EUobserver.com / Economic Affairs / EU handling of Greece forced Cyprus bailout, minister says

NICOSIA - Cyprus has lashed out that short-sighted and German-led thinking by negotiators of Greece's bailout deal has forced the Mediterranean island into asking for euro aid that it would otherwise not have needed.

"Effectively because of our close proximity (to Greece) we were called upon to pay a very heavy price because of our financial connection," finance minister Vassos Shiarly said Friday (6 July).

Cyprus' major complaint that holders of Greek bonds take a loss on their investment - something insisted on by German Chancellor Angela Merkel. This hit Cypriot banks - heavy lenders in Greece - hard.

EUobserver.com / Political Affairs / EU warns Romanian government on rule of law

BRUSSELS - The EU commission on Friday (6 July) warned the Romanian government not to undermine rule of law amid political infighting in Bucharest.

"The commission is concerned about current developments in Romania, especially regarding actions that appear to reduce the effective powers of independent institutions like the Constitutional Court," EU commission spokesman Olivier Bailly told press in Brussels on Friday (6 July).

He said the situation puts "at risk all the progress made over the past five years in having more respect for the rule of law and democratic checks and balances and independence of the judiciary in this country."

He added that commission chief Jose Manuel Barroso has personally called Romanian Prime Minister Victor Ponta to "express his concerns" and that Ponta will visit the EU capital next week to explain what is going on.

A professional, pragmatic presidency | European Voice

The start of Denmark's presidency was arguably not 1 January, the official launch-date, but 8-9 December, the occasion of a fractious European Council. As hopes of a 27-member deal on economic rules began to fade because of the UK's position, Helle Thorning-Schmidt, recently elected as Denmark's prime minister, intervened in the hope of saving a deal - only to be told by France's President Nicolas Sarkozy: "You're an out, a small out, and you're new. We don't want to hear from you." The country that would shortly be tasked with minding the European Union's business had been told to mind its own business. 

To take over an EU fractured and dominated by the eurozone crisis and by the centre-right's emphasis on austerity was a difficult challenge for a country that was not a member of the 17-member eurozone and for a government that was newly elected and one of just four governments in the EU led by centre-left politicians. It also suggested that Denmark, whose presidencies of the Council of Ministers in 1993 and 2002 were ambitious and successful, might struggle to improve its record.

Barroso's verbal attack on UK Tories branded 'absurd': theparliament.com

The leader of Britain's Tory MEPs is seeking an "urgent" meeting with José Manual Barroso after the commission president this week launched a fierce attack on the British Conservative Party.

Richard Ashworth has contacted Barroso to demand a "clear the air" discussion after the former Portuguese premier angrily told parliament in Strasbourg on Tuesday he believed that British Conservatives were taking pleasure in the problems of the eurozone.
In a plenary debate on last week's EU summit in Brussels, Barroso accused party colleague Martin Callanan of taking "delight" at the woes facing the euro.

Barroso has now been told by the Tories to "apologise" for his remarks.

Russia ready to brand NGOs as 'agents' | Europe | DW.DE | 06.07.2012

In Russia, foreign-funded NGOs that do political work will have to call themselves "foreign agents" if policymakers have their way. A scandalous defamation, say critics both at home and abroad.

It doesn't happen often that a draft law causes a storm of protests both domestically and abroad: "This is an unacceptable attempt to put a negative label on and ostracize Russian NGOs," reads a declaration of the coordinating unit of the EU-Russia Civil Society Forum. Marieluise Beck, a member of the Green Party in the German parliament, calls it a "declaration of war by the Kremlin against its own people." Experts, too, are outraged: "It's scandalous and, in this way, unacceptable," says Hans-Henning Schröder of the German Institute for International and Security Affairs (SWP) in an interview with DW in Berlin.

The root of all the quarrel lies within the draft law that the Russian parliament, the Duma, is discussing in its first reading on Friday in Moscow. The Kremlin party United Russia aims to use it to restrict the work of non-government organizations. And here the title of the draft law leaves no doubt: It concerns NGOs that "perform the functions of foreign agents." James Bond is not too far off: To most Russians the word "agent" is a synonym for "spy".

Discrediting NGOs

In the eyes of Russian lawmakers, NGOs that receive funds from the West are apparently as dangerous to the nation as foreign secret services - at least according to the ruling party. Nowadays it would be possible to "destroy the constitutional order of a state through NGOs," a delegate said before the reading. Another called the law "a simple form of self defense of the Russian state and Russian sovereignty."

In about 20 pages the draft paper dictates that Russian NGOs that receive funds from abroad and are politically active must be entered in a special register as "foreign agents." This description also has to be visibly displayed in any contacts with the public, including written material.

"This has negative effects on different levels," criticizes Stefan Melle, director of the "German-Russian Exchange" in Berlin and member of the coordinating unit of the EU-Russia Civil Society Forum. This law would cause additional bureaucracy that would put a strain on the work of NGOs: "Most importantly, however, it lets NGOs fall from grace in the eyes of the public, as the NGO allegedly does not act in its own interest and that of the citizens of Russia, but instead in the interest of some obscure foreign paymasters," Melle said. This "simply isn't true," he said.

EU divided over single liberalised railway system | EurActiv

The European Parliament has moved a step closer towards establishing a single, liberalised European rail network after a round of voting on the proposed competition rules.

The new rules aim to boost the supply of international freight and passenger services and to improve their quality, clarify competition rules for rail transport firms and rail infrastructure managers while establishing independent regulators to oversee the network.

The EU has also proposed price incentives to modernise trains and expand the network and encourage the development of quieter and safer trains, said the Parliament statement accompanying the proposed revisions to the single European railway directive.

"It took us two years of difficult negotiations ... to guarantee better competition and lay solid foundations for infrastructure funding," Debora Serracchiani (Socialists and Democrats group, Italy), an MEP in charge of compiling the report, said in a statement after voting took place in Strasbourg on 3 July.

"I consider that the unbundling of rail operators and undertakings is necessary, but we reached a good compromise on the monitoring of financial flows," she said.

Siim Kallas, European Commission vice president and commissioner for Transport, said he welcomed the agreement on competition rules, saying he expects them to come into force by the end of the year.

"The new rules tackle three major problems on the market, strengthening the power of national regulators, improving the framework for investment in rail and ensuring fair access to rail infrastructure and rail-related services. They are a direct response to many complaints from operators in recent years," he said.

Despite the compromise reached on the directive, which the Community of European Railway and Infrastructure Companies (CER) said had had a "complicated run-up," some parliamentarians are still not happy with the proposed plan.

A city has introduced parking spaces for men only, on the ground that they are diffcult to park the car in, and therefore that women would not be able to do so. Try to guess which country this is in, before clicking on the link.

This one is by a fellow attendee at the recent Minsky Seminar.

Econoblog 101: The German policy elite and the loss of Europe as the fantastic object (July 7, 2012)

Martin Wolf has received a reply from a German official to his column from last week. Read the reply and Martin Wolf's reply here (kudos to Pablo Bortz). I think I agree with most (all?) of what Martin Wolf says. I must say that as a German all of this does not surprise me. Neo-classical economics has taken over almost all of German academia, and the intellectual climate at most universities I would describe as barren. As a result, even large parts of the Greens and Social-Democrats have taken onboard the neo-classical mind-set, embracing debt brakes and austerity and giving up expensive social policies. This has happened elsewhere, too, like in Spain, Greece or Ireland. Both the right and the left did not oppose austerity programs and the unacceptable degradation of democracy they include.

Now the European policy elite defends the status quo and progressive thinkers are forced to abandon the shipwreck instead of being allowed to fix it - the fantastic object is shattered, as George Soros put it. Here is a different paragraph of his recent speech at the Trento Festival of Economics:

While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

Dean Baker: The NYT and WAPO Don't Think Workers Should Have Any Savings When They Retire (07 July 2012)

They may not realize this fact, but that is the logical implication of comments in both the NYT and Washington Post articles on the Friday jobs reports. Both papers complained that high debt burdens are depressing consumption, which would otherwise lead to more demand and more jobs.

In fact, the saving rate is currently under 4.0 percent. In the decades prior to the stock and housing bubbles the saving rate averaged over 8.0 percent. A 4.0 percent saving rate implies that workers are accumulating very little wealth for retirement. It is difficult to see why it would be viewed as a positive development if they saved even less, especially since both papers have repeatedly argued for cuts in Social Security in their news sections.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

Can't yet find the news in English, only in french or German.

Spiegel: Juncker-Nachfolge Deutschland und Frankreich wollen sich Euro-Spitzenjob teilen (07.07.2012)

Berlin und Paris stritten lange um den Vorsitz der Euro-Gruppe, nun zeichnet sich ein überraschender Kompromiss ab: Nach SPIEGEL-Informationen soll erst Finanzminister Schäuble den Job übernehmen, danach sein französischer Kollege Moscovici. Damit wäre die Nachfolge für den Luxemburger Juncker geklärt.

Auf den überraschenden Kompromiss haben sich Bundeskanzlerin Angela Merkel und der neue französische Staatspräsident François Hollande geeinigt. Konkret soll das so aussehen: Hollande akzeptiert zunächst Bundesfinanzminister Schäuble als Vorsitzenden der Euro-Finanzminister. Nach der Hälfte der Amtszeit könnte dann der französische Finanzminister Moscovici übernehmen. Die Ämterteilung würde es beiden, Kanzlerin und Präsident, ermöglichen, ihr Gesicht zu wahren und ein monatelanges Geschacher um den enorm wichtigen Posten beenden.

Junckers Amtszeit endet in diesem Monat. Die Nachfolgersuche hatte Anfang des Jahres begonnen, nachdem Luxemburgs Premier Juncker seine Amtsmüdigkeit als Euro-Gruppen-Chef demonstriert hatte. Um den Anforderungen des Krisenmanagements gerecht zu werden, müsse das Amt - anders als er es könne - vollberuflich ausgeübt werden, sagte er. Auch eine vorübergehende Verlängerung seiner Amtszeit hatte er kürzlich verärgert abgelehnt. Juncker steht der Euro-Gruppe seit der Schaffung eines Vorsitzendenpostens im Jahr 2005 vor.

Juncker succession Germany and France want to share the Euro's top job (07.07.2012)

Berlin and Paris fought long over the presidency of the Eurogroup, and now they have signed off on a surprising compromise: According to Spiegel's information Finance Minister Schäuble should take the job first, and then his French colleague Moscovici. Thus would the succession of Luxemburg's Juncker be cleared.

How is this surprising? The EP Presidency is shared in two half-terms by the EPP and the PES. The first ECB Chairmanship was shared with the first half taken by the Dutchman Wim Duisenberg and the second half by the Frenchman Trichet... oh, wait, Trichet served a full term, not a half-term... That wasn't in the original agreement...

The German Chancellor and the new French President have agreed to the surprising compromise. In concrete terms: Hoolande accepts next German finance minister Schäuble as chairman of the Euro finance ministers. After half the term of office French finance minister Moscovici  could take over. The sharing of the office would allow both Changellor and President to save face and end a month-long haggling over the enormously important position.

Juncker's term in office ends this month. The search for a successor had begun at the start of the year, after Luxembourg's premier Junckers had demonstrated his office fatigue as Eurogroup chief. To meet the demands of crisis management, the office required exclusive dedication which he couldn't offer, he said. He had even recently rejected angrily a temporary extension of his tenure. Juncker is the Euro Group Chairman since the creation of the post in the year 2005.

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

Exclusive: Germany pushes Libor probe of Deutsche Bank - sources | Reuters

(Reuters) - German markets regulator BaFin is conducting a special probe of Deutsche Bank as part of a wider investigation into possible manipulation of the London Inter Bank Offered Rate (Libor), two people familiar with the matter said on Friday.

The German regulator declined to comment specifically on whether it was probing Deutsche Bank, but said it was in looking into suspected manipulation of Libor rates by banks.

"We are making use of our entire spectrum of regulatory instruments, so far as this is necessary," a spokesman said.

IPS - New Banknotes Elicit Hopes and Fears in DRC | Inter Press Service

KIKWIT, DR Congo, Jul 5 2012 (IPS) - "The macroeconomic climate is looking good, with a growth rate varying between five and seven percent," said Jean-Claude Masangu, governor of the Democratic Republic of Congo's Central Bank as he justified the release of new denominations of the Congolese franc.

According to Masangu, the time is right for the release of new, high-face-value bills: 1,000, 5,000, 10,000 and 20,000 franc note will enter circulation beginning this week, from Jul. 2.

"The goal is to fight against the dollarisation of the national economy in such a way that Congolese are encouraged to use the franc as a stable, trustworthy and secure currency, not simply for making change," Masangu said during a press conference at the Central Bank's (BCC) headquarters in Kinshasa, the Congolese capital.

Masangu also stressed that the rate of exchange has remained remarkably stable at 920 Congolese francs to the dollar, and that the country's currency reserves are healthy: at the start of June, the Central Bank had reserves sufficient to cover two months of imports of goods and services. This would help the BCC to intervene in the markets in case of disruptions.

"The public purse is showing an unprecedented consolidated balance surplus, and these new denominations have a face value that is appropriate to the present system of payment," he explained.

François Hollande keeps election promise of raising taxes for wealthiest | World news | The Guardian

Since its revolution France has had a reputation for loving to hate the rich. But it has always boasted mega-wealthy business leaders, global brands, moneyed aristocratic families and designer luxury from embossed crocodile handbags to villas on the Riviera. Now it could be set for a new record as the European country doing the most to soak the rich.

The president, François Hollande, made no secret of his election pledge to squeeze fat cats and hit the mega-rich, making them bear the brunt of "sacrifices" needed to fix public finances. This week he was true to his word. The wealthiest households, banks and big business are to shoulder the best part of €7.2bn (£5.7bn) in tax rises this year, and more next year. France, already the only EU country with a wealth-tax, will increase it, with people worth more than €1.3m paying a one-off levy this year.

Inheritance tax, lowered by Sarkozy, will rise. New taxes are aimed at bank profits, dividends, bonuses, stock options, big businesses and energy companies holding petrol stocks. Already there has been a clamp-down on fat-cat salaries with a cap on the pay of chief-executives at state-owned companies.

"I'm not the enemy of money," argued the prime minister Jean-Marc Ayrault, saying small businesses and the working and lower-middle class would be spared. It was, he added, all about "fair" effort in crisis-hit France. Hollande, who once said "I don't like the rich", had warned before his election that the wealthiest would have to do the most to drag France out of the crisis.

Despite the criticisms of certain big business leaders, some top footballers and the 1960s hit singer Françoise Hardy - who complained she would have to quit France if taxes went up - the French public is overwhelmingly in favour of squeezing the rich. A BVA poll this week showed 75% favour the increase, including a majority of rightwingers. Another 73% approve of Hollande's signature measure: a 75% tax on income beyond the €1m mark, to be introduced next year. Another poll by TNS Sofres found 80% see France as a country where it is difficult to talk about money.

The main question remains how Hollande, who refuses to use the word austerity, will couple the tax increases with the state auditors's demand for an "unprecedented" brake on public spending. But the government has paid little heed to those critics who liken the tax rises to Britain in the 1970s. When David Cameron, who is lowering Britain's top tax bracket while the French prepare to raise theirs, promised to "roll out the red carpet" to fleeing French firms. The labour minister joked that a carpet across the Channel would get "quite wet".

Turmoil returns to stock markets and euro | Business | The Guardian

Spain's borrowing costs soared back to crisis levels on Friday after infighting among eurozone countries signalled a return to the turmoil that has rocked the global economy in recent months.

The interest rate on Spanish bonds touched 7%, leaving Madrid on the brink of asking Brussels for a formal bailout, despite having secured a €100bn rescue facility for the country's banks.

Stock markets plunged and the euro tumbled as investors withdrew funds from the currency zone in favour of safer havens. The euro fell 1% to its lowest level against the dollar since July 2010. Spain's Ibex index of leading shares was down more than 3%. The German Dax fell almost 2% to 6410 and the French CAC 1.9% lower at 3168. The FTSE dropped 30 points to 5662, while the New York Dow Jones index fell 138 points to 12,719.

A report on the jobs market in the US added to market tensions after it appeared to show the powerhouse of global growth hitting the buffers. The US added only 80,000 jobs last month, well short of the 200,000 average it managed until March and the 400,000 it needs to bring down unemployment.

Christine Lagarde, the boss of the International Monetary Fund, warned that it would lower predictions of global growth in 2012 due to a slowdown in Brazil and China alongside the faltering in the eurozone and US economies.

German Media Reactions to ECB's Interest Rate Cut - SPIEGEL ONLINE

Worries about the global economy are noticeably growing, and efforts by the euro zone and its central bank to stabilize Europe's common currency are apparently doing little to calm them.

OAS_RICH('Middle2'); On Thursday, in an attempt to revive the euro zone's flagging economy, the European Central Bank (ECB) cut its key interest rate to a historic low of 0.75 percent and lowered its overnight deposit rate, the interest it pays banks to park money with it overnight, from 0.25 to zero percent in the hopes that reluctant banks will be encouraged to invest their money in the real economy or lend it to each other instead. The move, of course, also encourages private individuals not to park their money in banks since yields are likely to become even further outpaced by inflation.

Thursday saw similar moves by central banks in England and China. The latter lowered its rate by 0.31 percent, to 6 percent, and the Bank of England announced it would pump an additional 50 billion pounds (€63 billion) into its ailing economy.

The ECB's move comes as Italy and Spain, in particular, are finding it increasingly difficult to refinance their debt. Last week, euro-zone leaders at a summit in Brussels agreed to allow the European Stability Mechanism (ESM) bailout fund to lend money directly to Spanish banks as a way to keep its government's debt load from rising as well as to actively purchase sovereign bonds on the secondary market to help ease yields.

Though widely anticipated, the ECB's rate cut was not expected to take pressure off these high borrowing costs -- and it didn't. In midday trading on Friday, yields on 10-year Spanish government bonds rose to 6.9 percent, close to the 7 percent level considered unsustainable in the longterm, raising fears that the country might be forced to ask for bailout aid from the ESM. What's more, yields on Italian bonds climbed to just above 6 percent, and the euro sank to an almost 5-week low against the dollar.

In Friday's newspapers, most German commentators seem to agree that the move has symbolic or psychological value -- but little more.

Oil and Gas production threatened by | News

All production of oil and gas on the Norwegian Shelf may be closed down from midnight on Monday, after the employers have sent out lock-out notice in order to bring to an end the strike by 700 oil workers in the North Sea.

This would mean the 6515 oil workers on Norwegian oil installation on the Norwegian Shelf would be locked out from their jobs offshore from 00.00 on Tuesday 10 July. .

The conflict is deadlocked and the demands are unreasonable, says Jan Hodneland, chief negotiator for The Norwegian Oil Industry Association (OLF). "Unfortunately, we see no other course than to notify a lockout."

The unions went on strike when they failed to secure acceptance of a 32-year-old demand for full pension rights from the age of 62 to be included in the agreements on pay and conditions.

Most analysts believe that the Government cannot allow Norwegian oil and gas production to close down, and that it will call for compulsory arbitration before Monday.

Jobs Report Revives Fears for Recovery - WSJ.com

The U.S. economy posted its third consecutive month of weak job growth, complicating President Barack Obama's reelection prospects and turning up the pressure on the Federal Reserve to do more to help the economy.

U.S. employers added 80,000 jobs in June, barely better than the 77,000 they added in May. The monthly report from the Labor Department provided the clearest evidence yet that job growth has slowed sharply from earlier this year. The U.S. gained just 225,000 jobs in the past three months combined, making it the weakest quarter of job growth since the labor market began to recover in 2010. The unemployment rate remained stuck at 8.2%.

The report echoes recent data that suggest the U.S. economy is losing steam. This week, the Institute for Supply Management said the manufacturing sector contracted in June for the first time since the first month of the recovery in July 2009. Consumers' confidence in the economy has been declining and household spending fell slightly in May--the first drop in nearly a year.

Eurogroup Set for New President - WSJ.com

Euro-area finance ministers meeting in Brussels Monday are set to vote on the new head their group, known as the Eurogroup, as incumbent Jean-Claude Juncker's tenure ends July 17, his office said in a statement Friday.

But Mr. Juncker, who is Luxembourg's prime minister and has been head of the Eurogroup for the last seven years, is prepared to stay in the post until year-end, his spokesman said.

Mr. Juncker has said he "would be available for six months until the end of the year" but after that, they would need to find a new person, the spokesman said.

However, the spokesman said Mr. Juncker expects that, in return, euro-zone finance ministers will be asked to pick Luxembourg's Yves Mersch to replace Spain's Jose Manuel Gonzalez-Paramo on the ECB's executive board.

The 17 euro-zone finance ministers will also make a recommendation for the chief of the permanent rescue fund, the European Stability Mechanism, according to the statement.

This would be more fun if Max Keiser were not such a gold bug...

But the question that comes to my mind is... If Central Banks want to "rig" interest rates, why don't they just do it by market-making in bonds? And sure enough, Keiser criticises QE for manipulating interest rates... So, then, why bother asking Barclays to rig Libor?

If you are not convinced, try it on someone who has not been entirely debauched by economics. — Piero Sraffa

Syrian general close to Assad defects - Middle East - Al Jazeera English

A Syrian general and personal friend of President Bashar al-Assad, who was apparently sidelined a year ago, has defected and fled Syria.

Opposition activists have told Al Jazeera that Manaf Tlas, a brigade commander in Assad's Republican Guard, has left the country and will soon announce that he abandoned Assad because of anger over civilian deaths during the 16-month uprising.

French Foreign Minister Laurent Fabius confirmed on Friday that Tlas, who attended military college with the 46-year-old Assad, had defected and was bound for Paris.

Tlas is the son of Mustafa Tlas, who served as defence minister for 30 years under former president Hafez al-Assad and briefly under his son, the current president.

A witness in Damascus said by telephone that Tlas' house in Damascus was ransacked on Thursday by security agents after these reports.

Iran blames France, Germany for atomic scientist assassinations | Reuters

(Reuters) - Iran's spy chief accused German and French intelligence agencies on Friday of involvement in assassinations of its nuclear scientists, sticking to a hard official line as sanctions imposed over its disputed atomic ambitions bite harder.

The Islamic Republic has previously accused Israel, the United States and Britain of plotting the killings to set back its uranium enrichment program, which Western powers suspect is being used to develop nuclear weapons capability.

Intelligence Minister Heydar Moslehi spread the blame to France and Germany, after days of hawkish rhetoric and missile tests by Tehran that helped push benchmark Brent crude oil prices above $100 for the first time since June.

Romney campaign's missteps have some Republicans grumbling | Reuters

(Reuters) - For months, Republican Mitt Romney's presidential campaign was a picture of discipline, charting a relatively steady course for the former Massachusetts governor through a bitterly contested primary season.

In recent weeks, however, Romney's tight ship has not looked so tight.

Romney's missteps on issues such as immigration and healthcare - and images of him on a jet ski during a vacation at his New Hampshire estate this week - have exasperated some supporters who are calling for a shake-up of his staff and worrying he could bungle Republicans' chances of ousting Democratic President Barack Obama in the November 6 election.

The concerns were summarized in an editorial late on Wednesday by The Wall Street Journal, which said Romney's Boston-based staff was "slowly squandering an historic opportunity."

BBC News - Mexico's Pena Nieto's presidential victory confirmed

Enrique Pena Nieto has been confirmed as the winner of Mexico's presidential election, following a partial recount.

With almost every vote counted, Mr Pena Nieto had 38.2%, with second placed Andres Manuel Lopez Obrador on 31.5%.

While third-placed Josefina Vazquez Mota admitted defeat, Mr Lopez Obrador said he would challenge the result in Mexico's electoral tribunal.

Accusations of irregularities led to a re-check of about 50% of votes after the result was announced on Monday.

IPS - New U.S.-Pakistani Supply Accord Seen as Tenuous | Inter Press Service

As NATO supply convoys began crossing from Pakistan into Afghanistan for the first time in more than seven months Thursday, analysts here warned that the reopening of the key route does not necessarily signal a new dawn in the fraught relations between Washington and Islamabad.

The agreement, which will save NATO countries, especially the U.S., hundreds of millions of dollars in logistical costs, was worked out over the past two weeks, primarily by Washington's top Afghanistan commander, Gen. John Allen, and the powerful Pakistani Army chief, Gen. Parvez Kayani. The men met twice over a 10-day period, most recently last Sunday, two days before the long-awaited accord was made public.

On the one hand, Pakistan got a rather lacklustre apology from Secretary of State Hillary Clinton for the Nov. 24, 2011, aerial attack on its Salala border station that killed two dozen Pakistani soldiers. For its part, Washington's most cost-effective route into Afghanistan was finally re-opened.

For more than six months, the U.S. and its NATO allies have had to rely increasingly on far more expensive air routes and the Northern Supply Network (NSN) that runs from Europe via Russia and Central Asia to get needed supplies to their troops in Afghanistan. The Pentagon estimates that it spends about 100 million dollars a month using those routes than it would if the Pakistani border was open.

While U.S. officials here have touted the accord as a major step toward normalising ties with Islamabad, more sceptical voices described it as both superficial and tenuous.

"Bilateral relations have always been bumpy," according to Zia Mian, director of the Project on Peace and Security in South Asia at Princeton University. "Whether it was (CIA operative) Raymond Davis shooting people in Lahore, (Al-Qaeda chief) Osama bin Laden being caught in Abbottabad, or the attack at Salala, there's no love lost between the two countries. But money talks, and the U.S. got tired of paying through its nose for routes which could be had for much less."

Libya holds landmark vote under shadow of unrest | Reuters

Libya holds its first free national election in 60 years on Saturday in a vote designed to shake off the legacy of Muammar Gaddafi but which risks being hijacked by autonomy demands in the east and unrest in the desert south.

Voters will choose a 200-member assembly which will elect a prime minister and cabinet before laying the ground for full parliamentary elections next year under a new constitution.

Candidates with Islamic agendas dominate the field of more than 3,700 hopefuls, suggesting Libya will be the next "Arab Spring" country after Egypt and Tunisia to see religious parties secure footholds in power after last year's uprisings.

But the credibility of the vote will be wrecked if armed militia with regional or tribal loyalties discourage voters from turning out, or if disputes over the outcome degenerate into pitched battles between rival factions.

"The election will go ahead tomorrow and all the Libyan people need for it to go ahead," Prime Minister Abdurrahim El-Keib told a news conference in the capital Tripoli on Friday.

The greatest threat comes from the eastern region around the city of Benghazi, cradle of the NATO-backed uprising that ousted Gaddafi nearly a year ago but which complains of neglect by the interim government in Tripoli in the west.

"There is no doubt there could be a civil war between us in the east and the west," Hamed al-Hassi, a former rebel who now heads the High Military Council of Cyrenaica, the name of the eastern region, told Reuters.

"The country will be in a state of paralysis because no one in the government is listening to us," said Hassi, whose group is charged with securing the east but has fallen out with the government over representation.

On Friday, local armed groups shut off half the North African country's oil exports to press their demands for greater representation in the new national assembly. At least three major oil exporting terminals were affected.

Peru, LIMA, Jul 6 2012 (IPS) - In under two days, five demonstrators were gunned down by security forces in the northern Peruvian highlands region of Cajamarca, where a state of emergency has been declared.  That makes a total of 15 dead and 430 injured in social protest-related incidents in less than a year since President Ollanta Humala took office.

LAHT: LA PAZ - Clashes between Bolivian police and Indians who kidnapped five employees of a mining company in the southwestern province of Potosi left one dead and eight wounded, while one officer was being detained, officials said Friday. "There's one person dead. We have four indigenous people who have significant injuries. We also are aware that there are four police who suffered some type of injury and that there's a policeman detained there," the ombud for Potosi, Rene Arroyo, told Bolivision TV.

Background.

BUENOS AIRES (MercoPress) - An Argentine court has sentenced former dictator General Jorge Videla to 50 years in jail for stealing babies from political prisoners. There were also heavy penalties for other military officers involved in the practice.

Uribe Declares Candidacy:

Colombia Reports:  Colombia's ex-President Alvaro Uribe announced Thursday the creation of a new movement known as the "anti-terrorism front" or "democratic center coalition," aimed at providing a candidate to oppose current President Juan Manuel Santos in the 2014 elections.

La Silla Vacia: Although Uribe spoke of launching a "strong" candidate for 2014, there actually is no such candidate, as evidenced by a poll taken by Revista Posicion. When his partisans were asked who the candidate would be, 55 percent did not respond or said they did not know. Former Minister Oscar Ivan Zuluaga, who is the favorite of Uribe, could not muster 3 percent of the vote. Pacho Santos, who had the best backing, obtained 16 per cent.

Americas Quarterly: On Wednesday, Argentine Minister of Defense Arturo Puricelli and his Chinese counterpart, General Liang Guanglie, signed a memorandum of understanding in which they agreed to cooperate in the area of defense.

Colombia Reports: Documents allegedly exposing ties between two drug traffickers and Venezuelan and Colombian military personnel, land owners, juridical authorities, FARC guerrillas and a fashion model were revealed Friday by Colombia's La FM Radio.  The documents were said to belong to former Los Rastrojos leader Luis Enrique Calle Serna, alias "Comba," whose brother and partner, Javier Calle Serna turned himself over to U.S. authorities in May. The papers were handed over to the Prosecutor General's Office by former navy officer César Augusto Narváez in March of 2009, but were not made public until this Friday.

NYT: A Factory Grows in Haiti: The showcase project for Haiti's earthquake reconstruction is being built far outside the disaster zone, in an area that could jeopardize the country's key conservation effort..

"Beware of the man who does not talk, and the dog that does not bark." Cheyenne

Rising heat at the beach threatens largest sea turtles

For eastern Pacific populations of leatherback turtles, the 21st century could be the last. New research suggests that climate change could exacerbate existing threats and nearly wipe out the population. Deaths of turtle eggs and hatchlings in nests buried at hotter, drier beaches are the leading projected cause of the potential climate-related decline, according to a new study in the journal Nature Climate Change by a research team from Drexel University, Princeton University, other institutions and government agencies.

Leatherbacks, the largest sea turtle species, are among the most critically endangered due to a combination of historical and ongoing threats including egg poaching at nesting beaches and juvenile and adult turtles being caught in fishing operations.

The new research on climate dynamics suggests that climate change could impede this population's ability to recover.

Tension as China scraps factory plan

Police stood guard over hundreds of people gathered in a tense Chinese city Wednesday, a day after authorities bowed to violent protests and cancelled plans to build a controversial factory.

The protests in Shifang city highlighted and fuelled concerns around China over the impacts of rampant economic development on the environment, with millions of Chinese closely following developments on the Internet.

Shifang authorities on Tuesday night announced they would not build the $1.6-billion metals factory -- after two days of clashes during which riot police used tear gas to quell thousands of protesters.

"Shifang from this day forward will not build this project," Shifang Communist Party chief Li Chengjing said in a statement.

Atmospheric scientists release first "bottom-up" estimates of China's CO2 emissions -- Harvard School of Engineering and Applied Sciences

Atmospheric scientists at the Harvard School of Engineering and Applied Sciences (SEAS) and Nanjing University have produced the first "bottom-up" estimates of China's carbon dioxide (CO2) emissions, for 2005 to 2009, and the first statistically rigorous estimates of the uncertainties surrounding China's CO2 emissions.

The independent estimates, rooted in part in measurements of pollutants both at the sources and in the air, may be the most accurate totals to date. The resulting figures offer an unbiased basis on which China might measure its progress toward its well-publicized CO2 control goals.

The findings were published July 4 in the journal Atmospheric Environment.

"China's emissions of CO2 are of central concern in efforts to combat global climate change," says lead author Yu Zhao, a former postdoctoral researcher at Harvard SEAS who is now a professor at the Nanjing University School of Environment in China. "But despite all of the attention to China's CO2 emissions, they're less well quantified than most people realize."

Existing estimates for these emissions are calculated "top-down," based on annual energy statistics that are released by the Chinese government. The nation has only once officially estimated its CO2 emissions, based on national energy statistics from 1994, although it is now constructing a data system to produce periodic national greenhouse gas inventories. Non-Chinese organizations, such as the U.S. Department of Energy and the Netherlands Environment Agency, produce widely cited CO2 estimates for China (among other countries), but these are also based on the national energy data.

BBC News - Meteosat launches to maintain Europe's weather services

The latest spacecraft in Europe's long-running Meteosat series has just gone into orbit on an Ariane rocket.

It is now being manoeuvred into a position some 36,000km above the Earth from where it can keep a constant watch on developing weather systems.

The spacecraft is the 10th Meteosat platform to go into service since 1977.

Its pictures will soon be feeding into the daily forecasts provided to the public by national meteorological agencies right across Europe.

"Verification and testing of the satellite's systems will take two months. We expect to publish the first image on 6 August," said Alain Ratier, the director-general of Eumetsat, the intergovernmental organisation based in Darmstadt, Germany, that is charged with operating Europe's weather platforms.

Thursday's ascent to orbit from the Kourou spaceport in French Guiana lasted some 34 minutes.

When it came off the Ariane's upper-stage, the satellite was moving in a stretched ellipse around the planet, running from an altitude of 250km out to 35,950km.

Controllers at the European Space Operations Centre (Esoc), also in Darmstadt, will need to circularise that path in the coming 10 days.

They are targeting a geostationary observing position at zero degrees longitude, over the Gulf of Guinea on the Equator.

The satellite's orbital speed will be matched to that of the Earth's rotation, giving the platform's sensors a constant view of Europe and Africa.

Green light for offshore wind farms - Climate Change - Environment - The Independent

Two offshore wind farms which could generate enough electricity to power almost three quarters of a million homes have been given the go-ahead by the Government.

But a third project was turned down because of concerns over the impact it could have on seabirds protected by environmental legislation.

The two approved wind farms at Race Bank and Dudgeon in the Greater Wash off the Norfolk coast will have a combined capacity of over 1 gigawatt, potentially generating enough electricity to power 730,000 homes.

The Department of Energy and Climate Change (Decc) said the projects represented around £3 billion of investment.

Docking Shoal wind farm, also off the Norfolk coast, was not given the go-ahead because of the potential impact on Sandwich terns, whose colonies at Blakeney Point and Scolt Head Island fall within a "Special Protected Area", which is protected under EU wildlife laws.

The total amount of offshore wind power now operational, under construction or consented has reached 6.6GW.

IPS - Sri Lanka Emerges as Launchpad for Human Smuggling | Inter Press Service

COLOMBO, Jul 6 2012 (IPS) - If you hold a Pakistani or Afghan passport, be prepared for an unusually lengthy immigration process on entering neighbouring Sri Lanka. Immigration authorities in the island tell IPS they have set up special procedures to check passengers from these two countries. This is after increasing evidence that this South Asian island country off the southern tip of India is being used as a departure point by illegal foreign asylum seekers taking boats, mostly to Australia. "We have special security measures to question Afghans and Pakistanis," said Prabath Aluthge, head of counter trafficking at the Department of Immigration.

Addressing a meeting on trafficking and human smuggling at the Sri Lanka Press Institute last week he revealed that 25 Afghan passport holders were deported recently, while in the last five months 250 visa violators have been deported. Foreigners using fake Sri Lankan passports to gain entry and asylum have been rare, but not unheard of. Several among the 970 persons deported to Sri Lanka from Britain since 2009 were found on return to be Indians, and were sent back to India.

But the current trend with hundreds using the island as a staging point is a new development, local law enforcement officials tell IPS. On Jun. 21, a boat carrying around 200 Afghan and Iranian asylum seekers capsized off Christmas Island, about 2,600 km from the Australian mainland. About 90 of the passengers died. The boat is suspected to have originated from Sri Lanka, though direct journeys from the South Asian island to Australia, more than 8,000 km away, have been rare.

Cooperation can trump competition in monkeys

Being the top dog - or, in this case, the top gelada monkey - is even better if the alpha male is willing to concede at times to subordinates, according to a study by researchers from the University of Pennsylvania, the University of Michigan and Duke University. Alpha male geladas who allowed subordinate competitors into their group had a longer tenure as leader, resulting in an average of three more offspring each during their lifetimes.

The findings, collected from data during a five-year period ending in January 2011 through the University of Michigan Gelada Research Project, were published in the Proceedings of The Royal Society.

... Cooperation is surprisingly common among wild animals, the researchers said. While it makes evolutionary sense for animals to help their kin, it is harder to explain cases where competitors - especially unrelated adult males - join forces. This conundrum is particularly hard to explain because mating is generally a zero-sum game in which males can only reproduce by stealing mating opportunities from each other.

DNA Sequenced for Parrots' Ability to Parrot

Scientists say they have assembled more completely the string of genetic letters that could control how well parrots learn to imitate their owners and other sounds. The research team unraveled the specific regions of the parrots' genome using a new technology, single molecule sequencing, and fixing its flaws with data from older DNA-decoding devices. The team also decoded hard-to-sequence genetic material from corn and bacteria as proof of their new sequencing approach.

The results of the study appeared online in the journal Nature Biotechnology.

Single molecule sequencing "got a lot of hype last year" because it generates long sequencing reads, "supposedly making it easier to assemble complex parts of the genome," said Duke University neurobiologist Erich Jarvis, a co-author of the study.

He is interested in the sequences that regulate parrots' imitation abilities because they could give neuroscientists information about the gene regions that control speech development in humans.

Italian art historians claim they have found 100 early Caravaggios - News - Art - The Independent

Art historians say they have discovered a cache of over 100 early works by Caravaggio in a castle in Milan.

The remarkable discovery, details of which will be published online today, was last night valued at more than £500m.

Researchers who had been hunting for traces of Caravaggio's early work found the collection of sketches and paintings in the workshop of mannerist painter Simone Peterzano in Milan's Sforzesco castle.  

Peterzano was the master of Michelangelo Merisi, better known as Caravaggio, from 1584 to 1588.

"We always felt it was impossible that Caravaggio left no record, no studies in the workshop of a painter as famous as his mentor," Maurizio Bernardelli Curuz Guerrieri, artistic director for the Brescia Museum Foundation said.

Mr Bernardelli and his colleague Adriana Conconi Fedrigolli were allowed access to the works in order to verify their authenticity.

For two years they also examined Caravaggio's works in churches and museums in order to develop a rigorous basis for identifying other early works by the artist.

The researchers said the works showed "the faces, bodies and scenes the young Caravaggio would use in later years".

"Caravaggio left the region of Lombardy with a rich collection of figures that he used throughout his career, but especially in his early years working in Rome. These works are proof," said Mr Bernardelli.

A spokeswoman for the city, which owns the works, sounded a note of caution, however. "The drawings have always been there, and have never yet been attributed to Caravaggio," said Elena Conenna, the city council's culture spokeswoman. She said the city had not been informed about the discovery beforehand and would be "carrying out checks".

BBC News - Jacob Zuma penis cartoon by Zapiro 'disgusts' ANC

South Africa's governing ANC has expressed its "disgust" at a cartoon of President Jacob Zuma as a penis.

The cartoon, by prominent artist Jonathan Shapiro, known as Zapiro, also features a poem, which refers to Mr Zuma as a "dick".

The latest row comes just weeks after the ANC forced an art gallery to withdraw a painting showing Mr Zuma with his genitals exposed.

Mr Zuma is set to face Zapiro in court in October over a different cartoon.

The president sued the cartoonist, who works for the Mail & Guardian newspaper, after he depicted Mr Zuma in 2008 about to rape a female figure representing justice. Mr Zuma was cleared of raping a family friend in 2006.

The pair have also clashed over Zapiro's portrayal of Mr Zuma with a shower cap on his head - a reference to Mr Zuma's statement in the rape trial that he had taken a shower after having sex to reduce the chance of contracting HIV.

"We find it unacceptable and shocking that after the harsh experiences that South Africa, the president and his family has experienced few weeks ago, that Zapiro and the Mail & Guardian will find it appropriate to continue with the insults and hurt to the president, his family and the broader ANC constituency," the ANC said in a statement.

"All South Africans share our disgust."

BBC Sport - Wimbledon 2012: Federer beats Djokovic to reach final

Roger Federer became the first man to reach eight Wimbledon singles finals, knocking out defending champion Novak Djokovic with a beguiling victory under the Centre Court roof.

The third seed progressed to his 24th Grand Slam final with a 6-3 3-6 6-4 6-3 win over tournament favourite Djokovic.

It took Federer only two hours and 19 minutes to end the Serb's reign.

He will need to beat either Andy Murray or Jo-Wilfried Tsonga in Sunday's final to win a seventh Wimbledon title.

"Obviously, I'm ecstatic, I'm so happy," said Federer, who could now equal William Renshaw and Pete Sampras's record of seven Wimbledon crowns.