“Let me say something about the row over bonuses and pay,” Osborne said in a speech to the Federation of Small Businesses.

“Of course rewards for failure are unacceptable — and those who believe in the free market are the first to say so. But a strong, free market economy must be built on rewards for success.”

The Labour Party has heaped pressure on the ruling coalition to curb excessive pay for top executives, using a House of Commons debate to demand the return of a tax on bankers’ bonuses.

“There are those who are trying to create an anti-business culture in Britain — and we have to stop them,” said Osborne.

His comments came as Stephen Hester, chief executive of the state-rescued Royal Bank of Scotland, broke his silence over his decision last month to give up a bonus of almost £1 million in shares.

Hester made his first comments on the furore in a memo to RBS staff, having bowed to intense political pressure and waived his annual bonus of shares worth £963,000 on top of his £1.2 million salary.

In a letter to employees of the bank, 82 percent of which is owned by the British taxpayer after a massive bailout, Hester said press coverage had been “discomforting to say the least”.

The huge bonus had sparked outrage amid government calls for pay restraint, ongoing austerity and economic gloom. Former RBS chief executive Fred Goodwin was also stripped of his knighthood last month.

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“We’ll continue to make steady and determined efforts to move ahead with negotiations,” Noda said, stressing the need to sign a peace treaty with Russia.

The four islands – which Russia calls the Southern Kurils and Japan calls the Northern Territories – has been the subject of a territorial dispute between the two nations since the end of World War II. Because of it, the countries have also not yet signed a peace treaty to end the war.

Last year, Russian President Dmitry Medvedev sparked a diplomatic row with Tokyo by making the first ever visit by a Russian leader to the islands. He later said Russia would increase its military presence there.

Japan’s then prime minister Naoto Kan called Medvedev’s visit an “inexcusable rudeness.”

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In October, an Italian appeals court overturned the young Seattle woman’s murder conviction in the 2007 death of her British roommate in Perugia. But the same court upheld Knox’s conviction for slander — for falsely accusing bar owner Diya “Patrick” Lumumba of involvement in the slaying.

Lumumba was freed after two weeks in prison for lack of evidence.

Knox later said she was “manipulated” during her lengthy police interrogation.

An appeal of the slander conviction was filed Monday, Knox family spokesman Dave Marriott confirmed. He doesn’t know when the Italian court might consider it.

Knox returned to Seattle after her murder conviction was overturned. The former exchange student had been in custody since 2007.

In its ruling last fall, the Italian appeals court also acquitted Knox’s then-boyfriend, Raffaele Sollecito, in the murder of Meredith Kercher.

A third defendant, Ivory Coast-born drifter Rudy Guede, was convicted in a separate trial of sexually assaulting and stabbing Kercher. His 16-year prison sentence — reduced on appeal from an initial 30 years — was upheld by Italy’s highest court in 2010.

In a lengthy court document explaining the ruling that cleared Knox and Sollecito, presiding appeals court Judge Claudio Pratillo Hellmann wrote that Knox implicated Lumumba after hours of intense police questioning because “she was convinced that was what the police wanted her to do; to name a guilty person.”

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The NS and ProRail assumed on Thursday of last week that there would be three to five centimetres of snow. When the forecast was increased on Friday morning to between 10 and 15 centimetres, it was too late to change the timetables automatically, Schultz van Haegen told parliament.

Drivers and conductors had to be told about the changes individually which cost time and delayed the availability of information to passengers, she said.

Once the new schedule was up and running, it did provide ‘a predictable and reliable service’ from Sunday onwards, the Volkskrant quotes the minister as saying.

Schultz van Haegen says she will be consulting ‘experts’ from countries with experience of extreme weather conditions to find solutions to the chaos on the railways whenever it snows.

But she also says the railways will remain ‘vulnerable’ because of the ‘intensive use of the trains and track’.

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Kroes, a member of the Dutch ruling right-wing Liberal party VVD, is not a supporter of Greece exchanging the euro for the drachma, but says: ‘It is absolutely not a case of man overboard if someone leaves the eurozone.’

The commissioner is very critical of the new Greek government and says they are not fulfilling their promises. ‘Too few spending cuts, too little restructuring,’ she says.

She says the Greeks should follow the example of Italy where the new prime minister Mario Monti is taking ‘dynamic action’.

‘And it is creating just as much pain in Rome as it is in Athens,’ Kroes told the Volkskrant.

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Glencore, the world’s largest diversified commodities tradinghouse, will issue 2.8 new shares for each Xstrata share in a deal they said was a “merger of equals.”

The ratio is a 15.2 percent premium to Xstrata shareholders compared with its share price last Wednesday before word leaked out about the merger talks, a joint statement said.

“A merger between Glencore and Xstrata offers a unique opportunity to create a new business model in our industry to respond to a changing environment. It is the logical next step for two complementary businesses,” said Xstrata chief executive Mick Davis, who will be CEO of the enlarged Glencore.

Glencore CEO Ivan Glasenberg will be deputy CEO and Xstrata chairman John Bond will retain his post.

Xstrata shareholders other than Glencore, which already has a 34 percent stake in the mining group, will hold 45 percent of the new group.

Bringing together Xstrata, the world’s fourth-biggest diversified miner, and Glencore will create a group looking to ride an extended surge in demand in coming years for commodities from China and other emerging nations.

As the world’s biggest exporter of coal for power plants and a top copper producer, the combined firm aims to have the bulk to compete with mining sector leaders BHP Billiton, Vale and Rio Tinto.

On Monday, Xstrata shares closed down 1.7 percent while Glencore declined 4.5 percent, against a 1.0 percent fall in the sector, with both still above the level they were at before the potential deal was announced.

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“We are very concerned that people seem to be starting to think that all politicians behave like Wulff, and that would be fatal,” Christian Humborg, TI Germany’s managing director told The Local.

“I think the Wulff affair is a wonderful opportunity for German politicians to react to the cynical attitude that this is normal, and improve things,” he said.

He said the fact that the authorities were investigating whether Wulff and his aide had committed crimes showed that Germany already had the laws necessary to tackle his case.

But for Wulff, the problem was one of the credibility invested in his constitutional office.

“The president doesn’t have power in Germany; the only power he has is his word. And the power of the word is a function of his integrity. He doesn’t fulfil the level of integrity necessary for his position.

“Let’s not forget that a lot of people want to see him resign – less than half of the population want him to stay. And we’ve heard from many of those that they only want him to stay because they are convinced that any other candidate would have similar allegations thrown at them. We need a poll to ask why people think he should stay in office. I wouldn’t assume that the people who want him to stay approve of his behaviour.”

The question of whether Wulff should resign was one for him to answer personally, and although opposition politicians were increasing pressure on the president, Chancellor Angela Merkel’s continued support for him was questionable, said Humborg.

“We have to ask ourselves why the chancellor is still publicly supporting his behaviour and allowing the public image of politicians to be tainted further. She has some responsibility to safeguard our democracy so that people do not lose trust in the system as a result of politicians’ questionable practices.”

Most of the allegations against Wulff date back to his state premiership of Lower Saxony between 2003 and 2010.

Asked whether the dense web of overlapping personal, business and political relationships that Wulff seemed to have spun during this time were normal for a man in his position, Humborg said, “We don’t have enough empirical data to say to what degree politicians have such relationships in general, but I would be surprised if that was a widespread phenomenon.”

Humborg said he recognized that state politicians must promote their regional economy, but that high moral standards could still be expected of them.

“I don’t think it is so difficult to have a close interaction with people and businesses while still respecting a responsible distance when it comes to personal advantage,” he said.

While Humborg acknowledged that the laws concerning Wulff’s case were sufficient, he called for four major changes to increase transparency elsewhere in Germany’s political life.

He pointed out that there was currently no regulation to force transparency in sponsoring political parties, that Germany has not signed up to the United Nations convention against corruption, and that the law against bribing politicians was too weak.

And he said there needed to be more public information on how federal MPs earn money outside their parliamentary remuneration.

The final additional measure would be to govern what is known as revolving door employment – where ministers and deputy parliamentary ministers who have had contact with businesses in their public positions then go to work for them.

Other countries impose a quarantine period after politicians leave office, during which they cannot work for a firm with which they have had dealings.

Overall, Humborg said Germany had a high levels of integrity, but that there was a need for greater transparency.

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Despite accusations in both countries of interference, Merkel used a visit to Paris for a joint Franco-German cabinet session to make clear her support for Sarkozy, who has increasingly cited Germany as a model for France.

“We belong to the same political family. He supported me and it is natural that I support him in his campaign,” Merkel said during a joint television interview with Sarkozy to be broadcast later on French and German television.

Saying the two had worked together in a “friendly atmosphere” on the eurozone debt crisis, Merkel said they had a strong personal relationship.

Sarkozy said he was pleased to have won her support.

“The French people will decide themselves, like Germans decide, freely,” he said in the interview, but added: “When someone for whom you have affection and whom you admire says ‘I support your actions’, that pleases me.”

At a press conference after the cabinet session, Merkel dismissed criticism of her support for Sarkozy, saying: “It is normal that we support parties that are friends.”

Merkel recalled that Sarkozy had supported her in 2009 during her own election campaign, and said the French leader’s Socialist opponent François Hollande had recently come to Germany to address the opposition SPD.

Sarkozy thanked Merkel for her “friendship and trust” and — without citing him by name — slammed Hollande’s plan to renegotiate a eurozone fiscal compact seen by Berlin and Paris as a solution to the eurozone debt crisis.

He also denounced critics, in particular from the left, who have slammed Sarkozy for taking inspiration from the German model in efforts to reform France’s faltering economy.

“We are not jealous of them (Germany), we want to draw inspiration from them,” Sarkozy said, warning his opponents against “playing with feelings that remind us of periods that we do not want to see again.”

France and Germany were once seen as the twin motors of the European Union, but Paris is now clearly the junior partner, its economy lagging behind by any measure, and Sarkozy has turned to Berlin for ideas.

Sarkozy trails Hollande in opinion polls and Merkel fears that a new left-wing French administration will diverge from her austerity plans.

Speaking to reporters in Dijon, Hollande said “it says a lot about (Sarkozy’s) situation” that he was seeking Merkel’s support.

“For me the only test is the French people…. I don’t need the support of anyone but the votes of the French people,” he said, adding that Merkel would face a “tough task” in winning support for Sarkozy.

Sarkozy, still smarting from France’s loss of its AAA debt rating, cites Germany’s success almost daily to justify his own policies, drawing inspiration from both Merkel and her centre-left predecessor Gerhard Schroeder.

In Berlin, Merkel’s spokesman Georg Streiter said her active support for Sarkozy’s re-election campaign was a “personal” engagement as leader of Germany’s centre-right CDU party and not as the nation’s chancellor.

According to CDU general secretary Hermann Groehe, Merkel plans to support Sarkozy at campaign rallies ahead of France’s two-round presidential election, with a first round on April 22nd and a run-off on May 6th.

Sabine von Oppeln, a Berlin-based expert on Franco-German relations, said Merkel’s backing of Sarkozy was motivated by her efforts to reform Europe.

“With the euro crisis, she found in Sarkozy a partner who has largely supported her or at least not worked against her,” she said.

“There were numerous tensions between Merkel and Sarkozy in the past but today she is making a tactical calculation based on the fact that the two governments need Europe.”

German newspaper Süddeutsche Zeitung meanwhile wrote that Sarkozy had “latched his destiny to that of ‘dear Angela’ and the ‘German model’.”

“The time is long gone when he would, in private, call the chancellor ‘fatso’ and the Germans ‘the Boche’,” it wrote.

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“The pensions scheme isn’t based on magic. It is a welfare ambition based on large-scale re-distribution and citizens’ own work. If people think that we can live longer and shorten our work life, then pensions will get lower,” Reinfeldt said in interview with daily Dagens Nyheter (DN).

According to Reinfeldt, the expectation to retire at 65 is a problem in Sweden today.

He thinks that Swedes may have to stretch their working life to 75 years of age in order to keep the same living standard. Not many would be willing to sacrifice the way they live, he said to the paper.

“Are people on a large scale willing to give this up? I think not,” he said.

To keep going that long, Reinfeldt isn’t ruling out that Swedes would need to have more than one career during their working life.

“It is a very challenging view. Our entire life is characterized by the idea that once we have spoken to the student career counselor, we think we are going to do the same thing our entire life,” said Reinfeldt.

But instead, Swedes need to be able to change their career at a later stage in life, said the prime minister

He also said that student loans for the over 55s wasn’t out of the question.

“Maybe it is worth looking into that,” he told DN.

Reinfeldt also said that those who are 55+ would immediately become more attractive with employers if they were expected to work for another 20 years instead of ramping down after 5-6 years.

“But it is important to understand that a 30-year-old wouldn’t do the same work as a 70-year-old,” said Reinfeldt.

The prime minister is scheduled to host a meeting in Sweden on Wednesday with the leaders of the Nordic nations, as well as with British PM David Cameron, to discuss among other things the implications of an aging population.

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The leaders are caught between their increasingly frustrated partners in the European Union for failing to pass the reforms quickly and workers who went on strike on Tuesday to protest against the austerity measures.

European Union (EU) officials say the full package must be agreed with Greece and approved by the euro zone, European Central Bank and International Monetary Fund before February 15 to allow time for complex legal procedures involved in the bond swap to be completed in time for a March 20 bond redemption.

In some euro zone countries, including Germany and Finland, parliamentary approval is required to raise the bailout money.

In Paris, German Chancellor Angel Merkel on Monday expressed the exasperation among euro zone leaders at seemingly endless arguing in Athens that has yet to produce a definitive acceptance of the austerity and reform demanded by the lenders.

“I honestly can’t understand how additional days will help. Time is of the essence. A lot is at stake for the entire euro zone,” she told a news conference with French President Nicolas Sarkozy.

But leaders of the three parties in the coalition government appeared to need at least one additional day.

The office of Prime Minister Lucas Papademos, a former central banker who heads a government of politicians, said that a meeting of leaders from the conservative, socialist and far-right parties due on Monday had been postponed to Tuesday.

No reason was given for the delay. Papademos held further talks with the “troika” of lenders – the European Commission, ECB and IMF – on Monday.

The party leaders, positioning themselves for a likely general election in April, have balked at accepting another package of deeply unpopular wage and pension reductions, job cuts and tougher tax enforcement measures.

Alarmed by the prospect of yet more budget cuts, Greece’s two main trade unions said they would hold a 24-hour strike on Tuesday in protest against policies they say have only driven the economy into a downward spiral.

Demonstrations are planned in central Athens.

PATIENCE WEARING THIN

Greeks watched the political drama with the same exasperation they have shown throughout the nation’s nearly three-year crisis, mixed with fear of the consequences of leaving the euro.

“We are stuck between a rock and a hard place. We are lost either way but political leaders have to agree,” said Kosmas Georgiou, a 31-year old company inspector. “Going back to the drachma is not an option, it’s disaster.”

“They are delaying this just to look like heroes.”

Merkel made clear that her patience was wearing thin on a deal that affects not only Greece but the wider currency bloc, which fears that a default would hit much larger economies such as Spain and Italy.

One government official said the entire Greek side had to agree terms of the rescue, which would be the second for Athens since 2010, with international lenders before the next meeting of the Eurogroup of euro zone finance ministers.

No date has been set for the Eurogroup meeting, and a European Commission spokesman said it would be held only when Greece had made a commitment to the deal.

Papademos said after five hours of talks on Sunday that party chiefs had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.

But leaders of the PASOK socialist party, the conservative New Democracy and the far-right LAOS party still have to reach agreement on several unresolved issues.

These include labour market reform and shoring up domestic banks. Greece needs the bailout money by mid-March to meet big debt repayments but tempers are rising in the EU over what it sees as Greek dithering on implementing reforms.

Greeks have been worn down by a deep recession, now in its fifth year, and wave after wave of austerity measures imposed under the first bailout.

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