Blind Chinese activist Chen arrives in New York

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Blind Chinese dissident Chen Guangcheng (C) is helped from a vehicle as he arrives in New York May 19, 2012. REUTERS/Eduardo Munoz


By Maxim Duncan and Lily Kuo

NEW YORK |
Sun May 20, 2012 1:29am EDT

(Reuters) – Blind Chinese dissident Chen Guangcheng arrived in the United States on Saturday and declared “equality and justice have no boundaries” after China let him leave a Beijing hospital to quell a sensitive diplomatic rift between the two countries.

Chen escaped from house arrest in northeastern China last month and sought refuge in the U.S. Embassy in Beijing, embarrassing China and creating an uncomfortable backdrop for U.S. Secretary of State Hillary Clinton’s visit to improve ties between the world’s two biggest economies.

“I am very gratified to see that the Chinese government has been dealing with the situation with restraint and calm and I hope to see that they continue to open discourse and earn the respect and trust of the people,” Chen, speaking through a translator, told reporters outside a New York University housing building in Manhattan’s Greenwich Village.

Chen, one of China’s most prominent dissidents, is going to study as a fellow at the NYU School of Law. Leaning on a crutch because of an injury suffered during his escape, he smiled and waved to a cheering crowd before speaking to reporters.

“I’m very grateful for the assistance of the American Embassy and also (for) receiving a promise from the Chinese government for protection of my rights as a citizen over the long term,” he said. “I believe that the promise from the central government is sincere and they are not lying to me.”

“I believe that no matter how difficult the environment nothing is impossible as long as you put your heart to it … I hope everybody works with me to promote justice and fairness in China,” he said. “Equality and justice have no boundaries.”

Chen, 40, who taught himself law, was a leading advocate of the rights defense movement in China. He gained prominence by campaigning for farmers and disabled citizens and exposing forced abortions.

He expressed concern on Saturday that “acts of retribution may not have abated” in his hometown of Shandong. The village of Dongshigu, where Chen’s mother and other relatives remain, is still under lockdown.

“We hope to see in the future a thorough investigation into these events,” Chen said.

Chen’s nephew was denied his family’s choice of lawyers on Friday to defend a charge of “intentional homicide”, the latest in a series of moves to deny him legal representation, and underscores the hardline stance taken against the dissident’s family.

STRAINED TIES

U.S. President Barack Obama’s administration had feared a dispute over Chen’s fate could sour already strained ties with China and generate criticism of Obama at home. Beijing has accused Washington of meddling in its affairs in the case.

Chen’s abrupt departure from Beijing came nearly three weeks after he arrived at the Chaoyang Hospital from the U.S. Embassy, where he had taken refuge after an escape from 19 months of house arrest in his home village.

A United Airlines plane carrying Chen, his wife and two children, landed at Newark Liberty International Airport in New Jersey shortly after 6 p.m. (2200 GMT) on Saturday and Chen was the first person taken off the plane. Some passengers said they had been prevented from taking photos during the flight.

Chen was accompanied on the flight by two Chinese-speaking officials from the U.S. Embassy in Beijing and was met at the airport by State Department officials and Jerome Cohen, co-director of the U.S.-Asia Law Institute at New York University, a State Department official said.

A White House official, Ben Rhodes of the National Security Council, praised the diplomacy that led to Chen’s release.

“We welcome this development and the fact that he will be able to pursue a course of study here in the United States upon his arrival,” he said during the Group of Eight summit the United States is hosting at Camp David, Maryland.

The Chinese Foreign Ministry said this month that Chen could apply to study abroad, a move seen as a way of easing Sino-U.S. tensions on rights.

Chen’s friend, Jiang Tianyong, cited the activist as saying that he and his family obtained their passports at the airport in Beijing hours before he boarded the flight.

“I’m obviously very happy,” Jiang said. “When he boards the plane, he can finally say: ‘I’m free.’ At the same time, I feel a sense of regret because such a large country like China can’t even tolerate a citizen like him to exist here.”

Chen was jailed for a little more than four years starting in 2006 on what he and his supporters say were trumped-up charges designed to end his rights advocacy.

Chen had accused Shandong province officials in 2005 of forcing women to have late-term abortions and sterilizations to comply with China’s strict family planning policies. Authorities moved against him with charges of whipping up a crowd that disrupted traffic and damaged property.

Formally released in 2010, Chen remained under house arrest in his home village, which officials turned into a fortress of walls, security cameras and guards in plainclothes guards.

DISSIDENT FOLKLORE

Chen’s confinement, his escape and the furor that ensued have made him part of China’s dissident folklore: a blind prisoner outfoxing Communist Party controls in an echo of the man who stood down an army tank near Tiananmen Square in 1989.

The Chen case comes at a tricky time for China, which is engaged in a leadership change. The carefully choreographed transition already has been knocked out of step by the downfall of ambitious senior Communist Party official Bo Xilai in a scandal linked to the apparent murder of a British businessman.

On a number of occasions in recent years, authorities have relented to diplomatic pressure and allowed high-profile dissidents to leave China, knowing that its most vocal critics are effectively neutralized once they leave and are without support of friends.

At times, Beijing has appeared to use these deals as bargaining chips in broader diplomatic negotiations or to blunt criticism of its human rights record.

Human rights are a big factor in relations between China and the United States, even though Washington needs China’s help on issues such as Iran, North Korea, Sudan and the global economy.

Chen’s supporters, however, welcomed his departure, saying he had indicated that he would like to return to China.

Womens rights activist Reggie Littlejohn told reporters in New York that Chen’s arrival was “a great day for freedom” because he could be more effective from the United States.

“In China they silenced him. Now that he’s on U.S. soil he can speak truth to power,” she said.

(Additional reporting by Sui-Lee Wee, Chris Buckley and Michael Martina in BEIJING, Arshad Mohammed in WASHINGTON, and Michelle Nichols in NEW YORK; Writing by Michelle Nichols; Editing by Bill Trott and Doina Chiacu)


Reuters: World News

Blind Chinese activist leaves Beijing for U.S.

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U.S. Ambassador to China Gary Locke (L) talks on a mobile phone as he accompanies blind activist Chen Guangcheng (R) in a car, in Beijing, in this May 2, 2012 file photo. REUTERS/US Embassy Beijing Press Office/Handout/Files


By Maxim Duncan and Sui-Lee Wee

BEIJING |
Sat May 19, 2012 8:50am EDT

(Reuters) – China allowed a blind legal activist, Chen Guangcheng, to leave a hospital in Beijing on Saturday and board a plane bound for the United States, a move that could signal the end of a diplomatic standoff between the two countries.

Chen’s escape from house arrest in northeastern China last month and subsequent stay in the U.S. embassy caused huge embarrassment for China and led to a diplomatic rift while U.S. Secretary of State Hillary Clinton was visiting Beijing for talks to improve ties between the world’s two biggest economies.

The U.S. State Department said he was en route to the United States, along with his wife and two children. He boarded a United Airlines flight bound for Newark.

State news agency Xinhua said Chen had applied to study in the United States under legal procedures, in the first official account of Chen’s activities, but made no mention of whether he had left the country. The Foreign Ministry said this month that Chen could apply to study abroad, a move seen as a way of easing Sino-U.S. tensions on human rights.

Chen’s friend, Jiang Tianyong, cited the activist, one of China’s most prominent dissidents, as saying that he and his family obtained their passports at the airport hours before he was due to board a flight.

“I’m obviously very happy,” Jiang said. “When he boards the plane, he can finally say: ‘I’m free’. At the same time, I feel a sense of regret because such a large country like China can’t even tolerate a citizen like him to exist here.”

There was no immediate indication where Chen might pursue his studies, but New York University’s law school has previously offered him a position as a “visiting scholar”.

A statement by State Department spokeswoman Victoria Nuland struck a conciliatory note, saying Washington was “looking forward” to Chen’s arrival.

“We also express our appreciation for the manner in which we were able to resolve this matter and to support Mr. Chen’s desire to study in the U.S. and pursue his goals,” it said.

Beijing has accused the United States of meddling in its affairs in the Chen case.

Chen’s abrupt departure for the airport came about three weeks after he arrived at the Chaoyang Hospital from the U.S. embassy, where he had taken refuge after an escape from 19 months under house arrest in his home village.

Chen, 40, who taught himself law, was a leading advocate of the rights defense movement. He gained prominence by campaigning for farmers and disabled citizens and exposing forced abortions.

He was jailed for a little over four years from 2006 on what he and his supporters say were trumped-up charges designed to end his rights advocacy.

He had accused Shandong officials in 2005 of forcing women to have late-term abortions and sterilizations to comply with strict family-planning policies. Authorities moved against him with charges of whipping up a crowd that disrupted traffic and damaged property.

Formally released in 2010, he remained under house arrest in his home village, which officials turned into a fortress of walls, security cameras and guards in plain clothes.

POLICE AT THE AIRPORT

United Airlines flight UA 88 departed around 5.50 p.m. (0950 GMT), with police officers and plainclothes officers following passengers down the mobile corridor leading to the plane’s door.

The cabin crew waited for passengers to take their seats before closing the curtain to the front section, where the business class seats were located, a Reuters witness said.

Chen had earlier told Reuters he was at the airport along with his wife, two children and hospital staff and he believed he would be put on a flight to the United States.

Two police cars were stationed below the walkway to the plane, and about 10 security officials in plainclothes circulated around the airport.

Passengers at the gate to Chen’s flight appeared not to know that he would be on the same flight.

“If our country is a body, his plight is like a sickness that in the future will help the body to protect and strengthen itself,” said Xi Jingwen, who was awaiting to board a flight to the United States, when asked about Chen Guangcheng.

Chen’s confinement, his escape and the furor that ensued have made him part of China’s dissident folklore: a blind prisoner outfoxing Communist Party controls in an echo of the man who stood down an army tank near Tiananmen Square in 1989.

The Chen case comes at a tricky time for China, which is engaged in a leadership change. The carefully choreographed transition has already been knocked out of step by the downfall of ambitious senior Communist Party official Bo Xilai in a scandal linked to the apparent murder of a British businessman.

Chen’s supporters welcomed his departure, saying he had indicated that he would like to return to China.

“I even told him…that he has to do a repeat of him scaling walls. If not, we wouldn’t be able to believe it,” Nanjing-based activist He Peirong said of her earlier conversation with Chen. She was one of six activists who drove Chen from Shandong to Beijing after his escape.

Phelim Kine, senior Asia researcher at New York-based Human Rights Watch, said “getting Chen Guangcheng and his family on a plane is the easiest part of this saga.

“The harder, longer term part is ensuring his right under international law to return to China when he sees fit,” Kine said in an emailed statement.

Kime urged Western countries to ensure that Chen’s relatives, friends and supporters secured due protection.

The U.S. embassy had earlier thought it had stuck a deal to allow Chen to stay in China without retribution, but that fell apart as Chen grew worried about his family’s safety. He changed his mind about staying and asked to travel to the United States.

Human rights are a big factor in relations between China and the United States, even though Washington needs China’s help on issues such as Iran, North Korea, Sudan and the global economy.

The village of Dongshigu, where Chen’s mother and other relatives remain, is still under lockdown.

Chen’s nephew, Chen Kegui, was denied his family’s choice of lawyers on Friday to defend a charge of “intentional homicide”, the latest in a series of moves to deny him legal representation, and underscores the hardline stance taken against the blind dissident’s family.

(Additional reporting by Chris Buckley and Michael Martina in BEIJING and Arshad Mohammed in WASHINGTON,; Editing by Ron Popeski)


Reuters: World News

G8 leaders look to head off euro zone crisis

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U.S. President Barack Obama waves as he walks out from the Oval Office of the White House in Washington May 10, 2012, before his departure to attend campaign events in Seattle and Los Angeles. REUTERS/Yuri Gripas

U.S. President Barack Obama waves as he walks out from the Oval Office of the White House in Washington May 10, 2012, before his departure to attend campaign events in Seattle and Los Angeles.

Credit: Reuters/Yuri Gripas


By Laura MacInnis and Jeff Mason

WASHINGTON |
Fri May 18, 2012 1:20pm EDT

(Reuters) – Leaders of major industrial economies meet this weekend to try to tackle a full-blown crisis in Europe where fears are growing that Greece could leave the euro zone bloc, threatening the future of the common currency.

President Barack Obama, the G8 host, has urged European leaders repeatedly to do more to stimulate growth, fearing contagion from the euro crisis that could hurt the U.S. economy and his chances of re-election in November.

British Prime Minister David Cameron, who has been increasingly vocal in urging Europe to do more to resolve the debt crisis, will tell leaders they must work together to stop it from spreading worldwide, an aide said.

No major economic policy decisions are expected from the talks but officials said Obama hoped to promote a discussion on a comprehensive approach to resolving the crisis.

He will seek to cement a bond with France’s new leader at the White House later on Friday before heading to Camp David for the talks.

Francois Hollande, sworn in this week as French president, has already made waves by challenging Europe’s austerity focus and saying he will pull French combat troops from Afghanistan by the end of this year.

Obama, 50, may use their introductory meeting in the Oval Office to encourage the 57-year-old Socialist to rethink his Afghanistan plans that put France on an earlier exit timetable than other NATO allies.

But the two leaders, who have both expressed support for pro-growth policies in Europe, are expected to form a common front on the euro zone crisis that could dominate this weekend’s Group of Eight talks.

Obama’s administration spent heavily to tackle the 2007-2009 U.S. recession, and Hollande is seeking to take the edge off austerity with more job-creating infrastructure investments.

He is not alone. Cameron has become increasingly vocal in demanding Europe’s leaders act more decisively, Canada’s Stephen Harper has been a frequent critic, and of the euro zone G8 members, Italian premier Mario Monti was calling for profound growth measures even before Hollande did.

That could leave Germany’s Angela Merkel, who insists debt-cutting programs cannot be diluted, cutting a lonely figure.

The G8 summit comes as Greeks are pulling cash from banks amid growing fears that it might crash out of the single currency euro zone. Financial markets fear for the future of the entire currency zone, with Spain’s banking sector also under pressure.

The U.S. dollar climbed, world shares fell and German borrowing costs hit record lows on Friday as a deepening Spanish banking crisis, uncertainty about Greece’s future in the euro zone and lackluster U.S. data provoked a rush for safe-haven assets.

Heather Conley, a senior fellow at the Center for Strategic and International Studies, said Hollande and Obama “see things very similarly about the need for a better balance between fiscal consolidation, austerity and economic growth”.

One of Obama’s closest aides, National Security Adviser Tom Donilon, said the United States welcomed the evolving debate in Europe about the “imperative for jobs and growth”, but he said the president’s intention was not to drive a wedge between Europe’s two biggest economies, Germany and France.

“I don’t think that the nature of these conversations are going to be anything like taking one side or the other,” he told reporters on Thursday.

“The president looks forward to leading a discussion among the leaders about the imperative of having a comprehensive approach to manage the crisis and get on a sustainable path towards recovery in Europe.”

LIMITED POWER

Obama, a Democrat, has pitched a similarly “balanced” approach combining short-term stimulus and longer-term cuts to heal the U.S. economy and stoke hiring that has not recovered from the financial crisis.

His presumed White House opponent, Republican Mitt Romney, has made reducing the U.S. debt load, which has escalated during Obama’s tenure, one of his key campaign messages.

“A balanced approach that includes not just austerity but growth and job creation is the right approach,” White House spokesman Jay Carney said on Thursday, explaining Obama’s message to the G8.

Bruce Jones of the Brookings Institution said because Obama’s re-election prospects hinge so directly on the health of the American economy, he has a huge interest in getting Europe on a healthy growth track. “Even if he wasn’t in an election season, any president of the United States has a lot riding on the Europeans getting this right,” he said.

Cameron, worried about the impact of the euro zone crisis on a weak British economy, will call for a “strong and united commitment to securing the economic recovery and to support job creation,” his aide said.

Also on the summit agenda will be the price of oil and policy options to address it, although Brent crude hit a 2012 low on Friday.

“I’m sure that the leaders will discuss the range of options that they might have before them,” Donilon said.

Economic policy outcomes are not expected from the closed-door talks at Camp David, a rustic presidential escape about two hours from Washington that Obama has visited far less frequently than his predecessor George W. Bush.

The White House moved the summit to the Maryland retreat from Chicago in part to give the meeting a more informal flavor, as well as to escape the possibility of protests when Russian President Vladimir Putin was slated to attend.

His prime minister, Dmitri Medvedev, will be there instead, along with G8 first-timers Hollande and Yoshihiko Noda of Japan. Monti, Cameron, Harper, Merkel and Obama complete the line-up of leaders and European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy will also attend.

Van Rompuy held a conference call with the European attendees on Thursday to “coordinate positions”.

The White House said each leader would get their own cabin, albeit of different sizes. It will be the largest international summit ever held at Camp David, which was built in the 1930s and is best known as the site of past Middle East peace talks.

Conley of CSIS acknowledged Obama’s power to exert influence over Europe over weekend was “somewhat limited”.

“Nevertheless, I think the president can play a role of listening, helping leaders find common ground,” she said. “We are going to have to watch how this plays out with the frustration in recognizing that it will have a profound impact for the global economy and for the U.S. economy.”

(Additional reporting by Caren Bohan in Washington and John Irish in Paris; Editing by Cynthia Osterman, Neil Fullick and Mike Peacock)


Reuters: World News

Spain beset by bank crisis, recession, bond pressure

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Bankia bank small shareholders take part in an assembly to discuss actions to take against the bank in Madrid May 17, 2012. REUTERS/Susana Vera


By Carlos Ruano and Julien Toyer

MADRID |
Thu May 17, 2012 4:51pm EDT

(Reuters) – Spain’s borrowing costs shot up at a bond auction on Thursday, after economic data confirmed the country is back in recession and a report of an outflow of deposits from nationalized Bankia hammered its share price.

Madrid approved plans by the country’s heavily-indebted autonomous regions to make budget cuts worth 18 billion euros this year, and a government source said Bankia would present a plan for its restructuring next week.

At Thursday’s auction, the Treasury had to pay around 5 percent to attract buyers of three- and four-year bonds. The latter sold with a yield of 5.106 percent, way above the 3.374 percent the last time it was auctioned.

“This … fits the pattern of recent sales, with the Spanish treasury successfully getting its supply away but at ever-higher yields,” said Richard McGuire, rate strategist at Rabobank in London. “This unfavorable trend looks set to remain firmly in place … Ultimately, this ratcheting up of yields will likely require some form of outside intervention.”

Spain officially slipped into recession in the first quarter this year, final figures confirmed on Thursday, leaving the country threatened with a prolonged slump as the turbulent euro zone struggles to balance austerity with growth.

The European Commission warned last week that high debts of the 17 regions, which account for about half of overall public spending, and the welfare system would prevent Spain meeting its goal of cutting the budget deficit to 5.3 percent of gross domestic product this year from 8.5 percent in 2011.

However, the government said the regions – most of which missed their deficit targets last year – had agreed to cut their spending by 13 billion euros and increase revenues by 5 billion euros.

After weeks of negotiations, Treasury Minister Cristobal Montoro approved the plans presented by every region except for the small northern one of Asturias, which will have to produce a new budget within 15 days. “We’ve taken a fundamental step for Spain’s credibility,” Montoro told a news conference.

Overspending by the regions caused Spain to miss its deficit reduction target badly last year. Moody’s agency downgraded on Thursday its ratings of four regions including two of the biggest, Catalonia and Andalucia.

Regions which meet their targets will get help from the state to cover their financing needs through a new mechanism which will be introduced by July. The government has been working for weeks on a new instrument called “hispanobonos” allowing the regions to issue debt underwritten by the Treasury.

WORRY LIST

Spain’s 10-year debt yields have risen back above 6 percent, which investors view as a pivot point that could accelerate a climb to 7 percent, a cost of borrowing widely seen as unaffordable even though Madrid has raised well over half its needs for this year.

Prime Minister Mariano Rajoy said on Wednesday his government could soon find it difficult to fund itself affordably on the bond market unless the pressure eases.

However, the government source said the Treasury could refinance itself at the current high yields for several months, although the country saw it is vital that funding costs fall.

Top of the country’s worry list is a banking sector beset by bad loans, the result of a property boom that bust in 2008.

El Mundo newspaper reported that customers at troubled Bankia SA had taken out more than 1 billion euros, equivalent to around 1 percent of the lender’s retail and corporate deposits, over the past week.

The government denied there had been an exit of funds, but the bank’s shares closed down 14 percent on Thursday on top of steep losses over the past week.

“It’s not true that there is an exit of deposits at this moment from Bankia,” said Economy Secretary Fernando Jimenez Latorre. Bankia itself said that deposit activity was normal.

The government last week took over Bankia, the fourth-largest lender which holds around 10 percent of Spanish deposits, in an attempt to dispel concerns over its ability to deal with losses related to the 2008 property crash.

“The majority of outflows came after the chairman resigned last week, but I think once the bank was taken over by the government, depositors calmed down a bit,” said one Madrid-based trader. “The share price fall has to do with disappointed retail investors dumping the stock.”

Some savers were reassured by the deposit guarantee fund which covers 100,000 euros per customer.

“I have two accounts with Bankia and up to now I have not closed them. I’m not even considering it,” said Jose Ignacio Gonzalez, 42. “It must be more secure with the backing of the state, it has a guarantee.”

But holders of Bankia shares, which have lost 61 percent since the company listed last July, were angry. A group of about 300, out of hundreds of thousands who bought the stock through their local Bankia branches, met to explore legal action.

“I feel totally tricked …We all want to sell but nobody wants to buy, or only at very low prices,” said one elderly investor at the meeting, who did not want to give his name.

The problem for Madrid is that the property losses which banks face are not yet quantifiable, as prices are likely to fall further.

The government told the banking sector last week to set aside another 30 billion euros in provisions, prompting some analysts to say much more would need to be done.

RECESSION AND CONTAGION

While Greece, facing fresh elections which could hasten its exit from the euro zone, has dominated headlines, uncertainty over the final cost of Spain’s banking reform has raised the prospect that it could also require an international bailout, a bill the euro zone would be stretched to cover.

Stuart Gulliver, head of Europe’s biggest bank HSBC, reflected on his biggest external concerns.

“It’s absolutely how the euro zone plays out and whether Greece stays in, and/or whether firewalls are high enough to protect Spain and frankly whether markets take things into their own hands before (Greek elections on) June 17,” he said.

Official data confirmed the Spanish economy shrank 0.3 percent in the first quarter, putting it back into recession. Unemployment is already running close to 25 percent, rising to around 50 percent among the young.

Even if it puts its house in order, Madrid faces the threat of contagion from Greece if it elects an anti-bailout government next month, a move which could hasten a hard default and exit from the euro zone.

“It’s not Greece leaving the euro that is the major issue,” said John Bearman, chief investment officer at Thomas Miller Investment, which manages roughly 3 billion pounds ($ 4.8 billion) of assets. “It’s the domino effect.”

(Additional reporting by Steve Slater, Nigel Davies, Andres Gonzalez, Blanca Rodriguez, Paul Day, Sonya Dowsett; and Sarah White; Writing by Mike Peacock; Editing by David Stamp)


Reuters: World News

Exclusive: Iran flouts U.N. sanctions, sends arms to Syria: panel

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Members of the United Nations observers mission in Syria wait at a hotel lobby in Damascus, before heading to areas where protests against the regime of Syrian President Bashar al-Assad have been taking place, May 16, 2012. REUTERS/Khaled al-Hariri

Members of the United Nations observers mission in Syria wait at a hotel lobby in Damascus, before heading to areas where protests against the regime of Syrian President Bashar al-Assad have been taking place, May 16, 2012.

Credit: Reuters/Khaled al-Hariri


By Louis Charbonneau

UNITED NATIONS |
Wed May 16, 2012 8:20pm EDT

(Reuters) – Syria remains the top destination for Iranian arms shipments in violation of a U.N. Security Council ban on weapons exports by the Islamic Republic, according to a confidential report on Iran sanctions-busting seen by Reuters on Wednesday.

Iran, like Russia, is one of Syria’s few allies as it presses ahead with a 14-month old assault on opposition forces determined to oust Syrian President Bashar al-Assad.

News of the panel’s report came as Tehran and the U.N. International Atomic Energy Agency try narrow their differences on how to tackle concerns over Iran’s atomic program, and as Iran prepares for talks with the five permanent council members and Germany in Iraq next week.

The new report, submitted by a panel of sanctions-monitoring experts to the Security Council’s Iran sanctions committee, said the panel investigated three large illegal shipments of Iranian weapons over the past year.

“Iran has continued to defy the international community through illegal arms shipments,” it stated. “Two of these cases involved (Syria), as were the majority of cases inspected by the Panel during its previous mandate, underscoring that Syria continues to be the central party to illicit Iranian arms transfers.”

The third shipment involved rockets that Britain said last year were headed for Taliban fighters in Afghanistan.

“The Panel recommends the designation (blacklisting) of two entities related to these interdictions,” it said. “The report also takes note of information concerning arms shipments by Iran to other destinations.”

The kinds of arms that Iran was attempting to send to Syria before the shipments were seized by Turkish authorities included assault rifles, machine guns, explosives, detonators, 60mm and 120mm mortal shells and other items, the panel said.

The most recent incident described in the report was an arms shipment discovered in a truck that Turkey seized on its border with Syria in February. Turkey announced last year that it was imposing an arms embargo on Syria.

Diplomats told Reuters that the panel’s draft report may be changed by the Security Council’s Iran sanctions committee before it is submitted to the council itself for consideration.

It was unclear how long it would take the committee to pass the report to the Security Council. Last year’s expert panel report on Iran was never made public because Russia blocked its publication.

CIRCUMVENT SANCTIONS

The report also discusses Iran’s attempts to circumvent sanctions on its nuclear program but notes that the four rounds of punitive measures the 15-nation Security Council imposed on Iran between 2006 and 2010 are having an impact.

“Sanctions are slowing Iran’s procurement of some critical items required for its prohibited nuclear program,” it said. “At the same time prohibited activities continue, including uranium enrichment.”

Among the items Iran has attempted to procure for its nuclear program, the panel said, were nuclear-grade graphite, high-strength aluminum, aluminum, powder, specialized alloys, maraging steel, carbon fiber, magnets, vacuum pumps, turbines, electrical switchboards and helium gas detectors.

“The Panel identifies the acquisition of high-grade carbon fiber as one of a number of critical items Iran requires for the development of more advanced centrifuges,” the report said, adding that nations should be on alert for illicit attempts to acquire such critical items.

Iran rejects allegations by Western nations and their allies that it is secretly developing the capability to produce nuclear weapons. It has refused to suspend its enrichment program as demanded by the Security Council despite being hit with increasingly draconian U.N. and various national sanctions.

The report talked at length about Islamic Republic of Iran Shipping Lines, known as IRISL. While IRISL itself is not formally under U.N. sanctions, three of its subsidiaries are, and the council has warned U.N. member states to be vigilant regarding potential sanctions violations by IRISL.

The panel report said that Irano Hind Shipping Company, one of the IRISL subsidiaries subject to sanctions, continues to operate vessels. IRISL is a difficult company to monitor because it is constantly changing the ownership, names and national flags of its ships, the report said.

The panel said that IRISL, as Reuters has previously reported, has set up what appear to be front companies intended to operate vessels and obscure its ownership. Currently IRISL’s more than 130 ships are owned by some 75 different companies, which the panel said was unusual for a major shipping line.

IRISL and its related companies have also been changing the names of their ships to get the word “Iran” out of them.

Before the council passed resolution 1803 in March 2008, which warned all U.N. member states to be “vigilant” about IRISL, most of its vessels’ names contained the word “Iran.” Now fewer than 10 do, the panel said.

Since March 2008, IRISL and its related companies have carried out more than 220 changes in ownership of vessels, the report said.

Turning to Iran’s ballistic missile program, the report said it “continues to develop with additional launches, which are prohibited under resolution 1929,” adopted in June 2010.

“The Panel takes note of the recent designations (U.N. Security Council blacklisting) … of two (North Korean) entities and their links to Iran’s ballistic missile program.”

The two North Korean companies linked to Iran’s missile program are the Green Pine Associated Corp and the Korea Heungjin Trading Company. The council’s North Korea sanctions committee blacklisted them on May 2.

(Editing by Mohammad Zargham and Will Dunham)


Reuters: World News

Caretaker govt will take Greece to risky repeat vote

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Leader of the Independent Greeks party Panos Kammenos (2nd from R) accompanied by party officials, arrives at the Presidential palace for a meeting with other political leaders and the Greek President in Athens May 15, 2012. REUTERS/John Kolesidis


By Ingrid Melander

ATHENS |
Tue May 15, 2012 6:35pm EDT

(Reuters) – Greek political leaders meet on Wednesday to form a caretaker government that will lead the country into its second election in just over a month, with Greece’s euro membership at stake in a mounting crisis rocking world markets.

Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month.

Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.

Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery.

But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.

“There is a bit of schizophrenia in our society right now. People want to stay in Europe – have the cake – but they also want to eat it – by attacking the creditors,” said Theodore Couloumbis at Athens-based think-tank ELIAMEP.

“Much depends on whether the Greek people in this repeat election are going to vote with anger and passion or if they will cool off, reflect and see in effect what the real choices are. The choice is between bad and worse.”

Party leaders will meet President Karolos Papoulias at 1 p.m. (6.00 a.m. EDT) to put together a caretaker government. It was not clear on Tuesday who would be part of that emergency cabinet, whose main task would be to organize the repeat election – the third in Greece in as many years.

“DOESN’T LOOK GOOD”

Many in Greece pin their hopes on newly elected French President Francois Hollande, who campaigned on a pro-growth platform. Socialist Hollande offered some hope for more flexibility towards Greece on Tuesday, saying after his first meeting with German Chancellor Angela Merkel:

“I hope that we can say to the Greeks that Europe is ready to add measures to help growth and support economic activity so that there is a return to growth in Greece.”

But despite encouraging comments from the conservative German leader about wanting to see growth, differences remain over how far austerity programs might be relaxed.

IMF chief Christine Lagarde had earlier in the day joined a string of EU policymakers who have over the past days lifted the taboo of the possibility of an exit of Greece from the euro zone. She said it was important to be technically prepared for that possibility and warned that an exit would be “quite messy”.

European shares fell to their lowest closing level since the start of 2012 after attempts to form a government collapsed. Traders said markets could slump further in the coming days, with fears of a contagion to other crisis-hit EU states including Spain and Italy sending the euro below $ 1.28.

Patience is also wearing thin among a number of EU policymakers exasperated by the fact that a country which accounts for barely two percent of the euro zone’s economy should drag the bloc back into a deep crisis yet again after over two years of roller-coaster crisis.

“The 16 other governments in the euro zone really are at the end of their patience with Greece. There isn’t room or any willingness to move,” said one official involved in talks over Greece at the European Commission. “The decisions are really in Athens’ hands. But it doesn’t look good.”

The lack of a deal after the May 6 election has also angered many Greeks, making widely discredited politicians even more unpopular.

“They should go to hell,” said Giouli Thomopoulou, 59, an unemployed office clerk. “Only God knows what’s waiting for us now. I’m very scared about the future.

“I don’t think elections will solve anything because in a month we’ll be in the same situation.”

Alexis Tsipras, the untested ex-Communist youth leader whose Left Coalition party (SYRIZA) wants to tear up the bailout deal, is now leading in opinion polls but analysts said this election, possibly on June 17, is as unpredictable as the May 6 one.

“Public opinion is in total flux, in my 30 years of polling experience I have never seen anything like that before,” said political analyst John Loulis. “Everything can change until the last minute. On the May 6 election, the mood swung towards SYRIZA in the last 24 hours before the vote”.

(Additional reporting by Harry Papachristou and Karolina Tagaris in Athens and Luke Baker in Brussels; Editing by Alastair Macdonald)


Reuters: World News

Iran hangs “Mossad agent” for scientist killing

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Majid Jamali Fashi, accused of assassinating Iranian scientist Massoud Ali-Mohammadi, attends his trial at the revolutionary court in Tehran August 23, 2011. REUTERS/Raheb Homavandi

Majid Jamali Fashi, accused of assassinating Iranian scientist Massoud Ali-Mohammadi, attends his trial at the revolutionary court in Tehran August 23, 2011.

Credit: Reuters/Raheb Homavandi


DUBAI |
Tue May 15, 2012 2:52am EDT

(Reuters) – Iran has hanged a man it said was an agent for Israeli intelligence agency Mossad whom it convicted of killing one of its nuclear scientists in 2010, Iranian state media reported on Tuesday.

Twenty-four year old Majid Jamali Fashi was hanged at Tehran’s Evin Prison after being sentenced to death in August last year for the murder of Massoud Ali-Mohammadi, Iran’s state news agency quoted the central prosecutor’s office as saying. It said he had confessed to the crime.

Ali-Mohammadi was killed in January 2010 when a remote-controlled bomb attached to a motorcycle outside his home in Tehran went off.

Tuesday’s report said Fashi had travelled abroad on several occasions to receive training from Mossad before returning to Iran to plot the assassination.

Yet Western analysts said Ali-Mohammadi, a 50-year-old Tehran University professor, had little, if any, role in Iran’s sensitive nuclear program. A spokesman for Iran’s Atomic Energy Organisation said at the time he was not involved in its activities.

The most recent attack on an Iranian scientist occurred in January. Mostafa Ahmadi-Roshan – a deputy director of the Natanz uranium enrichment facility – was killed when a magnetic bomb planted on his vehicle detonated.

Tehran has accused Israel and the United States of assassinating four Iranian scientists in order to sabotage its controversial nuclear program. Washington has denied any U.S. role, while Israel has declined to comment.

Last month, Iranian intelligence officials said they had arrested 15 people they called a “major terror and sabotage network with links to the Zionist regime”. The group had plotted to assassinate an Iranian scientist in February, the authorities said.

Iran denies Western accusations it is seeking to develop a nuclear weapons capability, but major powers are pushing Tehran to become more transparent and cooperative ahead of talks later this month.

British Foreign Secretary William Hague on Monday warned the European Union would impose tougher sanctions on Iran if it failed to take concrete steps to allay international concerns over its nuclear program.

(Reporting By Marcus George; Editing by Andrew Osborn)


Reuters: World News

Greece hits political stalemate, euro exit fears grow

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Head of Greece's Left Coalition party Alexis Tsipras (C) leaves the presidential palace after a meeting in Athens May 13, 2012. REUTERS/John Kolesidis


By Renee Maltezou and George Georgiopoulos

ATHENS |
Mon May 14, 2012 6:58am EDT

(Reuters) – Greece’s president met little enthusiasm from political leaders summoned to a final round of talks on Monday to avert a new election, reinforcing fears the country was firmly on the path to bankruptcy and an exit from the euro zone.

European shares slid and Spanish and Italian bond yields rose as the political deadlock threatened to reignite the euro zone debt crisis. Greek banking stocks tumbled 7 percent.

Greece’s political landscape has been in disarray since an inconclusive election on May 6 left parliament divided between supporters and opponents of a 130 billion euro ($ 168.3 billion) EU/IMF bailout, with neither side able to form a government.

After Sunday’s effort at cajoling party leaders into a coalition proved fruitless, President Karolos Papoulias summoned four party leaders for a fresh round of talks on Monday evening.

But the talks appeared doomed long before they began, as the young leader of the radical leftist SYRIZA party said he would not attend and another leftist leader refused to take part in any coalition unless SYRIZA was on board.

Papoulias must call a new election if he fails to engineer a compromise. Such a poll is expected to be held in mid-June.

With Greece set to run out of money as early as next month and no government in place to negotiate the next aid tranche, investors have begun betting that a long-speculated Greek default and euro exit will happen sooner rather than later.

European paymaster Germany appealed to Greeks to build a viable government, but acknowledged that the country was in a difficult situation.

The prospect of national bankruptcy and a return to the drachma appeared to be slowly sinking in among Greeks, who must now choose between the pain of spending cuts demanded in return for aid and an even more painful existence outside the euro.

“We have to stay in the euro. I’ve lived the poverty of the drachma and don’t want to go back. Never! God help us,” said Maria Kampitsi, 70-year old pensioner, who had to shut down her pharmacy two years ago due to the crisis.

“They must cooperate or we’ll be destroyed, it will be chaos. For once, they must care about us and not their chair.”

“IMPOSSIBLE EQUATION”

Capturing the self-defeating nature of an election that has drawn the country towards bankruptcy, the Ta Nea daily ran a front page picture of a man shooting himself and blood splattered across the backdrop in the shape of Greece.

“SYRIZA has paved the way for new elections. And this time, whether we like or not, they will be more like a referendum. We will have set ourselves the question whether we prefer the euro or the drachma,” centre-left daily Ethnos wrote in an editorial.

SYRIZA, which polls suggest would come first if elections were held again, said on Monday it was willing to take part in one-to-one talks with the president or talks that included all parties except the far-right Golden Dawn party.

But it was unclear what difference that would make and the president’s office said it was not changing its plans for Monday’s meeting.

European leaders have reacted with growing disbelief to the rhetoric from the party’s 37-year-old leader Alexis Tsipras, who has promised Greece can simultaneously renege on the terms of its bailout and stay in the euro zone.

“I think that is an impossible equation and I think in that sense it is an irresponsible statement,” said Finland’s Minister for European Affairs Alexander Stubb.

“We fully realize that the precondition for Greece staying in the eurozone is for it to fulfill the engagements that it has made to the IMF, to the European Central Bank and to the commission.”

In a sign of the shifting European mood on Greece and a growing sense that its exit from the euro is manageable, European officials who once refused to discuss a Greek exit now talk about it openly as a real, if painful, possibility.

But none of this has fazed Tsipras, who has gone from strength to strength on his pro-euro and anti-bailout message to become the unexpected Greek political star of the moment.

The anti-bailout vote that was divided among small parties but has now rallied behind Tsipras, who stands to get a bonus of 50 extra seats in the 300-seat parliament if he wins a repeat election – raising the possibility of an anti-bailout coalition.

Tsipras has consistently refused to join a coalition government with the establishment conservative and socialist parties that ruled Greece for decades, but were punished by voters last week for their role in agreeing the EU rescue, which requires deep cuts in wages and pensions.

That has helped push Greece into its fifth year of recession, which in turn has left one out of five Greeks jobless and ushered in an increasingly volatile social climate.

Three gas canisters exploded at tax office in an Athens suburb early on Monday, causing minor damages, police said.

Any coalition without the conservatives and socialists would have to combine the far-right and far left, which both have ruled out.

($ 1 = 0.7726 euros)

(Additional reporting by Tatiana Fragou and Lila Chotzoglou; writing by Deepa Babington; editing by Philippa Fletcher)


Reuters: World News

Greek leaders hit impasse in last push to avert elections

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Leader of the Socialists PASOK party Evangelos Venizelos (R) meets leader of Conservatives New Democracy party Antonis Samaras in Athens May 11, 2012. REUTERS/Yorgos Karahalis


By Karolina Tagaris and Lefteris Papadimas

ATHENS |
Sun May 13, 2012 9:59am EDT

(Reuters) – Greece’s president met party leaders on Sunday in a final bid to cobble together a coalition and avert a repeat election, but the talks immediately hit an impasse and looked set to fail because of deep splits over an EU/IMF rescue plan.

Leaders of the three biggest parties, each of whom had failed to form a government in the past week, convened at the presidential mansion, where President Karolos Papoulias had a last opportunity to implore them to form a coalition before he must call another election, probably in mid-June.

The meeting broke up after less than two hours of talks, and leaders said the discussions had hit a snag, though they expressed the hope that difficulties could be overcome.

“Even now, despite the impasse at the meeting we had with the president, I hold on to some limited optimism that a government can be formed,” said Socialist leader Evangelos Venizelos, whose PASOK party finished a humbling third in Sunday’s election. But he warned time was running out.

“The moment of truth has come. We either form a government or we go to elections.”

His conservative counterpart, Antonis Samaras, said talks to form a government were continuing but blamed the radical leftist SYRIZA party for blocking efforts to form a coalition.

Samaras placed first in the election last week but fell far short of an outright majority, punished by voters for backing a bailout package tied to harsh austerity cuts in the heavily indebted country.

SYRIZA, which campaigned against the bailout, finished a surprise second in the vote.

Both Samaras’s New Democracy and Venizelos’ PASOK party – which have taken turns to rule Greece for nearly four decades and jointly negotiated a bailout that requires deep cuts in public spending – are eager to avoid facing the voters again.

Polls since the election show the balance of power tipping even further towards opponents of the bailout, who were divided among several small parties but now appear to be rallying behind SYRIZA’s Alexis Tsipras, a 37-year-old ex-Communist student leader.

If the vote is repeated, Tsipras’s SYRIZA party is tipped to place first, winning an automatic extra 50 seats at the expense of Samaras.

If the next government rejects the bailout, EU officials say that would mean the end of loans that Athens needs to stave off bankruptcy and its possible exit from the euro single currency.

Polls show an overwhelming majority of Greeks reject the bailout but want to keep the euro. As many as 78.1 percent want the new government to do whatever it takes to keep their country in the currency, a poll by Kappa Research for To Vima daily showed.

ELECTIONS AGAIN

Samaras and Venizelos have offered a broad coalition that would include SYRIZA and try to renegotiate some bailout terms, but Tsipras rejects that.

“It is obvious that there is an effort to bring about a government that will implement the bailout. We are not participating in such a government,” SYRIZA spokesman Panos Skourletis said on Saturday.

Another small leftist party – the Democratic Left led by lawyer Fotis Kouvelis – could provide enough seats to form a government with New Democracy and PASOK, but has said it will not do so unless the coalition also includes SYRIZA.

Greeks seem resigned to returning to the polls.

“Why would we believe they’ll agree on something? All they care about is being in power and we’re sitting here not even able to pay our electricity bills,” said Maria Kissou, 53, a corner shop owner in Athens. “Let us go to elections again.”

Kissou voted for Tsipras on May 6.

“He’s young, I like him because at least he’s trying to renegotiate with the Europeans,” Kissou said.

Supporters of the two establishment parties will be hoping that if a new election is held, Greeks will be frightened of the prospect of leaving the euro and return to the fold.

“Country on a dangerous path,” the conservative daily Kathimerini warned on its front page.

Papoulias will also meet leaders of parliament’s small parties on Sunday evening at 1630 GMT, which for the first time include the far right Golden Dawn.

In one of the unfolding drama’s many sub-plots, Greeks will watch with interest to see how the president, a revered 82-year-old veteran of the World War II anti-Nazi resistance, receives a group whose members give Nazi-style salutes.

The constitution sets no deadline for Papoulias to complete his search for a deal and he has given no indication how long he will spend trying before he calls a new election.

(Writing by Deepa Babington; Editing by Giles Elgood)


Reuters: World News

Greece lurches towards new vote, hard left leads

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Leader of the Socialists PASOK party Evangelos Venizelos (R) meets leader of Conservatives New Democracy party Antonis Samaras in Athens May 11, 2012. REUTERS/Yorgos Karahalis


By Lefteris Papadimas and George Georgiopoulos

Sat May 12, 2012 12:57pm EDT

(Reuters) – Greece’s president summoned party leaders on Saturday for one final attempt to avert new elections, but the effort looked doomed to fail after politicians deeply divided over austerity plans said they would stick to their guns.

Greece’s political landscape is in disarray a week after an election left parliament almost equally divided between parties backing and opposing an EU/IMF bailout that keeps Athens afloat in return for pledges of deep spending cuts and tax hikes.

If President Karolos Papoulias fails in a final attempt to persuade leaders to form a coalition, he will have to call a new vote in June. Opinion polls predict the balance of power would tip decisively towards the bailout’s radical leftist opponents, potentially jeopardizing Greece’s membership in the euro zone.

Papoulias called the leaders of the three biggest parties for coalition talks on Sunday at 0900 GMT, after Socialist leader Evangelos Venizelos became the third and last of them to acknowledge he had failed to assemble a coalition.

Without a government to negotiate a new aid tranche from the EU and IMF, Greece risks bankruptcy in weeks and – as European leaders now openly acknowledge – potential ejection from the common currency.

A week of efforts to put together a government failed because of disagreement over the bailout. Party officials said on Saturday they would not change their stances.

“There is no change (to our position),” said Panos Skourletis, a spokesman for the anti-bailout Left Coalition SYRIZA party, which placed second on Sunday and has since seen its popularity increase as anti-bailout voters rally around its charismatic 37-year-old leader, Alexis Tsipras.

“It is obvious that there is an effort to bring about a government that will implement the bailout. We are not participating in such a government,” Skourletis told Reuters.

Tsipras has the most to gain from a new vote. If, as polls predict, SYRIZA overtakes the conservatives to place first, it would be awarded an extra 50 seats in the 300-seat house, making the former student activist – little known outside Greece just weeks ago – into the country’s pre-eminent politician.

A senior official at the smaller and more moderate Democratic Left party, which has enough seats to give the pro-bailout parties a majority, reiterated that it would not participate in a government unless SYRIZA also agreed to join.

HAVOC

Last Sunday’s election saw voters punish the two parties that dominated the country for generations – Venizelos’s PASOK and the conservative New Democracy party of Antonis Samaras – which jointly negotiated the bailout package.

The two, which usually account for around 80 percent of votes, saw their combined tally collapse to just 32 percent. The rest of the votes were cast for small parties that oppose the bailout, ranging from the Communists to the far right.

In televised remarks during his meeting with Papoulias, Venizelos urged the president to lean on Tsipras to join an “ecumenical government”.

“I put this forth to Mr Tsipras. I haven’t received a positive response,” Venizelos said. “I believe that is where your efforts should be focused during the consultations.”

The president replied: “There are signs of optimism in what you are telling me and I hope I can contribute to the formation of a government – because things are rather difficult.”

The lurch towards a new election has caused havoc in financial markets, both in Greece and across Europe.

On Friday, as politicians acknowledged their failure to agree a coalition, the euro fell to its lowest point since January near $ 1.29, and the Athens stock exchange lost 4.5 percent, sinking to its lowest level in two decades.

The prospect of Greece leaving the euro was once seen as potentially devastating for the continent’s financial system, but is now seen as more manageable as banks wrote off much of their Greek debt this year.

Irish central bank chief and European Central Bank policymaker Patrick Honohan said on Saturday a Greek exit would damage confidence in the euro zone but need not be fatal.

“Technically, it can be managed. It would be a knock to the confidence for the euro area as a whole. So it would add to the complexity of the operation until things settle down again. It is not necessarily fatal, but it is not attractive,” he told a conference in Estonia.

“SEXY ALEXI”

If a new election is declared, Venizelos and Samaras will be hoping Greek voters are frightened enough by the prospect of losing the euro that they return to the traditional parties.

But the consolidation of the anti-bailout vote around Tsipras means that even if PASOK and New Democracy pick up votes, they could lose a large number of parliamentary seats.

Tsipras says the bailout deal must be torn up, though like most Greeks he also says he wants to keep the euro, a position seen in Brussels as untenable without the bailout.

In a country where more than half of young people are now unemployed and most blame the middle aged political class for pursuing narrow interests, he has tapped into generational rage.

The momentum is clearly behind him. A cartoon on the front page of the Ta Nea newspaper showed the boyish Tsipras riding off with the ballot box on a toy horse.

Good looks and a self confident manner have also helped. One of the slogans of his supporters on the internet rhymes: “Come on Alexi – for a Greece that’s sexy!”

The European Union/International Monetary Fund bailout requires Greece to cut wages, raise taxes, fire state employees, sell off state assets and reform labor laws. EU leaders say it is needed if Athens is ever to become solvent.

But opponents say the harsh medicine is self-defeating, making it impossible for Greece to emerge from the euro zone’s worst recession which has ground on relentlessly for five years.

Germany opened the door on Saturday to additional measures to promote growth in Greece, but said any such steps would still depend on Greece carrying out its agreed reforms.

“There is not a better solution. Greece must now show if it has the power to get the necessary majorities for this. I can only hope that those responsible in Greece will quickly see reason,” German Finance Minister Wolfgang Schaeuble said in an interview with the Welt am Sonntag weekly.

(Additional reporting by Karolina Tagaris and Renee Maltezou; Writing by Peter Graff and Ingrid Melander)


Reuters: World News