Alistair Darling row: Gordon Brown presents united front on economy
Alistair Darling row: Gordon Brown presents united front on economy
PM brushes off speculation about future of chancellor.
Gordon Brown today brushed off speculation about the future of the chancellor, Alistair Darling, following his warning that the economy was facing possibly the worst downturn in 60 years.
The prime minister insisted that ministers were “getting on with the business of government”.
Brown sought to allay concerns as the City reacted negatively to comments made by Darling in a Guardian article in which he said Britain’s economic circumstances were “arguably the worst they’ve been in 60 years … And I think it’s going to be more profound and long-lasting than people thought.”
Darling’s comments were seen to be at odds with Brown’s claims that Britain is well-placed to face the economic downturn.
The chancellor later sought to clarify his remarks by stressing that the downturn was a worldwide phenomenon.
Brown sought to present a united front as Darling’s remarks threatened to overshadow his autumn economic relaunch, which will start tomorrow with an announcement about housing.
Speaking in Brussels, where he is attending the EU emergency summit on Georgia, Brown emphasised that the current economic difficulties were due to the “unique circumstances” of the trebling of world oil prices combined with the international credit crunch. He told reporters: “We are getting on with the business of government.”
Brown added: “We are showing that, unlike previous governments that could not manage a way through these difficulties successfully, that we are resilient in the way that we deal with these problems,” he said.
“I think that you will find that the actions that we have taken and the actions that we are taking are actions that are designed to help the British people get through what is a difficult world economic downturn.”
Earlier today, the prime minister’s spokesman insisted that it “goes without saying” that Brown has “full confidence” in his chancellor.
Following Darling’s comments, which were published on Saturday, the pound hit a record low against the euro when markets opened this morning. The FTSE 100 index also fell steadily today and was almost 1% lower by mid-afternoon.
To add to the government’s difficulties, figures published this morning showed the number of new mortgages being issued down 71% since July last year.
David Cameron described Darling’s remarks over the weekend as “extraordinary”.
The Tory leader told BBC Radio 4 Today programme earlier today: “I think it’s extraordinary that the chancellor said it, because – remember – a chancellor of the exchequer has got to think not only ‘I must tell the truth at all times’ but also ‘I must use my words carefully, so that I don’t actually create a situation that’s even worse, that creates a crisis of confidence’.”
This morning some analysts were claiming that Darling’s comments were responsible for the fall in the value of sterling. “Most people believed that things were probably deteriorating faster in the UK than the government was admitting, but the fact that we’ve seen the chancellor come out and admit that things are far worse have put sterling under pressure,” said Ian Stannard, a senior currency strategist at BNP Paribas.
Darling’s frank remarks about the state of the economy, contrasting with the prime minister’s mild language, have prompted Tory claims that the government is “dysfunctional”.
Downing Street and the Treasury have insisted that there is no tension between Brown and Darling, claiming they are focused on measures to help people struggling with the downturn. But today’s Times reports that Brown is planning a cabinet reshuffle – contradicting what Darling said in his Guardian interview. The paper also refers to speculation that Darling could be one of those moved.
The controversy comes at a damaging time, because the government is about to make a series of economic-recovery announcements that ministers hope will restore Labour’s fortunes. Some Labour MPs believe the measures represent Brown’s “last chance”, and that if they don’t help to lift the party’s standing in the polls he should be replaced as prime minister.
The first initiative will be announced tomorrow, when the government unveils plans to help millions of less well-off people gain – or at least not lose – a place on the housing ladder. This is likely to include a “shared equity” plan in which local authorities and housing associations help borrowers in return for a stake in their homes. Next week ministers will unveil plans to help people with rising fuel bills when the first cabinet of the new season will be held in Birmingham. This is expected to include measures to improve energy efficiency.
In a speech to the CBI on Thursday, Brown will underline the depth of the global economic problems, which demand a global response. “The credit crunch has shown that while we now have a global economy that is more integrated than ever before, from which no national economy is insulated, we do not have adequate means of managing it other than as nations or regional entities,” he will say.
But Brown will say that Britain is well-placed to weather the downturn: “In the next 20 years the world economy will double in its size and wealth and we have a great opportunity to win new business, new jobs and prosperity for Britain.”
Looking ahead to the expected announcements on housing and fuel, the PM’s spokesman said: “The way that the prime minister would characterise these announcements is that, clearly, we are facing a challenging international economic situation at the moment that is affecting the UK just as it is affecting other countries.
“We need to continue to work with our international partners to deal with the international issues around the credit crunch, global food prices and global commodity prices.
“But we also need to continue to look at what more we can do in order to help people in this country directly affected by these global challenges.
“We have already taken action in relation to housing and the mortgage market. We have already taken action in relation to helping people with their fuel bills. As the prime minister and other ministers have been saying in recent weeks, we want to continue to see what more we can do to help those affected.” The Guardian
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US election: Clinton and Biden rouse Democrats in call for unity
US election: Clinton and Biden rouse Democrats in call for unity. Democrats overcame bruised egos and a rancorous primary campaign tonight to line up solidly behind Barack Obama.
Democrats overcame bruised egos and a rancorous primary campaign tonight to line up solidly behind Barack Obama as their party’s official presidential nominee and open up a coordinated and devastating attack against the Republican, John McCain.
Hours after Hillary Clinton led Democrats in making Obama the official nominee, Joe Biden used his debut performance as the vice-presidential candidate to establish his bona fides as the Democrats’ attack dog.
The full frontal assault on McCain’s main strength as a candidate – his expertise on national security – was reinforced with a bravura speech from Bill Clinton intended to dispel any doubt that he was on board with Obama.
The former president thrilled convention attendees with what amounted to a whole-hearted endorsement of the man who beat his wife in a divisive primary contest.
“Barack Obama is ready to lead America and restore American leadership in the world: ready to preserve, protect and defend the constitution of the United States. Barack Obama is ready to be president of the United States,” Clinton said.
The triumphant night was capped by a surprise appearance by Barack Obama – his first at the convention – which brought down the house. “I think he has done pretty well so far, what do you think,” he said of Biden’s speech.
Then, in a sign that the Democratic healing is nearly complete, Obama added: “If I’m not mistaken Hillary Clinton rocked the house last night.”
It marked a distinct change in direction for the Democrats, who had earlier held back from attacks on McCain.
That changed with Biden. In a speech that roamed from childhood nostalgia to withering anger, Biden drew on his working-class roots as well as his reputation in the Senate as an authority on foreign policy to make a devastating critique of McCain’s judgment.
He opened by tying McCain directly to George Bush’s policies on the economy as well as foreign policy
“Now, despite being complicit in this catastrophic foreign policy, John McCain says Barack Obama isn’t ready to protect our national security,” he said. “Now, let me ask you, whose judgment should we trust? Should we trust John McCain?”
Like much of the convention, Biden’s speech was as much about biography as politics. His son, Beau, who is about to deploy to Iraq described how Biden lost his wife and daughter in a car accident soon after he was first elected to the Senate at the age of 29.
But the sentiment was deceptive.
Though a fixture in the Senate for a generation, and known in Washington for being verbose and prone to embarrassing gaffes, Biden, 65, did not let up in his attacks on McCain.
He accused McCain of being wrong about the Iraq war, the Afghan war, the rise of the Taliban in Pakistan. “John McCain was wrong. Barack Obama was right,” he said.
Biden’s attack on McCain was made more powerful by his own reputation as the Democrats’ authority on foreign affairs and his claims to be an old friend of McCain.
It was a similar tack to that adopted by John Kerry, the Democratic presidential candidate in 2004. Kerry’s speech was scathing of McCain, a man whom he briefly considered as a running mate during his own race for the White House.
“Who can we trust to keep America safe?” he asked the crowd. “Obama” they roared.
The stirring speeches crowned a day which saw the Democrats set aside the rivalries of their primary campaign to come together behind Obama.
He became the party’s official nominee in a vote of acclamation, proposed by Hillary Clinton.
The final steps of the Democratic healing process got underway mid-afternoon with a highly choreographed vote to affirm Obama as the party’s nominee.
At Hillary Clinton’s behest, the voting process was suspended to declare Obama the nominee by acclamation. The move came as a source of tremendous relief to Democrats, who had feared the continuation of combat between the Obama and Clinton camps could cost them the White House.
“I really thought things were going to get tense, but in the end it was all so emotional, holding hands and cheering and dancing to Love Train,” said Janay Smith, a lawyer from Alabama.
It fell to Bill Clinton to put that new found unity on even surer footing. In a rousing speech that repeatedly brought the crowd to their feet, Clinton went to great lengths to dispel the impression formed during the hard-fought primary campaign that he thought Obama was not ready for the White House.
He even went so far as to compare criticism of Obama as young and inexperienced to the charges that were levelled against him in 1992 when he ran for president.
“Everything I learned in my eight years as president and in the work I’ve done since, in America and across the globe, has convinced me that Barack Obama is the man for this job.”
Guardian.co.uk
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Iraq seeking 2011 troop pullout – International United States Irak
Iraq seeking 2011 troop pullout – International United States Irak
The Iraqi Prime Minister Nouri Maliki has spoken in detail about a deal to bring an end to the foreign combat troop presence in the country.
He said the agreement would lead to the withdrawal of the troops by 2011, but he added that no specific timetable had been agreed with the US.
A US state department spokesman has said there was no final deal and only a draft text had been agreed.
Any agreement will have to be approved by the Iraqi parliament and presidency.
The BBC’s Crispin Thorold in Baghdad says the Mr Maliki’s comments may say more about his political position than about the deal between the US and Iraq.
Our correspondent says Mr Maliki is under great pressure from Iraqis and from parliament to protect Iraqi sovereignty.
‘Fixed date’
Mr Maliki had told tribal leaders in Baghdad the two parties had agreed on a “fixed date, which is the end of 2011″.
He said no agreement would be signed that did not respect Iraqi sovereignty, Reuters reports.
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 Until we have a deal, we don’t have a deal  US state Department Spokesman Robert Wood
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“An open time limit is not acceptable in any security deal that governs the presence of the international forces,” he said.
He also said no foreigners would be given full legal immunity. The US has been trying to include immunity from prosecution in the Iraqi courts for its soldiers as part of the deal.
“We will not accept to put the lives of our sons on the line by guaranteeing absolute immunity for anybody, whether Iraqis or foreigners,” Mr Maliki said. “The sanctity of Iraqi blood should be respected.”
Deal awaits
US State Department spokesman Robert Wood told Reuters the negotiators had only agreed on a draft agreement.
“It still has to go through a number of levers in the Iraqi political system before we actually have an agreement from the Iraqi side,” he said. He added that US President George W Bush would also have to sign it off.
“Until we have a deal, we don’t have a deal,” he said.
On Friday, a senior Iraqi official said the draft security agreement included the withdrawal of US forces from all Iraqi urban areas by June 2009.
The 27-point agreement reportedly includes a compromise allowing US soldiers some immunity under Iraqi law.
There are currently around 147,000 US troops in Iraq. It is thought some US troops could remain beyond 2011 to train Iraqi security forces.
Our correspondent in Baghdad says the 2011 date has been discussed as “aspirational” by the Bush administration in past, but Mr Maliki’s comments are the strongest indication of the Iraqi wish to have all US troops out of the country by then. BBC NEWS
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Recession fears weaken sterling International Economy
The pound has hit its weakest levels against the dollar in more than two years, extending recent losses on fears about the health of the UK economy.
Sterling dropped as low as $1.8405 – its weakest since July 2006.
Sterling has fallen sharply this month. As recently as mid-July, one pound bought two dollars.
The pound’s losses gathered pace on Friday after news the economy stagnated in the second quarter, raising fears of a recession.
“The growth number confirmed our worst expectations,” said John Hydeskov, senior foreign exchange analyst at Danske bank in Copenhagen.
“We’ve seen that the fall in house prices in the UK seems to have no end. We cannot detect this bottom in house prices that everyone seems to be looking for,” he added.
The euro also fell against the dollar, trading at $1.4708 but above a six-month low of $1.4630 hit last week.
Deteriorating outlook
The US currency has benefited as the economic outlook has darkened in the UK and Europe.
Investment guru Warren Buffett said on Friday that he had no bets against the dollar – underscoring the currency’s strength.
The fall in sterling could help UK exporters whose goods will be cheaper overseas.
But it will hurt holidaymakers who have benefited from a strong pound when travelling to countries which use the dollar. Fuente BBC News
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Russia accused of abusing truce – Conflict Russia Gerogia – International News
The US and France have accused Russia of failing to comply with the terms of its ceasefire with Georgia by creating buffer zones and checkpoints.
Russia announced the full withdrawal of combat forces from Georgia proper on Friday but insisted hundreds of other troops could stay under the ceasefire.
France brokered the ceasefire to end fighting over Georgia’s pro-Russian breakaway province of South Ossetia.
Its terms are vague about the extent of any buffer zones, analysts say.
A White House spokesman, Gordon Johndroe, said the checkpoints and buffer zones set up by Russia were not part of the ceasefire agreement.
A spokesman for the French foreign ministry, Eric Chevalier, said a United Nations Security Council resolution was needed to clarify exactly what the ceasefire agreement covers.
The Russian military say they intend to maintain a peacekeeping presence in Georgia, controlling buffer zones around both South Ossetia and the other breakaway province, Abkhazia.
The zones include sections of the main highway from the capital Tbilisi to the Black Sea as well as Georgia’s main airbase at Senaki.
‘Clearly stated’
US President George W Bush and his French counterpart Nicolas Sarkozy agreed in a telephone conversation on Friday that Russia was “not in compliance [with the ceasefire] and that Russia needs to come into compliance now”, Mr Johndroe said.
We haven’t seen that yet. It’s my understanding that they have not completely withdrawn from areas considered undisputed territory, and they need to do that.”
“Compliance means compliance with that plan,” he added.
“Establishing checkpoints, buffer zones, are definitely not part of the agreement,” US state department spokesman Robert Wood added.
The French spokesman told the BBC that the ceasefire had stipulated that Russia’s forces “should go back to the situation before the hostilities started”.
“The idea is that, yes, for a temporary period some Russian peace forces could stay on… next to the [border] line of Ossetia but it’s temporary, it should be for patrolling and it should be until we have an international mechanism,” Mr Chevalier said.
“It was clearly stated that this presence first has to be through patrolling, no fixed presence and, second, should not have an effect on the freedom of movement on roads and trains in this place.”
The UN Security Council split this week over a resolution, with rival drafts submitted by Moscow, and the US and its allies.
AVISO PATROCINADO
BBC diplomatic correspondent Jonathan Marcus says Western diplomats fear that Moscow is determined to define the parameters of the interim security arrangements on its own terms.
Part of the problem, he adds, is the extraordinary vagueness of the EU-brokered ceasefire deal, which speaks only of “additional security measures” in “the immediate proximity of South Ossetia” – proximity being defined as a distance of “several kilometres”.
‘Zone of responsibility’
Moscow intends to maintain a peacekeeping presence of 2,500 troops in the buffer zones for the foreseeable future, backed by armoured cars and helicopters.
Russia’s so-called “zone of responsibility” also includes Georgia’s main airbase at Senaki, some 40km (25 miles) from the boundary with Abkhazia, which sits astride vital road and rail links to the Black Sea port of Poti.
BBC correspondents on the ground say they have seen what appears to be a significant Russian troop movement out of Georgia.
The BBC’s Gabriel Gatehouse in Igoeti – just 35km (21 miles) from the capital, Tbilisi – says he saw Russian troops leave the town, joining a column of hundreds of armoured vehicles on the road towards South Ossetia.
Our correspondent says buses of Georgian police are arriving in Igoeti to take control after Russian troops removed their roadblocks and pulled out.
But another correspondent in the nearby town of Korvaleti says Georgian police vehicles there are still being blocked at checkpoints.
Russia’s four-day war with Georgia began after Tbilisi tried to retake South Ossetia – which broke away in 1992 – in a surprise offensive on 7 August.
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OF THE BEST ANTI-VIRUS OF THE WORLD?
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