(Financial Times) — Iran’s oil minister said on Sunday that oil sales to “some countries” would be halted soon, amid pressure from the parliament that the government should pre-empt a looming European embargo.

“Iran has a market for its oil exports even with cuts [in sales] to Europe and will face no problem in this regard,” Rostam Ghasemi told local journalists.

But the Iranian parliament failed to pass a proposed law over the weekend that would have banned oil exports to the European Union, apparently because of differences between the legislative body and the government of Mahmoud Ahmadi-Nejad.

Some Iranian parliamentarians said last week that the legislative body would pass such a law on Sunday in order to halt abruptly its oil sales to the European Union.

The export ban would have deprived European states of the time they need to find substitute sources of oil, and would probably have hit the economically weak countries of southern Europe.

U.S. carrier moves into Persian Gulf

Emad Hosseini, spokesman for the Iranian parliament’s energy committee, said consultations were being held with concerned officials in the government, “to see where we stand and in what situation the contracts are”.

The European Union approved a ban on oil imports from Iran last Monday but delayed its full implementation until July 1. The deadline was intended to give Greece, Spain and Italy enough time to find alternative supplies from other oil producers such as Saudi Arabia, Russia and Iraq.

Mr Hosseini still expects the drafting of the bill to be completed this week and then put before the parliament for approval. He gave no details on the timing or contents of the bill.

The talk of a pre-emptive ban, even if approval of the bill has been delayed, has already affected the physical crude oil market, traders and analysts said.

Another member of the energy committee, Ali Adyani-Rad, said any such bill would need further work to ensure it could “slap the EU strongly in the face”.

“The government is not happy with the way the parliament is going to stop oil exports, which is self-damaging,” said one oil analyst. “There might be some compromise by which the parliament takes the symbolic move and sends its political message without hurting Iran’s economy.”

The EU bought an average of 600,000 barrels a day of Iranian oil last year, which accounts for about 20 per cent of Iran’s oil sales. China is Iran’s biggest oil customer, importing about 500,000b/d of Iran’s oil.

Ahmad Ghalebani, the head of the National Iranian Oil Company, said on Sunday that Iran could afford to cut its oil exports to Europe because it had “many other customers”. But he warned western powers that the embargo could push up oil prices to between $ 120 to $ 150 a barrel.

“If the oil embargo against Iran is enforced, the European states will lose, but we are ready for a cut in oil sales to Europe,” Mr Ghalebani said.

The impact of a ban could be felt very quickly in the Mediterranean as Iran ships crude from the terminal of Sidi Kerir, near Alexandria on the Egyptian coast. From Sidi Kerir to the oil refineries of Spain, Italy and Greece, tankers need between two and five days, far fewer than the traditional two to three weeks from the oil ports of the Gulf.

The price premium for Middle East and Russian crude, the main alternative to Iranian oil, saw a sharp price increase in the physical market last week as some refiners pre-positioned.

The EU’s fresh punitive measures, which also include restrictions on financial transactions, are aimed at forcing Iran to stop enriching uranium to ensure its nuclear programme is not for military use. Tehran insists the programme is merely for peaceful purposes.

Iran allowed a ranking inspection team from the International Atomic Energy Agency (IAEA) to enter Tehran on Sunday for a three-day visit. The team is headed by Herman Nackaerts, the IAEA deputy director-general, and is expected to demand access to nuclear sites and seek answers from Iran on the last report by the UN nuclear watchdog, which said Iran had worked on a nuclear weapon design.

Ali Akbar Velayati, a senior adviser to Iran’s supreme leader Ayatollah Ali Khamenei, who is believed to have the last say on nuclear policies, said the IAEA team could carry out their inspections. But he stressed that there was “no change in Iran’s principles vis-à-vis the nuclear issue” and insisted that the country would not give up its “peaceful [nuclear] activities”.

Additional reporting by Javier Blas in London

© The Financial Times Limited 2012

(Financial Times) — There was a whiff of inevitability about the decision by Stephen Hester, the Royal Bank of Scotland chief executive, to waive his £1M ($ 1.57M) bonus late last night, as the political and media furor mounted.

People familiar with Hester’s thinking said Labour leader Ed Miliband’s move to force a Commons vote on the controversial award was the final straw in an escalating drama that was jeopardizing his credibility to lead an institution still in the midst of a difficult restructuring. “It’s just too much aggravation,” said one person close to the embattled chief executive.

Since RBS first floated its intentions 11 days ago of awarding Hester a bonus of as much as £1.6M ($ 2.5M) for his work in 2011 — the maximum he would have been entitled to under his remuneration plan — both the government and the state-backed bank have proved easy fodder for opposition politicians.

David Cameron’s month-long campaign against “excessive executive pay” and calls for shareholder activism to rein in lavish bonuses looked increasingly in danger of unravelling, even as the prime minister sought to pin responsibility for the package on the previous government.

The £1M bonus figure RBS ultimately came up with for Hester, half of what he received for 2010, was viewed as a compromise figure, engineered with the government to reflect the bank’s weaker performance and a 48% slump in its share price.

That Cameron and George Osborne, chancellor, failed to head off the furor over Hester’s pay has surprised some experienced politicians and senior bankers, given the intensity of public anger over bankers’ bonuses since the crisis.

CEO: Large bonuses ‘rewards for success’

In contrast to the United States, where bank bonuses such as the $ 17M in restricted stock and options awarded this month to Jamie Dimon, JPMorgan Chase chief executive, have attracted less scrutiny, the City’s perceived culture of “reward for failure” remains a concern for the British public.

As late as yesterday evening, RBS board members were saying the bank was adamant that Hester deserved his award. The chief executive, who has grown accustomed to a life as a political football, was said to be determined to take it.

Hester’s volte-face, however, is unlikely to divert attention from a series of large payouts RBS is expected to make in the coming weeks to other senior executives, including John Hourican, head of the bank’s investment banking business, and Bruce van Saun, finance director.

Hourican, an RBS veteran who received nearly 29m deferred shares and options in 2009 shortly after taking up his role as head of the global banking and markets division, has not yet had any communications from the board over whether he is still entitled to the full award, which vests in April, according to senior bank executives.

However, according to one person close to Hourican, he believes he has met all the targets associated with the scheme and would find any attempt by the board to claw it back “pretty offensive.”

The share portion of his deferred 2009 bonus, linked at the time to a restructuring of the investment bank, is worth just under £6m at Friday’s closing share price of 27.7 pence. The option portion, with an exercise price of 28 pence, is currently valueless.

© The Financial Times Limited 2012

(Financial Times) — Greece’s finance minister angrily rejected a German plan for the eurozone to impose a budget overseer onto Athens in return for a new €130bn bail-out, saying it would improperly force his country to choose between “financial assistance” and “national dignity”.

Crucial weekend for Greek debt talks

A deal is essential to finalising the new Greek bail-out, which must be completed before a €14.4bn bond comes due on March 20 or Greece would become the first developed economy to default in nearly 60 years.

“If the process is not completed successfully, we will be faced with the spectre of bankruptcy that would have grave consequences for society, and especially for the poor,” Lucas Papademos, the Greek prime minister, said after meeting Greek political leaders on Sunday.

EU and International Monetary Fund officials have already presented the Greek government with a 10-page list of “prior actions” Athens must take before being granted the new bail-out. The list, obtained by the Financial Times, includes cutting 150,000 public sector jobs within three years and cutting this year’s budget deficit by a further 1 per cent of economic output.

To get Greece’s debt down to 120 per cent of economic output by 2020, the IMF has insisted more must be done. A senior EU official said that talks which focused on whether European lenders or the ECB would shoulder that burden were now expected to stretch into mid-February.

Eurozone leaders, led by Germany’s Angela Merkel, want Monday’s summit in Brussels to focus on agreeing a new treaty to enshrine fiscal discipline across the bloc. Finance ministry officials will resume talks on Greece later this week.

The German plan, which was circulated on Friday and would also force Greece to pay its debt obligations before spending any money on normal government expenditures, caught Mr Papademos and other eurozone governments by surprise. Officials said it was unlikely to be adopted.

“The Germans have a lot of influence but that goes a little beyond the limits the outer member states could support,” said a senior official involved in the discussions. “If you went with that model you’d do away with the normal democratic decision-making in a member state.”

© The Financial Times Limited 2012

London (CNN) — A trader accused of fraud over a $ 2.3 billion loss in unauthorized trading reported by Swiss banking giant UBS pleaded not guilty in a London court Monday.

The trader, Kwaku Adoboli, was ordered held in custody, and his trial was scheduled to begin September 3.

Adoboli faces a charge of fraud by abuse of position between January and September 2011, and he also faces two counts of false accounting.

His lawyer said he was “sorry beyond words” in a previous court appearance in September.

The loss would potentially be among the largest ever to a bank in unauthorized trading.

The trader was charged in September, a day after he was arrested in connection with the discovery of unauthorized deals at UBS.

Britain’s Financial Services Authority, the Serious Fraud Office and the Crown Prosecution Service are also involved in investigating the case.

UBS said no client positions were affected by its $ 2.3 billion loss.

UBS posted a profit in the third quarter despite “the unauthorized trading incident,” it said in its quarterly report, but its investment banking division recorded a loss of 650 million Swiss francs ($ 708 million).

UBS chief executive Oswald J. Gruebel resigned two days after Adoboli was charged, though bank chairman Kaspar Villiger said in a statement that the bank regretted Gruebel’s decision.

Gruebel “feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity,” Villiger said.

CNN’s Theo Nikolaou contributed to this report.

(CNN) — The chief executive of JPMorgan says he can understand some of the grievances of the Occupy movement, describing some of Wall Street’s actions as “a total disgrace.”

Speaking with CNN’s Richard Quest at the World Economic Forum in Davos, Switzerland, JPMorgan CEO Jamie Dimon was asked if he was worried about growing antagonism towards the rich.

“It’s becoming an entrenched view, but here’s the parts I agree with,” he said. “People are angry because a lot of people in Wall Street made a lot of money as companies went down the tubes, and I agree with them. That’s a total disgrace.”

He stressed his firm had acted responsibly. “We never had special severance packages and stuff like that… So a lot of new rules being promulgated, we were always doing them.”

Dimon said he was concerned about the gap between rich and poor. “I do think we’re all better off if society gets increasingly equitable. The question we’ve got to deal with is, how do you do that?”

He advocated progressive taxation, and a focus on “giving people better opportunities.”

“In the United States, half the kids in inner city schools don’t graduate — that’s the biggest sin we make in our country right there.”

Madrid (CNN) — Spanish airline Spanair went bust early Saturday, forcing many passengers to find seats on flights with other airlines at short notice.

Spanair “announced that it has ceased its operations, and thus, it has suspended all its flights from 2 a.m. Saturday (8 p.m. ET Friday),” Spanish airport operator AENA said on its website.

The airline said its last flight had landed at 10 p.m. Friday.

“Because of a lack of visible financing in the next couple of months, the company has chosen to cease the operation of its flights as a prudent and secure measure, and it will now take all legal pertinent measures,” Spanair said in a statement.

“The management of Spanair is sorry and apologizes to all those who are affected by this situation.”

A spokeswoman at Madrid’s Barajas Airport said there were not large numbers of stranded passengers there, and that other airlines have been able to get passengers on to other flights.

A spokesman for Barcelona’s El Prat airport said about 20 Spanair planes were sitting on the tarmac at the old terminal.

Normally there would have been 27 outbound Spanair flights from the airport Saturday, and passengers on 15 of them have been able to get other flights with other companies, the spokesman said.

The airport has received 105 complaints from passengers wanting their money back, he said.

A special area has been set up at the airport where Spanair passengers have been able to get help but they have not been gathering in large numbers, he said.

Spanair, which is headquartered in Barcelona, said those who were due to fly with it should get in touch via phone or its website for more information.

Spanish airline Iberia, the country’s largest, said it was working closely with local and national authorities to draw up measures to ease the situation.

Iberia “has implemented a contingency plan, deploying a large team that is now working intensely to help resolve this situation on the best possible terms for Spanair customers.”

The measures include special fares for flights over the next week. The airline may also lay on extra flights to cope with extra demand on certain routes, it said.

The Catalan authorities said Vueling and Air Europa would also offer special fares and additional flights to help Spainair customers.

Scandanavian airline SAS, which used to own Spanair and still has a partial share in it, said its results would be down by about $ 252 million as a result of the airline’s bankruptcy.

CNN’s Al Goodman reported from Madrid and Per Nyberg from London.

(Financial Times) — The German government wants Greece to cede sovereignty over tax and spending decisions to a eurozone “budget commissioner” to secure a second €130bn bail-out, according to a copy of the proposal obtained by the Financial Times.

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders.

The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.

“Budget consolidation has to be put under a strict steering and control system,” the proposal reads. “Given the disappointing compliance so far, Greece has to accept shifting budgetary sovereignty to the European level for a certain period of time.”

Athens would also be forced to adopt a law permanently committing state revenues to debt service “first and foremost”.

The German plan, circulated on Friday afternoon to finance ministry officials from eurozone countries who make up the so-called “euro working group”, underscores the depths of mistrust between Greece and its European Union lenders.

Despite the appointment of economist Lucas Papademos as technocratic prime minister in November, attitudes towards Greece within the EU have continued to worsen. European officials privately say that there has been little movement on public sector reforms under Mr Papademos.

A senior Greek finance ministry official said Athens was unaware of the proposal and could not comment. A German finance ministry spokesman declined to comment.

Greek voters have already expressed anger about EU attempts to assist in implementing reforms. Horst Reichenbach, the German national who heads an EU task force to assist Greece, was depicted in German military garb by leftwing Greek newspapers when he arrived last year.

Under the new German plan, Athens would only be allowed to spend on the normal functioning of its government after servicing its debt. If such a law is adopted, the proposal states, financial markets and other creditors would be reassured that defaults would not occur in the future.

“If a future [bail-out] tranche is not disbursed, Greece cannot threaten its lenders with a default, but will instead have to accept further cuts in primary expenditures as the only possible consequence of any non-disbursement,” the document said.

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of “prior actions” Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

The document, dated Monday, also calls for major budget cuts in defence, healthcare and “entity closures” to bring down this year’s budget deficit. The document said the preliminary estimate for the 2012 deficit target is about 1 per cent of economic output — implying swinging cuts, since previous estimates by lenders put this year’s budget deficit at 7 per cent.

Negotiations between Athens and EU-IMF officials this week have been stormy. On Friday, talks broke up without a deal on two elements of the EU-IMF plan: a request that Greece’s €750 monthly minimum wage be reduced, as well as elimination of the two-month salary bonus granted to private sector workers as an annual bonus.

George Koutroumanis, the labour minister, instead backed a joint counterproposal by employers and trade unions for a three-year wage freeze, arguing wage cuts would plunge Greece into a deeper recession.

© The Financial Times Limited 2012

(Financial Times) — The number of Spaniards without jobs rose by more than half a million last year to reach 5.27m, or 22.85 per cent of the workforce, in the final quarter, according to the National Statistics Institute (INE).

The figures, not seasonally adjusted, confirm Spain’s jobs record as by far the worst among big eurozone economies following the collapse of the Spanish housing construction bubble from 2007.

Mariano Rajoy, the Popular party prime minister who took power in December, is struggling to create jobs and stop the economy shrinking even as he reinforces the budgetary austerity plans agreed by the previous government with the European Union.

Spain’s jobless total hits 5.3 million

Spanish employers are pushing for a profound reform of the country’s rigid labour market as one way of encouraging the hiring of workers and so reducing the unemployment rate, which is more than double the eurozone average.

They also say the true situation is not as bad as portrayed in the statistics, because of widespread cheating by people seeking unemployment benefits while continuing to work, especially in southern Spain.

Andalusia, the big region in the south, recorded the highest unemployment rate of 31.23 per cent of the workforce, according to INE, while the Basque country in the north had the lowest rate of 12.61 per cent.

The quarterly survey showed 1.57m households have not a single family member in work.

© The Financial Times Limited 2012