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By Jan Strupczewski and Martin Santa BRUSSELS (Reuters) - European Union governments and parliamentarians will try to reach a compromise this week on how to wind down failing banks, in marathon talks intended to settle who decides to close banks and who picks up the bill. The banking union, and the thorough clean-up of banks' books that will accompany it, is meant to restore banks' confidence in one another and boost lending to other businesses and households. New lending has been throttled by banks' efforts to raise capital and reduce the bad loans that proliferated in the recession triggered by the global financial crisis and deepened by the euro zone's own sovereign debt crisis. Policymakers agreed last year that the European Central Bank (ECB) will be the single supervisor for all euro zone banks and the ECB will take on its new responsibilities from November.
By Sui-Lee Wee and Li Hui BEIJING (Reuters) - China has curtailed the power of the ruling Communist Party's Political and Legal Committee, a secretive body overseeing the security services, to interfere in most legal cases, scholars with knowledge of the situation said - a significant reform at a time of public discontent over miscarriages of justice. Part of a package of legal reforms, the move signals a willingness by Xi's government to reform its court system as long as it doesn't threaten the party's overall control. China's highest court, the Supreme People's Court, will deliver its work report to parliament on Monday, which could detail some of these reforms. NO CONFERRING Chen Guangzhong, who took part in discussions with officials on reforming the criminal law system after the 18th Party Congress in November 2012, said he has seen an internal document saying "there can be no coordination allowed on cases".
By Martin Dokoupil DUBAI (Reuters) - Qatar will likely face higher labour costs as a result of publicity about deaths of migrant construction workers building the infrastructure for the 2022 World Cup football tournament, the International Monetary Fund said. Britain's Guardian newspaper reported in September that dozens of Nepali workers had died during the summer in Qatar and that labourers were not given enough food and water. Qatar, which has denied the Guardian's findings, has seen an increasing influx of foreigners, now estimated at 1.8 million, with its population rising 10 percent in 2013. "Working conditions of some construction workers and domestic help has made global headlines and could affect the availability and cost of hiring new workers in the future," the Fund said after completing annual consultations with Qatar.
Britain's Co-operative Group is set to pay up to 3.66 million pounds in pay and benefits to its chief executive this year and hike the salaries of other senior executives, the Observer newspaper reported on Sunday. Citing documents prepared for the group's remuneration and appointments committee, the Observer said big payouts for Chief Executive Euan Sutherland and his fellow directors are based on comparisons with similar sized listed companies. According to the paper, the documents say the salary packages for directors are necessary because of the problems faced by the group amount to an "executive agenda (that) is possibly the most complex one facing a large business in the country today." The Observer said that under the latest pay proposals, Sutherland will be paid a base salary of 1.5 million pounds this year, plus a 1.5 million pounds retention payment. Richard Pennycook, Chief Operating officer will receive a 900,000 pounds salary and a further 900,000 retention payment while six other executives will be paid between 500,000 pounds and 650,000 pounds, according to the Observer.
By William Schomberg and William James LONDON (Reuters) - Mark Carney faces probably his toughest questioning so far as Bank of England governor next week when lawmakers will seize on a foreign exchange scandal to press their demands for tighter oversight of the central bank. Carney arrived from Canada last July as an outsider with a mandate to shake up the 320 year-old institution, from monetary policy to its relationship with the powerful banks of the City of London. A group of influential members of parliament wants Carney to change the way the Bank polices itself too. Their long-standing frustrations with what they say is the Bank's outdated governance system broke out again last week when the Bank suspended an official amid an internal review into whether Bank staff turned a blind eye to possible manipulation of key rates by foreign exchange traders.
The Bank of England may appoint a judge, academic or senior financial industry executive to run an independent inquiry into its actions in relation to allegations it allowed manipulation of the foreign exchange market, the Sunday Telegraph reported. The bank has already appointed the law firm Travers Smith to prepare a report on the affair which will be made public. However, the Sunday Telegraph said Travers Smith is on a fact finding exercise rather than an inquiry. The Bank has suspended an employee as part of an internal probe into what Bank officials knew about alleged manipulation of key currency rates by traders.
By Andrei Khalip LISBON (Reuters) - Portugal's international bailout is expected to end in mid-May. That won't mean the end of hardship for the Portuguese. To avoid a repeat of the 78 billion euro (64 billion pounds) financial rescue agreed in May 2011 with the European Union and the International Monetary Fund, Lisbon cannot let up on shrinking its budget gap and trimming a huge sovereign debt. That means it will be easier than in the past couple of years to meet goals imposed on Portugal by existing bailout terms and European treaties between now and 2017. Still, with a population intent on making ends meet - and a general election due in the middle of next year - assurances from Prime Minister Pedro Passos Coelho often fall on deaf ears.
By Maayan Lubell BEIT SHEMESH, Israel (Reuters) - When this Israeli town goes to the polls on Tuesday, the vote may decide more than a bitter mayoral race. Municipal votes rarely raise passions in Israel, but this one - a rerun of an election last October - is different. "This election is our last chance to save Beit Shemesh," said Noa Kedmi, 28, who has lived in the town for eight years. The town 35 km (22 miles) west of Jerusalem gained notoriety in 2011 after an eight-year-old girl from a more liberal religious community was spat at by ultra-Orthodox men who deemed her clothes immodest.
By Ori Lewis JERUSALEM (Reuters) - Israeli Prime Benjamin Netanyahu said any peace deal with the Palestinians would take at least another year to negotiate should both sides accept U.S.-proposed principles to keep talks going. In an Israel Radio interview broadcast on Sunday, Netanyahu reiterated that he regarded guidelines that U.S. Secretary of State John Kerry is drafting for a future deal as an "American document of American positions". Such a definition could give Netanyahu leeway to register reservations that could discourage staunch supporters of Jewish settlement in occupied land where Palestinians want to make their state from bolting his coalition. It will take us at least a year to exhaust these negotiations but I can't say that the Palestinians will accept this document, and I also have not seen it yet," he said.
By Drazen Jorgic and Philippa Croome KAMPALA (Reuters) - With a World Bank scholarship and top grades in the first year of her masters degree in agriculture, 27-year-old Cleo Kambugu should be well on the road to her goal of an academic career in Uganda. Instead, she's working out how to leave after the passing of a law that toughens prison sentences for homosexuality and a tabloid campaign to "out" gays. "There is totally no hope right now," said Kambugu, still legally a man despite a sex change in the last year that is not recognised by Uganda, a nation that now has some of the toughest anti-gay laws on a continent where 37 states ban homosexuality. The bill, signed into law by President Yoweri Museveni on February 24, has forced embattled gays deeper into the shadows, by threatening life in jail for "aggravated homosexuality" and a seven-year term for "aiding and abetting homosexuality".