Apple loses world's most valuable company crown






NEW YORK: Apple shares extended their losses Friday, ending a miserable week for the California tech giant as it surrendered its position as the world's biggest company based on market value.

Apple ended down 2.36 per cent at US$439.88, giving it a market capitalisation of $413 billion -- while oil giant ExxonMobil rose 0.36 per cent to US$91.68 with a market cap of US$418 billion, to edge into first place.

The shares of both firms zig-zagged during the session, with Apple at various points regaining the top spot before falling back.

Apple first overtook ExxonMobil in August 2011 as the most valuable company in the world based on the value of its stock.

A year later, Apple dethroned longtime rival Microsoft as the most valuable company in history based on the value of its stock at US$622 billion.

But the company took a bruising this week after Wednesday's gloomy forecast accompanying its record quarterly profit announcement prompted pessimism over the tech giant's slowing growth trajectory.

Apple's profit was US$13.1 billion on revenue of US$54.5 billion in the fiscal quarter that ended on December 29, with sales of iPhones and iPads setting quarterly highs.

But despite those figures, investors soured on Apple after it forecast that revenue for the current quarter would range from US$41-43 billion and that it would have a gross margin of 37.5 to 39.5 per cent, lower than expectations.

Analysts remained cautious about Apple, which had seen a meteoric rise last September to over US$700 a share but it has slid 37 per cent since then. The company shed some US$60 billion on Thursday and around US$10 billion more Friday.

Some express concern that Apple has lost its edge in innovation since the death of Steve Jobs, and is losing ground to rivals such as Samsung, which leads the mobile phone market, and to others using Google's Android operating system.

Jinho Cho at Mirae Asset Securities said Apple will likely increase carrier subsidies in 2013 and launch "an entry-level iPhone" to compete better in emerging markets.

"These moves by Apple should lead to stiffer competition for greater carrier subsidies among smartphone makers, thus driving down handset industry-wide operating margins," the analyst said.

Colin Gillis at BGC Financial said Apple is facing new challenges.

"While we are incrementally more positive on the stock, we also mention that competition is increasing for the company," he said in a research note.

"We see competitors are using price as a lever to get traction in the market. Apple may also run into difficulty posting both the volumes and maintaining its prices over the next several quarters."

- AFP/jc



Read More..

Backroom dilemma on rape law report

KOLKATA: She is one of the 15 young lawyers who worked tirelessly behind the scenes - analyzing and interpreting legal provisions that could be used to nail rapists and impose the maximum possible penalty on them.

Shwetasree Majumdar cherishes the experience with the JS Verma Commission report to help strengthen rape laws in the country. The 33-year-old Kolkata girl, now based in Bangalore, says she got passionately involved in framing the report as soon as she got a call from commission member Gopal Subramanium.

The National Law School graduate, who runs an intellectual property law firm, said working on the report took a lot from her emotionally and was one of the biggest challenges she has faced.

"It was very personal. Here was a chance to be part of a real, tangible comprehensive and legitimate exercise to bring change - it was imperative that the report be academically sound, just, fair and legally defensible. And when the civil society narratives started pouring in, many of which shaped how individual provisions in the law were ultimately crafted, it was hard to remain neutral and non-judgmental," she said.

"I felt shock, outrage and anger and every time I heard a narrative of systematic violence on women, children and the poor and I worked a little bit harder. I can say that I have not been this motivated and driven about any task in a very long time. I put my work, my family - everything on hold over these last few days," said Shwetasree, who worked for a fortnight on the report.

It was back to her law school days, burning the midnight oil and reading large volumes on comparative jurisprudence. "The high profile nature of the task meant we were under tremendous pressure. We were operating under strict rules of confidentiality and keeping our deliberations and work secret. We were also conscious that we could not let emotions cloud our sense of reason and approach each issue in a logical and balanced manner - not easy, given the recent events," said Shwetasree.

But in the end she was disappointed that the decision to turn down death penalty was all that got highlighted while none bothered to focus on the rationale for it. The team of lawyers and commission members did a good job, believes Shwetasree who worked on criminal law amendments, medical and psychiatric protocols.

"Taking a moral stand either way on the death penalty was the toughest challenge. On the one hand there was this overwhelming public outcry in its favour and on the other, there was voluminous literature and opinion on why it was not a deterrent. Whatever you chose you alienated someone and surely, as we expected, the rationale behind the decision was ignored," she said.

Personally, she isn't in favour of death penalty for rape since she doesn't believe that there is a link between death sentence and deterrence. A quick, effective and hard hitting punishment is far more important, she feels.

"Even if it could have a marginal deterrent effect, the effect could be felt only if you had high rates of execution, that were mandatory as well as being speedily enforced, which is fraught with its own problems. Also, in reality, although it is possible to award the death penalty for murder in 'rarest of rare' cases in India we are well aware that such cases are few and far between," she argued.

Shwetasree studied at St Teresa's Secondary School in Kidderpore before moving to Bangalore to study law. A regular visitor to Kolkata - her parents still live in their ancestral house in New Alipore - the lawyer said she was worried that free-thinking individuals were being suppressed by "misogynistic politicos" in the liberal city.

"When I first moved to Delhi and would listen wide-eyed to friends talking about the North Indian obsession with male children and was met with surprise whenever I said I was an only child and a girl, I felt proud. Some of my best friends from school were also only children and girls and not being boys was inconsequential," she said.

"The Kolkata I lived in was safe, it respected its women and Bengali women were known for their spirit and for being free thinkers. They still are. But what has changed is the environment in which they live in now. I hang my head in shame every time I read a misogynistic remark from a politician or any other person in a position of influence in Bengal. This is not the city I knew. And it disturbs me deeply," the lawyer sighed.

Read More..

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/


Read More..

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.



Read More..

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)



Read More..

Cooling-off Day for Punggol East by-election






SINGPORE: Friday is Cooling-off Day for the Punggol East by-election, which has seen nine days of vigorous campaigning by the four candidates contending in the polls.

The Elections Department has reminded political parties and candidates that Friday has been set aside for voters to reflect rationally on various issues raised during the campaigning before they go to the polls on Saturday.

The four candidates Channel NewsAsia spoke to say they intend to spend their time with their family, friends, and supporters after a gruelling election campaign that took form in walkabouts, morning visits to train stations to catch office-goers, as well as public and online rallies.

Campaigning is not allowed on Cooling-off Day. Election advertising cannot be published or displayed on Cooling-off Day as well.

Exceptions include reports in newspapers as well as on radio and television which relate to election matters.

Also allowed are approved posters and banners lawfully displayed before the start of Cooling-off Day. Other election advertising, such as internet election advertising lawfully displayed or published before the start of Cooling-off Day, is also allowed. Candidates can also continue to wear a replica of the symbol allotted to them.

Candidates and supporters have been advised to refrain from attending public events on Cooling-off Day and Polling Day. However they can attend religious ceremonies or worship services, or functions in the course of work or employment, but must be mindful of the rule prohibiting campaigning and election advertising.

On Saturday, some 31,600 voters from Punggol East SMC will go to the polls to elect their Parliamentary representative.

The by-election is being contested by four political parties.

Dr Koh Poh Koon from the People's Action Party, Mr Kenneth Jeyaretnam from the Reform Party, Mr Desmond Lim Bak Chuan from the Singapore Democratic Alliance and Ms Lee Li Lian from the Workers' Party.

This is Singapore's second by-election in eight months after the May 2012 Hougang by-election.

The Cooling-off Day provision in the Parliamentary Elections Act is now in force for the fourth time, after the 2011 General and Presidential Elections and the 2012 Hougang by-election.

- CNA/jc



Read More..

South India worst hit by diabetes

NEW DELHI: Diabetes and hypertension, traditionally seen as a rich man's disease, has made its way to the slums. Health ministry's fresh data shows one out of every four persons living in the urban slums of Chennai suffer from diabetes — which is three times higher than the national average of about 7%.

In the slums of Bangalore the prevalence rate of diabetes was reported to be 14.77%, followed by 13.37% in Ahmedabad. Delhi had among the lowest rates of 5.02%.

"The results of Chennai are shocking. I have asked the state health officials concerned to indentify all positive cases and refer them to the nearest centre for treatment," said Dr Jagdish Prasad, the Director General of Health Services ( DGHS).

He said the union health ministry started targeted screening in urban slums in June 2011. "So far we have screened about 10 lakh people in Delhi, Bangalore, Chennai, Ahmedabad and Assam," said Prasad.

Medical experts say poor eating habits and sedentary lifestyle is the main reason for the rise in diabetes among the urban poor. "It is a false belief that only those eating burgers and pizzas can get obese and develop diabetes. High consumption of fried items such as kachori, samosa and gulab jamun can also led to the onset of diabetes," said Dr H P S Sachdev, senior consultant pediatrics at Sitaram Institute of Science and Research.

Sachdev said people living in urban slums generally did less physical activity than their rural counterparts.

Simply put, diabetes is a condition in which the body has trouble turning food into energy. All bodies break down digested food into a sugar called glucose, their main source of fuel. In a healthy person, the hormone insulin helps glucose enter the cells. But in a diabetic, the pancreas fails to produce enough insulin, or the body does not properly use it. Cells starve while glucose builds up in the blood.

There are two predominant types of diabetes. In Type 1, the immune system destroys the cells in the pancreas that make insulin. In Type 2, which accounts for an estimated 90% to 95% of all cases, either the body's cells are not sufficiently receptive to insulin or the pancreas makes too little of it, or both.

Read More..

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."


___


Online:


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


Read More..

Feinstein Proposes Assault Weapons Ban


ap dianne feinstein ll 130124 wblog Feinstein Proposes Assault Weapons Ban

Manuel Balce Ceneta/AP Photo


With an AR-15 and nine other guns on her left, Sen. Dianne Feinstein, D-Calif., introduced a bill today that would ban assault weapons and high capacity ammunition clips.


The bill comes nearly 20 years after the first assault weapons ban was signed into law.


“I remain horrified by the massacre committed at Sandy Hook Elementary School in Newtown, Conn., and I’m also incensed that our weak gun laws allow these mass killings to be carried out again and again and again,” said Feinstein, who was joined by senators, representatives, mayors, police officials and victims of gun violence. “Military-style assault weapons have but one purpose, and in my view that’s a military purpose, to hold at the hip, possibly, to spray fire to be able to kill large numbers.”


“Assault weapons were designed for and should be used on our battlefields, not on our streets,” Sen. Charles Schumer, D-N.Y., said. “We know that there is no inalienable right to own and operate 100-round clips on AR-15 assault rifles.”


Feinstein’s proposed plan, which she will formally introduce on the Senate floor this afternoon, will ban the sale, transfer, manufacturing and importation of 158 semi-automatic weapons with at least one military feature. It would also ban fixed magazines that are capable of holding more than 10 rounds.


The newly bill differs from the 1994 assault weapons ban in that it does not have a sunset provision. Feinstein said the bill will protect over 2,200 makes of hunting and sporting rifles and shotguns, and the bill will subject existing or grandfathered weapons to background checks if they are sold or transferred.


“We have tried to learn from the bill. We have tried to recognize legal hunting rights. We have tried to recognize legal defense rights. We have tried to recognize the right of a citizen to legally possess a weapon. No weapon is taken from anyone. The purpose is to dry up the supply of these weapons over time. Therefore, there is no sunset on this bill,” Feinstein said.


Feinstein acknowledged the difficulty lawmakers face in passing this bill through Congress.


“Getting this bill signed into law will be an uphill battle, and I recognize that,  but it’s a battle worth having,” Feinstein said. “We must balance the desire of a few to own military-style assault weapons with the growing threat to lives across America.”


The National Rifle Association said Feinstein’s plan infringes on second amendment rights and neglects to address other issues spurring gun violence.


“Senator Feinstein has been trying to ban guns from law-abiding citizens for decades. It’s disappointing but not surprising that she is once again focused on curtailing the Constitution instead of prosecuting criminals or fixing our broken mental health system. The American people know gun bans do not work and we are confident Congress will reject Senator Feinstein’s wrong-headed approach,” Andrew Arulanandam, spokesman for the NRA, told ABC News.


Feinstein’s office told ABC News that the senator worked with U.S. Capitol Police and Washington Metro Police to ensure the display of weapons at the press conference complied with the rules.


An ABC News-Washington Post poll released last week found that 65 percent of those polled supported banning high capacity ammunition magazines while 58 percent favored banning the sale of so-called assault weapons.


Last week, President Obama introduced his gun policy agenda, which called for the banning of some assault-style weapons and high capacity magazines holding over ten rounds.  The president’s plan included 23 executive actions on gun violence that would not require congressional approval, which included a directive for national agencies to strengthen the criminal background check system.


A new ABC News-Washington Post poll out today showed 53 percent find the president’s gun control plan to be favorable while 41 percent view it unfavorably.


Read More..

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)



Read More..