Personal and Business Loans

Deflation may prompt the government to cut public pension benefits by around 0.3 percent in fiscal 2011 in what would be the first reduction in five years.

View full post on All Stories

London, United Kingdom (AHN) – International protest is building about the arrest of Wikileaks founder Julian Assange this week. Assange is being held in a British jail awaiting extradition to Sweden on rape charges.

Meanwhile, the U.S. Justice Department is seeking to extradite him to the United States to face espionage charges after his Web site released more than 250,000 documents that exposed secret State Department communications. However, political leaders in Australia, Brazil, Russia and elsewhere say Assange is a political prisoner who is being punished for exercising rights of the free press.

Some of the harshest criticism is coming from Australia, where hundreds of people rallied Thursday in three cities to protest Assange’s arrest. Assange is an Australian citizen.

Foreign Minister Kevin Rudd said Assange was merely doing the job of any journalist by publishing the documents. “The blame for any violations of the law should fall on the persons who gave the documents to Wikileaks,” Rudd said. “The Americans are responsible for that.”

The State Department communications, called “cables,” described Rudd as a “control freak” and said that he made mistakes as Australia’s foreign minister.

Rudd said he was unconcerned about the criticisms.

He also said Australia would offer consular help to Assange.

Consular help refers to sending diplomats to meet with a citizen of their own country who is arrested abroad to determine whether legal assistance can be arranged.

In Brazil, President Luiz Inacio Lula da Silva described the arrest of Assange as a crime.

“I want to express my protest against this offense against free expression,” Lula said. “I will use the presidential blog to express my protest.”

He also encouraged the international news media to be more vigorous in defending Assange.

“The young man who is giving so much trouble to the diplomacy of the United States was arrested and so far I have not seen any protest defending free expression,” Lula said.

Russian Prime Minister Vladimir Putin described the U.S. government’s efforts to prosecute Assange as hypocritical.

“If it is full democracy, then why have they hidden Mr. Assange in prison,” Putin said during a press conference Thursday. “That’s what, democracy?”

Putin’s remarks appear to be a response to a February 2010 cable from Defense Secretary Robert Gates that said, “Russian democracy has disappeared and the government is an oligarchy run by the security services.”

In Mexico, the Journalists Club put up a plaque in their Mexico City headquarters honoring Assange for his “contribution to the conscience of mankind.”

The State Department documents published by Wikileaks described Mexico’s difficulties in managing its war with drug cartels. The cables described the government’s efforts as ineffective, often corrupt and divided among competing administrators.

Meanwhile, the Congressional Research Service is saying any U.S. prosecution of Assange would face unprecedented legal and diplomatic challenges.

A 24-page report from the government agency examines how the Justice Department could apply U.S. criminal laws to a foreign news operation.

“We are aware of no case in which a publisher of information obtained through unauthorized disclosure by a government employee has been prosecuted for publishing it,” the report said.

The prosecution of Assange creates First Amendment and diplomatic hurdles “based on concerns about government censorship,” the report said.

Some members of Congress, such as Sen. Joseph Lieberman (I.-Conn) and Sen. Dianne Feinstein (D-Calif.), say Assange should be prosecuted under the Espionage Act of 1917.

However, the Congressional Research Service report said no single law forbids the news media from publishing diplomatic cables only a “patchwork” of statutes that leave unclear answers.

View full post on Politics Stories

Fiscal deficit is essentially the difference between what the government spends and what it earns. It is expressed as a percentage of GDP.

View full post on All Stories

Labour leader seeks to exploit the growing crisis in Liberal Democrat ranks on higher education cuts

Ed Miliband today accuses the coalition government of “cultural vandalism” over university tuition fees as he seeks to reinvigorate his struggling leadership and exploit the growing crisis in Liberal Democrat ranks on higher education.

Before a week of student protests and a crucial Commons vote on Thursday, the Labour leader takes the high-risk option of restating the case for a graduate tax despite the vocal opposition of his shadow chancellor, Alan Johnson.

In a full frontal attack on the coalition’s proposals to lift the cap on fees to £9,000 a year he also argues that the plan will set back the cause of social mobility by a generation by entrenching “privilege and inequality” and discouraging students from lower and middle-income families from going to university at all.

The comments suggest the Labour leader has decided to appeal directly to the youth vote as he seeks to define, and inject steel, into his leadership.

Writing in the Observer, Miliband dismisses the coalition’s argument that the rise in fees is “unavoidable”, saying it could have been contained to a few hundred pounds a year – as opposed to allowing annual fees to rise by up to £6,000. “This is not unavoidable, it is a political choice and a deeply damaging one,” he says. “The proposals amount to a rejection of the long-standing recognition of our collective responsibility for higher education.”

Miliband’s decision to choose fees as a defining issue risks dividing his party. Yesterday the shadow chancellor defied his leader by saying Miliband’s preferred graduate tax could not work. Johnson told the Daily Telegraph : “I feel it is going to be very difficult to make a graduate tax a workable option.”

The Tories immediately pounced on the remarks as evidence of Miliband’s lack of authority. Tory deputy chairman Michael Fallon said Labour’s leader had “no authority” in his shadow cabinet.

The issue of student fees was also continuing to split the Liberal Democrat party, whose MPs all signed a pledge before the May general election promising to vote against any rise.

In an interview with the Independent on Sunday Deputy Prime Minister Nick Clegg said he would like his MPs to back the government policy to increase fees in Thursday’s Commons vote. But he admitted there was still no agreement.

Clegg said he found it “immensely frustrating” that people were claiming the policy would increase barriers to entry to university when he was convinced it would lower them.

He claimed Miliband and the National Union of Students were “not being straight” arguing that their support for a graduate tax would mean higher payments for many. “It’s now time for the NUS and Ed Miliband and others to just come clean about what their proposals are, and then in an open contest compare it to what we are doing,” Clegg said.

Aaron Porter, president of the NUS, described the opposition to coalition fee hikes as an “unprecedented campaign”. There are plans for more mass protests on Monday, Wednesday and Thursday – while NUS members across the country will target Lib Dem MPs they believe could still be persuaded to vote against the plans. “We are within a handful of votes of defeating the government on this issue, and we have been overwhelmed by indications of support,” said Porter.

“We will be sending a clear signal to the government – stick to your promises, or face a backlash at the ballot box.”

Lib Dem leaders are preparing for the assault, while also trying desperately to persuade MPs that the package is a good one. They unveiled more details of a £150m scholarship scheme that will pay the first year of tuition fees for 18,000 of the poorest students.

In addition, they will explain that any university wanting to increase fees above £6,000 will have to show that it is giving places to those students, and then match the government funding and pay for their third year of fees. That would leave the poorest taking out loans for just one of their three years at university.

Aides say that Clegg, Vince Cable and Danny Alexander will have further discussions over the weekend about how the party will vote. Public sector cuts Ed Miliband Labour Liberal-Conservative coalition Public services policy Public finance Tuition fees Higher education Students Toby Helm Anushka Asthana guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

View full post on All Stories

– Andrew Sparrow with all today’s political news, including George Osborne’s ‘autumn statement’ on the state of the UK economy – Read Andrew Sparrow’s lunchtime summary

2.04pm: While I wait for the BBC to catch up, here’s some reaction from Graeme Leach, chief economist at the Institute of Directors. He sounds slightly mystified as to why the forecast for the number of public sector jobs being lost isn’t higher.

The really interesting story from the OBR is the slashing in public sector job losses from 490,000 to 330,000. This means that the projected public-sector employment losses are almost half those seen in the 1990s. The peak-to-trough reduction in public spending in the 1990s was 7.4 per cent of GDP. The comparable reduction now is 7.9 per cent of GDP by 2015-16. So the spending squeeze is on a par with the 1990s but the employment shake-out is far less. This is puzzling, even when we allow for a greater burden of the cuts falling on welfare spending this time around.

Leach also thinks the OBR’s growth forecasts are still a bit optimistic.

The OBR’s 2011 GDP growth forecast still looks a bit optimistic even after the downgrade. We face very strong headwinds next year. Real take-home pay faces a sharp squeeze, and the savings ratio is already very low. Throw in ongoing problems in the financial system and anaemic money supply growth, and our judgment is that the economy will be weaker than expected.

1.58pm: Sky have stopped showing the press conference. BBC News are broadcasting it, but their feed seems to be about five minutes behind Sky’s live coverage.

1.55pm: On the change in the forecast for public sector job cuts, he says there is now around 2.5% more money available to pay for general government employment than the government expected in June, because the government is raising more money from welfare cuts than it was planning at that point.

1.50pm: Robert Chote is winding up now. He says he wants to address whether government policies are consistent with balancing the books over the long term.

Public sector net debt “is comfortably on a downward trajectory”, he says.

But demographic change could put pressure on the budget, he says. The effects of the population will eventually put net debt on an upward path, he says.

(I did not realise the OBR was looking that far ahead. Some of the charts in the reports go up to 2050. Chote seemed to be saying that George Osborne’s sums may add up in the medium term, but in the long run he’s going to have to find more money because we’re all living longer.)

1.41pm: Faisal Islam, Channel 4′s economics editor, has spotted an interesting line in the OBR report. He’s posted this on Twitter :

OBR assumes property prices will fall 2.7% in the next fiscal year.

That’s the Daily Express’s OBR story sorted.

1.40pm: Robert Chote is now talking about the Irish bailout. He says the bilateral loan is the only part of the British contribution that will feature in the national finances. He says the details of the loan were not available when the OBR produced its figures. But the sums involved are too small to make a difference to its overall figures, he says.

1.38pm: Robert Chote is still making his opening statement at the press conference.

General government employment is now expected to fall by 330,000 over the next four years. That’s 160,000 fewer than the figure the OBR produced in June. It has changed its forecast because the government is now saving more money than expected at the time of the budget from welfare cuts. But the OBR is predicting a further loss of around 80,000 government jobs in 2015-16.

The deficit is expected to fall from 11.1% of GDP this year to 1% by 2015-16, Chote says.

The forecast for debt is marginally lower than it was in June. But it will still peak at around 70% of GDP.

1.31pm: Robert Chote is summarising his findings at the press conference. I’ve mentioned some of the key findings already.

Forecasts for net borrowing have changed “only modestly”, Chote says.

The government has a “better than 50%” chance of meeting the borrowing targets it has set itself, he says.

On current evidence, the government’s fiscal consolidation is consistent with the targets it has set itself (to eliminate the deficit), consistent with modest growth, Chote says. But he says deciding whether the government is cutting the deficit too quickly is a matter that is beyond the remit of the OBR. He concedes that this is an issue on which there is disagreement.

The recovery will be slower than in the 1970s, the 1980s and the 1990s, Chote says.

1.25pm: Here’s more from the OBR report:

– The economy has recovered “more strongly” since the spring than the OBR expected in June.

– Growth will be “relatively sluggish” during the medium term.

Our central forecast is that the economy will continue to recover from the recession, but at a slower pace than in the recoveries of the 1970s, 1980s and 1990s. This relatively sluggish medium-term outlook reflects the gradual normalisation of credit conditions, efforts to reduce private-sector indebtedness and the impact of the government’s fiscal consolidation.

– Growth will be at its slowest in the first quarter of next year, when it will be 0.3%.

– Unemployment will rise to just over 8%, on the ILO measure, next year. Then it will fall to just over 6% by 2015.

– Employment will rise from 29 million this year to 30 million in 2015 “as private sector job creation more than offsets falling public sector employment”.

Robert Chote, the new head of the OBR, is now holding a press conference.

1.13pm: Here are the Press Association snaps about the OBR report:

The Office for Budget Responsibility lifted its 2010 forecast for UK economic growth from 1.2% to 1.8% today but lowered its estimates for 2011 and 2012 from 2.3% to 2.1% and 2.8% to 2.6% respectively.

The OBR slightly lowered its forecast for public borrowing in the current 2010-11 financial year to £148.5bn from £149.5bn.

The OBR slashed its forecast for public sector job losses over the next four years from 490,000 to 330,000.

And here’s the top of the PA story:

The outlook for the economy is “inherently uncertain” and recovery will be slower than after previous recessions, the UK’s tax and spending watchdog warned today.

The Office for Budget Responsibility said the impact of government deficit-busting measures – which include a hike in VAT to 20% and an £81bn package of spending cuts – would lead to “sluggish growth” in the medium term.

The new report, Economic and fiscal outlook, is now on the OBR’s website .

12.54pm: The Office for Budget Responsibility is due to release its revised economic forecasts at 1pm. They should be available on the OBR’s website after 1pm. At 1.20pm the OBR is hosting a news conference.

Here’s the report it produced at the time of the budget in June .

12.41pm: Here is a lunchtime summary:

– Downing Street has condemned the release of confidential US government information by Wikileaks. “Clearly, we condemn the unauthorised release of classified information,” the prime minister’s spokesman said. “The leaks and their publication are damaging to national security in the US, Britain and elsewhere.” (See 11.53am.)

– More than 100 Liberal Democrat activists who stood as candidates at the general election have signed an open letter saying the party will “rightly face many more years back in the political wilderness” if Lib Dem MPs break their promise to vote against an increase in tuition fees. As Patrick Wintour reports in the Guardian today , Simon Hughes is trying to persuade his colleagues to abstain, although Lib Dem ministers are under pressure to vote in favour of the government’s plans. (See 9.31am.)

– Ed Vaizey, the culture minister, has announced that the British Film Institute will take responsibility for distributing grants to British filmmakers following the abolition of the UK Film Council. (See 12.14pm.)

12.14pm: Ed Vaizey, the arts minister, announced today that the British Film Institute will become “the flagship body for the delivery of UK film policy”. He also said there would be a 60% increase in lottery funding for film by 2014. My colleague John Plunkett has a story about this on the Guardian’s website , the culture department’s press notice is here , and the full text of Vaizey’s speech is here .

12.07pm: Lord Mandelson (left) is launching an international consultancy. Sky’s Mark Kleinman has broken the story and he’s got more details on his blog:

Global Counsel LLP, which is expected to be chaired by Lord Mandelson and run by Ben Wegg-Prosser, a long-standing ally of the former Labour minister, has secured a significant investment from WPP Group, the FTSE 100 marketing services giant, I’m told.

The news will end six months of speculation about Lord Mandelson’s post-ministerial career. Global Counsel will advise multinational companies, and I suspect that one of its focuses given his background will be on exploiting opportunities in the world’s growth markets (particularly in Africa, Asia, Latin America and parts of eastern Europe – which dovetail neatly with WPP’s own priority regions for expansion).

11.53am: I’m just back from the No 10 lobby briefing, where the prime minister’s spokesman said the government “condemned” the latest release of US classified material by Wikileaks.

Clearly, we condemn the unauthorised release of classified information. The leaks and their publication are damaging to national security in the US, Britain and elsewhere … Governments need to be able to operate on a confidential basis when dealing with this kind of information and the fact that it has been leaked is damaging.

But the prime minister’s spokesman was not willing to identify any specific leak that may have caused any specific damage to the national interest. When pressed on this, he repeated his general point about the release of information like this undermining confidentiality. He also said that leaks like this “have the potential to damage national security”.

The spokesman also refused to say what David Cameron felt about the news that he had been criticised in the US files. The American ambassador, Louis Susman, briefed Downing Street officials about the leaks at the end of last week, but he did not speak to Cameron, and Cameron has not spoke to Barack Obama about the affair.

10.35am: You can read all today’s Guardian politics stories here . And all the politics stories filed yesterday, including some in today’s paper, are here .

As for the rest of the papers, I’ve already mentioned the FT’s interview with Alan Johnson (see 10.02am). Here are some other articles of interest.

– Duncan Gardham in the Daily Telegraph says the government is likely to cut the maximum limit for pre-charge detention for terrorist suspects from 28 days to 14 days when it concludes its review of counter-terrorism legislation. But control orders are likely to stay in a “refashioned” form.

Theresa May, the Home Secretary, is attempting to hold on to a refashioned version of control orders despite opposition from Liberal Democrats led by Nick Clegg, the Deputy Prime Minister.

The Government is conducting a review of terrorism legislation introduced in the wake of the September 11 attacks but the results have been delayed as the Government examines “every option known to man” to head off a Liberal Democrat revolt, according to one source.

It is understood that Mr Clegg believes control orders – the system of curfews under which terrorism suspects are electronically tagged – should be abolished while Mrs May, who has had extensive briefings from the security services and the police, thinks they must be retained.

The row threatens to split the Coalition if Mr Clegg decides to give his backbenchers a free vote.

– And Lord Carlile, the government’s independent reviewer of terror legislation, suggests in the Daily Telegraph control orders could be replaced by a three-tier system. He has already submitted this idea to ministers.

First, for those who simply want to travel abroad to train as terrorists, we could have foreign travel restriction orders founded on a raised standard of proof of ”reasonable belief” that the individual wishes to leave the UK for purposes connected with training a terrorist.

Second, we could have general travel restriction orders on reasonable belief that the individual has the more developed intent to participate in terrorist activity.

Third, for the most serious cases we could have activity restriction orders, where a judge was satisfied on the much raised standard of the balance of probabilities that the individual is a terrorist. The system would have an increasing scale of restrictions, including curfews (but not compulsory relocation) for the highest tier.

– George Parker in the Financial Times (subscription) says Liam Fox has dropped his pre-election promise to withdraw Britain from the European Defence Agency.

But Mr Fox has written to Lady Ashton, head of the agency, warning that Britain will block proposals for a 3.9 per cent rise in its budget next year, claiming it was “impossible to justify” at a time of austerity.

Although the EDA has a relatively small budget, Mr Fox has always viewed it as an unacceptable reflection of the expanding ambitions of Brussels. However, Mr Fox’s aides confirmed on Sunday that he was no longer committed to an immediate British withdrawal from the agency, although the UK’s longer-term membership was under review.

– Louise Armitstead and Harry Wallop in the Daily Telegraph say the government will today try to persuade companies to stay in Britain “by pledging an immediate reform of two corporate taxes that are blamed for driving businesses overseas”.

George Osborne, the Chancellor, and Vince Cable, the Business Secretary, are planning to announce the overhaul of the Controlled Foreign Companies tax and a lower rate for income generated from Intellectual Property.

Some of Britain’s biggest companies including WPP, the advertising group, and Shire, the pharmaceuticals company, recently moved their headquarters to Ireland citing the complicated and uncertain company tax regime as the main reason.

I’m now off to the Downing Street lobby briefing. I’ll post again after 11.30am.

10.22am: The cabinet is meeting today. It normally meets on a Tuesday, but the date has been changed because David Cameron is going to Zurich tomorrow to lobby on behalf of England’s 2018 World Cup bid. He’s going to be there for the best part of three days, although he is planning to nip back for PMQs on Wednesday.

10.02am: I’ll post a full review of the papers shortly, but Alan Johnson’s interview in the Financial Times (subscription) merits special attention because it’s full of good material. Here are the key points.

– Johnson said he would like Labour to cut taxes.

I’d like to see us reduce taxes. I’d like to see us reduce it for middle-income and low-income people.

– But he suggested that Labour would want to keep the 50p top rate of tax at the election.

It’s very difficult to imagine we won’t need a 50p tax rate. We need it now. It’s very difficult to imagine we won’t need it at the time of the next general election but, as Ed [Miliband] says, we’ll look at it at the time.

– He predicted that the more the public saw of Miliband, the more they would like him.

I think they’ll tune into Radio Ed and find something they really like.

– He said he would take his time before developing policy on issues like breaking up the banks. In the meantime, he would stay quiet on these issues, he said.

I’m a great believer in the philosophy that if you’ve not got anything to say, keep your mouth shut.

– He revealed what was on his economics reading list. When he got the job, Johnson joked about needing to read an economics primer. But actually he briefed himself by reading the Financial Times summer series about the respective merits of austerity policies versus stimulus policies.

9.46am: The Labour MP Margaret Hodge was on the Today programme earlier talking about how she defeated the BNP in Barking at the election. The campaign is the subject of a documentary, The Battle for Barking, which is on More4 tomorrow. According to PoliticsHome, Hodge said that “reconnecting with voters” and focusing on issues like potholes helped her to see off Nick Griffin.

What I did, because there was nothing I could do about immigration and there was nothing I could do about magicking up the jobs and the housing that created massive anger and frustration … everything I did was about reconnecting Labour with our local people … We do our politics now in a different way. I listened to what people have said and even if I can’t deliver on the big issues, I can deliver on things like potholes, pavements.

9.31am: As the BBC has been reporting, more than 100 people who stood as Liberal Democrat candidates at the last election have signed an open letter urging Lib Dem MPs to vote against the rise in tuition fees. The letter, which is on Derek Deedman’s website, explains very directly why breaking the pre-election promise to vote against any tuition fee increase would be so damaging to the party.

There is one thing that sets the Liberal Democrats apart from other political parties; this is that when we say we will do something during election campaigns we then do it in government. This can be seen in how the income tax threshold will rise to £10,000 by the end of this Parliament, the AV referendum on 5th May 2011, the reduction of MP’s to 600, the Pupil Premium and the delay over the replacement of Trident. We have achieved this and more despite the compromises of being in a coalition.

Nick Clegg emphasised this best of all during the televised leadership debates when he said that the Labour and Conservative Parties have given us “Nothing but broken promises”, he also emphasised that “The Liberal Democrats are different”. Finally and crucially he announced how he wanted to create a “New politics” and part of this vision was for parties to do in government as they claim they will in opposition …

We are different and must show that we are; especially now that we are in a position to do so. Otherwise this party will rightly face many more years back in the political wilderness having been labelled as ‘just like the other lot’.

9.21am: Even though half the country is covered in snow and it feels as if we are in the depths of winter, George Osborne has decided that today’s the day to deliver an ” autumn statement “. He will be the first chancellor to deliver one since Norman Lamont in 1992. By law the government has to deliver a financial report on the state of the economy twice a year. Chancellors used to do this in the autumn, and they would use the autumn statement to announce departmental spending allocations. Then Kenneth Clarke combined the autumn statement with the spring budget, because he thought it made more sense to announce tax and spending decisions at the same time, although he also made a summer statement about the economy to comply with the “twice a year rule”. When Labour came to power, Gordon Brown replaced the autumn statement with a pre-budget report, effectively a mini budget. Today, under Osborne, the autumn statement is back.

Osborne will deliver his statement at 3.30pm. Unlike Lamont, he won’t be publishing departmental spending allocations. He has already done that, in the comprehensive spending review. Instead he will be responding to the Office for Budget Responsibility, which at 1pm will be publishing its revised economic forecasts. As Patrick Wintour reports in the Guardian today , the OBR will raise the estimate of 2010 growth from the 1.2% contained in the June budget to close to 1.8% and cut projections for public-sector job cuts by nearly a fifth. Osborne will also publish a growth discussion paper.

Otherwise, it’s a relatively quiet day. The Wikileaks story is, of course, huge, but largely I’ll leave that to my colleague Matthew Weaver, who is covering it in a live blog . I’ll focus on the breaking political news, as well as looking at the papers and bringing you the best politics from the web. George Osborne Economic policy Andrew Sparrow guardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

View full post on All Stories

Washington, DC, United States (AHN) – The United States on Saturday responded with counter proposals to a letter from WikiLeaks requesting information about the persons mentioned in the thousands of documents set for release by the website.

Citing WikiLeaks’ request for information regarding individuals who may be at “significant risk of harm” in a letter to U.S. Ambassador Louis B. Susman, U.S. State Department legal adviser Harold Koh wrote back, “We will not engage in a negotiation regarding the further release or dissemination of illegally obtained U.S. government classified materials.”

“As you know, if any of the materials you intend to publish were provided by any government officials, or any intermediary without proper authorization, they were provided in violation of U.S. law and without regard for the grave consequences of this action,” Koh continued.

“It is our understanding from conversations with representatives from The New York Times, The Guardian [newspaper of Britain] and Der Speigel [newspaper of Germany], that WikiLeaks also has provided approximately 250,000 documents to each of them for publication, furthering the illegal dissemination of classified documents,” the State Department noted.

The State Department asked WikiLeaks to: “1) ensure WikiLeaks ceases publishing any and all such materials; 2) ensure WikiLeaks returns any and all classified U.S. government material in its possession; and 3) remove and destroy all records of this material from WikiLeaks’ databases.”

On Wednesday the U.S. admitted preparations for another WikiLeaks release of classified U.S. documents that could harm relations with friendly countries around the world.

Stating that the release is believed to offer sensitive classified documents, P.J. Crowley, the State Department spokesman, told journalists then, “We’ve known all along that WikiLeaks has in its possession State Department cables. We are prepared if this upcoming tranche of documents includes State Department cables.”

The U.S. diplomatic missions are informing other countries to do damage control as Crowley admitted, “We are in touch with our posts around the world. They have begun the process of notifying governments that release of documents is possible in the near future.”

Typical diplomatic cables contain analyses of situations, as well as records of discussions between U.S. diplomats and foreign officials in what Crowley called “diplomacy in action.”

“Inherent in this day-to-day action is trust that we can convey our perspective to other governments in confidence and that they can convey their perspective on events to us,” Crowley said at a short off-camera briefing, adding, “And when this confidence is betrayed and ends up on the front pages of newspapers or lead stories on television and radio it has an impact.”

Crowley also informed the journalists that the State Department would be informing U.S. lawmakers about the situation arising out the leaks, saying, “Many of you are aware, we have had similar conversations with members of the Hill to let them know what we are prepared for. This is going to be unhelpful.”

The WikiLeaks release is expected to be the largest leak ever of classified documents.

In October, WikiLeaks published nearly 400,000 classified U.S. military documents related to the war in Iraq, but WikiLeaks said on Twitter last Sunday that the next one will be seven times the size of the Iraq War logs.

View full post on Politics Stories

Government and politics don’t drive investments, but they do provide the road on which they travel.

View full post on All Stories

Immigrants selected by the federal government under the current skilled worker program are contributing to Canada’s economy, a new evaluation has found.

View full post on All Stories

Dublin, Ireland, United Kingdom (AHN) – Ireland’s debt crisis and austerity plan has fueled uncertainty among traders, causing the euro to continue its slide in value against the dollar.

The European Union’s common currency is now down to two-month lows at $1.3314; it has fallen by more than three cents this week alone. News of the proposed bailout had caused the euro to rise in trading on Monday; however, it dropped again in trading on Tuesday and has continued to drop.

Ireland’s four-year austerity plan relies on a combination of spending cuts and tax increases to save $20 billion (15 billion euros) and reduce that nation’s government deficit.

However, currency traders are skeptical, fearing that the Irish government is too optimistic and that the plan will not work. In addition, traders also fear that the debt crisis will spread to other nations within the euro zone that have high government deficits.

View full post on Politics Stories

Ireland has unveiled the harshest budget measures in its history, a four-year plan to slash deficits by e15 billion ($20 billion) so it can receive a massive bailout from the European Union and the International Monetary Fund. |||

Ireland has unveiled the harshest budget measures in its history, a four-year plan to slash deficits by e15 billion ($20 billion) so it can receive a massive bailout from the European Union and the International Monetary Fund.

The austerity plan axes thousands of state jobs, trims welfare benefits and pensions, and imposes new taxes on property and water. In all, it seeks to cut e10 billion ($13.3 billion) from spending and raise e5 billion ($6.7 billion) in extra taxes from 2011 to 2014.

Even Prime Minister Brian Cowen conceded Wednesday the plan would hurt the living standard of everyone in the nation.

Yet analysts still expressed doubts that the EU-IMF rescue loan, which Cowen said would be about e85 billion ($115 billion), would be big enough to save Ireland from an eventual default.

And bank shares plummeted for a third straight day on the Irish Stock Exchange, reflecting growing expectations that investors will be wiped out if the government is forced to seize majority control of the country’s two dominant banks, Allied Irish and Bank of Ireland.

“The government is completely in denial about the amount of money they’ll have to borrow,” said Constantin Gurdgiev, a finance lecturer at Trinity College Dublin and an economics adviser to IBM in Europe.

Ireland is still negotiating the terms of the bailout with European Central Bank and IMF experts. The government hopes its tough budgetary medicine will permit the country’s 2014 deficit to fall to 3 percent of gross domestic product, the limit for the 16 nations that use the euro currency.

While most eurozone members are exceeding that rule, Ireland’s deficit this year is forecast to reach 32 percent of GDP, a modern European record, fueled by exceptional costs from its unfathomable bank-bailout effort.

“Today is about Ireland putting its best foot forward, Ireland saying: Yes, here is what we’re prepared to do as a government and a people to put right what has to be put right, and to give ourselves prospects and prosperity again,” said Cowen, who is widely expected to resign or be forced from office within weeks.

Business leaders welcomed the package as brutal but unavoidable given that Ireland is all but frozen out of normal lending markets and its banks are running out of cash.

The EU’s financial affairs commissioner, Olli Rehn, said the package “strikes a good balance … to protecting the least well off.” He said Ireland’s determination to narrow its deficits quickly provided “a sound basis” for the bailout talks.

But outside the guarded iron gates of Cowen’s office, about 100 activists denounced the government and the IMF.

“This is a road map back to the Stone Age,” said Jack O’Connor, president of Ireland’s largest union, SIPTU.

He noted that Ireland had already suffered nearly e15 billion in cuts and tax hikes since 2008, gutting economic growth and helping to double unemployment to 13.6 percent.

“Ireland needs a strategy for growth, but this plan will achieve the opposite,” said O’Connor, who plans to lead a Dublin protest march on Saturday against the cuts.

Fellow Europeans have marveled at how the Irish, despite facing the eurozone’s harshest cuts, have responded with only token protests until now. Glum acceptance remained the prevailing mood on Dublin’s wintry streets.

“For the next 10 years we’re going to be paying for this bailout,” said Jordan Lancaster, a 29-year administrator at the Justice Department. “But they had to do it. There really wasn’t any other choice.”

Ireland’s 140-page National Recovery Plan proposes to introduce property and water taxes, raise the sales tax from 21 percent now to 23 percent in 2014, and cut the minimum wage by e1 to e7.65 ($10.20).

Ireland’s bloated civil service will be particularly hard hit _ seeing cuts of about ¤1.2 billion and 24,750 state jobs.

Income tax bands will be widened so more lower-paid workers pay taxes, and higher-waged workers will see annual taxes rise more than ¤3,000 ($4,000). A raft of welfare payments will be gradually reduced.

Young and old alike face higher bills and less income. University fees will rise and monthly pensions will fall up to 12 percent.

Ireland’s legendary tax-free status for authors, musicians and artists will be cut back so only the first e40,000 ($53,000) of income will avoid tax.

Left untouched, to the irritation of other EU nations, is Ireland’s exceptionally low 12.5 percent tax rate on business profits. That rate is less than half the EU average and has helped to lure about 1,000 high-tech multinationals to Ireland, far more proportionally than any other European country.

France, Germany, Austria and Britain all have demanded that Ireland raise that rate. They argue it amounts to unfair competition at a time when other EU members will have to raise their own debt-fueled borrowings to loan money to Ireland.

But Finance Minister Brian Lenihan told reporters Ireland would be shooting itself in the foot if it did anything to scare off foreign investment. The foreign companies, including 600 U.S. businesses like Microsoft and Google, generate nearly 20 percent of Ireland’s GDP.

Lenihan challenged opposition leaders, who have yet to confirm they will support the government’s 2011 budget when it is introduced Dec. 7, to accept the plan as the only possible way forward regardless of expected early elections next year.

He said the four-year plan “has to be the basis for any sensible proposals for the next general election. Anything else that’s put forward is nonsense.”

Ireland’s financial shares suffered another bloodbath on the Irish Stock Exchange, but partly rebounded from record lows in the afternoon.

Bank of Ireland fell 33 percent to e0.20, a record low, and closed at e0.27. Irish Life & Permanent _ an insurance and mortgage specialist that has yet to receive a state bailout _ fell 16 percent to close at e0.63, also an all-time low. Only Allied Irish bucked the trend, falling 18 percent but then rebounding to close up a cent at e0.34.

Ireland has already nationalized three other banks left bankrupt by the 2008 collapse of the country’s decade-long real estate mania. Property prices have slumped by more than 50 percent, hundreds of thousands of homeowners are trapped in homes no longer worth what they owe, and many of Ireland’s construction barons have declared bankruptcy or fled the country.

The government already owns 36 percent of Bank of Ireland and 18 percent of Allied Irish. The bailout experts’ requirement for greater capital reserves will have to be provided by the government, a process that analysts say will quickly lead to both banks’ nationalization, a fate Ireland has spent billions already trying to avoid.

“Irish banking shares will never _ or not for a long time _ be worth anything. The solution requires the total destruction of the existing share base,” said David McWilliams, a former Irish Central Bank economist and European hedge fund manager.

McWilliams warned that deepening austerity would only drive Ireland back into a recession, reducing tax revenues and widening the deficit again. He appealed for Ireland to abandon its 2008 bank guarantee to repay all of the banks’ borrowed billions, and instead require foreign bondholders to share the losses as Germany wants.

“The end game is simple,” McWilliams said. “Either we take the pain and the economy is crushed, as the government insists, or the people who lent the money … take the pain, as they should, and the economy can breathe.”

But Britain and Germany both have exposures to Irish banks exceeding $200 billion each, according to the Bank for International Settlements. Governments across the 16-nation eurozone warn that allowing Irish loans to default would send shockwaves through Europe’s interdependent banking system.

Credit ratings agency Standard & Poor’s raised its risk assessment of Ireland. The New York-based agency lowered its long-term rating on Ireland’s financial reliability two notches to A from AA- and kept a negative outlook, meaning further downgrades loom.

S&P’s measurement of short-term risks also fell one notch to A-1. Ireland until now, surprisingly, held the highest grade of A-1+. – AP

View full post on All Stories