Coalition soldier missing in Afghanistan

KABUL, Afghanistan (AP) — A search is under way in southern Afghanistan for a soldier from the NATO-led coalition, believed to be the first to have gone missing since a U.S. Army sergeant was captured by the Taliban more than three years ago, a military spokesman said Friday.
U.S. Army Maj. Martyn Crighton said the soldier was among the 1,560 troops from the former Soviet republic of Georgia serving in the country.
A statement from Georgia's Defense Ministry on Thursday said an intense "search and rescue" operation was being mounted in Helmand and Nimroz provinces, describing the soldier as a military officer who went missing on Wednesday.
The last known coalition soldier to go missing was U.S. Army Sgt. Bowe Bergdahl, 26, who was taken prisoner on June 30, 2009 in Paktika province in southeastern Afghanistan.
Bergdahl, who turned 26 in captivity on March 28, was the subject of a proposed prisoner swap in which the Obama administration was considering the transfer of five Taliban prisoners long held at the U.S. military prison at Guantanamo Bay, Cuba, to Qatar.
That plan collapsed, but a new proposal would transfer some Taliban fighters or their affiliates out of full U.S. control. The prisoners would go to a detention facility adjacent to Bagram air field, the largest U.S. military base in Afghanistan, officials of both governments have said.
Eighteen Georgian soldiers have been killed since the country joined the international military operations in Afghanistan in August 2009. Georgia is not a member of NATO but has significant presence in Afghanistan relative to its population of 4.5 million.
There are currently more than 102,000 coalition troops in the country, including 66,000 from the United States. Only a residual force is slated to remain past 2013.

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US budget negotiations setback drives stocks down

PARIS (AP) — A failed attempt find a compromise in U.S. budget negotiations sent global stock markets plummeting Friday, as investors feared the world's largest economy could teeter into recession if no deal is found.
Without an agreement, the U.S. economy will fall off the so-called "fiscal cliff" on Jan. 1 when Bush-era tax cuts expire and spending cuts kick in automatically. The measures were designed to have a negative effect on the U.S. economy, in the hopes that the feared outcome would push lawmakers and President Barack Obama to find a deal.
"We've seen Europe's politicians repeatedly flirt lemming-like with cliff-diving in 2012, and now it's the turn of U.S. 'leaders,'" said Kit Juckes, an analyst with Societe Generale. "The nagging fear is always there that someone, on one side of the Atlantic or the other, will forget to let rational thought take over at the last second."
Amid the uncertainty, European shares fell. France's CAC dropped 0.15 percent to close at 3,661, while the DAX in Germany dropped 0.5 percent to end the day 7,636. The FTSE index of leading British shares retreated 0.3 percent to 5,939.
The euro also fell sharply, dropping 0.5 percent to $1.3159.
In Asia, Japan's Nikkei 225 index closed 1 percent lower at 9,940.06. Hong Kong's Hang Seng lost 0.7 percent to 22,506.29. South Korea's Kospi shed 1 percent at 1,980.42. Australia's S&P/ASX 200 fell 0.2 percent to 4,623.60. Mainland Chinese stocks were mixed.
U.S. stock futures tumbled after rank-and-file Republican lawmakers failed to support an alternative tax plan by House Speaker John Boehner late Thursday in Washington. That plan would have allowed tax rates to rise on households earning $1 million and up. Obama wants the level to be $400,000.
In midday trading trading in New York, the Dow Jones industrial average dropped 1.25 percent to 13,147, while the broader Standard & Poor's index fell 1.3 percent at 1,424.
"The fiscal cliff is a real threat not just for U.S. growth next year but for the outlook for global growth," said Jane Foley, currency analyst with Rabobank.
When growth slows, energy demand does, too, and oil prices fell in anticipation.
Benchmark crude for February delivery fell $1.78 to $88.35 per barrel in electronic trading on the New York Mercantile Exchange.

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NKorea says it has detained a US citizen

PYONGYANG, North Korea (AP) — North Korea said Friday that an American citizen has been detained after confessing to unspecified crimes, confirming news reports about his arrest at a time when Pyongyang is facing criticism from Washington for launching a long-range rocket last week.
The American was identified as Pae Jun Ho in a brief dispatch issued by the state-run Korean Central News Agency in Pyongyang. News reports in the U.S. and South Korea said Pae is known in his home state of Washington as Kenneth Bae, a 44-year-old tour operator of Korean descent.
An expert said he is likely to become a bargaining chip for the North, an attempt to draw the U.S. into talks. Five other Americans known to have been detained in North Korea since 2009 were all eventually released.
North Korean state media said Pae arrived in the far northeastern city of Rajin on Nov. 3 as part of a tour.
Rajin is part of a special economic zone not far from Yanji, China, that has sought to draw foreign investors and tourists over the past year. Yanji, home to many ethnic Korean Chinese, also serves as a base for Christian groups that shelter North Korean defectors.
"In the process of investigation, evidence proving that he committed a crime against (North Korea) was revealed. He admitted his crime," the KCNA dispatch said.
The North said the crimes were "proven through evidence" but did not elaborate.
KCNA said consular officials from the Swedish Embassy in Pyongyang visited Pae on Friday. Sweden represents the United States in diplomatic affairs in North Korea since Washington and Pyongyang do not have diplomatic relations.
Karl-Olof Andersson, Sweden's ambassador to North Korea, told The Associated Press he could not comment on the case and referred the matter to the U.S. State Department.
The State Department was not immediately able to provide any additional information about the report.
The operator of a Korean language website for the Korean community in the Northwest, Chong Tae Kim of JoySeattle.com, said the detainee's father lives in Korea and his mother lives in Lynnwood, Washington.
"She hopes the State Department and Swedish Embassy help with his release," he said Friday. "She's trying not to speak to reporters, fearing that could affect her son's release."
The office of U.S. Rep. Suzan DelBene says it has reached out to the mother and is pressing the State Department for information.
"We are very concerned about it and seeing what can be done on our end to help with this," said spokesman Viet Shelton.
State Department spokesman Patrick Ventrell on Friday would only say that they were aware of the detention and that Swedish Embassy in Pyongyang is providing consular services.
"We can, indeed, confirm that a U.S. citizen has been detained in North Korea," Ventrell said, adding that he could not say more because of privacy restrictions.
In Seoul, the Segye Ilbo newspaper reported last week that Bae had been taking tourists on a five-day trip to the North when he was arrested. The newspaper cited unidentified sources.
News of the arrest comes as North Korea is celebrating the launch of a satellite into space on Dec. 12, in defiance of calls by the U.S. and others to cancel a liftoff widely seen as an illicit test of ballistic missile technology.
The announcement of the American's detainment could be a signal from the North that it wants dialogue with the United States, said Cheong Seong-chang, an analyst at the private Sejong Institute in South Korea. He said trips by former U.S. Presidents Bill Clinton and Jimmy Carter to North Korea to secure the release of other detained Americans created a mood for U.S.-North Korea talks.
"North Korea knows sanctions will follow its rocket launch. But in the long run, it needs an excuse to reopen talks after the political atmosphere moves past sanctions," Cheong said.
Cheong said he expects that the American will be tried and convicted in coming months. North Korean leader Kim Jong Un has the power to grant amnesty and will exercise it as a bargaining chip, Cheong said.
State Department spokeswoman Victoria Nuland said earlier this week that Washington had been trying to reach out to Kim.
"Instead, that was met not only with an abrogation of agreements that had been made by the previous North Korean regime, but by missile activity both in April and in December," she told reporters.
She said Washington had no choice but to put pressure on Pyongyang, and was discussing with its allies how to "further isolate" the regime.
In April 2009, a North Korean rocket launch took place while two American journalists, Laura Ling and Euna Lee, were in North Korean custody after allegedly trying to sneak into the country across the Tumen River dividing the North from China.
They were sentenced to 12 years of hard labor before being released on humanitarian grounds after Clinton flew to Pyongyang to negotiate their release.
Subsequently, three other Americans were arrested and eventually released by North Korea. All three are believed to have been accused of illegally spreading Christianity.
North Korea has several sanctioned churches in Pyongyang but frowns on the distribution of Bibles and other religious materials by foreigners. Interaction between North Koreans and foreigners is strictly regulated.

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Gunmen kill 11 Pakistanis, Afghans in SW Pakistan

QUETTA, Pakistan (AP) — An official says gunmen have killed eleven Pakistanis and Afghans in a border town of southwestern Pakistan as they were trying to cross to Iran to travel on to Europe as illegal migrants.
Local government official Zubair Ahmed said Saturday the shooting took place late Friday in the Sunsar town of southwestern Baluchistan province.
He said the dead and wounded were Afghans and Pakistanis.
It was not immediately clear who was behind the attack, but hundreds of such Pakistanis and Afghans are captured by Iranian border guards every year for illegally trying to travel to Europe to find better jobs.
Iran deports such detainees after questioning.
Quetta is the capital of impoverished Baluchistan province, where nationalist groups have also waged a low-level insurgency.

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People flee Japan nuke disaster to faraway Okinawa

NAHA, Japan (AP) — Okinawa is about as far away as one can get from Fukushima without leaving Japan, and that is why Minaho Kubota is here.
Petrified of the radiation spewing from the Fukushima Dai-ichi nuclear plant that went into multiple meltdowns last year, Kubota grabbed her children, left her skeptical husband and moved to the small southwestern island. More than 1,000 people from the disaster zone have done the same thing.
"I thought I would lose my mind," Kubota told The Associated Press in a recent interview. "I felt I would have no answer for my children if, after they grew up, they ever asked me, 'Mama, why didn't you leave?'"
Experts and the government say there have been no visible health effects from the radioactive contamination from Fukushima Dai-ichi so far. But they also warn that even low-dose radiation carries some risk of cancer and other diseases, and exposure should be avoided as much as possible, especially the intake of contaminated food and water. Such risks are several times higher for children and even higher for fetuses, and may not appear for years.
Okinawa has welcomed the people from Fukushima and other northeastern prefectures (states) affected by the March 11, 2011, earthquake and tsunami that set off the nuclear disaster. Okinawa is offering 60,000 yen ($750) a month to help relocating families of three or four pay the rent, and lower amounts for smaller families.
"We hope they feel better, maybe refreshed," said Okinawan official Masakazu Gunji.
Other prefectures have offered similar aid, but Okinawa's help is relatively generous and is being extended an extra year to three years for anyone applying by the end of this year.
Most people displaced by the disaster have relocated within or near Fukushima, but Okinawa, the only tropical island in Japan, is the most popular area for those who have chosen prefectures far from the nuclear disaster. An escape to Okinawa underlines a determination to get away from radiation and, for some, distrust toward Tokyo Electric Power Co., the utility that operates Fukushima Dai-ichi.
Kazue Sato lived in fear of radiation because the roof of her home in Iwaki, a major city in Fukushima, was destroyed by the earthquake.
And so she moved with her husband, a chef, back to Okinawa, where she had grown up. She now lives in her grandparents' home and hopes to turn it into a coffee shop with her husband.
But Sato is still struggling with depression, especially because her old friends criticized her for what they thought were her exaggerated fears about radiation. She struggles with a sense of guilt about having abandoned Fukushima.
"Little children have to wear masks. People can't hang their laundry outdoors," she said. "Some people can't get away even if they want to. I feel so sorry for them."
Sato and Kubota are joining a class-action lawsuit being prepared against the government and Tokyo Electric on behalf of Fukushima-area residents affected by the meltdowns. It demands an apology payment of 50,000 yen ($625) a month for each victim until all the radiation from the accident is wiped out, a process that could take decades, if ever, for some areas.
Independent investigations into the nuclear disaster have concluded that the Fukushima Dai-ichi plant was unprepared for the massive tsunami, in part because of the nuclear industry's cozy relationship with government regulators.
"We think people have the right to live in an environment not polluted by radiation that may harm their health, and that right has been violated by this accident," Izutaro Managi, one of the case's lawyers, said in a meeting earlier this month for plaintiffs in Naha, a major Okinawan city.
Japan's statute of limitations requires that the lawsuit be filed no later than March 11, 2014. About 20 of the evacuees in Okinawa have signed on to the lawsuit, which has gathered 100 other people in the three weeks since it began.
Kubota, who now works part time for an Okinawa magazine publisher, said the problem is that no one is taking responsibility for the accident.
"Seeking accountability through a lawsuit may feel like such a roundabout effort. But in the end, it's going to be the best shortcut," she said.
She is getting health checkups for her children, fretting over any discovered problems, including anemia, fevers and nosebleeds.
Her fears are heightened by the fact that she and her children had lived in their car right after the disaster, which had liquefied the land and destroyed their home. They had unknowingly played outdoors while the nuclear plants had been exploding, she recalled.
The disaster ended up separating her family. Her husband refused to leave his dentist practice in Ibaraki Prefecture. They argued over whether to relocate, but she knew she had to leave on her own when he said: "There is nothing we can do."
These days, he visits her and their two boys, ages 8 and 12, in her new apartment in Okinawa on weekends. He sends her money, something he didn't do at first.
"I wake up every day and feel thankful my children are alive. I have been through so much. I have been heartbroken. I have been so afraid," she said.

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Why scandal-tinged Berlusconi still beloved of many Italians

ROME (Reuters) - They call themselves "the club". A doctor, a business-owner, pensioners and engineers - united by their support for one of Europe's most controversial politicians, Silvio Berlusconi.
"We are all Berlusconiani. We do not want Monti. We don't want someone who takes orders from Brussels," said teacher Annalisa Lillo, 49, in the Rome antiques shop where the club meets to discuss politics in the evenings.
Outsiders might struggle to understand the continued appeal of the four-time, scandal-ridden prime minister, driven from office a year ago at the height of Italy's economic crisis.
But while support for his People of Freedom party is half what it once was, it still commands 16.5 percent and remains a formidable player as Italy prepares for elections in February.
Fuelled by cake and glasses of sparkling wine, members lobby politicians, attend pro-Berlusconi rallies and scrub off anti-Berlusconi graffiti in the neighborhood where they meet.
On one evening, about 20 men and women between 25 and 75 sat in a circle on assorted antique furniture discussing Berlusconi's return to the leadership of the PDL.
"He knows the pulse of Italians," said 39-year old engineer Alessio Brugnoli. "Berlusconi is the obligatory choice."
THAT OLD MAGIC
One poll showed PDL support rose three points in the week after he announced his candidacy, proving there is life in the old man yet and it would be rash to underestimate him.
"Berlusconi is an unusual politician. He's a businessman. He's not in politics to claim expenses and get an official car. He lives, works to help businesses," pensioner Augusto Senesi said. "You cannot say he damaged the country."
The media mogul's campaign began in earnest this week when he rallied his ample resources to fill the airwaves with the time-worn tenets of his sales pitch: anti-tax, pro-business, and anti-communist.
He is making the most of the fact that on Monday, Italians had to pay a hated property tax re-introduced by Monti's government. Berlusconi has promised to cancel it.
He illustrated what he sees as a communist threat in an interview on Sunday with a story about a Soviet Union family massacred to force them to reveal the whereabouts of a bishop.
This might seem odd to those outside Italy but it emphasized the Marxist origins of much of the country's political left and deftly played on old fears among his conservative voters.
His enormous media control ensures that his point of view - for example, that the many court cases against him stem from a left-wing judicial conspiracy - get substantial airing.
But, as it did in the Arab Spring protests, new media are becoming an unfettered forum for alternative views in Italy.
After a microphone picked up Berlusconi instructing his interviewer what question to ask next, thousands of mocking Tweets kept the journalist's name trending on Twitter.
CONSPIRACIES
On one issue the club is unanimous: that the replacement of Berlusconi with the Monti government was a coup d'etat by nebulous forces in Brussels and possibly orchestrated with the deliberate collusion of financial markets.
"Berlusconi was democratically elected. This has been a dark phase of democracy. Twelve months of horror. Europe set us up," said 34-year-old engineer Marco Ajello.
Berlusconi insists he supports a strong pan-European foreign policy, but he intersperses those claims with tirades against "German-imposed austerity" and the "rigging" of the European Union to favor northern member countries.
"Look, if you add it up, over the last 10 years Italy has lost out from the euro," engineer Ajello said.
Berlusconi had said he would withdraw to support Monti if he ran at the head of coalition of the centre-right and moderates.
Yet this thought horrifies the club, who believe the PDL lost support because it cooperated with Monti - the darling of the international financial community - for too long.
As Italy awaits Monti's decision on whether he will run, expected this weekend, polls show he commands much more support among leftist voters than on the right.
He could split the main centre-left Democratic Party's (PD) dominant voting bloc of more than 30 percent, says James Walston, politics professor at the American University of Rome.
Berlusconi is now on trial on charges of paying for sex with an minor during one of the so-called "Bunga Bunga" parties at his plush residences.
He has denied any wrongdoing in that case and in others where he has been accused of corruption and tax fraud, decrying what he says is a politically motivated war against him by leftist magistrates.
Many Italians do not believe him. But as far as the zealots of "the club" are concerned, he is preaching to the converted.

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South Africa's soothing Ramaphosa leads ANC charm offensive

BLOEMFONTEIN, South Africa (Reuters) - South Africa's ruling ANC put its new No. 2 Cyril Ramaphosa at the head of a charm offensive on Friday as it sought to reassure both investors and a restless public it would tackle economic inequality without recourse to wholescale nationalization.
Days after his appointment as party deputy to President Jacob Zuma, who was re-elected ANC chief this week, the anti-apartheid hero and businessman laid out the party's strategic priorities.
Appearing at a business breakfast with Zuma and other ANC leaders elected at a conference in Bloemfontein, Ramaphosa stressed the ruling party backed a mixed economy model.
But he added the state would intervene to ensure the country's wealth was better shared.
"Within a mixed economy, the state has a role to play. It intervenes and the private sector also has a role," Ramaphosa said, wearing like Zuma a red tie with his dark business suit.
The return of Ramaphosa to the ANC leadership will allow the party to capitalize on his experience and reputation for integrity. His popularity rests on both his history as an anti-apartheid mineworkers' champion in the 1980s and his current pro-business credentials as South Africa's second wealthiest black entrepreneur.
The ANC had its 100th anniversary this year. But Nelson Mandela's liberation movement has been split by feuding and has faced a groundswell of popular anger against graft, cronyism and widespread poverty and unemployment in Africa's biggest economy.
Deadly strikes swept the mines this year in the worst labor violence since the end of apartheid in 1994. It led to damaging credit downgrades for South Africa and questions whether 70-year-old Zuma, who has faced a slew of corruption and personal scandals, can effectively lead the party and country.
Ramaphosa warmed to his new role on Friday as he finessed the ANC's main economic policy takeaway from Bloemfontein. This was a decision to shun "classic, wholesale nationalization" but for the state to intervene selectively in the economy where necessary in key areas such as mining and infrastructure.
Rejecting charges the ANC was "confused" on nationalization, whose defenders at the conference were soundly defeated, Ramaphosa invoked the party's 1955 Freedom Charter that declares "the people shall share in the wealth of the country".
"Now the ANC's duty is to make sure that is fulfilled, and fulfilling that would mean that in certain areas the state intervenes," he said, giving the examples of a state mining company set up by the government and intervention to ensure that prices of drugs for HIV/AIDS sufferers remain affordably low.
Ramaphosa's elevation was welcomed in business circles.
Moody's, which with another credit rating agency has punished South Africa for its mining and leadership woes, said the ANC platform looked "more investor- and business-friendly than had generally been anticipated prior to the conference".
South Africa's Business Day newspaper said in an editorial: "Mr. Ramaphosa's re-entry into party politics represents a victory for those dealing and negotiating in the real world, rather than in the world of ideological illusion."
WANTED: A PROSPEROUS SOUTH AFRICA
But the Chamber of Mines and Moody's said questions remained about how the government would intervene in the mining sector, and what additional taxes it might levy there. The ANC has also raised the idea of export curbs on minerals.
It also remained to be seen whether Ramaphosa, who has maintained a wealthy lifestyle in recent years far from his origins in the anti-apartheid workers' struggle, can connect with the mass of voters who are poor and unemployed.
His comeback puts him in line for a possible future bid for the South African presidency currently held by Zuma who, if he remains the party candidate, is virtually assured of re-election as head of state in the next national vote in 2014.
At this week's ANC conference, Zuma crushed a half-hearted leadership bid from Deputy President Kgalema Motlanthe, whose challenge grouped a loose alliance of opponents of the Zuma presidency. This included advocates of more radical policies such as nationalization and seizure of white-owned farm land.
Asked about the ANC's future ideological direction, Zuma replied: "Ideologically, we want a prosperous South Africa."
He also made clear he would not immediately replace Deputy President Motlanthe with Ramaphosa in the cabinet.
Zuma, who took the party leadership from former President Thabo Mbeki at a 2007 ANC conference, acknowledged one of the party's biggest tasks was to address the popular clamor for better services, improved livelihoods and more jobs.
"There's a huge backlog there we have to deal with," he said.
Although Zuma denied any internal purge of top figures who had opposed him, some of these, such as Human Settlements Minister Tokyo Sexwale and Sports Minister Fikile Mbalula, were dropped from the new ANC National Executive Committee (NEC).
Re-elected ANC Secretary-General Gwede Mantashe made clear the party took a dim view of attempts to divide it, for example from expelled former Youth League leader Julius Malema. "If you mess up the ANC, the ANC messes you up," he said.

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S.Africa's soothing Ramaphosa leads ANC charm offensive

BLOEMFONTEIN, South Africa (Reuters) - South Africa's ruling ANC put its new No. 2 Cyril Ramaphosa at the head of a charm offensive on Friday as it sought to reassure both investors and a restless public it would tackle economic inequality without recourse to wholescale nationalisation.
Days after his appointment as party deputy to President Jacob Zuma, who was re-elected ANC chief this week, the anti-apartheid hero and businessman laid out the party's strategic priorities.
Appearing at a business breakfast with Zuma and other ANC leaders elected at a conference in Bloemfontein, Ramaphosa stressed the ruling party backed a mixed economy model.
But he added the state would intervene to ensure the country's wealth was better shared.
"Within a mixed economy, the state has a role to play. It intervenes and the private sector also has a role," Ramaphosa said, wearing like Zuma a red tie with his dark business suit.
The return of Ramaphosa to the ANC leadership will allow the party to capitalise on his experience and reputation for integrity. His popularity rests on both his history as an anti-apartheid mineworkers' champion in the 1980s and his current pro-business credentials as South Africa's second wealthiest black entrepreneur.
The ANC had its 100th anniversary this year. But Nelson Mandela's liberation movement has been split by feuding and has faced a groundswell of popular anger against graft, cronyism and widespread poverty and unemployment in Africa's biggest economy.
Deadly strikes swept the mines this year in the worst labour violence since the end of apartheid in 1994. It led to damaging credit downgrades for South Africa and questions whether 70-year-old Zuma, who has faced a slew of corruption and personal scandals, can effectively lead the party and country.
Ramaphosa warmed to his new role on Friday as he finessed the ANC's main economic policy takeaway from Bloemfontein. This was a decision to shun "classic, wholesale nationalisation" but for the state to intervene selectively in the economy where necessary in key areas such as mining and infrastructure.
Rejecting charges the ANC was "confused" on nationalisation, whose defenders at the conference were soundly defeated, Ramaphosa invoked the party's 1955 Freedom Charter that declares "the people shall share in the wealth of the country".
"Now the ANC's duty is to make sure that is fulfilled, and fulfilling that would mean that in certain areas the state intervenes," he said, giving the examples of a state mining company set up by the government and intervention to ensure that prices of drugs for HIV/AIDS sufferers remain affordably low.
Ramaphosa's elevation was welcomed in business circles.
Moody's, which with another credit rating agency has punished South Africa for its mining and leadership woes, said the ANC platform looked "more investor- and business-friendly than had generally been anticipated prior to the conference".
South Africa's Business Day newspaper said in an editorial: "Mr. Ramaphosa's re-entry into party politics represents a victory for those dealing and negotiating in the real world, rather than in the world of ideological illusion."
WANTED: A PROSPEROUS SOUTH AFRICA
But the Chamber of Mines and Moody's said questions remained about how the government would intervene in the mining sector, and what additional taxes it might levy there. The ANC has also raised the idea of export curbs on minerals.
It also remained to be seen whether Ramaphosa, who has maintained a wealthy lifestyle in recent years far from his origins in the anti-apartheid workers' struggle, can connect with the mass of voters who are poor and unemployed.
His comeback puts him in line for a possible future bid for the South African presidency currently held by Zuma who, if he remains the party candidate, is virtually assured of re-election as head of state in the next national vote in 2014.
At this week's ANC conference, Zuma crushed a half-hearted leadership bid from Deputy President Kgalema Motlanthe, whose challenge grouped a loose alliance of opponents of the Zuma presidency. This included advocates of more radical policies such as nationalisation and seizure of white-owned farm land.
Asked about the ANC's future ideological direction, Zuma replied: "Ideologically, we want a prosperous South Africa."
He also made clear he would not immediately replace Deputy President Motlanthe with Ramaphosa in the cabinet.
Zuma, who took the party leadership from former President Thabo Mbeki at a 2007 ANC conference, acknowledged one of the party's biggest tasks was to address the popular clamour for better services, improved livelihoods and more jobs.
"There's a huge backlog there we have to deal with," he said.
Although Zuma denied any internal purge of top figures who had opposed him, some of these, such as Human Settlements Minister Tokyo Sexwale and Sports Minister Fikile Mbalula, were dropped from the new ANC National Executive Committee (NEC).
Re-elected ANC Secretary-General Gwede Mantashe made clear the party took a dim view of attempts to divide it, for example from expelled former Youth League leader Julius Malema. "If you mess up the ANC, the ANC messes you up," he said.

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Fiscal cliff setback rattles shares, euro

LONDON (Reuters) - Global stock markets weakened on Friday and both the euro and gold slipped, as a new setback in talks to avert a U.S. fiscal crisis and evidence of Europe's ongoing economic difficulties stoked investor nerves.

A proposal from Republican leader John Boehner to avoid the so-called fiscal cliff failed to get support from his party on Thursday, casting fresh uncertainty over talks to avoid across-the-board tax hikes and spending cuts that could push the U.S. economy into recession in 2013.

Anxiety was exacerbated by weaker-than-expected data from key corners of Europe, as German consumer morale dropped to its lowest level in more than a year, Britain revised down growth figures and Sweden slashed its economic forecasts.

The combined worries prompted widespread selling in most major stock markets and saw investors head for traditional safe-haven assets.

The dollar and yen and U.S. and German Government bonds all rose as falls on London <.ftse>, Paris <.fchi> and Frankfurt <.gdaxi> equity markets compounded tumbles in Asia to leave MSCI's global index <.miwd00000pus> down 0.4 percent.

Futures prices also pointed to sharp falls when trading resumes on Wall Street later, with the S&P 500 Dow Jones and Nasdaq 100 all seen losing around 1.4 percent.

Nevertheless, European and global share indices remain on course for their fifth straight week of gains. In the U.S., the S&P 500 is up about 1.8 percent so far this week and 14.8 percent on the year.

"Risk assets look vulnerable over the holiday trading period. The recent performance of key benchmarks has priced in a satisfactory outcome to the U.S. fiscal discussions, which is far from a done deal," said Peel Hunt strategist Ian Williams.

Boehner will hold a news conference at 10 a.m. ET (1500 GMT), likely to focus on the budget wrangling.

Bickering U.S. politicians have only 10 days left to resolve their differences and prevent automatic tax hikes and spending cuts worth around $600 billion kicking in in the new year.

Most observers are still assuming the two sides will avert disaster but tensions are likely to intensify over the normally quiet Christmas period as the deadline draws near.

"The markets are likely to interpret this as signaling even tougher negotiations in coming days," Mohamed El-Erian, chief executive of bond giant PIMCO, told Reuters.

CLIFF HANGER

Oil and gold were also caught up in the U.S. disappointment. Brent crude oil fell more than $1 per barrel before clawing back some ground. Bullion pared earlier losses but remained on track for its steepest weekly drop since June.

"The market volume is thin amidst all these uncertainties, and the year is coming to an end. Many of the investors prefer to take profits and just leave the market," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore.

In currency markets, strengthening appetite for safe-haven assets saw the yen firm and the highly liquid U.S. dollar <.dxy> climb 0.2 percent against a basket of key currencies.

At the same time, concerns over the U.S. impasse dented demand for so-called high-beta currencies that tend to rise or fall with the global growth outlook, such as the Australian dollar and euro.

Weaker German data, which saw consumer confidence unexpectedly drop for a fourth month running, kept downward pressure on the euro which retreated further from a 8-1/2 month high hit earlier in the week, to stand at $1.3200.

"This is a classic risk-off trading environment where the yen did best, followed by the dollar, and higher-beta currencies underperformed," said Audrey Childe-Freeman, head of FX strategy at BMO Capital Markets.

"We have had a very good run in the euro and what we are seeing at the moment is a little bit of profit-taking triggered by disappointment in the fiscal cliff discussions."

CAUTION

Caution also prevailed in Europe's bond markets, where German government bonds climbed at the expense of recently resurgent euro zone periphery debt.

Other safe-haven bonds followed the trend, with U.S. 10-year Treasury yields dipping from an 8-week high hit this week to 1.74 percent and 10-year Japanese yields inching down 0.765 percent.

Jim Barnes, senior fixed income manager at National Penn Investors Trust Co. in Wyomissing, Pennsylvania, saw Treasuries continuing to gain once U.S. markets open later, but expected a correction by the end of the day.

"Treasury yields will likely fall Friday morning and will begin to reverse course in the afternoon as investors become more optimistic a deal will be reached," Barnes said.

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UK data point to meager growth, public finances worsen

LONDON (Reuters) - Britain's dominant services sector posted meager growth in October, which may be just enough for the economy as a whole to avoid contraction in the last three months of 2012.
However, public borrowing figures also released on Friday showed that finance minister George Osborne has a lot of catching up to do to meet updated forecasts published earlier this month given the poor economic outlook.
The Office for National Statistics said services output grew 0.1 percent on the month in October, recovering from a 0.6 percent drop in September.
However, this is far behind the 1.2 percent growth that the sector enjoyed in the third quarter, which helped drive an overall 0.9 percent expansion in the economy as a whole in the three months to the end of September.
"It's not a great number but it is positive and it is better than the decline that had been expected," Ross Walker, an economist at Royal Bank of Scotland, said about October's services number.
"On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative."
Revised ONS figures published on Friday confirmed that third-quarter gross domestic product growth was the strongest since the third quarter of 2007. But much of that reflected a one-off boost from the London Olympics and a rebound from the second quarter when an extra public holiday dented output.
GDP in the third quarter was unchanged on the year, a small revision from the fall that the ONS had previously estimated.
The Bank of England and the government's forecasting body, the Office for Budget Responsibility, have both said a small quarterly contraction in the fourth quarter is likely.
Britain suffered its second recession since the financial crisis between late 2011 and mid-2012, and overall has recovered much more slowly since 2009 than most other big economies.
The BoE and other forecasters expect little in the way of a pick-up in the immediate future, given the weak global economy, government spending cuts and relatively high inflation.
"The economy faces a difficult-looking 2013 and we suspect it will only manage to eke out growth of 1.1 percent," said Howard Archer, economist at IHS Global Insight.
Recent ONS data has shown contraction in the retail and industrial sectors in the first part of the fourth quarter, though construction - which has been a major drag on GDP - appears to be stabilizing.
A GfK consumer confidence survey released earlier on Friday showed an unexpectedly sharp fall in morale.
Friday's GDP figures showed that the household savings ratio rose to 7.7 percent, its highest since the third quarter of 2009, suggesting an unwillingness to spend and a desire to pay down debts.
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One bright spot was third-quarter current account data, which showed Britain's deficit with the rest of the world narrowed more than expected to 12.8 billion pounds, equivalent to 3.3 percent of GDP, from 17.4 billion in the second quarter.
But Britain's government borrowed more than expected in November as government spending rose while a weak economy meant tax receipts fell compared to a year earlier.
Public sector net borrowing excluding financial sector interventions - the government's preferred measure - rose last month to 17.5 billion pounds from 16.3 billion in November 2011.
This was above economists' average forecast for 16.0 billion pounds and took borrowing in the fiscal year to date to 92.7 billion pounds, excluding the transfer of Royal Mail pension assets, up from 84.4 billion at the same point in 2011.
The OBR forecast earlier this month that the borrowing measure would reach 108.5 billion pounds this financial year, equivalent to 6.9 percent of GDP.
To meet this forecast, the deficit would have to fall 10.8 percent on the year, but so far in 2012, it is 9.9 percent higher than last year.
When the government came to power in 2010, it planned to largely eliminate the budget deficit by 2015 with spending cuts and tax rises. But a weak economy has since forced it to extend austerity until 2018.

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