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Italy downgrade adds to eurozone contagion fears

Standard and Poor’s drops credit rating to A from A+, blaming sluggish economy and ineffective government reforms Italy has had its sovereign credit rating cut by Standard and Poor’s , with the ratings agency keeping the country’s outlook on negative in a major surprise that adds to contagion fears in the debt-stressed eurozone. The agency cut Italy’s government debt rating to A from A+ and said Italy’s economic growth prospects were getting weaker, with planned reforms by the government not expected to help much. “We believe the reduced pace of Italy’s economic activity to date will make the government’s revised fiscal targets difficult to achieve,” S&P said in a statement. Italy follows eurozone partners Spain, Ireland, Greece, Portugal and Cyprus in having its credit rating downgraded this year. Kathy Lien, director of currency research at GFT, said the ratings downgrade would impact heavily on the eurozone. “This is definitely going to put a damper on any recovery in euro/dollar. Italy is a much bigger deal than Greece,” she said. “It’s a much bigger deal because a lot more countries are exposed to Italian debt than they are Greek debt. The greatest concern was never really about Greece but the contagion over to Italy and to Spain.” US stocks fell ahead of S&P’s announcement but staged a late comeback as fears of a near-term Greek debt default faded on news of a possible deal to advance new bailout funds to Athens. The Nikkei average is expected to slip on Tuesday, though it is likely to stick to a narrow range ahead of a US Federal Reserve meeting. “Japanese markets were closed on Monday for a national holiday, meaning investors here have to catch up to all of the developments overseas,” said Kenichi Hirano, operating officer at Tachibana Securities. “Worries about Europe remain but investors are unlikely to take aggressive new positions ahead of the Fed meeting, which will keep the Nikkei trading in a range.” European debt crisis Italy Euro European banks guardian.co.uk

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Iranian authorities have arrested six filmmakers on allegations that they work for the BBC Persian Service—which is a crime in Iran, as is working for any non-government television or radio station. “The members of this covert cell of BBC Farsi were paid tens of thousands of dollars for each…

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A volcanic eruption that kills 90,000 people and casts a shadow around the globe tends to leave an impression. That’s why hundreds of Indonesian farmers fled their villages this month when the legendary Mount Tambora began rumbling, the AP reports. Well-versed in stories of its 1815 eruption, which spewed…

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Fire service reorganisation was a £500m failure, say MPs

Report published by Commons committee warns getting the system working properly is likely to cost an additional £85m An attempted reorganisation of the fire service by the last government cost nearly £500m and was one of the worst cases of project failure MPs have ever seen, according to a highly critical report published on Tuesday by the all-party Commons public accounts committee (PAC). It warns that finally getting the system working properly is likely to cost an additional £85m. The damning report – published following an investigation and hearings by the committee this summer – says that the concept of abolishing 46 local fire and rescue control rooms and reorganising them into nine regional control centres was flawed from the start. The FiReControl project was launched too quickly with insufficient consultation, it is claimed. The committee also says a contract for designing, developing and installing an IT infrastructure was awarded three years late, to European Air and Defence Systems, now Cassidian, a company with no experience of dealing with emergency services. The project’s development was heavily reliant on advice from PA Consulting, whose services alone cost £42m. The scheme was terminated last December with no objectives achieved and at least £469m wasted, the MPs say. Margaret Hodge, the Labour chair of the PAC, said the scheme had been a complete failure. “The taxpayer has lost nearly half a billion pounds and eight of the completed regional control centres remain as empty and costly white elephants. “No one has been held to account for this project failure, one of the worst we have seen for many years, and the careers of most of the senior staff responsible have carried on as if nothing had gone wrong at all, and the consultants and contractor continue to work on many other government projects.” The project, launched in 2004, was intended to produce a more co-ordinated response to emergencies such as train crashes and terrorist attacks, but the intention of abolishing local control rooms and replacing them with regional centres was undermined from the start because the Department for Communities and Local Government lacked powers impose such a framework and failed to consult local fire services, despite the costs and potential liabilities they would face from reorganisation. The report says the department pushed ahead without undertaking basic project approval checks, taking decisions before testing the ideas for feasibility. It adds: “The result was hugely unrealistic forecast costs and savings, naive over-optimism on the deliverability of the IT solution and under-appreciation or mitigation of the risks. “The department demonstrated poor judgment in approving the project and failed to provide appropriate checks and challenge. “The new fire control centres were constructed and completed whilst there was considerable delay in even awarding the IT contract, let alone developing the essential IT infrastructure. Consultants made up over half the management team (costing £69m by 2010) but were not managed … The committee considers this an extraordinary failure of leadership. Yet no individuals have been held accountable for the failure and waste.” The MPs say the department now estimates it will cost a further £84.8m to put the project right and is inviting bids from fire and rescue services, but remains unable to say whether that will provide value for money, or provide a more efficient and co-ordinated service in the event of a major emergency. It says the eight empty regional control centres are costing the taxpayer £4m a month to maintain and it is likely that only five of them will ultimately be used. Firefighters Tax and spending House of Commons Stephen Bates guardian.co.uk

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At New York state homes for the mentally disabled, firings are rare—even when caregivers abuse or neglect patients, the Poughkeepsie Journal reports. Of the state’s 20 attempted firings across some dozen facilities since 2007, 18 were unsuccessful; only 2% of disciplinary cases at more than 100 facilities led to…

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Mariano Rivera set the major league record with his 602nd career save, pitching a perfect ninth inning today to preserve the New York Yankees’ 6-4 win over the Minnesota Twins. With fans standing and cheering from his first pitch to his last, Rivera retired Trevor Plouffe, Michael Cuddyer, and Chris…

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The Florida man who allegedly killed his wife and shot two pastors yesterday had been on probation for killing a previous wife, the AP reports. Jeremiah Fogle, 57, was sentenced to 10 years’ probation in 1987 for fatally shooting wife Diane Fogle at home with a rifle. Prosecutors at the…

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Bow Out Now, Obama

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“The vultures are starting to circle” a president who can’t solve the economy, can’t excite his base, and “can’t even sneak a cigarette,” Steve Chapman writes in the Chicago Tribune . “But there is good news” for President Obama, Chapman insists: “I checked the Constitution, and he is under no compulsion…

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“All hell has broken out” in Palestine’s bid for statehood recognition at the UN, says Palestinian President Mahmoud Abbas. The United States has threatened to veto it, Israel opposes it, and dozens of House Democrats have penned a letter saying the US “will reconsider its assistance program” if Palestine keeps…

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Two earthquakes rattled buildings and killed one person in a landslide in southern Guatemala today, the Buenos Aires Herald reports. An initial 4.8 quake struck the sugar cane-growing area near Santa Rosa, followed by a 5.8 temblor about a half-hour later. “There is one dead in Cuilapa, Santa…

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