrats. ``This is George Bush's war -- he is responsible for this war,'' she said. ``The differences among us are minor. The differences between us and the Republicans are major.''
Delaware Senator Joseph Biden, 64, was the only one of the candidates to vote for the war-funding measure last month. He defended his vote, saying he wants to draw down troops ``immediately,'' but the money is needed because ``lives are at stake.''
Edwards also sought to put Obama on the defensive over health care, saying he was ``the first person to come out with a specific, truly universal health-care plan.''
He said a plan Obama presented last week isn't ``completely universal,'' because it wouldn't cover all 45 million Americans who lack coverage.
Health Care
Obama countered by saying he disagrees with Edwards that coverage should be mandatory. His emphasis is on driving down costs because ``most families want health care but they can't afford it.''
All the top candidates said they would finance expanded health care, in part by repealing Bush's tax cuts for more affluent Americans. The candidates only differed slightly in identifying who would be considered affluent: Edwards said he would repeal tax cuts for anyone making more than $200,000, while Obama said he would terminate the tax reductions for those making more than $250,000.
Clinton said all the candidates agree on repealing the tax cuts, and said the bigger issue was how to fund other priorities. She didn't provide any specifics.
Analysts said that most of the candidates did well while stressing that the three leading contenders, Clinton, Obama and Edwards, dominated the forum.
`Two Tiers'
It ``reinforced the whole idea that there are two tiers of candidates,'' said Dante Scala, a politics professor at St. Anselm College in Manchester.
These top three contenders successfully projected personas they're counting on to appeal to voters. Edwards enhanced his status as the aggressive outsider with the pointed criticism of his opponents.
Striking a tough and knowledgeable image, Clinton said she would be firm with Iran on terrorism, while stressing diplomacy over military action.
``In my administration, diplomacy -- patient, careful diplomacy'' would be a priority, she said.
Clinton departed from her usually serious tone to display a flash of humor while discussing the Bush administration's foreign policy.
``We've had an administration that doesn't believe in diplomacy,'' she said. ``You know, they have every so often Condi Rice go around the world and show up somewhere and make a speech, and occasionally they even send Dick Cheney -- and that's hardly diplomatic in my view.''
Obama's Role
Obama played the role of the measured uniter, pledging to change the tax code in response to the increasing financial demands on Americans.
``Folks are feeling hit from all sides,'' he said. ``The burdens and benefits of this new global economy are not being spread evenly across the board.''
The candidates also generally struck a restrained posture on fiscal matters. Obama criticized earmarks, the pet projects lawmakers insert into spending legislation. New Mexico Governor Bill Richardson, 59, called for a constitutional amendment mandating a balanced budget. Senator Christopher Dodd of Connecticut, 63, said government should adopt a ``pay as you go'' approach to federal budgeting, while Clinton warned ``there is no free lunch'' when it comes to paying for programs.
The two-hour debate was largely dominated by national security and foreign-policy issues. The candidates either were not asked about or only made passing references to taxes, trade, the global economy, poverty, education or social issues like abortion.
Immigration, Sudan
In brief exchanges, they generally agreed on immigration, gays in the military, and how to deal with Sudan and Pakistan.
They also all agreed on former President Bill Clinton, who played the same role as the presiding spirit of the Democratic contest as the late President Ronald Reagan has for Republicans.
When asked how they would use Bill Clinton in their administration if elected, the candidates agreed he should be a global ambassador to improve relations. ``When I become president, Bill Clinton, my dear husband, will be one of the people who will be sent around the world as a roving ambassador to make it very clear to the rest of the world that we're back to a policy of reaching out and working and trying to make friends,'' Hillary Clinton said.
The debate at St. Anselm College -- organized by CNN, Manchester's WMUR television station and the New Hampshire Union Leader -- was marred by technical difficulties, including audio breakdowns, voiceovers from candidates and cameramen wandering the stage.
At several points, the candidates also objected to being asked to give a show of hands on questions such as whether Osama Bin Laden should be targeted for assassination if there would be civilian casualties.
When moderator Wolf Blitzer asked the candidates whether they believed English should be the official language of the U.S., Obama objected. ``When we get distracted by those kinds of questions, I think we do a disservice to the American people,'' he said.
To contact the reporters on this story: Catherine Dodge in Washington at cdodge1@bloomberg.net ; Jeff Bliss in Washington at jbliss@bloomberg.net
Sunday, June 3, 2007
Brussels accused of secret trade shift
By George Parker in Brussels
Published: June 3 2007 22:01 Last updated: June 3 2007 22:01 (www.ft.com)
European companies are being exposed to cut-price dumping by foreign rivals because of a secret change in trade policy in Brussels, 10 big industries have claimed.
Peter Mandelson, European Union trade commissioner, has denied claims that Brussels covertly lowered Europe’s defences against unfair subsidies by other countries and has shown “unequivocal political bias” against anti-dumping measures.
The allegations are made in a letter from industry bodies representing 10 of the European industries most exposed to global competition, including textiles, chemicals, metals, mining and fertilisers.
Writing to José Manuel Barroso – European Commission president and Mr Mandelson’s boss – they claim that the trade chief has changed his handling of anti-dumping cases behind the backs of member states.
Brussels instigated 36 anti-dumping measures last year – including controversial cases involving Chinese shoes, plastic bags and bicycle parts – but there has been none this year.
“The Commission’s changed practice is more and more widely perceived as an anti-industry policy bias,” the industries claim.
Mr Mandelson launched a consultation in December on reforming Europe’s anti-dumping rules following clashes between countries such as Britain and Sweden – dominated by big retailers who want low-cost goods for consumers – and manufacturing countries such as Italy, Spain and Portugal.
The commissioner says that, unless a balance can be found between the two sides and unity is restored, Europe’s trade defence mechanism “risks becoming inoperable”.
Mr Mandelson has also pointed out that European manufacturers that outsource production to Asia are among those hit by anti-dumping measures as well as consumers.
The 10 industry bodies suspect Mr Mandelson has already made up his mind and has tilted implementation of anti-dumping rules away from European manufacturers even before the trade defence consultation is complete.
“Facts demonstrate that the Commission is already implementing a policy line which not only disregards the outcome of the public consultation but also compromises the existing rule of law and flouts the right of defence,” their letter says.
Mr Mandelson’s team flatly denies any change of policy, arguing that the absence of any new anti-dumping measures in 2007 was simply “the calm after the storm” of controversial cases last year.
Mr Mandelson’s officials also point out that their assessment of anti-dumping claims are closely governed by European law. They also say that Europe’s improved economic outlook means EU companies are less likely to suffer harm from low-cost imports.
A spokesman for Mr Barroso insisted the Commission was sticking strictly to the law. “We welcome any contributions to the consultation,” he said.
Copyright The Financial Times Limited 2007
Published: June 3 2007 22:01 Last updated: June 3 2007 22:01 (www.ft.com)
European companies are being exposed to cut-price dumping by foreign rivals because of a secret change in trade policy in Brussels, 10 big industries have claimed.
Peter Mandelson, European Union trade commissioner, has denied claims that Brussels covertly lowered Europe’s defences against unfair subsidies by other countries and has shown “unequivocal political bias” against anti-dumping measures.
The allegations are made in a letter from industry bodies representing 10 of the European industries most exposed to global competition, including textiles, chemicals, metals, mining and fertilisers.
Writing to José Manuel Barroso – European Commission president and Mr Mandelson’s boss – they claim that the trade chief has changed his handling of anti-dumping cases behind the backs of member states.
Brussels instigated 36 anti-dumping measures last year – including controversial cases involving Chinese shoes, plastic bags and bicycle parts – but there has been none this year.
“The Commission’s changed practice is more and more widely perceived as an anti-industry policy bias,” the industries claim.
Mr Mandelson launched a consultation in December on reforming Europe’s anti-dumping rules following clashes between countries such as Britain and Sweden – dominated by big retailers who want low-cost goods for consumers – and manufacturing countries such as Italy, Spain and Portugal.
The commissioner says that, unless a balance can be found between the two sides and unity is restored, Europe’s trade defence mechanism “risks becoming inoperable”.
Mr Mandelson has also pointed out that European manufacturers that outsource production to Asia are among those hit by anti-dumping measures as well as consumers.
The 10 industry bodies suspect Mr Mandelson has already made up his mind and has tilted implementation of anti-dumping rules away from European manufacturers even before the trade defence consultation is complete.
“Facts demonstrate that the Commission is already implementing a policy line which not only disregards the outcome of the public consultation but also compromises the existing rule of law and flouts the right of defence,” their letter says.
Mr Mandelson’s team flatly denies any change of policy, arguing that the absence of any new anti-dumping measures in 2007 was simply “the calm after the storm” of controversial cases last year.
Mr Mandelson’s officials also point out that their assessment of anti-dumping claims are closely governed by European law. They also say that Europe’s improved economic outlook means EU companies are less likely to suffer harm from low-cost imports.
A spokesman for Mr Barroso insisted the Commission was sticking strictly to the law. “We welcome any contributions to the consultation,” he said.
Copyright The Financial Times Limited 2007
A Legal Debate in Guantánamo on Boy Fighters
The facts of Omar Ahmed Khadr’s case are grim. The shrapnel from the grenade he is accused of throwing ripped through the skull of Sgt. First Class Christopher J. Speer, who was 28 when he died.
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Omar Ahmed Khadr
To American military prosecutors, Mr. Khadr is a committed Al Qaeda operative, spy and killer who must be held accountable for killing Sergeant Speer in 2002 and for other bloody acts he committed in Afghanistan.
But there is one fact that may not fit easily into the government’s portrait of Mr. Khadr: He was 15 at the time.
His age is at the center of a legal battle that is to begin tomorrow with an arraignment by a military judge at Guantánamo Bay, Cuba, of Mr. Khadr, whom a range of legal experts describe as the first child fighter in decades to face war-crimes charges. It is a battle with implications as large as the growing ranks of child fighters around the world.
Defense lawyers argue that military prosecutors are violating international law by filing charges that date from events that occurred when Mr. Khadr was 15 or younger. Legal concepts that are still evolving, the lawyers say, require that countries treat child fighters as victims of warfare, rather than war criminals.
The military prosecutors say such notions may be “well-meaning and worthy,” but are irrelevant to the American military commissions at Guantánamo. Mr. Khadr is one of only three Guantánamo detainees to face charges under the law establishing the commissions, passed by Congress last year.
“International law,” the Justice Department asserted in a court filing in the case last week, “does not prohibit an individual under 18 from being prosecuted for war crimes.” Even so, prosecutors said that if they won a conviction, they would seek something less than a life term, given Mr. Khadr’s age. He is 20 now.
Whatever the outcome, his case seems destined to become a landmark, though some scholars say not enough attention has been given to its importance. “What is the precedent that we are setting with this unique step?” asked Peter W. Singer, a senior fellow at the Brookings Institution who has written about child fighters.
Mr. Khadr’s case offers a snapshot of relatively new questions surrounding the legal treatment of child fighters globally, though advocates for children have tended to focus less on young terrorists and more on children who fight in civil wars, like Ishmael Beah, whose best-selling memoir, “A Long Way Gone: Memoirs of a Boy Soldier,” recounts his bloody days as a child soldier in Sierra Leone’s civil war.
Mr. Khadr may not be the most sympathetic figure for those pressing for the more forgiving interpretation of international law. He was born in Canada to a family with such deep Al Qaeda ties that some newspapers there have called them Canada’s first family of terrorism.
He is the youngest detainee at Guantánamo Bay, nearly blind in one eye from injuries sustained during the July 2002 firefight in which Sergeant Speer was mortally wounded and another American soldier was severely injured. Last week, Mr. Khadr said he wanted to fire all of his American lawyers, and some of them said they understood why he might distrust Americans after five years at Guantánamo.
Still, they argue that war-crimes prosecutors should focus on the adults who press children into service, not on the children themselves. The charges against Mr. Khadr, they said in a recent court filing, cross a line in the treatment of children that no other country has crossed “in modern history.”
The prosecutors, they say, included in their charges acts that occurred when Mr. Khadr was younger than 10. Mr. Khadr “was subject to undue adult influences,” said Muneer I. Ahmad, an associate professor at the American University Washington College of Law, who has represented Mr. Khadr.
“If Omar had had his free choice,” Professor Ahmad said, “what he would have chosen to do is ride horses, play soccer and read Harry Potter books.”
It is an appeal to emotion that the prosecutors are likely to meet with their own. Sergeant Speer left a wife and two small children. His widow, Tabitha, said in an e-mail exchange with a reporter last week that Mr. Khadr’s youth entitled him to no special consideration.
“Given the opportunity, he would do it all over again,” she wrote. “He was trained to do exactly what he did, regardless of his age.”
To the prosecutors, Mr. Khadr is the essence of a young man who should be held to adult standards. American officials say his father, Ahmed Said Khadr, who was killed in a shootout with Pakistani forces in 2003, was a senior deputy to Osama bin Laden.
One of Mr. Khadr’s brothers is in a wheelchair as a result of that 2003 shootout; another told the Canadian Broadcasting Corporation “we are an Al Qaeda family.” Ahmed Khadr traveled internationally from Canada under the auspices of handling charity money for Muslims. In the mid-1990s, he was held for a time in Pakistan on suspicion of helping finance the bombing of the Egyptian embassy in Islamabad. After he was released, the Khadrs and several of their six children moved from Canada to Afghanistan, where they lived at times in the same compound as Osama bin Laden, officials have said. “All of the children were indoctrinated into the Al Qaeda way of thinking,” said the chief military prosecutor at Guantánamo, Col. Morris D. Davis of the Air Force.
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Molly Corfman/Associated Press
Col. Morris D. Davis is prosecuting Mr. Khadr, who is 20 now.
Threats & ResponsesGo to Complete Coverage »
After Sept. 11, Mr. Khadr made deliberate choices to join Al Qaeda and eventually to kill Sergeant Speer, Colonel Davis said in a recent interview. “There is a difference,” Colonel Davis said, “between a 15-year-old who makes a spur-of-the-moment decision and someone who made a long-term choice.”
Captured bloody and bullet-riddled after the firefight that killed Sergeant Speer, Mr. Khadr has been held at Guantánamo since 2002. At least three other juveniles, perhaps as young as 12, were also held there for a time. But they were released in January 2004, the military said.
Mr. Khadr’s lawyers have said in court that he has been subject to physical and psychological torture that exploited his youth, another example of what they say is a violation of international principles that children be accorded special protections.
In legal filings, the lawyers have asserted, for example, that an interrogator at Guantánamo told Mr. Khadr when he was 17 that if he did not cooperate he would be sent to Egypt where he would be confronted by “Soldier No. 9,” a man who the interrogators said would be sent to rape him.
Asked about the accusations, a Pentagon spokesman, Cmdr. Jeffrey D. Gordon, said they “may be raised by counsel during the course of the trial” but he would not discuss the specifics of the accusations. Commander Gordon added that detainees “have frequently made allegations of abuse while in detention in order to garner public support.”
In their filings, the prosecutors concede that some treaties require special treatment of children caught in warfare. Some of those treaties, they noted, have not been ratified by the United States, and others do not specifically ban prosecution of combatants who are 15 or older.
Some legal experts acknowledge that it is difficult to define precisely what international law requires in the treatment of child fighters. It is a fluid discipline, with few enforcement mechanisms, and there are inconsistent precedents and treaty provisions.
But even those who say there is no bar to the war crimes prosecutions of youthful fighters say the growing use of child fighters around the world means that Mr. Khadr’s case could become pivotal.
“More and more child soldiers are being recruited, and they are committing heinous crimes. This is an issue the international community is going to have to confront,” said Michael A. Newton, a former military prosecutor and expert on the law of war who teaches at Vanderbilt University Law School.
The two sides in the Khadr case interpret some international legal documents differently. One subject on which they differ is a treaty to which the United States is a party, a 2002 United Nations agreement dealing with child fighters.
The defense notes that the agreement requires countries to demobilize captured child fighters and to provide assistance for their physical and psychological recovery “and their social reintegration.”
The defense lawyers say that means sending them home. That would be inconsistent with the potential life term Mr. Khadr faces on charges of murder, attempted murder, spying, conspiracy and providing material support for terrorism.
But government lawyers note that the child-soldier treaty does not expressly rule out war crimes prosecutions for juveniles. Another international child-soldier provision that has become a central issue in Mr. Khadr’s case is a law approved by the United Nations for the prosecution of war crimes after the Sierra Leone civil war in the 1990s. It specifically provides that “persons of 15 years of age” and older can be charged with war crimes.
Colonel Davis said that was a significant precedent. “If the United Nations has signed on to the principle that people who are 15 can be prosecuted for war crimes,” he said, “the notion that we’re blazing a new trail with Mr. Khadr is a false assumption.”
But the former chief war crimes prosecutor for Sierra Leone, David M. Crane, said in an interview that soon after he was appointed by Secretary General Kofi Annan of the United Nations in 2002, he announced that he would not prosecute anyone under 18.
Mr. Crane, a former senior Pentagon legal official who is now a professor at Syracuse University Law School, said the Sierra Leone civil war included a catalogue of horrific acts by teenagers and children. But he said he concluded that warriors under 18 did not have the intellectual and emotional maturity to be prosecuted for war crimes.
“I called them as much victims as the people they raped, maimed and mutilated,” he said.
One person who has reached a different conclusion about the culpability of child fighters is Layne Morris, a housing administrator in a Salt Lake City suburb. Mr. Morris is a former Army Special Forces sergeant, who, like Mr. Khadr, is half-blind because of the firefight that day outside Khost, Afghanistan.
On a recent day, Mr. Morris remembered the stream of shots from AK-47s inside a compound a coalition patrol had surrounded. He remembered the hand grenades that kept coming over the wall. And he described the feeling of the shrapnel that took half his sight.
He said the battle did not unfold quickly, as it sometimes seems in the retelling. American forces surrounded the compound. And then they waited. Some women from the compound emerged and were allowed to leave, Mr. Morris said. A boy fighter would have had the chance to walk out of the gate, too, he said.
There were shots. And more waiting, as the Americans called for air support.
Anyone who was inside had a choice of fighting or surrendering, he said, including Mr. Khadr.
“There is just no way you can say this is a poor befuddled, brainwashed kid,” Mr. Morris said. “This is a kid who made a whole lot of decisions on his own.”
source: New York Times read the entire article @ www.newyorktimes.com
Skip to next paragraph
Threats & ResponsesGo to Complete Coverage »
Omar Ahmed Khadr
To American military prosecutors, Mr. Khadr is a committed Al Qaeda operative, spy and killer who must be held accountable for killing Sergeant Speer in 2002 and for other bloody acts he committed in Afghanistan.
But there is one fact that may not fit easily into the government’s portrait of Mr. Khadr: He was 15 at the time.
His age is at the center of a legal battle that is to begin tomorrow with an arraignment by a military judge at Guantánamo Bay, Cuba, of Mr. Khadr, whom a range of legal experts describe as the first child fighter in decades to face war-crimes charges. It is a battle with implications as large as the growing ranks of child fighters around the world.
Defense lawyers argue that military prosecutors are violating international law by filing charges that date from events that occurred when Mr. Khadr was 15 or younger. Legal concepts that are still evolving, the lawyers say, require that countries treat child fighters as victims of warfare, rather than war criminals.
The military prosecutors say such notions may be “well-meaning and worthy,” but are irrelevant to the American military commissions at Guantánamo. Mr. Khadr is one of only three Guantánamo detainees to face charges under the law establishing the commissions, passed by Congress last year.
“International law,” the Justice Department asserted in a court filing in the case last week, “does not prohibit an individual under 18 from being prosecuted for war crimes.” Even so, prosecutors said that if they won a conviction, they would seek something less than a life term, given Mr. Khadr’s age. He is 20 now.
Whatever the outcome, his case seems destined to become a landmark, though some scholars say not enough attention has been given to its importance. “What is the precedent that we are setting with this unique step?” asked Peter W. Singer, a senior fellow at the Brookings Institution who has written about child fighters.
Mr. Khadr’s case offers a snapshot of relatively new questions surrounding the legal treatment of child fighters globally, though advocates for children have tended to focus less on young terrorists and more on children who fight in civil wars, like Ishmael Beah, whose best-selling memoir, “A Long Way Gone: Memoirs of a Boy Soldier,” recounts his bloody days as a child soldier in Sierra Leone’s civil war.
Mr. Khadr may not be the most sympathetic figure for those pressing for the more forgiving interpretation of international law. He was born in Canada to a family with such deep Al Qaeda ties that some newspapers there have called them Canada’s first family of terrorism.
He is the youngest detainee at Guantánamo Bay, nearly blind in one eye from injuries sustained during the July 2002 firefight in which Sergeant Speer was mortally wounded and another American soldier was severely injured. Last week, Mr. Khadr said he wanted to fire all of his American lawyers, and some of them said they understood why he might distrust Americans after five years at Guantánamo.
Still, they argue that war-crimes prosecutors should focus on the adults who press children into service, not on the children themselves. The charges against Mr. Khadr, they said in a recent court filing, cross a line in the treatment of children that no other country has crossed “in modern history.”
The prosecutors, they say, included in their charges acts that occurred when Mr. Khadr was younger than 10. Mr. Khadr “was subject to undue adult influences,” said Muneer I. Ahmad, an associate professor at the American University Washington College of Law, who has represented Mr. Khadr.
“If Omar had had his free choice,” Professor Ahmad said, “what he would have chosen to do is ride horses, play soccer and read Harry Potter books.”
It is an appeal to emotion that the prosecutors are likely to meet with their own. Sergeant Speer left a wife and two small children. His widow, Tabitha, said in an e-mail exchange with a reporter last week that Mr. Khadr’s youth entitled him to no special consideration.
“Given the opportunity, he would do it all over again,” she wrote. “He was trained to do exactly what he did, regardless of his age.”
To the prosecutors, Mr. Khadr is the essence of a young man who should be held to adult standards. American officials say his father, Ahmed Said Khadr, who was killed in a shootout with Pakistani forces in 2003, was a senior deputy to Osama bin Laden.
One of Mr. Khadr’s brothers is in a wheelchair as a result of that 2003 shootout; another told the Canadian Broadcasting Corporation “we are an Al Qaeda family.” Ahmed Khadr traveled internationally from Canada under the auspices of handling charity money for Muslims. In the mid-1990s, he was held for a time in Pakistan on suspicion of helping finance the bombing of the Egyptian embassy in Islamabad. After he was released, the Khadrs and several of their six children moved from Canada to Afghanistan, where they lived at times in the same compound as Osama bin Laden, officials have said. “All of the children were indoctrinated into the Al Qaeda way of thinking,” said the chief military prosecutor at Guantánamo, Col. Morris D. Davis of the Air Force.
Skip to next paragraph
Molly Corfman/Associated Press
Col. Morris D. Davis is prosecuting Mr. Khadr, who is 20 now.
Threats & ResponsesGo to Complete Coverage »
After Sept. 11, Mr. Khadr made deliberate choices to join Al Qaeda and eventually to kill Sergeant Speer, Colonel Davis said in a recent interview. “There is a difference,” Colonel Davis said, “between a 15-year-old who makes a spur-of-the-moment decision and someone who made a long-term choice.”
Captured bloody and bullet-riddled after the firefight that killed Sergeant Speer, Mr. Khadr has been held at Guantánamo since 2002. At least three other juveniles, perhaps as young as 12, were also held there for a time. But they were released in January 2004, the military said.
Mr. Khadr’s lawyers have said in court that he has been subject to physical and psychological torture that exploited his youth, another example of what they say is a violation of international principles that children be accorded special protections.
In legal filings, the lawyers have asserted, for example, that an interrogator at Guantánamo told Mr. Khadr when he was 17 that if he did not cooperate he would be sent to Egypt where he would be confronted by “Soldier No. 9,” a man who the interrogators said would be sent to rape him.
Asked about the accusations, a Pentagon spokesman, Cmdr. Jeffrey D. Gordon, said they “may be raised by counsel during the course of the trial” but he would not discuss the specifics of the accusations. Commander Gordon added that detainees “have frequently made allegations of abuse while in detention in order to garner public support.”
In their filings, the prosecutors concede that some treaties require special treatment of children caught in warfare. Some of those treaties, they noted, have not been ratified by the United States, and others do not specifically ban prosecution of combatants who are 15 or older.
Some legal experts acknowledge that it is difficult to define precisely what international law requires in the treatment of child fighters. It is a fluid discipline, with few enforcement mechanisms, and there are inconsistent precedents and treaty provisions.
But even those who say there is no bar to the war crimes prosecutions of youthful fighters say the growing use of child fighters around the world means that Mr. Khadr’s case could become pivotal.
“More and more child soldiers are being recruited, and they are committing heinous crimes. This is an issue the international community is going to have to confront,” said Michael A. Newton, a former military prosecutor and expert on the law of war who teaches at Vanderbilt University Law School.
The two sides in the Khadr case interpret some international legal documents differently. One subject on which they differ is a treaty to which the United States is a party, a 2002 United Nations agreement dealing with child fighters.
The defense notes that the agreement requires countries to demobilize captured child fighters and to provide assistance for their physical and psychological recovery “and their social reintegration.”
The defense lawyers say that means sending them home. That would be inconsistent with the potential life term Mr. Khadr faces on charges of murder, attempted murder, spying, conspiracy and providing material support for terrorism.
But government lawyers note that the child-soldier treaty does not expressly rule out war crimes prosecutions for juveniles. Another international child-soldier provision that has become a central issue in Mr. Khadr’s case is a law approved by the United Nations for the prosecution of war crimes after the Sierra Leone civil war in the 1990s. It specifically provides that “persons of 15 years of age” and older can be charged with war crimes.
Colonel Davis said that was a significant precedent. “If the United Nations has signed on to the principle that people who are 15 can be prosecuted for war crimes,” he said, “the notion that we’re blazing a new trail with Mr. Khadr is a false assumption.”
But the former chief war crimes prosecutor for Sierra Leone, David M. Crane, said in an interview that soon after he was appointed by Secretary General Kofi Annan of the United Nations in 2002, he announced that he would not prosecute anyone under 18.
Mr. Crane, a former senior Pentagon legal official who is now a professor at Syracuse University Law School, said the Sierra Leone civil war included a catalogue of horrific acts by teenagers and children. But he said he concluded that warriors under 18 did not have the intellectual and emotional maturity to be prosecuted for war crimes.
“I called them as much victims as the people they raped, maimed and mutilated,” he said.
One person who has reached a different conclusion about the culpability of child fighters is Layne Morris, a housing administrator in a Salt Lake City suburb. Mr. Morris is a former Army Special Forces sergeant, who, like Mr. Khadr, is half-blind because of the firefight that day outside Khost, Afghanistan.
On a recent day, Mr. Morris remembered the stream of shots from AK-47s inside a compound a coalition patrol had surrounded. He remembered the hand grenades that kept coming over the wall. And he described the feeling of the shrapnel that took half his sight.
He said the battle did not unfold quickly, as it sometimes seems in the retelling. American forces surrounded the compound. And then they waited. Some women from the compound emerged and were allowed to leave, Mr. Morris said. A boy fighter would have had the chance to walk out of the gate, too, he said.
There were shots. And more waiting, as the Americans called for air support.
Anyone who was inside had a choice of fighting or surrendering, he said, including Mr. Khadr.
“There is just no way you can say this is a poor befuddled, brainwashed kid,” Mr. Morris said. “This is a kid who made a whole lot of decisions on his own.”
source: New York Times read the entire article @ www.newyorktimes.com
Berlin to lift blockade on VAT reform
By George Parker in Brussels
Published: June 1 2007 18:23 Last updated: June 1 2007 18:23
Germany will next week lift its blockade on sweeping reforms to Europe’s sales tax regime in a move that threatens the e-commerce boom in Luxembourg, its tiny low-tax neighbour.
Companies such as Amazon, AOL and Skype have descended on Luxembourg in recent years to take advantage of the grand duchy’s low VAT rate to sell services across Europe.
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Their tax shelter in the Ardennes seemed secure until Germany, holder of the rotating EU presidency, threw its weight behind moves to turn the sales tax system for e-commerce on its head.
Finance ministers will next week be asked to approve a plan to charge VAT on internet and telecoms services in the country where they are consumed, instead of the country where they are supplied.
Luxembourg is fighting a rearguard action to block the so-called VAT package, which would end the advantage enjoyed by local e-commerce companies. “Negotiations are going to be quite tough,” said a spokesman for Jean-Claude Juncker, Luxembourg’s premier and finance minister.
“These companies do their billing through Luxembourg and if this goes through we would lose quite a lot of tax revenue – about €300m ($403m, £204m) a year.”
Berlin blocked the VAT deal for months in protest at its failure to get European agreement on an entirely separate and ambitious plan to fight German tax fraud.
But Peer Steinbrück, German finance minister, is now ready to try to settle the issue at next week’s Ecofin meeting in Luxembourg after winning concessions on the tax fraud issue.
The fact that Germany recently increased its VAT rate from 16 per cent to 19 per cent – increasing the incentive for its e-commerce companies to move across the border to enjoy Luxembourg’s 15 per cent rate – may also have been a factor.
Luxembourg is not alone in opposing parts of the package, but its problem is seen as the most fundamental. France is concerned about the operation of new VAT one-stop shops, which are essential to make the new system work.
They would allow an e-commerce company to register for tax in its home state, which would arrange for tax to be transferred at the local rate to the country where the service was consumed.
Germany’s decision to push for a deal on the VAT package came when other member states told Mr Steinbrück this week they would consider allowing a pilot project to test his radical plan to fight VAT fraud.
A draft communiqué says the European Commission should consider “running a pilot project for a limited period of time” to test the “reverse charge” VAT model, where tax is charged at the end of the supply chain.
Austria, which also believes the method could cut fraud, is the likely guinea pig for any pilot project.
Copyright The Financial Times Limited 2007
Published: June 1 2007 18:23 Last updated: June 1 2007 18:23
Germany will next week lift its blockade on sweeping reforms to Europe’s sales tax regime in a move that threatens the e-commerce boom in Luxembourg, its tiny low-tax neighbour.
Companies such as Amazon, AOL and Skype have descended on Luxembourg in recent years to take advantage of the grand duchy’s low VAT rate to sell services across Europe.
ADVERTISEMENT
Their tax shelter in the Ardennes seemed secure until Germany, holder of the rotating EU presidency, threw its weight behind moves to turn the sales tax system for e-commerce on its head.
Finance ministers will next week be asked to approve a plan to charge VAT on internet and telecoms services in the country where they are consumed, instead of the country where they are supplied.
Luxembourg is fighting a rearguard action to block the so-called VAT package, which would end the advantage enjoyed by local e-commerce companies. “Negotiations are going to be quite tough,” said a spokesman for Jean-Claude Juncker, Luxembourg’s premier and finance minister.
“These companies do their billing through Luxembourg and if this goes through we would lose quite a lot of tax revenue – about €300m ($403m, £204m) a year.”
Berlin blocked the VAT deal for months in protest at its failure to get European agreement on an entirely separate and ambitious plan to fight German tax fraud.
But Peer Steinbrück, German finance minister, is now ready to try to settle the issue at next week’s Ecofin meeting in Luxembourg after winning concessions on the tax fraud issue.
The fact that Germany recently increased its VAT rate from 16 per cent to 19 per cent – increasing the incentive for its e-commerce companies to move across the border to enjoy Luxembourg’s 15 per cent rate – may also have been a factor.
Luxembourg is not alone in opposing parts of the package, but its problem is seen as the most fundamental. France is concerned about the operation of new VAT one-stop shops, which are essential to make the new system work.
They would allow an e-commerce company to register for tax in its home state, which would arrange for tax to be transferred at the local rate to the country where the service was consumed.
Germany’s decision to push for a deal on the VAT package came when other member states told Mr Steinbrück this week they would consider allowing a pilot project to test his radical plan to fight VAT fraud.
A draft communiqué says the European Commission should consider “running a pilot project for a limited period of time” to test the “reverse charge” VAT model, where tax is charged at the end of the supply chain.
Austria, which also believes the method could cut fraud, is the likely guinea pig for any pilot project.
Copyright The Financial Times Limited 2007
Global overview: Equities soar on US growth hopes
Global overview: Equities soar on US growth hopes
By Dave Shellock
Published: June 1 2007 17:22 Last updated: June 1 2007 21:26
Investors rediscovered their appetite for risk this week as mounting optimism about the prospects for the US economy helped drive world equity markets to fresh highs and send government bonds tumbling.
Even a sharp sell-off for Chinese stocks failed to provoke more than a fleeting wobble as a series of robust economic reports encouraged hopes that the US was heading for a soft landing.
Source : www.ft.com
By Dave Shellock
Published: June 1 2007 17:22 Last updated: June 1 2007 21:26
Investors rediscovered their appetite for risk this week as mounting optimism about the prospects for the US economy helped drive world equity markets to fresh highs and send government bonds tumbling.
Even a sharp sell-off for Chinese stocks failed to provoke more than a fleeting wobble as a series of robust economic reports encouraged hopes that the US was heading for a soft landing.
Source : www.ft.com
DOW JONES SURGES ON TALK FOR HIGHER BID
By Joshua Chaffin, Aline van Duyn and James Politi in New York
Published: June 1 2007 19:41 Last updated: June 2 2007 00:46
Dow Jones shares surged on Friday as investors bet that Rupert Murdoch’s News Corp would raise its $5bn offer for the publisher of the Wall Street Journal or that rival bidders would enter the fray.
By the close of trading on Wall Street, Dow Jones shares had gained 14.8 per cent to $61.20 – above the $60 per share put on the table by News Corp.
Source : www.ft.com
Published: June 1 2007 19:41 Last updated: June 2 2007 00:46
Dow Jones shares surged on Friday as investors bet that Rupert Murdoch’s News Corp would raise its $5bn offer for the publisher of the Wall Street Journal or that rival bidders would enter the fray.
By the close of trading on Wall Street, Dow Jones shares had gained 14.8 per cent to $61.20 – above the $60 per share put on the table by News Corp.
Source : www.ft.com
Saturday, June 2, 2007
G8 SUMMIT 2007
Europe furious at US climate call
By Fiona Harvey in London, Hugh Williamson in Berlin and George Parker in Brussels
Published: June 1 2007 19:52 Last updated: June 1 2007 19:52
Germany and the European Commission reacted angrily to President George W. Bush’s apparent change of heart on climate change on Friday, setting the stage for a stormy G8 summit of rich industrialised countries next week.
A spokesman for Angela Merkel, Germany’s chancellor and current G8 president, said Germany’s stance that climate talks should take place within the United Nations was “non-negotiable”. Stavros Dimas, the EU environment commissioner, dismissed the proposals for climate talks as vague and “the classic US line”.
Mr Bush on Thursday appeared to suggest a parallel process to the UN, by which the world’s 15 biggest emitters of greenhouse gases would within 18 months “establish a new framework on greenhouse gases when the Kyoto protocol expires in 2012” and “set a long-term global goal on reducing emissions”.
His proposal marked a reversal of the US policy of refusing to discuss emissions cuts and rejecting a global framework such as Kyoto.
VIDEO
Fiona Harvey , environment correspondent, analyses whether Bush’s reversal on climate change offers any hope
But the plans are starkly different from the proposal tabled by Germany for next week’s G8 summit, which would require leaders to agree to prevent global temperatures rising by more than 2 degrees Celsius and require stringent emissions cuts.
Attitudes within Europe hardened on Friday as some politicians and activists accused Mr Bush of trying to wreck next week’s summit, and UN negotiations on climate change, set to take place this December.
José Manuel Barroso, the European Commission president, told the Financial Times Mr Bush should be “more ambitious” and said the UN must “remain the basis for setting – and achieving – binding, measurable and enforceable targets”.
Sigmar Gabriel, the German environment minister, said Mr Bush’s speech could mark a “change in the US position or a manoeuvre aimed at causing confusion”.
A comment by Mr Bush to German media that Ms Merkel “will be pleased” with his proposals, which run counter to her own, was seen as provocative.
There were signs on Friday night that Mr Bush’s proposals would split the G8, which some sceptics argue is his intention. Stephen Harper, Canada’s prime minister, welcomed the plans, as did Tony Blair, Britain’s outgoing prime minister, and Shinzo Abe, Japan’s prime minister.
“It’s absolutely intended to split the G8,” said John Sauven, director of Greenpeace.
Mr Abe said: “I believe the United States too is finally getting serious in dealing with global warming.” Tokyo’s position is that binding targets have failed because they leave out the world’s biggest emitters, especially the US, China and India. It is championing a vaguer approach, in which the world’s biggest emitters pledge to use technology to tackle emissions.
Yasuhisa Shiozaki, the chief cabinet secretary, said: “We believe Prime Minister Abe and President Bush share the same perspective and look forward to achieving significant progress.
source : www.ft.com
By Fiona Harvey in London, Hugh Williamson in Berlin and George Parker in Brussels
Published: June 1 2007 19:52 Last updated: June 1 2007 19:52
Germany and the European Commission reacted angrily to President George W. Bush’s apparent change of heart on climate change on Friday, setting the stage for a stormy G8 summit of rich industrialised countries next week.
A spokesman for Angela Merkel, Germany’s chancellor and current G8 president, said Germany’s stance that climate talks should take place within the United Nations was “non-negotiable”. Stavros Dimas, the EU environment commissioner, dismissed the proposals for climate talks as vague and “the classic US line”.
Mr Bush on Thursday appeared to suggest a parallel process to the UN, by which the world’s 15 biggest emitters of greenhouse gases would within 18 months “establish a new framework on greenhouse gases when the Kyoto protocol expires in 2012” and “set a long-term global goal on reducing emissions”.
His proposal marked a reversal of the US policy of refusing to discuss emissions cuts and rejecting a global framework such as Kyoto.
VIDEO
Fiona Harvey , environment correspondent, analyses whether Bush’s reversal on climate change offers any hope
But the plans are starkly different from the proposal tabled by Germany for next week’s G8 summit, which would require leaders to agree to prevent global temperatures rising by more than 2 degrees Celsius and require stringent emissions cuts.
Attitudes within Europe hardened on Friday as some politicians and activists accused Mr Bush of trying to wreck next week’s summit, and UN negotiations on climate change, set to take place this December.
José Manuel Barroso, the European Commission president, told the Financial Times Mr Bush should be “more ambitious” and said the UN must “remain the basis for setting – and achieving – binding, measurable and enforceable targets”.
Sigmar Gabriel, the German environment minister, said Mr Bush’s speech could mark a “change in the US position or a manoeuvre aimed at causing confusion”.
A comment by Mr Bush to German media that Ms Merkel “will be pleased” with his proposals, which run counter to her own, was seen as provocative.
There were signs on Friday night that Mr Bush’s proposals would split the G8, which some sceptics argue is his intention. Stephen Harper, Canada’s prime minister, welcomed the plans, as did Tony Blair, Britain’s outgoing prime minister, and Shinzo Abe, Japan’s prime minister.
“It’s absolutely intended to split the G8,” said John Sauven, director of Greenpeace.
Mr Abe said: “I believe the United States too is finally getting serious in dealing with global warming.” Tokyo’s position is that binding targets have failed because they leave out the world’s biggest emitters, especially the US, China and India. It is championing a vaguer approach, in which the world’s biggest emitters pledge to use technology to tackle emissions.
Yasuhisa Shiozaki, the chief cabinet secretary, said: “We believe Prime Minister Abe and President Bush share the same perspective and look forward to achieving significant progress.
source : www.ft.com
SARKOZY USHERS IN ROSIER VISION OF FRANCE
By John Thornhill in Paris
Published: June 1 2007 17:44 Last updated: June 1 2007 17:44
Just two weeks after taking over as France’s president, Nicolas Sarkozy is surfing an extraordinary wave of popularity and economic fortune that gives him every chance of sweeping this month’s parliamentary elections and implementing his reform programme.
An opinion poll in Les Echos newspaper on Friday showed that 62 per cent of respondents approved of his government’s economic proposals. A clear majority favoured a rapid implementation of Mr Sarkozy’s promises, including making mortgage interest payments tax deductible, forcing employees to provide minimum levels of public services during strikes, and capping an individual’s tax payments at 50 per cent of income.
Economic data released this week confirm that Mr Sarkozy has assumed power at a particularly benign time. Manufacturing output picked up in May and order books are strong, according to purchasing managers’ index data published on Friday. Consumer confidence also surged last month and the unemployment rate, which shot through 10 per cent two years ago, has now fallen back to 8.2 per cent.
Eric Chaney, Europe economist at Morgan Stanley, said it was traditional for incoming presidents to enjoy a political honeymoon, but Mr Sarkozy appeared to have transformed the mood of the country. “I take the consumer confidence indicators with a pinch of salt but there is really something new that makes me relatively positive about the process of reforms,” he said.
Françoise Fressoz, a political commentator for Les Echos newspaper, wrote that as if by magic the habitually gloomy country had assumed a far more rosy outlook following Mr Sarkozy’s election on May 6. “At all levels of society confidence is back. All that because a new man has entered the Elysée palace and promised his people that everything is possible. The miracle of Sarkomania!”
Mr Sarkozy, or “Speedy Sarko”, as he is often called, has rapidly formed a streamlined, cross-party government and opened talks with business and trade union leaders about loosening rigid labour laws. Opinion polls suggest his ruling UMP party will almost certainly retain its majority in parliament following two-round elections on June 10 and 17.
Mr Chaney said Mr Sarkozy’s tax-cutting proposals would unnecessarily boost France’s robust consumer spending in the short term and could later strain the public finances. “The economy does not need a stimulus, but there will be a fiscal stimulus,” he said.
More crucial labour market reforms, to be hammered out between the government and “social partners” before the year-end, would have a far slower economic impact. “The new labour laws will only have an incremental effect. For the stock of workers things will not change immediately. It is only for the flow – or turnover – of workers that things will change,” Mr Chaney said.
Morgan Stanley forecasts the French economy will expand by 1.9 per cent this year and 2.2 per cent in in 2008. But France is still likely to underperform within the eurozone.
source : www.ft.com
Published: June 1 2007 17:44 Last updated: June 1 2007 17:44
Just two weeks after taking over as France’s president, Nicolas Sarkozy is surfing an extraordinary wave of popularity and economic fortune that gives him every chance of sweeping this month’s parliamentary elections and implementing his reform programme.
An opinion poll in Les Echos newspaper on Friday showed that 62 per cent of respondents approved of his government’s economic proposals. A clear majority favoured a rapid implementation of Mr Sarkozy’s promises, including making mortgage interest payments tax deductible, forcing employees to provide minimum levels of public services during strikes, and capping an individual’s tax payments at 50 per cent of income.
Economic data released this week confirm that Mr Sarkozy has assumed power at a particularly benign time. Manufacturing output picked up in May and order books are strong, according to purchasing managers’ index data published on Friday. Consumer confidence also surged last month and the unemployment rate, which shot through 10 per cent two years ago, has now fallen back to 8.2 per cent.
Eric Chaney, Europe economist at Morgan Stanley, said it was traditional for incoming presidents to enjoy a political honeymoon, but Mr Sarkozy appeared to have transformed the mood of the country. “I take the consumer confidence indicators with a pinch of salt but there is really something new that makes me relatively positive about the process of reforms,” he said.
Françoise Fressoz, a political commentator for Les Echos newspaper, wrote that as if by magic the habitually gloomy country had assumed a far more rosy outlook following Mr Sarkozy’s election on May 6. “At all levels of society confidence is back. All that because a new man has entered the Elysée palace and promised his people that everything is possible. The miracle of Sarkomania!”
Mr Sarkozy, or “Speedy Sarko”, as he is often called, has rapidly formed a streamlined, cross-party government and opened talks with business and trade union leaders about loosening rigid labour laws. Opinion polls suggest his ruling UMP party will almost certainly retain its majority in parliament following two-round elections on June 10 and 17.
Mr Chaney said Mr Sarkozy’s tax-cutting proposals would unnecessarily boost France’s robust consumer spending in the short term and could later strain the public finances. “The economy does not need a stimulus, but there will be a fiscal stimulus,” he said.
More crucial labour market reforms, to be hammered out between the government and “social partners” before the year-end, would have a far slower economic impact. “The new labour laws will only have an incremental effect. For the stock of workers things will not change immediately. It is only for the flow – or turnover – of workers that things will change,” Mr Chaney said.
Morgan Stanley forecasts the French economy will expand by 1.9 per cent this year and 2.2 per cent in in 2008. But France is still likely to underperform within the eurozone.
source : www.ft.com
US AND SPAIN CLASH OVER CUBA
By Leslie Crawford in Madrid
Published: June 1 2007 19:27 Last updated: June 1 2007 19:27
The US and Spain on Friday clashed over how to promote a democratic transition in Cuba, during the first official visit to Madrid by Condoleezza Rice, the US secretary of state.
Spain has never broken relations with its former colony, even during General Francisco Franco’s strongly anti-Communist dictatorship, and favours constructive engagement with Fidel Castro’s regime. Spanish companies have big investments in the island’s tourism and tobacco industries.
After meeting Miguel Angel Moratinos, the Spanish foreign minister, in Madrid, Ms Rice said: “I have real doubts about the value of engagement with a regime that is anti-democratic and that is trying to secure the transition of one regime to the next anti-democratic regime.”
Mr Moratinos said: “I hope that, over time, we will convince Ms Rice that our tactics can deliver results.” Earlier this week, Spanish diplomats were allowed to visit Cuban jails for the first time. Cuba and Spain agreed to establish a dialogue on human rights following a visit by Mr Moratinos to Havana in April.
Ms Rice said Cuba needed “structural change,” not a dynastic succession, and implied that Spain should be more sympathetic to the plight of Mr Castro’s political opponents.
Mr Moratinos was criticised by human rights groups for not meeting dissidents during his visit in April, but on Friday he bristled at the implication that Spain was not doing enough to promote human rights on the Caribbean island.
“We have no difficulty talking to dissidents,” he said. “The Spanish embassy in Havana is in contact with them. Our diplomats visit Cuba and talk to dissidents. We worry about them and we have even secured the release of some of them. Who has talked more to them? Who?” he asked.
Mr Moratinos said he and Ms Rice had had “frank” discussions and that they had agreed to better align tactics on the shared goal of bringing democracy to Cuba. “We will work more closely to ensure our efforts are complementary and not contradictory,” he said.
There was some agreement on Venezuela. Both Ms Rice and Mr Moratinos expressed concern at the closure of a television station in Caracas that was critical of Hugo Chávez, the Venezuelan president. The two called on Mr Chávez to cease his attacks on the free press.
By Leslie Crawford in Madrid
Published: June 1 2007 19:27 Last updated: June 1 2007 19:27
The US and Spain on Friday clashed over how to promote a democratic transition in Cuba, during the first official visit to Madrid by Condoleezza Rice, the US secretary of state.
Spain has never broken relations with its former colony, even during General Francisco Franco’s strongly anti-Communist dictatorship, and favours constructive engagement with Fidel Castro’s regime. Spanish companies have big investments in the island’s tourism and tobacco industries.
After meeting Miguel Angel Moratinos, the Spanish foreign minister, in Madrid, Ms Rice said: “I have real doubts about the value of engagement with a regime that is anti-democratic and that is trying to secure the transition of one regime to the next anti-democratic regime.”
Mr Moratinos said: “I hope that, over time, we will convince Ms Rice that our tactics can deliver results.” Earlier this week, Spanish diplomats were allowed to visit Cuban jails for the first time. Cuba and Spain agreed to establish a dialogue on human rights following a visit by Mr Moratinos to Havana in April.
Ms Rice said Cuba needed “structural change,” not a dynastic succession, and implied that Spain should be more sympathetic to the plight of Mr Castro’s political opponents.
Mr Moratinos was criticised by human rights groups for not meeting dissidents during his visit in April, but on Friday he bristled at the implication that Spain was not doing enough to promote human rights on the Caribbean island.
“We have no difficulty talking to dissidents,” he said. “The Spanish embassy in Havana is in contact with them. Our diplomats visit Cuba and talk to dissidents. We worry about them and we have even secured the release of some of them. Who has talked more to them? Who?” he asked.
Mr Moratinos said he and Ms Rice had had “frank” discussions and that they had agreed to better align tactics on the shared goal of bringing democracy to Cuba. “We will work more closely to ensure our efforts are complementary and not contradictory,” he said.
There was some agreement on Venezuela. Both Ms Rice and Mr Moratinos expressed concern at the closure of a television station in Caracas that was critical of Hugo Chávez, the Venezuelan president. The two called on Mr Chávez to cease his attacks on the free press.
source : www.ft.com
Thursday, May 31, 2007
Presidency 2008 US of A
For the first time since 1928, both major parties will have open contests for the Presidential nomination without a sitting President or Vice President in the running. Politics1 presents a "first look" at those people being mentioned as possible, likely, speculative, or draft candidates for President in 2008.
One of next years favourites is Barrack Obama 45 year young senator from Illinois.
US Senator Barack H. Obama, Jr.(Democrat - Illinois)
BIOGRAPHICAL FACTS:
POLITICAL: Illinois State Senator, 1997-2005 (elected 1996, 1998, 2002). Candidate for Congress, 2000. US Senator, 2005 - present (elected 2004). Keynote Speaker, 2004 Democratic National Convention.
PROFESSIONAL: Attorney. Author. Senior Lecturer, University of Chicago Law School, 1993-2004. Executive Director, Illinois Project Vote, 1992. Director, Developing Communities Project, 1985-88. Financial Analyst, 1983-84.
EDUCATION: B.A. (Political Science), Columbia University, 1983. J.D. magna cum laude, Harvard Law School, 1991.
PERSONAL: Born August 4, 1961, in Honolulu, Hawaii. Married to Michelle Robinson Obama. Two children. United Church of Christ.
His toughest opponent will be 09/11/2001 Hero mayor Rudy Giuliani (Republican)
Former Mayor Rudolph W.L. "Rudy" Giuliani III (Republican - New York)
BIOGRAPHICAL FACTS:
POLITICAL: GOP nominee for New York City Mayor, 1989. New York City Mayor, 1994-2002 (elected 1993, 1997). Candidate for US Senate, 2000 (withdrew).
PROFESSIONAL: Law Clerk to US District Court Judge Lloyd MacMahon, 1968-70. Assistant US Attorney, 1970-75. Associate Deputy US Attorney General, 1975-77. Attorney, private practice, 1977-81 and 2002-present. Associate US Attorney General, 1981-83. US Attorney for the Southern District of New York, 1983-89. Chairman/CEO, Giuliani Partners LLC, 2002-present.
EDUCATION: B.A., Manhattan College, 1965. J.D. magna cum laude, New York University Law School, 1968.
PERSONAL: Born May 28, 1944, in Brooklyn, New York. Twice divorced. Two children. Catholic.
NEW HOMEPAGE LAUNCHED
We are both proud to have launched this new homepage that is aimed at all the professionals in the domain of law and economics.
We will provide you with the newest updates and news happening on the market and in the law domain.
Yours Truly,
Marc KOHNEN
We will provide you with the newest updates and news happening on the market and in the law domain.
Yours Truly,
Marc KOHNEN
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