Thousands of young people camped out overnight in the main square of Madrid to protest against high unemployment and the Spanish government's austerity measures.

Thousands of young people camped out overnight in the main square of Madrid to protest against high unemployment and the Spanish government's austerity measures.

The demonstrations who woke Saturday in Puerta del Sol plaza had made up on the largest crowd yet in nearly a full week of protests.

The demonstration was deemed illegal, but by morning, the number of protesters had thinned enough to allow cleaners in and traffic to flow as the sun rose.

Police say 25,000 protesters defied the ban, cramming into the square and filling the streets nearby.

There was a moment of quiet at midnight as the ban went into effect. Then the crowd erupted in jeers, cheers and chanting.

All of this began as a spontaneous sit-in in the centre of the capital by young people who are frustrated by mass employment and what they say are inept politicians.

Youth unemployment in Spain is at 45 percent. Overall, the country has a jobless rate of 21.3 per cent, the highest in the eurozone.

Since last Sunday, hundreds of young Spaniards have camped out in the square nightly, and by day, the square has been the scene of animated debates.

Spain's electoral board ruled the camp should have been disbanded at midnight to allow for what is normally called a "day of reflection," when campaigning and political acts are banned the day before regional and local elections.

So far police have not intervened and the protests have grown larger by the day.

A cruise ship crew member is presumed dead after he disappeared when he jumped from the vessel into the freezing waters of the English Channel.

A cruise ship crew member is presumed dead after he disappeared when he jumped from the vessel into the freezing waters of the English Channel.
Eclipse was believed to have been en route from Cherbourg to Southampton
An overnight search for the 31-year-old Filipino man has been called off.
It has been revealed he was captured on CCTV climbing over a railing and jumping from the Celebrity Eclipse cruiser about 10.15pm on Friday.
The luxury liner, owned by Celebrity Cruises, was about eight miles north of Cherbourg, France, when the incident happened.
The crew alerted the French coastguard before turning the ship around in an attempt to find the man.
We can now presume that he is dead. The water was very cold and there is no hope for him.
A coastguard source
A Celebrity Cruises spokesman said the travel company was providing support to the missing man's family, as well as his friends and colleagues onboard.
He added: "Our thoughts and prayers are with them."
The ship was on a 14-night Italian Mediterranean cruise that left Southampton
on May 7.
A coastguard source said: "Unfortunately there was a man in the sea. We searched for him extensively but we could not find him.
"We deployed our resources to find him but it was to no avail and we can now presume that he is dead.
"The water was very cold and there is no hope for him."
Celebrity Cruises offer trips around Europe and the Mediterranean, with cruises ranging from eight to 14 nights.
The Eclipse cruiser, a Solstice class vessel, joined the fleet last year, according to the company's website.
Facilities aboard the ship include a basketball court and an upper deck laid with lawn.
The shipping company is owned by Royal Caribbean Cruises Ltd.

AP Moller-Maersk A/S, owner of the world's largest container shipping company, CMA CGM SA and Hapag-Lloyd AG are among companies raided by European Union antitrust officials over possible collusion.

AP Moller-Maersk A/S, owner of the world's largest container shipping company, CMA CGM SA and Hapag-Lloyd AG are among companies raided by European Union antitrust officials over possible collusion.

The European Commission made unannounced inspections at the offices of companies active in "container liner shipping in several member states," it said in an e-mailed statement today. It didn't name the companies involved.

EU regulators said they had "reason to believe" that the companies may have breached EU cartel or monopoly-abuse rules. The raid doesn't mean that the companies are guilty of anti- competitive behavior, the commission said.

The container industry returned to profit last year as volumes and freight rates recovered. Maersk said on May 11 that while freight rates will be under pressure in the "short term," the market will improve in the second half of the year.

Maersk will "fully cooperate with the Commission's employees to investigate the matter thoroughly," Christian Kledal, the head of Maersk's legal group, said in an e-mailed statement. The company's "practices are in compliance with EU competition legislation," he said.

Hapag-Lloyd, the shipping company owned by TUI AG and Albert Ballin GmbH, said it is also under investigation.

Hapag said in a statement that regulators were checking whether companies have breached antitrust rules since October 2008 when the EU ended immunity to deals, known as liner shipping conference agreements, that fixed prices for almost two decades.

Hamburg Sued

CMA CGM, the world's third-largest container shipping company, is also part of the EU probe, it said in an e-mailed statement. The closely held Marseille-based company said it's cooperating with regulators.

Hamburg Sued was raided by commission officials today and is fully cooperating with them, Eva Graumann, a spokeswoman for the Hamburg-based company said in a phone interview.

Neptune Orient Lines Limited, Southeast Asia's largest shipping line, said EU officials visited its Uxbridge, England, offices. NOL is cooperating with regulators and "believes that it is in compliance with the anti-competition regulators," it said in a statement.

Yang Ming Marine Transport Corp. and United Arab Shipping said they weren't raided.

Maersk Line, which owns or charters more than 500 ships, has vessel-sharing agreements with CMA CGM and Switzerland-based Mediterranean Shipping Co., the world's second-biggest container line. Under such deals, shipping lines can buy space on competitors' ships to reduce costs.

Maersk and CMA CGM are both members of the Transpacific Stabilization Agreement, which works to "develop voluntary, non-binding guidelines for rates and charges," according to its website.

Mediterranean Shipping declined to immediately comment.

European Union countries presented plans to curb the short-selling of government debt and shares

European Union countries presented plans to curb the short-selling of government debt and shares Tuesday, as the bloc edged closer to tighter controls on speculators many blame for compounding the credit crisis.

The proposal, to allow a European watchdog to halt some trading and impose restrictions on the short-selling of state debt and company shares, will be the basis for negotiations with the European Parliament, which is demanding stricter rules.

The regime will require investors to reveal big short-selling positions to regulators and empower an EU watchdog to ask for sensitive information and temporarily stop short-selling. EU countries will, however, be allowed veto such a ban.

If both parliament and EU member countries reach agreement, the law could be in place by the end of this year.

"We had major issues particularly with Greece where clearly there were significant (market) movements totally unidentified," France's Christine Lagarde told a meeting of European Union finance ministers in Brussels.

"We are trying with this piece of legislation to remedy that situation."

Gyorgy Matolcsy, the Hungarian finance minister who brokered the agreement between the EU member states, said: "The compromise delivers on the key objectives of transparency, a permanent ban on naked short-selling and the reinforcement of supervisory authorities."

Although he highlighted a ban on naked short-selling, where the seller does not own nor has borrowed the shares he has promised to sell, traders will still be able to do so, provided they show a reasonable chance of getting the securities to close the deal.

The European Parliament wants to take a harder line by including a measure to ban outright "naked" selling of default insurance or credit default swaps (CDS) for country debt. But EU member states are unlikely to back this and some EU officials expect a compromise to be agreed.

Naked selling refers to buying a CDS contract, a type of tradeable insurance to cover default, without owning the underlying government debt.

I.M.F. Chief May Claim Consensual Sex as a Defense

As Dominique Strauss-Kahn, the managing director of the International Monetary Fund, spent his first full day on Rikers Island, the hotel housekeeper who accused him of sexual assault was struggling with what her lawyer said was a life upended by the case.

The woman, 32, a widowed immigrant from Guinea who was granted asylum seven years ago, has not been publicly identified and has made no public statements about what prosecutors have charged was an attack by Mr. Strauss-Kahn, a 62-year-old Frenchman, as she prepared to clean his hotel room on Saturday.

But her lawyer said she had been unable to return to her job at the Sofitel New York or to her home, as both had attracted swarms of international news media.

And as she remained in seclusion, there were suggestions that Mr. Strauss-Kahn, a powerful, wealthy politician who was widely regarded as a strong candidate to run against the French president, Nicolas Sarkozy, next year, would put forward a defense that any sex had been consensual.

During a hearing on Monday in Criminal Court in Manhattan, a lawyer for Mr. Strauss-Kahn, Benjamin Brafman, told a judge he believed the “forensic evidence” was “not consistent with forcible encounter.”

Mr. Brafman did not disclose what forensic evidence he was referring to, or even if he had been apprised about what forensic evidence the prosecution had collected. Even so, that statement seemed to suggest the defense may acknowledge that a sexual encounter had occurred.

Indeed, on Tuesday, a person briefed on the case said the defense believed that any sex act may have been consensual.

That elicited an angry response from a lawyer for the woman. He dismissed any suggestion that the housekeeper, whom he described as “a very proper, dignified young woman,” had agreed to have sex with Mr. Strauss-Kahn.

“There is no question this was not consensual — she was assaulted and she had to escape from him, which is why when she finally got out of the room, she reported it to security immediately,” said the lawyer, Jeffrey J. Shapiro. “It doesn’t matter what Mr. Brafman says, and it doesn’t matter what the defendant says. Her story is her story, which she has told to everyone who asked her, and she is telling the truth. She has no agenda.”

Mr. Shapiro said his client “did not even know who this guy was” until she saw news accounts, adding, “She is a simple housekeeper who was going into a room to clean a room.”

A man who said he was the housekeeper’s brother said his sister did not know Mr. Strauss-Kahn’s identity when she reported the events to the hotel and, later, to police. The man, who manages a restaurant in Harlem, said she did not learn of Mr. Strauss-Kahn’s status until pictures of him appeared in the news.

He said he had called his sister several times on Saturday afternoon, but she did not answer the phone. She eventually called him back from a police station, he said.

“She just told me that something really bad had happened and that she was with the police and the doctors,” he said. 

The woman, who does not have a formal education, emigrated from Guinea with her daughter, leaving that country under what Mr. Shapiro said he understood were “difficult circumstances.” The lawyer said she sought and was granted asylum in the United States, although he said he was unsure of her immigration status.

The woman, who speaks French and some English, is a widow, though the lawyer said he was unaware of the timing or the circumstances of her husband’s death.

Mr. Shapiro said his client was very proud of her job, which she had held for three years, and the ability it gave her to support herself and her 15-year-old daughter.

“She would have done nothing to jeopardize this job,” he said. “She needs this job; this job was her lifeline. She is not a woman of resources; she is not a woman of pretense. She is just a simple woman who is grateful to have a job where she can provide food and shelter for herself and her daughter.”

His client, he said, has enormous pride, and is unsure what her life will be like going forward.

“The fact of the matter is this is a situation that she didn’t choose,” the lawyer said. “She’s been victimized not only by what happened in that hotel room but by the fact that her life has been taken away from her for who knows how long.”

No lawsuit, he said, had been considered or discussed.

The case, Mr. Shapiro added, has turned the woman’s life upside down; she has been isolated from her life and her routines.

 

The IFA has sought an urgent meeting with the Minister for Enterprise, Richard Bruton

The IFA has sought an urgent meeting with the Minister for Enterprise, Richard Bruton, following the raid by the Competition Authority on the organisation's headquarters in Dublin last Friday.

Farm officials were left stunned when 16 officials from the Competition Authority and the Garda arrived with search warrants (right) at the IFA's nerve centre in west Dublin at 10am last Friday.

For the next six hours, IT experts and officials from the Authority, backed up by a detective sergeant from the Garda Fraud Squad, carried out a forensic sweep of the second floor offices at the Farm Centre.

Members of the IFA's executive staff, including general secretary Pat Smith, elected representatives such as president John Bryan and several staff secretaries, were questioned during the operation.

Computer hard drives were seized, along with five boxes of files and minutes of meetings, one desktop and two laptop computers, and at least two mobile phones belonging to the secretary general and the financial controller.

"You really don't have the authority to say no to these guys," said one senior staff member. "You can protest as much as you like, but if they deem it relevant, they can take what they want."

The Competition Authority said that it would be two weeks before any of the seized property would be returned and only if it was not classified as evidence in any subsequent court proceedings.

The warrant issued for the search stated that "the Irish Farmers' Association ... has made the decision to directly or indirectly fix selling prices ... of liquid milk products ... contrary to section 4 of the [Competition] Act".

Dairy farmers had protested at Dublin branches of Iceland in March. The retailer refused to comment when contacted.

No formal statements were taken during the search, although it is believed that key officials will be summoned for in-depth interviews after the Competition Authority has had time to pour over the evidence they amassed from the raid.

The IFA is no stranger to clashes with the Competition Authority, with several members brought to court by the State agency following protests at Convoy Dairies in Donegal in October 2000 and Drogheda Port two years later.

However, with the threat of legal action now imminent, the organisation is facing legal fees that could easily run into hundreds of thousands of euro, according to one Farm Centre source.

"The fact that they raided the Farm Centre shows that they want to nail the IFA corporately," said a staff member.

IFA president John Bryan said that he is now seeking a meeting with Minister Bruton to progress the Code of Practice for the retail sector: "We need to see a Code of Practice in place backed up by statutory legislation.

Dominique Strauss-Kahn may be sitting in a Rikers Island jail cell on charges of sexual assault, but officially, he's still managing director of the International Monetary Fund.

Dominique Strauss-Kahn arrest can't distract EU from Greece
That hasn't stopped governments around the world from looking for a successor.

The list of possible replacements is already long – and also indicates that the jockeying for Mr. Strauss-Kahn's post could be contentious and full of conflict. What's more, non-European candidates may be making a strong run for the position.

There's French Economy minister Christine Lagarde. She's known as a competent and smooth operator, but she is the object of a corruption investigation in France. Then there is Peer Steinbrück, former German Finance minister who has been credited with helping consolidate Germany's budget. He is also famously short-tempered. Kemal Dervis is another name on the list, the former Turkish Finance minister steered his country successfully through a financial crisis in 2001.

RECOMMENDED: French outrage over 'inhumane' treatment of Strauss-Kahn highlights culture clash

Europe (mainly France) has traditionally occupied the seat at the top of the IMF. In return, the US gets the post of World Bank director. But with the global economic balance shifting, up-and-coming economies from outside the EU are demanding a bigger say.

The selection process for a new IMF director should be based on fairness, transparency, and performance, says Jiang Yu, spokeswoman for the Chinese Foreign Ministry. India, Mexico, and South Africa all have their own candidates ready. But German Chancellor Angela Merkel insisted that now is not the time for Europe to let go.

"We know that in the medium term, the emerging markets have a right to the top positions at the IMF and the World Bank," she said Monday in Berlin. "But in the current situation Europe is well advised to have its own candidates."

Officially, the 24-member IMF executive directors elect the person for the top spot. In reality, however, they act on behalf of national governments, and the power balance among them reflects a Western dominance. Nine of them are European, and the US representative's vote counts as four.

AFTER Labour had lost the General Election but before the coalition, Alistair Darling, the former Chancellor, signed us up to the EU Financial Stability Mechanism, a bail-out fund designed to prop up the euro.

AFTER Labour had lost the General Election but before the coalition, Alistair Darling, the former Chancellor, signed us up to the EU Financial Stability Mechanism, a bail-out fund designed to prop up the euro. That is why, despite being £1trillion in debt ourselves, we may be forced to hand money over to Greece so the Greeks can carry on spending. That is a national scandal and Darling should be ashamed.

Multi-million euro cork fraud tried

This week the Santa Maria da Feira judicial tribunal will begin hearing 98 of almost 260 suspects accused of being involved in a tax fraud scheme within the cork industry and who are believed to have swindled the State of €48 million by issuing fake invoices.

Due to the high number of suspects involved in the trial, the court proceedings will take place in a Sport Pavilion belonging to the Ovar voluntary fire-brigade.

Three court dates have been scheduled to try all of the 260 suspects, the first of which will take place this week. A second trial will be held for another 90 suspects, followed by a third court session in which 60 suspects will be heard.

The trials are the outcome of an investigation launched by the PJ police in 2004.

As part of the process the court will determine the authenticity of IVA and IRC tax claims made by the various individuals and companies involved in the trial.

The majority stand accused of tax fraud.

David Cameron has announced that 400 British troops will withdraw from Afghanistan this year

David Cameron has announced that 400 British troops will withdraw from Afghanistan this year in the first stage of his plan to remove all UK combat troops by the end of 2014.

The move, given greater urgency by the killing of Osama bin Laden, had been initially resisted by defence chiefs. Cameron made the announcement to MPs on Tuesday in advance of President Obama's state visit to the UK next week.

Speaking to the liaison committee of MPs, Cameron also pledged to bring in a legally binding target for spending on overseas aid, despite objections by the defence secretary, Liam Fox.

He said legislation would be tabled in the current parliament to increase aid to 0.7% of gross national income by 2013, adding that it was in the UK's interest to honour the commitment made in the coalition agreement with the Liberal Democrats. "I profoundly think it is the right thing to do because we have duty to the poorest in our world even at times of hardship at home," he said.

Cameron denied reports that Obama or the Pentagon was unhappy about the withdrawal announcement, saying overall UK troop levels in Afghanistan would remain at 9,500, after a recent temporary increase.

Cameron said: "I am sure the Americans completely understand that it is rather less than the reductions they are planning and we remain in one of the toughest parts of the country doing one of the most difficult jobs. We are the second biggest contributor, after the United States."

The troops due to be withdrawn will come from those covering Kandahar airport and some based at headquarters.

Cameron urged the Americans not to walk away from Pakistan in response to the discovery that Bin Laden had been living in a garrison city that houses the country's officer training academy. He said: "It is absolutely in our interests to back the democratic politicians of Pakistan in their fight against terrorism. To do that we need to understand the pressures they are under and all the questions they are being asked in their country, but they need to understand the pressure we are under with everybody saying, 'How could they not have known?'"

EU governments agreed on Tuesday to tighten sanctions against the Syrian leadership

EU governments agreed on Tuesday to tighten sanctions against the Syrian leadership but will make a formal decision next week about whether to impose them on President Bashar al-Assad, diplomats said.

The European Union decided last week to impose sanctions, such as travel bans and asset freezes, on 13 of Assad's closest allies in response to a violent crackdown on pro-reform protests on top of an arms embargo already in place against Syria.

Britain and France, which are among the EU's main powerbrokers, have pushed for the inclusion of the Syrian president on EU lists of officials affected by sanctions.

But the failure to include him so far underlines divisions among the bloc's 27 members over the effectiveness of sanctions in restraining his government's violent actions.

EU foreign ministers, meeting in Brussels next week, are expected to formally approve a new list of around a dozen sanctioned officials, which ambassadors of EU governments drew up on Tuesday.

"There was consensus today on taking further measures by adding new individuals to the EU list, but the list has to be adopted by ministers next week," one diplomat said.

Rights groups say hundreds of people have been killed during two months of pro-democracy unrest in Syria so far.

Syrian authorities have blamed most of the violence on armed groups backed by Islamists and outside powers, who they say have killed more than 120 members of the security forces.

Can the stranglehold of Big Four auditors be broken

The competition watchdog said "there are competition problems in the audit market", and added that it could ask the Competition Commission to conduct a detailed investigation, because the "statutory test" for a reference to the Commission had been passed.

But although the OFT has deep concerns about the stranglehold of the Big Four accounting firms over the business of auditing big companies, it is not quite sure what the remedies might be.

Here's the basic problem. The dominance of the Big Four - PriceWaterhouseCoopers, Deloitte, Ernst & Young and KPMG - is a global phenomenon, rather than an exclusively British one. And the OFT's remit, and that of the Competition Commission, is wholly domestic.

What's more there is no global body for dealing with competition problems.

To be clear, as a British phenomenon it is pretty pronounced phenomenon: in 2009, the Big Four received 100% of all audit fees paid by FTSE100 companies (the UK's largest listed businesses) and 98% of the next tier, the FTSE250 businesses. One firm PwC on its own received a staggering 47% of FTSE audit fees.

For the OFT, the Big Four's stranglehold, combined with relatively low rates of switching between them by corporate clients, means that fees are probably higher than they ought to be, for services that are perceived to be pretty bog standard.

And what's particularly odd for firms that ought to feel secure in their earnings, the auditors don't appear to be as aggressive as they might be in forcing companies to disclose the risks they run. Or at least that would appear to be a legitimate conclusion of how the Big Four failed to disclose the reckless lending and investing of banks in the boom years before the great banking crash of 2008.

So what would happen if - for example - the Competition ordered PWC to break itself up, which is something that it might well end up doing, according to my sources.

Well, that would not necessarily lead to a step change in competition.

The reason is that the break-up would apply only to the UK arm of PwC. And the bit of PwC in the UK that remained attached to PWC's overseas network would still have a massive advantage over competitors, because PWC's British-based multinational clients - the likes of Barclays, Tesco and BT - would presumably stick with the international network able to audit all their subsidiaries and branches, rather than employing a British firm without global capability.

The bit of PWC forcibly hived off might well wither and die quite quickly, or simply specialise in auditing smaller companies (where there is less of a competition problem, in any case).

All of which leaves the OFT feeling a bit non-plussed.

In the absence of possible remedies, the OFT doesn't yet want to put the Competition Commission and the accounting firms to all the cost and bother of a lengthy and expensive probe.

It will therefore conduct a review of whether "there is a reasonable chance that appropriate remedies will be available to the Competition Commission."

 

8 million euro is being refunded to bank customers who made ATM withdrawals without taking any cash.

Allied Irish Banks (AIB) has announced 71,000 people will be paid back the money owed from a period covering more than seven years, with compensatory interest.

It revealed some customers were debited for some ATM cash withdrawals between 2003 and 2010, even though they did not take the cash which was dispensed by the ATM.

An AIB spokesperson said an undisclosed donation will also be made to charity in lieu of several unidentified customers whose accounts were debited as far back as 1995.

The bank said the problem arose as a result of the introduction of anti-fraud measures which prevented the automatic processing of refunds for these particular transactions.

"Process and procedure changes have now been put in place to prevent a reoccurrence," it added.

Some 5.1 million euro will be refunded to 41,000 of its own account holders, with 3.2 million euro paid to 30,000 non-AIB customers.

AIB has apologised and is writing to its cardholders who have been impacted by this problem to inform them of the amount of their refund.

Other banks are also arranging for the AIB refunds to be credited to their customers.

There were a total of 57 million transactions from AIB's 783 ATM machines nationwide in 2010, totalling 7.7 billion euro

The maid who claims that Dominique Strauss–Kahn sexually assaulted her at an upmarket New York hotel has been named by the French media.

The woman is a 32-year-old West African immigrant who is married and has a 16-year-old daughter.
Her 43-year-old brother described her as a "wonderful, hard-working woman" who loved her job and had been left devastated by what happened.
The woman's brother, in interviews with the American media, refused to say where his sister was but confirmed she was "safe".
"No family should have to go through this," he added.
The 43-year-old, who runs a cafe in Harlem, said his sister contacted him soon after the incident.

"She rang me and she said 'somebody has done something really bad to me, I've been attacked'," he said. "She was crying all the time".
He said his sister was "a hardworking woman who's just a victim" but added that he was confident that despite the alleged perpetrator's fame, she would get justice.
"This is America. Justice will be served," he said. "That's why we love America."
Neighbours who live near the alleged victim in her working-class neighbourhood in the Bronx said she was soft-spoken and kept to herself.
"She's very shy, she's very quiet," said Mark Gangadeen, head of the tenants' association at the six-story brick building where the woman lives.
If the incident had happened in Britain, the Sexual Offences Act would protect the identify of any victim of such an assault. Because the case is abroad, there is no legal reason why she cannot be named in this country.
In New York, there is no law protecting the identity of sexual offence victims but the media do not identify them by convention.
However the French media, including reputable magazine Paris Match, had no such qualms.
"No one has yet seen her," the magazine reports on its website. "She is under police protection in a secret location... In the United States, no one is mentioning her identity as is often the case with this kind of incident."
Varying reports say she is from Ghana, Senegal and Guinea, and lived on the fourth floor of a red brick apartment block in the Bronx. Neighbours there said she was a devout muslim who wore a headscarf and worked long hours at the Sofitel Hotel.
According to a close friend, she had no idea who the man she alleges attacked her was, and only discovered that he was the head of the International Monetary Fund while watching the news on television that evening. "She has spent two days crying," the friend added.

Can Spain hang on? Spain is now closest to the precipice. A Spanish bailout would dramatically increase the chances of the euro breaking up

Spain is now closest to the precipice. A Spanish bailout would dramatically increase the chances of the euro breaking up. The probability of a disorderly disintegration of the world’s second-largest currency would rise from low to near even if Spain goes.

The capacity of the Spanish state to fund itself is a central question not only for Europe, but for the world. It is difficult to see how a global depression could be avoided in the wake of the utterly unprecedented levels of default that would accompany euro break-up.


Holders and purchasers of sovereign debt appear to think so. Since the middle of last year, yields on Spanish government bonds have tracked those of the strong core economies. Before that they had moved in unison with the yields of the three weakest countries.

The reason for the decoupling can be attributed, in part, to the actions of the Spanish government in bringing the budget deficit down (to below 10 per cent of GDP in 2010) and to the country’s comparatively low public debt levels. By the end of last year, government debt, at 60 per cent of GDP, was lower than the euro area average. It compared with 142 per cent in Greece, 96 in Ireland and 83 in Portugal. But the bond market has not priced sovereign debt well in the euro era. If sentiment were to change, Spain could suffer the fate of the peripheral three. Much will depend on how the economy performs and what happens to property prices and banks.

Of the weak peripheral economies, Spain is the most similar to Ireland, both in the nature of its woes and in the existence of real economic strengths (Greece and Portugal have few strengths, while Italy’s traditionally strong medium-tech industries are proving highly vulnerable to competition from low-wage economies).

From the mid-1990s, Spain enjoyed strong economic growth, both because of real advances and because of an unsustainable housing boom, which has ended in tears.

The positives first. Spain’s greatest success has been its strong corporate sector. As a closed economy until the 1960s, its businesses were inward looking and uncompetitive. After opening up, things changed only very gradually. Since the 1990s, though, the pace has accelerated as Spain’s conquistadores have taken on the world and, in many cases, won.

Telefónica is now a leading global player. It owns 02 here and elsewhere in Europe and, having acquired many of Latin America’s telcos, its logo is to be seen emblazoned on call boxes across the continent. Repsol’s petrol pumps are almost as ubiquitous in the Spanish- speaking world, and beyond. Iberdrola is a world leader in renewable energies, running wind farms from Brazil to Scotland to China. In fashion retailing, Zara and Mango have overtaken the likes of Italy’s Benetton. In their global reach, they rival US giants such as Gap. The country’s banks have diversified successfully, with Santander becoming the largest bank by market capitalisation in the euro area.

From an economy-wide perspective, the conquistador phenomenon is to be seen in the foreign direct investment (FDI) figures. From almost a standing start in the 1990s, when the stock of Spanish outward FDI was piffling, it has grown rapidly. By 2009, it was larger relative to the size of the Spanish economy than German outward FDI is relative to that economy.

Spain, however, has a number of underlying weaknesses, many of which were ignored when times were good. Despite many fast- growing and globalising companies, Spain’s competitiveness was eroded during the boom years. One reason for this was its dysfunctional labour market, which went unreformed for too long. Both the centre-right administration from 1996-2004 and the centre-left one in office since did not take on vested interests. The result was that, even after more than a decade of boom, during which Spain attracted proportionately almost as many immigrants as did Ireland, the unemployment rate never fell below 8 per cent.

Now unemployment stands at more the 20 per cent – the highest in the developed world. In reaching that point, the numbers at work in the Spanish economy have declined by nearly one tenth, the worst performance in the OECD after Ireland.

Just as in Ireland, the reason for the unusually large employment shock has been the collapse of the building industry. By the height of the boom, average annual housing completions peaked at three times the long- run average (compared to more than four times here).

Despite this huge addition to supply, property prices rose rapidly. As in Ireland, prices were driven upwards by a credit bubble far more than the “strong fundamentals” so beloved of property cheerleaders. Mortgage debt rose to 65 per cent of GDP by 2009, up from 25 per cent a decade earlier (in Ireland the ratio hit 90 per cent).

But because debt, housing output and prices never reached dizzying Irish heights, Spain has not fallen as far.

At its worst, in 2009, investment spending contracted by 15 per cent on the previous year. Here it contracted by 31 per cent. While house prices have fallen by 40 per cent in Ireland, the decline has been less than half that in Spain – and the property developer class has not gone bust en masse.

According to the IMF, the net direct cost of the banking clean up in Spain has amounted to just 2 per cent of GDP – below the average for advanced economies and a fraction of Ireland’s world-leading 28.7 per cent.

But such a small bill looks fishy. Could the authorities and institutions be hiding something? Far stranger things have happened. The forthcoming Europe-wide stress tests might give more certainty.

And even if nothing is awry, with further falls in residential property prices all but certain, a 20 per cent unemployment rate and rising interest rates, the amazingly low percentage of banks’ loan books not performing looks certain to swell. If Spain were to see anything like the repeated upward revisions to its banking costs that Ireland has experienced, holders of its sovereign debt would drop it like a hot brick.

But that is not the only cloud hanging over Spain. Its public finances might also be hiding something nasty. Since the Franco era, centrifugal political forces have been pushing power from Madrid to the regions. Among the powers devolved has been public spending. Spain has become a de facto fiscal federation.

The regions now account for as much public spending as they do in the de jure German federation, but without the same transparency. Rumours are rife of off-balance sheet spending by sub-national levels of government.

The euro crisis was triggered by revelations in Greece that its public finances were much worse than the official figures had claimed. If such a surprise were to emerge in Spain, it could be the beginning of the end for the euro.

Iceland's President Olafur Ragnar Grimsson has said that the UK and the Netherlands will get back the 4bn euros (£3.5bn) they paid when Iceland's banking system collapsed in 2008.

Iceland's President Olafur Ragnar Grimsson has said that the UK and the Netherlands will get back the 4bn euros (£3.5bn) they paid when Iceland's banking system collapsed in 2008.

That is despite the country rejecting the latest repayment plan in a referendum at the weekend.

Mr Grimsson told the BBC assets from the collapsed bank Landsbanki would "in all likelihood" cover what was owed.

The UK has said the matter will go to an international court.

Iceland's three main banks collapsed in October 2008.

Landsbanki ran savings accounts in the UK and the Netherlands under the name Icesave.

When it collapsed, the British and Dutch governments had to reimburse 400,000 citizens - and Iceland had to decide how to repay that money.

Guarantee question

The weekend result marked the second time a referendum has rejected a repayment deal.

Mr Grimsson said that it was not an issue about paying or not paying, but a question of whether there is a state guarantee and how that would be interpreted under the European regulatory framework.

"I think the primary message [from the referendum] is that before ordinary people are asked to pay for failed banks, the assets inside the estate of these banks should be used to pay the subs," Mr Grimsson told Radio 4's Today.

"That is why the people of Iceland emphasised that Britain and the Netherlands are going to get certainly up to $9bn out of the estate of Landsbanki.

"The first payment will be this December, and in all likelihood this will cover what was paid by Britain and the Netherlands two years ago.

"But to ask for a state guarantee and that ordinary people should shoulder the responsibility is highly doubtful and definitely can be disputed within the European legislative framework."

But he added that if the matter did end up in an international court, "of course" Iceland would abide by the court's ruling.

From today (11 April) it is illegal for Muslim women in France to cover their faces with veils in public.

It's the first European country to pass the law but there's been criticism that it's pointless because only a minority of women wear them.

Any woman caught wearing the burka or niqab faces a fine and will be asked to take citizenship lessons. She can also be subject to an investigation.

If police find her husband is forcing her to cover up, he could face a fine of 25,000 euros (£22,000) and a possible jail sentence.

In the 18th district of Paris, is Barbès. There is a strong Muslim community that lives there, made up of people of Algerian, Moroccan and Tunisian descent.

Continue reading the main story
Five years ago hardly anyone wore the niqab. In another five years we will be like England where there are neighbourhoods and ghettos full of women wearing them

Sihem Habchi worked with the government on the ban
France is home to western Europe's largest Muslim population of six million.

Out of that, the number that wear the burka or niqab differs, depending on who you ask.

Hadjou owns an Islamic clothes shop in the district.

"Selling the niqab is bad for business," he said. "Not many women wear it or ask for it.

"I've probably sold about five in a year."

Ahmed who runs a small business near one of the district's mosques says he rarely sees women covered up and that was before this ban.

"I'd say probably 0.01% of Muslim women wear the niqab," he admitted.

The French government thinks that figure is much higher. Ministers put it at around 2,000 women.

Ahmed said he didn't think that was true: "That's not possible, but even if it's true, it's only a minority that wear it. So what?"

Find out the difference between a burka, hijab and niqab

'Ghettos'
For some, Muslim women wearing veils is a problem.

The interior minister Claude Guéant has been accused of Islamophobia after saying the growing population of Muslims in the country "poses problems".

The French government says they encourage segregation and promote the inequality of women.

Sihem Habchi, a Muslim woman who has worked with the government on the ban, agrees.

Many Algerians, Moroccans and Tunisians live in Barbès, Paris
"It's because it's a minority we need to act," she said.

"Five years ago hardly anyone wore the niqab.

"In another five years we will be like England where there are neighbourhoods and ghettos full of women wearing them."

It is in the banlieues where the government believes this problem is growing.

They are France's version of council estates located about 35 minutes away from central Paris.

In 2005 riots were triggered among angry young people after two teenagers died in Clichy Sous, a poor area in an eastern suburb of Paris.

They blamed police for causing it and many feel that persecution is still going on.

third time in a year the European Union is going through the same ritual, bailing out another insolvent country. Portugal now follows Greece and Ireland to the European welfare office to ask for new loans on the condition of ever more drastic spending cuts.

For the third time in a year the European Union is going through the same ritual, bailing out another insolvent country. Portugal now follows Greece and Ireland to the European welfare office to ask for new loans on the condition of ever more drastic spending cuts.

So far the markets have taken Europe’s third successive sovereign financial crisis in stride. But many economists are a good deal more alarmed, most notably because the bailout formula European leaders keep applying to their most indebted member nations shows no signs of working.

Greece, Ireland and now almost certainly Portugal have access to hundreds of billions of dollars in emergency European aid to help them avoid defaulting on their debt. But the aid is really just more loans, and the interest rates the countries are paying, if a little lower than what the private market would charge, are still crushingly high. Their pile of debt gets bigger with every passing day.

Moreover, the price of these loans has been a commitment to slash government spending far more drastically than domestic leaders would have the desire or the political power to accomplish on their own. And for countries that depend a good deal on government spending to generate growth, rapid decreases in spending have meant sustained economic stagnation or outright recession, making every dollar of debt that much harder to pay back.

Economists call this “the debt trap.” Escape from the trap generally requires devaluation of the currency, which cannot happen among countries that use the euro as their common currency, or strong economic growth, which none of the three have, or some kind of bankruptcy process, which all three forswear. Add to that the likelihood that all three countries will continue to have unstable governments until they figure a way out, and Europe’s financial crisis has no end in sight.

“What has been missing, in the debate about how countries can restore their finances to some kind of sustainability, is the limit of how much they can cut in a period of austerity,” said Simon Tilford, chief economist for the Center for European Reform in London. “There is a limit of how much any government can cut back spending and survive politically unless there is a light at the end of the tunnel, a route back to economic growth.”

The problems of the weaker countries are not just sovereign debt, but also lack of competitiveness, both in Europe and the larger world. Without the nations’ restoring competitiveness and selling more goods abroad, which can come only through a longer-term process of reducing wages and taxes to spur private sector investment, economists are not optimistic about prospects for new growth soon.

The crisis in Portugal also raises new questions about whether the European Union will come to grips with the other side of its crisis: the banks. Banks in well-off countries like Germany, France and the Netherlands, as well as Britain, hold a lot of Greek, Portuguese and Irish debt. And if these countries cannot pay their debts, they would have to reschedule them, reduce them or default, causing a major banking crisis in the rest of Europe.

That reckoning would require governments to ask their taxpayers to recapitalize the banks, which is exactly what political leaders are afraid to do.

“We have a banking crisis interwoven with a sovereign debt crisis,” Mr. Tilford said. “Europe needs to address both, and it needs to acknowledge that the banking sectors of creditor countries — especially Germany — are not now in a position to handle restructuring and default, and that governments will have to pump money into the banks to recapitalize them.”

The European Union warned Friday that diplomacy on climate change was moving too slowly after UN-led talks in Bangkok eked out an agreement on an agenda for further negotiations this year.

"Our overall sense is things are moving slow, too slow for Europe's taste. And we cannot achieve what we need to achieve before the end of this year with this speed," EU Climate Commissioner Connie Hedegaard said.
"Too often too much time is spent on how to proceed," she told reporters on a visit to Washington. "What we need is to come down to the content side of this and that is urgent."
The four-day session in Bangkok, which was marked by feuds between wealthy and developing countries, eventually achieved its goal of setting an agenda leading up to an annual UN climate conference in South Africa in November.
But the Bangkok talks largely put aside big picture issues on how nations will cut their greenhouse gas emissions blamed for global warming.
Hedegaard said it was critical to move soon on cutting emissions, pointing out that national pledges have not come close to the UN-led goal of containing global warming to no more than 2 degrees Celsius (3.6 Fahrenheit).
"What people sometimes forget is that there is a time factor when we talk about the climate. It actually does matter whether we start acting globally sooner or later," she said.
The European Union has championed international action on climate change, including through its "cap-and-trade" system that restricts carbon emissions but allows businesses to trade in credits.
Before Washington, Hedegaard visited California, which is launching the first cap-and-trade system in the United States. The effort by the largest US state marks a sharp contrast with skepticism over climate change in the US Congress.
Hedegaard said she agreed with Governor Jerry Brown to keep in touch so that the EU and California systems may eventually be linkable.
"California is not just a very huge American state, it's also the seventh or eighth largest economy of the world. So of course it's a rather strong signal if it gets done," Hedegaard said.
A bill supported by President Barack Obama to set up a nationwide cap-and-trade system died last year in the Senate, with the rival Republican Party arguing that it would be too costly.
Hedegaard met in Washington with lawmakers from both parties as well as officials at the Environmental Protection Agency, which Obama has tasked with regulating greenhouse gas emissions.
Hedegaard said she was fully aware of the political realities in Washington but hoped the United States could move forward.
"It is very hard to understand that in this country it would not be possible to make a policy on, for instance, how to address energy efficiency, because the potential is just that big," she said.

Italy on Sunday urged its European partners to share the burden of the thousands of migrants reaching its shores from North Africa during the region's upheavals, but key German officials rejected the request for help.

"Italy has to resolve its refugee problem on its own," German Interior Minister Hans-Peter Friedrich told daily Welt's Monday edition.
Rome's newly stated policy of issuing visas to migrants from North Africa amounts to a violation of the European Union's Schengen rules for visa-free travel across most of the bloc, Friedrich was quoted as saying. He vowed to bring up the issue at an EU interior minister meeting starting in Luxembourg on Monday.
German state interior minister Joachim Herrmann also criticized Italy's new migration policy and threatened to reinstate border controls to keep the migrants at bay — despite Europe's Schengen agreement.
Herrmann of Bavaria state, which borders Austria and is a possible transit route to northern Europe from Italy, was quoted in Welt's Sunday edition as saying that Italy "has to deal with its immigration problem itself and may not dump it on other EU countries."
But Italy's foreign minister insisted that the influx of illegal immigrants from northern Africa, which has brought 20,000 Tunisians to Italy's shores in recent weeks, is indeed a European problem.
"We want to tell Europe that economic contributions are not enough, political action is necessary," Franco Frattini said on Sunday, defending the decision to issue temporary permits in comments he made on Sky Italia.
Meanwhile, illegal immigrants kept arriving at Lampedusa island, with a boat carrying 50 people arriving at midday Sunday. Italian police also have spotted two more boats on their way, carrying a total of about 300 people, he said.
Italian Premier Silvio Berlusconi on Saturday asked Germany, France and the rest of Europe to show solidarity with Italy in accepting migrants or risk calling into question the whole idea of the European Union.
France has promised to honour the temporary residency documents Rome plans to issue to Tunisians, but insisted they must prove they could financially support themselves in France — a condition many of them are unlikely to be able to meet.
Germany officials insist that Italy and Malta must deal with the refugee crisis on their own.
In a small gesture of solidarity, however, Germany's Interior Ministry said Friday that Berlin is offering to take in 100 North African refugees who are currently on Malta.