Monthly Archives: September 2011

Anwar al-Awlaki speaks in a video message posted in late 2010 (AP photo/SITE intelligence group)

Anwar al-Awlaki was killed in an air raid in Yemen, the US confirmed on Friday. He was regarded by western intelligence agencies as the most dangerous figure in the global al-Qaeda network. But what else do we know about the US-born cleric?

Q:  Who was Anwar al-Awlaki?

Al-Awlaki, a US citizen and son of a former high-ranking Yemeni official, was a radical cleric and advocate of “Al-Qaeda in the Arabian Peninsula,” based in Yemen.  The Yemeni offshoot of the global terrorist movement has carried out several innovative attacks aimed at the US.  Notorious examples include the shipping of explosives hidden in printer cartridges, and the attempt to kill a Saudi official with explosive powder lodged in an attacker’s body cavity. Read more

Welcome to day four of our rolling coverage of the eurozone crisis.

All times are London time. Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.

19.20: We’re wrapping up the blog here, but many thanks for reading (and commenting). You can follow the rest of our coverage at and on twitter, @FTWorldNews

19.15: What are the chances of Greece being able to meet its commitment to cut the general government deficit from €24.1bn to €17.1bn this year?

It’s an incredibly tough task – equivalent to about 7.5 per cent of gross domestic product.

Kerin Hope, our Athens correspondent, has taken a good look at the numbers:

Greece faces a desperate catch-up effort to achieve this year’s budget targets after reporting the central government deficit widened an annual 22.2 per cent for the first eight months of this year.

Talks with international lenders, which resumed on Thursday, are intended to wrap up details of the 2012 budget and of structural reforms to reduce public sector spending so that Athens can receive its next €8bn slice of bail-out funding, according to Greek officials.

But the current shortfall in this year’s budget indicates new measures may be needed…

Read the full story hereRead more

The answer is “not Tobin”, no matter what this might seem. The Tobin tax is specifically a tax on foreign exchange transactions, originally designed to damp down movements in a notoriously volatile market rather than to raise money. Campaigners for a Financial Transactions Tax(FTT) have sensibly switched attention from said currency tax – which, given the lack of regulation of FX trading, is susceptible to traders simply switching jurisdictions – to levies on bonds and equities sales. Bill Gates, who was asked to look into this issue for the G20, sounds like he will be in favour of something similar, together with eminently sensible ideas such as raising tobacco taxes in developing countries and levies on shipping and airline fuel.

That said, the EU FTT doesn’t look particularly workable – and I’ve even heard rumours it was made deliberately so by sceptical Commission officials trying to sabotage it from within. A tax on transactions in a particular exchange, if it can’t be bypassed, makes perfect sense at least as a money-raising device. The UK, despite its continual whingeing and mewling about an FTT, has taxed British stock transactions through Stamp Duty for a very long time – and added a new version to cope with sales of uncertificated stock. A levy based on the tax residency of the investor looks more difficult to implement, as it is subject to the usual shifting of registration offshore. Read more

The news that the “troika” – the EU, the ECB and the IMF – will be returning to Athens on Thursday is a pretty strong signal that the next tranche of the current rescue programme is going to be released – a small mercy for Greece, at least, even if the next version of the bail-out is mired in division and uncertainty.

Among the various other displays of poor coordination in the bail-out is the difference of style: the IMF tends to send its mission chief back to a borrower country only when the negotiations are pretty much done and the fund is ready to disburse the next tranche; the EU thinks substantive negotiations should be done in-country and generally wants to send its top officials in at an earlier stage. Read more

Great back-and-forth from the Europeans on how much of a writedown they want private bondholders to take in the Greece bail-out but, as far as I can tell, not much of a strong opinion being expressed by the International Monetary Fund (and publicly none at all). Given that the IMF once expended a lot of political capital valiantly, though ultimately unsuccessfully, trying to institute a kind of sovereign Chapter 11 mechanism to  allow private investors to be “bailed-in” to any rescue, this seems slightly odd. Read more

Welcome to our rolling coverage of the eurozone crisis.
All times are London time. Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.

19.23: We’re winding up the rolling blog for today but thanks for reading, and do follow the rest of our coverage at We’ll be back tomorrow to cover the crucial German parliamentary vote on expanding the EFSF (will Merkel preserve her absolute majority?) aswell as any other eurozone shenanigans…

19.21: Earlier we referred to some comments made by Angela Merkel in an interview with Greek TV late last night. Here’s the full story, from which:

Angela Merkel, German chancellor, has warned Greece that a €109bn rescue package, approved by the 17 eurozone leaders in July, may have to be reviewed if Athens fails to meet deficit reduction targets agreed with the European Union and International Monetary Fund.

 Read more

I thought that spending a week in Singapore might provide some respite from the euro-crisis which, as Paul Krugman wrote the other day, is now simultaneously boring and terrifying. But there is no getting away from it. Even the staid Straits Times, the local paper here, led on the euro yesterday. And at a dinner I went to last night – mixing Asians and Europeans, financiers and policymakers – the talk was mainly of Greece, Germany and the single currency. Read more

It is a testament to the sorry condition of Saudi women that any step towards empowerment, however small or marginal, is greeted with joy. Women reacted warmly to King Abdallah’s pledge to include them on the advisory shoura council and allow them to vote and stand in municipal elections. Read more

Welcome to the second day of our rolling coverage of the eurozone crisis. All times are London time. Curated by Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.

20.00: We’re wrapping up the blog for today but we’ll be back bright and early tomorrow. In the meantime, you can follow the rest of our coverage at

19.52: BREAKING The FT’s Peter Spiegel and Quentin Peel report that a split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger write-down on their Greek bond holdings, according to senior European officials.

The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.

Full story hereRead more

By Gideon Rachman

The world could do with some glad tidings at the moment, to cope with a global economic crisis and turmoil in the Middle East. Unfortunately, the return of Vladimir Putin to the Kremlin does not qualify as good news.

As fears of a possible Greek default continue to sway financial markets, time is running short for policymakers to agree a solution to the eurozone crisis. The FT will be running live coverage of the latest developments here on our foreign affairs blog, The World.

All times are London time. Curated by Esther Bintliff, assistant Europe news editor in London, with contributions from FT correspondents around the world.

19.30: We’re wrapping up the blog for today, but we’ll be back on Tuesday to cover the latest developments from Greece – where a parliamentary vote is due to take place on the unpopular new property tax – and Germany, where the Greek prime minister is due to meet with chancellor Angela Merkel. In the meantime, please follow the rest of our coverage at

19.18: There was a teensy bit of good news today – or not so bad news. German business confidence, as measured by the Munich-based Ifo institute, fell in September – but by far less than in August. That counts as a positive in these turbulent times…

19.10: The European Central Bank is likely to significantly extend its provision of liquidity to banks next week as it seeks to counter the escalating eurozone debt crisis, reports Ralph Atkins, our Frankfurt bureau chief. But he says it’s still an open question whether the ECB will cut official interest rates as well.

18.55: Donal O’Mahony, global strategist at Davy Capital Markets, points out that the “current convulsions in global markets and economies offer some depressing comparisons to the events of 2008″:

“Once again, nerves are being shredded by the perception of bank solvency and liquidity risks, albeit this time with balance-sheet concerns more focussed on “toxic” sovereign than credit exposures… Once again, the spectre of another calamitous debt default now hangs heavily in the air.”

O’Mahony argues that while the eurozone’s crisis resolution efforts have thus far been hampered by “deep ideological conflicts”, a “more decisive policy approach may finally prevail”, given the dangerously high stakes: namely, the “entire fate of the single currency ideal hanging in the balance”.

18.40: Moves to save the euro have come and gone but it now looks like policymakers recognise the urgency of addressing the problems underlying the eurozone structure. In this video, Lex’s Vincent Boland and Nikki Tait discuss what needs to be done and whether we’ve reached a turning point.

 Read more

Amid so much uncertainty and change, it is cold comfort that at least some things remain the same: Fidel Castro is still alive. A long absence from the public eye had prompted rumours that the 85-year-old revolutionary icon might have died. But on Monday, the former Cuban president, who handed power over to his brother Raúl in 2008 because of ill health, published another of his Reflections.  Read more

Amidst all the gloom about the world economy – and the excitement about Palestine and the UN – another big story is getting remarkably little play. The United States has come out and openly accused Pakistan - an ostensible ally to which it sends billions of dollars of aid – of being behind a deadly attack on the US embassy in Kabul. Read more

Palestine, Turkey, Hong Kong

In this week’s podcast: As president Mahmoud Abbas presses his argument for Palestinian statehood at the UN – we ask former editor of the Jerusalem Post, David Horovitz and head of the Palestinian government media centre, Ghassan Khatib, what the people on the streets of Israel and Palestine really think about the prospect; then we talk about an activist Turkish foreign policy which sees Turkey facing confrontation on many borders; and finally, rising inflation and soaring property prices in Hong Kong open up the gap in living standards between the rich and poor. Read more

More than a few readers of the FT, thinking politicians a useless lot, must regularly imagine “I could do better”.  It must be a particularly tempting line of thought for any “Master of the Universe”.

President? No problem. Those politicians are all second class brains. I, by contrast, run a bond desk/am a successful hedge fund manager/private equity honcho/chief executive of a multinational corporation. After all, if I already manage an operation with the annual revenues equivalent to the GDP of a small country, I could surely run a small country. It’s only logical. Well dream on. Chile ’s Sebastian Piñera, president of a small but rather successful country, is the counter factual that should make such fantasists think again. Read more

The  bomb that went off in Ankara today killed three people and looks like the work of the PKK, the Kurdish group that has been fighting Turkey for decades. It probably makes a Turkish army incursion into northern Iraq, pursuing the PKK, all but inevitable. I was in Ankara yesterday. It was the first day back for all the public schools and universities, so the traffic was terrible. A bomb this week was likely to cause maximum mayhem. Read more

By Gideon Rachman

If you want to understand why the euro is in such trouble forget, for a moment, debt and sovereign bonds – and take a look at the bank notes. The images on euro notes are of imaginary buildings. While national currencies typically feature real people and places – George Washington on the dollar bill, the Bolshoi theatre on the Russian rouble – European identity is too fragile for that. Selecting a place or a hero associated with one country would have been too controversial. So the European authorities chose vague images that represented everywhere and nowhere.

This week is Mahmoud Abbas’ Arab spring moment.

The Palestinian leader, often dismissed as weak and powerless, is defying friends and foes and going straight to the UN Security Council with a request for recognition of Palestine as a state.

A risky strategy no doubt – everyone had advised him against a move that is certain to provoke a US veto: he appears to have been struck by the winds of change blowing through the Middle East. He knows that the upheaval requires bold moves if it is not to leave the beleaguered Palestinian Authority irrelevant, and confirm his presidency as another bleak chapter in Palestinian history. Read more

Just a day after the visit to Tripoli by Nicolas Sarkozy and David Cameron, the Libyan National Transitional Council played host to another foreign leader – Recep Tayyip Erdogan of Turkey. The Brits and the French might have regarded it as a bit cheeky of Erdogan to roll up in Tripoli to try and bask in the success of the revolution, given that the Turkish prime minister had initially opposed Nato intervention. But the Turks saw it a bit differently. Some of the papers here in Istanbul reported that the British and the French leaders had rushed to Tripoli to upstage the Turkish prime minister. Erdogan himself seemed to see things this way, remarking sniffily – “We’ll see who gets the better reception.” Read more

Brics buying debt, Greece in trouble again, Palestine lobbies for statehood

In this week’s show: As Europe looks to China and other Bric nations to buy up its debt – we ask, is the global economy at a tipping point? Back in the Eurozone – rumours are flying again about the possibility of a Greek debt and Germany’s chancellor, Angela Merkel is under pressure; and, Palestinian leaders prepare to present their case to the UN for statehood. Read more