US Vice President Praises Italy as ‘Important’ US Ally

Posted June 1st, 2011 at 4:30 pm (UTC-5)
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U.S. Vice President Joe Biden has praised Italy as an important partner of the United States during talks with Italian President Giorgio Napolitano in Rome.

Mr. Biden and Mr. Napolitano also discussed the situation in Libya during Wednesday's meeting at the Quirinale presidential palace. The United States and Italy both have participated in two months of NATO airstrikes on Libyan military targets as part of a campaign to protect civilians from attacks by forces loyal to Libyan leader Moammar Gadhafi.

Vice President Biden is visiting the Italian capital to represent the United States at Italy's celebration of the 150th anniversary of its unification on Thursday. The White House says he will hold a trilateral lunch meeting with Russian President Dmitry Medvedev and Italian Prime Minister Silvio Berlusconi on the sidelines of the event. The agenda for the talks was not disclosed.

Mr. Biden also held talks with Georgian President Mikheil Saakashvili in Rome Wednesday. Russia's Interfax news agency quotes a Georgian official in Tbilisi as saying Mr. Saakashvili and Mr. Biden discussed Russia's bid to join the World Trade Organization. Georgia is a WTO member and has the right to veto any new entrant.

Tbilisi has negotiated the issue with Moscow in the past. Relations between the neighboring states have been strained since they fought a five-day war in 2008 for control and influence over the breakaway Georgian regions of South Ossetia and Abkhazia.

In a separate development, Abkhaz officials said Wednesday the Pacific Ocean archipelago of Vanuatu has become the fifth nation to recognize Abkhazia as independent. The others include Russia, Venezuela, Nicaragua and the Pacific island of Nauru.

Abkhazia's Foreign Ministry praised Vanuatu for taking the step despite the U.S. and western Europe's refusal to grant recognition to the Georgian region.

Georgian parliament speaker Davit Bakradze played down the significance of Vanuatu's move, predicting that it will not change the international attitude toward Abkhazia. Most nations view Abkhazia and South Ossetia as Georgian territories illegally occupied by Russian troops.

Economic Worries Pummel US Stocks

Posted June 1st, 2011 at 4:30 pm (UTC-5)
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Weak economic data is sparking new concerns the U.S. economic recovery is stalling, sending the major stock indexes sharply lower Wednesday.

The Dow Jones Industrial Average dropped 2.2 percent to close at 12,290. The S&P 500 index plunged 2.3 percent to end at 1,315. And the NASDAQ dropped 2.3 percent to finish at 2,769.

European stock prices also fell, closing lower.

London's Financial Times index dipped 1 percent to close at 5,929. The CAC-40 in Paris fell 1 percent to end at 3,965. The DAX index in Frankfurt also slid 1 percent to finish at 7,217.

In Asia, Tokyo's Nikkei index gained more than one-quarter of a percent to finish at 9,720. Hong Kong's Hang Seng index lost nearly one-quarter of a percent to finish the day's trading at 23,626.

The price of gold rose more than $3 to trade at $1,538.80 an ounce.

The dollar traded lower against the yen and higher against the euro.

Bosnian Serb Lawmakers Scrap Controversial Referendum

Posted June 1st, 2011 at 4:25 pm (UTC-5)
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Bosnia's Serb Republic parliament has voted against holding a disputed referendum on the region's future.

Bosnian Serb officials had planned to hold the referendum this month, asking people in the region whether they accepted the federal judiciary and an international envoy overseeing Bosnia's fragile peace.

The Bosnian Serb Assembly shelved the planned referendum Wednesday following a deal with the European Union on a review of Bosnia's central judicial institutions. The lawmakers said that with the opening of a dialogue on Serb complaints, the plebiscite is not immediately necessary.

Bosnian Serbs have rejected the authority of the country's central institutions, claiming they are heavily biased against them. They have especially criticized Bosnia's national court, which prosecutes war crimes suspects.

EU officials had condemned the planned referendum, saying it would deepen ethnic divisions in the Balkan country, still recovering from the bloody conflict of the early 1990s.

Under the 1995 Dayton peace accord, Bosnia was divided in two entities – the Bosnian Serb Republic and the Muslim Croat Federation. Each has its own government and security forces. Efforts by the international community to strengthen federal institutions have had little success.

Bosnian Serb President Milorad Dodik met with EU foreign policy chief Catherine Ashton last month in the northern Bosnian city of Banja Luka to discuss Serb complaints. He said afterwards that he was satisfied with the talks and that the referendum was not necessary “for the time being.”

Mr. Dodik has frequently suggested that his region might secede from Bosnia.

Shaq Announces Retirement After 19 NBA Seasons

Posted June 1st, 2011 at 4:20 pm (UTC-5)
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National Basketball Association superstar Shaquille O'Neal has announced his retirement after 19 seasons in the league.

He posted a video with the announcement on his Twitter account Wednesday.

The No.1 draft pick in 1992 is known around the world as “Shaq.” While playing for five NBA teams he won four championship rings, one Most Valuable Player award, three Finals MVP trophies and made 15 All-Star appearances.

The 39-year-old was also a two-time scoring champion and is fifth all-time on the NBA's list for career points with 28,596 and 12th in total rebounds with 13,099.

The 2.16-meter tall center began his playing career with the Orlando Magic but enjoyed the most success while playing for the Los Angeles Lakers, winning three titles with fellow superstar Kobe Bryant. O'Neal also won a championship with the Miami Heat in 2006. He played this season with the Boston Celtics but was limited with injuries throughout the year.

O'Neal is known just as much for his off-court antics as he is for his on-court performance. He has released several hip-hop albums, starred in movies and television shows and worked in law enforcement.

Turkish PM Blames Opposition for Pre-election Violence

Posted June 1st, 2011 at 4:15 pm (UTC-5)
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Turkish Prime Minister Recep Tayyip Erdogan has blamed the opposition for provoking clashes in Turkey ahead of June 12 parliamentary elections.

In a speech in Istanbul Wednesday, Mr. Erdogan said the provocations were a ploy to drag his ruling Justice and Development Party into what he called a “trap,” and vowed to steer clear of such violence.

The leader of the far-right Nationalist Action Party , Devlet Bahceli, blamed the government for the recent tensions in the country, accusing it of efforts to provoke separatists and escalate attacks.

Earlier Wednesday, Turkish police detained 18 people suspected of planning attacks at an election rally by the Nationalist Action Party in the mostly Kurdish city of Diyarbakir set for next Monday, adding to already high tensions ahead of the June 12 vote.

Mr. Erdogan earlier Wednesday announced new projects for Diyarbakir, in what is viewed as an attempt to gain Kurdish support ahead of the elections.

The prime minister launched an initiative in 2009 to grant Kurds greater cultural rights, including the establishment of a Kurdish-language television channel and the teaching of Kurdish in schools, but Kurdish parties also want political reform and autonomy.

Polls show Mr. Erdogan's ruling party is set to win a third term in power. The Nationalist Action Party is struggling to reach the 10-percent threshold needed to get into parliament.

Mexican IMF Contender Visits Brazil

Posted June 1st, 2011 at 4:15 pm (UTC-5)
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The head of Mexico's central bank says Latin American countries deserve greater representation at the International Monetary Fund.

Agustin Carstens made the comments Wednesday in Brazil, where he is seeking support for his bid to become the next managing director of the IMF.

Carstens met with Brazilian Finance Minister Guido Mantega in Brazil's capital, Brasilia, and is scheduled to meet with the country's central bank chief in Sao Paulo on Thursday.

After the Wednesday meeting, Mantega told reporters it was a step forward to have a candidate from a developing nation in the running, after so many years of European leadership at the Fund. He has said, however, that Brazil has not yet decided whom to support, and that the decision would be made based on merit, not nationality.

On Monday, the other top candidate for the top IMF job, French Finance Minister Christine Lagarde, visited Brazil to seek its backing. Lagarde said that if elected head of the IMF, she will push reforms to give Brazil and other emerging countries more influence at the lending institution.

The 55-year-old Lagarde already has the backing of European Union nations. Lagarde's visit to Brazil was the first on a global tour that is expected to take her to India, China and several African nations.

European nationals have held the post at the IMF under an agreement reached with the United States after World War Two, which stipulated that an American would head the World Bank.

U.S. Treasury Secretary Timothy Geithner has called both Lagarde and Carstens “credible” and “talented” candidates for the job.

Former IMF leader Dominique Strauss-Kahn of France resigned last month following his arrest in New York on charges of sexual assault.

The IMF is expected to announce the candidates for its top post by June 17 and the final selection will be made by June 30.

Brazil Clears Amazon Dam for Construction

Posted June 1st, 2011 at 4:10 pm (UTC-5)
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Brazil has approved the construction of a massive hydroelectric dam in the Amazon rain forest — a project that has sparked criticism from environmentalists, indigenous activists and celebrities.

Brazil's environment agency Ibama issued the building license for the $11 billion dollar Belo Monte dam project on Wednesday. The dam is designed to produce about 11,000 megawatts of electricity.

It will be the world's third-largest hydroelectric energy producer after China's Three Gorges Dam and the Itaipu Dam, which straddles the border of Brazil and Paraguay.

Environmentalists and indigenous groups have said the dam will devastate wildlife in the area. British rock star Sting and American film director James Cameron have also expressed opposition to the project.

The consortium building the dam, Norte Energia, says it is expected to begin operating in 2015.

The project was originally conceived three decades ago and has been repeatedly delayed in recent years amid legal cases brought by environmentalists and native Indians.

In April, the Inter-American Commission on Human Rights urged Brazil to halt work on the dam until the government deals with concerns of the region's residents.

The commission, part of the Organization of American States, called on Brazil to take protective measures for the indigenous peoples who live in the area. The commission also called on the government to give the groups access to environmental impact reports.

Brazil's Foreign Ministry described the request as unjustified.

Honduras Readmitted to OAS

Posted June 1st, 2011 at 3:55 pm (UTC-5)
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The Organization of American States has voted to readmit Honduras following an almost two-year suspension that followed the ouster of the country's then-president, Manuel Zelaya, in a June 2009 coup.

The Washington-based organization Wednesday lifted the suspension after a 32-1 vote in which only Ecuador opposed the move. The vote follows an agreement last month that allowed Mr. Zelaya to return to Honduras.

Mr. Zelaya was overthrown and flown out of the country after he allegedly tried to change the Honduran constitution to stay in power. Honduras was suspended from the OAS following the coup. After Mr. Zelaya's overthrow, the United States and OAS failed to persuade an interim government to restore him to power. Five months later, Honduras held previously scheduled elections, and current President Porfirio Lobo was elected. He took office in January of last year.

The U.S. and other countries restored ties with Honduras after the election in November 2009. But Argentina, Brazil, Ecuador, Nicaragua and Venezuela opposed Honduras's readmission to the OAS unless Mr. Zelaya was allowed to return from exile in the Dominican Republic, without facing the threat of prison.

Oil Prices Plunge on Economic Data

Posted June 1st, 2011 at 3:45 pm (UTC-5)
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Here are the prices of some key commodities traded in New York on Wednesday:

The price of crude oil slid $2.41 to close at $100.29 a barrel after a series of reports on jobs and manufacturing sparked concerns that the U.S. economic recovery may be starting to stagnate.

Coffee prices fell almost 9 cents to to end at $2.56 a pound

Copper fell 7 cents to trade at $4.10 per pound.

Cocoa declined $46 to finish the day's trading at $2,953 a ton.

Auto Sales Shift into Reverse

Posted June 1st, 2011 at 3:35 pm (UTC-5)
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Some of the world's biggest automakers are blaming the Japanese tsunami, higher gasoline prices and jittery consumers for sending new vehicle sales into reverse.

Japanese automaker Toyota took the biggest hit, reporting a 28 percent drop in May sales compared to the same time last year.

The world's largest car company experience severe production delays and parts shortages following the March 11 earthquake and tsunami that devastated parts of Japan.

Japan-based Nissan also saw a large decline, with sales slipping 9 percent in May, while U.S. automakers General Motors and Ford reported U.S. sales fell slightly compared to this time last year.

GM sales chief Don Johnson said consumers “clearly sat on their hands” rather than go to dealerships to buy new cars.

Johnson and other industry executives pointed to rising gas prices as one reason. They also said data indicating the economic recovery may be slowing likely scared off other potential buyers.

Industry analysts said a third factor was likely the lack of incentives and other deals.

Not all car companies saw sales slow in May.

U.S. carmaker Chrysler, managed by Italy's Fiat, reported its U.S. sales increased by 10 percent in May. The strong showing helped the company repay billions in emergency loans to the U.S. and Canadian governments.

Korean automaker Hyundai and Kia also posted gains. Hyundai said its U.S. sales surged 21 percent due to demand for fuel efficient vehicles.

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