Idea Kadhafi will step down ‘ridiculous,’ says son 

The charred hand of a pro-Kadhafi fighter is seen as Libyan rebel fighters buried him in a communal grave near the western gate of Ajdabiya.

Libyan rebels rejected an African Union initiative for a truce accepted by Moamer Kadhafi, and said the only solution was the strongman’s ouster, an idea his son called “ridiculous.”

The rebel rejection came after NATO chiefs warned that any deal must be “credible and verifiable,” and as alliance warplanes were again in action against heavy Kadhafi weaponry pounding Ajdabiya and Misrata.

A delegation of leaders mandated by the African Union (AU) to stop the fighting in Libya arrived late Monday in the Algerian capital for two days of talks with President Abdelaziz Bouteflika, APS news agency reported.

“We are working to find a solution to this complex question and we are continuing our efforts to get out of this crisis,” Mauritanian President Mohamed Ould Abdel Aziz was quoted as saying on arrival.

He was accompanied by Congo’s President Denis Sassou Nguesso, AU Commission chairman Jean Ping and Ugandan Foreign Minister Henry Oryem Okello, APS said.

Kadhafi has accepted a proposed “roadmap” calling for an immediate ceasefire, boosted humanitarian aid and dialogue between the two sides, but the insurgents have rejected the plan, saying Kadhafi must go immediately.

US Secretary of State Hillary Clinton also stuck to US demands for Kadhafi to step down and leave Libya as part of a peaceful transition, but declined to comment on the proposed African Union deal before being fully briefed.

She told a news conference in Washington however that “there needs to be a transition that reflects the will of the Libyan people and the departure of Kadhafi from power and from Libya.”

Kadhafi’s son Seif al-Islam admitted that it was time for “new blood” in Libya, but called talk of his father stepping down “ridiculous.”

“The Libyan Guide (Kadhafi) does not want to control everything. He is at an advanced age. We would like to bring a new elite of young people onto the scene to lead the country and direct local affairs,” he told France’s BFM TV.

“We need new blood — that is what we want for the future — but talk of the Guide leaving is truly ridiculous,” he added.

In Benghazi, rebel leader Mustafa Abdul Jalil said the African initiative did not go far enough.

“From the first day the demand of our people has been the ouster of Kadhafi and the fall of his regime,” he said.

“Kadhafi and his sons must leave immediately if they want to be safe… Any initiative that does not include the people’s demand, the popular demand, essential demand, we cannot possibly recognise.”

NATO, meanwhile, said it struck more loyalist targets around Ajdabiya and the besieged port of Misrata on Sunday and Monday, destroying 11 Kadhafi regime tanks and five military vehicles.

The regime warned that any foreign intervention under the pretext of bringing aid into Misrata would be met by “staunch armed resistance,” the official JANA news agency quoted the foreign ministry as saying.

Diplomats in Brussels said on Friday that the EU was gearing up to deploy military assets for a humanitarian mission to evacuate wounded from Misrata and deliver food, water and medicine to the city.

NATO chief Anders Fogh Rasmussen warned that warplanes will keep pounding Libyan forces as long as civilians are at risk.

“I would also like to stress that the guiding principle for us will be how to implement the UN Security Council resolution fully, that is to protect the civilians against any attack,” he said.

Shamsiddin Abdulmolah, a spokesman for the rebels’ Transitional National Council, welcomed the African Union efforts, but demanded Kadhafi’s overthrow.

“The people must be allowed to go into the streets to express their opinion and the soldiers must return to their barracks,” he told AFP.

“If people are free to come out and demonstrate in Tripoli, then that’s it. I imagine all of Libya will be liberated within moments.”

He also demanded the release of hundreds of people missing since the outbreak of the popular uprising and believed to be held by Kadhafi’s forces.

South African President Jacob Zuma said earlier that Tripoli had accepted the African Union plan for a ceasefire.

“We also in this communique are making a call on NATO to cease the bombings to allow and to give a ceasefire a chance,” he said.

The rebels, however, doubted Kadhafi would adhere to a truce.

“The world has seen these offers of ceasefires before and within 15 minutes (Kadhafi) starts shooting again,” Abdulmolah said.

The rebels have said they would negotiate a political transition to democracy with certain senior regime figures, but only on the condition that Kadhafi and his sons leave Libya.

Meanwhile, Libya’s former foreign minister Mussa Kussa, who is in Britain after defecting from Moamer Kadhafi’s regime, told the BBC Monday that the restive nation could become a “new Somalia” if civil war broke out.

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US tax-cut bill nears Senate approval 

President Barack Obama makes a statement about the senate vote on middle class tax cuts in the Brady Press Briefing room of the White House in Washington, December 13, 2010.

President Barack Obama’s sweeping plan to extend expiring tax cuts for millions of Americans headed for overwhelming passage in the Senate on Wednesday, putting the measure’s fate in the hands of the House of Representatives.

As the Senate neared what appeared to be a rare bipartisan vote on the bill to renew all Bush-era income tax breaks and add some provisions designed to stimulate the US economy, House Democrats mulled ways to pull back on some of the measure’s tax breaks for the wealthy.

But even liberal House Democrats acknowledged there might not be enough support to significantly alter the legislation brokered by Obama and congressional Republicans that includes expanded tax breaks for wealthy estates.

“My guess is that the whole package passes,” said liberal Democratic Representative James Moran. “The Democratic caucus might not support it,” he said, but added, “I don’t know how much leverage there is” to significantly alter the bill.

Before the Senate votes, it will debate three initiatives that likely will fail: a Republican plan making all of the Bush-era tax cuts permanent, another Republican plan requiring that extended jobless benefits be paid for through spending cuts, and a Democratic proposal excluding the wealthiest 2 percent from tax cuts.

While there had been talk of trying to curtail tax breaks for ethanol blenders, no such amendment will be allowed in the Senate.

The package also got a boost in the House, where it faces its stiffest resistance, when a top Democrat said there are “compelling reasons” to pass it.

The bullish comments by House Democratic Majority Leader Steny Hoyer signaled opposition was dissipating among Democrats who believe Obama’s $858 billion tax deal, brokered with the opposition Republicans, is too generous to the wealthy.

The measure cleared a key Senate procedural hurdle on Monday, with 83 of the chamber’s 100 members voting in favor of moving the bill forward.

It extends for two years all Bush-era individual tax rates, prevents a spike in taxes on capital gains and dividends and renews long-term insurance for the jobless, while providing an assortment of new tax breaks for students, working families and businesses.

Economists have boosted growth forecasts based on the bill’s likely passage, citing in particular a one-year cut in the payroll tax and removal of uncertainty about taxes in general.

At the same time, deficit watchers fear the measure’s impact on the nearly $14 trillion federal debt.

Monday’s bipartisan vote was in sharp contrast to the gridlock that has tied the Democratic-led chamber in knots for much of the first two years of Obama’s presidency.

“The vote in the Senate indicates an urgency that is felt by a broad spectrum that the middle-income taxes not be increased come January 1,” Hoyer told reporters.

“Rarely do you see that big a number” in support of a bill, Hoyer said, also noting a swath from the very liberal to the very conservative backed it.

Obama and most of his fellow Democrats had pushed for extension of the tax cuts enacted by former President George W. Bush only on household income of up to $250,000.

Democrats lost control of the House and saw their margins shrink in the Senate in the November 2 elections, pushing Obama to strike the deal before the Republicans take more power in January.

Estate tax

A bid by some House Democrats to tighten an estate tax provision to make it less generous for the wealthy is expected to fail, but could slow down eventual passage.

On Monday, Moody’s Investors Service warned it was considering cutting the United States’ top-notch triple-A bond rating in the next two years if the package becomes law because it would push up debt levels.

Worries about the bill’s potential affect on the federal deficit prompted a two-day sell-off of US Treasury bonds last week.

Lawmakers have said they want to recess for the year by the end of the week, though that timeline is tentative.

Many House Democrats believe Obama struck an especially bad deal on the estate tax, conceding to Republican demands it exempt the first $5 million of inherited assets from taxes, with estates above that taxed at 35 percent.

Democrats favor a $3.5 million exemption and a 45 percent tax rate.

Hoyer said many Democrats want a separate amendment on the estate tax, but also said there is concern that debate over estate taxes could derail the whole deal and that no decision had been made.

“Given all of the problems facing this country, lowering taxes for people who are extraordinarily wealthy, whose incomes are soaring, whose tax rates are going down, should not be a major priority of the US Senate,” said Senator Bernie Sanders, an independent who helped lead the opposition.

Still, a senior House Democratic aide said he doubts there are enough members to back a weakened estate tax.

“It would give members a chance to vent to vote against it,” the aide said. “But I doubt” there are enough votes to change it.

Vinashin’s debt troubles to hurt Vietnam banks’ credit quality, S&P says 

 

Vietnam Shipbuilding Industry Group’s potential failure to make debt payments is likely to undermine the credit quality and profitability of Vietnam’s banks, according to Standard & Poor’s.

The state-run company, known as Vinashin, may default on foreign-currency debt due in “in the near term,” highlighting the need for lenders to assess the creditworthiness of each government-controlled entity, S&P said in a statement Monday.

Vinashin may represent as much as 3 percent of the individual loan portfolios of some state-owned Vietnamese banks, according to Moody’s Investors Service. Banks that had counted on government bailouts in the event of problems in lending to state-run firms may post larger-than-expected credit losses, S&P said Monday.

“Vinashin is the first signal that state-owned banks have more doubtful loans than appeared to be the case in the past,” Alain Cany, the Ho Chi Minh City-based chairman of the European Chamber of Commerce in Vietnam, said by telephone on Monday. “This may reduce the valuations of state-owned banks, but the problem is that not many people know the extent of it yet.”

Vinashin had debt of about VND86 trillion ($4.4 billion) as of June, the government said in August. The shipbuilder may delay a $60 million payment on a $600 million loan, Moody’s said last month in a note.

One-year delay

“All eyes are now on an impending syndicated loan repayment that the company must make,” Vietnam Holding Ltd., a UK-listed fund, said in a note posted on its website Monday. “Vinashin’s management is seeking a one-year delay in the timing of the payment, for want of sufficient cash.”

Nguyen Ngoc Su, chairman of Vinashin, didn’t immediately respond to telephone calls, while Chief Executive Office Truong Van Tuyen wasn’t immediately available on his mobile phone.

“Vinashin’s woes highlight the lack of transparency, weak accountability and poor corporate governance in Vietnam,” Ivan Tan, a credit analyst at S&P, said in the note Monday. “A wide disconnect exists between industry-reported non-performing loan ratios and the true state of the system’s asset quality.”

Government-controlled companies in the nation account for 30 percent to 40 percent of loan books at state-run banks, S&P said.

While Vietnam’s government is “restructuring Vinashin’s projects” to help the company operate profitably, the shipbuilder should make its $60 million debt payment on its own, Minister of Planning and Investment Vo Hong Phuc said Dec. 8.

Company’s credit quality

The government’s stance on Vinashin indicates that it expects creditors to lend to government-related entities based on each company’s credit quality, “without an expectation of timely extraordinary government support when required,” S&P said.

The government is coping with a budget deficit and doesn’t want to come to Vinashin’s rescue, Vietnam Holding said.

“Until now, commercial banks — both foreign and local alike — have tended to regard loans made to large state-owned corporations as having an implied government guarantee,” said Vietnam Holding. “It now looks like Vinashin will serve as the acid test for this perception.”

Vinashin’s problems are also unlikely to stop capital injections into state-owned lenders in Vietnam, it said, citing the banks’ systemic importance, and the government’s majority ownership and history of providing support.

US sees no ‘game-changer’ in China’s emissions goal 

Environmental activists from Bolivia march toward the Pitaya Cancun Messe, where climate talks are taking place in Cancun, December 7, 2010.

China’s most recent stance on bringing its emissions-reduction goals into a United Nations deal marks “business as usual” and doesn’t advance fractured climate negotiations in Mexico, US envoy Todd Stern said.

China’s delegation chief Xie Zhenhua said Monday he’s prepared to include in an official United Nations document a “voluntary” pledge to rein in emissions, a response to demands from the US and the European Union that current promises be anchored within the negotiating process.

“I’ve seen quotes from some people saying this can be a game-changer,” Stern, the lead US envoy at the UN talks in Cancun, Mexico, said at a briefing Tuesday. “I’d love it to be a game-changer, but as far as I’m concerned, this is business as usual.”

China’s comment, as leaders from 35 nations arrived for the final four days of the discussions, came as delegates work able to bridge differences between rich and poor nations blocking an agreement.

Presidents Hugo Chavez of Venezuela, Evo Morales of Bolivia and Rafael Correa of Ecuador are among the leaders arriving for the final four days of the conference. US President Barack Obama, who attended last year in Copenhagen, is not coming this time. UN Secretary General Ban Ki-Moon told the delegates they were “not rising to the challenge” of making an agreement.

“We need results now,” he said. “Our efforts so far have been insufficient. We need to make progress in these negotiations. The longer we delay the more we will have to pay.

Glaciers retreat

A UN report on Tuesday said glaciers in Chile and Alaska retreating the quickest in the world. Those in Europe, which were building mass during the 1970s, now are shrinking. A text for this week’s talks suggests keeping temperature increases since the 1700s to “below 2 degrees Celsius.”

Carbon dioxide emissions have risen 40 percent from 1990 to 2008, double the level that would produce a 3.5 degrees Celsius increase in global temperatures, the International Energy Agency said Monday.

“The environmental stakes are high,” said Christiana Figueres, the UN diplomat leading the talks. “We are quickly running out of time to safeguard our future. Sooner or later island nations will have to seek refuge in higher-lying countries. There will be worse impacts.”

Pollution limits

Current emissions goals from the world’s biggest polluters are enshrined in the Copenhagen Accord, a non-binding document that envoys to the UN Framework Convention on Climate Change don’t formally recognize.

Zhenhua said Monday that developing countries, including China, “could choose to make voluntary action utilizing their own resources under the UNFCCC framework.”

Chinese remarks show “there’s a move toward the middle ground,” European Commission envoy Artur Runge-Metzger said in an interview Tuesday in Cancun.

“It looks like things are coalescing,” Andrew Deutz, head of international government relations at the Nature Conservancy, an environmental advocacy group in Arlington, Virginia, said in an interview today in Cancun. “There are two big road blocks in the way and one is MRV. I think that roadblock should be removable.”

The other big source of disagreement is how to ensure greenhouse gas emissions are reduced after 2012, when limits for rich nations set out in the 1997 Kyoto Protocol expire. Japan, Canada and Russia are refusing to sign up for a second period of commitments. China, India and Brazil say those further reductions are essential.

‘Hard pounding’

“It’s hard pounding,” said Chris Huhne, Britain’s energy secretary, who along with his Brazilian counterpart was tapped by the UN to work out a compromise on the Kyoto issue. “We’re getting there. I’m a half-glass full man.”

Envoys are working on measures including a $100-billion-a- year climate aid fund, rules that would protect forests and the system of monitoring, reporting and verifying emissions cuts, known as MRV in UN jargon. Two draft documents released today on the MRV issue were filled with brackets, an indication the wording has yet to be agreed.

“There’s been quite some progress on MRV,” Runge-Metzger said. “It’s kind of a skeleton now, and what we need to do now is to put flesh onto the bones.”

Under the text, developed countries were urged to adopt more ambitious, legally-binding targets.

Country’s concerns

Developing country’s mitigation actions would be subject to MRV procedures when supported by aid, and when not supported, they would conduct their own monitoring and then submit the report to international analysis, according to the text.

The MRV package was one of the key tensions between the US and China that prevented a global warming agreement at last year’s talks in Copenhagen.

Stern said China hasn’t gone far enough in giving transparency to its efforts limiting greenhouse gases, adding to doubt about the prospects for an agreement this week.

“The transparency issue is lagging way behind,” said Stern of the US. “There is a lot of support in the conference and among developing countries for the proposal the Indians have put forward,” he said, referring to an attempt by Indian Environment Minister Jairam Ramesh to unlock the process.

India has proposed guidelines that would differentiate between rich and poor nations and also put rapidly emerging developing countries like China into a separate category than the poorest nations.

Developing nations have been voicing concerns about the verification program, which they viewed as encroaching on their sovereignty.

“If MRV issues are resolve and targets are resolved, then everything can be resolved,” Quamrul Chowdhury, Bangladeshi envoy, said today in an interview. “But those are the crux issues where there hasn’t been much progress.”

Zhenua said Monday that China, India, Brazil and South Africa had reached agreement in principle on the transparency issue.