Mexico student movement plans more protests against Peña Nieto

Mexico protest guadalajara july 7 epa

MEXICO CITY -- The student-led movement that emerged in Mexico against president-elect Enrique Peña Nieto is planning another round of protests Sunday. The protests are part of a wave of demonstrations that began almost spontaneously during the presidential campaign and appear to still be drawing big crowds since the July 1 election.

The #YoSoy132 movement, or "I Am 132," said it will call demonstrations in "all public plazas" and at the presidential residence Los Pinos in Mexico City, in rejection of Peña Nieto's victory by more than 3 million votes over his nearest rival, Andres Manuel Lopez Obrador.

Each weekend since the July 1 vote, tens of thousands of people have demonstrated in dozens of cities in Mexico over the apparent victory of Peña Nieto, whose Institutional Revolutionary Party (PRI) ruled for seven decades until its ouster in 2000. The protests have been largely peaceful and almost entirely generated on social media; in fact, Sunday's planned demonstrations are only the second since election day that the #YoSoy132 movement has formally organized.

In one grassroots demonstration July 7, protesters stormed the live televised wedding of an actor and actress tied to the Televisa network. Televisa is a target of demonstrators who allege that  the dominant media conglomerate in Mexico favored Peña Nieto's candidacy.

Protests have been buoyed by a string of reports that suggest the PRI campaign "bought" votes by handing out debit cards and allegations from rivals that it topped campaign spending limits -- including possibly laundered money -- in its effort to return the party to power.

The PRI denounced the allegations but acknowledged before federal investigators that it handed out debit cards to supporters, a practice the party claims is legal (link in Spanish).

The second-place finisher, leftist stalwart Lopez Obrador, said he would seek to nullify the election result through Mexico's electoral tribunal system, and promised public "informative assemblies" of his own this month and in August. The leaders of both the main liberal and conservative parties said Thursday they would join forces to challenge the PRI victory over new allegations that some debit cards could be tied to sham companies formed by PRI supporters that served as fronts for laundering illicit money.

The transition of political power is scheduled for December. Lopez Obrador's declared "National Plan in Defense of Democracy and Mexico's Dignity" looks to repeat the movement he started in 2006 after he was defeated in his first presidential bid by less than half a percentage point.

The #YoSoy132 movement is thus left walking a narrow line between maintaining a non-partisan stance but supporting the broader goal of nullifying the election results.

Because of its arduous decision-making process, in which consensus must be reached on major points, the student movement has been unable to articulate a long-term plan in the likelihood that Peña Nieto takes office. More so-called "inter-university assemblies" are planned in the coming weeks.

In two conventions held recently outside Mexico City, one in a town in Morelos state and one in the political flash-point of San Salvador Atenco, participants said the movement resisted some internal pressure to support Lopez Obrador or the youth-oriented wing of his political movement.

"We remain non-partisan," Rodrigo Serrano, a student-movement spokesman at the Ibero-American University, said Friday. "We couldn't ... support [Lopez Obrador] because our original rules don't allow it."

The "I Am 132" movement is named after a Twitter hashtag that emerged in response to a YouTube video by students at the Ibero-American University, after a contentious Peña Nieto appearance there on May 11. On its website, #YoSoy132 has also begun circulating a question-and-answer video on the movement's origins and the claims made against it.

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PHOTO: Demonstrators gather to protest the results of the July 1 presidential election in the central plaza of Guadalajara, capital of the western state of Jalisco, July 7, 2012. Similar protests have been held across Mexico since the election. Credit: Ulises Ruiz Basturto / European Pressphoto Agency


Barclays CEO Bob Diamond quits over rate-fixing scandal

Bob Diamond, chief executive of Barclays, resigned over an inter-bank rate-fixing scandal under investigation by U.S. and British financial authorities
This post has been updated. See the note below.

LONDON -- Bob Diamond, chief executive of Barclays, resigned Tuesday over an inter-bank rate-fixing scandal under investigation by U.S. and British financial authorities.  The announcement came a day after Barclays' chairman, Marcus Agius, quit his post for the same reason.

[Updated July 3, 7:29 a.m.: Jerry del Missier, the bank's chief operating officer, followed Diamond out the door later Tuesday, announcing that he had quit the post to which he had only recently been appointed.]

Barclays, one of Britain's leading investment and retail banks, is under fire from politicians and financiers and could face criminal investigation from Britain's Serious Fraud Office after reports last week revealed that it, along with about 20 major British and North American banks, had manipulated the LIBOR, the inter-bank borrowing rate used as a benchmark for private and corporate loans.   

Investigators revealed a culture of artificially fixed rates arranged in deals between traders and banks between 2005 and 2009, covering the years of the worldwide financial crisis.

The American-born Diamond headed Barclays Capital, the investment branch of the bank during those crucial years, before being appointed CEO in 2011.  Nevertheless, he has resisted offering his resignation until now. In a letter to Barclays staff Monday, he said he was committed to a "root and branch" review of the bank's practices and pledged that the board would "establish a zero tolerance policy for any actions that harm the reputation of the bank."

Barclays has been fined over $450 million by the U.S. Commodity Futures Trading Commission, the U.S. Justice Department and the British Financial Services Authority.

Diamond's resignation is effective immediately, but Agius will remain as chairman to oversee the installation of his and Diamond's successors.

In his resignation statement, Diamond said his decision came as "the external pressure has reached a level that risks damaging the franchise -- I cannot let that happen."

He went on to say that he was "deeply disappointed that the impression created by the events of last week about what Barclays and its people stand for could not be further from the truth.”

Diamond is scheduled to face a parliamentary committee panel of inquiry Wednesday, and said he looked forward "to fulfilling my obligation to contribute to the Treasury Committee's inquiries related to the settlements that Barclays announced last week, without my leadership in question.”

His announcement comes a day after British Prime Minister David Cameron called for a parliamentary cross-party inquiry to report by the end of the year, with an eye toward reviewing banking laws and regulations. Cameron's proposal is staunchly opposed by the opposition Labor Party, which is demanding a wider public, judge-led independent inquiry of the type now investigating media practices and ethics over the News Corp. phone-hacking scandal.

British Chancellor George Osborne welcomed Diamond's decision, telling the BBC  that it was "the right decision for Barclays and the right decision for the country. ... I hope this is the first step toward a new culture of responsibility in British banking."

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Photo: Bob Diamond. Credit: Carl Court / Getty Images


Cyprus asks for EU bailout, weighs loans from Russia, China

Cyprus asked European Union states for a bailout of its troubled banks, becoming the fifth member of the Eurozone to seek help balancing its books
Cyprus asked European Union states on Monday for a bailout of its troubled banks, becoming the fifth member of the Eurozone to seek help balancing its books.

In a brief statement from Nicosia, the Cypriot government said it was forced to ask EU colleagues for an unspecified sum because of "negative spillover effects through its financial sector, due to its large exposure in the Greek economy."

Cypriot banks suffered heavy losses earlier this year when the value of the Greek government bonds it holds was written down. Cyprus banks also hold about $27.5 billion in Greek private-sector debt, repayment of which would be in doubt if Greece opts out of the common currency or is expelled for failing to live up to belt-tightening commitments made in exchange for bailouts.

Cypriot government spokesman Stefanos Stefanou also said the island state was also in discussions concerning possible loans from Russia and China that may be offered without the tough austerity measures that Eurozone colleagues have demanded of bailout recipients Greece, Portugal, Ireland and, most recently, Spain.

Nicosia has already borrowed about $3.1 billion from Moscow, and Russian media reported last week that additional lending on favorable terms was being discussed for Cyprus. Russian private business owners often take advantage of the tax haven offered by the Cypriot offshore financial industry, and Moscow has long been in search of a warm-water port in a friendly state in the Mediterranean.   

Like much of the Eurozone, Cyprus has been mired in recession. The International Monetary Fund estimates that the nation's economy will shrink by 1.2% this year.

Economists estimate that Cyprus will need at least $12.5 billion to recapitalize its banks. European Commission spokesman Amadeu Altafaj-Tardio told journalists last week that European lending institutions were already on standby to provide help.

Cyprus, the third-smallest economy in the 17-nation Eurozone, is set to take over the rotating EU presidency on July 1.

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Photo: A woman draws funds from a cash machine of the Marfin Popular Bank in Nicosia, Cyprus, on Monday. Credit: Katia Christodoulou / EPA


Eurozone crisis: A love-hate relationship imperils the currency

Alexis Tsipras, leader of the Coalition of the Radical Left, Syriza, presents his party's economic program in Athens on Friday, ahead of Greece's general elections on 17 June.
The Irish voted "with a heavy heart" this week to tough out the hardships of remaining a member of the Eurozone. Greek and French voters protested the pain of austerity last month by throwing out leaders who had been slashing jobs and services to reduce debt. Spain and Italy may be more committed to the belt-tightening required to shore up the euro, but skeptical investors could undermine those sacrifices by waging a run on their banks.

GlobalFocusEuropeans have been lurching from one crisis to another for the last four years as recession wreaked havoc with many of the 17 Eurozone economies that have too little in common beyond the coins and banknotes they use. Some of the world's most influential economists now worry that crisis could escalate to catastrophe if Greeks heed the siren song of a fiery leftist telling them they can keep their euros but renege on austerity measures they promised in exchange for bailout funds.

A German-led effort to get the bloc's financial houses in order has exposed flaws in the common currency's management and ambivalence among euro users about the continent's ambitious goals for economic integration. What is accepted by frugal, savings-minded Northern Europeans as laudable restraint in public spending has sown resentment in Eurozone countries ravaged by high unemployment, teetering banks and withering cuts in social services.

Ireland's vote to approve the fiscal treaty signed this year by 25 of the European Union's 27 member states was a convincing 60.3% in favor. But politicians on both sides of the issue acknowledged that it was a hard pill to swallow for a country struggling to meet its obligations after being bailed out by Eurozone colleagues in 2010.

Ireland had one of the highest deficits in the Eurozone three years ago, but it has cut spending and debt enough to see prospects for emerging from a four-year recession. Small signs of economic improvement -- a marginal drop in unemployment last month and a hint of growth over the last year -- were enough to push the Irish to commit to the Eurozone's collective debt-reduction goals by endorsing the treaty.

"The astonishing thing about this campaign was that lots of people voted 'yes' with a heavy heart, and many voted 'no' with a heavy heart," said Joan Burton, Ireland's social protection minister, citing concerns in both camps about the treaty's potential constraints on spending to create jobs.

The long-term good may not be so prominent in the minds of Greek voters when they go to the polls June 17 to choose among candidates making brash and contradictory promises about Greece's future in the Eurozone. Alexis Tsipras has moved his radical left Syriza party to the political fore, according to the latest poll, with his vow to bail on the bailout terms and his dubious assertion that Greece would nevertheless retain use of the euro.

“The first act of a government of the left, as soon as the new Parliament is sworn in, will be a cancellation of the bailout and its implementation laws,” Tsipras told boisterous supporters Friday when he outlined the party's economic platform.

All recent polls in Greece have shown Syriza and the conservative New Democracy Party running a close battle for popular support, but neither likely to get enough votes to form a government on its own. That threatens a repeat of the fractured May 6 vote and futile attempts among the irreconcilable parties to form a coalition government. The latest survey -- and the last before a two-week moratorium on polling ahead of the election -- on Friday showed Syriza almost doubling its share of the vote captured last month, with 31.5% support compared with 25.5% for New Democracy, which finished first on May 6.

In a sign of the disarray afflicting Greece, the country didn't manage to update its unemployment statistics for the last three months for an EU report released Friday showing a euro era-high 11% joblessness across the currency union. In February, the last month for which Athens has released figures, 21.7% of Greeks were out of work.

More job cuts and tax hikes were due to be imposed this month ahead of the next payment of bailout money from Brussels. Those cuts have been essentially suspended in the absence of an elected government.

As Eurozone residents hold their breath awaiting the next Greek vote, more immediate worry has settled on Spain, where national leaders are urging fellow Europeans to help rescue Spanish banks saddled with defaulted loans issued during a building boom in the years before recession hit in 2008. Spain last week promised troubled lender Bankia nearly $24 billion to keep it afloat, but borrowing rates have soared to record highs -- nearing the 7% rate that pushed Ireland, Portugal and Greece over the edge and forced them to seek bailouts.

Spain, the fourth-largest economy in the Eurozone, may be too big to bail out, economists say, spreading fears for the future of the entire common-currency project.

The EU commissioner for monetary and economic matters, Olli Rehn, warned during a speech in Helsinki, Finland, on Friday that "the way things are going and under the current structures, the euro area has a significant risk of breaking up."

Eurozone states have "extremely tough decisions ahead, and it’s important to face the truth,” Rehn said, alluding to suggestions among other financial leaders that contingency plans should be drawn up to cope with the worst-case scenarios being threatened from several euro states.

Earlier this week, the European Commission called for creating a "banking union" that would allow the bloc's financial institutions to invest directly in troubled national banks, rather than force already indebted states to take on further obligations at unsustainable interest rates. But Germany has resisted the idea of pooling its sterling credit with other euro users, and Chancellor Angela Merkel also remains steadfast against loosening the spending shackles on struggling states to allow them to invest in growth.

The standoff amid possibly impending catastrophe has alarmed financial experts around the globe.

"The Eurozone is experiencing three crises at the same time -- a fiscal crisis, a banking crisis and a growth crisis," said former U.S. Treasury Secretary Robert E. Rubin, now at the Council on Foreign Relations, citing weak political leadership in Europe and deep concern for the situation in Spain. "If the Eurozone continues to unravel, not only will that have very serious consequences for the Eurozone, but I believe it will have serious and maybe even severe consequences for the entire global economy, including the United States."

In a commentary Friday in Britain's Financial Times, World Bank President Robert Zoellick drew disturbing parallels between what is happening now in Europe and the financial crises that were the bellwethers of the 2008 collapse on Wall Street.

"Events in Greece could trigger financial fright in Spain, Italy, and across the Eurozone," Zoellick wrote, saying that the summer ahead had "an eerie echo of 2008."

Eurozone leaders need to be ready to recapitalize banks if spooked investors rush to withdraw their euro-denominated assets, he said.

"There will not be time for meetings of finance ministers to discuss the outlook and debate the politics of incrementalism," Zoellick said. "In panicked markets, investors flee to safe assets, sparking other flames."

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Photo:  Alexis Tsipras, leader of Greece's radical left Syriza, presents the party's economic program in Athens on Friday. Tsipras vowed to cancel harsh austerity measures demanded by the Eurozone leaders in return for bailouts of Greece's heavily indebted economy. Credit: Simela Pantzartzi / European Pressphoto Agency.


Mexico political party suspends former official in drug-money scandal

  Tomas3
MEXICO CITY -- The political party expected to win Mexico's upcoming presidential election sought Wednesday to distance itself from a former high-ranking official embroiled in a drug-trafficking and money-laundering scandal.

Tomas Yarrington, a former governor of the border state of Tamaulipas from the Institutional Revolutionary Party, or PRI, has been accused in U.S. federal court papers of receiving millions of dollars from drug gangs. He allegedly used the money to buy property in Mexico and Texas.

U.S. prosecutors Tuesday filed two civil forfeiture cases that are aimed at confiscation of some of the properties.

Yarrington has not been charged with a crime and has denied wrongdoing. His attorney, Joel Androphy, told Mexico's Milenio TV on Wednesday that he suspected other defendants, attempting to save themselves, had pointed fingers at Yarrington.

But the PRI, in the middle of an election campaign that probably will return it to presidential power after more than a decade, apparently decided enough was enough. Though the accusations have circulated for months, the party Wednesday issued a statement (link in Spanish) saying Yarrington would have to face authorities and clear up the charges. Until then, his party membership was suspended.

For the PRI, whose presidential candidate Enrique Peña Nieto leads all polls ahead of the July 1 vote, the allegations threatened to summon the ghosts of the party's often dark, corrupt past, as Mexico City correspondent Ken Ellingwood reported this year.

The "allegations of drug payoffs to a former PRI governor have shoved the party's often-shady legacy to the forefront of the campaign, reminding voters of the sort of graft that marked the party's rule before it was booted in 2000 after seven decades of near-absolute control," he wrote.

Mexico's vast drug-trafficking industry took off under the PRI, frequently with the help of corrupt officials.

Yarrington served from 1999 to 2004 as governor of Tamaulipas, considered the home base of the formidable Gulf cartel.

Peña Nieto, the presidential candidate, echoed his party's statement calling Yarrington to task. But he also raised the oft-stated PRI suspicion that the scandal might have political motivations.

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Photo: A 2010 photo shows Tomas Yarrington sportfishing at an unknown location. Credit: tomasyarrington.org

 


Mobile money a 'bright spot' for billions lacking bank accounts

Worldbankaccount

Half of the world's population does not have a bank account, with many people saying they make too little money to bother with the cost or hassle of opening one, a new Gallup survey from the World Bank found. Instead, many turn to cheaper alternatives to save or transfer money, including their cellphones.

Banking can help people save, open up access to credit and make it easier to transfer money, the World Bank said. Although 89% of people polled in wealthy countries have a financial account, only 41% in developing countries do, said the Gallup poll of about 150,000 people. Across the globe, women are less likely to have bank accounts than men are, especially in South Asia, the Middle East and North Africa.

Nearly a third of the people who didn’t have a bank account said they didn’t have enough money to get one, and a quarter said opening an account was too expensive. Others said someone else in their family already had an account, the banks were too far away, or they didn’t have the right documents.

Banking fees, for instance, can be dauntingly expensive in poorer countries. In Sierra Leone, such fees cost more than a quarter of the average annual income, the World Bank report said. Some workers are unable to drum up wage slips or official proof of residence, barring them from getting an account.

Barriers to traditional banking have led to some creative alternatives. To save without turning to a bank, people around the world do a variety of things, including buying gold and starting a savings club, in which people pool their savings and give the whole amount to a different member each week.

"Mobile money" also has taken off in much of Africa, a trend that the report called a "bright spot" in expanding access to financial services. More than two-thirds of Kenyans surveyed said they had used a cellphone to send or receive money in the last year, accessing accounts that may not be tied to traditional banks or require the same kind of document. Some of the "unbanked" rely on mobile money instead.

However, governments have increasingly pushed for regulations putting banks in charge of such services. India now requires mobile money to be run through banks, which may have slowed its growth there, the report said. The World Bank contends that phones and other technology should be used to increase access to banks.

“Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” World Bank President Robert B. Zoellick said.

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Image: A map of the world shows the percentage of adults with an account at a bank or other formal financial institution, based on a Gallup survey of about 150,000 people. Credit: World Bank / Measuring Financial Inclusion


Africa -- the next frontier for virtual currency?

A market in Mali

If you’ve heard of Bitcoin, you might be a computer geek. The virtual money aspires to become a universal currency that doesn’t depend on governments or banks.

Cutting out the banks results in cheaper transactions, Bitcoin backers say. Online payments pass from person to person without using a bank as the middleman. And unlike electronic payments with ordinary currency, governments can’t halt Bitcoin payments, an idea that appeals to libertarians.  

So far, Bitcoin hasn't made its way into the mainstream. It is still a relatively fringe idea viewed  skeptically by many economists.

Yet Bitcoin has surprised some of its critics, stabilizing in value after its price peaked and plummeted last year. Bitcoin backers insist that despite its past troubles, the digital currency will prove itself. And they’re now hoping to take their virtual money to a somewhat surprising new market: Africa.

German software developer and Bitcoin exchange consultant Rudiger Koch recently pitched the idea in Nigeria, arguing that Bitcoin has advantages for African countries. Bitcoin has no inflation tax, unlike ordinary cash. It could be spent and shared using cellphones, which are ubiquitous in much of Africa. Cellphone systems that let people transfer money by text message are already used in Kenya.

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