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  • Egypt

    The revolution rolls on

    Apr 13th 2011, 13:10 by M.R. | CAIRO

    OTHER would-be revolutions in the Middle East have stalled or descended into civil war. But the biggest so far, in Egypt, is still going strong. On April 13th, Egyptian police took custody of the country's ex-president, Hosni Mubarak, and escorted his two sons to prison. The Mubaraks face possible trial on charges of corruption and abuse of power, a humiliation unprecedented for a former leader not only in Egypt, but across the wider region.

    Toppled in February following weeks of mounting protests, Mr Mubarak had spent the past two months confined to a cliff-top villa in the beach resort of Sharm el-Sheikh. The army generals running Egypt in what they promise will be a swift transition to democracy had backed calls for the prosecution of former regime figureheads, yet had appeared reluctant to hunt the biggest fish. They had shielded Mr Mubarak himself in respect for his three decades' service as their commander-in-chief. But pressure from the Egyptian public proved unrelenting.

    Following further massive protests on April 8th, state prosecutors hauled in the 82-year-old former president and his two sons for questioning. The Mubaraks are accused of amassing illegal wealth, and of responsibility for brutal police tactics blamed for the deaths of more than 800 protesters in January. Mr Mubarak's sons, Alaa and Gamal, were remanded in preventive custody on April 13th, joining a growing roster of imprisoned ex-officials including a prime minister, senior cabinet members and leaders of the ousted ruling party. Mr Mubarak himself has been transferred to a military hospital amid rumours that he suffered a heart attack.

  • Libya

    Deal or no deal?

    Apr 13th 2011, 10:43 by The Economist online

    OTHER rebellions seeking international legitimacy might have welcomed their first visit by heads of state. Not Libya's. No sooner had the leaders of Mali, Mauritania and Congo-Brazzaville landed in Benghazi, the de facto rebel capital, than they were set upon by a Libyan mob, demanding their departure. Correctly predicting a rout, South Africa's president, Jacob Zumu, abandoned the African Union's diplomatic shuffle between Colonel Muammar Qaddafi and the rebels before the delegation headed to Benghazi.

    Rebel anger stems in part from the AU's message. Delegates unveiled a roadmap which included a ceasefire and delivery of humanitarian aid to conflict areas followed by a transitional period of dialogue between the warring parties. But it did not stipulate the colonel's departure, the main rebel demand.

    In five-star hotels dripping with chandeliers, the Libyan rebel council echoed the rebuff on the streets. "The African Union initiative does not include the departure of Qaddafi, his sons and his inner circle from the Libyan political scene, therefore it is outdated," said Mustafa Abdel Jalil, head of the National Council. Claims by the African Union that the colonel had accepted the plan only intensified the rebel rejection.

    In many Easterners' minds, their origins alone were sufficient to condemn the AU delegates. Protests erupted as soon as the African leaders landed. For many Libyans, the African Union, which in 2009 named Colonel Qaddafi its president, epitomises the foreign projects on which the colonel frittered the country's oil wealth in his search for international adulation, while leaving his people in penury. That anger has intensified since the start of Libya’s uprising in mid-February, as rebels looked north for support, and the colonel turned south. While Tripoli greeted AU delegates with horse-parades, processions staged by Libyan tribesmen from the Sahara, and signs saying "Thank you, Africa," Benghazi's protestors chanted "murderers."

    Rebels have accused at least two of the visiting leaders of facilitating the supply of mercenaries to the colonel's ranks. A defecting Libyan diplomat who arrived in Benghazi from Bamako, Mail's capital, last week estimated that the west African country had sent 4,000 fighters in exchange for Libyan largesse. True or not, rebels almost to a man believe it.

    The visit served to highlight the widening gap between what is said and what is done which has characterised the conflict. While officials in Tripoli signalled the colonel's readiness to pursue a ceasefire, his forces on the ground continued to shell Misrata, Libya's third largest city and the rebels' last remaining urban stronghold in western Libya. By contrast, the rebels insist on maximalist aims while consistently retreating to a north-eastern rump where they are vulnerable to the colonel's predations. National Council members who urge realism and call for the consideration of political options are dismissed as defeatists. Last week, gun-toting youths on Benghazi's docks chased away a ship carrying ambulances and humanitarian aid from Turkey, on the grounds that its prime minister, Recep Tayyip Erdoğan, was using the country's NATO membership to limit the military alliance's bombardment of the regime's forces.

    NATO, too, seems divided between those seeking the colonel's downfall, led by America, and those arguing for a limited reading of UN Security Council Resolution 1973. On April 8th, NATO Secretary General Anders Fogh Rasmussen reiterated that there "is no military solution" to Libya's crisis. Four days later, however, the foreign ministers of the two powers leading the combat operation—Britain and France—called for the organisation to fulfil the UN mandate to protect civilians with a more robust use of force.

    There are limits. On April 11th, French and UN forces in Côte d'Ivoire captured former President Laurent Gbagbo in his Abidjan home, but it seems unlikely a similar attempt will be launched in Tripoli. Despite their bravado, the rebels have indicated their readiness to engage in political talks in Qatar, not least with Moussa Koussa, the colonel's former intelligence chief and foreign minister accused by rebels of being a principal agent of repression. Mr Moussa defected to Britain two weeks ago, but was allowed to leave for Doha after he issued a statement calling for "democratic dialogue" to prevent Libya degenerating into another Somalia.

  • Unrest in Syria

    No end in sight

    Apr 12th 2011, 17:27 by The Economist online | DAMASCUS

    THE government in Syria cracked down harder this weekend on the growing numbers protesting against Bashar Assad's regime. On Friday April 8th, security forces killed at least 28 people in the cities of Deraa, Douma and Harasta, the highest death toll on a single day so far. Two days later at least four others were shot dead in the coastal city of Banias after reports say the army surrounded the city and let loose the shabiha, a thuggish Alawite smuggling gang backed by the regime that has been responsible for violence elsewhere. Human Rights Watch, a New York-based lobby, said on Tuesday that security forces had prevented demonstrators from reaching medical care by shooting at doctors and arresting people in hospitals.

    Protests have not yet spread to Aleppo, Syria's second city, but they have reached the villages around Damascus, the capital, and much of the rest of the country. For the first time since they began, demonstrations have continued beyond Friday. On Monday students at Damascus University held an anti-government rally. The army has encircled Banias and shows no sign of leaving. Further violence has been reported in nearby villages today.

    The government has warned protesters that there is "no more room for leniency and tolerance" in its efforts to restore order. Until now, Mr Assad's regime has blamed the violence on outsiders, claiming that the president has ordered his troops not to fire. This recent statement suggests the situation may become even more violent.

    Sunday's violence in Banias has complicated an already murky picture. In addition to the four protesters, at least nine soldiers were shot. Members of private militias have been blamed along with the shabiha. Witnesses blame them for shooting at least some of the protesters in Banias. A combination of security forces and the shabiha may also have been responsible for killing the soldiers after some refused to fire on demonstrators.

    With Iraq to the east and Lebanon to the west, fears of sectarian strife loom large in Syria. The regime has long sought stability through dividing and exploiting different religious and ethnic groups, a tactic it has used shamelessly in recent weeks. In a speech a fortnight ago, Mr Assad repeatedly used the word "fitna", an Arabic term for discord that often refers to religious dissent. An increasingly creative state media report that sectarian and religious tensions are rising, saying that people have been caught trying to remove female students' headscarves.

    Most Syrians are Sunnis but the country has large Shia, Druze and Christian minorities. Discussing these religious divides has long been taboo. But despite rising fears of sectarianism, especially among the Alawites, the chants of "Syrians are one" and evidence of mixed protests suggest that Syria's uprising is not about religion divisions. Even the country's Kurds, who stayed out of the fray for the first two weeks, concerned about the issue being framed as an ethnic issue, are now seeking to build links with protesters as they reject Mr Assad's last-ditch offer of nationality, made last week after almost 50 years.

    But as in the other Arab uprisings, economic woes and political repression, not sectarian strife, lie behind the discontent. The biggest divide is between the haves, many of them linked to the regime, and the have-nots. Fewer than ever now believe that Mr Assad will do much to change this. No meaningful reforms have been implemented. People grumble that it took less than a day to amend the constitution to lower the minimum age of the president to allow Mr Assad to take power upon his father's death but lifting a decades-old emergency law is taking weeks.

    State television has shown people on the street calling for protesters to be hung in downtown Damascus while at pro-regime rallies people have chanted slogans declaring their willingness to spill blood for Mr Assad. It is hard to see a peaceful way out of this—unless Mr Assad stems the killings and makes some significant reforms, fast.

  • Letters from our readers

    On Paul Ryan's budget plan

    Apr 12th 2011, 14:53 by M.D. | London

    Paul Ryan, the Republican chairman of the Budget Committee in the House of Representatives, has submitted his own proposals for sorting out America’s fiscal mess. His plan has energised the debate on the deficit. It calls for drastic cuts in spending and would terminate Medicare, the public health-care plan for the elderly, replacing it with government subsidies for private insurance. Federal funding for Medicaid, a health scheme for America’s poor, would be limited to capped grants to the states. According to Mr Ryan’s calculations, America’s fiscal deficit would be greatly reduced. We wrote about the plan in our issue dated April 9th, and readers have responded in droves.

    Leslie Rogne Schumacher, a doctoral student at the University of Minnesota, is confused by The Economist’s "praise" of Mr Ryan’s blueprint:

    “In no way is this plan brave or courageous. It merely panders to tea-party activists, who not only lack a pragmatic understanding of how to secure America’s future, but who have been often criticised by The Economist for holding such ill-informed and rigid views. Shouldn’t we be wary of a plan that promises to solve so much, while at the same time cynically promotes a political agenda?”

    Party politics are also at the fore of Jeremy Ginsburg’s thoughts. Writing from New York, he thinks that, “A truly brave plan would disabuse the Republican base of its fantasies, rather than reinforcing them, and move towards gathering the support from Democrats that will be needed to actually address the nation’s fiscal imbalance. Mr Ryan’s plan has widened the gap between the parties”. Harry Breitrose takes time off from the Stanford campus to point out that the burden of Mr Ryan’s plan “is to be balanced on the backs of the most vulnerable members of American society, the young, the poor, and the old.”

    With regards to the Medicare element of the proposals, Peter Spurging, from Seattle, imagines that “Many elderly Americans will be scratching their heads at your description of Medicare as an ‘all-you-can-eat buffet of care… paid for by government-run insurance’. Medicare is far from free. Its participants have paid a lifetime of taxes, and must still fork out a monthly fee to receive basic services, especially for prescription drugs. Retirees then face a bewildering hotchpotch of additional payments, deductions, limits and restrictions on access to services.”

    Mr Spurging insists that this is “not exactly the generous government-funded bean-feast your leader suggests.”

    Mr Ryan’s plan, however, will not affect current recipients of Medicare. The lion’s share of the cuts will actually fall on future retirees. Larry Littlefield, from Brooklyn, bemoans the fact that,

    “Mr Ryan’s budget proposal did not call for any sacrifices from those aged 55 and over, but it did include even more Medicare spending on that group, to be funded by 30 more years of deficits, to be paid back by younger generations who would have drastically lower benefits. We have had 30 years of growing generational inequities. Politicians should speak more about generational inequity. What is happening at the moment can only be described as generational greed”.

    Lastly, a reader from Alameda, California, places an emphasis on the intellectual antecedents of Mr Ryan’s plan. Andrew Laurence reminds us that:

    “Congressman Ryan is an admitted devotee of Ayn Rand, who believed that helping the poor, whether it is done by government or through private efforts, was not only wrong but positively immoral”.

    We will be writing more about the deficit and the politics of Paul Ryan’s plan in our next issue.

  • France's burqa ban

    France uncovered, it hopes

    Apr 12th 2011, 10:57 by S.P. | PARIS

    WHEN the French voted last year to ban the niqab, or face-covering Islamic veil, the hard part was always going to be applying the law. Sure enough, the scenes captured by television cameras yesterday, as the law came into effect, of two veiled women being arrested by the police outside Notre Dame cathedral were dramatic.

    Yet the women were detained not for wearing the niqab, but for carrying out an unauthorised demonstration; they were later released without being fined the €150 ($217) that the new law imposes. With such intense media scrutiny on the day the law came into effect, French police may have wanted to tread carefully. But the incident underlines the sensitivities in France surrounding any new rules that appear to target Muslims.

    Very few women in France wear the niqab (which the French often call the burqa). Intelligence estimates put the number at no more than 2,000, out of a total Muslim population of some 5m. Kenza Drider, one of the women arrested yesterday, had taken a train from Avignon to Paris specifically to make a point outside Notre Dame.

    But mayors in some immigrant-heavy towns say that the numbers have risen over the years, particularly among young French-born women who seem to have a mix of religious and political motivations. Some see the hand of hardline Islamist groups, which work through local bookshops and mosques to encourage the spread of the niqab. Many of the women who adopt the garment as teenagers come from families of north African origin, where there is no tradition of the niqab.

    This is why support for a ban came from across the political spectrum. Only one deputy in the National Assembly voted against it last year. The ban was widely seen not as a clampdown on religious freedom but a means of reinforcing France’s strict tradition of keeping religion out of public life. (The law itself makes no specific mention of Islam but forbids the covering of the face in public places on public-security grounds.) Anything between 57% and 74% of the French, according to various polls, backed the ban. The strongest voices of disapproval came from outside France.

    Since the law was passed, however, Mr Sarkozy’s popularity has sunk to record lows and he has come under pressure from a revived far-right National Front, led by Marine Le Pen. Mr Sarkozy faces a tough presidential election next year, and several polls suggest that Ms Le Pen might even beat him into the second-round run-off.

    Partly as a result, he has been talking tough, again, about immigration and Islam. Last week his UMP party staged a controversial debate on laïcité, or secularism, which turned out to be all about Islam. Even French Muslims who have no time for the niqab-wearing fringe sense that Islam is being exploited for political ends.

    Such is the tense atmosphere that even moderate voices in favour of the ban seem to have gone quiet, perhaps for fear of further stirring anti-Islam sentiment. Fadela Amara, a Muslim ex-minister in Nicolas Sarkozy's first government, once called the burqa a “prison”; now she seems to be silent. Rama Yade, another of the president's ex-ministers and of Senegalese origin, once said she considered the niqab an infringement of women’s rights; last week she quit the UMP, blaiming its divisive attitude on identity matters.

    The French may be trying to ban religion from public life, but, with little more than a year before they go to the polls, there are no signs that it is about to disappear from political life.

    Video: Three views on the tension between laïcité and the veil

  • Renault's number two resigns

    Heads had to roll

    Apr 12th 2011, 7:42 by V.V.B. | LONDON

    RENAULT is eating a lot of humble pie this year. After insisting for months that it had uncovered a major case of industrial espionage, the biggest French carmaker admitted a few weeks ago that it was tricked into wrongfully firing three senior executives after a company investigation. There has been speculation that Renault's probe mistakenly concluded that the three had received payments from Chinese companies via accounts in Liechtenstein and Switzerland in exchange for confidential information.

    Immediately after Renault’s embarrassing admission, the French government, Renault’s biggest shareholder with a 15% stake, started to push for the resignations of those responsible for the unfair dismissals. Christine Lagarde, the finance minister, said that those responsible for the affair “must depart”. On April 11th, some of them did. Patrick Pélata (pictured above), the firm’s number two, resigned—as did Christian Husson, the company’s chief legal counsel, Jean-Yves Coudriou, the head of human resources and Laurence Dors, the company’s general secretary.

    The French government did not demand the resignation of Carlos Ghosn, the boss of Renault, who also runs Nissan Motor, the Japanese carmaker linked in a close alliance with Renault. And with good reason: Mr Ghosn is the architect of Renault's alliance with Nissan, which he rescued from near-bankruptcy and revived with astonishing success. The Franco-Japanese tandem is making a bold bid for leadership in the electric-car sector, and the spy affair comes at a sensitive time for the development of the ambitious, €4 billion ($5.6 billion) electric-car programme. Moreover Nissan is currently grappling with the aftermath of Japan’s devastating earthquake.

    This isn’t the moment to lose the chief executive of Renault and Nissan so Mr Ghosn will be allowed to soldier on. Renault’s board has “turned a painful page”, Mr Ghosn said in a statement of the announcement of the departures. He had tried to hold on to the loyal Mr Pélata, whose resignation he refused in mid-March. And as an act of penance he pledged to forgo his stock options this year and repay the performance bonus in his 2010 pay, worth €1.6m. Both are honourable gestures, but they will not quite restore the shine of one of the great stars of the European car industry.

  • Libyan refugees in Tunisia

    Fleeing the fighting

    Apr 11th 2011, 15:11 by The Economist online

    A REFUGEE crisis is brewing on the border between Tunisia and Libya. According to the UN, as many as 80,000 people, many of them Egpytian migrant workers, have fled the fighting between forces loyal to Libyan dictator Muammar Qaddafi and NATO-backed rebel troops.

     

  • The interim report of the Vickers commission

    Bigger buffers, smaller banks

    Apr 11th 2011, 14:26 by J.R. | BERLIN

    The sinking of the Titanic led, in time, to a new wave of regulations covering safety at sea. The new rules, which included an edict that ships carry enough lifeboats to accommodate all those on board, struck such a sensible balance between safety and cost that they were soon widely adopted. Britain’s Independent Commission on Banking, chaired by Sir John Vickers, a former chief economist at the Bank of England, hopes to do the same with proposed rules that should make the financial system quite a bit safer, yet without imposing such onerous costs that its recommendations are laughed at all the way to the rubbish bin.

    The two main recommendations in the commission’s interim report, which was released today, are that big British banks should hold a lot more equity capital against their assets and should rearrange themselves so that their retail banks can survive (or be plucked to safety) even if the rest of the bank hits a financial iceberg. The commission also wants to beef up the competition on the high street, signalling that Lloyds Banking Group in particular needs to divest more branches than is currently required under European Union rules.

    On capital, the commission reckons that the minimum that systemically important banks should set aside as buffers ought to rise to 10% from the 7% proposed by Basel III. Its reasoning seems to be based on a mixture of research and realism. The interim report argues that there is ample evidence showing that the new Basel standard (which itself is twice as high as before the financial crisis) is far too low, and that even 10% may not be quite enough. The commission seems to have settled on this number in the hope that it will not be so high as to be unceremoniously rejected, and proposes that the additional 3% becomes the new surcharge applied to big and systemically important institutions. There is perhaps hope that in Britain this could become the new standard for large banks. It seems unlikely, however, that the Basel Committee on Banking Supervision, a huddle of central bankers and regulators, would agree to an equity surcharge this big as the new global standard. People close to the talks seem to think the number agreed to in Basel will be closer to 1% than 3% and largely, if not entirely, composed of convertible capital instruments.

    The Vickers commission’s second big proposal is to have banks ringfence their retail arms. Large universal banks, which combine retail and investment banking, would be allowed to keep playing in the capital markets. They would, however, have to set aside enough capital in separate pools to be sure that either part of the bank could survive without the other.

    The proposals are far less radical than some banks may have feared. They will probably also not cost that much to implement. Industry estimates put the cost of ringfencing at about £5 billion ($8 billion) a year, mainly because funding costs of the separate parts will rise as each will be less diversified than the whole. These estimates are probably overstated. Moreover, the real impact of the commission’s proposals is that they may help to bring about a measure of transparency and market discipline to bank funding.

    Because of its reasonableness, the commission’s recommendations will be difficult to dismiss. A final report is due in September.

  • The week ahead

    The Portuguese patient

    Apr 10th 2011, 10:43 by The Economist online

    A guide to what will be in the news in the coming week

    Monday 11th

    In France, a ban on the niqab, an outfit worn by some Muslims that covers everything but the wearer's eyes, comes into force. Silvio Berlusconi is due in court again, this time on charges related to his business interests.

    Tuesday 12th

    The 50th anniversary of Yuri Gagarin's trip into space.

    Wednesday 13th

    India's Prime Minister, Manmohan Singh, visits China. The leaders of the other BRICS, plus South Africa, are due to meet him there.

    Thursday 14th

    G20 finance ministers meet in Washington. Meanwhile the BRICS Emerging Powers Summit gets underway in Hainan, in China.

    Saturday 16th

    Nigeria' delayed presidential election is due to take place.


  • The Economist

    Digital highlights, April 9th 2011

    Apr 8th 2011, 8:53 by The Economist online

    Power struggle
    To some, the crisis at Fukushima is a final demonstration that nuclear power carries risks that are too great. To others, even such accidents cannot trump the security of electricity supply and the low-carbon energy that it brings. Would the world be better off without nuclear power?

    Defined difficulties
    A videographic accompanying this week’s special report illustrates the scale of the problems facing pension provision in the West. The next generation is smaller than the baby boomers, official retirement ages lag behind longevity and defined-contribution plans are often underfunded

    After the revolution
    Tunisia’s revolution was the starting point of the Arab awakening and its transition to democracy may yet prove a blueprint for other Arab countries. We meet some of the people involved and travel to Tunisia’s poor interior where, as this short video shows, an anxious calm prevails

    United States: Zealotry and responsibility
    Terry Jones is not responsible for the mob violence in Afghanistan. David Petraeus is wrong to imply he is

    Europe: Going nowhere fast
    The International Court of Justice throws out Georgia’s case against Russia over the 2008 war, and talks in Geneva stall

    Middle East: A change of heart
    Richard Goldstone recants some parts of his report on Israel’s war in Gaza two years ago

    Asia: No country for old men
    Cambodia forbids foreign men aged over 50 or earning too little from marrying its women

    Britain: The front line needs the back office
    Getting rid of paper-pushers in the National Health Service doesn’t get rid of the paper that needs pushing

    Americas: It’s the economy
    Mexico’s main opposition party will campaign on poverty rather than security

    Finance: Forced out
    Bangladesh’s highest court rules that the removal of Muhammad Yunus from Grameen Bank last year was legally valid

    Science: Flexible electronics
    Engineers have at last built chips out of something cheaper and bendier than silicon

    Science: Big Astronomy
    It’s not only particle physicists: astronomers like expensive toys, too. Just look at the planned Square Kilometre Array

    Culture: Whither the book?
    A new collection of essays puts this question to a group of writers

    Economics: Sand in the gears
    In the aftermath of the global crisis, the IMF is softening its view of policies designed to slow volatile capital flows. Our network of economics experts discusses when, if ever, capital controls are justified

  • Europe's debt crisis

    Down goes another one

    Apr 7th 2011, 0:24 by The Economist online | LISBON

    ANOTHER domino has fallen in the eurozone debt crisis. After Greece and Ireland, Portugal has become the third debt-laden economy on Europe’s periphery to request a financial rescue.

    European Union leaders have breathed a sigh of relief. Olli Rehn, the EU’s top economic official, said it was a “responsible step for securing the financial stability of the euro zone”. José Manuel Barroso, a former Portuguese prime minister who is now president of the European Commission, said the request would be “processed in the swiftest possible manner”.

    But Portugal, facing years of austerity and low growth, may not be inclined to join in the general rejoicing. Spain, lacking the firewall that Portugal had previously provided, could be feeling distinctly uneasy.

    Markets have so far given Spain the benefit of the doubt, appreciating decisive deficit-cutting measures implemented by José Luis Rodríguez Zapatero, the country’s Socialist prime minister. But investors may grow more sceptical when they begin to examine Spain’s troubled savings banks more carefully, noting that the government also runs a bigger budget deficit than Portugal.

    José Sócrates, Portugal’s outgoing prime minister, who belligerently resisted a bail-out for almost a year, blamed his eventual capitulation on the centre-right Social Democrats (PSD), the main opposition party. By refusing to support the minority Socialist government’s fourth austerity package, he said, the PSD had precipitated a political crisis that forced him to resign on March 23rd, triggering an early election on June 5th.

    Portugal and its banks had since seen their credit ratings downgraded to “dangerous” levels, Mr Sócrates said. The country’s borrowing costs soared to successive euro-era highs for 11 consecutive days. Shortly before he announced in a brief televised address on Wednesday night that he had asked the EU for help, Portugal had been forced to pay what analysts said was a “prohibitive” interest rate of 5.9% to raise €1 billion ($1.43 billion) in one-year debt.

    Pedro Passos Coelho, the PSD leader and favourite in the polls to become the next prime minister, said the request for aid had come too late, but that he would support it nevertheless.

    The outgoing government has not specified how much or what type of aid it has requested. But it is unlikely, yet, to be a full Greek- or Irish-style bail-out agreement supported by the European Financial Stability Facility and the IMF.

    Only the new government chosen in the election will have the authority to negotiate a “more substantial” aid package of that nature, according to Mr Passos Coelho. In the meantime, Mr Sócrates is expected to negotiate some form of interim aid that will see Portugal past two big financing hurdles on April 15th and June 15th, when it has to pay a total of €12 billion in bond redemptions and interest payments.

    Mr Sócrates has thrown in the towel, but Portugal knows from the example of Greece and Ireland that its problems are far from over. João Leite, head of investment at Portugal’s Banco Carregosa, said the request for aid was unlikely to lead to any significant reduction in the country’s long-term debt yields.

    More importantly for voters, the austerity measures that Europe’s fiscally conservative governments will demand as a condition for aid can be expected to bite much harder than those Mr Sócrates pushed through. On top of all this, the Portuguese will have to endure two months of election campaigning by politicians whose credibility with many voters has fallen as low as the country’s credit standing in bond markets.

    (Photo credit: AFP)

  • Violence in Yemen

    Getting nastier

    Apr 6th 2011, 17:56 by P.W. | CAIRO

    ON APRIL 4th, uniformed soldiers and plain-clothes policemen opened fire on protesters in the Yemen's commercial capital, Taiz. The government's forces killed 12 and injured another 300-odd people, mostly through their liberal use of tear gas. It was the worst attack so far on the peaceful demonstrators in Taiz, a poor city four hours south of the capital, Sana'a, where there have been many protests since unrest broke out earlier this year.

    As negotiations between President Ali Abdullah Saleh and the opposition have faltered, attacks on Yemen's pro-democracy protesters have escalated. In Hodeidah, a quiet port on the Red Sea, government supporters used tear gas and live ammunition on demonstrators, killing three. The day before Monday’s fatal shootings in Taiz, there had been clashes when police attacked thousands of women gathered to protest against the government, provoking men to step in to protect them.

    So far America been reluctant to criticise Mr Saleh, an important—if mercurial—ally in fighting Al Qaeda's Arabian Peninsula franchise. The White House was quick to condemn the violence in Taiz but has not yet called for Mr Saleh to step down.

    In a television interview on March 27th, the American defence secretary, Robert Gates, spoke of the dangers of a post-Saleh Yemen and announced that his priority there was the "war on terror."  There has already been a breakdown in security as government troops stationed across the country are called back to various cities to put down protests, he argued.

    Militants are said to have taken control of the town of Jaar, an al-Qaeda stronghold in the restive southern province of Abyan. Last week the group announced an "Islamic emirate" there. "From now on," read a statement posted online by the militants, "women who go out to the markets need to be accompanied by a relative, who carry a proof by identity cards, or passports."

    The latest edition of al-Qaeda’s online English-language magazine, Inspire, published on jihadi forums at the end of March, carries an article by the Yemeni-based radical cleric, Anwar al Awlaki, describing the organisation's enthusiastic response to the "tsunami of change" sweeping through the Arab world, and bragging of "the upsurge of mujahideen activity" throughout the region.

    Mr Saleh has been keen to stress that his continued leadership is essential to keeping Yemen stable. On March 30th he told a committee of the ruling party that six of Yemen's 18 governorates "have fallen". But many opposition protesters say that Mr Saleh is exploiting and even exaggerating the threat of al-Qaeda to retain the backing of Western powers.

    The Americans are looking increasingly unconvinced.  On April 3rd the New York Times reported that Ameria is ready to abandon Mr Saleh. But as Gregory Johnsen, a Yemen expert, points out, the worry is not only over what happens if Mr Saleh goes, but what will happen if he stays.

  • Silvio Berlusconi's trials

    Opening the Rubygate

    Apr 6th 2011, 13:18 by The Economist online | ROME

    IT COULD not have begun more discreetly. A trial heralded as the most sensational of any brought against Italy’s much-prosecuted prime minister, Silvio Berlusconi, opened this morning at a hearing lasting nine minutes and 50 seconds—and was promptly adjourned to May 31st.

    Mr Berlusconi, who was not in court, is accused of two particularly squalid offences: paying an underage prostitute, and exploiting his position to cover it up. He denies any wrongdoing, and will doubtless have been heartened by what little emerged at today's hearing. The alleged prostitute is Karima el-Mahroug, known to some as Ruby Rubacuori ("Ruby Heartstealer"), the runaway daughter of a Moroccan immigrant who was under 18, the minimum age for prostitution in Italy, when she visited Mr Berlusconi’s villa outside Milan last year.

    Ms el-Mahroug's lawyer told the court that she would not be joining herself to the case or seeking damages from the prime minister. In fact, she denied she was a prostitute or that she had had sex with the 74-year-old Mr Berlusconi.

    That was not the only good news for the embattled prime minister. Yesterday the Chamber of Deputies, the lower house of parliament, resolved by a 12-vote majority to ask Italy's constitutional court to block the proceedings against him. Mr Berlusconi’s supporters, who saw two more deputies join their ranks for the vote, maintain that the prosecutors ignored a ruling by parliament that the case should have been dealt with by a special court. (His opponents argue that jurisdiction is a matter for judges and note that the special court would have needed parliamentary approval to proceed.)

    Today's adjournment may give the constitutional court time to decide. But it will also give the judges and prosecutors in Milan time to focus on a separate case, one Mr Berlusconi is said to fear more, in which he denies bribing a British lawyer, David Mills, to withhold testimony that could have led to his conviction in an earlier trial.

    Since Mr Mills has already been found guilty (although his conviction was later quashed on a technicality), there is a real chance the prime minister could face the same verdict, and that the proceedings against him will be dispatched before they are timed out by a statute of limitations, as has happened in previous cases against him.

    This, say critics, is why his government has resurrected a bill to put different sorts of time limits on trials and appeals. Drafted by Mr Berlusconi’s lawyer, the bill is ostensibly intended to ginger up Italy’s notoriously sluggish legal system. It has been approved by the Senate but not yet by the chamber. The body that oversees the judiciary says that if the law is enacted, between 10% and 40% of the defendants currently on trial in Italy could walk free. Mr Berlusconi’s justice minister says the true figure is 1%.

  • The Goldstone report

    Something of a change of heart

    Apr 5th 2011, 13:56 by D.L. | JERUSALEM

    THERE is no joy like schadenfreude, say Israelis. The 17th verse of the 24th chapter of the book of Proverbs counsels otherwise. But the Israeli government preferred popular gloating to biblical restraint in its response this week to Richard Goldstone's public recantation of the charge that Israel may have deliberately killed non-combatants in Gaza two years ago.

    The charge was a key element of the Goldstone Report, an investigation into Israel's war against Hamas in Gaza in December 2008-January 2009 which was commissioned by the UN Human Rights Commission and endorsed by the UN General Assembly. Mr Goldstone, an eminent South African judge and a lifelong Zionist, chaired the panel. He has faced obloquy and condemnation from Israel and Jewish groups worldwide in the wake of its findings.

    Some 1,300 Palestinians died in "Operation Cast Lead", most of them armed militants but many hundreds of them innocent civilians, including scores of children. Thirteen Israelis, soldiers and civilians, were killed during the operation.

    It was the accusation that Israeli policymakers and generals caused civilian deaths as a premeditated war aim that triggered the almost unanimous excoriation of Mr Goldstone and his report throughout Israeli society. Plenty of doveish moderates were aghast at the death toll and prepared for severe strictures from the rest of the world. Many in Israel, including the army, recognised that the rules of engagement between regular armies and guerrillas needed revision and clarification.

    But almost no Israelis were prepared to accept the notion that Israel's operation had deliberately targeted Gazan civilians as a way of defeating Hamas. It is principally in this core matter of "intentionality", as he calls it, that Mr Goldstone has now recanted, in an article this weekend in the Washington Post. There was no evidence, he now says, to sustain it. That, it may be noted, was largely because Israel refused to co-operate with Mr Goldstone and his team during their compilation of evidence, which was necessarily collected from Gazans and international observers in Gaza.

    Nor has Mr Goldstone recanted from a string of serious accusations levelled against Israel in his original report. Among them were charges that the Israelis had hit buildings that were not military targets and were "the foundations of civil life", such as a school, a flour mill, water installations, sewage-treatment facilities, wells, greenhouses and so forth. It also chided the Israelis for the blockade of Gaza, resulting in severe shortages of food and medicine for the civilian population.

    But he noted that the Israeli army meanwhile has officially instituted much tighter restraints on the use of its firepower—a consequence of the Goldstone report which, it is to be hoped, will not now be reversed amid the rejoicing over Mr Goldstone's discomfiture.

    Part of the reason for Mr Goldstone's partial change of heart seems to have been the apparent readiness of Israel to examine its own behaviour. He writes: "Our report has led to numerous "lessons learned" and policy changes, including the adoption of new Israel Defense Forces procedures for protecting civilians in cases of urban warfare and limiting the use of white phosphorus in civilian areas." By contrast, said Mr Goldstone, Hamas, Gaza's Islamist movement, which the original report criticised for firing rockets indiscriminately at concentrations of Israeli civilians across the border in Israel, had made no such efforts.

    Israel's Prime Minister, Binyamin Netanyahu, has set up an inter-departmental team whose task is to bring about, through vigorous diplomacy, the renunciation of the report by the UN. That is unlikely. But demanding it, Mr Netanyahu presumes, will enhance and extend the enjoyable public-relations coup which Mr Goldstone's backtracking has afforded his country.

  • Muhammad Yunus and Bangladesh

    Forced out

    Apr 5th 2011, 13:55 by The Economist online

    AN IMPRESSIVE international show of support for Muhammad Yunus, the Nobel prize-winning founder of Grameen Bank, failed to convince Bangladesh's highest court that he should be allowed to keep his job as managing director of the pioneering microlender. On April 5th the court ruled that Mr Yunus, aged 70, was required by law to step down as managing director when he turned 60, and the belated enforcement of that requirement late last year was legally valid.

    To Mr Yunus, and his many supporters around the world, the decision to push him out, so long after this was supposedly required, was a politically-motivated use of a technicality. Upholding the decision will deepen international concerns about the independence of the judiciary in Bangadesh, a country that is typically ranked among the more corrupt in the world by independent observers such as Transparency  International, an NGO.

    Mr Yunus has long had an uneasy relationship with Bangladesh's prime minister, Sheikh Hasina, who is said to resent his Nobel prize—especially since he briefly considered starting a rival political party during a period of military rule a few years ago. As the prime minister has consolidated her power since the return to civilian rule, dealing with Mr Yunus has risen to the top of her to do list.

    Since the campaign to remove Mr Yunus turned serious late last year, Bangladesh's government has been lobbied by everyone from the American government to Mary Robinson and her group of eminent Friends of Grameen. Assuming the court also rejected an appeal by a majority of Grameen's board against the dismissal, a verdict due tomorrow, the question will shift from whether Mr Yunus's job can be saved to whether the bank for the poor that he created will henceforth be susceptible to unwelcome meddling by Bangladesh's government.

  • Japanese business confidence

    Before and after

    Apr 4th 2011, 15:36 by H.T. | TOKYO

    Japan gets all the bad luck these days. Just as economic conditions were finally improving—at least for big business—after the long post-Lehman slump, the March 11th earthquake, tsunami and nuclear power-plant crisis has knocked them for six again. This is clear from an extraordinary release from the Bank of Japan on April 4th which compares results of the Tankan business-conditions survey for which responses were supposed to be submitted by March 11th.  Using submissions from before and after that fateful day, it shows just how dramatically business confidence has worsened.

    For example: in the manufacturing sector, the diffusion index for large firms who sent back responses before March 11th was seven, and its forecast was three (a positive reading means optimists outnumber pessimists). Those responding after the earthquake put current conditions at six, but their forecasts had fallen to minus-two. Medium-sized and small enterprises, which make up the bulk of those in the stricken Tohoku region, were less confident about the future than the bigger ones even before the earthquake. But since, small manufacturing firms, whose judgment of actual conditions was minus-six on the index, now have a forecast of minus-18.

    This is hardly surprising. Companies face a looming energy crisis, with planned black-outs that may last into next years, as well as the devastation of parts of Tohoku, which Barclays Capital estimates affects 6-7% of Japanese GDP. On top of that is the spectre of radiation, which is making it difficult for exporters to ship goods abroad because of exaggerated fears in foreign ports, as well as putting off many foreigners from doing business in Japan. Add to this the danger of jishuku, the Japanese notion of self-restraint, which is leading to the cancellation of everything from hanami (cherry-blossom viewing parties) to baseball games, and you have dashed consumer confidence overlaid on waning business confidence.

    Time, then, for the government to get out in front of its own people, and tell them to spend, and to get out in front of foreigners, and tell them that they shouldn't panic. As for companies, the surprise is, they are not more pessimistic. Let's hope that's the positive side of jishuku.

  • German politics

    Bowing to the inevitable

    Apr 4th 2011, 13:19 by B.U. | BERLIN

    A MONTH ago the most popular member of Angela Merkel’s cabinet, Karl-Theodor zu Guttenberg, resigned as defence minister after a plagiarism scandal. Yesterday the least popular minister, Guido Westerwelle, said he would give up the chairmanship of the Free Democratic Party (FDP), a junior member of Mrs Merkel's governing coalition, in May after having led the party to a series of electoral flops. Today he added that he would step down as vice-chancellor if his FDP successor is a member of the government. He hopes to remain foreign minister.

    The shake-up in the FDP will have unforeseeable consequences for Mrs Merkel’s coalition, which is led by her Christian Democratic Union (CDU) and includes its Bavarian sibling, the Christian Social Union. These will depend on who follows Mr Westerwelle as chairman and on what direction the party now takes.

    In his resignation statement Mr Westerwelle spoke of a “generation change”. He is in effect passing the mantle to a trio of young party leaders. The most seasoned of the group is Philipp Rösler, the 38-year-old health minister. He is flanked by Christian Lindner, the FDP’s 32-year-old general secretary, and by Daniel Bahr, 34, Mr Rösler’s deputy as health minister and head of the party in North Rhine-Westphalia, Germany’s most populous state.

    The three are of like mind. In January they co-authored a newspaper article urging the party to shed its reputation as a tool of rich voters interested only in tax cuts (politely ignoring Mr Westerwelle’s role in creating this image). They called for a broader conception of the party’s traditional liberalism, reintroducing civil liberties and social freedom into the pro-market mix.

    It is not clear to what extent either the trio or its ideas will prevail. Mr Rösler, who was born in Vietnam and adopted by German parents, may, at a stretch, be senior enough to take over the party and become Mrs Merkel’s number two. But neither Mr Lindner nor Mr Bahr, although possible party chairmen, are, yet, vice-chancellor material. Mr Lindner, one of the party’s cleverest leaders, is in charge of rewriting the FDP’s programme to bring about the hoped-for philosophical and political renewal.

    There is some talk that Mr Rösler, if he moves up, could replace Rainer Brüderle, another FDP man, as Germany's economy minister. That job is a more promising political platform than the health portfolio, which swarms with special-interest groups and makes unpopular demands of patients. Mr Bahr could then become health minister.

    But Mr Brüderle will surely resist. He laid down a marker with an article of his own today, calling for a return to “liberal bread-and-butter issues”: markets, competition and the regulatory order that make them possible. “One of the biggest economies in the world can’t react with its gut” to events such as the nuclear catastrophe in Japan, he wrote. That was a slap at Mr Lindner, who had called for making permanent the temporary shutdown of seven nuclear plants ordered by Mrs Merkel following the Japan disaster. The old guard is not finished yet.

    Mr Westerwelle’s fate as foreign minister is still undecided. His decision to abstain in the UN Security Council vote authorising military action against Libya, which isolated Germany from its closest allies, seemed to confirm his awkwardness as a diplomat. “Not good enough for the party but good enough for Germany?” asked a newspaper columnist today, who wondered why he should remain in his ministerial post. But the FDP has no obvious candidate to replace him.

    Voters had expected the FDP to bring economic heft to Mrs Merkel’s government. Instead, Mr Westerwelle shrilly demanded tax cuts and denounced lazy welfare beneficiaries. In state elections last month voters evicted the party from the parliaments of Saxony-Anhalt and Rhineland-Palatinate; in Baden-Württemberg it lost its role in government and barely scraped back into the legislature. Mr Westerwelle has now taken the fall. Mrs Merkel can do little but wait to see what sort of coalition partner emerges from the debacle.

  • Spanish politics

    Adiós, Zapatero

    Apr 3rd 2011, 18:11 by G.T. | MADRID

    SPAIN'S Socialist prime minister, José Luis Rodríguez Zapatero, has ended months of speculation by announcing that he will not stand for a third term at a general election expected early next year.

    When Mr Zapatero took office in 2004, Spain's economy was booming. But as it has sagged, his popularity has sunk: a poll in today's El País gives him the worst personal rating of a Spanish prime minister in recent history. A toxic combination of an outdated economic model, a burst housing bubble and the global credit crunch has left investors wary and a fifth of the Spanish workforce unemployed.

    The problems were initially accentuated by Mr Zapatero's sluggish response. He is now an enthusiastic proponent of austerity and reform but this has lost him voters and was unlikely to produce sufficient growth, or jobs, to win him new ones by next spring. Time, then, for a dignified exit.

    Attention is turning to the question of who will replace him to do battle with the opposition centre-right People's Party, which enjoys a large lead in opinion polls. The Socialist Party will probably hold primary elections to find a new leader after local elections on May 22; the strongest candidate is Alfredo Pérez Rubalcaba, the hyperactive deputy prime minister, interior minister and government spokesman.

    The interior ministry, with the opportunities it presents ministers to display their crime-fighting and terrorist-catching credentials, can be a good spot from which to woo Spanish voters. Today's El País poll shows that Socialist voters see Mr Rubalcaba as a safer electoral bet than the other leading candidates, Carme Chacón, the defence minister, and José Bono, president of the parliament.

    The 59-year-old Mr Rubalcaba is a wily and enthusiastic politician, but his track record is patchy. In 2000 he backed Mr Bono over Mr Zapatero when they fought for the party leadership. The People's Party has begun searching for scandals implicating him from the messy world of the fight against ETA, the armed Basque separatist group, including alleged attempts to prevent the police arresting militants during a ceasefire in 2006.

    Ms Chacón presents a fresher, more sympathetic face. The 40-year-old spent nine months running the housing ministry without capturing the imagination of Spaniards. But her ratings soared after she barked a stand-to-attention order to a parade ground of uniformed men after becoming defence minister in 2008. She is the most popular member of the government among voters.

    In policy terms there is little between the pair, although voters might see the Real Madrid-supporting Mr Rubalcaba as more of a centralising figure than Ms Chacón, a Catalan.

    Mr Zapatero's announcement has reinvigorated Spanish politics, but it is tricky to guess what the consequences will be for his party. Its biggest challenge over the next year is likely to be convincing disillusioned Socialist voters to turn out at election time.

    The Socialists may also find it difficult to unbundle themselves from their outgoing leader: at previous elections they have made great play of his “ZP” brand. If they are canny, however, the party's leaders may be able to turn this to their advantage. As they begin to look back on his political career, some traditional Socialist voters might remember things Mr Zapatero did that they liked—such as pulling troops out of Iraq, introducing gay marriage and promoting women's rights—and return to the polling stations to pay him final homage.

    The timing of Mr Zapatero's announcement is a response to party demands that he fall on his sword before May's elections for 13 of Spain's 17 regional parliaments and all of its town halls. A huge and varied array of local factors will affect the results, which will make it hard to work out the impact of his decision. 

    More than anything, Mr Zapatero's announcement removes an excuse from those members of his party who have quietly been blaming him for their poor polling. Overt criticism of their leader has, in any case, been negligible. The party shares the blame for the unpopularity of his policies. That, of course, also goes for Mr Rubalcaba and Ms Chacón.

    Photo credit: AFP

  • The week ahead

    Pulling Libya apart

    Apr 1st 2011, 15:11 by The Economist online

    A round-up of what will be in the news during the coming week

    Monday 4th

    Ratan Tata and Anil Ambani, two of India's most famous businessmen, are due to appear before a parliamentary committe examining a scandal over telecom licenses.

    Tuesday 5th

    Barack Obama and Shimon Peres, Israel's president, meet in Washington.

    Wednesday 6th

    Silvio Berlusconi goes on trial for allegedly paying an underage woman for sex and abusing his office.

    Thursday 7th

    The World Health Organisation proclaims this to be World Health Day.

    Saturday 9th

    Nigeria holds presidential elections.

    Sunday 10th

    Peru holds presidential elections.

  • Letters from our readers

    On nuclear power

    Apr 1st 2011, 11:45 by M.D. | London

    As the crisis at Japan’s Fukushima nuclear plant continues (see our article in this week’s issue), readers have been sending in their thoughts on the future of nuclear energy. Responding to our briefing, Rob van Riet, who works at the World Future Council in London, calls attention to research conducted by the International Atomic Energy Agency (IAEA), which “reveals that 20% of the world’s 442 working nuclear-power stations are in areas of ‘significant’ seismic activity”. Mr van Riet thinks that “this is an unacceptable gamble”:

    “Although I personally believe nuclear energy should be phased out entirely from the world’s energy infrastructure for a number of reasons, I propose we start doing it in the areas most prone to natural disasters. That would be a lesson well learnt.”

    Our briefing also compared the safety record of nuclear power to the airline industry. Both are significantly better than their direct competitors, but when they fail they fail spectacularly. Frank Lowther, from Los Angeles, extends the comparison:

    “The airlines have one advantage that nuclear power lacks: there is no plausible alternative. When someone wants to travel from, say, New York to Sydney, flying is the only option. With the highly limited exception of large navy vessels, nuclear power has no such captive market. As such, its future can and will be in jeopardy every time a disaster strikes, even when those occurrences are a quarter-century apart.”

    Another of our articles remarked that “there is a trustworthy and transparent regulation, a clear distinction between operators and regulators and well enforced building codes” in the Western nuclear industry. But this statement reminded Hisao Tateishi, who lives in Tokyo, of assertions made about the financial industry in the West before the Lehman crisis:

    “What happened then was the contamination of the financial markets on a global scale by financial companies. It took an earthquake and tsunami to cause a disaster at Fukushima. How many Western nuclear reactors could withstand an impact like that? What about Three Mile Island and Chernobyl?”

    But Dale Fisher, who writes from Calgary, points out that,

    “At Three Mile Island the safeguards caught the breakdown and the reactor was safely shut down with no loss of human life. It was not so fortunate at Chernobyl. That was a serious and ongoing tragedy. The Russians, however, were never licensed by the IAEA for nuclear reactors. Not having sanction and not having built the required safety requirements did not stop them from initiating the Chernobyl reactor. The results speak for themselves. 

    Chernobyl should not be used as a reason for halting all nuclear reactors. Chernobyl should never have been permitted to operate.”

    Meanwhile, Adam Woodman from Canberra, read our recent leader on reducing the size of the state, which he thinks is bad timing for Japan right now. Mr Woodman believes that,

    “The Japanese people are probably glad that the army and firefighters, all employees of the state, are helping with the nuclear emergency. Tokyo Electric Power Company, a private company, was unable to cope without state help. It would certainly be bankrupt from paying for the emergency work and fighting lawsuits from those seeking compensation for health or financial difficulties caused by this crisis.” 

  • Syria

    Not backing down

    Mar 30th 2011, 21:59 by The Economist online | DAMASCUS

    DAMASCUS is a bemused and, in many quarters, angry city this evening. Two weeks of unprecedented protests forced President Bashar Assad to face the nation today. His much-delayed speech had been touted by officials, who predicted moves “beyond expectations” to quell the unrest. Indeed, even critics in Damascus had expected Mr Assad to announce the end to a draconian emergency law in place since 1963, along with reforms that would allow political parties to challenge the dominance of the Ba'ath party regime.

    But in a rambling speech, made amid the undignified spectacle of sycophantic interruptions by members of parliament, Mr Assad snubbed the protesters who had originally demanded only economic and political reforms, rather than his ouster. Instead he mimicked the region's other strongmen, blaming the recent unrest on foreign "conspirators" and enemies working to undermine the country's stability. Mr Assad said he recognised that not everyone who went to the streets was part of the conspiracy, but he blamed the demonstrations on provocateurs. Notably absent from his speech were any condolences for the families of those killed during the protests.

    While acknowledging the need for reforms, Mr Assad made no concrete offers and laid out no timetable. With his previous concessions accurately denounced as rehashes of old promises, Mr Assad tried to excuse ten years of slow progress by citing the September 11th attacks, the wars in Afghanistan and Iraq, and a drought. But the main takeaway from the president's speech was that he would not be forced into conceding anything.

    This is a risky strategy for Mr Assad, who is held up as a reformer by his domestic supporters. They, in turn, blame the delays in reform on the people around the president. But today Mr Assad sent a different message, offering little in the way of change, but stoking the fear of what might replace him. Whether this provokes the protesters or deters them will be seen after prayers on Friday. In an ominous sign for the president, new protests have already been reported in Deraa and Latakia.

    (Photo credit: AFP)

  • Letters from our readers

    On public-sector cuts

    Mar 29th 2011, 14:48 by M.D. | London

    What with the recent protests by unions in Wisconsin, a huge demonstration in central London and Portugal on the verge of a bail-out, public-sector cuts are very much in the news in America, Britain and continental Europe. Our readers have piled into the debate. Responding to our special report on the future of the state, Jonathan Brooke, a teacher from Hertford, thinks that “almost every article you publish about education stresses the need to sack bad teachers”. But, he asks,

    “Have any of your editors or writers ever been to a real school? I waited three years for someone to put a projector in my teaching room so I could use PowerPoint. There is no money in the budget to equip a class with laptop computers. Despite your admirable devotion to the market you seem unwilling to engage with the brute fact that private schools give us an accurate market price for a good education and it is a price somewhat higher than that which the taxpayer is willing to bear.” 

    Glen Matthews is an economics professor at a community college in Lakewood, Colorado, who believes that we never acknowledge that “the performance of schools reflects the communities where they are based”. He goes on,

    “You don’t blame the police for crime in the streets nor do you blame doctors for poor health in a community. So why do you blame teachers for bad students? Until your newspaper has the courage to address failing homes and communities and the lack of value placed on education then none of the proposed measures will have a tangible impact.”

    Writing from Frankfurt, Mark Schieritz, a journalist at Die Zeit, enjoyed reading our special report on the state. Yet he is curious as to,

    “Why you are bringing up the issue now? After all your chart  shows that government spending as a percentage of GDP in the West more or less stagnated since 1980 and only started to rise when the financial crisis struck and private banks needed to be bailed out. I am not aware of many economic indicators which show such a degree of stability. Probably the image of the ever-increasing Leviathan has more relation to ideology than to reality?”

    Finally, our article on the 100th anniversary of the fire at the Triangle Shirtwaist worskshop in New York, which killed 146 workers and became a catalyst for the ideas that spurred the New Deal, drew a parallel with collective-bargaining rights for unions. Scott Wood, of Shelbyville, Tennessee, says of more relevance,

    “Is the quick destruction of the unions if governments cannot negotiate balanced budgets without taxing their citizens into poverty. Although collective bargaining is not the only reason for the governments’ woes, it has been a factor.  The destruction from unbalanced budgets will be much more rapid and heartbreaking than the Triangle Shirtwaist fire.”

  • Syria's unrest

    A bloody mess

    Mar 28th 2011, 19:53 by The Economist online | DAMASCUS

    THE situation in Syria is becoming increasingly messy. This weekend the unrest shaking the southern city of Deraa spread to Latakia, a port in the north. The sunny metropolis, dotted with palm trees, is the heartland of president Bashar Assad's Alawite sect. Most of its inhabitants, however, are Sunni mixed in with a few are Christians. Security forces in other parts of the country have been shooting at civilians for the past ten days. Protesters in Latakia say people there have been shot at and attacked by gunmen and thugs. A journalist allowed into the city on Sunday night reported rampaging by armed hardmen.

    For once, this seems to tally with the government's account of the protests; it released a statement saying that gangs were responsible for the violence. But this may be misleading. Some say they have been sent onto the streets by the government or the ruling family itself. Quite who these gangs are, and who they are loyal to, no one is sure. But at least some of the troublemakers are believed to belong to the Shabiha, a notorious group of Alawite ruffians and smugglers, most of whom are members of the extended Assad family. Residents of Latakia barely dare to whisper the name. Many Syrians believe the Shabiha have been told to stir up trouble. Almost all, including many Alawites, dislike them. But their attacks are stirring up deep-seated Syrian fears of sectarian strife, and the government is playing on this.

    This has sparked further questions about who is co-ordinating the regime's violent response to the protests. Many do not believe it is the president. Mr Assad has cracked down on the Shabiha before. In the 1990s, while being groomed for power, he pulled many of them into line, curbing their tendency to tramp around the city extorting money. Instead, many believe they currently answer to Mr Assad's younger brother, Maher, head of the 4th division, part of the Syrian elite forces. But while rumours of internecine splits are rife in Damascus, there is a strong feeling that Bashar remains the best chance of the regime's survival. Elite, metropolitan and foreign-educated, regime insiders may not see him as tough, but he has the most public appeal.

    The size of the protests outside Deraa and Latakia remains hard to gauge. Various demonstrations elsewhere have been broken up quickly, vanishing almost as soon as they begin. State propaganda largely dominates the airwaves. State workers are forced onto the streets for pro-Assad rallies. Many of those not protesting are undoubtedly unhappy, but there are others who, through fear, apathy or affection for the president, want him to stay.

    As reports of more shootings in Deraa and Latakia emerge, the government continues merely to hint at reform. On Sunday, an official announced that the draconian emergency law would be repealed. Today another promised that Mr Assad would address the nation, soon. But no deadlines have been set and many wonder whether change is really on the way.

  • Turkey and its region

    Does Erdoğan have a plan?

    Mar 28th 2011, 14:16 by A.Z. | ISTANBUL

    TURKEY'S mildly Islamist prime minister, Recep Tayyip Erdoğan, thinks he can take credit for the wave of protests sweeping the Arab world. “Which country were they inspired by?” he asked the Turkish parliament recently. He answered his own question: Turkey, with its “advanced democracy”. The country's mix of secularism, free elections and European Union-tailored reforms has certainly raised its profile in its former Ottoman dominions. (Mr Erdoğan’s salvoes against Israel have gone down well too.) The prime minister was among the first world leaders to tell Egypt’s president, Hosni Mubarak, to step down.

    So why has Turkey been so reluctant to back western efforts to stop Libya’s dictator, Muammar Qaddafi, from slaughtering his own people? The question has been burning in western capitals ever since Turkey balked at plans to erect a no-fly zone to protect Libyan civilians.

    When the uprising in Libya erupted last month, Mr Erdoğan swiftly opposed any foreign intervention. He described the idea of NATO intervention as "absurd". He called on Colonel Qaddafi to resign but mistrusted Western motives, suggesting that Europeans and Americans were more interested in guzzling Libyan oil than saving Libyan lives. Their "real plan", whispered conspiratorially minded members of his ruling Justice and Development (AK) party, was nothing less than an “imperial carve-up” of the country.

    So it came as something of a shock last week when Turkey declared that it would provide four frigates, one submarine and an extra warship to help enforce the no-fly zone and prevent the flow of weapons to Libya. The government has put a brave face on this U-turn, insisting that it had only moved when the military operation was taken out of French hands and placed under the command of NATO, where Turkey, a key member, wields veto power.

    The line is disingenuous, as other coalition members, such as Italy, had also been demanding that NATO take the lead. It seems more likely that Turkey feared being left out altogether, as it had been from the conference in Paris where the decision to attack Colonel Qaddafi's forces was agreed. Moroever, the Arab League had already voted on March 12th to support a no-fly zone, thereby giving “Muslim cover” to the operation. Above all, American arm-twisting is said to have won the day.

    Libya has thrown AK’s much-vaunted Middle East policy into disarray and further strained ties with America and the EU. As Semih Idiz, a columnist for the daily Milliyet, observes [link in Turkish], AK’s approach has been based on friendly relations with existing leaders, no matter how brutish. And although Turkey was quick to scent Mr Mubarak’s defeat, Colonel Qaddafi's future is less clear. Mr Erdoğan warns of a protracted and bloody civil war that could make Libya "a second Iraq." He has suggested that Colonel Qaddafi could yet be involved in a peaceful transition of power, which Turkey could help mediate.

    Turkey’s attempts to sit on the fence may be partly explained by self-interest. Some 20,000 Turkish citizens worked in in Libya (they are now mostly repatriated). The country has around $15 billion worth of outstanding contracts which may be scrapped if the rebels prevail.

    Yet an even bigger challenge is being posed by neighbouring Syria, where nationwide protests have left scores of civilians dead. Mr Erdoğan is a big friend to Syria’s strongman leader, Bashar Assad, and has urged him to ease his iron grip. Should the violence spread to Syria’s Kurdish-dominated north, thousands might cross the border into Turkey, already home to 14m or so restive Kurds. Mr Erdoğan’s pious base have been incensed by the slaughter of their fellow Sunni Muslims at the hands of Mr Assad’s forces. When it comes to Syria, sitting on the fence may not be an option.

  • Germany's regional elections

    Angela's trauma

    Mar 28th 2011, 9:19 by B.U. | BERLIN

    "POWER Shift in German Regional Election" sounds like the headline for a yawn-inducing story a reader can safely ignore. Not in this case. Two western states voted yesterday. The results in wine-producing Rhineland-Palatinate were interesting but unremarkable. But those in Baden-Württemberg, an industrial powerhouse, were sensational. The Christian Democratic Union (CDU), the party of the German chancellor, Angela Merkel, lost power in the state after occupying office for 58 years. The Greens will take its place, the first time the party has run a German state. The outcome will traumatise Mrs Merkel’s coalition in Berlin.

    Until Japan’s nuclear catastrophe, Baden-Württemberg’s ruling coalition, a partnership between the CDU and the Free Democrats (FDP), looked like it was headed for a narrow victory. The state’s conservative premier, Stefan Mappus, is not the most likeable politician in Germany. But voters enjoy Baden-Württemberg’s fast economic growth and low unemployment (the lowest youth unemployment rate in Europe, Mr Mappus often boasted). Why tinker with that?

    Mr Mappus, however, happens to be the CDU’s leading cheerleader for nuclear power. Japan’s nuclear mishaps created a wave of fear in Germany that swept his government away. The CDU remains the biggest party in Baden-Württemberg, with 39% of the vote, a drop of five percentage points from the last election in 2006. The FDP’s vote fell by half, to just above 5%.

    It was the anti-nuclear surge that lifted the Greens into power. The party's share of the vote doubled to 24%. Voter participation jumped, from 53% in 2006 to 66%. The Greens apparently captured the lion’s share of the new voters. Nearly half Baden-Württemberg’s voters said that energy was the most important election issue. Among Green voters, it was the top issue for 85%.

    In the wake of the Japanese disaster Mrs Merkel had tried to avert disaster by shutting down seven nuclear plants and suspending an unpopular decision, made last autumn, to let nuclear facilities operate for 12 extra years to reduce the cost of shifting to renewable sources of energy. But voters saw this as the blatant political ploy it was, especially after the FDP economy minister, Rainer Brüderle, was quoted as having said exactly that behind closed doors (he denies making the remarks). The ruse did not save Mr Mappus.

    The losses were the freakish effects of fallout blown in from Japan, proclaimed CDU and FDP spin doctors. In Rhineland-Palatinate, the CDU actually managed to increase its share of the vote slightly, although not by enough to topple Kurt Beck of the Social Democratic Party (SPD). But the line is unconvincing. For one thing, Mrs Merkel’s handling of the nuclear crisis is as much an issue as the crisis itself, especially after the leaking of Mr Brüderle’s reported remarks. The CDU’s modest upturn in Rhineland-Palatinate only slightly lessens the shock of losing power in the party’s heartland.

    For the FDP the results are a disaster. The party barely met the 5% threshold for entering the legislature in Baden-Württemberg. In Rhineland-Palatinate it was evicted. Much of the blame will fall on Guido Westerwelle, the party’s chairman and Germany’s foreign minister. In opposition he was an effective blunderbuss but he has struggled to become a statesman since taking office after the federal elections in 2009.

    Foreign ministers are usually among Germany’s most popular politicians; Mr Westerwelle is among the least. He may be ousted as the FDP’s leader, by the party’s convention in May if not before. The FDP’s trauma will further unsettle Mrs Merkel's “Christian-liberal” coalition, which has so far failed to find the clear sense of purpose that voters had expected from an alliance of like-minded partners. There is little immediate threat to Mrs Merkel’s hold on power, in part because the CDU has no leaders with the stature to challenge her. But she must now finally explain to voters what her government is for.

    Yesterday was sobering for other parties as well. In Rhineland-Palatinate the SPD’s share of the vote plunged from 46% to 36%. Mr Beck will continue to govern, but in a coalition with the triumphant Greens rather than with an absolute majority. In Baden-Württemberg the SPD achieved its goal of toppling Mr Mappus but its 23% share of the vote was its lowest yet in the state (ironically it will now probably enter government as the Greens' junior coalition partner).

    The ex-communist Left Party, which is strong in eastern Germany and had been making inroads in the west, failed to enter either state parliament. Its western ascent has, for now, been stopped. Only the Greens, the progeny of youthful protest that once styled themselves an “anti-party party”, have anything to celebrate.

    Baden-Württemberg’s incoming Green premier, Winfried Kretschmann, is an avuncular pragmatist well suited to the state’s conservative temperament. A former schoolteacher (of chemistry, biology and ethics), he is a pillar of the Catholic church. A leader of the Greens' "realist" wing, he cares as much about fiscal discipline as he does about renewable energy. He now has a chance to prove to Germany that greenery need not be the enemy of growth, innovation and employment. If he fails, the Greens’ triumph in Baden-Württemberg will turn out to have been a radiation-related fluke.

About Newsbook

In this blog, our correspondents respond to breaking news stories and provide comment and analysis. The blog takes its name from newsbooks, the 16th-century precursors to newspapers, which covered a single big story, such as a battle, a disaster or a sensational trial

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