MercoPress. South Atlantic News Agency
“Huracán” military exercises in Punta Arenas
Ten thousand servicemen including two submarines are scheduled to participate the coming week in the Chilean joint services exercise “Huracán” that will extend until November 18th.
General Waldo Zauritz Commander in Chief of the Austral Military Region said that Navy and Air Force units will be joining in the air-sea-land theatre, including reinforcements from other regions.
Among the outer area units are diesel powered submarines "Simpson" and "Thompson" with their 45 crew members each and mother ship "Almirante Merino" that this week arrived in Punta Arenas. The 66 metres long units can submerge up to 200 metres, however it's not depth the main challenge in the area, but channels and ice.
"We always update our charts and try to keep to surveyed areas", said Rear Admiral Alejandro Herrmann who commands the Submarine Task Force, "but since we'll be submerging in an area of channels we have to be very precise and particularly careful".
R/A Herrmann revealed that drifting ice can also be a problem.
"We can sonar detect ice when it's more than one block, but not necessarily when it's just one, which means we're in danger".
Chilean Defence Minister Michelle Bachelet is expected next week for a two days inspection and follow up of the exercise.
In related news the Spanish shipyard Izar in Cartagena reported that the stern of one of two new submarines ordered by Chile had been shipped to Cherbourg for its final assembly. The French are building the bow.
Chile is investing 300 million US dollars in the construction of two new "Scorpone" class submarines to be jointly built by Spain and France. The first unit should be ready for sea trials in the second half of 2003.
The second unit will be assembled in Cartagena, Spain, and this time the French will be shipping the bow from Cherbourg. The vessel is expected in Chile in early 2005. Fed admits fragility and lowers rates
As markets were expecting the Federal Reserve this Wednesday cut interest rates to a 41 year low of 1,25%, down from the previous 1,75%. The reduction however was greater than forecasted and confirms growing concerns about the fragility of the US economy and its long awaited recovery.
In its official statement after the Open Market meeting the Federal Reserve referred to a possible conflict with Iraq saying that "greater uncertainty, in part attributable to the heightened geopolitical risk, is currently inhibiting expenditure, production and employment". But the Fed also warned that this cut, the first in eleven months, may be the last for some time since it believed "the risks were now balanced" between the risk of inflation and the risk of further recession while the economy finds its way out of the current soft spot.
The Fed's decision was almost simultaneous with a report from the National Bureau of Economic Research saying that it's yet uncertain if the US economy has really recovered from recession.
"The behaviour of the economy in the first eight months of the year indicates the decline in activity that began last year may have come to an end, however recent data points that additional time is needed to be confident about movements of the economy", underlines the NBER report.
Additional data is showing that in the last few weeks US consumer spending has slowed down and unemployment has risen, which could make consumers more reluctant.
In the third quarter the US economy grew at a 3,1% rate, a strong rebound from the 1,3% of the second quarter but rather weak compared to the 5,8% at the beginning of the year. Forecasts for the last quarter risk a paltry 1%.
Markets will now be looking to the European Central Bank that this week operated with a marginal interest rate of 3,25%. However it's not sure the European Central Bank will ease its tight monetary policy fearing growing budget deficits in the EU main partners. ENAP attracts 290 million US dollars
The Chilean government expressed satisfaction after successfully floating 290 million US dollars of the country's Oil Company ENAP, in the US market.
The acquisition of the bonds by thirty institutional investors from the United States and Europe "ratifies trust in ENAP and the interest of international investors in Chilean companies", remarked Minister of Mining Alfonso Dulanto.
This week's operation completed a first emission of 70 million US dollars last October and according to a release from the company completes ENAP's financial strategy for 2002, which is oriented to finance liabilities and an investment program involving 363 million US dollars.
The ten year ENAP bonds were floated with an interest rate of 6,85%, which means a risk spread of 275 points over US Treasury Bonds, and 67 points above Chilean sovereign bonds.
The bonds were rated A- by Standard & Poor and BAA 1 by Moody's, the risk rating agencies. Demand actually reached for 500 million US dollars.
ENAP's profits in the first quarter of 2002 reached 55,5 million US dollars compared to the same period a year ago.
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