Portugal reveals tough 2013 budget
The Portuguese government has revealed details of its draft budget for 2013, one of the harshest in the country's recent history.
Finance Minister Vitor Gaspar confirmed the average income tax rise would increase from 9.8% in 2012 to 13.2% next year.
Portugal was granted a 78bn-euro ($100bn; £63bn) bailout last year.
Mr Gaspar said the budget was the only way for the country to meet its targets under the bailout.
"We have no room for manoeuvre," he said.
"Asking for more time [under the bailout] would lead us to a dictatorship of debt and to failure."
He also announced spending cuts worth 2.7bn euros next year, which would include laying off 2% of the country's 600,000 public sector employees.
About 2,000 protesters gathered outside parliament on Monday to demand the resignation of the government, chanting: "The people united will never be defeated."
Mr Gaspar said the budget would allow Portugal to reduce its budget deficit to 4.5% in 2013. It must eventually get its deficit below the European Union target of 3% of GDP.
Portugal is currently experiencing its worst recession since the 1970s, with the unemployment rate above 15%, and predicted to rise to 16.4% next year.
Opposition Socialist Party leader Antonio Jose Seguro described the draft budget as "a fiscal atomic bomb".
Portugal's main trade union, the CGTP, said it was "an attack on the dignity of the people" and daily newspaper Diario Economico declared it "an insult to the Portuguese people".
Wages hit
As in Spain and Greece, Portugal has seen huge street protests against the austerity cuts that are needed to meet the demands of the bailout.
In September, the government decided not to raise social security contributions next year from 11% to 18% after protests against the proposed move.
A general strike is planned for 14 November.
The income tax rise in the budget amounts to a month's wages for many workers.
The budget also reduces Portugal's income tax brackets from eight to five, and there will be a one-off 4% surcharge tax on all workers' earnings in 2013.
Capital gains tax will increase from 25% to 28%.
The government expects the economy to shrink by at least 3% this year and by 1% next year, although many economists forecast a greater contraction in 2013.
Yahoo appoints Google's Henrique de Castro as COO
Yahoo has appointed Google executive Henrique de Castro as its next chief operating officer (COO), the second big name it has hired from its rival in recent months.
Earlier this year, it appointed former Google executive Marissa Mayer as its chief executive.
In a statement, Yahoo said Mr De Castro will oversee global sales, operations, media and business development.
Yahoo has been trying to rebuild itself after falling behind its rivals.
Yahoo was one of the pioneers in internet search and email and continues to remain one of the biggest names in the industry.
However, it has been losing ground as it has not been able to keep with the likes of Google in the search engine area.
At the same time, its email business has been hurt the by the growing popularity and success of social networking websites such as Facebook.
The continued success of its rivals has meant that Yahoo has been facing tough competition in attracting advertisers to its portals.
Yahoo's share of US online advertising revenues fell to 9.5% last year, down from 15.7% in 2009.
However, Yahoo's chief executive Ms Mayer said the new COO's prior experience would help boost the firm's business and revenues.
"His operational experience in internet advertising and his proven success in structuring and scaling global organizations make him the perfect fit for Yahoo as we propel the business to its next phase of growth," said Ms Mayer, chief executive of Yahoo.
According to Yahoo's filing with the US Securities and Exchange Commission, Mr De Castro will be paid an annual salary of $600,000 (£373,000). He will also be eligible for an annual bonus of up to 90% of that amount.
He will also receive a cash bonus of $1m within one week of joining Yahoo and will be given restricted stock units and performance-based stock options totalling $56m over four years.
is is a pivotal point in Yahoo's history, and I believe strongly in the opportunity ahead," Mr Castro said.
Softbank to take control of Sprint Nextel for $20bn
Japanese mobile phone company Softbank is to buy 70% of US carrier Sprint Nextel for $20.1bn (£12.5bn).
The deal will be the biggest overseas acquisition by a Japanese firm.
The takeover of the number three mobile carrier in the US will make Softbank one of the world's three biggest mobile phone operators, with 96 million users.
But Japanese investors have not welcomed the widely-expected deal. Softbank shares fell 6% on Monday on top of the 16.9% they lost on Friday.
About $12bn of the money will go to Sprint shareholders, with the rest being used to strengthen its balance sheet.
If it is approved by shareholders and regulators, the companies expect to complete the transaction by the middle of 2013.
"Our track record of innovation, combined with Sprint's strong brand and local leadership, provides a constructive beginning toward creating a more competitive American mobile market," said Softbank's chairman and chief executive Masayoshi Son.
"It could be safe if you do nothing and our challenge in the US is not going to be easy at all," Mr Son told a news conference.
"We must enter a new market, one with a different culture, and we must start again from zero after all we have built. But not taking this challenge will be a bigger risk."
Under the terms of the deal, Dan Hesse is to stay in his job as chief executive of Sprint.
It is reported that the transaction is being funded entirely by loans from four banks: Mizuho Financial, Sumitomo Mitsui Financial, Mitsubishi UFJ and Deutsche Bank.
There has been some concern from analysts about the amount of additional debt being taken on.
Sprint has lost money in each of the past 19 quarters and has net debt of about $15bn, while Softbank already has net debt of about $10bn.
Credit ratings agency Standard & Poor's has warned that the deal, "may undermine Softbank's financial risk profile".
It has placed Softbank's debt on CreditWatch with negative implications.
Greek Austerity Talks Remain Stalemated
Greece says negotiations with its international lenders over the country's latest austerity plan are unlikely to be concluded before this week's European Union summit.
Finance Minister Yannis Stournaras said Monday Greek officials are still talking with representatives of the International Monetary Fund, the European Central Bank and the EU. But he said he did not think a deal would be finished before the two-day Brussels summit opens Thursday.
Greece's lenders have been demanding that it cut $17 billion in spending over the next two years before they will release another segment of the country's second bailout in two years. Athens says it needs the money before it runs out of cash next month, so it can meet its financial obligations.
Meanwhile, German Chancellor Angela Merkel said that Greece's financial woes will not lead to any “uncontrollable developments” in the 17-nation euro currency bloc. But she said the Greek government still has a significant amount of work to do to solve its problems.
“We want Greece to stay in the eurozone, but our work is not yet over. There is much to do in coming days and weeks.''
IMF Leaders Seek ‘Quick, Effective’ Action on Growth
Global finance ministers have called for quick and effective action to safeguard faltering economic growth and rebuild shaken confidence.
The ministers warned Saturday at the annual meeting of the International Monetary Fund in Tokyo that global economic growth is slowing and substantial uncertainties and risks remain.
The IMF communique said the policies of advanced economies should be as growth-friendly as possible.
The finance ministers said emerging economies need to ensure “flexibility in policy implementation” to support growth.
U.S. Treasury Secretary Timothy Geithner told his fellow financial leaders the U.S. still has much work to do, despite making some fiscal progress. His comment came just hours after government officials announced in Washington that the nation's budget deficit had topped $1 trillion for a fourth straight year.
Asian Powers Increase Military Spending
A new study shows that over the past decade, five Asian powers have increased military spending to levels among the highest in the world, with China leading the way.
The study released Monday by the Washington-based Center for Strategic and International Studies says China has quadrupled its defense budget since 2000. It also says India, Japan, South Korea and Taiwan have dramatically increased their military spending.
That trend is in contrast with the United States and European Union, whose defense budgets have been declining in recent years.
Defense spending in the five analyzed Asian powers still trails that of the United States, but the CSIS study says it will surpass Europe's military expenditures this year.
The CSIS study says the five Asian governments spent about $224 billion in 2011, which is almost twice what they collectively spent in 2000. China's estimated defense spending has grown from about $22.5 billion to almost $90 billion in the past decade. But the authors say that some estimates put Chinese spending at a much higher level.
Japan's military budget was close to $60 billion last year. India's defense spending reached $37 billion. South Korea invested about $29 billion on its armament, while Taiwan's defense budget stood at $10 billion in 2011.
China now ranks second behind the United States in total military spending, although the Pentagon's budget still outpaces Beijing's defense spending at more than $600 billion year.
Self-Immolations Controversial in Buddhist Community
The practice of self-immolation is controversial in the Buddhist community, but it is a topic that has come to the forefront after more than 50 Tibetans have set themselves on fire to protest Chinese policies in their homeland.
Any kind of suicide is rare in Buddhist communities, where people believe in rebirth after death. A human life is considered a fortunate rebirth because of its opportunity to attain enlightenment.
The Tibetan spiritual leader, the Dalai Lama, has walked a fine line in his comments on self-immolation. He has questioned the usefulness of the act as a protest tool. He has said that the protesters have courage, but that they also should use their wisdom.
Representatives of the Dalai Lama and the prime minister of the Tibetan government-in-exile say the self-immolations are a sign that Tibetans can no longer tolerate China's push against their culture and religion.
Some Buddhists argue that the protesters are taking a strong compassionate action by giving their lives to bring about a better future for others. But some are concerned that the protesters are acting out of despair and frustration.
China has repeatedly denounced the self-immolations as terrorist acts. Beijing has accused the Dalai Lama of encouraging the self-immolations, noting that he has failed to fully condemn the actions.
On Saturday, a 52-year old Tibetan became the latest person to set himself on fire. Fifty-five Tibetans have burned themselves since February 2009 in a wave of anti-China protests that has gripped southwestern China and Tibet.
The Tibetan government-in-exile says 45 of those cases have resulted in deaths. Many of those who have set themselves on fire are monks or nuns.
EU Imposes Tougher Sanctions on Iranian Industries
EU foreign ministers have agreed to impose tough new sanctions on Iranian industries to try to pressure Tehran into negotiating an end to its sensitive nuclear activities.
After meeting in Brussels on Monday, the top diplomats of the 27-nation bloc released a statement saying the tougher sanctions are in response to what they call Iran's “flagrant violation” of international obligations and refusal to fully cooperate with the U.N. nuclear agency.
EU foreign policy chief Catherine Ashton said the sanctions are meant to persuade Iran to engage in negotiations that address international concerns about suspected military dimensions to the Iranian nuclear program. Tehran denies Western accusations that it is trying to develop nuclear weapons under cover of a civilian energy program.
The EU statement said one of the new penalties is a general ban on financial transactions with Iranian banks unless the transfers deal with humanitarian goods and EU authorities approve them in advance. Other measures include tighter restrictions on dealings with Iran's central bank, a ban on importing Iranian natural gas, and a ban on exporting graphite and metals that Iran could use for its weapons programs.
The White House welcomed the EU move, saying it “strengthens international efforts to … isolate the Iranian government.” Spokesman Jay Carney also said “rallying the world to increase the pressure on (Iranian leaders) so that they stop pursuing a nuclear weapon has been a top priority” for President Barack Obama.
Under the new sanctions, EU companies are prohibited from supporting Iran's ship-building industry and banned from transporting or storing Iranian crude oil – the country's main source of revenue. The EU banned imports of Iranian oil earlier this year.
An EU asset freeze and travel ban also will be imposed on additional entities whose names will be published Tuesday.
British Foreign Secretary William Hague said the EU will continue to intensify pressure on Iran “over the coming months” unless intermittent negotiations between world powers and the Islamic republic succeed. German Foreign Minister Guide Westerwelle accused Iran of “playing for time” and said EU nations do not see a “sufficient” Iranian readiness for “substantial” nuclear talks.
Iran has engaged in three rounds of talks with the five permanent members of the U.N. Security Council plus Germany since April, but has refused to scale back uranium enrichment unless major international sanctions are lifted.
2 Americans Win Nobel Economics Prize
Two American economists have won this year's Nobel Memorial Prize in Economics for their work in designing market institutions that match different parties within the market as efficiently as possible.
The Royal Swedish Academy of Sciences in Stockholm said Monday it awarded the prize to Alvin Roth, an economics professor at Harvard University, and Lloyd Shapley, a professor at the University of California, Los Angeles (UCLA).
The 89-year-old Shapley conducted early theoretical studies of matching methods in the 1950s and 1960s. He developed a formula of how 10 men and 10 women could be coupled so that no two of them would prefer each other over their current partners.
More recently, in the 1990s, the academy said the 60-year-old Roth used Shapley's research to redesign existing instructions for matching new doctors with hospitals, students with schools, and organ donors with patients.
It said the two Americans, who work independently of one another, will share the $1.2 million prize for an “outstanding example of economic engineering.”
The economics prize was not part of the original group of awards established in the will of Swedish industrialist Alfred Nobel, also known for inventing dynamite. The Swedish central bank created the annual prize in 1968 in Nobel's memory.
The 2012 Nobel Peace Prize and those in medicine, physics, chemistry and literature were announced last week. All awards will be handed out on December 10, the anniversary of Nobel's death in 1896.
British, Scottish Leaders Sign Deal on Independence Vote
British and Scottish leaders have signed a deal on a referendum that could lead to Scotland's independence.
British Prime Minister David Cameron and Scotland's First Minister Alex Salmond signed an agreement Monday in Edinburgh that finalizes details for a vote in late 2014 on whether Scotland should become an independent country or stay within the United Kingdom.
Mr. Cameron's meeting with Mr. Salmond in the Scottish capital follows months of negotiations. The British prime minister opposes a breakaway, but agrees it is up to the Scottish people to decide their future in a vote.
A survey released earlier this month suggests only about 28 percent of Scots support independence.
England and Scotland were joined by acts passed in 1707.
British rule currently covers England, Scotland, Wales and Northern Ireland.