Wednesday, September 14, 2011
Ankara's Star Gazete says country's new F-16 radar system modified to recategorize Israeli targets as hostile. Order said to come directly from PM Erdogan's office; naval, submarine radar systems to be changed next
Turkey has developed a new radar system for its US-made F-16 fighter jets that will allow them to fire at Israeli targets, Ankara's Star Gazete reported on Tuesday. The orders to modify the system reportedly came directly from Turkish Prime Minister Recep Tayyip Erdogan's office.
The new radar system – Identification Friend or Foe (IFF) – is a defensive command and control system developed by Turkey's Military Electronics Industry (ASELSAN) for the nation's air force and navy. It is slated to replace a similar US version which is in use today.
The US system is comprised of lists of "friends" and "foes." The system's settings are designed to prevent pilot error as well, to an extent, disabling the ability to fire at "friendly" targets even by mistake. The US system identified Israel as a 'friend,' thus preventing Turkish fighter jets from firing at them automatically.
The new system, however, allows Turkey control the "friend or foe" list independently.
Erdogan's Flotilla raid 'cause for war' interview on al-Jazeera (MEMRI)
The Turkish IFF system is scheduled to be mounted on all Turkish fighter jets, military vessels and submarines in the near future.
The move, whose timing coincides with a prolonged period of unprecedented diplomatic tensions between Ankara and Jerusalem, has received extensive media coverage in Iran, as well.
According to foreign media sources, the IAF has a fleet of 1,964 aircraft, including 689 advanced assault helicopters and F-15 and F-16 fighter jets.
Israel's aerial superiority will soon receive a significant boost, in the form of the US-made F-35 fighter jet.
The Turkish Air Force is said to have a fleet of "just" 1,940 aircrafts, including F-16s and F-4 Phantoms, as well as 874 assault helicopters.
Like Israel, Turkey has also been promised the F-35. It is slated to receive it by 2015.
Israeli Foreign Minister Avigdor Lieberman warned Wednesday there will be “harsh and grave consequences” if the Palestinians persist with their plan to seek UN membership as a state.
Speaking shortly before a scheduled meeting with E.U. foreign policy chief Catherine Ashton, Lieberman did not elaborate on the possible consequences.
“The moment has not yet come to give details of what will happen,” he said.
In the past he has called for Israel to sever all relations with the administration of Palestinian president Mahmoud Abbas should it press on with its U.N. bid.
“What I can say with the greatest confidence is that from the moment they pass a unilateral decision there will be harsh and grave consequences,” Lieberman told an agricultural conference in southern Israel.
“I hope that we shall not come to those harsh and grave consequences, and that common sense will prevail in all decisions taken in order to allow co-existence and progress with negotiations,” he added.
Lieberman has in the past accused the Palestinians of planning an “unprecedented bloodbath” after the U.N. move, although they say they will hold purely peaceful rallies.
Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak earlier Wednesday met Ashton in Jerusalem.
Netanyahu’s office did not immediately comment on the talks, while a short statement from the defense ministry said only that Ashton and Barak had discussed “relations with the Palestinians and the situation in the region.”
The E.U. foreign policy chief arrived from Cairo, where she met Abbas and Arab League ministers who have been discussing Palestinian preparations to request U.N. membership for a state of Palestine.
Abbas is expected next week to present a membership request to U.N. Secretary General Ban Ki-moon, who will pass it on to the 15-member Security Council for examination.
So far, 127 countries have already recognised a Palestinian state based on the lines that existed before the 1967 Six Day War, including Gaza, the West Bank and east Jerusalem.
Some hardline Israeli ministers are calling for Israel to annex chunks of the West Bank if the Palestinians go ahead.
U.S. President Barack Obama on Monday said the U.N. bid was a “distraction” that would not result in viable statehood, while Russia said it will back the Palestinians as the European Union remains divided.
The United States has decided to fight to the bitter end to convince the Palestinians to abandon their bid for U.N. membership, despite the rather small chance that the battle will succeed.
“We want to leave no stone unturned in our effort to get these parties back to the table,” State Department spokeswoman Victoria Nuland said Tuesday as two U.S. envoys headed to the Middle East for talks with Israel and the Palestinians.
David Hale, a special U.S. envoy for the Middle East, and White House aide Dennis Ross are to hold talks on Wednesday and Thursday Netanyahu and Abbas.
U.S. Secretary of State Hillary Clinton said Tuesday she was dispatching the two envoys to the Middle East stressing again the need for renewed peace talks.
Their previous trip, just last week, yielded no results.
For weeks, Washington has deployed its entire diplomatic arsenal to try to persuade the Palestinians not to submit a formal request to become the 194th member of the United Nations, in the face of U.S. and Israeli opposition.
Clinton is due to speak with Abbas before week’s end.
“The only way of getting a lasting solution is through direct negotiations between the parties, and the route to that lies in Jerusalem and Ramallah, not in New York,” she said Tuesday.
“We are redoubling our efforts, not only with both sides but with a broad cross-section of the international community, to create a sustainable platform for negotiations,” she said.
Direct negotiations have been stalled for nearly a year. The Palestinians have vowed to not resume talks while Israel builds in annexed Arab east Jerusalem and the rest of the occupied West Bank.
The Palestinians have two options − if they present their bid in the U.N. Security Council, they will surely face a U.S. veto.
If they go before the General Assembly, where they could ask to upgrade their representation from current observer status to non-member state, they have a very good chance of success, as Washington has one vote and no veto.
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BRASILIA - The BRICS major emerging markets are in preliminary talks about increasing their holdings of euro-denominated bonds in a bid to help ease the European debt crisis, a senior Brazilian government official told Reuters on Tuesday.
The talks are still in a "preliminary stage," said the source, who asked not to be identified because the negotiations are ongoing. The BRICS group comprises Brazil, Russia, India, China and South Africa
The official said any action would not involve "the majority" of countries' reserves, but did not provide additional details.
Brazilian Finance Minister Guido Mantega said finance ministers and central bank presidents from the BRICS members would discuss the euro zone crisis at a Sept. 22 meeting in Washington.
"We're going to meet next week in Washington, and we're going to talk about what to do to help the European Union get out of this situation," Mantega told reporters in Brasilia.
Before the meeting, Mantega intends to discuss proposals with his BRICS colleagues by telephone, said another Brazilian source with direct knowledge of the issue.
Brazilian financial newspaper Valor reported earlier Tuesday that purchases could be limited to debt from the more financially solid European nations.
The euro zone debt crisis has roiled global markets for more than a year, with speculation mounting recently that Greece could default or even exit the 17-nation euro zone monetary union.
Read more: http://www.vancouversun.com/business/BRICS+weighs+buying+euro+denominated+debt+Source/5396641/story.html#ixzz1XwmWZnTG
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Greece should leave the euro zone in order to prevent the sovereign debt crisis engulfing major economies and threatening its very existence, a fund manager told CNBC.
"We need to move on from the dead wood in the euro zone because it is that dead wood which potentially is going to infect the whole piece," Henry Dixon fund manager at Matterley Asset Management told CNBC Tuesday.
"We have a chance now to contain it at Greece, maybe Portugal. Ireland has done a great job in dealing with its crisis. It's telling that there has been very little rhetoric about Greece," he said.
He added that the opportunity existed now to stem the contagion because the alternative would be that the sums would get really vast if Italy and Spain get brought into the picture.
"Greece accounts for around 5 percent of euro zone debt outstanding but that bad 5 percent is at risk of bringing down the whole house. Italy accounts for around 20 percent, much the same in Spain," Dixon said.
In response to reports that the Italian government had held talks with the Chinese sovereign wealth fund, Dixon said China knows the importance of Italy and Spain to the euro zone economy.
This downbeat view of Greece has been echoed by a number of analysts and market commentators in recent weeks despite comments by Germany's finance minister, Wolfgang Schaeuble that there would be no exit of Greece from the euro.
Chris Scicluna, deputy head of economics at Daiwa Capital Markets told CNBC that Greece cannot cope with more austerity and needs aggressive debt restructuring.
He said giving Greece the next tranche of EU aid would stall the crisis temporarily.
"We would not be surprised to see things coming apart before the end of the year, resulting in an eventual sizeable writedown of Greek government debt," Scicluna said.
© 2011 CNBC.com
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One swimming in cash and the other struggling to stay afloat, both China and the US are dispatching senior officials to Europe amid growing fears that the debt-laden bloc may drag them down in its fall.
As Europe’s leaders dither in the gathering storm, its main trading partners are taking steps to safeguard their interests.
The US Treasury secretary, Timothy Geithner, will be making on Friday his second trip to Europe in less than a week, while the chairman of China’s largest sovereign fund was in Rome last week for talks with Italy’s finance minister, Giulio Tremonti.
The high-profile visits come amid heightened concern about Europe’s debt crisis and the risk of further contagion, with the prospect of a Greek default on its debt now back on the table.
European stock markets have slipped to their lowest level since 2009 following a month of torrid trading, with leading French banks losing up to two thirds of their market value.
And with European leaders showing little appetite for bold moves, governments in Washington and Beijing are concerned things may get worse.
Fears of contagion in Europe’s debt crisis have hinged on Italy, whose ballooning public debt is second only to that of Greece.
The eurozone’s third-largest economy has been plagued by a toxic cocktail of high debt, slow growth and persistent political instability, which has rattled investor confidence and hampered Italy’s efforts to raise money on the liquidity market.
As a result, the Italian government has turned to China in the hope that it can sell chunks of its debt, and of its cash-strapped businesses, to Beijing.
“If they help get Italy’s sputtering growth back on track, foreign investments are most welcome, even if they come from China,” said Françoise Lemoine, a China expert at the EHESS in Paris.
Ironically, Italy’s overture to China has been led by Finance Minister Giulio Tremonti, who once warned of the threat of a “reverse colonisation” by China.
On Tuesday, Italian officials confirmed that Tremonti had met with the powerful chairman of the state-owned China Investment Corporation (CIC), whose job is to invest of Beijing's $3.2 trillion in foreign reserves. But there was no confirmation of a deal.
Adding to the sense of urgency, it later emerged that Italy had paid a record 5.6% interest on the sale of five-year bonds, dangerously close to the 7% mark that heralded bailouts for Greece, Portugal and Ireland.
Should Italy suffer a similar fate to Greece, it would spell disaster for Europe – and indeed for China.
“Europe is the biggest importer of Chinese goods, ahead of the US, accounting for 19% of China’s exports,” Lemoine told FRANCE 24.
A sharp downturn in Europe would bring consumption down and hurt China’s export-oriented economy.
“China will be keen to avoid a repeat of the job haemorrhage caused by the subprime crisis in the US and Europe, when millions of mainly seasonal workers in China lost their jobs, though they didn’t appear in official statistics,” said Thomas Vendryes of the Paris School of Economics, in an interview with FRANCE 24.
But it’s not just jobs China is concerned about. A collapse of the eurozone could also jeopardise the estimated 700 billion euros worth of European debt purchased by Beijing.
Such is the scale of China’s involvement in Europe, “that it is in Beijing’s best interest to help preserve the stability of the eurozone”, said Lemoine.
Another country in need of a stable and healthy trading partner is the US.
Unlike China, the US is not in a position to prop up Europe’s faltering economies. But it is just as vital for Washington to see Europe growing again as it is for Beijing.
In rare criticism of his transatlantic allies, US President Barack Obama has urged European leaders to coordinate their efforts to deal with the debt crisis.
Underscoring Washington’s concern, Treasury Secretary Timothy Geithner will take the unprecedented step of attending a meeting of EU finance ministers in Poland on Friday, less than a week after flying back from a G7 meeting in Marseille.
In between the two trips, Geithner warned European leaders not to delay their efforts to stem the crisis. “Europe needs to take more forceful action to generate confidence that it can and will resolve its crisis,” he said in an op-ed published in the Financial Times on Monday.
Christine Rifflart, a US economy specialist at the Parisian University Sciences Po, says Geithner will arrive with a clear message for European leaders: “Slow down your austerity drive or you will hamper our new stimulus effort”.
Indeed, while European governments scramble to cut left, right and centre, Obama has presented a new plan to stimulate demand and boost job creation. And what he doesn’t want, said Rifflart, “is for his plan to result in the US buying European goods but not the other way round”.
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Back in the year 2000, 11.3% of all Americans were living in poverty. Today,15.1% of all Americans are living in poverty. The last time the poverty level was this high was back in 1993.
However, it is important to keep in mind that the government definition of poverty rises based on the rate of inflation. If inflation was still calculated the way that it was 30 or 40 years ago, the poverty line would be much, much higher and millions more Americans would be considered to be living in poverty.
So why is poverty in America exploding? Who is getting hurt the most? How is America being changed by this? What is the future going to look like if we remain on the current path?
Let's take a closer look at poverty in America....
The Shrinking Number Of Jobs
Unemployment is rampant and the number of good jobs continues to shrink. Once upon a time in America, if you really wanted a job you could go out and get one. Today, competition for even the lowest paying jobs has become absolutely brutal. There simply are not enough chairs at the "economic table", and not being able to get a good job is pushing large numbers of Americans into poverty.....
*There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million people to the population since then.
*Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
*If you gathered together all of the unemployed people in the United States, they would constitute the 68th largest country in the world.
*According to John Williams of shadowstats.com, if you factored in all of the short-term discouraged workers, all of the long-term discouraged workers and all of those working part-time because they cannot find full-time employment, the real unemployment rate right now would be approximately 23 percent.
*If you have been unemployed for at least one year, there is a 91 percentchance that you will not find a new job within the next month.
The Working Poor
The number of low income jobs is rising while the number of high income jobs is falling. This has created a situation where the number of "the working poor" in America is absolutely skyrocketing. Millions of Americans are working as hard as they can and yet they still cannot afford to lead a middle class lifestyle.
*Since the year 2000, we have lost approximately 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
*Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
*Between 1969 and 2009, the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
*According to a report released in February from the National Employment Law Project, higher wage industries are accounting for 40 percent of the job losses in America but only 14 percent of the job growth. Lower wage industries are accounting for just 23 percent of the job losses but 49 percent of the job growth.
*Half of all American workers now earn $505 or less per week.
*Last year, 19.7% of all U.S. working adults had jobs that would not have been enough to push a family of four over the poverty line even if they had worked full-time hours for the entire year.
*The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.
Unprecedented Dependence On The Government
Because they cannot get good jobs that will enable them to support themselves and their families, millions of Americans that used to be hard working contributors to society are now dependent on government handouts. Nearly every single measure of government dependence is at a record high, and there are no signs that things are going to turn around any time soon.
*One out of every six Americans is now enrolled in at least one government anti-poverty program.
*Nearly 10 million Americans now receive unemployment benefits. That number is almost four times larger than it was back in 2007.
*More than 45 million Americans are now on food stamps. The number of Americans on food stamps has increased 74% since 2007.
*Approximately one-third of the entire population of Alabama is now on food stamps.
*More than 50 million Americans are now on Medicaid.
*Back in 1965, only one out of every 50 Americans was on Medicaid. Today,approximately one out of every 6 Americans is on Medicaid.
*In 1980, just 11.7% of all personal income came from government transfer payments. Today, 18.4% of all personal income comes from government transfer payments.
The Suffocating Cost Of Health Care
Millions of American families are being financially crippled by health care costs. The U.S. health care system is deeply, deeply broken and Obamacare is going to make things even worse. Health care is one of the top reasons why American families get pushed into poverty. Most of us are just one major illness or disease from becoming financially wrecked. Just ask anyone that has gone through it. The health insurance companies do not care about you and they will try to wiggle out of their obligations at the time when you need them the most. If you talk to people that have been through bankruptcy, most of them will tell you that medical bills were at least partially responsible.
*In America today, there are 49.9 million Americans that do not have any health insurance. One single medical bill could easily wipe out the finances of most of those people.
*Only 56 percent of Americans are currently covered by employer-provided health insurance.
*According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States. Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.
*According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980. Today they account for approximately 16.3%.
More Children Living In Poverty
The United States has a child poverty rate that is more than twice as high as many European nations. We like to think that we have "the greatest economy on earth", but the reality is that we have one of the highest child poverty rates and it increased once again last year.
*The poverty rate for children living in the United States increased to 22% in 2010. That means that tonight more than one out of every five U.S. children is living in poverty.
*The poverty rate for U.S. adults is only 13.7%.
*Households that are led by a single mother have a 31.6% poverty rate.
*Today, one out of every four American children is on food stamps.
*It is being projected that approximately 50 percent of all U.S. children will be on food stamps at some point in their lives before they reach the age of 18.
*There are 314 counties in the United States where at least 30% of the children are facing food insecurity.
*More than 20 million U.S. children rely on school meal programs to keep from going hungry.
*It is estimated that up to half a million children may currently be homeless in the United States.
The Plight Of The Elderly
The elderly are also falling into poverty in staggering numbers. They may not be out protesting in the streets, but that does not mean that they are not deeply, deeply suffering.
*One out of every six elderly Americans now lives below the federal poverty line.
*Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.
*The Baby Boomers have only just begun to retire, and already our social programs for seniors are starting to fall apart. In 1950, each retiree's Social Security benefit was paid for by 16 U.S. workers. According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.
Squeezed By Inflation
Rising inflation is squeezing the budgets of average American families like never before. Federal Reserve Chairman Ben Bernanke claims that inflation is still low, but either he is delusional or he has not been to a supermarket lately.
Personally, I do a lot of grocery shopping at a number of different stores, and without a doubt prices are absolutely soaring. Many of the new "sale prices" are exactly what the old "regular prices" were just a few weeks ago.
Some companies have tried to hide these price increases by shrinking package sizes. But there is no hiding the pain on the old wallet once you fill up your cart with what you need to feed your family.
*Over the past year, the global price of food has risen by 37 percent and this has pushed approximately 44 million more people around the world into poverty.
*U.S. consumers will spend approximately $491 billion on gas this year. That is going to be a brand new all-time record.
*Right now, the average price of a gallon of gasoline in the United States is$3.649. That is 94 cents higher than 12 months earlier and it is a brand new record for this time of the year.
A Smaller Share Of The Pie
The size of the "economic pie" in America is shrinking, and the share of the pie for those that are poor is shrinking a lot faster than the share of the pie for those that are wealthy.
*According to the Washington Post, the average yearly income of the bottom 90 percent of all U.S. income earners is now just $31,244.
*When you look at the ratio of employee compensation to GDP, it is now the lowest that is has been in about 50 years.
*At this point, the poorest 50% of all Americans now control just 2.5% of all of the wealth in this country.
*Big corporations are even recognizing the change that is happening to America. Just consider the following example from a recent article in the Huffington Post....
Manufacturers like Procter & Gamble, the household-goods giant responsible for everything from Charmin and Old Spice to Tide, are concentrating their efforts on luxury and bargain items, putting less emphasis on products aimed at the middle class, the Wall Street Journal reports.
America is fundamentally changing. We were a nation that had the largest middle class in the history of the globe, but now we are becoming a nation that is deeply divided between the haves and the have nots.
Perhaps you are still doing fine. But don't think that economic disaster cannot strike you. Every single day, thousands more Americans will lose their jobs or will discover a major health problem. Every single day, thousands more Americans will lose their homes or will be forced to take a pay cut.
If you still have a warm, comfortable home to sleep in, you should be thankful. Poverty is a very sneaky enemy and it can strike at any time. If you are not careful, you might be the next American to end up sleeping in your car or living in a tent city.
It is easy to disregard a couple of statistics, but can you really ignore the vast amount of evidence presented above?
It is undeniable that America is getting poorer. Poverty is spreading and hopelessness and despair are rising. There is a reason why the economy is the number one political issue right now. Millions upon millions of Americans are in deep pain and they want some solutions.
Unfortunately, it appears quite unlikely that either major political party is going to offer any real solutions any time soon. So things are going to keep getting worse and worse and worse.
Should we just keep doing the same things that we have been doing over and over and over and yet keep expecting different results?
What we are doing right now is not working. We are in the midst of a long-term economic decline. Both major political parties have been fundamentally wrong about the economy. It is time to admit that.
If we continue on this path, poverty in America is going to continue to get a lot worse. Millions of families will be torn apart and millions of lives will be destroyed.
America please wake up.
Time is running out.
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A FORMER head of Saudi Arabian intelligence and ex-ambassador to Washington, Turki al-Faisal, has warned that an American veto of Palestinian membership of the United Nations would end the ''special relationship'' between the two countries, and make the US ''toxic'' in the Arab world.
The warning comes as Washington is scrambling to avoid a scenario where it alone casts a veto in the UN Security Council against the Palestinian bid for recognition of statehood, which is expected to be formally requested next week.
The US is putting considerable pressure on the Palestinians not to submit the request, and on Britain - the only other permanent member of the Security Council that has not publicly supported the Palestinian request - to also exercise its veto if necessary.
Mr Faisal says in an article in The New York Times that the US will jeopardise its close ties with Saudi Arabia and further undermine its position in a changing Arab world if it again sides with Israel.
''The United States must support the Palestinian bid for statehood at the United Nations this month or risk losing the little credibility it has in the Arab world. If it does not, American influence will decline further, Israeli security will be undermined and Iran will be empowered, increasing the chances of another war in the region,'' Mr Faisal says.
''Moreover, Saudi Arabia would no longer be able to co-operate with America in the same way it historically has. With most of the Arab world in upheaval, the 'special relationship' between Saudi Arabia and the United States would increasingly be seen as toxic by the vast majority of Arabs and Muslims, who demand justice for the Palestinian people.'' He adds: ''Saudi leaders would be forced by domestic and regional pressures to adopt a far more independent and assertive foreign policy.''
Mr Faisal, a vigorous advocate of Palestinian statehood who has previously accused the US of bias towards Israel, says that the two-decade-long Oslo peace process has not yielded results and should be replaced with ''a new paradigm based on state-to-state negotiations''.
This is a view shared by some European nations, including France, which regard the Oslo process as a trap that has failed to deliver statehood for the Palestinians and is unlikely to do so in the near future.
''American support for Palestinian statehood is therefore crucial, and a veto will have profound negative consequences. In addition to causing substantial damage to American-Saudi relations and provoking uproar among Muslims worldwide, the United States would further undermine its relations with the Muslim world, empower Iran and threaten regional stability,'' Mr Faisal writes.
The Palestinian President, Mahmoud Abbas, has said he will submit a request to the Security Council for full membership of the UN when he is in New York for the opening of the General Assembly next week.
If that is vetoed by the US, the request will move to the General Assembly, which has the power only to grant enhanced observer status, but where Israel concedes the Palestinians are all but certain to win.
The prospect has alarmed the Americans and the Israelis, who say the move would undermine peace efforts and lead to further violence. The Palestinians say there is no peace process to speak of.
George Mitchell, until recently Barack Obama's Middle East envoy, said last week that he saw little chance of the US persuading the Palestinians not to submit the request.
The US Congress is also pressuring the Palestinians to withdraw the request by threatening to cut off funding.
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France's biggest lenders saw their shares fall more than 10pc amid fears their credit ratings will be downgraded over exposure to Greek debt, while global stock markets dropped sharply.
The FTSE saw £22bn knocked off its value, closing down 85.03 at 5129.62. The Cac-40 in France ended 4pc lower and the Dax in Frankfurt was down 2.3pc after touching its lowest point since July 2009.
In the US, the Dow Jones closed up 0.6pc at 11061.12. It was trading down 0.8pc in the afternoon, with analysts at Bank of America souring the mood further by warning that the S&P 500 – which was 1pc lower at 1145.57 – could fall as far at 910. The warning came as Bank of America announced 30,000 job cuts as it looks to adjust to tough trading conditions.
Market concerns escalated after Germany hardened its tone over bail-out loans for Greece, with Chancellor Angela Merkel backing remarks from her economy minister suggesting that an "orderly default" could no longer be ruled out.
German officials reiterated that Greece must meet bail-out terms to secure the next tranche of loans while the embattled country's deputy finance minister suggested cash could run low from next month. "We have definite manoeuvering space within October," said Philippos Sachinidis when asked how long the government would be able to pay wages and pensions.
The euro dropped to a 10-year low versus the yen and a seven-month low against the dollar as currency traders shifted their holdings to safe havens. The shift to the yen keeps alive the risk that Japanese authorities will follow the Swiss in intervening to weaken their currency.
"With the Swiss National Bank drawing a line in the sand, investors looking to exit the eurozone troubles are seeking the safety of the yen," said Jane Foley, senior currency strategist at Rabobank. The pound fell to a two-month low versus the dollar, with the yield of 10-year gilts hitting record lows of 2.198pc on safe-haven buying.
Markets braced themselves for credit rating downgrades for France's top banks, with speculation that Moody's will lower the ratings on BNP Paribas, Credit Agricole and Societe Generale. Credit Agricole shares fell 10.6pc, Societe Generale slid 10.5pc and BNP was off 12.4pc.
Societe Generale claimed its exposure to periphery eurozone debt was €4.3bn (£3.7bn), a level it labelled "declining and manageable". It said it would nonetheless speed up asset disposals and cut costs to free up capital.
BNP Paribas issued a statement in which it pointed out that Moody's had put French banks on review for downgrade as far back as June and that no rating decision had been "communicated". The bank said it had €3.5bn of exposure to Greek sovereign debt.
According to a report by the Bank for International Settlements, released in June, French banks top the list of creditors to Greek debt, with $56.7bn (£35.8bn) of exposure.
Bond yields for Europe's periphery nations were also hit hard. Italy sold €7.5bn of one-year debt at an average yield of 4.15pc, the highest level since September 2008.
Meanwhile, credit default swaps (CDS) on Greek debt – which measure the likelihood of default – soared to a record 3,650 basis points and Italian CDS broke through the 500 barrier for the first time.
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|The Turkish Navy is planning to dispatch three frigates to the Eastern Mediterranean to ensure freedom of navigation and to confront Israeli warships if necessary, a Turkish news report said on Monday.|
|The Turkish frigates, to be dispatched by the Navy's Southern Sea Area Command, will provide protection to civilian ships carrying humanitarian aid to Gaza, blockaded by Israel since 2007, the Turkish daily Sabah reported. If the Turkish warships encounter an Israeli military ship outside Israel's 12-mile territorial waters, they will advance up to 100 meters close to the ship and disable its weapon system, in a confrontation that resembles dogfights in the Aegean Sea with Greek jet fighters, according to the report.|
The report comes days after Prime Minister Recep Tayyip Erdoğan announced that Turkish warships will escort civilian aid ships headed to Gaza to prevent a repetition of last year's Israeli raid on a Turkish-owned ship that killed eight Turks and a Turkish-American, setting the stage for a potential naval confrontation with its former ally.
Turkey announced a set of sanctions against Israel after it refused to apologize for the 2010 raid, expelling the Israeli ambassador and other senior diplomats and suspending military agreements with Israel. Turkey also promised to take measures to ensure freedom of navigation in the eastern Mediterranean.
Israeli Deputy Prime Minister Dan Meridor said Erdoğan's remarks were “harsh and serious,” but stressed that Israel was not interested in a war of words with its once-close ally. “Our silence is the best response. I hope this phenomenon will pass,” he said on Friday.
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Speaking on Jeff Randall Live, Elena Panaritis said: "There is a possibility of running out of cash, especially if we don't get the suggested programme tranches... that we're expected to receive."
Greece is awaiting the next instalment of its bailout money from the so-called "troika" of the European Union, European Central Bank and International Monetary Fund.
Eurozone policymakers have threatened to withhold the payment of about 8bn euros, because Greece missed its fiscal targets.
Referring to the country's drastic deficit-cutting budgetary plan, Ms Panaritis said: "That's why we're moving on as fast as possible, to be able to not get into that situation."
The MP's admission came after the prime minister George Papandreou announced a new revenue-raising property tax.
The EU's economic affairs commissioner, Olli Rehn, said the measure went "a long way" towards meeting the country's targets.
Earlier, Greece's deputy finance minister Filippos Sachinidis stated the country had funds to operate until next month.
Data from the Finance Ministry showed the budget deficit had widened by 22% in the year to August to 18.1bn euros.
Ms Panaritis said the country's economic crisis was a "structural" one, rather than a liquidity one.
"The structural reforms take, unfortunately, a longer time than the actual fiscal reforms, which are the measures we've taken for the past year."
She stressed, however, that Greece had chosen to stay in the euro and that was why it was making such drastic cuts.
"We do need to be a little more patient about our returns and our tangible results."
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