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Europe governments scramble to protect deposits

2008-10-06T06:01:01Z

By PAN PYLAS, AP Business Writer1 hour, 22 minutes ago

European governments struggled to find a coordinated approach to the crisis sweeping financial markets, as Denmark became the latest country to guarantee bank deposits, putting more pressure on Britain and other countries to follow.

Denmark's move came after a startling announcement by German Chancellor Angela Merkel on Sunday that her government would guarantee all private bank deposits held in the euro zone's single largest economy. "We want to tell people that their savings are safe," she said.

A sense of disarray has mounted amid government bailouts of several major banks in the past week and a worsening of the outlook for the wider economy. The Bank of England is expected by many to cut interest rates by at least a quarter point at its Thursday meeting, and European Central Bank President Jean-Claude Trichet gave a decidedly downbeat outlook on the countries using the euro at the bank's meeting last week.

Austrian officials suggested they might join in guaranteeing deposits as well, and analysts said a failure by other authorities to offer a similar guarantee could risk a massive funds outflow from their countries' coffers, while the guarantees themselves raised questions about their potential impact on government finances.

"Although the move to provide such guarantees is undoubtedly better than the highly destabilizing alternative, this will raise questions about how these guarantees would be funded were they to be called upon," said Simon Derrick, an analyst at Bank of New York Mellon.

The markets are keeping a close eye on signs that Europe's banking system is under pressure and the unraveling of a weekend pledge from the leaders of the four largest EU economies — France, Britain, Germany and Italy — in Paris that they would work in a coordinated manner to ensure the stability of the financial system.

European Union finance ministers were set to begin two days of talks on the crisis in Luxembourg.

"This is a very serious situation and one that needs to be addressed," said EU spokesman Johannes Laitenberger.

"Obviously there is a great effort under way. Nobody is suggesting that this is business as usual, but it's true that there is not one single magic bullet that will solve this."

British Prime Minister Gordon Brown planned a call to Merkel to discuss the crisis, and Britain's Treasury chief Alistair Darling was due to make a statement to Parliament later.

The weekend commitment to work together was blown apart Sunday when Germany's Chancellor Angela Merkel announced that all 568 billion euros ($786 billion) worth of private deposits held in Germany will be guaranteed alongside a new 50 billion euros ($69 billion) bailout package for Hypo Real Estate AG, Germany's second-biggest mortgage lender.

In response, the Danish Economy Ministry said commercial lenders had agreed to contribute up to 35 billion kroner, or about $6.4 billion, over two years to a fund that will help insure account holders from losses.

Meanwhile, Iceland halted trading in six bank stocks while the government drafted a crisis plan. Icelandic banks' assets dwarfs the rest of its economy and its currency has fallen sharply in the past week.

Markets responded to the disarray by sinking rapidly, following selloffs in Asia. Russia shut down both its stock markets after they fell more than 15 percent.

"The EU is liable to be exposed as a fair weather construction, lacking the means of swift response and the hold over its citizens' loyalties to survive really adverse conditions," said Stephen Lewis, an analyst at Monument Securities.

Germany's DAX was down 324.66 points, or 5.6 percent, at 5,472.32, while France's CAC-40 was 244.69 points, or 6.0 percent, lower at 3,836.06. The FTSE 100 index of leading British shares was faring slightly better, down 165.09 points, or 3.4 percent, at 4,705.25.

Meanwhile, the euro slid below the $1.36 mark for the first time in over a year.

Original story may be found by clicking here

Bank on this: Bank failures will rise in next year

2008-10-06T05:58:32Z

By MICHAEL LIEDTKE, AP Business WriterSun Oct 5, 10:35 PM ET

Here's a safe bet for uncertain times: A lot of banks won't survive the next year of upheaval despite the U.S. government's $700 billion plan to restore order to the financial industry.

The biggest question is how many will perish and how they will be put out of their misery — in outright closures by regulators scrambling to preserve the dwindling deposit insurance fund or in fire sales made under government pressure.

Enfeebled by huge losses on risky home loans, the banking industry is now on the shakiest ground since the early 1990s, when more than 800 federally insured institutions failed in a three-year period. That was during the clean-up phase of a decade-long savings-and-loan meltdown that wound up costing U.S. taxpayers $170 billion to $205 billion, after adjusting for inflation.

The government's commitment to spend up to $700 billion buying bad debts from ailing banks is likely to save some institutions that would have otherwise died, but analysts doubt it will be enough to avert a major shakeout.

"It will help, but it's not going to be the saving grace" because a lot of banks are holding construction loans and other types of deteriorating assets that the government won't take off their books, predicted Stanford Financial analyst Jaret Seiberg. He expects more than 100 banks nationwide to fail next year.

The darkening clouds already have some depositors pondering a question that always seems to crop up in financial panics despite deposit insurance: Could it possibly make more sense to stash cash in a mattress than in a bank account?

"It sounds like a joke," said business owner Mauricoa Quintero as he recently paused outside a Wachovia Bank branch in Miami. "But it sounds safer than the turmoil out there right now."

Not as many banks are likely to fail as in the S&L crisis, largely because there are about 8,000 fewer today than there were in 1988.

But that doesn't necessarily mean the problems won't be as costly or as unnerving; banks are much larger than they were 20 years ago, thanks to laws passed in the 1990s.

"I don't see why things will be that much different this time," said Joseph Mason, an economist who worked for the U.S. Treasury Department in the 1990s and is now a finance professor at Louisiana State University. "We just had a big party where people and businesses overborrowed. We had a bubble and now we want to get back to normal. Is it going to be painless? No."

With more super-sized banks in business, fewer failures could still dump a big bill on the Federal Deposit Insurance Corp., the government agency that insures bank and S&L deposits. The FDIC's potential liability is rising under a provision of the bailout that increases the deposit insurance limit to $250,000 per account, up from $100,000.

Using statistics from the S&L crisis as a guide, Mason estimates total deposits in banks that fail during the current crisis at $1.1 trillion. After calculating gains from selling deposits and some of the assets of the failed banks, Mason estimates the clean-up this time will cost the FDIC $140 billion to $200 billion.

The FDIC's fund currently has about $45 billion — a five-year low — but the agency can make up for any shortfalls by borrowing from the U.S. Treasury and eventually repaying the money by raising the premiums that it charges the remaining banks and S&Ls.

Through the first nine months of the year, 13 banks and S&Ls have been taken over by the FDIC — more than the previous five years combined.

The FDIC may be underestimating, or at least not publicly acknowledging, the trouble ahead. As of June 30, the FDIC had 117 insured banks and S&Ls on its problem list. That represented about 1 percent of the nearly 8,500 institutions insured as of June 30. Entering 1991, about 10 percent of the industry — 1,496 institutions — was on the FDIC's endangered list.

Although the FDIC doesn't name the institutions it classifies as problems, this year's June 30 list didn't include two huge headaches — Washington Mutual Bank and Wachovia. Combined, WaMu and Wachovia had more than $1 trillion in assets; the assets of the 117 institutions on the FDIC's watch list totaled $78 billion.

Late last month, WaMu became the largest bank failure in U.S. history, with $307 billion in assets, nearly five times more, on an inflation-adjusted basis, than the previous record collapse of Continental Illinois National Bank in 1984. The FDIC doesn't expect WaMu's demise to cost its fund anything because JP Morgan Chase & Co. agreed to buy the bank's deposits and most of the assets for $1.9 billion.

Regulators dodged another potential bullet by helping to negotiate the sale of Wachovia's banking operations to Citigroup Inc. in a complex deal that could still end up costing the FDIC, depending on the severity of future loan losses. On Friday, a battle of banking giants erupted when Wachovia struck a new deal with Wells Fargo & Co. without government help, and Citigroup demanded that it be called off.

The banking outlook looks even gloomier through the prism of Bauer Financial Inc., which has been relying on data filed with the FDIC to assess the health of federally insured institutions for the past 25 years.

Based on its analysis of the June 30 numbers, Bauer Financial concluded that 426 federally insured institutions are grappling with major problems — about 5 percent of all banks and S&Ls.

About 15 percent of the banks on Bauer's cautionary list have more than $1 billion in assets. Not surprisingly, the troubles are concentrated among banks that were the most active in markets where free-flowing mortgages contributed to the rapid run-up in home prices that set the stage for the jarring comedown. By Bauer's reckoning, the largest numbers of troubled banks are in California, Florida, Georgia, Illinois and Minnesota.

"It's important for people to remember that not all these banks are going to fail, just because they are on this list," said Karen Dorway, Bauer Financial's president. "Many of them will recover."

James Barth, who was chief economist of the regulatory agency that oversaw the S&L industry in the 1980s, doubts things will get as bad as they did then.

"It's scary right now, but it's not as scary as a lot of people are making it out to be," said Barth, now a senior fellow at the Milken Institute, a think tank.

Mani Behimehr, a home designer living in Tustin, Calif., isn't feeling reassured after what happened to WaMu and Wachovia. After he heard the news that WaMu had been seized and sold to JP Morgan, he rushed out to withdraw about $150,000 in savings and opened a new account at Wachovia only to learn about its sale to Citigroup two days later.

"I thought this is the strongest economy in the world; nothing like that happens in this country," said Behimehr, 46, who is originally from Iran.

The tumult is creating expansion opportunities for healthy banks. Industry heavyweights like JP Morgan, Citigroup and Bank of America Corp. have already rolled the dice on major acquisitions of financially battered institutions in hopes of becoming more powerful than ever.

Smaller players like Clifton Savings Bank in New Jersey are bragging about their relatively clean balance sheets to lure depositors away from rivals that are wrestling with huge loan losses. The bank, with about $900 million in total assets, says just one of its 2,300 home loans is in foreclosure.

"There is going to be a flight to quality," predicted John Celentano Jr., Clifton Savings' chief executive. "People are going to start putting their money in places that were being run the way things are supposed to be run: the old-fashioned way."

Original story may be found: http://news.yahoo.com/s/ap/shaky_banks;_ylt=As67UBGlOnXlAol.Di5nwFtv24cA

World markets fall as US bailout seen taking time

2008-09-29T03:38:52Z

By TOMOKO A. HOSAKA

World stock markets tumbled Monday as investors reacted coolly to Washington's $700 billion bank bailout deal, recognizing that cleaning up the bad debt mess will take a long time and likely drag on global economic growth for the foreseeable future.

Anxiety about spreading fallout from the U.S. financial meltdown grew on news that Belgium, the Netherlands and Luxembourg pledged more than 11 billion euros ($16 billion) to Dutch-Belgian bank and insurance giant Fortis NV to keep it from insolvency.

As trading opened in Europe, Britain's FTSE 100 sank 2.2 percent, France's CAC-40 and Germany's DAX both fell 2.6 percent.

"There's an increasing realization that the cleanup and the mending of all that's gone wrong is going to take an extended period to work through, and we're going to see an extended recovery period," said Jamie Spiteri, senior dealer at Shaw Stockbroking in Sydney.

Hong Kong's Hang Seng Index plunged 4.31 percent to 17,876.41, and Tokyo's benchmark Nikkei lost 1.3 percent to close at 11,743.61. Key indices in India, Thailand, South Korea and Australia also fell.

"They're worried that another fire is starting in Europe," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong, referring to the Fortis news.

After days of intense talks, the White House and Congressional leaders agreed Sunday to a $700 billion public bailout of the ailing financial industry after lawmakers insisted on sharing spending controls with the administration of President George W. Bush.

The biggest U.S. bailout in history, which goes to the House for a vote Monday and to the Senate later in the week, would give the administration broad power to use taxpayers' money to purchase billions of home mortgage-related assets held by cash-starved financial firms.

But even if the plan helps stabilize credit markets, the outlook for the U.S. economy remains grim, with unemployment at a five-year high of 6.1 percent and expected to climb higher. That's likely going to weaken demand for exports from Asia and Europe.

Furthermore, there are plenty of banks still in trouble, and it may take time before the bailout plan helps them.

Takahiko Murai, equities general manager at Nozomi Securities in Tokyo, said investors are questioning the effectiveness and details of the plan, including the government's ultimate purchasing price of the bad assets.

"If it passes as expected, the focus will begin to shift to the real economy," Murai said.

U.S. stock index futures fell, suggesting Wall Street would open lower Monday morning. Dow Jones industrial average futures were down 171 points to 10,976, while Standard & Poor's 500 index futures were down 20.8 points to 1,193.

Asian marine transport names posted big declines after a key shipping index plunged 10 percent Friday amid slowing global trade and a recent drop-off in iron ore demand in China. The Baltic Dry Index, which measures drybulk shipping rates on 40 routes across the world, fell 417 points to close at 3,746 — marking one of its biggest one-day declines.

Japan's Mitsui O.S.K. Lines Ltd., the world's largest cargo shipper, slumped 6.03 percent, and Nippon Yusen K.K. shed 6.58 percent. Major shipper Cosco Pacific Ltd. fell 6.0 percent in Hong Kong.

Hong Kong property issues took a hard hit after HSBC said it was raising mortgage rates by 50 basis points. Hang Lung Properties Ltd. retreated 4.5 percent, and Sung Hung Kai Properties Ltd. was off 5.1 percent.

In currencies, the dollar strengthened to 106.28 yen Monday afternoon in Asia from 105.95 yen late Friday. The greenback also rose against the euro, which bought $1.4392.

Exchanges in mainland China were closed for a national holiday, and Taiwan markets were shut due to a typhoon.

Original story may be found: http://news.yahoo.com/s/ap/20080929/ap_on_bi_ge/world_markets

Main Street turns against Wall Street

2008-09-28T17:56:30Z

A populist backlash is changing America's political climate. Inflamed by the financial crisis and bailouts, a form of class warfare could haunt business leaders for years to come.

By Nina Easton, Washington bureau chief

Last Updated: September 28, 2008: 11:03 AM ET

NEW YORK (Fortune) -- In one frenzied month Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke remade Wall Street. Along the way they may also have recast American politics. A month of historic government interventions shows signs of triggering a political version of climate change - unleashing a new era of class fury that could hurt U.S. companies, business leaders, and wealthy investors for years.

"A potential calamity," predicts Democratic pollster Doug Schoen. "If the reactions we're seeing hold, we could have real spasmodic anger directed at businesses and corporations." And the timing will have consequences, says financier and onetime GOP presidential candidate Mitt Romney: "Unfortunately, politicians have seized on the politics of envy," he told Fortune, "and they are stoking it this election year like I've never seen in my lifetime."

Compared to this, Enron was a warm-up exercise. For all the public outrage over accounting scandals seven years ago, the result in Washington was limited to a financial reporting rule that most Americans have never heard of (though many in the business community still consider Sarbanes-Oxley a destructive overreaction).

By contrast, the implosion of Wall Street, followed by Paulson's escalating series of multibillion-dollar rescues, has fired up populist sentiments that were already building in American politics, promising to reshape legislative battles over everything from tax and trade policies to federal regulation. Union leaders like the AFL-CIO's John Sweeney suddenly sound as if they're in the mainstream of public opinion with statements like this: "One thing is certain. No one - no politician, no investment banker, no television commentator, no economist - should be able to say again with a straight face that here in the United States we just let markets do whatever markets do and everything works out for the best."

Washington hath no fury like Middle America scorned - and there's reason to think it will only get uglier. The government's massive new financial commitments will severely tie the next President's hands in addressing middle-class concerns.

"The next President will have to temper expectations a lot," says Middlebury College economist David Colander, "far beyond what either of the candidates has been willing to talk about."

If that means Republican John McCain gives up on letting the upper middle class keep the Bush tax cuts, it also means that Democrats will have to stop promising ambitious spending programs. Barack Obama rightly says it would be "irresponsible" not to review his spending menu - which includes making health care universal - in light of this new fiscal reality. As for problems like Medicare and Social Security? They'll have to wait.

***

On the cool fall morning that Paulson, Bernanke, and Vice President Dick Cheney first trekked to Capitol Hill to persuade a skeptical Congress to pass an unprecedented $700 billion federal buyout of troubled bank debt, White House spokesman Tony Fratto tried valiantly to get his message out to reporters: "This is a rescue plan for the American economy," he insisted.

Despite the dire warnings of financial calamity from the White House and a few high-profile business leaders, much of Middle America wasn't buying the story that their own livelihoods were linked to the fate of the rescue package. Instead, average workers read the plan as the "big guys bailing out their friends," says former House Speaker Newt Gingrich, who commissioned a bipartisan survey on the subject. Gingrich's poll - conducted by Schoen and Republican Kellyanne Conway - found that a majority of Americans don't want Congress to use taxpayer dollars to bail out financial institutions, even if their collapse means a rocky ride for investors in the stock market.

The White House was knocked off-balance by potent blowback over the plan - not from the expected (read: liberal) quarters but from shopping-mall America. Morning talk-show hosts like Regis and Kelly shook their heads in disgust. Constituents in rural southern Illinois - a Republican district - phoned in their opposition to Congressman John Shimkus in a ratio of 200 to 1.

While Senators grilled Paulson and Bernanke on one side of the Capitol, House members on the other side were offering colorful translations of their constituent views, calling the plan "socialist" and accusing Paulson of handing over "the keys to the liquor cabinet," as Democratic Texan Lloyd Doggett put it. Within three days more than 2,000 people had logged their mostly angry opinions on CNNMoney.com.

During the unveiling of the plan, Paulson and Bernanke had exuded confidence that everyone would understand the urgency and that Congress would approve it quickly. "If it does not pass now," Paulson intoned, "then heaven help us all." They banked on public fear of a financial crash; instead, they ran into a fear from lawmakers who had to face down the folks back home angry at having to bail out Wall Street's masters of the universe.

Capitol Hill brimmed with calls for limits on pay for any executive who wanted taxpayer help. Warren Buffett, with his $5 billion bet on Goldman Sachs (GS, Fortune 500), emerged as an example of what the government could do for taxpayers if it drove a harder bargain with the banks to collect a piece of the upside. Bush's team was already facing criticism for playing the fear card, but to get his package through, the President had to take to the airwaves to make concessions and warn his nation of doubters. "We are in the midst of a serious financial crisis. Our entire economy is in danger."

Original story may be viewed at: http://money.cnn.com/2008/09/26/news/economy/easton_backlash.fortune/index.htm?postversion=2008092810

Meltdown in US finance system pummels stock market

2008-09-15T14:36:47Z

By PATRICK RIZZO and JOE BEL BRUNO, AP Business Writers 14 minutes ago

The upheaval in the American financial system sent shock waves through the stock market Monday, producing the worst day on Wall Street in seven years as investors digested the failure of one of its most venerable banks and wondered which domino would be next to fall.

The Dow Jones industrial average lost more than 500 points, more than 4 percent, its steepest point drop since the day the stock market reopened after the Sept. 11, 2001, attacks. About $700 billion evaporated from retirement plans, government pension funds and other investment portfolios.

The carnage capped a tumultuous 24 hours that redrew U.S. finance. Lehman Brothers, an investment bank that predates the Civil War and weathered the Great Depression, filed the largest bankruptcy in American history. A second storied bank, Merrill Lynch, fled into the arms of Bank of America.

It was by far the most stomach-churning single day since a financial crisis began to bubble up from billions of dollars in rotten mortgage loans that have crippled the balance sheets of one bank after another and landed mortgage giants Fannie Mae and Freddie Mac under the control of the federal government.

"We are in the middle of a deep, dark recession, and it won't end soon. Here it is, and it is pretty nasty," said Barry Ritholtz, who writes the popular financial blog The Big Picture and is CEO of research firm FusionIQ.

And the fallout was far from over. American Insurance Group, the world's largest insurer, was fighting for its very survival: New York Gov. David Paterson moved to allow the company to tap one of its subsidiaries for an emergency loan to stay above water.

"AIG still remains financially sound," Paterson said, even as the company's stock tumbled almost 60 percent. Almost $20 billion was was wiped off AIG's balance sheet on Monday.

In Washington, Treasury Secretary Henry Paulson, who refused to toss a financial lifeline to Lehman, was unapologetic as the Bush administration signaled strongly that Wall Street shouldn't expect more rescues from Washington.

The American people should remain confident in the "soundness and resilience in the American financial system," Paulson told reporters at the White House.

Six months ago, Paulson moved to prevent the collapse of Bear Stearns, brokering a deal for JP Morgan Chase & Co. to buy the firm at a fire-sale price with Federal Reserve backing. Earlier this month, he stepped in to help the government seize Fannie and Freddie in hopes of reversing the housing and credit crises.

But Monday, Paulson said he "never once" considered it appropriate to put taxpayer money at risk to resolve the problems at Lehman Brothers, which was saddled with $60 billion worth of soured real estate holdings.

The result was one of the most momentous days in Wall Street history since legendary banker J. Pierpont Morgan helped broker the rescue of financial markets during the Panic of 1907.

The Dow industrials dropped 504.48 points to close at 10,917.51, the first time since July they have finished under 11,000. It was the sixth-largest point drop ever and the worst since Sept. 17, 2001, when the average fell 684.81 points on the first day of trading after the terror attacks.

In percentage terms, the fall for the Dow on Monday was its worst since the summer of 2002. The index has shed nearly a quarter of its value since its record high last October.

Broader stock indicators also fell. The Standard & Poor's 500 index lost more than 4 1/2 percent, and the Nasdaq composite index lost more than 3 1/2 percent.

Financial stocks fell as investors worried about the strength of banks' balance sheets. Washington Mutual Inc. 27 percent to $2 a share, while Wachovia Corp. fell 25 percent to $10.71.

While Lehman Brothers was filing for Chapter 11 and AIG was scurrying to find financing to stay afloat, Merrill Lynch was avoiding a similar fate with a $50 billion transaction to become part of Bank of America Corp.

The deal would create a financial giant rivaling Citigroup Inc., the biggest U.S. bank in terms of assets. Bank of America has the most deposits of any U.S. bank, while Merrill Lynch is the world's largest and most widely recognized brokerage.

"It was an opportunity of a lifetime," said Ken Lewis, Bank of America's chairman and CEO.

Lewis made the announcement at a news conference where he was flanked by a smiling John Thain, Merrill's chief executive. The two put the deal together in 48 hours, while they were taking part in marathon discussions at the New York Federal Reserve over the weekend to save Lehman Brothers. Merrill stock rose a penny Monday.

One huge concern is that the Lehman bankruptcy will probably trigger even tighter credit — making it more difficult for everyone from large companies to small businesses to American homebuyers to borrow money.

It was a dark day for Lehman workers, too. Many of them brought gym bags, shopping totes and Lehman travel bags to cart home personal files and pictures from their desks at the company's midtown Manhattan headquarters. Gawkers lined up behind metal barricades, and bystanders took pictures with their cell phones.

The failure of Lehman and probable job losses at Merrill are also a blow to the New York City economy, which is still trying to absorb a blow from shrunken tax revenues after the collapse of Bear Stearns in March. The city and its outlying suburbs rely heavily on taxes paid by workers in the financial services industry.

In marathon sessions Friday night, Saturday and Sunday, government officials and the chief executives of major U.S. and foreign banks huddled at the New York Fed's fortress-like building in downtown Manhattan, trying to work out a way to save Lehman.

They failed at that. But a group of 10 banks that includes JPMorgan, Goldman Sachs and Citigroup formed a $70 billion pool that banks or brokerages can tap to cover short-term funding needs.

There were also worries that Lehman's problems would infect other financial companies and spread to global stock markets, further harming the U.S. and global economies.

The Fed meets Tuesday to decide interest rate policy. It's widely expected to keep rates at 2 percent, but some economists believe it could lower them to soothe Wall Street's frazzled nerves.

The financial turbulence could also further derail consumer confidence in the economy just as stores prepare for the critical holiday shopping season. The upheaval in the financial system also means that those consumers with marginal credit history will have an even harder time getting loans, cutting into consumer spending.

"The backdrop even without this was tough. This certainly adds to the worry level," said Michael P. Niemira, chief economist at The International Council of Shopping Centers.

Republican presidential nominee Sen. John McCain assailed "greed and corruption" on Wall Street and promised to clean it up, while his Democratic opponent, Sen. Barack Obama, blamed White House policies and said his opponent would only deliver more of the same.

Obama called it "the most serious financial crisis since the Great Depression." McCain declared in a new TV ad that "our economy is in crisis" and that only he and his running mate, Alaska Gov. Sarah Palin, could fix it. McCain also told voters in Jacksonville, Fla., "The fundamentals of our economy are strong."

Original story may be found at:
http://news.yahoo.com/s/ap/20080915/ap_on_bi_ge/financial_meltdown

Sarkozy: It's Crazy to Take Religion Out of Society

2008-09-13T17:17:03Z

France's President Offers View of "Positive Secularism"

PARIS, SEPT. 12, 2008 (Zenit.org).- It would be crazy to relegate religion to only the private realm, and deprive society of the contributions of faith, says the president of France.

Nicolas Sarkozy said this today in an address at the ceremony to welcome Benedict XVI to his country. The Pope is in Paris tonight, and will travel Saturday to Lourdes to participate in the celebrations marking the 150th anniversary of the Marian apparitions there.

The Pope was greeted by the pealing of church bells when he arrived to Paris. A smiling President Sarkozy received him at the airport, introducing the Pope to members of his family; the two also exchanged gifts.

This was followed by the official welcoming ceremony in the Elysee's great hall of celebrations to members of the government, parliamentarians and bishops.

"Very Holy Father, you honor France," said Sarkozy. "For the millions of French Catholics it is an exceptional visit, intense joy, immense hope"

Religion, began Sarkozy, "and in particular the Christian religion, with which we share a long history, are living patrimonies of reflection and thought, not only about God, but also about man, society, and that which is a central concern for us today, nature."

Positive

"It would be crazy to deprive ourselves of religion; [it would be] a failing against culture and against thought. For this reason, I am calling for a positive secularity," he said. "A positive secularity offers our consciences the possibility to interchange -- above and beyond our beliefs and rites -- the sense we want to give to our lives."

The president explained the areas in which this vision of secularism could take root: "France has begun, together with Europe, a reflection on the morality of capitalism.

"Economic growth doesn't make sense if it becomes it's own objective. Only the betterment of the situation of the greatest number of persons and their personal fulfillment constitute legitimate objectives.

"This teaching, that forms part of the heart of the social doctrine of the Church, is in perfect consonance with the challenges of the globalized contemporary economy. Our duty is to listen to it."

"Positive secularism, open secularism, is an invitation to dialogue, to tolerance and respect," Sarkozy acknowledged. "It is an opportunity, an encouragement, a supplementary dimension to the political debate. It is an encouragement to religion, as well as to all currents of thought."

Original article may be viewed at: http://zenit.org/article-23608?l=english

Pope: Religion has a place in politics

2008-09-13T17:14:11Z

PARIS, France (AP) -- Pope Benedict XVI urged Christians to make their voices heard in France and other countries that have strong traditions of secularism, saying Friday that politics and religion must be open to each other.

The pope embarked Friday on a four-day trip -- his first to France as pontiff -- that will take him from the presidential Elysee Palace to the Roman Catholic shrine in Lourdes.

Benedict was greeted by President Nicolas Sarkozy and his wife, Carla Bruni-Sarkozy, at a Paris airport, where a military band in plumed hats played a fanfare. Later in Paris, the pope was to address a gathering including Muslim leaders on the second anniversary of a speech that heightened tensions with much of the Islamic world.

Traditionally Roman Catholic France is wrestling with its changing religious landscape, and how to reconcile it with the secularism that underpins the modern French Republic. The country has a growing number of Muslims whose visible customs, such as wearing headscarves in public schools, have raised the hackles of officials determined to preserve the boundaries between church and state.

On the plane, Benedict expressed understanding for secular traditions, but added that, nonetheless, "Religion and politics must be open to each other."

"The presence of Christian values is fundamental for the survival of our nations and our societies," he said.

In a speech after talks with the pontiff at the Elysee Palace, Sarkozy promoted his idea of "positive secularism" -- upholding the separation of church and state, while considering religions as beneficial for society, not a danger.

The French president said positive secularism could allow for a dialogue "on the meaning we want to give to our existences."

Similar comments have raised the hackles of Sarkozy's critics in the past. Secularism is so firmly entrenched here that one prominent politician, centrist Francois Bayrou, even questioned Sarkozy's decision to invite the pope to the Elysee Palace, saying that government and religion don't mix.

In a speech following Sarkozy's, the pontiff said he was convinced of the need for "new reflection on the true meaning and importance" of separation of church and state.

The pontiff said it was "fundamental on the one hand, to insist on the distinction between the political realm and that of religion in order to preserve both the religious freedom of citizens and the responsibility of the State towards them."

But he added that societies must also be "more aware of the irreplaceable role of religion for the formation of consciences and the contribution which it can bring to -- among other things -- the creation of a basic ethical consensus within society."

The pope's agenda for later Friday included a vespers service at Notre Dame Cathedral, meetings with representatives of France's Jewish community and a speech before cultural figures and Muslim leaders.

His stay in the French capital coincides with the second anniversary of his speech about Islam that offended many Muslims. In the pope's 2006 Regensburg lecture to theologians in Germany, he quoted a 14-century Byzantine emperor who was explaining why spreading faith through violence is unreasonable.

The pope has said he is sorry for any offense his Regensburg remarks caused, and the rector of the Paris Mosque, Dalil Boubakeur, said he considers the incident closed.

"Through his speeches we know that he is a man of peace and dialogue," Boubakeur said.

France has Western Europe's largest population of both Jews and Muslims. Despite its Catholic roots, fewer than 5 percent of the nation's 62 million people attend Mass every week, according to a 2006 Ifop poll, and some of its centuries-old cathedrals are crumbling in towns that lack money or the motivation to fix them.

The pope's trip to France grew out of his desire to visit the Lourdes shrine in southern France near the Pyrenees while the sanctuary celebrates the 150th anniversary of apparitions of the Virgin Mary to a local 14-year-old, Bernadette Soubirous.

The shrine draws 6 million people annually, some of them disabled or desperately sick, many of them hoping for a miracle. The Catholic Church has recognized as miraculous 67 healings linked to Lourdes from 1858 to the present.

Benedict told reporters on the plane, "We don't go to Lourdes looking for miracles. The love of the mother (Mary) is the true healing."

Lourdes was the last trip abroad for Benedict's predecessor, John Paul II. When John Paul visited in 2004, he was 84 and suffering the final ravages of Parkinson's disease. He needed to be helped by aides. He died in 2005.

Original story may be viewed here:
http://www.cnn.com/2008/WORLD/europe/09/12/pope.france.secular.ap/index.html

Philippine famiy planning find hurdles

2008-09-13T08:14:42Z

by Kendrick GoSun Aug 31, 12:30 AM ET

In a country where three babies are born each minute and the Catholic Church exerts heavy influence, the long battle for a family planning programme could finally be reaching its climax.

Philippine congressman Edcel Lagman, who has introduced a Reproductive Health Care Act that appears to be gaining widespread support, believes the time has come for the Philippines to take family planning seriously.

"Despite what the church is saying Filipino people, especially the poor, want family planning," he told AFP in an interview.

"They want to have control over what methods they use and they want the ability to choose without fearing a backlash from the church," he said.

National surveys by pollsters Pulse Asia and the Social Weather Station have repeatedly shown that more than 80 percent of Filipinos want to have control over their fertility.

The Catholic Church, however, is campaigning against the bill -- which must receive the support of the majority of congress and senate members before being presented to the president for her signature.

Some church leaders are threatening to excommunicate legislators who support it, with some saying they might refuse to preside over marriages or administer Holy Communion to anyone associated with the bill.

The Roman Catholic Church is traditionally opposed to any form of birth control, a position reaffirmed by Pope Benedict XVI.

Commenting on the bill recently, Manila's Archbishop Gaudencio Rosales said the church would fight for the "defenseless" fetus.

"Life should be valued and its creation is a serious matter," he said.

"Couples who have the discipline to practice the church-sanctioned natural family planning methods are in possession of true values of life and tend to pass it on to their children. They also tend to be good citizens.

"If there is discipline in the marital bed, then there is discipline in the streets, there is discipline in schools, there is discipline in the government," he said

The Philippines has one of the highest birthrates in Asia, with the population growing at around two percent annually and expected to hit 100 million within the next five years, according to the National Statistics Office.

The Philippines is the world's 12th most populous country, but with 40 percent of the country's 90 million people living on less than two dollars a day, the high birthrate has been described by former president Fidel Ramos as a "ticking time bomb".

He said with inflation at a 17-year high, economic growth slowing and people starting to slip back into poverty, the need for a comprehensive family planning programme has become "a matter of national survival".

Fundamental to concerns held by Ramos and Lagman, and other supporters of the bill, is the poverty that is almost guaranteed for large families.

"Data shows that the poverty incidence is less than 10 percent for a family with one child compared to 57 percent for a family with nine or more children," said University of the Philippines economist Benjamin Diokno.

The Philippines does not have the resources to support its rapidly rising population, he said.

Until now, the government has left family planning to local governments and President Gloria Arroyo, a devout Catholic, supports the church's stance on birth control.

Contraceptives are rarely displayed and abortion is illegal.

A UN Population Fund study last year said two out of every five women would prefer to use contraceptives such as the pill, coils or condoms but do not have access to them.

The study also said that some 473,000 abortions occur in the Philippines annually. The World Health Organisation has put the figure at more than 800,000 a year, which would make it one of the highest in the world.

Lagman says he fears the influence of the Catholic Church could stymie reforms he sees as essential for economic and social progress.

"We have a very conservative church in this country and the church still exerts a lot of influence in politics," Lagman said. "The fact is economically we can not afford our current rate of population growth."

He has the support of the Philippine Council of Evangelical Churches (PCEC), which says it supports birth control as a way of curtailing the "alarming growth of our population".

"About 5,800 babies are born daily. One doesn't have to be an economist to tally how much more food, water, shelter, medicine and other resources will be needed for their support," the group said in a recent statement.

It is not the first time lawmakers have tried to introduce a family planning bill -- Lagman says his is the 11th or 12th in the last 20 years.

So far more than 25 percent of the 238 Congressmen and women have signed the bill and many more are said to be supporting it verbally.

While it still faces long odds given the church's position and influence, Lagman says he is gaining support from within government ranks.

Social Welfare Secretary Esperanza Cabral has said she supports birth control and that not even the president can change her mind.

"I will not sacrifice my principles for the sake of expediency," she said recently.

But even if a birth control bill does pass through Congress and the Senate it would still have to pass a final challenge -- gaining the support, and signature of President Arroyo.

This story may be viewed at:
http://news.yahoo.com/s/afp/20080831/lf_afp/
philippinespopulationpoliticsreligion;_ylt=AvUu5bUFTUOUapjfZBAmSMI7Xs8F

Pope to find unlikely ally in Sarkosy's France

2008-09-13T08:03:26Z

By Philip Pullella Wed Sep 10, 8:23 AM ET

Pope Benedict and French President Nicolas Sarkozy would appear to be unlikely allies in a battle to inject more Christian values back into Europe.

Yet when he welcomes Benedict to France for a four-day trip to Paris and Lourdes starting on Friday, Sarkozy, twice divorced and now married to ex-supermodel Carla Bruni, will likely have the German pope nodding in agreement more than once.

Sarkozy, who considers himself a "cultural Catholic" and attends Mass only occasionally, has been calling for a more active role for religion in public life and greater recognition of Europe's Christian roots.

Only last Saturday in Sardinia, the pope said Italy needed a new generation of Catholic politicians committed to using their religious beliefs to shepherd the country's future.

While no one expects the pope to go that far in France, where the split between Church and State is enshrined in the national identity, Benedict is expected to push for what he has called "a healthy secularism."

"I know people accuse me of being much too interested in religion ... I am not questioning the secular system," Sarkozy said last January after making a string of positive comments on faith and repeatedly citing God in speeches abroad.

Since the introduction in 1905 of a law on "laicite" -- the French concept of the separation of Church and State -- bringing religion into public affairs has been a major taboo.

But Sarkozy has branded this a "negative laicite," and wants a "positive laicite" that would value the hope faith brings and allow state subsidies for faith-based groups, Christian or not.

Benedict and Sarkozy might mention this in short speeches after their meeting at the president's Elysee Palace on Friday. "Everybody is waiting to see what they say," said Frederic Lenoir, editor of the French bimonthly Le Monde des Religions.

CHURCH'S "ELDEST DAUGHTER"

French Cardinal Jean-Louis Tauran told the Italian Catholic newspaper L'Avvenire he expects the pope to speak of "healthy secularism" at the Elysee Palace, his first stop after arrival.

But Catholicism in France, known as the "eldest daughter of the Church" due to its deep Christian roots, is anything but healthy.

Officially, some 75 percent of the French were baptized but far fewer identify themselves as Catholic and those who attend Mass on Sunday has fallen below 10 percent by most estimates.

"Undoubtedly, the level of religious practice is very low and the priest shortage is dramatic," Tauran said.

At the same time, France's committed Catholic minority has

a new self-confidence and speaks out more openly than in the past. Lenoir said Pope John Paul's visit during the Paris World Youth Day in 1997 helped boost their Catholic identity.

One of the pope's main speeches will be on Friday evening at his "meeting with the world of culture" -- intellectuals, artists and scientists assembled in a renovated medieval hall.

He will make that speech on the second anniversary of his controversial lecture at Regensburg, Germany, which angered Muslims who saw it as implying that Islam was violent and irrational.

He also plans brief meetings with Jews and Muslims.

Benedict will spend most of his time in Lourdes, in the foothills of the Pyrenees. This year is the 150th anniversary of when the Virgin Mary is said to have appeared to a peasant girl, Bernadette Soubirous, 18 times in 1858.

In the past 150 years, the Church has recognized as "miracles" 67 medically inexplicable healings of sick pilgrims who visited Lourdes.

Some six million people a year, many of them sick or disabled, visit the city to drink or bathe in its spring waters.

(Additional reporting by Tom Heneghan in Paris; editing by Keith Weir)

Original story may be viewed at: http://news.yahoo.com/s/nm/20080910/wl_nm/pope_france_dc

Commission Welcomes James D. Standish as Executive Director

2008-09-13T08:02:43Z

FOR IMMEDIATE RELEASE

July 20, 2008

WASHINGTON – The United States Commission on International Religious Freedom, an independent, bipartisan federal agency advising the Administration and Congress, today announced the appointment of James D. Standish as its new Executive Director.

“The Commission warmly welcomes James Standish,” stated Commission Chair Felice D. Gaer. “Mr. Standish’s academic and professional background in human rights and religious freedom advocacy has made him a respected leader, both on Capitol Hill and among the widely varying constituencies whose causes he has represented.”

Prior to his arrival at the Commission, Mr. Standish served as Director of Legislative Affairs at the Seventh-day Adventist Church World Headquarters for seven years. During that time, Mr. Standish represented fifteen million Church members on Capitol Hill and on official visits to Africa, Asia, Europe, the Middle East, and Australia.

“It is an honor to join the Commission, particularly as we approach the tenth anniversary of the creation of the International Religious Freedom Act, legislation that affirmed the importance of religious freedom promotion in U.S. foreign policy,” said Mr. Standish. “The magnitude and severity of violations of the universal right to freedom of thought, conscience, and religion worldwide cannot be understated. I am honored to join the Commission as it addresses some of world’s most pressing human rights crises.”

Mr. Standish is widely published, has discussed religious freedom issues on nationally broadcast television and radio, and has testified on religious freedom matters before the United States House of Representatives. “Mr. Standish brings to the Commission critical experience in both grassroots advocacy and a publication history that speaks to his impressive, non-partisan ability to approach issues of religious freedom from political, legal, and theoretical perspectives,” Ms. Gaer noted.

Mr. Standish received his undergraduate degree from Newbold College in England, a M.B.A. from the University of Virginia and a J.D., cum laude, from Georgetown University. He is a member of the Bar of Virginia State and the District of Columbia, and has been admitted to practice before the U.S. Supreme Court and the Fourth Circuit.

Mr. Standish succeeds Joseph R. Crapa, who served as Executive Director of the Commission from 2003—2007, until his untimely death last October.

The Commission, established by the International Religious Freedom Act of 1998 (IRFA), monitors violations of the right to freedom of thought, conscience, and religion or belief abroad, as defined in IRFA and set forth in the Universal Declaration of Human Rights and related international instruments. It provides independent policy recommendations to the President, Secretary of State, and Congress, and is the first government commission in the world with the sole mission of reviewing and making policy recommendations on the facts and circumstances of violations of religious freedom globally.

The Commission is comprised of nine Congressional and Presidential appointees: Felice D. Gaer, Chair; Michael Cromartie, Vice Chair; Dr. Elizabeth H. Prodromou, Vice Chair; Dr. Don Argue; Preeta D. Bansal; Imam Talal Y. Eid; Dr. Richard D. Land; Leonard A. Leo; and Nina Shea. John V. Hanford III is the Ambassador-at-Large for International Religious Freedom.

Original article may be found at:
http://www.uscirf.gov/index.php?option=com_content&task=view&id=2258&Itemid=1

WASHINGTON (AP) — James Standish, a former legislative affairs official with the Seventh-day Adventist Church, has been named executive director of the U.S. Commission on International Religious Freedom.

Standish, whose appointment was announced Aug. 20, succeeds Joseph R. Crapa, who died last fall. The commission is an independent, bipartisan federal agency that advises the president and Congress on religious freedom issues worldwide.

Standish worked for seven years as director of legislative affairs at the Seventh-day Adventist Church World Headquarters, representing the denomination on Capitol Hill and on country visits around the world.

Standish received his bachelor's degree from Newbold College in England, his master's degree in business administration from the University of Virginia and his law degree from Georgetown University.
http://news.yahoo.com/s/ap/20080828/ap_on_re/rel_religion_briefs;_ylt=AgSiO2DEhRyEMmLD0Q9gIi47Xs8F