French minister Besson against "destabilizing Renault"

PARIS (Reuters) – French Industry Minister Eric Besson said on Sunday he did not want to destabilize carmaker Renault (RENA.PA) when asked if chief executive Carlos Ghosn should step down over a now debunked espionage scandal.
"As industry minister, I hear the voice of the people asking for punishment, but the industry minister's greater concern at this time is not to destabilize Renault any further," Besson told RFI radio in an interview.
He said Ghosn played a key role in Renault's alliance with Japanese carmaker Nissan (7201.T), and was also facing a major industrial challenge with the launch of electric cars.
Renault admitted this month it had wrongly dismissed three senior executives after it had been tricked into believing they had sold vital know-how on the electric car project to third parties, possibly involving China.
The three men were fired in January on suspicion of industrial espionage. All denied wrongdoing from the start and began legal action against the carmaker. A Renault security manager has been placed under investigation for suspected fraud.
Ghosn and right-hand man Patrick Pelata held onto their jobs after the climbdown, but despite giving up bonuses they have come under continued public pressure over the fiasco, whose impact rippled well beyond the world of automobile research.
The affair embarrassed France's government, which owns 15 percent of Renault, and caused a rift with China, weeks ahead of a key visit to the country by President Nicolas Sarkozy.
Beijing implicitly rebuked France over its handling of the matter on Thursday, saying it hoped that people checked facts before unjustly implicating the country.
Relations were strained when a French government source, speaking before the case collapsed, said investigators were following up a possible link with China.
Besson and Finance Minister Christine Lagarde issued a joint statement last week saying the government would ensure anyone responsible for the discredited espionage claims was dealt with.

Arkansas prepares for significant tax cuts

LITTLE ROCK, Ark. – Arkansas is poised to become one of the first states in the nation to enact a significant tax cut this year, showing the sentiment for scaling back government even in places where state spending is limited and no fiscal crisis exists.
State representatives Monday are expected to approve cutting the grocery tax, the centerpiece of a $35 million tax cut package. The action comes days after lawmakers reached an agreement with Democratic Gov. Mike Beebe on reductions of five other taxes likely to be approved later this week.
The amount of the cuts doesn't compare with the deep reductions proposed in some larger states, especially those with fiscal problems that are trying to attract new businesses. But it shows the far-reaching impact of the anti-spending backlash in the 2010 election that swept more Republicans into office across the nation. The cuts could be enacted so rapidly in Arkansas because the state's Democrats, including Gov. Mike Beebe and the majority that control both chambers of the Legislature, are conservative and differ little from Republican lawmakers on most fiscal issues.
"Arkansas is going to cut $35 million in taxes, have a balanced budget and adequately fund education," said Sen. Gilbert Baker, the Republican who co-chairs the Joint Budget Committee. "There isn't another state that wouldn't love to have that scenario right now."
Arkansas' government is already modest in scale; it doesn't offer the range of services provided by states such as Wisconsin and New Jersey, where heated battles over spending and employee compensation are under way. But officials decided to cut more anyway.
Beebe, a popular Democrat, handily won re-election last year after promising to continue reducing the state's grocery tax. Since he took office in 2007, he's successfully pushed for cutting the tax from 6 percent to 2 percent.
Although the state's residents are accustomed to lean services, Beebe said he is concerned the tax and spending restraints could go too far.
State officials estimate that they could face as much as an $80 million shortfall in the state's Medicaid trust fund in the fiscal year that begins July 1, 2012. Beebe asked federal officials for permission to overhaul the way Arkansas pays for services in Medicaid to address that danger.
"I'm not worried about this year," Beebe said in an interview last week. "I mean, we can make some adjustments on the balanced budget this year. I'm really worried about next year and the year after, because of Medicaid."
The tax cuts this year may mean that a proposed cost-of-living increase for state workers may be limited to lower-paid employees.
About one in five governors are proposing large tax cuts this year, and several are states with a budget shortfall, according to the Center on Budget and Policy Priorities. In many of these states, such as Florida and New Jersey, the tax relief is coupled with calls for cuts in education, health care and employee salaries.
Arkansas has escaped the fiscal problems plaguing many other states partly because of the state's budgeting system, which requires that spending priorities be linked directly to expected revenues.
Aside from the grocery tax cut, lawmakers are expected to approve cutting taxes for manufacturers' utilities, single parents and used car sales. They're also planning to institute an annual back-to-school sales tax "holiday" and expand a tourism-related tax exemption.
Beebe originally had proposed only cutting the grocery tax but acknowledged that in the current political climate, he couldn't hold that line.
"The way this stuff was running through here, it was necessary for me to accede to some additional tax cuts in order to keep (away) even more tax cuts that would exacerbate it or increase it even more than we can afford," Beebe said in the interview last week.

'One killed' as police fire on Syria protesters

DAMASCUS (AFP) – Syrian security forces fired on thousands of demonstrators Sunday in the town of Daraa, killing one and wounding around 100, two of them critically, a rights activist at the scene said.
Daraa, south of the capital Damascus, has turned into a "volcano", the witness told AFP by telephone.
"A protester was killed today by live bullets. His name is Raed Akrad," he said, adding that two others wounded in the head were in critical condition.
Earlier he reported that more than 100 people were wounded when security forces fired live bullets and tear gas at thousands of demonstrators who gathered in Daraa for a third consecutive day of protests.
"The army surrounds the town but it has not intervened," he said.
He said tensions were very high in Daraa and anger flared as a top-ranking government delegation arrived to pay condolences to families of demonstrators killed by security forces on Friday.
Rights groups have said that four protesters were killed on Friday while two of them were buried Saturday in Daraa.
Syrian authorities announced on Saturday the establishment of a commission of inquiry on the violence in Daraa.
The delegation included deputy foreign minister Faysal Meqdad, Local Administration Minister Tamer al-Hijjeh and senior security officer Rustom Ghazaleh, the activist said.
"The came to offer their condolences to the families of the protesters killed on Friday," the activist said, adding that protesters seethed with anger when they saw the officials.
"The protesters cried out: 'He who strikes his own people is a traitor,'" he added.
The protest began in the afternoon -- before the officials arrived -- with a march setting off from the Omari mosque, the witness added.
"The security forces backed by police fired live rounds at the demonstrators, numbering more than 10,000," the witness said.
"They are also firing tear gas mixed with toxic products," he claimed.
The latest casualties were being evacuated to the mosque, which has turned into a "field hospital," the activist said, declining to be named.
"There has been shooting in several parts of the city and there are clashes between protesters and security forces," backed by plain-clothes police, the witness said.
He also reported an unspecified number of arrests.
On Saturday security forces arrested dozens of protesters in Daraa, where thousands of people attended the funerals of Akram al-Jawabra and Hussam Abdelwali Ayash, two of the four protesters killed on Friday.
Sporadic demonstrations against President Bashar al-Assad's regime have taken place in Syria since last Tuesday after calls on Facebook demanding greater freedom in the country, which has been under emergency law since 1963.
As well as Daraa, they erupted on Friday in the capital Damascus, the coastal city of Banias and in Homs north of the capital.
Protesters have been mainly calling for the release of political prisoners and reforms at a time of popular uprisings across the Middle East.

4 Ways Your Home Can Pay You

Despite being financially stressed and worried about retirement, homeowners, by and large, continue to see their homes as a roof over their head and not a key financial asset that may improve their retirement prospects. According to research by the Society of Actuaries, only about 20 percent of homeowners plan to use their home equity to help finance retirement. Of those who do, few have thought about tapping their home's value and simply plan to sell it to generate retirement funds.
"Even for middle-income and moderately affluent Americans in their critical preretirement years (55-64), non-financial assets, principally home equity, may represent as much as 70 percent of total assets exclusive of pensions and Social Security," the report said. Tom Horgan, a Society of Actuaries spokesman and former chief actuary of the Federal Housing Administration, agrees with traditional advice that home equity should only be tapped when necessary, and when it helps achieve a specific retirement objective. In most cases, his best advice for homeowners approaching retirement is to sell their home and downsize into smaller, less-expensive living quarters that also may be closer to shopping and cultural activities. Renting an apartment also eliminates property taxes and most maintenance expenses.
[See 10 Ways Your Home Can Pay You Money.]
"Retirees are really not looking at home equity as an attractive option for helping to fund their retirement," says another Society of Actuaries spokesman, Steve Siegal. "I think people tend to look at their houses as an anchoring point, and are kind of reluctant to mess with that. There's an emotional attachment there." While echoing Horgan's emphasis on only accessing home equity after very careful thought, Siegal adds that the study found that people were "not exploring any of the options. The point is that people should explore options and find out what's right for them."
There were slightly more than 23 million U.S. households in 2009 headed by someone at least 65 years old, according to federal housing statistics. About 80 percent of these households owned their homes, and of these, 65 percent had no mortgage or other home debt. Even with sharp housing price declines, the median value of homes owned by older people was about $150,000--over $100,000 more than they paid for it.
The best home-finance solutions, experts agree, tend to be the ones that meet an individual's specific needs. The major variables in home equity use include age, health and healthcare expenses, marital and family situation, life expectancy, current and future income streams, family assets, and estate considerations. In short, just about all significant life decisions can come into play in deciding how to deal with your home as a possible retirement asset.
[See the 10 Best Places to Downsize in Retirement.]
There are four major types of decisions that involve your home and your future: borrowing against the value of your home, generating rental income from your home, taking full advantage of government tax breaks, and moving into a residence that cuts monthly housing expenses and is more aligned with reduced retirement income levels:
1. Loans. Home equity loans and mortgage refinancings are rarely advised for paying basic retirement expenses, but they may make sense for special needs or one-time projects. Usually, borrowers need a reliable income stream to satisfy lenders of their ability to repay the loan. In some cases your retirement income would be enough, but you'd need to satisfy lenders that you have enough left over after paying your living expenses to service and repay the loan. Reverse mortgages do not require repayment but usually only make sense for people who plan to stay in their homes for a long time and do not intend to sell them and use the proceeds for other retirement needs. If you have a mortgage and are sure you want to downsize to a smaller home in a few years, consider refinancing your mortgage into a five-year adjustable rate mortgage. You will save a lot of money on mortgage payments and can use those savings to pay down your home loan even further. Just make sure you can sell the home before the five-year reset deadline occurs.
[See Reverse Mortgages Face Another Makeover.]
2. Income. Consider renting out a room in your home to generate extra income. This may make special sense if you're still carrying a mortgage on the property. Most retirees bring home less money in retirement than when they worked, which can make carrying a mortgage very difficult. Rental income can help you pay off the mortgage and take a lot of pressure off of your retirement budget. You could even consider renting our your entire home for a visiting vacationer. It could pay for your own vacation, and tax specialist CCH says if you rent out your home fewer than 15 days a year, you don't even have to include the money you receive as gross income on your tax return.
3. Taxes. The mortgage tax break may be reduced or even disappear as Congress wrestles with reforming the tax code and reducing budget deficits. But for now, it's the largest single tax break that individuals receive. Interest on home equity loans is usually deductible. There may also be energy credits and other tax breaks that make sense.
4. Moving. Downsizing can be the smartest way to let your home--or in this case, your new home--pay you money. Reduced living expenses, smaller utility bills, and even lower commuting costs should be on your mind as you consider how you will balance the household budget during your retirement years. Moving closer to key shopping and cultural activities can not only save you money, but also make increasing sense as you age and your time behind the wheel of a car grows shorter. Think carefully about whether you want to rent or buy your new home. And don't forget that gains on the sale of your current home--up to $500,000 in gains for a couple--are tax-free.

Toys R Us cancels $1.1 billion loan deal: report

NEW YORK (Reuters) – Privately held toy retailer Toys R Us (TOY.UL) has canceled a $1.1 billion loan deal that was intended to refinance its debt and reduce borrowing costs, Bloomberg reported on Monday.
Citing five people familiar with the matter, Bloomberg reported the cancellation but did not say why. Spokespeople for Toys R Us were not immediately available to comment.
The company has filed with regulators for an $800 million initial public offering; the relationship of the debt refinancing to the offering was not immediately clear.
Reuters Loan Pricing Corp reported last week that commitments had been due today on the deal.
(Reporting by Ben Berkowitz; Editing by Steve Orlofsky)

After lean times, Greek tourism eyes rebound

ATHENS (AFP) – After two lean seasons and a year marred by austerity protests, Greek tourism operators expect a rebound in 2011 with the global economy in recovery and unrest in North Africa turning demand elsewhere.
And although visitors avoiding Egypt and Tunisia may not necessarily flock to Greece -- which has troubles of its own from an unpopular economic overhaul -- the extra demand is enough for the entire region, industry representatives said.
"As an all-year destination, Spain is most likely to gain Egypt's market, followed by Turkey," says Yiannis Papadakis, deputy chairman of the Hellenic association of travel and tourist agencies (Hatta).
"But we also stand to benefit as there will be a lack of availability. Turkey is already between 80 and 85 percent booked and will be fully booked in about two months," he told AFP.
Early booking data from key European target markets -- Germany, Britain, France and Russia -- look promising and family travel is shying away from former favourite destinations in North Africa and the Middle East that have been hit with political turmoil.
"Bookings from Germany are up eight percent, Britain 12 percent and Russia by over 20 percent while France is also seeing a two-digit rise," says Andreas Andreadis, head of the Panhellenic confederation of hoteliers (POX).
"They were already rising from January before events in North Africa unfolded as these (European) countries have positive growth rates," he added.
"It's a normal rebound. This time last year we were a world news story. Now we no longer feature in negative headlines," Andreadis said.
Official data in January showed that foreign arrivals in Greece in the first nine months of 2010 had risen by 1.5 percent despite the country's economic woes and waves of frequently violent protests in Athens and Thessaloniki.
In May, three people died in an Athens bank that was firebombed during a protest.
"Events in May were disastrous, bookings for the entire month were frozen," Andreadis said.
"We still have two critical months ahead of us, so it's still too early to say how the season will play out."
Unions have already held a general strike this year against sweeping wage and pension cuts mandated by the EU and the International Monetary Fund after they rescued Greece from imminent bankruptcy with a 110-billion-euro ($154-billion) loan. Another seven national shutdowns were organised last year.
Some of last year's demonstrations against measures by the Socialist government to deal with an unprecedented debt crisis specifically targeted tourism-related infrastructure including hotels, the main port of Piraeus and the Acropolis, Greece's most emblematic monument.
At the time, the government offered to compensate travellers stranded in the country after the strikes and protests threatened to sink the season.
Residents of the popular island of Rhodes even took matters into their own hands, banning striking sailors from their harbour and dispatching flower-toting delegations to welcome incoming cruise ship passengers.
Price cuts by operators limited the damage but caused a revenue blow.
The Bank of Greece has said tourism takings were down by 7.3 percent to 9.45 billion euros ($13.2 billion) in the period to November.
To boost flight traffic, the government this week waived fees at all state airports except Athens International Airport from April 1 to December 31.
Tourism generates about 18 percent of Greece's gross domestic product.
Hatta's Papadakis said operators had been lowering their prices at the last minute for the last two years in order to elicit demand.
Hoteliers in particular saw their takings go down by 13 percent in 2009 and a by another 7 percent in 2010, Andreadis added.
"A room priced at 50 euros would be reduced to 30 euros," Papadakis said. "That's not going to happen this year".

Foolish FAQ: The Fukushima Nuclear Crisis

Japan continues to deal with an incredible tragedy right now. The earthquake on March 11 triggered a tsunami that hit the country's east coast, killing thousands and decimating the landscape. We mourn the losses and pray for the survivors and relief workers.
In the U.S., our attention has now shifted toward the nuclear power generation plants at Fukushima Daiichi, heavily damaged by the quake and tsunami, as operators work tirelessly to fend off nuclear disaster.
The struggles at Fukushima have brought many companies into the spotlight, including reactor designer General Electric (NYSE: GE - News) and Exelon (NYSE: EXC - News), the largest nuclear power plant operator in the United States. We've also seen a renewed focus on alternative energy sources from solar power companies such as First Solar, Trina Solar, and Suntech Power and wind energy companies like Broadwind Energy. While we need healthy debate about energy policies in the future, we have the opportunity to learn more about nuclear power today.
To get the scoop, I interviewed my father, Butch Meier, who's had decades of experience working with nuclear energy. The views he will express are his own, but based on his experience, he's got plenty of interesting things to say. We'll learn more about the situation at Fukushima, what the workers are trying to prevent, and how you can help. So let's get right to it.
David Meier: I may know about your background, but readers don't. What's your experience with nuclear energy?
Butch Meier: I studied reactor theory and design at the United States Naval Academy and in graduate school on an Atomic Energy Commission Fellowship at the University of Arizona. I served in U.S. Navy nuclear submarines for 29 years. Since 1998, I have done consulting work in related fields.
David: Why is cooling water so important for the situation at Fukushima right now?
Butch: Keeping things cool is vital.
Here's the problem the Japanese are trying to overcome: The earthquake, followed by the tsunami, absolutely wiped out their infrastructure, causing the cooling pumps to lose power. They have also experienced fires in the pumps providing cooling water to the spent fuel pools. Without a flow of cooling water, the water in the core or spent fuel pool eventually boils. With no water to remove the decay heat, the temperature of the fuel rises, causing the pressure to increase. In the limit, it can increase to the point that the fuel cell ruptures, which would release radioactive fission products. Chernobyl is the only example where this has happened.
(Editor's note: Tokyo Electric Power is working hard to restore dedicated power to the reactors in order to get the cooling systems working.)
David: Are the reactors running right now?
Butch: No. The reactors are shut down, and there is no worry about them restarting. The issue centers on the fission products in the shutdown reactors -- atoms that are produced when uranium atoms split in the fission process.
David: Speaking of uranium, the fuel used in a nuclear reactor, what goes on inside to create heat and radioactive byproducts?
Butch: When a uranium atom fissions, or splits, it releases energy as it splits into two other midweight atoms. ... These unstable radioactive atoms decay as they seek a stable state, emitting radiation in the process. Fissions still occur when the reactors are shut down -- just not at the rate when the reactor is "critical" or producing power. The shutdown fission rate is 8-10 or more orders of magnitude lower than during reactor operation.
Two types of radiation -- gamma rays (think of X-rays) and neutrons -- emitted from these decay products generate heat by mechanical interaction. Some of the neutrons are absorbed in the uranium fuel, causing more fission and more heat. So while the shutdown reactor doesn't require anywhere near the cooling needed when it is operating, it still requires cooling. Even the spent fuel removed from the reactors still generates heat. Water is the most prevalent coolant.
You may have heard that boric acid or borated water is being pumped into the cores. (Editor's note: South Korea has agreed to send some of its boron reserve to Japan.) Boron has a tremendous affinity for neutrons. It prefers to absorb them rather than the fuel, reducing the heat generated.
David: There have been reports of explosions at the plant. How do you think those happened?
Butch: Steam pressure from boiling water in the uncooled core has to be vented, or it could rupture the core vessel and the containment around the core vessel. (Editor's note: For a reactor diagram, see "Inside the Reactors" here.) Hydrogen is also produced in the core. The gas is vented into the containment building around the two inner containments. The vented gas also contains some radioactivity. The explosions that have occurred involve this hydrogen-steam mixture buildup, coupled with the loss of power and the ability to ventilate the containment building.
David: News headlines flash that radiation levels are high or rising. That doesn't tell the whole story. Break down the types of radiation -- how it can interact with humans or the environment, and how can people protect themselves against radiation?
Butch: Radiation is a challenging subject to discuss meaningfully. You can't see it, feel it, or taste it. We are not familiar with units, which are millisieverts, unlike a gallon of milk or the yards on a football field. But the effects of the various types of radiation and doses/dose rates -- the intensity and accumulation of radiation -- are well understood and documented. (Editor's note: This CNN blog entry does a nice job of putting things in perspective.)
There are four types of radiation. Gamma and neutron radiation, discussed above, can penetrate the body and cause long-term health problems under chronic exposure. Exposure to extremely concentrated doses could be immediately fatal. From what I have read, Fukushima is nowhere near exposures that are harmful.
Two others -- alpha and beta -- don't penetrate, and are only a problem if you ingest them or absorb them. You mitigate the gamma and neutron radiation by time, distance, and shielding. You mitigate alpha and beta radiation by staying inside or using filters or masks. The contaminations you see and hear about on TV are predominantly alpha and beta. (Editor's note: Japanese officials have been ordering people to stay inside and pictures show relief working with masks covering their noses and mouths.)
The release of the fission products in the cores and spent fuel pose the radiation hazard due to large amounts of long-lived penetrating radioactivity. Two fission product isotopes, cesium and strontium, are readily taken up by the body (bones, marrow), plants, food supply, etc. While they are not the most abundant fission products, they are long-lived and are a significant hazard.
Another fission product of concern is iodine, which concentrates in the thyroid. The potassium iodide tablets the government passed out are designed to flood the thyroid so it can't take up any more, thus blocking any released radioactive iodine. Note that the government has just made the tablets available they haven't told the people to take them, because they do not presently anticipate fission products released. If they do direct the people to take them, the problem is getting worse.
David: Let's go back to the beginning. On March 11, there was an earthquake measuring 8.9 on the Richter scale off the northeast coast of Japan. This caused a tsunami to hit the east coast, causing massive damage to homes, land, and infrastructure, including loss of power, reduced communication, and damage to the Fukushima nuclear plant. How well are Japanese officials and workers handling the situation?
Butch: Some perspective will help. The 1906 San Francisco earthquake is estimated as an 8 on the Richter scale -- it flattened the city. The 8.9 quake is one of the three or four most powerful ever. For perspective, the energy released in the Japan earthquake is about 30 times that released in San Francisco. Japanese officials have an almost impossible task, but they are doing well in my opinion.
David: The troubles at Fukushima conjure images of Three Mile Island for many, Chernobyl for others, and perhaps even Hiroshima and Nagasaki for some. Should operators lose control of the recovery effort in the plant, what would you be most worried about?
Butch: The release of the fission products in the cores and spent fuel -- no question.
David: We shouldn't take the possibility of a nuclear disaster lightly -- and no one is. What do you think is missing from the disaster in Japan?
Butch: Essentially the same thing that was missing in the Three Mile Island accident -- useful practical public education of the basics of nuclear power, including the risks, and media reporting that uses the context of technical facts. Our news media is quite driven by hysteria and sensationalism rather than facts and information -- that is not useful.
How you can helpThe tragedy in Japan gives us a great opportunity to learn. I hope that you leave this interview with more knowledge about the challenges at Fukushima.
There's also a chance to improve the lives of the survivors over in Japan by donating to the relief efforts. Please consider making a contribution. The story of the struggle at Fukushima has pushed the needs of the tsunami victims off of the front page, but you can read "Donating to Japan" to learn more about how to make a contribution.