Syria: Hillary Clinton and Sergei Lavrov inch closer towards deal on peace plan

Hopes of a diplomatic breakthrough over the civil war in Syria rose on Friday after US Secretary of State Hillary Clinton held crisis talks with Russian foreign minister Sergei Lavrov.

(L-R): U.S. State Secretary Hillary Clinton and Russian Foreign Minister Sergey Lavrov  Photo: AP

The euro’s share of global foreign-exchange reserves fell from January through March to the lowest level since the third quarter of 2006, International Monetary Fund data show.

The shared currency’s percentage declined to 24.95 percent, from 25.03 percent in the previous three months, according to the quarterly data. The dollar’s portion of official reserves shrank to 62.2 percent in the first quarter, from 62.22 percent in fourth-quarter 2011. Sterling had the biggest gain, climbing to 4 percent, from 3.83 percent at the end of 2011, the most since the second quarter of 2011.

The yen’s share was 3.55 percent in the first quarter, an increase from 3.53 percent from the previous three months, and central banks increased their holdings of Swiss francs by 0.01 percentage point to 0.12 percent.

The category of “other currencies” shrank for the first quarter since the start of 2009, to 5.17 percent, according to the data.

KREFELD, Germany (Reuters) - A deputy German Finance Minister dismissed a magazine report saying Finance Minister Wolfgang Schaeuble had told conservative members of parliament on Friday to prepare for a looming Greek bankruptcy and euro zone exit.

"This report is nonsense," Deputy Finance Minister Steffen Kampeter told Reuters on Saturday on the sidelines of a regional meeting of Christian Democrats in the western town of Krefeld.

Kampeter said that Schaeuble had spoken to the conservative MPs on Friday about the need for the austerity and reform measures in Greece to be implemented.

German newsweekly Focus reported that Schaeuble had told MPs in Chancellor Angela Merkel's Christian Democrats (CDU) and the sister party, Christian Social Union (CSU), to get ready for Greece leaving the euro zone and a Greek state bankruptcy.

The magazine said in an advance of a report in its Monday edition that Schaeuble was talking to the MPs about the further development of the European Stability Mechanism (ESM), the euro zone's permanent bailout fund. He said that an aspect that would be necessary was to have a set-up for state bankruptcies.....

http://www.reuters.com/article/2012/06/30/us-eurozone-greece-schaeuble-idUSBRE85T0B220120630

GENEVA (Reuters) - World powers struck an agreement that a transitional government should be set up in Syria to end the conflict there but they remained at odds over what part President Bashar al-Assad might play in the process.

Peace envoy Kofi Annan said after the talks in Geneva on Saturday the government should include members of Assad's administration and the Syrian opposition and that it should arrange free elections.

"Time is running out. The conflict must be resolved through peaceful dialogue and negotiations," Annan told reporters.

The talks had been billed as a last-ditch effort to halt the worsening violence in Syria but hit obstacles as Russia, Assad's most powerful ally, opposed Western and Arab insistence that he must quit the scene.

The final communiqué said the transitional government should be formed "on the basis of mutual consent".

In a victory for Russia, it omitted text in a previous draft which explicitly said the plan would exclude from government anyone whose participation would undermine the transition's credibility and jeopardize stability and reconciliation.

After the meeting, the United States and Russia contradicted each other over what that meant for Assad, who has ruled Syria for 11 years since succeeding his father Hafez and has been condemned internationally for the ferocity of his crackdown on the uprising against him.

Russian Foreign Minister Sergei Lavrov said he was "delighted" with the result. The key point was that the deal did not attempt to impose a process on Syria, he said

It did not imply at all that Assad should step down as there were no preconditions excluding any group from the proposed national unity government, Lavrov said.

But U.S. Secretary of State Hillary Clinton said it sent a clear message to Assad that he must quit.

"Assad will still have to go," Clinton told reporters. "What we have done here is to strip away the fiction that he and those with blood on their hands can stay in power."....

http://www.reuters.com/article/2012/06/30/us-syria-crisis-idUSBRE85D0IS20120630

EU oil embargo on Iran takes effect. Gulf braced for backlash, Hormuz closure

DEBKAfile Special Report July 1, 2012, 9:58 AM (GMT+02:00)

Repaired Saudi-Iraq pipeline bypasses Hormuz

The European oil embargo taking effect Sunday, July 1 blocks the sale to European Union members of 1 million, or one third, of Iran’s daily output of 3.3 million barrels a day. EU insurance firms, the biggest in the world, henceforth withhold cover from governments and firms operating tankers which carry Iranian oil.

This sanction was threatened in January if diplomatic negotiations in the interim failed to persuade Iran, the world’s fourth largest oil producer, to halt work on developing a nuclear weapon.

Three rounds of talks by six world powers (US, Russia, UK, France, China and Germany) with Iran have since ended in impasse. A fourth at a technical level is scheduled for Tuesday, July 3, in Istanbul.
Braced against potential reprisals from Tehran, Saud Arabia and fellow Gulf nations have placed their armies on alert. Completing a deployment begun last Thursday for possible intervention in Syria, Saudi Arabia has massed units on its borders with Jordan, Iraq and Kuwait. The United Arab Emirates sea, air and special forces are on a state of readiness, as are US Fifth Fleet vessels in Gulf waters.
While not anticipating full-scale war, they are acutely apprehensive of possible Iranian strikes against Gulf oil fields, export terminals, pipelines or tankers either by covert Al Qods Brigades squads or local Shiite saboteurs.
Tehran has repeatedly threatened to treat an oil embargo as an act of war and close the strategic Strait of Hormuz to Gulf shipping in response.

Two days before the oil embargo went into effect, Saudi Arabia and the UAE activated two extra oil pipelines bypassing Hormuz and providing ....

http://debka.com/article/22149/EU-oil-embargo-on-Iran-takes-effect-Gulf-braced-for-backlash-Hormuz-closure-

DUBAI (Reuters) - Iran pledged to counter the impact of a European Union oil embargo which took full effect on Sunday, saying it had built up $150 billion in foreign reserves to protect itself.

The EU ban on crude imports is part of a push by Western countries aimed at choking Iran's export earnings and forcing it to curb a nuclear programme they fear includes weapons development. Tehran says it has no such plan.

"We are implementing programmes to counter sanctions and we will confront these malicious policies," Mehr news agency quoted central bank governor Mahmoud Bahmani as saying.

He said the effects of the sanctions were tough but that Iran had built up $150 billion in foreign reserves.

The European Union banned new contracts for imports of Iranian crude in January, but allowed existing ones to continue until July 1. EU firms are also barred from transporting Iranian crude or insuring shipments under the sanctions.

"They signal our clear determination to intensify the peaceful diplomatic pressure," British Foreign Secretary William Hague said in a statement....

http://www.reuters.com/article/2012/07/01/us-iran-sanctions-idUSBRE86005M20120701

Captured croc ‘world's largest'

Crocodile shock: Bunawan Mayor Edwin Cox Elorde (centre) pretends to measure a huge crocodile which Guinness World Records has said is the world's largest in captivity. Picture: AP Source: AP

GUINNESS World Records said a killer crocodile in the southern Philippines is the world's largest in captivity.

Devalue the Euro?

Submitted by Bruce Krasting on 06/30/2012 20:58 -0400

• Holy smokes! The EU technocrats have finally pulled out the big guns! The agreement on Friday was to take the incredibly bold step of avoiding subordination in the Spanish bond market. The money needed for the busted Spanish banks will now be made available directly from Brussels with few strings attached. Wow! What a breakthrough!

Global markets have taken a quick look at what has been offered up by the deep thinkers in Euroland and said, “WE LOVE IT!”

Me? I think it’s a spit in the bucket. The half-life of this bailout will be measured in weeks.

We have seen this play out time and again the past four years. The capital markets are forcing policy decisions.

“Wise” people like Paul Krugman have said for years that “Bond Vigilantes” don’t exist. There is no doubt any longer that they exist and are alive, well and hungry. The vigilantes are also armed with highly sophisticated robots that can execute attacks on multiple fronts and across markets in milliseconds. The war going on in the bond markets is not over by a long shot.

My read of the EU summit is that Spanish banks are going to get a “soft” bailout. Existing common shareholders and subordinated bond holders will not get wiped out (as they should). The bankers must love this result. They get to keep their jobs for a few years longer, all the time praying for a miracle.

Where does this go? Directly to Italy. Which Italian bank would love to have some of that cheap equity money that Brussels is doling out? All of them.

But here’s the deal, France’s banks are....

http://www.zerohedge.com/contributed/2012-06-30/devalue-euro

DUBAI (Reuters) - Iran announced missile tests on Sunday and threatened to wipe Israel "off the face of the earth" if the Jewish state attacked it, brandishing some of its starkest threats on the day Europe began enforcing an oil embargo and harsh new sanctions.

The European sanctions - including a ban on imports of Iranian oil by EU states and measures that make it difficult for other countries to trade with Iran - were enacted earlier this year but mainly came into effect on July 1.

They are designed to break Iran's economy and force it to curb nuclear work that Western countries say is aimed at producing an atomic weapon. Reporting by Reuters has shown in recent months that the sanctions have already had a significant effect on Iran's economy.

Israel says it could attack Iran if diplomacy fails to force Tehran to abandon its nuclear aims. The United States also says military force is on the table as a last resort, but U.S. officials have repeatedly encouraged the Israelis to be patient while new sanctions take effect.

Washington said the EU's oil ban might force Tehran to give ground at the next round of nuclear talks, scheduled for this week in Istanbul.

Announcing three days of missile tests in the coming week, Revolutionary Guards General Amir Ali Hajizadeh said the exercises should be seen as a message "that the Islamic Republic of Iran is resolute in standing up to ... bullying, and will respond to any possible evil decisively and strongly."

Any attack on Iran by Israel would be answered resolutely: "If they take any action, they will hand us an excuse to wipe them off the face of the earth," ......

http://www.reuters.com/article/2012/07/01/us-iran-idUSBRE8600HG20120701