Obama, Boehner talk and exchange new offers on “fiscal cliff”

WASHINGTON (Reuters) – Negotiations to avert the “fiscal cliff” ahead of a year-end deadline intensified as President Barack Obama and U.S. House of Representatives Speaker John Boehner spoke by phone on Tuesday after exchanging new proposals.

It was latest sign of possible progress in efforts to avoid the automatic steep tax hikes and spending cuts set for January 1 unless Congress intervenes.

White House and congressional aides confirmed that Obama gave Boehner a revised offer in talks on Monday, and the Republican responded with a counterproposal on Tuesday.

In his proposal, Obama slightly reduced his demand for the amount of new tax revenue he was seeking to $ 1.4 trillion from $ 1.6 trillion over 10 years, congressional aides said. Boehner was no happier with that number, an aide said.

After getting the new offer, Boehner took to the House floor on Tuesday to demand that Obama give more details on the spending cuts the White House would accept in any final deal.

“We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach that he promised the American people,” Boehner said.

The White House fired back that the administration had submitted extensive proposals to reduce spending but Republicans had not offered specifics on increasing revenues.

“There is a deal out there that’s possible,” White House spokesman Jay Carney told reporters. It could include reduced spending, more revenues and tax reform as long as Republicans accepted higher tax rates on the wealthiest Americans, he said.

“We do believe the parameters of a compromise are pretty clear,” Carney said.

In an interview with ABC News, Obama said he expected a deal before the end of the year.

“I’m pretty confident that Republicans would not hold middle-class taxes hostage to trying to protect tax cuts for high-income individuals,” Obama said in the interview. “I don’t think they’ll do that.”

Obama and Boehner have each proposed cutting deficits by more than $ 4 trillion over the next 10 years, but they differ on how to get there. Economists have warned that failure to strike a deal could send the economy back into a recession.

Obama and Democrats demand that tax rates rise for the wealthiest 2 percent of Americans. Republicans want existing lower rates continued for all brackets and prefer to raise more revenue by eliminating tax loopholes and reducing deductions.

Republicans also want deeper spending cuts than those sought by Obama and fellow Democrats, particularly on social entitlement programs like the government-funded Medicare and Medicaid healthcare plans.

“I’m an optimist. I’m hopeful we can reach an agreement,” Boehner said during his speech on the House floor.

But Senate Democratic leader Harry Reid said it would be difficult to reach an agreement before Christmas.

“Until we hear something from Republicans, there’s nothing to draft,” Reid told reporters, referring to writing legislation based on a deal. “It’s going to be extremely difficult to get it done before Christmas.”

Boehner spokesman Michael Steel said the counteroffer from Boehner would achieve tax and entitlement reforms that would solve the looming debt crisis, but he offered no more details.

Stocks rose on Tuesday, with the S&P 500 reaching its highest close since Election Day. Markets endured a sharp selloff after the November 6 re-election of Obama, as investors focused on the fiscal cliff concerns.

“I guess in our own dysfunctional way, there is progress,” said Frank Davis, director of sales and trading at LEK Securities in New York. “Since conversations are occurring, it clarifies at least they are taking some action. My personal gut is they’ll jostle this into the holiday week and try to do a last-minute push.”

FRAMEWORK FOR A DEAL

While senior figures from both parties caution they are far from a deal, a softening of partisan rhetoric in recent days and the increased frequency of talks has created speculation that negotiations are going well.

If there is a fiscal cliff deal, congressional leaders will have to decide the most efficient way to move the legislation forward. Aides said those decisions had not been made as negotiators are still focused on the elements of a possible deal.

The most frequently discussed scenario involves Democrats getting the higher rates on the top earners in exchange for significant concessions on reducing costs in entitlement programs. The two parties could then work together next year on comprehensive tax reform aimed at creating more revenues, in part by eliminating some tax breaks.

Adding pressure on Republicans to give some ground on taxes, a group of high-profile chief executives called for a deal that could include raising tax rates on the wealthiest Americans.

The group had previously backed extending tax cuts for all Americans as a stopgap solution.

“We recognize that part of that solution has to be tax increases,” said David Cote, the chief executive of Honeywell who has been active in Washington on fiscal issues. About 160 CEOs signed the letter under the umbrella of the Business Roundtable, a non-partisan group of U.S. chief executives.

Complicating the talks is the looming need for an increase in U.S. borrowing authority that Obama wants before Congress wraps up for the year. Without the authority, the government will hit its $ 16.4 trillion borrowing limit by year’s end and run out of steps to stave off default by mid-February.

Obama has asked for the power to raise U.S. borrowing authority without legislation from Congress in hopes of avoiding another confrontation with Republicans like the 2011 showdown that led to an embarrassing downgrade of the U.S. credit rating.

Also in the mix is a payroll tax “holiday” set to expire, which, if not extended, will quickly reduce the take-home pay of a large segment of the U.S. workforce.

The holiday, now in its second year, has been providing workers with an average of about $ 1,000 a year in extra cash. Significant divisions remain on the payroll tax question in part because it funds the Social Security retirement program.

(Additional reporting by Rachelle Younglai, Kim Dixon, Steve Holland and Matt Spetalnick; Writing by John Whitesides; Editing by Alistair Bell and Eric Beech)

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At least 1 dead in Oregon mall shooting

At least one person is dead and several people are wounded this evening after a masked shooter opened fire at Clackamas Town Center, a mall in suburban Portland, Ore.

Police said the shooter had been "neutralized," but would not say whether the person was alive or dead.

"This is no longer an active shooter," Clackamas County Sheriff's Office spokesman Lt. James Rhodes said. "I believe the shooter has been neutralized and we are securing the mall, securing the scene and treating the wounded."

There was not an exact count of those killed or wounded, he said.

"We believe there's at least one deceased and maybe more," he said. "We know there are multiple wounded. Lifeline has landed to treat at least one of those wounded and we're set up to treat them as we find them as we search the mall."

Hundreds of people were evacuated from the busy mall full of holiday shoppers after the shooting began at around 3:30 p.m. PT.

Witnesses described seeing a gunman who looked like a teenager with a white hockey mask, wearing what was believed to be a black, bulletproof vest and carrying an assault rifle.

The person entered the mall through a Macy's store, ran through the upper level of Macy's and opened fire near the mall food court, firing multiple shots, one right after another, with what is believed to be a black, semiautomatic rifle, according to witness reports.

Witnesses described the shooter as being on a mission and determined, looking straight ahead.

Those interviewed said that Macy's shoppers and store employees huddled in a dressing room to avoid being found.

Evan Walters told ABC News Radio that he was locked in a store for his safety and he saw two people shot and heard multiple gunshots.

"It was over 20, and it was kind of surreal because we hear pops and loud noises," he said. "We're next to the food court here and we hear pops and loud noises all the time, but we don't -- nothing like that. It was very definite gunshots."

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Egypt army given temporary power to arrest civilians

CAIRO (Reuters) – Egypt’s Islamist president has given the army temporary power to arrest civilians during a constitutional referendum he is determined to push through despite the risk of bloodshed between his supporters and opponents accusing him of a power grab.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and their critics besieging Mohamed Mursi’s graffiti-daubed presidential palace. Both sides plan mass rallies on Tuesday.

The elite Republican Guard has yet to use force to keep protesters away from the palace, which it ringed with tanks, barbed wire and concrete barricades after last week’s violence.

Mursi, bruised by calls for his downfall, has rescinded a November 22 decree giving him wide powers but is going ahead with a referendum on Saturday on a constitution seen by his supporters as a triumph for democracy and by many liberals as a betrayal.

A decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians and refer them to prosecutors until the announcement of the results of the referendum, which the protesters want cancelled.

Despite its limited nature, the edict will revive memories of Hosni Mubarak’s emergency law, also introduced as a temporary expedient, under which military or state security courts tried thousands of political dissidents and Islamist militants.

But a military source stressed that the measure introduced by a civilian government would have a short shelf-life.

“The latest law giving the armed forces the right to arrest anyone involved in illegal actions such as burning buildings or damaging public sites is to ensure security during the referendum only,” the military source said.

Presidential spokesman Yasser Ali said the committee overseeing the vote had requested the army’s assistance.

“The armed forces will work within a legal framework to secure the referendum and will return (to barracks) as soon as the referendum is over,” Ali said.

Protests and violence have racked Egypt since Mursi decreed himself extraordinary powers he said were needed to speed up a troubled transition since Mubarak’s fall 22 months ago.

The Muslim Brotherhood has voiced anger at the Interior Ministry’s failure to prevent protesters setting fire to its headquarters in Cairo and 28 of its offices elsewhere.

Critics say the draft law puts Egypt in a religious straitjacket. Whatever the outcome of the referendum, the crisis has polarized the country and presages more instability at a time when Mursi is trying to steady a fragile economy.

On Monday, he suspended planned tax increases only hours after the measures had been formally decreed, casting doubts on the government’s ability to push through tough economic reforms that form part of a proposed $ 4.8 billion IMF loan agreement.

“VIOLENT CONFRONTATION”

Rejecting the referendum plan, opposition groups have called for mass protests on Tuesday, saying Mursi’s eagerness to push the constitution through could lead to “violent confrontation”.

Islamists have urged their followers to turn out “in millions” the same day in a show of support for the president and for a referendum they feel sure of winning with their loyal base and perhaps with the votes of Egyptians weary of turmoil.

The opposition National Salvation Front, led by liberals such as Mohamed ElBaradei and Amr Moussa, as well as leftist firebrand Hamdeen Sabahy, has yet to call directly for a boycott of the referendum or to urge their supporters to vote “no”.

Instead it is contesting the legitimacy of the vote and of the whole process by which the constitution was drafted in an Islamist-led assembly from which their representatives withdrew.

The opposition says the document fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill-equipped to deal with a looming economic crisis.

“Inevitability of referendum deepens divisions,” was the headline in Al-Gomhuriya newspaper on Monday. Al Ahram daily wrote: “Political forces split over referendum and new decree.”

Mursi issued another decree on Saturday to supersede his November 22 measure putting his own decisions beyond legal challenge until a new constitution and parliament are in place.

While he gave up extra powers as a sop to his opponents, the decisions already taken under them, such as the dismissal of a prosecutor-general appointed by Mubarak, remain intact.

“UNWELCOME” CHOICE

Lamia Kamel, a spokeswoman for former Arab League chief Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a “no” vote.

“Both paths are unwelcome because they really don’t want the referendum at all,” she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

A spokeswoman for ElBaradei, former head of the U.N. nuclear watchdog, said: “We do not acknowledge the referendum. The aim is to change the decision and postpone it.”

Mahmoud Ghozlan, the Muslim Brotherhood’s spokesman, said the opposition could stage protests, but should keep the peace.

“They are free to boycott, participate or say no, they can do what they want. The important thing is that it remains in a peaceful context to preserve the country’s safety and security.”

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a “dark tunnel”.

A military source said the declaration read on state media did not herald a move by the army to retake control of Egypt, which it relinquished in June after managing the transition from Mubarak’s 30 years of military-backed one-man rule.

The draft constitution sets up a national defense council, in which generals will form a majority, and gives civilians some scrutiny over the army – although not enough for critics.

In August Mursi stripped the generals of sweeping powers they had grabbed when he was elected two months earlier, but has since repeatedly paid tribute to the military in public.

So far the army and police have taken a relatively passive role in the protests roiling the most populous Arab nation.

(Additional reporting by Edmund Blair and Yasmine Saleh; editing by Philippa Fletcher)

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The Wii U uses less than half the power of the Xbox 360 and the PS3

Nintendo’s (NTDOY) Wii prided itself for being a super energy-efficient console that ran nearly silent and sipped very little electricity. And although Microsoft’s (MSFT) Xbox 360 was originally a loud monster with a penchant for Red-Ring-of-Death-ing itself, the amount of power it consumed was never as much as Sony’s (SNE) launch PlayStation 3, which used more power than a refrigerator. Eurogamer took it upon itself to pit the Wii U against the Xbox 360 S and new super slim PS3 and concluded that Nintendo’s new console “draws so little power in comparison to its rivals that its tiny casing still feels cool to the touch during intense gaming.” Most impressive is that the Wii U maintains its low-wattage while fitting in a chassis that’s smaller than both the Xbox 360 and PS3.

According to Eurogamer’s tests, the Wii U draws only 32 watts of power during gameplay of games that are as graphically intensive as the 360 and PS3, with both consoles using 118% and 139$ % more power, respectively.

To achieve such “green” levels, Nintendo clocks the Wii U’s CPU to 1.24GHz and “uses far fewer transistors than the competition.” While there are still some mysteries as to how the hardware remains cool, Eurogamer also discovered that the AMD-built GPU increases performance by “40 per cent per square millimetre of silicon – another big leap in efficiency.”

Most disappointing in Eurogamer’s analysis is that they weren’t able to get the Wii U’s wattage to spike more than 33 watts, suggesting that the console can’t be over-clocked in the future to pump out more polygons.

If you’re still on the fence on which console you should buy or play games on, the Wii U looks to be the one that’ll keep your electric bill nice and low.

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Andy Serkis plays dual role in ‘Hobbit’ – Gollum and director

LOS ANGELES (Reuters) – Andy Serkis reprises his role as Gollum in “The Hobbit: An Unexpected Journey,” to be released worldwide this week, but his main role this time was as a second unit director, shooting battle sequences in 3D for director Peter Jackson.

The British-born actor, 48, who rose to fame as the obsessive Gollum in Jackson’s “The Lord of the Rings” trilogy, spoke with Reuters about playing the popular CGI character, and his role behind the camera in New Zealand for “The Hobbit.”

Q: Was it nice to get re-acquainted with Gollum after almost 10 years?

A: “Yes, but he’s never been that far away from me. Not a day goes by where I’m not reminded of Gollum by some person in the street who asks me to do his voice or wants to talk to me about him. But because ‘The Hobbit’ has been talked about as a project for many years, I knew that at some point I’d have to reengage with him.”

Q: Martin Freeman (Bilbo Baggins) is new to the franchise and so are many other actors. As a veteran, did they come to you for advice?

A: “It sort of manifested itself more in a way where (as a vet) you understand the scale and scope of what’s required stamina-wise. It’s a different rhythm than most movies. For a lot of the actors, you’re 12,000 miles away from home. It becomes a way of life – getting up at five in the morning, shooting every day, day in day out, for 270 days. The new cast playing the dwarves were carrying incredibly heavy weights in their suits, they sat through hours of make-up every day. So it’s quite challenging from a stamina point of view.”

Q: Playing Gollum was not your only job. You were also doing second unit directing. What did that entail?

A: “Directing was my main job this time – more than playing Gollum. I worked 200 days with a huge team shooting battle sequences, aerials. It was an amazing experience and one which I was very, very thankful to Peter for asking me to do.”

Q: How did that come about?

A: “I’d already started directing short films when we were doing ‘Lord of the Rings,’ then videogame projects. So Peter’s known that I’ve been heading towards directing for a long time. But I always thought my first outing would be a couple of people and a digital camera in the back streets of London somewhere!”

Q: Why do you think Peter let you do it?

A: “I think because the second unit was going to have a lot of principal cast, Peter wanted someone that could take care of the performances and create an atmosphere where the actors felt safe. Obviously I was briefed closely by Peter. But it was a huge challenge – mental, technological. I’d never shot with 3D. Plus the day to day logistics of dealing with such an enormous operation.”

Q: Any plans to direct again?

A: “Just before I headed off to New Zealand to work on ‘The Hobbit,’ I was in the process of setting up (my new company) The Imaginarium (with producer Jonathan Cavendish), which is a performance-capture studio and a development company. We are developing our own slate of film projects, one of which is George Orwell’s ‘Animal Farm.’ It’s going to be the first film that I’ll be directing.”

Q: Where does acting fit in to your newfound career?

A: “At the moment, my trajectory isn’t to think about acting. I’m absolutely devoted to The Imaginarium, our projects and directing. And watching and enabling other actors do their thing in our studio is hugely rewarding. I expect at some point I’ll probably want to go back on stage and do some theater, because I’ve not done theater in 10 years.”

Q: With two more installments of “The Hobbit” still to come over the next few years, you’ll be the voice of Gollum for fans for many more years. Are your kids proud or embarrassed when you’re asked do his distinctive raspy voice?

A: “I’m probably running out of credits in terms of my kids enjoying me do the Gollum voice for others. Especially my older ones (Ruby, 14, Sonny, 12). It was cool when they were younger. But my youngest (Louie, 8) absolutely revels in it. He would have me do it all day long for his friends at school. So I still have great currency there!”

(Reporting By Zorianna Kit; Editing by Jill Serjeant and Nick Zieminski)

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Who’s living past 100 in the U.S.? Mostly white women

WASHINGTON (Reuters) – Women have long been known to live longer than men, but when it comes to hitting the century mark the difference is stark: just 2 out of 10 Americans who live to 100 or longer are male.

Of the 53,364 Americans age 100 and older, more than 80 percent are women, a U.S. Census Bureau report released on Monday showed.

The agency’s findings, based on data collected from its 2010 census, also found those who make it past 100 are also more likely to be white city-dwellers in the Northeast and Midwest.

“Due to sex differences in mortality over the lifespan, the proportion of females in the population increases with age. This is especially true in the oldest ages, where the percentage female increases sharply,” Census researchers wrote.

“For every 100 centenarian females, there were only 20.7 centenarian males,” they added.

While reaching 100 years of age may not attract as much fanfare as it did a few decades ago, the public still marvels at those who reach “super centenarian,” status.

Guiness World Records, which certifies the oldest living person, said the title was held by Besse Cooper, an American woman who died last week at age 116 in a Georgia nursing home soon after having her hair done.

Guiness announced on its website that the new person to certified to be the oldest anywhere on the globe is 115-year-old Dina Manfredini, an immigrant from Pievepelago, Italy, who has lived in Des Moines, Iowa, since 1920. She is just 15 days older than Japan’s Jiroemon Kimura, Guiness World Records said.

Although still rare, the number of people living past 100 can have an impact as policymakers consider and plan services and programs that affect older adults, Census said in its report.

The findings are not necessarily all rosy for women.

Living longer can mean greater medical and retirement expenses, among other issues.

And the number of those living past 100 continues to grow. Just 32,194 Americans reached 100 or older in 1980, far below the current level, according to the Census Bureau.

Still, centenarians in the United States remain relatively rare compared to those in other developed countries.

There were 1.73 centenarians per 10,000 people in the United States in 2010 compared to 1.92 per 10,000 people in Sweden, 2.70 per 10,000 in France and 3.43 per 10,000 people in Japan, Census said.

(Reporting By Susan Heavey; Editing by Cynthia Osterman)

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Obama tax plan no small deal to small business owners

WASHINGTON (AP) — President Barack Obama's plan to increase taxes on top earners would have only a small impact on the nation's economy, according to congressional budget experts. But don't tell that to small business owners facing a tax hike.

Obama's proposal would hit about 940,000 people who report business income on their individual or household returns, says the Joint Committee on Taxation, the official scorekeeper for Congress. That's only 3.5 percent of the people who report business income, but those business owners are projected to earn 53 percent of the $1.3 trillion in business income that will be reported on individual returns next year.

That, Republicans in Congress argue, makes those business owners an important engine for economic growth and job creation.

They recite it as gospel: Paying higher taxes will reduce the amount of profits business owners would otherwise re-invest in their companies, making them less likely to expand and hire more workers. Many economists agree that tax increases in general limit economic growth. But there are big disagreements about magnitude — how much relatively small changes in the top two income tax rates would affect the economy and job creation.

The Congressional Budget Office estimated last month that Obama's plan to increase taxes only on top earners would reduce economic growth by 0.1 percent of Gross Domestic Product next year, or about $16 billion. That translates into about 200,000 fewer jobs.

By comparison, letting all the tax cuts enacted in 2001 and 2003 expire would reduce economic growth by 1.4 percent of GDP, resulting in about 1.8 million fewer jobs, the CBO said.

"It's a very tiny portion of the cliff impact and it very much raises revenues and it does so in a fair way," Rep. Sander Levin of Michigan, senior Democrat on the tax-writing House Ways and Means Committee, said of Obama's proposal. "It will not stifle economic growth in any significant way."

Most of the expiring tax cuts were first enacted under former President George W. Bush and extended by Obama in 2010. This time around, Obama says he is determined to let the tax cuts expire on income above $200,000 for individuals and $250,000 for married couples. He wants to extend the Bush tax cuts for people making less.

House Speaker John Boehner and other Republicans have said they are open to more tax revenue through reducing or eliminating tax breaks. But Boehner opposes Obama's proposal to increase tax rates on high earners.

"Raising taxes on small businesses instead of taking a balanced approach that also cuts spending is wrong," Boehner, said recently. "It's only going to make it harder for our economy to grow. And if our economy doesn't grow, Americans don't get new jobs and the debt problem that we have will continue to threaten our children's future."

Republicans often relate the tax increases to small businesses because 94 percent of America's businesses are structured so that profits go directly to partners or shareholders who report the income on their individual tax returns. It's a way for business owners to avoid paying taxes twice on the same income — once at the corporate level and again when profits are distributed as dividends.

Under Obama's plan, the 33 percent tax rate would rise to 36 percent on taxable income above $231,000 for a married couple filing jointly. The top tax rate would increase from 35 percent to 39.6 percent on taxable income above $397,000.

Obama's plan also would phase out the personal exemption and gradually reduce itemized deductions for individuals making more than $200,000 and married couples making more than $250,000. The top capital gains tax rate would rise from 15 percent to 20 percent. Qualified dividends, which are now taxed at a top rate of 15 percent, would be taxed as ordinary income for top earners, or at a top rate of 39.6 percent.

That, some business owners complain, would leave them with less money to hire new workers or keep the ones they have.

"We're trying to encourage people to go out and hire and take risks," said Brian Reardon, executive director of the S Corporation Association. "If you are reducing the marginal value, you are reducing the incentives for folks to take that risk."

An S corporations is a common business structure in which profits flow directly to shareholders who report the income on their individual tax returns.

Business owners note that they often pay taxes on profits they don't necessarily receive. For example, if you borrow money to start or expand your business, you can use some of your profits to repay the loan, but only the interest portion of the loan payment is tax deductible.

When business owners use profits to buy new equipment or make other upgrades, it often takes several years to write off the cost of those upgrades, depending on depreciation rules.

Dan McGregor, chairman of McGregor Metalworking Companies in Springfield, Ohio, said he and the other six shareholders in the business are looking at a tax increase of $250,000 to $300,000 next year under Obama's plan.

Under Obama's plan to increase the top two income tax rates, a taxpayer would have to have an income of around $4 million — depending on how it's structured — to face a tax increase of $250,000.

McGregor's company, which has 365 employees at five locations, does about $80 million a year in sales, McGregor said. Each year, a portion of the profits are distributed to shareholders, along with money to pay taxes. The rest, he said, is invested back into the company.

If taxes go up, distributions to shareholders must go up to pay the higher taxes, leaving less money to reinvest in the business, McGregor said.

"I feel a $40,000 reduction is the loss of one job, so if it's a $200,000 tax increase, that's five jobs," McGregor said.

___

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EU leaders in Norway to pick up Nobel Peace Prize

OSLO, Norway (AP) — European Union leaders on Sunday hailed the achievements of the 27-nation bloc, but acknowledged they need more integration and authority to solve problems, including its worst financial crisis, as they arrived in Norway to pick up this year’s Nobel Peace Prize.

Conceding that the EU lacked sufficient powers to stop the devastating 1992-95 Bosnia war, European Commission President Jose Manuel Barroso said that the absence of such authority at the time is “one of the most powerful arguments for a stronger European Union.”

Barroso spoke to reporters with EU Council President Herman Van Rompuy and the president of the EU Parliament, Martin Schulz, in Oslo, where the three leaders were to receive this year’s award, granted to the European Union for fostering peace on a continent ravaged by war.

Nobel committee chairman Thorbjoern Jagland will present the prize, worth $ 1.2 million, at a ceremony in Oslo City Hall, followed by a banquet at the Grand Hotel, against a backdrop of demonstrations in this EU-skeptic country that has twice rejected joining the union.

About 20 European government leaders, including German Chancellor Angela Merkel, French President Francois Hollande and British Deputy Prime Minister Nick Clegg, will be joining the ceremonies. They will be celebrating far away from the EU’s financial woes in a prosperous, oil-rich nation of 5 million on the outskirts of Europe that voted in 1972 and 1994 in referendums to stay out of the union.

The decision to award the prize to the EU has sparked harsh criticism, including from three peace laureates — South African Archbishop Desmond Tutu, Mairead Maguire of Northern Ireland and Adolfo Perez Esquivel from Argentina — who have demanded the prize money not be paid out this year. They say the bloc contradicts the values associated with the prize because it relies on military force to ensure security.

The leader of Britain’s Independence Party, Nigel Farage, in a statement described rewarding the EU as “a ridiculous act which blows the reputation of the Nobel prize committee to smithereens.”

Hundreds of people demonstrated against this year’s prize winners in a peaceful torch-lit protest that meandered through the dark city streets to Parliament, including Tomas Magnusson from the International Peace Bureau, the 1910 prize winner.

“This is totally against the idea of Alfred Nobel who wanted disarmament,” he said, accusing the Nobel committee of being “too close to the power” elite.

Dimitris Kodelas, a Greek lawmaker from the main opposition Radical Left party, or Syriza, said a humanitarian crisis in his country and EU policies could cause major rifts in Europe. He thought it was a joke when he heard the peace prize was awarded to the EU. “It challenges even our logic and it is also insulting,” he said.

The EU is being granted the prize as it grapples with a debt crisis that has stirred deep tensions between north and south, caused soaring unemployment and sent hundreds of thousands into the streets to protest austerity measures.

It is also threatening the euro — the common currency used by 17 of its members — and even the structure of the union itself, and is fuelling extremist movements such as Golden Dawn in Greece, which opponents brand as neo-Nazi.

Barroso acknowledged that the current crisis showed the union was “not fully equipped to deal with a crisis of this magnitude.”

“We do not have all the instruments for a true and genuine economic union … so we need to complete our economic and monetary union,” he said, adding that the new measures, including on a banking and fiscal union, would be agreed on in coming weeks.

He stressed that despite the crisis all steps taken had been toward “more, not less integration.”

Van Rompuy was optimistic saying that EU would come out of the crisis stronger than before. “We want Europe to become again a symbol of hope,” he said.

The EU says it will donate the prize money to projects that help children in conflict zones and will double it with EU funds.

The European Union grew from the conviction that ever-closer economic ties would ensure century-old enemies like Germany and France never turned on each other again, starting with the creation in 1951 of the European Coal and Steel Community, declared as “a first step in the federation of Europe.”

In 60 years it has grown into a 27-nation bloc with a population of 500 million, with other nations eagerly waiting to join, even as its unity is being threatened by the financial woes.

While there have never been wars inside EU territory, the confederation has not been able to prevent European wars outside its borders. When the deadly Balkans wars erupted in the 1990s, the EU was unable by itself to stop them. It was only with the help of the United States and after over 100,000 lives were lost in Bosnia was peace eventually restored there, and several years later, to Kosovo.

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Mother of News Corp Chairman Rupert Murdoch dies at 103

MELBOURNE/NEW YORK (Reuters) – Dame Elisabeth Murdoch, matriarch of the Murdoch media empire and mother of News Corp Chairman Rupert Murdoch, was both an inspiration and outspoken critic of her tumultuous family and balm to some of its excesses.

A philanthropist and tireless charity worker regarded for years in her homeland as a national treasure, Murdoch died on Wednesday night at her sprawling home outside Melbourne, a city she loved for its genteel culture, aged 103.

Murdoch was a uniting force in both the community and within her family, where she would often voice concerns to her publisher son over his brand of journalism, including racy exclusives on celebrities and partisan stance on politics.

“We don’t always see eye-to-eye or agree, but we do respect each other’s opinions and I think that’s important,” she told Australian television ahead of her 100th birthday in 2009.

“I think the kind of journalism and the tremendous invasion of people’s privacy, I don’t approve of that,” she said.

Murdoch’s death comes at the end of a tumultuous year for News Corp, with the company under attack over phone hacking in Britain and amid tensions among those in line to one day replace Rupert Murdoch at the head of the company.

Harold Mitchell, a major figure in Australia‘s advertising industry who has done charity work alongside Murdoch, said Dame Elisabeth was deeply respected by her family and the community.

“I always found she was a great force in binding together many parts of the community and all people within her influence, and I’m sure she had that same affect on her family,” Mitchell told Reuters.

Equal to the zeal with which the Murdoch publishing empire has defended its news gathering methods, the far-flung Murdoch clan have also worked hard to mask their own differences, including rivalries between Rupert Murdoch’s daughter, Elisabeth, and sons James and Lachlan, over the company’s leadership and direction.

Elisabeth, 44, a prominent television businesswoman, had been critical of her brother James’s stubbornness during the phone hacking scandal, the New Yorker magazine reported this month, while Lachlan always bristled over his father’s close supervision and left News Corp in 2005.

“He moved to Australia, and although he remains on the News Corp board, he has busied himself with his own media investments. James, the youngest, became the new heir, but he has always resented that Lachlan was their father’s favorite,” the magazine said.

FAMILY FOCUS

Dame Elisabeth Murdoch, with her forthright but graceful criticism and focus on family, was always able to draw warring family members back together, including after Rupert Murdoch’s much publicized divorce of Anna Murdoch and marriage to Wendi Deng in 1999.

Murdoch, who would have been 104 in January, is survived by 77 direct descendants, including three children Anne Kantor, Janet Calvert-Jones and Rupert. Her fourth and eldest child, Helen Handbury, died in 2004.

“Throughout her life, our mother demonstrated the very best qualities of true public service,” Rupert said in a statement issued by News Ltd, the Australian arm of News Corp.

“Her energy and personal commitment made our country a more hopeful place and she will be missed by many.”

Murdoch, 82, remained close to his mother despite leading a global media empire that required him to split his time between Australia, Asia, Britain, New York, and Los Angeles, among other places.

A young Melbourne socialite, Murdoch was 19 when she married Rupert’s father, Keith, in 1928. When Keith Murdoch died in 1952, Rupert took over his father’s newspaper business and set about turning it into a global media empire.

Elisabeth Murdoch was a prominent philanthropist, serving on and forming numerous institutes that promoted medical research, the arts and social welfare, and she was a supporter of more than 100 charities and organizations.

Her work earned her civil honours in both her native Australia and Britain, and she was made a Dame in 1963 for her work with a Melbourne hospital.

She believed that charity work involved being involved with people, and was more than just giving money.

She also decried the world’s obsession with materialism and wealth at the expense of personal relationships.

“I think it’s become a rather materialistic age, that worries me. Money seems to be so enormously important and I don’t think wealth creates happiness,” she told a television interviewer.

“I think it’s personal relationships which matter. And I think there’s just a bit too much materialism and it’s not good for the young.”

While her son remains a divisive figure, Elisabeth Murdoch was widely admired in Australia and her death attracted tributes from across the political divide.

“Her example of kindness, humility and grace was constant. She was not only generous, she led others to generosity,” Prime Minister Julia Gillard said as she offered condolences to the Murdoch family.

(Reporting by Adam Kerlin in New York and James Grubel and Rob Taylor in Canberra; Editing by Alex Richardson)

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Health workers march in Spain’s capital against cuts, reforms

MADRID (Reuters) – Thousands of health workers, on strike since last month, marched on Sunday in Madrid to protest against budget cuts and plans from the Spanish capital’s regional government to privatize the management of public hospitals and medical centers.

It was the third time doctors, nurses and health workers have rallied since the local authorities put forward a plan in October to place six hospitals and dozens of medical practices under private management. The plan also calls for patients to be charged a fee of 1 euro for prescriptions.

Workers launched an indefinite strike last month against the plan, which has not been endorsed by the centre-right government of Prime Minister Mariano Rajoy. Health workers in the capital are striking Monday-Thursday each week and seeing patients only on Fridays, while also responding to emergencies.

Spain’s 17 autonomous regions control health and education policies and spending. They have all had to implement steep cuts this year as the country struggles to meet tough European Union-agreed deficit targets.

Dressed in white scrubs, the protesters shouted slogans such as “Health is not for sale” and “Health 100 percent public, no to privatizations”.

“Of course, privatization can be reversed. Actually the question is not if it can be reversed, because privatization should never have a future,” said Luis Alvarez, an unemployed man from Madrid attending the demonstration.

Belen Padilla, a doctor at Madrid’s hospital Gregorio Maranon, said one million citizens had already signed a petition rejecting the plan.

(Reporting by Reuters Television; Writing by Julien Toyer; Editing by Peter Graff)

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