Archive for July 16, 2007

Politics this week: 7th – 13th July 2007

July 16, 2007 Leave a comment

Politics this week

Jul 12th 2007
From The Economist print edition


As more Republican senators withdrew their support from his policy on Iraq, George Bush pleaded for more time and urged people to wait for a progress report in September on the troop “surge”. Congress ignored him and began two weeks of debate on an interim progress report. See article

Meanwhile, Mr Bush’s approval rating dropped to 29%, according to Gallup. Its poll was taken after the president commuted the jail term of Lewis “Scooter” Libby, a former White House aide who was sentenced for perjury. Two-thirds of Americans thought the president should not have intervened in the case, said Gallup (6% wanted him to grant a full pardon).

It was also a bad week for John McCain. The Arizona senator’s presidential campaign received a serious blow when both of his top aides resigned. Mr McCain, who is trailing his Republican rivals for the party’s nomination in opinion polls and fund-raising, vowed to fight on. See article

Florida became the latest state to adopt tough rules on global warming, unveiling a regulation that would reduce greenhouse-gas emissions to 80% below their 1990 levels by 2050. New Jersey also adopted a similar law.

The stalemate between Pennsylvania’s Democratic governor and Republican-controlled Senate over the state budget was resolved following a brief shutdown of some government services. A row over a surcharge on electricity bills to pay for greener energy measures was deferred until the autumn.

Four Islamist terrorists were given life sentences for plotting to explode bombs on London’s transport system on July 21st 2005 (two weeks after suicide-bombers killed 56 people). All four men were originally from the Horn of Africa.

The French president, Nicolas Sarkozy, attended a meeting of finance ministers from the euro area in Brussels to explain why France might not meet its commitment to eliminate the budget deficit by 2010. Several of those attending the meeting grumbled, but there is little they can do.

European finance ministers endorsed a French candidate, Dominique Strauss-Kahn, to take over from Rodrigo de Rato as head of the International Monetary Fund.

Cyprus and Malta won approval to join the euro on January 1st 2008. They will become the single currency’s 14th and 15th members. See article


After a week-long siege of the Lal Masjid or Red Mosque in Islamabad, some 200 Pakistani commandos stormed the compound and met fierce resistance from militants sheltering inside. Nearly 100 people died in the ensuing battle, including the militants’ leader, Abdul Rashid. See article

Prosecutors in Indonesia announced a civil suit seeking the recovery of $440m from Suharto, the president who stood down in 1998. They also sought $1.1 billion in damages. In 2000 the government dropped criminal charges after doctors said Mr Suharto was too ill to face them. See article

Zheng Xiaoyu, the former head of China’s State Food and Drug Administration, was executed for corruption. He had been convicted of accepting bribes to approve medicines. There has been a rash of cases involving tainted Chinese exports, ranging from toothpaste to pet food.

Australia’s prime minister, John Howard, termed “provocative and insensitive” the appointment of Julian Moti as the Solomon Islandsattorney-general. Mr Moti faces charges of child abuse in Australia, which has a peacekeeping mission in the Solomons.

One of the most lethal terrorist bombs since the American invasion of Iraq four years ago killed at least 160 civilians, including women and children, in a village inhabited by Shia Turkomans north of Baghdad. See article

Representatives of Hamas, the Islamist movement that now controls the Gaza Strip, boycotted an emergency session of the Palestinian parliament called by President Mahmoud Abbas, who heads Fatah, the main secular party. Without Hamas’s presence, there was no quorum, thus preventing the ratification of the emergency government appointed by Mr Abbas three weeks ago.

A suicide bomber in Algeria killed at least ten people in an attack on a barracks, just before the opening of the All Africa Games, one of the continent’s big sporting events.

Libya’s Supreme Court upheld death sentences imposed in 2004 on five Bulgarian nurses and a Palestinian doctor for allegedly infecting children with HIV. But a mediating body may be near to agreeing on a financial settlement with the children’s families, which would mean that they drop their right to demand the death penalty.

In Ethiopia a state prosecutor called for the death penalty in the trial of 38 opposition leaders who were found guilty of inciting violent protests that left nearly 200 dead in the wake of flawed elections in 2005. The trial judge will pass sentence in the next few weeks. The United States, Ethiopia’s ally in the war against Islamist terrorism in the Horn of Africa, called for leniency. See article

In Colombia, the FARC guerrillas admitted that they had failed “to care for” 11 hostages killed last month, and said they would turn their bodies over to the International Red Cross. Earlier, hundreds of thousands of Colombians took to the streets in protests against the killings. See article

A small guerrilla group claimed responsibility for bomb attacks that shut down four gas and oil pipelines in Mexico, and demanded that the government release three activists arrested in the southern state of Oaxaca in May.

In a surprise decision, a judge in Chile rejected a request by Peru for the extradition of the country’s former president, Alberto Fujimori, to face corruption and human-rights charges. The case will now go to the Supreme Court. Last month Mr Fujimori had announced plans to stand in a Japanese election in an apparent ruse to escape extradition.

Canada’s prime minister, Stephen Harper, said his government would order up to eight ice-breaking corvettes to assert the country’s claim to sovereignty over Arctic seaways. See article


Snow fell in Buenos Aires, for the first time in 89 years.

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Business this week: 7th – 13th July 2007

July 16, 2007 Leave a comment

Highlights from this week’s edition of The Economist
The surprising revival of Europe | Jihad on the internet | Subprime mortgage problems shake global markets | Pakistan’s mosque showdown | George Melly, jazzman and writer | Iraq’s wobbly coalition government | The paradox of Colombia’s Uribe | Continuing arguments over Kosovo’s status | Scotland’s high-tech oil-support businesses | Germany’s economy | What computing can teach biology, and vice versa | The tale of Elizabeth Marsh

Business this week

Jul 12th 2007
From The Economist print edition

Investors reacted nervously to more bad news stemming from the slowdown in America’s housing market. Standard & Poor’s and Moody’s disclosed that they were downgrading or considering downgrading credit ratings on more than $17 billion-worth of bonds backed by subprime mortgages (aimed at low-income and poor-credit households) because they had underestimated the level of defaults. Stockmarkets in America and Europe fell sharply and the dollar continued its slide, reaching a record low against the euro. See article

Shareholders in both the Chicago Board of Trade and Chicago Mercantile Exchange voted to support their merger, ending a nine-month effort to create the world’s largest derivatives platform.

After weeks of speculation Rio Tinto, a global mining giant, formalised a $38.1 billion offer for Alcan, an aluminium producer based in Canada. Alcan was open to a deal after Alcoa, its American rival, made a hostile $27 billion bid in May. Alcan’s board unanimously recommended Rio’s offer, one of the biggest in the booming commodities sector in recent years.

Danone, a French food-group which last week sold its biscuits division to Kraft, agreed to buy Numico, a Dutch company specialising in baby food and “clinical nutrition” for the elderly and sick, for euro12.3 billion ($16.8 billion). Danone maintains that the acquisition will enhance its yogurt and bottled-water divisions (which include the Volvic and Evian brands) as it repositions itself as a leader in the fast-growing health-and-wellness market. Some analysts, however, thought it was paying too much for a business in which it had little experience and viewed Danone’s move as a defence against any potential takeover bids.

Google said it would pay $625m for Postini, a private firm best known to office workers for its web-based e-mail security and spam-sieving technology. The deal will expand the services available in the Google Apps package tailored to the corporate world, further encroaching on Microsoft’s territory.

Nielsen//NetRatings made changes to its gauge of activity on the internet by adding the number of minutes spent by browsers at websites to its criteria. The media research company wants to provide a more accurate measure of audience engagement to advertisers, which allocate spending by pages viewed.

Boeing unveiled the 787 Dreamliner in an elaborate ceremony broadcast on TV and the internet. The Dreamliner is Boeing’s first new jet in 12 years. It is partly made from light composite material, and so uses 20% less fuel per passenger than similarly sized aeroplanes. The company’s order book for the aircraft is full.

The $8.1 billion deal between General Electric and Abbott Laboratories unravelled. GE said in January it was buying Abbott’s lucrative medical-diagnostics division, but the pair couldn’t agree on terms.

Sony cut the price of its PlayStation 3 games console by $100 in America in an effort to boost sales. Sony’s device is lagging in popularity behind Microsoft’s cheaper Xbox 360. Its rival seemed unfazed by the price cut, though it has its own problems. Microsoft said last week that it would take a profit charge of more than $1 billion to cover complaints about a flaw in its console.

There were signs that Russia is softening its stance towards Western participation in its energy projects. Gazprom, the state-controlled gas monopoly, reversed course on allowing foreign firms a stake in the Shtokman field (Gazprom rejected five potential partners last autumn). And Royal Dutch Shell signed a co-operation pact with Rosneft, Russia’s state oil company. Shell was pressured into ceding co
ntrol of an energy project to Gazprom last year, but analysts say Russia is now facing up to the costs of developing its oil and gas assets alone.

The International Energy Agency issued a pessimistic outlook on the supply of oil and natural gas, predicting a “crunch” after 2010 because of slow production among non-OPEC countries. The demand for oil was forecast to rise by 2.2% a year. As a consequence the IEA does not expect much easing of oil prices, which hit an 11-month high this week.

There was some good news for George Bush. The White House’s mid-year budget review forecast that because tax revenues were higher than expected during the spring, the government’s spending deficit would be $205 billion this fiscal year, $39 billion less than had been thought. Others, including Congress’s number-crunchers, predict the actual deficit will be even less when it is made official in October.

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