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20 May 2012
Last updated at 13:23 GMT

Ken Clarke said the US should contribute more to the International Monetary Fund

Former chancellor Ken Clarke has said Europe’s banking system is “in tatters”, warning the UK is “heavily exposed” to potential problems.

The justice secretary also told Sky News that Greek voters had to “face up to reality” by voting for parties willing to cut the country’s deficit.

He added that electing “cranky extremists” would worsen the situation.

The comments come after Prime Minister David Cameron used the G8 summit to urge action to end the eurozone crisis.

Voters in Greece return to the polls next month after the recent general election left no party in control and efforts to form a coalition government failed.

There is uncertainty over whether the country, beset by problems arising from its debt levels, will remain in the European single currency.

‘Hardships’

Mr Clarke, a strong supporter of the European Union, told Sky News’ Murnaghan programme: “The Greek voters have really got to face up to reality – it is very, very difficult for them. They are having a terrible time.”

But he said the consequences would be “serious” if the Greek people elected “cranky extremists” and defaulted on their debts as a result, adding: “Everyone says they will leave the euro. Actually that is quite likely but doesn’t necessarily follow…

“No-one knows exactly what will happen in the rest of Europe. But the banking system is in tatters. It is weak in very many places.

“We don’t know what the knock-on effects would be, they could be very serious and of course people will start barking at the door of Portugal, Ireland, Italy and here in Britain.”

Mr Clarke, who served as chancellor under Conservative prime minister John Major in the 1990s, defended the coalition’s decision to increase the UK’s contribution to the International Monetary Fund, despite the US refusing to do so.

He added: “It is a pity that the Americans are so paralysed by their pre-election arguments that they are not able to contribute, but all the more reason for the British, the Brazilians, the Chinese and others to be persuaded to put in because it is quite essential.”

Article source: http://www.bbc.co.uk/news/uk-politics-18137239#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

20 May 2012
Last updated at 10:21 GMT

Ed Balls said the European Central Bank had to be freed up to help struggling eurozone countries

Labour’s Ed Balls has warned the world economy faces a “catastrophe” unless Germany abandons pressure on eurozone countries to cut public spending.

Speaking on Sky News, the shadow chancellor said David Cameron must urge leader Angela Merkel to change course.

Labour’s former chancellor, Alistair Darling, has also warned that austerity could damage living standards.

But the prime minister has said he backs Germany’s calls for “strong plans” for dealing with deficits.

The G8 summit of leaders of major economies has been discussing the ongoing crisis in the eurozone.

Mr Cameron said the countries in the single currency had to take “decisive action” to end the problems caused by high levels of debt in Greece and elsewhere.

‘Trashed confidence’

Mr Balls said the eurozone had to make “tough decisions to get its house in order but not so much that it chokes off growth”, adding that Germany and the UK’s stance was at odds with that of US President Barack Obama and France’s new president Francois Hollande.

He told Sky News: “Someone’s got to persuade Germany that this will be a catastrophe for the world.”

He also said Mrs Merkel’s government had to “start letting the [European] Central Bank do their job” and start lending more money to stricken economies, such as Greece, Spain and Portugal.

Mr Balls also argued that the best way to grow the economy out of difficulty and increase tax revenues was to invest in, rather than cut funding to, the public sector. The government was having to borrow £150bn more than it intended as a result of its policies, he added.

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Alistair Darling: “It’s going to take a crisis, an absolute crisis, to make Europe’s leaders act”

Mr Darling, who was chancellor from 2007 to 2010, told BBC One’s Andrew Marr Show that the coalition’s reductions to the public sector budget were hindering growth.

He said: “The economy was growing in 2010, but now we are back in recession, something I didn’t think would happen.”

He added that the coalition, when it came to power, had “trashed confidence” by comparing the UK’s situation to that of Greece.

‘Apologise’ call

Mr Darling said the situation was “compounded by what’s going on in Europe” but there would be no improvement “unless we’ve got a credible plan for growth”

But, speaking for the government, Health Secretary Andrew Lansley said the government backed deficit reduction and urged Mr Darling to “apologise” for the role of the last Labour government in increasing national debt.

Meanwhile, writing in the Sunday Times, Chancellor George Osborne has said eurozone countries “must either stand behind their currency or face up to the prospect of Greek exit with all the risks that could involve”.

He added that: “Those countries with high deficits and low competitiveness need to carry on confronting their problems head-on.”

On Saturday, Mr Cameron said: “I think the German chancellor is absolutely right that every country needs to have in place strong plans for dealing with their deficits.”

He continued: “But clearly, just as Britain benefits from a strong government with a strong deficit reduction plan and strong banks but also an independent monetary policy giving us low interest rates, helping to push demand in the economy, so the eurozone, I believe, needs that approach as well.”

Article source: http://www.bbc.co.uk/news/uk-politics-18136731#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

18 May 2012
Last updated at 10:36 GMT

By Rajini Vaidyanathan
BBC News, Mumbai

The Ambanis say they moved in last September

The first pictures have been released showing the inside of what is believed to be the world’s most expensive house.

Built by India’s richest man Mukesh Ambani, the 27-storey building towers over swanky Altamount Road in Mumbai.

Named Antilia, after a mythical island, it cost more than $1bn, reports say.

Those who have visited it speak of helipads, a vast library, extravagant dining areas, opulent marble floors and even a snow room. Until now the family has remained silent on the residence.

“This is the first time I am talking about my home,” says Mr Ambani’s wife, Nita, in an interview published in the June issue of Vanity Fair magazine.

“There have been exaggerated reports in the media about it, I must say,” she adds.

Luxury hotel or ‘modern home with Indian heart’?

Much of the media speculation has centred on whether the family were actually living in the property.

Some newspaper reports suggested they had decided not to move in because the vastu shastra (an Indian form of architecture, akin to feng shui) on the building was not spiritually correct.

In the interview, conducted in November, Mrs Ambani confirms they took up residence last September.

“We moved in two months ago… and then it was going round that we haven’t moved in,” she told reporter James Reginato, who gained unprecedented access inside the building.

A photo published of one of the rooms shows floor-to-ceiling windows, and a seating arrangement which resembles a five-star hotel lobby. “It’s a modern home with an Indian heart,” says Mrs Ambani of her house.

Antilia is 27 storeys high, but as Mr Reginato writes, many of the floors are double or triple height, so the building rises to 570 feet, equivalent to a 40-storey building.

It also has a mutli-storey garage, a ballroom, a spa, a theatre, guest suites and a number of terraced gardens, he writes.

The Ambani house photos appear in Vanity Fair’s June edition

“We made our home right at the top because we wanted the sunlight… so it’s an elevated house on top of a garden,” said Mrs Ambani.

The design, she says, is based on the lotus and the sun, and is decorated using rare wood, marble, mother-of-pearl and crystal, crafted by Indian artisans.

As with many Indian households, it also has a Hindu prayer room, “getting my temple right was so important,” she said.

Reports suggest the house is worth more than $1bn, small change for Mukesh Ambani, who is worth more than $22bn according to Forbes magazine.

But despite this, the house’s construction has attracted some criticism from some who say it is far too grand for a city like Mumbai, where millions of people live in slums, and hundreds of thousands don’t have a roof over their head.

Article source: http://www.bbc.co.uk/news/world-asia-india-18113969#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

20 May 2012
Last updated at 06:09 GMT

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President Obama: “All the leaders here today agreed growth and jobs must be our top priority”

US President Barack Obama has said there is an “emerging consensus” that European countries must now focus on jobs and growth.

Speaking after the G8 summit of some of the world’s leading economies, he said the US was confident that Europe can meet its challenges.

President Obama said leaders had made good progress on a range of issues.

In addition the eurozone crisis, they discussed Iran, Afghanistan and global energy supply.

The leaders of France, Germany, the US, the UK, Italy, Japan, Canada and Russia met at Camp David in the US state of Maryland.

Obama said the meeting had been a success

In an earlier communique, G8 leaders committed themselves to promoting growth alongside fiscal responsibility and affirmed that they wanted Greece to stay in the eurozone.

The BBC’s Paul Adams at Camp David says both that communique and Mr Obama’s speech showed the US and French position had won out over Germany and Britain’s pro-austerity stance.

Energy worries

Leaders attending the summit addressed a number of issues, including energy security, climate change and the situation in Iran, Afghanistan and North Korea.

There was discussion of a broad release of national oil reserves to steady shaky energy markets when tough new sanctions on Iran’s oil exports kick in.

President Obama also announced that they had formed a new alliance to focus on food security with African leaders and the private sector.

The focus, however, remained on the crisis in the eurozone.

Speaking to reporters at the end of the summit, President Obama said: “As all of the leaders here today agree, growth and jobs must be our top priority.”

Emphasising that the United States had taken this approach to its own financial crisis, he said he was “confident” that European countries were moving in the right direction.

Continue reading the main story

“Start Quote

Mr Cameron and Mr Obama, outside the eurozone but in mortal peril if it spirals deeper in crisis, are demanding urgent, dramatic and speedy action. ”

End Quote

Mark Mardell North America editor

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• Read more from Mark

But he acknowledged that the European situation was “more complicated” than America’s. Earlier, the G8 leaders said “the right measures are not the same for each of us”.

In a statement, the group said it agreed “on the importance of a strong and cohesive eurozone for global stability and recovery, and we affirm our interest in Greece remaining in the eurozone while respecting its commitments”.

The global economic recovery was showing signs of progress, they said, but “significant headwinds persist”.

For its part, the EU welcomed the G8 communique with its dual emphasis on boosting growth and jobs.

European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said both growth-boosting measures and efforts to restore public finance were needed.

“Opposing the two is a false debate,” said they said in a joint statement.

Leaders will now turn their thoughts to Afghanistan, as President Obama and other heads of government travel to Chicago for a Nato summit on Sunday.

Article source: http://www.bbc.co.uk/news/world-us-canada-18135042#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

The leaders of the G8 group of the world’s most powerful economies say they want debt-stricken Greece to remain in the eurozone.

In their summit communique, G8 leaders also committed themselves to promoting growth alongside fiscal responsibility.

However, the leaders acknowledged “the right measures are not the same for each of us”.

Greece’s possible exit from the eurozone was high on the agenda, following inconclusive elections there.

Norman Smith reports.

Article source: http://www.bbc.co.uk/news/world-18133207#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa