Politics this week
Oct 18th 2007
From The Economist print edition
Turkey's parliament voted to authorise a military incursion into northern Iraq, where many Kurdish PKK fighters are based. They have killed 20 Turkish soldiers in two weeks. Turkey's government promised that an invasion was not imminent, however. See article
Ukraine's ―orange‖ coalition government was re-formed, following lengthy negotiations after
the September 30th election. The likely prime minister will be Yulia Tymoshenko, who served in the job in 2005 before being sacked by her orange ally, President Viktor Yushchenko. France was crippled by transport, electricity and gas strikes, staged in protest at President Nicolas Sarkozy's plans to end the ―special regimes‖ that entrench generous pensions for these public-sector workers. Yet in contrast to 1995, when similar protests overturned an attempt to end the special regimes, the public seems to be on Mr Sarkozy's side, not the workers'. See article
In a landmark decision the European Court of Justice ruled that a mandatory retirement age
may not be illegal, despite laws banning age discrimination in the workplace, so long as it promotes policies in the public interest, such as lowering unemployment.
After visiting Israel and the Palestinian West Bank, including Bethlehem, Condoleezza Rice, the American secretary of state, said that a conference to rekindle the Israeli-Palestinian peace process, planned for next month or December in America, stood a ―reasonable chance of success‖, despite outstanding differences. But the Palestinian leader, Mahmoud Abbas, said he would not attend the conference ―at any price‖.
A peace agreement signed in 2005 between south Sudan and the Sudanese government of
President Omar al-Bashir was in danger of collapsing after the southern ministers walked out of the national unity government. Mr Bashir let the Sudan People's Liberation Movement, the main southern group, reshuffle its ministers, but it refused to rejoin the government unless the north implemented its side of the agreement on issues such as troop withdrawal and boundary demarcations. See article
The UN World Food Programme stopped distributing food in Somalia's embattled capital,
Mogadishu, after its local head was abducted by government soldiers.
Reporters Without Borders, a lobby group, ranked Eritrea bottom in the world for overall press
freedom in its annual study, below North Korea. Under President Issaias Afeworki's regime four journalists have died in detention.
The UN General Assembly elected Libya and Vietnam, along with Burkina Faso, Costa Rica and Croatia, to non-permanent seats on the Security Council. They take up the seats on January
On a visit to Cuba, Venezuela's left-wing president, Hugo Chávez, called for the two countries to form a confederation. Mr Chávez signed economic co-operation agreements, including a plan for a $1 billion petrochemical plant in Cuba. He also carried out a telephone interview, broadcast live, with Fidel Castro, the island's ailing president.
Canada's conservative minority government announced an ambitious programme for the new parliamentary year, including tax cuts and environmental legislation, and promised to keep
troops in Afghanistan beyond 2009. The Liberals, the main opposition, appeared unlikely to force an early election by voting against the programme. See article
In southern Colombia, a landslide triggered by local residents digging EPA for rumoured gold deposits in an abandoned mine killed at least 21
Benazir Bhutto, twice prime minister of Pakistan, returned home after eight years in exile, to the cheers of hundreds of thousands of her supporters in the Pakistan People's Party. General Pervez Musharraf had asked her to delay her return until the Supreme Court ruled whether his re-election to a new term as president was constitutional. See article
Manmohan Singh, India's prime minister, called George Bush to explain the difficulties he is having in implementing an agreement with America on civilian nuclear co-operation. India's Communist parties, whose support the government needs for a parliamentary majority, continue to oppose the deal. See article
Japan and the European Union both announced new sanctions against the military regime in Myanmar, which continued to round up those accused of backing protests last month. See article
John Howard, Australia's prime minister, called an election for November 24th, in the hope of winning a fifth term in office. Opinion polls give the main opposition Labor Party a comfortable lead. See article
China's ruling Communist Party opened its five-yearly congress with a speech from the party leader, President Hu Jintao. Although he used the word ―democracy‖ some 60 times, he offered little hope of serious political reform. He surprised some observers by the mildness of his rebukes to Taiwan and America. See article
In Hong Kong, Donald Tsang, the chief executive, apologised after remarks in a radio broadcast linking democracy and China's tumultuous Cultural Revolution of the 1960s and 1970s. China protested fiercely when the Dalai Lama, Tibet's exiled spiritual leader, was awarded a
congressional medal at a ceremony in Washington, DC, attended by Mr Bush.
The last word?
Al Gore said (again) that he is not planning to run for the American presidency (again). The former Democratic vice-president was
speaking after he won the Nobel peace prize in conjunction with the United Nations Intergovernmental Panel on Climate Change for informing the world about climate change. See article
Rudy Giuliani's presidential campaign was endorsed by Rick Perry, the governor of Texas. The backing, from such a prominent conservative, should help Mr Giuliani, who is pro-choice, in his effort to win over the Republican rank-and-file during the primaries.
Iowa's Republicans set January 3rd as the date for their party caucus, earlier than had been expected. The Democrats are considering the same date to hold their vote. See article
Business this week
Oct 18th 2007
From The Economist print edition
Hank Paulson, America's treasury secretary, gave his strongest warning yet that the slowdown in the housing market and concurrent crisis in the credit and mortgage markets posed a ―significant‖ risk to America's economy. Mr Paulson pointed out that the problems did not stem only from the subprime-mortgage market, and that the number of homeowners finding it difficult to make their mortgage payments in the ―prime‖ market was on the rise.
Mr Paulson spoke soon after the Treasury prompted Citigroup, Bank of America and JPMorgan Chase to set up a fund that will buy highly rated assets from structured investment vehicles,
which own mortgage-backed securities and have had trouble raising cash during the credit squeeze. Worth up to $100 billion (but involving no government money), the fund is designed to boost liquidity and confidence in the money markets. See article
Underlining the woes besetting America's homebuilders, DR Horton, the biggest by sales, said
almost half its orders had been cancelled in the three months to September 30th. Meanwhile, figures showed that the construction of new homes in September was the lowest, at an annual rate, for 14 years.
Big banks continued to report mixed quarterly earnings. Whereas Citigroup's net income fell by
57%, compared with a year earlier, JPMorgan Chase's net profit rose slightly thanks to revenue
from private-equity deals, which offset $1.6 billion in write-downs on leveraged loans and collateralised-debt obligations.
Northern Rock's share price took another battering amid anxiety about the benefit to shareholders of a potential takeover. The British bank was bailed out last month when it could not raise cash in the credit markets. Several parties are pondering a bid, including a consortium led by Sir Richard Branson's Virgin Group that includes AIG, America's biggest insurer. See article
India's stockmarket briefly tumbled after regulators proposed restricting capital inflows from derivatives sold offshore, which would affect a sizeable chunk of foreign portfolio investment. The government blames a surge of cash from abroad for driving up the rupee. See article
A graceful exit
Mike Turner said he would retire as chief executive of BAE Systems next August, much sooner
than had been expected. Rumours that Mr Turner was pushed by the board of Europe's biggest defence company were denied. BAE gets around half its business in the United States, where its dealings with Saudi Arabia are being scrutinised by the Justice Department. See article
After a delay of two years caused by assembly problems, Airbus finally delivered its first A380
super-jumbo, to Singapore Airlines. The jet was handed over at a ceremony in Toulouse, where Airbus is based. Its first commercial flight, between Singapore and Sydney, is due to take place