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China and S Korea discuss trade and changing neighbours
Whilst South Korea’s president Lee Myung-bak is in China on a state visit, nuclear envoys from both countries will also meet to discuss stability in the region following the recent death of North Korea’s Kim Jong-il. Lee and his Chinese counterpart, President Hu Jintao will discuss a possible three-way trade agreement including Japan. It is thought Beijing may try to allay Seoul’s fears over the relationship with the North Korea by using the prospect of increased trade. China is a major ally and economic partner to North Korea, who recently saw a young and untested Kim Jong-un take up his father’s mantle. Beijing has publicly supported the new leader in Pyongyang, but has also urged stability and restraint. Chinese trade with South Korea is worth more than 170 million euros more than with North Korea, but Seoul continues to highlight the lack of condemnation for North Korean aggression from Beijing. More about: China, Diplomatic mission, International relations, South Korea

Festive spending hits highs and lows in Europe
Christmas cheer was in short supply for Italian retailers. As analysts say austerity measures prompted households there to cut spending. The shoe and clothing sector was worst hit with Italians spending 48 euros less than the average of the past five years. In the UK a strike by London tube workers hit the traditional Boxing Day sales experts predict a boom today with over three billion euros expected to be spent. More about: Christmas, Consumer Confidence, Economic crisis, Italy, United Kingdom

Anger in Moscow over opposition jail extension
Protesters have converged on a court in Moscow after an opposition activist had his prison term extended. Sergei Udaltsov went on hunger strike after being arrested earlier this month for staging a rally without approval. Just as he was due to be released at the weekend, the court prolonged his prison term for resisting the police at a separate protest in October. “We are here to defend the rights of one man, Sergei Udaltsov. He’s been on hunger strike for the last two weeks and has already spent a whole month, for nothing, behind bars,” said Garry Kasparov, leader of the Solidarity opposition party. Udaltsov has been arrested at least 14 times this year and spent at least 50 days in prison. His supporters say that due to the hunger strike, his state of health is giving them cause for concern. The Kremlin is already dealing with widespread anger over the disputed parliamentary election on December 4. The focus of much of that anger, Vladimir Putin, is hoping to be elected president in March. More about: Protest, Russia, Russian politics, Sergei Udaltsov

Spain’s King makes plea for unity as he opens parliament
King Juan Carlos of Spain has called for unity and commitment from politicians to get the country through its worst financial crisis in decades. The appeal came as he officially opened the Spanish parliament in Madrid. The King and other royals received a standing ovation as they entered the chamber. It was the first parliamentary session since Mariano Rajoy took over as prime minister. Rajoy’s government has a mammoth task on its hands when it comes to getting Spain’s economy back on track. “I am sure the representatives will know how to work together to solve the conflicts and problems we will face,” King Juan Carlos said, as he addressed parliament. “We have to trust in ourselves, we will also have to transmit that confidence to citizens.” The King’s appearance came as a fraud investigation continued to engulf his son-in-law. Inaki Urdangarin is accused of siphoning off funds from public contracts, awarded to a non-profit organisation he headed up between 2004 and 2006. He denies the allegations. More about: Economy, Financial Crisis, Mariano Rajoy, Parliamentary debate, Spain

Iran seeks support against Western sanctions
Iran’s President has embarked on a trip to Latin America to seek support against tough new Western sanctions on the Islamic state.. Mahmoud Ahmadinejad will visit Venezuela, Cuba, Ecuador and Nicaragua. It comes days after Tehran threatened to close the Strait of Hormuz, one of the world’s most important shipping lanes. Despite growing pressure on Iran to halt its nuclear work, senior Iranian officials say an underground uranium enrichment facility at Fordow will soon be open. According to Iranian media, the site is deep inside a mountain near the Shi’ite Muslim holy city of Qom. The EU and the United States claim Iran is trying to build bombs, but Tehran insists its atomic programme is aimed at generating power. More about: Iran, Mahmoud Ahmadinejad, Nuclear Energy, Nuclear research

France and Germany push controversial Tobin tax
The idea of taxing financial transactions has resurfaced with both Paris and Berlin agreeing such a levy in the EU should be imposed. France, in particular, says it’s prepared to go it alone on a so called Tobin Tax. The European Commission proposed an EU wide deal last year. But with Britain dead set against the idea, some officials in Brussels are worried the controversial tax could split the bloc. Greek MEP Anni Podimata, an advocate for some kind of levy on financial transactions told euronews: “I have a lot of reservations towards the French unilateral move because one of the basic arguments in order to promote the introduction of such a tax at EU level was the necessity to work against the fragmentation of the internal market of financial services in the EU.” The UK, home to Europe’s biggest financial service sector, has said it will veto an EU-wide tax. It is pushing for a global levy, arguing the current proposals will scare off traders. If an EU-wide deal can??�t be agreed, France and Germany now appear determined to push for a eurozone one. More about: Europe, Financial regulation, France, Germany, Taxes

Downgrades put spotlight on euro policymakers
Standard & Poor’s mass downgrade of half the countries in the eurozone has put the spotlight not only on those whose credit ratings were cut. The New York-based agency said European leaders had overlooked a key cause of the crisis: sharp differences in economic competitiveness. But the criticism brought little sign of a change of tack from the German Chancellor, despite its warning that reforms based on fiscal austerity alone risk becoming self-defeating. Angela Merkel said she had “taken note” of S&P’s decision. “It confirms my conviction that we in Europe still have a long road ahead of us before the confidence of investors is restored. We are now called upon to implement the fiscal pact quickly and decisively – without trying to water it down everywhere,” she said on Saturday. Germany and some others kept their triple-A rating. But the lowering of several countries, including the eurozone’s second largest economy France, could add to debt problems as it is likely to increase eurozone borrowing costs overall. The agency says the long-term outlook is negative for 14 countries, with a one-in-three chance of further downgrades. “Standard & Poor’s considers that the efforts made to stabilise budgetary and fiscal matters have been insufficient, and it also considers that the solutions the Europeans have applied to the current crisis in the eurozone are insufficient,” said economic analyst Elie Cohen. Angela Merkel stressed that Standard & Poor’s was only one of three major rating agencies. But its doubts over European leaders’ policies will strike a chord with many who believe that too much emphasis is being put on belt-tightening, and not enough on boosting growth – which could further weaken countries in the eurozone’s so called “periphery”. More about: Credit rating agency, Debt rating, Eurozone in crisis, French debt, Standard & Poor’s

What will state funeral reveal of future North Korea?
Preparations are in their final stages for the funeral of North Korean leader Kim Jong-il in the capital Pyongyang on Wednesday. Observers too are getting ready to compare what will doubtless be a grandiose occasion with the state funeral 17 years ago for his predecessor: Kim Il-sung, known as the country’s Great Leader. Kim Jong-un was a boy back then. This time round, as the country’s new leader, he is credited with having instructed the authorities to keep mourners supplied with hot water and tea as they queue in freezing temperatures. From the “kimjongilia” begonias named after his father, to the Great Successor’s sombre public appearances so far, it is clear that tradition is being followed. Some expect the ceremonies to have a military flavour given Kim Jong-il’s promotion of North Korea’s armed forces. More public grieving is also expected, of the sort that has intrigued and bemused millions around the world over the ten days since his death. Kim Jong-un himself displayed some rare public emotion this week as he paid his respects to his father. Above all, observers will be looking for signs of North Korea’s future direction. The reception of two unofficial delegations from the South – including a former first lady – is seen as an indication that the North might be open to thawing long-frozen relations. More about: Communism, Funerals, Kim Jong-il, Kim Jong-un, North Korea

Mubarak trial postponed until next week
The trial of former Egyptian president Hosni Mubarak has been postponed until next Wednesday after resuming for the first time in two months. The 83-year-old, who faces charges of abuse of power and killing protesters, was stretchered out of the courtroom on a hospital trolley. His sons, Gamal and Alaa, also face allegations of corruption and could face up to 15 years in jail if convicted. Mubarak may be sentenced to death if he is found guilty of ordering security forces to kill those who demonstrated against his three decade rule in February. More than 800 people died during the 18-day uprising. Lawyers representing the victims’ familes had asked for the presiding judge and his two others to be replaced. That request was rejected earlier this month. More about: Hosni Mubarak, Protests in Egypt, Trial