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Netanyahu May Name Nationalist Leader as Foreign Minister

Israel’s prime minister-designate, Benjamin Netanyahu ’75, forged ahead on Monday with negotiations toward a probable narrow, hawkish government after his conservative Likud party initialed its first coalition agreement with the nationalist Yisrael Beitenu party led by Avigdor Lieberman.

If finalized, the agreement, reached late Sunday, could make Lieberman, an often indelicate and outspoken politician whose threatening language aimed at Arabs arouses suspicion and some trepidation abroad, the next foreign minister.

The attention of many Israelis was focused on Cairo, however, where Israeli negotiators were trying Monday to reach a deal with Hamas, the militant group that governs Gaza, for the release of a captured Israeli soldier, Cpl. Gilad Shalit.

The latest attempt appeared to have failed. In a statement issued Monday night, the office of the departing Israeli prime minister, Ehud Olmert, said that Hamas had hardened its position during the talks and raised extreme demands, despite what were described as generous proposals from Israel.

A senior Hamas official, Moussa Abu Marzouk, suggested that there had been progress in the talks and that his group was awaiting a positive Israeli response to its demands.

The Israeli negotiators, dealing indirectly with Hamas through Egyptian mediators, were hoping to reach an agreement before Olmert ends his term. Olmert called a special Cabinet meeting for Tuesday to brief ministers on the talks.

Shalit’s family has expressed concern about leaving his fate in the hands of the incoming government, fearing that it might start studying the case from scratch. A rightist government may also take a harder line in any further negotiation.

The Likud and Yisrael Beitenu parties have both expressed a preference for a broader unity coalition that would include the centrist Kadima party, which is led by the departing foreign minister, Tzipi Livni. Yisrael Beitenu has agreed to make changes in its coalition agreement should Kadima join, and in that case, the job of foreign minister would probably be reassigned.

U.S. and European Officials Discuss Detainees

Top officials of the Obama administration met Monday with a delegation from the European Union and promised to provide information on Guantanamo prisoners when U.S. officials begin asking European countries to accept specific detainees for resettlement.

Both sides said the sessions, the first of their kind since the administration took office, were a productive beginning toward defining a European role in helping the United States meet the president’s goal of closing the prison at Guantanamo Bay, Cuba, within a year of his taking office.

Jacques Barrot, a European Union vice president who led the delegation, said the Europeans had made it clear that to accept detainees, European countries would need complete information on the prisoners. “Otherwise we cannot accept that responsibility,” he said.

A statement from the Justice Department said that Attorney General Eric H. Holder Jr. had pledged to provide information so that European countries could “make their own determinations” and acknowledged that closing Guantanamo was “a complex issue.”

The Obama administration has said that about 60 detainees who cannot be returned to their home countries for humanitarian or other reasons could be resettled in Europe, but some European officials have expressed concerns about possible security risks and about whether U.S. intelligence agencies will share complete information about the prisoners.

State Street CEO’s $29M Reward May Cause Fireworks

State Street Corp.’s chief executive, Ronald E. Logue, will probably have to defend his nearly $29 million in compensation before shareholders at the annual meeting in May, a Wall Street analyst said Monday, because of the company’s ailing stock price and recent financial stumbles.

Banking analyst Nancy Bush said State Street’s near-term prospects have been hurt by billions of dollars in potential losses on debt investments that could result in write-offs, and its image as a cautious financial manager has been tarnished.

The bank’s shares have plunged 71 percent since March 2008 — more than those of its two closest rivals in the business of managing money and handling accounting and other services for pensions, mutual funds, and other large investment clients.

“That has to be laid at Ron Logue’s feet,” Bush said.

Logue’s total compensation in 2008 was valued at $28.7 million, slightly more than in 2007, according to the company’s proxy statement, filed late Friday.

At his request, Logue did not receive a bonus or incentive pay for the year. But with stock awards from prior years and a $7.8 million increase in the value of his deferred pension benefit, Logue’s total pay rose slightly.

In October, State Street became one of the country’s first institutions to receive US taxpayer funds — $2 billion, as part of the then-Bush administration’s effort to bolster the financial sector.

In January, when State Street reported its earnings, its shares lost more than half of their value. The company reported $9 billion in unrealized losses on its books, in investment securities and in its commercial paper program.

By comparison, Bank of New York Mellon Corp. shares have dropped 43 percent over the past year, while another competitor, Northern Trust Corp., has seen its shares slide 12 percent over the same period.

State Street shares closed Monday at $23.12, up 2 percent for the day.