Tuesday, December 20, 2011
A look back at the big stories on the BBC News website suggests it's been a tumultuous year, with uprisings across the Arab world, an earthquake in Japan and the deaths of Osama Bin Laden and Kim Jong-il. But can you instantly know if a year is going to go down in history, asks author Tim Footman.
As 2011 staggers to a close, it does feel somehow more momentous than an ordinary year. Regimes have crumbled, despots and demagogues were toppled, cities blazed and capitalism itself started looking a bit rough.
Even the speed of light changed, allegedly. Could this turn out to be a big, historical year to rank alongside 1989 (tanks in Tiananmen Square, dancing on the Berlin Wall), 1968 (tanks in Prague, riots in Paris, the death of Martin Luther King) or 1956 (Hungary, Suez, Elvis on the Ed Sullivan show)?
It's probably fair to say that the top story has to be the Arab Spring, although as a historical event, it's still a work in progress. And there are still arguments as to whether it is best regarded as a single event or a series of discrete revolts; it's fair to ask if a single Tunisian street vendor had not reacted to official harassment, would events have played out in the same way.
And there is always the matter of perspective. If you're not directly affected by events in North Africa or the Middle East, your own big headlines of 2011 might have been the births of the seven billionth child or South Sudan, the earthquakes in Turkey or New Zealand, the elections in Ireland or DR Congo or the deaths of footballer Socrates or singer Amy Winehouse.
But two facts are clear. One is that there are very few big stories that remain purely local. The knock-on effects of the tsunami in Japan forced governments around the world to review their nuclear power policies. Economic woes in a handful of countries affected the whole eurozone and beyond. The "Indignant" protesters in Spain set the agenda - fluid and unfocused as it may have been - for the Occupy movements in New York and London and beyond.
A deadly strain of bird flu with the potential to infect and kill millions of people has been created in a laboratory by European scientists – who now want to publish full details of how they did it.
The discovery has prompted fears within the US Government that the knowledge will fall into the hands of terrorists wanting to use it as a bio-weapon of mass destruction.
Some scientists are questioning whether the research should ever have been undertaken in a university laboratory, instead of at a military facility.
The US Government is now taking advice on whether the information is too dangerous to be published.
To see the graphic: The last outbreak - A deadly virus even before the latest twist
"The fear is that if you create something this deadly and it goes into a global pandemic, the mortality and cost to the world could be massive," a senior scientific adviser to the US Government told The Independent, speaking on condition of anonymity.
"The worst-case scenario here is worse than anything you can imagine."
For the first time the researchers have been able to mutate the H5N1 strain of avian influenza so that it can be transmitted easily through the air in coughs and sneezes. Until now, it was thought that H5N1 bird flu could only be transmitted between humans via very close physical contact.
Dutch scientists carried out the controversial research to discover how easy it was to genetically mutate H5N1 into a highly infectious "airborne" strain of human flu. They believe that the knowledge gained will be vital for the development of new vaccines and drugs.
But critics say the scientists have endangered the world by creating a highly dangerous form of flu which could escape from the laboratory – as well as opening a Pandora's box for fanatical terrorists wishing to make a bio-weapon.
The H5N1 strain of avian influenza has killed hundreds of millions of birds since it first appeared in 1996, but has so far infected only about 600 people who came into direct contact with infected poultry.
What makes H5N1 so dangerous, though, is that it has killed about 60 per cent of those it has infected, making it one of the most lethal known forms of influenza in modern history – a deadliness moderated only by its inability (so far) to spread easily through airborne water droplets.
Scientists are in little doubt that the newly created strain of H5N1 – resulting from just five mutations in two key genes – has the potential to cause a devastating human pandemic that could kill tens of millions of people. The study was carried out on ferrets, which when infected with influenza are the best animal "model" of the human disease.
The details of the study are so sensitive that they are being scrutinised by the US Government's own National Science Advisory Board for Biosecurity, which is understood to have advised American officials that key parts of the scientific paper should be redacted to prevent terrorists from using the information to reverse-engineer their own lethal strain of flu virus.
In an unprecedented move, the Biosecurity board is believed to have told the US Government that there is a serious possibility of potentially dangerous information being misused if the full genetic sequence of the mutated H5N1 virus were to be published in open scientific literature.
A senior source close to the Biosecurity board, who wished to remain anonymous, told The Independent that the National Institutes of Health, which funded the work, is about to make a decision on how much of the scientific paper on the H5N1 super strain should be published, and how much held back.
"There are areas of science where information needs to be controlled," the scientist said. "The most extreme examples are, for instance, how to make a nuclear weapon or any weapon that is going to be used primarily to kill people. The life sciences really haven't encountered this situation before. It's really a new age."
The study was carried out by a Dutch team of scientists led by Ron Fouchier of the Erasmus Medical Centre in Rotterdam, where the mutated virus is stored under lock and key, but without armed guards, in a basement building.
Dr Fouchier, who declined to answer questions until a decision is made on publication, said in a statement released on the university's website that it only took a small number of mutations to change the avian flu virus into a form that could spread more easily between humans.
"We have discovered that this is indeed possible, and more easily than previously thought. In the laboratory, it was possible to change H5N1 into an aerosol-transmissible virus that can easily be rapidly spread through the air," Dr Fouchier said. "This process could also take place in a natural setting.
"We know which mutation to watch for in the case of an outbreak and we can then stop the outbreak before it is too late. Furthermore, the finding will help in the timely development of vaccinations and medication."
A second, independent team of researchers led by Yoshihiro Kawaoka of the universities of Wisconsin and Tokyo is understood to have carried out similar work with similar results, which has underlined how easy it is to create the super virus with a combination of deliberate mutations and random genetic changes brought about by passing avian flu manually from the nose of one ferret to another.
Some scientists have privately questioned whether such research should have been done in a university department that does not have the sophisticated anti-terrorist security of a military facility. They also point out that experimental viruses kept in seemingly secure laboratories have escaped in the past to cause human epidemics – such as a 1977 flu outbreak.
"There are people who say that the work should never have been done, or if it was done it should have been done in a setting where the information could be better controlled," said the source close to the biosecurity board.
"With influenza now it is possible to reverse engineer the virus. It's pretty common technology in many parts of the world. With the genomic sequence, you can reconstruct it. That's where the information is dangerous," he said.
"It's scary from a number of different angles. You want to have the vaccines and therapeutics in place, and you need to have a much information as you can about a particular virus, but you also worry about it from a biosecurity perspective."
EUROPE'S beleaguered banks are widely expected to borrow about 250 billion ($328.3bn) from the European Central Bank tomorrow when it offers three-year emergency loans for the first time.
The ECB, which said this month it would provide the so called three-year longer-term refinancing operations, hopes that it will ease banks' funding problems and so help small and medium-sized businesses.
AFP - Fitch Ratings warned Monday it could lower the triple-A ratings of Europe's investment and development banks because they rely on support from troubled member countries.
Fitch said it had put the top ratings of the European Investment Bank and the Council of Europe Development Bank on "rating watch negative," a status that means thy could be downgraded within the next three months.
Chancellor George Osborne has refused to contribute to the IMF's bailout fund for the EU, Sky News has learned.
Mr Osborne told his EU colleagues he will not provide any cash to boost the 200bn euro fund, which is specifically aimed at the troubled eurozone.
The conference call with 26 other EU finance ministers lasted three hours but ended without Britain's agreement to put in up to 50bn euros.
Mr Osborne insisted that while Britain was ready to take part in global efforts to bolster the IMF's coffers, it would not participate in a fund only aimed at the beleaguered eurozone region.
Sky's economics editor Ed Conway said: "Although we had known for a while that George Osborne had been reluctant to give money specifically for this eurozone bailout package, the fact he has gone ahead and done it will come as another blow to what was supposed to be the plan to save the euro."
He added: "It leaves us going into the Christmas season with no conclusive and no big bazooka that had been promised for so long. There will be consternation, I think, among investors at this news."
Sweden, Denmark, Poland and the Czech Republic joined the eurozone nations in contributing to the Washington-based fund, subject to parliamentary approval.
A Treasury spokesman said: "The UK has always been willing to consider further resources for the IMF but for its global role and as part of a global agreement."
Paul Donovan, Global Economist, Managing Director UBS Investment Bank told Sky's Jeff Randall: "It's not just the UK that’s not playing ball.
"The American's are saying the IMF is not bailing out California, so why should it start bailing out eurozone provinces."
Dan Morris, vice president and global strategist, JPMorgan Asset Management questioned whether the IMF fund could be successful.
"The fundamental change that needs to take place is at the country level," he said.
"What is going on in Greece, Spain and Italy in terms of the austerity and reform packages is really the key thing for the markets right now."
Mr Osborne's move comes days after David Cameron became the first British prime minister to use his veto by refusing to agree a new EU treaty aimed at easing the eurozone crisis.
The German foreign minister Guido Westerwelle pledged on Monday to "build bridges" with Britain, insisting it was an "indispensable partner" in the EU.
At a joint press conference in London with Foreign Secretary William Hague, Mr Westerwelle said the union had to remain "united".
"For Germany the United Kingdom is an indispensable partner in the European Union," he said. "We think we have a common destiny...
"No country - not Germany, not Great Britain, not France - no country is strong and big enough to face the challenges of globalisation alone."
Mr Cameron has faced accusations that he risks making the UK isolated from the rest of Europe and unable to make decisions about the future of world finance.
But the Prime Minister has insisted he had to take the drastic step because the treaty being discussed did not "adequately protect Britain's interests".
Using the veto has put the Tories ahead of Labour in recent opinion polls and bolstered Mr Cameron's standing in his own party but it has angered his Lib Dem coalition partners.
Bond market pressure on the euro zone will be “very significant” in the first quarter of next year, European Central Bank President Mario Draghi said on Monday.
Draghi said that in the first quarter of next year, some 230 billion euros of bank bonds are expiring, 250 to 300 billion in government bonds, and that more than 200 billion in collateralised obligations issued by firms will be due in the course of next year. “So the pressure that bond markets will be experiencing is really very, very significant if not unprecedented,” Draghi said in testimony to the European Parliament, and added banks have also other problems, including lack of capital.
European policymakers are striving to set up a firewall around the bloc robust enough to deter market attacks but many investors believe only stronger ECB action, particularly in the buying of euro zone government bonds, will do the trick.
Italy, the euro zone’s third largest economy which has been dragged to the centre of the crisis, has about 150 billion euros in debt falling due between February and April of next year.
Draghi gave no hint that the ECB was about to change tack on its bond-buying programme, although it will later this week offer banks three-year funds for the first time to help ward off a freeze in interbank lending.
“The treaty specifies very closely what our remit is, namely ensure price stability in the medium term. The treaty also forbids monetary financing and … we want to act within the treaty,” he said.
“We know that banks experience now and will be experiencing, even more so, a very significant funding constraint, especially in the first quarter of 2012,” he said.
Draghi also rejected joint bonds issued by euro zone countries, saying they would only be actual after there was more of a fiscal union than is currently the case.
Joint bonds would cut financing costs for the most indebted countries, but likely lift them for the ones with lowest bond yields, especially Germany.
“The more countries release in terms of national sovereignty on their fiscal stance .. the greater are going to be the benefits of any sort of euro bond concept,” the Italian said.
“(But) if you have separate countries that go on and spend on their own, separately and tax on their own, you cannot think about common issuance.”
Turning to the future of the common currency, Draghi dismissed nay-sayers who doubt the sustainability of the euro.
“I have no doubt whatsoever about the strength of the euro, about its permanence, about its irreversibility,” he said.
Draghi also said austerity programmes necessary to cut government debt would cause economic contraction within the single currency area, but only in the immediate future, and even that could be mitigated by economic reforms.
“What we want is that this contraction to be short-term and we want to activate all the channels that would enable confidence to return to markets, spreads to go down, costs of credit to go down, ultimately for job-creation to take off,” he said.
“Euro area economic activity should recover, albeit very gradually, in the course of 2012,” he said, but added there was a danger of recession looming if banks don’t lend to firms and private consumers, and that the central bank would do everything it can.
“What we certainly want to avoid is that serious severe credit tightening that could induce a further slowdown of growth and a possible recession,” Draghi said. “We want to avoid that.”
ROME — With its elegant marble floors, ornately carved wooden ceiling and flattering lighting, the central meeting point of Italy’s Lower House is arguably one of the most beautiful political arenas in the world.
Italy's Prime Minister Mario Monti arrived for a conference at the Bank of Italy in Rome on Friday.
But in recent weeks, Italians have come to view those who frequent the hall — known as the Transatlantico and modeled on the great room of an ocean liner — as a pampered elite, as sheltered from the global economic turbulence as the palazzo’s inner courtyard.
On Friday, the month-old government of Prime MinisterMario Monti easily won a confidence vote on a $40 billion set of austerity measures, including tax increases, changes to the pension system and some growth incentives, with 495 votes to 88. After the vote, the prime minister told lawmakers that Italy was at “maximum risk.” He added, “A lot is at stake; we cannot permit ourselves to live the way we did before.” He said that much would depend “on our capacity to present ourselves as united and credible before the markets.”
Yet even as Mr. Monti, a technocrat who has won the confidence of Parliament but not its loyalty, struggles to restore faith in a government asking for sacrifices, he is facing a power battle — and a culture clash — with lawmakers. The prime minister has asked Italians to accept new austerity to reduce the country’s public debt and restore market trust. But Italian politicians, whose salaries rank above the European Union average and who are widely seen as more eager to protect their privileges than their country’s future, have balked at the prospect of belt tightening for themselves.
Last week, lawmakers grudgingly agreed to changes in their pension plan following a public outcry after they blocked an effort by Mr. Monti’s government to cut their salaries as part of the austerity plan.
This has not gone over well with the public. “The gap between citizens and politics is becoming wider and wider,” said Giovanni Sermoneta, 54, a shopkeeper in downtown Rome, echoing a common sentiment. “They can’t think that they can keep on earning $26,000 a month when workers are asked to work until they are 70 with salaries that are among the lowest in Europe.”
Italy’s Parliament has 952 lawmakers, 630 in the Lower House and 322 in the Senate, to say nothing of thousands of local politicians in a country of 60 million. National lawmakers’ take-home pay ranges between $18,000 and about $27,000 a month — which covers salary, a per diem for living expenses and a personal (but not legislative) staff. Their many perks include gold-plated medical insurance, free travel within Italy and often a car and driver. According to the Bruno Leoni Institute, a market-oriented policy research organization in Turin, Italy, the Italian Parliament costs about $2 billion a year, or around $34 per capita.
In contrast, the United States Congress — 100 senators and 435 members of the House of Representatives for a population of 300 million — costs about $2.2 billion a year to maintain, or $7 per capita, according to a study by Antonio Merlo, the chairman of the Economics Department at the University of Pennsylvania. And they can easily be voted out of office. In Italy, the climate of hostility toward politicians is magnified by the fact that voters do not directly elect members of Parliament. Instead, under a 2005 electoral law passed by the government of Prime Minister Silvio Berlusconi, they are chosen by party leaders who then present a list of candidates to the voters.
Mr. Monti, an economist and university professor, has kept his cool in parliamentary debate that has devolved into the carnival-like. Last week, lawmakers from the anti-immigrant and increasingly euro-skeptical Northern League, a pillar of Mr. Berlusconi’s center-right coalition and now the most vocal opposition party, shouted and held up signs calling the austerity measures a “holdup.”
New York Times
The sudden death of Kim Jong II, of a heart attack aged 69, Monday, Dec. 19 – even though his youngest son Kim Jong-un was hailed as successor – confronts the world for the first time since the Cold War with a leaderless nuclear power about which it knows almost nothing. Though anointed as heir, his youngest son Kim Jong-un, believed to be 26, is more than likely to be challenged for his claim to power. At present, therefore, no one knows who controls North Korea's nuclear arsenal - any more than the identity of the country's next ruler after the dust settles.
Meanwhile there are pressing questions: Will Kim Jong II's successor follow through on his consent this week to suspend Pyongyang's enriched-uranium nuclear weapons program for 240,000 tonnes food aid from Washington? How will the 1.2 million strong standing army of the North respond to the first actions of South Korea, Japan and US forces in the Far East in placing their armies on alert?
There has been no sign of motion from this huge army apart from test-firing a short-range missile Monday morning from the east coast.
This is almost certainly the calm before the storm. A year ago, Kim Jong Il began grooming his son for the leadership, the third of their dynasty, by appointing him Vice Chairman of the Central Military Commission of the Workers Party of Korea and conferring on him the rank of four-star general.
Still, he is as shorter on military experience than he is in politics. After the dead leader's funeral on Dec. 28, the army, or parts therefore, will have to decide whether to continue supporting the Kim family's rule in Pyongyang after 60 years or replace it with a different kind of leadership.
The prospect of uncertainty and change there sends shudders down many political spines in Washington, Tokyo and Seoul, as well as in Beijing and Moscow. In recent months, world powers were deeply immersed in the war threats hanging over the Middle East, Syrian bloodshed and Iran's nuclear weapons momentum. Monday, they woke up to a completely unforeseen scenario, an unstable Far East state armed with a nuclear bomb which could take the region in any of five directions:
1. Elements of the North Korean army or its security services could go head to head for a power grab in Pyongyang, potentially sparking civil strife in this enigmatic nation of 24 million.
2. To keep any such violence from spilling across its borders, China may send troops into North Korea bringing similar action from Seoul, possibly with US backing.. China has a large North Korean expatriate minority which respects Pyongyang rather than Beijing and is therefore a source of unrest.
Of the US troops stationed for 58 years on the armistice lines between South and North, about 28,500 remain and could be involved in a conflict with the potential of exploding into another Korean War. The first war in the 1950s cost several armies more than a million lives.
3. The big difference between then and now is that today North Korea has nuclear arms and there is no knowing at what point someone in Pyongyang may decide to use them.
4. A recent Pentagon situation paper estimates that if the Korean Peninsula descended into domestic anarchy and civil strife, the United States would be called on to raise an army of intervention numbering 400,000 soldiers, 100,000 more than the size of US forces fighting in Iraq and Afghanistan at the peak of those conflicts.
5. North Korea maintains thriving nuclear, military and technological relations with Iran and Syria. Hundreds of technicians and engineers, including nuclear and missile experts, have worked for years on their nuclear and missile programs.
Western and Israel intelligence services have never been sure how deeply China is involved in North Korea's nuclear and military assistance to Iran and Syria. Is it just passive? or does Beijing use Pyongyang as a channel for pumping nuclear technology to Tehran and Damascus?
Some Western agencies have recently come to believe that China has a bigger stake in those Middle East countries than realized and much of the military technology transferred by North Korea to Iran is actually of Chinese origin.
A power struggle in Pyongyang, which could be drawn out for as long as a couple of years, could go in many unpredictable directions including stepped-up contribution to the Middle East nuclear race.