“Fiscal cliff” struggle prompts Republican infighting

(Reuters) – Republicans in the Congress attacked each other on Tuesday over their leadership’s “fiscal cliff” offer to Democratic President Barack Obama as a group of governors visited the White House to voice concern about the impact on the states of the year-end tax-and-spending deadline.

The disarray in Republican ranks over how far to compromise the party’s anti-tax stance could complicate what are expected to be intense negotiations between House Speaker John Boehner and Obama. Each will need the backing of their respective troops in Congress in order to bargain credibly.

The fiscal cliff refers to steep tax increases and deep automatic spending cuts slated to start to take effect on New Year’s Day. If Congress and Obama do not act to stop them, economists have warned the U.S. economy could be thrown back into recession.

The disagreements among Republicans surfaced as negotiations on a deficit reduction plan designed to supplant and avert the automatic cuts and tax hikes got more serious, with both parties having presented opening offers.

Senator Jim DeMint, a South Carolinian with a following among small-government conservatives, lashed out at an offer sent on Monday to Obama by Boehner, a fellow Republican.

“Speaker Boehner‘s $ 800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more,” DeMint said in a statement.

In the House of Representatives, two first-term Republican Tea Party stalwarts – Tim Huelskamp of Kansas and Justin Amash of Michigan – were removed by party leadership from the powerful budget committee in what Huelskamp called “a vindictive move.”

The Republican leadership offered no immediate explanation for the unusual action, but Boehner has had problems bringing in line the large Tea Party wing in the House. Elected to Congress in force in 2010, they regard the speaker as too much of a compromiser and tied his hands during talks in 2011 on raising the debt ceiling.

“The GOP leadership might think they have silenced conservatives, but removing me and others from key committees only confirms our conservative convictions,” said Huelskamp.

Washington interest groups are now fully consumed by the cliff, and some are in a bit of a panic about what the talks might bring.

Tensions erupted on Tuesday at a forum convened by a fiscal responsibility group called Fix the Debt, which seeks to reduce the federal government’s debt and includes a range of business, think tank and political leaders.

Audience members stood and repeatedly interrupted Republican Senator Rob Portman of Ohio as he attempted to make a speech. They urged protections from cuts for the Social Security and Medicare social safety net programs.

Others shouted down the protesters until they marched out of the forum, where Democratic Senate Finance Committee Chairman Max Baucus also made remarks.

U.S. stock markets opened slightly higher, with the benchmark Dow Jones industrial average up less than 1 percent after weeks of gyrations tied to the debate on Capitol Hill.

GOP OFFER MADE

In an important step, Boehner on Monday called for steep spending cuts, but gave no ground on Obama’s proposal to raise tax rates on the wealthiest Americans.

The central dispute between the two parties has been what to do about low individual income tax rates that will expire at year-end. The low rates were first signed into law a decade ago by former President George W. Bush.

Obama wants to extend the low rates for 98 percent of taxpayers, but not for the top 2 percent. Republicans have insisted that the low tax rates be extended for the wealthy as well.

The White House dismissed Boehner’s proposal within an hour of its being made public, the same treatment Republicans gave Obama’s deficit reduction plan offered last week.

While the offers and counter-offers between Republicans and Democrats may ultimately create the conditions for actually getting in a room together and bargaining at length, so far the moves have been out in public and mostly for show.

Washington is awash in competing plans to cut the federal deficit. A think tank with ties to the Obama administration laid out another plan on Tuesday, urging the president to go bold and seek more concessions from Republicans on tax hikes.

(Reporting by Thomas Ferraro, David Lawder, Kim Dixon, Fred Barbash, Rachelle Younglai; Editing by Jackie Frank)

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Citi cuts telecoms head in Europe: sources

DUBAI/LONDON (Reuters) – Citigroup‘s head of technology, media and telecoms in Europe is to leave as part of cost cuts the U.S. bank is making in response to the weak economic climate and due to tougher regulation, sources familiar with the matter told Reuters on Monday.

Daniel Bailey is to leave the bank with immediate effect and his position will be taken on by Citigroup’s European (EMEA) head of M&A, Wilhelm Schulz.

Bailey declined to comment. Citigroup also declined to comment.

Citigroup and other big banks are under pressure from investors to cut costs and scale-back activities in line with lower business volumes and reduced returns in the financial sector since the financial crisis.

The U.S. bank’s new chief executive Michael Corbat, who took the helm on October16, is in the process of reviewing management and executive reporting lines.

Bailey, who joined Citi in 2006 from Morgan Stanley , worked on some of the telecoms industry’s biggest deals, including the $ 183 billion merger of Vodafone with Mannesman in 2000, the largest corporate merger ever at that time.

Schulz will relinquish his role as co-head of German banking to focus on his new responsibilities but will remain head of German coverage. Stefan Wintels will become sole head of German banking.

Citigroup is also expected to cut bonuses this year by about 10 percent and axe around 150 investment banking jobs by year-end, just under one percent of the 17,000 staff in its investment bank, a person familiar with the matter said.

(Additional reporting by David Henry in New York, editing by Sophie Sassard and Jane Merriman)

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Nokia Siemens to sell optical networks unit

FRANKFURT (Reuters) – Mobile telecoms equipment joint venture Nokia Siemens Networks, which is focusing on its core business, is to sell its optical fiber unit to Marlin Equity Partners for an undisclosed sum.

Up to 1,900 employees, mainly in Germany and Portugal, will be transferred to the new company, NSN said on Monday.

The company, owned by Nokia and Siemens, has sold a number of product lines since it last year announced plans to divest non-core assets and cut 17,000 jobs, nearly a quarter of its total workforce.

Nordea Markets analyst Sami Sarkamies said he expected more divestments after the optical unit deal. This disposal was a small surprise, he said, because NSN needed some optical technology – where data is transmitted by pulses of light – for its main mobile broadband business.

The move may hint the company is preparing itself for further consolidation in the sector by cutting overlaps with other players, Sarkamies said.

The telecom equipment market is going through rough times with stiff competition. French Alcatel-Lucent is also cutting costs.

($ 1 = 0.7689 euro)

(Reporting by Harro ten Wold; Editing by Greg Mahlich and Dan Lalor)

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Palace says Duchess of Cambridge expecting a baby

LONDON (AP) — Get the nursery ready: Prince William and his wife Kate are expecting their first child.

St. James’s Palace announced the pregnancy Monday, saying that the Duchess of Cambridge — formerly known as Kate Middleton — has a severe form of morning sickness and is currently in a London hospital. William is at his wife’s side.

The palace said since the pregnancy is in its “very early stages,” the 30-year-old duchess is expected to stay in the hospital for several days and will require a period of rest afterward.

It would not say how far along she is, only that she has not yet reached the 12-week mark.

News of the pregnancy drew congratulations from across the world, with the hashtag “royalbaby” trending globally on Twitter.

Not only are the attractive young couple popular — with William’s easy common touch reminding many of his mother, the late Princess Diana — but their child is expected to play an important role in British national life for decades to come.

William is second in line to the throne after his father, Prince Charles, so the couple’s first child would normally eventually become a monarch.

In recent days, Middleton has kept up her royal appearances — recently playing field hockey with schoolchildren at her former school.

The confirmation of her pregnancy caps a jam-packed year of highs and lows for the young royals, who were married in a lavish ceremony at Westminster Abbey last year.

They have traveled the world extensively as part of Queen Elizabeth II’s Diamond Jubilee celebrations and weathered the embarrassment of a nude photos scandal, after a tabloid published topless images of the duchess.

Joe Little, managing editor of Majesty magazine, said the news bookended a year that saw the royal family riding high in popular esteem after celebrations of Queen Elizabeth II’s 60 years on the throne.

“We’re riding on a royal high at the moment at the end of the Diamond Jubilee year,” he said. “People enjoyed the royal romance last year and now there’s this. It’s just a good news story amid all the doom and gloom.”

Speculation about when the couple would start a family has been rife since their wedding.

William’s mother — the late Princess Diana — got pregnant just four months after her wedding in 1981. Diana reportedly suffered from morning sickness for months and complained of constant media attention.

“The whole world is watching my stomach,” Diana once said.

American tabloid speculation of the pregnancy has been rampant for months. One newspaper even cited anonymous sources talking about Kate’s hormone levels. Others have focused on the first signs of the royal bump.

The palace said the royal family was “delighted” by the news, while British Prime Minister David Cameron wrote on Twitter that the royals “will make wonderful parents.”

Whether boy or girl, the child will be next in line behind William in the line of succession to the throne, Cabinet Office officials have said.

Leaders of Britain and the 15 former colonies that have the monarch as their head of state agreed in 2011 to new rules which give females equal status with males in the order of succession.

Although none of the nations had legislated to make the change as of September 2012, the British Cabinet Office confirmed that this is now the de-facto rule.

On the couple’s recent tour of Malaysia, Singapore, the Solomon Islands and Tuvalu in September, William reportedly said he hoped he and Kate would have two children.

___

Associated Press writers Jill Lawless and Paisley Dodds contributed to this report.

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Merck starts new trial to test Alzheimer’s drug

(Reuters) – Merck & Co Inc has started a new trial of its experimental Alzheimer’s drug, the first mid-stage clinical trial of a promising new class of oral medicines that has the potential to shut down the production of a protein that many researchers believe is the primary cause of the disease.

The drugmaker said on Monday it had started the trial to evaluate the safety and effectiveness of the drug, MK-8931, in patients with mild-to-moderate Alzheimer’s disease.

The Phase II trial, which will compare the drug with a placebo, is a global, multi-center study that includes a group of 200 patients to test safety. The study is expected to eventually enroll up to 1,700 patients in the main Phase III trial.

The drug is the first of its kind to advance to this stage of clinical research.

Eli Lilly and Co is considered the front runner in Alzheimer’s research after its drug solanezumab, in a Phase III trial, was shown in August to slow down cognitive declines in patients with mild symptoms of Alzheimer’s disease. However, the drug failed its overall goal of delaying cognitive and physical decline in patients with mild to moderate Alzheimer’s.

The start of Merck’s new trial of MK-8931 could put the company on an equal footing with Lilly in the race for the first approved drug to delay the progress of the disease.

The Lilly drug is administered intravenously, while the Merck drug is taken orally.

Merck’s drug appears to almost entirely prevent the formation of new beta-amyloid, the toxic proteins that lead to plaques in the brain, while the Lilly drug acts by removing existing plaques, according to Mark Schoenebaum, an analyst with ISI Group. Amyloid plaques are linked to Alzheimer’s disease.

“We do not believe that Merck has any clinical efficacy data at this point upon which it is basing its Phase II/III ‘go’ decision. Thus, one must still view the Phase III as highly speculative,” Schoenebaum wrote in a research note.

Assuming the U.S. Food and Drug Administration asks Lilly to do another confirmatory Phase III trial on its drug, the Merck drug is on roughly the same timeline to potential approval as the Lilly drug, he said.

If the FDA approves the Lilly drug on its existing data, something Schoenebaum thinks is unlikely, then Lilly would be about three years ahead, he added.

Merck shares were up 30 cents to $ 44.60 in morning trade on the New York Stock Exchange, while Lilly shares were down 10 cents to $ 48.94.

Earlier this year, Roche Holding AG more than doubled the size of a clinical trial of its experimental Alzheimer’s drug gantenerumab in patients who have early Alzheimer’s but have not yet developed dementia, putting it in the vanguard of attempts to catch the disease in its early stages.

A successful Alzheimer’s treatment could reap billions of dollars in annual sales. But many experts believe treatment must be delivered before patients show signs of dementia because brain damage may be irreversible after that point.

(Reporting by Debra Sherman in Chicago and Ransdell Pierson in New York; Editing by Gerald E. McCormick and John Wallace)

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US budget talks ‘in stalemate’

2 December 2012 Last updated at 11:20 ET

US treasury Secretary Timothy Geithner has said there will be no deal to avert a “fiscal cliff” unless Republicans accept a tax hike for the wealthy.

But House Speaker John Boehner has dismissed a 10-year plan, which aims to raise $ 1.6tn (£1tn) through tax rises and spending cuts, as “silliness”.

The two men met on Thursday as time runs out to broker a deal.

Economists warn planned tax rises and spending cuts due to take effect on 1 January could trigger a recession.

Mr Geithner, negotiating for the White House, has drafted a plan that includes more spending to help for the unemployed and struggling homeowners, as well as cuts in Medicare and other benefits.

On Friday President Barack Obama warned of a “Scrooge Christmas” if soon-to-expire tax breaks for households earning below $ 250,000 were not renewed as part of the deal to avert the fiscal cliff.

But Mr Boehner, negotiating for the Republicans who control the House of Representatives, said talks with the administration had so far gone “almost nowhere”.

Talk show entrenchment

Mr Geithner and Mr Boehner’s appearances on a number of Sunday television talk shows showed how entrenched their positions were.

“There’s not going to be an agreement without rates going up. There’s not,” Mr Geithner told CNN’s State of the Union.

He called on Republicans to make a counter-offer to the Obama administration’s plan.

But Mr Boehner said he was “flabbergasted” by Mr Geithner’s proposals – which he said asked Congress to give up its power to set the nation’s debt limit.

Continue reading the main story

• Under a deal reached last year by the White House and the Republicans, existing stimulus measures – mostly tax cuts – will expire on 1 January 2013


• Cuts to defence, education and other spending will then automatically come into force – the “fiscal cliff” – unless Congress acts


• The economy does not have the momentum to absorb the shock from going over the fiscal cliff without going into recession

“What do you think would happen if we gave the president $ 1.6tn of new money?” Mr Boehner asked Fox News Sunday. “He’d spend it.”

Mr Boehner says asking the top 2% of US taxpayers to pay more would deal a “crippling blow” to a fragile economy, and has criticised criticised the Obama administration’s proposed spending cuts as inadequate.

The White House has suggested it would not support any deal that did not increase tax rates on the wealthiest.

The fiscal cliff would suck about $ 600bn (£347bn) out of the economy.

The measures were partly put in place within a 2011 deal to curb the yawning US budget deficit.

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Bryce Dallas Howard film among the live-action short films on Oscar nominations shortlist

LOS ANGELES (TheWrap.com) – “when you find me,” directed by “Twilight” star Bryce Dallas Howard and executive-produced by her father Ron Howard, is among 11 films that have been shortlisted for possible Oscars nomination, the Academy of Motion Picture Arts and Sciences said Thursday.

Though the Academy typically only short-lists 10 entries, a tie in the nominations balloting resulted in an 11th title making the list. In all, 125 films originally qualified in the category.

From here, members of the Academy’s Short Films and Feature Animation Branch will select three to five nominees for the Oscars during December screenings in Los Angeles, New York and San Francisco.

Nominations will be announced January 10, with the Academy Awards taking place February 24.

Read the full short-list below.

“A Fábrica (The Factory),” Aly Muritiba, director (Grafo Audiovisual)

“Asad,” Bryan Buckley, director, and Mino Jarjoura, producer (Hungry Man)

“Buzkashi Boys,” Sam French, director, and Ariel Nasr, producer (Afghan Film Project)

“Curfew,” Shawn Christensen, director (Fuzzy Logic Pictures)

“Death of a Shadow (Dood van een Schaduw),” Tom Van Avermaet, director, and Ellen De Waele, producer (Serendipity Films)

“Henry,” Yan England, director (Yan England)

“Kiruna-Kigali,” Goran Kapetanovic, director (Hepp Film AB)

“The Night Shift Belongs to the Stars,” Silvia Bizio and Paola Porrini Bisson, producers (Oh! Pen LLC)

“9meter,” Anders Walther, director, and Tivi Magnusson, producer (M & M Productions A/S)

“Salar,” Nicholas Greene, director, and Julie Buck, producer (Nicholas Greene)

“when you find me,” Ron Howard, executive producer, and Bryce Dallas Howard, director (Freestyle Picture Company)

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Germany’s Merck Serono to produce medicines in UAE

ABU DHABI (Reuters) – Germany’s Merck Serono said it would team up with an Abu Dhabi firm to produce medicines for the domestic and regional markets, the first multinational of its kind to make branded products in the United Arab Emirates.

Merck Serono, the pharmaceutical arm of Merck KGaA, will initially produce two of its products at Neopharma‘s facilities in Abu Dhabi, the German firm’s first such partnership in the Middle East, the company’s CEO said.

“The Middle East is very important and the fastest growing region for our products,” Stefan Oschmann told reporters. “We plan to meet 100 percent of the regional demand for the products,” he added.

Oschmann declined to give specific figures but said revenues from emerging markets accounted for a third of Merck‘s total.

The two products to be produced at Neopharma’s facilities are Euthyrox, a synthetic thyroid hormone and Glucophage, for people suffering from type 2 diabetes.

Production of both branded products will start in 2013.

The UAE suffers from a high prevalence of diabetes. Some 827,000 people between the ages of 20 and 79 have diabetes in the UAE, according to the Ministry of Health.

Treatment of diabetes accounts for about 40 percent of the UAE’s overall healthcare expenditure, Amin al Amiri, assistant under-secretary for Medical practice & license at the ministry of health said.

“This alliance will provide increased supply of trusted branded medicines needed to help ease the diabetes crisis which is straining the financial resources of the UAE,” he said.

The Middle East is the largest market for Merck’s diabetes drug, Glucophage, which is currently imported from Europe.

(Reporting By Stanley Carvalho; Editing by Sami Aboudi and Helen Massy-Beresford)

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French unions rage at Hollande over Mittal deal

PARIS (Reuters) – French trade unions accused President Francois Hollande of betrayal on Saturday after his government backed away from a threat to nationalize ArcelorMittal‘s Florange steelworks.

The Socialist government said on Friday it had won promises from ArcelorMittal to avoid forced redundancies and inject 180 million euros to develop the Florange plant, meaning it would no longer have to take over the site.

Hollande came to office promising to create jobs and keep open the two furnaces at the site in northern France which ArcelorMittal says are not viable in a European steel sector suffering over-capacity.

ArcelorMittal confirmed the details of the deal on Saturday, saying it would negotiate a voluntary redundancy deal with unions.

Workers are angry the furnaces will remain idled rather than reopened and expressed doubt over ArcelorMittal’s promise to offer alternative posts or early retirement packages for the 630 workers affected.

“We’re on a war footing,” Edouard Martin, head of union CFDT’s Florange chapter, told the commercial i

“We’ve seen Mr. (Lakshmi) Mittal’s pledges in the past and what has become of them – nothing – so we’re not going to let anything pass without a fight.”

Martin said the union had been a “nightmare” for former president Nicolas Sarkozy in the past over his jobs record, which analysts say was a factor in his election defeat in May, and could soon become one for Hollande.

ArcelorMittal rejects accusations it has broken promises in a country where it employs 20,000 over several sites.

The group incurred union wrath in 2009 when it shuttered the nearby Gandrange steelworks and laid off about 500 workers. Sarkozy had pledged to keep that site open.

‘EXPECTING THE WORST’

France’s prime minister defended the Florange deal.

“The prime minister will keep a close watch to ensure that promises made yesterday by the group are kept,” Jean-Marc Ayrault said in a statement.

“They are unconditional, and the government will use all legal means at its disposal in the event they are not respected.”

Unions say revamping Florange will require about 400 million euros in funding from the European Union on top of ArcelorMittal’s pledge – cash which has yet to be committed.

Threats this week by Industry Minister Arnaud Montebourg of a state takeover of Florange were denounced as “scandalous” by France’s main employers group Medef, which fears it will jeopardize foreign investment in France.

Hollande has tried to cultivate a worker-friendly image but his popularity has suffered as an economic slowdown pushes unemployment above 10 percent. A survey by pollster IFOP showed 41 percent of the French back him, one of the lowest scores for a president only six months into his term.

“We complained about Nicolas Sarkozy, but Francois Hollande is not doing any better,” CGT unionist Frederic Maris told BFM television. “For the future, we’re expecting the worst.”

French officials argue that Mittal promised to keep blast furnaces running beyond 2010 when his company merged with Arcelor in 2006.

ArcelorMittal denies breaching commitments. Sources close to the group say Arcelor planned in 2003 – before its 2006 takeover by Mittal – to wind down inland blast furnaces in Europe, including the two in Florange, by 2010.

(Additional reporting by Robert-Jan Bartunek in Brussels; Editing by Mark John and Janet Lawrence)

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