Barack Obama defends US surveillance tactics
President Barack Obama has defended newly revealed US government phone and internet surveillance programmes, saying they are closely overseen by Congress and the courts.
Mr Obama said his administration had struck "the right balance" between security and privacy.
He also stressed US internet communications of US citizens and residents were not targeted.
And he tried to reassure the US "nobody is listening to your phone calls".
Mr Obama was commenting on revelations this week in the Guardian and Washington Post newspapers that the US National Security Agency (NSA) was collecting or tapping into vast amounts of telephone and internet communications data.
Facebook denial
The news accounts - subsequently confirmed by officials - roiled Washington DC, with privacy advocates criticising the surveillance as an unlawful intrusion and many in Congress defending the programmes as appropriate counter-terrorism tools.
On Wednesday night, the UK's Guardian newspaper reported a secret court had ordered phone company Verizon to hand over to the NSA millions of records on telephone call "metadata".
That report was followed by revelations in both the Washington Post and Guardian that the NSA tapped directly into the servers of nine internet firms including Facebook, Google, Microsoft and Yahoo to track online communication in a programme known as Prism.
Mark Zuckerberg, founder of Facebook, said the press reports were "outrageous" and denied Facebook's participation in the programme.
His statement echoed those of other internet companies, who said they had not given the government direct access to their servers.
Mr Zuckerberg said: "We have never received a blanket request or court order from any government agency asking for information or metadata in bulk, like the one Verizon reportedly received.
"And if we did, we would fight it aggressively. We hadn't even heard of Prism before yesterday."
And on Friday, the Guardian reported that the UK's electronic surveillance agency, GCHQ, had been able to see user communications data from the American internet companies, because it had access to Prism.
The Guardian reported that GCHQ had access to the system since June 2010 and information from Prism had contributed to 197 British intelligence reports last year.
In California on Friday, Mr Obama noted both NSA programmes had been authorised repeatedly by Congress and were subject to continual oversight by congressional intelligence committees and by secret intelligence courts.
The president said he had come into office with a "healthy scepticism" of both programmes, but after evaluating them and establishing further safeguards, he decided "it was worth it".
"You can't have 100% security, and also then have 100% privacy and zero inconvenience," Mr Obama said.
Acknowledging "some trade-offs involved", he said, "We're going to have to make some choices."
Senior US Senator Dianne Feinstein confirmed on Thursday that the Verizon phone records order published by the Guardian was a three-month extension of an ongoing request to Verizon. Intelligence analysts say there are likely similar orders for other major communications firms.
The data requested includes telephone numbers, calling card numbers, the serial numbers of phones used and the time and duration of calls. It does not include the content of a call or the callers' addresses or financial information.
Prism was reportedly developed in 2007 out of a programme of domestic surveillance without warrants that was set up by President George W Bush after the 9/11 attacks.
Prism reportedly does not collect user data, but is able to pull out material that matches a set of search terms.
James Clapper, director of US national intelligence, said in a statement on Thursday the internet communications surveillance programme was "designed to facilitate the acquisition of foreign intelligence information concerning non-US persons located outside the United States".
"It cannot be used to intentionally target any US citizen, any other US person, or anyone located within the United States," he added.
But while US citizens were not intended to be the targets of surveillance, the Washington Post says large quantities of content from Americans are nevertheless screened in order to track or learn more about the target.
The Prism programme has become a major contributor to the president's daily intelligence briefing and accounts for almost one in seven intelligence reports, it adds.
Mr Clapper said the programme, under Section 702 of the Foreign Intelligence Surveillance Act, was recently reauthorised by Congress after hearings and debate.
Google says the government has 'no access' to servers
Google has issued a strong denial that it allows the US government to access its servers.
The internet giant said the government has no access, "not directly, or via a back door, or a so-called drop box".
The Guardian claims the UK's eavesdropping centre GCHQ has secretly gathered intelligence on Britons from the world's largest internet companies.
GCHQ is to report to MPs within days over claims it accessed data through a US spy programme called Prism.
Parliament's Intelligence and Security Committee (ISC) expects the report by Monday.
GCHQ said in a statement it operated to "a strict legal and policy framework".
US spies have been accused of tapping into servers of nine US internet giants including Apple, Facebook, Microsoft and Google in a giant anti-terror sweep. All deny giving government agents access to servers.
Google's Chief Legal Officer David Drummond said: "We cannot say this more clearly - the government does not have access to Google servers...It is quite wrong to insinuate otherwise.
"We provide user data to governments only in accordance with the law. Our legal team reviews each and every request, and frequently pushes back when requests are overly broad or don't follow the correct process."
The Guardian said it has obtained documents showing that Britain's secret listening post had access to the Prism system, set up by America's National Security Agency (NSA), since at least June 2010.
The newspaper said the Prism programme appeared to allow the Government Communications Headquarters (GCHQ) to circumvent the formal legal process required to obtain personal material, such as emails, photographs and videos, from internet companies based outside the UK.
Microsoft founder Bill Gates, in London for a Hyde Park rally calling for action to end hunger, said he knew nothing about Prism, adding: "I don't know any specifics but if there's a court order for companies to do things it's typical that they're obeyed."
ISC chairman Sir Malcolm Rifkind said the parliamentary committee would be "receiving a full report from GCHQ very shortly and will decide what further action needs to be taken as soon as it receives that information".
Committee members will discuss the claims with US security officials during a planned visit to Washington next week.
Shadow foreign secretary Douglas Alexander has urged the foreign secretary - the minister with responsibility for GCHQ - to make a statement to Parliament on the reports.
He told the BBC: "I am calling on William Hague, as the foreign secretary, to come to the dispatch box of the House of Commons on Monday to set out the government's position and explain how the government will work with the ISC to address the very real public concerns that have emerged."
Labour's Keith Vaz, chairman of the Home Affairs Select Committee, said that while the security services need to share information with the UK's closest ally, the US, certain questions need to be answered.
He told the BBC: "I think what we'd like to know is, has this actually had the authority of ministers and how long has it been going on for?
"This is not the traditional route of spookology because normally you would go and get an order and that order would be subject to proper accountability and judicial process. This is something that is, in a sense, possibly through the back door."
BBC security correspondent Gordon Corera said intelligence and law enforcement agencies in the UK already had the ability to request information from internet and other companies through court orders and warrants.
"The question about Prism is whether it is simply an interface with the companies to then get hold of that information, or a kind of dragnet to gather vast amounts of information about everyone to sift through," our correspondent said.
He added: "Even more worryingly, was it a means of evading the legal oversight and legal restriction on how they operated?"
Shami Chakrabarti, director of human rights group Liberty, said ministers were "going to have to say whether they knew about this and what they have and haven't authorised".
She told the BBC Radio 4's Today programme the big question was "have our agencies been circumventing the law by this nice little international exchange"?
She added: "The danger with this and other security policies is that governments say, 'well we'll obey our own laws that protect our citizens but we will then play fast and loose with the freedoms of others on the other side of the Atlantic or wherever'."
Former Labour MP Kim Howells, who chaired the ISC from 2008-2010, told Today he did not believe "for one minute" that intelligence service chiefs would be prepared to "venture into areas that are clearly illegal without, if you like, the permission of the government".
Conservative MP David Davis said the claims indicated the intelligence services had "much more information than they used to have… namely our most intimate traffic".
That could include "a love email sent to your wife or mistress or girlfriend", he added.
"That sort of thing's now available through a mechanism which doesn't go through the British courts and that's pretty serious."
US President Barack Obama, meanwhile, has defended the Prism monitoring programme, saying it was closely overseen by Congress and the courts and that his administration had struck "the right balance" between security and privacy.
Richard Aldrich, a professor of international security at the University of Warwick, said he expected Mr Cameron to say "rather as President Obama has said, that you can't have your cake and eat it - you can't have 100% privacy and 100% security".
"What they're not going to say is, actually, we're very rapidly accelerating to a point where we're going to be in a transparent society," he told Today.
"Privacy is effectively a 20th century concept like the steam engine."
A spokesman for the agency, based in Cheltenham, said: "Our work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the secretary of state, the Interception and Intelligence Services Commissioners and the Intelligence and Security Committee."
Source-BBC
US economy adds 175,000 jobs in May
US employment rose by slightly more than economists had predicted during May.
The latest US non-farm payrolls show that 175,000 jobs were created last month. But the unemployment rate increased slightly to 7.6%.
Shares had mostly fallen in the run up to the figures, as investors worried that a strong report could lead the Fed to slow its bond-buying programme.
That programme has fired up a rally in the US equities market this year.
At close on Wall Street on Friday, the Dow Jones had climbed 207.50 points, or 1.38%, to 15248.12. The broader S&P 500 rose 20.82 points to 1643.38, while the Nasdaq added 45.17 points to 3469.22.
Austerity programme
"Both the number of unemployed persons, at 11.8 million, and the unemployment rate, at 7.6%, were essentially unchanged in May," said the Labor Department in a statement.
May was the third month in a row that non-farm payrolls increased by less than 200,000, stoking fears that the US government's austerity might be harming the economy.
The spending cuts were highlighted in the latest jobs report as the federal government cut 14,000 jobs. There were also job cuts in manufacturing.
However, there were job gains in professional and business services, leisure and hospitality and retail.
The latest figures mean that it appears unlikely that the Fed is about to rein in the bond-buying programme, which is aimed at lowering interest rates and boosting employment.
"What's made a good number is the fact that it's not extreme on either side, and gives the prospect that investors are looking for, which is a continued slow recovery without any likelihood of any rapid rate rise by the federal government," said Rick Meckler, president of LibertyView Capital Management in New Jersey.
And Chris Williamson, chief economist at Markit, said the Fed would "watch the incoming data flow on business activity and demand closely over the coming months before making clear signals on policy changes".
In May, the number of long-term unemployed - those jobless for 27 weeks or more - was unchanged at 4.4 million. These individuals accounted for 37.3% of the unemployed.
Meanwhile, March's job creation figure was revised to 142,000 from 138,000, and April's to 149,000 from 165,000.
Separate data on Friday from the Federal Reserve showed that US consumer borrowing rose in April for the twentieth month in a row.
Borrowing rose $11.1bn (£7.1bn) in April from March to a seasonally adjusted $2.82 trillion. Most of that gain came from a category that includes car loans and student loans, while credit card use also saw a modest rise.
More borrowing could help boost consumer spending, which makes up 70% of economic activity in the US
UBS under formal investigation in France over tax evasion
French authorities are formally investigating UBS for allegedly helping wealthy clients open undeclared bank accounts in Switzerland.
The Swiss bank is suspected of "complicity in illegal sales practices", an official at the Paris prosecutor's office told the BBC.
It also allegedly set up a shadow accounting system that masked transfers between French and Swiss bank accounts.
UBS said it was cooperating with authorities.
Under French law, being placed under official investigation means there is "serious or consistent" evidence to implicate a suspect in a crime. But it does not necessarily lead to a trial, the official said.
The latest move follows action taken against the bank's French unit last week which was also formally placed under scrutiny on similar suspicions.
Investigators are examining whether UBS staff broke a French law against "illicit solicitation" by actively approaching potential clients in France.
The allegations originally came to light after former staff blew the whistle on the practices that involved hundreds of retail and corporate clients.
An anonymous letter was reportedly sent to the regulatory arm of the French central bank suggesting that parallel accounts were opened in Switzerland but undeclared in France, which is illegal under French law.
The letter said a special record was kept between 2002-2007 listing undeclared bank accounts that had been opened by corporate clients.
According to French daily Le Monde citing former employees, UBS bankers regularly mingled with affluent people at sporting events and musical concerts - including some sponsored by UBS - in order to seek out possible clients for tax evasion.
In one example, a former marketing official at the French branch of UBS said Swiss bankers "made trips [to France] to meet 'prospects'" at events, including the tennis tournament Roland Garros.
Stephanie Gibaud said she was asked to "destroy a series of sensitive documents containing the names of current or potential clients who had participated in events organised on French territory."
Nicolas Forissier, a former internal auditor of UBS' private banking division, also told the newspaper that a special record containing a list of French clients with undeclared bank accounts was sent to the UBS' Swiss headquarters.
"It was France that you had to milk. The French branch of UBS was just an excuse to collect [clients] for UBS Switzerland," he told Le Monde.
The magistrates investigating the affair have sent a list containing the names of 353 people suspected of having held a Swiss account to Swiss authorities and have requested details, the official at the prosecutor's office told the BBC.
In addition to the latest investigation, UBS was also identified as a "supervised witness" on two other allegations related to money laundering and tax evasion, she added.
Supervised witness is a less serious status than a formal investigation. It means that a person must be accompanied by his or her lawyer if questioned further in the investigation.
UBS said: "We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter."
In a separate statement in French, it said: "The tribunal's decision widens the probe. UBS will continue to cooperate with the French authorities. UBS will not allow any move aimed at helping clients to avoid their fiscal duties."
The latest investigation came amid a wider government crackdown on tax evasion in Europe and the United States.
In France, former French budget minister Jerome Cahuzac resigned in April after admitting he had squirreled away savings in an undeclared Swiss bank account. His ministry was responsible for tackling tax evasion.
UBS was placed under a similar investigation in 2008 in the US when it faced charges for conspiracy to defraud the US tax authority. The bank eventually paid a $780m fine to avoid prosecution and handed over data on some 4,500 bank accounts held by suspected US tax evaders.
Source-BBC
German central bank cuts growth forecasts for 2013 and 2014
Germany's central bank has cut its growth forecast for the country, but says the outlook for the economy has "become brighter".
The Bundesbank expects the economy to grow by 0.3% this year, down from an earlier forecast of 0.4%.
In 2014, it expects 1.5% growth, down from a previous estimate of 1.9%.
The Bundesbank suggested that the worst could be over for the eurozone, saying that in the euro area "the economy appears to be bottoming out".
"Nevertheless, the Bundesbank sees continuing structural problems as standing in the way of a rapid improvement," it added.
"This is likely to place a major strain on the German economy."
The German economy has proved relatively resilient in spite of the eurozone crisis, but shrank late last year and only narrowly avoided a recession earlier this year.
The latest cut in growth forecasts was "due mainly to downward revisions with regard to the external environment", the Bundesbank said.
But the central bank added that it expected a recovery later this year, supported by a relatively robust labour market, a sharp increase in wages and easing inflation.
Bundesbank economists said residential construction and commercial investment were benefitting from low interest rates.
They also said falling crude oil prices were expected to push down consumer price inflation, which is good news for households.
Germany escaped a recession in the first quarter of the year thanks to an increase in private consumption, which had offset a fall in exports.
But Bundesbank president Jens Weidmann warned: "Much will depend on whether the economic situation stabilises in the euro-area crisis countries and whether expansionary forces will gradually gain the upper hand there."
Drone Strike Kills 3 in Yemen
Yemeni security and tribal sources say an apparent U.S. drone strike has killed at least three suspected al-Qaida militants in the north of the country.
The sources said several drone-fired missiles struck at least one vehicle carrying the militants in the northern province of al-Jawf on Sunday.
U.S. drones have repeatedly targeted al-Qaida's Yemen-based affiliate in recent years. Washington considers al-Qaida in the Arabian Peninsula to be one of the world's most dangerous terrorist groups.
U.S. President Barack Obama acknowledged the use of drones in a policy speech on counter-terrorism last month, saying the secretive military tactic "narrowly" targets al-Qaida and its affiliates. But, Obama also said drones are used only in "heavily constrained" circumstances because such U.S. action in foreign lands impacts public opinion overseas and risk creating more enemies of the United States.
Iraq's Maliki Makes Rare Visit to Kurdish Area to Ease Tensions
Iraqi Prime Minister Nouri al-Maliki has made a rare visit to his country's autonomous Kurdish region to try to ease long-running disputes that have threatened national unity.
Mr. Maliki flew to Iraqi Kurdistan's regional capital of Irbil Sunday in his first trip to the autonomous area since 2010. He was greeted warmly at the airport by regional president Masoud Barzani.
The Iraqi prime minister and his Cabinet later held a meeting with Iraqi Kurdistan's prime minister Nechirvan Barzani.
Relations between Mr. Maliki's Baghdad-based central government and Iraqi Kurdistan have been tense for years, with both sides disagreeing about who should control Iraqi oil resources and territories along their internal boundary. No breakthroughs on those issues were expected in Mr. Maliki's talks with Iraqi Kurdish officials.
Iraqi Kurdistan has signed oil exploration contracts with foreign energy companies Exxon Mobil, Chevron and Total in recent years, angering Baghdad, which believes only it should authorize such agreements.
The Kurdish region has been building a pipeline that would allow it to export oil extracted from its territory to neighboring Turkey, bypassing pipelines controlled by Baghdad. The independent pipeline could help Iraqi Kurdistan to reduce its reliance on central government funds for a significant portion of its budget.
Iraqi Kurdish leaders also have long demanded the expansion of their authority to include oil-rich areas of northern Iraq adjacent to the three autonomous Kurdish provinces. Baghdad has resisted those demands.
Mr. Maliki has been under pressure to resolve sectarian tensions in Iraq, where majority Shi'ites and minority Sunnis have been increasingly attacked by militants of the opposing sect in recent months.
In the latest violence, a suicide car bomb struck a security checkpoint in Baghdad's mostly Shi'ite neighborhood of Kadhimiyah early Sunday, killing at least seven people, most of them security personnel. There was no initial claim of responsibility.
Iraqi Sunnis have held months of protests demanding the resignation of Mr. Maliki, a Shi'ite whom they accuse of monopolizing power in the hands of fellow Shi'ites and unfairly targeting Sunni leaders for arrest.
The Iraqi prime minister has been trying to lead a power-sharing government with Sunnis and Kurds for the past three years.
Gunfire Kills Anti-Hezbollah Protester in Beirut
Lebanese security sources say gunfire has erupted at a demonstration in Beirut, killing a man who was protesting against the involvement of Shi'ite militant group Hezbollah in the Syrian civil war.
It was not clear who killed the man at Sunday's small protest outside the Beirut embassy of Iran, which is a supporter of Hezbollah and Syrian President Bashar al-Assad, whose Alawite sect is an offshoot of Shia Islam.
Anti-Hezbollah activists held a second small protest in another part of the Lebanese capital. It ended without reports of violence.
Hezbollah recently acknowledged sending forces across the border into Syria to fight on behalf of President Assad against predominantly Sunni rebels waging a two-year battle to oust him.
The group's involvement in the Syrian conflict has raised sectarian tensions in Lebanon, whose fractious religious communities include Shi'ites and Alawites largely supportive of Assad and Sunnis who mainly back Syria's rebels.
Armed Lebanese supporters and opponents of Mr. Assad have fought several deadly battles in the northern city of Tripoli in recent months. The violence has raised international concerns about the spillover of the Syrian civil war into neighboring countries.
Attacks in Pakistan Kill 4
Bomb attacks in a restive tribal region of Pakistan have killed two soldiers, while gunmen in the country's south have killed two police officers.
Authorities say at least two roadside bombs exploded in North Waziristan Sunday, killing the soldiers and wounding two others.
Meanwhile, in the southern port of Karachi, officials say four gunmen on motorbikes opened fire on a police vehicle, killing two police officers.
No one has claimed responsibility for the attacks.
Queen marks Coronation anniversary at Westminster Abbey
The Queen has joined 2,000 guests for a service at Westminster Abbey to mark 60 years since her Coronation.
Some of those who took part in the 1953 service were among the congregation.
Archbishop of Canterbury the Most Rev Justin Welby said the event honoured "60 years of commitment".
The Queen was accompanied by more than 20 members of her family, including the Duke of Edinburgh, who pulled out of an engagement on Monday night because he was feeling unwell.
Several key items from the Coronation were placed in Westminster Abbey for the service.
They included the heavy, solid gold St Edward's Crown, displayed on the High Altar - the first time it has left the Tower of London since 1953.
Beside it was the Ampulla, the gold, eagle-shaped bottle from which the holy oil was poured for the Queen's anointing.
The Coronation Chair, one of the oldest pieces of English furniture still in use, was also on show.
The Queen and Prince Philip entered Westminster Abbey to the same music that greeted her in 1953.
Back then, aged 27, she was the 38th sovereign to be crowned in an abbey that has been the scene of such ceremonies since the coronation of William the Conqueror in 1066.
The Archbishop of Canterbury told those gathered in the abbey that the Coronation had been "an ordination, a setting aside of a person for service".
Dr Welby said that during the ceremony the Queen knelt at the abbey's altar and prayed.
"We do not know what was prayed. Her Majesty knelt at the beginning of a path of demanding devotion and utter self-sacrifice, a path she did not choose, yet to which she was called by God.
"Today we celebrate 60 years since that moment, 60 years of commitment."
'Duty done'
At the time the Coronation was a major television spectacle, with an estimated 27 million Britons tuning in.
The weather was dull and wet, but warm sunshine greeted those gathering in London for the anniversary on Tuesday.
The Archbishop said the Coronation had been "the first time the whole nation had watched anything as it happened".
He called it "pomp and ceremony on a rainy June day, all so very British, wrapped in time and custom".
Her Majesty wore an Angela Kelly dress, hat and coat - made from oyster-coloured silk-satin brocade - for the anniversary service.
She was joined at the abbey by the Prince of Wales - who was just four in 1953 - and the Duchess of Cornwall, as well as the Duke of Cambridge and the pregnant Duchess of Cambridge.