WASHINGTON - U.S. financial reforms

Acknowledging gaps in financial oversight exposed by the subprime mortgage crisis, Treasury Secretary Henry Paulson is proposing a dramatic restructuring of government supervision of the U.S. financial system.

SOUNDBITE: U.S. Treasury Secretary Henry Paulson saying (English):

"We are focused on seeing these recommendations implemented, to improve the workings of our financial markets. But we will not seek to implement them on a pace or in a manner that interferes with our first priority of working through this current period of market difficulty."

Paulson's proposal would allow the Federal Reserve to conduct on-site examinations of large non-bank financial firms that are treated differently than banks because they do not take deposits. Over time, the Fed would eventually take on the job of ensuring overall market stability.

SOUNDBITE: U.S. Treasury Secretary Henry Paulson saying (English):

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to ten years. I am suggesting that we should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change."

The treasury secretary also called for the government to set a national standard for mortgage originators and urged the creation of a federal commission that would evaluate state licensing for the people who give mortgage loans. Despite the sweeping proposals, analysts say very little is likely to happen this year.

Jon Decker, Reuters.

o·ver·sight n. - watchful care or management; supervision.
subprime - (of a credit customer) having an increased risk and thus charged a greater rate of interest
mort·gage n. a temporary, conditional pledge of property to a creditor as security for performance of an obligation or repayment of a debt.
pace

1. A step made in walking; a stride.

2. A unit of length equal to 30 inches (0.76 meter).
Over time
1 During the next period of time
2 In the future

loan n.

a. Something lent for temporary use.

b. A sum of money lent at interest.

sweep·ing

adj.

1. Having wide-ranging influence or effect: sweeping changes.

2. Moving in or as if in a wide curve: a sweeping gesture; a sweeping glance.

3. Indiscriminate; wholesale: sweeping generalizations.

4. Overwhelming; complete: a sweeping victory.

BRUSSELS - European inflation surges

Inflation in the 15 country Eurozone region jumped to record highs this month with new data showing a year-on-year rise to 3.5 percent.

That's up from 3.3 percent in February. Rising food and energy prices fuelled the increase, as oil prices steamed higher.

The acceleration is higher-than-forecast and reinforces expectations that the inflation-focused European Central Bank will not cut its interest rate soon.

The ECB wants inflation to stay below 2 percent. But with slow growth and falling confidence in the economy, markets expect the central bank to cut interest rates from the current 4 percent later this year.

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The world's second-largest wine and spirits company, France's Pernod Ricard has bought Sweden's Vin & Spirit group, the makers of Absolut vodka, for 5.63 billion euros (8.87 billion U.S. dollars).

Pernod Ricard made the best offer in the hotly contested auction, giving it control of one of the biggest and fastest-growing spirits brands.

The sale of the former state-owned monopoly is Sweden's largest-ever push to privatise government assets. Stockholm said the deal was a victory for taxpayers.

(SOUNDBITE) (Swedish) MATS ODELL, MINISTER FOR LOCAL GOVERNMENT AND FINANCIAL MARKETS SAYING:

"It's a very good price for the company, it's a good price for the public economy, as well for the company and its employees"

But traders disagreed. They said Pernod had overpaid and its stock fell to a two-month low wiping almost 700 million euros off the company's market value.

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UK insurer Friends Provident has rejected a 3-and-a-half billion pounds (7 billion dollar) cash takeover offer from U.S. private equity firm JC Flowers.

Friends said the bid significantly undervalued the company and received the 150 pence per-share takeover offer last Thursday.

JC Flowers indicated the offer would be reduced in the event that Friends paid shareholders the 2007 final dividend of 5.3p a share.

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Meanwhile in London, shares of Friends Provident gained thanks to the bid. However a number of heavyweight shares on the FTSE 100 lost steam. Vodafone along with British Airways were among the heaviest losers after broker downgrades. Price of oil turned higher after losing ground earlier in the session. The lull in fighting in Iraq's southern city of Basra, key to the country's production and exports, eased fears of potential supply disruption.///

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Inditex, Europe's biggest clothing retailer and owner of the Zara chain has reported a 25 percent jump in 2007 net profit. The Spanish-based company's 1-and-a-quarter billion euro profit outperformed analyst expectations. Analysts credited a weaker dollar and strict cost control for that.

The retailer said this year had got off to a sparkling start and shrugged off fears of an economic downturn in Spain.

SOUNDBITE (English) Inditex Director for Capital Markets, Marcos Lopez saying,

''So basically I believe that the business model we operate is the best tool we have to again to find our place and create our space in a probably more compelling market.''

Nearly 40 percent of Inditex's sales come from Spain where slowing economic growth is eating into retail sales. Inditex shares have fallen over 15 percent since the beginning of the year.

Michelle Carlile-Alkhouri, Reuters

steamed - aroused to impatience or anger; "made an irritated gesture"
as·set n. - a useful or valuable quality, person, or thing; an advantage or resource: proved herself an asset to the company.
wipe tr.v. wiped, wip·ing, wipes
1.a. To subject to light rubbing or friction, as with a cloth or paper, in order to clean or dry.

b. To clean or dry by rubbing: wiped my feet before I went inside.
gain

v. gained, gain·ing, gains

v.tr. To attain in competition or struggle; win: gained a decisive victory; gained control of the company.
bid - n.1. a. An offer or proposal of a price

lull n.
1. A relatively calm interval, as in a storm.

2. An interval of lessened activity: a lull in sales.

get off - To start, as on a trip; leave.

spark v. sparked, spark·ing, sparks

v.intr.

1. To give off sparks.

2. To give an enthusiastic response.

3. To operate correctly. Used of the ignition system of an internal-combustion engine.

shrug off - To minimize the importance of: shrugged off the defeat and talked about tonight's game.

Violence mars annual protest

Sirens blare on the streets of Santiago one day before the anniversary of the Day of the Young Combatant.

Clashes broke out between angry students and the police-who retaliated with tear gas and water cannons.

Protesters said they were demonstrating against Chile's education system that they claimed favored the wealthy and left out the poor.

Local media said at least 30 people were arrested.

The anniversary is a typically violent event every year and it marks the start of annual anti-government protests in Chile.

The Chilean government has deployed additional police forces to control crowds on Saturday- when the actual anniversary will be observed and the riots are expected to break out in full force.

Pavithra George, Reuters


deploy - place troops or weapons in battle formation

Chelsea Clinton refuses question

On the campaign stump for her mother, democratic presidential candidate Hillary Clinton, Chelsea Clinton gave a sharp response to a question related to the Monica Lewinsky scandal.

She was asked if she thought her mother's credibility was damaged by the scandal:

SOUNDBITE (English) CHELSEA CLINTON, DAUGHTER OF U.S. PRESIDENTIAL CANDIDATE HILLARY CLINTON, RESPONDING TO A STUDENT'S QUESTION ABOUT HILLARY CLINTON'S HANDLING OF BILL CLINTON'S RELATIONSHIP WITH MONICA LEWINSKY:

"Wow, you're the first person actually that's ever asked me that question in the, I don't know, maybe 70 college campuses that I've now been to and I do not think that's any of your business."

Chelsea was speaking at Butler University in Indiana, part of multi-college tour in support of her mother's campaign.

Former President Bill Clinton admitted to having a sexual relationship with intern Monica Lewinsky which led to impeachment hearings and a damaged legacy.

Lindsay Claiborn, Reuters.


stump - a platform raised above the surrounding level to give prominence to the person on it

Taiwan stocks rally

A boost for Taiwan stocks on Monday as investors took cheer that a newly elected president will boost trade ties with mainland china.

Taipei's main TAIEX jumped 4 percent, at one (point) staging its biggest one day rally in more than 7 years.

Stock investor Chen Chih-yuan:

(SOUNDBITE) (Mandarin with English translation) STOCK INVESTOR CHEN CHIH-YUAN SAYING:

"Basically, various aspects of Taiwan's economy are now doing well. With a new direction from our next leadership, the opening up to Taiwan to the world will definitely boost the stock market."

The landslide victory of KMT party candidate Ma Ying-jeou over the weekend, raised hopes that Taiwan's sagging economy will receive a fresh boost.

China Airlines was among the top performers. Investors hoping Ma will fulfill a campaign pledge to start direct flights to mainland China.

Manufacturers such as chip maker TSMC also stand to benefit from better Taiwan-mainland ties. While firms already have some business in the mainland, there have been investment limitations.

Kevin Lin of Marbo Mutual fund.

(SOUNDBITE) (Mandarin with English translation) VICE-PRESIDENT OF MARBO MUTUAL FUND, KEVIN LIN, SAYING:

"We feel that in the short term the stock market will be affected and grow in strength. The main reason is that we have now a new leadership that is adopting a gentler approach towards cross-strait ties. So, this will definitely help to improve our ties with mainland China."

A new (president)(presidency) has certainly injected (confidence)(excitement) into the market here. But over the longer worries about the strength of the global economy with manufacturers and exporters a key (part) of the domestic economy.

Tara Joseph-Hui, Reuters, Taipei

landslide - an overwhelming electoral victory; "Roosevelt defeated Hoover in a landslide"

sagging - hanging down (as from exhaustion or weakness)
sag

v. sagged, sag·ging, sags

v.intr.

1. To sink, droop, or settle from pressure or weight.

2. To lose vigor, firmness, or resilience: My spirits sagged after I had been rejected for the job.

3. To decline, as in value or price: Stock prices sagged after a short rally.

World's most expensive violin

In one of the oldest buildings in Moscow, a gathering of Russia's arts and political elite.

For this recital it's not a case of what's being played or who is playing it, but the value of the instrument producing the sound.

Carefully kept beneath this red cloth is the world's most expensive violin, worth $3.9 million U.S. dollars.

The instrument was recently bought at auction by Russian businessman Maxim Viktorov.

He owns an extensive collection of the instruments, and says they're more than just show items.

SOUNDBITE: Maxim Viktorov, Russian businessman and owner of the Giuseppe Guarneri violin saying (Russian):

"I have a certain number of instruments which I often give to violinists even for permanent use. I usually give them to talented musicians who need a good instrument to perform."

The violin was made in 1741 by master violin maker Giuseppe Guarneri.

For its first public performance in more than 70 years, the instrument was entrusted to Pinchas Zukerman.

SOUNDBITE: Israeli violinist and conductor Pinchas Zukerman saying (English):

"Maxim has a vision. He has a vision to bring back the standard and the quality that Russia had many years ago. (This is his way of expressing his gratitude to being Russian, to bringing back to young people, to show the young people what standard is, what good instruments are and I congratulate him for that.)"

This performance was viewed by the violin's owner as a test.

There are now likely to be more performances, to larger audiences.

Andrew Potter, Reuters

gath·er·ing n.

1.a. The action of one that gathers.

b. That which is gathered or amassed; a collection or accumulation.

2. An assembly of persons; a meeting.

3. The collecting of food that grows wild, such as berries, roots, and grains.

be·neath adv.

1. In a lower place; below.

2. Underneath.

prep.

1.a. Lower than; below: a drawer beneath a cabinet.

b. To or into a lower position than: moved the picture beneath the light.

2. Covered or concealed by: The earth lay beneath a blanket of snow.

3. Under the force, control, or influence of.

4.a. Lower than, as in rank or station.
b. Unworthy of; unbefitting: It was beneath me to beg.

en·trust tr.v. en·trust·ed, en·trust·ing, en·trusts

1. To give over (something) to another for care, protection, or performance: "He still has the aura of the priest to whom you would entrust your darkest secrets" James Carroll.

2. To give as a trust to (someone): entrusted his aides with the task. See Synonyms at commit.

Iraq: Five years later

Five years on the fight is still raging in Iraq - but this response is a charm offensive.

This is British troops just north of their base at Basra Airport still trying to win hearts and minds.

Britain has been accused of abandoning Iraq's second city after sustained attacks last year - but a meeting with a tribal elder gives the RAF Regiment's Flight Lieutenant Jules Weekes a chance to re-engage.

The project is boosting the local economy, providing badly needed jobs and a glimmer of hope for Iraq's young.

SOUNDBITE: Mohammed, builder saying (Arabic):

"Projects like this are really important because the children will be able to go to school and give them a better future and we're very happy about it."

Engaging with what the military calls 'key leaders,' or influential locals, can produce dividends in more ways than one.

SOUNDBITE: Flight Lieutenant Jules Weekes, RAF Regiment saying (English):

"They are generally happy to see us. They are asking obviously for more ways in which we can help them and their communities and then in addition to that we ask them what their security situation is like and whether they have had any interaction with militant or Islamic groups."

As President Bush marked the fifth anniversary of the war with a swagger, a British military spokesman was more reserved.

Major Tom Holloway said even if troops were still in Basra in another five years, it would not amount to failure.

SOUNDBITE: Major Tom Holloway, British military spokesman Basra saying (English):

"If we are here in another five years our posture will be entirely different I mean you just have to look at campaigns in the Balkans where our posture throughout our Balkan operations changed from one end to the other. In Northern Ireland the same detail. So, military operations are constantly under review to match the situations on the ground."

The trouble is here Saddam Hussein may be gone but little else has changed.

These people are Marsh Arabs. They survived on the reservoirs and marshes that provided their livelihoods and their water. Saddam Hussein decided to blow up the dams which retained that water and destroyed not only the community but their livelihoods too. International money paying for the construction of the school behind me but there are 700 people in this village and they still don't have a clean water supply.

Five years to the day after invading Iraq, Coalition forces still have a fight on their hands - battling grinding poverty as well as a bloody insurgency - and a lack of basic needs.

Stuart McDill, Reuters, Basra.

raging - characterized by violent and forceful activity or movement; very intense;
sus·tain tr.v. sus·tained, sus·tain·ing, sus·tains - to keep in existence; maintain.

glim·mer n. a dim or intermittent flicker or flash of light.
swag·ger v. swag·gered, swag·ger·ing, swag·gers

v.intr. To walk or conduct oneself with an insolent or arrogant air; strut.
live·li·hood n. Means of support; subsistence.
grindv. ground (ground), grind·ing, grinds

v.tr. to crush, pulverize, or reduce to powder by friction, especially by rubbing between two hard surfaces: grind wheat into flour.

Tabloids make unprecedented apology

The mystery of Madeleine McCann's disappearance is back on the front pages of British newspapers.

But this is no ordinary story - the Daily Express and Daily Star are carrying unprecedented front page apologies to Madeleine's parents.

Kate and Gerry took legal action after numerous defamatory articles.

Their lawyer told the court they contained suggestions that they killed Madeleine, were involved in wife-swapping and sold their daughter to pay off their debts.

The newspapers admitted the allegations - the family's spokesman gave this reaction.

SOUNDBITE (English) CLARENCE MITCHELL, SPOKESMAN FOR GERRY AND KATE MCCANN, SAYING:

"We are pleased that Express Newspapers have today admitted the utter falsity of the numerous grotesque and grossly defamatory allegations that their titles published about us on a sustained basis over many months."

Express Newspapers - which published both tabloids - said it "regretted publishing these extremely serious, yet baseless allegations,"

It agreed to pay 550, 000 pounds in damages, that's 1.1 million dollars, to the Find Madeleine Fund.

SOUNDBITE (English) CLARENCE MITCHELL, SPOKESMAN FOR GERRY AND KATE MCCANN, SAYING:

"Express Newspapers, rightly acknowledge that we are innocent of all allegations that we may have been involved in Madeleine's abduction and we would like to reiterate that there is absolutely no evidence that Madeleine is dead or has been seriously harmed."

Madeleine McCann went missing during a family holiday in the Algarve last May.

The three-year-old's disappearance sparked a massive international search.

The McCanns believe she was abducted from a holiday apartment while they dined with friends nearby.

But despite a string of reported possible sightings she's never been found.


SOUNDBITE (English) CLARENCE MITCHELL, SPOKESMAN FOR GERRY AND KATE MCCANN, SAYING:

"We embarked on this course of action reluctantly, indeed with a heavy heart, as we did not wish the pursuit of it to become a distraction from our sole aim - finding Madeleine."

The McCanns remain official suspects in the case.

But they hope that status will soon be lifted - until she's found they say the search for Madeleine never will.

Sonia Legg, Reuters.

ut·ter tr.v. ut·tered, ut·ter·ing, ut·ters

1. To send forth with the voice: uttered a cry.

2. To articulate (words); pronounce or speak. See Synonyms at vent¹.

3. Law To put (counterfeit money, for example) into circulation.

4. To publish (a book, for example).

sus·tain tr.v. sus·tained, sus·tain·ing, sus·tains - to keep in existence; maintain.
re·gret v. re·gret·ted, re·gret·ting, re·grets

v.tr.

1. To feel sorry, disappointed, or distressed about.

2. To remember with a feeling of loss or sorrow; mourn.

v.intr. To feel regret.

n.

1. A sense of loss and longing for someone or something gone.

2. A feeling of disappointment or distress about something that one wishes could be different.
ab·duct tr.v. ab·duct·ed, ab·duct·ing, ab·ducts - to carry off by force; kidnap.

spark v. sparked, spark·ing, sparks

v.intr.

1. To give off sparks.

2. To give an enthusiastic response.

3. To operate correctly. Used of the ignition system of an internal-combustion engine.

v.tr.

1. To set in motion; activate: The incident sparked a controversy.

2. To rouse to action; spur: A cheering crowd sparked the runner to triumph.
pur·suit n.

1. The act or an instance of chasing or pursuing.

2. The act of striving: the pursuit of higher education.

3. An activity, such as a vocation or hobby, engaged in regularly.

sole adj.

1. Being the only one: the sole survivor of the crash.

2. Of or relating to only one individual or group; exclusive: The court has the sole right to decide.

3. Law Single; unmarried.

Israel taps into water business

With two-thirds of their country desert, Israelis appreciate the preciousness of water.

Unsurprisingly, perhaps, Israel has now emerged as a world leader in water recycling and water-saving technolgy.

The government says that 75 percent of waste water in Israel is reused.

And continued innovation could see that figure rise further thanks to companies like Aqwise.

It's developed a waste water recycling system which uses millions of small, specially designed plastic nuggets.

They provide an ideal environment to breed bacteria, breaking down harmful organic waste in treatment plants.

Yigal Master is from Aqwise.

(SOUNDBITE) (English) YIGAL MASTER, SENIOR RESEARCH AND DEVELOPMENT ENGINEER AT AQWISE, SAYING:

"These plastic things - they have a very high surface area, upon which the bacteria can grow and multiply. And the addition of these plastic carriers into an existing waste water treatment plant significantly increases the treatment facility of the plant."

And while companies like Aqwise harness the natural processes of bacteria, others are employing the natural power of light.

Based outside Jerusalem, the company Atlantium creates ultra-violet light technology which it says effectively and economically disinfects water.

Uri Levy is one of the company's scientists.

(SOUNDBITE) (English) URI LEVY, ATLANTIUM VICE-PRESIDENT OF PHYSICS AND ELECTRO-OPTICS, SAYING:

"Counter to other disinfection techniques like using ozone or using chlorine, this is very clean because it's basically using light - light that after being absorbed by the microbes leaves no byproducts."

The importance of water is engraved in Israel's 60-year history.

The country's first prime minister, David Ben-Gurion, declared that the state's future depended on "making the desert bloom".

His call has been well and truly heeded, so much so that annual revenues from Israel's water industry have hit one billion dollars.

But it's not just Israel's economy which stands to benefit.

With water scarcity threatening impoverished communities globally, Israel's expertise could yet save lives as well as money.

Darcy Lambton, Reuters.