Pull out the water cannons; it’s time to get serious in England’s “fight back” operation against rioters and looters, declared Prime Minister David Cameron yesterday. He said “every action” would be taken to restore order in towns hit by violence, including the use of water cannons to quell marauding gangs….
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PM says cuts programme will free up frontline police officers as he unveils post-riot security measures in emergency sitting David Cameron has dismissed Labour calls for a rethink on government plans to impose cuts of 20% on the police as he addressed an emergency sitting of the House of Commons after the riots across England. A bipartisan atmosphere in the Commons was briefly broken when the prime minister said that the cuts were “totally achievable” without reducing the number of frontline officers. Cameron’s remarks, which followed unease about the planned police cuts among ministers, came as he announced a series of measures in response to the “most appalling scenes” in English cities. The prime minister said: • Theresa May, the home secretary, would work with Iain Duncan Smith, the work and pensions secretary, to produce a cross-government action programme on gangs. This would be a “national priority”. May would report to parliament in October amid evidence that gangs co-ordinated some of the attacks on the police and some of the looting. • The treasury would be freeing up £10m from its reserve. • The army could be used for guarding duties if there were a repeat of such widespread riots in order to free up police to deal with violence. • Police would be given discretion to remove face masks from people on the street “under any circumstances where there is reasonable suspicion that they are related to criminal activity”. • Any homeowner or business person whose property was damaged would be able to seek compensation under the Riot Damages Act even if they were uninsured. The government would provide police with funds to ensure they could meet “legitimate claims”. • No “phoney human rights concerns” about publishing CCTV images of suspects involved in rioting would be allowed to “get in the way of bringing these criminals to justice”. • Ministers would work with the police and MI5 to assess whether it would be right to stop people communicating via social network sites “when we know they are plotting violence, disorder and criminality”. Cameron said he had asked the police if they needed new powers in this area. Cameron praised the bravery of the police but said: “What became increasingly clear earlier this week was that there were simply far too few police deployed on to the streets. And the tactics they were using weren’t working. “Police chiefs have been frank with me about why this happened. Initially the police treated the situation too much as a public order issue – rather than essentially one of crime.” The mostly quiet and sombre atmosphere in the house changed briefly when the prime minister dismissed a call from Ed Miliband to rethink 20% cuts on policing. The Labour leader’s remarks came amid fears among ministers that the cuts could leave an “exposed flank”. But the prime minister dismissed these concerns as he mounted a robust defence of his plans. “What we are saying: over the next four years we are looking for cash reductions in policing budgets. Once you take into account the fact there is a precept, that helps fund the police, [the actual cash reduction of 6% over the next four years] is totally achievable without any reductions in visible policing. A growing number of police chiefs are making that point. “Today we still have 7,000 trained police officers in back office jobs. Part of our programme of police reform is about freeing up police for frontline duties. That is why I can make this very clear pledge to the house. At the end of this process of making sure our police budgets are affordable we will still be able to surge as many police on to the streets as we have in recent days in London, in Wolverhampton, in Manchester. I do think it is important people understand that.” The prime minister revived his pre-election concerns about a “broken society” as he said that one of the main lessons from the riots was that too many children grew up not knowing the differences between right and wrong. “This is not about poverty, it’s about culture. A culture that glorifies violence, shows disrespect to authority, and says everything about rights but nothing about responsibilities. In too many cases the parents of these children – if they are still around – don’t care where their children are or who they are with, let alone what they are doing. The potential consequences of neglect and immorality on this scale have been clear for too long, without enough action being taken.” The fact that many children ended up in gangs would be the subject of renewed ministerial interest. The prime minister said: “At the heart of all the violence sits the issue of the street gangs. Territorial, hierarchical and incredibly violent, they are mostly composed of young boys, mainly from dysfunctional homes. They earn money through crime, particularly drugs, and are bound together by an imposed loyalty to an authoritarian gang leader. They have blighted life on their estates with gang-on-gang murders and unprovoked attacks on innocent bystanders. “I want us to use the record of success against gangs in some cities like Boston in the USA and indeed the Strathclyde police in Scotland, who have done this by engaging the police, the voluntary sector and local government. I want this to be a national priority.” The prime minister dismissed the idea of holding an early independent inquiry as he said parliament should first take the lead in examining the riots. UK riots David Cameron Gangs Crime Communities Young people Police House of Commons Nicholas Watt guardian.co.uk
Continue reading …A Delta pilot decided enough was enough and returned to the departure airport after a bat caused havoc in the cabin of a Madison-Atlanta flight. The stowaway swooped through the cabin as passengers ducked and screamed, according to a passenger who posted footage to CNN’s iReport. A quick-thinking passenger managed…
Continue reading …A Tennessee student is in custody after his principal was found dead in a pool of blood in a classroom of their church school. The body of popular 49-year-old school head Suzette York was discovered by a teacher at the Seventh-Day Adventist Memphis Junior Academy. A 17-year-old student was still…
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Tehran pays tribute to US activist crushed to death by bulldozer while trying stop the demolition of Palestinian homes Tehran city council has named a street after an American activist who was crushed to death by an Israeli military bulldozer in the Gaza Strip in 2003, a local newspaper has reported. The report in the Hamshahri, a daily affiliated with Tehran’s authorities, said the council has named the street Rachel Aliene Corrie. It said the sign would be placed in the city centre, but did not say when it would be displayed. Corrie, a pro-Palestinian activist from Washington, was trying to prevent what she and other campaigners believed was a push by the Israeli military to demolish nearby Palestinian homes. She was 23 at the time of her death. Iran does not recognise Israel and supports the Palestinians. The decision marked the first time an Iranian street has been named after a US national since the 1979 Islamic revolution that ousted the pro-west shah Muhammad Reza Pahlavi. Before the revolution, at least three high streets in the Iranian capital were named after former US presidents: Dwight Eisenhower, John F Kennedy and Franklin Roosevelt. Iran and the US have not had diplomatic ties since militant students occupied the US embassy in Tehran, holding American diplomats hostage for 444 days from 1979 to 1981. There are a few streets in the city named after western nationals, including Bobby Sands, a member of the IRA who died on hunger strike in a British prison in 1981, and Edward Brown, a British Orientalist known for his work on Iranian history. Washington and its allies say Iran is trying to develop nuclear weapons, and have imposed sanctions on the country. Tehran maintains its nuclear programme is for peaceful purposes. Rachel Corrie Iran Palestinian territories United States Israel Middle East guardian.co.uk
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Humanitarian aid agencies forced to use costly air delivery or ship food to less convenient ports that lengthen delivery time Piracy is hampering the delivery of food aid to Somalia, forcing relief agencies to use aircraft or less convenient ports that lengthen delivery time, the African Development Bank’s chief economist said on Thursday. Mthuli Ncube said concerns over piracy have not lessened as the international community steps up its relief effort for around 12 million people in the Horn of Africa in need of emergency aid as a result of drought, exacerbated by conflict in Somalia. “Absolutely, piracy is very much a concern and not abating at all,” Ncube told the Guardian. “It hampers the delivery of food aid. Some has to be flown in, which has an impact on cost, or it has to go to ports like Mombasa, Kenya, and then be driven overland, which takes time.” A new report by the African Development Bank (AfDB) said piracy has been a longstanding problem for aid efforts to Somalia as 80%-90% of food aid arrives by sea. In 2007, the World Food Programme (WFP), the UN’s food aid agency, reported that the number of ships willing to carry food aid had been cut by half because of the increased dangers faced by ships in Somali waters. However, increased security measures have had an impact. The number of reported pirate attacks in east Africa dropped from 222 in 209 to 172 last year, according to the International Maritime Organisation, which monitors piracy. Most of the attacks occurred off the coast of Somali and in the Gulf of Aden. For the time being, humanitarian aid continues to arrive in Mogadishu by sea and air, including aid sent by many Gulf and Arab states, amid warnings that famine in Somalia has not peaked and that hundreds of thousands of people face imminent starvation and death without a massive global response. The UN says it has received $1.1bn, just 46% of the $2.4bn requested from donor countries. Catherine Bragg, the UN deputy emergency relief co-ordinator, warned the UN security council on Wednesday that the situation is likely to worsen, given very high levels of acute malnutrition and under-five mortality, a continued increase in cereal prices, and a below-average rainy season harvest. The UN estimates over 11 million people across east Africa need food aid . Around 2.8 million people need immediate life-saving assistance in southern Somalia, where al-Shabaab, the Islamist insurgents, have blocked access to the WFP, although some agencies, such as Unicef, are operating in the region. High food prices are compounding problems in the Horn. The Food and Agriculture Organisation (FAO) reported on Wednesday that cereal prices in east Africa reached new peaks in several countries last month. High prices of cereals such as sorghum and maize in the region are the result of a combination of factors, including drought, reduced secondary season harvests this year and high fuel prices that have driven up transport costs, said the FAO. In Somalia, where famine has been declared in five areas in the south-central region, prices of domestically produced staples, sorghum and maize, showed some signs of decline last month but remain between 150% and 200% higher than July last year. Luca Alinovi, the FAO’s representative in Kenya, told the security council the organisation was working to prevent Somalis from abandoning their drought-stricken farms by paying them cash for small jobs, as those who leave can become dependent on aid. Ncube said emergency aid and measures such as cash payments were vital now, but then long-term measures need to be taken to ensure sustainability. “What is required once the rains come is to take measures to support pastoralists, such as providing aid for them to buy cattle, something the bank is doing in east Africa,” he said. “What is also needed is water management, like building dams.” Meanwhile, the UN’s special representative for Somalia, Augustine Mahiga, has called for greater funding and logistical help, including aviation and mine disposal equipment, for Amisom , the African Union peacekeeping force. The AU has proposed increasing Amisom to 20,000 from its current strength of 6,200 to ensure government control of Mogadishu and expand it south to the borders of Kenya and Ethiopia and the town of Kismayo, areas still controlled by al-Shabaab and other militant groups. Al-Shabaab last week announced its withdrawal from the capital , but Mahiga said the security situation remained precarious with the militants likely to resort to terrorist attacks and guerrilla tactics. Somalia Aid Africa Piracy at sea Famine Mark Tran guardian.co.uk
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• Roadside bomb kills five foreign troops in southern Afghanistan • At least 50 foreign troops have died this month A roadside bomb killed five foreign troops in southern Afghanistan on Thursday, Nato has said, less than a week after the coalition suffered its worst single loss in 10 years of war when Taliban insurgents shot down a helicopter. The Nato-led International Security Assistance Force (Isaf) gave no other details regarding Thursday’s incident or the nationality of the troops killed. At least 50 foreign troops have been killed so far in August. Another foreign soldier was also killed by a roadside bomb in southern Afghanistan on Wednesday, Isaf said. Violence is at its worst in Afghanistan since US-backed Afghan forces toppled the Taliban government in late 2001, with high levels of foreign troop deaths and record civilian casualties during the first six months of 2011. Overnight, Taliban insurgents also attacked a police checkpoint in southern Helmand province, killing five Afghan police officers, Helmand police chief Abdul Hakim Angar said. No further details of the incident were available. The spike in casualties – almost 390 foreign troops have been killed so far this year, compared with a record 711 in 2010 – comes at a time of growing unease about the increasingly unpopular and costly war. Afghan security forces have been hit even harder than foreign troops. A total of 1,292 Afghan police and 821 Afghan soldiers were killed last year, said the Afghan government. But it is civilians who have borne the brunt of the war. UN figures show a record 1,462 Afghan civilians were killed in conflict-related incidents in the first six months of 2011. Last month foreign troops began the first phase of a gradual process to hand security control to Afghan soldiers and police. That process is due to end with the last foreign combat troops leaving at the end of 2014, but some US lawmakers are questioning whether that timetable is fast enough. A Chinook troop-carrying helicopter crashed five days ago in central Afghanistan after it was likely hit by a rocket fired by the Taliban, killing 30 US troops, seven Afghan troops and one Afghan civilian interpreter. Isaf said on Wednesday that it had killed the Taliban militants responsible for shooting down the helicopter. Nato Afghanistan Military guardian.co.uk
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Mortgage experts warn of lenders losing patience and threat of an interest rate increase The number of homes being repossessed fell by 1% in the second quarter of the year to 9,000, compared with 9,100 in the first three months of 2011, according to the Council of Mortgage Lenders (CML). But some housing insiders claim the UK is set to experience an “arrears timebomb”, which will go off as soon as rates rise next year. The three-month figure represents a 7% fall on the number of home repossessions recorded in the second quarter of 2010 and takes the total number in the first half of 2011 to 18,100 compared with 19,500 in 2010. But the number of mortgages in arrears of between 1.5% and 2.5% of the outstanding balance edged up from 77,800 to 78,500 in the second quarter of the year, and the CML did not revise its total repossession forecasts for 2011 and 2012, which stand at a respective 40,000 and 45,000. CML director general Paul Smee said: “Mortgage repayment problems have stabilised against a backdrop of stable employment and low interest rates. Despite current uncertainty in financial markets, we see no need to revise our forecasts. Anyone with debt worries should take advice and speak to their lender at the earliest opportunity, as most temporary financial problems can be resolved. “It is clear from the low rate of repossession that lenders want to keep people in their homes, and are successfully doing so in the vast majority of arrears cases. Repossession really is seen as a last resort.” Chris Gardner, director of mortgage broker Obligo , warned: “This year’s apparently modest figures could be the tip of the iceberg. They’re being kept artificially low by two important factors: the interest rate is at a historic low, and lenders have shown remarkable forbearance. Together they have created a fool’s paradise, where people’s mortgage payments are comparatively low and lenders are being especially tolerant of late payers. “But lenders’ forbearance cannot last forever and if they change their approach the rug will quickly be pulled from under many late payers, leading to thousands more repossessions. “While this week’s low growth forecast from the Bank of England is likely to mean an interest rate rise is still some time off, when – not if – the rate goes up there will be a big spike in arrears. “The current low rate means that many who are just able to meet their repayments now will soon be swamped by even a small rate rise. Together they form an arrears timebomb, which will go off as soon as rates rise next year.” The CML has also announced that the value of new buy-to-let loans increased by 21% in the second quarter of 2011, driven mainly by remortgaging. It said there were 32,000 buy-to-let loans worth £3.5bn taken out from April to June, the highest number and value since the last quarter of 2008. David Whittaker, managing director of Mortgages for Business , said: “Landlords are basking in the glow of the BTL [buy to let] sector at the moment. Product numbers are up, yields are healthy and rents are in no danger of falling. Amid a backdrop of uncertain markets and social unrest, the BTL market is one of the few beacons of light in an otherwise depressing picture. Landlords and professional property investors are voting with their feet that now is a good time to be in the market and we expect this to continue throughout the rest of the year.” However, the CML added that the BTL market is running at around one third of the levels seen at the peak of lending in 2007. Citizens Advice has tips for homeowners struggling to keep up with mortgage payments , claiming it has dealt with more than 100,000 mortgage and secured loan arrears and stopped 5,000 people becoming homeless over the past 12 months. Chief executive Gillian Guy said: “With the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the government must focus on helping people stay in their homes. Repossession is a terrifying prospect and should always be the last resort.” Citizens Advice suggests that if you fall behind you should make mortgage payments a top priority – you could lose your home if you fall behind – and let your lender know if you are having problems rather than simply stop paying or miss payments. Get free, independent advice as soon as you realise there’s a problem (don’t wait until you’re threatened with court action) and see if your lender will agree to reduce your monthly interest payments or make other adjustments. You may also be entitled to benefits, tax credits and other help if you are struggling. Don’t ignore court papers and court hearings and, if facing repossession, find out if you qualify for the government’s mortgage rescue scheme, which may allow you to sell your house but continue to live in it and pay rent. Ask your local council for details. Mortgage directive In a busy week for the CML, the organisation also said it was concerned about a proposed European directive on mortgages that could have serious implications for mortgage and housing markets in many European countries. The European commission said it wanted to introduce measures that would reinforce responsible lending and borrowing. The measures include: a “cooling-off” period for borrowers of at least 14 working days after a mortgage offer has been made; compensation for consumers if credit is rejected because a reference agency supplies an inaccurate report; the right for borrowers to make under- and overpayments without penalty, and for them to be able to draw down in the future any overpayments they have made; and a ban on arrears charges if payment problems arise that are beyond the control of the borrower. The CML argued that, while some UK lenders already allow under- and overpayments, introducing it across the board would impose costs on lenders and could make all mortgages more expensive. It argued that the other measures could also result in added costs for mortgage providers as well as leading to uncertainty for firms, which may make it more difficult for higher-risk customers to obtain mortgage finance. The CML said: “Measures seeking to protect consumers may not be in their wider interests if they result in exclusion from the market for large numbers of customers. Additionally, all customers could face higher costs to cover the provision of measures that are used only by a few.” Repossessions Mortgage arrears Property Borrowing & debt Mortgages Housing market Mark King guardian.co.uk
Continue reading …Mortgage experts warn of lenders losing patience and threat of an interest rate increase The number of homes being repossessed fell by 1% in the second quarter of the year to 9,000, compared with 9,100 in the first three months of 2011, according to the Council of Mortgage Lenders (CML). But some housing insiders claim the UK is set to experience an “arrears timebomb”, which will go off as soon as rates rise next year. The three-month figure represents a 7% fall on the number of home repossessions recorded in the second quarter of 2010 and takes the total number in the first half of 2011 to 18,100 compared with 19,500 in 2010. But the number of mortgages in arrears of between 1.5% and 2.5% of the outstanding balance edged up from 77,800 to 78,500 in the second quarter of the year, and the CML did not revise its total repossession forecasts for 2011 and 2012, which stand at a respective 40,000 and 45,000. CML director general Paul Smee said: “Mortgage repayment problems have stabilised against a backdrop of stable employment and low interest rates. Despite current uncertainty in financial markets, we see no need to revise our forecasts. Anyone with debt worries should take advice and speak to their lender at the earliest opportunity, as most temporary financial problems can be resolved. “It is clear from the low rate of repossession that lenders want to keep people in their homes, and are successfully doing so in the vast majority of arrears cases. Repossession really is seen as a last resort.” Chris Gardner, director of mortgage broker Obligo , warned: “This year’s apparently modest figures could be the tip of the iceberg. They’re being kept artificially low by two important factors: the interest rate is at a historic low, and lenders have shown remarkable forbearance. Together they have created a fool’s paradise, where people’s mortgage payments are comparatively low and lenders are being especially tolerant of late payers. “But lenders’ forbearance cannot last forever and if they change their approach the rug will quickly be pulled from under many late payers, leading to thousands more repossessions. “While this week’s low growth forecast from the Bank of England is likely to mean an interest rate rise is still some time off, when – not if – the rate goes up there will be a big spike in arrears. “The current low rate means that many who are just able to meet their repayments now will soon be swamped by even a small rate rise. Together they form an arrears timebomb, which will go off as soon as rates rise next year.” The CML has also announced that the value of new buy-to-let loans increased by 21% in the second quarter of 2011, driven mainly by remortgaging. It said there were 32,000 buy-to-let loans worth £3.5bn taken out from April to June, the highest number and value since the last quarter of 2008. David Whittaker, managing director of Mortgages for Business , said: “Landlords are basking in the glow of the BTL [buy to let] sector at the moment. Product numbers are up, yields are healthy and rents are in no danger of falling. Amid a backdrop of uncertain markets and social unrest, the BTL market is one of the few beacons of light in an otherwise depressing picture. Landlords and professional property investors are voting with their feet that now is a good time to be in the market and we expect this to continue throughout the rest of the year.” However, the CML added that the BTL market is running at around one third of the levels seen at the peak of lending in 2007. Citizens Advice has tips for homeowners struggling to keep up with mortgage payments , claiming it has dealt with more than 100,000 mortgage and secured loan arrears and stopped 5,000 people becoming homeless over the past 12 months. Chief executive Gillian Guy said: “With the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the government must focus on helping people stay in their homes. Repossession is a terrifying prospect and should always be the last resort.” Citizens Advice suggests that if you fall behind you should make mortgage payments a top priority – you could lose your home if you fall behind – and let your lender know if you are having problems rather than simply stop paying or miss payments. Get free, independent advice as soon as you realise there’s a problem (don’t wait until you’re threatened with court action) and see if your lender will agree to reduce your monthly interest payments or make other adjustments. You may also be entitled to benefits, tax credits and other help if you are struggling. Don’t ignore court papers and court hearings and, if facing repossession, find out if you qualify for the government’s mortgage rescue scheme, which may allow you to sell your house but continue to live in it and pay rent. Ask your local council for details. Mortgage directive In a busy week for the CML, the organisation also said it was concerned about a proposed European directive on mortgages that could have serious implications for mortgage and housing markets in many European countries. The European commission said it wanted to introduce measures that would reinforce responsible lending and borrowing. The measures include: a “cooling-off” period for borrowers of at least 14 working days after a mortgage offer has been made; compensation for consumers if credit is rejected because a reference agency supplies an inaccurate report; the right for borrowers to make under- and overpayments without penalty, and for them to be able to draw down in the future any overpayments they have made; and a ban on arrears charges if payment problems arise that are beyond the control of the borrower. The CML argued that, while some UK lenders already allow under- and overpayments, introducing it across the board would impose costs on lenders and could make all mortgages more expensive. It argued that the other measures could also result in added costs for mortgage providers as well as leading to uncertainty for firms, which may make it more difficult for higher-risk customers to obtain mortgage finance. The CML said: “Measures seeking to protect consumers may not be in their wider interests if they result in exclusion from the market for large numbers of customers. Additionally, all customers could face higher costs to cover the provision of measures that are used only by a few.” Repossessions Mortgage arrears Property Borrowing & debt Mortgages Housing market Mark King guardian.co.uk
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The UK chancellor will update Parliament on the state of the British economy around 1pm today, as Italy and France fight to avoid being dragged deeper into Europe’s debt crisis 12.45pm: In the City, the FTSE 100 just took a nasty tumble – now down 39 points at 4967. The blue-chip index had been 100 points higher this morning — the eurozone crisis continues to chip away at investors. My colleague Nick Fletcher reports that alarming rumours are rippling across the capital’s trading floors: Traders heard a tale than BNP might need to increase its provisions for Greece, while Reuters was reporting that a bank in Asia had cut credit lines to major French lenders on worries about their exposure to Eurozone sovereign debt. Five other banks in Asia were said to be reviewing their positions. More details here on Market Forces Live : 12.23pm: While we wait for Osborne, here are the latest odds on which country might lose its AAA rating (with Standard & Poor’s) next. Via Paddy Power: • 2/1 France • 7/2 Canada • 7/2 United Kingdom • 7/1 Austria •10/1 Denmark •10/1 Netherlands •10/1 Australia Early betting trends suggest that France could be next in the firing line but the USA downgrade shows that that no country is safe. 12.04pm: George Osborne is expected to start his statement around 1pm — Parliament is currently listening to David Cameron and Ed Miliband on the UK riots, and MPs are beginning to give their own responses. But what might the chancellor say? The timing isn’t perfect – just a day after the Bank of England cut its forecast for UK growth in 2011 to around 1.5%, from 1.8% previously. Ed Conway, Sky’s economics editor, appears to have been given some guidance by the UK Treasury: @edmundo : Chancellor to stress that stock market falls are international issue – but thing to watch are measures of sovereign creditworthiness and @edmundo : Chancellor will cite fact that based on CDS prices, UK is now a better credit risk than Germany for first time in crisis Actually, the very latest data from Markit show that UK and German Credit Default Swaps (insurance on a government bond defaulting) are neck-and-neck this morning. That is certainly a reassuring signal from the markets. 11.57am: Sticking with the crisis in the eurozone, there has been a surge in emergency borrowing from the European Central Bank to commercial banks. Banks took more than €4bn of overnight funds from the ECB on Wednesday, the biggest amount since mid-May. This comes at a price, though: banks have to pay 2.25% for the money, compared with 1.5% for regular ECB funding. Banks are waiting for a fresh injection of six-month funds from the ECB and are likely to have used the overnight funds to tide them over. The recent downturn in money markets prompted the ECB to reintroduce 6-month funding a week ago, as well as extending its crisis measure of lending banks as much money as they ask for. 11.49am: Italy’s economy and finance minister Giulio Tremonti has just told the country’s parliament the latest details of its austerity plans. Tremonti said that Italy is ready to act in response to European requests for labour market reform, privations and other measures to stimulate economic growth and balance its budget by 2013. The European Central Bank has demanded large-scale privatisation of local services, pension reform and greater flexibility in the labour market. Tremonti admitted Italy needed stronger austerity measures to meet its target of balancing the budget by 2013, and pledged to step up efforts to fight tax evasion and abuse of fixed-term employment contracts. Silvio Berlusconi’s government has already announced some €20bn of austerity measures, but has come under fire at home and abroad for not providing any details. Berlusconi has made a handful of statements since the beginning of the month and pledged to speed up reform measures, without elaborating. The immediate response from the Italian stock market is not encouraging – having surged in early trading, the FTSE MIB is now flat for the day. 11.36am: In the roller coaster world of the financial markets, European shares surged at the start of trading – with the FTSE 100 up more than 140 points (to 5151 points) But in the last few minutes the rally has fizzled out, as French bank shares took a kicking. Shares in Société Générale just fell by 6.6%, having been 7% higher in early trading. BNP Paribas are down nearly 7%. It doesn’t take much to alarm the London stock market at present, and the FTSE has subsided to 5047 (up 40 points). Traders say the rumours continue to swirl that SocGen and/or BNP are in trouble, despite robust denials. Here’s the view of David Jones of IG Index: The rally has stalled with many traders unwilling to believe that this is anything more than just another dead cat bounce. We could well be in for a choppy few hours until the US opens….. There is still the feeling that there is no smoke without fire [about France] which simply adds to the lack of commitment in the current rally. As we reported last night, there is fevered speculation that France’s AAA rating is at risk – which is forcing French president Nicolas Sarkozy to consider tougher austerity measures. 11.30am: Good morning, on a day when the UK economy and the European debt crisis are both in the spotlight. In the next few hours, the UK chancellor will give a statement to MPs on the state of the economy, and his European counterparts will battle to avoid being sucked deeper into the eurozone debt crisis. George Osborne ‘s address to parliament is due to start around 1pm – sandwiched between a statement from the Prime Minister on the UK riots, and the full parliamentary debate on this issue. Our colleague Andrew Sparrow will be covering all the riot-related action from Westminster – yup, he’s been recalled as well. Elsewhere, the Italian finance minister is presenting a new austerity package – Giulio Tremonti is under pressure to offer more detail about his plans to repair Italy’s public finances, and opposition from union leaders who oppose deep cuts. Meanwhile, the French government has been rattled by speculation that its AAA credit rating is at risk – we’ll be watching the latest developments there too. Financial crisis European debt crisis Stock markets European Central Bank Italy George Osborne France Market turmoil Graeme Wearden Julia Kollewe guardian.co.uk
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