Tuesday, April 17, 2012

Exclusive: Italy puts back balanced budget goal by a year: draft

Italy-puts-back-balanced-budget-goal-by-a-year Italy will delay by a year its plan to balance the budget in 2013 due to a weakening economic outlook, according to a draft document due to be approved by the cabinet of Prime Minister Mario Monti on Wednesday.

The draft Economic and Financial document (DEF), which has been obtained by Reuters, raises the budget deficit forecasts for 2012-2014 and slashes this year's economic growth outlook.

Italy's budget deficit is already one of the lowest in the euro zone as a proportion of output and many economists say its chronically weak growth is more of a concern than fiscal slippage.

Under former Prime Minister Silvio Berlusconi Italy promised its European partners last summer that it would balance its budget in 2013, bringing forward the previous 2014 target to try to reassure markets as Italian bond yields surged.

Now Monti's technocrat government is poised to revert to the old 2014 target as the economy contracts sharply, weighed down by a series of austerity measures approved to accelerate deficit reduction.

Monti was hailed as a savior when he replaced Berlusconi in November as Italy appeared to be heading towards a Greek-style debt crisis, but his popularity is declining and his reforms are drawing rising criticism and resistance.

A similar move by Madrid earlier this year to weaken its deficit target sent yields on Spanish debt sharply higher. However, Spain's deficit is much larger than Italy's and is considered to be a bigger problem.

Monti still enjoys enormous credibility internationally and the revised deficit targets are unlikely to disturb markets that are now more concerned about the danger of excessive austerity, said Nicholas Spiro from Spiro Sovereign Strategy.

"Berlusconi could have promised a balanced budget this year and people would have just laughed, while Monti can promise it in three years and he is still credible," Spiro said. "I don't believe that a decision to be less aggressive on the fiscal front is a concern for a country like Italy."

The draft DEF raises the 2012 deficit target marginally to 1.7 percent of gross domestic product from 1.6 percent, while the 2013 goal is raised to 0.5 percent from 0.1 percent.

The nearly balanced budget, with a 0.1 percent deficit, is now targeted in 2014.

The economy is forecast to contract 1.2 percent this year, according to the document, compared with a 0.4 percent decline in GDP projected by Monti's government in December.


Earlier on Tuesday the International Monetary Fund forecast that Rome would not balance its budget before 2017.

It said in its Fiscal Monitor report that the deficit would fall this year to just 2.4 percent of output and would stand at 1.5 percent in 2013, a full percentage point above the revised forecast in the draft DEF.

The IMF is also more downbeat than Monti on the economy, forecasting a steep contraction of 1.9 percent this year.

Despite its forecasts, the IMF urged Monti not to adopt additional corrective measures due to the weak economy.

The delay in the balanced budget goal contained in the DEF suggests that Monti is following this advice.

IMF Chief Economist Olivier Blanchard told reporters the government was pursuing the right policies to improve market sentiment and improve Italy's economic prospects.

Since taking office in November the former European Commissioner has passed a reform of the pension system, partially deregulated some professional services and proposed a reform of the labor market which is still before parliament.

The IMF said Italy would miss its deficit targets as a result of the economic recession and that the budget, if adjusted for the weak economic cycle, would already post a surplus in 2013.

In a subtle shift of language recently Monti has increasingly referred to the so-called "structural" deficit - adjusted for the business cycle - when talking about Italy's balanced budget target.

The deputy governor of the Bank of Italy, Fabrizio Saccomanni, said on Tuesday it would be "an excellent result" if Italy achieved a deficit below 1 percent of GDP in 2013.

The draft DEF forecasts that the public debt will rise this year to 123.4 percent of GDP from 120.1 percent in 2011, and fall in 2013 to 121.6 percent.

(Writing by Gavin Jones; editing by David Stamp)

Chaos marks Egypt football riot trial

The opening day of the trial of 73 men accused of involvement in an Egyptian football stampede, which left more than 70 dead, has been marked with chaos and had to be briefly adjourned.

Dozens of defendants began shouting and pleaded "not guilty", as the prosecutor read out charges on Tuesday in the capital, Cairo.

Some chanted "Allahu Akbar" (God is greatest), denying the charges of premeditated murder and possession of weapons.

"We will die like them, or bring them justice," the defendants cried, denying any role in the stadium stampede in Port Said on February 1 that was the deadliest sporting tragedy in Egyptian history.

Judge Abdel Magid Mahmoud walked out as the defendants jumped on benches in the court cage and waved their fists at the bench.

The proceedings resumed a short while later, but adjourned until May 5 to allow time for prosecutors to call witnesses.

Amid chaotic scenes aired live on state television, defendants dressed in white climbed on benches inside the cage, pointing to security officials on trial in the same case and blaming them for Egypt's worst football disaster.

One of the accused shouted that he had been brought in as a witness in the case but was shocked to find out that he had been charged along with the rest.

Deadly clashes
The clashes in the Suez Canal city between fans of home side Al-Masry and Cairo's Al-Ahly erupted at the final whistle.
Al-Masry fans invaded the pitch after their team beat the visitors 3-1, throwing rocks, bottles and fireworks at Al-Ahly supporters, causing chaos and panic as players and fans fled in all directions.

It was one of the deadliest incidents in football history, and came amid charges from witnesses that security forces did little to prevent the rioting.

The Port Said stadium deaths also sparked days of violent protests in Cairo, in which another 16 people were killed.

The prosecutor said the accused, many of whom are Al-Masry supporters, started the violence that killed the Al-Ahly fans "in revenge for prior differences between them, and in a show of force".

Many Egyptians believe the football riot was orchestrated either by the police or by supporters of ousted president Hosni Mubarak, a reflection of the distrust felt towards the country's ruling military.


Obama rejects Netanyahu's claim on Iran nuclear 'freebie'

obama-colombia-secret-service-story-top President Obama has firmly rejected a complaint by Israeli Prime Minister Benjamin Netanyahu that Iran was given a "freebie" on its nuclear program.

Netanyahu's complaint came Sunday, a day after key world powers met with Iran and announced that the next meeting would take place in late May.

"My initial impression is that Iran has been given a freebie," Netanyahu said. "It has got five weeks to continue enrichment without any limitation, any inhibition."

Obama took issue with the complaint.

"Now, the clock is ticking. And I've been very clear to Iran and to our negotiating partners that we're not going to have these talks just drag out in a stalling process," he said Sunday in Cartagena, Colombia, at the Summit of the Americas. "But so far, at least, we haven't given away anything -- other than the opportunity for us to negotiate and see if Iran comes to the table in good faith.

"And the notion that somehow we've given something away or a 'freebie' would indicate that Iran has gotten something. In fact, they've got some of the toughest sanctions that they're going to be facing coming up in just a few months if they don't take advantage of these talks. I hope they do."

Saturday's talks with Iran involved the five permanent members of the United Nations Security Council -- the United States, France, Russia, China, and Britain -- as well as Germany, referred to as the P5+1.

The next set of talks was scheduled for May 23 in Baghdad.

Netanyahu said Iran should "take immediate steps to stop all enrichment, take out all enrichment material and dismantle the nuclear facility in Qom" and said the Islamic republic "must not have the opportunity to develop atomic bombs."

Iran insists that its nuclear program is for energy purposes only. U.N. and Western leaders suspect it of having military aims, including a possible nuclear weapon.

Last month, the International Atomic Energy Agency, the U.N. nuclear watchdog, noted what it called a sharp and troubling increase in Iran's uranium enrichment capabilities.

On state-run news agency IRNA, Iran described Saturday's talks in positive terms and said its right to a peaceful nuclear program was supported.

"Iran's top nuclear negotiator, Saeed Jalili, said after the Istanbul meeting that talking about suspending or halting uranium enrichment was an old issue now out-of-date," IRNA reported.

European Union foreign policy chief Catherine Ashton said after the talks, "We have agreed that the Non-Proliferation Treaty forms a key basis for what must be serious engagement to ensure all the obligations under the treaty are met by Iran while fully respecting Iran's right to the peaceful use of nuclear energy."


Microsoft announces three versions of Windows 8

ballmer_2105599b Brandon le Blanc, head of communications at Windows, announced the versions on the official Microsoft blog. He wrote: "We have worked to make it easier for customers to know what edition will work best for them." Windows 8 will come in three versions: Windows 8, for home PCs and laptops, Windows 8 Pro, for enthusiasts and professionals, and Windows RT, for devices running low-power Arm processors, such as tablet devices and lightweight ultrabooks.

Windows RT is the first version of Windows designed with tablets in mind, and indicates Microsoft's commitment to moving into touchscreen devices. It will come pre-installed on computers and tablets powered by Arm processors and will include a touchscreen-based version of Microsoft Office as standard. British company Arm own the licence for most of the processors used in tablets and mobiles, although Intel is also aiming to enter the space.

Windows 8 is the standard, consumer-based model which will be run on most new home computers, while Windows 8 Pro will include extra features such as file encyption, virtualisation of operating systems and domain management. The announcement of three editions indicates a simplified approach from Microsoft, which released five different versions of its previous operating system, Windows 7.

Le Blanc wrote: "Windows 8 has all the flexibility you need. You can use a touchscreen or a keyboard and mouse - and switch anytime. Its beautiful, fast and fluid design is perfect for a wide range of hardware."

Microsoft is keen to make an impression in mobile devices, having revamped its mobile phone operating system last year. Nokia and Dell are rumoured to be releasing Windows 8 tablets this year.

The telegraph

US Military: Official's Statement 'Mischaracterized' by S. Korean Media

ap_us_locklear_south_korea_kim_17apr12_480 U.S. military officials say South Korean media took out of context a comment made Tuesday at a Seoul news conference by the new head of the U.S. Pacific Command, Navy Admiral Samuel Locklear III.

“Numerous reports following the event have mischaracterized his comments regarding U.S. response to possible future provocation of a nuclear test by North Korea, speculating that the U.S. is considering specific responses,” according to a release issued by the U.S. military in South Korea.

During a news conference with South Korean reporters from the Ministry of National Defense press corps, Locklear was asked whether the United States would again consider “surgical strikes” against North Korea if it is evident the country is preparing to conduct a third nuclear test. Such strikes reportedly were considered at the time of a nuclear test in 1994.

The release quotes Locklear as saying, “I don't think it would be appropriate to comment on how we would pursue any further military operations, but I can tell you that, with
the alliance, that we are continually looking at all options."

Shortly after the briefing, South Korean media - including the widely viewed cable network YTN, the semi-official Yonhap news agency and newspaper web sites - quoted the four-star admiral differently.

“If North Korea tries a third nuclear test, we'll consider all possible measures, including precision strikes on North Korea's nuclear test site,” was how MBN television reported what Locklear said.

Other South Korean media also said the head of the U.S. Pacific Command had indicated surgical or precision strikes are an option.

Senior analyst Daniel Pinkston of the International Crisis Group expresses concern such misquotes give North Korea a pretext for military strikes. The misquotes “play right into their narrative,” he said.

There was no immediate reaction from North Korea, which typically takes two or more days to react to comments about the country by South Korean or U.S. officials.

Pinkston, based in Seoul, predicts Pyongyang, through its official news agency, will certainly react and likely blast Locklear as a “warmonger” or use similar belligerent language typical of its frequent verbal attacks on the United States and South Korea.

Locklear is making his first visit to South Korea since assuming command of USPACOM on March 9. His comment about North Korea comes four days after that country's defiance of U.N. resolutions with a failed space launch.

USPACOM is one of six unified combatant commands of the United States armed forces and its area of responsibility encompasses about half of the Earth's surface.

International news organizations had requested to attend the admiral's briefing at the Combined Forces Command at the Yongsan U.S. Army Garrison, but received no response from USPACOM explaining why they were excluded.

The Seoul Foreign Correspondents' Club, which represents more than 100 international news organizations, had also requested that a representative pool of international reporters attend the news conference, coming as it did at a critical time on the Korean peninsula.

The U.S. military-affiliated American Forces Network and Stars and Strips newspaper did have reporters present at the briefing, but made no reference to the controversial quote.

Monday, the United Nations Security Council “strongly condemned” the launch and ordered tightened sanctions on the reclusive and impoverished country.

The council said the launch of the rocket, which disintegrated over the Yellow Sea shortly after blast off, was a "serious violation" of U.N. resolutions 1718 and 1874.

South Korea and the United States contend North Korea was attempting to test fire a Taepodong-2 ballistic missile.

Locklear called North Korea's launch “a fairly catastrophic failure” that caused him to “question their competency in advanced missile technology,” according to Stars and Stripes.

It was the third failed launch by North Korea and particularly embarrassing because the reclusive country had allowed foreign reporters to tour the new Sohae launch site just days before the launch.

North Korea's two previous attempted launches were soon followed by nuclear tests, which led to sanctions being imposed on Pyongyang. Japanese media quote diplomatic sources saying North Korea has rescinded an invitation for International Atomic Energy Agency inspectors to visit its nuclear facilities. The reports say the action was taken in retaliation for a U.S. decision to withhold food aid because of the attempted rocket launch.

South Korean government sources last week distributed to international news organizations satellite imagery taken April 1 indicating fresh tunnels being dug near the town of Punngye-ri, where North Korea carried out its two previous nuclear tests in 2006 and 2009.

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