Archive for March 8, 2007

Politics this week: 3rd – 9th March 2007

March 8, 2007 Leave a comment

Politics this week

Mar 8th 2007
From The Economist print edition


Lewis “Scooter” Libby, the former chief of staff to Vice-President Dick Cheney, was convicted on four out of five counts of lying to FBI agents and obstruction of justice. The charges had arisen from the leaking of the name of a CIA agent to the press, in an attempt to discredit an opponent of the invasion of Iraq. Mr Libby’s conviction added to the administration’s growing embarrassment about the war—and about Mr Cheney, one of its chief promoters. See article

Reports of dilapidated facilities and patient neglect at America’s foremost military hospital, the Walter Reed Army Medical Centre, where many casualties of the Iraq war are being treated, caused uproar in Congress. On March 1st the man in charge of the hospital, Major-General George Weightman, was fired, and the next day the army secretary, Francis Harvey, was forced to resign. President George Bush announced that he was setting up a bipartisan panel to look into the treatment of wounded soldiers. See article

Shinzo Abe, Japan’s prime minister, caused offence in neighbouring countries and elsewhere by suggesting there was no clear evidence that some 200,000 women who worked as prostitutes for the Japanese army in the 1930s and 1940s had been coerced. See article

China’s parliament, the National People’s Congress, opened its annual 12-day session. The budget was announced, including an unusual 18% increase in spending on defence. In his “work report”, Wen Jiabao, the prime minister, promised to reduce inequality. The NPC is expected to pass a controversial law enshrining private property rights. See article

A powerful earthquake struck the Indonesian island of Sumatra, near the city of Padang, killing more than 50 people. The next day, more than 20 died in a plane crash at Yogyakarta, on the neighbouring island of Java. See article

After last month’s agreement on steps towards ending its nuclear programme, North Korea started bilateral talks on normalising relations with both America and Japan. The talks with Japan ended abruptly on their second day, after a North Korean walkout, apparently in anger at Japan’s stance on North Korea’s abduction of Japanese citizens in the 1970s and 1980s.

Jordan’s King Abdullah gave an address to both houses of the American Congress, urging new diplomacy to solve the Palestinian conflict. Reports suggested that a quartet of Arab states—Egypt, Jordan, Saudi Arabia and the United Arab Emirates—could join Israel, the Palestinian president and the United States in talks.


After a slight drop in Iraq’s sectarian killings, two suicide-bombers, presumed to be Sunni insurgents, killed at least 117 Shia pilgrims on their way to a festival in the holy city of Karbala, where more than 1m had gathered; at least 40 others were also killed in attacks en route. See article

A former deputy defence minister of Iran, Ali Reza Asghari, a retired general, was reported to have disappeared last month in Turkey; a Saudi newspaper claimed he was being questioned “in a northern European country” before being flown to the United States. It was not clear whether he had defected or been kidnapped.

The first African Union peacekeeping troops, from Uganda, arrived in Somalia’s capital, Mogadishu, to replace Ethiopian troops who helped the country’s transitional government defeat the Islamist militias earlier this year. They were greeted at the airport by mortar fire from insurgents.

Three Britons, a British-Italian woman and a French woman disappeared in eastern Ethiopia; their vehicles were found, shot up. Rebels of the Afar tribe were suspected of kidnapping them. See article

Côte d’Ivoire’s president, Laurent Gbagbo, and the main rebel leader, Guillaume Soro, signed an agreement to end the divided country’s civil war. The accord sets out a timetable for disarmament, voter registration and fresh elections. See article

The Nigerian ruling party’s presidential candidate, Umaru Yar’Adua, who has a kidney illness, flew to Germany for a medical examination, casting more doubt on his suitability as the front-runner in next month’s election.

Before departing for a week-long trip to five Latin American countries, George Bush emphasised his commitment to helping the region with social justice, including health, education and housing.

Oscar Berger, the president of Guatemala, ordered a purge of the police. Four police officers, including the head of the organised-crime unit, were accused of the murder last month of three politicians from El Salvador; the police concerned were themselves murdered days later in jail.

An outbreak of dengue fever in central South America worsened. Ten people have died in Paraguay; Bolivia, Brazil and Argentina have also suffered outbreaks, prompted by heavy rains and flooding.

Getty Images
Getty Images

Britain’s House of Commons voted to create a fully elected House of Lords. Tony Blair, the prime minister, and Jack Straw, the Commons’ leader, had favoured a half-elected, half-appointed upper house. See article

European Union leaders held a summit in Brussels to discuss climate change, energy policy and the progress of economic reform.

Estonia’s centre-right prime minister, Andrus Ansip, is likely to remain in office after his party and its coalition partner took the most votes in the country’s parliamentary election. This is a rare case of a government being re-elected in eastern Europe.

Planned job cuts at Airbus became an issue in the French presidential election. As some 15,000 workers went on strike in Toulouse, both of the main candidates, Nicolas Sarkozy and Ségolène Royal, promised to pump more public money into Airbus’s parent company if need be to protect jobs in France.

Ramush Haradinaj, a former prime minister of Kosovo who was a leader of the Kosovo Liberation Army in the 1998-99 war, went on trial before the war-crimes tribunal in The Hague. The chief prosecutor, Carla del Ponte, gave warning that some witnesses against Mr Haradinaj were being intimidated.

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Business this week: 3rd – 9th March 2007

March 8, 2007 Leave a comment

Free articles from this week’s edition of The Economist
China’s property law | Producing ethanol from trees | Scary markets | Fall-out from Scooter Libby’s conviction | Japan’s floundering prime minister | Democracy for Britain’s upper house | Turkish nationalism on the march | Hugo Chávez’s Venezuela | Diplomacy over Israel and Palestine | Energy and nationalism | Aviation in India | Regulators clamp down on insider trading | That might be the Higgs boson | Oxford and the Cowley Road | Arthur Schlesinger junior, historian and liberal

Business this week

Mar 8th 2007
From The Economist print edition

America’s economy betrayed signs of slower growth. Labour costs rose and factory orders hit a six-year low, with orders for big-ticket items falling. Meanwhile, the government reported that productivity gains slowed, with an increase in the final quarter of 2006 of about half of what economists had previously expected.

Alan Greenspan, former chairman of the Federal Reserve, said there is a “one-third probability” of an American recession this year. He also predicted (before the latest economic data were released) that the current economic expansion will not last as long as the previous one. But Mr Greenspan, who has been particularly outspoken lately, stands in contrast with his successor, Ben Bernanke, who recently told Congress the Fed believes that the American economy will strengthen this year. See article

Meanwhile Mr Bernanke continued the Fed’s campaign to rein in the mortgage portfolios held by two government-sponsored enterprises, Fannie Mae and Freddie Mac. Mr Bernanke suggested that the companies’ sizes and structures posed a risk to financial markets. He called for stronger regulation and supervision of the institutions.

Oil prices jumped after the American government reported an unexpected drop in crude-oil stocks amid the lowest import levels since 2005. Analysts had been expecting an increase.

Investigations into trading in the shares of New Century Financial, a big lender in the subprime-mortgage market, highlighted ongoing problems in the industry. Several big lenders have suffered from a growing number of defaults and late payments. See article

New limits on tax relief offered on shareholder loans in highly leveraged deals will reportedly be reviewed by Britain. The proposed change could have an effect on booming—and controversial—private equity.

Eliot Spitzer, the former attorney-general of New York state, was criticised by a panel of retired judges. After a review, the group discounted his charges that Maurice Greenberg, the boss of American International Group, a big insurance company, had a conflict of interest that hurt his charitable foundation while benefiting AIG. Mr Spitzer is now New York’s governor.

Thousands of Airbus employees went on strike in France to protest against a radical company restructuring that has drawn criticism from candidates in France’s fiercely contested presidential race. The European aircraft-maker plans a total of 10,000 job cuts across the region in the next four years, including 4,300 in France. Politicians have made competing offers to save jobs.

Luc Vandevelde, the chairman of Carrefour, resigned in a feud with its controlling family. He was replaced by a member of that family. Meanwhile, a pair of activist investors, including Bernard Arnault, France’s richest man, bought a big stake in the French-based retail chain.

Britain faced heavy lobbying from the European Commission to accept an “open skies” agreement that it struck with America. About 40% of US-European air traffic goes through London’s airports. But Britain objects to the provisional air-travel accord, contending that America has failed to give European airlines sufficient access to its own market. See article

Citigroup announced a bid of ¥1,350 ($12) per share for Nikko Cordial, a Japanese brokerage firm. The deal values Nikko at up to ¥1.3 trillion. Citigroup was also reported to be in talks with the Bank of Overseas Chinese about buying a stake in the Taiwanese financial institution.

Research in Motion said Jim Balsillie was resigning as chairman of the technology company. The news came after the firm, which makes the BlackBerry, reported accounting errors on stock options of more than $250m. Mr Balsillie will stay on as a director and co-chief executive of the company.

Federal regulators charged that investors pocketed more than $5.3m in illegal profits from insider trading before TXU, an American utility, said it had agreed to be sold for $45 billion by a group led by big private-equity firms. The Securities and Exchange Commission, the market regulator, said the insider trading was undertaken through foreign brokers to conceal the investors’ identities. See article

The yen continued its volatile swings against the dollar. The Japanese currency had climbed rapidly against the dollar after falling slowly in January, but later gave up some of its gains.

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