Tag Archives: U.S.

Netanyahu frequents Russia as U.S. influence in mideast recedes

Israeli PM Netanyahu inspects honour guard during welcoming ceremony upon his arrival at Moscow's Vnukovo airport

By Dan Williams and Denis Dyomkin

JERUSALEM/MOSCOW (Reuters) – With the Obama administration in its final months, Israeli Prime Minister Benjamin Netanyahu has been a more frequent and feted visitor to Moscow than Washington, his eye on shifting big-power influence in the Middle East.

No one expects Netanyahu, who was hosted by Russian President Vladimir Putin on Tuesday for the third time in the last year, to break up Israel’s bedrock alliance with the United States. But he is mindful of Putin’s sway in the Syrian civil war and other Middle East crises as the U.S. footprint in the region wanes.

“Netanyahu’s not defecting, but what we see here is a bid to maneuver independently to promote Israel’s interests,” said Zvi Magen, a former Israeli ambassador to Russia now with Tel Aviv University’s Institute for National Security Studies.

With Russian forces fighting alongside Iran and Lebanese Hezbollah guerrillas to keep Syrian President Bashar al-Assad in power, Putin is the closest thing to a guarantor that Israel’s three most potent enemies will not attack it from the north.

He is also the first port of call for Netanyahu’s argument that Assad’s loss of central control vindicates Israel’s de facto annexation of the Golan Heights in 1981, a move never recognized internationally. Israel took the area in a 1967 war.

Netanyahu can offer Putin reciprocal Israeli restraint in Syria, where Russia maintains a strategic Mediterranean base, and a chance to play a greater role in Israeli-Palestinian peacemaking that has long been dominated by the United States.

With the Obama administration and France hinting they might back a future U.N. Security Council resolution against Israeli settlements on occupied Palestinian land, Netanyahu also has an interest in sounding out the views of veto-wielding Russia.

Moscow’s guest-list suggests mediation may be under way.

When Netanyahu last came, in April, it was three days after a visit by Palestinian President Mahmoud Abbas. On Wednesday, when Netanyahu departs, Russian Foreign Minister Sergei Lavrov is scheduled to host Palestinian counterpart Riyad al-Maliki.

FRIENDLY FIRE

Yaakov Amidror, one of Netanyahu’s former national security advisers, played down the scope of Israeli-Russian relations. He said they focused on preventing the sides accidentally trading fire over Syria and were underpinned by Netanyahu’s personal rapport with Putin – hence their meetings every few months.

By contrast, while Netanyahu and Obama have feuded on Iran and the Palestinians and are wrangling over a new memorandum of understanding (MOU) for future U.S. defense aid to Israel, their countries’ partnership ticks over thanks to a network of military, diplomatic and parliamentary channels, Amidror said.

“In Syria, there is liable to be a clash tomorrow morning that neither we nor the Russians want,” said Amidror, now with the Begin-Sadat Center for Strategic Studies at Israel’s Bar-Ilan University and the U.S. think-tank JINSA, alluding to the risk of a friendly-fire incident.

“It’s not like the MOU, which we can spend months discussing with the Americans and be assured a resolution will be found.”

Russia has been closed-lipped about any wider statecraft initiatives it may have in store for Israel. The two countries “each express their positions in a pretty constructive manner, and all of this contributes to this rather frequent and intensive communication”, Kremlin spokesman Dmitry Peskov said.

“But of course, there cannot be any talk of the intensity of these contacts reflecting any kind of rivalry with anyone,” he added, alluding to Washington, where Netanyahu was last hosted by U.S. President Barack Obama in November. A trip expected in March was canceled given the difficult MOU talks.

That’s different from the dignified optics Netanyahu can be assured of in Russia. This time, he will leave with state gifts likely to buoy Israeli public opinion: an Israeli army tank captured by Syrian forces during battles in Lebanon in 1982 and recovered by Russia, and Moscow’s agreement to pay pensions to tens of thousands of Russian immigrants to Israel.

(Additional reporting by Dmitry Solovyov in Moscow; Writing by Dan Williams; Editing by Mark Heinrich)

U.S. motorists to hit roads on Memorial Day holiday in near-record numbers

Traffic flows along Coast Highway 101 through San Diego's North County beach town of Encinitas, California

NEW YORK (Reuters) – The number of Americans traveling by car for the Memorial Day holiday will hit an 11-year high this year, fueled by a growing economy and low gasoline prices, the nation’s largest motorists’ advocacy group said on Thursday.

AAA projected 33.9 million people will hit the road and drive 50 miles (80 km) or more from home during the upcoming Memorial Day holiday period, the most since 37.3 million in 2005.

The expectation for strong driving numbers is welcome news for U.S. refiners, who are banking on the summer driving season to resurrect profits that plummeted during the recent fall and winter seasons.

The 2.1 percent increase in driving volumes for the May 26 to May 30 period from the holiday weekend a year before will bring the auto share of holiday travel to 89 percent, the highest since AAA began tracking in 2000, underscoring how low pump prices have led consumers to consider driving as a low-cost alternative to flying.

“The great American road trip is officially back thanks to low gas prices, and millions of people from coast to coast are ready to kick off summer with a Memorial Day getaway,” Marshall Doney, AAA president and chief executive, said in a statement.

The national average price of gas is $2.26 a gallon, roughly 17 percent less than the average price of $2.75 on Memorial Day last year.

Overall holiday travel, including airplanes, is expected to reach more than 38 million travelers, also the second-highest after 2005 figures, AAA said.

The most recent data from the U.S. Department of Transportation shows the U.S. road renaissance, spurred in part by the crude oil rout and lower unemployment, remains strong.

U.S. motorists logged 232.2 billion miles in February, the most for any February, up 5.6 percent from a year earlier, according to the U.S. Department of Transportation. That was the largest year-over-year bump since at least 1991, it said.

Driving activity in the United States is closely watched since the country accounts for about 10 percent of global gasoline demand.

(Reporting By Jarrett Renshaw; Editing by Meredith Mazzilli)

Wall Street falls as consumer stocks take a hit

Traders work on the floor of the NYSE

By Noel Randewich

(Reuters) – U.S. stocks fell on Friday as a decline in oil prices added to pressure from consumer companies after gloomy earnings reports from Nordstrom and J.C. Penney overshadowed upbeat April retail sales data.

The decline in the department stores’ shares marked the end of a week that highlighted the expanding clout of Amazon.com and the plight of brick-and mortar retailers struggling to keep up.

Crude prices slipped on Friday as a strong dollar weighed and investors cashed in on gains from a three-day rally.

That pushed the S&P energy index  down 1.07 percent.

U.S. retail sales jumped 1.3 percent last month, the largest gain since March 2015 and a bigger rise than economists expected, the U.S.

But consumer stocks, which have already been under pressure this week after a string of feeble earnings reports, fell again after Nordstrom and J.C. Penney reported lower-than-expected sales.

Nordstrom  slumped 13.60 percent and J.C. Penney Co Inc lost 3.78 percent. Dillard’s Inc, which gave a quarterly report that also disappointed Wall Street, fell 1.62 percent.

Amazon lost 0.96 percent but was still up 5.5 percent for the week following steady gains since last Friday.

Macy’s  rose 0.38 percent after its poor quarterly report on Wednesday triggered a selloff in U.S. retailers.

First-quarter earnings reports are nearly all in and, on average, have not been quite as bad as expected. The S&P 500 is trading at about 16.5 times expected earnings, according to Thomson Reuters.

“It’s hard to make a case that you’re going to have stellar equity market performance. In the context of low interest rates, equity valuations look about right,” said Mark Heppenstall, chief investment officer at Penn Asset Management in Horsham, Pennsylvania.

At 2:35 pm, the Dow Jones industrial average was down 0.99 percent at 17,545.59 points and the S&P 500  had lost 0.85 percent to 2,046.66. The Nasdaq Composite dropped 0.45 percent to 4,715.91.

All of the 10 major S&P sectors fell, led by a 1.38 percent decline in the consumer staples index.

Nvidia surged 14.7 percent after the graphics chipmaker forecast better-than-expected revenue for the current quarter.

Declining issues outnumbered advancing ones on the NYSE by 2,022 to 930. On the Nasdaq, 1,660 issues fell and 1,081 advanced.

The S&P 500 index showed 15 new 52-week highs and 8 new lows, while the Nasdaq recorded 27 new highs and 65 new lows.

(Additoinal reporting by Tanya Agrawal and Yashaswini Swamynathan; Editing by Chizu Nomiyama)

U.S. Retail sales strongly boost economic outlook

A man in short sleeves carries shopping bags near Herald Square during unseasonably warm weather in Manhattan

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales in April recorded their biggest increase in a year as Americans stepped up purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter.

The jump in sales reported by the Commerce Department on Friday is a boost for the sector that has been hit by sluggish demand. It comes days after major retailers, including Macy’s and Nordstrom, reported sales tumbled in the first quarter and lowered their full-year profit forecasts.

“The retail sales report shows that recent claims of the demise of the U.S. consumer have been greatly exaggerated,” said Steve Murphy, a U.S. economist at Capital Economics in Toronto.

Retail sales surged 1.3 percent last month, the largest gain since March 2015, after dropping 0.3 percent in March. Excluding automobiles, gasoline, building materials and food services, retail sales shot up 0.9 percent last month after an upwardly revised 0.2 percent gain in March.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

They were previously reported to have gained 0.1 percent in March. Economists had forecast retail sales rising 0.8 percent and core retail sales gaining 0.3 percent last month.

Signs of an acceleration in consumer spending keep an interest rate hike from the Federal Reserve next month on the table.

“Today’s data materially strengthen the hand of those within the Fed for a rate increase in June but we remain doubtful as to whether this view will prevail, barring an especially robust employment report in early June,” said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

Consumer spending prospects got a boost from a separate report showing sentiment among households jumped to an 11-month high in early May.

The University of Michigan said its consumer sentiment index surged 6.8 points to 95.8 early this month, the highest reading since June. Sentiment increased among all income and age groups, with big gains among lower-income and younger households.

Last month’s strong core retail sales increase could prompt economists to raise their second-quarter GDP, currently hovering around a 2 percent annualized rate. Economic growth braked to a 0.5 percent pace in the first three months of the year after expanding at a 1.4 percent pace in the fourth quarter.

But another report from the Commerce Department on Friday showing a 0.4 percent increase in business inventories in March suggest growth was much higher than initially estimated.

Data on retail sales, construction spending and factory orders have already implied that the advance GDP growth estimate could be raised to a 0.9 percent rate when the government publishes its revision later this month.

The dollar rose against the euro and the yen after the data, while prices for U.S. government debt fell. U.S. stocks were trading lower.

Retail sales have been sluggish in part because the strengthening labor market has not generated strong wage growth.

Economists also say that some of the savings from cheaper gasoline over the past year-and-a-half have been absorbed by rising rents and medical care costs.

Macy’s, the largest department chain, said this week same-store sales fell 5.6 percent in the first quarter, and expected full-year sales to decline 3-4 percent.

Nordstrom reported that sales at stores open at least a year fell 1.7 percent in the first quarter. It cut its profit forecast for the year to $2.50-$2.70 per share from $3.10-$3.35.

The Commerce Department report showed retail sales in April rose across all categories, with the exception of building materials and garden equipment. Auto sales advanced 3.2 percent, the largest increase since March 2015, after slumping 3.2 percent in March.

Receipts at service stations increased 2.2 percent, reflecting recent increases in gasoline prices. Sales at clothing stores surged 1.0 percent, the largest increase since May 2015.

Online retail sales jumped 2.1 percent, the biggest gain since June 2014. Receipts at sporting goods and hobby stores rose 0.2 percent last month.

Sales at electronics and appliance outlets increased 0.5 percent. Building materials and garden equipment store receipts, however, fell 1.0 percent last month, the largest decline since August. Sales at restaurants and bars rose 0.3 percent.

In a separate report, the Labor Department said its producer price index climbed 0.2 percent last month after slipping 0.1 percent in March. In the 12 months through April, the PPI was unchanged after dipping 0.1 percent in March.

Inflation continues to be restrained by the lingering effects of the dollar’s surge and oil price plunge. The greenback gained 20 percent against the currencies of the United States’ trading partners between June 2014 and December 2015.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

U.S. to schools: Give transgender students bathroom rights

A gender-neutral bathroom is seen at the University of California, Irvine in Irvine, California September 30, 2014.

By Megan Cassella

WASHINGTON (Reuters) – The Obama administration told U.S. public school districts across the country on Friday to allow transgender students to use the bathrooms that match their gender identity, rather than their gender at birth.

The new guidance comes as the Justice Department and North Carolina battle in federal court over a state law passed in March that prohibits people from using public restrooms not corresponding to their biological sex.

Officials from the Education and Justice departments told schools that while the new guidance does not carry legal weight, they are obligated not to discriminate against students, including based on their gender identity.

“Our guidance sends a clear message to transgender students across the country: here in America, you are safe, you are protected and you belong – just as you are,” Vanita Gupta, head of the Justice Department’s Civil Rights Division, said in a statement accompanying the letter sent to school districts nationwide.

The guidance contains an implicit threat that those not abiding by the Obama administration’s interpretation of the law could face lawsuits or a loss of federal aid.

As a condition of receiving federal funds, the letter said, a school agrees that it will not treat any person in its educational programs or activities differently on the basis of sex.

It added that the administration’s interpretation of existing regulations means that a school cannot treat a transgender student differently from other students of the same gender identity.

The issue of access to bathrooms by transgender people flared into a national controversy after North Carolina passed a law in March that made it the first state in the country to ban people from using multiple occupancy restrooms or changing rooms in public buildings and schools that do not match the sex on their birth certificate.

The U.S. Justice Department this week asked a federal district court in North Carolina to declare that the state is violating the 1964 Civil Rights Act and order it to stop enforcing the ban.

North Carolina’s Republican governor, Pat McCrory, and the state’s secretary of public safety sued the agency in a different federal court in North Carolina, accusing it of “baseless and blatant overreach.”

(Reporting by Megan Cassella and Susan Heavey; Editing by Bernadette Baum and Frances Kerry)

Russia will act to neutralize U.S. Missile shield threat

A view shows the command center for the newly opened ballistic missile defense site at Deveselu air base

By Vladimir Soldatkin

SOCHI, Russia (Reuters) – A ballistic missile defense shield which the United States has activated in Europe is a step to a new arms race, Russian President Vladimir Putin said on Friday, vowing to adjust budget spending to neutralize “emerging threats” to Russia.

The United States switched on the $800 million missile shield at a Soviet-era base in Romania on Thursday saying it was a defense against missiles from Iran and so-called rogue states.

But, speaking to top defense and military industry officials, Putin said the system was aimed at blunting Russia’s nuclear arsenal.

“This is not a defense system. This is part of U.S. nuclear strategic potential brought onto a periphery. In this case, Eastern Europe is such periphery,” Putin said.

“Until now, those taking such decisions have lived in calm, fairly well-off and in safety. Now, as these elements of ballistic missile defense are deployed, we are forced to think how to neutralize emerging threats to the Russian Federation,” he said.

Coupled with deployment in the Mediterranean of U.S. ships carrying Aegis missiles and other missile shield elements in Poland, the site in Romania was “yet another step to rock international security and start a new arms race”, he said.

Russia would not be drawn into this race. But it would continue re-arming its army and navy and spend the approved funds in a way that would “uphold the current strategic balance of forces”, he said.

U.S. Deputy Defense Secretary Robert Work said on Thursday that the shield would not be used against any future Russian missile threat.

Frank Rose, deputy U.S. assistant secretary of state for arms control, warned at the time that Iran’s ballistic missiles could hit parts of Europe, including Romania.

Putin said the prospect of a nuclear threat from Iran should no longer be taken seriously and was being used by Washington as an excuse to develop its missile shield in Europe.

The full defensive umbrella, when complete in 2018 after further development in Poland, will stretch from Greenland to the Azores.

It relies on radars to detect a ballistic missile launch into space. Sensors then measure the rocket’s trajectory and destroy it in space before it re-enters the earth’s atmosphere. The interceptors can be fired from ships or ground sites.

(Reporting by Vladimir Soldatkin; Writing by Dmitry Solovyov; Editing by Lidia Kelly and Richard Balmforth)

Urgent measures needed on living conditions in Greek migrant camps

People queue for free food at a makeshift camp for migrants and refugees at the Greek-Macedonian border near the village of Idomeni

STRASBOURG (Reuters) – Urgent measures are need to address overcrowding and poor living conditions in refugee and migrant camps in Greece, Europe’s top rights watchdog warned on Wednesday.

The Council of Europe, which brings together 47 countries, said some facilities were “sub-standard” and able to provide no more than the most basic needs such as food, hygiene products and blankets.

The report echoes warnings by other rights groups and aid agencies who say Greece has been unable to care properly for the more than 800,000 people reaching its shores in the last year, fleeing wars or poverty in the Middle East and Africa.

The Council described dire living conditions in several sites visited on a March 7-11 trip, just before the European Union and Turkey reached a deal that reduced arrivals but increased the number of people held in detention awaiting asylum decisions or deportation.

It said in its report that people who reached Greece were locked away in violation of international human rights standards and lacked legal access.

At Greece’s Nea Kavala temporary transit camp, people were left burning trash to keep warm and sleeping in mud-soaked tents, according to the report.

The Council called for the closure of a makeshift camp in Idomeni, where some 10,000 people have been stranded en route to northern Europe due to the closure of Macedonia’s border.

Germany has taken in most of the 1.3 million refugees and migrants who reached Europe across the Mediterranean in the past year, triggering bitter disputes among the 28 EU member states on how to handle the influx.

Europe’s deal with Turkey last month gave its leaders some breathing space but has come under pressure since Prime Minister Ahmet Davutoglu, one of the sponsors of the accord, stepped down.

The morality and legality of the deal has been challenged by human rights groups, however, and a provision to grant Turkish citizens visa-free travel to Europe in exchange for Ankara’s help remains politically contentious.

In a separate report, a trio of European Parliamentarians on Tuesday described the poor conditions faced by people who have been returned to Turkey under the deal.

“We have seen how the migration policies imposed by the European Union have terrible consequences on the lives of thousands of people,” said Cornelia Ernst, a German member of the European Parliament and a co-author of that report.

“Turkey has been hired as a deportation agency, putting into practice the migration policies designed in Brussels.”

The left-wing deputies said on their May 2-4 visit to Turkey they had met people who complained of not being able to claim asylum in Europe, which would run counter to international humanitarian law.

They also described poor detention conditions, confiscation of private property and widespread difficulties in getting access to legal help or information, among other issues.

(Reporting by Gabriela Baczynska; Editing by Alissa de Carbonnel and Hugh Lawson)

Georgian army begins U.S. led military excersize, angering Russia

Georgian servicemen attend an opening ceremony of U.S. led joint military exercise "Noble Partner 2016" in Vaziani

By Margarita Antidze

TBILISI (Reuters) – The Georgian army began two weeks of military exercises with the United States and Britain on Wednesday, drawing an angry response from former Soviet master Russia which called the war games “a provocative step”.

About 650 soldiers from the United States, 150 from Britain and 500 from Georgia were taking part in the maneuvers, with Washington dispatching an entire mechanized company including eight Bradley infantry fighting vehicles and, for the first time, eight M1A2 Abrams main battle tanks.

Georgia’s Defence Minister Tina Khidasheli said the drills were an important event for the South Caucasus republic.

“This is one of the biggest exercises that our country has ever hosted, this is the biggest number of troops on the ground, and the largest concentration of military equipment,” Khidasheli told Reuters.

But the exercises went down badly in Moscow where the Russian Foreign Ministry last week warned they could destabilize the region, a charge denied by Georgian officials.

“These exercises are not directed against anyone. There is no trace of provocation,” Georgia’s Prime Minister Georgy Kvirikashvili said in a statement.

Russia defeated Georgia in a short war in 2008 over the breakaway Georgian region of South Ossetia, and Moscow continues to garrison troops there and to support another breakaway region, Abkhazia.

The exercises were run out of the Vaziani military base near Georgia’s capital Tbilisi.

Russian forces used to be based there until they withdrew at the start of the last decade under the terms of a European arms reduction agreement.

“The importance of these exercises is to improve interoperability between Georgia, the United States and the United Kingdom. … It enables us to prepare Georgia’s contribution to a NATO response force,” Colonel Jeffrey Dickerson, the U.S. director of the exercises, told Reuters.

The United States has spoken favorably of the idea that Georgia might one day join NATO, something Russia firmly opposes.

(Editing by Alexander Winning/Andrew Osborn)

Quietly, Vietnam hosts arms gathering attended by U.S. companies

Soldiers hold rifles while marching during a celebration to mark Reunification Day in Ho Chi Minh city, Vietnam

By My Pham and Idrees Ali

HANOI/WASHINGTON (Reuters) – Vietnam hosts a defense symposium this week attended by top American arms manufacturers, ahead of a visit by U.S. President Barack Obama and as Washington weighs whether to lift an arms embargo on its former enemy.

Secrecy has surrounded the event staged by the communist country and attended by firms including Boeing <BA.N> and Lockheed Martin <LMT.N>. It coincides with the biggest arms buildup in the country since the Vietnam War.

There has been no mention in state-controlled media and defense reporters are not covering the forum. Efforts by Reuters to gain permission to attend have been unsuccessful and Vietnam’s defense ministry could not be reached for comment.

Vietnam has accelerated efforts to build a military deterrent and is the world’s eighth largest weapons importer, as neighbor China intensifies its push to fortify South China Sea islands it has either occupied or built from scratch.

According to the Stockholm International Peace Research Institute think-tank, which tracks defense trade over five-year periods, Vietnam’s total arms imports during 2011-2015 represented a 699 percent jump from 2006-2010.

The Hanoi symposium comes amid debate within the U.S. administration over whether to respond to Vietnam’s longstanding request to remove an arms embargo that is one of the last major vestiges of the Vietnam War era.

Washington eased the embargo in late 2014, but has said any decision to lift it completely would hinge on the extent to which Vietnam has demonstrated progress in improving its human rights record. Its top envoy in that field, Tom Malinowski, was in Hanoi earlier this week.

Vietnam has been in talks with Western and U.S. arms manufacturers for several years now to boost its fleets of fighter jets, helicopters and maritime patrol aircraft, although Russia, its traditional supplier, maintains a dominant position.

Industry sources say Hanoi is keen on U.S. weapons yet wary of the threat of a future embargo even if the current one ends. The countries do have a common concern in China, however, whose assertiveness in the South China Sea has alarmed Washington.

Obama is due to start his Vietnam visit on May 22, the first by a U.S. president in a decade, underlining the rapidly warming relationship between the countries at a time of testy ties and growing mistrust between Hanoi and Beijing, which have competing claims to the Paracel and Spratly islands.

MODERNIZATION NEEDS

A spokesman for Lockheed Martin confirmed the company was attending the Hanoi event.

Boeing is also attending, although the firm made it clear it was not in contravention of the embargo.

“I would like to point out that any defense-related sales to Vietnam will follow development of U.S. government policy on Vietnam,” a spokesman said.

“We believe Boeing has capabilities in mobility and intelligence surveillance and reconnaissance platforms that may meet Vietnam’s modernization needs.”

Those needs have included the purchase of six modern Kilo-class submarines from Russia equipped with Klub cruise missiles, Russian-built S-300 surface-to-air missile batteries, and from Israel, Galil assault rifles and AD-STAR 2888 radars.

Its navy is making Tarantul-class corvettes, known as Molniyas, modeled on Russian designs and equipped with 16 missiles with a range of 130 km (80 miles).

Though the communist parties that run China and Vietnam officially have brotherly ties, experts say Beijing’s brinkmanship has forced Vietnam to recalibrate its defense strategy.

A report in the defense ministry’s People’s Army Newspaper Online in March quoted the vice defense minister, Lieutenant General Nguyen Chi Vinh, as saying Vietnam’s relationship with the United States lacked defense industry cooperation, and Hanoi wanted Washington “to provide modern, suitable and adaptable technology”.

Its outreach so far has been weighted towards Russia, India and Israel in procurements, but analysts say it is unlikely to seek formal military alliances and would stick to its foreign policy of not relying on a single power.

It has, however, mulled joint exercises with another South China Sea claimant at odds with China, the Philippines, and has received recent visits by Singaporean and Japanese warships at its new international port at Cam Ranh Bay, a strategic deepwater base that is home to its submarines.

Tim Huxley, a regional security expert at the International Institute for Strategic Studies in Singapore, said Vietnam’s interest in getting the arms embargo lifted was not only about access to U.S. technology, but boosting its bargaining power.

“It reflects concern about what’s happening in the South China Sea and its need to restructure and re-arm, with a greater emphasis on greater naval and air capability,” he said.

“It wants to widen options available and have more choices in the international market place in terms of range of technology and its negotiating position.”

(Additional reporting by Mai Nguyen in HANOI; Writing and additional reporting by Martin Petty in MANILA; Editing by Mike Collett-White)

U.S. to switch on European missile shield despite Russian alarm

U.S. Defense Secretary Carter testifies on operations against the Islamic State on Capitol Hill in Washington

By Robin Emmott

BUCHAREST (Reuters) – The United States’ European missile defense shield goes live on Thursday almost a decade after Washington proposed protecting NATO from Iranian rockets and despite Russian warnings that the West is threatening the peace in central Europe.

Amid high Russia-West tension, U.S. and NATO officials will declare operational the shield at a remote air base in Deveselu, Romania, after years of planning, billions of dollars in investment and failed attempts to assuage Russian concerns that the shield could be used against Moscow.

“We now have the capability to protect NATO in Europe,” said Robert Bell, a NATO-based envoy of U.S. Defense Secretary Ash Carter. “The Iranians are increasing their capabilities and we have to be ahead of that. The system is not aimed against Russia,” he told reporters, adding that the system will soon be handed over to NATO command.

The United States will also start construction on a second site in Poland on Friday that is due to be ready in 2018, giving NATO a permanent, round-the-clock shield in addition to radars and ships already in the Mediterranean.

Russia is incensed at such of show of force by its Cold War rival in formerly communist-ruled eastern Europe where it once held sway. Moscow says the U.S.-led alliance is trying to encircle it close to the strategically important Black Sea, home to a Russian naval fleet and where NATO is also considering increasing patrols.

The readying of the shield also comes as NATO prepares a new deterrent in Poland and the Baltics, following Russia’s 2014 annexation of Crimea. In response, Russia is reinforcing its western and southern flanks with three new divisions.

Despite U.S. assurances, the Kremlin says the missile shield’s real aim is to neutralize Moscow’s nuclear arsenal long enough for the United States to make a first strike on Russia in the event of war.

The shield relies on radars to detect a ballistic missile launch into space. Tracking sensors then measure the rocket’s trajectory and intercept and destroy it in space, before it re-enters the earth’s atmosphere. The interceptors can be fired from ships or ground sites.

The Russian ambassador to Denmark warned a year ago that Danish warships would become targets for Russian nuclear missiles if Denmark joined the shield project by installing radars on its vessels. Denmark is upgrading at least one frigate to house a ballistic missile sensor.

Turkey is already hosting a U.S. radar and the Netherlands has equipped ships with radars. The United States also has four ships in Spain as part of the defenses, while all NATO nations are contributing funding.

“Ballistic missile defense sites could pose threats to the stability and strategic assets of the Russian Federation,” Russia’s ambassador to NATO, Alexander Grushko, told Reuters last month.

‘ROGUE STATES’

U.S. officials dismiss the Russian view as “strategic paranoia” and blame Moscow for breaking off talks with NATO in 2013 that were aimed at explaining how the shield would operate.

The United States says Russia was seeking a treaty limiting the capability and range of ballistic missile interceptors. “No government could agree to that,” U.S. adviser Bell said.

Russian officials are concerned about technology that the United States says it does not have, including a missile defense interceptor capable of speeds of 10 km (6.2 miles) per second that could destroy Russian missiles.

First agreed by the U.S. government 2007 and then canceled and relaunched by the newly-elected U.S. President Barack Obama in 2009, the missile defense shield’s stated aim is to protect North America and Europe from so-called rogue states such as Iran and North Korea. That is part of a U.S. strategy that includes missile interceptors in California and Alaska.

Ballistic missiles, which differ from cruise missiles because they leave the earth’s atmosphere, can travel distances of up 3,000 km (1,875 miles).

Despite a historic deal between world powers and Tehran to limit Iran’s nuclear program, the West believes Iran’s Revolutionary Guards continue to develop ballistic missile technology, carrying out two tests late last year.

“They are looking for greater distance and accuracy,” said Douglas Barrie, an aerospace defense specialist at the International Institute for Strategic Studies (IISS). “They can still miss by hundreds of meters, but that doesn’t rule out firing against a city or a very large airfield.”

(Reporting by Robin Emmott; Editing by Richard Balmforth)