Euro, shares fall as euro zone recession deepens

LONDON (Reuters) - The euro and shares fell on Thursday after data showed the euro zone's two biggest economies shrank even more than expected late last year, throwing a first quarter recovery into doubt.

The German economy contracted 0.6 percent in the final quarter of 2012, marking its worst performance since the global financial crisis was raging in 2009. Exports, normally the motor of its economy, did most of the damage.

Overall the euro zone's 17-country economy shrank 0.6 percent, with France's 0.3 percent fall slightly worse than forecast.

Germany is expected to rebound but the figures suggest the bloc overall could remain in recession in the first quarter of this year, despite a jump in market sentiment this year as fears that the currency bloc could fall apart faded.

The data pushed the euro down more than 0.9 percent to a session low $1.3328 by 5:30 a.m. ET.

"It is kind of disappointing that Germany, which had shown so much resilience, is now showing signs of suffering from the debt crisis," said Anita Paluch, sales trader at Gekko Capital Markets.

Stock markets had managed to turn around initial falls but were back down by mid-morning. The pan-European FTSEurofirst 300 index <.fteu3> was down 0.4 percent at 1162.58. Frankfurt's DAX <.gdaxi> and Milan's <.ftmib> fell 0.9 percent while Paris's CAC-40 <.fchi> and London's FTSE <.ftse> were 0.4 percent lower.

German bonds rose as demand for traditional safe-haven assets returned. Bund futures were 45 ticks higher on the day at 142.51, having extended gains after Italian GDP figures also came in weak.

Italy, which holds parliamentary elections in just over a week, suffered its sixth successive quarterly fall in GDP - this time a sharp 0.9 percent - putting it into a longer recession than it suffered during the crisis of 2008/2009.

YEN STEADIES

Data from the European Central Bank also weighed on confidence as one of its quarterly surveys showed professional forecasters now see no growth in the euro zone this year, having last quarter expected a modest 0.3 percent rise.

The pain is not just in Europe. Japan - under pressure over its aggressive monetary and fiscal policies which are driving down the yen - reported earlier on Thursday that its GDP shrank 0.1 percent in the fourth quarter, leaving it in recession and crushing expectations of a modest return to growth.

The yen steadied after swinging wildly this week following a muddled warning on currencies from the G7 nations on Tuesday. It slipped against the dollar but gained on the euro after the Bank of Japan announced, as expected, that it would keep the pace of asset purchases and interest rates unchanged.

The dollar traded at 93.51 yen, up 0.1 percent and off its recent lows of 92.83 yen but still well below a 33-month high of 94.46 set on Monday. The euro was down 0.8 percent at 124.60 yen.

The yen's recent rapid depreciation, after years of sharp appreciation, has drawn some criticism from overseas, with rhetoric heating up before a Group of 20 nations meeting on Friday and Saturday in Moscow.

"Usually the BOJ doing nothing causes a bit of disappointment, but since there are concerns about the flak Japan might get at the G20 this weekend for the weakening yen, standing pat will actually be a relief to the market," said Masayuki Doshida, senior market analyst at Rakuten Securities.

IRAN TENSIONS

Oil prices rose as fresh tensions over Iran's nuclear program revived global supply concerns and offset the GDP data from the euro zone.

Crude futures prices had dropped after the German and French data but changed direction shortly afterwards when the United Nations nuclear watchdog said it had again failed to clinch a deal in talks with Iran on investigating its nuclear program.

Brent crude was up 28 cents to $118.17 by 5:10 a.m. ET, U.S. crude was up 27 cents at $97.28.

"News that the IAEA (International Atomic Energy Agency) and Iran failed to reach a deal created a rebound in prices after an initial drop following the GDP data that was weaker than expected," Olivier Jakob, an analyst at Petromatrix, said.

Markets in China and Taiwan remain shut for the Lunar New Year holiday but Hong Kong resumed trading on Thursday.

Metals markets were quieter as a result of the thin Asian trading. Copper hit a 4-month high of $8,346 a tonne on February 4, but has since struggled to find momentum with the Shanghai Futures Exchange closed this week.

Gold regained some strength, steadying at $1,642.50 an ounce as recent losses started to draw buying interest.

(Reporting by Marc Jones; Editing by David Stamp)

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Letter from India: Executions as a Matter of Opinion

NEW DELHI — When Indian cops take defendants to court, they walk holding hands, as if they were grim lovers. In photographs and video footage of Muhammad Afzal, also known as Afzal Guru, he can be seen being led in this manner by a man in uniform. But the state had no affection for Mr. Afzal.

He was found guilty of helping terrorists who attacked the Indian Parliament in 2001, and thus of “waging war against India,” among other serious charges. His was a long and complicated case, with gaping holes in the police investigation; even the Supreme Court, the highest in India, found that he was implicated not by direct evidence, but by a clutch of circumstances that pointed to his involvement.

Though the courts found Mr. Afzal to be complicit in the attack on Parliament, it remains unclear just how significant his role in the plot was.

Last Saturday morning, he was hanged in secrecy in the Tihar jail in New Delhi. According to the newspaper The Hindu, the 43-year-old was informed of his fate on the morning of the hanging, and after regaining his composure he wrote a letter to his wife and son, which he handed to a jail official as he emerged from his cell for the short walk to the gallows.

The hanging of Mr. Afzal, which surprised the nation and shocked his family, led to expressions of joy from politicians of various parties, as well as ordinary citizens. The world that Mr. Afzal was found unfit to live in was also a world that had the capacity to celebrate a human death. But there were also many who were disgusted, and who protested — and not merely in the Kashmir Valley, Mr. Afzal’s birthplace, where a curfew was imposed — because the execution has raised a number of deep concerns. Taken together, they point to a disturbing question: Is the Indian justice system competent, consistent and fair enough to grant the state the moral authority to terminate a human life?

On Dec. 13, 2001, five armed men in a car drove into the outer fringes of the Parliament compound and opened fire, killing eight security personnel and a civilian. All five attackers, about whom no substantial information has been made public, were soon killed.

According to the police, a trail led from the dead militants to Mr. Afzal and three others — two of whom were also sentenced to death by lower courts, before the Supreme Court, insufficiently impressed by the evidence, overturned one conviction and commuted the other man’s sentence to 10 years.

But the Supreme Court upheld Mr. Afzal’s death sentence, making an observation that would be extraordinary in any mature democracy: “The incident, which resulted in heavy casualties, had shaken the entire nation, and the collective conscience of the society will only be satisfied if capital punishment is awarded to the offender.”

The question is not whether the esteemed court is competent to gauge the “collective conscience of the society” but whether that conscience, whatever it might be, should influence the court’s judgment in the first place. And if it should, then it is hard to overlook a huge body of educated, patriotic and law-abiding Indians who have been saying through all available channels that their “conscience” will be satisfied only if their nation ends the practice of executing people.

Also, there is the matter of inconsistency. There are people who have been sentenced to death for assassinations or for waging war against the state who have yet to be hanged, even though they were sentenced long before Mr. Afzal was. There is no logic that explains why one man in India must hang before another man. The state can, through the sheer force of technicalities, prolong the life of a person on death row, while in a less fortunate person’s case using its discretion to rush through the formalities. In this way, political calculations have been allowed to seep into what should be a purely judicial process.

Indian courts are supposed to impose the death penalty only in the “rarest of rare” cases. But this qualifier has proved to be highly subjective. Recently, the Supreme Court spared the life of a man who had killed his wife and daughter while out on parole; he had been in prison for raping that daughter when she was a minor. The court believed he could be reformed. A few days later, another Supreme Court bench sentenced a man to death for the murder of a 7-year-old boy, having taken into account the fact that the boy was his parents’ “only male child.”

There is outrage, of course, over the implication that those parents’ anguish would have been less, and therefore the crime less heinous, if the child had been a girl.

But there are times, it appears, when the Indian justice system does not wish to satisfy “the collective conscience of the society.”

Manu Joseph is editor of the Indian newsweekly Open and author of the novel “The Illicit Happiness of Other People.”

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Study questions kidney cancer treatment in elderly

In a stunning example of when treatment might be worse than the disease, a large review of Medicare records finds that older people with small kidney tumors were much less likely to die over the next five years if doctors monitored them instead of operating right away.

Even though nearly all of these tumors turned out to be cancer, they rarely proved fatal. And surgery roughly doubled patients' risk of developing heart problems or dying of other causes, doctors found.

After five years, 24 percent of those who had surgery had died, compared to only 13 percent of those who chose monitoring. Just 3 percent of people in each group died of kidney cancer.

The study only involved people 66 and older, but half of all kidney cancers occur in this age group. Younger people with longer life expectancies should still be offered surgery, doctors stressed.

The study also was observational — not an experiment where some people were given surgery and others were monitored, so it cannot prove which approach is best. Yet it offers a real-world look at how more than 7,000 Medicare patients with kidney tumors fared. Surgery is the standard treatment now.

"I think it should change care" and that older patients should be told "that they don't necessarily need to have the kidney tumor removed," said Dr. William Huang of New York University Langone Medical Center. "If the treatment doesn't improve cancer outcomes, then we should consider leaving them alone."

He led the study and will give results at a medical meeting in Orlando, Fla., later this week. The research was discussed Tuesday in a telephone news conference sponsored by the American Society of Clinical Oncology and two other cancer groups.

In the United States, about 65,000 new cases of kidney cancer and 13,700 deaths from the disease are expected this year. Two-thirds of cases are diagnosed at the local stage, when five-year survival is more than 90 percent.

However, most kidney tumors these days are found not because they cause symptoms, but are spotted by accident when people are having an X-ray or other imaging test for something else, like back trouble or chest pain.

Cancer experts increasingly question the need to treat certain slow-growing cancers that are not causing symptoms — prostate cancer in particular. Researchers wanted to know how life-threatening small kidney tumors were, especially in older people most likely to suffer complications from surgery.

They used federal cancer registries and Medicare records from 2000 to 2007 to find 8,317 people 66 and older with kidney tumors less than 1.5 inches wide.

Cancer was confirmed in 7,148 of them. About three-quarters of them had surgery and the rest chose to be monitored with periodic imaging tests.

After five years, 1,536 had died, including 191 of kidney cancer. For every 100 patients who chose monitoring, 11 more were alive at the five-year mark compared to the surgery group. Only 6 percent of those who chose monitoring eventually had surgery.

Furthermore, 27 percent of the surgery group but only 13 percent of the monitoring group developed a cardiovascular problem such as a heart attack, heart disease or stroke. These problems were more likely if doctors removed the entire kidney instead of just a part of it.

The results may help doctors persuade more patients to give monitoring a chance, said a cancer specialist with no role in the research, Dr. Bruce Roth of Washington University in St. Louis.

Some patients with any abnormality "can't sleep at night until something's done about it," he said. Doctors need to say, "We're not sticking our head in the sand, we're going to follow this" and can operate if it gets worse.

One of Huang's patients — 81-year-old Rhona Landorf, who lives in New York City — needed little persuasion.

"I was very happy not to have to be operated on," she said. "He said it's very slow growing and that having an operation would be worse for me than the cancer."

Landorf said her father had been a doctor, and she trusts her doctors' advice. Does she think about her tumor? "Not at all," she said.

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Online:

Kidney cancer info: http://www.cancer.net/cancer-types/kidney-cancer

and http://www.cancer.gov/cancertopics/types/kidney

Study: http://gucasym.org

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Stock futures edge higher, Deere jumps after outlook

NEW YORK (Reuters) - Stock index futures edged higher on Wednesday, suggesting the market would continue a recent advance that lifted benchmark indexes to multi-year highs.

While the long-term trend in markets should remain positive, some investors may take profit at current levels, analysts said, with the S&P near its highest since November 2007. Recent daily moves have been small and trading volume light as investors search for fresh impetus to drive stocks higher.

Equities have been strong performers of late, buoyed largely by healthy growth in corporate earnings, with the S&P 500 gaining 6.5 percent so far this year. The Dow is about 1 percent from an all-time intraday high, reached in October 2007.

"This is a market that refuses to go down, and the trend suggests that we'll not only hit a new high on the Dow, but move well beyond it," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Sarhan noted that the S&P 500 was well over its 50-day moving average of 1,460.92, which he said was a sign the market was overbought.

"A light-volume pullback should be expected and embraced at these levels," he said.

Industrial and construction shares will be in focus a day after President Barack Obama's State of the Union address, during which he called for a $50 billion spending plan to create jobs by rebuilding degraded roads and bridges. He also backed higher taxes for the wealthy.

Retail sales data for January is scheduled for release at 8:30 a.m. ET and are seen up 0.1 percent as consumer paychecks shrank following a recent tax increase. Sales rose 0.5 percent in December.

Investors have cheered strength in recent company results, even as economic data, including recent reads on gross domestic product, have indicated some weakness.

Deere & Co jumped 2.1 percent to $95.99 in premarket trading after the farm equipment maker reported results and raised its full-year profit outlook.

S&P 500 futures rose 2.9 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 19 points and Nasdaq 100 futures rose 7.25 points.

Comcast Corp agreed late Tuesday to buy General Electric Co's remaining 49 percent stake in NBC Universal for $16.7 billion. Comcast jumped 8 percent to $42.10 in premarket trading while Dow component GE was up 3.2 percent to $23.31.

Yahoo Inc Chief Executive Marissa Mayer said Tuesday the company's search partnership with Microsoft Corp was not delivering the market share gains or the revenue boost that it should.

Companies scheduled to report quarterly results on Wednesday include MetLife Inc , Applied Materials and Whole Foods Market .

According to the latest Thomson Reuters data, of 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

Also in economic news, business inventories are seen rising 0.3 percent in December, a repeat of the November increase. The data is due at 10:00 a.m. ET

Stocks closed modestly higher Tuesday as investors awaited President Barack Obama's State of the Union address.

(Editing by Bernadette Baum)

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IHT Rendezvous: IHT Quick Read: Feb. 12

NEWS North Korea appeared to conduct its third, and probably largest, nuclear test on Tuesday, according to American and Asian officials, posing a new challenge for the Obama administration in its effort to keep the country from becoming a full-fledged nuclear power. David E. Sanger reports from Washington, and Choe Sang-hun from Seoul.

Pope Benedict XVI’s surprise announcement on Monday that he will resign on Feb. 28 sets the stage for a succession battle that is likely to determine the future course of a church troubled by scandal and declining faith in its traditional strongholds around the world. Rachel Donadio and Elisabetta Povoledo report from Vatican City.

Flying is becoming safer: It will be four years on Tuesday since the last fatal crash in the United States, a record unmatched since propeller planes gave way to the jet more than half a century ago. Jad Mouawad and Christopher Drew report.

Thousands of Afghans have built homes and careers on an influx of foreign money and are fearful that their lives could implode as Western forces disappear. Graham Bowley reports from Kabul.

There are many ways of striking it rich in Brazil, but one strategy may come as a particular surprise in today’s economic climate: securing a government job. Simon Romero reports from São Paulo.

Critics in France say a proposal to add school classes on Wednesdays fails to address concerns that French students are trailing those of other European countries. Nicola Clark reports from Paris.

Concern over the euro moved to the forefront Monday as finance ministers of the countries using the currency held their monthly meeting. But this time, with the European Union’s recession continuing, the topic was the strength of the euro rather than its many weaknesses. James Kanter reports from Brussels.

The troubled Olkiluoto 3 nuclear plant in Finland will probably not start operating before 2016, the power utility behind the plant said Monday, another delay to a project that is already four years overdue. David Jolly reports.

FASHION As the Metropolitan Museum of Art announces “Punk: Chaos to Couture,” the story fits neatly with the winter 2013 season. Suzy Menkes writes from New York.

ARTS “No,” the Chilean entry in this year’s foreign-film race of the Academy Awards, has received praise but also criticism in its home nation. Larry Rohter reports.

SPORTS Women tennis players, with a few exceptions, have not transitioned successfully from the top of the college game to the top levels of the WTA Tour. Ben Rothenberg reports from Charlottesville, Virginia.

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The Bachelor's Sean Lowe Blogs About His Dates in St. Croix

Sean Lowe is the star of season 17 of The Bachelor, which airs Mondays on ABC. The hunky Dallas businessman and entrepreneur is blogging about his romantic journey for PEOPLE.com.

I'd developed really strong feelings for the final six women on The Bachelor – and I could hardly wait to take them to St. Croix. Our previous week in Canada was great! My heart and head were back on track, and I felt as though the women put their focus back on me. And because of that, each of my relationships grew stronger.

But it was time to leave the cold weather behind and move on to some sandy beaches. This was a huge week for all of us because I would have to decide whose family I was ready to meet.

I had three one-on-one dates and one group date in St. Croix. I decided to give the one-on-one dates to women I had questions for – and the group date went to the women whose hometowns I was ready to visit.

My first date was with AshLee, who was a front-runner in my mind since we visited the theme park back in Los Angeles. She is sweet, loving and compassionate, and I knew she truly wanted to give her heart over to me. But I was still left with doubts about our relationship because I didn't seem to have as much fun with her as I did with the other women.

Given her traumatic childhood, it's understandable why AshLee has control issues. But I think that was preventing her from really letting go and allowing herself to have fun. I really want a partner that I can laugh uncontrollably with and someone who can make even mundane tasks feel exciting. I hoped AshLee had that quality in her, or that I brought it out in her, and I was ready to find out.

After taking the catamaran to the island, AshLee decided to take one for the team and tell me everything I needed to know about Tierra. Until that point, I had only heard the women say they didn't like Tierra, but they never gave specific reasons. It was actually a huge relief to hear all that AshLee had to say. It took a lot of courage for her to bring it up.

That evening, we ended our date with an oceanside dinner where she screamed her love for me while standing on a chair. For the first time, I felt like AshLee was finally letting go and stepping out of her comfort zone for me. I left that date thinking once again that AshLee might be the woman for me.

Connecting with Tierra

Next was my long-awaited date with Tierra. I had a lot of fun with her that day walking around the streets of St. Croix, but I couldn't shake what AshLee had told me. That night, as we had a romantic dinner in an old sugar mill, I tried to really figure out what my feelings were for Tierra, and if I could see a future for us.

I was nervous that if I ended up with Tierra, drama would follow her into our everyday lives. But when she told me she was falling in love with me, I softened a bit. She was always kind when she was with me, and I wanted to believe that the drama was circumstantial and that once she wasn't around a bunch of girls dating the same guy, she would be drama-free. I still ended the evening with questions, but remembering that my connection with Tierra was strong.

Group Date

The following day was the group date with Des, Lindsay and Catherine. I didn't have a lot of questions for these three women. They all have one thing in common: I always have fun with them. Since the beginning I've said that I want to marry my best friend, and they definitely fit that criterion.

We spent the day traveling and touring the island in a Jeep. At the end of the day, I really didn't know who I would give the rose to because they were all so deserving. But I decided to give it to Lindsay because she was so supportive, patient and encouraging throughout this entire journey.

My last date of the week was with Lesley. She was another person who fit the best-friend criteria, but I needed to see more from her. Lesley had a wall up and I always felt like she couldn't be completely vulnerable with me.

Our date was fun, but I needed more than fun. I desperately wanted to see her open up emotionally and allow me to see her true feelings, but that never happened. I was shocked to hear her say on TV that she loved me, and I was left confused as to why she didn't tell me that during our date. Had she told me, it could have changed everything.

Sisterly Advice

I flew my sister, Shay, to St. Croix for her birthday. She loves the show (she signed me up for The Bachelorette!), and I thought it would be a cool present for her. She is also a great judge of character and she knows me better than anyone else.

My sister's advice before I left Dallas for L.A. was to avoid the girl whom drama surrounded. After hearing everything that AshLee had to say about Tierra, I thought it would be a good idea to have my sister sit down and visit with Tierra so I could get her opinion.

I had no idea what I was walking into upon entering the women's suite. I was not aware of the big blowout AshLee and Tierra just had. I found Tierra crying on her bed with her head in her hands. I had already figured by this point that Tierra was not the woman I was going to marry, so when I saw how distraught she was, I knew I had to end it right then and there.

I still believe Tierra has more good in her than people see, but I also recognize that she doesn't have the maturity or social skills necessary to make it on The Bachelor.

When it came time to send someone home at the rose ceremony, I felt confident in my decision. As much as I enjoyed spending time with Lesley, I knew I had to send her home because she never allowed herself to open up emotionally.

I was sad to see Lesley leave, but I felt so confident in my final four. Knowing hometown dates were right around the corner, I was incredibly excited. I loved bringing Emily home to meet my family, and it changed everything for me, so I had really high hopes for the coming week. On to hometowns!

Thanks for watching!
Sean

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Pope shows lifetime jobs aren't always for life

The world seems surprised that an 85-year-old globe-trotting pope who just started tweeting wants to resign, but should it be? Maybe what should be surprising is that more leaders his age do not, considering the toll aging takes on bodies and minds amid a culture of constant communication and change.

There may be more behind the story of why Pope Benedict XVI decided to leave a job normally held for life. But the pontiff made it about age. He said the job called for "both strength of mind and body" and said his was deteriorating. He spoke of "today's world, subject to so many rapid changes," implying a difficulty keeping up despite his recent debut on Twitter.

"This seemed to me a very brave, courageous decision," especially because older people often don't recognize their own decline, said Dr. Seth Landefeld, an expert on aging and chairman of medicine at the University of Alabama at Birmingham.

Age has driven many leaders from jobs that used to be for life — Supreme Court justices, monarchs and other heads of state. As lifetimes expand, the woes of old age are catching up with more in seats of power. Some are choosing to step down rather than suffer long declines and disabilities as the pope's last predecessor did.

Since 1955, only one U.S. Supreme Court justice — Chief Justice William Rehnquist — has died in office. Twenty-one others chose to retire, the most recent being John Paul Stevens, who stepped down in 2010 at age 90.

When Thurgood Marshall stepped down in 1991 at the age of 82, citing health reasons, the Supreme Court justice's answer was blunt: "What's wrong with me? I'm old. I'm getting old and falling apart."

One in 5 U.S. senators is 70 or older, and some have retired rather than seek new terms, such as Hawaii's Daniel Akaka, who left office in January at age 88.

The Netherlands' Queen Beatrix, who just turned 75, recently said she will pass the crown to a son and put the country "in the hands of a new generation."

In Germany, where the pope was born, Chancellor Angela Merkel, who is 58, said the pope's decision that he was no longer fit for the job "earns my very highest respect."

"In our time of ever-lengthening life, many people will be able to understand how the pope as well has to deal with the burdens of aging," she told reporters in Berlin.

Experts on aging agreed.

"People's mental capacities in their 80s and 90s aren't what they were in their 40s and 50s. Their short-term memory is often not as good, their ability to think quickly on their feet, to execute decisions is often not as good," Landefeld said. Change is tougher to handle with age, and leaders like popes and presidents face "extraordinary demands that would tax anybody's physical and mental stamina."

Dr. Barbara Messinger-Rapport, geriatrics chief at the Cleveland Clinic, noted that half of people 85 and older in developed countries have some dementia, usually Alzheimer's. Even without such a disease, "it takes longer to make decisions, it takes longer to learn new things," she said.

But that's far from universal, said Dr. Thomas Perls, an expert on aging at Boston University and director of the New England Centenarians Study.

"Usually a man who is entirely healthy in his early 80s has demonstrated his survival prowess" and can live much longer, he said. People of privilege have better odds because they have access to good food and health care, and tend to lead clean lives.

"Even in the 1500s and 1600s there were popes in their 80s. It's remarkable. That would be today's centenarians," Perls said.

Arizona Sen. John McCain turned 71 while running for president in 2007. Had he won, he would have been the oldest person elected to a first term as president. Ronald Reagan was days away from turning 70 when he started his first term as president in 1981; he won re-election in 1984. Vice President Joe Biden just turned 70.

In the U.S. Senate, where seniority is rewarded and revered, South Carolina's Strom Thurmond didn't retire until age 100 in 2002. Sen. Robert Byrd of West Virginia was the longest-serving senator when he died in office at 92 in 2010.

Now the oldest U.S. senator is 89-year-old Frank Lautenberg of New Jersey. The oldest congressman is Ralph Hall of Texas who turns 90 in May.

The legendary Alan Greenspan was about to turn 80 when he retired as chairman of the Federal Reserve in 2006; he still works as a consultant.

Elsewhere around the world, Cuba's Fidel Castro — one of the world's longest serving heads of state — stepped down in 2006 at age 79 due to an intestinal illness that nearly killed him, handing power to his younger brother Raul. But the island is an example of aged leaders pushing on well into their dotage. Raul Castro now is 81 and his two top lieutenants are also octogenarians. Later this month, he is expected to be named to a new, five-year term as president.

Other leaders who are still working:

—England's Queen Elizabeth, 86.

—Abdullah bin Abd al-Aziz al-Saud, king of Saudi Arabia, 88.

—Sabah al-Ahmad al-Jaber al-Sabah, emir of Kuwait, 83.

—Ruth Bader Ginsburg, U.S. Supreme Court associate justice, 79.

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Associated Press writers Paul Haven in Havana, Cuba; David Rising in Berlin; Seth Borenstein, Mark Sherman and Matt Yancey in Washington, and researcher Judy Ausuebel in New York contributed to this report.

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Yen steady, euro dips after G7 urges against FX war

LONDON (Reuters) - The yen hovered near three-year lows against the dollar and the euro fell on Tuesday after the G7 nations urged countries to refrain from competitive devaluations and a U.S. official backed Japan's new anti-deflation policies.

The Group of Seven industrialized nations published a statement saying it remained committed to "market-determined" exchange rates, reacting to weeks of concern that Japan's monetary easing policy, which has also weakened its currency, could trigger far-reaching currency wars.

"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the group said.

Japan's Finance Minister Taro Aso welcomed the G7 statement, saying it showed the group recognized Japan's new anti-deflation policy was not aimed at affecting foreign exchange markets.

By 5:30 a.m. ET the yen was close to a three-year low of 94.31 to the dollar. The euro was down 0.2 percent versus the dollar and 0.5 percent lower at 125.90 yen after rising over 2 percent on Monday.

Treasury Undersecretary Lael Brainard said on Monday the United States supported Japanese efforts to end deflation, but also noted the G7 has long been committed to exchange rates determined by market forces.

The euro, the main riser among major currencies over the last few months as confidence in the euro zone has rebounded and the yen has slumped, was back at $1.3405 following the G7 statement.

It had risen briefly earlier after ECB Vice President Vitor Constancio said the bank's employment growth and inflation forecasts next month were likely to be close to the December figures.

The comments doused rate cut hopes, only re-kindled last week by the head of the bank, Mario Draghi, who said it was looking to see whether the euro's recent rise risked pushing inflation below its comfort zone.

SPAIN FOCUS

Having started the day down 0.2 percent, European shares were almost level again by 5:30 a.m. ET as London's FTSE 100 <.ftse> and Paris's CAC-40 <.fchi> recovered, though Frankfurt's DAX <.gdaxi> remained down 0.2 percent.

In the bond market, Spanish and Italian bonds inched up as domestic buyers took advantage of a recent sell-off, but the recovery looked fragile given political uncertainty in both countries.

Spain sold 5.6 billion euros ($7.5 billion) of 6- and 12-month Treasury bills, beating the top end of the target amount, but paid a higher yield on the longer-term paper as a political corruption scandal weighed on shaky confidence.

The ECB's Draghi is due to address Spanish lawmakers later on Tuesday to explain and defend the ECB's current monetary policy strategy against a backdrop of heightened concerns about the strong euro.

Draghi is also expected to meet Prime Minister Mariano Rajoy, but the market does not expect them to discuss whether Madrid might need financial aid, which would trigger the ECB's bond purchase scheme.

Financial markets showed a muted reaction, meanwhile, to the news that North Korea has conducted a nuclear test.

The nuclear test monitoring agency said the blast was double the size of its 2009 test. NATO condemned the move, calling it an "irresponsible act" that posed a grave threat to world peace.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

Brent oil dipped to just under $118 a barrel, copper was flat, while spot gold stayed near a one-month low.

(Editing by Will Waterman)

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Letter From Europe: France Takes a Step Back in Its History

PARIS — Many years ago in Ouagadougou, the dusty capital of Burkina Faso, a visiting couple from France ordered dinner in a French-owned restaurant called Le Safari whose offerings included dishes listed as “selon arrivage,” loosely translated as “depending on availability.”

The overhead thunder of a French airliner on final approach to landing offered a more telling definition.

“Not long now,” the owner told the impatient couple. And, as promised, a rickety moped driven by a man in robes arrived from the airport within minutes, bearing chilled oysters to landlocked northwest Africa, fresh from distant Paris.

The episode seemed to say something about the umbilical cord binding France and its former colonies, like Burkina Faso, in a hard-nosed relationship designed to anchor French ways and to secure French benefits in commerce, diplomacy and influence going far beyond a plate of fines de claire.

But the relationship always had its darker, more muscular side. A year before the dinner at Le Safari, in another West African nation, 1,000 French soldiers had deployed to resist a southward advance by Libyan troops in Chad, intent on blocking what was depicted as a vision of Islamic expansionism sponsored by the former Libyan leader, Col. Muammar el-Qaddafi.

Almost 30 years later, the echoes of that moment — and many others like it — resonate through the fighting in Mali, whose desert north has become a crucible of Islamic fervor where French troops now risk being drawn into a protracted campaign to cement at least a semblance of government control.

And, much as President François Hollande of France denies that his country is still the gendarme of francophone Africa, the columns of French soldiers and planeloads of paratroops embroiled in the newest fighting recall much earlier campaigns.

“There was a time when General Faidherbe pursued armed bands attacking the forts of the Sahel, and even then they professed radical Islam,” Bertrand Badie, a political science scholar in Paris, wrote in Le Monde, referring to Gen. Louis Faidherbe, who played a central role in solidifying French interests in the broad swath of desert known as the Sahel in the 19th century. “What have we done since then?”

For many years, French military intervention in Africa functioned as the guardian of French economic interests and of the large expatriate French communities who benefited from them in cities like Libreville in Gabon and Abidjan in Ivory Coast. French troops defined the longevity of protégé African leaders. The French presence was a postcolonial bulwark, too, against British influence in southern and eastern Africa.

When Graham Greene crossed the border between Liberia and what was then the French colony of Guinea in the 1930s, as he recounted in his “Journey Without Maps,” the Liberians did not call their neighbor “Guinea” but “France,” so pervasive was French colonial influence.

But French Socialists, including Mr. Hollande, have long professed unease with the role of post-imperial puppet-masters.

As recently as December, when rebel forces advanced on Bangui, the capital of the Central African Republic, France dispatched 600 soldiers there. “If we’re present, it is not in order to protect a regime,” Mr. Hollande declared. “It’s to protect our citizens and our interests and in no way to intervene in the internal affairs of a country.”

The era of interference, he said, “is over with.”

A few days later, his words might have seemed somewhat premature when French warplanes halted a lightning southward advance by Islamist extremists in northern Mali. Paris deployed 4,000 soldiers for a ground campaign to recapture the insurgents’ northern redoubts.

After the quagmire of Afghanistan, welcome to the shifting sands of Sahelistan.

Mr. Hollande, indeed, had already cast the jihadi presence in northern Mali not in terms of a challenge to Francafrique, as the pervasive French presence in its former African colonies is known, but in the global terms of an international struggle against terrorism. “We face a threat that concerns the entire world,” Mr. Hollande told the United Nations in September.

That assessment, said Patrick Smith, the editor of a London-based newsletter, Africa Confidential, has spread a “geopolitical patina” over the “very, very local” mistakes and miscalculations in Mali and elsewhere.

Indeed, as France seeks an exit strategy based on handing over the fight to Malian and West African troops, “the next part of the war is going to be much more complicated,” Mr. Smith said in an interview.

Many years ago, when the French Foreign Legion had been drawn into an easy contest against rebels in what was called Zaire, a French diplomat in the capital, Kinshasa, concluded that “in Africa, there are never big battles.”

The official may have been making comparisons with cataclysms woven into French history, like the Somme during World War I, or Dien Bien Phu in Vietnam. But, if Mr. Hollande is borne out in his analysis of the jihadi menace, Sahelistan might just put the diplomat’s adage to a critical test.

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Anne Hathaway on Winning An Oscar: Whatever Happens, Happens

By Phil Boucher

02/11/2013 at 07:00 AM EST

She's won big at the Golden Globes and now the BAFTAs, but will Anne Hathaway take home an Oscar?

Hathaway – who is nominated for Best Supporting Actress for her role in Les Misérables – isn't spending too much time worrying about it.

"Whatever happens in two weeks, happens. It won't be the worst thing that happens to me if I don't win, and with my husband by my side it won't be the best thing either. So I am feeling very good about whatever," the actress, 30, told reporters backstage after nabbing a best supporting actress statue at Sunday's British Academy of Film and Television Arts Awards in London.

"I really have to say that getting to do the work, getting to play the character with this cast and to have this opportunity, it is the most sublime experience. I don't know how I got so lucky. ... So I don't think ahead – I am just happy to be in the conversation in two weeks' time," she said.

But should she win, Hathaway has been imagining where to keep her statue.

"I kind of have this fantasy – because this year that I have been lucky enough to receive a few pieces of hardware – that I'm going to get a tool shed and keep it in my garage so that it opens to some music. But for now I am just going to keep it in my kitchen," she said.

While she's earned awards and received critical acclaim for her portrayal of Fantine, she says the best thing to come of filming the musical epic was meeting costar Russell Crowe.

"The biggest surprise of the whole experience was what a sweetie pie Russell Crowe was. The whole cast would kind of gather around his place and we would just sing for hours. We all bonded that way. He has become a dear, dear friend," she said, "and I feel very blessed to have him in our life."

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