Bosses of banks saved by taxpayer earn more now than before crisis

 

The bosses of Britain’s bailed-out banks are paid more than they were before the credit crunch struck, a damning report reveals today. The chief executives of the country’s basket-case lenders earned an average basic salary of more than £1.1million last year before bonuses or other benefits. Shockingly, this figure is an increase on the £1million average from 2007 – the year that the financial crisis struck, crippling Britain and plunging the country into recession. Despite the fact that they have the job of salvaging the banks propped up with more than £65billion of taxpayers’ money, they are among the best-paid executives in this country. Their average wage is almost more than 40 times that of the country’s average of £26,000 and it dwarfs the £142,500-a-year salary earned by our Prime Minister. When bonuses and other perks are included bank chiefs enjoyed average total earnings of £3.7million last year – The damning findings by the country’s leading pay experts are likely to anger British taxpayers, who are sitting on losses of £34billion in RBS and Lloyds – or £1,300 per household.

Share slump hammers Euro banks

 

Stocks in Europe and Italian fixed-income securities were pummelled on concern about the euro zone's debt crisis. The benchmark Stoxx Europe 600 Index ended the day with a 4.1 per cent drop. US and Canadian financial markets were closed for the Labor Day holiday. Financial stocks led the decline in Europe as Deutsche Bank chief Josef Ackermann said profit in the banking sector would be curtailed for years because of the sovereign debt crisis and some banks would likely fail. "Prospects for the financial sector overall ... are rather limited," the CEO of Germany's top bank said on Monday. "The outlook for the future growth of revenues is limited by both the current situation and structurally." Deutsche Bank, Credit Suisse Group, Barclays, Societe Generale and Royal Bank of Scotland all shed more than 6.5 per cent, according to Bloomberg News. "Not a great start to the week. There is a lot going on for banks, especially in the light of a low-growth environment and the backdrop in the euro zone not improving," Mike Lenhoff, chief strategist at Brewin Dolphin, told Reuters. Investors also sold euros, buying gold and US dollars instead. The euro dropped 0.7 per cent against the greenback after German Chancellor Angela Merkel's Christian Democratic Union was defeated in an election in her home state, yet another indication voters are unhappy about her efforts to deal with the European debt crisis and reject plans to use more taxpayer money to help solve the problems of countries including Greece and Ireland. "Merkel's problem is that she fails to generate confidence in her policies and those of her coalition partner," Gero Neugebauer, a political science professor at the Free University in Berlin, told Bloomberg. "It's about the consistency of her statements" on bailouts for indebted euro countries. The US currency strengthened 0.66 per cent against a basket of its major counterparts. Investors are eyeing a German constitutional court ruling on Wednesday on claims that Berlin is breaking German law and European treaties by contributing to bailouts for Greece, Ireland and Portugal, according to Reuters. The court is not expected to rule against the contributions, but may add stipulations for dealing with future requests that will complicate the region's bailout plans. "People are pricing in the risk of European meltdown, rather than the likely outcome," Ian King, head of international equities at Legal & General, told Reuters. Against this backdrop, Group of Seven financial leaders are likely to agree later this week to keep monetary policy loose. The G7's finance ministers and central bankers meet on Friday in Marseilles, France to discuss potential to bolster the slowing global economy. Before then however, central bankers are meeting in Australia, Canada, the UK and Europe and may offer investors more perspective on the global outlook.

Swiss bankers demand respect for law from US tax evasion investigators

 

Swiss bankers have rejected another UBS-style tax evasion deal following an ultimatum from the United States last week to turn over the names of more tax cheats. The US has turned up the heat on Switzerland after finding evidence that Credit Suisse and other banks allegedly helped its citizens to break the law by hiding their wealth from the tax authorities. The successful prosecution of UBS two years ago led to a Swiss-US treaty that severely dented Swiss banking secrecy laws by providing the names of nearly 5,000 bank clients.   But rather than burying the problem, the success of the deal has encouraged the US to pursue yet more banks – some of whom are rumoured to have illegally given UBS clients safe haven after Switzerland’s largest bank was caught out.   The Swiss Bankers Association (SBA) is desperate to avoid other banks facing a UBS situation and called on negotiators to find a solution this time that keeps secrecy intact. Law abiding SBA chairman Patrick Odier demanded a universal treaty binding on all countries rather than a raft of ad-hoc agreements between Switzerland and other states.   “The solution must be globally applicable, definitive and in line with current Swiss laws,” Odier said at the SBA’s annual conference in Zurich on Monday.   While accepting that Swiss banks must pay a penalty if they had broken foreign laws, Odier nevertheless denounced the latest demands from US deputy attorney-general James Cole as “too tough”.   “The US must recognise that legal certainty [of banking secrecy] is something that Switzerland must guarantee,” he said. “We cannot have one country refusing to respect the laws of another.”   The SBA pointed to the recent deals with Britain and Germany as a possible template. Under the terms of these treaties – yet to be rubber stamped – Swiss banks would pay withholding taxes on past and future earnings of foreign account holders.   Switzerland has also negotiated a new double taxation agreement with the US that is awaiting approval by the US authorities. UBS deal stands alone “I am very confident that we can find a common solution that would be in the interests of Swiss banks and the US,” SBA chief executive Claude-Alain Margelisch told swissinfo.ch.   “We solved the UBS case and I hope we find a definitive global solution for all Swiss banks. We must make sure that we do not have the same problem for a third time.”   Margelisch also dismissed the option of another UBS-style treaty despite that deal containing a paragraph that could force other Swiss banks to hand over client data if they were found to have broken US laws in the same way.   “The UBS case was special because it involved only one bank in a context that is not comparable with other Swiss banks,” Margelisch told swissinfo.ch. “I could not imagine that the Swiss parliament would be ready to pass another such treaty for the rest of the banking community during election year.”   But the latest signs coming from the US do not indicate that the Department of Justice (DoJ) is willing to compromise. Investigations have widened to around ten Swiss banks and Credit Suisse was recently served with official notice that it was being probed. Not bluffing Stories are also appearing in the media that the US negotiators are losing patience with their Swiss counterparts.   The fact that the second-highest ranking DoJ official, James Cole, has become publicly involved suggests to US tax lawyer Scott Michel that the US is not likely to withdraw its demands for new bank client data.   “It is a mistake to assume that when the DoJ makes a demand that they are bluffing,” Michel told swissinfo.ch. “There appears to be pent-up frustration that two years after the UBS case there is still evidence that other Swiss banks are helping US citizens hide their money away.”   He added: “The DoJ is not even asking for an exchange of information – a lengthy process involving case-by-case examination. They want a large batch of Swiss banking client information and they want it now.”   According to Michel, the US authorities appear to be building a legal basis to impose “draconian financial penalties” on Swiss banks that could dwarf UBS’s $780 million ($990 million) fine.   Swiss media are also reporting that the US would be prepared to start criminal legal proceedings against banks if they do not comply with their demands.

Libya rendition claims: David Cameron calls for inquiry

 

Allegations that MI6 was involved in the rendition of Libyan terror suspects should be examined by an independent inquiry, David Cameron has said. It comes after papers suggesting close ties between MI6, the CIA and the Gaddafi regime were found in Tripoli. An anti-Gaddafi military leader says he wants the UK and US to apologise for organising his 2004 transfer to Libya. An existing inquiry into allegations of UK security agencies' involvement in torture has said it will investigate. Abdel Hakim Belhaj, then a terror suspect but now in charge of the Libyan capital's military forces, says he was tortured after being arrested in Bangkok. He says he was taken to Libya by a CIA and MI6 operation, allegedly confirmed by documents sent to Gaddafi's regime, and sent to prison. The Foreign Office said the government had a "long-standing policy" not to comment on intelligence matters. Mr Belhaj told the BBC: "What happened to me and my family is illegal. It deserves an apology. And for what happened to me when I was captured and tortured. "For all these illegal things, starting with the information given to Libyan security, the interrogation in Bangkok." According to the Guardian, these documents were discovered in an abandoned office building in Tripoli by staff from Human Rights Watch. Mr Belhaj said that MI6 and the CIA did not witness his torture at the hands of the former Libyan regime, but did interview him afterwards. A spokesman for the prime minister said that the existing Detainee Inquiry into rendition was "well placed" to investigate the allegations reported in recent days. "It's not clear precisely what the allegations amount to," the spokesman added. "We don't have a clear picture from these documents, which is precisely why an inquiry like the [Detainee] inquiry might be well placed to consider the issue." A statement from the Detainee Inquiry, to be chaired by Sir Peter Gibson, said that as part of its role of examining the extent of the government's involvement in, or awareness of, improper treatment of detainees, it would "therefore, of course, be considering these allegations of UK involvement in rendition to Libya as part of our work. "We will be seeking more information from government and its agencies as soon as possible."

Blair was 'godfather to Murdoch's daughter'

 

Former prime minister Tony Blair is godfather to one of Rupert Murdoch's young children, sources said on Monday, raising fresh questions about British political links to the media mogul's empire. The revelation first emerged in a Vogue magazine interview with Murdoch's wife Wendi Deng, which also contains claims that Blair was present when Murdoch and Deng's two daughters were baptised beside the River Jordan in March last year. A spokesman for Blair's London office and a spokeswoman for Murdoch's US-based News Corporation both refused to comment on the story in Vogue's October UK edition, which is due out on Thursday. But sources close to News Corp confirmed to AFP that Blair was godfather to Grace, aged nine, Murdoch's eldest daughter by third wife Wendi. A source close to Blair also confirmed the Vogue story was true. News of the link between former Labour premier Blair and Australian-born Murdoch comes two months after the tycoon was forced to close down his News of the World tabloid amid a scandal over phone-hacking. The Vogue article, extracts of which were published in the Daily Telegraph on Monday, says Blair attended the ceremony "garbed in white" and describes him as one of Wendi Murdoch's "closest friends". Hollywood stars Nicole Kidman and Hugh Jackman were named publicly as godparents to Murdoch's young daughters at the time of the ceremony on the banks of the River Jordan, but Blair did not feature in photographs that were released. Jordan's Queen Rania hosted the baptism of Grace and Chloe, eight, Vogue said. A spokeswoman for Vogue UK confirmed that all the information and extracts published in the Daily Telegraph were accurate. They said it was an exclusive arrangement with the newspaper to release it in that way. The phone-hacking scandal dragged in Prime Minister David Cameron when his former media chief Andy Coulson, an ex-News of the World editor, was arrested in July on suspicion of hacking and bribing police. But it raised wider questions about the British establishment's cosy links with Murdoch, especially as Labour, who are now in opposition, made huge efforts to win over the elderly mogul's stable of newspapers.

European bank funding is again in short supply.

Europe's banks are finding short-term financing harder to come by, while fears that the problem may intensify if euro-zone policymakers dither has driven their shares sharply lower.

The evidence is most stark in the queue for short-term cash at the European Central Bank (ECB) tenders. Banks also took a hefty 50 billion euros in six-month cash this week, funding reintroduced by the ECB to ease the strains.

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Concern that a failure by politicians to get to grips with a debt crisis and the threat it could spread to Italy or Spain, could see the funding squeeze persist into September, causing problems for smaller banks, banking industry sources say.

"Everybody is afraid of another Lehman-style drying out of the money market, because this would hit everybody," a German banker said. "On the other hand it's suicidal to lend money to banks in crisis-hit countries - therefore banks prefer to park the money at the ECB."

These worries combined with other fears around the health of banks and sovereigns to produce a stark sell-off overnight.

Shares in France's Societe Generale fell 15 per cent, Italy's Unicredit slumped 9 per cent and the European bank index lost 6.7 per cent, its worst day since March 2009.

The cost of insuring Italian and Spanish bank debt against default is rising. It is now twice as costly to insure Italy's Banco Popolare , Spain's Bankinter and Banco Popolare di Milano as it was at the start of the year.

"There's clearly signs of stress creeping up in the system as a whole and you can see that in the high euro/dollar basis swaps and spot Libor," said Morgan Stanley strategist Elaine Lin, referring to the money markets where banks go for much of their short-term funding.

Bigger names have not been immune. There has also been a sharp rise in credit default swap (CDS) prices for the likes of Unicredit, SocGen, Royal Bank of Scotland and BNP Paribas as investors remain on high alert for perceived early warning signs.

A lesson learned from the last crisis is that while banks may be too big to fail, that doesn't mean they won't have to be bailed out by governments.

The recent euro zone crisis has also stoked fears about structural flaws in Europe's financial system.

The ECB's use of repurchase operations, or repos, as a major tool of monetary policy meant any of 7,856 banks could go on a credit expansion spree, issuing short-term bonds to finance long-term loans, according to a paper last month by the Peterson Institute for International Economics.

That monetary policy has been undermined by the selective default of Greece's sovereign debt, showing sovereign losses are possible and could intensify liquidity problems.

There is also a wall of refinancing needed in the next two years. 4.8 trillion euros of wholesale and interbank funding expire this year and next for Europe's banks, according to the European Banking Authority (EBA), so any prolonged shutdown would cause deep problems.

In France, Italy and Germany the largest two banks alone need to respectively rollover 6 per cent, 9 per cent and 17 per cent of national GDP in debt during 2011 and 2012, according to the Peterson study. That compares to just 1.6 per cent of GDP for the largest two US banks.

US money market funds, a $US2.5 trillion industry that plays a key role in supplying short-term funding to banks, have also retreated from the euro zone in the last two months, compounding the problem for the region's banks.

US prime money fund holdings of euro zone bank securities fell by $US38 billion last month after a $US58 billion drop in June, a combined withdrawal of more than a fifth, according to a report by JPMorgan.

Others have retreated too. Standard Chartered , based in London but operating mostly in Asia, has withdrawn billions of dollars of liquidity to euro zone banks in the last 18 months, choosing to direct it to Asian clients instead.

The situation is seen as a concern, but not yet severe for most banks. Since the crisis, banks have been attempting to better balance their short-term funding with long-term loans, and top lenders took advantage of benign markets early this year to lengthen the duration of their funding.

But not all smaller banks are so well advanced, and many are heavily dependent on wholesale markets.

Default risk jumps

It costs $US1.1 million (11 per cent) to insure the debt of Spanish savings bank Banco Pastor for every $US10 million of debt held, compared to $US565,000 at the start of the year.

And the CDS for Banco Popolare has jumped to 665 basis points from 270 bps at the start of the year, while Bankinter is at 718 bps from 355 bps and Unicredit's is at 363 bps from 188, according to Markit data. SocGen's CDS jumped 65 bps on Wednesday to 325 bps and BNP's rose to over 220, both more than double their level at the start of the year.

British banks, until recently seen as a relatively safe haven away from the euro zone storm, have seen their insurance cost rise as they rely on wholesale markets to fill their funding gaps, with RBS's CDS rising to 305 bps from 213.

But those levels are a long way off those seen in the darkest days of 2008/09.

There are fewer liquidity problems than in 2010 as markets are operating more efficiently, a trading director at a Spanish bank said. "A lot of banks in a lot of countries have liquidity but aren't lending it, they're giving it to the central bank."

Most banks have recently said they are on track with their funding plans - UniCredit said 85 per cent of its 2011 funding was complete by the end of July and RBS said it was 78 per cent of the way through its long-term refinancing, for example, and Morgan Stanley estimated major banks were 65-80 per cent of the way through their 2011 needs.

But they are doing so at a cost. Lloyds and other banks have seen profits hit hard by higher funding and liquidity costs, and that pain looks set to last into next year.

The impact will be felt not just in bank profits, but also on Europe's stuttering economic recovery.

Fabrizio Viola, chief executive of Italy's mid-sized Banca Popolare dell'Emilia Romagna said if costs didn't ease towards the end of the year it would force lenders to cut lending. "There won't be any alternative," he said.

Greece -- is defaulting on its debt, as its bond investors are being asked to swap their securities for new ones with less appealing terms.

For Europe, the unthinkable now is reality: A euro zone country -- Greece -- is defaulting on its debt, as its bond investors are being asked to swap their securities for new ones with less appealing terms.

The idea is to reduce the country’s crushing debt burden and give it time to mend its wounded economy. Turn in your Greek bond that matures in two years, for example, and get one that won't mature for 30 years.

Defaults are supposed to happen in Third World countries, not to a nation in the euro zone. It shows how the world has been turned upside down since the 2008 financial crash exposed the severe debt levels of many developed nations.

The credit rating firms haven’t yet ruled on the details of the European Union’s second bailout of Greece, announced Thursday. But it’s widely expected that, under the plan, Greece will be declared in “selective default” on its nearly $500 billion in debt, meaning that some investors will take losses while others may be paid in full.

As part of the EU’s program to lend another $157 billion to Greece to help it cover its debts, the Continent’s leaders want private bondholders to voluntarily share in the cost of rescuing the nation from fiscal ruin.

Reuters’ Felix Salmon nicely delineated the choices faced by Greek bondholders:

-- Do nothing, and hope that Greece pays you in full and on time.

-- Turn in your bonds for a new 30-year bond and accept a modest annual interest return of 4.5%. Your principal would be guaranteed with an embedded zero-coupon bond (i.e., one that pays all of its interest at maturity) from a triple-A-rated EU institution, probably the European Financial Stability Facility rescue fund.

-- Turn in your bonds for a new 30-year bond but take a 20% haircut on your principal. In return you’d  be paid an annual interest return of 6.42%; again, the remaining principal would be guaranteed with zero-coupon collateral.

-- Turn in your bonds for a new 15-year bond, take a 20% haircut on your principal, earn an annual interest return of 5.9%, and get only a partial principal guarantee through funds held in an escrow account.

It remains to be seen how investors will react, although some of Europe’s biggest banks and insurers, which own massive amounts of bonds of Greece and other euro-zone governments, signaled their support for the plan Thursday. Those institutions include German insurer Allianz, French bank Societe Generale and National Bank of Greece.

More important will be what happens in the bond markets of Europe’s other financially challenged states -- Portugal, Ireland, Spain and Italy. In recent weeks, investors had been demanding ever-higher market yields on those countries’ bonds, meaning the securities’ values were tumbling as the Greek debt “contagion” spread.

Those yields began to ease this week ahead of the EU summit Thursday on Greece. The yield on two-year Irish bonds (charted at left) fell to 19.1% on Thursday (before the Greek plan was announced) from 21.8% on Wednesday and 23.2% on Monday.

Italy’s two-year bond yield fell to 3.62% from 3.98% on Wednesday and 4.57% on Monday.

The EU plan for Greece also includes new financial aid for Ireland and Portugal and back-up credit lines for Spain and Italy. The EU’s intent is to show bond investors that the Continent is throwing its full financial support behind its troubled member states, hoping to allay fears about owning the countries’ debt. In theory, that should drive market interest rates down, lowering the risk of a wider crisis.

But as Reuters’ Salmon noted, there’s another way for investors to interpret the latest bailout:

Overall, this looks like a deal which can quite easily be scaled up and used as a framework for future default/restructurings. I don’t know if that’s the intent. But there’s nothing here to reassure holders of Portuguese and Irish bonds -- or even Spanish and Italian bonds, for that matter -- that they’re home safe. Greece will be the first EU country to default on its debt. But I doubt it’ll be the last.

Fans of Tony Blair and Peter Mandelson, who mourn their departure from the political frontline, will be dancing with joy.

Two of the founding fathers of New Labour could make a spectacular comeback on the world stage in the next few years. I reported last month that David Cameron is prepared to back Mandelson as the next director general of the World Trade Organisation, raising the prospect of a fourth comeback by the former Prince of Darkness.

One senior diplomatic source said that Downing Street is deadly serious about lining up Britain's former European trade commissioner for one of two posts:

• The next director general of the WTO after the Frenchman Pascal Lamy stands down next year. Britain believes France will support a British candidate after George Osborne provided early – and decisive – backing for Christine Lagarde as the managing director of the IMF.

• The EU's high representative for foreign affairs if Baroness Ashton decides to throw in the towel before her term ends in 2014. Ministers, who are supportive of Ashton in public, believe she is struggling. They would not be surprised if she stands down. Mandelson had wanted the job in 2009 and believes Gordon Brown let him down by failing to back him.

This is what the diplomatic source told me about Mandelson:

Of all the figures associated with New Labour Peter Mandelson is the one figure who is on Downing Street's radar. David Cameron and George Osborne are serious about finding him a big job. The WTO post is coming up. But Peter Mandelson would be an obvious candidate to succeed Cathy Ashton if she stands down. Ministers accept that that post would have to go to a Labour candidate between now and 2014 because of the deal with the European Parliament in 2009 [over top EU jobs] when Cathy and Herman Van Rompuy, [centre right president of the European Council], were appointed.

If Mandelson lands a job he may be greeted by familiar face on the world stage. The thought is slowly dawning on ministers and officials that Tony Blair may be the ideal candidate to succeed José Manuel Barroso as president of the European Commission when he retires after two terms in 2014.

This would be a more modest post than the job Blair recently floated. In an interview with the Times to promote the latest volume of his memoirs, the former prime minister said that the EU needs a directly elected president to give the union greater clout on the world stage.

The president of the European Commission is appointed by the heads of government of all 27 EU member states. Barroso often lives in fear of large member states, particularly France.

Whitehall sources say that it is early days and Blair's chances may depend on the outcome of next year's French presidential elections. Nicolas Sarkozy, the French president, would be a strong candidate to succeed Barroso if he loses the presidential election next year. Angela Merkel, the German chancellor, may also like to become the first German president of the commission since Walter Hallstein in 1967.

Blair may also feel that he has had his fill of high European politics. He had hoped to become the first president of the European Council in 2009. But his campaign fell apart when José Luis Zapatero, the Spanish prime minister, vetoed Blair in private. Zapatero will stand down at the next election in Spain.

If Blair enters the frame he will have certain advantages. Unlike Barroso, who hails from a relatively small member state (Portugal) and who was a centre right prime minister, Blair is from one of the "big three" member states and was (if only on paper) a centre left prime minister.

But Blair would have one key disadvantage at a time when the single currency is struggling: Britain is not a member of the euro. But Blair could argue that at least he tried on that front while he was prime minister.

Serbian War Crimes Fugitive Ratko Mladic Arrested

Serbian President Boris Tadic has announced the arrest of longtime war-crimes fugitive Ratko Mladic, the former commander of Bosnian Serb forces during the war that took place after Yugoslavia's breakup.

President Tadic said Mladic was arrested on Serbian soil and that the process of handing him over to the U.N. war crimes tribunal is under way.

Tadic said Serbia has now closed another chapter in its recent history, one that will bring the country a step closer to full reconciliation.  He promised there also will be an investigation into why it took 16 years to apprehend the 69-year-old former military leader.

The United Nations tribunal on war crimes committed in the former Yugoslavia indicted Mladic in 1995 for atrocities he allegedly carried out or ordered during the three-year siege of the Bosnian city of Sarajevo, and for the killing of 8,000 Bosnian Muslim men and boys near the city of Srebrenica.

The massacre of civilians at Srebrenica is considered to be the worst atrocity in Europe since the Second World War.  Mladic also was seen as the architect of a bloody 43-month mortar assault on Bosnia's capital, Sarajevo, from 1992-96 - the longest siege in the history of modern warfare.  

Mladic was one of three principal war-crimes suspects who remained at large for years following the war in Bosnia.  Former Bosnian Serb leader Radovan Karadzic was captured in 2008 in Belgrade.  Still wanted is a key Croatian Serb figure, Goran Hadzic.

The chief prosecutor for the U.N. war crimes tribunal, Serge Brammertz, had criticized Serbia last week for not doing enough to capture Mladic or Hadzic.

European Union officials have made delivering Mladic a key condition for favorable action on Serbia's application to join the EU.

 

Thousands of Spaniards in central Madrid have defied a ban on their protest camp and continued their open-air sit-in.

Thousands of Spaniards in central Madrid have defied a ban on their protest camp and continued their open-air sit-in.

Spain's electoral board had ruled that the gathering could not continue into the weekend.

It argued the protest could unduly influence voters taking part in local and regional elections across the country on Sunday.

The decision - and the deadline - were met with jeers in Puerta del Sol, where thousands gather every evening - and hundreds have been camping out for a week now.

Dubbed the "Spanish revolution", the protest began with a march through Madrid on Sunday, led by young Spaniards angry at mass unemployment, austerity measures and political corruption.

It turned into a spontaneous sit-in on the square in Sol, which organisers say has now been mirrored in 57 other cities.


Our life is practically over, but they are acting for their future. They have everything to gain and nothing to lose”

Alfredo Guerra
Unemployed hotel worker
Independent of any trade union or political party, the protesters' ranks have been swollen through campaigns on social networking sites and Twitter.

"Finally the Spanish people are on the street," says Juan Lopez, 30, a camp spokesman. He lost his job six months ago in a round of staff cuts due to the economic crisis.

"Young people are here because they're worried about the future. We can't tolerate it that 43% of the young have no jobs. That should be the first priority of our society," he argues.

Spain's young generation has been hard-hit by the crisis. Most had temporary contracts, making them cheap and easy to fire.

Many highly-qualified graduates are forced to work as low-paid interns for years and a growing number have moved back home to live with their parents.

'Democracy camp'
Increasingly frustrated, they have finally found their voice.

"On Sunday we realised we were not alone," Juan Lopez explains. "Before [the march] we didn't feel we could make a difference. Now we want the politicians to listen to the people, and help change our country."


The protesters are not identifying with any particular political party, Spanish media say.
The protesters' demands, pasted up all over Puerta del Sol, are impossible to ignore.

A statue of King Carlos III on horseback has been decorated with declarations. The metro entrance is now a vast citizens' noticeboard. "We are not slaves," one sign says; another instructs: "No alcohol: today the priority is revolution!"

The camp has become more organised by the day, with bright blue tarpaulins strung from statues and lamp posts and tents pitched on the cobblestones. There are sofas, mattresses and - since Wednesday - four chemical toilets, provided by the firm for free.

Behind a table piled high with fruit, biscuits and Turkish delight, is a mountain of milk cartons, canned fish and crisps.

"I brought bread, tomatoes, cheese and chickpeas," says Leticia Moya, 28, an unemployed nursery worker who lives close to the camp and is one of many supporters donating supplies.

"I feel we should all collaborate, however we can. I can't stay sleeping here overnight, but at least I can bring food. I don't have much, but I prefer to spend my money on this, than on going out at the weekend," she says.

Usually filled with mime artists, tourists and shoppers, the plaza in Sol has been transformed into a vast democracy camp.

During the day, curious locals - many of them pensioners - tour the site, joining in on one of dozens of animated debates.

Suggestions box
There are committees for food, cleaning, legal affairs and communication and daily assembly meetings that hear proposals and allow joint decisions to be made.


The protests have spread to Bilbao in the north and to other cities in Spain
"It's the young who are leading this," says Alfredo Guerra, admiringly, as he listens in on one assembly. A hotel worker, aged 56, he also lost his job in the recession.

"Our life is practically over, but they are acting for their future. They have everything to gain and nothing to lose," he says.

A core group of protesters have been camping out non-stop since Sunday. Others, who have to work or study, sign up for shifts to join them.

A rough attempt by police to dislodge the apparently peaceful demonstration on Sunday night only brought more people out in support.

In one corner, there is a queue to sign a petition that reads: "We want to demonstrate that society is not asleep, and we will fight for what we deserve. We want a society that prioritises people over economic interests."

"We're fed up with politicians governing according to the markets, and not the needs of the citizens," explains Antonio Rodriguez. "They don't represent us - we're asking for change," he says.

Opinion polls show the Socialist government will fare badly in Sunday's elections. But the protesters in Sol are no happier with Spain's right-wing alternative.

There is much talk on the plaza of electoral reform - to prevent power simply switching back and forth between two parties. Many also demand a ban on all candidates implicated in corruption.

Proposals for debate are posted in a suggestions box.

The camp in Sol has been growing every night, even spawning its own internet TV channel - soltv.tv - and dominating the local news coverage. But as it all emerged spontaneously, no-one is quite sure where it will lead.

Despite the ban, they have vowed to stay put - right in the middle of Madrid.

"For the moment, we're staying here 24 hours a day," says Juan Lopez. "We have to make sure our message is heard."

EasyJet, the low-cost carrier, has reported a 94% rise in pre-tax losses

The airline claimed the losses were "in line with expectations" and attributed costs of £43m to the increase in fuel costs, and £21m to rises in passenger tax.

The airline recorded an 8.1% increase in revenue for the period to £1.27bn.

Carolyn McCall, chief executive of easyJet, said: "The past six months has been tough, with sharply rising fuel costs, combined with cautious behaviour by consumers and an adverse impact from taxes on passengers.

"Despite this difficult environment, we have made strong progress over the past six months in implementing the strategy outlined, following our review of the business last year.

"We have also made use of the commercial freedom granted by the brand licence agreement and delivered progress in controlling costs."

The airline stated that it was disappointed by the Government’s proposals to change air passenger duty (APD), which, easyJet claims, will "reduce the incentives the tax provides for environmentally efficient travel and will undermine economic growth".

EasyJet said it would be launching a new campaign to voice its concerns to the Government about further rises in APD.   

EasyJet and its founder, Sir Stelios Haji-Ioannou, settled their "easy" brand name dispute in court last October, when the airline agreed to pay thousands of pounds a year in royalties to Haji-Ioannou in order to use the "easy" name.

 

Middle-ranking gardai have demanded a specialist unit within the force to crack down on social welfare fraud.

The Association of Garda Sergeants and Inspectors (Agsi) said a dedicated benefits fraud team would save the public purse as much as 300 million euro.
Sergeant Padraic Tully, on the Agsi national executive, said the unit would work with the Department of Social Protection to weed out prolific and repeat offenders in particular.

Organised crime is changing and becoming increasingly diverse in its methods, group structures, and impact on society, reveals Europol’s 2011 Organised Crime Threat Assessment (OCTA), published today.

Organised crime is changing and becoming increasingly diverse in its methods, group structures, and impact on society, reveals Europol’s 2011 Organised Crime Threat Assessment (OCTA), published today. The bi–annual report, which assesses current and expected trends in organised crime affecting the European Union, explores how a new criminal landscape is emerging, marked increasingly by highly mobile and flexible groups operating in multiple jurisdictions and criminal sectors.

"Organised crime is a multi–billion euro business in Europe and it is growing in scale. The further expansion of Internet and mobile technologies, the proliferation of illicit trafficking routes and methods as well as opportunities offered by the global economic crisis, have all contributed to the development of a more potent threat from organised crime," says Rob Wainwright, Director of Europol.

The report highlights the fact that criminal groups are increasingly multi–commodity and poly–criminal in their activities, gathering diverse portfolios of criminal business interests, improving their resilience at a time of economic austerity and strengthening their capability to identify and exploit new illicit markets. Activities such as carbon credit fraud, payment card fraud and commodity counterfeiting attract increasing interest due to a lower level of perceived risk.

The OCTA estimates for the first time that organised crime groups derived more than 1.5 billion euro from payment card fraud in the EU. While the introduction of the EMV chip standard provides a very high level of protection for payment card transactions within the EU, lack of wholesale implementation in other regions has compelled EU card issuers to retain magnetic strips. As a result, half the fraudulent withdrawals made with cloned EU payment cards are currently made outside the EU.

Strong levels of cooperation exist between different organised crime groups, more than ever before, transcending national, ethnic, and business differences. An increasingly collaborative atmosphere has also intensified the practice of barter, in which illicit commodities are exchanged rather than purchased with cash. This has made organised crime activities less visible to authorities targeting criminal assets.

Internet technology has now emerged as a key facilitator for the vast majority of offline organised crime activity. In addition to the high–tech crimes of cybercrime, payment card fraud, the distribution of child abuse material, and audio visual piracy, extensive use of the internet now underpins illicit drug synthesis, extraction and distribution, the recruitment and marketing of victims of trafficking in human beings, the facilitation of illegal immigration, the supply of counterfeit commodities, trafficking in endangered species, and many other criminal activities. It is also widely used as a secure communication and money laundering tool by criminal groups.

In geographical terms the most prominent organised crime activities in the EU are underpinned by a logistical architecture located around five key hubs.

The North West hub retains its role as the principal coordination centre for drug distribution, due to its proximity to highly profitable destination markets, its well developed commercial and transport infrastructure, and its production capacity. The North East hub remains a focus for transit of illicit commodities to and from the Former Soviet Union and a base for violent poly–criminal groups with international reach. The rapid expansion in Europe, in the last two years, of the activities of Lithuanian organised crime groups is a notable feature. The leading role of the South West hub in cocaine and cannabis resin transit and distribution persists despite eastward shifts in some trafficking routes, and it currently serves also as a transit zone for victims of THB for sexual exploitation. The Southern hub continues to be prominent in criminal entrepreneurship, as a centre for counterfeit currency and commodities, a transit zone for victims of THB and illegal immigrants, and a base for some of the best resourced criminal groups in Europe.

Of all the hubs the South East has seen the greatest expansion in recent years, as a result of increased trafficking via the Black Sea, proliferation of numerous Balkan routes for illicit commodities to and from the EU, and a significant increase in illegal immigration via Greece. These developments in the region have contributed to the formation of a Balkan axis for trafficking to the EU, consisting of the Western Balkans and South East Europe. New transit hubs are in the process of being formed in countries such as Hungary, where several Balkan and Black Sea routes converge. Albanian speaking, Turkish and Former Soviet Union criminal groups are seeking to expand their interests in the EU, and may exploit opportunities in the possible accession of Bulgaria and Romania to the Schengen Zone, and recent and prospective EU visa exemptions for Western Balkan states, the Ukraine and Moldova.

"Europol’s OCTA is the definitive EU assessment of organised crime activity. Ministers, police chiefs, and policy makers will use it to set priorities and establish effective response measures. Europol looks forward to continuing to play a significant role in the fight against organised crime," says the Europol Director, Rob Wainwright.

France has been transfixed by an appalling human drama - the murder of a mother and four teenagers, shot dead in chillingly clinical fashion, seemingly by the children's father.

Part of what makes the story so compelling is the prosperous, apparently happy, provincial setting in which it took place.
There is also the fact that the presumed killer - Xavier Dupont de Ligonnes - is still at large three weeks after the murders.
Murders happen all the time, but now and then there are murders that, by their extraordinary circumstances, by the eccentric character of their perpetrator, or by the social context in which they are set, somehow command our attention in a different way.
Such is the case of the bizarre, terrible tale of Xavier Dupont de Ligonnes - France's most wanted man.
Strict Catholic upbringing
As his name suggests (the "de" is the clue) Xavier Dupont de Ligonnes comes from old French nobility.
His ancestors lived in a southern province called the Rouergue and included a sister of the 19th Century poet Lamartine.

Agnes and Xavier Dupont de Ligonnes seemed a perfectly happy couple
Xavier was born 50 years ago in Versailles, and typically for the place was given a strict Catholic upbringing.
He married a young woman whom he had met in Versailles called Agnes. They had four children - Arthur, who was 20 and a student; Thomas, 18, a gifted musician; Anne, 16, and Benoit, 13, who were both still at school.
They settled in Nantes, the city at the mouth of the river Loire which in recent years has become a thriving economic hub. Thousands of families have moved there from Paris because of its agreeable provincial lifestyle.
The Dupont de Ligonnes lived in a smart townhouse. They had three cars. The younger children attended a Catholic school and Benoit was a choirboy at the church. Agnes taught catechism.
Photographs show an attractive, happy family. There is a particularly poignant one of Xavier holding his daughter Anne. They are looking at the camera and she is giggling.
Holding hands
This is a natural, properly functioning home where people love each other and things always work out in the end. Not a hint of the lurking psychological darkness.



With the .22 rifle and the silencer, the family were shot dead one by one, probably as they slept

Last December, Xavier Dupont de Ligonnes began attending a shooting club outside Nantes.
He told the club's owner that he had inherited a rifle from his father who had recently died and he wanted to learn how to use it.
He attended regularly, sometimes taking along two of his sons. The owner said they seemed totally normal. He said he had lunch with the family one day and the parents laughed together and held hands.
At the start of April, Xavier went to the club to practise four days in a row. He also bought a silencer.
At about this time he bought some other items too - sacking, cleaning fluid, chalk lime, a spade and a two-wheel trolley.
On Sunday 3 April he took the family out for a dinner in Nantes - again all seemed normal.
Mistress and debts
But it was probably on the next night, Monday, that the plan was put into effect.

The two younger children were still at school
With the .22 rifle and the silencer, the family were shot dead one by one, probably as they slept. The two family Labradors were also shot.
The bodies were buried under the terrace and Xavier Dupont de Ligonnes disappeared.
France has been, quite naturally, riveted.
Since the bodies were found two weeks ago, we have learned more about Xavier Dupont de Ligonnes, whose handsome if bland features look out from every news stand.
It appeared he had planned an abrupt departure - writing to the children's schools to say that the family was emigrating.
His financial situation was catastrophic. He had various internet-related businesses and they were failing.
He had spent his wife's inheritance and had borrowed money from a lover in Paris, who was now demanding it back.
Crisis of faith
We also know he had had a complex relation with his late father, whom he hero-worshipped.

The family were shot dead, one by one
His Catholic faith was also in crisis. He had shared his doubts on a Roman Catholic internet chat site, and if you wanted to, you could read his religious ramblings online.
Above all - where is he? He was seen in southern France in the days after the killings, but since then nothing.
It is not just the horrific human element that makes it all so gripping.
Somehow it seems a very French murder story, something to do with the provincial setting and with the times we live in.
It is the tale of an upper-middle-class French family caught at a juncture between a prosperous, reassuring past and an uncertain, unsettling future.
At the centre of the story is a man who fails to find his way in this changing world and apparently makes his own wife and children pay the price.

European antitrust authorities have opened two investigations into the financial institutions and clearinghouse that operate the global market for credit-default swaps, the derivatives that act as insurance against a debt default.

European antitrust authorities have opened two investigations into the financial institutions and clearinghouse that operate the global market for credit-default swaps, the derivatives that act as insurance against a debt default.

The probes signal more scrutiny of the $23 trillion global credit-default-swaps market. European Union officials are investigating whether the relationships between large financial firms, market information providers and clearinghouses have distorted competition in the market. These instruments were blamed for exacerbating the financial crisis in 2008 and the European sovereign-debt crisis last year.

"[Credit-default swaps] play a useful role for financial markets and for the economy," EU antitrust chief Joaquin Almunia said in a statement Friday announcing the investigations. "Recent developments have shown, however, that the trading of this asset class suffers from a number of inefficiencies that cannot be solved through regulation alone."

EU legislation proposed last year would tighten scrutiny of credit-default-swaps trading, particularly for those investors who use the instruments to speculate rather than to hedge holdings of bonds. The new rules are being debated by the European Parliament and European Council, which represents national governments.

The first antitrust probe, which parallels an investigation begun by the U.S. Justice Department in 2009, will look at whether 16 investment banks and Markit Group Ltd., a provider of swaps prices, are blocking competitors who might disseminate information. The commission said it suspects that the banks are giving raw swaps data only to Markit, which is partly owned by the banks.

Markit said in a statement that it doesn't believe it has engaged in any inappropriate conduct. "Markit has no exclusive arrangements with any data provider and makes its data and related products widely available to global market participants," Markit said in the statement.

The 16 banks involved in the commission investigation are J.P. Morgan Chase & Co., Bank of America Corp., Barclays PLC , BNP Paribas SA, Citigroup Inc., Commerzbank AG, Credit Suisse Group, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings PLC, Morgan Stanley, Royal Bank of Scotland Group PLC, UBS AG, Wells Fargo & Co., Crédit Agricole SA and Société Générale SA, the commission said.

All either declined to comment or didn't immediately return messages.

A spokeswoman for the Justice Department said Friday that the U.S. agency's investigation into the credit-derivatives sector is ongoing.

The other probe will examine whether agreements between clearinghouse ICE Clear Europe and nine investment banks create an incentive for these banks to route swaps trades through ICE Clear, blocking other clearinghouses from entering the market. ICE Clear Europe, a subsidiary of Atlanta-based IntercontinentalExchange Inc., is the dominant clearinghouse for credit-default-swaps trades in Europe.

IntercontinentalExchange spokeswoman Kelly Loeffler said the company has become the dominant European credit-default-swaps clearinghouse by offering better services and more products, not because of profit-sharing or discounts offered to the banks.

"We've invested hundreds of millions of dollars to make our system work," Ms. Loeffler said. "We first and foremost have made those investments to compete on the operational side."

The agreements stem from IntercontinentalExchange's purchase of Clearing Corp. in 2009 from the nine banks. Those agreements call for IntercontinentalExchange to split profits from swaps clearing with the banks and offer them lower fees to use its clearing services. The EU is examining whether the contracts give these banks an unfair advantage over other swaps dealers.

The global credit-default-swaps market is controlled by fewer than 20 of the world's largest financial institutions. These banks buy and sell swaps contracts on behalf of clients such as insurance companies that want to protect themselves against the default of bonds in their portfolios or hedge funds that want to speculate on the default risk of countries, companies or even homeowners.

The banks also trade contracts using their own money, both to hedge positions and to speculate.

The European Commission, the EU's executive arm and its antitrust watchdog, has been concerned for several years about the lack of competition in Europe among clearinghouses, which are entities that stand between buyers and sellers of securities, absorbing losses if either side can't fulfill their obligations under a contract. A number of European exchanges, most notably Deutsche Börse AG, own clearinghouses that are the exclusive clearers of trades on the exchange.

Since regulatory pressure prompted European swaps dealers to start clearing their trades in 2009, ICE Clear Europe has handled €5.3 trillion ($7.86 trillion) of contracts, nearly all the credit-default-swaps trades that have been cleared in Europe.

flood of North African immigrants is widening divisions among some of Europe's most powerful nations and adding to strains on the long-held dream of a united Europe.

 flood of North African immigrants is widening divisions among some of Europe's most powerful nations and adding to strains on the long-held dream of a united Europe.
Since January an estimated 26,000 Tunisians have fled unrest in their country for the shores of Italy, where officials say the burden of caring for these immigrants should be shared by the 27-nation European Union.
The Italians have taken the unusual step of issuing many of the Tunisians temporary residence permits and say that those papers allow the immigrants to go anywhere in a 25-nation zone that permits legal European residents to cross borders without a visa.
The Italian stance has infuriated Germany and France, the former colonial power where many of the Tunisians want to reunite with relatives, friends and co-workers.
Neither side is backing down, tensions are rising, and on Sunday French police stopped a train carrying Tunisian immigrants from Italy at the border. It was an unprecedented affront to Europe's cherished vision of visa-free travel in a united continent where in many places there is nothing to indicate a national border beyond a roadside welcome sign.
There was a large French border police presence on the Italian frontier Monday and officers were checking the passports of all Tunisians passing through, and their ability to support themselves.
In Germany, separated from Italy by Austria and Switzerland, Interior Ministry spokesman Jens Teschke said there would be "more intensive observation" of people entering the country, though he would not give specifics. He said there were still no formal controls on borders that have been visa-free.
The state interior ministry in Bavaria, which contains all of Germany's border with Austria, said that a system of spot checks near the borders that has been in place since the visa-free zone started has been stepped up somewhat, leading to more checks on roads, train stations within some 20 miles of the border.
"It's a bit easy for Italy to be generous with other people's territory," said Christian Estrosi, the mayor of the French city of Nice, near the Italian border, and a prominent member of President Nicolas Sarkozy's conservative UMP party. "What are the consequences of this? Italy, in the name of the EU, has made an incredible offer of hope" to North African immigrants. "This is not acceptable."
A host of other disputes are simultaneously threatening the grand project of European unity: On the same day the French stopped the train at the Italian border of Ventimiglia, a party that opposes the EU and financial bailouts for struggling countries made significant electoral gains in Finnish elections.
The True Finns may well play a role in a new Finnish government, jeopardizing the effort to stabilize the common euro currency by bailing out Portugal and other nations — perhaps the single most visible symbol of European unity.
In any event, political wrangling in Portugal may endanger its ability to negotiate the bailout that it says it needs. And in Greece, calls are growing louder for the country to ignore the financial strictures imposed on it by the EU and default on its debts instead.
While no single issue will sever the strong, deep ties between the nations of the EU, many observers see significant long-term damage to the idea of uniting vastly dissimilar cultures and economies in a single confederation.
France said it was justified in halting the train from Italy because there were pro-immigration activists on the train who threatened public order. In any event, French officials said, it would honor the Italian residence permits only if the immigrants could show they had enough money to support themselves.
The town of Ventimiglia said Sunday that it would find temporary shelter for the Tunisians who were aboard the train. It was not immediately clear Monday if all were still in the town, returning to other places in Italy or trying to get to France by other means.
Italian Interior Minister Roberto Maroni said the immigrants should be allowed to travel throughout the Schengen area.
"We have given the migrants travel documents, and we gave everything that is needed," Maroni said in an interview on Italy's Sky TG24 TV.
But Michele Cercone, a European Union spokesman, said the French appeared to be within their rights under the Schengen agreement to refuse entry to the immigrants. A temporary residence permit, Cercone said, is neither an EU passport nor and EU visa and does not grant people the right to move freely in the borderless Schengen area — the group of 25 European countries to which both Italy and France belong.
Cercone also said the Schengen agreement allows police checks along borders, so long as they are not systematic and do not amount to border controls. And people can be prevented from crossing a border for reasons of public security, he said.

Two Muslim women wearing full face veils have been arrested within hours of France's burka ban becoming a law

Technically, the women should now face fines of 150 euros (£133), as well as citizenship lessons, but officers involved in the arrest said they were likely to be released "shortly' after being questioned about an "illegal gathering."
"They should not be here demonstrating against anything, least of all the face veil ban," said one officer, who was wearing full riot gear as he stood outside Notre Dame.
"Women officers will be dealing with the offenders, and the matter will be dealt with as sensitively as possible."
Alexis Marsan, a public order official who also attended the scene, confirmed that the rally in front of the cathedral was unauthorised, and that others taking part had also been arrested.
Rachid Nekkaz, a Muslim activist who organised the demonstration, said the rally had been called to protest the ban, which is the first of its kind to be enforced in Europe.

One person has been killed and another is in a critical condition after a shooting on board a nuclear submarine, police said.

One person has been killed and another is in a critical condition after a shooting on board a nuclear submarine, police said.

One man has been arrested after the incident on HMS Astute, which is docked in Southampton, but Hampshire police are refusing to comment on reports that the three people involved are all service personnel.

They said the incident was not terrorist related and there was no risk to the public.

Several police vehicles were sent to the Eastern Docks and officers could be seen on the gangway of the £1bn submarine.

A police spokesman said: "Hampshire police were called by their Ministry of Defence colleagues at 12.12pm today and are currently liaising with them to establish the exact circumstances of the incident.

"It is believed two people have sustained injuries as a result of gun shots being discharged on the vessel. People should be reassured there is no risk to public safety.

"Hampshire Constabulary and the MoD are keen to stress this incident is not terrorist related. More information will be circulated as it becomes available," the police said.

The MoD referred all calls to Hampshire police.

HMS Astute is described by the Royal Navy as the first of a new class of vessel designed to be the largest and most powerful nuclear attack submarines ever built for it.

Built in Barrow-in-Furness, Cumbria, and based at Faslane, in Scotland, this is Astute's first trip south.

The five-day visit to Southampton was billed as the first chance for people outside north-west England and Scotland to see the boat.

Astute was not open to the public while in Southampton, but civic leaders, sea cadets, scouts, and school and college parties were being invited on to the 7,500-tonne vessel.

Astute's commanding officer, Commander Iain Breckenridge, said before arriving in Southampton: "My ship's company and I are very much looking forward to the visit and meeting the people of the city. And I'm sure scouts, school pupils and other visitors will be impressed with the capabilities of this formidable vessel."

Since commissioning last August, the boat has had what the navy calls an interesting time, including running aground off the Isle of Skye. It is now in the middle of a "demanding" trials programme.

The submarine's Spearfish torpedoes and Tomahawk cruise missiles are capable of delivering pinpoint strikes from 1,240 miles with conventional weapons. Its nuclear reactor means it does not need refuelling and it makes its own air and water, enabling it to circumnavigate the globe without needing to surface.

It was the first in a fleet of six which will replace the Royal Navy's Trafalgar class submarines.

Tesco has become the first general retailer to start a used car buying website.

The supermarket giant claims it can offer low prices by controlling costs.

It will show detailed pictures of vehicles for sale - including any scrapes and dents - as well as a history report and fuel usage details.

It will not, however, give people the chance to test-drive vehicles. Instead, a video of the car being tested will be available for would-be purchasers.

Tesco says all vehicles will undergo a strict vetting process, including a mechanical inspection by the RAC.

The cars will come with a one month RAC warranty and the price will not be open to negotiation.

Tesco says by supplying directly to customers, there is no middle man, no expensive showroom and no salespeople on commission.

The majority of cars for sale will come from fleet and lease hire companies, with one registered keeper and a detailed service history.

Steve Fowler, editor of What Car? magazine, said it was too early to tell if car buyers would be happy buying without physically seeing or driving the vehicle, but said it did appear to offer a realistic alternative to "standing on a forecourt, haggling".

The motor trade, which is worth £24bn a year, is one of the biggest generators of complaints to consumer groups.

As well as the profit from selling the cars, Tesco could also benefit from drivers using its financial services, such as a loan, insurance or the breakdown cover it offers.

Ireland owes UK banks €113bn with other exposures of €45bn hardly comes as any surprise given the large presence of British banks in the Irish banking market, the extent of our debts to banks from other eurozone countries isn't so widely known. So to whom in the eurozone do we owe all of this money?

latest figures from the Bank for International Settlements (BIS) show that Ireland owes banks in other EU countries a massive €310bn, with €196bn of this money due to banks elsewhere in the eurozone.

These huge exposures almost certainly explain why the ECB has refused to countenance "haircuts" for the senior bondholders of the Irish banks.

One of the salient features of the Irish banking crisis since it first erupted two-and-a-half years ago has been the dogged refusal of the ECB to allow us to impose haircuts or discounts on the holders of the senior bonds of the Irish banks. This was despite the fact that these senior bonds were trading at a significant discount to their face value.

Instead, for reasons best known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.

So why has the ECB been so solicitous of the interests of the senior bondholders. The most recent figures from the Bank for International Settlements, the umbrella body for the world's central banks, provide us with some clues.

At the end of September 2010 Ireland owed the banks of other EU member countries €310bn, of which €196bn was owed to banks in other eurozone countries.

In fact the underlying situation may be even worse than even these figures indicate as they exclude €123bn of "other exposures", mainly derivatives and government guarantees that could become payable. As we in Ireland know only too well, government guarantees have a nasty habit of coming back to bite the guarantor.

Of these other exposures, €78bn are potentially payable to banks in other eurozone countries.

While the fact that Ireland owes UK banks €113bn with other exposures of €45bn hardly comes as any surprise given the large presence of British banks in the Irish banking market, the extent of our debts to banks from other eurozone countries isn't so widely known. So to whom in the eurozone do we owe all of this money?

Top of the list are German banks, to whom we owe €92bn with a further €38bn of other exposures. Does the fact that Irish banks potentially owe their counterparts up to €146bn explain the German government's implacable opposition to any write-down of the Irish banks' debts? After the British and the Germans, it is the French banks -- with total Irish bank loans of almost €32bn and a further €23bn of other exposures -- who have the biggest exposure to Ireland. Does this provide at least a partial explanation for French president Nicolas Sarkozy's truculence when faced with Irish requests that senior bondholders be forced to accept a haircut?

The Spanish and Italian banks have relatively small exposures to Ireland with direct loans to this country of €9.2bn and €10.6bn respectively as well as other exposures of €3.2bn and €6.4bn.

However, there is one other large European creditor listed in the BIS statistics. This is the unspecified "other euro area". The banks from these countries are directly owed almost €42bn by their Irish counterparts with a further €6.1bn potentially due under the other exposures heading.

Who are these other euro area banks? Up to now the general assumption had been that this heading mainly covered Dutch, Belgian and Luxembourg banks. But given the sudden emergence of Finland as one of the most vehement opponents of cutting Ireland any slack I can't help wondering if one or more of the Finnish banks have large piles of Irish debt sitting on their balance sheets.

What is clear from the BIS figures is that a complete collapse of the Irish banking system would have had very serious consequences not just for British banks but also for banks elsewhere in the eurozone

British Trident submarine is returning to its home port after a mechanical failure led to loss of power while on a training exercise, the Ministry of Defence said today

HMS Vengeance, one of the Royal Navy's four nuclear-powered Vanguard-class submarines which comprise Britain's nuclear "deterrent," is returning on the sea's surface to Faslane naval base, Scotland.

An MoD spokesman said: "Vengeance has suffered a mechanical defect resulting in a reduction in propulsion. She is returning to Faslane under her own power. She is still at sea."

The spokesman was unable to confirm reports that the submarine's propulsion unit had become fouled by sea debris.

The incident happened on Thursday night while the vessel was on a training exercise in the north Atlantic, he said.

The boat carries up to 48 nuclear warheads on up to 16 Trident missiles, which weigh 60 tonnes each and have a range of 4,000 nautical miles.

Spanish Prime Minister Jose Luis Rodriguez Zapatero placed Madrid in the first line of international support for the "historic" transition process in Tunisia

Spanish Prime Minister Jose Luis Rodriguez Zapatero placed Madrid in the first line of international support for the "historic" transition process in Tunisia, offering a 300 million euro ($415.8 million) credit line to aid development in the North African nation.
Zapatero, the first European leader to travel to Tunis since the fall of the regime of Zine el Abidine Ben Ali, met with top officials of the transition government, the opposition and civil society to guarantee them Spain's support.
The most urgent matter for Tunis at this time is to attend to the thousands of international refugees who are crossing the frontier from Libya and Zapatero said that he is ready to mobilize aircraft and ships to transport them to their countries of origin.
At a press conference at the residence of the Spanish ambassador after meeting with Tunisian interim President Fuad Mebaza and Premier Beyi Said Essebsi, Zapatero said that Spain was the first country to send humanitarian aid to Tunis and noted that it has prepared a second airplane, which could be used to transport many of the refugees.
"We want to be there from the first moment and we want to be in the group of countries that supports with the greatest determination what is happening in the Arab world," Zapatero said.
"Each country makes its own history, each people builds its democracy and what is expected from friendly peoples is understanding and help. We're not going to say anything that suggests giving a lecture, but we're going to give all that we are asked for so that the Tunisians feel free," he said.
Along those lines, the Spanish premier pushed for the launching of a Marshall Plan-like initiative for North Africa with public support by European financial entities.
The financing from the European Union would be channeled through the European Investment Bank, which already has a credit facility of more than 12 billion euros for the development of the southern shore of the Mediterranean.
Each country should commit itself and Spain, Zapatero said, will authorize a credit line of 300 million euros over the next three years.
Zapatero said that the success of the Tunisian rebellion is going to spread through the region, including Libya, and he compared this "historic moment" with the fall of the Warsaw Pact regimes in Eastern Europe.
"Spaniards want their government to be supporting the democratic changes in the Arab world from the first, and so therefore I'm here," he said.
When asked about his support for similar processes in Algeria and Morocco, two countries geographically closer to Spain than Tunisia, the premier said that all European partners are prepared to back reforms that defend the citizenry, although they must avoid having their stance interpreted as "a desire to interfere."
As for the future of Tunisia, the Spanish leader urged that the country remain committed to secularism to achieve a lasting and "more authentic" democracy.


Read more: http://latino.foxnews.com/latino/politics/2011/03/02/spain-offers-financial-aid-tunisia/#ixzz1FXMqVcH6

Mark Lilley was found guilty of conspiracy to supply cocaine, heroin, ecstasy, amphetamines and cannabis plus possession of a firearm

 Mark Lilley was found guilty of conspiracy to supply cocaine, heroin, ecstasy, amphetamines and cannabis plus possession of a firearm following a trial at Bolton Crown Court.

But after being controversially allowed bail prior to sentencing, Lilley went on the run and has been at large ever since. The trial judge sentenced him to 23 years’ imprisonment in his absence.

The Serious Organised Crime Agency and Crimestoppers relaunched Operation Captura this week which aims to round up major fugitives from justice thought to be in Spain.

Lilley, whose most recent English address is given as Bank Street in Newton-le-Willows although he was considered a major player in the Wigan drug scene of the late 1990s, is among those most wanted.

Said to be about 35 years old he goes by the nicknames Coney, TJ, Fatboy, Big Vern and Mandy. He is white, about 6ft tall, of large build with brown eyes and has dark receding hair.

Multi-agency campaign Captura identifies individuals on the run in Spain who are wanted by UK law enforcement agencies for serious crimes committed in the UK.

Since the campaign launched in October 2006, there have been 50 appeals; 38 of whom have been arrested. Many are now serving lengthy prison sentences for crimes which range from drug trafficking to sex crimes to murder.

However, Lilley is one of the minority who has managed to evade capture.

Ken Gallagher, Head of European Operations for SOCA, said: “Operation Captura is helping make the ex-pat community in Spain an uncomfortable place for fugitives. Having the public’s attention focussed on these individuals goes a long way to making it harder for them to hide and should act as a warning that Spain is no safe haven for British criminals.”

Anyone with information should ring Crimestoppers on 0800 555 111 

EXPATRIATE from Yorkshire is feared dead after he was caught in one of the biggest avalanches on record in Spain’s Sierra Nevada mountain range.Mountaineer feared dead in avalanche

Mountaineer feared dead in avalancheAN EXPATRIATE from Yorkshire is feared dead after he was caught in one of the biggest avalanches on record in Spain’s Sierra Nevada mountain range.

John Hogbin, 42, originally from York, was with two fellow mountaineers when the avalanche struck at 1.30pm on Sunday to the west of a ski resort above Granada city.

Chances of finding Mr Hogbin alive were “practically nil”, a Guardia Civil source said yesterday before the search was called off for the night. Mr Hogbin was a widower with a young son. The two other men, both 43 and believed to be Spanish, survived.

Foreign lorry drivers face road charges of £9 a day under radical new plans

Foreign lorry drivers face road charges of £9 a day under radical new plans | Mail Online: "Foreign lorry drivers are to be charged up to £9 a day to use our roads under radical plans agreed by ministers.

The move comes as the Government tries to calm public anger over high fuel prices.

Currently foreign drivers – who number one in eight of all those on the roads – have a huge advantage over British drivers as they pay no road tax or other charges."

2,000 people working without a contract last year, and nearly 500 of them were also collecting unemployment pay.

Work inspectors in the province of Málaga found some 2,000 people working without a contract last year, and nearly 500 of them were also collecting unemployment pay.
Shops and the hostelry business were most controlled by the inspectors in the province last year, and their work recovered 12 million € additional income for Social Security.The numbers are four times higher than those seen in 2008 as the number of work inspections is stepped up.

900 foreign criminals were expelled from the country last year

Spanish Ministry of the Interior has announced plans to reduce the number of foreign prisoners being held in Spanish jails. They want to try to get prisoners to serve their time in the jails of their country of origin.In Spain there are 27,091 foreigner prisoners from 110 countries currently, 242% more than in 2000. The numbers include Cataluña where responsibility for prisons has been devolved to the region.A statement from the Ministry for the Interior said that ‘foreigners are not to blame for the overcrowding in Spanish jails’ noting that the number of foreign prisoners only increased by 3% last year, but even so Spain has one of the highest percentages of foreign prisoners in Europe at 35%.The law already allows for a foreign prisoner to apply to be transferred to his or her home country if he or she wishes, and last year 580 made the application of which 249 have been repatriated. However many do not make the application as conditions in Spanish jails are generally good.If the prison sentence is less than six years and the criminal has not legal residence in Spain he can be extradited instead of going to prison, and under that rule more than 900 foreign criminals were expelled from the country last year.

Socialist Mayor of Cártama, José Garrido, has been indicted on charges of perversion of the course of justice.

Socialist Mayor of Cártama, José Garrido, has been indicted on charges of perversion of the course of justice. He is accused by the Prosecutors’ Office of having deliberately let an order expire against a local resident who had built a home on non-buildable land.The case is being investigated by Instruction Court 5 in Málaga and refers to December 2005 when the Town Hall inspectors noted the house being built on rustic land. There was an initial fine and the site was taped up, but the citizen continued to build despite several visits from municipal technicians in January, March, April and May 2006. Work was still continuing in February 2007, and in October 2008 , SEPRONA, the Environmental Division of the Guardia Civil asked the Ayuntamiento for details of the sanction imposed. That sanction expired in December of that year, and now the Mayor faces charges.The Mayor contends that competences in the case are unclear, and said he has done nothing wrong as no irregular licence was issued by the council. He also noted the lack of resources to carry out any demolitions saying that there are more than 2,000 similar cases currently outstanding. The house concerned in the case currently remains standing.

Date for the start of the court cases for the ‘Malaya’ corruption scandal and the ‘Ballena Blanca’ money laundering affair could coincide

Date for the start of the court cases for the ‘Malaya’ corruption scandal and the ‘Ballena Blanca’ money laundering affair could coincide and that it causing differences between the Málaga Provincial Court and the Anti Corruption Prosecutor’s Office. Final start dates for both cases are still to be set, but they could coincide according to the President of the Provincial Court, Francisco Javier Arroyo. That would cause serious problems for the prosecutor, Juan Carlos López Caballero, who has instructed both cases, and the Chief Prosecutor, Antonio Morales, has concluded that ‘in common sense both cases cannot coincide’.Ballena Blanca was set to start at the end of March, while Malaya could start at the end of May, but with the first expected to last six months and the second a year an overlap is likely. Ballena Blanca has to deal with 19 accused and some 80,000 sheets of evidence, while Malaya has 103 accused and the court summary is 90,000 sheets long.
Antonio Morales considers that the Malaya case should wait until after Ballena Blanca has been completed and has told Diario Sur that he does not understand the hurry.To add to the problems there is a third case, ‘Minutas’ which already has a fixed date of April 6 to June 4 where here the prosecutor, Francisco Jiménez Villarejo, also belongs to the same anti-corruption department.

Two Latin American boys aged 14 and 16 have been charged with the murder of the 71 year old British pensioner Peter Cockshutt

Two Latin American boys aged 14 and 16 have been charged with the murder of the 71 year old British pensioner Peter Cockshutt who was found dead in his home in Arona on the Costa del Silencio, on Tenerife, after what is thought to have been a burglary gone wrong. One of the boys was arrested on Tuesday afternoon, the other on
Tuesday night.The British man, who comes from Brandesburton, near Beverley in East Yorkshire was stabbed twice in the chest and once in the leg. His body was found by a friend on Monday.The two boys are also accused or robbery and both will appear before the judge shortly, and are being held in Guardia Civil custody. An autopsy has been carried out on the victim, but the results have not yet been made public.
It’s understood the two boys have confessed to the crime, and reporting restrictions have been introduced in the case.

Torrevieja Brits are the largest group, making up 16 percent of the total number of operations being carried out

Brits are the largest group, making up 16 percent of the total number of operations being carried outForeign patients now make up 42% of the activity in the operating theatres at the District Hospital in Torrevieja. The largest group is the British, who made up 16% of the 22,640 operations carried out in the hospital in 2009. It shows the high numbers of British tourists in the area, and the number who live in the town for at least part of the year, many of them aged over 65. Britons make up 10% of the padron census in the 12 municipalities serviced by the hospital.
Next group, but with no more than 5% of the total, come the Germans, then the Norwegians and Moroccans.The numbers come amid increasing concerns in the Spanish press about the costs of providing care to ‘health tourists’, and claims that Spain is not getting all the costs of such operations reimbursed in full.

price of resale property in Spain increased in January

price of resale property in Spain increased in January for the first time in 24 months, according to the real estate portal fotocasa.es. Prices rose by 0.6% on average, with the regions of Cataluña, and La Rioja seeing the greatest recovery in price at 4.6% and 4.5%. Prices also rose in the regions of Comunidad Valenciana (2,2%), Asturias (2%), Baleares (1,9%), Aragón (1,4%), Galicia (0,9%) and Madrid (0,7%).It takes the average price of per square metre for resale property to 2,366 €.

Baltasar Garzón, is to appeal against the Supreme Court case which accused him of adopting resolutions

Baltasar Garzón, is to appeal against the Supreme Court case which accused him of adopting resolutions which were allegedly a perversion of the course of justice, by starting to investigate the disappearances of people during the Franco years in Spain.Garzón has said that the Supreme Court case is ‘unsustainable and incomprehensible’ and he has accused the Judge Luciano Varela of using ‘depreciatory arguments’ with no legal base. Garzón has called for international experts who have judged similar crimes to be brought in. Garzón says that Varela has ‘a preconceived idea which stops him analysing the facts objectively’.Garzón also faces a second case where he is accused of not declaring additional income obtained allegedly from the Banco Santander when he was on a sabbatical year in New York.
Meanwhile the Prosecutors Office has said it does not support the accusations being made against the judge and they will be sending their considerations to the CGPJ, despite the fact that the General Council for Judicial Power, the body which oversees the judiciary, started the procedures on Tuesday to suspend the judge.
The Attorney General, Cándido Conde-Pumpido, has said that, in principle, he can see no criminal behaviour which will allow the accusations being made against the judge to be justified.The group ‘Judges for Democracy’ has also expressed its ‘deepest concern’ about the decision of Varela to proceed against Garzón who they do not consider at fault.

woman was reported missing last November, and her chopped up body was found on waste land in Campos, Mallorca

Five Ecuadorians have been arrested on Mallorca in connection with the discovery of the body of a 35 year old Bolivian woman.The woman was reported missing last November, and her chopped up body was found on waste land in Campos, Mallorca, the day after the first three people were arrested this week. Paul Gregory R.C., aged 41; Norma del Rocio V.S., aged 39, and Luis Rodrigo Q.Q. who is said to have been the main author of the killing and who is aged 43. Two further arrests were made on Wednesday and further detentions have not been ruled out in the case.

"Auken Report", which recommended EU sanctions against Spain if it did not act on illegal building and urban abuse

Margarite Auken, Danish MEP for the Green party and author of the controversial "Auken Report", which recommended EU sanctions against Spain if it did not act on illegal building and urban abuse, demanded yesterday in open parliamentary session that the EU ask for an official report from Madrid on how it will protected property rights for people who have purchased illegal homes.
The question, directed to the President of the European Parliament Jerzy Buzek, coincided with the appearance in front of the EU Parliament of Spanish President Zapatero, who was in Brussels to explain the six month Spanish programme for the EU. Spain took over the rotating presidency of the EU on the 1st of January 2010.
During her question, Ms Auken referred to the "worrying facts" revealed by her report. The Auken Report was approved by the EU in March 2009. "Spain has permitted a culture of endemic corruption to build up around construction" she said.It revealed to the EU the wide range of issues in Spain that has permitted the construction of hundreds of thousands of homes without any permits whatsoever.President Buzek did not reply immediately to the question, but is expected to give a response in the next few days."Many Spanish citizens feel that they must quietly accept fraud and corruption from building companies who can expel them from their homes without any compensation" said Ms Auken.Ms Auken pointed out that the Spanish government has so far refused to give an official reply to the Auken report and so she believes the time has come for the EU to officially demand a reply to the report.The report recommends EU sanctions against Spain if it does not act to tackle urban abuse and property instability in the region.

Willie Meyers, the Izquierda Unida MEP for Andalucia, also used the opportunity to attack the Spanish government for urban abuse.

The Reader recently had an exclusive interview with Mr Meyers when he visited Almeria during a fact finding mission on urban abuse in the province (An interview with MEP Willie Meyers ) where he explained his horror at what he had discovered.Mr Meyers's office has sent an official request to a number of Spanish departments within the Junta de Andalucia and the Spanish government to ask what, if any, notice they have taken of the Auken report.Mr Meyers has also bought the specific example of the Almanzora Valley to the attention of interested parliamentary groups within the EU.Meyer's office released a statement saying "he condemned the many examples of urban abuse produced by rampant and uncontrolled development over the last few years" and saying that innocent home owners must be protected at all costs.Meanwhile, Michael Cashman MEP, has written an open letter to Prime Minister Zapatero. Mr Cashman was one of the MEPs who asked for a European Parliamentary resolution to get Spain to put its house in order given the enormous number of petitions and complaints about building, environmental and urban abuses it had received. According to Mr Cashman there have been over 15,000 petitions as well as a daily flood of letters on this matter.

Councils on the Costa del Sol are urging foreign residents to register on the municipal electoral roll.

Many councils in Malaga fear tens of thousands of unregistered residents live in certain municipalities: in the case of Marbella, with an electoral roll of 140,000 people from 137 different nationalities, it is thought a further 100,000 people live without registering.
The failure to register means councils are losing money, as the Spanish state gives subsidies to each municipality based on the size of its electoral roll.
Marbella tourism councillor, José Luis Hernández, said: “The fact both Spanish and foreign residents fail to register on the electoral roll here helps to collapse our public services. It is because of this that we have half the police, hospitals, courts, schools and taxis that we really need for a town of this size.”

snowy peaks of the Sierra Nevada 3 metres of snow cover over the ski terrain

2 hours from Spain’s Costa del Sol are the snowy peaks of the Sierra Nevada , Europe’s Southern-most ski resort.December saw the heaviest rain for 50 years fall on the Costa del Sol, officially ending five years of drought in the region and filling the reservoirs to capacity. Although it meant a wet Christmas for Costa del Sol residents, it has led to wonderful conditions in the nearby mountains with the resort management, Cetursa SA, announcing an impressive 3 metres of snow cover over the ski terrain. They are working hard to piste the new snow and hope to have all the runs open soon. To find out the latest information on the state of the pistes visit the British Ski Centre website.If you want to enjoy both the skiing and the warmth of the seaside, you should consider basing yourself on the Costa del Sol and taking a day trip up to the mountains. Alternatively, you could do a two centre holiday and stay in the mountains for one night (be warned the accommodation is expensive) and then move down to the Costa del Sol to relax before heading home.

Treasure of incalculable value has lain just off La Manga.

Buried beneath shells, rocks and sand, for 2,600 years, while the construction boom has been completely changing the surrounding landscape, a treasure of incalculable value has lain just off La Manga. 26 centuries later, archaeologists from eleven countries are bringing these antique objects to the light of day once again. The find appears to be the cargo of a commercial ship carrying ivory from African elephants, amber and lots of ceramic objects. The find has been kept secret for the past three years by the team of divers led by the Spaniard Juan Pinedo Reyes and the American Mark Edward Polzer. The recovery project is being financed by National Geographic, who have reached an agreement with the Spanish Minister of Culture, the Institute of Nautical Archaeology and the University A&M of Texas. The recovery is taking place around Grosa Island and El Farallon Island, just off La Manga. Over the last three years 1,400 objects have been collected. Even some of the wood from the bottom of the ship has survived since the 7th Century before Christ (620 BC), and has been recovered. It is believed the vessel measured approximately 15 metres long.

The find has been described as one of the most important of all archaeological discoveries. The Ivory tusks measure between 70 and 150 centimetres, with Phoenician writing inscribed. They have come from a race of elephants which are now believed to be extinct. There are also copper ingots and stones containing silver and lead. Ceramic pots which were used for transporting fish and oil have been found too, as well as plates, bowls, combs, ivory knife handles, bronze needles and chandeliers.

It is believed the ship crashed into rocks off the island, which are just a metre and a half below the surface. The ship would have set sail from Cadiz, and was probably heading towards Guardamar to a factory there, or to deliver items to a prince living in the area.

Spain is complaining" about the rule, "as more and more northern Europeans choose to retire along its Mediterranean coast."

"Most countries in the European Union offer universal health coverage for their citizens. And when a citizen from one EU country travels to, or lives in another one, they also are covered. But now Spain is complaining" about the rule, "as more and more northern Europeans choose to retire along its Mediterranean coast." NPR likens the situation along Spain's Costa del Sol to that of Florida, where many U.S. seniors with costly health problems retire (Socolovsky, 1/19). SiMAP union, representing public health doctors in Spain, said non-Spanish EU nationals in Alicante, which has a large British expat community, account for 15-20 per cent of hospital admissions. Criticism is not directed at those who register their residency status and pay taxes, but at expats in the black economy who expect to get treatment by producing a European Health Insurance Card (Ehic), which is designed for the emergency care of holidaymakers. many thousands of Britons who regularly flip between homes in Britain and Iberia are also thought to arrange trips according to where they may get the best treatment, or jump waiting lists. Politicians have been concerned about healthcare "freeloaders" for several years, but Spanish doctors have been more muted. They have to decide what is "emergency" treatment and what isn't and, according to anecdotal reports, have tended to take the patient's word.
But Spain's health budget is as much under pressure as the NHS and the SiMAP move reflects fears among Spanish doctors of further belt-tightening. Cutbacks are bound to raise questions about the availability of resources for patients. The Spanish regions – which are autonomous in matters of health provision – have moved to prevent foreign nationals exploiting "free" healthcare. The last to take this step was Valencia. Two months ago, it introduced measures by which expatriates below retirement age and not registered as employed would no longer get free access.
They are now paying a €90 (£80) monthly tax, which will cease once they reach retirement age. The move brings Valencia into line with the rest of Spain – and France, where President Sarkozy took similar steps in 2007. But thousands of British men under 65 and women under 60 are still thought to be working unregistered in Valencia, the Costa del Sol and other expat