Ralph Atkins at the Financial Times reports that unemployment in the eurozone grew to a seasonally-adjusted rate of 9.2% in April, 0.3% more than the number for the US. In May many analysts had expected the unemployment rate in the eurozone to fall below the rate in the US for the first time--see Daily Sources 5/22 #9.
"The impact of lengthening jobless queues on demand in coming months is a main reason why economists expect the eurzone’s economic recovery to remain weak for a protracted. 'The eurozone recession may be past its peak, but for the labor market the worst is yet to come,' said Martin van Vliet at ING in Brussels.2. AGREEMENT BETWEEN SPANISH RULING SOCIALISTS AND CONSERVATIVES TO REIN IN "UNIVERSAL JURISDICTION" CASES
European policymakers will also be alarmed by the rise in youth unemployment. In April, some 18.5% of the labour forced aged under 25 were without a job--up from 14.7% a year before."
Helene Zuber at Der Spiegel reports that the ruling Socialists in Spain have an agreement with conservatives in order to rein in the Audencia National--or National Court--of Spain which has been the court to which human rights plaintiffs could file cases under the principle of "universal jurisdiction." The agreement basically requires that there be some tie to Spain in order for the court to claim jurisdiction:
"The accused will have to be arrested in Spain, a victim will have to be a Spaniard, or there will have to be some other decisive connection to Spain before the court will be allowed to proceed. There will also have to be proof that no other national court system has taken up a given case."The move clearly comes from international pressure, especially after Baltasar Garzón went ahead with plans to investigate six advisers to President George W. Bush for human rights violations that took place in Guantanamo Bay. In April Spanish prosecutors formally recommended that Baltasar Garzón--famous for his case against the former dictator of Chile, Augusto Pinochet--should not oversee any investigation into the six--see Daily Sources 4/17 #3. But pressure is also coming from Israel and China.
"Beijing has brusquely rejected a petition by [Spanish Justice Santiago] Pedraz to interrogate [ministers accused of [a "systematic attack on the people of Tibet] at home. The Madrid justice would be arrested immediately if he traveled to China, the government threatened. The Chinese foreign ministry warned the Spanish government--which is interested in good trade relations--not to meddle in China's internal affairs or to support the Tibetan separatists."The Spanish senior judiciary is also reportedly uncomfortable with the potential consequences of asserting universal jurisdiction:
"'We cannot become the world's judicial gendarme,' said Carlos Divar, chief justice of the Spanish Supreme Court and chairman of an internal watchdog body that oversees Spanish courts. 'Who are we to pass judgment in foreign countries when we have so much to deal with at home?' said the man who until recently was president of the Audiencia Nacional and disapprovingly witnessed his judges' ardor for pursuing foreign cases. His successor, Angel Juanes, also wants to see more consideration for 'national interests' in the court's behavior."Well worth reading in full.
3. POLAND SIGNS N.G. SUPPLY DEAL WITH GAZPROM, MAY SIGN DEAL THROUGH 2022
Patryk Wasilewski at Reuters reports that Polish gas delivery monopoly PGNiG concluded a deal with Gazprom for natural gas today after which supply was fully restored.
"Poland uses around 13-14 billion cubic metres of gas annually and imports about two-thirds of it from Russia.4. CHINA TO OPEN ANTI-DUMPING INVESTIGATION INTO RUSSIAN AND U.S. STEEL COMPANIES; STUDENTS LAUGH AT SECY GEITHNER'S ASSERTION THAT THEIR ASSETS ARE SAFE, BUT BEIJING REITERATES THAT U.S. AND CHINA NEED TO COOPERATE TO DEAL WITH CRISIS
Now that the short-term deal is signed, the government will press for a quick intergovernmental agreement with Russia, a necessary prerequisite to secure natural gas deliveries past 2009 when the PGNiG's deal with RosUkrEnergo runs out.
Poland may even agree to sign a deal with Russia until 2022, about eight years past the planned completion of the government's largest energy diversification project--the liquefied natural gas terminal, the economy minister said.
'It is easier to deal with a small surplus than shortage. From that point of view I don't see extension of the deal until 2022 as a problem,' Waldemar Pawlak told a press conference."
Kris Maher at the Wall Street Journal reports that the Chinese Ministry of Commerce on Monday said that it was opening an anti-dumping investigation into US and Russian steelmakers to see if they "sold a specialized type of flat-rolled steel used in electrical transformers below market value." The ministry was also beginning an investigation into US state and federal subsidies of the industry. The case follows an April case filed in the US by steelmakers and United Steelworkers alleging Chinese dumping into the US market of types of tubular and steel pipe used in oil drilling.
"[S]ome analysts said they believe the move by the Chinese government is an effort to sway the US Trade Commission in deciding the April case. 'This is political,' said Michelle Applebaum of Steel Market Intelligence in Chicago. Ms. Appelbaum also said she believes the filing was timed to Mr. Geithner's visit to Beijing. 'I think the timing is very heavily influenced by Geithner being there.'"Meanwhile, in addressing a student question after his speech at Peking University, Secretary Geithner said, "Chinese assets are very safe," per Glenn Somerville at Reuters. The student audience reportedly broke into loud laughter at the assurance.
"But later in the day, Chinese Vice Premier Wang Qishan said it was important for the two nations to show the world they are working together through their joint economic dialogue.The statement more or less mirrors the key message of Geithner's speech--see Daily Sources 6/1 #1.
'We must through our dialogue send a clear signal that China and the US are engaged in practical cooperation to address the crisis,' Wang told Geithner, according to the Chinese Foreign Ministry's website (www.mfa.gov.cn).
'This is important for boosting confidence and encouraging global financial stability and economic revival,' said Wang."
5. U.S. TO SELL BUNKER BOMBS TO SOUTH KOREA, KIM JONG IL NAMES THIRD SON SUCCESSOR
Malcolm Moore at the UK Telegraph reports that an unnamed South Korean military official told the media that the US had agreed to sell bunker buster bombs to Seoul for delivery between 2010-4.
"The laser-guided GBU-28 bombs were first used in 1990 during the Gulf War to destroy underground command centers in Iraq.(h/t Joshua Keating at FP Passport's Morning Brief.) In the meantime, Blaine Harden at the Washington Post reports that the dictator of North Korea, Kim Jong Il, has chosen his third son, Kim Jong Un, as his successor.
The 19-ft-long, 5,000lb bombs can penetrate over 20ft of concrete and 100ft of earth and could be used to target North Korea's intricate system of military bunkers and a series of munitions tunnels along the border."
"If Kim Jong Un does become the new leader--and there are analysts who doubt the decision is final--this second consecutive father-to-son handoff would be unique among nations that call themselves communist. There was no indication, however, that Kim Jong Il would be handing over power any time soon."Some analysts have tied the recent behavior by Pyongyang to the question of succession there, given reports that Kim Jong Il is not well. The transition of power is often pointed to by political scientists as a structural weakness in autocratic systems.
6. SARKOZY TO MEET WITH IRANIAN FOREIGN MINISTER TOMORROW IN PARIS, THE U.S.D.O.S. O.K.S CONSULATE AND EMBASSY INVITATIONS TO IRANIAN GOV'T REPS FOR 4TH OF JULY CELEBRATIONS
Emmanuel Jarry at Reuters reports that French President Nicolas Sarkozy will meet with Iran's foreign minister Manouchehr Mottaki on Wednesday in Paris.
"Bilateral encounters at such a senior level between Iran and one of the countries involved in the nuclear issue are highly unusual. It will be the first time Sarkozy has met a top Iranian minister since he took office in 2007."Meanwhile, Mark Landler at the New York Times reported yesterday that the State Department Friday sent out a cable to its consulates and embassies notifying them that they may invite representatives of the government of Iran to their fourth of July celebrations. Though some might dismiss the move as merely symbolic, a public reminder that the US has an anti-colonial past (and much of American engagement in the Middle East has been historically anti-colonial) is sly, in my opinion, given the ideological framework behind the Islamic Republic of Iran--see Law and Revolution in Iran.
7. SYRIAN KURDS SEE IRAQI KURDISH REGION AS SAFE HAVEN DESTINATION
Karlos Zurutuza at the Iraq Oil Report reported yesterday that Iraq's Kurdish region is becoming a destination for Syrian Kurds denied full citizenship rights by Damascus.
"Since 1962 Syria has classified Kurds as ‘Syrian Kurds’, ‘foreign Kurds’ and ‘concealed Kurds,’ only granting ‘Syrian Kurds’ full domestic rights and Syrian nationality. The remainder, who number an estimated 200,000, are registered as foreigners and live without domestic citizenship rights."The relative security provided by the Kurdish Regional Authority inside Iraq's Kurdish region has made it into a refugee destination for Arab Sunnis and Shias as well Kurds from other parts of Iraq as well as other neighboring countries, including Turkey and Iran.
8. FORMER SAUDI INTELLIGENCE CHIEF SAYS KILL OSAMA BIN LADEN, DECLARE VICTORY, AND "GET THE HELL OUT" OF AFGHANISTAN, OFFERS TO HOST TALKS; OPEC SAYS PRICES NOT DRIVEN BY FUNDAMENTALS
Jeff Stein at Spy Talk reported yesterday that former Saudi intelligence chief, Prince Turki al-Faisal, said in an interview with the columnist that the US should kill Osama bin-Laden and then "get the hell out" of Afghanistan.
"Turki, who was also Saudi ambassador to the United States from 2005 to April 2009, likened al Qaeda to a 'cult' and its leader to a 'hydra head with venomous snakes.'Turki said that no one would be able to get all the jihadis, but that it was important to take out bin-Laden, who has become iconic. In an interview with NPR noted by Stein, Turki dismissed the issue of creating a martyr:
To destroy the cult, he said, 'you have to cut off the head.'
'After that,' he advised, 'declare victory...then get the hell out of Afghanistan.'"
"So if he is eliminated there will be no more something to look up to. And the issue of a martyr, that some people say is there, is less attractive than having someone living and doing things and surviving the efforts to eliminate him."Turki said that Afghanistan could not be fixed by NATO and US forces. He also indicated that Riyadh would be happy to host peace talks between the Karzai government and the Taliban, but would not mediate between them. Well worth reading in full. Meanwhile, Kate Dourian at Platts reports that OPEC's chief economist, Hassan Qabazard, said at the World National Oil Companies Congress in Abu Dhabi:
"Prices are being affected more by non-fundamentals rather than by fundamentals. ... I think personally prices for the fundamentals that we see today are quite high and that is due to the inflow of investment funds into the market ... we see much more long positions by investors now in the market who are expecting a higher price."Qabazard indicated that he thought stocks of oil would be unloaded as the contango narrows and that prices may fall, as they "are going up too fast."
9. LAHORE HIGH COURT RULES INSUFFICIENT EVIDENCE TO HOLD SUSPECTED MUMBAI TERROR MASTERMIND
Griff Witte and Rama Lakshmi at the Washington Post report that the Lahore High Court ruled today that there was insufficient evidence to continue the house arrest of Hafiz Sayeed, founder of Lashkar-i-Taiba, and who is suspected of being a mastermind behind the Mumbai terror attack.
"In India, officials expressed deep displeasure.Government prosecutors said that they would appeal the court's decision.
'We are unhappy that Pakistan does not show the degree of seriousness and commitment that it should to bring to justice perpetrators of the Mumbai terror attack,' Indian home minister P. Chidambaram told reporters in New Delhi."
10. CHINA OFFERS $3 MILLION IN HUMANITARIAN AID FOR DARFUR REGION
The AFP reports that China's special envoy to Darfur, Liu Guijin, met with Sudan's President, Omar al-Bashir, and pledged $3 million in humanitarian aid to the region. Mr. Liu was in Khartoum to talk with al-Bashir at the start of a new round of talks with the Justice and Equality Movement (JEM)--the main Islamist rebel group in Darfur. The AFP reported in late May that the US special envoy to Sudan, Scott Gration, in Qatar met with Mr. Liu in the first ever meeting of the Darfor envoys of the permanent members of the UN Security Council, and said of the meeting that it was very "positive"--see Daily Sources 5/28 #1.
11. CANADIAN OIL SANDS PROJECTS MAY COME BACK ON LINE WITH RETURNS AVAILABLE AT $60/B
Scott Haggett at Reuters reports that Andrew Potter of UBS Securities has released a report which suggests that many Canadian oil sands projects mothballed due to high labor and material costs in combination with low oil prices may now be re-started on falling labor and material costs.
"More than C$90 billion ($83 billion) worth of oil sands projects were delayed, deferred or canceled after prices plunged, freeing up a squeezed skilled-labor pool, boosting productivity and increasing the availability of contractors.Potter estimates that many projects now require $60/b oil to be profitable, versus estimates last year ranging from $80-100/b.
'Developers are likely to see vastly improved labor productivity and lower labor costs as fewer workers are required to execute long-term oil sands growth,' Potter wrote in his report."
12. MEXICAN REMITTANCES FROM THE U.S. DECLINE BY 18.7% IN APRIL YOY
Elisabeth Malkin at the New York Times reports that remittances by Mexican workers in the US home have fallen by nearly 18.7% in April from a year previous to $1.8 billion, according to the Bank of Mexico. Remittances have been Mexico's second largest sources of foreign exchange, with oil being the largest. They are roughly equivalent to foreign direct investment with tourism taking the fourth spot.
13. PENDING HOME SALES INCREASE 6.7% MOM, 3.2% YOY
The Associated Press reports that the National Association of Realtors released its index of home sales which show a 6.7% increase in pending sales in April from March, and a 3.2% increase from the year previous.
"The big jump probably reflects the impact of a new $8,000 tax credit for first-time homebuyers that was included in the economic stimulus bill signed by President Obama in February. Since buyers need to finish their purchases by Nov. 30 to claim the credit, 'we expect greater activity in the months ahead,' Lawrence Yun, the Realtors’ chief economist, said in a statement."14. FORD'S CAR SALES UP 20% IN MAY FROM APRIL, DOWN 24% YOY
Nick Bunkley at the New York Times reports that Ford's sales in May were up 20% from April, and down 24% from the year previous.
"Ford is the only Detroit automaker that has not entered bankruptcy, after General Motors filed for Chapter 11 protection on Monday and Chrysler did so a month ago. They and other automakers were scheduled to report their May sales figures later Tuesday.
Through April, auto sales in the United States were down 37% this year, as the economic recession deters many consumers from buying a new car or truck."