Paul Taylor

BRUSSELS (Reuters) – Britain should welcome a cap on bankers’ bonuses agreed by European Union lawmakers on Thursday as a fair response to taxpayers’ anger over the huge cost of rescuing imprudent banks, Europe’s top financial regulator said.

EU Internal Market Commissioner Michel Barnier said he did not believe the curbs would drive banks out of the City of London, Europe’s biggest financial centre, to less regulated markets outside the European Union such as Switzerland or Singapore.

“I don’t think it is likely that banks that have an interest in working today and tomorrow in the single market will take the risk of leaving the single market simply because of this reason of the remuneration of their executives,” he said at a Reuters Summit on the future of the euro zone.

He was speaking hours after EU lawmakers, country representatives and the executive European Commission struck a provisional deal on new banking regulation including higher capital requirements and increased transparency by banks.

A ceiling on bonuses, the only one of its kind globally, is perhaps the most radical aspect of the new rules, and runs the risk of establishing an uneven global playing field that could put European banks at a disadvantage in attracting staff.

BRUSSELS (Reuters) – European Commission President Jose Manuel Barroso said on Tuesday he was convinced Britain would vote to stay in the European Union if a promised referendum takes place, despite opinion polls showing a plurality in favor of leaving.

However, he also told a Reuters Summit on the future of the euro zone the EU could not revise its policies just because one country was thinking of holding a vote on continued membership.

Prime Minister David Cameron promised last month to give Britons an in-out choice on whether to remain in the 27-nation bloc if he is re-elected in 2015, after trying to negotiate a reform of EU policies to meet British concerns.

CAIRO (Reuters) – Two years after a pro-democracy uprising, Egypt resembles a rickety bus rolling towards a cliff, its passengers too busy feuding over blame to wrench the steering wheel to safety.

Foreign exchange reserves are dwindling. Tourism is moribund. Investment is at a standstill. Subsidised diesel fuel and fertilizer are in short supply, while the cost of subsidies is swelling the budget deficit unsustainably.

The Egyptian pound has lost 14 percent of its value since the 2011 revolt. Dollars are scarce. An IMF loan that could unlock wider aid is on hold. Unemployment is rising. Public security has deteriorated, and arms smuggling is rife.

CAIRO (Reuters) – Egypt will not tolerate a two-way flow of smuggled arms with the Gaza Strip that is destabilizing its Sinai peninsula, a senior aide to its Islamist president said, explaining why Egyptian forces flooded sub-border tunnels last week.

The network of tunnels has been a lifeline for some 1.7 million Palestinians in Gaza, bringing in an estimated 30 percent of all goods that reach the enclave and circumventing a blockade imposed by Israel for more than seven years.

But Essam Haddad, national security adviser to President Mohamed Mursi told Reuters in an interview: “We don’t want to see these tunnels used for illegal ways of smuggling either people or weapons that can really harm Egyptian security.”

CAIRO (Reuters) – Egypt has begun devaluing its currency to help revive the economy and meet the conditions of an expected IMF loan and the depreciation has further to go, a business leader in the ruling Muslim Brotherhood said on Sunday.

Hassan Malek, chairman of the Egypt Business Development Association and a senior informal adviser to President Mohamed Mursi, told Reuters the government had begun steps to cut the budget deficit and stabilize the country’s finances, but tougher measures would have to wait until after parliamentary elections expected in April.

“We have started already some increase in taxation, and there is the devaluation of the pound and we raised some prices of petrol and gas,” Malek said in an interview.

CAIRO, Feb 13 (Reuters) – Fathy Ali is beyond anger as he
queues for hours in a line of 64 trucks and buses to fill his
tank with scarce subsidised diesel fuel, known in Egypt as
“Solar.”

“This has become part of my life. I come and wait for hours
or days, depending on my luck,” the chain-smoking bus driver
said at a besieged gas station on Cairo’s Suez High Road,
wrapped in a scarf and thick coat for the long ordeal. “At the
start it used to upset me a lot but now I’ve kind of given up.”

Diesel supplies are drying up as a cash-strapped government
struggles to cap a mounting bill for subsidies it has promised
the IMF it will reform to secure an elusive $4.8 billion loan
desperately needed to keep a sagging economy afloat.

CAIRO (Reuters) – The United States expressed concern on Tuesday about growing political polarization in its major ally Egypt and a “climate of impunity” over abuses by police and security forces in the most populous Arab nation.

At a news conference after a four-day visit, U.S. Assistant Secretary of State for Human Rights, Democracy and Labour Michael Posner avoided direct criticism of the Muslim Brotherhood-led government of President Mohamed Mursi.

But he said young people’s economic and political concerns, which had led to recent violent protests, should be addressed, and the government should “reach out widely” to other political and social forces and hold consultations on concerns about the Islamist-tinged constitution it pushed through in December.

CAIRO (Reuters) – The United States has urged Egypt to move fast to agree a loan deal with the IMF, reform its energy sector and guarantee investors against “arbitrary acts” to avert a deeper slide in its economy.

In unusually blunt comments, U.S. Ambassador Ann Patterson said Egypt’s government and opposition must stop ignoring economic problems and work together to fix them.

“The most catastrophic path is for the government and the political leadership of the country – whether in power or in opposition – to avoid decisions, to show no leadership, to ignore the economic situation of the country,” she said in a speech delivered in Alexandria on Sunday, according to a text posted on the embassy’s website.

CAIRO (Reuters) – Leaders of Islamic nations called for a negotiated end to Syria’s civil war at a summit in Cairo that began on Wednesday, thrusting Egypt’s new Islamist president to center stage amid political and economic turbulence at home.

The summit of the 57-member Organisation of Islamic Cooperation opened on a day when the assassination of a leading Tunisian opposition politician highlighted the fragility of “Arab Spring” democratic revolutions in North Africa.

Tunisian President Moncef Marzouki canceled his trip to the Cairo meeting after Shokri Belaid, a staunch secular opponent of the moderate Islamist government, was shot dead outside his home, triggering street protests.

CAIRO (Reuters) – Leaders of Islamic nations will press for a negotiated end to Syria’s civil war at a summit in Cairo starting on Wednesday that thrusts Egypt’s new Islamist president to center stage amid political and economic turbulence.

With Iranian President Mahmoud Ahmadinejad making an ice-breaking visit to Egypt after 34 years of estrangement, the two-day meeting will focus on how to stop bloodshed in Syria, where Tehran is one of President Bashar al-Assad’s last allies.

A communique drafted by foreign ministers of the 56-member Organisation of Islamic Cooperation and seen by Reuters blames Assad’s government for most of the slaughter and urges it to open talks on a political transition.