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Thursday, September 27, 2012

Abbas, Netanyahu Speak at the U.N.

The head of the Palestinian Authority Mahmoud Abbas and Israel Prime Minister Benjamin Netanyahu both spoke today at the 67th General Assembly of the United Nations. In his address, Abbas asked the 193-country organization to raise the Palestinian status at the U.N. to nonmember state, a step down from last year, when he pleaded for member state status. “We are not seeking to delegitimize Israel, but rather establish a state that should be established: Palestine,” he said. Abbas also took the opportunity to blast Israel for what he called a “campaign of ethnic cleansing,” referring to the destruction of Palestinian homes by the Israeli forces. Shortly thereafter, Netanyahu rejected Abbas’ call. “We won’t solve our conflict with libelous speeches at the U.N.,” he said. Israel’s prime minister then focused on Iran’s nuclear program, insisting once again that red lines must be established to stop the Islamic nation from developing a nuclear arsenal. He held up a cardboard diagram in the shape of a bomb and used a thick red marker to draw a line on it as he emphasized the necessity to set an ultimatum. Iran could could obtain a nuclear bomb “at most by next summer,” he said.

Spain Presents 2013 Budget While Greece Agrees on Cuts

The Spanish government, in power for nine months, announced today its budget for 2013, along with a fifth round of austerity measures. The 43 items in the plan focus largely on spending cuts, and are thought by observers to preempt conditions to a possible bailout package. Spanish Prime Minister Mariano Rajoy’s cabinet approved today a €40 billion ($51.7 billion), or 8.9 percent cut in ministerial spending to offset a one percent increase in payments to retirees. The cabinet also announced a tax on lottery winnings and a third year of of public sector wages freeze. The 7.3 percent in spending cuts did not include interest payments to Spain’s creditors, which will amount to €38.6 billion next year and will absorb most of the income from the value-added tax (IVA), which was raised this month to 21 percent from 18 percent. Meanwhile, a fifth autonomous region requested financial aid from the central government. Castilla-La Mancha said it needs €800 million from the €18 billion regional liquidity fund. With requests from Murcia, Valencia, Catalonia, and Andalusia, Spain is looking at lending €15.6 billion ($20.1 billion) to its regions. In Greece, the tripartite coalition government announced today an agreement for a €13.5 billion ($17.4 billion) package of spending cuts. The news came after weeks of negotiations and just before a visit from the troika, the group of inspectors from the European Union, the European Central Bank, and the International Monetary Fund. With these new cuts, Greece hopes to be elegible to receive the second tranche of its bailout package.

U.S. May Have Underestimated Job Creation, Though Economy Still Weak

The U.S. Labor Department said today it probably underestimated job creation between April 2011 and March 2012 by 20 percent. Looking at state unemployed insurance tax records, it published a revision that shows 386,000 jobs were created during that period. While this isn’t a final number (it will be published in February), the report shows the private sector created an extra 453,000 jobs, and the public sector lost 67,000. A separate report by the Commerce Department showed the economy grew at a revised annual pace of 1.3 percent in the second quarter, less than the 1.7 percent initially estimated. This is also a sharp drop from the two percent annual growth for the first quarter, and three percent since the last quarter of 2011. Much of this revision was caused by the country’s worst drought in 50 years, which has ravaged farm inventories. The Commerce Department also said durable goods orders dived 13.2 percent in August, the worst since the winter of 2009, which saw the darkest moment of the recession. A large part of this number can be explained by a slowdown in aircraft orders.

Italy’s Monti Says His Biggest Fear for Europe Isn’t Economic

Italy Prime Minister Mario Monti said today in an interview with Bloomberg Television his biggest fear for Europe isn’t economic, but political. Monti described his worries about the rise of nationalisms across the continent, fuelled by the economic and budgetary difficulties since the beginning of the crisis. He suggested this trend could threaten the integrity of the European project, which was born in the wake of World War II with the goal to entwine the fates of European nations in order to prevent another global conflict. “The political leaders of Europe [...] do not devote enough attention to coping with the increasing resentments of one country vis-à-vis another country, the increasing attitude of nationalism, the many backlashes against integration,” Monti said. In the interview, he also praised the 2013 budget announced by the Spanish government earlier today, as “very bold, far-reaching, both in terms of budgetary consolidation and in terms of structural reforms.” Monti also reiterated he will not be running for a second term as prime minister, but he “will be there, I will consider, I cannot preclude anything.” After taking over the Italian government in November 2011, Monti contributed to lending credibility to his nation on the international stage thanks to his measured, technocratic style, in sharp contrast with the exuberance of his predecessor, Silvio Berlusconi. Since his appointment, Monti’s government implemented austerity measures and introduced reforms for Italy’s labor market.

Climate Change May Cause 100 Million to Die by 2030, DARA Says

A report commissioned by 20 governments shows that 100 million people will die by 2030 and the global economy will take a 3.2 percent cut if world leaders fail to curtail climate change. The report was published yesterday by DARA, an organization that aims at improving humanitarian aid for victims of conflict, disaster, and climate change around the world. DARA calculated that around 5 million people die each year of the consequences of climate change, over 90 percent of whom in developing countries. Should the issue not be fixed, the number of deaths may rise to 6 million each year as pollution, hunger, and illness take a hold of the most vulnerable populations. Looking at the impact of global warming in 184 countries, it found the problem has already shaved 1.6 percent (or $1.2 trillion) from global economic output each year, a number that could double by 2030 and rise beyond 10 percent before 2100. In contrast, DARA estimated that the cost of curbing the trend would cost 0.5 percent of the global gross domestic product, or less, for this decade.

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