Greece approve austerity as protesters, police clash

 

Greek lawmakers approved a new round of drastic austerity measures late Sunday after a long day of street battles between police and protesters left Athens buildings ablaze and the streets in chaos.

 

The deputies defied the 100,000-strong turnout in Athens and Thessaloniki and approved another round of stringent budget measures requested by Greece s international creditors in return for a multi-billion rescue fund.

 

Greek Prime Minister Lucas Papademos denounced the violence in the debate leading up to the vote, saying the street battles around the parliament building had no place in a democracy.

 

Deputies “will assume their responsibility” and make the most important choice of “advancing with Europe and the single currency”, Papademos said shortly before the vote took place.

 

The fire brigade said 10 buildings were set ablaze in central Athens, most of them by petrol bombs hurled by masked protesters who have been a common presence at anti-austerity marches since the crisis began in 2010.

 

The health ministry said 54 people were injured in the day s events.

 

Fire engines were initially unable to intervene because of the size of the protest and the chaos that filled the streets around the parliament building, where lawmakers debated the austerity plan ahead of a late-night vote.

 

When protesters wearing gas masks tried to break through the riot police cordon around parliament, the standoff broke out into running battles, with tear gas canisters and rocks flying in opposite directions.

 

An estimated 80,000 protesters gathered in Athens, police said, matching the biggest turnouts achieved against earlier austerity packages last year, while around 20,000 also demonstrated in the second city of Thessaloniki.

 

Finance Minister Evangelos Venizelos told parliament it had to back the government-approved plan to unlock a 130 billion euro ($171 billion) rescue fund from the EU and the IMF, or Greece would be forced to default.

 

“The situation is very clear. Tonight at midnight before the markets open the Greek parliament must send the message that our nation can and will (support the debt deal),” Venizelos said.

 

The pressure on Greece is huge as leaders in the eurozone core countries express their exasperation with Athens and increasingly minimise the wider dangers of the country stumbling out of the single currency.
 

Japan account surplus tumbles to 43.9pc

 

The country logged a trade deficit due to lower exports and higher energy costs, government data showed Wednesday.

 

The surplus in the current account, the broadest measure of trade with the rest of the world, stood at 9.63 trillion yen ($125 billion) in 2011, the lowest level since 1996, the finance ministry said.

 

The figure was down 43.9 percent from 2010, the sharpest year-on-year decline since 1985.

 

The surplus in returns on overseas investment and other income expanded “but the balance of goods and services trade slipped into the red, reducing the surplus in the current account,” the ministry said in a statement.

 

The traditionally export-led economy has shifted to more overseas production as shown by strong figures for earnings from overseas assets held by Japan. Those earnings rose by nearly 20 percent to 14.03 trillion yen.

 

Analysts say any systemic shift in Japan s current account numbers could threaten the country s ability to finance its large government budget deficits.

 

Earlier data from the ministry showed Japan suffered its first annual trade deficit in more than 30 years in 2011 after the March quake-tsunami and strong yen hit exports while high fuel costs pushed up import bills.

 

The current account surplus for December alone dropped 74.7 percent to 303.5 billion yen, decreasing year-on-year for the 10th straight month since the March earthquake and tsunami disasters.

 

The surplus was smaller than an average of 337.5 billion yen expected by economists surveyed by the Nikkei business daily.

 

The March disaster disrupted manufacturing supply chains across Japan, hampering exports. It also knocked out cooling systems at a major nuclear power plant on the nation s east coast, sparking the world s worst atomic disaster in 25 years and sending confidence in the technology plummeting.

 

Japan is resource-poor and its fossil fuel imports have soared in the wake of the Fukushima nuclear crisis, with atomic power stations being taken offline and thermal fuel plants used to make up the difference.

 

In addition, the eurozone debt crisis has slowed the global economy and sent traders scurrying to the safety of the yen, driving up its value and reducing Japanese exporters  incomes.

 

The current account measures trade in goods, services, tourism and investment.
 

US urges Europe to increase defence budget

 

The United States will renew its commitment to Europe s security by contributing to a NATO force but Europeans must also invest in their own defence, the US defence chief said Saturday.

 

Leon Panetta sought to reassure Europe that Washington will not abandon its European allies even as the US military withdraws troops, cuts its budget and shifts its strategy to Asia and the Middle East.

 

“The peace and prosperity of Europe is critically important to the US,” Panetta said in a speech at the Munich Security Conference.

 

“Europe remains our security partner of choice for military operations and diplomacy around the world — as we saw in Libya last year, and as we see in Afghanistan every day,” he said.

 

“We are therefore deeply committed to strengthening transatlantic security partnerships and institutions, including NATO,” he said at a round table discussion alongside US Secretary of State Hillary Clinton.

 

While the US military plans to withdraw two of its four army brigades stationed in Europe in 2014, Panetta announced that a US-based brigade will contribute to the NATO Response Force, a 13,000-strong unit created in 2002.

 

The US military will also rotate a battalion-sized task force to Germany to take part in exercises and training.

 

“In all, the steps Europe can expect from the United States amount to a vote of confidence from Washington in the future of the alliance, especially in a period of fiscal austerity,” he said.

 

Calling on Europe to “cast a similar vote of confidence,” he renewed pressure on allies to keep investing in defence and to pool resources as part of the “Smart Defence” initiative aimed at maintaining military capabilities.

 

“Approaches like Smart Defence help us spend together sensibly, but they cannot be an excuse to cut budgets further,” he said.
 

RBI deputy says will use OMOs to tackle cash shortfall

NEW DEHLI: The Reserve Bank of India will likely conduct more debt buybacks through open market operations to meet cash shortages in between monetary policy reviews, Deputy Governor Subir Gokarn said.

“At this point, OMO is still an approach that we are following in response to assessment of liquidity tightness,” Gokarn told reporters on Tuesday.

“(In) between policy announcements, clearly, this is something that we can continue to use as and when the need arises,” Gokarn said.

Bond yields fell after Gokarn’s comments, with the benchmark 10-year bond yield falling 5 basis points to 8.24 percent, as expectations of more buybacks strengthened.

The RBI announced a cut in CRR, or the proportion of deposits banks set aside with the RBI in cash, by 50 basis points to 5.5 percent at its monetary policy review on Jan 24.

The RBI has not conducted any buybacks since the CRR cut.

Gokarn said that pressures were persisting on liquidity and further cuts in cash reserve ratio was an option.

“That decision will be taken when we do our mid-quarter review, especially after having done one, the possibility of another is always on the table,” he said.

The CRR cut, which came into effect on Saturday, released about 320 billion rupees of liquidity into a cash-strapped system.

In the policy review, the RBI kept interest rates unchanged citing higher core inflation.

Annual headline inflation, measured by the wholesale price index, slowed to a two-year low of 7.47 percent in December, thanks to a sharp decline in food inflation.

“We are looking at an inflation trajectory going into the next year, and the point we made is that the fiscal position that emerges in the budget for next year is going to have an impact on that trajectory,” Gokarn said.

“The (fiscal deficit) number that comes out for 2011-12, whatever that number may be, is really something that has had an influence on the inflation trajectory over the previous year. So the number for FY13 is going to be an important factor,” he said.

Gokarn said the RBI would resort to measures taken in November and December, if needed, to alleviate any pressure on the rupee.

So far in January, the rupee has gained 7.3 percent aided by renewed global risk appetite and dollar inflows into local debt.

The local currency fell about 16 percent in 2011.

“If there is further pressure on the rupee, obviously the measures that we took in November and December are still on the table in terms of addressing any speculative pressures.”

The rupee was stronger at 49.33/35 to the dollar on Tuesday, compared with 49.79/80 at previous close.

“The rupee is now in a range that is something consistent with our approach,” Gokarn said. AGENCIES

US not seeking military bases in SE Asia

 

The United States wants a greater military presence in Southeast Asia but does not seek permanent bases anywhere in the region, the chief of the Pacific Command said Friday.

 

Despite impending budget cuts, the U.S. wants to reinforce its presence in the Asia-Pacific, as its involvement in the wars in Iraq and Afghanistan winds down. That reflects the region s growing economic importance and concern about China s military capabilities and intentions.

 

Adm. said U.S. forces heavily deployed in Japan and South Korea are now “biased” toward Northeast Asia.

 

He said arrangements announced in recent months to station American troops in northern Australia and dock Navy vessels in Singapore would enable the U.S. to rotate forces through Southeast Asia more easily, and without the cost of sustaining bases there.

 

He indicated the U.S. was seeking something similar with the Philippines.

 

“We would welcome discussions with the Philippines along those lines but there s no aspirations for bases in Southeast Asia,” Willard told a news conference.

 

In Washington Friday, senior U.S. and Philippine diplomats and defense officials were rounding off two days of strategic talks on how they can enhance military cooperation.

 

Both sides have been at pains to say re-establishing the kind of permanent American base that was closed in the Philippines 20 years ago is not on the cards. But in Manila, Foreign Secretary Albert Del Rosario said in a statement the Philippines was considering more joint military exercises with the U.S. and “a rotating and more frequent presence by them.”

 

The Philippines also wants more training and American military hardware: an additional U.S. Coast Guard cutter, a squadron of F-16 fighter jets and other weapons to bolster its territorial defense.
 

‘Less troops, more drones is new US defense policy’

 

The plan, to be unveiled by Defense Secretary Leon Panetta on Thursday and in budget documents next month, calls for a 30% increase in the U.S. fleet of armed unmanned aircraft in the coming years, the Wall Street Journal quoted defense officials as saying.

 

It also foresees the deployment of more special-operations teams at a growing number of small “lily pad” bases across the globe where they can mentor local allies and launch missions.

 

The utility of such tools was evident on Wednesday after an elite team—including members of Navy SEAL Team Six, the unit that killed Osama bin Laden—parachuted into Somalia and freed an American woman and Danish man held hostage for months.

 

The strategy reflects the Obama administration s increasing focus on small, secret operations in place of larger wars. The shift follows the U.S. troop pullout from Iraq in December, and comes alongside the gradual U.S. withdrawal from Afghanistan, where a troop-intensive strategy is giving way to an emphasis on training Afghan forces and on hunt-and-kill missions.
Defense officials said the U.S. Army plans to eliminate at least eight brigades while reducing the size of the active duty Army from 570,000 to 490,000, cuts that are likely to hit armored and heavy infantry units the hardest. But drone and special-operations deployments would continue to grow as they have in recent years.

 

At the same time, the Army aims to accentuate the importance of special operations by preserving light, rapidly deployable units such as the 82nd and the 101st Airborne divisions.

 

“What we really want is to see the Army adopt the mentality of special forces,” said a military officer who advises Pentagon leaders.

 

The new strategy would assign specific U.S.-based Army brigades and Marine Expeditionary units to different regions of the world, where they would travel regularly for joint exercises and other missions, using permanent facilities and the forward-staging bases that some advisers call lily pads.

 

Marines, for example, will use a new base in Darwin, Australia, as a launch pad for Southeast Asia, while the U.S. is in talks to expand the U.S. presence in the Philippines—potential signals to China that the U.S. has quick-response capability in its backyard, defense officials said.

 

Yet many of the proposed bases will be secret and could temporarily house small commando teams, the officials said.

“There are going to be times when action is called upon, like Tuesday night, when it will be clearly advantageous to be forward deployed,” a military official said, referring to the Somalia operation. “On the other hand, most of the time it will help you to be there to develop host nation or regional security.”

 

The Pentagon still will invest in some big-ticket items, including the F-35 stealth fighter, as a counterweight to rising powers, including China—although the department is poised to announce this week that it is going to slow procurement of the new plane, said defense officials.

 

Lahore: Session courts issue arrest warrants of 150 cops

The Additional Judges of 36 Session Courts of Lahore have issued arrests warrants of more than 150 police personnel for not obeying the court orders.The courts have also ordered to arrest these personnel.

The police officials against whom the arrest warrants have been issued include DSPs, SHOs, Sub Inspectors, ASIs and constables.

Italy: Small town mints own money to fight austerity

 A small town in Italy, Filettino, set in rugged hill country around 100 km east of Rome, is rebelling against a proposal to merge the governments of towns with fewer than 1,000 inhabitants to save money.

Filettino has only around 550 people, but instead of merging with neighboring Trevi, Mayor Luca Sellari is trying to go it alone and set up a “principality” along the lines of the famous republic of San Marino to the north.

 “We aim to achieve real autonomy from Italy and we have the financial resources to do it,” Sellari said. There was no immediate comment from the central government in Rome.

Mayors from all over Italy are up in arms about proposals to cut local government funding and merge small towns as part of a 45.5 billion euro ($65.3 billion) austerity plan to balance the country s budget by 2013.

Govt failed to control prices: Nawaz

Talking to mediamen after having a meeting with PML-N coordination committees, he said the yellow cab scheme was announced in the budget.

According to plan, 20,000 cabs would be launched at once and distributed candidly on easy installments. It would not only eradicate unemployment but also promote the industrial sector.

He suggested that the federal government should launch such schemes on national level.

He said that the government had failed to control over price hike. If the expenses of government are curtailed, “we need no foreign aid”, he added.

CM Shahbaz Sharif himself drove the cad while Nawaz Sharif sit on the front seat and Zafar Iqbal Jhagra and Pir Sabir Shah in the rear.

Pakistani stocks up; rupee firms; o/n rates unchanged

KARACHI: Pakistani stocks ended higher on Friday, as investors accumulated energy sector shares following a rise in international oil prices, dealers said.

The Karachi Stock Exchange’s benchmark 100-share index . KSE ended 0.39 percent, or 47.63 points, higher at 12,377.77.

Turnover fell to 102.6 million shares from 111.86 million traded on Thursday.

“The increase in international oil prices helped the KSE-100 index to close 50 points up,” said Samar Iqbal, a dealer at brokers Topline Securities.

Dealers expect a steady market in the coming days, despite the hit to sentiment from the government’s decision to maintain a capital gains tax on individual investments in the budget for the fiscal year 2011/12 (July-June), announced last week.

In the currency market, the rupee PKR= ended at 85.68/71 to the dollar, firmer than the previous day’s close of 85.73/77 because of a lack of import payments.

The rupee hit a record low of 86.50 last month, and dealers said the local unit may face some pressure in the days ahead due to increased demand for dollars for import payments.

In the money market, overnight rates remained at the top level of 13.90 percent, unchanged from previous day’s close amid tight liquidity in the interbank market.

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