German drug firm makes 1st apology for thalidomide

The Houston Chronicle, Frank Jordans, Maria Cheng, Associated Press, August 31, 2012

FILE - An April 21, 1969 photo from files showing a view of a laboratory of
 the pharmaceutical company "Chemie Gruenenthal", in Stolberg, near Aachen,
 West Germany, during an animal experiment April 21, 1969 as prosecutors came
 to inspect the manufacturer of the drug Thalidomide, which was prescribed by
 doctors as harmless sleeping drug to pregnant women and caused the miscarriage
 and birth of thousands of crippled children. Photo: File / AP

BERLIN (AP) — The German manufacturer of a notorious drug that caused thousands of babies to be born with shortened arms and legs, or no limbs at all, issued its first ever apology Friday — 50 years after pulling the drug off the market.

Gruenenthal Group's chief executive said the company wanted to apologize to mothers who took the drug during the 1950s and 1960s and to their children who suffered congenital birth defects as a result.

"We ask for forgiveness that for nearly 50 years we didn't find a way of reaching out to you from human being to human being," Harald Stock said. "We ask that you regard our long silence as a sign of the shock that your fate caused in us."

FILE - In a 1965 file photo provided by the U.S.

Department  of Health, a three-year-old girl, born

 without arms to a German mother who took the drug

 thalidomide, uses power-driven artificial arms fitted

 to her by Dr. Ernst Marquardt of the University of

 Heidelberg in Germany. Photo: File / AP

Stock spoke in the west German city of Stolberg, where the company is based, during the unveiling of a bronze statue symbolizing a child born without limbs because of thalidomide. The statue is called "the sick child" — a name German victims group object to since all the victims are now adults. In German, the name also implies cure.

The drug is a powerful sedative and was sold under the brand name Contergan in Germany. It was given to pregnant women mostly to combat morning sickness, but led to a wave of birth defects in Europe, Australia, Canada and Japan. Thalidomide was yanked from the market in 1961 and was also found to cause defects in the eyes, ears, heart, genitals and internal organs of developing babies.

Thalidomide was never approved for use in pregnant women in the United States.

Freddie Astbury, of Liverpool, England, was born without arms or legs after his mother took thalidomide. The 52-year-old said the apology was years long overdue.

"It's a disgrace that it's taken them 50 years to apologize," said Astbury, of the Thalidomide U.K. agency, an advocacy group for survivors. "I'm gobsmacked (astounded)," he said. "For years, (Gruenenthal) have insisted they never did anything wrong and refused to talk to us."

Astbury said the drug maker should apologize not just to the people affected, but to their families. He also said the company should offer compensation. "It's time to put their money where their mouth is," he said. "For me to drive costs about 50,000 pounds ($79,000) for a car with all the adaptations," he said. "A lot of us depend on specialist care and that runs into the millions."

Astbury said he and other U.K. survivors have received some money over the years from a trust set up by thalidomide's British distributor but that Gruenenthal has never agreed to settle.

"We invite them to sit around the table with us to see how far their apology will go," he said. "I don't think they've ever realized the impact they've had on peoples' lives."

Gruenenthal settled a lawsuit in Germany in 1972 — 11 years after stopping sales of the drug — and voiced its regret to the victims. But for decades, the company refused to admit liability, saying it had conducted all necessary clinical trial required at the time.

Stock reiterated that position Friday, insisting that "the suffering that occurred with Contergan 50 years ago happened in a world that is completely different from today" and the pharmaceutical industry had learned a valuable lesson from the incident.

"When it developed Contergan Gruenenthal acted on the basis of the available scientific knowledge at the time and met all the industry standards for the testing of new drugs that were known in the 1950s and 1960s," he said.

A German victims group rejected the company's apology as too little, too late.

"The apology as such doesn't help us deal with our everyday life," said Ilonka Stebritz, a spokeswoman for the Association of Contergan Victims. "What we need are other things."

Stebritz said that the 1970 settlement in Germany led to the creation of a €150 million fund for some 3,000 German victims, but that with a normal life expectancy of 85 years the money wasn't enough. In many other countries, victims are still waiting for compensation from Gruenenthal or its local distributors.

In July, an Australian woman born without arms and legs after her mother took thalidomide reached a multimillion dollar settlement with the drug's British distributor. Gruenenthal refused to settle. The lawsuit was part of a class action and more than 100 other survivors expect to have their claims heard in the next year.

Thalidomide is still sold today, but as a treatment for multiple myeloma, a bone marrow cancer and leprosy. It is also being studied to see if it might be useful for other conditions including AIDS, arthritis and other cancers.

Maria Cheng reported from London.

Related Articles:

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British Civil Aviation Authority Highly Interested In Pilots' UFO Sightings

The Huffington Post, Lee Speigel, 8 August 2012

This is an image captured by British private pilot David Hastings in 1985 while

 flying a Cessna Skymaster plane over the Mojave Desert. Hastings didn't see

 the cigar-shaped object when he took the picture. It only showed up after the

picture was developed.

Despite the fact the UK's Ministry of Defense officially ended its UFO investigations in 2009, it appears that the British Civil Aviation Authority decided -- unbeknownst to the public -- to continue collecting reports that involved UFOs with possible flight safety issues.

"They were only interested in sightings that definitely had a bearing on aircraft or flight safety, and were no longer interested in reports from the public, who'd seen things in the sky and reported them to the Civil Aviation Authority," said David Clarke, the official UK National Archives consultant and a journalism lecturer at Sheffield Hallam University. 

Clarke, seen at right, told the Huffington Post that the Civil Aviation Authority -- a different government department from the MoD -- kept separate records of UFO cases, "not only by the aircrew, themselves, but also anything unusual that was seen by air traffic controllers on the ground at airports."

Through the filing of Freedom of Information requests, Clarke found that the Royal Air Force specifically requested any UFO reports submitted to the Department of Transport would no longer be forwarded to the MoD.

The RAF specifically states that "members of the public who make such reports are not encouraged to believe an investigation will take place."

It's now known that British air traffic controllers have been receiving UFO reports on almost a regular basis.

Speaking on the BBC Radio's "Today" programme, on Aug. 17, Richard Deakin, the head of the UK's National Air Traffic Control Services, was asked if he or his staff had ever been unable to identify a flying object.

"Well, occasionally, there are objects that are identified that don't conform to normal traffic patterns -- not just from the UK point of view, but from around the world," Deakin responded. "I have to say it's not something that occupies a huge amount of my time."

Deakin added that these sightings occur "typically around one a month."

If that's true, then Clarke's calculations of how many actual UFO sightings were written up as Mandatory Occurrence Reports, or MORS, was substantially higher.

"As far as MOR reports that I got from using the Freedom of Information, from December 2004 to October 2010, their actual database listed 10 instances of UFOs or unidentified aircraft," said Clarke.

"Now [Deakin] is saying they get a report every month," he added. "If that was the case, I'd expect it to be 80 in that six-year period, not 10. So, my question is: Where did all the others go?"

This comes on the heels of the Ministry of Defense's ruling that all UFO investigations in the UK have come to an end. According to the MoD's website: 

The MoD has no opinion on the existence or otherwise of extra-terrestrial life. However, In over fifty years, no UFO report has revealed any evidence of a potential threat to the United Kingdom. The MoD has no specific capability for identifying the nature of such sightings. There is no defence benefit in such investigation. Furthermore, responding to reported UFO sightings diverts MoD resources from tasks that are relevant to defence.

UK pilots have reported a number of chilling near-misses with UFOs.

One incident involved David Hastings, a British pilot pictured below, who, along with his co-pilot, David Paterson, was flying a Cessna Skymaster plane over the Mojave Desert in America on Sept. 9, 1985. 

"We were sitting there enjoying the sunshine when we both suddenly saw this speck out on the horizon at our 12 o'clock position," Hastings told HuffPost.

"This speck suddenly grew extremely quickly until we saw this huge shadow go over the top of us," he recounted. "But the most amazing thing about it was there was no noise and absolutely no movement or turbulence at all. We looked at each other, saying, 'What the hell was that?'"

At that point, both pilots felt that something was in the air off the port (left) side of their plane, but they couldn't see anything there. They agreed that they were able to sense something moving outside.

Hastings walked to the back of the plane, grabbed his camera and returned to the cockpit where he snapped two pictures out the window. All he was able to see in the camera viewfinder was the left wing of the plane and the ground below. 

It was only after they returned to San Francisco and got the pictures developed that they knew they'd encountered something extraordinary.

"One picture showed what we expected to see -- the aircraft wing and the ground," said Hastings. "But in the second one, there was this [cigar-shaped] thing. We were both convinced that it was not a manmade object.

"Several pilots have seen UFOs in England, so it didn't surprise me, but I was surprised that we actually got a picture of it."

Hastings recalls that, although he wasn't frightened by the object, he was mostly concerned about the initial encounter with it and the possibility of a mid-air collision. No hoax was ever determined in this case, which remains unexplained to this day.

Why do aviation officials avoid talking about UFOs? In the UK, Clarke suggests it's something that could result in bad publicity.

"Don't forget, this is a commercial operation and the aircrew are very reluctant to file a report because the airline companies don't want them answering questions about things that aren't part of the corporate image."

Watch this 2007 UK television interview with a pilot who saw an enormous UFO over Guernsey.

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Vladimir Putin 'galley slave' lifestyle: palaces, planes and a $75,000 toilet

Critics' report lists perks of being Russian president, including access to nearly two dozen official homes

guardian.co.uk, Miriam Elder in Moscow, Tuesday 28 August 2012

Vladimir Putin surveys the scene from the back of a boat in Karelia, north-west
 Russia. A new report says the Russian president has overseen a phenomenal
 expansion in the awarding of presidential perks. Photograph: RIA Novosti/Reuters

To hear Vladimir Putin tell it, he works like a "galley slave", pouring blood, sweat and tears into toiling for the Russian people with little personal gain in return.

Yet according to a new report by some of his harshest critics, Putin may be the richest "slave" in the world, reaping official perks as the powerful leader of a country with a long history of enriching its omnipotent tsars.

Watches in white gold, yachts decked out in the plushest of drapery and at least one flying toilet worth $75,000 (£47,000) are among the presidential perks detailed by Boris Nemtsov, a former deputy prime minister turned Putin critic, and his co-author Leonid Martynyuk, a member of the opposition Solidarity movement, in a report released on Tuesday.

"Putin has led Russia for more than 12 years," the authors write. "Losing popularity, Putin is maniacally clinging to power. It's clear why." It's not just the "fear of losing his freedom, capital and property" or the influence of his inner circle, who have grown fantastically rich under his rule, they say. "One of the most serious reasons that forces Putin to hold on to power is the atmosphere of wealth and luxury to which he has become accustomed and which he does not want to give up."

According to the authors, Putin has overseen a phenomenal expansion in the awarding of presidential perks. At his disposal are 20 palaces and villas, a fleet of 58 aircraft, a flotilla of yachts worth some 3bn roubles (£59.2m), a watch collection worth 22m roubles and several top class Mercedes.

"We did not publish data on the cost of the clothes and things that Putin regularly uses: the suits, shoes and ties worth tens of thousands of dollars – mere trifles when compared to the villas, aeroplanes watches and cars," they wrote.

The report, ironically titled The Life of a Galley Slave, is the latest salvo in the opposition's attempt to discredit Putin as they continue to challenge the legitimacy of his return to the presidency this year. It could signal an attempt to expand the opposition beyond the urban middle class that comprises most of its ranks, highlighting the stark contrast in the way Putin lives compared with the average Russian.

"In a country where more than 20 million people can hardly make ends meet, the luxurious life of the president is a blatant and cynical challenge to society by a limitless ruler," the authors write.

With photographs of each palace, watch and aircraft, the report paints a colourful picture of the life enjoyed by Putin, who famously compared himself to a "galley slave" during a 2008 press conference.

There are the columned facades of palaces outside Moscow, in the southern resort of Sochi, and dozens more around the country. On an island in the centre of Lake Valdai, stands a 930 hectare estate serviced by a 1,000-strong staff that includes a "presidential church, swimming pool, two restaurants, movie theatre, bowling alley and concrete helipad".

The authors compare Putin's nearly two dozen official residences to the number held by other state rulers – two for the leaders of the United States and Germany, and three for the president of Italy. Nine of the villas were built while Putin was at the helm of the country, they note.

The leader has long attempted to present an image of average Russian machismo, staging regular photo ops with factory workers and bikers. Images of his stark home life stand in contrast to the meetings he holds in the Kremlin's gilded halls. During a televised meeting of his participation in Russia's nationwide census in 2010, Putin appeared on a drab beige sofa in one of the two modest flats he is officially registered as owning.

Putin last declared his income – $115,000 (£73,000) – in December, a requirement to run in the March presidential vote, when his bank balance was revealed to be a mere $179,612. "And yet," the authors note, "his lifestyle can be compared to the life of a Persian Gulf monarch or a flamboyant oligarch." Putin's spokesman, Dmitry Peskov, could not be reached for comment. He has in the past called rumours of Putin's personal wealth, revealed in diplomatic cables released by WikiLeaks, "completely stupid".

Nemtsov and Martynyuk say the 58 aircraft Putin has access to comprise 43 planes and 15 helicopters. One of the aeroplanes, an Ilyushin-96, features an $18m cabin fitted out by jewellers and is said to have a toilet that cost $75,000 alone. The report reveals four yachts, including the Olympia, which the authors dub "the real diamond in the Kremlin flotilla". Fitted in rich mahogany, the five-storey yacht includes a jacuzzi and marble bathroom and costs $50m to maintain yearly, they allege.

The authors do not touch on Putin's alleged personal wealth, instead highlighting how his lifestyle was afforded by taxpayer money which they say could have been better spent on improving the lives of the country's citizens. Their report, dotted with footnotes, was mainly compiled from media reports.

"We absolutely cannot put up with this," the authors write. "We think the lifestyle of those in power must become a subject of public discussion."

Putin has attempted to maintain strict secrecy over his private life, with reports on his little seen wife and two daughters considered all but taboo.

Speaking to a press conference in 2008, he said of his first two four-year terms as president: "All these eight years, I have laboured like a galley slave, with all my strength. I'm pleased with the results of my work."

France opens enquiry into claims of Arafat poisoning

Yahoo, Pauline Talagrand, AFP, 28 August 2012 

Palestinian leader Yasser.

(AFP Photo/Abbas Momani)

French prosecutors have opened a murder enquiry into Palestinian leader Yasser Arafat's 2004 death near Paris following claims he may have died of polonium poisoning, sources close to the matter told AFP Tuesday.

The probe comes after Arafat's family launched legal action in France last month following reports the veteran Palestinian leader may have died from radioactive polonium.

Arafat's widow Suha and his daughter Zawra lodged a murder complaint on July 31 in the Paris suburb of Nanterre. Arafat died at age 75 at a military hospital near Paris in 2004.

"A judicial murder enquiry has been opened, as expected following the complaint from Mrs. Arafat," a source close to the matter told AFP. Another source confirmed the probe had been opened.

The Palestinian Authority hailed the move.

"We welcome this decision and (Palestinian) president Mahmud Abbas has officially asked French President Francois Hollande to help us to investigate the circumstances of the martyrdom of late president Arafat," senior Palestinian official Saeb Erakat told AFP in Ramallah.

Allegations that the Nobel Peace laureate was poisoned were resurrected last month after Al-Jazeera news channel broadcast an investigation in which experts said they found high levels of polonium on his personal effects.

Polonium is a highly toxic substance which is rarely found outside military and scientific circles, and was used to kill former Russian spy turned Kremlin critic Alexander Litvinenko, who died in 2006 shortly after drinking tea laced with the poison.

Suha Arafat has said she backs exhuming her late husband's remains from his mausoleum in the West Bank town of Ramallah.

A Swiss radiology lab at the Lausanne University Hospital Centre said on Friday it has received Suha Arafat's go-ahead to test his remains for poisoning by polonium.

French news website Slate.fr on Tuesday published a copy of the medical report into Arafat's death and said his symptoms were not consistent with polonium poisoning.

Arafat was sent to the Percy military hospital in Clamart outside Paris after suffering from nausea, vomiting, abdominal pain, acute diarrhea and thrombocytopenia -- an abnormally low amount of platelets in the blood.

Doctors at the hospital conducted a wide range of tests but were unable to determine the exact cause of his illness.

A few days after his arrival in France, Arafat lapsed into a coma and he died on November 11, 2004. No autopsy was conducted.

"The hypothesis of polonium does not stand up to scrutiny," Marcel Francis-Kahn, the former chief of rheumatology at Paris's Bichat hospital, told Slate.fr.

"All experts know that poisoning by radioactive material does not lead to the symptoms seen in Arafat," he said, noting that he also suffered no traditional effects of radiation poisoning such as hair loss and a massive drop in white blood cells.

At the time of Arafat's death, Palestinian officials alleged he had been poisoned by long-time foe Israel, but an inconclusive Palestinian investigation in 2005 ruled out poisoning, as well as cancer and AIDS.

Israel has consistently denied the allegations, accusing Suha Arafat and Palestinian officials of covering up the real reasons for the death of the former leader, who led the struggle for Palestinian statehood for nearly four decades.

Related Articles:

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'Polonium would be hardly detectable'

Facebook Israel-Arab youth group has rare meeting

The Jakarta Post, The Associated Press, Jerusalem, August 27 2012

A Facebook-based movement for Mideast youth says the group has held its first gathering, bringing young activists from Israel and Arab countries to Germany to promote peace.

Nimrod Ben-Zeev of the YaLa-Young Leaders group says 18 members from Israel, the Palestinian territories, Tunisia, Algeria, Lebanon, Egypt, Sudan, Iraq and Kuwait met in Berlin over the weekend.

Ben-Zeev, an Israeli, said the group was selected from the most active of YaLa's 162,000 Facebook members.

Meetings between Israelis and citizens of Arab nations are rare. Except for Egypt and the Palestinians, none of those represented have diplomatic ties with Israel.

Ben-Zeev said Monday the movement wants to empower Middle Eastern youths to work together to improve their communities. It plans an online university next year.

Britain 'committed to diplomatic solution' over Julian Assange

WikiLeaks founder has been living in Ecuador's London embassy for more than two months

guardian.co.uk, Reuters in London, Sunday 26 August 2012

A policeman stands outside the Ecuadorean embassy in London, where
Julian Assange has been living for more than two months. Photograph: Max Nash/PA

Britain says it remains committed to reaching a diplomatic solution to the presence of Julian Assange in Ecuador's London embassy, after both countries took steps to defuse a row over his action in taking refuge.

The WikiLeaks founder has been living in the embassy's cramped quarters for more than two months in an attempt to avoid extradition to Sweden, where he is wanted for questioning over rape and sexual assault allegations.

Ecuador's president, Rafael Correa, said on Saturday that Britain had withdrawn a threat to enter the embassy to arrest Assange, to whom Ecuador has granted asylum, and that he now considered the "unfortunate incident" over.

Correa was responding to a British assurance that it was not threatening the embassy and that Britain was committed to the Vienna convention, which protects the inviolability of diplomatic premises.

"We remain committed to the process of dialogue we have entered into and we want that to resume with the government of Ecuador," a British Foreign Office spokeswoman said.

There was a furious reaction in Ecuador when the UK said that an obscure domestic law allowed it, under extreme circumstances, to remove the embassy's diplomatic status, exposing Assange to immediate arrest by police.

Ecuador accused Britain of planning to storm the embassy and demanded it withdraw the threat.

Britain said it had not meant to threaten Ecuador, a plea that fell on deaf ears, prompting it to send Ecuador a formal communication on Thursday confirming that the embassy was safe.

The communication was copied to diplomats at a meeting on Friday of the Organisation of American States (OAS) in Washington, which discussed the spat.

A British diplomat attending the meeting invited Ecuador to resume "constructive discussions" on Assange, the Foreign Office said. "We believe that our two countries should be able to find a diplomatic solution," the diplomat added, according to a transcript issued by the Foreign Office.

Britain says it is determined to fulfil a legal obligation to send Assange to Sweden.

Correa responded to the British diplomatic approach by saying in his weekly media address on Saturday: "We consider this unfortunate incident over, after a grave diplomatic error by the British in which they said they would enter our embassy."

The OAS had condemned the British threat, and South American foreign ministers backed Correa's position that Britain's warning was unacceptable and could set a dangerous precedent.

Correa says he shares Assange's fears that, if handed over to Sweden, he might be extradited to the United States to face charges over WikiLeaks' 2010 publication of US cables.

US and European government sources say the United States has issued no criminal charges against the WikiLeaks founder and has made no attempt to extradite him.

Related Articles:

Correa Believes Dispute With Britain Over Assange Resolved

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South American bloc adopts resolution on UK threats to Ecuador

Two Pussy Riot members flee Russia

Two members of band who escaped arrest after February's protest in Moscow's main cathedral leave the country

guardian.co.uk, Associated Press,  Sunday 26 August 2012

A Pussy Riot protest performance in January: two activists have now fled
 Russia and are 'recruiting foreign feminists to prepare new protest actions'.
Photograph: Denis Sinyakov/Reuters

The Russian punk band Pussy Riot says two of its members who were being sought by police have left the country.

Five members of the feminist group took part in a provocative performance inside Moscow's main cathedral in February to protest against Vladimir Putin's rule and his relationship with the Russian Orthodox church.

The women wore their trademark balaclavas and only three were identified and arrested. After a controversial trial, they were sentenced on 17 August to two years inprison.

Days later, Moscow police said they were searching for the others, in what was seen as a warning to the group to stop its anti-Putin protests.

Pussy Riot tweeted on Sunday that the two activists had fled Russia and are "recruiting foreign feminists to prepare new protest actions".

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Germany admits training Belarus security forces

BBC News, 24 August 2012

Related Stories 

• Germany rejects Belarus gay jibe
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Germany has admitted that in 2008-10 it trained members of the security forces of Belarus - the country branded by the West as Europe's "last dictatorship".

The government in Berlin said it had believed at the time that Minsk was committed to "a process of democracy".

But it said the co-operation was halted after President Alexander Lukashenko was re-elected in 2010, amid claims that the poll was rigged.

Earlier, a German newspaper said the training continued until 2011.

The Tagesspiegel daily reported that Belarus' security forces accompanied German police as observers during an anti-nuclear demonstration in Germany in 2010.

It also said that German officials also travelled to Belarus to train some 400 local border guards.

'Total freeze'

Mr Lukashenko has been
in power since 1994

"The German government intensified its dialogue with the Belarusian government between 2008 and 2010," German Interior Ministry spokesman Philipp Spauschus told reporters on Friday.

He said it was "because there were signs that Minsk was ready to implement democratic reforms and conform to rule of law.

But the spokesman said that - contrary to the Tagesspiegel's report - the "co-operation with the Belarusian government was largely reduced, leading to a total freeze" after the 2010 election in the former Soviet republic.

Mr Lukashenko won his fourth consecutive term in the election, which was described by the West as a charade.

Mr Lukashenko was also accused of persecuting his political opponents - a claim he denied.

More than 600 people - including four opposition candidates - were detained after the poll, amid street protests.

Earlier this year, the European Union extended its blacklist of Belarusian officials, adding 21 names to the list, which already included more than 160 individuals.

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IMF Says Bailouts Iceland-Style Hold Lessons in Crisis Times

Bloomberg News, By Omar R. Valdimarsson on August 13, 2012 

Iceland holds some key lessons for nations trying to survive bailouts after
the  island’s approach to its rescue led to a “surprisingly” strong recovery,
the International Monetary Fund’s mission chief to the country said.
Photographer: Arnaldur Halldorsson/Bloomberg

Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said.

Iceland’s commitment to its program, a decision to push losses on to bondholders instead of taxpayers and the safeguarding of a welfare system that shielded the unemployed from penury helped propel the nation from collapse toward recovery, according to the Washington-based fund.

“Iceland has made significant achievements since the crisis,” Daria V. Zakharova, IMF mission chief to the island, said in an interview. “We have a very positive outlook on growth, especially for this year and next year because it appears to us that the growth is broad based.”

Iceland refused to protect creditors in its banks, which failed in 2008 after their debts bloated to 10 times the size of the economy. The island’s subsequent decision to shield itself from a capital outflow by restricting currency movements allowed the government to ward off a speculative attack, cauterizing the economy’s hemorrhaging. That helped the authorities focus on supporting households and businesses.

“The fact that Iceland managed to preserve the social welfare system in the face of a very sizeable fiscal consolidation is one of the major achievements under the program and of the Icelandic government,” Zakharova said. The program benefited from “strong implementation, reflecting ownership on the part of the authorities,” she said.

Euro Aid

As of March this year, the IMF had program arrangements with 11 European countries, representing about 65 percent of its funds, according to its website. Governments inside the euro zone have struggled to comply with the austerity terms prescribed in joint aid packages provided by the IMF and the European Union, leading to revised terms and extended deadlines for nations such as Greece.

At the same time, bond markets have reflected a lack of confidence in recovery programs, sending debt yields higher and adding to pressure on government finances. Countries inside the euro area or with pegged currencies such as Latvia have relied on wage cuts and reduced welfare services as a means toward delivering on bailout goals.

In Iceland, the krona’s 80 percent plunge against the euro offshore in 2008 helped turn a trade deficit into a surplus by the end of the same year. Unemployment, which jumped nine-fold between 2007 and 2010, eased to 4.8 percent in June from a peak of 9.3 percent two years ago.

Impressive

“Each program is different and responds to a different situation so one cannot compare them directly,” Zakharova said. “Of course, considering the depth of the crisis in late 2008, Iceland’s recovery has been impressive.”

Iceland, which the IMF estimates was the world’s third- richest nation per capita in 2005 before slumping to rank 20th by 2010, ended its 33-month program in August last year. The $13 billion economy will expand 2.4 percent this year, the IMF said April 17. That compares with an estimated 0.3 percent contraction in the 17-member euro area.

Iceland’s growth “is driven by private consumption, investment has picked up strongly and even though, when you look at net exports, those have a negative contribution to growth, it is mainly because imports have been strong, reflecting strong consumption and an increase in income and the healthy expectations of households,” Zakharova said. “Still, exports have been increasing very strongly. Last year was a banner year for tourism. These are all really positive things.”

‘Key Challenge’

Iceland, which started EU membership talks in 2010 with euro-area membership an ultimate goal, is starting to question whether accession to the trade and currency bloc is the right way forward as the region’s debt crisis deepens. Thirty-nine of the Reykjavik-based parliament’s 63 lawmakers oppose continuing EU membership talks and may push to have the process shelved before elections next year, newspaper Morgunbladid said today.

The island still needs to show it can unwind its capital controls successfully, Zakharova said. About $8 billion in offshore kronur are locked behind the restrictions. The central bank has said the plan to ease controls is likely to be completed by the end of 2015. The law allowing the government to maintain the controls expires next year, requiring a parliamentary extension. Former Economy Minister Arni Pall Arnason said in a September interview that Iceland has no plans to return to a free floating currency before entering the euro.

Krona Gains

The krona has gained about 15 percent against the euro since a March 28 low and was trading little changed at 147.27 per single currency as of 12 noon in Reykjavik today.

“The lifting of the capital controls is a key challenge for Iceland and it’s not an easy task,” she said. At the same time, “the government has regained access to international capital markets; the cleaning up of the balance sheet of banks has been proceeding at good speed. So going forward it’s important that the gains are sustained and consolidated,” she said.

As the central bank prepares to ease capital controls, policy makers are also raising interest rates in part to protect the krona from any weakening that might ensue. The bank increased its benchmark rate a quarter or a percentage point on June 13, bringing it to 5.75 percent. It was the fifth interest- rate increase since August last year.

“Further monetary tightening is needed, over the next few quarters, in order for Iceland to get to the target,” Zakharova said. “But we’ve also seen that the central bank has made strong statements about a hawkish monetary policy stance, indicating that the monetary policy will be tightened over time. So we think that the stance is appropriate at this point.”

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

Related Articles:

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What We Can Learn From Iceland

Channel:  Wanderer of the Skies - April 14, 2012

“… Your nation of Iceland is being used as a testing ground for the rolling out of financial strategies for the betterment of your planet. It would be wise to follow their progress in this respect, as it will be the fate of all nations in a very brief period of time. We have always advised you that such an action would never come from the larger powers and nations of the world, but they will follow in lockstep once the actions begin their domino effect…..” 

Struggling borrowers in Ireland could claim debt forgiveness

German cabinet passes new house rules for banks

Deutsche Welle, 22 August 2012

Bankers take risks and cash-in while the general public covers the cost. A new law should stop that from happening, the German government has promised. It could make doing business more expensive for banks.

G20 states all agree, the losses from risk-taking banks should no longer be a burden for taxpayers. In order to make that possible, the German cabinet decided on a new "basic order" Wednesday (22.08.2012). The guidelines came from Brussels and run to around 1,000 pages. While the contents continue to be haggled over in minute detail in capital cities throughout Europe, the German cabinet is already taking steps to implement the regulations. It wanted to send a clear signal, according to the Finance Ministry in Berlin. The new law will come into effect at the beginning of 2013.

German credit institutes will now have to raise their core capital quotas – that's capital not tied to risks such as credit or financial investments – to seven percent by the end of 2018. Up until now, it was just two percent. One lesson from the global banking crisis was that a large security buffer for possible losses should be created. If a bank fails to meet the minimum quota, bonus payments and dividend payouts must be approved by German financial market regulator BaFin. For 29 globally operating, so-called "system relevant" banks, the European Banking Authority (EBA) has already stipulated a net equity of at least nine percent. Deutsche Bank and Commerzbank belong to that group.

Stiff penalties

The law drawn up by the German government also states that banks must not break the upper limit for debt and must guarantee their liquidity. The goal is for them to remain solvent even if crisis hits. New security standards, more stringent monitoring, increased transparency and harsher sanctions through the banking regulators should rein in excessive risk-taking on the part of credit institutes, the costs of which are carried by taxpayers. As such, a bank that breaks the rules could face fines twice as high as the possible returns on a risky deal. In addition, banking executives can lose their accreditation and, in extreme cases, banks can even be shut down. 

Feeling the pressure: Finance
Minister Wolfgang Schäuble

The new regulations stem from a resolution that the governors of the central bank and leaders of the regulatory authorities from 27 of the most important industrial and developing countries agreed to in the Swiss city of Basel in September 2010. The agreement is known as Basel III. The European Union created a detailed package of rules and regulations in May 2012, the details of which are still being negotiated between the European Council, the European Parliament and the EU Commission. Above all, the issue is how far individual countries can stray from the regulations.

Feeling the pressure

Germany hopes to have the new law ready to be implemented by the end of the year. It is just one of about 40 proposed laws that Berlin hopes will better regulate the financial sector.

Finance Minister Wolfgang Schäuble has warned time is running out, since Europeans committed to implement the new house rules for banks before January 1, 2013. He hoped "that the partners in Brussels also feel the sense of urgency."

Paralympics: London Prepares to Welcome the World, Again

Jakarta Globe, August 22, 2012

Sailing Paralympic athletes Brazil's Bruno Landgraf, right, and Elaine Cunha
 train in Guarapiranga lake in Sao Paulo on Aug. 10. Landgraf and Cunha will
compete  in the Skud 18 sailing class in the 2012 London Paralympic Games which
will take place from Aug. 29 to Sept. 9. (Reuters Photo/Paulo Whitaker)

              

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The world’s top athletes with a disability, including “Blade Runner” Oscar Pistorius, converge on London next week for what organizers say will be the biggest and most high-profile Paralympics in the Games’ 52-year history.

A record 4,200 athletes from 166 countries will be in the British capital, with the 11-day Games a near sell-out and expected to be watched by an estimated global television audience of four billion people.

Britain is considered the birthplace of the Paralympic movement, after World War II veterans with spinal injuries competed in archery events at Stoke Mandeville in southern England in 1948, 12 years before the first official Games in Rome.

The International Paralympic Committee (IPC) said that history, a desire to see more elite sport after a successful Olympics, increased media coverage and sponsorship have combined to drive up interest and awareness.

“There’s a fantastic buzz in the air, waiting for it to kick off and people talking about it,” IPC president Philip Craven told Agence France-Presse before next Wednesday’s opening ceremony.

China held the last Paralympics in Beijing in 2008 and did much to raise the Games’ profile.

The previous hosts won 211 medals, including 89 gold, and will be looking to replicate that success this time round.

But challenging them will be the current hosts, who came third in the Olympics medal table, galvanizing wide support for the Games across the country and lifting a national mood hit by lingering economic woes.

ParalympicsGB have been set a minimum target of 103 medals from at least 12 different sports — one better than in Beijing — and to match their second-place finish four years ago.

For the home team, hopes are highest for athletes like Jonnie Peacock, who in June set a new T44 100m record of 10.85secs and is expected to challenge South Africa’s Pistorius for gold in the showpiece track event.

With Pistorius’ long-standing rival Jerome Singleton, of the United States, and a host of other lightning-fast sprinters likely to line up in the final, organizers even predict that all eight runners could dip under 11secs.

Among the wheelchair racers, Britain’s David Weir, the T54 800m and 1,500m champion four years ago, is set to renew his rivalries with Australia’s Kurt Fearnley and Swiss world record holder Marcel Hug.

In the pool, Ellie Simmonds has become a poster girl for the Games after winning two golds in Beijing aged just 13.

But like Pistorius — the first double amputee to compete in the Olympics and the Paralympics’ biggest star — there are other big names.

South Africa’s Natalie Du Toit is retiring after a decade at the top, while Matthew Cowdrey — an eight-time gold medallist — needs just three more golds to surpass athlete Tim Sullivan to become Australia’s most successful Paralympian.

London will also see veteran medallists like shooter Jonas Jacobsson, dressage specialist Lee Pearson and Dutch wheelchair tennis player Esther Vergeer going for gold again alongside first-time athletes from smaller nations.

Now 47, Sweden’s Jacobsson has competed in eight Paralympics and has 16 golds; Pearson, of Britain, has won gold at every Games since Sydney 12 years ago; while Vergeer won in 2000, 2004 and 2008 and is unbeaten in over 450 matches.

The US Virgin Islands will have their first ever Paralympian in the shape of rider Lee Frawley, while North Korea make its debut in the competition with swimmer Rim Ju Song.

Some 200 athletes with intellectual disabilities will also compete for the first time since Sydney and a scandal involving the eligibility of Spain’s basketball team.

And while every athlete has as much determination to overcome adversity as talent and skill, few have as remarkable a backstory as Martine Wright, who lost her legs in the 2005 suicide attacks in London — a day after the city was awarded the Games.

She will be a member of Britain’s sitting volleyball team.

London organizing committee chairman Sebastian Coe has repeatedly maintained that the Paralympics and the Olympics are two equal parts of the same event.

“We want to change public attitudes towards disability, celebrate the excellence of Paralympic sport and to enshrine from the very outset that the two Games are an integrated whole,” he said.

Agence France-Presse

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London 2012: let the Paralympics preparations begin