Bankrupt Banker

Queen strips disgraced Fred the Shred of his knighthood for biggest corporate disaster in British history

2012-01-31T17:19:00.001Z

Disgraced former RBS boss Fred Goodwin was told this afternoon that his knighthood is being removed by order of the Queen. The unprecedented step was taken on the recommendation of a secretive Whitehall body which is responsible for ensuring the honours system does not fall into disrepute. The forfeiture committee, made up of senior civil servants and Government lawyers, met to consider the case after the Daily Mail highlighted growing cross-party pressure for Mr Goodwin’s knighthood to be rescinded. Mr Goodwin was telephoned by Sir Bob Kerslake, head of the home civil service, at 3pm to be given the shattering news. There is no right to appeal. It is a humiliation for the former head of the Royal Bank of Scotland, who has never spoken publicly about his role in the biggest corporate disaster in British history which cost the taxpayer £45bn, and whose lawyers succeeded in getting some direct criticism of him removed from an official report into the collapse of RBS. Honours are very rarely revoked, and it took years of campaigning for hated Zimbabwean dictator Robert Mugabe to lose his knighthood. The most recent high profile case was that of Jean Else, a Manchester superhead who was made a Dame on the recommendation of Labour but was later accused of mismanagement and nepotism at her school. She was stripped of her damehood after a ruling by the forfeiture committee.

Survey reveals expat banking fears

2012-01-26T22:44:00.001Z

The Expat Banking Poll was sponsored by Lloyds TSB International and conducted by expat website Just Landed. Expats in Spain were found to have the most problems with banking abroad. Almost two-thirds of those polled – 64 per cent – said that they do not trust local banks at all. Some of the most common problems cited by those who distrust banks abroad include unfair charges, trouble with the language barrier and money that was deducted from their account without any explanation. Briton Graham Hunt, who runs a Spanish property website and has written some hard-hitting blogs on banking in Spain, said: "Two years ago, there was a lot more trust in Spanish banks. "But the past couple of years have seen new charges for cards, account maintenance, transfer fees... this put people into the red in unused accounts, and they were then given an additional overdrawn charge. As a result, trust disappeared." Spain is happiest expat destination 19 Jan 2012 He also claims bank charges have increased "dramatically" recently and that lack of clear communication is the major problem for expats not speaking Spanish, and banks not employing people with language skills. "However my experience is that if you have a good relationship with the bank manager then any charges on the account can usually be got back," Mr Hunt said. "You just threaten to take your business elsewhere." Ali Meehan, who runs the Costa Women community network, said however there were many reasons expats wanted to use Spanish banking services. ""Many expats bank with Spanish financial institutions because they have mortgage products or loans locally," she said. "Some banks also offer special deals if you have your UK pension paid direct to Spain." More than 11,800 expats in total were surveyed for the Lloyds TSB International report. More than half of those, 59 per cent, said that they do trust their banks abroad, while only 22 per cent of respondents said they did not trust their banks "at all". In the United Arab Emirates, 74 per cent polled said they completely trust local banks; in Kuwait, this number is even higher, at 83 per cent. In Europe, German banks receive a similar score, with 68 per cent of expats polled completely trusting their services. UK banks – though facing many problems – are completely trusted by 52 per cent of respondents. And despite uncertainties over the British pound, 36 per cent of expatriates surveyed claim they would invest in sterling over any other currency. "While the poll demonstrated a lot of positivity, there are also some issues to be addressed," said Daniel Tschentscher, managing partner at Just Landed. "In the current climate, one would expect the level of trust to be lower, but that really doesn't seem to be the case at all."

Two men sought over bank robbery in Thornliebank

2012-01-26T18:26:00.001Z

Armed robbers have escaped with a four-figure sum of cash after holding up a bank in East Renfrewshire. Two men entered the Lloyds Bank in Main Street, Thornliebank, at about 10:35 on Thursday and threatened staff with what appeared to be a firearm. They later escaped on towards nearby Clova Street. No-one was injured. Both suspects are white males. One is about 5ft 6/7in-tall, while the other is over 6ft. They were wearing blue jeans and black jackets with hoods. Both men had their hoods up and tied tightly, covering most of their faces. Witness appeal Officers have been gathering CCTV images from the area and carrying out door-to-door enquiries. Det Con Gary Gallacher, of Strathclyde Police, said: "This is a busy area with lots of shops and flats around and at this time of the day there would have been lots of people milling around. "I would appeal to anyone who was in the area at the time to get in touch with us. "It may be that you saw the suspects run off or you may have noticed them prior to the robbery and thought they looked a little suspicious. "I would urge anyone with any information to please contact us as a matter of urgency."

Prominent Fla businessman guilty in $135M fraud; investors include Roman Catholic prep school

2012-01-26T11:44:00.001Z

A prominent businessman pleaded guilty Wednesday to fraud in a $135 million real estate scheme that fleeced hundreds of investors, including the Roman Catholic prep school he once attended. Gaston Cantens, 73, faces up to five years behind bars after pleading guilty to a single count of wire and mail fraud conspiracy. U.S. District Judge Kathleen Williams set sentencing for April 4. 0 Comments Weigh InCorrections? inShare Cantens also lured investors from Miami’s close-knit Cuban-American community, many of them elderly and some Roman Catholic priests. One victim, 80-year-old Eduardo Arango, said he lost about $800,000 investing with Cantens. He called the plea agreement “a sweet deal” because Cantens could have faced more charges and a longer prison sentence. “Most of the victims were people who are very aged. They lost whatever their resources were. They have suffered,” Arango said. Federal prosecutors said Cantens operated his company, Royal West Properties Inc., like a Ponzi scheme in which he paid older investors with money raised from newer ones. The company sold real estate investments in southwest Florida since 1993 but fell on hard times beginning in 2002 and was eventually forced into bankruptcy in 2009, according to court documents. Before it crashed, Royal West promised rates of return as high as 16 percent for investors who bought properties, which were marketed nationally on Spanish-language networks and through offices in Florida, New York, Colombia, Ecuador, Peru and Venezuela. One investor was the Belen Jesuit Preparatory School, which traces its roots to Cuba and from which Cantens graduated when it was still located in Havana. Fidel Castro also is an alumnus from those days. Eric Bustillo, chief of the SEC field office in Miami, called it a typical “affinity” scam in which the perpetrator uses a position of trust to prey on members of a specific group, in this case people connected to Belen and members of the larger Cuban-American community. “The Cantens used their prominent standing in a close-knit Cuban-American community to ruthlessly exploit vulnerable elderly investors who trusted them with their life savings,” Bustillo said. Cantens’ wife, 75-year-old Teresita Cantens, was named in a related U.S. Securities and Exchange Commission complaint but was not charged in the criminal case. Their son, former state Rep. Gaston I. Cantens, was also not implicated in the scheme, but he did co-sign documents allowing his father to remain free until sentencing on $100,000 bail. The younger Cantens is vice president at the Florida Crystals Corp. sugar company. In all, prosecutors said more than 150 investors lost about $47 million between 2003 and 2008. Of the total, investigators said Cantens and his wife skimmed about $20 million for other business ventures, to pay themselves more than $5 million in salaries and to pay children and grandchildren $1 million in “consulting fees” even though they did no work for Royal West. Cantens could be ordered to pay millions of dollars in restitution, but it’s doubtful that he has any means to do so. Royal West is being liquidated in the bankruptcy case and Cantens has been unable to pay a $5.3 million judgment in the SEC case. Arango said most investors have gotten only about 3 cents on the dollar from the bankruptcy proceeding. “The anguish, pain and suffering here has been immense,” he said.

Eating fried foods didn't hurt the hearts of Spaniards who follow a Mediterranean diet

2012-01-25T17:26:00.001Z

Eating fried foods didn't hurt the hearts of Spaniards who follow a Mediterranean diet, but the findings are too good to be true for Canadians, experts say.

A study in Wednesday's issue of the British Medical Journal suggests that frying foods in olive and sunflower oils is not associated with an increased risk of heart disease or premature death.

The Mediterranean diet favours fruits, vegetables, fish and whole grains. (iStock)

Prof. Pilar Guallar-Castillón from Autonomous University of Madrid and her co-authors surveyed the cooking methods of 40,757 adults aged 29 to 69 over an 11-year period. None of the participants had heart disease when the study began.

The people were asked in a typical week whether they ate food that was fried, battered, crumbed or sautéed. Their answers were divided into categories based on how much fried food they consumed.

During the follow-up period, there were 606 events linked to heart disease and 1,134 deaths.

"In Spain, a Mediterranean country where olive or sunflower oil is used for frying, the consumption of fried foods was not associated with coronary heart disease," the study's authors concluded.

The results directly apply only to Mediterranean countries where foods are fried in a similar way to Spain, the researchers noted.

Spanish participants more active

"When I look at the group of patients evaluated in Spain 10 years ago, they were much more active and fit than we are as Canadians nowadays," said Dr. Beth Abramson, a cardiologist at St. Michael’s Hospital in Toronto and a spokesperson for the Heart and Stroke Foundation of Canada.

And overall, people in the study ate a diet that was heart healthier than a typical North American diet.

The Mediterranean regime favours fruits, vegetables, fresh fish and whole grains.

"Occasionally having some fried food now and then isn't going to be harmful probably in the long run, but routinely frying food just adds to the chance that you're going to become overweight and out of shape," Abramson said.

The investigators only questioned participants about their diet at the start of the study, which isn't as reliable as checking in more often, Abramson said.

Floria Aghdamimehr, a wellness and life coach in Halifax who teaches people how to improve their diet, said the study confirms the value of using olive oil, though sparingly.

The nutritional content of foods changes when they are fried, Aghdamimehr said.

Nutritional changes with frying

"Most of the deep-fried foods people eat in North America … [uses] oil [that] is being recycled — reused several times,” Aghdamimehr said.

In Spain, fried food doesn't equal fast food from restaurants the way it often does in North America, the researchers said.

"Frying leads to an increase in trans fats and a decrease in unsaturated fats in foods," said Prof. Michael Leitzmann of the department of the epidemiology and preventive medicine at University of Regensburg in Germany in a journal editorial published with the Spanish study.

"Frying also increases the energy density of food and makes food more palatable, which may lead to the consumption of larger amounts."

The study was funded by the Fund for Health of Spain, five Spanish regional governments and the Catlan Institute of Oncology.

Underworld bankers Daniel Keenan and Andrew Barnett who laundered £17m of drug money are jailed

2012-01-25T16:58:00.001Z

Two underworld bankers who laundered more than £17million in drug money have been jailed for a total of 17 years. Daniel Keenan, 41, and Andrew Barnett, 45, used a stolen identity to clean up proceeds from a massive cocaine and heroin dealing operation by making currency exchanges They were caught out when police stopped Barnett with £500,000 in cash stuffed into a satchel. The pair were subsequently linked to Ian Kiernan, who was jailed for 20 years in 2001 for his key role in one of Britain's biggest-ever drug smuggling plots. Andrew Barnett (left) and Daniel Keenan (right) laundered the vast proceeds from a cocaine and heroin ring by making currency exchanges Barnett was stopped on 26 November 2009 near Marble Arch carrying a satchel found to contain 535,000 euros in 200 euro notes. He also had a receipt from a nearby money service bureau called Interchange. Convicted blackmailer Keenan contacted the police station a few days later, claiming he had asked Barnett to carry out the transaction, and was promptly arrested on suspicion of money laundering. Investigations revealed Keenan used a stolen identity to set up his Interchange account. Since opening the account in April 2008, Keenan and Barnett had made more than 300 transactions totaling more £17million. The money was generally brought in for exchange in £20 notes in large bags. The pair admitted money laundering but initially claimed the cash came from illicit gambling on horse racing. But after a two-day hearing at Southwark Crown Court they admitted knowing that that bundles of cash had come from drug deals. This is some of the money recovered by police from the pair, who were caught when officers stopped Barnett with £500,000 worth of currency stuffed into a satchel Jailing Keenan for 11 years and Barnett for six years, Judge Nicholas Loraine-Smith said the offences were 'hugely successful' and committed while Keenan was on license from prison. He told Keenan: 'Interchange was visited more than 400 times as you or others delivered cash amounting to a total of £17.5million. 'I accept that initially you thought you were being used to launder the proceeds of illegal gambling. 'But eventually the amounts of money involved must have made it clear that they could only come from the most serious of crimes - sale of Class A drugs. 'You yourself signed for 58 deliveries amounting to £12million while your assistant Mr Barnett signed for about £5 million. 'When police detained Mr Barnett you came up with a number of explanations and produced quantities of false paperwork to try and justify your business which included the use of other people's identities.' Daniel Keenan is here seen on CCTV counting out huge piles of banknotes. Keenan and Barnett laundered more than £17million in organised crime profits Barnett had claimed he was simply acting on behalf of Keenan and was paid £200 each time he want to the Interchange. Drug baron Ian Kiernan had been jailed for 20 years and banned from racecourses for 10 years after a Jockey Club investigation found he was involved in corruption in horseracing. The head of the syndicate, Brian Wright - dubbed The Milkman because he always delivered - was jailed for 30 years in 2007. The link between Kiernan, described as the drug ring's storeman, and the launderers was only discovered in December when police investigated Keenan's mobile phone records. Prosecutor Mark Fenhalls said: 'When Mr Keenan's phone records were looked at they showed that that most of the calls were made to his partner, then his mum, and then Kiernan, in that order.' He was found to have been in contact with Kiernan - who was on temporary licence from HMP Latchmere - on all but one of the days on which transactions of more than £400,000 were processed. Keenan was serving a five-year sentence for blackmail and consiring to defraud the clothes shop Monsoon when he met Kiernan in jail. The court heard Barnett visited Kiernan in prison in 2003, Mr Fenhalls said it was 'inconceivable that Barnett... did not know that he was assisting Keenan to launder the proceeds of cocaine dealing on a vast scale. 'No other explanation or inference sensibly arises from the available evidence.' Barnett, of Twickenham, Middlesex and Keenan, of Egham, Surrey, admitted converting criminal property. Keenan also admitted fraud by false representation, having a fake passport and possession of articles used in fraud, a fake bank card.

Drug smugglers and dealers to get law thaw in UK

2012-01-25T16:38:00.001Z

Drug smugglers and street dealers could avoid prison in the UK even if caught with heroin, cocaine or thousands of pounds worth of cannabis, under new guidelines on drug offenses published by the Sentencing Council for England and Wales on Tuesday. The new guidelines, to come into force next month, on February 27, were put out following a three-month public consultation. They cover importation, supply, production, permitting premises to be used for drug-related activities, and possession offences. "Drug offending has to be taken seriously. Drug abuse underlies a huge volume of acquisitive and violent crime, and dealing can blight communities. Offending and offenders vary widely, so we have developed this guideline to ensure there is effective guidance for sentencers and clear information for victims, witnesses and the public on how drug offenders are sentenced,” said Lord Justice Hughes, deputy chairman of the Sentencing Council, as quoted by the British media. According to the official website of the Council, the guidelines intend to distinguish the leading players in drug smuggling from those in subordinate roles such as drug mules, who may be coerced or misled into carrying drugs. It will mean that sentences are based on a court’s assessment of the offender’s role, and on the quantity of drugs involved, or the scale of the operation. Reports suggest offenders who play a “limited” role in gangs, including low-level dealers and so-called drug mules, who bring narcotics into the country, could now face community orders rather than jail sentences. This particular draft received major support during the consultations. Drug barons playing a leading role in large-scale offences such as smuggling and supply will continue to face long prison sentences, as will those who sell directly to the public, especially to children. Police have suggested that gang leaders would be able to escape jail by claiming that they were lesser members. “How can a court be expected to differentiate between the person who says, I am very low in the chain, and those high up?” questioned Peter Smyth, chairman of the Metropolitan Police Federation, as quoted by The Telegraph. “No matter how big a role I played, if I was in their shoes and arrested for drugs I would say I was a low-level player or forced into it. If they can see a loophole, then of course they will go through it.” Under the new guidelines, dealers caught with 6kg of cannabis, valued at thousands of US dollars, or 20 ecstasy tablets, could now avoid prison and receive a community sentence. Heroin and cocaine dealers deemed to have played only a “minimal” role and workers in small cannabis “farms” could also escape custody.

London hospitals write off 'over 90%' owed by foreign patients

2012-01-25T16:30:00.001Z

London hospitals have written off more than 90% of what they are owed by foreign patients not entitled to free NHS care, BBC London has learned. A Freedom of Information request showed Newham Hospital Trust wrote off 96% of what it had invoiced last year. Meanwhile, Basildon and Thurrock wrote off 97% of what it was owed, having previously recovered £68,061 out of £116,561 of its debt. In total, £7.6m was written off by 33 NHS trusts in the region, since 2009. Across the trusts, a total of £26m is owed by patients, of which £18.4m continues to be actively sought. However, hospital trusts said chasing the money was difficult if patients leave the UK. In a statement, Basildon and Thurrock said: "We scrupulously manage our finances and only write off debt after following the full debt collection process." Continue reading the main story Hospital variations in amount written off Newham Hospital wrote off £345,000 out of £358,000 Basildon and Thurrock wrote off £47,000 out of £48,500 Hillingdon hospital wrote off £335,000 out of £660,000 Luton and Dunstable wrote off 2,000 out of 85,000 South London wrote off £29,000 out of £481,000 All figures relate to 2010-11 All hospitals are required to recover money owed for treating these patients.

Redknapp 'threatened journalist'

2012-01-24T18:30:00.001Z

Football boss Harry Redknapp threatened to "sue the bollocks" off a journalist as he angrily denied taking bungs, a court has heard. The Tottenham Hotspur manager also said Milan Mandaric did not know what he was talking about in a 2009 telephone conversation with a News of the World reporter. In short extracts read out to a jury at Southwark Crown Court, Redknapp told Rob Beasley he had "the best accountants in England", claiming the Inland Revenue was fully aware of his dealings in Monaco. Mr Beasley spoke to Redknapp days after a telephone interview with Mandaric, the former Portsmouth FC chairman. When Mr Beasley described how Mandaric said the money sent to Redknapp's offshore accounts were investments outside football, the Spurs boss replied that Mandaric did not know what he was talking about, adding: "What is he talking about? It is a bonus." Explaining that the payments surrounded profit made on the sale of Peter Crouch from Portsmouth to Aston Villa, Redknapp added: "If it was something dodgy I would have gone over there and brought it back in a briefcase." When Beasley asked him whether he had paid any tax in the UK on it, Redknapp replied: "Haven't been asked to, Rob." Redknapp said "there ain't nothing crooked in it" as the telephone conversation went on, the court heard. "Don't say bung," Redknapp said. "It's nothing to do with a bung. It's paid by the chairman. How can it be a bung when the chairman of the football club paid me?" Redknapp and Mandaric deny two counts of cheating the public revenue when he was manager of Portsmouth Football Club.

Coryton refinery job fears after Petroplus go bankrupt

2012-01-24T18:29:00.001Z

Hundreds of jobs at the Coryton oil refinery in Essex are under threat after Swiss owner Petroplus said it would file for bankruptcy. The government has said the refinery, which supplies 20% of fuel for south-east England, is still operating. Administrator PricewaterhouseCoopers says the priority is for work at Coryton to continue without disruption. Other firms say they will still be able to supply fuel, but petrol retailers fear diesel prices will spike. Steven Pearson, on behalf of the administrator, said: "Our immediate priority is to continue to operate the Coryton refinery and the Teesside storage business without disruption while the financial position is clarified and restructuring options are explored." He said there were plans to have a number of discussions during the next few days over the future of the site in Coryton and the business in Teesside. Petroplus has said it will file for insolvency "as soon as possible" after failing to reach an agreement with creditors to extend deadlines for loan repayments.

Government debt passes £1 trillion

2012-01-24T18:28:00.001Z

The Government's debt has smashed through the £1 trillion barrier for the first time despite a bigger-than-expected fall in borrowing in December, figures have revealed. Public-sector borrowing, excluding financial interventions such as bank bailouts, fell £2.2 billion to £13.7 billion in the month. The City had expected it to fall to £14.9 billion. However, this was still enough to drive net debt to £1,003.9 billion, or 64.2% of GDP, up from £883 billion a year ago and its highest since records began in 1993. The bigger-than-expected fall in Government borrowing in the month was partly offset by a £1.3 billion increase in estimates for borrowing between April and November after local Government spending was revised upwards. Chancellor George Osborne is still on track to hit a target set by the Office for Budget Responsibility to reduce borrowing to £127 billion in the financial year despite fears that the UK is on the brink of recession. Central Government spending fell 0.9% as the Chancellor's austerity measures increasingly kick in while the tax haul rose with the help of last year's rise in VAT to 20% and the levy on banks' balance sheets. It is the fourth month in a row that borrowing has fallen on the previous year. There are fears, however, that the deficit reduction plans may be derailed, with many economists expecting another recession, which would hit tax revenues and increase spending on benefit payments. The Government borrowed a total of £103.3 billion between April and December, which is £11.3 billion lower than the previous year. A Treasury spokesman said on Tuesday: "That our national debt has reached more than £1 trillion simply shows the unsustainable level of spending this country built up over the past few years and shows why it is critical for our nation's future that we deal decisively with the deficit. "The figures show that we are making good progress, with borrowing over £11 billion lower than in the same period last year."

the government was deeply concerned about "money laundering, tax evasion, drug trafficking and crime" associated with Gibraltar

2012-01-24T10:37:00.001Z

The British Government came within a day of doing a controversial deal to share the sovereignty of Gibraltar with Spain and end 300 years of conflict over "The Rock".

Tony Blair and the then Foreign Secretary Jack Straw were both keen to do a deal over Gibraltar to "help our strategic relationship" with Spain, according to a new book.

But the then Europe minister Peter Hain reveals in his memoirs that secret talks with the Spanish government broke down at the last minute when the Spanish got "cold feet" over the agreement.

The book, Outside In, also reveals that the government was deeply concerned about "money laundering, tax evasion, drug trafficking and crime" associated with Gibraltar and had little sympathy for local politicians who insisted that the constitutional arrangements should not be altered.

"Jack's desire to do something about Gibraltar coincided with my gut instinct that it was ridiculous in the modern age for Britain to have a colony on the tip of Spain nearly 2,000 miles away," he writes.

He adds that Mr Blair told him: "It is really important to secure a better relationship with Spain and to remove it [Gibraltar] as an obstruction to our relations within Europe." He writes that Mr Blair was contemptuous of Gibraltarian attitudes and insistent upon making a deal that could move the whole situation forward.

Mr Hain says that despite the vehement opposition from Peter Caruana, the Chief Minister of Gibraltar, he went ahead with negotiations in Madrid. "To our astonishment, as the evening arrived, we realised we had a full agreement... and accepted co-sovereignty could not open the door to full Spanish sovereignty."

But talks then foundered and no further progress on the issue has been made subsequently.

How Tony Blair tried to give Gibraltar to Spain to curry favour with the European Union

2012-01-24T03:16:00.001Z

Peter Hain says the then-Prime Minister was “contemptuous” toward the desire of Gibraltar residents to remain under the British flag and told how close Britain came to losing the rocky territory to the Spanish in 2002. Mr Hain tells in his memoirs, published on Monday, how he wanted to work to “do something about Gibraltar”, which has been a British overseas territory since 1713, as soon as he became Europe minister in June 2001. This was based on a “gut instinct that it as ridiculous in the modern age for Britain to have a colony on the tip of Spain nearly 2,000 miles away”. His “African roots” made it easy for him to understand the strong feelings aroused by “a little bit of England trying eccentrically to cling on to Spain”. Mr Hain developed a plan that would see Britain and Spain share the island’s sovereignty, along with “maximum self-government for Gibraltarians”, with economic assistance from the European Union. The plan was “enthusiastically” backed by the then-Labour Prime Minister during a flight back from a meeting with Italian premier Silvio Berlusconi in February 2002. Mr Blair told him on the flight: “It is really important to get a better future for Gibraltar, to secure a better relationship with Spain and to remove it as an obstacle to our relations within Europe.” Mr Hain continues that Mr Blair “was contemptuous of Gibraltarian attitudes and insistent upon making a deal which could move the whole situation forward.” In the book, “Outside In”, Mr Hain admits that he became a “hate figure on the Rock, the target of angry posters and speeches, taking me back over 30 years to the time when I was stopping apartheid rugby and cricket tours”. He accuses residents of Gibraltar of having a “schizophrenic” attitude to their status, wanting a better relationship and new opportunities with Spain but fiercely opposing co-sovereignty. He says: “They remained rigidly wedded to their idea of Britishness in a totally artificial sense.” Mr Hain says that a deal was done with the Spanish Government on 18 April 2002 to allow the British to keep control of a naval base on the island, while the people of Gibraltar could hold a binding referendum. He says: “We shook hands not quiet believing our governments had managed to come together on Gibraltar for the first time in 300 years.” However the deal was short-lived and hours after agreeing it, the Madrid government had vetoed it. A week later Mr Hain was called into Downing Street to see the Prime Minister, who had just had a visit from angry pro-Gibraltar Labour MPs and who was, Mr Hain said, now “relieved” to have been “let off the hook” by the Spanish. Mr Blair told him: “We are not going to be able to strike a deal at this moment because the Spanish aren’t ready for it. Trying to reopen their historic claim is not on. “We should just park the agreement, allow things to settle down, allow opinion in Gibraltar to realise that co-sovereignty is the way we are going, and allow Spain to realise that this deal remains on the table.” Mr Hain says that he and Jack Straw, the-then foreign secretary, “tried to argue with him but to no avail”. Mr Straw went back to Gibraltar a few weeks later where “he was almost violently attacked by a baying mob”. This reinforced Mr Straw's view that Gibraltar should be run by Britain and Spain, and he made a Commons statement setting out that view as British policy in July 2002. A month after Mr Hain stood down as Europe minister in October 2002, a referendum was carried out, in which 98 per cent of Gibraltarians voted to remain under British rule. Mr Hain adds: “I don’t regret what we did or the personal flak that I took in ensuring that, at the very least, co-sovereignty will always remain part of the political architecture for Gibraltar. In time, I believe, serious thinking on the Rock will come to see it not as a threat but as a liberating opportunity.” Since 2006, Gibraltar has governed its own affairs, although defence and foreign relations matters, are Britain's responsibility. Last night a spokesman for Mr Blair said: "Tony Blair has never said or thought Gibraltar should be 'run by Spain'. Nor was he 'contemptuous' of it. It is correct he thought the issue should be carefully handled because of relations with Spain - an important ally - but that is all."

Bailout chiefs order banks to slash 2,500 workers

2012-01-23T09:27:00.001Z

THOUSANDS of jobs in the banks must be cut urgently, the country’s bailout team has warned the Government. State-owned banks are paying salaries to huge numbers of unnecessary workers, according to the officials keeping our finances in check. They told the Government that a massive clear-out of bank staff was needed sooner rather than later, to smooth the way for massive restructuring. Workers at bailed-out banks have been bracing themselves for close to 2,500 job cuts for almost a year. But progress has largely been frozen as the Government and trade unions battle to agree redundancy terms. Now, the Irish Independent has learned, the bailout team have told Taoiseach Enda Kenny and his Government that it is unhappy with the slow pace of progress. They have made it clear in no uncertain terms that they want progress before the next financial check-up in April. The team also warned that the failure to begin layoffs was delaying progress in the banks’ internal restructuring. Bailout officials left Ireland at the end of last week broadly satisfied with progress under the €70bn rescue package – but there are underlying concerns over the pace of banking reform. The European Central Bank’s mission head Klaus Masuch has also publicly alluded to their frustrations, stressing that the process of restructuring the banks was about more than simply selling assets. Sources close to the bailout team said they could “understand” the difficulties that had arisen, but insisted that it was “important to make progress”. British-owned Ulster Bank kicked off a year of expected job losses in the banking sector at the beginning of the month. It announced plans to cut 950 jobs from its Irish operations, with 600 to go in the Republic. But plans to cut jobs in bailed-out banks -- including 2,000 at AIB and 350 at Bank of Ireland -- have not progressed in recent months. Even the unions are resigned to the fact that job losses must happen soon -- but they want the best terms for their members. The Government is stalling as it is unwilling to offer outgoing bank staff terms that would be seen as too generous. It is keen to secure a "system wide" package that would work across the banking sector, including any job losses that might be triggered by merging Permanent TSB, which employs more than 1,000, with another institution. While the unions have been pushing for the banks to pay the "industry norm" of six weeks' salary plus two weeks' statutory, the Government has been pushing for a less generous package -- close to the three weeks' pay plus two weeks' statutory that was used for recent HSE cuts. "The Government has always stressed that any redundancy packages in the covered banks must be fair to the employees and also the taxpayer," the Department of Finance said. But bank workers' trade union, the IBOA, said that the Department of Finance was now holding up the inevitable job losses. "We share the troika's frustration at the total procrastination in terms of finalising this thing," IBOA chief Larry Broderick said. "We said to the troika, through (trade union umbrella group) ICTU, that this was something that had to be prioritised." Meanwhile, AIB has also told the union it cannot negotiate on its 2,000 job cuts because it has "no mandate" from the Department of Finance. A spokesman for the department declined to comment on the progress of the redundancy negotiations, pointing to the "sensitivities" of the situation. Sources insisted the issue was a "high priority item" and that negotiations were at an "advanced" stage. AIB announced its job cuts last April and had hoped to begin laying off workers in October. Instead, staff have spent almost a year in limbo and have still not even been told what areas the job cuts will come from. Bank of Ireland is planning to cut 350 jobs on top of the 400 it has already culled. The merger of the former Anglo Irish Bank and Irish Nationwide will also prompt job cuts. Anglo is close to cutting 120 jobs in Ireland and the bank's remaining staff will go over the course of its 10-year wind-down.

Costa tragedy: 'Get back on board, damn it!' T-shirts a hit

2012-01-22T19:40:00.001Z

A coast guard officer's "Get back on board damn it!" order to the fleeing captain of the capsized Costa Concordia liner is being printed on T-shirts by a company hoping to inspire Italians to rescue their country from economic crisis. Italians have made a hero of coast guard officer Gregorio De Falco for his angry exchange with skipper Francesco Schettino - who has been blamed for the accident and is now under house arrest accused of manslaughter, causing a shipwreck and abandoning ship. Stefano Ramponi, owner of the Lipsiasoft web agency that is producing the T-shirts and selling them on the Internet for 12.9 euros ($16.63), said they had become an instant hit both in Italy and abroad. "We have had a lot of requests from all over the world, from Brazil, Hong Kong, also from Germany and France, the UK. Everyone is asking us for it," he said. He said he had been criticised by some people for making money out of the January 13 disaster, in which 11 people died and 21 are still missing. But he hoped the slogan will become a rallying cry for all Italians to shoulder their responsibilities and work together to navigate through recession and get the euro zone's third largest economy back on course. "We liked this phrase a lot because it was said by Captain De Falco in an extremely difficult situation, it really impressed us," Ramponi said. "We wanted to... distribute it en-masse...particularly to all the people in Italy who don't concentrate on their jobs, who don't give their all and do harm to Italy in this time of crisis."

New Zealand police broke through electronic locks and cut their way into a mansion safe room to arrest the alleged kingpin of an international Internet copyright theft case

2012-01-21T07:55:00.001Z

New Zealand police broke through electronic locks and cut their way into a mansion safe room to arrest the alleged kingpin of an international Internet copyright theft case and seize millions of dollars worth of luxury cars, artwork and other goods. German national Kim Dotcom, also known as Kim Schmitz, was one of four men arrested on Friday, a day before his 38th birthday, in an investigation of the Megaupload.com website led by the U.S. Federal Bureau of Investigation. The group was accused of engaging in a scheme that took more than $500 million away from copyright holders and generated over $175 million in proceeds from subscriptions and advertising. A police official said on Saturday that dozens of officers, backed by helicopters, forced their way into the mansion, nestled in lush, rolling farmland, after Dotcom refused them entry, a scene more reminiscent of a James Bond movie than the usual policeman's lot in rural New Zealand. "Despite our staff clearly identifying themselves, Mr Dotcom retreated into the house and activated a number of electronic-locking mechanisms," said Detective Inspector Grant Wormald from the Organised & Financial Crime Agency New Zealand. Officers broke the locks and Dotcom barricaded himself into a safe room which officers had to cut their way through to gain access. "Once they gained entry into this room, they found Mr Dotcom near a firearm which had the appearance of a shortened shotgun," he said. "It was definitely not as simple as knocking at the front door." PINK CADILLAC Two firearms were seized and a 55-year-old New Zealand man has since been charged with illegal possession of a pistol. Computers and documents were also retrieved and more than NZ$10 million ($8 million) was seized from financial institutions. Television footage showed vehicles, including a pink Cadillac and a Rolls-Royce Phantom Drophead Coupe, being removed from the property. The house where Dotcom was arrested was one of the largest and most expensive in the country, worth around NZ$30 million. Located in hills northwest of New Zealand's largest city, the mansion is surrounded -- at suitably discreet distances -- by other substantial country homes and luxury lifestyle blocks complete with stables, swimming pools and tennis courts. Dotcom leased the property after being blocked from buying it last year by the government after failing to meet a "good character" test for migrants, although he was granted residency in 2010. Dotcom has previous convictions for hacking, insider trading and embezzlement from his time in Germany and Thailand, according immigration authorities, leading some opposition politicians to question why he was allowed to settle in the first place. Standing some 6'7" (2 metres) tall and reportedly weighing around 300 pounds (136 kg), Dotcom appeared to revel in his outlaw reputation. Personilized number plates on vehicles removed from the site read KIMCOM, HACKER, STONED, GUILTY, MAFIA, GOD and POLICE, according to the indictment. One video on YouTube shows him racing a Mercedes in the Gumball 3000 road rally and talking about bribing a Moroccan official. Another clip shows a 2011 New Year's Eve fireworks display over Auckland organized and paid for by Dotcom to celebrate his family being granted residency. The display was reported to have cost $500,000. PIRACY DEBATE The arrests were made as the debate over online piracy reaches fever pitch in Washington where Congress is trying to craft tougher legislation. Lawmakers stopped anti-piracy legislation on Friday, postponing a critical vote in a victory for Internet companies that staged a mass online protest against the fast-moving bills. The movie and music industries want Congress to crack down on Internet piracy and content theft, but major Internet companies like Google and Facebook have complained that current drafts of the legislation would lead to censorship. Kimand the other men made a brief court appearance on Friday will appear again on Monday. They face extradition and a trial in the United States. On Friday, in a show of support, hackers attacked and temporarily disabled a number of government and entertainment company websites, including the U.S. Justice Department's website. U.S. Justice Department officials have said that the estimate of $500 million in economic harm to copyright holders cited in a U.S. indictment was at the low end. The allegations included copyright infringement as well as conspiracy to commit copyright infringement, conspiracy to commit money laundering and conspiracy to commit racketeering. Two of the offences carry a maximum penalty of 20 years. The companies charged, Megaupload Ltd and Vestor Ltd, were both registered in Hong Kong and owned either in large part or solely by Dotcom. Some 100 officers raided four premises in Hong Kong on Friday including luxury hotel rooms, seizing computer equipment and freezing HK$330 million ($42.5 million) in financial assets, according to Hong Kong Customs. Megaupload has boasted of having more than 150 million registered users and 50 million daily visitors, according to the indictment. At one point, it was estimated to be the 13th most frequently visited website on the Internet. Users could upload material to the company's sites which then would create a link that could be distributed. The sites, which included video, music and pornography, did not provide search capabilities but rather relied on others to publish the links, the U.S. indictment said

Spanish Bad Loans Reach 7.51% In Nov; Deposits Drop

2012-01-21T07:52:00.001Z

The bad debt ratio of Spain's banking sector rose for the eight consecutive month in November to a new 17-year high, while deposits and loans shrunk further as the country edged towards a double-dip recession, data released Wednesday by the Bank of Spain showed. According to the data, 7.51% of loans held by banks were more than three months overdue for repayment in November, up from 7.42% in October. It is the highest percentage recorded since November 1994, and contrasts with bad debt levels below 1% of all loans in the years prior to the country's 2008 property bust. High unemployment, falling house prices and the sluggish economy likely will cause bad loans to continue to rise throughout this year and into 2013, said Goncalo Guarda Garcia, an analyst at Portuguese brokerage BPI. Lenders have been struggling to cope with steep losses on loans extended to the real-estate and construction sector, as the country tackles the deepest economic downturn in decades and an escalating debt crisis in the euro zone that has sharply reduced their access to financial markets. Guarda Garcia also said he expects loans to shrink at a faster pace this year as lenders reduce risk on their balance sheets. The November data showed banks had cut lending by 2.54% on the year, while the pool of deposits shrunk at an annual rate of 2.14%. The new Spanish government said earlier this month that after stalling in the third quarter, the economy had contracted in the fourth quarter of 2011 and is set to shrink further this quarter. Overall, EUR134.1 billion in loans were non-performing in November, up from EUR131.9 billion in October and EUR104.7 billion a year earlier. Banks had set aside a total of EUR73.82 billion to cover these soured loans at the end of November, up from EUR62.2 billion a year earlier. The amount of provisioning will likely rise sharply next month, as many of the country's lenders are expected to set aside a large chunk of their earnings to cover loan losses. As of November, Spain's banks had total of EUR1.79 trillion in loans outstanding, down from EUR1.84 trillion a year earlier.

Judge orders search of News of the World executives' computers in bid to find out if key hacking evidence was destroyed

2012-01-20T12:12:00.001Z

A judge overseeing the settling of hacking claims by victims of News of the World has ordered executives' computers be searched. Senior managers at News Group Newspapers – the parent company of the News of the World – were criticised by Mr Justice Vos, the judge supervising the settlements. Jeremy Reed, who is acting on behalf of several victims of phone hacking, said that when the News of The World moved offices in 2010, computers used by journalists accused of hacking were destroyed. He disparaged their reaction to a request in 2010 from lawyers for the actress Sienna Miller to retain emails that might be relevant to a phone hacking claim. Within three days, the judge said, ‘a carefully conceived plan to delete emails was put into effect at the behest of senior management’. He said the evidence raised ‘compelling questions about whether you concealed, told lies, actively tried to get off scot free’. He ordered the company to search a number of computers, adding that there was evidence that management had a ‘startling approach to the email record’.

Spain is happiest expat destination

2012-01-20T12:04:00.001Z

The research, from Lloyds TSB International, asked over 1,000 British citizens in the 10 most popular expat destinations to rate their new homes on factors ranging from quality of life to cost of living. Overall, 68 per cent of those interviewed said they were happier in their adopted country than in Britain, rising to 75.9 per cent in Spain. Other countries which fared well on the happiness index were Canada and Germany, where 72.2 per cent and 71.4 per said they were happier respectively. Interestingly, those countries where expats said they had the highest quality of life or best financial prospects were not necessarily where expats were most happy. New Zealand, for example, offered the highest quality of life according to the survey, but was ranked bottom for contentment, while the country where most expats said they were better off – the UAE – was only the fourth happiest place. John Kramer, a British expat who lives in Andalucia, said that he was unsurprised by the fact most expats were happier in Spain, because its "outdoor lifestyle, traditional family values, and positive outlook on life” made it a very easy place to enjoy.

News International faces FBI phone hacking probe

2012-01-20T09:36:00.001Z

Yesterday the company paid the actor £130,000 after accepting that it had published stories gleaned from hacking his phone. One of the articles News International accepted had come from phone hacking was a 2003 story in the News of the World which referred to telephone calls Law’s assistant Ben Jackson had made to him when he arrived at an airport. It is believed the airport was John F. Kennedy airport in New York. News International’s admission has led the US authorities to investigate whether a crime took place on American soil. It is thought the possibility that Law’s phone was using an American network at the time could lead to offences having been committed under US law.

Warren Buffett increases stake in Tesco

2012-01-19T20:17:00.001Z

The US investor Warren Buffett has given a boost to the embattled Tesco chief executive, Phil Clarke, by increasing his stake in the supermarket chain, which last week issued a shock profit warning. Buffett's Berkshire Hathaway investment firm increased its stake in the world's third biggest retailer from 3.21% to 5.08%, a regulatory filing showed on Thursday . Dated 13 January, the filing came a day after Tesco warned that trading profit for 2012/13 would be flat as the firm stepped up investment in its home market following its worst underlying Christmas sales performance for decades. Tesco shares fell by as much as 19% on 12 January and hit a 34-month low of 311p on Monday. The shares were up 6p to 327p at the close on Thursday. Share dealings by Buffet – nicknamed the Sage of Omaha after a string of investments made him among the world's three richest people – are closely watched in financial markets. After buying into Tesco in 2006, he has gradually increased his holding. Last year he caused a stir by saying the companyfirm should "look hard" at its loss-making Fresh & Easy chain in the US, although he said he remained supportive of the business. On a trip to Japan in November, he said the global financial crisis was creating opportunities in European equities, adding: "We bought Tesco earlier. I can think of a dozen euro stocks that are attractive … there are stocks I like and wonderful businesses. I could buy more Tesco if the price came down." Tesco shares had dropped earlier on Thursday after a negative note from Goldman Sachs, which warned that there would be further pressure on the sector's profitability.

Carnival says caring for cruise disaster victims

2012-01-19T03:01:00.001Z

Carnival Corp & plc, whose luxury liner Costa Concordia capsized off the coast of Italy last week, said it was providing lodging, refunds and other support to people affected by the accident, even as some public relations executives criticized the company's handling of the situation. "I give my personal assurance that we will take care of each and every one of our guests, crew and their families affected by this tragic event," Carnival Chief Executive Micky Arison said in a statement late on Wednesday - five days after the incident that left 11 people dead and 22 missing. Costa Cruise Lines, a unit of Carnival and operator of the ship, has been arranging lodging and transportation for passengers and crew members to return home, and has offered assistance and counseling as needed. It has also begun refunding passengers their cruise fares and all costs incurred while on board. The company also said it was contacting every passenger and crew member or their family and will be addressing personal possessions lost on board. Public relations experts have chastised Carnival for being slow to address the disaster and vague about its response and efforts to prevent similar incidents in the future. On a scale of one to 10, with 10 being "outstanding," Carnival's public relations strategy in the immediate wake of the disaster gets a four, said Allyson Stewart-Allen, director of International Marketing Partners, a consulting firm. "It wasn't quick, it wasn't specific, it wasn't reassuring," Stewart-Allen said, noting that Carnival's first statement, released on Saturday nearly 24 hours after the Costa Concordia liner struck rock causing it to capsize, did not quote a specific person. Subsequent statements on Monday, Tuesday and Wednesday quoted Arison, who has been in continuous contact with executives in Italy, but has not flown there himself. Arison, who also owns the Miami Heat NBA team, has written six messages on Twitter mentioning the tragedy, but Evan Nierman, founder of Florida public relations firm Red Banyan Group said that was not enough. "If he's the point person, I would want a constant flow of information - Twitter, Facebook, talking to reporters, letting them know what's going on. I would have him out there in a real way. He needs to be in front of cameras, he needs to be meeting with people, he needs to show that he's in charge of the situation." A statement on Wednesday from Costa Cruises, owned by Carnival, said the Italian company commissioned salvage experts in the hours after the accident to draw up a plan to recover the fuel reserves from the ship before they leak into the water.

Doctors may strike over cuts to their pension pots

2012-01-18T23:41:00.001Z

The British Medical Association, which represents 130,000 doctors and medical students, said two thirds of its members support industrial action which could cripple hospitals and GP surgeries throughout the country. The association rejected cuts to doctor’s pensions despite warning that some hospitals are so financially stretched that patient safety can no longer be guaranteed and that “accidents will happen”. Senior government figures said the reductions in their pensions were “modest” and in line with other public sector staff. A government source said: “It seems a bit rich for doctors to be complaining about cuts and patient care when they leave the NHS as millionaires.” Over the past decade, the average consultant has seen their pay rise by 54 per cent, with less qualified doctors enjoying a rise of 30 per cent. Their pay has recently been frozen, with the average GP now earning about £110,000.

Meat causes cancer. It’s been said so many times that you’d have to be an idiot not to believe it, right?

2012-01-18T17:32:00.001Z

The latest confirmation of this apparent common sense was a report published last week in the British Journal of Cancer Research. The authors, from the Karolinska Institute in Sweden, brought together 11 studies - published between 1993 and 2011 - that assessed the risk of pancreatic cancer from eating red meat and ‘processed’ meat. From this meta-analysis, the authors found that red meat increased the risk of pancreatic cancer for men, but not for women, and that the risk of pancreatic cancer rose by 19 per cent for every 50 grams of processed meat consumed. The simple claim that ‘processed meat causes cancer’ was widely reported after the study was published. However, it would be wrong to assume that such claims about risk are all they are cracked up to be. First, there is the question of whether the association claimed is real. Epidemiological studies like the ones brought together by the Swedish researchers will typically find out what participants ate for a day or a week using a questionnaire or a food diary. Then, the participants will be checked some years later to see who has succumbed to the disease in question. Did people correctly remember what they ate? And did they accurately recall how much they consumed? It would be unusual for anyone to have weighed the food, so the amounts could be inaccurate, too. What else did the participants eat? Did they change their eating habits in subsequent months or years? And what the hell is ‘processed’ meat, anyway? Unless you slaughter your own animals, your meat will have been processed to one degree or another. At what point does meat that has been processed become ‘processed meat’? There are so many ways in which the crude tools of epidemiology could screw up the result of studies like this that it is normal for fairly small risks - like the 19 per cent increase in this case - to be treated with a massive pinch of salt. The authors of this study even note: ‘All studies controlled for age and smoking, but only a few studies adjusted for other potential confounders such as body mass index and history of diabetes.’ Secondly, even if the association is not simply a product of the way in which the study was designed, we still don’t know if correlation equals causation. The best we could say is that the kind of people who like to eat processed meat are a bit more likely to get pancreatic cancer than the kind of people who don’t eat meat at all. You don’t need to be a rocket scientist - or a professor of epidemiology - to realise that vegetarians live, on average, quite different lifestyles from people who tuck into burgers and kebabs. Thirdly, even if this study has somehow managed to be supremely accurate and found a real risk, we have to ask if such an increase is of any practical significance in the real world. Cancer Research UK gives the following statistics on pancreatic cancer: for the UK, the age-standardised rate is 9.3 cases per 100,000 people per year - roughly one person in every 10,000. So even those people who really like processed meat and eat 150g per day would have about a 50 per cent increased risk - or about 15 cases per 100,000. To express that in terms of odds, instead of it being 10,000-to-one that these kebab-and-burger lovers develop pancreatic cancer in any particular year, it would be 6,667-to-one. So, to sum up: the association between processed meat and pancreatic cancer is so weak it might well be a mirage; the increased risk might not be caused by the processed meat itself; and even if it is, the risk is so low that it’s really not worth bothering about. Yet still we are advised to consider cutting down on our red meat and processed meat consumption. Life is, frankly, too short to miss out on such tasty foods on the slim chance that we might lose a few years of life in old age. Still, that won’t stop people being harangued anyway. A particularly unsavoury example of this appeared in Sunday’s Observer. Illiberal Liberal of the Week contender, columnist Barbara Ellen, declared that the bovine attitude of recent governments towards smokers and drinkers should apply to meat-eaters, too. Now that a precedent has been set - that people should be harangued for doing things that are legal but disapproved of by Those Who Know Better - Ellen is simply following through this logic by attacking those who like sausages, bacon and pies. Here’s the argument: people (like smokers and drinkers) who deliberately do things that are bad for them, despite being told time and again that they should not, are now lectured, restricted and even have their basic rights taken away; eating meat - and particularly ‘processed’ meat - increases your risk of getting cancer and is bad for you; therefore, people who eat meat should now be lectured, restricted and even have their basic rights taken away. This is a shocking but perfectly logical argument, if you accept the petty-authoritarian mindset that flourished under New Labour and is still going strong under the Lib-Con coalition (and, indeed, around the world). Given the tone of Ellen’s piece, you might hope that she would end by saying: ‘Of course, telling people not to eat meat is stupid - every bit as stupid as telling them not to drink or smoke or telling them not to be fat. The government should just butt out.’ Sadly, there is no note of irony anywhere. She really does want to stick it to meat-eaters. So, of the supposed risks of eating meat, Ellen declares: ‘This information has popped up regularly for years in all forms of popular media. Indeed, in this era of info overload, if you’ve never come across the “burgers and kebabs are unhealthy” revelation, one would have to presume you’ve been lying in a coma. With this in mind, isn’t it time to ask, exactly how thick, how hard to educate, are meat-eaters and why aren’t they held accountable in the same way everyone else is?’ She continues: ‘Sympathy is in short supply these days. You can’t move for people being blamed for their own miserable situations: smokers who “burden” the NHS; alcoholics who don’t “deserve” liver transplants; obese people who “should” pay more for flights. Even those poor terrified women with the faulty breast implants are said to have “brought it on themselves”. By this logic, people who’ve been regularly informed of the dangers of meat, particularly the cheap processed variety, but who continue to wolf it down should be held just as accountable.’ Now that the precedent has been set for the government to lambast those who engage in unapproved habits, it’s open season on any habit that a campaigner or columnist disapproves of. Ban it! Tax it! Make them get a prescription for it! Deny them medical care! Ellen’s article is objectionable but it only follows the remorseless logic of so many others. There is another lesson from the meat-and-cancer story: at a time when all sorts of dubious claims are made based on junk science and dodgy statistics, only some panics get wide publicity; others just pop up and disappear again in a matter of hours. The difference is that some play to an existing political or media agenda and some do not. The idea that meat causes cancer appeals to health busybodies, politicians scrabbling around for a sense of purpose, vegetarians who can’t win a moral argument about animal rights, and environmentalists who have failed to convince us that increasing the ‘human footprint’ - by wanting to eat more meat, for example - is killing the planet. It’s not quite possessed of the same force as religious fervour - do the ‘right thing’ or live in agony for eternity - but the idea that if you do something naughty like enjoy bacon then you might die in agony before your time, is the best that many such claims-makers have got going for them right now. The only proper response to this junkscience-based illiberalism is to be extremely sceptical of any such claims and to defend everyone’s right to indulge in these petty vices.

Tax adviser guilty of fraud scheme

2012-01-16T06:09:00.001Z

A professional tax adviser from Bedfordshire has been convicted of trying to defraud honest taxpayers of £70 million, HM Revenue & Customs (HMRC) said. David Perrin spent his cut of the stolen cash on expensive second homes, exotic holidays, works of art and luxury cars, a spokeswoman said. The 46-year-old, of Leagrave, Luton, Bedfordshire, was found guilty at Blackfriars Crown Court and will be sentenced next month, she added. Perrin, deputy managing director at Vantis Tax Ltd, devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity, she said. The scheme allowed him to pocket more than £2 million in fees from unsuspecting clients. He used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies he had set up, the spokeswoman said. He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price. The share owners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70 million tax relief on a total of £213 million of income and company profits. This was based on the shares being worth up to £1 each, rather than the pennies they were originally bought for. Perrin also used the bogus scheme to claim money back, the spokeswoman said. The scheme proved so popular that Vantis employees performed a smug celebratory song at their annual conference, to the tune of I will Survive, she said. It included the verse: "They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me." Jim Graham, HMRC criminal investigator, said: "With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law. "This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings." Perrin was charged with cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities. He will be sentenced on February 9 and confiscation proceedings are under way, the spokeswoman said.

Top former art dealer faces 87 charges after fraud probe

2012-01-16T06:04:00.001Z

One of Australia's former leading art dealers, Ronald Coles, faces up to 10 years in jail after being charged today with 87 offences relating to an alleged multimillion-dollar investment art fraud scheme. Mr Coles, 64, was ordered to appear at Gosford police station at 10am today. Fraud Squad detectives formally charged him following an "extremely protracted and legally intricate" two-year investigation into his business affairs. Under the Crimes Act, Mr Coles was charged with 77 counts of "larceny as a bailee" and a further 10 counts of "director/officer cheat or defraud". For more than 30 years, Mr Coles specialised in fine art by some of Australia's most celebrated artists, including Sir Arthur Streeton, Eugene von Guerard, Brett Whiteley and Norman Lyndsay. Advertising on national radio and television, he offered clients an opportunity to boost their life savings through the purchase of investment art, which he bought and sold on their behalf, using their superannuation funds. NSW Police launched Strike Force Glasson in January 2009 after a Fairfax investigation unearthed dozens of investors who were missing millions of dollars in lost art and money, all allegedly retained by Mr Coles. Today's police charges relate to more than $8 million in financial loss to a total of 43 clients nationwide. Mr Coles failed to make conditional bail of $50,000. It is understood he offered a car and paintings as surety but they were refused. He is due to appear at Gosford Local Court shortly.

Russian ship suspected of carrying munitions to Syria appears near Turkish port

2012-01-14T17:32:00.001Z

Authorities say a Russian ship suspected of delivering weapons to Syria has anchored off Turkey’s coast. A Foreign Ministry official said Turkish coast guard and customs officials would board the Chariot on Saturday before allowing it to dock at the port of Iskenderun. The official spoke on condition of anonymity in line with government rules. 0 Comments Weigh InCorrections? inShare The ship had made an unscheduled stop in Cyprus, technically violating an EU embargo on arms shipments to Syria. Cypriot authorities allowed it to leave Wednesday after the ship’s owners said it would not head for Syria. Turkey, citing navy intelligence, said the ship nevertheless made its way to the Syrian port of Tartus after leaving Cyprus. U.S. officials said Friday they had expressed concerns to both Russia and Cyprus.

Five men have been arrested on suspicion of fraudulent transactions from accounts held at Bristol-based stockbroker Rowan Dartington

2012-01-12T12:54:00.001Z

The arrests have been confirmed by Avon and Somerset Constabulary, which said that the men aged 45, 36, 49, 57 and 23 have all been bailed pending further enquiries but not charged.

The arrests are in connection with high value fraudulent transactions that saw money leave accounts held at Rowan Dartington. The events are understood to have taken place prior to the management buyout headed by current chief Graham Coxell (pictured), who is not one of the five arrested, in February of last year.

A spokeswoman for Avon and Somerset police said the investigation expanded beyond the Bristol area, with the Cumbria police force also involved. She was unable to confirm if any of the five suspects were former Rowan Dartington employees.

She stressed that Rowan Dartington was the victim in the investigation rather than a suspect and ‘substantial’ amounts of money were involved.

The FSA declined to comment and said it was unable to confirm or deny whether Rowan Dartington was the subject of an investigation by the regulator.

In a separate incident, Rowan Dartington was previously fined £511,000 by the FSA in June 2010 for failing to protect and properly segregate client accounts over a two-year period, following a settlement system failure dating back to 2007. This caused the firm’s back office to be saddled with more than 150,000 unreconciled trades and eventually led to a £1.4 million black hole in the stockbroker’s accounts.

Since Coxell took over the business in February last year, he has sought to position the business to benefit from the retail distribution review and announced plans to launch a platform. He has also sought to rebuild the investment management team with the hires of Ashcourt Rowan’s head of collective research Tim Cockerill and Oliver Cowell from Redmayne-Bentley.

Rowan Dartington declined to comment.

RBS to cut 3,500 jobs in investment bank shake-up

2012-01-12T10:04:00.001Z

The Royal Bank of Scotland (RBS) has said it is planning to cut 3,500 jobs, with most of them to happen this year. The cuts are part of a reorganisation and shrinkage of its investment bank. The losses, which will be split between its UK and international offices, come on top of 2,000 cuts announced earlier. Its "wholesale banking" business, which provides services to large clients including investment banking services, will be split into separate "markets" and "international banking" divisions. The markets division - which comprises RBS' main trading activities - will focus on the bank's traditional strengths of debt, currency and money markets, the bank said in its statement. The wholesale banking division will provide services for the bank's biggest clients. These will include corporate advisory services transferred from its investment bank - such as helping major companies borrow money by issuing bonds - as well as cash management and payments services. The bank has already shed some 30,000 employees over the last two years, 22,000 of them in the UK. "It is a disgrace that while on a daily basis, stories are emerging about the massive bonuses at the top of the bank, increasing numbers of jobs are being cut from amongst the hard working staff," said David Fleming of the Unite union. Continue reading the main story “ Start Quote For a bank that has shed 30,000 jobs over the past couple of years, a further 3,500 departures may not seem massive” Robert Peston Business editor, BBC News Read Robert's blog Markets took the statement well, although many of the details had been flagged up in advance. RBS's share price rose 6.8% in morning trading, outperforming other banks and other large companies on the FTSE 100 index. Cutting back The bank said that it planned to close or sell off other business lines, such as those dealing with shares and stock markets, as well as its business advising companies on mergers and acquisitions. It is also looking to dispose of its corporate brokerage, Hoare Govett. These business lines were ones that had been added or expanded only in recent years under the leadership of former chief executive Sir Fred Goodwin. Continue reading the main story Royal Bank of Scotland Group RBS also said in its statement that the size of the balance sheet - the total loans and investments - of its former investment banking division would be reduced by more than a quarter, from £420bn to £300bn, over three years. This will enable it to cut its borrowing from wholesale money markets - which evaporated during the 2008 financial crisis, threatening the bank's collapse - by £75bn. "The overall aim is to improve profits and reduce risks," says the BBC's business editor, Robert Peston. "Which matters to most of us, since taxpayers are sitting on losses of £26bn on the £45.5bn they invested in RBS to rescue it." However, he also notes that the business lines being disposed of were not the ones responsible for causing RBS its huge losses during and after the 2008 financial crisis. UK clients RBS said the restructuring was also designed to prepare the bank for new UK regulatory requirements for banks to ring-fence their core UK operations from their riskier investment banking activities. Continue reading the main story Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms: Investment bank Investment bank Investment banks provide financial services for governments, companies or extremely rich individuals. They differ from commercial banks where you have your savings or your mortgage. Traditionally investment banks provided underwriting, and financial advice on mergers and acquisitions, and how to raise money in the financial markets. The term is also commonly used to describe the more risky activities typically undertaken by such firms, including trading directly in financial markets for their own account. Glossary in full The bank's dealings with British small and medium-sized companies will accordingly be transferred away from the new international banking division, and handled via its UK banks. There was no mention of any specific downscaling of its international operations. However, there has been speculation that its operations in the Irish Republic - including Ulster Bank, which RBS bought in 2000 - and in Australia may be affected Chancellor George Osborne announced the change in strategy at the bank in December 2011. "Investment banking will continue to support RBS's corporate lending business but RBS will make further significant reductions in the investment bank, scaling back riskier activities that are heavy users of capital or funding," Mr Osborne told Parliament in December. Mr Osborne's announcement came in the wake of a report into the bank by the Financial Services Authority in December 2011 which pointed to "errors of judgement and execution" by RBS management which led to its failure in 2008. The bank is now 82%-owned by the UK government after taxpayers injected £45.5bn of new capital into RBS.

Wonga stops targeting students after Twitter protests

2012-01-12T00:01:00.001Z

Short-term lender Wonga.com has announced that it is taking down information on student finances from its website following accusations it was encouraging undergraduates to take out one of its high-interest loans. Earlier Wonga.com came under severe criticism after its website claimed that its loans can offer students "a little more financial freedom and independence". The claim attracted outrage on Twitter. One user, Neale Gilhooley, tweeted: "A pox on loan company #Wonga offering students loans at a sharking 4,214pc APR." On the "student loans" section of its website, Wonga.com says these government-backed loans – despite their very low interest rates – could encourage people to borrow too much. Student loans currently attract interest at 1.5pc or 5.3pc, depending on when they were taken out. "It's pretty hard not to get carried away when you're a student on a budget and have the option to borrow large amounts of money with a student loan. But the problem with student loans is that they potentially encourage you to live beyond your means," the website says. "They're intended for living and education costs, but it's all too easy to fritter away the money once you have it. Wonga encourages responsible borrowing because, depending on your trust rating, you can borrow as little as £1 up to £1000, as long as you can repay it within a month."

Breast implant scandal: taxpayers face £100 million bill

2012-01-11T17:16:00.001Z

Harley Medical Group (HMG), responsible for one in three operations using the French-made implants, said it would go out of business if made to meet the full cost of removal. HMG's position makes it more likely the other two main players, Transform Cosmetic Surgery and The Hospital Group, will also ignore pleas for private clinics to pay for surgery. Should they follow HMG's lead, the bill to taxpayers could feasibly top £100 million as the NHS will be forced to perform the corrective surgery.The big three firms are likely to have performed around two thirds of enlargement operations using faulty implants in Britain. There are around 40,000 women in the UK who have been fitted with the controversial implants and operations to remove them cost around £3,000. Mel Braham, chairman of HMG, claimed the Government had the "moral responsibility" to pay for removal operations, as the regulator meant to ensure the safety of medical devices had failed in its duty.

Iran car explosion kills nuclear scientist in Tehran

2012-01-11T16:55:00.001Z

BBC's Mohsen Asgari: "It seems a motor cyclist pasted a bomb to his car which he was in with two other passengers Continue reading the main story Iran nuclear crisis Undeclared pursuit? Q&A: Nuclear issue Key nuclear sites Sanctions' impact Watch A university lecturer and nuclear scientist has been killed in a car explosion in north Tehran. Mostafa Ahmadi-Roshan, an academic who also worked at the Natanz uranium enrichment facility, and the driver of the car were killed in the attack. The blast happened after a motorcyclist stuck an apparent bomb to the car. Several Iranian nuclear scientists have been assassinated in recent years, with Iran blaming Israel and the US. Both countries deny the accusations. Continue reading the main story Analysis Frank Gardner BBC security correspondent The assassination on Wednesday of another Iranian nuclear scientist may now prompt Iran to try to respond in kind. The murder in Tehran of Mostafa Ahmadi-Roshan comes on top of a sophisticated cyber sabotage programme and two mysterious explosions at Iranian military bases, one of which in November killed the general known as 'the godfather' of Iran's ballistic missile programme. No-one is claiming responsibility for these attacks but Iran blames its longstanding enemy, Israel, and occasionally the US. Whoever is behind them, Iran is clearly being subjected to an undeclared campaign to slow down its nuclear programme. Frank Gardner's analysis in full Iran's Vice-President Mohammad Reza Rahimi told state television that the attack against Mr Ahmadi-Roshan would not stop "progress" in the country's nuclear programme. He called the killing "evidence of [foreign] government-sponsored terrorism". Local sources said Wednesday's blast took place at a faculty of Iran's Allameh Tabatai university. Two others were reportedly also injured in the blast, which took place near Gol Nabi Street, in the north of the capital

Europe Banks Hoarding Cash Resist Draghi Bid to Avoid Crunch

2012-01-11T16:02:00.001Z

Banks are hoarding the European Central Bank's record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. “It's illusory to think that the measure will translate into credit generation,” Philippe Waechter, chief economist at Natixis Asset Management in Paris, said in an interview. “It will assuage some of the anxiety banks have regarding their liquidity needs. But they've engaged into a massive overhaul of their strategy and shrinkage of their balance sheets, which is, coupled with the deteriorating economy, not compatible with increasing credit.” Governments are urging European banks to keep lending to companies and individuals while requiring them to raise an additional 114.7 billion euros of core capital by June to weather a deepening sovereign-debt crisis. Instead of raising equity, most lenders across Europe have vowed to meet capital rules by trimming at least 950 billion euros from their balance sheets over the next two years, either by selling assets or not renewing credit lines, according to data compiled by Bloomberg. ECB Deposits That has stirred concern among policy makers that banks will cut lending and throttle growth in the euro region. Banks have been parking almost all extra liquidity from the ECB loans back at the central bank. Barclays Capital estimates firms used 296 billion euros of the Dec. 21 three-year loans to replace maturing shorter-term ECB borrowings. That left only 193 billion euros of additional money for the financial system. Overnight deposits with the ECB have jumped by about 223 billion euros since the loans to a record 486 billion euros, suggesting the central bank funds haven't so far reached customers. Banks account for about 80 percent of lending to the euro area, making them “crucial to the supply of credit,” according to recently installed ECB President Mario Draghi. By contrast, U.S. companies rely more on capital markets for financing, selling bonds to investors. Refinancing Needs The ECB lending, and a follow-up loan offering on Feb. 28, won't ease the pressure on banks to shrink, say analysts including Huw van Steenis at Morgan Stanley in London. “The ECB loans will largely be used to pre-fund 2012 and some of 2013's bank refinancing needs, but it will not stimulate lending,” Van Steenis said. They will “just stop it falling off precipitously.” Euro-area banks have more than 600 billion euros of debt maturing this year, the Bank of England said in its financial stability report last month. The first ECB loan offering should help cover about two-thirds of that amount, Goldman Sachs Group Inc. analysts say. Morgan Stanley's Van Steenis estimates banks may reduce assets by as much as 2.5 trillion euros in two years, a process known as deleveraging. The volume of loans to households and companies in the 17- nation euro area shrank in November for the second consecutive month, the ECB said on Dec. 29. Loans were still up 1.7 percent over the year-earlier period, slowing from a 2.7 percent increase in the 12 months through October. Merkel, Sarkozy When granted, loans are getting costlier for borrowers. Since July, interest margins have increased, with investment- grade borrowers in Europe paying an average of 91.6 basis points more than benchmark rates, up from 84.4 basis points during the first half of 2011, according to data compiled by Bloomberg. A basis point is one-hundredth of a percentage point. “We must avoid a credit crunch for our economies,” European Union President Herman Van Rompuy said on Jan. 9. “The recent measures by the European Central Bank on a long-term lending facility for the banks are welcome in this context.” The European Banking Authority, which oversees the region's regulators, asked banks on Dec. 8 to retain earnings, curb bonuses and raise equity to boost core capital before resorting to cuts in lending. The EBA followed both French President Nicolas Sarkozy and German Chancellor Angela Merkel in urging banks to keep lending. Sarkozy said on Oct. 27 that he had asked firms to shift “almost all” of their dividends into strengthening balance sheets and to make bonus practices “normal.” Merkel said on Oct. 9 she was “determined to do whatever necessary to recapitalize the banks to ensure credit to the economy.” ‘No Credit Crunch' Bankers have said they haven't restricted lending and that demand for credit is slowing as growth slows. “All banks I talk to keep lending to small- and medium- size enterprises and households,” Christian Clausen, president of the European Banking Federation, an industry association, said on Dec. 9. “That part of the bank will keep rolling.” There is “no credit crunch,” Frederic Oudea, chief executive officer of Societe Generale SA, France's second- biggest lender, and chairman of the French Banking Federation, said last month. “The reality is that credit is available,” he said in an interview on BFM radio on Dec. 16. Even so, companies across Europe say credit is tightening. ‘Double Punch' In France, where credit to the private sector increased by 3.7 percent in November compared with a year earlier, the majority of the country's company treasurers said they encountered “very strong tensions” in negotiating bank loans, with more than 50 percent of respondents saying the process led to more expensive terms, according to a December survey by the French Association of Corporate Treasurers. The majority of those polled said obtaining bank financing was “as difficult as at the end of 2008,” after Lehman Brothers Holdings Inc. collapsed. U.K. banks expect to toughen their criteria on loans to companies and households in the first quarter because of strains in the wholesale funding market, the Bank of England said Jan. 5in its fourth-quarter Credit Conditions Survey. Belgian credit growth slowed to 3.1 percent in the 12 months to the end of October, from 3.6 percent at the end of September, the country's central bank said on Dec. 12. In Italy, some companies with annual sales of 30 million euros to 40 million euros are charged as much as 10 percent interest on loans, Emma Marcegaglia, chief of the country's Confindustria lobby group, said in an interview on Dec. 20. Lending to businesses and consumers grew at the weakest pace in a year, the Bank of Italy said today. Draghi's Priority With the ECB's injection, “deleveraging may happen in a more orderly way, but it doesn't mean it will be painless,” said Alberto Gallo, head of European credit strategy at RBS. Banks are faced with high long-term financing costs, a deteriorating economy and difficulties raising capital, he said. “It's what I call the double punch: A combination of negative growth and banks' deleveraging will affect lending activity.” Even the ECB's Draghi, who has made it one of his priorities is to keep credit flowing into the economy, said the central bank's loan offerings may fail to achieve that goal. “Monetary policy cannot do everything, but we're trying to do our best to avoid a credit crunch that might come from a lack of funding,” Draghi said Dec. 19 at the European Parliament in Brussels. “We have to be extremely careful here, because there may be other reasons that create a credit crunch.” Draghi may be wary of the U.S. experience with multiple rounds of bond purchases. That so-called quantitative easing hasn't stimulated lending, Natixis's Waechter said. ‘Kick the Can' “Lending really picked up when the economy got better,” he said. The ECB cut its forecast for euro-area economic growth in 2012 to 0.3 percent on Dec. 8 from a September prediction of 1.3 percent. The central bank expects the economy to expand 1.3 percent next year. In the U.S., almost all categories of bank lending fell in 2009 and 2010 and didn't start improving until last year, when the Federal Reserve stopped its second wave of quantitative easing, according to data by the U.S. institution. Banks increased their holdings of Treasury and agency securities in 2009 and 2010, showing they were using the Fed's cheap money to own safe government paper. Because quantitative easing tends to improve capital markets first, the healing will be even slower in Europe given its reliance on banks for borrowing, according to Gallo.

Trial begins in giant Spanish corruption scandal

2012-01-10T21:40:00.001Z

top Spanish former official went on trial Monday at the start of legal proceedings into a raft of corruption scandals in which King Juan Carlos' son-in-law is also accused. Jaume Matas, the ex-head of the regional government of the Balearic islands who had also served as environment minister, appeared at a court in Palma de Majorca alongside three other suspects. They have been charged with embezzlement, fraud, falsifying documents and influence peddling. Matas was charged in March 2010 and was released after paying a record bail of 3.0 million euros ($3.8 million). Prosecutors are demanding an eight and a half years jail term. Matas served as president of the government of the Balearic Islands between 1996-1999 and then between 2003-2007. He was environment minister between 2000-2003. The so-called "Palma Arena affair" as the Spanish press has dubbed the corruption scandal centres on the suspected embezzlement of public funds during the construction of a velodrome in Palma de Majorca between 2005-2007. An investigation concluded that the cycling track had an unjustified cost overrun of 41 million euros. That led authorities on the archipelago to uncover other cases of suspected embezzlement of public funds, including one allegedly involving royal son-in-law Inaki Urdangarin. The 43-year-old ex-Olympic handball player is scheduled to appear in court on February 25 as part of a probe into corruption at a non-profit organisation, Instituto Noos, which he headed between 2004 and 2006. The probe centres notably on a payment of 2.3 million euros to Instituto Noos for organising a tourism and sports conference in 2005 and 2006. Urdangarin, who has the title Duke of Palma and is married to the king's youngest daughter, Princess Cristina, has denied any wrongdoing. Last month the royal family suspended the the duke from official engagements and the palace's highest official, Rafael Spottorno, gave an unprecedented rebuke, telling Spanish media his behaviour "does not seem exemplary".

Spanish property an 'attractive investment' for Brits

2012-01-10T21:34:00.001Z

The growing strength of the British pound against the Euro is to make the Spanish property market an interesting prospect, according to an expert. Mark Stucklin, head of Spanish Property Insight, explained that 2012 will be a "key year", meaning Brits will benefit from attractive offers "after some real years in the dumps". "Within Spanish property, you have to define what you are talking about. Is it the middle of nowhere property that was badly built in the boom or the nicest property of which there is scarce supply?" he said. "It is a completely different market. With the best property, I think we are now in [a period of] price stability and, with the euro getting cheaper compared to the pound, that will mean that it gets more interesting for British buyers." Mr Stucklin went on to say that if potential buyers looked at the Spanish market in terms of euros, they would be able to find "50 per cent or more price reductions and you can find property on sale at the replacement cost". This, he explained was cheaper than building property. Brits looking to move to Spain should consider housing excess belongings and furniture in a self storage unit.

Alcoa to Curtail Operations in Italy, Spain

2012-01-10T21:30:00.001Z

Hours before kicking off earnings season, Alcoa (AA: 9.44, +0.02, +0.16%) said on Monday it plans to scale down operations at three aluminum smelters in Italy and Spain to tighten expenses as metal prices continue to fall. The curtailment will reduce the company’s global smelting capacity by 12%, or 531,000 metric tons, with operations as its Portovesme, Italy, and La Coruna and Avilies, Spain, facilities impacted in the first half of 2012. Alcoa plans to permanently close the facility in Portovesme, which has capacity of 150,000 metric tons, but just partially and temporarily shut the operations in Spain. The company said those plants are among the highest-cost producers in the Alcoa system. The Pittsburgh-based company blamed the curtailments on an uncompetitive energy market combined with rising raw materials costs and falling aluminum prices, which are down 27% from their peak in 2011. The move is a part of Alcoa’s long-term goal of improving its aluminum production operating margins by cutting down on costs. Last week, Alcoa said it would permanently close its smelter in Alcoa, Tennessee, and two potlines at its Rockdale, Texas, smelter. The company is expected to cut a total of 240,000 metric tons, or about 5%, of its global smelting capacity. “In today’s rapidly changing global economy, it is imperative to respond quickly to maintain competitiveness,” said Chris Ayers, president of Alcoa Global Primary Products. “This decision was made after thorough analysis of all the possible alternatives.” The company said the total impact on its workforce will not be determined until consultations with employee representatives and government have been completed. However, the three facilities employ a total of about 1,500. Alcoa also says it will aggressively accelerate plans to reduce the cost of raw materials used by its primary products business and adjust capacity in the global refining system to reflect internal demand and market conditions.

Santander Chairman Botin, Brother Lose Appeal in Spain Tax Case

2012-01-10T21:24:00.001Z

Banco Santander SA Chairman Emilio Botin lost a bid at Spain’s National Court to block three groups’ ability to file complaints against him over accusations he broke national tax laws by hiding funds in Switzerland. Appeals by Botin, his brother Jaime Botin and other people contesting a November decision to allow the complaints by the three groups were rejected, the Madrid-based court said today in a ruling sent by e-mail. In Spain, any citizen can make a so- called popular accusation in legal proceedings even if they are not directly involved in the matter. The court said in June it would investigate Botin and 11 family members after tax officials received information on clients at HSBC Holdings Plc’s Swiss private bank from French authorities. The Botin family, in a statement distributed by Santander at the time, said it has put its tax affairs in order “voluntarily,” has met all its tax obligations and hopes the case will be cleared up in court. A spokesman for Spain’s largest bank, who asked not to be identified in line with company policy, declined to comment today in a phone interview. The complaints were made by three groups called Ciudadania Anticorrupcion, Asociacion Contra La Corrupcion Sistemica Y En Defensa Del Libre Ejercicio De La Acusacion Popular and Manos Limpias, the court said.

Shoe shop chain Barratts Priceless makes 1,600 staff redundant

2011-12-30T16:59:00.001Z

The high street gloom deepened on Friday as more than 1,600 workers at shoe chain Barratts Priceless were made redundant and 400 jobs were put at risk following the collapse of toy chain Hawkin's Bazaar. Barratts' administrators Deloitte said the 1,610 full- and part-time staff who manned its 371 concessions in stores such as Dorothy Perkins would be paid up until the end of Saturday. The Bradford-based shoe group collapsed this month when 170 of its 3,840 staff were laid off and 18 of its 191 stores closed. Deloitte partner Daniel Butters said it was hopeful that some retail jobs could be saved as the administrators were in "active discussions to rescue a significant part of the remaining business". The jobs blow came as restructuring specialist Zolfo Cooper was formally appointed at Hawkin's parent company Tobar, which also owns toys and children's accessories retailer Letterbox. The group, which also has a home shopping arm, employs 380 full-time staff at its 65 stores and head office in Beccles, Suffolk. The failure of Hawkin's, following the crucial Christmas trading period, is the second among retailers this week: fashion chain D2 Jeans has also folded. D2's administrator BDO immediately closed 19 of its 47 UK stores, making more than 200 employees redundant. No job losses have been announced at Hawkin's, with Zolfo Cooper saying the business would be run as a going concern. The 55 "pop-up" stores Hawkin's opened for Christmas, which employed 400 temporary staff, will close as planned. Zolfo Cooper's Peter Saville said: "Hawkin's has experienced exceptionally challenging trading conditions of late. At this stage we intend to continue to trade the component parts of the group whilst we seek a buyer for all or parts of its operations." Hawkin's was set up in 1973 and sells quirky toys, gifts, games and gadgets using the tagline "things you thought had gone forever, things you never even knew existed". Insiders suggested that a buyer would be found for at least part of the loss-making business, which at last count had debts of £42m.

two years of crisis and bank debt in Europe, the roaring euro party is over.

2011-12-19T02:45:00.001Z

Greeks are emptying their bank accounts, Italians are proposing that the Roman Catholic Church begin to pay nearly $1 billion in property taxes on lucrative hotels and businesses, and in the UK, protesters sans jobs have settled near 10 Downing in the wake of the nation’s biggest general strike in years. Spain has seen well-dressed panhandlers in Madrid. The Netherlands report higher bankruptcies and lower exports. French banks are cutting thousands of jobs. And in bailed-out Portugal, two religious and two civil holidays – weekdays off – will now fall on weekends, even as healthcare costs there have suddenly doubled in many hospitals. All across Europe, the severity of belt-tightening and public anger has brought a new stream of “austerity stories” to the fore: job cuts and their effect, new instances of ethnic hate, worry about social stability. Rising right-wing violence The majority of these stories flow out of Europe’s southern tier, the “less competitive” economies. Two Senegalese street traders in a Florence market were shot and killed Dec. 13 by a right-wing fanatic and three wounded. Higher piles of uncollected garbage sit on Greek streets and there’s an increase of drugs and crime there. Immigrants who used to be welcome labor five years ago in Greece, Italy, and especially in Spain, are now subject to heavy ID checks and public frowns, and there are more spasms of violence by vigilante groups. At times, the surly climate means that “Anyone who might pass for migrant runs the risk of being beaten up,” says Judith Sunderland of Human Rights Watch Europe. “There’s a gloomy mood… in ordinary neighborhoods that I visit… worry about jobs, benefits, social security and the cost of living,” says Pap Ndiaye, social historian at the Paris School for Advanced Studies in Social Sciences. “On top of that, minorities are concerned about backlash or adding problems to the general population. A few years ago, minorities with degrees were leaving France for Great Britain but now the UK is no longer so hospitable. Now we are seeing a phenomenon of looking to the Americas. More professionals are moving to Montreal, for example… with no plans to come back to France.” Belt-tightening across the spectrum To ease austerity, Greece is selling ferryboats to Turkey and what appear to be third-world items like string, used auto parts, and TV antennas to improbable places like the Bahamas and the Marshall Islands. Italy this week said it will release some 3,300 prisoners with less than 18 months on their sentence – remanded to their homes – to save an estimated $500,000 a day. As Greece ekes out its EU bailout loans quarterly – the next tranche is still under negotiation – ordinary folks are depleting their bank accounts. The governor of the Greek central bank, Georgios Provopoulos, recently told parliament, "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November, the decline continued on a large scale.” The effect is to reduce the ability of banks to lend, he said. Some of the austerity effect may be indirectly positive. In Spain, archeologists outside Seville are glad that the building craze of the past 10 years has been halted, since planned shopping centers were to be erected on unexplored Copper Age settlements. Spanish police have also cracked down on a sophisticated forgery ring that was printing 50 euro notes out of a canning factory. In Italy, the 950 members of parliament that make nearly $200,000 a year are expected to cut their pay as the new government of Mario Monti seeks to deal with a cumulative 1.9 trillion euros in debt. Italy’s politicians earn twice that of French and German counterparts, and four times that of Spanish. Strains in northern Europe Yet various stresses and strains owing to new fracturing in Europe are not restricted just to the southern tier. Britain reports a 17-year high in unemployment even as EU figures show it has the 2nd highest living standard in Europe. London riots last August took place mainly among have-nots. Prime Minister David Cameron decided last week to opt-out of a German-French-engineered intergovernmental EU treaty designed to force discipline on EU states and stop future crises, seen as possibly isolating Britain. The decision highlighted an earlier decision by the town council of Bishop’s Stortford to alter an official 46-year old “sister city” or “twinning” relationship with the German town of Friedberg, near Frankfurt. The council is made up of mostly Tory or “euroskeptic” politicians and critics chided the town for downgrading the sister city status at a time of drift of European unity. More pertinently, perhaps, official November figures in the Netherlands, a more competitive state, show that some 610 businesses declared bankruptcy, an increase of 85 from October, and up from an average of roughly 500. Meanwhile, Dutch exports declined for the first time in two years in October. Dutch finance minister Jan Kees de Jager told reporters this week the country faces recessionary times and said there “are no taboos” in what may be cut in the budget. “We felt this coming. It is certainly not positive,” he said. “There are no easy times ahead of us.” The Netherlands will cut an estimated $24 billion under austerity measures, though the Freedom Party of anti-Islam politician Geert Wilders says it will not vote for cuts without a promise to end some $6 billion in foreign development aid.

EMERGENCY evacuation plans for Brits living in Spain and Portugal are being drawn up amid fears of the euro collapsing.

2011-12-19T02:27:00.001Z

Marbella, Andalusia, Spain (pic: Getty)

The drastic proposals emerged as a former Security Minister warned expats could be left stranded and destitute by the break-up of the single currency.

Brits who invested their savings in their adopted countries may not be able to withdraw cash and could even lose their homes if banks call in loans, worried ministers are warning.

The Foreign Office is preparing to bring them back from Spain and Portugal if the two countries are forced out of the euro, triggering a banking collapse.

A million Brits live in Spain and 50,000 in neighbouring Portugal – plus a million in the other eurozone countries.

And Baroness Neville-Jones, who only stepped down as a minister in May, called the situation “very, very worrying”.

The Tory peer – who once chaired the Joint Intelligence Committee for MI5, MI6 and other security agencies – said: “Spain is clearly a vulnerable area. If that happens, one of the things that will happen in a crash of that kind, is that the banks would close their doors. You would find that there are people there, including our own citizens, a lot of them, who couldn’t get money out to live on. So you would have a destitution problem.”

British planes, ships and coaches could be sent to pluck our citizens from debt-ridden Spain and Portugal

Commenting on the evacuation plans, she added: “I think they are right to be doing that. I think this is a real contingency that they need to plan against – very, very worrying.”

Officials are braced for a nightmare scenario where thousands end up penniless and sleeping at airports with no means of getting home. Planes, ships and coaches could be sent, with some expats being brought out through Gibraltar.

The Foreign Office could offer small loans while piling pressure on the banks to give Brits access to their funds.

Spanish and Portuguese banks guarantee the first 100,000 euros deposited by savers but many put limits on withdrawals in a crisis.

A powerful credit rating agency downgraded 10 Spanish banks last week, while another warned over the weekend the debt crisis was threatening to spiral out of control.

Spanish king forced son-in-law to quit job in 2006

2011-12-19T02:23:00.001Z

King Juan Carlos told his son-in-law in 2006 to cut ties with a company now mired in corruption allegations, an official at Spain's royal palace said Sunday. Authorities are probing the activities of a non-profit company run by Inaki Urdangarin between 2004 and 2006. "(The king) ordered him to stand down from his activities and he sold his shares," said the official, who works at the royal palace's press office, confirming reports in the Spanish press. "He was told he shouldn't work for himself and it would be better if he worked overseas." Urdangarin, 43, also known as the Duke of Palma de Mallorca, now works for Spanish telecommunications giant Telefonica in Washington, where he lives with with his wife, Infanta Cristina. The scandal, the first to hit Spain's royal family in years, centres on Urdangarin's time at the helm of the Instituto Noos, now suspected of siphoning off money from contracts paid by the regional government of the Balearic Islands, where the institute is based. The royal palace did not uncover any lies or fraud in 2006, the source said. However, a royal legal advisor found signs the Noos institute was possibly involved in commercial activities not consistent its non-profit mission. On December 12, the royal palace froze Urdangarin out of official activities over the scandal. The royal family traditionally maintains a discreet profile in Spain, where Juan Carlos is widely respected, credited with guiding the country to democracy after the death of the dictator Francisco Franco in 1975. The scandal has nevertheless caused anger at a time when ordinary Spaniards are being squeezed by spending cuts and a lack of jobs, with an unemployment rate of 21.5 percent.

Ratings agency confirms it is could downgrade SIX eurozone countries... but France's AAA status is safe for now

2011-12-17T00:21:00.001Z

Six eurozone countries could have their credit rating downgraded in the next few weeks amid uncertainty over how the financial crisis will be resolved. Belgium, Spain, Slovenia, Italy, Ireland and Cyprus are all facing possible downgrades by ratings agency Fitch. But France's status is not under threat, despite reports that it was on a hitlist of countries that would be downgraded.

Fitch warns Spain and Italy of downgrade as Moody's cuts Belgium by two notches

2011-12-17T00:20:00.001Z

The eurozone’s third- and fourth-biggest economies were warned by Fitch of a “near-term” downgrade, alongside Ireland, Belgium, Slovenia and Cyprus. In a further blow, Belgium separately saw its credit rating downgraded two notches, to Aa3, by another leading agency, Moody’s. It cited the “sustained deterioration” in funding conditions for eurozone countries with relatively high levels of public debt, like Belgium, and new risks stemming from the country's troubled banking sector. The downgrade and warnings, delivered after the markets closed last night, came as Spain said its debts had soared; talks with Greece’s private bondholders stalled; and Hungary broke off talks with the International Monetary Fund (IMF). Pitching itself firmly against Germany, the rating agency warned that the European Central Bank (ECB) needed to give a "more active and explicit commitment" to prevent "self-fulfilling liquidity crises" ripping through the eurozone. The ECB's support for eurozone banks was praised but Fitch said the central bank's "continued reluctance to countenance a similar degree of support to its sovereign shareholders" was undermining the efforts to create a firewall to stem the crisis.

Karen Guillet would drive to her $50,000-a-year job at Oxford Town Hall in new Jaguar cars that cost more than her annual salary.

2011-12-12T23:51:00.001Z

Karen Guillet would drive to her $50,000-a-year job at Oxford Town Hall in new Jaguar cars that cost more than her annual salary.

She would walk to her office wearing thousands of dollars worth of clothes and regularly receive packages at work from upscale department stores.

Oxford’s longtime tax collector always acted as if she had money – like when she asked a friend to buy her $1,800 boots from Bloomingdale’s and promised to promptly repay her, or all those times Guillet had lunch catered for her colleagues on random work days. But friends and co-workers say they chalked up Guillet’s seemingly lavish lifestyle to her simple explanation about how she could afford to enjoy the finer things in life: she had a rich aunt who left her money, and she had a trust fund that her father set up for her years ago.

Friends and co-workers had no reason not to believe Guillet: though in hindsight at least one said they thought she was “a phony,” most trusted her just like the taxpayers did time and again when they voted her into office in quite a few Novembers and handed her their money – many times it was cash – every single April. It was a trust that friends and especially taxpayers would eventually come to regret.

It turns out there was no aunt, just like there was no trust fund. There wasn’t a rich husband: his construction company was making about as much as Guillet was bringing in from Town Hall, where she worked as tax collector for 24 years, according to tax filings. There was, however, a gravy train that ran right through the tax office every day, and Guillet learned how to steer it right to her personal slush fund.

And while Guillet spent years burning through money, in the end, it was she who went up in smoke when her embezzlement scheme came crashing down. Guillet now faces felony charges of larceny and forgery, and she will appear before a judge for the first time this morning (Monday, December 12, 2011) at Derby Superior Court.

The above description of Guillet’s lifestyle is the way it is portrayed in a 27-page, sworn affidavit chock full of juicy details about how police believe she pulled off a longtime scam that bilked Oxford taxpayers out hundreds of thousands of dollars over at least a decade. While the affidavit released last week charges the 61-year-old Guillet with stealing $243,902, a pending civil suit filed by the town claims it’s more like $670,000 and could be even higher. Police have tried to prove she stole at least $243,902 because the penalties per law do not get any harsher once the sum goes higher than roughly that amount.

The scheme

Details of the alleged scheme - which were first made public during court proceedings for the civil trial in the spring - are long and drawn out in the legal affidavit; they need to be in order to have the best chance at proving the case in a court of law. However, what police describe as a “lapping scheme,” is rather quite simple.

Guillet would steal cash payments and then shift checks from other deposits into the daily batch filed at the bank to make up for the cash shortages. For example, in a scenario described in court, on Aug. 10, 2009, the tax collector’s office took in $9,255 in cash, according to town records. However, just $858 was deposited at the bank for that day, town officials said. Those same officials alleged in court that Guillet took checks from different accounts to make up for the cash shortage while she pocketed $8,397 that day.

An ad hoc committee of town officials was able to prove that the amount of cash on the computer in the tax collector’s office did not match the amount of cash deposited at the bank, according to the affidavit.

“Also, checks were taken from other batches or sources in the tax office and added to the deposit with the missing cash to make up the account balance,” the affidavit states. “Therefore, the total deposit would equal the tax records, but the proper accounts were not credited. This process was repeated several times on subsequent deposits and a pattern was developed showing how Guillet would carry out her scheme.”

Police state they spent the crux of time in their two-year investigation looking into the actual missing money on 100 deposit batches in 2008 and 2009. Police said in the affidavit they discovered there was a discrepancy of $243,902 between the amount of cash that should have been put in the town’s coffers and what was actually deposited. ($339,421 should have been deposited, $95,519 was actually deposited, according to the report.)

The victims

Sharon Scinto, the assistant tax collector and the woman who ultimately caught on to Guillet, told police “it seemed that Guillet would only take advantage of certain people,” according to the affidavit. She told police of a time when a local volunteer firefighter paid his taxes in cash, the document states. Guillet told him her computer wasn’t working so she couldn’t give him a receipt, Scinto is quoted as saying in the affidavit.

“Scinto stated that fireman, whose name she does not remember, now has to repay his taxes while other taxpayers who have receipts for their cash payments are getting their accounts credited,” the document states.

Local firefighters say there are more than few people within the volunteer department who were taken advantage of in a similar way; a couple of other victims were people who actually work in Town Hall.

Not only did Guillet take advantage of laypeople, she stole from major corporations and some of the town’s largest taxpayers. The affidavit speaks of some of the biggest taxpayers also being duped, such as Yankee Gas, which the town had a give a tax credit to for $54,557 after their investigation revealed the company was not originally credited for that amount although the bill was paid.

Where the money went

The affidavit used to bring criminal charges against Guillet vividly describes her lavish lifestyle, one that was made posh with the piles of cash she is alleged to have brought in from the tax office.

The affidavit discusses how Guillet’s bank and credit card statements show purchases for upscale shoes, trips to casinos and hotels, vacations worth thousands, two separate dog walkers – one of whom she paid $100 a day, deliveries of fresh flowers once a week , a cleaning lady and purchases at Saks Fifth Avenue, among other upscale stores.

The affidavit details how in 2007, she spent $9,437 in nine months at a spa and salon in Southbury; she spent $2,382 during a one-night stay at an upscale hotel in New Hampshire. She would frequently shop at upscale stores in Fairfield County and spend between $3,500 and $6,000 in one trip, the affidavit states.

One town employee stated Guillet “lives a lifestyle quite different from anyone else who worked in Town Hall.” Another former co-worker and Guillet’s one-time friend said Guillet had hired help around her house and spent “unbelievable amounts of money on clothes, beauty treatments, vacations, jewelry, home décor and landscaping” outside of her nice but modest one-and-a-half story saltbox-style (roof) Colonial on Douglas Lane that, according to land records, features a gazebo and an in-ground swimming pool.

The affidavit also describes how a friend hired by Guillet to walk her dog and do other chores around her house would notice stacks of hundred dollar bills in her home and in her purse; the friend said Guillet would deposit between $2,000 and $3,000 in cash every week. And the friend said she’d sometimes see deposit slips from the tax office at Guillet’s house, mainly in a laundry room where it is believed Guillet kept most of the money she is alleged to have stolen. That same friend also said Guillet would frequently talk about how her house was paid off, and the friend knew Guillet put half of her salary into her retirement plan.

How she was caught

On Nov. 10, 2009, Scinto, the assistant tax collector, came across what she believed was a fraudulent deposit slip in the tax office. Scinto told police that on that day she wrote up a deposit slip totaling $30,788.88 including $3,093.43 in cash. She asked Assistant Tax Assessor Joyce Eades to confirm the cash amount. According to the affidavit, “Eades verified the cash amount because Guillet was not available at the time. Later that day, Guillet brought the deposit to Naugatuck Valley Savings and Loan. When the bank deposit bag was returned to the tax office, Scinto noticed the deposit slip was for only $27,695.46. Upon questioning Guillet, (Guillet) quickly took the deposit slip from Scinto and said she would take care of it at the bank.

“A loud discussion then occurred. Joyce Eades overheard the discussion. Scinto said Guillet never told her whether she contacted the bank or if the matter was resolved. Scinto made a copy of the deposit slip which appeared later and seemed to be in Guillet’s handwriting (officials believe she was fabricating deposit slips by making them on a typewriter) with typed bank numbers of on it, not the typical banking print and not the deposit slip that Scinto wrote or the one she had seen come out of the bank deposit bag. This was later confirmed to be the initial fabricated deposit slip.”

Scinto told police she immediately reported the incident to then-First Selectman Mary Ann Drayton-Rogers and then-town attorney Fran Teodosio. The affidavit states that after that date, Guillet remained in her office for about six weeks – Guillet was put on leave on Jan. 13, 2010 - while town officials looked into the matter further. In that time, town officials told police in the affidavit that Guillet was seen and heard ripping up papers in her office and throwing them out, which the town employees described as unusual behavior for Guillet.

The affidavit also states that Guillet is believed to have taken money in the time between when Scinto first told town officials her concerns and when Guillet was actually removed from her post. The affidavit states that $4,491.83 was taken on Nov. 23, 2009, and that $11,917.86 was taken on Dec. 17, 2009.

When Guillet was brought in for a meeting with Drayton-Rogers and Teodosio on Jan. 13, 2010, she admitted to stealing $3,093. She was then put on leave and town officials began a more thorough investigation, in which they discovered her ongoing money stealing scheme as well as that Guillet seemed to have changed tax assessments, including one on her own home. Town officials also notified state police.

The following month, Guillet told Drayton-Rogers she was sorry and that she had just gone to confession; Guillet said she just wanted “to go away” and never be seen again. She formally resigned on June 22, 2010.

Local impact

It’s not clear just how much the stolen money ultimately impacted people’s taxes, but what is clear is that it certainly had an effect.

The affidavit states that between 1992 and 1994, Oxford had a tax collection rate around 92 percent or 93 percent – anything below 96 percent is considered by tax officials to be very bad. Guillet said the reason was because an escrow check from a bank was mistakenly deposited to the finance office, bypassing her office and not properly crediting the town’s account. (The affidavit does not describe more recent tax collection rates.)

First Selectman George Temple said he believes the town paid for Guillet’s mistakes in one way or another through taxation.

Asked if he thought the details of the affidavit – especially those about what Guillet allegedly spent the money on – was a slap in the face to the taxpayers, Temple said he believes it is worse.

“It’s more than a slap in the face, it’s a betrayal,” he said. “She is somebody who a lot of people had a very high regard for, including me. To see this kind of a thing going on, it’s hard to take.”

Other officials interviewed by police had similar sentiments.

Tax Assessor Eva Lintzner told police she felt betrayed and hurt by Guillet’s actions.

“We were a trusting community,” Lintzner told police, according to the affidavit. “And that has been shattered.”

The top ranks of the Government are now coming to the conclusion that the break-up of the euro is inevitable.

2011-12-11T13:19:00.001Z

I understand that Hague, like the Chancellor, now believes this will happen soon. Osborne told Cabinet colleagues on Monday that the Merkel-Sarkozy plan for greater fiscal discipline within the eurozone was no solution to the current crisis. Rather, he said, ‘it was like standing over a man having a heart attack and telling him that to avoid one in future he should do more exercise and cut down on cholesterol’. This view that the euro is unlikely to survive is why there are, so far, few worries about Britain being isolated by the eurozone bloc and its allies. The Government is also confident that the differences between the countries in the single currency will remain – that the Netherlands and Finland will continue to take a more liberal attitude to financial services and the single market than the French and the Italians. But there’s little doubt that Cameron’s decision to wield the veto changes Britain’s relationship with the other members of the European Union. The days of Britain carrying on down the same route as the rest of Europe, just at a slower pace, are now over. As one of Cameron’s closest allies says: ‘We are now, inevitably, en route to a very different destiny.’ ... but one rift is healing, at least Labour’s failure to capitalise on the weakening economy has led to renewed tensions within the party’s ranks. Ed Balls, the Shadow Chancellor, is the target of much of this backbiting. Shadow Cabinet sources complain he is more interested in justifying his record in office than winning the argument about what to do now. Balls’ detractors argue that his bellicose statements are drowning out Ed Miliband’s message.

Banker Bob Diamond has introduced what he calls 'the no-jerk rule' and has encouraged at least 40 executives at his firm to find jobs elsewhere.

2011-12-10T16:43:00.001Z

The American-born chief executive of Barclays said he does not care how good people are at what they do, if they are not suitable, they will be asked to leave.

So far he claims dozens of executives have been shown the door after behaving like jerks or spending lavish amounts of money.

Mr Diamond also said if bankers act like 'Prima Donnas' or don't get along with their colleagues they can work elsehwere.

'You know what a jerk is when you see it,' he said. 'If we ever ignore the rule it always comes back to haunt us.'

The millionaire, who boasts high profits, big bonuses and an annual salary of £6.75 million said the 'greed is good' attitude of some bankers was 'a bit' of a jerk thing to do.

He also mentioned an incident which involved a Barclays investment banker wracking up a bill of £44,000 on wine at Michelin-starred restaurant Petrus.

'That was embarrassing. It was taking advantage - we have a responsibility to our colleauges and to have acted that way in a public place was inexcusable,' he told The Guardian newspaper.

Although he is known for flying easyJet instead of private jets and preferring to eat at Pizza Express instead of high brow restaurants, some might feel the comments are a bit rich coming from a man whose doorman is dressed in fur.

Peter Mandelson once called Mr Diamond the 'unacceptable face of banking' and he also provoked outrage last year when he said the time for remorse and apology from bankers was over.

But Mr Diamond is now calling for bankers to try and become better people.

'I don't think niceness is ever a sign of weakness. When people are mean it's usually a defence mechanism.

'Everyone gets stressed from time to time but no one should ever not be nice.'

Glenn Mulcaire, the private eye at the centre of the News of the World phone hacking scandal, has been arrested

2011-12-07T23:13:00.001Z

Glenn Mulcaire, the private eye at the centre of the News of the World phone hacking scandal, has been arrested by Scotland Yard detectives pursuing a fresh investigation into phone intercepts, according to a person familiar with the inquiry. Officers working on Operation Weeting – the Metropolitan Police’s second probe into phone hacking at News International, which owned the now-defunct Sunday tabloid – announced on Wednesday that they had arrested a 41-year-old man who was being held on suspicion of conspiracy to hack voicemail messages and perverting the course of justice. Mr Mulcaire is the 16th person to be arrested under the new operation, and has already served a six-month prison sentence in 2007 after pleading guilty to intercepting phone messages. He was arrested at his home in Surrey in a dawn swoop and held in a south London police station. Detectives on Operation Weeting have used the private investigator’s notebooks – which contain the names of nearly 5,800 potential victims and run to around 11,000 pages – as the basis for their investigation, trawling through the documents to identify those who may have been hacked. The hacking scandal was reignited this summer when it was revealed that the News of the World had hacked into the voicemail messages of the murdered schoolgirl Milly Dowler after she went missing in 2002, leading her parents to believe that she was still alive. Last month, Mr Mulcaire released a statement through his lawyer, denying that he had deleted voicemail messages on Ms Dowler’s phone. “[He] did not delete messages and had no reason to do so,” the statement read. The Financial Times could not reach Mr Mulcaire’s lawyer for comment on Wednesday. Chris Bryant, a Labour MP and suspected hacking victim, told the FT he was “quite encouraged” that Mr Mulcaire had been taken in for questioning. “I always thought this was a logical next step, but not one [the police] would take unless they had sufficient fresh evidence to put to [Mr Mulcaire], and it seems now they do,” he said. News of the arrest came as lawyers for Andy Coulson, the News of the World’s former editor, argued in the High Court on Wednesday that the tabloid’s parent company should continue to pay Mr Coulson’s legal bills arising from the criminal investigation into phone hacking. It emerged during the course of Mr Coulson’s evidence that News Group Newspapers – a subsidiary of News International – had continued to reimburse Mr Coulson for legal fees relating to his involvement in the judge-led phone hacking inquiry and parliamentary select committee hearings. The court heard that Mr Coulson had received a letter from Tom Mockridge, the chief executive of News International, in August informing him of an “immediate cessation” of payments in relation to criminal legal fees.

US agents laundered drug money

2011-12-04T21:23:00.001Z

Anti-narcotics agents working for the US government have laundered or smuggled millions of dollars in drug proceeds to see how the system works and use the information against Mexican drug cartels, The New York Times reported Sunday. Citing unnamed current and former federal law enforcement officials, the newspaper said the agents, primarily with the Drug Enforcement Administration, have handled shipments of hundreds of thousands of dollars in illegal cash across borders. Some 45,000 people have been killed in Mexico since 2006, when its government launched a major military crackdown against the powerful drug cartels that have terrorized border communities as they battled over lucrative smuggling routes. According to these officials, the operations were aimed at identifying how criminal organizations move their money, where they keep their assets and, most important, who their leaders are, the report said. The agents had deposited the proceeds in accounts designated by traffickers, or in shell accounts set up by agents, the paper noted. While the DEA conducted such operations in other countries, it began doing so in Mexico only in the past few years, The Times said. As it launders drug money, the agency often allows cartels to continue their operations over months or even years before making seizures or arrests, the report said. According to The Times, agency officials declined to publicly discuss details of their work, citing concerns about compromising their investigations. But Michael Vigil, a former senior official who is currently working for a private contracting company called Mission Essential Personnel, is quoted by the paper as saying: "We tried to make sure there was always close supervision of these operations so that we were accomplishing our objectives, and agents weren?t laundering money for the sake of laundering money."

Wife found Gary Speed's body, inquest hears

2011-11-29T16:07:00.001Z

Wales football manager Gary Speed was found hanged at his home by his wife, an inquest was told today. The 42-year-old father-of-two was found dead at his Cheshire home on Sunday morning. Detective Inspector Peter Lawless, of Cheshire Police, told Cheshire coroner Nicholas Rheinberg that Speed's body was found by his wife Louise just before 7am. He said there appeared to be no suspicious circumstances and a post mortem examination found Speed's death was caused by hanging. Mr Rheinberg said: "I adjourn this inquest until January 30, 2012. The inquest will be heard in Warrington and will commence at 2pm." There was a huge media presence at the inquest in Warrington but members of Speed's family did not attend. The coroner asked the media to "respect the privacy" of Speed's family. Earlier today Welsh Assembly Members observed a minute's silence in the Senedd, Cardiff Bay, while flags continue to fly at half mast outside the Welsh Assembly buildings Ty Hywel and the Senedd. Speaking on behalf of the footballer's widow, Louise, and the family, Speed's agent and best man at his wedding Hayden Evans said last night they had been "overwhelmed" with messages of support and condolence. Tributes to the former Leeds United, Everton and Newcastle United midfielder, also poured in from a host of public and sporting figures, led by Prime Minister David Cameron. Mr Cameron said: "I know he meant an enormous amount to people and people feel very, very sad on his behalf and on his family's behalf." The Football Association of Wales chief executive Jonathan Ford said the organisation had received messages from UEFA and FIFA, with the Welsh flag at FIFA House in Zurich flying at half-mast. Mr Ford said: "He was such a great person and he is such a loss." Tottenham winger Gareth Bale, one of the brightest talents in Speed's Wales side, said it was a "massive shock". "It is a tragedy, everyone still can't get their head around it and all our condolences go out to his family and his kids. It is a hard time," Bale told tottenhamhotspur.com. Supporters have left scarves, football shirts and flowers across several football stadiums - including Everton's Goodison Park, Leeds United's Elland Road, Newcastle United's St James' Park and The Millennium Stadium and Cardiff City Stadium, where Wales played their home games. The FAW has opened a book of condolences at its offices in Cardiff allowing fans to express their feelings about Speed's death.

TWO families are rejoicing after two men held in a Spanish prison were set free after four-and-a-half months

2011-11-26T22:05:00.001Z

Kyle Thain, 24, and James Harris, 29, have been released on bail from Font Calent jail in Alicante.

This has left family members and friends overwhelmed – and they haven’t given up hope of getting them back to Britain for Christmas.

Kyle’s brother Jay, 29, said: “This is the best I have felt in a long while. It’'s amazing news.”

Sharon Harris, 56, Kyle’s mother, and husband Dave, 58, sold their Southend home to help fund the legal fight.

Yesterday, £8,000 was transferred to Spain for each of the lads’ bail.

Kyle of Sandringham Road, Southend, and James, of Pelham Road, Southend, have been held without charge since July 8. They are accused of attempted murder after two men were stabbed during a bar brawl near Alicante, close to where they were staying on a lads’ weekend away. They were arrested as they went to board the flight home.

The two pals have always maintained their innocence and insist they did not even set foot in the bar where the violence took place. Their families are convinced there has been a terrible case of mistaken identity.

Kyle and James are now due to leave prison today once funds have cleared. Jay and Sharon will fly out tomorrow where they will be reunited with Kyle and James who will stay with James’s mother Kate Burgess who has been in Spain since their arrest.

The decision on bail was finally made after a judge was presented with evidence that has been available all along.

Jay said a previous solicitor had told a judge that Kyle and James had pictures of them at their apartment around the time of the bar fight.

The new solicitor apparently put the time and date stamped pictures in front of the judge and said they convinced him it was sufficient evidence to at least release Kyle and James from jail.

A previous bail application in September was denied earlier this month and Kyle’s mum Sharon said she was beginning to prepare for Christmas being a “non-event”.

But now the two families are looking forward to trying to clear the names of Kyle and James once and for all.

Jay, also of Sandringham Road, added: “This is a really positive step in the right direction.

“The aim is to try and get them bail to the UK and to continue fighting for the case to be dropped completely.”

Since Kyle and James were arrested family and friends in south Essex have rallied in support with fundraising events netting thousands of pounds for the legal fight.

Spanish savings bank directors suspected of fraud

2011-11-26T21:57:00.001Z

Spanish savings bank has fired two directors and is investigating two former executives for allegedly syphoning off €20 million ($26.5 million) into secret pension funds, the bank said Saturday. The board of directors of Caixa Penedes bank had "required the departure" of its president, Ricard Pages, and director general Manuel Troyano. It said both men had agreed to leave, the bank said in a statement. The decision comes after state prosecutor for the northeastern region of Catalonia, Teresa Compte, said her office was investigating all four on suspicion of involvement in illegal activity. Regional newspaper La Vanguardia said the case was the first time prosecutors had investigated senior executives for "criminal responsibility" in their handling of a savings bank. The prosecutor named the other two former executives as Joan Caellas and Jaume Jorba. Caixa Penedes along with partners Cajamurcia, CajaGRANADA and SA NOSTRA owns Banco Mare Nostrum, S.A. (BMN). The group received €916 million ($1.21 billion) in restructuring aid from the Bank of Spain's Fund for Orderly Bank Restructuring (FROB). The fund was set up to aid institutions meet higher reserve requirements and is aimed at strengthening their finances and quelling fears that Spain might be Europe's next country to need a bailout. Caixa Penedes said its board "disapproved of the content, method, lack of transparency, unusual nature and disproportionate size" of the remuneration package the four directors had helped themselves to. The pension funds were set up in another institution without the knowledge of Caixa Penedes's board. Ignacio Fernandez Toxo, spokesman for trade union Comisiones Obreras said that if the money could be recovered it could help offset the €45 million ($59.53 million) in wage bill savings BMN had recently said it would seek from its work force. He said many BMN employees are members of Comisiones Obreras. The investigation comes as Spain is burdened with an unemployment rate of 21.5 percent — nearly 5 million people out of work — the eurozone's highest. The country's borrowing costs have also risen to an almost unsustainable level of 7 percent interest rate on 10-year bonds. An auction of 12- and 18-month bonds last week also went badly, with Spain forced to offer very high interest rates to investors.

British banks need to plan for a potentially disorderly break-up of the euro zone,

2011-11-24T11:40:00.001Z

British banks need to plan for a potentially disorderly break-up of the euro zone, or the exit of some countries as part of their contingency planning, as the sovereign debt crisis shows no sign of abating, a top regulator said on Thursday.

Andrew Bailey, deputy head of the Prudential Business Unit at the UK's Financial Services Authority (FSA), said UK banks don't have large exposures to the euro zone, but must plan for the worst.

"We cannot be, and are not, complacent on this front," Bailey said at a conference. "As you would expect, as supervisors we are very keen to see the banks plan for any disorderly consequence of the euro area crisis.

"Good risk management means planning for unlikey but severe scenarios and this means that we must not ignore the prospect of a disorderly departure of some countries from the euro zone.

"I offer no view on whether it will happen, but it must be within the realm of contingency planning," he said.

Bailey, who was Chief Cashier at the Bank of England, moved to the FSA as part of preparations for a shake up of UK financial supervision from 2013.

He will be deputy head of the new Prudential Regulation Authority which will be a subsidiary of the Bank.

Bailey said the resilience of UK banks has improved substantially since the 2007-2009 near meltdown of the global financial system.

"Today, UK banks are not front-and-centre of the problem," Bailey said

Hungary will investigate possible cartel activity on the household mortgage market by seven banks

2011-11-24T11:38:00.001Z

Hungary will investigate possible cartel activity on the household mortgage market by seven banks, the Competition Authority said.

The investigation was initiated against OTP Bank Nyrt., Fundamenta-Lakaskassza Zrt. and the local units of Erste Group Bank AG, Raiffeisen Bank International AG, Intesa Sanpaolo SpA, UniCredit SpA and Bayerische Landesbank, according to an e- mailed statement today. The authority said it conducted unannounced inspections at some of the banks.

The lenders raised interest rates “significantly” on household mortgage loans and introduced new products with higher rates from Sept. 22, three days after Hungarian lawmakers approved a plan that forced banks to accept exchange rate risk on the early repayment of foreign currency mortgages, the Competition Authority said.

“The probable explanation for the simultaneous increase is an agreement amongst banks,” the authority said, citing information it has received. “The supposed agreement was that banks offer products with higher interest rates and limit access to lower interest-rate products in connection with the early repayment of foreign currency loans.”

OTP weakened 0.7 percent to 3,000 forint at the 5 p.m. close of trading in Budapest, extending this year’s loss to 40 percent.

Bank stocks took a nose-dive on Wednesday

2011-11-24T11:36:00.001Z

Bank stocks took a nose-dive on Wednesday on concerns about the European debt crisis and rigorous stress tests unveiled by the Federal Reserve on Tuesday, analysts said.

Bank of America Corp (BAC.N) shares fell 4.3 percent to $5.14, near a 52-week low of $5.13 touched in early October. It was the lowest closing price for the bank since March 2009.

Other banks whose shares declined were Citigroup (C.N), down 3.8 percent, and Morgan Stanley (MS.N), down 3.6 percent.

Among regional banks, Regions Financial Corp (RF.N) shares slumped more than 5 percent. The KBW Bank Index .BKX closed down 3.4 percent, a steeper decline than the broader market.

The stress tests announced by the Fed are more rigorous than those a year ago, said Jefferson Harralson, an analyst with Keefe, Bruyette & Woods Inc.

"Investors are worried that we won't see a normal resumption of dividends and share buybacks at healthier banks, and for more stressed banks, this could force them to raise capital," Harralson said.

Despite some signs of improvement in the economy and in the health of banks, investors remain worried about factors outside the United States such as the European debt crisis, said Frank Barkocy, director of research at Mendon Capital Advisors.

"There are signs that fundamentals look better, but we have to get these external clouds of concern to dissipate," Barkocy said. "That may take some time."

The cost to insure U.S. bank debt with credit default swaps jumped on Wednesday after a weak German bond sale added to fears that contagion from Europe's debt crisis could spread globally.

Bank of America's CDS costs rose the most, jumping 34 basis points to 471 basis points, or $471,000 per year to insure $10 million in debt, according to data by Markit.

In the stress tests, Bank of America and five other large banks will be measured for their ability to withstand further deterioration in the European debt crisis.

Banks will also be examined for their exposure to investor requests to buy back soured mortgage loans, Harralson noted.

"Obviously, Bank of America is the bank that stands out there," he said.

Bank of America Chief Executive Brian Moynihan has taken steps in recent months to settle claims related to mortgage-backed securities, although his most significant initiative, an $8.5 billion agreement with major institutional investors, still needs court approval.

In nearly two years as CEO, Moynihan has worked to shed assets, streamline operations and build capital to cover mortgage losses and meet new international standards. He has also suffered a number of setbacks, including the Fed's rejection of a dividend increase in March and a backlash this fall over a now-canceled debit card fee.

"I think Brian's trying to get things done and is making good progress," Barkocy said. "Sometimes he says things when he's not on firm ground, and it comes back to bite him in the behind, so to speak."

Mike Mayo, an analyst with CLSA, said the bank's management needs to improve confidence in the company after past miscues. The bank should consider shedding more assets to make it easier to manage, he said, without offering any specific examples.

bank bail-out because “reckless lending” by international banks to Irish banks contributed to their collapse

2011-11-24T11:22:00.001Z

European authorities should share the cost of Ireland’s €63bn ($84bn) bank bail-out because “reckless lending” by international banks to Irish banks contributed to their collapse, the Irish government has said.

Michael Noonan, Ireland’s finance minister, gave warning on Wednesday that the huge cost of bailing out Irish banks with taxpayers money was driving up national debt and posing a risk to the country’s economic recovery.

“We as a country have borne a disproportionate share of protecting the European banking system by the actions we took,” said Mr Noonan in a briefing to European journalists.

Ireland faces a €63bn bill for recapitalising its main banks, which have all required state bail-outs to cope with a property crash and banking crisis. The cost of the banking bail-out forced the previous government to turn to the European Union and International Monetary Fund for a €85bn bail-out last year.

James Murdoch has dramatically quit as director of the companies that publish the Sun, The Times and the Sunday Times

2011-11-24T11:12:00.001Z

James Murdoch has dramatically quit as director of the companies that publish the Sun, The Times and the Sunday Times and analysts said he could soon sever all ties with the troubled newspaper group.

The surprise move, which has seen Rupert Murdoch's son resign a string of directorships at News International, also raises questions about parent company News Corporation's commitment to its newspapers.

Companies House filings show James Murdoch has stepped down from the boards of both News Group Newspapers Limited - publisher of the Sun - and Times Newspapers Limited, which operates The Times and Sunday Times. NGN used to operate the News of the World and remains embroiled in legal action over phone hacking. NI insisted that James Murdoch was not walking away from the UK newspaper arm.

A spokesman said: "James Murdoch doesn't step back from NI. He remains chairman." He is also still a director of key holding company NI Group Limited and of Times Newspapers Holdings - the editorial board set up in 1981 to ensure the independence of the paper when Rupert Murdoch bought it.

However, those close to Murdoch say he now has a more hands-off role.

The billionaire's Arcadia group is one of the biggest private employers in Britain, with over 44,000 staff in its 2,500 UK stores.

2011-11-24T11:09:00.001Z

Arcadia, the owner of Top Shop and BhS, reported a 38% fall in annual profits to £133m and says it expects to close up to 260 stores in the next few years.

Arcadia boss Sir Philip Green told the BBC the closures would come as store leases came up for renewal.

It also reported same-store UK sales down by 1.8%.

The group, which owns Burton, Dorothy Perkins and Miss Selfridge, said it expected heavy discounts on the high street this Christmas.

Total sales at its 3,100 outlets worldwide were down by 3.4% and sales have worsened, falling 4.4% since the start of the new financial year.

Sir Philip told the BBC: "We have got - from my memory - 450 or 460 stores where leases expire in the next three years. And I think on our latest summary we will close more than half of those on lease expiry. So I would say, I would expect us to close 250, 260.

"Now, there may be other opportunities that turn up that we might want to open. But certainly, in terms of our existing portfolio, currently that's our thinking."
Continue reading the main story
Arcadia's store collection
Top Shop
Top Man
Miss Selfridge
BhS
Dorothy Perkins
Wallis
Burtons
Evans
Outfit

Sir Philip said the warm weather had made trading difficult for many retailers: "It's been the hottest October and November in history. Nobody can deal with that. Winter goods are tough.

"Trading conditions remain extremely challenging, with style, quality and value at the top of our agenda and more important than ever."

He said the economic climate had heightened people's value of money: "I do believe everybody today is more financially aware than they've ever been in their life."

Sir Philip said the firm had decided not to pass on certain higher business costs and this had squeezed its profit margin by 1.8 percentage points, costing it £52.4m.

High Court yesterday granted Anglo Irish Bank a judgment compelling bankrupt Mr Quinn to repay some €416m

2011-11-24T11:01:00.001Z

Sean Quinn was yesterday hit with the largest judgment ever registered in an Irish court -- but his children are unlikely to face a similar action to hold them responsible for the family's €2.8bn debts until at least next year.

The High Court yesterday granted Anglo Irish Bank a judgment compelling bankrupt Mr Quinn to repay some €416m -- an amount that he admitted he owed the bailed-out bank.

On Monday, the head of the commercial court, Mr Justice Peter Kelly, will rule on another €1.6bn, which Anglo says is owed to it but which Mr Quinn disputes.

Mr Quinn's children have also signed personal guarantees in relation to some of the family's borrowing. In a recent affidavit, Anglo executive Richard Woodhouse said there was a "strong possibility" the children could "soon be declared bankrupt".

The Irish Independent understands, however, that Anglo is unlikely to move for judgments against the children over the coming weeks, since their loans are already the subject of extensive litigation.

Those cases are expected to come before the courts early next year, with the children poised to argue that Anglo had no right to seize the Quinn Group from them since the bank's loans to the family are invalid.

Meanwhile, Anglo will today ask the Belfast courts to overturn Mr Quinn's Northern Ireland bankruptcy. The bank is opposing Mr Quinn's claim that his 'centre of main interests' is Northern Ireland.

Mr Quinn's house is just across the Border in Ballyconnell, Co Cavan, while his business empire straddles both Fermanagh and Cavan. He argues that he has gone for bankruptcy in the North since he was born and bred there.

The bailed-out bank has been advised that it stands a greater chance of recovering assets from the one-time billionaire if his bankruptcy is done through the courts in Dublin rather than in Belfast.

If Mr Quinn goes through the process in the North, Anglo believes it could have to fork out hundreds of thousands in fees to specially retained legal advisers in that jurisdiction, rather than using its existing counsel.

The bank is also concerned that the Northern Ireland process could take longer to kick in than a process down south, making it harder for the bank to recover assets

Receiver's concern over Sean Quinn bankruptcy

2011-11-23T05:46:00.001Z

Sean Quinn was declared bankrupt earlier this month

The receiver appointed to oversee Sean Quinn's bankruptcy has expressed concerns about the statement of affairs submitted to the High Court in Belfast.

Lawyers for the receiver told a court in Dublin that the statement appeared to be unsatisfactory.

The former Anglo Irish bank is trying to get loans of more than 2bn euros repaid by Mr Quinn.

However, the case has been complicated by Mr Quinn's recent bankruptcy declaration in Belfast's High Court.

On Monday, the official receiver sought to have the case in Dublin adjourned.

The bank is also bringing an application to have Mr Quinn's bankruptcy annulled, because the institution maintains his centre of interest is in the Republic and not Northern Ireland.

That case will go before the Belfast courts later this week.

By declaring himself bankrupt in Northern Ireland, Mr Quinn once believed to be Ireland's richest man - would only have to wait a year before going back into business, rather than 12 years in the Republic.

The 63-year-old was stripped of control of his manufacturing and insurance business empire in April.

Don't just book it, Thomas Cook it. So runs the slogan. Would you

2011-11-22T12:56:00.001Z

Don't just book it, Thomas Cook it. So runs the slogan. Would you? Here's interim (that's reassuring) chief executive Sam Weihagen doing his safe-as-houses routine: "It's business as usual. We are trading within all our covenants. We have all the protection in place like any other travel company, and customers should not worry at all." Well, not quite like any other travel company. Thomas Cook of course holds an Air Travel Organisers' Licence from the Civil Aviation Authority which means customers should get their money back in the event of calamity. But the simple fear of being stranded a week after passengers of Austria's Comtel Air had to bribe pilots with £20,000 just to return to Birmingham is bound to unsettle would-be customers. There's a circle at work here and it is vicious. Given the choice between a similarly priced holiday with Thomas Cook or, say, Thomson, why would you risk the former? To counteract this, Thomas Cook might have to slash prices. That will eat into margins, cut profits and put banking covenants at risk. It might very quickly find it needs to borrow even more money. The company insists: "This is a robust business that has a strong future". We'll see.

Spanish yields soar in T-bill sale

2011-11-22T11:03:00.001Z

Spain’s Treasury saw yields rise to painfully high levels on Tuesday when it sold three-month bills at an average yield of 5.11 per cent, more than double the rate when it sold the same paper last month at 2.292 per cent. Six-month bills averaged 5.227 per cent in the auction, up from 3.302 per cent last month. Germany is not for turning on how to save the euro RBI warns over bias in bank system Comment Accountability and the Bank of England A total of €2.98bn of bills were sold, close to the maximum target of €3bn, but the yields were the highest in 14 years. The Treasury sold €2.01bn of the three-months bills and the offer was 2.9 times subscribed. In six-month bills, €970m were sold with a bid-to-cover ratio of 4.9. Bond market investors have given Spain no relief despite the election victory on Sunday of Mariano Rajoy, the centre-right Popular party leader who has pledged further austerity and economic reforms once he becomes prime minister in December.

China property dip sparks bank fears

2011-11-22T11:01:00.001Z

The number of property transactions in China’s largest cities has fallen to dangerously low levels, according to regulatory documents obtained by the Financial Times. According to the documents, the China Banking Regulatory Commission earlier this year ordered domestic banks to weigh the impact of a 30 per cent decline in housing transactions in “stress tests” aimed at determining the health of the Chinese financial system. More ON THIS STORY Video Imbalances are rocking China’s economy Stress tests leave unanswered questions Shanghai shines a light on China’s economy Editorial China’s bank reform Graphic China property map ON THIS TOPIC China fears lasting worldwide recession China warns US on territory disputes Lex Solar power David Pilling How America should adjust to the Pacific century While the government has been trying to rein in sky-high property prices, a Chinese real estate slump would have a significant ripple effect on the global economy. Property construction accounted for more than 13 per cent of China’s economy last year. In April the CBRC told banks to test their loan books against a 50 per cent fall in prices, and also a 30 per cent fall in transaction volumes. In October, however, property transactions fell 39 per cent year-on-year in China’s 15 biggest cities , according to government data. Nationwide, transactions dropped 11.6 per cent, accelerating from a 7 per cent fall in September. The fall-off in transactions has affected developers’ cash flows and, in some cases, their ability to repay bank loans. Rising defaults after a lending surge in 2009 and 2010, much of which ended up in the property sector, were cited by the International Monetary Fund this month as one of the Chinese financial sector’s biggest risks. The CBRC has not released the results and declined to comment. But one analyst who reviewed the stress-test documents said they did not take into account the impact that fewer transactions and lower property prices would have on bank collateral. “If developers can’t sell property and local governments can’t sell land, it’s hard to see why banks would be any better at either task under such conditions,” the analyst said. Chinese regulatory officials admit privately that the tests need to be improved. One senior official said banks were often unaware that loans to big state-owned enterprises had been funnelled to real estate subsidiaries, and acknowledged that the impact on collateral had not been fully taken into account. The weaknesses in the Chinese scenarios echo earlier problems with stress testing in the European Union, where regulators underestimated the potential impact of a sovereign debt crisis. The fear is that the impact of a bursting of the Chinese property bubble could yield a crisis just as dramatic as the one now unfolding in Europe. Rising defaults after a lending surge in 2009 and 2010, much of which ended up in the property sector, were flagged by the International Monetary Fund this month as one of the major risks hanging over the Chinese financial sector. While Beijing’s campaign to cool the property market has had its intended effect, some analysts worry that the government has underestimated the impact its measures are having. The measures, including higher downpayments and restrictions on home purchases, have taken nearly two years to gain traction.

Spain likely to see new protests after election

2011-11-22T04:00:00.000Z

Spain is likely to see renewed street protests after an election that brought a conservative government bent on austerity to power but also boosted a string of small parties. The center-right People's Party (PP) scored the biggest win for three decades in Sunday's election as voters punished the outgoing Socialist government for the worst economic crisis for decades. But many traditional left-wing voters could not bring themselves to vote for the PP because of fears that it will slash their vaunted health and education systems and make the economic pain even worse. They showed their disgust with the Socialists by voting for smaller parties. These groups, including regional, environmentalist and left-wing blocs, doubled their seats in Spain's lower house with the United Left (IU) coalition of communists and Greens making the biggest gains.

euro zone's debt crisis swept closer to the heart of Europe

2011-11-22T03:59:00.001Z

euro zone's debt crisis swept closer to the heart of Europe despite a clear-cut election victory in Spain for conservatives committed to austerity, adding to pressure on the European Central Bank to act more decisively. Spain's Socialists became the fifth government in the 17-nation currency area to be toppled by the sovereign debt crisis this year. Portugal, Ireland, Italy and Greece went before, while Slovakia's cabinet lost a confidence vote last month and faces a general election in March. An absolute parliamentary majority for Mariano Rajoy's centre-right Popular Party brought no respite on financial markets increasingly alarmed by the absence of an effective firewall to halt a meltdown on sovereign bond markets. Rajoy kept investors, and Spaniards, guessing about his plans to tackle the crisis, saying the constitution will make him wait until just before Dec. 25 to name an economy minister and explain how he will get five million people back to work. The risk premiums on Spanish, Italian, French and Belgian government bonds rose as investors fled to safe-haven German Bunds, while European shares fell more than 3 percent after Moody's warned that France's credit rating faced new dangers. "This crisis is hitting the core of the euro zone. We should have no illusions about this," European Economic and Monetary Affairs Commissioner Olli Rehn said. He defended the European Union executive's advocacy of austerity policies blamed for choking off growth and jobs. "One simply cannot build a growth strategy on accumulating more debt, when the capacity to service the current debt is questioned by the markets," Rehn told a Brussels seminar. "One cannot force foreign creditors to lend more money, if they don't have the confidence to do it." Greece's new technocrat prime minister, Lucas Papademos, on his maiden trip to Brussels, won an assurance that euro zone finance ministers should be in a position to agree at their next meeting, next Monday, to disburse vital bailout funds to avert bankruptcy. Papademos was expected to meet European Central Bank chief Mario Draghi on Tuesday evening in Frankfurt. Borrowing costs for both Spain and Italy hit levels regarded as unsustainable last week before the European Central Bank stepped in temporarily to steady the market. Two newspapers said the ECB's governing council had imposed a weekly limit of 20 billion euros on purchases of euro zone government bonds, a figure analysts say prevents it wielding massive deterrent power in the markets. Germany's central bank has led resistance to the bond-buying it sees as inflationary. The latest weekly figures released on Monday showed the central bank bought nearly 8 billion euros in the week to last Wednesday, far below that reported limit in a week when Italian and French spreads hit euro era highs. Critics say this reluctant, piecemeal approach is aggravating the situation rather than restoring confidence. ECB governing council member Ewald Nowotny, regarded as a dove, told a conference in Vienna that the central bank could not simply start printing money but would have to discuss its next response to the crisis. "What we certainly have to discuss is what is a role for the ECB in these difficult times, but this is also something we will discuss in Frankfurt at the appropriate time," he said.

Gang targets wealthy diners

2011-11-21T15:06:00.001Z

Diners at some of the city's most popular restaurants had their credit card details stolen by waiters working for gangs, who targeted customers with American Express black cards, then spent millions of dollars on expensive clothes and vintage wine, it is alleged. The cards of wealthy customers at Smith & Wollensky, the Capital Grille and Wolfgang's Steakhouse restaurants were allegedly "skimmed" and used to buy Rolex watches, Jimmy Choo shoes and Chanel handbags. Almost 30 people have been charged with crimes, including racketeering, conspiracy and grand larceny, after the alleged fraud ring was broken by police in Manhattan. Seven waiters at the restaurants are alleged by prosecutors to have been recruited by Luis Damian "D.J." Jacas, the 41-year-old alleged ringleader, and equipped with card-copying devices. They were instructed to focus on customers with premium credit cards, including the American Express black card, so that expensive purchases would not trigger alerts to customers. "The thieves were very selective, waiting until they were handed cards with extremely high or unlimited credit," said Manhattan district attorney Cyrus Vance.

The government has dismissed as false rumors that it is bankrupt.

2011-11-21T14:04:00.001Z

The government has dismissed as false rumors that it is bankrupt. The romors have been citing late payment of salaries to civil servants and disbursement of funds to institutions, including district councils.

Mustafa Mkulo , Minister for Finance and Economic Affairs speaking to The Guardian on Sunday in Dodoma over the weekend denounced reports published by a section of media about the government running bankrupt.

“So far all the salaries of civil servants have been paid. It is possible that there was a delay but the problem was not caused by claims that the government was broke,” Mkullo said.

He explained that all salaries are paid from the domestic revenue, adding that the Tanzania Revenue Authority (TRA) collections between July and October reached the 99 per cent of the target. “It is possible there are some technical problems.

The monthly economic review of the Bank of Tanzania (BoT) issued in September showed the revenue collections had risen to Sh487bn for August down from Sh449bn during the preceding month.

The increase in revenue collections is attributed to amplified use of Electronic Fiscal Devices (EFD). There was abnormal late payment of salaries in October and in some cases until November 7.

An official of Parliament who preferred anonymity told The Guardian on Sunday in Dodoma over the weekend was also of the opinion that the government was facing financial problems.

According to him, allowances for Bunge workers for the 4th Parliamentary meeting that ended in August this year were settled about four days before the Parliamentary Standing Committee began convening in Dar es Salaam, ahead of the Parliamentary meeting that ended in Dodoma yesterday.

Fall of ‘Mighty Quinn’ mirrors Irish collapse

2011-11-21T14:02:00.001Z

He was once Ireland’s richest man, with a personal fortune estimated at $6bn and all the trappings of the very wealthy – a helicopter, a private jet and a string of international properties. But in a Belfast court this month Sean Quinn was declared bankrupt with debts of €416m ($563m) and just over €11,000 in his bank accounts.

Nicknamed the “Mighty Quinn” for his tenacity in business, he founded the Quinn Group with a £100 loan in 1973 and built it into a conglomerate that ranged from cement to insurance. But a disastrous multibillion-euro gamble on the share price of Anglo Irish Bank prompted Mr Quinn’s spectacular fall from grace.
More
On this story
Liberty and Anglo acquire Quinn Insurance
Once-richest Irishman declared bankrupt
In depth Ireland fiscal crisis
Liberty Mutual moves in on Quinn empire
Lex Ireland and its banks
On this topic
Irish angry over budget leak to Germany
Students protest in Dublin over fees
N Ireland cross-border road plan scrapped
Tourism twinkles in the Irish murk

“My employment has been effectively terminated [without compensation],” said Mr Quinn in the debtor’s petition he filed to the High Court in Belfast, where he lists his assets as a 2004 Mercedes and a £35,000 ($55,000) plot of land he owns with his wife.

The rise and fall of the 63-year-old businessman mirrors Ireland’s Celtic Tiger boom and bust. It has also sparked one of the most expensive and bitter legal battles in Irish history.

Mr Quinn lost control of Quinn Insurance – one of the three main parts of the Quinn Group – in March 2010 when the Irish financial regulator placed the company into administration for failing to rectify a solvency shortfall. A year later Anglo enforced its security over €2bn in loans issued to the Quinn Group. A receiver was appointed, which led to Mr Quinn and other family members being stripped of their positions in the Quinn holding company.

Anglo, which was nationalised in 2009 at an estimated cost of €25bn-€30bn to Irish taxpayers, recently sold the Quinn insurance business to US firm Liberty Mutual and is restructuring the debt of the Quinn manufacturing business. Neither deal did much to reduce the overall Quinn debt to Anglo.
Anglo alleges ‘conspiracy’ over property portfolio

Anglo Irish Bank alleges that the Quinn family are involved in a “conspiracy” to move hundreds of millions of euros in property assets beyond the reach of the state-owned lender, writes Jamie Smyth.

The bank has filed lawsuits in Ireland, Sweden, Ukraine and Cyprus to try to prevent the transfer of flagship properties, which it claims are mortgaged to the bank. It is also seeking to lift legal injunctions obtained by the Quinn family to prevent the bank seizing control of the properties.

In an affidavit to a Cypriot court – where one of the main Quinn property firms is registered – Anglo alleges that the interests in Russian companies with assets worth about $188m were wrongly transferred for the benefit of Quinn family members for a nominal sum of €1,000 ($1,351).

The property assets held by the Russian companies include the 20 storey Kutuzoff tower in central Moscow, which is estimated to be worth $188m.

In Ukraine Anglo is seeking to overturn a court injunction preventing it from gaining control of the Ukrainia department store in central Kiev, which is worth about $80m. Anglo is also seeking to secure the rent roll from the Quinns’ Ukrainian properties, estimated to be worth about €30m a year.

The Quinn family oppose Anglo’s claims. They say the loans advanced by the bank were “illegal and unenforceable” and they are protecting the assets on the basis of strong legal advice.

The Quinn property portfolio includes several flagship properties including: the Q City office development in Hyderbad, India; the Casipy business centre in Moscow; and the Leonardo business centre in Kiev, Ukraine.

In 2007 Mr Quinn took a huge gamble on Anglo’s share price using contracts for difference, an anonymous form of investment that allows the holder to bet on price movements without buying the shares outright. Mr Quinn amassed a CFD-based holding in Anglo of close to 30 per cent, initially funding the bets with a €750m loan from the Quinn Group. But when the bank’s share price began falling sharply, the Quinn Group was advanced loans by Anglo to cover the CFD position.

It is not just Mr Quinn and taxpayers who stand to lose from the bet on Anglo. His decision in 2002 to transfer ownership of the Quinn Group to his five children has placed the family at the centre of one of several legal cases.

Anglo is pursuing the Quinn family for alleged debts of €2.88bn, which are related to loans advanced to the Quinn Group to fund the CFD transactions, property acquisitions and other deals. It is also challenging Mr Quinn’s decision to locate his bankruptcy in Northern Ireland, which has much more lenient insolvency regime than in the Republic of Ireland, where bankrupts must wait up to 12 years to be discharged.

Anglo alleges that Mr Quinn owes more than €2bn, not the €416m he claims. It claims his main centre of interest is in the Republic of Ireland.

On Monday in the Dublin High Court Anglo will seek a €2bn summary judgment order against Mr Quinn.

In a statement to the Financial Times the Quinn family said they were “saddened that Anglo at the expense of the Irish taxpayer continues to persecute” their father in relation to his bankruptcy.

The bank is engaged in a legal battle with the Quinn family for control of the third element of the Quinn Group – a €500m property empire spanning the UK, Ireland, Czech Republic, Ukraine, Russia, Turkey and India.

This portfolio is the jewel in the crown of the Quinn group and the only hope of repaying some of the alleged €2.8bn debt to Anglo.

The Quinn family itself is suing Anglo. They claim the bank advanced €2.34bn in loans to fund the CFD margin calls to support its share price. They allege that Anglo’s former chief executive David Drumm and chairman Sean Fitzpatrick advanced the loans to the Quinn Group in the full knowledge the money was being used to meet the CFD margin calls. They say the loans are “tainted with illegality” because they had an objective of market manipulation and therefore are not enforceable.

Anglo, which has recently been rebranded Irish Bank Resolution Corporation, denies these claims.

IRISH Bank Resolution Corporation is to ask the courts in Northern Ireland to overturn the bankruptcy of businessman Seán Quinn.

2011-11-21T13:59:00.001Z

THE IRISH Bank Resolution Corporation is to ask the courts in Northern Ireland to overturn the bankruptcy of businessman Seán Quinn.

The bankruptcy was secured last Friday with no notice to the bank, which initiated proceedings nine days earlier for summary judgment orders for more than €2 billion against Mr Quinn.

IBRC, formerly Anglo Irish Bank, is pressing ahead with its action here and Mr Justice Peter Kelly said yesterday it was “clearly at issue” whether the bankruptcy was properly obtained or, as the bank alleged, contrived to frustrate its case.

The corporation had “telling” information concerning Mr Quinn’s centre of main interests which was not before the Northern courts and left open the suggestion the bankruptcy was contrived and “forum shopping” as the Northern bankruptcy regime was more lenient than here, he said.

The corporation only yesterday received the bankruptcy petition which, its counsel Paul Gallagher SC said, asserted Mr Quinn’s centre of main interests is in Northern Ireland because companies of his are registered at Derrylin, Co Fermanagh, and he is domiciled for taxation there. The petition also set out a “not complete” schedule of his debts, referring to debts of €416 million and £375 million, while the cause of bankruptcy was described as due to his ongoing dispute with the corporation.

It was “extraordinary” for Mr Quinn to claim he first had difficulty paying his debts in April 2011 when he had provided guarantees of some €2.8 billion relating to companies which he knew could not pay. The bankruptcy was “obviously planned”.

The judge agreed to admit the application for €2 billion summary judgment orders against Mr Quinn to the Commercial Court but adjourned the hearing of the application to Monday next to allow the trustee in bankruptcy in the North to consider if he wishes to be represented.

Mr Quinn’s claim that his centre of main interest is Northern Ireland was set out in one sentence and was “seriously at odds” with the raft of information suggesting Mr Quinn’s commercial activities and residence is here and the money was borrowed from an Irish bank governed by Irish law, the judge said. “To go North certainly raises a few questions, to put it at its lowest.” The issue of annulment of bankruptcy was for the Northern courts to decide but, as of now, there was no impediment to the bank bringing legal action here against Mr Quinn, he added.

That action was for “astonishing” sums arising mainly from guarantees of borrowings of companies associated with Mr Quinn including for “ventures, or adventures” in places as far away as Russia and India.

Aidan Redmond SC, for Mr Quinn, earlier asked the judge to adjourn or stay the bank’s application for admission but the judge ruled, as Mr Quinn was a bankrupt and his counsel was not instructed by the trustee, Mr Quinn had no legal standing to make that application. Mr Quinn could not “have his cake and eat it” and he was not sympathetic to giving him any indulgence, the judge remarked.

Mr Gallagher, objecting to any stay, said he wondered how Mr Quinn, said to have assets of only €50,000 having been one of the richest men in Ireland, could be represented by lawyers making “beguiling and Delphic utterances”.

Mr Justice Kelly also admitted to the court the bank’s additional application for €3 million summary judgment orders against Mr Quinn and his wife Patricia arising from personal borrowings.

He rejected arguments by Bill Shipsey SC, for Ms Quinn, that delay by the bank in moving against Ms Quinn disentitled it to the fast-track procedures of the Commercial Court. This was a “well-resourced bank” and his client was a housewife who had not personally benefited from the loans, counsel said.

The judge said “context is everything” and there was no culpable delay by the bank as it had been involved in extensive negotiations to try and save the Quinn Group’s business. Ms Quinn was a director of several Quinn companies and this bank was “well-resourced by the taxpayer”, he added.

The bank had brought three actions, the largest being a claim for summary judgment against Mr Quinn for sums of €1.05 billion, $808 million and 13.8 billion yen brought under his guarantee of November 2007 in relation to the liabilities of Quinn Finance.

In affidavits, the bank said that, due to the scale of the borrowings and the large number of jobs dependent on the Quinn Group businesses, it had negotiated with Mr Quinn for some time rather than immediately call in the loans.

Alice Walton, heiress to the Walmart supermarket fortune and the the 10th richest woman in the United States, opened a spectacular fine art museum in her home town

2011-11-21T09:41:00.001Z

Architect Moshe Safdie looks out of a window next to a large red untitled magnifying disk sculpture by artist Fred Eversley at Crystal Bridges Museum of American Art in Bentonville, Arkansas. Photograph: Danny Johnston/AP

When Alice Walton, heiress to the Walmart supermarket fortune and the the 10th richest woman in the United States, opened a spectacular fine art museum in her home town, she might have expected plaudits and gratitude. It hasn't quite worked out that way.

The long-awaited opening of the Crystal Bridges Museum for American Art in Walton's home town of Bentonville, Arkansas, has provoked mixed reactions. Some have celebrated the unveiling of a significant new private art institution, but many have criticised the decision to spend $1.4bn of company and family foundation money as the retail colossus cuts back its workers' benefits.

Protesters at the museum have informally joined forces with the Occupy Wall Street camps across the US and point to growing ties between the Occupy movement and established trade unions.

The museum, which opened last weekend and features a survey of American art from Benjamin West to Georgia O'Keefe, from Norman Rockwell to Andy Warhol, and from Joan Mitchell to Walton Ford, has also come under criticism from within the art establishment for both inflating values and buying masterpieces from impoverished art institutions without giving local institutions a chance to match Walton's offer.

While historians point out that this is little different from 19th-century robber barons such as Henry Clay Frick and Andrew Carnegie amassing vast collections of European art and bringing it to America, the prospect of hundreds of masterpieces in rural Bentonville, two hours' drive from Tulsa, is still controversial.

Walton, at 62 the youngest of Walmart founder Sam Walton's four children, started buying specifically for the project in 2005. The Moshe Safdie-designed institution, which sits in 120 acres of dogwood trees and trails minutes from downtown Bentonville, already has 440 works on display and 800 in storage.

"We set market records for very few pieces that we purchased," says curator, David Houston. "But there is latent criticism from an east coast elite that bringing a famous painting like Thomas Eakins's [$68m] Gross Clinic to Arkansas is itself an act of cultural vandalism. We're bringing art to the public, but it's a different kind of public, and there are social and political connotations to that."

In the week since Crystal Bridges opened, it has already seen 5,000 registered visitors. "Sheer curiosity and hunger for an institution like this bears out Alice Walton's vision," Houston says.

Ben Waxman, spokesman for the union-affiliated Making Change@Walmart, said: "Opening a huge, opulent museum in the middle of nowhere while the company is cutting health insurance for its employees is troubling. It sends the message Wal-Mart doesn't care about them."

The issues of wealth distribution that have brought art into conflict with the labour movement at Crystal Bridges have also been on display at Sotheby's during the billion-dollar modern, impressionist and contemporary sales earlier this month in New York.

Since August, when Sotheby's dismissed 43 unionised art handlers, its salesrooms have been besieged by Teamsters union members, bearing an inflatable rat and a fat cat banker with a cigar in one hand and throttled worker in the other. "The company is having its most profitable year in 267 years and they locked us out in the middle of our contract," said Teamsters member Phil Cortero. "Sotheby's represents the richest people in the world. When you lose your shirt down on Wall Street you come and hock your stuff here."

Increasingly, the Teamsters are joined by Occupy Museum activists, chanting "We are the 99%!" They protest that the multimillion dollar art handled by auction houses is used to maintain and transfer the wealth of the 1%.

Outside Christie's, which is not involved in the dispute, Los Angeles property developer Eli Broad, one of America's wealthiest men, confirmed as much to the New York Times. "People would rather have art than gold or paper," he said.

OWS Labor Outreach member Mike Friedman said that Occupy had no problem with the art itself. "But at a time when we're seeing cutbacks in health and education spending, we're seeing the transfer of wealth by way of tax cuts and subsidies to an elite who use excesses of that transfer to buy these magnificent works of art."

With the end of the Zuccotti Park sit-in, Occupy says it plans to initiate focused protests against cultural institutions associated with big Wall Street donors. It has singled out Lincoln Center, home to the New York Philharmonic, the Metropolitan Opera and New York fashion week, which is financially supported by Tea Party funder David Koch.

Back at Crystal Bridges, Houston argues that it will take years to see the full effect of how the Walton family has used its wealth. The family foundation is active in a whole variety of charitable activities, many of them educational, he says. "Their intent is not to create a shrine to an individual or even a family. Their goal is to create a tremendous cultural resource in this part of the world."

British bonds win 'safe haven' tag in eurozone debt storm

2011-11-20T11:05:00.001Z

British government bonds are attracting strong support, in sharp contrast to their troubled eurozone peers as investors seek a safehaven from a debt crisis now spreading to Italy, Spain and even France. British government bonds, or gilts as they are known, are in huge demand largely because the Bank of England is buying them up with newly-created money that it hopes can in turn be used to stimulate an anaemic economic recovery, analysts say. But investors are also reassured by the British coalition government's determined efforts to slash state debt and avoid the severe troubles that have snared the crisis-hit eurozone trio of Greece, Ireland and Portugal.

German chancellor may have an unexpected ally in David Cameron, the U.K. prime minister.

2011-11-19T14:43:00.001Z

Even as opposition grows to Angela Merkel's campaign for an overhaul of the European treaty, the German chancellor may have an unexpected ally in David Cameron, the U.K. prime minister.

When Mr. Cameron meets Ms. Merkel for talks in Berlin on Friday, he is expected to offer to back limited changes to the European treaty in exchange for guarantees that the U.K. will continue to have an explicit opt out from tighter fiscal rules. Mr. Cameron also wants guarantees that none of the changes Ms. Merkel envisages will hurt London as a global financial center, according to U.K. officials familiar with the matter.

Mr. Cameron and his finance minister, George Osborne, have openly backed the need for greater euro-zone integration, even if it requires treaty change. Berlin's more ambitious changes—if they help stabilize the euro zone—could therefore be quietly welcomed in Whitehall, where the knock-on effects of the euro zone's troubles on the U.K. economy are the major concern.

But there are two catches, U.K. officials say. First, Britain would want explicit recognition that it would not be bound by tighter fiscal rules—extending the opt-out it currently enjoys in Brussels for running large deficits. If it gets this, it could help the government argue there is no need for a referendum on the treaty changes, officials say. The U.K. coalition government has written into law a pledge to hold a vote if further U.K. powers are transferred to Brussels. Second, it also wants safeguards to make sure that as euro-zone integration tightens it wouldn't be locked out of key decisions on the single market or on regulatory decisions that would affect the City of London.

Ensuring London's special status outside the euro-zone could be the way for Berlin and Brussels to gain Mr. Cameron as a powerful ally in their bid to revamp the European Union. A show of support from Mr. Cameron would be a welcome sign for Ms. Merkel, who has faced a week of constant criticism of her drive for treaty change from visiting leaders ahead of the Dec. 9 European Council meeting.

Ms. Merkel faced fresh opposition to the plan on Thursday amid warnings that euro-zone integration without involving the broader EU could be driving a wedge between the 17 euro-zone members and the remaining 10 EU members who aren't in the currency club.

Members outside the euro zone are growing increasingly concerned that the 17-member currency bloc is distancing itself from the other 10 member states in the broader EU. Many of the decisions taken to combat the euro-zone debt crisis, which also have a direct impact on the whole EU, are taken by a small group of euro-zone officials.

Concerned about the growing split, Danish Prime Minister Helle Thorning-Schmidt said after meeting Ms. Merkel in Berlin that the EU as a whole must deal with the crisis and, in another blow for Ms. Merkel, rejected the chancellor's pleas for wide-ranging changes to the European treaty. "In the crisis we are now facing, it is perhaps more important that the 27 member states stick together," Ms. Thorning-Schmidt said at a joint news conference with Mrs. Merkel. "It is exactly when we have a crisis that we should stick together as the European Union, use our institutions and use the community method."

Irish Prime Minister Enda Kenny was in Berlin for talks on Wednesday and also rejected Ms. Merkel's bid for treaty changes, saying the existing European treaty provides all the tools Europe needs to deal with its debt crisis.

Mr. Cameron has expressed concern that a growing split between euro-zone members and the other 10 EU countries will leave the U.K. frozen out of decision making on key issues like financial regulation. He is concerned that if the euro-zone countries obtain greater fiscal-policy union, the bloc could form a caucus within the EU to make changes at the expense of the member states outside the common currency. To assuage these concerns, Mr. Cameron may support Ms. Merkel's bid for treaty change if the U.K can receive protection of its interests.

Speaking at a conference before her meeting with Ms. Thorning-Schmidt in Berlin on Thursday, Mrs. Merkel acknowledged that there were "certain tensions" between the euro states and those outside the currency club. After the meeting, Mrs. Merkel sought to calm any fears of a split in the EU.

"Even though the euro member states surely have to resolve a few problems among their 17 member states, we will never forget that the 27 belong together, that the internal market is the foundation upon which the euro can work," she said during the news conference in the chancellery.

Mrs. Merkel wants changes to the European treaty that would allow far-reaching integration of fiscal policy within the euro zone to match the currency union. Germany also wants tough, automatic sanctions against euro-zone members that violate the rules on debts and deficits contained in the Maastricht Treaty on Economic and Monetary Union.

"We need to assure that we don't endanger the healthy part of Europe through the part that currently has its hands full to survive," Ruediger Grube, chief executive of Deutsche Bahn, the German railway, said. "The idea of sharpening the rules certainly isn't wrong."

Why E.U. collapse is more likely than the fall of the euro

2011-11-19T14:41:00.001Z

European politics has become a giant Jenga game. Since June 2010 governments have fallen in the Netherlands, Slovakia, Belgium, Ireland, Finland, Portugal, Slovenia, Greece and Italy. The question is not: Who will be next? That’s easy. (Spain’s Socialist government will be pulverized in this weekend’s elections.) The real question is: When will the Jenga tower topple? Many people assume that the tipping point will come when one country — most likely Greece — leaves or is ejected from Europe’s monetary union. But the scenario that worries Eurocrats is different. They fear that a country could leave the European Union itself. This is by no means an irrational anxiety. Under E.U. law, it would be much easier for Britain to leave the European Union than for Greece to leave the euro zone. Thus the process of European integration has reached a richly ironic point: The breakdown of the European Union is now more likely than the collapse of the single currency that was supposed to bind it together. This is not surprising. In March 2000, Larry Kotlikoff and I wrote in Foreign Affairs, “History offers few examples of successful adjustments on the scale necessary in certain European countries today. What it does offer are several examples of monetary unions disintegrating when fiscal strains became incompatible with the unpleasant arithmetic of a single currency.” The euro, we predicted, “could degenerate — not overnight, but within the next decade.” Our timing was not bad. The degeneration of the single currency began in 2010, though the crisis has certainly intensified in recent months. We specified “degeneration” to highlight the generational imbalances arising from Europe’s combination of aging populations and over-generous welfare systems. Even if there had been no financial crisis emanating from the U.S. subprime mortgage crisis that began in 2007, the European monetary system would still have degenerated as public debts soared. But we also struggled to see how, once assembled, the euro zone could be dismantled. The costs of exit would be prohibitive for a small peripheral country such as Greece, which would overnight lose access to any source of external credit. And a Greek departure would raise the probability of others leaving, causing contagion throughout Southern Europe. Finally, if all the weaker brethren were to leave the monetary union except Germany, Austria, the Netherlands and Finland, the strengthening of the euro would cause significant pain to the exporters of those countries. In short, almost nobody would gain from a breakup of the euro zone. This is why I am not among the growing throng of pundits predicting the degeneration of the euro — a number of whom argued with equal self-confidence a dozen years ago that the euro would be a great success. Anyone who closely followed events of the 1990s had a clear idea of what a monetary union with the Federal Republic of Germany would entail: short-term spending power but long-term unemployment mitigated by handouts.

Saif al-Islam Gaddafi after his capture, his fingers wrapped in bandages and his legs covered with a blanket

2011-11-19T14:14:00.001Z

. Photograph: Reuters Tv/Reuters

Saif al-Islam Gaddafi, the fugitive son of Libya's deceased former dictator, has been arrested in southern Libya, according to officials from the country's new government.

Libyan state TV reported that Saif has arrived in captivity and unhurt at an army base in the town of Zintan, 90 miles south-west of Tripoli.

Muammar Gaddafi's second and highest-profile son was captured along with several bodyguards by fighters near the town of Obari in Libya's southern desert, said the interim justice minister and other officials.

Saif was said to be in good health, according to the justice minister Mohammed al-Alagi.

"We have arrested Saif al-Islam Gaddafi in [the] Obari area," the minister told Reuters.

Saif was captured near the southern city of Sabha with two aides trying to smuggle him out to neighbouring Niger, militia commander Bashir al-Tayeleb said.

Zintan, a base for forces in the Nafusa Mountains which played a key part in the storming of Tripoli in the summer, is reported to have crowds dancing in the streets and waving the Libyan flag.

There are reports that an angry mob tried to storm the plane on which Saif was taken to the western mountain town of Zintan, the home of one of the largest revolutionary brigades in Libya.

Gunfire is echoing across the capital, Tripoli, where large crowds have gathered in Martyrs' Square firing volleys of automatic fire in the air. "A great day, a great day," said Abdullah, a taxi driver, stuck in one of the traffic jams that built up around the square.

A Reuters reporter said a man who appeared to be Saif, but who refused to confirm his identity, was on a plane flown by militiamen to the town.

The man wore traditional robes with a scarf pulled over his face, but his features, visible despite a heavy black beard, as well as his rimless spectacles, conformed to pictures of the 39-year-old younger Gaddafi.

The man's thumb, index finger and another finger were heavily bandaged.

Libyan TV also showed him He is sitting by a bed and holding up three bandaged fingers as a guard looks on.

Saif al-Islam Gaddafi after his capture, his fingers wrapped in bandages and his legs covered with a blanket

2011-11-19T14:12:00.001Z