Monthly Archives: October 2011

US Attorney General Eric Holder (R), Preet Bharara, US Attorney for the Southern District of New York (C) and FBI director Robert Mueller (L) announce a plot was foiled involving men allegedly linked to the Iranian government to kill the Saudi ambassador to the US. Photo credit: Getty Images

By David Gardner, international affairs editor

The US accusations that Iran is behind a plot to assassinate the Saudi ambassador to the US – possibly by blowing up a Washington restaurant he frequents – are, frankly, weird.

There is presumably some substance to it; it is the US attorney general and head of the FBI announcing the charges, and the Obama administration is clearly taking the plot very seriously.

But there are obvious objections. Why would Iran so up the ante in its three decades-long cold war with the US, by carrying out an outrage on American soil? While what we are accustomed to thinking of as the Tehran theocracy is no monolith, and a rogue operation is possible, what urgent motive could there be to strike the US and the Saudis now? Read more

You do not need to believe that Yulia Tymoshenko is an angel, to find the news of her seven-year prison sentence deeply depressing. The imprisonment of the former prime minister of Ukraine suggests that the high hopes of the Orange Revolution of 2004 have now dwindled away – and Ukraine is relapsing into crooked authoritarianism. The debate will now begin on “Who lost Ukraine?” Read more

 

Welcome to our continuing coverage of the eurozone crisis. All times are London time. This post should update every few minutes, but it may take longer on mobile devices. By John Aglionby and David Crouch on the world news desk in London, with contributions from FT correspondents around the world.

José Manuel Barroso, the European Commission president, has set out his bank recapitalisation plans, while the temperature is rising for Silvio Berlusconi after he lost a parliamentary vote last night, and Slovakian politicians are plotting their next moves after blocking the expanded eurozone rescue fund. Read more

“I almost left the country thinking they’re moving a little too fast. I never thought I would say that about Myanmar.”

Those are the words of Espen Barth Eide, Norway’s deputy foreign minister, after a trip this week to Burma, which the Norwegians call by its official name of Myanmar. Mr Barth Eide said that political reformers in the country “have the upper hand” and were moving quickly to try to consolidate their position before there was a counter-offensive from hardliners. “The danger is not that it’s not sincere,” he said of the push to open up the political process, “but that the counter forces will set in.” Read more

Slovakian PM Radicova listens to the leader of the Freedom and Solidarity Party Sulik. Credit: Petr Josek/Reuters Welcome to our continuing coverage of the eurozone crisis. All times are London time. By Esther Bintliff and John Aglionby on the world news desk in London, with contributions from FT correspondents around the world.

Today’s main events are in Greece – where the troika published a long-anticipated statement, and in Bratislava, where the Slovakian parliament is voting on whether to back the expanded eurozone rescue fund, the EFSF.

21.38: As we close up for the day, a markets update. The S&P 500 closed flat at 1,195.54 as investors remained cautious after the delay in the vote to expand the rescue package. The euro surrendered all gains and changed little against the dollar at $1.3642. That’s all from us.

21.30: Here is the latest FT story and Alphaville blog post.

21.20: Slovakia’s government has lost a confidence vote on a plan to bolster the EFSF rescue fund, toppling the government. But it is expected that the package will go through in a later vote with help from the opposition. Smer, the largest opposition party, said it would support the changes in a second vote. A total of 55 lawmakers of the 124 present backed the motion, falling short of the required majority of 76.

19.30: We’re going to take a little break on the blog now – but we’ll be sure to update you when (if?) the Slovak deputies vote. In the meantime, thanks for reading, and for all your comments! You can follow our coverage at ft.com and of course on twitter, @ftworldnews

19.20: European authorities plan to set a higher-than-expected capital threshold for the region’s banks and give them six to nine months to achieve that level or face government recapitalisations under the auspices of the eurozone’s €440bn rescue fund, senior regulators have told the FT. Patrick Jenkins in London, Ralph Atkins in Frankfurt and Peter Spiegel in Brussels report:

The European Banking Authority’s board of supervisors has approved in principle the idea that banks should be made to raise their core tier one capital ratios – the key measure of financial strength – to 9 per cent, well beyond the current expections of banks and analysts, even after absorbing writedowns on the value of their sovereign debt holdings.

Officials cautioned, however, that the 9 per cent threshold – which could see dozens of banks forced to raise a combined €275bn, according to Morgan Stanley estimates – is still being debated in national capitals and in Brussels.

Some senior officials at the European Commission, which is due to unveil its own plan for bank recapitalisations, support the higher levels and could announce their backing as early as on Wednesday.

Full story.

 Read more

By Gideon Rachman

Recep Tayyip Erdogan’s admirers stretch from the Arab street to the western salon. In the Middle East, the Turkish prime minister is regarded as a courageous champion of the Palestinians. Many western intellectuals also admire Mr Erdogan, believing he has made Turkey a model for an Arab world in turmoil.

Today, the Financial Times launches a three-day series looking at the growth of the cyber industrial complex. Joseph Menn, who writes about tech security and privacy from the San Francisco bureau, looks at the fast-growing start-ups in the sector — and the establishment defence groups that are swallowing them up. Check out our interative guide to M&A in the sector, and read about how hackers are going legit.
On Tuesday Joe will look at what an attack on the US grid would look like, while Vint Cerf, one of the founders of the internet, explains what he would do differently if he could start over from scratch. The third and final part of the series looks at the world of China’s secret cyber militias and whether global powers will ever agree on a treaty to govern internet warfare.

 Read more

Egypt’s rulers are making a dangerous mess of the political transition. Long before the latest violence against Christian demonstrators – which left 24 people dead on Sunday night in Cairo – the military council which ousted Hosni Mubarak was losing the confidence of many of the activists who had seen it as their saviour.

On the surface, Monday’s violence was a reflection of the sectarian tensions that have flared up since the fall of the Mubarak regime, as attacks on churches by ultraconservative Muslims have escalated.

But they quickly turned into a condemnation of the military council ruling the country since the toppling of Mr Mubarak – and the Christian protesters were joined by Muslims. Read more

Something has always puzzled me about Amsterdam’s famous bikes. While cyclists in London often ride flashy, modern bicycles, the cyclists of Amsterdam seem to favour old, black boneshakers – often without gears.

I had thought that this might be some sort of retro fashion statement. But – chatting to students in Amsterdam – I discovered that the real explanation is crime. Apparently, bicycle-theft is so common that it is pointless having an expensive bike in Amsterdam. Instead, if you need a bike, you simply buy one for 10-15 euros from a thief and/or junkie. Then, when its stolen, you buy another one. Read more

By Lina Saigol

Steve Jobs: Hero of the Arab spring. Or so say the tweeting foot soldiers of the unrest sweeping the region.

Their (somewhat tenuous) accolade is thanks to the biological father of the visionary co-founder and former chief executive of Apple who died on Wednesday, aged 56, being Syrian.

Abdel-Fattah Jandali, 81, was born in Homs, Syria’s third largest city and epicentre of the seven-month uprising against Bashar al-Assad’s regime.

A former professor of political science, Mr Jandali put Mr Jobs up for adoption because his girlfriend’s father was extremely conservative and would not let him marry her. Read more

There is so much focus on whether Germany will “do the right thing” on the euro-crisis that it is easy to forget that there are other big creditor nations in the euro-zone whose actions also matter a lot. Take the Netherlands: yesterday the Dutch parliament did the “right thing” by voting to approve expanded powers and money for the EFSF, the European bail-out fund. But that famous “Dutch tolerance” seems to be nearing snapping point on the euro. Last night, I had dinner with some Dutch decisionmakers in Amsterdam. This is what they said. Read more

Jean-Claude Trichet. Image by Getty

Welcome to our continuing coverage of the eurozone crisis.

All times are London time.

Curated by John Aglionby and David Crouch on the world news desk in London, with contributions from FT correspondents around the world – and today a special focus from Money Supply’s Claire Jones on the last press conference by Jean-Claude Trichet as president of the European Central Bank.

19.09. We are wrapping up the live blog in London. Thanks for reading.  You can continue to follow our eurozone coverage at www.ft.com/world and on twitter at @ftworldnews

18.49 So what do analysts make of Mr Trichet’s record? He received a mixed score in an FT poll.

Gerard Lyons at Standard Chartered gives him five out of ten:

Jean-Claude Trichet has stuck to the mandate. But he should have taken a far broader view. He missed the crisis and he shouldn’t have raised rates this year

 Read more

Ouch. The International Monetary Fund can’t be happy (and, rumours have it, are seriously unhappy) with the suggestion and then rapid retraction from the head of its Europe department that it could intervene to buy sovereign bonds – presumably Italian and Spanish – to help the eurozone debt crisis. It would have had to do this via eurozone governments in any case as the IMF can’t intervene directly in markets, which would have been an odd way of going about things.

But a couple of other things Mr Borges said, or were reported as saying, were more interesting: Read more

 

Welcome to our continuing 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 live blog now but we’ll be back tomorrow for more fun and games – including, notably, the European Central Bank’s rate announcement and the swansong press conference of Jean-Claude Trichet. In the meantime, do follow us on twitter – we’re @ftworldnews – and of course at ft.com

19.15: How does one go about recapitalising a continent’s banks? Patrick Jenkins, the FT’s banking editor, and Gerrit Weismann, correspondent in Berlin, have put their heads together and come up with a very nice Q&A, which tells you how big the hole is, how recapitalisation might happen and what type of capital will be raised:

Consensus is now building in the markets that a European form of the Troubled Assets Relief Programme, or Tarp, that underpinned mandatory US bank recapitalisations in the wake of the 2008 crisis, is the best way to restore confidence…

 Read more

At least one newspaper in China has finally come out in strong support of pro-democracy demonstrations and mass sit-ins. An opinion piece in the official China Daily objected to what it called a “blackout imposed by major news media” of the growing protest movement.

The country being so criticised is not, of course, China.

Rather, it is the US, the latest leg of the global revolution, where news of the Occupy Wall Street movement has allegedly been suppressed. Read more

Welcome to our continuing 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.

 

14.44: We’re now handing over to our colleagues on Money Supply, who are  liveblogging the testimony of Ben Bernanke, US Federal Reserve chairman, before Congress. Thanks for reading today and we’ll be back soon.

14.37: A quick round-up of today’s events:

  • Eurozone finance ministers postponed the disbursement of the next tranche of Greece’s bailout money until November
  • However, the Eurogroup also indicated they were preparing to paper over Greece’s failure to meet international lenders’ mandated budget targets for 2011, saying they would now evaluate Athens’ performance based on goals that combine both this year’s and next year’s finances
  • Jean-Claude Juncker confirmed that the eurogroup will review the losses imposed on private sector bondholders (mainly banks) as part of the Greek bailout agreed in July. Last week, the FT reported that as many as seven of the eurozone members wanted private creditors to swallow a bigger writedown on their Greek bondholdings
  • The French and Belgian governments stepped in to stem investor panic on Tuesday by saying they would guarantee loans made by Dexia, amid fears of a funding crisis at the Franco-Belgian bank
  • Shares in Deutsche Bank fell after it said it was going to take an approximately €250m impairment charge on its Greek sovereign debt holdings
  • Ireland’s central bank downgraded its growth forecasts for Ireland in 2012 (see our 13.15 update) while upgrading its forecast for 2011

 Read more

By Gideon Rachman

The defining geopolitical drama of the next century will be the battle for power and influence between China and America. That emerging struggle is already posing awkward choices for Asian countries, caught between the two global giants.

At the end of August, I wrote a column headlined – “2011, the year of global indignation“. I suggested that there was a global mood of anti-elite anger, linking outbreaks of popular protest in countries as different as Egypt, India, Chile, China, Israel, Greece and Spain. It is Spain and France that gave birth to the movement, known as the indignados (the indignant).  I also wrote, however, that there was “one striking exception to the this pattern – the US.” Perhaps I spoke too soon. The arrest of more than 700 anti Wall Street protesters in New York - and the possibility that similar protests could spread to other cities in the US - means that the wave of global unrest has now arrived on America’s shores. The whole thing has a whiff of 1968 about it. Read more

Welcome to our continuing 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. This post should update automatically every few minutes, although it may take longer on mobile devices.

01.11: As we close the blog this evening, here are some highlights from the latest FT story written after the close of the meeting:

  • Jean-Claude Juncker, the Luxembourg prime minister who heads the group of eurozone finance ministers, said officials remained steadfast in preventing a Greek default and signalled a new €109bn bail-out for Greece.
  • A deal was reached to accommodate Finland’s demand that it get Greek collateral in exchange for participating in the new bail-out.
  • For the first time, eurozone finance ministers discussed increasing the firepower of the €440bn bail-out fund.

 Read more

It is often interesting to return a country you once knew well. In the mid 1990s I used to visit Singapore regularly as The Economist‘s correspondent for South-East Asia. I even managed inadvertently to provoke a row between the magazine and the city state that led to The Economist briefly having its circulation restricted.

More than fifteen years later, a lot hasn’t changed in Singapore. The People’s Action Party are still in power, as they have been since independence. Eating and shopping are still the country’s most popular pastimes. Lee Kuan Yew, Singapore’s founding father is still alive, and still dispensing pearls of wisdom that are quoted reverentially in the Straits Times. The place is still spotless and prosperous. The big regional story is still the rise of China. Read more