New Europe Print Edition Issue 1007

NEWEUROPE19th Year of Publication | Number 1007 | 18 - 24 November , 2012 | € 3.50 www.neurope.eu

On 16 November, Russian PresidentVladimir Putin and German ChancellorAngela Merkel attended a "PetersburgDialog" Russian-German forum in theKremlin in Moscow with the two sidesseeking to soothe tensions over Berlin'srecent criticism of the Russian record onhuman rights.

"We want Russia to succeed," Merkelsaid. "We have our own ideas on how onecan succeed. Our ideas don't alwayscoincide, but what matters is that we lis-ten to each other." Germany needsRussia for raw materials such as gas andoil, while Russia needs Germany to helpin modernisation, infrastructure andhealth care, Merkel said.

In turn, Putin said as for political andideological issues, Russia hears its partners.“But they hear about what's happening

from very far away," he said. On the eve ofthe visit, German lawmakers from Merkel'scoalition urged the government to push formore democracy in Russia as theyexpressed concern over a crackdown on civilsociety since Putin's return to the Kremlinin May.

Before Merkel’s visit, Putin's spokesmanDmitry Peskov denounced a rise in "anti-Russian rhetoric" in Germany. But he saidhe did not expect strong business tiesbetween the two countries to be affectedand that annual mutual trade of $87bn wasa "safety cushion" that would keep ties ontrack.

On 14 November, Russian gas monopolyGazprom agreed an asset swap that willallow the Russian company to take full con-trol of gas and trading storage businesses itjointly owns with Germany’s BASF.

Viagra may be upping people’s sexual lives,

but it’s not bringing any money to the UK’s

‘Her Majesty’s Revenue and Customs.’

Neither does ‘Lipitor,’ the best-selling drug

on the UK market. The reason is that Pfizer,

the pharmaceuticals giant which produces

these drugs may well post a £ 1.8 billion

turnover in this country, but pays no income

taxes at all.

Same goes for other international compa-

nies, such as Starbucks, Amazon, or Google.

The issue is considered serious enough, to

convene the Parliament’s ‘Public Accounts

Committee’ to investigate on how such

multinationals take advantage of the tax leg-

islation, and show little or no profits, shift-

ing the tax burden to the shoulders of the

courageous middle-class people.

The problem is not only limited to the

UK; France has a similar issue with Apple,

Amazon and Google. The latter is under

investigation by the ‘Direction Générale des

Finances Publiques’ for tax noncompliance,

and faces a potential fine of € 1 billion in tax

due and penalties. In fact, Google (which

denies the accusations), is nicely operating

in France and gets revenue from its ads’ sales

to French companies, but books the con-

tracts with French clients in the so accom-

modative and low corporate tax land of

Ireland. This way, Google claims that busi-

ness was conducted outside France, and

thus it has no tax liability in this country.

The figures speak for themselves: for 2011,

reported revenue from potentially highly

taxed French operations was only € 138

million, while revenue from the low-tax

Irish-booked contracts amounted to € 12.4

billion.

The recipe is well known: for companies

producing and selling goods (like Pfizer) it’s

called ‘transfer pricing;’ for companies sell-

ing services (like Amazon or Google) it’s

even easier, as it comes down to the simple

‘booking’ of the business in another sub-

sidiary of the same group. Transfer pricing

means buying the goods at a high price

from a company of the same group located

in a low-tax jurisdiction or paying very high

royalties to a group licensing subsidiary,

owner of the patents and registered in an

offshore centre.

In all cases, the group’s profits are trans-

ferred from the high-tax to the low-tax

country—in Google’s case, Ireland. From

there, the monies transit through various

‘tax optimization channels’ (for example, a

Netherlands ‘BV’ or ‘NV’ called an ‘inter-

mediate holding’), to reach their final desti-

nation, usually an offshore centre like

Bermuda, where they stay safe and tax-free,

waiting to be reinvested somewhere else in

the world.

People pay but do companies?

Putin, Merkel seek to soothe tensions

continued on page 3

Europe's Tax issueITALYOn 10-11 November in Romeabout 1000 people from all theItalian Regions participated atthe “Tecnica” Auditorium inRome at the XIX NationalCongress... ·Page 5

·Page 31

LOBBYINGBy definition, every cent thatlobbyists receive from thetobacco industry is dirtymoney. So why are some ofthese grubby guns for hiretreated... ·Page 7

KASSANDRAThe Israel-Iran confrontationis coming to its final stage asIsraelis are very much awarethat Iran is getting close tobecome a proper nuclearpower...

·Page 32

ENERGYAzerbaijan’s state oil and gascompany SOCAR openedan office in Brussels to boostits strategic energy partner-ship with the EuropeanUnion... ·Page 28

Two men wearing a tent attempting to enter a branch of Starbucks coffee shop near Saint Paul's

cathedral in central London during an "Occupy" anti-capitalist protest in May 2012. British lawmak-

ers grilled global coffee giant Starbucks over its tax policies on November 12, arguing that claims

that its British division was unprofitable "just doesn't ring true". | AFP PHOTO / LEON NEAL

Last week, we mentioned the case ofBivol.bg, a strange internet site, operatingin Bulgaria for years. The site enjoys ahigh popularity, as it is famous for expos-ing ‘stories’ that are not usually found inthe mainstream media; it takes pride inpresenting itself as the closest copycat ofthe famous US site “Wikileaks,”although without having access to thearchive of secret services, as Wikileakshas. And still, part of the audience con-sider this site as a trustworthy and ignoresthe fact that its sources are unknown, andthe ‘facts’ it presents are not always com-patible with reality…

The strange case of Bivol (part 2)

·Page 32

By Christos Kissas

World TV day

0

Celebration

AFP PHOTO/POOL/MAXIM SHEMETOV

NE 10 YEARS AGOThe Commission president prepared for his debate with Clint Eastwood |EPA/ANDRE KOSTERS

The Shooting Gallery

A relaxing swim for the Iraqi dictator, who bought some time at the UN by agreeing to weapons inspec-tions, but he made an unconvincing peacenik. The UN also had another plan, for peace in Cyprus, whichgot the backing of Gunter 'naked commissioner' Verheugen. Naftohaz Ukraine made a deal with Gadaffi todevelop oil with the Libyans. Wonder how that worked out? Thankfully a solution to all this news was athand, in Kazakhstan, where Carlsberg acquired a large share in a local brewer. Bottoms up!

Equality mattersAccording to European Commissioner for Justice, VivianeReding, 14 November was a “historic day for gender balanceand equality” in the EU; it was the day that the commissionpresented its legislative proposals for ensuring a 40% genderbalance on the executive boards of European companies. Shesaid it would “smash the glass ceiling” and finally allow theneglected talent pool of female graduates to be hears inEuropean economic decision-making.This last point is crucial. Economics, rather than equality perse, seems to be the commission’s big argument. Money trumpsmisogyny. You might not like women, but they might increaseyour return on investment. To underline this, in addition toReding, the proposals were endorsed by five commissioners allwith some form of economic interest in their portfolios;Joaquin Almunia, László Andor, Michel Barnier, Olli Rehn(who co-presented the announcement of the directive withReding) and Antonio Tajani. While the commission has high-lighted gender imbalance in the European Union, both social-ly and legally, that still receded behind the money argument.Whether this new law will make a difference, economically, toEurope by 2020 when the directive foresees a 40% female rep-resentation on boards, remains to be seen. There have beenarguments for and against the ultimate merits of the directive(not least in the pages of New Europe), but it does represent apositive step forward for equality in the EU. While this washappening, a tragic story was unfolding in Ireland.On 21 October Savita Halappanavar was admitted to GalwayUniversity Hospital. She was 17 weeks pregnant and in pain.She was found to be miscarrying, and repeatedly asked for atermination, but was refused, apparently on the grounds thatshe was living in Ireland, a Catholic country. She was neitherIrish nor Catholic, but that did not apparently matter. She diedof blood poisoning, on 28 October. Her death, details of whichwere emerging as the commission was unveiling its equalityplans, sparked outrage in Ireland and London, where a protestwas held outside the Irish embassy on 14 November. Therehave been calls for changes in the law, which should have beenimplemented following the X case, which ruled on a 14 yearold suicidal rape victim’s right to travel to the UK for an abor-tion. Subsequent governments, fearful of the delicate and divi-sive nature of the issue, have repeatedly failed to act. That fail-ure ultimately led to this tragedy.Also this week, Tonio Borg, EU health commissioner-desig-nate, was up before parliament, answering questions on hissuitability to take over the portfolio. Borg, who holds stronglyconservative Catholic views, not least on abortion and repro-ductive health, has been the subject of much opposition, whohave highlighted instances where his personal views apparent-ly dictated his policy-making decisions. Borg equipped himselfwell at the hearing, insisting that as commissioner he wouldhold true to European values, rather than his own convictions.doubts still remain, however, about his suitability to run thehealth portfolio.One of Borg’s opponents, Liberal MEP Sophia in’t Veld wasinsistent, correctly, that no one should be pilloried for their reli-gious views or denied office. However, the health portfolio doesrequire an objectivity to issues that he may not personally, ormorally, agree with. It is the same with the abortion issue inIreland (and, to be fair, elsewhere), where lawmakers haveallowed that objectivity to be sidetracked in deference to easyrhetoric.The European Commission may applaud itself for enacting alaw elevating the status of a few already-privileged women totop boardroom positions, but eradicating chauvinism is not justabout who gets that room at the top. It may want to start look-ing wider, and help those who truly need equality.

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ISSN number: 1106-8299

02NEW EUROPE18 - 24 November , 2012 ANALYSIS

Some of the biggest names inglobal commerce stand accused ofusing ‘immoral’ schemes to avoidpaying tax in the EU.

In a three hour hearing in the UKparliament, Google, Starbucks andAmazon executives faced the wrathof members of parliament as theytried to justify their tax structuresthat mean they pay little tax in theUK and other EU member states.

Amazon's public-policy director,Andrew Cecil, refused to answermost of the committee's questionsand claimed that he didn't know cer-tain information about his companyor could not make it public, some-thing that infuriated lawmakers.

“The idea that you come hereand simply don’t answer the ques-tion and pretend ignorance, it’s justnot on, it’s awful,” said MargaretHodge, head of parliament’s PublicAccounts Committee, calling Cecila “not serious person.”

"You've come to us with ab-solutely no information," she said.

Matt Brittin, CEO of GoogleUK, told the committee that thetech giant has its main headquar-ters in Ireland and Bermuda be-cause tax rates were favourable. Healso denied one lawmaker’s accusa-tion that the Mountain View,Calif., based Internet search giantwas breaching its own code of“Don’t be evil.”

“We comply with the law in theU.K.,” he said. “It would be veryhard for us to pay more tax herebased on the way we are required tostructure by the system.”

Not content with the explana-tion, Hodge said that lawmakerswere “not accusing you of beingillegal, we are accusing you of

being immoral.”Meanwhile, Troy Alstead, Star-

bucks global chief financial officer,explained that his company re-ported losses for all but one of the15 years it has operated in Britainbecause of poor performance.

However, Hodge stated that thisinformation “doesn’t ring true”, be-

cause Starbucks is still investing inthe UK.

Alstead explained that the coffeecompany has a “special” tax arrange-ment with the Dutch governmentcovering its headquarters, but hedeclined to give details. “Respect-fully I can assure you there is no taxavoidance here,” he said.

While the single market has beena success, there is now a growingneed to move to an EU wide cor-porate tax system, which the UKand Ireland have opposed, butwithout it, companies that do paytax are complaining that they arelosing a competitive edge to the‘immoral’ tax avoiders.

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03NEW EUROPE18 - 24 November , 2012

ANALYSIS

Amazon's Public-Policy Director, Andrew Cecil, during the three hour hearing in the UK parliament

By Andy Carling

continued from page 1

This mainstream tax avoid-

ance scheme may be comple-

mented by several refinements,

well known to tax specialists, as

well as tax authorities, under

the rather esoteric names of:

thin capitalization, tax treaty

shopping, wrappers etc. And

although specific legislation

has been enacted to prevent the

use of such schemes and limit

tax avoidance, large interna-

tional companies don’t really

seem to be affected. Otherwise,

how could one justify the

colossal amounts of corporate

profits gathered in the various

tax heavens, especially the

‘tropical islands?’ See, for ex-

ample, Tax Justice Network’s

July 2012 Report ‘The Price of

Offshore Revisited.’

And now, the real problem:

in these times of hardship and

recession, when most Euro-

pean countries are struggling

to squeeze their deficits by cut-

ting welfare expenses and in-

creasing taxes, is it socially and

morally tolerable that individ-

uals and small companies alone

bear the whole cost of adapting

to the ‘New Normal?’ Is it ac-

ceptable to let large interna-

tional companies carry on

playing their tax evasion or ‘tax

optimization’ game?

Which leads us to the fol-

lowing question: even if Euro-

pean governments were really

willing to act, how could they

do it, technically speaking,

given the present disparity of

tax rates, regimes, and concep-

tions within the European

Union? And what chances of

success do the so advertized

fiscal and banking unions have

in such a heterogeneous tax

landscape?

Christos Kissas

www.christoskissas.com

The European Council and Parliament are set forshowdown talks on the 20 November due to theirdisagreements over the capping of bankers’bonuses following the ECOFIN meeting.

MEP’s have come out in favour of ratio of 1:1between the level of bonuses that can be paidcompared to the full salary over a year, MichaelBarnier the commissioner for the internal mar-ket has backed the MEP’s in saying that memberstates should soften their stance towards them,and has asked for a compromise to be found.

Sources at the Parliament have also said that amiddle ground is the most favourable outcomeover the issue, and hope that the 20 Novembermeeting will lay the groundwork for a deal to bebrokered.

It is expected that negotiations between bothparties will continue after the first meeting, withthe imbroglio resolved hopefully before the 4 De-cember ECOFIN meeting that will be the lastone of this year.

The Council say that they do not necessarilydisagree with the cap, but wish to implement adeferral principle, where bonuses that are over the1:1 ratio within a financial year can be passed over,and then paid within a five year period.

If bonuses amount to being over the proposedratio then the Council say that they be should becapped at 300% over a year’s salary, although thiscan be extended to 500% if there is a majority voteof over half of company shareholders decide to in-crease the cap.

The advocated single supervisory mechanism(SSM) was also discussed at the ECOFIN meet-ing, where the ECB will have an overseeing roleover all Euro zone banks while in close coopera-tion with national banking authorities.

Negotiations are continuing on how the SSMwill affect non- Euro member states of the EUthat will sit on the outside of the SSM, but stillwish to maintain strong links with the supervi-sory system.

An EU official said : “This is still in the nego-tiating phase and there will have to be a lot of cre-ative solutions to be discussed between now andthe 4 December at the next finance minister’sgathering. Non-euro member states must have toaccept that they will not have the right to vote onsupervisory decisions.”

“It will be a system where the making of diffi-cult choices will be made by the governing super-visory body, the non euro states who still haveambitions to join the euro will be safeguardedfrom conditions becoming too difficult to be in-cluded in the future.”

Any decision taken on this issue will requireunanimous support from the ECOFIN meetingnext month.

To meet the end of year deadline meetings con-tinue over the “Basel II” agreement, approved bythe G20 in November 2010, and concluded bythe Basel Committee on banking supervision in

line with articles 114 and 53(1) of the Treaty onthe Functioning of the European Union. Focus-ing respectively on the functioning of the internalmarket as agreed by the Parliament and Council,and the liberalisation and mutual recognition ofprofessional qualifications.

The vision is to rearrange two legislations intolaw adhering to “Basel III” from the “CRD 4"package, that aims to amend the EU's rules oncapital requirements for banks and investmentfirms. They are a regulation establishing pruden-tial requirements that institutions need to respect,and a directive governing access to deposit-takingactivities.

Also discussed was the common resolution au-thority and a common deposit guarantee scheme,in line with the pledge at the October ECOFINmeeting that both legislations’ legal frameworkwill be decided by 1January next year, the Coun-cil say that negotiations are progressing well and

hope to meet their deadline. The European Banking Federation (EBF)

has kept a close eye on developments this week,A spokesperson said: “Given that the BaselCommittee (BCBS) is finalising its adjust-ments to the Liquidity Coverage Ratio , itseems wiser to wait for the final version beforesetting the details lest the EU applies differentcriteria to other jurisdictions. We would high-light two issues of great importance to the EUeconomy, the run-off factor envisaged in theBCBS for retail customers should be appliedwithout further restrictions, for example to allindividuals regardless the amount of the de-posit and to all SMEs with a turnover of lessthan EUR 50 million.”

“We have consistently advocated strong sup-port for the single rule book in order to createa level playing field for EU banks and reducetheir heavy administrative burden. Our ulti-mate aim is the creation of a true single marketin financial services, not the fragmentation ofthe financial services market. Strengthening ofthe single market in financial services via fur-ther supervisory integration in the EuropeanUnion is a main priority for the EBF, and theproposal for a Single Supervisory Mechanismunder a Banking Union is a vital step in thatdirection.”

The EBF would adhere to more of what theEuropean Council is proposing for bankers’bonuses, with companies having the right to de-cide on pay and approve remuneration schemes.Any further restrictions that are suggested shouldnot be too draconian, as that may drive away tal-ent and imbalance a global market.

“We think that the objectives pursued at Inter-national level and the European Commission,namely ensuring that remuneration schemes aremore strongly integrated components with along-term incentive effect and appropriate riskcharacter, in order to ensure that excessive risk-taking is not encouraged, are right from a risk per-spective.” The spokesperson added.

ECONOMY

EU institutions set to clash over banker bonuses By Peter Taberner


INTERVIEW

A protestor demonstrates outside RBS bank in London, 14 January 2011. Protestors called for an end to bank

bonuses and government cuts.

EPA

/AN

DY

RA

IN

For most of us a typicalday includes getting upin the morning, going towork, interacting withcolleagues and familymembers, and socializ-ing with friends. But for one in five

European women, a typical day involves ver-bal and physical assault, violence, harassmentor other abusive behaviour. Today doesn't have to be another day.According to the EU definition domestic vio-lence is "any act of gender-based violence thatresults in, or is likely to result in, physical, sex-ual or psychological harm or suffering towomen, including threats of such acts, coer-cion or arbitrary deprivation of liberty,whether occurring in public or in private life.The Council of Europe has estimated that

45% of European women suffer some kind ofviolence at least once in their lifetime, andbetween 6% and 10% of women sufferdomestic violence in a given year.At a global level, the UN estimates that one inthree women is subjected to violence from adomestic partner in the course of her life, andthat half of all women murdered are killed bytheir current or former husbands. Other than the cost in human life and digni-ty, domestic violence also comes with an eco-nomic price for our society. Research carriedout in 2010 under the Daphne Programme,estimated that the direct costs of domesticviolence stand at €16 billion annually for EUmember states. If one takes into considerationthe indirect effects on the employment sector,housing and other aspects of life, this figurecould be much higher. In recent years the EU made combatingdomestic violence a high priority by develop-ing policies and extending funding to eradi-

cate violence against women and girls inEurope at all levels. The Council of Europe has gone one stepfurther by instituting the first legally-binding,far reaching international treaty to tackle vio-lence against women. The Convention on prevention and combat-ing violence against women and domesticviolence, also known as the Istanbul Conven-tion, makes states legally responsible for pre-venting violence, providing support to victimsand prosecuting perpetrators. The Convention was adopted by the Councilof Europe on 7 April 2011 and became opento signatures on 11 May, 2011. That same day13 European member countries added theirsignature to the Convention.In order to come into force the conventionrequires the ratification of ten states, eight ofwhich must be Council of Europe members.While Italy became, on 27 September 2012,the 23rd member state of the Council ofEurope to sign the Istanbul Convention, sofar only Turkey ratified the Convention.I don't understand why other Europeancountries are not following Turkey's steps?There are many compelling reasons to sign

and ratify the convention. The most obviousone is helping to save the lives of manywomen who are at serious risk of beingabused and killed. Other reasons concern theneed to build a healthier society based onequality and tolerance.On the eve of 25 November, the UN interna-tional day to eliminate violence againstWomen, I wish to remind you all that it is ourresponsibility to take a public and politicalstand against all forms of violence. Each and every one of us has a key role to playin raising awareness and developing standardsof action to tackle this huge problem. Forexample, citizens can pressure their localpoliticians and national government to signand ratify the Istanbul Convention. MEPscan support the notion by making similarappeals. Only by working together on thelocal, national and European level, can we seean improvement in the situation of womenand girls who suffer from acts of violence,including physical and verbal aggression.

Lidia Geringer de Oedenberg, Quaestor ofthe European Parliament Member of theParliament's Bureau

SOCIETY

The right to a good morningBy Lidia Geringer de Oedenberg

On 10-11 November in Rome about 1000people from all the Italian Regions participatedat the “Tecnica” Auditorium in Rome at theXIX National Congress of the Christian Dem-ocratic party. The party apparently was dis-solved and changed its name in other politicalformations (PPI, UDC, UDEUR, etc.).

But the Cassazione Court in a recent judg-ment (n. 1305/9) clearly stated that“Democrazia Cristiana” in fact was never dis-solved; so it continues to exist as it was since1945.

The Congress was a real success since thatdespite no financial support, the National Sec-retary, Gianni Fontana, managed to gather in avery short time many DC leaders of the pastlike Clelio Darida, who was the Congress Pres-ident, as well as some former Ministers (PaoloCirino Pomicino, Ombretta Fumagalli) andseveral former members of the Italian Parlia-ment (Silvio Lega, Giuseppe Lo Curzio,Carmelo Pujia, Angelo Donato, Renato Grassi,Ettore Bonalberti, etc.).

The main opening lecture was given by Na-tional Secretary Gianni Fontana, former Agri-culture Minister, who pointed out in a very clearand convincing way the Christian principlesand values milestones of social doctrine of theChurch, still continue to represent the solidfoundations on which to rebuild “DemocraziaCristiana”.

Gianni Fontana was then unanimously

elected as the new National Secretary of“Democrazia Cristiana”. This is not a party ofnostalgic people from the past, but he explained,it is a dynamic party open to young people,women, to the best people of professional life, toassociations, unions, cultural and academic peo-ple who with their life represent an example ofcompetence as well as of honesty.

In a world in which unfortunately corrup-tion and the “money” god dominate, in whichyoung generations were for so many yearsplagued by subliminal and potent, aggressiveinfluence of the subculture of fatuous and vac-

uous values like richness, beauty and other fool-ish things, it is a duty for the “Democrazia Cris-tiana” to start a campaign of recruitment ofyoung people and select them to generate thenew political class according to the principlesof meritocracy, deep motivations, ethics andsolidarity towards the more fragile and weakpart of the society.

This winning message, coming from the newSecretary’s policy is that “old people who al-ready served as members of the Parliament willbe not anymore appointed as candidates to thenew elections. We need new fresh air and newmethodology to do politics in comparison tothe past, an ethical code to select the new po-litical class, in order to represent an example forthe society,” he stated.

“We should start from tomorrow,” he con-cluded, adding that the new “memberships”should be as large as possible, to create a realpopular and democratic party.

“I have spoken recently with WilfriedMartens, President of the EPP and confirmedto him that “Democrazia Cristiana” one of themain founders of the European People’s Party,will continue to work at the European level toput at the center of political life the human per-son, family, work, freedom, social justice, soli-darity, etc., all values to which we shouldeducate the new generations,” he said.

There is an ample space for “DemocraziaCristiana” in the Italian political life. Italy is liv-ing now a confuse and chaotic period of dis-bandment on one hand with the old

communist party, now called PD, which con-fusedly is allied with ultra-left parties and findsnew alliances with some central parties.

In addition Berlusconi changes ideas fromday to day contributing to the confusion. Butthe most dangerous risk is the continuous in-crease in consensus of the so called Five StarsMovement of Grillo, a party of pure protesta-tion against all the other parties, but demagogicand populist without any rational proposal tosolve real problems of poor people and of theCountry.

On the other hand Pier Ferdinando Casini,the UDC leader, oscillates continuously fromthe center-right to the center-left pursuing theso called politics of the 2 ovens.

People in Italy are disgusted now by the ac-tual political parties, who are unable to approve,despite the President of Republic Napolitano’srecommendations, a new election law, whichafter the so called “Porcellum law” returns tocitizens their elementary and constitutionalright to choose with their own votes their po-litical representatives.

These are the reasons why the new“Democrazia Cristiana”, the traditional party ofDon Sturzo, Alcide De Gasperi and AldoMoro, rises from its ashes like the “ArabicPhoenix” will continue under the guide of Gi-anni Fontana, who was defined by somebodyat the Congress as the new De Gasperi, to playa fundamental role in Italy and Europe.

Giovanni Santini is NE correspondent in Italy

POLITICS

'Democrazia Cristiana' hits restart 05ANALYSIS

Gianni Fontana

By Giovanni Santini

NEW EUROPE18 - 24 November , 2012

Last Tuesday, the EU gave Egypt areplica of King Tut’s tomb. Last Wednes-day, it gave the transforming countrymore money.

With the new EU-Egypt Task Forcemeeting in Cairo this week, co-chairCatherine Ashton (high representativefor foreign affairs) pledged financialsupport worth €500 million to Egypt asit strives for economic and political sta-bility.

“After meeting with members of theEgyptian government yesterday, it isclear that Egypt is keen to pursue reform;however there is still a long way to go,”said Sajjad Karim, MEP and conservativelegal affairs spokesman, in a statement.“With EU support and assistance forEgypt's democratic transition and econ-omy, we are confident it will one day be arole model to its neighbours."

The EU-Egypt Task Force is the thirdtask force in the Southern Mediter-ranean, with the first held in Tunis inSeptember 2011 and the second held inJordan this past February.

This task force hopes to ensure effec-tive coordination of the support from theEU, its member states and other Euro-pean and international bodies.

“The people and the government of

Egypt are dealing with huge challenges,drafting a new constitution, holding par-liamentary elections and working todeepen the democratic transition,” EUExternal affairs head, Cathy Ashton said.“It is vital that this transition continuesto ensure the full respect of human rightsfor all, not least women, who played sucha key role in the events of spring 2011. Inthis work, the EU stands by Egypt’sside.”

In Cairo, it gave another 90 millionfrom the SPRING program, a 163 mil-lion grant from the Neighbourhood andInvestment Facility and a 50 milliongrant of Macro-Financial Assistance.

“This has been the most complex TaskForce we have organised so far,” Com-missioner Füle said.

“It is really important to turn the mo-mentum which was created today intopractical proposals. It is not only aboutmoney. Today we have been speakingabout some great ideas that have been onthe table since the revolution in Egypt:the possibility of a free trade area, mobil-ity partnership and further strengtheningof our cooperation. It is time to deliveron those initiatives for the benefit of theEgyptian people. It is time to turn theseideas into a new Action Plan.”

EGYPT

EU offers Egypt more aid, task forceAnnual subscription fee (52 issues) EU € 350, Others € 395

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European health commissioner-designateTonio Borg has said his “number one priority”is to see the tobacco products directive swiftlyimplemented.

Speaking before a hearing at the EuropeanParliament on his candidature for the vacantMaltese commission position on 13 Novem-ber, Borg said that, if endorsed by the parlia-ment, he would send the directive tointer-service consultation in January.

However, he said that his ambition was to“revise” the current proposal, rather than goahead with it as it stands now. The directivehas been stalled in the wake of previoushealth commissioner, John Dalli’s controver-sial resignation.

Borg said to the parliament’s health com-mittee that he hoped to work closely withMEPs in implementing the directive.

He said that, as a minister “ I very rarelypromise things, but I can promise this”. Hesaid that his decision to send the directive toconsultation in January, if he were elected,would have the “encouragement and en-dorsement” of European Commission presi-dent, Jose Manuel Barosso. He said thattobacco products “should look like tobacco

products”, and that a “high-level of consumerprotection” is expected of the EU with regardsto policing such items.

There has been much controversy sur-rounding the appointment of Borg to the role

of health commissioner. The evening beforehis hearing a press conference held in the Eu-ropean parliament saw MEPs and interestgroups highlight his apparent flaws as a leg-islator in his native Malta, suggesting hisultra-conservative Catholic views wouldhamper his ability to perform his role ashealth commissioner impartially. Documentswere circulated outlining instances where hisviews on issues such as abortion and divorceinfluenced his policy making.

MEPs made this the focus of the initialstage of his hearing. Borg said that he wasfully pledged to adhering to European values– something his opponents doubt his com-mitment to – by saying that he “would fullyco-operate with the European Parliament asco-legislator”, because it “is the right thing todo”. He said that he is an objective legislator,but is “above all, pro-European”.

In addition to pushing through with thetobacco directive, he said that during hismandate he intends to tackle cross-borderhealth threats, and ensuring public confidencein the “scientific basis” of health policy. Incontrast to his image as someone who retreatsinto religious arguments to enforce his pointof view, he said that “science will be my guide”on health policy.

However, when pushed on whether ornot his personal convictions will interferewith his policy making, he reiterated, onmore than one occasion, that the healthportfolio is a member state policy, which hewouldn’t interfere in. sceptics may not bewon over, but his performance was assuredand confident.

In addition to establishing his social cre-dentials, which he did shakily, but withenough confidence to reassure MEPs of hiscommitment to EU values, he laid out hisplans for enhancing medials services acrossthe internal market, and would not allowmeat from cloned animals to be sold on theEuropean market, although, he admitted thatright now there is no actual law in Europe toprevent this.

When pushed on his personal convictions,which he frequently was, he reiterated thatthe commission portfolio does not allow fora personality-based approach to policy mak-ing. “I have not come here to abandon mypersonal views”, he said “that would be hyp-ocritical, and you would see through that. Iwill abide by the rules of the office”.

His candidature is set to be voted on by thefull parliament at the November plenary inStrasbourg.

POLITICS

Borg to go ahead with tobacco directive

Jose Barroso, Catherine Ashton and the otherEuropean commissioners have received theirreport cards, and they are not covered in goldstars. In the 2010-2014 European Commissionmid-term review, a survey of 811 Europeansassembled by Burson-Marsteller and EurAc-tive, the results are almost entirely negative.Among the, er, highlights: • On a scale of 1 (bad) to 10 (good), a plural-ity of respondents (23.1%) gave the Commis-sion a 1 for its performance the last two years.33% gave the Commission a 1 for its tacklingof the financial and economic crisis.• The Commission did not receive a score bet-ter than 4 in any of the 15 designated policyareas. It earned a 2 in economic and monetaryunion. • Jose Barroso, the president of the Commis-sion, received a 2.5 out of 10 for his individualjob performance. 53.6% of respondents said hehad shown the biggest deterioration in per-formance in the last year among commissioners. • Only Catherine Ashton, high representativefor foreign affairs and leader of the EuropeanExternal Action Service (EEAS), scored lowerthan Barroso. Respondents gave her a 2. • Neelie Kroes, the commissioner for digi-

tal agenda, earned a 6 out of 10, the bestmark of any commissioner. 29.8% of re-spondents said Kroes had shown thebiggest improvement, and 37.4% said shewas the best communicator. • A plurality of respondents (19.3%) saidthey would like to see Germany ChancellorAngela Merkel appointed as the next com-mission president, with 17.9% namingMEP Guy Verhofstadt (ALDE, Belgium)and 16.3% naming former UK Prime Min-ister Tony Blair. A striking 29.6 of the survey results camefrom EU officials, and Burson-Marsteller had

to discount 4,000 Dutch respondents who‘polljacked’ the survey by giving the lowestpossible rating across the board. 76.7% of re-spondents were male, and only 3.3% of re-spondents were age 61 or older. Barroso and the Commission shouldn’t dis-miss the results because of some methodol-ogy flaws, said David Harley, aBurson-Marsteller senior advisor and formerdeputy secretary-general of the EuropeanParliament. “The survey reflects disquiet,” Harley said atthe launch of the survey results. “The com-missioners are not fulfilling their own com-

mitments or their own promises. There is novision, no leadership, and the future is grim –that’s the snapshot of the survey.” Some features of the survey suggest many re-spondents lack certain critical thinking skills.The survey asked respondents what specificcommitments they believed respective com-missioners had been most and least successfulin achieving. Of the 196 who bothered re-sponding, many judged commissioners to beboth most and least successful regarding thesame commitment. For example, 35% said re-cently resigned Commissioner John Dalli wasmost successful in acting as a guardian of theconsumer, while 47% said he was least suc-cessful in acting as a guardian of the consumer(Dalli earned a 5 out of 10 for his overall per-formance). Also strange: Despite receiving the lowestoverall grade, Ashton earned the highest rateof achievement of any commissioner (63%)for creating the EEAS. And while resolvingthe economic crisis was understandablynamed the top priority for the next two years,fighting tax evasion was also one of the mostfrequent answers. “This doesn’t undermine the survey’s impor-tance, but people should treat the results withcaution,” said communications consultantJohn Wyles.

INSTITUTIONAL AFFAIRS

European Commission fails miserably in mid-term review Survey gives Berlaymont lowest mark for performance last two years


ANALYSIS

Commissioner-designate for Health and Con-

sumer Policy Tonio Borg during a hearing on his

candidature at the European Parliament in Brus-

sels on 13 November.

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Low marks, no gold stars for the Commission.| AFP PHOTO/JOHN THYS

By Cillian Donnelly

By Andrew Wagaman


ANALYSIS

There was something marvellously sleazy aboutthe controversy that led John Dalli to resign as theEU's health commissioner. Combining hints ofsecret payments and improper access and a provenburglary, the whole affair demolished the myththat Brussels is boring.

It was especially satisfying to see solid evidence- some produced by Dalli himself - that the to-bacco industry is willing to grease the palms ofthose lobbyists who can provide it with one-on-one contact with the powerful.

The most proper response to this scandal wouldbe for the EU institutions to collectively decidethat all representatives of cigarette and snus com-panies are personae non gratae. Corporations thatmake and sell weapons of mass destructionshould have no role in determining public policy.

By definition, every cent that lobbyists receivefrom the tobacco industry is dirty money. So whyare some of these grubby guns for hire treated asrespectable "experts" on European politics?

Ireland's self-proclaimed leading "think tank"on EU policy - the Institute of European Affairs- is chaired by Brendan Halligan. A formergrandee in the Irish Labour Party, Halligan regu-larly hobnobs with the political and business elitein both Dublin and Brussels. The institute's glossybrochures are crammed with photographs of himdining with presidents and EU commissioners.Halligan's history as a flunky can be found in atreasure trove of documents released because oflitigation against cigarette makers. A 1983 memofrom the Irish Tobacco Manufacturers' AdvisoryCommittee details how Halligan, then a recentaddition to the European Parliament, undertookto "definitely push" a proposal that the cigaretteindustry had made on saving duty free shopswithin the European Community. The lobbygroup was pleased with Halligan's commitmentas it distinguished him from others in the assem-bly's Socialist group, "which tends to be ill-dis-posed to duty free facilities", the memo added.

After Halligan stepped away from frontlinepolitics, he was rewarded for his loyalty to Big To-bacco with lucrative contracts. His firm, Consult-ants in Public Affairs (CIPA), advised theConfederation of European Community Ciga-rette Manufacturers (CECCM), over how tocourt the Brussels institutions. During the 1990s,he spent a great deal of time trying to prevent theharmonisation of taxes on cigarettes and the in-troduction of a ban on tobacco advertising. In adiscussion paper that he wrote for cigarette mak-ers in 1995, he expressed concern about how pub-lic unease with smoking by children could lead torevulsion against the whole industry. "The antisare taking advantage of these trends and are usingthe children issue to attack the industry across abroad front," he wrote. "Measures are proposedunder the guise of protecting children but the realobjective is to leverage limitations on the adultmarket. This latest piece of social engineering hasa high potential for success. It gives the antis anemotional fire power, which is difficult to counter."

A letter to the European Commission thatHalligan drafted for the trade association in 1998stated: "as manufacturers of a legal product withnearly 100 million consumers, we believe that we

have a right, as well as a duty, to be part of the pol-icy-making process and to be consulted wheneverour interests are at stake".

The European Policy Centre (EPC) - one ofthe best known "think tanks" in Brussels - helpedfurther that agenda by setting up a "risk forum"financed by British American Tobacco (BAT). In2003, the Commission accepted the risk forum'schief recommendation: that cigarette makerswould be consulted about activities affecting them.Today, the EPC regularly organises debates onhealth policy. I recently put it to Annika Ahtonen,who runs the centre's health programme, that itwas ironic for the EPC to pose as a champion ofpublic health, when it had been funded by the cig-arette industry. "That was a long time ago," shesaid. Ahtonen might like to peruse the EPC's lat-est annual report. On page 19, it lists BAT andPhilip Morris as two of its current funders.

Seven pages later, Pavel Telicka is named as oneof the EPC's "senior advisers". Telicka was ap-pointed the Czech Republic's first EU commis-sioner in 2004 and was given partial responsibilityfor health policy. He wasn't long in that job, how-ever, before he was hired by the aforementionedBAT. According to that firm's website, he is still

heading its "social reporting process" - an initiativedesigned to ensure that a firm's "ethical and envi-ronmental performance" is accounted for "in asimilar way" to its financial performance.

Telicka does not appear to have been chastisedin any way for embracing an industry he wastasked with regulating. On the contrary, he re-mains an official adviser to the Commission aspart of its "high level group" on the "reduction ofadministrative burdens".

Meanwhile, the TransAtlantic Business Dia-logue (TABD) was asked by the European Com-mission in 1995 to facilitate contacts betweenchief executives and politicians in both the EUand US. Its Brussels office is run by Jeffries Bri-ginshaw, who has been campaigning hard againstmoves by Australia to require that cigarettes aresold in plain packages. In his letters to the Can-berra authorities, Briginshaw has neglected tomention a salient fact: he used to work directly forBAT and that company is one of the most activeparticipants in the TABD.

Far from being shunned, Big Tobacco is em-braced by leading EU policy-makers. This is thereal scandal.

CEO of British American Tobacco (BAT) Germany, Ad Schenk, smokes a cigarette leaning on a company nameplate in

Bayreuth, Germany, 12 June 2008. BAT is one of the big tobacco companies that have strong lobbying links with Brussels.

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TOBACCO INDUSTRY

Tobacco lobbying: the sleazy path to successBy David Cronin

The reality of the situation between Gaza andIsrael is very different than what many believe.The current round of conflict did not beginwith an Israeli operation on Wednesday (Nov.14), but rather with an anti-tank missile firedby Hamas last Saturday. That attack was im-mediately followed by rockets targeting thecivilian population of southern Israel. In thedays before Israel launched Operation Pillar ofDefense, over 120 rockets had been fired. Thisescalation was not the first in recent memory,but rather the third of the past month.Indeed, it is possible to say that the conflictbegan long beforehand, when Hamas and theother terrorist organizations intensified the fir-ing of rockets and mortars after Israel disen-gaged from Gaza in 2005. When Israel left theGaza Strip, it did so in the hope that removingevery army base and civilian community wouldlead to a better future for the peoples of Gaza

and of Israel. Instead Hamas grabbed controlover the Gaza Strip and the attacks intensified.At this very moment, one million people insouthern Israel are under attack. Schools areclosed in a 40 mile radius from the border andfamilies as far as Tel Aviv are forced into bombshelters and stairways after every siren. Rock-ets are targeting civilians and no-one in south-ern Israel is safe.As a matter of principle, the Israeli people pridethemselves on their ability to continue withdaily life despite the most difficult conditions.However, that was no longer possible after therockets began to rain down on Saturday. Israel demonstrated great restraint in the face ofthe ongoing bombardments. Finally, it couldnot stand by anymore and was forced to exer-cise its right of self-defense. No state wouldallow its citizens to be constantly threatened byrockets. Governments have a right and a duty,to protect their citizens from terrorists. In thiscontext, we appreciate the statement by HR

Ashton recognizing Israel's right to protect itspopulation.Israel’s response to the terrorism from Gaza,Operation Pillar of Defense, was launched toprotect its citizens from a strategic threat, andin order to restore calm and security to South-ern Israel. The Israeli military took actionagainst Hamas’ long and short range rocketlaunchers, reducing Hamas’ rocket launchingcapability. The Israel Defense Forces (IDF)also carried out a surgical strike against AhmedJabari, Hamas’ military chief, who was respon-sible for all Hamas terrorist activity emanatingfrom the Gaza Strip in the past decade. Jabarigained international attention for his direct in-volvement in the abduction of IDF soldierGilad Shalit in 2006.Israel did not seek this conflict. It does not wantto see the people of Gaza harmed. Therefore,Israel is doing everything in its power to en-sure that its strikes are surgical and to minimizeinjury to uninvolved civilians, including by re-fraining from some actions deemed opera-tionally needed. Israel has already made 20,000phone calls to the residents of Gaza anddropped countless pamphlets that warn them

to stay away from terrorists and terrorist facil-ities for their own safety.Unfortunately, Hamas has a long history ofusing its own people as human shields. It firesits rockets from amongst the population ofGaza, and then aims them at the population ofIsrael. Under international law this is a doublewar crime. The international community can play an im-portant role in this crisis. Firstly, it can make itclear to Hamas that the rockets launched at Is-rael must cease. Not only would that help saveIsraeli lives, it would also assist the Palestinians.Their goals can never be reached by violence,which causes suffering on both sides.Secondly, the international community shouldmake it clear that it will not abide by Hamasusing the population of Gaza as human shields.The only method to stop this war crime is tosoundly condemn those terrorists who delib-erately place civilians in harm’s way, usingschools and homes as launching pads for rocketattacks.

David Walzer, Ambassador and Head of Mis-sion, Mission of Israel to the European Union

CONFLICT

A pillar of self-defenseBy David Walzer

EDITOR'S NOTENew Europe respects all opinions especially aspresented by its associates. The Dalli case isquite multifaceted. The editors of the newspa-per followed the case very closely and as to theambiguous case of the John Dalli resignation,we wish to remind our readers that the Com-missioner did not resign of his own will but wasdismissed by Jose Barroso on the grounds of thepresident's prerogative based on Article 17.6 ofthe TEU. Indeed, when the Director General ofthe Legal Service offered Dalli a written draftresignation to sign, the latter refused. Since thenthe Commissioner has been awaiting the Pres-ident's writen invocation of Article 17.6 of theTEU so as to sign his resignation.


ANALYSIS

The ObamaEffect

The message that the reelected USA President BarackHome presented after wining the very dynamic electionsis clear – America must regain its Internal CompetitiveAdvantage but at the same time must be able to reinforceits Global Situation. In this way it´s essential to learn thelessons that more than ever emerge from an America thatis trying to rebuild its competitive advantage and to rein-vent its effective place in a complex and global world.Thus spoke Barack Obama.In the New Global Economy and Innovation Society,America has a central role to play towards a new attitudeconnected with the creation of value and focus on cre-ativity. In a time of change, America can´t wait. Amer-ica must confirm itself as an “enabler actor” in a verydemanding world, introducing in the society and in theeconomy a capital of trust and innovation that is essen-tial to ensure a central leadership in the future relationswith China and the more and more dynamic developingworld. The actors from America should be more andmore global, capable of driving to the social matrix aunique dynamic of knowledge building and selling it asa mobile asset on the global market. We need the America of the citizens. Where peopleknow who they are and have a strong commitment withthe values of freedom, social justice and development.This is the reason to believe that a new standard ofDemocracy in America, more than a possibility, is an in-dividual and collective necessity for all of us, effectiveAmerican citizens. Habermas is more than ever present– the difference of America will be in the exercise of thecapacity of the individual participation as the central con-tribution to the reinvention of the collective society. Thisis a process that is not determined by law. It is effectivelyconstructed by all the actors in a free and collaborativestrategic interaction.In a certain sense, we need a new third way for Europe.When Francis Fukuyama spoke about this special globalcapacity of creating a new commitment between theAmericans toward the challenge of the future, he was infact speaking about this commitment with a NewDemocracy in America. Based in new standards of SocialInnovation, this kind of Global Strategy is above all theconfirmation that in America the individual performancein a complex society is possible, desirable and above allnecessary for the future.America is facing a new strategic challenge. ReinventingAmerica and giving the American Actors (States, Uni-versities, Enterprises, Civil Society) the opportunity ofdeveloping new challenges focused on innovation andcreativity is in a large sense giving a central contributionto a New Global Order. The Reinvention of America isthe reinvention of its people and institutions. An activecommitment, in which the focus in the participation anddevelopment of new competences, on a collaborativebasis, must be the key of the difference. These are the les-sons that Barack Obama talked about as the way 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

Following years of inadequate self-regulation, the European Union isnow ready to “smash the glass ceil-ing” with regards to gender imbal-ance in boardrooms, Viviane Redinghas said.

Announcing a new directive on gen-der quotas, the European Commis-sioner for Justice said that “decades offailed self-regulation” had ensuredmale dominance on the boards of Eu-ropean companies, and it was nowtime to redress the balance throughlegislation

At present about 85% of those onexecutive boards in Europe are men.The new legislation aims to ensure40% female representation on super-visory boards of publicly-listed com-panies by 2012, with 2018 being thedate set for state-owned companies.

“This is a historic day for genderbalance and equality”, she said, sayingthat with around 60% of graduatesbeing female, the 15% representationin senior positions represents a huge“waste of talent. The new directive, shesaid, “will smash the glass ceiling thatprevents talented women from takingtop jobs”.

She announced the directive along-side Economic and Monetary AffairsCommissioner, Olli Rehn, and the di-rective itself was co-signed by thosecommissioners whose portfolios havean economic brief; Rehn, Joaquín Al-

munia, László Andor, Michel Barnierand Antonio Tajani.

Both Reding and Rehn stressed theeconomic benefits of allowing womenon boards. According to Rehn, “thereis a clear economic and business caseto have more women in business lead-ership”. Gender-diverse companies“perform better economically”, andgain more respect form stakeholder, hesaid.

“It is time to move from words todeeds”, he said.

Reding insisted that the purpose of

the law is to get suitably-qualifiedwomen onto boards, and not just sim-ply about increasing female represen-tation for its own sake. She said that,despite some suggestions to the con-trary, Europe has a large talent pool ofwomen to draw from. On 12 Decem-ber Europe’s top business schools willpublish a database of 7,500 names ofboard-ready women, she said.

The directive, she insisted “hasteeth”, with sanctions for non-compli-ance. The new law, she said, “has tobark and it has to bite”.

EU commissioner for Economic and Monetary Affairs Olli Rehn (L) and EU commissioner

for Justice, Fundamental Rights and Citizenship Viviane Reding (R), give a press conference

to present proposals to improve gender balance on company boards across the EU on 14 No-

vember at the EU Headquarters in Brussels.

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New directive will ‘smash’ gender imbalance

By Cillian Donnelly

By 2020, 40% of top-level corporatepositions should be held by women,according to a new EU law.At present, around 85% of seats oncorporate boards in Europe are heldby men.On average, 13.7% of boardmembers and 15% of non-executiveboard members of the largest stock-listed companies in the EU arewomen. This is, says EuropeanCommissioner for Justice, Funda-mental Rights and Citizenship, Vi-viane Reding, “a huge wast of talent”.She said that this imbalance, as wellas debates in certain member states,have prompted the European Com-mission to take the legislative initia-tive.Progress is slow. According to statis-tics gathered by the commission, theproportion of women increased by1.9% between October 2010 andJanuary 2012, above the long-term

average of 0.6% since 2003. In addi-tion, progress in individual memberstates remains uneven, with somecountries having laws and othersfavouring self-regulation.Announcing the new directive ongender balance on 14 November,Reding said that its introductionamounted to a “historic day for gen-der balance and equality”. She wasflanked by Olli Rehn, commissionerfor economics and monetary affairs,who along with other commissionerswho lead a portfolio with some formof financial or economic interest haveco-presented the legislation.The commission is also pushing theeconomic argument; pointing to anumber of studies that suggest agreater gender-diversity in corporateboards equates to better economicpotential. According to Rehn thereis a “clear economic and business case

to have more women in businessleadership”, and, according to thecommission, more women meansimproved company performance andbetter quality of decision-making.Viviane Reding warned against the“naysayers”, saying that Europe has ahuge talent pool of boardroom-readywomen to draw from. The EuropeanWomen’s Lobby (EWL) welcomedthe proposals, like Reding, dismiss-ing the suggestion that quotas runcounter to meritocracy. The commis-sioner has promised a directive “withteeth”. The EWL, as well as GreenMEPs, have welcomed the legisla-tion, and its built-in sanctions, argu-ing that legally-binding quotas atEU level are a necessary step in theright direction. Whether or not itachieves its aim of boosting the EU’sgrowth strategy remains to be seen.

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GENDER EQUALITY

Legislation on gender quotas crucial to boost slow equality progress

Bean downso long

I woke up in hospital a while ago, after a quiet night in did-n’t go exactly as planned. These things happen and it’s justpart of life, but I did find a disconcertingly young medic hov-ering over me and it soon became clear why.He wanted to ask me a whole list of impertinent questions.Now, doctors like to do this even though they know patientsare as economical with the truth as a government minister.This young pup was trying to pass all this off under the guiseof a ‘holistic’ approach to patient care.If I was interested in holistic approaches, I’d have gone tothe homeopathic A&E and let the irresistible force of Dar-winism shuffle me to the next world.But I was in an indulgent mood, so I decided to answer allhis questions “about your lifestyle choices” honestly, whichfilled a morning, taught him some new words and took medown a few memory lanes I’d forgotten.The good news is that the Vlaams Belang would approve,mainly because the young doctor was from the Seychellesand his skin colour was considerably whiter by the time I’dfinished.The bad news was, for reasons way beyond me, was he be-came fixated on my coffee intake, which was around 15 to20 mugs a day. A reasonable amount, I thought. He didn’t.But I’m serious about coffee. As long as it tastes goodenough and contains lovely, lovely caffine, I’ll take it. I’m notinto all this Italian style buggering about with it, but it is themarketers who have turned this essential fuel into someoverblown, over decorated overpriced lifestyle accessory.But, I’m a tolerant person, so I can live with this.But I can’t tolerate companies like Starbucks. In a civilizedsociety they would be ground down, roasted and covered inboiling water, the lampposts of the capital would be deco-rated with the battered bodies of their executives, a festivetouch that would delight Londoners, reviving the joy of theOlympics.The appearance of Starbuck’s Chief Financial Officer in theUK Parliament showed the utter contempt they have fortheir customers and the communities they profit from. Try-ing to deny charges of tax avoidance, they claimed that theydo pay tax, but that turned out to be false. The taxes theyclaimed to pay were in fact the tax their employees pay ontheir wages.These people are following the advice of New York hotelier,Leona Helmsley, who said, “We don’t pay taxes, only the lit-tle people pay taxes.”They’re not the only ones. The major internet companiesare also claiming to inhabit a world above and beyond ourswhere tax is some sort of voluntary arrangement.Add to that, the bankers are fixing the interest rates, the gascompanies appear to be fixing the gas prices and on and onand on.The result is that we’re living in a world where the wealthycan do as they wish, and the poor pick up the tab for theirirresponsible excesses.Just remember that when you see the young professionalswandering around with their oversized cups of coffee, whichdo look like the safety bottles you give infants to drink on be-fore they are old enough to use the toilet.I saw the new DG of the BBC arriving at work for his firstday carrying one, transforming his look from bloke with ahuge amount of gravely serious scandals to deal with intothat of an intern.Now I need something stronger than coffee.

[email protected]

By Andy Carling

During the last months, we witnessedrepeated provocative and offensivestatements against the EU, by Turkishofficials, on the occasion of the as-sumption of the Presidency of theCouncil of the EU by the Republic ofCyprus. The statements were furtherinstigated by the publication of theEuropean Commission progress re-port on Turkey’s accession on October10th, 2012.

The Turkish officials put into ques-tion the report, characterising it as"unbalanced" and "far away from re-flecting the truth", demonstrating onceagain, a blatant lack of respect to theEU acquis communautaire and to theEuropean Commission's judgement.The Turkish Ministry of Foreign Af-fairs expressed ironically its indiffer-ence by dismissing the Commission'sfindings, claiming in addition, thatTurkey will publish its own report. TheTurkish Minister of European AffairsMr. Egemen Bağış ironically referredto Cyprus as “a so-called peninsulastate not recognized by Turkey”, re-peatedly ignoring the Cyprus Presi-dency of the Council of the EU.

Undoubtedly, Turkish officials denyall concerns raised on the current situ-ation in Turkey, regarding the severeviolation of human rights of journal-ists, women, Kurdish, Alevis and otherminorities, the freedom of expressionand press censorship, the lack of polit-ical will to solve the Kurdish conflictand the democratic deficit of the judi-cial system in Turkey.

For all those observing the situationin Turkey, it is an established fact thatthere are severe and persistentbreaches of human rights. It is oftenthe case for Turkish intellectuals to ad-dress the international community,

asking for support and complainingthat “their screams remain unvoiced”.A recent report issued by the Com-mittee to Protect Journalists (CPJ)fully substantiates this allegation, ac-cusing the government of Tayip Erdo-gan of waging one of the world'sbiggest crackdowns on press freedomin recent years.

Besides the record in breaches ofhuman rights, the report of the Euro-pean Commission reiterated seriousconcerns on Turkey’s attitude vis-à-visthe Republic of Cyprus and its insis-tence to freeze any relations with theCyprus Presidency of the Council ofthe EU. The Commission urgesTurkey to terminate its up-to-nowusual policy of threatening and to fullyrespect the role of the Presidency, as afundamental institutional feature ofthe EU, which has gained great impe-tus especially by the Treaty of Lisbon.

Despite all EU recommendations,however, Turkey continues its provoca-tive behaviour by blocking all negotia-tions with the EU during thesix-month Cyprus Presidency.

As a Member of the EU-TurkeyJoint Parliamentary Committee ( JPC)of the European Parliament, I expressmy deep disappointment for the recentdecision of the Turkish Members ofthe JPC Bureau to reject the proposalof the European side to hold the 70thJPC meeting on 19-21 December2012, in Turkey, supporting blatantlythat they do not recognise the Repub-lic of Cyprus and, therefore, they wantno diplomatic relations with this EUMember state.

During the preparatory meeting ofthe JPC, which was held during theOctober plenary session in Strasbourg,in the presence of Commissioner forEnlargement, Mr Stefan Fule, we hada thorough discussion, where a large

majority of Members expressed theview that Turkey will on purpose findvarious excuses for avoiding to holdthe JPC meeting in Turkey before theend of the year and during the CyprusPresidency.

Any politically correct and reason-able person could easily conclude thatTurkey's unacceptable behaviour andlack of will to comply with its own ob-ligations, as a candidate country forEU accession, is unprecedented.

Turkey's aggressive attitude towardsCyprus is further substantiated notonly by its proven persistence not toimplement Protocol 10 of the AnkaraTreaty for establishing normal rela-tions with the Republic of Cyprus butalso by the fact that Turkey maintains40.000 troops on the occupied part(37%) of Cyprus since 1974, violatingUN and CoE resolutions as well as theEuropean and International law.

Yet the Turkish Prime Minister, Mr.Erdogan, still claims that "there is nocountry in the world called Cyprus,but there is the Greek Cypriot admin-istration” as he did recently during themeeting on "Europe Beyond the Cri-sis" at the Nicolas Bergruen Institute,in Berlin. In addition, boasting that"the EU will lose Turkey, if member-ship is not granted to it, by 2023", MrErdogan has set his own deadlines tothe EU!

To conclude with, there are twoquestions which automatically springto the mind of every European:

i. Quo vadis Turkey?ii. How long will it take for the EU

to condemn in practice such aprovocative and offensive attitude?

Antigoni Papadopoulou (S&D) is aMember of the European Parliamentand the EU-Turkey Joint Parliamen-tary Committee ( JPC)


ANALYSIS

CONSTRUCTIVE AMBIGUITY

Journalists hold copies of several Turkish newspapers during a rally in Istanbul, 13 March 2011. A recent report issued by the Committee to Protect Journal-

ists (CPJ) has accused the government of Tayip Erdogan of waging one of the world's biggest crackdowns on press freedom in recent years.

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SOCIETY

Recognising the presidency

By Antigoni Papadopoulou MEP


MEDIA

This year, for the first time, Europeancommercial broadcasters and televi-sion sales houses from the public andprivate sectors take the opportunity ofWorld Television Day, declared by theUnited Nations in 1996, to reflect onthe values of television and to honoura medium that impacts the lives ofmillions of people. With seeminglyunlimited reach and unrivalled emo-tional power, television reflects the val-ues, needs, concerns and indeedaspirations of the world’s communi-ties, tying together many millions viathe TV screen regardless of their age,nationality and/or social status.

On November 21 and 22, 1996, theUnited Nations held the first WorldTelevision Forum, where leading mediafigures met to discuss the ever-increas-ing significance of television in our in-formation society and, accordingly,consider how they might reinforce theirmutual cooperation and understanding.That is why the UN’s General Assem-bly proclaimed November 21 as WorldTelevision Day – to commemorate thedate on which the first World Televi-sion Forum was held. The UN invitedall member states to observe the day byencouraging global interchange of TVprogrammes about peace, security, cul-tural exchange and economic and so-cial development.

To help put this message across,egta, the association representing tele-vision and radio sales houses and ACT,the Association of Commercial Tele-vision in Europe, highlight the role ofTV in communicating on keytransnational issues, its relevance to theworld economy and its contribution todemocracy, social and cultural devel-opment through testimonials andfirst-hand accounts on a website cre-ated especially for this occasion:www.worldtelevisionday.tv

Building on a wide endorsement ofinfluential personalities in the world ofpolitics, social advocacy, entertainment,

sport and journalism, the two associa-tions bundled their testimonials on thepositive impact TV has on the causethey believe in and fight for and on so-ciety in general. Neelie Kroes, Vice-President of the EuropeanCommission, Usain Bolt, Olympicchampion, Michael Schumacher, For-mula 1 racing driver and many otherscommented on television and how itallows millions of viewers worldwideto explore beyond their living roomsand to engage with others and theirlife stories. The initiative has beenpicked up by the national television in-dustry associations who are activelyspreading the message across Europeand the globe.

Philippe Delusinne, President ofACT and CEO of RTL Belgium,commented on this first-of-its-kindinitiative: “In this digital era … TVremains the leading medium. Televi-sion is an instantaneous and effectivecommunications medium, and withthis … come certain responsibilitiestowards society. It is our task and ourhonour to report on important eventsacross the world, to drive debates andto encourage people to think. [WorldTV Day] is a day to realise that TV ishere for us and that we fulfil manysocial roles by creating and distribut-ing programmes that inform, engageand entertain millions of peopleacross the world.”

Looking to the future, HeikkiRotko, egta President & CEO ofMTV Oy Finland, added: “The dig-ital ‘r-evolution’ has allowed televisionto free itself from the constraints oftime and space and to travel seam-lessly from the living room to a mul-titude of screens, offering viewers ofall ages, genders and nationalities arenewed and much richer experiencearound content and informationwhen and wherever they want. Theseare exciting times for broadcasters;times when we reinvent, transform

and add value to an activity that con-sumes the major part of most people’sdays and when we consider how tobest harness the great potential ofboth linear and on-line television tohelp develop attitudes and responsesto the world we all inhabit.”

TV is constantly reinventing itself,anticipating and adapting to society’sneeds and habits as only it can. Avail-able on various platforms and devices,television is a cornerstone of democ-racy, providing credible information,and a pillar of freedom of expressionand cultural diversity. Think of the firstlunar landing, a grand achievement ofmodern science and singly the greatestTV moment of all time. TV also in-spires the spirit of giving, as it standsbehind many charitable organisations’fundraising initiatives. MTV, for in-stance, recently aired a one-hourfundraising special to help the popula-tions ravaged by Hurricane Sandy. TVcalls attention to the world’s humani-tarian crises, natural disasters and so-cial ills. War-torn Sudan became thefocus of the worldwide mass media,prompting UN intervention, relief ef-forts and collaborative activities. Tele-vision is also a wonderful ambassadorfor the entertainment industry. By of-fering quality entertainment, it pro-vides an avenue of dreams and wonder.Through the broadcasting of sportevents, it inspires people to rise abovetheir personal limits, gathering mil-lions of viewers around sound andpositive values. Remember the 2012Olympics? They were the most-watched TV event in world history.

From its unique position of inspirerand influencer, TV has made and con-tinues to make its mark on the world,which is ours to improve, to engageand to embrace under its auspices.And with a historical legacy that issecond to none, TV remains the de-finitive guide and gateway to theworld.

Television: guide and gateway to the worldWorld Television Day 2012 – Let’s celebrate!

Neelie KroesVice-President of the European Commission

“We now live in an amazing digital world, andtelevision is firmly part of that brave new world.Television is still the way to reach the most citi-zens and talk to them – and with them – abouthow the EU affects their lives. It’s still the way tobring people together – to laugh, to debate, to learn. In a world thattakes a faster and faster pace, it is nice to know you can slow downonce in a while with a good TV programme.”

-Neelie Kroes is responsible for the Digital Agenda for Europe

Usain BoltOlympic champion“When I was younger I spent a lot of time play-ing sport and trying to copy the skills I saw famoussportsmen do on TV. In 2008 my performancesin the Olympic Games in Beijing were broadcastto millions of people all over the world. I wonthree gold medals and broke three world records. At the 2012Olympics I defended my titles and set another world record. Nowa-days no matter where I go in the world people know me from watch-ing me run on TV. I hope that my hard work and determination willinspire and mobilise young audiences worldwide to follow theirdreams or to simply always aim higher to achieve their goals.”

- Jamaican athlete Usain Bolt is a five-time world champion and six-time Olympic gold medallist

Rodi Kratsa-TsagaropoulouMember of the European Parliament

“Television, as one of today’s most powerfulcommunications media, has a key role to play inraising citizens’ awareness about significant na-tional and international concerns and challenges.TV is a real window on the changing world, onother civilizations. Television needs to take advantage of its strengthin a fair, pluralistic way, while respecting human rights and universalvalues. In modern times, given the consequences of the serious eco-nomic crisis as well as the need for stability and peace in many re-gions of the world, its role becomes even more crucial”

-Rodi Kratsa-Tsagaropoulou is a MEP and Vice-President of the Eu-ropean Parliament (2007-2012)

Felix Baumgartner, Austrian skydiver, daredevil and BASE jumper“People around me tell me that the live broadcast(both on TV and on the Internet) of my missionto the edge of space and of my record-breakingfreefall jump from 23 miles above the earth of-fered a unique and magic moment to millions ofpeople around the world … They say that witnessing “live” my break-ing the speed of sound, protected only by a space suit made it possi-ble for so many people to start believing that it is possible to push thelimits of what one once thought was impossible … That those imagesallowed children and adults alike to share my dream or to simply startdreaming for themselves … and that they arouse for thousands an in-terest in science, physics, speed, extreme sports, etc. This makes mefeel very fortunate …”

-Felix Baumgartner set the world record for skydiving and became the firstperson to break the sound barrier without vehicular power on his descent

(Source: World Television Day – 21 November 2012 – for egta / ACT)

SHUTTERSTOCK|DANIILANTIQ

For more information about World Television Day visit:http://www.worldtelevisionday.tv/

Afghanistan's Deputy Foreign Minister JawedLudin, believes that the fragile nation has to joinwith neighbours to build stability and deal withregional challenges.

The minister spoke with New Europe

You say that there is progress in Afghanistanbut it is under-reported

“If you just look at where Afghanistan was tenyears ago, make a basic comparison and you cansee the progress. There’s a lot of challenges, but itis a country where democracy is taking root,practicing democratic policies. It's a country thathas seen an economic growth, perhaps biggerthan any nation has experienced in 10 years andit is a country that is building institutions.

“The most important thing is most often notnoticed, is that in society there is a huge trans-formation. People in the country, where 70% areunder 25, so it's a very young country and youngpeople have found an opportunity to assertthemselves and they subscribe to different val-ues and they will never allow the country to turnin the wrong direction. It's going to be a slow andproblematic journey, for many years to come, butit will be steady progress.”

One of the challenges is the Taliban, who areoften portrayed as a monolithic organisation,but have many trends within. Can you peel offmoderates away from the violent extremists inthe Taliban?

“The Taliban is one component of what is re-ally a regional and international extremist net-work. Essentially, it is based outside Afghanistan

and the region. But it is the one component thataffects Afghanistan directly, because the insecu-rity in Afghanistan comes from internationalterrorism and extremism, including the Talibanwho focus on Afghanistan.

“Obviously, we will continue to fight anyonewho comes and attacks our people and commitsatrocities, but we will also like to peel them awayfrom the international source of this, which is be-yond Afghanistan and is not our responsibilityand bring them into the country and see if wecan reconcile them into Afghanistan.

“This, again, is a challenge because the prob-lem is that the whole extremist industry is char-acterised by not being reconcilable, appealing tovarious extremist values but we are increasingly

seeing that some elements within the Talibanleadership are concerned about the future ofAfghanistan and we are hopeful that we will suc-ceed, but we will need help from Pakistan, be-cause most of the leadership is in Pakistan andwe need co-operation.”

You're beginning to see Afghanistan as a re-gional player. You've got some heavy hittingneighbors on the world stage, how are you get-ting along with them?

“We're trying to tell them that they should seeAfghanistan as an opportunity and stop bettingon our misfortunes as they have done in the past,using Afghanistan as a playground for a proxyconflict, seeing Afghanistan as either a threat or

irrelevant and to see Afghanistan as an opportu-nity, because the world is changing, the region ischanging and we're now trying to redefineAfghanistan itself. “We have no established pre-conceptions about our relationship with the re-gion. We're not an enemy or a threat. We wantto be friends with them and they need to use thisopportunity and see that their true interest is ina stale, friendly Afghanistan and I think that'scoming along. “Major countries are already see-ing that, like China, India, Turkey, Iran and oth-ers. They're investing in Afghanistan, Pakistanalso. Iran has invested heavily in the economicsphere and, although there are challenges withPakistan, the majority of people in Pakistan andthe civilian leadership also see that they havemade mistakes in the past and they should seethe reality of the new Afghanistan.”

How do you see the re-election of PresidentObama?

“Frankly, Afghanistan has been a consensualpiece of American politics, it's always had bipar-tisan support, so it won't have a major effect, butit's good to see Obama re-elected for continuity.We have a number of important priorities andwe will have our plate full!”

The minister also spoke about the transfor-mations that he is seeing in his country, whichhe feels are not always recognized. Stressing thatAfghans see their land as a connecting bridgebetween surrounding states, but that has notbeen possible during the decades of conflict.

“We have seen a revolution in education, incivil society, in media, which is an important an-chor in society. It is impossible to see this as any-thing but progress,” he says.

SECURITY

Afghanistan looks for stability, regional roleMany problems but progress has been made


ANALYSIS

Pakistan's Prime Minister Raja Pervez Ashraf (R) shakes hands with chair of the Afghan High Peace

Council, Salahuddin Rabbani (2R) prior to their talks in Islamabad on November 12, 2012.

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On the pulpit, the diplomats spoke about se-curity and elections and trade. The validity of next April’s elections and theAfghan forces’ ability to protect its people afterNATO withdraws will determine economicdevelopment, they said. Afghanistan’s eco-nomic development will in turn determine thecountry’s future prosperity. The session about Afghanistan’s economicsecurity at the Worldwide Security Con-ference (Monday 12 November) focusedon issues related to the looming transition.The transition has festered doubt, and in-volved diplomats feel the need to temperdoomsday scenarios.But to one native Afghan who was not onstage, diplomats are missing a crucial part ofthe bigger picture. Abdul Nafi Olomi, a for-mer political advisor to the EU from Kabul,believes education will determine the extent ofeconomic security and future prosperity. Olomi grew up in Kandahar and was one ofwhat he considers the “limited few” who got a

proper education. He learned English in eightyears working for NGOs before earning hismaster’s degree at the European Peace Uni-versity in Austria. He wrote a book onAfghanistan, and in English. Olomi said the international community hashelped improve education. After all, the num-ber of children in schools has increased in thepast decade. Like the speaking diplomats, hedoes not believe everything the internationalcommunity and Afghanistan’s political elitehave worked for will collapse in 2014. There ishope, he said. But education is the key to that hope, andOlomi said few have recognized this inAfghanistan. “If after 9/11 they had paid more attention toeducation, by now there would be a new, prop-erly educated generation,” he said. “They couldchange the system, and we wouldn’t have allthe problems of today. Instead, there are just alimited number of educated people, and theyare leaving the country. They don’t see an as-sured future for themselves. They fear there isno future.”

Those who are not educated have limited eco-nomic opportunities. Without jobs, even theyoung become frustrated and disenchanted.And then the regional terrorism networksswoop in, and their promises don’t have to bevery great to be attractive. But even those who are more pessimisticabout Afghanistan’s future focus on the intim-idating short-term issues. In its annual reporton Afghanistan released last month, the In-ternational Crisis Group (ICG) concluded thecountry is teetering on the brink of a devas-tating political crisis because the Afghan armyand police are overwhelmed and underpre-pared for the transition. It said another roundof fraudulent elections is likely. Violence, andperhaps another civil war, could follow. Diplomats respond to these kind of state-ments. Alexander Russell Vershbow, deputysecretary general of NATO, said at the con-ference that with 352,000 members of the na-tional police force prepared to maintainsecurity after withdrawal, Afghanistan is al-ready headed in the right direction. “I don’t buy this increasing gloom and doom,”

he said. “But (the future) does depend on whatAfghans continue to do to support and sus-tain security forces.”Jan Kubis, a special representative of theUnited Nations Assistance Mission toAfghanistan, questioned the ICG report’sconclusion but agreed the upcoming electionswill demonstrate the country’s will to moveforward. He said people can forget aboutmaintaining optimism if there is not a properpolitical transition. In addition, Kubis called for patience regard-ing the action plan developed at July’s TokyoConference, where donors pledged 16 billiondollars in development aid to Afghanistan. “None of the areas – democracy, integration,budget planning, inclusion, sustained growth –are something you can just tick off,” he said. Olomi understood why politics, regional co-operation and economic security dominateddiscussion. That’s what the conference calledfor, after all. Still, he would like to hear moreabout education. He’s lived through the chaosmost of his life, and he sees order only emerg-ing if education is made a priority. “Education goes to the core of the problem ifyou’re looking at the long-term view,” he said.“We hope the Afghans taking over will realizethis and fulfil their responsibilities.”

FOREIGN AFFAIRS

Afghanistan, neighbours focus on regional economy security

By Andy Carling

By Andrew Wagaman

On 15 November, BP, the British oil company,has agreed to plead guilty to felony charges andpay $4.5bn in penalties, including $1.26bn incriminal fines, stemming from the DeepwaterHorizon drilling rig exploded in the Gulf ofMexico, killing 11 workers and causing theworst offshore oil spill in US history. This is thebiggest penalty ever levied by the US JusticeDepartment.

“This is unprecedented, both with regard tothe amounts of money, the fact that a companyhas been criminally charged and that indivi-duals have been charged as well,” Attorney Ge-neral Eric H. Holder Jr. said at a newsconference in New Orleans to announce thesettlement.

Assistant Attorney General Lanny Bre-uer said the tragedy "resulted from BP's cultureof privileging profit over prudence".

But the London-based oil producer still facesa potentially costlier battle with the gover-nment over civil penalties for the pollution un-leashed. The company could owe as much as$21bn in pollution fines under the Clean WaterAct if it is found to have been grossly negligent.Both the government and BP vowed to vigo-rously contest that issue at a trial scheduled tobegin in February. Investors are also likely to re-main cautious until the civil case is resolved.

Under the agreement, BP said it will pleadguilty to 11 felony counts of "seaman's man-slaughter" relating to the deaths aboard the dril-ling rig, admitting that its workers were negligentwhen they misinterpreted a key well safety test.

The company also will plead guilty to one fe-lony count of obstruction of Congress and ma-

king false statements for understating the rateat which oil was spilling from the well.

In addition to the settlement on 15 Novem-ber, three former BP employees were chargedby a federal grand jury with felonies in the in-cident, two of them for allegedly being negli-gent in supervising tests to seal the well.

“All of us at BP deeply regret the tragic lossof life caused by the Deepwater Horizon acci-dent, as well as the impact of the spill on theGulf Coast region,” BP Chief Executive Ro-

bert Dudley said in a statement. “We apologisefor our role in the accident, and as today’s reso-lution with the US government further reflects,we have accepted responsibility for our actions.”

The Deepwater Horizon rig blew up 50miles off Louisiana on 20 April, 2010. BP fi-nally capped the well on the sea floor after morethan 85 days. By then, the well had spilledabout 172mn gallons of crude into the gulf.

BP does not expect the settlement to affectits work in the Gulf. It said on 15 November

that no federal agencies have indicated an in-tention to suspend or disbar the oil giant.

Also revenue and profits have kept flowingdue to higher oil prices. The company earned$25.8bn in 2011 on revenue of $377bn. In itsmost recent quarter, BP earned $5.5bn on re-venue of $91bn.

Moreover, BP recently struck a deal in Rus-sia that will give it a 20% stake in Rosneft, ho-ping to exploit huge oil reserves in the RussianArctic.

ENERGY|ENVIRONMENT

Day of reckoning: BP pleads guilty, ordered to pay $4.5bn fine

On 15 November, Bulgaria finally agreed tobuild a segment of the pipeline South Streamon its territory. In the presence of the GazpromChief Executive Officer Alexey Miller andBulgarian Prime Minister Boyko Borisov,Gazprom Deputy CEO Alexander Medvedevand Bulgargaz’s Dimitar Gogov have signedthe document.

In exchange of its consent, Sofia will receivea 20% discount in the price of Russian gas overthe next ten years. In 2018 Bulgaria will be ableto renegotiate new, more favourable preferentialterms of the Russian gas supplies. These are justsome of the conditions of the new gas agree-ment, which was initialled immediately afterthe final investment consent from Bulgarianside. According the government's press service,personally Russian President Vladimir Putinordered to be reduced the price of natural gasfor Bulgaria after a telephone conversation withBorisov.

Under the new terms, Bulgaria will importRussian gas at a price of $430 per 1,000 cubicmetres. The firm volumes, which the countryshall receive under take-or-pay contracts, are

2.9bn cubic metres, 10% less than current lev-els. This is expected to allow Bulgargaz moreflexible negotiation of the required deliveryvolumes.

Completely isolated from the process will bethe companies Overgas Inc and Wintershall,in which Gazprom is a shareholder and which

until now were importing considerable quanti-ties of Russian gas as intermediaries, and thusthe price was considerably higher.

The opportunity Sofia to renegotiate theprices after six years is based on its ambitionsfor gas supplies diversification, which must bedone through the competitively South Streamprojects like Nabucco and by developing owngas deposits.

According to Miller, Gazprom intends tosubmit a proposal for the construction of gaspower plant in Bulgaria. "We will build thisplant ourselves and we are going to sign directsupply contracts of electricity at lower prices,"Miller said.

Amid the euphoria over the negotiated gasdiscount, which is far from the lowest in Eu-rope, did not became clear what will be theterms under which the Bulgarian section ofSouth Stream will be exploited. The exact pa-rameters of the investment decision were notdisclosed. It is not clear and how much of thetransit fees for the 63bn cubic meters gas peryear, which will pass through the pipe, will enterthe Bulgarian treasury.

On 13 November, Gazprom also reached adeal with Slovenia. Miller said constructionwould begin on 7 December on the RussianBlack Sea's coast.

Miller's statement came after Russia's PrimeMinister Dmitry Medvedev and his Sloveniancounterpart Janez Jansa attended the signing ofan agreement in Moscow giving the green lightfor the project. The deal was signed by Millerand Slovenia's Plinovodi General DirectorMarjan Eberlinc. The Russian company hassigned similar deals with Hungary and Serbia.

South Stream, due to start operating in 2015,is set to pump up to 63bn cubic metres of nat-ural gas annually. The gas would be piped fromRussia under the Black Sea to Bulgaria, Serbia,Hungary, Slovenia, Austria and Italy in one leg,and to Croatia and Greece in a second. Russiaprovides about a third of Europe's natural gasconsumption. Last year, Gazprom exportedabout 180bn cubic metres of natural gas.

The project is funded by Gazprom, whichowns 50% in the pipeline, with the other halfowned by partners France's EDF, Italy's ENIand Germany's Wintershall.

ENERGY|GAS PIPELINE

Bulgaria, Russian ink South Stream investment deal


ENERGY & CLIMATE

Fire boat response crews battle the blazing remnants of BP’s Deepwater Horizon in the Gulf of Mexico, 21 April 2010.

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Baghdad has warned Gazprom Neft,the oil arm of Russian gas monopolyGazprom, to quit oil deals with Iraq's au-tonomous Kurdistan region or pull outof its contract for the Badra oil field, FaisalAbdullah, the spokesman for DeputyPrime Minister for Energy HussainShahristani, was quoted as saying recently."Iraq sent a letter to Gazprom at the endof October asking the company for an of-ficial reply [and stating] that it shouldcancel deals signed with the KRG [Kur-distan Regional Government] or pull outcompletely from Badra oil field," Abdul-lah said.

In August, Gazprom Neft acquired a

stake in two oil blocks in the northern semi-autonomous Kurdish provinces of Iraq. TheRussia deal followed similar moves byFrench supermajor Total and Exxon Mobil.The Iraqi government considers unilateraldeals between Gazprom Neft and the Kur-dish government to be illegal.

Exxon was blacklisted by the centralgovernment for its action, though theUS oil company responded by an-nouncing plans to dump assets in south-ern oil fields governed by Baghdadinstead. Meanwhile, Baghdad expelledTurkey's state oil operator from anothercontract on 7 November. The move byExxon to quit the West Qurna-1 oilfield

in south Iraq will exacerbate tensionsbetween Baghdad and the autonomousIraqi Kurdistan region.

Iraq's cabinet also said it was expellingTurkey's state-owned TPAO from its ex-ploration block 9 oilfield for an unspeci-fied reason, denying it was prompted byany move by the Turkish company intoKurdistan.

In 2011, Gazprom said it expectedto start production at Badra with 15,000barrels per day in August 2013. The field,near the border with Iran, has 100mn bar-rels of reserves and is operated jointlyby Turkey's TPAO, Korea's Kogasand Malaysia's Petronas.

ENERGY|OIL

Baghdad warns Gazprom Neft over Kurdish agreements

On 13 November, the price of oil droppedto near $85 a barrel as the InternationalEnergy Agency (IEA) cut its forecast foroil demand during the last quarter of2012 and said the state of the global econ-omy will limit consumption expansion in2013. By early afternoon in Europe,benchmark oil for December delivery wasdown 44 cents to $85.13 per barrel inelectronic trading on the New York Mer-cantile Exchange. In London, Brent crudewas down 85 cents to $108.23 a barrel onthe ICE Futures.

In its monthly market report, the Paris-based IEA, which represents major en-ergy-consuming nations, reduced itsforecast for global oil demand in the finalthree months of 2012 by nearly 300,000barrels a day to 90.1mn barrels a day as aresult of economic weakness in Europeand the fallout from Hurricane Sandy inthe US, a late October storm that shut-tered some energy infrastructure along theUS East Coast. For 2012 as a whole, theIEA now estimates average daily demandat 89.6mn barrels, slightly higher than88.9mn barrels in 2011.

The IEA also said that Iran’s oil outputhad broken a string of seven straightmonths of declines as China and SouthKorea appeared to be importing morecrude from the Islamic Republic. Tehranhas been hard-hit by economic sanctionsby the West over its nuclear programme.

Crude oil prices were also affected byrenewed uncertainty over the EU debtcrisis. On 12 November, internationalcreditors failed to agree on Greece’sbailout programme. They plan to meetagain on 20 November to continue dis-cussing the release of the next batch ofrescue loans totalling €31.5bn.

In its longer-term report, the WorldEnergy Outlook published on 12 No-vember, the IEA said that by about 2020,the boom in shale oil production will help

the US overtake Saudi Arabia as theworld’s largest oil producer and put NorthAmerica as a whole on track to become anet exporter of oil as soon as 2030.

Jim Collins, a former US ambassadorto Russia and director of the Russia andEurasia Program at the Carnegie Insti-tute in Washington, told New Europe onNovember 7 that the Russian and Euro-pean energy interests have also taken dif-ferent turns over the last few years as thatmarket has changed. “The energy pictureis a very fluid one these days with newforms of natural gas production emerg-ing,” Collins said. But he added that it isunlikely that Russia will not be a part ofthe European energy structure in somedimension. “I don’t see any foreseeablecase in which Russia is not a part of Eu-rope’s energy picture,” he said.

Meanwhile, Chris Weafer, chief strate-gist at Moscow’s Sberbank InvestmentResearch, wrote in an e-mailed note to in-

vestors on 12 November that the oil in-dustry is concerned about the potentiallyhuge supply implications from projectionsfor growth in US shale oil and shale gas,the expected approval for the Canada-USKeystone Pipeline, the rapid increase inIraqi production and the imminent startof the giant Kashagan field in Kaza-khstan. “The price of crude moved up anddown with general market sentiment lastweek but, unlike equities, the price of oilheld onto gains as traders view prospectsfor a weaker dollar as very supportive foroil and China’s latest economic updateshows the economy to be slightly recov-ering. This supports two of the three crit-ical factors for oil, i.e. the dollar anddemand,” Weafer wrote. “The third con-dition for oil price support, that of supplyconcerns, also received some encourage-ment with the escalation of violence inSyria and new reports of Israeli prepara-tions for a strike against Iran,” he added.


ENERGY & CLIMATE

Detour: Gazprom'sSouth Stream bypasses Greece,Italy

Gazprom told New Europe the Russian gas monopolywill supply gas to Greece using the existing pipeline sys-tem. Gazprom was asked to comment on earlier reportsit has shelved plans to build the southern section ofSouth Stream gas pipeline ending at southern Italy viaGreece because demand in their markets cannot coverthe cost of the investment.“Gas supply to Greece will be implemented by usingexisting pipeline system. This is determined by demandin the market, which does not include the need to ex-pand existing facilities,” Gazprom said on 15 November.Earlier, Leonid Chugunov, head of the company’s Proj-ect Management Department, reportedly told a pressconference in Moscow that Greece and Italy have beenremoved from construction plans for South Streamsince Greece and Italy do not offer significant con-sumption prospects. Greece’s Environme nt, En-ergy and Climate Change Ministry told New Europeon 16 November that it has not been notified byGazprom.South Stream’s north-western route is expected to runtowards Slovenia and Austria via Bulgaria, Serbia andHungary. Chris Weafer, chief strategist for Moscow’sSberbank Investment Research, told New Europe byphone on 16 November it’s possible the South Streamprogramme will now change. “The economic case foractually building it as extensively as it was originallyproposed is no longer relevant so it’s very likely that wewill now see a shift of emphasis towards the northernpart,” Weafer said, adding that the southern branch maynot be built at all.The first reason is that it’s expensive and capex is nowimportant as Russian President Vladimir Putin tries tomake Gazprom more valuable, more attractive and in-crease the dividend payout, he said. The second reasonis that the markets have changed with shale gas and liq-uefied natural gas (LNG) and there is less justificationfor such an extensive and expensive project. The thirdreason is that there is a considerable doubt over the fu-ture economic condition of countries on the southernpart of Europe, Weafer said. The fourth reason is thatthe competing EU-backed Nabucco now looks also lesslikely to happen for the same reasons. “It’s an expensiveproject at a time when alternative energy sources fromshale gas and LNG are becoming more available to thecustomer base it was also targeting. So they have theexact same problems as South Stream but they don’thave ‘the big brother’ in form of the Kremlin orGazprom’s cash flow to fund it,” Weafer said. “There’sprobably more of a sense that Nabucco isn’t likely tohappen for economic and cost reasons and thereforethere’s less need to head them off at the passes with thesouthern link of South Stream,” he said. When it comesto energy with Russia there is always a mix of econom-ics and politics involved.Weafer said the Trans-Adriatic Pipeline (TAP) plannedto transport Azeri gas via Greece and Albania andacross the Adriatic Sea to southern Italy seems morelikely. “That at least has more an economic logic to it,”he said, adding that Azerbaijan wants to get into theEuropean market. “I think TAP will get built becauseAzerbaijan wants to build it.”

[email protected] on twitter @energyinsider

By Kostis Geropoulos

ENERGY INSIDER

Oil pumps in operation at an oilfield near central Los Angeles. The US is to become the world's

top producer around 2020, the IEA said on 12 November 2012, overtaking Saudi Arabia until the

middle of that decade.

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IEA forecasts weak oil demand, shale growth

Structural shifts in the economy have had sig-nificant impact on labour markets in recentyears. Happily the EU employment packagerecognises that reforms are needed to drive jobcreation and competitiveness, but it will takeseveral years before the benefits of reform beginto feed through into the economy and the EUmust drive transformation now if memberstates are to seize the opportunity by 2020.

To be fair some reform has already takenplace. In a number of markets policy makershave diversified contractual arrangements inorder to support job creation and widen theuse of some labour contracts (such as appren-ticeships in France). In Italy, the governmenthas reformed dismissal law, in order to bettersecure the risk attached to litigation for com-panies. Offering different forms of employ-ment has also enabled governments to clampdown on undeclared work and to bring asmany people as possible into decent, recog-nised work and the attendant social benefitswhich this affords.

I believe the most crucial component ofreform is flexicurity – striking an appropriatebalance between flexibility and security forboth workers and employers. Employees wel-come flexibility as it enables them to accom-modate other life-stage priorities and find abetter work/life balance. Companies need adegree of flexibility in order to cope with thefluctuations that characterise today’s econom-ic reality. Conversely, many workers want flex-ibility and companies need security when itcomes to hiring and dismissing workers.

Active labour market policies are also animportant element of reform, and fosteringstrong cooperation between public and privateemployment services will smooth transitionsby better matching supply with demand in the

labour market. Today in the Netherlandsworkers newly looking for work are sent firstto the private employment services while inthe UK jobseekers who have been unem-ployed for more than six months can be trans-ferred to the private sector for a more dedicat-ed and tailored approach. Other initiativessuch as the lifting of any unjustified restric-tions to private employment agencies andseeking to reduce the tax burden on labour willalso serve to make labour markets more agileand flexible and hence make growth and jobcreation easier.

It’s worth noting that those countries whotook early reforms and overhauled their labourmarkets have weathered the economic down-turn much better than those who have contin-ued to delay. Germany for example havingincreased the flexibility of its labour marketthrough reforms undertaken between 2003and 2005 currently has an unemploymentlevel at its lowest since 1992. In the UK,Netherlands and Scandinavia flexible labourmarkets and strong public/private partnership

have proved resilient in difficult economic cir-cumstances.

These markets also have a higher penetrationof temporary agency work which provides usercompanies with the flexibility they need to reactto increasing demand and drive higher revenuegrowth. A study undertaken in Germany 2011demonstrated that companies using agencyworkers accelerate faster out of a downturn.

However this picture of reform is sadly notuniform across Europe. Those countries thathave stalled reforms and continued to over-protect permanent contracts have stifled jobcreation and discouraged employers fromrecruiting new workers which particularlyaffects young people.

Italy, Spain, Greece and Portugal are lag-ging behind in terms of reaching the rightbalance between flexibility and security andthis has led to increased labour market seg-mentation with effectively dual labour mar-kets: half the employees enjoying over-pro-tected permanent contracts while the otherhalf are without a job.

While we can take some comfort in theknowledge that Italy has now started to imple-ment labour market reforms, the EU Directiveon Agency Work, which had its deadline fortransposition almost one year ago, has still yetto be implemented fully in many markets. Aslong as unjustified restrictions exist such assectoral bans or limitations on the servicestemporary work agencies can offer, the privateemployment services sector will not be able toplay its full role in creating jobs and transition-ing workers into growth sectors.

The case for well-functioning labour mar-kets driving growth and jobs is supported bysolid data. The OECD demonstrated howlevels of unemployment are linked to thestrictness of employment protection andresearch also shows a clear correlation betweenlabour market efficiency and the employmentrate. Most encouragingly, a study undertakenby the French Economic observatory in July2012 estimated that the level of growth need-ed to create employment has gone from 1.5%to 1% which indicates that markets with flex-ible, well-balanced labour market structuresare able to create jobs even at low levels ofGDP growth.

As 2012 draws to a close and 2020 loomsever closer the EU must recognise that just aslabour market reform does not happenovernight, nor are its benefits felt immediately.The EU must place pressure on those coun-tries who have yet to restructure their labourmarkets in order that they can transformthemselves and reap the benefits of it beforethe end of the decade. This should also bedone for the sake of the 23 million citizenswho are currently looking or a job.1 IW consult 2011 GmbH, “Zeitarbeit in Deutschland”

2011

Denis Pennel is Managing Director of Eurociett

ECONOMY

Reforms needed in labour marketsBy Denis Pennel


ANALYSIS

A pedestrian reflected in the window of a job centre in London. In the UK, strong public/private part-

nership have proved resilient in difficult economic circumstances.

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With the EU institutions being accused ofbeing distant from the European citizens, onechange the EU has made is the introductionof social media tools, such as Twitter, Face-book and so on. The first steps into the dig-ital world was taken by then commissionerMargot Wallstrom, who started a weblog tothe horror of most of her colleagues.

Today, a weblog is seen as a very useful tooland some commissioners, such as Commis-sioner Georgieva, have used it very effectively.

Debora Serracchiani, the Italian S&DMEP has the honour of being the most fol-lowed deputy on Twitter and she organised ameeting in the European Parliament withtwo of the EU’s online communicators.

She outlined the situation, “There is a bigseparation between citizens and policymak-ers. I think now we need different communi-

cation methods to our citizens. A lot of ourcitizens use digital information and we haveto use the same tools to communicate.”

Serracchiani also says that politicians alsoneed to improve their communication efforts,and not just use these methods during elec-tion times but as a consistent strand of com-munication. She also cautioned againstcutting back on digital engagement, “Wehave to invest to decrease the digital divide. Alot of MEPs are now thinking that we haveto cut this investment because we needmoney for jobs policies, but I think this is animportant key of our development.”

Antonio Deruda, a former press officer forthe US in Rome, turned consultant noted thechanges in communication, “When I workedat the US embassy we used to just send outpress releases, now they're using twitter andsocial media, the press release is just one ofthe tools.” He added that when he began,

they were sending out more faxes than emailsto journalists, but when he left nobody couldremember where the fax machine was.

However, Deruda was measured in the roledigital communication has in diplomacy, not-ing Hillary Clinton’s globetrotting showedcommitment in a way that internet commu-nications can’t. “Shaking hands remains themost important tool in diplomacy,” he insists.

But for a real change in approach, thereneeds to be leadership, “You can’t do a digitalrevolution bottom up, you need a strong po-litical will from the top. Where we see astrong political input we can connect it withintroduction of digital strategy.”

He adds, “When we look at Twitter useby top people, we don't see any interaction,or interaction between them. They are miss-ing the magic words, media and social.Without that, I don't see a future for digitaldiplomacy.”

Aurélie Valtat, in charge of digital com-munication at the European Council agreesthat the use of social media is only part of astrategy and not a magic solution. “We havebriefed Herman Van Rompuy on socialmedia two years ago and he picked it up, butwe're struggling with the interactive side.”

Noting how people use the tools differ-ently, she added, “ it also has to do with per-sonality. Some are more prone to sharing,being more personal than others. Traditionalleaders may understand, but don't take thestep into digital.”

She explains that the institutions are re-thinking their approach, saying, “Socialmedia is great but it’s not everything, we areworking on getting ourselves back to basics,handshaking, doing the basic stuff is veryrelevant.”

Ryan Heath, spokesman for Neelie Kroes,the ‘digital commissioner’ adds, “What is in-teresting is digital tools level the playing fieldin many ways,” adding that “we should look atseeing social media as multiplying a message.”

“Young people are a key constituency, butthey are disengaged group from the Euro-pean project. We have to turn up and talk tothem on social media.”

COMMUNICATION

Digital diplomacy is a tool to reach peopleBut not a replacement for traditional diplomacy

By Andy Carling

In summer this year, Ukraine and the EuropeanUnion finally initialed a far-reaching AssociationAgreement. Apart from paving the way for a closepolitical association between Kyiv and Brussels,this unique treaty text includes extensive provi-sions for a Deep and Comprehensive Free TradeArea. If signed, ratified and implemented, the As-sociation Agreement - the EU's largest ever treatywith a non-member state - would make Ukrainepart and parcel of the European integrationprocess. The Agreement would put the relationsbetween Kyiv and Brussels on entirely newgrounds, and provide for a comprehensive "Eu-ropeanization" of Ukraine's economy, political sys-tem, and public administration. It could one daybe seen as having been the first step towards a fullmembership of Ukraine in the EU.

In view of how the Ukrainian parliamentaryelections of October 28, 2012, took place, theprospects of signing the Association Agreementanytime soon look, however, dim. After the lastEU-Ukraine Summit of December 2011, Brus-sels had repeatedly made clear that the quality ofthese elections will be decisive for the future of theEU-Ukraine relationship. Two further conditions,namely ending selective justice against politicalopposition leaders, and implementing the reformpriorities - above all legal reforms - outlined in thebilateral Association Agenda were also voiced. Yet,the vague language and cautious communicationof these conditions indicated that the EU alsowanted to leave some room for maneuver, in casenot all of them would be fully met. Unfortunately,however, extensive manipulations took place both,before elections day, and during the counting andtabulation of votes leading the deputy head ofUkraine's Central Electoral Commission ZhannaUsenko-Chernaia to admit that the October pollwas the "dirtiest [parliamentary] election in thehistory of independent Ukraine." This leaves lit-tle freedom of action for Brussels ahead of the for-eign ministers meeting where the fate of theAssociation Agreement and future of the EU'spolicy towards Ukraine is to be decided.

What should the EU now, that the AssociationAgreement seems off the table, do? Below, we pres-ent a list of concrete steps that the EU should con-sider undertaking soon. We are here not repeatinggeneral calls for more support of civil society initia-tives, closer people-to-people relations, or intensify-ing academic exchange. These suggestions are valid,to be sure. Yet, not only have they been made beforeand are partly self-suggestive. They will also take ef-fect only in the mid or long term. What is nowneeded are urgent steps that have the potential toimprove EU-Ukraine relations, in the short run.We therefore suggest to:

1. Set out, in a single and clearly formulateddocument, the conditions the Ukraine has to ful-fill for the EU to sign the Association Agreement!So far, there has been a cacophony of EU repre-sentatives' statements on this issue. As a result, it isunclear what exactly Brussels expects from Kyivin order to make association and free trade be-tween EU and Ukraine feasible.

The exact formulation and mode of communi-cation of these conditions are important. Such adocument should reiterate the EU’s commitment

to association and outline priority reform areaswhich are prevalent, in the short-term perspective.These could be human rights and fundamentalfreedoms, the functioning of the judiciary andpublic procurement procedures, as well as thebusiness climate. Those are areas which have seensignificant deterioration, but in which acts of po-litical could also bring swift improvement. Thedocument has to be made public and be presentedas an appeal to the society as much as to the po-litical elites. In that way, such a document couldbecome a common reference point and instru-ment of domestic advocacy for various civic andpolitical actors in Ukraine.

2. Leak the text of the Association Agreement- preferably, its Ukrainian version - to the public!So far, the EU's offer has been a pig in the poke:There is much talk about the treaty, yet very fewpeople have ever seen it. To be sure, the Agree-ment's text is reportedly very long, heavy reading,and full of technical terms. It is not to be expectedthat millions of Ukrainians will start examiningthe text when it becomes freely available. Yet, onceleaked, journalists, politicians, business people,lawyers and academics will start reading and an-alyzing those sections that interest, and could be-come relevant to, them. While, perhaps, being fullystudied by only very few Ukrainian experts, thepublished Agreement text may, as a referencepoint and quotations source, substantially changeUkrainian public discourse about European inte-gration and Ukraine's role in it.

3. Sign and ratify the Association Agreementswith Moldova and Georgia once negotiations areconcluded, and do not wait for Ukraine! This way,the EU would kill two birds at once: First, Brusselswill show that its pronounced More-for-MorePrinciple does indeed apply which shouldstrengthen the credibility of its Eastern Partnershippolicy. Second, an EU association with Moldovaand Georgia will embarrass the current Ukrainianleadership, in the eyes of Ukraine's pro-Europeanelites, if not large parts of the population. Ukrainehad, under President Yushchenko, been the firstcountry to start Association negotiations with theEU in 2007. If now, however, Moldova and Geor-gia get Agreements that have been modeled on theUkrainian one, and start implementing, as well asbenefiting from, them, this would further under-mine the legitimacy of Yanukovych's erratic foreignand domestic policies.

4. Consider giving Moldova and, possibly, Geor-

gia too a conditional and long-term, yet, neverthe-less, unambiguous EU membership perspective!Formulate this offer in a way as to make clear thatit is, in the case of Moldova, unrelated to Roma-nia's pressure, and, in the case of Georgia, not dueto US demands, i.e. in neither case an extra-ordinarydecision. Indicate that such offers may be made toother countries which respect common values andshow adequate political will in the future too. Thisway, Ukraine's elite and society may finally under-stand that there is a real chance to join the EU oneday - if and only if Ukraine starts implementingsubstantive reforms. Today, there are many people,even in the Ukrainian expert community, who donot believe that Brussels will ever give Ukraine a se-rious chance to enter the EU. Explicit future acces-sion prospects for Moldova or/and Georgia,however, will be seen as an implicit membershipperspective for Ukraine too - without bindingBrussels, in any way.

5. Accelerate the visa liberalization process asmuch as possible! In a first step, the European Par-liament, should, sooner rather than later, ratify thealready agreed amendments to the Visa Facilita-tion Agreement. Second, the EU member states’consulates should become more customs-ori-ented. The EU's current restrictive visa policieshurt ordinary Ukrainians. These policies' often ar-bitrary implementation in many consulates acrossUkraine have already heavily discredited the Eu-ropean Union in the eyes of tens of thousands ofUkrainians. The EU consulates' complicated visaapplication rules, heavy processing fees, and some-times inconsistent, if not ridiculous decision-mak-ing on travel or work permits contrast sharply withRussia's liberal migration regime with Ukraine.Third, the EU should reiterate that entirely visa-free travel will become reality once Ukraine hasimplemented the reforms outlined in the VisaFree Action Plan.

6. Support Ukraine’s approximation efforts inthose sectors that are important for the future As-sociation Agreement and where no resistancefrom particularistic interests exists! Down-to-earth technical standards will, in any way, have tobe implemented at some point. If it is possible tomove forward alredy now without yet having theofficial framework of the Association Agreement,the opportunity to achieve instant progress shouldbe grasped.

7. Engage more actively with some of Ukraine'sso-called "oligarchs! Politics in Ukraine is, like in

other post-Soviet states, a two-level game: Whatis happening in the public domain is only the topof the iceberg of what is going on under the car-pet. Often substantive decisions in Ukraine arepredetermined behind the scenes by actors whomay not hold any significant official posts. These"oligarchs" include a variety of personalities - someof which are more dubious, and some less so. Witha selected circle of the latter, the EU should seek adialogue concerning what the EU wants from theUkrainian government, and what the AssociationAgreements means for Ukraine's economy. Moretrusting relationships with some of Ukraine's greycardinals could facilitate closer relations in the of-ficial realm.

8. Create a Ukraine research and informationcenter providing competent political, economic,social and legal consulting on current Ukrainianaffairs! This center could be publishing a weeklyanalytical bulletin as well as a monthly or, at least,bimonthly specialized journal on Ukrainian pol-itics, business, history, society etc. Such a centermay also hold annual conventions, monthly ex-pert round-tables, irregular public conferences, oroccasional press conferences which would bringtogether academic researchers, policy analysts,journalists, social activists, and decision-makersdealing with Ukraine.

Much of what went wrong in the EU's policiestowards Ukraine over the last twenty years has todo with the shockingly scant knowledge, acrossEurope, about the territorially largest Europeancountry. Even high-level bureaucrats in Europeanforeign ministries, chief administrators in majorinternational organizations, influential journalistsin leading media outlets, or policy experts in topnotch think-tanks often operate with commonplaces, stereotypes, and travesties when it comesto Ukraine. No European country has a centerequivalent to the Harvard Ukrainian Research In-stitute in Massachusetts, or the Canadian Insti-tute for Ukrainian Studies in Alberta. Europeneeds at least one analytical center that regularlyproduces and publishes topical investigations andin-depth research, on contemporary Ukraine.While such a center could also be partially or fullyfinanced by the Ukrainian side, it should be madesure that its scholarly competence, professionalreputation, distance to particularistic interests, andposition above politics are beyond any doubt.

If implemented swiftly and simultaneously,these measures could produce tangible results inEU-Ukraine relations within a relatively short pe-riod of time, e.g. within the next three to five years.They would not cost the EU much, but couldmarkedly change the atmosphere in relations be-tween Kyiv and Brussels. Ukraine is a pivotalcountry in the creation of a new transatlantic se-curity structure. If Ukraine's transformation is suc-cessful, this will have positive effects across thepost-Soviet space and in the Black Sea area.Should the Ukrainian state-building process fail,the repercussions would be felt far beyondUkraine's current borders.

Iryna Solonenko is a DAAD/OSI researcherof EU Eastern policies at the European Univer-sity Viadrina of Frankfurt/Oder, Germany.

Andreas Umland is a DAAD lecturer in Eu-ropean studies at the National University of "Kyiv-Mohyla Academy," Ukraine.

DIPLOMACY

EU-Ukraine Relations after the Ukrainian Parliamentary Elections


EU WORLD

By Iryna Solonenko & Andreas Umland

Protesters shout slogans as they hold placards showing Ukraine's jailed former prime minister Yulia Tymoshenko

during an opposition rally in front of the Central Election Commission in Kiev on 12cNovember. Members of

the rally urged Tymoshenko to stop her hunger strike, as she has deteriorated to the point where she can no

longer stand up from her hospital bed.

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18 - 24 November , 2012EU WORLD

A new partnership between Europe andAfrica, the African-European RadioAstronomy Platform (AERAP), is mak-ing South Africa and its partner nationsthroughout Africa a global leader inexploring the mysteries of space, hopingto find answers that will tell us moreabout the origin of the universe andstrengthen research and innovation inEurope and Africa, improve knowledgetransfer and stimulate competitivenessacross both continents.

AERAP has several projects, from theVery Long Baseline InterferometryNetwork, an array of radio telescopesthroughout Africa, and progress hasbegun on converting redundant satellitetelecoms dishes into radio telescopes.

Speaking in the European Parliament toastronomers and scientists from Europe andAfrica, Britta Thomsen MEP (S&D, DK)supported the declaration, saying, “Africaholds advantages that are not available inEurope and where there is considerablescope for further growth. This means thatradio astronomy in Africa has enormouspotential for growth and offers opportunitiesto European researchers and industry thatthey will not find in Europe. “She added that“scientific excellence in Africa changes ourperception of the continent.

“ However, she cautioned that negotia-tions over the European Union budgetfor 2014 to 2020 were a concern as “thesenegotiations will, among other things,determine the funding level and contentof both Horizon 2020 and theDevelopment Cooperation Instrument(DCI).”

Anita Loots from the SquareKilometre Array in South Africa says theventure “is incredibly important” as theyseek to increase their scientific capacity.

They are looking for around €10 millionover 4 years.

If you just look at the impact, it isextremely exciting, not just for the benefitsto the knowledge economy, it is also inspir-ing young people. We’re also looking formore African countries to join us.”

We’ve constructed smaller networksthat gave us the confidence to bud forSKA. We’ve proven we have the capabil-ities,” says Yunus Manjoo of the Pretoriabased National Research Foundation.“The young people see that this field isnow open to them, but this is a joint

partnership. All decisions are jointlymade. In the past Europe gave funds tocountry X to do Y. This is different.We’re real partners, not just here toreceive funds.”

European astronomers were full ofpraise for the progress South Africa hasmade. Dr Huib Jan van Langevelde,director of the Joint Institute for VLBI inEurope said, “They have begun retro-fitting telescopes and are refurbishingtelescopes in several African countries.They are very serious and are makingmoney available very quickly. It would be

good if the Europeans made a matchingeffort.”

The head of the SKA project in theNetherlands, Prof. Arnold van Ardenneagreed, saying, “We also see that theAfrican-EU connection is important andwe’ve proved that. I think the Africanshave embarked on a very interesting pathto promote science to their own peopleand educate young people for leadershiproles in science and engineering andthey’re involving industry and universi-ties. I don’t think we will be served as aglobal project without their dedication.”

ASTRONOMY

Boost for Africa EU astronomy co-operation‘Scientific excellence in Africa changes our perception of the continent’

By Andy Carling

POLITICS

America's Republican Party woke up to a headacheBritish MEP Nikki Sinclaire has been on anelectoral fact-finding mission to the US, andhas been on the campaign trail in Virginia.Here she reflects on the lessons to be learnedfrom the re-election of President Obama.The nation's demographics have changed,and white middle-class America apparentlyfailed to understand the implications. OneRepublican strategist, just days before thePresidential election, was confidently predict-ing that the electoral 'swell' that gave Obamathe presidency in 2008 simply would nothappen this time. Obama's voters were disen-chanted, he said, and they would not turn outin force again. He was wrong, and Obamaended up with 322 Electoral College votes ascompared to Mitt Romney's 206.The facts are simple. The white vote is indecline, whilst ethnic, particularly Hispanic,votes are on the increase. In 1992, theHispanic vote represented 2% of the elec-torate. In 2012 the figure had risen to 10%,and they are voting Democrat. Romney's policies on abortion, same-sex

marriage, and renewable energy belong in the20th century, and unless the Grand Old Partycan shed itself of its dogma, and start seeingthe world as it really is, and not how theywould like it to be, it will remain in the dol-

drums for a long time to come.The Democrats also have control of the sen-ate, and very importantly, President Obama isemphasising the need for the two parties towork together there and in the House of

Congress, something that plays well with theelectorate, but which might challenge andconfuse Republican parochialism. 60% ofvoters in the age bracket 18-29 years voted forObama, and the number of voters in this cat-egory is slowly growing, now accounting for19% of the electorate. 55% of women votedfor Obama, and given that they make up 53%of the electorate, this was a highly significantfactor. Amongst African-Americans, 93%voted for Obama, a statistic that speaks foritself.The one thing that leapt out at me during myweek working with campaigners inWashington DC and in Virginia was theyouthfulness of the activists. Optimism andenthusiasm abounded, and the numbers grewas the week wore on. America is moving on,and these activists are looking to the future,not trying to hold onto a past that they willnever live in. But America isn't just changing- it has already changed, and there is no turn-ing back now. If the Republicans are to regaintheir credibility, then they have to accept thatand move forwards alongside the rest of thecountry.

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The EU is talking about investing in sci-ence as a way of recovering from the finan-cial crisis. Are we doing enough to pro-mote scientific research?

In the UK funding has been falling andthat’s not good enough. In the future, theonly people who will be able to competeinternationally, who have not just the highend skills to do that at a very senior level,but also a workforce who can competentlyengage in high tech industries. It’s incredi-bly short sighted to cut science funding.There’s nothing more important for thefuture than building capacity for a hightech world. That requires good quality edu-cation and investing in science and engi-neering, both industry and research,because all those things that make life bet-ter, this is where they come from.

It’s also incredibly naïve to imagine thatthe old nations of the world have some-how, the right to be the wealthiest, becausethat right is conferred by history and amodest educational advantage. We can losethat advantage in a generation.

The EU is also trying to bring morewomen into science, how can we do that?

There’s no doubt that girls do better inschool than boys and it’s disappointing thatwe don’t have more women in science. Ithink there are problems around careerstructure, for example there are huge sacri-fices to be made, perhaps in the years whenpeople are most fertile, and it’s an unhappyreality that society is configured so thatwomen have the largest burden of childcare.

I think the right way to deal with that isnot by treating science as a special case, butaddressing those inequalities over who isthe primary care giver but also making itclear that we ensure that provision for child

care and provisions for people in the work-place, if they are a parent are more widelyavailable. I see no reason why men shouldnot also be the main care givers.

You’ve spoken out against pseudo-science, but there have been cases of scien-tists being sued for their views

I’ve had many threats. Somebody did tryto sue me and took me to court. It was avitamin salesman who went to SouthAfrica and started taking out full pageadverts saying AIDS medication will killyou and his solution to the AIDS epidem-ic was his vitamin pill. In a country with anAIDS denialist president, this was a veryirresponsible thing to do and I said so.

He brought a libel case against me andthe UK Guardian newspaper, which cost£532,000 to defend. Our costs were onlypartly paid, so although we won and he hadto drop the case, it cost us £170,000 to win,

roughly the cost of the average home in theUK and I think society needs to think verycarefully if it wants people to stand up andchallenge companies or individuals who aremaking worrying or untrue claims aboutmedical treatment, because at the momentthere are many cases, especially of doctors,who have had to stand up and raise con-cerns, but the costs for them have been£100,000 and all their weekends andevenings and holidays for two years.Society really needs to think if it is reason-able to expect doctors to do that.

I know myself that many, many journal-ists have dropped stories that could havesaved lives because they were worried aboutbeing sued. I also know many doctors whohave seen what has happened to those whoraised concerns and have said they wouldhave to consider very carefully if theywould speak out. That is doctors sayingthat society isn’t giving them sufficientprotection to allow them to do what wemost need them to do; that is speak upabout concerns that affect patient safety.

The issue over clinical trial data is notjust about new drugs but all medicines

We need the full results of all the trials ofall the drugs currently in use to be madeavailable to doctors and patients. That’s theonly way we can make safe, informed deci-sions about what treatment is best.Currently we have a flawed system, wherecompanies and researchers can withholdvital data, information about the safety andeffectiveness of drugs from doctors andthere’s no ethical justification for that.

It’s absurd that this is the case. Weknow that half of all the trials that arecompleted are never published, that lawspassed in America have been ignored,and there has never been a single finelevied. We know it’s an ongoing problemthat if affecting patients and we need a

sense of urgency in fixing it.

The EU is the right level to address this?Europe is the place where these things

are regulated for the UK but unfortunatelyit has dragged its heels in a very irresponsi-ble fashion, for example, the EuropeanMedicines Agency has had a commitment,for almost a decade now to make a publiclyavailable list of all trials that have beenconducted, which is a simple thing to doand they have failed to achieve this task.

That is an extraordinary and ridiculoussituation. They have all the information.We know that half of all the trials have notbeen placed on a publicly available data-base and they’ve never given me an expla-nation why, other than to say this will takesome time. This is not acceptable.

There is also the case of homeopathy, amulti-billion dollar industry

I think these are two sides of the samecoin. Drug companies and quacks use thesame tricks to mislead the public about themerits of their treatment. The only differ-ence is pharmaceutical companies useslightly more sophisticated tricks to con-fuse people, because the audience that theyare trying to bamboozle are slightly moresophisticated, but only slightly more.

But they are both cherry picking results,using misleading results in order to sell prod-ucts. Homeopaths have a fantasy that sellingsugar pills as placebos is a meaningfulresponse to wholesale regulatory failure ofthe pharmaceutical industry. Well, it’s not.

These issues are not complicated; I dis-cuss them in my book that has been in thetop ten. Normal people read this book andunderstand the problems. The biggestchange I would like to see is they seem tolike stories about bad drugs and this isabout bad systems. That’s what needs to befixed, lives are at stake.

SCIENCE

Dr Ben Goldacre: Invest in science, reform clinical trialsSave lives and make a better world

By Andy Carling

PHARMA

Does your medicine work?Even doctors don’t knowMedicine is broken say doctors

Does the medicine that your doctor pre-scribes you work? Is your doctor givingyou the best treatment?These are questions that affect everyone,not just in Europe, and the answers arefrightening say a consortium of doctorsand consumer organizations. They arguethat even doctors don’t know if they areprescribing the right medicine becausedata from clinical trials is frequently hid-den and ‘inconvenient’ results hushed up.“We know that only half of clinical trialsthat are completed are published in acad-emic journals,” Dr Ben Goldacre, theBritish doctor and writer said at theEuropean Parliament. He added that lawspassed to enforce publication of a summa-ry of trial results for the US in 2007 hadnot had effective results.

“There was no public audit of if that ruleworked or not. It took five years for us tofind out it had been ignored, only one infive trials met the reporting requirements,and we should have been notified whenthe first trial was overdue,” Goldacre said.“It’s not enough that all trials started fromnow are included, because I am a doctorwho prescribes medicines that have beenon the market since as long ago as 1896,”he adds, arguing for the release of histori-cal data from medicine in use today.Prof. Dr. Peter Gøtzsche, medical doctorand Director of the Nordic CochraneCentre agreed, saying, “Open access to alldata is a moral obligation towards thepatients.” But not only that, citing the caseof Tamiflu, where billions were spent byEU member states without knowing if thedrug was effective, or needed because“information was held back by Roche.”

The doctors stress that they face a moraldilemma because they are prescribingmedicine without knowing enough aboutthe drugs.Gøtzsche also says the current EU plan torequire summaries of trials is not enough,saying they need the full information. Dr. Trudo Lemmens, Professor in theFaculties of Law and Medicine of theUniversity of Toronto said that trans-

parency was needed to provide informa-tion on the safety and effectiveness ofmedicines going to market.Many people will have experienced visitnga doctor and trying one medicine beforeanother, until the ‘right’ one is found. Thedoctors say that this is because of the lackof data, and the situation will continueuntil doctors have access to all the data,including that on failed trials.

Dr Ben Goldacre, the acclaimed writer and doctor

By Andy Carling

H1N1 flu vaccine testing volunteer Robert Jackson (R), 65, of Roswell, Georgia, US.| EPA/ERIK S. LESSER

About 21,000 requests for access toGoogle data were made by governmentsaround the world in the first six monthsof this year, according to the latest trans-parency report of the search engine.

The study reveals that governmentsurveillance of online lives of citizens isincreasing rapidly, and the US is at thetop of the list with 7,969 petitions ask-ing for users' details.

Google has been publishing its trans-parency report since 2009 to show thenumber of requests it receives from dif-ferent government agencies and courts.In its first report it received 12,539 re-quests and the latest figure is 20,939.

“Transparency is a core value atGoogle. As a company we feel it is ourresponsibility to ensure that we maxi-mize transparency around the flow of in-formation related to our tools andservices”, said the firm in a blog post.

"This is the sixth time we've releasedthis data, and one trend has becomeclear: government surveillance is on therise”, it added.

In the majority of the cases, the re-quests are a consequence of current lawsin that specific country. For instance,

Turkey has rules related with defamingpublic figures and Germany with neo-Nazi content; therefore, they ask the firmto remove content that doesn't complywith their legislation.

Because laws are reflected in onlinebehaviour, Brazil “get a lot of requests toremove content during elections becausethere is a law banning parodies of candi-dates”, a Google spokeswoman told theBBC.

If we take a look to the Top 10, we canfind the US, France, Germany, Italy,Spain and the UK. In France and Ger-many, fewer than half of all requests wereremoved, while 64% of the petitions

were deleted in the UK and 90% in theUS.

The top three reasons cited by gov-ernment for content removal weredefamation, privacy and security.

Worldwide authorities made 1,789requests for Google to remove content,up from 1,048 requests for the last sixmonths of 2011. Turkey made 501 re-quests for content removal, including148 related to its first president MustafaKemal Ataturk.

To remove the requested content,Google needs a very specific reason, aweb address and must be asked by a rel-evant authority. NR

Governments online surveillance increasingGoogle's transparency report reveals 20,939 removal requests

The Chinese company Huawei, haswon the 2012 Global Excellent Tele-com Cloud Solution Provider of theYear award for its leadership and solu-tion competitiveness in the telecomcloud computing market.

“It is gratifying to see the team’s hardwork recognized by a global authoritysuch as Frost & Sullivan,” saidHuawei’s Bruce Wang, President ofCarrier Cloud Computing, at the Frost& Sullivan Best Practice Awards inGrowth Innovation & LeadershipCongress

The 2012 Global Excellent TelecomCloud Solution Provider of the YearAward recognizes outstandingachievements by companies in theglobal telecom cloud computing mar-ket over the past year.

Huawei received this recognition forentering the field of cloud computing in2008 and maintaining more than 10,000dedicated R&D and service staff; releas-ing its innovative cloud service manage-ment platform, “ManageOne”; andlaunching its Cloud Service Brokerage(CSB) cloud service innovation centre.

Huawei’s end-to-end cloud solu-tions have been implemented by

many of the largest telecoms in theworld. For instance, the companysupported the construction of ChinaMobile’s “International InformationHarbor”, which will be one of thelargest data centres in the world.Likewise, developed solutions forSingapore’s Starhub including a pub-lic cloud service platform.In addition, Huawei provided Sino-trans, the largest Chinese integrated lo-gistics company, with ITtransformation, managed services anddata centre consolidation ; and builtover 260 data centres worldwide, 35 ofwhich are dedicated cloud data centres.

By Nerea Rial

18NEW EUROPE18 - 24 November , 2012 TECHNOLOGY

The search engine has received 21,000 removal requests this year | Google

Huawei received the award for its leadership and solution competitiveness | CHINA OUT AFP PHOTO

The Anglo-American author and entrepreneur Andrew Keenis famous for his particularly views about Internet culture and theWeb 2.0. He visited Brussels to attend as speaker at the TEDxevent on 12 November and gave his point of view to New Eu-rope about the current issues related to the tech giant Google.In March, Google introduced its Privacy policy, which, amongother characteristics, integrates users' information from all itsservices. The EU determined that it don´t respect privacy andasked the company to be clear and more transparent. AskingAndrew Keen if these measures can limit firm's innovation, hestated that “this is what Google will always say, but I don´t thinkso.” He explained that the real problem of Google is its businessmodel, which is based on offer free services, like Gmail, Google+or YouTube, and with this innovation “they are doing a verygood job.” However, now they cannot ask users to pay for theseservices, because this will generate a countermand in a businessmodel already established, he said. Google's Privacy policy is directly linked to users, but are they re-ally aware of what is going on with their data? According toKeen they are not, but also considers that “they care about otherthings”, such as jobs or money. “Some people may think that theintegration of their information is creepy, because they havecompromised data, but others can say that is worth to pay off.”In the case that the American company decides to transformits free business into a paying model, “unfortunately, most of thepeople will say no”, he told New Europe, “people like it becauseit's free.” “Most of users are nervous about what happening totheir data, but they are also lazy and don´t want to know toomuch about it”, he stated.Google News is one of the search engine's services most popu-lar and useful, but last month, 150 members of the media inBrazil decided to abandon it. Likewise, Germany is working ona copyright law to require web browsers pay for reproducingcontent from news websites and François Hollande gave Googlean ultimatum to solve the issue over revenue sharing.According to the author “Google is the data bases record in ourworld, and they are taking the wrong street”, because “GoogleNews is a great way to get benefits”. Besides, they have “theirown economic problems” in this time of crisis, he said, addingthat “this is not the solution. They have to make sure thatGoogle benefits them, not break them.”To add more troubles to its existence, Google is facing questionson tax avoidance in UK, due to the small amount of money it'spaying in the country, despite it gets billions of pounds of ben-efits. “They have very good lawyers and taxes are not a capitalissue”, Keen stated.He is not critical with this situation but considers that “the lawneeds to be checked, it´s not a problem with the companies.”Keen defines as a “big issue” and a challenge the anti-competi-tive strategy of the company, which is negotiating with JoaquinAlmunia, Vice President of the European Commission re-sponsible for Competition Policy, who demanded Google tochange if they want to avoid a penalty for abuse of dominant po-sition. Google is using its online dominance to obtain benefitsand “people has to believe that there is the possibility that Al-munia will do what they did with Microsoft”, he said, and addedthat users will be “very unhappy” with the result. NR

Andrew Keen ‘The realproblem of Google is itsbusiness model’

Andrew Keen speaked at the TEDxBrussels on 12 November

Huawei wins solution provider award

Horizon 2020 and its €80 billion budget isthe latest programme for research and in-novation in Europe, and on 13 Novembersome of the key members of the EuropeanParliament gave their point of view and an-swered questions from the audience aboutwhat should be done with it.The programme, running from 2014 until2020, will combine both elements to generategrowth and jobs in Europe, but MEP EditHerczog stated that in times of austerity poli-cies are also needed and that €80 billion is notenough to achieve good results."€80 billion for Horizon 2020 is the mini-mum amount", she said, adding that Parlia-ment's position is “80 +” and that the“Council doesn't listen to Parliament andyoung people.”MEP Maria da Graça Carvalho agreedwith her and explained that “Horizon 2020is much more ambitious than FP7 so morebudget is needed”, but “our red line is theproposal of the Commission.” She explained that an agreement betweenthe Council, the Commission and the Par-liament is a must, because this new pro-gramme is "exactly the growth pact we needfor Europe."Talking about the ITER project, which fo-

cuses on fusion as an energy source, Herc-zog considered that it should not be part ofHorizon 2020 “unless there's extra moneyin a separate envelope.” In addition, she saidthat “ITER is a political project going backto Gorbachev and Reagan.”However, according to MEP Peter Skinner,who is also Rapporteur for Atomic Re-search, nuclear fusion has reached a pinna-cle in Europe and will be very difficult toseparate it from Horizon 2020.Europe's new strategy aims to go interna-tional and compete with strong markets,such as China. Therefore, "we need to be atthe top of the value creation chain", saidPhilippe Lamberts MEP and Rapporteurfor the EIT regulation establishing the In-stitute, adding that “every time we postponeR&D investments we postpone returnsfrom R&D.”All the MEPs speaking at the Parliamentcalled on citizens' for collaboration and alsoother European bodies to make sure theprogramme goes democratic and transpar-ent. According to James Elles, MEP andMember of the Budget Committee, the“EU budget is undemocratic. Council hasalways decided budget, Commission hashad no say in this.”

MEPs consider H2020budget not enoughNew programme for R&D is ambitious and €80bn is “the minimum amount”

19NEW EUROPE18 - 24 November , 2012TECHNOLOGY

MEP Maria da Graça Carvalho

Data protection, amust on e-commercePeter Hustinx “We need very strong intervention mechanisms”

E-commerce is a recognised and integral partof the European economy, which is increasingits presence year by year. During the 4th AnnualEuropean E-commerce Conference, membersof tech businesses, consumer groups and EUpolicy makers, discussed the potential impactthat the latest data protection proposals of theEuropean Commission can have on this onlinesector.According to EMOTA , the European Multi-channel and Online Trade Association, and ,the European Digital Media Association, e-commerce will reach a turnover of €300 billionthis year. But to achieve this objective, is neces-sary to know which are the implications of thedata protection rules and how they can benefitusers. All the speakers during the conferenceagreed on the presence of framework to protectconsumers' data. Users already have experienceon e-legislations, “online tracking is an examplethat changed consumers' direction”, explainedDanilo Labovic, Managing Director ofEMEA, and the EU e-Directive has createdmore awareness: they prefer to visit sites thatcomply with this “cookie directive”, he stated. There is a lack of trust among the citizens re-lated with their personal information, but “wecan offer data protection”, said Peter Hustinx,member of the European Data Protection Su-pervisor. “We need very strong interventionmechanisms”, he explained, “and the possibilityof imposing specific behaviour exists, if a goodresponsibility is not happening.”

However, not everyone accepts Commission'sproposal, which was presented in January. Ac-cording to the UK’s Justice Committee, thebody drew up two documents -a data protec-tion directive and a regulation-, and both con-tain different rules.“We are proposing legislation on how apply afundamental right. This is not “e-Privacy Di-rective 2”, but it's online as well”, said ThomasZerdick, Policy Officer-Data Protection on theDG Justice at the European Commission.However, we need “one single law, only onetext”, based on individual control of personaldata, simply rules, a consistent internal marketapproach and harmonisation between all theauthorities, he explained.Because “in the online environment is very easyto lose trust”, businesses and institutions mustbe transparent and clear, stated Razvan An-temir, Legal Affairs Adviser of EMOTA.“There are still a lot of questions and we needan easy framework.”“When we have a problem, we create rules”,said Marisa Jimenez, European Privacy PolicyCounsel at Google. “It's necessary a frameworkfor today and for tomorrow. It's important thatthe regulation continues supporting innova-tion.”Speakers explained that both regulators and cit-izens have the responsibility of taking care oftheir information. Besides, they highlighted thatwith e-commerce, cross-borders are a realityand measures are also needed when consumersbuy products to other countries that are not Eu-ropean.

E-commerce will reach a turnover of €30 billion in Europe this year

The European Commission adopted lastyear a new Directive to combat sexual abuse,sexual exploitation of children and childpornography, which aims to restrict access tochild abuse material on the internet. On 15November, a group of experts discussed at theEuropean Child Safety Online Conferencewhat are the next steps that should beadopted.

The problem of child abuse on the Internetexists since 1990, but it's getting worse andtoday, results much more difficult to detect im-

ages and it's easier for people to share them onthe digital world, explained Patricia Manson,Head of Unit Inclusion, Skills and Youth, at theDG Connect of the European Commission.

In May, the institution announced a newstrategy to protect children of Internet's risksto, among other reasons, generate moreawareness and to show citizens the impor-tance of this problem. Manson also high-lighted that to tackle the situation a legalframework is needed, along with self-regula-tions and funding programmes.

Besides, Safer Internet Centres are presentin 30 European countries and are made up ofawareness centres, hotlines and, in somecountries, of helplines. Hotlines receive110,000 reports of child abuse per year and30,000 of them go forward to law enforce-ment, Manson said, and added that “this isnot just a job for us, is a responsibility for allMember States.”

Because the number of images and videosrelated with child abuse is increasing, stillmore work needs to be done, even at interna-

tional level. In this way, Europe can take asan example how the US is trying to fight thisissue, where the “tool box” has evolved andnow every business who detects these kind ofimages must report it immediately or will facelegal consequences, explained MichelleCollins, VP & Director, National Center forMissing and Exploited Children.

But this is not only an institutional concern,companies also should take measures and usetheir own resources to avoid future problems.For instance, Facebook is using Microsoft'sPhotoDNA technology, which is designedto identify and remove images that exploit orendanger children.

Online child abuse increasing, new steps needed

By Nerea Rial

20NEW EUROPE18 - 24 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

It́ s back! "Walking with Dinosaurs - the Arena Spectacular" - theshow that has captivated audiences all over the world is set to returnto Brussels this winter.The show brilliantly revives the time when dinosaurs roamed theplanet and is set to be a sure-fire hit with young and old alike.The show tells the story of how the likes of the 12 metre-high, 6tonnes Tyrannosaurus Rex - better known as T-Rex to most of us -dominated life some 65 million years ago.It gives us the chance to look in awe at how they walked, listen totheir terrifying roar and watch in wonder as they fight among them-selves for supremacy.From their bright eyes to riddled skin, these creatures of yesteryear aremiraculously brought back to life before our very eyes.

RESTO BITESLe Vintage, Place Wiener 6, Watermael-BoitsfortTel: 0484 697241, www.levintage.beThink of a cross between a brasserie and grastromomic restaurantand that's what you'll find at this wonderful 44-seat eating estab-lishment. In the 18 months since young Belgian couple Frederic andMelody Warzee took over it's been tastefully transformed and nowoffers traditional French cuisine but with a reinvented, modern twist.There's a special lunch menu with a mains and starter at €19 or justa mains at €14.The three other menus, which change monthly, range in price from€25 to one at €40 featuring game. They include Saint Pierre fish,Uruguayen beef and pigeon.All are absolutely delicious and preparedwith a real flourish by the young Belgian chef Johnny Brosteau.There's also a superb a la carte menu and, in the afternoon, cheese andcharcuterie (and 'special' glass of beer/wine) are served.There are also seminar and banqueting rooms for up to 30 people.For some wines, diners benefit from paying only according to theamount consumed.Look out for the Tuesday 'ladies night' when the 'discovery' menuis at half price for women, 'happy wine night' and even the strikingfront cover of the menu. Open Noon-10pm (Tues-Fri). In an area packed with good restaurants, this one easily stands outamong the others for its excellent service and cuisine.Highly recom-mended.

Classic ChristmasBozar Music Marathon, 18 - 24November Centre for Fine Arts All week, Bozar hosts a succes-sion of talented musicians at theCentre for Fine Arts. Italian divaCecilia Bartoli returns to Brusselsonce more on Sunday 18 No-vember to play with the Kam-merorchesterbasel, followed by aproduction of Mozart’s “Magic Flute” by Akademie fürAlte Musik on Monday, 19 November. Ghent’s René Ja-cobs, an opera and Mozart aficionado, conducts. On Tues-day pianist Nelson Friere will play Brahms’ second pianoconcerto, and on Wednesday pianist Leif Ove Andsnesplays two Beethoven concertos with the Mahler ChamberOrchestra. Perhaps the highlight of the week is the concert featuringpianist Alice Sara Ott, conductor Stephen Blunier and theNational Orchestra of Belgium. They will play JeanSibelius’ “The Swan of Tuonela (Lemminkäinen Suite, op.22/2),” Edvard Grieg’s “Concerto for piano and orchestra,op. 16,” and Pyotr Tchaikovsky’s “Symphony no. 5, op. 64.”At just age 24, Ott, a German-Japanese pianist, has woninternational fame. She has made recordings of FranzLiszt's Transcendental Etudes and Frédéric Chopin'swaltzes for Deutsche Grammophon.The programme includes introductions, meet-and-greetopportunities, a video screening, and public rehearsals, alladding up to a complete musical experience. For more in-formation, go to www.bozar.be/webpage_agenda.php?pageid=629&id=12933&bozar=music

Pappano's BachAntonio Pappano 24 NovemberCenter for Fine Arts, Henry LeBoeuf Hall 20:00Antonio Pappano, a British con-ductor of Italian heritage, returnsto the town where he was musicdirector (of La Monnaie) for adecade, from 1992 to 2002. This concert draws on a singledecade: the 1840s. Pappano, his orchestra dell’AccademiaNazionale di Santa Cecilia and pianist Jan Lisiecki willplay Giuseppe Verdi’s “Sinfonia da Luisa Miller” and

Robert Schumann’s “Klavierkonzert a-moll, op. 54” and“Symphonie No. 2 in C major, op. 61.” Both Verdi andSchumann ignored traditional structures, though thesenumbers are inspired by the greats that proceeded them.“Louise Miller” takes a cue from Schiller’s “Intrigue andLove,” and Schumann’s “Symphony No. 2” reflects hisstudies of Bach’s fugues and Beethoven’s triumph of freewill theme. Pappano is the youngest conductor to lead the or-chestra of the Royal Opera House in London, ac-companying both the Royal Opera and Royal Ballet.He was knighted for his services to music this year.For more information, go to http://www.lamon-naie.be/en/concerts/234/Antonio-Pappano

Mystic momentsJason Mraz 29 November Forest Nationale 20L00 Jason Mraz has an inter-esting musical back-ground. He didn’t pick upa guitar until age 18, aftera moment of revelation inthe middle of CentralPark at Strawberry Fields.Following this revelationhe was approached by apsychic that told him, “Toavoid the questioner andgo with what you know,Get experience youth.”From that point on hemoved to Ocean Beach in San Diego, California, where hebegan to focus on his music. In 2001 Mraz released hisfirst album, a live accoustic set called “Live at Java Joe’s,” tosuch great acclaim that he was signed to Elektra Records.He came out with his second album, “Waiting for MyRocket to Come,” in 2003. It included his breakout single,“The Remedy.” This past April he released his fourth stu-dio album, “Love is a Four Letter Word,” to generally fa-vorable reviews. Mraz’s has collaborated with musicianssuch as Bob Dylan, Paula Cole, Jewel, David Gray, Billy“Bushwalla” Galewood and Tristan Prettyman. He haswon two Grammy awards for being Best Male Pop VocalPerformance and Best Pop Collaboration with Vocals, fea-turing Colbie Caillait. For more information, go tohttp://www.forestnational.be/fr/calendrier/tous-les-genres/p/detail/jason-mraz

Alice Sara Ott | by Felix Broede/ DG

Credit: EPA

Brussels agenda 19 - 29 November

21NEW EUROPE18 - 24 November , 2012ARTS & CULTURE

On December 4, BOZAR welcomes DanielCohn-Bendit, Guy Verhofstadt and Jean Qua-tremer, journalist for Libération and co-author ofthe manifesto For Europe!, for a discussion onthe future of Europe. The debate will be moder-ated by Béatrice Delvaux of the journal Le Soirand Yves Desmet of the journal De Morgen.Among other topics, the debate will mainly beabout the democratic gap in Europe in the con-text of the European crisis of confidence. The dis-cussion will also be on theNorth-South/East-West divide in Europe. Lastbut not least, the three speakers will give theiropinion on the role of the European Parliamentand the three future presidents of the EuropeanInstitutions (2014). The audience will also be of-fered the opportunity to ask questions.As federal institution and multidisciplinary artcenter located in Brussels, the capital of Europe,BOZAR’s aim is to create bridges between peo-ple, countries and cultures through high level artis-tic events. BOZAR is also a meeting place for

Belgian and European decision-makers to discussthe European project through a cultural lenses.BOZAR also offers itself as a European culturalplatform and a venue for debates on Europe inpartnership with the European Institutions.In the same vein as the coming debate withGuy Verhofstadt and Daniel Cohn-Bendit, lastseason BOZAR welcomed Luuk van Midde-laar and Paul Magnette for a discussion on thecrisis facing the Euro and the European dream,as well as Martin Schulz and Boualem Sansalfor a debate on the Arab spring and the re-sponsibilities of Europe.Also on December 4, a conference will be held byMore Europe – external cultural relations, at5:30pm in the Chamber Music Hall at the Cen-tre for Fine Arts. More Europe is a campaignwhich aims to convince politicians and policymakers to place cultural relations in the heart ofthe EU’s external affairs.More information: http://www.bozar.be/activ-ity.php?id=13018&lng=en

Art Gent - AustralianparticipationOpening 29 November Stand n° L 106, Flanders Expo, Gent Showing from 30 November - 4 December 2012 Daily, 02:00 PM to 10:00 PM http://www.artsdaustralie.com Contemporary Australian Indigenous art willbe on display at Art Gent. The art fair opensat the Flanders Expo in Gent on Thursday29 November and runs until Tuesday 4th De-cember. Among the exhibitors will be ArtsD'Australie, a Paris-based gallery run byStephane Jacob. He will exhibit works by sev-eral of what he describes as "Australia's mostadmired and innovative contemporary in-digenous artists".ARTS D’AUSTRALIE•STEPHANEJACOB, the French-based gallery devotedto the promotion and understanding ofAustralian Indigenous Arts in Europe, sig-natory to the Indigenous Art Code and inclose conjunction with Indigenous ArtCenters, will display a selection of excep-

tional contemporary paintings and sculp-tures, created by the most celebrated artistsfrom Central Desert, Queensland and Arn-hem Land as well as the Torres Strait Is-lands. Showing: Bill Whiskey Tjapaltjarri,Wentja Napaltjarri, Kathleen Petyarre, AbieLoy Kemarre, Dennis Nona, etc.

Serena Hodson,Vintage Hotel - Brussels 15 November - 18 November.Worbz is an international photographyplatform. Worbz’s objective is to presentyoung international talented artists and isoffering them a unique opportunity toshowcase their work in joint exhibitionsthat each has a specific topic. The second thematic exhibition organisedby Worbz is taking place in the trendy Vin-tage Hotel in Brussels from Thursday 15November to Friday 18 November. Worbz has selected 13 young artists aroundthe theme ”VINTAGE SPIRIT”. Amongst these artists is Serena Hodson,New Zealand-born but now based in Bris-bane Australia. From her website: “Serenah is an Inter-national Multi Award Winning and Pub-lished Photographer. Serenah has wowedphotography fanatics and pet lovers withher intuitive and whimsical animal por-traits. Her work revolving around herdogs, Rocco, Ralph and Simon has astrong fan base right around the worldgiving followers a quirky insight into Ser-ena’s pet loving world. You can View She-rina's work http://www.serenahphotography.com.au/html_ver/

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For Europe!Guy Verhofstadt and Daniel Cohn-Bendit at BozarAs a European cultural platform, the Center for Fine Arts welcomes GuyVerhofstadt and Daniel Cohn-Bendit for a debate centering around theirmanifesto For Europe!. A discussion on the crisis facing Europe and onits future.04.12.2012 20:30 Centre for Fine Arts | Henry Le Boeuf Hall

Daniel Cohn-Bendit & Guy Verhofstadt © Koen Broos

GERMANY | ENERGY

Bosch steps out of Desertec A multi-billion-euro project to harness renewable energyin the Sahara Desert, known as Desertec, has lost anotherbig partner: German tech giant Bosch said it is jumpingship by the year's end, The Local reported on 13 Novem-ber. The company's three-year contract expires at the end ofDecember. "We will not be extending our partnership," aspokeswoman for Bosch subsidiary Rexroth told FinancialTimes Deutschland on Tuesday, saying the company wasrefocusing its priorities. Desertec is looking to make use ofsolar energy from Northern Africa and the Middle East inthe decades to come. "The aim is to supply around 15% ofEurope’s electricity by 2050," the Desertec Foundation'swebsite said. Yet despite gaining backing from big firms,progress on the project has been markedly slower than ex-pected. Bosch's announcement came shortly after Germanengineering heavyweight Siemens, which is abandoning itssolar power business altogether, said it would not stay on asa shareholder in the Desertec Industrial Initiative (DII).DII confirmed Bosch's decision, telling the FTD it "re-gretted the move." Bosch Rexroth was one of the initia-tive's associated partners. But DII said the number ofcompanies associated with the initiative was set to rise bythe year's end. Bosch Rexroth's involvement in Desertec isfocused on technology exchange and expert workshops.

SWEDEN | EMPLOYMENT

Redundancies on the riseRedundancies in Sweden are on the rise, with a fresh re-port showing that twice as many workers were laid off inOctober compared to the same month last year, makingfor a labour market climate similar to that of 2009, TheLocal reported on 14 November. Some 10,300 peoplewere made redundant in October, according to fresh fig-ures from the Swedish National Employment Agency(Arbetsformedlingen). ”It is becoming clear that there isan on-going weakening of the labour market," theagency's chief analyst Clas Olsson said in a statement.The previous month 7,330 people in Sweden were laidoff and in October 2010 that number was 5,700. Thenumber of redundancies so far this year is on par withwhat it was in 2009, in the wake of the financial crisis of2008. The number of registered unemployed was at theend of October some 400,000 people, or 8.6% of thelabour force. At the same time last year the correspon-ding number was 8.2%. The rise in redundancies indi-cates that employers have a more pessimistic outlook forthe immediate future, which could mean a further weak-ening of the labour market. However, according to Ols-son, there is at least one bright spot on the horizon:”

DENMARK | BANKING

Jutland banks merge Investors in the Aalborg-based Spar Nord bank approveda plan to merge with Skive-based Sparbank, creating anew bank that will carry the Spar Nord name and serve320,000 customers with 90 branches across the country,Copenhagen Post reported on 14 November. The agree-ment, which creates the country's sixth largest bank,marks the first time in recent years that two healthy bankshave merged. The merger was widely expected to be ap-proved after the Spar Vest Fonden, Sparbank's largestshareholder, had indicated it would vote in favour. Themerger still must be approved by Finanstilsynet (FSA),the financial supervisory administration. “We have beenvery thorough in preparing for this merger and we areeager to move forward, “Spar Nord managing directorLasse Nyby told Jyllands-Posten newspaper. Nyby saidthat the merger will improve the new bank’s ability tocompete and market position throughout Jutland and inkey locations nationwide.


EUROPEAN UNION

Germany's leading airline Lufthansa saidon 13 November that it had reached adeal with cabin crew representatives toend a bitter dispute that had led to workstoppages, The Local reported.

The accord entails a near 4.6%salary hike on average, said the UFOtrade union that represents some18,000 cabin staff.

Lufthansa said the deal would be valid

for two years, from January 1. The airlinealso agreed to refrain from operationallayoffs until the end of 2014.

Lufthansa and the UFO union agreedto mediation in the dispute after staffstaged strikes in September groundinghundreds of flights which mostly hitFrankfurt airport, Lufthansa's main huband Europe's third-busiest airport.

The union had initially called for a

five-percent pay rise while Lufthansaoffered 3.6%.

The airline has engaged in a severecost-cutting programme and has alreadyannounced the loss of 3,500 administra-tive jobs but last month it reported asharp rise in earnings in the third quarter.In one concession to the unions,Lufthansa had already agreed not to em-ploy temporary cabin crew until 2016.

Lufthansa cabin crews get a deal GERMANY|AVIATION

Metso to supply new tissue production lines to ChinaSWEDEN|PAPER

Metso has received a repeat order for fourcomplete tissue production lines for Hen-gAn Group in China. Two of the lineswill be located at Shandong HengAnPaper in Shandong Province, and two atHengAn Wuhu Paper Co in AnhuiProvince. The value of the order is notdisclosed, it was reported on 15 Novem-ber. The new lines will add another240,000 tonnes a year of high-quality fa-

cial, toilet and towel grades to HengAnGroup's total production, and will con-solidate the company’s position asChina's leading tissue producer. The rawmaterial for the new machines will be vir-gin pulp. HengAn is a leading, fast-grow-ing Chinese consumer product companywith a nationwide sales and distributionnetwork. It is a fully owned subsidiary ofHengAn International, whose shares are

listed on the Hong Kong stock exchange.The company’s turnover in 2011 was ap-proximately € 1.7 billion, and it hasaround 20,000 employees.

Metso is a global supplier of technol-ogy and services to customers in theprocess industries, including mining, con-struction, pulp and paper, power, and oiland gas. It has 30,000 professionals basedin over 50 countries.

Crediting survey: 2013 set to be dynamic LITHUANIA|BANKING

The Bank of Lithuania’s conductedsurveys of non-financial enterprises andcommercial banks revealed that busi-ness crediting would become more dy-namic next year: banks are disposed notto tighten lending conditions, while en-terprises that project business develop-ment will seek to attract the doubleamount of financial sources from theoutside.

“Banks are forecasting an average 3percent growth in their loan portfolio,

and some of them even expect an in-crease of 5 percent,” said VirgilijusRutkauskas, Chief Economist of theMacroprudential Analysis Division ofthe Financial Stability Department atthe Bank of Lithuania. According tohim, growth in enterprises’ demand forcredit outpaced bank forecasts, whilehouseholds’ demand for loans for housepurchase remained unchanged in alsothe recent half-year.

Based on the results of the Bank Sur-

vey, in the next half-year (by April 2013)the lending conditions for households forhouse purchase are likely to remain un-changed, while the conditions for con-sumer and other loans to ease slightly.

Banks that participated in the Surveyexpect that in the next six monthshouseholds’ demand for loans (both forhouse purchase and for consumption aswell as other purposes) will increase, yetthe increase will be slightly more mod-erate than six months ago.

A stewardess of German airline Lufthansa carry an airplane model as she walks down the gangway during the opening of the Berlin airshow ILA in Schoene-

feld, outside Berlin,Germany. Germany's leading airline Lufthansa announced on Tuesday, Nov. 13, 2012 that it had reached a deal with cabin crew representa-

tives to end a bitter dispute that had led to work stoppages.

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AUSTRIA | AVIATION

Ryanair scraps Graz- London route Ryanair has axed its route between Graz and London fromits summer flight plan, Austrian Independent reported on13 November. The airline said that the reason for the deci-sion to stop the flight was the higher costs at Graz airport,a claim which the Austrians rejected as unfounded. Ryanairsaid they had requested that Graz airport reduce the re-cently increased costs but the request had been refused.They said other European airports had agreed to reducetheir costs in order to boost traffic. Airport boss GerhardWidmann said they had been in negotiations with the air-line for a month and went to the absolute limit that theycould economically manage in a bid to settle the dispute.He also said the timing was strange as he understood thenegotiations were still ongoing if slow and there was stillpossibilities to explore.

UNITED KINGDOM | POLITICS

Bristol election first round completeThe Bristol mayoral election results have completed the firststage with independent candidate George Ferguson re-ceiving 31,321 votes and Labour candidate Marvin Reesreceiving 25,896 votes. Under the supplementary votingsystem the process now goes into a second stage where sec-ond preference votes are counted and used to decide thewinner of the election. Had any candidate reached 50% orgreater in the first stage they would have been declared win-ner. Overall turnout was 27.92%.

AUSTRIA | ENERGY

Libya and Yemen boost OMV profitsEnergy group OMV said underlying quarterly profit rose athird after Libya and Yemen helped boost production andrefining margins stayed strong, Austrian Independent re-ported on 9 November. OMV also said it would take timeto restore full output in Libya - now around 90% of levels be-fore the civil war that toppled Muammar Gaddafi, addingrefining margins would have to fall given overcapacity in themarket. Libya accounted for a tenth of OMV output beforethe war. It has 12 exploration and production licences there,with petroleum contracts running to 2032. OMV had al-ready reported that its refining margin rose 27% in the thirdquarter to $ 5.28 per barrel as crude oil prices eased andgasoline and middle distillate spreads rose. It had said afterthe second quarter that refining margins had spiked andwere expected to deteriorate as crude oil prices recovered. Inthe event, the margin recovery continued into the fourthquarter, it said, adding the outlook was uncertain.

UNITED KINGDOM | ENERGY

Centrica loses 43,000 business customersBritish Gas owner Centrica said it was on track to growprofits this year, despite warning that the weak economyhad contributed to the loss of some 7% of its small andmedium business customers so far this year. Centrica saidbusiness customers had fallen due to increased competi-tion and the weak economy which had seen some go outof businesses. Centrica said it expected to “deliver year onyear earnings growth in 2012 in line with market expec-tations, subject to the usual variables of weather and com-modity prices, in a continuing weak economicenvironment”. Analysts expect British Gas residential en-ergy supply to rise by about 6% over the year, as a likelyfall of as much as 15% in second-half profits will partlyoffset a 23% rise in the first half.

In the 1970s, Philippe Vande-moortele, travelling in Africa, sensedand saw the reality of mass famineand pledged to meet the challenge ofglobal food security. The family’sbusiness – Vandemoortele is a famousbrand of vegetable oils – providedhim with the key.

Philippe established a processingplant in Madagascar, but logisticsmade it unviable.

So he came back to the family busi-ness in Belgium and renewed hisquest for the right raw material andthe right process. The solution, he re-alized, lay in the humble soya bean,but he still had to find an effectiveway of processing it.

In 1977, Philippe began distribut-ing a soya-based health food. TheAlpro Company was incorporated in1980 and a new production unit wasestablished in Wevelgem in 1989.This was the most advanced of its

kind in the world at the time.The need to meet the challenge of

global food security is much greatertoday, as the world’s population soarsand emerging countries move relent-lessly toward an animal-protein-richdiet. Philippe Vandemoortele’s con-viction that the only sure solution is aglobal shift to plant protein is nowshared by many politicians, doctorsand nutritionists.

“It is our deep conviction thatmass famine is now the number onethreat on the global agenda,” saysKoen Bouckaert, Sustainability De-velopment Director of Alpro. “Peo-ple tend to go more for animal-basedproteins as their disposable incomegoes up. Of course, this poses twoproblems: one is the global issue offood security and the other is the in-dividual matter of personal health.”

“The global issue is the one thatsociety needs to tackle”, continuesBouckaert. “Livestock production, inaddition to being socially question-

able, is both inefficient and environ-mentally harmful. It’s a doublewhammy, negative on both the pro-duction and consumption side.”

To get a clear picture of the impli-cations of livestock production, con-sider this: to produce milk from cowsit takes three times the amount ofland, 2.5 times the amount of waterand contributes five times moregreenhouse gases (all of that grassthose cows eat has to get out some-where!) than to produce the equiva-lent amount of soya milk.

As for beef protein versus soya pro-tein, these numbers are staggering.For cows, it takes 45 times more land,20 times more water and producesten times more greenhouse emissionsthan soya does.

“The cow is an inefficient machinefor producing milk and protein,” con-cludes Bouckaert. “Seeing this andthe ‘big picture’ of food security,Alpro has created a business plan thatsimply bypasses the cow.”

Alpro: Rooted in Food Security BELGIUM|MANUFACTURING

The soya plant's journey to global supremacy, at least for the lactose intolerant. Could it also be the key to food security?

Brussels joins protests for a ‘different’ EuropeBELGIUM|EMPLOYMENT

The European capital witnessed todayone of the demonstrations across Europeagainstausterity and in support of em-ployment and solidarity.

As part of the large-scale mobilisationon the European Day of Action and Sol-idarity organised by the European Trade

Union Confederation (ETUC), Brusselshosted a demonstration of the three mostinfluential Belgian trade Unions- FGTB/ ABVV; the liberal CGSLB / ACLBBand the CSC / ACV.

In the course of one hour, the protes-tors occupied the area of Schumanroundabout just in front of the EuropeanCommission shouting ‘We want another

Europe!’A different Europe, according to the

ETUC General Secretary BernadetteSégol, will be achieved when the EUleaders realise that their policies are notgoing to be accepted by the people. In heropinion, the EU should stop policies thathave failed dramatically and that werebringing unemployment and poverty up.

By Nick Klenske

By Stanislava Gaydhazhieva

MIT.EDU

SPAIN|HOMEOWNERS

Government halts evictionsOn 15 November, Spain approved a two-year suspension ofevictions for some needy homeowners unable to pay theirmortgages. The decision comes less than a week after aSpanish woman facing eviction killed herself by jumpingfrom an apartment balcony. The government, which is stillpreparing a broader overhaul of the country's mortgage andproperty laws, said it hoped to shield those most in need bysuspending mortgage payments for mortgage holders withannual income of €14,400 ($18,400) or less after taxes, orthose with expired unemployment benefits. "We must avoidfamilies ending up in the street as a consequence of the cri-sis," Economy Minister Luis de Guindos told reporters."What we're trying to do here is make sure nobody ends upwithout their house."

SPAIN|REFORMS

Public administration reformsRegarding the reform of the public administration services,Spain’s Vice-President of the Government, Minister for thePresidency and Government Spokesperson Soraya Saenzde Santamaria highlighted the need to promote a "far-reaching" reform that avoids duplication, saves money andimproves the service; in short, one that provides "coherence"and better channels resources. She insisted that this reformis the most important structural reform currently being im-plemented by the government and announced that "an im-portant merger process" will take place at the end of theyear because "21st Century governments cannot functionwith 19th Century structures", she said.

CYPRUS|ECONOMY

Meeting financial obligationsOn 15 November, the Cyprus government governmentdownplayed speculation that the state would soon be unableto meet its financial obligations. “We have ways to ensurethat the state continues making payments,” said govern-ment spokesman Stefanos Stefanou as talks with interna-tional lenders dragged on. Commenting on the overallprogress of negotiations with the troika mission here on theisland, Stefanou said a great deal of ground has been cov-ered. But there are many “difficult issues pending,” he added.Once negotiations wrapped up, the President would briefpolitical parties and the social partners, Stefanou said.

ITALY|ECONOMY

Minister urges ‘Deep Changes’Italy is making good progress in its programme of economicreform but “deep changes” are still needed, CNBC quotedItaly’s Economy and Finance Minister Vittorio Grilli assaying. “We’ll have to go through deep changes — not only[in] my country but also many countries to really face anincrease in competition worldwide,” he said. “We have tokeep pushing and keep progressing in our restructuring ofthe Italian economy,” he added. He said he realises Italyneeds “to convince the markets now that we are makinggood process and we are achieving results.”

ROMANIA|BANKING

Garanti Bank ups capitalTurkish lender Turkiye Garanti Bankasi (TGB) has in-creased the share capital of its Romanian subsidiaryGaranti Bank by €20mn, taking the total equity in-vestment in the local unit to €245.7mn, Business Re-view reported on 12 November. TGB, which ownsGaranti Group, carried out the operation through cashsubscription.


EUROPEAN UNION

Greek Prime Minister Antonis Samarascalled a preliminary deal betweenHewlett-Packard and Chinese shippinggiant COSCO on Greece’s port of Pi-raeus a "vote of confidence" that willbring in new investments and turn thecountry's biggest port into a major re-gional distribution hub.

"It reaffirms the role our country canplay on the global business map," Sama-ras said after a meeting in Athens withCOSCO and HP officials on 14 No-vember.

The deal will allow for HP goodsbrought to Piraeus near Athens to betransferred by sea or rail to southern, cen-tral and eastern Europe, the Middle Eastand north Africa, a Merchant MarineMinistry statement said.

The agreement is expected to take ef-fect at the end of the year, the governmentsaid. Cosco Pacific, one of the world'sbiggest container terminal operators,

signed a deal with Greece in 2008 to runa pier at the state-owned Piraeus port.HP is the world's largest manufacturer bysales of personal computers.

In 2011 more than 20mn passengersand 1.7mn containers passed through Pi-raeus, according to the Piraeus Port Au-thority (OLP).

Athens welcomes preliminary COSCO-HP deal on Piraeus

GREECE|INVESTMENT

MEP: Publications of FYROM media are a provocationBULGARIA|DIPLOMACY

According to Evgeni Kirilov MEP,member of the Group of the ProgressiveAlliance of Socialists & Democrats in theEuropean Parliament (S&D), the publi-cations of FYROM media on the eve ofthe conference devoted to the 70 years ofthe assassination of poet Nikola Vapt-sarov were a provocation.

Kirilov organised an event at the Eu-ropean Parliament today in order to con-tribute to remembering the creative workand poetry of Vaptsarov, as well as to alsobring into the present problems whichwere described by the poet, but are alsolive today, for example the universal mes-sage of freedom, social justice and hu-manity. According to the MEP, the ideasexpressed in the work of Vaptsarov werealive today, especially with the current cri-sis on-going and topics such as social ex-clusion; rise of unemployment andgeneral mood among the people of

labour. The conference was attended,among other, by heirs of Vaptsarov, theHead of the Bulgarian S&D delegation,MEP Ivailo Kalfin, as well as by ManuelMunos Hidalgo, a Spanish writer whowrote a play on Vaptsarov and wonthe Nikola Vaptsarov InternationalAward for Literature for his completeworks in 2010, thus becoming the firstSpanish to receive it.

In Kirilov’s words, the publicationsof FYROM media, describing the veryconference as a ‘provocation’, were notworth commenting and were another ex-ample of how far ‘brazen nationalismcould possibly go’.

Kirilov said that Vaptsarov was verywell known around the world and he wasknown as aBulgarian poet. In addition,the MEP stressed that whatever thecause he died for was, one had to alwaysrespect those who believed in a certaincause and were ready to give their life forit. In relation to the mentioning of Spaska

Mitrova, a FYROM citizen of Bulgarianethnicity who had been convicted in acivil dispute with her ??ex-husband, in thematerials of FYROM media, Kirilov re-iterated that she has never worked forhim or been his assistant. In his words, heonly tried to defend her when she wasmaltreated in court and by the police inFYROM. He named the publications as‘some sort of insinuation proving thatthings are rather hasty on behalf of somejournalists in FYROM’.

In Kirilov’s opinion, the event was ahuge success because it brought a lot ofyoung people and attracted a good dealof attention within the S&D group andon behalf of other MEPs.

Last but not least, Evgeni Kirilov saidthat European standards on good neigh-bourly relationsrequired both sides to‘play’ in accordance with them and ex-pressed hope that FYROM’s adjustmentto them would be in interest of its rela-tions with both Bulgaria and Greece.

Bulgarian MEP gives up his postBULGARIA|POLITICS

The Bulgarian MEP Emil Stoy-anov said in a letter to the media thathe intended to leave his position.Stoyanov asked the leadership ofthe European Parliament to terminatehis mandate on 15 November. Themain reasons behind Stoyanov’s deci-sion are personal – his family and kidsare currently residing in Bulgaria. Thesecond reason which the MEP em-phasised was that the TV channelwhich he had previously initiated (TV

Europe) was launching a new mediaproject and he had been asked to takepart in it. The MEP wrote that heconsidered he would be ‘more useful’in Bulgaria, rather than in Brussels.Thanking the ruling Bulgarian GERBparty for elevating his candidature formember of the European Parliament,Stoyanov recapped that he was thefirst Bulgarian, member of the EP’sCommittee on Culture and Media.He also organised the first working

visit of the Committee to Bulgariaand the large exhibition of BulgarianThracian gold at the European Parlia-ment, as well as the recent conferenceon policies for Bulgarians abroad. Ac-cording to the Bulgarian NationalRadio (BNR), the person who willmost probably replace Stoyanov willbe the chairman of the Bulgarian par-liamentary committee on Europeanaffairs, Monica Panayotova, as she wasthe next on the list.

Containers belonging to Chinese shipping company COSCO are loaded for further transportation

to Europe at the COSCO Terminal in the port of Piraeus, Greece.

By Stanislava Gaydazhieva

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TURKEY | CONFLICT

FM pledges support to Palestine Minister of Foreign Affairs of Turkey Ahmet Davutoglumet with Minister of Foreign Affairs of Palestine, Riad AlMalki who paid a working visit to Turkey on 9 November2012. At the meeting, bilateral relations between Turkeyand Palestine were addressed and Ministers exchangedviews on the reconciliation process in Palestine, Palestine’sapplication to the United Nations as well as regional and in-ternational issues. On the other hand Foreign MinisterDavuto?lu, together with Mr. Mohamed Kamel Amr, Min-ister of Foreign Affairs of Egypt who paid a visit to Turkeyon the mentioned dates attended the dinner for the resi-dent Ambassadors in Turkey given by the Ambassador ofPalestine in Ankara on the occasion of the visit by Pales-tinian Foreign Minister Al Malki. Foreign Minister Davu-toglu stated in his speech that he suggested a new campaignwith a view to ensuring Palestine to upgrade its the statusto “non-member observer state” in the UN during the visitof Palestinian President Mr. Mahmoud Abbas to Turkeyand it was agreed to initiative the campaign in Ankara. “Alldecisions taken by Palestine will be supported by the peo-ple and the government of Turkey” stressed Foreign Min-ister Davuto?lu. He also added that even Palestine do notbecome a full member of the UN at this stage, Turkey calledfor upgrading the status of Palestine to “non-member ob-server state”. Moreover, Foreign Minister Davutoglu said,“Palestinians still don’t have a legitimate right of governance.A new process should be initiated” reminding that therehave been promises given by the UN, the leading globalpowers and the international organizations to Palestine andsome initiatives for solving the conflict have been intro-duced. Foreign Minister Mr. Davutoglu said that the hopeof sustainable peace, prosperity, security and developmentfor the region would rise if the Palestinian issue was resolvedand two-state solution was reached.

FYROM | DEVELOPMENT

EBRD: FYROM shouldcontinue with reformsFYROM's latest ranking on the 2012 World Banks DoingBusiness scores is quite impressive and several major in-vestors have shown keen interest in the country, reads a pressrelease. However, European Bank for Reconstruction andDevelopment suggests that business climate issues such asjudicial reform and corruption remain to be fully addressed.EBRD also called on FYROM to push reforms forwardin the context of the new high-level dialogue with the Eu-ropean Commission. This dialogue provides an opportu-nity t FYROM to advance on an EU-oriented reform pathdespite the fact that formal accession talks will not cannotproceed due to the name dispute. EBRD also asked theregulatory authorities in some infrastructure sectors needto be strengthened. The Bank noted that macroeconomicstability has been preserved. Growth in 2011 was close to3% and inflation and the government deficit were kept atlow levels. With a GDP growth rate of 2.9%, FYROM wasamong the strongest performing SEE economies in 2011.

ALBANIA | ECONOMY

Albania, Azerbaijan to boost ties in tradeAzerbaijani Minister of Economic Development ShahinMustafayev recently paid a working visit to Albania tomeet Albanian Prime Minister Sali Berisha and a num-ber of ministers and state officials. In course of talks, bothsides discussed bilateral ties between Albania and Azer-baijan in economic and trade sectors and opportunitiesof mutual investments, AEnews reported. The Albanianofficials expressed interest to cooperate with Azerbaijanin the energy sector.

Czech energy giant CEZ recently an-nounced plans to leave its operationsin Albania amid steep losses there andthe company has no intentions of in-vesting any more money into the unit,AENews reported.

The company had strained ties withAlbanian government under PrimeMinister Sali Berisha. The company'schief executive and chairman DanielBenes said that that the Albanian gov-ernment has not fulfilled its commit-ments on several agreements and isobstructing CEZ's plans. CEZ is cur-rently adding up all losses incurred dueto theAlbanian authorities' lack of co-operation and will likely seek financialcompensation, possibly via exercisingguarantees from the World Bank onthat investment. Noting the difficultpast experiences in the country, Benessaid that CEZ will not fund the unit'sloss-making operations with financesfrom the group level. CEZ has in-vested roughly $155 million in its Al-banian venture, but posted a first-half2012 loss on earnings (before interest,tax, depreciation and amortization) of$119 million.

The losses were due to ongoing reg-ulatory and commercial hurdles. Aftertalks with the Albanian premier, thecompany would decide year endwhether to sell the unsuccessful elec-tricity distribution unit CEZ Shpern-darje. It was reported that CEZ gained76% in distributing company CEZShperndarje in 2009 for €102 million.However late 2011, Albanian regula-tors almost doubled the prices the dis-tributing company pays to thestate-owned power producer. Besides,CEZ Shperndarje was not allowed to

raise electricity prices for end buyers.According to Tomas Pleskac, CEZ

board member and distribution andforeign countries division head, thelevel of electricity theft from the net-work and lack of creditworthiness ofcustomers are two main problems inAlbania. He mentioned that CEZ hasprepared documentation to activate a€60 million guarantee it received fromthe World Bank when it bought theAlbanian OSSH power distributor.The World Bank has blamed bothCEZ's inability to reduce technicaland commercial losses and the refusalof Albanian agencies and consumers

to pay their power bills and accept tar-iff increases.

“There have been a lot of efforts totry and get an agreement betweenCEZ and the government, and I thinkat this point a divorce is on the cardsin the next few months,” said Jane Ar-mitage, the World Bank's director forSoutheast Europe. Local analysts alsostated that CEZ will leave Albaniaand that it will have to write off thelocal assets. Meantime, the Czech util-ity said that both sides will start talksabout how the situation can be solved,including CEZ's potential departurefrom Albania.

CEZ to leave its operations in AlbaniaALBANIA|ENERGY

CEZ the Czech Energy company may be pulling out of Albania

Turkish Italian Forum takes place in Rome TURKEY|BILATERAL RELATIONS

Minister of Foreign Affairs of Turkey,Mr. Ahmet Davuto?lu paid a visit toRome to participate in the ninth meet-ing of the Turkish-Italian Forum on 12November 2012.

Within the scope of the Forum, For-eign Minister Davuto?lu together withMinister of Foreign Affairs of Italy, Mr.Giulio Terzi participated in the panelentitled “Turkey and EU: Turkish andItalian Perspectives”. Pointing out thatTurkey and Turkish people have alwaysbeen part of the Europe Foreign Min-ister Davuto?lu said “Turkey can be sep-arated from neither Europe nor Asia.We have always been part of the Europeand we will continue to be. We are Eu-ropean even if we are refused. The his-tory of Europe cannot be writtenwithout using Turkish archives. We areintertwined together.”

Foreign Minister Davuto?lu statedthat EU membership was Turkey’sstrategic objective and it shouldn’t besuspected. He underlined that today

Turkey did not require the EU’s finan-cial assistances which were providedmotivation for Turkey to achieve theEU membership goal 10 years ago.“Turkey is not a country which has noalternative” said Foreign MinisterDavuto?lu noting that Turkey could ful-fill the political criteria and establish aproductive economic structure evenwithout the EU. He also stressed thatTurkish people were not hopeful for theEU membership and they were of theopinion that EU did not give Turkey afair deal.

On the other hand Italian ForeignMinister Terzi declared that Italy alwaysconsidered Turkey as a part of the EUand for the stability and security of theEU Turkey should be a part of the EU.

Foreign Minister Davuto?lu, whomet with Italian Foreign Minister Terziin a separate meeting, was received bythe President of Italy Mr. GiorgioNapolitano, as well. Moreover, ForeignMinister Davuto?lu came together with

the Minister of Foreign Affairs of theHoly See, Archbishop Mr. DominiqueMamberti.

Turkish-Italian Forum which hasbeen held alternately both in Istanbuland Rome since 2004 with the partici-pation of the Foreign Ministers of thetwo countries brings together politi-cians, businessmen, press, representa-tives of civil society and opinion leaders.The Forum aims to ensure for the bothsides to understand each other better,strengthen the image of the other intheir countries, and further the under-standing of the cooperation in bilateralrelations as well as common issues.

The 9th Forum meeting whose aca-demic aspects are coordinated by Cen-ter for Strategic Research of the TurkishForeign Ministry focused the themes;“Turkey and Italy in the Mediterranean:Seeking Joint Partnerships in theNeighborhood” and “The Effects ofEurozone Crisis to Italy, Turkey andMediterranean Region”.

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BOSNIA-HERZEGOVINA|REFORMS

World Bank supports BosniaThe World Bank supported Bosnia-Hezergovina’s at-tempts to reform and also recognised weaknesses of the sys-tem of the Balkan country. The World Bank makes systemof loans and non-refundable funds to Bosnia-Hezergovinamore efficient, Fars news agency reported. The fund is of-fered by international financial institutions. Bosnia-Hezer-govina’s Prime Minister Nermin Niksic said several loans ofthe World Bank and other financiers have become victimsof bureaucracy and laws on loans are simply suffocating de-velopment. Niksic said the worst sufferers are the citizensand economy, which needs to be changed.

SERBIA|LOANS

New deal with IMF Serbian Trade Minister Rasim Ljajic told a conference thatit is very crucial for the country to forge a new arrangementwith the International Monetary Fund (IMF), in order toimprove the international financial credibility of the coun-try. According to him, an arrangement with IMF of im-portant for Serbia as the country will get expert support andalso get opportunities for soft loans in the future. On beingasked whether the Serbian government was ready to meetthe requirements set down by the IMF, Ljajic said that ithad nothing to do with conditions or ultimatums but ratherwith the interests of Serbia. He suggested that Serbiashould cut its deficit and expenditures. “The state has tosave money and show it is responsible if it hopes to affordthe full right to require others to do the same by being fi-nancially rational and frugal,” added Ljajic.

BOSNIA-HERZEGOVINA|COUNCIL

Bosnian Presidency CouncilThe Serbs' representatives at the Bosnia and HerzegovinaPresidency Council, Nebojsa Radmanovic on 11 Novem-ber assumed Chairman of the Presidency of Bosnia andHerzegovina with tenure of eight months, in accordancewith the rotation principle, Fars news agency reported.Under the Constitution, the presidency consists of threemembers, coming from three constituent peoples: one Bosn-ian and one Croat elected from the Federation of Bosniaand Herzegovina and one elected from Republika Srpska.Together they serve a four-year term, where the memberwith the most votes becomes the chairman unless he or shewas the incumbent chairman at the time of election.

SERBIA|EU AFFAIRS

Serbia eyes EU talks dateThe government of Serbia is trying to get a date for thestart of EU accession negotiations as soon as possible evenamid difficult circumstances, Deputy Prime Minister forEuropean Integration Suzana Grubjesic recently told Betanews agency. Grubjesic said, “We do not want to speculatebecause we are leading a responsible policy. On the con-trary, we are trying to get a date for the beginning of theEU accession talks as soon as possible in circumstances thatare not easy at all.” He refused to speculate whether Ser-bia’s EU accession will happen in December this year.

MONTENEGRO|TOURISM

DEG offers €13mn loanDEG, a German development finance institution, an-nounced a long term loan worth €13mn to extend and en-hance a hotel at the Adriatic coast. The four-star hotel,which was opened under the name Rivijera in 2004, cur-rently offers a total of 91 rooms, which will be expanded byup to 180 rooms as well as a congress and spa area.


ENLARGEMENT

Montenegro’s President Filip Vujanovicrecently called on Milo Djukanovic toform a new government of the smallestformer Yugoslav republic as it looks tojoin the European Union. He took thedecision after consultations with politicalparties, Montenegro Timesreported. Djukanovic, 50, who has previ-ously served as premier and president ofthe Adriatic nation, will replace Igor Luk-

sic to form a Cabinet after his Demo-cratic Party of Socialists won last month’sparliamentary elections. The Democratic Party of Socialists(DPS) and its allies secured a governingmajority in 14 October parliamentaryelections.

If endorsed by parliament, it will beDjukanovic's sixth time in office duringthe past 21 years. Djukanovic's candidacy

was proposed by his Democratic Party ofSocialists (DPS).

Opponents blame Djukanovic forwidespread corruption, and accuse him ofrunning Montenegro with his family andcronies as if it were a private business. Itshould be noted that Montenegro cur-rently suffers from an economic crisisafter years of growth buoyed by tourismand a real estate boom.

Djukanovic to return as PMMONTENEGRO|POLITICS

Deputy PM says government will fight corruptionSERBIA|CORRUPTION

On his facebook profile page, Ser-bian First Deputy Prime MinisterAleksandar Vucic says the rulingcoalition and the government willreach an agreement on fight againstthose who ruined the country. He isconfident that an agreement on themost efficient way of tickling cor-ruption would be reached soon, Betanews agency reported.

In a recent interview to Novi Sad-based daily Dnevnik, Vucic said, “Amessage in the first 100 days of thegovernment’s work to everybody whocreated their empires by using the statemoney and taking advantage of thecountry and people’s misfortune is thatit does not pay to steal, that the justicewill prevail sooner or later”.

He added that the government

plans of changing the Constitutionjust like Croatia and declaring thetheft of the state money a crime thatwould have no statute of limitations,just like war crimes.

In addition, the government willdiscuss a way to implement the law onthe origin of assets. The government istrying to make everything in a accor-dance with European practices.

Ostojic: Tourism accounts for 15.5% of Croatia’s GDPCROATIA|TOURISM

Croatia’s Minister of Tourism Veljko Os-tojic recently announced that tourism isonly major contributor to GDP, account-ing for 15.5%, and the country is using itstax and regulatory regime to incentivesinvestment in the tourism infrastructure,Javno reported.

The ministry predicts the average levelof prices to come down next year due toreduction in VAT which will entail moreemployees and investment in the sector.

This year the country witnessed recordyear with overall overnight stays up 6.3%and arrivals up 5% on 2011. In order toboost tourist arrivals, the tourism ministryplans to reduce VAT to 10% on accom-modation and food in 2013 and calls foran addition of 60,000 hotels beds by2020.The UK is 10th on the list of source

destinations with just over 300,000 ar-rivals expected this year, expected to re-turn to 1980s levels of half a millionwithin five years. This year Croatia ex-pects UK tourists to increase by 22.5%and room-nights increase by 22.3%.However, Ostojic expressed doubtwhether UK will ever become Croatia’smain inbound market as it is so accessiblefor much of central Europe by car. Noting14% of the country’s accommodation ishotels, the minister expects a rise by 205by 2020. In this regard, he mentioned thatthis would not be large all-inclusive com-plexes, but targeting up market visitors in-terested in gastronomy, wine and activitieslike sailing.

Stressing that Croatia was not inter-ested in the “ghetto tourism” associated

with large all-inclusive resorts, Ostojicsaid that the country is not positioning asa cheap destination but value for money.He believes that tourism will work if thelifestyles of people are improved. “Wewould like to see tourism in the cities. Wethink tourism works if we are able to im-prove the lifestyles of our people. Peoplesee them enjoying themselves and thatwill be good for the tourists,” added Os-tojic. He added that Croatia has 6,000kilometres long coastline and there aremerely four and a half million peoplewhich means more space and more lux-ury. The minister is keen to see British in-vestors to invest in Croatian tourism. Hementioned some green and brown fieldprojects which will be announced soonfor tender looking for investment.

Montenegro’s President Filip Vujanovic (pictured) recently called on Milo Djukanovic to form a new government.

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27NEW EUROPE18 - 24 November , 2012PARTNERS

SWITZERLAND | LUXURY

Currency effect liftsRichemont profitsThe Swiss luxury goods group Richemont, which ownsbrands such as Cartier and Jaeger-LeCoultre, reportedthat first-quarter net profit jumped by 52% to € 1.087billion, in line with expectations, The Local reported on9 November. The group's luxury brands "benefited fromfavourable exchange rates effects, successful productlaunches as well as strong pricing power," Richemont saidin a statement released on 9 November. Richemont alsoannounced the nomination of Bernard Fornas andRichard Lepeu as joint chief executive officers from April1st, 2013 in place of Johann Rupert, the group's founder,who is to remain president. The Geneva-based companysaid its core operating profit gained 28% to € 1.38 billionin the three-month period that ended on 30 September,the first quarter of its fiscal year, on sales that rose 21% to€ 5.11 billion. The group's profit margin improved by 1.5percentage points to 27%. Some of the group's otherwell-known brands are Van Cleef & Arpels, Piaget,Vacheron Constantin, and Montblanc.

SWITZERLAND | BANKING

Credit Suisse to abandoninvestment bankSwiss banking giant Credit Suisse will stick with its invest-ment bank and does not plan a major overhaul similar tothe one recently announced by UBS, the bank's chairmansaid in an interview published previous Saturday, The Localreported on 12 November. "It is true that there are somepeople who expect us to completely pull out of investmentbanking," Credit Suisse chairman Urs Rohner said. How-ever, he said, "these people do not realize that the capitalmarket business is critical for the functioning of efficientglobal markets and important for a globally oriented econ-omy like Switzerland's." Switzerland's second largest bankwas therefore planning to remain "at the forefront" of theinvestment banking sector, he said.

ICELAND | BANKING

Privatisation of Iceland Banksgets closer Parliamentary look The Icelandic parliament, Alþingi, agreed previous Thurs-day with 24 votes a resolution to appoint a three-person in-vestigative commission to probe the privatization and saleof shares in Fjarfestingabanki atvinnulífsins, LandsbankiIslands and Bunaoarbanki Islands 1998-2003,Iceland Re-view reported on 9 November. According to the resolution,the investigative commission is to submit a report to theSpeaker of Parliament no later than September 1, 2013,Morgunblaoio reported. MP for the Social DemocratsSkuli Helgason was the first proposer of the resolution butit was also backed by MPs of the Left-Greens and TheMovement. MPs of the Independence Party and Progres-sive Party who were present, abstained in the voting.

NORWAY | FISCAL RELATIONS

Panama agreement signedwith Norway and regionThe Nordic countries have signed yet another informationexchange agreement with an off-shore financial centre, thistime with Panama, Norway Post reported on 15 Novem-ber. The latest success for the Nordic campaign to curb in-ternational tax evasion is an agreement reached last weekbetween Panama on the one hand and Sweden, Denmark,Norway, Finland, Iceland, Greenland and the Faroe Islandson the other. Since 2007, a unique Nordic project has re-sulted in a whole series of agreements with so-called off-shore financial centres.

Switzerland's national airline said on 12November it would cut flights to Athensand Madrid, both hard-hit by the euro-zone crisis, and would expand its flightsto more lucrative destinations, The Localreported.

"We have to change and we will bringin new destinations ... to increase fre-quency into destinations where we thinkit makes more sense for our customers,"said Rainer Hildebrand, the chief oper-ating officer at the airline Swiss.

At a briefing with reporters in Geneva,

Hildebrand described the existing serv-ices to Greece and Spain as "unsustain-able" given the economic situation inboth countries.

From next year, Swiss therefore plansto cut services from Switzerland to theGreek capital by half and will offer justone flight a day, while it will reduce thenumber of flights to and from Madrideach week from 14 to around 12, a com-pany spokeswoman said.

In an effort to offer a wider destinationportfolio, Swiss will meanwhile boost

services to Palma, on the Spanish islandof Majorca and to Malaga, Spain, andwill introduce routes to the Italian islandsof Sardinia and Sicily.

Swiss also announced the creation of adedicated crew-base in Geneva to focuson customers in the Romandy region ofSwitzerland.

The move is part of reforms launchedin 2006 that helped boost passengernumbers from the city three-fold overfive years to 1.9 million last year, the com-pany said.

Swiss to cut Madrid and Athens flightsSWITZERLAND|AVIATION

An Airbus A320 plane of Swiss International Air Lines is landing on November 12, 2012 in Geneva. The company owned by German airline

Lufthansa said it would cut flights to Athens and Madrid, both hard-hit by the eurozone crisis, and would expand its flights to more lucrative

destinations.

SAS to restructure amid tough demandsNORWAY|AVIATION

Norway made tough demands on SASbefore agreeing to support a financial re-structuring of the Nordic airline, accord-ing to Norwegian media, Norway Postreported on 13 November.

During the negotiations, Industry

Minister Trond Giske is said to have de-manded that SAS sell off daughterWideroe. Both Dagens Næringsliv andVG Nett quoted sources who said thatNorway made the strongest demands onSAS, before agreeing to support the fi-

nancial rescue operation. They said bothDenmark and Sweden showed greaterwillingness to help the Nordic airline.

Giske did not want to comment on thenegotiations, but admited that he madetough demands.

Indian licences granted to Telenor NORWAY|TELECOMS

The Telenor Group has announced thatthe company has been successful in se-curing spectrum license to provide mo-bile telephony services in six telecomcircles in India, Norway post reported on15 November.

Telenor’s total bid in the spectrum auc-tion was Rs 40.18 billion (4.2 billionNorwegian crowns) of which 33% is tobe paid up front, according to a press re-lease.

It also said that the Indian Departmentof Telecommunications has informed Te-lenor that the company secured 5 MHzof spectrum in Andhra Pradesh, UttarPradesh East, Uttar Pradesh West, Bihar,Gujarat and Maharashtra. With a total

population of about 600 million peopleand an actual mobile phone customerpenetration of just 40 percent, these statesrepresent a strong growth opportunity forTelenor Group. All Uninor assets in thesecircles, including customers, employees,partners and infrastructure will be seam-lessly transferred to the new company andservices will continue uninterrupted.

“I am very pleased that Telenor Grouphas acquired the necessary spectrum toprovide mobile services in India, as a con-tinued presence in the country is impor-tant for our growth strategy. SinceTelenor started operations in India wehave proven our industrial capabilities byestablishing a cost-efficient and highly

competitive mobile operation with a sig-nificant customer base. The fresh licensesprovide clarity for customers, operatorsand partners after a long period of uncer-tainty. We are looking forward to a morepredictable and stable regulatory environ-ment,” said Telenor Group President andCEO, Jon Fredrik Baksaas.

Telenor will continue the process oftransferring its business assets from Uni-nor into the new company in a way thatis seamless for its remaining 34 millioncustomers (TRAI figures). Telenor wasnot awarded spectrum in Mumbai,Kolkata and West Bengal. In these circlesoperations will cease in accordance withIndian law and regulations.

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AZERBAIJAN|DIPLOMACY

US values AzerbaijanAzerbaijan will continue to be an extremely importantcountry to the United States, Ambassador of the US toAzerbaijan Richard Morningstar said while commentingresults of the presidential elections in United States. Hestressed that relations between the two countries will notundergo major changes in the next four years, news agen-cies reported. “I think that certainly with President BarackObama continuing for the next four years, we will not ex-pect any major changes in the foreign policy. Azerbaijanwill continue to be an extremely important country to theUnited States and we will continue to work with Azerbai-jan on all of issues that we have been working on,” he said.

AZERBAIJAN|ICT

Fund seen in JanuaryAzerbaijan’s Communications & IT Minister Ali Abbasovrecently announced that The ICT Development Fund willbegin operation in the country from January next year, newsagencies reported. The country’s state budget will provide fi-nance the fund. “At the expense of the Fund the small- andmedium-size enterprises of the country will be given softloans and grants for development of its business, productionand bringing of competitive products on the internationalmarket,” Abbasov said. He suggested that the state shouldprovide fiscal and monetary support to the business of thecountry in order to create favourable conditions for develop-ment of the private activities of this sector. For next year, com-munication costs of the state budget offered at 37.337mnmanat. As for now, there is no separate line item for the ICTDevelopment Fund in the draft budget for 2013.

GEORGIA|BUDGET

Opposition slams budgetThe 2013 state budget draft defines specific changes and adecrease in funding for various institutions. It favours socialand agricultural field with emphasis on keeping promisesmade during the election campaign, Civil Georgia reported.The draft also states a decline in the funding of the Presi-dential Administration of Georgia from 14.1mn lari to9.2mn lari. It also states that the president’s reserve fundwill decrease from 50mn lari to 10mn lari. Funds will alsodecrease for Georgian regions, the National Security Coun-cil and for the Central Election Commission (CEC). Ac-cording to the draft, 1.8mn lari will be allocated for theNational Security Council instead of 24.7mn lari. Com-pared to allocation of 23mn lari for the council’s politicalevents as contained in 2012 budget, the draft made nomention in this regard. Funding of the CEC will be de-creased from 48.3mn lari to 42mn lari. However the fund-ing of parliament will increase as well as all those expenseswhich are targeted for social issues.

GEORGIA|DEFENCE

Saakashvili backs ex-ministerBacho Akhalaia, former defence minister and currentarmy chief of staff Giorgi Kalandadze, was detained inconnection to an ongoing investigation into the allegedcase of exceeding official powers. In his facebook page,Georgian President Saakashvili said the arrest was un-acceptable act, an encroachment on state institutions,the country’s armed forces and the free media, theMessenger reported. Noting the events in the country,the president appealed for respect for the rule of lawand the state’s interests. He explained that the arrest ofofficials in the armed forces is not compatible with re-spect for officers and the armed forces. He stressed thatall are equal before law noting that there are frameswithin the law that should be defended.


EASTERN PARTNERSHIP

For the opening of the new SOCAR of-fice in Brussels, Hotel Konrad hosted aninfo session titled "The European Unionand Azerbaijan: strategic partnership -Southern Gas Corridor and other areas”.

The event was attended by Vice-Pres-ident, European Commissioner forTransport Siim Kallas, members of theEuropean Parliament, Belgian Parlia-ment and Milli Majlis (Azerbaijani Par-liament), representatives of the Belgiangovernments, diplomats, experts and rep-resentatives of the oil companies, the fi-nancial and banking sector, the media andpublic organisations. Closing the eventEU Energy Commissioner GüntherOettinger noted that Azerbaijan achievedimportant position in world economyand spoke about SOCAR’s role in thisdevelopment.

SOCAR President Rovnag Abdullai-jev said the opening of the SOCAR of-fice in Brussels “is a special event whichdoes not just mark opening of our com-pany’s office in the capital of the Euro-pean Union, but represents a newmilestone in the field of development ofstrategic partnership between Azerbaijanand EU. Relationships between Azerbai-jan and the countries of the EuropeanUnion are built on a strong foundation ofmutually beneficial cooperation in manyfields, including energy issues”.

Abdullaijev said Azerbaijan’s SOCARand the EU share “same concerns withregards to how we could ensure energysecurity of our countries and equally re-gard this issue in the context of urgency tomake joint decisions and assume joint re-sponsibilities to confront existing chal-lenges to reliable and uninterruptedmechanisms of supply energy to end con-sumers. I wish to express confidence thatactivity of our Representative Office inBrussels will contribute to establishing aquality new level of relationships betweenAzerbaijan and the European Union inthe field of energy security on the basis ofthe strategy which we call the SouthernGas Corridor”.

Abdullaijev said he is confident thatsuccessful execution of this strategy willform a strong framework for expandingthe potential for co-operation betweenAzerbaijan and EU, will contribute to

further diversification of sources androutes for transporting gas to Europe,thus strengthening the energy security ofEurope. “Today, as we witness that diver-sification of energy supply routes andprovision of energy security in Europe areclosely interrelated, it is important tomove forward and achieve new results inthe implementation of agreements weconcluded,” he said.

Abdullaijev said Azerbaijan activelysupports the idea of implementation ofthe Southern Gas Corridor strategy.“We clearly recognise our responsibilityfor opening this energy corridor, whichwill be dedicated to serve many gener-ations of Europeans. Negotiations be-tween President of Azerbaijan Mr.[Ilham] Aliyev and President of the Eu-ropean Commission Mr. [ JoseManuel ] Barroso, as well as adoption ofJoint Declaration in January of 2011 inBaku became a fundamental milestonefor practical start up of execution of thisstrategy,” he said.

“At the initial stage it is planned totransport gas from the Stage II develop-ment of Azerbaijani gas-condensate fieldShah Deniz. Together with our partnerswe are currently finalizing all the neces-sary preparations in order to commencefull scale development program of theproject with expected overall cost of$25bn. Additional annual productionvolumes from the second stage couldreach minimum 16 bcma. However, we

do not plan to stop at this. Our long-termstrategy envisages development of otherfields, discovery of which has become asignificant event in the area of expansionof oil-gas potential of the Republic ofAzerbaijan. Among these are new giantgas fields Absheron, Umid, Babek, gasfrom deep layers of Azeri-Chirag-Gunashli oil field,” he said.

“The overall export potential of Azer-baijan will reach 40-50bn cubic metresper annum of gas in 2025 and we expectthat most of this gas will be delivered tothe European market. It is obvious thattransportation of these volumes of gasrequires relevant gas transportation in-frastructure, which would allow safe de-livery of natural gas from Azerbaijan toEurope and would be scalable in orderto rapidly increase its transit capacitywhen required. Such system will beTANAP – Trans-Anatolian gas pipeline- and the relevant Agreement which wasexecuted on 26 June 2012 by Presidentof Republic of Azerbaijan and Prime-Minister of Republic of Turkey,” Abdul-laijev said. “Construction of the gaspipeline is integrated into the consoli-dated system for the development of en-ergy and export potential of the country.Transit capacity of the new Azerbaijan-Turkey gas pipeline at the first stage willbe 16bn cubic metres per annum withopportunity for further expansion asnew gas sources from Azerbaijan be-come commercially available,” he said.

SOCAR opens Brussels officeto boost partnership with EU

AZERBAIJAN|ENERGY

SOCAR President Rovnag Abdullaijev with European Commissioner for Transport Siim Kallas in

Brussels.

Aliyev: ICT sector to grow in the next 20 yearsAZERBAIJAN|ICT

The 18th Azerbaijan international ex-hibition of telecommunication and in-formation technologies BakuTel 2012recently opened at the Baku exhibitioncentre. The expo is an important event intelecommunications sector including in-formation technologies in the Caspianand Caucasus regions, news agencies re-ported. The event was backed by UN and

International Telecommunication Union,as well as the quality sign of the WorldAssociation of exhibition industry. Azer-baijan’s President Ilham Aliyev said hewas pleased that the country hosts theBakuTel exhibition every year.

Stressing the huge potential of infor-mation and communication technologies(ICT) sector, Aliyev said the government

has a state policy to support this sector.At the same time, the private sector hasalso been very active in this field. “Wehave become the leading country in theregion for the development of informa-tion and communication technologies weintend to keep this position and becomeone of the global players in the ICT mar-ket,” Aliyev said.

29NEW EUROPE18 - 24 November , 2012EASTERN PARTNERSHIP

BELARUS|REAL ESTATE

Foreigners allowed inOn 15 November, Belarusian Economics Minister NikolaiSnopkov said foreign investors in Belarus will be allowed tobuy land for private ownership. Foreigners are currently notallowed to own land sites in the former-Soviet republic. “Assoon as 2013, we propose resolving the issue...of grantingland sites to investors for private ownership,” Snopkov tolda meeting of the Council on foreign investment.

BELARUS|NUCLEAR

Radiation impact studiesBelarus intends to continue taking an active part in proj-ects to examine the environmental impact of radiation,Denis Zdorov, a counsellor of the Permanent Representa-tion of Belarus in United Nations, said in his speech at thesession of the fourth committee of the General Assemblyat the UN headquarters in New York. Zdorov remarkedthat the United Nations Scientific Committee on Effectsof Atomic Radiation (UNSCEAR) had increased its au-thority as a competent and professional source of infor-mation about radiation impact on human health andenvironment. The Belarusian diplomat welcomed the de-cision of the 66th session of the UN General Assembly toaccept Belarus as a full-fledged member of the Commit-tee. Speaking about the UNSCEAR project to study long-term radiation effects of the disaster at the Fukushimanuclear power plant in Japan, the representative of the Be-larusian delegation pointed out the involvement of expertsfrom Belarus in the project and relevant opportunities formutually beneficial exchange of experience in the area ofthe restoration of affected territories.

BELARUS|INVESTMENT

Belarus eyes Indian cashBelarus’ Prime Minister Mikhail Myasnikovich has invitedIndian industry to invest in his country. Addressing a jointbusiness meeting on 14 November in India, he said therewere several sectors, including pharmaceuticals, heavy engi-neering goods, information technology and truck and busmanufacture, where India and Belarus could increase en-gagement. Pointing out that trade between India and Be-larus was below potential, Myasnikovich said a huge potentialexisted to expand trade and investment. The meeting was or-ganised by apex chambers of commerce and industry.

UKRAINE|TRANSPORT

Ukraine, Kenya boost tiesUkrainian Ambassador to Kenya and TanzaniaVolodymyr Butiaha and Deputy Transport Minister ofKenya Ali Hassan Joho met on 15 November to discussbilateral co-operation in the sphere of transport. Ukraineand Kenya discussed the possible participation of Ukrain-ian companies in the implementation of infrastructureprojects in the capital of Kenya, as well as projects relatedto large transport corridors in southern Africa, includingthe construction of a new Mombasa-Nairobi-Kampalarailway line, and a number of international constructionprojects for a new oil pipeline from South Sudan toLamu, Ukraine's Embassy in Kenya reported.TheKenyan Deputy Transport Minister said the country isinterested in purchasing Ukrainian railway cars of varioustypes, port cranes, heavy automotive vehicles, big buses,and other products at competitive prices. He also saidthat Kenya could buy Ukrainian bulk cargo barges andcontainer carriers. He also said he would like to visitUkraine and hold talks with managers of PJSC KriukovCar Building Works, state-run enterprise Chernomorni-iproekt research sea transport institute (Odesa), InkorGroup, and PJSC AvtoKrAZ.

The German doctor of jailed Ukrainianopposition leader Yulia Tymoshenko,Lutz Harms, said the former primeminister has agreed to end her hungerstrike. Two weeks ago Tymoshenkostopped eating in protest against allegedfraud in parliamentary elections won byUkraine's ruling party. "From tomorrow(16 November), she will stop her hungerstrike," Interfax quoted Harms as say-ing. "She is very weak," said Harms' col-league Annette Reischauer.

Earlier on 15 November, Ukraine'sDeputy Health Minister Raisa Moi-seyenko said Tymoshenko had agreed toend her hunger strike after meeting theGerman doctors. "It has been agreedthat Yulia Volodymyrivna [Ty-moshenko] will take food. Food has al-ready been delivered to the ward," shetold reporters.

Moiseyenko also said Tymoshenkohad agreed to undergo a laboratory ex-amination. "Laboratory tests have cur-rently been almost finished… Hercondition corresponds to 17 days ofhunger strike," she said.

She said that German and Ukrainiandoctors were currently discussing issuesrelated to the patient's recovery fromthe regime of the hunger strike, andthen they plan to discuss rehabilitationactivities.

"We hope that the regime of rehabil-itation, a planned and gradually recov-ery will be resumed," Moiseyenko said.

In turn, the head doctor of Ukrzal-

iznytsia's Central Clinical Hospital No.5, Mykhailo Afanasyev, said the timeneeded to remove the patient from thestarvation regime was almost equal tothe period of the hunger strike.

Tymoshenko began her hunger strikeon 29 October. Afanasyev said Ty-moshenko was currently in a conditionclose to that when she was delivered tohospital on 9 May after a 22-day hungerstrike.

Doctors also declined to say whetherTymoshenko's condition will help herattend the hearing of the UESU case on23 November.

Meanwhile, Harms urged Ukraine toimprove hospital conditions for Ty-

moshenko, including ending a videosurveillance of the opposition leader."An important condition for treatmentis confidence between the doctor and hispatient," he said.

Tymoshenko has been in hospitalfor a bad back she developed shortlyafter being sentenced in October to aseven-year jail term for abuse ofpower while prime minister. Ty-moshenko says her conviction is po-litically motivated.

Tymoshenko, a bitter rival of Presi-dent Viktor Yanukovych, began herhunger strike 17 days ago to protest al-leged vote rigging during Ukraine's 28October parliamentary elections.

Tymoshenko to end hunger strike, says doctor

UKRAINE|HUMAN RIGHTS

Ukraine's former prime minister and leader of the opposition Yulia Tymoshenko posing in her resi-

dence in Kiev.

Belarusian political party member faces treason chargesBELARUS|HUMAN RIGHTS

A member of a Belarusian political partystill in its formative stages has been ar-rested on suspicion of high treason, aparty official said on 13 November, newsagencies reported. Andrei Gaidukov, 22, an activist with theBelarusian Christian Democratic Party,was detained in Vitebsk and taken to aKGB pre-trial detention centre in Minsk,

said party coordinator Tatyana Sever-inets.

Officials also detained BCDP mem-ber Ilya Bogdanov, who was released afterpledging not to leave the city.

Severinets said neither man played aprominent role in the party's formation.“I have no idea why they have beencharged under such a serious statute [of

the criminal code],” she said.The high treason charge provides for

up to 15 years in prison.Belarusian law enforcement agencies

have not yet commented on the case.Belarus is currently the target of EU

sanctions over alleged human rightsabuses and a failure to respect democraticprinciples.

Premier outlines investment opportunities at forumMOLDOVA|INVESTMENTS

On 9 November, Moldova’s PrimeMinister Vlad Filat said his govern-ment wants to attract investments andcreate a favourable investment climate."I hope that during the talks, you willidentify new ways of co-operationhelping you launch new business inour country. It is not sufficient to carryout reforms, but to be backed by a sig-nificant economic development", Filatsaid at the inauguration of an invest-ment forum organised by theMoldovan government, American

Chamber of Commerce fromMoldova and Romania, Moldovan In-vestment and Export Promotion Or-ganization (MIEPO), with thesupport of the US Embassy inChisinau.

Filat referred to the economic op-portunities existing in Moldova.

"Moldova has free trade with theCIS [Commonwealth of IndependentStates], and by late 2013, we are goingto sign the agreement on creation ofthe free trade area with the EU states.

It means an enormous market of con-sumers, whereas for the economicagents - successful affairs", Filatadded.

Filat pointed to the experience ofthe Turkish business people who man-aged to be organised in associationshelping them much in their activity.He launched an appeal to theMoldovan and foreign business peo-ple to invest in Moldova, to launchnew business and to contribute toMoldova's development.

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TAJIKISTAN | TELECOMS

Authorities to set up centre to monitor IP networksThe government of Tajikistan plans to establish a specialcentre at open joint-stock company (OJSC) Tajik Telecom(state-run Internet-provider and fixed-line telecommuni-cations network), to monitor IP network, Asia-Plus learntfrom a draft regulation of the government. The communi-cations service agency submitted the draft regulation andthe covering letter to relevant ministries and organisations.The covering letter states that the main objective of centreis in ensuring implementation of requirements of a numberof laws, information security, prevention in cases of violationof rights of legal and physical entities, and prevention incases of providing low-quality services. The agency claimsthat requirements of laws on information, protection of in-formation, copyright and allied rights, and innovations aswell as the information security concept and the pro-gramme of ensuring information security are not observed.Beg Zuhurov, Chairman of the Communications Serviceunder the government of Tajikistan, has dismissed the com-munications service agency’s initiative to establish such acentre, as baseless. An official source at the Ministry of Eco-nomic Development and Trade (MoEDT), affirmed thattheir ministry had received those documents. Meantime,experts said that establishment of such a centre is contraryto the country’s legislation. Asomuddin Atoyev, Head ofthe Association of Internet-Providers of Tajikistan said thatthe establishment of the centre is contrary to the country’slaw on public-private partnership.

KYRGYZSTAN | MINING

Centerra Gold Q3 production declinesCanadian-miner Centerra Gold had reported a quarterlyloss in gold production, after the Canadian gold miner re-ported a $46.8 million quarterly loss due to higher costsand severely lower production at its Kumtor mine in Kyr-gyzstan, Irinnews.org reported. The Toronto-based minersaid the third quarter loss included $19.3 million of unusualmining costs, and other operating expenses of $5.2 millionfor the care and maintenance of Kumtor. For the same pe-riod in 2011, the company recorded net earnings of $83.7million or 35c a share based on revenues of $278.4 million,reflecting significantly higher gold production and sales atthat time. Meanwhile, Centerra had increased its provenand probable reserves in the openpit Kumtor mine by 58%to 9.7 million ounces, extending Kumtor's mine life by fiveyears to 2026. The company expected Kumtor to produce600 000 oz in 2013 and 660 000 oz in 2014.

TAJIKISTAN | DEVELOPMENT

IMF for a new support programmeAhmed Masood, Director of the Middle East and CentralAsia Department, International Monetary Fund (IMF) re-cently had talks with Tajik President Emomali Rahmon inDushnabe. Masood was heading an IMF mission inDushanbe. After the talks, Masood said that the govern-ment of Tajikistan has applied to IMF for a new supportprogramme for Tajikistan, Asia-Plus reported. The IMFenvoy expressed hope that an agreement on the next three-year programme would be reached within the next fewmonths. He made it clear that the Fund plans for contin-ued support to Tajikistan through providing both technicalassistance and financial resources. Both sides discussed is-sues related to the financial and economic situation in theregion and in the country itself. They also discussed ways toensure more sustained economic growth of Tajikistan sothat it can foster new employment opportunities. IMFenvoy noted that new jobs will play a vital role in reducingthe country’s dependence on migrant remittances.


EURASIA

EBRD President: Kyrgyzstan is priority countryKYRGYSTAN|DEVELOPMENT

A European Bank for Reconstructionand Development (EBRD) delegationled by President Sir Suma Chakrabartirecently paid a visit to Bishkek.

This is his first official trip to the coun-try, Irinnews.org reported. He met withKyrgyz President Almazbek Atambayev,First Vice Prime Minister and EBRDGovernor Djoomart Otorbaev, Ministerof Finance Olga Lavrova and BishkekMayor Isa Omurkulov, as well as repre-sentatives of the diplomatic and donorcommunity and international financialinstitutions, to discuss the economic sit-uation and the strategic role of theEBRD in the country.

During talks with Kyrgyz PresidentAtambayev, Chakrabarti said that Kyr-gyzstan is a priority country for EBRD.“We are welcoming the on-going work

on the freedom of the press and massmedia, anti-corruption and creating con-ditions for those who want to workinKyrgyzstan.

We need to continue developing ourcooperation, especially as the Kyrgyz Re-public is a priority country for EBRD,”Chakrabarti said. In turn, Atambayevsaid that Kyrgyzstan highly appreciatesits partnership with EBRD and is grate-ful for the selection of projects in Kyr-gyzstan.

He stressed that the EBRD is imple-menting projects in the country to im-prove the water supply of cities, as well asdevelopment of public transport. Hespoke on the important role of theEBRD is in the development of smalland medium businessesKyrgyzstan. Thesides discussed issues of partnership be-

tween the Kyrgyz Republic and EBRD.During Chakrabarti’s stay in Bishkek, theBank will inaugurate the new premises ofits Bishkek-based Resident Office.

The EBRD delegates also met keylocal banks and financial institutions foran overview of the sector and its regula-tory background. In addition, the Agendaincludes visits to some of the companiesin which the EBRD has invested or isplanning to invest. Some priorities of theBank in Kyrgyzstan are to help the gov-ernment promote reforms to improve theinvestment climate, strengthening themunicipal and infrastructure services forsmaller cities, supporting the develop-ment of private enterprises and local fi-nancial institutions and strengthening thefinancial sector via the Bank's local cur-rency lending initiative.

$20 mln World Bank grant for reformTAJIKISTAN|GROWTH STIMULUS

According to a press release issued bythe World Bank Country Office inDushanbe, the World Bank’s Board ofExecutive Directors approved the sixthProgrammatic Development PolicyGrant (PDPG6) to the government ofTajikistan. The grant worth $20 million,is part of a series of grants providedsince 2009, which support the Govern-ment of Tajikistan’s efforts to lessen theimpacts of the global economic crisis,promote sustained growth and reducepoverty, Asia-Plus reported. Under thePDPG grant, policy areas which will besupported are outlined as maintainingbudget allocations for health, education,and social protection services, improv-ing the environment for private sectordevelopment and strengthening gov-ernment effectiveness and efficiency ofpublic resources use. Implementation of

per capita financing reforms in the ed-ucation and health sectors and im-provement of management capacity andeffectiveness of such key state agenciesas the Barqi Tojik and Tajiktransgas areamong the reforms supported under thePDPG. Activities under the series ofPDPG series are central to the Tajik-istan and the World Bank CountryPartnership Strategy (CPS) for 2010-2013. As a result, the Board of ExecutiveDirectors also reviewed the ProgressReport of the Strategy. The Strategywhich was made amid 2008-2009global economic crisis, pays emphasis onreducing the negative impact of theglobal crisis by maintaining social ex-penditures and providing emergencyfunding to bolster food security and in-crease fuel imports. It also opened doorsfor post-crisis recovery by piloting re-

forms to target social assistance, issueland use rights, and reduce transactioncosts on businesses.

The CPS Progress Report suggest ashift to scale-up pilots in land, agricul-ture, and water reform, deepen privateand financial sector development, andimprove quality of social and municipalservices, noting solid progress positiveeconomic growth achieved by Tajikistanin recent years. A recommendation inthe Progress Report extends the Strat-egy to 2014. Governance PartnershipFacility grant was also offered to Tajik-istan. The Strategy mainstreams gover-nance in the portfolio through measuresto increase public accountability andtransparency in key sectors, such as agri-culture and energy, while engaging civilsociety in building demand for goodgovernance.

Kyrgyzstan Foreign Minister Erlan Abdyldaev (L) and his Japanese counterpart Koichiro Gemba (R) shake hands as they exchange documents during a signing

ceremony about the cooperation program between the two foreign ministries at the foreign ministry in Tokyo on Novermber 10, 2012. Abdyldaev is here to attend

a foreign ministers' meeting from Japan and five central Asian countries, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

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31NEW EUROPE18 - 24 November , 2012RUSSIA

RUSSIA|DIPLOMACY

Moscow, Helsinki boost tiesMeeting with his Finnish counterpart Jyrki Katainenin Helsinki, Russian Prime Minister DmitryMedvedev said is satisfied with the development ofrelations between Russia and Finland. Katainen andMedvedev discussed co-operation in the energy sec-tor, in the field of innovations, including that on thebasis of the Skolkovo Innovation Centre, and in thewood processing, and also measures to simplify thevisa regime between the two countries. In an inter-view with the Finnish media the day beforeMedvedev said the two countries’ leaderships have asimilarity of views on many issues. The two leadersalso went to Otaniemi to visit the transformedStartup Sauna space.

RUSSIA|DIPLOMACY

Putin welcomes SarkozyOn 14 November, Russia’s President Vladimir Putinwelcomed his French former counterpart NicolasSarkozy back to Russia. "Dear Nicolas, I am very happyto see you, I am very happy that you found the time tocome to Moscow," Putin said. "I remember with pleas-ure the time when we worked together on quite seriousproblems linked to the development of relations be-tween our countries, between Russia and Europe andother acute problems," said Putin. Putin told Sarkozythat he was "very happy" to confirm that relations be-tween France and Russia were continuing to developunder the presidency of Francois Hollande. "Thankyou for inviting me, Vladimir, I remember very well thetime we spent here," said Sarkozy in the brief first fewminutes of the meeting that were open to the press."You are right to remember the friendly and difficultmoments that we experienced. Each time we were ableto overcome them because there was confidence andfriendship."

RUSSIA|DEFENCE

Conventional forces cutsRussia is ready to renew discussions about limits onconventional military forces in Europe, five years afterPresident Vladimir Putin suspended compliance withthe Conventional Forces in Europe treaty, Russianenvoy to NATO Alexander Grushko said on Novem-ber, news agencies reported. "The main thing is thatconsultations, if not to say negotiations, should startwithout any attempts at linkages with political issues,"Grushko said in Moscow. "If an interest in arms con-trol, and not some political issues, is placed at the cen-ter, there is a chance to begin a very focusedconversation about what kind of control is neededtoday," he said. "The ball is in Europe's court. We awaitsignals from our European partners that would bearwitness to their interest."

RUSSIA|TRADE

Russia cozies up to WTOAfter joining the World Trade Organization (WTO),Russia will defend the interests of national companiesbut will implement a friendly policy towards its for-eign partners, Prime Minister Dmitry Medvedev atthe 4th Russian-Finnish Forest Forum. While Rus-sia’s joining the WTO has provided more possibili-ties for investments in the Russian economy, it hasalso created certain problems for Russian companies.“Such things always happened in the countries thatgained membership in the World Trade Organiza-tion,” Medvedev said.

On 16 November, Russian PresidentVladimir Putin and German Chancel-lor Angela Merkel attended a "Peters-burg Dialog" Russian-German forumin the Kremlin in Moscow with the twosides seeking to soothe tensions overBerlin's recent criticism of the Russianrecord on rights.

"We want Russia to succeed," Merkelsaid. "We have our own ideas on how onecan succeed. Our ideas don't always coin-cide, but what matters is that we listen toeach other." Germany needs Russia forraw materials such as gas and oil, whileRussia needs Germany to help in mod-ernisation, infrastructure and health care,Merkel said.

In turn, Putin said as for political andideological issues, Russia hears its part-ners. “But they hear about what's hap-pening from very far away," he said. Heaccused one of the Pussy Riot membersof taking part in an anti-Semitic protestwhile part of another radical movement.The Kremlin leader shrugged off criti-cism of a lack of freedom of informationin Russia and said five German states hadno laws guaranteeing such freedoms. "Onthere being no German who would be amodel to us, there is such a German - thatis the Federal Chancellor," Putin said.

The German Chancellor has beenurged to bring up the issues of humanrights and democracy during her meet-ing with Putin but the two countrieswere also expected to talk about energyand the EU economic crisis. Russia isan important energy supplier to Ger-many and it holds a large chunk of its

foreign reserves in euros.The European Union's ongoing probe

into Gazprom over concerns it was hin-dering competition in Europe is expectedto be addressed, too.

On the eve of the visit, German law-makers from Merkel's coalition urged thegovernment to push for more democracyin Russia as they expressed concern overa crackdown on civil society since Putin'sreturn to the Kremlin in May.

Germany’s Foreign Minister GuidoWesterwelle ahead of the visit stressed theneed for a "critical dialogue" with Russia,warning that "partnership does not meandoing away with criticism". A week be-fore the talks, German lawmakers passeda resolution co-authored by AndreasSchockenhoff, the government's coordi-nator for German-Russian relations urg-ing the government to push for moredemocracy and warning of a "confronta-tional course towards government critics"in Russia.

Before Merkel’s visit, Putin'sspokesman Dmitry Peskov denounced arise in "anti-Russian rhetoric" in Ger-many. But he said he did not expectstrong business ties between the twocountries to be affected and that annualmutual trade of $87bn was a "safety cush-ion" that would keep ties on track. Ger-many is the EU’s largest economy andRussia is the world’s largest energy ex-porter. “We are well aware of the intensi-fication of anti-Russian rhetoric inGermany in recent months,” Peskov toldreporters on 15 November in Moscow. “Ifsuch questions are raised, then I have no

doubt that as always Putin will fully clar-ify ambiguities and will ask questionshimself.”

Germany and Russia have close energyties and are working together in buildingthe Nord Stream gas pipeline.

On 14 November, Russian gas mo-nopoly Gazprom agreed an asset swapthat will allow the Russian company totake full control of gas and trading storagebusinesses it jointly owns with Ger-many’s BASF. In the asset swap deal inreturn BASF will get more oil and gasproduction from Russia’s western Siberia.

BASF’s Wintershall unit will handover a variety of assets to Gazprom, in-cluding its stakes in three European gastrading businesses. One of these,WINGAS, supplies gas to almost 20% ofthe German market.

“By increasing our share in the gastrading and storage business, we are con-tinuing our successful activities to securethe supply of gas for Europe,” GazpromCEO Alexei Miller said.

BASF said the divested activities ac-counted for €8.6bn in sales and €250mnin operating income last year. The chem-icals group wants to expand oil and gasproduction in Russia.

The two Russian blocks in whichBASF has agreed to acquire a share areset to start production in 2016 and arethought to hold 274bn cubic metres ofnatural gas and 74m metric tonnes ofcondensate. Along with WINGAS,Gazprom is set to fully control two othergas trading companies: WIEE andWIEH.

Putin, Merkel seek to soothe tensionsRUSSIA|DIPLOMACY

Russian President Vladimir Putin, left, and German Chancellor Angela Merkel applaud as they attend a "Petersburg Dialog" Russian-German forum in

the Kremlin in Moscow, 16 November 2012.

GDP 3Q growth slowsRUSSIA|ECONOMY

Russia’s economy expanded in thethird quarter at the slowest pacesince it began recovering at the startof 2010 as a drought hurt agricul-

tural output and stuttering globalgrowth curbed demand for com-modities exports, news agencies re-ported.

Gross domestic product rose 2.9%last quarter compared with the sameperiod a year earlier, according to theFederal Statistics Service.

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The Israel-Iran confrontation is coming to itsfinal stage as Israelis are very much aware thatIran is getting close to become a proper nu-clear power. This may well mean that Tehranwill gain a seat at the nuclear powers negoti-ating table and Tel Aviv will lose its su-premacy in the area.

Israel, very simply, cannot afford that. IfIran becomes a nuclear power, the balance inthe region will be upset and Israel, which nowwith its nukes means it it strategically dom-inates the middle east, will be marginalised.In this context Israel will not be in this posi-tion any more, repeating similar to the Gazarecent events, and in the medium term its in-fluence in middle east affairs will not be de-termining any more. Thus, a preventive strikeagainst Iran, although with the total dis-agreement of the United States, cannot beruled out.

The American administration, in mattersof foreign and defence policies, is expressinga wider compromise of Democrats and Re-publicans which is rather defined and doesnot change with the changes in power of thetwo big parties, over this matter is divided.The (presently) prevailing opinion is to letIran develop into a kind of semi-controllednuclear power proper, get it in the negotiatingtable as an equal partner and on the long term

be on the safe side with no "black swans"emerging all of a sudden. All this, in (secretand informal) agreement with the Russians.

The so called "hawks" of the Washingtonadministration believe that by letting Iran be-come nuclear proper the later will go more in-tolerant, more arrogant and rather sooner

than later will be the one to preventively strikeIsrael. In this case a Third World War withnukes seem a possibility exceeding the mar-gins of the statistical error. However, this pos-sibility is rather remote as the Americans areconscious of the real situation in the area. In-deed, the geopolitics of energy is at stake in

the wider middle-east and central Asian. TheWest has to chose (if it is asked) to decide be-tween two evils, Iran becoming like Turkey orTurkey becoming like Iran. The first possibil-ity, although tough for the West, is much bet-ter than the second.

In Europe, many believe that the situationis similar to the Cuba missiles crisis whenAmerica was about to confront the SovietUnion. However, after a secret negotiationconcerning the dismantling of the JupiterIRBMs deployed in Italy and Turkey target-ing the Soviet Union, the crisis, which lastedtwo weeks, ended in October 28, 1962. In-deed, the present crisis is not similar, as in realterms it is negotiated between the US andIran (similarly to the US and USSR in 1962);the third party being one of the interestedparties, in this case Israel, having nuclearweapons and thus it de facto has a voice inthis chapter contrarily to Cuba, which at thetime although primarily concerned did nothave access to nuclear missiles and thus it wasnot a part of the equation.

The Iran-Israel crisis is the hard core issuein the middle east, and combined with thegeopolitics of oil and gas in the wider area,becomes difficult to assess equation as, so far,it included many unclear elements.

BC

KASSANDRAThe Irish presidency logo seems to illustrate

that they expect the Council to continue going

around in circles, with no way out

Page 32 | New Europe

18 - 24 November , 2012

[email protected]

Once upon a time in Brussels ...

Follow me on twitter @Kassandra_NE

Israel and Iran between a preventive strikeand the painful historical compromise

Last week, we mentioned the case of

Bivol.bg, a strange internet site, operat-

ing in Bulgaria for two years.

The site enjoys a high popularity, as it is

famous for exposing ‘stories’ that are not

usually found in the mainstream media;

it takes pride in presenting itself as the

closest copycat of the famous US site

“Wikileaks,” although without having

access to the archive of secret services,

as Wikileaks has. And still, part of the

audience consider this site as a trust-

worthy and ignores the fact that its

sources are unknown, and the ‘facts’ it

presents are not always compatible with

reality…

The usual targets of Bivol.bg are busi-

nessmen and politicians, large compa-

nies, banks, and political parties. In

short, all those who, in the eyes of many

people are ‘guilty’ of some imaginary

crime, just because they are successful in

their activity.

The following example is characteristic

of the morality of the site. Earlier this

year, Bivol.bg published a ‘document’

supposedly coming from the US Em-

bassy in Sofia, and analysing the Bul-

garian banking system. The document,

among others, was questioning the op-

erations of four Bulgarian banks, stating

allegations of money laundering and

other illicit actions. No specific opera-

tions were mentioned, just general accu-

sations and wishful thinking…

The ‘investigators’ of Bivol.bg, Atanas

Tchobanov and Assen Yordanov

thought that they had caught a big fish.

In reality, they had nothing, but thin air.

The banks reacted to protect their rep-

utation, and also appealed to the Cen-

tral Bank (BNB), claiming defamation.

Mesrs. Tchobanov and Yordanov got in

a difficult position; after enquiry, the al-

legations of their site proved completely

false and fabricated, crediting the opin-

ion that their ‘document’ was only a

means of exerting pressure and get some

financial benefit.

In fact, quite the opposite happened:

they found themselves liable to indem-

nification of those whose reputation

they tried to tarnish.

(to be continued)

The Iranian navy takes part in a military exercise in the straight of Homruz in the Oman Sea, 28 December

2011, following renewed speculation about possible Israeli air strikes against the country's nuclear sites.

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The strange case of theweb site ‘Bivol.bg’

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