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Archive for November, 2012

Strike hits Greece in bid to derail austerity plan

November 06, 2012

ATHENS, Greece (AP) — Greek trade unions launched a general strike and nationwide protests on Tuesday against a new package of austerity measures, to be voted on this week, which would condemn Greece to more years of hardship in exchange for rescue loans.

Flights to and from the country stopped for three hours at the start of a 48-hour strike that closed schools, halted train and ferry services, and left Athens without public transport or taxis while state hospitals ran on emergency staff.

More than 35,000 people marched in two separate demonstrations in Athens organized by labor unions. Another 20,000 gathered to protest in the country’s second largest city of Thessaloniki. Police were on alert for potential violence, as most major anti-austerity protests over the past three years have degenerated into riots.

The demonstrations will culminate Wednesday, when lawmakers vote on a €13.5 billion ($17.3 billion) package of spending cuts and tax increases over the next two years. The outcome of the vote is far from certain due to disagreements in the five-month-old coalition government and a reluctance among center-left lawmakers to approve yet more austerity measures. But the rejection of the savings package would leave Greece facing the threat of a default on its mountain of debt that could force it to eventually exit the euro bloc.

This is the biggest political crisis Conservative Prime Minister Antonis Samaras has faced since he formed the coalition in June. His small Democratic Left coalition partner has said it will not back the measures, while a handful of lawmakers from the third coalition party, the Socialists, are expected to vote against the austerity package.

“The government’s majority is narrowing and the general strike further puts pressure on MPs to vote against the government’s plans,” said Martin Koehring of the Economist Intelligence Unit. “On balance, however, we expect the package to be approved by MPs because the alternative would be the government running out of cash … and facing default and potential euro exit.”

The government combined has 176 of Parliament’s 300 seats, and needs an absolute majority of those present to pass the bill. Without the Democratic Left, Samaras’ conservatives and the Socialists control 160 votes — not counting dissenters.

The main opposition Radical Left Coalition has urged demonstrators to surround Parliament during Wednesday night’s vote. “The new measures must not pass for they will turn the country into a financial and social desert,” a party statement said. “They will lead us decades back, without medicine or state healthcare, without schools and universities, without a future, with endless armies of unemployed, suicides and desperate people.”

The deeply unpopular measures include new deep pension cuts and tax hikes, a two-year increase in the retirement age to 67, and laws that will make it easier to fire and transfer civil servants. The country is suffering a deep recession set to enter a sixth year, and record high unemployment of 25 percent.

If Parliament rejects the package, Greece will lose access to the rescue loans from the European Union and International Monetary Fund that have kept it afloat since May 2010. The country would then run out of money — as soon as by Nov. 16, according to Samaras — default on its debts and, most likely, abandon the 17-member eurozone. That would create hyperinflation as the new currency plummets in value, intensifying Greeks’ misery.

A Greek exit from the euro would also have severe international repercussions, fueling fears that other troubled eurozone members could likewise leave the currency bloc. Sky-high interest rates have kept Greece out of international bond markets since 2010. However, the country retains a market presence through regular short-term debt issues — mostly bought up by domestic lenders that need the paper as collateral for vital European financing.

On Tuesday, Greece raised €1.3 billion ($1.6 billion) in a 26-week treasury bill auction that saw its borrowing costs ease slightly to 4.41 percent, from 4.46 percent last month. Demand was 1.7 times the amount on offer.

Costas Kantouris in Thessaloniki contributed to this report.

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Intrigue swirls around Russia defense chief’s fall

November 06, 2012

MOSCOW (AP) — Vladimir Putin fired his powerful defense chief over a corruption scandal Tuesday, but a heady mix of sex, power struggles and military vendettas dominated talk in Russia about what was really behind the downfall of the man who has overseen the nation’s most radical defense reform in decades.

The dismissal of Anatoly Serdyukov was a surprise because the burly politician was widely regarded as having the president’s blessing for a military modernization that has won the enmity of generals and arms makers with connections to members of Putin’s inner circle.

Adding intrigue was the fact that Serdyukov is married to the daughter one of Putin’s close allies, a former prime minister who wields enormous influence as chairman of state-run natural gas giant Gazprom. Media reports suggest that Serdyukov’s alleged philandering angered Viktor Zubkov and may have been a factor in the sacking.

But most experts see a behind-the-scenes power struggle at the root of Putin’s decision. Serdyukov has masterminded a campaign to drastically cut the ranks of officers and overhaul an antiquated military structure to create a leaner, meaner force that might restore Russia’s faded military glory.

In particular, he has aggressively demanded higher quality and cheaper prices from the military industry — ruffling powerful business interests. That is seen as having set off an internal struggle in which Kremlin allies of leading arms makers have conspired to bring Serdyukov down.

“He angered the leaders of defense industries, refusing to sign new contracts until they make their prices fully transparent,” said Alexander Golts, an independent Moscow-based military expert. “And he told them that the military will buy the weapons it needs, not the weapons they want to sell.”

Dmitri Trenin, director of the Carnegie Moscow Center, told The Associated Press that Serdyukov’s moves to “replace the very foundation of the Russian military system” won him powerful enemies. “A lot of entrenched interests benefited from that system,” Trenin said.

Putin made the announcement in a meeting with Moscow regional governor Sergei Shoigu, whom he appointed as the new minister. Some observers predict that Shoigu may take a less radical approach to military reform.

While giving few details, the president linked the move to a probe announced by the country’s top investigative agency last month into the sale of military assets, including real estate. The Investigative Committee says the state suffered damages of 3 billion rubles ($95 million) in just a few cases reviewed.

The corruption case first surfaced last month and involves Oboronservice, a state-controlled company whose activities include servicing military aircraft and arms and building military facilities. In the course of the probe, investigators carried out an early morning search of the apartment of Yevgeniya Vasilyeva, a senior Oboronservice official who was once a close aide of Serdyukov in the Defense Ministry. Serdyukov reportedly was alone at the apartment with Vasilyeva when police turned up — fueling rumors of an affair.

“The scandal behind the scandal is a personal scandal that has been rumored in Mr. Serdyukov’s family,” Trenin said. Serdyukov, a former furniture salesman, entered public service as a tax official and quickly rose through the ranks to become head of the Russian tax service before being appointed defense minister in 2007. Russian media have speculated that he owed his meteoric rise to marrying Zubkov’s daughter.

Whatever the origins of Serdyukov’s success, it’s clear that he made a profound impact on Russia as its military chief. Serdyukov’s reform led to the dismissal of 200,000 officers, disbanded nine out of 10 military units and turned over once untouchable military assets to civilian hands.

“Serdyukov’s reform marked a break with the Russian military culture,” said Golts. “Russian military officers simply can’t imagine a different military model.” Under Serdyukov, the military purchased amphibious assault vessels from France, bought Israeli drones, Italian armored vehicles and other foreign weapons in an unprecedented slap in the face of the Russian military industrial complex.

“He has made powerful foes by ending purchases of obsolete weapons,” said Igor Korotchenko, a retired colonel of Russia’s military general staff who is now editor of National Defense magazine. He said that a battle for the distribution of 20 trillion rubles ($635 billion) that the Kremlin plans to spend on buying new weapons through 2020 was likely a key reason behind Serdyukov’s firing.

Speculation about Serdyukov’s possible downfall has floated around for years, but he had received Putin’s staunch backing until now. Putin authorized and publicly praised Serdyukov’s reforms, and some observers expect that they will continue, although perhaps at a slower pace, under his successor.

“The continuation of the military reform is inevitable,” Korotchenko said. “Radical changes that have been made in the command system and the structure of the military can’t be reversed.” But others warned that Shoigu, who had served as the nation’s Emergency Situations minister for two decades before being appointed regional governor half a year ago, would likely face strong pressure from the top brass to take a less radical approach to military reform.

“The new boss will have to take a new approach differing from that of his predecessor,” said Golts, “and that would create a good opportunity for those who want to stop this reform.”

Jim Heintz and Laura Mills contributed to this report.

Hundreds protest Ukraine election fraud

November 05, 2012

KIEV, Ukraine (AP) — Hundreds of Ukrainians on Monday protested alleged fraud in last month’s parliamentary election and the opposition threatened to boycott the new parliament and call for a re-vote.

Western observers deemed the Oct. 28 parliamentary election unfair, saying the imprisonment of President Viktor Yanukovych’s arch-foe, Yulia Tymoshenko, and non-transparent vote tallying were a step back for democracy.

Three pro-Western opposition parties made a strong showing in the proportional voting that chooses half of parliament’s 450 seats, but they accuse authorities of rigging results in a number of individual races in an attempt to secure Yanukovych’s allies a majority.

Arseniy Yatsenyuk, a leader of Tymoshenko’s Fatherland party told a crowd of some 2,000 people outside the Central Election Commission office in Kiev that the opposition is demanding the votes in disputed districts be recounted. Earlier in the day, his party threatened to declare the new parliament as illegitimate.

World boxing champion Vitali Klitschko, leader of the opposition Udar party that got 14 percent in the proportional vote and a total of about one-tenth of parliament seats, called for new elections based solely on the proportional system.

“There will be no victory without a fight,” Klitschko roared from the rally stage. The demonstration was far smaller than the hundreds of thousands who turned out in 2004 to protest the fraud-tainted presidential election that Yanukovych purportedly won. Those rallies, which came to be known as the Orange Revolution, forced a rerun that Yanukovych lost, though he won the next election in 2010.

“They stole the opposition’s votes, it wasn’t fair, it wasn’t honest, it wasn’t pretty,” said Roman Vorobei, 18, a university student in Kiev, who came to the protest. Western election observers said last week that although the vote itself was satisfactory, the count prompted concern. European Union foreign policy chief Catherine Ashton on Monday urged Ukrainian authorities to quickly produce final results — “which should reflect the genuine will of the Ukrainian voters.” Complaints should also be dealt with swiftly and effectively, she said.

While the proportional share of the vote was tallied relatively quickly, the count of votes in individual races took days, prompting brawls between government and opposition supporters, the use of tear gas and even the storming of one election commission by riot police.

The opposition accuses election officials of inflating the count in favor of government loyalists, annulling votes for opposition candidates and even outright falsifying of results. The government insists that violations were few and isolated.

The stakes were high for many government-backed candidates vying for the perks and immunity from prosecution enjoyed by Ukrainian lawmakers as well as for Yanukovych’s Party of Regions as a whole, which will have to search for allies in the new parliament to get a majority.

“Things seem to be getting tense as every seat in parliament seems to count now for the party of power,” said Timothy Ash, head of emerging markets research at Standard Bank in London. “They did not do as well as first thought, and might now struggle to secure a parliamentary majority.”

Northern Ireland prison guard slain in gun ambush

November 01, 2012

DUBLIN (AP) — Suspected IRA die-hards killed a Northern Ireland prison officer Thursday in a gun ambush as he drove to work, the first killing of a prison guard in nearly two decades in the British territory.

Police said a gunman in a passing car shot David Black, 52, several times as he drove onto the M1 motorway southwest of Belfast. His car plummeted down a grassy embankment into a ditch. Police found the attackers’ suspected getaway car burned out in the nearby town of Lurgan, a power base for two IRA factions opposed to Northern Ireland’s peace process, the Real IRA and Continuity IRA. They said the car had Dublin license plates.

No group claimed responsibility. Politicians and police commanders said IRA militants were inevitably to blame and pilloried the various IRA splinter groups still in existence as politically pointless.

“These killers will not succeed in denying the people of Northern Ireland the peaceful, shared future they so desperately want,” British Prime Minister David Cameron said in London. The government of the neighboring Republic of Ireland pledged to help hunt down those responsible.

“I know that I speak for every decent man, woman and child on this island, north and south, in expressing revulsion at this act,” Irish Foreign Minister Eamon Gilmore said in Dublin. Gilmore said police in both parts of Ireland would crack down anew on IRA extremists, many of whom live in the Irish Republic near the border. “There will be no return to the dark and violent days of the past,” he said.

In Belfast, the British Protestant and Irish Catholic leaders of Northern Ireland’s unity government stood shoulder to shoulder to emphasize that no act of violence would weaken their 5-year-old coalition, the central achievement of the territory’s 1998 peace accord.

First Minister Peter Robinson, a Protestant, lambasted the various IRA factions as “flat-earth fanatics, living in the dark ages, spewing out hatred from every pore.” Standing beside him Deputy First Minister Martin McGuinness, a former IRA commander, nodded in agreement and declared that Black’s killers “can’t kill the peace process, and we are the proof of that.

McGuinness’ Irish nationalist Sinn Fein party, long a political pariah, received a share of power in Northern Ireland after the long-dominant Provisional IRA faction in 2005 disarmed and accepted that Northern Ireland’s political status could be changed only by majority approval. Surveys since have consistently shown that most residents want to stay in the United Kingdom and build better relations with the Irish Republic.

Despite this, small IRA groups using myriad names continue to mount sporadic gun and bomb attacks. They usually fail because of British intelligence tipoffs or equipment failures. IRA factions have killed two civilian men this year in attacks involving turf wars over the drugs trade, and last killed a policeman in April 2011, when a Catholic recruit was blown up outside his home by a bomb hidden under his car.

The level of violence is nothing like the 1970s-’80s heyday of Northern Ireland’s conflict, when typically around 100 people a year died in often tit-for-tat violence involving IRA factions and paramilitary outlaws from the Protestant side of the community.

Today about 4,000 British troops remain garrisoned in Northern Ireland — a third of their level a decade ago — but play no role in local security. Police still sometimes must patrol in armored vehicles and flak jackets, but they operate with few restrictions even in the most militant Irish nationalist districts, an impossible prospect before the Provisional IRA cease-fire.

The Northern Ireland Prison Service said Black, a married man with a son and daughter, had been a prison guard for about 30 years and was due to retire soon. Finlay Spratt, chairman of the Northern Ireland Prison Officers Association, described Black as “a very nice fellow to work with. He always ensured he did his job to the letter.”

Spratt lambasted the weakening of security provisions for prison officers, who live in civilian areas and still face death threats from extremists on both sides of Northern Ireland’s sectarian divide.

He said the Northern Ireland and British governments “have stripped away all the security around prison officers. They treat us now as if we live in normal society,” he said. The victim worked at Maghaberry Prison, where more than 40 IRA inmates have been waging protests for more than a year, including smearing their cells with their own excrement. The prisoners chiefly want to overturn the prison’s policy of strip-searching inmates.

The IRA factions particularly seek to deter Catholic recruitment into the once Protestant-dominated police force, a major achievement of peacemaking. But Catholic recruitment into the similarly Protestant prison service has been less successful, a problem highlighted in a recent British government appeal for more applicants from Irish nationalist communities.

Black was the 30th prison officer to die as part of Northern Ireland’s four-decade conflict. Most were killed by the Provisional IRA, but the previous killing in 1993 was committed by the Ulster Volunteer Force, a paramilitary group rooted in the British Protestant side of the community.

Spratt said Black’s killing was unlikely to be the last IRA attempt to kill prison officers — and was likely to deter people from seeking work as one. “Why would you come and work in the prison service now and chance your life for 18,000 pounds a year?” he said, referring to the starting base salary, equivalent to $29,000.

Hit by crisis, Greek society in free-fall

November 01, 2012

ATHENS, Greece (AP) — A sign taped to a wall in an Athens hospital appealed for civility from patients. “The doctors on duty have been unpaid since May,” it read, “Please respect their work.”

Patients and their relatives glanced up briefly and moved on, hardened to such messages of gloom. In a country where about 1,000 people lose their jobs each day, legions more are still employed but haven’t seen a paycheck in months. What used to be an anomaly has become commonplace, and those who have jobs that pay on time consider themselves the exception to the rule.

To the casual observer, all might appear well in Athens. Traffic still hums by, restaurants and bars are open, people sip iced coffees at sunny sidewalk cafes. But scratch the surface and you find a society in free-fall, ripped apart by the most vicious financial crisis the country has seen in half a century.

It has been three years since Greece’s government informed its fellow members in the 17-country group that uses the euro that its deficit was far higher than originally reported. It was the fuse that sparked financial turmoil still weighing heavily on eurozone countries. Countless rounds of negotiations ensued as European countries and the International Monetary Fund struggled to determine how best to put a lid on the crisis and stop it spreading.

The result: Greece had to introduce stringent austerity measures in return for two international rescue loan packages worth a total of €240 billion ($313 billion), slashing salaries and pensions and hiking taxes.

The reforms have been painful, and the country faces a sixth year of recession. Life in Athens is often punctuated by demonstrations big and small, sometimes on a daily basis. Rows of shuttered shops stand between the restaurants that have managed to stay open. Vigilantes roam inner city neighborhoods, vowing to “clean up” what they claim the demoralized police have failed to do. Right-wing extremists beat migrants, anarchists beat the right-wing thugs and desperate local residents quietly cheer one side or the other as society grows increasingly polarized.

“Our society is on a razor’s edge,” Public Order Minister Nikos Dendias said recently, after striking shipyard workers broke into the grounds of the Defense Ministry. “If we can’t contain ourselves, if we can’t maintain our social cohesion, if we can’t continue to act within the rules … I fear we will end up being a jungle.”

CRUMBLING LIVING STANDARDS Vassilis Tsiknopoulos, runs a stall at Athens’ central fish market and has been working since age 15. He used to make a tidy profit, he says, pausing to wrap red mullet in a paper cone for a customer. But families can’t afford to spend much anymore, and many restaurants have shut down.

The 38-year-old fishmonger now barely breaks even. “I start work at 2:30 a.m. and work ’till the afternoon, until about 4 p.m. Shouldn’t I have something to show for that? There’s no point in working just to cover my costs. … Tell me, is this a life?”

The fish market’s president, Spyros Korakis, says there has been a 70 percent drop in business over the past three years. Above the din of fish sellers shouting out prices and customers jostling for a better deal, Korakis explained how the days of big spenders were gone, with people buying ever smaller quantities and choosing cheaper fish.

Private businesses have closed down in the thousands. Unemployment stands at a record 25 percent, with more than half of Greece’s young people out of work. Caught between plunging incomes and ever increasing taxes, families are finding it hard to make ends meet. Higher heating fuel prices have meant many apartment tenants have opted not to buy heating fuel this year. Instead, they’ll make do with blankets, gas heaters and firewood to get through the winter. Lines at soup kitchens have grown longer.

At the end of the day, as the fish market gradually packed up, a beggar crawled around the stalls, picking up the fish discarded onto the floor and into the gutters. “I’ve been here since 1968. My father, my grandfather ran this business,” Korakis said. “We’ve never seen things so bad.”

Tsiknopoulos’ patience is running out. “I’m thinking of shutting down,” he said, “I think about it every day. That, and leaving Greece.” JUSTICE On a recent morning in a crowded civil cases court in the northern city of Thessaloniki, frustration simmered. Plaintiffs, defendants and lawyers all waited for the inevitable — yet another postponement, yet another court date.

Greece’s sclerotic justice system has been hit by a protracted strike that has left courts only functioning for an hour a day as judges and prosecutors protest salary cuts. For Giorgos Vacharelis, it means his long quest for justice has grown longer. Vacharelis’ younger brother was beaten to death in a fairground in 2003. The attacker was convicted of causing a fatal injury and jailed. The family felt the reasons behind the 24-year-old’s death had never been fully explained, and filed a civil suit for damages. Nearly 10 years later, Vacharelis and his parents had hoped the case would finally be over.

But the court date they were given in late September got caught up the strike. Now they have a new date: Feb. 28, 2014. “This means more costs for them, but above all more psychological damage because each time they go through the murder of their relative again,” said Nikos Dialynas, the family’s lawyer.

Vacharelis and his family are in despair. “If a foreigner saw how the justice system works in Greece, he would say we’re crazy,” said the 35-year-old. “Each time we come to court we get even more outraged,” he said. “We see a theater of the absurd.”

VIGILANTES In September, gangs of men smashed immigrant street vendors’ stalls at fairs and farmers’ markets. Videos posted on the Internet showed the incident being carried out in the presence of lawmakers from the extreme right Golden Dawn party. Formerly a fringe group, Golden Dawn — which denies accusations it has carried out violent attacks against immigrants — made major inroads into mainstream politics. It won nearly 7 percent of the vote in June’s election and 18 seats in the 300-member parliament. A recent opinion poll showed its support climbing to 12 percent.

Immigrant and human rights groups say there has been an alarming increase in violent attacks on migrants. Greece has been the EU’s main gateway for hundreds of thousands of illegal migrants — and foreigners have fast become scapegoats for rising unemployment and crime.

While there are no official statistics, migrants tell of random beatings at the hands of thugs who stop to ask them where they are from, then attack them with wooden bats. Assaults have been increasing since autumn 2010, said Spyros Rizakos, who heads Aitima, a human rights group focusing on refugees. Victims often avoid reporting beatings for fear of running afoul of the authorities if they are in the country illegally, while perpetrators are rarely caught or punished even if the attacks are reported.

“Haven’t we learned anything from history? What we are seeing is a situation that is falling apart, the social fabric is falling apart,” Rizakos said. “I’m very concerned about the situation in Greece. There are many desperate people … All this creates an explosive cocktail.

In response to pressure for more security and a crackdown on illegal migration, the government launched a police sweep in Athens in early August. By late October, police had rounded up nearly 46,000 foreigners, of whom more than 3,600 were arrested for being in the country illegally.

Police say that in the first two months of the operation, there was also a 91 percent drop in the numbers of migrants entering the country illegally along the northeastern border with Turkey, with 1,338 migrants arrested in the border area compared to 14,724 arrested during the same two months in 2011.

HEALTHCARE At a demonstration by the disabled in central Athens, tempers were rising. Healthcare spending has been slashed as the country struggles to reduce its debt. Public hospitals complain of shortages of everything from gauzes to surgical equipment. Pharmacies regularly go on strike or refuse to fill subsidized social security prescriptions because government funds haven’t paid them for the drugs already bought. Benefits have been slashed and hospital workers often go unpaid for months.

And it is the country’s most vulnerable who suffer. “When the pharmacies are closed and I can’t get my insulin, which is my life for me, what do I do? … How can we survive?” asked Voula Hasiotou, a member of an association of diabetics who turned out for the rally.

The disabled still receive benefits on a sliding scale according to the severity of their condition. But they are terrified they could face cuts, and are affected anyway by general spending cuts and the pharmacy problems.

“We are fighting hard to manage something, a dignified life,” said Anastasia Mouzakiti, a paraplegic who came to the demonstration from the northern city of Thessaloniki with her husband, who is also handicapped.

With extra needs such as wheelchairs and home help for everyday tasks such as washing and dressing, many of Greece’s disabled are struggling to make ends meet, Mouzakiti said. “We need a wheelchair until we die. This wheelchair, if it breaks down, how do we pay for it? With what money?”

Costas Kantouris in Thessaloniki, Greece contributed to this story.

Eurozone unemployment rises to new record

October 31, 2012

LONDON (AP) — Unemployment in the 17-country eurozone hit a record high of 11.6 percent in September, official figures showed Wednesday, a sign the economy is deteriorating as governments struggle to get a grip on their three-year debt crisis.

The rate reported by Eurostat, the EU’s statistics office, was up from an upwardly revised 11.5 percent in August. In total, 18.49 million people were out of work in the eurozone in September, up 146,000 on the previous month, the biggest increase in three months.

While the eurozone’s unemployment rate has been rising steadily for the past year as the economy struggled with a financial crisis and government spending cuts, the United States has seen its equivalent rate fall to 7.8 percent. The latest U.S. figures are due Friday.

With the eurozone economy fading, most economists think unemployment will keep increasing over the coming months and that the deteriorating economic picture will soon spook investors again after a brief hiatus.

“Financial markets have calmed somewhat, but we expect that the deteriorating economy will soon enough lead to more crisis headlines,” said Tim Ohlenburg, senior economist at the Center for Economics and Business Research.

Five countries in the eurozone are already in recession — Greece, Spain, Italy, Portugal and Cyprus — and others are expected to join them soon. The region as a whole is expected to be confirmed to be in recession when the first estimate of eurozone economic activity in the third quarter is published mid-November — a recession is officially confirmed after two consecutive quarters of negative growth.

“With surveys suggesting that firms are becoming more reluctant to hire, the eurozone unemployment rate looks set to rise further, placing more pressure on struggling households,” said Ben May, European economist at Capital Economics.

Recession and unemployment make it more difficult for the eurozone to deal with its debt problem — governments need to pay more benefits to the jobless and receive fewer tax revenues. That could push countries to take even more austerity measures, which in turn weighs on economic activity.

Once again, Spain held the ignominious position of having the highest unemployment rate in the eurozone, at 25.8 percent. Greece may yet surpass that — its unemployment rate mushroomed to 25.1 percent in July, the latest available figure, and is due to increase in the face of what many economists are calling an economic depression. The country is forecast to enter its sixth year of recession next year.

Both countries, which are at the heart of Europe’s three-year debt crisis, have youth unemployment above 50 percent. That risks creating a lost generation of workers and is straining the countries’ social fabric. Extremist political groups in Greece and regional separatist parties in Spain have grown in popularity as the economy worsened.

Concern over the social impact of unemployment has also weakened governments and hobbled political decision-making. In Greece, the three parties in the coalition government have tried for months to agree on an austerity package that is necessary for the release of bailout loans to prevent the country’s bankruptcy.

The lowest unemployment rate in the eurozone was Austria’s 4.4 percent. Germany, Europe’s biggest economy, has a jobless rate of only 5.4 percent. Separately, Eurostat reported that inflation in the eurozone fell modestly to 2.5 percent in the year to October, from the previous month’s 2.6 percent. Inflation is still above the European Central Bank’s target of keeping price rises just below 2 percent.

“High and rising unemployment, and relatively sticky inflation, does not bode well for consumer spending across the eurozone, especially as consumers in many countries are also facing muted wage growth and tighter fiscal policy,” said Howard Archer, chief European economist at IHS Global Insight.

Above-target inflation has not prevented the ECB cutting its key interest rate to a record low of 0.75 percent, but few economists think financially strained consumers will get any more help from the bank at next week’s monthly policy meeting.

Protesters greet Indonesian president in London

October 31, 2012

LONDON (AP) — Indonesia’s president met Queen Elizabeth II Wednesday during a visit to Britain that was marred by protesters accusing him of human rights abuses.

Susilo Bambang Yudhoyono and Indonesian first lady Ani Bambang Yudhoyono were welcomed by the queen and her husband, Prince Philip, in a ceremony at London’s Horse Guards Parade. The two couples then took part in a state carriage procession to Buckingham Palace, where the visiting couple will stay during their three-day visit.

About 50 demonstrators holding placards that read “Stop killing Papuans” protested the Indonesian leader’s visit outside Prime Minister David Cameron’s residence at 10 Downing Street. They claim Yudhoyono has committed crimes of humanity against tribal people in West Papua.

Rights groups including the New York-based Human Rights Watch have said that Indonesia’s military is responsible for some of the violence in the southeast Asian country’s restive Papua province, home to a decades-long low-level guerrilla war. Yudhoyono has conceded that Indonesian security forces had overreacted at times, but said the attacks were “on a small scale with limited victims.”

Later Wednesday, two human rights activists tried to reach Yudhoyono’s car, but were stopped by police. Scotland Yard confirmed that they arrested one man for attempting to disrupt the leader’s visit. The man, activist Peter Tatchell, was released without charge.

The queen, who along with her husband visited Indonesia 33 years ago, praised Yudhoyono for leading democratic change in Indonesia during a lavish state banquet she hosted in honor of her guests at a ballroom in Buckingham Palace.

The president is the first foreign leader to be welcomed in a state visit during the queen’s Diamond Jubilee year.

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