19th Year of Publication | Number 964 | December 4 - 10, 2011 | 3.

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NEWEUROPE
Attack on Iran could lead to $200 oil |Page 17

www.neurope.eu

GREECE
Greek former deputy culture minister and elected governor for the Peloponnese periphery Petros Tatoulis talks with NE about the new regional administrative structure in Greece

INTERVIEW
OFID Director-General Suleiman J. AlHerbish talks to NE about the role of the fund in development and energy poverty alleviation and its involvement in southeast Europe

INTERNET
European Data Protection Supervisor Peter Hustinx talks to NE about how the EU handles the internet and the worldwide web which have grown rapidly over the last decades

CLIMATE CHANGE
Negotiations on climate change are now underway in Durban, but AER President Michle Sabban told NE that those looking for a breakthrough will again be disappointed Page 16

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Pages 14-15

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IN THIS ISSUE
EU Policy Treating the worlds poor as Europes enemy |Page 4 Citizens have the right to know |Page 12 EU-World OSCEs steady approach to security is now needed more than ever |Page 8 Fundamental inequality is at the heart of domestic violence|Page 12 Iran resistance leaders urge EU to prevent massacre |Page 13 Energy & Climate Gazprom, RWE discuss joint venture|Page 16 EP Committee discusses energy efficiency targets |Page 17 Country news Anti-nuclear activists to continue their protests|Page 23 Bratislava prepares for Schengen assessment|Page 30 Cyprus offers terse rebuff to Turkish offer|Page 31 Ankara wants a fair dialogue between the West, Iran|Page 35 Kiev, Tel Aviv to boost tourism co-operation|Page 36 Russia to send northern fleet warships to Syria |Page 39 Editorial & Opinion Is German economy a fortress?|Page 5 Crisis: Midwife of change|Page 6 Educating youth benefits us all|Page 11 An unnoticed but crucial development summit|Page 7 The Knowledge Government|Page 8

ECB, IMF to save the euro

Three leaders unveil their plans for the new mechanism

Chancellor Merkel in conversation with Governor of European Central Bank Mario Draghi as other European leaders look on.|EPA/ARNE DEDERT

ARTS & CULTURE

Travelogue

Page 19

Three central figures in the heart of Eurozone's efforts to save the euro unveiled their intentions this past week. Angela Merkel, Nicolas Sarkozy and the governor of the European Central Bank, Mario Draghi, over the past few days have described the broad lines of what could be done to save Eurozone and the euro, but none of the three have as yet provided details. The final proposal is expected to be agreed on Monday 5 December in a MerkelSarkozy meeting, where they are expected to come up with the changes that will need to be made to the European Treaties. The German Chancellor however, speaking at the Bundestag on Friday 2 made clear, that

the Eurobonds are not part of the overall solution. In conclusion she said that, we need fiscal discipline and an effective mechanism to manage crisis. This means that the European Treaties have to be modified or come up with new ones. From his side the French President agreed that there should be changes in the EU rules but he observed that, we face an urgent problem and the world cannot wait for Europe, in this way expressing his annoyance about the Berlin tactics. Last but not least the governor of the ECB, Mario Draghi, addressing the European Parliament for the first time in his capacity as head of Eurozone's central bank,

just stopped short of telling EU law makers that ECB was prepared to intervene in the state debt market to support national treasuries with unlimited resources, if the Eurozones political leadership came up with a plan to effectively control fiscal deficits and borrowing by member states. All that seen together with what it was discussed in depth by the seventeen ministers of Finance during Eurogroup's 28 November meeting, concerning the IMFs participation in a new plan to save the euro, and one may come up with the basic lines over the relevant proposals to be presented during the European Council of 9 December. Pages 2, 3, 4, 5, 9, 31

Page 2 | New Europe December 4 - 10, 2011

ANALYSIS

NEW EUROPE

The Shooting Gallery

Markets give last warning to Eurozone
By Dionyssis Kefalakos
During last week debt markets told the European leaders that there is no time to lose, if they want to save the single European money zone and the euro. Italy and Spain were forced to pay double interest rates for short term government paper, Belgium still without a government was degraded by rating agencies and borrowed at rates above 6%, while France's triple A creditworthiness is under immediate threat. Not to say anything about Greece, Ireland and Portugal. On top of this the newly elected government of Mariano Rajoy in Madrid, is contemplating to ask for external help to solve the financial mess in the country. In view of all that the leaders of the two largest EU countries, Angela Merkel and Nicola Sarkozy, met last week in Strasbourg and decided that they must come up with a new proposal, to effectively take care of all those sovereign debt problems. Otherwise the Eurozone will soon face existential questions. At the same time the United States and Britain are quite alarmed with the European insistence not to recognise so far the urgency and the risks to the global financial system, pointing out that Eurozone has to come up with solutions. Along those lines a number of main stream European media are reporting that the two leaders of Germany and France are to present soon a new plan to take care of all that. Analysts say that the plan will contain an initiative to create new fiscal deficits and sovereign borrowing control mechanisms, legally resembling to the Schengen Agreement. The idea is that under the urgent character of the problems and given the need for a long term solution, this cannot be done on time through a change in the European Treaties. So there has to be a plan for new mechanisms which can be enacted under the present institutional framework and this seems to be the one on which the Schengen Agreement is based. This framework provides for the creation of mechanisms by those member states of the Union that want to participate, leaving the others out. This mechanism will provide for effective fiscal deficits and state borrowing controls. Along these lines the countries which will participate in it, they will concede an increased part of their sovereignty over state financial issues to central institutions like the Eurogroup and the European Commission or a new financial control council along the lines that the Schengen Agreement functions today. Within this scheme there will probably be also a possibility for a member state to go bankrupt in a controlled way. The creation of such a politically strong control mechanism over government deficits and sovereign borrowing, will open the way to the Central European Bank to act like all main central banks of the developed world do, and take care of not only the liquidity of the commercial banks but also by intervening in the secondary government bond market as well as by directly buying newly issued government bonds, through printing money as the American Fed and the Bank of England are doing. The German objections for such a role for the ECB will disappear, in view of the fact that there will be central European management over member state fiscal deficits and borrowing, applying effective controls to the unhealthy practices of the past. All that however have to be announced immediately or the latest before Christmas, if the Eurozone is to avoid entering a vicious circle which could take down not only the countries that face grave problems like Greece, Italy, Spain, Portugal, Ireland and Belgium but France, Holland, Austria, Finland and Germany too which have no problem whatsoever in honouring their debt obligations, a possibility which may practically derail the entire European edifice.

Van Rompuy unveils 'mystery' banker who will save the Eurozone.|EPA/PIER PAOLO CITO

NE

15 YEARS AGO

Towards the end of 1996, Yeltsins' government in Moscow was battling to put together a state budget for the year 1997, but the still strong communist opposition in the State Duma, the Russian Parliament, were playing a hard populist game, trying to force the government to make concessions which were certain to lead to hyper inflation. During the same time President Yeltsin had to face Mikhail Gorbachev, who had been going around trying to justify his Perestoika policies, against the confrontational path followed by Yeltsin. Gorbachev was still an influential figure, in the new Russian Republic as the last USSR president but was abstaining from day to day political life. Yeltsin however was very careful to undermine him through negative propaganda.
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NEWEUROPE

Dennis Kefalakos dkefalakos@neurope.eu SENIOR EDITORIAL TEAM Kostis Geropoulos (Energy & Russian Affairs) kgeropoulos@neurope.eu Andy Carling (EU Affairs) acarling@neurope.eu Cillian Donnelly (EU Affairs) cdonnelly@neurope.eu Ariti Alamanou (Legal Affairs) aalamanou@neurope.eu Alexandra Coronakis (Columnist) acoronaki@neurope.eu Louise Kissa (Fashion) lkissa@neurope.eu ONLINE EDITOR James Drew jdrew@neurope.eu

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ANALYSIS
ECONOMY

NEW EUROPE

New Europe |Page 3 December 4 - 10, 2011

Can Eurozone save the euro?

By Dionyssis Kefalakos
The decision on 30 November by the six major central banks of the developed world, namely the American Fed, Eurozone's ECB, Bank of England, Bank of Japan, Swiss National Bank and the Bank of Canada to jointly intervene in the money markets has set a base for international financial affairs. The six central banking institutions agreed in October to jointly hold three unlimited dollar auctions, in order to secure a sound dollar supply for Eurozone's banking system. The first of those auctions will take place during the coming days, with the last due in March 2012. If needed, however, these auctions will continue well into next year. Even in September, a number of Eurozone banks, mainly in France, had problems in securing enough dollar supply for themselves and their customers. If the central banks had not intervened, those commercial banks could have come up in the financial markets overselling their dollar-denominated assets, thus creating disarray that could have led to a new credit crunch, because investment banks (mainly in the US) had already began to refrain from lending to their European counterparts. In this way, the banking systems of the six major economies could ensure that there is always a line of liquidity available, for whichever of the six needs it. If, however, the major commercial and investment banks are immunised in this way vis--vis a probable liquidity crisis, the same could also be said of the relevant governments because those commercial and investment banking firms are also major lenders to governments. A cosy solution for everybody. However, given that the political leadership of Germany thinks that the firewall separating the European Central Bank (ECB) and the 17 Eurozone governments' treasuries should remain intact, this new money-swap is a huge bypass, which is enough to allow the major commercial and investment banks to continue lending to governments. And this is true not only for the US and Britain but for the Eurozone too, where the ECB has been making sure that commercial lenders have enough liquidity to buy government bonds and bills in the three Programme countries. Only the Greek commercial banks have acquired ECB loans of more than 100 billion, on government debt paper and state guaranties offered as collateral. The same is true for Ireland, Portugal and Spain. So this new central bank initiative to make sure that the entire banking system remains liquid. Given that the overall support of central banks for their governments has now reached the region of trillions, and this is mainly occurring in the US, Britain, Japan and elsewhere in the developed world, with use the IMF to bail out their peers in the EU money zone. Dutch Finance Minister Jan Kees de Jager said that the IMF could be provided with more fire-power, to assist of bail out Eurozone countries in trouble. This new money from the IMF could come from Eurozone countries or even from countries outside the EU Russian Prime Minister Vladimir Putin, for example, has said that Moscow could support the Eurozone with 10 billion, but via an IMF mechanism and not a direct loan to the EFSF. This still holds water after Economic and Monetary Affairs Commissioner Ollie Rehn said that the Eurozone has only ten days to save the euro. The real problem, however, may be that there are not enough resources within the Eurozone surplus countries to save the entire money zone, and it would not be wise to use all those resources in one go, regardless. What if something goes wrong? Then what? So, it looks as if the eagerly awaited joint announcement by Berlin and Paris and the 9 December European Council, will come up with a plan to save the euro involving the IMF, with a number of countries outside Europe prepared to help the Eurozone, but unwilling to do it through the EFSF. After all, they believe that their money will be safer if the borrower were the IMF, and they may well be right.

Olli Rehn, the Monetary Affairs European Commissioner has a thankless task.|EPA/OLIVIER HOSLET

the exemption of Eurozone, it is interesting to watch Berlin keep insisting that the ECB should continue to be prevented from lending directly to the 17 governments, and this despite the fact that the ECB has already spent hundreds of billions of euro to finance not only the banking system of the three Programme countries and indirectly their three governments, but also the major German and French investment banks to get rid of their excess holdings of low-grade sovereign Greek, Irish, Spanish and Portuguese debt. But how far can the ECB go? Are there enough reserves in the Eurozone to refinance its balance sheet, should the need arise? So, this cosy arrangement cannot be sustained for long or keep expanding without undermining the credibility of the ECB itself if it is not left to follow the policies of its major peers in the US and Britain and given a free hand to ensure that the 17 governments of its member states remain liquid via the direct purchases of sovereign bonds in large quantities, the present arrangement will collapse. But it is questionable if the ECB has enough resources to do this, and keep all Eurozone banks and governments afloat refinancing the institution to do this may in fact exceed the reserves that the four surplus countries Germany, Holland, Austria and Finland have at their disposal. Exactly the same is true for the issuing of Eurobonds that the European Commission has proposed, angering Berlin. If markets are not convinced that Eurobonds, in whatever form they may appear, have insufficient resources behind them to support all Eurozone countries with credit problems, even perhaps France, then the EU could collapse in a few days. In view of this deadlock, Berlin and the surplus countries seem now to favour the idea of mobilising the International Monetary Fund and reserves outside Europe to save the Eurozone, exactly the same attitude that

was adopted when the first package in favour of Greece was discussed in spring 2010, with Germany adamant that the IMF should be involved in supporting Athens. Last week, the following was published on New Europe Online: The surplus Eurozone countries, which are expected to contribute the bulk of the required financial power (to save the euro), are likely to bypass the European Union and the Eurozone institutions and instead
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Page 4| New Europe December 4 - 10, 2011

NEW EUROPE

ANALYSIS
IMF to help save the entire Eurozone
By Dionyssis Kefalakos
On 29 November, the Eurogroup did not come up with any ground-breaking decisions on the Eurozone's debt problems, leaving this up to the European Council, namely the 27 EU leaders meeting on 9 December. Obviously in the meantime, Berlin and Paris will come up with their new plan for a definitive Eurozone solution. In short, the Eurogroup's 17 finance ministers released the 8 billion sixth tranche of soft loans to Greece along the lines of the June 2010 package as they were expected to do, and issued a reminder in so doing that European Financial Stability Facility (EFSF) leveraging is not a thing of the present but instead will take some time for the full firepower of the facility to be used. In any case, the Eurogroup also confirmed that the EFSF will be able to intervene in primary and the secondary markets for state debt and will also be used to refinance banks if governments prove unable to do so within their own territories. The problem, however, is that the EFSFs arsenal will be below the required level if Italy or Spain need assistance or, even worse, a bailout in the short term. Next year, Italys maturing state debt will be anything from 200-300 billion. How can this amount be refinanced in regular markets if the ten-year Italian bond yield is oscillating at around 8%? The same is true for Spain, to say nothing of Greece, Ireland and Portugal, with these three being locked out of capital markets for the foreseeable future. So, in reality, the problems are likely to culminate within the next few months if not weeks and the final solution must be ready or at least broadly agreed upon before the end of the year. If such a solution to the Eurozone's sovereign-debt problem is not agreed over the coming weeks for the rest of the world to see, the dead end may come much earlier. It is very interesting to note, however, that the surplus Eurozone countries, which are expected to contribute the bulk of the required financial power, are likely to bypass the European Union and the Eurozone institutions and instead mobilise the IMF to help bail out their peers in the EU money zone. Dutch Finance Minister Jan Kees de Jager said that the IMF could be provided with more firepower, to assist of bail out Eurozone countries in trouble. This new money from the IMF could come from Eurozone countries or even from countries outside the EU Russian Prime Minister Vladimir Putin, for example, has said that Moscow could support the Eurozone with 10 billion, but via an IMF mechanism and not a direct loan to the EFSF. The same is probably true for developing countries such as China and Brazil, which have shown willingness to help Europe, given that the EU is the largest consumer on earth and that their growth depends largely on Europeans ability to continue consuming. Endowing the IMF with more money could be realised either through an increase of the SDRs or bilaterally, through direct contributions from the central banks of Eurozone's member states or central banking institutions outside Europe. The EFSF will remain as financial mechanism only by working with the IMF.

POLITICS

Treating the worlds poor as Europes enemy

By David Cronin
Jos Manuel Barroso has little time for his critics, judging by a recent speech he gave in Berlin. The European Commission president used his soapbox to rant against something I often call the intellectual glamour of pessimism. Emphasising the EUs shortcomings, he argued, overlooks how we have established on this continent, here in our Europe, the most decent societies known to mankind. To his disgrace, Barroso heads an institution that is actively unravelling the decency he tried to celebrate. After forcing merciless cutbacks in the public services on which millions of Europeans rely, the Commission will this week demonstrate its cruelty towards the poor and oppressed of the wider world. It will do so by formally recommending the establishment of a new border surveillance system, designed to keep people with dark and yellow skin out of the Union. Of course, the proposal for Eurosur, as the system is called, will not be so blunt in its use of language. Yet once you examine the preparatory work for it, the conclusion that foreigners are being treated as Europes enemy becomes unavoidable. Weapons-producers, the very people whose business depends on violence and human rights abuses, have been centrally involved in the systems planning. It is closely related to a 42 million euro research project largely funded by the EU named PERSEUS (Protection of European Seas and Borders through the Intelligent Use of Surveillance). In a conflict of interests, that project is being coordinated by the Spanish arms firm Indra, which stands to benefit directly from the sale of the surveillance equipment to be used by Eurosur. Thales, the French defence firm, is leading a similar EU research project known as OPERAMAR, which is supposed to address the insufficient interoperability between the Unions maritime security facilities and those held by the national authorities of its member countries. I would not be surprised if Cecilia Malmstrm, the EUs home affairs commissioner, predicts this week that the system will help rescue boats that are in danger of sinking. Any such claim will be misleading; the experience of these kind of surveillance systems is that they push asylum-seekers to take increasingly perilous routes in the hope of giving the authorities the slip. Spain introduced a 300 million euro system called SIVE to monitor the Strait of Gibraltar in 2002. The effect was that

Sub-Saharan African migrants who were aboard a 15-metre boat are guarded as they arrive in the harbour of the Italian island of Lampedusa, on 15 April 2011. The internationally recognized non-refoulement principle states that authorities cannot push back migrants without checking first for the presence of asylum-seekers. |EPA/CARLO FERRARO

boats carrying asylum-seekers tried to enter Spanish territory via the Canary Islands instead. When SIVE was extended to the Canaries, it emerged that saving lives was not a priority for those operating it. In 2004, a number of small boats sank, causing numerous deaths, in areas where surveillance equipment had been installed. During parliamentary discussions the following year, the Spanish Civil Guard admitted that the system was of a security nature; search and rescue was not the primary concern. The European Defence Agency (EDA), that official body set up at the request of Thales and other arms companies, is also taking an active part in the discussions about Eurosur. A 2010 report written for the agency by a wise pen group comprised of five vice-admirals from different navies advocated that warships should be used for patrolling the EUs external borders. The same report gave a positive assessment of operations in which boats carrying asylum-seekers were boarded by armed personnel, while still at sea. It is telling that the vice-admirals did not appear to have any problem with measures that would inevitably increase the anxiety of people who are already frightened. In September 2008, the French naval vessel Arrago intercepted two boats with asylum-seekers in the Mediterranean. The boats were then escorted to the Sicilian port of Lampedusa with the asylum-seekers having guns pointed at them the whole time. That operation was directed by Frontex, the EUs border management agency which is also set to be involved in Eurosur. Frontex is legally bound to respect fundamental rights; in practice, it does not.

A few months ago, Human Rights Watch published the results of its investigation into the detention of almost 12,000 migrants who entered Greece at its land border with Turkey between November 2010 and March this year. During that time, the European Court of Human Rights in Strasbourg issued a judgment, which found that Greeces asylum system was dysfunctional. The countrys detention facilities were found to be so shabby that they violated human rights laws prohibiting ill-treatment and torture. Guards deployed by Frontex regularly apprehended migrants and brought them to the detention centres, frequently in buses provided by the agency. In some of these centres, unaccompanied children were held for long periods. This means that an official EU agency helped flout international law. Under the 1951 Refugee Convention, all signatories are supposed to guarantee the protection of minors, in particular children who are not accompanied by a parent or another adult. The Frontex chief Ilkka Laitinen last month made a distinction between irregular migration and bona fide border crossings. Reading between the lines, it appears that the only difference between the irregular and bona fide travellers he referred to is that the second group is lucky enough to have documents that immigration officers will accept. Laitinen should read a passage from Barrosos Berlin speech: we believe that if someone is poor, it is not necessarily because it is his fault. Trying to enter Europe in order to flee persecution or poverty is not a crime. How dare the EU treat such people as criminal.

NEW EUROPE

New Europe |Page 5 December 4 - 10, 2011

ANALYSIS
FINANCIAL

Is German economy a fortress?

By Clem Chambers
Seen as the Eurozones safehaven, is Germanys position as secure as people think? If Germany is to avoid financial collapse, should it act more like the US? It is difficult to tell whether the euro crisis has actually begun, let alone reached an end game. The vista that has opened up in the last few days is truly epic. It appears the bail-out of Ireland and Portugal followed by the implosion of Greece was merely an overture. Now, as Italy flounders, the opera can really get started. When the cowboy has set up his camp in Indian territory the old timer in the posse will say, its quiet, too quiet. This is a prelude to the battle ahead. Last week it was just that; quiet. There was no great conference, great show of
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strength or solidarity. No leaders stood on a pedestal and announced this stops here. Instead, proposed actions have been leaked through the press. From a certain perspective the official silence was welcome. Every second-rate European governmental personality has of late felt at leave to make a personal policy statement on the Euro crisis, which has only added further confusion and consternation to the story. In modern politics, only the anointed speak, and then only the agreed line. Talking out of turn is a way to end your political career at a national level, but at the European level this media discipline has broken down. This new silence is due to fears now turning into reality. When reality strikes, people become scared to risk being remembered for rhetoric.

Germany has been basking in super-low interest rates. Bond holders have dashed to it for safety. Everyone has assumed economic powerhouse Germany will be the saviour for disrupted Europe. That Germany is an economic bastion is a given. Yet, like many assumptions, it doesnt look so clear cut when examined. Germany is not exactly broke but it has an 80% debt to GDP. As 40% of GDP is government spending that makes its debt 150% of real GDP. (GDP includes government spending, but governments dont make wealth, they redistribute it. Debt is repaid from private sector tax receipts, so the GDP number is frighteningly misleading and the debt, in practice, much higher.) With the fabric of European solvency coming un-

done its no surprise bond buyers are no longer keen to buy German debt at 2%. Its better to take cash somewhere else where credit default swaps are honoured and the whole platform for the local currency is not coming unglued. However, we should not get carried away; at the beginning of the year Germany was paying 3.5% interest on ten year debt, so the fact lenders are shying away from 2% is hardly surprising. What it does show is that the bony finger of the debt crisis is beginning to point at all European nations. France is clearly feeling the onset of the contagion. If it falls, the endgame begins. The big question is why will Germany not pull France to safety? Its becoming clear Germany itself does not feel like a haven. The country does not think it can rescue anyone but itself. Meanwhile, the US has no such qualms; it has already ridden to the rescue with a dollarswapping facility to allow Europe to get Dollar funding. This kind of big picture courage is what Europe expects from Germany. It will get no such thing. A cynic would say Germany is not bust but the US is. Yet Germany will suffer drastically if its trading partners fold. It too, will end up with 7-9% interest rates to fund rolling debt. It, too, will be crippled by recession. The story is an old one. The current government of Germany will lose power if it bails out Europe. Few politicians will leave office on the principle of doing the right thing, when weighed against the wishes of its people. Between now and Easter, Europe is set to meltdown amidst a slow avalanche of rising interest rates. And, like a proper opera, this drama is very unlikely to have a happy ending. Clem Chambers, is CEO of stocks and shares information site ADVFN.com and author of 101 Ways to Pick Stock Market Winners,.

Averting war with Iran

By Dr. Greg Austin
The escalation of tension between Iran on the one hand and the EU/US/Israel alliance is alarming. Is war now more likely? My answer would be that the likelihood of war between Iran and that alliance has now passed the 50 per cent mark for the first time war is now more likely than not, unless a compromise on nuclear policies and the Iran/Hezbollah relationship can be reached. The analytical foundations for reaching this judgment on the likelihood of war can be found in three places: first, the trend in the diplomacy in the specific case; second, structural circumstances derived from historical and theoretical analysis of many wars; and third, the emotional and psychological condition of the two sides in the specific case. On the diplomatic or political side, the United States and Israel have been making statements that imply possible military attack on Iran for at least nine years. The conflict has been progressively escalating in the past three years, with only occasional hints of possible compromise. The reported plot by Iranian officials to assassinate the Saudi ambassador in the United States provided an incendiary explosion to the simmering tension. The latest escalation is the Iranian failure to prevent an invasion of the British embassy and the consequential ejection of Iranian diplomats from Britain. The last three years have been marked by unprecedented physical intrusions (covert attacks) inside Iranian territory by one or more members of the alliance. These attacks include the use for the first time ever by one or more members of the alliance of cyber weapons to attack Irans nuclear processing facilities. The escalation also includes the imposition of yet tougher sanctions on Iran by the United States, Britain and some other EU allies that are intended to dry up Irans access to international finance. The escalation of such sanctions has an implied end point of military confrontation unless one side or other backs down. The structural argument flows from an analysis of history of when states go to war. We can see a number of alarming elements. The first is a high degree of mobilization for armed actions, both through the use of proxy forces and contingency preparations for attack. The second is a highly volatile and clouded political environment in which major actors have weak knowledge of the real motivations and intentions of key players. The third is the existence of a belief one or both sides that the parties are locked in an existential battle. The fourth is existence of a belief in the need for pre-emptive strike. (The narrative over more than five years in the United States and Israel has been centered on the need for military action to pre-empt the acquisition by Iran of military nuclear capabilities.) The fifth is that the power of one side or the other, or both, is undergoing a political transition that is altering its power relative to others in fundamental ways. This appears to be the case all of the key players: the United States, the European Union, Israel and Iran (though the causes and nature of the fundamental power transition in each are different). That brings us to the last source of assessment for believing that the likelihood of war has passed 50 per cent: the emotional and psychological condition of key decision-makers in the specific countries. It is my fear that some political leaders in several key countries may be out of their depth in terms of their ability to relate to the psychological and emotional positions of the other side. I fear that some leaders are allowing themselves to be carried away by a logic of escalation that appears rational to them but may soon lock us all into only one ending.

Page 6 | New Europe December 4 - 10, 2011

NEW EUROPE

ANALYSIS
INTERVIEW | PETROS TATOULIS

How to improve investment climate in Peloponese

growth strategies based on local needs and comparative advantages.Kallikratis reform also provides the opportunity for people to express themselves beyond the boundaries of traditional party politics. In the Peloponnese for example voters approved our ballot which included people from completely different professional and political backgrounds. I believe that these changes constitute a major step towards a genuine decentralization and a challenge for local communities to build a stronger future build on customized growth models. Of course the situation is far from being ideal. On the contrary, the newly elected administrations have to deal with complex problems. First of all we have inherited all the structural weaknesses of the Greek state which for many years now has been growing disparities and uneven opportunities at local level. Secondly this transition is taking place in a very difficult financial and political environment where resources are scarce,the political system is fragile and the future uncertain. Thirdly it seems that the whole European system is currently in a process of change and restructuring thus enhancing not only uncertainties about the future of Europe but also competition amongst regions. Personally I believe that it is important to perceive these problems as major challenges. It is time for elected local administrations to step up and become part of the solution. Despite all the difficulties we still posses some crucial means for actions such as the structural funds. Since last summer the central administration has turned their management over to the peripheries, therefore it is up to us now to increase the pace of absorption and promote the projects that are going to boost our economy but also our confidence. At the same time it is important for us to contribute to the discussion taking place regarding the next programming period and the future of regional policy in Europe. New Greek peripheries can, should and will play a role in European regional convergence and integration. You mentioned the difficulties related to the crisis. We have seen Greece struggling over the last two years, is there a sustainable solution for the future? I believe that the crisis is systemic.Unfortunately many people blame Greece for all the problems facing the EU today. Even if that where true it would mean that a country representing 2 percent of European GDP managed to endanger a whole economic system. Of course Greece has made mistakes but so has Europe. I believe that it is time to start thinking outside the box and figure out the necessary adjustments not only concerning public finances but also concerning growth,investments and jobs. For instance, I strongly believe that the creation of Special Economic Zones within the EU will hugely benefit local development but also the general European interest.With respect to competition,I believe that all regions are not similar therefore they should be given the means and opportunities to promote their comparative advantages and attract investments. Don't forget that if Europe has a genuine intention to grow as an economic system than it will have to look after specific regions with special characteristics. After all we always have to consider the fact that European regions are not only competing with each other but they are also competing in a globalised economy.At least this crisis reminded us of the importance of adjustment and flexibility. Sometimes special circumstances need special solutions. Does the Peloponnese have the ability to become competitive? The region of the Peloponnese is a historic region with enormous cultural and natural wealth but also with a huge potential for growth. As I mentioned before the region was neglected by the central administration for many years. Our goal is to put the Peloponnese back on the map and steadily build a competitive investment environment. Our main priority is to leverage private funds tocomplement regional funds and use every financial instrument available.

Mr Tatoulis, you are the first electedgovernor for the periphery of Peloponese in southern Greece; can you share your thoughts on the new regional administrative structure in Greece? The Kallikratis reform which has been in place for a year now, has rearranged the administrative map of our country. For the first time in Greece citizens are given the opportunity to choose their leaders at periphery level thus providing further democratic legitimacy to regional policies.Citizens at local level are now able to choose the people they consider most suited to represent them, design policies and promote

ECONOMY

Crisis: Midwife of change

strengthened financial regulation at the EU and international level, clear reflections of gouvernement economique. Still the crisis has only escalated during the same period and today the euro is at risk. States with high public debt and deficits criticise the Eurozone core for not being bold enough and the opposite is true; for the Eurozone most solvent states threat the periphery with punishment, expulsion etc. These two attitudes are two reasons why the Eurozone today is sinking in a vortex. In fact both attitudes are manipulated for domestic consumption. Some national governments try to avoid their homework and the painful structural reforms and point to Brussels for solutions, while, on the other end, certain national politicians in solvent countries try to compromise the unwillingness of their electorate to accept the term bailout with an exhaustive rhetoric about punishment. In fact we are at a point where three possible solutions can take place: The first solution is to continue what we have been doing during the past 18 months: concise steps towards better fiscal and economic policy coordination. Regardless of the cumulative result that is substantial it is clear that this littleby-little approach did not manage to prevent the escalation. The second solution is to create a smaller virtuous Eurozone core with the most solvent member states. Could this be a solution..? The problem I see in this direction is that it creates the conditions for a new division in Europe. The return of some countries like Greece, Italy, Spain and others of the periphery in a currency that is projected to be less strong than the present would require years of adaptation with a social impact comparable to conditions of war. Currency speculation from wealthier citizens, price restructuring in different products depending of origin, double digits recession and unemployment, speculation from investors from other countries etc.. The third option is to take the bold steps towards a comprehensive solution based on close economic and political union. An argument as to what the European Union must do today should be searched under the topic if todays public debt crisis happened in a federal state like Germany, how should the country deal with it? Dealing with a severe crisis at a state like Germany would never end up to an endless debate about bailout and/or punishment.The discussion would focus on how to overcome the crisis at those Landers minimising the crisis proliferation to other Landers and how to secure that this will not happen again. I fully understand that the EU is far away from being a federal state and any discussion in this direction inevitably gets complicated out of several national models from centralised France to decentralised Belgium. It is the time for a true monetary and fiscal Union where the ECB acts as a true central bank and as the last resort lender and instruments are used that reflect the irrevocable declared mutualisation of public debt in the Eurozone area, while the interest rate difference between the solvent core and the risky periphery countries would be calculated and taken into account for some form of redistribution. To make this clearer, the mutualisation of the public debt would lead to an increase of the interest rate of German and other core Eurozone members bonds today. This could be calculated and dealt with within the Eurozone. At the same time we pursue the necessary reforms that will prevent this crisis from happening again and would allow for strong surveillance, debt brake provisions, monitoring and subsequent sanctions and in effect the complete Europeanisation of this policy field addressing the legitimate concerns of moral hazard. Reaching a solution at this moment about the model of integration has to compromise the balance of power where, of course, Germany has a role far more influential than its 29 votes in the 255-votes majority threshold in the 345-votes Council. Such a model has to be workable at the Eurozone level, further, workable in the enlarged Eurozone in the years to come.What prevents European leaders from taking this path? - The intergovernmental predominance over the Union approach. In fact, national politicians primarily speak on a national audience and this is part of the problem today. The national electorates are not ready to accept a closer economic and political Union and therefore their national governments, even in France and Germany, try to avoid addressing the core of the problem and buy time. - The reluctance of public opinion. I doubt how much prepared are national electorates in most member states of the Union to accept steps for closer economic and political union. I content that they are still not prepared. In this respect, acting now will bear a political cost in some member states and this is mainly the reason why some national leaders are still reluctant. However, one thing is now clearer than before: the crisis that the Union is entering in the following weeks, not months, if we do not act now it will be so severe that the electorates will punish their governments 10 times more than if they act now. Acting now is ten times safer than if no acting takes place. On the one hand we are at a point of no return and on the other today a solution is not a popular thing.The combination of these two describes the deadlock we are at present. Dealing with the crisis today requires challenging what is considered as politically correct. European leadership requires going against the odds. Electorates and history down the line, not today, will appreciate.The founding fathers will as well. Michalis Peglis is the deputy International Secretary of Nea Demokratia (GR) mpeglis@nd.gr

By Michalis Peglis
The Greek crisis has been a catalyst for the reform of the European economic governance. The endorsement of the EuroPlus Pact, the reinforcement of budgetary surveillance through a better coordination of national fiscal policies and the Stability Growth Pact, the adoption of the European Semester, the creation of the EFSF and subsequently the European Stability Mechanism, the intensively debated in the European Parliament and adopted Six-Pack, the establishment of the European Systemic Risk Board and three other European agencies. Significant steps for the reinforced economic and financial supervision have taken place. These steps taken within only the past 18 months have strong elements of ordoliberalism and have increased the institutionalisation of macroeconomic policy coordination and supervision in the Eurozone and elements of a

ANALYSIS
INTERVIEW

NEW EUROPE

New Europe | Page 7 December 4 - 10, 2011

New Europe content partner

Peter Hustinx: The European Data Protection Supervisor

By Stratis G. Camatsos
The internet and the world wide web have grown rapidly over the last couple of decades from a research project into something that involves millions of people worldwide. Much of the internet's usefulness comes from the fact that it is shared by users, service providers, and others, in the sense that each depends on the other and needs to support the other. To gain a better insight as to how the European Union were handling these issues and tackling these questions, New Europe went seeking the guidance of the European Data Protection Supervisor, Peter Hustinx. Commissioner Reding said that European consumers should have their data protected regardless of the country where companies processing it are established. The statement suggests that the reform will tackle some loopholes in the EU Data Protection legislation. Do you feel that the changes to be proposed by the end of June 2012 will fill in these loopholes? First of all, I don't think it will be June. Ms. Reding is preparing for early next year but the final date will be decided by the Commission as a whole, so we don't know for sure when it will be. Second, my focus is not on closing loopholes. It is more on the system that we have now, which has been in existence for 15 years or so, and making it work in practice. Not only is technology scaling up, but we also have globalisation, and thus, we need to be strong in facing the challenges. This involves addressing some of the problems of the current framework because it is fragmented. The rules will need to be more uniform. My sense is that the proposed changes are on the right track. The Commission has been preparing for this for some time and if 80-90% of what they said will be delivered, then it will be a very welcomed step. Data controllers, such as Google and Facebook, have been gathering information not adhering to data protection laws. How do you think the principle of accountability, or privacy by design, could be useful in curbing the practices of these super organisations? The challenge will be to define more clearly when EU law applies. Facebook and Google now have establishments in the EU, so this will place them under EU jurisdiction applying the set of rights and obligations, but regardless of establishments, there will be criteria proposed that EU jurisdiction will also be attached when services are provided within the EU, regardless from where, for instance using the internet. Thus, this will allow for EU law to apply when services are provided to European citizens. Controllers will have to follow the methodology and the principle of privacy by design before even delivering their services. This is part of the burden of proof that will be placed on data controllers.
European Data Protection Supervisor, Peter Hustinx.

An unnoticed - but crucial - development summit

By Manuel Manrique
The Fourth High Level Forum on Aid Effectiveness held in Busan, Korea,probably passed unnoticed for many,in a week when the EUUS summit, the Durban climate conference and elections in Egypt and Congo all competed for attention. But Busan and its outcomes offer valuable insights not only for development practitioners. The summit showed how the lack of political leadership prevented the EU from playing the leading global role that it should. The reordering of the international system generated by the Wests economic crisis and the rise of emerging countries has radically affected development cooperation.Non-traditional state donors (Brazil, China, India), private foundations and new cooperation modalities have put into question a decades-old model built on North-South aid transfers. According to estimates, OECD-DAC official development assistance now accounts for 70 per cent of total global aid and is decreasing rapidly.This explains the shift from the technical Paris Declaration (2005), focused on how donors can provide aid more effectively,to Busans Global Partnership for Effective Development Cooperation'. The road from Paris to Busan has tried to make the agenda more inclusive and avoid a split between traditional and new donors (stretching the tent to make everyone fit in). This is needed to prevent the agenda from becoming irrelevant,but it has led to a dilution in commitments, which risks harming less protected countries and populations. Despite the deliberately vague language of the Busan outcome document, intended to keep non-DAC donors in, China, Brazil and India threatened to abandon negotiations and finally only endorsed the new Global Partnerships principles,not specific commitments. The price to pay is an agreement that lacks not only a concrete timetable,but more importantly,objectives and measurable indicators. However, progress has been made on the areas of transparency (the US and Canada made headlines by announcing their support for the International Aid Transparency Initiative) and country ownership (developing countries are expected to lead the promotion of frameworks for external assistance based on their countries needs and the results obtained). Also important was the inclusion of a new deal for fragile states, led by the G7+ group, which includes 19 of the most vulnerable countries in the world. Nonetheless, there was a lack of leadership to reach a more substantial agreement.The EU, as the worlds most important donor, could have provided the much-needed push, but failed to do so. The EU Common Position for the forum, agreed only two weeks before Busan, was disappointing shying away from clear commitments on untied aid,transparency and democratic conditionality and prevented a stronger European role. There is little consolation in being above average in implementing the Paris commitments,when in fact only one out of thirteen indicators has been met. Held back by internal fragmentation and hiding behind the need for inclusion, the EU adopted an underwhelming position.The broad Busan principles could have been accompanied by an extra commitment from the Commission and member states to implement the Paris Declaration by 2015.This would have placed the EU as a global reference on the new development scenario. Busan provides lessons on two levels.The new and inclusive Global Partnership for Effective Development Cooperation is a welcome step forward, even if indicators and targets for monitoring, working arrangements and membership still have to be agreed by June 2012. All of which is no excuse for the absence of measurable commitments from donors like the EU. Those that will suffer most from the overstretched tent are the most vulnerable: low-income countries and the worlds poor. Busan is also another example of the EU punching below its weight. Development work is certainly about plateaus, not summits, but these events do present an opportunity to show world-class leadership, or at least make the headlines. Because of its internal fragmentation and the lack of political leadership, the EU failed to leave a visible mark even on a field on which it has climbed the highest. Manuel Manrique is a junior researcher at FRIDE.

The notion of accountability not only means responsibility but also the rendering of accounts, making sure that we can draw conclusions. We need to have incentives, but not only negative incentives, such as liabilities and sanctions, but also strong positive incentives, which can lead companies to healthy competition. Companies investing in privacy and making this transparent should be rewarded. As for Facebook, it has been very successful throughout the world, but it has not sufficiently included privacy and data protection considerations in its model, so they also need to scale up their efforts. One of the changes proposed for the reform of the Directive will allow European citizens to have their data deleted when requested. How can a data protection authority guarantee that the data controllers will actually fulfil this request when we know that the data can be copied and transferred instantly across the globe? By applying the right to be forgotten, the burden of proof and the need for privacy by design. Thus, a controller needs to provide effective mechanisms, such as a right to exit and the right to delete. Second, it also needs to present evidence that the data has been deleted. If the answer received is fraudulent, then there will be heavy sanctions. For the right to be deleted, the story begins by defining concrete time limits and building the case why data needs to be collected in the first place. Then it progresses to using all the elements in the present framework for finality. What we will see is that all the mechanisms used to bring finality, in the strictest sense, will be shifted to exercising the right to be deleted. So, that will mean that if you think you need it to keep the data, prove it. You have the burden of proof. Under the new Passenger Name Record (PNR) data transfer agreement, the Department of Homeland Security (DHS) will be able to store identifying information about passengers for six months after it is sent, and then and extra 15 years. Do you think that the new agreement still vi-

olates fundamental rights of passengers and could there be any improvement on it? To begin, I'm not so happy with the outcome. I see some improvements in the new agreement, but I also see deficiencies and some areas where there is a lack of balance...I stand to be convinced that the U.S. time limits are necessary for keeping data about passengers. We may not be able to get what we want with the U.S., but we should not say something is beautiful if it is not. Even the Parliament seems to have a problem with it. PNR is part of the law enforcement cooperation with the U.S. However, this is still a problematic area. But, there are signs that the Obama administration would like to see more general legislation proposed, and is moving more in the direction of European-style legislation. The Federal Trade Commission has also shown that they can be very strong in the enforcement of consumer protection laws. However, the bottom line is that all the talks and signals still need to be delivered by the U.S. What can we expect from you in the next two and a half years of your term? The biggest subject in consultation is the review of the Directive. I hope that at the end of my mandate, that it is in good shape. Integrating privacy into policy and ongoing integration are important for me. Consistency among the supervisory authorities is another issue I would like to see continue. If we bring in uniform rules, this will also mean that we need to stand steadfast in the way we supervise this. The EDPS will play a role in this context, and we are among friends, so there is no such thing as a 'directed' approach, but we will be developing this closer cooperation over the years. However, I will also like to develop closer cooperation with non-EU regulators. We are already developing arrangements for enforcement cooperation with Australia, Canada, Hong Kong, and the U.S. and by 2014, I expect to see the results of these efforts.This will lead to a more pragmatic and realistic approach that privacy is not only in the books but also on the ground.

Page 8 | New Europe December 4 - 10, 2011

NEW EUROPE

ANALYSIS
New Europe content partner

OSCE

The Knowledge Government

By Francisco Jaime Quesado
We live the time of the Knowledge Government. The strategical reinvention of the Government, as Platform of Centrality where the covergance of the dynamics of qualification of the different social actors, demands for a new order that cannot be solved only by single operative specifications associated with the so-called EGovernment or organizational adjustments associated to specific arrangements in the different Public Departments. If it is important, as Francis Fukuyama does not stop to claim, that Civil Society is able to carry out a dynamic role of leadership in the change processes, there is no doubt that the Government must be able to conduct and control such a challenge. The Government exists to serve the Citizens and they must understand this as a sense of urgency in a permanent Contract of Trust. When David Osborne speaks about the increasing opportunity and necessity of putting in the agenda the Reinvention of Government, he is clearly giving evidence to one of the central elements of the Competitive Modernity of Europe. It matters more than ever to ensure the reposition of the Central Government as enabler of the organization and control of a New Europe and to use to advantage of the qualifying dimensions of knowledge, innovation and competitiveness as attributes capable of giving citizens a new confidence in Europe. In the New Global Economy and Innovation Society, the Knowledge Government has a central role to play towards a permanent insatisfaction with the creation of value and a focus on creativity. In a time of change, the Government cant wait. The Government in Europe must confirm itself as an enabler actor in a very traditional system, introducing in the society and in the economy a capital of trust and innovation that is essential to ensure a central leadership in the Europe of Lisbon, the effective platform for the strategic competetiveness for the future. The Government in Europe should be more and more a global actor, capable of driving to the European social matrix a unique dynamic of knowledge building and selling it as a mobile asset on the global market. To ensure this objective, the Government must aggregate in an innovative way the commitment of the so-called three T Technology, Talents and Tolerance. These are in fact the drivers of change for the Government in Europe and civil society must be able to understand this new challenge and address effective answers to the different stakeholders of the system. David Osborne is right in insisting in the actuality and importance of the challenge of the Reinvention of the Government. It is essential in the modern Innovation Society to consolidate strategical mechanisms that make us believe. This is the role of the Government. Government is today an attitude of promotion and qualification of the Active Citizenship. It matters to the Government to be excellent. It matters to the State to be an Operator of Modernity. Thats why, never as now the Reinvention of the Government is a challenge of one for all. The Reinvention of the Government is in a large sense the Reinvention of our Society. Francisco Jaime Quesado is the General Manager of the Innovation and Knowledge Society in Portugal, a public agency with the mission of coordinating the policies for Information Society and mobilizing it through dissemination, qualification and research activities. It operates within the Ministry of Science, Technology and Higher Education

OSCEs steady approach to security is now needed more than ever

OSCE participants pose for a family picture during the Organization for Security and Cooperation in Europe (OSCE) summit in Astana, Kazakhstan 01 December 2010. World leaders in Astana address security challenges at the meeting. |EPA/VLADIMIR RODIONOV/RIA NOVOSTI/KREMLIN POOL

By Audronius Aubalis
On Tuesday I will welcome to Vilnius the foreign ministers of the 56 participating States of the Organization for Security and Co-operation in Europe (OSCE) a community of shared values spanning North America, Europe, the South Caucasus and Central Asia as well as with our 12 partner countries in the southern Mediterranean, Asia and Australia. Over two days, we will discuss our shared security priorities. Last year our leaders reaffirmed a common vision of a free, democratic, common and indivisible Euro-Atlantic and Eurasian security community based on shared values, agreed commitments and common goals. This vision is ambitious. To build the trust needed to confront successfully the challenges we share we must openly discuss our differences and remain patiently and resolutely engaged in addressing both long standing and newly arising threats to our states and societies. In 2011, as Chair of the OSCE, Lithuania has helped our participating States take pragmatic and meaningful steps to reform and strengthen our institutions and practices in line with OSCE commitments. Just last week in Vilnius, we restarted, after a near sixyear hiatus, the stalled peace negotiations over Transniestria. This shows the dividends that patience, persistance and sustained preventative diplomacy can bring. We have redoubled our collective efforts to tackle transnational threats such organized crime, terrorism, trafficking of drugs, arms and people, and cyber attacks. Enhanced international co-operation is the only option if we are to keep a step ahead of those who threaten the security and integrity of our

society with ever-more sophisticated challenges. The price of neglect is too high. Throughout our Chairmanship, our focus has been not just on building stronger relations among states, but also on enhancing trust between states and their citizens. We have promoted freedom of expression, recognizing the fundamental role that the media play in safeguarding our freedoms and ensuring respect for democratic values. We have paid particular attention to the safety of journalists, and pushed to allow digital media to develop freely and in a pluralistic way. We have held several high-level events aimed at combating the stubbornly entrenched intolerance against ethnic minorities and religious groups which regrettably is still present in many of our lands. Minority groups are often the first to suffer in times of crisis. Less dramatic, but perhaps more consequential has been the work of our special Institutions and our 16 field presences. Co-operation on the ground, between our field presences and government agencies, non-governmental organizations, media and engaged citizens at all levels lays the foundations for secure democratic institutions, open, transparent communication and governance, and offers a genuine, comprehensive basis for security, in all dimensions of our societies. At the Astana Summit last year, our leaders recognized that the security of our region is inextricably linked with that of our neighbours, including Afghanistan and other states in Asia and the southern Mediterranean. The dramatic events in the Middle East and North Africa, which recall my own countrys struggle for independence and democracy two decades ago, are a reminder of peoples aspirations

to live freely. When I visited Tunisia earlier this year, I was reminded where Lithuania was twenty years ago as it took its first steps toward re-independence, and how much needed to be done. I am also reminded how important it was to have the encouragement and support of more mature democratic friends and neighbors, particularly those of the Nordic region to which Lithuania now belongs. Just as our journey took time, we must expect that transition in the southern Mediterranean will be a long process that will require the support of international partners to state institutions and civil society alike. We continue to develop and share best practices among and between all of the participating States. We are prepared to share our experience and practices with our partners and learn from them as well in the process. At the same time, the OSCEs efforts to build the lawenforcement capacities of its partner Afghanistan, and to promote societal resilience throughout Central Asia, are taking on an increasing urgency against the backdrop of the coming military drawdown. With the challenges posed by the ongoing financial crisis and the rapid pace of change in the Middle East and North Africa, now is not the time to take our eye off of unfinished business at home or beyond our own borders. We must show resolve and use our collective strength to make our shared geographic space a genuine security community. Audronius Aubalis is the Foreign Minister of Lithuania and the Chairpersonin-Office of the Organization for Security and Co-operation in Europe in 2011.

ECONOMY

ANALYSIS

NEW EUROPE

New Europe | Page 9 December 4 - 10, 2011

By Ralph T. Niemeyer

The snowball becomes an avalanche

credit lines, and the same applies to virtually all financial institutions, even Bank of America and Deutsche Bank AG. Todays global financial market is nothing but a gigantic snowball system. What makes it worse is the fact that all measurements taken since the beginning of the crisis by politians and central banks have been governed by a single goal, namely to keep the banks' money-printing machinery of the banks going. As long as this is achieved the system is alive and kicking, but sooner or later the snowball becomes an avalanche and takes up speed. The reason why this has not happened earlier is the fact that the generating of virtual funds nowadays is not countered by any objective limits, which is also thanks to MiFID and other deregulations that our democratically elected leaders, the Commission and majority of MEPs have pushed through over the past two decades. Money that evaporates from the virtual Off of hard-drives doesnt require any real economic growth in order to grow as there is no underlying economic activity, such as the buying or selling of a real-life good or service, but only a mouse-click by an 'investment' banker. Thats why it can grow much faster than the turnover of manufacturing industries. Nevertheless, these virtual funds do have an effect on the real economy. The volume of global financial transactions today is 73.5 times higher than the worlds manufacturing GDP - since 1990, this relation has been logged in 15.3 times. Since unimaginably more virtual dollars and euro are vagabonding over financial markets than would be needed for conducting world trade, it is no longer a countrys trade in goods and services that determines the development of a country's exchange rate, but decisions made by currency traders. It is only because of its omnipotent money-printing machinery that the financial industry can supply the tools for the merger and takeover battles of major global real economy industries. At the beginning of the 1980s, it would have been unthinkable to have seen such a takeover ,simply because nobody would have had such incredible amounts of money available in order to swallow Mannesmann or Chrysler. Whoever can move hundreds of billions with a mouse-click is of course also able to manipulate the corn or wheat or rice prices on world markets. Institutional investors had raised profits by INDEX Trading and Futures in the elementary food segment of $13 billion in 2003 to $260bn in 2008. It is as if a rich speculator passed by a grocery store in front of which a queue of hungry people were lining up to buy rice and the nbought up all rice avail-

EVERYTHING BUT ARMS

Conservatives usually uphold tradition, culture and values but, if Humanism and Classicismare really in their hearts, why could they allow such mega-scams run our economies and eventually drive us all over the cliff? Johann Wolfgang von Goethe prophesised the threat to culture, civilisation and humanity that resulted from an entirely commercialised society and he strictly opposed an economic system in which human dignity had to be justified by economic feasibility. Nevertheless, Goethe saw the enormous productive capacities of a profitorientated economy and its benefits but he was wise enough to think of a postcapitalistic society while capitalism was still seeking to establish itself. In sharp contrast to that philosophy, the European Commission and Council still refuse to tackle the underlying problem. We are not living through a financial crisis, this is only the symptom of the wrong priorities being put forward by the institutions as well as member-state governments. It was our elected leaders who for decades have deregulated and liberalised not only the financial markets but the entire economy. The Markets in Financial Services Directive (MIFID) that was expected to bring about a common good standard for all of the EU has been the greatest failure in the Brussels lobby culture, as it was introduced just months before the first chokes of the financial motor could be heard on 11 August 2007. It was the will of the Commission as well as a majority of MEPs to introduce this directive despite the malignant effects that its critiques cited it would have on the financial markets. Its introduction ended in disaster and most of deregulations that were to come with it are now either revoked or simply obsolete as time has passed on. But, although the Brussels lobby-machinery had suffered somewhat with this setback, it is not even considering giving up pushing for a continuation of the 'snowball system' that the worlds economy is resting on. The OECD warned recently that a major recession was at hand, but nobody seems to understand that in order to avoid what would in fact be a depression, the snowball system must be finished with, once and for all. The USs sub-prime mortgage market, from its very beginnings, relied on the repayment abilities of people who were drowning in debt and who could only keep up payments on principal and interest if they were handed new lines of credit. Also, there wouldnt be any state becoming insolvent if the refinancing of old loans was serviced by

able, to resell it at a 50% higher price, making a very tidy profit as the would people have to buy it anyway, at whatever price. Speculation has always existed, but it was mainly with commercial papers and there have never been so few players who could move such huge amounts just by themselves and thus push the market in one direction or the other. In other words, there has never been a single speculator who was able to buy up the entire grocery store. Goethes Faust dealt with the threat that capitalism posed to the old structures, both destructively and progressively - singularly destructive was the paper money by which Mephisto pleases the emperor of the rotten Reich, but which eventually declines rapidly because no investments are being made while only the decadent luxury of the upper-classes is financed by such artificially created wealth. Who would not draw a parallel with our present casino capitalism? But Faust is also progressive in that as he acquires land that he makes useable by machines and modern technology, he advances as an entrepreneur par excellence, but also as a barbarian who cannot control his desire to accumulate ever-more wealth. As an economic pariah, Faust doesnt need Mephisto any longer as his brutality is driven by greed and not productivity. Goethe had understood long before Karl Marx that capitalism is not only about trade in a free market but always comes with greed, barbarism, war and piracy. There is no doubt that Johann Wolfgang von Goethe would be disgusted with our present economic system, in which more and more productivity is pushed aside and where creativity and innovation are replaced by profit maximisation, greed and useless financial transactions that degrade democratically elected politicians into instruments in a system that ultimately destroys wealth and society. Todays society is behaving exactly as described in the first Act of Faust, in which everybody fights everybody else while Mephisto miraculously creates the paper-money scam. Goethe never accepted that we human beings were bound to neglect our most honourable attributes such as love, dignity and beauty while enhancing our darkest sides from greed to egoism and social ignorance. Whoever read and understood Goethe has to feel that the system cannot remain as it is and that although a different world may not be possible, a different economic system would be. Ralph T. Niemeyer is the editor-inchief of EU Chronicle (editor@euchronicle.eu).

Law-making in the 21st century

By Cillian Donnelly
Bideford town council likes to pray before meetings. The local authority, situated in Devonshire south-west England, and has twice voted to keep the practice of beginning meetings with prayers, something which Clive Bone has objected to; the atheist councillor is attempting to have the practice stopped by the courts, through the National Secular Society (NSS), claiming it is not appropriate in modern Britain. The NSS is seeking a judicial review of the councils practice, claiming it is a violation of existing human rights legislation, principally articles 9 and 14 of the European Convention on Human Rights, which upholds the right to freedom of though, conscience and religion for nonbelievers. Mayor Andrew Powell has dismissed proceedings as an overreaction. Lawyers are claiming non-believers are being discriminated against unjustly. Bone claims he was disadvantaged and embarrassed by the prayer sessions, the second part of which is a personal matter, although one which can no doubt be empathised with by a great many people, the first, something of an odd claim, unless he is suggesting a kind of Christian-masonic arrangement whereby all dissenters suddenly, inexplicably find themselves missing out seemingly reachable goals at the expense of their lesser, praying colleagues. Thankfully, no such conspiratorial claims have been made so far. Britain, despite its current rposition as chair of the Council of Europe, is not too enamoured with the European Convention on human Rights, or indeed any human rights law that comes from Brussels (sic). Prime Minister David Cameron, as well as Foreign Minister William Hague, has suggested clawing back some rights insisted upon by the Strasbourg court, and withdrawing from the convention in preparation for the drafting of a homegrown bill of rights, one that will enshrine all those fusty old concepts of individual liberty, one that warms the cockles of British hearts. Freedom to religious worship is a fundamental right, of course, but, as the NSS are asking, is it one that should be separate from public life? Their argument is not about the rights and wrongs of religious worship, but about its place in the legislative chamber. The NSS is claiming many councils across the country include prayers as part of the structure of their formal meetings; if this is correct, it is a worrying trend for secularists. By removing religion for the structure of public life, lawmaking is salvaged from interpretations other than those of precedence or jurisprudence and the like. It is law based on legal reasoning, not to the utmost example, the literal reading of a religious text. Outright theocracy might make an unlikely system in modern Europe, but it is still feared as much as any other kind of autocracy. Will the current UK government get to formalise its cherished bill of rights? If so, will it make the bold decision to tolerate no religious ceremony in public life? With the monarch (it can be safely assumed that institution will not be jettisoned any time soon) also serving as Supreme Governor of the Church of England, it may not prove to be exactly the case. But time must surely be up for the kind of antiquated practice that Bideford council seem to want to continue. If that bill of rights is to ever emerge, that should be among the first things to go. It will not abolish or diminish religious life, but allow law makers of all creeds and beliefs, to engage in their duty as it should be practised, with unburdened clarity. CDonnelly@NEurope.eu

Page 10 | New Europe December 4 - 10, 2011

NEW EUROPE

ANALYSIS
POLITICS

The arc of chaos

By Takis Hadjigeorgiou
I will begin with a quick clarification regarding the title, which is in effect a paraphrase of the well-known phrase the arc of time meaning that time moves in only one direction: forwards. In the same sense, therefore, chaos too has only one direction, and only one destination: more chaos. I believe, therefore that if a leadership fails to keep a hold on a situation in due time, and relies on the logic of theres always tomorrow or even worse, allows time to slip away with a carefree well take things as they come, it will come dangerously close to the fringes of chaos, with a real possibility of reaching a point of no return. Chaos breeds chaos. Leadership means timely and correct decisions. Anything else is nonsense. Currently (or rather, for quite some time now) the whole of Europe has been suffering from a lack of real leadership. And when there is no leadership the reins are seized in the past by the military- and now by the markets. The entire leadership of Europe, and in particular the leaders of the larger member states, together with the leadership of Greece, either failed to diagnose the magnitude of the problem or trembled at the idea of its magnitude. And so they just allowed time to slip away while they waited for a miracle which of course never came. The problem (seen from their point of view) lay in the immense profits of a handful of people, the inability of the states to control this tiny minority which, like a fairy tale ogre, drank the citys entire water supply dry; an inability, in effect, to ensure a fair distribution of the national wealth, and a total inability to control either the turn out to be the worst development of all. As the economy goes down, it takes our humanity down with it. It is not only the European Union which will fail, but with it the will and belief that all together we can do better, will also fail. The Northerners accuse the south (that is to say, us) of taking away their livelihood and we accuse the north of bleeding the poorer states dry. Under these conditions, how is it possible for the vision for a truly better Europe ever to be reborn? A Europe more united and more based on equality of peoples and nations? In America for example, the states feel they are losing their autonomy, but at the same time they are ceding powers to Washington. And Washington is transferring funds from Manhattan to Mississippi! I am no longer optimistic. Europe has wasted too much time, and through the European Union, it has also missed its goal. Whatever happens from now on will be interpreted as imposition. And imposition, particularly in this unbelievably negative climate, leads to conflict. And conflict will bring us closer to chaos. Occasionally, a new and true state of affairs is born out of conflict. But for this to happen, the forces which stand for this new light must be in a position to spread the word to the peoples of Europe. I am afraid that the progressive forces of this continent which believe in a new and better world, have not yet found a way to communicate substantively and profoundly with the citizens of Europe. Takis Hadjigeorgiou, takiscy@cytanet.com.cy , is a Member of the European Parliament and Vice-President of the Confederal Group of the European United Left - Nordic Green Left (GUE/NGL)

Takis Hadjigeorgiou

black economy or the false economy; an inability of the rule of law to intervene wisely when the markets were being plundered. The truth is that we have reached a point where all fall silent at the mention of the word market. That is the thing about markets: if you allow them to grow dangerously out of control, they will eat you alive! Now that we have reached this state of affairs as a result of the failure of the economies, the citizens (the Peoples) are

losing their faith in alliances, they are losing their faith in solidarity, they are losing faith in the European edifice, and in the end they are choosing to entrench themselves, they fear contact with the Others, and are deciding that the best thing would be for everyone to stay in their own countries. Nothing could be more dangerous than this. Unfortunately, the collapse of the economies is accompanied by a loss of faith in certain universal values. And this might

UNDP

Greek company in Mauritius benets from UNDP to eliminate POPs and DDTs
On 25 November, the Minister of Environment of Mauritius Devarand Virahsawmy, together with other representatives, visited Pamplemousses, the site where the Greek company, Environmental Protection Engineering S.A., performs its services for the restriction and elimination of Persistent Organic Pollutants (POPs) and DDTs found in contaminated transformers from Mauritius. This is part of the 'Sustainable Management of POPS in Mauritius' project, operating under the auspices of the United Nations Development Programme (UNDP). The UNDP Resident Representative Leyla Tegmo-Reddy and the representative of Environmental Protection Engineering S.A. Athanasios Polychronopoulos initially informed Virahsawmy of the progress of the project. Polychronopoulos said: All the works are being executed in conformity with international law and with respect to the environment and the people of Mauritius. After the briefing, Virahsawmy seemed relieved that this project was already underway. Later, he, along with the Technical Director of the company, Dimitrios Tiniakos, pointed out the health and safety measures that had been taken to commence the project in an interview on National TV channel. Representatives from the Ministry of Health also visited the site and discussed various space issues concerning the project.

NEW EUROPE

New Europe | Page 11 December 4 - 10, 2011

EU WORLD
YOUTH

Educating youth benets us all

CONSTRUCTIVE AMBIGUITY

Keep the dead ag ying

By Andy Carling
Last week, I bowed to the inevitable and chose the warm embrace of insanity. After watching the EU fiddle while the union burns and the strange atmosphere in Brussels as people Keep calm and carry on as though nothing was happening, as though their precious was just tickety-boo, insanity seemed to be the sensible option. If Ive learned anything over the last six months, it is that avoiding reality is a European Value. The European Socialists were meeting over the weekend in Brussels. They should be full of fire, with half a billion people facing brutal austerity and a lack of leadership in the EU. But no. I walked past one room where a group of serious people were seriously discussing the serious topic of How can we unite the EU to fight climate change? Ticks a lot of left boxes, doesnt it. But in times when the EU cant unite to save itself, the debate was utterly pointless. As one delegate said to me, if the euro is failing, all this, pointing at the conference agenda, is irrelevant. All of it. In fact, the event deemed almost designed to avoid discussing the one important issue of the day. Its the economy, stupid. The convention had the slightly clumsy name of Re:new although Re:peat seemed more appropriate. Its as if the left have given up and the red badge of courage has become the white flag of surrender. Still, at least theyre looking like theyre going to have a candidate for Commission President next time. So, where do we look for alternatives? There are extremists who are eagerly awaiting collapse and meltdown, knowing that in sane times the voters would never chose their toxic parties, and they will take the fullest advantage. So is that it: A choice between the same old, same old, parties or the nutcase fringe? Perhaps. As Harold MacMillan might say, The wind of change is blowing through this continent. This wind has come from the Sahel. It is too early to see what the highly autonomous Occupy movement will become. Their tent cities may go away (assisted by riot police), but their central claim is that you cant kill an idea. The idea, that we should create a fairer world, has resonated in a way that no political party has, or dare I say it, could resonate. Political parties seem like lumbering beasts, almost dinosaurs. People no longer have faith in them, no longer join them and, increasingly, dont vote for them. If they had a vision for Europe, one that people could trust and believe in, the European Parliament elections would have a turnout rate far, far beyond their current level. Is there anything that can be done? A couple of suggestions, firstly, while we sing the praises of consensus, it leads to an often unattractive compromise or the groups doing little deals with each other behind the scenes. Each tawdry deal distances the deputies from the public. Secondly, we need to tie in the MEPs with national governments, creating a link between Brussels (lets not mention Strasbourg right now) and national parliaments. Neither is going to happen, so well carry on doing the same thing, hoping for a different outcome, the hallmark of insanity. ACarling@NEurope.eu

A man dressed in a suit depicting 'Mr. Burns' from the US cartoon 'The Simpsons' saying 'Impoverish education and improve the nation's future' in Portuguese takes part a general strike against the government's austerity measures. This is the opposite of what should happen with education. | EPA/MIGUEL A. LOPES

By Pablo Zalba Bidegain, MEP

"Education is the most powerful weapon you can use to change the world". On this point, I completely agree with Nelson Mandela. Education is probably the most important key for development and welfare. We live in a world of continuous changes. In order to keep up with and make the most of them, a solid structure is crucial, and this structure is built upon education. We are suffering one of the worst crises in our history, but with the belief that we can tackle it together. Unity is the only way out. Europe is becoming an old continent and we have to seek a balance between young and old people. This is why education must be general and open to everybody for everybody, and flexible to be adapted it to people's individual needs and skills. When we talk about education, we should mean educating the person as a whole, and not just academically. Many countries are making cuts in different areas in order to solve their debts. The responsibility of a government lies in looking ahead to the long-term, rather than remaining fixated on the short-term and on election results. Otherwise, we are just promoting a future down term. To avoid the most severe cuts, especially in education, health and pensions, we have to make our citizens aware of the current economic situation. This would be the first step to make society engage and to understand the difficult measures that we have to take to recover our economies. As I said to start with, education

and youth are going to be vital not only for the economic recovery, but also for our future. This globalised world needs its actors to be competitive and these actors must be wellprepared on every level. We are working on several instruments to improve competitiveness, such as Free Trade Agreements and regional integration. For the future, our first priority should be to design a competitive, complete and flexible education policy. The authority of teachers, the responsibility a family has for education, theory and practice must all combine for maximum impact. A teacher's authority is the main tool for discipline, learning to live in harmony knowledge, which brings us unique opportunities. However, family education helps us to form feelings and values and teaches us how to apply theory. All together must awake on us our vocation and the spirit of self-improvement. Money is not the main factor when it comes to a well-rounded education, even it is one of its keys. A good and coherent educational policy must be outlined in order to improve our future. How is the European Union trying to improve education and, as a result, the training of our youth? Facilities and programmes are being implemented by the EU. From the European Parliament, we are fostering our member States to harmonise and react together in order to boost this effort. One of the most interesting activities that is being promoted by the European Union is the EU-China Year of Youth. During this year, Chinese and European citizens and au-

thorities have tried to promote and deepen our partnership, working to create a solid base upon which we can build. We are encouraging intercultural dialogue and development, strengthening mutual understanding and ensuring tools for cooperation. This project wants to become an example of what youth, the future of our societies, can achieve together. Indeed, 2011 is also the European Year of Volunteering, coinciding with the 10th anniversary of the International Year of Volunteering. What does volunteering have in common with youth? Voluntary work activity must become an important part of education. These activities allow us to meet and to understand the different realities that coexist in our interdependent world. The main advantage is that volunteering can begin, and must begin, in any environment, which helps us analyse who we are and where we live. It offers a huge range of proposals which, one or more, could fit with everybody's skills. Thus volunteering is helpful for ourselves too, as well as the obvious benefits to others in our community. Even a small contribution can change someone's life. Volunteering completes our education and gives opportunities to everybody. An international programme open to young and not so young people, similar to Erasmus but applied to the different projects that the Union and its member States have all over the world, could boost this educational weapon. For our youth and future, it is the moment for education to be the ship that takes to the sea, weighs anchor, hoists its sails and seeks downwind..

Page 12 |New Europe December 4 - 10, 2011

NEW EUROPE

EU WORLD
HUMAN RIGHTS

Fundamental inequality is at the heart of domestic violence

By Cillian Donnelly
The lack of equality that still exists between women and men continues to be the root cause of serious incidents of domestic and gender-related violence, a major conference on fighting domestic violence has been told. The starting point is that violence is a human rights violation, a concept hat has very important connotations, Maud de Boer-Buquiccio, Deputy Secretary-General of the Council of Europe (CoE), said at the Effective Ways to Prevent and Combat Violence Against Women and Domestic Violence conference, held in Bratislava on 29 November. The conference was a joint collaboration between the CoE, the Slovak Justice Ministry and Norway Grants, which provides 20m in support to combat gender-based violence for the period 2009-2014 through dedicated programmes in various EU member states. It also supports the NGO Funds, an initiative worth 140m aimed at providing funding for civil society organisations that play a role in combating violence against women. With human rights, she said, we tend to think of it being the responsibility of the state, so with domestic violence, it is though of as something between private citizens, but the state does have a right to protect. knowledge in key sectors, a lack of procedures, low penalties, a continued ambivalence about looking into private lives and poor provision of services all add to this complex situation. Like many speakers throughout the day, she stressed the importance of awareness-raising, and the need to alter public perceptions of domestic violence. social transformation, she said, is a crucial part of it. According to Astri Aas-Hansen, State Secretary at the Norwegian Ministry of Justice and the Police, violence remains widespread at all levels of society, in all countries of the world. More women are effected by domestic violence, she says, than are effected by cancer, motor accidents, war and malaria. This is not just a womens issue, it is a human issue, a global issue. We need to develop a further approach, she said, adding that Norways position on this is clear: no religion, no tradition can be used as an excuse for violence. The Norwegian government is currently preparing a survey, to be issued in 2012, that aims to develop a clearer picture of the situation in the country, which, she said, will hopefully lead to the development of better prevention strategies. Combating domestic violence and violence against women, she said, should be our war on terror.

Ambassador Ingrid Schulerud from the Norwegian Ministry of Foreign Affairs launches the 20 million Norway Grants support to combating domestic and gender-based violence, in Bratislava, Slovakia, on 29 November.

Lack of equality is the root of the problem, and also a consequence of violence towards women. Earlier in the day, she spoke about the Convention on Preventing and Combating Violence Against Women and Domestic Violence, a new Council of Europe instrument aimed at combating violence against women. About one-third of women worldwide suffer some form of serious abuse, she said. Domestic violence is the largest form of abuse worldwide. How can we accept his fundamental threat to women, and to society as a whole?

She said that a zero tolerance approach to combating violence is needed, and added that the convention provides, for the first time, a real tool for change. It is the first internationally binding agreement in Europe, and the most far-reaching legal text [on domestic violence] in the world. The convention, she said, has two purposes, to bring a whole new approach to victim safety, and to seek to change hearts and minds. For this, she said, taboos will have to be broken, with awareness-raising also being an important part of the con-

vention. Adolescents, she said, should be a particular target group for education on the matter, while, on another level, extensive training should be a matter of course for national police and judicial services. Rashida Manjoo, the United Nations Special Rapporteur on Violence against Women also acknowledged the convention as a landmark that understood the complex interplay of social and family factors that underpins domestic violence. According to Manjoo, inadequacies in prosecution, reporting procedures, a lack of

TRANSPARENCY

Citizens have the right to know

By Anneli Jtteenmki
Europe is facing its biggest crisis since the Second World War. Not only eurozone, but also the whole European Union is in danger. According to the latest Eurobarometer75 survey citizens have less and less trust in European institutions. This is worrying. The EU cannot succeed in the longer term without the trust of its citizens. Citizens are not sure if European leaders are able to solve the economical crisis. But behind scenes there are also much more worries. One of the biggest problems in the EU Institutions is that they are lacking transparency. Without transparency, democracy is impossible. Transparency requires that the decisions are open to public scrutiny and that the public has a right to access such information. Unfortunately, the European Union can hardly brag about its transparency. The Regulation 1049/2001 on access to the EU documents needs to be changed, but so do attitudes. New Europe published an important article on the access to the EU documents in its number 963 (Nov 27 - Dec 3, page 7). Rapporteur Michael Cashman (UK, S&D) was interviewed with whom I have had great pleasure to work. As was mentioned in the article, the civil liberties committee (LIBE) of European Parliament voted on the public access to documents on the 23rd of November. The committee passed the report through by 33 votes to 17, with two abstentions. Only EPP Group voted against. The whole Parliament is about to vote on the report in December. However, EPP would like to postpone the vote, since the Group is not in favour of more access to documents. The position of EPP is in contradiction with the Treaty of Lisbon. It has brought the importance of transparency to a new level. The article 10/TEU, Paragraph 3 states that: "Every citizen shall have the right to participate in the democratic life of the Union. Decisions shall be taken as openly and as closely as possible to the citizen". The Treaty of Lisbon has also enlarged the scope of the Regulation 1049/2001 on access to the EU documents. Previously the Treaty demanded transparency only from the Parliament, Council, and Commission. Now transparency applies not only to the EU Institutions but also to the bodies, offices, and agencies of the EU. Additionally, the Treaty of Lisbon made the Charter of Fundamental Rights legally binding. Its article 42 emphasises the importance of the principle of publicity. Therefore, it should be clear that citizens have the right to know how the legislation is made. Contrary to the commission, the LIBE has given strong support for the European Court of Justice (ECJ) landmark ruling on the so-called Turco case. In this judgment, the ECJ called on the Council to strengthen the democratic right of European citizens to scrutinise the information which has formed the basis of a legislative act. This would work by giving access to the documents (such as the legal service opinions) which have been excluded in order to protect the institutions decision-making process. I agree with the ECJ that such a justification may no longer be invoked to outweigh the overriding principle ensuring democratic control by the EU citizens of the EU legislative process. I am pleased that the LIBE is proposing a broader definition for the documents than what the commission was originally proposing. The broad definition of a document includes any data content whatever its medium". The Commissions proposal would have weakened the basic structure of the transparency regulation. It means, firstly, the broad definition of documents. And secondly, the requirement that exceptions from the rule of transparency are based on a clearly delimited in case judgments. From my point of view it is clear that the proposal to narrow the definition of documents and other proposals to weaken transparency would be incompatible with the Treaty of Lisbon. I hope that the Cashman/Jtteenmki report approved by LIBE committee will serve as a basis for a common position to be reached under Danish EU presidency in the first half of 2012. In democracy the citizens simply have the right to know. Anneli Jtteenmki is a Member of European Parliament (FIN, ALDE), Co-Rapporteur on Access to the EU Documents,VicePresident of ALDE Group

NEW EUROPE

New Europe | Page 13 December 4 - 10, 2011

EU WORLD
POLITICS

Iran resistance leaders urge EU to prevent massacre

The National Council of Resistance of Iran along with MEPs are urging the EU foreign ministers to take action against Iraq's attempts to close an Iranian camp, home to more than 3,000 dissidents. The EU foreign ministers are scheduled to meet Thursday in Brussels and the scheduled 31 December closing of Camp Ashraf is on the agenda for members to discuss. Iraqi Prime Minister Nouri alMaliki has ordered the relocation of the camps residents. Camp Ashraf is home to over 3,000 Iranians who fled to Iraq. The camp's residents are opposed to the current Iranian regime and are working to overthrow the current government. The Iran resistance council has said the closure of the camp is a front for al-Maliki to massacre the Iranian dissidents. President-elect of the National Council of Resistance of Iran Maryam Rajavi urged the foreign ministers to condemn al-Maliki's actions and call on the United Nations to declare the camp's residents as refugees. I would like to tell the leaders of the European Union that you have the power and the means to avert a definite humanitarian catastrophe, Rajavi said. Although the Iraqi government has promised the camp residents would not be harmed, Rajavi cited an 8 April raid on Camp Ashraf that resulted in the death of 36 people as a reason not to trust the Iraqi that classification. According to Ravjani, the Iraqi government has insisted the interviews be conducted away from the camp and while members have agreed to these terms, they will only leave if the UN provides security to and from their home. Ravjani has advocated the deadline for close the camp be put-aside, that the UN provide security forces to Camp Ashraf and for the international community to accept the residents as refugees. With the deadline of 31 December fast approaching there is not a lot of time to conduct the interviews required for refugee status and transfer to other nations. Vidal-Quadras urged the UN to act quickly and grant the refugee status to the camp's residents. If this is not an emergency than I don't know what one is, he said. Former Irish Prime Minister and EU Ambassador to the United States John Bruton said the 2003 Iraq war was to blame for the condition of Camp Arshaf. He said that those responsible for the war have a special responsibility to speak up for the residents. If leaders are willing to take credit for the good that came out of the invasion than they should also accept responsibility for its consequences, Bruton said. Rajavi added that neither the US or the UN have given assurances and instead rely on empty promises from the Iraq government.

President-elect of the Iranian Resistance Maryam Rajavi, President of the European Parliaments Delegation for Relations with Iraq and President of the Friends of Free Iran Intergroup Struan Stevenson and Nontombi Tutu, third child of Archbishop Desmond Tutu, speaker on Human Rights Issues pictured (from right to left) during a convention with some 1500 relatives of Ashraf residents in Europe who will call for the deadline for closure of Ashraf to be rescinded and call for the permanent stationing of UN monitors at Ashraf, at the Square Brussels meeting center, Tuesday 18 October 2011.| BELGA PHOTO BENOIT DOPPAGNE

officials. Experience shows that Iraq's governments' promises cannot be trusted, she said. European Parliament Delegation for Relations with Iraq President Struan Stevenson pointed to intelligence showing the Iraqi army beginning to plan an attack on the camp. Stevenson said that al-Maliki is closing the camp on orders

from Iran. Iraq's coalition government is a product of Tehran...al-Maliki owes his job to Tehran, Stevenson said. European Parliament Vice President Alejo Vidal-Quadras urged the United Nations to declare all residents of Camp Ashraf as refugees immediately. Normally, the UN conducts interviews individually with each refugees before they are given

GENDER

DIPLOMACY

Women are key to development

World Bank report says equality is smart economics
We are an evidence based institution, said Sandor Sipos, the Bank's representative to the EU as he introduced the 2012 World Development Report on gender equality and development. He continued, The evidence has been emerging for a long time, small observations that led to the notion that focusing on gender was smart economics. Sipos stated that the report assesses what is possible, and that the issue was a top priority for the Bank. Carolina Sanchez, the report author, noted that there had been improvements over the years, with life expectancy increasing by 20 years but there were important issues that were highlighted in the report, such as 35 million girls, mainly in sub-Saharan Africa, who did not go to school. Wages were still unequal, with a woman earning 80% of what a man would receive for the same job. Sanchez recommended that to improve workplace equality, there had to be subsidised training and affirmative action to widen the careers open to women, and the creation of womens networks. Temporary quotas could be used, she argued, to challenge preconceptions of womens roles in the workplace. Sanchez pointed out that most people, even women, say that men make better business leaders. However, there was still a role for men as their research suggested some common elements to successful policies, including building coalitions that also involved men and using the private sector to make the business case for equality. The European Commission was supportive. Kristian Schmidt from DG Development noted the current economic situation, adding that The Euro for the moment is being saved by a woman... in Berlin. He also cautioned that austerity measures could affect gender equality, not only in the developing world but in Europe. We will need stamina, change takes time, he said. He added that with the upheaval in North Africa, we are all worried, there is a window of opportunity but some of the tyrants were more favourable to gender equality than the populations. Zita Gurmai MEP was concerned at austerity cuts, saying that Europe was in a silent crisis, brought on by austerity, including public service cuts that affect women more.

EU and Ivory Coast strengthen ties

In a successful big to strengthen the ties between Ivory Coast and the EU, Ivorian President Alassane Ouattara visited Brussels during the last week of November and met EU and business world leaders. Ouattara thanked European Council President Herman Van Rompuy for the political support, economic assistance and diplomatic aid which the EU had provided throughout the crisis in Ivory Coast. He called on the EU to continue and augment its assistance now that the country entered the period of reconstruction. Van Rompuy on his part promised that the EU will, despite the crisis, continue its engagement in development and aid in Ivory Coast. President Ouattara also met with Commissioners Viviane Reding and Kristalina Georgieva to discuss the humanitarian situation and development aid that the EU provides to Ivory Coast, especially regarding the situation of internally displaced persons and refugees. Ouattara emphasised the significance of the EU's aid in the process of reconciliation and recovery. The Ivorian president talked about developments in the country with European Commission President Jos Manuel Barroso, and the two leaders signed a 125 million agreement to finance five projects. Ouattara also spoke with private-sector representatives within the framework of the Belgo-Luxembourg Chamber of Commerce meeting with representatives of the Africa, Caribbean and Pacific (ACP) states. He presented the socioeconomic situation in the country and the reforms that are aimed at boosting investment opportunities. The president outlined the growth agenda based on coffee, cocoa, petroleum products and public investments. Ouattara also met with acting Belgian Prime Minister Yves Leterme and European Investment Bank President Philippe Maystadt, and agreed a strategic partnership with Belgium, as well as railway development projects between Abidjan and Niamey, the port of San-Pedro and the Soubr dam. Ouattara invited Ivorians living in Belgium to repatriate and take part in rebuilding of the country. He said: Ivory Coast is working, security has been enhanced, the economy is progressing, and underlined that a number of infrastructural projects are being taken to ameliorate the everyday life of Ivorians.

Page 14 | New Europe December 4 - 10, 2011

NEW EUROPE

ENERGY & CLIMATE

INTERVIEW|SULEIMAN J. AL-HERBISH

OFID fosters South-South partnership

By Kostis Geropoulos
OPEC Fund for International Development (OFID) DirectorGeneral Suleiman J. Al-Herbish, talked to New Europe in an exclusive interview about the role of the fund in development and energy poverty alleviation, preserving the environment, its role in south-east Europe, the Balkans and Central Asia, and participating in the UNs International Year for Sustainable Energy for All in 2012.
NE: Mr. Al-Herbish, even though a main role of the OPEC Fund for International Development is energy poverty alleviation, a lot of people confuse its mission with that of the Organization of the Petroleum Exporting Countries (OPEC), oil production and prices. Can you briefly describe the role of OFID and its main goals? Al-Herbish: OFID, as you most likely are aware, aspires to a world where sustainable development, centred on human capacity building, is a reality for all. Our mission is to foster South-South partnership with fellow developing countries, worldwide, with the aim of eradicating poverty - which also embodies energy poverty alleviation. Recall that OFID was established in 1976 with the mandate to promote cooperation between OPEC Member Countries and other developing countries as an expression of South-South solidarity. We are to help, in particular, the poorer, low-income countries in pursuit of social and economic advancement. We extend concessionary financial assistance in the form of loans for development projects and programmes and for balance of payments support; we participate in the financing of private sector enterprises located in developing countries; we support developing countries trade with lines of credit and guarantees; and we provide grant financing for technical assistance, food aid, research and similar activities as well as humanitarian emergency relief. We also contribute to the resources of other development institutions whose work benefits developing countries. Briefly summarised, this is what we are all about. The UN General Assembly has declared 2012 the International Year for Sustainable Energy for All. There is an estimated 1.4 billion people living without electricity across the globe. The UN put a priority on renewable energy, addressing job creation, climate change,

OPEC Fund for International Development (OFID) Director-General Suleiman J. Al-Herbish

womens empowerment and food security. The UNs aspiration is to double the capacity of global renewable energy sources and energy efficiency measures in order overcome a state of energy poverty in underdeveloped countries. Are the UN and OFID going to jointly address these challenges? Is there a joint strategy? The simple answer is yes. The United Nations Secretary-General Ban Ki-moon invited me in my capacity as DirectorGeneral of OFID to be part of a HighLevel Group of leaders from global corporations, financial institutions and foundations. The Group will formulate a comprehensive and concrete sustainable energy action agenda leading up to the Rio+20 Conference next year which will guide and direct the Sustainable Energy for All Initiative (SE4All). The agenda will need to tackle three objectives: ensuring universal access to modern energy services; doubling the rate of improvement in energy efficiency; and doubling the share of renewable energy in the global energy mix. As a development organisation, ensuring universal access to modern energy services is OFIDs main priority. The emphasis on energy access is due to the urgent need to raise living standards and economic opportunities among the poorest. None of the Millennium Development Goals (MDGs) can be achieved without substantial progress

toward universal energy access. Together with the UN, our Member States and others, we are seeking to lift people out of poverty, advance their economic potential and remove the burden of dependence on fuel wood and other inefficient and unhealthy fuels. OFIDs priority is energy access for the poor. We also care about the environment and want to see progress made in a sustainable way that helps preserve natural resources. The UN Secretary-General Ban has mentioned many ways in which improved access to modern energy can contribute to a better life. Clean and efficient fuels can mitigate climate change; reduce indoor air pollution; and free women from the need to collect fuel wood. Electricity allows for longer working and study hours and makes possible the refrigeration of medicines in village clinics. The availability of affordable energy can boost agricultural productivity and improve the management of scarce water resources, making a direct contribution to better food security. The formation of a High-Level Group that will advise and guide the SE4All Initiative shows the commitment of the UN to wide consultation with the international community. On behalf of OFID, I welcome the opportunity to contribute to the work of this group. Let me quickly add that ongoing energy programmes are considered in the UN Initiative. In his vision statement on SE4All, Secretary-General Ban Ki-moon

indicated that The Sustainable Energy for All initiative will also provide a global platform for existing and planned initiatives to reinforce one another. Ongoing initiatives include Energy for All (Asian Development Bank), the Clean Energy Ministerial, the LowEmissions Development Strategies (LEDS) Global Partnership, Lighting Africa (World Bank Group), Energy+ (Norway), Energy for the Poor (OPEC Fund for International Development), the Paris-Nairobi Climate Initiative, the Africa-EU Energy Partnership, the Small Island Developing States Sustainable Energy Initiative, the Global Alliance for Clean Cookstoves, as well as the EUs decision to make access to sustainable energy a development priority through its Agenda for Change. The participation of OFID in the UN SE4All Initiative recognises OFIDs long-standing efforts in the struggle against energy poverty. Our increased emphasis on energy in recent years stems from the Riyadh Declaration endorsed by the Heads of State of OPEC Member Countries when they met in Saudi Arabia in November 2007. Before the Riyadh Declaration, roughly 20% of our portfolio was in energy operations and since then we have increased that share to 26% of the Public Sector and Trade Finance portfolio. We have approved, through all operational windows, a total of more than US$800 million in soft loans for 37 energy pro-

NEW EUROPE

New Europe | Page 15 December 4 - 10, 2011

ENERGY & CLIMATE

to tackle energy poverty

jects and operations in 26 countries. By adding the co-financing share of other development institutions participating together with OFID in these energy projects, we reach a figure of US$8.4 billion. Just to give you specific examples of the types of projects we have invested in: in 2010 we committed more than US$320 million in the energy sector, including US$20 million in a project aiming to expand the national grid and provide electricity to seven towns and 50 villages across Ethiopia. This year, among different projects, we have committed US$18.5 million to a project for the electrification of 591 load centers in Kenya and the provision of electricity access to about 35,460 households. What causes energy poverty? Are there long-term solutions? There is no single explanation for energy poverty. Certainly, income poverty is a major factor. Energy poverty can only be understood against the background of the general economic conditions of poor people and the constraints that limit their opportunities. Many poor people do spend a substantial part of their income on inefficient energy solutions such as candles and batteries, because they cannot afford the initial cost of a solar power unit or an efficient cook stove. The high distribution cost of energy/electricity coupled with low incomes is a problem particularly in rural areas. The infrastructure required to provide energy on a national basis requires a stable economic and political framework. Energy infrastructure is very expensive and needs to be financed over many years. The costs of transmission and distribution are high in countries with large, dispersed rural populations. In the past years we have seen major improvements in terms of governance and general stability in the poorest countries in the world, especially in Africa. Unfortunately, financing infrastructure remains a major bottleneck. Even when energy projects are implemented, insufficient financing prevents proper maintenance, leading to deterioration in the technical performance of generating and transmission systems. In turn, these problems cause power shortages and blackouts, affecting agricultural and industrial users. Providing the necessary resources to provide effective solutions requires substantial political commitment from governments and the international community. When the MDGs were agreed in 2000, better access to modern energy was not included as one of the goals. Governments devoted resources to other objectives and the issue of energy poverty was not a high priority. This omission has since been recognized, notably by the International Energy Forum (IEF) which is the worlds largest gathering of Energy Ministers. You may recall the Cancun Summit of 2010 and the subsequent 12th IEF where formal recognition was accorded the Energy for the Poor Initiative at the recommendation of OFID. Indeed the final communiqu of the 12th IEF (which brought 86 energy ministers together) actually declared that reducing energy poverty should be added as the Ninth Millennium Development Goal. Today, momentum is building to push energy poverty toward the top of the international agenda, and the higher visibility of the issue should help improve access to finance. Secretary-General Ban is aware of the funding gap that exists between the infrastructure required and the available money. The latest estimate of the IEA indicates that US$48 billion will be required every year until 2030 to provide universal access to clean cooking facilities and a basic supply of electricity to households. By any standards, this is a large number to cope with; however, it is only 3% of the total spent on energy investments every year around the world. Currently, only around US$9 billion is being spent on energy infrastructure in developing countries. To reach US$48 billion so much more is needed than the traditional funding sources can provide. This is why the High-Level Group will look into ways to attract more private capital and examine the potential of public-private partnerships. And the potential for the private sector is there. OFID is well aware that investment in energy infrastructure is a necessary (but not sufficient) condition for faster economic development. The economy-wide support from OFID includes finance for industry, banks and microfinance institutions; assistance for agriculture, markets and trade finance; and investments in transport, energy, health and education together with capacity development to improve public policy. These initiatives, when combined with an active pro-poor energy policy, already make a significant contribution to improving living conditions and life prospects in the poorest countries. Whats OFIDs role in South East Europe and especially the Balkans in order to achieve sustainable development? How can OFID help BosniaHerzegovina, Serbia, Kosovo, Albania and FYROM? Are you working in conjunction with EU institutions? OFID currently operates in the State of Bosnia and Herzegovina and the Republic of Albania and coordinates with other development finance institutions (DFIs) operating in the sub-region, including the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the International Fund for Agricultural Development (IFAD), the World Bank (WB), Japan International Cooperation Agency ( JICA), the Islamic Development Bank (IsDB), the Kuwait Fund for Arab Economic Development (KFAED) and the Saudi Fund for Development (SFD): Regarding Bosnia and Herzegovina, OFID has actively supported the country for almost 20 years now, through varied instruments and windows. During the countrys most difficult and sad times in recent memory, the Bosnian War, OFID approved five Emergency Aid Grants, totalling US$2.7 million, to alleviate the suffering faced by the countrys internally displaced persons and refugees, and to meet humanitarian needs. In 2007, OFID approved an additional grant in support of the poor people with severe disabilities. OFID has also been actively and extensively engaged in the countrys post-conflict reconstruction, by approving a total of seven (7) concessional public sector loans, in close coordination, of course, with the other development partners, in particular the World Bank, EBRD, EIB, and IFAD. OFID assistance has targeted the reconstruction of educational facilities and the sustainability of the agriculture sector, as well as the enhancement of transport infrastructure, which is vital to the countrys economic development plans and EU ascension aspirations. In addition, OFID is contributing to a high priority programme that addresses the housing needs for returnees. Finally, OFID has also provided support to the private sector, by extending three lines of credit to non-governmental financial institutions. In summary, OFID has committed a total of US$63 million through its public sector financing and 11million through its private sector financing window. OFID will continue to be flexible in its support of the priorities of Bosnia and Herzegovina as defined by its Authorities, in particular those that focus on social inclusion, sustainable development and competitiveness. In Albania, OFID has been engaged in development work since 1993, with nearly $100 million in cumulative financial assistance. Projects financed by OFID cover a variety of sectors, including health, education, water supply, transport, agriculture, irrigation and rural development. OFID has worked in Albania in partnership with the World Bank and IFAD as well as the Arab and Islamic financial institutions as part of the Arab/Islamic and OFID Coordination Group and has actively supported the country to combat poverty and meet its development goals as defined in its current National Strategy for Socio-economic Development and Stabilization and Association Agreement established with the EU in 2006. Whats OFIDs mission in Central Asian and the energy-rich former Soviet republics? Do they have their own poverty alleviation programmes? Whats OFIDs role in Ukraine and Moldova? Are you in talks with Russia in addressing these issues in its neighbourhood? OFID co-operation is based on direct dialogue with partner countries and in response to the respective countries strategic development priorities and poverty alleviation programmes. Therefore, in the former Soviet republics, OFID has engaged in direct discussions with incumbent government authorities and also other development finance institutions, obviating the requirement of coordination with Russia. Ukraine is currently not included among OFID priority countries. However, OFID is well aware of the serious constraints currently being faced by the Ukraine; in particular, the high incidence of poverty (26.4%), especially in rural areas, where 38.2% of the population is estimated to live below the poverty line. Despite anticipated economic recovery, food and oil price increases represent a source of vulnerability for the country and will continue to affect the most deprived segments of the population. OFIDs support to the country consists of two research grants for the construction of a family home for orphans (approved in April 2007) and the rehabilitation of a childrens camp (approved in September 2010), both in coordination with the NGO CARITAS. Currently, several OFID partners provide financial assistance in practically all economic sectors. These include the World Bank, European Bank for Reconstruction and Development, European Investment Bank, International Finance Corporation and several bilateral donors including the Kuwait Fund for Arab Economic Development.

Page 16 | New Europe December 4 - 10, 2011

NEW EUROPE

ENERGY & CLIMATE

CLIMATE|AER

Post Durban, European regions to tackle climate change

By Kostis Geropoulos
PONTA DELGADA, AZORES In the middle of the financial crisis in Europe and the continuous threat of unmitigated climate change to the whole world, European regions together can make a difference. Negotiations on climate change are now underway in Durban, South Africa, but Assembly of European Regions (AER) President Michle Sabban has warned that those looking for a breakthrough will again be greatly disappointed. The question youre asking me is what I expect of Durban. What I would like to answer is nothing. But I will definitely speak my part to the regions; I will challenge them so that after Durban they will be able to rally together and work to prepare the next world summit, Sabban told New Europe on 24 November in Ponta Delgada, Azores, on the sidelines of a meeting of the General Assembly of the AER. The United Nations Climate Change Conference is taking place in Durban, South Africa, from 28 November to 9 December. As the UN estimates that at least $100 billion a year must be found by 2020 to ensure the world can adequately cope with climate change, the role regions can play in tackling the issues of climate change is important. The AER is an observer member to the R20 Regions of Climate Action. R20 will be prestems, which strongly depend on the climate's evolution, the Azores have invested in the development of green energies and the protection of their environment. Sabban explained that the Azores, which strive to maintain energetic autonomy, have an experience that they can share with other regions. In the Azores you have volcanoes, you have wind, you have the Atlantic, she said, adding that Portugal's Azores Autonomous Region, a group of nine islands, is an example of renewable energy and energy efficiency. We need to find coherent themes that will bring everyone together. Why have the Azores called us and offered the island for the General Assembly? Its because it is the door toward the United States ... They are also a door for Europe, Sabban said, following the meeting of the General Assembly. At the meeting, Pascal Goergen was named the new Secretary General. Goergen will succeed Klaus Klipp, starting in January 2012 for a five-year mandate. Goergen is talking the helm at a difficult time. Asked if he has a strategy to help the regions overcome the financial crisis, Goergen told New Europe that the regions are facing the financial crisis that has plagued Europe and the rest of the world. [The crisis] has a negative impact on the membership of the AER ... The next two years will be very important in the frame of the new cohesion policy. There, we could help the regions to be very involved in the partnership contracts. Its very important to explain to our members that it is very useful to organise lobby action so that our regions could come with big and concrete projects to the member states so that they could involve these projects in the partnership contracts, Goergen said. He also noted that he wants the AER to fight against macro-economic conditionality. Because why should the regions pay for the no-good management of the financial situation of the member states, he said.

Assembly of European Regions (AER) President Michle Sabban, left, shakes hands with the newly elected secretary-general of the AER, Pascal Goergen, in Ponta Delgada, the Azores, 24 November 2011.

ent in Durban and I have shared with the general secretary of the R20 what the work done by the AER is. But Durban or Copenhagen I dont expect much progress. Why? Because what the governments have not understood yet is that if they were to devolve to the regions all

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the issues that are relevant to climate change, the states would have results, Sabban said. And I say this fully conscious of what I experienced in Seoul, in South Korea. We were in a forum and the representatives of Fukushima were there. What they were most worried about was not the nuclear power plant that was in a difficult situation. What worried them much more was the tsunami; the tsunami which was responsible for what happened. We hear about tsunamis, we see tsunamis nearly every year which was not the case before. Researchers have come and explained to us that this was connected to the climate change as well as to other issues, the AER president said on the volcanic island of So Miguel. In the middle of the Atlantic, the archipelago is at the vanguard of the world's fight against global warming. Due to their specific ecosys-

ENERGY|BUSINESS

Gazprom, RWE discuss joint venture

Russian natural gas monopoly Gazprom CEO Alexei Miller and German energy company RWE CEO Jurgen Grossmann have discussed the potential for a joint venture in the energy sector at Gazprom headquarters in Moscow. "The parties discussed potential establishment of a joint venture in the energy sector," Gazprom said in a statement. The companies in July signed a memorandum of understanding to team up for European gas- and coal-fired power technology. In August, Andrei Chernoshchekov, an official at Gazprom's foreign economic department, said RWE could get gas under "competitive prices" through a joint venture with RWE for new power plants in Benelux countries, Germany and Great Britain. Both sides had argued, along with Germany's largest utility company E.ON, over gas prices. Gazprom links the price to oil, a mechanism the Germany companies had challenged. RWE suffered recent economic setbacks in part because of a German decision to scrap nuclear power. Earlier in November, Germany and Russia inaugurated the Nord Stream pipeline pumping Russian gas to Western Europe. Once operational in late 2012, it will transport 55 billion cubic metres of gas a year to the EU for at least half a century, enough to supply around 26 million homes. The consortium for the 7.4-billion project is a joint venture between Gazprom, German firms BASF and E.ON, Dutch company Gasunie and GDF Suez of France.

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NEW EUROPE

New Europe|Page 17 December 4 - 10, 2011

ENERGY & CLIMATE

ENERGY|SHALE GAS

Gazprom slams shale gas extraction methods

ENERGY INSIDER

Attack on Iran could lead to $200 oil

By Kostis Geropoulos
What has oil traders tossing and turning every night is the possibility of an attack on Iran and Tehrans violent response, sending oil prices through the roof. Iran is the second-biggest oil producer in the Organization of Petroleum Exporting Countries. The price will go up to $200, Manouchehr Takin, Senior Petroleum Upstream Analyst with the Centre for Global Energy Studies (CGES) in London told New Europe, asked what would happen if there was military action against Tehran. The market is very nervous when it comes to big oil producers such as Saudi Arabia, Iran and Iraq. Iran exports about half a million barrels of crude per day, which is a huge volume to suddenly disappear from the supply in the world, Takin said. The market doesnt just limit itself there. The market thinks that Iran will react and there will be missiles one way or another, back and forth, and by accident the Saudi Arabia installations might be hit or some major tankers or the Straits of Hormuz, the CGES analyst said, outlining the catastrophic scenarios that could lead to a skyrocketing oil price. If you put yourself in the position of oil traders that want crude oil, they are prepared to pay more, Takin said. People think it will not be a contained action of Israeli planes hitting some parts in Iran and then going back. No, Iran, as soon as the planes are gone, will immediately send missiles everywhere. Thats at least what they say and I believe them because they wouldnt sit and make a protest to the UN Security Council that Israel has attacked them and they should condemn Israel. No, they would seek retribution, they would react, send missiles, 2,000 missiles. They may not be effective all of them, Takin said, adding, however, that some missiles may hit US aircraft carriers and naval ships, leading to an American involvement. And then there are individual people ready to sacrifice themselves in speed boats and they could hit tankers, they could hit naval boats ... You cant shoot all of them. American naval ships and aircraft carriers being in the Persian Gulf are just like standing targets, Takin said. On 1 December, European Union foreign ministers approved measures against some 180 individuals and companies in reaction to Irans continued support for terrorism and an International Atomic Energy Agency (IEA) report finding that Iran had conducted secret activities specific to nuclear weapons. But Brussels stopped short of announcing an agreement, proposed by France and backed by Britain, Germany and the Netherlands, to proceed with a full embargo on imports of Iranian oil. EU foreign policy chief Catherine Ashton said any consideration of steps against Irans energy sector would go to the technical experts. Meanwhile, all eyes were on Israel on 1 December after Israels defence minister said Tel Aviv does not want to take military action against Iran over its nuclear programme, but at some point may have no other option. Mysterious blasts have disrupted Irans nuclear programme, and there has been speculation of Israeli involvement. But a military action against Iran would be catastrophic. Lets hope it doesnt happen, Takin said. KGeropoulos@NEurope.eu follow on twitter @energyinsider

Environmental activists demonstrate during a protest against the exploration of shale gas in Barjac, France, 23 October 2011. |EPA/GUILLAUME HORCAJUELO

Russian gas monopoly Gazprom said certain aspects regarding production of shale gas made it a pricey commodity to exploit. There are no major breakthroughs in technology used to exploit shale gas that made it cheaper than conventional gas to produce, Gazprom executives said recently. "More stringent environmental requirements for the companies developing shale gas may raise the shale gas production costs," Gazprom noted in a statement. Executives added there was "signicant" environmental risk associated with production of shale gas. Gazprom also said that non-conventional gas including shale gas has been increasingly attracting public attention worldwide, but it is no news for the gas industry".

Russia has repeatedly downplayed the role of shale gas and insisted it wont hurt its lucrative model of extracting gas at deposits in West Siberia and pumping it through huge pipelines to consumers in Russia and Europe. European shale gas isnt expected to nd its way to the market for at least a decade. But the market has already been affected, as liqueed natural gas (LNG) cargoes have been redirected from the US to Europe. Shale gas has revolutionised the gas business in the U.S., and industry experts and executives say the same could happen in Europe and Asia. But critics believe the chemicals used in so-called fracking uid could contaminate groundwater supplies, though companies involved in the practice note those chemicals make up only a tiny

fraction of the overall composition. Shale gas production is banned in France though Poland and Ukraine, other countries rich on shale, are exploring their options. Meanwhile, French oil and gas giant Total said it would try to persuade the French government to repeal its ban on hydraulic fracturing of natural gas deposits in the country. Total had permits to explore around 1,670 square miles of land in southern France for shale natural gas deposits. The French government in October revoked the permits following a July ban on fracking. "We respected the law and we do not understand why this permit was withdrawn on legal grounds," Total CEO Christophe de Margerie was quoted as saying by the press.

ENERGY|EUROPEAN PARLIAMENT

Committee discusses energy efficiency targets

On 29 November at a debate with experts, the European Parliaments Energy Committee discussed the advantages and disadvantages of absolute and relative energy efficiency targets and the impacts these can have during recession periods, a press release read.The European Commission presented in June its proposal on a new Directive on energy efficiency. Main points include the introduction of binding measures for Member States (such as annual renovation targets for public buildings and annual energy savings for energy distributors and sales companies) and further promotion of cogeneration of electricity and heat (Combined Heat and Power (CHP)). However the proposal does not introduce a binding energy efficiency target for Member States. Wolfgang Eichhammer from the Fraunhofer Institute defended absolute targets, a view also shared by Parliament's rapporteur on this Directive, Claude Turmes (Greens, LU), saying that these targets are easier to achieve during periods of slow economic growth whilst they set a clear message. Absolute targets -based on consumption- avoid misguiding investments into supply options, they take into account rebound effects and can induce net increases in GDP and jobs. Relative targets, such as energy intensity targets (primary energy/GDP) can be very complicated and "if we create a complex model or system we will not achieve our goals", he said. Fiona Hall (ALDE, UK) stressed that "energy intensity targets can be achieved simply by growing GDP, without doing any actual energy savings". On the other hand Vidal-Quadras (EPP, ES) warned that it is easier to achieve an absolute target when the economy is going through a recession phase, but "this is fake", he said, because it means that companies reduce production and thus they do not consume much energy. "But this is not energy efficiency", he said. This view was shared also by Mr Karins (EPP, LV) who used Denmark as an example of a country which almost doubled its GDP without increasing its energy consumption. "In a recession it is more costly to be efficient" but when growth comes it is better to be prepared and have all the necessary technologies available. Joachim Weimann from the Otto-von-Guericke University Magdeburg suggested a compromise could be found by transforming the 20% aim into equivalent CO2 reductions. "To reduce the use of energy always goes along with some kind of costs", he said, adding that "European households and firms systematically ignore the challenges of energy use, such as security of supply, competitiveness of European economies, climate protection and sustainability".

Page 18 | New Europe December 4 - 10, 2011

ARTS & CULTURE

NEW EUROPE

Reopen of the Modern Art collection and conclusion of refurbishment measures in the Stadels garden wing

Leonardo da Vinci (14521519) Portrait of Cecilia Gallerani (The Lady with an Ermine), about 148990, Oil on panel, 54.85 x 40.45 cm, Property of the Czartoryski Foundation in Cracow on deposit at the National Museum in Cracow Princes Czartoryski Foundation

Germany Frankfurt Staedel Museum Permanent Presentation The reopen of the garden wing with its presentation Modern Art (1800 1945) from 17 November 2011 will be

the first of three major collection openings at the Stdel Museum. At the first opening, visitors will not only find the museum rooms of the garden wing refurbished and redesigned as well as a

museum shop with a bookshop and a caf extending the former range of services, but also an entirely new presentation of the modern art collection which, besides familiar and popular works, includes a number of important new additions and surprising positions, as Max Hollein, Director of the Stdel Museum, notes.The Modern Art presentation at the Stdel Museum offers a concentrated survey of the development of European art and sculpture in the nineteenth and twentieth centuries.The emphasis is on German and French painting. With works such as Claude Monets The Luncheon (1868), Pablo Picassos Fernande Olivier (1909), or Ernst Ludwig Kirchners Standing Nude with Hat (1910), the Stdel possesses key works of the more recent history of art. The new presentation will not only make the contentual connections and interactions between the European art movements and the various artists better understandable, but will also comprise photographs for the first time and include more works by women artists than before.

Belgium Brussels-AEROPLASTICS contemporary -until 21 January 2012 While producing these new works I was trying to bring together many of the themes, materials, and issues which have been running through my work for the last years. Primarily the works 'en masse' deal with our place as individuals within society, with the sometimes disempowering aspect of our contemporary overload, and the romantic fading memory of a simplified world view in which one's sense of place was denoted by boundaries of personal vision and physicality, a memory which is now transformed into an endless web of connections and information, most of which, though highly omnipresent and totally accessible, leaves us as spectators rather than participators in what we are able to know.

A.R. Penck entre feu et glace

Jack and the Beanstalk

A.R. PENCK, Zwischen Feuer und Eis, 2009. Acrylic on canvas. 140 x 200 cm - 55 1/8 x 78 3/4 in. (c)A.R. Penck. Courtesy Galerie Jrme de Noirmont, Paris.

France Paris Galerie Jerome de Noirmont until 4 January2012 After the Kunsthalle in Frankfurt and in Kiel, Germany, the Modern Art Museum of the City of Paris devoted a large retrospective to AR Penck in 2008. Here the French public discovered the strength and the extent of this great, secretive German artists work. After his early underground works in East Germany, the basis of his artistic approach became clear in the large exhibition halls that exposed his magnificent Standart series of 1970-72 and in his large paintings, including the famous Weltbild and Systembild. This

approach is the search for an understandable, pictorial language that anyone could reproduce, based on the use of simplified figures, signals and symbols. This new, personal exhibition from November 4, 2011 until January 7, 2012 is the fifth at the gallery since 1996. It unveils his latest paintings, the fruit of four years of work since 2007. Entitled Between Fire and Ice, this exhibition gives us the latest pictorial investigations of AR Penck, in his constant back and forth between abstraction and figuration, between expressing his own feelings and didactic construction.

United Kingdom London - Shaw Theatre 6 to 31 December 2011 Something big is coming to the merry old land of Eustonville in London this Christmas and its sure to get you In the Mood for Dancing. Irish sisters Linda and Maureen Nolan lead an all star cast and take to the stage in Jack and the Beanstalk at the Shaw Theatre, London from 6-31 December. With the dear old traditional English panto sadly absent in Belgium, this could

be just the thing for expats looking to keep the kids occupied over the festive season. So, why not join Jack, Dame Trott and Daisy the Cow on a giant adventure to Giant Blunderbores castle in the sky. An enchanting tale for all the family, Jack and the Beanstalk is full of magic beans, laughter, fabulous costumes, sparkling sets and a never-ending beanstalk. Linda and Maureen Nolans wealth of experience in show business has embraced hit records, international television shows, major world concert tours and appearances with the world's most popular superstars. Together with their sisters, The Nolans, they have received over twenty gold, silver and platinum discs with album and single sales topping over 8 million. No strangers to the stage both Linda and Maureen have starred as Mrs Johnstone in the award winning musical Blood Brothers both on tour in the UK and in Londons West End to critical acclaim. Joining them on stage will be Devon Anderson (Billie Jackson in BBC1s EastEnders, Taj Lewis in CBBCs Kerching!, Sonny Valentine in Channel 4s Hollyoaks) as Jack Trott, Chris Stanton (CBBCs MI High) as The King, Rodney C Howard as Dame Trott and Rosie Taylor as Princess Jill. Tickets for Jack and the Beanstalk are frozen at 2010 prices so it wont cost you more than a bag of magic beans to see Londons traditional family pantomime! Book online at www.shaw-theatre.com.

arts@neurope.eu

NEW EUROPE

New Europe | Page 19 December 4 - 10, 2011

ARTS & CULTURE

WHEN INDIAN CLASSICAL MUSIC MEETS FLAMENCO

Travelogue
Travellers, these gypsies who, coming from Punjab in the first century A.D., crossed Asia before settling in Europe and bringing us musical forms, which later evolved into the Spanish Flamenco. Anoushka recognized fascinating reminiscences of Indian music in Flamenco: similarities in the rhythmic approach and counting system but also in strength, as spirituality meets passion. Her CD is the result of a wonderful collaboration with famous Spanish composer, songwriter and record producer Javier Limn, whose musical heritage, a mixture of Rajasthani Gypsy, Christian, Jewish and Arabic influences, makes up contemporary Flamenco. Incidentally, the lyrics borrow elements of 13th/14th/15th Century Farsi poetry, while most of Anoushkas songs were translated in Spanish or Hindi. Ravi Shankar, himself, wrote the lyrics to the song 'Krishna' in Bengali. The fusion of the various instruments, the guitar, Spanish percussion and piano, which respond to the Indian sitar, tabla (percussion), tanpura (lute), and shehnai (oboe), offers a new musical experience as the stamping and clapping of a Flamenco dancer, corresponds to the ringing bells of an Indian one. Spanish Flamenco and Jazz singer Concha Buika is among the numerous guest artists who participated in the creation of this rare and ambitious project, which was recorded between California, Spain, Britain and India. Such a demanding repertoire needed meticulous adjustments to be performed live. Following the Hindustani tradition, Anoushka starts in solo by slowly introducing a raga or traditional melodic formula while improvising and reaching a peaceful state. The audience is progressively drawn in, and experiences the curiousness of pure sound.

Saraswati Lakshmi Goddess of Knowledge, Music and Arts Goddess of Prosperity, Wisdom and Beauty Raja Ravi Varma, 1896 Raja Ravi Varma, c.1848

Anoushka Shankar with her sitar Harper-Smith/DG

Gradually, the beat accelerates and we are rhythmically led into more familiar melodies like vivid Latin phrases, conveyed by the guitar, drums and the mystic Spanish lyrics. As the music evolves, a seduced audience, spellbound by the mood, catches itself dancing to the ever-lyrical beat.

This month, Anoushka Shankar will be performing in Berlin, Dortmund, Lisbon, Barcelona and Tenerife. She will appear live in Brussels at the Palais des BeauxArts on the 9th December. Louise Kissa lkissa@neurope.eu

lassical Indian sitarist, Anoushka Shankar and her group The Anoushka Shankar Project have been on their European tour since early November to promote a new album, Traveller, with the support of Deutsche Grammophon. Leading World Music artist, Anoushka is the halfsister of Jazz singer Norah Jones, and daughter of the legendary composer Ravi Shankar, who, since the 60s and through collaborations as diverse as The Beatles, The Rolling Stones, virtuoso violinist Yehudi Menuhin and composer Philip

Glass, popularized the sitar, a complex plucked stringed instrument used in Hindustani classical music. Having the chance of being entirely trained by her father (and guru) since the age of nine, Anoushka started to perform with him at the early age of fourteen and later played his compositions, concertos and symphony for sitar and orchestra as a soloist. She made a name for herself by releasing Anoushka (1998), Anourag (2000), Live at Carnegie Hall (2003) and Breathing under water (2007). The title of her latest album,Traveller, alludes to her own cosmopolitism but also to the

Anoushka Shankar on stage with her father, Ravi Shankar, during a live concert in 2005

Social activist Anoushka Shankar supporting a fundraising live concert to prevent infant mortality in Calcutta, February, 2009. EPA/Piyal Adhikary

Anoushka Shankar Harper-Smith/DG

Page 20 | New Europe | December 4 - 10, 2011

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Cairo 678

Brussels Agenda 8 -15 December

The New Euroscepticism: Sources, Patterns and Implications 8 Dec 12:30-14:30 Avenue Marnix 22 The European Union finds itself at a critical juncture in its development: not only has the eurozone crisis called into question the keystone project of the integration process, but the constitutionalisation agenda set out at Laeken has also run into the sands. This seminar will put forward the idea that while eurosceptics might not have the answers to the EUs problems, the questions they pose speak to the heart of the integration process and deserve more careful consideration. Where is the Chinese Banking System Heading? 8 Dec 12:45 33 Rue de la Charite After some wonderful years in terms of growth and profitability, there are three main sources of risk for China's banking system. The first is the hang-over of the fiscal stimulus package, which has been intermediated by the banking system. The second is China's housing bubble and its relation to the banking system. The third is the sudden rise in shadow banking and how it is affecting the formal banking system. How important these risks are and whether they will materialise depend, among other issues, on the external environment which China will be facing in the next few years. Conference on Competition, Concentration and Consolidation in the Airline Industry 8-9 Dec Hotel Bristol Stephanie, 91-93 Avenue Louise The objective of this conference is to a) reassess the Commission's policy on airline mergers and analyze the effectiveness of remedies typically accepted in these cases, (b) assess whether Global alliances are creating oligopolies, (c) discuss the multiple jeopardy which airlines face in view of the concurrent application of the competition laws of a number of different jurisdictions, (d) assess if competition is distorted by subsidies to third country airlines. Nuclear Safety: A Much Needed Debate 12 Dec 09:30-18:30 European Economic and Social Committee, Rue Van Maerlant 2 The last six months have seen the reconsideration of issues about nuclear safety and nuclears long-term contribution to the EUs energy mix. The European Economic and Social Committee (EESC) and the European Commission are therefore organizing an open, balanced and exploratory process of dialogue and debate for all stakeholders in civil society. Julia Fischer 7 Dec 20:00 Centre for Fine Arts, Rue Ravenstein Not yet 30 years of age, Julia Fischer has already established herself as one of today's greatest violinists, acclaimed for the depth and maturity of her playing. As she studied the piano and the violin in parallel, she is also an accomplished pianist, but has pursued a concert career devoted to the violin, she explains, because of her more intense relationship with that instrument. It is, in any case, music that comes first for her and that she serves with humility and eloquence. Anoushka Shankar 9 Dec 20:00 Centre for Fine Arts, Rue Ravenstein Sitar-player Anoushka Shankar seemed to be destined for greatness from the cradle. Her father, the great virtuoso Ravi Shankar, made the instrument known worldwide. Anoushka recorded Traveller, her sixth solo album, in Madrid with leading flamenco artists. Smith and Burrows 13 Dec 20:00 Ancienne Belgique Editors-frontman Tom Smith and (exRazorlight) Andy Burrows have been drinking buddies and fans of classic Christmas carols for years. So why not just make a Christmas album together? The Felice Brothers 15 Dec 20:00 Ancienne Belgique The Felice Brothers are an impressive set of American musicians, roots related and with sufficient busking experience. Adam Zagajewski 15 Dec 20:30 Centre for Fine Arts, Rue Ravenstein The poet, essayist and Nobel candidate Adam Zagajewski (1945) is coming to Belgium for a unique appearance. Zagajewski lived in Poland until the 1970s before moving to Paris, returning to his home country about a decade ago. Today, he travels back and forth between Cracow and Chicago. All this makes of him the ideal person for a reflection on identity and culture, in which he joins forces with Flemish Poland specialist Johan de Boose.

Courtesy of Ancienne Belgique

10 Dec 20:00 Ancienne Belgique Gary Curran, Declan 'Decky' McLaughlin and Gareth Donoghue from North Ireland perform as the Japanese Popstars at Ancienne Belgique. They have toured the entire world with their electro style music and now they are coming to Brussels. Their second CD was released this summer and is called Controlling Your Allegiance. This album immediately earned a '4* CD of the week' in De Morgen, not in the least due to the remarkable vocal contributions by Jon 'Blues Explosion' Spencer, Robert 'The Cure' Smith and Tom 'The Editors' Smith, aside Lisa Hannigan, Green Velvet, James Vincent McMorrow and Morgan Kibby. But The Japanese Popstars are already impressive, even without all those vocalists. Don't miss their unique style and experience.

Courtesy of BOZAR

9 Dec 19:00 Centre for Fine Arts, Rue Ravenstein In honor of Human Rights Day 2011, the United Nations, the European Union, BOZAR and FIFDH are hosting the premier of the feature film, Cairo 678. The film will take on sexual abuse and violence in Egypt. The bold film will

feature the perspectives of three Egyptian women in different socioeconomic groups who will share their story. One of the women, Fayza is a traditional mother who is seeking justice in her experience. Seba is a wealthy jewellery store owner, who is recovering from a gang assault. The last woman, Nelly, is an aspiring comedienne who is challenging social norms by filing a sex-

ual harassment lawsuit. The film captures these stories and demonstrates how the attitude of the Egyptian authorities towards them. Due to the lackadaisical response by the Egyptian authorities, the women take justice into their own hands. The film will be followed by a panel discussion exploring sexual harassment and other human rights.

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TAKE A LOOK
The amazing Brussels Christmas market on Place St. Katherine. The market features the best of the holiday spirit in Brussels including great food, wine and fun. Stop by and get an amazing view of the city centre from the Ferris wheel, try some mulled wine, buy gifts for loved ones and indulge in Belgium's finest fries. The holidays come to life at St. Katherine and don't forget to grab a pair of skates and make your way around the ice rink!
"SLIDESHOW BOB"

Fine times with wine

Three years after the launch of the Wine in Moderation Art de Vivre (WIM) programme, senior representatives from the European Commission, national and regional constituencies of the wine sector, the wine value chain and many other EU stakeholders came together in a conference on 24 November, to review the accomplishments and success stories of the WIM programme implementation at national and European level, and to present the next steps forward, building on the success achieved so far. DG SANCO Director-General Paola Testori opened the conference, praising WIM's success and paying tribute to the unique role of wine in European Cultural Heritage and in the implementation of 'smart regulation', as well as urging the industry to further scale up effective action against the harmful use of alcohol. Conference paticipants had the opportunity to learn more about the WIM programme and the achievements that the EU Wine Sector United programme has accomplished through presentations made by four of its national constituents, the Italian Wine Union (UIV), the German Wine Academy (DWA), the Spanish Wine Federation, and Vin & Socit (France), who each presented examples of WIM national actions and educational activities (Art de Vivre Education). Sogrape Vinhos Board Member and Wine in ModerationArt de Vivre (WIM) President George T.D. Sandeman told New Europe: "What we hope to achieve with Wine in Moderation now is to continue our effective contribution to the EU Strategy supporting the efforts of MS to reduce the harmful use of alcohol, and build on the values of Wine and its culture - which we see as a key ingredient of European cultural and gastronomic heritage. "This will be done by informing and educating consumers on best practice moderate and responsible consumption patterns of wine as part of a healthy modern lifestyle, when combined with exercise and a balanced diet - we believe that values associated with wine (passion quality, taste, flavor, culture, uniqueness, roots, diversity) can be a major driver for making moderate and responsible behavior fashionable among consumers and thus contribute to the reduction of harmful use of alcohol as a cultural consequence.I remain dedicated to ensuring that the sector delivers on its commitments to the full extent of its abilities and ambitions and that we make moderation a culture and responsibility a trend." www.wineinmoderation.eu

deFilharmonie
22 Dec 20:00 Centre for Fine Arts, Rue Ravenstein When the council starts stringing coloured lights across the street and fake snow makes its appearance in the shop windows, you know the deFilharmonie Christmas concert cannot be far. Philippe Herreweghe maintains the Brussels tradition, performing two symphonies from the catalogue of the prolific Joseph Haydn under the Christmas tree: Nos. 85 and 102. Haydn's startling music shares the programme with Mendelssohn's magnificent Violin Concerto.
Courtesy of BOZAR

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Page 22 | New Europe | December 4 - 10, 2011

A round-up of interesting blog posts of the past week, because bloggers deserve their voice.

Newspeak, the 142 billion budget and the EUs communication problem
From: http://tinyurl.com/neweurope965 The European Union has a communication problem. This is allegedly caused by things like the fractured nature of European public opinion, the dull work of Brussels ormaliciously sensationalist journalism. No doubt these are often the problem, but I would add another factor: Intentional obfuscation by European institutions. Case in point, there is little more fundamental to any organization than its budget. Given that the EU is meant to serve and is paid for by the public, one would think it would make some effort to give an account to the layman taxpayer of its spending. Not so. If someone outside the Brussels bubble types EU budget into Google he arrives here at the Commissions webpage describing said budget. So far, so splendid. But what information has the Commission deemed useful to share with our unsuspecting citizen-taxpayer? This hideously uninformative pie-chart: In the real world, over 40% of the EUs budget goes to the Common Agricultural Policy (farm subsidies), another third for Regional Policy (infrastructure and other projects in poorer regions) and the rest on the negligibles. But no. Instead of basic facts, the Commission presents nearly half the budget as going to Cohesion & competitiveness for growth and employment. What in the devil is that and who could be expected to be against any of those words? I, covering the EU every day, am not able to tell what real part of the budget that title is hiding. The EU as a global player is a somewhat more acceptable euphemism, presumably because foreign policy is verboten due to the Brits. A shame though as I imagine nice things like humanitarian and development lows: l 1/2 for buzzwords l 1/3 for direct aids and market-related expenditure (???) l 1/10 for the countryside l 6% for bureaucrats l 6% for strutting about the world stage Fantastic. Now, you might protest that a pie-chart is an attempt at simplification and vulgarization. Obviously it fail on both counts, but even those will to dig through some number will be disappointed. The Commission presents this detailed table of the budget: Note that many of the headings have changed but farm policy and regional policyare still nowhere to be found. None of the big budget items have actually descriptive headings, instead we have competitiveness for growth and employment, cohesion for growth and employment and other Orwellian nothings. Thus, our citizen-taxpayer will leave the website still knowing nothing as to how much Europe is spending in his name on agriculture, nuclear power or what have you. Speaking of Orwell: Newspeak was designed not to extend but to diminish the range of thought, and this purpose was indirectly assisted by cutting the choice of words down to a minimum. One difference is that, in EU-speak, the range of thought is reduced and all made wholesome by definition through verbosity rather than virtuous concision. P.S.: This post was prompted by similar headings used even in leaked internal Commission documents detailing a draft 80 billion to be spent on the Horizon 2020 research budget. P.P.S.: The EU can produce an intelligible brochure on the budget. I dont know why good communication is reserved for .pdfs and glossy pamphlets rather than the top Google ranking page.

IN THE BLOGS

NEW EUROPE

Read a blog post that you want to suggest for our new In The Blogs section? Send us an email: intheblogs@neurope.eu

aid fall under this. The citizen walks away with this only intel-

ligibly visual piece of information having learnt that the EU budget is divided as fol-

Barroso urges 'smart regulation' to boost growth in brewing

Europe needs fiscal belt-tightening coupled with growth-enhancing measures to pull itself out of crisis, including smart regulation that doesnt shackle businesses like the brewing sector, European Commission President Jos Manuel Barroso said, speaking at The Brewers of Europes EU headquarters on 22 November. These fiscal consolidation measures, they are unavoidable, Barroso said, shortly after meeting with Italys new Prime Minister Mario Monti. As leaders of the business community Im sure you understand that. It would be unthinkable for your companies to do what some governments have been doing. But Barroso, speaking to some 300 top beer executives, policymakers and the media, added that the EU had systemic problems and must promote growth by making the single market more flexible, and to ensure that regulation doesnt overburden business. I would like to commend the efforts of your sector to introduce self-regulation to promote responsible beer advertising across Europe, Barroso said. Initiatives like this and pro-active involvement of industry representations are an excellent example of industry working with regulators to make legislation truly smart. Europes brewers support some 2 million jobs and contribute 50 billion in taxes but face tough challenges as the economy risks another recession. Danuta Hbner, a leading Polish MEP and former regional policy commissioner for , said that Europes brewers are active in Europes regions in all 27 member states, for decades supporting programs promoting responsible drinking as well as backing thousands of local events that are part of Europes social fabric and regional identities. The Brewers of Europe President Alberto Da Ponte said: The brewing sector is emerging from a difficult period but we have embraced the Europe 2020 strategy. With the right support from policymakers, our sector can play a key role in Europes economic recovery and future growth. A panel session invited brewers and policymakers to discuss the challenges the sector faces. SABMillers Europe CEO Alan Clark said: The brewing sector has weathered the storm so far, but policymakers must be aware of the impact that further economic downturn combined with dramatically increasing taxes on beer may have. According to an independent report published in May this year, across Europe the 3,500 brewers, large and small, spend 1bn annually supporting over 8,000 community and regional events and activities, including in the areas of the arts, culture, innovation and science, as well as sport.The gala included a presentation of the 'Faces of Brewing' photo contest winner and a networking gourmet dinner prepared by Eurotoques, representing 4,000 chefs across Europe. The reception also featured beers from Poland in honour of the countrys rotating EU presidency. Brewers of Europe Secretary-General Pierre-Olivier Bergeron told New Europe: The brewing sector creates two million jobs and fifty billion euro in taxes for Europes national governments, but the economic crisis has hit the brewing sector hard in the past few years, with knock-on effects. We are glad that President Barroso recognised both the economic contribution and the pressures that brewers have been under in recent years. Europes brewers are particularly appreciative of Mr Barrosos wish for the European Commission and Europes brewers to work together as partners in support of Europes 2020 Growth Strategy. For more information, go to www.brewersofeurope.org www.beerserveseurope.eu

THE EUROPEAN UNION

New Europe | Page 23 December 4 - 10, 2011

FRANCE GERMANY
FRANCE ENERGY GERMANY|FOOD

Anti-nuclear activists to continue their protests

Anti-nuclear activists have vowed to continue their protests against a nuclear waste storage facility in northern Germany after 11 containers of reprocessed fuel arrived there. The containers reached the facility in Gorleben late on 28 November, five days after they left a reprocessing facility in northern France. More than 100 police officers and over 300 demonstrators were injured in Germany during days of clashes over a shipment of radioactive waste from France, according to figures provided on 29 November. Police said 133 of the more than 20,000 officers deployed along the German leg of the 1,200-kilometre route were hurt protecting the convoy of nuclear waste repatriated from a reprocessing centre in northwestern France. Anti-nuclear activists said 355 protesters were injured, five seriously, during the protests, mostly from tear gas or police baton attacks, although some had reportedly been bitten by police dogs. Meanwhile in France, opinion polls show support for atomic energy has eroded since Fukushima. Forty percent of the French are hesitant about nukes while a third are in favour and 17% are

Domino's plans Germany expansion

Domino's Pizza UK & IRL Plc. is eyeing the German market for growth. According to Reuters, the chain's fledgling German business could potentially double the size of its British operations, it was reported on November. Domino's Pizza opened its first store in Germany earlier this year after completing a master franchise agreement with the founder of Grand City Property Group and Grand City Hotels. Lance Batchelor, who will take over as CEO of Domino's Pizza UK & IRL Plc. after Christmas, said Germany has the potential to support between 2,000 and 3,000 shops. "We're absolutely confident that we have got a winner there, that's going to be national and going to be big," he said. Currently, Domino's has four outlets in Germany. Two more are expected to open by the end of 2011.

GERMANY|AUTO INDUSTRY

Daimler axes Maybach brand to focus on Mercedes

Anti-nuclear activists of the environmental group Greenpeace measure the radioactivity of the castor containers while they are moved from the train onto the low-loaders by a crane in Dannenberg, Germany, 28 November 2011. |EPA/CHRISTIAN CHARISIUS

against, according to a survey by pollster Ifop published on 13 November. Nearly two-thirds of supporters of France President Nicolas Sarkozys governing UMP party say they back nuclear power, while half of Socialist supporters are unsure. On 25 November, Sarkozy defended France's nuclear industry, wading into to an election debate after opposition par-

ties agreed a plan to cut nuclear's share in France's energy mix if Socialist candidate Francois Hollande were to win May's presidential election. "Our nuclear park is a considerable economic and strategic strength for France. Destroying it would have dramatic consequences," Sarkozy said at a nuclear plant in the south of France.

GERMANY AUTO INDUSTRY

Toyota, BMW to jointly work on green car technology

Toyota Motor Corp and BMW AG on 1 December announced they have agreed to form a broad partnership in the field of developing environmentally-friendly vehicles, Deutsche Presse-Agentur (dpa) reported. The partnership would include collaborative research into next-generation lithium-ion battery technologies, the companies said in a statement. Toyota Motor Europe and BMW have entered into a contract under which BMW is to supply fuel-efficient diesel engines to the Japanese carmakers European unit starting in 2014, the carmakers said. The engines would be installed in certain Toyota-produced vehicles for the European market. Through the agreement, the Japanese carmaker intends to expand its European line-up and sales of fuel-efficient vehicles and CO2-emission diesel-powered vehicles, the statement said.

German carmaker Daimler signalled plans on 25 November to axe its loss-making super-luxury Maybach brand, news agencies reported. "It would not be sensible to develop a successor model for the current Maybach," Daimler Chief Executive Dieter Zetsche told German daily Frankfurter Allgemeine Zeitung in an interview due to be published previous Saturday. Instead, Zetsche said Daimler planned to replace the Maybach with more expensive models of its Mercedes-Benz S-Class saloon, which are likely to be introduced in 2013. The Daimler chief said in a letter to employees: "In the future the luxury segment will be completely focused on our core Mercedes brand, which is the world's most valuable premium car brand." Stuttgart-based Daimler has produced 3000 Maybachs since it revived the brand in 2002. The Maybach had previously not been in production since 1940. But with sales falling short of initial expectations, the Maybach's future has hung in the balance for sometime amid speculation about whether Daimler would abandon the brand or try to link up with a partner to develop it. Daimler recently said it would step up investment at the nearby Unterturkheim power train plant, which produces axles, transmissions and engines for more than 1.5 million vehicles annually.

GERMANY|AVIATION INDUSTRY

Air Berlin seeks Chinese and Mideast cash

Struggling airline Air Berlin, Germany's second-biggest carrier, is on the hunt for investors and has already begun talks with potential partners from China or the Gulf, The Local reported on 25 November. Air Berlin Chief Hartmut Mehdorn has already held talks with Etihad Airways, based in the United Arab Emirates, and Chinese holding company HNA, the main shareholder of Hong Kong Airlines, the Sueddeutsche Zeitung daily said. One option is the "selling of a large amount of Air Berlin shares," the daily said, without citing its sources. Air Berlin's founder, Joachim Hunold, had always ruled out the option of seeking foreign investors but new boss Mehdorn appears to be pursuing a different strategy. The airline, which relies heavily on transporting German tourists, ran into heavy turbulence in 2008 after years of soaring growth and expansion. The firm has suffered more than its competitors from external factors, such as the political turmoil in North Africa since the beginning of the year. It has also been hit hard by rising fuel costs, the introduction of an aviation tax in Germany and uncertainties over the economy. It will be in the red this year and has not given guidance for 2012.

GERMANY PLASTICS

BASF to build specialty plastics plant in Korea

BASF will build a new plant to produce Ultrason polyethersulfone (PESU), one of BASFs high-performance thermoplastics, at the companys site in Yeosu, Korea, the company reported on 1 December. The annual capacity of the new plant is 6,000 metric tonnes. Construction of this specialty plastics plant will start in early 2012 and production is expected to begin by early 2014. About 50 new jobs will be created once the plant is operational. "Overall in Asia Pacific, we are investing approximately 2.3 billion from 2011 to 2015 in order to achieve our goal to produce 70% of our sales in the region. By establishing local production of our high performance specialty plastics in Korea, we can support the growth of key local industries," said Albert Heuser, President, Market and Business Development, Asia Pacific, BASF. Ultrason is sold to customers in the electronics industry, as well as the automotive and aerospace industries for the production of heat-resistant light weight components and to the water treatment industry for manufacturing of water treatment membranes. In addition to its use in the electronics, automotive and aerospace industry, other Ultrason applications include membranes for medical devices, hot water and food contact parts for example in espresso machines, microwaveproof dishes or baby bottles. Ultrason is also used in the production of carbon fiber composite materials.The Korean electronics industry is a major target market for Ultrason. The location also benefits from the proximity to other major markets such as China and Japan. BASF is the world's leading chemical company. Its portfolio ranges from chemicals, plastics, performance products and agricultural products to oil and gas. BASF posted sales of about 63.9 billion in 2010 and had approximately 109,000 employees as of the end of the year.

New Europe | Page 24 December 4 - 10, 2011

THE EUROPEAN UNION

UNITED KINGDOM IRELAND

IRELAND | BUSINESS UNITED KINGDOM LABOR

Quinn Group fine reduced

The European Court of Justice has reduced a 9 million fine against the Quinn Group, which were implicated in a cartel illegally fixing the price of acrylic glass, RTE Ireland reported. The company, which manufactures plastics used in household appliances, appealed the 9m fine which was imposed in 2006.The European Commission had taken the case against a number of European companies which it accused of operating a cartel in the 1990s. The companies were accused of discussing prices, agreeing, implementing and monitoring price agreements and the exchange of commercially important and confidential information. The case dates back to the 1990s when executives were accused of meeting in a Dublin hotel to exchange sensitive data and fix prices. Following court's ruling the fine was reduced to 8.25 million. Earlier this year, IBRC, the former Anglo Irish Bank, appointed a share receiver to take control of the Quinn family's stake in Quinn Group, which includes the glass business.

Britain hit by public sector strike

UK | FINANCE

EU clears Santander's takeover of RBS

The European Commission said it had for the second time approved the takeover by Spain's Banco Santander of Royal Bank of Scotland's (RBS) retail and commercial banking operations in Britain, DPA reported. The European Union had already cleared the deal in October 2010, but needed to examine it again because the terms of the takeover were modified. In a statement, it said it cleared "the amended transaction" because it "would not raise competition concerns, in particular because the overlaps between the parties' activities are very limited and Santander market shares will remain low" in Britain. The sale was a key condition demanded by Brussels to approve the massive RBS bailout and nationalisation that was enacted by the British government in the wake of the 2008 financial crisis. The EU executive is tasked with policing the bloc's strict competition laws, which state that companies which receive state aid should not have an unfair advantage over their competitors.

Public sector workers march through London against pension cuts. | EPA/Andy Rain

Hundreds of thousands of public sector workers in Britain joined a oneday strike on 30 November protesting against plans to cut their pensions, trade unions said, DPA reported. Hospitals, schools and immigration services were hit by the action, which trade unions say is the biggest walkout seen in Britain since the 1970s.

The Conservative-Liberal coalition government have described the protests as "futile," as negotiations with the unions about pensions continue. Trade unions taking part in the official protests predicted the number of those taking part in the "day of action" exceeded two million. Public servants, teachers and border officials argued that a pay freeze and

plans to increase pension contributions represent an "unfair punishment" of workers for an economic crisis for which they are not responsible. Air passengers were expected to be hit by delays at passport checkpoints at major London airports. But early Wednesday, services were running smoothly as extra staff were brought in, the airport authority BAA said.

UNITED KINGDOM JOBS

No Aviva lay-offs yet, staff told

Aviva, which last month announced it was axing up to 1,250 jobs in Ireland, has told staff that there will be no short-term redundancies before agreement is reached on the restructuring of the company, RTE Ireland reported. Management was anxious to stress that no decisions had yet been made - and that no staff member would be given notice before the end of March. Weeks ago, RT News revealed a discussion document for the Aviva board which outlined its plans to operate the Irish business as a region of the UK operation. But senior sources said that this discussion document was never presented to the board, and contained only proposals. The document included a proposal to close the entire branch network with the loss of 126 jobs - and to move its business to a combination of online delivery and sales through brokers. On 29 November morning managers have been informing staff as to whether their individual divisions "have something to worry about". Senior sources said the Galway operation - where a call centre for sales and servicing of claims is envisaged - would be least affected. They pointed out that the insurance business had suffered in the recession with Aviva losing market share and that the company had to address its cost base. No staff will receive notice before the end of March, and the company will continue to employ up to 1,000 staff in Ireland. Sources said closing the entire network of 26 branches was only one of a number of options. Even if Aviva were to proceed with that option, it would be unlikely to be completed by the June target in the board discussion document. Trade union UNITE welcomed the assurance that no staff would lose their jobs in the short term, as many had feared they could be made redundant before Christmas.

UK | ECONOMY

UK set to announce infrastructure programme

The British government said there was "no quick fix" to the country's debt problems, amid reports that a planned major infrastructure programme is to be financed with the help of foreign investors, including China, DPA reported. George Osborne, the Chancellor of the Exchequer, said last Monday that the government would stick to its strict deficit reduction strategy and resist borrowing more money to get out of debt. However, it was reported that Osborne is looking to private investors and foreign sovereign wealth funds to raise money for infrastructure projects in an attempt to breathe new life into the stalling economy. The Financial Times reported that Osborne is expected to announce an investment programme totalling 30 billion ($46.6 billion) to improve rail and road links during a budget statement in parliament on 29 November. Around 66% of the money for the 10-year programme would be provided by pension funds and the remaining third could be raised through the China Investment Corporation (CIC), the paper said. It is also expected that Osborne will have to downgrade government growth predictions for the next few years. On 28 November, the Paris-based Organization for Economic Cooperation and Development (OECD) predicted that Britain could be heading for a so-called double-dip recession, with the economy expected to grow by a mere 0.5% in 2012.

IRELAND JOBS

Software rm creates hi-tech jobs

Software company Ammeon is embarking on a major jobs expansion. The telecommunications software company said it is creating 75 highly skilled jobs, of which 46 were filled in the past few weeks at its global headquarters in Dublin, with an additional nine positions at its British subsidiary in Reading, Irish Examiner reported. Ammeon chief executive Fred Jones said the company now intends to complement these in early 2012 with 20 jobs for graduates and returning emigrants, as agreements are signed with telecommunications carriers. The company said the new jobs, for software architects, senior software developers and business development specialists, are part of an ongoing expansion strategy focused on assisting the migration of telecommunications carriers and infrastructure providers to cloud-based services architecture. "This announcement represents an investment in our continued confidence in the quality and expertise of Irish software engineers and their proven technical ability, Jones said. Ammeon said new contract wins in Europe and the Americas have accelerated its growth strategy.

THE EUROPEAN UNION

New Europe | Page 25 December 4 - 10, 2011

ITALY SPAIN PORTUGAL

SPAIN ECONOMY ITALY|ENERGY

Final quarter to toll heavy on yearly gures

The deteriorating economic condition of the European economy and the yetto-be-taken decisions regarding the final shape of the recovery mechanism have continued to dent Spains economic performance, the latest monthly report released by the Spanish central bank showed. Though concrete figures had yet to be revealed, the bank noted that based on primary available information indications were clear that the performance of the Spanish economy was headed for a downslide in the final quarter. Regarding the reasons those aggravated the over situation, the Madrid based bank stressed that the weakness of demand and activity could primarily be attributed to the worsening financial tensions because of the aggravation of the sovereign-debt crisis. The surged borrowing costs of Spain is blamed for the stagnating of the economy which in turn has already pushed up the unemployment rate to 22.6% in September, far more than be deemed as comfortable for the Spanish authority. The soared financing costs have also heavily affected the lending segment. The overall situation has raised eyebrows of the experts who now want to wait and watch how the Mariano

Eni buys 32.5% in Australian offshore field

On 29 November, Italian energy giant ENI said it bought a 32.5% stake in the Evans Shoal natural gas field in the Timor Sea, in a deal with Santos. At the end of October, Santos said it sold its 40% in the undeveloped Evans Shoal permit, offshore northern Australia, for up to $350 million. Santos will get an initial payment of $250 million, plus a further $100 million subject to a final investment decision being made for the development of the field, and dependent on the level of proven reserves at the time the decision is made.

ITALY|LOANS

IMF: Not in discussions with Rome, Madrid

The International Monetary Fund (IMF) said on 29 November it was not in talks with Italy or Spain about bailouts. Eurozone officials had signalled that the currency bloc was looking to the IMF to help with debt crises, as efforts to boost the region's own bailout fund were falling short of expectations and worries grew about the ability of Rome and Madrid to weather the debt crisis. "The IMF wishes to reaffirm that there are no discussions with the Italian nor the Spanish authorities on any form of IMF financing," IMF spokesman Gerry Rice said.

(Left to Right) Popular Party General Secretary Dolores de Cospedal, the party's president and Spain's future prime minister, Mariano Rajoy, and Andalusian Popular delegate Javier Arenas, prior to the national meeting of Popular Party regional presidents and delegates in Madrid, Spain, 1 December 2011. |EPA/SERGIO BARRENECHEA

Rajoy would tackle the situation and force further austere measures as most of those are likely to be unpopular and stringent. Prime minister-elect Mariano Rajoy has pledged to meet the outgoing administrations deficit target for 2012 of 4.4% of GDP, even as the economy is expected to fall short of a 2.3% growth forecast. Notably, the Paris based Organisation for Economic Cooperation and Development (OECD) recently cut its forecast for Spains 2012 growth to 0.3%. That was significantly lower than

the previous OECD estimate of 1.6%. The organisation now foresees growth of 0.7% this year, in line with the governments revised forecast of about 0.8%, and predicts unemployment will rise to 22.9% next year. Rajoy made a campaign pledge to overhaul laws on collective wage-bargaining and to encourage the use of open-ended contracts instead of temporary arrangements. The Peoples Party leader has won the biggest majority of any Spanish party since 1982 with the promise of taming the overshooting economy.

SPAIN|INVESTMENT

Chinese entrepreneurs resist economic crisis

The Industrial and Commercial Bank of China (ICBC) is doing well in Spain. It is "already making a profit, in less than a year's time," said Liu Gang, ICBC general director for Spain. The subsidiary employs 16 Chinese and only two Spaniards, in a reflection of what many Spaniards see as the inward character of the country's Chinese community. Spain's economic stagnation and 21.5% unemployment do not deter Chinese entrepreneurs. Chinese immigrants in Spain sent 252 million to their country of origin in 2010.

ITALY ECONOMY

EU concerned Italys crisis could spread into eurozone

On 28 November, a European Commission's monitoring mission to Italy warned in a report that the Mediterranean country can weather a "short-lived" spike in debt refinancing costs, but could fall victim to "a self-fulfilling" market run that would push it to insolvency and bring down the rest of the eurozone, Deutsche Presse-Agentur (dpa) reported. "Thanks to the relatively long average maturity of Italy's public debt a short-run increase in borrowing costs has a limited impact on its overall interest bill," the report read. "But persistently high interest rates increase the risk of a self-fulfilling 'run' from Italy's sovereign debt. A liquidity crisis could then turn into a solvency crisis, whose repercussions for other large euro area countries would be very acute, given their exposure to the Italian economy," it warned. They urged new Italian Prime Minister Mario Monti to safeguard "social equity and fairness" as he implements the necessary austerity and economic reform measures, and explain to public opinion why urgent action is necessary. "The government needs to clearly and convincingly explain the unbearably high costs of failure, pit the benefits to the society as a whole against the unavoidable resistance from vocal interest groups' loath to lose their special privileges, and ensure that everybody contributes to the adjustment efforts," the EU report said.

SPAIN|MEDIA

Spains RTVE may seek fresh credit

RTVE, Spains state-owned radio and television station, recently launched negotiations with lenders for a new tranche of loan to plug the hole in its coffer, Cinco Dias reported last week citing anonymous sources. According to the report, RTVE may face a shortage of liquidity next year because of delays caused with a new governments budget plans and from telecommunications companies and commercial television stations not paying fees.

PORTUGAL BUDGET

PORTUGAL|CRIME

Parliament gives nal green light to austerity budget

The parliament of debt-ridden Portugal on 30 November definitively approved a controversial austerity budget for 2012, even as protesters gathered in front of the parliament building. The budget was based on principles agreed upon with the European Union and the International Monetary Fund, which have granted Lisbon a bailout worth 78 billion. It was pushed through with the votes of the two governing conservative parties, which have an absolute majority in parliament. Finance Minister Vitor Gaspar admitted the budget was "the most demanding in Portuguese history," but defended it as being necessary "to recover the trust of the Portuguese, of markets and of the international partners." The main opposition Socialist Party, which abstained from the vote, described the budget cuts as "exaggerated" and as "socially unfair." Far-left parties voted against the budget. Protesters mobilised by the trade union confederation CGTP filled the streets in front of parliament.

Austerity fuels crime in recession-hit Portugal

Portugals Prime Minister Pedro Passos Coelho's austerity measures are contributing to an increase of crime in Portugal, social workers and security experts warn. Spending cuts in areas such as health and pensions by the previous and current governments -- combined with a 12% unemployment -- are plunging growing numbers of people into poverty. "Violent crime is rife as the financial crisis advances," the daily Publico headlined recently. Thefts of foodstuffs increased by 42% in the first six months of this year, the security observatory OSCOT said.

New Europe | Page 26 December 4 - 10, 2011

THE EUROPEAN UNION

AUSTRIA SLOVENIA MALTA

MALTA|TOURISM

Total nights spent rises 3.9% in October 2011

According to Tourstat data for October, inbound tourism is estimated at 147,708, a slight increase when compared to the corresponding month last year. Total nights spent went up by 3.9 percent to nearly 1.2 million, Maltas National Statistics Office reported. During the month under review, 126,868 inbound tourist trips were undertaken for holiday purposes, while the number of business trips was estimated at 12,783. Holidaymakers registered an increase of 4 percent over last year. Overall, first-time visitors accounted for 69 per cent of inbound tourists and increased by 2 percent when compared to October last year. Overall, 87 percent of inbound tourists came from EU Member States, and in particular from the euro area. The main markets for incoming tourists were the UK, Germany and Italy. Total nights spent by these tourists were estimated at almost 1.2 million, the majority of which were spent in collective accommodation establishments. Nights spent in private accommodation were 11 per cent higher when compared to last year and stood at 360,283.The overall average length of stay was calculated at 8.0 nights, up by 0.3 of a night when compared to last year.Total tourist expenditure reached 127 million euro, a notable increase when compared to last year.

AUSTRIA ECONOMY

Beer prices to climb

One of Austrias biggest breweries decided to increase its consumer prices, Austrian Independent reported on 29 November. Ottakringer Viennas major beer firm said it would charge three to five per cent more for its products. The price hikes will be felt by shoppers from March, according to business experts. A spokesman for the company claimed that "all the others" were raising their prices as well. Ottakringer argued it was challenged by rising production process costs. The firm explained that all ingredients but hop had become more expensive in the past months. Ottakringer most recently introduced a consumer price increase last March when its 0.5-litre beer bottles and cans became two Eurocents dearer. Other breweries are expected to follow the example of Ottakringer shortly. The Viennese enterprises statement came only weeks after Germanys leading beer producer, Radeberger, revealed it would increase its prices in February 2012. Radeberger officials said the firm was forced to raise consumer prices to cover soaring electricity prices and other cost increases. Ottakringer has its headquarters in the Viennese district of Ottakring. The companys factory is situated in Ottakring as well. Ottakringer merged with mineral water manufacturer Voslauer in 2009. The beer company sold over 616,000 hectolitres of lager in 2010. Ottakringer and Voslauer have around 360 employees altogether. Ottakringer is one of the busiest Austrian producers of beer. The domestic market is dominated by Brau Union which manufactures brands like Puntigamer and Zipfer. Ottakringers decision to increase prices follows news that Austrias inflation was 3.4 per cent in October.

AUSTRIA|BUSINESS

Strabag lands new orders worldwide

The environmental technology specialists of European construction group Strabag SE recently landed new orders worth a total of 110 million, it was reported on 30 November. All over the world, services are required in the field of flue gas treatment, the construction of water supply, wastewater treatment and solid waste treatment plants, as well as landfill construction and site decontamination. In Brazil, Strabag acquired the contract for the engineering and delivery of a flue gas treatment facility for petroleum major Petrobras. The company is also building a waste gas & waste liquid incineration plant in Singapore as well as five flue gas treatment facilities for Formosa Plastics Group in China and Taiwan. In Leskovac, Serbia, in Targoviste, Romania, and in Baishan, China, the company won the contracts to build three wastewater treatment plants. Strabag will also build a water supply plant in Bilisht, Albania and a solid waste treatment plant in Tychy, Poland. Strabag also pulled in contracts in the field of landfill construction, with an order in Ciuperceni, Romania. Further projects involve a biological waste treatment plant in Freudenstadt, Germany, as well as landfill remediation and site decontamination works conducted under joint ventures in Brckl and Rum, Austria, and Pont Rouge, Switzerland.

Workers clean the fan zone in Vienna, Austria 10 June 2008. Football fans visiting the Vienna fan zone for Sunday's Group B game between Austria and Croatia as well as the later match involving Germany and Poland consumed 32,500 litres of beer. Less consumption will be likely in the future. |EPA/GEORG HOCHMUTH

SLOVENIA ENERGY

Plan for new chain of hydro plants on Sava River conrmed

State-owned power utilities HSE, Gen energija and Savske elektrarne Ljubljana confirmed on 25 November with another document the planned joint construction of a 1.3 billion chain of hydro plants on the Sava river in central Slovenia, Invest Slovenia reported. The agreement on the project envisages ten plants on the Sava in the Ljubljana basin and the Zasavje valley, with the start of construction for three of them - Suhadol, Trbovlje and Renke - announced for the second half of 2013. The finalisation of the project, also including the Tacen, Gameljne, Sentjakob, Zalog, Jevnica, Kresnica, and Ponovice plants is expected within 20 to 22 years or 15 to 17 if construction can be secured at two sites simultaneously. HSE director general Matjaz Janezic assessed at the signing in Trbovlje that this was an important national project, securing a boost to power production without an increase in CO2 emissions. The share of HSE in the project will be 60%, while Gen energija will have 10% and Savske elektrarne Ljubljana 30%.

SLOVENIA ECONOMY

NKBM Group Incurs 4.4 mln loss in nine months

The group around Slovenia's second largest bank NKBM accumulated an operating loss of 6 million in the first nine months of 2011. The net loss for the period amounted to 4.4 million, while capital adequacy ratio was 12.78% at the end of December, NKBM said on 29 November, Invest Slovenia reported. In the January-September period, the group generated 63.7 million in operating profit before provisions and writeoffs or 63% of the plan for 2011. Operating profit of the core bank stood at 7.3 million, while net profit amounted to 6.2 million. Total assets of the Maribor-based bank stood at 4.8 billion at the end of September, which is 1% less than at the end of 2010. In the first nine months of last year, the NKBM group made a net profit of EUR 20.3m and the core bank a net profit of EUR 13.8m. Due to credit risks, the group had to set aside a total of 69.8 million in provisions and write-offs in the first nine months, which is 103.9% of the planned amount of provisions and write-offs for the entire year. Also contributing to the operating loss were lower net operating income and net interest income, losses from financial assets and liabilities, and lower revenues from investments in the equity of associated companies. Total assets of the NKBM group stood at 5.9 billion at the end of September to drop by 0.2% compared to the end of 2010. The decrease is primarily a consequence of repayment of loans from foreign banks, according to the report. On the other hand, an increase in customer deposits and equity in the first nine months partially offset the decrease in total assets of the banking group. The group generated a net interest income of 101.85 million, which was 71.5% of the annual plan, while the net fee and commission income totalled EUR 45.11m, accounting for 78.4% of the annual projection. For the first nine months, the group reported a 2.85 million profit from investments in the equity of associated companies, which is 57% of the annual plan. At the end of September, the total equity of the group amounted to 525 million, an increase of 86.02 million or 19.6% compared to the end of last year, as a result of a capital increase in the first half of 2011.

MALTA|BANKING

Bank of Valletta representative office back in operation in Libya

The Maltese financial institution Bank of Valletta (BOV) representative office in Libya resumed operations on November 13. The Bank had temporarily suspended its operations during the uprising in the country to ensure the safety of its employees, it was reported on November 29. The Banks Representative Office will continue to promote cross-border trade and investment between the two countries and to help provide the infrastructure necessary for Maltese business to seek new opportunities in Libya. Speaking upon his arrival in Tripoli, Mr Charles Saliba, Manager at the representative office, said, Since the Libya uprising of the 17th February 2011, Bank of Valletta has kept a close eye on the situation in Libya and we now consider the situation stable enough to open our doors to the public.

The fat of the land

THE NETHERLANDS HEALTH

BELGIUM NETHERLANDS LUXEMBOURG

NETHERLANDS|WASTE

THE EUROPEAN UNION

New Europe| Page 27 December 4 - 10, 2011

ship-generated waste collection cartel FINED

Three ship-generated waste collection companies based in the Dutch ports of Rotterdam, Schiedam, Vlaardingen and Maassluis have been imposed fines, totaling more than 2.9 million, for cartel activities.These companies are: Odfjell Terminals Maritiem B.V. (former AVR Maritiem B.V.), (227,000), International Slop Disposal B.V. (1,861,000) and Ships Waste Oil Collector B.V. (834,000), the Dutch Competition Authority (NMa) announced. They concluded price-fixing agreements, and shared work amongst each other, thereby eliminating competition.The NMa takes firm action against cartels, because they harm customers, which, in this case, are shipping companies that own ships. Henk Don, member of the Board of the Netherlands Competition Authority (NMa), explains: With cartels, prices are generally higher than in a situation where companies compete for customers. In addition, cartels make participants lazy after all, they do not need to fear any competition. Mr. Don adds: And that, subsequently, affects the quality of the services they offer, and it is disastrous for innovation. You no longer need to think about how to outsmart your competitor. Shipping companies try to get the best price possible for waste collection by requesting offers from multiple waste collectors.

Obesity rate in the Netherlands lower than in other OECD countries

BELGIUM|RETAIL

Delhaize wins best Belgian sustainability report for the second time
I have seen the future and it wobbles|EPA/Sam Stephenson

The proportion of obese people in the Dutch population has doubled within the last two decades, but is still below the average level across the OECD (Organisation for Economic Co-operation and Development) countries. At the same time, health care expenditure in the Netherlands is above the OECD average. Life expectancy in the Netherlands grows less rapidly than in many

other OECD countries, as is shown in the biennial OECD publication Health at a Glance. The percentage of people in OECD countries with serious overweight (obesity) has nearly doubled to 17% over the past 20 years. With 12%, the Dutch percentage in 2009 was far below the OECD average. Still, it has doubled over the past 20 years.

The same trend was observed in New Zealand. Obesity rates in the United States (US) and the United Kingdom (UK), have increased by approximately half. The UK obesity rate currently stands at 23%, but with more than one in three, the US has the highest obesity rate worldwide. The lowest rates are recorded in Japan and South Korea.

Tubular sells

LUXEMBOURG BUSINESS

Tenaris S.A, , a Luxembourg-based leading supplier of tubes and related services for the world's energy industry, on November 27 announced that its Brazilian subsidiary, Confab Industrial S.A. (Confab), has agreed to acquire 25 million ordinary shares of Usinas Siderrgicas de Minas Gerais S.A. (Usiminas), representing 5% of the shares with voting rights and 2.5% of the total share capital. The price to be paid for each ordinary Usiminas share is BRL36 representing a total cost to Confab of approximately $500 million. Under the transaction, Confab will join the existing control group of Usiminas, together with Nippon Steel, Ternium (an associate of Tenaris) and the Usiminas employee pension fund. Confab will thereby have the opportunity to have a

higher level of integration with the principal supplier of steel for its pipes and industrial equipment businesses and to develop synergies between its industrial equipment business and that of Usiminas. This would strengthen Confab's position as a supplier of specialized pipes and equipment to Brazil's offshore energy industry. The transaction, which is expected to close in January 2012, is subject to customary conditions and applicable corporate approvals by the Nippon Group. Usiminas is a leading Brazilian producer of high quality, flat steel products used in the energy, automotive and other industries. Confab is a leading Brazilian producer of welded steel pipes and industrial equipment for the energy industry and other applications.

Delhaize Group, the Belgian international food retailer, has won the prize in the category large companies for the second time, for its Corporate Responsibility Progress Report 2010, The Belgian firm awarded by an independent jury set up by the Institut Belge des Rviseurs dEntreprise (Belgian Institute of Company Auditors), Business and Society, a network of companies promoting corporate responsibility and Kauri, a multi-stakeholder network, actively promote corporate responsibility reporting in Belgium. Delhaize Group has already won the award for its 2008 report. Corporate Responsibility is largely the expression of who Delhaize Group is and how it wants to do business. It is one of the three pillars of the Group strategy, the New Game Plan, alongside Growth and Efficiency. This integrated strategy supports the companys economic performance while building a more sustainable business. Pierre-Olivier Beckers, President and Chief Executive Officer Delhaize Group said: The progress we are making in these six areas across the business makes us a stronger company, from sourcing more sustainably, to building a stronger associate base, reducing operational emissions and anticipating customer needs.

NETHERLANDS|CRIME

Senate agrees to DNA relationship test

The Upper House agreed to the use of DNA relationship tests in the fight against crime. This involves a new type of DNA test by which it can be ascertained whether a relative of the person whose DNA has been tested by the police and the Public Prosecution Service, is a potential offender of a crime. The application of relationship tests is urgently needed in the field. If the standard DNA test fails to provide any results, the identity of a suspect may yet be established or a potential suspect may yet be excluded by means of a relationship test, under specific circumstances. As DNA profiles of relatives are to a certain extent identical, a comparison of the DNA profile of a known person with the DNA profile of a trace secured from an unsolved crime may indicate whether the trace can be from a relative of that person. This may provide useful information in the criminal investigation. Relationship testing may be applied under specific conditions only.

BELGIUM DEVELOPMENT

Belgium ranked 16th in the Commitment to Development Index

The annual Commitment to Development Index compiled by the Center for Global Development ranks the 22 wealthiest countries in terms of their development efforts. Countries in Scandinavia are found at the top of the list this year, with Sweden in first place. Belgium shares 16th place together with France. Asian donor countries Japan (21) and South Korea (22) bring up the rear. Between 2003 and 2011, Belgiums total score has progressed slightly. The current score is 5.2, whereas in 2003 it was 4.5. Belgium does well as far as environment (7.6), development aid (7.0) and trade (6.3) are concerned. Regarding investment (5.6) and technology (4.7), our scores are only average, and our scores are poor in the areas of migration (4.0) and security (1.4).

Page 28 |New Europe December 4 - 10, 2011

THE EUROPEAN UNION

POLAND HUNGARY CZECH REPUBLIC

POLAND|ECONOMY CZECH REPUBLIC TRANSPORT

Individuals expect average inflation to remain

In mid-November, individuals expected average inflation in Poland to stand at 4.2% in the next 12 months. The latest data on households inflation expectations, released by the National Bank of Poland (CPI) on 30 November, indicate rising negative sentiment amongst the public, as compared with the previous survey conducted at the end of October. The percentage of respondents expecting price growth to accelerate over the next 12 months had risen from 22.3% in October to 28.0% in November. A slower pace of price growth is anticipated by 16.4% of the respondents, the figure having fallen from 14.2% recorded in October. Those believing that prices will continue to rise at the current pace still account for the largest and the most stable group of respondents. In mid-November, 47.9% of the respondents were of this opinion, as against 48.6% in the previous round. The average inflation rate as expected by individuals in the next 12 months is to stand at 4.2%, thus remaining unchanged on its October figure. The survey was conducted in mid-November, when the October CPI of 3.9% had already been announced. The National Bank of Poland regularly examines inflation expectations of individuals, financial analysts and professional forecasters. These provide one of the inputs to the monetary policy decision-making process.

Czech Railways derail nonperforming assets

Train in vain.| Petr Dadk

CZECH REPUBLIC|TRANSPARANCY

Czech Republic drops 4 places on TIs corruption scale

The latest report from the international corruption watchdog Transparency International (TI) placed Czech Republic 4 places down based on its assessment of the countrys corruption level. According to the TIs Corruption Perceptions Index (CPI), Czech Republic dropped to 57th in the global ranking from 53rd position last year. The revelation was indeed an uncomfortable piece of information for the Czech government who immediately refuted the reading. In a statement, Czech Prime Minister Petr Necas said the government has been gradually fulfilling its anti-corruption strategy. Necas said his government continues to view struggle against corruption as its crucial priority. "We eliminated mediators in arms purchases of the Czech military. We cancelled the tender for the removal of old environmental damage. The new law on public orders is a considerable step forward," Necas said in a press statement, putting weight behind his claim. Czech military orders were repeatedly challenged for their price, non-transparency, placement without tenders and the role of mediating firms. The controversial huge eco-tender was to cost over 50 billion crowns. Necas scrapped the tender under which a single firm was to be responsible for the whole order.

HUNGARY|BUSINESS

TriGranit plans no new development in Hungary next year

Hungarian construction company TriGranit will not launch new developments in Hungary next year while it will start new projects in Poland, Slovenia and Slovakia as well as will continue ongoing programmes, Trigranit CEO Arpad Torok, said, Budapest Business Journal reported. The group has 400-500,000 sq m area suitable for retail or office development in Hungary, including 147,000 sq m on Budapests Vaci street. They are ready to start preparations if demand appears but it makes no sense to start the process on a speculative basis, Torok added. Not only the market but intentions to finance are much worse now than they were at the beginning of this year or a year ago, he said.

In a bid to keep up with the increased competitive environment, the statement owned Czech railways operator CD recently unveiled plans of consolidating its personnel and services with the railway infrastructure administration SZDC, which owns the tracks. As part of the consolidation efforts, CD plan to dispose those assets which are not involved in transportation. This new proposal from the Czech transport ministry aims at cutting down costs as also at making a level playing field for CD which has been facing increasing competition from private carriers. "Given the entry of private carriers on the rails, it is necessary to resolve this issue, explained Czech transport ministry spokesman Martin Novak. He noted that CD owns a lot of assets that are now redundant and selling those assets would bring-in the extra money needed to retain the carriers competitive advantage. Such assets included warehouses and unused land which, according to the ministry, require unnecessary spending for their maintenance. The problem for CD first surfaced in October when private carrier RegioJet launched its Prague-Ostrava-Havirov. Soon to retain its competitive edge, CD implemented several service improvements on its own long-haul trains and

also lowered its prices to meet those of RegioJet. The latest proposals from Transport Minister Pavel Dobes aims at selling all the railway stations and property of CD to the SZDC, municipalities and regions, a sale that is expected to bring in between 10-12 billion Czech crowns. RegioJet officials immediately protested the property sale plan, saying it would provide illegal state support for CD. "Creation of a holding structure that would make clearer all the financial flows for use of stations and other infrastructure would be a step (to make companies more transparent and equal)," RegioJet spokesman Ales Ondruj was quoted as having said to local media. "Nevertheless, we would not accept any decision that could serve as a secret donation or financial support of CD, meaning for example the sale of such property and use of the money for supporting CD passenger transportation. Such a money transfer would be considered (outlawed) financial support from the point of view of EU legislation," Ondruj asserted. However the initiative cannot to be attributed to the current ministry alone. The idea of consolidating services between CD and SZDC started under former transport minister Vit Barta, who spoke of creating a holding com-

pany to improve transparency and the flow of European Union funding. The transport ministry is now saying it is too early to discuss any holding structure or holding company, but they have moved forward with consolidation of the two companies. In August, Dobes signed an agreement on the transfer of 9,500 employees from CD to SZDC, including dispatchers, switchmen and signalmen. RegioJet has said it plans to expand its services, and even made a proposal to the transport ministry to run all InterCity (IC) and EuroCity (EC) routes free of government subsidies. The increased competition could strain D. The transport ministry is working on a bill that would anchor the annual 2.6 billion crowns in financing for regional railway transport by the middle of 2012, a subsidy that currently requires regions to apply for compensation for losses they can prove from running regional rail routes. Finance Minister Miroslav Kalousek said the memorandum on the subsidy structure was not legally binding, and the financing in the 2012 budget was short 600 million crowns, which Dobes said would be made up for with state money, the transport ministry budget, by CD and SZDC, and 100 million crowns from regions.

HUNGARY BUSINESS

Grundfos to pump up the volume

Danish pump maker Grundfos will build a HUF 9 billion plant in Szekesfehervar, its fourth in Hungary, Grundfos Magyarorszag managing director Laszlo Torok announced, Budapest Business Journal reported. Grundfos will spend about HUF 4 billion to build the 15,000 sq m plant in 2012 and 2013 and a further HUF 4-5 bilion on equipment in the following years, Torok said. About 400 people will work at the plant by 2015, he added. Grundfos will make giant industrial pumps at the plant, a new activity for the company. It expects most orders for the pumps to come from Russia, Eastern Europe and South Korea. Grundfos Magyarorszag expects to close 2011 with revenue of HUF 106 billion, up from almost HUF 90 billion in 2010. The unit employs 1,900 people on a combined production area of 65,000 sq m.

THE EUROPEAN UNION

New Europe | Page 29 December 4 - 10, 2011

SWEDEN DENMARK FINLAND

DENMARK SHIPPING FINLAND|AVIATION

Maersk reaps prots and praise by taking it slow

Its not often that you hear of businesses boosting profits by slowing down, but thats exactly what the Danish shipping giant Maersk Line has done. In addition, the company has earned the praise of environmental agencies for significantly cutting its carbon dioxide emissions. Since 2008 Maersk has been saving huge amounts of both cash and emissions by reducing sailing speeds by an average of 27%. We finally dropped the old paradigm of just going faster and faster. This way is simply better for the bottom line and the environment, Jacob Sterling, Maersk Lines head of climate and environment, said. The initiative is called slow steaming and it has taken hold throughout the global shipping industry not just at Maersk in large part because of its financial and environmental benefits. The 20% speed reduction saves 40% in fuel with matching reductions in carbon dioxide emissions. And for a company with annual fuel bills of around 33 billion Danish crowns, those savings are nothing to sneeze at. To compensate for the slower sailing speeds, the shipping giant has increased frequency by adding one to two ships to each of its routes. Yet even with the extra ships, Maersk estimates that it has reduced emissions by seven percent per

Finnair to end four Airbus A320 leases

Finnair said in a statement it would shed four Airbus A320-series aircraft from its narrow-body fleet by terminating lease agreements by next autumn, News room Finland reported. The struggling Finnish flag carrier said the decision formed part of its 140-million cost cut programme.

DENMARK|GREEN ENERGY

Denmark aims for 100% renewables in 2050

Danish government proposals have called for generating just over half of its electricity from wind turbines by 2020 and all of its energy from renewable sources in 2050. This is an historical effort to become even better at saving energy and create an even more competitive and energy-effective company culture in Denmark, also for households, Minister for Climate, Energy and Building Martin Lidegaard said. The plan is likely to be expensive for both taxpayers and businesses, and so to prevent companies from moving jobs to lower cost countries, a fund has been established to help subsidise the switchover. Under the terms of the plan, 250 million Danish crowns a year will be made available until 2014 after which it will rise to 500 million crowns. However, despite its green credentials in wind energy, which account for 20% of its power mix and make it a world leader, the country has virtually no hydropower and no nuclear installations, rendering it heavily dependent on coal. In 2010, coal lay at the source of 44% of total Danish power generation and fossil fuels accounted for around two-thirds. The governments proposal called for coal-fired power plants and oil-fired heating to be phased out by 2030. Coal heating would be replaced by biomass. Despite a cost of 5.6 billion crowns ($1 billion) in additional spending in 2020, Lidegaard said that the decision to phase out fossil fuels was equivalent to buying an insurance policy against the risk of the market in the next 10 years. The conclusion being it has a cost to make a green transformation, but it also has a cost not to do it, Lidegaard said.

Its greener and easier to photograph Maersk shipping now they are travelling slower to save emissions and fuel.| EPA/INGO WAGNER

container since embracing slow steaming back in 2008. Verdensnaturfonden, the Danish division of the World Wildlife Foundation (WWF), praised Maersk for committing to reducing emissions. Maersk Line in particular has made a serious and broad effort, John Nordbo, Verdensnaturfondens head of environmental and climate projects, said. According to the shipping industry analysts Mirae Asset Securities widespread adoption of slow steaming is the biggest thing that has happened to the global shipping industry since the Second

World War. And theres no foreseeable reason why shippers will speed up again when the economy does. Besides the cost savings and environmental advantages, Maersk maintains that slow steaming allows it to serve customers better by making scheduling and logistics more predictable. The company has even invested in 20 of the gigantic, four-cornered Triple-Eclass ships. Triple-Es are 30% more energy efficient than other new container ships and are actually designed to sail more slowly and thats a good thing.

SWEDEN AUTOS

Volvo to add 10,000 staff... in China

Swedish automaker Volvo, owned by China's Zhejiang Geely, plans to hire a further 10,000 new staff in the coming years, its chief executive said in an interview, The Local reported. Most of the new staff will be added in China. "We will increase our staff to between 33,000 and 35,000 by 2020," Stefan Jacoby said. The company currently employs around 24,000 people worldwide -- around 16,000 in Sweden, 5,000 in Belgium and 1,000 in China as well as 2,000 in other countries. Jacoby said Volvo aimed to sell 800,000 vehicles per year by 2020, one-quarter of them in China, now the world's biggest auto market. In 2010, Volvo sold about 374,000 vehicles worldwide, with sales rising by 29% in northern Europe and 36% in China. Geely bought Volvo from Ford last year. While Sweden's other major car brand, Saab, continues its battle to escape bankruptcy, Volvo's announcement is a clear statement of intent. The Local reported in October that Geely had approached Saab's re-constructor, lawyer Guy Lofalk to express an interest. The firm refused however to confirm the reports and with Saab's bankruptcy protection set to be lifted in December the speculation has cooled off.

FINLAND|INDUSTRY

Transport industry agreement seals Finnish framework pay deal

The Finnish Transport Workers' Union (AKT) and the industry's employers' group reached an agreement on a two-year pay deal in the wee hours of last Monday, removing the final obstacle to the ratification of a framework incomes agreement struck between union and employer confederations and the government last month, News room Finland reported. Neither side disclosed any details about the transport industry agreement, which came after the two sides traded accusations throughout previous Sunday. Previous week the government extended its deadline on the ratification of the framework deal to last Monday morning.

DENMARK BUSINESS

Grundfos to build HUF 9 bln plant in Hungary

Danish pump maker Grundfos will build a HUF 9 billion plant in Szekesfehervar, its fourth in Hungary, Grundfos Magyarorszag managing director Laszlo Torok announced, Budapest Business Journal reported. Grundfos will spend about HUF 4 billion to build the 15,000 sq m plant in 2012 and 2013 and a further HUF 4-5 bilion on equipment in the following years, Torok said. About 400 people will work at the plant by 2015, he added. Grundfos will make giant industrial pumps at the plant, a new activity for the company. It expects most orders for the pumps to come from Russia, Eastern Europe and South Korea. Grundfos Magyarorszag expects to close 2011 with revenue of HUF 106 billion, up from almost HUF 90 billion in 2010. The unit employs 1,900 people on a combined production area of 65,000 sq m.

FINLAND|BUSINESS

Nokian Tyres to cut jobs in heavy tyres arm

Finland's Nokian Tyres said in a statement it would cut output in its heavy tyres arm in response to falling demand, News room Finland reported. "The order book for heavy tyres has decreased and demand estimates for 2012 have weakened," the statement added. Nokian said it would launch a statutory cooperation procedure talks round affecting all 260 staff of the heavy tyres division.

Page 30 | New Europe December 4 - 10, 2011

THE EUROPEAN UNION

LATVIA LITHUANIA ESTONIA SLOVAKIA

SLOVAKIA|EU AFFAIRS LATVIA AIRLINES INDUSTRY

Bratislava prepares for Schengen assessment

The Slovak government on 30 November approved a Schengen action plan prepared by countrys interior ministry. The country is due to again undergo a Schengen assessment starting in February 2012. According to the plan there is a need to complete the system of technical and physical protection of Slovakia's and the EU's external border with Ukraine. The Schengen assessment will review Slovakia's readiness to carry out inspections at its external borders during crisis situations caused by natural disasters, epidemics or an extensive wave of migration. Slovakia is planning to establish its own system of air support for the external Schengen border aimed against illegal immigration and human trafficking through the purchase of two helicopters with equipment enabling both daytime and night-time surveillance. A specialised body for monitoring illegal imports, exports and transport of drugs and other illegal substances also will be set up at the Kosice airport. Slovakia became a member of the Schengen zone in December 2007.

Latvia defends airline buyout after bank collapse

SLOVAKIA|DEFENCE

Slovakia to combat smuggling of nukes

Slovakia will become the first EU country to join a US initiative designed to combat the smuggling of nuclear materials, after the government passed a joint action plan to curb the illegal use of nuclear and radioactive materials last Wednesday, Slovak spectator reported on 1 December. "This represents an appreciation of our capabilities ... There's significant scope for mutual co-operation. Slovakia belongs among the countries with experience in this field and can contribute to the process of enhancing the capabilities of other countries," the Slovak Foreign Ministry said in a statement. The US initiative stems from the conclusions of the 2010 Nuclear Security Summit in Washington. Slovakia will be tasked, among other things, with establishing an agency charged with radiation protection.

In October, the government ended months of wrangling with airBaltic's management and approved a deal involving a 100 million lats injection from the state and BAS. |BELGA PHOTO/MICHEL KRAKOWSKI

The Latvian authority last week appeared poised to defend the nations interests in the business sector that directly relates to its fiscal security through an urgent nationalisation drive. At issue was the Latvian transport ministrys buy-out of a minority stake of airBaltic from Baltic Aviation Systems (BAS). On 30 November, the government said it had exercised its right to buy the 47.2% of airBaltic shares belonging to BAS. The deal gave the government a near-total ownership of the national carrier. In a statement published on 1

December, the government defended its decision as a necessary move in the wake of Krajbanka collapse. According to the Latvian authority, the deal was a good one for the state, with the cost of the shares relatively small compared to the benefits the country would gain. The deal raised the state's stake in airBaltic from 52.6% to 99.8%. BAS' German co-owner Bertolt Flick slammed the deal. "It is obvious that 200,000 lats for 47.2% of airBaltic shares is an inadequately low amount," Flick said in a statement, claiming the government had "missed

a valuable business opportunity." In October, when Flick was ousted as the chairman of BAS, the government ended months of wrangling with airBaltic's management and approved a deal involving a 100 million lats injection from the state and BAS. At the time, it said the aim was to return airBaltic to profit by 2013. Also the state had plans to float the airline on the stock exchange the following year. Since the nation of 2.2 million joined the EU in 2004, airBaltic has won a reputation as a lowcost regional force.

SLOVAKIA|ENERGY

Eustream enables reverse flow of gas

On 30 November, Eustream officially completed a project worth more than 1 million to allow reverse flow of natural gas from the Czech Republic and Austria to Slovakia, Slovak spectator reported, citing Eustream spokesperson Danica Beharkova, on 1 December. Under normal circumstances, natural gas arrives in Slovakia from Russia via Ukraine, some of which is then exported to Austria and the Czech Republic. The project, cofunded by the EU, was approved by the European Commission as part of the European Energy Programme for Recovery (EEPR) and involved the installation of highpressure equipment at the intra-state pressure reduction station in Plavecky Peter (Trnava Region) and the compressor station in Ivanka pri Dunaji (Bratislava Region). "Slovakia's transmission network is able to move natural gas from the west to the east in standard mode now, thereby diversifying transmission routes of gas supplies as needed," said Beharkova. The project was drafted in January 2009 in reaction to a gas crisis in which Slovakia found itself cut off from natural gas supplies because of a dispute between Ukraine and Russia. Eustream was able to provide reverse flow in 2009, but only in manual mode and for limited volumes. As of winter 2011, reverse flow can be initiated automatically by the transmission dispatching centre.

LITHUANIA ECONOMY

Vilnius expecting growth to ease next year

In line with most of its European peers, Lithuania too is expecting to experience the affects of the sovereign debt crisis in the Eurozone. In the latest update of its outlook last week, the Lithuanian finance ministry said it now expects to see a 2.5% surge in the countrys GDP next year, sharply cutting its earlier 4.7% projection. "It is likely that the worsened perspectives on export markets will reduce the demand for Lithuanian exports," the ministry said. The Lithuanian economy is principally export reliant. The nation of three million exports about 60% of its production to fellow European Union states. Despite the negatively revised outlook on next year, the finance ministry did not change this year's growth forecast of 5.8%, nor its projections for 2013 and 2014, when output is expected to expand by 3.7 and 3.4%. The lower growth forecast will also force Lithuania to review the 2012 draft budget being discussed by parliament. Lithuania, which hopes to join the euro in 2014, had aimed to squeeze its public sector deficit below the EU limit of 3.0% to 2.8% of gross domestic product.

ESTONIA FARMERS

Tallinn, Riga concerned over direct payments to farmers

Estonia and Latvia have agreed on common objectives of Latvia and Estonia in the multi-annual financial framework of the European Union for 2014-2020 to achieve fairer conditions for direct agricultural payments. The common position was announced after the recent meeting between Estonian Minister for Agriculture Helir-Valdor Seeder and Latvian Prime Minister Valdis Dombrovskis. The Latvian premier emphasised that the current proposal of the European Commission does not provide equal support to all EU farmers and the total common agricultural policy budget should not be reduced, local media reported. Latvia holds a view that it is necessary to set a minimum level of direct payments in the amount of at least 80% or about 214 per hectare of the EU average. The Estonian minister reportedly expressed readiness to co-operate in defending the common interests.

THE EUROPEAN UNION

New Europe | Page 31 December 4 - 10, 2011

GREECE CYPRUS
GREECE ECONOMY CYPRUS|DIPLOMACY

IMF to discuss Greece's efforts to stem debt crisis

Cyprus offers terse rebuff to Turkish offer

By Nathan Morley
The Cypriot government has issued a terse rebuff to Turkey, after Ankara offered to open its ports, airports and airspace to Greek Cypriot traffic, but with conditions. Turkish EU Minister Egemen Bagis described his scheme as a Taiwanese-style diplomatic arrangement, claiming it would help drive sluggish UN reunification talks which have been ongoing since 2008. The minute a British Airways, an Air France, a KLM, a Lufthansa plane lands at Ercan airport [in Turkish Cyprus], Turkey is ready to open all of her airports, sea ports and air space to Greek Cypriot planes and vessels, Bagis said Ercan airport, known as Tymbou by Greek Cypriots, is considered an illegal point of entry into and exit from the Republic of Cyprus and is not used by international airlines, except Turkish carriers. In a statement, Nicosia made clear that any attempt to link the issue of direct flights to and from the Turkish controlled Cyprus, to the opening of ports to Cypriot vessels is void and unacceptable. The real intention of Turkey is not the successful conclusion of the ongoing negotiation process to find a solution to the Cyprus problem, but to upgrade the status of the secessionist entity in the occupied areas and to undermine the Republic of Cyprus, the statement said. In 2005, Turkey signed a protocol extending its customs union to the EU-10 states, but at the same time Ankara issued a declaration saying that its signature did not mean it had recognised the Republic of Cyprus. Turkey also refused to open its ports and airports to Cyprus irking EU ministers and raising questions about how serious Ankara was about joining the bloc. The Turkish government insists that under the EU's own treaties, Cyprus with its unsettled territorial questions should never have been allowed in the EU whilst divided. Separately, the UN Secretary Generals Special Adviser on the Cyprus issue Alexander Downer has said the current stage of the peace talks are progressing as planned, with the process of confidence building between the two sides continuing. We need to try and get agreement on the core issues, he said, adding that there have of course been some convergences on core issues in the past but we need to build convergences on the other core issues as soon as we reasonably can. At the end of the day they make all the decisions, and they are their policies, not ours, he said, adding that we do not mediate or arbitrate in this process but we do what we can to help. Last week President of the European Parliament Jerzy Buzek said that a speedy settlement to the Cyprus problem was in the "best interest of Turkey and the EU". The Polish MEP was speaking during an official visit to Turkey and after meeting Turkish president Abdullah Gul. I re-affirm our continuous support for Turkeys ongoing accession negotiations with the EU. Good friends should be honest. We must overcome the current stalemate in our negotiations. We should work to unblock chapters where we can, but full implementation of the Ankara protocol would give the accession process a huge boost, he said.

Two men stand next to anchored ships at the port of Piraeus during a 24-hour general strike in Athens, Greece, 1 December 2011. |EPA/ALKIS KONSTANTINIDIS

IMF officials will meet on 5 December to discuss Greece's efforts to stem its debt crisis, Fund spokesman Gerry Rice told reporters. The review is key to whether Greece receives a sixth instalment of bailout funds. The IMF's goals for Greece have not changed, Rice said, insisting that the pain of austerity measures being instituted by Greek officials should be felt across socioeconomic lines, including the wealthier citizens. The 17 finance ministers of countries that use the euro converged on EU headquarters on 29 November where they approved the next instalment of the country's bailout loan 8 billion. Without that money, Greece would have run out of cash before Christmas, leaving it unable to pay its employees or provide services. The instalment is part of a 110 billion bailout package from eurozone nations and the IMF that has kept Greece

afloat since May 2010. Greeces Prime Minister Lucas Papademos sent a letter to European Union officials and the International Monetary Fund (IMF) pledging the governments commitment to economic and financial changes, including a debt swap. The government is determined to continue the process of fiscal consolidation and structural reform in order to secure sound public finances and improve the countrys international competitiveness, Papademos wrote. Meanwhile, on 1 December, public services were paralysed across Greece and workers took to the streets in a new 24-hour nationwide strike to protest against the government's ongoing austerity drive. In the seventh nationwide strike this year, government offices and public services - including tax offices, customs offices, schools and courts remained shut - while hospitals operated

on emergency staffing. he walkout halted train services, while ferries remained anchored at ports across Greece as seamen joined the 24-hour walkout. Flights were not expected to be disrupted, however. In related news, the National Bank of Greece, the country's biggest lender, and two smaller competitors posted ninemonth losses as they wrote down their holdings of government debt and clients pulled deposits. National Bank had a net loss of 1.35 billion compared with a 259 million profit in the year- earlier period. Agricultural Bank of Greece and Hellenic Postbank said their losses widened by about 10-fold. The outflows for Greek banks continued after September, with Greek banks losing as much as 14 billion in the two months to the end of October, George Provopoulos, head of the Greek central bank, told lawmakers in Athens.

GREECE DIPLOMACY

Athens, Tel Aviv discuss energy, environment co-operation

Greeces Environment, Energy and Climate Change Minister Giorgos Papakonstantinou wrapped up a visit to Israel on 28 November where he met both Israels National Infrastructure Minister Uzi Landau and Environmental Protection Minister Gilad Erdan. Papakonstantinou discussed issues of energy, the environment and water management. We had a very productive meeting with Mr. Landau during which we examined all the possibilities for a closer political and commercial partnership between the two countries, aiming at the exchange of technology and promoting private investments, especially in the important area of water management, Papakonstantinou said. Meanwhile, Papakonstantinou said during an Interview with the Jerusalem Post, a copy of which was released by the Greek ministry, that the new government in Athens could open a pipeline to export natural gas from countries including Israel to destinations in northern Europe, as Greece seeks to become a regional center for the transit of this energy source. We are trying to make Greece the hub for gas transit to northern European countries either via Italy or through the Balkans, Papakonstantinou told the newspaper. The scientific evidence that we have shows that there are reserves in both places we have to see how large these reserves are, he said, noting that these reserves should help restore some of the balance and improve energy self-sufficiency in Greece and also provide some exploration opportunities to international, and perhaps Israeli, companies. While this process was only launched about six months ago, and probably wont be in full-swing until next year, it has raised Greek ambitions and hopes, Papakonstantinou noted. Also in the Mediterranean natural gas realm, the Greek minister stressed that co-operation with neighbouring Turkey is vital to his country, in order, for example, to bring gas from the Caspian Sea to northern Europe.

Page 32 | New Europe December 4 - 10, 2011

BULGARIA ROMANIA

THE EUROPEAN UNION

BULGARIA|BANKING

Banks' combined profit at 514mn leva in October

The net profit of Bulgaria's banking system was 513.6 million leva at the end of October 2011, 29mn leva higher than the previous month, data from the Bulgarian National Bank (BNB) showed. In annual terms, Bulgarian banks' combined profit went down by 0.54%. The overall sector results were chiefly dragged down by impairments costs, which rose by 12.3% month-on-month, or by 117 million leva, in October. Bad loans grew by 221.9mn leva to more than nine billion leva in October against a month earlier, accounting for 22% of banks' combined loan portfolio.

Government reconsiders plans to raise retirement age

BULGARIA LABOUR

ROMANIA|TECHNOLOGY

IBM opens first European software test lab in Bucharest

American company IBM recently opened the Bucharest Systems Laboratory, the companys first European site for developing and testing IBM switch and networking hardware and software, it has announced, Romania Insider reported on 1 December. IBM employs 125 engineers in the laboratory, working on IBM software products through technology deployment and software development, code writing and testing, and bug fixing.
Supporters of Bulgarian Trade Unions shout slogans during a protest rally in Sofia, Bulgaria 30 November 2011.|EPA/VASSIL DONEV

ROMANIA|DIPLOMACY

Bucharest, Tel Aviv ink documents to boost ties

The Romanian and Israeli governments have had the first inter-governmental meeting, event which marks a new stage in bilateral co-operation in fields of interest such as: economy, agriculture, labour security, environment protection, education, emergency medical assistance, tourism promotion. In this context, Romanian Prime Ministers Emil Boc and his Israeli counterpart Benjamin Netanyahu have had a bilateral meeting and signed a Joint Statement of the two Cabinets, document which will regulate the priorities of bilateral co-operation in short and average run. This includes the majority of bilateral co-operation fields. Boc said he has appreciated that the RomanianIsraeli intergovernmental meeting marks the beginning of a new stage in the bilateral relations of over 60 years, and the Romanian side wants it to be marked by a closer bilateral cooperation in all fields of common interest. Boc also said that the talks focused on cooperation in IT, energy, focusing on renewable energy, infrastructure, agriculture, tourism.

After thousands of people marched and rallied on 30 November in Sofia, Bulgarian officials changed a plan to increase the retirement age by a year in 2012. Lawmakers of the ruling Gerb party and government officials told trade unions they would instead increase the age in four- month increments each year starting in 2012, until it reaches 65 for men and 63 for women, from 63 and 60,

respectively, BTV television quoted Menda Stoyanova, the head of Parliaments budget committee, as saying. Over 10,000 people gathered before the building of the National Assembly in downtown Sofia to protest against the increase of retirement age and the abolishment of bonus for length of service. Since early morning buses coming from across the

country blocked Sofia centre and caused an awful traffic jam. People from all regions had come to express their dissatisfaction with the pension reform. After two-hour chanting and demands for resignation of the government trade union leaders Plamen Dimitrov and Konstantin Trenchev entered the parliament to hand in the protesters declaration.

Economic sentiment weakens in November

Bulgaria's economic sentiment indicator (ESI) declined by 1.7 points to 93.7 in November compared to the previous month, the European Commission said on 29 November. Despite the decline, the rate for Bulgaria is still above the EU average. Confidence in construction dropped by 2.1 points in November although it remain broadly unchanged in the EU. Bulgaria recorded the steepest fall in sentiment in the the retail trade sector, which reached nearly seven points. Overall, the economic confidence deteriorated in the EU, slipping to 92.8 in November from 93.8 in October. Meanwhile, Bulgaria's producer price index decreased 0.1% in October on a monthly basis, following a rise of 1.5% the previous month, the national statistics office said. The index marked a 6.5% increase on an annual basis. During the month, prices in mining and quarrying decreased by 7.6%, while in manufacturing, prices went down by a slim 0.1%. Production costs for electricity, gas, steam and air conditioning supply, however, were up 1.4%. A considerable decrease is seen in prices involved in the manufacture of basic metals and metal products, which went down by 4.3%. Factory prices for the manufacture of food products jumped 11.2% in October. Prices for the manufacture of chemicals and chemical products recorded an increase of 11.8% year-on-year.

BULGARIA ECONOMY

ROMANIA|ENERGY

Enel Romania opens remote control centre in Romania

Utilities company Enel Romania has opened a first remote control centre called Telecontrol, for the Muntenia region south of the country, following investments of around 90 million, Romania Insider reported on 29 November. The new centre will allow Enels technicians in Bucharest and the neighbouring counties of Ilfov and Giurgiu run all the control maneuvers online. The program will continue in the following years, when Enel Distributie Muntenias all main stations over 40 of them will be remotely controlled. The new system allows the company to run inspections for various electricity problems without sending out teams on the field. Italian Enel has been active in Romania since 2005. It is currently the largest private investors in the energy sector in Romania, active in electricity distribution and supply and in energy production from renewable resources. It has 4,700 employees in Romania and 2.6 million customers in the Muntenia Sud, Banat and Dobrogea regions one third of the local distribution market.

Rompetrol starts drilling for OMV Petrom

Romanias two major oil companies, Rompetrol and OMV Petrom, have started to collaborate. Rompetrol announced the company had begun drilling a test well in Prahova County. Rompetrols investment in the well is set to reach $8.5 million, Romania Insider reported on 1 December. Gheorghe Georgescu, the new units general manager, said the money was for high performance drilling equipment. He believes Rompetrols experience and expertise will allow them to expand, drilling on land and off-shore in the Black Sea. The $29mn service contract between Rompetrol and OMV Petrom was signed this year, following a public bid. Rompetrol Rafinare, member of Rompetrol Group, reported a consolidated turnover of $3.7 billion in the first nine months of 2011, up 40% on the same period last year. OMV Petrom posted around a $5.7bn turnover in 2010, while its pre-tax profit stood at around $922mn. The Romanian state owns a 20.64% stake in OMV Petrom. Austrian OMV is the majority shareholder in the company. Fondul Proprietatea owns a 20.11% stake, the European Bank for Reconstruction and Development some 2.03%; while 6.21% is free floating on the BSE.

ROMANIA ENERGY

Fast development of Vilje South

NORWAY ENERGY

NORWAY ICELAND SWITZERLAND

Nestle investigates child labour

PARTNERS

New Europe | Page 33 December 4 - 10, 2011

SWITZERLAND|CHILD LABOUR

Swiss food giant Nestle said it will work with a nonprofit group to investigate alleged child labour on Ivory Coast cocoa farms where it sources supplies, Swiss Info reported. Nestle announced last Monday it was joining the Fair Labor Association (FLA), a United States group that formed as part of a presidential task force during the Clinton administration. Little has changed since Nestle, along with other global chocolate producers, signed a US-brokered deal to eliminate child labour in 2001. The FLA said it would conduct an independent audit with unannounced visits to some of the farms in question. The results will be published in spring 2012. With its headquarters in Vevey in western Switzerland, Nestl had sales of SFr 107.9 billion ($114.3 billion) in 2010, with organic growth of 6.2%.

NORWAY|ENERGY
The world's largest natural gas platform Aasgard-B being towed from Kvaerner Rosenberg Shipyard near Stavanger on the first stage of its journey to its North Sea destination.| EPA/HAGEN OEYVIND

REC to reduce capacity

Renewable Energy Corporation (REC) intends to temporarily reduce production capacity at their 650 MW multi crystalline wafer facility in Heroya, Norway, by 60%, Evertiq reported. The company said that discussions with the trade union has begun on the plan, which would see the halt begin from 1 December, 2011 through the first quarter of 2012. The shutdown would likely affect around 200 employees the company said. The company blamed the debt crisis in Europe along with turmoil in capital markets for the decline in the solar market. If the market does not improve, the company said, further adjustments to production will be made. "In this very challenging market environment the solar industry is set for a phase of shake-out and consolidation over the next 1-2 years. REC needs to adapt production to the prevailing market conditions. With our strong positions in Singapore and the US, and with support from all our stakeholders, we are well positioned to benefit from the improved competitiveness of solar energy. I am encouraged by our organisation's ability to continue to cut costs and develop new technologies." CEO Ole Enger said.

The Vilje partners have taken the investment decision to develop Vilje South, an extension to the main field included in its original plan for development and operation (PDO), Norway Post reported. The well planned for Vilje South will represent the third producer in this development, and is intended to secure optimum drainage of its resources. This project is the smallest in Statoils

fast-track portfolio so far. Together with its partners and the government, the group has ensured swift decision-making and early delivery of long-lead-time equipment. The development comprises a standard subsea template with a single well, tied back for processing to Marathons existing Alvheim field via a 19-kilometre flowline and umbilicals. Because this solution builds further

on an existing subsea infrastructure, no modifications will be required on the parent platform. The template is under construction by Aker for installation in the summer season of 2013, together with the rest of the subsea equipment. Drilling work is planned in two stages, starting in the spring of 2013 with completion that same autumn. The ambition is to bring the project on stream in late 2013.

NAV urges Parliament to increase welfare rates

The Norwegian Labour and Welfare Administration (NAV) claims that current social benefit payments are too low, and hardly give people the strength to survive. Now they are asking Parliament to increase rates, Norway Post reported. In a recent report, NAV suggested increasing welfare payments in order for rates to keep up with the average wage increase. The recommendation was given in a recent report about fighting poverty, according to NRK, which gained access to the report. It also talked about how the current payments may be counterproductive, and contribute to passivity; isolation and marginalisation rather than helping people make changes in ones life. There are different professional views on this, said Hanne Bjurstrom, Minister of Labor. She will take NAVs suggestion into consideration, but emphasized that it is more important to her that good, individual evaluations are made across the

NORWAY WELFARE

country. It is up to each municipality to give people the help and money that they need, and Parliaments rates are only guidelines, she explained. NAV, however, claims that this results in random and large variations in how much money is being paid out in different municipalities. They argued that Norways biggest weapon in the fight against poverty is to help long-term welfare recipients out into the workforce, education or other Governmental support programs.

SWITZERLAND|BANKING

Safra buys Sarasin majority stake

Rabobank has agreed to sell its majority stake in private Swiss bank Sarasin to the global Safra Group for 1.04 billion Swiss Francs ($1.13 billion), Swiss Info reported. The deal thus fended off an approach from rival bank Julius Bar and ended months of uncertainty. In a statement, Sarasin said the Safra Group agreed to acquire a majority shareholding in Bank Sarasin at a price of 7.20 Francs per A registered share and 36 Francs per B registered share, to be paid in cash. The deal values Sarasin at a total of 2.26 billion FRanks, according to Reuters. The agreement puts an end to months of speculation that Rabobank was looking to sell its stake in Sarasin. Sarasin, a bank for rich clients, has assets under management of some 100 billion Francs, offering a rare chance of making a substantial jump in Switzerland's fragmented private banking market. Sarasin has a significant private banking presence in key European markets, the Middle East and Asia while Safra is strong in the Americas and Europe.

Iceland shuns big Chinese land bid

Iceland rejected a controversial application by one of China's wealthiest entrepreneurs to purchase land for a resort, saying there was no precedent for a foreigner to own such a large tract, it was reported. Developer Huang Nubo, a 55-year-old former Chinese government official, had been ready to pay $8.8 million for the 30,639-hectare tract -- a remote, treeless stretch on Iceland's north shore that represent 0.3% of the island. The scale of the proposed development had raised suspicions in Iceland, with some claiming it could be a covert attempt by Beijing to establish a toehold in the Arctic, but Huang defended the project as a high-end resort featuring hot-air balloon rides and a golf course, that would preserve the environment. The Interior Ministry said in a statement "it's not possible to look past how much land the company wanted to pur-

ICELAND BUSINESS

chase... and that there is no precedent for land on this scale being sold to foreigners." An Icelandic law that limits sales to foreigners "protects Iceland's independence and the sovereignty of the land and Icelander's opportunities to benefit from their resources," the ministry said. Huang's representative in Iceland, Halldor Johannsson, said he was surprised by the rebuff, and added that there was nothing in Icelandic law specifically about the size of a parcel of land. The Interior Ministry said the 1966 law on property requires a company have a legal address in Iceland, all directors have legal addresses in Iceland for at least five years, four-fifth of the shares should be owned by Icelandic citizens and Icelandic citizens should form a majority on the board of directors.

Page 34|New Europe December 4 - 10, 2011

CROATIA ALBANIA SERBIA BOSNIA

CANDIDATES

BOSNIA | POLITICS

Leaders to discuss government formation at Italy seminar

Six political leaders of Bosnia's political parties recently paid a visit to the Italian town of Cadenabbia on Lake Como to attend a seminar on the constitutional structure of Bosnia and Herzegovina and the extent to which it is adjusted to EU standards, Fars news agency reported.The meeting of Bosnias political envoys will provide an opportunity for talks on the establishment of a new Bosnian government. Since general elections in the country in October 2010, there has been no agreement on formation of a government in Bosnia. SDA leader Tihic confirmed that he was ready to initiate a new round of talks on the formation of the new government. However, SNSD president Dodik dismissed any such agreement on formation of a government is possible in Cadenabbia. Prior to his visit to Italy, he told the local media that government formation was not the reason why the seminar was organised because the seminar had been planned and agreed on three months ago. According to SDP officials, the problem of government formation could be resolved by two HDZ parties which they say should abandon their current positions if agreement on the new government is to be reached. HDZ leader Covic believes that an agreement regarding formation of a government is possible in Italy. "If we decide to agree on the makeup of the Council of Ministers in terms of ethnic and party representation, it would mean that we can appoint a prime minister-designate who would be supported by the House of Representatives," Covic said. Others invited at the seminar includes Dragan Covic of the Croatian Democratic Union of Bosnia and Herzegovina (HDZ BiH), Bozo Ljubic of the HDZ 1990 party, Zlatko Lagumdzija of the Social Democratic Party (SDP), Sulejman Tihic of the Party of Democratic Action (SDA), Milorad Dodik of the Alliance of Independent Social Democrats (SNSD), and Mladen Bosic of the Serb Democratic Party (SDS).

ALBANIA | POLITICS

Parliamentary Committee oks 2012 Draft-Budget

Albanias Parliamentary Committee on the Economy recently approved the 2012 draft-budget at a recent plenary session. The budget passed with the backing of the ruling coalition of Prime Minister Sali Berisha, AENews reported. The government projects that revenues in 2012 will be 355.8 billion lek (2.544 billion), while expenditure for 2012 will be around 397 billion lek (2.83 billion). Berisha said his government planned to raise wages and pensions, brushing off opposition concern about the levels of debt that Albania continues to accumulate. Albanias debt currently stands 59.4% of the countrys gross domestic product, which is relatively low by the standards of debt-laden countries in Western Europe but high by the standards of the region. Deputies from Albanias opposition meanwhile strongly opposed the draft law as it is limited in terms of development and social policies. The deputies said that the opposition made some proposals for inclusion in the budget prior their vote in favour of the draft.

Croatia will join the European Union in July 2013 even if it fails to fulfil its remaining obligations, most notably privatising its loss-making shipyards, the European Union's envoy to Croatia, Paul Vandoren, said. Vandoren said that shipyard restructuring plans dated back to last spring but remained unimplemented, Javno reported. Privatisation agreements must be signed by the time Croatia enters the European Union because if the shipyards remain in state ownership, they will have to return all the state subsidies they received prior to 2006. Five loss-making shipyards are heavily subsidised by the state contrary to EU competition rules. Croatia has held two privatisation rounds for the docks and had chosen two local bidders, but the sale contracts have not been signed and details are still being discussed, with no progress likely before a new government is formed after a 4 December general election. Vandoren said the bloc would continue to monitor the country's judiciary reforms, fight against corruption and restructuring of the shipbuilding industry. However there would no punitive mechanisms for non-compliance until Croatia joins the bloc on 1 July, 2013. "After Croatia becomes a member of the EU and is in a position to violate market principles, other member states can activate numerous protective measures," Vandoren said without elaborating on protective measures. Zagreb concluded its EU membership talks in June after launching a

Croatia will join EU even without sale of shipyards

CROATIA EU AFFAIRS

Croatian Prime Minister Jadranka Kosor shows a copy of the draft of the accession agreement between the European Union and Croatia. | EPA/Antonio Bat

strong anti-graft campaign to soften the bloc's reluctance to expand. On 9 December it will sign the accession treaty in Brussels, which must be ratified by all 27 member states. Meantime, Croatian political analyst Tomislav Klauski said that the expectations from the upcoming EU accession is not high compared to previous years mainly due to the long accession process. Citing some barriers on path to accession process, he said that the obligations to the tribunal in The Hague to the dispute with Slovenia are one such instance. In addition, the financial crisis and Greeces woes have also bittered the mood of the Croatians. The feeling that we are going to-

wards something better and more orderly than Croatia is gone. There are many problems and disagreements in the EU. Thats why there is no euphoria ahead of the EU entry and upcoming signing of the accession treaty, Klauski said. On being asked whether EU crisis will affect the Croatian economy, the analyst said that in past few years the country has already witnessed poorer conditions and any situation in EU will not deteriorate the Croatian economy further. He believes that EU crisis will instead improve finance management and lead the Croatian economy to obtain some markets and investments. As a result, the situation will not get worse, according to Klauski.

MEPss discuss Serbias bid for EU candidate status

At a Foreign Affairs Committee meeting, several MEPss recently expressed support for a decision by EU heads of state and government to grant Serbia full EU candidate status at their summit in December. Officially, Serbia applied for European Union membership on 22 December 2009. This year on 12 October the European Commission planned to give Serbia official candidate status, however, tbe committee chair, Gabriele Albertini, during talks with Serbian Foreign Minister Vuk Jeremic said that Commission's recommendation in October was a plea for recognition of the processes that are happening in your country, Beta news agency reported. Several members also want Serbia to continue with its reforms and provide Serbian citizens the prospect of a European future. Commenting on his countrys proEuropean reform efforts, Jeremic said that reforms had been successfully implemented in Serbia for the past two years. Stressing Serbias very strong reform record and exceptional economic policy results, the Serbian minister reminded MEPs that Serbia was one of the very few countries whose credit rating had been upgraded in the current international economic crisis. Some MEPs also said that Serbia has yet to fulfill all the international communitys requirements. Jeremic was asked by the media why the agreements already reached in the EUsponsored Serbia-Kosovo dialogue, particularly on Kosovo custom stamps

SERBIA EU AFFAIRS

CROATIA | DEVELOPMENT

Almost half of Croatians are barely making ends meet

A recent survey by research agency GfK showed that half of the Croatians find it difficult to earn a living. Around 49% of Croatian households are struggling every month but in Slavonia (east) where 63% of households say they could barely make ends meet, Javno reported. In comparison, Zagreb seems much better with merely 36% of its residents falling in same category. Around 54% claimed their position was same while 37% said they were facing worse situation.

and cadastral records, had not yet been implemented. He replied that Serbia-Kosovo dialogue is showing fruitful outcome for the first time in history. However he expressed doubt whether progress on Kosovo issue will trigger EU to offer candidate status to Serbia. It would be foolish to expect that solving the problem with Kosovo will move us any further to the EU. A lot of people were made to believe that our cooperation with The Hague tribunal would bring us closer to the EU. It didnt, Jeremic said. At the end of the meeting, the Serbian minister made it clear that his country will continue to adhere to reform efforts and is ready for any unfavourable outcome at the December European Summit.

CANDIDATES

New Europe |Page 35 December 4 - 10, 2011

TURKEY FYROM MONTENEGRO

TURKEY DIPLOMACY

Ankara wants a fair dialogue between the West, Iran

Turkish President Abdullah Gul said that one need to understand the reasons which is prompting Iran to continue with its suspected nuclear a programme despite the sanctions which gravely affected the Irans economy, Zaman reported. It is important to put oneself in their shoes and see how they perceive threats, he said. He stressed it is not wise to view all the different groups and concentrations of power in Iran as a single entity, but refused to disclose the elements in Iran he was referring. He was commenting on a International Atomic Energy Agency (IAEA) report on Irans nuclear programme which claimed that Iran is preparing to develop nuclear weapon capability. A year ago, Turkey made several efforts to revive nuclear diplomacy between Iran and western nations. Turkey hosted Irans nuclear program in Istanbul which severely affected its image in the west and also strained ties with US. According to Gul, a frank and transparent dialogue between Iran and the western powers is necessary to ensure peace. When I say transparent I mean Iran, and when I say frank I mean the West, he explained. Gul added that Turkey is opposed to military options for dealing with the issue

MONTENEGRO|LABOUR

IMF calls on Montenegro to push labour market reforms

According to the International Monetary Fund (IMF) mission, next year the EU can expect a deterioration of the macroeconomic environment under the influence of the debt crisis, but a crisis which occurred in end of 2008 or beginning of 2009 is not expected in Montenegro, Montenegro Times reported. IMF called on the government of Montenegro to complete the structural reforms, especially in the labour market and increase the sustainability of the pension system. Citing the indicators for January-September period of this year, the Central Bank of Montenegro stated that the figures are better than expected and Montenegro will record a growth higher than expected in February 2011, when it was expected that GDP growth ranged from 2 to 3.5%.

MONTENEGRO|LOANS

EBRD to support SMEs, infrastructure, banking

Turkeys President Abdullah Gul speaks during a press conference, 22 November 2011. |EPA/DAN KITWOOD POOL

amid increasing threats from Israeli officials that it could strike Irans nuclear facilities if the Islamic republic does not relinquish its nuclear program. Looking at the Middle East, one has to have a comprehensive approach to disarmament, he added. Few weeks back, Turkish Foreign Minister Ahmet Davutoglu said that the country strongly oppose nuclear weapons in the Middle East as there are already enough tensions in the region. Citing this situation, he said that Iran will act in a wise and responsible manner. Meantime, speaking about Syria Gul said that the

country is now at a dead end. Citing UN estimates, he said that 3,500 people have been due to the eight months of unrest in Syria. Gul, however, refused to comment whether Turkey is preparing to establish a buffer zone on the Syrian border to shelter civilians fleeing violence and anti-regime fighters, according to The Guardian. During talks with Syrian President Bashar al-Assad few months ago, Gul suggested the president to allow free elections, release political prisoners and announce a clear timetable for reforms.

Montenegro's Prime Minister Igor Luksic recently had a meeting with Jean-Marc Peterschmitt, European Bank for Reconstruction and Development (EBRD) managing director for Central and Eastern Europe, Claudio Viezzoli, EBRD director for the Western Balkans, and Giulio Moreno, the newly appointed head of the EBRD office in Montenegro, a press release read. In the course of talks, the parties said they were pleased with the current high-quality cooperation and are willing to contribute to achieving positive and tangible results in the coming period.

FYROM|BUSINESS

FYROM-German business forum in Munich

A FYROM delegation led by Prime Minister Nikola Gruevski recently met in Munich with the management of German companies Siemens and BMW. The topics at the meeting was related to the companys investment plans and reforms undertaken in FYROM, so that the German firms launch a process of detailed analysis, MRTOnline reported. The delegation also met representatives of several companies from the automotive industry, aimed at enhancing processes over passing the final decision for investments in FYROM. FYROM-German business forum in Munich garnered 60 companies, mainly from Bavaria. The German investors are eyeing the automotive industry, ICT, agriculture and food processing, business services, pharmaceutical industry, energy and renewable energy sources, construction, tourism and infrastructure. It was learnt at the forum that German foreign direct investments up to 2010 amount to 71 million, i.e. three percent of the total FDIs in FYROM, mainly through privatisation and post-privatisation of textile industry, metal-processing industry and transport.

TURKEY INVESTMENT

Kuveyt Turk issues $350 mln in Islamic bonds

Kuveyt Turk Participation Bank recently issued Islamic bonds amounting to $350 million (sukuk) at a signing ceremony in Istanbul. The participants at the signing ceremony include Capital Markets Board (SPK) President Vedat Akgiray and Kuveyt Turks chairman, Mohammad Al-Omar, Vice Chairman Abdullah Tivnikli and CEO Ufuk Uyan, Zaman reported. They agreed that Islamic bonds were issued taking into account the rising demand for attractiveness of Turkeys low risk to Islamic and international investors. According to Al-Omar, the sukuk issuance will ensure the development and growth of participation banking in Turkey. Citing sukuk issuance as major source to achieve Turkeys long-term objectives, he said the company is pleased to provide a $350 million transaction amid time of global financial crisis. Affirming willingness to cater to needs of both private and public sectors, he said that Turkey is able to attract global investors, including those from the Gulf region. Uyan noted the overall sukuk market has a value of more than $100 billion and stressed Kuveyt Turks role in paving the way in securing long-term sources for interest-free banking in Turkey. He said the first sukuk transactions in Turkey were brought by Kuveyt Turk in 2010.

FYROM|TRANSPORT

TURKEY TRADE

Skopje, Moscow sign railway transport agreement

bureaucratic obstacles. Tuzmen said that Turkey should follow examples of US, Germany and Scandinavian countries which have the highest share of their foreign trade with their surrounding markets. Such a move will help Turkey to seek ways of increasing intra-trade in the region. It was noted that Turkey took some effort to boost trade with its neighbours from $7 billion in 2002 to $44 billion in 2010, which helped to minimise the effects of crisis to some extent. Turkeys the annual total trade volume between the 41 countries is $3 trillion. FYROM and Russia recently inked a co-operation agreement in the field of railway transport of passengers and commodities. The document was inked by Minister of Transport and Communications Mile Janakieski and Russian counterpart Igor Levitin, MRTOnline reported.This is the first accord between the two countries in railway traffic which will be effective 30 days after its ratification by the two countries. The agreement simplifies border, customs and other formalities related to transport of passengers and commodities. Competent bodies and organisations are expected to additionally conclude agreements on regulating issues over technologies for arranging the transport.

Bureaucratic obstacles still bar trade

Former trade minister Kursat Tuzmen said that the intra-trade in the region was below the desired level. Speaking at the Second Bosporus Regional Co-operation Summit in Istanbul, Tuzmen urged the government to act in a more wisely without losing any more time on sorting out

Page 36 |New Europe December 4 - 10, 2011

NEIGHBOURHOOD

UKRAINE MOLDOVA BELARUS

BELARUS|TERRORISM UKRAINE DIPLOMACY

Metro bombers sentenced to death in Belarus

Two men responsible for the April bombing of a Minsk metro station received the death sentence on 30 November, news agency Belta reported. Minsk supreme court justice Aleksandr Fedortsov made the announcement. Fifteen people were killed and more than 200 injured in the April 11 blast in Minsk. The main perpetrator, Dmitry Konovalov, was found guilty of committing a terrorist act on April 11, and of participating in a July 2008 bombing that injured 54 people, the agency reported. Vladislav Kovalov was adjudged an accomplice but also received the death penalty. Konovalov and Kovalov listened to the 112-page verdict while sitting inside a steel-barred cage, while relatives of theirs were present in the courtroom, Interfax reported.

Kiev, Tel Aviv to boost tourism co-operation

Ukrainian President Viktor Yanukovych met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem where the latter highlighted the "enormous contribution" of Ukraine into the creation and establishment of the modern Israeli state. Ukrainians by birth continue helping in building the State of Israel, Netanyahu said. Yanukovych also met with Israeli President Shimon Peres. Yanukovych said that the further development of the political dialogue between Ukraine and Israel would contribute to strengthening the existing ties in the trade, investment, scientific, military and cultural spheres. The Israeli president, in turn, stressed the importance of effective Ukrainian-Israeli co-operation in the sphere of tourism. In this context, he pointed to the agreement on the visafree regime between the two coun-

BELARUS|DIPLOMACY

Belarus, Vietnam vow to triple trade in 3-5 years

Belarus and Vietnam are planning to boost bilateral trade 2-3 times in three to five years, Prime Minister of Belarus Mikhail Myasnikovich told reporters following the meeting with Prime Minister of Vietnam Nguyen Tan Dung on 29 November. Belta quoted Myasnikovich as saying that the parties exchanged ideas regarding the development of bilateral relations. In particular, Belarus and Vietnam agreed that the level of trade and economic co-operation is far from its potential. Today we have defined avenues which will allow us raising bilateral trade two-three times in three to five years, Myasnikovich said. He said he shares the opinion of the Vietnamese Premier that the two countries can implement more investment projects. Belarus is ready to set up new plants in Vietnam to manufacture competitive products for local and foreign markets. Myasnikovich added that the sides have also harmonised the mechanisms to raise Belarus imports from Vietnam. These are additional jobs and extra revenues for Vietnamese companies, he said. Myasnikovich stressed that Belarus and Vietnam share views on the prospects of bilateral relations. In January 2012 the two states will mark the 20th anniversary of diplomatic relations. Over this relatively short period a lot has been done to foster bilateral ties. We are convinced that Vietnam is a reliable partner of Belarus in South East Asia. Belarus is also eager to be Vietnams partner in Europe, he said. Belarus is impressed by Vietnams social and economic development. You have carried out serious economic reforms, pursue the policy of openness. We appreciate it, Myasnikovich said.

Ukrainian President Viktor Yanukovych, left, meets with his Israeli counterpart Shimon Peres at the presidential compound in Jerusalem, Israel, 1 December 2011. |EPA/ABIR SULTAN

tries. The Israeli president also praised the position of the Ukrainian side in the issue of fighting antiSemitism. Peres said that Israel views

Yanukovych as the president who does not build the wall, but builds the connection between the Eastern and Western Europe.

UKRAINE ENERGY

Moscow, Kiev see progress in gas talks

On 1 December, Gazprom Chief Executive Alexei Miller said Russia and Ukraine have made "significant progress" in gas talks and may sign a transit deal by the end of the year. Miller and Ukrainian Energy Minister Yuri Boyko held talks in Moscow on 30 November. "At the talks significant progress was achieved," Miller said in a statement. "It can be expected that we will finalise agreements on the development of our cooperation in the gas sector by the end of the year." Ukraine has been in talks with Russia for over a year in an attempt to negotiate a lower price, saying it cannot afford the price it has to pay under a January 2009 deal struck after Russia cut off its western neighbour, disrupting supplies to Europe. Meanwhile, Ukrainian Prime Minister Mykola Azarov said that a short-term $2 billion loan extended by VTB to Ukraine in June 2010 will be transformed into a long-term facility. The loan initially has a six-month tenor with an extension option for three sixmonth periods. Azarov noted that the long-term loan will be secured by government bonds. He also denied rumours about Ukraine asking for a considerable upsize of the loan up to $6bn. Azarov also mentioned that the country currently has no urgent need to tap international markets, so it continues to hold its ground in talks with the International Monetary Fund (IMF). Azarov also said that Ukraine intends to develop relations with the Customs Union of Russia, Belarus and Kazakhstan within the framework of the formula "3 +1". "We are closely following the activities of the Customs Union, studying the experience, and the formula that our President proposed - " 3 +1 " - we are ready to implement in their actions", - Azarov during a meeting in Kiev with Federation Council of Federal Assembly of Russia Chairman Valentina Matvienko. Azarov noted that in relations between Ukraine and Russia, there are some controversial issues, in particular the price, but relations have been developing at a high level. Meanwhile, the European Parliament said on 1 December that it wants an EU-Ukraine Association Agreement, creating much greater integration between the two to be initialled before the end of the year. They see an agreement as a lever to bring about changes in the Ukraine.

BELARUS|ECONOMY

Belarus has highest inflation in Europe

Belarus was leading European countries in the growth of consumer prices, the Belarusian National Statistical Committee said in a report on 29 November. According to the report, consumer prices in Belarus grew 8.2% in October while most other European countries, including Russia, Bulgaria, Spain, Hungary, Italy and Ireland, kept their inflation rates under 1%. The growth in consumer prices in Belarus amounted to 88.7% when comparing October 2011 to December 2010, the report said. Over the same period, however, the figure was 6.5% in Kazakhstan, 5.2% in Russian, 4.2% in Ukraine, and 0.1% in Norway. Over the past year, the price of cigarettes and tobacco products shot up by 91.9% in Belarus, while in Bulgaria the price rose 0.2%, Russia 9.4% and Ukraine 10%. The Belarusian ruble lost twothirds of its value this year as a result of a balance-of-payments crisis. The central bank has raised its refinancing rate to 40%.

MOLDOVA FROZEN CONFLICTS

Chisinau, Trans-Dniester to talk again in 2012

On 1 December, talks between Moldova and the pro-Moscow separatist region of Trans-Dniester concluded in Lithuania with an agreement for more meetings at the beginning of next year. Lithuania's Foreign Minister Audronis Azubalis said that it took six years for both sides to sit at one table and to start official talks. That's the biggest achievement today". Azubalis told reporters after a first session that he is happy to see that we've moved a golden millimetre forward". Azubalis country chairs the Organisation for Security and Cooperation in Europe (OSCE) this year. He said the talks, also involving Russian, Ukrainian, U.S. and EU envoys, would begin by agreeing on the principles and procedures for further negotiations. "We expect to start real work on the settlement of the Transdniestria conflict," Moldova Deputy Prime Minister Eugen Carpov told reporters before entering the talks.

NEIGHBOURHOOD

New Europe | Page 37 December 4 - 10, 2011

KAZAKHSTAN TAJIKISTAN TURKMENISTAN

TURKMENISTAN RELATIONS TAJIKISTAN|RELATIONS

Turkmen Head meets Chinese officials

The Turkmen-Chinese business forum was recently held at Fang Fei hall of the State Residence Diaoyutai in Beijing. The event was attended by members of the government, the intergovernmental Turkmen-Chinese Cooperation Commission, heads of the ministries and line agencies, big enterprises and companies, private businesses of the two countries, Turkmenistan.ru reported. The Turkmen counteracts briefed their Chinese counterparts on the current macroeconomic situation and investment climate in Turkmenistan. The co-chairs of the intergovernmental Turkmen-Chinese Cooperation Commission, Vice-Chairman of the Cabinet of Ministers of Turkmenistan B. Hojamuhammedov and Chinese Vice-Premier Wu Yi Wang Qishan presented the outcome of cooperation between the two countries in trade, economic, scientific and technical sectors as well as short-term plans. Cooperation in energy, chemical and mining industries, in development of space communications systems, as well as professional training and tourism was also discussed. The sides also outlined introduction of the latest scientific and technical developments and innovative technologies in various areas as priority areas of cooperation. A detailed discussed in this regard was held at the bilateral meetings between representatives of the ministries and agencies, public and private companies of Turkmenistan and China. The meetings established new contacts and discussed further prospects of cooperation and specified plans for future cooperation. A recent meeting was also held between Wu Bangguo, chairman of the Standing Committee of the National People's Congress, met with Turkmen President Gurbanguly Berdymukhamedov at the Great Hall of the People. Wu said that since President Berdymukhamedov took office, friendly and cooperative relations between China and Turkmenistan have enjoyed healthy and stable development. He commended the high level of political mutual trust, frequent high-level visits, mutual support on major issues concerning each other's core interests and mutually beneficial economic cooperation.

Foreign Customs
Dr. Khojimahmad Umarov, an expert on the Tajik economy recently stated that Tajikistan should join the Customs Union of Russia, Belarus and Kazakhstan as it would be beneficial for the country, Asia-Plus reported. He said, It is necessary to look practically at the issue of joining the Customs Union of Russia, Belarus and Kazakhstan. There is no doubt that our interests will be realized after joining this union. Besides he suggested that Tajikistan should maintain and deepen strategic ties with Russia otherwise it could face serious problems. He said, There ought to avoid mistakes regarding our strategic economic partner in the future. Umarov is convinced that Russia has been and will remain the main ally of Tajikistan, irrespective of the ruling party in the republic. Commenting on Tajik-Russian ties, he said the recent developments should not dramatised and mere rumors and gross errors in relations between the two countries should be avoided.

TAJIKISTAN|ELECTIONS
Listening to Tajikistan, Wang Qishan (R), China's vice premier| EPA/SIMON DAWSON

The sides also plan to jointly combat the "three forces" and transnational organised crime, safeguarding peace and stability in the two countries and the region as a whole. They also carried out cultural exchanges and mutual learning and the social and public opinion basis of China-Turkmenistan friendship for generations. Both sides have also cooperated well in international and regional affairs, contributing to regional and world peace, stability and development. According to Wu, China pays special emphasis to relations with Turkmenistan and aims to strengthen mutually beneficial cooperation in various fields and promote bilateral relations to new levels based on mutual respect, equality, mutual benefit and win-win principle. Parliamentary cooperation was also outlined as vital part of bilateral friendly ties. In recent years, the NPC of China and the National Assembly of Turkmenistan have conducted sound cooperation. He hoped that both sides will continue to play the unique roles of parliamentary exchanges, increase friendly exchanges in various fields at all levels, strengthen exchanges of experience on state governance, democracy and legal system construction and promote pragmatic cooperation, to better serve their respective domestic construction and development of bilateral relations. In turn, the Turkmen head said his country also aims for a stable, longterm relationship with China. He stressed that Turkmenistan will expedite cooperation in such sectors as en-

ergy, trade, economy and culture for the benefit of both peoples. He also pledged to support exchanges between the two parliaments and ruling parties as the two countries explore their own modes of development based on their respective domestic situations. During talks with President Hu Jintao, Berdimuhamedov said that China became Turkmenistans largest trade partner. Turkmenistan registered 37 enterprises with the participation of Chinese capital, 66 investment projects worth about $ 4.5 billion. Chinese companies operate in the oil and gas, telecommunication and transport sectors, agriculture, textile, chemical and food industries, healthcare and construction industries of Turkmenistan. The head of Turkmenistan said that Chinese partners demonstrate their best qualities in all joint activities. Berdimuhamedov suggested that the two countries should establish a Turkmen-Chinese Association of Entrepreneurs composed of business circles of both countries. Following the meeting, members of the delegations of the two countries signed a package of intergovernmental agreements, including an agreement on trade-economic cooperation, a cooperation programme in a number of industries, as well as an agreement on economic and technological cooperation. In addition, the sides signed a Memorandum of Understanding and agreements on cooperation between different financial structures of Turkmenistan and China.

Round table discuss election system improvement

Tajikistans Central Commission for Elections and Referenda (CCER) under support of the Venice Commission recently organised a roundtable conference in Dushanbe to discuss development and improvement of the election system in Tajikistan, Asia-Plus reported. It was reported that the Venice Commission, an advisory body of the Council of Europe is assigned to assist and advise individual countries in constitutional matters in order to improve functioning of democratic institutions and the protection of human rights. The participants at the meeting comprised of persons responsible for the holding of elections from Gorno Badakhshan, Sughd and Khatlon provinces, Dushanbe, cities and districts subordinate to the center as well envoys from the CCER, political parties, Supreme Court, Council of Justice, Ombudsmans Office, civil society and media as well as judges and international experts.The participants discussed election legislation in the country, legal regulation of election agitation, press coverage of elections, rights and duties of electoral commissions and issues related to improvement of election system in Tajikistan. It was noted that the meeting was addressed by Shermuhammad Shohiyon, the chairman of the CCER, Sodiq Shernazarov, Senior Adviser to the President of Tajikistan, Zafar Azizov, the chairman of the Council of Justice, and Sergey Kuznetsov, the chief of elections and referendums department of the Venice Commission.

KAZAKHSTAN|DEVELOPMENT

Astana to turn into 'the smartest city' in Kazakhstan by 2030

Astana Mayor Imangali Tasmagambetov recently declared a unique project SmartAstana which according to him will turn the capital of Kazakhstan into one of the intellectual cities of the world, Gazeta.kz reported. He said by 2030 Astana will become one of the most beautiful city and "the smartest" one in the country as the region is presently undergoing tremendous transformation. He informed that SmartAstana project is based on the model of the European "smart cities" based on smart economy, mobile access, smart environment, smart akimat, smart housing sphere, smart people. He said the foremost step to realise this objective is introduction of some pilot projects in the capital, including the social ones in the field of healthcare and education. It is planned to launch pilot projects till the end of the year. Tasmagambetov said, It is impossible to solve problems of the 21st century by consciousness of the 19th century. Dynamics of cities of the world urban system has changed. Hence our task in the era of tremendous transformation of cities is striving for making our capital technically equipped, intellectually developed, basing on active introduction of new innovative technologic solutions.

TAJIKISTAN ECONOMY

Parliament considers amendments to 2011 national budget

A regular sitting of the third session of the Majlisi Namoyandagon (Tajikistans lower chamber of parliament) of the fourth convocation, recently considered amendments which was initiated by the government to the national budget for 2011, Asia-Plus reported. In addition, the lower house is also considering changes and addenda proposed to the laws on weapons, hydrometeorology activity and other compulsory payments to the budget as well as the countrys economic legal procedure code. The agenda at the session also includes draft laws on environmental audit, environmental examination and copies of compulsory documents.

Page 38| New Europe December 4 - 10, 2011

UZBEKISTAN AZERBAIJAN KYRGYZSTAN

NEIGHBOURHOOD

UZBEKISTAN|DIPLOMACY

Karachi to continue friendly ties with Tashkent

Outgoing ambassador of Uzbekistan to Pakistan Oybek Arif Usmanov recently had a meeting with Pakistans President Asif Ali Zardari at the Aiwan-e-Sadr. In the course of talks, Zardari hailed the cordial and amicable ties with Uzbekistan and said he is eager to further enhance bilateral cooperation with Uzbekistan in all fields especially in economy, trade and investment, Uzbekreport.com reported. The President lauded valuable contributions of the Ambassador in further consolidating and cementing the existing close bilateral ties between the two counties. He wished success to the ambassador in his future endeavors. In turn, the Ambassador thanked the President and the Government for the support extended to him during his stay in Pakistan. He assured that amicable and brotherly ties between the two countries will continue. Meantime, the Chamber of Commerce and Industry of Uzbekistan hosted a forum of business circles of Uzbekistan and Pakistan. The participants at the event comprised of heads of ministries and departments, companies and concerns of the two countries responsible for the economy, trade, investments, healthcare, pharmaceutical, chemical, food, textile, construction and engineering industries. More than 20 companies from Pakistan took part in the forum, including Weave and Knit, Taimur Spinning, Syntex Pharma, Indus Pipe Mill Thatta Cement and others.

US military base to stay in Kyrgyzstan till 2014

KYRGYZSTAN DEFENCE

US soldiers inspect military planes at the Manas airport outside Bishkek, Kyrgyzstan. |EPA/YURI KOCHETKOV

KYRGYZSTAN|TRADE

Government turns to experts to decide on Customs Union

Final decision on Kyrgyzstan entrance to Customs Union will be taken by Government with account of experts opinion, Speaker of Parliament Akhmatbek Keldibekov was quoted as saying by the press. According him leaders of Russia, Kazakhstan, Belorussia and later Kyrgyzstan, Uzbekistan and Tajikistan had signed first treaty on the Customs Union, which was transformed into Eurasian Economic Community (EEC). However, an expected multilateral effectiveness hasnt been achieved. Later, Kyrgyzstan started negotiations on the World Trade Organization (WTO) entrance. These parallel processes caused ambiguous appraisal of our EEC partners. Then, there was an announcement about creation of joint customs zone between Russia, Kazakhstan and Belarus. In October of 2011 the Customs Union Commission normalised regulations of the Customs Union with WTO regulations. It is decided that if a country enters to WTO then the WTO regulation will be stronger than Customs Union regulations. Therefore, the Kyrgyz Government should engage experts, Tradeunions Federation and business associations representatives in order to accept the final decision on CU entrance, Keldibekov said.

Kyrgyzstan's incumbent President Roza Otunbayeva recently announced that an agreement between Kyrgyzstan and the United States that The US military base Manas will stay in Kyrgyzstan till the year 2014, news agencies reported. She also commended President Elect Almazbek Atambayevs idea that

the base should be used a transit centre. "We need a big transport hub to handle goods shipped from the West to the East and vice versa," she said adding that the base is vital for the international coalition force in Afghanistan. The fate of the base after 2014 will depend on the situation in Kyrgyzs-

tan. It was recalled that the Manas base was opened in late 2001 after the United States launched a war on Taliban and al-Qaeda in Afghanistan. In 2009, the then President of Kyrgyzstan, Kurmanbek Bakiyev, said he wanted the base to be closed, but after Washington talks on lease terms, he decided that the base will stay.

Uzbekistan facing food shortages, unemployment

A recent meeting at Tashkents Centre for Economic Research discussed the growing threats Uzbekistan will face in next 13 years. The new research shows that by 2025 the population of Uzbekistan will have reached 33.22 million, 11 million of whom will be living in towns and cities and 22.2 million in rural areas. This indicates that climate change, depletion of water resources and rapid population growth will yield food shortages and unemployment figures topping seven million, Uzbekreport.com reported. Ildus Kamilov, senior research coordinator on the international research project, which was commissioned with support from the Asian Development Bank and the

UZBEKISTAN ECONOMY

UNDP, described how climate change will continue to entail a reduction in Uzbekistans natural water resources. Water resources are being depleted not only by global warming, but also by the inefficient irrigation systems being used by Uzbekistans agricultural producers, said Kamilov. He said that half of water which could be used for irrigation is lost and that channels and pumping stations need to be repaired to reduce those losses. Although a significant proportion of cultivated land in Uzbekistan is irrigated but research shows that 70% of Uzbekistans land is not suitable for agricultural production as the land is desert, steppe, or mountainous or soil salinity is too high.

Central Asian, Azeri ministers to boost co-operation

President of the Asian Development Bank Haruhiko Kuroda recently paid an official visit to Azerbaijan, to attend 10th Ministerial Conference to be held under the ADB Central Asia Regional Economic Cooperation Programme (CAREC), news agencies reported. Azerbaijans President Ilham Aliyev received ADB President and ADB Governor Samir Sharifov to discuss ADB assistance to Azerbaijan in priority sectors, including power, transport, and water supply. He also welcomed the participants in the ministerial conference. He said that it was a great occasion for Azerbaijan to host CAREC's 10th anniversary conference. This is the second time Azerbaijan is hosting event of such kind. In 2008 the country hosted meeting of CAREC Programme member states. Ministers from CAREC countries, meeting in Baku, have endorsed the CAREC strategy until 2020. Azerbaijani Economic Development Minister Shahin Mustafayev said that CAREC 2020 captures well collective vision, goals, and objectives for the CAREC Programme for the next decade. Aliyev is confident that successful development of the programme would help to deepen regional co-operation and contribute to ensuring peace and well-being in the region. He said that economic reforms carried out in Azerbaijan in recent years are fruitful and that major programs were being implemented in CAREC areas. The President said that the country has favourable investment climate which entice foreign investors. These investments are made in the oil and gas sector as well as the non-oil sector too, which is a priority for the government. Aliyev also said that in past eight years the poverty level also declined from 49 to 9%. In addition, the work of the participants in the CAREC programme and the government of Azerbaijan strengthened links in economic sector which is developing successfully. Talking about the development of the transport sector, Aliyev said that five international airports had opened in Azerbaijan in the past seven years. On rail transport, he mentioned the construction of the Baku-Tbilisi-Kars railway, linking Europe and Asia, which is scheduled to complete in early 2013.

AZERBAIJAN DIPLOMACY

KYRGYZSTAN|LOAN

Bishkek EBRD sign transport agreement

European Bank of Reconstruction and Development recently announced a grant of $15 million to provide financial aid to municipal transport development in Bishkek, Bishkek City Hall Press Centre said in a statement. The credit agreement was signed by Kyrgyzstans Finance Minister Melis Mambetzhanov, EBRD Senior Officer Zhyldyz Galieva and the Mayor of Bishkek Isa Omurkulov, reads a press release. The aim of the project is assistance in purchase of 32 new low floor buses and 44 standard buses, partial rehabilitation of the infrastructure and transportation service quality improvement.

RUSSIA GEORGIA ARMENIA

NEIGHBOURHOOD

New Europe |Page 39 December 4 - 10, 2011

Russia to send northern fleet warships to Syria

Russia will send warships from its Arctic Sea fleet for naval manoeuvres off the coast of Syria, Interfax quoted Nikolai Makarov, head of the Russian general staff, as saying on 29 November. "This is regularly scheduled training," Makarov said. "We are not sending the ships directly to Syria per se." The aircraft carrier Admiral Kuznetsov will be the centre of a battle group scheduled to depart Russian Arctic Ocean ports in December for the eastern Mediterranean, he said. The crew of the Kuznetsov and other ships in the support flotilla spent much of November in local manoeuvres including practice air strikes, live missile launches and navigation, ahead of the voyage, the report said. The flotilla's sailors will make a port call in the Syrian city of Tartus, Interfax said. Moscow reportedly began renovations of naval installations in the port in 2009. Russia's Izvestiya newspaper, which historically has had close links to the Kremlin, wrote on 29 November, "The military says that the transfer of the Kuznetsov to Syria is not in any way connected with the military-strategic situation in the region. But experts are sure that the Russian warships will prevent military conflict." Senior Russian officials have repeatedly spoken out against calls by western nations for an international military intervention against the regime of Syrian

RUSSIA DIPLOMACY

GEORGIA|BUDGET

Opposition slams draft budget 2012

The majority party and the opposition are at loggerheads due to the 2012 state budget, which was recently discussed in Parliament,The Messenger reported. The draft budget envisage all ministries funding will be increased except for several ones. The Defence Ministry will receive an additional 44.6 million lari which means defence funding will amount to 704.6mn lari, instead of the initially planned 660mn lari this year. This rise in defence funding was noted first since 2008. Funding of the Ministry of Economics and some other ministries will also increase while funding for the Healthcare Ministry will decline from 1.692 billion lari to 1.685bn lari and the Ministry of Regional Development and Infrastructure, will decline from 879.1mn lari to 818.6mn lari. According to Minister of Finance, Dimitri Gvindadze, the 2012 state budget caters to needs of Georgian state and society at large. He explained that rise in defence ministry funding is necessary as the state needs security for the country. The funding of most ministries continually increases, he said.

Russian President and Supreme Commander Dmitry Medvedev, right, and Russian Defence Minister Anatoly Serdyukov, left, visit the aircraft carrier Admiral Kuznetsov in the Barents Sea, Russia, 11 October 2008. Kuznetsov will be the centre of a battle group scheduled to depart Russian Arctic Ocean ports in December 2011 for the eastern Mediterranean. |EPA/DMITRY ASTAKHOV - POOL RIA NOVOSTI/KREMLIN POOL

GEORGIA|DEFENCE

Washington supports Georgia's NATO bid

A member of US Congress David Dreier recently declared that US strongly supports Georgia's hopes to join NATO, Civil Georgia reported. He alleged Russian intervention in 2008 for stalling Georgias NATO membership. "The United States strongly supports Georgia's accession to NATO and I hope that Russian President (Dmitry) Medvedev's objection will not come true from this point of view," Dreier stressed. He went on to say, The day will come, and I hope it will happen soon, when we'll see Georgia in NATO, and if President Medvedev doesn't wish to see Georgia as a NATO member and that is his goal, I would like his wish fail.

Russia activates radar missile warning system near EU

On 29 November, Russia activated a radar warning system against incoming missiles in its exclave of Kaliningrad on the borders of the EU, in response to Western plans for a US missile shield in Europe, news agencies reported. Russian President Dmitry Medvedev announced that the Voronezh-DM station was moving onto immediate combat readiness, days after threatening to deploy missiles in Kaliningrad amid a growing dispute with the West. Medvedev said: "I expect that this step will be seen by our partners as the first signal of the readiness of our country to make an adequate response to the threats which the missile shield poses for our strategic nuclear forces." Russia has said it may deploy Iskander ballistic missile launchers in Kaliningrad. "If our signal is ignored... we will deploy other means of defence including the adoption of tough counter-measures and the deployment of a strike group," Interfax quoted him as saying. Medvedev has spoken of deploying Iskander missiles - modern versions of the mobile Scud surface-to-surface missile - in Kaliningrad. On 29 November, he said Russia was ready to listen to new anti-missile defence proposals from "Western partners" but added that "verbal statements are not enough".

RUSSIA DEFENCE

President Bashar al-Assad. Russia will not allow an international coalition to force a regime change in Syria, as was recently the case in Libya, they have said. On 29 November, Russian Foreign Minister Sergei Lavrov said that Moscow is against imposing an arms embargo on Syria. Speaking at a news conference in Moscow following his meeting with Arab ambassadors to Russia on 28 November, Lavrov said lessons should be learnt from the situation in Libya, where an embargo on arms supplies was only applied to the Libyan army. Groups, including those formed from citizens who penetrated to Syria from other states, have been actively sup-

plied with arms, he said. That is why proposals to introduce a ban on any arms supplies to Syria are quite unfair. The United States and European Union have already banned arms supplies to Damascus, and the Arab League proposed to follow suit during its meeting on Syria on 27 November. We know how the arms embargo was applied in Libya, Lavrov said on 29 November. The opposition was receiving arms, with such countries as France and Qatar publicly stating that they have supplied those arms. The Russian naval mission to Syria comes at a time of renewed tension in Russian-American relations.

ARMENIA|ECONOMY

Moodys lowers Armenian credit rating

Moody's Investors Service recently has reduced Armenian governments foreign and local currency issuer ratings by two notches to Ba2, reads a press release. It also revised the countrys sovereign debt outlook from stable to negative.Taking into account the looming economic downturn in Europe and Russia, the rating agency has downgraded the countrys credit rating and lowered its broader outlook for the economy. Moody said the reason for the downgrade in ratings is Armenias vulnerability to renewed recession in Europe and Russia. In particular, it warned of a possible fall in international prices of base metals, the countrys number one export item. The agency also noted that an economic crisis in Russia could reduce vital remittances sent home by hundreds of thousands of Armenian migrants working there. The Armenian government declined to comment on Moodys ratings while the Ministry of Finance was unavailable for comment. Moodys also Yerevans falling budget deficit, which is equivalent to about 4% of Gross Domestic Product this year. The government plans to cut it further to around 3% next year. Non-commercial loans from the World Bank, the IMF and other international institutions provided financial aid to cover Armenian deficit. As a result, the rating downgrade alone will not much affect the governments fiscal performance in 2012. Samvel Avagian, an independent analyst said that Moodys prognosis of a second wave of the global economic crisis is inevitable. However he expressed concern over the rising commodity prices as forecast by Moodys. Armenia remains heavily dependent on metal prices because about half of our exports are mining output and metals, and they also account for a large share of our budgetary revenues, he said.

On 1 December, an Iraqi delegation was visiting Moscow to negotiate an arms deal aimed at boosting the country's security capabilities after a scheduled US military pullout, a member of the parliament's Security and Defence Committee, Falah Zidan, said. "The delegation in Russia is holding talks about equipping the Iraqi army with weapons that could be used after US withdrawal to maintain security in Iraq," government newspaper Al-Sabah

Russia, Iraq discuss arms deal in Baghdad

RUSSIA DEFENCE

quoted Zidan as saying. The negotiations with Russia are part of efforts by Baghdad to diversify sources of arms supplies, which are mostly provided by the United States, the newspaper reported. The news of the negotiations with Russia came one day after US Vice President Joe Biden visited Baghdad, announcing a "new stage" of strategic partnership after his country's troops complete their withdrawal by the end of December.

Page 40 | New Europe December 4 - 10, 2011

Kassandra@NEurope.eu

KASSANDRA
Follow me on twitter @Kassandra_NE
While the world looked on in horror at the 77 murders committed by Norwegian nutcase, Anders Breivik, Italian deputy, Mario Borghezio had a different take, announcing, One hundred per cent of Breiviks ideas are good, in some cases extremely good. The positions of Breivik reflect the views of those movements across Europe which are winning elections. This provoked a three month suspension from the UKIP led EFD Group. Nigel Farage is incensed by the remarks and the Lega Nords refusal to expel him from the group, something that Farage is concerned is going to be used against him in the next elections.

Once Upon A Time in Frankfurt...

The ECB has just published a video, celebrating 10 successful years of the Euro. What perfect timing!

Off the pitch, on the grass

Lega Nord or Lega Nutters?

The Poles are justifiably proud of co-hosting the UEFA Euro 2012 finals, and being sociable folk, have arranged for a gathering of footie lovers at the new Fat Boys Bar on Av Kortenburg. They also sent out an invitation, asking people to join them for a beer and joint. Sounds like a thoroughly relaxing evening. Sports lovers are bound to roll up at the event.

MEP complains of fags outside parliament

Adding to this, is Borghezios obsessions with UFOs, where he campaigned for all of Europes defence ministries to open up their UFO files as it would reveal

technology that would enable us to exit the financial crisis. To top this, he also campaigned for a EU UFO Observatory. Hes equally obsessed by the Bilderberg Group,

whom he appears to believe controls the world. Borghezio celebrated the end of his suspension by bringing back to Brussels, a conspiracy theorist who feeds the Italian the inside story of the Bilderbergers and their machinations. But back to Breivik. Top psychiatrists have concluded their investigation into the killer and have concluded that his beliefs were delusional and suffering from paranoid schizophrenia. Someone who knew him well agreed. "He was totally beyond reason and believed all the nonsense he said," spoke Breiviks mother. Perhaps the Italian should also undergo examination?

Many seeking butt action in doorway Latvian independence hero and MEP, Sandra Kalniete has taken up another struggle, as she informed deputies in an internal email: Dear Colleagues, I would like to share with you my concern regarding the unhealthy practice of smoking next to the entrances of the European Parliament building. It creates a very unpleasant image of the Parliament; as the guests who travel from all over the world have to cross a very smoky area, see the piled up ashtrays, and the entrances littered with cigarette butts as their f irst impression of the European parliament (please see the images attached). While in many countries and in some buildings in Brussels a rule prohibits the smoking of cigarettes anywhere within 10 meters of the entrance to the building the European Parliament does not have such a rule in place. As the European Parliament has been gracious enough to provide us with several designated smoking areas, I believe that there should be no excuse for this situation. I would ask for those of you who share my concern to join me in the request to the Questeurs and the Secretary General of the European Parliament to impose a rule that prohibits smoking within 10 meters of the entrance to the European Parliament. British eurosceptic MEP, Gerard Batten responded: You are right of course that smoking is an unhealthy and dirty habit. But I think the dog-ends outside the building add a little touch of humanity to the place. Probably one of the few connections it has to the real world. What is really going to prove injurious to public wellbeing will be the dog-end of the euro. Unfortunately it is a lot easier to give up smoking than it is to give up the euro. Actually, theres a good idea there. Perhaps we will soon be offered Eurozone patches that people can scratch for relief every time a bond auction fails!

HVR to NYC?
While there is speculation that Herman Van Rompuy is looking for a second term there seems to be a job coming up on the other side of the Atlantic that might not only suit him, itll keep him out of the Eurozone. New York Citys Department of Transport has unveiled an experiment where some street safety signs are replaced by new designs and a haiku. Really. The signs have a funky touch, but the poetry, not too bad. Aggressive driver, Aggrssive pedestrian, Two crash test dummies

Haiku Herman can certainly provide a role in their road signage solutions and would make a pleasant break from watching the

Eurozone fall apart. Or, given Brussels awful traffic, perhaps the Belgians would want him to work closer to home.

Answer of Philip Claeys MEP Sir, In your November 20 issue ('All right in the EFD?'), Kassandra pretends the Flemish party Vlaams Belang is 'formed by Nazi sympathisers'. This is an outrageous misrepresentation. The Vlaams Belang (formerly Vlaams Blok) was established in 1977 by Karel Dillen, who had worked for the British Authorities right after WWII. It is currently the major opposition party in the Flemish Parliament. It is a democratic movement advocating - among other things - an independent Flemish State and a stop to mass immigration. It favours referenda, subsidiarity and transparency. Yes, it is on the right and it favours freedom of speech over political correctness. This is obviously not to everyone's liking, but talking of 'Nazi sympathisers' is not only an insult to my party, my voters and myself, but also to your readers. Philip Claeys MEP

They say a picture is worth a thousand words, but what we are wondering is what was said just before this picture was taken? |CREDIT| European Council