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US debt crisis continues as turmoil infects Italy and Spain

Markets spooked as bond yields in both founder members of single currency hit monetary union records Financial markets in Europe and North America were gripped by a new sense of crisis as the turmoil caused by the narrowly averted US debt default moved back across the Atlantic and infected Italy and Spain – two key members of the eurozone. Bond yields in both the founder members of the single currency hit monetary union records, forcing Spain’s prime minister, José Luis Rodríguez Zapatero, to abandon his holiday plans. Italy responded to a fresh wave of losses in its banking sector by announcing a crisis meeting of economic policymakers. Interest rates on Spanish and Italian bonds rose to well above 6%, the level that signalled the beginning of the bailout process for Greece, Ireland and Portugal. Meanwhile, interest rates on assets seen as safer fell sharply, with the yield on UK 10-year gilts dropping to an all-time low of 2.77%. Gold rose to a new record level for a ninth day in a row on Tuesday. Wall Street’s Dow Jones index had lost 266 points by the close in New York – its eighth successive fall and longest losing streak since the global banking system was on the brink of collapse in October 2008. US shares have given up virtually all their 2011 gains, while stocks in Europe and Asia are already trading below the levels at which they ended 2010. “There is a growing sense of crisis enveloping markets in the northern hemisphere,” said Nick Parsons, the global head of strategy at National Australia Bank. Amid fears that Italy and Spain will require a financial bailout to bring down their borrowing costs, Bob Diamond, the chief executive of Barclays, said Europe’s sovereign debt crisis, and woes in the US, justified the UK’s new reputation as a “safe haven” amid the turmoil. Diamond warned that the single currency’s problems were not going to disappear – which he dubbed “chronic event risk”, and said it was important to support David Cameron and George Osborne’s efforts to put Britain’s public finances back on track. “If they don’t address public spending they put at risk the [UK's] triple A rating. If the US gets downgraded, it is an issue for the US but it is still a relatively minor market event. But if the UK gets downgraded, it would have bigger implications for the economy,” said Diamond. “I do support what the prime minister and the chancellor here are doing.” Diamond’s intervention came as the US Senate voted for the deficit reduction plan agreed by Democrats and Republicans in Washington and as Fitch, one of the world’s three big rating agencies, gave the US a breathing space by saying it would not immediately strip the world’s biggest economy of its prized top-notch credit ranking. Fitch stressed, however, that the respite could be shortlived. While pointing out that the risk of default was “extremely low”, the rating agency said that without significant changes in fiscal policy, the US debt to gross domestic product ratio “will reach 100% by the end of 2012, and will continue to rise over the medium term – a profile that is not consistent with the United States retaining its triple A sovereign rating”. BNP Paribas bank was on Tuesday forced to take a €534m hit against its exposure to Greek government debt. The bank insisted it would be a one-off occurrence despite a large exposure to Italy, in the latest sign that banks across Europe are beginning to take hits against the country. HSBC set aside £65m on Monday. Confirmation of the US debt deal prompted a fresh political row in the UK, with the government insisting the spending restraint agreed to by Barack Obama was tougher than that announced by George Osborne. Conservative MPs said the US deal vindicated the coalition’s approach and represented a setback to the shadow chancellor, Ed Balls, who has been urging the UK government to adopt the more cautious approach to deficit reduction hitherto favoured by the US. Labour sources disputed that America’s programme of cuts was now more draconian than Britain’s and said the Republicans appeared to have forced Obama into “a plan that some believe risks going faster than is economically wise, just at the time when worries are growing about the fragility of the US recovery”. Market turmoil Economics Spain Italy United States Global economy Stock markets Euro Currencies Euro European Union Europe Economic policy Larry Elliott Jill Treanor guardian.co.uk

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Barack Obama hints at tax rises after US debt bill goes through Senate

US president refuses to rule out tax rises for wealthiest Americans as he prepares to sign debt limit bill into law Barack Obama came out fighting in an attempt to undo the damage to his reputation caused by the long-running debt stand-off, and pacify Democrats who feel betrayed by the deal that will result in spending cuts totalling trillions of dollars. The president, who turns 50 tomorrow, faces a tough re-election fight next year. He needs not only to win back such disaffected Democrats, but also to get them out to campaign for him and vote in their droves, as they did in 2008. Speaking minutes after the Senate joined the House in approving the deal to prevent the US going into default, Obama offered an olive branch by putting tax rises back on the table. Republicans have insisted repeatedly over the last few days that the deal does not include tax rises. But Obama, in a short statement in the Rose Garden, said the country’s huge national debt could only be reduced through a combination of spending cuts and tax rises, particularly for the wealthy and big corporations such as those in the oil industry. “Everyone is going to have to chip in,” he said. “That is only fair. That’s the principle I’ll be fighting for during the next phase of this process.” He then attempted to turn the debate away from the debt ceiling towards jobs and pay, the issues that Democrats regard as the key to the 2012 election. But despite hints at ending tax breaks introduced by George W Bush, Obama may decide such a strategy would be too risky so close to a presidential election. He signed the debt bill late on Tuesday, just hours before the midnight Treasury deadline that could have seen the US default on its debts, a national humiliation likely to have had a huge impact on markets and the global economy. Democrats, from members of Congress to grassroots members, lined up to criticise the president for giving in to what they view as extortion tactics by Republicans aligned to the Tea Party movement. The Republican leader in the Senate, Mitch McConnell, added to the view that this was a Republican victory. Speaking minutes before the vote, McConnell told Republicans who had wanted even deeper spending cuts: “Although you may not see it this way, you’ve actually won this debate.” The ebullient mood among Republicans was reflected in an article yesterday in the New York Post by the conservative John Podhoretz , speechwriter to two Republican presidents: “If Barack Obama loses next November, we’ll look back on Sunday – July 31, 2011 – as the day he became a one-termer. He demonstrated the one key quality common to all unsuccessful leaders: haplessness.” He described Obama as looking powerless and compared Obama’s negotiating strategy to “Daffy Duck, who once ended a rapid-fire exchange at gunpoint with Bugs Bunny by turning the rifle on himself and pulling the trigger”. The Senate, following the House vote, yesterday passed the deal to raise the $14.3 trillion debt ceiling. It was passed by 74 votes to 26. Gabrielle Giffords, pictured above, the Arizona politician who was shot in the head in January, returned to Congress to participate in the vote. She said she had been “deeply disappointed” by the political wrangling that had taken the US to the brink. At the end of a period in which the debt row left Washington all but paralysed, Congress broke up for the summer and Obama will return to the campaign trail . The row forced him to cancel several fundraising opportunities, but he is scheduled to travel to his hometown of Chicago, where he celebrated on election night 2008, for a number of events. The Obama-led events are reported by the Chicago Sun-Times to cost those wishing to attend almost $40,000 a head. But his support for tax rises will resurrect the ideological battle when Congress returns next month. As part of the deal, a bipartisan committee has been set up to look in detail at where the cuts are to be made, reporting at the end of November. The committee will be the focal point as the battle between spending cuts and tax rises is resumed. Polls show voters increasingly frustrated and dismayed, not only with Obama’s performance over the crisis but also with members of Congress from both sides. A CNN/Orc poll found only 17% said politicians in Washington had behaved as responsible adults, while 77% believed they had behaved like spoiled children. Obama’s popularity dropped 5% in the polls over the last week, with most putting him around 45%, but a Gallup poll at the end of last week had support for him at just 40%. Michael McDonald, a specialist in polling and politics at George Mason University, said: “Everyone took a hit in the polls on this one. No one came out smelling of roses after this debacle. All took a short-term hit.” But he added that Obama’s approval ratings of 40% were problematic going into an election year. “That is dangerous territory,” he added. “I would not want to be down to 40%. We have to see whether it is short-term or long-term. I would say it is likely to be long-term because of the state of the economy, and if people are crystalising their opinions of Obama’s handling of the economy, he is in danger.” Obama received a boost in the polls in May when Osama bin Laden was killed but this quickly faded. One positive he may take from the debt row is that it offers a campaign strategy for next year, portraying the Republicans as extremists at the mercy of the Tea Party movement. Barack Obama US Congress United States US politics US economy US economic growth and recession Economics Ewen MacAskill guardian.co.uk

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Voter Suppression in Wisconsin — Again

enlarge In Koch-ville, USA, voters are scary. At least, Democratic voters are. Americans for Prosperity helpfully sent out reminders to voters to mail in their absentee ballots. Wasn’t that nice of them? Only, the deadline on their helpful litte brochure for returning absentee ballots is August 11, two days after the recall election. This isn’t the first time they’ve done this. In September of last year they plotted many schemes to suppress the vote ( audio here ). What boggles my mind is that they get away with it over and over again. This time maybe they won’t. They are being sued by voters . In one complaint (PDF) , the voter was pretty clear about why he was filing: I received an absentee ballot request form from Americans for Prosperity. It intentionally listed to return up to Aug 11. The date of the election is Aug 9. If I followed their instructions my ballot would not be legal. I think they purposely intend to discount my vote. I understand such activity to be against the law. I believe I was targeted by the Republican group because I am a Democrat and a senior citizen. AFP, of course, plays the innocent error-maker. JSOnline : Matt Seaholm, state director of AFP, blamed the mistake on a typo, saying his group was not trying to mislead anyone. “This just went out to our members,” Seaholm said. “I’m sure the liberals will try to make a mountain out of a molehill in an attempt to distract voters’ attention from the issues.” But other sources say the fliers were received by “card-carrying Democrats active in the recalls” of state Sens. Sheila Harsdorf (R-River Falls) and Rob Cowles (R-Allouez). Harsdorf is running against teacher Shelly Moore, and Cowles is being challenged by former Brown County Executive Nancy Nusbaum. Just went out to their members who also happen to be Democrats? Yeah, I don’t think so. No self-respecting Democrat would be a member of Americans for Prosperity. Meanwhile AFP is busily dropping $500,000 in ad buys against Democrats running in the recalls. Politics, Koch style. Update: Jesse Russell reports that the return address on the envelope is one for Wisconsin Family Action , the activist arm of Wisconsin Family Council (990) , which appears to be an offshoot of the Family Research Council. Looks like the Republican hate machine is in full force.

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Pathologist Freddy Patel’s suspension extended by GMC

General Medical Council launches new disciplinary inquiry into Freddy Patel and extends ban to 31 December Pathologist Dr Freddy Patel’s suspension from the UK medical register, in part for a botched postmortem that delayed a 2002 murder investigation , has been extended pending a new disciplinary inquiry. Patel was the pathologist who conducted the initial postmortem on newspaper seller Ian Tomlinson, who died during the G20 protests in London in April 2009. The profession’s regulatory body, the General Medical Council (GMC), was not able to confirm whether this was the subject of an allegation that might lead to Patel’s latest appearance before a fitness-to-practise panel. Patel was suspended in March this year for at least four months for “irresponsible” reports on a postmortem in 2002, which delayed a murder investigation, as well as dishonesty and failing to redress previous shortcomings. James Meikle guardian.co.uk

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Hosni Mubarak due in dock but Egypt uncertain whether trial will proceed

The 83-year-old ousted president faces charges of corruption and unlawful killing which could carry the death penalty Egypt’s faltering revolution will reach a defining moment on Wednesday morning when toppled president Hosni Mubarak goes on trial to face charges of corruption and unlawful killing. Just over six months after the start of an uprising that would eventually overthrow his regime, ending 30 years of autocratic rule and sending shockwaves across the region, the 83-year-old is scheduled to appear in the dock in white prison overalls and will stand behind the bars of a specially constructed metal cage – although there are some doubts whether he will actually appear. His much-anticipated downfall is to be screened live on Egyptian state television, attracting tens of millions of viewers. For most, it will be a scene that only last year seemed utterly unimaginable. “Egypt’s many problems cannot be solved by one appearance of Mubarak in a courtroom,” said Soheir Basma, a middle-aged Cairo woman who will be tuning in for the trial. “But people must see justice being done, and maybe the sight of that happening to Mubarak will inspire us to carry on fighting for our own rights, the rights he denied us for so long.” Yet as the final preparations are made to ferry the ailing former leader from his hospital bed in the Red Sea resort of Sharm el-Sheikh to the temporary courthouse – a police academy that once bore his name, in the sandy outskirts of the capital – few Egyptians are under the illusion that this trial will be a panacea for the multiple problems their country is facing. Earlier this week military forces stormed Tahrir Square, where a protest against army generals – the country’s de facto rulers since Mubarak was ousted in February – had been under way since early last month. Using tactics reminiscent of Mubarak’s security services, soldiers and riot police beat demonstrators and dragged several off into military detention. Revolutionary youth groups have called for daily marches to condemn the violence. As Egypt lurches towards parliamentary elections in November, when the armed forces have promised to return to their barracks, many are sceptical that the military top brass will succeed in holding Mubarak to account. “It’s crucially important that Mubarak gets a fair hearing, because this needs to be the trial that breaks the cycle of impunity which characterised his 30 years in power,” said Heba Morayef, of Human Rights Watch. “Mubarak’s Egypt was all about police being above the law, so if this trial proceeds in accordance with due process, then it’s not only very politically significant but it also sets a precedent regarding accountability in this country, and changes the balance of power between government security services and the rule of law.” However, there is uncertainty over whether Mubarak will appear or not, with some reports suggesting that even if he does enter the dock, the trial will be swiftly adjourned – a potentially welcome compromise for the ruling generals, who are facing intense public pressure to see the prosecution through but fear that politically explosive revelations may leak out when Mubarak takes the stand, implicating the army top brass. Mubarak is to be flown by military helicopter to an airstrip close to the police academy, before being driven the final 500 metres by ambulance. His co-defendants – his sons Alaa and Gamal, former interior minister Habib El-Adly, and six other senior regime officials – will be transported from Tora prison by armoured vehicles. Up to 8,000 soldiers and police officers are being deployed to secure the trial. In the streets of Cairo on Tuesday, conversations were full of the impending legal drama. “He’s definitely guilty, and a quick verdict would be really good for the country as it would bring all the protests to an end and get things moving again,” said Ahmed Yusuf, a 26-year-old student of commerce at Ain Shams university. “Mubarak didn’t care about us. He took no interest in his people – and that’s why he never noticed that we were rising up to defeat him. I’m going to be very happy tomorrow.” Others sounded a different tone. “To be honest, I was detached from the regime – I never received anything good from it, and I never felt particularly oppressed by it,” said Karim Hadi, a garage worker who has a college degree in factory management but has been unable to find a job in his chosen field. “I see Mubarak like any other traitor or common criminal, and I hope he gets what he deserves.” Mubarak could face the death penalty if convicted. But even a guilty verdict may not be enough to quell much of the popular anger stemming from his reign, particularly as the “unlawful killing” charges refer only to the 18-day uprising this year – and to none of the alleged brutality that proceeded it. “My biggest regret is that Mubarak will never face trial for the 30 years of police brutality, systematic torture and forced disappearances carried out under his rule,” said Morayef. “His legacy is such a destructive one because he institutionalised abuse, and it will take us generations to overcome that.” Hosni Mubarak Egypt Arab and Middle East unrest Middle East Africa Jack Shenker guardian.co.uk

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Twitter valued at $8bn after large investment

Social media site boosted by DST Global’s $400m, as value doubles since December and daily traffic triples in a year Twitter, the microblogging website that lets users tweet messages of 140 characters or less, is now worth $8bn (£4.9bn). The firm’s new price tag comes after a $400m investment in the loss-making venture from serial social media investor DST Global. Twitter is now nominally worth about the same as rating agency Moody’s, which had revenues of $1.2bn in the first six months of 2011 and is nearly as valuable as Marks & Spencer. The huge valuation reflects high expectations for the company. Confirming the investment, Twitter also announced that its users now send 200m tweets a day, up from 65m a year ago. “One year ago, there were approximately 150,000 registered Twitter apps. Now, there are more than one million that connect to Twitter. And our team has grown from 250 people to more than 600 in the past 12 months,” said the firm in a blog post. “We have the opportunity to expand Twitter’s reach with a significant round of funding led by the venture firm DST Global, with the participation of several of our existing investors,” Twitter said. “We will use these resources to aggressively innovate, hire more great people and invest in international expansion.” The new funds are part of $800m Twitter wants to raise as it grooms its business for a potential initial public offering. DST Global, the investment fund led by Russian billionaire Yuri Milner, also owns stakes in Facebook, online gaming firm Zynga and discount firm Groupon, all of which have plans to go public. Twitter is believed to be using half the money to buy back shares from employees and backers. The rest of the money will be used to help the San Francisco-based company develop its service as it competes for advertising dollars with larger rivals such as Facebook. Twitter may bring in $150m in advertising this year, according to research firm eMarketer, three times what it made last year. The analyst estimates that Facebook brought in ad revenue of $1.86bn last year. Twitter’s valuation has soared along with its peers as investors chase after the world’s top social media companies. At $8bn Twitter’s valuation is more than double the valuation it received last December when Silicon Valley investor Kleiner Perkins Caufield & Byers made a $200m investment in the firm. The new money brings Twitter’s total investment to just over $1.16bn in four years. The company also needs cash to build its international business. Twitter has targeted London as its first major office outside the US and has appointed a UK head, Tony Wang, and a UK-based communications staff. Twitter’s new valuation comes as shares in social media companies now going public are attracting frenzied buying. Shares in LinkedIn, the business-based social media firm, skyrocketed more than 80% in their first day of trading. They are trading at more than double their $45 opening price and the firm is valued at $9.5bn. But not all the new generation of social media firms have fared so well. Pandora, an online music company, priced its shares at $16 apiece and experienced a big bounce up on its first day but is now trading at around $13. Renren, often called China’s Facebook, soared 28.6% on its first day of trading in May, closing at $18 a share, well above its $14 opening price and raising $740m. The shares have subsequently slumped to about $10 as investors worry about lack of profits and the Chinese market. Twitter Social networking Investing Dominic Rushe guardian.co.uk

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This caught my eye because it’s really quite crazy . Last year, the International Monetary Fund pushed the UK quite aggressively for an austerity budget — and now they’re warning that the UK austerity budget has resulted in just 0.2 per cent growth in the second quarter of the year, following two quarters of poor growth . Gee, you don’t suppose unemployment, wage cuts and the additional costs incurred by public program cuts resulted in people having less money to spend, causing a demand problem? So what strategy do they recommend if growth doesn’t improve? Come on, you already know: tax cuts and more quantitative easing. You know, the same things that didn’t work here! It’s not really science with these people; it’s fundamentalist religious dogma, like the conviction that Adam and Eve co-existed with dinosaurs — that, and disaster capitalism: In a comprehensive analysis of the state of the British economy, the economic watchdog said that, between them, families would have £35 billion less disposable income due to the Government’s attempts to tackle the deficit. In addition, a fall in the value of houses would wipe off more than a tenth of their “tangible” wealth in real terms by 2016, the IMF said in its report. The forecast for household finances came amid a growing political row about recent slow growth. George Osborne has come under pressure from David Cameron to come up with new ways to stimulate the economy. The IMF reiterated its support for the Government’s programme of cuts, which it said had “significantly reduced the risk” of a sovereign debt crisis. However, it warned that tax reductions might be necessary if the rate of economic growth did not improve. And although it said the Government had made the right decisions to tackle the deficit, the impact on households would be significant. As total disposable income last year was £974 billion, the IMF estimated that the cost would be roughly £35 billion annually – shared between Britain’s 26 million households. Alongside the squeeze on savings, it said near-static house prices until 2016 would knock 12 per cent off families’ “tangible” wealth in real terms as the value of property fell in comparison to home owners’ income. The damage to household finances would weigh on the recovery for years, it warned, as consumers had less money to spend on the high street. Due largely to the weakness of consumer spending, the IMF is predicting growth this year of 1.5 per cent — against official forecasts of 1.7 per cent. Despite its concerns, the IMF again threw its weight behind the Government’s austerity measures. “The weakness in growth and rise in inflation raises the question whether it is time to adjust macroeconomic policies. The answer is no,” it said. “Recovery from the financial crisis is under way, but is bumpy and incomplete … Fiscal headwinds will continue.” Vicky Redwood, senior UK economist at Capital Economics, the research consultants, said the analysis demonstrated that “households are in for a tough five years if not more”. “It’s payback time for the high spending of the past decade,” she said. “It’s going to be a prolonged period of nastiness for households.” You could spread that irony with a knife. Is it time to “adjust macroeconomic policies?” Let’s ask Paul Krugman, the man who quite literally wrote the book on macroeconomics – and also wrote about the planned austerity cuts for the UK back in October 2010 : The Nobel prizewinning American economist Paul Krugman launched a scathing attack today on chancellor George Osborne’s spending cuts, just as a prominent member of the Bank of England’s rate setting committee argued that the cuts paved the way for strong growth . Krugman believes the government is using the financial crisis of 2008 as a cover for advancing an ideological programme to downsize the welfare state, saying the plan “boldly goes in exactly the wrong direction” and has been sold to the public with an unprecedented and unwarranted degree of fear-mongering. The British plan, he wrote, appears to come straight from the desk of Andrew Mellon, the US treasury secretary who told President Herbert Hoover to fight the Great Depression by liquidating the farmers, liquidating the workers, and driving down wages. “Or if you prefer more British precedents, it echoes the Snowden budget of 1931, which tried to restore confidence but ended up deepening the economic crisis”. As a result, the British government seems “determined to ignore the lessons of history”. But economist Andrew Sentance, who has gained notoriety as a member of the monetary policy committee for consistently voting for an interest-rate rise, said in the Sun: “Overall, I do not think the review will endanger our recovery. “In some areas, such as the health service and schools, spending will rise. To make room for this, spending is being cut back more heavily elsewhere. Taking public spending as a whole, it will still rise in cash terms over the next few years but slightly below inflation.”

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Greeks fall back on family ties amid debt crisis

Greece has a strong tradition of family responsibility, but the Greek family is now coming under unbearable strain Themis Protopsaltou shifted packing boxes across the front room of his parents’ flat in Veria, an agricultural town in northern Greece. Aged 31, and married with a two-year-old son, he was reluctantly having to go the way of many crisis-hit Greeks: move back in with mum and dad. “I’ve got no choice,” he shrugged. “I’m young, I’ve taken every kind of labour possible since losing my job. But I can’t support a family on the occasional pay-cheque of €30 a day. I’m not ashamed. It’s not ordinary workers like me who have caused this crisis.” Protopsaltou, who trained in mechanical engineering, once did skilled work in construction, including building work for Lidl supermarkets. Now he sits by the phone waiting for random shift work sorting peaches for a local farm co-operative for €29.45 a day. His wife, who trained in chemical engineering, was so desperate she took a job gutting fish in a market from 6am until 11pm. But even that dried up. Their rent of €250 a month for a cramped apartment had become too much, and they couldn’t afford their own place. So Themis’s parents – who are in their 60s – agreed to move into a tiny abandoned shop adjoining their flat – after all, empty shops are now two-a-penny in Greece – while Themis renovated their flat for himself, his wife and son. This way, at least there is semblance of privacy. Other families were faced with moving back in with pensioner parents and great-grandparents living in tiny spaces, sometimes a family of five squeezed into one room. “In Greece the family is everything, thank God, because right now it’s all there is,” said Themis’s wife Maria, lighting a cigarette that she said she could hardly afford but helped her deal with the stress. “The family is the only thing that gives us faith. The government knows families will help each other: in a sense politicians are leaving it up to ageing parents to rescue the younger generations.” Even before the crisis, Greece’s social safety net was weak to non-existent and the strong ties of the traditional family filled the gap. For decades successive governments have neglected social structures knowing “mama and papa” would pick up the pieces. Unemployment benefits are small and don’t last long, while creche provisions, elderly care and state support are limited. Greece has one of the strongest traditions of family responsibility in Europe. In rural areas at least, grandparents often look after pre-school children while mothers work, families care for their elderly or disabled at home, parents help around the house and feed the younger generation, sometimes even into middle age. For Greeks, the most popular means to cope with the stress and anxiety of the financial crisis is to spend time with family and friends – more than in any other EU country, according to a recent report by the Boston Consulting Group. But the Greek family is now coming under unbearable strain and cracks are beginning to show in society. With pensions slashed, older parents often feel powerless to help their destitute offspring. One person losing a job can have a disastrous knock-on effect on a dependent extended family. Homelessness is rising, food banks in Athens are struggling to meet demand, and suicide rates have risen sharply along with requests for psychiatric counselling. Young couples can’t afford weddings and Greece, already struggling with its lowest birth-rate in decades, now has a generation of 30-somethings postponing having children because they can’t afford to feed them. Perks for couples having a third child have been slashed, leaving families worried about making ends meet or paying for the private tuition that increasingly supplements a lacklustre state education system. Veria, a historic town of around 50,000 people, sits in the centre of northern Greece’s rich and fertile fruit-farming region, surrounded by orchards of peach trees. On the shopping street the only premises doing much business is the “everything for one euro” shop. Elsewhere, a broker’s sign reads: “We buy gold teeth.” The Protopsaltous consider themselves to be Joe Average. “In fact, we’re the lucky ones,” Themis said. “I’ve still got some kind of work.” Since construction work dried up last year, Themis has accepted anything from travelling a 140-mile round-trip daily to work on road building, which has now stopped, to carrying carcasses in a meat market. Veria is the heart of Europe’s canned peach industry. Until recently, farm labour had mostly been confined to migrant workers. “Now there are 5,000 Greeks applying for 500 jobs for two to three months of seasonal work,” he said. The problem is the last-minute calls for random shifts, never knowing when there will be work or people laid off. He feels increasingly anxious. “I can’t sleep at night, worrying whether what little I do have in the bank is still safe or whether the banks will collapse.” Eight out of nine of the couples they are closest to are in the same situation. But at least the Protopsaltous resisted the steady flow of credit-card offers that landed on their doormat a couple of years ago. Their best friends, a tile-fitter and his wife who doesn’t work, borrowed €150,000 to build an apartment. With children of four, six and nine, they are now destitute and can’t pay it back. Faced with going to their parents’ flat and living five to one room, they have instead taken refuge in a storage space. “It’s 50m square and open-plan. The mother and father sleep on a pullout bed, they’ve tried to build plaster-board partitions but you can hear everything,” Maria said. For a Greek pater familias, this is emotionally hard. “Even for us, there’s a loss of all hope, a sense that you’re a failure. People feel embarrassed to go back to their parents and admit they haven’t succeeded.” Maria has long given up looking for a job that suits her qualifications. She has sold bathtubs and worked in a flower nursery. But the spectre hanging over all short-term, quick-fix jobs is that you’ll be paid under the counter with no national insurance contributions. “It’s a very stressful way of life.” “We’re so happy to be able to help Themis by giving him our flat,” said his mother Panagiota, 64, sitting in her new living room in the disused shop. “My generation has seen real poverty. But we still worry about how our children will get through this crisis.” Greek personal spending has been transformed. A recent survey found 73% of people had cut non-essential items. Maria hasn’t bought new shoes for years. The couple once ran two cars, but now rarely use one. They used to eat at a taverna once or twice a month, now it’s once a year. Supermarket trips happen perhaps once a month, and only to discount stores. Pre-prepared food is out, no more takeaway pizzas while watching the football. They make cheap stews that last two to three days. They used to go for coffee three times a week, but at €3 for an iced coffee they now make it at home. They have stopped their occasional weekend breaks to local hot springs. Greek domestic flights have dropped sharply as people cut travel. In one local village, even the periptero – one of the kiosks that are a key fixture of Greek life, selling cigarettes, drinks and snacks – was closing down. Cash-strapped locals were cutting down on cigarettes, no one was spending on chocolate, and definitely not bottled water, with families now refilling from the tap. Like most families in this northern region, the Protopsaltous depend on food donations from small family farms. Themis’s father, a pensioner farmer, brings them fruit, vegetables and eggs. “If not, we couldn’t afford eggs for €3 a box,” Maria said. The financial crisis has seen a boom in “back to the soil” movements in Greece, with people growing their own produce. “But if I worry about survival up here, imagine how people must be suffering in Athens with no family close by and no farms,” Maria said. “In Greece, we don’t have a social security network, we have friends and family,” said Tom Tziros, 47, an unemployed IT project manager in the northern city of Thessaloniki. His German wife worked in a local bookshop but with few able to spend cash on novels, her salary has been cut. The couple was forced to negotiate a cut in their €500 rent. Tziros’s father delivers him vegetables from his farm in the region. But his father’s pension has been cut and, with new charges for doctors’ visits, he can barely afford crucial health checks. Many of his friends in their 30s live with their parents. “We’d love to have children but how could we feed them? Maybe if we move to Germany we could have kids,” Tziros said. “Jobs are being cut, no one is buying anything. “Money just isn’t circulating in this country. The government doesn’t care about Greece. If they did, they would have found a proper solution. It’s not just about imposing taxes – you have to protect work if you want to tax it.” Europe Greece European debt crisis Angelique Chrisafis guardian.co.uk

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Syrian death toll rises in crackdown

Syrian forces continue to attack civilian protesters in Hama and Damascus while UN struggles to agree to condemn violence Syrian security forces continued to attack civilian protesters in the central city of Hama and in Damascus as the EU imposed sanctions on key regime figures and the UN struggled to agree to condemn the violence unleashed by President Bashar al-Assad. Activists said 21 people had been killed across the country on Monday and seven more on Tuesday, bringing to at least 140 the number of fatalities since Sunday, when the government launched an offensive in Hama on the eve of the Ramadan fast. Italy announced that it was recalling its ambassador from the Syrian capital for consultations, but this was not part of a move co-ordinated across the EU. The Foreign Office said Britain’s envoy would stay in Damascus to monitor the situation and expose Syrian deception. The US embassy said several of its diplomats were also leaving the country. In Damascus gunfire was heard as 20,000 people attended a funeral in the Arbeen area. Film from Hama , where holding public funerals is dangerous, showed freshly-dug graves in a public park opposite the Sirjawi mosque. New sanctions agreed by the EU targeted Syria’s defence minster, Ali Habib Mahmoud, and three top security officials linked directly to the repression. Mohammed Makhklouf, Assad’s uncle, was also subject to a travel ban and assets freeze already imposed on 30 regime figures. Diplomats described a “positive atmosphere” during Monday’s consultations by the UN security council in New York, with “more room to manoeuvre” because of a softening of Russia’s position. Russia and China have previously refused to condemn Syria, partly because of anger over the way the UN action on Libya paved the way for Nato intervention and a policy of regime change. But officials said it was unclear whether this would produce a formal statement or a fully-fledged UN resolution that could be vetoed by any one of the five permanent members of the council. Russia said it was not against a resolution but would oppose the imposition of sanctions or other “pressures” on Syria, a long-standing ally. The bloody events in Hama have a special and deeply sinister resonance in Syria because many thousands died there when Assad’s father Hafez sent in tanks to crush an Islamist uprisng in 1982. In Washington, meanwhile, three senators said they would introduce legislation to ramp up pressure on the Assad regime by penalising foreign companies that do business in Syria’s energy sector. Foreign journalists and independent human rights groups are largely banned from Syria but information about the unrest continues to flow freely. Film clips posted on YouTube showed a funeral procession for a man killed in the northern town of Idlib. Footage from Hama showed the corpse of a man whose head had reportedly been blown off by a tank shell. Another clip showed bodies in the city’s Asi river, apparently with their throats cut. None of these could be independently authenticated. Navi Pillay, the UN high commissioner for human rights, called on Syria to stop the bloodshed immediately: “The government has been trying to keep the world blind about the alarming situation in the country. But they are not succeeding. The world is watching and the international community is gravely concerned.” Assad was shown in the official media visiting wounded members of the security forces in hospital on Monday, praising them for devotion to their duty. On Tuesday the president met a delegation of Syrians living in Italy. Police attacked the central prison in Homs after a reported hunger strike by inmates — a tactic likely to bring up more bad memories. In 1980 security forces attacked Tadmor prison in retaliation for an attempt on the life of Hafez al-Assad, killing hundreds. Also in Homs, mourners gathered for the funerals of at least two people shot dead after prayers on Monday. A relative of Adnan Abduldayem, 25, said he was shot in the head, through his right eye. “He had work in Saudi Arabia waiting for him and his family told him to go, but he refused to leave, saying he wanted to stay and protest against the regime.” Local co-ordination committees reported that government forces, including militiamen, had moved in on Zabadani, close to the Lebanese border. Reinforcements were sent to the eastern oil hub of Deir Ezzor, where at least 25 people died over the weekend. Nour Ali is a pseudonym for a journalist based in Damascus Syria Arab and Middle East unrest Middle East Nour Ali Ian Black guardian.co.uk

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TV series about Amazonian tribe accused of faking scenes

Mark & Olly: Living with the Machigenga was aired on BBC Knowledge and the Travel Channel A series about an Amazonian tribe that aired on the BBC has been accused of “faking” scenes and mistranslating interviews to negatively portray the tribe as “sex-obsessed, mean savages”, according to accusations made by two eminent experts. The show, called Mark & Olly: Living with the Machigenga, was shown on BBC Knowledge in South Africa in June and July last year and by the Travel Channel, owned by broadcasting giant Discovery, in the US in 2009, and made by Paddington-based Cicada Productions. The six-part series followed travellers Mark Anstice and Olly Steeds journeying to live in the remote Matisgenka Indian village in the Amazon rainforest over a period of several months. However, the show has been called “staged, false, fabricated and distorted” by Dr Glenn Shepard, an anthropologist who has worked with the tribe for 25 years and speaks their language fluently, and Ron Snell, who grew up with the tribe as the son of US missionaries and also speaks their language. Dr Shepard has written an article in the latest issue of Anthropology News outlining the alleged misrepresentations and in a longer piece on his blog he argues that the show is an example of “reality TV reach[ing] new depths of irresponsibility”. Shepard accuses the show of “fabricating” many of the translations in order to present a “false and insulting” portrayal of the tribe. Examples include inaccurate references to the sex life of the tribe as well as their supposed hostile attitude to outsiders. Other accusations include “staging” events, such as a pig dance which Snell says on his own blog he has never heard of in 35 years of living in the tribe’s villages, and scenes such as initiation trials, being forced to sleep outside and taking a psychoactive drink before going on a “phony” pilgrimage. “I am shocked by Mark & Olly’s narcissistic antics, their gross misrepresentations of Matsigenka culture, and their disregard for consequences inflicted on native communities,” said Shepard. “I wonder what Living with the Machigenga was modelled on. Borat comes to mind.” BBC Worldwide said it had acquired the show from Fremantle Media and that there were no plans to air it again. “BBC Worldwide is committed to the highest editorial standards and will examine the claims made,” said a spokesman. “We have only just been made aware of these concerns and we are in discussion with Fremantle to establish the full facts.” FremantleMedia Enterprises, which distributes the show, said the series was made by Cicada Productions. “FME did not make this programme. However, we are investigating the claims made earlier today,” said a spokeswoman for FME. A spokesman for Cicada Productions said that the company was not aware of the issue and did not have a statement at this time. Survival International , the human rights organisation which has released the information about the discrepancies in the making of the show, said it was a “depressing example” of the way tribal people are routinely portrayed on TV. “One stereotype followed another, with the [tribe] variously portrayed as callous, perverted, cruel, and savage,” said Stephen Corry, director of Survival International. “TV is now getting away with portrayals which wouldn’t be out of place in the Victorian era.” The same series also courted controversy in 2008 when a scouting expedition among the Matsigenka tribe prior to filming was said to have provoked a flu epidemic killing four . Cicada Films denied the accusations, claiming at the time that when they arrived in the area local people were already ill. •

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