Pope Benedict called on Tuesday for a “world political authority” to manage the global economy and for more government regulation of national economies to pull the world out of the current crisis and avoid a repeat.

The pope made his call for a re-think of the way the world economy was run in a new encyclical which touched on a number of social issues but whose main connecting thread was how the current crisis has affected both rich and poor nations.

Parts of the encyclical, titled “Charity in Truth,” seemed bound to upset free marketers because of its underlying rejection of unbridled capitalism and unregulated market forces, which he said had led to “thoroughly destructive” abuse of the system and “grave deviations and failures.”

An encyclical is the highest form of papal writing and gives the clearest indication to the world’s 1.1 billion Catholics — and to non-Catholics — of what the pope and the Vatican think about specific social and moral issues.

The pope said every economic decision had a moral consequence and called for “forms of redistribution” of wealth overseen by governments to help those most affected by crises.

Benedict said “there is an urgent need of a true world political authority” whose task would be “to manage the global economy; to revive economies hit by the crisis; to avoid any deterioration of the present crisis and the greater imbalances that would result.”

Such an authority would have to be “regulated by law” and “would need to be universally recognized and to be vested with the effective power to ensure security for all, regard for justice, and respect for rights.”

“Obviously it would have to have the authority to ensure compliance with its decisions from all parties, and also with the coordinated measures adopted in various international forums,” he said.

The United Nations, economic institutions and international finance all had to be reformed “even in the midst of a global recession,” he said in the encyclical, a booklet of 141 pages.

The pope’s call for a supranational body to tackle global economic woes disturbed some Catholic capitalists.

“There is a difference between coordination and mandate … a reckless loan in the United States can and did impoverish people in Latvia. So obviously coordination is important as long as it is not mandates,” said Frank Keating, CEO of the American Council of Life Insurers and former Governor of Oklahoma.

LOFTY MESSAGE

The encyclical was addressed to all Catholics and “all people of good will” and was released on the eve of the start of the G8 summit in Italy and three days before the pope is due to discuss the global downturn with U.S. President Barack Obama.

In several sections of the encyclical, Benedict made it clear he had great reservations about a totally free market.

“The conviction that the economy must be autonomous, that it must be shielded from ‘influences’ of a moral character, has led man to abuse the economic process in a thoroughly destructive way,” he said.

“In the long term, these convictions have led to economic, social and political systems that trample upon personal and social freedom and are therefore unable to deliver the justice that they promise,” he added.

Profit was useful only if it served as a means to a brighter future for all humanity.

“Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty,” he said.

He said the current economic crisis was “clear proof” of “pernicious effects of sin” in the economy.

“Financiers must rediscover the genuinely ethical foundation of their activity …,” he said.

German Chancellor Angela Merkel, who had rebuked the pope earlier this year at the height of the row over a Holocaust-denying bishop, welcomed the encyclical as important encouragement for world leaders ahead of a G8 meeting in Italy.

“Pope Benedict has encouraged the state leaders to create rules so that this sort of worldwide economic crisis isn’t repeated,” Merkel told reporters. “I also saw this as an order to work toward a social market economy in the world.”

The pope appeared to back government intervention “in correcting errors and malfunctions” in the economy, saying “one could foresee an increase in the new forms of political participation, nationally and internationally.”

(Additional reporting by Daniel Bases in New York and Sabine Siebold in Berlin; Editing by Matthew Jones) – Reuters

G8 leaders have failed to get emerging powers to agree climate change goals for 2050 and conclusions from their summit will not directly refer to a sensitive debate about the domination of the dollar.

Draft documents seen by Reuters on Wednesday ahead of the G8 summit and Thursday’s meeting of the 17-nation Major Economies Forum showed the currency debate pushed by China being played down and hopes for a climate breakthrough had been overstated.

Making no mention of Chinese and Russian interest in seeking a long-term alternative global reserve currency, a draft seen by Reuters talked only of global “imbalances” — which G8 diplomats had said might be the only oblique reference to currency.

“Stable and sustainable long-term growth will require a smooth unwinding of the existing imbalances in current accounts,” it read.

China complains that dollar domination has exacerbated the global crisis and worries that the bill for U.S. recovery poses an inflation risk for China’s dollar assets, an estimated 70 percent of its official currency reserves.

RISKS REMAIN

The Group of Eight meet in in L’Aquila, a mountain town that was wrecked by an earthquake in April — providing a fitting backdrop for discussions on the crumpled global economy that is struggling to overcome the worst recession in living memory.

It kicks off on Wednesday with the U.S., German, Japanese, French, British, Italian, Canadian and Russia leaders discussing the economic crisis. The draft statement warned “significant risks remain to economic and financial stability”.

The G8 document cautioned that “exit strategies” from growth packages should only be unwound “once recovery is assured”.

G8 leaders badly underestimated the economic problems facing them when they met in Japan last year and Wednesday’s talks will touch on what nations must do to prevent another such meltdown.

However, officials said few major initiatives were expected to emerge, with the broader G20 forum, grouping rich industrial nations and major emerging economies, tasked with formulating a regulatory response to the crisis rather than the G8 nations.

The G20 met in London in April and convenes again in September in the United States.

“In reality (L’Aquila) is just an intermediary step,” said a senior French official.

CHINESE RESISTANCE

U.S. President Barack Obama was expected to make his mark on his first G8 summit by chairing talks of the MEF, whose members account for about 80 percent of global greenhouse gas emissions.

But talks among MEF ministers in Rome, called at the last minute on Tuesday to prepare for the summit, failed to close the gap between U.S. and Europe on the one hand and emerging powers like China and India on the other hand.

Berlusconi spoke of meeting Chinese “resistance” and the G8 appeared to have failed to persuade China and India to agree to a goal of halving world greenhouse gas emissions by 2050.

A draft prepared for the MEF meeting dropped any reference to this and aimed instead for agreement on the need to limit the average increase in global temperature to 2 degrees Celsius (3.6 degrees Fahrenheit) since pre-industrial times.

Developing nations, present in large numbers at the expanded G8 summit were more than 30 world leaders were invited including nine African nations, argue that they need to be able to consume more energy in order to end poverty among their populations.

Chinese President Hu Jintao pulled out at the last minute because of unrest in northwestern China in which 156 people have been killed. His departure may complicate climate change talks.

A packed first day is due to wrap up with talks on an array of international issues, including Iran’s post-election violence and nuclear program. However, these are unlikely to lead to any immediate action, such as a tightening of sanctions.

One area where officials said a breakthrough might be possible was trade. A draft communique suggested the G8 and “G5″ developing nations would agree to conclude the stalled Doha round of trade talks in 2010.

Launched in 2001 to help poor nations prosper through trade, the talks have stumbled on proposed tariff and subsidy cuts.

Leaders will also discuss a U.S. proposal that rich nations commit $15 billion over several years for agricultural development in poor countries to ensure food supplies.

(Additional reporting by Reuters bureaux across the world; writing by Stephen Brown; editing by Janet McBride) – Reuters

Italy, France and Britain called on Monday for major developing economies like China and India to sign up for a goal of halving the world’s greenhouse gas emissions by 2050 at this week’s expanded G8 summit in Italy.

Italian Foreign Minister Franco Frattini said the “extremely ambitious” goal would be the focus of the second day of the summit on Thursday, when U.S. President Barack Obama will chair a meeting of the 17-member Major Economies Forum (MEF).

The MEF, which groups rich and poor countries accounting for about 80 percent of the world’s carbon emissions, hopes to make progress toward a new U.N. climate change pact, due to be signed by 190 nations gathering in Copenhagen in December.

“The slogan is minus 50 in 2050: if we agree this with China, India, (South) Korea and the African and Latin American countries, it will be an extremely ambitious goal,” Frattini said in an interview published in the Il Messaggero newspaper.

The call was echoed by French President Nicolas Sarkozy and British Prime Minister Gordon Brown, meeting for a bilateral summit in the lakeside town of Evian in the French Alps.

In a tough joint statement, the two countries said the G8 meeting planned at L’Aquila in central Italy would “test our determination to grasp the scale of the changes needed to address the challenge of global warming.”

France and Britain called on developing countries to sign up to the target of cutting global emissions by 50 percent by 2050, from 1990 levels. The base year for carbon cuts is a moot point, with some rich nations like Japan and the United States seeking a more recent base year which would make cuts less onerous.

France and Britain, however, called on industrial countries to go even further and target an 80 percent reduction in their greenhouse gas emissions by 2050.

“The time is short, the need for us to work together on that is very clear,” Brown said during a joint news conference.

LAST MINUTE TALKS

The MEF has convened a last-minute ministerial talks in Rome on Tuesday to try to narrow the gap on long-term environment goals ahead of Thursday’s heads of state meeting, amid differences over the scale of cuts and the base year.

Last year, the Group of Eight industrialized nations — the United States, Japan, Germany, Britain, France, Canada, Italy and Russia — agreed at a Japan summit to a vision of halving global greenhouse gases by 2050 to help avert ever more droughts, floods, heatwaves and rising sea levels.

But developing countries including China, India and Brazil did not sign up for that, saying rich nations should first agree to ambitious short-term targets. They want developed states to cut emissions by at least 40 percent below 1990 levels by 2020.

Washington, which has promised a New Green Deal since Obama took office this year, has resisted such steep cuts but France and Britain on Monday left the door open.

“Our two countries also ask for the adoption of an ambitious, credible intermediate target for 2020, in line with what science is telling us, i.e. a 25-40 percent reduction compared to 1990,” it said.

Frattini also said the summit would produce some commitment on limiting the increase in global average temperatures above pre-industrial levels to no more than two degrees Celsius (3.6 Fahrenheit), in line with U.N. experts’ recommendations.

European Commission President Jose Manuel Barroso said on Monday he would press the United States and other countries to accept the two degree target — favored by European nations — as the threshold beyond which climate change reaches danger levels.

Washington has resisted endorsing such a goal, but a European official said last week that Obama, whose climate bill has made progress in Congress, might now be on board for it.

(Additional reporting by Estelle Shirbon in Evian, France and Darren Ennis in Brussels; Writing by Stephen Brown; Editing by Jon Boyle) – Reuters

Boiko Borisov

Exit polls in Bulgaria indicate the centre-right party led by ex-body guard and Mayor of Sofia Boiko Borisov is heading for a significant victory.

His Citizens for European Development of Bulgaria (GERB) looks set to take 40% of the vote – more than half that of the ruling Socialist Party.

But the BBC’s Europe correspondent says while it will be a remarkable win, it is not enough for GERB to govern alone.

Mr Borisov promised to end corruption and tackle the economic downturn.

It has been Bulgaria’s first election since joining the European Union two years ago.

Last year, Bulgaria lost access to some of its EU funds for failing to deal with graft and organised crime.

The BBC’s Nick Thorpe says Bulgarians have a habit of voting governments out of office, doing so at each general election for the past 19 years.

According to exit polls, Prime Minister Sergei Stanishev’s Socialist Party is trailing far behind, with between 17% and 19% of the vote.

The ethnic Turkish Movement for Rights and Freedoms are placed third with around 12% and the ultra-nationalist Ataka party fourth, with 9%.

The exit polls give around 8% to Mr Borisov’s preferred coalition partner, the Blue Coalition.

A stable governing coalition needs at least 121 seats in the 240 seat parliament.

The first official results are expected early on Monday. – BBC

The death toll climbed to at least 12 in a gas explosion on a freight train in western Italy, officials said Tuesday.

A child was among those killed, said Antonio Garufi, a local government official. The number of injured had risen to 36, with 16 in critical condition.

Most of the injuries were burns. Two children were among the severely burned, said Guido Bertolaso, head of the Italian civil protection agency.

The train was carrying gas tanks when it derailed and exploded while passing through a station in the coastal town of Viareggio. The explosion happened about 11:45 p.m. (2145 GMT) Monday. The cargo train had nine tank-wagons full of gas, four of which turned over.

The train was traveling from La Spezia to Pisa, Garufi said. The station and a few nearby buildings caught fire and were evacuated, he added.

“The search and rescue operation are not over and will not be over before this evening,” Bertolaso said.

Not all the victims have been identified, because burns have complicated the process, he added.

About 300 people have been evacuated from the area around the explosion, which is not considered safe yet and remains off limits. Fire crews were working to secure the area and clearing up the rail tracks, Bertolaso said.

He did not estimate how long the operation would take. “If someone thinks that the danger phase is over, it is not so,” he said.

Locals described the horrific scene. “I heard the explosion and I went out into the street to find myself faced with flames and a motionless charred body lying on the ground,” a witness told the Italian news agency ANSA.

“It was a terrifying scene which I will never forget,” added the witness, who works at a nearby pharmaceutical company. “We couldn’t do anything for the body except cover it up.”

Another witness described how a young girl caught in the blast as she rode past on her scooter threw herself on the ground to extinguish her burning clothes, ANSA reported.

One of the train drivers told of their escape. “The drivers cabin was filled with the gas, we managed to escape. We are alive, it is a miracle.”

Investigators were exploring the possibility that a broken axle on one of the wagons broke, derailing the container and its cargo of gas, said ANSA.

Neo-Nazis in Germany are applauding the repression of protests in Iran and publishing statements supporting the reelection of President Mahmoud Ahmadinejad and his hard-line government.

Two extremist parties, the NPD and DVU, have managed to contort their racist thinking to embrace the Iranian leader because Ahmadinejad openly advocates the elimination of Israel – and presumably has no plans to move to Germany.

The NPD website defended Ahmadinejad against what it called a “media attack on the Iranian people’s spirit,” referring to widespread doubts being expressed about the president’s reelection and described him as the “true leader of his people,” according to public broadcaster ARD.

The DVU website carried the message: “Congratulations on your reelection Mr President.”

Censorship in Iran, which makes listening to music a risky business, and outlaws dancing in public, is praised by the NPD, which says the music could be considered decadent and subversive.

The contradiction between this opinion and the complaints the NPD makes when neo-Nazi music containing illegally racist lyrics are banned by the German government does not seem to have occurred to the party’s members.

Germany’s fascists first took to Ahmadinejad when he said he wanted to destroy Israel, and then in 2006 organised a conference for Holocaust deniers.

Meanwhile, the Islam Conference taking place this week in Berlin condemned the violence and abuse of human rights in Iran, with a statement signed by all associations taking part aside from the Central Council of Muslims in Germany.

The council said it had a policy of not making statements about events in other countries, but called for both sides in Iran to come to an agreement and allow freedom of opinion.

“Chain-of-light” demonstrations are planned in cities across Europe on Thursday night to show solidarity with the Iranian people and commemorate those who have been killed recently during demonstrations.

Organisers in Berlin have taken the title, “A light to show hope. Thousands of lights show themselves” for the demonstration which will take place for an hour from 9:30 pm in front of the Gedächtniskirche in the centre of the city. Similar demonstrations are set for Hamburg, Cologne, Frankfurt, Paris, London and Rome. – The Local

Iran has detained eight local staff at the British embassy in Tehran on accusations of having a role in post-election riots, local reports said.

UK Foreign Secretary David Miliband demanded their release, saying the arrests were “quite unacceptable”.

Relations between the countries are strained after Tehran accused the UK of stoking unrest, which London denies.

Some 17 people are thought to have died in street protests after the disputed 12 June presidential poll.

Tehran has expelled two British diplomats in the past week, and the UK has responded with a similar measure.

The arrests were first reported by the semi-official Fars news agency.

“Eight local employees at the British embassy who had a considerable role in recent unrest were taken into custody,” Fars said, without giving a source.

UK Foreign Secretary David Miliband expressed “deep concern” over the arrest of local staff on Saturday.

“This is harassment and intimidation of a kind that is quite unacceptable,” he told reporters at an international conference in Corfu. “We want to see (them) released unharmed.”

He said the British government had made a strong protest and denied accusations that the UK was behind unrest in Iran.

Poll verdict

Meanwhile, Iran’s powerful Guardian Council was due to give its verdict on the result of the disputed presidential election, which handed President Mahmoud Ahmadinejad a decisive victory.

But the BBC’s Jeremy Bowen in Tehran says there is much politicking taking place behind the scenes, and that the five-day deadline for the Guardian Council to return its verdict may be extended.

Our correspondent says there is an attempt to form a committee – including the disappointed presidential candidates – to oversee the recount of 10% of the votes, a move which they are resisting.

Another parliamentary committee is holding discussions with the grand ayatollahs in an attempt from pro-Ahmadinejad forces to put on a show of unity, he adds.

But opposition leader Mir Hossein Mousavi has not backed away from his claim that the election result was fraudulent, and has refused to support the Guardian Council’s plan for a partial recount.

Mr Mousavi has been calling for a full re-run of the vote, but said on Saturday that he would accept a review by an independent body.

However the Guardian Council has already defended President Ahmadinejad’s re-election, saying on Friday that the presidential poll was the “healthiest” since the Iranian revolution in 1979. – BBC

Cristiano Ronaldo will be unveiled as a Real Madrid player on July 6, having finally agreed terms over his world-record $130 million transfer from Manchester United.

Spanish giants Real had been in talks with the 24-year-old World Player of the Year’s representatives for the past two weeks after agreeing the fee with English champions United.

The Portugal winger will be tied to the Bernabeu until 2015, with Spanish media reporting that he will be paid €13 million ($18 million) each season.

Madrid announced on the club’s official Web site read: “Real Madrid and Manchester United have signed a final agreement for the transfer of the rights of Cristiano Ronaldo from July 1.

“The player will be tied to Real Madrid for the next six seasons and will be presented on July 6 at the Santiago Bernabeu.”

United also confirmed the deal on their Web site, stating: “Cristiano Ronaldo’s departure is all but done and dusted after Real Madrid and Manchester United finalized the agreement for his transfer on Friday evening.

“The Portuguese winger was the subject of a world-record £80 million offer from the Spanish club on Thursday 11 June. He has since been on holiday but a return to work with new employers now beckons, with the sale set to be completed on Wednesday July 1.”

When the deal is completed next week, it will be the fourth time Real have broken the world record for transfers.

President Florentino Perez smashed previous highest marks to bring Luis Figo and Zinedine Zidane to the Bernabeu in his first stint in charge, then made AC Milan’s Brazilian superstar Kaka his first ‘Galactico’ capture of his second reign at the start of this month.

Perez is trying to rebuild a squad which fell well behind bitter rivals Barcelona last season, with the Catalans completing an unprecedented treble of titles culminating with victory in the Champions League final against United in May.

Ronaldo has reportedly admitted that he had already decided to join Real following United’s capture of European football’s premier prize with victory against English rivals Chelsea a year ago.

He will be the third new addition to the squad, with Valencia defender Raul Albiol due to sign a five-year deal next week after returning from Confederations Cup duty with Spain.

Real have been linked with a host of other players, including Albiol’s club and international team-mate David Villa. – CNN

The Brazilian military said late Friday it is calling off the search for bodies of passengers and crew from the Air France plane that crashed into the Atlantic earlier this month.

It was unlikely that any more bodies would be found, the military said.

So far, search teams have found 51 of the 228 people who died when Air France Flight 447 plunged into the sea June 1, according to the military.

They have also found more than 600 parts and structural components of the plane, along with luggage, the military said.

The bodies were handed to Brazilian authorities for identification while the debris and luggage were given to French aviation investigators, the military said.

In the 26 days of the search operation, the Brazilian air force used 12 planes along with aircraft from France, the United States and Spain, the military said. The Brazilian navy used 11 ships.

Ships remain in the search area hundreds of miles northeast of Brazil in an effort to find the flight data recorders, the Brazilian military said.

Last week investigators said they were running out of time to find the recorders which could prove crucial to working out what caused the disaster.

Officials remain in the dark about what caused the airliner to plunge into the sea off the coast of Brazil. The wreckage is believed to be about 15,000 feet (4,500 meters) deep, amid underwater mountains and mixed in with tons of sea trash.

A French nuclear submarine and other vessels are searching for black boxes by attempting to trace their locator beacons, which send out acoustic pulses, or “pings,” to searchers.

The U.S. Navy has contributed two high-tech acoustic devices — known as towed pinger locators — which have been attached to French tug boats and can search to a maximum depth of 20,000ft (6,100 meters).

The firm which makes the recorders, Honeywell Aerospace, has told CNN it has a 100 percent recovery record from air accidents.

Honeywell said it was hard to estimate how much battery life the locator beacon on the recorders had, as it depended on the conditions, but it is typically around 30 days.

The American National Transportation and Safety Board says on its Web site that large commercial aircraft and some smaller commercial, corporate, and private aircraft were typically fitted with data recorders.

One recorder taped radio transmissions and sounds in the cockpit, such as the pilot’s voices and engine noises, the NTSB said.

Sounds of interest could be engine noise, stall warnings, landing gear extension and retraction, and other clicks and pops. From these sounds engine revs per minute, system failures, speed and the time at which certain events occurred could often be determined, the NTSB said. – CNN