Procter & Gamble raises outlook on soaring profit






NEW YORK: Procter & Gamble reported Friday profit more than doubled in the fiscal second quarter from a year ago, beating market expectations, and raised its forecasts for the year.

The US consumer goods giant said profit jumped 140 per cent due to strong productivity gains and the effects of cost-saving efforts.

Net income rose to US$4.1 billion, or US$1.39 per share, compared with the year-ago figure of US$1.7 billion, or 57 cents per share, the company said.

The results were well above analyst expectations.

Core earnings per share, which strips out special items and other items not related to sustainable earnings, were US$1.22, sharply more than the US$1.11 estimated.

Revenues came in at US$22.18 billion, above the US$21.91 billion forecast by analysts.

Shares in the Dow member were up 3.5 per cent at US$72.87 in late-afternoon trade in New York.

"Global market share trends improved as we continued to implement our growth strategy and made very good progress against our productivity and cost-savings goals," said chief executive Bob McDonald.

"Our strong first-half results have enabled us to raise our sales, earnings and share repurchase outlook for the fiscal year."

Procter & Gamble, which manufactures Pampers diapers, Head and Shoulders shampoo and other household products, said its growth was broad-based and that all five of its business segments grew organic sales by at least two per cent.

The biggest growth came in the company's baby care and family care segment with 5 per cent.

Procter & Gamble raised its full-year 2013 core earnings guidance to US$3.97-US$4.07 from the previous range of US$3.80-US$4.00.

In a conference call with analysts, P&G executives said the company had completed most of a previously announced downsizing to trim costs. In February, the company announced it was cutting 5,700 non-manufacturing posts. McDonald said that 5,500 of the job cuts had already been implemented.

At the end of October, the Cincinatti, Ohio-based company had a total of 126,000 employees. The group did not give figures for the end of December.

Procter & Gamble also raised its forecast of 2013 share repurchases to a range of US$5-6 billion, up from the previous range of US$4-6 billion.

- AFP/jc



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Sex addiction is on the rise in India

BANGALORE: Nirmal, 38, is a smooth-talking executive in a Delhi-based software firm. He is married, has two kids and leads a normal life. Except that by now he's had sex with 922 partners, both male and female.

"It started when I was in Class IX," he says. "I found myself suddenly hooked to porn. Then, one day, my friends arranged a girl for me. That was it. By the time I was 35, I had chatted with some 6,500 women. I would leave my number online and then hook up. But it was when I graduated to men that I started feeling mentally tortured. I wanted to stop."

Just that Nirmal, like the growing hordes of sex addicts in a country free, mobile and connected like never before, had nowhere to go for his de-addiction. Sex addiction, which can ruin families and lives, is on the rise in India with bureaucrats, politicians, film stars, doctors and students all falling prey to it. But there are very few clinics in the country that recognize this condition, treated as it is as the hush-hush disease.

Apart from the anxiety of the patients, in a country like India with little security for women (Delhi recorded a 24% rise in rape cases in 2012), it can also be downright dangerous. It's easy for these addicts to turn into sexual predators.

Steven Pinker, professor of psychology at Harvard, recently told TOI: "Ordinarily, men woo and seduce women. But in unregulated settings, and when men are desperate, it can lead to harassment and rape." Sex Addicts Anonymous, a book published in the US in 2005, has first-person accounts by sex addicts who committed rape.

Experts are unanimous in that the time has come to accept that the affliction - also called paraphilia, meaning 'beyond love' - exists in substantial numbers in India and deal with it. "Sex addiction cases I get have doubled in the last decade," says Dr Rajan Bhonsle, head of the department of sexual medicine at Seth G S Medical College, Mumbai. "I have 25-30 cases every month and they come from all parts of India." Sexologist Dr Prakash Kothari says he used to get 1-3 patients a month at KEM Hospital earlier. "Now it's 10-12."

That might be minuscule compared to the US where, according to The Society for the Advancement of Sexual Health, 3-5% of the sexually active population has this problem. "But in India, there is a cloak of hypocrisy," says Bhonsle. "The actual cases would be much more." Even conservative Iran has 1,572 members in Sexaholics Anonymous. India? Just 2. This may change, however, with Sex Addicts Anonymous deciding to start its first India meeting in Delhi on January 28.

Bangalore-based Rajiv, 55, who was hooked to pornography from the age of 11, would perhaps be in attendance. "I would collect 20kg of porno magazines and CDs over a mere six months, dispose them off and buy more," says the engineer. "I had no relations with my wife. For four years, I used escort services and spent Rs 10 lakh on them. I recovered in a rehab abroad. But not all of us can go to foreign countries for treatment. We need such places here. We also need to bring it out of the closet."

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CDC: Flu seems to level off except in the West


New government figures show that flu cases seem to be leveling off nationwide. Flu activity is declining in most regions although still rising in the West.


The Centers for Disease Control and Prevention says hospitalizations and deaths spiked again last week, especially among the elderly. The CDC says quick treatment with antiviral medicines is important, in particular for the very young or old. The season's first flu case resistant to treatment with Tamiflu was reported Friday.


Eight more children have died from the flu, bringing this season's total pediatric deaths to 37. About 100 children die in an average flu season.


There is still vaccine available although it may be hard to find. The CDC has a website that can help.


___


CDC: http://www.cdc.gov/flu/


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Apple Drops Manufacturer Using Underage Workers













Apple has stopped doing business with a Chinese manufacturer after a report said it had employed 74 underage workers. According to Apple's Supplier Responsibility Report, which was released by the company Thursday, Guangdong Real Faith Pingzhou Electronics was employing workers under the age of 16.


"Our auditors were dismayed to discover 74 cases of workers under age 16 — a core violation of our Code of Conduct. As a result, we terminated our business relationship with PZ," the company says in the report.


Apple has now lost its spot as the most valuable publicly traded company, one year after it first firmly overtook ExxonMobil. Even though it announced a record number of iPhone and iPad sales in its last quarter earnings, its stock price has fallen over 12 percent.


Apple says it is working hard to improve labor conditions at the factories of its Chinese contractors. It said it also discovered that one of the region's labor agencies had conspired with the manufacturer, providing children to them and helping forge age-verification documents. Apple said in its report that it alerted the provincial government, which fined the agency and suspended its business license.


Apple To Start Making Some Mac Computers in America in 2013


"The children were returned to their families, and PZ was required to pay expenses to facilitate their successful return," Apple says in the report.










In an interview with Bloomberg, Apple's Senior Vice President of Operations, Jeff Williams, said child labor was being used more than companies care to admit. "Most companies, they either don't report on it at all, or they say they look for it and found none, or they obscure the data in some way," Williams told Bloomberg. "If they're not finding it, they're not looking hard enough."


ABC News' Bill Weir visited the factory of Apple's Foxconn supplier last year and did not see any underage workers. "But while we looked hard for the kind of underage and maimed workers we've read so much about, we mostly found people who face their days through soul-crushing boredom and deep fatigue," Weir wrote about his visit.


PHOTOS: Inside Apple's Factories in China


In the 37-page Supplier Responsibility Progress Report, which can be viewed here, Apple said there had been a 72 percent increase in facility audits. According to the report, Apple achieved an average of 92 percent compliance with the goal, for now, of a maximum 60-hour work week.


Apple vowed last year to improve working conditions at its manufacturing facilities in China, vowing to work specifically on reducing working hours for Chinese workers. In March 2012, the Fair Labor Association released a report on the poor conditions at Apple's Foxconn supplier. The organization gave a long list of recommendations to Apple and Foxconn, and both Apple and Foxconn agreed to follow them.


In August, the FLA said that that Foxconn had completed 280 action items on time or ahead of schedule. By July 1, 2013, Foxconn has promised to reduce workers' hours to 49 hours per week and stabilize pay -- though the limit is rarely enforced because workers often want to work overtime and make ends meet.


Apple announced in December that it would begin to make some of its Mac computers in America in 2013.



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North Korea to target U.S. with nuclear, rocket tests


SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


The announcement by the country's top military body came a day after the U.N. Security Council agreed to a U.S.-backed resolution to censure and sanction North Korea for a rocket launch in December that breached U.N. rules.


North Korea is not believed to have the technology to deliver a nuclear warhead capable of hitting the continental United States, although its December launch showed it had the capacity to deliver a rocket that could travel 10,000 km (6,200 miles), potentially putting San Francisco in range, according to an intelligence assessment by South Korea.


"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.


North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un, who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.


China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.


Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition, with Xi Jinping due to take office in March.


China's Foreign Ministry called for calm and restraint and a return to six-party talks, but effectively singled out North Korea, urging the "relevant party" not to take any steps that would raise tensions.


"We hope the relevant party can remain calm and act and speak in a cautious and prudent way and not take any steps which may further worsen the situation," ministry spokesman Hong Lei told reporters at a regular press briefing.


North Korea has rejected proposals to restart the talks aimed at reining in its nuclear capacity. The United States, China, Russia, Japan and the two Koreas are the six parties involved.


"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.


Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.


"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.


U.S. URGES NO TEST


Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.


"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.


"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."


The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.


A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.


North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons


North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.


According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.


North Korea has not yet mastered the technology needed to make a nuclear warhead small enough for an intercontinental missile, most observers say, and needs to develop the capacity to shield any warhead from re-entry into the earth's atmosphere.


North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.


The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father, Kim Jong-il, who oversaw the country's military and nuclear programs.


The older Kim died in December 2011.


"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.


(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan and Ron Popeski)



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Israel talks of military option as Kissinger warns over Iran






DAVOS: Israeli officials said Thursday that military action against Iran needed to stay on the table, as former US secretary of state Henry Kissinger warned of a crisis over Tehran's nuclear ambitions in the "very foreseeable future".

Speaking at the World Economic Forum in Davos, Israeli President Shimon Peres and Defence Minister Ehud Barak said the threat of military action was vital to efforts against Iran's nuclear programme.

"There will be more attempts to try and negotiate, but there will always be in the horizon a military option, because if the Iranians think it's only economic and political, they won't pay attention," Peres told global political and business leaders at the annual gathering in the Swiss ski resort.

Israel and Western powers accuse Iran of seeking to acquire a weapons capability under the guise of its nuclear energy programme but Iran denies the charge, saying its work is for peaceful purposes only.

Prime Minister Benjamin Netanyahu, who emerged from an election Tuesday with a new term as Israel's leader, has frequently warned about the danger of Iran's nuclear programme.

Israel has refused to rule out a military strike to prevent Iran from obtaining nuclear arms.

Barak, who has announced plans to retire after Netanyahu forms a new government, told the forum that stronger sanctions were needed against Iran.

"There is a need for much more drastic sanctions, a kind of quarantine of all imports and exports," Barak said, though he admitted that China and Russia were unlikely to agree.

He said he understood Washington's desire to have "all alternatives" exhausted before military action over Iran, but that there was also a need to be ready to carry out targeted attacks.

"If worst comes to worst, there should be a readiness and capability to launch a surgical operation that will delay them by a significant timeframe and probably convince them... the world is determined to block them," Barak said.

In a wide-ranging talk on foreign affairs, Kissinger said he expected the Iranian nuclear issue to soon come to a head.

"For 15 years, the permanent members of the United Nations Security Council have declared that a nuclear Iran is unacceptable, but it has been approaching," he said.

"People who have advanced their view will have to come to a determination about how to react or about the consequences of non-reaction," he said.

"I believe this point will be reached within a very foreseeable future."

Kissinger said negotiations with Iran needed to be given "a real chance" and that "unilateral action by Israel would be a desperate last resort."

He said he expected "Iran to be high on the agenda" of US President Barack Obama's new administration, and said failure to deal with the question could lead to a spread of nuclear weapons in the region.

"That would be a turning point in human history," Kissinger warned.

Israel has been pressing Obama to set a red line for Iran on the nuclear issue, after Netanyahu warned at the UN General Assembly in September that Tehran could have the necessary material for a first bomb by the summer of 2013.

The new US secretary of state nominee, Senator John Kerry, told a confirmation hearing on Thursday that "the clock is ticking", and that Washington will not be satisfied with just containing Iran.

- AFP/jc



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BJP outwits KJP to stay afloat, for now

BANGALORE: The BJP's counter strike seems to have outwitted the B S Yeddyurappa-led Karnataka Janata Party (KJP) and put them on the defensive, at least for now.

By delaying the resignation of 13 rebel BJP MLAs loyal to Yeddyurappa, chief minister Jagadish Shettar has all but outsmarted Yeddyurappa who has been gunning for him. The BJP has not only taken the steam out of the rebels' campaign for the removal of the Shettar government, but also left KJP leaders embarrassed at the tame end likely to their resignation drama.

Rebel ministers Shobha Karandlaje and C M Udasi, who quit the Shettar ministry on Wednesday, appeared anxious the day after as the chief minister hasn't yet accepted their resignations. It's a deliberate plan by the BJP not to accept the resignations as the two ministers are likely to face the threat of being disqualified in case they defy the party whip to attend the budget session which starts on February 4.

This is also true in the case of 11 other MLAs, who are still searching for the elusive Speaker to formally submit their resignations.

Yeddyurappa mellowed down on Thursday when he realized his loyalists were running scared. "I had no intention to pull down the government. Our contention is that Shettar should not conduct any constitutional activities, including presentation of the budget. The BJP government doesn't have the moral right to continue as it had lost the majority following the resignation of two ministers and 11 other MLAs. Shettar should step down immediately to save the assembly's honour," Yeddyurappa said, trying to make amends for his earlier stand.

But he said more BJP MLAs are likely to resign and join his party. "Another BJP MLA Sunil Vallyapure will soon resign his assembly membership and join us. There are many more but I can't say how many," he added. Experts say if Yeddyurappa wants to pull down the government, he can easily do so by asking the rebel BJP MLAs to petition the governor withdrawing their support. But he can't afford to do so as he knows it can backfire as it involves the sentiments of the influential Lingayat community to which he and Shettar belong.

Playing the emotional card, Shettar on warned of a backlash, particularly in North Karnataka, if his government was toppled. "If there's an attempt to bring down a government which is giving good administration, people will not pardon us," he said in his hometown Hubli.

Governor HR Bhardwaj wrote to the assembly secretariat seeking details of the Speaker's whereabouts following a representation from rebel MLAs on Wednesday. The governor also sought tour programme details of assembly secretariat officials.

After their frantic search for the Speaker failed, rebel legislators now plan to petition the high court to seek the Speaker's presence in Bangalore. "We'll wait for two more days. If the Speaker doesn't return to Bangalore, we plan to file a habeas corpus petition in the high court," MLA Nehru Olekar said.

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Penalty could keep smokers out of health overhaul


WASHINGTON (AP) — Millions of smokers could be priced out of health insurance because of tobacco penalties in President Barack Obama's health care law, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation.


The Affordable Care Act — "Obamacare" to its detractors — allows health insurers to charge smokers buying individual policies up to 50 percent higher premiums starting next Jan. 1.


For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. A 60-year-old could wind up paying nearly $5,100 on top of premiums.


Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration. But older smokers could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge.


Workers covered on the job would be able to avoid tobacco penalties by joining smoking cessation programs, because employer plans operate under different rules. But experts say that option is not guaranteed to smokers trying to purchase coverage individually.


Nearly one of every five U.S. adults smokes. That share is higher among lower-income people, who also are more likely to work in jobs that don't come with health insurance and would therefore depend on the new federal health care law. Smoking increases the risk of developing heart disease, lung problems and cancer, contributing to nearly 450,000 deaths a year.


Insurers won't be allowed to charge more under the overhaul for people who are overweight, or have a health condition like a bad back or a heart that skips beats — but they can charge more if a person smokes.


Starting next Jan. 1, the federal health care law will make it possible for people who can't get coverage now to buy private policies, providing tax credits to keep the premiums affordable. Although the law prohibits insurance companies from turning away the sick, the penalties for smokers could have the same effect in many cases, keeping out potentially costly patients.


"We don't want to create barriers for people to get health care coverage," said California state Assemblyman Richard Pan, who is working on a law in his state that would limit insurers' ability to charge smokers more. The federal law allows states to limit or change the smoking penalty.


"We want people who are smoking to get smoking cessation treatment," added Pan, a pediatrician who represents the Sacramento area.


Obama administration officials declined to be interviewed for this article, but a former consumer protection regulator for the government is raising questions.


"If you are an insurer and there is a group of smokers you don't want in your pool, the ones you really don't want are the ones who have been smoking for 20 or 30 years," said Karen Pollitz, an expert on individual health insurance markets with the nonpartisan Kaiser Family Foundation. "You would have the flexibility to discourage them."


Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options, said Pollitz, formerly deputy director of the Office of Consumer Support in the federal Health and Human Services Department.


First, the law allows insurers to charge older adults up to three times as much as their youngest customers.


Second, the law allows insurers to levy the full 50 percent penalty on older smokers while charging less to younger ones.


And finally, government tax credits that will be available to help pay premiums cannot be used to offset the cost of penalties for smokers.


Here's how the math would work:


Take a hypothetical 60-year-old smoker making $35,000 a year. Estimated premiums for coverage in the new private health insurance markets under Obama's law would total $10,172. That person would be eligible for a tax credit that brings the cost down to $3,325.


But the smoking penalty could add $5,086 to the cost. And since federal tax credits can't be used to offset the penalty, the smoker's total cost for health insurance would be $8,411, or 24 percent of income. That's considered unaffordable under the federal law. The numbers were estimated using the online Kaiser Health Reform Subsidy Calculator.


"The effect of the smoking (penalty) allowed under the law would be that lower-income smokers could not afford health insurance," said Richard Curtis, president of the Institute for Health Policy Solutions, a nonpartisan research group that called attention to the issue with a study about the potential impact in California.


In today's world, insurers can simply turn down a smoker. Under Obama's overhaul, would they actually charge the full 50 percent? After all, workplace anti-smoking programs that use penalties usually charge far less, maybe $75 or $100 a month.


Robert Laszewski, a consultant who previously worked in the insurance industry, says there's a good reason to charge the maximum.


"If you don't charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers," said Laszewski. "They are going to have to play defense."


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Online:


Kaiser Health Reform Subsidy Calculator — http://healthreform.kff.org/subsidycalculator.aspx


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Will Women Register for Selective Service?


Jan 24, 2013 5:53pm







ap women combat nt 130124 wblog Will Women Register for Selective Service?


Defense Secretary Leon Panetta today lifted the ban on women serving in combat positions, opening the door to more than 200,000  new military posts and raising a number of important questions, including: Will women eventually be eligible for the draft?


By law, all male U.S. citizens and permanent residents must register with the Selective Service System within 30 days of their 18th birthday. Registration puts those “male persons” on the list the government uses if ever the draft returns and conscription in the military is deemed necessary in a time of war.


As of a 1994 review, women were still exempt from registering because they did not serve in combat positions. Today’s change in Pentagon policy, however, could ultimately result in a change to the law.


But it will take more than just the stroke of the defense secretary’s pen for the Selective Service Act to include mention of women.


With any change to personnel policies, the Defense Department  is “required to provide an analysis of its impact on the Selective Service Act,” said a senior Pentagon official said on the condition of anonymity.  “So that will be part of the notification to Congress.”


But what comes next is  unclear.


“With regard to what will happen from there, I can’t say,” said the official.


Defense Secretary Leon Panetta later admitted to reporters that he, too, did not know the potential impact of the change to the Selective Service Act.


“That’s not our operation,” said Panetta.


Known for his use of colorful language, Panetta then said, “I don’t know who the hell controls Selective Service, if you want to know the truth.”


“But, you know,” Panetta added. “Whoever does, they’re going to have to exercise some judgment based on what we just did.”


The Selective Service System is a federal agency independent of the Department of Defense.



SHOWS: World News







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Cameron promises Britons vote on EU exit


LONDON (Reuters) - Prime Minister David Cameron promised Britons a vote on quitting the European Union, rattling London's biggest allies and some investors by raising the prospect of uncertainty and upheaval.


Cameron announced on Wednesday that the referendum would be held by the end of 2017 - provided he wins a second term - and said that while Britain did not want to retreat from the world, public disillusionment with the bloc was at "an all-time high".


"It is time for the British people to have their say. It is time for us to settle this question about Britain and Europe," Cameron said in a speech, adding that his Conservative party would campaign for the 2015 parliamentary election on a promise to renegotiate the terms of Britain's EU membership.


"When we have negotiated that new settlement, we will give the British people a referendum with a very simple in or out choice to stay in the European Union on these new terms; or come out altogether. It will be an in-out referendum."


A referendum would mark the second time British voters have had a direct say on the issue. In 1975, they decided by a wide margin to stay in, two years after the country had joined.


Most recent opinion polls have shown a slim majority would vote to leave amid bitter disenchantment, fanned by a hostile press, about the EU's perceived influence on the British way of life. However, a poll this week showed a majority for staying.


Cameron's position is fraught with uncertainty. He must come from behind to win the next election, secure support from the EU's 26 other states for a new British role, and hope those countries can persuade their voters to back the changes.


He also avoided saying exactly what he would do if he failed to win concessions in Europe, as many believe is likely.


Critics, notably among business leaders worried about the effect on investment, say that for years before a vote, Britain may slip into a dangerous and damaging limbo that could leave it adrift or effectively pushed out of the EU.


The United States, a close ally, is also uneasy about the plan, believing it will dilute Britain's international clout. President Barack Obama told Cameron last week that Washington valued "a strong UK in a strong European Union" and the White House said on Wednesday it believed Britain's membership of the EU was mutually beneficial.


Some of Britain's European partners were also anxious and told Cameron on Wednesday his strategy reflected a selfish and ignorant attitude. However, Angela Merkel, the leader of EU paymaster Germany, was quick to say she was ready to discuss Cameron's ideas.


FRENCH "NON"


French Foreign Minister Laurent Fabius was less diplomatic: "If Britain wants to leave Europe, we will roll out the red carpet," he quipped, echoing words Cameron used recently to urge France's rich to escape high taxes and move to Britain.


French President Francois Hollande repeated his refusal of special deals: "What I will say, speaking for France, and as a European, is that it isn't possible to bargain over Europe to hold this referendum," he said. "Europe must be taken as it is.


"One can have it modified in future but one cannot propose reducing or diminishing it as a condition of staying in."


Italian Prime Minister Mario Monti was more positive. He said he agreed with Cameron on the need to make the EU more innovative and welcomed the idea of a British referendum, saying he thought Britons would ultimately vote to stay in the bloc.


Billed by commentators as the most important speech of Cameron's career, his referendum promise ties him firmly to an issue that has bedeviled a generation of Conservative leaders.


In the past, he has been careful to avoid bruising partisan fights over Europe, an issue that undid the last two Conservative prime ministers, John Major and Margaret Thatcher.


His speech appeared to pacify a powerful Euroskeptic wing inside his own party, but deepen rifts with the Liberal Democrats, the junior partners in his coalition. Their leader, Deputy Prime Minister Nick Clegg, said the plan would undermine a fragile economic recovery.


Sterling fell to its lowest in nearly five months against the dollar on Wednesday as Cameron was speaking.


"BREXIT"?


Cameron said he would take back powers from Brussels, saying later in parliament that, when it came to employment, social and environmental legislation, "Europe has gone far too far".


But such a clawback - still the subject of an internal audit to identify which specific powers he should target for repatriation to London - is likely to be easier said than done.


If Cameron wins re-election but then fails to renegotiate Britain's membership of the EU, a 'Brexit' could loom.


Business leaders have warned that years of doubt over Britain's EU membership would damage the $2.5 trillion economy and cool the investment climate.


"Having a referendum creates more uncertainty and we don't need that," Martin Sorrell, chief executive of advertising giant WPP, told the World Economic Forum in Davos. "This is a political decision. This is not an economic decision.


"This isn't good news. You added another reason why people will postpone investment decisions."


Cameron has been pushed into taking such a strong position partly by the rise of the UK Independence Party, which favors complete withdrawal from the EU and has climbed to third in the opinion polls, mainly at the expense of the Conservatives.


"All he's trying to do is to kick the can down the road and to try and get UKIP off his back," said UKIP leader Nigel Farage.


Euroskeptics in Cameron's party, who have threatened to stir up trouble for the premier, were thrilled by the speech.


Conservative lawmaker Peter Bone called it "a terrific victory" that would unify 98 percent of the party. "He's the first prime minister to say he wants to bring back powers from Brussels," Bone told Reuters. "It's pretty powerful stuff".


Whether Cameron holds the referendum remains as uncertain as the Conservatives' chances of winning the election. They trail the opposition Labour party in opinion polls, and the coalition is grappling with a stagnating economy as it pushes through unpopular public spending cuts to reduce a large budget deficit.


Labour leader Ed Miliband said on Wednesday his party did not want an in-or-out referendum.


EU REFORM


Cameron said he would campaign for Britain to stay in the EU "with all my heart and soul", provided he secured the reforms he wants. He made clear the Union must become less bureaucratic and focus more on free trade.


It was riskier to maintain the status quo than to change, he said: "The biggest danger to the European Union comes not from those who advocate change, but from those who denounce new thinking as heresy," he said.


Asked whether, if he did not succeed in his renegotiation strategy, would recommend a vote to take Britain out, he said only: "I want to see a strong Britain in a reformed Europe.


"We have a very clear plan. We want to reset the relationship. We will hold that referendum. We will recommend that resettlement to the British people."


Cameron said the euro zone debt crisis was forcing the bloc to change and that Britain would fight to make sure new rules were fair to the 10 countries that do not use the common currency, of which Britain is the largest.


Democratic consent for the EU in Britain was now "wafer thin", he said:


"Some people say that to point this out is irresponsible, creates uncertainty for business and puts a question mark over Britain's place in the European Union. But the question mark is already there: ignoring it won't make it go away."


A YouGov opinion poll on Monday showed that more people wanted to stay in the EU than leave it, the first such result in many months. But it was unclear whether that result was a blip.


Paul Chipperfield, a 53-year-old management consultant, said he liked the strategy: "Cameron's making the right move because I don't think we've had enough debate in this country," he said.


"We should be part of the EU but the EU needs to recognize that not everybody's going to jump on the same bandwagon."


Asked after the speech whether other EU countries would agree to renegotiate Britain's membership, Cameron said he was an optimist and that there was "every chance of success".


"I don't want Britain to leave the EU," he told parliament later. "I want Britain to reform the EU."


In the 1975 referendum, just over 67 percent voted to stay inside with nearly 33 percent against.


(Additional reporting by Paul Taylor in Davos, Alexandra Hudson in Berlin, Brenda Goh in London, Jeff Mason in Washington and James Mackenzie in Rome; Editing by Guy Faulconbridge, David Stamp and Alastair Macdonald)



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