More legal trouble for Pakistan's Musharraf

ISLAMABAD (AP) — A Pakistani court on Wednesday rejected bail for ex-military ruler Pervez Musharraf in a case connected to the assassination of former Prime Minister Benazir Bhutto in 2007, a government prosecutor said.

It was the latest setback for Musharraf, who returned to Pakistan last month from four years in self-imposed exile to make a political comeback but is currently under house arrest in connection with a different case.

Musharraf returned to run in the parliamentary election scheduled for May 11, but was disqualified because of his actions while in power and is spending most of his time battling legal cases.

He seized power in a military coup in 1999 when he was army chief. He was serving as president when Bhutto was killed in a gun and bomb attack in December 2007, shortly after she returned from exile to contest the elections.

Musharraf blamed the Pakistani Taliban for Bhutto's slaying, but government investigators later said there was evidence of his involvement. A U.N. report faulted Musharraf's government for failing to provide Bhutto with adequate security.

Musharraf has denied the allegations against him.

The former military ruler had arranged a pre-arrest bail in the Bhutto case and several others before returning to Pakistan, meaning he could not be immediately arrested on arrival.

On Wednesday, the Islamabad High Court rejected Musharraf's bail after his lawyer failed to appear to argue for an extension in the Bhutto case, said government prosecutor Zulfikar Chaudhry.

Musharraf could now be arrested and tried in connection with the Bhutto case as well, said Chaudhry.

Musharraf was placed under house arrest over the weekend in connection with a case involving his decision to fire senior judges, including the chief justice of the Supreme Court, while in power. His arrest followed a dramatic escape from court in which he fled in a speeding vehicle to avoid detention. He was eventually placed under arrest at his heavily guarded house on the outskirts of Islamabad.

Musharraf stepped down from power in 2008 because of growing discontent with his rule, especially among the legal community because of his decision to dismiss judges. He returned last month despite the legal challenges against him, as well as death threats by the Pakistani Taliban.

Police defused a car bomb parked about 150 meters (500 feet) from Musharraf's house in Islamabad on Tuesday and are investigating how the vehicle was able to get so close to his home.

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Irish unions reject pay deal, warn of trouble ahead

By Padraic Halpin

DUBLIN (Reuters) - A majority of Irish public sector workers rejected a new pay deal on Tuesday and warned the government against unilaterally cutting wages, giving it a headache as it seeks to exit an EU-IMF bailout later this year.

The government and the country's main unions agreed in February to extend a three-year-old pay deal that has been credited with avoiding the kind of industrial unrest seen in other euro zone countries hit by debt woes.

But the deal had to be approved by hundreds of thousands of union members and after only a handful of unions backed the new proposals, it needed the backing of SIPTU, the country's largest union, whose members account for some 25 percent of all workers.

It rejected the deal by a margin of 54 percent to 46 percent and its president warned the government that it would face a "major confrontation" if it went through with a threat to cut pay in order to make budgetary savings.

"The result reflects the deep and well justified sense of grievance among working people throughout the country and public service workers in particular," Jack O'Connor, one of the union leaders who negotiated the agreement, said in a statement.

"We urge the government not to proceed with legislation to cut the pay of public service workers as it would inevitably precipitate a major confrontation."

The update to the Croke Park agreement - named for the sports stadium in which the original deal was struck - proposed pay reductions for higher earners, longer working hours and cuts in premium Sunday payments.

This would save 1 billion euros (845.8 million pounds) over three years, a key part of efforts to reduce a large budget deficit under the country's 85-billion-euro European Union-International Monetary Fund bailout, and Prime Minister Enda Kenny said the savings still needed to be found.

Kenny said the government would reflect on the implications of the votes but analysts said his Labour Party junior partners in government, closely tied to the unions and suffering in the polls, would find it hard to stomach pushing through pay cuts.

"I think backbenchers are likely to balk at the prospect of legislating for pay cuts, not least given the recent electoral performance of the Labour Party," said Bill Roche, Professor of Industrial Relations at University College Dublin.

"If legislation did pass through, there's every prospect of confrontation on a very significant scale so I wouldn't rule out the Labour Relations Commission stepping back into the breach to try to get parties to sit down. That's frankly more palatable."

"DEFINITELY A SETBACK"

Public servants took wage cuts averaging 15 percent before the Labour Relations Commission helped negotiate the first Croke Park deal in March 2010, where a leaner public service was promised in return for no more pay cuts or forced redundancies.

The Irish National Teachers Organisation (INTO), which rejected the deal by a margin of more than two-to-one, suggested that the government use budgetary savings from a bank debt deal struck with the European Central Bank (ECB) to avoid pay cuts.

While investors have been impressed by Ireland's ability to avoid street protests and strikes, helping it return to capital markets last year, bond dealers said yields on Irish debt were unlikely to increase until things ratcheted up further.

"Investors have long questioned how Ireland has maintained the level of industrial peace it has, so this will be noted but clearly pictures of people taking to the streets would be much more significant," said Ryan McGrath of Cantor Fitzgerald.

"It's definitely a setback though."

(Reporting by Padraic Halpin; editing by Michael Roddy)

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Venezuela's Chavez still suffers breathing trouble

CARACAS (Reuters) - Venezuela's cancer-stricken President Hugo Chavez is still suffering breathing problems after his operation in Cuba more than two months ago, the government said on Thursday.

"The breathing insufficiency that emerged post-operation persists, and the tendency has not been favorable, so it is still being treated," read the first official communiqué on Chavez's health since his return to Venezuela on Monday.

(Reporting by Andrew Cawthorne; Editing by Todd Eastham)

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