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Fiscal cliff deal passed by House of Representatives
January 2, 2013 at 5:21 AM
 

Barack Obama praises passing of bill calling it a fufilment of campaign promise to impose higher taxes on the wealthy

America's long-running fiscal cliff crisis was finally resolved on Tuesday night when Congress voted in favour of a White House compromise that will impose tax rises on the wealthiest and spare the working-class and middle-class.

Barack Obama, in a statement to reporters at the White House, hailed it as a fulfilment of his election campaign promise.

"The central premise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working, middle-class Americans. Tonight we have done that," he said.

Obama, who broke off his holiday with his family in Hawaii to return to Washington to see the crisis resolved, left minutes later to fly back to Honolulu.

Before leaving, he issued a warning that he was tired of these repeated showdowns with Congress and would be looking for alternative ways of doing business in Washington.

Already the Republicans are gearing up for fresh confrontations as early as next month over spending cuts and the debt ceiling.

Obama called instead for a more bipartisan approach on issues such as spending cuts. "The one thing I think hopefully in the new year we will focus on is seeing if whether we can put a package like this together with a little bit less drama, a little less brinkmanship, not scare the heck out of folks quite as much," the president said.

The end of the fiscal cliff drama came when a large bloc of House Republicans, who had stubbornly opposed the bill, caved in and reluctantly joined Democrats to pass it comfortably by 257 to 167.

It exposed the extent of the Republican ideological divide, with 85 voting for and 151 unable to swallow the deal. The Democrats were more cohesive, with only 16 Democrats voting against.

The House vote came after the Senate passed the bill in the early hours of Tuesday morning.

The bill is a short-term, messy compromise. Without the bill, every taxpayer in America would have faced rises from 1 January. Instead, the increases are confined to the top 2% wealthiest part of the population.

The bill also blocked automatic cuts in federal programmes from defence to welfare due to kick in on 1 January. A decision on cuts has been postponed for two months.

Obama, in his White House statement after the House vote, said: "Thanks to the votes of Democrsts and Republicans in Congress I will sign a law that raises the tax on the wealthiest 2% of Americans while preventing a middle-class tax hike that could have sent the economy back into recession."

The Congressional vote amounts to only a partial victory for Obama.
He had promised the new taxes would kick in at $250,000 but, to the dismay of left-wing Democrats, agreed to compromise, in the face of Republican opposition, on $450,000. The Republicans had wanted the threshold set at $1 million.

America went over the 'fiscal cliff' at midnight on 31 December, with every taxpayer facing an automatic rise. The rises proved temporary. The new legislation reverses this, removing the increases from all but the wealthiest.

The White House had warned that failure to reach a deal could unsettle the markets as well as slow economic recovery. It is hoping the deal will calm the markets when Wall Street reopens on Wednesday.

Obama, feeling empowered by his election victory in November, had been hoping that he might at last be able to tame the Republican House members, many of them Tea Party-backed.

Although he won a small victory over the fiscal cliff, it is far from the crushing one he had been hoping for. House Republicans are already planning a series of new showdowns, beginning next month over spending cuts and the debt ceiling.

Obama originally proposed a 'grand bargain' to deal with all the remaining issues in the hope that he would avoid these regular and debilitating stand-offs with Congress.

Mitch McConnell, the Republican leader in the Senate, within minutes of Tuesday's vote, flagged up the coming battles ahead over spending and the debt ceiling.

So too did the Republican House Speaker John Boehner, who said: "Now the focus turns to spending. The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable."

But Obama insisted he had enough of such confrontation. If Congress decides to make an issue of raising the debt ceiling, it would be responsible for the "catastrophic" consequences.

The fiscal cliff crisis has been runnning since Obama won the election in early November. Attempts by Obama and the Republican House Speaker John Boehner to do a deal before Christmas collapsed. So too did negotations between the Democratic Senate leader Harry Reid and his Republican counterpart McConnell.

In the end, the deal was brokered over the weekend by McConnell and vice-president Joe Biden.

The bill was passed by the Senate, with 89 senators in favour and eight against, at 2am on Tuesday, too late to prevent the country breaching the midnight fiscal cliff deadline.

The bill restricts tax rises to individuals earning $400,000 or more a year and households earning $450,000 or more. Estate tax also rises, to 40% from 35%, but inheritances below $5m are exempted from the increase. Benefits for the unemployed are extended for another year.


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Fiscal cliff deal under threat from hardline conservative Republicans
January 1, 2013 at 11:35 PM
 

Senate compromise to avert crisis meets hostile reception from Republican majority in House of Representatives

A hard-fought deal aimed at resolving America's fiscal cliff crisis began to unravel on Tuesday when House Republicans expressed opposition to a bill passed overwhelmingly only hours earlier by the Senate.

President Barack Obama had hailed the Senate vote and called on the House of Representatives to act "without delay".

But House Republicans, after meeting behind closed doors at Congress, were almost unanimous in hostility to the bill, which would raise taxes on the wealthiest. Republicans oppose the rise but their anger is mainly over the failure of the bill to include cuts in federal spending.

Eric Cantor, Republican majority leader in the House, said after the meeting that he did not support the bill.  

Brendan Buck, a spokesman for the Republican House speaker, John Boehner, said: "The speaker and leader laid out options to the members and listened to feedback. The lack of spending cuts in the Senate bill was a universal concern among members in today's meeting. Conversations with members will continue throughout the afternoon on the path forward."

Republican hostility leaves the fiscal cliff negotiations in disarray. Obama had been hoping for a deal to be in place to calm Wall Street before it reopened on Wednesday.

A Democratic congressman, Steve Cohen, in a speech from the floor of the House, expressed the risk if there is no agreement before the markets open. "My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Cohen said. 

Hopes that the crisis had been averted rose when the Senate voted 88-9 in favour of the bill in the early hours of New Year's Day. But that optimism quickly looked misplaced.

The bill had been intended to bring an end to the crisis that resulted in tax rises for all US taxpayers from 1 January.  As well as the tax increases, deep cuts kicked in to federal programmes from defence to welfare.

Without legislation to reverse these, the tax rises and spending cuts stand.  The White House has warned this could send the country's fragile recovery into reverse.

House Republicans, in particular hardline conservatives backed by the Tea Party movement, are taking a gamble. By failing to reach agreement on the deal, they are in danger of being blamed by taxpayers for the rises.  

If the House refuses to back the bill, it could send it back to the Senate asking for amendments.  A major problem is that the Senate could prove unwilling to start undoing a carefully negotiated compromise. Senate Democrats said they would not contemplate any amendments.

Another problem is lack of time. The present, 112th Congress ends at noon on Thursday.

The bill passed by the Senate, with 89 senators in favour and eight against, is a messy, short-term deal that raises taxes on the wealthiest but postpones for two months any consideration of spending cuts. The vote came at 2am on Tuesday, too late to prevent the country breaching the midnight fiscal cliff deadline. 

The bill confines tax rises to individuals earning $400,000 or more a year and households earning $450,000 or more. It postpones spending cuts for two months, to allow further negotiations. Estate tax also rises, to 40% from 35%, but inheritances below $5m are exempted from the increase. Benefits for the unemployed are extended for another year.

The House presents a much bigger hurdle than the Senate, not only because the Republicans have a majority but because of the presence of a bloc of Tea Party-backed Republicans. The Republicans have 241 members to the Democrats' 191.

Boehner's instinct is towards compromise but he has had trouble keeping the Tea Party bloc under control. Theoretically, he has enough votes to push a bill through, but he is coming up for re-election as speaker and will not want to alienate conservative Republicans. Complicating the situation further, his main rival is Cantor.

The Senate deal was thrashed out in the past few days between vice-president Joe Biden and the Republican leader in the Senate, Mitch McConnell. It partly fulfils one of Obama's election campaign promises: to raise taxes on the wealthiest. But Obama was forced to compromise: he wanted higher taxes to kick in at $250,000 a year.

Democrats too are unhappy with the bill, regarding Obama as having given too much ground and seeing the $400,000 threshold as too high.

The White House dispatched Biden to Congress to persuade liberal Democrats in the House to back the bill. Democrats in the House emerged from the briefing with Biden pledging support, and urging Republican colleagues to accept the bill unamended.

Nancy Pelosi, the Democratic minority House leader, said the legislation sent from the Senate represented a "historic" bipartisan compromise. She also put added pressure on Boehner to allow the measures to go to a vote in the House, noting that he had previously suggested any bill from the Senate would be put in front of Representatives.

"That is what he said, that is what we expect. That is what the American people deserve," Pelosi said.

Hardening the resolve of House Democrats, the congressional budget office on Tuesday said the tax cuts and other measures in the Senate-passed bill would add nearly $4tn to federal deficits over a decade.


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Southampton v Arsenal – as it happened | Paul Doyle
January 1, 2013 at 7:21 PM
 

Minute-by-minute report: Arsenal fell behind before battling to a point at St Mary's




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Fiscal cliff deal in balance as House of Representatives weighs options
January 1, 2013 at 6:58 PM
 

Hopes of avoiding tax rises for majority of Americans reside with Republicans as prospect of Tea Party rebellion lingers

The fate of a deal to resolve America's fiscal cliff crisis hung in the balance on Tuesday, in spite of an overwhelming vote in the Senate hours earlier in favour of a compromise bill aimed at ending the long-running saga.

President Barack Obama hailed the Senate vote and called on the House of Representatives to act "without delay". The House, where the Republicans have a majority, held a rare New Year's Day session to discuss what to do next. Obama was looking for a deal to be in place to calm Wall Street before it re-opened on Wednesday.

The office of the Republican House speaker, John Boehner, could not confirm whether he would even schedule a vote on the bill on Tuesday. Boehner, in theory, should be able to push the bill through with a combination of moderate Republicans and Democrats, even in the face of a revolt by Tea Party-backed members of Congress.

The bill passed by the Senate offered a partial victory for Obama, fulfilling an election campaign promise to raise taxes on the wealthiest. But he failed to secure a deal that encompassed the country's bigger economic issues, ensuring another showdown with Congress as early as next month.

Both Republicans and Democrats expressed unhappiness with the bill. Democrats accused Obama of giving too much ground to the Republicans, setting too high a threshold for tax increases to kick in. Republicans claimed the deal failed to address America's burgeoning deficit.

One of the conservative House Republicans, Michele Bachmann, indicated she would vote against, saying the bill increased revenue without dealing with spending. "It is a cynical, planned move by the president," she told Congress.

Republicans scheduled at least two closed-door meetings on Tuesday to discuss the issues with their leadership. The White House dispatched vice-president Joe Biden to Congress to persuade liberal Democrats in the House to back the bill.

The bill passed by the Senate, with 89 senators in favour and eight against, is a messy, short-term deal that raises taxes on the wealthiest but postpones for two months any consideration of spending cuts. The vote came at 2am on Tuesday, too late to prevent the country breaching the midnight fiscal cliff deadline. Taxes for all Americans automatically went up on 1 January and all federal programmes, from defence to welfare, faced deep spending cuts.

To reverse this, the House must also vote for the bill, which confines tax rises to individuals earning $400,000 or more a year and households earning $450,000 or more. It postpones spending cuts for two months, to allow further negotiations. Estate tax also rises, to 40% from 35%, but inheritances below $5m are exempted from the increase. Benefits for the unemployed are extended for another year.

The House presents a much bigger hurdle than the Senate, not only because the Republicans have a majority but because of the presence of a bloc of Tea Party-backed Republicans. The Republicans have 241 members to the Democrats' 191.

Boehner's instinct is towards compromise but he has had trouble keeping the Tea Party bloc under control. Theoretically, he has enough votes to push a bill through, but he is coming up for re-election as Speaker and will not want to alienate conservative Republicans.

The deal was thrashed out in the past few days between Biden and the Republican leader in the Senate, Mitch McConnell. It partly fulfills one of Obama's election campaign promises: to raise taxes on the wealthiest. But Obama was forced to compromise: he wanted higher taxes to kick in at $250,000 a year.

In a statement, the White House welcomed the compromise: "For the first time in 20 years, Congress will have acted on a bipartisan basis to vote for significant new revenue. This means millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced tax benefits."

The statement added that 98% of families would not face tax rises, assuming the House also voted for the deal.

Obama had wanted, as part of a deal, an assurance from the Republicans that they would not mount another showdown in a few months' time, when he has to raise the debt ceiling. But he failed to get this, ensuring yet another confronation between the White House and Repubicans in Congress in late February and early March.

The Republican senator John McCain, who voted for the deal, said: "Despite my disappointment with many aspects of this agreement, I cannot in good conscience stand by and watch taxes go up on all Americans.

"However, it should be embarrassing to all of us that it took until the last hours of the last day of the year to address an issue we should have dealt with months ago. This marks another sad chapter in what has been the least productive Congress since 1947."

Details of the deal

• Taxes will rise for individuals earning more than $400,000 and households that make more then $450,000, with the rate rising to a maximum of 39.6% from the current 35%. Capital gains and dividends in excess of those amounts would be taxed at 20%, up from 15%

• Estate tax will rise to 40% on the portion of estates exceeding $5m in value. At the insistence of Republicans, the $5m threshold would rise each year with inflation.

• Tax breaks will be maintained for families with children, for low-earning taxpayers and for those with a child in college. The alternative minimum tax, which was due to expand to affect an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000, remains at its present level.

• The deal leaves untouched a scheduled 2 percentage point increase in the payroll tax, ending a temporary reduction enacted two years ago to help revive the economy.

• Benefits for the long-term unemployed, which were about to expire for an estimated two million jobless Americans, will be extended for a year.

• A 27% cut in fees for doctors who treat Medicare patients will be postponed for a year. Also included in the deal is a provision to prevent a threatened spike in milk prices.


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Higgs boson was just a start for Cern's atom smasher – other mysteries await
January 1, 2013 at 6:57 PM
 

The Large Hadron Collider will shut down for an overhaul in preparation for exploring questions of dark matter, extra dimensions and other universes

When it comes to shutting down the most powerful atom smasher ever built, it's not simply a question of pressing the off switch.

In the French-Swiss countryside on the far side of Geneva, staff at the Cern particle physics laboratory are taking steps to wind down the Large Hadron Collider. After the latest run of experiments ends next month, the huge superconducting magnets that line the LHC's 27km-long tunnel must be warmed up, slowly and gently, from -271 Celsius to room temperature. Only then can engineers descend into the tunnel to begin their work.

The machine that last year helped scientists snare the elusive Higgs boson – or a convincing subatomic impostor – faces a two-year shutdown while engineers perform repairs that are needed for the collider to ramp up to its maximum energy in 2015 and beyond. The work will beef up electrical connections in the machine that were identified as weak spots after an incident four years ago that knocked the collider out for more than a year.

The accident happened days after the LHC was first switched on in September 2008, when a short circuit blew a hole in the machine and sprayed six tonnes of helium into the tunnel that houses the collider. Soot was scattered over 700 metres. Since then, the machine has been forced to run at near half its design energy to avoid another disaster.

The particle accelerator, which reveals new physics at work by crashing together the innards of atoms at close to the speed of light, fills a circular, subterranean tunnel a staggering eight kilometres in diameter. Physicists will not sit around idle while the collider is down. There is far more to know about the new Higgs-like particle, and clues to its identity are probably hidden in the piles of raw data the scientists have already gathered, but have had too little time to analyse.

But the LHC was always more than a Higgs hunting machine. There are other mysteries of the universe that it may shed light on. What is the dark matter that clumps invisibly around galaxies? Why are we made of matter, and not antimatter? And why is gravity such a weak force in nature? "We're only a tiny way into the LHC programme," says Pippa Wells, a physicist who works on the LHC's 7,000-tonne Atlas detector. "There's a long way to go yet."

The hunt for the Higgs boson, which helps explain the masses of other particles, dominated the publicity around the LHC for the simple reason that it was almost certainly there to be found. The lab fast-tracked the search for the particle, but cannot say for sure whether it has found it, or some more exotic entity.

"The headline discovery was just the start," says Wells. "We need to make more precise measurements, to refine the particle's mass and understand better how it is produced, and the ways it decays into other particles." Scientists at Cern expect to have a more complete identikit of the new particle by March, when repair work on the LHC begins in earnest.

By its very nature, dark matter will be tough to find, even when the LHC switches back on at higher energy. The label "dark" refers to the fact that the substance neither emits nor reflects light. The only way dark matter has revealed itself so far is through the pull it exerts on galaxies.

Studies of spinning galaxies show they rotate with such speed that they would tear themselves apart were there not some invisible form of matter holding them together through gravity. There is so much dark matter, it outweighs by five times the normal matter in the observable universe.

The search for dark matter on Earth has failed to reveal what it is made of, but the LHC may be able to make the substance. If the particles that constitute it are light enough, they could be thrown out from the collisions inside the LHC. While they would zip through the collider's detectors unseen, they would carry energy and momentum with them. Scientists could then infer their creation by totting up the energy and momentum of all the particles produced in a collision, and looking for signs of the missing energy and momentum.

One theory, called supersymmetry, proposes that the universe is made from twice as many varieties of particles as we now understand. The lightest of these particles is a candidate for dark matter.

Wells says that ramping up the energy of the LHC should improve scientists' chances of creating dark matter: "That would be a huge improvement on where we are today. We would go from knowing what 4% of the universe is, to around 25%."

Teasing out the constituents of dark matter would be a major prize for particle physicists, and of huge practical value for astronomers and cosmologists who study galaxies.

"Although the big PR focus has been on the Higgs, in fact looking for new particles to provide clues to the big open questions is the main reason for having the LHC," says Gerry Gilmore, professor of experimental philosophy at the Institute of Astronomy in Cambridge.

"Reality on the large scale is dark matter, with visible matter just froth on the substance. So we focus huge efforts on trying to find out if dark matter is a set of many elementary particles, and hope that some of those particles' properties will also help to explain some other big questions.

"So far, astronomy has provided all the information on dark matter, and many of us are working hard to deduce more of its properties. Finding something at the LHC would be wonderful in helping us in understanding that. Of course one needs both the LHC and astronomy. The LHC may find the ingredients nature uses, but astronomy delivers the recipe nature made reality from."

Another big mystery the Large Hadron Collider may help crack is why we are made of matter instead of antimatter. The big bang should have flung equal amounts of matter and antimatter into the early universe, but today almost all we see is made of matter. What happened at the dawn of time to give matter the upper hand?

The question is central to the work of scientists on the LHCb detector. Collisions inside LHCb produce vast numbers of particles called beauty quarks, and their antimatter counterparts, both of which were common in the aftermath of the big bang. Through studying their behaviour, scientists hope to understand why nature seems to prefer matter over antimatter.

"Unlike supersymmetry or the Higgs, there's no theory of antimatter that we can test," says Tara Shears, a physicist who works on the LHCb detector. "We don't know why antimatter behaves a little differently to normal matter, but perhaps that difference can be explained by a deeper underlying theory of particle physics, which includes new physics that we haven't found yet."

Turning up the energy of the LHC may just give scientists an answer to the question of why gravity is so weak. The force that keeps our feet on the ground may not seem puny, but it certainly is. With just a little effort, we can jump in the air, and so overcome the gravitational pull of the whole six thousand billion billon tonnes of the planet. The other forces of nature are far stronger.

One explanation for gravity's weakness is that we experience only a fraction of the force, with the rest acting through microscopic, curled up extra dimensions of space. "The gravitational field we see is only the bit in our three dimensions, but actually there are lots of gravitational fields in the fourth dimension, the fifth dimension, and however many more you fancy," says Andy Parker, professor of high energy physics at Cambridge University. "It's an elegant idea. The only price you have to pay is that you have to invent these extra dimensions to explain where the gravity has gone."

The rules of quantum mechanics say that particles behave like waves, and as the LHC ramps up to higher energies the wavelengths of the particles it collides become ever shorter. When the wavelengths of the particles are small enough to match the size of the extra dimensions, they would suddenly feel gravity much more strongly.

"What you'd expect is that as you reach the right energy, you suddenly see inside the extra dimensions, and gravity becomes big and strong instead of feeble and weak," says Parker. The sudden extra pull of gravity would cause particles to scatter far more inside the machine, giving scientists a clear signal that extra dimensions were real.

Extra dimensions may separate us from realms of space we are completely oblivious to. "There could be a whole universe full of galaxies and stars and civilisations and newspapers that we didn't know about," says Parker. "That would be a big deal."


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Gunmen kill seven Pakistani aid workers
January 1, 2013 at 6:33 PM
 

Shooting of six female aid workers and a male doctor appears to be latest attack by militants on public health teams

Gunmen have killed six Pakistani female aid workers and a male doctor in what appears to be the latest attack by Islamic militants on teams involved in public health campaigns.

Recent days have been violent in the troubled country, with dozens dying in a string of terrorist attacks. Analysts blame many of the strikes on militant groups keen to demonstrate their ability to cause casualties and destruction after the government rejected the Taliban's call for ceasefire negotiations late last month.

"They are signalling to the people that the pain they are suffering is in fact the government's fault because their offer of peace was rejected," said Ejaz Haider, of the Jinnah Institute, a thinktank in the capital of Islamabad. "There is likely to be more violence as they ramp up their campaign in coming weeks."

The militants have been stung by a loss of public support following indiscriminate attacks last year, a lack of economic development in the areas where they are strong, deals concluded by the authorities with some major local extremist commanders, and ongoing strikes by US drones.

Tuesday's attack came in Swabi district, about 45 miles (75km) north-west of Islamabad, and was the first attack on aid workers in the area.

In Karachi, a bomb exploded near the headquarters of the Muttahida Quami Movement (MQM), a political party in the city, killing at least one and injuring dozens.

The city has been the site of a growing number of gunfights, bombing and assassinations in recent months as ethnic, sectarian and political factions, as well as criminals, struggle for power and influence. Leaders of militant religious groups have threatened to target the MQM which has vocally opposed extremism.

The coalition of factions known as the Pakistani Taliban is mainly based in the north-west of the country but also has a presence in Karachi. They have repeatedly threatened health workers with violence, claiming the campaigns are part of western plots to spy, make Muslims infertile or otherwise harm the community.

A more mundane reason for the threats is that the presence of non-governmental organisations threatens the extremists' authority in areas which they are finding increasingly difficult to control simply through violence.

Two weeks ago workers vaccinating children against polio were targeted in a string of attacks in the southern port city of Karachi as well as in restive areas along the Afghan border. Nine, mostly young women were killed.

The workers who died on Tuesday were employed by Support with Working Solutions, which ran a school and dispensary in Swabi and helped vaccinate children against polio. The head of the agency, Javed Akhtar, said: "This seemed to be part of the campaign against the polio drive by certain anti-polio elements."

The ongoing violence in Pakistan has regional implications. One possible reason for Pakistan's release of several high-ranking figures in the Afghan Taliban in recent months – eight were reported to have been released on Sunday, bringing the total to more than 20 – is that policymakers and strategists are increasingly convinced that the instability in the west of the country is linked to ongoing conflict in the neighbouring state, and that a resolution for both requires a better relationship with Kabul.

"There has been a genuine Pakistani policy to reach out to Afghanistan for nearly a year now," said Haider. "The aim is zero-conflict in the region."

Pakistan has long been accused of playing a double game: backing elements within the Taliban who are felt to be useful proxies in the continuing struggle for power in Afghanistan, while playing the role of a Washington ally. Mullah Mohammed Omar, the reclusive supreme leader of the Taliban, is thought to have been based in Pakistan since fleeing Afghanistan when his regime collapsed in December 2001.

However some analysts are convinced Pakistani policy has shifted.

Those released at the weekend included Mullah Nooruddin Turabi who became infamous as the head of the Taliban's justice ministry when the Islamic extremist militia were in power in Kabul from 1996 to 2001.

The release of the Taliban figures has been a key demand of Afghan negotiators to the Pakistani government. It is hoped they can act as intermediaries between the Afghan government and those Taliban commanders who are still fighting international troops in Afghanistan. Western combat troops are due to have withdrawn from the country by the end of 2014.

In recent weeks the nascent peace process in Afghanistan, which had looked to be languishing, has found a new momentum. Representatives of the Taliban recently travelled to France to attend a roundtable discussion organised by a thinktank at which representatives of the Afghan government were present. Islamabad appears to have supported the initiative.

"It doesn't matter why the Pakistanis have evolved their position. The point is things look like they are moving again now, which is hopeful," said one European diplomat based in Islamabad, speaking on condition of anonymity. "But these things have a habit of hitting speed bumps just when they get going."

The diplomat said a real "game-changer" would be the release of Mullah Abdul Ghani Barader, Omar's deputy who is seen as one of the few individuals with both the credibility and the inclination to engage in serious negotiations.


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Southampton v Arsenal – live! | Paul Doyle
January 1, 2013 at 5:08 PM
 

Minute-by-minute report: Can Arsenal continue their winning ways? Find out with Paul Doyle




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New Year's Day football clockwatch – as it happened | John Ashdown
January 1, 2013 at 4:58 PM
 

Minute-by-minute report: Re-live all the action from the first day of 2013 with John Ashdown




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New Year's Day football clockwatch – live! | John Ashdown
January 1, 2013 at 3:39 PM
 

Minute-by-minute report: Follow all the action from the first day of 2013 with John Ashdown




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Indian bus rape: Delhi sees rush for guns
January 1, 2013 at 3:39 PM
 

Hundreds of women inquire about gun licences following woman's murder, showing the lack of faith in law enforcement

Hundreds of women in Delhi have applied for gun licences following the gang rape and murder of a 23-year-old woman by six men in a bus in the city last month.

The news underlines the widespread sense of insecurity in the city, deep before the incident and deeper now, and the lack of faith in law enforcement agencies.

The ashes of the victim of the attack – who died on Friday after 13 days in hospitals in India and Singapore and was cremated in Delhi in a secret ceremony under heavy security on Sunday – were scattered on the surface of the Ganges River, sacred to Hindus, in northern India on Tuesday.

The case has provoked an unprecedented debate about endemic sexual harassment and violence in India. Tens of thousands have protested across the country, calling for harsher laws, better policing and a change in culture.

Politicians, initially caught off-guard, have now promised new legislation to bring in fast-track courts and harsher punishments for sexual assault. The six men accused of the attack are to be formally charged with murder later this week and potentially face execution.

Indian media are currently reporting incidents of sexual violence that would rarely gain attention previously. In the last 24 hours these have included a teenager fleeing repeated abuse by her brother, who was allegedly assaulted on a bus by a conductor, a 15-year-old held for 15 days by three men in a village in Uttar Pradesh and repeatedly assaulted, an 11-year-old allegedly raped by three teenagers in the northeastern city of Guwahati and two cases of rape in the city of Amritsar.

One case reported on Tuesday involved a woman, also in a village in Uttar Pradesh, who suffered 90% burns after being doused in kerosene, allegedly by a man who had been stalking her for months.

There were signs that a further taboo was about to be broken when one of India's best-known English-language television presenters asked viewers who had experienced abuse from a family member to contact her.

The rush for firearms will cause concern however. Police in Delhi have received 274 requests for licences and 1,200 inquiries from women since 18 December, two days after the woman and a male friend were attacked in a bus cruising on busy roads between 9pm and 10pm.

"Lots of women have been contacting us asking for information about how to obtain licences Any woman has a threat against her. It's not surprising. There are fearless predators out there," said Abhijeet Singh of the campaign group Guns For India.

Delhi police received around 500 applications for the whole of 2011, up from 320 the previous year.

Hundreds of women had come in person to the police licensing department in the city, the Times of India reported.

"We had to patiently tell them that one needs to have a clear danger to one's life to be given a licence. However some … said that with even public transport no longer safe in the city they just cannot take chances," an unnamed official told the newspaper.

There are estimated to be 40m guns in India, the second highest number in the world after the US. Licences are hard to obtain and most are illegal weapons, many manufactured in backstreet workshops. Official ownership levels remain low – three guns for every 100 people – but in recent years, the number of women holding arms has risen. Most are wealthy and worried about theft or assault.

There are fears the attack will lead to further restrictions on women in India, who already suffer significant constraints.

Elders in Matapa, in the poverty-stricken Indian state of Bihar, banned the use of mobile phones for teenage girls and warned them against wearing "sexy" clothes. They claim the move will check rape cases and restore "social order". Other villages nearby are planning similar bans, locals said.

One member of parliament in Rajasthan, the northwestern state, also called for a ban on skirts for schoolgirls to keep them away from "men's lustful gazes''. Banwari Lal Singhal said private schools allowing students to wear skirts explained increased sexual harassment locally.

Matapa is in southern Bihar's Aurangabad district – the region from where one of the Delhi gang-rape accused, Akshay Thakur, comes from. The order was issued after a formal meeting with villagers, council officials and school teachers on Sunday. "Almost every villager pressed us to ban the mobile phones use by the schoolgirls saying they are proving quite dangerous for the society and corrupting traditional values," the local village council head Sushma Singh told the Guardian on Tuesday.

Protesters were angered by the news. "Our sister will have died in vain if all that is happening after is our fear is greater and ladies are more unfree," said Deepti Anand, a 21-year-old student in Delhi who has attended demonstrations most days in recent weeks.

Additional reporting by Manoj Chaurasia, Patna


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Maryland holds seven gay marriages to mark arrival of new year
January 1, 2013 at 3:26 PM
 

Baltimore mayor celebrates "remarkable achievement for Maryland" by officiating at 12.30am ceremony

Seven gay couples rang in the New Year in Maryland with wedding bells early Tuesday, marking the first wave of nuptials since voters in the state backed the legalization of same-sex marriage. The couples were pronounced lawfully married at the 12.30am ceremony on New Year's Day in Baltimore's City Hall.

Baltimore mayor Stephanie Rawlings-Blake officiated at the wedding of the first of the couples, 68-year-old James Scales and 60-year-old William Tasker. The couple have been together for 35 years. The mayor joked that everyone had come to celebrate a relationship that began many years ago – "and I mean that, many years ago." Soon after the November vote legalizing gay marriage, Scales, a long-time city employee, asked the mayor to marry the two.

The mayor's press secretary, Ian Brennan, said the mayor "wanted to make a statement to tell gay, lesbian, transgendered couples that they're welcome here".

Voters in Maryland, Maine and Washington state approved same-sex unions on election day, becoming the only states to pass such a measure by popular vote. Nine of the 50 US states and Washington DC have legalized gay marriage. Thirty-one states have passed constitutional amendments banning it.

Rawlings-Blake called the 6 November vote "a remarkable achievement for Maryland" and welcomed friends and families of the couples to witness history at the early morning ceremony. "We are excited to open City Hall to host some of the first wedding ceremonies in our great state," she said.

Public opinion has been shifting in favor of allowing same-sex marriage. A Pew Research Center survey from October found that 49% of Americans favored allowing gay marriage, with 40% opposed. In May, Barack Obama became the first US president to say he believed same-sex couples should be allowed to get married.

The US Supreme Court has agreed to review two challenges to federal and state laws that define marriage as a union between a man and a woman. The nation's highest court said last month it would review a case against a federal law that denies married same-sex couples the federal benefits that heterosexual couples receive. It also will look at a challenge to California's ban on gay marriage, known as Proposition 8, which voters narrowly approved in 2008.

Washington state's law legalizing same-sex unions took effect on 9 December; Maine followed on 29 December.


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Scores killed in Ivory Coast fireworks stampede
January 1, 2013 at 2:38 PM
 

At least 60 dead and estimated 200 injured after New Year's Eve crush at Abidjan stadium

About 60 people have been crushed to death in a stampede outside a stadium in Ivory Coast's main city of Abidjan after a New Year's Eve fireworks display.

The incident took place near Félix Houphouët-Boigny stadium where a crowd had gathered to watch fireworks, emergency officials said. One of the injured at a hospital said security forces had arrived to break up the crowd, triggering a panic in which many people fell over and were trampled.

Other reports said the crush happened when thousands of people who were trying to leave the festivities met another large crowd arriving at the same time.

"The provisional death toll is 60 and there are 49 injured," the interior minister, Hamed Bakayoko, said in a statement on national television. "During the fireworks everything was proceeding normally," Bakayoko said. "At the end of it people wanted to go home, back to their home districts.

"Near the Hotel Tiama and the Houphouët-Boigny stadium there was a stampede. We were notified of injuries and deaths, and as regards casualties, we learnt that there was a heavy toll. The circumstances surrounding the incident will form the subject of an investigation."

President Alassane Ouattara, visiting injured people at the hospital, called the incident a national tragedy and said an investigation was under way to determine what had happened.

A Reuters correspondent said bloodstains and abandoned shoes littered the scene outside the stadium on Tuesday morning.

Assetou Toure, a cleaner, said: "My two children came here yesterday. I told them not to come but they didn't listen. They came when I was sleeping. What will I do?" She did not know if her children had escaped unhurt.

According to the Associated Press a state radio and a fire department rescue worker, estimated that an additional 200 people were injured. The emergency worker said a crowd of thousands gathered at the Houphouët-Boigny Stadium to see the fireworks and after the display the crowds in the street became a crush in which people were trampled.

The incident was the worst of its kind in Abidjan since 2010, when a stampede at a stadium during a football match killed 18 people.

Ivory Coast, once a stable economic hub for west Africa, is struggling to recover from the 2011 civil war in which more than 3,000 people were killed.


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Scores killed in Ivory Coast fireworks stampede
January 1, 2013 at 2:38 PM
 

At least 60 dead and 49 injured after security forces tried to break up New Year's Eve crowd gathered near Abidjan stadium

About 60 people have been crushed to death in a stampede outside a stadium in Ivory Coast's main city of Abidjan after a New Year's Eve fireworks display.

The incident took place near Félix Houphouët-Boigny stadium where a crowd had gathered to watch fireworks, emergency officials said.

One of the injured, speaking to Reuters at a hospital, said security forces had arrived to break up the crowd, triggering a panic in which many people fell over and were trampled.

"The provisional death toll is 60 and there are 49 injured," the interior minister, Hamed Bakayoko, said in a statement on national television.

President Alassane Ouattara, visiting injured people at the hospital, called the incident a national tragedy and said an investigation was under way to determine what had happened.

A Reuters correspondent said bloodstains and abandoned shoes littered the scene outside the stadium on Tuesday morning.

The incident was the worst of its kind in Abidjan since 2010, when a stampede at a stadium during a football match killed 18 people.

Ivory Coast, once a stable economic hub for west Africa, is struggling to recover from a 2011 civil war in which more than 3,000 people were killed.


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Can Afghan troops hold off the Taliban after Nato withdraws?
January 1, 2013 at 2:19 PM
 

The Afghan army is showing signs of strength, but it is far from battle-ready and both logistical and human obstacles remain

The umbilical connection between the US marines at Camp Leatherneck and the new model Afghan army in Camp Shorabak is a sandy chicane known as Friendship Gate, where Helmand's Afghan garrison draws sustenance from its outgoing foreign advisers. Its dominant feature is a fortified American-manned heavy machine gun, pointing towards the Afghans.

The formidable weapon permanently aimed at a supposed ally is silent testimony to a relationship that is crucial to Helmand's future but remains a volatile mix of dependence, mutual admiration and deep distrust.

The Afghan National Army (ANA) 215th Corps is now 17,000-strong, gaining in confidence and competence and, according to local polling, generally well-respected. It has managed to hold on to the main population areas in Helmand in the face of a Taliban attempt to retake lost territory and as result the province's towns are much safer than they were a year ago.

But the ANA still cannot fight on its own. Only one of the 215th Corps' four brigades is anywhere near full battle readiness. In fact, a Pentagon report (pdf) in early December revealed that only one of the ANA's 23 brigades across the country had reached that point. The Taliban's success in infiltrating its ranks has contributed to the number of "green-on-blue", or insider attacks, in which Afghan troops turn their guns on their foreign mentors. There were 12 such attacks in Helmand in 2012, all fatal, sawing away at the bonds of trust on which the Nato exit strategy is based.

Even more importantly, there are early signs that the ANA may be struggling to hold the line on a critical front in the war – the ability to protect Afghan civilians from the Taliban. The latest UN figures show that the Taliban are now responsible for 84% of civilian deaths in Afghanistan, while the government and its foreign allies are responsible for only 6% (10% are unattributable). And the data for the August-October period shows a dramatic spike in those killings, up 28% from the same period last year, suggesting that ordinary Afghans may be becoming more vulnerable as the Afghan army takes responsibility for protecting them.

The 215th Corps deputy commander, Brigadier General Ghulam Farouq Parwani, a 30-year veteran of Afghanistan's many wars, insists his men can handle the Taliban threat on their own after US and British combat troops leave Helmand by the end of 2014. But only if they are given the tools for the job.

"If the promises made to the ANA are fulfilled, the Taliban will never regroup," Farouq said. "The only thing we lack here is equipment. We need artillery support. We have been promised a mobile strike force of 800 men with up-armour [shaped to deflect road mines] and advanced weaponry. And we need our own aviation, because sometimes our coalition partners are busy."

The accelerating departure of the foreign forces is felt everywhere. There were 21,000 US marines in Helmand at the height of the surge last year. Now there are just 6,500. With the departing troops having taken their helicopters and aircraft with them, moving troops around the province is harder. The exodus of US armoured cars is even more noticeable. The 215th Corps suffered 600 casualties in 2012 – 150 dead and 450 wounded, mostly from roadside bombs, or improvised explosive devices (IEDs), increasingly the Taliban weapon of choice.

Farouq railed against the lack of capacity of Afghan police, locally recruited forces whose development has lagged far behind the army. As a consequence, the 215th has been stuck providing guards for the main roads instead of fighting the Taliban.

"The ANP [Afghan National Police] has limited capability so our forces are busy with checkpoints," he said. "The police lack organisation, structure and because it is recruited locally, sometimes it has men available, sometimes not. If the ANP becomes capable and does its job, the ANA can get back to fighting."

Farouq's complaints about the police drew the intervention of his US advisers, who suggested he stick to talking about the army. The Afghan general smiled tightly and took up his tirade once more. As the Americans draw down their forces, their clout is visibly weakening.

The mentoring relationship in Helmand has also been hit hard by the insider attacks. It is a small number compared with the total number of daily interactions, but has had a disproportionate impact on trust, as the machine gun demonstrates.

Afghan attempts to impose stricter vetting of recruits has had mixed results. Brigadier Stuart Skeates, the British deputy commander of the International Security Assistance Force (Isaf) in Helmand, believes the problem and its solution may lie deeper.

"Part of the reason why we have had a number of insider attacks, as they're called, is because the soldiers and policemen are susceptible to Taliban messaging; maybe not directly, but they hear stuff on the radio, on the TV," he said. "They hear anecdotes from home. They are susceptible to local mullahs, both at home and here, and are in many cases very suggestible."

Skeates said a British army imam, Asim Hafiz, was leading an effort to counter the Taliban influence among the mullahs but it was a long-term solution, time was short and much hung on the ability of Afghan and foreign troops to trust each other.

The greatest success in Helmand over the past year has been the security of the towns. Even fierce battlegrounds, such as Sangin, were now relatively calm, allowing the return of commerce and the replacement of poppy crops with alternative ones.

Skeates produced a pair of slides showing Sangin town in 2011 and 2012. In the first the circle representing the district centre was largely obscured by coloured dots marking insurgent attacks. In the second, it was mostly clear.

"We are pushing the violence away from the district centre where the majority of the population live, and that, in a counter-insurgency operation, is incredibly important because if you don't see bombs going off on a regular basis, if you don't hear gunfire near you on a regular basis, your perception is that it is safe. The reality, in fact, is that it is secure," he said.

Across the country, Nato's claim is that 80% of the fighting now takes place where only 20% of the population lives, suggesting that the overwhelming majority of the population is leading a more peaceful life. The UN data shows that in the first 10 months of 2012 civilian casualties were actually 4% down on the year before, the first time that has happened for a decade. But the rise in the autumn was a source of concern, suggesting the gains were in danger of being eroded.

"The insurgency has also retained its capability to carry out attacks at roughly the same level as last year," the Pentagon report conceded. "Despite the tactical progress of ANSF-Isaf joint operations, the insurgency remains adaptable with a regenerative capacity. It retains the capability to emplace substantial numbers of improvised explosive devices and conduct high-profile attacks."

In Sangin one of the great successes of last year was the election of 33 members of a district community council, the first flowering of local democracy. But withing a couple of months four of them had been murdered by the insurgents.

The people went back to the polls to elect replacements, but that resilience and the staying power of the Afghan army will be brutally tested as the Nato troops leave.


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Benito Mussolini: a dictator for all seasons in Italy?
January 1, 2013 at 1:07 PM
 

Reverence for Il Duce, who adorns calendars and T-shirts, is spreading from neo-fascist youths to the Italian mainstream

Pasquale Moretti pulls the latest Benito Mussolini calendar off the shelf at his Rome cafe and flips it open to a photo of the pouting, strutting dictator taking part in a grain harvest.

"I was born in that era and he put bread on the table," said the 78-year-old. "I cannot betray my culture."

Every year, around this time, Mussolini calendars appear in newspaper kiosks up and down Italy, offering a year's supply of photos of the fascist leader.

They are often tucked away with the specialist magazines, but according to the manager of one firm that prints them, they are much in demand.

"We are selling more than we did 10 years ago," said Renato Circi, the head of Rome printer Gamma 3000. "I didn't think it was still a phenomenon, but young people are now buying them too."

Sixty-eight years after the fascist dictator was strung up with piano wire from a petrol station in Milan following his crushing of Italian democracy, his racial laws and his disastrous alliance with Adolf Hitler, Mussolini has quietly taken his place as an icon for many Italians.

Among his adherents today are the masked, neo-fascist youths who mounted raids on Rome schools this autumn to protest against education cuts, lobbing smoke bombs in corridors and yelling "Viva Il Duce".

A masked mob which ambushed Spurs fans drinking in a Rome pub in November, was also suspected of neo-fascist sympathies. When Spurs played Lazio the following night, Lazio fans chanted "Juden Tottenham", using the German word for Jew in reference to the club's Jewish heritage.

But the cult of Il Duce has also slipped into the mainstream. The decision by a town south of Rome to spend €127,000 (£100,000) of public funds this year on a tomb for Rodolfo Graziani, one of Mussolini's most blood-thirsty generals, was met with widespread indifference.

Other more mundane examples include the leading businessman who proposed renaming Forli airport in Emilia Romagna – the region of northern Italy where the dictator was born – as Mussolini airport, or the headmaster in Ascoli Piceno who tried to hang a portrait of the dictator in his school.

The man who gets some credit for dusting off Mussolini's reputation is Silvio Berlusconi, who famously described the dictator's exiling of his foes to remote villages as sending them on holiday.

Berlusconi's subtle rehabilitation of Mussolini came as he brought Italy's post-fascists, led by Gianfranco Fini, into his governing coalition in 1994 and 2001, following the "years of lead" in the 1970s and early 80s, when neo-fascists and communist sympathisers battled in the streets.

"Today, Mussolini's racial laws against Jews remain an embarrassment, but people don't care about his hunting down anti-fascists," said Maria Grazia Rodotà, a journalist at Italy's Corriere della Sera. "That became one of Berlusconi's jokes."

Admiration for Mussolini is common in Berlusconi's circle. Showbusiness agent Lele Mora, who is now on trial for allegedly pimping for the former prime minister, downloaded an Italian fascist song as his mobile ring tone, while Berlusconi's long-time friend, the senator Marcello Dell'Utri, has described Mussolini as an "extraordinary man of great culture".

After Mussolini's murder by partisans in 1945 – as the Allies pushed up through Italy – the country did not exorcise the ghosts of fascism, as Germany sought to. A 1952 law forbidding fascist parties or the veneration of fascism has never been seriously enforced.

"It was not used partly because banning parties was potentially anti-constitutional, and also due to a sneaking admiration for fascism," said James Walston, professor of politics at the American University of Rome.

Decades on, the memory of Mussolini as the strong man who put a post office in every piazza and made the trains run on time has been decoupled from the ideology of fascism, said writer Angelo Meloni.

"He is now a pop icon, an arch-Italian, a personality whose legend is linked to the years of consensus in Italy," he said. "Just as people who don't go to church like Padre Pio, so 90% of those who buy Mussolini calendars will never have voted for a fascist party," he said.

Gamma 3000 promotes Mussolini calendars on its website alongside ones featuring the Catholic saint and mystic Padre Pio, guerilla leader Che Guevara, topless models and cute kittens.

But for Italy's modern neo-fascist groups, including Casapound, Il Duce is still very much about ideology.

"Whoever buys the calendar admires his work – the two things cannot be separated," said the group's vice-president, Simone di Stefano.

"There is a need today for his politics, for someone who will put the banks and finance at the service of Italy," he said. "Youngsters who come to us already see Mussolini as the father of this country."

Casapound's student offshoot organisation, Blocco Studentesco, is a mainstay in Rome youth politics, polling 11,000 votes in school council elections in 2009 and even enrolling the mayor of Rome's 17-year-old son, who was photographed on holiday in 2012 giving a straight-armed fascist salute with friends.

The well-to-do streets around Piazza Ponte Milvio, north of Rome's football stadium, are today plastered with posters and graffiti by numerous neo-fascist groups, including Casapound, and the local bars have become a hangout for gangs of rightwing lads in regulation Fred Perry shirts and Ray Ban Wayfarers.

"Many teenagers now avoid Ponte Milvio since the people who go there have shifted further to the right," said Rodotà.

Further down the road, the entrance to the stadium is marked by a massive fascist-era obelisk, still standing, with "Mussolini" written in huge letters down the front. Nearby, the bar run by Pasquale Moretti, where Lazio fans meet before games, contains a mini-supermarket of fascist memorabilia, from bottles of wine with Mussolini's portrait on the label, to fascist flags and T-shirts, and oil portraits of Il Duce.

"He built housing for workers, something no Roman emperor did," said Moretti. "How can I not respect that?"


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Benito Mussolini: a dictator for all seasons in Italy?
January 1, 2013 at 1:07 PM
 

Reverence for Il Duce, who adorns calendars and T-shirts, is spreading from neo-fascist youths to the Italian mainstream

Pasquale Moretti pulls the latest Benito Mussolini calendar off the shelf at his Rome cafe and flips it open to a photo of the pouting, strutting dictator taking part in a grain harvest.

"I was born in that era and he put bread on the table," said the 78-year-old. "I cannot betray my culture."

Every year, around this time, Mussolini calendars appear in newspaper kiosks up and down Italy, offering a year's supply of photos of the fascist leader.

They are often tucked away with the specialist magazines, but according to the manager of one firm that prints them, they are much in demand.

"We are selling more than we did 10 years ago," said Renato Circi, the head of Rome printer Gamma 3000. "I didn't think it was still a phenomenon, but young people are now buying them too."

Sixty-eight years after the fascist dictator was strung up with piano wire from a petrol station in Milan following his crushing of Italian democracy, his racist laws and his disastrous alliance with Adolf Hitler, Mussolini has quietly taken his place as an icon for many Italians.

Among his adherents today are the masked, neo-fascist youths who mounted raids on Rome schools this autumn to protest against education cuts, lobbing smoke bombs in corridors and yelling "Viva Il Duce".

A masked mob that ambushed Spurs fans drinking in a Rome pub in November, was also suspected of neo-fascist sympathies. When Spurs played Lazio the following night, Lazio fans chanted "Juden Tottenham", using the German word for Jews in reference to the club's Jewish heritage.

But the cult of Il Duce has also slipped into the mainstream. The decision by a town south of Rome to spend €127,000 (£100,000) of public funds this year on a tomb for Rodolfo Graziani, one of Mussolini's most blood-thirsty generals, was met with widespread indifference.

Other more mundane examples include the leading businessman who proposed renaming Forli airport in Emilia Romagna – the region of northern Italy where the dictator was born – as Mussolini airport, or the headmaster in Ascoli Piceno who tried to hang a portrait of the dictator in his school.

The man who gets some credit for dusting off Mussolini's reputation is Silvio Berlusconi, who famously described the dictator's exiling of his foes to remote villages as sending them on holiday.

Berlusconi's subtle rehabilitation of Mussolini came as he brought Italy's post-fascists, led by Gianfranco Fini, into his governing coalition in 1994 and 2001, following the "years of lead" in the 1970s and early 80s, when neo-fascists and communist sympathisers battled in the streets.

"Today, Mussolini's racial laws against Jews remain an embarrassment, but people don't care about his hunting down anti-fascists," said Maria Grazia Rodotà, a journalist at Italy's Corriere della Sera. "That became one of Berlusconi's jokes."

Admiration for Mussolini is common in Berlusconi's circle. Showbusiness agent Lele Mora, who is now on trial for allegedly pimping for the former prime minister, downloaded an Italian fascist song as his mobile ring tone, while Berlusconi's long-time friend, the senator Marcello Dell'Utri, has described Mussolini as an "extraordinary man of great culture".

After Mussolini's murder by partisans in 1945 – as the Allies pushed up through Italy – the country did not exorcise the ghosts of fascism, as Germany sought to. A 1952 law forbidding fascist parties or the veneration of fascism has never been seriously enforced.

"It was not used partly because banning parties was potentially anti-constitutional, and also due to a sneaking admiration for fascism," said James Walston, professor of politics at the American University of Rome.

Decades on, the memory of Mussolini as the strong man who put a post office in every piazza and made the trains run on time has been decoupled from the ideology of fascism, said writer Angelo Meloni.

"He is now a pop icon, an arch-Italian, a personality whose legend is linked to the years of consensus in Italy," he said. "Just as people who don't go to church like Padre Pio, so 90% of those who buy Mussolini calendars will never have voted for a fascist party," he said.

Gamma 3000 promotes Mussolini calendars on its website alongside ones featuring the Catholic saint and mystic Padre Pio, guerrilla leader Che Guevara, topless models and cute kittens.

But for Italy's modern neo-fascist groups, including CasaPound, Il Duce is still very much about ideology.

"Whoever buys the calendar admires his work – the two things cannot be separated," said the group's vice-president, Simone di Stefano.

"There is a need today for his politics, for someone who will put the banks and finance at the service of Italy," he said. "Youngsters who come to us already see Mussolini as the father of this country."

CasaPound's student offshoot organisation, Blocco Studentesco, is a mainstay in Rome youth politics, polling 11,000 votes in school council elections in 2009 and even enrolling the mayor of Rome's 17-year-old son, who was photographed on holiday in 2012 giving a straight-armed fascist salute with friends.

The well-to-do streets around Piazza Ponte Milvio, north of Rome's football stadium, are today plastered with posters and graffiti by numerous neo-fascist groups, including CasaPound, and the local bars have become a hangout for gangs of rightwing lads in regulation Fred Perry shirts and Ray-Ban Wayfarers.

"Many teenagers now avoid Ponte Milvio since the people who go there have shifted further to the right," said Rodotà.

Further down the road, the entrance to the stadium is marked by a massive fascist-era obelisk, still standing, with "Mussolini" written in huge letters down the front. Nearby, the bar run by Pasquale Moretti, where Lazio fans meet before games, contains a mini-supermarket of fascist memorabilia, from bottles of wine with Mussolini's portrait on the label, to fascist flags and T-shirts, and oil portraits of Il Duce.

"He built housing for workers, something no Roman emperor did," said Moretti. "How can I not respect that?"


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China manufacturing continues to grow, surveys show
January 1, 2013 at 1:03 PM
 

Official PMI remains above 50,as similar survey by HSBC suggests manufacturing is at its strongest since May 2011

China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high, as growth in new orders was unchanged and the pace of output softened marginally.

With the main index above 50 for three successive months, the survey indicates that China's vast factory sector is expanding. A PMI reading below 50 suggests growth has slowed; above 50 indicates an acceleration.

The official figures were released a day after a similar survey by HSBC suggested manufacturing activity was at its strongest since May 2011. Together the surveys support a growing consensus that economic activity in China revved up during October to December, after GDP growth had slowed for seven consecutive quarters to 7.4% in the third quarter.

That provides a welcome sign for a global economy where the euro area and Japan are in recession and the US is struggling for significant growth.

"Output has stayed above the 50-mark, showing that the manufacturing industry appears to maintain growth expectations, but the rate of growth has weakened," the National Bureau of Statistics, which released the data, said in a note.

The official PMI reading was slightly below expectations; a poll of economists by Reuters last week predicted a rise in the PMI to 51.0.

The survey showed output in oil processing, quarrying and tobacco industries slipped, while food processing, auto manufacturing, textiles, steel and electronics expanded, the bureau said.

A new export orders sub-index fell to 50 from 50.2 in November.

HSBC said its China PMI, which gathers more data from smaller, privately held firms with a strong export focus, rose in December to 51.5, its highest since May 2011.

Some analysts cautioned that the pick-up in economic activity in recent months may reflect renewed investment spending, rather than the consumer activity that policymakers acknowledge is needed to rebalance the economy.

"It's pretty clear that it's more driven by infrastructure and increasingly housing, that's driving heavy industry," Zhang Zhiwei, of Nomura International, said.

Rising land prices have prompted widespread expectations that the real estate market will be revived by an investment-driven recovery that would offset weak export markets, even though the central government had pledged to maintain investment and purchasing restrictions to try to control prices.

Railway spending delayed from earlier in 2012 was being rushed out before the end of the year, and rising prices for land purchased by state-owned developers could point to a relaxation in property market curbs that has yet to be made official, Zhang said.

China was expected to achieve economic growth of 7.7% in 2012, forecasts in a benchmark Reuters poll show. That would mark the slowest full-year expansion since 1999. While that is well above the world's other major economies, it is below the roughly 10% annual growth China has experienced for most of the past 30 years.

The government has relied on fine-tuning its policy settings to try to combat the worst downturn China has faced since the 2008-09 global financial crisis, studiously avoiding any hint of repeating a 4tn yuan (£395bn) stimulus package it launched back then, which led to a debt-fuelled spending binge by local governments.


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Israel's Jewish population passes 6 million mark
January 1, 2013 at 12:56 PM
 

Symbolically significant figure, equivalent to number of Jews killed in Holocaust, is 'a great joy', says historian

Israel's Jewish population has passed the symbolically significant 6 million mark for the first time – equivalent to the number of Jews killed in the Holocaust.

Figures released by the central bureau of statistics this week show the total population of Israel at 7.98 million, 75.4% of whom are Jewish. Just over 20% are Arab and 4% are defined as "other".

"It's a great joy to know there are more than 6 million Jews in Israel," said Dina Porat, chief historian of Yad Vashem, Israel's Holocaust museum and head of the Kantor centre for the study of contemporary European Jewry.

"But worldwide we are still in the same place. Before the Holocaust there were around 18 million Jews in the world; after it, a bit more than 13 million. We are still at a bit more than 13 million. But now Israel's Jewish population is close to half the Jewish nation worldwide. It puts Israel in a very central place. We are almost the only Jewish community that is growing."

Six million was a "significant number", said Anita Shapira, professor of Jewish history at Tel Aviv university. But, she added, "living Jews do not compensate for dead Jews. The number [6 million] symbolises a catastrophe, not a recuperation. We are still paying for the Holocaust."

Avraham Burg, former speaker of the Israeli parliament and author of The Holocaust is Over; We Must Rise From its Ashes, said 6 million was a "symbolic number but random".

"Is Israel any different if it has 5.9 million Jews, or 6.1 million? The answer is no. I don't see the state of Israel as either compensation or revenge for the Holocaust. Israel is a standalone entity. Yes, we have the looming shadow of our history, and the victims of the Holocaust should be cherished and remembered, but it should not define our politics," Burg said.

Israel, he added, "is not a state of 6 million Jews but of almost 8 million citizens". "Each and everyone of us should be equal, regardless of our creed or race."

Separate figures released by the Palestinian Central Bureau of Statistics predicts the number of Arabs in Israel and Palestine will equal the number of Jews by 2016, and exceed it by 2020. There are 5.8 million Palestinians in the West Bank, Gaza, East Jerusalem and Israel, and 11.6 million worldwide, it said.

The Palestinian birth rate was 4.4 in 2009, down from 6.0 in 1997, but higher than the Israeli Jewish birth rate of about 3.0.

This demographic trend is the chief argument put forward by Israeli Jews against a single binational state as a solution to the Israeli-Palestinian conflict. The inevitable Arab majority in such a state would mean the end of Israel as a Jewish state, they say.

The Jewish population of Israel has increased almost tenfold since the state was declared in May 1948, when there were about 660,000 Jewish citizens, according to the Israeli CBS (pdf). At least 700,000 Palestinians – a big majority of the Arab population of Palestine – fled or were forced to leave their homes and land in the 1948 war.


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Scores killed in Ivory Coast fireworks crush
January 1, 2013 at 12:07 PM
 

At least 60 dead and 200 injured after crowd gathered near stadium in Abidjan to watch New Year's Eve fireworks display

At least 60 people have been crushed to death in Ivory Coast's main city of Abidjan after a New Year's Eve fireworks display.

"There are around 60 dead, and about 200 injured, this is a provisional estimate," a rescue official told Reuters, asking not to be named.

He said the incident happened near Félix Houphouët-Boigny stadium where a crowd had gathered to watch fireworks.

A Reuters correspondent said there were blood stains and abandoned shoes outside the stadium on Tuesday morning, and government officials and rescue and security forces were still there.

More details soon …


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Oil ship runs aground in Alaska
January 1, 2013 at 12:06 PM
 

Drill ship, the Kulluk, carrying about 155,000 gallons of fuel, drifted in stormy weather before being driven on to rocks

A large drill ship belonging to the oil company Shell has run aground off Alaska after drifting in stormy weather, company and government officials said.

The ship, the Kulluk, broke away from one of its tow lines on Monday afternoon and was driven, within hours, on to rocks just off Kodiak Island, where it grounded at about 9pm Alaska time, officials said.

The 18-member crew had been evacuated by the coastguard late on Saturday because of risks from the ongoing storm.

There was no known spill and no reports of damage, but the Kulluk had about 155,000 gallons of fuel on board, said coastguard commander Shane Montoya, the leader of the incident command team.

With winds reported as reaching 60 miles an hour and Gulf of Alaska seas of up to 12 metres, responders were unable to keep the ship from grounding, he told a news conference late on Monday night in Anchorage.

"We are now entering into the salvage and possible spill-response phase of this event."

The grounding of the Kulluk, a conical, Arctic-class drill ship weighing nearly 28,000 gross tonnes, is a blow to Shell's $4.5bn (£2.8bn) offshore programme in Alaska. Its plan to convert the area into a major new oil frontier has alarmed environmentalists and many Alaska Natives, but excited industry supporters.

Environmentalists and Native opponents say the drilling programme threatens a fragile region that is already being battered by rapid climate change.

"Shell and its contractors are no match for Alaska's weather and sea conditions either during drilling operations or during transit," Lois Epstein, Arctic programme director for the Wilderness Society, said in an email.

"Shell's costly drilling experiment in the Arctic Ocean needs to be stopped by the federal government or by Shell itself given the unacceptably high risks it poses to both humans and the environment."

The Kulluk's woes began on Friday, when the Shell ship towing it south experienced a mechanical failure and lost its connection to the drill vessel.

That ship, the Aivik, was reattached to the Kulluk early on Monday morning, as was a tug sent to the scene by the operator of the Trans Alaska Pipeline System. But the Aivik lost its link on Monday afternoon, and the tug's crew could only try to guide the drill ship to a position where, if it grounded, "it would have the least amount of impact to the environment", Montoya said.

Shell used the Kulluk in September and October to drill a prospect in the Beaufort Sea. It was being taken to Seattle for the off-season when the problems began.

Susan Childs, emergency incident commander for Shell, suggested a significant spill from the ship was unlikely.

"The unique design of the Kulluk means the diesel fuel tanks are isolated in the centre in the vessel and encased in very heavy steel," she said.

Shell was waiting for the weather to moderate to begin a complete assessment of the ship, she said. "We hope to ultimately recover the Kulluk with minimal or no damage to the environment."

The Kulluk was built in 1983 and there were plans to scrap it before Shell bought it in 2005. The company has spent $292m since then to upgrade the vessel.

Shell's Arctic campaign has been bedevilled by problems. A second drill ship, the Discoverer, was briefly detained in December by the coastguard in Seward, Alaska, because of safety concerns. A mandatory oil-containment barge, the Arctic Challenger, failed for months to meet coastguard requirements for seaworthiness and a ship mishap resulted in damage to a critical piece of equipment intended to cap a blown well.


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Kim Jong-un calls for better ties with South Korea
January 1, 2013 at 11:35 AM
 

North Korean leader's rare new year broadcast seen as reaching out to incoming president south of the border

North Korea's leader, Kim Jong-un, has called for better ties with South Korea in a rare new year broadcast, warning that history had shown that continued confrontation would lead to "nothing but war".

Kim, addressing the country on state media weeks after it successfully launched a long-range rocket that many believe was a cover for a missile test, was the first North Korean leader to deliver a new year broadcast since his grandfather – the country's founder, Kim Il-sung – in 1994.

His father, Kim Jong-il, who died just over a year ago, rarely spoke in public.

"An important issue in putting an end to the division of the country and achieving its reunification is to remove confrontation between the north and the south," he said in Tuesday's address, which appeared to have been pre-recorded at an undisclosed location. "The past records of inter-Korean relations show that confrontation between fellow countrymen leads to nothing but war."

The conciliatory tone is being seen as an early attempt to reach out to the South's incoming leader, Park Geun-hye, who takes office in February as the country's first female president.

North and South Korea remain technically at war after their 1950-53 conflict ended with an armistice but not a peace treaty. They are separated by the demilitarised zone, one of the most heavily fortified borders in the world.

But analysts cautioned that Kim's apparent desire for detente after five years of deteriorating ties under the South's hardline president, Lee Myung-bak, did not necessarily mark a shift in North Korean thinking.

Kim's statement "apparently contains a message that he has an intention to dispel the current face-off [between the two Koreas], which could eventually be linked with the North's call for aid" from South Korea, Kim Tae-woo, of Seoul's Korea Institute for National Unification, told Reuters. "But such a move does not necessarily mean any substantive change in the North Korean regime's policy towards the South."

In echoes of the military-first philosophy developed by his father, Kim said: "The military might of a country represents its national strength. Only when it builds up its military might in every way can it develop into a thriving country."

However, he did indicate that he would focus on raising living standards in a country heavily dependent on China for aid and where an estimated one-third of its 24 million people are malnourished.

He said the North should put as much energy into strengthening the economy as it had devoted to developing its rocket programme, which it insists is for peaceful space exploration. "Let us bring about a radical turn in the building of an economic giant with the same spirit and mettle as were displayed in conquering space."

John Delury, a North Korea analyst at Yonsei University in Seoul, said the onus was on Park to nudge her counterpart north of the border in the right direction. "If Kim Jong-un is going to engineer a shift from 'military-first' to 'it's the economy, stupid', he is going to need Seoul's encouragement," he said.

It was up to South Korea, he added, "to unclench its fist first, so the leader of the weaker state can outstretch his hand".

Cross-border ties deteriorated dramatically after the North was accused of sinking a South Korean navy vessel, the Cheonan, in March 2010, with the loss of 46 sailors. In November the same year it shelled Yeonpyeong island, located just south of their maritime border in the Yellow Sea, killing two soldiers and two civilians.

Park, the daughter of a former South Korean dictator, narrowly won last month's presidential election with promises of more engagement with the North, but stopped short of supporting a return to the "sunshine policy" of unconditional aid.


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Kim Jong-un calls for better ties with South Korea
January 1, 2013 at 11:35 AM
 

North Korean leader's rare new year broadcast seen as reaching out to incoming president south of the border

The North Korean leader, Kim Jong-un, has called for better ties with South Korea in a rare new year broadcast, and warned that history had shown that continued confrontation would lead to "nothing but war".

Kim, addressing the country on state media after it successfully launched a long-range rocket that many believe was a cover for a missile test, was the first North Korean leader to deliver a new year broadcast since his grandfather – and the country's founder – Kim Il-sung, in 1994.

His father, Kim Jong-il, who died just over a year ago, rarely spoke in public.

"An important issue in putting an end to the division of the country and achieving its reunification is to remove confrontation between the north and the south," he said in Tuesday's address, which appeared to have been pre-recorded at an undisclosed location.

"The past records of inter-Korean relations show that confrontation between fellow countrymen leads to nothing but war."

The conciliatory tone is being seen as an early attempt to reach out to the South's incoming leader, Park Geun-hye, who takes office in February as the country's first female president.

North and South Korea remain technically at war after their 1950-1953 conflict ended with an armistice, but not a peace treaty. They are separated by the demilitarised zone, one of the most heavily fortified borders in the world.

But analysts cautioned that Kim's apparent desire for detente after five years of deteriorating ties under the South's hardline president, Lee Myung-bak, did not necessarily mark a major shift in North Korean thinking.

Kim's statement "apparently contains a message that he has an intention to dispel the current face-off [between the two Koreas], which could eventually be linked with the North's call for aid" from South Korea, Kim Tae-woo of the Korea Institute for National Unification in Seoul told Reuters.

"But such a move does not necessarily mean any substantive change in the North Korean regime's policy towards the South."

In echoes of the military-first philosophy developed by his father, Kim said: "The military might of a country represents its national strength. Only when it builds up its military might in every way can it develop into a thriving country."

However, he did indicate that he would focus on raising living standards in a country heavily dependent on China for aid and where an estimated third of its 24 million people are malnourished.

He said the North should devote as much energy to strengthening the economy as it had done to developing its rocket programme, which it insists is for the peaceful exploration of space. "Let us bring about a radical turn in the building of an economic giant with the same spirit and mettle as were displayed in conquering space."

John Delury, a North Korea analyst at Yonsei University in Seoul, said the onus was on Park to nudge her counterpart north of the border in the right direction. "If Kim Jong-un is going to engineer a shift from 'military-first' to 'It's the economy, stupid', he is going to need Seoul's encouragement," he said.

It was up to South Korea, he added, "to unclench its fist first, so that the leader of the weaker state can outstretch his hand".

Cross-border ties deteriorated dramatically after the North was accused of sinking a South Korean navy vessel, the Cheonan, in March 2010, with the loss of 46 sailors. In November the same year it shelled Yeonpyeong island, located just south of their maritime border in the Yellow Sea, killing two soldiers and two civilians.

Park, the daughter of a former South Korean dictator, narrowly won last month's presidential election with promises of more engagement with the North, but stopped short of supporting a return to the "sunshine policy" of unconditional aid.


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Obama calls on House to follow Senate and back fiscal cliff deal
January 1, 2013 at 8:51 AM
 

Senate votes 89-8 – two hours after midnight deadline – to pass legislation to block impact of tax increases and spending cuts

Barack Obama has called for the House of Representatives to follow the Senate's lead and pass the fiscal cliff deal "without delay" to extend tax cuts for middle-class Americans and raise tax rates on top earners.

The Senate voted 89-8 early on Tuesday to pass legislation to block the impact of across-the-board tax increases and spending cuts scheduled to take effect at the beginning of the new year. The legislation would prevent middle-class taxes from rising, and raise rates on incomes over $400,000 (£246,0000) for individuals and $450,000 for couples.

"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," Obama said in a statement after the Senate voted overwhelmingly to approve the legislation.

"There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans," he said.

The House is expected to vote on the bill later on Tuesday or perhaps Wednesday.

The White House and Congressional leaders reached a bipartisan compromise on Monday night to avert some but not all of the austerity measures due to take effect on Tuesday.

Two hours after the deadline lapsed the Senate formally approved the legislation. The deal hangs in the balance however pending a vote in the Republican-controlled House of Representatives. Members from each side complained the deal conceded too much.

Without a deal every taxpayer in America faced imminent steep rises. These would be accompanied by deep cuts in federal spending programmes, ranging from defence to welfare, in particular unemployment benefits.

Technically the US has just gone over the cliff but if the House approves the agreement the economic damage could be fleeting and relatively minor. The goal will be to have full Congressional approval before Wall Street reopens on Wednesday.

The Senate minority Leader Mitch McConnell, a Republican, and vice president Joe Biden, hammered out the accord after two months of talks between Obama and other Congressional leaders failed.

As well as the tax rises the deal also delays automatic federal spending cuts for two months.

Tax deductions and credits would start phasing out on incomes as low as $250,000, a defeat for the Republicans who had resisted higher taxes for the wealthy.

"Just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans," Obama said at a hastily arranged news briefing. "Obviously, the agreement that's currently being discussed would raise those rates and raise them permanently."

Going over the "cliff" makes a deal more palatable to Republicans. With taxes automatically going up at midnight, Republicans, ideologically opposed to tax rises, would in fact be voting to bring them down, at least for all but the top 2% of wealthiest taxpayers.

Earlier on Monday, surrounded by what the White House described as "ordinary Americans", Obama said they could not afford the tax rises – an average of about $2,000 for every US taxpayer – that would result if a deal was not reached. "The economy can't afford it," he added.

Obama said the framework of the deal was that tax would not go up for most Americans. Unemployment benefits, help with university tuition and tax credits for clean energy companies would all be protected.

Tax rises would be imposed only on those earning $450,000 a year or more. The Democrats had been pushing for $250,000 while the Republicans had wanted the limit set at those earning $1m or more.

The Democrats appear to have secured protection for continued payments of unemployment benefits, which the Republicans had wanted cut. Democrats were pushing for the automatic cuts on spending across the board to be postponed for at least a few months.

Obama said his preference would have for a "grand bargain" that would have dealt more broadly with America's economic problems, especially its huge deficit. But, showing his exasperation with Republicans who control the House, he said this was not possible with this Congress.

It is the first time Congress has met on New Year's Eve since 1995 when Washington was confronted by another Democratic-Republican economic showdown.

Obama, in spite of having won a second term, desperately needs this victory over the Republicans to prevent that second term being destroyed by repeated stand-offs with Republicans in Congress.

The danger for the Obama administration in the present showdown is that a combination of sudden tax rises and government spending cuts would have a negative impact on the country's sluggish rise out of recession. Countries that rely on trade with America could also potentially suffer.

The Democrats had little problem getting a bill through the Senate where they have a majority but the House is much more difficult, given the size of the Republican majority. The Obama administration hopes that a combination of Democrats and moderate Republicans will see it pass.


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Indian bus rape: five suspects to be charged with murder
January 1, 2013 at 8:51 AM
 

Police order tests on sixth accused to confirm he is a juvenile. Adult suspects face death penalty if convicted

Indian police say they expect to formally charge five suspects with murder in the death of the 23-year-old woman who was raped on a moving bus in New Delhi. The sixth suspect in the case that has outraged the country is under 18 and a juvenile.

Police ordered a bone test for the sixth accused to confirm his age, the Associated Press reported. Under Indian law, a juvenile cannot be prosecuted for murder.

New Delhi police said on Tuesday that a charge-sheet in the case will be filed in court on Thursday. The suspects face the death penalty if convicted.

The physiotherapy student died last week in a Singapore hospital where she had been sent for emergency treatment after the crime in India's capital on 16 December.

The case has triggered protests across India and raised questions about lax attitudes by police towards sexual crimes.

Protesters and politicians from across the spectrum called for a special session of Parliament to pass new laws to increase punishments for rapists – including possible chemical castration – and to set up fast-track courts to deal with rape cases within 90 days.

Thousands of Indians have lit candles, held prayer meetings and marched through various cities and towns to express their grief and demand stronger protection for women and the death penalty for rape, which is now punishable by a maximum of life imprisonment.

On Monday, the Indian army and navy cancelled their New Year's celebrations, as did Sonia Gandhi, head of the ruling Congress party. Several hotels and clubs across the capital also did not hold their usual parties.

Women face daily harassment across India, including catcalls on the streets and groping and touching on public transport.


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Fiscal cliff: White House and Republicans reach deal to end crisis
January 1, 2013 at 7:17 AM
 

Leaders agree on tentative compromise to avert some but not all austerity measures pending a formal vote in the House

The White House and Congressional leaders reached a deal on Monday night to resolve the fiscal cliff crisis that threatens the fragile US economic recovery.

With only hours left until a midnight deadline for automatic tax rises and spending cuts, Senate leaders reached a bipartisan compromise to avert some but not all of the austerity measures due to take effect on Tuesday.

Two hours after the deadline lapsed the Senate formally approved the legislation. The deal hung in the balance however pending a vote expected later on Tuesday in the Republican-controlled House of Representatives. Members from each side complained the deal conceded too much.

Without a deal every taxpayer in America faced imminent steep rises. These would be accompanied by deep cuts in federal spending programmes, ranging from defence to welfare, in particular unemployment benefits.

Technically the US has just gone over the cliff but if the House approves the agreement the economic damage could be fleeting and relatively minor. The goal will be to have full Congressional approval before Wall Street reopens on Wednesday.

The Senate minority Leader Mitch McConnell, a Republican, and vice president Joe Biden, hammered out the accord after two months of talks between president Barack Obama and other Congressional leaders failed.

The deal would allow tax rates to rise on income over $450,000 and delay automatic federal spending cuts for two months.

Tax deductions and credits would start phasing out on incomes as low as $250,000, a defeat for the GOP which had resisted higher taxes for the wealthy.

"Just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans," Obama said at a hastily arranged news briefing. "Obviously, the agreement that's currently being discussed would raise those rates and raise them permanently."

Going over the "cliff" makes a deal more palatable to Republicans. With taxes automatically going up at midnight, Republicans, ideologically opposed to tax rises, would in fact be voting to bring them down, at least for all but the top 2% of wealthiest taxpayers.

Earlier on Monday, surrounded by what the White House described as ordinary Americans, Obama said such people could not afford the tax rises – an average of about $2,000 for every US taxpayer – that would result if a deal was not reached. "The economy can't afford it," he added.

Obama said the framework of the deal was that tax would not go up for most Americans. Unemployment benefits, help with university tuition and tax credits for clean energy companies would all be protected.

Tax rises would be imposed only on those earning $450,000 a year or more. The Democrats had been pushing for $250,000 while the Republicans had wanted the limit set at those earning $1m or more.

The Democrats appear to have secured protection for continued payments of unemployment benefits, which the Republicans had wanted cut. Democrats were pushing for the automatic cuts on spending across the board be postponed for at least a few months.

Obama said his preference would have for a "grand bargain" that would have dealt more broadly with America's economic problems, especially its huge deficit. But, showing his exasperation with Republicans who control the House, he said this was not possible with this Congress.

It is the first time Congress has met on New Year's Eve since 1995 when Washington was confronted by another Democratic-Republican economic showdown.

Obama, in spite of having won a second term, desperately needs this victory over the Republicans to prevent that second term being destroyed by repeated stand-offs with Republicans in Congress.

The danger for the Obama administration in the present showdown is that a combination of sudden tax rises and government spending cuts would have a negative impact on the country's sluggish rise out of recession. Countries that rely on trade with America could also potentially suffer.

The Democrats had little problem getting a bill through the Senate where they have a majority but the House is much more difficult, given the size of the Republican majority. The Obama administration hopes that a combination of Democrats and moderate Republicans will see it pass.

The Republicans and Democrats have been struggling since Obama's re-election in early November to find a compromise. The Democrats want to see tax rises only for the wealthiest and for the Defense Department to take the brunt of the spending cuts. Republicans have pressed for the onus to be shifted to welfare spending.

Obama and the Republican leader in the House, John Boehner, came close to reaching a "grand bargain" in the run-up to Christmas but the talks collapsed. The Democrats blamed Boehner for being unable to secure the support of Tea Party-backed Republicans in the House, while Boehner blamed Obama for failing to give him enough concessions on tax and spending.

The baton after Christmas was passed to Harry Reid in the Senate, and his Republican counterpart Mitch McConnell. But talks between them broke down over the weekend.

Next up were talks between McConnell and vice-president Joe Biden, old friends, who negotiated throughout Sunday and into the early hours of Monday morning, resuming again at dawn.

Without a deal, a single person earning $100,000 a year will face a $5,314 rise in taxes, and draconian spending cuts will be imposed across the board, in particular military spending and welfare benefits.

With the war in Iraq over and US combat involvement in Afghanistan winding down, the Pentagon is vulnerable to spending cuts, in particular expensive equipment programmes. If no deal is in place on 1 January, the Pentagon, as a first step, will have to inform its 800,000 civilian employees to prepare to take mandatory leave to save money.


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