Thursday, 19 June 2014
Mexico cenbank could change 2014 growth forecast after weak Q1-Carstens
Mexico's central bank could modify its 2014 growth estimate again this year after first quarter growth proved even weaker than expected, Banco de Mexico governor Agustin Carstens said on Thursday.
The central bank lowered its growth estimate last month to a range of 2.3 to 3.3 percent from 3 to 4 percent after growth disappointed in the first quarter.
"The slowdown that we saw in the first quarter was deeper than we had anticipated," Carstens told reporters after appearing on a congressional panel. "That will possibly make us modify the growth range for this year in due course."
The central bank surprised markets by cutting its benchmark interest rate by 50 basis points to a record low of 3.0 percent on June 6 and then noted that March growth was even weaker than expected when it cut its forecast in May.
Source: Reuters
The central bank lowered its growth estimate last month to a range of 2.3 to 3.3 percent from 3 to 4 percent after growth disappointed in the first quarter.
"The slowdown that we saw in the first quarter was deeper than we had anticipated," Carstens told reporters after appearing on a congressional panel. "That will possibly make us modify the growth range for this year in due course."
The central bank surprised markets by cutting its benchmark interest rate by 50 basis points to a record low of 3.0 percent on June 6 and then noted that March growth was even weaker than expected when it cut its forecast in May.
Source: Reuters
Peru's Humala proposes new tax stability contract for big miners
| Fri, 20 Jun 00:01:00 GMT |
| (Adds reaction from mining association, context on economic reform package and slowing economy) LIMA, June 19 (Reuters) - Peru's President Ollanta Humala proposed a new tax stability contract for mining companies that would lock in taxation rates for 15 years on investments of at least $500 million, legislation published on Thursday showed. The measure is part of a package of reforms Humala is asking Congress to pass urgently to boost private investment in the Andean country as its economy slows on a drop in mining exports. The legislation broadens existing tax stability contracts as well to cover additional investments, such as mining expansions. Humala's ruling party usually finds support from opposition lawmakers in to push his economic proposals through Congress. Global mining companies rolling out big projects in Peru in the coming years, such as Southern Copper "It's a good legislative proposal that will promote investments," Morales said, adding that more should also be done to encourage local companies and smaller projects. Other measures in the reform package unveiled by Humala's government last week include redoubling efforts to reduce red tape, improving transparency and relaxing environmental regulations. The credit ratings agency Moody's Investors Service said earlier this week that the reforms were "credit positive," as they would put Peru on track to boost potential output without increasing spending. Peru's economy, which expanded by more than 6 percent during most of the past decade, grew by 4 percent in the first four months of 2014 from the same period a year earlier. The finance ministry and central bank, which initially predicted an economic rebound early this year, have said they now expect to see stronger growth in the second half of 2014. Mining makes up about 15 percent of Peru's gross domestic product and 60 percent of the Andean economy's total exports. The global copper, gold and silver exporter has a mining investment pipeline of more than $60 billion, according to data from the energy and mines ministry. |
Brent holds near $115, heads for 2nd weekly gain on Iraq turmoil
Brent crude held near $115 a barrel on Friday, close to a nine-month high and headed for its second weekly gain on increased risks of supply disruptions from Iraq.
Iraqi government forces battled Sunni militants for control of the country's biggest refinery on Thursday. If the 300,000 barrels per day refinery stays closed, Baghdad will need to import more oil products to meet its own domestic consumption, further tightening oil markets. [ID:nL6N0P018N]
Fields south of Baghdad, where most of Iraq's 3.3 million barrels per day (bpd) of oil is produced, as well as exports remain unaffected. But heavy fighting north of the capital and foreign oil firms beginning to pull out staff pose a risk to supplies from OPEC's number two producer.
"This raises the risk of production halts in the near future, so although there are no disruptions at the moment, we do see further upside to prices," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.
Brent crudeslipped 8 cents to $114.98 a barrel at 0333 GMT, after ending 80 cents higher at $115.06 a barrel, the highest settlement since Sept. 9, 2013. The contract was up 1.3 percent for the week, after rising 4.4 percent last week.
The U.S. crude oil contract, which expires on Friday, increased 27 cents to $106.70 a barrel. The contract settled 46 cents higher in the previous session, but was on course for a third weekly decline in four.
"Brent is at a high for the year, triggering some short covering and possibly adding further long positions," said Hasegawa. "The contract may go to a previous high of around $117.30 hit last August."
Source: Reuters
Iraqi government forces battled Sunni militants for control of the country's biggest refinery on Thursday. If the 300,000 barrels per day refinery stays closed, Baghdad will need to import more oil products to meet its own domestic consumption, further tightening oil markets. [ID:nL6N0P018N]
Fields south of Baghdad, where most of Iraq's 3.3 million barrels per day (bpd) of oil is produced, as well as exports remain unaffected. But heavy fighting north of the capital and foreign oil firms beginning to pull out staff pose a risk to supplies from OPEC's number two producer.
"This raises the risk of production halts in the near future, so although there are no disruptions at the moment, we do see further upside to prices," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.
Brent crude
The U.S. crude oil contract
"Brent is at a high for the year, triggering some short covering and possibly adding further long positions," said Hasegawa. "The contract may go to a previous high of around $117.30 hit last August."
Ukraine forces battle separatists after truce "refused"
Ukrainian troops and pro-Russian separatists were locked in fierce fighting in the east of Ukraine on Thursday and a rebel commander acknowledged big losses among separatists heavily outgunned by government forces.
Even as President Petro Poroshenko and his team prepared to unveil their blueprint for ending more than two months of rebellion, government forces, using artillery and heavy armour, said they were tightening the noose on separatists near Krasny Liman, north of the main regional hub of Donetsk.
Government forces said the fighting erupted in the early hours after rebels refused to lay down their arms as part of Poroshenko's peace plan.
Both Ukrainian government and rebel accounts of the fighting suggested a major battle involving armoured vehicles including tanks.
One military source said 4,000 separatists were involved, while rebel sources in Donetsk said Ukrainian infantry supported by 20 tanks and many other armoured vehicles were storming the village of Yampil, about 12 km (7 miles) east of Krasny Liman.
A top rebel commander, Igor Strelkov, reported "heavy losses" in equipment and arms among the separatists, faced with a huge superiority in heavy armour on the government side at Yampil.
"We beat off the first attack and destroyed one tank. But it is difficult to take on 20 tanks. The battle is going on. Our people are holding but we can't rule out that they (government forces) will break through," Strelkov, who is also known as Girkin, said in a videoed statement. He urged Moscow to "take some measures".
There was no word on casualties from the government side.
From the nearby town of Siversk, artillery blasts, small arms fire and machinegun-fire could be heard from about 3 km away. From high ground, smoke could be seen billowing from rebel positions under attack.
Poroshenko, installed as a president on June 7, is pushing a peace plan to end the rebellion which he said would be unveiled soon and presented to European Union ministers early next week.
It includes an offer of a unilateral ceasefire by government forces and amnesty for the separatists - but only if they lay down their weapons.
Poroshenko's website later said he outlined the plan to Russian President Vladimir Putin by phone on Thursday, highlighting the need for hostages to be freed and "an effective regime of control" established on the joint border.
It said Poroshenko emphasised he hoped for Putin's support for the plan and for any ceasefire that would be declared.
REBELS "REFUSED TO DISARM"
A government forces spokesman said on Thursday it was when rebels refused a call to disarm - made in leaflets fired by big guns into rebel positions - that fighting broke out in the early hours of the morning.
"We issued an ultimatum to the terrorists overnight to surrender their weapons. We guarantee their safety and investigation in line with Ukrainian law ... They refused," said government forces spokesman Vladyslav Seleznyov.
"Now we are trying to narrow the encirclement. They are trying to break out," Seleznyov said.
Separatist rebellions erupted in eastern Ukraine in early April after street protests in Kiev toppled the Moscow-backed leader Viktor Yanukovich and Russia in turn annexed the Crimean peninsula. Eastern rebels have called for union with Russia.
The violence has cost the lives of 147 Ukrainian soldiers and wounded 267 up to now, the defence ministry said on Wednesday. Many scores of separatist militia, civilians and members of other military bodies such as the national guard have also been killed and the overall death toll is much higher.
Kiev has accused Russia of fomenting the unrest and of allowing volunteer fighters from Russia to cross into Ukraine to support the rebels.
This is denied by Moscow, which has been urging Poroshenko to end "punitive action" against the rebels.
The United States and its Western allies largely share Ukraine's view. U.S. Vice President Joe Biden assured Poroshenko late on Wednesday there would be "further costs on Russia" unless it used its influence to stop the separatist violence, the White House said.
NATO Secretary-General Anders Fogh Rasmussen meanwhile sounded a new alarm about Russia's possible intentions, saying that at least a few thousand more Russian troops were now on Ukraine's long eastern border.
"I consider this a very regrettable step backwards. It seems Russia keeps the option open to intervene further in Ukraine," he said in London.
"The international community would have to respond in a firm manner if Russia were to intervene further in Ukraine."
BOOST FOR POROSHENKO
In Kiev, Poroshenko received a boost when parliament resoundingly endorsed his nominations for three key posts including that of foreign minister.
Speaking to journalists later, he said he himself would sign an association agreement with the European Union on June 27 which will decisively shift Ukraine away from Russia's influence and rule it out from joining a Moscow-led customs union.
It was Yanukovich's sudden refusal last November to sign that pact and upgrade relations with Moscow that precipated his own ousting and Russia's annexing of Crimea, and sparked the worst crisis in Russia-West relations since the Cold War.
But Poroshenko knows he has to impress the West with his intentions of reaching a peaceful settlement to the eastern crisis by using minimum force. He said his new foreign minister, Pavlo Klimkin, would unveil his peace plan for the east on June 23 at a meeting of EU foreign ministers in Luxembourg.
Ukrainian forces, which lost 49 servicemen on June 14 when separatists brought down a cargo plane in Luhansk region, have been gradually tightening their encirclement of rebel positions to the south and east of Krasny Liman including the rebel stronghold of Slaviansk.
Olesya, a woman in Yampil, said Ukrainian forces had entered the village in armoured vehicles bearing the Ukrainian flag.
"There was fighting all night. Mines were flying over our heads. Planes flew over and we could hear heavy weapons. It's awful what is going on here," she said.
Sergei, a 45-year-old who was leaving the village of Zakitne by scooter, said people had been sheltering in cellars for days and his wife had already left because there was no food, electricity or gas.
He was now leaving because "there are homes on fire and dead people on the streets".
"There is an ongoing active phase of the ATO (anti-terrorist operation) in the region of Krasny Liman," said government forces spokesman Vladyslav Seleznyov
Asked about the report that 4,000 separatists could be involved, Seleznyov, the government forces spokesman, replied:
"Then, there'll be 4,000 coffins".
Source: Reuters
Even as President Petro Poroshenko and his team prepared to unveil their blueprint for ending more than two months of rebellion, government forces, using artillery and heavy armour, said they were tightening the noose on separatists near Krasny Liman, north of the main regional hub of Donetsk.
Government forces said the fighting erupted in the early hours after rebels refused to lay down their arms as part of Poroshenko's peace plan.
Both Ukrainian government and rebel accounts of the fighting suggested a major battle involving armoured vehicles including tanks.
One military source said 4,000 separatists were involved, while rebel sources in Donetsk said Ukrainian infantry supported by 20 tanks and many other armoured vehicles were storming the village of Yampil, about 12 km (7 miles) east of Krasny Liman.
A top rebel commander, Igor Strelkov, reported "heavy losses" in equipment and arms among the separatists, faced with a huge superiority in heavy armour on the government side at Yampil.
"We beat off the first attack and destroyed one tank. But it is difficult to take on 20 tanks. The battle is going on. Our people are holding but we can't rule out that they (government forces) will break through," Strelkov, who is also known as Girkin, said in a videoed statement. He urged Moscow to "take some measures".
There was no word on casualties from the government side.
From the nearby town of Siversk, artillery blasts, small arms fire and machinegun-fire could be heard from about 3 km away. From high ground, smoke could be seen billowing from rebel positions under attack.
Poroshenko, installed as a president on June 7, is pushing a peace plan to end the rebellion which he said would be unveiled soon and presented to European Union ministers early next week.
It includes an offer of a unilateral ceasefire by government forces and amnesty for the separatists - but only if they lay down their weapons.
Poroshenko's website later said he outlined the plan to Russian President Vladimir Putin by phone on Thursday, highlighting the need for hostages to be freed and "an effective regime of control" established on the joint border.
It said Poroshenko emphasised he hoped for Putin's support for the plan and for any ceasefire that would be declared.
REBELS "REFUSED TO DISARM"
A government forces spokesman said on Thursday it was when rebels refused a call to disarm - made in leaflets fired by big guns into rebel positions - that fighting broke out in the early hours of the morning.
"We issued an ultimatum to the terrorists overnight to surrender their weapons. We guarantee their safety and investigation in line with Ukrainian law ... They refused," said government forces spokesman Vladyslav Seleznyov.
"Now we are trying to narrow the encirclement. They are trying to break out," Seleznyov said.
Separatist rebellions erupted in eastern Ukraine in early April after street protests in Kiev toppled the Moscow-backed leader Viktor Yanukovich and Russia in turn annexed the Crimean peninsula. Eastern rebels have called for union with Russia.
The violence has cost the lives of 147 Ukrainian soldiers and wounded 267 up to now, the defence ministry said on Wednesday. Many scores of separatist militia, civilians and members of other military bodies such as the national guard have also been killed and the overall death toll is much higher.
Kiev has accused Russia of fomenting the unrest and of allowing volunteer fighters from Russia to cross into Ukraine to support the rebels.
This is denied by Moscow, which has been urging Poroshenko to end "punitive action" against the rebels.
The United States and its Western allies largely share Ukraine's view. U.S. Vice President Joe Biden assured Poroshenko late on Wednesday there would be "further costs on Russia" unless it used its influence to stop the separatist violence, the White House said.
NATO Secretary-General Anders Fogh Rasmussen meanwhile sounded a new alarm about Russia's possible intentions, saying that at least a few thousand more Russian troops were now on Ukraine's long eastern border.
"I consider this a very regrettable step backwards. It seems Russia keeps the option open to intervene further in Ukraine," he said in London.
"The international community would have to respond in a firm manner if Russia were to intervene further in Ukraine."
BOOST FOR POROSHENKO
In Kiev, Poroshenko received a boost when parliament resoundingly endorsed his nominations for three key posts including that of foreign minister.
Speaking to journalists later, he said he himself would sign an association agreement with the European Union on June 27 which will decisively shift Ukraine away from Russia's influence and rule it out from joining a Moscow-led customs union.
It was Yanukovich's sudden refusal last November to sign that pact and upgrade relations with Moscow that precipated his own ousting and Russia's annexing of Crimea, and sparked the worst crisis in Russia-West relations since the Cold War.
But Poroshenko knows he has to impress the West with his intentions of reaching a peaceful settlement to the eastern crisis by using minimum force. He said his new foreign minister, Pavlo Klimkin, would unveil his peace plan for the east on June 23 at a meeting of EU foreign ministers in Luxembourg.
Ukrainian forces, which lost 49 servicemen on June 14 when separatists brought down a cargo plane in Luhansk region, have been gradually tightening their encirclement of rebel positions to the south and east of Krasny Liman including the rebel stronghold of Slaviansk.
Olesya, a woman in Yampil, said Ukrainian forces had entered the village in armoured vehicles bearing the Ukrainian flag.
"There was fighting all night. Mines were flying over our heads. Planes flew over and we could hear heavy weapons. It's awful what is going on here," she said.
Sergei, a 45-year-old who was leaving the village of Zakitne by scooter, said people had been sheltering in cellars for days and his wife had already left because there was no food, electricity or gas.
He was now leaving because "there are homes on fire and dead people on the streets".
"There is an ongoing active phase of the ATO (anti-terrorist operation) in the region of Krasny Liman," said government forces spokesman Vladyslav Seleznyov
Asked about the report that 4,000 separatists could be involved, Seleznyov, the government forces spokesman, replied:
"Then, there'll be 4,000 coffins".
Source: Reuters
China hints at purchase of Greek bonds, reiterates targets
China signalled it would buy bonds when Greece issues debt again, in a show of support for a financially-stricken nation that hopes to become a gateway into Europe for Chinese products.
Kicking off a three-day visit to Greece, Chinese Premier Li Keqiang pledged to remain a long-term investor in Greek bonds and reiterated growth and CPI targets for the Chinese economy, though he warned the global economy remained uncertain.
"The Chinese economy is under pressure but it is still growing at a steady pace," Li, speaking through an interpreter, told a news conference. "Certainly, the global economic recovery still has many uncertainties and faces many challenges."
He said Chinese economic growth of 7.5 percent this year was
"logical" and reiterated a CPI growth target of 3.5 percent.
Bailed out twice after nearly going bankrupt, Greece is hoping Chinese investment will help spur its battered economy to growth again. China, in turn, sees Greece's strategic location as a portal into both Europe and Africa for the distribution of Chinese products.
"We have never abandoned the Greek bond market, but we are increasing our purchases," Li said.
"I have expressed my will to (Greek Prime Minister Antonis) Samaras that when Greece will issue new Greek bonds, China will continue being a long-term and responsible investor."
Li's comments fell short of an explicit commitment to buy Greek bonds when Athens next issues debt. His predecessor, Wen Jiabao, made a similar promise on a trip to Athens in 2010 but there has been no confirmation China has acted on the pledge.
Buoyed by yields at a 4-1/2 year low and prospects of an economic recovery taking root, Athens returned to the bond markets in April after a four-year exile and is expected to issue debt again this summer.
The two countries signed trade and investment deals worth over $5 billion, including a $1.2 billion cooperation deal with renewable firm Terna Energy and a $1.5 billion deal with Greek container ship company Costamare.
Also during his trip to Greece, Li is scheduled to visit the port of Piraeus on Friday, where Chinese shipping group Cosco controls two container terminals and is bidding in the port's privatisation, and then travel to Crete.
Chinese firms are among those vying to build an airport on the island, strategically located between Europe, Asia and Africa.
Li, who wrote in a letter to Greek daily Kathimerini that he was fascinated by Greek mythology as a boy, also promised China would encourage its companies to play an active part in Greece's asset sale programme and infrastructure construction.
Li's trip to Greece comes after a trip to Britain where he pledged China's economy, the world's second-largest behind the United States, would not suffer a hard landing and grow at a minimum clip of 7.5 percent.
The International Monetary Fund has recommended that China adopt an economic growth target of about 7 percent for 2015 and urged it to avoid further stimulus measures and concentrate on curtailing financial risks.
Li pledged China would stress reforms.
"When we talk about coordinating the rate of economic growth, this does not mean we will necessarily take measures, but we will take precautionary measures," he said. "We attach great importance to structural reforms."
Source: Reuters
Kicking off a three-day visit to Greece, Chinese Premier Li Keqiang pledged to remain a long-term investor in Greek bonds and reiterated growth and CPI targets for the Chinese economy, though he warned the global economy remained uncertain.
"The Chinese economy is under pressure but it is still growing at a steady pace," Li, speaking through an interpreter, told a news conference. "Certainly, the global economic recovery still has many uncertainties and faces many challenges."
He said Chinese economic growth of 7.5 percent this year was
"logical" and reiterated a CPI growth target of 3.5 percent.
Bailed out twice after nearly going bankrupt, Greece is hoping Chinese investment will help spur its battered economy to growth again. China, in turn, sees Greece's strategic location as a portal into both Europe and Africa for the distribution of Chinese products.
"We have never abandoned the Greek bond market, but we are increasing our purchases," Li said.
"I have expressed my will to (Greek Prime Minister Antonis) Samaras that when Greece will issue new Greek bonds, China will continue being a long-term and responsible investor."
Li's comments fell short of an explicit commitment to buy Greek bonds when Athens next issues debt. His predecessor, Wen Jiabao, made a similar promise on a trip to Athens in 2010 but there has been no confirmation China has acted on the pledge.
Buoyed by yields at a 4-1/2 year low and prospects of an economic recovery taking root, Athens returned to the bond markets in April after a four-year exile and is expected to issue debt again this summer.
The two countries signed trade and investment deals worth over $5 billion, including a $1.2 billion cooperation deal with renewable firm Terna Energy and a $1.5 billion deal with Greek container ship company Costamare.
Also during his trip to Greece, Li is scheduled to visit the port of Piraeus on Friday, where Chinese shipping group Cosco controls two container terminals and is bidding in the port's privatisation, and then travel to Crete.
Chinese firms are among those vying to build an airport on the island, strategically located between Europe, Asia and Africa.
Li, who wrote in a letter to Greek daily Kathimerini that he was fascinated by Greek mythology as a boy, also promised China would encourage its companies to play an active part in Greece's asset sale programme and infrastructure construction.
Li's trip to Greece comes after a trip to Britain where he pledged China's economy, the world's second-largest behind the United States, would not suffer a hard landing and grow at a minimum clip of 7.5 percent.
The International Monetary Fund has recommended that China adopt an economic growth target of about 7 percent for 2015 and urged it to avoid further stimulus measures and concentrate on curtailing financial risks.
Li pledged China would stress reforms.
"When we talk about coordinating the rate of economic growth, this does not mean we will necessarily take measures, but we will take precautionary measures," he said. "We attach great importance to structural reforms."
Source: Reuters
Euro Zone: Schaeuble says low rates spawning "dangerous" rise in property prices
German Finance Minister Wolfgang Schaeuble warned on Thursday in the clearest terms yet about the risks of loose monetary policy for Europe's largest economy, saying low interest rates were already spawning "dangerous" rises in domestic property prices.
Schaeuble has long warned about the threat of speculative bubbles forming as a result of excess liquidity, but his comments at a news conference with visiting U.S. Treasury Secretary Jack Lew went beyond his usual line that low rates must correct higher over time.
They come two weeks after the European Central Bank (ECB) cut interest rates to record lows to ward off deflation and kick-start growth in sluggish southern euro states.
The move sparked criticism from conservative German economists, the media and even some allies of Chancellor Angela Merkel, who worry that the bank's one-size-fits-all policy carries risks for the steadily growing German economy, even if it hasn't sparked inflation here.
"In the long run, the amount of liquidity is too great and the level of interest rates too low," said Schaeuble.
Asked about warnings from the Bundesbank that the low rate environment risked creating asset price bubbles, Schaeuble said there were signs a rise in German property prices was reaching
"dangerous" levels and this needed to be taken "very seriously".
German real estate prices were relatively stable over a period of many years until 2010, when the outbreak of the euro zone debt crisis boosted the attractiveness of German property as a safe haven investment, luring foreign buyers.
Meanwhile, historically low unemployment at home, robust economic growth and rock-bottom interest rates on mortgages encouraged more Germans to put their money into property instead of traditional savings accounts.
The German central bank began cautioning about property price rises last October, saying then that apartments in some of the country's largest cities, like Munich, Hamburg and Berlin, were overvalued by up to 20 percent.
In February, it said overvaluations had risen to 25 percent in some locations.
However many economists have played down the risks of a property bubble on a par with those which burst in countries like the United States, Britain, Ireland and Spain over half a decade ago, with devastating effects on the financial system.
At 46 percent, Germany still has one of the lowest home ownership rates in Europe. And at 10 percent, its savings ratio remains one of the highest.
On Wednesday, Germany's financial stability committee, a group set up last year to monitor potential problems in the financial system, said it had looked closely at Germany's housing market and found no evidence of an asset bubble.
The watchdog, which includes members of the Bundesbank, finance ministry and financial regulator Bafin, did warn however that the low interest rate environment was "fertile ground" for the building of financial risks.
For his part, Treasury Secretary Lew said the United States had emerged from a period of excessive property prices but noted that he would like to see more new construction in areas where prices have attained pre-crisis levels.
Source: Reuters
Schaeuble has long warned about the threat of speculative bubbles forming as a result of excess liquidity, but his comments at a news conference with visiting U.S. Treasury Secretary Jack Lew went beyond his usual line that low rates must correct higher over time.
They come two weeks after the European Central Bank (ECB) cut interest rates to record lows to ward off deflation and kick-start growth in sluggish southern euro states.
The move sparked criticism from conservative German economists, the media and even some allies of Chancellor Angela Merkel, who worry that the bank's one-size-fits-all policy carries risks for the steadily growing German economy, even if it hasn't sparked inflation here.
"In the long run, the amount of liquidity is too great and the level of interest rates too low," said Schaeuble.
Asked about warnings from the Bundesbank that the low rate environment risked creating asset price bubbles, Schaeuble said there were signs a rise in German property prices was reaching
"dangerous" levels and this needed to be taken "very seriously".
German real estate prices were relatively stable over a period of many years until 2010, when the outbreak of the euro zone debt crisis boosted the attractiveness of German property as a safe haven investment, luring foreign buyers.
Meanwhile, historically low unemployment at home, robust economic growth and rock-bottom interest rates on mortgages encouraged more Germans to put their money into property instead of traditional savings accounts.
The German central bank began cautioning about property price rises last October, saying then that apartments in some of the country's largest cities, like Munich, Hamburg and Berlin, were overvalued by up to 20 percent.
In February, it said overvaluations had risen to 25 percent in some locations.
However many economists have played down the risks of a property bubble on a par with those which burst in countries like the United States, Britain, Ireland and Spain over half a decade ago, with devastating effects on the financial system.
At 46 percent, Germany still has one of the lowest home ownership rates in Europe. And at 10 percent, its savings ratio remains one of the highest.
On Wednesday, Germany's financial stability committee, a group set up last year to monitor potential problems in the financial system, said it had looked closely at Germany's housing market and found no evidence of an asset bubble.
The watchdog, which includes members of the Bundesbank, finance ministry and financial regulator Bafin, did warn however that the low interest rate environment was "fertile ground" for the building of financial risks.
For his part, Treasury Secretary Lew said the United States had emerged from a period of excessive property prices but noted that he would like to see more new construction in areas where prices have attained pre-crisis levels.
Source: Reuters
Euro zone has correct fiscal stance to cut debt, help growth-IMF
The euro zone's fiscal stance strikes the right balance between reducing debt and bolstering demand, the International Monetary Fund said in a statement on Thursday.
The euro zone's overall government deficit fell to the European Union limit of 3 percent of gross domestic product in 2013 from 6.2 percent in 2010 - the year when it had to bail out Greece for the first time.
The sovereign debt crisis that followed plunged the euro zone into a deep recession. The economy is now recovering slowly and euro zone policymakers are discussing how to balance the reduction of public debts while at the same stimulating growth.
"After several years of consolidation, the overall fiscal stance for the euro area is close to neutral. This strikes the right balance between demand support and debt reduction. But large negative growth surprises should not trigger additional consolidation efforts," the IMF said.
The IMF noted said the recovery was neither robust nor sufficiently strong and said continued support for demand in the 9.6 trillion-euro economy was vital.
The IMF praised the steps the European Central Bank took in early June to help accelerate dangerously slow inflation, but noted more might be needed if those steps fail.
The ECB became the first major central bank to introduce negative deposit rates - charging banks to park their funds at the central bank overnight. It also offered ultra-cheap four-year loans to boost lending to companies. And ECB President Mario Draghi said the bank was ready to act again if necessary.
"The ECB’s willingness to do more, if necessary, is reassuring. If inflation remains stubbornly low, the ECB should consider a large-scale asset purchase program, primarily of sovereign assets, according to the ECB’s capital key," it said.
Such a policy move, known as quantitative easing, remains available to the ECB.
IMF Managing Director Christine Lagarde, asked to elaborate on her definition of "stubbornly low" explained that stubbornly would apply to a case when the measures already deployed by the ECB would prove ineffective.
Low inflation would be price growth that is way below the ECB target of just below 2 percent. "It seems to us we are currently in that zone," Lagarde said.
IMF warned that euro zone unemployment, easing only slightly from last summer's peaks around 12 percent, was still too high. A jobless recovery is a worry for all states as it puts budget expenditure under pressure.
"Much higher growth is needed to bring down unemployment and debt," the IMF said.
Source: Reuters
The euro zone's overall government deficit fell to the European Union limit of 3 percent of gross domestic product in 2013 from 6.2 percent in 2010 - the year when it had to bail out Greece for the first time.
The sovereign debt crisis that followed plunged the euro zone into a deep recession. The economy is now recovering slowly and euro zone policymakers are discussing how to balance the reduction of public debts while at the same stimulating growth.
"After several years of consolidation, the overall fiscal stance for the euro area is close to neutral. This strikes the right balance between demand support and debt reduction. But large negative growth surprises should not trigger additional consolidation efforts," the IMF said.
The IMF noted said the recovery was neither robust nor sufficiently strong and said continued support for demand in the 9.6 trillion-euro economy was vital.
The IMF praised the steps the European Central Bank took in early June to help accelerate dangerously slow inflation, but noted more might be needed if those steps fail.
The ECB became the first major central bank to introduce negative deposit rates - charging banks to park their funds at the central bank overnight. It also offered ultra-cheap four-year loans to boost lending to companies. And ECB President Mario Draghi said the bank was ready to act again if necessary.
"The ECB’s willingness to do more, if necessary, is reassuring. If inflation remains stubbornly low, the ECB should consider a large-scale asset purchase program, primarily of sovereign assets, according to the ECB’s capital key," it said.
Such a policy move, known as quantitative easing, remains available to the ECB.
IMF Managing Director Christine Lagarde, asked to elaborate on her definition of "stubbornly low" explained that stubbornly would apply to a case when the measures already deployed by the ECB would prove ineffective.
Low inflation would be price growth that is way below the ECB target of just below 2 percent. "It seems to us we are currently in that zone," Lagarde said.
IMF warned that euro zone unemployment, easing only slightly from last summer's peaks around 12 percent, was still too high. A jobless recovery is a worry for all states as it puts budget expenditure under pressure.
"Much higher growth is needed to bring down unemployment and debt," the IMF said.
Source: Reuters
Argentina's Officials comments put US lawyers in awkward spot
At a hearing Wednesday afternoon in Manhattan, Argentina's lawyer, Carmine Boccuzzi of Cleary Gottlieb Steen & Hamilton, informed U.S. District Judge Thomas Griesa that Argentine officials "will be in New York next week" in order to begin negotiations with the hedge funds whose bond litigation has forced the country to the brink of a sovereign debt crisis.
The very next morning, at a press briefing, Argentine Cabinet Chief Jorge Capitanich appeared to contradict Cleary's representations to Griesa: "There is no delegation prepared for a possible trip to the United States," he said, according to a Reuters report from Buenos Aires.
Capitanich is the third Argentine official this week whose public comments seem to be at odds with positions the country's lawyers have taken in U.S. courts. Earlier this month, Cleary partner Boccuzzi assured Judge Griesa that Argentina was not making contingency plans to restructure its debt in the event that the U.S. Supreme Court upheld Griesa's orders requiring the country to pay hedge fund holdouts about $1.5 billion at the same time that it makes coupon payments to exchange bondholders that participated in previous restructurings. Argentina also said in a brief to the Supreme Court that it would comply with U.S. court orders.
Yet hours after the Supreme Court declined on Monday to hear Argentina's appeal, Argentine President Cristina Fernandez de Kirchner delivered a speech vowing not to "submit to extortion" by the hedge funds. The following day, Economy Minister Axel Kicillof announced that Argentina is developing a process to pay exchange bondholders without paying the holdouts.
Argentina's lawyers have been careful to couch what they've said in court. At Wednesday's hearing, for example, Boccuzzi said he "had been informed" and that "Argentine authorities have told me" that officials planned to come to New York to negotiate. Boccuzzi also tried to persuade Judge Griesa that Argentine politicians are making political speeches, not legal representations. "Obviously, there is some strong language because (they are) dealing with quite a large problem and situation and trying to deal with it in a way that takes into account all the aspects here," he said.
DIFFERENT AUDIENCES
It's true that Argentine officials have a different audience than their lawyers. It's also true that Argentina's debt crisis can't be definitively resolved in U.S. courts. Griesa's injunctions, which officially took effect Wednesday, bar Argentina from making a scheduled $900 million payment on June 30 to exchange bondholders through the U.S. banks specified in the contracts without also paying the hedge fund holdouts.
If Argentina somehow figures out a way to move the payment mechanism outside of the reach of U.S. courts -- which would likely put the exchange bonds in default -- it will be violating Griesa's orders, based on what the judge said at Wednesday’s hearing, and at grave risk of a contempt of court finding and monetary sanctions. If the dispute really reaches that point, perhaps the hedge funds' creative lawyers can propose some other punishment to coerce Argentina into compliance -- though they'd probably face opposition from the U.S. government, which has previously opposed any kind of contempt sanctions against foreign governments. And even sanctions won't help the hedge funds collect Argentine assets protected under the Foreign Sovereign Immunities Act.
For Argentine officials, in other words, the political and economic benefits of defiant public statements may outweigh the risks to their country of contrary statements to U.S. courts. But for Cleary Gottlieb, the risk calculus is quite different. Cleary relies on its reputation and its credibility with U.S. judges. Argentina's pronouncements, at the very least, have put the firm in the awkward position of trying to explain to Judge Griesa why he should disregard the public proclamations of its client. Griesa wasn't persuaded on Wednesday, when he said that the Argentine president's reference Monday to "extortion" was
"unfortunate" and "really does not give me confidence in a good faith commitment to pay all of the obligations of the Republic."
'OBVIOUSLY UNTRUE'
NML's lawyers, meanwhile, seem to be angling for Cleary to face consequences more dire than awkwardness. At Wednesday's hearing, NML lawyer Robert Cohen of Dechert came close to accusing the firm of lying to Griesa. "The representations that were made about there being no plan were obviously untrue," Cohen said, in a reference to Cleary's previous assurances to Griesa that Argentina wasn't working on a debt restructuring process designed to evade his orders. "Mr. Boccuzzi and Mr. Blackman stood up and said that in this court. And on the night of the denial, the president goes on national television and announces that plan," Cohen said.
It's also worth pointing out that Gibson, Dunn & Crutcher is counseling NML along with Dechert -- and Gibson Dunn has used attacks on its opponents' lawyers as a successful strategy in other cases, including the environmental litigation against Chevron, the BP Gulf oil spill class action and injury suits against Dole Food for using pesticides. The circumstances in the Argentine bond litigation are different, since Cleary is a renowned defense firm that's typically on the same side as Gibson Dunn, unlike the plaintiffs firms Gibson Dunn tried to discredit in the other cases. But NML's lawyers have proven themselves to be as relentless as the hedge fund's leader, Paul Singer of Elliott Management.
At the hearing Wednesday, Aurelius's lawyer, Edward Friedman of Friedman Kaplan Seiler & Adelman, stopped well short of NML's accusations of Cleary misrepresentations, though he pointed out to Griesa the "contrast between what Mr. Boccuzzi is saying today and the facts that are in the record before your honor and the public record." After the hearing, Aurelius chair Mark Brodsky said, "I have learned not to rely on any assurances Argentina's counsel provide to our courts."
NML and Aurelius representatives declined Reuters' requests for comment on the apparent contradiction between the Argentine cabinet official's comments Thursday and Cleary's representation in court Wednesday that Argentina is sending a delegation to New York to negotiate.
So far, Judge Griesa hasn't shown any doubts about Cleary's credibility. On Wednesday, he ignored Cohen's accusation that Cleary previously made misstatements to the judge, and told Boccuzzi that he had made "a good statement, as always" when Boccuzzi tried to explain away Argentine speeches. The judge hasn't always been so easy-going, though. At a hearing in September 2011, Griesa told Boccuzzi that Argentina has had "the assistance of your law firm" in its resistance "to fulfillment of its obligation."
Lawyers have an ethical duty not to knowingly make misrepresentations to the court, but contradictory statements in a situation like the Argentine debt crisis could reflect changing political calculations. An attorney can request to withdraw from representing a client that is responsible for misrepresentations. There has been no indication that Cleary is contemplating withdrawing from its representation of Argentina or distancing itself from its client.
A Cleary spokeswoman declined to comment on NML's accusations or the apparent contradiction between Wednesday's hearing and Thursday's comments from Argentina.
Source: Reuters
The very next morning, at a press briefing, Argentine Cabinet Chief Jorge Capitanich appeared to contradict Cleary's representations to Griesa: "There is no delegation prepared for a possible trip to the United States," he said, according to a Reuters report from Buenos Aires.
Capitanich is the third Argentine official this week whose public comments seem to be at odds with positions the country's lawyers have taken in U.S. courts. Earlier this month, Cleary partner Boccuzzi assured Judge Griesa that Argentina was not making contingency plans to restructure its debt in the event that the U.S. Supreme Court upheld Griesa's orders requiring the country to pay hedge fund holdouts about $1.5 billion at the same time that it makes coupon payments to exchange bondholders that participated in previous restructurings. Argentina also said in a brief to the Supreme Court that it would comply with U.S. court orders.
Yet hours after the Supreme Court declined on Monday to hear Argentina's appeal, Argentine President Cristina Fernandez de Kirchner delivered a speech vowing not to "submit to extortion" by the hedge funds. The following day, Economy Minister Axel Kicillof announced that Argentina is developing a process to pay exchange bondholders without paying the holdouts.
Argentina's lawyers have been careful to couch what they've said in court. At Wednesday's hearing, for example, Boccuzzi said he "had been informed" and that "Argentine authorities have told me" that officials planned to come to New York to negotiate. Boccuzzi also tried to persuade Judge Griesa that Argentine politicians are making political speeches, not legal representations. "Obviously, there is some strong language because (they are) dealing with quite a large problem and situation and trying to deal with it in a way that takes into account all the aspects here," he said.
DIFFERENT AUDIENCES
It's true that Argentine officials have a different audience than their lawyers. It's also true that Argentina's debt crisis can't be definitively resolved in U.S. courts. Griesa's injunctions, which officially took effect Wednesday, bar Argentina from making a scheduled $900 million payment on June 30 to exchange bondholders through the U.S. banks specified in the contracts without also paying the hedge fund holdouts.
If Argentina somehow figures out a way to move the payment mechanism outside of the reach of U.S. courts -- which would likely put the exchange bonds in default -- it will be violating Griesa's orders, based on what the judge said at Wednesday’s hearing, and at grave risk of a contempt of court finding and monetary sanctions. If the dispute really reaches that point, perhaps the hedge funds' creative lawyers can propose some other punishment to coerce Argentina into compliance -- though they'd probably face opposition from the U.S. government, which has previously opposed any kind of contempt sanctions against foreign governments. And even sanctions won't help the hedge funds collect Argentine assets protected under the Foreign Sovereign Immunities Act.
For Argentine officials, in other words, the political and economic benefits of defiant public statements may outweigh the risks to their country of contrary statements to U.S. courts. But for Cleary Gottlieb, the risk calculus is quite different. Cleary relies on its reputation and its credibility with U.S. judges. Argentina's pronouncements, at the very least, have put the firm in the awkward position of trying to explain to Judge Griesa why he should disregard the public proclamations of its client. Griesa wasn't persuaded on Wednesday, when he said that the Argentine president's reference Monday to "extortion" was
"unfortunate" and "really does not give me confidence in a good faith commitment to pay all of the obligations of the Republic."
'OBVIOUSLY UNTRUE'
NML's lawyers, meanwhile, seem to be angling for Cleary to face consequences more dire than awkwardness. At Wednesday's hearing, NML lawyer Robert Cohen of Dechert came close to accusing the firm of lying to Griesa. "The representations that were made about there being no plan were obviously untrue," Cohen said, in a reference to Cleary's previous assurances to Griesa that Argentina wasn't working on a debt restructuring process designed to evade his orders. "Mr. Boccuzzi and Mr. Blackman stood up and said that in this court. And on the night of the denial, the president goes on national television and announces that plan," Cohen said.
It's also worth pointing out that Gibson, Dunn & Crutcher is counseling NML along with Dechert -- and Gibson Dunn has used attacks on its opponents' lawyers as a successful strategy in other cases, including the environmental litigation against Chevron, the BP Gulf oil spill class action and injury suits against Dole Food for using pesticides. The circumstances in the Argentine bond litigation are different, since Cleary is a renowned defense firm that's typically on the same side as Gibson Dunn, unlike the plaintiffs firms Gibson Dunn tried to discredit in the other cases. But NML's lawyers have proven themselves to be as relentless as the hedge fund's leader, Paul Singer of Elliott Management.
At the hearing Wednesday, Aurelius's lawyer, Edward Friedman of Friedman Kaplan Seiler & Adelman, stopped well short of NML's accusations of Cleary misrepresentations, though he pointed out to Griesa the "contrast between what Mr. Boccuzzi is saying today and the facts that are in the record before your honor and the public record." After the hearing, Aurelius chair Mark Brodsky said, "I have learned not to rely on any assurances Argentina's counsel provide to our courts."
NML and Aurelius representatives declined Reuters' requests for comment on the apparent contradiction between the Argentine cabinet official's comments Thursday and Cleary's representation in court Wednesday that Argentina is sending a delegation to New York to negotiate.
So far, Judge Griesa hasn't shown any doubts about Cleary's credibility. On Wednesday, he ignored Cohen's accusation that Cleary previously made misstatements to the judge, and told Boccuzzi that he had made "a good statement, as always" when Boccuzzi tried to explain away Argentine speeches. The judge hasn't always been so easy-going, though. At a hearing in September 2011, Griesa told Boccuzzi that Argentina has had "the assistance of your law firm" in its resistance "to fulfillment of its obligation."
Lawyers have an ethical duty not to knowingly make misrepresentations to the court, but contradictory statements in a situation like the Argentine debt crisis could reflect changing political calculations. An attorney can request to withdraw from representing a client that is responsible for misrepresentations. There has been no indication that Cleary is contemplating withdrawing from its representation of Argentina or distancing itself from its client.
A Cleary spokeswoman declined to comment on NML's accusations or the apparent contradiction between Wednesday's hearing and Thursday's comments from Argentina.
Source: Reuters
WSJ: Japan Shares Rise on Abe Optimism, While Rest of Asian Shares Little Moved
Japan edged higher on Friday, while Australia fell, as both markets stabilized aftersharp gains in the previous session.
The Nikkei edged up 0.3% and Australia's S&P ASX 200 fell 0.5% after hefty gains on Thursday in light of the U.S. Federal Reserve's commitment to low interest rates and Chairwoman Janet Yellen's relatively upbeat assessment of the U.S. economy.
The yen moved slightly higher in Asian trade, last changing hands at ¥101.84 to the dollar compared with ¥101.94 late Thursday in New York.
In the U.S. overnight, the Dow Jones Industrial Average climbed just 0.1%, offering no catalyst to push Asian markets higher on Friday.
Thursday's gains made Australia and Japan among the best performers in Asia this week, with Sydney up 0.8% since last Friday and Tokyo gaining 2% over the same period.
The sharp gains in the Nikkei, which closed at a near five-month high on Thursday, reflect a favorable view among global investors of Prime Minister Shinzo Abe's corporate-tax cut and other structural changes being rolled out this month. Mr. Abe is set to formally release his growth strategy as soon as Tuesday.
China's much-watched preliminary manufacturing data, scheduled for release on Monday, has in recent months supported a view that the Chinese economy has hit its trough, with Société Générale expecting a third successive increase in the gauge to 49.7 from 49.4.
In China, stocks were mixed ahead of the data, with the Hang Seng Index up 0.2% in Hong Kong and the Shanghai Composite down 0.5%.
Elsewhere in Asia, South Korea's Kospi was down 1% and Singapore's Straits Times Index lost 0.1%
In corporate news, gold miners shot higher after the spot price of the precious metal jumped 3.4% overnight. Newcrest Mining Ltd. added 4.5% in Sydney and Zijin Mining Group Co. Ltd. was 3.5% higher in Hong Kong.
Also in Hong Kong, Tianhe Chemicals Group Ltd. was flat in debut trading after the specialty chemicals manufacturer raised $654 million in an initial public offering.
Holdout Creditor Says It's Ready to Negotiate With Argentina
The WSJ reports,"Elliott Management Corp., a leader of a group of holdout creditors looking to collect more than $1.5 billion from Argentina, is ready to negotiate and would accept bonds as part of a settlement, a person with direct knowledge of the fund's strategy said.
U.S. courts have said Argentina must pay Elliott's NML Capital Ltd. and other hedge funds seeking compensation for bonds defaulted on in 2001 if it is also making payments on restructured debt it issued in 2005 and 2010. The country's next payment on the restructured bonds is due at the end of June, meaning Argentina risks falling into default if it fails to reach an agreement with the holdouts".
"Argentina has sent mixed signals about whether it will negotiate with the holdouts. On Wednesday, a lawyer representing the country said at a U.S. federal court hearing that a delegation would come to New York for talks with the hedge funds next week. However, on Thursday President Cristina Kirchner's chief of staff, Jorge Capitanich, said "there is no mission or committee ready for an eventual trip to the U.S."
"We're hopeful that Argentina is serious about coming to the table to negotiate," the person familiar with Elliott's strategy said, adding "there is no dialogue yet."
Elliott is looking to recent deals made by Argentina with other creditors as a potential model for an agreement, the person said. That could include accepting a mix of cash and bonds, they added.
Argentina agreed in April to pay oil company Repsol SA bonds worth about $5 billion as compensation for seizing its Argentine subsidiary. In May, Argentina agreed to pay $9.7 billion to the Paris Club of creditor nations over five years.
"The capacity of Argentina to pay is clear; what is not clear is when they're going to show up."
An Argentine economy ministry official said Thursday all options are on the table, including a possible mission to the U.S. next week.
Mr. Capitanich's comments sent Argentine bonds lower early Thursday. Bonds maturing in 2033 were trading around 75.5 cents on the dollar, down from around 76.5 cents on the dollar late Wednesday, according to traders. The yields on those bonds rose to 11.87% from 11.56%. Traders said market conditions were very choppy.
The U.S. Supreme Court on Mondaydeclined to review a lower-court ruling that blocked Argentina from paying its current bondholders unless it also pays hedge funds over $1.5 billion they have won after years of litigation.
Argentina's economy ministry said the enforcement of that verdict would prevent the government from making interest payments at the end of the month.
A default would represent a setback for Mrs. Kirchner, who has recently improved relations with creditors, which analysts have interpreted as a signal the government wants to regain access to international debt markets. The Repsol and Paris Club agreements were milestones in that effort.
For years Argentina has been locked in a bitter legal battle with hedge funds led by Elliott Management and Aurelius Capital Management LP that own bonds dating back to the country's $100 billion default in 2001.
The holdout hedge funds refused to participate in heavily discounted debt restructurings in 2005 and 2010 in which many investors swapped their defaulted bonds for new securities. So far, Argentina has managed to restructure about 93% of the defaulted debt held by investors".
Paying the hedge funds in full would potentially trigger similar claims by other holdouts for up to $15 billion, with a risk of $120 billion in additional claims by investors who own bonds that were issued in the country's debt restructurings
That would allow the hedge funds to "pulverize the most successful debt restructuring in the history of humanity," Mr. Capitanich said.
TheGuardian. Irak: How Nouri al-Maliki fell out of favour with the US
In October 2011, Barack Obama and his national security committee sat down for the most important conference call they had held on Iraq. On the videolink from Baghdad was Nouri al-Maliki, a man whom the US had backed as a second-term leader a year earlier.
He wanted no discussion about an extension of the US presence in Iraq, not even a token contribution for training or mentoring. Maliki's stance was welcomed by many in the room, who viewed Iraq as a politically consuming misadventure.
But they were just as surprised as the hawks at the Iraqi leader's defiance. After eight long years, most of them as partners of sorts, it had come to this; there was no longer anything to negotiate. Maliki's Iraq would go it alone; the US could turn the lights off when it left.
For almost three years since, that seminal meeting has defined the relationship between the Obama White House and Maliki – a rising single-minded strongman and the increasing irrelevance in Iraq of a conquering superpower.
As US eyes turned away from Iraq, Iraqi eyes looked elsewhere for support. Some in Washington began to wonder whether, after almost $1tn (£590bn) and close to 4,500 combat losses, Iraq really wanted a strategic partnership with the US at all. The turmoil surrounding the Arab uprisings put answers to that on hold, for a while at least. It also pushed Maliki towards a deeper relationship with Iran.
With much of the Sunni Arab world in uproar, Maliki wanted the safety in numbers that his Shia neighbours offered. While embracing Iran, Maliki put distance between his government and Iraq's Sunni minority, arresting several tribal leaders, laying siege to a protest camp in Ramadi, and brazenly issuing an arrest warrant for the Sunni former vice-president Tariq al-Hashimi days after US forces left.
He set about co-opting key institutions left behind by the Americans; the Iraqi National Intelligence Service, which was soon stacked with officials from his Dawa party, and Iraq's elite special forces unit, which became his praetorian guard.
Some in Washington started believing that Maliki's moves were consolidating power along nakedly sectarian lines. "It was more out of making sure that power could never be stripped from him," said one senior US diplomat.
Another American official who acted as senior US adviser to the Iraqi government from 2004-11 said: "The only thing that I saw with my eyes that could be construed as sectarian was his appointments, especially in the military." While they were not all sectarian, most were; and the competence of the candidate was not an issue.
Evermore disturbed, Washington protested loudly and made calls for political inclusiveness. But the former occupier no longer had the leverage – or apparently the will – to force Maliki to act.
Today, as the state he tried to build through a ruthless consolidation of power, and a strong dose of paranoia, crumbles around him, critics and foes are circling. First among them is the US. Slighted by three years of neglect and stunned by the three-day capitulation of the Iraqi military, Washington is strongly signalling it has lost faith in Maliki.
The embattled leader has sensed the change in mood and on Wednesday said he would not resign in return for US airstrikes against insurgents.
On Thursday, when asked if Maliki should step aside, Obama said: "It is not our job to choose Iraq's leaders, but I don't think there is any secret that, right now at least, there are deep divisions between Sunni, Shia and Kurdish leaders."
He said the White House had told Maliki that "as long as those deep divisions continue or worsen" the central government would be unable to stem the sectarian crisis engulfing the country.
Obama urged the Iraqis to form a new government, holding out the inducement that it would "make it much easier to partner than it is right now".
The move away from Maliki is precipitous. In testimony to the Senate on Wednesday, the chairman of the Joint Chiefs of Staff, General Martin Dempsey, said repeatedly that the Iraqi government had failed on its commitment to combat sectarianism.
More ominously for a government that urgently seeks US military aid, Dempsey and the defence secretary, Chuck Hagel, told a Senate panel already champing at the bit for the Iraqi prime minister's downfall that military intervention would be futile without concerted action from Maliki to embrace Sunnis.
The reversal is as thorough as it is sudden. Zalmay Khalilzad, the Bush-era US ambassador who assiduously helped install the then-obscure Maliki as leader in 2006, told reporters that Iran could help the US persuade Shia politicians to "make a change" by replacing Maliki. This may yield yet further common ground for the arch foes who, not long ago, fought a vicious proxy war in Iraq, and now seem increasingly drawn together by a common threat.
Iran has yet to declare its hand about who should lead Iraq. However, the Iranian general Qassem Suleimani, long a kingmaker in Baghdad, has an increasingly dim view of Maliki. "He says the man's an idiot," a senior Iraqi politician who met Suleimani last week told the Guardian. "When he was asked about who should lead the country, he didn't say a word."
At the time, Maliki's installation was hailed as "something of a victory for Khalilzad" by Washington Post columnist David Ignatius, who speculated that Maliki's "authentic Iraqi credentials could help pull the country together".
For years that was the prevailing wisdom in Washington, despite mounting evidence that Maliki was a burgeoning authoritarian and Shia supremacist. The Bush administration, yoked to him for the 2007 troop surge, praised Maliki profusely after he confronted the rival Mahdi Army Shia militia in Basra.
A pattern of more selective law enforcement emerged from Maliki over the next few years. He opted to not pay and even arrest members of the Sunni "Sons of Iraq" who fought al-Qaida from 2006-08. His government purged Sunni members of a rival political faction that nevertheless won the 2010 parliamentary election, although Maliki dug in during a subsequent deadlock and ultimately hung on to power.
Hashimi told Foreign Policy magazine that Washington had helped ensure Maliki's grip on power in an ironic confluence of interests with its adversary Tehran. "Iran actively supported Maliki, and we discovered in due course that the US also supported Maliki," the ousted vice-president said in 2011 after fleeing Baghdad.
While US criticism of Maliki was muted, Colin Kahl, the senior Pentagon policy official with the Iraq portfolio, said the government "tried to stay aloof from picking winners or losers" and only backed Maliki "toward the end when he looked inevitable".
This week, one of the US's former "winners", Ahmed Chalabi, has slowly re-emerged as a potential consensus candidate if, as seems increasingly likely, Maliki finds himself adrift. Once a Pentagon favourite, but for the past 10 years a US pariah, Chalabi sat down with the US ambassador to Baghdad this week, according to the New York Times. It is a move that, in such a combustible political climate, is sure to further threaten Maliki's tenure.
The Guardian can confirm that Chalabi, a former deputy prime minister and source of some of the intelligence that led the US to war in Iraq, also met with Suleimani. The stars may be aligning for him. But they are rapidly dimming for Maliki.
Google’s New Web Starter Kit Is A Boilerplate For Multi-Screen Web Development
For a long time now, Google has offered developers a set of what it believes are best practices for modern web development. Today it is going beyond just providing this information by launching the Web Starter Kit, a boilerplate kit similar to HTML5 Boilerplatethat includes templates and tooling for getting multi-screen web apps up and running quickly.
Google says the templates are optimized for performance and responsive layouts to help developers quickly write multi-device web experiences. It essentially implements the recommendations Google has been giving developers already and packages them into actual code with the necessary tooling to get apps off the ground fast. The Starter Kit, it is worth noting, assumes that you have Node, Ruby, the Ruby Sass gem and Gulp.js, a streaming build system, installed on your system. Using Gulp — which is optional — also enables developers to make use of features like LiveReload, automatic image optimization and HTML minification.
Besides the latest version of Chrome, the Starter Kit also supports most other modern browsers, including IE10 and 11, Firefox 30 and 31, as well as most popular mobile browsers.
While there is some overlap with projects like Bootstrap or ZURB’s Foundation, Google makes it pretty easy to use the Starter Kit with the styles from those projects, too.
Unlike those projects, Google doesn’t offer many UI elements and other components. It’s unclear if Google plans to add those at a later stage, but as Google engineer Addy Osmani notes on Hacker News today, the idea isn’t to compete with Bootstrap in terms of UI components. He also argues that Bootstrap, Foundation and similar libraries are “a great start for prototyping your apps, but one of the biggest challenges with them is that it’s (almost too) easy to get stuck using their styles, look and feel for the lifetime of your application.” Unlike these projects, Web Starter Kit wants to encourage developers to change the base styles to suit their own apps.
Just like Bootstrap and Foundation, though, Starter Kit focuses on layouts that offer a fluid grid, though Google’s solution feels a bit more flexible.
The project is officially in beta now. It’s a bit surprising that Google would release this tool only a week ahead of its I/O developer conference in San Francisco, but maybe the company wants to give attendees some time to familiarize themselves with it before running sessions about it at the event.
Source: TechCrunch
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