Putin says US encouraged election protests

MOSCOW - Russian Prime Minister Vladimir Putin accused the United States of encouraging protests over Russia's parliamentary election and said hundreds of millions of dollars in foreign funds were used to influence the vote.

In his first public remarks about daily demonstrations by protesters alleging Sunday's vote was fraudulent and unfair, Putin said US Secretary of State Hillary Clinton "gave a signal" to Kremlin opponents.

"She set the tone for some opposition activists, gave them a signal, they heard this signal and started active work," Putin said.

Putin said some of the demonstrators who have protested daily over allegations of election fraud were pursuing selfish politicalaims and that most Russians do not want politicalupheaval.

"We are all adults here and we understand that some ... of the organizers act in accordance with a well-known scenario and in their own mercenary politicalinterests," he said.

The United States has expressed serious concern about the conduct of the Russian election, which Clinton suggested was not free or fair.

Jerusalem Post

EU members which use the euro have agreed to a tax and budget pact to tackle the eurozone's debt crisis.

But a German and French attempt to get all 27 EU states to back changes to the union's treaties was dropped after objections from the UK.

Prime Minister David Cameron had insisted on an exemption for the UK from some financial regulations.

Instead, eurozone members and others will adopt an accord with penalties for breaking deficit rules.

The new tougher rules on spending and budgets will now be backed not by an EU treaty but by a treaty between governments. It will be quicker to set up but it may prove less rigorous, says the BBC's Europe editor Gavin Hewitt in Brussels.

But, he says, Europe has taken a big step towards closer integration, with binding rules over tax and spending, and sanctions against countries that overspend.

European Council President Herman Van Rompuy said the leaders of 26 countries had indicated a desire to participate, pending consultation with their parliaments.

There is now a two-speed Europe - after this long night, the French president accepted that.

There is, too, considerable antagonism towards Britain - it used its veto in what is seen in Brussels as Europe's hour of need.

What is unclear is whether European institutions can be used to implement a treaty between governments.

If EU officials are in the room, David Cameron has already laid down a marker that he expected the UK to be involved. It is all a recipe for further tussles.

The big question is what effect all this will have on the eurozone crisis. The main impact will lie in the long-term - the agreement has little to say about the debt mountains and the absence of growth in most of Europe.
Read Gavin's thoughts in full

Mr Cameron said he had not signed up to the deal because, he said, it was not in Britain's interests.

"Those countries that sign this treaty... we wish them well because we want the eurozone to sort out its problems, to achieve that stability and growth that all of Europe - Britain included - needs," he said.

EU leaders aim to have the pact ready to take effect by March.

Among the measures agreed on, leaders pledged to provide more money for the International Monetary Fund (IMF) to fund bailouts.

IMF chief Christine Lagarde welcomed the deal as "a really good step in the right direction".

But the announcement from Brussels failed to lift the markets, which are still hoping for more intervention by the European Central Bank (ECB), and European stocks traded slightly down on Friday.German praise

Nearly 10 hours of talks could not produce an agreement involving all member states. Instead, the 17 members of the eurozone will work on a separate deal outside EU treaties. They will be joined possibly by nine other countries, the EU statement said, leaving the UK as the only exception.
Continue reading the main story
Euro agreement - from the papers

The Guardian says Britain is "facing isolation in Europe" after David Cameron vetoed a revision of the Lisbon treaty.

In the Economist, the Charlemagne's notebook blog describes the agreement - and Britain's non-participation - as Europe's "great divorce".

The Financial Times says EU leaders are "struggling to cope" with what it describes as "a profound split".

The New York Times describes the agreementas "not a perfect solution," because it could be seen as institutionalizing a two-speed Europe - but it says the pact could be ratified much more quickly than a full treaty amendment.

On Friday, Danish Prime Minister Helle Thorning-Schmidt said she would have to consult parliament before agreeing to sign up, according to a Danish press report.

Hungary's Europe Minister Eniko Gyori told the BBC her country was willing to join with the consent opf parliament - contradicting earlier reports. A revised EU statement said Hungary had signalled its intention to join the process.

Mr Sarkozy said the sticking point had been Mr Cameron's insistence on a protocol allowing London to opt-out on proposed change on financial services.

"We could not accept this," he said.

During the talks, eurozone leaders agreed to work on new budgetary rules, which envisage automatic penalties.

The main measures agreed to as part of the new agreement, called a "fiscal compact" include:


David Cameron: It is better to have eurozone countries make arrangements separately a cap of 0.5% of GDP on countries' annual structural deficits
"automatic consequences" for countries whose public deficit exceeds 3% of GDP
the tighter rules to be enshrined in countries' constitutions
European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012
adequacy of 500bn-euro (£427bn; $666bn) limit for ESM to be reassessed
Eurozone and other EU countries to provide up to 200bn euros to the IMF to help debt-stricken eurozone members

The German Chancellor, Angela Merkel, praised the plan of action, saying it would contribute to securing the euro.

"I believe that after long negotiations this is a very, very important result because we have learned from the past and from mistakes and because in future [there will be] binding decisions, binding rules, more influence from the commission, more community and with that higher coherence."

ECB chief Mario Draghi said the accord would lead to much more discipline in economic policy, calling it "a very good outcome for the euro area".

Our correspondent says the immediate test will be whether this agreement persuades the ECB to act more aggressively in the markets and so lower the borrowing costs of troubled countries like Italy and Spain.

The euro was conceived 20 years ago today, but now even Maastricht questions its survival

It all began here, 20 years ago today: the euro adventure. A dozen European political grandees – marshalled by Mrs Thatcher's nemesis, Jacques Delors – signed the single currency into life.

On 9 December 1991 the then 13 European leaders – including Germany's Helmut Kohl, Francois "Sphinx" lMitterrand of France and Italy's Giulio "Il Divo" Andreotti – convened for lunch. They ate at the 400-year-old Chateau Neercanne, about 5km from the centre of Maastricht, to celebrate their decision to pursue European Monetary Union.

Before their meal in the main restaurant, the leaders gathered in the wine cellar for aperitifs and signed their names in charcoal on the sandstone wall – on what is now a glass-enclosed tablet saying Déjeuner Europese Raad (European Council lunch) 09.12.1991. Their names, heavy with history, are on the right, with Mitterrand at the top and John Major, with Delors, at the bottom. Their hostess, Queen Beatrix of the Netherlands, is named on the left.

Last night, two decades later, the now 27 leaders of the EU again sat down to dine. But this time in Brussels, on a mission to save the euro, to save the European union from splitting in two and, potentially, to save the world from slumping into a global recession.

It is a colossal challenge, but it was back in 1991 too, when the euro was viewed as a way of binding together a newly reunited Germany, a historic source of political instability and war, into a Europe of permanent peace and mutual solidarity that was no longer divided between capitalism and communism. As Kohl would say repeatedly: "A European Germany, not a German Europe."

Leo Smeijers, who served Europe's leaders that day and now runs the chateau's L'Auberge brasserie in a former chapel, says Beatrix brought her own staff to look after the 14 at lunch but Hans Snijders, head chef then and now, cooked their food. They ate langoustines and pheasant, washed down with an Australian white (eyebrows raised at that disclosure) and an unrecalled red.

Snijders, sitting quietly with the rest of the staff at his own lunch, laughs at the memory. The mood, says Smeijers, was convivial but serious. He hopes the new gathering in Brussels will save the euro "because we need and we have one currency everywhere in Europe – well, almost everywhere". He smiled at his British guest. "I understand there's problems about making a big, strong pact but it has to happen."

Joelle, a younger restaurant manager, is half-prepared to accept a return to the guilder, however.

At the Christmas market on the Vrijthof in central Maastricht, where Dutch, German and French shoppers mingle by stalls selling nougat and chocolate, Agnes, a pensioner from Breda, looks at the lunch list of 20 years ago and says: "They were real politicians in those days; they took real decisions, strong decisions."

Her husband, Gerard, strongly supports the euro but thinks Greece – "they're all corrupt there" – should leave for five, six or even 10 years. He says they should have time to recover, get their economy stable and then rejoin. "My own feeling is that Balkan countries, say, planning to join the EU should stay away from the euro until their economies are stable."

He looks at me intensely. "As long as you Brits are not part of the euro you should close your mouths. You should stop telling us what to do and come as soon as possible to the euro. Britain is a European country after all."

Max, a German student doing his masters in economics, is also keen for the Brits to join – eventually. But, equally, he's scathing about the role played by "Anglo-Saxon" banks in fomenting the original credit crisis.

Like many Germans, including Kohl, he is a fervent admirer of Churchill. "I was listening to his Zurich speech of 1946 recently and he called for a European Union that would be a United States of Europe and that's an idea, an ideal, worth saving, especially given our history of wars."

Like many young Germans, he's "not a big fan of Germany taking leadership or having it thrust upon this Merkel government" because "they don't behave very nicely to the others". But then he adds: "It may be unavoidable. France is struggling and England is not involved so who else is there to lead? I think what they'll do is get back to the core union."

Bart, a policy adviser to the Province of Limburg, works in the building where the Maastricht treaty was signed. He, too, favours the euro but admits to having second thoughts – along with, he suspects, 40% of the Dutch who might happily revert to their own currency.

"When I'm angry I think we should have a neuro in northern Europe and a seuro in the south," he says. "This meeting has got to be the last warning for those who don't keep within the rules. Sometimes, when I get mad, I think these Greeks and Italians don't have the basics or even the mentality for a strong economy. They simply don't work hard enough."

The Guardian

Stocks drop as ECB rules out eurozone support

The US Dow Jones index closed down 1.6% with the wider Standard and Poor's 500 down 2.1%. French and Italian shares ended down 2.5% and 4.3% respectively.

ECB President Mario Draghi unveiled new support measures for eurozone banks and cut rates to 1%.

It came as the European Banking Authority increased its estimate of the capital shortfall facing EU banks.

"People are very nervous that Europe will yet again fail to adequately address the sovereign debt crisis," said David Kelly, chief market strategist for JP Morgan Funds.

Other markets also fell. Germany's Dax finished 2% lower and the UK's FTSE ended down 1.14%.

There had been speculation that the ECB may be preparing to substantially increase its purchases of Italian sovereign debt if eurozone governments agree tough new limits on their borrowing and on economic reforms.

But Mr Draghi seemingly ruled this out: "We have a treaty that says no monetary financing to governments."

The euro, which had risen following the announcement of the interest rate cut, fell more than a cent against the dollar while Mr Draghi was speaking.

Propping up banks is also helping to prop up countries, because the ECB is directly or indirectly providing external liquidity to national financial institutions that the markets are no longer willing to provide”

The moves come ahead of a "do-or-die" Brussels summit of European Union heads to hammer out a deal on how to tackle the eurozone debt crisis, including a potential new treaty.

The two-day EU summit ending is expected to agree tough new rules and automatic fines to ensure that eurozone governments cut their borrowing to below 3% of their GDP.

This week, Standard and Poor's put almost all eurozone countries on "credit watch". It means that six countries with top AAA ratings - including Germany and France - have a 50% chance of seeing their credit ratings downgraded.

New bank aid

Mr Draghi called again for governments to cut their borrowing, and to boost growth by making their labour markets more flexible, and opening up product markets to more competition.

However, Mr Draghi dismissed the prospect of a eurozone break-up as "quite far-fetched at this stage".

He also praised the efforts of the new Italian government.

Mr Draghi also announced further measures to support the eurozone's banks, including:
three-year loans to be available from 21 December
more generous minimum standards for what the ECB will accept as collateral on the loans it makes
a cut in the reserve ratio - the percentage of a bank's assets that must be held in cash at the central bank - from 2% to 1%.

The ECB president explained the measures were intended to head off a credit crunch affecting companies and mortgage borrowers.

Some banks have increasingly been relying on existing emergency loans from the ECB, as they find it harder to borrow money from markets.

Last week, the ECB joined with the US Federal Reserve, the Bank of England and three other major central banks in announcing an agreement that would ensure that their banks had access to foreign currency emergency loans.

The surprise move sparked speculation that one or more major European banks could be on the point of collapse, because of their inability to borrow in US dollars.

Shortly after the ECB's announcement the European Banking Authority (EBA) said European banks need 114.7bn euros ($154bn, £96.25bn) to be sure of withstanding future financial shocks.

It means banks need to raise 8bn euros more than previously thought - with much of the increase falling on German lenders.

Rate cuts

The central bank again cut its forecast for economic growth in the eurozone next year, to a range of 1% growth to a 0.4% contraction - raising the prospect of a recession.

How is the European Central Bank helping the banks?

The lower forecast may herald further interest rate cuts.

It is the second such rate cut since Mr Draghi took over the ECB presidency last month.

The first rate cut, only days after he took over, reversed the central bank's policy direction. Under his predecessor, Jean-Claude Trichet, the ECB had begun raising rates over the summer to ward off higher inflation.

The second cut has returned rates to the record low 1% level that prevailed from the summer of 2009 to the end of 2010, in response to the global financial crisis and recession.

Mr Draghi confirmed that the decision was not made unanimously.

The ECB gas been providing some support to Italy and Spain, by buying up their debts in the financial markets to push down the cost of borrowing.

Italy's 10-year cost of borrowing had risen above the 7% level widely deemed to be unsustainably expensive, but fell back below 6% in recent days, in expectation of ECB aid.

Following Mr Draghi's press conference, it rose back above 6%.

BBC

'Chaos, collapse & catastrophe in EU next week'

It will 'take years' to resolve eurozone debt crisis: Merkel

BRUSSELS — "Never has Europe been in more danger," French President Nicolas Sarkozy warned shortly before he and other European Union leaders were to begin an emergency summit in the Belgian capital with a dinner Thursday evening, ahead of Friday's formal meeting to try to rescue the euro and save the continent from looming financial disaster.

Raising the political rhetoric to ever greater heights, Sarkozy hinted at the possible disintegration of the European Union unless a solution were found.

"Never has the risk of an explosion of Europe been so great," the French leader said in a speech in Marseille, France, to the European People's Party, which is made up of 74 European parties.

"The diagnosis is that the euro, which should inspire confidence, is not inspiring confidence. If we don't get an agreement on Friday, we won't get a second chance."

Still, the fault lines that could scupper a decisive last-minute deal on Europe's sovereign debt crisis were apparent in a speech given moments later by German Chancellor Angela Merkel, who sat next to Sarkozy at the meeting in Marseille.

"It will take years for us to get through this," the chancellor said, ignoring persistent demands from some EU leaders who have been clamouring for German help while resisting her demand that they surrender national sovereignty over the size of their budgets and other fiscal policies. "Nobody believes words any more because we have not always lived up to those words."

However, Merkel said Thursday that she remained confident that the EU would find a way to step back from what one German magazine has called "the abyss."

Germany's enormous economic clout has effectively given Merkel a veto over anything the EU might decide to do to shore up its common currency and calm the fears of investors and banks that have been starving the continent of fresh money.

Countries such as Spain, Portugal and Ireland are barely afloat financially. Almost every eurozone country is facing a drop in its credit rating as the contagion has spread from Greece to Italy. It is now haunting countries with much more responsible financial records, such as Finland, Austria and the Netherlands.

The continent's economic situation has been unravelling so quickly that the European Central Bank did not even wait for the summit in Brussels to begin before lowering its lending rate Thursday to one per cent from 1.25 per cent — to avert a recession and to try help the weaker eurozone economies find easier terms for credit. It has also relaxed some of the terms for credit by extending borrowing over several years and loosening the rules regarding collateral.

However, Mario Draghi, the central bank's new president, later said the bank could not directly help European governments because of its own rules and denied that the bank would be buying billions of dollars in European bonds that come due next year — a move akin to indirectly buying debt from EU countries. These are policies that Merkel strongly agrees with.

Merkel favours strict universal monetary policies across the eurozone and wants to make this binding by tearing up old treaties and replacing them with new ones that will severely limit any country's ability to control its own economic levers. Essentially, what the chancellor is after is a fiscal union with one set of rules for national budgets, rather than every country setting its own.

A six-page draft agreement handed to the 27 leaders as they began their two-day summit called for a new "fiscal compact," Reuters reported Thursday. It called for much tougher enforcement of budget rules in the eurozone and the establishment of a permanent rescue fund. But as soon as the draft text leaked, the news agency reported a senior German official rejected key measures including allowing the proposed rescue fund to act like a bank in order to access funds from the European Central Bank.

While European banks feasted on the new credit available to them Thursday, investors revealed their doubts about whether the ECB measures went far enough and continuing anxiety over whether the European Union leaders have the mettle to emphatically deal with the worsening situation. Those reservations driving international stock markets and the euro sharply lower ahead of the crisis summit.

European media have reported that those at the summit are vowing not to leave until a deal is reached, raising the possibility that their urgent discussions may continue through the weekend.

The last emergency summit 10 weeks ago failed to reach agreement on what to do.

Read more: http://www.canada.com/business/will+take+years+resolve+eurozone+debt+crisis+Merkel/5831422/story.html#ixzz1g2rHvMq9

Crisis: Who is Pulling the Strings? (Daniel Estulin, European Parliament, 01.DEC.2011)