MEXICO CITY (Reuters) - Mexico began shutting down parts of its economy on Thursday to slow the spread of a new flu strain as officials urged increased worldwide precautions against an imminent pandemic.

The World Health Organization said it would remain for now at its current alert level -- one step below full pandemic -- and that it would no longer refer to the H1N1 virus as "swine flu" to appease beleaguered meat producers.

New confirmed flu cases were reported in the United States, Canada and Europe, although a case in Peru, which would have been the first confirmed case in Latin America outside of Mexico, was later discounted.

Almost all cases outside of Mexico have been mild, only a handful of patients have required hospital treatment, and most global markets have shrugged off concerns.

But the case count continues to rise, and officials say there are many unanswered questions about the outbreak.

U.S. officials said new infections were occurring and at least 298 U.S. schools closed around the country because of possible infections. Canada recorded its first case of person-to person transmission of the virus.

In Mexico, the worst hit country with up to 176 deaths, President Felipe Calderon told government offices and private businesses not crucial to the economy to stop work beginning on Friday to avoid further spreading a virus that is striking across age and class lines.

"There is no safer place than your own home to avoid being infected with the flu virus," Calderon said in his first televised address since the outbreak started.

In Mexico City, where the virus has already brought public life to a standstill, some were skeptical while others vowed not to take part in the shutdown.

"Closing businesses is not right and not fair. What are we going to live on? Air?" said Andres Garcia, who works in a tailor shop in the old colonial center of the capital.

CURE WORSE THAN DISEASE?

Mexico's assembly for export factories known as maquiladoras, a pillar of the economy, said it would defy the shutdown call while some of the country's mines also vowed to stay in operation.

"We have commitments that we have to meet, and if we don't meet them, the cure will end up being worse than the disease," council head Cesar Castro told reporters.

With its tourism industry savaged, shoppers staying home and exports to the United States in steep decline, Mexico could find itself in the longest, deepest recession it has seen in years, according to analysts.

Mexico's peso was hammered by flu fears on Thursday and its stock market slid. But most global markets were taking the flu news in stride as traders focused on hopes that a deep U.S. recession may be nearing its end.

"The information that we have at this stage is it is a relatively minor (economic) event," International Monetary Fund chief economist Olivier Blanchard said, although he added that some countries and sectors could see "quite dramatic" fallout from the outbreak.

Previous studies at the World Bank have said a severe flu pandemic which triggers a clampdown on trade could cost the global economy trillions of dollars.

The WHO and flu experts say they do not yet know enough about this new strain to say how deadly it actually is, how far it might spread and how long any potential pandemic may last.

Flu epidemics generally last a few weeks or months in any single community, and can pass around the world in one or two waves over 18 months to two years before fading out.

U.S. officials have reported 109 confirmed swine flu infections in at least 11 states and the only death recorded outside of Mexico -- a Mexican toddler visiting Texas.

The White House said on Thursday that a member of the advance team that went with Obama to Mexico had also come down with flu-like symptoms and passed them to his family, although all of them had recovered.

OPEN QUESTIONS

U.S. Health and Human Services Secretary Kathleen Sebelius told a public webcast there were still many unanswered questions. "We know what happens year in, year out with seasonal flu. What we don't know is if this is going to be more virulent or milder," she said.

Normal seasonal flu kills between 250,000 and 500,000 people around the globe in an average year, including about 36,000 in the United States.

Worldwide, 11 countries have reported confirmed cases of the H1N1 strain, with the Netherlands the latest to join the list. It said a 3-year-old who had recently returned from Mexico had contracted the virus.

Switzerland also confirmed its first case on Thursday in a man returning from Mexico. Peru's health minister Oscar Ugarte told Reuters that further tests on a suspected case there had determined it was not the new flu strain.

Flu preparations were intensified after the WHO raised its alert level to phase 5, the last step before a pandemic.

The WHO recommended all countries track any suspect cases and ensure medical workers dealing with them wear protective masks and gloves. But it stopped short of recommending travel restrictions, border closures or any limitation on the movement of people, goods or services.

Keiji Fukuda, acting WHO assistant director-general, told reporters there was no new evidence to prompt the agency to move to its top alert level which would signal a global pandemic was under way.

Fukuda said Swiss drugmaker Roche was stepping up production of Tamiflu to deal with the infection at that the WHO had released some of its own stockpiles of the drug -- known generically as oseltamivir and proven effective against the new strain -- to developing countries deemed most at need, including Mexico.

The World Bank also announced it was beginning to transfer flu emergency funds to Mexico and Argentina.

Source: www.reuters.com/article/newsOne

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By Matt Spetalnick

WASHINGTON (Reuters) - President Barack Obama nudged Israeli Prime Minister Benjamin Netanyahu on Tuesday to accept the goal of a Palestinian state, as he pressed Israel and the Palestinians to "step back from the abyss."

Deepening his direct role in reviving stalled peace efforts, Obama met Jordan's King Abdullah and invited Netanyahu, Palestinian President Mahmoud Abbas and Egyptian President Hosni Mubarak for separate talks by early June.

He seized the chance to reassure Abdullah of his commitment to a two-state solution to the Israeli-Palestinian conflict despite reluctance by Netanyahu's new right-leaning government to support eventual Palestinian statehood.

Obama reasserted his pledge to "deeply engage" in Arab-Israeli peace diplomacy -- in contrast to a more hands-off approach by his predecessor George W. Bush -- and predicted good-faith gestures from both sides in coming months.

"What we have to do is step back from the abyss," Obama told reporters after meeting Abdullah, a key Arab ally, at the White House.

But Obama's Middle East strategy has been complicated by the emergence of a coalition led by Netanyahu, who since coming to power last month has avoided recognizing the Palestinians' right to an independent state, as his predecessor Ehud Olmert did.

Obama took care not to confront Netanyahu head-on but made clear his administration hoped to coax him into accepting the principle of a two-state solution, which has been the basis of U.S. policy for years.

"They are going to have to formulate and, I think, solidify their position," Obama said of Israel's new government.

While offering no new ideas for solving the decades-old conflict, he insisted a "sense of urgency" was needed to resuscitate the peace process.

"I agree that we can't talk forever, that at some point steps have to be taken so that people can see progress on the ground. And that will be something that we will expect to take place in the coming months," Obama said.

Adding to pressure on Netanyahu, Obama added, "I am a strong supporter of a two-state solution. I have articulated that publicly, and I will articulate that privately. And I think that there are a lot of Israelis who also believe in a two-state solution."

CONTRAST TO BUSH

Obama reaffirmed his pledge to make Middle East peace a priority. Bush's critics had accused him of largely neglecting the conflict, and most Arabs considered him biased in favor of Israel.

Washington's reengagement in the elusive quest for Israeli-Palestinian peace is seen as a key thrust of Obama's bid to repair the United States' image in the world damaged by the Iraq war and other Bush policies.

Obama made clear his support for a 2002 Arab initiative seeking "a comprehensive peace" between Israel and all Arab nations, including a Palestinian state, to be an integral part of renewed peace efforts.

Successive Israeli governments have been wary of the initiative in part because it is vague about how to resolve the status of Palestinian refugees.

Secretary of State Hillary Clinton said after having lunch with Abdullah that more must be done to revive peace talks. "We have to enlist the neighbors in the region in support of those efforts," she said.

It remained unclear, however, how hard Obama might be willing to push Netanyahu to make compromises.

On the Palestinian side, Abbas's political weakness -- he governs only the West Bank while Islamist Hamas controls the Gaza Strip -- raises serious questions about his ability to deliver on any deal.

Visiting Israel and the occupied West Bank last week, Obama's Middle East envoy, George Mitchell, said he would vigorously pursue the creation of a Palestinian state.

Netanyahu has pledged to hold talks with the Palestinians on economic, security and diplomatic issues but has made no public promise to negotiate statehood.

Palestinian leaders have rejected any notion of an "economic peace" and have said U.S.-backed talks with Israel could not resume until Netanyahu committed to statehood.

Source: www.reuters.com/article/politicsNews

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By Laura MacInnis

GENEVA (Reuters) - Iranian President Mahmoud Ahmadinejad prompted a rare walk-out at the United Nations on Monday when he called Israel a "cruel and repressive racist regime" in his remarks to a conference on race.

U.N. Secretary-General Ban Ki-moon deplored the address which prompted dozens of delegates to leave their seats, further undermining the summit which some Western powers including the United States are boycotting.

"It was a very troubling experience for me as secretary-general," he told a news conference at the day's end. "I have not seen, experienced, this kind of disruptive proceedings of the assembly, the conference, by any one member state. It was a totally unacceptable situation."

Washington announced on Saturday it would sit out the Geneva forum on fears it would be dominated by unfair criticism against Israel. Australia, New Zealand, Italy, Germany, Poland and the Netherlands then followed suit.

Their boycott left Ahmadinejad, who has in the past cast doubt on the Nazi Holocaust, in the spotlight as the only head of state at the conference.

His speech produced exactly the kind of language that they feared, which had also caused Canada and Israel to announce months ago they would stay away.

"Following World War Two they resorted to military aggressions to make an entire nation homeless under the pretext of Jewish suffering," Ahmadinejad told the conference, on the day that Jewish communities commemorate the Holocaust.

"And they sent migrants from Europe, the United States and other parts of the world in order to establish a totally racist government in the occupied Palestine," he said, according to the official translation.

"And in fact, in compensation for the dire consequences of racism in Europe, they helped bring to power the most cruel and repressive racist regime in Palestine."

U.S. CALLS SPEECH "VILE"

Washington decried Ahmadinejad's speech as "vile and hateful," while the Vatican called it "extremist and unacceptable." Navi Pillay, the U.N. High Commissioner for Human Rights, called the address both "unsavory" and "obnoxious."

"I was shocked and deeply saddened by everything he said," she told journalists. "I don't think, though, that his behavior provided any justification for any other member state to walk out from this conference."

Dozens of diplomats in the audience promptly got up and left the hall for the duration of the speech. While most returned when Ahmadinejad finished speaking, the Czech Republic said its delegation would no longer take part in the conference.

"Such outrageous anti-Semitic remarks should have no place in a U.N. anti-racism forum," said British ambassador Peter Gooderham, whose country chose not to send a minister to Geneva.

Norwegian Foreign Minister Jonas Gahr Store told the plenary after Ahmadinejad's speech that Iran had isolated itself. "Norway will not accept that the odd man out hijacks the collective efforts of the many," he said.

However, a number of the delegations that remained behind applauded Ahmadinejad.

Ban, who had held a meeting with Ahmadinejad before the address, said it was "deeply regrettable" that the Iranian leader had ignored his plea to avoid causing upset.

"I deplore the use of this platform by the Iranian President to accuse, divide and even incite," he said. "We must all turn away from such a message in both form and substance."

Earlier on Monday, Israel recalled its ambassador to Switzerland in protest about the conference and Israeli officials also voiced anger at a meeting that Swiss President Hans-Rudolf Merz held on Sunday with Ahmadinejad.

Arab and Muslim attempts to single out the Jewish state for criticism had prompted the United States to walk out of the first U.N. summit on racism, in South Africa in 2001.

Although a declaration prepared for the follow-up conference does not refer explicitly to Israel or the Middle East, its first paragraph "reaffirms" a text adopted at the 2001 meeting which includes six paragraphs on those sensitive issues.

Source: www.reuters.com/article/worldNews

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By Mark S. Smith

PORT-OF-SPAIN, Trinidad – President Barack Obama extended a hand of friendship to America's hemispheric neighbors on Saturday at a summit where he offered a new beginning for U.S.-Cuba relations and accepted a book about the exploitation of Latin America from Venezuela's fiery, anti-American leader.

At the Summit of the Americas, Obama signaled he was ready to accept Cuban President Raul Castro's proposal of talks on issues once off-limits for Cuba, including the scores of political prisoners held by the communist government. Some countries at the summit pushed the United States to go further and lift the 47-year-old U.S. trade embargo against the communist nation, which has complicated U.S. relations throughout Latin America and the Caribbean.

To Latin American nations reeling from a sudden plunge in exports, Obama promised a new hemispheric growth fund, an initiative to increase Caribbean security and a new regional partnership to develop alternative energy sources and fight global warming.

"I have a lot to learn and I very much look forward to listening and figuring out how we can work together more effectively," Obama said.

As the first full day of meetings began on the two-island nation of Trinidad and Tobago, Obama exchanged handshakes and pats on the back with Venezuela's Hugo Chavez, who once likened President George W. Bush to the devil. In front of photographers, Chavez gave Obama a copy of "The Open Veins of Latin America: Five Centuries of the Pillage of a Continent," a book by Eduardo Galeano, which chronicles U.S. and European economic and political interference in the region.

Later, when a reporter asked Obama what he thought of the book, the president replied: "I thought it was one of Chavez' books. I was going to give him one of mine."

Their exchange on the first full day of meetings at the summit followed a brief grip and grin for cameras that the two leaders had on Friday night when Obama greeted him in Spanish.

"I think it was a good moment," Chavez said about their initial encounter. "I think President Obama is an intelligent man, compared to the previous U.S. president."

Obama was taking part in a series of plenary sessions, group gatherings and one-on-one meetings that the White House hoped to squeeze into a busy schedule. He hoped to make time for individual sessions with leaders from Canada, Colombia, Peru, Haiti and Chile, aides reported.

Obama was noncommittal about a possible meeting with Chavez, who criticized past U.S. policy at the summit, but expressed hope that relations between the nations would change.

"I think we're making progress at the summit," was all Obama would say.

At his first meeting with South American leaders, Obama waited several minutes while security officers and members of the media pushed noisily into the room. Somebody accidentally hit a light switch, prompting Obama to ask: "Who turned off the lights, guys?" He said he hoped events would go more smoothly during the meeting where he said he would talk to the leaders about energy, security and other topics. "I have a lot to learn and I'm very much looking forward to listening," the president said.

In an opening speech to the 34-nation gathering on Friday, the president promised a new agenda for the Americas, as well as a new style.

"We have at times been disengaged, and at times we sought to dictate our terms," Obama said to loud applause. "But I pledge to you that we seek an equal partnership. There is no senior partner and junior partner in our relations."

He also extended a hand to a leader Ronald Reagan spent years trying to drive from power: Nicaragua's Daniel Ortega. The Sandinista president stepped up and introduced himself, U.S. officials reported.

Yet soon after, Ortega, who was ousted in 1990 elections that ended Nicaragua's civil war but who was returned to power by voters in 2006, delivered a blistering 50-minute speech that denounced capitalism and U.S. imperialism as the root of much hemispheric mischief. The address even recalled the 1961 Bay of Pigs invasion of Cuba, though Ortega said the new U.S. president could not be held to account for that.

"I'm grateful that President Ortega did not blame me for things that happened when I was three months old," Obama said, to laughter and applause from the other leaders.

But perhaps the biggest applause line was his call for a fresh start in relations between Washington and Havana.

"I know there's a longer journey that must be traveled to overcome decades of mistrust, but there are critical steps we can take toward a new day," he said.

Earlier this week, Obama ordered an easing of travel and remittance restrictions for Americans with relatives in Cuba. Within hours, Castro — who took over from his ailing brother Fidel a year ago — responded with an offer of talks on "everything" that divides the two countries.

The White House welcomed the offer, but suggested actions would be better, such as releasing some of Havana's scores of political prisoners.

Added Obama: "I am not interested in talking for the sake of talking. But I do believe that we can move U.S.-Cuban relations in a new direction."

Source: http://news.yahoo.com

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By Martin Petty and John Ruwitch

BANGKOK (Reuters) - Thai anti-government protesters in Bangkok surrendered on Tuesday, giving the harried prime minister some breathing space to try to fix the worsening economy.

"We have to stop because we need to look after the lives of our supporters," said Jatuporn Prompan, one of the leaders of the red-shirted protesters loyal to former premier Thaksin Shinawatra who still commands widespread loyalty among the rural poor.

The government extended the New Year's holiday for the rest of the week for "public safety" in case the red shirts regroup in Thaksin strongholds and come back to the capital, government spokesman Panitan Wattanayagorn told Reuters.

"Overall, I don't think this is the end of the story," said Danny Richards, senior economist at the Economist Intelligence Unit in London. "This crisis still has a long way to go.

"But in terms of this protest in itself, Abhisit has managed to remain in control, and I think you'd have to say he has avoided a major crisis of confidence in his government."

Police said Arrest warrants have been issued for Thaksin and 13 other pro-Thaksin leaders in the United Front for Democracy against Dictatorship (UDD) for violating a state of emergency, which forbids more than five people for political reasons.

Four of them were already in custody.

Thailand's intractable political divide broadly pits royalists, the military and the urban middle-class against the rural poor loyal to Thaksin.

S&P DOWNGRADE

Standard & Poor's downgraded its local currency sovereign rating for Thailand on Tuesday and said political tension would remain high, whichever side was in power.

"We believe that investor confidence has been damaged significantly as a result of the latest developments while, in the near term, inbound tourism will also be affected negatively," said S&P credit analyst Kim Eng Tan.

Thai stocks look set to fall when they resume trading on Thursday after a long holiday scarred by political unrest, and the baht may also come under pressure due to the downgrade, investment analysts said.

Abhisit was made to look foolish after the "red shirts" forced the cancellation of an Asian summit in the resort of Pattaya on Saturday, an event the prime minister had trumpeted as proof Thailand was returning to normal.

Protesters had besieged his office at Government House since March 26, demanding he resign and new elections be held.

But Abhisit restored some of his lost credibility after the military quelled violent protests on Monday between red shirts and troops at a major junction in the capital without too much bloodshed.

Two people died, both of them in skirmishes between residents and someone riding on a motorbike, while 123 people were injured in the clashes between soldiers and protesters, mostly from tear gas, authorities said.

Abhisit said on Tuesday the state of emergency in greater Bangkok that he imposed on Sunday would remain for the time being to restore order in parts of the capital where protests were still taking place "but without their red shirts on."

Thousands of red shirt protesters were put on buses back to their home provinces after their leaders surrendered to the military at Government House.

The violence has damaged Thailand's crucial tourist industry at a busy holiday time. Several countries have issued advisories on travel to Thailand.

The tourist sector was barely picking up after a one-week shutdown of Bangkok's airports by protesters opposed to Thaksin late last year when a government allied to him was in power.

However, a festive spirit returned on Tuesday, as people came out onto the streets to soak each other with water, a tradition of Songkran, the Thai New Year.

The government announced the three-day holiday would be extended for the rest of the week, although financial markets will open as normal on Thursday.

"DO OR DIE"

Army spokesman Sansern Kaewkamnerd said red-shirted protesters had tried to stop transmission of a state television channel in two places on Monday, and Thaksin supporters were thwarted from setting up a blockade in his northern Chiang Mai stronghold, police there said.

"This is not the end," one protest leader, Nattawut Saikuar, told Reuters. "We'll be back. Our leaders will meet after Songkran to discuss our next move."

Abhisit told Reuters in the early hours of Tuesday it was a "do-or-die" moment for the rule of law and he would not negotiate with Thaksin.

He said dissolving parliament in order to hold elections could lead to electoral violence, but he would listen to the grievances of protesters.

The end to the protests is a blow to Thaksin, ousted in a 2006 coup and living in exile to avoid jail on a corruption conviction. He had been calling for a "people's revolution" that for now has fizzled.

(Additional reporting by Bangkok bureau; Writing by Bill Tarrant; Editing by Sugita KatyaJustify Fulll)

Source: www.reuters.com/article/worldNews

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By David Alexander

WASHINGTON (Reuters) - President Barack Obama will try to establish a cooperative new relationship with Latin America this week, but U.S. resistance to change on highly symbolic issues like Cuba and immigration could undercut the effort, analysts said.

Obama travels to Mexico on Thursday for his first visit to the region as president and heads to Trinidad and Tobago on Friday for the Fifth Summit of the Americas. As he did at the G20 summit of major economic powers in London this month, the president plans to emphasize listening to regional leaders and working on shared goals.

"With all that is at stake today, we cannot afford to talk past one another," Obama said on Saturday in his weekly radio speech. "We have to find, and build on, our mutual interests."

Jeffrey Davidow, Obama's special adviser for the summit, said there had been a push to establish a new tone with pre-summit consultations and diplomacy. Obama met Mexican President Felipe Calderon before taking office and several Cabinet officials have visited Latin America.

"I think coming so early in the administration," Davidow said, "this ... legitimately can be seen as a new beginning."

Obama's popularity, compared to former President George W. Bush, and his performance at the G20 give him tremendous goodwill among fellow leaders as he begins the visit, analysts said, but much hinges on his pledge to listen and learn.

"WALK THE WALK"

"What matters is the day after," Luis Alberto Moreno, president of the Inter-American Development Bank, told a briefing. "If the U.S. is ... saying that they're willing to listen and to learn ... you have to walk the walk.

"And in this regard there's a number of issues that should not be removed from the agenda: things like Cuba, things like immigration," he said.

Those issues, though not on the summit agenda, are sure to be debated. President Hugo Chavez of Venezuela and like-minded leaders are expected to push for Cuba to be readmitted to the Organization of American States. Debate over Cuba would underscore the divide between the United States and the region.

Washington has said it would not end its 47-year-old embargo on the communist island. But Obama is looking at loosening restrictions on family visits and remittances to Cuba, steps many view as inadequate.

"The measures that the administration seems to be willing to roll out regarding Cuban-American family travel are so limited in their impact, narrow in their scope that perversely this administration, which wants the summit not to be a Cuba summit, might make it a Cuba summit," said Julia Sweig, head of Latin American studies at the Council on Foreign Relations.

SPOTLIGHT ON U.S. ECONOMY

That would be a mistake, analysts said, because the main issue confronting the leaders is the global economic crisis. As Latin America's main trade partner, the United States can best help the situation by getting its own economy back on track.

"The recovery of the U.S. economy is the key factor and everyone will be looking to President Obama for his description of how his plans are laid out," said Peter DeShazo, director of the Americas program at the Center for Strategic and International studies.

Moreno said five years of 5 percent growth had lifted 40 million people in Latin America out of extreme poverty, but a 1 percent drop in gross domestic product from the global recession would send 15 million people sliding back.

"The best way to assist the hemisphere would be to fix the U.S. economy, resisting understandable but self-defeating impulses toward trade and investment protectionism," said Eric Farnsworth, vice president of the Council of the Americas.

Many analysts said Latin America's pursuit of prudent economic policies over the past decade -- low debt, open markets, free trade -- had left it better able to cope with the global recession. Now the region needs to see the United States step up and take its own medicine, they said.

"I think we need to send a very strong signal to the world and to Latin America in particular that the advice that we were giving them earlier applies to us as well," said Mustafa Mohatarem, chief economist at General Motors.

Source: www.reuters.com/article/politicsNews

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By Martin Petty

BANGKOK (Reuters) - The Thai army cracked down on anti-government protesters on Monday, firing warning shots in a major junction of the capital at activists who responded by hurling petrol bombs at them, a Reuters reporter said.

An army spokesman said soldiers trying to clear a main road in Bangkok were shot at by protesters before dawn, and had fired back. Colonel Sansern Kaewkamnerd told a radio station that troops fired into the air first in response to tear gas and smoke bombs thrown at them by protesters but then fired real bullets.

Prime Minister Abhisit Vejjajiva declared a state of emergency in Bangkok on Sunday after red-shirted supporters of former prime minister Thaksin Shinawatra forced the cancellation of an Asian summit in the southern beach resort of Pattaya.

At the Din Daeng intersection, Bangkok's biggest, troops repeatedly charged groups of protesters to clear a major road leading out of the city as Thailand began celebrating its three-day New Year's holiday on Monday.

A Buddhist monk with a megaphone was standing in the intersection pleading for calm and telling the soldiers: "Don't shoot, think about your country."

Huge fires from the petrol bombs blazed in the streets, and ambulances and firetrucks were at the scene. Police on motorbikes were shuttling between troops and demonstrators in an apparent effort to mediate.

Sansern said troops roamed the area in vehicles with loudspeakers asking the "red shirts" to lift a blockade at the junction but they did not respond.

"We have instructions to fire into the air in order to scare away the protesters," he told Channel 3 television. More than 10 soldiers had been wounded, mostly by being hit by buses driven by the protesters, he said.

An official at the government emergency medical service told Reuters they had treated 50 people.

A sizeable number of protesters had been arrested, Sansern said.

One "red shirt" protester on a motorcycle holding a wooden stake said defiantly: "We won't go. We're doing this for the people."

HUMILIATED AT SUMMIT

Abhisit had threatened on Sunday to take tough action against protesters who then began gathering in force in Bangkok.

He had been humiliated before his Asian peers when Thaksin supporters bowled over riot troops at the summit in Pattaya and smashed their way into meeting venue. Some leaders had to flee by helicopter.

The canceled Asian summit and now the heightened tensions in the capital have undermined confidence in the government and dealt another blow to the economy, still reeling from political chaos last year and the global financial crisis, analysts said.

Troops fired into the air on Sunday when anti-government protesters stormed the interior ministry. The crowds mobbed the prime minister's car and beat it with clubs as he drove away from the ministry.

After declaring victory there, the "red shirt" Thaksin supporters gathered at Government House in central Bangkok. By Sunday evening they numbered around 40,000.

The protesters set up makeshift road blocks and men, some with sticks, manned the barricades. Near midnight, the crowd remained large, although some had begun trickling home.

Thaksin, who has been making nightly phone calls to his supporters from exile, said on Sunday it was now the "golden time" to rise up against the government.

He repeated his call for a "people's revolution" and said he was ready to move back to Thailand to lead a people's uprising if there was a coup.

Thailand has seen 18 coups since 1932 and another one is certainly a possibility if there is blood in the streets.

After midnight (1700 GMT), however, Abhisit appeared on television, flanked by army commanders, to dispel any talk of a possible military coup.

"I can confirm that the government and security agencies are still unified. You can see all the heads of the armed forces meeting with me right now," he said. The camera panned to the commanders of the army, navy, air force and deputy police chief.

Source: www.reuters.com/article/worldNews

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By Jeff Franks and Thomas Ferraro

HAVANA/WASHINGTON (Reuters) - Former Cuban leader Fidel Castro seemed alert and energetic on Tuesday in his first known talks with U.S. officials in years, and asked how to best help U.S. President Barack Obama normalize relations between their countries, U.S. lawmakers said.

"Of course, he has been ill. But I think we will agree that he was very healthy, very energetic, very clear thinking," said Representative Barbara Lee.

Lee, flanked by fellow members of the Congressional Black Caucus, made the comments at a news conference in Washington just hours after three of them met with Fidel Castro in Cuba.

These were the first known talks between U.S. officials and Fidel Castro, 82, since he underwent surgery in July 2006.

The full seven-member U.S. delegation met with President Raul Castro, who took over from his ailing brother last year.

The meetings took place at a time of possible change in hostile U.S.-Cuba relations, spurred by Obama's vow to move toward normalizing ties with the communist-ruled island, 90 miles from Florida.

The United States has maintained a trade embargo against Cuba since 1962. The U.S. policy of isolating Havana began soon after Fidel Castro took power in 1959.

Lee, who led the U.S. group, and the others in the delegation said Fidel Castro appeared eager to try to improve links between the countries.

"He was very well aware of what was going on," Representative Laura Richardson told the Washington news conference.

"As he leaned in, he looked directly into our eyes, quite aware of what was happening, and said to us 'how can we help President Obama?'"

News reports have said Obama will shortly lift restrictions on family travel and remittances between Cuba and the United States. The U.S. Congress is considering legislation that would eliminate a ban on Americans visiting Cuba.

HUMAN RIGHTS AND DEMOCRACY

Obama has said he would maintain the trade embargo until Cuba shows progress on human rights and democracy, which Lee said the delegation discussed only generally with the Cubans.

Representative Bobby Rush also attended the meeting with Fidel Castro, which was requested after the U.S. delegation arrived to talk with his brother and other Cuban leaders.

Lee said it seemed as if Fidel Castro, long seen as the power in Cuba, was now focused on writing and reflecting.

"I didn't get a sense that he was playing any role" in the Cuban government, Lee said after the news conference.

Members of the U.S. delegation, who held a lengthy meeting on Monday night with Raul Castro, said they were convinced the Cuban president wanted to end 50 years of hostility between the two countries.

Lee said the delegation brought a simple message to Washington after their five-day trip: "It's time to talk to Cuba. The moment is now."

But moving forward in U.S.-Cuban relations may be difficult in the face of opposition from some in the powerful Cuban-American exile community and their political allies who view the communist government in Havana with deep suspicion.

The meetings with the Castros "mean that the Cuban government took the delegation seriously and perhaps had some messages for it to carry back," said Cuba expert Phil Peters at the Lexington Institute in Washington.

But, Peters said, "It's too early to conclude that a big change in U.S. policy, or in U.S.-Cuba relations, is in the cards."

The talks with Raul Castro were front-page news in the ruling Communist Party's Granma newspaper on Tuesday, which said the discussion covered various topics "with emphasis on the possible future evolution of bilateral relations and economic ties."

Raul Castro, the article said, made clear Cuba's position that it was prepared to talk about anything with the United States, while insisting on "absolute respect" for independence and national sovereignty.

A column by Fidel Castro in the same newspaper on Monday said Cuba did not fear dialogue and praised U.S. Republican Senator Richard Lugar for urging engagement with Cuba.

Lee said the U.S. delegation would report to Obama and the State Department before the April 17 Summit of the Americas in Trinidad and Tobago, which Obama will attend.

Source: www.reuters.com/article/politicsNewsJustify Full

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Today at the ASEAN Secretariat, H.E. Dimitri Tsikouris, who has been appointed the Greek
Ambassador to ASEAN, presented his letter of appointment to Dr Surin Pitsuwan, Secretary-
General of ASEAN. Greece became the 8th Member State of the European Union (EU) to appointits Ambassador to ASEAN.

Dr Surin said, “We welcome the appointment of Ambassador Tsikouris and look foward to
working with him to expand ASEAN-Greece and ASEAN-EU relations.”

According to the ASEAN Charter, non-ASEAN countries may appoint and accredit Ambassadorsto ASEAN. As one of ASEAN’s Dialogue Partners, the European Union (EU) has announced thatall 27 member states will appoint Ambassadors to ASEAN.

Greece's appointment of an ambassador to ASEAN was preceded by Belgium, Czech Republic,Denmark, Finland, France, Germany, and the United Kingdom. The European Commission has also appointed its Ambassador to ASEAN.

Ambassador Tsikouris is concurrently the Ambassador of Greece to the Republic of Indonesia.

Source: www.asean.org

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By Jennifer Ablan and Daniel Burns

NEW YORK (Reuters) - The U.S. economy is in for a "lasting slowdown" and could face a Japanese-style period of relatively low growth with the added problem of high inflation, billionaire investor George Soros said on Monday.

Soros told Reuters Financial Television that rescuing U.S. banks could turn them into "zombies" that suck the lifeblood of the economy, prolonging the economic slowdown.

"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.

Most economists expect the U.S. economy to stop contracting in the third quarter and resume growing in the fourth quarter, according to a latest monthly poll of forecasts by Reuters.

The recovery will look like "an inverted square root sign," Soros said: "You hit bottom and you automatically rebound some, but then you don't come out of it in a V-shape recovery or anything like that. You settle down -- step down."

In the fourth quarter, the U.S. economy contracted at a 6.3 percent annualized rate, and economists think the first quarter's slide will be at least as severe, if not worse.

Healing the banking system, which is "basically insolvent," and housing markets is crucial to recovery, Soros said.

The public-private investment funds -- unveiled by the Treasury last month to get bad debts off bank balance sheets -- are going to work but won't be enough to recapitalize the banks so they are able to or willing to provide credit, he said.

Even a steep yield curve won't generate enough profits to keep the banks out of their vulnerable situation.

"What we have created now is a situation where the banks who will be able to earn their way out of a hole, but by doing that, they are going to weigh on the economy.

"Instead of stimulating the economy, they will draw the lifeblood, so to speak, of profits away from the real economy in order to keep themselves alive."

Soros, whose latest book, "The Crash of 2008 and What it Means," has made prescient calls during the credit crisis.

A year ago, he told Reuters that global losses were likely to top $1 trillion. U.S. and European banks have recorded more than $700 billion in losses and write-downs, as of February 5, 2009, according to Reuters data.

DOLLAR IS VULNERABLE

Soros said the "stress tests" of banks being conducted by Treasury, to determine their financial resilience, could be a precursor to a more successful recapitalization of the banks.

He also said the U.S. dollar is under selling pressure and one day could be replaced as a world reserve currency, possibly by the International Monetary Fund's Special Drawing Rights, a currency basket comprising dollars, euros, yen and sterling.

"I think the dollar is now under question and I think the system will need to be reformed, so that the United States will be subject to the same discipline as is imposed on other countries," said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992.

"Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end."

Soros said there was a risk of a "tipping point" for the dollar which would see it slump, triggering higher interest rates and choking growth.

"This leads you to what used to be stagflation -- stop, go. And I think that is what's probably in store, rather than... hyperinflation."

China recently proposed greater use of SDRs, possibly as an eventual global reserve currency.

"In the long run, having an international accounting unit rather than the dollar may, in fact, be to our advantage so we can't splurge -- you know, it felt very good for 25 years but now we are paying a very heavy price," Soros said.

U.S. consumer spending has to fall to 60 percent of gross domestic product, compared two-thirds now, he continued.

China will emerge first from recession, probably this year, and will lead global growth in 2010, Soros added.

World policymakers are "actually beginning to catch up" with the crisis and efforts to fix structural problems in the financial system, he said referring to last week's meeting of leaders of G20 countries.

Turning to Europe, the euro has been "a tremendous advantage" to countries that use it, adding there's "no question of a weaker country dropping out," Soros said.

More funds for the IMF will help it stabilize struggling Eastern Europe but the Baltic states still face "serious problems" and Ukraine is not far from default, he warned.

Widespread use of credit default swaps has worsened the risks for Europe, he said, though he added that Germany, the euro zone's biggest economy, is becoming more open to offering help. "Germany, which has been the most reserved about being the deep pocket of the rest of Europe, has recognized that it too has a responsibility toward the new member states."

Germany has been one of the most reluctant major economies to meet U.S. calls for more fiscal stimulus spending to boost the global economy and fight the financial crisis.

Source: www.reuters.com/article/newsOne

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By Matt Spetalnick and Ibon Villelabeitia

ANKARA (Reuters) - U.S. President Barack Obama told the Muslim world on Monday the United States was not at war with Islam, using his first international tour to try to repair America's damaged image abroad.

Obama hammered home his support for the creation of a Palestinian state, despite the recent election of a right-leaning government in Israel, in an effort to show he was serious about reaching out to Muslims.

"Let me say this as clearly as I can: The United States is not, and will never be, at war with Islam," he said in a wide-ranging speech to Turkey's parliament.

In his first trip as president to the Muslim world, which had accused his predecessor George W. Bush of bias in favor of Israel, Obama said: "The United States strongly supports the goal of two states, Israel and Palestine, living side by side in peace and security."

Chief Palestinian peace negotiator Saeb Erekat welcomed Obama's words, saying he had made a major commitment to the two-state solution. Israeli Prime Minister Benjamin Netanyahu's office said Israel was committed to reaching peace and would cooperate with the Obama administration to achieve that goal.

Obama is on the last leg of his first overseas trip as president. He is trying to rebuild ties with Muslims after anger at the invasion of Iraq and war in Afghanistan, made more urgent by a resurgent al Qaeda and Taliban insurgency in Afghanistan.

"Our partnership with the Muslim world is critical in rolling back a fringe ideology that people of all faiths reject," Obama said.

"But I also want to be clear that America's relationship with the Muslim world cannot and will not be based on opposition to al Qaeda. Far from it. We seek broad engagement based upon mutual interests and mutual respect. We will listen carefully, bridge misunderstanding, and seek common ground."

Obama's visit is a nod to Turkey's regional reach, economic power, diplomatic contacts and status as a secular democracy seeking European Union membership that has accommodated political Islam.

"Given Turkish activity and credibility in the wider region stretching from Afghanistan to the Middle East, passing over energy transit routes, Obama wants to give new blood to a real strategic partnership with Turkey," said Cengiz Candar, a leading Turkish commentator and Middle East expert.

ARMENIA BREAKTHROUGH?

NATO member Turkey is a transit route for U.S. troops and equipment going to Iraq as well as Afghanistan. As Washington reduces its troops in Iraq, Incirlik air base is expected to play a key role and Obama discussed this with Turkish leaders.

Obama urged the foreign ministers of Turkey and Armenia during a meeting later on Monday to complete talks aimed at restoring ties between the two neighbors, a U.S. official said.

Ankara and Yerevan are engaged in talks to end nearly a century of hostility, including reopening the border -- a move which could help shore up stability in the volatile Caucasus.

Touching on a highly sensitive subject, Obama told reporters he stood by his views on mass killings of Armenians by Ottoman Turks in 1915, which he has termed genocide, but said he expected a breakthrough in talks between Turkey and Armenia.

"I want to be as encouraging as possible around those negotiations which are moving forward and could bear fruit very quickly, very soon, so as a consequence what I want to do is not focus on my views right now," Obama said, trying to strike a balance over the issue while adding to pressure on the talks.

Turkey accepts that many Christian Armenians were killed by Ottoman Turks during World War One but denies that up to 1.5 million died as a result of systematic genocide.

MUSLIM AMERICANS

The U.S.-Turkish relationship suffered in 2003 when Ankara opposed the invasion of Iraq and refused to let U.S. troops deploy on its territory. Turkey has also criticized Washington for allowing Kurdish separatists to be based in northern Iraq.

Obama drew on his personal background to emphasize his conciliatory message to Muslims.

"The United States has been enriched by Muslim Americans. Many other Americans have Muslims in their family, or have lived in a Muslim-majority country. I know, because I am one of them," Obama said in his speech to parliament.

Obama also said he sought engagement with Iran, but added: "Iran's leaders must choose whether they will try to build a weapon or build a better future for their people."

Obama offered to improve cooperation in the fight against PKK separatist rebels and backed Turkey's troubled EU bid.

"Turkey's greatness lies in your ability to be at the center of things. This is not where East and West divide, it is where they come together," Obama said. (Additional reporting by Caren Bohan; Writing by Paul de Bendern and Ibon Villelabeitia; editing by Jon Boyle)

Source: www.reuters.com/article/politicsNews


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by

Fighting a heavy cold that has dogged him throughout his European tour, President Obama had turned in early for the night to get some rest before a big set-piece speech and a third international summit in four days.

His sleep, however, was interrupted. Shortly after 4.30am yesterday he was woken in his Prague hotel by his press secretary, who told him that North Korea had fired a long-range missile.

Although the launch was neither a surprise nor entirely successful, this was the first significant security test of his presidency, and the White House was determined that the world should know that he was treating it as such.

Aides gave briefings on how Mr Obama had spent the next few hours on the telephone to Robert Gates, the Defence Secretary, as well as to other military and intelligence chiefs. “Had we determined that this launch posed a threat to the United States of America,” his spokesman said, “we would have taken whatever steps were necessary to ensure the safety and security of the American people.”

Even as he dazzles Europe, inspiring vast crowds and offering disarmament talks with Russia one day, acknowledging past US arrogance the next, the White House is acutely aware that Republicans back home say that he is an innocent abroad who promises too much for too little in return.

Yesterday, only hours before he was due to deliver a speech on his vision of ridding the world of nuclear weapons for ever, North Korea had grabbed the global spotlight and — in the eyes of critics — demonstrated that any sign of weakness from America merely encouraged its enemies.

Yesterday morning, as he addressed more than 20,000 people from Prague Castle, the President declared “America’s commitment to seek the peace and security of a world without nuclear weapons”.

The United States — as the only nation to have used an atomic bomb — had a “moral responsibility” to remove the threat of mass destruction, he said. “I’m not naive. This goal will not be reached quickly — perhaps not in my lifetime. It will take patience and persistence. But now we . . . must ignore the voices who tell us that the world cannot change. We have to insist, ‘Yes, we can’.”

At the end the crowd surged forward to touch him, as they have across Europe in the past few days. Marek Prokes, 22, a student who shook Mr Obama by the hand, said: “For me it was amazing. He is a president who can make a change. It is not just an empty phrase.” Paul Ermite, 61, declared: “That was the greatest speech I have ever heard.”

Mr Obama’s appeal to idealism, however, serves to conceal the hard-headed pragmatism of his purpose. By using a mix of exhortation and humility he hopes to overcome some of the hurdles that have for so long stood in the way of concerted international action, be it on nuclear proliferation, the economy, the war in Afghanistan or even climate change, which he later discussed at an EU-US summit.

The speech contained some important caveats, not least because much of his Czech audience is gazing anxiously at Russia’s efforts to reassert dominance over the “sphere of influence” in Eastern Europe that it once controlled with an iron fist. Mr Obama said: “Make no mistake: as long as these weapons exist, we will maintain a safe, secure and effective arsenal to deter any adversary, and guarantee that defence to our allies.”

He added that the continued threat from Iran, as well as the North Korean test launch, underlined the need for the missile shield that the US, much to the dismay of Moscow, plans to base in the Czech Republic and Poland.

Yet the main thrust of Mr Obama’s nuclear disarmament initiative shows that he is intent on building bridges with Russia, China and, to a lesser extent, European countries such as Germany, which have balked at past American efforts to stop rogue states acquiring such weapons.

Gary Samore, the President’s arms control co-ordinator, said that the US was seeking “the moral high ground” so that other countries could no longer accuse it of double standards.

Mr Obama promised that he would seek immediate ratification of the Comprehensive Nuclear Test-Ban Treaty, which the Senate has blocked previously.

In addition to the negotiations that he announced in London for a deal to cut the number of warheads held by Russia and America, he suggested yesterday that he may provide the Nuclear Non-Proliferation Treaty with the authority that it has lacked.

Mr Obama spoke of the Velvet Revolution in which the Czechs had overthrown communism without a shot being fired. He said: “It proved that moral leadership is more powerful than any weapon.”

Later he met Vaclav Havel, the playwright who inspired that movement and became his country’s first leader after the Iron Curtain fell. Mr Havel warned Mr Obama to “be careful” because he knew how idealistic hope could turn to anger. The President replied with a rueful laugh.

Source: www.timesonline.co.uk

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The ASEAN Global Dialogue, co-hosted by the Ministry of Foreign Affairs of the Royal Thai Government and the ASEAN Secretariat, will be held on 12 April 2009 at the Centara Grand & Bangkok Convention Centre in Bangkok, Thailand. The Prime Minister of Thailand, H.E. Abhisit Vejjajiva, will deliver the opening remarks at the event.

The ASEAN Global Dialogue is the first of its kind in Southeast Asia, bringing together leaders and key decision-makers from the ASEAN and East Asia countries and key international organisations, to discuss the pertinent challenges that the world is facing with now - the global financial meltdown and its destructive consequences; climate change; international conflicts and tensions; and food and energy security among others – and how the region can contribute to the search for solutions to these challenges.

Leaders from key international organisations who are taking part in the panel are: Haruhito Kuroda of the Asian Development Bank; Dominique Strauss-Kahn of the International Monetary Fund; Ban Ki Moon of the United Nations; Supachai Panitchpakdi of UNCTAD; Robert Zoellick of the World Bank; and Pascal Lamy of the World Trade Organization. The panel and dialogue will be moderated by Dr Surin Pitsuwan, Secretary-General of ASEAN.

This will be the first major event in Asia following the G20 Summit in London.

The members of the audience will include key decision-makers from the governments, business community, diplomatic corp, civil society, media, academic institutions and parliamentarians in the ASEAN region. For further enquiries, please contact: enquiriesagd@gmail.com

Source: www.asean.org

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by Andrew Willis

EUOBSERVER / LONDON – World leaders mixed hubris and humility on Thursday evening (2 April) as they sought to highlight the achievements of the G20 meeting of industrial nations, while admitting much still needs to be done to restore the world's economy.

"By any measure the London summit was historic," said United States President Barack Obama, adding that he had come to the meeting with the intention of listening and learning but also to provide American leadership.

British prime minister and chair of the event Gordon Brown declared: "The old Washington consensus is over, today we have reached a new consensus to take global action together to deal with the problems we face."

Later, Mr Obama agreed that the era of the lightly regulated market was indeed over, saying free markets could go "off the rails" if not properly controlled.

The International Monetary Fund was the day's main winner hands down. Showered with new resources and new tasks, its importance is set to grow in the coming years.

" Today you get the proof that the IMF is back," said its managing-director Dominique Strauss-Kahn.

Leaders agreed to triple the organisation's main lending facility from its current level of $250 billion (€186 billion) to $750 billion and will allow it to create a new Special Drawing Rights (SDR) allocation, essentially an overdraft facility, of $250 billion, with which to boost global liquidity.

The new SDR facility was one of the few concrete measures provided as a specific step to boost the world's economy rather than to help financial fire-fighting.

The new donations to the IMF, if and when they materialise, will mean the body wields a substantial $1.1 trillion chequebook with which to tackle the world's financial problems.

Added to this, $100 billion of additional lending will be made available to multilateral development banks in general.

A further sum of approximately $6 billion will be raised from the partial sell-off of the IMF's gold reserves, with the money going to help the world's poorest countries.

Sceptics were quick to point out however that some of the money had already been pledged in previous announcements and the exact breakdown of where the rest will come from remains unclear.

Mr Brown said China had agreed to provide $40 billion, possibly through the purchase of new IMF bonds.

China and a number of other emerging economies have made it clear in recent weeks that they expect the IMF's governance system to be reformed if they are to start making increasing donations.

While the group's communique says leaders are "determined to reform and modernise the international institutions," little change to the fund's voting rights is likely to take place before 2011, a date agreed by G20 finance ministers last month.

In its increased regulatory capacity, leaders agreed that the IMF should co-operate with the Financial Stability Forum, to be renamed the Financial Stability Board, in providing early warnings on the risks faced by the world's financial system and also propose suitable actions to meet these risks.

Added to this new macro-prudential role, the IMF will also monitor whether states have implemented new rules on financial regulation that include greater oversight of hedge funds.

Tax havens and trade

Leaders agreed to tone down language regarding a new OECD list of tax havens published on Thursday.

Rather than including the final list in the communique, leaders said they "took note" of the list and insisted they "stand ready to deploy sanctions to protect our public finances."

China is thought to have objected to the list's inclusion in the G20 communique because of sensitivities over Hong Kong and Macao.

G20 leaders repeated their pledge of last November to reject protectionism, despite a World Bank report since then which says 17 of the 20 states had increased trade barriers of one kind or another.

However they agreed that $250 billion would be donated to trade finance in a bid to unblock trade channels that are currently suffering from a lack of credit.

"Today's meeting will not solve the crisis but we have begun the process by which it will be solved," said Mr Brown.

The G20 looks set to meet again this summer or autumn.

Source: www.euobserver.com

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by Leigh Phillips

EUOBSERVER / LONDON - Amidst the tens of thousands of activists of various stripes targeting London's financial district as the G20 summit opened on Wednesday (1 April), one of the more colourful contingents of mostly youthful activists set up a 'Climate Camp' outside the European Climate Exchange, saying the same free-wheeling financial system that has led to the current economic crisis will not be able to save the planet from the climate crisis.

While outside the Bank of England a motley crowd tussled with police and a handful stormed a Royal Bank of Scotland office, resulting in 63 arrests, according to authorities, and elsewhere in the British capital peace campaigners voiced their opposition to the war in Afghanistan and the Israeli occupation of Palestinian territories, in this particular corner of London for some 2,000 students, academics and environmental campaigners, the centrepiece of the EU's climate change strategy, the Emissions Trading Scheme, was their key target during the G20 meeting.

The exchange, or ECX, is a pan-European platform for carbon emissions trading, whose buying and selling of contracts based on EU Allowances (EUAs) attracts some 80 percent of the exchange-traded volume in the European market.

At 12:30 on the dot, dozens of protester 'affinity groups' swooped in on Bishopsgate, home to the exchange, rapidly pitching a flock of stake-less green and blue pup tents, filling the street. Hanging colourful bunting across the street and affixing green and anti-capitalist posters and banners to building walls with red and yellow fake 'police line' tape that instead declared "capitalism means war," the protesters had control of the road within minutes.

A carnival atmosphere emerged with the plentiful sun and sudden appearance of brass bands and campers singing in the round. Two women dressed as mermaids held placards warning of rising sea-levels while others were partially successful in holding workshops on the science and politics of climate over bullhorns not loud enough to penetrate the din from the cheerful ruckus and the drone of the helicopters overhead.

In front of one tent, draped in a Bolivian flag, was placed something of a welcome mat, bearing the nigh-on ubiquitous visage of revolutionary Che Guevara and Evo Morales, the land-locked South American country's socialist president, quoting his anti-capitalist warning: "Under capitalism, Mother Earth doesn't exist: We are not human beings, but consumers."

A few metres away from the Bolivian tent meanwhile, beneath a banner demanding "Farmers' markets, not carbon markets," some climate camp activists dressed in tweed vests, green wellington boots and cloth caps in the English gentleman-farmer fashion had set out a stall with locally grown organic carrots, apples and freshly baked vegan cakes.

'Turning the atmosphere into a commodity'

Ian Duff, an organiser with the Climate Camp explained the pun while decrying the EU's ETS.

"Carbon markets employ the same processes, the same system that has resulted in the current economic crisis, and if governments embrace the ETS as a model, we will see the same situation, the same sort of collapse with carbon credits," he said.

"Carbon trading creates a commodity out of the atmosphere and leaves it to the same bankers that have created this mess to trade our way out of climate change."

"It is up to the market to set the price of carbon, which, with the economic slump, has plunged from around €30 a ton to just €10, which is not sending the price signal we need for industry to begin changing its ways."

Instead of providing a market incentive to reduce carbon output, emissions credits, most of which have been allocated for free, now provide a source of revenue for companies, he argued.

Moreover, carbon markets require that a single commodity - the equivalent of a ton of carbon - is universally exchangeable. But greenhouse gases are in the real world are produced in a variety of ways and have effects on the climate far more complex than this "imagined" tradable commodity. Not all tons of greenhouse gas emissions are the same, so they require regulation tailored to different industries rather than a market "oversimplification," he explained.

This oversimplification at the same time is then complicated by traders as carbon markets become as abstruse and tangled as the obscure world of derivatives, sub-prime mortgages, credit default swaps and other complex financial products, with carbon credits sliced and diced in a similar fashion.

"We've seen how these people cannot be relied upon to look after the economy, so we can't trust them to look after the planet," he said.

Instead of looking for market-based or technical fixes, global leaders need to begin shepherding society through more substantial economic changes.

"Farmers' markets are one aspect of a more sustainable economy," he said. "It's a half-serious joke rather than serious preaching, but about the sort of system-wide change we need to combat global warming, rather than the false solution offered by carbon markets."

‘Protesting doesn't get rid of the bankers'

Right next to the climate campers, a group of construction workers on a tea break watching the ruckus were split over the protesters. While trade unionists and farmers have played a prominent role in the demonstrations, strikes and wider unrest in other EU countries, in the UK, such protests as the climate camp and at the Bank of England have remained largely the preserve of youthful activists and NGOs.

Lester, a middle-aged man, did not think much of the demonstration at first: "They would do a better job if they were working. It's just a day off isn't it? If I'd a day off, I would've gone fishing. No time for this lark."

Asked what he thought of economic crisis, however, he said he did not have much time for the financial world either: "The bankers have destroyed this country, brought it to its knees. None of them should have been bailed out."

His co-worker, Philip, slightly younger than his friend, then piped up that he would be at the protest himself if he were not at work. "It's fantastic. We need more protests like this. In fact, there should be more people here. I don't know why there aren't."

Lester then thought twice about what he had said a moment earlier: "What I mean is, it's not going to change anything is it? It's not going to work. Just protesting doesn't get rid of these guys, does it?"

A few streets over, a more hardened crowd of anarchists and anti-globalisation protesters did indeed engage in more militant actions.

Mid-morning, demonstrators smashed the windows of an RBS office and chucked out into the street a stream of computers, filing cabinets and other office equipment before the bank was stormed by riot police with dogs.

For the most part, however, the convergence of protesters on Threadneedle Street and the surrounding roads - sealed in by riot police - maintained a peaceful, festival atmosphere, with jugglers, the dreadlocked and the heavily tattooed basking in the April sun.

A statue of the Duke of Wellington now sported a black anarchist flag, a skull on a stick and a banner calling for "worldwide direct action against homelessness".

An Osama bin Laden look-a-like busker sung "Sweet Home Al-Qaeda" in front of a placard that read "Quantititavely ease me". He joked with the crowd that the economic crisis had been tough for terrorism too. "We've had to let go 40 jihadists this week alone," he lamented.

Elsewhere, 11 protesters who had brought their own tank to the demo were arrested for being dressed as police and had their armoured but unarmed vehicle impounded.

Anarchists in Starbucks

While many shops and cafes were closed or even boarded up, surprisingly, a Starbucks, long-time target of anti-globalisation protesters since the famous ‘Battle in Seattle' almost a decade ago, remained open. More surprising still, not a few anarchists popped in throughout the day for snacks, drinks and the toilet. One young man dressed as Death, complete with a black hood and cape, bought a lollipop and a yoghurt smoothie.

Students engaging in a sit-down in the street complained that they were baton-charged by police, but otherwise, apart from reaction to the attack on the bank and the sealing off roads and steady, tightening advance of police - a process known as ‘kettling' - the 5,000 police drawn from across the country took a largely hands-off approach until the mid-afternoon, when protesters at the Bank of England pushed through police lines. Military police soon filed in, containing the situation.

However, late in the evening, officers moved in to break up the climate camp as well, provoking running battles in the neighbouring streets that eventually petered out around 1 am.

Source: www.euobserver.com

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by Andrew Willis

EUOBSERVER / LONDON - Leaders of the G20 industrial nations finished breakfast on Thursday (2 April) morning at London's Excel Centre and began the final phase of tough negotiations on how to reform the International Monetary Fund (IMF) and boost its resources.

"You need to appoint someone democratically at the IMF," said Irish campaigner and former pop singer Pop Geldof on the summit's sidelines.

Mr Geldof, who for many years has put pressure on Western leaders to increase aid to developing countries, said the days of European and American domination of the world's multilateral lenders, such as the IMF and the World Bank, have to come to an end.

He added that leaders must live up to aid commitments given at the 2005 G8 meeting held at Gleneagles in Scotland at which they promised to increase aid by $50 billion (€37 bilion) annually by 2010.

G20 leaders are currently negotiating the exact amount of new funding to be handed to the IMF, following an agreement by G20 finance ministers on 14 March to make a "substantial increase."

Last month the US surprised the world by saying the fund's resources should be tripled to $700 billion (€524 billion).

UK financial secretary to the treasury Stephen Timms told reporters on Thursday at the summit that he was confident G20 leaders would agree on a final figure for the summit's communique.

"We are certainly looking at a doubling," he said. "We will have a figure by the end of the day."

Douglas Alexander, the UK's secretary of state for international development, told reporters that the partial sale of the IMF's sizeable gold reserves was being considered as a means to supplement the fund's lending capacity.

Beyond stigma

He added that past hang-ups associated with seeking a loan from the IMF were disappearing rapidly and he welcomed Mexico's announcement on Wednesday to apply for a $47 billion credit line.

"The new facility that Mexico is taking advantage of shows we have gone beyond the era of stigma," said Mr Timms.

Mexico's move is significant, as it marks the first time a Latin American country has applied for a loan from the Washington-based multilateral lender since it fell out of favour with the region in the 1990s.

Mr Timms also said that leaders were discussing ways to fight the growing threat of rising protectionism since the onset of the financial crisis, suggesting the final communique would contain measures to "name and shame" states implementing new trade barriers.

He was confident that the Doha round of global trade negotiations could be completed this year saying he felt there was an imminent "window of opportunity."

Tax-havens are also firmly on the agenda of Thursday's meeting.

Mr Timms indicated that leaders would agree on a system of sanctions for those states that refused to share banking information, adding that the list of states to receive such sanctions would be produced in "due course."

Source: www.euobserver.com

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Malaysia's king has accepted the resignation of Prime Minister Abdullah Badawi, paving the way for his deputy Najib Razak to take over.

Mr Abdullah had been under pressure to resign since his Umno party suffered its worst ever poll results a year ago.

The party, in power since independence in 1957, faces internal divisions as well as a strong opposition challenge.

Mr Najib has already taken over as Umno leader, and is due to become prime minister on Friday.

Correspondents say Abdullah Badawi will be remembered for allowing more public freedom than his predecessor, Mahathir Mohamad.

But he was seen as failing to fulfil his promises to eradicate corruption, reform the judiciary and strengthen the police and civil service.

Warning to party

Last week, Mr Abdullah gave a strongly worded warning to the party congress.

He said Umno (the United Malays National Organisation) would perish unless it stopped suppressing dissent, jailing opponents and discriminating against Malaysia's minority Chinese and Indian communities.

Mr Najib told the BBC last year he would do more to address the grievances of minority groups.

Anger has been growing over laws that favour the Malay majority in business and education.

In the general election of last March, the ruling coalition lost its two-thirds majority in parliament.

However it did get 139 MPs in the 222-seat body, giving it a simple majority.

Mr Najib is expected to take over as prime minister on Friday.

He has described allegations concerning the murder of a Mongolian woman, Altantuya Shaariibuu, as "malicious baseless lies".

Two policemen who used to be in his protection team are on trial for the killing of the 28-year-old, while one of Mr Najib's senior aides admitted having an affair with the woman.

Ms Shaariibuu reportedly accompanied Mr Najib as a translator when he, as defence minister, negotiated a controversial submarine deal in France in 2002. Mr Najib denies ever meeting Ms Shaariibuu.

Source: news.bbc.co.uk

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by Leigh Phillips

EUOBSERVER / BRUSSELS - Despite considerable advances in recent years, the social situation for gays, lesbians, bisexuals, transsexuals and transgendered (LGBT) people throughout the European Union remains a problem, particularly in the east, according to a major new survey.

Discrimination, bullying, harassment and attacks occur across the EU. Politicians in a number of eastern member states seem to side with or turn a blind eye to perpetrators, while the ability of victims to report crimes is undermined by lack of police training, leading to significant underreporting, according to a 160-page report on the social aspects of homophobia from the EU's Fundamental Rights Agency.

Even in those member states where attitudes are more tolerant and anti-discrimination laws stricter, there are areas where homophobia is more prevalent, such as in secondary schools and within sports culture, the study says.

Moreover, while most attackers are young men, often in groups, there is a worrying incidence of attacks from the far-right and ethnic minorities.

In June 2007 the European Parliament asked the Fundamental Rights Agency to develop a comprehensive, comparative report on the situation regarding homophobia and discrimination based on sexual orientation. In June last year, the first part of the report, on the legal situation for LGBT people in the EU was published, and on Tuesday (31 March), the second part, on the social situation is to be released.

The paper finds that major differences between member states exist regarding public opinion towards gays and lesbians. Citing a range of data and surveys, the report notes that while the overwhelming majority of Dutch people - 82 percent - as well as strong majorities in Sweden (71%) and Denmark (69%) are in favour of same-sex marriage, this drops to 14 percent in Cyprus, 12 percent in Latvia and 11 percent in Romania at the other end of the scale.

Additionally, while in the Netherlands 91 percent of the population feels comfortable with having a homosexual as a neighbour, in Romania only 36 percent of people are of the same opinion.

The attitudes of politicians vary widely as well, in particular in the case of the right to freedom of assembly. Pride parades and human rights demonstrations have been obstructed in a number of member states either by public authorities or by "counter-demonstrator" attacks. Such incidents were reported in five member states (Bulgaria, Estonia, Latvia, Poland and Romania).

In these, and in six additional Member States (Bulgaria, Czech Republic, Cyprus, Hungary, Italy and Malta), calls for improving the rights of LGBT people "have invariably been met with negative responses from some politicians and representatives of religious institutions or groups."

Such marches have been met with bans or administrative impediments notably in Estonia, Latvia, Lithuania, Poland, Romania and Bulgaria, while in some member states, public authorities have not been able, or willing, to ensure the safety of participants in LGBT demonstrations from attacks by counter-demonstrators. Within the last five years attacks of this kind have occurred in Sweden, Estonia, Latvia, Poland, Czech Republic, Hungary, Italy, Romania and Bulgaria. Such incidents were often accompanied by homophobic public statements or hate speech from political leaders.

The report contrasts this situation with that in other, mainly western member states, recording that LGBT organisations celebrate pride events often with the participation of government ministers, political parties, and, in some cases, religious organisations, notably in the Netherlands, Austria, Sweden, Spain, and France.

Asylum deficit'

Meanwhile, across Europe, refugees seeking asylum from persecution in countries beyond the EU because of their sexual orientation or gender identity are often not believed or simply rejected, even if in the country from which they fled homosexuality is a crime.

There are significant differences in the social situation of LGBT people within member states as well, not just amongst them. Older people, men and the less educated tend to have more negative attitudes, and people across the board tend to react more negatively toward the idea of gays and lesbians caring for or teaching children or as close relatives than they do to the idea of them as friends or doctors. Young people meanwhile are the most affected by hate crimes and bullying, and lesbian and bisexual women are more likely to experience sexual assaults or assaults in private settings than gay or bisexual men.

One Polish woman quoted anonymously by the report said: "A group of young people from my town have harassed me many times to 'persuade' me that there is no place for lesbians here. They've assaulted me verbally and physically. Once, I was beaten, too. They threatened that they would rape me to show how good it is to be with a man, because I need a man."

Attitudes towards transgendered people are significantly more negative compared to attitudes towards lesbians, gay men and bisexuals.

The perpetrators are usually young men in groups. In recent years there have been several accounts of deadly assaults on transgender persons, and there are several examples of extreme right-wing groups harassing or attacking people, including incidents in Sweden, Poland, Estonia and Italy.

More sensitively, victim accounts sometimes identify ethnic minorities as perpetrators of anti-LGBT violence, the report says. Quoting a Dutch survey on Amsterdam, young men of Moroccan origin were over-represented as suspects of anti-gay violence.

Islam not to blame

However, these perpetrators of anti-gay violence are not inspired by religious beliefs, says the report, citing the Dutch survey. "Those ... who are Muslim have only a superficial knowledge of the Koran and rarely go to mosque. The motives of the Moroccan perpetrators are almost the same as those of the indigenous Dutch perpetrators: views and emotions regarding sex and gender ...Their over-representation is due to the street culture of the areas where many Moroccan boys live."

The report also warns that most member states lack the necessary tools for reporting attacks to the police, such as self-reporting forms or third party and assisted reporting. Police officers are not adequately trained to identify and deal with hate crime.

Finally, the report finds there to be "significant challenges" in the realm of sport, with homophobia expressed in different ways, both in fan culture and among athletes, and homophobic language is used to ridicule opponents or referees. Sporting associations, it laments, have only a limited focus on placing homophobia on the anti-discrimination agenda especially compared to otherwise quite robust efforts to tackle racism in sport.

Source: www.euobserver.com

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by Andrew Willis

A wave of economic bad news buffeted Europe on Monday (30 March), with European Central Bank president Jean-Claude Trichet saying he expected falling growth in each quarter of 2009.

"Latest information suggests economic activity has deteriorated further in the first quarter of 2009. Looking ahead, we expect demand to remain very weak throughout 2009, both at the global level and in the euro area," Mr Trichet told MEPs in Brussels.

A gradual recovery is now not predicted before 2010, while several European economies may have to wait until 2011 or later for signs of an upturn.

Rating agency Standard and Poors cut Ireland's top credit rating on Monday from AAA to AA+, making it more expensive for the government of the western isle to borrow money at a time when tax receipts have plummeted. The country is expected to borrow as much as €25 billion this year to plug the shortfall.

"This is bad news for Ireland at a very bad time. Standard & Poor's decision to downgrade Ireland's credit rating will make it even harder for the economy to recover," said Richard Bruton, the opposition spokesman on finance, reports Bloomberg.

S&P downgraded ratings for Spain, Portugal and Greece in January.

Spanish deflationary fears

Addressing the economy committee on Monday, Mr Trichet told MEPs that inflationary pressures "have diminished further."

"Looking ahead, we expect the inflation rate to remain well below two percent for this year and 2010," he said, but ruled out the prospect of deflation for the euro area as a whole.

However, for a number of individual countries the threat of deflation remains very real.

In Spain, the National Statistics Institute said on Monday that month on month inflation for March had fallen by 0.1 percent, marking the first time prices have fallen since the current measuring system began in 1997.

Dropping prices can convince shoppers to postpone purchases as they anticipate further falls, driving down consumption while at the same time increasing the real value of debt.

Deflation is also a concern in Ireland and the UK.

Fall in European economic confidence

On Monday, the European Commission reported that consumer and business confidence slumped to a record low in March.

The EU executive said its economic sentiment indicator for the euro area fell to 64.6 points in March, down from 65.3 points in February. This new level marks the lowest point ever recorded since the survey began in 1985.

For the EU27, the index fell to 60.3 points from 60.9, marking a slower rate of decline following a number of sharp drops since September 2008 when the US bank Lehman Brothers collapsed.

OECD warns of huge job losses

While many thousands have already lost jobs in Europe since the onset of the financial crisis, economists and unions warn that there is a natural time-lag before falling production is converted into job losses, indicating that the worst may still be to come.

A new report to be published on Tuesday (31 March) by the Organisation for Economic Co-operation and Development forecasts that unemployment rates will approach 10% in the OECD area by 2010, compared with the recent low of 5.6 percent in 2007.

If proven to be accurate, the numbers of unemployed in the OECD area will rise by about 25 million, by far the largest and most rapid increase in OECD unemployment in the post-war period.

"Governments need to take quick and decisive action to avoid the financial crisis becoming a fully-blown social crisis," OECD secretary-general Angel Gurria told G8 Labour and Employment Ministers in Rome on Monday.

The ECB is aware of this need for action, making a euro area interest rate cut from the current 1.5 per cent level highly likely when the board meets this Thursday. An announcement on a new policy to buy corporate bonds may also be included.

Source: www.euobserver.com

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