George Osborne, Britain's chancellor of the exchequer, told the House of Commons that austerity would continue until 2018, longer than he had hoped. The government is struggling with stubbornly high debt and a very weak economy. Mr Osborne announced further cuts to benefits, but he surprised markets by reducing corporation tax by one percentage point, to 21%. See article Pier Luigi Bersani won a clear victory in a contest for the leadership of Italy's centre-left Democratic Party. Meanwhile Silvio Berlusconi's disintegrating centre-right party could not agree on a programme, or on who will lead it in an election that is expected in the spring. Ukraine's prime minister, Mykola Azarov, and his cabinet resigned, just ahead of talks with the IMF over financial assistance. It was unclear whom the president, Viktor Yanukovych, would appoint to lead a new government. Borut Pahor, a former prime minister of Slovenia, won the country's presidential run-off election against Danilo Turk, the incumbent. During and after the election Slovenians took to the streets to denounce the political elite and alleged government corruption. Plans to create a banking union in the euro zone ran into trouble after Germany warned against moving too quickly. Another meeting is to be held on December 12th, just before the next European summit. Angela Merkel, Germany's chancellor, opened her campaign for re-election next September. Delegates from her Christian Democratic Union elected her to a seventh term as party leader with a record 98% of the vote. Deficient on the deficit The Republicans in Congress put forward a counter-offer to the White House's proposals to avoid painful tax rises and spending cuts that are due to take effect at the start of 2013. The Republicans made some minor concessions to avert the "fiscal cliff" but insisted the rich should not see their taxes rise, a key sticking point. The White House said the offer "includes nothing new." Clerical workers went back to work at the Los Angeles-Long Beach port complex after a week-long strike. The dispute, over the outsourcing of clerical jobs, had shut down most of the terminals at America's busiest container port. Reaching out Enrique Peña Nieto took office as Mexico's president. He promised speedy reforms of tax, energy, television and education and secured a wide-ranging pact in which all three main parties pledged to implement them. The leader of a landless peasant movement in Paraguay was murdered by two gunmen. Eleven of his followers and six police died in a disputed incident in June that precipitated the impeachment of the country's leftist president, Fernando Lugo. Colombia's army said it had killed at least 20 FARC guerrillas in the deadliest military operation since peace talks began in October. The government has rejected a temporary ceasefire by the FARC. President Juan Manuel Santos wants the negotiations to conclude by November 2013. In its annual survey of perceptions of corruption, Transparency International, a Berlin-based watchdog, found that Venezuela was the most corrupt country in Latin America; Chile was the least corrupt in the region. Morsi's mischief There were rowdy and bloody demonstrations in Egypt as liberals and secularists rallied en masse in Cairo and other cities. They were opposed to a decree by Muhammad Morsi, the Islamist president, that gives him wideranging if temporary extra powers. Mr Morsi's supporters held large counter-demonstrations. The president seemed determined to hold a referendum quickly on his proposed new constitution, which his opponents say will be too Islamist. Israel thumbed its nose at the UN General Assembly's vote to recognise Palestine as a non-member observer state, by pushing ahead with plans to build 3,000 settler homes on part of the West Bank that would cut across any future sovereign Palestinian state. NATO approved a request by Turkey to send Patriot anti-missile batteries to defend its border with Syria. After reports that the Syrian regime was moving chemical weapons around the country, Barack Obama warned the Assad regime that any use of such weapons would be "totally unacceptable" and would result in "consequences." Meanwhile, increasingly confident rebel forces, armed with weapons captured from military bases, were preparing for a battle for Damascus. Kuwait held a general election, but a boycott by the opposition calling for more democracy saw turnout drop to 40%. Two of the rebel groups that took over the northern half of Mali earlier this year - a Tuareg one and an Islamist movement with ties to al-Qaeda - said that they accepted the unity of the country and would negotiate with the government. The Economic Community of West African States (ECOWAS), the region's influential club, had pledged to use force to roll them back. A rebel army in eastern Congo, known as the M23, retreated from Goma, the area's biggest city, 11 days after capturing it. The M23 were under pressure from Rwanda and Uganda, neighbouring countries that had been backing them. Some day trading India's government won a crucial vote in Parliament on its controversial plans to open the retail sector to foreign competition. The government says the reforms are needed to revive the slowing economy. Opposition parties say allowing foreign supermarket chains will put small shops out of business. The death toll from a storm that hit the southern Philippines rose to more than 325, with hundreds still missing. Rescuers had difficulty reaching isolated areas on the island of Mindanao that have been devastated by Typhoon Bopha. The UN's senior humanitarian official described conditions for displaced Muslim Rohingyas in Myanmar as "dire." Valerie Amos called on the Burmese government to act after she visited camps in western Myanmar. More than 135,000 people, mostly Rohingyas, who were uprooted during six months of ethnic conflict, are living in camps in Rakhine state.