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 on: Dec 16, 2014, 07:27 AM 
Started by Rad - Last post by Rad

Russia failing to prevent homophobic violence, says Human Rights Watch

Anti-gay harassment has risen since controversial law banning ‘homosexual propaganda’ was passed last year, report says

Shaun Walker in Moscow
The Guardian, Monday 15 December 2014 16.05 GMT   

Gay people in Russia are being subjected to increasing amounts of harassment and violence in their everyday lives, according to a report suggesting that intolerance has risen since a controversial law banning “homosexual propaganda” was passed last year.

“The law effectively legalised discrimination against LGBT people and cast them as second-class citizens,” wrote Human Rights Watch in the report, published on Monday. “Russian authorities have failed in their obligation to prevent and prosecute homophobic violence.”

The report focused on the victims of vigilante groups that have sprung up recently, who often lure gay men into online traps and then film their humiliation.

“They forced me to stand in the middle of the circle they formed around me. They asked me questions about my sex life and sexual preferences, and then they forced me to yell that I was a paedophile and gay,” said one man quoted in the report, who asked to protect his identity.

“They called themselves ‘Athletes against Paedophiles’ and told me: ‘We will catch all of you and we will teach you how to live.’ It was around 5pm, so there were a lot of people in the shopping mall, shopping and dining. But no one stopped them, no one interfered.”

The report also documented violent incidents, many of which were not reported to police out of fear.

One of the main problems is that Russian authorities remain reluctant to classify homophobic attacks as hate crimes. Although Russia does have laws on hate crimes, they tend to be used for more political purposes, such as the sentences handed down to the Pussy Riot group, who were accused of hooliganism motivated by hatred of a religious group for dancing in a church.

When anti-gay attacks take place, however, the authorities tend not to consider them as motivated by hatred, instead qualifying them as hooliganism or assault.

“Violence experienced by LGBT people in Russia is unmistakably motivated by homophobia, but the authorities deliberately ignore that these are hate crimes and fail to protect victims,” said Tanya Cooper, Russia researcher at Human Rights Watch. “Authorities should effectively prosecute homophobic violence, and the authorities should stop engaging in and tolerating anti-LGBT discrimination.”

The release of the report came as one of the country’s most notorious anti-gay crusaders, the St Petersburg politician Vitaly Milonov, again made headlines as he spearheaded a raid of a gay club over the weekend.

Milonov arrived at the venue, which was hosting a fetish party, with a squad of riot police, barged in and began checking the documents of all those present, according to local news reports.

“We found around 20 teenagers there who were practically having sex on the stage,” Milonov told a local news agency. He said the nightclub was full of “perverts and paedophiles” and called for it to be shut down. Despite the fact that Milonov appeared to be commanding a group of police in raiding the club, the party continued after they left.

 on: Dec 16, 2014, 07:25 AM 
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EU under pressure to ban diclofenac to protect Europe's vultures

Veterinary drug for cattle that led to collapse of vulture populations of Asia is a risk to 55,000 birds, says European Medicines Agency

John Vidal
The Guardian
Monday 15 December 2014 17.52 GMT   

Pressure is mounting on Europe to immediately ban a drug used by vets which has been linked to the poisoning of vultures and other birds which feed on the corpses of cows treated with it.

The use of veterinary diclofenac, a pain-killing anti-inflammatory medecine given to livestock led to the unintentional but almost complete collapse of many vulture populations in Asia in 1990s and early 2000s. But a loophole in Europe allows it to be legally used in Spain and Italy where nearly all Europe’s estimated 55,000 vultures live.

Now, following an investigation of the death of a Spanish vulture in 2012, the European Medicines Agency has confirmed that vultures and other carrion-eating birds are at risk. The European commission asked the agency, which is responsible for the scientific evaluation of all medicines developed by EU drug companies, to consider the risks it posed to birds after scientists and ornithologists protested when Spain authorised use of the drug on cattle last year. A dose of just 0.1–0.2 mg/kg body weight can cause rapid, lethal kidney failure.

According to the agency, withdrawal of the marketing authourisations of diclofenac in Spain and Italy is the only measure that complegtely avoids the risks without affecting animal welfare. Spain has 95% of the European vulture population with around 50,000 griffon vultures, more than 4,000 Eurasian black vultures, 3,000 Egyptian vultures and 250 bearded vultures .

India, whose vulture numbers fell from over 40 million to around 60,000 in a few years, together with Pakistan, Nepal and Bangladesh, have all planned or placed heavy restrictions on the drug which had become widely used in cattle for problems ranging from pneumonia to mastitis. Some populations have lost more than 95% of their animals. Numbers in Asia have not yet recovered but the birds are believed to now stand a chance of surviving.

Fatro, the Italian drug company which produces veterinary diclofenac was contacted but declined to respond. It has previously refused to voluntarily withdraw the drug from the market, stating that it is legally allowed to sell it and that risk assessments considered it safe.

“The European Medicines Agency is sending the right message both to the European commission and to Fatro, the company that currently commercialises this environmentally dangerous drug in Europe. But this is not over yet, we will remain vigilant and continue to mobilise our supporters to make sure veterinary diclofenac is out of the market. Every minute counts,” said Ivan Ramirez, head of Birdlife International in Europe and central Asia.

Papers in scientific journals including Science and Nature have supported a ban and stated that veterinary diclofenac poses an unnecessary threat for the European vulture populations.

 on: Dec 16, 2014, 07:23 AM 
Started by Steve - Last post by Rad

Belgium grinds to a halt for one-day general strike

Unions take action, halting public transport and closing schools and offices in protest at austerity policies of Charles Michel

Leo Cendrowicz in Brussels
The Guardian, Monday 15 December 2014 18.39 GMT   
Belgium was brought to a standstill on Monday by a 24-hour general strike as the country’s powerful unions grounded air, rail and sea links, and forced businesses, schools and government offices to close.

The strike is the latest in a series of actions against the austerity policies of the centre-right government headed by the Ffrancophone, liberal prime minister, Charles Michel, who took office in October.

The unions are protesting against plans to kickstart the economy and balance the books by raising the pension age, freezing wages and cutting public services.

All train services, including the Eurostar, were halted, and airspace closed, while local bus and trams remained in their depots. Roads were blocked in Brussels, while pickets gathered in force around the European quarter, the National Bank, the canal and the Audi factory. With most schools closed, many Belgians who could reach their workplace chose to stay at home to look after their children.

Riot police used water cannon to disperse protesters outside the headquarters of the Flemish separatist N-VA, the biggest of the four parties in the government coalition. There were also reports of lorry drivers breaking through union lines, with pickets claiming injuries as the vehicles forced their way past.

This is the first general strike since 1993 and comes after weeks of regional and industrial action. Last month, a march of more than 100,000 people in Brussels against austerity ended in violent protests that left 112 police officers injured.

BECI, the Brussels chamber of commerce, said the day-long strike could cost up to €200m (£159m) and 2,000 jobs in the capital.

Union leaders say they have broad support for the action. Marie-Hélène Ska, who heads the ACV-CSC union, said the strikes reflected a growing frustration. “Workers feel they are not being heard. It’s time to change that,” she said.

Thierry Bodson, the general secretary of the FGTB union, said anti-austerity arguments had gained momentum in recent weeks. “Even if some people don’t agree with the strike, the vast majority understand our reasons,” he said. But the N-VA leader, Bart De Wever, accused the FGTB of being the “armed wing” of the francophone socialist party, the Parti Socialiste (PS). “People have been stirred up with disinformation and lies,” he said.

Ministers say changes are needed if Belgium’s public debt is to be brought down from 105% of GDP, way above the 60% guideline for eurozone countries. Last month, the European commission gave the Belgian government until March to bring its budget in order or face extra scrutiny.

Michel says there is no alternative to austerity aimed at cutting some €11bn from the budget over the next five years. Officials point out that the country has the third highest tax burden in the OECD, at 44.6%, while annual growth for 2014 is projected at just 0.9%. Michel’s coalition wants to raise the retirement age from 65 to 67 from 2030, and freeze the wage indexation system that automatically lifts salaries in line with inflation.

According to Marc De Vos, a labour law professor at Ghent University and director of the non-partisan Brussels-based Itinera Institute, the strikes are less about policy and more about kneejerk political rhetoric. “The unions think Margaret Thatcher has been elected here, out to hurt the poor and needy,” De Vos says. “But we have only seen a fraction of what has happened in Britain.

“In fact, the government is middle of the road in budgetary matters – and the European commission and IMF say it is not enough.”

 on: Dec 16, 2014, 07:21 AM 
Started by Steve - Last post by Rad
Spain offers new benefit for long-term unemployed

450,000 people expected to qualify for benefit, intended to help those who have exhausted all other unemployment support

Ashifa Kassam in Madrid
The Guardian, Monday 15 December 2014 19.35 GMT   

The year he turned 40, Fernando Mora lost the only job he had ever had. It was 2009 and the financial crisis had wiped out the carpentry job he had held since he was 18. As Spain entered its deepest recession in half a century, his wife lost her job in senior care a short time later, while their daughters, both in their 20s, struggled to find jobs.

By 2013, everyone in the family had exhausted their government unemployment benefits. “We’re without any benefits or compensation, nothing at all,” Mora explained in the short documentary No Job Land. “I owe money to everyone.”

In a country where one in four people are unemployed, Mora’s story stood out. His family had become one of the more than 700,000 households in Spain with no stable source of income.

On Monday the government paved the way towards tackling the issue. Starting in mid-January, a new benefit of up to €426 (£338) a month will be made available to unemployed families who have exhausted all other forms of income. The benefit can be claimed for six months.

The prime minister, Mariano Rajoy, said that in many respects the crisis was over. “But its sequels aren’t over yet,” he said. “The economic recovery won’t be complete until it reaches every household, every Spaniard who is without a job, and until it is felt in the pockets of every single Spaniard.” About 450,000 people are expected to qualify for the new benefit.

In order to be eligible, claimants must have been unemployed for more than a year, have dependents, and must have exhausted all other possible benefits. Recipients must agree to work with public officials to design a personalised job plan to help them find work.

While the International Monetary Fund has said it expects the unemployment rate in Spain to remain above 20% for at least another four years, Rajoy’s People’s party government is relying on the country’s economic growth to create jobs. “It’s not the same to talk about an economy that’s contracting as one that’s expected to grow by 2% in the next year,” Rajoy said.

Spain’s labour unions, who negotiated the benefit with the government, noted that only 64% of Spain’s unemployed were currently eligible for any kind of government aid. “To come out of the crisis we need to recoup the standard of living we had before, and for this to happen we still have a long way to go,” said Ignacio Fernández Toxo, of the Workers’ Commissions union. Toxo called on the government to do more to help the more than three million Spaniards living in extreme poverty, suggesting the creation of a guaranteed minimum income for the unemployed and a rise in the minimum wage.

Álvaro Anchuelo, of the centrist Union, Progress and Democracy party, called the benefit a step in the right direction but said it was “too short a step. It’s far too little to meet the social necessities of the country.”

Spain is gearing up for municipal, regional and potentially general elections in 2015. On Monday, Spanish media pointed to the rising popularity of the leftwing Podemos and the easing of austerity measures to explain the government’s increasing interest in social issues.


Spanish rent changes ‘could close 20,000 small businesses’

Abolition of rent controls this month have prompted some landlords to increase fees by tens of thousands of euros

Stephen Burgen in Barcelona
The Guardian, Monday 15 December 2014 17.36 GMT      

Up to 20,000 small Spanish businesses could be forced to close when rent controls are abolished at the end of this month, according to the self-employed workers union. Many of the closures will be emblematic shops that shape the urban landscape in cities such as Madrid, Granada and Barcelona.

The Camisería Hernando has been in business since 1857 and has occupied the same shop on Madrid’s Gran Vía for 50 years but is closing after the rent shot up from €3,000 to €30,000 a month.

Barcelona has already lost a toy shop and a secondhand bookstore that have been a feature of the old part of the city for more than a century. Both premises have been occupied by retail clothing chains. Other gems such as the modernista Monge stamp shop and the Quiles grocery are also under threat as the city succumbs to an influx of chain stores.

Local government officials have refused to intervene to preserve the city’s heritage but local artists and intellectuals are taking the case of Monge to court. While some landlords have been prepared to negotiate affordable rent hikes, many shops are in buildings owned by banks and funds that simply notify the shopkeepers of the impending rise.

An estimated 80% of Spanish companies are family owned and they generate about 70% of GDP.

La Dolceria de La Colmena has been satisfying Barcelona’s sweet tooth since 1849. Its owner, Josep María Roig, is also president of the Barcelona Association of Emblematic Establishments, and has been able to survive a rent rise from €1,100 to €7,500 because, as well as the shop, his business supplies other outlets in the city.

“About 60% of the 200,000 affected businesses have been able to negotiate a rise of around 35%,” César García, of the self-employed workers union, said. “But most of the rest have received a letter telling them the rent is going up by thousands of euros and that it’s not negotiable.”

“We’re closing after 72 years,” said Susana Esnarriega, owner of Así, a doll shop on Madrid’s Gran Via. “The landlord is giving us till Epiphany to get out but he hasn’t even made us an offer.”

Unemployment in Spain is running at about 24%. Mariano Rajoy, the prime minister, said on Monday that “the crisis is over, but not its consequences.”

 on: Dec 16, 2014, 07:19 AM 
Started by Steve - Last post by Rad

Former Auschwitz guard to go on trial in Germany

Oskar Gröning, 93, will be tried early next year on 300,000 counts of accessory to murder during stint at Nazi death camp

Associated Press in Berlin
The Guardian, Tuesday 16 December 2014 12.35 GMT   

A 93-year-old man charged with 300,000 counts of accessory to murder for serving as an SS guard at the Nazis’ Auschwitz death camp will go on trial early next year.

Lüneburg state court said on Tuesday its review of the prosecution’s case against Oskar Gröning determined there was enough evidence to proceed with the trial. The starting date has not been announced.

Gröning has openly talked about his time as a guard and says he witnessed atrocities but did not commit any crimes himself.

Prosecutors say Gröning helped the Nazi regime benefit economically and supported systematic killings in his job by dealing with the belongings stolen from camp victims.

Nearly 50 Holocaust survivors or victims’ families have joined the case as co-plaintiffs.


Case against Oskar Gröning highlights Germany judiciary's Holocaust problem

With only 50 out of 6,500 SS guards at Auschwitz convicted, critics say German law has been too slow to seek justice

Ben Knight in Berlin
The Guardian, Tuesday 16 September 2014 16.19 BST   

He was once called "the accountant of Auschwitz," but he is also one of the few former Nazi death camp guards to speak out against Holocaust deniers. Now, at the age of 93, he is to face trial in Germany, and his case has highlighted what some historians see as the failure of the German judiciary to bring Holocaust perpetrators to justice.

From 1942 to 1944, Oskar Gröning counted money taken from the luggage of murdered Jews and sent it back to SS headquarters in Berlin. He also stood guard as the transports of human beings entered the camp.

That much has long been known, not least because he himself described his experiences to the media, but it has taken a new investigation, carried out by Germany's central office for the investigation of Nazi crimes in Ludwigsburg, for charges to be brought against him. In February this year, the office searched the homes of several former members of the SS across Germany. Of these, Gröning is the only one to have been pronounced fit enough to stand trial.

For what state prosecutors called "legal and evidence reasons", Gröning's formal charges relate only to two months of his time at the camp – 16 May to 11 July 1944, the time of the so-called Hungary Operation, when "around 425,000 people from Hungary arrived at the camp in Auschwitz-Birkenau", of whom "at least 300,000 found their deaths in the gas chambers". Gröning has therefore been charged with 300,000 counts of accessory to murder.

Gröning caught public attention in 2005 when he appeared in the BBC documentary Auschwitz: The Nazis and the 'Final Solution', in which he described how being confronted by Holocaust deniers had led to him to speak out. "I see it as my task now, at my age, to face up to these things that I experienced, and to oppose the Holocaust deniers who claim that Auschwitz never happened," he said. "I saw the crematoria, I saw the burning pits."

But Gröning also denied his culpability, telling Der Spiegel magazine in the same year: "Accomplice would almost be too much for me. I would describe my role as a small cog in the gears. If you can describe that as guilt, then I am guilty, but not voluntarily. Legally speaking, I am innocent."

State prosecutors disagree – but only now. Despite high-profile trials in Nuremberg just after the war, and Frankfurt in 1964, the German judiciary has been notoriously sluggish about punishing those directly involved in the Holocaust. A previous case against Gröning himself was dropped for lack of evidence by Frankfurt prosecutors in 1985. The historian Andreas Eichmüller once calculated that of the 6,500 SS members who worked at Auschwitz and survived the war, only 49 had ever been convicted.

Jörg Friedrich, a historian and author of Acquittal for Nazi Justice: The Sentencing of National Socialist Judges since 1948, challenges the view that the German judiciary dragged its heels. "There were hundreds of thousands of investigations, kilometres of investigation documents," he told the Guardian. "I don't know of any state that did the same … A compromise had to be drawn between assimilation and prosecution, and I think Germany was a success in both cases."

The legal difficulty is in defining individual guilt; attempts to convict other SS members have failed in the past because they could not be linked to specific murders. Ingo Müller, law professor and author of Terrible Lawyers: the Past Our Judiciary Has Not Overcome, thinks this is a historical failure. "Just participating in the Holocaust doesn't count," he told the Guardian.

But Müller thinks that it is long past time that a German court recognised the Holocaust itself as a crime. "If two or three more people were to be convicted – they don't actually have to go to prison, they can stay in their old people's homes – it would have a symbolic effect," said Müller.

"We can't just let it stand that the German judiciary says participating in the Holocaust is not a crime. But I'm very sceptical that there will ever be another conviction."

 on: Dec 16, 2014, 07:12 AM 
Started by Steve - Last post by Rad
Three Arrested in Raid on British 'Slave' Factory

by Naharnet Newsdesk 16 December 2014, 07:12

British police arrested three suspected slave masters after a raid on a factory freed 20 Eastern European migrants paid 25 pounds ($39, 31 euros) to work 80-hour weeks on Monday.

Police said that the factory in Manchester in northwest England was producing pictures and frames for "major high street companies" and had contracts worth millions of pounds.

"The men and women working in the factory have told us that they were subjected to physical and verbal assaults at the hands of their employers and forced to work more than 80 hours before ending up with around 25 pounds for their week's work," said detective inspector James Faulkner.

"This is a typical example of how modern slavery can work in the UK."

The migrants were given accommodation in a house with "cramped, terrible conditions" where they slept three or four to a room, before being taken to the factory to work over 12 hours a day, police said.

The factory owners paid the immigrants around 125 pounds for 80 hours work, but deducted up to 100 pounds for the accommodation and travel to work, according to police.

"This leaves the men and women effectively working for pennies, while simultaneously ensuring they remain reliant on the people enslaving them," Faulkner added.

Three men aged 51, 43 and 40 were arrested on conspiracy to require another person to perform forced or compulsory labour, and conspiracy to commit trafficking offences.

The raid was part of an ongoing anti-trafficking effort by Greater Manchester Police called Operation Retriever.

An earlier raid in November arrested 15 people and charged five for their involvement in a trafficking ring that sold a pregnant woman into a fake marriage, and attempted to trick her into having an abortion.

Source: Agence France Presse

 on: Dec 16, 2014, 07:07 AM 
Started by Steve - Last post by Rad
Belo Monte, Brazil: The tribes living in the shadow of a megadam

Next year the Belo Monte dam will flood vast swathes of Amazon rainforest. Indian tribes living on the river have lost their fight to halt the project – now they await the floods that threaten their entire way of life

Jonathan Watts in Belo Monte
Tuesday 16 December 2014 08.00 GMT
The Guardain   

By the Great Bend of the Xingu river in the depths of Amazonia, the Juruna tribe is being drowned by what seems at first sight to be a flood of TV game-show prizes.

There’s a shiny new motorboat moored by the old canoe, the latest four-wheel drive parked beside a chicken coop, satellite dishes outside every home and wide-screen plasma TVs inside.

But these are not the spoils of victory. They are the consolations for defeat in an existential battle against Brazil’s biggest engineering project, the Belo Monte dam.

For three decades, the Juruna have been in the vanguard of the fight against the hydroelectric plant – the world’s fourth biggest – which is being built on the edge of their territory in one of the world’s biodiversity hotspots.

The community have marched, lobbied, seized hostages, burned buses and taken to their canoes to try to stop the project. But they have failed.

Next August, the Xingu river will be closed by a 5km-wide dam. The first turbine will come into operation a few months later.

“When they close the river, it will be like they are destroying our lives,” says Giliarde Juruna, the chief of a village in the Paquiçamba indigenous territory. “We have always lived off the river. This region here is where we’ve lived – from our ancestors until today. The impact will be huge.”

Belo Monte is already an undeniable fact. The vast construction site is like something out of Mordor – an immense wall of stone, steel and concrete that towers above a blasted plain teeming with trucks, bulldozers and cranes. The turbine housings, which are half-complete, resemble the jagged ramparts of a fort. Here and there by the side of the road, felled trees are tied up in bundles, like captured prisoners. And as night falls, the usual Amazonian chorus of insects, frogs and birds is drowned out by engines, alarms and clanking earth movers.

Fleets of trucks are shifting 79.2m cubic metres of earth – more than that needed for the Panama canal. To supply the rocks for the barrage, Brazil’s largest pebble crusher has been built nearby. There are also several cement factories to mix the 2.1m cubic metres of concrete that will eventually be poured at the project’s three main sites. There is a main 11,233MW hydroelectric plant at Belo Monte that will house 18 turbines, a secondary much smaller 233MW plant at the 7km barrage across the river in Pimental and a deep canal to divert water from one to the other.

The complex system of this run-of-the-river dam is designed as a low-impact alternative to conventional narrow dams, which simply block the river and build up a huge reservoir behind the dam.

Although Belo Monte will submerge a hefty 478 sq km in its 28-mini reservoirs (in an area that was, until very recently, covered by one the world’s most biodiverse rainforests,) engineers say the ratio of land flooded to power generation is about half that of Brazil’s biggest hydroplant at Itaipu.

At great expense, they say they have designed this 25bn reais hydropower facility to avoid the flooding of indigenous territory. The relatively small reservoir and the maintenance of a minimum flow of water on the trunk river means the plant will work on average at barely 40% of its 11,200MW capacity.
Aerial view of the Belo Monte Dam construction site. Belo Monte is a controversial hydropower plant that is being built in the Xingu River, one of the largest rivers in the Amazon basin.

“It’s the price we pay to preserve the environment,” said Jaimie Juraszek, the construction superintendent of Norte Energia. “We cannot save the forest and live in the dark without TV. There is a conflict of interest here. We need balance. I think Belo Monte is a compromise.”

The 20,000 people who will be relocated certainly seems modest compared to the 1.5 million people that China’s government moved for the Three Gorges dam. But, unlike China’s crowded Sichuan province, the problem in sparsely populated Amazonia is not moving people out, but moving them in.

The biggest impact of Belo Monte is from the influx of tens of thousands of construction workers, suppliers, security guards, prostitutes and other migrants who have been drawn to the area by the megaproject. Since work started in 2011, the population of the nearest city of Altamira has surged from about 100,000 to more than 150,000. The newcomers require homes, food, water, electricity, oil, roads and boats – all of which add to the pressure on a local environment that is one of the world’s most important biodiversity hotspots.

Forests are being felled in the Altamira region around the construction site at a faster rate than anywhere else in the country. There are conflicts over fishing catches. Endangered species are under increased pressure and indigenous groups are losing their land and traditions.

Some tribal leaders privately admit that all they are fighting for now is compensation. They want more land and for the dam operator Norte Energia to fulfill its promise to provide them with schools and clinics.

Three years ago, when these were not forthcoming, the government urged the company to launch a two-year “emergency programme” to placate opposition among the Juruna and other indigenous communities.

Suddenly, every wish the tribes made was granted up to a budget of 30,000 reais per village per month. Centuries of a subsistence lifestyle gave way to instant gratification in the form of food, laptops, new vehicles, freezers, motorbikes. For the 2011-13 duration of the programme, all they had to do was ask.

The result was calamitous for traditional customs, hierarchies and a sense of identity. Villages split to get more money. Residents stopped farming and ordered food from the supermarket. Conservative elders were nudged aside by the young who could speak Portuguese with the company officials.

The traditional diet of fish from the river and meat hunted in the forest gave way to barbecued steak and brightly coloured sweets bought at the supermarket. Instead of water from the river, locals drink beer and sweet fizzy drinks. Plastic rubbish is a growing problem.

Outside, respect for the communities is being replaced by scorn or pity. Norte Energia officials are privately contemptuous. “In the old days, you just gave the Indians a mirror and they were happy. Now they want iPads and four-wheel drives,” said one employee.

But it is the company and the government that are to blame, according to the federal prosecutor in Altamira, Thais Santi, who reported with horror her visit to another tribe, the Arara at Cachoeira Seca.
Arara Indians look out from the door of their home in the region where Belo Sun Mining Corp. of Canada has obtained a license to take over all gold mining operations from local wildcat miners, near the river bend known as Volta Grande which will be largely exposed by the ongoing construction of the Belo Monte hydroelectric dam, near Altamira October 4, 2012. Brazil's Federal Prosecutor's Office has opened an investigation into Belo Sun's gold project and its impact on the environment and the Amazon tribes in the region, according to Federal Prosecutor Thais Santi in a press release last September.

“The scene in the village was that of a post-war holocaust with garbage everywhere,” she said in a recent interview. “The Indians did not move. They just stood there motionless, asking for food, asking to have homes built for them… They had stopped talking and meeting each other. The only time they met was at night to watch a telenovela on a plasma TV. It was brutal … The Emergency Plan had created an absolute dependence on the company.”

Santi said she is now preparing to bring a lawsuit against Belo Monte for “ethnocide against indigenous people”.

Government officials privately acknowledge the “Emergency Plan” should have been better planned. Reversing the damage seems impossible. Many villagers want more land and another “emergency program” of cash payments because, they say, the traditional way of life will soon be impossible and modern appliances, like cars and houses, will be no use without water and food.

The village chief, Juruna tells us he is planning another protest on canoes to try to secure more territory before the dam is completed.

“If they close the river, we’ll never resolve the land issue so we need to fight to stop them. We’ll do whatever it takes. We’ll go there and block it. The police can kill us. I’d rather die there than give up.”

But even the protests are changing the tribe’s way of life, which is now increasingly taken up by meetings. The endless round of talks with government officials, Norte Energia representatives, NGO activists and journalists takes up so much energy that many say they barely have time to tend the land or go fishing.

When they do fish, they say the catches are much lower than in the past because of the blasting and the dust and the extra upstream demand for food for the construction workers.

Conservationists say the situation will get worse when the river is closed off. There are several fish, including the acari, that are unique to the Volta Grande (Big Bend) where the hydropower plant is being constructed. Much of this aquatic life is dependent on the rise and fall of the river. Many species reproduce in flood water ponds that will disappear once the dam is built.

The fluctuation of the Xingu also affects the temperatures of tributaries, which could effect the tracaja turtle. The gender of this species is determined by whether the sand of the banks is hot (female) or cold (male). Reduced flow on the trunk river will mean lower temperatures and probably a higher proportion of males.

It is not only indigenous tribes who are affected. Glio Alvas da Silva has lived on the Xingu for 32 years, but his fishing community of mestizos at São Antonio was one of the first to be disrupted by the project. Before the construction started, he used to spend the night on the river, diving into the depths to catch zebra fish for aquariums, harpooning asas and using wooden traps for pescada. But once the project started, he said the catches started to decline drastically.

“I used to take 50kg each night. Now I’m lucky to get 2kg,” he said. Like many former fishermen in the area, he now makes a living breaking rocks for the dam.

Despite the many tales of woe, Belo Monte is the precursor for more barrages in Amazonia. The government considers hydropower, which accounts for 77% of Brazil’s energy, as the key to meeting the country’s climate commitments while maintaining economic growth. Many of the most accessible rivers are already tapped so future expansion is expected to come from the Amazon and Cerrado regions.

Next year, bidding will start for the next megadam - a 8,000MW plant at São Luiz on the Tapajós river, despite opposition from the Mundruku tribe, whose lands are likely to be partly submerged.

Along with President Dilma Rousseff’s championing of oil and agribusiness, such projects are undermining Brazil’s reputation a global leader on the environment.

In the most recent edition of Science magazine a group of Brazilian scientists warned there was a growing discrepancy between the positive role played by the country’s diplomats at UN climate talks, and the increasingly destructive direction of legislation and infrastructure projects that do not adequately balance environmental and social costs with the economic benefits.

Since 2008, the paper notes that Brazil has lost 44,100 sq km of protected land.

“Until now, unplanned agricultural expansion has been the greatest pressure on the environment, but new pressures are being exerted in response to rising demands for hydropower and mineral resources,” the authors noted. They called for greater investment in solar, wind and biofuels to reduce the destruction this causes.

Environmentalists say the Belo Monte case also highlights the importance of preserving indigenous territory which is home to the last good forests in Brazil. But under existing circumstances, the tribes who have long been the staunchest forest guardians are losing land, culture and the will to resist.

“Belo Monte is gradually weakening them. It’s very sad to see. We’ve been fighting together for 30 years, but now they are succumbing to drugs, drinking and prostitution,” said Antonio Melo, of the Xingu Vivo anti-dam campaign. “Dilma says the dams produce cheap electricity, but the cost is paid here in the destruction of the environment and the destruction of people’s lives.”

 on: Dec 16, 2014, 07:01 AM 
Started by Steve - Last post by Rad
US and India to announce joint climate change action during Obama visit

Suzanne Goldenberg in Lima
Monday 15 December 2014 17.36 GMT
The Guardian   

America and India will unveil joint efforts to fight climate change when Barack Obama visits New Delhi next month, as the US tries to keep up the momentum of international negotiations.

Obama’s visit – on the back of the United Nations talks in Lima – is seen as a key moment to persuade one of the world’s biggest carbon polluters to step up its efforts to fight climate change.

After China and the US, India is the world’s third largest producer of the greenhouse gas emissions causing climate change – although it is responsible for only about 6% of such emissions globally.

During the visit, Obama and the prime minister, Narendra Modi, are expected to unveil a number of modest initiatives to expand research and access to clean energy technologies.

The announcement in the works for Obama’s visit to Delhi will be modest in scale – nowhere near last month’s milestone agreement between the US and China to cut their carbon pollution.

“I am expecting a useful meeting but we don’t have anything in the works of the kind that we were involved with in China,” Todd Stern, the State Department climate change envoy, said.

But the visit still represents a key moment as major economies begin to deliver on the promises made in Lima to fight climate change.

Under the deal, all countries are expected to announce by 31 March emissions reductions targets and other actions to fight climate change.

With China already agreeing to cut its carbon pollution, and South Korea and Latin American countries paying into a climate fund for poor countries, the new all-inclusive nature of the Lima deal has put India under a spotlight.

“Are we expecting from India too much and leaving the polluters without any accountability?” the environment, forest and climate change minister, Prakash Javadekar, said. “This is a big thing that developing countries are doing.”

India is already understood to be working on its targets for the United Nations, but it will not put forward those numbers until June, Javadekar said.

However, he added that India would make ambitious efforts. “We are doing very aggressive actions on our own. So we would like to put them on record and on public domain,” he said.

Indian newspapers reported earlier this month that Modi was working to announce an “aspirational” year for peaking emissions ahead of Obama’s visit.

Javadekar pushed back on that idea – and on the entire notion that India should be required to peak its emissions at all, arguing that its emissions still represented only a fraction of China’s.

But he said that India was stepping up its efforts to deal with climate change, and was increasing its targets for expanding solar power and energy efficiency. “In the next two years, there will be major changes,” he said.

He said Modi would press Obama to set up a global clean energy research consortium or make funds available for licences for clean energy technologies, perhaps from international climate finance.

“They can compensate from Green Climate Fund to their companies,” Javadekar said. “Why should companies profit from disaster?”

 on: Dec 16, 2014, 06:58 AM 
Started by Steve - Last post by Rad

Estimated 15,000 people join ‘pinstriped Nazis’ on march in Dresden

Far-right group Pegida holds ‘Islamisation’ protest, using slogan from 1989 campaign against East German government

Kate Connolly in Berlin
The Guardian, Monday 15 December 2014 21.00 GMT    

Its members have been dubbed the “pinstriped Nazis” and they refer to their demonstrations as “evening strolls” through German cities. But on Monday night, an estimated 15,000 people joined Pegida, or Patriotic Europeans Against Islamisation of the West, in a march through Dresden carrying banners bearing slogans such as “Zero tolerance towards criminal asylum seekers”, “Protect our homeland” and “Stop the Islamisation”.

Lutz Bachmann, the head of Pegida, a nascent anti-foreigner campaign group, led the crowds, either waving or draped in German flags, in barking chants of “Wir sind das Volk”, or “We are the people”, the slogan adopted by protesters in the historic “Monday demonstrations” against the East German government in the runup to the fall of the Berlin Wall.

Associating themselves with the freedom demonstrations has given Pegida protests an air of moral respectability even though there are hundreds of rightwing extremists in their midst, as well as established groups of hooligans who are known to the police, according to Germany’s federal office for the protection of the constitution.

“The instigators are unmistakably rightwing extremists,” a federal spokesman said.

It was the ninth week in a row that Pegida had taken its protest on to the city’s streets in the eastern German state of Saxony.

Its first march, advertised on Facebook and other social media, attracted just 200 supporters. By last week the figure had risen to 10,000. By Monday night it had grown to an estimated 15,000.

“Muslims are plotting to infect our food chain with their excrement,” said a man in his 60s, who refused to give his name.

Another, a middle-aged woman in a red leather jacket, said she was shocked that “asylum seekers in Germany have expensive mobile phones, while I cannot afford such luxury and others still cannot afford to eat properly”.

While avoiding blatantly racist slogans, some told the Guardian of their angst over the “demise of the West” due to the rise of Islam or voiced their distaste of salafists and homosexuals in the same breath, or decried the recent decision by local politicians to increase the number of homes for asylum seekers. One group, knocking back bottles of the local beer, talked openly of their fears of what they call “fecal jihad”.

Mario Lupo, a 40-year-old tourist from Milan, was among the onlookers sipping glühwein at Germany’s oldest Christmas market, the Striezelmarkt.

“We came here for the romance and joviality of the Christmas markets,” he said. “We expected some light-hearted carousing appropriate to this time of year, but didn’t expect to stumble upon these rabble-rousers and police in riot gear.”

Among the groups taking part, according to the police, were two soccer hooligan organisations already known to the police called “Faust des Ostens” (Fist of the East) and Hooligans Elbflorenz (Florence of the Elbe Hooligans), as well as members of the National Democratic Party (NPD). Alongside them were old and young men and women, including families with children in pushchairs, many of whom said they had no political affiliation.

At one of two counter-demonstrations taking place elsewhere in the city centre, participants were keen to counteract the negative publicity the city of Dresden – usually better known for its splendid baroque architecture than its politics – has been receiving of late.

Its participants held banners reading “Act against the right” and “Nazis, no thanks”. The leader of the Green party, Cem Özdemir, who took part in the counter-protest, told the Guardian: “Being in a party whose members took part in the 1989 Monday demos, I take great umbrage at the abuse of the slogan used back then, ‘Wir sind das Volk’.

“We need to be permanently vigilant to ensure that Germany stays as open-minded as it had become in recent years and the government needs to ensure that it doesn’t take for granted that the far right will not make ground.”

Pegida’s growing presence has presented politicians with a dilemma over how to uncouple the strong neo-Nazi element believed to form the core of the protests from ordinary Germans with grievances against the government, who make up the bulk of the protesters.

Almost two-thirds of Germans, according to a poll for news magazine Spiegel by the TNS institute, believe that Angela Merkel’s government is not doing enough to address concerns about immigration and asylum seekers, and 34% think Germany is enduring a process of “Islamisation”.

The chancellor had earlier warned that a right to demonstrate did not extend to “rabble-rousing and defamation” against foreigners.

Merkel said that those participating in the protests should “take care not to be exploited” by radical elements trying to tap into fears of a foreigner takeover in Germany.

Led by Bachmann, a 41-year-old butcher’s son who runs a PR agency, Pegida has spawned clones across Germany. Legida is the name of the Leipzig branch, Bogida the Bonn branch, while in Darmstadt it is known as Dagida.

At a recent rally in Dresden, Bachmann’s hometown, he told his followers that while asylum seekers enjoyed luxury accommodation, many impoverished German pensioners were “unable to even afford a single slice of Stollen” (German Christmas cake).

Bachmann, who has a criminal record for burglary, for which he was sentenced to over three years in prison, and a conviction for drug possession, has claimed he is an insignificant part of Pegida.

“I’m just a small cog in a much bigger wheel,” he told the Süddeutsche Zeitung in a rare interview.

But political scientists have said the group’s presentation of itself as a harmless protest movement is what makes it so insidious.

“Something quite new is brewing here,” said Hajo Funke, a researcher into rightwing extremism at the Free University in Berlin. “We haven’t seen rudiments like these of an extreme rightwing inspired mass movement for years”.

Funke said that even the group’s name was incendiary. “It’s nothing short of a veritable call to arms by far-right populists,” he said, suggesting that the message triggered comparisons to Third Reich propaganda.

But across Germany resentment over a sharp rise in the number of refugees seeking political asylum in Germany, many from war-torn countries including Syria, Somalia, Afghanistan and Iraq, has grown in recent months.

Last Friday, a newly refurbished home for asylum seekers in Nuremberg in southern Germany was badly damaged in an suspected xenophobic arson attack. Anti-foreigner slogans and swastikas were found daubed on the walls.

 on: Dec 16, 2014, 06:56 AM 
Started by Steve - Last post by Rad
Russians must get used to new way of life after rouble crash, says bank chief

Currency hits historic lows after interest rate hike to 17% designed to halt fall

Shaun Walker in Moscow
The Guardian, Tuesday 16 December 2014 12.21 GMT      

The head of Russia’s Central Bank warned Russians on Tuesday morning that they should get used to a new way of life, as the country’s embattled currency continued to plummet. After a brief rally, the rouble hit new historic lows on Tuesday, just hours after an overnight rise in interest rates designed to halt its fall.

“We have to learn to live in a different zone, to orient ourselves more towards our own sources of financing, and to give a chance to import substitution,” said Elvira Nabiullina, the chair of the Central Bank. She said the interest rate decision had been taken to stem the negative effects of the falling rouble.

The Central Bank announced the dramatic hike in interest rates, from 10.5% to 17%, after a late-night meeting behind closed doors. Analysts were divided over the move, with some suggesting it was painful but necessary medicine and others claiming it could do further damage to the Russian economy.

The rouble has lost over half its value against the dollar since the year began, with falling oil prices and western sanctions combining to hit the currency. Oil prices fell below $60 a barrel for the first time since 2009 on Tuesday morning, putting further pressure on the rouble. The dollar was trading at 80 roubles on Tuesday afternoon, compared to 32.8 at the beginning of the year.

The fall in the rouble continues to affect ordinary Russians. With a large share of food and consumer goods imported, purchasing power has been decimated by the large drop in the currency. Russia has enjoyed years of growth under Vladimir Putin’s presidency, with the economy benefiting from high oil prices. Increasing numbers of Russians have got used to a higher quality of life, imported products and foreign travel, which makes the sudden reverse of fortunes come as a shock. Many people have cancelled new year’s holiday plans as they have watched the rouble fall and the price of travel rise accordingly. While analysts say a full-blown crisis is unlikely and that the rouble’s fall may soon stop, they also note that a return to the rates of the beginning of the year is almost unthinkable.

There were no queues for banks or obvious signs of panic in Moscow on Tuesday, where people have been slowly coming to terms with the falling rouble all year, but at certain shops people were rushing to buy up stock imported before the currency fell, and still being sold off at old prices. Some retailers have already raised prices, while others plan to do so soon. Queues were reported late into the night on Monday at Ikea, which has said it will raise prices later this week, while some people were stocking up on basic necessities such as food and medicine.

“I don’t trust the Russian tablets. I’ve always taken imported European ones,” said a pensioner, Nadezhda Kovalyova, who was stocking up on blood pressure pills at a central Moscow pharmacy. “I don’t have much in the way of savings but I thought it was better to spend them and get enough for the next few months, before the prices go up.”

Putin said in his state-of-the-nation address earlier this month that Russians should take advantage of sanctions and the falling rouble to develop domestic industry. However, during the oil windfall years, little of the infrastructure required for entrepreneurship and small businesses to flourish was set up, with corruption and red tape still major issues. Analysts said the increased interest rates would make it even harder for small businesses and potential domestic producers to function, because of the expense of taking out credit.

Early signs on Tuesday were that the rate hike would have little effect on the rouble’s fall, as government ministers and state-run companies began to snipe at each other in the first public signs of a split among the elites over the financial slowdown.

“The Central Bank’s decision to raise the rate to 17% was forced on them by the current climate and is the right one,” wrote Alexei Kudrin, who was finance minister until 2011, on Twitter. “The fall of the rouble and the stock market is not just a reaction to the low price of oil and to sanctions, but also due to a lack of confidence in the government’s economic policy.”

Kudrin specifically criticised Rosneft, the state-controlled oil giant, for a huge bond issue last week that many have suggested could have contributed to the rouble’s fall.

Rosneft’s spokesperson Mikhail Leontiev hit back, saying the Central Bank itself had been responsible for “pushing Russia towards recession”, and compared the interest rate hike to shooting dead someone who has a small cut to the finger, in order to alleviate the pain.


Russia has just lost the economic war with the west

The interest rate hike’s failure to halt a freefalling rouble means Russia is facing a perfect storm, only part of which is a full-blown currency crisis
Larry Elliott, economics editor
The Guardian, Tuesday 16 December 2014 11.58 GMT          

A full-blown currency crisis. That’s one way to describe the situation in Russia, where even the attempted “shock and awe” of a 6.5 percentage point-hike in interest rates failed to halt the rouble’s slide on the foreign exchanges. The other is to say that Russia has been engaged in an economic war with the west – and has just lost.

Put simply, this was Moscow’s Norman Lamont moment. Back in September 1992, the then chancellor said he would defend the pound and keep Britain in the exchange rate mechanism by raising official borrowing costs to 15%, even though the economy was in deep trouble at the time.

Russia is in even worse shape than Britain was in 1992. With a clapped-out manufacturing sector, it is over-reliant on its massive stocks of oil and gas at a time when the price of oil is falling through the floor. A barrel of Brent crude was trading at below $60 a barrel on Tuesday, compared to a recent peak of $115 in the summer.

The west knows all about the vulnerability of Russia’s economy. When the introduction of sanctions over Russia’s support for the separatists in Ukraine failed to bring Vladimir Putin to heel, the US and the Saudi Arabians decided to hurt Russia by driving down oil prices. Both countries will face some collateral damage as a result – and this could be considerable in the case of the US shale sector – but both were prepared to take the risk on the grounds that Russia would suffer much more pain. This has proved to be true.

At some point, lower oil prices will lead to stronger global growth, because consumers will have more money to spend and businesses will have more spare cash to invest. At that point, the price of oil will rise. But we are not there yet; in the short term the oil price is likely to keep falling.

So where does that leave Russia? Like Lamont, it has reached the end of the road with interest-rate increases. If a 6.5-point rise proves insufficient to halt the collapse of the rouble, it is hard to know what would do the trick. What’s more, it’s clear that some members of the policy elite in Moscow are unhappy with the idea of further damaging an already weak economy through draconian increases in interest rates to defend the currency.

As a result, there are now only two options. The first is to allow the rouble to find its own level, in the hope that the decline in the oil price will prove temporary and that rising demand for energy as the global economy recovers will push up the rouble against the dollar. The other is to introduce stringent capital controls. These are seen very much as a last resort by Moscow, but may prove necessary if the rouble rout continues.

The phrase “perfect storm” is much over-used, but in Russia’s case it is entirely apposite. The country has a collapsing currency, a collapsing economy and sky-high interest rates. The question now is how the Putin government responds. If Moscow softens its line over Ukraine, it will be a case of mission accomplished for the west. But if economic agony makes a wounded Russian bear even more belligerent, it could prove to be a hollow victory.


Rouble in freefall despite rate hike

Benchmark crude price drops below $60 as Russia’s dramatic move to raise interest rates to 17% fails to halt currency freefall

Jennifer Rankin   
The Guardian, Tuesday 16 December 2014 12.07 GMT      

Drastic action by Moscow authorities to defend the Russian currency has failed, as the rouble went into freefall to hit a new all-time low against the dollar.

Although the rouble rallied in early trading, the gains quickly unwound on Tuesday morning, with the Russian currency plunging more than a quarter to a new low of 80 per US dollar.

The further slide in the currency piles pressure on Russia’s central bank, which made a dramatic intervention at 1am last night, raising interest rates to 17%. This was the biggest one-day increase since the 1998 financial crisis that plunged Russia into recession and shook stock markets around the world.

Russia’s central bank said the rate rise was aimed at limiting currency depreciation and inflation risks. The rouble has halved in value in six months, sending inflation surging to 10%.

Central bank governor Elvira Nabiullina said western sanctions and the falling price of oil were to blame for the sharp fall in the value of the rouble. Russian banks are barred from raising money on western money markets as a result of sanctions, while the price of oil, Russia’s main export, hit a five-year low on Tuesday. Russia relies on oil revenues to pay for a little more than half of its state spending and needs oil to be at $100 a barrel to balance the budget.

The central bank said the economy would contract by up to 4.7% in 2015 if the oil price remained at $60 for 12 months.

Timothy Ash at Standard Bank said the Russian authorities had “a full-blown rouble crisis on their hands”, more akin to the ‘Made in Russia’ 1998 financial crisis, than the 2008 global crash. He blamed Russia’s central bank for not acting more decisively to stem the crisis. Last week, the bank raised rates by one percentage point to 10.5%.

Analysts think Russian policymakers could take even more drastic action to stabilise the currency, by stopping people from taking money out of the country.

The Russian government faced further woe, as the benchmark price of oil - its main export - fell below $60 a barrel for the first time since July 2009.

The cost of a barrel of Brent crude fell 2.15% to $59.93 on Tuesday morning, its lowest point since July 2009. Nymex US crude fell through the $60 floor on Monday, with further downward momentum on Tuesday morning taking it down 1.8% to $54.95.

Oil prices have almost halved since June, but the producer cartel Opec is insisting it will not cut output to reduce the glut in supply.

Prices softened after data showed that China’s factory sector had shrunk for the first time in seven months in December, further dampening demand for oil.

On Monday, Opec officials reiterated their opposition to cutting production. Abdalla el-Badri, the Opec secretary general, said the group could manage an oil price slump without amending production. Suhail bin Mohammed al-Mazroui, oil minister of the United Arab Emirates, an Opec member, said there was no need for an emergency meeting of the cartel to help support prices.


The big risk of the Russian central bank’s drastic interest rate rise

As the pressure grows on the rouble and Putin’s regime, the geopolitical temperature goes up
Nils Pratley   
The Guardian, Tuesday 16 December 2014   

Burn some speculators and show you’re serious. That’s the thinking behind the Russian central bank’s middle-of-the-night hike in interest rates from 10.5% to 17%. As with Norman Lamont on Black Wednesday in the UK in 1992, the challenge is to maintain credibility. Red Monday, as it is already being dubbed, could backfire in similar style.

The Russian authorities’ desire to do something dramatic is understandable. The rouble plunged almost 10% on Monday, indicating a loss of confidence that goes beyond a plunge in oil prices. Moscow, in the face of tightening US-led sanctions, looked weak and its economy at the mercy of the foreign exchange markets.

The alternatives to a rate hike were unpalatable. Doing nothing – or allowing the rouble to find a market level – was an invitation to more selling. As the currency fell, more inflation was being imported. A recession worth, say, 3% of GDP was in danger of becoming a nailed-on 5% slump, or worse.

Alternatively, Moscow could have imposed currency controls. But what’s the point? Controls might simply provoke panic and could also be ineffective since, in Russia, there are always ways around most official diktats. So a rate hike was the only plausible way to make a statement.

Is it credible though? The cost of 17% interest rates, if sustained for long, is the destruction of a large part of the domestic economy. In the UK in 1992, George Soros et al knew the Tory government of the day would not ruin UK mortgage-holders for the sake of currency stability with Germany.

Russians’ pain threshold is greater under Putin, one assumes. Even so, 17% demands an immediate rally in the rouble, or else the policy looks risible. The Russian central bank’s only other tactic is to spend foreign reserves to prop up the currency, a tactic with equally uncertain prospects.

Until now, the City has seen as the decline of the rouble as irrelevant in market terms. A collapsing Russian economy was seen as too small to make a difference to the global outlook; investors were keener to count the wider blessings of a lower oil price.

That theory needs a rapid qualification. Interest rates at 17% illustrate the extreme pressure on the unpredictable Putin regime. As the oil price falls, the geopolitical temperature is rising.
BT verdict on hold

The winner of BT’s reverse auction is a surprise: it was the German and French owners of EE, not the Spaniards behind O2, who were more desperate to sell. And desperation is the right word. At £12.5bn, EE is being sold debt-free at just 7.8 times its top-line earnings before interest, tax and depreciation. That’s not much for the UK’s biggest mobile provider.

Deutsche Telekom will take a 12% stake in BT and Orange 4%. That still leaves about half the purchase price, or £6.25bn, to find in cash. If a rights issue is required, it shouldn’t be a problem. Investors clearly back chief executive Gavin Patterson’s analysis that more consumers will want to buy home and mobile telecoms packages from the same supplier.

Yet BT shareholders shouldn’t celebrate their bargain too merrily. Their company is attempting to advance on many fronts simultaneously, which is not a risk-free strategy. It has splashed out on football rights in a direct challenge to Sky. Buying EE will trigger a response from Vodafone, Liberty (owner of Virgin) and Telefonica’s O2. One way or another, there will be a backlash.

There is also the regulator. An awful lot of spectrum will be housed within BT if the EE purchase is completed. Some level of forced disposals is a possibility to boost competition. In short: this looks a decent deal on day one, but judge its success only when BT knows how many of EE’s 24.5 million mobile customers it has retained three years from now.
Billionaires’ folly

You can’t go wrong investing alongside the great Sir Philip Green and the great Mike Ashley, right? Wrong.

MySale, the Australian “flash” sale website backed by the brace of retailing billionaires, saw its share price crash to 81.5p, versus June’s float price of 226p, as the company’s first gift to the London stock market was a mighty profits warning. This year’s profits will be “materially below” expectations, shorthand for awful.

Green paid 146p a share for a 22% stake in the month before the float, so the Topshop titan is down by the thick end of £20m, which is embarrassing for him rather than financially painful. Ashley paid a little more per share for Sports Direct’s 4.8% holding. He can also afford to take the paper loss on the chin. But his recent punting record now seems even worse; Sports Direct’s other little wager, on Tesco, is not looking good either.

Optimists may say that MySale must be a bargain at its shrunken valuation of just £130m (including £33m of cash). Not so fast. Green can give its founders a kick, but the basic problem may be fundamental. The MySave model is designed to work by shifting between northern and southern hemispheres to capitalise on selling seasons. Nice idea, but a lot of money will have to be spent on new websites to discover if it actually works in practice.


The falling rouble – all you need to know about Russia’s currency crisis

Economic and political headwinds are battering Russia whose currency has been weakened by the freefalling oil price and western sanctions

Jennifer Rankin   
The Guardian, Tuesday 16 December 2014 10.34 GMT   

The Russian central bank raised interest rates to 17% in an attempt to prevent the rouble’s collapse. But the dramatic move failed to stem the decline, with the currency hitting new all-time lows against the dollar.

Why has Russia’s central bank raised interest rates?

Russia’s central bank has taken the drastic step of raising its main interest rate to 17%, a rise of 6.5 percentage points. The announcement – made around 1am local time – is a desperate attempt to restore confidence in the rouble, which has almost halved in value against the dollar in six months. Last week, the central bank raised rates by 1%, but this failed to calm jitters about an economy that is suffering from falling oil prices and western sanctions.
Did the rate hike work?

No. A strong early rally in the value of the rouble soon went into reverse, sending the currency to an all-time low against the dollar of $66.59. The rouble is worth 3.6% less since the central bank’s emergency rate rise.

What options do Russian policymakers have now?

Only bad ones. The central bank can continue to defend the rouble, by spending its foreign exchange reserves to support the currency. Although Russia sits on some of the largest foreign exchange reserves in the world because of its oil and gas earnings, its cash pile is shrinking fast. In 2014, it spent $80bn supporting the rouble, around one-fifth of the value of its reserves.

The bank could raise rates again, but this would be painful for borrowers, worsening the country’s economic slowdown.

The other option is currency controls – stopping people from taking money out of the country. But this could turn a crisis into a full-blown panic.

How bad is the situation?

It’s bad - Timothy Ash at Standard Bank says Russian authorities now have “a full-blown rouble crisis on their hands”.

The dread scenario for Russian policymakers is a re-run of the 1998 financial crisis, a currency panic that plunged Russia into a deep and painful recession, sending shockwaves through financial markets around the world.

In August of that year, fears of a rouble devaluation led to the collapse of Russia’s stock, bond and currency markets. The central bank unveiled emergency measures, but were unable to beat the markets. The rouble lost three-quarters of its value in three weeks. The bank eventually hiked rates to 100% and Russia defaulted on its debts. The following year inflation spiked at 85% and people were demonstrating in the streets about high food prices.

Does this mean western sanctions against Russia are working?

Partly, but sanctions are only part of the story. Russia’s central bank governor, Elvira Nabiullina, on Tuesday blamed falling oil prices and western sanctions for the pressure on the currency.

Oil prices have fallen below $60 a barrel, a huge problem for Russia, where oil and gas revenues finance more than half of the state budget. Russian authorities were banking on oil prices of $100 per barrel in 2015 to balance the books and are forecasting a sharp recession if prices remain at current levels.

At the same time Russian banks are frozen out of western capital markets, as a result of EU and US sanctions over Russia’s actions in Ukraine. As a result, banks must turn to the central bank to help them refinance their debts, further straining resources.


Russian central bank raises interest rate to 17% to prevent rouble’s collapse

Bank’s decision, sparked by fears plunging global oil price would devastate country’s economy, follows day of market stress
Larry Elliott, economics editor
The Guardian, Monday 15 December 2014 23.37 GMT   

Russia’s central bank has taken drastic action to halt the rouble’s freefall on the foreign exchanges by raising interest rates by 6.5 percentage points to 17%.

After a day of turmoil dominated by fears that a crashing global oil price would devastate Russia’s energy-dominated economy, an after-hours meeting of the central bank in Moscow decided emergency action was needed to prevent the rouble’s collapse.

The bank said the increase in borrowing costs – which will deepen Russia’s recession if sustained for a prolonged period – was needed to end currency depreciation and to combat inflation.

Higher interest rates tend to make currencies more attractive to foreign investors and the rouble rose against the dollar in the wake of the surprise announcement.

Earlier, a 10% fall in the value of the rouble against the dollar had badly rattled global markets, with the FTSE 100 index in London closing at its lowest level of 2014.

Investors dumped shares as they weighed up the risk that a deepening economic crisis would destabilise Russia and make it more difficult for the west to deal with its president, Vladimir Putin, adding to geopolitical tensions in eastern Europe and the Middle East.

The huge jump in interest rates was seen by analysts as an attempt by the central bank to show that it was determined to protect the rouble. A smaller one-point rise to 10.5% last week had failed to impress financial markets at a time when the price of oil was plunging to a five and a half year low.

Earlier, Russia bought roubles for dollars on the foreign exchanges but failed to prevent the biggest one-day decline in the currency since Russia’s debt default in 1998.

The fall meant it took 63 roubles to buy a dollar, a decline of 45% since the start of a year that has seen the price of oil drop from $115 a barrel (£73) to barely $60 a barrel.

In London, the FTSE 100 index of leading shares fell for the sixth day in a row, with energy companies particularly hard hit by the drop in Brent crude to about $61 a barrel.

The FTSE has lost 9% since the start of last week and closed at 6182 points. They day’s 118-point fall means it is more than 500 points lower than its level at the start of the year.

Although the near-halving of the cost of crude oil since the summer should eventually boost global growth by increasing consumer spending power and reducing business costs, investors are concerned that lower oil prices reflect softer demand from a weakening global economy.

Major European bourses lost 2% of their value as the rouble fell against the dollar despite the efforts of the Russian central bank.

Neil Shearing, chief emerging market economist at Capital Economics, said there was now speculation that Russia would resort to capital controls to defend the rouble.

Oil and gas account for 70% of Russia’s exports and Moscow needs an oil price in the region of $100 a barrel to balance its budget. Even before the dramatic announcement of the interest rate rise, the central bank said the economy would contract by 4.5% in 2015 if the oil price remained at its current level for the next 12 months.

Oil prices came under renewed downward pressure on Monday after Opec stressed it had no immediate intention of curbing production. Some analysts believe Saudi Arabia and the US are deliberately pushing oil prices lower in order to put pressure on Putin. Washington is contemplating tougher sanctions against Russia for its support to separatists in eastern Ukraine.

Neil Barnett, of the Centre for Policy Studies, said: “The bad news for Russia is that the outlook for oil prices appears weaker and weaker. This week, the International Energy Agency cut its demand growth forecast. In combination with still-growing US production and Saudi determination to keep prices low, it means that prices next year are likely to fall yet further.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The pace of the fall has been breathtaking, with oil-related stocks bearing the worst of the pain. We are now closing in on a technical correction [10% fall] after just six abysmal trading sessions. To give some perspective, we already witnessed a 10% fall in the UK market in September and October of this year, but this took place over six weeks, not six days.”

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