Bloomberg News - Euro Area Must Take Austerity Pain Now, Dombrovskis Says

By Kim McLaughlin - May 8, 2012 12:01 AM GMT+0200

Europe’s most indebted nations shouldn’t use their recessions as an excuse to avoid committing to austerity plans if the region is ever to emerge from its debt crisis, Latvian Prime Minister Valdis Dombrovskis said.

“It’s important to do the adjustment, if you see that adjustment is needed, to do it quickly, to frontload it and do the bulk already during the crisis,” Dombrovskis said yesterday in an interview in Stockholm.

Latvia’s economy contracted 18 percent in 2009, more than any other nation in the European Union, after Dombrovskis’ government hung on to power to push through austerity measures mandated by an International Monetary Fund-led bailout. Yet the program proved successful and the Baltic country’s economy rebounded in 2010 to achieve growth in excess of 5 percent last year. Latvia’s budget deficit will narrow to 3.3 percent of the economy this year, from 9.7 percent in 2009, the European Commission estimates.

Deficit reduction goals inside the euro region suffered a setback this week as May 6 elections in France and Greece saw voters embrace anti-austerity candidates. In Greece, the weekend’s election outcome raised speculation Europe’s most indebted nation may exit the currency bloc as anti-bailout parties stole the agenda. In France, Francois Hollande told voters “austerity isn’t inevitable” after he defeated Nicolas Sarkozy to become the first Socialist to win the presidency in 17 years.

‘Never Popular’

“Certainly austerity is never a very popular subject and in this case the question is, are there really alternatives,” Dombrovskis said. “Of course, a country can say we don’t like austerity, but then the question they should ask first is who is going to finance the budget deficits, financial markets aren’t in the mood to finance large deficits right now.”

The debate as to whether governments should prioritize austerity over economic growth as Europe struggles to emerge from its crisis is splitting the region. German Chancellor Angela Merkel yesterday rejected “huge” stimulus programs in her first response to Hollande’s election victory.

“The core of the discussion is whether we again need debt- financed economic programs, or whether we need growth elements that are sustainable and oriented toward the economic strength of certain countries,” Merkel told reporters in Berlin yesterday.

Contracting Economies

The euro region will contract 0.3 percent this year, the European Commission said in February.Greece’s economy will shrink 4.4 percent after contracting 6.8 percent in 2011, it said. At the same time, average debt in the currency bloc will swell to 90.4 percent of gross domestic product, well above the European Union’s 60 percent threshold. Latvia’s debt will reach 45 percent, the commission estimates.

Greece’s New Democracy leader, Antonis Samaras, yesterday said he failed to form a government after the weekend’s election rewarded politicians with anti-bailout agendas. The attempt to forge a government will now pass to Alexis Tsipras, the head of Syriza, the second biggest party, which has vowed to cancel the republic's bailout terms.

Countries that have tried to postpone savings and relied on deficits to finance spending will send their economies into even deeper recessions, Dombrovskis said.

“If the EU is to provide assistance to Greece and other countries they certainly would like to see credible and quick paths to how those countries will restore sustainable finances,” he said. “Nobody is willing to put money in some bottomless place.”

Investment Grade

Latvia’s economy contracted about 25 percent in total in 2008 and 2009, then the deepest recession in the world, after a lending-fueled real-estate boom turned to bust and international credit markets froze. The economy is growing at a “good pace” again and expanded 5.7 percent in the fourth quarter, Dombrovskis said.

Growth in the first quarter will be on the same level, he said, adding he expects expansion this year to “substantially” exceed the government’s official forecast for 2 percent.

Standard & Poor’s on May 2 raised Latvia’s credit rating to BBB-, restoring its investment grade for the first time since 2009. Five-year credit-default swaps on Latvian debt eased to 245 basis points this week from 365 at the end of last year. The country’s default swaps peaked at 1,193 basis points in March 2009.

“If we compare with the financial markets assessment it seems we are still substantially underrated so we would expect further credit rating increases this year,” Dombrovskis said.

The Baltic country in February sold $1 billion of five-year bonds, at a yield of 5.375 percent, according to data compiled by Bloomberg. The international sale was the first by Latvia since it raised $500 million from a 10-year bond in June last year. The country has covered its financing need this year, he said.

To contact the reporter on this story: Kim McLaughlin in Stockholm atkmclaughlin6@bloomberg.net

Reuters News - Short party for Hollande after French election win

By Catherine Bremer and Alexandria Sage

PARIS | Mon May 7, 2012 11:09am EDT

(Reuters) - Francois Hollande's honeymoon after his election as France's first centre-left president in 17 years was cut short on Monday by jittery financial markets eager for signals on his policies and how hard he will push back against German-led austerity.

The Socialist beat conservative Nicolas Sarkozy with 51.7 percent of Sunday's runoff vote after a bruising campaign dominated by the same anger over economic crisis that has felled 10 other European leaders since late 2009.

After jubilant left-wingers partied in the streets into the early hours in Paris, financial markets stuttered as the victory of anti-austerity parties inGreece, more than Hollande's election, fuelled fears about a new chapter in Europe's crisis.

Hollande, who delivered a victory speech in his rural base of Tulle in central France on Sunday before flying to Paris to address tens of thousands of supporters in historic Bastille square, admitted the festivities would have to be short-lived.

"There is a lot of joy and pride but also apprehension at taking on this responsibility at a difficult time for the country and for Europe," he said.

"In every capital, beyond the heads of state and government, there are people who have found hope thanks to us, who are looking to us and want to put an end to austerity."

But, his chief economic adviser said, the new team was not coming in to power to "hand out money".

The new president is expected to be sworn in on May 15. Hollande will travel to Berlin shortly thereafter to challenge Germany's focus on austerity policies and press new ideas for stimulating growth as fears about the euro zone's debt crisis resurface following an inconclusive election in Greece.

The French woke up to Hollande, arms outstretched, beaming on the front pages of morning newspapers. Left-leaning daily Liberation ran the headline "Normal!" a reference to the new president's image as a man of the people.

Arriving at his campaign headquarters in Paris on Monday morning, where he was due to hold discussions on forming a new government, Hollande emphasized that for the next few days at least conservative Nicolas Sarkozy remained in office.

"I must prepare myself. I said that I was ready and now I must make sure I am, completely," he told reporters.

With anti-austerity parties winning more than half the votes in Greece, the euro tumbled to a three-month low against the dollar; oil and European shares slumped to 4-1/2 month lows.

The Paris CAC stocks index slipped 1.5 percent but the risk premium that investors charge for holding French 10-year bonds rather than safe-haven German Bunds was broadly unchanged at 127 basis points. It hit a high of 191 bps last November amid fears of a euro zone credit crunch.

"If (Hollande) really refuses the budget-balancing rule, if he refuses to balance the books in 2016, there will be pressure from investors who currently trust us," outgoing conservative Finance Minister Francois Baroin said. Hollande has said he would balance the budget by the end of his five-year term.

BASTILLE

The left reclaimed Bastille square where revelers had danced the night away in 1981 when Francois Mitterrand became the Socialist Party's first directly elected president. Three decades later, a new generation of left-wing voters waved red flags. Some carried roses, the party emblem.

Hollande is expected to include some trusted old hands in his government like Mitterrand's prime minister Laurent Fabius but add many younger faces, notably women.

His economic team, led by centre-left former finance minister Michel Sapin, includes politicians, industry leaders and public officials seen as market-friendly.

"The words 'grace period' do not apply to the situation. That's the reality," Sapin said, adding that the priority would be to launch discussions with France's European partners.

"Nobody expects that we simply arrive in power and hand out money. That doesn't correspond to the reality of the situation."

Economists say Hollande must quickly outline his domestic plans, likely to centre on a major tax reform, and revise over-optimistic growth targets which threaten deficit-cutting goals.

His plans to tweak a reform that raised the retirement age to 62 and increase the minimum wage are unsettling investors who fear France could drift away from the club of trusted northern European borrowers and towards the debt-laden periphery.

Standard & Poor's, which stripped France of its triple-A rating in January, said Hollande's victory had no immediate impact on its creditworthiness, though it would scrutinize his policy choices. There was at least a one in three chance of a cut to France's long-term rating within two years, it said.

"Hollande's victory has already been priced in by markets, however his promises made during the campaign have not been priced in, so there is risk on the downside if he stands his ground when he announces a first set of measures," said fund manager Christian Jimenez at Diamant Bleu Gestion in Paris.

"There's a clear need to boost economic growth across Europe, but the debate is on how to achieve that without spooking investors."

PARLIAMENT

Sarkozy, punished for his failure to rein in 10-percent unemployment and for his brash personal style, conceded defeat within 20 minutes of polls closing on Sunday, telling supporters he had wished Hollande good luck in such trying times.

"I bear the full responsibility for this defeat," Sarkozy said, indicating he would withdraw from frontline politics.

In Greece, mainstream parties were hammered in a parliamentary election that left supporters of an IMF/EU bailout without a majority, raising doubts about Athens' future in the euro zone.

Hollande's clear win should give the self-styled "Mr Normal" the momentum to press German Chancellor Angela Merkel to accept a policy shift towards fostering growth in Europe to balance the austerity that has fuelled anger across southern Europe.

Merkel, who had openly favored fellow conservative Sarkozy, telephoned to congratulate Hollande and invited him to Berlin after his inauguration. The vote ended the "Merkozy" duo that led Europe through crisis and ushers in an untested partnership.

German Foreign Minister Guido Westerwelle said: "We will now work together on a growth pact for Europe, that delivers more growth through more competitiveness."

Sweden's centre-right finance minister, Anders Borg, said he was confident Hollande would not bust budgets: "We have got a pragmatic government in France that will uphold a pro-European policy with a stable focus in terms of fiscal policy," he said.

Opinion polls taken on Sunday showed the left strongly placed to win a majority in parliamentary elections next month, especially since the anti-immigration National Front is set to split the right-wing vote and hurt Sarkozy's UMP party.

If they win that two-round election on June 10 and 17, the Socialists would hold more levers of power than ever before, with the presidency, both houses of parliament, nearly all regions, and two-thirds of French towns in their hands.

Hollande led the presidential race from start to finish, outlining a comprehensive program in January based on raising taxes, especially on high earners, to finance spending priorities and rein in the public deficit to zero by 2017.

He benefited from public distaste for the incumbent's abrasive style as well as anger about economic gloom that has swept aside leaders from Dublin to Lisbon.

(Additional reporting by Brian Love, Catherine Bremer, Daniel Flynn, John Irish, Elizabeth Pineau, Sybille de la Hamaide Geert De Clercq, Alexandria Sage and Leigh Thomas; Writing by Daniel Flynn and Catherine Bremer; Editing by Paul Taylor and Alastair Macdonald)

BBC News - Malawi devalues kwacha currency by 50% after IMF calls

Malawi's central bank has devalued its currency, the kwacha, by 50% and scrapped its peg to the US dollar, in a bid to improve relations with donors.

Joyce Banda has reversed several of her predecessor's policies

The International Monetary Fund has long urged Malawi to cut the value of its currency, saying this would boost exports and reduce demand for imports.

However, ex-President Bingu wa Mutharika, who died in April, said devaluation would lead to inflation.

New President Joyce Banda is trying to persuade donors to restore aid.

One dollar is now worth 250 kwacha, up from 168.

"The devaluation of the kwacha and the liberalisation of the foreign exchange market are expected to continue the government's efforts to reach agreement with the IMF," said Reserve Bank of Malawi Governor Charles Chuka, adding that this would hopefully lead to more donor funding in the next few months.

Economists say they do not expect the move to immediately lead to higher prices, as many businesses were expecting the move and were already using the new exchange rate.

About-turns

In recent years, Malawi has run short of foreign currency after donors cut aid and demand fell for its main export, tobacco.

This led to a lack of fuel in the country.

Last week, President Banda said she did not want Sudan's President Omar al-Bashir, accused of war crimes, to attend a summit in July.

She says she feared the "economic implications" if Mr Bashir attended the African Union meeting in the country.

This was another about-turn on the position of her predecessor.

She has also fired Mutharika's widow, Callista, from her job as coordinator for safe motherhood, the AFP news agency reports.

Reuters News - Analysis: Greek election set to rock shaky euro zone

By Luke Baker

BRUSSELS | Thu May 3, 2012 10:45am EDT

(Reuters) - Overshadowed by the prospect of a Socialist win in France's presidential vote, the parliamentary election in Greece on Sunday carries far greater risks for the euro zone.

Opinion polls show no clear winner emerging from the vote, with the two main parties - centre-right New Democracy and PASOK's socialists - together garnering around 38 percent of the ballot, barely enough for a parliamentary majority under Greece's electoral system.

Either they will secure just enough to work as together, albeit uncomfortably and with a very slim majority, or steps will have to be taken to form a broad coalition with minor parties firmly opposed to the European Union's austerity measures.

That in turn will increase the pressure on the new government to renegotiate parts of the second bailout program, an ambitious deal struck in February that aims to clear the way for Greece to return to financial markets by 2015.

Some economists take the view that Sunday's election could push Greece back to the nadir it touched in November last year, when there was widespread talk of an exit from the euro zone. The contagion effect would drive Spanish and Italian bond yields straight back into the danger zone, economists say.

"Political paralysis in Greece following the elections could lead to a default and even threaten a euro exit, in our view," Bank of America strategist Athanasios Vamvakidis wrote in a research paper published on Tuesday.

"We believe that the troika may have little choice but to stop funding Greece if there is no government in place," he said, referring to the monitoring mission made up of the European Central Bank, the IMF and the European Commission.

PANDORA'S BOX

While others are less apocalyptic, there is a widespread expectation among private-sector analysts that some renegotiation of the second program will be necessary if a balance is to be struck between keeping Greece politically stable and keeping it on track towards debt sustainability.

With French Socialist Francois Hollande expected to lead a charge for the euro zone to put greater emphasis on stimulating growth and to focus less intently on deficit reduction, Greece may be an early candidate for a loosening of its targets.

"A new government is likely to argue for more backloading of the fiscal adjustment to limit the near term economic contraction, and on this issue it is likely to be pushing against an open door," David Mackie, a senior economist at JP Morgan in London, wrote in a note to clients.

That might provide some breathing space for Athens, but it would have implications for Greece's financing and would likely mean that it couldn't return to financial markets in 2015 since a primary budget surplus would remain some way off.

"Thus, a third program seems likely in any event," Mackie said. "The size of that program would have to be larger to the extent that less progress is made on the fiscal side."

The open question is what approach the troika will take. Greece consistently missed targets under its first program, agreed in April 2010, which led to the restructuring of its private-sector debt under the second package.

Officials say any further backsliding now will not be tolerated, especially with the International Monetary Fund a reluctant partner in the second program.

"There is simply no more patience or time for Greece. The only option left for them would be to quit the euro if they don't like the deal they have," said one euro zone official.

"Nobody wants to open Pandora's Box, even in a very small way," he said, referring to a renegotiation of the program.

"Everybody knows that it would mean weeks and weeks of renegotiation and lead to similar and well-justified demands from Ireland and Portugal."

COMPROMISE APPROACH

However, the political reality that emerges from Sunday's vote may force a reassessment, especially if the alternative is a situation in which Greece is nudged closer to euro zone exit, whether in reality or in the mind of the financial markets.

"Even though we believe that a Greek exit from the euro is very unlikely, market speculation about such an event would naturally increase with increased tension between Greece and official lenders," UBS economists Stephane Deo and Justin Knight wrote in a report published on Wednesday.

"Taken further, if the stress rises enough that the idea of a Greek euro exit becomes prevalent beyond financial markets, the risk of further deposit flight - both from Greece and other peripheral member states - would naturally increase."

If the troika stands firm, resisting any calls from the new Greek government to renegotiate the package or soften targets even slightly, then the moment could be forced to its crisis.

With Greek banks recapitalized with up to 50 billion euros of euro zone funds, they are better placed to handle the fallout that would ensue if Greece were to decide to leave the currency union or investors were to bet on such an outcome.

But with euro zone leaders determined that Greece should remain in the currency zone, and polls showing that around 80 percent of Greeks remain committed to the euro, the more likely outcome would still appear to be a compromise between Greece and its official creditors - meaning another debt restructuring.

"Further debt relief is likely to be forthcoming, in the form of a restructuring of official loans," wrote JP Morgan's Mackie, saying that that would likely involve maturity extensions at concessional interest rates.

"Thus, the new Greek government will likely need to commit to some path towards a sizeable primary surplus, albeit at a slower pace than currently. Our working assumption is that before that target is reached, the region will agree on a more aggressive restructuring of official loans."

(Additional reporting by Jan Strupczewski; Writing by Luke Baker; editing by Janet McBride)

BBC News - Esa selects 1bn-euro Juice probe to Jupiter

By Jonathan AmosScience correspondent, BBC News

The European Space Agency (Esa) is to mount a billion-euro mission to Jupiter and its icy moons.

The JUpiter ICy moon Explorer

• Would launch on Ariane rocket in 2022
• Journey to Jupiter system takes eight years
• Will study gas giant as well as moons
• Fly-bys planned for moons Callisto and Europa
• First mission to orbit an icy moon - Ganymede
• Would end mission by crashing into surface

The probe, called Juice, has just been approved at a meeting of member state delegations in Paris.

It would be built in time for a launch in 2022, although it would be a further eight years before it reached the Jovian system.

The mission has emerged from a five-year-long competition to find the next "large class" space venture in Europe.

Juice stands for JUpiter ICy moon Explorer. The concept proposes an instrument-packed, nearly five-tonne satellite to be sent out to the Solar System's biggest planet, to make a careful investigation of three of its biggest moons.

The spacecraft would use the gravity of Jupiter to initiate a series of close fly-bys around Callisto and Europa, and then finally to put itself in a settled orbit around Ganymede.

Emphasis would be put on "habitability" - in trying to understand whether there is any possibility that these moons could host microbial life.

Callisto, Europa and Ganymede are all suspected to have oceans of water below their icy surfaces. As such, they may have environments conducive to simple biology.

"People probably don't realise that habitable zones don't necessarily need to be close to a star - in our case, close to the Sun," explained Prof Michele Dougherty, a Juice science team member from Imperial College London, UK.

"There are four conditions required for life to form. You need water; you need an energy source - so the ice can become liquid; you need the right chemistry - nitrogen, carbon, hydrogen; and the fourth thing you need is stability - a length of time that allows life to form.

Juice team members Andrew Coates and Michele Dougherty on 'exciting' Jupiter mission

Ganymede - a 'waterworld'

• One of four big Jovian moons seen by Galileo
• Takes roughly seven days to orbit Jupiter
• Salty ocean thought to exist just below surface
• Only moon known to possess a magnetosphere
• Darker regions are more ancient than lighter ones
• Previously visited by Voyager and Galileo probes

"The great thing about the icy moons in the Jupiter system is that we think those four conditions might exist there; and Juice will tell us if that is the case," she told BBC News.

The mission will cost Esa on the order of 830m euros (£695m; $1.1bn) over its entire life cycle. This includes the cost of manufacturing the spacecraft bus, or chassis, launching the satellite and operating it until 2033.

This sum does not however include Juice's 11 instruments. Funding for these comes from the member states. When this money is taken into account, the final budget for Juice is expected to be just short of 1.1bn euros.

It has not yet been decided which European nations will provide which instruments. An Announcement of Opportunity will be released this summer with a view to identifying the instrument providers by the start of next year.

The final and formal go-ahead for Juice should be given in 2014. In Esa-speak, this stage is referred to as "adoption".

It is the moment when all the elements required to build the satellite are in place and the full costings are established.

It is also the point at which any international participation is recognised.

At the moment, Juice is a Europe-only venture, but there is every possibility that the Americans will get on board.

The US space agency (Nasa) walked away from the idea of producing a companion satellite to Juice - a spacecraft that would orbit Europa rather than Ganymede - due to programmatic differences and budget concerns.

Nonetheless, there is a strong desire among the American scientific community to have some involvement in Juice, especially in those aspects that concern Europa.

Dr Britney Schmidt from the University of Texas at Austin is excited that Europe has chosen to fly Juice, and expects the probe's data to resolve many outstanding questions at the icy moon.

"We know that ice is a really good place [for life] to do business on Earth," she told the BBC.

"There's plenty of microbial and even some macroscopic organisms that use ice to make a living. It's not so hard to imagine that life like that which lives in Antarctica and in the Arctic might be very possible on Europa."

The Esa executive has put down 68m euros as a kind of placeholder, to give some idea of how much Nasa might like to contribute. The sum is roughly the equivalent of two instruments. However, it should be said that no explicit discussions between Esa and Nasa have taken place concerning which specific instruments might come from across the Atlantic.

One further issue needs to be resolved: the name of the mission. The "Juice" label was dreamt up by the science team who devised the mission concept, but the researchers acknowledge there was a touch of humour in its creation.

They would like to use the name Laplace, after the great 18th/19th-Century French mathematician and astronomer Pierre-Simon Laplace. A number of commentators would like to see Esa run a public competition to find a suitable mission name.

The Juice proposal was chosen over two other ideas - Athena, which envisages the biggest X-ray telescope ever built, and NGO, which would place a trio of high-precision satellites in space to detect gravitational waves.

These defeated concepts will probably now be entered into the next competition, due to be announced next year or the year after.

With a diameter of 5,268km, Ganymede is the largest moon in the Solar System
Jonathan.Amos-INTERNET@bbc.co.uk and follow me on Twitter

Reuters News - Munch's "The Scream" sells for record $120 million

Sotheby's employees pose for a photograph with Edvard Munch's painting ''The scream'' at Sotheby's auction house in London in this April 12, 2012 file photo.

Credit: Reuters/Stefan Wermuth

By Chris Michaud

NEW YORK | Thu May 3, 2012 12:19am EDT

(Reuters) - Edvard Munch's masterpiece "The Scream," one of the world's most recognizable works of art, sold for $120 million at Sotheby's on Wednesday, setting a new record as the most expensive piece of art ever sold at auction.

Sotheby's Impressionist and Modern art auction featured top works by Picasso, Dali and Miro, but Munch's vibrant work from 1895 was the star attraction in a salesroom packed with art collectors, dealers and media.

The vibrant pastel was conservatively estimated to sell for about $80 million, but two determined bidders competing via telephone emerged from an initial group of seven, driving the final price to $107 million, or $119,922,500 including commission, over the course of a nearly 15-minute bidding war.

The winning bid was taken by a Sotheby's executive, and the bidder was not identified.

One of four versions by the Scandinavian painter, sold by Norwegian businessman Petter Olsen, "The Scream" easily eclipsed the old auction record held by Picasso's "Nude, green leaves and bust," which sold for $106.5 million at Christie's two years ago.

The sales room at Sotheby's erupted in applause and cheering when the hammer came down. Several Sotheby's officials said the sale marked the high point of their careers.

"It's worth every penny that the collector paid," said Tobias Meyer, who served as auctioneer and called it "one of the great icons" of fine art.

In recent decades "The Scream," which depicts a figure with hands pressed to head against a backdrop of swirling colors, has become a ubiquitous image, appropriated for everything from coffee mugs to editorial cartoons.

For many mainstream art lovers, it is perhaps second in familiarity only to the "Mona Lisa," and is among the best-known works of art still in private hands.

Sotheby's New York head of Impressionist and Modern art Simon Shaw called it "one of the visual keys to modern consciousness," adding that it was "perhaps the greatest single draw I've seen in my career" at the auction house.

80 PERCENT OF LOTS FIND BUYERS

Three other images of "The Scream," including two which were stolen and later recovered, are in museums in Norway.

Overall, the sale brought in $330.6 million, against an estimate of about $245 million to $325 million, and 80 percent of the 76 lots on offer found buyers.

The total was Sotheby's highest-ever for an Impressionist and Modern auction, beating the old mark of $286 million, which had stood since 1990. It was also the auction house's second-best evening in its history.

Other highlights included Picasso's "Femme assise dans un fauteuil," which sold for $29.2 million; Miro's "Tete humaine" went for $14.86 million; and Dali's "Printemps necrophilique," which fetched $16.3 million, or about 50 percent more than the pre-sale estimate.

Works by Max Ernst, Tamara de Lempicka, Constantin Brancusi and Paul Gauguin all achieved strong prices, many far exceeding their high estimates.

The collection of financier Ted Forstmann took in $83 million, meeting expectations, although works by Chaim Soutine that were considered highlights failed to make their estimates.

But in the end it was all about the Munch. Olsen, who attended the sale, said afterward he hoped the stunning results would help drive interest in Munch's work, and added that the artist "will be a continuing force in my life."

Speaking to its enduring topical nature and present-day relevance, Olsen said "The image of 'The Scream' could make more of us fathom the magnitude of the consequences of our continuing emissions of greenhouse gases."

"For me, (it) shows the horrifying moment when man realizes his impact on nature and the irreversible changes that he has initiated, making the planet increasingly uninhabitable."

Several other works by Munch in the sale failed to achieve a coattail effect, selling for less than their low estimates and in one case, not at all.

The art auctions continue next week when both Sotheby's and Christie's hold their sales of Post-war and Contemporary art.

(Reporting by Chris Michaud; editing by Lisa Shumaker and Todd Eastham)

Reuters News - Suu Kyi makes historic debut in Myanmar parliament

Myanmar pro-democracy leader Aung San Suu Kyi signs the register as she arrives at the lower house of parliament at Naypyitaw May 2 , 2012. Aung San Suu Kyi took her place in Myanmar's parliament on Wednesday, ushering in a historic new political era after nearly a quarter-century fight against military dictatorship.

Credit: Reuters/Soe Zeya Tun

By Martin Petty

NAYPYITAW, Myanmar | Wed May 2, 2012 2:52am EDT

NAYPYITAW, Myanmar (Reuters) - Myanmar opposition leader Aung San Suu Kyi took a historic oath on Wednesday to join a parliamentary system crafted by the generals who locked her away for much of her long struggle against dictatorship, ushering in a dramatic new political era.The 1991 Nobel Peace Prize winner's debut in a parliament stacked with uniformed soldiers could accelerate reforms that have already included the most sweeping changes in the former British colony since a 1962 military coup, including the release of political prisoners and a loosening of strict media controls.
But the wildly popular daughter of assassinated independence hero Aung San also faces the difficulty of managing the expectations of a nation impatient for change and the hopes of Burmese who see her as a sole beacon for democratic freedom.
It is unclear how rapidly she can deliver on her ambitious campaign promises, including the overhaul of Myanmar's army-drafted constitution, in a legislature dominated by former members of the military junta who ruled for nearly half a century before ceding to a quasi-civilian government last year.
"Only time will tell," she replied when asked by a Reuters reporter of the day's significance, as she waded through a chaotic throng of reporters on her way to the chamber where she took the oath in a shortened 40-minute session.
Later, she told reporters: "I have always been cautiously optimistic about developments. In politics, you also have to be cautiously optimistic."
Suu Kyi's entry into parliament comes a month after her party's landslide victory in a by-election and two days after backing down in a standoff over the wording of an oath to protect the constitution sworn by all new members of parliament.
The parliamentary session was to have ended on Monday but was extended in part to allow Suu Kyi and fellow members of the National League for Democracy (NLD) to take their seats.
Entering the chamber, she at first sat down on her own, near the block reserved for serving military men who have a quarter of the seats under the constitution, and seemed relaxed as other lawmakers greeted her.
She then lined up with colleagues to take the oath, including a pledge to uphold a constitution her party wants to change because it gives the military a leading political role.
"GOODWILL TOWARDS THE MILITARY"
Asked if she felt awkward working with the military, she replied, "Not at all, I have tremendous goodwill towards the military. It doesn't in any way bother me to sit with them."
Her comments reflect the dramatic scale of change in the former Burma, given the military's past treatment of Suu Kyi, who was first detained by the army in 1989, and then spent 15 of the next 21 years in detention until her release from house arrest in November 2010.
Many lawmakers hope Suu Kyi's parliamentary debut will be a catalyst for further reform by the government of President Thein Sein, a former general who has freed hundreds of political prisoners, legalized trade unions and protests, and started a dialogue with ethnic minority rebels.
"Parliament will be stronger because of her good relationship with the international community," said Khin Maung Yi, a lawmaker from the National Democratic Force party. "We parliamentarians have wanted her in the legislature for a long time ... Many laws have to be changed and amended."
Suu Kyi's story of triumph over tragedy began in 1988 when she left her family life in Britain to take care of her dying mother in Yangon. She soon found herself thrust into politics as nationwide protests erupted against the military, addressing crowds of thousands before her 1989 arrest.
A year later, her NLD won 392 of 485 house seats in a rare election, which the regime ignored.
She was awarded the Nobel Peace Prize in 1991 during the first of three stints under house arrest. Even in her brief periods of freedom, she never left Myanmar, afraid the military would not let her return.
She refused to leave to be with British husband Michael Aris, an Oxford University academic, when he was diagnosed with prostate cancer. He died in Britain in 1999.
Four years later she survived an assassination attempt in an attack on her motorcade in which dozens of supporters were killed. This led to another spell in detention ordered by a regime that brutally suppressed dissidents.
But as Myanmar changes, so does Suu Kyi. While her decades of defiance were lauded by the world, her decision to join an imperfect political system has also been saluted by the West, which has started relaxing sanctions.
And her campaign promise to amend the constitution could put her on a collision course with the army. Last week the military filled its 25 percent house quota with higher-ranking officers in an apparent attempt to boost its parliamentary clout.
But even some of Suu Kyi's fierce rivals in the ruling Union Solidarity and Development Party (USDP) see her presence as a boon for a parliament with limited powers.
"With Suu Kyi on board, parties will be more diverse, with different perspective and opinions," said Kyaw Soe Lay, a lower house USDP lawmaker. "This works in the interest of those in the parliament."
(Additional reporting by Thu Rein Hlaing; Editing by Alan Raybould, Jason Szep and Jeremy Laurence)