US embassy staff evacuated as Muhammad film protests spread

Workers in Khartoum and Tunis advised to leave.

The US has withdrawn non-essential staff from its embassies in Sudan and Tunisia, the Associated Press has reported. The move follows protests in Muslim-majority countries this weekend, galvanised by an anti-Islamic film made in the US. While some of the demonstrations have been peaceful, protestors have reportedly been killed and wounded in clashes with police in Sudan. Earlier this week, the US ambassador to Libya was killed, along with three others, in the eastern city of Benghazi.

Many demonstrators have referenced the film "Innocence of Muslims", made by a Christian group in America, but there are suggestions that some unrest had planned before the release of the film.

The Guardian's Julian Borger reports:

US officials have said they believe outrage over the film may have been used by an extremist Libyan group, Ansar al-Sharia, as cover and a diversion for an assault on the Benghazi consulate that had been long planned for the 11th anniversary of the 11 September attacks. The president of the Libyan assembly, Yousef al-Megariaf, agreed. During a visit to Benghazi, he described the storming of the consulate as "pre-planned to hit at the core of the relationship between Libya and the United States". Small anti-American demonstrations in Damascus and Tehran appeared to have been facilitated by the authorities there.

So far, protests have been reported in Tunisia, Iraq, Pakistan, Bahrain, Iran, Syria, Egypt, Turkey, Yemen, Jordan, Sudan, Palestine and India, with smaller demonstrations in Western countries such as Australia and Britain. 

In Tunisia, cars outside the US embassy in Tunis were set on fire and protesters scaled its walls.

In Khartoum, Sudan, the German embassy was torched, and its diplomats took refuge in the British embassy next door. The foreign secretary, William Hague, said: "Sudanese police attended the scene, but demonstrators were able to break down a perimeter wall and cause minor damage to the compound. They did not attempt to gain access to the British embassy building."

Protesters also attempted to smash the windows of the US embassy:

In Iran, Israeli flags were burned alongside US ones, and women held up anti-Jewish placards:

There were similar scenes in Kut, Iraq:

In Cairo, Egypt, stones were thrown at riot police during clashes near the US embassy. The Muslim Brotherhood withdrew calls for nationwide protests, saying they would instead participate in a "symbolic demonstration".

In Srinagar, in the Kashmir Valley, demonstrations entered their second day today. The video sharing website YouTube has blocked access to the film in India in the hope of restraining the violence.

In Sanaa, Yemen, the US embassy was targeted and security forces fired warning shots and tear gas to disperse the crowds:

In Turkey, prime minister Recep Tayyip Erdogan told protesters that the film should not be used as a pretext for violence, as anti-US slogans were chanted in Beyazit Square in Istanbul:

In Sydney, Australia, there was a small demonstration outside the US Consulate General:

In Palestine, protesters shouted slogans after Friday prayers at Al-Aqsa mosque in Jerusalem:

In Britain, an American flag was burned in front of the US embassy in London:

(All photos: Getty Images)

In Khartoum, protesters targeted the German and US embassies. Photo: Getty
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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation