French PM downplays rating decision
French PM Francois Fillon has defended his government's economic policies following the decision by ratings agency Standard and Poor's to downgrade the credit rating of France.
He said the government would push ahead with reforms and debt reduction.
Standard and Poor's said Europe's austerity and budget discipline alone were not sufficient to fight the debt crisis and may become self-defeating.
The downgrade stripping France of its top AAA rating was announced on Friday.
The government is on a communications campaign to tell the French there is no need to panic and that the policies of reform and debt reduction will continue as planned, says the BBC's Hugh Schofield in Paris.
Mr Fillon told a news conference that if France was in the firing line, it was primarily because of its exposure to the crisis in the eurozone.
"This decision constitutes an alert which should not be dramatised any more than it should be underestimated," he said.
"This decision was expected, even if one could find it came at the wrong time, given the efforts made by the eurozone, which investors are starting to see."
It was not government policies that were under attack from the ratings agency, he said, and so those economic policies would be maintained, with the goal of cutting spending and bringing the annual budget back into surplus by 2016.
'Long road'
German Chancellor Angela Merkel also spoke on Saturday, saying Europe still had a "long road" ahead to restore investor confidence, after the multiple credit rating downgrades of nine eurozone countries in total.
On Friday, S&P's said France was being downgraded one notch, to AA+. The country still has a top AAA rating from the other two main ratings agencies, Moody's and Fitch.
S&P's also said Italy, Spain, Cyprus and Portugal were cut two notches, with the latter two given "junk" ratings. Germany kept its AAA rating.
Austria, Slovakia, Slovenia and Malta were the other countries downgraded.
Credit ratings are used by banks and investors to decide how much money to lend to particular borrowers.
The cut in the so-called sovereign ratings of governments is likely to lead to most other borrowers domiciled in the same countries - including banks and companies - being downgraded.
Although the move has been widely expected, it is still likely to make it somewhat more difficult and expensive for borrowers from those countries to raise money, including for the governments themselves.
| Country | Old Rating | New Rating | Cut |
|---|---|---|---|
|
Austria |
AAA |
AA+ |
One notch, loses top rating |
|
Belgium |
AA |
AA |
None |
|
Cyprus |
BBB |
BB+ |
Two notches to junk |
|
Estonia |
AA- |
AA- |
None |
|
Finland |
AAA |
AAA |
None |
|
France |
AAA |
AA+ |
One notch, loses top rating |
|
Germany |
AAA |
AAA |
None |
|
Ireland |
BBB+ |
BBB+ |
None |
|
Italy |
A |
BBB+ |
Two notches |
|
Luxembourg |
AAA |
AAA |
None |
|
Malta |
A |
A- |
One notch |
|
Netherlands |
AAA |
AAA |
None |
|
Portugal |
BBB- |
BB |
Two notches to junk |
|
Slovakia |
A+ |
A |
One notch |
|
Slovenia |
AA- |
A+ |
One notch |
|
Spain |
AA- |
A |
Two notches |
China angry at US sanctions on oil firm Zhuhai Zhenrong
China has criticised sanctions imposed by the US on a Chinese firm for selling refined petroleum products to Iran.
China's foreign ministry said imposing unilateral sanctions on Zhuhai Zhenrong based on US law was "unreasonable".
The US said on Thursday Zhuhai Zhenrong was one of three international firms to be punished for dealing with Iran.
It comes as Chinese Premier Wen Jiabao visits Arab oil-producing nations amid fears of major sanctions-related disruption to Iranian oil exports.
Mr Wen visited Saudi Arabia - China's biggest source of imported oil - on Saturday.
He told Saudi Prince Nayef both countries are "in important stages of development and there are broad prospects for enhancing cooperation," China's state-run news agency Xinhua reports.
"Both sides must strive together to expand trade and co-operation, upstream and downstream, in crude oil and natural gas," Mr Wen added.
During his visit, state-run Saudi oil giant Aramco and China's Sinopec finalised an initial agreement to build an oil refinery in the Red Sea city of Yanbu to deal with 400,000 barrels per day.
Sanctions biting
Later on Saturday, Beijing denounced Washington's decision to punish Zhuhai Zhenrong.
"Imposing sanctions on a Chinese company based on a domestic (US) law is totally unreasonable and does not conform to the spirit or content of the UN Security Council resolutions about the Iran nuclear issue," Foreign Ministry spokesman Liu Weimin said.
"China expressed its strong dissatisfaction and adamant opposition," he added.
Washington has accused Zhuhai Zhenrong of being the largest supplier of refined petroleum products to Iran.
The US state department said the sanctions - preventing the firms from receiving US export licences, US Export Import Bank financing or any loans over $10m from US financial institutions - were part of efforts to persuade Iran to rein in its nuclear ambitions.
The European Union has also agreed to follow the US by freezing Iranian central bank assets and impose an embargo on oil imports.
The sanctions on Iranian oil exports are of particular concern to China, which is under pressure to secure enough energy supplies to keep its economy going.
Iran is currently China's third largest supplier of oil, followed by Angola and Saudi Arabia.
Tehran has warned its Gulf neighbours against making up the shortfall in oil exports as the US and EU sanctions start to bite.
"We would not consider these actions to be friendly," Tehran's Opec representative, Mohammad Ali Khatibi, was quoted as saying on Sunday.
"If the oil producing nations on the Persian Gulf decide to substitute Iran's oil, then they will be held responsible for what happens," he added, in the Sharq newspaper's report.
Record imports widen US trade deficit
The US trade deficit widened in November for the first time in five months.
Official figures from the Commerce Department showed that the overall deficit grew 10.4% to $47.8bn.
Imports rose 1.3% to a record $225.6bn (£147.3bn), boosted by demand for oil and foreign cars.
Exports fell for the second month in a row, dropping 0.9% to $177.8bn, after lower sales of cars and capital goods such as aircraft and machinery.
The widening of the trade gap was bigger than had been expected.
The average price of imported oil rose 3.7% from October to $102.50 a barrel.
There was some better news for the US economy, with the trade deficit with China narrowing to $26.9bn, due to exports to China being their highest since December 2010.
Fight for Claro customers
Telecommunication firms Digicel and LIME both moved on Friday to lure Claro customers in limbo as word spread about Digicel's plan to shut down the Claro network which it acquired last year.
Digicel stated in a press release that it had advised the The Office of Utilities Regulation (OUR) that, from early this week, Claro customers will be able to transfer their current Claro numbers to the Digicel network.
"Digicel will be providing replacement SIM cards to all active Claro customers at its extensive network of Digicel stores," announced the company.
But, in an unsurprising move, LIME went on the offensive in an attempt to upstage its bitter rival with what it called a "rescue option" for Claro customers "left hanging" by the acquisition.
"It is clear that Claro customers are feeling disenfranchised as they have been tossed over to the country's most expensive mobile network without any say in the matter and LIME wants them to know they have an alternative," said Stephen Price, LIME Jamaica's head of marketing in a press release.
"Claro customers who come over to LIME can enjoy better value for money with our 'Free Nights' promotion and unlimited calling to five friends with 'Faves', which is similar to Claro's current 'Call 2 Text 1' offer. Plus they will also enjoy mobile data plans for as little as $100 per day," Price added.
The trade in offer, which is already available at all LIME Retail Stores and dealer locations, will run until January 31, 2012.
"LIME is inviting all Claro customers to come over to our network and enjoy better value, better prices and better technology. The last time we checked Jamaica was still a democracy so everyone should have a choice," Price said.
America Móvil (AMX) in March last year announced it would sell its local Claro operations to rival Digicel and, in return, acquire 100 per cent of Digicel's operations in Honduras and El Salvador. The deal -- which was approved in August -- allowed Digicel to further solidify its place atop the local mobile telecommunications sector where it already claims in excess of two million subscribers among the Jamaican population of 2.8 million.
The move means that LIME -- the sole provider of mobile phone services in Jamaica before liberalisation -- is once again Digicel's only competitor in the mobile phones market.
News broke last week that Digicel was granted permission to shut down the Claro network less than four months after agreeing to keep it going under the terms of their merger.
Permission for the network to be switched off was granted by the outgoing Jamaica Labour Party Government before December 8, as the general election campaign was kicking off.
With Claro now due to cease operation by March 1, the OUR and Digicel met on Friday about the market leader's plans for the shutdown of the Claro network and the Claro customer migration.
"Likewise, Digicel updated the OUR on its plans to shut down the Claro network thus achieving efficiencies and economies of scale which will see it in turn investing US$30 million in the rollout of island-wide 4G Mobile. This is on top of an existing investment of over US$1 billion in Jamaica to date," stated Digicel.
It is unclear how many mobile users are on the Claro network. Claro claimed in 2009 that they had overtaken LIME in mobile subscribers, but this was disputed by LIME.
JA.OBSERVER
Man Utd sponsor Aon moves headquarters to London
US insurance broker Aon has said it plans to move its corporate headquarters from Chicago to London.
"The move provides greater access to emerging markets and takes better advantage of the strategic proximity to Lloyd's," the firm said.
The move, subject to shareholder approval, is expected to happen in the second quarter. Chicago will remain the main office for the Americas.
Aon is the main shirt sponsor for Manchester United football club.
At the same time, Aon will change its legal jurisdiction of incorporation from Delaware - a state in the US where many companies are based for disclosure purposes - to England.
The UK government reacted positively to the news.
"Aon's decision is a strong endorsement of London and the UK," said Mark Hoban, the financial secretary to the Treasury.
"The UK continues to be one of the leading global centres for insurance."
The move will not cause job losses in either Chicago or the US, the broker said.
Aon plans to add more than 1,000 positions across its US operations in 2012, based on continued growth and investment opportunities.
"The decisions we make today will help drive our global strategy and strengthen our growth opportunities in the years to come," said Aon chief executive Greg Case.
Greece debt write-off talks with banks stall
Talks between Greece and its private sector lenders over a possible 50% write-off of its debts have stalled.
Reaching a deal is a pre-condition for Athens receiving the next chunk of bailout cash from the International Monetary Fund and European Union.
Without that money, the Greek government could run out of cash and be forced to leave the euro.
Meanwhile, markets fell on rumours that France and other governments were about to have their credit ratings cut.
European stock markets dropped by 1%-2% as the news spread in mid-afternoon trading, while the euro hit a 16-month low against the dollar of $1.263.
'Paused for reflection'
The committee representing Greece's lenders said that some parties had not responded constructively to the proposed 50% debt write-off.
It said discussions were "paused for reflection on the benefits of a voluntary approach" without stating when they would resume.
The alternative to a voluntary debt write-off is likely to be an outright default by Greece - a failure to continue repaying its debts, perhaps as soon as March, when the country faces a 14.4bn euro ($18.2bn, £11.9bn) debt repayment.
Another alternative may be for the Greek government to pass a law unilaterally changing the terms of its debt repayments, as nearly all of its debts are governed by Greek law.
In its statement, the steering committee of the Institute of International Finance (IIF) - an industry body for global banks - praised the Greek government's leadership.
Some of Greece's debts are reported to have been bought up on the cheap by so-called vulture funds - speculators who specialise in pursuing troubled borrowers for payment in full.
A common tactic of vulture funds is to veto agreements between distressed borrowers and their main lenders, in the hope of winning special treatment for their own loans.
IMF role
However, a Greek government source quoted by news agency Reuters put the blame on the International Monetary Fund.
It was accused of insisting that Greece pay just 4% interest on its debts as part of the deal - considered far too low by many lenders.
The IMF and European Union have insisted that private sector lenders take losses as a precondition to them providing any further rescue loans to Greece.
The IMF played down the significance of the pause in talks.
"We look forward to the resumption of talks between Greece and its creditors," the Fund said.
"It is important that this lead to a [private sector involvement] agreement that, together with the efforts of the official sector, ensures debt sustainability."
The European Central Bank - which has bought up a significant share of Greece's debts as part of efforts to rescue the country - is not participating in the talks and will not accept any write-off of the debts it holds.
Euro exit
If agreed, the debt restructuring is expected to give Greece longer to repay its debts, as well as cutting the amount due.
It will also contain a clause that prevents minority lenders, such as vulture funds, from vetoing future restructuring agreements.
Last week, a Greek government spokesman said that if Athens failed to secure its latest bailout money from the EU and IMF - for which the deal with private sector lenders is a condition - it would be forced to exit the euro.
The Greek government is struggling with public opposition to new austerity measures, demanded by official lenders, including the IMF.
The prime minister warned last week that Greece may run out of cash to meet its debt payments as soon as March if unions do not agree to further spending cuts.
EU, International Monetary Fund and European Central Bank inspectors are due in Athens later in January to review progress.
Greek debts are currently valued at only 20% of face value by bond markets - implying that markets expect total losses ultimately to be 80% of the amount lent, and not the 50% currently under discussion.
Third Survivor Rescued on Overturned Italian Ship
Rescue workers on the stricken Italian cruise ship Costa Concordia have rescued a third survivor. The workers found the survivor Sunday as they searched through the ship.
Late Saturday, a South Korean couple on their honeymoon were rescued from their cabin.
At least three people were killed when the ship ran aground Friday evening in the Tiranian Sea off the northern Italian coast and flipped on its side with a breach in its hull.
News reports say two Frenchmen died in the incident, as well as one Peruvian crew member. More than 30 other people were injured. Officials say at least 40 people are missing, and that some crew members may still be trapped inside the ship.
Italian Captain Francesco Schettino was taken into custody Saturday after several hours of questioning. Italian news agency ANSA says he could be facing several charges, including homicide and abandonment of the ship.
Rescuers using lifeboats and helicopters evacuated most of the more than 4,000 passengers and crew members to the island of Giglio and to Porto Santo Stefano on the mainland early Saturday.
Passengers who made it safely to land recounted the chaotic and terrifying evacuation. One of them was an American tourist who said some people had to swim to the shore.
“We were all standing there, and as the boat started going a little quicker, turning, I saw one of the cranes… It popped the life raft, and it exploded and it went boom! And it just crashed. There were two people on it, they got off I think.. we saw like five people jump in the water and start swimming, and I looked and the other crane next to me, which was three feet above water, one meter above water, was like two meters below water.”
Passengers were sitting down to dinner at the time of the incident and were told the ship was having electrical problems.
An investigation is under way to determine why the ship ran aground. When it hit the rocks, officials say, passengers were instructed to put on life jackets and to take to life rafts. However, those on board said the hull tilted so sharply and quickly that many lifeboats could not be lowered into the water.
The Costa Concordia is 290 meters long, with 13 decks. It had 13 bars, five restaurants, four swimming pools and 500 balconied staterooms.
Syria crisis: Assad 'gives amnesty for uprising crimes'
Syria's President Bashar al-Assad has granted a general amnesty for all crimes committed during the 10-month uprising, state-run media report.
It would apply to army deserters who turned themselves in before the end of January, peaceful protesters and those who handed in unlicensed weapons, Sana state news agency is quoted as saying.
The UN says more than 14,000 people are in detention.
UN Secretary-General Ban Ki-moon has urged Mr Assad to end the violence.
"Stop the violence. Stop killing your people. The path of repression is a dead end," Mr Ban said in a speech at a conference on Arab world democracy in Beirut.
President Assad has issued several prisoner amnesties since the start of the uprising in March, but thousands of people are believed to remain in prison.
The BBC's Jonathan Head in neighbouring Turkey says the latest amnesty offer still does not address the issue of how the conflict may be brought to an end.
Tens of thousands of people across Syria continue to take to the streets calling for an end to the Assad regime - defying a crackdown that, the UN says, has killed 5,000 people.
In a rare public address last week, President Assad again accused international powers of trying to destabilise Syria, and vowed to crush "terrorists" with an "iron fist".
On Saturday, the ruler of Qatar, Sheikh Hamad bin Khalifa Al Thani, said Arab countries should send troops into Syria to end the bloodshed.
"For such a situation to stop the killing... some troops should go to stop the killing," he told US television channel CBS for a programme to be aired on Sunday.
It is the first time an Arab leader has publicly called for military intervention in Syria.
BBC
Gunmen Storm Police Building in Western Iraq
Iraqi officials say gunmen stormed a police building in the western city of Ramadi Sunday, as at least one suicide bomber detonated explosives outside the facility.
Police say clashes are ongoing inside the building. It is not clear if there are any casualties.
A day earlier, a suicide bomber handing out food and pastries blew himself up outside the mainly Shi'ite port city of Basra, killing at least 53 people and wounding 137 others. Local authorities said the blast targeted Shi'ite worshippers taking part in a major religious commemoration.
Deputy Health Minister Jabbar al-Saedi said Sunday that medical services are still available around the clock to deal with the wounded.
“Our hospitals have carried out needed operations for the wounded. A number of the wounded has already been discharged from hospitals and there are now between 60 to 70 wounded who are still in the hospital receiving medical care. Some of the wounded will be discharged today, while others will be discharged in the coming days, God willing. Medical services are available around the clock and all our medical institutions are on full alert and ready to handle similar situation'.”
There has been no claim of responsibility for Saturday's blast. It is the latest in a series of attacks during Shi'ite religious commemorations, threatening to further increase sectarian tensions in the country, just weeks after the U.S. withdrawal.
The United Nations' top envoy in Iraq, Martin Kobler, condemned the attack. He urged all Iraqis to maintain their shared values and break what he called the “vicious” cycle of violence in the country.
Iraq's government, headed by Shi'ite Prime Minister Nouri al-Maliki, is dominated by Shi'ites, but it includes Sunnis and Kurds in a fragile power-sharing system that is rife with sectarian tensions.
More than 100 people have been killed in a spate of attacks on Shi'ites since the government issued an arrest warrant for Sunni Vice President Tariq al-Hashemi last month. He is charged with operating a death squad. Hashemi, who fled to Iraq's autonomous Kurdish region to avoid detention, has denied the charges.
Iran Warns Arab Nations Against Increasing Crude Production
Iran's representative to the Organization of Petroleum Exporting Countries is warning his country's Arab neighbors against raising their crude output to replace Iranian oil in the event of Western sanctions.
A Sunday report by the Sharq newspaper quotes Mohammad Ali Khatibi as saying Tehran would view any increase of crude production as an “unfriendly act.” He also said that if the other OPEC nations did so, the consequences would be “unpredictable.”
Last week, Western diplomats expressed concern over Iran's move to enrich uranium to a higher level, saying it violates United Nations sanctions resolutions concerning Tehran's controversial nuclear program.
The Security Council has imposed four sets of sanctions on Iran for refusing to stop enrichment work, which has civilian and military uses. Later this month, the European Union will discuss a possible embargo on oil imports from Iran to further increase the pressure.
So far, Iran has threatened in response to close the Strait of Hormuz, a vital waterway for the global oil trade. U.S. Secretary of State Hillary Clinton said that Iran's threat is “provocative and dangerous.” She urged Iran to end its “provocative behavior” and its search for nuclear weapons.
Western powers accuse Iran of trying to develop a nuclear weapon. Tehran says its nuclear ambitions are peaceful.