Peugeot Citroen Hit By Record £4.29bn Loss

Embattled French car firm Peugeot Citroen has made a loss of 5bn euros (£4.29bn) for 2012, the worst result in its history.

But France's number one automaker said it had built the foundations for recovery after cleaning up its balance sheet and implementing a tough restructuring plan.

Peugeot blamed the results on a previously announced 4.7bn euro (£4bn) asset writedown last year and the crisis in the European car market.

The loss compared with a profit of 588mn euros (£505m) in 2011, while revenue for the year fell 5.2% to 55.4bn (£47.6bn) euros.

The results "reflect the deterioration of the automotive industry environment in Europe," chief executive Philippe Varin said in a statement.

But he added: "The foundations for our rebound have been laid."

According to What Car? editor-in-chief Chas Hallet, the firm suffers from combination of problems.

"Peugeot Citroen is losing out in several ways. For a start, its models mainly compete with each other, which makes little sense," Mr Hallet told Sky News.

"It is being undercut on price and quality by rivals, including the incredibly strong Korean makers. And unlike many of its rivals it does not sell cars globally and so take advantage of the scale that provides.

"Furthermore, it can't really compete with the might of the VW group, in Europe or anywhere else."

The results were worse than forecast by analysts and overshadowed the previous record loss of 1.2bn euros (£1bn) in 2009.

Net debt stood at 3bn euros (£2.5bn), the company said.

On Monday, the European Commission authorised France to shore up Peugeot temporarily to the tune of a six-month 1.2bn euro guarantee.

Peugeot Citroen, which has a strategic tie-up with General Motors (GM) of the US - itself bailed-out by the Obama administration - is in the midst of a restructuring involving deep job cuts.

Markets reacted positively to the balance sheet announcement, with shares up 5% in early trading.

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Afghanistan Nato Air Strike 'Kills Children'

A Nato air strike on a Taliban hideout in Afghanistan has killed nine women and children, local officials say.

"Five children, four women and a man were killed in the raid," said Kunar provincial governor Sayed Fazulullah Wahidi.

A spokesman for Nato forces said they were investigating the allegations.

Three Taliban commanders, including a notorious al Qaeda-linked militant leader called Shahpoor, were also killed in the raid, district governor Abdul Zahir said.

The air raid was in support of a ground operation by US-led coalition and Afghan forces in a Taliban-controlled valley in the insurgency-plagued region, Mr Zahir said.

"The civilians were killed in the air raid," he said.

It is not clear if the owner of the house targeted was a member of the Taliban or a civilian, but the Taliban were visiting when the home was attacked, Mr Zahir added.

Four other children were wounded in the raid, Mr Wahidi said.

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Pregnant Kate: Now Oz Mag To Show Pictures

By Jonathan Samuels, Australia Correspondent

An Australian publication has followed the lead of the Italian gossip magazine Chi and said it will publish photographs of the pregnant Duchess of Cambridge in her bikini.

The weekly magazine Woman's Day will be on sale on Monday and will feature the pictures of Kate and William's Caribbean holiday, where the duchess was snapped wearing a blue bikini and strolling on a beach.

Editor Fiona Connolly has defended her decision to publish the prints, telling Sky News: "The photos are what our readers want to see. Kate looks beautiful, glowing and healthy."

Ms Connolly said it was her understanding that the photographs were taken by a member of the public rather than "a photographer hiding in the bushes" and, as a result, were not an invasion of the royal couple's privacy.

The editor said the pair had been mingling with others on a public beach and would have been aware that there were other holidaymakers around with cameras.

The issue will also feature pictures of Kate's sister Pippa Middleton, who was holidaying with the royals on the island of Mustique, staying in a £5.1m villa.

Ms Connolly said the photographs show Kate "fabulous, fit and glowing, out and about on a public beach".

She said British journalists and picture editors would no doubt be "frustrated" that they were not also running the pictures because of the "gentleman's agreement" between editors and the royal family about what sort of photos would be published.

Kate was on holiday in Mustique with her husband William and sister Pippa

"As a magazine that does publish photos of the royals, I am sensitive to the sort of pictures that shouldn't be published," she said, referring to the 2012 topless shots of the duchess that appeared in various magazines.

"These are certainly not photos that they would disapprove of - they are happy."

"The last time we saw Kate looking really unwell, coming out of hospital and at a really tough time for her in her pregnancy - to see these photos where she's fit and healthy and really glowing is even more reason to celebrate."

The couple are expecting their first child in July.

In December Kate was admitted to hospital with a severe form of morning sickness, which pushed the couple to announce the pregnancy.

The news that an Australian magazine is publishing the pictures comes at a particularly sensitive time, just two months after a pair of Australian radio presenters made a prank call to King Edward VII's Hospital in London where Kate was being treated.

Pretending to be the Queen and Prince of Wales they were able to speak to a nurse about her condition. The nurse who put the call through, Jacintha Saldanha, subsequently committed suicide.

On news that Chi was publishing the photos St James's Palace issued a statement saying: "We are disappointed that photographs of the Duke and Duchess on a private holiday look likely to be published overseas.

"This is a clear breach of the couple's right to privacy."

Ms Connolly admitted the bidding for the photos between several of Australia's biggest selling weekly gossip magazines was "furious".

Last year the royal family launched legal action against French magazine Closer, over paparazzi pictures of Kate sunbathing in bikini bottoms on the balcony of a private chateau in the South of France.

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Pope In First Outing Since Resignation

The Pope has made his first appearance in public since the shock announcement of his resignation on Monday.

Benedict XVI received a lengthy standing ovation when he entered a packed audience hall in the Vatican, with applause from the audience, many of whom had tears in their eyes.

He repeated in Italian what he had told cardinals on Monday in Latin - that he simply did not have the strength to continue.

"I did this in full liberty for the good of the church," he said, asking supporters"to continue to pray for the pope and the church."

Later, the Pope will celebrate an Ash Wednesday mass in St Peter's Basilica, his last public mass and one of his last engagements as Pope.

The mass is traditionally held in the Santa Sabina Church on Rome's Aventine Hill.

On this occasion, however, it has been moved, out of respect for the outgoing pontiff and to accommodate the crowd of pilgrims who will want to mark the end of his eight-year rule - one of the shortest in the Church's modern history.

"It will be an important concelebration, and the last led by the Holy Father in San Pietro," Vatican spokesman Federico Lombardi said.

Key cardinals are expected to attend as the papal conclave begins gathering in Rome to elect the next head of the world's 1.2 billion Roman Catholics.

No date has yet been set for the secret conclave, which will meet in the Sistine Chapel under Michelangelo's famous ceiling frescoes, but it could come within days of Pope Benedict's resignation.

Father Lombardi says he expects a new pope to be in place in time for Easter, which falls on March 31 this year. Secretary of State Tarcisio Bertone will govern the Church during the transition.

Candidates for the Vatican's top job will join bishops, monks, friars and pilgrims for the Ash Wednesday celebrations, during which the Pope anoints the foreheads of the faithful with ashes. The ceremony launches a period of penitence before Easter in the Christian calendar.

Pope Benedict's decision to step down - making him the first pontiff in 700 years to resign simply because he cannot carry on - sparked a flurry of rumours over his health, fed by revelations that he had had an operation to replace the batteries in his pacemaker three months ago.

Some observers saw his decision as a bid to avoid the fate of his predecessor John Paul II, whose drawn-out and debilitating illness was played out on the world's stage.

But Father Lombardi insisted: "The Pope is well and his soul is serene. He did not resign the pontificate because he is ill but because of the fragility that comes with old age."

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Pope Resigns: Frontrunners Emerge For Role

The Pope: What Happens Next?

Updated: 3:13pm UK, Monday 11 February 2013

Whenever a pope dies or abdicates, their successor is drawn from the cardinals - the senior Roman Catholic bishops who normally assist the Pope in the Vatican or head up the various dioceses around the world.

He is chosen by a group of cardinals called the Cardinal Electors, who are all the cardinals under the age of 80.

Normally, between 15 and 20 days after the death of a pope, the Cardinal Electors must meet and start to decide who takes over.

The election process always takes place in secret in the Sistine Chapel, in the Vatican, in a meeting called a conclave.

In 1970 Pope Paul VI determined that the college of cardinals was to be limited to 120. He also ordered measures to prevent bugging of the proceedings.

In the period between when a pope dies or resigns and a new pope is chosen, the temporary head of the Roman Catholic Church is the Cardinal Camerlengo, the chief administrator of the church's property and wealth.

The cardinals must take an oath of secrecy when they enter the conclave. The penalty for breaking the oath is automatic excommunication.

In order to prevent a deadlock, which happened in the 13th century, the cardinals are traditionally locked up and given only bread and water as a means of inducing them to draw the proceedings to a close. They are only given a doctor and a cook to assist them.

Ballot papers are distributed and each of the Cardinal Electors writes the name of the cardinal he would like to become the Pope, and in the process pledges he is voting for "the one under God" he thinks "ought to be elected".

The ballot papers are then folded and placed on a plate, on top of a chalice, that has been placed on an altar.

The plate is used to prevent a cardinal attempting to put two or more ballot papers in without those supervising being able to see.

When a vote has been checked to make sure it is correct, it is allowed to fall into the chalice.

Before they are unfolded, the ballot papers are counted to make sure they add up to the number of Cardinal Electors. If the number is different, all the ballot papers are burnt and the process is repeated.

If the number of ballot papers is correct, each vote is read aloud and is pierced with a needle and  threaded on to a string.

Four ballots are held each day, two in the morning and two in the evening. The process is repeated until one cardinal emerges with a majority of two thirds.

Every time a vote takes place, the ballots are burned and smoke appears out of the chimney of the Sistine Chapel, telling the world a vote has been held.

If the vote has been unsuccessful, a black dye is put in with the ballot papers so black smoke emerges, informing the world a decision has not been made.

When a new pope is finally successfully elected, the ballot papers are burned without the dye so white smoke emerges, confirming the decision.

When Pope Benedict XVI was chosen, church bells were also rung to signal a new pope had been elected.

Before 1978, within a couple of days of the Pope's election, a Papal Coronation would have been held with a huge procession leading from the Vatican. The coronations have not taken place since Pope John Paul II was elected.

The vast majority of popes have been Italian and until the election of Pope John Paul II, who had previously been Polish Cardinal Karol Wojtyla, the last non-Italian pope had been Pope Adrian VI from the Netherlands who was elected in 1522.

There have been previous resignations of popes but the last one was in 1415 when Pope Gregory XII resigned in order to end a schism in the Roman Catholic Church.

Before resigning, he formally convened an official church council and authorised it to elect his successor.

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Bali: Lindsay Sandiford Fights Death Penalty

By Jonathan Samuels, Sky News Correspondent

A British woman has started an appeal against the death sentence she received in Indonesia for smuggling cocaine worth £1.6m into the resort island of Bali.

Lindsay Sandiford, a grandmother from Cheltenham. Gloucestershire, co-operated with the police and local authorities after her arrest last year, actions which led to other arrests being made.

Her lawyer, though, says this was not taken into account by the three judges sentencing her.

In the appeal filed to the Indonesian higher court, Sandiford's lawyer Fadillah Agus said: "She has acknowledged that she did that crime, but the punishment was not fair and out of proportion."

He said she had expressed regret and apologised and "her co-operation with the police led to the arrests of the other suspects".

Lindsay Sandiford claims she was forced to smuggle drugs by a criminal gang

Sandiford, 56, was arrested in May 2012 at Bali airport when customs officers found almost 5kg (10.6lb) of cocaine in her luggage. She claimed she had been forced to smuggle the drugs into Bali from Thailand by a criminal gang.

Prosecutors announced in December that they would be recommending a 15-year prison sentence after she agreed to co-operate in a sting operation in which police swooped on four other suspects alleged to be her accomplices, including Britons Rachel Dougall, Julian Pounder and Paul Beales.

However, in January she was sentenced to death by firing squad. Dougall, Pounder and Beales have all received sentences ranging from one to six years.

Sandiford, originally from Redcar, Teeside, claims she was forced to transport the drugs by gang members who were threatening to hurt her children.

Paul Beales, Rachell Dougall and Julian Ponder all received jail sentences

"However, her role as a justice collaborator was not taken into account by the district court," Mr Agus said. "Rather, she was sentenced to death while those masterminds and actual owners of the cocaine received lighter sentences."

The High Court in London last month dismissed a case Sandiford filed against the British Government, saying it did not act unlawfully when it refused to fund her appeal.

Indonesia has very strict anti-drug laws and most of the more than 40 foreigners on its death row were convicted of drug offences.

The country has not executed anyone since 2008, when 10 people were put to death, leaving 113 prisoners remaining on death row. Officials have said several executions are expected this year.

A response to Sandiford's appeal could take up to a month and a half.

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North Korea Confirms 'Successful' Nuclear Test

North Korea has confirmed it has carried out a third nuclear test after monitoring agencies reported an "unusual seismic event".

"A third nuclear test has been successfully staged," the North's state-run Korean Central News agency said.

"The nuclear test was conducted as part of measures to protect our national security and sovereignty against the reckless hostility of the United States that violated our republic's right for a peaceful satellite launch."

At just before midday local time, an earthquake with a magnitude of 4.9 was detected just north of a site where Pyongyang conducted earlier nuclear tests.

The two previous tests, in 2006 and 2009, prompted quakes of 3.6 and 4.5 respectively.

An activist defaces a poster of Kim Jong-un and his wife Ri Sol-ju

The South Korean defence ministry, which raised its military alert level after the quake, said the blast had an explosive yield of between six and seven kilotons (kt) and was of "enormous destructive power".

In comparison, the nuclear weapons detonated above Hiroshima and Nagasaki in 1945 carried estimated yields of 15kt and 22kt respectively.

A spokesperson for the UN boss Ban Ki-moon said: "The Secretary-General condemns the underground nuclear weapon test conducted by the Democratic People's Republic of Korea today.

"It is a clear and grave violation of the relevant Security Council resolutions."

A Japanese seismic official shows where the blast occurred

Tibor Toth, the executive secretary of the Preparatory Commission for the Comprehensive Nuclear Test Ban Treaty Organisation (CTBTO), said the event's location was "roughly congruent with" nuclear tests carried out by North Korea in 2006 and 2009.

"This act would constitute a clear threat to international peace and security, and challenge efforts made to strengthen global nuclear disarmament and non-proliferation, in particular by ending nuclear testing," he added.

China expressed its "firm opposition" to North Korea's nuclear test, saying its wayward ally had gone ahead with the blast "despite widespread opposition from the international community".

"We strongly urge the DPRK to honour its commitment to denuclearisation, and not to take any actions which might worsen the situation," the foreign ministry said in a statement posted on its website.

A North Korean soldier stands guard after the test

US President Barack Obama said the test posed a threat to international peace and security.

The UN Security Council will hold urgent talks on the blast at 2pm UK time.

The Foreign and Commonwealth Office said: "The UK will begin urgent consultations with Security Council partners calling for a robust response to this latest development."

Mr Obama said the US will "continue to take steps necessary to defend ourselves and our allies" and it will work with other nations "to pursue firm action".

Protesters in Seoul shout anti-North slogans

He added that North Korea's action "warrants further swift and credible action by the international community".

Foreign Secretary William Hague said: "North Korea's development of its nuclear and ballistic missile capabilities poses a threat to international and regional security.

"Its repeated provocations only serve to increase regional tension, and hinder the prospects for lasting peace on the Korean peninsula."

The Russian foreign ministry said: "By implementing a new nuclear test, Pyongyang once again ignored the rules of international law and has shown disregard UN Security Council resolutions.

South Korean troops march along the demilitarised zone at the 38th parallel

"There is an urgent need to create an effective system of regional peace, which would be based on the principle of undiminished security for all participants in accordance with multilateral commitments on denuclearisation of the Korean peninsula."

Japan said the test was a "grave threat" that "cannot be tolerated".

After the blast took place a North Korean newsreader urged the Korean People's Army (KPA) to prepare for combat against its foes.

She stressed that if an order was given "the KPA should blow up the stronghold of aggression at a strike".

"And wipe out the brigandish US imperialists and South Korea puppet army to the last man and thus accomplish the historic cause of national reunification."

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Ryanair: EU Blocks Aer Lingus Merger

Budget airline Ryanair has said the European Commission (EC) intends to prohibit its proposed merger with smaller Irish rival Aer Lingus.

The budget airline said the decision is a political one that is not based on competition law.

The company said a statement: "Ryanair... was notified this (Tuesday) morning at a state-of-play meeting with the EU Commission, that the EU Commission intends to prohibit Ryanair's offer for Aer Lingus, despite the fact that Ryanair has met every competition concern raised in the EU's statement of objections and during the review process."

The EC said it would launch a detailed investigation into Ryanair's bid in August.

Ryanair has already attempted to gain control of Aer Lingus twice but ran into opposition from the EC and the Irish government on both occasions.

It already owns 29.82% of the Irish airline.

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Russia Coal Mine Explosion Kills 16 Miners

By Katie Stallard, Moscow Correspondent

Sixteen miners have died and two are thought to be trapped underground after an explosion at a coal mine in northern Russia.

Rescue teams are attempting to reach the men at the Vorkutinskaya mine in Vorkuta, Komi region, around 1,160 miles northeast of Moscow.

A ministry spokesperson told Sky News a methane explosion was reported at the mine at 10.28 local time this morning.

She said a plane carrying medical personnel would be dispatched to the region from Moscow.

The Russian prime minister, Dmitry Medvedev, has asked for a report on the situation and urged help for the miners' families.

The mine belongs to a division of Severstal, one of Russia's largest steel producers.

"Our rescue team has only just gone out to the mine," said Yevgeny Sukharev, a spokesman for Vorkutaugol, a coal supplier for Severstal.

"Clearly, an incident has occurred, but we cannot yet say exactly what happened and what scale (it is on)," he added.

Russian state TV said the families of those killed in the explosion would receive two million rubles, around £42,000, in compensation.

The mine in the northern city of Vorkuta has been working since 1973. 

According to its website, it won a corporate award in 2011 for "worthy working conditions - the basis for respect in the work force".

Once the powerhouse of the Soviet economy, Russia's coal mines have a poor safety record, with frequent accidents reported despite recent efforts to improve conditions.

Last month four workers died in an explosion at a mine in western Siberia.

In 2010, 68 people were killed in two methane blasts at Russia's biggest underground coal mine, the Raspadskaya mine in Siberia.

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Pope Benedict Resigns, Vatican Confirms

Pope Benedict XVI is to resign on February 28 due to his "deteriorating" health.

He will be the first head of the Roman Catholic Church to resign in almost 600 years, with his departure expected to leave the post vacant for around three weeks.

The 85-year-old German's resignation letter said: "After having repeatedly examined my conscience before God, I have come to the certainty that my strengths, due to an advanced age, are no longer suited to an adequate exercise of the Petrine ministry.

"I am well aware that this ministry, due to its essential spiritual nature, must be carried out not only with words and deeds, but no less with prayer and suffering.

"However, in today's world, subject to so many rapid changes and shaken by questions of deep relevance for the life of faith, in order to govern the bark of Saint Peter and proclaim the Gospel, both strength of mind and body are necessary, strength which in the last few months, has deteriorated in me to the extent that I have had to recognise my incapacity to adequately fulfil the ministry entrusted to me."

He will step down after almost eight years in the post, having been elected in April 2005.

The Vatican

Speaking at a hastily-arranged news conference, Vatican spokesman Federico Lombardi said: "The pope caught us a bit by surprise.

"We should have a new pope for Easter."

He told reporters a conclave could be held within 15 or 20 days of the resignation - and insisted Pope Benedict XVI was not stepping down because of any difficulties in the papacy.

Pope Benedict will head to his residence outside Rome, Castel Gandolfo, then back to Rome to live in a monastery of cloistered nuns on the Vatican hills.

Mr Lombardi added that the pope's vigour had "sadly diminished in recent times", but praised the pontiff's "humility and great honour".

The pope's brother, Georg Ratzinger, said the pontiff had been advised by his doctor not to take transatlantic trips for health reasons - and that he had been considering resigning for months.

He said his brother was having increasing difficulty walking and that his resignation was part of a "natural process."

The pope on his visit to the UK in 2010

His age is weighing on him," the 89-year-old said of his 85-year-old brother. "At this age my brother wants more rest."

The final post on Pope Benedict XVI's Twitter page, sent on Sunday, said: "We must trust in the mighty power of God's mercy. We are all sinners, but His grace transforms us and makes us new."

Archbishop Vincent Nichols, the head of the Catholic Church in England and Wales, said: "Pope Benedict's announcement today has shocked and surprised everyone. Yet, on reflection, I am sure that many will recognise it to be a decision of great courage and characteristic clarity of mind and action.

"The Holy Father recognises the challenges facing the Church and that "strength of mind and body are necessary" for his tasks of governing the Church and proclaiming the Gospel. I salute his courage and his decision."

Cardinal Keith O'Brien, leader of the Catholic Church in Scotland, said: "Like many people throughout the world, I was shocked and saddened to hear of the decision by Pope Benedict XVI to resign.

"I know that his decision will have been considered most carefully and that it has come after much prayer and reflection."

Sky News Foreign Affairs Editor Tim Marshall said: "Seven years as pope is not very long.

"Last time, there was a lot of speculation that it was time for the first black pope. What Pope Benedict has done in recent years is to pack the ranks of the Vatican with lots of Europeans."

The last pope to resign was Pope Gregory XII, who stepped down in 1415 in a deal to end the Great Western Schism among competing papal claimants.

While there are several papal contenders, there is no obvious front-runner to take over - which was also the case when Benedict was elected pontiff in 2005 after the death of Pope John Paul II.

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