US is fed up with China: Obama

HONOLULU: President Barack Obama served notice on Sunday that the United States was fed up with China's trade and currency practices as he turned up the heat on America's biggest economic rival.

"Enough's enough," Obama said bluntly at a closing news conference of the Asia-Pacific Economic Cooperation summit where he scored a significant breakthrough in his push to create a pan-Pacific free trade zone and promote green technologies.

Using some of his toughest language yet against China, Obama, a day after face-to-face talks with President Hu Jintao, demanded that China stop "gaming" the international system and create a level playing field for US and other foreign businesses. 

"We're going to continue to be firm that China operate by the same rules as everyone else," Obama told reporters after hosting the 21-nation APEC summit in his native Honolulu. "We don't want them taking advantage of the United States." China shot back that it refused to abide by international economic rules that it had no part in writing. "First we have to know whose rules we are talking about," Pang Sen, a deputy director-general at China's Foreign Ministry said. agencies

"If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that."

Even as Obama issued the veiled threat of further punitive action against China, it was unclear how much of his tough rhetoric was, at least in part, political posturing aimed at economically weary US voters who will decide next November whether to give him a second term.

Obama insisted that China allow its currency to rise faster in value, saying it was being kept artificially low and was

hurting American companies and jobs. He said China, which often presents itself as a developing country, is now "grown up" and should act that way in global economic affairs.

The sharp words between the US and China contrasted with the unified front that Asia-Pacific leaders sought to present with a pledge to bolster their economies and lower trade barriers in an effort to shield against the fallout from Europe's debt crisis.

The members of APEC, which accounts for more than half of the world's economic output, said they had agreed on ways to counter "significant downside risks" to the world economy.  

That followed an appeal by Obama, seeking to reassert US leadership to counter China's growing influence around the Pacific Rim, for a commitment to expand trade opportunities as an antidote to Europe's fiscal woes.

International Monetary Fund chief Christine Lagarde, in Honolulu to consult with APEC leaders, said the euro zone upheaval risked sweeping the world economy into a "downward spiral" that all countries had a stake in resolving the crisis.

TRADE LIBERALIZATION PROMISED

APEC said in a final communique: "We recognize that further trade liberalization is essential to achieving a sustainable global recovery in the aftermath of the global recession of 2008-2009."

The communique also expressed a firm resolve "to support the strong, sustained and balanced growth of the regional and global economy" -- a clear reference to US concerns about a huge trade deficit with China's export-driven economy, fiscal problems in developed nations and the low savings rate in the United States.

In another bow to US pressure, APEC committed to reducing tariffs on environmental goods and services to 5 percent as a way to promote green technology trade, overcoming China's resistance to the idea.

Differences persist among APEC members -- a point hammered home by US-China tensions -- and the question remains how far leaders will be able to go in turning promises into action. Many, Obama included, will face resistance to opening markets further to foreign competition.

Obama's public denunciation of China's policies came as he faces pressure at home, from Republican presidential contenders as well as fellow Democrats, for a tougher line on Beijing. But US leverage is limited, not least because Beijing is America's largest foreign creditor.

Though Obama acknowledged a "slight improvement" in the value of China's yuan, he insisted it was not enough.

The United States has long complained that China keeps its currency artificially weak to give its exporters an advantage. China counters that the yuan should rise only gradually to avoid harming the economy and driving up unemployment, which would hurt global growth.

Hu was quoted by Chinanews.com in Beijing on Sunday as saying a big appreciation in the yuan against the dollar would not help US trade and unemployment problems.

The yuan inched up against the dollar. Dealers said Hu's comments in Honolulu indicated that China had no intention of letting the currency rise faster in the near term.

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Talks on Greek coalition to start soon - Papandreou

(Reuters) - Negotiations to form a Greek coalition government will start soon, Prime Minister George Papandreou said on Saturday, launching a new push to save the nation from bankruptcy and prevent its crisis from sweeping over Europe and beyond.

Papandreou told the Greek president that the nation had to forge a political consensus to prove it wanted to keep the euro, as European leaders try to persuade the outside world that the currency bloc can overcome its huge debt problems.

"In order to create this wider cooperation, we will start the necessary procedures and contacts soon," he told reporters after meeting President Karolos Papoulias.

Hours after surviving a parliamentary confidence vote, Papandreou said Greece had to avoid early elections, calling for a broad-based government to secure a bailout from the euro zone, the main weapon in Europe's battle against the spreading economic crisis.

"My aim is to immediately create a government of cooperation," he told the president in the presence of reporters before they held talks behind closed doors. "A lack of consensus would worry our European partners over our country's will to stay in the euro zone."

Political sources involved in the dealmaking said negotiations are being led behind the scenes by Finance Minister Evangelos Venizelos, who aims to head the new coalition.

FAMOUS FATHER, FAMOUS GRANDFATHER

The sources said Papandreou, a socialist whose father and grandfather were Greek prime ministers, would step aside to make way for Venizelos, the man he beat to his PASOK party's leadership in 2004.

Without saying when he might quit, Papandreou -- who has led

Greece through two years of political, economic and social turmoil -- said he was ready to discuss who should lead the new government which would rule until elections probably early next year.

"The last thing I care about is my post. I don't care even if I am not re-elected. The time has come to make a new effort ... I never thought of politics as a profession," he told parliament before the vote in the early hours of Saturday.

A new coalition is likely to exclude the main opposition party, the conservative New Democracy.

Papandreou said the coalition should aim to ram the 130-billion-euro bailout deal through the assembly, the last financial lifeline for a nation that is due to run out of money in December.

Under heavy domestic and international pressure, the prime minister has backed down on a proposal for a referendum on the euro zone rescue. Greek voters could well have rejected the deal, potentially sinking euro zone leaders' attempts to stop the debt crisis devastating economies such as Italy and Spain.

THINGS MAY TURN UGLY

Greeks, burdened by waves of spending and welfare cuts plus tax rises which have pushed the country into a long recession, expressed disgust at the political wrangling up at parliament.

"I'm sick of politicians in Greece, and feel that things will now turn ugly. If only they could cooperate, everything would be much better," said Tassos Pagonis, a 48-year-old Athens taxi driver. "But will Greece be saved? I'm afraid not. Europeans don't trust us anymore, they will throw us out."

Pagonis expressed a fear widespread in the nation -- that Greece might be forced out of the euro zone to go it alone with a revived national currency. "I hope we don't return to the drachma," he said.

Pensioner Yiannis Vlahos, 83, compared the fates of Greece and Germany, which occupied the country in World War Two.

"When the Germans left we had some hope. They were ruined by World War Two but they worked hard and became the strongest economy. We Greeks haven't learned our lesson, we only steal," he said. "We ourselves hate our beautiful country."

Papandreou's socialist government won with 153 votes in the 300 member parliament, and a rebellion by some dissidents in his PASOK party failed to materialise after he indicated that his term as prime minister was close to an end.

The leaders of France and Germany told Papandreou this week that Greece would not get a cent more of aid if Greece failed to approve the bailout, meaning that the state would run out of money in December.

Newspapers labelled Papandreou's confidence victory as little more than a deal paving the way for a new government without Papandreou. The pro-government Ta Nea ran with "New government now!"

Greece has been racked by torment since soon after Papandreou won power in 2009 and revealed that the real budget deficit was three times bigger than original estimates put out by his conservative predecessor.

International investors took fright, Greece's borrowing costs soared and Papandreou was forced to go cap in hand last year to the only bodies still willing to lend at affordable rates -- the European Union and IMF.

In return they demanded wave after wave of spending cuts, tax rises and pension cuts which provoked widespread protests on the streets on Greek cities, with bloody clashes between demonstrators and riot police in Athens.

FAILING AGAIN

Masamichi Adachi, senior economist at JP Morgan Securities Japan, said the main concern was what would happen when international lenders returned to Athens in the coming months to assess the progress of the austerity plan and "find them failing again."

"This is just pushing away the timing of the real problem. Of course it's welcome that Greece didn't blow up today, but it doesn't solve the problem."

Analysts said Papandreou's victory had been Pyrrhic, and many ordinary Greeks said they were disenchanted with Byzantine political wrangling that was not addressing their basic need for jobs and cash.

Sources said Venizelos has won the backing of leaders of some smaller parties to support a coalition that he would head. The leaders of the far-right LAOS party and another centre-right party indicated after Papandreou's speech that they would cooperate in a new coalition.

In parliament, Venizelos said a new government should rule until next February and then call elections.

Opposition leader Antonis Samaras counted his New Democracy party out of the coalition, saying Papandreou had spurned his call for a national unity government. "Mr Papandreou rejected our proposal. The only solution is elections," he said.

(Additional reporting by Reuters Athens bureau; Writing by David Stamp)

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Anglo American to buy Oppenheimers out of De Beers

(Reuters) - Global miner Anglo American is set to take control of De Beers, buying out South Africa's Oppenheimer family in a $5.1 billion (3.1 billion pound) deal that ends the dynasty's direct links to the diamond business after almost a century.

Anglo has long been eying a deal to increase its 45 percent stake in unlisted De Beers -- which vies with Russia's Alrosa for the title of the world's largest diamond producer -- but Friday's announcement caught the market by surprise and sent the miner's shares up almost 4 percent.

The Oppenheimers have resisted Anglo's approaches for years and held on to their 40 percent stake even through the aftermath of the 2008 crisis which left shareholders forced to inject cash into De Beers as the luxury market tumbled.

It was unclear what prompted the family to change its mind, but the Oppenheimers indicated the decision to agree to Anglo's latest overture had taken into account a number of factors, including the need to diversify their investments.

James Teeger, managing director of E. Oppenheimer & Son, the family holding company, said the decision had been "momentous" and hinged on price -- long a point of difference between Anglo and the South African family.

"After a long deliberation which took many factors into account, one of which obviously is diversification, the family decided to unanimously accept the offer," he said.

Anglo's motivation is a bigger share of De Beers in a booming market, as China and India turn to diamond jewellery even in the face of an uncertain economic outlook. A 10-year supply deal with producing country Botswana in September proved a key catalyst, prompting Chairman John Parker to again approach the Oppenheimer family.

Sources familiar with the negotiations said the talks had been "difficult" for the Oppenheimers, but the time was felt to be right.

"They are tied up in one asset and we are currently in a very volatile environment," said one of the sources. "Anglo, of course, will look to the longer term."

Nicky Oppenheimer, grandson of the dynasty's founder, is currently De Beers chairman, and will remain in place at least until the deal closes in the second half of 2012. The family also owns a direct stake of just over 2 percent in Anglo and has no plans to sell, Teeger said.

The family has yet to decide how it will redeploy the cash, but a "substantial" portion will be invested in Africa.

SPARKLING PRICE?

Anglo American Chief Executive Cynthia Carroll, who said the company had been working on the acquisition "for years," said the long-term fundamentals for the diamond industry had prompted the deal. Improved security of supply, underlined by the agreement with Botswana signed in September, were another factor.

By 2015, China, India and the Gulf could overtake the United States as top diamond consumers, opening a huge market, and one increasingly suited to corporations, instead of the families and individuals whose links once dominated the diamond trade.

"In China, only 15 years ago, there was virtually no culture of the diamond engagement rings," Carroll told reporters. "Today more than half the brides in Beijing and Shanghai receive diamond engagement rings."

De Beers posted a 55 percent jump in first-half earnings in July on the back of record sales and an unprecedented jump in prices, driven by China, India and the United States, still the world's largest consumer of diamond jewellery.

Analysts and investors said the deal was a good one for Anglo at a valuation of around 6 times 2011 EBITDA, which is in line with far smaller, listed diamond producers like Petra Diamonds. Shares in Anglo were up 0.6 percent at 23.41 pounds in late trade, outperforming a flat sector index.

"It looks like they got it at a good price," said Peter Major, analyst at Cadiz Corporate Solutions in Cape Town.

"De Beers doesn't have the control over the market it used to, but it is still the biggest player and it's got a 120-year history in the business."

Founded by British entrepreneur and adventurer Cecil Rhodes in the 19th century, De Beers controls about 40 percent of the world's rough diamond supply.

Analysts at Liberum said they estimated the cash acquisition, which will not require new financing, would be 7.5-8.0 percent EPS accretive for Anglo over the next 3 years.

"We think this deal will be taken positively. Shareholders have been clamouring in recent years for Anglo to either increase its stake in De Beers or to IPO its stake," they said.

Carroll said a listing was not currently on the cards.

She also dismissed speculation the move was linked to a decision by Chile's state-owned copper producer Codelco to exercise an option to buy 49 percent of Anglo's assets in the country's south. Codelco said last month it had secured a $6.75 billion bridging loan to buy the stake.

Anglo American said it had reached a deal with the CHL Group, which represents the Oppenheimer family interest, but added Botswana, which currently holds 15 percent of De Beers, had a pro-rata pre-emption right over the CHL shares, potentially lifting the country's ownership to 25 percent.

Botswana, the world's top diamond producing country, is currently considering its position.

Anglo has been a shareholder in De Beers for over eight decades and has been the company's largest shareholder since De Beers became a private company in 2001.

UBS and Nomura were advisers to Anglo-American on the deal.

(Additional reporting by David Dolan and Marius Bosch in Johannesburg and David Brough in London; Editing by Hans-Juergen Peters and Andrew Callus)

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Reporting by Annika Breidthardt; Editing by Susan Fenton

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(Reuters) - German Chancellor Angela Merkel said on Saturday it would take a decade before the euro zone was in a better position and there was much work left to be done to solve the bloc's sovereign debt crisis.

"(It will) certainly take a decade until we are in a better position again," Merkel said in her weekly podcast. "We have a whole chunk of work ahead of us, I've got to say."

Merkel spoke a day after the euro zone failed to secure new money at a G20 summit from potential investors such as China and Brazil for its efforts to overcome the debt crisis.

Uncertainty about efforts to tackle the crisis persisted on Saturday. Greek Prime Minister George Papandreou, who survived a confidence vote on Friday but is expected to step down, said negotiations to form a coalition government would start soon.

He called for a broad-based government to secure a bailout from the euro zone, the main weapon in Europe's battle against the spreading economic crisis.

Merkel said all of Europe had overspent for years but welcomed that all euro zone members had agreed to a debt brake like Germany's.

"Almost all European countries have spent more over the years than they earned," she said.

(Reporting by Annika Breidthardt; Editing by Susan Fenton)

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Ireland's $17 billion austerity plan to woo investors

(Reuters) - Ireland will target 12.4 billion euros (10 billion pounds) in austerity measures over the next four years, further tightening the screws on its recession-weary people as it seeks to cement its transformation from European basket case to recovery story.

Prime Minister Enda Kenny needs to drastically squeeze the budget deficit if he is to extract Ireland from a humiliating EU-IMF bailout and return to debt markets in 2013.

Some analysts, however, are sceptical Kenny can pull it off, given the global uncertainty and its impact on growth. They believe Ireland will continue to be supported by European partners when the current rescue programme runs out in 2013.

"We are doing well, we are doing our job and ticking the boxes but that is all we can do," said Brian Devine, chief economist at NCB Stockbrokers. "I think the government's growth figures are too optimistic. At the moment I can't see how Ireland can get back into the market."

A worsening growth outlook means the government will have to target austerity measures totalling 3.8 billion euros next year, higher than the 3.6 billion euros initially pledged, with nearly 60 percent of the adjustment weighted on the spending side.

"These cuts are real. One person's cut is another person's public service. we are not making light of this," Finance Minister Noonan told a news conference on Friday.

"We are asking the people to stay with us because we have a clear programme for getting the country out of the difficulty it is in."

Dublin now expects gross domestic product to expand by 1.6 percent next year, compared with its earlier forecast of 2.5 percent previously. Its revision puts it broadly in line with the latest forecast from the IMF of 1.5 percent and the median estimate from 10 economists polled by Reuters of 1.5 percent.

It sees GDP growth averaging around 2.8 percent from 2013 to 2015 compared to 3 percent previously. Ireland needs medium term growth of around 2.5 percent to ensure its debt is sustainable.

But the outlook is finely balanced. The finance ministry has warned a cut in nominal GDP growth of 1 percent in 2012-2015 could see its debt-to-GDP ratio climb to 122 percent in 2013, a level that would likely prevent a return to debt markets.

EYE-POPPING

A property crash and bank sector meltdown tipped Ireland into severe recession and left it with the worst deficit in the industrialised world, jumping to an eye-popping 32 percent of GDP in 2010 due to the cost of rescuing its banks.

As part of an 85 billion euros EU-IMF bailout, Dublin has promised to get its deficit to under 3 percent of GDP, an EU limit, by 2015. It is only midway through an eight-year cycle of austerity running through 2015.

Noonan, whose government was swept to power in March, will present his first crunch budget on December 6.

The government is adamant it will avoid Greek-style debt restructuring. But Noonan said on Friday he would see if there were other ways to cut the Irish debt burden, possibly through getting Europe's rescue fund to take an equity stake in Allied Irish Banks (ALBK.I).

When Ireland agreed its EU-IMF bailout in November 2010 it set out a 15 billion euros adjustment plan for 2011 to 2014. But the worsening global picture, exacerbated by a rapidly unravelling Greek crisis, means Noonan has to squeeze more over a longer period.

For 2013, for example, he is targeting a fiscal adjustment of 3.5 billion euros compared to 3.1 billion euros in the original bailout deal.

So far, Ireland's fiscal plans are on track and despite pushing through nearly 21 billion euros in spending cuts and tax increases, equivalent to more than 13 percent of GDP, there has been no social unrest, in contrast to Athens.

"We don't like the cutbacks but you do get used to them. We don't want to go down the Greek road. The country's long-term reputation is important," said Alan, a 44-year-old father of two.

Ireland's success in so far meeting its fiscal targets, the recapitalisation of its banks' bad debts and its political and social calm have struck a chord with investors.

Irish debt yields have dropped from the record highs hit over the summer and the country is increasingly viewed as a possible recovery story, provided the euro zone's debt crisis doesn't unhinge things.

(Reporting by Carmel Crimmins and Conor Humphries; Editing by Ron Askew)

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US dollar ends cheaper against rupee

MUMBAI: The US dollar ended cheaper against the rupee at Rs 49.18/19 per dollar but the Pound Sterling turned higher at Rs 78.62/64 per pound at the close of the Interbank Foreign Exchange market (Forex) here today.

The Following are the Interbank Forex and RBI rates: (In Rs Per Unit) Unit Interbank RBI Reference US Dollar 49.18/19 US Dollar Rs 49.2508 Pound Sterling 78.62/64 Euro Rs 67.6445 Euro 67.78/80 Japanese Yen (100) 63.01/03.

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Pakistan grants India 'most favoured' trade status

Pakistan's cabinet has unanimously approved the award of "most favoured nation" trading status to India.

Pakistan had previously linked trade liberalisation with India to a resolution of the dispute over Kashmir, over which the nations have fought two wars.

Correspondents say the move is a significant step towards boosting the peace process between the neighbours.

India has already extended most favoured nation status to Pakistan.

The status typically reduces tariffs and increases import quotas.

Bilateral trade is currently put at about $2.75bn (£1.7bn) and the two sides agreed at a recent meeting in Delhi to boost it to $6bn within three years.

Although India granted Pakistan most favoured nation status in 1996, Pakistan says it has suffered from strict Indian customs rules and quality standards.

'National interest' Pakistan Information Minister Firdous Ashiq Awan told a news conference in Islamabad: "Today after an extensive briefing by the commerce secretary, the cabinet unanimously decided to grant India most favoured nation status."

He added: "This will bring economic benefits to us and this decision has been taken in the national interest."

Mr Awan said some ministers had raised objections on the Kashmir issue, but added: "The prime minister reviewed all the objections and took the cabinet into confidence that it will not hurt our national security."

The BBC's M Ilyas Khan in Islamabad says that although India acknowledges the Kashmir dispute, it has insisted the two sides improve interaction in other fields while they search for a mutually acceptable solution.

Analysts say the Pakistani decision has come at a time when the country desperately needs trade concessions from international markets to prevent its economy from sinking further.

India and Pakistan resumed formal peace talks this year after they were broken off in the wake of the militant attacks in Mumbai (Bombay) in 2008.

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Honduras troops join fight against violent crime

The government of Honduras has deployed hundreds of troops in the main cities to combat a wave of criminal violence.

Joint patrols of soldiers and police have been sent into areas dominated by criminal gangs.

Honduras has the world's highest murder rate, according to the UN, with much of the killing linked to drug-trafficking.

On Monday President Porfirio Lobo sacked his top police commanders after four officers accused of murder were released and went into hiding.

The military deployment, dubbed "Operation Lightning", began in the capital Tegucigalpa and the northern city of San Pedro Sula.

Soldiers and counter-insurgency police units set up road blocks while helicopters patrolled overhead.

President Lobo said the aim was to "guarantee the presence of the authorities in the most conflict-ridden areas".

He vowed to "do everything possible within the law to reduce the impunity that makes us all indignant".

Outrage The sacking of the police commanders on Monday followed the release of four officers accused of killing two students.

Their release has caused public outrage in Honduras, which is suffering soaring levels of violent crime.

A recent UN report found the country had the highest rate in the world in 2010, with 82 killings per 100,000 inhabitants - an average of 20 murders a day.

Honduras is a major transit point for cocaine smuggling from South America north through Mexico to the US, and much of the violence is linked to drugs gangs.

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Madras HC judge claims victimization

NEW DELHI/CHENNAI: A serving judge of the Madras high court has claimed to being victimized on caste grounds, accusing his brother judges of trying to put him down and subjecting him to humiliation for taking up litigations in an independent manner.

Justice C S Karnan has petitioned the National Commission for Scheduled Castes and sought an inquiry. While he has not mentioned caste as the reason for alleged prejudice against him, the judge's decision to approach the dalit watchdog has seen the commission view the case as one of caste discrimination.

Sources said NCSC chairman P L Punia has written to Chief Justice of India S H Kapadia urging him to look into the matter. When contacted, Punia refused to dwell on details, saying the aggrieved judge was a dalit and the complaint was being treated with all seriousness.

Justice Karnan, in his three-page letter to NCSC, said his independent way of dealing with petitions had annoyed brother judges.

He claimed colleagues humiliated him by deliberately pointing their shoes at him at a social function and by crushing a name plate carrying his name.

Justice Karnan even alleged that lawyers backed by judges tried to instigate him in the court premises and an investigation of their telephone call records could be carried out to prove their involvement.

When contacted, Justice Karnan told TOI that he was ready for a "public inquiry" to prove his allegations of harassment and discrimination. Justice Karnan, who has been in the eye of a storm over some of his rulings, said he would use the inquiry to disprove allegations against him as well.

In his petition, the judge said, "... at one of the marriage celebrations in Chennai where one of my brother judges, who was seated to the right side of me, crossed over his leg deliberately touching mine and on the second occasion at the Republic Day celebrations, the same judge again seated next to me and slyly removed the name slip which was attached to the arm of my chair with a string and stuck it to the bottom of his right leg where it got crumpled."

Attempts to instigate are repeatedly mentioned by Justice Karnan. "On another public occasion when we brother judges congregated once again for a public celebration, one of the brother judges behind the row of mine kept on shaking my chair repeatedly with the intention to annoy me," he said.

According to Justice Karnan, his refusal to be part of a group or coordinated consultations on cases was not liked by some judges who expected him to conform to the unwritten code. He said the objective behind such behaviour was to "reduce (his) role to subjugation".

His decision not to kowtow to expectations in court proceedings led to his sidelining. He said he had been deprived of participating in (events) in his native district of Cuddalore as special guest while he had also been denied participation in the National Judicial Academy except once when he had just joined the HC.

In a serious charge, the judge said 70 lawyers "encouraged and financed" by a few judges would assemble on the fifth floor of the HC during court hours in an inebriated state and would try to instigate him, and some of them would even gather in the corridor outside his room with the same objective.

Justice Karnan, talking to TOI, referred to canards and allegations against him. He said, "Just because I hail from a humble background, they cannot target me. I rose to this level due to sheer hard work and merit. During a felicitation after my elevation to the high court, lawyers offered me a crown. I have been living up to their expectations. Now, my reputation is in tatters. As a public servant receiving salary from public exchequer, I owe an explanation to people. I am ready for a public inquiry."

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