Floodwaters have reached the northern edge of central Bangkok and are threatening the Thai capital’s subway system.
The water that has been creeping through northern Bangkok for more than week flooded Lad Phrao intersection on Friday. The area is home to office towers, condominiums and a major shopping mall and is not far from the famed Chatuchak Weekend Market.
Local media reported the water depth at 15 inches (40 centimeters).
Officials from Bangkok’s subway system say they are closely monitoring three stations in the area, though all remain open.
The government has asked residents to evacuate eight of the city’s 50 districts because of the flooding. It has killed more than 400 people in Thailand since late July.
Thailand’s prime minister says she hopes the process of draining floodwater through Bangkok can be sped up now that peak high tides have passed.
Prime Minister Yingluck Shinawatra said Monday that “if there is no more additional water, the current runoff might not cause heavy flooding in Bangkok.” She said there was still a massive amount of water that needs to pass through the capital’s drainage network as it makes its way down from flooded provinces in the north quick cash.
Record high tides pushing up the Chao Phraya River from the Gulf of Thailand have made draining the water from Thailand’s worst flooding in a half-century more difficult. That has put extreme pressure on Bangkok’s flood defenses, though they have largely held and most of the city remains dry.
France’s finance minister said Tuesday that 2012 growth may be lower than estimated, a day after a leading agency warned that it may put the country’s cherished triple-A rating on notice for a possible downgrade.
Ahead of the 2012 budget debate in parliament, Finance Minister Francois Baroin warned on France-2 television that the growth estimate of 1.5 percent for next year was “probably too high.”
He blamed the risk of a global slowdown, which he said could be “very vast” and “severe.”
Baroin said the government would “put everything in place to avoid falling into a recession… and to protect our country from a downgrade” of its triple A rating, a day after Moody’s said it was assessing the country.
However, Baroin said he wouldn’t change the forecast just yet, especially in the run-up to the meeting of eurozone leaders in Brussels this Sunday and the early November meeting of the Group of 20 leaders from the industrial and developing world.
“If we are capable in the next two weeks of …. measures powerful enough to stop speculation so that we can make people understand that we will not let 60 years of European construction collapse … then I will have no worries, there will be growth in 2012 and 1.5 percent will be achieved,” he said.
Being the eurozone’s second largest economy, France could well have a big bill to pay for sorting out Europe’s debt crisis.
It’s in that context that Moody’s said it will be studying whether to put France’s rating on notice for a possible downgrade over the next three months. It said it will focus in on the government’s ability to implement its fiscal and economic reforms as well as any other potential adverse economic or financial market developments.
It said the French government has much less room for maneuver in terms if stretching its balance sheet than it had in 2008 Low fee payday loans.
“France may face a number of challenges in the coming months _ for example, the possible need to provide additional support to other European sovereigns or to its own banking system, which could give rise to significant new liabilities for the government’s balance sheet,” Moody’s said.
Moody’s warning comes ahead of Sunday’s meeting of eurozone leaders in Brussels. For days, markets have been hopeful that they would unveil a comprehensive solution to Europe’s debt crisis that would include a big ramp up in the bailout fund, a recapitalization of a large segment of the banking sector and a strategy for Greece.
However, on Monday German officials sought to downplay market expectations and the market mood has turned sour once again. France’s CAC-40 index of leading shares was underperforming its main peers in Europe on Tuesday, trading 1.7 percent lower as against the 0.6 percent fall on the German DAX.
Ahead of the meeting on Sunday in Brussels, the markets will be closely monitoring comments from all round Europe.
Jan Kees de Jager, the Netherlands finance minister, said the meeting needs to produce concrete results even though his counterpart in Germany, Wolfgang Schaeuble, said Monday that the weekend summit would not provide a “definitive solution.”
De Jager is quoted in Germany’s Die Welt newspaper Tuesday as saying that the markets “are awaiting a long-term solution. The overall package must involve a wide-reaching and irreversible agreement over enhanced controls in the eurozone in the future.”
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David Rising in Berlin contributed to this story.
Germany kept alive hopes that the 17-nation euro currency can survive the sprawling debt crisis when lawmakers in Europe’s largest economy on Thursday voted overwhelmingly in favor of expanding the powers of the eurozone’s bailout fund.
The vote strengthened Angela Merkel’s center-right coalition, which had struggled to win support from a bloc of rebellious members, and could bolster her ability to negotiate new European crisis measures.
While many investors and experts believe new steps will be required in Europe, such as letting Greece write off more of its debt pile, Germany’s approval of the fund’s new powers and scope was necessary to avoid a new bout of massive market turmoil.
“The support of the Bundestag is an important step for stabilizing the eurozone,” Michael Kemmer, head of Germany’s Bank Federation, told the news agency dapd. “With that, they have set a course that leads out of the debt crisis.”
The euro440 billion ($600 billion) fund will be able to buy government bonds and lend money to banks and governments before they are in a full-blown crisis, making Europe’s response to market jitters more rapid and pre-emptive.
Germany, which pays the lion’s share of European bailouts, became the 13th member of the eurozone to support the expansion of the rescue fund, the so-called European Financial Stability Facility, or EFSF. Cyprus also passed the proposed expansion on Thursday.
Austria’s parliament is widely expected to pass the measure on Friday, the same day Germany’s upper house of parliament is set to finalize Thursday’s vote, while the Netherlands is expected to approve it in the first week of October.
The biggest remaining hurdle is the final country to vote _ Slovakia _ where the government will not have enough support to pass it if the leader of the junior coalition Freedom and Solidarity party follows through with threats to vote against the fund’s expansion. Its parliament is to vote later in October.
In Berlin, 523 lawmakers in parliament, the Bundestag, voted in favor of expanding German participation to guarantee loans of up to euro211 billion, compared with euro123 billion so far. Eighty-five voted against it and three abstained.
“It was a strong statement of Angela Merkel’s position. She has the backing and the support of the coalition and she is able to negotiate on the European level,” Peter Altmeier, the parliamentary whip for Merkel’s Christian Democrats, said after the tally was announced.
Markets appeared calmer even before Thursday’s votes, following weeks of turbulence triggered by uncertainty over Germany’s position on the fund. The euro also traded slightly higher.
“The overwhelming majority in the Bundestag is a good sign and will hopefully mark a step change in German commitment to bringing the spiraling crisis under control,” said Sony Kapoor of the Re-Define economic policy think tank.
The lingering problem, however, is that investors are resigned to the fact that Greece will have to default _ that is, impose tougher losses on its bondholders.
Greece was saved from default by an initial euro110 billion ($150 billion) bailout in May last year before the EFSF was established to help any other countries in trouble. A planned second rescue package for Greece this year includes a voluntary participation by private bondholders, who agreed to write off about 20 percent on their Greek debt holdings.
Many experts say those writedowns should be closer to 50 percent. The debate among European leaders now is whether to allow such a move under controlled conditions, providing help to banks that may take heavy losses on Greek bonds they hold.
Germany and the Netherlands are open to the option, with Merkel suggesting this week that Greece’s second bailout deal might have to be renegotiated. France and the European Central Bank, however, oppose the idea.
Greece’s international debt inspectors returned to Athens on Thursday to complete a review. Merkel has said that any new decisions would depend upon the results of the inspectors’ report, which is not due for days.
Forging consensus over new measures _ particularly something as delicate as imposing more severe losses on Greece’s creditors _ will likely be very difficult, however.
Indeed, the parliamentary debate on the EFSF in Berlin on Thursday was a feisty three-hour long affair, reflecting how high tensions in Merkel’s coalition were running over the idea of providing more backing to the eurozone’s weakest members.
Frank Schaeffler, a dissenter from the junior coalition partner, argued that bailout measures have worsened Greece’s economic situation.
“Despite all arguments, the first bailout did not make the situation for Greece better, but worse,” said Schaeffler, a Free Democrat. “Expanding the fund will make the situation even worse.”
Schaeffler and others had long expressed their concerns, and opposition leaders had said going in to the vote that if Merkel’s coalition had to rely on their votes, it would be a sign that her strife-prone and increasingly unpopular government is finished.
Yet after a night of intense lobbying, Merkel’s camp was able to secure a majority of 315 _ enough to have passed the measure even without support from the opposition parties.
“This shows the clear determination of the coalition on this issue,” Rainer Bruederle, the Free Democrats’ parliamentary leader. “We have made an important decision for Europe.”
Any future changes to the current fund will also require parliamentary approval and maintaining that determination will be crucial to making swift, effective decisions to combat the crisis.
In addition, the Bundestag will face another major vote early next year on the fund’s permanent replacement, the European Stability Mechanism, which is due to take effect in 2013. Schaeffler has already vowed to rally his party to reject the ESM.
Party leaders insist they are not worried by Schaeffler’s plans, but many analysts have noted Merkel will have to hold her majority together, or Thursday may have only been the first in a series of nail-biting parliamentary showdowns over shoring up the euro.
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Geir Moulson and Tomislav Skaro in Berlin, and Menelaos Hadjicostis in Nicosia, Cyprus, contributed to this report.
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German officials on Monday downplayed prospects of any quick and dramatic change of course in the eurozone debt crisis, days before a parliamentary vote on beefing up the continent’s rescue fund.
Weekend meetings of global financial leaders in Washington raised hopes of a change in strategy, with officials indicating that would focus on further boosting the firepower of the euro440 billion ($595 billion) rescue fund _ perhaps by allowing it to tap loans from the European Central Bank or otherwise leveraging its lending capacity.
Hopes for such a move boosted European stock markets on Monday, with German and French bank shares rising strongly.
However, ahead of a parliamentary vote Thursday on changes to the fund that eurozone leaders already agreed to in July, Berlin was keen to underline its attachment to its often-criticized step-by-step approach.
Thursday’s vote on expanding the powers of the rescue fund, the so-called European Financial Stability Facility, will be followed over the coming months by final decisions on a second bailout package for Greece and on a permanent rescue mechanism meant to succeed the EFSF from 2013, Finance Ministry spokesman Martin Kotthaus noted.
“That is quite simply the procedure that lies in front of us _ we will work through it step by step,” Kotthaus said.
When asked in Washington whether he supported the idea of leveraging the rescue fund, German Finance Minister Wolfgang Schaeuble said: “Of course we will use the EFSF in the most efficient way possible.”
His spokesman, Kotthaus, said that the EFSF “is how it is” and noted that only a small part of the funding has already been committed.
Asked about the possibility of leveraging the fund, he said “the discussion is not so far along that I could contribute any examples, ideas or subideas.”
Some in Chancellor Angela Merkel’s center-right coalition already find beefing up the EFSF by giving it new powers hard to swallow, and anything beyond that could be a hard sell among its lawmakers.
Christian Lindner, the general secretary of the Free Democrats _ Merkel’s junior coalition partner _ called on the chancellor to provide clarity and stressed that his party opposes allowing the fund to tap ECB loans quick guaranteed personal loans.
A prominent opposition lawmaker, center-left Social Democrat Carsten Schneider, said the government should come clean on its “real intentions.”
“In Washington and Brussels they are already planning new programs in the billions, and in Germany the parliament and public are having the wool pulled over their eyes,” Schneider was quoted as telling Der Spiegel magazine.
Merkel’s spokesman rejected that accusation sharply.
“The true intentions of the government and the chancellor are on the table,” Steffen Seibert said. “They will be decided on in parliament Thursday.”
Merkel has been caught between criticism from abroad for doing too little and from supporters at home who fear she is spending too much taxpayer money on the crisis. She went on German television Sunday night to defend her step-by-step tackling of the crisis.
She warned of the dangers a radical restructuring of Greek debt might bring at this stage.
“Lehman Brothers was allowed to go bust, and then the world was surprised that it fell into a deep crisis,” Merkel said on ARD television.
“What we have to learn is that we can only take steps we can really control,” she added. “The word ‘haircut’ is easy to say on its own … (but) we must go step by step.”
In financial terms, a haircut is a loss investors take on an asset. Many experts believe Greece’s bondholders will have to take a sharp haircut _ that is, not get paid back fully for the money they lent to the country _ if Greece is to have any chance of reducing its debt load.
“What we cannot do is, along the way, destroy the confidence of all investors, and (have) them say, OK, they did this with Greece now; tomorrow they’ll do it with Spain, the day after with Belgium or some other country,” Merkel said.
“Then no one anywhere would invest their money in Europe any more, and we have to prevent that.”
The crash of an aging Russian jet last week that killed 44 people, including an entire professional hockey team, was among a string of recent deadly crashes in Russia that have scared the public and prompted the president to suggest replacing all Soviet-era aircraft with Western-made planes.
But industry experts say that the air disasters plaguing Russia are rooted not simply in the planes’ age, but in a myriad of other problems, including poor crew training, crumbling airports, lax government controls and widespread neglect of safety in the pursuit of profits.
“It’s like an ax hanging over the head of each of us,” said Oleg Smirnov, a highly decorated pilot who served as deputy civil aviation minister during Soviet times.
He and other experts warn there is no quick remedy for the industry’s woes _ exacerbated by government inefficiency and corruption. They blame state regulators for turning a blind eye to aviation problems and failing to establish proper control over flight safety.
Veteran pilots insist aircraft like the Yak-42 that crashed last week, the Tu-134 that went down in June _ killing 47 people _ and the An-24 that crash-landed on the Ob River in July and killed seven, are solid designs that are safe to fly despite their age if they are operated properly.
An official panel conducting the probe into the Yak-42 crash hasn’t yet named the cause, but has said it has found no evidence of equipment failure. However, two other such jets belonging to the owner of the crashed plane were grounded after a safety watchdog found that some engine components had exceeded their service time.
While most pilots and industry experts describe the Soviet-era planes as outdated but rugged and reliable, some say that the airlines have struggled to keep them airworthy.
“The collapse of aircraft components production has created a major problem,” Alexander Akimenkov, a veteran test pilot who has flown 80 types of Russian and Western planes, told The Associated Press.
Akimenkov said the owners of Soviet-made planes have had to rummage around the country for spare parts to keep them flying. The shortage of spare parts has spawned the use of plane components from old depots, which sometimes lack proper service certificates, as well as recycled components.
The government has done little to strengthen air safety. Russia has four government agencies overseeing aviation, but their functions are vaguely defined and often duplicate one another.
“There is an immediate need for a single government agency in charge of aviation,” said veteran pilot Vladimir Gerasimov, who blamed authorities for failing to make safety the top priority. He argued that loose regulations contributed to some of the recent crashes by permitting pilots to perform risky landing maneuvers.
Gerasimov said that greed prevails over safety at some Russian carriers, whose management encourages crews to save fuel no matter what. That often prompts pilots to make risky decisions like landing in bad weather instead of flying to another airport out of fear of losing their pay.
“Pilots act under pressure of possible sanctions for making the right decisions,” Gerasimov told The Associated Press.
Russia’s President Dmitry Medvedev responded to the latest crash by ordering officials to shut most of the nation’s 130 carriers, saying small airlines tend to cut corners on safety. He also said the government may end attempts to bail out struggling national aircraft makers and buy more foreign planes. “The value of human life must prevail over all other considerations, such as support for local producers,” Medvedev said.
Many industry insiders warn, however, that replacing the old planes won’t solve the industry’s problems because Western aircraft require the modern infrastructure that Russia lacks.
“The president suggests using Western planes, but in that case we would also need to have Western infrastructure,” said Akimenkov, the veteran test pilot.
Akimenkov, who tested the performance of several Soviet-designed planes in extreme conditions, said that Western planes generally require more careful maintenance and aren’t always fit for use at primitive airports and in the rugged conditions of Russia’s Far North.
The nation’s airports have remained in state hands, and most of them continue to rely on outdated navigation and communications equipment and are in dire need of repairs.
While June’s Tu-134 crash in the northwestern city of Petrozavodsk has been blamed on the pilot, who might have mistaken a nearby highway for the runway while trying to land in deep fog, experts said the antiquated condition of the local airport contributed to the disaster.
Only three airports in the country are equipped with state-of-the art automatic landing systems, while all others continue to rely on old navigation equipment, which puts more pressure on the crews when they land at night or in bad weather, raising the likelihood of pilot error.
Poland said that insufficient lighting at an airport in Smolensk in western Russia was among the factors that contributed to the April 2010 crash of a Soviet-made Tu-154 that killed Polish President Lech Kaczynski and 95 other people.
The largest airlines, including the national flag carrier Aeroflot, already have withdrawn Soviet-era planes from service and rely almost entirely on Boeings and Airbuses, which burn less fuel and meet European requirements for noise and emissions. Imported planes accounted for 83 percent of passengers carried by Russian airlines last year, and the figure will likely reach 90 percent this year, Smirnov said.
But Boeings and Airbuses are used only on the busiest foreign and domestic flights, while hundreds of other routes across Russia’s nine time zones are served by small regional carriers, most of which have only a handful of aging Soviet-era aircraft and simply can’t afford Western planes.
Alexei Sinitsky, the editor of Air Transport Review monthly magazine, said that bigger carriers have shown no interest in serving smaller airports, which would require a big investment and wouldn’t bring sizable returns. He argued that many smaller carriers have a good safety record and warned that Medvedev’s orders would have “monstrous consequences for both Russia’s aviation and for the population of remote regions.”
Other experts also said that an attempt to quickly discard old aircraft and radically cut the number of carriers would paralyze air traffic across most of Russia.
“Aviation is what keeps our country together,” said Smirnov, warning that air transport provides the only link to many areas of Siberia and the Far East. “Closing an airport means closing a city.”
Stock futures are falling a day after congressional leaders failed to agree on a deal to raise the nation’s debt limit.
Lawmakers hoped to reach a compromise on debt Sunday. But those talks stalled. President Barack Obama wants to raise revenues by letting tax cuts for wealthy Americans expire. Republicans have pushed for more spending cuts and have rejected higher taxes.
If an agreement is not reached by Aug. 2, the U.S. could default on its debt. That could have a catastrophic impact on financial markets.
Ahead of the opening bell Monday, Dow Jones industrial average futures are down 85 points, or 0.7 percent, at 12,536. Standard & Poor’s 500 futures are down 10, or 0.8 percent, at 1,331. Nasdaq 100 futures are down 14, or 0.6 percent, at 2,414.
Ontario teachers will take home less pay and earn smaller pensions under a deal aimed at erasing a projected $17.2 billion shortfall in their pension plan.
Details of a negotiated deal approved by union representatives and the Ontario cabinet began reaching teachers by mail during this final week of the school year, or earlier by email.
A three-part plan calls for:
Efforts to work out a deal for cutting government spending while at the same time raising the debt limit move into a new phase with President Barack Obama meeting at the White House with Senate leaders.
Obama is set to meet Monday morning with the Democratic leader, Sen. Harry Reid, and then in the afternoon with the Republican leader, Sen. Mitch McConnell.
Talks between congressional leaders of the House and the Senate reached an impasse last week over the question of federal revenue Online payday loans. Democrats say they want to close loopholes and scale back tax breaks for big corporations and wealthy taxpayers. Republicans want to focus on cutting spending and have waved off tax increases.
McConnell told ABC’s “This Week” on Sunday that proposals seeking more tax revenue won’t pass Congress.
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