The Fukushima Daiichi plant, 240 kilometers (150 miles) northeast of Tokyo, was damaged in March by a devastating earthquake and tsunami in the world’s worst nuclear accident since the Chernobyl disaster 25 years ago.”Our latest measurements show that radiation from the damaged reactors is 100 million becquerels per hour, which is one eight-millionth of the amount measured soon after the accident,” Tokyo Electric Power’s (Tepco) vice president Zengo Aizawa told reporters during a monthly review.Aizawa said that this translates to about 0.2 millisievert per year of radiation measured at the fringes of the plant, below the 1 millisievert safety limit according to government guidelines.The amount is half of what Tepco announced at its review a month ago.In light of the progress being made in cooling its damaged reactors, which suffered nuclear fuel meltdowns in the first days of the crisis, Tepco formally brought forward its plan to bring the plant to a state of “cold shutdown” within this year, instead of by January as initially planned.It had said last month it was hoping to achieve a cold shutdown within the year but had not made a formal declaration.Technically, a cold shutdown is a state in which water used to cool nuclear fuel rods remains below 100 degrees Celsius, preventing the fuel from reheating.With the help of newly built cooling systems, Tepco’s efforts to cool the reactors have progressed steadily, with temperatures at all three of the damaged reactors falling below 100 degrees late in September.But despite this development, Tepco and the government have been cautious about immediately declaring a cold shutdown.”We still need to proceed with care. We need to continue monitoring whether the temperatures of the reactors and radiation levels being emitted remain stable going forward,” Yoshinori Moriyama, deputy director-general of the government watchdog Nuclear Industrial and Safety Agency, told the same news conference.Declaring a cold shutdown will have repercussions well beyond the plant as it is one of the criteria the government said must be met before it begins allowing about 80,000 residents evacuated from within a 20 km (12 mile) radius of the plant to go home.Japan faces a massive cleanup task if these residents are to be returned home — the environmental ministry says about 2,400 square km (930 square miles) of land surrounding Daiichi may need decontamination, an area roughly the size of Luxembourg.Even if a cold shutdown is declared Tepco has acknowledged that it may not be able to remove the fuel from the reactors for another 10 years and that the cleanup at the plant could take several decades.It also has to decontaminate tens of thousands of tonnes of contaminated water pooled at the plant, a result of its efforts to cool the reactors early in the crisis by pumping in vast amounts of water, much of it from the ocean.
* Must include more new measures to meet fiscal targets-analystsBy Sergio GoncalvesLISBON, Oct 13 (Reuters) - Portugal’s centre-right government will need to go further in 2012 than the budget austerity set out in its international bailout if it wants to meet tough fiscal goals, analysts said as the government prepared to approve next year’s budget.The 2012 draft budget, which should be approved by the cabinet on Thursday and presented to parliament on Monday, is likely to include tougher austerity than originally planned because of shortfalls this year which the government is set to plug with one-off measures.The government does not plan to immediately release any budget details.The coalition government took over in June backed by a solid parliament majority, which can easily pass the budget even if no other party supports it. The vote is scheduled for Nov. 29.But shortly after taking office in June, the government identified a shortfall of 2 billion euros, or 1.5 percent of GDP, due to lower-than-expected cuts in public sector jobs and the island of Madeira’s failure earlier to report the full scale of its debt.Under Portugal’s 78-billion-euro bailout from the European Union and IMF, the country needs to cut next year’s budget deficit to 4.5 percent of gross domestic product from 5.9 percent this year. In 2010 the deficit reached 9.8 percent.”This (2012) budget is key because if Portugal does not meet the goals set by the ‘troika’, it is just a question of time before falling into a similar situation to Greece, with a second bailout and eventual default,” said Filipe Garcia, head of Informacao de Mercados Financeiros consultancy in Porto.”But cutting the 2012 deficit to 4.5 percent requires tougher measures, both on the revenue and spending side, than what was agreed with the troika,” he said.The steps under the bailout include cutting the number of public servants by 2 percent by 2014, freezing civil servants’ wages following this year’s 5 percent cut, cutting subsidies and fiscal benefits and raising value-added tax on some products to the maximum 23 percent rate from previously lower rates.The government has already slapped a one-off 50 percent tax on year-end salary bonuses and brought forward a tax hike on electricity and natural gas. It is also set to transfer the pension funds run for some banks’ employees to state coffers to cover the shortfall.PRIMARY CUTSWhile the banks’ pension funds have enough cash to guarantee that this year’s budget gap goal is met even if the slippage turns out to be bigger, such transfers are not the structural measures the “troika” of the EU, IMF and European Central Bank are looking for.Rui Bernardes Serra, chief economist at Montepio bank, also said the tax burden was already too high in Portugal, threatening to send the economy into a recessive tailspin, and the government had to focus its efforts on spending cuts.”The government has to, at least, meet the target of cutting its primary current spending by 10 percent, which implies a 15 percent cut in non-salary spending, and this cut has to be across the board,” he said.Analysts say there will have to be drastic cuts in healthcare — in terms of medicine costs, excessive use of services and overtime payments to staff — as well as education and social security benefits. Unemployment is already at a 3-decade high of 12 percent.”Tax hikes would have to be surgical, aimed at certain types of fairly inflexible consumption, but they cannot be excessive as they create growing incentives for tax evasion,” Bernardes Serra said, adding that such tax hikes could involve tobacco and municipal real estate levies.
In his first public comments since the BoE’s Monetary Policy Committee surprised markets by launching a second round of quantitative easing last week, Dale said that Britain was suffering one of the worst ever periods of financial turmoil.Britain’s economy has largely stagnated for the past 12 months, and Dale said the deepening euro zone debt crisis had increased the downside risks to inflation further down the line.Asked if the 75 billion pounds of gilt purchases over the next four months that the MPC approved last week would be enough to help Britain’s economy turn the corner, he said: “I think it will depend critically on what happens in our economy but even more importantly in the rest of the world.”“The main reason why our economic outlook has deteriorated very substantially over the past few months is what’s happening in the rest of the world, and therefore, how we will set the stance of policy going forward,” he added.Dale said the failure of euro zone leaders to tackle Greece’s debt crisis had been a major factor behind a downward spiral in global economic confidence, and that the BoE would be keeping a close eye on future developments.Until August this year Dale had been in a minority of MPC members who supported higher interest rates. He declined to confirm if he had backed last week’s expansion in QE, saying this would become clear in the MPC minutes next week.He endorsed BoE Governor Mervyn King’s assessment that the financial crisis was the worst since the 1930s, but stressed that conditions in the economy as a whole were better.”I can’t think of any obvious period in history where we’ve seen such an acute and prolonged period of financial turmoil. But I think what’s very different now to the Great Depression is what’s happening in the real economy.”Dale still saw upward inflation pressures and said September’s consumer price inflation, due to be reported next week, was highly likely to have jumped above 5 percent from its current level of 4.5 percent.Notwithstanding this, inflation was likely to fall sharply at the start of 2012 due to one-off factors from higher sales tax and oil prices dropping out of the picture, and the latest economic weakness had added to downward pressures, he said.”The ultimate judge of the success of QE is whether we hit the inflation target — so in a couple of years’ time whether we’ve managed to support demand and we’ve hit the inflation target,” he said. “I will keep on emphasizing this.”The effect of high inflation in reducing households’ disposable income had been a major factor behind disappointing growth over the past year, he added.”A big feature of the weakness of growth this time around isn’t something related to the financial crisis and a ‘lost decade’, but that households’ real incomes are being squeezed by increases in imported commodities and other imports prices,” he said.WILL QE WORK?Dale saw some grounds for why this round of quantitative easing may be more effective than the previous 200 billion pounds of asset purchases conducted between March 2009 and February 2010.Investors’ preference for safe-haven assets is even more marked than when the BoE started its first round of QE, and the BoE’s gilt purchases should encourage the funds that hold them to diversify into riskier, higher-return assets such as corporate bonds and equities, Dale said.He rejected the notion that banks would sit on any money they receive from quantitative easing and would not lend it on.”This is one thing that frustrates me more than most, when I see descriptions of quantitative easing working through the banking systems as us ‘giving money to the banks’. That is not the way quantitative easing works. We go round the banking system,” he said.Dale welcomed finance minister George Osborne’s proposals for ‘credit easing’ measures to boost the flow of lending to smaller firms, and added that the credit risk involved meant it was right that the finance ministry should take the lead in designing the plans.Critics of quantitative easing argue that due to the bleak economic outlook, Britain is close to a liquidity trap, akin to that faced by Japan in the previous decade, in which firms do not want to invest and banks are unwilling to lend.Dale accepted that there was a problem with business confidence, but denied that the BoE had become powerless.”I don’t think we’re in a liquidity trap,” he said. “What we showed last month is we were willing to act quickly and decisively in order to support demand in our economy and hopefully that will help to add to some extent to people’s confidence about the future.”