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European shops see sales crash

BRUSSELS, Belgium (AP) — European shops saw trading crash in November, the EU statistics agency said Tuesday, adding to signs that the economy may be slowing.

But the president of the European Union insisted the bloc still had the momentum to keep expanding despite higher inflation and a credit crisis that may curb the region’s recent surge.

Retail trade in the nations that share the euro shrunk 1.4 percent from a year ago — the biggest annual drop since records began in 1997 — and 0.5 percent from October, the EU statistics agency Eurostat said Tuesday.

The shopping slowdown comes as year-on-year inflation over the last two months runs at its highest level since euro cash was introduced in 2002, with people paying more for energy and food — holding back the domestic demand that could lift the economy.

The European Central Bank so far has shied away from doling out the usual cure for overheating prices by raising borrowing costs. It needs instead to encourage banks to keep lending in the wake of a financial market crisis that made them fearful of taking on new risks.

The full impact of the credit crisis on Europe’s economic growth is still uncertain, but tighter borrowing conditions could hit hard by making it tougher for companies to get a loan and homebuyers from securing a mortgage.

We are certainly aware of the fact that 2008 will be one of the more difficult years for the EU, Slovenian Prime Minister Janez Jansa — whose country holds the EU’s six-month rotating presidency — told reporters at a news conference at Brdo Pri Kranju in Slovenia.

It would be unrealistic of us not to expect certain problems because of the issues that we have witnessed in the financial markets, because of rising price of oil and food and the impact of these price increases, he said.

But he said strong growth over the past two years and the creation of millions of new jobs provided a new momentum, a new basis for further growth.

The problems … I believe will not hinder this strategic step forward that the EU economy has made, he said, speaking through an interpreter.

EU officials claim that part of the economy’s recent energy came from reforms such as more flexible working conditions and moves to knock down national barriers between the EU’s 27 nations.

Both the EU and the euro currency zone have cut unemployment to record lows that stayed on hold in November, despite signs of slower growth in the last three months of the year.

Analysts are divided on whether the weak retail sales data suggest Europe might enter a steeper downturn.

Bear Stearns economist David Brown told Dow Jones Newswires that signs of lower domestic demand — one of the engines for growth — should push the ECB to cut euro area interest rates instead of talking about a hike as it has so far, in stark contrast to central bankers in major trading partners Britain and the United States.

The greater risk now is growth stalling badly in 2008. This poses a very strong argument to cut rates soon, he said.

But for Holger Schmieding at the Bank of America, the extent of an overall slowdown was still unclear.

Not all is doom and gloom, he said, pointing to strong German factory orders and predicting a gradual rebound in consumption this spring.

Over time, consumers get used to higher levels of oil and food prices. They are likely to open up their purses again at least a little bit later this year, he said.

The ECB is expected to keep interest rates on hold at 4 percent when it meets on Thursday. E-mail to a friend

Copyright 2008 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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New Hampshire governor predicts record turnout

MANCHESTER, New Hampshire (CNN) — New Hampshire’s governor predicted a record turnout Tuesday for the first-in-the-nation presidential primary as candidates zigzagged across the New England state trying to influence undecided voters.

Gov. John Lynch said he expects half a million people to vote.

A wide open race in both parties and unseasonably mild temperatures could be contributing to the long lines at voting locations across the state.

High turnout at polling stations is forcing the New Hampshire secretary of state’s office to send more ballots to some polling locations, New Hampshire Deputy Secretary of State Dave Scanlan said.

In particular, the polling places were running low on Democratic ballots, Scanlan said, but no polling station had run out.

Scanlan initially said his office was confident voting could be completed with the number of ballots it had on hand.

But he later said he might be wrong in one or two cases. Should that occur, leftover absentee ballots could be used or the remaining ballots could be photocopied, initialed by a town clerk and counted by hand, Scanlan said.

The governor’s prediction follows record-breaking numbers in last week’s Iowa Democratic and Republican caucuses.

The New Hampshire secretary of state’s office said anyone waiting in line when the polls officially close at 8 p.m. ET will be allowed to vote.

The results of Tuesday’s voting could have huge implications in the Democratic and GOP races.

New Hampshire’s independent voters, who make up about 40 percent of the electorate, could throw a surprise into the primary. A CNN-WMUR poll Sunday found independent voters split almost evenly between the parties this year.

Despite months of campaigning and millions of dollars spent on advertising, more than 20 percent of respondents on both sides said they either had not yet decided on a candidate or are open to changing their minds before voting, the poll found.

Voting began in two hamlets just after midnight, hours before the rest of the state’s polling places opened. See the New Englanders head to the polls

The first ballots were cast in Dixville Notch, a hamlet of about 75 near the Canadian border.

People there favored Sen. John McCain of Arizona in the Republican primary — he got four votes — and Sen. Barack Obama of Illinois in the Democratic contest, who won seven votes.

Obama and McCain also won in midnight voting in Hart’s Location, population 42. The two senators hope to see those results duplicated statewide.

Obama worked to turn an apparent boost in the polls after the Iowa caucuses into a second victory over his leading rivals, Sen. Hillary Clinton of New York and former Sen. John Edwards of North Carolina.

Among Democrats, a CNN/WMUR poll found Obama with a nine percentage point lead over Clinton, 39 percent to 30 percent. Edwards, who edged out Clinton for second place in Iowa, ran third with 16 percent.

At a morning rally, Obama praised the student volunteers working for his campaign and gave them one last mission: to persuade undecided voters to cast their ballots for him.

My job is to be so persuasive that if there’s anybody left out there who is still not sure whether they will vote, or is still not clear who they will vote for, that a light will shine through that window, a beam of light will come down upon you, you will experience an epiphany … and you will suddenly realize that you must go to the polls and vote for Obama, the Democrat said in Hanover.

Clinton has tried to turn the tide by emphasizing her record as a change agent, as a senator and as first lady.

She fought tears Monday as she described the stakes in the campaign at a forum with uncommitted voters in Portsmouth, calling it one of the most important elections America has ever faced.

This is very personal for me — it’s not just political, it’s not just public, she said in response to a question about the stress of the campaign. I see what’s happening, and we have to reverse it.

Former President Clinton lashed out at the media coverage Monday night, saying Obama should be pressed more fully on Iraq and accusing the senator from Illinois of shifting his position to reflect changing attitudes on the war. Watch as the ex-president tears into Obama’s record

It is wrong that Sen. Obama got to go through 15 debates trumpeting his superior judgment and how he had been against the war in every year, enumerating the years, and never got asked one time, not once, ‘Well, how could you say that when you said in 2004, you didn’t know how you would have voted on the resolution?’ You said in 2004 there was no difference between you and George Bush on the war, Clinton said at a campaign stop in Hanover.

And you took that speech you’re now running on off your Web site in 2004. And there’s no difference in your voting record and Hillary’s ever since.

He added, Give me a break. This whole thing is the biggest fairy tale I’ve ever seen.

Speaking to reporters in Manchester Tuesday afternoon, Obama dismissed the former president’s comments, saying It seems like you guys have been reporting on me the entire year.

I remember this summer when we were down 20 points, we were getting knocked around pretty good, and I didn’t hear the Clinton camp complaining about how terrible the press was.

I understand they are frustrated right now, Obama added. I suspect that they will try and get back in terms of a strategy for them to do better than they feel they are doing right now.

Meanwhile, Edwards sharpened his criticism of Clinton, blasting her for taking money from the pharmaceutical and defense interests the former trial lawyer routinely excoriates on the stump.

I’ve never taken any money — any money — from a Washington lobbyist or a special interest PAC. She’s continued to do that. She’s taken more lobbyist money than any candidate, Edwards said Tuesday in Manchester.

On the Republican side, McCain expressed confidence he would win the Republican primary, just as he did during his first White House bid eight years ago.

We are going to prove that you can’t buy an election in the state of New Hampshire — and we are also going to prove that negative attack ads don’t work either, he said Monday in a jab at his leading rival, former Massachusetts Gov. Mitt Romney.

Romney has poured $8 million into television ads in New Hampshire, outspending McCain 2-to-1, according to figures from TNS Media Intelligence/CMAG, CNN’s consultant on TV campaign advertising.

But the CNN/WMUR poll of likely voters released showed McCain leading Romney by 31 percent to 26 percent.

Change was the buzzword on all the candidates’ lips, possibly because of Obama’s strong showing in Iowa last week.

Romney expressed confidence Tuesday that he would win the Republican primary because voters want an outsider who can fix how the federal government operates. Watch Romney he can bring about change

They want a new face, a new vision, somebody who can change Washington, Romney said. I’m convinced that it’s going to be a close one today, that the Republicans are going to vote for me and independents are going to get behind and we’re going to end up winning this thing.

Romney also spent heavily in Iowa, only to be beaten by former Arkansas Gov. Mike Huckabee. Huckabee won the GOP Iowa caucuses with extensive support from evangelical Christian voters, but he was running third in the more secular, libertarian New Hampshire with 13 percent, Monday’s poll found.

Huckabee said Tuesday he believes Americans all want the same thing.

They want government to leave them alone, let them live their lives: They want government to do the job that it’s supposed to do, and that’s protect us, give us the capacity to be free, and then beyond that, let us live our lives, he said at a Manchester polling station.
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Kenya opposition: Death toll 1,000

NAIROBI, Kenya (AP) — Under U.S. pressure, Kenya’s president and his chief rival agreed to talks and made other concessions to end their deadly election dispute.

The opposition, meanwhile, claimed violence, much of it fueled by tribal rivalries, has killed up to 1,000 people, but the government put the toll at nearly 500.

The top American envoy to Africa said the vote count at the heart of the dispute was tampered with but that both sides could have been involved. The Dec. 27 election returned President Mwai Kibaki to power for another five-year term. Fiery opponent Raila Odinga came in a close second.

Yes, there was rigging, the U.S. envoy, Jendayi Frazer, told The Associated Press in an interview Monday in Nairobi, where she has been meeting with Kibaki and Odinga for the past three days.

I mean there were problems with the vote counting process. She added: Both the parties could have rigged. She said she did not want to blame either Kibaki or Odinga.

Kenya’s electoral commission chairman Samuel Kivuiti has himself said he is not sure Kibaki won, though the chairman officially declared Kibaki the winner in the closest presidential election in Kenya’s history.

Both sides softened their tones amid the U.S. intervention. Kenya is crucial to the war on terrorism, having turned over dozens of people to the U.S. and Ethiopia as suspected terrorists. It also allows American forces to operate from Kenyan bases and conducts joint exercises with U.S. troops in the region.

The U.S. also is a major donor to Kenya, long seen as a stable democracy in a region that includes war-ravaged Somalia and Sudan. Aid amounts to roughly $1 billion a year, said embassy spokesman T.J. Dowling.

Frazer said the violence hasn’t shaken our confidence in Kenya as a regional hub.

Three former African heads of state also arrived in Nairobi. Mozambique’s Joachim Chissano said they would tour troubled slum areas Tuesday but would not say whether he, Zambia’s Kenneth Kaunda and Benjamin Mkapa of Tanzania intended to try to mediate.

It’s like seeing a neighbor’s house on fire, Chissano said. We are shocked by the events.

The violence has marked some of the darkest times since Kenya’s independence from Britain in 1963, with much of the fighting degenerating into riots pitting other tribes against Kibaki’s Kikuyu, long dominant in politics and the economy.

An official in neighboring Uganda said 30 fleeing Kenyans were thrown into the border river by Kenyan attackers, and were presumed drowned.

Two Ugandan truck drivers carrying the group said they were stopped Saturday at a roadblock mounted by vigilantes who identified the refugees as Kikuyus and threw them into the deep, swift-flowing Kipkaren River, said Himbaza Hashaka, a Ugandan border official. The drivers said none survived, Hashaka said.

A statement Monday from the Ministry of Special Programs put the death toll at 486 with some 255,000 people displaced from their homes.

The toll, which did not include the drownings at the border, was compiled by a special committee of humanitarian services set up by the government which extensively toured areas most affected by riots.

But Odinga’s party said nearly 1,000 people had died, saying its figure came from supporters who had called in from all over the country.

On Monday, Kibaki invited Odinga to his official residence for a meeting Friday to discuss how to end the political and ethnic turmoil, according to a statement from the president’s press service. Just hours earlier, Odinga called off nationwide rallies amid fears they would spark new bloodshed.

Odinga’s spokesman, Salim Lone, said Odinga will meet with Kibaki, as long as the meeting is part of the mediation process with African Union chairman John Kufuor, the Ghanaian president. Kufuor’s trip to Kenya had been delayed repeatedly as the government rejected outside mediation in the disputed vote, but was to begin talks in the capital as early as Wednesday.

Frazer had won an offer from Kibaki to form a unity government over the weekend. Odinga then said he was willing to drop demands that Kibaki resign and was willing to discuss sharing power, but only through a mediator empowered to negotiate an agreement that the international community would guarantee.

It would be nearly impossible for Kibaki to govern without opposition support. In parliamentary elections held the same day as the presidential vote, Odinga’s party won 95 of 210 legislative seats, and half of Kibaki’s Cabinet lost their seats. It was a sign of people’s anger over pervasive corruption and nepotism that favored Kibaki’s Kikuyu tribe.
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Suspect helped police find hiker’s body, officials say

BLAIRSVILLE, Georgia (CNN) — An autopsy was to be done Tuesday on a young hiker whose body was found Monday evening in northern Georgia.

Meredith Emerson, 24, had been missing since New Year’s Day, and the man charged with her kidnapping led investigators to her body, officials said.

Gary Michael Hilton told authorities where to find Emerson’s body, said investigator John Cagle of the Georgia Bureau of Investigation.

Meanwhile, state and federal authorities said they are trying to determine whether Hilton may have been involved in at least three other killings in two neighboring states.

Emerson, a University of Georgia alumna, went missing on New Year’s Day after leaving home for a hike in the mountains with her dog, Ella.

Investigators found Emerson’s body about 7:30 p.m. Monday, Cagle said, in the 25,000-acre Dawson Forest Wildlife Management Area — about 30 miles south of the Union County, Georgia, state park where she went hiking. Watch Cagle describe how the body was found

When asked whether Hilton, 61, had taken investigators to the location or merely described it, Cagle said, Both.

Peggy Bailey, Emerson’s godmother and spokesperson for the family, said, We are glad she’s found. This brings some sort of closure for us, CNN affiliate WXIA reported.

Several witnesses told authorities they saw Hilton and Emerson together, letting their dogs play along a hiking trail in Vogel State Park. Witnesses later said they had seen a van that looked like Hilton’s in the area where the body eventually was found, and the search shifted there, Cagle said.

Director Vernon Keenan of the Georgia Bureau of Investigation and other law enforcement officials declined to say Monday night whether murder charges are pending against Hilton. They also withheld virtually all details about what Hilton said to authorities and the scene where they found Emerson’s body.

There’s a lot going on in the case right now — the investigation is still going on, said Union County District Attorney Stan Gunter. A lot of decisions have to be made.

Hilton remained in the Union County Jail Monday night.

Several hours earlier, he appeared in court in shackles and an orange prison jump suit. He did not speak as Judge Johnie Garmon read the charges against him. Garmon said surveillance video had identified Hilton as he tried to use one of Emerson’s credit cards at a bank in Canton, Georgia.

Authorities arrested Hilton after finding bloodstained clothes consistent with what Emerson had been wearing when she went missing, according to a criminal warrant filed Saturday. Investigators also found Emerson’s black leather wallet containing her identification cards in a convenience store trash bin in the Forsyth County city of Cumming, Georgia. Follow the case on an interactive map

The warrant alleges that Hilton made a phone call Friday from a pay phone at that convenience store.

The bin is next to a grocery store parking lot where Ella, Emerson’s Labrador mix, was found wandering Friday, the warrant said. When Hilton’s 2001 minivan was searched, agents determined that the rear seat belt had been cut out, the warrant said. Hilton was attempting to vacuum the vehicle and wash portions of it with a bleach and water solution.

Hilton was taken into custody Friday at a convenience store in suburban Atlanta.

Also Monday, federal, Georgia and North Carolina investigators met in nearby Cleveland, Georgia, to compare notes on the Emerson case and a similar case from a few months ago in North Carolina, according to FBI special Agent Greg Jones.

In the North Carolina case, an elderly couple — John and Irene Bryant — disappeared after going for a hike in Mount Pigsah National Forest. Her body was found near the couple’s car. John Bryant’s body has not been found, but Keenan referred to the case Monday night as a double homicide.

Investigators have a bank video of a man wearing a yellow jacket — believed to have belonged to John Bryant — while using the Bryant’s ATM card.

Witnesses who saw Hilton on the trail with Emerson on the day she disappeared said he was wearing a yellow jacket.

On Monday night, Keenan said Georgia authorities also plan to meet with law enforcement officials from Florida to share details about a similar killing there.
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Voting begins in key U.S. primary

(CNN) — Voting is under way in the New Hampshire Primary, a key early contest in the U.S. presidential race, where Republican and Democratic campaigners are vying for support in their bids to be chosen as their party’s presidential candidate.

Turnout was expected to be high due to the high stakes and springlike weather, with early reports indicating long lines at polling stations. The New Hampshire secretary of state’s office said anyone waiting in line when the polls officially close at 8 p.m. ET will be allowed to vote.

On the Democratic side, Barack Obama is aiming to press home his advantage over main rival Hillary Clinton following his success in last week’s Iowa caucus. John Edwards, Bill Richardson and Dennis Kucinich and Mike Gravel are also competing for the Democratic nomination.

Among the Republicans, John McCain and Mitch Romney appear to be the frontrunners, with both seeking a morale-boosting victory after rival Mike Huckabee claimed a surprise victory in Iowa. Fred Thompson, Ron Paul and Duncan Hunter also remain in the Republican race.

Former Tennessee senator Thompson has nearly abandoned New Hampshire, while former New York Mayor Giuliani has limited campaigning to focus on later primaries.

Despite its comparatively small population, New Hampshire has traditionally carried an importance disproportionate to its size due to its status as the first state to go to the polls in the U.S. primary calendar. Watch Rep. Duncan Hunter honor the early-voting tradition

A strong performance in New Hampshire can give a candidate valuable momentum, enabling them to rally supporters and raise extra campaign funds going forward to the crucial Super Tuesday primaries on February 5 when voters in 24 states will participate in primary elections.

By contrast, a poor showing in the Granite State can spell the end for a candidate’s White House chances.

Despite the millions spent by candidates from all parties over the past few weeks and months, the first results in New Hampshire came from two tiny hamlets, just after midnight and hours before the rest of the state’s polling places opened.

In Dixville Notch, a hamlet of about 75 near the Canadian border, Arizona senator McCain won the Republican primary with four votes, while Obama, a senator for Illinois, won seven votes in the Democratic contest.

McCain won the state’s primary during his first White House bid eight years ago but eventually lost out to U.S. President George W. Bush for the Republican nomination. The two also won in midnight voting in Hart’s Location, population 42. The last polls in the state close at 8 p.m.

A CNN/WMUR poll of likely voters released Monday night showed the race is still open on both sides with more than 20 percent of respondents on both Democrat and Republican sides saying they were undecided or were still open to changing their minds before voting.

New Hampshire’s independent voters, who make up about 40 percent of the state’s electorate, could also throw a surprise into the primaries.

McCain Monday attacked the amount of campaign funds spent by his leading rival, former Massachusetts governor Mitt Romney, who has poured about $8 million in TV ads into the state — double the spend of McCain — according to figures from TNS Media Intelligence/CMAG, CNN’s consultant on television campaign advertising.

We are going to prove that you can’t buy an election in the state of New Hampshire, McCain said, and we are also going to prove that negative attack ads don’t work either.

Monday’s poll showed McCain leading Romney by a margin of 31 to 26 percentage points.

For his part, Romney emphasized his experience in business rather than his experience in public office. If there has ever been a time we need a change in Washington, it’s now, he said. Because in my experience, what I’ve heard as I travel this country is that Washington is broken.

The former Arkansas governor Mike Huckabee, who won Iowa with extensive support from evangelical Christian voters in that state, was running third in more secular, libertarian New Hampshire with 13 percent, Monday’s poll found.

If we come in anywhere in the third or fourth spot, we are going to be doing great, he told CNN Monday.

Ron Paul, an anti-war Texas congressman and onetime Libertarian Party presidential nominee, was drawing 10 percent support in Monday’s poll. A growing number of independents have told pollsters they are considering voting for the Republican candidate.

The big trouble that we have over the last year was you know, getting our message out, Paul told CNN. And now, the money is flowing in, the money comes in faster than we can spend it. Because when people hear this message, they get so excited about it.

Among Democrats, Obama is hoping to turn an apparent boost in opinion polls after the Iowa caucuses into a second victory over his leading rivals, senator Hillary Clinton and former senator John Edwards.

Monday’s poll showed him enjoying a lead of 39 percent, with Clinton on 30 percent and Edwards third on 16 percent.

Obama’s theme of hope has drawn crowds — but also criticism from rivals who suggest he will be too soft to deliver the change he promises.

But Obama, still in his first term as a senator in Illinois, defended his message Monday, telling a crowd in Rochester, New Hampshire that hope is not blind optimism.

At a morning rally Tuesday, Obama praised the student volunteers working for his campaign and gave them with one last mission: to persuade undecided voters to cast theirs ballot for him.

My job is to be so persuasive that if there’s anybody left out there who is still not sure whether they will vote, or is still not clear who they will vote for, that a light will shine through that window, a beam of light will come down upon you, you will experience an epiphany … and you will suddenly realize that you must go to the polls and vote for Obama, the Democrat said in Hanover.

Clinton has tried to turn the tide by emphasizing her record as a change agent, as a senator and as first lady. She fought back tears as she described the stakes in the campaign at a forum with uncommitted voters in Portsmouth, calling it one of the most important elections America has ever faced.

This is very personal for me — it’s not just political, it’s not just public, she said in response to a question about the stress of the campaign. I see what’s happening, and we have to reverse it.

Edwards, meanwhile, blasted Clinton for taking money from the pharmaceutical and defense interests, despite her criticisms of big business while campaigning. What has been happening in America is it is big corporate businesses and big multinational corporations that have entirely too much influence on the policy, he told CNN.

New Mexico governor Bill Richardson, placed fourth in Monday’s opinion poll on seven percent, said he has set his sights on the remaining undecided voters.

With Bill Richardson, you get change and you get experience, the former U.N. ambassador and energy secretary told CNN. You have to have experience to change things. I have a record.
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