1 January 2012
Last updated at 04:41 ET

European leaders have warned of a difficult year ahead, as many economists predict recession in 2012.

German Chancellor Angela Merkel said Europe was experiencing its “most severe test in decades” but that Europe was growing closer in the debt crisis.

France’s President Sarkozy said the crisis was not finished, while Italy’s president called for more sacrifices.

Growth in Europe has stalled as the debt crisis has forced governments to slash spending.

The leaders’ new year messages came as leading economists polled by the BBC said they expected a return to recession in Europe in the first half of 2012.

The cost of borrowing for some of the eurozone’s largest economies, including Italy and Spain, has shot up in recent months as lenders fear governments will not be able to pay back money they have already borrowed.

With growth stalled, the pressure is on governments across Europe, not just ones using the single currency, to cut spending in order to meet debt obligations.

Fears are now focusing on a potential second credit crunch, triggered by the exposure of banks across Europe to Italy’s huge debt.

Euro defended

In her TV address, Chancellor Merkel said that despite Germany’s relatively good economic situation, “next year will no doubt be more difficult than 2011″.

“The road to overcome it [debt crisis] remains long and not without setbacks, but at the end of this path Europe will re-emerge stronger from the crisis than it was when it entered it.”

She defended the euro, saying it had made “everyday life easier and our economy stronger… and protected from something worse” in the financial crisis of 2008.

Heading into an election year trailing his Socialist rival Francois Hollande in the polls, French President Nicolas Sarkozy said structural changes to the economy were needed in order to return to growth.

“I know that the lives of many of you, already tested by two difficult years, have been put to the test once more,” he said in a televised address.

“You are ending the year more worried about yourselves and your children,” he said.

But after having already pushed budget cuts in order to forestall a downgrade of France’s treasured AAA sovereign credit rating, he promised there would be no more budget cuts.

“What was to be done was done by the government,” he said.

Mr Sarkozy is due to meet Mrs Merkel in early January to push forward a European Union agreement in December for a new fiscal compact.

‘Unavoidable’ sacrifices

The president of Italy, the eurozone’s third-largest economy, urged people to make sacrifices to prevent the “financial collapse of Italy”.

President Giorgio Napolitano said: “Sacrifices are necessary to ensure the future of young people, it’s our objective and a commitment we cannot avoid.”

Fears that Italy might need a Greek-style bailout that Europe would have difficulty dealing with have forced the government’s borrowing costs up and led to the replacement of Silvio Berlusconi by Mario Monti, leading a cabinet of unelected experts.

“No-one, no social group, can today avoid the commitment to contribute to the clean-up of public finances in order to prevent the financial collapse of Italy,” President Napolitano said.

“The sacrifices will not be in vain, especially if the economy begins to grow again.”

Greek Prime Minister Lucas Papademos, another technocrat who was appointed to lead an interim coalition government after the debt crisis forced George Papandreou to resign, also warned of a difficult year ahead.

“We have to continue our efforts with determination, so that the sacrifices we have made up to now won’t be in vain,” he said in a televised address.

His government has imposed harsh austerity measures in order to ensure Greece continues to receive an international bailout.

The austerity measures, begun in 2010 by the previous government, have led to mass protests and riots as high unemployment, raised taxes, salary cuts and reduced government services take their toll.

1 January 2012
Last updated at 04:41 ET

European leaders have warned of a difficult year ahead, as many economists predict recession in 2012.

German Chancellor Angela Merkel said Europe was experiencing its “most severe test in decades” but that Europe was growing closer in the debt crisis.

France’s President Sarkozy said the crisis was not finished, while Italy’s president called for more sacrifices.

Growth in Europe has stalled as the debt crisis has forced governments to slash spending.

The leaders’ new year messages came as leading economists polled by the BBC said they expected a return to recession in Europe in the first half of 2012.

The cost of borrowing for some of the eurozone’s largest economies, including Italy and Spain, has shot up in recent months as lenders fear governments will not be able to pay back money they have already borrowed.

With growth stalled, the pressure is on governments across Europe, not just ones using the single currency, to cut spending in order to meet debt obligations.

Fears are now focusing on a potential second credit crunch, triggered by the exposure of banks across Europe to Italy’s huge debt.

Euro defended

In her TV address, Chancellor Merkel said that despite Germany’s relatively good economic situation, “next year will no doubt be more difficult than 2011″.

“The road to overcome it [debt crisis] remains long and not without setbacks, but at the end of this path Europe will re-emerge stronger from the crisis than it was when it entered it.”

She defended the euro, saying it had made “everyday life easier and our economy stronger… and protected from something worse” in the financial crisis of 2008.

Heading into an election year trailing his Socialist rival Francois Hollande in the polls, French President Nicolas Sarkozy said structural changes to the economy were needed in order to return to growth.

“I know that the lives of many of you, already tested by two difficult years, have been put to the test once more,” he said in a televised address.

“You are ending the year more worried about yourselves and your children,” he said.

But after having already pushed budget cuts in order to forestall a downgrade of France’s treasured AAA sovereign credit rating, he promised there would be no more budget cuts.

“What was to be done was done by the government,” he said.

Mr Sarkozy is due to meet Mrs Merkel in early January to push forward a European Union agreement in December for a new fiscal compact.

‘Unavoidable’ sacrifices

The president of Italy, the eurozone’s third-largest economy, urged people to make sacrifices to prevent the “financial collapse of Italy”.

President Giorgio Napolitano said: “Sacrifices are necessary to ensure the future of young people, it’s our objective and a commitment we cannot avoid.”

Fears that Italy might need a Greek-style bailout that Europe would have difficulty dealing with have forced the government’s borrowing costs up and led to the replacement of Silvio Berlusconi by Mario Monti, leading a cabinet of unelected experts.

“No-one, no social group, can today avoid the commitment to contribute to the clean-up of public finances in order to prevent the financial collapse of Italy,” President Napolitano said.

“The sacrifices will not be in vain, especially if the economy begins to grow again.”

Greek Prime Minister Lucas Papademos, another technocrat who was appointed to lead an interim coalition government after the debt crisis forced George Papandreou to resign, also warned of a difficult year ahead.

“We have to continue our efforts with determination, so that the sacrifices we have made up to now won’t be in vain,” he said in a televised address.

His government has imposed harsh austerity measures in order to ensure Greece continues to receive an international bailout.

The austerity measures, begun in 2010 by the previous government, have led to mass protests and riots as high unemployment, raised taxes, salary cuts and reduced government services take their toll.

1 January 2012
Last updated at 04:41 ET

European leaders have warned of a difficult year ahead, as many economists predict recession in 2012.

German Chancellor Angela Merkel said Europe was experiencing its “most severe test in decades” but that Europe was growing closer in the debt crisis.

France’s President Sarkozy said the crisis was not finished, while Italy’s president called for more sacrifices.

Growth in Europe has stalled as the debt crisis has forced governments to slash spending.

The leaders’ new year messages came as leading economists polled by the BBC said they expected a return to recession in Europe in the first half of 2012.

The cost of borrowing for some of the eurozone’s largest economies, including Italy and Spain, has shot up in recent months as lenders fear governments will not be able to pay back money they have already borrowed.

With growth stalled, the pressure is on governments across Europe, not just ones using the single currency, to cut spending in order to meet debt obligations.

Fears are now focusing on a potential second credit crunch, triggered by the exposure of banks across Europe to Italy’s huge debt.

Euro defended

In her TV address, Chancellor Merkel said that despite Germany’s relatively good economic situation, “next year will no doubt be more difficult than 2011″.

“The road to overcome it [debt crisis] remains long and not without setbacks, but at the end of this path Europe will re-emerge stronger from the crisis than it was when it entered it.”

She defended the euro, saying it had made “everyday life easier and our economy stronger… and protected from something worse” in the financial crisis of 2008.

Heading into an election year trailing his Socialist rival Francois Hollande in the polls, French President Nicolas Sarkozy said structural changes to the economy were needed in order to return to growth.

“I know that the lives of many of you, already tested by two difficult years, have been put to the test once more,” he said in a televised address.

“You are ending the year more worried about yourselves and your children,” he said.

But after having already pushed budget cuts in order to forestall a downgrade of France’s treasured AAA sovereign credit rating, he promised there would be no more budget cuts.

“What was to be done was done by the government,” he said.

Mr Sarkozy is due to meet Mrs Merkel in early January to push forward a European Union agreement in December for a new fiscal compact.

‘Unavoidable’ sacrifices

The president of Italy, the eurozone’s third-largest economy, urged people to make sacrifices to prevent the “financial collapse of Italy”.

President Giorgio Napolitano said: “Sacrifices are necessary to ensure the future of young people, it’s our objective and a commitment we cannot avoid.”

Fears that Italy might need a Greek-style bailout that Europe would have difficulty dealing with have forced the government’s borrowing costs up and led to the replacement of Silvio Berlusconi by Mario Monti, leading a cabinet of unelected experts.

“No-one, no social group, can today avoid the commitment to contribute to the clean-up of public finances in order to prevent the financial collapse of Italy,” President Napolitano said.

“The sacrifices will not be in vain, especially if the economy begins to grow again.”

Greek Prime Minister Lucas Papademos, another technocrat who was appointed to lead an interim coalition government after the debt crisis forced George Papandreou to resign, also warned of a difficult year ahead.

“We have to continue our efforts with determination, so that the sacrifices we have made up to now won’t be in vain,” he said in a televised address.

His government has imposed harsh austerity measures in order to ensure Greece continues to receive an international bailout.

The austerity measures, begun in 2010 by the previous government, have led to mass protests and riots as high unemployment, raised taxes, salary cuts and reduced government services take their toll.

29 December 2011
Last updated at 02:49 ET

North Korea has hailed late leader Kim Jong-il’s son, Kim Jong-un, as “supreme leader of the party, state and army”.

Mr Kim took centre stage at a memorial service in Pyongyang’s main square a day after his father’s funeral.

Kim Yong-nam, formally the number two leader, told a million-strong crowd their sorrow would be turned into strength “1,000 times greater under the leadership of comrade Kim Jong-un”.

State TV showed Kim Jong-un surrounded by top government and army officials.

The memorial event appeared to be the Kim dynasty’s unofficial handover of power, says the BBC’s Lucy Williamson in neighbouring South Korea.

A three-minute silence was also held, after which trains and ships throughout the country sounded their horns.

Kim Jong-il died of a heart attack on 17 December, aged 69, state media said. He had ruled North Korea since the death of his father Kim Il-sung in 1994.

‘Military first’

“Respected Comrade Kim Jong-un is our party, military and country’s supreme leader who inherits great comrade Kim Jong-il’s ideology, leadership, character, virtues, grit and courage,” Kim Yong-nam told the massive crowd gathered in Kim Il-sung square.

“The fact that he completely resolved the succession matter is Great Comrade Kim Jong-il’s most noble achievement.”

A top military official, Kim Jong-gak, also addressed the crowd.

“Our people’s military will serve comrade Kim Jong-un at the head of our revolutionary troops and will continue to maintain and complete the Songun accomplishments of great leader Kim Jong-il,” he said.

Songun refers to the “military-first” policy – channelling funds into the military.

Half-mast

On Wednesday, thousands stood weeping and wailing in the snow as Kim Jong-il’s funeral cortege passed, images from state television showed.

Correspondents say the ceremonies echoed the displays of pomp and military might that marked the death of Kim Il-sung, in 1994.

Kim Jong-un – Mr Kim’s third son – cried as he walked alongside the hearse. Tens of thousands of soldiers lined up to bow their heads in homage in the city’s main square.

Kim Jong-un – who is thought to be in his late 20s and who has little political experience – was accompanied by his uncle, Chang Song-taek.

Mr Chang is expected to be a key player as the younger Kim consolidates power.

Kim Jong-il – known in North Korea as the “Dear Leader” – was in the process of formalising Kim Jong-un as his successor when he died.

However, the transition was not complete, leaving regional neighbours fearful of a power struggle in the nuclear-armed pariah state.

Mr Kim’s two older sons, Kim Jong-nam and Kim Jong-chol, were not seen at the funeral.

No foreign delegations have attended any of the events. However, UN offices around the world lowered their flags to half-mast.

A spokesman at the UN headquarters in New York said that the move had been requested by Pyongyang’s UN mission but was part of normal protocol for the funeral of any head of state.

29 December 2011
Last updated at 11:22 ET

A senior Turkish official has acknowledged that 35 civilians were killed in an air strike near a Kurdish village close to the border with Iraq.

Turkey’s military said earlier it had targeted suspected Kurdish militants.

But the victims of Wednesday night’s attack are believed to have been villagers involved in smuggling cigarettes into Turkey from Iraq.

Governing party vice-president Huseyin Celik said an investigation was looking into possible intelligence failures.

The attack, on Wednesday night, took place near the village of Uludere in Sirnak province in south-eastern Turkey.

In a statement, Turkey’s general staff said the area attacked on Wednesday night was inside northern Iraq and had no civilian population. It added that the raid was launched following information that suspected militants were planning to attack Turkish security bases.

But Mr Celik was quoted by AFP news agency as saying later that “if it turns out to have been a mistake, a blunder, rest assured that this will not be covered up”.

The pro-Kurdish Peace and Democracy Party condemned the air strike as a “massacre”, saying that all the victims were civilians aged between 16 and 20.

“Those killed were young people who made a living from smuggling. There were people studying for university exams among them,” said party leader Selahattin Demirtas.

Mr Celik added that some of the victims were sons of village guards who had helped Turkish troops in their fight against the rebels.

The opposition Republican People’s Party (CHP) urged the military to exercise greater care. While smuggling was against the law, “being killed in an aerial bombardment was not what they deserved”, a leading CHP official told the Hurriyet website.

Diesel explosions

Provincial governor Vahdettin Ozkan said initially that more than 20 people had lost their lives but his office later clarified that 35 had been killed and one injured.

“A crisis centre is being formed at the scene and prosecutors and security officers were sent there,” he told Anatolia news agency.

The mayor of Uludere was quoted by Reuters news agency as saying that all the victims had suffered from burns.

Local officials said drums of diesel carried by the group had exploded.

Those killed had been using mules to cross the border when the incident happened, they said.

“We were on our way back when the jets began to bomb us,” a survivor, Servet Encu, told the pro-Kurdish Firat news agency.

Pictures from the scene showed bodies on a hillside covered in blankets.

Smuggling of fuel and cigarettes is said to be commonplace between villages along the Iraqi border. But rebels from the Kurdistan Workers Party (PKK) have crossed the border into Turkey to stage attacks on Turkish forces.

After 24 Turkish soldiers were killed in PKK raids in October, Turkish forces responded with a series of air and ground attacks.