Short-term bond yields enter negative territory for first time
Investors will get back less than they paid when debt matures
Mario Draghi: Several commentators said his action postpones a divisive debate about launching an all-out programme to buy government bonds or quantitative easing. Photograph: EPA/Frank Rumpenhorst
Eoin Burke-Kennedy, Kathryn Hayes
First published: Sat, Sep 6, 2014, 01:00
Irish bond yields sank to fresh lows yesterday as global markets digested the impact of Europe’s latest monetary stimulus. The European Central Bank’s surprise rate cut and new schemes to bolster lending saw the yield on two-year Irish notes dip into negative territory for the first time.
A negative bond yield essentially means investors buying the securities will get less back than they paid when the debt matures.
Short-term bond yields in Germany, France, the Netherlands and Austria also hit record lows while the euro hovered near a 14-month low against the dollar.
Yields on Irish 10-year benchmark bonds – essentially the rate at which the State borrows – also plumbed new depths, falling to 1.64 per cent yesterday, keeping borrowing costs here below that of the US and UK.
Euro zone flatlining
The slide in yields came as figures from Eurostat confirmed the euro zone economy flatlined in the second quarter, recording zero per cent growth.
However, German industrial output posted its biggest monthly increase since March 2012 in July, rising far more than forecast and marking a strong start to the third quarter for a key sector of Europe’s powerhouse economy.
As the impact of the ECB stimulus measures reverberated around financial markets yesterday, Minister for Finance Michael Noonan said the latest cuts in interest rates by Frankfurt would help Ireland continue its export drive.
“What was announced in Frankfurt brings down the exchange rate, when the exchange rate goes down our exports are more affordable so we export more,” he said.
Mr Noonan said foreign direct investment alone will not rescue the country and said the construction and retail industries are also picking up.
“Anybody who thinks the IDA alone with foreign direct investment will rescue the country no, but it’s a great lead in and a lot of other good things come with it.”
Several analysts said yesterday that ECB president Mario Draghi’s gamble had put the ball firmly back in the court of governments, notably France’s and Italy’s, to do their bit to heal the economy by cutting taxes or changing labour law to make their workforces more nimble.
As the euro zone’s economic crisis has faded in memory after Mr Draghi promised to do whatever was needed to shield the bloc, the willingness of Europe’s politicians to reform has waned, much to the frustration of Frankfurt. “This is the ECB telling European leaders: ‘We are at the end of the road, now you have to deliver’,” said Jacob Kirkegaard of Washington think tank the Peterson Institute.
Several commentators said Mr Draghi’s action also postpones a divisive debate about launching an all-out programme to buy government bonds or quantitative easing, a step that would be bitterly opposed by Germany and
Bundesbank president Jens Weidmann.
The euro yesterday remained rooted below the significant $1.30 level yesterday, trading at $129.60, leaving the currency on track for eight straight week of losses – the first time that has happened since its introduction in January 1999.
“If the primary reason for the ECB deposit rate cut yesterday was to weaken the euro it has been successful,” said Chris Turner, a strategist with Dutch bank ING in London. – (Additional reporting by Reuters)
Ceasefire between pro-Russian separatists and government forces in eastern Ukraine went into effect on Friday evening.
Last updated: 06 Sep 2014 06:49
Ukraine and pro-Russian rebels have signed a ceasefire deal aimed at ending nearly five months of fighting in the country's east.
Besides reports of three explosions north of Donetsk just minutes after the truce went into effect on Friday evening, gunfire and shelling appeared to fall silent shortly after the appointed hour.
Ukraine's president, Petro Poroshenko, had ordered government forces to cease fire at 6pm (15:00 GMT) following an agreement signed at talks attended by representatives of Ukraine, Russia, the rebels and the OSCE in Minsk, Belarus.
"I am ordering the head of the general staff of the armed forces of Ukraine to halt fire starting at 6pm," Poroshenko said in a statement published on his official website.
Al Jazeera's Paul Brennan, reporting from Donetsk, said there would have to be serious rebuilding of trust between both sides to ensure a cessation of hostilities, and that the tension would not die down anytime soon.
The separatists were represented at the talks by leaders from the self-proclaimed Donetsk People's Republic and Luhansk People's Republic, including Alexander Zakharchenko, Donetsk's self-proclaimed prime minister.
The negotiations followed talks between Poroshenko and his Russian counterpart Vladimir Putin in Minsk last week.
NATO head Anders Fogh Rasmussen welcomed the agreement that sought to end to end fighting that has killed an estimated 2,600 people in the east of the country.
Rasmussen said the next "crucial step is to implement it in good faith ... but so far, so good," adding he hoped it "could be the start of a constructive political process".
The view was echoed by UN chief Ban Ki Moon, who urged a "comprehensive monitoring" of the situation for a successful truce.
Ukraine and Islamic State dominate the agenda of NATO's summit in Wales
The Ukrainian prime minister, Arseniy Yatsenyuk, had called for the US and the EU to act as guarantors to the ceasefire.
"It must be supported by the United States and the EU. We will not manage with Russia on our own... we need guarantees," Yatsenyuk told a cabinet meeting moments before rebels announced that a truce deal had been agreed.
Combat continued on the outskirts of the strategic Ukrainian port city of Mariupol on Friday, ahead of the truce announcement.
Mariupol became a major focus of concern for Ukraine after the rebels broke out of their main strongholds further north in late August.
The new offensive has raised concerns the rebels are aiming to seize Mariupol, a major port of about 500,000 people, and create a land corridor between Russia and Crimea, the Black Sea peninsula that Russia annexed in March.
Al Jazeera and agencies
US confirms al-Shabab leader's death
Ahmed Abdi Godane, a founder of Somalia's al-Shabab group, was killed in a US air strike this week, Pentagon says.
Last updated: 06 Sep 2014 06:29
The United States has confirmed that Ahmed Abdi Godane, a founder of Somalia's al-Shabab group, was killed in a US air strike this week.
"We have confirmed that Ahmed Godane, the co-founder of al-Shabab, has been killed," the Pentagon press secretary Rear Admiral John Kirby said in a statement on Friday.
On Tuesday at least six people were killed as the US hit a convoy of senior al-Shabab leaders. Since then the US was assessing the results to see who died.
The attack targeted vehicles and encampment near Barawe, the armed group's base of operations.
The US said the targets were senior commanders of al-Shabab, including Godane, also known as Abu Zubeyr.
Confirming Godane's death on Friday, the US statement called it a "major symbolic and operational loss" for the al- Qaeda-affiliated organisation.
The US State Department has listed Godane as one of the world's eight top "terror" fugitives and analysts say his death would mark a serious setback for al-Shabab.
Al Jazeera's Mohammed Adow, reporting from neighbouring Kenya, said that it was during Godane's leadership that al-Shabab established a foothold in most parts of Somalia and led the group to cross its borders and carry out attacks in countries like Kenya and Uganda.
Somalian President Hassan Sheikh Mahmoud, who said the airstrikes against al-Shabab's leadership were carried out with his government's knowledge, called on "the group's fighters to embrace peace and take advantage of a 45-day amnesty period declared by his government".
Last October, US special operations forces launched an attack on a house in Barawe against another top al-Shabab commander but were forced to withdraw without killing their target.
Al-Shabab fighters are fighting to overthrow the Somali government, regularly launching attacks against state targets and in neighbouring countries that contribute to the African Union force.
Following the Pentagon announcement, Somali President Hassan Sheikh Mohamud reiterated his government's amnesty offer to al-Shabab fighters saying they should reject being "pawns of an international terror campaign".
Al Jazeera's Mohammed Adow reports from Somalia on the offensive against al-Shabab
"I say to the members of al-Shabab: Godane is dead and now is the chance for members of al-Shabab to embrace peace," Mohamud said in a statement
"While an extreme hardcore may fight over the leadership of al-Shabab, this is a chance for the majority of members of al-Shabab to change course and reject Godane’s decision to make them the pawns of an international terror campaign," he said.
Earlier this week the Somali government gave fighters 45 days to accept the amnesty offer following the US air strike on Godane.
"Those who choose to remain know their fate. Al-Shabab is collapsing," Mohamud warned.
Al Jazeera and agencie
Syrian warplanes hit Islamic State-run bakery, training camp: monitor
BEIRUT Sat Sep 6, 2014 11:05am EDT
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(Reuters) - Syrian warplanes bombed a bakery run by Islamic State in the city of Raqqa, killing 25 people, in air raids on Saturday that also hit a major training camp used by the insurgent group for a second day running, a group monitoring the war said.
The air strikes on Raqqa, Islamic State's stronghold some 400 km (250 miles) northeast of Damascus, also hit a building used as an Islamic court, and another of the group's offices, the Syrian Observatory for Human Rights said.
Rami Abdulrahman, founder of the Observatory, said the bakery was run by the militant group. The Observatory, which gathers information from all sides in the civil war, said the dead included 12 civilians and nine Islamic State activists.
Islamic State, which has seized wide expanses of territory in Iraq and Syria, drove the last Syrian government forces out of Raqqa province in late August when its fighters seized an air base, capturing and later executing scores of Syrian soldiers.
In a headline bar, Syrian state TV said army units had destroyed weapons and ammunition stores used by Islamic State fighters in Raqqa, "eliminating a number of them and wounding others in a number of areas". It gave no further details.
Raqqa is the main Syrian foothold of Islamic State. The group has been overseeing most aspects of civilian life in the city including bakeries, banks, schools, courts and mosques.
The United States is assembling an alliance to fight the group in neighboring Iraq. U.S. President Barack Obama said on Friday key NATO allies stood ready to join the United States in military action to defeat the group in Iraq.
The Syrian government has said it should be a partner in the fight against Islamic State. But Western states that have backed the uprising against President Bashar al-Assad have dismissed the idea of cooperating with Damascus and describe Assad as part of the problem.
The Observatory reported that six Islamic State fighters were killed in the air raid on the training camp.
(Writing by Tom Perry; Editing by Mark Heinrich)
Sierra Leone lockdown will not help halt Ebola: MSF
By David Lewis
DAKAR Sat Sep 6, 2014 12:23pm EDT
(Reuters) - Sierra Leone's proposed countrywide "lockdown" will not help control an Ebola outbreak and could lead to the disease spreading further as cases are concealed, medical charity Medecins Sans Frontieres (MSF) said on Saturday.
The government plans to order citizens not to leave the areas around their homes for three days from Sept. 19 in a bid to halt new infections and help health workers track down people suffering from the disease, the information ministry said on Saturday.
"It has been our experience that lockdowns and quarantines do not help control Ebola as they end up driving people underground and jeopardizing the trust between people and health providers," said the group.
"This leads to the concealment of potential cases and ends up spreading the disease further," added the group which has been helping fight the world's biggest outbreak of the disease across West Africa.
An Ebola outbreak that was first identified in Guinea in March has since spread across much of Liberia and Sierra Leone. Cases have also been registered in Nigeria and Senegal and the World Health Organisation says more than 2,100 people have died. More than six months into the crisis, weak government health systems are still failing to defeat the disease, one of the deadliest on the planet.
The WHO says it will take months to bring Ebola under control and forecast as many as 20,000 cases. Sierra Leone's deputy information minister, Theo Nichol, said on Saturday the three-day shutdown would make it easier for medical workers to trace suspected cases.
Nichol said the period may be extended if needed. A presidency official had earlier said the lockdown would last for four days. But MSF said door-to-door screening required a high level of expertise and, even when cases were found, there were a lack of treatment centers and other facilities to take them to.
MSF reiterated its calls for nations with civilian and military biological-disaster response capacities to send equipment and teams to West Africa. "This remains our best hope of bringing this deadly outbreak under control as quickly as possible," it said.
(Additional reporting by Josephus Olu-Mammah in Freetown; Reporting by David Lewis; Editing by Andrew Heavens)
Putin, Ukraine’s Poroshenko agree ceasefire holding
Residents in eastern Ukraine welcome respite in conflict but do not expect it to last
After hiding in a basement during artillery shelling that preceded the ceasefire, a family prepares to leave their home in Lebedynske, Ukraine, a village east of Mariupol today. Photograph: Mauricio Lima/The New York Times
Sat, Sep 6, 2014, 19:10
First published: Sat, Sep 6, 2014, 16:18
The presidents of Russia and Ukraine said today that a ceasefire between Ukrainian government forces and pro-Russian separatists was holding up fairly well and they discussed urgent humanitarian aid for the shattered region.
Residents and combatants in eastern Ukraine welcomed the respite in a five-month conflict that has killed at least 2,600 people but said they did not expect it to last. They also each accused the enemy of using the truce to rebuild their forces.
“The two heads of state stated that overall the ceasefire was being implemented ... (and) discussed steps to achieve a permanent ceasefire,” Ukraine’s Petro Poroshenko said in a statement after his telephone call with Russia’s Vladimir Putin.
⦁ Nato offers security blanket to countries in Russia’s orbit
The presidents also expressed support for the full involvement of the Organisation for Security and Cooperation in Europe (OSCE), a rights watchdog, in monitoring the ceasefire.
The Kremlin later put out a similar statement on the talks.
Envoys of Ukraine, Russia, the separatist leadership and the OSCE approved the ceasefire in Minsk on Friday as part of a peace roadmap that also includes an exchange of prisoners of war and establishing a humanitarian corridor for refugees and aid.
Mr Poroshenko agreed to the ceasefire after Ukraine accused Russia of sending troops and arms onto its territory in support of the separatists, who had suffered big losses over the summer. Moscow denies sending troops or arming the rebels.
In the days before the ceasefire, fighting had been fierce in two hotspots - in rebel-held Donetsk, the region’s industrial hub, and also near the port of Mariupol on the Sea of Azov, where government forces were trying to repel a major rebel offensive backed - Kiev says - by Russian troops.
Both cities were quiet today, despite some isolated shelling overnight near Donetsk’s airport, which remains in government hands. Mortar rounds were also fired at regular intervals through the day in the vicinity of the airport.
“The ceasefire is looking good for now but we know they (the Ukrainian side) are only using it to bring in more forces here and ammunition and then to hit us with renewed strength,” said one rebel commander in Donetsk known by his nickname Montana.
Andriy Lysenko, the spokesman of Ukraine‘s National Security and Defence Council, said Kiev wanted the exchange of POWs to take place “as fast as possible” but gave no timeframe. He said the rebels were holding more than 200 Ukrainians captive.
Earlier, the prime minister of the rebels’ self-proclaimed “Donetsk People‘s Republic”, Alexander Zakharchenko, told Russian news agencies his side would hand over its POWs to Ukraine today but that had not happened by early evening.
Mr Poroshenko spent Thursday and Friday at a Nato summit in Wales at which US president Barack Obama and other leaders urged Mr Putin to pull its forces out of Ukraine. Nato also approved wide-ranging plans to boost its defences in eastern Europe in response to the Ukraine crisis.
The Ukraine conflict has revived talk of a new Cold War as the West accuses Mr Putin of deliberately destabilising the former Soviet republic. Mr Putin says he is defending the interests of ethnic Russians facing discrimination and oppression.
The Kremlin leader came under fire today from another source. Patriarch Filaret, head of Ukraine’s Kiev-based Orthodox Church, said Mr Putin had fallen under Satan’s spell and bore personal responsibility for all the bloodshed.
Filaret, whose church broke from the Moscow Patriarchate in 1992 after the fall of the Soviet Union and the advent of an independent Ukraine, compared Mr Putin, a baptised Orthodox Christian, to Cain, who in the Bible killed his brother Abel.
The European Union announced new economic sanctions against Russia late on Friday over its role in Ukraine but said they could be suspended if Moscow withdraws its troops and observes the conditions of the ceasefire.
Russia’s foreign ministry responded angrily today to the measures, pledging unspecified “reaction” if they were implemented. Moscow responded to a previous round of US and EU sanctions by banning most Western food imports.
In eastern Ukraine, despite the ceasefire, few expected the crisis to end anytime soon.
“This is no ceasefire but a theatre,” said Donetsk resident Ksenia. “This war will go on for five to nine years. Slavs are killing Slavs, there can be nothing worse than that.”
Crowds fail to materialise at launch of Swords development
About two dozen people queue to buy houses at Millers Glen
Sat, Sep 6, 2014, 18:26
Homes in a new housing development in north Dublin which has potential buyers queuing up since last Tuesday have gone on sale.
Some 60 houses in Millers Glen, Swords, are on offer in what is the first major housing development to go on sale in north Dublin since the property crash seven years ago.
The estate on the Glen Ellan road, has two-,three- and four-bed homes priced between €240,000 and €400,000 for sale. It is being developed by Gannon Homes as part of a major new scheme in the area.
The developers and the estate agent Sherry Fitzgerald set up portaloos, a coffee cart and security for the expected crowds, but by the time it opened just about two dozen people were in the queue to buy the houses.
The showhomes were opened early for prospective buyers and more arrived by the time the 2pm deadline for the start of sale occured. The houses are being sold on a first-come, first-served basis.
First in line Megan O’Shaughnessy said it was worth queuing since last Tuesday for one of the three bed semi-detached houses which are on sale for €289,000. She and her fiancée Rob Delaney are getting married in February.
“We were originally going for the three-bed end of terrace and there was only four of those at €279,000,” she explained.
“After that it is the three bed semi-detached which are an extra €10,000 but we decided for the future that we would go for the three bedroom semi-detached and there are only eight of them. There are a lot of people looking for the three bedroom semi-detached. I think we’ve done the right thing,” she said.
Shantelle Farrell and her boyfriend Andy Beveridge also queued from Tuesday for their first home. They are looking to buy a two bedroom house for €240,000. She did not regret queuing either. “There are a few people behind us looking for the two beds. The two beds are almost gone,” she said.
Gannon Homes has permission for up to 1,500 new homes to be built in gradual phases in the area. Millers Glen is part of phase one.
Ceasefire: President Poroshenko trick to regroup troops – Spanish volunteer to RT
Published time: September 06, 2014 10:37
Edited time: September 06, 2014 19:35
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Ukrainian President Petro Poroshenko has announced ceasefires before and was always the first to violate them, Spanish volunteer Ramiro Gomez, who fought in eastern Ukraine against the troops of the coup-imposed Kiev government, told RT.
According to the European volunteer, this ceasefire is in effect a part of Poroshenko’s strategy: “to reorganize the [Ukrainian] army which is already a large number, before a general counteroffensive by Lugansk and Donetsk [forces],” Ramiro Gomez told RT.
“They [Ukrainian forces] look sort of kicked out to the sidelines of the game,” he said, adding he personally has little expectations of a successful ceasefire.
Ramiro Gomez, Spanish volunteer in Ukraine.(Screenshot from RT video)
On Friday, September 5, the contact group on Ukraine meeting in Minsk reached an agreement on three key issues: ceasefire, exchange of war prisoners and humanitarian aid access.
Both sides in the Ukrainian conflict have agreed to “all to all” prisoners of war exchange, military hardware withdrawal and humanitarian aid access to the combat zone. Kiev and rebel troops laid down arms as the main ceasefire agreement came into force at 15:00 GMT.
Although RT’s journalist Paula Slier reported from Donetsk on Saturday morning that there is no bombardment or shooting in the city, the rebel military said Kiev troops aren’t observing the ceasefire in full.
Strikes and fighting are continuing in some areas, said Aleksandr Zakharchenko, PM of the Donetsk People’s Republic.
“The problem lies in the conditions of truce, because people of Novorossia do not want to be part of Ukraine – and they will stick to this line,” Gomez said.
He recalled first coming to the Ukrainian city of Lugansk, already suffering under the shells from the Ukrainian army.
“The situation was really dreadful when I arrived in Lugansk. I entered the city via a completely destroyed road. Everything there, restaurants, schools, hospitals and living quarters, was bombed out,” Gomez remembered.
The Spanish volunteer confirmed that for over a month the citizens of Lugansk lived without water, electricity and electric light, with no communications and scarce food supplies – “and all this under unceasing bombardment from the Ukrainian army, which for good measure was saying this was an anti-terrorist operation, while a full-fledged war was underway.”
RIA Novosti / Valeriy Melnikov
“They [Ukrainian troops] exterminated the civilian population with impunity, they do not stop to annihilate districts where [ordinary] people live, where children and old folks die, many people die,” volunteer Gomez said, calling the situation in eastern Ukraine “a catastrophe and a cruel injustice.”
When Ramiro Gomez learnt about the developments unraveling in Ukraine, he simply “could not stay idle when such injustice was being committed.”
“Because all [Western] mass-media couldn’t stop lying and manipulating the events, my idea was to go there [to eastern Ukraine], I couldn’t do otherwise,” he said.
Ramiro Gomez said he was very sorry to see the faces of the children and a large number of the old ones who got caught in this situation because they have nowhere to go, no place to hide, after Ukrainian troops shelled Lugansk.
“I was deeply impressed by the determination and courage of the people, which is decisive and absolutely motivated to get to their dream to become Novorossia and move over from the illegal fascist government, which got to power through coup in Ukraine,” Gomez said.
“They have never sought war, it is the war that found them – and they are going to resist it,” he told RT.
Kingdom announces 900km fence along its northern border, as part of efforts to secure its vast desert frontiers. Last updated: 06 Sep 2014 22:09
Saudi Arabia has unveiled a 900km multi-layered fence along its border with Iraq, as part of efforts to secure the kingdom's vast desert frontiers against infiltrators and smugglers, state media SPA has said. King Abdullah announced the launch of the first stage of the border security programme late on Friday, which stretches from Hafar al-Batin, near the Iraq-Kuwait border to the northeast town of Turaif close to Jordan.
King Abdullah announced the launch of the first stage of the border security programme late on Friday, which stretches from Hafar al-Batin, near the Iraq-Kuwait border to the northeast town of Turaif close to Jordan.
The kingdom has taken huge steps to protect its 800km border with Iraq, and in The project, which includes five layers of fencing equipped with watch towers, night-vision cameras and 50 radars is aimed at cutting the "number of infiltrators, drug, arms and cattle smugglers to zero", SPA said. The border programme, which was first discussed in 2006, came amid growing concern over neighbouring Iraq's deteriorating security situation.
In 2009, Riyadh signed a deal with European aerospace and defence contractors EADS to secure the Iraq border, but with increasing fears over infiltration by anti-government groups and al-Qaeda, the interior ministry expanded the scope to cover all the country's borders.
Saudi Arabia has also struggled to battle domestic terrorism since al-Qaeda first launched a string of attacks around a decade ago aimed at toppling the monarchy. Saturday's announcement comes amid the advance of the Islamic State group who have seized large swathes of territory in Iraq and Syria. July sent 30,000 soldiers to its border with Iraq after Iraqi soldiers withdrew from the area.
Relations between Saudi Arabia and Iraq have been deeply strained since Riyadh accused the outgoing Iraqi prime minister, Nouri al-Maliki, of creating the conditions for the Islamic State group to emerge by marginalising its Sunni Arab minority.
Al Jazeera and agencies