Meeting delay a sign of cooling US-Vietnam ties

The U.S. and Vietnam, former enemies who share concerns about China's rise, are finding that one issue — human rights — is keeping them from becoming closer friends.
Stress between the nations is clear from a delay in an annual meeting between Washington and Hanoi on human-rights concerns. Such consultations have been held every year since 2006, but the last ones in November 2011 produced little, and a senior State Department official said the two sides were still working to "set the parameters" of the next round so it would yield progress.
The U.S. is frustrated over Vietnam's recent crackdown on bloggers, activists and religious groups it deems a threat to its grip on power, and over the detention of an American citizen on subversion charges that carry the death penalty.
"We have not seen the improvements that we would like," the State Department official said last week on condition of anonymity because he was not authorized to comment publicly. "We would very much like to see concrete actions."
The delay in holding the meeting, to be hosted by Hanoi, could just be a matter of weeks. But it underscores how Vietnam's worsening treatment of dissidents over the last two years has complicated efforts to strengthen its ties with the U.S.
Vietnam's foreign affairs ministry spokesman Luong Thanh Nghi said the human rights dialogues had "contributed to enhancing trust" between the two countries and that both sides were in discussion on the timing of the next round. A U.S. Embassy spokesman also said the countries were discussing when to hold the talks.
Like Washington, Vietnam wants deeper trading and security relations, but the U.S. says it must be accompanied by improvements in human rights. Some influential members of Congress are also pressing the Obama administration to get tougher on Hanoi's suppression of dissent and religious freedom.
Vietnam's relationship with the U.S. has improved greatly in recent years, largely because of shared concerns over China's increasing assertiveness in Southeast Asia. Their shared strategic interests are reflected most clearly in U.S. diplomacy in the South China Sea, where Beijing's territorial claims clash with those of Vietnam and four other countries in the region.
Since the fall of the Soviet Union, Vietnam has opened its economy but has been unwilling to grant religious or political freedom to its 87 million people. The U.S. and Vietnam restored diplomatic relations in 1995, 20 years after the end of the Vietnam War, and their rapprochement has accelerated as President Barack Obama has prioritized stronger ties with Southeast Asia.
Vietnam's crackdown on dissent follows a downturn in its once-robust economy. Analysts say Hanoi's leadership is defensive about domestic criticism of its economic policies, corruption scandals and infighting, much of it being spread on the Internet, out of their control.
Last year, Vietnam locked up more than 30 peaceful activists, bloggers and dissidents, according to Human Rights Watch. This year, 12 activists have been convicted in short, typically one-day trials, and sentenced to unusually long prison terms. Seven others are awaiting trial. The country is also preparing laws to crackdown on Internet freedoms.
"The internal party ructions have trumped everything," said Carl Thayer, an expert on Vietnam from the University of New South Wales. "They are so paranoid about criticism they don't care about the U.S."
The detention and looming trial of American democracy activist Nguyen Quoc Quan may be the clearest example of Hanoi's unwillingness to listen to American concerns over human rights.
Quan, 59, was arrested at Ho Chi Minh City airport in April soon after arriving on a flight from the United States, where he has lived since fleeing Vietnam by boat as a young man. Quan's family and friends say he is a leading member of Viet Tan, a nonviolent pro-democracy group that the Vietnamese authorities have labeled a terrorist outfit. He was detained in 2007 in Vietnam for six months.
Authorities initially accused Quan of terrorism, but he is now charged with subversion against the state, which carries a punishment ranging from 12 years in prison to death.
With the investigation now complete, his trial could be near. Court dates are typically released only a few days in advance.
According to a copy of the indictment obtained by The Associated Press, Quan met with fellow Vietnamese activists in Thailand and Malaysia between 2009 and 2010 and discussed Internet security and nonviolent resistance. The indictment said he traveled to Vietnam under a passport issued under the name of Richard Nguyen in 2011, when he recruited four other members of Viet Tan.
His wife doesn't deny that Quan wants to change Vietnam's political system.
"He wanted to talk to the young people and bring up the idea of democracy in Vietnam," Huong Mai Ngo, said in an interview with The Associated Press by phone from Sacramento. "He has lived in the U.S., he has had freedom here and he wants them to have the same."
Congress members with large Vietnamese-American constituencies are pressuring the Obama administration.
Rep. Frank Wolf, a leading critic, maintains the government has neglected human rights as it looks to forge economic and security ties. With three Republican colleagues, the Virginia congressman has demanded the sacking of U.S. Ambassador David Shear, accusing him of failing to invite democracy and rights activists to the July 4 celebration at the U.S. Embassy in Hanoi after giving assurances he would.
"The administration's approach has been a disaster. All they care about are economic and defense issues," said Wolf, who also took aim at Shear for failing to visit Quan in prison. "Human rights and religious freedom should be the number one priority."
U.S. officials have visited Quan five times in jail, mostly recently in late September.
"We believe no one should be imprisoned for peacefully expressing their political views or their aspirations for a freer, more democratic and prosperous future," embassy spokesman Christopher Hodges said. "We continue to call on the government of Vietnam to quickly and transparently resolve this case."
Wolf and other lawmakers interested in Vietnam do not have much say in setting policy, but can make life awkward for the Obama administration. Wolf hinted that he could propose amendments to budget legislation to put more pressure on the administration over its Vietnam policy. Wolf is a senior member of the powerful House Appropriations Committee, which oversees much of the federal budget.
The U.S. has some leverage if it wishes to try and get Vietnam to improve its human rights record: Vietnam is one of the largest recipients of American aid in Asia and is currently negotiating a free trade deal with Washington and seven other countries.
The Vietnamese government declined to comment on the charges against Quan, but Hanoi is aware of U.S. sensitivities in this case. Many observers say Quan is likely to be convicted but sentenced to time served and quickly expelled, though even that is likely to raise congressional pressure on the White House to tie the trade deal and aid to progress on human rights.
"It would be a disaster for Vietnam if they come down on U.S. citizen with an extreme sentence for peacefully advocating human rights," said Linda Malone, a professor at William and Mary Law School who is advising Quan's local counsel on his defense. "They will lose tremendous ground on what they seek to advance themselves."
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Court OKs sale of U.S. government-backed A123 to Chinese firm

China's largest auto parts maker got court approval on Tuesday for its controversial purchase of A123 Systems Inc, a bankrupt maker of electric car batteries, but the judge said he was troubled that a U.S. rival might be working to kill the deal.
A123, which was partly funded with U.S. government money, was sold at an auction on Saturday for $256.6 million to Wanxiang Group of China, which outbid Johnson Controls Inc of Milwaukee.
The auction result prompted outcry from U.S. politicians who objected to A123's taxpayer-financed lithium-ion technology ending up in the hands of an economic rival. Johnson Controls has said it remains interested in A123 if Wanxiang fails to get approval from the U.S. government, which is coming under pressure to block the deal.
"I'm troubled by suggestions that someone who participated in the auction may in fact already be working against it," said Delaware Bankruptcy Judge Kevin Carey at the end of Tuesday's hearing.
Carey ordered into escrow a $5.5 million fee from the sale that was earmarked for Johnson Control's in return for it being the lead bidder to support the A123 auction. The money will be released when the sale closes or after an investigation by A123 creditors.
William Baldiga of Brown Rudnick, who represents the official committee of unsecured creditors, had told Carey he had a confidential letter that suggested Johnson Controls planned to undermine Wanxiang if the Chinese company won the auction.
Johnson Controls attorney, Joshua Feltman of Wachtell, Lipton, Rosen & Katz, said the company should not be punished "because we sympathize with Michigan Congressional delegation."
A123 has several facilities in Michigan and its politicians have been vocal in opposing the sale to Wanxiang.
A123 has never turned a profit and received a $249 million grant from the U.S. Department of Energy to develop lithium-ion batteries.
A Department of Energy official said on Monday the grant, which has about $120 million remaining, would not be transferred to Wanxiang.
Opposition to the deal will now shift to Committee on Foreign Investment in the United States (CFIUS).
Pressure has been building on Treasury Secretary Timothy Geithner, the head of the panel, to block the takeover.
Chinese firms have been pouring cash into overseas investments, and with that money has come concerns around the globe that firms with ties to Beijing may not play by free-market rules.
CFIUS recently rejected a bid to build wind farms in Oregon by Ralls Corp, owned by two executives of China's Sany Group, and has blocked multiple deals by Huawei Technologies Co, a Chinese telecom equipment manufacturer.
China's state-owned oil company CNOOC Ltd received approval on Monday for the country's biggest foreign takeover, a $15.1 billion acquisition of Nexen Inc after intense scrutiny. CNOOC withdrew its bid for California-based Unocal Corp in 2005 in the face of political opposition.
Wanxiang has tried to blunt some of the political opposition by excluding A123's defense contracts from its bid.
A123 filed for bankruptcy in October as demand for electric vehicles did not live up to expectations and it was forced to recall defective car batteries. Its customers include Fisker Automotive, General Motors Co and BMW.
If the foreign investment committee does not approve the sale in the coming weeks, Wanxiang could walk away, although it would forfeit a $25 million deposit that would go toward repaying A123's creditors.
If that were to happen, A123 could then go back on the block. Johnson Controls and NEC Corp of Japan made a final runner-up bid of about $251 million, according to Alex Molinaroli, president of Johnson Controls Power Solutions.
The only other company that qualified for the auction, Siemens AG of Germany, does not appear to have made a bid, according to a transcript of the auction.
If the foreign investment committee has not approved the sale by January 15, the deal could still close by transferring A123 to a trust controlled by U.S. citizens, which would not need CFIUS approval.
Wanxiang's money would then be turned over to repay the creditors of A123, which filed for bankruptcy with $376 million in liabilities.
The Chinese company is no stranger to investing in the United States.
Wanxiang generates about $1 billion in revenue in the United States by supplying parts to GM and Ford Motor Co and has bought or invested in more than 20 U.S. companies, many of them in bankruptcy, said a congressional report published in October.
The case is A123 Systems Inc, Delaware Bankruptcy Court, No. 12-12859.
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Google explains cause of massive Gmail, Chrome outages

Users took to social networks on Monday to vent their displeasure with Google (GOOG) following a 40-minute disruption of service affecting the company’s Chrome Web browser and Gmail service. It was previously unclear what caused the services to simultaneously crash and some suspected the company was hit with a denial-of-service attack. Google engineer Tim Steele took to the company’s developer forums to clear up the confusion and confirmed what some developers had already suspected: The reason for the crash had to do with the Google Sync servers getting overwhelmed following a change in the code, not a DDoS attack.
“It’s due to a backend service that sync servers depend on becoming overwhelmed, and sync servers responding to that by telling all clients to throttle all data types,” he said, noting that the “throttling” messed things up in the browser and caused it to crash.
Google Sync keeps bookmarks, extensions, apps and settings in the Chrome browser synchronized across a variety of devices and services. Along with Chrome and Gmail, the worldwide outage also affected Google Docs, Drive and Apps, all of which rely heavily on Google Sync.
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Facebook helps FBI bust cybercriminals blamed for $850 million losses

 Investigators led by the Federal Bureau of Investigation and aided by Facebook Inc, have busted an international criminal ring that infected 11 million computers around the world and caused more than $850 million in total losses in one of the largest cybercrime hauls in history.
The FBI, working in concert with the world's largest social network and several international law enforcement agencies, arrested 10 people it says infected computers with "Yahos" malicious software, then stole credit card, bank and other personal information.
Facebook's security team assisted the FBI after "Yahos" targeted its users from 2010 to October 2012, the U.S. federal agency said in a statement on its website. The social network helped identify the criminals and spot affected accounts, it said.
Its "security systems were able to detect affected accounts and provide tools to remove these threats," the FBI said.
According to the agency, which worked also with the U.S. Department of Justice, the accused hackers employed the "Butterfly Botnet". Botnets are networks of compromised computers that can be used in a variety of cyberattacks on personal computers.
The FBI said it nabbed 10 people from Bosnia and Herzegovina, Croatia, Macedonia, New Zealand, Peru, the United Kingdom, and the United States, executed numerous search warrants and conducted a raft of interviews.
It estimated the total losses from their activities at more than $850 million, without elaborating.
Hard data is tough to come by, but experts say cybercrime is on the rise around the world as PC and mobile computing become more prevalent and as more and more financial transactions shift online, leaving law enforcement, cybersecurity professionals and targeted corporations increasingly hard-pressed to spot and ward off attacks.
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As China handset makers upgrade chips, pressure remains on profit margins

Chinese mobile phone makers chasing market share with lower prices in the world's biggest smartphone market will see their margins continue to be pressured as they upgrade to quad-core chips to satisfy demand from users for faster speeds and flashier graphics.
Most smartphones now are equipped with single and dual-core chips, but Chinese handset makers are planning quad-core powered devices as consumers get more picky with the speed of screen swipes, how fast they can download movies, send a photo via WeChat messaging or seal a purchase on Taobao online mall.
"The Chinese handset vendors have now extended their reach and low-price strategy to the quad-core phone segment," Lisa Soh, an analyst with Macquarie, said in a report. "This hurts the hope that the Chinese handset makers can improve margins through moving up product segments."
Already, Huawei Technologies Co Ltd, ZTE Corp, Lenovo Group Ltd and Xiaomi Technology, have unveiled quad-core smartphones running on Google Inc's Android operating system. They are using chips mainly from Samsung, Qualcomm and Nvidia.
Industry executives expect more quad-core models next year as chipmakers such as Qualcomm and Mediatek introduce processors customized with Chinese applications that will make it easier, quicker and cheaper for handset makers to launch new products.
U.S.-based Qualcomm Inc and Taiwan's Mediatek Inc have unveiled the high-end chips with designs that will help Chinese mobile phone makers launch smartphones in a shorter time at lower costs.
On Wednesday, Mediatek, Taiwan's biggest chip designer that sells more than 80 percent of its mobile phone processors to Chinese vendors, launched its quad-core chip and expects its partners to unveil handsets early next year, executives said.
Smartphone sales are booming in China, which has more than 1 billion subscribers. Sales will grow to 165-170 million units this year from 78 million a year earlier, research firm Gartner said, helped by the proliferation of Internet use.
Currently, Samsung is the top smartphone brand in China, but Chinese vendors are fast gaining traction. China's Lenovo, Coolpad and Huawei are now ranked No. 2, 3 and 5 respectively in the Chinese smartphone market, IDC said.
"The only gap between the smartphone versus the consumer in emerging countries is the price," said David Ku, CFO of Mediatek, which expects to ship more than 110 million smartphone chips this year.
Jeff Lorbeck, senior vice president for Qualcomm's product management told Reuters this month that it was likely that some of the quad-core powered smartphones could sell below 1,000 yuan ($160).
"I like to use my phone to buy things online, update my status on Renren (a social networking site) and read what friends are up to on weibo microblogs," said Liu Liang, a 24-year-old financial executive who lives in Beijing and uses a quad-core Samsung Galaxy Note II.
"I haven't bought a Chinese smartphone. But if my friends start recommending me good models and Chinese smartphones step up in their branding, I'll definitely consider one."
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Mother loses legal fight to stop son's cancer radiotherapy

LONDON (Reuters) - A mother in Britain, who was so desperate to stop her cancer-stricken son having to undergo conventional medical treatment that she went into hiding with him, lost a court battle on Friday to prevent him receiving radiotherapy.
The case of Sally Roberts, 37, a New Zealander living in Brighton, southern England, and the plight of her seven-year-old son has made headlines in Britain.
Roberts wants to try alternative treatments first, including immunotherapy and photodynamic therapy for her son Neon. She has been told the boy needs treatment fast but fears the side-effects of conventional medicine.
Doctors treating the boy had warned that without radiotherapy he could die within three months
Judge David Bodey told the High Court in London the life-saving radiotherapy treatment could start against the mother's wishes, the Press Association reported.
"The mother has been through a terrible time. This sort of thing is every parent's nightmare," the judge said.
"But I am worried that her judgment has gone awry on the question of the seriousness of the threat which Neon faces."
The story of the sick blue-eyed blonde boy came to public attention earlier this month when Roberts prompted a nationwide police hunt by going into hiding with Neon for four days to stop him from undergoing the treatment.
The mother's relentless battle in court also cast a light on the dilemmas parents can face when dealing with the illness of a loved one, considering the short-term and long-term risks of a treatment and handling conflicting medical information available at the click of a mouse.
Roberts said in court she had researched on the Internet her son's condition - a fast-growing, high-grade brain tumour called medulloblastoma - and sought advice from specialists around the world because she did not trust British experts.
She feared radiotherapy would stunt the boy's growth, reduce his IQ, damage his thyroid and potentially leave him infertile.
Earlier this week, a judge ruled that Neon could undergo emergency surgery to remove a tumour which had resisted an initial operation in October, despite opposition from his mother, who found he appeared to be recovering after what she said was a "heartbreaking" stay in hospital.
"EXPERIMENTAL AND UNPROVEN"
Surgeons said Neon's operation on Wednesday had been successful but that radiotherapy was needed to ensure no residual tumour was left behind.
Neon's father Ben, who lives in London and is separated from Roberts, has sided with his son's doctors.
But his wife suggested exploring several alternative treatments, including immunotherapy, which mainly consists of stimulating the body's immune system to fight cancerous cells, and photodynamic therapy, which uses a photosensitizing agent and a source of light to kill malignant cells.
The hospital treating Neon slammed "experimental and unproven" methods which entered "unchartered territory". The hospital, which cannot be named, also questioned the credentials of some of the private specialists contacted by Roberts's team.
The court heard that at least one of these could not even correctly spell medulloblastoma.
Radiotherapy is used to prevent cancer from spreading or striking back after surgery but it can damage nerve tissue and healthy brain cells.
Long-term side effects tend to be more common in children, whose nervous systems are still developing.
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Instant View - Third quarter GDP revised down, public finances worsen

LONDON (Reuters) - The Office for National Statistics released revised third-quarter GDP figures and November public sector finances data on Friday.
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KEY POINTS
- Biggest quarterly increase in GDP since Q3 2007
- Biggest quarterly increase in industrial output since Q2 2010
- Biggest quarterly increase in services output since Q3 2007
- Biggest quarterly increase in gross operating surplus of corporations since Q3 2010
- Highest household savings ratio since Q3 2009
- Highest level on record of public sector net debt excluding financial sector interventions as a share of GDP, at 68.5 percent
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ECONOMISTS' VIEWS
HOWARD ARCHER, IHS GLOBAL INSIGHT
"The modest revisions to the GDP data do not fundamentally change the story of an economy that is likely to have been essentially flat overall in 2012, with the quarterly performances distorted since the second quarter by a number of factors, notably including the Queen's Diamond Jubilee and the Olympics.
"It currently looks touch and go as to whether the economy can avoid renewed contraction in the fourth quarter as it faces the unwinding of the Olympics boost.
"News that service sector output only edged up 0.1 percent month-on-month in October reinforces (the) belief that the economy is having a difficult fourth quarter, but at least services output was marginally positive and that gives a small boost to hopes that the economy will avoid renewed contraction.
"While it really makes little difference whether the economy grows marginally in the fourth quarter, is flat or contracts marginally, it would be good for confidence if the economy could avoid a GDP decline and avert headlines of a 'triple dip'.
"With economic recovery likely to remain fragile and limited, we believe there is still a very real possibility that the Bank of England will ultimately decide to give the economy a further helping hand with a final 50 billion pounds of QE (quantitative easing)during the first half of 2013. However, this seems unlikely to happen before the second quarter, if at all."
ROSS WALKER, RBS
"We had 0.9, it looked quite a close call between 0.9 and 1.0. But, with the monthly industrial production numbers showing small downward revisions, we thought it would probably be trimmed. I suppose the Q3 number reinforces the weakness.
"The more significant figure is the October services sector output number. This is the first official estimate we have for any Q4 month. It is not a great number but it is positive and it is better than the decline that had been expected.
"On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative - based on the published data.
"I think the Bank of England's policy is on hold in terms of QE, probably the focus is more on the Funding for Lending Scheme.
"They could easily come back to it, but I think it is probably a second half of next year story once Mr Carney is in place, and his nine member committee. You could get a slight change in emphasis or focus when he comes in. We don't expect more QE, but if it comes it is a second half of next year story."
TOM VOSA, NATIONAL AUSTRALIA BANK
On GDP: "Not entirely surprised, that was our forecast. The partials that we'd had from retail sales, from industrial production, all pointed to this. To some degree this is old news and 0.9 or 1.0 percent doesn't really matter, it's still very strong growth."
On public finances: "It does make us wonder how the Chancellor is going to meet his borrowing targets when in reality borrowing tends to be running now a little bit above where we were last year.
"They must be hoping for a very big increase in revenues in January, which given the weakness of corporation tax and the reduction in financial sector pay I find very difficult."
PHILIP SHAW, INVESTEC
"There's a lot of data being released and there's no single overriding trend. We're not surprised to see GDP revised down a touch but what matters a lot more are prospects for the fourth quarter and because of last week's construction data, we're more optimistic that a decline will be avoided.
"Current account again, it's reassuring to see that there's been a narrowing of the deficit over the third quarter. Effectively, as earnings from direct investment have bounced back after two quarters of weakness. Nonetheless, one would still reach the conclusion that imbalances in the economy remain."
Public finances: "It's another month of disappointing deficit data and it's pretty clear now that barring unexpected positive developments, that the underlying deficit will widen this year, compared with 2011-12.
"We wouldn't say that the releases as a whole have that many implications for economic prospects.
"Although we suspect that the GDP figures will be a bit better than expected over the next quarter, perhaps next couple of quarters, it is clear that the underlying pace of growth will remain weak for some time to come.
"I think what's important here is whether the Bank of England's Funding for Lending Scheme has a positive effect on credit flows that the housing market picks up and that we see a sustained recovery in business investment as well."
DAVID TINSLEY, BNP PARIBAS
"The headline GDP figure is a shade disappointing, but 0.1 percentage point is not a big deal in the grand scheme of things. The fact that the service sector output rose in October is at least as important.
"It does suggest that, while some of the production data has been weak in the fourth quarter, the service sector momentum looks, at the outset of the quarter, to be holding up."
Public finances: "The data continue to show a worrying slippage against the government forecasts.
(To achieve the OBR forecasts) there has got to be either some improvement in the numbers or back revisions, or at the end of the financial year the under spends of government departments needs to be quite significant. All that we will see in due course but for now the figures still look like they are worse than OBR was expecting."
JAMES KNIGHTLEY, ING
"All in all, the UK appears to be ending 2012 not in particularly great shape and as such we suspect the Bank of England has more work to do with further policy stimulus likely in early 2013, especially if the worst fears over the U.S. fiscal cliff materialise."
Public finances: "For the financial year to date (2012/13), income tax revenues, corporation tax revenues and VAT revenues are all down on the same period for financial year 2011/12.
"This highlights the weak state of the UK economy and the fact that austerity measures are failing to generate the improvement in government finances that were hoped for.
"Government cash outlays are down as well, but this is purely down to lower interest costs resulting from the plunge in yields, helped by BoE purchases and the UK's relative safe haven status."
ALAN CLARKE, SCOTIABANK
"I actually think the monthly services (figure) was the most important one. That makes it all the more likely that the UK did not slip into a triple dip recession at the end of the year.
"The chances are that we could grow by 0.3 percent, maybe even more, because we had stonkingly good construction data and some growth in services, although clearly that could change in November and December.
"Notwithstanding the drop in industrial production, I think we probably grew. So it has been a great end to the year."
Public finances: "The public finances are going in the wrong direction. But we know that there is all sorts of jiggery pokery going on with the transfer of coupons by the ONS (Office for National Statistics), probably next month. So, it is very hard to read too much into that data."
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Budget deficit worsens, credit rating at risk

LONDON (Reuters) - Britain's budget deficit worsened in November, data showed on Friday, increasing the risk it will lose its top-notch credit rating and overshoot this year's borrowing forecast.
The data - which showed public sector net borrowing, excluding financial sector interventions, hit 17.5 billion pounds last month - is gloomy news for Britain's coalition government.
Deficit reduction and preserving Britain's credit rating have been top goals for the coalition of Conservatives and Lib Dems, which came to power in June 2010, just after the country's budget deficit peaked at 11.2 percent of GDP.
Last year, the budget deficit totalled 8 percent of GDP, and the government's own budget watchdog forecasts it will take until 2017 before it falls below 3 percent and the government manages to run a surplus on cyclically-adjusted non-investment spending.
Chancellor George Osborne had originally planned to meet this goal by the next election in 2015, but far weaker than expected growth since 2010 now makes that look impossible.
While other official data released on Friday showed Britain's economy may avoid a forecast contraction in the last three months of 2012, analysts say the borrowing numbers could see the country's credit rating revised early next year.
"The disappointing November public finance data fuel mounting expectations that at least one of the credit rating agencies will strip the UK of its AAA rating in 2013," said Howard Archer, chief UK economist at IHS Global Insight.
Standard & Poor's last week joined Fitch and Moody's and put a negative outlook on its triple-A rating for Britain. The latter two agencies - which have had a negative outlook since early this year - will review their ratings in early 2013.
Last month's public sector net borrowing figure of 17.5 billion pounds exceeded economists' expectations. They had forecast it would come in just below the 16.3 billion pounds reached in November 2011.
Borrowing since the start of the tax year in April is now nearly 10 percent higher than at the same point in 2011.
This calls into question forecasts issued earlier this month by the government's budget watchdog which estimated borrowing will fall 11 percent to total 108.5 billion pounds in the 2012-13 tax year.
Some of the fall in borrowing forecast by the Office for Budget Responsibility (OBR) was due to money expected from the auction of next-generation mobile phone frequencies and a deal with the Bank of England to return interest paid on its bond holdings - cash that will not boot the public finances until early 2013.
But even disregarding this, some economists think Osborne, the finance minister, may struggle to hit the OBR's targets.
Archer expects an overshoot of some 14 billion pounds, while economists at Barclays see an overshoot of 6.5 billion pounds, assuming the radio spectrum auction brings in the 3.5 billion pounds pencilled in by the OBR.
WEAKER GROWTH
Britain's economy shrank for nine months between late 2011 and mid-2012, but revised figures from the Office for National Statistics showed on Friday that growth rebounded by 0.9 percent in the third quarter of 2012, a little less than the 1.0 percent first estimated.
There was slightly brighter news from Britain's dominant services sector, which grew 0.1 percent in October after a 0.6 percent decline in September.
This was better than many economists had expected, and raises the prospect that the economy will avoid a return to contraction that the OBR and the Bank of England have predicted.
"It's not a great number but it is positive," said Ross Walker, an economist at Royal Bank of Scotland. "On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative."
Another bright spot was third-quarter current account data, which showed Britain's deficit with the rest of the world narrowed more than expected to 12.8 billion pounds, equivalent to 3.3 percent of GDP, from 17.4 billion in the second quarter.
However, economic growth will need to translate into stronger tax revenues and lower spending on social benefits if the government is to meet its budget goals.
November's budget overshoot was driven by a 6.3 percent year-on-year rise in central government spending, while tax revenues grew just 0.6 percent.
The closure of a North Sea oil field earlier this year has done major damage to corporation tax revenues, but Barclays economist Blerina Uruci said she was more concerned about signs that spending by government departments was rising more than expected.
"It could suggest difficulties with delivering efficiency savings as austerity fatigue sets in," she said.
The OBR said it expected to see underspending by government departments towards the end of the fiscal year, as well as stronger future growth in income tax and sales tax revenues.
Business minister Vince Cable sought to play down worries about the state of public finances, saying more austerity than planned could tip the economy back into recession.
"The fact that there has been a temporary increase in borrowing I don't think is a matter for criticism," he told BBC radio. "The government ... have been flexible, just accepting that when the economy slows down you are going to get bigger deficits (and) the government has to borrow to cover them."
However, the Labour Party said Friday's data showed there had already been too much austerity.
"By squeezing families and businesses too hard, choking off the recovery and so pushing borrowing up, not down, (Prime Minister) David Cameron and George Osborne's economic plan has completely backfired," said Labour legislator Rachel Reeves.
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Stalin's birthday marked in Russia and beyond

TBILISI, Georgia (AP) — People across the vast territory where Josef Stalin once imposed his terror have marked the 133rd anniversary of the dictator's birth, some in hatred but others in reverence.
In Moscow, several hundred Russian Communists led by their leader Gennady Zuyganov laid flowers at Stalin's grave at the Red Square Friday, while smaller rallies were held across Russia and several former Soviet republics.
Leftists in neighboring Belarus said they found a Stalin statue that was buried after denunciation of his personality cult in 1956, but refused to specify its whereabouts because they fear authorities will order its destruction. Authorities in Stalin's hometown of Gori, Georgia, they will reinstall his statue that was removed in 2010.
In southern Ukraine, several ethnic Crimean Tatars trashed a small street exhibition on Stalin. The entire Crimean Tatar population of Ukraine was hastily deported in cattle trains on Stalin's orders in 1944 for their alleged collaboration with Nazi Germans during World War II. Of the 200,000 Crimean Tatars, almost a fifth died of starvation and diseases, and the survivors were allowed to return only in the late 1980s.
According to the prominent Russian right group Memorial, Stalin ordered the deaths of at least 724,000 people during the purges and repression of the 1930s, while millions died as a result of the forced labor system in Gulags, the Soviet prison system.
But, some people believe he was a strong and valiant leader whose grip on the nation was needed for security and his popularity in Russia has been climbing amid Kremlin-backed efforts to defend his image.
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Margaret Thatcher in hospital after operation

LONDON (Reuters) - Former British prime minister Margaret Thatcher, the country's first woman elective leader, is in hospital recovering from surgery to remove a growth on her bladder, a source close to the family said on Friday.
After experiencing pain in her bladder earlier in the week, he 87-year-old went to hospital where she underwent a minimally invasive operation, Tim Bell, a public relations executive who once served as image maker to Thatcher, said.
"The operation was completely satisfactory. She's now recovering in hospital and as soon as she's recovered she'll go home," Bell said.
Known as the "Iron Lady," Thatcher, who stepped down in 1990, embraced free market policies, challenged trade unions and privatised many state-owned companies during her 11 years in power, polarising British voters.
Britain's only woman prime minister, who led her country in a war with Argentina over the Falkland Islands in 1982 and was close to the late U.S. President Ronald Reagan, was forced to step down by her own party.
Thatcher suffered a series of mild strokes in late 2001 and 2002, after which she cut back on public appearances and later cancelled her speaking schedule.
She was hospitalised in 2010 for tests relating to a flu illness.
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