Swiss lawmakers miss opportunity to perpetuate banking secrecy

Do legislators in Switzerland have more sense than Swiss negotiators who reached a deal with the United States in 2009 to reveal the names of nearly 4,500 U.S. clients of Swiss banking giant UBS thought to be hiding assets overseas? It's hard to understand why the National Council voted to reject the deal, which had been demanded by the U.S. government despite Switzerland's long tradition of banking secrecy. The U.S. Department of Justice had already fined Switzerland nearly $800 million for keeping secret the names of thousands of UBS depositors suspected of evading billions of dollars in taxes, and the upper house, the Council of State, approved the deal earlier this week. Apparently, the lower house was bowing to pressure from Swiss banking interests, who wanted to hang onto the illogical secrecy tradition, when it voted to kill the agreement. The bankers certainly understand that the 4,500 names would only be the beginning of the eventual dismantling of the entire secrecy system, an anachronism in the global economy. But the deal seemed an overly generous compromise that would have endorsed the continuation of the strange system. After all, why should any depositors' names be secret? There may be legitimate reasons to conceal assets, but they're hard to think of offhand. And avoiding taxes should certainly not be one of those reasons. Swiss bankers have hidden behind the secrecy system long enough -- the world wants to know what happened to the billions of dollars and precious artwork deposited by Nazi officials when they looted the vaults and museums of Europe during World War II.

Toyota agrees to pay $16 million fine to U.S. regulators

So, what's up with Toyota? News that the Japanese automaker had agreed to pay a $16.4 million fine to U.S. regulators over sticky gas pedals in millions of its cars is Toyota Motor Corp. appears almost outrageously integral and honest, but that only makes things even weirder. Can anyone remember another time when a large, multinational corporation did the selfless thing in favor of its customers? Then again, can anyone remember another high-profile industrial company that so quickly ruined a sterling reputation it had earned over the years with high-quality products? Maybe Toyota's decision to pay the fine and focus instead on fixing millions of its cars and compensating victims really is an act of corporate contrition, and not a calculated attempt to limit future liability like we've all come to expect from U.S. companies. Then again, Toyota's present liabilities are bad enough. Legal experts say Toyota already could be facing $10 billion in damage claims, according to the New York Times. The U.S. fine was imposed to punish Toyota for failing to inform federal safety regulators for months about the sticky accelerator problem, even though it already had enough reports about the problem from car owners in Europe and Canada to have started fixing vehicles there, the Times said. "We did not try to hide the defect to avoid dealing with a safety problem," Toyota said in a written statement, even though that appears to be exactly what happened. Toyota said it had made a "good faith" effort to fix the problems but agreed to pay the penalty anyway to avoid a long legal fight. U.S. Transportation Secretary Ray LaHood said Toyota had put consumers at risk by failing to report the defective accelerator pedal problem and that U.S. officials would continue with their investigation, the Times said.

U.S., Russia agree to cut nuclear weapons arsenals

It's remarkable to see how much the world has changed in the past few decades. Not so long ago, an agreement to reduce the number of nuclear weapons held by the United States and Russia would have been greeted by celebrations, especially across Europe. Yet this week, a treaty signing that would do precisely that barely was noticed in the United States. Yes, it's true, it took some personal diplomacy involving U.S. President Barack Obama and Russian President Dmitry Medvedev, but a deal between the world's most nuclear-armed nations to cut weapons stockpiles by a third was signed Thursday in Prague, according to Cable News Network (CNN). Obama called the new Strategic Arms Reduction Treaty (START) an indication of the two countries' commitment to "responsible global leadership" while Medvedev called it a "win-win situation" for both countries. "This day demonstrates the determination of the United States and Russia -- the two nations that hold over 90 percent of the world's nuclear weapons -- to pursue responsible global leadership," Obama said Thursday. "Together, we are keeping our commitments under the Nuclear Non-Proliferation Treaty, which must be the foundation for global nonproliferation." Medvedev, too, acknowledged the potentially historic impacts of the new treaty. "This agreement enhances strategic ability and, at the same time, allows us to rise to a higher level of cooperation between Russia and the United States," Medvedev said. For U.S. residents who remember the days when public buildings had fallout shelters and schoolchildren participated in fallout shelter drills, the agreement is a welcome sign of real progress since the Cold War between the United States and the old Soviet Union. Of course, the new agreement is merely a continuation of the previous START deal that expired in December, and still leaves both countries with more than 1,000 nuclear warheads. Just as important in the short term, perhaps, Obama and Medvedev also discussed other related issues, such as developing nuclear power Iran, before the signing ceremony, CNN said. The weapons reduction agreement is still subject to ratification by each country's legislature. Obama and Medvedev wrapped up the new agreement shortly before the scheduled start of a global nuclear security summit in Washington on Monday.

General Motors signals improving financial situation with bigger investments

Tuesday's announcement by General Motors of more than a billion dollars in increased investment in its European operations could be a signal that the worst is over for U.S. automakers in the global economic slowdown. GM said it would pump the additional money into its ailing Opel operation in Germany and its Vauxhall subsidiary in Great Britain, according to the New York Times. The added investment more than triples the automaker's previously announced investment in the European brands, and appears designed to leverage promised subsidies from European governments. GM has asked for $2 billion in loan guarantees in addition to a $2.7 billion package of subsidies from Britain, France, Spain and other countries with Opel factories, the Times said. Those governments and unions in Europe had demanded that GM pay for 50 percent of the cost of restructuring its operations, the Times said. The United States government has paid billions of dollars to rescue General Motors, once the world's largest automaker and still the largest in the United States, and will own half of the legendary U.S. automaker when it emerges from bankruptcy reorganization. GM released a statement calling the increased investment “a vote of confidence in Opel/Vauxhall’s long-term business strength.” But the head of Opel/Vauxhall's European works council, Klaus Franz, said the new money meets the demands of the countries and unions in Europe. "They saw we were running out of cash and running out of time," Franz said. "I think they saw that there was no alternative if they wanted to get aid from European governments." British business minister Ian Lucas and Kurt Beck, premier of the German state of Rhineland-Palatinate, welcomed GM's announcement. "After a long period of uncertainty, it's high time to offer the Opel factories and employees reliable prospects for the future," Lucas and Beck said in a joint statement. GM's increased investment actually was signaled Monday by Nick Reilly, the president of GM Europe, who said in Geneva that GM believed it could not continue to be a global automaker without a major presence in Europe. Reilly said that was the explanation for GM's decision in November to back out of a deal to sell a majority of Opel to Magna International, a Canadian-Austrian auto parts company, and a Russian partner. Opel still plans to close a factory in Belgium and to cut 8,300 jobs in Europe, the Times said.

European summit on bank secrecy looks like more empty rhetoric

All the talk in Europe about ending decades of bizarre bank secrecy rules aimed at protecting trillions of dollars hoarded by the world's richest families is only that -- more talk. Sunday's international conference in Luxembourg is designed to create the impression of progress, even though the holders of all that wealth have no intention of being exposed nor of paying taxes on more than a tiny portion of it. The conference brings together the finance ministers of Switzerland, the world's leader in secret offshore accounts, and Luxembourg and Austria, the European Union secrecy leaders, according to the Reuters international news service. Ministers from Lichtenstein, a longtime money secrecy haven that recently embraced transparency, and Germany also are expected to attend. "This meeting will chiefly be about tax evasion and how to tackle it cross-border," a person with knowledge of the agenda told Reuters. "It will be about bank secrecy, but there is no common position as yet." Germany has joined with the United States in efforts to crack the bank secrecy wall to increase government tax receipts. Of course, it would be a lot more reassuring if the countries could agree on bank transparency because it's the proper thing to do, and regard the increased tax collections as a secondary -- although substantial -- benefit. If ordinary people have to pay taxes every year on their holdings, why should the super-rich be able to hide behind archaic secrecy rules to escape their share? They are, after all, the largest beneficiaries of laws and traditions protecting private ownership. Then again, doing away with these secrecy regimes will by implication peel away the senseless protection enjoyed by the perpetrators of one of modern society's greatest evils -- the confiscation of wealth from countries all over the world by the Nazis in World War II. Until the banks are willing or are forced to reveal what happened to all of that wealth -- or, if it's gone, who made off with it -- protestations about reining in secrecy laws won't amount to anything worthwhile.

U.S. automakers say "domo arigato" to Toyota

Maybe all U.S. automakers should call their next new vehicles by the name "Domo Arigato," which means "thank you very much" in Japanese. With the Toyota Motor Corp. on the ropes following a series of safety recalls that has so far reached 8 million vehicles and sent its stock price plummeting, the U.S. Congress announced an investigation into the formerly formidable Japanese carmaker's response to the crisis. In addition to recalling millions of cars in the United States, Toyota has suspended most of its U.S. manufacturing and sales and expanded its recall to include vehicles made in China and in Europe, according to the Reuters international news service. U.S. Rep. Henry Waxman (D-Los Angeles), chairman of the House Energy and Commerce Committee, said Thursday he planned a hearing to see "how quickly and effectively" Toyota has responded to complaints about malfunctioning gas pedals. "Like many consumers, I am concerned about the seriousness and scope of Toyota's recent recall announcements," Waxman said. The recalls and repairs alone will cost hundreds of millions of dollars to Toyota, which last year supplanted General Motors Corp. as the world's largest automaker. Combined with the expected loss of customers and the damage to its reputation, the crisis is a still-growing disaster for Toyota. The car company told its dealers on Thursday that it would take months to repair all of the affected vehicles. Toyota said it would send recall notices to vehicle owners in lots of 10,000 to try to avoid overwhelming car repair shops, according to spokesman Mike Michels. "Obviously, the dealers couldn't handle everybody coming all at once," Michels said. "So that does have to take place over time. This volume of vehicles will obviously take a number of months. I don't have an estimate on that." Some U.S. dealers told Reuters they were making plans to hire additional staff and extend their hours to handle the repairs.

Plans for Mars exploration offer hope for international cooperation in space travel

If there's ever going to be a United Federation of Planets or anything like it with human beings involved, the next step -- fairly obviously -- has to be cooperation on space exploration between beings on this planet. Toward that end, apparently, comes word from NASA's Mars Exploration Program in Sunnyvale, Calif., that a merger between the U.S. and European Union space programs is being planned, according to Cable News Network (CNN). Doug McCuistion, director of the Mars program at the Ames Research Center, told CNN that an agreement could take a year to complete and joint missions could begin by 2016. "The European Space Agency's council and their program board have agreed to the terms that we're working with and have endorsed this partnership to go forward," McCuistion said. "So we are starting the new year with a renewed excitement for missions beginning in 2016 to be done in a joint partnership between Europe and NASA." Such an agreement would have the twin advantages of sharing the cost of the multibillion-dollar missions and assuring that any knowledge gained does not benefit one nation over another but contributes to overall human understanding of the universe. "That's a very challenging mission of launching something from here, putting it into orbit at Mars, getting it to the surface and collecting samples, getting those samples back into orbit, then return them to Earth," McCuistion said. "This is a mission that will change our understanding of Mars and change our understanding of planetary science significantly. It really needs to be a global effort." But understanding that means the integration of the space programs of the Soviet Union and China, something that could be decades away given the current state of international relations on the third planet.

Kosovo conducts first election as independent nation

Low turnout by European standards failed to dim the excitement among government leaders in Pristina on Sunday as voters in Kosovo went to the polls for its first local election since declaring itself independent from Serbia last year. "Today we are showing that our country and its citizens have deserved independence, democracy and the European Union perspective," Prime Minister Hashim Thaci exulted after the vote, according to the Reuters international news service. Forty-five percent of Kosovo's 1.5 million voters turned out for the balloting, in which the population chose mayors and councilmembers in the new country's 36 municipalities. Winners will not be determined until runoff elections next month. Some analysts blamed the low turnout on frustration over the country's sluggish economy and 40 percent unemployment rate, Reuters said. "The faith is lost in Kosovo because of high corruption among the political parties," said Halil Matoshi, a local analyst. "People that vote today are mainly party militants." That's certainly possible, but it's a little hard to believe that the population of a brand new country that fought so hard to be independent would be jaded by politics. The turnout also was impacted by Serbian calls for a boycott by voters of Serbian descent, who make up seven percent of Kosovo's population. Kosovo declared independence from Serbia in 2008, nine years after NATO bombers drove Serbian forces from the then-province to stop the killing of ethnic Albanians, who make up 88 percent of the population. Kosovo's independence has only been recognized by 63 countries, primarily Western nations, including the United States. Serbia and Russia have refused to recognize the new country. Kosovo is the poorest country in Europe, with a per capita income of $2,300 annually, according to the U.S. Central Intelligence Agency.

Negative market reaction to Yahoo-Microsoft deal probably reflects reality

That Google shares fell today after the long-awaited deal between Microsoft and Yahoo was finally announced was a given -- it can't be good for Google that two of its largest competitors for the Internet search market have joined forces. But the fact that Yahoo's share price also dropped does not bode well for the future of this arrangement. The 10-year deal, under which Microsoft's new Bing search engine will power searches on Yahoo sites in exchange for a share of revenue, still must be approved by regulators in the United States and Europe, according to the Reuters international news service. Yahoo and Microsoft were motivated to reach a deal in their effort to challenge Google's dominance in the search market. Google has 65 percent of the U.S. search market versus Yahoo's 19.6 percent and Microsoft's 8.4 percent, Reuters said. Yahoo turned down Microsoft's $47.5 billion takeover offer last year. Analysts quoted by Reuters said the market was not energized by the deal because Yahoo did not receive any upfront payment as expected. "Those that were looking forward to a take-out, the deal today was rather disappointing -- it's not as good as what investors expected," said Marc Pado of Cantor Fitzerald & Co. "Overall, it's a big positive for two companies that have been struggling to keep up with Google. This consolidates their resources and allows them to make a more concerted push as the No. 2 entity," said Ross Sandler of RBC Capital Markets. Yahoo CEO Carol Bartz applauded the deal and said the lack of an upfront payment was not a deterrent because the agreement would be lucrative for her company.
While Yahoo CEO Carol Bartz had previously said that any deal would require a partner with "boatloads of money," she said on Wednesday that the revenue share agreement in the Microsoft deal was more valuable to Yahoo than a one-time payment. "Having a big up-front cash payment doesn't really help us from an operating standpoint," she said in a conference call with Microsoft CEO Steve Ballmer, Reuters said. Microsoft is expected to pay Yahoo 88 percent of search revenue from Yahoo sites for the first five years, while the companies continue to keep their advertising businesses separate. Yahoo said the deal will boost its annual operating income by $500 million and to increase cash flow by $275 million. The companies said they were hopeful the deal would close early next year, Reuters said.

European nations agree to take Guantanamo inmates, AG says

Well, it's looking as if U.S. President Barack Obama's 'apology tour' around Europe last month is beginning to pay dividends. At a stop in Berlin on his own three-day tour of Europe, U.S. Attorney General Eric Holder said Wednesday that he was "pleasantly surprised" that some European allies were willing to some accept terror suspects when the U.S. military prison at Guantanamo Bay, Cuba, closes in January, according to the Washington Post newspaper. "I know that Europe did not open Guantanamo and that in fact a great many on this continent opposed it," Holder said. "To close Guantanamo, we must all make sacrifices, and we must all be willing to make unpopular choices." To be sure, the Europeans have been slow to offer to accept any of the prisoners, who were captured and held, some for years, in the U.S.-sponsored war on terror that began after the Sept. 11, 2001, terrorist attacks on New York and Washington. Many European countries, notably France, opposed the war on terror. Holder said the United States was conducting a review of all cases involving the 241 prisoners still held at Guantanamo and would be making formal requests to European nations about accepting specific inmates who are not considered security risks. Obama has put Holder, the first African American Attorney General in U.S. history, in charge of closing the prison, the Post said. While only England has accepted even one prisoner so far and France is only believed to be committed to resettling one Guantanamo inmate, U.S. officials are said to believe that European nations could eventually take as many as 60 suspects. Portugal, Ireland, Switzerland, Spain and Lithuania have also offered to resettle inmates, the Post said.

Financial crisis claims another government

Today's collapse of Czechoslovokia's center-right government should come as another warning to the United States and the world's other rich nations that a lot more will have to be done before the world economic system gets restored to health. Particularly in Europe, where former Soviet-dominated countries and former Soviet republics have been struggling for years to qualify for admission to the common currency of the European Union, the floundering world economy is a threat to stability, trade and, ultimately, the post-USSR peace. Czech Prime Minister Mirek Topolanek offered to resign Tuesday after losing the confidence question by one vote. His center-right minority government may stay on until June when its turn as rotating chair of the EU ends, according to the Reuters international news service. Of course, the real problem is that the relatively newly independent countries are, in fact, relatively newly independent countries, and their former centrally planned economies are still young. Without plenty of support from the older and richer EU members, these states are destined to remain second-class members of the economic alliance. Their economies simply are not capable of generating the income necessary for maintaining European-style economies, which are a mix of the capitalist and central-planning models. It's expensive to guarantee state-paid health care for tens of millions of citizens, to pay extensive unemployment benefits to those who are not working and to provide free college educations for those who qualify. Despite its economic difficulties, Czechoslovakia has not had to bail out its banks, like the United States and other major Western nations have done.