The European Commission said Wednesday it has asked the EU‘s highest court to rule on the legality of a controversial treaty covering copyright, counterfeiting and Internet freedom.

The EU executive “decided today to ask the European Court of Justice for a legal opinion to clarify that the ACTA agreement and its implementation must be fully compatible with freedom of expression and freedom of the internet,” said a statement.

However, even at the highest levels in Brussels, officials are deeply divided over the accord, with the justice commissioner openly criticising the deal.

The United States, Japan and Canada are among signatories to the Anti-Counterfeiting Trade Agreement (ACTA), but a number of mainly eastern European states have threatened not to ratify the treaty, which critics say could curtail Internet freedom.

The Commission has defended ACTA against accusations that it amounts to a witch hunt against individuals illegally downloading content and has vowed to try to keep the deal alive when it comes up for ratification later this month by the European Parliament.

“Let me be very clear: I share people’s concern for these fundamental freedoms… especially over the freedom of the Internet,” EU trade commissioner Karel De Gucht told a news conference in announcing the decision.

“This debate must be based upon facts, and not upon the misinformation and rumour that has dominated social media sites and blogs in recent weeks,” he added.

A string of protests has drawn tens of thousands of citizens onto the streets of European cities over recent weekends.

Hacker group Anonymous has also claimed responsibility for cyber-attacks including one reported on Wednesday in Greece, in protests against the treaty.

“The decision by the Commissioner was due to the ‘people-power’ of the tens of thousands who had called for ACTA to be scrapped,” said Sergei Stanishev, head of the Party of European Socialists in the European Parliament.

De Gucht said the agreement “aims to raise global standards for intellectual property rights” and that it “will help protect jobs currently lost because counterfeited, pirated goods worth 200 billion euros are currently floating around.”

However, moments before De Gucht stood up to announce the move at a press conference, Viviane Reding, the commissioner for justice, fundamental rights and citizenship, criticised the deal.

Flagged up on Twitter, she said in a statement of her own that “copyright protection can never be a justification for eliminating freedom of expression or freedom of information.”

She underlined: “That is why for me, blocking the Internet is never an option.”

Twenty-two of the 27 EU states signed the Anti-Counterfeiting Trade Agreement (ACTA) on January 26 in Tokyo.

Since then, Bulgaria, the Czech Republic, Germany, Latvia, Lithuania, Poland and Romania have said they will not ratify the pact.

Slovenia’s newly-appointed government also said last week it was considering freezing its ratification of the accord signed by the previous government in January.

EU Parliament president Martin Schulz has called the pact “unbalanced” and difficult to accept in its current form, and Organisation for Security and Cooperation in Europe (OSCE) media freedom representative Dunja Mijatovic said last week it could undermine freedom of expression.

The European Commission said Wednesday it has asked the EU‘s highest court to rule on the legality of a controversial treaty covering copyright, counterfeiting and Internet freedom.

The EU executive “decided today to ask the European Court of Justice for a legal opinion to clarify that the ACTA agreement and its implementation must be fully compatible with freedom of expression and freedom of the internet,” said a statement.

However, even at the highest levels in Brussels, officials are deeply divided over the accord, with the justice commissioner openly criticising the deal.

The United States, Japan and Canada are among signatories to the Anti-Counterfeiting Trade Agreement (ACTA), but a number of mainly eastern European states have threatened not to ratify the treaty, which critics say could curtail Internet freedom.

The Commission has defended ACTA against accusations that it amounts to a witch hunt against individuals illegally downloading content and has vowed to try to keep the deal alive when it comes up for ratification later this month by the European Parliament.

“Let me be very clear: I share people’s concern for these fundamental freedoms… especially over the freedom of the Internet,” EU trade commissioner Karel De Gucht told a news conference in announcing the decision.

“This debate must be based upon facts, and not upon the misinformation and rumour that has dominated social media sites and blogs in recent weeks,” he added.

A string of protests has drawn tens of thousands of citizens onto the streets of European cities over recent weekends.

Hacker group Anonymous has also claimed responsibility for cyber-attacks including one reported on Wednesday in Greece, in protests against the treaty.

“The decision by the Commissioner was due to the ‘people-power’ of the tens of thousands who had called for ACTA to be scrapped,” said Sergei Stanishev, head of the Party of European Socialists in the European Parliament.

De Gucht said the agreement “aims to raise global standards for intellectual property rights” and that it “will help protect jobs currently lost because counterfeited, pirated goods worth 200 billion euros are currently floating around.”

However, moments before De Gucht stood up to announce the move at a press conference, Viviane Reding, the commissioner for justice, fundamental rights and citizenship, criticised the deal.

Flagged up on Twitter, she said in a statement of her own that “copyright protection can never be a justification for eliminating freedom of expression or freedom of information.”

She underlined: “That is why for me, blocking the Internet is never an option.”

Twenty-two of the 27 EU states signed the Anti-Counterfeiting Trade Agreement (ACTA) on January 26 in Tokyo.

Since then, Bulgaria, the Czech Republic, Germany, Latvia, Lithuania, Poland and Romania have said they will not ratify the pact.

Slovenia’s newly-appointed government also said last week it was considering freezing its ratification of the accord signed by the previous government in January.

EU Parliament president Martin Schulz has called the pact “unbalanced” and difficult to accept in its current form, and Organisation for Security and Cooperation in Europe (OSCE) media freedom representative Dunja Mijatovic said last week it could undermine freedom of expression.

ZURICH/LONDON (Reuters) – UBS might struggle to attract big institutional investors for more loss-absorbing bonds it wants to sell, after investors voiced distaste for the structure and price of an initial billion (1.3 billion pounds) deal announced on Wednesday.

UBS’s new bonds are designed to help bolster the bank in tough times by absorbing losses. Their value can be written down if the bank’s common equity Tier 1 ratio — a measure of financial strength — falls below 5 percent or hits non-viability.

The bank, which needs to raise a total of roughly billion to meet new capital rules, said on Wednesday it is weighing issues in other regions and currencies which are likely to exceed billion in size.

UBS attracted .5 billion of demand from investors, which UBS said included private banks — which traditionally means wealthy clients — long-only asset managers, hedge funds and banks investing for their own portfolios, in Asia and Europe.

But they also drew sharp criticism from several potential institutional buyers, who said similar issues from UBS and other banks will be a tough sell.

The UBS issue is a closely-watched gauge of investor demand for subordinated deals with permanent write-down features as banks brace for tougher requirements on bank capital instruments.

“It’s clearly not an investor-friendly structure, there are lots of embedded options by the issuer and the regulator, and one is the non-viability option,” said Philippe Kellerhals, senior portfolio manager at London-based Cairn, an asset management and advisory firm.

“Another is the Basel III capital trigger: when that happens, investors in these notes get completely wiped out.”

Ratings agency Standard & Poor’s estimates banks will have to raise about trillion in capital to replace old hybrid instruments which no longer qualify as loss-absorbing under the Basel III reforms aimed at making banks more crisis-proof.

STRONG CAPITAL

Fixed-income specialists also criticised the pricing on the UBS bonds, which offer lower yield than senior notes currently on offer from Dutch cooperative Rabobank .

UBS maintained that is happy with the issue’s reception, and that investors are “comforted” by the bank’s Tier 1 capital ratio of 14.1 percent under Basel 2.5, compared with the 5 percent trigger.

“The very competitive coupon of 7.25 percent for this 10-year benchmark size offering reflects UBS’s strong capital, liquidity, and funding position,” UBS’s financial head Tom Naratil said. UBS’s capital ratios are among the strongest of European banks.

The UBS issue comes one year after Credit Suisse issued 6 billion Swiss francs (.6 billion) in so-called contingent convertible bonds, or CoCos, to existing shareholders and a further billion of CoCos publicly. These bonds aim to absorb losses by converting to equity under certain conditions.

These new types of loss-absorbing bonds are a response to tough capital rules laid out by Swiss financial regulator FINMA after the financial crisis.

Unlike Credit Suisse’s bonds, UBS’s will not convert to shares if the trigger is hit, reflecting the bank’s desire not to dilute shareholders following repeated cash calls as it struggled under the weight of more than billion in mortgage-writedowns during the subprime crisis.

UBS’s 10-year notes sold last week would trigger at a 5 percent common equity ratio.

That means the bonds would be written down permanently if the bank’s common equity Tier 1 ratio falls below 5 percent or if the bank is considered non-viable.

The Swiss regulator can trigger non-viability if it sees an impending collapse or bankruptcy of the bank.

Ratings agency Fitch assigned the notes a BBB- rating.

During the financial crisis, UBS accepted a government-backed rescue package in October 2008. Credit Suisse did not take state aid and raised capital privately. ( = 0.9107 Swiss francs)

(Editing by David Cowell)

ZURICH/LONDON (Reuters) – UBS might struggle to attract big institutional investors for more loss-absorbing bonds it wants to sell, after investors voiced distaste for the structure and price of an initial billion (1.3 billion pounds) deal announced on Wednesday.

UBS’s new bonds are designed to help bolster the bank in tough times by absorbing losses. Their value can be written down if the bank’s common equity Tier 1 ratio — a measure of financial strength — falls below 5 percent or hits non-viability.

The bank, which needs to raise a total of roughly billion to meet new capital rules, said on Wednesday it is weighing issues in other regions and currencies which are likely to exceed billion in size.

UBS attracted .5 billion of demand from investors, which UBS said included private banks — which traditionally means wealthy clients — long-only asset managers, hedge funds and banks investing for their own portfolios, in Asia and Europe.

But they also drew sharp criticism from several potential institutional buyers, who said similar issues from UBS and other banks will be a tough sell.

The UBS issue is a closely-watched gauge of investor demand for subordinated deals with permanent write-down features as banks brace for tougher requirements on bank capital instruments.

“It’s clearly not an investor-friendly structure, there are lots of embedded options by the issuer and the regulator, and one is the non-viability option,” said Philippe Kellerhals, senior portfolio manager at London-based Cairn, an asset management and advisory firm.

“Another is the Basel III capital trigger: when that happens, investors in these notes get completely wiped out.”

Ratings agency Standard & Poor’s estimates banks will have to raise about trillion in capital to replace old hybrid instruments which no longer qualify as loss-absorbing under the Basel III reforms aimed at making banks more crisis-proof.

STRONG CAPITAL

Fixed-income specialists also criticised the pricing on the UBS bonds, which offer lower yield than senior notes currently on offer from Dutch cooperative Rabobank .

UBS maintained that is happy with the issue’s reception, and that investors are “comforted” by the bank’s Tier 1 capital ratio of 14.1 percent under Basel 2.5, compared with the 5 percent trigger.

“The very competitive coupon of 7.25 percent for this 10-year benchmark size offering reflects UBS’s strong capital, liquidity, and funding position,” UBS’s financial head Tom Naratil said. UBS’s capital ratios are among the strongest of European banks.

The UBS issue comes one year after Credit Suisse issued 6 billion Swiss francs (.6 billion) in so-called contingent convertible bonds, or CoCos, to existing shareholders and a further billion of CoCos publicly. These bonds aim to absorb losses by converting to equity under certain conditions.

These new types of loss-absorbing bonds are a response to tough capital rules laid out by Swiss financial regulator FINMA after the financial crisis.

Unlike Credit Suisse’s bonds, UBS’s will not convert to shares if the trigger is hit, reflecting the bank’s desire not to dilute shareholders following repeated cash calls as it struggled under the weight of more than billion in mortgage-writedowns during the subprime crisis.

UBS’s 10-year notes sold last week would trigger at a 5 percent common equity ratio.

That means the bonds would be written down permanently if the bank’s common equity Tier 1 ratio falls below 5 percent or if the bank is considered non-viable.

The Swiss regulator can trigger non-viability if it sees an impending collapse or bankruptcy of the bank.

Ratings agency Fitch assigned the notes a BBB- rating.

During the financial crisis, UBS accepted a government-backed rescue package in October 2008. Credit Suisse did not take state aid and raised capital privately. ( = 0.9107 Swiss francs)

(Editing by David Cowell)

LONDON (Reuters) – Two Bank of England policymakers voted for a bigger stimulus to the economy in February than their colleagues could support, minutes to the Bank’s February 8-9 meeting showed on Wednesday.

The news is likely to re-open the debate about whether the central bank will add further quantitative easing in May,

especially as the minutes showed that other MPC members saw a case f or doing no further stimulus at all this month.

David Miles joined long-standing dove Adam Posen in voting for a 75 billion pound boost, whereas the remainder of the MPC supported a 50 billion pound increase to 325 billion pounds , in line with market expectations.

Miles and Posen argued there was a risk of a prolonged period of depressed demand causing inflation to fall materially below target in the medium term. Moreover, extra QE now would reduce the risk of a spiral of increasing unemployment and scrapping of capacity by firms.

However, most MPC members thought a bigger increase than 50 billion “risked sending a signal that the Committee thought the economic situation was weaker than it was.”

The MPC members who voted for 50 billion more QE were not wholly united.

“For some members … a case could be made for maintaining the stance of policy at this meeting,” the minutes said.

Both 50 billion pounds and 75 billion pounds would be sufficient to bring inflation back to its 2 percent target over the forecast horizon, the minutes said.

In its quarterly projections published last week, the central bank revised up forecasts to show inflation only just below target in two years time, at around 1.8 percent. It s growth forecast was broadly unchanged.

“Growth was likely to be volatile in the near term given the impact of one-off factors,” the minutes said, citing an extra public holiday to mark the Queen’s Diamo nd Jubilee celebrations.

“Thereafter growth should strengthen gradually, supported by a recovery in households’ real income growth and the expansionary stance of monetary policy,” the minutes said.

The MPC said there were substantial uncertainties around the path of inflation over the medium term, reiterating the position in the Inflation Report.

Upward risks included disruption to the supply of oil and gas and the risk of upward wage or price-setting behaviour

by companies against a backdrop of weak productivity growth.

“There were also risks to the downside that might result in demand growth being too weak to absorb the pool of spare capacity sufficiently.”

Last week Posen said that UK monetary policy and forecasts appeared to be on the right track. And in a speech in Glasgow late on Tuesday, deputy governor Charlie Bean forecast a return to modest growth, albeit after a sluggish first half to 2012.

TOKYO (Reuters) – Asia markets slipped on Wednesday as relief over Greece’s latest bailout turned to doubts that the debt-stricken country can keep to its austerity programme and concern about rising oil prices.

MSCI’s broadest index of Asia Pacific shares outside Japan <.miapj0000pus> eased 0.3 percent, having climbed 14 percent so far this year to rank among top asset performers.

The euro edged back from two-week highs reached after the Greek deal was announced on Tuesday.

“If you look at how much the equity market had already moved year to date, you’d expect the market to take a bit of a breather,” said Markus Rosgen, head of Asia strategy at Citigroup in Hong Kong. “Equity markets had run up quite quickly and strongly. A break is something that wouldn’t surprise me.”

“Investors are undecided whether they should buy more or wait for a pullback,” Rosgen said, adding markets were a bit overbought technically but valuations remained attractive.

Hong Kong shares <.hsi> fell 0.6 percent and Shanghai shares <.ssec> dropped 0.2 percent, with losses increasing slightly after HSBC released its China flash PMI.

The PMI showed the factory sector shrinking for the fourth month in a row.

Japan’s Nikkei average <.n225> inched up 0.2 percent to 9,477.6, but struggled for further upside momentum as investors used 9,500 as a trigger point to take profits on a 7.5 percent rise so far in 2012.

“Market sentiment continues to be positive, supported by U.S. data and the agreement in Greece, but we are at a level that requires some adjustment,” said Yumi Nishimura, senior technical analyst at Daiwa Securities.

The euro was changing hands at .3220 and struggling to make headway after slipping from near two-week highs of .3293 on Tuesday after the Greek bailout deal was clinched.

The 130 billion-euro bailout averted an imminent Greek default, but kept intact the long-term risk of a messy default and regional contagion given deep-rooted mistrust over Athens’ commitment to harsh reforms.

“Even assuming the new Greek programme proceeds as planned, the Greek crisis is far from over,” HSBC said in a report, noting the economy was in its fifth year of recession.

“Even the revised debt sustainability analysis looks optimistic and remember that Greece will still be subject to quarterly reviews, which could well mean that we are back to worrying about whether Greece will get the next tranche of funds by the summer,” it said.

European Central Bank: http://link.reuters.com/neg32s

Asset returns in 2012: http://link.reuters.com/nyw85s

Euro zone crisis: http://r.reuters.com/hyb65p

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OIL NEW CONCERN

European stocks fell on Tuesday as investors cashed in on recent rises, while U.S. stocks gave up early gains on concerns surging oil prices would hurt the economy and doubts about Greece’s future.

Oil fell in Asia after scaling nine-month highs on Tuesday on relief at Greece’s bailout news and moves by top Asian consumers — China, India and Japan — to cut crude purchases from Iran.

U.S. crude futures for April dropped 44 cents to 5.81 a barrel. The March contract, which expired on Tuesday, settled at 5.84 per barrel, the highest settlement for the front-month contract in more than nine months.

Brent crude for April delivery fell 0.4 percent to 1.19 after settling on Tuesday at a nine-month high.

Australian shares <.axjo> fell partly due to concerns that rising oil prices would hurt global growth and so undermine demand for the country’s commodities.

However, Citigroup’s Rosgen said the rise in oil prices was partly indicative of a stronger-than-expected world economy and they do not pose a risk to growth at current levels.

While central bank liquidity measures are partly blamed for fuelling a rise in commodity and energy prices, they had supported lower-rated euro zone sovereign debt markets, keeping bond yields of struggling Italy and Spain on a downtrend.

In credit markets, a pause in risk taking pushed spreads on the iTraxx Asia ex-Japan investment-grade index wider by 3 basis points on Wednesday.

(Additional reporting by Mari Saito in Tokyo; Editing by Neil Fullick)

NEW YORK (Reuters) – U.S. stocks retreated on Tuesday, undermined by rising oil prices and doubts about the success of Europe’s second bailout package for Greece, but earlier the Dow Jones industrial average rose above 13,000 for the first time in nearly four years.

The euro was little changed late in the day after hitting nearly two-week highs against the U.S. dollar overnight on news European finance ministers approved the Greek bailout plan, avoiding the threat of a disorderly debt default.

The Dow has gained more than 6.0 percent so far this year, while the broad Standard & Poor’s 500 Index is up more than 8.0 percent year-to-date.

“We’re running into some minor selling pressure given the extent of the rally we’ve seen,” said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

The Dow Jones industrial average <.dji> was down 4.92 points, or 0.04 percent, at 12,944.95 near the market close. The Standard & Poor’s 500 Index <.spx> was down 1.93 points, or 0.14 percent, at 1,359.30. The Nasdaq Composite Index <.ixic> was down 14.05 points, or 0.48 percent, at 2,937.73.

High oil prices also gave investors reason to sell stocks, as U.S. crude oil prices closed at a 9-month high on Iran supply worries.

U.S. March crude, which expires at the close of floor trading on Tuesday, settled up .26 at 5.50, after earlier hitting 6.07, the highest intraday since May 5.

The euro rose and then retreated against the dollar after Europe finally sealed a rescue deal for Greece, prompting investors to pare positions against the single currency despite doubts about the deal’s implementation.

The euro traded down 0.1 percent at .3231. Earlier, it hit a session high of .3292 in the overnight session.

“Being short the euro is a stale position right now,” said Douglas Borthwick, managing director and head of trading at Faros Trading in Stamford, Connecticut. “Many had questioned whether or not Greece would stay in the EUR, but last night’s decisions were a resounding vote of yes.”

After 13 hours of talks, euro zone ministers agreed on the Greek deal early Tuesday by forcing Athens to commit to unpopular budget cutbacks and getting private bondholders to accept deeper losses on their holdings.

European shares ended lower in thin volume, with investors cashing in on recent highs, after the bailout failed to soothe concerns about the future of the euro zone’s most troubled country.

While the agreement averted the danger of a disorderly Greek default, the country faces further political and economic hurdles.

The FTSEurofirst 300 index <.fteu3> of pan-European shares fell 0.5 percent to 1,085.38 points, retreating after a two-day winning streak fuelled by expectations the Greek bailout deal was imminent.

The MSCI world equity index <.miwd00000pus> slipped by 0.4 percent, but is still more than 10 percent higher for the year to date.

U.S. Treasury prices fell after the Greek bailout dented appetite for safe-haven assets. However, concern over how Athens implements the painful austerity measures moderated losses.

The benchmark 10-year U.S. Treasury note was down 14/32 in price to yield 2.05 percent.

While the bailout for Greece averts a disorderly default next month, which potentially could have disrupted financial markets worldwide, it left major doubts over the prospects for implementation given looming elections in April and rising social unrest on the streets of Athens.

“Greece is increasingly trapped in a vicious circle where ever more austerity comes with an ever higher price tag on growth. Consequently, implementation risk will remain high,” analysts at French bank Societe Generale said in a note.

(Additional reporting by Julie Haviv; Editing by Leslie Adler)

Britain’s public finances showed their biggest surplus for four years in January, boosted by higher tax revenues and by government austerity measures official data showed on Tuesday.

The public sector net borrowing measure registered a surplus of £7.8 billion (9.3 billion euros, .3 billion) last month, the Office for National Statistics said in a statement.

That was the biggest surplus since January 2008 and compared with a surplus of £5.2 billion in January 2011.

Market expectations had been for a surplus of £6.4 billion according to analysts polled by Dow Jones Newswires.

Britain’s public finances usually log a surplus in January because they are lifted by annual taxation receipts.

“The public finances saw clear improvement in the key month of January compared to a year earlier which adds to the recent better news of the economy,” said IHS Global Insight economist Howard Archer.