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POLITICAL ECONOMY
Swiss seek Spain's support in EU spat
by Staff Writers
Madrid (UPI) Oct 11, 2012

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Swiss Foreign Minister Didier Burkhalter this week sought support from Spain for his case in a dispute with the European Union over Bern's complex relationship with Brussels.

Burkhalter met in Madrid Tuesday with Spanish Foreign Affairs Minister Jose Manuel Garcia-Margallo to explain Swiss resistance to key EU demands as the two sides seek to overhaul their relations.

Burkhalter has been making the rounds of 14 EU member states in recent months pleading the case that the Swiss system of "direct democracy" -- in which laws are voted on directly by the people rather than through elected representatives -- would be undermined by Brussels' demands.

Burkhalter said he told Garcia-Margallo Tuesday his country's practice of "people's rights" constitutes one of its foundations and, as such, "must continue to exist," SwissInfo.ch reported.

Since Swiss residents voted against joining the European Economic Area in the early 1990s, Bern and Brussels have negotiated a complex series of bilateral treaties that have aligned a much of Swiss law with that of the European Union.

But the arrangement has proven cumbersome and both sides are seeking to streamline it, given that the European Union is Switzerland's largest trading partner.

The negotiations, however, have proven rocky and currently are at an impasse.

Brussels says the current system amounts to special treatment for Switzerland, allowing it almost complete access to the European Union's internal market without having to accept the jurisdiction of its rules and regulations.

The European Union is seeking to replace the bilateral accords with an overarching institutional framework under which all of the agreements would be automatically adjusted to conform with changes in the European "Community acquis," or the body of EU law.

But Switzerland says such a deal would violate the spirit of its direct democracy and thus its sovereignty.

"We cannot accept what is supranational," Burkhalter told Garcia-Margallo, the Swiss website said.

Bern in June made an effort to restart talks by proposing to create an "independent" Swiss regulatory body to supervise the bilateral agreements, using an existing agreement with the European Union on electricity as a test case.

Burkhalter told reporters in Madrid that offer is a "substantial" one because of the investments made by Swiss companies in solar and renewable energy -- a strong bilateral electricity deal with the European Union is needed to spur development in the sector, he said.

That idea, however, last month was met with a frosty reception from the European Commission, which issued a negative an analysis of the Swiss proposals.

The Swiss daily Le Temps reported the commission's analysis determined the proposal it didn't "constitute an adequate response to the EU's concerns" and cited the issue of the Community acquis as a continuing stumbling block.

The EU commissioners also criticized the idea of creating a Swiss regulatory body to supervise the bilateral agreements, saying it would amount to putting control for implementing European law into solely Swiss hands, the newspaper said.

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China set for 'aggressive' economic steps: World Bank
Tokyo (AFP) Oct 11, 2012 - China is likely to take "very aggressive" steps to kickstart its slowing economy after a once-in-a-decade leadership shuffle next month, the World Bank's newly installed chief said Thursday.

"In talking with the Chinese authorities, I'm completely convinced that they understand exactly the nature of the problem and they are taking every measure," to boost growth, said Jim Yong Kim.

"They are going through a political change right now, and once the political change is complete, my sense is that they'll be very aggressive in trying to restore growth," he added.

Kim, appointed head of the World Bank in July, made the comments in Tokyo at the annual meetings of the Bank and International Monetary Fund, which has cut its growth forecasts for China, the world's second-biggest economy.

China has suffered the knock-on effect of a severe debt crisis in Europe and a hobbled recovery in the United States, its two key export markets, which have led to a slump in trade and contraction in manufacturing activity.

Authorities have moved to spur the economy by slashing interest rates twice in quick succession this year and cutting the amount of funds that banks must keep in reserve three times since December in a bid to encourage lending.

On Tuesday, the Washington-based Fund said the stimulus had failed to deliver an expected boost, and it now expected Chinese growth of 7.8 percent this year and 8.2 percent in 2013.

That is down from a July estimate of 8.0 percent and 8.5 percent, respectively.

China's economy expanded by 7.6 percent in the second quarter of 2012, its worst performance in three years, and disappointing data since then has led to fears that third-quarter growth may have weakened further.

The country's political scene is gearing up for a major leadership change at the helm of the ruling Communist Party with Vice President Xi Jinping widely tipped to succeed President Hu Jintao as China's next leader.



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Tokyo (AFP) Oct 11, 2012
China will "lose out" by not sending its top two finance officials to global economic talks in Japan this week, the IMF's chief said Thursday, weighing into a bitter dispute between the Asian giants. Christine Lagarde called on Beijing and Tokyo - embroiled in a spat over a chain of islands in the East China Sea - to settle their row quickly, adding that "countries in this region are very ... read more


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