Armenia Presidential Candidate Shot, Election in Doubt

 An Armenian presidential candidate was wounded by unknown gunmen in the capital Yerevan on Thursday night, police said, in an attack that could delay February's election. Paruyr Hayrikyan, whose life was not in danger after the shooting, is one of eight candidates running in the February 18 vote but is not seen as a strong challenger to Serzh Sarksyan, who is expected to be re-elected for a second five-year term.

However, according to Armenia's constitution, the election could be postponed by two weeks if a candidate is unable to campaign or run. In the event of a candidate's death, a new election is called, to be held within 40 days.

The 2008 presidential election in Armenia - a landlocked ex-Soviet republic of 3.2 million that is Russia's main ally in the South Caucasus - were marred by violent clashes between opposition protesters and police.

Bank scandal helps surge by Berlusconi ahead of Italy election

 A growing scandal at Monte dei Paschi di Siena, the world's oldest bank, has helped Silvio Berlusconi close the gap with the center-left frontrunners to five percent, its tightest so far, weeks before Italy's election, a poll showed on Friday.

An SWG survey showed former premier Berlusconi's center-right coalition had gained 1.3 percent in a week and was now on 27.8 percent, compared to 32.8 percent for Pier Luigi Bersani's center left, which had lost 1.6 percent.

Berlusconi, a 76-year-old billionaire media magnate, has made an astonishing comeback over the last month through a blitz of radio and television appearances, but SWG said the Monte dei Paschi scandal had also had a significant impact.

Former PM Wins Czech Presidency

Left-leaning former Czech Prime Minister Milos Zeman has won his country's first direct presidential elections with about 55 percent of the vote.  The international community was closely watching the voting as it will impact the Czech Republic's future relations with the European Union.

Supporters celebrated upon learning that Zeman won the Czech Republic's first direct presidential poll since the breakup of Czechoslovakia in 1993. It came as a blow to his rival, Karel Schwarzenberg, the current Czech foreign minister, who at age 75 hoped to become the first prince-turned-president of a European Union nation.

The election defeat of the pipe-smoking prince followed a bitter campaign in which both men clashed over the Czechs' troubled history and about the European Union.

Slovenian Government on Verge of Collapse

Slovenia's conservative government is on the verge of collapse after a junior partner quit the coalition Wednesday.

The Civic List party says it is quitting over Prime Minister Janez Jansa's refusal to resign because of alleged corruption.

Jansa will now be forced to govern with a minority in parliament, until early elections are held.

Meanwhile, government offices and schools were closed Wednesday and hospitals were forced to cut services because of a day-long strike by government workers. Tens of thousands of civil servants marched against economic austerity plans, including layoffs and pay cuts.

Malta parties fight "tablet war" as election nears

VALLETTA (Reuters) - Parties running for election in Malta launched a 'tablet war' on Thursday, issuing rival promises to hand out iPad-style computers to school children if elected next month.

Putting education and technology at the center of the two-party race to lead the tiny island state, the opposition Labour Party promised a tablet computer for every eight-year-old school child.

Two hours later, Prime Minister Lawrence Gonzi unveiled his Nationalist Party's electoral program which included plans to give tablets to all school children aged between 5 and 16.

Bloggers in the euro zone's smallest country lampooned the politicians' largesse, likening the parties to both Father Christmas and Moses, the biblical figure who brought the word of God inscribed on tablets of stone.

Gonzi said his government had already given laptops to all teachers and put computerized white boards into all classrooms. Giving tablets to all children was the next logical step, he said, adding that pupils would in future use digital text books.

Labour Party leader Joseph Muscat told a news conference: "Tablets are key to fighting IT illiteracy."

Spain's unemployment rate reaches record high

Nearly 55 percent of Spanish youth under 25 years out of job as unemployment rate surges to 26 percent in final quarter.

Spain's unemployment rate has surged to a modern-day record of 26.02 percent in the final quarter of 2012 as nearly six
million people searched in vain for work in a biting recession, official data shows.
The jobless rate data released on Thursday climbed from 25.02 percent the previous quarter, reaching the highest level since Spain returned to democracy after the death of General Francisco Franco in 1975.
The story for young people was even grimmer: the unemployment rate for those aged 16 to 24 soared to 55.13 percent, up from 52.34 percent the previous quarter.
The result shattered even the modest expectations of Prime Minister Mariano Rajoy's government, which had been forecasting an unemployment rate of 24.6 percent by the end of 2012.
"It is a very, very high figure," said Soledad Pellon, market strategist at IG Markets in Madrid.
"The expectation is that this figure will carry on growing during 2013.
This year will still not be a year in which we will see job creation," she said.

Poland stumbles as shale gas industry fails to take off

 A map of Poland, unevenly colored in shades of yellow, brown, green and purple, like a half-finished jigsaw puzzle, hangs prominently on the walls of the country’s ministries, state agencies and corporations. Official visitors are cordially invited to take a closer look.

The label in the upper right-hand corner of this new map reads, “Map of Concessions for Hydrocarbon Exploration and Production.”

Poland, which last century was the target of foreign armies shaping the region’s political history, today is being divided up by a hydrocarbon fever that the Polish government has energetically encouraged. Hoping to reproduce the recent “energy revolution” brought about in the United States by the advent of fracking and other drilling technologies, the Polish government has spearheaded shale gas exploration in Europe in the hopes that one day it will have its own dynamic natural gas industry.

“Shale gas exploration and extraction is a priority for our government, and that’s the reason we’ve decided to focus the investment energy of many companies,” says Mikolaj Budzanowski, Poland’s treasury minister, supervising the country’s state-owned oil and gas enterprises.

Cameron to Deliver Delayed Europe Speech on Wednesday

Prime Minister David Cameron will deliver his postponed address on Britain’s future relations with Europe on Wednesday, his office said Monday.Mr. Cameron had planned to deliver the speech in Amsterdam on Friday but delayed it amid the Algerian hostage crisis, in which at least three Britons were killed. However, Mr. Cameron’s office released excerpts suggesting he had planned to explicitly warn that Britain might leave the European Union unless the bloc changed the way it was run.

Under pressure from his Conservative Party, Mr. Cameron has signaled his readiness for a referendum on the relationship with Europe, although the precise question to be asked is not clear.

The United States has been unusually public in its insistence that Britain, a close ally, stay in the union. Last week, a White House spokesman quoted President Obama as telling Mr. Cameron by telephone that “the United States values a strong U.K. in a strong European Union, which makes critical contributions to peace, prosperity and security in Europe and around the world.”

Spain's PM defends party from corruption inquiry

 Spanish Prime Minister Mariano Rajoy vowed action against wrongdoers in his ruling People's Party (PP) after revelations of a former treasurer's Swiss bank account threatened to stir a deeper party crisis.

An ongoing judicial investigation of former PP treasurer Luis Barcenas last week showed he had a Swiss bank account which at one point held as much as 22 million euros ($29 million), according to a court document and statements by court officials.

Barcenas stepped down as party treasurer in 2009 when judges began to investigate his possible involvement in alleged illegal payments and kickbacks to party officials from builders and other businesses that won government contracts.

PP leaders have denied any knowledge of illegal schemes but Rajoy said he would act if wrongful activities were found.

Greek conservatives tie with leftists in opinion polls

Greece's power-sharing conservatives continue to draw the same levels of support as the anti-bailout leftist opposition, according to two polls on Saturday which showed two-thirds of Greeks feel the country is headed in the wrong direction.

A poll by VPRC for Syntakton newspaper showed support for Prime Minister Antonis Samaras's New Democracy party at 29.5 percent, tied with the leftist opposition SYRIZA party.

Another survey by Metron Analysis for weekly newspaper Ependytis showed support for New Democracy at 27.8 percent versus SYRIZA's 28 percent.

The conservatives had trailed SYRIZA for months after the June election, but a January 11 poll by Public Issue showed they had pulled broadly level with the leftist opposition for the first time in months.

"The three-party ruling coalition seems to be regaining ground after the Eurogroup's decision in December secured the disbursement of a bailout tranche," Ependytis newspaper said.

"But it still faces a public opinion majority of 64 percent which feels the country is headed in the wrong direction."

Italy Needs 9 Billion Euros for Deficit Goal, Official Says

Italy may need at least 9 billion euros ($12 billion) in additional budget measures in 2013 to meet its deficit targets as the worsening recession hurts tax revenue and fuels unemployment costs, a Finance Ministry official said.

Italy will need to find 8 billion euros to finance jobless schemes and faces a 6 billion-euro revenue shortfall from value- added and gambling taxes, Finance Undersecretary Gianfranco Polillo said in an interview in Rome. That will be partly offset by a bigger-than-expected take from a new property tax and falling debt financing costs that will add 5 billion euros in resources.

The Bank of Italy today cut its forecast for the economy, predicting a contraction of 1 percent this year compared to a previous forecast of a 0.2 drop, saying the global slowdown and weak domestic demand were choking growth. That will make it harder for Italy to meet its goal of a 2013 deficit of 1.6 percent of gross domestic product, he said.

This year “there will be some spillover from a bigger deficit in 2012 stemming from the fact that GDP has slumped and we will have less coming in from VAT and a bit less from gaming, which we will only be able to partly compensate for with the increase in the property tax,” he said.
Structural Goal

After abuse scandal, Pope appoints new head of Irish church

Pope Benedict on Friday appointed the new head of the Roman Catholic Church in Ireland to succeed Cardinal Sean Brady, whose tenure has been plagued by scandal over the sexual abuse of children on the predominantly Roman Catholic island.

The Vatican said Monsignor Eamon Martin, 51, had been named "coadjutor" archbishop of Armagh, meaning he will automatically succeed Brady when he retires next year.

Brady, who will remain primate until his retirement, has resisted calls by three of the four main parties in the Republic of Ireland and Northern Ireland's deputy first minister to resign over the sexual abuse scandal.

The Vatican's move was seen as an attempt to give him a soft exit. While it spared him the embarrassment of stepping down before his scheduled retirement, he will effectively be sidestepped as Martin takes over the running of the diocese.

Armagh, which is in Northern Ireland, is a particularly significant diocese because its archbishop has the title "Primate of All Ireland," the senior Church position on the divided island.

Ukraine prosecutor accuses Tymoshenko of murder

Ukraine's chief prosecutor accused jailed opposition leader Yulia Tymoshenko of ordering the killing of a business rival 16 years ago, dealing a new blow to the ex-prime minister who the West says is the victim of a political vendetta.
The announcement came on Friday after a court adjourned a second trial against Tymoshenko for tax evasion and her defense counsel warned her health had declined to a "critical" level.
Tymoshenko is already serving a seven-year jail sentence for abuse of office, meted out in October 2011.
She and Western governments say she is the victim of a witch-hunt by the leadership of President Viktor Yanukovich who narrowly beat her in a run-off for the presidency in February 2010.
Political enemies of the 52-year-old politician have indicated for a year that an additional case was building against her over the killing of Yevhen Shcherban, a deputy and businessman who died in a hail of bullets in 1996 as he stepped from a plane.
But the announcement by state prosecutor Viktor Pshonka that Tymoshenko, a powerful gas trader in the 1990s, had conspired with a former prime minister, Pavlo Lazarenko, in ordering a $2.8 million "hit" against Shcherban came as a surprise.

Italy’s Recession to Be Deeper Than Expected, Central Bank Says

Italy’s recession will be worse than previously expected, the country’s central bank said today as it cut its 2013 estimate for gross domestic product on weakness in the global economy and disappointing internal demand.

Italian GDP will probably contract 1 percent this year, the Bank of Italy said today in its economic bulletin. That compares with a July estimate from the central bank for a 0.2 percent reduction.

“In our country, internal demand still hasn’t reached an inflection point,” the Bank of Italy said. The lower GDP forecast was “due to the worsening of the international scenario and the continuation of the weakness in business activity in recent months.”

Italian court rejects Berlusconi bid to halt tax fraud trial

A Milan court on Friday rejected a request from Silvio Berlusconi's lawyers to suspend a tax fraud trial involving the purchase of broadcasting rights by his Mediaset media group until after the February 24-25 election.

The 76-year-old former prime minister is appealing against a previous court ruling over the case on October 26, in which he was sentenced to four years in jail.

Berlusconi's lawyers had argued that his position as leader of a coalition running in the election represented a legitimate impediment to his appearing in court.

His lawyers had also argued that the case would interfere with the electoral campaign. The judges rejected both requests.

The center-right coalition has not yet chosen a candidate for the premiership and Berlusconi, who was prime minister four times, has said he will not stand again.

Berlusconi is also facing a trial on charges of paying for sex with an underage prostitute and a third trial for allegedly leaking a confidential phone call to the media.

Earlier this week Berlusconi's legal team failed to have the "Ruby" sex trial postponed. A final hearing of the closely watched case is scheduled for February 4, with a verdict likely to come before the vote.

The Mediaset tax fraud appeals trial started on Friday, and a verdict is unlikely to come any time soon. The next hearing is scheduled for January 25.

Opposition candidate ahead in Cyprus presidential race: poll

The main opposition candidate, Nicos Anastasiades of the right-wing Democratic Rally Party, is leading the race to become Cyprus's president, an opinion poll showed on Friday, as 11 hopefuls submitted bids for the February 17 election.

The winner of the vote, which may extend to a run-off on February 24, will be mandated to negotiate with prospective lenders for a multi-billion-euro bailout for the island.
Damaged by its exposure to Greece, Cyprus applied for a bailout from the International Monetary Fund and the European Union last year.
It is estimated that Cyprus needs up to 17.5 billion euros to recapitalize its banks and put the economy back on a stable footing. That amount is equal to the entire output of the Cypriot economy, meaning any bailout may not be sustainable.
"Our manifesto offers hope and prospects for the country through a national unity government," said Anastasiades, running more than 10 points clear of his closest rival according to the latest opinion poll.
In the survey for the state broadcaster, Anastasiades polled 38 percent compared with 23.7 percent for Stavros Malas, an independent backed by the now-ruling Communist party AKEL, and 19.7 percent for independent candidate George Lillikas.
Incumbent President Demetris Christofias, a communist whose tenure has seen economic demise and record-high unemployment at 14 percent, is not seeking re-election.
Conclusion of a bailout deal with lenders is awaiting the calculation of the precise recapitalization needs of Cypriot banks. Talks have also been overshadowed by concerns from some European nations, notably EU paymaster Germany, of an opaque banking system which may encourage money laundering.
German chancellor Angela Merkel, in Cyprus last week to lend support to Anastasiades's bid, said the island must move ahead with reforms [ID:nL5E9CB1RP].

Greek ex-minister Papaconstantinou faces tax probe

Greek MPS have voted to launch a criminal investigation into ex-Finance Minister George Papaconstantinou.

He is accused of tampering with a list of suspected tax evaders with Swiss bank accounts.

Three of Mr Papaconstantinou's relatives were removed from the list. He has denied involvement.

But MPS voted against extending the probe to another ex-finance minister, Evangelos Venizelos, and former PMs Lucas Papademos and George Papandreou.

The scandal centres on a list of names, provided in 2010 to the Greek government by then French Finance Minister Christine Lagarde, who is now head of the IMF.

The "Lagarde list", as it has become known, contained the names of over 2,000 Greeks who held Swiss bank accounts, and who may not have paid tax on all their income.

But the Pasok (Socialist Party) government of the time took no action and later claimed to have lost the list.

It later re-emerged, after a journalist published it, but the later version did not include Mr Papaconstantinou's relatives, reports say.

Greece not out of woods, must stick to reforms: finance minister

Greece not out of woods, must stick to reforms: finance minister -- Greece must resist internal political pressure to slow economic reforms in a year that will dictate whether it avoids bankruptcy, Finance Minister Yannis Stournaras told Reuters in an interview.

With EU partners starting to praise Greek efforts to exit its worst crisis in decades and some economic indicators showing fledgling signs of recovery, demands are increasing on the government to give up crippling austerity and reforms.

"What scares me is the big pressure from society, media and parliamentary deputies from all parties to ease the programme. We must resist ... it's too early to declare victory," he said from his office on Syntagma square overlooking parliament.

Stournaras, an economist recruited by Prime Minister Antonis Samaras's conservative-led coalition after it won elections in June, said there were signs Greece was starting to exit the three-year debt crisis that shook the euro zone.

Money is returning to Greek banks, bond prices are rising and the 2013 primary budget will do better than the troika of international lenders predicted for the year, registering a 0.4 percent surplus, despite a crippling recession.

"The primary deficit is what we are judged on. The troika expects it at zero but we believe we will do slightly better," he said. "This means that there is a good chance our partners may further reduce our debt."

Spain’s government Rosy scenario

The Spanish government is newly optimistic, but many Spaniards are not . IN MADRID ministers brag that they have turned a corner. Euro-zone bond yields have been hitting new low levels (see article). Spain’s banking and labour reforms are now in place. Growth will revive later this year or in 2014. Jobs, the Spanish El Dorado, will eventually follow.

But that is surely too rosy a view. Exports are growing and the current account is now in surplus, but even the government sees GDP shrinking by 0.5% in 2013 (and most analysts talk of 1.5%). Spaniards are suffering an aching spell of record unemployment, at 26.6%. Austerity means worsening public services just as real wage and pension cuts make people poorer. The biggest asset for many families, their house, is plunging in value, with a further 20% price fall expected. Higher income, sales and housing taxes will hit spending power further. Business confidence and retail sales are in retreat. And a housing glut will take years to digest. Only 25,655 of what Fitch, a ratings agency, says are 1.2m unsold Spanish houses were bought in November.

Spain must eventually emerge from all this. But will Spaniards put up with extended pain? Or will they rebel against a political establishment that has failed them? So far they have been quietly dignified. Peaceful demonstrators have made more headlines than violent protesters. Yet days lost to strikes are at a ten-year high. A budget deficit of 7-8% of GDP in 2012 must be cut this year. The European Union has set a 4.5% target, though it may relax this. Investment has already been slashed so future cuts must fall on public health, education, pensions and welfare services.Polls show most politicians in the doghouse. Barely half of all Spaniards back the two parties that have governed for three decades: the ruling People’s Party (PP) of Mariano Rajoy or the opposition Socialists. The communist-led United Left has surged to almost 16%, while Rosa Díez’s centrist Union for Progress and Democracy stands at 10%. Spaniards blame the Socialist government of José Luis Rodríguez Zapatero for dropping them in the mess, and Mr Rajoy’s PP for failing to get them out of it, says Juan José Toharia of Metroscopia, a pollster. Only one in six Spaniards has confidence in Mr Rajoy.

Slovenia’s government Tottering on

THE government is “clinically dead”, declared Delo, a Slovenian daily, on January 15th. The question is how long it can last in this state. Some say Janez Jansa, the prime minister, will step down within days; others expect him to cling on. His office dismisses talk of resignation. Yet Tomaz Saunik, a political analyst, concludes that “one way or another, he will fall”.

Since November Slovenia has sizzled with protests. On January 8th the official anti-corruption commission dropped a bombshell by saying that Mr Jansa and Zoran Jankovic, leader of the largest parliamentary party, which is in opposition, had questions to answer. Both men, said the commission, “systematically and repeatedly violated the law” by failing to report their assets. Mr Jansa, already on trial for corruption, should say how he came by more than €200,000 ($265,000) of “unknown origin”. Mr Jankovic, who is also mayor of Ljubljana, should explain relations between firms owned by his sons, companies doing business with the city and cash transferred to his private account. On January 11th, 10,000 protesters took to the streets in Ljubljana: a big number in a country of only 2m.What will happen next? Three of Mr Jansa’s coalition partners have demanded that he step down. Yet the prime minister denies the allegations. His party blames an opposition conspiracy. He could cling on, despite protests and a general strike due on January 23rd. He could hand the job to somebody else. He may lose a no-confidence vote or he might call a new election. Or he may suggest a technocratic government. Mr Jankovic also insists he is “not a crook”, but his own support is melting away. That makes it unlikely that his party could help form a new coalition.