Saturday, March 31, 2012

Reuters: Market News: UPDATE 2-S.Korea March exports fall; U.S. shipments up on FTA

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UPDATE 2-S.Korea March exports fall; U.S. shipments up on FTA
Apr 1st 2012, 03:40

Sat Mar 31, 2012 11:40pm EDT

* March exports -1.4 pct yr/yr (Reuters poll: +0.7 pct

* Q1 exports +3.0 pct yr/yr vs +9.0 pct in Q4 2011

* FTA with U.S. helps, but exports to EU and China weak

By Choonsik Yoo

SEOUL, April 1 (Reuters) - South Korean exports in March fell 1.4 percent from a year ago, missing a consensus forecast for a small gain and adding to questions about the strength of a global recovery even with a boost to shipments in the first month of a landmark free trade pact with the United States.

Shipments to the United States jumped nearly 28 percent thanks to the free trade agreement, but weak sales to the other big markets such as China and the European Union clouded prospects, data published on Sunday showed.

The median forecast from a Reuters survey of 14 economists was for exports to expand by 0.7 percent in March from a year earlier. Forecasts ranged from a fall of 5.1 percent to a rise of 8.3 percent.

"Exports will remain weak at least through the second quarter, although there won't be a collapsing pattern in exports because we see some signs of bottoming in the Chinese economy and in the euro-zone crisis," said Lee Sang-jae, economist at Hyundai Securities.

Exports reached $47.36 billion in March while imports fell 1.2 percent to $45.03 billion, producing a surplus of $2.33 billion. The trade balance had swung to a surplus of $1.52 billion in February from a $2.23 billion deficit in January.

Exports to China, South Korea's biggest market taking in about one-quarter of shipments, rose just 0.7 percent in March over a year ago while exports to the European Union plunged 20.3 percent, the Ministry of Knowledge Economy said.

FREE TRADE AGREEMENT

Shipments to the United States jumped 27.9 percent as a free trade agreement removed import tariffs on many items from the middle of March when it took effect. The EU and the U.S. each buy about 10 percent of South Korea's exports.

Lee said the weak overall exports despite a jump in sales to the U.S. showed the broad global demand remained depressed.

"The effect from the free trade agreement has been widely expected and the numbers in general show the world economy was not recovering fast just year, but the world economy is going through the bottom," said Lee.

South Korea and the United States have said the controversial trade pact would boost exports for both countries by making their products more competitive.

PROVISIONAL DATA

The March data, which is provisional and may be revised later in the month, brought the country's exports for the first quarter to $134.96 billion, up 3.0 percent from a year earlier.

Export growth from South Korea, Asia's fourth-largest economy, slowed sharply to an annual 9.0 percent in the final quarter of 2011 from 21.4 percent in the third quarter as the European debt crisis hit demand.

The government has forecast exports in the whole of this year would suffer from the slow recovery in the U.S. and the euro zone crisis, growing about 7 percent after a 19 percent gain in 2011 and 28 percent in 2010.

Although private consumption generates slightly more than half of South Korea's annual gross domestic product, exports remain a driver of growth as heavy household debt and slow job growth keep weighing down consumer spending.

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Reuters: Market News: Mazda to recall more than 62,000 vehicles in China

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Mazda to recall more than 62,000 vehicles in China
Apr 1st 2012, 03:43

Sat Mar 31, 2012 11:43pm EDT

BEIJINGApril 1 (Reuters) - Mazda Motor and its joint venture partners in China will recall more than 62,000 vehicles from Sunday to fix problems with anti-lock braking systems that could cause false warnings, China's quality regulator said.

The three-party joint venture with Ford Motor and Chongqing Changan Automobile will recall 58,949 Mondeo sedans and 3,496 S-Max vehicles and replace problematic parts, China's General Administration of Quality Supervision, Inspection and Quarantine said on its website.

The move comes on the heels of Mazda recalling 16,857 vehicles in September 2010 because of a similar problem.

Joint venture executives could not be reached for comment on Sunday.

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Reuters: Market News: China factory output falls for fifth month-HSBC PMI

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China factory output falls for fifth month-HSBC PMI
Apr 1st 2012, 02:35

BEIJING, April 1 | Sat Mar 31, 2012 10:35pm EDT

BEIJING, April 1 (Reuters) - China's factory slowdown worsened in March as output fell for a fifth consecutive month and manufacturers received fewer orders, a private survey showed, building the case for Beijing to take new policy steps to shore up economic growth.

HSBC said on Sunday its final Purchasing Managers' Index (PMI) fell to 48.3 in March from 49.6 in February, and largely in line with HSBC's Flash PMI reading of 48.1 for March.

The sub-index for manufacturing output slid to 47.3 in March from February's 50.2, the second-lowest reading since March 2009 after November's trough of 46.1.

"Final PMI results confirm a further slowdown of growth momentum, weighed by weakening new export orders," said Qu Hongbin, an economist at HSBC. "Weaker export growth is likely to prompt further easing measures."

Survey results showed both foreign and domestic demand were poor. Sub-indices for new orders and new export orders languished below the 50-point level that separates expansion from contraction in activity.

It was the fifth consecutive month that new orders shrank. New export orders rebounded from an eight-month low in February but still contracted in March.

Worryingly, the survey also showed factory inflation quickened to stay above 50 points despite slower production that shrank factory employment to a three-year low.

The gloomy PMI reading mirrors the decline in China's actual factory output, where growth slumped to a 2-1/2-year low of 11.4 percent in January and February.

Some economists have warned against reading too much into China's January and February economic data because they are distorted by the Lunar New Year holiday, but HSBC noted its average PMI readings in the first quarter were the worst in three years.

Even so, some analysts are hopeful China's economy will speed up after March if Beijing further loosens monetary policy and unveils more state spending.

Qu expects China to further reduce the amount of cash banks must hold as reserves before the end of June by cutting the reserve requirement ratio by 100 basis points.

Beijing could also lower taxes and raise fiscal spending to boost activity, he said.

Below are some notable findings from the PMI report compiled by Markit:

-- Factories said rising production costs were mainly driven by higher raw material prices and fuel costs.

-- But manufacturers said they have not passed on higher costs to their customers. Instead, they said they have resorted to cutting prices to attract or retain clients as their output prices stayed below 50 points for the fifth straight month.

-- Factories have shed jobs in three of the last four months with manufacturers citing slowing business, employee resignations and company restructuring as reasons.

-- Suppliers' delivery times lengthened in March due to transportation problems, supply bottlenecks and labour shortages.

For more news on China's economy, see

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Reuters: Market News: INSIGHT-Lifting the veil on Afghanistan's female addicts

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INSIGHT-Lifting the veil on Afghanistan's female addicts
Apr 1st 2012, 01:24

By Amie Ferris-Rotman

KABUL, April 1 | Sat Mar 31, 2012 9:24pm EDT

KABUL, April 1 (Reuters) - Anita lifted the sky-blue burqa from her face, revealing glazed eyes and cracked lips from years of smoking opium, and touched her saggy belly, still round from giving birth to her seventh child a month ago.

"I can't give breast milk to my baby," said the 32-year-old Anita, who like other women interviewed for this story, declined to give her full name. "I'm scared he'll get addicted

She was huddled with other women at the U.N.-funded Nejat drug rehabilitation center in the old quarter of Kabul, having sneaked out of her home to avoid being stopped by her husband from going outside alone.

With little funding and no access to substitution drugs such as methadone, treatment is rudimentary at Nejat for a problem that is growing in a dirt-poor country riven by conflicts for more than three decades.

Afghanistan is the source for more than 90 percent of the world's opium, which is used to make heroin, and more of it is being grown than ever before.

While it is not uncommon to see men shooting up along the banks of the dried of up Kabul riverbed in broad daylight, women in the ultra-conservative culture of Muslim Afghanistan are expected to stay out of public view for the most part. They often have to seek permission from a male relative or husband to leave their home, and when they do they are encased in the head-to-toe burqa.

"I am not allowed to leave home for medical checks. What can I do? I am a woman," Anita said matter of factly.

Like many of Afghanistan's female drug users, Anita picked up the habit from her husband.

Like other women interviewed for this story, Anita asked that only her first name be used. Shrouded in stigma, female drug users is a topic that is almost never mentioned in Afghanistan.

They agreed to tell their stories to a reporter only through an intermediary they trusted.

CONSUMPTION ON RISE

Opium poppy cultivation in a country that has been growing the plant for a thousand years increased 7 percent in 2011 from the year before, due to a spike in prices and worsening security, according to a survey sponsored by the United Nations Office on Drugs and Crime.

In 2011, the farm-gate value of opium production more than doubled from 2010 to $1.4 billion and now accounts for 15 percent of the Afghan economy, the UNODC says.

Opiate consumption in Afghanistan, where it has long been a medication but in recent years has been used increasingly for recreation, is also on a sharp rise. The UNODC says Afghanistan has around one million heroin and opium addicts out of a population of 30 million, making it the world's top user per capita.

No estimates are available on how many women are addicted to opium or heroin. Nejat estimates around 60,000 women in Afghanistan regularly take illegal drugs, including hashish and marijuana.

"There has been a definite increase amongst women drug users over the last decade," said Arman Raoufi, director of harm reduction for women at Nejat.

Smoking opium costs around 200 Afghanis a day ($4), a very expensive habit in a country where a third live beneath the poverty line. Women send their children to collect scrap and bottles to help pay for their habit, or resort to begging, extending a hand to cars from beneath their burqa on busy streets when their husbands have left home.

"My husband took on a second wife and began to ignore me, so I started to smoke his powder (opium) and now must beg," said Fauzia, 30, a petite mother of five sitting in the corner of Nejat, her embroidered floral slippers poking out from under her baggy trousers. She said she was terrified that her husband and male relatives might discover she was seeking treatment on her own at the center.

Treatment options are sorely limited. A pilot project launched two years ago by Medecins du Monde, which gives methadone to drug addicts, is the only one in the country.

The National AIDS Control Programme (NACP) wants to roll it out across the country, but the Ministry of Counter-narcotics has objected, saying it would introduce yet another narcotic onto the black market.

IRANIAN CONNECTION

With her five-year-old son tugging on her unwashed burqa, 30-year-old Najia said she has smoked opium for nine years.

"It is so hard for me. I have kids. I'm poor. I'm not able to work -- my husband won't allow me," said the raven-haired mother of four.

Najia said she picked up the habit from her husband after he returned from his job as a labourer in neighbouring Iran.

Raoufi at the Nejat center says the return of migrant workers and refugees, who fled to Iran and Pakistan during the Soviet occupation of the 1980s, and the bloody civil war and Taliban rule that followed, is the main reason behind the rise in female drug addicts.

Increased street prostitution since the fall of the Taliban, which policed the trade more rigorously than the government does today, has also contributed, he said.

Iran has the second highest heroin abuse rate in the world after Afghanistan, according to UNODC. Afghan addicts among the 1 million refugees in Iran have become such an issue Tehran has started to expel them.

"Our relatively open borders are not doing us any favours," said Feda Mohammad Paikan, who heads the NACP working under the Afghan Ministry of Public Health. "Most addicts get hooked in Iran, and many of these men have wives."

PRISONERS OF HABIT

Afghanistan's female narcotics problem is now filling the country's largest women's prison, Badam Bagh or "Almond Orchard", on the outskirts of Kabul.

Of its 164 inmates, 64 are opium and heroin users, double what it was when the clinic started in 2008, said clinic doctor, Hanifa Amiri.

"There are simply more drugs out there available to women now," she said, waving a medical-gloved hand over a prison courtyard, where burqa-clad female relatives were bringing gifts of pomegranates and flat naan bread for the inmates.

With cropped black hair, a leather jacket and a henna tattoo of a scorpion on her hand, inmate Madina looks nothing like an ordinary Afghan woman.

One of seven injecting heroin users in Badam Bagh, she lives with her teenage son and daughter in prison, where she has been for seven years since she killed her husband.

She said she murdered him after he forbade her from prostituting herself to support her habit, said Madina, the only inmate at the prison who agreed to speak to Reuters.

"I would love to give it all up, but how am I meant to, as a woman?" the 37-year-old mother of two said as she scratched at the scabs on her arm, dark red from recent use.

She supports her habit by selling handmade sexual aid tools -- stuffing compacted wool into condoms -- to other inmates, several of whom have developed lesbian relationships.

HIV and AIDS is becoming a more serious issue, largely spurred by injecting drug use, and could reach the general population if not tackled properly.

A new strategy being rolled out by the health ministry to target more women in counseling and HIV testing is being met by opposition from the strong conservative forces in Afghan society.

"HIV and drug use are viewed as evil in Muslim society, and even more so for women," said specialist Mohammad Hahn Heddait, who works at the infectious diseases hospital under the ministry of health.

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Reuters: Market News: WRAPUP 1-Fighting continues in Syria as West, opposition to meet

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WRAPUP 1-Fighting continues in Syria as West, opposition to meet
Apr 1st 2012, 00:28

Sat Mar 31, 2012 8:28pm EDT

* Opponents say will not disarm until troops withdraw

* "Regime's actions do not leave space for hope" - Erdogan

* Annan to brief Security Council on Monday

By Khaled Yacoub Oweis

ISTANBUL, April 1 (Reuters) - Syrians trying to topple President Bashar al-Assad meet their Western backers on Sunday while fighting has continued despite the Syrian government saying the year-long revolt is over.

The political opposition remains divided and has not yet formally accepted a peace plan brokered by United Nations-Arab League special envoy Kofi Annan.

Prospects of Western-led military intervention are close to zero, although Saudi Foreign Minister Prince Saud al-Faisal renewed calls on Saturday to arm the Syrian opposition, describing it as a "duty".

Assad, whose foreign ministry has declared that the revolt has been crushed, has said he accepts Annan's plan but has to keep security forces in cities to maintain security.

His opponents say they will not put down their arms until his troops and heavy weapons withdraw.

Opposition activists said security forces killed 25 Syrians on Saturday in shelling and raids on opposition areas.

A protest singer in Kafr Ruma was killed when his house was raided. A young man and his sister were shot dead when state forces stormed their village, and a man died of gunshot wounds inflicted during a protest in Damascus.

In a television address on the eve of the "Friends of Syria" meeting in Istanbul, Turkish Prime Minister Tayyip Erdogan sounded pessimistic about the chances of Assad complying with the peace plan.

"We want the attacks on civilians to stop and legitimate demands of the Syrian people to be met. Unfortunately, the Assad regime's actions do not leave any space for hope," Erdogan said.

The conference was to bring together Assad's opponents and the foreign ministers of allied Western powers, including U.S. Secretary of State Hillary Clinton.

The Annan proposal for ending what began in March 2011 as peaceful protests against Assad's rule says the army must stop violence immediately and be the first to withdraw its forces. It does not call on Assad to step down, as the opposition and its Western and Arab supporters have demanded.

Washington and Gulf Arab states, who believe Assad is simply playing for time, urged Annan to set a timeline for "next steps" if there was no ceasefire as his plan requires.

"Given the urgency of the joint envoy's mission, (U.S. and Gulf ministers) urged the joint envoy to determine a timeline for next steps if the killing continues," a statement said.

Burhan Ghalioun, president of the opposition Syrian National Council (SNC) said: "We expect immediate action and bold decisions to put an end to these crimes committed daily against the Syrian people."

"The Friends of Syria and us are preparing to save the Syrian people from real annihilation."

CEASEFIRE

Ghalioun met Erdogan and senior diplomats in Istanbul on Saturday. He said they did not expect "the Assad regime will implement any item in the Annan plan and the international community will have to go the Security Council very soon, maybe after days".

The conference is expected to seek a clear endorsement of the plan from the SNC and demand that Assad order an immediate ceasefire and open two-hour daily windows for humanitarian aid.

It is not expected to recognise the SNC as the sole legitimate government of Syria, or to back arming the rebels - though Ghalioun said he hoped for support for the Free Syrian Army.

If Assad fails to keep his word, Annan will have to decide whether to tell the United Nations he has failed to make peace through a "Syrian-led process", diplomats said.

Annan will brief the Security Council on Monday on whether he sees any progress in implementing his six-point plan.

The next steps could include a return to the Security Council for a binding resolution, with increased pressure on Assad's allies Russia and China, which have endorsed Annan's mission, to get tough with Damascus.

Russia warned that it was not up to the "self-styled Friends of Syria" to decide whether Assad is keeping his word.

The U.N. peacekeeping department will send a team to Damascus soon to begin contingency planning for a possible observer mission to monitor any eventual ceasefire, Western diplomats have said.

The idea, which Annan has suggested to the Syrian government, is to have a mission of 200 to 250 observers who would be borrowed from other U.N. missions already deployed in the Middle East and Africa, envoys said.

A spokesman for the U.N. Department of Peacekeeping Operations did not have an immediate comment.

REVOLT "OVER"

More than 9,000 people have been killed by Assad's forces during the revolt, according to the United Nations, while Damascus says it has lost about 3,000 security force members.

Despite continuing violence, Damascus claims the upper hand.

"The battle to topple the state is over," Syrian Foreign Ministry spokesman Jihad al-Makdissi told Syria TV late on Friday. He said Annan had acknowledged the government's right to respond to armed violence during the ceasefire phase of the peace plan.

"When security can be maintained for civilians, the army will leave, he said. "This is a Syrian matter."

A rebel spokesman, Lieutenant Colonel Qassim Saad al-Din, told Reuters by telephone from Homs: "We don't have a problem with the ceasefire. As soon as they remove their armoured vehicles, the Free Syrian Army will not fire a single shot."

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Reuters: Market News: UPDATE 1-US Fed's Kocherlakota sees 2.3 pct inflation in 2013

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UPDATE 1-US Fed's Kocherlakota sees 2.3 pct inflation in 2013
Apr 1st 2012, 00:09

Sat Mar 31, 2012 8:09pm EDT

By Ann Saphir

EVANSTON, Ill., March 31 (Reuters) - U.S. inflation will be above the Federal Reserve's 2 percent target next year, Minneapolis Fed President Narayana Kocherlakota said on Saturday, suggesting he sees pressure building for the central bank to lift interest rates.

"I'm expecting inflation to be 2 percent this year, and 2.3 percent next year," Kocherlakota told the Midwest Economics Association's annual meeting.

The Fed has kept U.S. short-term borrowing costs near zero for more than three years, and its policy-setting panel has said it expects to need to keep them there through late 2014.

Kocherlakota, a monetary policy hawk, has said he believes the Fed should act to raise rates well before then. But his view is in the minority at the Fed, where most see inflation at or below the target in coming years, based on projections issued in January.

Fed Chairman Ben Bernanke earlier this week said the U.S. economy would need to grow more quickly to ensure continued progress in reducing the unemployment rate, which now stands at 8.3 percent. Although he did not suggest a further round of bond buying was imminent, stocks rose on that very hope.

Kocherlakota's speech on Saturday suggested such hope is misplaced, even if the Fed goes forward with more easing.

Further monetary stimulus is powerless to reduce joblessness much more on its own without simultaneous hiring subsidies or other non-monetary stimulus, Kocherlakota said.

That's because monetary policy can help reverse job losses that come from shocks that force households to pull back on spending, but not from so-called labor demand shock in which firms pull back on hiring due to uncertainty or tight credit conditions, Kocherlakota added.

Because it is labor demand shock that is currently crippling the economy, pushing borrowing costs lower would not boost jobs, he said.

The speech was based on a paper he first presented on March 20.

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Reuters: Market News: U.S. Fed's Kocherlakota sees 2.3 pct inflation in 2013

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U.S. Fed's Kocherlakota sees 2.3 pct inflation in 2013
Mar 31st 2012, 23:42

By Ann Saphir

EVANSTON, Ill., March 31 | Sat Mar 31, 2012 7:42pm EDT

EVANSTON, Ill., March 31 (Reuters) - U.S. inflation will be above the Federal Reserve's 2 percent target next year, Minneapolis Fed President Narayana Kocherlakota predicted on Saturday, suggesting he sees pressure building for the central bank to lift interest rates.

"I'm expecting inflation to be 2 percent this year, and 2.3 percent next year," Kocherlakota told the Midwest Economics Association's annual meeting.

The Fed has kept U.S. short-term borrowing costs near zero for more than three years, and its policy-setting panel has said it expects to need to keep them there through late 2014.

Kocherlakota, a monetary policy hawk, has said he believes the Fed should act to raise rates well before then.

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Reuters: Market News: Brazil spots new oil leak as safety worries rise

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Brazil spots new oil leak as safety worries rise
Mar 31st 2012, 23:30

Sat Mar 31, 2012 7:30pm EDT

* Leak comes as government widens offshore spill probe

* Spills raise worries over development of reserves

BRASILIA, March 31 (Reuters) - Brazilian authorities identified a small oil leak off the shores of Rio de Janeiro on Saturday, the latest in a series of spills that has raised safety concerns over the development of some of the world's largest petroleum reserves.

The latest oil leak comes days after a Brazilian prosecutor said he is widening a probe into offshore oil operations in the wake of a 3,000-barrel spill in an offshore field run by Chevron in November.

The new leak, which stretches for 1.2 miles (2 km), is estimated at 1,600 liters of oil (14 barrels) and remains far away from the coast, Rio de Janeiro's state Environmental Institute said in a statement. Officials were due to test the oil to try to determine its origin, but the leak is believed to have come from a ship in a sea route heavily transited by oil tankers.

The leak was in the Campos Basin, which extracts about 80 percent of the country's output of more than 2.6 million barrels of oil per day. The area is believed to hold to some of the world's top oil reserves and that has attracted major producers such as Petrobras, Anglo Dutch Shell UK-based BP and Spain's Repsol YPF.

A small leak in Chevron's Frade field two weeks ago led the company to shut down production at the field, which has produced as much as 80,000 barrels per day.

That leak and the November spill prompted criminal charges against the U.S. No 2 oil company, its drilling contractor Transocean and 17 of their employees.

Chevron and Transocean dispute the charges, which have cast a shadow over the development of Brazil's booming oil industry.

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Reuters: Market News: UPDATE 1-Switzerland seeks arrest of German tax collectors

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UPDATE 1-Switzerland seeks arrest of German tax collectors
Mar 31st 2012, 22:14

Sat Mar 31, 2012 6:14pm EDT

By Erik Kirschbaum and Katie Reid

BERLIN/ZURICH, March 31 (Reuters) - Switzerland has issued arrest warrants for three German civil servants, accusing them of industrial espionage for buying the bank details of German tax evaders, the finance ministry of the German state of North Rhine-Westphalia (NRW) said on Saturday.

In the latest chapter of an ugly dispute over tax evasion that has strained ties between the two neighbours, a spokeswoman for the ministry confirmed a report about the arrest warrants due to appear in Sunday's Bild am Sonntag newspaper.

The three Germans, who are tax investigators, could be arrested if they enter Switzerland, the newspaper said.

News of the warrants emerged as the two countries worked over the weekend to salvage a landmark deal on taxing secret offshore accounts, after the main German opposition party, the SPD, said the plan was full of loopholes.

Chancellor Angela Merkel's centre-right coalition needs the backing of SPD-controlled states to push the tax deal through the Bundesrat upper house, but SPD state premiers have said concessions offered by Switzerland do not go far enough.

Switzerland's strict bank secrecy code has helped it build a $2 trillion offshore financial sector, and a pact with Germany would protect this banking tradition in return for a punitive Swiss-levied tax on German-held accounts.

The Swiss have come under intense pressure over the past few years from several countries trying to clamp down on tax evasion - notably the United States - and in Germany's case the strain has already led to a war of words between the Swiss and their northern neighbours.

One Swiss politician likened former German finance minister Peer Steinbrueck to a Nazi after he called for a "carrot and stick" approach to tax havens like Switzerland.

Thomas Mueller, a member of the Swiss centre-right Christian People's Party, said of Steinbrueck at the time: "He reminds me of the generation of Germans from 60 years ago who went through the streets wearing leather coats, boots and (Nazi) arm-bands."

Steinbrueck, who said he had received threatening letters from Switzerland, said the Nazi comparisons were "unacceptable".

GERMAN ESPIONAGE SUSPECTED

In the latest row, some Swiss believe they have already made enough concessions to Germany and should go no further.

"You can assume that we won't vote for the deal under such circumstances," Swiss People's Party politician Hans Kaufmann was quoted as saying in the Swiss daily TagesAnzeiger on Saturday, while a spokesman for the Swiss Bankers Association told the paper the changes only made the agreement worse.

The Swiss attorney general, putting the ball in the German court, issued a blunt statement on Saturday saying "There is a concrete suspicion that specific orders from Germany were issued to use espionage to obtain information from Credit Suisse."

"The attorney general has asked German authorities for assistance."

Hannelore Kraft, state premier of Germany's most populous region, told Bild am Sonntag she was appalled by the warrants.

"It's an outrage," said Kraft, who is seeking re-election in a vote on May 13. "The NRW tax investigators were simply doing their job tracking down German tax dodgers who stashed undeclared money in Swiss banks."

Germany has made several previous efforts to catch wealthy citizens avoiding taxes, often using data on compact discs.

In February 2008, police raided homes and offices in cities across Germany, targeting about 1,000 people in a huge tax evasion probe after the government paid an informant millions of euros for a compact disc holding Liechtenstein bank data.

In 2010 several German states, including NRW, said they had bought compact discs containing Swiss bank data from whistleblowers as part of a drive to flush out tax evaders. That prompted thousands of Germans to declare their financial holdings to avoid risking jail sentences.

DISPUTE WITH USA

The federal government gave state authorities the go-ahead to buy the information even if it was obtained illegally. Germans have an estimated 150 billion Swiss francs ($200 billion) hidden in secret Swiss accounts.

The Swiss are also involved in a long-running tax dispute with the United States, which is investigating 11 banks including Credit Suisse and Julius Baer for helping Americans evade taxes.

Banks are likely to have to pay hefty fines and hand over thousands of client names to end the U.S. investigations, but the issue should not have a big impact on assets as most have already closed the accounts of U.S. offshore clients, after UBS paid $780 million to settle criminal charges in 2009.

One of the best known whistleblowers is former Julius Baer banker Rudolf Elmer, who helped bring the WikiLeaks website to prominence three years ago when he used it to publish client details from Julius Baer to expose tax evasion.

Elmer, who was recently released from Swiss investigative custody over alleged breaches of Swiss bank secrecy laws, ran the Cayman Islands branch of Julius Baer until he was fired in 2002.

Julius Baer, which has denied its Cayman Islands branch was used for tax dodging, has said Elmer waged a personal vendetta against the bank after it refused his demands for compensation following his dismissal.

Last year, Julius Baer paid a fine to close a tax probe by German authorities, who have also raided the offices of Credit Suisse.

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Reuters: Market News: UPDATE 1-Venezuela March inflation 0.9 pct - Chavez

Reuters: Market News
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
UPDATE 1-Venezuela March inflation 0.9 pct - Chavez
Mar 31st 2012, 19:55

Sat Mar 31, 2012 3:55pm EDT

CARACAS, March 31 (Reuters) - Venezuela's consumer prices rose 0.9 percent in March, t he l owest monthly rate in the last four years, P resident Hugo Chavez said on Saturday.

The South American OPEC member had the highest inflation in the Americas last year at 27.6 percent, and economists had expected it to be even higher in 2012 due to a pre-election spending bonanza by Chavez's government.

But officials have sought to combat inflation with new price controls on some basic goods in food, health and other sectors from the end of last year.

"There's good news," Chavez said in comments carried live on state TV. "Inflation for March, which ends today, was less than 1 percent, it was 0.9 percent. We must congratulate those working on this issue, the Central Bank of Venezuela."

The March figure announced by Chavez compared with 1.1 percent inflation in February, and was the lowest since a new price index was introduced in January 2008.

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Reuters: Market News: Dutch minister says to follow IMF on aid to Greece

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Dutch minister says to follow IMF on aid to Greece
Mar 31st 2012, 19:03

ATHENS, March 31 | Sat Mar 31, 2012 3:03pm EDT

ATHENS, March 31 (Reuters) - The Netherlands will not give its share of bailout funds to Greece if the International Monetary Fund deems Athens has failed to keep its pledges and withholds its next tranche of aid, the Dutch finance minister said in a newspaper interview.

The minister, who took a hard line during negotiations on Greece's second, 130 billion euro ($173 billion) bailout earlier this year, has in the past warned the programme remains fraught with risk and that its success depends on Athens' ability to push through reform.

"I will follow the IMF - if it were to say that there is no compliance with the programme and that it can't disburse the next tranche, then we will also withhold our share," Jan Kees de Jager told the Sunday edition of Greece's Kathimerini newspaper, when asked what his country would do if an IMF report on Greece - due in June - was negative.

The Netherlands, one of the few remaining AAA-rated euro zone nations, is providing funds to the Greek bailout as part of a contribution from euro zone states.

De Jager added that he had no doubt Greece would remain within the euro zone.

"I'm sure that Greece will do everything needed to stay in the euro," he said.

"I'm convinced that Greece can stay in the euro zone if Greek politicians show unity, as is the case with the present government, and implement structural reforms and fiscal cuts."

Greeks are due to vote for a new government in elections likely to be held on May 6, replacing a left-right coalition government headed by technocrat Prime Minister Lucas Papademos.

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Reuters: Market News: Venezuela March inflation 0.9 pct - Chavez

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Venezuela March inflation 0.9 pct - Chavez
Mar 31st 2012, 19:16

CARACAS, March 31 | Sat Mar 31, 2012 3:16pm EDT

CARACAS, March 31 (Reuters) - Venezuela's consumer prices rose 0.9 percent in March, down from 1.1 percent the previous month, President Hugo Chavez said on Saturday.

The South American nation had the highest inflation in the Americas last year at 27.6 percent, and economists had expected it to be even higher in 2012 due to a pre-election spending bonanza by Chavez's government.

But officials have sought to combat inflation with new price controls on some basic goods in food, health and other sectors from the end of last year.

"There's good news," Chavez said in comments carried live on state TV. "Inflation for March, which ends today, was less than 1 percent, it was 0.9 percent. We must congratulate those working on this issue, the Central Bank of Venezuela."

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Reuters: Market News: Former Iran negotiator says nuclear deal possible

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Former Iran negotiator says nuclear deal possible
Mar 31st 2012, 17:52

Sat Mar 31, 2012 1:52pm EDT

* Iran, six powers meet next month for nuclear talks

* Mousavian: Iran wants end to nuclear standoff

* Says Iran achieved "break-out" ability in 2002

By Louis Charbonneau

UNITED NATIONS, March 31 (Reuters) - An end to a nearly decade-long nuclear standoff between Iran and major world powers will be possible if the United States and its European allies recognize Tehran's right to enrich uranium, a former Iranian negotiator said in an editorial.

"Talks between Iran and the five permanent members of the U.N. Security Council plus Germany (P5+1), scheduled for next month, provide the best opportunity to break the nine-year deadlock over Iran's nuclear program," Hossein Mousavian, Iran's former chief nuclear negotiator, wrote in an editorial in the Boston Globe.

Mousavian, now a visiting scholar at Princeton University in New Jersey, had been seen as a moderate when in the Iranian government. Although he is not currently a policymaker, such public presentations of Iranian thinking is rare.

Iran says its nuclear program is peaceful and rejects U.S. and European allegations that it is secretly amassing the capability to produce atomic weapons. Iran has rejected Security Council demands that it halt enrichment and other sensitive nuclear work, saying it has a sovereign right to atomic energy.

This has led to four rounds of increasingly stringent U.N. Security Council sanctions, mostly focusing on its nuclear and missile industries, but also targeting some financial institutions, a few subsidiaries of its major shipping firm, and companies linked to the Islamic Revolutionary Guard Corps.

In recent months there has been increased speculation about possible Israeli air strikes on Iran's nuclear sites - which some analysts fear could spark a Middle East war.

For the talks, expected to take place in mid-April, to open the door to a resolution of the standoff with Iran, Mousavian said the United States and its European allies must make clear that war and coercion are not the only options.

They should seek enhanced engagement with Tehran, as U.S. President Barack Obama has repeatedly called for.

"This could work - since 2003, Iran has been looking for a viable and durable solution to the diplomatic standoff," wrote Mousavian.

POLITICALLY MOTIVATED CHARGES

Mousavian was Iran's chief nuclear negotiator from 2003 to 2005 before conservative President Mahmoud Ahmadinejad took over from his reformist predecessor Mohammad Khatami. According to Western envoys familiar with Mousavian, he appeared at the time to be genuinely interested in reaching a deal with the West.

After he was removed from the nuclear negotiating team, Mousavian was arrested and briefly jailed in 2007 on accusations of espionage. He was acquitted of that charge, which could have carried the death penalty, but was found guilty of "propaganda against the system."

Analysts and diplomats said the charges against Mousavian were really a reflection of an internal Iranian dispute over how to handle Iran's atomic dispute with the West. Some Iranians favor the moderate line adopted by Mousavian while others have backed Ahmadinejad's more confrontational approach.

Mousavian writes that if a deal that is acceptable to both parties is to be reached, the two sides' "bottom lines" should be identified.

"For Iran, this is the recognition of its legitimate right to create a nuclear program - including enrichment - and a backing off by the P5+1 from its zero-enrichment position."

"For the P5+1, it is an absolute prohibition on Iran from creating a nuclear bomb, and having Iran clear up ambiguities in its nuclear program to the satisfaction of the International Atomic Energy Agency," Mousavian writes.

The West also needs to abandon calls for regime change and accept that "crippling sanctions, covert actions, and military strikes might slow down Iran's nuclear program but will not stop it."

"In fact, it is too late to demand that Iran suspend enrichment activities," Mousavian writes. "It mastered enrichment technology and reached break-out capability in 2002 and continues to steadily improve its uranium-enrichment capabilities."

The so-called "break-out" capability refers to the ability of a country to construct a nuclear weapon.

A U.S. think tank, the Institute for Science and International Security (ISIS), has said that capping Iranian uranium enrichment at 5 percent purity level compared with the 90 percent needed for a bomb could form part of an interim deal that would give time for more substantial negotiations.

This and other priority measures would "limit Iran's capability to break out quickly," ISIS said in a report.

Among the things the West should offer to Iran is a package that includes recognition of its nuclear rights, ending sanctions, and "normalization of Iran's nuclear file." In return, Iran should offer the IAEA full transparency and permit the most intrusive inspections possible.

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Reuters: Market News: UPDATE 1-Italy's Monti seeks Chinese investment, says reforms working

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Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
UPDATE 1-Italy's Monti seeks Chinese investment, says reforms working
Mar 31st 2012, 17:44

Sat Mar 31, 2012 1:44pm EDT

* Monti says worst of euro zone debt crisis apparently over

* Says Italy's labour rigidity deterred Chinese from investing

* Bank damaged during anti-austerity demonstration in Milan

By Michael Martina

BEIJING, March 31 (Reuters) - Prime Minister Mario Monti urged China on Saturday to step up investment in Italy and tried to reassure Beijing that the euro zone debt crisis was close to resolution and tough economic reforms passed by his government were working.

Speaking after meetings with officials including Premier Wen Jiabao and the head of the China Investment Corporation (CIC), Lou Jiwei, Monti said there had been clear interest in greater cooperation but he had no concrete measures to announce.

"I don't want to be too ambitious but my hope is to generate some new enthusiam on Italy," he told reporters.

"We underlined one of the aspects which in our judgment should be reinforced, the aspect of investment," he said.

On the last leg of a tour that included Kazakhstan, South Korea and Japan, Monti reiterated remarks he had made in Tokyo - that the worst of the euro zone debt crisis appeared to have been resolved.

"No one can say the euro zone crisis is totally over, and I think it would also be a dangerous attitude for Italian policy if we were to come into a state of complacency," he told reporters.

But he said the crisis was "virtually over" and fears that Italy could become a new flashpoint had eased since the turmoil last year which swept away Prime Minister Silvio Berlusconi and brought Monti's technocrat government to power.

"This so far has not happened, and I believe it will not happen. So allow me no complacency at all, but some relief on this point," he said.

He said his government was aware of the sacrifices being demanded of Italians through spending cuts and tax rises and admitted that some of the measures, in the middle of a recession expected to last all year at least, were "rough".

"I always have to make clear to the Italian people that, although it's less obvious, it would be much worse for their families to end up like Greece," he said.

DEMONSTRATION

Monti's unelected government has passed a series of painful spending cuts, tax rises and pension reforms to help cut Italy's huge public debt but has run into difficulties after an initial honeymoon period in which market confidence improved sharply.

He faces a delicate balancing act as he tries to persuade international investors that his drive to repair public finances is on track while calming mounting discontent at austerity measures which have started to hit ordinary Italians hard.

On Saturday, several thousand people took part in a protest march in Italy's financial capital Milan, where an office of Unicredit, one of the country's biggest banks, was damaged by flares thrown by demonstrators.

Monti faces particular pressure over labour reforms that are strongly resisted by unions and by the centre-left Democratic Party, which backs his government in parliament in a coalition with the centre right.

The standoff has sharply increased political tensions ahead of local elections on May 6-7, with the centre-right PDL party insisting that the reform propsals must pass as they stand.

Monti says the measures, which would weaken the strong employment protection enjoyed by some Italian workers, are needed to attract badly needed foreign investment and help make the job market fairer for younger workers.

He said the CIC's Lou Jiwei had told him the CIC had considered investing in Italy last year but had decided against it, partly over concerns about the rigidity of labour market regulations.

"They hesitated to go further because they saw some problems in the Italian economy. One of the problems that was specifically mentioned was an insufficiently flexible labour market," Monti said.

Monti says rules which make it hard for companies to fire employees with permanent contracts discourage them from hiring full-time staff and condemn growing numbers of mainly younger workers to a series of insecure, temporary jobs.

In a mark of the opposition he faces at home on the issue, Susanna Camusso, head of the CGIL, Italy's biggest trade union federation, repeated demands that the government drop one of the key elements of the planned reform.

She said Article 18 of the Italian labour code, which ensures that workers deemed to have been wrongfully dismissed by their employers have the automatic right to reinstatement was a fundamental "measure of the freedom and dignity of workers".

The CGIL will join the other main union federations in a demonstration on April 13 against the government's reforms and plans a day-long general strike to demand that the Article 18 protections are preserved.

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