Tulisa's Friend, 21, Shot Dead In Gangland Hit

Reece James, 21, a close friend of Tulisa Contostavlos has been shot dead in a reported gangland attack. The 21-year-old, who appeared with Tulisa in a video for rapper Nines, was shot in the head in a "pre-planned and targeted" hit, 100 miles from his home in London, reports the UK's Sun newspaper. Police found James' body in Boscombe, Bournemouth, at around 2.30am near where Somali drug gangs are said operate. A 22-year-old man was arrested. Reece was said to have been in the area with some friends for "a couple of months", though had filmed the video earlier this month with Tulisa and rapper Nines on the Church End Estate in Harlesden, North West London. The former N Dubz star caused controversy at the time, making a "C" symbol to the camera - the same sign that is used by Harlesden's notorious Church Road Soldiers gang. Tulisa claimed it was a reference to Camden, where she was born. Twitter tributes began flooding in last night, with one user writing, "RIP Reece James. Thoughts are with him and his family and friends". Local MP Tobias Ellwood described the killing as "a spill over from the drugs turf war in the capital", adding, "This was one London gang chasing down another, carrying out a professional hit and then going back".

Gangs of highway robbers are targeting British tourists on holiday in Spain.

Hundreds of visitors in British-registered vehicles or hire cars have had their possessions, passports and money taken in ‘quick and slick’ distraction muggings.

The thieves typically trick their victims with loud noises, apparent accidents, supposed vehicle problems or pleas for help – before stealing bags and belongings from their vehicles. 

Thieves: Hundreds of visitors in British-registered vehicles or hire cars have had their possessions, passports and money taken in 'quick and slick' distraction muggings

As millions of families begin their summer breaks, the Foreign Office has warned British-registered cars are ‘an easy target’ for motorway thieves. 

The number of British tourists ambushed on Spanish roads has soared as the euro crisis has deepened, with the British Embassy in Madrid reporting a 10 per cent rise in the first quarter of this year.

 This is likely to increase further as the peak holiday season begins. 

A spokesman for the embassy said:  ‘Motorists may be driving along the motorway and not notice there’s a car close up behind. 

‘Someone in the other car throws a stone at their vehicle which creates a loud bang. The British drivers pull over to see what has happened and the gang is behind them. 

‘They cause a distraction to steal from them or simply mug them. It’s a growing problem.’

Warning: As millions of families begin their summer breaks, the Foreign Office has warned British-registered cars are ¿an easy target¿ for motorway thieves

A hotspot for the gangs is the AP7 motorway between the French border and the Alicante region in southern Spain. 

More than 140 cases of theft on this route were reported to British Consulates last year. 

However, a spokesman said there were likely to be ‘hundreds more’ attacks going unreported across Spain because victims usually contact a British consulate only if they have lost their passport. 

Dave Thomas, consular regional director for Spain, said: ‘Be on your guard against anyone who attempts to stop you or ask you for help.

‘They may well be part of a  gang operating a scam in which an unseen accomplice will rob you of your things.’ 

Stephen and Helen Robinson, from Desford, Leicestershire, had their bags stolen from their Audi Q5 as they stopped to walk their labrador retriever Polly at a service station between Barcelona and Valencia. 

The couple, who are in their 50s, were standing at the boot of their car when a man on a mobile phone asked them how to say something in English. 

While he distracted them, their belongings were taken from the front of the car, despite Polly being inside. 

Mrs Robinson said: ‘It was quick and slick. You may be more tired and therefore more vulnerable when you’ve been travelling, so separate your valuables into different places in the car, and when you stop be aware you may be being watched. You won’t see the accomplice of the person who is distracting you.’ 

In a separate incident, Joy and Alan Horton, from Bury St Edmunds in Suffolk, were driving a Ford Focus hatchback through Spain when they heard a loud bang and pulled over.

A car that had been travelling close behind them also stopped, and while the driver talked to them, his accomplice stole their possessions without them noticing.

Mr Horton said: ‘If you think your car may have been in a collision and you pull over, lock the car as soon as you get out and mount a guard on both sides of the vehicle. Keep all bags and valuables in a locked boot.’ 

Professor Stephen Glaister, of the RAC Foundation, said: ‘Drivers need to remember to stay alert and be ready for unwelcome surprises just as they would be at home.’

The biggest fines in British maritime history were handed down to a group of Spanish fishermen on Thursday, for illegal fishing in UK waters.

 Photograph: Robert Ghement/EPA

Some of the biggest fines in British maritime history were handed down to a group of Spanish fishermen on Thursday, for illegal fishing in UK waters.

Two companies owned by the Vidal family were fined £1.62m in total in a Truro court, after a two-day hearing, in which details emerged of falsified log books, failing to register the transfer of fish between vessels, false readings given for weighing fish at sea, and fiddling of fishing quotas.

Judge Graham Cottle said the family were guilty of "wholesale falsification of official documentation" that amounted to a "systematic, repeated and cynical abuse of the EU fishing quota system over a period of 18 months".

He said: "[This was a] flagrant, repeated and long term abuse of regulations. The fish targeted [hake] was at that time a species of fish on the verge if collapse and adherence to quotas was seen as crucial to the survival of the species."

The Spanish fishing vessels had been sailing under UK flags and were landing fish based on quotas given to British fishermen under the EU's common fisheries policy. Two vessels were involved, but the companies own several other large vessels, capable of industrial-scale fishing.

The offending fishermen, who admitted their guilt earlier this year, were not in court to hear him, having been given leave to return to Spain last night. The offences, dating from 2009 and 2010, relate to two companies, Hijos De Vidal Bandin SA and Sealskill Limited, both owned by the Vidal family. They were fined £925,000 on a confiscation order, plus £195,000 in costs, and an additional fine of £250,000 levied on each of the two companies. Two skippers who were acting under the family's instructions were fined £5,000 each.

Ariana Densham, oceans campaigner at Greenpeace, who was present for the trial and judgement, said that the fines, while welcome, did not go far enough. "This group of people should never be allowed near UK fishing quota again," she said. "The Vidal's right to fish should be removed completely."

She said the offences showed the vulnerability of the EU's fishing quota system to fraud. "The system that allowed this to happen needs to be fixed," she said. "This case is not a one off. It's a symptom of Europe's farcical fishing rules. The Vidals were permitted to fish under UK flags, using UK quota, and receive huge EU subsidies, with none of the proceeds ever feeding back into the UK economy. The system is skewed in favour of rich, powerful, industrial-scale fishing companies, when really it should be supporting low-impact, sustainable fishermen."

There are currently moves under way in Brussels by the fisheries commissioner, Maria Damanaki, to reform the EU's common fisheries policy. The proposed reforms – which include the ending of the wasteful practice of discarding healthy and edible fish at sea – have met stiff opposition, particularly from the French and Spanish fishing industries. Spain has the biggest fishing fleet in Europe and receives the lion's share of the subsidies available for fishing within the EU. A historic agreement was reached among member states last month on the proposals, but they must now pass the European parliament, which is expected to consider the proposals later this year.

Paper Passion, a scent from Geza Schoen for Wallpaper magazine, makes its wearers smell like freshly printed books

Paper Passion, a scent from Geza Schoen for Wallpaper* magazine, makes its wearers smell like freshly printed books. I suppose it can be alternated with "In the Library," a perfume that smells like old books.

Paper Passion fragrance by Geza Schoen, Gerhard Steidl, and Wallpaper* magazine, with packaging by Karl Lagerfeld and Steidl.

“The smell of a freshly printed book is the best smell in the world.” Karl Lagerfeld. 

It comes packaged with inside a hollow carved out of a book with "texts" by "Karl Lagerfeld, Günter Grass, Geza Schoen and Tony Chambers."

It will cost two million € to connect the electricity, and nobody wants to pay.The empty Guadalhorce Hosptial in Cártama

The Guadalhorce Hospital has been completed in Cártama on the Costa del Sol, but it has been empty for several months with no opening date planned.

To continue installing the equipment in the hospital it has to be accepted as meeting requirement, and to show that hospital is as planned, but for that to take place it must be connected to the electricity supply.

The problem is that will cost two million €, although the originally quoted price was 300,000 €, to install the electrical connection required. Endesa say the problem is that to supply the hospital an electrical substation at Villafranca del Guadalhorce will have to be expanded.

Cártama Town Hall has said they cannot meet the extra cost, which has put the budget up five fold. Mayor Jorge Gallardo says he thinks the electricity company is ‘making the most of the circumstances’. 

However the Junta say they think the 2 million bill should be met by the Town Hall. They say the electricity contract was undertaken by Cártama Town Hall.

The Guadalhorce Hospital has been built thanks to an agreement between the Málaga Diputación, the Junta de Andalucía and the Cártama Town Hall, to give the district its long-wanted hospital. Many foreigners live in the inland area and have complained about the time to get to a hospital in Málaga.

Spain Scraps Siesta as Stores Stay Open to Spur Spending

The Spanish shopping siesta may be about to become the latest victim of the sovereign debt crisis. To stimulate spending after a 23 percent drop in retail sales since 2007, the euro region’s fourth-largest economy this month approved measures that allow shops of more than 300 square meters (3,229 square feet) to open for 25 percent longer a week. The new rules may encourage the outlets to sell during the traditional afternoon snooze from 2 p.m. to 4 p.m., and on an additional two Sundays or holidays a year for a total of 10. “When everything was fine, nobody complained, but now that things have gone awry, then it’s another story,” said Carmen Cardeno, director general for domestic commerce at the nation’s economy ministry, which created the rules. “We need to evolve and be more flexible.” Spain is following its European neighbors in trying to liberalize shopping hours that have traditionally been checked by governments in the region to protect religious observances, for rest and on behalf of smaller retailers that have fewer resources to staff shops around the clock. England has allowed retailers to open for longer on Sundays during the Olympics than the six hours usually allowed. In France, food shops can be open 13 hours a day and stores located in tourist areas have the right to open on Sundays. Spanish shops are allowed to open for less time than anywhere else in Europe, according to its government, which was asked by retail associations to allow large stores to open 16 Sundays or holidays a year. Some smaller merchants opposed the extension, arguing that the bigger stores would have the necessary manpower and they wouldn’t. The new measures allow stores 18 additional business hours a week and will permit merchants to decide when to cut prices in sales instead of only twice a year. Siesta Time The country’s regions will get to decide how to implement the rules, though they usually follow the lead of the central government. In Madrid, which is an exception, stores have been able to open for as long as they want since July 15. Outlets of less than 300 square meters also have no restrictions on opening hours, though the Spanish tradition of eating at home and having a siesta means most shopkeepers keep their businesses closed for about two hours in the middle of the day. The new measures may not be enough to offset shrinking demand in Spain’s 217 billion-euro ($264 billion) retail industry, which is worsening each year the crisis goes on in a nation where one in four people is out of work. The number of companies seeking bankruptcy protection rose 22 percent from a year earlier to 2,224 in the first quarter, according to the nation’s statistics institute, with commerce being the third- largest contributor behind construction and housing firms and industrial and energy companies. ‘Almost Insignificant’ Javier Millan-Astray, director general of retail association ANGED, said the approved loosening of restrictions on opening hours doesn’t go far enough. “The government’s reform is almost insignificant,” Millan-Astray told reporters in Madrid, when retail groups pushed for 16 Sunday openings. The associations’ “new proposal would help boost consumption and create more jobs because when we open on a holiday, people come and shop. It’s unbelievable that amid this crisis, we have to keep our stores closed.” Spain has been wrestling with the dilemma of preserving its culture and modernizing the industry for decades. The socialist government of Jose Luis Rodriguez Zapatero in 2004 rolled back liberalization of opening hours instituted by his predecessor, bringing them back to rules from the 1990s and leaving the country with the tightest regulations of any European country. Job Creation Even with the latest proposals, “retail regulation is hurting both business and customers in Spain,” said Fernando Fernandez, a professor at the IE Business School in Madrid. “Both big and small retailers would benefit from fewer restrictions. When big retailers such as Ikea or Zara open a store, all small shops in that area benefit from that.” Ending the restrictions completely would create 337,581 jobs across all industries and add 17.2 billion euros to economic growth this year, according to a study commissioned by the government, which examined the implications of several scenarios. The nearest of those to the current proposals, under which stores open on 16 Sundays or holidays, could have added 47,945 full-time retail jobs, the study found. About 1.8 million people worked in retail in the first quarter, 0.3 percent less than in the year-earlier period. Stores are also bracing for change as the government looks to the retail industry to help boost tax revenue. Prime Minister Mariano Rajoy will increase the most common rate of sales tax to 21 percent from 18 percent on Sept. 1, putting an additional brake on consumers’ ability to spend. previous

Spain king ousted as honorary president of World Wildlife Fund branch after elephant hunt

The World Wildlife Fund’s branch in Spain has ousted King Juan Carlos as its honorary president — a title he’d held since 1968 — after deciding his recent elephant hunting safari was incompatible with its goal of conserving endangered species. The announcement Saturday was the latest in a string of bad news for Spain’s royal family, which has been embarrassed by legal and other scandals. The fund said in a statement that “although such hunting is legal and regulated” it had “received many expressions of distress from its members and society in general.” It said members voted at a meeting Saturday in Madrid to “to get rid of the honorary President” by a substantial majority of 226 votes to 13. The Royal Palace declined immediate comment on the announcement. Many Spaniards were dumbfounded when news broke in April that the king had made a secret journey to hunt elephants in Botswana even though it was widely known he was president of the Spanish branch of the fund. Such an opulent indulgence also angered Spaniards at a time when national unemployment hovers around 25 percent, the economy is contracting and there are fears the country may need an international financial bailout. The Spanish public learned of the safari only after the king had to fly back in a private jet to receive emergency medical attention for a broken hip suffered during the trip. In an unprecedented act of royal contrition, a sheepish Juan Carlos apologized, saying as he left the hospital: “I am very sorry. I made a mistake. It won’t happen again.” It was a poignant moment because the royal family had been under intense media scrutiny for all the wrong reasons. The king’s son-in-law, Inaki Urdangarin, is a suspect in a corruption case, accused of having used his position to embezzle several million euros in public contracts through a supposedly not-for-profit foundation he’d set up. Over Easter, the king’s 13-year-old grandson, Felipe Juan Froilan, shot himself in the foot with a shotgun, even though Spanish law dictates you must be 14 to handle a gun. The king on Tuesday decided to take a pay cut in solidarity with civil servants who are to lose their traditional Christmas bonuses as part of the government’s most recent austerity drive. The salaries of Juan Carlos and Crown Prince Felipe will be reduced about 7 percent — to about 272,000 euros ($334,000) and 131,000 euros ($160,000) respectively — in line with government policy, the Royal Palace said. The king and prince acted voluntarily in cutting their salaries, the palace said.

Invasion of the pickpockets

Britain is in the grip of a pickpocketing epidemic as Eastern European gangs descend on London ahead of the Olympic Games.

A surge in sneak street thefts means more than 1,700 people fall victim every day – an increase of nearly a fifth in only two years, according to official crime  figures released yesterday.

At the same time, police warned that professional gangs from Romania, Lithuania and even South America who operate in capitals across Europe are heading to Britain, intent on cashing in on unwitting tourists at London 2012.

How they do it: A member of the pickpocket gang approaches a BBC reporter investigating the rise in thefts ahead of the Olympics

Keeping him occupied: The man speaks to the victim on the pretense of needing directions while another gang member approaches from behind

A BBC investigation exposed the tactics used by Romanian thieves, who were previously operating in Barcelona, to dupe their victims.

The criminals boasted of their ‘one-second’ theft techniques which leave targets unaware that anything has happened until  it is too late. They can make £4,000 a week taking wallets, smartphones and laptop bags. The goods are then shipped back to Romania and sold on the black market.

 Scotland Yard has made more than 80 arrests already and warned thieves the capital will be a ‘hostile environment’ in the coming weeks.

The Met has even drafted in a team of Romanian police officers to deal with the problem and patrol in the West End of London and Westminster during the Games. They will not have arrest powers.

Distracted: An accomplice (left) then plays drunk so he can get close enough to the target to strike

 

Sleight of hand: The 'drunk' man jostles around with the BBC reporter, making it harder for him to notice what is going on

 

 

Rich pickings: The sneering thief walks away with the wallet from the unsuspecting victim

Teamwork: The thief quickly hands the wallet to another member of the gang, who spirits it away

 

Mayor of London Boris Johnson said: ‘These Romanian officers will prove to be a huge asset in cracking down on certain criminal networks who are targeting tourists in central London.’

Official statistics released yesterday showed pickpocketing thefts rose 17 per cent in the past two years.

In 2011/12, a total of 625,000 people fell victim, the Crime Survey of England and Wales showed.

That is an increase of more than 102,000 since 2009/10.

The vast majority of the total are classified as ‘stealth thefts’, but in 83,000 cases the victims’ possessions were ‘snatched’.

Bankers face the prospect of jail as Serious Fraud Office launches criminal probe into interest-rate fixing at Barclays

Hearing: Former chief executive Bob Diamond left Barclays over the matter, before appearing before MPs this week

A criminal investigation has been launched into alleged rigging of the Libor rate within the banking industry, the Serious Fraud Office (SFO) confirmed today.

SFO director David Green QC formally accepted the Libor issue for investigation after Barclays was fined by the Financial Services Authority (FSA) last week for manipulating the key interbank lending rate which affects mortgages and loans.

The claims ultimately led to the resignation of Barclays boss Bob Diamond and have become the focal point of a fierce political debate over ethics in the banking sector.

The investigation could ultimately lead to criminal prosecutions and bankers facing charges in court.

The SFO's update came after it revealed earlier this week that it had been working closely with the FSA during its investigation and would consider the potential for criminal prosecutions.

The Government department, which is responsible for investigating and prosecuting serious and complex fraud, said on Monday the issues surrounding Libor were "complex" and that assessing the evidence would take time.

Under fire: Barclays former chairman Marcus Agius (right) with former CEO Bob Diamond (centre), and former chief executive John Varley (left)

As the SFO prepares its investigation, Labour leader Ed Miliband continued to push for an independent inquiry into the banking scandal despite MPs rejecting the demands.

The Labour leader said that while the party would cooperate with a parliamentary investigation, its remit was too "narrow" and a judge-led probe was still needed.

Mr Miliband also defended the conduct of Ed Balls after the shadow chancellor engaged in a bitter war of words with his opposite number George Osborne in the Commons.

 

 

Barclays boss Bob Diamond resigns

Barclays chief executive Bob Diamond has resigned with immediate effect. The move comes less than a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates. Mr Diamond said he was stepping down because the external pressure on the bank risked "damaging the franchise". Chairman Marcus Agius, who said on Monday he was stepping down, will take over the running of Barclays until a replacement is found. "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth," Mr Diamond said in a statement. He will still appear before MPs on the Treasury Committee to answer questions about the Libor affair on Wednesday. "I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question," Mr Diamond said. Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions. Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress. Prime Minister David Cameron has described the rigging of Libor rates as "a scandal". The Serious Fraud Office is also considering whether to bring criminal charges.

Animal-human hybrid stickers invading Parisian streets

While marketing and mainstream communications campaigns have derived branding inspiration in the comic-like cartoon style of street art, and the values attached to its culture—freedom, community, transgression—the paradox still exists to see it framed and sold through traditional art channels.

We caught up with street artist Rafael Suriani at his recent show, "Collages Urbains", at Cabinet d'amateur gallery in Paris, where he told us more about street art and his relationship with the medium.

Suriani's mark features animals, surviving and thriving in the streets for its powerful and highly recognizable aesthetic. In his half-human-half-animal figures, the animal faces act as liberating masks, allowing the artist to express social criticism in an elegant way. The vibrant, seemingly playful creatures refrain from getting too serious and maintain a suggestive tone that avoids the obvious.

 

The stickers are the result of a double-binding process that first assembles man and animal, then adheres the resulting figure to the wall. In the past, Suriani has drawn from his Latin-American heritage, playing with shamanic mythology figures such as toucan or jaguar. In his recent series, on the other hand, he is more interested in urban domestic animals such as cats and dogs—according to the artist, the convention that they tend to resemble their owners offers a metaphoric way to talk about us people. Recently Suriani made a series of French "Bulldogs" as a special dedication on London walls, using this breed to cartoon and make fun of some French characteristics. Each dog expresses a different state of mind—humor, spirituality, criticism or beauty.

 

Suriani uses the rare technique of hand-painting every poster he sticks on the streets. Making each sticker is the result of a process involving selecting photos from the Internet, cutting them in Photoshop, then screening and painting before cutting the final product. Such repetition lies at the heart of street art practice, which is often based on plastering as many spots as possible, invasion-style.

When considering the ephemeral fate of the piece of work destined for degradation of the elements, police destruction or theft from passers-by, the time and effort for such little reward seems remarkable. Suriani explains, however, that the fleeting nature of his work is freeing and allows him to be audacious with both subject and technique. To him, because there is no pressure or constraint, that achievement is rarely a failure.

In the end, the piece of art is not the only sticker by itself, it is the sticker in its context, seen as a whole on the wall with the daylight shining on it, the motorbikes parked against it or the branch of a tree creeping across. Rarely is the work's time spent on the wall its only life, after all, with the rise of dedicated photographers immortalizing the scenes for the Internet.

Suriani claims his intention to step into the city's landscape by bringing much-needed beauty comes with a positive message. Rather than being aggressive or controversial, Suriani takes pleasure in having people on the street enjoy his figures. His work is bound to the city—physically, geographically and socially—compelling the public to refresh their view of their surroundings and drawing their eyes to the places that typically go unnoticed. As an architect, Suriani has found a way to unveil the city and change people's perception of the scenes they see everyday without truly seeing them. The choice of venue is very important, based on aesthetic consideration with attention to the context and surroundings like the location.

EURO 2012 POSTERS BY DAVID WATSON

Euro 2012 recently began and, for those of you who don’t know, it’s the European football championship. European football is what we Americans call soccer, and it has slowly gained steam over the years, although still not as popular as American football…  Whether you’re into the championship or not (or even sports in general), you’ll probably love these simple, modern posters David Watson ofTrebleseven designed for it.

 

Each poster represents a particular country that’s playing, and the colors of their flag are incorporated into one of the various circular designs. I love the typographic twist these posters have and how they don’t have blatant sports references in them.

Entitled "Cock and Bull," this showpiece by British artist Damien Hirst towers above diners at Tramshed, which only serves chicken and steak.

DAMIEN HIRST

Entitled "Cock and Bull," this showpiece by British artist Damien Hirst towers above diners at Tramshed, which only serves chicken and steak.

Internationally renowned British artist Damien Hirst has created an art piece for a London restaurant in which a whole Hereford cow and cockerel are preserved in formaldehyde in a steel and glass tank, smack dab in the middle of the dining room.

Called "Cock and Bull," the showpiece towers above diners at Tramshed which -- surprise -- serves only steak and whole roasted chicken.

Like a giant aquarium mounted on a TV stand, the art installation is an extension of Hirst's Natural History, a collection of preserved animals he's been creating since 1991 -- arguably his most famous series. Hirst also created a painting for the restaurant opening entitled "Beef and Chicken" which hangs on the mezzanine level and depicts the 1990s cartoon characters "Cow and Chicken."

In the basement level, the Cock ‘n' Bull gallery showcases a rotating art exhibit every six weeks. The first exhibition Quantum Jumping features art work themed around "jumping into a parallel dimension," and runs until July 1.

The classically British menu by chef and restaurateur Mark Hix, meanwhile, is conducive to family-style dining with whole roasted, free-range chickens or marbled sirloin steaks, both served with fries. Appetizers include Yorkshire pudding with whipped chicken livers, cauliflower salad, and smoked Cornish mackerel with beets and horseradish.

It's not unusual for restaurants to house the collections of famous and interesting artists, given the synergy between food and ambiance. Pierre Gagnaire's eponymous restaurant, in Paris, for instance, houses works from the Galerie Lelong, while Wolfgang Puck has also turned his restaurant space into an exhibit for a roster of rotating artists at his CUT steakhouse in Los Angeles.

Meanwhile, restaurants like Eric Ripert's Le Bernardin in New York, Jason Atherton's Pollen Street Social in London and Jean-Georges Vongerichten's Spice Market in London have been shortlisted in the Restaurant & Bar Design Awards this year.

Edward Burtynsky Photographs Farming in Monegros Spain

© Edward Burtynsky, courtesy Flowers, London Dryland Farming #13, Monegros County, Aragon, Spain, 2010

Canadian photographer Edward Burtynsky is having a London moment. Not only are his familiar works on the oil crisis on view but he is also exhibiting a new series examining the impact of long-term farming in Monegros, Spain.

© Edward Burtynsky, courtesy Flowers, London Dryland Farming #21, Monegros County, Aragon, Spain, 2010

These photographs are looking at the tradition of dryland farming carried out over many generations in the north-eastern part of Spain. It's an agricultural region where the land is semi-arid, sparsely populated and prone to both droughts and high winds. The land is made up of sedimentary rock, gypsum, and clay-rich soil. The photographs show the impact of these conditions, as well as man's expanding foot print.

© Edward Burtynsky, courtesy Flowers, London Dryland Farming #8, Monegros County, Aragon, Spain, 2010

Burtynsky is shooting the photos from a helicopter, two thousand feet up: so high that there are almost no details to be identified. The topography looks like an abstract painting.

© Edward Burtynsky, courtesy Flowers, London Dryland Farming #27, Monegros County, Aragon, Spain, 2010

Despite a scarcity of water, generations of farmers have continued to farm, so the photos are a contrast between nature's untamed forces and man's attempts to harness it. The cracks and crevices form writhing lines with deep earthy tones.

© Edward Burtynsky, courtesy Flowers, London Dryland Farming #31, Monegros County, Aragon, Spain, 2010

Assange seeks political asylum

On Tuesday night WikiLeaks founder Julian Assange applied for political asylum at the Ecuadorian Embassy in London after failing in his bid to avoid extradition to Sweden to face sex crime allegations. The 40-year-old Australian is currently inside the building in Knightsbridge, having gone there on Tuesday afternoon to request asylum under the United Nations Human Rights Declaration. The country's foreign minister Ricardo Patino told a press conference in the South American country that it was considering his request. In a short statement last night, Mr Assange said: "I can confirm that today I arrived at the Ecuadorian Embassy and sought diplomatic sanctuary and political asylum. This application has been passed to the Ministry of Foreign Affairs in the capital Quito. I am grateful to the Ecuadorian ambassador and the government of Ecuador for considering my application." The computer expert, who was on £200,000 bail after failing in several attempts to halt extradition, attracted several high-profile supporters including Ken Loach and socialite and charity fundraiser Jemima Khan, who each offered £20,000 as surety. Other supporters included Bianca Jagger and veteran left-winger Tony Benn. The Swedish authorities want him to answer accusations of raping a woman and sexually molesting and coercing another in Stockholm in August 2010 while on a visit to give a lecture. Assange, whose WikiLeaks website has published a mass of leaked diplomatic cables that embarrassed several governments and international businesses, says the sex was consensual and the allegations against him are politically motivated. The Supreme Court last month ruled in favour of a High Court ruling that his extradition was legal. Last week the Supreme Court refused an attempt by him to reopen his appeal against extradition, saying it was "without merit". He had until June 28 to ask European judges in Strasbourg to consider his case and postpone extradition on the basis that he has not had a fair hearing from the UK courts. A statement issued on behalf of the Ecuadorian Embassy said Mr Assange would remain at the embassy while his request was considered.

Bank of England meets amid talk of £50bn stimulus

Bank of England policymakers meet today to decide whether to change interest rates or to pump in more money into the ailing economy, with leading economist saying they may opt to inject a further £50bn of stimulus.

Europe is on the verge of financial chaos.

Global capital markets, now the most powerful force on earth, are rapidly losing confidence in the financial coherence of the 17-nation euro zone. A market implosion there, like that triggered by Lehman Brothers collapse in 2008, may not be far off. Not only would that dismantle the euro zone, but it could also usher in another global economic slump: in effect, a second leg of the Great Recession, analogous to that of 1937. This risk is evident in the structure of global interest rates. At one level, U.S. Treasury bonds are now carrying the lowest yields in history, as gigantic sums of money seek a safe haven from this crisis. At another level, the weaker euro-zone countries, such as Spain and Italy, are paying stratospheric rates because investors are increasingly questioning their solvency. And there’s Greece, whose even higher rates signify its bankrupt condition. In addition, larger businesses and wealthy individuals are moving all of their cash and securities out of banks in these weakening countries. This undermines their financial systems. 423 Comments Weigh InCorrections? Personal Post The reason markets are battering the euro zone is that its hesitant leaders have not developed the tools for countering such pressures. The U.S. response to the 2008 credit market collapse is instructive. The Federal Reserve and Treasury took a series of huge and swift steps to avert a systemic meltdown. The Fed provided an astonishing $13 trillion of support for the credit system, including special facilities for money market funds, consumer finance, commercial paper and other sectors. Treasury implemented the $700 billion Troubled Assets Relief Program, which infused equity into countless banks to stabilize them. The euro-zone leaders have discussed implementing comparable rescue capabilities. But, as yet, they have not fully designed or structured them. Why they haven’t done this is mystifying. They’d better go on with it right now. Europe has entered this danger zone because monetary union — covering 17 very different nations with a single currency — works only if fiscal union, banking union and economic policy union accompany it. Otherwise, differences among the member-states in competitiveness, budget deficits, national debt and banking soundness can cause severe financial imbalances. This was widely discussed when the monetary treaty was forged in 1992, but such further integration has not occurred. How can Europe pull back from this brink? It needs to immediately install a series of emergency financial tools to prevent an implosion; and put forward a detailed, public plan to achieve full integration within six to 12 months. The required crisis tools are three: ●First, a larger and instantly available sovereign rescue fund that could temporarily finance Spain, Italy or others if those nations lose access to financing markets. Right now, the proposed European Stability Mechanism is too small and not ready for deployment. ●Second, a central mechanism to insure all deposits in euro-zone banks. National governments should provide such insurance to their own depositors first. But backup insurance is necessary to prevent a disastrous bank run, which is a serious risk today. ●Third, a unit like TARP, capable of injecting equity into shaky banks and forcing them to recapitalize. These are the equivalent of bridge financing to buy time for reform. Permanent stability will come only from full union across the board. And markets will support the simple currency structure only if they see a true plan for promptly achieving this. The 17 member-states must jointly put one forward. Both the rescue tools and the full integration plan require Germany, Europe’s strongest country, to put its balance sheet squarely behind the euro zone. That is an unpopular idea in Germany today, which is why Chancellor Angela Merkel has been dragging her feet. But Germany will suffer a severe economic blow if this single-currency experiment fails. A restored German mark would soar in value, like the Swiss franc, and damage German exports and employment. The time for Germany and all euro-zone members to get the emergency measures in place and commit to full integration is now. Global capital markets may not give them another month. The world needs these leaders to step up.

Prince Philip in hospital

The Duke of Edinburgh has been taken to hospital with a bladder infection and will miss the rest of the Diamond Jubilee celebrations. Buckingham Palace said Prince Philip, 90, had been taken to the King Edward VII Hospital in London from Windsor Castle as a "precautionary measure". The Queen is still expected to join 12,000 others at the Jubilee concert which is under way at the palace. The prince will remain in hospital under observation for a few days. The prince had appeared to be in good health when he accompanied the Queen on Sunday on the royal barge the Spirit of Chartwell, which formed part of the rain-drenched Jubilee river pageant. He and the Queen stood for most of the 80-minute journey, as they were accompanied by 1,000 boats travelling seven miles down the river to Tower Bridge.

Luka Rocco Magnotta, the 'Canadian Psycho,' arrested in Berlin

Luka Rocco Magnotta was arrested in Berlin Monday after a four-day international manhunt that spanned three countries. The 29-year-old Canadian wanted over a horrific Montreal ice pick murder and decapitation of a Chinese student that he allegedly filmed and posted to the Internet, was arrested in or near an Internet cafe, Berlin police said. Montreal police confirmed they are aware of the reports that Magnotta was arrested, but said they are still in the process of contacting their Berlin counterparts. The arrest comes after French authorities said they were investigating a tip that Magnotta travelled from Paris to Berlin via bus on the weekend. “Somebody recognized him and (then) all the police recognized him,” Berlin police spokesperson Stefan Redlich told CP24 Monday. Handout (Click to enlarge) Magnotta's alleged victim is Lin Jun, a 33-year-old Concordia University student from Wuhan, Hubei, China. He was last seen on May 24, police said, and reported missing on May 29. Redlich said police were called in by a civilian who spotted Magnotta and he was arrested after police asked for his identification at about 2:00 p.m. local time in Berlin. Reuters is reporting it was an employee of the cafe, Kadir Anlayisli, that recognized Magnotta. The cafe is on Karl Marx Strasse, a busy shopping street filled with Turkish and Lebanese shops and cafes in the Neukoelln district of Berlin. German television quoted the owner of the cafe saying Magnotta was surfing the Internet for about an hour before his arrest. Redlich said Magnotta has been taken into custody without incident and will go in front of a judge Tuesday. Canadian officials are expected to start the extradition process for Magnotta in the near future.

Rush for safe havens as euro fears rise

US benchmark borrowing costs plunged to levels last seen in 1946 and those for Germany and the UK hit all-time lows as investors took fright at what they see as a disjointed policy response to the debt crisis in Spain and Italy. In a striking sign of the flight to haven assets, German two-year bond yields fell to zero for the first time, below the equivalent rate for Japan, meaning investors are willing to lend to Berlin for no return. US 10-year yields fell as low as 1.62 per cent, a level last reached in March 1946, according to Global Financial Data. German benchmark yields reached 1.26 per cent while Denmark's came close to breaching the 1 per cent level, hitting 1.09 per cent. UK rates fell to 1.64 per cent, the lowest since records for benchmark borrowing costs began in 1703. "They are extreme levels because we are in an extremely perilous situation. People just want to put their money somewhere where they think they will get it back. People may soon be paying Germany or the US to look after their money," said Gary Jenkins, head of Swordfish Research, an independent credit analysis company. The flight to safety came as the situation in Italy and Spain, the eurozone's third- and fourth-largest economies, deteriorated further. Italy held a disappointing debt auction and saw its benchmark borrowing costs rise above 6 per cent for the first time since January. The euro fell 0.8 per cent against the dollar to under $1.24 for the first time in two years. Confusion over how the Spanish government's rescue of Bankia, the stricken lender, will be structured led the premium Madrid pays over Berlin to borrow to hit fresh highs for the euro era at 540 basis points. Analysts said the elevated level meant that clearing houses could soon raise the amount of margin, or collateral, that traders need to post against Spanish debt, a move that led to the escalation of crises in Portugal and Ireland. The European Central Bank has made clear to Spain that it cannot use the bank's liquidity operations as part of a recapitalision of Bankia. However, the central bank said on Wednesday it had not been officially consulted on the plans. Equity markets globally fell on the eurozone fears with bourses in Paris, Frankfurt and London all dropping 2 per cent. But Nick Gartside, international chief investment officer for JPMorgan Asset Management, noted that while US bond yields had halved since April last year the S&P 500 equity market was at the same level. "One of those two markets is mispriced. Core government bonds are an efficient market and they are ahead," he added. Investors said borrowing costs for the US, UK and Germany were likely to continue to fall amid a worsening economic backdrop and the threat of more central bank intervention. Wealth managers have been moving client assets into currency havens in recent weeks, with the Swiss franc and the US dollar among the biggest beneficiaries "Risk aversion, a rapidly slowing global economy and unusually low policy rates will pin these short and intermediate maturity bonds at unprecedented low levels for quite a while," said Mohamed El-Erian, chief executive of Pimco, one of the world's largest bond investors. Mr Gartside said he could easily see German rates going below 1 per cent, following a path that only Japan and Switzerland have taken among major economies, while the US and UK could dip under 1.5 per cent. Markets are increasingly resigned to more turmoil until policy makers take more radical action. The two most popular plans of action for investors are for the ECB to buy Spanish and Italian bonds in unlimited size or for eurozone countries to agree on a fiscal union involving the pooling of debt. "You have to throw everything at it. Spain is just too big for half measures. The next intervention has to be not just massive in size but it has to show a total commitment," said Mr Jenkins. He recommends that the ECB set targets either for the premium Spain and Italy pay to borrow over Germany or for their yields.

Euro break-up 'could wipe 50pc off London house prices'

Property prices in the capital’s most sought-after postcodes have been driven up by investors moving funds out of assets held in euros to buy into what is seen as a “safe haven” alternative. Foreign money seeking a refuge from the wider economic turmoil accounted for 60pc of acquisitions of prime central London property between 2007 and 2011, according to a report by Fathom Consulting for Development Securities. If the shared currency broke up completely, London property would initially be boosted by the continued flight towards a safe haven, the report predicts. But, once the break-up had taken place, demand for these assets as an insurance against this event would start to ebb. “Although fears about a messy end to the euro debt crisis may account for much of the gain in prime central London (PCL) prices that has taken place over the past two years, we find that a break-up of the single currency area is also the single greatest threat to PCL,” said researchers.

Leveson - The Hunt is on

Up until now, Lord Justice Leveson has only held the future of the British press in his hands. Today, despite all his protests to the contrary, his inquiry may determine the fate of the culture secretary, Jeremy Hunt. The judge insists that it is not his job to put any minister in the dock and that he certainly will not be giving his verdict on whether there have been any breaches of the ministerial code. Nevertheless, the prime minister has made it clear that he sees today's hearing as the moment when Mr Hunt must defend his much criticised handling of News Corp's £8bn bid for total control of BSkyB. The culture secretary has, I'm told, submitted more than 160 pages of internal memos, emails and text message transcripts to the Leveson Inquiry. I understand that he will insist that, despite having originally been a cheerleader not just for Rupert Murdoch but also for his bid, he acted in ways which frustrated it rather than accelerated it once he was made the minister in charge. He will claim that he referred it to the broadcasting regulator Ofcom when told by officials that it wasn't necessary to do so. He is likely to face questions about why he did not follow Ofcom's advice to refer the bid to the Competition Commission. He is likely to reply that he was given legal advice that he had first to consider News Corps offer to spin off Sky News so as to deal with so-called plurality issues. The culture secretary is likely to be asked how he can claim to have been unaware of the scale or nature of the contact between News Corp and his political adviser, Adam Smith - who resigned once his flood of emails and texts were revealed. I understand that Jeremy Hunt originally believed that his adviser had done nothing wrong and told friends he would resign himself rather than letting a junior official resign for him. The prime minister shows no sign yet of wanting to force him out - believing that however bad things may now look, Mr Hunt didn't actually do anything wrong or anything which helped the Murdochs and their bid. Labour argue that - even before today's hearing - it is evident the culture secretary should go as he is in breach of the ministerial code for failing to supervise his adviser, and for misleading the House of Commons when he wrongly asserted he had published all contacts between his department and News Corp - as well as claiming never to have intervened to affect the outcome of the bid.

Coulson on Sheridan perjury charge

David Cameron's former communications chief Andy Coulson has been charged over allegations he committed perjury during the trial of former MSP Tommy Sheridan. The 44-year-old was detained for questioning at Govan police station in Glasgow by officers from Strathclyde Police. More than six hours later, the force confirmed he had been arrested and charged with perjury. A report will be sent to the procurator fiscal which will decide if Coulson is to face court proceedings. The former News of the World editor gave evidence at Sheridan's perjury trial at the High Court in Glasgow in December 2010, while he was employed by Downing Street as director of communications. At the trial, he claimed he had no knowledge of illegal activities by reporters during the time that he was editor of the now-defunct newspaper. He said: "I don't accept there was a culture of phone hacking at the News of the World." Sheridan was ultimately jailed for three years in January last year after being found guilty of perjury during his 2006 defamation action against the News of the World. He had been awarded £200,000 in damages after winning the civil case but a jury found him guilty of lying about the tabloid's claims that he was an adulterer who visited a swingers' club. The former Scottish Socialist Party (SSP) leader was convicted of five out of six allegations in a single charge of perjury relating to his evidence during the civil action at the Court of Session in Edinburgh. Sheridan was released from jail in January this year after serving one year of his sentence and vowed to continue the fight to clear his name. Coulson was arrested last year in relation to Scotland Yard's long-running investigation into phone hacking at the newspaper. He was held in July on suspicion of conspiring to intercept communications and corruption, and had his bail extended earlier this month. Coulson resigned as editor in 2007 after the paper's former royal editor Clive Goodman and private investigator Glenn Mulcaire were jailed for phone hacking. In May that year, he was unveiled as director of communications and planning with the Conservative Party. He quit his role as Downing Street communications chief in January last year after admitting the News of the World phone-hacking row was making his job impossible.

Julian Assange's fight to evade extradition to Sweden appears doomed despite stay of execution

Julian Assange's fight to evade extradition to Sweden appeared doomed today though he was given a stay of execution by the highest court in the land. His celebrity-endorsed legal battle trundled on without him as the self-proclaimed champion of truth and transparency remained stuck in London's notorious traffic, undoubtedly disappointing his legion of fans. While vastly diminished in number from the early days of the furore surrounding the WikiLeaks founder, they were as vociferous as ever, penned in outside the Supreme Court yesterday, carrying megaphones, guitars and banners proclaiming “Free Assange” and “God Save Julian”. Mr Assange, 40, had argued that an European Extradition Warrant from Sweden to face allegations of rape and sexual molestation was invalid as the public prosecutor who issued it did not constitute a “judicial authority”. He denies the accusations, insisting they are “politically motivated”. His case was partially trumped by the French translation of the words judicial authority, which judges at the Supreme Court said carried a far wider meaning that simply a judge or court. By a majority of five to two they decided the practice by many European countries to have public prosecutors issue such warrants countered the interpretation in United Kingdom and his appeal failed. Nevertheless they granted his lawyers 14 days to apply to have the case re-opened after they insisted that they had not been given an opportunity to argue on the very legal points on which the judges had based their decision.

FORMER Downing Street communications chief Andy Coulson has been arrested on suspicion of committing perjury during the Tommy Sheridan trial

Andy Coulson has been arrested on suspicion of perjury. Picture: Getty

FORMER Downing Street communications chief Andy Coulson has been arrested on suspicion of committing perjury during the Tommy Sheridan trial at the High Court in Glasgow, the Crown Office said today.

 

The 44-year-old was detained in London this morning by officers from Strathclyde Police.

 

Coulson gave evidence in Mr Sheridan’s perjury trial at the High Court in Glasgow in December 2010.

 

He was also arrested last year in relation to Scotland Yard’s long-running investigation into phone-hacking at the News of the World.

 

He was held in July on suspicion of conspiring to intercept communications and corruption and had his bail extended earlier this month.

 

A Strathclyde Police spokesman said: “Officers from Strathclyde Police Operation Rubicon detained a 44-year-old man in London this morning under section 14 of the Criminal Procedures Scotland Act on suspicion of committing perjury before the High Court in Glasgow.

 

“It would be inappropriate to comment any further at this time.”

 

It is understood Coulson is on his way to Glasgow.

 

Operation Rubicon detectives have been looking at whether certain witnesses lied to the court during Sheridan’s trial as part of a “full” investigation into phone hacking in Scotland.

 

Mr Coulson, then employed by Downing Street as director of communications, told the trial in December 2010 he had no knowledge of illegal activities by reporters while he was editor of the News of the World.

 

He also claimed: “I don’t accept there was a culture of phone hacking at the News of the World.”

Former News of the World Editor arrested in dawn raid on his London home

 

PR man: Andy Coulson was held today by Strathclyde Police,David Cameron’s former No 10 spin doctor Andy Coulson was arrested today on suspicion of committing perjury.

Mr Coulson, 44, was detained at his home in Dulwich at 6.30am by seven officers from Strathclyde police and taken to Glasgow where he will be questioned.

The case centres on claims that he misled a court about his knowledge of phone-hacking during a criminal trial in Glasgow. The former News of the World editor, hired by the Prime Minister as his director of communications, told a court in 2010 that he had no knowledge of illegal voicemail interception when in charge of the tabloid.

During the perjury trial of former Scottish MP Tommy Sheridan, Mr Coulson said: “I don’t accept there was a culture of phone hacking at the News of the World.” He also denied knowing that the

 newspaper paid corrupt police officers for tip-offs. Mr Cameron has faced questions over his decision to bring Mr Coulson into the heart of government. Mr Coulson has already been arrested by the Met on suspicion of phone-hacking and bribing public officials.

The perjury charge, which carries a maximum prison sentence of seven years, is potentially the most serious facing the former Conservative Party spokesman.

One Downing Street source said the arrest came as a “complete surprise”.

Mr Coulson was a major witness in a trial involving Sheridan who was accused of lying in court during a libel victory against the NoW.

Coulson was editor when it published a story that labelled Sheridan an adulterer who visited swingers’ clubs. He was called as a witness and told the court that he had no knowledge of illegal activities by reporters.

Sheridan was jailed for three years last year after being found guilty of perjury during his 2006 defamation action against the NoW. He had successfully sued the newspaper over its claims.

Strathclyde police announced its probe into Mr Coulson last July but it was thought to be taking a back seat as five major Scotland Yard inquiries into the Murdoch media empire rumbled on.

However, the Standard can disclose that officers from Scotland recently visited London to interview several former NoW staff about their old boss.

Under Scottish law a suspect is detained on suspicion of an offence unlike in England and Wales where a suspect is arrested. Mr Coulson has not been charged.

Abu Qatada to remain in Britain for at least five months to fight new appeal

Lawyers for Qatada also confirmed they would take his fight against deportation back to Europe if the Special Immigration Appeals Commission (Siac) rules against him in October or November. Edward Fitzgerald QC, representing Qatada, told a central London hearing: "There can be no question of deportation being imminent." Qatada was not present for today's hearing, which is deciding whether he should be granted bail. Qatada, described by a judge as Osama bin Laden's right-hand man in Europe, is having an application for bail heard by a senior immigration judge in London. The radical cleric is being held in a high-security prison while he fights deportation to Jordan over terror charges.

Over 100 Bulgarians investigated for organized criminal groups in EU: Bulgarian interior minister

More than 100 Bulgarian citizens are being investigated for organized criminal groups in the EU, Bulgarian Interior Minister Tsvetan Tsvetanov said at a press conference, cited by FOCUS News Agency. In the past two years we have been exchanging information not only about [Evelin Banev] Brendo, but also about other people with criminal history. In 2011 we increased the information exchange by more than 370%. In 2011 we exchanged information with Europol about 328 people against 58. Investigations in EU countries concern them, the minister said further. Political will is the most important thing a government should have so that we could open to our Euro-Atlantic partners for communication and work. I would like to thank Carabinieri for their trust. This was a challenge to us. I think today’s operation makes Bulgaria more stable in terms of the Euro-Atlantic partnership and this was noted by the Europol director, added Tsvetan Tsvetanov.

Europe's elite would never allow us to close our borders if Greeks flee their country

We learned this weekend that, supposedly, emergency border plans are being drawn up in case of a catastrophic meltdown in the Eurozone. There is a justified concern that, were the Euro to go belly-up, it would not just be the economic shockwaves that spread across the Channel. Were the worst to happen, and the debt contagion spread from Greece to Spain and even several other European countries, it could lead to Britain facing a major immigration problem. Restrictions: Mrs May suggested emergency border controls are being drawn up to control an influx of Greeks Faced with economic collapse in their home countries, would not tens of thousands of Greeks, Spainards or Italians look to the UK as a haven? (In this scenario, Germany and France would have themselves been so hobbled by the Euro meltdown that they would not present a viable alternative.) So what would the UK Government's response be in such a situation?   More... May pledges to stop Greek migrants flooding into Britain if they are forced to pull out of the Euro We won't shut the door on migrants fleeing eurozone, says Clegg as he hits out at 'apocalyptic' warnings RIGHTMINDS: Crisis, what crisis? Have another Ouzo, Greece is staying in the eurozone In an interview with the Daily Telegraph, Home Secretary Theresa May says the Government is already 'looking at the trends' to see whether immigration from European countries is increasing. Asked whether emergency immigration controls are being considered, Mrs May said: 'It is right that we do some contingency planning on this [and] that is work that is ongoing.' Concerns: Theresa May fears a Grexit could mean migrants flooding into Britain to look for work but border controls could face opposition from Europe, including President of the European Council Herman Van Rompuy, right All this sounds very reassuring: contigency plans, monitoring and so on. But in reality, a UK government attempting in any way to restrict Greeks, or Italians, or Poles or Czechs for that matter, would have very few options indeed. What Mrs May's lawyers are in all likelihood telling her is that yes, they were right on Abu Qatada, and no, she wouldn't be allowed to close the border. The minute Britain made any attempt to assert its national sovereignty and prevent even one EU migrant from entering, Europe would start flexing its muscles. Free movement rules of EU citizens are at the core of the European 'project', and for the massed ranks of Europe's bureaucraric elite, they are utterly sacrosanct. Witness their howls of outrage when, last year, France became concerned about north african migrants coming in through southern Europe and started blocking trains at the border. The reality is that Britain gave up control of its borders to Europe a long time ago, and is utterly impotent when it comes to restricting EU migrants. Those powers are now entirely vested in the European Commission, and unless Britain, or indeed Greece, were to withdraw from the EU or be kicked out, the Home Secretary has about as much power as Dover District Council. And don't think for a minute that in such an emergency things would change and a pragmatic approach allowed, relaxing some of the rules: the most important thing to Europe's elite is the preservation and continuance of the project itself. The welfare and best interests of its citizens will always be of secondary importance to their centralisation of power, however bad things get.

EU urges Greece to stay in euro, but plans for possible exit

European Union leaders, advised by senior officials to prepare contingency plans in case Greece decides to quit the single currency, urged the country to stay the course on austerity and complete the reforms demanded under its bailout programme. After nearly six hours of talks held during an informal dinner, leaders said they were committed to Greece remaining in the eurozone, but it had to stick to its side of the bargain too, a commitment that will mean a heavy cost for Greeks. "We want Greece to stay in the euro, but we insist that Greece sticks to commitments that it has agreed to," German Chancellor Angela Merkel told reporters after yesterday's evening summit in Brussels dragged long into the night. Three officials told Reuters the instruction to have plans in place for a Greek exit was agreed on Monday during a teleconference of the Eurogroup Working Group (EWG) - experts who work for eurozone finance ministers. The Greek finance ministry denied there was any such agreement but Belgian Finance Minister Steven Vanackere, said: "All the contingency plans (for Greece) come back to the same thing: to be responsible as a government is to foresee even what you hope to avoid." Two other senior EU officials confirmed the call and its contents, saying contingency planning was only sensible. In its monthly report, Germany's Bundesbank said the situation in Greece was "extremely worrying" and it was jeopardising any further financial aid by threatening not to implement reforms agreed as part of its two bailouts. It said a euro exit would pose "considerable but manageable" challenges for its European partners, raising pressure on Athens to stick with its painful economic reforms. Greek officials have said that without outside funds, the country will run out of money within two months and there remains the threat that if it crashes out of the eurozone, other member states could be brought down too. A document seen by Reuters detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought with the EU and IMF possibly giving up to 50 billion euros to ease its path. Although EU leaders' minds will have been focused by that prospect, disagreements have flared over a plan for mutual eurozone bond issuance and other measures to alleviate two years of debt turmoil, such as giving countries like Spain an extra year to make the spending cuts demanded of them. "The idea is to put energy into the growth motor. All the member countries don't necessarily share my ideas. But a certain number expressed themselves in the same direction," new French President Francois Hollande told reporters. For the first time in more than two years of crisis summits, the leaders of France and Germany did not huddle beforehand to agree positions, marking a significant shift in the axis which has traditionally driven European policymaking. Instead, Hollande met Spanish Prime Minister Mariano Rajoy in Paris to discuss policy, before the pair travelled to Brussels by train. Despite fears Greeks could open the departure door if they vote for anti-bailout parties at a 17 June 17, Spain, where the economy is in recession and the banking system in need of restructuring, is at the front line of the crisis. After meeting Hollande, Rajoy said he had no intention of seeking outside aid for Spain's banks, which are laden with bad debts from a property boom that bust and still has some way to go before it touches bottom. But his government said its rescue of problem lender Bankia would cost at least 9 billion euros and it is also seeking ways to help its highly indebted regions meet huge refinancing bills. Socialist Hollande's election victory has significantly changed the terms of the debate in Europe, with his call for greater emphasis on growth rather than debt-cutting now a rallying cry for other leaders. That has set up a showdown with conservative Merkel, whose primary objective is budget austerity and structural reform. At his first EU summit, Hollande chose to make a stand on euro bonds - issuing common eurozone debt - despite consistent German opposition to the idea. "I was not alone in defending euro bonds," he said. Merkel showed no sign of dropping her objections to the proposal, which she has said can only be discussed once there is much closer fiscal union in Europe. "There were differences in the exchange about euro bonds," she said bluntly. The Netherlands, Finland and some smaller eurozone member states support her. No major decisions were made at yesterday's summit, which was intended to promote ideas on jobs and growth ahead of another meeting at the end of June. But debate was intense, not just over euro bonds but over how to rescue banks and whether to give more time to struggling eurozone countries to meet their budget deficit goals. "We haven't come together to confront each other ... but we have to say what we think - what are the right instruments, the right methods, the right steps, the right initiatives to raise growth," Hollande said. The leaders discussed broad measures to stem the fallout from a winding up or restructuring of bad banks, EU officials said, with the European Central Bank pressing for the bloc to stand behind its struggling lenders but with Merkel's approval seen as far from guaranteed. At the heart of the discussion are proposals from the European Commission for a legal framework to wind up or reorganise insolvent banks so as to avoid a repeat of the multi-trillion-euro taxpayer bailouts during the financial crisis. Another suggestion is for the euro zone's rescue funds to be allowed to recapitalise banks directly, rather than having to lend to countries for on-lending to the banks. But that is another idea with which Germany is uncomfortable. Having rallied on Tuesday, European stocks dropped 2.2 per cent as investors priced in a lack of dramatic policy action. The euro tumbled against the dollar to its lowest since August 2010 and Spanish and Italian borrowing costs climbed. A German two-year debt auction gave a stark illustration of how money is dashing for safe havens. Investors snapped up the 4.5 billion euros of paper on offer even though it came with a zero coupon - offering no return at all.

Could Greece End Up as Europe's Lehman Brothers?

As jitters about Greece leaving the eurozone reach a boiling point, one of the key lessons of the Lehman Brothers collapse should loom large over the heads of policymakers: the interconnectedness of the financial system can create unforeseen consequences that quickly ripple around the world. The chances of a Greek exit appear to have hit a new high this week as leaders in Europe are reportedly planning contingencies ahead of a key vote in Greece next month and as financial markets set off alarm bells once again. While there are clear differences between this scenario and the one experienced in 2008 with Lehman, there are also eerie similarities that bear watching. “With Lehman, I don’t think people appreciated the interconnections. I see the same argument with Greece,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman. During the Lehman crisis, U.S. policymakers displayed “hubris” about the fallout of a failure, essentially saying, “Sorry, we can’t save Lehman, but we’ll fix the mess. Little did they know how big of a mess it would be,” said Chandler. Exit Could Backfire Through Contagion Some market participants believe the eurozone should cut Greece loose, making an example out of the debt-ridden country in an effort to shock others like Spain, Portugal and Italy into getting their own houses in order. “There must be a credible threat. A Greek exit would show some backbone” and “provide a strong incentive to other countries to adhere to the rules -- or else,” Cam Harvey, a finance professor at Duke University, wrote in an e-mail. This thinking is reminiscent of the apparent desire by Henry Paulson and other U.S. officials to draw a line in the sand regarding moral hazard during the Lehman episode. However, some forecasters believe the overall cost of a Greek exit could range between 500 billion and 1 trillion euros ($639 billion to $1.28 trillion), including cross-border contagion impact. “Consequences would be severe and that contagion to the other weak eurozone economies would be difficult to stop,” Mike Ryan, chief investment strategist at UBS (UBS: 11.70, +0.05, +0.43%), wrote in a note on Monday. Impact on Banking System Due to the domino nature of both crises, contagion spreads to the parties perceived by the markets to be the next weakest. In 2008, this meant the markets set their sights on Merrill Lynch and eventually Morgan Stanley (MS: 13.37, +0.06, +0.45%) and Goldman Sachs (GS: 98.04, +0.51, +0.52%), forcing the government to step in. In Europe, analysts believe the bond markets would likely punish Spain and Italy with higher yields, threatening to shut them out entirely. “If you told me Greece is squeezed out, then why shouldn’t Portugal be next? It’s a slippery slope,” said Chandler. “Once the toothpaste is out of the tube, it’s hard to squeeze it back in.” The Greek cancer could easily spread through the banking system as the Lehman one threatened to. If Greek banks are forced to issue residents a severely devalued drachma instead of the euro, depositors in other weak eurozone countries could yank their cash, sparking a bank run that threatens the European banking system. “I share the view that if Greece defaults and exits the euro, the consequences for the eurozone -- its financial system and real economy -- will be profound,” Greece’s former prime minister, Lucas Papademos, told The Wall Street Journal this week. Overblown Fears of Exit? Of course, these dire forecasts that are being repeated by some in Greece could turn out to be too severe. After all, policymakers in Europe have had an enormous amount of time to brace for a potential exit by Greece or another member. That stands in stark contrast to 2008, when the rapid demise of Lehman seemed to take U.S. officials by surprise. “Greece is no surprise. It has been in our face for years and there have been many supports that have been offered by the eurozone,” said Harvey. Jan Randolph, director of sovereign risk at IHS Global Insight, noted that the European Central Bank and other authorities have had time to construct bad banks and force the private sector to write down the value of Greek debt. “The Europeans do have contingency plans they could use to absorb the shock of an actual default,” said Randolph. Harvey said these preparations should prevent the disorderly nature of the Lehman unwinding that caused panic and spread the crisis. While the Greeks have “been using this contagion card” as leverage in their negotiations, “it’s a game of poker that Greece cannot win,” said Randolph, who is based in London. “There is no way the IMF and Germany will blink. This is the way European politics works --    it’s brinksmanship,” said Randolph. “At least we’re not using armies this time.” Risk Worth Taking? Another key difference between Greece and Lehman is that while Lehman mostly ceased to exist after collapsing, wiping out shareholders, Greece and its struggling residents will still be here even if it leaves the euro. There is “a lot of the talk is about the downside of leaving the euro -- what about the upside?” said Harvey. Specifically, he pointed to the ensuing devaluation of the drachma that will make Greece’s debt load more manageable, boost exports, lower labor costs and encourage growth. This balancing act between two difficult outcomes for Greece is playing out in the financial markets each day. As the euro on Wednesday tumbled to levels unseen since August 2010, the Dow is on track for its 14th decline in the last 16 sessions, something that hasn’t happened since August 1982. Keeping in mind the miscalculations of 2008 in the wake of Lehman, investors’ preference may be for the apparent safer route. “It is reasonable to expect the eurozone authorities, including the ECB, to take action to try to prevent contagion in the event that Greece leaves. However, given the experience over the last two or three years, it is hard to have confidence that they will have a great deal of success,” Ryan wrote.

Euro Sinks to Lowest Since 2010 as Stocks, Commodities Tumble

The euro sank to an almost two-year low, while stocks and commodities tumbled, amid swelling concern Greece will exit the European currency union. The yen and dollar strengthened while German bunds and U.S. Treasuries rose. Oil dipped below $90 a barrel for the first time since November. The euro lost as much as 1.1 percent to $1.2545, the lowest since July 2010, as of 2:35 p.m. in New York. The Standard & Poor's 500 Index slid 1 percent and the Dow Jones Industrial Average dropped as much as 191 points before paring losses. The yen rose against 15 of 16 most-traded peers and the dollar climbed versus 14 of 16. The 30-year German bund yield dropped below 2 percent for the first time, while 10-year U.S. note yields decreased five basis points to 1.72 percent. The S&P GSCI Index fell to the lowest since October on a closing basis. European leaders are meeting today to discuss the region's debt crisis after deepening concern Greece will exit the euro wiped about $4 trillion from equity markets worldwide this month. Japan's exports in April trailed economists' estimates, underscoring the risk that weakness in global demand may limit a rebound in the world's third-biggest economy. "We know the summit is not going to resolve anything and it will be hard to find particularly positive headlines," said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York.

Three killed in northern Italy earthquake

Three people have been killed in a 5.9-magnitude earthquake that struck northern Italy near Bologna, according to reports. The quake that struck at just after 4am local time was centred 21.75 miles north-northwest of Bologna at a relatively shallow depth of six miles, the US Geological Survey said. Italian news agency Ansa, citing emergency services, said two people were killed in Sant'Agostino di Ferrara when a ceramics factory collapsed. Another person was killed in Ponte Rodoni do Bondeno. In late January, A 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. The tremor was one of the strongest to shake the region, seismologists said. Initial television footage indicated that older buildings had suffered damage. Roofs collapsed, church towers showed cracks and the bricks of some stone walls tumbled into the street during the quake. As dawn broke over the region, residents milled about the streets inspecting the damage. Italy's Sky TG24 showed images of the collapsed ceramics factory in Sant'Agostino di Ferrara where the two workers were reportedly killed. The structure, which appeared to be a hangar of sorts, had twisted metal supports jutting out at odd angles amid the mangled collapsed roof. The quake “was a strong one, and it lasted quite a long time”, said Emilio Bianco, receptionist at Modena's Canalgrande hotel, housed in an ornate 18th century palazzo. The hotel suffered no damage and Modena itself was spared, but guests spilled into the streets as soon as the quake hit, he said. Many people were still awake in the town since it was a “white night”, with shops and restaurants open all night. Museums were supposed to have remained open as well but closed following the bombing of a school in southern Italy that killed one person. The quake epicentre was between the towns of Finale Emilia, San Felice sul Panaro and Sermide, but was felt as far away as Tuscany and northern Alto Adige. The initial quake was followed about an hour later by a 5.1-magnitude aftershock, USGS said. And it was preceded by a 4.1-magnitude tremor. In late January, a 5.4-magnitude quake shook northern Italy. Some office buildings in Milan were evacuated as a precaution and there were scattered reports of falling masonry and cracks in buildings. In 2009, a devastating tremor killed more than 300 people in the central city of L'Aquila.

‘Save euro’ plea to Germans as Spain slumps

BRITAIN yesterday piled pressure on German Chancellor Angela Merkel to save the euro. 6 comments Related Stories PM: Make or break for euro HE to issue plea to Merkel to fork out as only way to stave off meltdown New French Pres gets a soakingFrench warning for CameronSarky poll malarky will leave PM narky David Cameron and Chancellor George Osborne said she must use her financial clout to stop the single currency collapsing. The PM hammered the message home in emergency talks via video-link with Mrs Merkel and French president Francois Hollande. It came as the chaos in Greece spread to Spain — with fears of a run on banks in both countries. Greeks have taken £560million from local banks in the past week. And yesterday Spain’s Bankia bank was forced to deny reports customers had taken £800million out of its coffers in the past seven days. Last night the fears hit Santander UK as credit rating agency Moody’s downgraded the bank along with its Spanish owner and 15 other Spanish banks. And credit agency Fitch downgraded Greece on fears it will be booted out of the Eurozone. Earlier, Mr Osborne said the Treasury had drawn up emergency plans to cope with Greece quitting the euro. He told MPs: “Britain will be prepared for whatever comes.” Mr Cameron had warned countries such as Greece and Spain can only survive if richer countries did more to “share the burden of adjustment”. He also backed Eurobonds to raise billions to prop up crisis-hit countries — a proposal that would have to be bankrolled by Berlin. After the video chat, a Downing Street spokesman said the PM urged the eurozone to take “decisive action to ensure financial stability and prevent contagion”.

Spain’s banking crisis reached Britain’s high streets last night when the credit rating of Santander UK was cut.

In a sweeping reassessment, ratings agency Moody’s announced in Madrid that it is downgrading 16 Spanish banks because it could not be sure of the ability of the country’s government to provide the necessary support.

Santander UK was among the banks highlighted after the ratings agency took aim at its parent Banco Santander, based in Spain. 

The Spanish banking crisis has hit the British high street, with the news that Santander has had its credit rating cut

Santander is one of the biggest players in UK retail banking, having taken over the former Abbey National, Alliance & Leicester, Bradford & Bingley and most recently the English branches of the Royal Bank of Scotland.

The new lower A2 credit rating is certain to be a cause of anxiety to Santander UK’s millions of British customers. 

Nevertheless, they can be confident that their deposits up to £85,000 are guaranteed by the British government should there be a loss of confidence.

The big question for Spain and for the eurozone is whether it is a giant version of the Republic of Ireland.

To put this another way, will the cost of rehabilitating its banking system be greater than Spanish taxpayers can afford? And if the price is unbearably large, would it make sense for Spain to request a bailout from the International Monetary Fund or the eurozone's European Financial Stability Facility (EFSF) or both? According to a senior banker, we will get some of the answers on Friday, when the Spanish government is expected to decide what level of losses Spanish banks should be obliged to recognise on their reckless property and construction loans, on top of 50bn euros of provisions they have already been forced to make to cover potential losses. This banker expects just a handful of savings banks - of which the biggest and most important is Bankia - to be instructed to set aside 25bn to 30bn euros to cover the additional costs of loans going bad. This is expected to lead to the partial nationalisation of Bankia, which is Spain's biggest retail bank with around 15% of domestic banking assets. The partial nationalisation will be a controversial operation, because it will lead to huge losses for many thousands of Spanish investors, who bought shares in Bankia and provided it with loan capital when it was listed on the stock market last year. There are fears that if the value of Bankia's shares were wiped out in the rescue, this could prompt such anxiety among savers that they could withdraw their savings from Bankia, further weakening the bank. So why are Spain's savings banks in such a mess? Well, the central bank, the Bank of Spain, has estimated - in its last Financial Stability Report - that Spanish banks are sitting on what it calls "troubled" property and construction loans of 184bn euros, equivalent to more than 17% of Spanish GDP. Those loans are the poisonous legacy of a housing and construction boom that saw 5 million new homes built between 1997 and 2007, twice the increase in new Spanish households. Whole ghost towns were built. Such is the dire quality of these loans that the banks are assuming they will ultimately get back only half or less of what they lent. So it is possible that the banks are getting close to having properly recognised the scale of pain they face on this category of their lending. However, they may not yet have made proper provision for likely losses on other categories of loan, notably residential mortgages, loans to small companies, and loans to highly indebted big companies. That is why bankers, regulators and analysts increasingly fear that the capital banks will need as a protection against these losses may exceed what can be raised from conventional investors and Spanish taxpayers. That said, there are substantial costs and risks for Spain in borrowing the money from the eurozone's bailout fund, the EFSF, quite apart from the humiliation of being seen to have its economic policy dictated by Germany. One potential pitfall of taking a rescue loan from the eurozone is that it would probably have the effect of subordinating Spain's existing sovereign debt. To put it another way, the implicit value of the Spanish government's existing debts would be reduced. And that would then force even greater losses, perhaps calamitous losses, on the banks, which have lent well over 260bn euros to the Spanish public sector. So some bankers argue that Spain might be better off asking the IMF for emergency funds that could go directly to the banks, rather than counting as a loan to the government. How long can the Spanish government prevaricate and fail to make sure the banks have all the capital they need? Well probably not that long, because Spanish banks are reining in their lending, and thus damaging the Spanish economy, in response to their capital deficiency. Based on the recently published results of Spain's seven publicly listed banks, the investment bank Morgan Stanley calculates that lending in Spain is contracting at a damaging annual rate of around 8%. A credit crunch is exacerbating Spain's recession. If all this sounds familiar, that is because it is - to a great extent - a re-run of the collapse of Ireland's banks. Just like Spain, Ireland for months insisted it had the resources to sort out its banks on its own. But in the autumn of 2010, it capitulated in the face of horrific market reality, and went cap in hand to the eurozone and IMF. The other lesson of Ireland, many would say, is that the longer a government fails to face up to the true weakness of its banks, the bigger the eventual costs of the remedy.