New Europe Print Edition Issue 1005

NEWEUROPE19th Year of Publication | Number 1005 | 4 - 10 November , 2012 | € 3.50 www.neurope.eu

The US election is looking tighter thanever, with Barack Obama moving from astrong lead down to a tenth of a percent-age point over his rival. Of course, the election could again bedecided by a Florida court, but there is oneman in Brussels who is counting on anObama victory.

Key to the re-election of Barak Obamamay prove the tobacco farmers vote in sev-eral states.

Large numbers of tobacco producers areconcentrated in North Carolina, whereone of the world’s major cigarette manu-facturers, R. J. Reynolds, have their head-quarters in Winston-Salem but also in thevery critical State of Kentucky but also inVirginia, Tennessee, South Carolina,

Georgia and another six states with sub-stantial numbers of tobacco growers.

The tobacco lobby in the United Sates isdefinitely the strongest in the Americancapital as they pay in “votes,” the “hardcurrency” of American politics.

Highly placed sources in WashingtonDC have told New Europe, under condi-tion of anonymity, that one of the ‘hot’topics discussed in recent private talksbetween the White House andBerlaymont (not Joseph II) was theTobacco Directive.

Our sources claim that “if the exerciseworks” then, a suitably prominent and,shall we say, accommodating Europeancould get the blessing to become the nextUN Secretary General.

US presidential elections are always aprivileged moment for making assess-ments and expressing judgments aboutthe status of the American economy. Fouryears ago, when G.W. Bush was passingthe power to President Obama, we were inthe middle of melting financial markets,soaring debts, collapsing banks, and awidespread feeling that the world econo-my was about to implode.

Four years later, the situation is definite-ly different. Four years later, the situationis definitely different. After multi-trillionTARP and ARRA (i.e. federal spending),various Fed ‘quantitative easings’ (aneuphemism for money printing), the diffi-cult handling of the eurozone crisis’ impli-cations, and an extensive and profoundindustrial and financial restructuring, theUS economy looks at least stabilised,although at lower growth rates, highunemployment, and huge debt and publicdeficits.

Some consider these characteristics tobe the new permanent state of economicfunctioning, and call them the “NewNormal.” Others claim that we are still atthe mercy of a bigger crisis, where the debtand deficit problems will play a major role.Who’s right?

The good news is that America hascompletely revamped its productivemachine, the US industry has attained ahigh level of productivity; stocks are low,orders are steady. After a tide of mergers,acquisitions, spin-offs, and closing ofunproductive or high cost units, the USindustry has attained a high level of pro-

ductivity; stocks are low, orders are high,and in some industries such as aviationorder books are full. Cash holdings are athistorically high levels. Profitability hasbeen largely restored, and stock marketprices doubled.

The other facet is less shiny though.Unemployment remains high; budgetdeficit, trade deficit, and government debthave skyrocketed; income inequality is

among the highest in the world. The trendof public spending, and the ensuing accu-mulation of debt are alarming.

Which conclusion can we draw—successor failure? In a nutshell, the handling of thecrisis has been outstanding, but the price to paywas a phenomenal increase in public spending,deficits, and debt. The exit from this situationwill be painful, and might require some formof political suicide.

Productivity restored yet deficits and debt soar

The Tobacco Directive death and Obama’s resurrection

· Page 7

The two-faceted US economyEU-USAs Europe keeps its eyes onthe upcoming US presidentialelection, it has come to realisethat it longer carries the neces-sary clout to influence Wash-ington’s foreign policy.. ·Page 3

·Page 32

EUROPEThe former British Pre-mier, Tony Blair called fora realignment of economicsand politics as an essentialstep out of the Eurozonecrisis.. ·Page 6

REFUGEESGermany increases aid toLebanon The GermanMinistry of Foreign Affairsinformed that the countrywill increase its humanitar-ian aid for Syrian...·Page 22

ENERGYRussian gas monopolyGazprom is one of the 14companies that haveexpressed interest in theprivatisation of DEPA..

·2

A crane that hit a New York building during Hurricane Sandy, just as forceful as this election will befor the world | BY ALEXANDROS KORONAKIS

Next year, we will mark the 10thanniversary of the China-EU com-prehensive strategic partnership. Inspite of vicissitudes in the interna-tional landscape in the past decade,China- Europe relations have stayedon an upward track and scored newand important progress. There havebeen frequent exchanges betweenour leaders, leading to enhancedmutual understanding and trust.

A better future

·Page 5

By Christos Kissas

War & HonourPage 17

ARTS &CULTURE

NE 10 YEARS AGOWhere in the world is Herman? | AFP PHOTO / HOANG DINH Nam

The Shooting Gallery

The saga of Turkey's attempt to join the European Union will one day be taught in schools of governance, probably inhushed tones behind the bike sheds. Ten years ago, they were offered a date for a date for accession talks, which is an exam-ple of the EU's less than entirely dynamic approach. Applying for membership in 14 April 1987, talks only began in 2005.The publicly quoted blockage is down to the divided isle of Cyprus, but many suspect that the real reason is Islam and thesheer size of the nation, which would need substantial representation in the institutions, including the parliament. The cur-rent Turkish Premier, Tayyip Erdogan has said that talks must be completed by 2023, the 100th anniversary of the foun-dation of the modern Turkish state. After wanting to be part of Europe since 1959, it appears that there is an end to Turkey'sremarkable patience.

A new leader for Europe?Tony Blair has warned that the structures of the EuropeanUnion are distant from EU citizens; not exactly headlinenews, but for the former British prime minister, a situationthat can be remedied by the election, by the European citi-zens, of a European Council president. Speaking inGermany, Blair said that a Europe-wide vote on the posi-tion, currently held by Herman Van Rompuy and decided onby EU heads of state as part of their usual institutional wran-gling, would help bring the EU closer to its citizens. Therehave already been similar calls in EU circles for a directlyelected president of the European Commission.It is possible that Blair covets this position for himself; hewas mooted in 2009 – although according to the manhimself, he didn’t actively seek the position – when VanRompuy was given his first two-and-a-half year mandate.A lot of water has passed under the bridge since then,enough for some of those prejudices lingering from hisdomestic term of office to have subsided; but how many?The Iraq war may be forgiven, and more centre-left gov-ernments may be on the scene, but could Europe really beled by a man from a country with an opt-out on the singlecurrency, and whose government, supported by his ownLabour Party, are throwing a spanner in the works of theUnion’s budget negotiations?Regardless of the political intentions of Blair and whetherhe is mistaking recognition for popularity - a flaw in anycross-border European elections – as a European grandeeengaging in the European debate at a crucial time, hisremarks still hold some weight; even just as departurepoints for debate. He may not be breaking new ground, but Blair, likeGeorge Soros in the same week, acknowledges the realityof a fracturing Europe, and the need for solidarity. “Theeuro crisis, however, has turned the EU into somethingradically different. Member countries are now divided intotwo classes – creditors and debtors – with the creditors inchar,” Soros wrote in an article published on New Europe’swebsite. Countries like Germany, he says, have nowbecome dominant in European affairs, not by any deliber-ate policy scheming, but by policy mistakes. He called thisthe “tragedy of the European Union.” The EU, he said,once the instrument of European unity, is now heldtogether by “grim necessity.”Blair, too, is thinking about deepening European ties inthe name of genuine solidarity, rather than simple need. “IfEurozone structures end up with a Europe that is funda-mentally divided politically as well as economically; ratherthan a Europe with one political settlement that accom-modates different levels of integration within it, the EU aswe know it will be on a path to break up,” he said. In this,Blair is acknowledging the rift between Eurozone andnon-Eurozone members, a current bugbear in ongoingdebates about the future of the EU. He says that Europeanand national political structures need to work more close-ly together to engage citizens. As an economic union, it is logical that the EU, from anintegrationist point of view, needs a coherent economicpolicy to beat the crisis. Whether or not a strong leader atthe top of the council one who is allowed to overshadowthe high representative for foreign affairs, can do this is atalking point; but the debate needs to be had. Europeanelections are scheduled for the first half of 2014, not thatlong away in real terms. Talk in European circles right now is, rightly, focussed onthe budget; after that what next? Tony Blair may not bethe answer to our problems, but if those ideas, like thoseput forward by George Soros, aren’t debated, then the sta-tus quo remains.

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02NEW EUROPE4 - 10 November , 2012 ANALYSIS

As Europe keeps its eyes on the upcoming U.S.Presidential Election, it has come to the realiza-tion that the continent no longer carries the nec-essary geopolitical clout to influence the calculusof Washington’s foreign policy in the region andbeyond.

The PresidentAs a point of departure, it is essential to re-

member how the world looked when PresidentBarak Obama took office three and a half yearsago. Recalling the basic thinking the UnitedStates had about Europe at the very start of theObama Presidency sheds light on how transat-lantic ties have evolved over the course of hisfirst term.

Upon taking office, Obama inherited adaunting set of global challenges, the magnitudeand reach of which few administrations haveseen in recent history. The ongoing wars in Iraqand Afghanistan, the growing nuclear challengefrom Iran, the scourge of global terrorism, and,of course, the greatest financial crisis since the1930s, strains in transatlantic unity com-pounded the difficulty of handling these com-plicated issues.

The unprecedented divisions across the At-lantic over Iraq, questions concerning Europeanengagement in Afghanistan, disagreement overhow to handle Iran’s nuclear program, and the re-lationship with Russia that was probably at theworst point since the end of the Cold War all pre-sented a major transatlantic hurdle to surmount.At the time, a German Marshall Fund Poll takenin 2008 found that just 19 percent of Europeansapproved of Washington’s handling of its inter-national affairs and only 36 percent viewedAmerican leadership in the world as desirable.From early on, the American President under-stood that the challenges that his country facedwere so considerable that even America’s unpar-alleled power could not deal with them alone.And so he came to office with the conviction thatthe United States could address these challengesmore effectively by working together with part-ners. And he was convinced that the UnitedStates had no more important set of partners indealing with this set of challenges than those inthe democratic countries of Europe.

As a State Senator in the summer of 2007,Obama wrote in Foreign Affairs that the mis-sion of the United States is to provide globalleadership grounded in the understanding thatthe world shares a common security and acommon humanity. In order to achieve thisgoal, he stated his intention was to rebuild thealliances, partnerships, and institutions neces-sary to confront common threats and enhancecommon security.

In a subsequent speech that he gave in Berlina year later, then Candidate Obama under-scored the priority placed on revitalizing thesealliances. He observed that no nation, no mat-ter how large or powerful, can defeat such chal-lenges alone and when looking for partners todeal with this challenging world -- alongside to

deal with this challenging world, Europe wasthe place that we would find them. This ad-ministration has, therefore, invested deliberatelyand consciously in strengthening these essentialtransatlantic ties.

However, one fundamental and subtle pretextto this new approach was the assumption thatAmerica’s alliances were of a qualitatively differ-ent set of relationships than just coalitions of firstamong equals. Seeking to avoid the legacy ofcontinuing the Bush administration’s adoptionof American Exceptionalism, the Obama ad-ministration modified its policy towards Europeby replacing Exceptionalism with American in-dispensability as the guiding framework throughwhich to conduct American statecraft abroad.As such, the United States has chosen to utilizeits leverage as the world’s super power to leadfrom behind and encourage its European alliesto steward the brunt of its diplomatic initiativesand military preferences as demonstrated byusing NATO in Libya last year.

This Counterintuitive approach seems tohave worked in America’s interest. Earlier thisSpring, the same German Marshall Fund Pollthat had once found that 36 percent of Euro-peans had faith in the President’s handling, inU.S. leadership in the world, registered at 75percent and has consistently been in the upper70s and lower 80s since President Obama tookoffice. And this reality is an asset that serves theUnited States well when it calls on its Europeanallies to follow its global international leader-ship, which its does frequently.

The ChallengerPerhaps said best by El Mundo’s Eduardo

Suarez, for his part, “Mitt Romey has a specialobsession with Europe," as he has over thecourse of the campaign “cited it as an exampleof everything the United States shouldn't be.”Romney has on many occasions used the EuroZone Crisis to score political points and high-light the dangers the United States faces if it re-

fuses to reign in on its public debt. In his trip to London this summer, Romney’s

inexperience to the sensitivities that come alongwith international statesmanship were on fulldisplay through his gaffes on the city’s pre-paredness for the Olympics.

And on the theatre of international conflict,Romney has indicated a willingness to workclosely with American allies in the MiddleEast. However, his positions towards Europeon foreign policy closely resemble that of thecurrent President. For example in the last Pres-idential debate, on issue after issue –Afghanistan, Syria, Egypt, and even on Iran,there was more agreement than disagreement.Is it possible to explain how Romney andObama’s policy toward, say, conditional aid forPakistan is any different? Romney was forsanctions, but tighter; negotiations, but tougher;timelines, but more inclusive.

The Euro Zone Crisisand its DiscontentsWith many national economies slipping back

into recession and voters in Greece, France andthe United Kingdom rejecting austerity meas-ures in recent elections, the European politicaland economic landscape has shifted again. Eu-rope now seems headed towards a revised socialcontract and a new round of negotiations to re-spond to the continuing financial crisis. TheUnited States, while experiencing a mild recov-ery, also strives to find the right balance betweenfiscal consolidation and growth preservation—a mission made more challenging with the up-coming November elections. A new loss ofconfidence in Europe may well imperil the U.S.economy’s fragile recovery. Will similar anti-austerity political currents cross the Atlantic andbring "change" to the United States? Despitethe crisis, transatlantic cooperation has increasedduring the Obama administration, but U.S.-EUrelations will be subjected to critical examina-tion during the months ahead.

The CampaignThe dearth of substantive statements made by

both candidates this election season on the EuroZone crisis demonstrates that Europe has notbeen a high profile issue of this campaign. Thisreflects both the lack of interest in the Americanelectorate towards the EU’s monetary disputesand a growing attitude among American foreignpolicy elites towards Brussels. Unlike the ColdWar, Europe no longer serves as the Sine QueNon in the calculus of American strategic decisionmaking. Even if the next President chooses toadapt a stronger stance on military interventionin Syria’s Civil War, which will certainly requirecollaboration between American and Europeanforces, America’s preoccupation with the MiddleEast and fascination with Asia, has left Europe asa vanquished geopolitical force that commandsless attention as a partner on equal footing withWashington. The reasons for this state of affairsare many. One fundamental component to thisdynamic remains the disproportionate Americancommitment to NATO’s budget and lack of in-centives of European nations to commit a largershare of their expenditure for the continent’s selfdefense. While many in the U.S. believe itsNATO partners can contribute more to the al-liance, tightening budgets in Europe will not in-centivize European nations to double down ontheir existing contributions for their security. Thiswill not promote a willingness from Washingtonto seek consensus moving forward regardless ofthe outcome of the election. There remains a bi-partisan consensus in Washington that whenAmerica needs to act on its own overseas it re-serves and has the means to do so accordingly.

Regardless of who wins on Nov. 6th, Europewill remain with its challenges as the UnitedStates will look on as a constructive observer atthe very best. The task of establishing viablebudget restraints and resolving Europe’s prob-lems will remain largely a continental affair, aposition which the next American President islikely to endorse.

POLITICS

Navigating through the US PresidentialElections…Where is Europe?

By Aaron Sebag

03NEW EUROPE4 - 10 November , 2012

ANALYSIS

European Commission President Jose Manuel Barroso (R) speaks while US President Barack Obama (C) and European Council President Herman Van Rompuy

(L) listen during a meeting at the White House in Washington, DC, USA, 28 November 2011

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An impasse between Greece and the Troika ofthe European Union, IMF and the ECB iscontinuing over changes to Greek labour laws,that have been rejected by junior coalition partythe Democratic Left.

The objection is over the insistence from theforeign lenders that the national wage agree-ment be targeted to unionised workers onlyrather than all employees, and the party also re-ject the plan to withdraw the 10% hike inwages to employees when they marry.

Further details of the Troika’s austerity pack-age have been released by the Greek govern-ment, and they include the raising of theretirement age to 67, cutting salaries and pen-sions and increasing taxes. In response Greekunions have called for a two day strike nextweek.

In return for EUR 31.5 billion of rescuefunding, the lenders have said they want EUR13.5 billion of cuts, also including reduced so-cial benefits.

The Troika demanding a continuation of re-forms in Greece if it is to release the latest in-stalment of the EUR 164 billion worth offinancial assistance, as part Second EconomicAdjustment Programme that was agreed inMarch, planned to be spent between 2012-14.

In total EUR 144.7 billion is to be providedthrough the European Financial StabilityFund, and the IMF will also contribute EUR19.8 billion, plus an extra EUR 130 billion willbe made available over the two year period.

The Democratic Left are the most juniorpart of the governing coalition with socialistsPASOK and the New Democracy, currentlyholding 17 seats, any agreement to new labourlaws could bypass them, but this could leave afragile coalition at a crucial time.

An EU official said: “Talks are continuingwith the Greek authorities with a view toreaching a staff-level agreement on a rangeof fiscal measures and structural reforms de-signed to ensure the sustainability ofGreece's public finances and boost the ca-pacity of the economy to generate sustain-able growth and job creation.”

Eurostat figures have confirmed that eco-nomic growth has contracted by 6.2% for the

second quarter of 2012 when compared to thesame quarter of last year. As unemploymentlevels are at 24.4%, the second worst behindSpain in the European Union, the Troika part-ners are convinced the further reforms need totake place to engineer growth in the Greekeconomy.

Labour laws were targeted as part of the sec-ond adjustment programme, focusing on agreater level of company involvement overwage bargaining, ensuring the company agree-ments supersede sector collective agreements.

Reductions in minimum wages were also in-cluded, wage floors by the National. GeneralCollective Agreement (NGCA) have been re-duced by 22 percent, or even by 32 percent forthose younger than 25. This was an importantaspect from the European Commission paperas average wages had been decreasing.

Legislations on collective bargaining werealso trimmed, as it was decided that collectiveagreements can only last for a maximum ofthree years to curb inflexible longer term agree-ments. The argument also is that when the

economy is in a state of deflation to increasecompetitiveness, privileged labour conditionswith former state owned industries will beplaced in line with the private sector.

Dr. Dimitris Kremalis of Kremalis LawFirm, who are based in Athens and are ex-perts in employment and labour law, said:“The changes are mostly initiated by finan-cial motivations, the changes that are advo-cated will reduce the insurances that are inplace with already established measures, anda balance must be struck. The fear is thatthe proposals will reduce the conditions ofthe labour market to a level such as Bul-garia, that is the view of some parts of theconfederation.”

“The situation is that the Troika partnersshould realise that a horizontal way to approachthe labour market is not the right way, but it isa time to a bring Greece in line with currentEuropean standards. Notoriously we have cur-rent extremes in our labour laws and regulation,and we have to be realistic in that it is not easyto make lasting structural reforms over a time

period of weeks and months. What is clear isthat the governing coalition is not what itseems after the elections, and they are not will-ing to question some extreme labour laws.”

Since the second adjustment programmewas drafted there has been progress on the rec-ommendations that it put forward.

“The progress is that wages have been re-duced to adapt to the current times.” Kremaliscontinued: “Employers have been granted withan increasing flexible regulatory frameworkmaking it easier to dismiss workers, but there issome evidence that they have tried to employpeople who may not be legal to work so againthere has to be a balance. This affects contribu-tions to social security that has not been ade-quately collected. For the future we need tohave a greater focus on labour law that includecorporate taxes, and have agreements in place tocreate a more favourable conditions for foreigninvestors.”

Talks are ongoing between all parties, and sofar it in unclear when a decision or deal will bemade on the labour regulations.

ECONOMY

Greece in labour law standoff with troikaBy Peter Taberner

Latest figures reveal that unemploy-ment in the Eurozone has risen to arecord high.According to statistics revealed by theEuropean Union’s statistics agency,Eurostat, the amount of jobless peoplein the Eurozone has risen by 146,000 inthe past year, putting the overall Euro-zone unemployment figure at 18.49million, an increase of 11.6% from thistime last year.

Within the 17-member Eurozonecountries (the members of the singlecurrency), Spain has recorded the high-est level of unemployment, at 25.8%,followed by Portugal (15.7%) and Ire-land (15.1%).Italy and France are both are at 10.8%.Germany, which recorded an increase inits unemployment this quarter, nowstands at having a jobless rate of 5.4%.

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UNEMPLOYMENT

Eurozone unemployment hits record high


ANALYSIS

Policemen holding black flags and shouting slogans march in central Athens during an anti-austerity demonstration in Athens on November 1. The International Monetary

Fund said that talks between Greece and the troika of international lenders remained stuck on the conditions for financing the country as it seeks a two-year extension for

meeting fiscal goals.

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The Netherlands has agreed the formation of itsnew government after 47 days of negotiations.The coalition government will be headed byMark Rutte’s centre-right liberal People’s Partyfor Freedom and Democracy (VVD), with theLabour Party (Partij van de Arbeid), underDiederik Samsom, as junior partners.The deal was agreed over the weekend, and con-firmed on 29 October. Both parties make up atotal of 79 seats in the 150 seat parliament.The biggest task facing the new government willbe curbing public spending. The governmentagreements contains a commitment to achieve€16 billion worth of spending cuts over the nextfour years. Healthcare and social welfare are ex-pected to be hit the hardest.

According to the government programme, thecuts will eliminate the Netherlands’ deficit by2017.This may prove to be a tough sell for Labourleader Diederik Samsom, who is expected to takethe post of deputy prime minister, and who cam-paigned on an anti-austerity ticket. Speaking tojournalists after the agreement was announced, hesaid that the highest earners would be the onestargeted by the cuts.He will put the deal to Labour Party members on3 November.The new cabinet is expected to be sworn in byQueen Beatrix sometime next week, The key postof finance minister is expected to go to the LabourParty’s Jeroen Dijsselbloem. CD

New Dutch government to issue €16bn worth of cuts

In the eight months since I became ViceForeign Minister in charge of European af-fairs, I have paid nearly ten visits to Europe.During each visit, I witnessed the tremen-dous efforts made by Europe to cope withthe debt crisis, and I am very glad to see thatsome of these efforts are showing effectgradually. China has provided firm supportto Europe since the outbreak of the debtcrisis. We contributed USD 43 billion to theIMF, and provided assistance to Europewithin our capabilities through purchasingEuropean treasury bonds and increasingimports from Europe. In my view, this iswhat we should do as the EU’s comprehen-sive strategic partner.

Next year, we will mark the 10th anniver-sary of the China-EU comprehensive strate-gic partnership. In spite of vicissitudes in theinternational landscape in the past decade,China-Europe relations have stayed on anupward track and scored new and importantprogress. There have been frequent exchangesbetween our leaders, leading to enhanced mu-tual understanding and trust. The China-EUtrade topped USD 560billion, representing aquadruple increase compared with ten yearsago. China and Europe have also maintainedclose consultation and coordination on cli-mate change and other global issues.

China is a staunch support of the Europeanintegration. It is our consistent view that aunited, stable and prosperous Europe is in theinterest of the whole world, China included.When the European debt crisis was at itsworst, some people in the world, includingthose from Europe, propagated the ideas ofthe “Euro collapse” and “EU’s disintegration”.Yet China has never changed its view towardEurope, and remained confident about thefuture of European integration. As PremierWen Jiabao said, “China is EU’s trustedfriend and cooperation partner.”

The future of China-Europe relations willbe brighter. As China moves to a high level inits development, the scope of cooperation be-tween China and Europe will only becomebroader. There will be increasing demand inChina for European products, technologyand investment. We need to draw new plansfor our cooperation in trade, investment, fi-nance, urbanization and sustainable develop-ment, and explore the possibility ofestablishing a China-EU free trade area. Atthe same time, we need to properly handleour differences and disputes according to theprinciple of mutual respect, equality and mu-tual benefit, and do all we can to translate thehuge potential of cooperation into reality, soas to bring more benefits to the people ofboth sides.

A promising future of China-Europe rela-tions requires our joint effort to uphold apeaceful and stable international environment.Both China and Europe went through thehavoc of the Second World War and our peo-

ple were the victims of wars. No one knowsbetter the preciousness of peace, cherishtoday’s peaceful environment more than us.

I know that some European friends areconcerned over the Diaoyu Dao issue re-cently. The Diaoyu Dao and its affiliated is-lands have been China’s integral territorysince ancient times, over which China hasindisputable sovereignty. Japan stole theDiaoyu Dao from China during the FirstSino-Japanese War at the end of the 19thcentury. After the end of the Second WorldWar, in accordance with the Cairo Declara-tion, the Potsdam Proclamation and otherinternational legal documents, all the terri-tories Japan had stolen form the Chineseshall be restored to China, including theDiaoyu Dao.

The current tensions over the Diaoyu Daowere provoked solely by Japan. Last Septem-ber, the Japanese government abandoned itsprevious agreement with China on settingaside the dispute and took the so-called na-

tionalization measures regarding the DiaoyuDao, which in essence are aimed at changingthe Diaoyu Dao’s legal status. The Chineseside was left with no other choice but to makenecessary responses. The Chinese side hasbeen committed to settling the disputethrough dialogue and negotiation. It is im-perative that the Japanese side correct itswrongdoings and return to the track of nego-tiated settlement.

After the end of the Second World War,fascist crimes committed on the EuropeanContinent were brought into full account.This paved the way for Europe’s integrationprocess in the last six decades and more, andhas turned Europe from a continent deep inwar to one of peace. Regrettably, some polit-ical figures in Japan still insist on payinghomage to the Yasukuni Shrine where Sec-ond World War criminals are worshipped. Inblatant denial of the crimes Japan committedduring the war, they are trying to rewrite his-tory, challenge the post-war internationalorder and undermine regional peace and sta-bility. These moves should put all peace-lov-ing countries and people on high alert. Tosafeguard the victory of the Second WorldWar and the post-war international order re-mains an important and real issue in Asiatoday, and should be the shared responsibilityof the whole international community.

A peaceful and stable Asia-Pacific is in theinterest of all parties in the world, includingEurope. China will stay committed to thepath of peaceful development and friendlycooperation with the people of all Asiancountries. China and Europe are two impor-tant players in the world and each other’s in-dispensable strategic partners fordevelopment. China is ready to work withEurope to make even greater contribution toworld peace, stability and development.

Song Tao is the Vice Foreign Minister ofChina

EU -CHINA RELATIONS

A Better Future for China-Europe Relations

05ANALYSIS

The Prime Minister of People's Republic of China, Wen Jiabao, is welcomed by European Commission President

Jose Manuel Barroso at the start of an EU China High level cultural forum at EU commission headquarters in

Brussels, Belgium, 6 Ocotber 2010.

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By Song Tao

NEW EUROPE

The President of the European Central Bank(ECB), Mario Draghi has backed the idea ofthe creation of a European commissioner tooversee Eurozone budgets.The commissioner, dubbed the ‘super com-missioner’, would have the power to veto na-tional budgets, and make legally-bindingdecisions against member states determined tobe in breach of deficit rules.In an interview over the weekend with theGerman newspaper Der Spiegel, and re-pub-lished on the ECB website, Draghi said thathe “was fully in favour” of the European Com-mission having a closer say in how membersates conducted their national budgets.This follows calls by the German FinanceMinister, Wolfgang Schaüble, to introduce a

‘currency commissioner’, which would havethe power to inspect EU member state gov-ernment’s budget plans.At present, national governments still retainpowers to control their own financial plans, al-though governments have signalled a willing-ness to concede certain powers to thecommission regarding budgetary control. “If you want to restore confidence in the euroarea, you need rules”, he told the interviewer.“But that is only the first step. You also need toensure that the rules are adhered to. This iswhat was lacking in the past and what gov-ernments need to work on”.Speaking of the idea of a Eurozone commis-sioner floated by Schaüble, Draghi said thatEU governments “would be wise to seriously

consider it. I firmly believe that, in order to re-store confidence in the euro area, countriesneed to transfer part of their sovereignty to theEuropean level”.So far, member states have stopped short ofthis kid of transfer of power to the EuropeanCommission. “A lot of governments have yetto realise that they lost their national sover-eignty a long time ago”, said Draghi.“Because, in the past, they have allowed theirdebt to pile up, they now need the goodwill ofthe financial markets. That sounds like a paradox, but it is nonethe-less true: it is only once the euro area countriesare willing to share sovereignty at the Euro-pean level that they will gain sovereignty”.

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ECONOMY

Draghi backs Eurozone ‘ super commissioner’

Mario Draghi, President of the European Central

Bank (ECB), has backed suggestions that the EU

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budget oversight. |EPA/UWE ZUCCHI

The former British prime minister, Tony Blaircalled for a realignment of economics and pol-itics as an essential step out of the Eurozonecrisis, telling an audience in Berlin the crisis wasso acute, “because monetary union was in manyways an idea motivated by politics but expressedin economics.”

He continued, “Countries whose economiesare divergent have to converge. Since this re-quires a huge degree of integration in decisionmaking, the politics will then have to shift tocatch up the economics. True economic unionwill imply a large measure of political union.”

Blair was speaking at the Council for the Fu-ture of Europe in Berlin, Germany.

There were kind words for the GermanChancellor, “who has shown great skill andcourage in handling the crisis,” but he argued,“We need growth and reform. And we needliquidity, solvency and growth issues addressedtogether.” But he cautioned, “Without this, andespecially without growth, the pain of the ad-justment in debtor countries is frighteninglyhard and several years of it may not be politi-cally possible.”

He put forward his approach, “The eco-nomics imply a strategy based less on incre-mental steps; and more on a “Grand Bargain”agreement that deals with liquidity per theECB; solvency with the necessary fiscal trans-fers; banking union; a large degree of fiscal co-ordination; far reaching structural reform; andthe back loading not front loading of austerityplans, to protect growth - and all at once.”

This would not be easy, economically or po-litically, as he reminded his audience, “I bear thescars of participation in the Amsterdam Treaty,the Nice Treaty, the – Laeken process culmi-nating in the Lisbon Treaty and the 2005 EUbudget negotiation, when the UK held thePresidency - the most difficult negotiation Iparticipated in, (even including the NorthernIreland peace agreement.)”

His experience said that there were two“crucial strategic objectives” for the future ofthe EU, “First, some differentiation in thespeed of European integration is now in-evitable as members of the Eurozone seekto match political structures with integrated

economic decision-making.”This path had dangers, he warned, “if Euro-

zone structures end up with a Europe that isfundamentally divided politically as well as eco-nomically; rather than a Europe with one po-litical settlement that accommodates differentlevels of integration within it, the EU as weknow it will be on a path to break up. “

He also had a warning for the current UKprime minister, “It is massively in Britain’s in-terest not to play short-term politics with thisissue. Personally I would like to see the UK takea constructive role in shaping this new union.”

The second objective, he argued, was to rec-ognize why political integration had been dis-

cussed but not acted upon, but “greater politi-cal integration is indeed inevitable” and that“the union proposed for economic decisionmaking reaches right into the heart of decisionsnormally reserved for national Governmentsand Parliaments.”

He cautioned, “Though in theory, as Europeintegrates, people should demand more Eu-rope-wide democracy, in practice, because theystill feel a far closer affinity to national democ-racy, they don’t. The Europe political elite does.But the people often don’t. The danger is thatthe more we talk of “bringing Europe closer tothe people”, the more “the people” feel alien-ated from it. “

He said that “A Europe wide election for thePresidency of the Commission or Council isthe most direct way to involve the public. Anelection for a big post held by one person – thispeople can understand. The problem with theEuropean Parliament is that though clearlydemocratically elected, my experience is peopledon’t feel close to their MEP’s. This couldchange but only if the European Parliamentand National parliaments interact far moreclosely.”

He continued by suggesting that Councilcould be made more transparent and withstronger links with the parliament.

“We should also ask what political union re-ally means. It doesn’t mean simply a set of in-stitutional common bonds. It means also that inthe minds of the people of Europe, there is aclose connection between them. This can’t belegislated for. It has to be nurtured, culturallyand socially as well as politically.”

EU

Blair calls for more Europe, elected presidentBy Andy Carling

The defeat of British Prime Minister DavidCameron in a crucial parliamentary debateon the EU’s long-term budget, illustratesnot only the divisions within his own Con-servative Party, but also within the coalitiongovernment and in the wider Europeanunion. The vote on 31 October didn’t open-up those division, they have always beenthere; last year, for example, EuroscepticConservative rebels voted against Cameronon an EU referendum, but now, at a crucialtime politically and economically for theUnion and for the UK, those divisionsthreaten to erupt into a year or so of tough-talking and bitter back-and-forths both athome and abroad.The vote on the EU budget saw the biggestConservative revolt against its leader, since81 backbenchers took the prime minister totask on an EU referendum in October2011. This time around, 53 ConservativeParty rebels, joined by the oppositionLabour Party, defeated the government’smotion that the EU budget should bereduced in real terms.The European Commission has proposed a5% increase in budget for the period 2014-

2020, which Cameron has rejected, arguingthat any increase in that period must onlybe in line with inflation. The Conservativerebels want the government to argue for areduction in the overall budget, rejected bysenior party officials as unworkable. Despiteserious efforts by party whips, the govern-ment lost the vote by 307 votes to 294.Domestically, it was a humiliating blow forCameron. Nick Clegg, leader of juniorCoalition partners, the Liberal Democrats,whose differences with the Conservativeson Europe are well documented, attackedthe Conservative rebels, saying that it couldforce the UK out of Europe. During aspeech the day after the vote, he said thatany promises made by the Conservativeleadership that they can repatriate certainpowers back to London,a common stancerepeated by the party, “is a false promisewrapped in a union jack”. This followedcondemnation by the leader of the Liberalsin the European Parliament, Guy Verhofs-tadt, who said that Eurosceptics in theConservatives, and Labour, push both par-ties close to UKIP territory.The Labour Party, once self-proclaimedEurophiles, received their own condemna-tion, not least from the European Conser-

vatives, who accused them of “starkhypocrisy and naked opportunism” in sidingwith the rebels. The party position,endorsed by leader Ed Miliband and shad-ow chancellor Ed Balls, certainly has morethan a hint of short-term thinking about it;a chance to make the prime minister lookweak. It was a tactic Labour had usedbefore, back in 1992 during the debates onthe Maastricht Treaty. When the subject comes up again in parlia-ment in a year’s time (the MFF has to beagreed before the end of 2013), Labourknows the choice will be different; beingnot about the government’s negotiatingposition, but on a European deal to agreewith or reject. As a secondary consequence,Labour’s entry into what is essentially aninternecine party issue, has widened thedomestic debate, and will increase the pres-sure for a referendum on the UK’s relation-ship with the EU, which Cameron hashinted may happen after 2015, and whichmany are pushing for.The British government, still rejecting anabove-inflation budget rise, has said it willveto any such deal. The budget has to beagreed by all 27 member states. In addition,France, Denmark, the Netherlands and

Sweden have threatened to reject the €1trillion budget. At present, 17 memberstates, all net beneficiaries, are holdingsteady for the proposed 5% increase. A UKveto would do nothing to repair its imageamongst the Council, while a veto wouldensure that the budget would be agreed byannual renewals, which need only a majori-ty, not unanimity.Cameron is probably realistic in arguingthat a cut in the budget will not be tolerat-ed, and that a rise in line with inflation isthe best option. If no deal is agreed, thenthe current budget will stay in place with a2% increase.Following the UK, German ChancellorAngela Merkel, after meeting with Irishprime Minister, Enda Kenny, downplayedbudget divisions in Europe. Ireland, aftertheir own assurances from the EU overlegacy assets, as well as the common agri-cultural policy, takes over the presidency atthe beginning of 2013. With divisions, notjust domestically in the UK, but betweenthe likes of Germany and Poland, not tomention the more ardent budget hawks, atough year of negotiation lies ahead, start-ing on 22 November, when leaders gatherin Brussels for a budget summit.

EU BUDGET

Tough time ahead for budget negotiations


ANALYSIS

German Chancellor Angela Merkel (L) and former British Prime Minister Tony Blair (R)

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ANALYSIS

US presidential elections are always aprivileged moment for making assess-ments and expressing judgments aboutthe status of the American economy. Onlythis time, it won’t be a typical assessmentof a normal economic situation, but an ap-praisal of the handling of the secondbiggest financial crisis in 100 years. Fouryears ago, when G.W. Bush was passingthe power to President Obama, we werein the middle of melting financial mar-kets, soaring debts, collapsing banks, sink-ing asset prices, and a widespread feelingthat the world economy was about to im-plode, dragging us into a new Great De-pression decade.

Four years later, the situation is defi-nitely different. After multi-trillion TARPand ARRA (i.e. federal spending), variousFed ‘quantitative easings’ (an euphemismfor money printing), the difficult handlingof the eurozone crisis’ implications, and anextensive and profound industrial and fi-nancial restructuring, the US economylooks at least stabilized, although at lowergrowth rates, high unemployment, andhuge debt and public deficits. Some con-sider these characteristics to be the newpermanent state of economic functioning,and call them the “New Normal.” Othersclaim that we are still at the mercy of abigger crisis, where the debt and deficitproblems will play a major role. Who’sright?

The good news is that America has

completely revamped its productive ma-chine. After a tide of mergers, acquisi-tions, spin-offs, and closing ofunproductive or high cost units, the USindustry has attained a high level of pro-ductivity; stocks are low, orders are high,and in some industries such as aviationorder books are full. Cash holdings are athistorically high levels, as US companiessit on 1.7 trillion dollars. Even better, thefinancial institutions that benefited fromthe bailout money have returned most ofit to the government. Profitability hasbeen largely restored, something that iswell reflected in stock market prices: sincethe lows of early 2009, the New YorkStock Exchange index (S&P 500) hasdoubled, in one of the best rallies of itshistory. Also, despite the severity of thecrisis, median household income remainedpretty stable over the period, and in anycase enough to support the demand forseveral new products, such as iPads andiPhones, which attracted huge queues infront of the stores (not really the GreatDepression’s free-meal queues).

Let’s now look at the other facet of theeconomy. By US standards, unemploy-ment remains high at around 7.8% andvery resistant to all kinds of stimulus poli-cies. Budget deficit, trade deficit, and gov-ernment debt have skyrocketed. Incomeinequality is among the highest in theworld (USA ranks 95) and widening…But above all, the major risk looming overthe American economy is the trend ofpublic spending, and the ensuing accumu-

lation of debt (currently, around $16 tril-lion). Several voices have pointed out thisissue, and revealed its importance.

In September 2012, George P. Shultzand four other prominent economistswrote an article in the WSJ about “TheMagnitude of America’s Mess.” Some ofthe figures given are quite alarming: fed-eral government spending now exceeds its2007 level by $1 trillion; to pay for ‘quan-titative easing’, the Fed saw its reserve bal-ances going from $8 billion in September2008 to $1.5 trillion now…

In a famous 2011 study called ‘USA,Inc.,’ financial analyst Mary Meekerlooked at the US economy as if it were acorporation, with shareholders and bal-ance sheet. Her findings are similar; in her460-slide PowerPoint presentation, onecan read: “By our rough estimate, ‘USAInc.’ has a net worth of negative $44 tril-lion… If current trends continue, entitle-ment spending and net interest paymentscombined will equal all of federal revenueby 2025… ‘USA Inc.’ has a spendingproblem, not a revenue problem.”

Finally, Bill Gross, the ‘dean’ of US bondmanagers, published a paper called “Dam-ages,” last month where he included a graphin which various countries were ranked ac-cording to public sector deficit and struc-tural fiscal gap. The countries that had theworst combination of the two factors wereincluded in a so-called “Rim of Fire”, ac-cording to his terminology. Guess who’s in-side: Greece and Spain of course; andFrance; but also (surprise!) the US, the UK,

and Japan—the last three in a worse posi-tion than the archetype of economic disas-ter that Greece is. Gross explains thatkeeping the US economy safe means to cutspending or raise taxes by 11% of GDP inthe next few years, that is a $1.6 trillion peryear, or four times the amount of the failedattempt for a budget compromise betweenCongress and the President.

So, which conclusion can we draw—success or failure? In my opinion, the an-swer is quite clear: yes, the Americanindustry is doing fine; the risk of a finan-cial sector collapse was properly ad-dressed; and the general handling of thecurrent major economic crisis was effi-cient, given the magnitude of the issues.Only, the price to pay was a phenomenalincrease in public spending, deficits, anddebt; and also a persistent manipulation ofinterest rates, which has brought a severedistortion in the markets.

The big question is: how do we exit thissituation? When and at what pace can wereverse power, that is: to start cut spend-ing, increase taxes, and let interest ratesmove up, without crashing the alreadyfragile economy. And, above all, how willpoliticians explain the necessity of suchunpopular policies to society? As MaryMeeker, the author of “USA Inc.,” put it:“There are compelling reasons we don’ttackle these questions regularly: the an-swers usually involve some form of polit-ical suicide.”

Christos Kissas, PhDwww.christoskissas.com

The skyline of lower Manhattan is seen from the Staten Island Ferry prior to the arrival of Hurricane Sandy on October 28, 2012 in New York City. The timing of Hurricane Sandy has been said to possibly affect the election, Europe and the

US will be watching.

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POLITICS

The two-faceted American economy

By Christos Kissas


ANALYSIS

The ChineseQuestion

China became a central player in a world of change andit will be an imperative to establish a Contract of Trustas an answer to the expectations of a New Society, moredemanding and more capable of driving the imperative ofexcellence. The new challenge to China is also and aboveall a possibility to the future of a world in change. Chinahas a strong agenda for the future and it is an imperativefor Europe to have the collective intelligence of sharingit in a strategic way.China is a big challenge to Europe. The global economicsituation of Europe is becoming difficult: the europeancompanies are facing more and more the strong compe-tition from companies from Middle East and Asia, Pub-lic Accounts of most of the european countries are facingunsustainable deficits, Unemployment is very high.That´s why a New Contract of Trust for Europe is moreand more an imperative. The New Europe must be sup-ported by some strategic proposals that demand for a newoperational agenda. This New Contract of trust between China and Europemust be supported by some strategic proposals that de-mand for a new operational agenda. Europe must knowhow to integrate in a positive way most of the chinesecitizens that come to develop new businesses. Social co-hesion is done with the constructive participation of thecitizens and it is more and more necessary an effectiveattitude of mobilization for this effort. A positive inte-grative policy is a signal that Europe and China have acommon road to follow in the future.On the other hand, Innovation and Technology must bethe “enablers” for competitiveness in Europe and China.Universities and Companies must perform a new strate-gic partnership centered in the objectives of the addedvalue, creativity and knowledge. This is the basis for a fu-ture effective implementation of the New Eu2020 Strat-egy, which must be followed by China. Europe and Chinahave still a strong opportunity to implement an agenda ofinnovation – the opportunity is more and more now andit can´t be lost.The excellence of Europe and China is more and morethe excellence of their Regions. The development ofstrategic projects like the Poles of Competitiveness,Clusters of Innovations and Knowledge Cities and Re-gions is the effective confirmation that the basis for anew agenda in these two countries depends on the ca-pacity of its regions. A New Europe and a New Chinaare more and more the confidence of the developmentof New Regions.Europe and China have a unique identity based on theirstrong culture. The European and the Chinese Culturesare a unique asset. Europe and China must be able to in-volve other global partners in the construction of inte-grated projects focused on the development of culture asa driver for development. The reinvention of culture is it-self a very innovative way to involve more and more theEuropean and the Chinese actors in this project for thefuture.

Francisco Jaime Quesado is the General Manager of theInnovation and Knowledge Society in Portugal, a publicagency with the mission of coordinating the policies forInformation Society and mobilizing it through dissemi-nation, qualification and research activities. It operateswithin the Ministry of Science, Technology and HigherEducation

New Europe content partner

By Francisco Jaime Quesado

On 23 October, the EU's foreign policychief issued a statement congratulatingthe Libyan people "on the first anniver-sary of the historic declaration of liber-ation". While Ashton did professconcern about ongoing violence, thegeneral tone of her comments was tri-umphant.

Four days later, the television channelRT broadcast horrific images fromBani Walid, southeast of Tripoli. TheRT report included allegations made bya local lawyer that the militia attackingthe city was using white phosphorousmunitions.

RT is financed by Russia - like theBBC is financed by the British state -but does that mean its report should bedismissed? Organisations viewed ascredible in this part of the world havepreviously documented the presence ofchemical weapons in Libya. A journal-ist with The New York Times foundwhite phosphorous in a Libyan weaponsdepot during 2011. According to thejournal of record, the depot had be-longed to Muammar Gaddafi's regimebut had fallen into rebel hands. HumanRights Watch, meanwhile, came acrosswhite phosphorous at "multiple sites" inLibya earlier this year.

The fact that the white phosphorousallegations from Bani Walid have beenignored by most media outlets does notmake them untrue. The mainstreampress failed to probe claims that the USbombarded the Iraqi city of Fallujahwith white phosphorous in 2004. For-tunately, a number of bloggers kept dig-ging until they had produced proof thatthe substance had indeed been used.After a year of obfuscation, the Penta-gon finally owned up in 2005.

White phosphorous can cause griev-ous injuries. Once it comes in contactwith human skin, it can burn deeplythrough the muscle and into the bone.America's best buddy Israel made ex-tensive use of this substance during itsall-out offensive on Gaza in late 2008and early 2009. Just as there have beeninternational campaigns, culminating inagreements to ban landmines and clus-ter bombs, there ought to be a mass mo-bilisation against white phosphorous.

The militia attacking Bani Walid ap-pear to be on "our" side. Last year Ash-ton told rebels fighting Gaddafi that"we will be here to support you all theway". Some of those rebels apparentlywant to teach Bani Walid a lesson be-cause it was a pro-Gaddafi stronghold.The attack was sparked by the death inSeptember of Omran Shaaban, a rebelsuspected of capturing and helping to

kill Gaddafi. Shaaban had been kid-napped in Bani Walid.

Are the women and children in thiscity now being exposed to white phos-phorous as part of an act of vengeance?I don't have the answer to that question.But surely it requires investigation.

Of course, our governments have ahistory of only getting upset aboutLibya when it suits them? Having beentold repeatedly that Gaddafi was a "maddog", I was astonished to pick up anewspaper one day in 2003 and learn ofhow his rapprochement with the West.Gaddafi bought so much Europeanweaponry over the next few years thathe must have amassed a huge collectionof loyalty cards from our arms dealers.He even delivered a lecture in the Eu-ropean Commission's press room, en-circled by his troupe of femalebodyguards. But then he started mak-ing awkward queries about how Libya'soil resources were benefiting some cor-porations more than others. And so hebecame a "mad dog" again.

We, on the other hand, are incapableof wrongdoing. Anders Fogh Ras-mussen, NATO's secretary-general, ex-pressed pride recently about how thealliance "prevented a massacre andhelped protect civilians from attack" inLibya last year. How did NATO achievethat feat? By dropping a total of 7,642"surface-to-air weapons", according toNATO's own data.

Every so often NATO's legal adviserPeter Olson is invited to speak at pres-tigious conferences on respecting inter-national humanitarian law in modernwarfare. Strangely, the same Peter Olsonis less enthusiastic about opening upNATO's own record on respecting in-ternational humanitarian law to

scrutiny. Earlier this year, he wrote tothe UN's International Commission ofEnquiry on Libya, expressing concernthat incidents involving NATO couldbe treated in the commission's report asbeing "on a par" with those that "did vi-olate law or constitute crimes". Olsonurged that the report "clearly state thatNATO did not deliberately target civil-ians and did not commit war crimes inLibya."

There was something arrogantabout how Olson tried to dictate whatthe findings of an independent en-quiry should be. As it happened, theInternational Commission did expressconcern about a number of airstrikescarried out by NATO. Its report statedthat the enquiry was "unable to con-clude, barring additional explanation,whether these strikes are consistentwith NATO's objective to avoid civil-ian casualties entirely, or whetherNATO took all necessary precautionsto that effect". Amnesty Internationalhas cited "credible reports" that someof NATO's attacks killed "at least tensof civilians". And the aforementionedHuman Rights Watch declared inMay this year that NATO has "failedto acknowledge dozens of civilian ca-sualties" resulting from its 2011 warand has "not investigate possible un-lawful attacks".

Leaving aside NATO's direct respon-sibility, there is a general consensusamong human rights monitors thatboth rebel and pro-Gaddafi fighters car-ried out indiscriminate attacks. Should-n't Catherine Ashton, therefore, admitthat some of the rebels she supported"all the way" were war criminals? Ofcourse, she should. But I'm not holdingmy breath.

The European Union High Representative for Foreign Affairs and Security Policy, Catherine Ash-

ton, during a press conference in Tripoli, Libya, 12 November 2011. On 23 October this year, she de-

clared it "the first anniversary of the historic declaration of liberation".

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Are Ashton's friends using white phosphorous in Libya?Freedom now reigns in Libya - or so Catherine Ashton would have us believe

By David Cronin


ANALYSIS

Once again international attention hasbeen focused on the freedom of ex-pression in Turkey. In the wake of thehigh-profile cases against Nobelprizewinner Orhan Pamuk and novel-ist Elif Şafak, the turn has now cometo concert pianist Fazıl Say, who is ac-cused of violating Article 216 of theTurkish Penal Code. This article stip-ulates that any person who openlydenigrates the religious beliefs of agroup shall be punished with impris-onment from six months to one year ifthe act is conducive to a breach of thepublic peace. Furthermore, if thiscrime is committed through themedia, the penalty will be increased byone half.

Say, who is an atheist and critical ofTurkey’s Islamic-oriented government,is accused of sending a number oftweets offending Islam. For example,in one he quoted the 11th century Per-sian poet Omar Khayyam: “You sayrivers of wine flow in heaven. Is heavena tavern to you? You say two hourisawait each believer there. Is heaven abrothel to you?” In another, when theezan (call to prayer) only lasted 22 sec-onds, Say asked: “Why the hurry?Have you got a mistress waiting or araki on the table?”

In his defence, Say explained thathis Twitter account was not public andthat those who were offended by hisTwitter posts could unfollow him. Thefirst hearing was held on 18 Octoberin a courtroom with only limited spacefor accredited journalists.

The second hearing has been ad-journed until 18 February.

The EU Commission has in its2012 Progress Report stated that theincreasing incidence of violations offreedom of expression in Turkey raiseserious concerns, but Turkish EUMinister Egemen Bağış has dismissedthe report as a “broken mirror” andclaims that the EU is also experiencingmental problems.

Nevertheless, the fact remains thataccording to an OSCE report in Aprilthe number of imprisoned journalistsin Turkey has almost doubled in a year,from 57 in 2011 to 95, which is morethan in Iran and China combined (69).20 have since been released.

As the EU Commission also pointsout, on a number of occasions journal-ists have been fired after writing arti-cles openly critical of the governmentand self-censorship in the Turkishmedia is a common phenomenon.

At the governing AK ( Justice andDevelopment) Party’s congress at theend of September seven newspapersand a tv channel were not allowed tocover the event. But the following dayPresident Abdullah Gül in an address

to the National Assembly stated thateveryone has the freedom to freely ex-press their views. Furthermore, that noone should be imprisoned because ofexpressing their views through themedia.

A conservative societySince the AKP government came to

power in 2002, Turkish society hasgradually become more conservative.As Prime Minister Erdoğan stated inFebruary, “We will raise a religiousgeneration”. The educational systemhas been shaped accordingly. Courseson the Koran and the life of ProphetMohammed have been introduced aselectives in secondary schools and theHigher Education Board is consider-ing the removal of a course inAtatürk’s principles and the history ofthe revolution, which is mandatory forTurkish university students.

Last November the Board also de-cided to abolish the coefficient systemto make it possible for graduates fromimam-hatip (religious) high schools toenter university on the same terms asgraduates from other high schools.According to a regulation being pre-pared by the Ministry of Defenceimam-hatip graduates will be able toattend military academies.

Compulsory school attendance hasbeen increased from eight to twelveyears, but parents can move their chil-dren to imam-hatip schools after onlyfour years of primary education. Therehas been an increase in the ratio of stu-dents enrolling in imam-hatip schools– it is now 7 percent – and as AKPdeputy Ali Boğa exclaimed twomonths ago, “ We have the chance toturn all schools into imam-hatipschools.”

There has also been a significant in-crease in the budget of the Religious

Affairs Directorate (Diyanet), whichwill be increased from 3.89 billion to4.6 billion Turkish lira (about €2 bil-lion). This will exceed the allocationsfor the Interior, Foreign, Health, Sci-ence, Industry and Technology, Envi-ronment and Urban Planning, Cultureand Tourism, Energy and NaturalSources, Development and EuropeanUnion ministries combined.

This is perhaps not remarkable for acountry that has one mosque for every350 people and one hospital for every60,000. As a Turkish friend com-mented: “When they come aroundcollecting, it is always for a newmosque. Never a new school.” In amove in what former European Courtof Human Rights judge Ali Rıza Tür-men has called “social engineering, aradical transformation of society”, anew law requires that there should beprayer rooms (mescit) in all shoppingmalls, cinemas, theatres, opera housesand other public places.

The AKP government has effec-tively stifled domestic opposition,making strategic use of the prospect ofEU membership to curb the powers ofthe Kemalist and secularist establish-ment. One consequence, as oppositionleader Kemal Kılıçdaroğlu wrote in

The Washington Post in February,is that Silivri prison near Istanbul is “aconcentration camp”, where hundredsof journalists, publishers, military offi-cers, academics and politicians arebeing held, many of whom have beendetained for years without trial. Thequestion is whether the EU in its pur-suit of a positive agenda with Turkeyis prepared to turn a blind eye to thesituation.

Robert Ellis is a regular commentatoron Turkish affairs in the Danish andinternational press

Fazil Say, tweeting on freedom of religion issues may be an infringement of the Turkish penal code

SOCIETY

The Turkish pianistBy Robert Ellis

Downmemorybane

There are many theories about what the passage of alife is, about youth and age. Having just hit a half cen-tury, I am beginning to think that you become aproper adult, a finished human being when life hascrapped on your last treasured childhood memory.The Star Wars fans are currently in shock afterGeorge Lucas sold what he artistically refers to as “thefranchise” to Disney. I’ve never really been interestedin Star Wars, although I did eventually see it whilstunder a meeting tree in the Tanzanian bush, but that’sanother story.It seemed to be, well insubstantial compared to Lucas’earlier THX 1138, with a plot that nobody can eitherfollow or care about. In December 1977, when it landed in the UK, we weremore engaged with punk and teenage rebellion, ratherthan what looked like a hangover from the coke fu-elled California of the early 70s. Less than a year later,Lucas treated the brand with the contempt it de-served, with the notorious ‘Star Wars Holiday special’.Described by a critic as "the worst two hours of tele-vision ever," and that was one of the more positive re-views, it has been kept locked away, only beingbroadcast the once. Rather like the part of Live Aidthat nobody talks about, the Led Zeppelin set, wherethe band reformed for the charity event and were justterrible and have tried to keep the footage off screenever since.Of course, the Brits have had their dreadful TV mo-ments, notably during The Brits awards of 89, the selfsatisfied ceremony of the music industry, then pre-sented by a diminutive topless model and the gauntundertaker like figure of Mick Fleetwood which wasso bad the BBC cut off the broadcast and it wasn’tbroadcast live until 2007. We’ve also had a long line of celebrity scandals, notthe young and publicity hungry talent vacuums oftoday, although who now recalls that Paris Hiltonmade her name in a leaked sex tape, of interest becauseher obviously brief and inadequate lover, who took herto the sensual heights of disinterested boredom wasin some long forgotten TV show.We’ve had other ones, such as Frank Bough, the sortof dependable guy who was the safe pair of hands forcurrent affairs, the only controversy about him was theshades of beige in his cardigan. He turned out to besnuffling coke of the chests of hookers all night be-fore turning up at the BBC for the breakfast newsprogramme.Then Gary Glitter turned out to have a hard drive fullof kiddy porn, an MP, John Stonehouse apparentlycommitting suicide by leaving his clothes on a Britishbeach. He must have broken the world distance swim-ming record as he turned up safe and well in Australia.I had a friend on the notorious West Midlands CrimeSquad. When I broached his reasons for leaving hesaid it was when he had found the same large packetsof heroin being discovered for the third time in a rowin a hapless suspect’s home.So, the news that Jimmy Savile was given free roamon any poor child who entered the BBC TelevisionCentre is not too surprising. Even back in the 70s wehad heard rumours, tales that had reached a poor milltown, yet had bypassed the BBC.Funny old world.

[email protected]

By Andy Carling

CONSTRUCTIVE AMBIGUITY

The EU rarely makes headlines in Japan,but the European Council’s decision of 19October to start negotiating a Free TradeAgreement with Nippon became the firstand foremost news on NHK Radio inJapanese. Euro-Crisis aside let’s celebrate,not only the Nobel Peace Prize for theEU’s past, but the mandate for an ‘Eco-nomic Partnership Agreement’ to shapeEU-Japan’s future! Notwithstanding thatMinisters still have to hammer out de-tailed conditions. And in the backgroundmighty smiths wait to raise their weightyhammers loaded by millions of jobs in in-dustries, notably of the European roadand rail transport sectors. Some of the is-sues will become red-hot, but not glowingsoft on the anvil of Brussels lobbies.

Most of the customs tariffs already sig-nificantly came down in the row ofRounds of the multilateral WTO ma-chinery. Now, the nitty-gritty of non-tar-iff barriers have become for journalist theanecdotal and often sexy substance of bi-lateral trade talks. Like taboos in relationsbetween the genders, NTBs typically liebehind the border, often seen only by in-siders and mostly misunderstood by theuninitiated. It is not easy to penetrate thehomogeneity of Nippon to the point of anintimate native if you are a natural blondand locally without a trustful bond. Thencommunication --even in Japanese-- isbetter done over the phone in order not toprima facie distract visually already byyour “gaijin” (outsider) appearance. Re-member, the Japanese in their past historyhad top-down isolated their culture over

centuries. They even amongst themselvesoften use formality to keep the unin-formed newcomer outside their all-defin-ing groups. And they interpretcompetition in their own language as ri-valry (“kyousou”, incl. the character of“arasoi”), like opposing Sumo wrestlersamongst whom only one can win over theother rather than concurring runners whomight arrive at the same time.

However, all that may be changing nowin Japan, and the peace-prized EU mightbe part and parcel of the driving forces to-wards a new Japan that also might findsome peace with its politicians.

In its long history, Nippon time and againhas (been) opened. Early on, it was for im-ports of convincing culture and commercialgoods from China and Korea, then more re-luctantly for frightening firearms andChristian missions from Europe. The latterthreatened the island country into the iso-lation of “sakoku” when only the Dutch ofDeshima could teach the feudal elite aboutthe West through the filter of “rangaku”(Holland studies). Later, the Meiji-elitemanaged the external civilisational pressureand preserved their “polder” by selectingforeign know-how wisely from the winnerof wars in Europe, even compliantly chang-ing military uniforms when Prussia wonover France. After WWI, then after theAmerican Occupation post-WWII, nowfollowing the Fukushima Incident, half-century sequences of re-opening seem tocontinue. Man-made as its main cause wasreportedly, thus also will be the efforts tostart anew after the physical and politicaldestruction with the Fukushima disaster.

However, different from the periods

after the WWs, these days Japan canfreely choose its path.

Here exactly comes Europe’s chance tochange Japan!

About every second speech on EU-Japan relations starts by pointing out the‘common values’ we share. However, let’sface it, that has not always been the casein reality. If there are any differences in‘the West’ between the EU and the USA,Japan has often managed to score a pointfor itself, from divergent standard settingall the way to the cruelty of the deathpenalty …

It was in Kyoto that the EU convinc-ingly pushed a green agenda for the firsttime truly omnilaterally, although in theend it got ratified among only a plurilat-eral few, notably excluding the USA (andChina), but including the --albeit still re-luctant-- host country Japan. Now, sinceFukushima, even a fledgling Green Partyis trying to take off and regular Fridaydemonstrations in Tokyo are showing PMNoda the power of the people outside hisoffice and of the collusion of the “gen-shiryoku mura” (lit. nuclear power village)of business, politicians and academics thatshunned his predecessor Kan into ‘cannot’(keep his job)...

In contrast to American ‘quantitativeeasing’, northern Europeans stress auster-ity and some French discuss “décroissance”of the economy.

However, the extremely low birth-rateof Japan provides even more reason to re-flect about domestic de-growth, awayfrom increasing quantities towards sus-tainable qualities not only in energy con-sumption but also of other resources.

For Europeans competition policy is notnecessarily American anti-trust, but con-centrates more on the interest of the con-sumers. As the Japanese Government isshifting emphasis from big business car-tels of former “zaibatsu” and later“keiretsu” that internationalise on theirown towards now the promotion of inno-vative small and medium-sized enter-prises (SMEs), competition literallymakes sense. It goes without saying thatSME internationalisation paves a two-way path. Here European can meet withJapanese SMEs, burdened by similarproblems of generational change andoften offering complementarity of prod-ucts. With competition gaining ground asa positive incentive amongst Nippon’sbusiness, also in its international tradepolicy contest-stimulation according toSchumpeter should trumpet over protec-tive mercantilism of Ricardo. That also isa lesson that we Europeans are learning aswe are moving further towards ‘imports toexport’ in value-chains of production.

Through an EPA with Japan, the EUwants to create a level playing field fortrade and give both sides’ consumers thechoice, but not to change anybody’s cul-ture. “Vive la différence!” Just like thebending but engaging Sumo-san inWoluwe Park in Brussels cannot changethe idol of handsomeness for Europeans.Our cult remains with Hercules on thehill or Apollo in the museum of myhometown Kassel. But innovative ideas,services and goods from ‘the others’ alsodeliver food for thought on values incommon.

(To be continued)

EXTERNAL RELATIONS

The EU’s chance to change Japan? 11NEW EUROPE

4 - 10 November , 2012ANALYSIS

A 50 euro banknote is seen between two Japanese 10,000 yen banknotes in Tokyo, Japan. A free trade agreement between the two economies could be a blessing for the Japanese economy which has faced various chal-

lenges in the last year.

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By Wolfgang Pape

ATHENS - Russian gas monopoly Gaz-prom is one of the 14 companies that haveexpressed interest in the privatisation ofDEPA, Harry Sachinis, CEO of the Greekstate-controlled natural gas supplier, toldNew Europe on 30 October, adding that it isup to DEPA’s shareholders to handle the saleof the company.

“Fourteen companies have expressed inte-rest and Gazprom is one of the 14 compa-nies,” Sachinis said, adding that companieshave until 5 November to submit their non-bidding bids. “By 5 November we will knowwho is coming, who has real interest, whichare the biggest special offers and we’ll take itfrom there,” he said on the sidelines of a con-ference organised by the Institute of Energyfor South-East Europe (IENE) focusing onthe Geopolitical and Development Angle ofGreece’s Energy System.

Asked if an acquisition of DEPA by Gaz-prom clashes with EU efforts to diversify gassupplies and could create problems betweenthe Greek company and the European Com-mission, Sachinis said, “I don’t think so. Withthe existing legislation in Europe anyone cansupply gas; anyone can construct a pipeline ...If the market is attractive to someone, regar-dless who will buy DEPA a new player canenter the market”.

He said DEPA’s acquisition by Gazprom isnot necessary for the Russian company toconstruct the planned South Stream gas pi-peline through Greece. South Stream woulddivide into two pipelines -- one to Greeceand the other through the Balkans -- after itpasses through the Turkish waters of theBlack Sea.

Sachinis said commercial and strategic

considerations are at play for any companylooking at the Greek market and routes tran-siting the country. “The privatisation ofDEPA is one thing but that does not excludeother [companies] afterwards to take otheractions in the Greek market or the regionalmarket around Greece,” he said.

The European Commission has been pu-shing for the general diversification of gassources for the EU as a whole and wants tohave more gas suppliers in addition to Russia,a Commission spokeswoman told New Eu-rope from Brussels on 30 October. “We wantto have new sources of supply and that wouldbe Azerbaijan or Turkmenistan. And thenwithin the European Union we want to havemore competition and that’s why in the ThirdEnergy Package there is this unbundling pro-vision, which should guarantee that every-

body can use the gas pipeline system so notonly the main importer can use it because healso owns it, but he has to offer the servicesalso to other companies,” the spokeswomansaid.

Greece is seeking to sell DEPA and itsfully-owned DESFA gas grid operator unit.An industry source told New Europe talkingon condition of anonymity that Gazprom isvery interested in DEPA and “would do eve-rything” to acquire the Greek company, in-cluding offering a much higher bid. “ButGazprom will never get DESFA [whichowns the pipelines],” the source quipped.“Gazprom knows it and that’s why it has notpursued DESFA,” the source added.

The Commission spokeswoman said a pri-vate company can always acquire other com-panies “as long as they stick to the EU rules.”

Now in Greece the problem with the internalmarket rules in energy is only if the gas im-porter also owns the network, she said. “Fir-stly, one would have to see what kind ofunbundling Greece has opted for. It is alwaysthe case that the company which imports thegas has to sell or cannot be the owner also ofthe pipeline. There are different options – it isalso possible that you also have a sort of sub-sidiary or you have a manager who actuallyruns the pipeline,” she said.

“In terms of diversification it’s not like wesay: ‘Look we do not want specific companiesto be in there’ but it’s just a question whetherthe law will be applied and this is the unbun-dling so for Greece I don’t know. They have-n’t told us yet what kind of system they haveopted for,” the Commission spokeswomansaid. “And then we have to see what reallytheir plans are. That’s why it is difficult to say,”she added.

Meanwhile, Greece is also involved in buil-ding the Trans-Adriatic Pipeline (TAP) thatwill carry Azerbaijani gas across Greece, Al-bania to Italy. Greece’s Deputy Minister ofEnvironment, Energy & Climate ChangeMakis Papageorgiou, who earlier reiteratedhis country’s intention to become a regionalelectricity and natural gas hub, told New Eu-rope on the sidelines of the conference on 30October that plans to bring gas from Phase 2of Azerbaijan’s Shah Deniz field are “pro-gressing”. TAP is competing with NabuccoWest for 10bn cubic metres of gas fromAzerbaijan. Papageorgiou said there is poli-tical commitment for TAP as shown by thememorandum of understanding that hasbeen recently signed between the Italian,Greek and Albanian governments in NewYork to support TAP and there would bemore political steps.

ENERGY|GAS

Gazprom closes in on Greece’s DEPABy Kostis Geropoulos

During a meeting with Russian gas monopolyGazprom head Alexei Miller on 29 October,Russian President Vladimir Putin approved aplan to invest tens of billions of dollars to tap anew natural gas field in Siberia and build a newpipeline to the country's Pacific coast for ex-ports to Asia as part of Russia’s efforts to tapinto the lucrative markets in the Far East.

Huge gas supplies in the Chaynda and theKovykta fields – of Russia’s Yakutia and Irkutskregion – will be enough to set up an export cen-tre oriented for the Asia – Pacific region, Ve-domosti newspaper quoted Putin as saying.

At Putin's Novo-Ogaryovo residence outsideMoscow, Miller briefed Putin on prospects oftapping Chaynda deposit, saying that the fieldis estimated to hold 1.2trl cubic metres of gas.

He said Gazprom plans to build a 3,200-kilometre pipeline linking the field with Rus-sia's Pacific port of Vladivostok. Miller saidGazprom would need to invest 430 billionrubles ($13.7 billion) to develop the field and770 billion rubles ($24.4 billion) to build the

pipeline by 2017.Gazprom is planning to build a liquefied

natural gas plant (LNG) in the Vladivostok re-gion for exports to Pacific nations.

“In the near future we’ll be able to set upgas export capacity comparable with deliv-eries to Europe or maybe even exceedingthem,” Miller said.

As part of its eastward expansion, Gazpromis also planning to build a Pacific-boundpipeline from Kovykta, which is estimated tohold 2.5trl cubic metres of gas, he said.

Miller said Gazprom is considering agree-ments to deliver 68bn cubic metres of gas toChina, as well as 10bn cubic metres to Korea.China could also start buying gas from RussianSiberia.

But Russia is also planning to develop gassupplies targeted for Europe. On 23 October,Putin presided by video link over the launch ofGazprom's giant Bovanenkovo field onthe Arctic Yamal Peninsula. Gazprom hasstarted to develop the giant Bovanenkovo field

in Yamal. From Bovanenkovo, gas will enterRussia's trunk network and be pumped on toEurope. Gazprom said on 30 October that in-vestment will be increased for the trunkline sys-tems construction.

Meanwhile, Gazprom said on 30 October itincreased this year's investment programme by198 billion roubles to 974.65 billion roubles($30.98 billion). Capital investments will total890 billion roubles.

ENERGY|GAS PIPELINE

Gazprom to tap new gas fields to pump gas to Asia and Europe


ENERGY & CLIMATE

Greece’s Revithoussa LNG Terminal operated by DESFA – DEPA’s gas grid operator unit.

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Russia's President Vladimir Putin, right, speaks with Russian gas monopoly Gazprom CEO Alexei Miller

during their meeting in Putin's Novo-Ogaryovo residence outside Moscow, 29 October 2012.

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On 2 November, Turkish EnergyMinister Taner Yildiz said Ankara hassigned a $350mn deal with Iraq to drill40 oil wells in the southern Iraqi Basraarea, news agencies reported. Baghdadand Ankara are also in talks on drillinga total of 7,000 wells across Iraq, Yildizsaid. "We are continuing work with the

central government on opening 7,000wells across Iraq as a whole," he told anews conference in Ankara. He alsotold reporters talks were being heldwith the Turkish treasury on holdinginitial public offerings (IPO) for state-owned oil firm TPAO and statepipeline company Botas, with a TPAO

offering planned first.Yildiz also said official Syrian sources

have sought the renewal of electricity sup-plies from the Turkish private sector andsaid electricity could be supplied as a formof humanitarian aid if the private sectorrenews its contracts with Turkish state au-thorities.

ENERGY|EXPLORATION

Turkey to drill for oil in southern Iraq

British energy giant BP will reportedlydrill 17 new exploration wells in Libya,a senior company official said on 1November. Five wells will be drilledoffshore and 12 will be drilled onshore,the official said. Jasper Peijs, the com-pany's exploration manager-easternhemisphere, was quoted as saying at anAfrican oil conference, "We have lifted

force majeure and started the explo-ration programme in Libya". Althoughofficials at Libya's National Oil Cor-poration, NOC indicated in Septem-ber BP would start drilling in 2013,Peijs did not give a timeline for thedrilling.

"Offshore we have acquired 17,000square kilometres of 3-D seismic in the

Sirte Basin, another commitment to fiveexploration wells and onshore we've ac-quired 14,000 square kilometres of 3-Din the Ghadames Basin and have a com-mitment of 12 exploration wells," he said.Libya aims to raise its oil production to1.8mn barrels per day in 2013, eventhough security in the country remainsprecarious.

ENERGY|EXPLORATION

BP committed to exploration in Libya

TNK-BP may sell its 20% stake in theVenezuelan Junin-6 project to Russianfirm Rosneft, according to a TNK-BPofficial, RT reported on 31 October. Ifthe deal occurs, Rosneft will be the mainRussian operator in the project, with

60% of the country's share. "We want tosell this stake because we are trying toconsolidate our operations in Venezuelaand to focus on mutual relations withone or two specific investors, rather thanwith the consortium," said Jonathan

Muir, TNK-BP's CFO. Two weeks ago,Rosneft agreed to buy 50% stakes ofTNK-BP from its two major share-holders – the Russian Alfa Access Ren-ova (AAR) consortium and BritishPetroleum (BP).

ENERGY|OIL

TNK-BP may sell its Venezuelan Junin-6 stake to Rosneft

Gazprom CEO Alexei Miller said oilarm Gazprom Neft would work withRoyal Dutch Shell to outline a plan forshale oil production in the Upper Salymoil field in western Siberia. "In contrast toshale gas extraction, tight oil productionis of considerable interest for GazpromGroup and we will work actively on thisissue," he said.

Shell and Gazprom Neft formed a jointventure, Salym Petroleum Development,for work in the oil field. “Experts ofGazprom Neft, Shell and SPD created aroad map that defines the steps to achievethe main goal - the development of theBazhenov formation on an industrialscale,” a statement said.

Shale oil hydrocarbons located in WestSiberia in the Bazhenov, Abalak and Frol-ovskaya rock formations with ultra-lowpermeability but high oil saturation lie ata depth of more than two kilometres andspread over more than 1mn square kilo-metres, according to data posted on theGazprom Neft website.

Russian President Vladimir Putin hassaid companies need to reconsider re-source development plans given shale re-

source developments in the United States.However, the Gazprom board of direc-

tors said recently that the abundance ofconventional natural gas reserves in Rus-sia suggests it's premature to start a full-scale examine of shale reserves. "At themoment shale gas production in Russiawould be inexpedient due to the abun-dance of conventional gas reserves withtheir recovery cost being considerably

lower than the estimated cost of shale gasproduction, as well as due to the consid-erable environmental risks," the companysaid.

Gazprom also pointed to environmen-tal issues associated with shale natural gasproduction. There is a danger, said Rus-sia's gas monopoly, that chemicals used inthe extraction process could contaminatewater sources.


ENERGY & CLIMATE

Russia keeps EU

in the dark about

South Stream

Russia has accelerated the implementation of its SouthStream gas pipeline project with Gazprom signingagreements in Central and Southeast Europe likethey're going out of style.On 31 October, the Russian gas giant and Hungarianelectricity company MVM agreed to build Hungary's229-kilometre section of South Stream.Russia’s agreement with Hungary is the second an-nounced final investment decision for a section ofSouth Stream. On 29 October, Serbia’s state gas util-ity Srbijagas also reached an agreement withGazprom, and Bulgaria is expected to sign an agree-ment on South Stream on 9 November.Russian President Vladimir Putin has called for theacceleration of South Stream. Gazprom plans to startthe construction of the underwater section of the gaspipeline in December.But so far, Russia has kept the European Union in thedark about details of the South Stream project. “Forthe moment we have not seen a plan for SouthStream,” European Commission energy spokeswomanMarlene Holzner told New Europe by phone on 30October. “We take note of all the media reports butneither our experts nor [EU Energy] Commissioner[Gunther] Oettinger have seen a plan where it saysSouth Stream will start here, it will deliver gas to thisentry point and it will go exactly following this routeand it will deliver gas from Russia. We have not seenthis,” she added, asked if the Commission was worriedabout the acceleration of South Stream.The spokeswoman explained that the EU requirestime-consuming environmental impact assessmentstudies before the construction of any such large scaleinfrastructure project. “It’s good to talk about acceler-ation but for starting a project in an EU Member Stateyou need an environmental impact assessment. Forthat you need at least one-to-two years and that hasnot been done,” Holzner said. “We have not seen anyroute so we can just take note of what is reported inthe media. But in terms of what we have got, I meanwe have not received anything so far,” the EU energyspokeswoman said.The European Commission’s position on SouthStream has not changed. “Of course we welcome anynew pipeline that delivers gas to Europe, but we pre-fer to have a new source of supply. That’s why we’re indiscussions with Azerbaijan and Turkmenistan to getgas from there,” she said.Holzner said the EU counts on Azerbaijan to makegood on its promise to deliver 10bn cubic metres ofgas per year to Europe but she added that it’s up toBaku to choose between Nabucco and the Trans-Adri-atic Pipeline (TAP). She said Brussels equally supportsboth projects which have priority over South Stream.“If you get gas from Azerbaijan - and we count on thatbecause Azerbaijan has promised substantial amountsof gas and that could be around 10 bcm per year - thenwe would not only have additional amounts of gas anda new pipeline coming to Europe, but it would also bea country where we did not get gas directly before,”she said, adding that the Commission’s priority is tohave a new supplier - a new partner - that would de-liver additional gas to Europe.

[email protected] on twitter @energyinsider

By Kostis Geropoulos

ENERGY INSIDER

Gazprom's headquarters in Moscow. The Russian gas monopoly is examining shale reserves.

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ENERGY|SHALE GAS

Gazprom Neft, Shell consider shale oil project

The disappointment and anger many Ameri-cans feel about their economic lot has held cen-ter stage in this year’s elections. Mitt Romney,of course, blames President Obama. NewCensus Bureau data, however, tell a differentstory. The economic problems facing workingAmericans did not begin with the current slowrecovery or even with the financial crisis of2008-2009 and the subsequent deep recession.A new report issued last week by NDN tracksthe earnings of working Americans of variousages, year by year, as they have grown older. Itshows that average working people racked upsteadily-rising wages and salaries through theeconomic expansions of the Carter, Reagan andClinton presidencies. I also found that thisprogress stopped abruptly in the expansion of2002-2007, when people’s wages and salariesstagnated through five years of strong produc-tivity gains and reasonable growth.

This new analysis recasts the significance ofour current slow recovery. As many economistshave pointed out, slow recoveries are the normwhen an economy suffers a serious financial cri-sis, whether it was the United States and Eu-rope in the 1930s, Latin America in the 1980s,or Japan in the 1990s. In fact, the Obama pro-gram stopped a dangerous spiral towards a sec-ond Great Depression and restored modest jobgains that have far outpaced the job growth fol-lowing the 2001 recession. The economy nowseems poised for stronger growth over the nextfour years. The outstanding question iswhether the programs offered by the Presidentor Mr. Romney can address the forces thathalted earnings progress in the 2002-2007 ex-pansion. The evidence suggests that Obama’sprogram comes much closer to that mark thanRomney’s proposals.

To answer that question, we first need an ac-curate picture of how Americans have reallyfared economically over the last two genera-tions. To capture people’s actual economic ex-perience over that period, I tracked the medianwage and salary earnings of various age cohortsas they aged over the last 45 years. We followedthe earnings path of working Americans age 25in 1975 until they reached 55 in 2005, those age25 in 1985 until they reached age 50 in 2010,and those age 25 in 1995 until they reached age40 in 2010. A clear pattern emerged. Theearnings of working people grew by 2.8 percenta year as they aged through the Carter expan-sion of 1976-1979, followed by gains of 3.2percent per year through the Reagan expansionof 1982-1989, and then another 3.8 percent peryear in the Clinton expansion of 1992-2000.Then came the expansion of 2002-2007, whichproduced annual wage and salary gains rang-ing from 1.7 percent for those in their 20’s andearly 30’s, to negative 1.5 percent for those intheir late 40’s and early 50’s. Across all age co-horts, people’s earnings progress averaged 0.5percent per year through the Bush expansion,nearly 85 percent less than the average wageand salary gains achieved during the three pre-

vious expansions.These findings transcend partisanship. The

policies of the Carter, Reagan and Clinton ad-ministrations all enabled average workingAmericans to achieve healthy wage and salarygains as they aged. To begin, this suggests thatchanges in people’s marginal tax rates – downunder Reagan and up under Clinton — do notmaterially affect whether their wages andsalaries increase as they age. In addition, ofcourse, earnings progress virtually stopped inthe last decade, despite the Bush tax cuts.Therefore, there is no historical evidence thatthe centerpiece of the Romney program, a 20percent across-the-board cut in marginal in-come tax rates, will make any difference forpeople’s wages and salaries.

A serious program to restore earningsprogress has to begin by identifying what haschanged in the economic landscape, so na-tional policy can respond effectively to an eco-nomic environment that stalls that progress.One factor almost surely involves the budgetdeficit. When deficits ballooned in the 1980s,President Reagan and Congress stabilizedthem, largely by ending his defense buildupand raising taxes on businesses (1982), pay-rolls (1983), and energy use (1984). Whendeficits ballooned again in the 1990s, Presi-dent Clinton and Congress moved the budgetto surpluses largely through defense cuts,Medicare changes and tax increases onhigher-income households. Strong gains inwages and salaries in both decades also werecrucial to curbing those deficits, by expandingthe revenue base for income and payroll taxes.By contrast, when the deficit ballooned in2001 and 2002, and earnings stagnated, theBush administration enacted another tax cutin 2003, increased entitlement spending forthe new, unfunded prescription drug benefit,and expanded Pentagon spending for the wars

in Iraq and Afghanistan.Obama’s program seems much more likely

to address this factor than Romney’s plan. ThePresident’s deficit proposals mirror those ofReagan and Clinton, covering defense cuts, ad-ditional revenues, and spending restraints inMedicare and discretionary programs. By con-trast, the Romney program begins with largeincreases in defense spending and big, new taxcuts. In recent weeks, to be sure, he suggestedthat he would pare back his tax cuts to ensure“revenue neutrality.” But he remains unalter-ably opposed to the revenues increases that allof his predecessors except George W. Bushused to help control deficits. That leaves hispledge to control deficits entirely dependent onthe Ryan budget. He will have to persuadeCongress and the public to accept a Medicareprogram reorganized around vouchers, state-run Medicaid systems with one-third fewer re-sources, and the deepest cuts ever seen in federalsupport for education, natural resources, law en-forcement, export promotion and everythingelse. Once again, there is no historical evidencethat Mr. Romney’s approach will bring deficitsunder control.

Another force shaping the new economiclandscape is globalization. China’s total importsand exports, for example, jumped from $200billion in 1994 to $500 billion in 2000 and anastounding $2.4 trillion in 2008. Over thesame years, American businesses and workersalso have had to face new competition frombusinesses in many other countries, includingIndia, Korea, Brazil, Mexico, and much of East-ern Europe. This new level of competition hasaffected the wages and salaries of Americans,because it has made it much harder for Amer-ican businesses to pass along their cost increasesin higher prices. The result is that those com-panies have cut other costs, starting with thewages and salaries they pay.

Globalization is not going away. So, the onlycourse available to ease this new pressure on theearnings of Americans is to help businesses ad-dress some of costs which rose rapidly in the2002-2007 expansion – namely, health care andenergy. Once again, Obama’s program seemsmore promising than Romney’s plan. For ex-ample, Obamacare includes numerous provi-sions which may help slow fast-rising medicaland insurance costs. They range from new pre-vention programs and active promotion of cost-effective best practices, to mandatory coveragefor healthy young people. But Romney is com-mitted to repealing all of these reforms andwould depend instead on the current patch-work of private competition which has provedunable to make a dent in these costs.

On the energy front, both candidates pledgeto expand our supplies of fossil fuels, which inrecent years actually have increased substantiallyon their own. However, Obama also wouldcontinue to actively promote alternative formsof energy. Romney wants to end those efforts.In addition, Obama says he will continue to usenew federal laws and regulations to increase en-ergy conservation and efficiency. For example,he raised fuel mileage standards for new auto-mobiles, which effectively reduce unit energycosts. Romney has suggested he would endthese conservation efforts and roll back manyexisting regulations, undoing some of thisprogress in containing future energy costs.

The central economic challenge facing thenext president is to restore healthy wage andsalary gains for average Americans. This chal-lenge will not be met by cutting taxes androlling back government. Rather, it will take asustained effort to address the forces which, fol-lowing 25 years of steady gains, have stalled fur-ther earnings progress for the last decade. Onthe basis, the President’s program offers muchmore promise than Mr. Romney’s agenda.

US POLITICS

Americans and their earningsWhat actually happened to the earnings of working Americans, and what the next president can do about it

By Robert Shapiro


ANALYSIS

Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks to supporters before collecting food and supply donations during a Kettering Storm Relief

event on October 30, 2012 in Kettering, Ohio. The election campaign has been sidelined but is now building up steam again following Hurricane Sandy and in preparation for

November 6, election day in the US Presidential elections.

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Our writer looks at

four films by Werner

Herzog, Cave of Forgotten

Dreams, Grizzly Man, En-

counters at the End of the

World and Into the Abyss,

hoping to find the mean-

ing of life.

“

One of Europe’s eccentric cultural treasuresis the Bavarian film-maker Werner Herzog“I’m not German, I hate Germans”, whosefilms often deal with the obsessed, thedriven and the overwhelmed by naturalforces they fail to understand. Although heworks in many genres, a series of recent doc-umentaries has shown that he has a talentfor finding the little question that unlocksa great truth and that, as he says, “a film-maker must look into the heart of man.”

So, what can Herzog show us about life,the universe and everything? I settled downone Sunday evening with a handful ofDVDs to find out.

First on was ‘Cave of Forgotten Dreams’released in 2011, Herzog was given accessto the Chauvet cave in southern Francewhich contains cave paintings that are over30,000 years old. These are no scrawls onthe walls, but complete works of art thathave tremendous skill and the power tomove, indeed they appear to move, beingdesigned to use the curves and features ofthe cave walls, under the flickering lightsthey begin to dance.

But more than that, they are the birth ofthe human artist, the urge to create, to ex-press, to be more than an animal, more thana mere survivor.

The cave is a recent discovery, havingbeen blocked off by a huge landslide around29,000 years ago, leaving the scene com-pletely untouched, with the paintings look-ing impossibly fresh and the floor coveredin bones and footprints.

The timescale can hardly be grasped byour modern minds. There are thousands ofstalagmites and stalactites, up to a couple ofmetres in height, but when the cave painterswere in residence, none of them existed.These stone towers that seem to be perma-nent are but a measure of how long the cavehas been in hiding.

The camera gazes round this precious andfragile environment, where visiting restric-tions are so tight, this will probably be theonly time the cave will be filmed. For theonly time in his career, Herzog used 3Dfilming to capture the space properly and all

the footage has been passed to the Frenchgovernment, who helped support the film.

The scientists are interesting andthoughtful on their research into peoplewho seem so close, yet forever out of reach.

Why no self portraits, or even human fig-ures? The only partial figures are those of awoman’s legs and genitals, around which aman/bison is entwined. Was this a sacredplace? Or was this the dwelling of a crazyeccentric, rather like our director?

We will never truly know our early ances-tors, but by the confident and skillful art wecan catch a shadowy glimpse of somethingthat can’t be merely quantified like an arche-ological exhibit, but a sign that we are olderand more complex that we have assumed,rather like the nouveau riche quietly sneer-ing at previous generations the neitherknow nor understand.

After this mediation on the creativespark produced by the interaction of an-cient man and animals, some of whoseevolutionary journey has ended, it seemednatural to watch ‘Grizzly Man’ next, thestory of Timothy Treadwell, who livedwith bears in Alaska each summer. Likethe cave painters, the subject of this filmhad also passed away before attractingHerzog’s attention, but had also left im-ages behind, the quality of which attractedthe filmmaker’s attention with their inti-mate quality.

Treadwell may be one of the most irritat-ing characters on film, but respect for himgrows as the film progresses and, despite hisshortcomings, his full on attitude and com-mitment shines through.

Herzog gently peels away the layers toreach the essence of Treadwell. Visiting thepeople whose live she touched a pictureemerges of a young lost soul who renouncedalcohol and found the love and kinship hecraved with the animals. “I had no life be-fore the bears” he says suddenly looking very

fragile. He also politely takes away the pre-tence that he was doing any actual bear pro-tection and finally, the almost cloyingsentimentality Treadwell had for the animalkingdom, the delusion that may have cost

him his life, killed by a bear whilst finishingone of his expeditions, the anthropomor-phism that he confused for insight.

Part Two: Looking over the edge, next week.

CINEMA

Life, the universe and Werner HerzogPart one: Ancestors and animals


ARTS & CULTURE

By Andy Carling

Werner Herzog (R) and crew in front of a remarkable painting of horses and fighting rhinos.Werner Herzog

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ADVERTISEMENT

Jean Verame, a Belgian artist, has come

to be known as “the painter of the

deserts”. Originally from Ghent,

Verame has spent much of his career

creating multi-dimensional ‘land art’ in

deserts and other natural settings world-

wide.

Mr. Verame’s original desert artwork was

“The Blue Desert” which was created in

1980. Following the 1979 Egyptian-

Israeli Peace Treaty, Verame visited Sinai

with the idea of painting a line of peace.

After spending much of two years per-

suading the Egyptian government to

allow him to make his vision a reality, he

was granted the permission to do the

project by then - Egyptian President

Anwar Sadat.

The United Nations funded the supply

of ten tons of paint for the project.

The project is located close to Mt. Sinai

in an area that saw several battles during

the fighting between Egypt and Israel.

Verame painted several large boulders

blue to symbolize peace in the region,

and the colors offer a striking respite

from an otherwise barren landscape.

Verame painted on over six kilometers in

this part of the desert.

Following his work in the Sinai region,

Verame began using similar techniques

in landscapes elsewhere. In 1984, the

artist painted what has come to be sim-

ply called “The Painted Rocks” in

Tafraoute, Morocco.

With the help of the Tafraoute fire

brigade, Mr. Verame used 18 tons of

blue, pink, red, and black paint to color

massive boulders in this valley in the

Atlas Mountains.

This enormous work of art, though

faded over time, is one of the more pop-

ular attractions of the developing

tourism industry in the region. A reno-

vation project has been considered

recently which would return the work to

its original glory.

In 1989, Verame travelled to the war

ravaged northwestern Chad region of

Tibesti to further his message of peace.

Despite still-active mines and surveil-

lance planes flying overhead, Verame

and his assistants painted twenty-nine

groups of rocks bright blue, red, violet,

black, and white.

The artist believes that the desert holds

an important “mythology of humanity”

and considers his work therein a “reli-

gious act, but with no attachment to any

one religion.” The ultimate goal of the

artwork is to remind viewers of the

peace that exists in the absence of

humans in these places, and that peace

between nations can and should exist.

17NEW EUROPE4 - 10 November , 2012ARTS & CULTURE16NEW EUROPE

4 - 10 November , 2012ARTS & CULTURE

The Fallen Astronaut lies face down on the

dusty bedrock of the moon. Even with a plaque

embedded in the regolith nearby, the armless,

8.5-cm tin figure resembles a forsaken toy.

In a way, it is a relic of another time. American

astronaut Dave Scott snuck the creation of

Belgian artist Paul Van Hoeydonck on board

the Apollo 15 and then left it at Hadley Rille,

a northern region of the moon and the desti-

nation of one of NASA’s most dangerous mis-

sions. Scott dedicated “The Fallen Astronaut”

to the 14 known American and Soviets who

had died in space up to that point. The plaque

listed the names of both the astronauts and cos-

monauts.

This was in 1971. In the 40-plus years since, the

Cold War has ended. So has the space race.

The Apollo program ended in 1972, and a

man has not walked the moon since. While

progress in space continues, it lacks the urgency

and flare of the years before “The Fallen

Astronaut” was laid to rest.

But “The Fallen Astronaut” has not been for-

gotten. The tribute serves as a reminder, and

perhaps a symbol, of space exploration’s impor-

tance to humanity in the latter half of the 20th

century. More recently, it has inspired new

efforts to give the moon some culture.

Apollo 15 was the first “long-stay” mission to

the moon. It began on 26 July and ended 7

August. Scott and fellow astronauts Jim Irwin

and Alfred Worden stayed on the lunar surface

for 67 hours and used a lunar roving vehicle for

the first time. The mission was considered pre-

carious because of its landing point in the

moon’s northern hemisphere and the length of

stay. NASA called it the most successful mis-

sion to date.

Less than two months earlier, three Soviet cos-

monauts had died when they lost pressuriza-

tion upon re-entry to Earth. Scott felt the loss

of life on both sides warranted a memorial free

of politics or animosity.

“We just thought we'd recognize the guys that

made the ultimate contribution," Scott said

after the mission.

Scott met Van Hoeydonck at a dinner party.

The Belgian artist had been fascinated by the

moon and space since childhood. In the decade

prior to Apollo 15, his best works included

“Cities of the Future”, “White Planets”, and

“Planetscapes.” The interaction between

humanity and space defined his work.

Scott asked Van Hoeydonck to create a small

sculpture that would commemorate the

deceased astronauts and cosmonauts. Scott

requested the figurine be sexless and not iden-

tifiable by race. It also had to be as lightweight

as possible while sturdy and durable enough to

withstand the moon’s worst weather. In addi-

tion, Van Hoeydonck would have to remain

anonymous – NASA wanted to prevent any

commercialization of space.

Van Hoeydonck complied, and Scott got his

aluminium figurine. Toward the end of the

mission, he went to “clean up” behind the Rover

while Irwin distracted Mission Control. Scott

placed the figurine and plaque, which listed the

dead alphabetically, and snapped a few photos.

ADVERTISEMENT

Belgian Artist is “the Painter of the Deserts”

Fallen Astronaut

“The Blue Rocks of Tafraoute” in Morocco’s Atlas Mountains

Cecil Beaton is mainlyremembered as a costume,set and interior designer,

and even more so as a prominentfashion photographer and theRoyal Family’s official portraitist.However, little is known of hiswork for the British Ministry ofInformation during World WarII. London’s Imperial WarMuseum, which houses 7000prints and negatives from 1939-45, by the famous photographer,currently showcases the exhibition‘Cecil Beaton: Theatre of War’(held till January 1st, 2013) as anattempt to trace back this periodof Beaton’s life.

Born in 1904 into a wealthy fam-ily, Cecil Beaton studied atCambridge where he becameacquainted with socialites andmembers of aristocracy and took aninterest in drama and photography.

Having a certain talent for mun-danities and a particular ability tomake useful connections, by 1927Beaton was working for BritishVogue and later for Condé Nast andAmerican Vogue until he was firedfor publishing an anti-Semitic car-toon in 1938, an event that cooledhis relations with American pub-lishers for years.

‘Redemption’ came from hishomeland, when he was commis-

sioned to photograph QueenElizabeth, the Queen Mother, atBuckingham Palace in 1939. Onthe eve of World War II, Beatonwas advised to take part inBritain’s propaganda campaign.

He then approached the youngKenneth Clark, who wasChairman of the War Artist’sAdvisory Committee andDirector of the National Galleryat the time, and who had super-vised the evacuation of theLondon museum’s art collectionsto Wales. Clark had persuaded thegovernment to avoid conscriptingartists in order to use them forpropaganda and the support ofthe population’s morale.

Poet Dylan Thomas, forinstance, wrote scripts for films,while photographers were sent tobombed cities to document thewar and to produce images thatcould be used to thwart Nazipropaganda.

Thus, commissioned by theMinistry of Information, CecilBeaton, first photographed theevacuation of children from Britishcities and then the destructioncaused by the Blitz, the Germans’strategic bombing of Britain andNorthern Ireland betweenSeptember 1940 and May 1941. Atthat time, London was bombed for76 consecutive nights, and over 20000 civilians were killed.

Cecil Beaton’s photograph ofwounded 3-year old EileenDunne recovering at the hospitalbecame famous around the worldand deeply touched Americanpublic opinion. This imagebecame as iconic as ‘St. PaulSurvives’, shot by Daily Mailphotographer, Herbert Mason, onDecember 29th, 1940, date of the

114th night of the Blitz. In thispicture, we see St. Paul’sCathedral surrounded by smokebut still intact, as a symbol ofBritain’s courage and resistance.

From 1940 onwards, Beaton led adouble career, as a fashion and soci-ety photographer on one hand, andas a shadowy Ministry ofInformation employee, on the other.He regularly wrote and publishedpropaganda pieces about RAFpilots’ fight and took pride indemonstrating national ship build-ing efforts in British Vogue.

The Ministry later sent CecilBeaton on overseas assignments tocover parts of the North AfricanCampaign in the Libyan andEgyptian deserts, whenLieutenant-General Montgomeryended the German threat onEgypt and the Suez Canal in 1942.

Beaton also covered the Burma

Campaign (1943-44), in whichBritish Commonwealth forcesopposed the Japanese army. Thepropaganda here implied thatBritish and Indian soldiers couldfight and survive in the jungle’sawful conditions as well as theJapanese troops could.

With the war coming to an end,Cecil Beaton was finally commis-sioned by Vogue to cover the firstpost-war Paris fashion week in1945. Free again, he was then ableto devote himself to his long-timedream of becoming a praised andOscar-winning costume and setdesigner. Made Chevalier de laLégion d’Honneur in 1960 byGeneral de Gaulle (whom he hadphotographed on Paris’ LiberationDay), Cecil Beaton also receivedKnighthood in 1972.

Louise [email protected]

Cecil BeatonCairo, Egypt, 1942

© IWM (Imperial War Museums)

Cecil BeatonA Sailor repairs a signal flag on board the armed merchant cruiser HMS Alcantara, 1942 ©

IWM (Imperial War Museums)

Cecil BeatonMen of the Long Range Desert Group, Siwa, Libya, 1942


Cecil BeatonBomb damage to a fire station, Tobruk, Libya, 1942


Cecil BeatonBomb damage, The Church of St. Lawrence Jewry, Guildhall, 1940


War & HonourCECIL BEATON: THEATRE OF WAR EXHIBITION – IMPERIAL WAR MUSEUM, LONDON

By Sam Stewart

By Andrew Wagaman

18NEW EUROPE4 - 10 November , 2012 BRUSSELS AGENDA

Welcome to NE’s Brussels Agenda. All you need to know for a complete professional and personal life in Brussels. Would you like to advertise in New Europe’s Brussels Agenda? Ask for more info [email protected] or don’t hesitate to call us at +32(0)2 5390039

An initiative of the Foundation for the Arts, Brussels

LAST MINUTE TICKETS FOR SHOWS & CONCERTS AT -50%

Avec le soutien de LA COMMISSION COMMUNAUTAIRE FRANÇAISE

Tickets for half price for performances and concerts on the same day. Arsène 50 offers you every day a wide range of performances, advises you in your choices and takes care of your reservation.

www.arsene50.be

Ticket sale: - At BIP, 2-4 rue Royale (Place Royale) 1000 BruxellesTuesday to Saturday, from 12.30 pm to 5.30 pm- Online on www.arsene50.beTuesday to Saturday, from 2 pm to 5.30 pm

Salle à l’étage ● Banquets - réunions - Terrase en été

Cosmo Cuisine

Av. de Tervueren,1051040 Etterbeek - Bruxelles

Tel: 02/ 732 43 31Fax: 02/ 733 61 17

RESTO BITESMumbai DreamsRue Basse 9, 1170 Bruxelles , Tel 32 2 3754093www.mumbai-dreams.beThere are not many Indian restaurants in Brussels so for those wholike a damn good curry it's best to know where to head for.This restaurant on the outskirts of the city is one such place.It was opened on 1 April last year by Rajesh Dalaya and his wifeDipa and has since proved a big hit in this part of Uccle.Rajesh creates in-flight dishes for a range of airlines but readily ad-mits that cooking for diners at this cosy restaurant is his "passion.""All the food comes out of my hands and that gives me great pleas-ure and pride," says Rajesh, who arrived in Belgium in 1989 hav-ing worked at top hotel restaurants in Mumbai, previously calledBombay. The menu includes old favourites like sheikh kebab andsamosa as well as chicken tikka masala, roghan gosht and tandoorichicken. Previously a Thai restaurant, this 25-seater diner is a greatchoice for those who fancy a little trip out of the city for a rathergood meal. Judging by the quality of his cooking it is easy to see whyRajesh was chosen by some of the world's leading airlines to pre-pare dishes for their business class passengers. Give MumbaiDreams a try, it will be well worth the effort. Open daily.

Requiem20:00, 8 November, La Monnaie, For its annual requiem concert, La Mon-naie presents a dialogue between two re-markable works under the baton ofLudovic Morlot. Alfred Bruneau, known

for his talent as a music critic, has unjustlybeen forgotten as a composer. One of hismost ambitious works is the Requiem forsoloists, chorus and orchestra, in which heuses spatial effects for maximum dramaticimpact. A different type of ‘requiem’, moreintimate, is Berg’s magnificent ViolinConcerto. Initially it was a commissioned work, butfollowing the tragic death of 18-year-oldManon Gropius, Berg dedicated the com-position to ‘the memory of an angel’. Thiswas Berg’s last completed work, Lulu wasto be left unfinished. The link betweenliturgical work and secular concerto isBach’s chorale ‘Es ist genug’ which is re-ferred to in Berg’s concerto, ‘Nun guteNacht, o Welt!’

Mass Appeal Happy Bethday

Beth Orton19:30, 21 November, BotanniqueFolk or electronica? Beth is both, havingfirst found recognition for her vocalwork with the Chemical Brothers andWilliam Orbit, including a gorgeouscover with Orbit of John Martyn's"Don't Wanna Know 'Bout Evil". She isfull of praise for him, ""I think Williampulled me out of the crowd and pulledme out of the gutter, in a way. Because I

don't know where my enthusiasm wasgoing to take me, because it was prettyraw to say the least."The mid 90s brought her more recogni-tion and recently she has moved awayfrom electronica towards more folkishacoustic music.But it is her voice people will want tohear, and her latest work on the albumSugaring Season, her fifth studio album,and first new work for six years.

Exhibition by Painter Babis Pilarinou 6 November 2012 Periple, a gorgeous hub of creativity inboth ceramic, jewelery, books and art hub,on Rue Du Froissart will be launching anexhibition by well known painter BabisPilarinou on 6 November between 18:00- 21:00.The painter was born and grew up in Za-kynthos, Greece and is known for usinga popular technique mixed with a Byzan-tine style.The tone of his painting could be de-

scribed as dreamy, story telling and an ex-pression of simple pleasures mixed with asubtlety that is both childlike and in-tensely detailed, portraying optimism anda means of escape from today's troubles,whether economic or social.A generous offering, not to be missed.

James Bond is fifty. For those of you whomissed the hullabaloo, hue and cry andgeneral consternation, the release of thenew movie, Skyfall, featuring the suavesuper-spy, represents a milestone in theongoing Bond story, it is the 23rd film, ahalf-century since he first donned aTuxedo and supped a vodka Martini,shaken, not stirred.

The movie business, not least the flag-ging British film industry, is, therefore, incelebratory mood; the commercial successof the Bond franchise guarantees not onlyprofits for the studio and its attendant tel-evision off-shoots and other such deals,but also a worldwide audience, often ofimpressionable youngsters, with whom itcan indoctrinate with its dodgy view offoreign policy.

This may seem harsh, but as NaomiWolf succinctly points out in a recentessay, the last presidential debate betweenPresident Barak Obama and challengerGovernor Mitt Romney, which focussedon foreign policy, was infused with thekind of back-to-basics black-and-whiteview of geopolitics that permeates theBond films, the product of original authorIan Fleming.

In Fleming’s, and Bond’s, world, thereare good guys and bad guys. In Obama’sand Romney’s worlds, this is, apparently,also the case.

“Romney asserted that his foreign pol-icy was ‘pretty straightforward’, wroteWolf. “It was, he said, ‘to go after the badguys, to make sure we do our very best tointerrupt them, to kill them, to take themout of the picture’”, she said of the recentdebates, pointing out that what should bea serious debate about who should havecontrol over the free world was instead re-duced to a simple fanboy drool-fest on theease and moral certainty of civilian killing;

something that is, apparently, not at issue.Obama, speaking at the same debate asRomney said as much; championingdrone strikes that “kill bad guys” andcrowing about killing Osama Bin Laden,America’s answer to Ernst Stavro Blofeld.

While it is undoubtedly true that bothcandidates are simplifying things to get acertain message across, it is equally truethat their language, taken from fifty yearsof movie sadism (no villain is dispatchedwithout a quip) speaks to all sections ofsociety, both reactionary old and impres-sionable youth; except, of course, women,who really do know better, and, as a newdocumentary, The Invisible War, reveals,

are not even safe within the confines oftheir own government structures.

Obama and Romney may revel in theirown macho posturing in an attempt towin votes, but serious armed forces re-form, not to mention a serious, contem-plative and humane foreign policy – not avote winner, not headline news – is muchmore needed than grabbing the attentionof the whooping masses on CNN. This isa hard sell, apparently, much easier to fallback on the James Bond, video-game ver-sion of events; death not jail, black ops,not judicial process.

The James Bond movies found popular-ity in the early 1960s. It was the perfect

time; the era of the post-Sputnik backlash(to quote Peter Byskind), when Psychotold us what we needed to know aboutfamily, and when the western worldswung rightwards. Bond was a vigilantegiven state approval.

Bond flourished under a Democraticpresident,who, under the shadow of thecold war, was fighting a rearguard actionagainst the conservatives, trying to playthem at their own game, just as Harry HTruman had done earlier. Obama, underthe falsified threat of the war on terror, isdoing the same. Fiction is seductive;elected officials, should be immune to thatallure. If not, then we are all doomed.

POLITICS

Just keeping the American end up By Cillian Donnelly


EU WORLD

Republican presidential nominee, Mitt Romney: US foreign policy is "pretty straightforward...to go after the bad guys, to make sure we do our very best to interrupt them, to

kill them, to take them out of the picture".

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US ELECTION

What do polls have to say about US elections?

According to a New Europe online poll,conducted among 1306 people, BrackObama will most probably win US elec-tion 2012.To the question Who do you think will bethe winner of the 2012 US presidentialelection,70% of our online readers havesaid that the current US president will wina second mandate.On the other hand, 30% of the respondentsin the poll thought that Mitt Romney willbe the next US president.Turning eyes to international polls, a recentstudy of Gallup International showed that54% of Americans thought Obama willwin, while only 34% predicted that this

would be Romney.According to Gallup, these views areroughly similar to where they were in Mayand August, although slightly more Amer-icans currently did not have an opinion ei-ther way. Their percentage was 11, whilebeing only 6% in August and 8% in May.The results were based on conducted in-terviews before Hurricane Sandy hit theEast Coast. Gallup pointed out that it wasunknown what effect the storm would haveon Americans' voting preferences or theimpact of the storm on Americans' per-ceptions of who is most likely to win theelection.Apart from what polls say, we are about towitness who will become the next US pres-ident on 6 November.

By Stanislava Gaydazhieva

The solutions provider Huawei announcedon 30 October the launch of its new report“Superfast Britain? Myths and realities aboutthe UK’s broadband future” to assess the po-tential impact of a superfast broadband infra-structure on the country's economy.

The report, which was published by theEconomist Intelligence Unit (EIU) andcommissioned by the Chinese company,concludes that obstacles that are slowingthe implementation of superfast broadbandmust be addressed over the next five years.

Besides, according to the document, whilethis new transmission's system will have along-term positive impact to the economy,the shorter-term impact is likely to be lesspronounced than the initial transition tobroadband from dial-up connections.

“The advent of superfast broadband iscertainly an opportunity to boost the UK'slong-term competitiveness; however, it maynot have the immediate impact on theeconomy that has been predicted in somequarters,” said Denis McCauley of theEconomist Intelligence Unit and editor ofthe report.

Issues like shortage of digital skills acrossmany industries and antiquated workingpractices and business processes, should“evolve if high speed data connections areto be utilised to their full potential”, Mc-Cauley stated.

By providing internet access to all mem-bers of UK's society, including citizens liv-ing in remote locations and the elderly, thecountry would experience the same impactas the imminently expected increase ofspeed and bandwidth in urban areas, the re-port explains.

However, benefits obtained after the ap-plication of superfast broadband won't be

immediately obvious outside of the short-term boost provided by infrastructure re-lated engineering projects.

Within those benefits, UK's governmentexpects to create growth and jobs. A majorstudy from the London School of Eco-nomics (LSE) argues that investing £5 bil-lion into high speed networks would createsome 280,000 new jobs, both directly andindirectly.

In addition, a Nesta report highlights thatnext-generation broadband offers “dra-matic” new possibilities for both UK busi-ness and society. It cites examples rangingfrom cloud computing for businessesthrough to online doctor consultations, es-pecially for the elderly.

“We live in the information age and ac-cess to broadband for businesses and indi-viduals has never been more important”,explained Victor Zhang, chief executive,Huawei UK, adding that the ICT solutionsprovider “wants to foster debate about thesocial and economic impact of broadbandand how all of society can be best served.”

In September, Huawei decided to invest$1.3 billion in UK and another $1 billion inprocurement and initiatives over the nextfive years, “of which a considerable propor-tion will be used to deliver superfast broad-band connections and services”, saidZhang. “Our long-term commitment is toimprove the efficiency speed and capacityof both fixed and mobile networks”, headded.

The report was launched at the RoyalInstitution of Chartered Surveyors inLondon in the presence of Minister forCulture, Communications and CreativeIndustries, Ed Vaizey MP; Dido Harding,CEO Talk Talk; Olaf Swantee, CEO, EE;and other representatives of the UK tele-coms industry.

By Nerea Rial

20NEW EUROPE4 - 10 November , 2012 TECHNOLOGY

Superfast broadband in UK can generate 280,000 new jobs | Huawei

France's President François Hollande askedEric Schmidt, Google Executive Chairman,during their meeting on 29 October at theElysée, to solve the dispute with the Frenchpress over revenue sharing from contentposted on its news service before the end ofthe year, or face new legislation.The bill supported by Holland would force thesearch engine to pay for the right to citeFrench articles online, according to an articlepublished by Le Figaro on 28 October.During their gathering, Hollande said hehoped that “negotiations will be carried outrapidly and be conclusive by the end of theyear between Google and the editors of thepress”. He added that “dialogue and negotia-tions between partners looked like the best op-tion, but that if necessary a law could be passedon this matter, as it's happening in Germany."After the ultimatum, Google declined tocomment its opinion to the press, but thismonth the US company sent a letter to severalFrench ministerial offices saying it "cannot ac-cept" the move and added that it would""threaten its own existence, and as a conse-quence would be forced to no longer referenceFrench sites.” "It's not a secret that we think a law like theones proposed in France and Germany wouldbe very damaging to the Internet. We havesaid so publicly for three years," Google addedin an statement. Before his appointment with French Presi-dent, Schmidt met with Communication andCulture Minister Aurelie Filippetti and bothsides remained tight-lipped about discussions.“This European drive will not allow us to bepenniless,” Filippetti said on France Interradio. “We must not think that all the fights

against Internet giants are a lost cause”. Sheadded that it was “only normal that big searchengines contribute to finance the press”.When Germany approved a copyright draftlaw to require the US company and other webbrowsers to pay a fee for reproducing contentfrom news websites, leading French newspa-pers decided to also call on the government toadopt legislation on the long-running disputewith Google.The new law, sometimes called “Google law”,is considered by the French media as a way tohelp support their business, which are underthreat from a migration of advertising awayfrom print media.Online advertising earns about €2.5 billion inthe country and half of this money is obtainedby the search engine. In comparison, newspa-pers' market advertising represents only €600million and its growth is now declining. Thelaw will force Google to share some of its ad-vertising benefits.However, the fight against Google isn't tak-ing place only in Europe. On 23 Octobermore than 150 newspaper banned GoogleNews in Brazil, and from now the US giantcannot use this content on its service.

Hollande warns Google over revenue lawUS company has two months to co-operate with French media

A cyber attack on the servers of Greek Fi-nance Ministry has leaked classified docu-ments, passwords and information online,just a few days before the Greek Parliamentvotes on another austerity bill.According to The Hacker News, the leakeddocuments include classified informationfrom e-mails that were exchanged betweenthe Greek Ministry and envoys from inter-national lenders, negotiating more austeritymeasures and bailouts. Besides, thousandsof passwords of Greek individuals and eval-uations of banks were also disclosed."Citizens of Greece you are paying Banksand international hedge funds," the hack-ers wrote in a statement on AnonPaste."They own your lives. Revolt before it's toolate. The austerity measures should notpass."“The popularity of far right parties, includ-ing the neo-Nazi Golden Dawn, has risenin tandem”, hackers said. “Your governmentfailed you.” The action was described as one of the mostserious against Greek government net-works, secnews.gr said in a report. In addi-tion, hackers' aim was to expose the data soall citizens can “know the truth”,

ANSAmed published.Anonymous finished its message sayingthat IBM servers from the ministry are notas safe as they want to be and affirmed thatthey have “new guns in our arsenal”.

Anonymous targets Greek Finance MinistryClassified documents were published as a protest against austerity

Google should collaborate or face new revenue law |AFP PHOTO / THIERRY CHARLIER

The hacker group leaked names, documents and pass-words | AFP PHOTO / ANNE-CHRISTINE POUJOULAT

Superfast broadband essential to UK economyHuawei and EIU publish report to discuss the future of connectivity

The tech giant has announced on 30 Octobera reorganisation of its executive ranks when itrevealed that the head of its store operations isleaving after just six months on the job and thatthe long-serving head of its iPhone softwaredevelopment operations is exiting on 2013.

Apple didn't explain why retail senior vicepresident John Browett and iOS software SVPScott Forstall were leaving, but what it's knownis that both have made big mistakes this year.

While Browett cut staffing and made other“unfriendly” changes at firm's retail stores,something which the company considered amistake, Forstall's division launched Apple'sfirst mapping service in September to replaceGoogle Maps and quickly received criticismsdue to its lowest quality.

According to an statement released by CEOTim Cook, entitled “Apple AnnouncesChanges to Increase Collaboration AcrossHardware, Software & Services”, Browett's de-parture is immediate, and the company is look-ing for a replacement. Meanwhile, Forstall willact as an advisor to CEO Tim Cook until he

leaves in 2013. Forstall, who joined Apple in 1997, is con-

sidered as one of the original architects of MacOS X. But from now, his responsibilities willbe divided among the veterans Jonathan Ive,Bob Mansfield, Eddy Cue and Craig Fed-erighi, who will “add responsibilities to theirroles”, the company said.

Because the announcement took place whenWall Street was closed because of the Hurri-cane Sandy, the news didn't have an immedi-ately impact on Apple's shares in New York.

By Nerea Rial

Two top executives leave Apple


TECHNOLOGY

Scott Forstall during an Apple's event in California

EURid, UNESCO to present report on IDNs

The .eu registry EURid and the UnitedNations Educational, Scientific andCultural Organisation (UNESCO) willpresent on 6 November a report on theglobal uptake of Internationalised Do-main Names (IDNs).The study is planned to go out at the7th Internet Governance Forum (IGF)meeting in Baku, Azerbaijan and it willpresent updates to the report publishedin 2011 on the global use of Interna-tionalised domain names which supportnon-Latin scripts and multilingualismonline.IDNs* have become strongly linkedwith Internet governance discussions onmultilingualism. Of approximately 6000 languages in the world, only 12 lan-guages accounted for 98% of Internetweb pages in 2008, while, according toUNESCO data, English was the domi-nant language online with 72% of webpages.According to last year’s joint report, theintroduction of IDNs in the Internetroot domain was an important mile-stone in the development of multilin-gualism on the Internet, especially fornon-Latin scripts, including Arabic andCyrillic. In addition, the study concluded thatIDNs were only one factor in achievinga multilingual Internet, but there waswhat more to be done to achieve thisaim, including securing basic Internetaccess for the majority of the world’s

population, as well as strengthening theenvironment for creating local languagecontent.Furthermore, the links between IDNregistrations and local languages wereclassified as ‘strong’, as for example theintensity of .eu IDN registrations inGreece (Greek script) and Bulgaria(Cyrillic script).Last but not least, it was suggested thatimplementation of key services likeemail would further benefit uptake,making IDNs fully useable.On the other hand, keeping in mindthat by 2016 around 50% of the worldpopulation is expected to be also inter-net users, the threats associated withgrowth of domain names increase.Among the most common threats asso-ciated with growth of domain names in-clude phishing, counterfeiting anddigital piracy.Interest towards domain names is defi-nitely growing with every single year.The Internet Corporation for AssignedNames and Numbers (Icann) for exam-ple published in June this year a listcontaining more than 1 900 new do-main name suggestions. Out of the 1900 new suggestions, only 166 were ofnon-Latin scripts.*Internationalised Domain Names aredomain names that contain non-ASCIIcharacters. These characters include, forexample, the Swedish å, the German ü,the Romanian ș and characters from theBulgarian and Greek alphabets as awhole.

The success of the .рф landrush highlights the impact of user education and marketing on public

demand.

Two of the world’s leading English languagepublishers Pearson and Bertelsmann have anagreement to create the world’s leading con-sumer publishing organisation by combiningPenguin and Random House.

Both companies have a long history of pub-lishing excellence in US and UK, and both havealso been pioneers in the industry transforma-tion into digital content. In this way, the com-bination will suppose an strong rival forAmazon and Apple, where consumers can alsopurchase their books online and around theworld. Currently, Steve Jobs' company has 90%of the UK e-book market, but this can changeafter the agreement.

The joint venture will be named PenguinRandom House, in which Bertelsmann willown 53% of the joint venture and Pearson willown 47%. Despite specific figures of the dealweren't disclosed, according to The Wall StreetJournal, the value of the agreement is between$2 and $3 billion, which means it's unlikely anymoney is changing hands.

Firms believe that this combined organisa-tion will have a stronger platform and greaterresources to invest in rich content, new digitalpublishing models and high-growth emergingmarkets. To achieve these objectives, they willshared resources such as printing and distribu-

tion. Besides, readers will have a more diverserange of content, both in print and digital for-mats, and authors will expand its creations todifferent markets.

According to Thomas Rabe, chairman andCEO of Bertelsmann, the deal “will build onour publishing tradition, offering an extraordi-nary diversity of publishing opportunities forauthors, agents, booksellers, and readers, to-gether with unequalled support and resources.”

“This combination with Random Housewill greatly enhance its fortunes and its oppor-tunities”, stated Marjorie Scardino, chief exec-utive of Pearson.

The merger will be completed in the secondhalf of the next year, because companies are stillwaiting for regulatory approvals from Ameri-can and European regulators. However, whenNew Europe asked the DG for Competitionabout the deal, an spokesperson told the news-paper that “to date, this announced deal has notbeen notified to he European Commission.”

“If and when there is a merger, the compa-nies must know from whom to obtain regula-tory clearance. It can be the Commission, thenational competition authority or several na-tional authorities”, the spokesperson explained,and added that the DG cannot comment fur-ther on the joint venture.

Random House, Penguin to work togetherThe new organisation aims to overtake Amazon and Apple


GERMANY | DIPLOMACY

Further steps towards digital diplomacyThe foreign office of Germany announced the expansion ofits social media presence, to include YouTube, the world'sbiggest video portal, last week. The office created its ownYouTube Channel with the aim to ‘explain Germany in mov-ing images’. The user could find useful information aboutGermany, its culture, politics and economy, but also about thework of the Foreign Office. The presence of informationvideos in seven languages (English, German, French, Span-ish, Russian, Chinese and Arabic) facilitates the use of thechannel for an international audience. The videos can berated by viewers and embedded in web pages, as well as to beshared in social networks such as Facebook, Twitter andGoogle+. According to the Foreign Office, the YouTubechannel was ‘another step on the way to digital diplomacy’.Since September this year, the Facebook page of the Officeis being operated in German, while the Auswaertiges Amthas a stable presence, both in English and German, on Twit-ter under @AuswaertigesAmt und @GermanyDiplo. Ac-cording to Dr Ulrich Strempel speaking at the EuropeanCouncil's conference on Open Government last month, re-sponsible for Internet relations of the Bundestag Press Rela-tions office, the Bundestag is also considering adding aFacebook page to its social media presence in June 2013.

LITHUANIA | POLITICS

Election brings forth Social DemocratsThe European Socialist and Democratic party has wel-comed the election win for Lithuanian Social Democratscalling it a, "mandate from the people for growth andagainst unfair austerity". The Lithuanian Social DemocraticParty Lietuvos socialdemokrat? partija (LSDP) has receivedstrong backing from the Lithuanian people in the secondround of parliamentary elections, placing them as first partywith a total of 38 seats in the 140-seat parliament. HannesSwoboda, President of the Socialists and Democrats in theEuropean Parliament, said upon receiving the results thatthe elections in Lithuania are, “A clear signal that theLithuanian people reject the unjust austerity policies of theprevious conservative government and endorse social dem-ocratic values and social justice.

SLOVAKIA | RETAIL

Shopkeepers set for new regulation Slovak suppliers to shopping malls will be in a better positionwhen dealing with shopkeepers, according to the amend-ment to the law on inappropriate conditions in retail chains,passed by parliament on 26 October. The new law will bringseveral changes, such as charging a fee for being included onthe list of suppliers, entering food into the register of soldgoods as well as paying for services which were not provided,will broaden the definition of inappropriate conditions, witha fine amounting to as much as €300,000, the SITAnewswire reported. The amendment has been criticised byseveral opposition MPs as well as the retail chains. Formeragriculture Minister Zsolt Simon from the Most-Híd partycalled the amendment bad, saying that the shopkeepers willavoid the law by signing agreements with foreign suppliers,which will, in fact, be disadvantageous to local suppliers andwill decrease the amount of Slovak food in stores. ĽubomírGalko from the Freedom and Solidarity (SaS) party disagreeswith shortening the period for paying invoices to 30 days, ex-plaining that suppliers will try to sign an amendment allow-ing longer periods for receiving payments since they will notwant to lose their customers.geous to local suppliers and willdecrease the amount of Slovak food in stores.


EUROPEAN UNION

The German Ministry of Foreign Af-fairs informed that the country will in-crease its humanitarian aid for Syrianrefugees in Lebanon with €1.3 million.

Minister Guido Westerwelle said thateverything possible had to be done tostabilise Lebanon and prevent thespread of the Syrian crisis. In his words,the attack of 19 October showed “thefragility of the situation in the country”.

He added: “In order to improve thesupply of the numerous Syrian refugeesin Lebanon, we will increase our hu-manitarian assistance to them by an-other 1.3 million euro”.

Furthermore, Westerwelle informedof the visit of the German ForeignMinistry director-general for theMiddle East and North Africa, BorisRuge, to Lebanon in the period 29-30October.

According to latest estimates, so far,

Lebanon has received more than100,000 Syrian refugees. It is one of thecountries, together with Jordan andTurkey, to host the highest numbers offleeing Syrians.

Less than two weeks ago, the Ger-man government provided additional€5 million to support Syrian refugees, inthis way increasing the total humanitar-ian assistance of the Federal Govern-ment to Syria and its neighbouringstates to €28.3 million.

Increased support for Syrianrefugees in Lebanon

GERMANY|AID

NSPA talks cross-border cooperation FINLAND|REGIONAL SUMMIT

The northern sparsely populated areasNSPA network, which includes theNorth of Finland's EU Regional Of-fice coordinated, organised in Brusselson Regional Policy Open Days amajor event of cross-border coopera-tion in foundational seminar: "North-ern Sparsely Populated Areas (NSPA)- the heart of the European east-westcross-border cooperation ".

Nearly 200 participants - which in-clude the European Commission offi-cials and representatives fromParliament - gathered to hear the farnorth of Europe of the Regions en-gaging in an east-west co-operationand of its potential.

Norwegian Foreign Ministry StateSecretary Torgeir Larsen emphasizedthe cross-border co-operation of thetool to not only take advantage of thenorth the potential to manage thechallenges. Larsen, Europe is a conti-nent of contrasts, where before thefrozen area is considered to be one ofthe strategic change: arktisuudesta hasbecome almost a fashion statement.

The northern areas are dynamic,and they are opening all the time newopportunities for shipping and rawmaterial utilization ratio, at the sametime, however, ensure that the regionaldevelopment takes place in a sustain-able and balanced development,among other things, respect for theenvironment and indigenous peoples.challenges to opportunities startingpoint also emphasized by other speak-ers presentations.

Swedish Lapland Chamber ofCommerce representative AndreasLind thanked the EU for several com-panies and cross-border trade of thosewho face barriers to be eased, but saidat the same time, although the north-ern regions of the natural export mar-kets in neighboring countries, skilledlabor, and the east-west direction ofthe lack of infrastructure results in thedevelopment of their own challenges.Oulu Mayor Matti Pennanen empha-sized in his speech that it is importantto turn visions into reality. The north-ern regions of the changes will harness

the power of recycling. Pennanencalled NSPA areas including policy-level cooperation and joint strategiesto a range of EU maps, for example,logistics and energy infrastructure in-vestment framework.

European Commission representa-tives also told the seminar in theirviews on how the northern sparselypopulated areas make use of Europeaninitiatives for their cooperation.Dorota Witoldsson the EuropeanCommission's regional and urban pol-icy, the Directorate-General stressedthe Baltic Sea in northern areas is anessential part of the strategy for macro,the EU Strategy for the Baltic Sea Re-gion, the implementation.

When the Commission was askedabout ideas for the future of the BalticSea - and cross-border cooperation,commenting on a macro-regional andregional co-Head of State ColinWolfe hope that the future EU pro-gram aims kokonaisvalytaisempaa co-operation perspective and seeks toremove too country-specific focus.

Syrian children who have crossed into neighboring Lebanon with their families seeking safety from the violence at home attend the start of the scholastic year at a

school in the northern city of Tripoli


AFP

23NEW EUROPE4 - 10 November , 2012EUROPEAN UNION

AUSTRIA |BUSINESS

Ski resort finds Ukrainian buyer A buyer appears to have been found for the traditional Pan-hans Hotel at the ski resort of Semmering, Austrian Inde-pendent reported on 29 October. According to Austrianmedia the businessman Thomas Schellenbacher from StLeonhard am Forst in the district of Melk is now in thelead in the bidding according to liquidator Gernot Hain.According to information available about his company the48-year-old heads the firm Pochlarner IBS Umwelt- undVerkehrstechnik GmbH, and architects and engineers of-fice with a turnover of around € 3,000,000 a year accordingto figures for 2010. Nothing is being revealed from eitherside about the price but the deadline for the settlement andcontract to be signed is 15 January. According to liquidatorGernot Hain he said: "I won't say that I am pleased untilthe money is in the bank account." Schellenbacher couldnot be reached for comment but according to his lawyerBernhard Wagner they wanted to take control and lead thehotel group as a majority owner. Behind Schellenbacher isan international consortium although details would only berevealed later at a press conference. But what is known isthat the money behind Schellenbacher is probably from theeast and most likely from the Ukraine. Last year theUkrainian Igor Palytsia took over 25% of the company andis now managing director. The 39-year-old is well-knownin the Ukraine where he is an MP in the local parliament.Schellenbacher was also in the news in the Ukraine last yearwhen he took part in a major project to build 320 km offlood protection barriers.

UNITED KINGDOM | BUSINESS

Austal to supply three vessels to UK Western Australian company Austal has secured a newcontract with UK-based company Turbine Transfers tosupply three wind farm support vessels. The 27 metre cata-marans will be built at Austal's shipyard in the Philippinesin 2013. The vessels will then be used to support wind tur-bine installation and maintenance activities in Europeanwaters. The new contract follows on from two previouscontracts with Turbine Transfers. Three 21 metre catama-rans were ordered in July 2011 and delivered to Europe ear-lier this year. Construction of a 27 metre TRI SWATHordered in January 2012 is nearing completion at thePhilippines shipyard. Managing Director of Turbine Trans-fers, Captain Mark Meade, said his company was usingAustal technology to support the next phase of wind farmdevelopment which would see a much larger number ofturbines installed farther offshore and in other areas withrougher sea conditions. “Our experience with Austal to date,including bringing our first three Wind Express catama-rans into service, has demonstrated the benefits of Austal’svast experience and knowledge in all aspects of commercialvessel design, manufacture and support,” Captain Meadesaid. “I am pleased to once again work with Austal to de-velop a further three high-quality wind farm service vesselswhich will join our existing fleet which will soon have 30boats. Our operational knowledge and Austal’s skills willonce again combine to deliver better boats to the industry.”As well as building on the success of this existing relation-ship, Austal puts the new contract partly down to its re-newed competitiveness in the international market for smalland medium sized commercial vessels. Commenting on thenew contract Austal’s Chief Executive Officer, Andrew Bel-lamy, said, “Austal decided to pursue the growing marketfor wind farm boats in mid-2010.” “We are still able to meetmarket demand for vessels delivered in the first half of 2014.We continue to aggressively pursue further projects for windfarm boats, ferries and other commercial vessels,” he said.The new Wind Express 27 catamarans will be able totransport 12 personnel and 10 tonnes of equipment/storesto and from turbines.

Bristol, the only city in the UK to voteto change their council system in Maythis year, is going to the polls on 15 No-vember to elect a mayor. Among the 15candidates is Daniella Radice, the onlywoman, who is running for the GreenParty. The remaining 14 candidates in-clude one each from the major partieswith Marvin Rees from Labour, JonRogers current deputy leader of the coun-cil from the Liberal Democrats, GeoffGollop from the Conservative Party, amember from Respect, one from TradeUnionists and Socialists Against Cutsplus nine independents.

On an anti-austerity platform, Radiceis campaigning for issues that require in-vestment such as building schools and li-braries, providing money to localbusinesses by reducing business rates andrents on council owned buildings, reduc-ing transport costs for passengers andeven implementing a few consultationsfor better delivery of services.

With funding to be cut next year andthe money for services by the council setto equal the amount raised by council taxin Bristol by 2018, how will these invest-ments be funded. According to the cur-rent deputy leader Rogers another pledge,the living wage, for which Radice andRees are campaigning cost £800,000 thisyear when it was introduced as a one-off.

Radice plans to increase council tax andraise money through the use of ethical in-vestment bonds such as Transport forLondon and California used in the past.

The California bonds however werenot risk free. Californian city Sacramentohas recently declared bankruptcy afterraising $125 million to pay pensions in abond deal which was underwritten by theinfamous investment bank, Lehman

Brothers. After the market crashed in2008 the bonds lost one third of theirvalue.

"Obviously we would be realistic aboutour borrowing," Radice says. "We knowthat you can only invest in things that willproduce revenue so you can pay it off suchas rent and fares.

"The argument about borrowing goesto the heart of our argument about theheart of what is wrong with the govern-ments' approach to the recession. We be-lieve that cutting off spending in generalis just making the recession worse asmoney is sucked out of the economy."

Independent campaigner Rich Fishercalled bonds "gambling with publicmoney" while Respect candidate maggssays "ethical banking and ethical financeis definitely the way forward. We have toget away from how the banks were be-having in the period up to 2008.

"The Green proposal about the ethi-

cal bonds is a good theory, I'm justskeptical at the moment about whetherit will work because of the way thebanks are behaving."

Geoff Gollop from the Conservativeparty says he "sees it as a really positiveway of getting some alternatives to add tothe limited funds we've currently got".Gollop also intends to raise moneythrough bonds to fund capital investment. Under the Conservative mayor peoplewould be given the chance to invest forinterest from the fixed term bonds or "ifthey have a real passion about the needfor social housing or the need for a com-munity building".

Commenting on the risk associatedwith bonds Gollop said "if you raise fundslocally for specific projects and you arecareful how you invest the money thenyou won't have a problem because themoney is being invested in capital proj-ects which will still have a value".

UK city that changed council

system set for Mayoral vote

UNITED KINGDOM|POLITICS

Those are five of the candidates, from left to right: Daniella Radice (Green party)

Marvin Rees (Labour), Jon Rogers (Liberal Democrat), Martin Booth (chair), Geoff

Gollop (Conservative), George Ferguson (Bristol 1st)

Drones sent to Mali but UN decision holds back

FRANCE|DEFENCE

According to Al Jazeera’s diplomaticsources, a UN Security Council resolutionfor the authentication of military actionsagainst fundamentalist rebels will not beannounced until 2013. In the same timeAssociated Press reported that, after secretnegotiations with US, France decided to

send surveillance drones to West Africa.Francois Heisbourg, member of the state

funded French Foundation for StrategicResearch said, “This is actually a majorthreat – to French interests in the region,and to France itself…it is like Afghanistanin 1996 when Bin Laden found a place that

was larger than France in which he couldorganize training camps, in which he couldprovide stable preparations for organisingfar-flung terror attacks.”

On 20 October, the European UnionCouncil decided to help Mali in recon-quering its vast desert north territory.

By Joanna Papageorgiou

Lactalis agrees to buy majority stake in Ljubljana DairySLOVENIA|INVESTMENT

French company Lactalis has agreed toacquire a majority stake in the Ljubljana-based dairy Ljubljanske mlekarne fromfive shareholders, stock brokerage firmIlirika said in press release on 29 Octo-ber, Invest Slovenia reported.

Ilirika said that Lactalis reached thedeal to buy the 50.3% stake in Slovenia's

largest dairy with investment firms NFDHolding and KD Group, banks Factorbanka and KD Banka and the Sava hold-ing company.

The deal is subject to regulatory ap-proval. The announcement of thetakeover came exactly a week after a rivalbid by Slovenian cooperatives and the

DBS bank ended with the bidders fail-ing to net a majority stake in the dairy.

Mlekodel, a milk trading companywhich acted on the behalf of the DBSbank and 35 cooperatives in publishing atakeover bid on 19 September, managedto increase its stake in the dairy by 4.44%to 36.41%.

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CYPRUS|ENERGY

Gazprom, ENI, Total get bidsFrance’s Total, Italy’s ENI, Korean Gas company andGazprom-subsidiary Novatec have been awarded the li-censes to explore for oil and gas in Blocks 2, 3, 9 and 11 inthe Cyprus offshore Exclusive Economic Zone, news agen-cies reported. On 30 October, the Council of Ministers ap-proved the winning bidders of the second licensing roundin which 33 companies and joint ventures had takenpart. Blocks 2 and 3 have been awarded to the ENI andKogas joint venture, Block 9 to the conglomerate compris-ing Total, Russia’s Novatec (a Gazprom affiliate) and GPGlobal Resources, while Block 11 was awarded to Total.

ROMANIA|HEALTH

Italy invests in hospitalThe Italian group Policlinico di Monza, which owns 10private hospitals in Italy, has made an investment of €40mnin a specialised hospital unit with 140 beds in Bucharest,which has been running since this summer, Romania In-sider reported on 31 October. Construction of the MonzaHospital in Bucharest began two years ago. The hospitalhas seven floors and eight operating rooms (two for cardiacand general surgery, and one for orthopaedics, thoracic sur-gery, vascular, and an emergency room).

ROMANIA|AUTO INDUSTRY

Honda to sell 300 CR-VsCar maker Honda launched the fourth generation of theCR-V and plans to sell over 300 SUVs in Romania nextyear. The new model is equipped with an improved enginethat cuts emissions and has added new technology for in-creasing safety during travel, Business Review reported on26 October. “CR-V is the model we will focus in 2013, asthe SUV segment is the only one in the car market with aslightly increasing trend, said Alexandru Gusetoaia, SalesDirector at Honda Trading Romania.

ROMANIA|BANKING

Agricola Bacau sales upRomanian meat producer Agricola Bacau saw the group’stotal sales amount to 423.3mn Lei (approximately €5mn) inthe first nine months of 2012, up 8% year-on-year, BusinessReview reported on 26 October. The company said it hasmanaged to constantly grow poultry sales over the past ninemonths by a total 5% in volume and 14% in value while over-all the market has remained constant. Grigore Horoi, Agri-cola Bacau’s President, said the group’s 9 month results are inline with this year’s target to boost sales by 10%.

ITALY|EU AFFAIRS

Rome’s EU wakeup callAccording to Italian Foreign Minister Giulio Terzi the timehas come to promote a strong and effective revival of the en-tire European project, to channel all of the available energiesinto revitalising Europe’s competitiveness – on the economiclevel, on the political and institutional levels, “and in our rela-tions with our partners”. Terzi was speaking at the closing ses-sion at the World Economic Forum meeting on “RebuildingEurope's competitiveness” in Rome on 30 October. “We mustrebuild it, I believe, within the European system itself. And atthe same time, we must make Europe more competitive in,and with respect to, the world surrounding it,” he stressed. TheItalian minister pointed out that from the growth perspective,the way to stimulate competitiveness will involve innovation,reducing the bureaucratic burdens on business, promoting in-vestment and creating a legislative framework more favourableto development.


EUROPEAN UNION

After the decision on the accessionof Bulgaria and Romania was post-poned by the Justice and Home Af-fairs Council once again last week,the Netherlands decided that the re-strictions for Bulgarian and Roman-ian workers to its labour market willremain in force until 2014.

The coalition agreement betweenthe centre-left Labour Party (PvdA)and the free market liberal VVDParty was reached on Monday andenvisaged, in particular, a commit-ment to achieve 16 billion euroworth of spending cuts over the nextfour years.

In its part dealing with immigra-tion and integration, the agreementforesaw immigrants to be excludedfrom receiving welfare for the firstseven years of their residency in theNetherlands. In addition, the resi-dency requirement for both voting inlocal elections and nationalisationwill increase from five to seven years.

However, as reported by RadioNetherlands Worldwide (RNW),

amnesty was envisaged for allrefugee children who have lived inthe country for more than five years,while allowing direct family mem-bers to stay with them.

According to Bulgarian media, theagreement reached on Monday alsodealt with the labourrestrictions on Bulgarian and Ro-manian workers. The information

disseminated said that the Nether-lands will continue to keep its labourmarket closed until 2014 when it isexpected the restrictions to be lifted.

Earlier this year, Iceland, Norwayand Italy lifted their restrictions forBulgarian and Romanian labour mi-grants.

However, some Europeanstates, the Netherlands, Germany,Austria, France, the United King-dom, Belgium, Luxembourg andMalta, still express doubts about thereadiness of the two countries to be-come part of the Sche ngen area. Im-portant to mention is that theFrench government decided afterits first meeting on Roma on 22 Au-

gust to provide easier access to thecountry’s labour market for Bulgar-ian and Romanian workers of Romaethnicity.

In April, the deputy director of theClingendael institute for foreign re-lations in the Netherlands, AdriaanSchout, stated that it was unlikelythat Bulgaria and Romania wouldreceive a positive answer from thecountry on Schengen before theelections.

Now, even after the election isover, the unsatisfactory BulgarianCVM report from the EuropeanCommission which came out in Julygives the Dutch politicians anotherreason to go around the decision onenlargement of Schengen.

Restrictions for Bulgarian,Romanian workers remain

BULGARIA|EU AFFAIRS

Government narrowly wins privatisation voteGREECE|PRIVATISATION

A bill allowing the Greek govern-ment to sell some state-owned utili-ties narrowly passed through theParliament on 31 October. One ofthe key provisions in the privatisa-tion legislation was adopted 148-139, and that was after FinanceMinister Yannis Stournaras agreedto amend the bill to allow parlia-

mentary approval for some privatisa-tions. Some members of the Demo-cratic Left and the Socialist PASOKparties, both in the governing coali-tion, did not vote.

A squabble among the three-partycoalition over labour overhauls thecountry must enact as part of the€13.5bn austerity package has raised

doubts in recent days over the govern-ment's ability to secure approval of themeasures in parliament and could fur-ther delay fresh aid for Greece.

On 30 October, Greek Prime Min-ister Antonis Samaras urged deputiesto support the austerity and reformspackage or risk plunging the countryinto chaos.

The Kremlin confirms postponement of Putin’s visitBULGARIA|DIPLOMACY

According to the Bulgarian NationalTelevision (BNT), the Kremlin hasconfirmed the postponement of thevisit of the Russian President VladimirPutin to Bulgaria.

Putin was expected to arrive in Sofiaon 9 November for the signing of thefinal South Stream papers.

On 22 October, speaking on BNT,Bulgarian Prime Minister BoykoBorisov confirmed Putin’s visit for

November. However, it becomes clear now that

the Russian President had no inten-tion of visiting Sofia in November andthe visit will most probably take placein December.

His spokesperson Dmitry Peskovsaid for Russian media that the datesof the visits to Bulgaria and Turkeywere not fixed.

In his words, dates of travel were de-

termined after there was mutual con-sent and the preparation of the visitswas in line with the expected result.

Furthermore, Peskov denied thechange in the schedule of visits to havesomething to do with the health of theRussian President.

Nevertheless, earlier this week,Putin’s press secretary confirmed theKremlin leader was suffering from anold sports trauma.

A Bulgarian border policeman checks a truck at Kapitan Andreevo border crossing point between

Bulgaria and Turkey some 300 kilometres from Sofia.


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25NEW EUROPE4 - 10 November , 2012ENLARGEMENT

TURKEY | METTALURGY

Blue steel a new focus for exportsSeveral domestic companies took part in Turkish Ministry ofEconomy’s project which will boost the country’s internationalcompetitiveness. Turkey's Steel Exporters' Association in-formed that Turkish Ministry of Economy representatives andeconomy minister Zafer Caglayan recently met the domesticfirms at a meeting, Zaman reported. The economy ministry issupporting companies from various sectors to achieve Turkey’starget of $500 billion in overall export value by 2023. Turkey'sSteel Exporters' Union (CIB) recently completed commercialvisits to nine countries and 12 cities in order to increase steel ex-ports to the markets as contained in the support project. Ac-cording to Namik Ekinci president of CIB, the performanceof the project reflects the cooperation of the participant insti-tutions in determining exact requirements and formulating astrong strategy as per requirements. After every commercialvisit, CIB heard the comments of the visitors and also tooknote of criticisms so that a better visit is realised next time. Dur-ing the visits, 4,000 bilateral business meetings with 300 steelimporters in nine countries were held and CIB hosted twopurchasing committee meetings in Turkey. The aim of suchevents is to highlight steel production mills and ensure famil-iarisation between the two sides. Following commercial visit,Turkey's total steel exports to the visited countries saw 75% in-crease in the period.

ALBANIA | ANTI-CRIME

Organized crime network arrested Up to 48 members of an Albanian organized crime networkwere arrested in Mulhouse, France. The case was handled bythe Joint Investigation Team (JIT) consisted of the FrenchNational Border Police (PAF) and the German NationalCriminal Police, with the support of Eurojust and Europol.400 police officers, investigators and prosecutors from sev-eral European law enforcement agencies and prosecution of-fices participated in the operation. The investigations startedtwo years ago mainly in Germany, France and Switzerland,where the criminals were operating. For this purpose a JointInvestigation Team (JIT) agreement was drafted in early2012. Eurojust supported JIT operations by providing €52.000. In addition to this, Eurojust helped also the man-agement of the case with the assistance of its Case AnalysisUnit. Europol from the other hand helped the French, Ger-man and Swiss law enforcement authorities to the exchangeof operational information (cross-matching and tailored in-telligence analysis in real-time etc).The suspects were accusedfor trafficking heroin and cocaine, for illegal immigration andfor using counterfeit documents.

TURKEY | ECONOMY

No tax hikes this yearTurkish Deputy Prime Minister Ali Babacan recently an-nounced that the government has made no plans of taxhikes as of this year, Zaman reported. He went on to saythat the government will not plan any further measures tomeet budget and inflation targets this year although minorsteps would be adopted in various sectors in 2013. He alsosignaled that the government would not be looseningspending in an effort to win more votes. Safeguarding sta-bility in public finance is considered as most important forthe government. The main priority of the government is tovisit polls with a strong macro economic outlook instead ofspending huge amounts to garner particular voters. Baba-can said that the main goal of the Medium Term Pro-gramme for 2013 and 2015 is to increase savings both in thepublic and private sectors. Ion this regard, he mentionedthat the government planned a number of steps to spurfirms to keep profits within the firm rather than distribut-ing them as dividends.

The enlargement process and latest de-velopments in Turkey from a local per-spective was the main subject of thedebate organized on 25 October by theMembers of the Working Group on re-lations with Turkey and the Committeeof the Regions' (CoR). The Ambassadorand Permanent Delegate of Turkey to theEU also participated to the discussion.

Heinz Lehmann (EPP/DE), Memberof Sachsen State Assembly and new chairof the Working Group, underlined theimportance of the negotiations to the de-velopment of the EU accession. Charac-teristically he said “the negotiations needthe involvement of all levels of govern-ment in order to ensure full respect of theprinciple of subsidiarity; a principle legallycontained in the EU Treaties”.

“The relationship between EU andTurkey are on hold” said Selim Yenel,Ambassador and Permanent Delegate ofTurkey to the EU. Yenel stated thatTurkey will promote all the necessary re-forms when it has a real perspective to be-come EU member.

The outgoing chair of the WorkingGroup, Bernard Soulage (PES/FR),Vice-president of the Rhône-Alpes Re-gional Council, addressed that “the EUneeds Turkey and that Turkey needs theEU, but the things are not going well".

Luc Van den Brande (EPP/BE),Chairman of the Flemish-European Li-aison Agency and CoR rapporteur on theEU enlargement strategy 2012- 2013, ar-gued that Turkey has failed to transferpowers to local government as well as in

administrative decentralization.Jean-Christophe Filori, Head of the

Turkey unit in DG Enlargement, pre-sented the European Commission's 2012progress report. More specifically he said"It is of mutual interest for this integra-tion process to continue, all the more sobecause the EU needs to be a benchmarkfor reforms in Turkey".

Tunç Soyer, Mayor of Seferihisar, ex-pressed his disappointment on the newTurkish draft law affecting municipalities.He argued that it had been prepared inhaste. Heinz Lehmann, assured that untilnext meeting, the Working Group willcollaborate with local authorities inTurkey for the development of decentral-isation and local autonomy.

Looking at the accession processTURKEY|COUNCIL OF EUROPE

Turkey suspects that the EU's support for their membership is flagging

Füle confident Bulgaria, FYROM to solve open issuesFYROM |EUROPEAN UNION

According to the press statement ofCommissioner Štefan Füle after hismeeting with the Bulgarian Minister ofForeign Affairs, Nikolay Mladenov, hewas convinced that Bulgaria and theFormer Yugoslav Republic of Macedo-nia (FYROM) could solve any open is-sues in a good neighbourly spirit.

Füle visited Sofia with the aim tobetter understand ‘how Bulgaria's cur-rent policy especially when it comes toFYROM, is matching its own en-largement vision and potential as a keyplayer in the region’.

In Bulgaria, the EU Commissionerfor Enlargement met with the Presi-dent, Prime Minister and members ofthe Parliament.

After his meeting with Mladenov,Füle said that Bulgaria played a keyand ‘very welcomed’ role in enlarge-ment. He added that thanks to its ex-

perience with successful, in his words,transition and its unique geographicposition, Bulgaria had a lot to gainfrom the enlargement process and alsoa lot to offer, especially when it cameto its immediate neighbours.

The purpose of his visit he ex-plained the following way: ‘to discusshow Bulgaria's potential vis-à-vis theregion could materialise fully and howthe European Commission can helpBulgaria play an even more prominentand positive role’.

Even though in his opinion ‘Bul-garia as a Member State sets an im-portant example to the countries ofthe region striving to become part ofthe Euro and Euro-Atlantic struc-tures’, the EU Commissioner ex-pressed understanding about the‘concerns’ of the authorities in Sofiaover the policy in relation toFYROM.

Nevertheless, in his opinion, Bul-

garia and FYROM had strong anddeep ties which would help them solvetheir open issues. As a conclusion headded: ‘I am confident that throughconstructive dialogue and commonunderstanding real progress can beachieved’.

On 26 October, foreign ministerMladenov said that the Bulgarian po-sition at the European Council in De-cember, during which the start ofnegotiations between the EuropeanUnion andFYROM is planned fordiscussion, will entirely depend onhow the government in Skopje con-tinues or changes its current line ofbehaviour towards Bulgaria.

In addition, he clarified that Bul-garia was not blocking FYROM’s EUintegration because ‘it is the countrythat has the highest interest inFYROM making its way to the EU,fulfilling the criteria laid down in EUlegislation’.

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MONTENEGRO|DIPLOMACY

Montenegro, Poland co-operationForeign ministers of Poland and Montenegro recently dis-cussed way to improve the already good ties between thetwo countries, Montenegro Times reported. The meetingwas held in an open and amicable atmosphere. They alsodiscussed issues from the European and the Euro-Atlanticagenda hailing the Visegrad Group meeting. While dis-cussing the general context of the EU enlargement policyprocess, both sides acknowledged that the process has be-come complex and demanding. They stressed that integra-tion in the bloc depends on the individual adherence ofboth countries to meet EU standards.

MONTENEGRO|AIRLINES INDUSTRY

Firms bid for BH AirlinesTarhan & Tower Airlines, Atlasjet and Air Asia recently ex-pressed interest in buying the ownership share in PC BHAirlines, Fars news agency reported. Bosnia-Herzegovina’sFederal Minister of Traffic and Communications Enver Bi-jedic said the criteria for selecting on strategic partnershipwill be which company can offer most acceptable economicoffer concerning foreign investments and development planof PC BH Airlines Sarajevo. Bijedic stressed that deadlinesdepend on dynamic and fulfilling of criteria. After bitter ex-perience with previous partners, the ministry does not wantto create possibility of undefined situations and possible mis-takes damaging for FBiH. The ministry will opt for a grad-ual process, having in mind interest of FBiH in continuationof functioning of the air company in public ownership.

CROATIA|EU AFFAIRS

Germany not block CroatiaAt an economic forum held as part of the SASO fair inSplit, Croatian President Ivo Josipovic is confident thatCroatia will enter the EU on 1 July 2013 underlining thatGermany is a friend and will not place barriers on the pathto EU integration. He made the statement in response tosenior German officials’ objections regarding Croatia’s EUaccession, Javno reported. Josipovic perceives the objectionsas a signal of friendship from Germany and indicates whatCroatia needs to do prior joining the bloc. The presidentsstressed that Croatia will do what is required before joiningEU. Bundestag Speaker Norbert Lammert of the Chris-tian Democratic Union (CDU) said recently that Croatiais not prepared to join the EU on 1 July 2013.

CROATIA|SALARIES

Reducing politicians’ expensesCroatian President Ivo Josipovic recently stated that politicalcircles need to cut their expenses and salaries as an expressionof public solidarity, news agencies reported. He stressed thatcutting expenses of politicians signals a message of solidarity.“We can rethink decisions about buying new cars and eventhink about cutting our salaries. These measures would be agood way of expressing social solidarity,” he said.

KOSOVO|DIPLOMACY

Serbia-Kosovo tiesBritish Foreign Minister William Hague recently paid anofficial visit to Belgrade. He met with Serbian PresidentTomislav Nikolic, Prime Minister Ivica Dacic and DeputyPrime Ministers Aleksandar Vucic and Suzana Grubjesicand other top Serbian officials. British Ambassador to Ser-bia Michael Davenport said that Hague wants to encour-age Serbian leaders to continue and pay emphasis towardfurther progress when it comes to the normalisation of re-lations with Kosovo.


ENLARGEMENT

After talks with Russian gas giantGazprom, which has formed joint ven-tures for all countries where SouthStream gas pipeline is planned to pass,Serbia become the first JV to confirm itwould go ahead.

Gazprom said final preparations for theconstruction of South Stream throughSerbia are secured with the Balkan coun-try's final investment decision.

“A year ago we commissioned SouthStream's first facility – the Banatski Dvorunderground gas storage that shaved gasconsumption peaks in Serbia duringanomalously cold weather,” said LeonidChugunov, a top project manager forGazprom, who lead a delegation to Ser-bia to sign off on the country's final in-vestment decision in South Stream.“Transitioning to the investment stage

at the Serbian section, ahead of all theother countries, will provide new oppor-tunities for the national economy growthas well as secure a long-lasting benefit re-lated to our participation in the project.According to provisional estimates, SouthStream will create in Serbia approxi-mately 2,200 workplaces and attractup to €1.5bn of direct investments,” headded.

Gazprom and Serbia’s state gas utilitySrbijagas will invest in building the Ser-bian section of South Stream and plan toopen it in 2015. “It is a pleasure to us thatthe Republic of Serbia is the first SouthStream member country to adopt thefinal investment decision. The projectis within the schedule and enjoys fullbacking of our Government. We willbe ready to start preparation operations

for South Stream in Serbia soon,” Srbija-gas Director General Dusan Bajatovicsaid in Belgrade on 29 October, cited in apress release. “It is obvious that SouthStream is a project of national significanceand we are elaborating a relevant regula-tion on the project. Moreover, the projectwill assure energy security and additionalbudget revenues for Serbia, create the en-vironment for new projects in the energyand chemical industries that will boostthe inflow of investments and new jobscreation,” Bajatovic added.

The South Stream project, whosestakeholders are Gazprom, Italy’s ENI,Germany’s Wintershall and Electricite deFrance (EDF), is designed to ship up to63bn cubic metres of Russian gas acrossthe Black Sea to southeastern and centralEurope, bypassing Ukraine.

Serbia jumps on the South Stream bandwagon

SERBIA|ENERGY

Dukanovic wants to return as PM or presidentMONTENEGRO|POLITICS

Montenegro’s former prime ministerMilo Dukanovic recently said he plannedto assume the top positions in the coun-try as he believes there has been severalchange in past two years since he steppeddown, Montenegro Times reported.

He stressed that the Democratic Partyof Socialists of Montenegro (DPS)would decide whether he would be aprime minister or president. Media re-ports claimed that Dukanovic’s partici-pation in the election campaign triggeredsome expectations. Pleased with the elec-tions results, Dukanovic had managed toretain the citizen’s faith despite the crisis,adding that door is open for all who

wanted to cooperate with Montenegro.However he added that potential part-ners should accept that “Montenegro isindependent and that it has gone so fardown the NATO and EU pathway thatwe cannot talk about an alternative”. Heexpects relations between Serbia andMontenegro to improve and lauds thechange of authorities in Serbia which isquite promising, both for Montenegroand the entire region.

“I see positions of the Serbian officialsin these past few months as a readinessto have a constructive cooperation inthe region,” Dukanovic pointed out.Meantime, Serbian Patriarch Irinej’s

statements regarding Montenegro’sstate and national identity seems un-controlled but will not create much ef-fect, said Dukanovic. The DPS leaderexpressed hope that problem of dual cit-izenship for Montenegrin and Serbiancitizens would be resolved soon. He in-formed that several efforts were takenafter the referendum but no final docu-ment has been reached yet, althoughthere are chances of happening in nearfuture. Regarding EU integration, hesaid that Montenegro’s path to the blocwould be dynamic but emphasis shouldbe paid to relations in the region and inthe EU.

EU urges Bosnia leaders to resolve ethnic riftBiH|EU AFFAIRS

Bosnia's constitution allows only mem-bers of its three main ethnic communi-ties, Muslims, Croats and Serbs, to runfor parliament or the tripartite presi-dency. The country can come closer toEU and NATO if it overcomes their

ethnic divisions, said Britain's ForeignSecretary William Hague after meetingBosnian Prime Minister Vjekoslav Be-vanda, Fars news agency reported.Hague made it clear that Bosnia canonly be a member of the EU as a single,

sovereign state. Referring hard-lineBosnian Serb leader Milorad Dodik,Hague said, “Those who think there isanother way for Bosnia are wrong, andthose who undermine the Bosnian statewill not be our partners”.

Leonid Chugunov, a top project manager for Gazprom, and Srbijagas Director General Dusan Bajatovic in Belgrade, 29 October 2012.

27NEW EUROPE4 - 10 November , 2012PARTNERS

NORWAY | ENERGY

UK offshore sites part of Statoil expansion Norwegian energy provider Statoil has been awarded sharesin seven exploration licences on the United Kingdom con-tinental shelf (UKCS), Norway Post reported on 29 Octo-ber. The company is operator for two of these, and expectsthis number to increase when the blocks pending environ-mental assessment are awarded. The licences which wereawarded by the UK authorities are part of the UK 27th Off-shore Oil and Gas Licensing Round, and comprise a total of19 blocks west of Shetland and in the North Sea. “Theawards are in line with Statoil’s exploration strategy of ex-panding our core positions. The recent exploration success atthe Norwegian continental shelf (NCS) has made us recog-nise that there is still significant potential in the matureNorth Sea Basin. With these new licenses we are buildingacreage position in proven hydrocarbon provinces,” said NickMaden, senior vice president in Exploration international inStatoil. The bids, which were submitted in May this year, arethe most extensive ever made in Statoil’s history on theUKCS. In the UK North Sea, the most prolific award is forthree blocks in the Catcher area on the Western Platform,where Statoil and Nexen on behalf of a group of five part-ners will be responsible for drilling at least three explorationwells in the coming years. In the Faroe-Shetland Basin, sev-eral interesting licences have been awarded and an extensiveprogramme of seismic acquisition and processing will takeplace in search of drilling candidates in this relatively un-derexplored high- potential region.

SWITZERLAND | ECONOMY

Private bankers look East as tax rules shift In the rapidly changing world of Swiss wealth management,many private banks are shifting their attention to the more re-warding Asian markets to avoid becoming glorified tax ad-visors at home, Swiss Info reported on 29 October. Havingspent decades sheltering the undeclared assets of foreigners,the bubble has now burst – at least for European Union andUnited States clients who now face scrutiny from their tax au-thorities. But wealthy Asians have less to fear from the anti-tax evasion crusade. Private bankers in the Swiss market arefrantically backpedalling as their protective blanket of bank-ing secrecy unwraps before their eyes. Sorting out this messis transforming many banks into quasi tax advisors – or tax“optimisers”. On the other hand, tax accountants workingwith the private banks are very happy with the situation, headded. Private banks are also mirroring the trend of Swiss in-dustrial companies that have been shifting production toother parts of the world – from Bratislava to Beijing. Banksare building up offices in Asia and South America to escapethe crippling costs of new regulations and stagnating businessin Europe. They are also chasing the flow of new globalwealth that is being generated at a faster rate in emergingeconomies than anywhere else in the world.

NORWAY | MANUFACTURING

Norwegian Sea sees more oiland steel capacity buildingAker Solutions has acquired a manufacturing facility inSandnessjoen, Norway, to increase its capacity in the Nor-wegian Sea and further north, Norway Post reported on 30October. The Norwegian engineering company said in apress release that the purchase is part of Aker Solutions'Northern Norway strategy. The facility, which is located atHelgelands Industrial Park in Sandnessjøen, Norway (Hel-gelands Næringspark), is being acquired from Ruukki Con-struction Norge AS. Historically, the core competence atthe facility has been within production of steel structures,including product deliveries to the oil industry. The trans-action value is undisclosed.

Reykjavic University provided thedata needed for Google to make Ice-landic available as a language for livevoice search. Swedish, Romanian,Hungarian and Icelandic wereamong the languages Google addedto their live voice search for Androidusers in August 2012. Over 120,000samples of spoken sentences werecollected for this project which wascalled Almannaromur ("the word on

the street") with the help of 563 vol-unteers. The project was managed byRU´s School of Science and Tech-nology and The Icelandic Centre forLanguage Technology.

The samples form a databank foraudio and text files that makes it pos-sible for a computer to understand thevarious forms of spoken Icelandic.With the live voice search, users canutter their search into their smart

phone instead of typing. The data willbe made available to the public on thewebsite of Google and this is the per-fect opportunity to develop a varietyof natural language processing equip-ment for Icelandic, such as Operatorrecognizer. Raddsýnin be taken upwith the Android G1 phones and isintended to collect approximately 500intraverbals (20-30 minute readings),from 200 people.

Google ads Icelandic to live voice search

ICELAND|TECHNOLOGY

Android phones have now added Icelandic to the list of languages available to live search

10,000 jobs to go at UBS SWITZERLAND|BANKING

Banking giant UBS has announced mas-sive layoffs along with huge losses in itsthird-quarter results, saying it aims totrim as many as 10,000 employees todrastically shrink its ailing investmentbank, Swiss Info reported on 30 October.

Switzerland's biggest bank said that aspart of the cost-cutting drive it "is likelyto have a headcount of around 54,000"by 2015, down from its current 64,000employees among 57 countries. Up to2,500 employees would be affected inSwitzerland, with the rest of the cuts tak-ing place in Britain and the UnitedStates.

"This decision has been a difficult one,particularly in a business such as ours thatis all about its people,” said CEO SergioErmotti. “Some reductions will resultfrom natural attrition and we will takewhatever measures we can to mitigate theoverall effect. Throughout the process we

will ensure that our people will be sup-ported and treated with care."

The UBS cuts will be one of thebiggest bonfires of finance jobs since theimplosion of Lehman Brothers, addingto the tens of thousands of jobs the fi-nancial sector has shed globally since thefinancial crisis of 2008.

UBS also announced a net loss of 2.17billion Swiss Franks ($ 2.31 billion) forthe third quarter, compared with a profitof 1.02 billion Franks during the samethree-month period last year. This was inlarge part due to restructuring costs.

The bank also attributed some ofthe declining profit to a pre-tax chargeof 863 million Franks linked to an ac-counting rule on how banks mustvalue their debt.

In what it called "a significant acceler-ation" in its transformation, the Zurich-based bank said it would sharpen its focus

on the investment bank and appoint anew executive to lead it.

The Swiss bank will separate manyfixed-income activities in order towind down positions in sectors it willexit due to far tougher capital rules onriskier business.

"We will no longer operate to any sig-nificant extent in businesses where risk-adjusted returns cannot meet their cost ofcapital sustainably or in those with highoperational complexity or long-tail riskslikely to weigh on future returns," chair-man Axel Weber and Ermotti wrote in aletter to shareholders.

A smaller investment bank willallow UBS to focus more on wealthmanagement. It has the second-largestoperation of its kind in the world afterBank of America with $ 1.554 trillionin assets according to a compilation byScorpio Partnership.

AZERBAIJAN|DIPLOMACY

Azerspace to launch in 2013Azerbaijan’s first satellite Azerspace, owned by Azercos-mos will launch on 6 February 2013, tailored to provideservices for satellite TV and Internet access. Earlier thesale of most Russian operators of satellite TV was illegalin Azerbaijan but after the launch of the spacecraft theirsale will be a criminal offence, news agencies reported.The launch of Azerspace satellite from Kourou (FrenchGuiana) is being conducted by France’s Arianespace,while American space vehicles manufacturer Orbital Sci-ences Corporation undertook fabrication of the space-craft. Azerspace will have three beams directed at Europe,Asia and Africa. The launch of the spacecraft will providethe country with satellite services and venture into theinternational market for television and Internet accessservices. Russian media sources claimed that by 2015 Az-ercosmos plans to launch another satellite and withlaunch of satellite Azerspace the country’s authorities willblock for Russian operator NTV+ a possibility to broad-cast in Azerbaijan. Data unveiled by National StatisticsCommittee’s data for 2011 showed that 33% of ciziens inAzerbaijan watch satellite television, while in rural areasthe figure is 51%.The ability to connect Russian satellitetelevision in Azerbaijan also exists.


Baku, Brasilia discuss tiesAt a meeting between business circles of Brazil and Azer-baijan in Istanbul on October 30, the sides discussedprospects of co-operation development in the fields of agri-culture and food industry, construction industry, includinglight industry, and other fields, news agencies reported.Within the business meeting, the parties also discussed co-operation prospects, official website of the Azerbaijan Ex-port and Investment Promotion Fund (Azpromo) reads.Statistics of Azerbaijani State Customs Committee showedthat trade turnover between Azerbaijan and Brazil amountsto $132.64mn while share of imports stood at $132.4mn.

GEORGIA|ECONOMY

Georgia ranks highGeorgia is joining the top 10 economies in the global easeof doing business ranking, reads a new IFC and WorldBank report entitled Doing Business 2013: Smarter Reg-ulations for Small and Medium-size Enterprises, CivilGeorgia reported. Doing Business measured that Georgiahas made immense progress in all areas and the top im-prover since 2005 as it adopted 35 institutional and regula-tory reforms. In 2011 alone, Georgia improved in six areasin comparison to any other economy in the world acquir-ing the ninth rank.

ARMENIA|DIPLOMACY

Yerevan, Tehran delegation The 11th session of the Armenia-Iran IntergovernmentalCommission recently opened in Yerevan. A 37 memberdelegation headed by Iranian Energy Minister MajidNamjou, the Co-chairman of the Iranian side of the Com-mission, arrived in Yerevan to participate in the session, Ar-menia Liberty.org reported. During the meeting the sidesdiscussed issues concerning trade and economy, energy,transport and communication, mining industry, nature pro-tection, health, agriculture, labour and social affairs, educa-tion and science, culture sectors and also covered issues ofinter-regional co-operation. At the end of the meeting, theMemorandum of Understanding of the 11th Joint Sessionof RA-IRI Intergovernmental Commission was signed. In2011 the volume of Armenian-Iranian trade already wentup by 13.6% to $323.4 million.


EASTERN PARTNERSHIP

On 29 October, Israel said that Tel Avivconsiders Azerbaijan as a strategic partnerin the South Caucasus and will stick tothis position.

"Political relations between the twocountries have always been good, andeconomic relations have reached a highlevel on their background," deputy direc-tor of the department of the Israeli For-eign Ministry on Central Asia and theCaucasus, Alex Goldman-Shayman, toldAzerbaijani journalists, local media re-ported.Armenia-backed separatistsseized Karabakh from Azerbaijan in awar in the 1990s that left some 30,000dead, and no final peace deal has beensigned since the 1994 ceasefire.

According to head of the departmentof the ministry on Eurasia, Oded Joseph,Israel, as a conflict-affected country, un-derstands the pain of Baku in theNagorno-Karabakh conflict, and alwayssupported the efforts for a peaceful reso-lution of this problem.

Joseph said Israeli Foreign Ministry isagainst illegal visits to the Armenia-oc-cupied territories of Azerbaijan. "Theministry warned its citizens of it and en-couraged to abandon such visits," Josephsaid. Relations between Azerbaijan andIsrael have increased considerably sincethe establishment of diplomatic relationsbetween the two countries. Goldman-

Shayman said energy co-operation playsan important role in the economic rela-tions. "The positions of the two countriesagree on many key issues," he said.

Israeli Tourism Minister Stas Misezh-nikov has expressed his country’s interestin attracting Azerbaijani investment to itstourism industry.

“The Israeli government is ready tosupport Azerbaijani investors in all fields,particularly in the tourism one,” he said.

Misezhnikov noted the Ministry hadsubmitted to the Israeli government adraft programme to reduce the prices of

tourism services in the country, expressingconfidence “this will definitely play animportant role in increasing the flow oftourists from Azerbaijan”.

“Official figures suggest that today thenumber of the Azerbaijani tourists visit-ing Israel is very small, only about twothousand people. But the ministry is in-terested in increasing this figure.”

The Minister said it was not ruled outthat the visa regime between the twocountries would be simplified in the fu-ture with the aim of boosting the numberof tourists.

Israel backs Azerbaijan as strategic partner


An Armenian soldier of the self-proclaimed republic of Nagorno-Karabagh aims his sniper rifle at

the frontline on the border with Azerbaijan, 25 October 2012. Israel said it is against illegal visits to

the Armenia-occupied territories of Azerbaijan.

Ivanishvili outlines government programmeGEORGIA|POLITICS

Bidzina Ivanishvivli, leader of the Geor-gian Dream coalition and future PrimeMinister, met with the parliamentary mi-nority and spoke about the new govern-ment’s goals and plans. According to hisgovernment’s programme, his cabinetplans to carry out “large-scale reforms inall strategic directions” ranging from con-stitutional reform to structural changes inthe law enforcement agencies.

In the first section of the programmepriorities, very briefly it was stated thatconstitutional reform needs to be imple-mented in order to exclude authoritarianrule, at least amending relevant parts ofthe constitution is required at the initialstage. “Most of the six-party Georgian

Dream coalition members prefer parlia-mentary system,” the document reads,adding that “final decision” about consti-tutional arrangement would be after “abroad agreement” within the society.

The programme also outlines the planof structural reform of the Interior Min-istry including de-coupling security serv-ice from the ministry.

The incoming government pro-gramme also plans to introduce a newrule under which chief prosecutor will beappointed by the President with an ap-proval from the Parliament.

In respect of criminal justice system, theprogramme envisages encouraging use ofconcurrent sentencing instead of consec-

utive one. Regarding defence, the pro-gramme stresses the need to increase theDefence Ministry’s transparency and ac-countability. Under the programme, sub-mitting reports, including on defencespending, to the Parliament on the regu-lar basis is mandatory for the ministry.

On local self-governance, the in-coming government says in its pro-gramme that it would make citymayors, as well as heads of municipal-ities directly elected posts. The pro-gramme also aims to create a stable taxenvironment that will not allow fre-quent changes in the tax legislation.

Finally, the programme also introducesa mandatory pension insurance system.

Foreign Minister visits MexicoARMENIA|DIPLOMACY

During an official visit to Mexico, Arme-nia’s Foreign Minister Edward Nalban-dian met with Francisco Arroyo Vieyra,First Vice President of the MexicanChamber of Deputies. At the meeting,Vieyra said the parliament of Mexico in-tends to contribute in the development ofArmenian-Mexican ties, Armenia’s For-eign Ministry said.

For his part, Nalbandian said he waspleased with official Mexico City’s assur-ance to support the OSCE MinskGroup’s proposals for, and the effortsbeing exerted toward, in resolving theKarabakh conflict. He expressed hopethat Mexico’s new parliament will takepractical steps to develop ties with Ar-menia. He mentioned the forging of a

friendship group in Armenia’s NationalAssembly (NA), with the Mexican Sen-ate and Chamber of Deputies. In turn,the Chamber of Deputies will undertakethe formation of a friendship group withNA, added Vieyra. The Armenian min-ister also had a separate meeting withrepresentatives from the local Armeniancommunity in Mexico.

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29NEW EUROPE4 - 10 November , 2012EASTERN PARTNERSHIP

MOLDOVA| AGRICULTURE

Feed grain shortagesMoldova has decided to completely abandon export ofgrain. “Because of the shortage of grain in 2012 the Asso-ciation of grain exporters Agrocer Moldova will not supplyit to the international market,” the chairman of the Asso-ciation Alain Mandate said. "In the country there is a short-age of grain. For this reason the price for it is higher thanabroad. So it is also simply not profitable to export grain forour producers. Prices are high, while stocks are low, we arecurrently selling all we have to local processing facilities andstorages," Mandate said. According to the official staticswheat yield in Moldova in 2012 amounted to 460,000tonnes, 42% lower than last year. Barley harvest was about110,000 tonnes, which is 44% lower than last year's figures.

MOLDOVA|TOURISM

Visa exemption with TurkeyTurkish Prime Minister Recep Tayyip Erdogan, in a jointpress conference with his Moldovan counterpart VladimirFilat, Erdogan said that Turkey and Moldova signed sevenagreements. Noting that the construction of embassy build-ings were continuing in the lands which the two countriesallocated to each other, Erdogan said that the traffic be-tween the two countries would positively be affected withthe visa exemption agreement signed. Many positive effectsof visa exemption will be seen in economic, commercial,cultural and touristic areas in the future, said Erdogan,adding that the current trade volume between the twocountries was $450mn and expressed hope that it wouldreach $500mn by the end of this year.

BELARUS|ENERGY

Russian oil importsIn 2012 Belarus will import the whole amount of Russianoil envisaged in the annual oil supply contract, Belarus’ FirstVice Prime Minister Vladimir Semashko told reporters. Hesaid the negotiations with the Russian side on oil supply toBelarus were held normally. “We discussed all issues andagreed to restore the amount of oil supplies in Q4 to 5.3mntonnes as was envisaged in the annual oil supply balance,”Semashko said.

BELARUS|DIPLOMACY

Minsk, Tehran sign MoU The chambers of Commerce of Iran and Belarus havesigned a memorandum of understanding to lay the ground-work for the further expansion of economic ties betweenTehran and Minsk. Yahya Ale-Eshaq, Chairman of theChamber of Commerce, Industry, Mines and Agricultureof Tehran, stressed the development of Tehran-Minsk ties,news agencies reported. Ale-Eshaq said that Belarus enjoysa secure economic market which facilitates the establish-ment of Iranian companies in the country and provides theopportunity for Iranians to expand ties in various spheres.

BELARUS|LOANS

IMF calls for restraintThe International Monetary fund (IMF) has advised Be-larus to limit the lending of the Government proposals,IMF Mission head David Hofman told the reporters,wrapping up a mission to Belarus on 29 October. The Be-larusian Government’s adoption of meticulous economicpolicy in late 2011 has facilitated trimming down of the in-flation and alleviating the currency market in the first halfof 2012. Nevertheless, the initial success was followed bythe fast reduction of the refinancing rate and rapidly risingsalaries in real terms.

On 1 November, with 98% of the bal-lots counted, the pro-Presidential Partyof Regions has won the Ukrainian elec-tions with 30.23% of the vote and, to-gether with its allies, the Communiststhat took 13.26% of the vote, haveenough to form a majority in Ukraine’sparliament, the VerkhovnaRada. Ukrainian opposition leader YuliaTymoshenko’s party Batkivshchynacame second with 25.36%, boxer VitaliKlitschko’s UDAR (Punch) took13.85% and the nationalist Svoboda(Freedom) won 10.35%. Together theunited opposition won a total of49.56%.

According to the preliminary conclu-sions of the OSCE Office for Demo-cratic Institutions and Human Rights(OSCE/ODIHR), the 28 October par-liamentary elections in Ukraine werecharacterised by ‘the lack of a level play-ing field’.

The main areas left wanting were theabuse of administrative resources, lackof transparency of campaign and partyfinancing and lack of balanced mediacoverage.

Moreover, the observers concludedthat certain aspects of the pre-electionperiod constituted ‘a step backwardscompared with recent national elec-tions’.

The report also found out that ‘pow-erful economic groups influenced thepolitical environment to the detrimentof the electoral process.’ This consistedin a lack of diversity in media ownershipand pluralism, as well as a lack of trans-parency in campaign and party financ-ing.

In addition the observers recognisedthe fact that during the pre-election pe-riod, the election administration, headedby the Central Election Commission(CEC), managed the technical aspects

of the process adequately. Nevertheless,it ‘routinely held pre-session meetingsbehind closed doors, and most open ses-sions lacked substantive discussion’which decreased the transparency of theCEC’s activities.

According to Andreas Gross, theHead of the Parliamentary Assembly ofthe Council of Europe (PACE) delega-tion, ‘Ukrainians deserved better fromthese elections. The 'oligarchisation' ofthe whole process meant that citizenslost their ownership of the election, aswell as their trust in it’. He added: “un-fortunately, the great democratic poten-tial of Ukrainian society was notrealized in yesterday's vote’.

The statement of the observers alsoshowed that Election day was calm andpeaceful overall. However, while thevoting and counting was assessedmostly positively, the tabulation was as-sessed negatively, as it lacked trans-parency.

Furthermore, by election day, theCEC had issued 94 resolutions on 106complaints, most of which were relatedto rejections of applications for candi-

date registration, campaign violations,appearances of public officials in cam-paign events and indirect vote buying.However, the observers said that a largenumber of complaints was dismisseddue to lack of evidence, while at thesame time 79 were forwarded to law en-forcement agencies for investigation.The CEC issued 24 warnings to partiesand candidates following court deci-sions, the lack of effective legal mecha-nisms for the Committee to restore theviolated rights weakened its role to en-sure the integrity of the process.

Audrey Glover, the Head of theOSCE Office for Democratic Institu-tions and Human Rights(OSCE/ODIHR) said: ‘The lack ofappropriate responses by the authoritiesto the various electoral violations has ledto a climate of impunity.’ She noted fur-ther: ‘This has cast a shadow over theelection and the democratic progressthat, until recently, Ukraine had beenmaking.’

The election to the 450-seat Verk-hovna Rada is seen as ’preparation’ forthe 2015 presidential ballot.

Elections characterised by lack of level playing field

UKRAINE|POLITICS

People cast their ballots as they vote at a polling station during national parliamentary elections,

Kiev, 28 October 2012.

Belarus, Ecuador ink memorandum of co-operation BELARUS|CONSTRUCTION

Belarus and Ecuador have signed amemorandum of understanding for co-operation in urban development, de-signing, construction of social housingand implementation of new construc-tion technologies in the Republic ofEcuador was signed in Minsk on 1 No-vember, BelTA reported.

The document was inked by Ministerof Architecture and Construction ofBelarus Anatoly Nichkasov and Minis-ter of Urban Development and Hous-ing of Ecuador Pedro Jaramillo. “Thememorandum will contribute to our co-operation,” Pedro Jaramillo said. In hiswords, while in Belarus the Ecuadorian

delegation paid a visit to the companieswhich produce construction materials,assessed the quality of housing and gotfamiliar with the urban developmentprinciples. “We would like to use yourexperience for our industry includingfor the construction of social dwelling,”he said.

The Ecuadorian minister noted thatthe members of the Ecuadorian delega-tion were impressed by a large-scaleconstruction in the country.

In turn, the Minister of Architectureand Construction of Belarus stated thatthe memorandum the parties signed on1 November would be a logical contin-

uation of the bilateral cooperation thatwas started with the meeting of the twoheads of state in Ecuador. “The pathchosen by the President of Ecuador isaimed at social reforms. It means hous-ing construction in the first instance.The first construction sites have alreadybeen defined. Construction projects willbe implemented in the Ecuadorian de-veloping city of Guayaquil,” the minis-ter said.

Nichkasov noted that partners fromEcuador praised urban development inBelarus and suggested training and re-training of the relevant personnel forEcuador.

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TAJIKISTAN | DIPLOMACY

Rahmon pays first visit to FinlandTajik Resident Emomali Rahmon paid his first visit to Fin-land to meet Tajikistan migrants currently residing in Fin-land, Asia-Plus learnt from the Tajik president’s officialwebsite. On his visit, Rahmon was accompanied by For-eign Minister Hamrokhon Zarifi, State Adviser to thePresident for Foreign Policy Erkin Rahmatulloyev, Minis-ter of Economic Development and Trade Sharif Rahim-zoda, Minister of Finance Safarali Najmiddinov,Ombudsman Zarif Alizoda, Head of Main Geology Di-rectorate under the Government of the Republic of Tajik-istanAzim Ibrohim and some other officials. The TajikHead said that the government is interested in getting na-tives of Tajikistan currently residing abroad involved in theconstructive process in the country. It was reported that dur-ing his visits to other countries, Rahmon always tries tomeet with natives of Tajikistan. So far Tajikistan has estab-lished diplomatic relations with 124 countries of the wordand signed some 1,500 cooperation documents with them,the president noted. After passing the phase of mutual ac-quaintance, relations between Tajikistan and Europeancountries have now reached the stage of expecting for stepstowards each other.

KYRGYZSTAN | MINING

Chinese gold-mining operations see demonstrations Umar Izabekov, Governor of Kyrgyzstan's northern Kemindistrict recently announced that more than 200 people havestaged demonstrations in the district demanding the closureof a Chinese gold-mining company's operations in the re-gion, Irinnews.org reported. The protesters called for closureof the company’s operations as it has killed several Kyrgyzcitizens and also neglected demands to stop environmentpollution. The protesters set up a traditional nomadic tent, infront of Superb Pacific Limited's headquarters in the town ofOrlovka. The protests follow initial protests where 1,000protesters rallied in the Bishkek, calling for the nationalisa-tion of Kumtor gold mine, also situated in the country's north.Canada's Centerra Gold Company operates Kumtor, whichaccounts for 12% of the Kyrgyz economy.

TAJIKISTAN | INFRASTRUCTURE

CAREC programme set to improve regional roadsThe Asian Development Bank (ADB)’s Tajikistan Resi-dent Mission (TJRM) recently stated that the Central AsiaRegional Economic Cooperation (CAREC) Programmewill offer support to more than 500 kilometers of regionalroads in Tajikistan, Asia-Plus reported. CAREC promotesproject-based cooperation in transport, energy, trade facili-tation, and trade policy. The roads which are part of theCAREC corridor network, will ensure safer and faster year-round travel between Dushanbe and borders with Kyr-gyzstan at Sarytash and Uzbekistan at Tursunzoda andPanjakent. Asel Chyngysheva, Officer-in-Charge at ADBTJRM said that improved roads will reduce transport costsand also duration of travel, increase incomes, create em-ployment opportunities, improve access to markets and so-cial services, and strengthen competitiveness. CARECplayed a vital role in serving as a basis for an efficient tradesystem by combining transport investments with trade fa-cilitation initiatives, including customs cooperation andsimplification of cross-border regulations. The upcomingCAREC 11th Ministerial Conference in Wuhan, HubeiProvince, People’s Republic of China (PRC), will be at-tended by a Tajik delegation headed by Negmatjon Buriyev,Senior Adviser to the President for Economic Policy andCAREC National Focal Point for Tajikistan. The event willbe held under the slogan “Ministerial Conference is Im-plementing CAREC 2020: Vision and Action.”


EURASIA

Russia to help in HPPs constructionKYRGYSTAN|ENERGY

Kyrgyz President Almazbek Atambayevrecently attended the symbolic capsulelaying ceremony at the site of the plannedconstruction of the Upper Naryn Cas-cade of hydro power plants, Irinnews.orgreported. When addressing the partici-pants at the ceremony in Naryn, Atam-bayev said, “It is really a historic event. Webegin construction of HPPs, and not one,but a whole cascade. It is a significant daynot only for Kyrgyzstan, but also forbrotherly Russia.” Atambayev said theHPP construction together with Russia

in the republic will ensure its energy se-curity. Moscow is providing assistance toBishkek in carrying out the constructionproject. Atambayev thanked Russia forassistance in building the power chain inthe Central Asian republic. He added, “Iwant to express special thanks to Presi-dent of Russia Vladimir Putin for thesupport for the project, the political willand wisdom.” He stressed the construc-tion of hydro power plants is of great im-portance for Kyrgyzstan. Theconstruction work will begin next

spring.Chairman of the board of theRusHydro company Yevgeny Dod, alsopresent at the ceremony assured thepower plants of the Upper Naryn Cas-cade would be built according to sched-ule. Thousands of workers will be hiredfor the construction. RusHydro in col-laboration with its Kyrgyz partners plansto build four hydro power plants in theupper reaches of the Naryn River. Theproject is worth €410-425 million. Eachof the plants will be built in two years andsix months to three years.

CIS Summit moved to 5 DecemberTURKMENISTAN|ENERGY

Acting as the Chairman country of theCIS in 2012, Turkmenistan will host theCouncil of the CIS Heads of State (CHS)in Ashgabat on 5 December.

The most important document to bediscussed will be the project on 'decisionon the preparation for celebration of the70th anniversary of the Victory in theGreat Patriotic War ' (1941-1945), TheExecutive Committee said in a statement.An agreement on cooperation in the fieldof an integrated currency market of theCIS member states and decisions on theimplementation of activities in communi-cation and information sectors, comprisedthe list of issues in the economic sector.

The draft of the first document envis-ages facilitation of foreign exchange trans-actions by mutual access of legal persons,entitled to conduct foreign exchangetransactions, to foreign exchange marketsof the states.

In comparison to the current proceduresof exchange through authorised banks, theprocedure as contained in the agreementseemed more easier and lucrative. Draftdocuments relating to the security sphereand countering new challenges and

threats, including an agreement on theformation of CIS council of heads of fi-nancial intelligence departments wereconsidered at the meeting.

Long-term development directions ofthe united air defense system of CIS statemembers is expected to get a nod at themeeting. Draft decision on activities of theInterparliamentary Assembly of CISmember states on strengthening of coop-eration in the integration field within CISwas outlined as one of the key documents.

A separate agenda at the talks were per-sonnel issues related to the approval ofChairman of the CIS Economic Court,Head of the Anti-Terrorist Center of CISmember states and the appointment ofChairman of the Coordination Commit-tee on air defence issues of CIS memberstates.

The next meeting of the Council ofthe Heads of the CIS States, which wasexpected to be held in early November,will be held in Ashgabat on December5, CIS Executive Secretary SergeiLebedev said after meeting with Turk-men President Gurbanguly Berdim -uhamedow on Tuesday.

"The Turkmen president has backed theproposal to hold the next meeting of theCouncil of the Heads of the CIS States inAshgabat on December 5. A traditionalmeeting of the Council of the ForeignMinisters of the CIS States will be held inAshgabat on December 4," Lebedev wasquoted as saying in a report posted on theCIS Executive Committee Web site.

"Now we will be preparing for these fo-rums together with all Turkmen structures.I am deeply convinced that they will befruitful," he said.

Lebedev said the Executive Committeeis in close contact with the administrationsof all CIS countries and is discussingpreparations for the upcoming forums.

"These working contacts have causedthe CIS Executive Committee to make adecision to work more thoroughly on thedocuments that will be discussed at theupcoming forums, and therefore some-what postpone them," Lebedev said.

"I am deeply convinced that this thor-ough preparation will enable us to hold theupcoming forums at a better and higherlevel in terms of organization and con-tent," Lebedev said to the Kyiv Post.

Artists perform during a military parade as part of celebrations marking Turkmenistan's Independence Day, in Ashgabat on October 27, 2012. The energy-rich

state holds the world's fourth-largest gas reserves and is a key producer of cotton, its staple export crop produced on irrigated fields.

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RUSSIA|ENERGY

Russia eyes UK NPPsOn 29 October, Russia's First Deputy Prime Minister IgorShuvalov announced Moscow’s interest in the British nu-clear power sector. "We discussed joint co-operation in someareas, including the construction of nuclear power plants.The Russian side is interested in such construction and com-missioning of new plants here in Great Britain in co-oper-ation with Rolls-Royce," he said. The UK has 16 nuclearreactors at nine nuclear power plants, generating about onesixth of the United Kingdom’s electricity. In October 2010,the British government gave the green light to building upto eight new nuclear power plants in the country.

RUSSIA|HUMAN RIGHTS

Presidential HR CouncilOn 1 November, Russian President Vladimir Putin, at ameeting with Presidential Human Rights Council headMikhail Fedotov, proposed increasing the membershipof the council from 40 to over 60 people after more than400,000 votes were cast for candidates to the council in anonline selection process. After Fedotov told the presidentthat around 420,000 votes were registered in an onlineranking of candidates for the council, Putin recommendedtaking three candidates for each of the open seats. "I'm notinsisting on it, but it seems to me that it would be fair [toexpand the council] given that the people who voted on theInternet took this seriously," Putin said. Fedotov calledthe proposal "radical" and "very interesting."

RUSSIA|ENERGY

Gazprom Neft buys fields The oil arm of Russia’s natural gas monopoly, GazpromNeft, acquired licenses to two oilfields in Orenburg. Thetransaction gives Gazprom Neft access to the Baleykinskyand Uranskaya fields, adjacent to its Tsarichanskoe devel-opment, the St Petersburg-based company said. The twodeposits may hold as much as 30mn metric tons of oil, itsaid. “This region remains one of our key priorities,” FirstDeputy CEO Vadim Yakovlev said in the statement. “Lastyear Gazprom Neft acquired three assets in the Orenburgregion and has been expanding its scale of operations sincethen.” The Baleykinsky field was discovered in 2006, butseismic surveys have been carried out in the area since 1979.

RUSSIA|ECONOMY

Manufacturing results Manufacturing companies in Russia said operating condi-tions in September improved for the second consecutivemonth, which marks the best reporting period in fivemonths. Russia’s Manufacturing Purchasing ManagerIndex (PMI) rose to 52.9, going above the long-run surveyaverage of 52.1. Last month the indicator stood at 52.4. Theheadline index has now remained above the no-changemark of 50.0 for the past 13 months; a reading above 50points signals growth in the sector.

RUSSIA|ENERGY

New investments in NISRussian President Vladimir Putin has sent a letter to theparticipants of a ceremony that saw the official launch ofthe modernised NIS Oil Refinery in Serbia, noting thatnew investments in NIS that would reach €1.5bn. "That isonly the beginning - in the shortest term, another €1.5bnwill be invested," Putin wrote. "I send my cordial regards toall the participants in the ceremony of the opening of thenew production complex in the town of Panccevo," theKremlin leader added.

Russian President Vladimir Putin’spress secretary Dmitry Peskov hasconfirmed the Kremlin leader is suf-fering from an old sports trauma, butdismissed media speculation thatPutin’s state of health is affecting hiswork schedule, local press reported.

“We have repeatedly said that suchideas do not have any foundation,”Peskov said. “There was an old injury;we already talked about it in Vladi-vostok. It is not even old, it’s an ordi-nary sports trauma – Putin strained amuscle then,” he noted. “Any sports-man gets injured but this is not a rea-son for restricting activities.”

The comment came after media re-ports suggested that Putin’s state ofhealth had deteriorated, pointing tothe fact that the Russian Presidenthad cancelled several foreign tripsand his visits to Moscow from hissuburban residence have become lessfrequent.

Putin also cancelled a trip in Octo-ber to Siberia to open the new Bova-nenkovo gas field on the Yamalpeninsula. Instead, Putin inauguratedthe field on 23 October in Moscow ina live link-up with the remote region.

A summit of leaders of ex-Sovietstates in Turkmenistan has been post-poned to December after the RussianPreident indicated that he would notbe able to come in November.

Peskov agreed that Putin’s trips toMoscow have become rarer, but saidthe president did not want to aggra-

vate the complicated transport situa-tion as he comes to the city in hismotorcade. Besides, currently thereare no current ceremonial events thatwould require Putin’s presence, headded.

As for the allegedly cancelled for-eign visits, Peskov explained that theearlier-reported dates had never re-ceived official confirmation.

Peskov added that Putin will makeseveral foreign visits in December,such as official trips to India andTurkey and the Russia-EU summit in

Brussels.Putin has carved out a macho

image with sporting stunts that in-cluded piloting a Formula 1 car and ahang-glider flight with Siberiancranes to guide them on their wintermigration path. He is also frequentlyshown on Russian television in hisfavourite sport judo. Peskov deniedthe injury was caused by Putin'shang-glider flight, a stunt ridiculedby bloggers at the time, which also ledto media speculation that he hurt hisback.

Kremlin brushes off speculation over Putin’s health

RUSSIA|POLITICS

Russian President (then premier) Vladimir Putin is examined by a traumatologist at the Smolensk

hospital, 25 August 2011.

Internet censorship law raises freedom of speech concernsRUSSIA|MEDIA

On 1 November, Russia has begun en-forcing a controversial new law, signedin October by Russia’s Prime Minis-ter Dmitry Medvedev, which allowsblacklisting websites that the govern-ment determines has illegal contentwhich includes sites on drugs, suicideand child porn. The “blacklist” is oper-ated by the country’s media and com-munications watchdog, Roskomnadzor.Under the law authorities can now closesites with a wide range of topics that acourt has ruled “extremist”.

The law sparked a wave of criticismamong rights advocates and popularRussian websites who stated it was anattack on freedom of speech and wouldlead to widespread censorship on theweb.

Reporters Without Borders has beencritical of the Russian government’s mo-tives in a statement for failing to “resolvethe law’s contradictions and to eliminatethose that pose threats to freedom”.

Roskomnadzor assures that they willbe able to react “adequately and effi-

ciently” without having to deny accessto large internet portals.

“There was information thatYouTube [the largest video-sharingwebsite] and other sources would beblocked. Obviously, it won’t happen,”Channel One quoted the head of thewatchdog, Aleksandr Zharov, as saying.He explained that if a domain that con-tains legal information publishes a cer-tain illegal picture, it would be obligedto remove it. “The rest will remain un-changed,” he said.

Rosneft sees profit double in third quarterRUSSIA|ENERGY

On 1 November, Russia's largest oil com-pany Rosneft said it doubled its profit inthe third quarter of the year thanks tostrong sales and higher oil prices. Ros-neft's net profit rose to $5.7bn in the July-September period from $2.8bn last year.The increase was greater than expectedin the markets and came despite a mod-

est increase in revenues from $24.6bn to$25.5bn. The better-than-expected per-formance comes 10 days after Rosneftagreed to acquire the whole of TNK-BP - a deal that would make Rosneft theworld's largest listed oil company, pro-ducing 40% of Russia's oil.

TNK-BP, a partnership with UK-

based BP PLC and a group of Soviet-born billionaires, is Russia's third-largestoil company and widely seen as one of themost efficient operators in the country.

Third-quarter production at Rosneft,Russia's top crude producer, climbed to2.73mn barrels of oil equivalent per day,up 1.7% from the second quarter.

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The US election is looking tighter thanever, with Barack Obama moving from astrong lead down to a tenth of a percent-age point over his rival. Of course, theelection could again be decided by aFlorida court, but there is one man inBrussels who is counting on an Obamavictory.

Key to the re-election of Barak Obamamay prove the tobacco farmers vote inseveral States. Large numbers of tobaccoproducers are concentrated in North Car-olina, where one of the world’s major cig-arette manufacturers, R. J. Reynolds, havetheir headquarters in Winston-Salem, butalso in the very critical State of Kentuckyas well as in Virginia, Tennessee, SouthCarolina, Georgia and another six stateswith substantial numbers of tobaccogrowers.

The tobacco lobby in the United Satesis definitely the strongest in the Americancapital as they pay in “votes,” the “hardcurrency” of American politics.

Highly placed sources in WashingtonDC have told New Europe, under condi-

tion of anonymity, that one of the ‘hot’topics discussed in recent private talks be-tween the White House and Berlaymont

(not Joseph II) was the Tobacco Directive.Our sources claim that “if the exercise

works” then, a suitably prominent Euro-pean could get the blessing to become thenext UN Secretary General.

Candidates for the UN top job musthave the support of the Security Council,who put forward names to the UN Gen-eral Assembly, but there are a number of‘informal rules’.

Indeed, John Dalli was never informedof what he has been accused of and he wasnot given the opportunity provided in alllegal system of the world to defend him-self with a final statement.

A European citizen, from a small coun-try, with high level institutional experience,to give a hypothetical example, may feel he’sin with a chance and having the indulgenceof the White House… wouldn’t hurt.

Now, in an election time, anything canhappen and any type of conspiracy theorycan be treated with more gravity than itdeserves, so caution is advised.

But, that last week the president of theCommission was in Ivory Coast and nextweek is planning to visit Indonesia, is cer-tainly a coincidence and the whole thingmay be a conspiracy theory, one of themany.

While Barroso may once have thoughtthat he might have a chance at a thirdterm, that dream must surely have passedby now. As one observer of Berlaymontsaid archly, “Three terms? The man’s awalking argument for a one-term limit!”

Presumed ResignationThis, however, may or may not be the

political aspect of the “execution” of th To-

bacco Directive yet it is not an argumentfor any Court. Justice is a different issueand the years of Armand Jean duPlessis, cardinal-duc de Richelieu et de Fron-sac, who invented the very convenient con-cept of “raison d ’État”, are more than halfa millennium behind.

In this context, the European Commis-sion should give to the European Courtconvincing explanations as to why it vio-lated the OLAF manual during the inves-tigation on John Dalli, which if it did notmost probably Dalli would have been de-clared innocent beyond any doubt.

Indeed, John Dalli was never informedof what he has been accused of and he wasnot given the opportunity provided in alllegal system of the world (including NorthKorea), to defend himself with a finalstatement.

Furthermore, the Commission will haveto explain to the Court how it claims thatJohn Dalli resigned, although he was givenby Luis Romero (the Director of the LegalService of the European Commission) awritten text to sign for resignation, in thepresence of the President of the Commis-sion and the Head of his Cabinet, andJohn Dalli never signed it.

Finally, as to whether John Dalli re-signed or not, we wish to notice that inlegal matters, only “scripta manet” countand this was the reason Luis Romero hashanded to John Dalli a written resignationto sign.

Related documents to the presumedresignation of John Dalli can be found inthe New Europe Online site and are, (1)the Press Release of the European Com-mission of October 16 announcing the“resignation” of Dalli, (2) the Press Re-lease of John Dalli (same date), which theCommission Press Service refused to dis-tribute to the media, (3) the resignationdraft handed to John Dalli (same day) byLuis Romero which Dalli never signed,(4) the letter John Dalli sent to JoseManuel Barroso on October 21 askinghim to invite him to resign on the groundsof article 17.6 of the Treaty, and, (5) thereply of Jose Manuel Barroso to JohnDalli of October 23.

Looking at the documents above andconsidering the request of the Director ofthe Legal Service for a written resignation(which he never received) John Dalli is stilla member of the European Commission.As to the appointment of the second Mal-tese Commissioner, this is something thatonly the Director of the Legal ServiceLuis Romero (who is still waiting for theresignation of the first) can tell us.

Kassandra

KASSANDRA“The choice is of America’s, the impact is forall of us” (CNN announcement ). How you like it?

Page 32 | New Europe4 - 10 November , 2012

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Once upon a time in America...

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The Tobacco Directive death and Obama’s resurrection

Presidents of the European Commission Jose Manuel Barroso (L) and the US Barack Obama. A “τέλεια φιλία,” (telia filia) as defined by Aristotle.

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