Tens of thousands in London march against austerity, Cameron over Panama Papers

LONDON, United Kingdom - Tens of thousands of people marched through London on Saturday in protest against government spending cuts, with some activists demanding Prime Minister David Cameron's resignation over his family's offshore finances.

Demonstrators converged on Trafalgar Square calling for more investment in the health service, housing, education, and public sector pay, while some held up banners saying "Ditch Dodgy Dave" and "Cameron Must Go -- Tories Out!"

The protest, which also included demands to protect Britain's troubled steel industry, was planned long before Cameron's admission last week that he once held shares in his late father's offshore investment fund.

But The People's Assembly, which helped organize the trade union-backed march, said the revelations sparked by the so-called Panama Papers "prove that this is a government for the privileged few."

Cameron took the unprecedented step of releasing a summary of his tax returns for the past six years, but a new poll published late Saturday found 52 percent of voters believe he has not been "honest and open" about his finances.

A further 44 percent said his handling of his financial affairs was "morally repugnant," according to the ComRes survey for the Independent and the Sunday Mirror newspaper.

"For somebody in that position, you have a duty of care to the people of the country to be very open, very transparent," demonstrator Sarah Henney told AFP.

"Just because something is legal doesn't always make it right."

Opposition Labor finance spokesman John McDonnell was among a number of political figures who addressed the protesters, and he called for an end to the spending cuts introduced after the global financial crisis.

He later told the Press Association news agency: "I think Cameron should go, but I think he should take his party with him.

"His government is now bankrupt in terms of political ideas, and bankrupt in terms of what they have done with the economy as well."

Cameron, who was re-elected last year with a parliamentary majority, said he sold his shares in his late father's offshore investment fund before taking office, and denied the fund had been established to avoid tax.

But the row put the premier under pressure at a difficult time, as he seeks to manage an increasingly bitter fight within his Conservative party over the upcoming referendum on EU membership.

Some 128 of the 330 Conservative lawmakers in parliament and several of Cameron's own ministers are campaigning against him in favor of leaving the European Union ahead of the June 23 vote.

Veteran Tory MP Ken Clarke warned Saturday that if Cameron loses the referendum, he will be forced out of office.

source: interaksyon.com

Obama orders $85-billion spending cuts, blames Republicans

WASHINGTON - President Barack Obama has reluctantly ordered an $85-billion austerity drive that could slow the US economy and slash jobs, after blaming Republicans for refusing to stop the "dumb" spending cuts.

Obama complied with his legal obligations and initiated the automatic, across-the-board cuts in domestic and defense spending Friday, following the failure of efforts to clinch a deal with Republicans on cutting the deficit.

The president signed an order bringing the arbitrary cuts into force, saying they should be made in "strict accordance" to US law, and a report by his Office of Management and Budget (OMB) detailing the cuts to each agency.

The measures could mean long lines at US border posts, reduced military readiness, cuts to special needs education programs, and will trim the resources of some emergency services, according to White House officials.

Obama had earlier blamed the austerity time bomb on Republicans, who refused to close tax loopholes for the rich and corporations combined with more targeted spending cuts, in his "balanced" approach to deficit reduction.

"I am not a dictator. I'm the president," Obama said, warning he could not force his Republican foes to "do the right thing," or make the Secret Service barricade Republicans leaders in a room until a deal is done.

"These cuts will hurt our economy, will cost us jobs and to set it right both sides need to be able to compromise," Obama said, before decrying the budget trimming as "dumb" and "unnecessary."

Only three months after winning re-election, and with the extent of his authority in Washington again constrained, Obama bemoaned his inability to do a "Jedi mind-meld" to get Republicans to change their minds, using imagery from Star Wars and Star Trek.

Obama was bound by law to initiate the automatic, indiscriminate cuts, which could wound the already fragile economy, cost a million jobs and harm military readiness, by the end of Friday.

The hit to military and domestic spending, known as the sequester, was never supposed to happen, but was rather a device seen as so punishing that rival lawmakers would be forced to find a better compromise to cut the deficit.

Both sides agree that the sequester is a blunt instrument to cut spending, as it does not distinguish between essential and wasteful programs -- in what Obama has branded a "meat-cleaver" approach.

New Defense Secretary Chuck Hagel warned that the sequester could endanger the military's capacity to conduct its missions.

"Let me make it clear that this uncertainty puts at risk our ability to effectively all of our missions," said Hagel. The Pentagon's budget is set to be slashed by roughly $46 billion.

The president appeared irritated but combative as he spoke to reporters after meeting with his chief foes -- House Speaker John Boehner and Senate Republican Minority Leader Mitch McConnell -- and allies Democratic Senate Majority Leader Harry Reid and top House Democrat Nancy Pelosi in the Oval Office.

Boehner emerged from the talks to signal to reporters that Republicans would not budge on Obama's key demand for a deal that would raise tax revenues.

"Let's make it clear that the president got his tax hikes on January 1. This discussion about revenue in my view is over," Boehner said.

"It is about taking on the spending problem in Washington."

Even Obama's defeated election rival Mitt Romney got in on the action, slamming the president in a rare interview, complaining he was "blaming and pointing" at Republicans and not leading the country.

In the report to government agencies, the OMB said non-exempt defense programs would be cut by 13 percent this year and domestic programs would be sliced by nine percent.

In cash terms, reductions for the military amount to just over $42 billion, with a similar sum coming from non-defense related spending.

OMB Director Jeffrey Zients told Boehner in a letter accompanying the report that the cuts would be "deeply destructive to national security, domestic investments, and core government functions."

The political stalemate is likely to be prolonged, as the president's tactics are based on a strategy of pinning blame on Republicans for the pain of the sequester, which may take weeks to become evident.

The next point of leverage is likely a bill to fund government operations, which Congress must pass by March 27, or see the government shut down.

Both sides indicated that they would seek to avoid that scenario, meaning that the sequester cuts may remain in place -- unless a way can be found to make equal spending reductions that are less punitive.

Although the cuts trim domestic and defense spending, they do not touch entitlements -- social programs like Medicare health care for the elderly and pension schemes.

Many budget experts say that only cuts to those programs will be able to restore the prospect of long-term fiscal stability.

source: interaksyon.com

Spain recession deepens as austerity weighs

MADRID - Spain's economy shrank further in the second quarter of the year and a slump in domestic spending accelerated, signaling a protracted recession as the country presses on with efforts to slash its public deficit.

Gross domestic product fell by 0.4 percent in the second quarter of the year, according to final data that confirmed a preliminary reading. But on an annual basis it dropped by 1.3 percent, worse than initial estimates of 1.0 percent.

Spain's economy fell back into recession in the first quarter of the year, when output fell 0.3 percent, and government estimates show GDP will probably fall for this year and next year as it pushes through further measures aimed at slashing a bloated deficit.

The data came a day after Spain said its economy performed less well than expected in both of the last two years.

On Tuesday, the National Statistics Institute, INE, also revised down 2011 fourth quarter GDP to -0.5 percent from -0.3 percent.

Close to record high borrowing costs and an economy showing little sign of picking up any time soon is nudging Spain closer to calling for a European bailout, which analysts say is only a matter of time.

"With much more fiscal austerity in the pipeline and unemployment at astronomic highs, the risks are clearly tilted towards a more protracted recession," said Martin van Vliet, economist at ING.

He expected Spain to make a formal request for additional external financing in mid-September or October. Spain has already negotiated up to 100 billion euros in aid for its ailing banks.

Tuesday's data showed exports provided a degree of support for the economy, growing by 3.3 percent year-on-year in the second quarter. That compared with a fall of 3.9 percent in national demand, after a revised fall of 3.2 percent in the first quarter.

Spain's government is hoping that exports will put the economy on the road to recovery. But a slowdown in the wider euro zone, where most of the country's goods are shipped, could test that theory.

The country desperately needs to stimulate growth to help it meet the public deficit targets agreed with the European Union.

source: interaksyon.com

World No. 2 Coke Bottler Profit Hit by Austerity, Costs

ATHENS (Reuters) - Coca-Cola Hellenic (CCH), the world's second-largest bottler of Coca-Cola Co. soft drinks, shed 25 percent of profit in the first half as expected, hurt by austerity in debt-laden Italy, Ireland and Greece and higher commodity costs.

The Athens-based company with operations in 27 countries including Russia and Nigeria said comparable net income was 109 million euros (85 million pounds), against the average of 110.1 million euros forecast in a Reuters poll of analysts.

EU-IMF austerity measures have caused sales volumes to drop in Greece and Ireland as well as Italy, where the government is also curbing spending to cope with higher borrowing costs.

But the firm stuck to its guidance for free cash flow generation and investments of 1.45 billion euros by the end of 2014.

Chief Executive Dimitris Lois is betting on potential growth in markets such as Russia. The company also sees Italy as a long-term growth market, Lois said, praising the government there for making all the right moves to deal with a debt crisis.

"We are very happy to see the initiatives from (Italian Prime Minister Mario) Monti," Lois told Reuters. "He has taken the right initiatives to balance austerity and growth," he added, referring specifically to his decision to postpone an increase in value-added-tax (VAT) rates.

CCH's total sales volumes dropped by 2 percent year-on-year to 1.01 billion cases. But sales rose for a fourth consecutive quarter by 1 percent to 3.43 billion euros.

The company took commercial and marketing initiatives, such as more creative packaging to squeeze more sales out of each case sold, Lois said. It has also been expanding for years into non-sparkling beverages such as tea and health drinks.

These moves helped the company maintain or increase its market volume share in sparkling beverages in most of its markets, including Italy, Switzerland, Austria, Russia, Ukraine, Romania and Bulgaria.

Some analysts, however, remain sceptical.

"The company will face adverse conditions in some basic markets under IMF programmes, such as Ukraine, Hungary and Greece," said Iakovos Kourtesis, an analyst with National Securities who earlier this month downgraded his recommendation on the stock to "neutral".

CCH's shares were up 0.3 percent at 1235 GMT in Athens, underperforming a 1.8 percent rise in the general index.

An expected rise of the U.S. dollar versus the euro and the currencies of other crisis-hit European countries will likely offset any benefits from an easing in raw material costs, the company said.

Input prices will rise in mid-single digits instead of high-single digits as previously forecast, according to Lois, driven by lower prices of PET, a key raw material for plastic bottles.

In an effort to improve profitability, the company will slash personnel and management costs, doubling its restructuring expenses to 100 million euros this year, up from the 50 million euros it stated earlier in 2012.

Greece's debt crisis has also fuelled speculation about the future of the company's base in Greece, particularly its listing on the Athens Stock Exchange.

But Lois dismissed the concerns, saying that any possible downgrade of the local stock market would not take place before the middle of next year and that he would try to make use of the company's other parallel listings in New York and London to make life easier for its investors.

source: nytimes.com