World News, The World Today

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N Korea fund transfer under way

The transfer of North Korean funds from a bank in Macau - a key sticking point to nuclear disarmament talks with the US - is under way.
A Macau official said that most of the $24m frozen in the Banco Delta Asia had now been moved elsewhere.

The move marks a breakthrough in a dispute between North Korea and the US.

North Korea had insisted it would only shut its Yongbyon nuclear facility if it had access to the funds, stalling a previously negotiated deal.

It is not yet clear where the money is being sent to, but it is expected to be wired to the US before being transferred elsewhere.

Recent reports suggest the funds will eventually end up in a North Korean bank account in Russia, after Moscow signalled earlier this week that it would help resolve the row.

Significant pathway

"Banco Delta Asia transferred more than $20m out of the bank this afternoon, in accordance with the client's instruction," said Francis Tam, Macau's secretary of economy and finance.


"We have heard reports in foreign media that the money can be wired via the US or Russia, for example. I think these routings are possible," he said.
The route the funds take is significant, according to the BBC correspondent in Seoul, Charles Scanlon.

Until now, banks around the world have refused to touch the money, which is alleged by the US to be the proceeds of drug smuggling and counterfeiting.

North Korea hopes that by transferring it through the US, the move will signal an end to a global squeeze on its financial activities.

Our correspondent says the transfer represents a major concession by the Bush administration, which initially said there could be no promise over what it called the North's criminal activities.

But despite this step forward, analysts have cautioned that the financial wrangle is only the first of many obstacles in the path towards denuclearisation.

They say that North Korea has made no clear commitment to hand over the nuclear weapons and the stockpile of fissile material that it has already developed.

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Bank subsidy for Ground Zero move

A major US bank is reportedly getting a huge subsidy to relocate its offices near the World Trade Center site.
The New York Times reports that JP Morgan Chase will receive hundreds of millions of dollars to build a 42-story skyscraper in downtown Manhattan.

The deal follows threats by the company to move its headquarters to Connecticut from its location in mid-town New York.

New York City officials have already paid Goldman Sachs $650m (£330m) to build new offices in Battery Park City.

That deal was criticised at the time as most outrageous example of corporate welfare in city history, according to the New York Times.

But the paper says that JP Morgan Chase will receive an even better deal, with tax breaks, discounted electric power and rent subsidies worth $100m from city and state authorities.

And it says that rent subsidies will amount to $50m per year for 15 years, or $750m.

JP Morgan Chase is a huge, and very profitable company.

It has assets of $1.4 trillion, annual revenues of $100bn and profits of $14bn in 2006, and ranks 11th on the Fortune 500 list of the biggest US companies.

But city and state officials fear that without the subsidies, key financial institutions would desert New York City, and particularly the Wall Street area.

After the terrorist attacks of 9/11, many financial firms - including JP Morgan Chase - moved their headquarters out of downtown New York, where the World Trade Center had been located.

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EU constitution 'can be simple'

An EU summit next week may agree to re-name the European constitution and re-package it as a simple treaty, a report by German officials suggests.
But the report, seen by the BBC, says this "major concession" will only be made if the "substance" of the original deal is preserved.

Germany will be chairing the summit in Brussels, which may agree the outline of a treaty replacing the constitution.

BBC Europe editor Mark Mardell says the report poses some problems for the UK.

He says several areas would be difficult for British leaders to sell to the British public without a referendum.


On first sight, it's not great news for the UK Government
BBC Europe editor Mark Mardell


The constitution was signed by EU member states in 2004, but was rejected by French and Dutch voters in referendums in 2005.
British, French and Dutch politicians have argued that the treaty must be simplified to prevent the need for further referendums.

It has not been general practice, in most member states, to put routine amendments of EU treaties to a public vote.

'Important' days

The German proposals are also likely to be unwelcome in Poland, because they say nothing about changing the voting system at meetings of the 27 governments.

Poland has threatened to block the new constitution, unless its demands are met, but is coming under intense pressure to drop its objections.

French President Nicolas Sarkozy held talks with his Polish counterpart, Lech Kaczynski, on Thursday, and Mr Kaczynski is due to travel to Germany for a meeting with Chancellor Angela Merkel on Saturday.

"We think that during these days of extreme importance, June 21 and 22, that we will reach a compromise and all member states will come away from the summit fairly satisfied," Polish President Lech Kaczynski told a news conference after his meeting with Mr Sarkozy.

Single legal personality

Our Europe editor says the Germans are proposing that the treaty would give the European Union a "single legal personality".

This would allow it to join international organisations, or sign international agreements, and is opposed by some who see the EU weakening the role of nation states.

The report also lists a number of sticking points, where further discussions are needed.

These include:

Whether or not to mention symbols, such as the EU flag and anthem
Whether or not to include the Charter of Fundamental Rights
The delimitation of competences between the EU and member states
The role of national parliaments
Aspects of EU foreign policy
The report does say that the Charter of Fundamental Rights, signed in 2000, should be made legally binding - a move opposed by some governments, including the UK.

Ms Merkel told the German parliament on Thursday that agreement on the new treaty was "still not in sight".

But she said she nonetheless hoped next week's summit would take a clear step forward and produce a "roadmap" to a new treaty by 2009.

Germany wants the summit to issue a mandate for an intergovernmental conference, which would agree the details of the new treaty later this year.