WORLD NEWS
Russia Says Human Error To Blame For Polish Crash

By Associated Press MATT MOORE and MONIKA SCISLOWSKA

WARSAW, Poland – Russian investigators suggested human error may have been to blame in the plane crash that killed the Polish president and 95 others, saying Monday there were no technical problems with the Soviet-made plane.

The Tu-154 went down Saturday while trying to land in dense fog near a Smolensk airport in western Russia. All aboard were killed, including President Lech Kaczynski and dozens of Polish political, military and religious leaders.

They had been traveling in the Polish government-owned plane to attend a memorial in the nearby Katyn forest for thousands of Polish military officers executed 70 years ago by Josef Stalin's secret police.

The pilot had been warned of bad weather in Smolensk, and was advised by traffic controllers to land elsewhere — which would have delayed the Katyn observances.

He was identified as Capt. Arkadiusz Protasiuk, 36, and the co-pilot as Maj. Robert Grzywna, 36. Also in the cockpit were Ensign Andrzej Michalak, 36, and Lt. Artur Zietek, 31.

In Warsaw, there was concern the pilots may have been asked by someone in the plane to land at Smolensk instead of diverting to Minsk or Moscow, in part to avoid missing the ceremonies.

Polish Prosecutor General Andrzej Seremet said Polish investigators talked to the flight controller and flight supervisor and "concluded that there were no conditions for landing."

"The tower was advising against the landing," Seremet said.

The plane was equipped with an instrument landing system, or ILS, said Col. Wieslaw Grzegorzewski of the Polish Defense Ministry.

"I can confirm the pilots were preparing for landing without the ILS system," he said. "The airport didn't have the ILS system."

Russian media reports said the Smolensk airfield is a former military air base that lacks equipment for automatic landings.

The business daily Kommersant said Monday that about 50 military personnel maintain the airport which is used only sporadically for official visits. It said the airfield has no permanent traffic controllers, and they are brought from the city of Tver when it's necessary.

Kommersant also said that that the pilots had been informed about the bad weather in the area while the plane was still over Belarus, but the captain said he would see conditions for himself and then make a decision.

Polish investigators said they will listen to the cockpit conversations recorded on the black boxes to see if there were "any suggestions made to the pilots" from other people aboard the plane.

Other Russian officials said the pilots were offered the chance to land in Moscow, Minsk or Vitebsk, but they chose Smolensk, despite four failed attempts before the fifth and fatal approach.

Polish media reported in August 2008 that pilots flying Kaczynski to Tbilisi refused the president's order to land there because of the country's war with Russia, diverting instead to Azerbaijan.

In remarks on Russian television, Deputy Prime Minister Sergei Ivanov told a government meeting including President Dmitry Medvedev that the data recorders on the plane were found to have been completely functional, which will allow a detailed analysis.

"It is reliably confirmed that warning of the unfavorable weather conditions at the North airport and recommendations to go to a reserve airport were not only transmitted but received by the crew of the plane," he said.

Russian investigators have almost finished reading the flight recorders, said Alexander Bastrykin, Russia's chief investigator.

"The readings confirm that there were no problems with the plane, and that the pilot was informed about the difficult weather conditions, but nevertheless decided to land," Bastrykin said during a briefing with Russian Prime Minister Vladimir Putin in Smolensk.

The wreckage will remain on site through midweek to speed the investigation, Russian Deputy Transport Minister Igor Levitin said.

In Warsaw, the acting president, Bronislaw Komorowski, moved Monday to start appointing replacements for the many posts left vacant in the presidential office. He appointed a retired general, Stanislaw Koziej, as new National Security Bureau chief, and said the first task he was setting him was a review of the rules for travel of top military officials.

Both Russia and Ukraine declared a day of mourning Monday, as Poles struggled to come to terms with the tragedy that eliminated so many of their government and military leaders.

Tens of thousands watched as Kaczynski's body, returned Sunday to Warsaw, was carried in a coffin by a hearse to the presidential palace. His twin brother, Jaroslaw Kaczynski, the former prime minister, was present.

Adam Bielan, an aide to Jaroslaw, said the two brothers spoke briefly Saturday morning when the president called his twin just before the plane crash to say they would be landing soon.

At U.N. headquarters in New York, the U.N.'s blue and white flag flew at half-staff Monday in Kaczynski's memory.

U.N. Secretary-General Ban Ki-moon expressed his "most profound condolence at such a tragic passing away of President Lech Kaczynski, with whom I have been working very closely, especially on climate change."

An annual Holocaust memorial event at Auschwitz-Birkenau on Monday was honoring Kaczynski and the other victims. Organizers of the March of the Living — with some 10,000 Jewish youth marching over about 2 miles (3 kilometers) between the two parts of the former Nazi death camp — said those marching would also remember those killed in Saturday's crash.

Forensics experts from Poland and Russia were working to identify other bodies, including first lady Maria Kaczynska, using DNA testing in many cases.

Jacek Sasin, a spokesman for the Presidential Palace, said Kaczynska's body would be sent to Warsaw on Tuesday.

He said the bodies of the first couple would lie in state at the palace beginning Tuesday, their coffins closed, and the public would be permitted to view them.

"We want every Pole who wants to pay tribute to the president, to be able to come and stand by the coffin," he said.

Sasin said officials are now planning the funeral for Saturday but a final decision depends on when the bodies of all 96 victims are returned home. So far, 87 bodies have been recovered and 40 of them identified, Seremet said.

Medvedev has said he wants to attend, according to Polish Foreign Minister Radek Sikorski.

Sasin said nothing has been changed in the living quarters of the president and his wife since they were there for breakfast Saturday.

"I don't think there is anyone who would want to change anything there. We still cannot believe what has happened," he said.

Among the victims Saturday was Ryszard Kaczorowski, 90, the last leader of Poland's exiled government in London. The exile leadership was established during the Nazi occupation of Poland and continued to declare itself the rightful government during the decades of communism, until Lech Walesa became Poland's first popularly elected president in 1990.

The crash also took an icon of Poland's Solidarity freedom movement, 80-year-old Anna Walentynowicz. Workers at the Lenin Shipyard in Gdansk went on strike when Walentynowicz was fired from her job as a crane operator in August 1980 for her opposition activity.

That sparked strikes that spread to other plants across the nation, giving rise to the movement that helped bring about the demise of communism in Poland nine years later.

Also aboard were the army chief of staff, the navy chief commander, and heads of the air and land forces, the national bank president, the deputy foreign minister, the army chaplain, the head of the National Security Office, the deputy parliament speaker, the Olympic Committee head and at least two presidential aides and 17 lawmakers.

World Stock Markets Trade Steady Thru Asian Inflation Spike

By Associated Press

LONDON (AP) -- World stock markets traded in a narrow range Thursday amid growing concerns of an overheating Chinese economy and as investors awaited more U.S. economic data over the rest of the week for further insights into the state of the U.S. economic recovery.

In Europe, the FTSE 100 index of leading British shares was down 1.19 point at 5,639.38 while the CAC-40 in France was less than a point lower at 3,942.88. Germany's DAX rose 9.09 points, or 0.2 percent, to 5,945.81.

Wall Street was also poised for a fairly subdued opening -- Dow futures were down 9 points, or 0.1 percent, at 10,556, while the broader Standard & Poor's 500 futures fell 2.4 points, or 0.2 percent, at 1,143.30.

"Financial markets are finely poised," said Kit Juckes, chief economist at ECU Group.

Juckes reckons that much will hinge on whether the S&P 500 can break through its previous high of 1,150 or not -- on Wednesday, the S&P 500 closed up 5.16 points, or 0.5 percent, at 1,145.61.

"My bets, unchanged of late, are that equities break out to the upside," he added.

U.S. stocks in particular may be jolted out of their current torpor by weekly jobless claims figures later -- the consensus in the markets is that claims will drop modestly to around 460,000 last week from 469,000 in the previous week.

More will come on Friday when U.S. retail sales and consumer sentiment figures, which should shine a light on the state of consumption in the U.S. The state of the U.S. consumer is particularly important for the U.S. economy as retail spending accounts for around 70 percent of the world's largest economy.

Earlier in Asia, worries about rising inflationary pressures in China reined in any buying momentum, though Japan's Nikkei 225 stock average gained 88.91 points, or 0.9 percent, to 10,653.70 as investors were boosted by a news report the government will soon upgrade its economic assessment for this year.

The markets are wary at the moment by concerns that the monetary authorities in China may start raising interest rates soon to keep a lid on mounting inflationary pressures -- figures earlier showed that China's inflation rate jumped to 2.7 percent in February over a year earlier from 1.5 percent in January.

Any moves to raise the cost of borrowing in China or curb lending by Chinese banks will stoke concerns around the world that Chinese economic growth will slow down -- one of the major reasons behind the global recovery from recession has been elevated growth levels in China.

"The People's Bank of China is behind the curve and needs to take action on the liabilities side of banks' balance sheets," said Diana Choyleva, an analyst at Lombard Street Research.

In Australia too, there was a break in the recent slew of positive economic news. The jobless rate edged up slightly to 5.3 percent in February, the first rise since peaking at 5.8 percent last October.

Hong Kong's Hang Seng gained 19.91 points, or 0.1 percent, to 21,228.20 while South Korea's Kospi shed 0.3 percent to 1,656.62. China's Shanghai benchmark added 0.1 percent to 3,051.28 and India's Sensex was up 0.2 percent.

Elsewhere, Australia's index fell 0.1 percent and Taiwan's market retreated 0.4 percent.

Oil prices were steady with benchmark crude for April delivery up 2 cents to $82.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 60 cents to settle at $82.09 on Wednesday.

Currency markets were also pretty subdued with the euro unchanged at $1.3660 and the dollar down 0.1 percent at 90.41 yen.

Chinese Inflation Spikes Higher In February

By Associated Press

 BEIJING (AP) -- China's inflation spiked higher in February, adding to pressure on Beijing to prevent overheating and keep the recovery in the world's third-largest economy on track.

Consumer prices rose 2.7 percent in February over a year earlier, up from January's 1.5 percent increase, the National Bureau of Statistics reported Thursday. Driven by a 6 percent jump in food costs, it exceeded most analysts' forecasts and came close to the government's target of 3 percent inflation for 2010.

A spike in inflation over the past four months is forcing Beijing to divide its focus between boosting growth and preventing overheating. Communist leaders have imposed curbs on bank lending but avoided raising interest rates, which could slow growth and affect China's trading partners by denting demand for imports.

"There are lots of signs that price pressure is building in the Chinese economy sooner than expected, and that's going to be a concern for the government," said Tom Orlik, an analyst in Beijing for Stone & McCarthy Research Associates.

Orlik and others said the inflation data were unlikely to provoke an immediate hike in interest rates. But many expect Beijing to raise rates as early as the next two months as it eases back on its stimulus. This year's official growth target is 8 percent, down from the 10.7 percent rate in the final quarter of 2009.

Some doubt China's efforts to prevent overheating will have any impact on Beijing's trading partners because its target level for growth should continue to drive demand for imports.

"All these measures about lending controls and rate hikes are to engineer a soft landing," said UBS economist Tao Wang. "If people are expecting 9 to 10 percent GDP growth from China, then a rate hike or two won't change that prospect at all."

China's imports in February surged 44.7 percent from a year earlier as domestic demand picked up, the government reported Wednesday.

The central bank reported Thursday that Chinese bank lending in February fell to 700 billion yuan ($102 billion), down by half from January's level after credit controls were tightened in mid-January.

In an illustration of the galloping economy's effect on prices, the American Chamber of Commerce in Southern China said Thursday its member companies face higher labor costs as they compete with stimulus-financed construction projects for scarce workers.

"Many of our companies are facing severe difficulty with employees not returning" after last month's Lunar New Year holiday, said chamber president Harley Seyedin. "People are also demanding higher wages."

Still, the chamber said its members plan to boost investment in southern China by 40 percent this year to $9.4 billion.

"Our companies believe the recovery is well on its way," Seyedin said.

Chinese leaders worry the flood of stimulus money and bank lending is fueling a dangerous bubble in prices of stocks and real estate.

Inflation is politically sensitive in China because it can erode economic gains on which the Communist Party bases its claim to power.

The statistics bureau blamed the latest price jump on bad winter weather that hurt food production and said pressure should ease once spring harvests come in.

"So far there is no overheating in the economy," said a bureau spokesman, Sheng Laiyun, at a news conference. "Although February CPI rose faster than before, it is still mild to moderate."

Still, the data showed February's wholesale inflation accelerating to 5.4 percent, up from January's 4.3 percent, which could lead to more retail price hikes.

Housing price inflation also accelerated in February, with costs in 70 Chinese cities rising by 10.7 percent over a year earlier, up from January's 9.5 percent rate, the government reported earlier.

"Inflation is expected to trend higher in the next several months before peaking around midyear," said Jing Ulrich, JP Morgan's chairwoman for China equities, in a report.

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