A Spanish Christmas
•Christmas Presents - Regalos Típicos
Spanish tradition has it that the Three Kings, los Reyes Magos, are the ones who on the morning of January 6th, el Día de Reyes, bear presents for all the children, repeating the ritual they performed after baby Jesus was born. Influenced by American films and TV shows, some families have decided to switch to Papá Noel on Christmas Day, arguing that this allows the kids more time to play with their toys.
Most Spanish people keep their fingers crossed for a Christmas windfall, courtesy of the world-renowned lottery draw, El Gordo, literally The Fat One. This is a long, drawn-out event that unfolds on the morning of December 22nd. Ticket numbers in a giant drum are matched to balls with millionaire prizes in a smaller drum. The ticketing system allows people to buy fractions and subfractions of different numbers, décimos and participaciones, with increasing chances of a share in the winnings.
As the top prizes come out, TV and radio coverage centres on the search for the many winners and for the particular lottery shop where the winning ticket was bought.
•Food and Drink - Comidas y Bebidas
Christmas sweets are the main seasonal staple. El turrón, nougat, is essential. This almond-based tablet traditionally comes in two versions, duro, hard, with whole almonds in a paste of sugar, honey and egg white, or blando, soft, where the ingredients are ground together.
Las figuras de mazapán, marzipan figurines, are also popular, together with los polvorones, soft crumbly cakes made with lard, flour and cinammon.
The main meal takes place on Christmas Eve, la Nochebuena, and consists of a major dish of meat or seafood, such as cordero, lamb, bacalao, cod, or marisco, shellfish, which varies according to the region or the family's preferences.
The 'lucky grapes', las uvas de la suerte, are the law on New Year's Eve, la Nochevieja - literally 'Old Night'. A tradition introduced in the early 20th century, it's said to bring good luck if at each stroke of the bells at midnight you take one grape and make one wish, un deseo, for the New Year, el Año Nuevo.
•Quirky Customs - Curiosidades
Celebrations stretch from December 22nd, when the big lottery draw takes place, to January 6th, when the presents are unwrapped. Then, between Christmas Eve and New Year's Eve, there's still time to fit in another celebration. The equivalent of April's Fools Day takes place in Spain on December 28th, el día de los Santos Inocentes, Holy Innocents' day.
Nativity scenes with figurines are laid out on a table at home, with no limit to their degree of elaboration. Life-size figures are also on display in public squares and there are silent, living representations in public halls.
But in Cataluña there's a surprising addition to the crib: el caganer, which means, for want of a more offensive translation, the defecating shepherd. What's more, this scatological streak extends to a peculiarly-shaped local cake, la tifa, with sugar flies to top it all off!
martes, 1 de diciembre de 2009
PROFILES
NELSON MANDELA
Mandela led the struggle to replace the apartheid regime of South Africa with a multi-racial democracy. He was imprisoned for 27 years and went on to become his country's first black president.
Rolihlahla Mandela was born in Transkei, South Africa on 18 July 1918 and was given the name of Nelson by one of his teachers. His father Henry was a respected advisor to the Thembu royal family.
Mandela was educated at the University of Fort Hare and later at the University of Witwatersrand, qualifying in law in 1942. He became increasingly involved with the African National Congress (ANC), a multi-racial nationalist movement trying to bring about political change in South Africa.
In 1948, the National Party came to power and began to implement a policy of 'apartheid', or forced segregation on the basis of race. The ANC staged a campaign of passive resistance against apartheid laws. In 1952, Mandela became one of the ANC's deputy presidents. By the late 1950s, faced with increasing government discrimination, Mandela, his friend Oliver Tambo, and others began to move the ANC in a more radical direction. Mandela was tried for treason in 1956, but acquitted after a five-year trial.
In March 1960, sixty-nine black anti-apartheid demonstrators were killed by police at Sharpeville. The government declared a state of emergency and banned the ANC. In response, the organisation abandoned its policy of non-violence and Mandela helped establish the ANC's military wing 'Umkhonto we Sizwe' or 'The Spear of the Nation'. He was appointed its commander-in-chief and travelled abroad to receive military training and to find support for the ANC.
On his return he was arrested and sentenced to five years in prison. In 1963, Mandela and other ANC leaders were tried for plotting to overthrow the government by violence. The following year Mandela was sentenced to life imprisonment. He was held in Robben Island prison, off the coast of Cape Town, and later in Pollsmoor Prison on the mainland. During his years in prison he became an international symbol of resistance to apartheid.
In 1990, the South African government responded to internal and international pressure and released Mandela, at the same time lifting the ban against the ANC. In 1991 Mandela became the ANC's leader.
He was awarded the Nobel Peace Prize together with FW de Klerk, then president of South Africa, in 1993. The following year South Africa held its first multi-racial election and Mandela was elected its first black president. In 1998, he was married for the third time to Graça Machel, the widow of the president of Mozambique. Mandela's second wife, Winnie, whom he married in 1958 and divorced in 1996, remains a controversial anti-apartheid activist. In 1997 he stepped down as ANC leader and in 1999 his presidency of South Africa came to an end.
Mandela continues to support a variety of causes, particularly the fight against HIV-Aids. In 2004, Mandela announced he would be retiring from public life and his public appearances have become less and less frequent. On 29 August 2007, a permanent statue to Nelson Mandela was unveiled in Parliament Square, London.
GRAMMAR POINT
LOOK, SEE, OR WATCH ?
Many students often confuse look, see and watch.
See means to notice people and things with your eyes:
She saw a big spider and screamed.
Mary saw the car drive up the road.
Look is used when you are trying to see something or someone:
I´ve looked everywhere but can´t find my keys.
I looked at the map to find the road.
Watch means to look at something for a period of time, usually something which moves or changes:
He watched TV all evening.
I watched the football match with some friends.
Note : while you are sitting in the cinema you watch a film, but before you go, you say you are going to see a film and afterwards you say you have seen the film.
Many students often confuse look, see and watch.
See means to notice people and things with your eyes:
She saw a big spider and screamed.
Mary saw the car drive up the road.
Look is used when you are trying to see something or someone:
I´ve looked everywhere but can´t find my keys.
I looked at the map to find the road.
Watch means to look at something for a period of time, usually something which moves or changes:
He watched TV all evening.
I watched the football match with some friends.
Note : while you are sitting in the cinema you watch a film, but before you go, you say you are going to see a film and afterwards you say you have seen the film.
domingo, 1 de noviembre de 2009
PROFILES
Profile: The Dalai Lama
In March 1959, as Chinese troops crushed an attempted uprising in Tibet, Tenzin Gyatso, the 14th Dalai Lama, fled into India. Then a young man in his mid-20s, the future must have seemed bleak. With few countries prepared to respond to China's actions, he faced a difficult task to protect Tibetans and their traditions.
Yet despite 50 years in exile, the reach of Tibet's spiritual leader has extended far beyond his community and he is now recognised as one of the world's leading religious figures.
He was awarded the Nobel Peace Prize in 1989 for his consistent opposition to the use of violence in his quest for Tibetan self-rule. But Beijing continues to view him as a "splittist", although he has repeatedly stated that his goal is for Tibetan autonomy rather than independence.
Child leader
The 14th Dalai Lama was born on 6 July 1935, in a small village just outside the current boundaries of Tibet. His parents, who named him Lhamo Dhondub, were farmers with several other children. When he was two years old, a search party of Buddhist officials recognised him as the reincarnation of the 13 previous Dalai Lamas and he was enthroned before he turned four.He was educated at a monastery and went on to achieve the Geshe Lharampa Degree, a doctorate of Buddhist philosophy.
But in 1950, when he was 15, the troops of Mao Tse-tung's newly-installed Communist government marched into Tibet. As soldiers poured into the country, the Dalai Lama - his title means Ocean of Wisdom - assumed full power as head of state.
In May 1951, China drew up a 17-point agreement legitimising Tibet's incorporation into China. When Tibetans took to the streets in 1959 demanding an end to Chinese rule, troops crushed the revolt and thousands of protesters were killed.
The Dalai Lama fled to India on foot and settled in Dharamsala, in the north of the country, which is now home to the Tibetan government-in-exile.
He was followed into exile by about 80,000 Tibetans, most of whom settled in the same area.
'Middle way'
In exile, the Dalai Lama began the task of trying to preserve the culture of the Tibetan people and publicise their plight on the world stage.
He appealed to the United Nations and persuaded the General Assembly to adopt resolutions in 1959, 1961 and 1965 calling for the protection of the Tibetan people.
He has met political and religious leaders throughout the world and visited the late Pope John Paul II on several occasions.
The Dalai Lama has advocated a "middle way" to resolve the status of Tibet - genuine self-rule for Tibet within China.
In 1987, amid protests in Lhasa against the large-scale relocation of Han Chinese into Tibet, the Dalai Lama proposed a five-point plan, in which he called for the establishment of Tibet as a zone of peace.But he did not move from his stance of peaceful resistance and in 1989 was awarded the Nobel Peace Prize.
The committee praised his policy of non-violence, which it called "all the more remarkable when it is considered in relation to the sufferings inflicted on the Tibetan people".
New challenges
Despite their disagreements, the Dalai Lama has continued to seek dialogue with Beijing. Talks between the two sides broke down in 1993 and there were no more for nearly a decade. Discussions resumed in 2002 and have continued intermittently but with no apparent progress.
Tensions between China and the Tibetan government-in-exile worsened in the wake of unrest in Tibet in March 2008 - the worst for 20 years. Protests sparked by the anniversary of the 1959 uprising turned into riots on the streets of Lhasa. Violent protests were also reported among Tibetan communities in neighbouring regions.
China says at least 18 people were killed by rioters. Tibetan groups say as many as 200 people died in a crackdown by Chinese security forces.
Subsequent talks in November 2008 ended with China apparently hardening its position and denouncing the Tibetan proposal for autonomy as a bid for "disguised independence".
The Dalai Lama is also facing challenges from within the exile community.
Some young Tibetan activists believe pacificism does not work and, although most approve of the Dalai Lama's leadership, a growing number are calling for a tougher line.
Just weeks before the 50th anniversary of his flight from Lhasa, the Dalai Lama appealed to people in Tibet not to respond to the "provocations of the Chinese authorities", referring to a heavy Chinese military presence across Tibet.
And he restated his life-long commitment to a peaceful resolution to the Tibetan issue.
"It goes without saying how much admiration I have for the enthusiasm, determination, and sacrifice of the Tibetans in Tibet. However, it is difficult to achieve a meaningful outcome by sacrificing lives.
"The path of non-violence is our irrevocable commitment and it is important that there be no departure at all from this path."
GRAMMAR POINT
EVEN MORE FALSE FRIENDS …
English- Spanish
PARTICULAR- ESPECIAL
PRESERVATIVE- CONSERVANTE
PRESUME- ASUMIR, PRETENDER
PRETEND- FINGIR
PROVE- DEMOSTRAR
QUIET- CALLADO
REALIZE- DARSE CUENTA
REMOVE- QUITAR
RESUME- CONTINUAR, REANUDAR
SENSIBLE- SENSATO
SIGNATURE- FIRMA
SPECTACLES- GAFAS
SUBURB- BARRIO RESIDENCIAL
SUCCESS- ÉXITO
SYMPATHETIC- COMPRENSIVO
SYMPATHY- COMPASIÓN, PÉSAME
Spanish- English
PARTICULAR- PRIVATE
PRESERVATIVO- CONDOM
PRESUMIR- SHOW OFF
PRETENDER- INTEND, TRY, SEEK
PROBAR- TRY, TRY ON
QUIETO- STILL, MOTIONLESS
REALIZAR- CARRY OUT, IMPLEMENT
REMOVER- STIR
RESUMIR- SUMMARIZE
SENSIBLE- SENSITIVE
ASIGNATURA- SUBJECT
ESPECTÁCULOS- SHOWS
SUBURBIO- SLUM
SUCESO- EVENT
SIMPÁTICO- NICE, FRIENDLY
SIMPATÍA- AFFECTION, KINDNESS
English- Spanish
PARTICULAR- ESPECIAL
PRESERVATIVE- CONSERVANTE
PRESUME- ASUMIR, PRETENDER
PRETEND- FINGIR
PROVE- DEMOSTRAR
QUIET- CALLADO
REALIZE- DARSE CUENTA
REMOVE- QUITAR
RESUME- CONTINUAR, REANUDAR
SENSIBLE- SENSATO
SIGNATURE- FIRMA
SPECTACLES- GAFAS
SUBURB- BARRIO RESIDENCIAL
SUCCESS- ÉXITO
SYMPATHETIC- COMPRENSIVO
SYMPATHY- COMPASIÓN, PÉSAME
Spanish- English
PARTICULAR- PRIVATE
PRESERVATIVO- CONDOM
PRESUMIR- SHOW OFF
PRETENDER- INTEND, TRY, SEEK
PROBAR- TRY, TRY ON
QUIETO- STILL, MOTIONLESS
REALIZAR- CARRY OUT, IMPLEMENT
REMOVER- STIR
RESUMIR- SUMMARIZE
SENSIBLE- SENSITIVE
ASIGNATURA- SUBJECT
ESPECTÁCULOS- SHOWS
SUBURBIO- SLUM
SUCESO- EVENT
SIMPÁTICO- NICE, FRIENDLY
SIMPATÍA- AFFECTION, KINDNESS
CURRENT AFFAIRS-2
Trains in Spain signal the future
BBC News
The 0830 service from Madrid to Barcelona departs promptly and without fuss.
With no lengthy check-in queues, and a slick security control, many passengers had turned up at the Spanish capital's Atocha rail terminal at the last minute, safe in the knowledge that they would still catch their train.
On board, breakfast and the morning newspapers are digested, as the city suburbs whizz by. At this hour, the clientele is mostly business types - people who would previously have made the trip by air, but now prefer the train.
"Door-to-door, I find the train is faster," explains Francisco Lopez, travelling to meet new work colleagues in the Catalan capital.
"With the plane you have to take taxis to and from airports outside the city, whereas the train stations are right in the centre."
The trip, of 600km (385 miles) used to take as long as seven hours before any part of the line was high-speed. But after intermediate improvement work initially cut that to four-and-a-half hours, the journey time was slashed further to a little over two-and-a-half hours in February 2008 with the opening of the Alta Velocidad Espanola (AVE) high-speed service.
Since then, custom has shifted at breakneck speed from air to rail, to the point where, in July 2009, more people made the journey between Madrid and Barcelona by AVE than by plane. This is on a route which had been one of the most lucrative air corridors in the world.
Business confidence
Spain was a relative latecomer to high-speed rail, inaugurating its first line - between Madrid and Seville - in 1992. But it has caught up fast, and now has 1,835km of track in service. Next year, the government boasts, Spain will overtake Japan and France to become the world leader, measured in kilometres of high-speed line.
From Madrid's central location, routes extend like spokes on a cycle wheel: to Malaga and Seville in the south, Barcelona in the north-east, and Valladolid to the north. New lines, east to Valencia and north-west to Galicia, are under construction.
"We are currently transporting 40,000 passengers a day," beams Abelardo Carrillo, director of AVE Services for Spain's state railway company, Renfe.
"It's been a huge success, both commercially and in terms of public opinion. And there are two keys: competitive journey times, and a level of service at least as good as the airlines."
Tellingly, Renfe has not chosen to compete fiercely on price. Fares are broadly similar to the airlines, in the confident belief that business travellers will still opt for rail, on grounds of comfort and convenience.
"The Spanish model is very different from the populist approach of France - where passengers pay lower fares for a lower standard of service," explains Professor Josep Sayeras of the Esade Business School in Barcelona.
"Here, Renfe set higher fares, thinking business people will have to make the journey, come what may."
For now, that strategy appears to be paying off. Mr Carrillo explains that the AVE network is turning in an operating profit, although neither Renfe nor Spain's Transport Ministry will disclose how much. The project is attracting considerable attention from abroad. In proposing its own £34bn ($55bn: 37bn euros) high-speed line between London and Glasgow, Britain's Network Rail noted how the AVE service had enabled Spain's railways to take market share from airlines and to promote regional economic development.
In the US, the Obama administration has earmarked $8bn for investment in high-speed rail, prompting Transportation Secretary Ray LaHood to ride the AVE for himself during a fact finding mission in June.Judging by his subsequent blog entry, the American politician was impressed.
"Do you know that the Spanish have a goal of establishing high speed rail stations within 30 miles of 90% of all Spaniards by 2020?" Mr LaHood purred. "Now that's ambition."
Budget worries
In backing the bullet trains, politicians can claim they are choosing a mode of transport which is simultaneously traditional and cutting edge, and which reduces both traffic congestion and carbon emissions.
The International Union of Railways (UIC) estimates that the AVE produces one-sixth of the CO2 emissions per plane passenger.
In Spain, the AVE has also brought economic development to provincial towns and cities touched by the high-speed line. They include Zaragoza, the only station stop between Madrid and Barcelona.
"Zaragoza is the new business centre of Spain, because the people of Madrid and Barcelona now meet here in the middle," says a proud Manuel Teruel, the president of the local chamber of commerce.
Pointing out the hi-tech hotels which have sprung up around the AVE station, he explains that the number of trade fairs taking place in the city has tripled in the space of five years. Mr Teruel adds that high-speed rail has made local businesses more productive, by saving on travel time and hotel costs - because overnight stays on trips to Madrid are now rarely necessary.And citing a 28% increase in tourist numbers since 2005, he argues that the very association with modern transport has made the city more attractive.
"The AVE symbolises technology and the future," he says. "It's all about image."
Renfe is planning for further investment of up to 120bn euros in the coming decade, with around 80% of it from the Spanish state, and a sizeable chunk from EU funds.
But critics wonder whether the proposed five-fold increase in the reach of the network, to 10,000km by 2020, is realistic in the current climate.
"Right now, Spain is in an economic crisis and we have a huge public deficit," explains Mr Sayeras from Esade.
"The government must assign resources very carefully, and in my opinion, high speed rail should not be a priority. We should invest in local and regional trains."
Renfe's Mr Carrillo acknowledges that, in challenging times, the politicians require some nerve to stay on board.
"Given the budgets involved, these are political decisions which carry huge weight," he admits. "But our experience so far is that this investment is worth it."
Having approached speeds of 300 km/h, the 0830 from Madrid pulls into Barcelona at 1113 - on schedule, like 99% of AVE services.
Never have these two great cities felt so connected. And although questions linger about Spain's ability to remain the pacesetter, its achievements may point the way for others.
BBC News
The 0830 service from Madrid to Barcelona departs promptly and without fuss.
With no lengthy check-in queues, and a slick security control, many passengers had turned up at the Spanish capital's Atocha rail terminal at the last minute, safe in the knowledge that they would still catch their train.
On board, breakfast and the morning newspapers are digested, as the city suburbs whizz by. At this hour, the clientele is mostly business types - people who would previously have made the trip by air, but now prefer the train.
"Door-to-door, I find the train is faster," explains Francisco Lopez, travelling to meet new work colleagues in the Catalan capital.
"With the plane you have to take taxis to and from airports outside the city, whereas the train stations are right in the centre."
The trip, of 600km (385 miles) used to take as long as seven hours before any part of the line was high-speed. But after intermediate improvement work initially cut that to four-and-a-half hours, the journey time was slashed further to a little over two-and-a-half hours in February 2008 with the opening of the Alta Velocidad Espanola (AVE) high-speed service.
Since then, custom has shifted at breakneck speed from air to rail, to the point where, in July 2009, more people made the journey between Madrid and Barcelona by AVE than by plane. This is on a route which had been one of the most lucrative air corridors in the world.
Business confidence
Spain was a relative latecomer to high-speed rail, inaugurating its first line - between Madrid and Seville - in 1992. But it has caught up fast, and now has 1,835km of track in service. Next year, the government boasts, Spain will overtake Japan and France to become the world leader, measured in kilometres of high-speed line.
From Madrid's central location, routes extend like spokes on a cycle wheel: to Malaga and Seville in the south, Barcelona in the north-east, and Valladolid to the north. New lines, east to Valencia and north-west to Galicia, are under construction.
"We are currently transporting 40,000 passengers a day," beams Abelardo Carrillo, director of AVE Services for Spain's state railway company, Renfe.
"It's been a huge success, both commercially and in terms of public opinion. And there are two keys: competitive journey times, and a level of service at least as good as the airlines."
Tellingly, Renfe has not chosen to compete fiercely on price. Fares are broadly similar to the airlines, in the confident belief that business travellers will still opt for rail, on grounds of comfort and convenience.
"The Spanish model is very different from the populist approach of France - where passengers pay lower fares for a lower standard of service," explains Professor Josep Sayeras of the Esade Business School in Barcelona.
"Here, Renfe set higher fares, thinking business people will have to make the journey, come what may."
For now, that strategy appears to be paying off. Mr Carrillo explains that the AVE network is turning in an operating profit, although neither Renfe nor Spain's Transport Ministry will disclose how much. The project is attracting considerable attention from abroad. In proposing its own £34bn ($55bn: 37bn euros) high-speed line between London and Glasgow, Britain's Network Rail noted how the AVE service had enabled Spain's railways to take market share from airlines and to promote regional economic development.
In the US, the Obama administration has earmarked $8bn for investment in high-speed rail, prompting Transportation Secretary Ray LaHood to ride the AVE for himself during a fact finding mission in June.Judging by his subsequent blog entry, the American politician was impressed.
"Do you know that the Spanish have a goal of establishing high speed rail stations within 30 miles of 90% of all Spaniards by 2020?" Mr LaHood purred. "Now that's ambition."
Budget worries
In backing the bullet trains, politicians can claim they are choosing a mode of transport which is simultaneously traditional and cutting edge, and which reduces both traffic congestion and carbon emissions.
The International Union of Railways (UIC) estimates that the AVE produces one-sixth of the CO2 emissions per plane passenger.
In Spain, the AVE has also brought economic development to provincial towns and cities touched by the high-speed line. They include Zaragoza, the only station stop between Madrid and Barcelona.
"Zaragoza is the new business centre of Spain, because the people of Madrid and Barcelona now meet here in the middle," says a proud Manuel Teruel, the president of the local chamber of commerce.
Pointing out the hi-tech hotels which have sprung up around the AVE station, he explains that the number of trade fairs taking place in the city has tripled in the space of five years. Mr Teruel adds that high-speed rail has made local businesses more productive, by saving on travel time and hotel costs - because overnight stays on trips to Madrid are now rarely necessary.And citing a 28% increase in tourist numbers since 2005, he argues that the very association with modern transport has made the city more attractive.
"The AVE symbolises technology and the future," he says. "It's all about image."
Renfe is planning for further investment of up to 120bn euros in the coming decade, with around 80% of it from the Spanish state, and a sizeable chunk from EU funds.
But critics wonder whether the proposed five-fold increase in the reach of the network, to 10,000km by 2020, is realistic in the current climate.
"Right now, Spain is in an economic crisis and we have a huge public deficit," explains Mr Sayeras from Esade.
"The government must assign resources very carefully, and in my opinion, high speed rail should not be a priority. We should invest in local and regional trains."
Renfe's Mr Carrillo acknowledges that, in challenging times, the politicians require some nerve to stay on board.
"Given the budgets involved, these are political decisions which carry huge weight," he admits. "But our experience so far is that this investment is worth it."
Having approached speeds of 300 km/h, the 0830 from Madrid pulls into Barcelona at 1113 - on schedule, like 99% of AVE services.
Never have these two great cities felt so connected. And although questions linger about Spain's ability to remain the pacesetter, its achievements may point the way for others.
FINANCE & ECONOMICS
Spain to end takeover tax breaks
BBC
The Spanish government has been told to end a tax break that gives its companies an advantage in buying companies in other European countries.
The taxation law change was seen as vital to the 2006 takeover of 02 by Telefonica, making it one of the biggest players in UK telecoms.
It also aided the purchase of Scottish Power by Iberdrola in 2007.
The European Commission has said it will require the Spanish government to remove the tax break. Indications from Madrid are that it is willing to make those changes.
The list of Spanish companies buying British companies also includes Ferrovial which bought BAA, which owns most of Britain's large airports. And Santander has been buying assets from British banks, including parts of Bradford and Bingley.
In 2007 and under political pressure, the European Commission opened an investigation into allegations that the Madrid government was putting its companies at an advantage that distorted the open market.
Nearly two years on, the EC has decided to end the measures. The tax regime allowed Spanish companies to write off the goodwill element of a deal - that is, the excess valuation over the value of the actual assets being bought.
This was allowed for 20 years after the acquisition, and could apply even where there was not a full merger. But it does not apply to Spanish companies buying other Spanish companies.
The European Commission is able to require repayment of those tax subsidies, but has chosen not to do so in the case of sales that preceded the start of its inquiry.
That leaves uncertainty over possible repayments of tax for more recent deals, such as the purchase of part of Bradford and Bingley by Santander.
Competition commissioner Neelie Kroes said: "This tax provision gives a discriminatory advantage to Spanish companies when acquiring shares in other European companies.
"To preserve a level playing field in the single market, Spain must put an end to this measure and recover unlawful aid given since December 2007".
BBC
The Spanish government has been told to end a tax break that gives its companies an advantage in buying companies in other European countries.
The taxation law change was seen as vital to the 2006 takeover of 02 by Telefonica, making it one of the biggest players in UK telecoms.
It also aided the purchase of Scottish Power by Iberdrola in 2007.
The European Commission has said it will require the Spanish government to remove the tax break. Indications from Madrid are that it is willing to make those changes.
The list of Spanish companies buying British companies also includes Ferrovial which bought BAA, which owns most of Britain's large airports. And Santander has been buying assets from British banks, including parts of Bradford and Bingley.
In 2007 and under political pressure, the European Commission opened an investigation into allegations that the Madrid government was putting its companies at an advantage that distorted the open market.
Nearly two years on, the EC has decided to end the measures. The tax regime allowed Spanish companies to write off the goodwill element of a deal - that is, the excess valuation over the value of the actual assets being bought.
This was allowed for 20 years after the acquisition, and could apply even where there was not a full merger. But it does not apply to Spanish companies buying other Spanish companies.
The European Commission is able to require repayment of those tax subsidies, but has chosen not to do so in the case of sales that preceded the start of its inquiry.
That leaves uncertainty over possible repayments of tax for more recent deals, such as the purchase of part of Bradford and Bingley by Santander.
Competition commissioner Neelie Kroes said: "This tax provision gives a discriminatory advantage to Spanish companies when acquiring shares in other European companies.
"To preserve a level playing field in the single market, Spain must put an end to this measure and recover unlawful aid given since December 2007".
CURRENT AFFAIRS-1
The media and Spain's government
Prisa zapped
Oct 1st 2009
From The Economist
Spain’s prime minister falls out with its biggest media group
FEW tiffs are as nasty as those between old friends. A bitter bust-up between Spain’s prime minister, José Luis Rodríguez Zapatero, and the media giant Prisa, publisher of the newspaper El País, mirrors the intimacy that once reigned. It also highlights problems on both sides.
Mr Zapatero’s difficulties centre on the economy. Spain’s unemployment rate is now 18% and rising. It may be the last big European economy to pull out of recession. A decision to raise taxes has roused few cheers. Critics accuse Mr Zapatero of dictating short-term solutions on the hoof, rather than tackling deeper ills.
Among the critics is now El País, Spain’s biggest-selling daily, usually a Socialist ally. In recent editorials it has slammed Mr Zapatero’s economic measures as “incoherent” and suggested that next year’s budget is “a backward step”. After the government revealed plans to raise an extra €12 billion ($17 billion), including a hike in sales tax, it commented that “this does not seem the best way to stimulate the economy” and demanded an explanation of how it might help.
But the newspaper’s greatest ire has been reserved for a law rushed out to regulate terrestrial digital pay-television (TDT). The “scandalous and abusive” TDT law was, it thundered, aimed at “satisfying the interests of a group of friends”. Those friends are Prisa’s foes at Mediapro, a fast-expanding media group that launched a pro-Zapatero newspaper, Público, two years ago. The two groups are battling not just for left-leaning newspaper readers but also for valuable TV football rights. The new law allowed Mediapro to promote its pay soccer channel to TDT viewers just as the league season started, hurting Prisa’s own satellite-TV channel, Digital+.
It also came as the family-controlled Prisa group struggles with a €5 billion debt caused by a badly timed partial buy-out of its Sogecable TV unit. Prisa has just sold stakes in two smaller businesses. It may also sell Digital+. Among those said to be interested is Mediaset, the media group of Italy’s prime minister, Silvio Berlusconi. In a twist, he is in a row with El País over photographs it published of his parties in Sardinia.
Is there cause and effect in all this? The editor of El País, Javier Moreno, says not, pointing to critical editorials before the TDT row. Some readers do not believe him. Mr Zapatero accuses Prisa’s media outlets of sharpening their knives. He also denies favouring Mediapro. Yet few doubt that the row will damage the Socialists. El País is the intellectual meeting-place of Spain’s centre-left. And Prisa’s media outlets, including the popular Cadena SER radio network, can do much to bring out the Socialist vote.
It is hard to separate chicken from egg. Relations have been edgy for a while. Any attack on government favouritism coming from Prisa, which did handsomely under Felipe González, a former Socialist prime minister, sounds rich. Yet there should be few complaints if Spain’s biggest newspaper now feels free to criticise its prime minister.
Prisa zapped
Oct 1st 2009
From The Economist
Spain’s prime minister falls out with its biggest media group
FEW tiffs are as nasty as those between old friends. A bitter bust-up between Spain’s prime minister, José Luis Rodríguez Zapatero, and the media giant Prisa, publisher of the newspaper El País, mirrors the intimacy that once reigned. It also highlights problems on both sides.
Mr Zapatero’s difficulties centre on the economy. Spain’s unemployment rate is now 18% and rising. It may be the last big European economy to pull out of recession. A decision to raise taxes has roused few cheers. Critics accuse Mr Zapatero of dictating short-term solutions on the hoof, rather than tackling deeper ills.
Among the critics is now El País, Spain’s biggest-selling daily, usually a Socialist ally. In recent editorials it has slammed Mr Zapatero’s economic measures as “incoherent” and suggested that next year’s budget is “a backward step”. After the government revealed plans to raise an extra €12 billion ($17 billion), including a hike in sales tax, it commented that “this does not seem the best way to stimulate the economy” and demanded an explanation of how it might help.
But the newspaper’s greatest ire has been reserved for a law rushed out to regulate terrestrial digital pay-television (TDT). The “scandalous and abusive” TDT law was, it thundered, aimed at “satisfying the interests of a group of friends”. Those friends are Prisa’s foes at Mediapro, a fast-expanding media group that launched a pro-Zapatero newspaper, Público, two years ago. The two groups are battling not just for left-leaning newspaper readers but also for valuable TV football rights. The new law allowed Mediapro to promote its pay soccer channel to TDT viewers just as the league season started, hurting Prisa’s own satellite-TV channel, Digital+.
It also came as the family-controlled Prisa group struggles with a €5 billion debt caused by a badly timed partial buy-out of its Sogecable TV unit. Prisa has just sold stakes in two smaller businesses. It may also sell Digital+. Among those said to be interested is Mediaset, the media group of Italy’s prime minister, Silvio Berlusconi. In a twist, he is in a row with El País over photographs it published of his parties in Sardinia.
Is there cause and effect in all this? The editor of El País, Javier Moreno, says not, pointing to critical editorials before the TDT row. Some readers do not believe him. Mr Zapatero accuses Prisa’s media outlets of sharpening their knives. He also denies favouring Mediapro. Yet few doubt that the row will damage the Socialists. El País is the intellectual meeting-place of Spain’s centre-left. And Prisa’s media outlets, including the popular Cadena SER radio network, can do much to bring out the Socialist vote.
It is hard to separate chicken from egg. Relations have been edgy for a while. Any attack on government favouritism coming from Prisa, which did handsomely under Felipe González, a former Socialist prime minister, sounds rich. Yet there should be few complaints if Spain’s biggest newspaper now feels free to criticise its prime minister.
jueves, 1 de octubre de 2009
CURRENT AFFAIRS-1
José Luis Zapatero: Europe’s Next President
NEWSWEEK
Sep 2009
Spanish Prime Minister José Luis Rodríguez Zapatero was once hailed as the new face of Europe's left. Then a crushing recession sparked by the collapse of the housing bubble sent his approval rating into a spiral. Yet Zapatero remains upbeat. Last week he spoke to NEWSWEEK's Mike Elkin about the upcoming G20 meeting, dealing with Venezuela's Hugo Chávez, and what to expect when Spain assumes the EU presidency in January.
What will be the easiest topic at the G20, and what will be the most difficult?
There will be an agreement on banking regulations, and we'll just have to draw up a calendar. The most difficult thing will be climate change.
What will your priorities be when Spain assumes the EU presidency?
First, economic reactivation, which involves a greater push for innovation and competition. Second, the application of the Lisbon Treaty, if passed, which will provide a whole new governing system for the EU. And third, the European Union should close commercial pacts with Latin America, Russia, and the and the Mediterranean region
Your government wants a diplomatic solution to Cuba. What are the next steps?
We need a dialogue with terms: we have to be strict on issues like human rights and Cuba's position in Latin America.
Venezuela is also causing concern, especially its ties with Iran.
Iran is an issue for the international community, for the United Nations. Iran must comply with the international framework for nuclear development and provide guarantees about its nuclear objectives. On this the entire European Union agrees.
Chávez seems to be playing both sides. Is there a diplomatic effort to rein him in?
I think that must be dealt with among the Latin American countries.
You choose your words more carefully than Chávez does.
[Laughs] I tell him the same thing. But he spends a lot of time making speeches in front of the cameras.
On Afghanistan, the U.S. government is asking allies to shoulder more of the burden. will you increase Spain's role?
In the next few days, Parliament will decide whether to send another 220 soldiers to bring the total up to 1,000. We must also put on the table the steps that will return the task of providing security to the Afghans. In the meantime, Spain will be in Afghanistan.
Some say that if NATO fails in Afghanistan, its very existence will be questioned.
NATO is not going to fail, because there is an international pledge that under no circumstances will Afghanistan be in the hands of the Taliban.
Spain's economic statistics are awful: 18 percent unemployment, a recession, and a big budget deficit. Is spain collapsing?
No. You just need to go out on the streets to see that it's not. The recession will be less than in other European countries. Our banking sector has avoided the crisis, and that will aid the recovery. Of course, the main problem is unemployment. Recovery will only take place when we create jobs. Our strategy is social protection and to reform the growth model to focus less on housing and more on innovative sectors like renewable energies and biotechnology.
But will there be a serious divide in Europe as countries such as Germany begin to recover while Spain takes longer?
No, because Germany's recovery helps us recover. Germany is the largest importer of Spanish goods, and German tourism is critical for our GDP. We will all come out of the crisis as we went in.
NEWSWEEK
Sep 2009
Spanish Prime Minister José Luis Rodríguez Zapatero was once hailed as the new face of Europe's left. Then a crushing recession sparked by the collapse of the housing bubble sent his approval rating into a spiral. Yet Zapatero remains upbeat. Last week he spoke to NEWSWEEK's Mike Elkin about the upcoming G20 meeting, dealing with Venezuela's Hugo Chávez, and what to expect when Spain assumes the EU presidency in January.
What will be the easiest topic at the G20, and what will be the most difficult?
There will be an agreement on banking regulations, and we'll just have to draw up a calendar. The most difficult thing will be climate change.
What will your priorities be when Spain assumes the EU presidency?
First, economic reactivation, which involves a greater push for innovation and competition. Second, the application of the Lisbon Treaty, if passed, which will provide a whole new governing system for the EU. And third, the European Union should close commercial pacts with Latin America, Russia, and the and the Mediterranean region
Your government wants a diplomatic solution to Cuba. What are the next steps?
We need a dialogue with terms: we have to be strict on issues like human rights and Cuba's position in Latin America.
Venezuela is also causing concern, especially its ties with Iran.
Iran is an issue for the international community, for the United Nations. Iran must comply with the international framework for nuclear development and provide guarantees about its nuclear objectives. On this the entire European Union agrees.
Chávez seems to be playing both sides. Is there a diplomatic effort to rein him in?
I think that must be dealt with among the Latin American countries.
You choose your words more carefully than Chávez does.
[Laughs] I tell him the same thing. But he spends a lot of time making speeches in front of the cameras.
On Afghanistan, the U.S. government is asking allies to shoulder more of the burden. will you increase Spain's role?
In the next few days, Parliament will decide whether to send another 220 soldiers to bring the total up to 1,000. We must also put on the table the steps that will return the task of providing security to the Afghans. In the meantime, Spain will be in Afghanistan.
Some say that if NATO fails in Afghanistan, its very existence will be questioned.
NATO is not going to fail, because there is an international pledge that under no circumstances will Afghanistan be in the hands of the Taliban.
Spain's economic statistics are awful: 18 percent unemployment, a recession, and a big budget deficit. Is spain collapsing?
No. You just need to go out on the streets to see that it's not. The recession will be less than in other European countries. Our banking sector has avoided the crisis, and that will aid the recovery. Of course, the main problem is unemployment. Recovery will only take place when we create jobs. Our strategy is social protection and to reform the growth model to focus less on housing and more on innovative sectors like renewable energies and biotechnology.
But will there be a serious divide in Europe as countries such as Germany begin to recover while Spain takes longer?
No, because Germany's recovery helps us recover. Germany is the largest importer of Spanish goods, and German tourism is critical for our GDP. We will all come out of the crisis as we went in.
CURRENT AFFAIRS-2
Spain crowned kings of EuroBasket
BBC Sport
Spain became European basketball champions for the first time after beating Serbia 85-63 in the EuroBasket final in Katowice, Poland.
Pau Gasol hit 18 points and Rudy Fernandez added 13 for Spain, who led by 23 points at half-time and coasted to victory in the second half.
Spain now hold both the world and European titles.
All three qualifiers from Warsaw's 'Group of Death', from which GB were eliminated, made the semi-finals.
If Spain were nervous at the start of the final - they had previously played six without winning, three of them in the last 10 years - then three-pointers from Juan Carlos Navarro, Ricky Rubio, Jorge Garbajosa and Fernandez gave them a rhythm as well as an 18-7 lead.
By half-time, that lead was 52-29 and Gasol already had 14 points, eight rebounds and a couple of blocked shots in just 16 and a half minutes on court.
Serbia, who were led by 15 points each from Uros Tripkovic and Novica Velickovic, came back to within 14 points in the third quarter, only for Fernandez to lead a 9-0 run that effectively settled the game for Spain.
Pau Gasol hit 18 points for Spain as they claimed victory
Spain had lost to Serbia on the opening night in Group C in Warsaw and came close to elimination in their thrilling match with Great Britain 24 hours later and the blow to their confidence was still affecting them in the second phase in Lodz.
But coach Sergio Scariolo's side demolished hosts Poland with some trademark Champagne basketball to book a place in the quarter-finals and then started to look their old selves.
In the last eight they faced Group E winners France, a team unbeaten to that point but which looked from the opening tip to be about to get nothing but a beating.
France's Tony Parker was kept taken out of the game by the dedicated defensive efforts of Ricky Rubio and Sergio Llull, who ensured he had no chance to work his magic.
Having established their shooting game in the first quarter, Spain went inside to LA Lakers star Gasol, who finished with 28 points in an 86-66 win.
And Greece fared little better against the Spaniards in the semi-final, which became a showcase for the talents of another Spanish NBA star, Fernandez of Portland Trailbalzers, who poured in 14 points in an 82-64 win.
Serbia reached the final by taking the battle of the Balkans with a 96-92 overtime win over Slovenia, whose ongoing injury problems finally caught up with them. They seemed to have survived the loss of their star player Erazem Lorbek, who fouled out with 25 points and 10 rebounds with four and a half minutes remaining when his brother Domen took up the slack to finish with 22 points but Serbia's playmaker Milos Teodosic had other ideas.
He hit 24 of his 32 points in the fourth quarter and overtime, including five threes from six attempts, to prevent the Slovenia-Spain final many people might have wanted, especially the (2,000-plus) contingent of Slovene fans that were easily the most vocal in this tournament.
Slovenia, ironically the only team GB managed to beat this summer, also came up short for the bronze medal, losing 57-56 to Greece, for whom giant centre Sofoklis Schortsanitis hit 23 points.
Gasol was deservedly voted the most valuable player of the tournament but typically deflected most of the praise on to his team-mates.
"Obviously I'm extremely happy at the outcome of the game - we've played amazingly well for the last five games and a half," he said.
"I'm super-proud of my team-mates and coaching staff who got us where we are today."
He revealed it was towards the end of the second phase in Poland that his team rediscovered their ability to play together.
"After we lost against Turkey we started to get together - we were aware that we weren't playing collectively," said Gasol, who won the NBA title with the Lakers in June. "We just said we had to get back to playing the way we know how.
"Then against Lithuania we went 25-15 down I think it was, but then we went on a 23-0 run. We played excellently at the end of the championships and that's when the winning matters."
Serbia's veteran coach Dusan Ivkovic bemoaned his side's inability to cope with the pressure of the final.
"I think we were found out a little bit in a pressure situation - for the first time in the tournament we couldn't handle the pressure," said Ivkovic.
"To be sure, our target is to put together a team that will play well at the Olympic Games in London. We came here with the objective of qualifying for the World Championships in Turkey and we've achieved that."
BBC Sport
Spain became European basketball champions for the first time after beating Serbia 85-63 in the EuroBasket final in Katowice, Poland.
Pau Gasol hit 18 points and Rudy Fernandez added 13 for Spain, who led by 23 points at half-time and coasted to victory in the second half.
Spain now hold both the world and European titles.
All three qualifiers from Warsaw's 'Group of Death', from which GB were eliminated, made the semi-finals.
If Spain were nervous at the start of the final - they had previously played six without winning, three of them in the last 10 years - then three-pointers from Juan Carlos Navarro, Ricky Rubio, Jorge Garbajosa and Fernandez gave them a rhythm as well as an 18-7 lead.
By half-time, that lead was 52-29 and Gasol already had 14 points, eight rebounds and a couple of blocked shots in just 16 and a half minutes on court.
Serbia, who were led by 15 points each from Uros Tripkovic and Novica Velickovic, came back to within 14 points in the third quarter, only for Fernandez to lead a 9-0 run that effectively settled the game for Spain.
Pau Gasol hit 18 points for Spain as they claimed victory
Spain had lost to Serbia on the opening night in Group C in Warsaw and came close to elimination in their thrilling match with Great Britain 24 hours later and the blow to their confidence was still affecting them in the second phase in Lodz.
But coach Sergio Scariolo's side demolished hosts Poland with some trademark Champagne basketball to book a place in the quarter-finals and then started to look their old selves.
In the last eight they faced Group E winners France, a team unbeaten to that point but which looked from the opening tip to be about to get nothing but a beating.
France's Tony Parker was kept taken out of the game by the dedicated defensive efforts of Ricky Rubio and Sergio Llull, who ensured he had no chance to work his magic.
Having established their shooting game in the first quarter, Spain went inside to LA Lakers star Gasol, who finished with 28 points in an 86-66 win.
And Greece fared little better against the Spaniards in the semi-final, which became a showcase for the talents of another Spanish NBA star, Fernandez of Portland Trailbalzers, who poured in 14 points in an 82-64 win.
Serbia reached the final by taking the battle of the Balkans with a 96-92 overtime win over Slovenia, whose ongoing injury problems finally caught up with them. They seemed to have survived the loss of their star player Erazem Lorbek, who fouled out with 25 points and 10 rebounds with four and a half minutes remaining when his brother Domen took up the slack to finish with 22 points but Serbia's playmaker Milos Teodosic had other ideas.
He hit 24 of his 32 points in the fourth quarter and overtime, including five threes from six attempts, to prevent the Slovenia-Spain final many people might have wanted, especially the (2,000-plus) contingent of Slovene fans that were easily the most vocal in this tournament.
Slovenia, ironically the only team GB managed to beat this summer, also came up short for the bronze medal, losing 57-56 to Greece, for whom giant centre Sofoklis Schortsanitis hit 23 points.
Gasol was deservedly voted the most valuable player of the tournament but typically deflected most of the praise on to his team-mates.
"Obviously I'm extremely happy at the outcome of the game - we've played amazingly well for the last five games and a half," he said.
"I'm super-proud of my team-mates and coaching staff who got us where we are today."
He revealed it was towards the end of the second phase in Poland that his team rediscovered their ability to play together.
"After we lost against Turkey we started to get together - we were aware that we weren't playing collectively," said Gasol, who won the NBA title with the Lakers in June. "We just said we had to get back to playing the way we know how.
"Then against Lithuania we went 25-15 down I think it was, but then we went on a 23-0 run. We played excellently at the end of the championships and that's when the winning matters."
Serbia's veteran coach Dusan Ivkovic bemoaned his side's inability to cope with the pressure of the final.
"I think we were found out a little bit in a pressure situation - for the first time in the tournament we couldn't handle the pressure," said Ivkovic.
"To be sure, our target is to put together a team that will play well at the Olympic Games in London. We came here with the objective of qualifying for the World Championships in Turkey and we've achieved that."
FINANCE & ECONOMICS-1
Obama hails 'tough regulations'
The world's leading nations have agreed "tough new regulations" to prevent another global financial crisis, US President Barack Obama has said.
These relate to the amount of money banks have to hold in reserve and to excessive pay for bankers. Speaking at the end of a two-day G20 summit, Mr Obama also outlined plans to give emerging economies a greater say in the global economy.
The G20 will effectively replace the G8 group of developed economies.
Global leaders also announced a deal to shift the balance of voting in the International Monetary Fund (IMF) towards growing nations such as China at the summit the US city if Pittsburgh.
'Reckless few'
"We have taken bold and concerted action to forge a new framework for strong, sustainable and balanced growth," said US President Barack Obama.
"We have agreed tough new financial regulations to ensure that the reckless few can no longer be allowed to put the global financial system at risk."
He said that leading nations would now be allowed to assess each others' economic policies. Mr Obama added that the leaders had agreed rules to ensure that executive pay would be linked to long term financial performance.
Many have criticised excessive bonuses as encouraging the kind of short term risk-taking that contributed to the financial crisis.
Despite Mr Obama's declaration, the G20 fell short of agreeing specific rules on the capital reserves that banks need to hold.
"We commit to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive [borrowing]," a statement from the G20 leaders said following the summit.
It added that the rules will be phased in once financial conditions improve and recovery is "assured".
The leaders also fell short of agreeing a cap on bonuses, agreeing instead that bonus payments should not be guaranteed for many years, should be deferred in part, and should not exceed a percentage of the bank's revenue.
'Fudging it'
"We designated the G20 to be the premier forum for our international economic co-operation," the statement said. It added that the global leaders would shift "at least 5%" of the quota of votes within the IMF from "over-represented countries to under-represented countries". It described under-represented countries as "dynamic emerging markets and developing countries".
Emerging economies will also get a greater say at the World Bank.
The leaders also pledged to continue pumping money into their economies until "a durable recovery is secured".
But there will be no formal announcement that the G20 will replace the G8 until 2011, said the BBC's economics editor Stephanie Flanders.
"The leaders would have liked formally to announce the handover today in Pittsburgh, but the Canadians - who are chairing the G8 next year - kicked up such a fuss that they had to fudge it," she said.
There will now be a G20 meeting on the sidelines of Canada's G8 Summit next June, where most of the economic business of the day will be discussed.
But, formally at least, the economic side of the G8 will live on another year.
'Distrust'
The IMF has 186 member-states. It lends money to countries that are facing problems, but in return economic changes have to be made by those countries.
Currently, China wields 3.7% of IMF votes compared with France's 4.9%, although the Chinese economy is now 50% larger than that of France.
The IMF has been criticised in the past as being a group of developed countries trying to lay down the law to struggling countries, which is why the decision to give growing nations more votes is important.
"If you talk to the Chinese or talk to anyone from emerging markets they say the IMF doesn't have legitimacy and... we don't trust the IMF to come and rescue us in a crisis," Simon Johnson, former chief economist at the IMF, told the BBC.
"They don't trust it because it's US and West Europe-dominated. That's not fair... and the IMF doesn't function properly as a result."
Nobel prize-winning economist Amartya Sen welcomed the change in voting rights, but said that, "on their own, they won't be able to achieve much... It's not just a question of voting rights, but also a question of broadening the dialogue".
The world's leading nations have agreed "tough new regulations" to prevent another global financial crisis, US President Barack Obama has said.
These relate to the amount of money banks have to hold in reserve and to excessive pay for bankers. Speaking at the end of a two-day G20 summit, Mr Obama also outlined plans to give emerging economies a greater say in the global economy.
The G20 will effectively replace the G8 group of developed economies.
Global leaders also announced a deal to shift the balance of voting in the International Monetary Fund (IMF) towards growing nations such as China at the summit the US city if Pittsburgh.
'Reckless few'
"We have taken bold and concerted action to forge a new framework for strong, sustainable and balanced growth," said US President Barack Obama.
"We have agreed tough new financial regulations to ensure that the reckless few can no longer be allowed to put the global financial system at risk."
He said that leading nations would now be allowed to assess each others' economic policies. Mr Obama added that the leaders had agreed rules to ensure that executive pay would be linked to long term financial performance.
Many have criticised excessive bonuses as encouraging the kind of short term risk-taking that contributed to the financial crisis.
Despite Mr Obama's declaration, the G20 fell short of agreeing specific rules on the capital reserves that banks need to hold.
"We commit to developing by end-2010 internationally agreed rules to improve both the quantity and quality of bank capital and to discourage excessive [borrowing]," a statement from the G20 leaders said following the summit.
It added that the rules will be phased in once financial conditions improve and recovery is "assured".
The leaders also fell short of agreeing a cap on bonuses, agreeing instead that bonus payments should not be guaranteed for many years, should be deferred in part, and should not exceed a percentage of the bank's revenue.
'Fudging it'
"We designated the G20 to be the premier forum for our international economic co-operation," the statement said. It added that the global leaders would shift "at least 5%" of the quota of votes within the IMF from "over-represented countries to under-represented countries". It described under-represented countries as "dynamic emerging markets and developing countries".
Emerging economies will also get a greater say at the World Bank.
The leaders also pledged to continue pumping money into their economies until "a durable recovery is secured".
But there will be no formal announcement that the G20 will replace the G8 until 2011, said the BBC's economics editor Stephanie Flanders.
"The leaders would have liked formally to announce the handover today in Pittsburgh, but the Canadians - who are chairing the G8 next year - kicked up such a fuss that they had to fudge it," she said.
There will now be a G20 meeting on the sidelines of Canada's G8 Summit next June, where most of the economic business of the day will be discussed.
But, formally at least, the economic side of the G8 will live on another year.
'Distrust'
The IMF has 186 member-states. It lends money to countries that are facing problems, but in return economic changes have to be made by those countries.
Currently, China wields 3.7% of IMF votes compared with France's 4.9%, although the Chinese economy is now 50% larger than that of France.
The IMF has been criticised in the past as being a group of developed countries trying to lay down the law to struggling countries, which is why the decision to give growing nations more votes is important.
"If you talk to the Chinese or talk to anyone from emerging markets they say the IMF doesn't have legitimacy and... we don't trust the IMF to come and rescue us in a crisis," Simon Johnson, former chief economist at the IMF, told the BBC.
"They don't trust it because it's US and West Europe-dominated. That's not fair... and the IMF doesn't function properly as a result."
Nobel prize-winning economist Amartya Sen welcomed the change in voting rights, but said that, "on their own, they won't be able to achieve much... It's not just a question of voting rights, but also a question of broadening the dialogue".
FINANCE & ECONOMICS-2
Will tough new G20 measures work?
BBC News
The G20's leaders have moved on a little.
When they last met in London in April they were still on the brink, wondering whether the world might be facing an economic depression.
So they threw everything at the problem. In the Pittsburgh communique they concluded "it worked".
They are not denying that there is more work to do to make the current stirrings of recovery durable. But it does mean they can look a little further into the future.
One leading preoccupation now is preventing future financial crises. To do that, they plan an overhaul of financial regulation, with the aim of discouraging the high levels of lending to borrowers who were liable to default, that was a central feature of the crisis.
Bankers' bonuses are an important element in the reforms. With this issue there's a lot of politics.
Leaders know that many voters are appalled by the amount that some bankers receive, and some want to show they are responsive to those concerns. And if you think the kind of inequality that financial sector pay produces is unethical, you would want politicians to respond.
But there is another, more pragmatic reason for the G20 to take on bankers' pay. It can give them an incentive to take risks, to make a quick but unsustainable profit and then cash in a bonus.
So the G20 plan rules to make that harder to do. They want bonuses to be linked to long-term performance and to enable banks to claw them back in some cases.
There is no plan for general caps on the amount banks can pay out, something that some European governments wanted. The one exception is that the G20 proposals would limit a bank's bonus payments if paying out too much would endanger its financial soundness.
Financial cushion
Will it work? There are plenty of people in finance who are ingenious enough to find ways round many regulations. With bonus rules the motive for making the effort is obvious.
Another key area is the amount banks have to keep in reserve to absorb losses - their capital. The key element is money from shareholders or profits not paid out as dividends to shareholders.
The G20 want to increase the size of the financial cushion that banks have to maintain.
It might make a difference, but it will depend on how much extra capital they have to hold, and that has not been agreed.
Some elements of this plan are likely to be very complex. For example, making these capital requirements more onerous in boom times is a good idea in theory. Why not make banks put a lot more aside in the good times, so they can better weather the storms?
The problem is that it will be difficult to spell out in practical terms.
'Fiendishly difficult'
There's another theme in the communique that could help prevent crises - global economic imbalances. They were partly responsible for the crisis.
Chinese consumers saved and the government built up foreign currency reserves. Much of this money was lent to the US and it enabled American consumers to borrow easily. They did and many got into financial difficulty.
The G20 communique does have an outline plan for some countries to stimulate more spending and less saving. There are no names, but China is the obvious candidate.
There is, however, no real enforcement mechanism beyond an unfavourable assessment from the International Monetary Fund.
The G20's plans do address some real problems that contributed to the crisis.
But a very complex financial world is fiendishly difficult to regulate effectively.
If the G20 countries do all they say they will, it might reduce the risks to the banking system. But it is just not realistic to expect to banish crises for good.
BBC News
The G20's leaders have moved on a little.
When they last met in London in April they were still on the brink, wondering whether the world might be facing an economic depression.
So they threw everything at the problem. In the Pittsburgh communique they concluded "it worked".
They are not denying that there is more work to do to make the current stirrings of recovery durable. But it does mean they can look a little further into the future.
One leading preoccupation now is preventing future financial crises. To do that, they plan an overhaul of financial regulation, with the aim of discouraging the high levels of lending to borrowers who were liable to default, that was a central feature of the crisis.
Bankers' bonuses are an important element in the reforms. With this issue there's a lot of politics.
Leaders know that many voters are appalled by the amount that some bankers receive, and some want to show they are responsive to those concerns. And if you think the kind of inequality that financial sector pay produces is unethical, you would want politicians to respond.
But there is another, more pragmatic reason for the G20 to take on bankers' pay. It can give them an incentive to take risks, to make a quick but unsustainable profit and then cash in a bonus.
So the G20 plan rules to make that harder to do. They want bonuses to be linked to long-term performance and to enable banks to claw them back in some cases.
There is no plan for general caps on the amount banks can pay out, something that some European governments wanted. The one exception is that the G20 proposals would limit a bank's bonus payments if paying out too much would endanger its financial soundness.
Financial cushion
Will it work? There are plenty of people in finance who are ingenious enough to find ways round many regulations. With bonus rules the motive for making the effort is obvious.
Another key area is the amount banks have to keep in reserve to absorb losses - their capital. The key element is money from shareholders or profits not paid out as dividends to shareholders.
The G20 want to increase the size of the financial cushion that banks have to maintain.
It might make a difference, but it will depend on how much extra capital they have to hold, and that has not been agreed.
Some elements of this plan are likely to be very complex. For example, making these capital requirements more onerous in boom times is a good idea in theory. Why not make banks put a lot more aside in the good times, so they can better weather the storms?
The problem is that it will be difficult to spell out in practical terms.
'Fiendishly difficult'
There's another theme in the communique that could help prevent crises - global economic imbalances. They were partly responsible for the crisis.
Chinese consumers saved and the government built up foreign currency reserves. Much of this money was lent to the US and it enabled American consumers to borrow easily. They did and many got into financial difficulty.
The G20 communique does have an outline plan for some countries to stimulate more spending and less saving. There are no names, but China is the obvious candidate.
There is, however, no real enforcement mechanism beyond an unfavourable assessment from the International Monetary Fund.
The G20's plans do address some real problems that contributed to the crisis.
But a very complex financial world is fiendishly difficult to regulate effectively.
If the G20 countries do all they say they will, it might reduce the risks to the banking system. But it is just not realistic to expect to banish crises for good.
GRAMMAR POINT
Borrow and Lend
Can I borrow your book?
¿Puedo pedir prestado tu libro?
Yes, you can borrow my book
Sí, puedes pedir prestado mi libro
Can you lend me your book?
¿Puedes prestarme tu libro?
Yes, I can lend you my book
Sí, puedo prestarte mi libro
Borrow something from somebody
Lend something to somebody
Lend somebody something
Borrow is like take …
• Can I borrow your bicycle? (not… Can I lend your bicycle?)
You borrow something from somebody
• I borrowed a pound from my brother (not … I borrowed my brother a pound)
Lend is like give. You lend something to somebody, or lend somebody something
• I lent my coat to Steve and I never saw it again.
• Lend me your comb for a minute (not … borrow me your …)
Can I borrow your book?
¿Puedo pedir prestado tu libro?
Yes, you can borrow my book
Sí, puedes pedir prestado mi libro
Can you lend me your book?
¿Puedes prestarme tu libro?
Yes, I can lend you my book
Sí, puedo prestarte mi libro
Borrow something from somebody
Lend something to somebody
Lend somebody something
Borrow is like take …
• Can I borrow your bicycle? (not… Can I lend your bicycle?)
You borrow something from somebody
• I borrowed a pound from my brother (not … I borrowed my brother a pound)
Lend is like give. You lend something to somebody, or lend somebody something
• I lent my coat to Steve and I never saw it again.
• Lend me your comb for a minute (not … borrow me your …)
FAMOUS QUOTATIONS
Getting old …
“For the first half of your life, people tell you what you should do; for the second half, they tell you what you should have done.”
Richard Needham
“For the first half of your life, people tell you what you should do; for the second half, they tell you what you should have done.”
Richard Needham
martes, 1 de septiembre de 2009
CURRENT AFFAIRS
Lockerbie bomber returns to Libya
The Lockerbie bomber has left Scotland on board a plane bound for Libya after being freed from prison on compassionate grounds.
Abdelbaset Ali al-Megrahi, 57, was jailed in 2001 for the atrocity which claimed 270 lives in 1988.
The decision to release Megrahi, who has terminal prostate cancer, was made by the Scottish Government.
The White House said it "deeply regretted" the decision and some of the US victims' families reacted angrily.
A police convoy left Greenock Prison, where Megrahi was serving his sentence, more than an hour after the announcement of his release was made.
He was taken to Glasgow Airport to board the Afriqiyah Airways Airbus plane bound for Tripoli, which took off shortly before 1530 BST.
The government said it had consulted widely before Scottish Justice Secretary Kenny MacAskill made his decision on applications for Megrahi's compassionate release or his transfer to a Libyan jail.
He told a media conference on Thursday that he had rejected the application for a prisoner transfer. However, after taking medical advice it was expected that three months was a "reasonable estimate" of the time Megrahi had left to live. He ruled out the option of the Libyan being allowed to live in Scotland on security grounds.
And Mr MacAskill stressed that he accepted the conviction and sentence which had been handed to Megrahi.
"Mr al-Megrahi did not show his victims any comfort or compassion. They were not allowed to return to the bosom of their families to see out their lives, let alone their dying days. No compassion was shown by him to them," he said. "But that alone is not a reason for us to deny compassion to him and his family in his final days."
Mr MacAskill continued: "Our justice system demands that judgement be imposed, but compassion be available. "For these reasons and these reasons alone, it is my decision that Mr Mr Abdelbaset Ali Mohmed Al-Megrahi, convicted in 2001 for the Lockerbie bombing, now terminally ill with prostate cancer, be released on compassionate grounds and be allowed to return to Libya to die."
Mr MacAskill had been under intense pressure from the US government to keep Megrahi behind bars, with US Secretary of State Hillary Clinton saying his release would be "absolutely wrong".
"Compassion and mercy are about upholding the beliefs the we seek to live by, remaining true to our values as a people - no matter the severity of the provocation or the atrocity perpetrated," he added.
Some 189 Americans were among those who died in the airliner explosion.
Reacting to the decision, White House press secretary Robert Gibbs said in a statement: "The United States deeply regrets the decision by the Scottish Executive to release Abdel Basset Mohamed al-Megrahi.
"As we have expressed repeatedly to officials of the government of the United Kingdom and to Scottish authorities, we continue to believe that Megrahi should serve out his sentence in Scotland."
The families of American victims of the Lockerbie bombing reacted angrily to the news.
Kara Weipz, of Mt Laurel, New Jersey, who lost her 20-year-old brother Richard Monetti, said: "I don't understand how the Scots can show compassion. It is an utter insult and utterly disgusting.
"It is horrible. I don't show compassion for someone who showed no remorse."
New York state resident Paul Halsch, whose 31-year-old wife was killed, said of Mr MacAskill's decision: "I'm totally against it. He murdered 270 people.
Megrahi was convicted of murder in January 2001 at a trial held under Scottish law in the Netherlands.
A first appeal against that verdict was rejected the following year.
However, in 2007 the Scottish Criminal Cases Review Commission granted him a second appeal.
It subsequently emerged he was suffering from terminal cancer but a bid to have him granted bail was refused.
His second appeal got under way this year but shortly afterwards applications were made for both his transfer to a Libyan jail and release on compassionate grounds.
Reaction: Lockerbie bomber set free
The release on compassionate grounds of the Libyan man convicted of the 1988 Lockerbie bombing has divided opinion on both sides of the Atlantic.
Abdelbaset Ali al-Megrahi, who was serving life in prison for murdering 270 people when Pan Am flight 103 exploded in 1988, was freed by Scottish Justice Secretary Kenny MacAskill because he has terminal prostate cancer.
KARA WEIPZ, SISTER OF VICTIM
Ms Weipz, from Mount Laurel, New Jersey, lost her student brother Rick, 20, in the atrocity, and condemned the decision to release Megrahi.She said: "I don't know how you show compassion to someone who has shown no remorse for what he has done and as Mr MacAskill praised the justice system and the investigation and the trial, how do you then show this person compassion? It's just utterly despicable. "I think he should have died in prison. Why should he be returned to Libya? That's not what we were promised. We were always told he would serve out his full sentence in Scotland.
DAVID CAMERON, CONSERVATIVE LEADER
The Tory leader said he believed the decision to release Megrahi was the result of "some completely nonsensical thinking". "This man was convicted of murdering 270 people, he showed no compassion to them, they weren't allowed to go home and die with their relatives in their own bed and I think this is a very bad decision," he added.
IAIN GRAY, SCOTTISH LABOUR LEADER
Mr Gray said, if he was first minister of Scotland, Megrahi would not be going home. "He was convicted of the worst terrorist atrocity in our history, the mass murder of 270 people," said Mr Gray. "While one can have sympathy for the family of a gravely ill prisoner, on balance, our duty is to honour and respect the victims of Lockerbie and have compassion for them. The SNP's handling of this case has let down Scotland."
TAM DALYELL, FORMER LABOUR MP
Mr Dalyell, a former father of the House of Commons, has consistently claimed Megrahi is innocent. He said: "Mr MacAskill, the Scottish justice minister, has arrived at the right decision on compassionate grounds. "I do not accept his endorsement of the guilt of Mr Megrahi, whom I continue to believe had nothing whatsoever to do with the crime of Lockerbie."
REV IAN GALLOWAY, CHURCH OF SCOTLAND
Mr Galloway said the decision "sent a message to the world about what it is to be Scottish", and predicted it would be a "defining moment for all of us".
He said: "We are defined as a nation by how we treat those who have chosen to hurt us. Do we choose mercy even when they did not chose mercy? "This was not about whether one man was guilty or innocent. Nor is it about whether he had a right to mercy but whether we as a nation, despite the continuing pain of many, are willing to be merciful. "I understand the deep anger and grief that still grips the souls of the victims' families and I respect their views, but to them, I would say justice is not lost in acting in mercy. Instead our deepest humanity is expressed for the better. To choose mercy is the tough choice and today our nation met that challenge."
JIM SWIRE, FATHER OF VICTIM
Mr Swire's daughter Flora was killed in the bombing of Pan Am Flight 103. He has always believed Megrahi was not involved, and said he was "delighted" the Libyan had been set free. "I think the whole process was a political stitch up from start to finish, which is something that needs to be gotten to the bottom of. Iran's involvement has never been properly laid out," he said. "'I'd be astonished, but delighted, if we ever get to the bottom of the political implications behind the bombing and who carried it out."
FRANK DUGGAN, PRESIDENT OF VICTIMS OF PAN AM 103
Mr Duggan, president of a group which represents the families of American victims of the bombing, said: "My understanding is that the man [Megrahi] really is within three months of dying, which is one of the issues we wanted cleared up. At the same time, we have always maintained he should remain in prison in Scotland and die there if it comes to that. "I understand, though, the Libyan government has given assurances there will be no celebratory reactions on the part of the Libyans when Megrahi gets back. We were all afraid this guy would go back to a hero's welcome."
OLIVER MILES, FORMER UK AMBASSADOR TO LIBYA
Mr Miles said he did not believe the decision would have a "greater wider significance" to UK-Libyan relations. "It removes an irritant, but it wasn't a great irritant, I don't think it is going to give us lots of lovely new business and I don't think the problem as it stood was stopping us getting lots of lovely new business," he said. "If he died in prison, that would be a very serious matter. The process of normalisation has been going since the mid-1990s. It is a long, long process and this is just one part of it." Referring to the US government, which had been pressuring the Scottish Government not to release Megrahi, Mr Miles added: "I am dismayed to see them behaving like this."
TAVISH SCOTT, SCOTTISH LIB DEM LEADER
Mr Scott said: "The real lesson of this shambles for the SNP is that government is about responsibility, not publicity. We've endured a simply dreadful two weeks as Kenny MacAskill dithered over this big decision while the SNP spin machine was in overdrive. "I feel sorry for the victims' families who have been put through this charade. They are unlikely to hear the truth of the wheeling and dealing that has gone on. Many also would have wanted to see the Megrahi appeal run its course."
The Lockerbie bomber has left Scotland on board a plane bound for Libya after being freed from prison on compassionate grounds.
Abdelbaset Ali al-Megrahi, 57, was jailed in 2001 for the atrocity which claimed 270 lives in 1988.
The decision to release Megrahi, who has terminal prostate cancer, was made by the Scottish Government.
The White House said it "deeply regretted" the decision and some of the US victims' families reacted angrily.
A police convoy left Greenock Prison, where Megrahi was serving his sentence, more than an hour after the announcement of his release was made.
He was taken to Glasgow Airport to board the Afriqiyah Airways Airbus plane bound for Tripoli, which took off shortly before 1530 BST.
The government said it had consulted widely before Scottish Justice Secretary Kenny MacAskill made his decision on applications for Megrahi's compassionate release or his transfer to a Libyan jail.
He told a media conference on Thursday that he had rejected the application for a prisoner transfer. However, after taking medical advice it was expected that three months was a "reasonable estimate" of the time Megrahi had left to live. He ruled out the option of the Libyan being allowed to live in Scotland on security grounds.
And Mr MacAskill stressed that he accepted the conviction and sentence which had been handed to Megrahi.
"Mr al-Megrahi did not show his victims any comfort or compassion. They were not allowed to return to the bosom of their families to see out their lives, let alone their dying days. No compassion was shown by him to them," he said. "But that alone is not a reason for us to deny compassion to him and his family in his final days."
Mr MacAskill continued: "Our justice system demands that judgement be imposed, but compassion be available. "For these reasons and these reasons alone, it is my decision that Mr Mr Abdelbaset Ali Mohmed Al-Megrahi, convicted in 2001 for the Lockerbie bombing, now terminally ill with prostate cancer, be released on compassionate grounds and be allowed to return to Libya to die."
Mr MacAskill had been under intense pressure from the US government to keep Megrahi behind bars, with US Secretary of State Hillary Clinton saying his release would be "absolutely wrong".
"Compassion and mercy are about upholding the beliefs the we seek to live by, remaining true to our values as a people - no matter the severity of the provocation or the atrocity perpetrated," he added.
Some 189 Americans were among those who died in the airliner explosion.
Reacting to the decision, White House press secretary Robert Gibbs said in a statement: "The United States deeply regrets the decision by the Scottish Executive to release Abdel Basset Mohamed al-Megrahi.
"As we have expressed repeatedly to officials of the government of the United Kingdom and to Scottish authorities, we continue to believe that Megrahi should serve out his sentence in Scotland."
The families of American victims of the Lockerbie bombing reacted angrily to the news.
Kara Weipz, of Mt Laurel, New Jersey, who lost her 20-year-old brother Richard Monetti, said: "I don't understand how the Scots can show compassion. It is an utter insult and utterly disgusting.
"It is horrible. I don't show compassion for someone who showed no remorse."
New York state resident Paul Halsch, whose 31-year-old wife was killed, said of Mr MacAskill's decision: "I'm totally against it. He murdered 270 people.
Megrahi was convicted of murder in January 2001 at a trial held under Scottish law in the Netherlands.
A first appeal against that verdict was rejected the following year.
However, in 2007 the Scottish Criminal Cases Review Commission granted him a second appeal.
It subsequently emerged he was suffering from terminal cancer but a bid to have him granted bail was refused.
His second appeal got under way this year but shortly afterwards applications were made for both his transfer to a Libyan jail and release on compassionate grounds.
Reaction: Lockerbie bomber set free
The release on compassionate grounds of the Libyan man convicted of the 1988 Lockerbie bombing has divided opinion on both sides of the Atlantic.
Abdelbaset Ali al-Megrahi, who was serving life in prison for murdering 270 people when Pan Am flight 103 exploded in 1988, was freed by Scottish Justice Secretary Kenny MacAskill because he has terminal prostate cancer.
KARA WEIPZ, SISTER OF VICTIM
Ms Weipz, from Mount Laurel, New Jersey, lost her student brother Rick, 20, in the atrocity, and condemned the decision to release Megrahi.She said: "I don't know how you show compassion to someone who has shown no remorse for what he has done and as Mr MacAskill praised the justice system and the investigation and the trial, how do you then show this person compassion? It's just utterly despicable. "I think he should have died in prison. Why should he be returned to Libya? That's not what we were promised. We were always told he would serve out his full sentence in Scotland.
DAVID CAMERON, CONSERVATIVE LEADER
The Tory leader said he believed the decision to release Megrahi was the result of "some completely nonsensical thinking". "This man was convicted of murdering 270 people, he showed no compassion to them, they weren't allowed to go home and die with their relatives in their own bed and I think this is a very bad decision," he added.
IAIN GRAY, SCOTTISH LABOUR LEADER
Mr Gray said, if he was first minister of Scotland, Megrahi would not be going home. "He was convicted of the worst terrorist atrocity in our history, the mass murder of 270 people," said Mr Gray. "While one can have sympathy for the family of a gravely ill prisoner, on balance, our duty is to honour and respect the victims of Lockerbie and have compassion for them. The SNP's handling of this case has let down Scotland."
TAM DALYELL, FORMER LABOUR MP
Mr Dalyell, a former father of the House of Commons, has consistently claimed Megrahi is innocent. He said: "Mr MacAskill, the Scottish justice minister, has arrived at the right decision on compassionate grounds. "I do not accept his endorsement of the guilt of Mr Megrahi, whom I continue to believe had nothing whatsoever to do with the crime of Lockerbie."
REV IAN GALLOWAY, CHURCH OF SCOTLAND
Mr Galloway said the decision "sent a message to the world about what it is to be Scottish", and predicted it would be a "defining moment for all of us".
He said: "We are defined as a nation by how we treat those who have chosen to hurt us. Do we choose mercy even when they did not chose mercy? "This was not about whether one man was guilty or innocent. Nor is it about whether he had a right to mercy but whether we as a nation, despite the continuing pain of many, are willing to be merciful. "I understand the deep anger and grief that still grips the souls of the victims' families and I respect their views, but to them, I would say justice is not lost in acting in mercy. Instead our deepest humanity is expressed for the better. To choose mercy is the tough choice and today our nation met that challenge."
JIM SWIRE, FATHER OF VICTIM
Mr Swire's daughter Flora was killed in the bombing of Pan Am Flight 103. He has always believed Megrahi was not involved, and said he was "delighted" the Libyan had been set free. "I think the whole process was a political stitch up from start to finish, which is something that needs to be gotten to the bottom of. Iran's involvement has never been properly laid out," he said. "'I'd be astonished, but delighted, if we ever get to the bottom of the political implications behind the bombing and who carried it out."
FRANK DUGGAN, PRESIDENT OF VICTIMS OF PAN AM 103
Mr Duggan, president of a group which represents the families of American victims of the bombing, said: "My understanding is that the man [Megrahi] really is within three months of dying, which is one of the issues we wanted cleared up. At the same time, we have always maintained he should remain in prison in Scotland and die there if it comes to that. "I understand, though, the Libyan government has given assurances there will be no celebratory reactions on the part of the Libyans when Megrahi gets back. We were all afraid this guy would go back to a hero's welcome."
OLIVER MILES, FORMER UK AMBASSADOR TO LIBYA
Mr Miles said he did not believe the decision would have a "greater wider significance" to UK-Libyan relations. "It removes an irritant, but it wasn't a great irritant, I don't think it is going to give us lots of lovely new business and I don't think the problem as it stood was stopping us getting lots of lovely new business," he said. "If he died in prison, that would be a very serious matter. The process of normalisation has been going since the mid-1990s. It is a long, long process and this is just one part of it." Referring to the US government, which had been pressuring the Scottish Government not to release Megrahi, Mr Miles added: "I am dismayed to see them behaving like this."
TAVISH SCOTT, SCOTTISH LIB DEM LEADER
Mr Scott said: "The real lesson of this shambles for the SNP is that government is about responsibility, not publicity. We've endured a simply dreadful two weeks as Kenny MacAskill dithered over this big decision while the SNP spin machine was in overdrive. "I feel sorry for the victims' families who have been put through this charade. They are unlikely to hear the truth of the wheeling and dealing that has gone on. Many also would have wanted to see the Megrahi appeal run its course."
FINANCE & ECONOMICS
FORBES MAGAZINE August 2009
Wall Street
International Invasion
Once merger activity resumes in the U.S. banking sector, look for Spanish and Canadian banks to lead the way.
Twenty months into the recession in the U.S., merger activity in the banking sector seems to be grinding to a halt. But don't tell that to the Spaniards or Canadians.
According to data provided by SNL Financial, of the 14 foreign purchases of U.S. banks announced since 2007, 10 of them have been by Spanish and Canadian institutions.
Last month, Spain's Banco Sabadell agreed to buy Miami-based Mellon United National Bank from Bank of New York Mellon for at least $142 million. In March, Banco Santander completed its purchase of the northeastern bank Sovereign Bancorp--the 75% it didn't already own. Caja Madrid took an 83% stake in City National Bank of Florida in November 2008. BBVA, which took over Alabama-based Compass Bancshares in 2007, is probably still looking to expand its franchise in the U.S., analysts say.
Canadian banks have also been on a buying spree in the U.S., the most recent purchases being the 2008 acquisitions of New Jersey-based Commerce Bancorp by Toronto-Dominion Bank and Alabama National BanCorporation by Royal Bank of Canada.
Don't be surprised if the trend continues once the recovery gets underway. Thanks to its proximity as a neighbor, the U.S. provides a natural expansion market for Canadian firms, and a booming Latino population in the Southeast could give Spanish banks a linguistic leg-up on the competition.
"The U.S. is where our primary focus would be," for geographical reasons, says TD Bank President and Chief Executive W. Edmund Clark. But he warns: "You have to be careful that you don't get enraptured with acquisitions as a method of growth."
One reason Canadian and Spanish banks have succeeded in moving into the U.S. in recent years is that they haven't put too much pressure on their U.S. subsidiaries to grow, says Gerard Cassidy, a banking analyst with RBC Capital Markets, so they weren't overextended when the financial crisis hit. Spain's financial regulators took the smart move nearly a decade ago of requiring banks to boost their loan-loss reserves. Canadian banks have also weathered the financial crisis relatively unscathed, due in part to their high capital ratios.
To be sure, each takeover is a unique situation. Banco Santander, for example, essentially came to Sovereign's rescue because the latter was hemorrhaging money over its exposure to mortgage delinquencies. But generally speaking, they've found that for all its recessionary flaws, the U.S. is still a big, rich country with plenty of M&A potential.
"What these banks want is market share," says Scott Valentin, an equity research analyst at FBR Capital Markets in Virginia. "It gives them kind of a springboard to expand."
Moreover, these banks typically don't have the toxic asset problems that afflict their American counterparts. And because they can't tap into the Troubled Asset Relief Program-the government's bailout kitty for U.S. banks-they're also not tied down by its restrictions, including executive compensation limits and dividend payments to Uncle Sam.
Although some M&A activity is trickling through the system now, there will undoubtedly be delays in deal making while the economy gets back on its feet. Lawmakers on Capitol Hill are drafting substantive revisions for the financial regulatory system. Bankers are still suspicious about what lurks on their competitors' balance sheets. ("No banker that I know of has been willing to buy somebody else's credit problems," says Andrew Senchak, vice chairman and president of Keefe, Bruyette & Woods.) And even some of those vaunted Spanish banks (BBVA and Santander) are smarting from the Madoff scandal.
But several analysts also say that M&A should be back strongly by 2011 or 2012, once the economy has had time to recover. "I could see the buyers start looking very aggressively at franchises that would be complementary to their existing businesses," predicts RBC's Cassidy.
Potential acquisition targets? Look for wounded banks with large customer bases that could fit nicely into a foreign firm's portfolio. Among the likely candidates are Alabama's Colonial BancGroup and Regions Financial, Atlanta-based Suntrust, Texas' Guaranty Financial Group, and Fifth Third Bancorp and KeyCorp, both in Ohio.
The Sunbelt, where there's an oversupply of banks, is a region foreign firms will likely be eying closely. Notably, BBVA and Caja Madrid have focused their recent merger activity on the Southeast.
"I think there's going to be some very attractive banks that are going to become available in that footprint that are going to have multiple bids for their customer bases," says Terry Moore, head of Accenture's North American banking practice. Spanish and Canadian firms make a compelling case as potential acquirers, he says, because they have strong capital positions, they're efficient and they're good at attracting new customers.
According to a recent Accenture report, the banking landscape within the next three years will be organized around retail and commercial banks at the regional level, with a focus on pulling in customers-which Spanish banks are known for doing particularly well-rather than pushing out enticing products.
"I think they have a few things to teach the U.S. banks that could change the competitive landscape in the U.S.," says Moore.
Wall Street
International Invasion
Once merger activity resumes in the U.S. banking sector, look for Spanish and Canadian banks to lead the way.
Twenty months into the recession in the U.S., merger activity in the banking sector seems to be grinding to a halt. But don't tell that to the Spaniards or Canadians.
According to data provided by SNL Financial, of the 14 foreign purchases of U.S. banks announced since 2007, 10 of them have been by Spanish and Canadian institutions.
Last month, Spain's Banco Sabadell agreed to buy Miami-based Mellon United National Bank from Bank of New York Mellon for at least $142 million. In March, Banco Santander completed its purchase of the northeastern bank Sovereign Bancorp--the 75% it didn't already own. Caja Madrid took an 83% stake in City National Bank of Florida in November 2008. BBVA, which took over Alabama-based Compass Bancshares in 2007, is probably still looking to expand its franchise in the U.S., analysts say.
Canadian banks have also been on a buying spree in the U.S., the most recent purchases being the 2008 acquisitions of New Jersey-based Commerce Bancorp by Toronto-Dominion Bank and Alabama National BanCorporation by Royal Bank of Canada.
Don't be surprised if the trend continues once the recovery gets underway. Thanks to its proximity as a neighbor, the U.S. provides a natural expansion market for Canadian firms, and a booming Latino population in the Southeast could give Spanish banks a linguistic leg-up on the competition.
"The U.S. is where our primary focus would be," for geographical reasons, says TD Bank President and Chief Executive W. Edmund Clark. But he warns: "You have to be careful that you don't get enraptured with acquisitions as a method of growth."
One reason Canadian and Spanish banks have succeeded in moving into the U.S. in recent years is that they haven't put too much pressure on their U.S. subsidiaries to grow, says Gerard Cassidy, a banking analyst with RBC Capital Markets, so they weren't overextended when the financial crisis hit. Spain's financial regulators took the smart move nearly a decade ago of requiring banks to boost their loan-loss reserves. Canadian banks have also weathered the financial crisis relatively unscathed, due in part to their high capital ratios.
To be sure, each takeover is a unique situation. Banco Santander, for example, essentially came to Sovereign's rescue because the latter was hemorrhaging money over its exposure to mortgage delinquencies. But generally speaking, they've found that for all its recessionary flaws, the U.S. is still a big, rich country with plenty of M&A potential.
"What these banks want is market share," says Scott Valentin, an equity research analyst at FBR Capital Markets in Virginia. "It gives them kind of a springboard to expand."
Moreover, these banks typically don't have the toxic asset problems that afflict their American counterparts. And because they can't tap into the Troubled Asset Relief Program-the government's bailout kitty for U.S. banks-they're also not tied down by its restrictions, including executive compensation limits and dividend payments to Uncle Sam.
Although some M&A activity is trickling through the system now, there will undoubtedly be delays in deal making while the economy gets back on its feet. Lawmakers on Capitol Hill are drafting substantive revisions for the financial regulatory system. Bankers are still suspicious about what lurks on their competitors' balance sheets. ("No banker that I know of has been willing to buy somebody else's credit problems," says Andrew Senchak, vice chairman and president of Keefe, Bruyette & Woods.) And even some of those vaunted Spanish banks (BBVA and Santander) are smarting from the Madoff scandal.
But several analysts also say that M&A should be back strongly by 2011 or 2012, once the economy has had time to recover. "I could see the buyers start looking very aggressively at franchises that would be complementary to their existing businesses," predicts RBC's Cassidy.
Potential acquisition targets? Look for wounded banks with large customer bases that could fit nicely into a foreign firm's portfolio. Among the likely candidates are Alabama's Colonial BancGroup and Regions Financial, Atlanta-based Suntrust, Texas' Guaranty Financial Group, and Fifth Third Bancorp and KeyCorp, both in Ohio.
The Sunbelt, where there's an oversupply of banks, is a region foreign firms will likely be eying closely. Notably, BBVA and Caja Madrid have focused their recent merger activity on the Southeast.
"I think there's going to be some very attractive banks that are going to become available in that footprint that are going to have multiple bids for their customer bases," says Terry Moore, head of Accenture's North American banking practice. Spanish and Canadian firms make a compelling case as potential acquirers, he says, because they have strong capital positions, they're efficient and they're good at attracting new customers.
According to a recent Accenture report, the banking landscape within the next three years will be organized around retail and commercial banks at the regional level, with a focus on pulling in customers-which Spanish banks are known for doing particularly well-rather than pushing out enticing products.
"I think they have a few things to teach the U.S. banks that could change the competitive landscape in the U.S.," says Moore.
GRAMMAR POINT
MORE FALSE FRIENDS …
English- Spanish
disgust- repugnancia
divert- desviar
embarrassed- avergonzado
eventually- finalmente
exit- salida
fabrics- tela, textil
idiom- frase hecha
informal- desenfadado
large- grande
library- biblioteca
mayor- alcalde
notice- aviso
parcel- paquete
parent- madre o padre
Spanish- English
disgusto- annoyance
divertir- enjoy, have a good time
embarazada- pregnant
eventualmente- temporarily, by chance
exito- success
fábrica- factory
idioma- language
informal- irresponsible
largo- long
librería- bookshop
mayor- main, bigger, older
noticia- news
parcela- plot of land
pariente- relative
English- Spanish
disgust- repugnancia
divert- desviar
embarrassed- avergonzado
eventually- finalmente
exit- salida
fabrics- tela, textil
idiom- frase hecha
informal- desenfadado
large- grande
library- biblioteca
mayor- alcalde
notice- aviso
parcel- paquete
parent- madre o padre
Spanish- English
disgusto- annoyance
divertir- enjoy, have a good time
embarazada- pregnant
eventualmente- temporarily, by chance
exito- success
fábrica- factory
idioma- language
informal- irresponsible
largo- long
librería- bookshop
mayor- main, bigger, older
noticia- news
parcela- plot of land
pariente- relative
FAMOUS QUOTATIONS
“USA Today has come out with a new survey – apparently, three out of every four people make up 75% of the population.”
David Letterman
David Letterman
miércoles, 22 de julio de 2009
CURRENT AFFAIRS
Gibraltar visit ignites press debate
The diplomatic implications of the visit by Miguel Angel Moratinos, the first Spanish government minister to visit Gibraltar for 300 years, have been fiercely debated in the Spanish press.
Two Spanish editorials criticised the visit, with one declaring it a "shameful moment in Spanish history". Another paper described as an overreaction the "alarmist" statement by Spain's opposition PP party that the visit represented an insult to the dignity of Spain.
Two Gibraltarian papers expressed opposing reactions to the visit while remaining united in their continued support for UK sovereignty. One commentator hoped that negotiations would mean the start of a new era in relations while another said talks should not take place while the issue of Spain's "take-over" of British territorial waters surrounding Gibraltar remained unresolved.
SPANISH PRESS
EDITORIAL IN EL MUNDO
The photo of Moratinos with [Gibraltar Chief Minister] Peter Caruana and [British Foreign Secretary] David Miliband on the Rock yesterday illustrates the renunciation of a dispute lasting more than three centuries and will go down as a shameful moment in Spain's history. The three smiling leaders shook hands at the summit of the Rock as if Spain were approving its status and had nothing to say about the dishonour of harbouring Europe's last colony.
EDITORIAL IN ABC
Since the signature of the Treaty of Utrecht in 1713 [in which Spain ceded Gibraltar to Great Britain], no representative of Spain had ever taken this risky step, which sends the unequivocal message that the status quo is accepted without the slightest compensation or the prospect of obtaining any. After this visit, it is hard to think how to interpret the complaints about the presence on the Rock of figures from the British Royal Family.
EDITORIAL IN EL PAIS
Talk of a surrender of sovereignty is an exaggeration, as the Popular Party [opposition PP] has done: with or without a visit by a member of the government, Gibraltar will remain on the UN's list of territories awaiting decolonisation, which is the main international legal trump card Spain has. Moreover, the PP's alarmist position does not appear to take into account the fact that the government of [PP former Prime Minister] Jose Maria Aznar made similar diplomatic efforts, on the grounds that his alignment with Tony Blair favoured Spanish interests.
GIBRALTARIAN PRESS
DOMINIQUE SEARLE IN THE CHRONICLE
That Gibraltar is confident in engaging in dialogue and hosting yesterday's tripartite summit is no signal that we have changed our feelings about remaining British or that some 'solution' to the ancient dispute is at hand. But it does suggest that we recognise that [Gibraltar] Chief Minister [Peter Caruana] needs space in which to pursue his policy and efforts to take us forward. Increasingly we shift away from the days of being dominated, even motivated, by the conflict with Spain.
'TALKING POINT' IN PANORAMA
It is a bit of a farce for the Spanish minister who engineered the take-over of our British territorial waters to come to Gibraltar for talks which are meant to be on friendly cooperation ... Unless and until those waters return to their status quo ante there should be no further talks of the tripartite forum - and the meeting held in Gibraltar yesterday is one too many.
The diplomatic implications of the visit by Miguel Angel Moratinos, the first Spanish government minister to visit Gibraltar for 300 years, have been fiercely debated in the Spanish press.
Two Spanish editorials criticised the visit, with one declaring it a "shameful moment in Spanish history". Another paper described as an overreaction the "alarmist" statement by Spain's opposition PP party that the visit represented an insult to the dignity of Spain.
Two Gibraltarian papers expressed opposing reactions to the visit while remaining united in their continued support for UK sovereignty. One commentator hoped that negotiations would mean the start of a new era in relations while another said talks should not take place while the issue of Spain's "take-over" of British territorial waters surrounding Gibraltar remained unresolved.
SPANISH PRESS
EDITORIAL IN EL MUNDO
The photo of Moratinos with [Gibraltar Chief Minister] Peter Caruana and [British Foreign Secretary] David Miliband on the Rock yesterday illustrates the renunciation of a dispute lasting more than three centuries and will go down as a shameful moment in Spain's history. The three smiling leaders shook hands at the summit of the Rock as if Spain were approving its status and had nothing to say about the dishonour of harbouring Europe's last colony.
EDITORIAL IN ABC
Since the signature of the Treaty of Utrecht in 1713 [in which Spain ceded Gibraltar to Great Britain], no representative of Spain had ever taken this risky step, which sends the unequivocal message that the status quo is accepted without the slightest compensation or the prospect of obtaining any. After this visit, it is hard to think how to interpret the complaints about the presence on the Rock of figures from the British Royal Family.
EDITORIAL IN EL PAIS
Talk of a surrender of sovereignty is an exaggeration, as the Popular Party [opposition PP] has done: with or without a visit by a member of the government, Gibraltar will remain on the UN's list of territories awaiting decolonisation, which is the main international legal trump card Spain has. Moreover, the PP's alarmist position does not appear to take into account the fact that the government of [PP former Prime Minister] Jose Maria Aznar made similar diplomatic efforts, on the grounds that his alignment with Tony Blair favoured Spanish interests.
GIBRALTARIAN PRESS
DOMINIQUE SEARLE IN THE CHRONICLE
That Gibraltar is confident in engaging in dialogue and hosting yesterday's tripartite summit is no signal that we have changed our feelings about remaining British or that some 'solution' to the ancient dispute is at hand. But it does suggest that we recognise that [Gibraltar] Chief Minister [Peter Caruana] needs space in which to pursue his policy and efforts to take us forward. Increasingly we shift away from the days of being dominated, even motivated, by the conflict with Spain.
'TALKING POINT' IN PANORAMA
It is a bit of a farce for the Spanish minister who engineered the take-over of our British territorial waters to come to Gibraltar for talks which are meant to be on friendly cooperation ... Unless and until those waters return to their status quo ante there should be no further talks of the tripartite forum - and the meeting held in Gibraltar yesterday is one too many.
FAMOUS QUOTATIONS
“ A bank is a place that will lend you money if you can prove that you don’t need it. ”
Bob Hope
Bob Hope
FINANCE & ECONOMICS
Spain tries to encourage start-ups
Nurturing the youngsters
Jul 16th 2009
From The Economist
Spain’s infant firms need more than a junior stockmarket to help them grow
BESIDES entertaining millions of tiny tots around the world, Pocoyó, an animated cartoon character, this week briefly caught the attention of Spanish investors. Zinkia, the company that produces the programme, became the first firm to list on Spain’s new small-cap exchange, the Mercado Alternativo Bursátil (MAB), created to nurture corporate infants and help more of them reach maturity.
It may seem an odd time to be going public. The market in Europe has been shut for months. But Spain’s smaller firms are desperate for cash. They complain that the banks, which are heavily exposed to the burst property bubble, have become extremely reluctant to lend to them.
Bankers say there is a long line of small companies waiting to list on the MAB—the exchange itself reckons Spain has around 5,000 eligible firms. There are good business ideas out there, but hardly anyone is willing to bankroll them right now, says Pedro Nueno of IESE, a business school. Venture capital is virtually non-existent in Spain. The MAB might bring forth more risk capital by providing investors with a possible exit.
Zinkia shares were peddled mostly to “family offices”, the investment vehicles of wealthy families. Fed up with opaque financial products from banks, they are increasingly keen to invest in growing companies, says Enrique Quemada of ONEtoONE Capital Partners, an investment bank. But these investors are still cautious, not least because of small-cap shares’ lack of liquidity. In any case, Zinkia was too greedy with regard to its valuation. It ended up having to price its shares at 27.5% below the bottom of the indicative price it set for its initial public offering, valuing the company at €40m ($56m), and it had to drop plans for a sale of shares by existing shareholders.
Even if the MAB takes off, financing is not the only thing holding back entrepreneurs. The Spanish are rather risk-averse. “If Bill Gates had lived in Spain, Microsoft would have never existed,” says Xavier Sala-i-Martin, an economist at Columbia University in New York. Many also blame a local culture of “el pelotazo”—seeking a fast buck rather than patiently building a business. Spain’s government is keen to encourage more innovative small companies by offering credit lines. Yet these are too focused on what Mr Nueno calls the “marginal entrepreneur”, or one-person outfits. To foster firms with more chance of becoming a Spanish Microsoft, incentives for venture capital and for investing on the MAB might help.
Increasing state spending on research and development is important, but just throwing money at scientists will not work. There need to be stronger links between businesses and universities. Companies also complain that the country’s education system places too much emphasis on rote learning rather than critical thinking. And the government could cut red tape. It takes 47 days to open a new business in Spain, compared with six days in America, according to the World Bank’s “Doing Business” survey. As many other countries have found, in nurturing infant companies, as with bringing up children, there are no easy answers.
Nurturing the youngsters
Jul 16th 2009
From The Economist
Spain’s infant firms need more than a junior stockmarket to help them grow
BESIDES entertaining millions of tiny tots around the world, Pocoyó, an animated cartoon character, this week briefly caught the attention of Spanish investors. Zinkia, the company that produces the programme, became the first firm to list on Spain’s new small-cap exchange, the Mercado Alternativo Bursátil (MAB), created to nurture corporate infants and help more of them reach maturity.
It may seem an odd time to be going public. The market in Europe has been shut for months. But Spain’s smaller firms are desperate for cash. They complain that the banks, which are heavily exposed to the burst property bubble, have become extremely reluctant to lend to them.
Bankers say there is a long line of small companies waiting to list on the MAB—the exchange itself reckons Spain has around 5,000 eligible firms. There are good business ideas out there, but hardly anyone is willing to bankroll them right now, says Pedro Nueno of IESE, a business school. Venture capital is virtually non-existent in Spain. The MAB might bring forth more risk capital by providing investors with a possible exit.
Zinkia shares were peddled mostly to “family offices”, the investment vehicles of wealthy families. Fed up with opaque financial products from banks, they are increasingly keen to invest in growing companies, says Enrique Quemada of ONEtoONE Capital Partners, an investment bank. But these investors are still cautious, not least because of small-cap shares’ lack of liquidity. In any case, Zinkia was too greedy with regard to its valuation. It ended up having to price its shares at 27.5% below the bottom of the indicative price it set for its initial public offering, valuing the company at €40m ($56m), and it had to drop plans for a sale of shares by existing shareholders.
Even if the MAB takes off, financing is not the only thing holding back entrepreneurs. The Spanish are rather risk-averse. “If Bill Gates had lived in Spain, Microsoft would have never existed,” says Xavier Sala-i-Martin, an economist at Columbia University in New York. Many also blame a local culture of “el pelotazo”—seeking a fast buck rather than patiently building a business. Spain’s government is keen to encourage more innovative small companies by offering credit lines. Yet these are too focused on what Mr Nueno calls the “marginal entrepreneur”, or one-person outfits. To foster firms with more chance of becoming a Spanish Microsoft, incentives for venture capital and for investing on the MAB might help.
Increasing state spending on research and development is important, but just throwing money at scientists will not work. There need to be stronger links between businesses and universities. Companies also complain that the country’s education system places too much emphasis on rote learning rather than critical thinking. And the government could cut red tape. It takes 47 days to open a new business in Spain, compared with six days in America, according to the World Bank’s “Doing Business” survey. As many other countries have found, in nurturing infant companies, as with bringing up children, there are no easy answers.
GRAMMAR POINT
In many English words, the spelling is different from the pronunciation. This is mainly because the pronunciation has changed a good deal over the last few hundred years, while our spelling system has stayed more or less the same.
Silent Letters
The letters in brackets are usually not pronounced.
clim(b), com(b), dum(b)
mus(c)le
han(d)kerchief, san(d)wich, We(d)nesday
champa(g)ne, forei(g)n, si(g)n
bou(gh)t, cau(gh)t, thou(gh)t
dau(gh)ter, hei(gh)t, hi(gh), nei(gh)bour
(h)onest, (h)onour, (h)our
(k)nee, (k)nife, (k)now
ca(l)m, ha(l)f, sa(l)mon, ta(l)k
autum(n), hym(n)
(p)sychiatrist, (p)sychology
cu(p)board,
i(r)on
i(s)land
cas(t)le, lis(t)en, whis(t)le
g(u)ess, g(u)ide, g(u)itar
(w)hole
veg(e)table
bus(i)ness
diff(e)rent
ev(e)ning
om(e)lette
rest(au)rant
Silent Letters
The letters in brackets are usually not pronounced.
clim(b), com(b), dum(b)
mus(c)le
han(d)kerchief, san(d)wich, We(d)nesday
champa(g)ne, forei(g)n, si(g)n
bou(gh)t, cau(gh)t, thou(gh)t
dau(gh)ter, hei(gh)t, hi(gh), nei(gh)bour
(h)onest, (h)onour, (h)our
(k)nee, (k)nife, (k)now
ca(l)m, ha(l)f, sa(l)mon, ta(l)k
autum(n), hym(n)
(p)sychiatrist, (p)sychology
cu(p)board,
i(r)on
i(s)land
cas(t)le, lis(t)en, whis(t)le
g(u)ess, g(u)ide, g(u)itar
(w)hole
veg(e)table
bus(i)ness
diff(e)rent
ev(e)ning
om(e)lette
rest(au)rant
PUZZLE
A man lives on the 20th floor of an apartment building. If it is a rainy day, he gets into the elevator in the morning, goes down to the ground level and goes off to work. In the afternoon when he comes home, he gets into the elevator and goes straight to the 20th floor. However, if it is a sunny day he goes down to the ground floor in the morning, but when he comes home he only goes up to the 10th floor and then walks up 10 flights of stairs. Why does he do this ?
lunes, 1 de junio de 2009
FAMOUS QUOTATIONS
“ I find it rather easy to portray a businessman. Being bland, rather cruel and incompetent comes naturally to me. ”
John Cleese (Monty Python)
John Cleese (Monty Python)
CURRENT AFFAIRS
THE FINAL COUNTDOWN
The clock is ticking away …
What would you do if you were told you had 10 years to live? Or only 10 minutes? Researchers in London put those questions to 500 people and the responses were quite revealing.
Given 10 years, most people said they would find a job they liked, borrow and spend a lot more money and become involved in a steady relationship. But given only 10 minutes to live, the majority said they would have sex, get drunk, pray to God or simply smoke a cigarette. Some said they would commit a crime.
The poll appears to underline one simple reality – that confronted with a deadline, most people would change the way they live. See the full survey results below.
Ten years to live – survey results
1. Totally change my lifestyle
2. Get a job I like
3. Get into overdraft mode and spend spend spend
4. Get a steady relationship
5. Stop worrying about life – and live it
6. Be a nicer person
7. Sell-up and move overseas
8. Stop working
9. Find religion
10. Have lots of parties
Ten minutes to live – survey results
1. Have sex
2. Get drunk
3. Pray to God
4. Have a cigarette
5. Phone a friend /relative
6. Quit the diet
7. Panic
8. Take painkillers
9. Nothing
10. Commit a crime e.g. rob a bank
The clock is ticking away …
What would you do if you were told you had 10 years to live? Or only 10 minutes? Researchers in London put those questions to 500 people and the responses were quite revealing.
Given 10 years, most people said they would find a job they liked, borrow and spend a lot more money and become involved in a steady relationship. But given only 10 minutes to live, the majority said they would have sex, get drunk, pray to God or simply smoke a cigarette. Some said they would commit a crime.
The poll appears to underline one simple reality – that confronted with a deadline, most people would change the way they live. See the full survey results below.
Ten years to live – survey results
1. Totally change my lifestyle
2. Get a job I like
3. Get into overdraft mode and spend spend spend
4. Get a steady relationship
5. Stop worrying about life – and live it
6. Be a nicer person
7. Sell-up and move overseas
8. Stop working
9. Find religion
10. Have lots of parties
Ten minutes to live – survey results
1. Have sex
2. Get drunk
3. Pray to God
4. Have a cigarette
5. Phone a friend /relative
6. Quit the diet
7. Panic
8. Take painkillers
9. Nothing
10. Commit a crime e.g. rob a bank
GRAMMAR POINT
False Friends
English Spanish
Actually- en realidad, en efecto
Anxious- inquieto, nervioso
Argument- discusión,debate
Assist- ayudar,auxiliar
Avocado- aguacate
Career- años de trabajo
Carpet- alfombra
Casual- informal,desenfadado
Conductor- cobrador de autobús
Conservatory- invernadero
Constipated- estreñido
Crime- acto delictivo
Content- satisfied
Discussion- conversación
Spanish English
Actualmente- Nowadays, at present
Ansioso- eager, greedy
Arena- estadio
Argumento- plot,topic,issue
Asistir- attend
Abogado- lawyer
Carrera- University studies
Carpeta- folder, file
Casual- accidental
Conductor- driver
Conservatorio- music academy
Constipado- a cold
Crimen- murder,serious crime
Contento- happy
Discussion- argument
English Spanish
Actually- en realidad, en efecto
Anxious- inquieto, nervioso
Argument- discusión,debate
Assist- ayudar,auxiliar
Avocado- aguacate
Career- años de trabajo
Carpet- alfombra
Casual- informal,desenfadado
Conductor- cobrador de autobús
Conservatory- invernadero
Constipated- estreñido
Crime- acto delictivo
Content- satisfied
Discussion- conversación
Spanish English
Actualmente- Nowadays, at present
Ansioso- eager, greedy
Arena- estadio
Argumento- plot,topic,issue
Asistir- attend
Abogado- lawyer
Carrera- University studies
Carpeta- folder, file
Casual- accidental
Conductor- driver
Conservatorio- music academy
Constipado- a cold
Crimen- murder,serious crime
Contento- happy
Discussion- argument
PUZZLE
Two grandmasters played five chess games each but both of them won three games. How is this possible?
sábado, 2 de mayo de 2009
CURRENT AFFAIRS
Q&A: Advice about swine flu
Cases of swine flu, which has killed people in Mexico, have been confirmed around the world. With experts scrambling to develop a vaccine, there is concern at the potential for a pandemic affecting millions of people.
What is swine flu?
Swine flu is a respiratory disease, caused by influenza type A which infects pigs.
There are many types, and the infection is constantly changing.
Until now it has not normally infected humans, but the latest form clearly does, and can be spread from person to person - probably through coughing and sneezing.
What is new about this type of swine flu?
The World Health Organization has confirmed that at least some of the human cases are a never-before-seen version of the H1N1 strain of influenza type A.
SWINE FLU - THE BASICS
• Symptoms usually similar to seasonal flu - but deaths recorded in Mexico
• It is a new version of the H1N1 strain which caused the 1918 flu pandemic
• Too early to say whether it will lead to a pandemic
• Current treatments do work, but there is no vaccine
• Good personal hygiene, such as washing hands, covering nose when sneezing advised
H1N1 is the same strain which causes seasonal outbreaks of flu in humans on a regular basis.
But this latest version of H1N1 is different: it contains genetic material that is typically found in strains of the virus that affect humans, birds and swine.
Flu viruses have the ability to swap genetic components with each other, and it seems likely that the new version of H1N1 resulted from a mixing of different versions of the virus, which may usually affect different species, in the same animal host.
Pigs provide an excellent 'melting pot' for these viruses to mix and match with each other.
How dangerous is it?
Symptoms of swine flu in humans appear to be similar to those produced by standard, seasonal flu.
These include fever, cough, sore throat, body aches, chills and fatigue.
It is worth remembering that seasonal flu often poses a serious threat to public health: each year it kills 250,000 - 500,000 around the world.
So far, most cases of swine flu around the world appear to be mild, albeit with diarrhoea more common than it is with seasonal flu.
But lives have been lost in Mexico, and a single death - of a Mexican child - has been confirmed in the US.
How worried should people be?
When any new strain of flu emerges that acquires the ability to pass from person to person, it is monitored very closely in case it has the potential to spark a global epidemic, or pandemic.
FLU PANDEMICS
• 1918: The Spanish flu pandemic remains the most devastating outbreak of modern times. Caused by a form of the H1N1 strain of flu, it is estimated that up to 40% of the world's population were infected, and more than 50 million people died, with young adults particularly badly affected
• 1957: Asian flu killed two million people. Caused by a human form of the virus, H2N2, combining with a mutated strain found in wild ducks. The impact of the pandemic was minimised by rapid action by health authorities, who identified the virus, and made vaccine available speedily. The elderly were particularly vulnerable
• 1968: An outbreak first detected in Hong Kong, and caused by a strain known as H3N2, killed up to one million people globally, with those over 65 most likely to die
The World Health Organization has warned that swine flu could potentially trigger a global pandemic, and stress that the situation is serious.
However, experts say it is still too early to accurately assess the situation fully.
Currently, they say the world is closer to a flu pandemic than at any point since 1968 - upgrading the threat from four to five on a six-point scale following a meeting on Wednesday.
This means all governments have to mobilise their pandemic flu plans.
Nobody knows the full potential impact of a pandemic, but experts have warned that it could cost millions of lives worldwide. The Spanish flu pandemic, which began in 1918, and was also caused by an H1N1 strain, killed millions of people.
There is hope that, as humans are often exposed to forms of H1N1 through seasonal flu, our immune systems may have something of a head start in fighting infection.
However, the fact that many of the victims are young does point to something unusual. Normal, seasonal flu tends to affect the elderly disproportionately
Is Mexico different?
The death toll in Mexico - where the virus at present seems to producing much more severe symptoms - suggests there may be unusual factors coming into play there.
Some experts have suggested the possibility that other, unrelated viruses may also be circulating in Mexico, making symptoms worse.
This would be unlikely to come into play in the rest of the world.
Alternatively, people infected in Mexico may have sought treatment at a much later stage than those in other countries.
It may also be the case that the form of the virus circulating in Mexico is subtly different to that elsewhere - although that will only be confirmed by laboratory analysis.
The Mexican authorities have downgraded the official death toll from the virus, ordering a new round of more stringent tests.
Can the virus be contained?
The virus appears already to have started to spread around the world, and most experts believe that, in the era of readily available air travel, containment will be extremely difficult.
The World Health Organization says that restricting flights will have little effect. It argues that screening of passengers is also unlikely to have much impact, as symptoms may not be apparent in many infected people.
Can it be treated?
The US authorities say that two drugs commonly used to treat flu, Tamiflu and Relenza, seem to be effective at treating cases that have occurred there so far. However, the drugs must be administered at an early stage to be effective.
Use of these drugs may also make it less likely that infected people will pass the virus on to others.
The UK Government already has a stockpile of Tamiflu,ordered as a precaution against a pandemic.
However, there is concern that if too many people start taking anti-virals as a precaution, it could raise the risk of the virus developing resistance, reducing the drugs' effectiveness.
What about a vaccine?
It is unclear how effective currently available flu vaccines would be at offering protection against the new strain, as it is genetically distinct from other flu strains.
A new bespoke vaccine is being worked on by scientists in the UK and the US, but it may take months to perfect it, and manufacture enough supplies to meet what could be huge demand.
A vaccine was used to protect humans from a version of swine flu in the US in 1976.
However, it caused serious side effects, including an estimated 500 cases of Guillain-Barré syndrome. There were more deaths from the vaccine than the outbreak.
What should I do to stay safe?
Anyone with flu-like symptoms who might have been in contact with the swine virus - such as those living or travelling in the areas of Mexico that have been affected - should seek medical advice.
But patients are being asked not to go into GP surgeries in order to minimise the risk of spreading the disease to others. Instead, they should stay at home and call their healthcare provider for advice.
Countries around the world have taken varying measures but are mostly stepping up monitoring and issuing advice about travel to Mexico.
In the UK, the Foreign Office is advising against all but essential travel to Mexico.
What measures can I take to prevent infection?
Avoid close contact with people who appear unwell and who have fever and cough.
General infection control practices and good hygiene can help to reduce transmission of all viruses, including the human swine influenza. This includes covering your nose and mouth when coughing or sneezing, using a tissue when possible and disposing of it promptly.
It is also important to wash your hands frequently with soap and water to reduce the spread of the virus from your hands to face or to other people and cleaning hard surfaces like door handles frequently using a normal cleaning product.
If caring for someone with a flu-like illness, a mask may be worn to cover the nose and mouth to reduce the risk of transmission. The UK is looking at increasing its stockpile of masks for healthcare workers for this reason.
In Mexico masks have been handed out to the general public, but experts are sceptical about how useful this is.
May it take some time for a pandemic to strike?
Possibly. The flu virus tends to thrive in cooler conditions, and to struggle in warmer weather.
The initial cases have developed right at the tail end of the winter flu season in the northern hemisphere, so it is possible that the number of infections may only begin to accelerate once the weather turns colder in the autumn.
However, the southern hemisphere is about to enter its winter season and it is possible that the virus will take hold there first.
Is it safe to eat pig meat?
Yes. There is no evidence that swine flu can be transmitted through eating meat from infected animals.
However, it is essential to cook meat properly. A temperature of 70C (158F) would be sure to kill the virus.
Experts are also stressing that this is now a disease which is being passed between people.
The World Organisation for Animal Health said culling pigs, as Egypt has proposed, was therefore "inappropriate" as a measure to stop swine flu spreading.
It added there was no evidence of infection in pigs, nor of humans acquiring infection directly from pigs.
What about bird flu?
The strain of bird flu which has caused scores of human deaths in South East Asia in recent years is a different strain to that responsible for the current outbreak of swine flu.
The latest form of swine flu is a new type of the H1N1 strain, while bird, or avian flu, is H5N1.
Experts fear H5N1 holds the potential to trigger a pandemic because of its ability to mutate rapidly.
However, it has so far remained very much a disease of birds.
Those humans who have been infected have, without exception, worked closely with birds, and cases of human-to-human transmission are extremely rare. There is no suggestion that H5N1 has gained the ability to pass easily from person to person.
Cases of swine flu, which has killed people in Mexico, have been confirmed around the world. With experts scrambling to develop a vaccine, there is concern at the potential for a pandemic affecting millions of people.
What is swine flu?
Swine flu is a respiratory disease, caused by influenza type A which infects pigs.
There are many types, and the infection is constantly changing.
Until now it has not normally infected humans, but the latest form clearly does, and can be spread from person to person - probably through coughing and sneezing.
What is new about this type of swine flu?
The World Health Organization has confirmed that at least some of the human cases are a never-before-seen version of the H1N1 strain of influenza type A.
SWINE FLU - THE BASICS
• Symptoms usually similar to seasonal flu - but deaths recorded in Mexico
• It is a new version of the H1N1 strain which caused the 1918 flu pandemic
• Too early to say whether it will lead to a pandemic
• Current treatments do work, but there is no vaccine
• Good personal hygiene, such as washing hands, covering nose when sneezing advised
H1N1 is the same strain which causes seasonal outbreaks of flu in humans on a regular basis.
But this latest version of H1N1 is different: it contains genetic material that is typically found in strains of the virus that affect humans, birds and swine.
Flu viruses have the ability to swap genetic components with each other, and it seems likely that the new version of H1N1 resulted from a mixing of different versions of the virus, which may usually affect different species, in the same animal host.
Pigs provide an excellent 'melting pot' for these viruses to mix and match with each other.
How dangerous is it?
Symptoms of swine flu in humans appear to be similar to those produced by standard, seasonal flu.
These include fever, cough, sore throat, body aches, chills and fatigue.
It is worth remembering that seasonal flu often poses a serious threat to public health: each year it kills 250,000 - 500,000 around the world.
So far, most cases of swine flu around the world appear to be mild, albeit with diarrhoea more common than it is with seasonal flu.
But lives have been lost in Mexico, and a single death - of a Mexican child - has been confirmed in the US.
How worried should people be?
When any new strain of flu emerges that acquires the ability to pass from person to person, it is monitored very closely in case it has the potential to spark a global epidemic, or pandemic.
FLU PANDEMICS
• 1918: The Spanish flu pandemic remains the most devastating outbreak of modern times. Caused by a form of the H1N1 strain of flu, it is estimated that up to 40% of the world's population were infected, and more than 50 million people died, with young adults particularly badly affected
• 1957: Asian flu killed two million people. Caused by a human form of the virus, H2N2, combining with a mutated strain found in wild ducks. The impact of the pandemic was minimised by rapid action by health authorities, who identified the virus, and made vaccine available speedily. The elderly were particularly vulnerable
• 1968: An outbreak first detected in Hong Kong, and caused by a strain known as H3N2, killed up to one million people globally, with those over 65 most likely to die
The World Health Organization has warned that swine flu could potentially trigger a global pandemic, and stress that the situation is serious.
However, experts say it is still too early to accurately assess the situation fully.
Currently, they say the world is closer to a flu pandemic than at any point since 1968 - upgrading the threat from four to five on a six-point scale following a meeting on Wednesday.
This means all governments have to mobilise their pandemic flu plans.
Nobody knows the full potential impact of a pandemic, but experts have warned that it could cost millions of lives worldwide. The Spanish flu pandemic, which began in 1918, and was also caused by an H1N1 strain, killed millions of people.
There is hope that, as humans are often exposed to forms of H1N1 through seasonal flu, our immune systems may have something of a head start in fighting infection.
However, the fact that many of the victims are young does point to something unusual. Normal, seasonal flu tends to affect the elderly disproportionately
Is Mexico different?
The death toll in Mexico - where the virus at present seems to producing much more severe symptoms - suggests there may be unusual factors coming into play there.
Some experts have suggested the possibility that other, unrelated viruses may also be circulating in Mexico, making symptoms worse.
This would be unlikely to come into play in the rest of the world.
Alternatively, people infected in Mexico may have sought treatment at a much later stage than those in other countries.
It may also be the case that the form of the virus circulating in Mexico is subtly different to that elsewhere - although that will only be confirmed by laboratory analysis.
The Mexican authorities have downgraded the official death toll from the virus, ordering a new round of more stringent tests.
Can the virus be contained?
The virus appears already to have started to spread around the world, and most experts believe that, in the era of readily available air travel, containment will be extremely difficult.
The World Health Organization says that restricting flights will have little effect. It argues that screening of passengers is also unlikely to have much impact, as symptoms may not be apparent in many infected people.
Can it be treated?
The US authorities say that two drugs commonly used to treat flu, Tamiflu and Relenza, seem to be effective at treating cases that have occurred there so far. However, the drugs must be administered at an early stage to be effective.
Use of these drugs may also make it less likely that infected people will pass the virus on to others.
The UK Government already has a stockpile of Tamiflu,ordered as a precaution against a pandemic.
However, there is concern that if too many people start taking anti-virals as a precaution, it could raise the risk of the virus developing resistance, reducing the drugs' effectiveness.
What about a vaccine?
It is unclear how effective currently available flu vaccines would be at offering protection against the new strain, as it is genetically distinct from other flu strains.
A new bespoke vaccine is being worked on by scientists in the UK and the US, but it may take months to perfect it, and manufacture enough supplies to meet what could be huge demand.
A vaccine was used to protect humans from a version of swine flu in the US in 1976.
However, it caused serious side effects, including an estimated 500 cases of Guillain-Barré syndrome. There were more deaths from the vaccine than the outbreak.
What should I do to stay safe?
Anyone with flu-like symptoms who might have been in contact with the swine virus - such as those living or travelling in the areas of Mexico that have been affected - should seek medical advice.
But patients are being asked not to go into GP surgeries in order to minimise the risk of spreading the disease to others. Instead, they should stay at home and call their healthcare provider for advice.
Countries around the world have taken varying measures but are mostly stepping up monitoring and issuing advice about travel to Mexico.
In the UK, the Foreign Office is advising against all but essential travel to Mexico.
What measures can I take to prevent infection?
Avoid close contact with people who appear unwell and who have fever and cough.
General infection control practices and good hygiene can help to reduce transmission of all viruses, including the human swine influenza. This includes covering your nose and mouth when coughing or sneezing, using a tissue when possible and disposing of it promptly.
It is also important to wash your hands frequently with soap and water to reduce the spread of the virus from your hands to face or to other people and cleaning hard surfaces like door handles frequently using a normal cleaning product.
If caring for someone with a flu-like illness, a mask may be worn to cover the nose and mouth to reduce the risk of transmission. The UK is looking at increasing its stockpile of masks for healthcare workers for this reason.
In Mexico masks have been handed out to the general public, but experts are sceptical about how useful this is.
May it take some time for a pandemic to strike?
Possibly. The flu virus tends to thrive in cooler conditions, and to struggle in warmer weather.
The initial cases have developed right at the tail end of the winter flu season in the northern hemisphere, so it is possible that the number of infections may only begin to accelerate once the weather turns colder in the autumn.
However, the southern hemisphere is about to enter its winter season and it is possible that the virus will take hold there first.
Is it safe to eat pig meat?
Yes. There is no evidence that swine flu can be transmitted through eating meat from infected animals.
However, it is essential to cook meat properly. A temperature of 70C (158F) would be sure to kill the virus.
Experts are also stressing that this is now a disease which is being passed between people.
The World Organisation for Animal Health said culling pigs, as Egypt has proposed, was therefore "inappropriate" as a measure to stop swine flu spreading.
It added there was no evidence of infection in pigs, nor of humans acquiring infection directly from pigs.
What about bird flu?
The strain of bird flu which has caused scores of human deaths in South East Asia in recent years is a different strain to that responsible for the current outbreak of swine flu.
The latest form of swine flu is a new type of the H1N1 strain, while bird, or avian flu, is H5N1.
Experts fear H5N1 holds the potential to trigger a pandemic because of its ability to mutate rapidly.
However, it has so far remained very much a disease of birds.
Those humans who have been infected have, without exception, worked closely with birds, and cases of human-to-human transmission are extremely rare. There is no suggestion that H5N1 has gained the ability to pass easily from person to person.
GRAMMAR POINT
VERB TENSE OVERVIEW WITH EXAMPLES
SIMPLE PRESENT
I study English everyday.
Yo estudio inglés cada día.
SIMPLE PAST
Two years ago, I studied English in England.
Hace dos años, yo estudié inglés en Inglaterra.
SIMPLE FUTURE
If you are having problems, I will help you study English.
Si tienes problemas, te ayudaré a estudiar inglés
PRESENT CONTINUOUS
I am studying English now.
Estoy estudiando inglés ahora.
PAST CONTINUOUS
I was studying English when you called yesterday.
Estaba estudiando inglés cuando llamaste ayer.
FUTURE CONTINUOUS
(something will be in progress at a particular moment in the future)
I will be studying English when you arrive tonight.
Estaré estudiando inglés cuando llegues esta noche
PRESENT PERFECT
I have studied English in several different countries.
He estudiado inglés en varios países diferentes.
PAST PERFECT
I had studied a little English before I moved to the U.S.
Había estudiado poco de inglés antes de trasladarme a Estados Unidos.
FUTURE PERFECT
(something will have been done, completed or achieved by a certain time in the future)
I will have studied every tense by the time I finish this course.
Habré estudiado cada frase para cuando termine este curso.
PRESENT PERFECT CONTINUOUS
(focus on activity)
I have been studying English for five years.
He estado estudiando inglés durante cinco años.
PAST PERFECT CONTINUOUS
(emphasize the continuation of an activity)
I had been studying English for five years before I moved to the U.S.
Había estado estudiando inglés durante cinco años antes de trasladarme a Estados Unidos
FUTURE PERFECT CONTINUOUS
(emphasize the continuity of a future achievement)
I will have been studying English for over two hours by the time you arrive.
Habré estado estudiando inglés durante dos horas para cuando tú llegues.
SIMPLE PRESENT
I study English everyday.
Yo estudio inglés cada día.
SIMPLE PAST
Two years ago, I studied English in England.
Hace dos años, yo estudié inglés en Inglaterra.
SIMPLE FUTURE
If you are having problems, I will help you study English.
Si tienes problemas, te ayudaré a estudiar inglés
PRESENT CONTINUOUS
I am studying English now.
Estoy estudiando inglés ahora.
PAST CONTINUOUS
I was studying English when you called yesterday.
Estaba estudiando inglés cuando llamaste ayer.
FUTURE CONTINUOUS
(something will be in progress at a particular moment in the future)
I will be studying English when you arrive tonight.
Estaré estudiando inglés cuando llegues esta noche
PRESENT PERFECT
I have studied English in several different countries.
He estudiado inglés en varios países diferentes.
PAST PERFECT
I had studied a little English before I moved to the U.S.
Había estudiado poco de inglés antes de trasladarme a Estados Unidos.
FUTURE PERFECT
(something will have been done, completed or achieved by a certain time in the future)
I will have studied every tense by the time I finish this course.
Habré estudiado cada frase para cuando termine este curso.
PRESENT PERFECT CONTINUOUS
(focus on activity)
I have been studying English for five years.
He estado estudiando inglés durante cinco años.
PAST PERFECT CONTINUOUS
(emphasize the continuation of an activity)
I had been studying English for five years before I moved to the U.S.
Había estado estudiando inglés durante cinco años antes de trasladarme a Estados Unidos
FUTURE PERFECT CONTINUOUS
(emphasize the continuity of a future achievement)
I will have been studying English for over two hours by the time you arrive.
Habré estado estudiando inglés durante dos horas para cuando tú llegues.
FINANCE & ECONOMICS
Spanish companies in Latin America
A good bet?
Apr 30th 2009 | From The Economist
Investments in Latin America offer protection against Spain’s slowdown
EUROPE was a grim place during the hard economic and political times of the 17th century. But the mood in Latin America was different, as Ruggiero Romano, a historian, has observed. While Europe’s population, consumption and production fell, Spain’s colonies thrived.
Spanish companies that have been doing a lot of business in Latin America hope it will buck the trend this time, too. It is so far proving more resilient to the global financial crisis than Spain, where a decade-long boom has come to a halt. Spanish unemployment has just hit 17%, more than twice the European average. The IMF expects Spain’s GDP to contract by 3% this year and 0.7% in 2010. Economic output in Latin America, by contrast, is expected to shrink less and recover sooner. The region’s institutional strength should shield it from the worst of the crisis, says Alfredo Arahuetes, dean of the Universidad Pontificia Comillas de Madrid.
Telefónica, a Spanish telecoms firm and the biggest investor in the region, says Latin America will be its engine of growth in the next few years. Spanish utilities are also optimistic. “The perception is that Latin American operations are once again becoming a source of strength,” says Sergi Aranda, head of Latin American operations at Gas Natural, a Spanish utility.
This is a turn-up for the books. From Mexico’s “tequila crisis” in 1994 to Argentina’s collapse in 2001, Spanish companies have been on a roller-coaster ride in the region. After nearly two decades of frenzied activity, Spain is now the biggest foreign investor in the region after America. The first wave of serious interest began in 1993, after the establishment of the single European market. Facing increasing competition and the risk of hostile bids from larger rivals in Europe, Spanish firms went to Latin America in search of profits and greater scale.
This coincided with a wave of liberalisation in the region. Spurred on by cultural affinity and a shared language, Spanish firms collectively spent an average of $9.7 billion a year from 1993 to 2000, mostly in Argentina, Brazil and Chile, says Mr Arahuetes. Subsequent crises and some populist policies dampened enthusiasm. Many Spanish companies made big acquisitions in Europe and America to balance their exposure to Latin America. Even so, they continued to invest in Latin America, albeit at a less frenetic pace.
The numbers are eye-popping. Six firms undertook 95% of the investment by Spanish companies in Latin America: Telefónica, Repsol, Santander, BBVA, Endesa and Iberdrola, according to a study by Enrique Alberola, a senior economist at the Bank of Spain. Gas Natural and Union Fenosa also made big investments. The cumulative gross investment by the top five companies was $170 billion. All this generated $28.9 billion of operating profit in 2008. For the six biggest Spanish investors, Latin America accounted for a good chunk (16-51%) of their profits.
Telefónica has made the biggest bet, spending a total of $100 billion. Analysts believe Latin American assets account for about a third of its $147 billion enterprise value, including debt. Even taking into account the dividends and management fees repatriated over the years, Telefónica’s Latin American investments are worth just 60% of their original cost. But telecoms valuations have come down across the board. And Telefónica’s performance in Latin America has markedly improved in the past six quarters, notes Jonathan Dann, an analyst at JPMorgan. It has gained or held market share in all big markets except Colombia. Investors appear to back its strategy: its shares have outperformed those of its rivals in the past ten years, and since the credit crunch hit in August 2007.
Not all investments have the same potential. Repsol learnt this the hard way when it bought YPF, formerly Argentina’s state-owned oil firm, doubling the size of the company overnight. It paid $15 billion in 1999, only to see the country’s economy go into free fall two years later. YPF missed out on the oil-price boom because price controls forced it to sell at below-market rates. Its reserves are dwindling. Repsol sold 15% of YPF last year to a local businessman, with a loan from Repsol itself. Even so, YPF has supplied an average of over $1.3 billion in annual dividends to Repsol since 1999. And Repsol’s Latin American fortunes are turning: three of the world’s five largest oil-and-gas discoveries last year were by Repsol in Brazil, Peru and Bolivia.
Latin America is also important for Santander and BBVA, Spain’s two biggest banks. The region accounted for 43% of Santander’s 2008 operating profit and over half of BBVA’s. Although both banks were burnt by Argentina’s collapse in 2001, BBVA went on to buy out the other shareholders of its Mexican subsidiary in 2004. That bet paid off: the division created $2.8 billion in net income in 2008, against a total investment of $8.35 billion. But the Mexican economy has contracted sharply. A slowdown in Mexican loans in the first three months of the year has hit BBVA’s profits in the region. Even so, Mexico and Brazil still offer greater potential than Spain. Santander has strengthened its presence in Brazil, where it bought Banco Real in the carve-up of ABN AMRO in 2007.
Latin America is not a perfect hedge for Spanish companies. Recent devaluations of some Latin American currencies have dented their profits. But if the region manages to recover quickly from recession, it will provide further vindication of their decision to invest so far from home.
A good bet?
Apr 30th 2009 | From The Economist
Investments in Latin America offer protection against Spain’s slowdown
EUROPE was a grim place during the hard economic and political times of the 17th century. But the mood in Latin America was different, as Ruggiero Romano, a historian, has observed. While Europe’s population, consumption and production fell, Spain’s colonies thrived.
Spanish companies that have been doing a lot of business in Latin America hope it will buck the trend this time, too. It is so far proving more resilient to the global financial crisis than Spain, where a decade-long boom has come to a halt. Spanish unemployment has just hit 17%, more than twice the European average. The IMF expects Spain’s GDP to contract by 3% this year and 0.7% in 2010. Economic output in Latin America, by contrast, is expected to shrink less and recover sooner. The region’s institutional strength should shield it from the worst of the crisis, says Alfredo Arahuetes, dean of the Universidad Pontificia Comillas de Madrid.
Telefónica, a Spanish telecoms firm and the biggest investor in the region, says Latin America will be its engine of growth in the next few years. Spanish utilities are also optimistic. “The perception is that Latin American operations are once again becoming a source of strength,” says Sergi Aranda, head of Latin American operations at Gas Natural, a Spanish utility.
This is a turn-up for the books. From Mexico’s “tequila crisis” in 1994 to Argentina’s collapse in 2001, Spanish companies have been on a roller-coaster ride in the region. After nearly two decades of frenzied activity, Spain is now the biggest foreign investor in the region after America. The first wave of serious interest began in 1993, after the establishment of the single European market. Facing increasing competition and the risk of hostile bids from larger rivals in Europe, Spanish firms went to Latin America in search of profits and greater scale.
This coincided with a wave of liberalisation in the region. Spurred on by cultural affinity and a shared language, Spanish firms collectively spent an average of $9.7 billion a year from 1993 to 2000, mostly in Argentina, Brazil and Chile, says Mr Arahuetes. Subsequent crises and some populist policies dampened enthusiasm. Many Spanish companies made big acquisitions in Europe and America to balance their exposure to Latin America. Even so, they continued to invest in Latin America, albeit at a less frenetic pace.
The numbers are eye-popping. Six firms undertook 95% of the investment by Spanish companies in Latin America: Telefónica, Repsol, Santander, BBVA, Endesa and Iberdrola, according to a study by Enrique Alberola, a senior economist at the Bank of Spain. Gas Natural and Union Fenosa also made big investments. The cumulative gross investment by the top five companies was $170 billion. All this generated $28.9 billion of operating profit in 2008. For the six biggest Spanish investors, Latin America accounted for a good chunk (16-51%) of their profits.
Telefónica has made the biggest bet, spending a total of $100 billion. Analysts believe Latin American assets account for about a third of its $147 billion enterprise value, including debt. Even taking into account the dividends and management fees repatriated over the years, Telefónica’s Latin American investments are worth just 60% of their original cost. But telecoms valuations have come down across the board. And Telefónica’s performance in Latin America has markedly improved in the past six quarters, notes Jonathan Dann, an analyst at JPMorgan. It has gained or held market share in all big markets except Colombia. Investors appear to back its strategy: its shares have outperformed those of its rivals in the past ten years, and since the credit crunch hit in August 2007.
Not all investments have the same potential. Repsol learnt this the hard way when it bought YPF, formerly Argentina’s state-owned oil firm, doubling the size of the company overnight. It paid $15 billion in 1999, only to see the country’s economy go into free fall two years later. YPF missed out on the oil-price boom because price controls forced it to sell at below-market rates. Its reserves are dwindling. Repsol sold 15% of YPF last year to a local businessman, with a loan from Repsol itself. Even so, YPF has supplied an average of over $1.3 billion in annual dividends to Repsol since 1999. And Repsol’s Latin American fortunes are turning: three of the world’s five largest oil-and-gas discoveries last year were by Repsol in Brazil, Peru and Bolivia.
Latin America is also important for Santander and BBVA, Spain’s two biggest banks. The region accounted for 43% of Santander’s 2008 operating profit and over half of BBVA’s. Although both banks were burnt by Argentina’s collapse in 2001, BBVA went on to buy out the other shareholders of its Mexican subsidiary in 2004. That bet paid off: the division created $2.8 billion in net income in 2008, against a total investment of $8.35 billion. But the Mexican economy has contracted sharply. A slowdown in Mexican loans in the first three months of the year has hit BBVA’s profits in the region. Even so, Mexico and Brazil still offer greater potential than Spain. Santander has strengthened its presence in Brazil, where it bought Banco Real in the carve-up of ABN AMRO in 2007.
Latin America is not a perfect hedge for Spanish companies. Recent devaluations of some Latin American currencies have dented their profits. But if the region manages to recover quickly from recession, it will provide further vindication of their decision to invest so far from home.
PUZZLE
A woman had two sons who were born on the same hour of the same day of the same year, but they were not twins. How can this be?
FAMOUS QUOTATIONS
"If you want anything said, ask a man. If you want anything done, ask a woman" (Margaret Thatcher)
jueves, 9 de abril de 2009
FINANCE & ECONOMICS
Spin and substance
Apr 8th 2009 From The Economist
Apr 8th 2009 From The Economist
What the G20 did and did not achieve
IT WAS not Bretton Woods. The G20 meeting in London did not redesign the architecture of the financial system. Nor did it tame the wild beasts of Anglo-Saxon capitalism, as the French and Germans wanted it to. It did, however, overlay a mixed bag of reforms with some good British spin.
The problem the world leaders faced was that they were grappling with subjects that had little resonance with most recession-struck voters. Terms like “counter-cyclical capital” and “macro-prudential regulation” may trip easily off Gordon Brown’s tongue, but do not make tabloid headlines. So the British prime minister had to apply his well-known creative accounting and conjure up, in agreement with his “Gang of 20” colleagues, a boost of $1.1 trillion for the global economy.
It rescued the summit from disaster. But was there any substance to the reforms that the headline-writers shied away from? First, counter-cyclical capital. This is an updated version of Joseph’s biblical injunction to store the harvest in fat years to prepare for the lean ones; banks should build up more capital in booms (when it is easy to raise) in order to prepare for a bust. Good in theory, but in practice, banks will do their utmost to evade it. It will mean, over the cycle, that they will have more capital on average and thus lower profits. Limits on the levels of debt they can carry will have the same effect. These provisions will probably do more to cap bankers’ bonuses than any attempt to control pay though governance codes or explicit regulation. But the real test of contra-cyclicality will only come at the peak of the next boom, and that is years away.
The same is true of macro-prudential regulation, the idea that a group of wise men can focus on systemic risk, rather than get bogged down in the details of individual firms’ finances. In theory, such a council of wisdom would have spotted that the American housing boom was causing banks to become overexposed to the finances of subprime borrowers.
The creation of this global watchdog has required the Financial Stability Forum to be transformed into, wait for it, the Financial Stability Board. The FSF was associated with the unrepresentative G7; the FSB will represent the whole G20. That it shares the initials of the Russian secret service might be an attempt to make it a bit more scary. It needs to be.
Collaborating with the IMF, it is meant to ferret out macroeconomic and financial risks. But if it warns, who will listen? Imagine the scene in Congress in 2015. The economy is booming, but Americans cannot get mortgages because some pen-pusher in Basel says the banks are taking too much risk. The banks would be freed faster than you can say “swing voter”.
Even at the national level, macro-prudential regulation is hard. First, regulators tend to be captured by the industry. Second, the seeds of disaster are sown when all looks well; the economy is booming and banks have healthy profits. It takes an iron will to be contrarian at such times.
How about hedge funds? Regulation and oversight will be extended to those that are “systemically important”, a definition that leaves plenty of leeway. Which funds are systemically important becomes clear only when they fail. If American hedge funds are required to register with the Securities and Exchange Commission, this will hardly cause a mass exodus from Connecticut; British managers have coped with being regulated by the Financial Services Authority. Most funds will be far more concerned about the reactions of their clients, who have been disappointed by negative returns and the inability to withdraw their money, than a G20-inspired crackdown.
Then there is the toxic-asset plan. The G20 communiqué is quite clear: international bodies should aim for “full and transparent disclosure of the impairment of banks’ balance-sheets”. Meanwhile, any asset-purchase scheme, such as America’s Public Private Investment Programme, should transfer risk to taxpayers “at a fair price”.
Hard to square that, however, with the decision of America’s Financial Accounting Standards Board, announced as the G20 met, to give banks more flexibility in valuing assets. If banks can choose between keeping the assets on their balance-sheets, at a value of their choosing, and selling them to governments, written down to a fair price, it is not difficult to imagine which they will pick.
In sum, the G20 regulatory changes call to mind Dr Johnson’s opinion of a manuscript as both good and original. The G20 scheme is both good and timely, but the bits that are timely are not good and those that are good are not timely.
The problem the world leaders faced was that they were grappling with subjects that had little resonance with most recession-struck voters. Terms like “counter-cyclical capital” and “macro-prudential regulation” may trip easily off Gordon Brown’s tongue, but do not make tabloid headlines. So the British prime minister had to apply his well-known creative accounting and conjure up, in agreement with his “Gang of 20” colleagues, a boost of $1.1 trillion for the global economy.
It rescued the summit from disaster. But was there any substance to the reforms that the headline-writers shied away from? First, counter-cyclical capital. This is an updated version of Joseph’s biblical injunction to store the harvest in fat years to prepare for the lean ones; banks should build up more capital in booms (when it is easy to raise) in order to prepare for a bust. Good in theory, but in practice, banks will do their utmost to evade it. It will mean, over the cycle, that they will have more capital on average and thus lower profits. Limits on the levels of debt they can carry will have the same effect. These provisions will probably do more to cap bankers’ bonuses than any attempt to control pay though governance codes or explicit regulation. But the real test of contra-cyclicality will only come at the peak of the next boom, and that is years away.
The same is true of macro-prudential regulation, the idea that a group of wise men can focus on systemic risk, rather than get bogged down in the details of individual firms’ finances. In theory, such a council of wisdom would have spotted that the American housing boom was causing banks to become overexposed to the finances of subprime borrowers.
The creation of this global watchdog has required the Financial Stability Forum to be transformed into, wait for it, the Financial Stability Board. The FSF was associated with the unrepresentative G7; the FSB will represent the whole G20. That it shares the initials of the Russian secret service might be an attempt to make it a bit more scary. It needs to be.
Collaborating with the IMF, it is meant to ferret out macroeconomic and financial risks. But if it warns, who will listen? Imagine the scene in Congress in 2015. The economy is booming, but Americans cannot get mortgages because some pen-pusher in Basel says the banks are taking too much risk. The banks would be freed faster than you can say “swing voter”.
Even at the national level, macro-prudential regulation is hard. First, regulators tend to be captured by the industry. Second, the seeds of disaster are sown when all looks well; the economy is booming and banks have healthy profits. It takes an iron will to be contrarian at such times.
How about hedge funds? Regulation and oversight will be extended to those that are “systemically important”, a definition that leaves plenty of leeway. Which funds are systemically important becomes clear only when they fail. If American hedge funds are required to register with the Securities and Exchange Commission, this will hardly cause a mass exodus from Connecticut; British managers have coped with being regulated by the Financial Services Authority. Most funds will be far more concerned about the reactions of their clients, who have been disappointed by negative returns and the inability to withdraw their money, than a G20-inspired crackdown.
Then there is the toxic-asset plan. The G20 communiqué is quite clear: international bodies should aim for “full and transparent disclosure of the impairment of banks’ balance-sheets”. Meanwhile, any asset-purchase scheme, such as America’s Public Private Investment Programme, should transfer risk to taxpayers “at a fair price”.
Hard to square that, however, with the decision of America’s Financial Accounting Standards Board, announced as the G20 met, to give banks more flexibility in valuing assets. If banks can choose between keeping the assets on their balance-sheets, at a value of their choosing, and selling them to governments, written down to a fair price, it is not difficult to imagine which they will pick.
In sum, the G20 regulatory changes call to mind Dr Johnson’s opinion of a manuscript as both good and original. The G20 scheme is both good and timely, but the bits that are timely are not good and those that are good are not timely.