UK to order reactor for nuclear-armed submarine - source - Reuters UK
LONDON |
LONDON (Reuters) - Britain will order the first reactor for a new generation of nuclear-armed submarines next week as part of a 1 billion pound ($1.6 billion) contract with Rolls-Royce, a defence ministry source said on Sunday, in a move that could strain the coalition government.
The deal, including an 11-year refit of Britain's sole submarine propulsion reactor factory at Derby in central England, would protect 300 Rolls-Royce jobs and many others at suppliers elsewhere, the source said. It is expected to be announced by Defence Secretary Philip Hammond on Monday.
The two-party coalition government is split over plans to replace, at an estimated cost of 25 billion pounds, Britain's four nuclear Vanguard submarines when they retire from service in the 2020s.
Prime Minister David Cameron's Conservative Party wants a new fleet of submarines that will continue to carry the Vanguard's Trident missiles and maintain Britain's independent nuclear capability.
Their smaller Liberal Democrat partners are pushing for cheaper and less destructive alternatives, arguing that the current capability - the ability to obliterate Moscow - is an outdated hangover from the Cold War.
The two parties have postponed a final decision till 2016, after the next parliamentary elections, while agreeing in the meantime to fund the advance work needed to allow the submarines to be built on schedule should they be commissioned.
The Lib Dems insist that the advance contracts do not represent a commitment to a like-for-like renewal, but some analysts say it is unlikely that cash-strapped Britain would outlay huge sums on design and equipment it would later ditch.
The government said last year it expected to spend 3 billion pounds by 2015 on preparatory work for the new submarine fleet.
The deal to be announced on Monday also includes a contract to build the reactor for the last of seven Astute class nuclear-powered attack submarines Britain has on order.
The nuclear propulsion plant for the Vanguard successor will be the more advanced Pressurised Water Reactor 3 (PWR3) system, the government said last year.
Last month Hammond announced 350 million pounds of contracts, mainly with defence contractor BAE Systems, to design the Vanguard successor submarines.
(Editing by Alessandra Rizzo)
Greeks head to polls in crucial vote - CBC
Greece voted Sunday amid global fears that victory by parties that have vowed to cancel the country's international bailout agreements and accompanying austerity measures could undermine the European Union's joint currency and pitch the world's major economies into another sharp downturn.
For Greeks, it is the second national election in six weeks and arguably the most critical in decades, reflecting political turmoil sparked by a two-year financial crisis that some fear could force the country to abandon the euro and return to its old currency, the drachma. That in turn would likely drag down other financially troubled countries and threaten the euro itself.
The last opinion polls published before a two-week pre-election ban showed the radical left Syriza party of Alexis Tsipras running neck-and-neck with the conservative New Democracy party of Antonis Samaras. But no party is likely to win enough votes to form a government on its own, meaning a coalition will have to be formed to avoid yet another election.
The results of exit surveys were expected at the close of polling stations at 7 p.m. (1600 GMT) Sunday, and the first official projections were expected at around 9:30 p.m. (1830 GMT). Strong winds in the Greek archipelago forced the cancellation of some ferry routes, raising doubts about whether some voters would be able to get to islands with polling stations in time.
Inconclusive elections on May 6 resulted in no party winning enough votes to form a government, and coalition talks collapsed after 10 days. The vote, which also sent the formerly governing socialist PASOK party plunging to historic lows, sent a very clear message that Greeks have lost patience with the deep austerity imposed in return for the country receiving billions of euros (dollars) in rescue loans from other eurozone countries and the International Monetary Fund.
"I'd like to see something change for the country in general, including regarding the bailout," said Vassilis Stergiou, an early-morning voter at an Athens polling station. "But at least for us to get organized and at the very least do something."
Bailout agreements
Tsipras, a 37-year-old former student activist, has vowed to rip up Greece's bailout agreements and repeal the austerity measures, which have included deep spending cuts on everything from health care to education and infrastructure, as well as tax hikes and reductions of salaries and pensions.
But his pledges, which include canceling planned privatizations, nationalizing banks and rolling back cuts to minimum wages and pensions, have horrified European leaders, as well as many Greeks. Tsipras' opponents argue that the inexperienced young politician is out of touch with reality, and that his policies will force the country out of the euro and lead to poverty for years to come.
Virtually unknown outside of Greece four months ago, Tsipras' pledges and his party's strong showing in the May 6 elections, where he came a surprise second place and quadrupled his support since the 2009 election, has put him in the international spotlight.
Scores of journalists and television news crews from across the world jostled for space to cover Tsipras casting his ballot in an Athens polling center.
"We have beaten fear. Today we open a road to hope," he said after voting, adding that he was confident of victory.
"Today we open a road to a better tomorrow, with our people united, dignified and proud. In a Greece of social justice and prosperity, an equal member of a Europe that is changing. A Europe of the peoples and of solidarity."
Joint currency or the drachma
The young left-wing leader has accused his rivals of attempting to terrorize the population by casting him as the man who will ruin the country, and insists he will keep Greece within the euro — something that repeated opinion polls have shown about 80 percent of Greeks want.
Greece has been dependent on the rescue loans since May 2010, after sky-high borrowing rates left it locked out of the international markets following years of profligate spending and falsifying financial data.
The spending cuts made in return have left the country mired in a fifth year of recession, with unemployment spiraling to above 22 percent and tens of thousands of businesses shutting down.
For his part, Samaras has cast Sunday's choice as one between the euro and returning to the country's old currency, the drachma. Although he voted against Greece's first bailout in 2010, when his party was in opposition, he backed the second bailout agreed on late last year.
He has vowed to renegotiate some of the terms of the accompanying austerity, but insists the top priority is for the country to remain in Europe's joint currency.
"The main thing we will decide on is the dilemma, euro or drachma," he said during his final pre-election rally in central Athens on Friday.
European leaders warn Greece
European leaders have cautioned that Greece could be left outside the 17-nation eurozone if it pulls out of its bailout commitments.
Newly elected French President Francois Hollande warned in a Greek television interview earlier this week that "if the impression is given that the Greeks want to move away from the commitments that were taken and abandon all prospects of revival, then there will be countries in the Eurozone that will want to end the presence of Greece in the eurozone."
Nearly 10 million people are eligible to vote in the country of about 11 million people. Polls close at 7pm (1600 GMT), with official results expected a few hours later.
"Today the Greek people speak. Tomorrow a new era for Greece begins," Samaras said after casting his ballot in a small town in southern Greece, the first of the main politicians to do so.
As Greeks went to the polls, more than 250 firefighters and soldiers battled a fire raging south of the Greek capital since Saturday afternoon. Local authorities said several houses were burned. Gale-force winds were hampering the efforts to extinguish the blaze, and Greece asked for help in water-dropping planes from Italy, France and Croatia.
Three firefighters suffered burns on Saturday, while four people were arrested for allegedly starting the fire by accident during welding work at a construction site.
Credit Suisse CEO says no plans for capital hike: paper - Reuters
ZURICH |
ZURICH (Reuters) - Credit Suisse (CSGN.VX) has no plans to issue new shares after the Swiss central bank called on it to improve its capital base this year, but should be able to do so by retaining earnings, Chief Executive Brady Dougan was quoted as saying on Sunday.
"Of course I am disappointed. FINMA has given us directions as to how we should strengthen capital. We are fulfilling those," Dougan told the SonntagsZeitung paper in an interview.
"Even more surprising were the suggestions by the SNB to cut the dividend and to raise capital."
In its annual financial stability report published on Thursday, the Swiss National Bank (SNB) said Credit Suisse should urgently boost its loss-absorbing capital base by cutting risk, suspending dividends or issuing shares, sending the stock down 10 percent.
Dougan noted that FINMA is the regulator of the Swiss banks, rather than the SNB but said the bank was still taking the central bank's comments seriously. However, he rejected the idea of a capital hike: "That is not our plan".
"We assume that we will generate enough profit in the coming quarters to create extra equity capital," he said, adding that the bank was also offering shareholders the choice of receiving their dividends in shares, which demands less capital.
The criticism from the SNB has increased pressure on Dougan, who was lauded for navigating the bank through the subprime crisis relatively unscathed, but has come under fire of late for squandering that advantage as the bank's shares languish.
Dougan told the paper he had no plans to step down and was working closely with the board, but admitted some mistakes.
"Last year we massively cut the cost base. From today's perspective, I must concede that the critics were right who said we should have acted even earlier," he said.
Dougan added he was particularly surprised about the public criticism from the SNB as Chairman Thomas Jordan had not discussed the need for Credit Suisse to cut its dividend and raise capital when the two men met for lunch just 10 days ago.
He said the SNB's calculations of Credit Suisse's capital were incomplete and based on a very pessimistic scenario for the euro zone debt crisis, adding the report had shaken the confidence of clients and investors: "That is not just bad for us but for the whole financial centre."
Dougan rejected suggestions the SNB's concern was related to a U.S. investigation into whether the bank helped wealthy Americans evade taxes by providing secret offshore accounts.
The bank is expected to have to pay a hefty fine and hand over U.S. client names as part of a settlement.
Oswald Gruebel, a former Credit Suisse CEO, said the bank's shares had fallen sharply on Thursday because shareholders were afraid that the bank would have to raise capital.
"But CS also has the possibility to cut its balance sheet and thereby indirectly increase its capital, or do both," Gruebel wrote in his weekly column for Der Sonntag newspaper.
But Hans Geiger, a retired Zurich University banking professor and a former senior executive at Credit Suisse, said the bank was ill advised to try to fight the SNB.
"The reaction of CS is fatal," Geiger told the Tages-Anzeiger newspaper on Saturday. "Whoever goes on a confrontation course with the national bank has lost their reason." (Reporting by Emma Thomasson; Editing by Alison Birrane)
Egypt tenses for new president after vote - Reuters India
CAIRO |
CAIRO (Reuters) - Egyptians choosing their president freely for the first time faced a daunting choice between a former general from the old guard and an Islamist who says he is running for God, leaving many voters perplexed and fearful of the future.
A win for either Ahmed Shafik - the last prime minister of ousted autocrat Hosni Mubarak - or Mohamed Morsy, a U.S.-educated engineer who would turn Egypt into an Islamic democracy, will go far to define the outcome of the wave of Arab Spring uprisings last year.
"We have to vote because these elections are historic," said Amr Omar, voting in Cairo, who said he was a revolutionary youth activist. "I will vote for Morsy... Even if it means electing the hypocritical Islamists, we must break the vicious cycle of Mubarak's police state."
Turnout at polling stations in several areas seemed lower on Saturday than during the first round. Polls re-opened at 8 a.m. on Sunday (0600 GMT) and were due to close at 9 p.m.
With no opinion polls, it was impossible to forecast who will emerge the winner by Monday - and whoever it is may face anger and accusations of foul play. Both men have wide support but many voters may be staying away, unhappy at a choice of extremes after centrist candidates were knocked out in a first round last month.
A sample of voter comments to Reuters near polling stations suggest many had put aside doubts about Shafik, whose campaign has gained momentum since he entered the race as an outsider.
A court dissolved Egypt's new parliament late last week, enraging Islamists who hold a sweeping majority in the assembly, who decried a coup by the military rulers who pushed their brother officer Mubarak from power 16 months ago to appease the street protests.
A win for Shafik, 70, who says he has learned the lessons of the revolt and offers security, prosperity and religious tolerance, may prompt claims of Mubarak-style vote-rigging and street protests by the Islamists and some disillusioned youths who made Cairo's Tahrir Square their battleground last year.
Both candidates promise to honour the spirit of last year's mass revolt against rampant corruption, poverty and a hated police force, yet many Egyptians who voted for neither in the first round see a stale contest that smothers hopes for change.
"Egypt writes the closing chapter of the Arab Spring," read a headline on Sunday in independent newspaper al-Watan, which said the election offers a "choice between a military man who aborted the revolution and a Muslim Brother who wasted it."
UNEVEN OUTCOMES
Morsy's campaign suffered a blow when he failed to rally much support from candidates who lost in the first round. To sceptics of the Brotherhood, it confirmed that the Islamist movement was too zealous and inflexible to represent all Egyptians.
"I will vote Shafik because I don't want anybody to impose on me a model of life that I don't accept," said health ministry employee Marianne Mallak, 29, voting in Alexandria. "I don't want somebody to rule the country in the name of religion."
Should Morsy prevail, benefiting from a movement forged by decades of clandestine struggle and from support among those who put aside qualms about Islamic rule to block a return of the old regime, he may be frustrated by an uncooperative military elite, for all the generals' pledges to cede power by July 1.
The Brotherhood on Saturday again denounced the dissolution of parliament, based on a ruling by the Mubarak-era constitutional court, as "a coup against the whole democratic process" and insisted only a popular referendum could reverse the parliamentary election.
But though overturning that vote drew comparison with events that triggered the bloody Algerian civil war 20 years ago, the Brotherhood, which hung back in the early days of the 2011 revolution, has shown little appetite for a violent showdown with Egypt's U.S.-equipped army, the biggest in the Arab world.
That stalemate, coupled with a failure this year of legislators to form a consensus body to draft a new constitution and a consequent lack of clarity over the powers the new head of state will have, leaves Egyptians, Western allies and investors perplexed by the prospect of yet more of the uncertainty that has ravaged the economy and seen sporadic flare-ups in violence.
A gunfight killed two in Cairo overnight and 15 were injured, after a dispute between street vendors, a security source said. There was no apparent connection to the vote, which saw little trouble on Saturday despite mutual accusations of fraud. Observers reported only minor and scattered breaches.
Police arrested 22 foreigners who were planning attacks after the election, another security source said. The Syrians, Jordanians and Palestinians were detained in Cairo on Saturday carrying "sophisticated weapons", the source added, without giving more details.
Should Shafik win, his supporters reckon, he and the ruling military council which took sovereign powers when Mubarak quit would work in harmony to restore confidence, notably for the vital and ravaged tourist trade - but questions would remain over how far the Islamists and other opponents would resist.
"DEEP STATE"
In 60 years since army officers toppled the colonial-era monarchy, Egypt's armed forces have built up massive wealth and commercial interests across industries, helped since the 1970s by a close U.S. alliance which followed the decision of the most populous Arab state to make peace with Israel.
Commonly referred to as the "deep state", it is these shadowy structures, currently overseen in public by the ad hoc Supreme Council of the Armed Forces under Field Marshal Hussein Tantawi, which many Egyptians see maintaining influence long after the promised handover to an elected civilian by July 1.
"There is no doubt that the state in all its institutions - judicial, military, interior, foreign and financial - back Shafik for president and are working to that end," said Hassan Nafaa, a politics professor who campaigned against Mubarak.
"It is very difficult to eradicate this spirit of Mubarak."
Only if liberals swallowed their qualms and voted for Morsy to prevent Shafik winning, Nafaa said, "only then may the 'deep state' back down - but I doubt this will happen."
Washington, paymaster of the Egyptian military, and the European Union, a major aid donor, both expressed alarm at the move against parliament and urged the generals to honour their pledge to stand aside. But, like neighbouring Israel, both are also uneasy at the rise of the Brotherhood and have looked on anxiously as Islamists have closed in on power in other new democracies of the Arab Spring, notably in Tunisia and Libya.
(Reporting by Edmund Blair, Yasmine Saleh, Dina Zayed, Tom Perry, Tamim Elyan; Writing by Alastair Macdonald and Tom Pfeiffer; Editing by Samia Nakhoul)
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