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New Europe Print Edition - Issue 955 - October 2 - 8, 2011
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Can the sun save Greece?|Page 17
NEWEUROPE19th Year of Publication | Number 955 | October 2 - 8, 2011| € 3.50 www.neurope.eu
IN THIS ISSUE EU PolicyCAP must uphold its equitable goals|Page 11
EU-WorldEU-US criticised for ‘tepid’ response|Page 13
Energy & ClimateOff-shore oil spills require government-industry co-operation, not more regulationand expanded liability|Page 10Oettinger calls for internal energy market as EU raids companies|Page 16Gazprom to take major stake in Belarusian pipeline soon|Page 17
Country newsSarkozy backs Moroccan democracyreforms|Page 23Spain’s parliament dissolved ahead of November election|Page 25Serbia close to becoming EU candidate|Page 34EU sees Ukraine gas transit role for years to come|Page 36Kudrin resigns following spat with Medvedev|Page 39
Editorial & OpinionWhat will Germany do for theEurozone?|Page 4No future for human rights without social rights|Page 5German taxpayer’s reluctance to shoulder all debts is understandable|Page 6The answer to life, the EUniverseand everything|Page 11Which new Middle East?|Page 12
Martin Schulz, leader of the Socialists &Democrats (S&D) group in the EuropeanParliament, told New Europe on 27September that a potential major discoverysouth of Cyprus could help boost EU energysecurity. Asked if it would decrease reliance onRussia, Schulz said in an interview at theEuropean Parliament in Strasbourg thatdiversification of energy supply is a co-elementof the EU energy strategy. “It’s not onlyCyprus. We need gas imports from northernAfrica, oil imports from northern Africa, we’rein a close co-operation with Algeria, for exam-ple, for the gas fields so I think it’s reasonableand it is needed to look if Cyprus has gas
fields,” he said. “The European Union to beindependent must be carefully to spread theenergy supplies so you are right and the ques-tion is right we should not be dependent nei-ther from one side - Russia for example - norexclusively from Northern Africa. Therefore,‘Yes’ it is on our own interest that Turkey islooking behind the possibility to get gas in thisarea.”
The previous two gas crises between Kievand Moscow affected many European coun-tries. Asked whether there will be another gascrisis between Russia and Ukraine in the com-ing months, Guy Verhofstadt, leader of theLiberals and Democrats (ALDE) group at the
European Parliament, told New Europe inStrasbourg: “It is always possible but there arethe new links in the north of Europe who arenow there and could help.” He was referring tothe Nord Stream pipeline that could see nat-ural gas from Russia start flowing to Germanythrough the Baltic Sea as early as October.
Meanwhile, MEP Adina Valean fromRomania told New Europe that the “accumu-lation of conditions which made the previouscrisis possible are not present anymore, hencethe political context is not the same either. Inaddition, aware of our interdependence, theEU should continue strengthening its energypolicy by including its close neighbours.”
Schulz warns Turkey: Cyprus gas belongs to the EU
·Pages 14, 15
Europe needs Med gas
Martin Schulz, centre, Guy Verhofstadt, right, and Joseph Daul at one of the plenary sessions in Strasbourg. |EPA/OLIVIER HOSLET
FASHION & STYLE
Un Viaggio EsoticoPage 19
UNIONCommission President Barroso called for aunited Europe to deal with the debt crisis.Later, MEPs gave their final approval to thethe so-called “six-pack” agreement on eco-nomic governance ·Page 3
GREECEThe EU-ECB-IMF which monitors andfinances the Greek economy landed lastweek in Athens, after they had broken offnegotiations with the government earlySeptember ·Pages 2, 9, 31
PIRACYSwedish MEP Christian Engstrom writesthat today’s copyright legislation is out bal-ance, and out of tune with the times. It hasturned the entire young generation intocriminals ·Page 4
FINANCEThe EU could potentially raise €57 bil-lion a year with the introduction of afinancial transaction tax (FTT). The taxwill be levied on all transactions onfinancial instruments ·Page 5
ANALYSIS Page 2 | New Europe NEW EUROPEOctober 2 - 8, 2011
NE 15 YEARS AGOTwo's company, three's a crowd.|EPA/RADEK PIETRUSZKA
The Shooting Gallery
Towards the mid 1990s, the central European countries that emerged as independent economic entities after the fallof the Warsaw Pact embarked on the tremendous task of preparing for entry into the European Union. Howevertheir internal realities and their external trade and economic relations were far away from being near to EU stan-dards. To overcome these difficulties in a organised way they formed between them a free trade area, the CEFTA,the Central European Free Trade Agreement. Poland, Hungary, Slovakia, the Czech Republic and Slovenia agreedto drop a long line of import tariffs and transform the subsidies structure in the agricultural sector, so as to come near-er to the EU “aquis”. Not to forget that at that time the most important European Union common policy was by farthe CAP, the Common Agricultural Policy.
A plan to save Greeceand the Eurozone
With Greece pushed again to its limits, the Eurozone is trying oncemore to avoid the unavoidable, which is a good haircut for this over-indebted country's sovereign debt. Obviously the aim is to avoid theunpredictable repercussions on the European banking system of theunlikely prospect of an uncontrolled bankruptcy of Athens. Howevera haircut of 25%-35% of the Greek debt could be painful but man-ageable for the European banks exposed to sovereign debt. But let’sfollow the facts as they developed over the past weeks.
TaxationAthens is introducing one package of fiscal measures after another. Inearly September, it was the property tax to be levied through electric-ity bills. Then, it was a new package of measures providing for furthercuts in pensions and public sector salaries by an average of 15% and150.000 less governmnet jobs until 2014, with 30.000 layoffs until theend of this year. This past week more measures followed, introducinga new retroactive taxation package, with reduction of the non-taxableincome from €12,000 to €5,000 annually. This means that all wageearners who pay income taxes at source, and their income taxedmonthly, will see their take home pay to be greatly reduced during thelast three months of the year in, order to make up with the increasedtaxation retroactively from 1 January 2011. Average income earners inGreece have now lost account of what they owe to the tax authorities.On top of that, over the past days taxpayers received the notes impos-ing on them the special surtax levy on incomes earned in 2010, whichwas decided last July. Unfortunately the Greek authorities keepsqueezing the same parts of the population, which are the salariedpeople and pensioners. No effort is visible to extend the tax base tothose who have been traditionally avoiding taxation, that is almost80% of all professionals and the small businesses. The obvious way toarrest those incomes which traditionally avoid taxation is the intro-duction of objective criteria in assessing their tax obligation. Such cri-teria were introduced in the mid 1990s but were gradually abandonedlater on, because of their unpopular character. Consecutive govern-ments relaxed them in pre-election periods in order to increase theirelectoral potential. It is very interesting to watch what this governmentwill decide on this front, because presently they are preparing the newtax law under which the tax returns of next year will be cleared andthe tax liabilities of 2012 will be calculated. If this 80% of profession-als will remain once more in the clear, it will be very difficult forGreece to continue hinging its fiscal reform and long term equilibri-um with the tax base containing mainly wage earners and pensioners. In reality, the management of the Greek tax base is gradually becom-ing a major impediment for Eurozone reform, since the soundness ofGreece's long term equilibrium hinges on brining its tax base in linewith the rest of the Eurozone and the other developed economies.
Private Sector InvolvementThe other crucial point in managing the Greek crisis is the PSI. Thatis the private sector involvement, in a swap of Greek bonds for EFSFguaranteed ones, as provided by the 21 July agreement. There are indi-cations that the sharp fall of prices of the Greek debt paper during thepast weeks in the secondary market, has created new incentives for thebanks to participate in the PSI arrangement. Participation seems toreach or even exceed 90%, which is the overall participation ratethreshold that the Greek government has set for the deal to go ahead. The haircut provided in this exchange of Greek bonds for new EFSFguaranteed ones has been set at 21%. The revived interest of investorsin the PSI however, makes a haircut of 21% look like being on the lowside and has raised hopes about increasing it and turn this bond swapinto a real opportunity, to substantially reduce Greece’s overall sover-eign debt to manageable levels bellow 100% of the GNP, presently at165%. This prospect though may lead mainly the French and theGreek banks which have large exposure to Greece, to insurmountableproblems of both liquidity and capital adequacy. To address thoseproblems of the banking sector, Eurozone authorities are left tounderstand that they might quadruple the “dowry” of the EFSF from€440 billion to €2 trillion. If all that goes well, then Greece's and theEurozone's problems might be resolved.
EDITOR
Dennis [email protected]
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ISSN number: 1106-8299
By Dionyssis Kefalakos
ANALYSISNew Europe |Page 3NEW EUROPE
October 2 - 8, 2011
STRASBOURG - On 28 September,European Commission President JoséManuel Barroso told MEPs that Europemust be more united as it struggles to dealwith the debt crisis in Greece and protectthe euro.
In a State of the Union speech at theEuropean Parliament’s plenary inStrasbourg, France, Barroso called forcreating a true economic union andeconomic governance with theCommission at its heart.
“We are at a crucial moment in historybecause if we do not move forward withmore unification, we will sufferfragmentation,” Barroso said. "I think thisis going to be a baptism of fire for a wholegeneration," Barroso added.
The EU will be able to gather thepolitical strength to come up with overallsolutions to its crises, he said, adding thatwork was continuing on a tax on financialtransactions.
Martin Schulz, leader of the Socialists &Democrats (S&D) group in the EuropeanParliament, in his keynote speechwelcomed Barroso’s agreement to theS&D group’s long-standing demand for atax on financial transactions. Hecondemned EU governments for “shuttlediplomacy between EU capitals”. Schulzdemanded that the EU “act as acommunity” and meet economic,environmental, social and culturalchallenges together.
“There is nothing wrong withEuropean integration,” he said. “There isno crisis of ideals. We have a crisis ofleadership.”
In his concluding remarks, a fieryBarroso hit back at one MEP’sEurosceptic comments. “If Britainbelieves that it can - because of the pastempire or because of its dimension -defend its interests in the world alone tryto get that point in your country. But Ithink that the majority here believes thatto protect our interests, to defend ourvalues in the world of globalisation, to
speak with one voice with our Americanfriends or China and Russia we need astronger European Union.
"And this stronger European Union is away to reinforce also our countries, thecountries that we all represent around thishouse,” Barroso said, prompting applausefrom MEPs. He hailed Poland, whichearlier in the day stated its commitment tothe community approach as it holds thecurrent presidency of the Council. “Are wegoing to build the European Union againsteach other or with each other?” Barrosoasked. “One of the problems is politicalconfidence and we need to make the casefor Europe.”
In the vote following the State of theUnion address, MEPs gave their finalapproval to the agreement reached twoweeks ago with the Council on the sixlegislative acts on economic governance,the so-called “six-pack” which improves on
the existing framework for macroeconomicsurveillance in Europe. As expected, theplenary vote was tight.
Immediately after the poll, EuropeanParliament President Jerzy Buzek told apress conference that the EU was facing thebiggest challenge of its history due to thesovereign debt crisis. Buzek said that the'six-pack' was “a new economic rule-bookfor avoiding next crises and a powerful andresistant arm against future crises”.
“The six-pack is much more thansanctions. It is about prevention – that’svery important. It recognises thatprevention is better than cure. And thesecond importance is that it is also aboutmore than fiscal discipline. It is aboutkeeping Europe competitive to create jobsthrough sustainable growth,” Buzek said.
He also appealed to all the nationalparliaments to approve as soon as possiblethe bail-out package of 21 July for
Eurozone countries. “Any delay is playingwith fire,” he told the press conference.
MEP Diogo Feio, one of therapporteurs of the six-pack, told NewEurope after the press conference on 28September that coming from Portugal heknows very well that if the states havegood public accounts, a good deficit and agood debt, they have sovereignty. “Nowwe’re in a situation that we have aprogramme with the IMF, with theEuropean Commission, with ECB and itis better that we’re doing it now andcomplying with everything and do it morebecause we want to choose our way andwe know very well that with stable publicfinance we’ll have growth,” Feio said. “Ithink like Barroso said this morning thatthis package is a package of stability andalso a pact of growth. In the last years wejust talked about stability and we’re nowacting to the growth also,” Feio added.
ECONOMY
Barroso calls for stronger central economicgovernance as MEPs approve 'six-pack'
By Kostis Geropoulos
European Commission President José Manuel Barroso delivers his State of the Union report during the plenary session of the European Parliament in Strasbourg, France, 28
September 2011. |EPA/CHRISTOPHE KARABA
ADVERTISEMENT
Page 4| New Europe NEW EUROPE
ANALYSISOctober 2 - 8, 2011
Today’s copyright legislation is outbalance, and out of tune with thetimes. It has turned the entire younggeneration into criminals in the eyesof the law, in a futile attempt atstopping the technologicaldevelopment. Yet, file sharing hascontinued to grow exponentially.Neither propaganda, fear tactics, norever harsher laws have been able tostop development.
It is impossible to enforce the banagainst non-commercial file sharingwithout infringing fundamental rights.As long as there are ways for citizensto communicate in private, they will beused to share copyrighted materials.The only way to even try to limit filesharing, is to remove the right toprivate communication. In the lastdecade, this is the direction thatcopyright enforcement legislation hasmoved in, under pressure from bigbusiness lobbyists who see theirmonopolies under threat. We need toreverse this trend, in order to safeguardthe fundamental rights.
At the same time, we want a societywhere culture flourishes, and whereartists and creative people have achance to make a living as culturalworkers. Fortunately, there is nocontradiction between file sharing andculture. This is something we know
from a decade's experience of massivefile sharing on the internet.
In the economic statistics, we cansee that household spending onculture and entertainment is slowlyincreasing year by year. If we spend lessmoney on buying CD records, wespend more on something else, like forinstance going to live concerts. This isgreat news for the artists. An artist willtypically get 5-7% of the revenuesfrom a CD record, but 50% of therevenues from a concert. The recordcompanies lose out, but this is onlybecause they are no longer adding anyvalue.
It may well be that it will becomemore difficult to make money withinsome parts of the cultural sector, but ifso, it will become easier in some other— including new ones, that we havenot even imagined so far. But as longas the total household spending onculture continues to be on the samelevel or rising, nobody can claim thatthe artists as a group will haveanything to lose from a reformedcopyright.
Should this also have the side effectof loosening up some of the grip thatthe big distributors have over culturallife, then so much the better for bothartists and consumers.
When public libraries wereintroduced in Europe 150 years ago,the book publishers were very much
opposed to this. The argument theyused was the same one that is beingused today in the file sharing debate:If people could get access to books forfree, authors would not be able tomake a living, and no new bookswould be written.
We now know that the argumentsagainst public libraries were wrong. Itquite obviously did not lead to asituation where no new books werewritten, and it did not make itimpossible for authors to earn moneyfrom writing. On the contrary, freeaccess to culture proved to be not onlya boon to society at large, but alsoturned out to be beneficial to authors.
The Internet is the most fantasticpublic library that has ever beencreated. It means that everybody,including people with limitedeconomic means, has access to all theworld's culture just a mouse-clickaway. This is a positive developmentthat we should embrace and applaud.
The Pirate Party has a clear andpositive agenda to end thecriminalization of the young generation,and provide the foundation for a diverseand sustainable cultural sector in theInternet age. We invite all politicalgroups to copy our ideas. Sharing iscaring.
Christian Engstrom is an MEP forthe Swedish Pirate Party
COPYRIGHT
Copyright law turns kids into criminalsReform will enrich artists and the public
Supporters of the Pirate Party cheer at the election party after first computer predictions of the election for the state parliament in Berlin, Germany, 18
September 2011.|EPA/STEPHANIE PILICK
What will Germany do forthe Eurozone?
The deep political question that Germany faces today is notonly if it is worthwhile helping Greece, Portugal, Ireland andprobably Italy, Spain and the French banks, but, if this Eu-ropean economic engine should go for more Europe or not.Many German politicians and analysts say that since theircountry appears to be a world champion in exports, andseems to enjoy a peaceful future guaranteed for the long term,why undertake the burden of supporting the less competitiveeconomies of the Eurozone? On the face of it the answer appears to be a straightforwardno. But to answer a question of this magnitude, simplicity isthe not the way to do it. On top of this, Germans are wellknown for their deep philosophical thinking, and this an-swer requires a mental exercise that not even the least edu-cated citizen will avoid undertaking. The blunders of the pastcentury committed by many of Berlin's leaders have turnedthe average man in the street very sceptical about what is ob-vious and what is correct. Not forgetting that everybody inGermany agrees that the European Union was the goldenkey which opened the door to today's welfare society and ledto the reunification of the country. However, it is human na-ture to consider the present as a given and standard reality, notrecognising the underline forces that drove us there, andomitting to count the costs to others for the present welfare.But let us see what answers have being given so far to theabove question.
Merkel and Schäuble In many respects this crucial political question for Germanyhas been answered by Chancellor Angela Merkel. Her state-ments and decisions so far over the sovereign debt problemin the peripheral Eurozone countries are based on the as-sumption that the Eurozone is the best guarantee for thelong term welfare of her people. On the same line, WolfgangSchäuble the Minister for Finance, and a politician whoworked to create the euro, is also adamant about the need tosafeguard the Eurozone. Of course, they both put a price onhelping the sinner Eurozone countries, but at the same timethey are being careful not to make this price unbearable, andput the entire edifice at risk. Those two however have notforgotten to take into account the moral issues around thebailouts. If Germany had just put all its reserves on the tableand made its citizens guarantee all loopholes in the Greekand the other sinner economies, this would have totally giventhe wrong message, and would have probably driven thewhole Eurozone to a dead end. So Merkel and Schäuble, ina long term sustainable way. work for more Europe.
Rösler and Issing On the other side of the fence we have a number of Germanpoliticians like Philipp Rösler, minister of Economics, ViceChancellor and President of the Free Democratic Party(FDP), and economists like Otmar Issing, member of theExecutive Board of the European Central Bank from 1998to 2006 and advisor to Goldman Sachs. Both have beingspeaking out against the role of Germany as the linchpin ofthe Eurozone and the main force behind the bailouts. Bothof their priorities, though, can be checked. Rösler thought that being an advocate of “less Europe”willhelp him and his party in difficult times. However with thecatastrophic electoral results the FDP had in regional elec-tions, he cynically made a U-turn. As for Issing, his conser-vative ideology, his neo-liberal monetarist approach and hiscarrier in the banking sector and academia in Europe andthe US are more than good reason for him to prioritise thebanks ahead of the well being of all Eurozone citizen’s.All in all, Angela Merkel and Wolfgang Schäuble have sofar shown their ability to answer the crucial question for thegood of all Germans, but not for some of them.
By Dionyssis Kefalakos
By Christian Engstrom
ANALYSISNew Europe |Page 5NEW EUROPE
October 2 - 8, 2011
What a year 2011 has been so far! North Africans
taking to the streets to call for democracy; the
Greeks and Spanish protesting against austerity;
riots in England condemned by some as pure crim-
inality, but seen by others as a sign of deep social
malaise: the year the news refused to stop has left
us with a barrage of unanswered questions and an
uneasy feeling that something is deeply wrong with
society.
Events like these put pressure on politicians to come
up with fast solutions. Austerity is one answer to the
Eurozone problems – but those on the end of it are
paying a heavy price. Riots bring calls for revenge,
with families facing eviction from their homes for
the bad behaviour of one household member, and
jobless people threatened with benefits cuts. Knee
jerk responses can be the quickest path to even
wider social strife; and voices such as IMF head
Christine Lagarde and the UN’s International
Labour Organisation have already warned that riots
are the logical result of economic crisis.
And what if, by failing to look after social welfare,
European governments are acting not only im-
morally but illegally?
The idea that fair access to resources will create a
better society is nothing new. It was the impetus be-
hind the work of the great social reformers such as
Joseph Rowntree in Britain and Adolph Kolping in
Germany, along with thousands of other social re-
formers worldwide. It was a philosophy that built
the modern welfare states and led to core social val-
ues being accepted in most rich countries. So influ-
ential was the social rights movement that when the
European Human Rights Convention and the
Court came into being many argued that social
rights should be included.
They lost the battle, but won the argument – the re-
sult was the European Social Charter, a means to
promote and protect social rights for Europe’s citi-
zens. In the 50 years since its launch, it has wrought
changes to national laws to create better housing,
improved health care and fairer working conditions.
Its system of monitoring social rights in Europe’s
countries has led to changes for the better across the
board, and its system for collective complaints has
made it easier for NGOs and campaigning groups
to fight for justice.
We may never be able to predict the future, but we
can learn from the past. We know very well where
economic crisis, coupled with insecurity and fear,
lead. Society may be able to survive without a sys-
tem for maintaining social rights, but that society
will be frail and unsustainable.
The capacity of a population to grow, contribute
and in turn sustain their economy depends on each
member having fair access to jobs, education, and
training, with the guarantee that they will be de-
cently housed and able to provide for their families.
A Europe that respects social rights is a Europe
protected against the fault lines formed when an
economy turns and public trust no longer holds. So-
cial rights are human rights – and an anchor for our
future.
New Europe content partner
No future for human rights without social rights
By Gutenberg
The European Union couldpotentially raise €57 billion ayear with the introduction ofa financial transaction tax(FTT).
The tax, announced on 28September as part of Euro-pean Commission PresidentJose Manuel Barroso’s stateof the union address, will belevied on all transactions onfinancial instruments, such asshares, bonds and derivatives,between financial institutionsif at least one of the institu-tions is established withinthe EU. The exchange ofshares and bonds would betaxed at 0.1%, with deriva-tives at 0.01%.
According to the EuropeanCommission proposal on thetax, issued in the wake of theBarroso speech, , the FTT willensure “financial institutionsmake a fair contribution tocovering the costs of the re-cent crisis, and to ensure eventaxation of the sector vis-à-visother sectors,” and will “createappropriate disincentives foroverly risky transactions andto complement regulatorymeasures aimed at avoidingfuture crises,” and will help“avoid fragmentation in theinternal market for financialservices, bearing in mind theincreasing number of uncoor-dinated national tax measuresbeing put in place.” Under theproposal, the tax is due to takeeffect from 1 January 2014.
The tax has a twofold pur-pose, according to a Commis-sion source: to ensure fairnessin the tax system, and to es-tablish a co-ordinated taxationframework for the memberstates. Currently, ten EUmember states have someform of FTT, and the pro-posal aims to minimise cur-rent tax rates while alsoharmonising the existing vari-eties of taxes. “This is notabout raising revenues, this isabout harmonising”, said thesource. The revenue raisedfrom the FTT will be sharedbetween the EU budget andmember states, with the deci-sion on priority spendingdown to individual countries.The idea, said the Commis-
sion source, is that memberstates “can tax what they wantto tax without the tax basewalking away.” Each memberstate “will set their own prior-ities on what to spend this rev-enue on, including climatechange”, said the source.
This appears to contradict aview expressed by the EUCommissioner for Taxation,Algirdas Šemeta in the Frenchnewspaper Le Monde, inwhich he said that revenueshould go towards develop-ment and climate change is-sues. In an article in the paper,the Commissioner said that“Europe should set an exam-ple and speak with one voicefor the introduction of a globaltax on financial transactionswith its partners in the G20. Itis necessary to find a global so-
lution for the challenges of de-velopment and climate changethat threaten us all.”
Since the prospect of someform of EU-wide tax on thefinancial sector was first seri-ously touted as part of theCommission Communica-tion on the EU Budget Re-view in October 2010,followed by the Proposal for aCouncil Decision on EUown-resources earlier this year,many development, climateand human rights NGOshave been pushing strongly forrevenue raised from any FTTto be specifically set aside fordevelopment or climate issues,in a so-called ‘Robin Hood’tax. The current proposaldoesn’t quite add up to whatsome were expecting on thisscore, but some hope may be
taken from Šemeta’s com-ments that the issue does notfade away.
Politically, the proposal wasbroadly welcomed by the po-litical groups in the EuropeanParliament, albeit with somequalifications. The Greens,welcoming the FTT as “bet-ter late than never”, in com-mon with many NGOs wantthe tax introduced on a globallevel. In a statement, Greeneconomic and financespokesperson Sven Giegoldurged the EU to “find otherallies around the world for theintroduction of an FTT be-yond Europe, to help raiserevenue to address globalpoverty and combat climatechange. The EU must pushfor this at different interna-tional fora: the G20, the forth-coming UN climateconference in Durban, nextyear's Rio +20 summit.”
Meanwhile, the BritishConservative party, which sitswith the European Conserva-tives and Reformist group,have expressed displeasure atthe FTT. In commom withmany UK-based financial in-stitutions, it is being viewed asan attack on the City of Lon-don. The big fear is that Lon-don’s finacial centre will see it’sinstitutions depart Europe.According to the Commis-sion, however, “In order tomitigate these risks, the pro-posal provides for low taxrates, a very wide tax base, ap-propriate criteria to determinethe territorial application ofthe tax, and harmonisedscope.”
The proposal still has to bediscussed at Council level,where the FTT already hassupport from certain memberstates, such as Austria, Bel-gium,Finland, France, Ger-many, Greece, Hungary,Luxembourg, Portugal andSpain. It then goes to the Eu-ropean Parliament for opin-ion. The Commission has alsoindicated it will explore waysto introduce the FTT on aglobal level.
EU finance ministers are ex-pected to discuss the proposalon 4 October ahead of G-20and EU summit meetings inOctober and November.
FINANCE
EU to raise €57bn through financial transaction tax
By Cillian Donnelly
The EU hopes to raise billions of euros by placing taxes on the transac-tions of shares and bonds. | EPA/ORESTIS PANAGIOTOU
Page 6 | New Europe NEW EUROPE
ANALYSISOctober 2 - 8, 2011
German Chancellor AngelaMerkel’s political future had been injeopardy as she had considerabledifficulty to win the German Bun-destag’s approval for the enhancedEuropean rescue mechanism(EFSF) by her own majority. Shewas so desperate to get it pushedthrough against a growing numberof dissidents from her own partythat she had to rely on votes fromthe oppositional Social Democratsand Greens, the smallest fraction inthe German parliament. In the end,Mrs Merkel managed to have all but15 votes of her governing coalitionbehind her covering up the dissentand unease of liberal-conservativemembers of the lower house of theGerman parliament.
Social Democrats and Greenswere demonstrating their pro-EUstance as both parties are eager toregain power in 2013 for which theymight need support from Socialistparty DIE LINKE which opposedthe bank-shareholder - rescuingmechanism known as “EFSF” citingunfair burdens for taxpayers as wellas brutal social cuts that go hand inhand with stringent austerity im-posed by the Troika.
When talking about the Greekdebts causing the first state-bank-ruptcy in Europe after WWII onehardly hears anything about thosewho benefited from that debt. It isa known fact that Deutsche BankAG, Goldman Sachs, NathanMeyer Rothschild, HSBC, LazardFreres SAS and others had madebillions by speculating with Greekbonds and Credit Default Swaps(CDS) and were later employed bythe Greek government as “advi-sors” to select the raisins in the piethat need to be privatised in orderto fulfil the Troika’s demands.
Then, ALPHA BANK A.E., NM Rothschild & Sons Ltd. andUBS Ltd. got appointed by theGreek government to sell off alltable silver. Of course, all these bankshave rich clients who might want tobuy the profitable pieces of Greece'sassets.
As corrupt as all this alreadysounds, this is not the bottom of thebarrel, yet. One may wonder whereall these debts came from and whyGreece’s population was not incred-ibly rich (except for their upperclass). Closer scrutiny reveals thatGreece chronically suffered from anegative trade balance. That is not a
big surprise either. Greece imported more than it ex-
ported. Not new. And, like almost allEastern and South – Eastern EUmember states Greece piled updebts because of an enormous tradeimbalance resulting from consumergoods.
All EU member states (except forthe Czech Republic) who joined in2004 were forced to import top-shelf products from the West whiletheir own industries ran out of busi-ness or were taken over by Westerncompanies.
But, in case of Greece all thiswouldn’t add up. Greece did not no-tice such a rise in consumption thatthe newcomers from Eastern Eu-rope did. Greece imported some-thing else that was far moreexpensive and that could hardly be‘consumed’: arms.
At the same time when Greece’sdebts skyrocketed, Germany underthe Social-Democratic-Green gov-ernment of Gerhard Schröder andJoseph (“Joschka”) Fischer, doubledits arms export. Most of theweapons were exported to Greece.
One may fear that the govern-ment in Athens might find some ofthese arms useful in fighting off thecitizen’s revolt against the Troika’storture-tools.
So, it has not been the averageGreek citizen who indulged in theconsumption of luxury goods and bythis created the tremendous debtsthat EU and IMF pretend had to bebailed out, for which a harsh auster-ity program is to be imposed lead-ing to brutal wage cuts and barbaric
social cuts.But although hundreds of billions
are being pumped into the system,through the means of the EFSF,Greece’s, Ireland’s, Portugal’s andSpain’s debts are not shrinking, butstill growing.
Instead of dumping ever morebillions on the graveyard of the fi-nancial markets one should grantgovernments direct access to loansfrom the European Central Bank(ECB) at low interest rates, by thisfinishing with the perversion of thesystem in which private banks get acredit line for next to nothing fromthe ECB handing out loans to statesfor an exorbitant interest that is ar-tificially fuelled by speculation and aconspiracy between banks, specula-tors and rating agencies.
Instead, the programs presentedby the Troika are not aid but killer-programs. Greece will never be ableto pay back its debts. Everyoneknows this, so why, one may won-der, are our elected leaders so eagerto prolong the death of the Greekpatient?
The answer is easy: the politicalleadership wants to put the entireburden of Greece’s inevitable insol-vency onto the taxpayer’s shoulders.
The later Greece will be declaredbankrupt, the better for institutionalinvestors, banks, hedge funds andspeculators, and the more expensivefor the taxpayer.
Already today a 50% cut of theGreek debts would cost the Germantaxpayers €14 billion, but Germanbanks, insurance companies andother speculators would lose only €6
billion, the reason why the majorityof German citizens reject dumpingmore money in that black hole ofthe financial market. One and a halfyears ago this relation would havebeen reversed.
It is clear that the internationalbanking federation under DeutscheBank AG – CEO Josef Ackermannhad been the mastermind behindthe Euro-Group’s plan for exchang-ing Greek bonds when releasing thenext tranche for Greece in October,because that plan makes sure thatwhen in future the Greek taxpayerscan’t service the new bonds anylonger, the international financialmafia will sit on dry land alreadyand won’t be forced to write off nota single euro.
There is no such thing as a rescuemechanism for the euro, but for thebankers and speculators whobrought about the trouble. The fi-nancial mafia pockets every eurothat Greece receives from the EFSFand IMF.
It is, of course, understandablethat people like Mr Ackermannhave an interest in keeping the pub-lic billion-euro-pipelines afloat, butthe EU Commission, Euro-Groupand Council obviously forgot whoseinterests they ought to represent.
But, what usually gets forgottenabout when talking about the debtsof the “PIGS” (Brussels-vocabularyfor Portugal, Ireland, Greece &Spain), is the wealth that is standingon the other side of the balancesheet.
Not only have public debts ex-ploded over the past few years, so
did privately accumulated wealth,and both for the same reasons, firstlybecause of the EU-wide tax-dump-ing competition that EU Commis-sion and every member stategovernment entered into and sec-ondly because of the bank-rescuing.
Public hands needed to increasetheir debt while corporate taxeswere lowered by every single dereg-ulation and harmonisation wavethat came from Brussels over theyears. The bonds EU member statesissued for covering their budgetsafter major corporations were givenlegal ways for tax evasion werebought by institutional and privateinvestors.
This is why the debts of the statesare the wealth of the ultra high networth individuals (UHNWIs asMerrill Lynch calls them) in our so-ciety who own banks and hedgefunds.
Not only Warren Buffett andGeorge Soros, legendary specula-tors, advocate what no democrati-cally elected government orparliament ever dared to call for: awealth tax for the UHNWIs.
That, indeed, would be the onlyway capitalism could be rescued andthat this is in the interest of theupper class could hardly be doubted.Italian minister-president SilvioBerlusconi is not the only one whodid not understand that, yet.
When Greece declared its bank-ruptcy, then also Spain, Italy andothers will not be able to re-financethemselves under normal conditionsany longer either.
This does not speak against aradical debt-cut but against a sys-tem in which a few investmentbankers, hedge fund junkies andinsane rating analysts, who had al-ready provoked the crash in Sep-tember 2008 by their chronicallyerroneous conclusions, dictate tosovereign, democratically electedgovernments their profit maxi-mization conditions.
When Socialism collapsed 21years ago, it accepted to be dictatedthe conditions by the winners. Now,that Capitalism finds itself in a sim-ilar position, its protagonists still be-lieve they can dictate how they shallbe rescued. That is absurd as it notonly leads to the bankruptcy of en-tire states, but also to the end ofdemocracy.
Ralph T. Niemeyer is the editor-in-chief of EUchronicle ([email protected])
German Chancellor Angela Merkel (C) is surrounded by Members of Parliament during the roll-call vote within a session inthe German 'Bundestag' parliament in Berlin after they voted to expand the eurozone bailout mechanism. | EPA/MICHAEL KAPPELER
THE GREEK PATIENT
German taxpayer’s reluctance to shoulder all debts is understandable
By Ralph T. Niemeyer
ANALYSISNew Europe | Page 7
NEW EUROPEOctober 2 - 8, 2011
Children are protected from danger bytheir parents. The UN has recognised aprinciple called the responsibility toprotect. So what is wrong with protec-tionism?
It is by shielding vulnerable sectorsof the economy from competition thatcountries develop. This method hasbeen used extensively in Europe andNorth America in the past; yet therhetoric from our modern leaders in-dicates it is sinful for governments tonurture infant industries and preventthem being submerged by global cor-porations.
Brazil’s president Dilma Rousseff isexpected in Brussels this week for two“summits”: one with the EU’s politicalrepresentatives; the other with its busi-ness elite. More than likely, both eventswill hear pleas for “protectionist” urgesto be restrained.
Inevitably, the objective of introduc-ing a free trade agreement between theEU and Mercosur – the common mar-ket banding together Brazil, Argentina,Uruguay and Paraguay – will be adominant theme at these meetings.Talks about framing such an accordhave been conducted – with interrup-tions – since 1995 and, despite occa-sional predictions that a deal is on thehorizon, none appears imminent. For astart, the enthusiasm for an agreementexpressed by the European Commis-sion is not shared by governments inFrance, Ireland and some other EUcountries worried about pitting theirbeef industries against increased im-ports from South America.
Rather than taking on the meat in-dustry in this continent, Karel deGucht, the EU’s trade commissioner,has blamed Argentina for the dead-lock. Speaking in April, he describedthe Buenos Aires government as the“great obstacle” towards reaching anagreement. “Argentina’s protectionismis creating problems and they are mak-ing our exporters nervous, especially inthe automotive industry,” he said.
If several of the Union’s own leadersare hostile to these trade talks, thenwho is pushing for them to succeed? In2004, the European Services Forum(ESF) told Pascal Lamy, then theUnion’s trade chief, that Mercosurcountries must be willing to open theireconomies more to foreign firms. TheESF gave a list of the sectors it wantedliberalised: financial services, telecom-munications, maritime transport, com-puter technology and “environmentalservices”. Almost certainly, environ-mental services was code for water, asone of the ESF’s members Veolia is
eyeing private water contracts through-out the world. Water privatisation hasproven catastrophic in Latin America.In the mid-1990s, the World Bankgave Bolivia a loan on the condition itwould sell off public water utilities inits main cities. The result was that thepoor were unable to afford clean water.By 2005, the cost of having properwater and sanitation in a La Pazhousehold came to $450; to fork outthat amount a worker on the minimumwage would have to put aside his or herentire pay for a nine month period.
But, of course, the realities of life inimpoverished barrios will not be exer-cising the minds of the executive typesin Brussels’ Palais d’Egmont, where theEU-Brazil business summit is takingplace. The association of Europeanchambers of commerce (Eurocham-bres) has a leading role in this jam-boree. Almost a year ago, itssecretary-general Arnaldo Abruzzinigave a grim warning about the conse-quences of the talks with Mercosurfailing: “If we don’t reach agreement,China will overtake the EU [in itsbusiness with South America].”
Ah yes, the spectre of Red China. Ig-nore, please, the obligatory referencesto “shared values” like human rightsand democracy when Rousseff meetsEU bigwigs. The real agenda here isbeating the Chinese.
Energy is of critical importance inthis race. The business summit will betaking stock of what has happenedsince the European Commission rec-ommended forming a “strategic part-nership” with Brazil in 2007. TheCommission’s paper stated that Brazilhas “huge natural resources” and thatwhile it’s already a “major investmenthub” for European companies, it will“offer major additional openings”. Bio-
fuels were identified as an area whereBrazil and Europe can cooperate moreclosely, given that the Commission isdetermined to press ahead with in-creasing the use of food crops to powercars. Findings by the Commission’sown in-house scientists that biofuelsare not a solution to climate changehave been glossed over. Instead, theUnion’s most senior officials are moreeager to please Repsol, the Spanish en-ergy firm that is active in the Merco-sur-EU Business Forum, one of theparticipants in this week’s summit.
Luiz Inácio Lula da Silva madesome appalling decisions as Brazil’spresident. Last year, he promised theFrench arms industry $6 billion in im-mediate contracts, money that shouldhave been used to combat poverty. Yethe should be praised for overruling apatent on efavirenz, an AIDS treat-ment drug, in 2007, to ensure that af-fordable generic versions of themedicine would be provided to thosewho needed them.
If the EU has its way, Brazil wouldbe restricted from putting public healthbefore the commercial interests ofpharmaceutical giants in the future.The Commission wants strict rules onintellectual property included in a freetrade agreement so that generic medi-cines won’t be as readily available.
The agreement coveted by the EU isoften compared to the Free Trade Areaof the Americas that the US wanted tointroduce. Luckily, that initiative waskilled off six years ago because it en-countered massive public opposition.The challenge is to encourage the samelevel of opposition to an equally ru-inous EU-Mercosur accord. Corpora-tions should not be granted planningpermission to turn South America intotheir private playground.
ECONOMY
Don’t turn Brazil into a corporate playground
Can Europe saveitself — and avoidpulling down theU.S. recovery?
At last weekend’s IMF/World Bank annual meetings in Wash-ington, the question on everyone’s minds was, what’s happened toEurope’s instinct for economic survival? While our Congresssquabbles over bookkeeping for disaster assistance, the talk in thecorridors of the IMF was that Europe is two to three weeks awayfrom financial meltdown. It would start in the sinking market forGreek government debt, followed by turmoil in much-bigger mar-kets for the public debt of Italy and Spain, as well as Portugal andIreland. And if Europe’s leaders can’t head that off, it will likely takedown most of Europe’s large banks. Angela Merkel, NicholasSarkozy and their counterparts across Europe get this. What theydon’t want to face is that the only solutions ultimately lead to a rad-ical rewriting of postwar social contracts across the Eurozone. The financial carnage wouldn’t stop at the continent’s shores.British banks have large holdings of Spanish, Italian and Irishgovernment bonds, so they would be very vulnerable. Our ownbanks sold most of their portfolios of European governmentbonds over the last year. But U.S. officials worry privately that U.S.banks are holding unknown billions of dollars of credit-defaultswaps against both those bonds and the European banks thathold them. That puts them in a position that recalls AIG in lateAugust 2008, as insurance providers for a catastrophe that nowlies somewhere between the possible and the likely. Finally, ameltdown of European finance would mean horrendous reces-sions across Europe and an end to our own recovery.The sober minded men and women at the IMF aren’t given tonightmare scenarios. They believe in data, and it’s the analysis ofthose data that now points to impending crisis. Over the last sixmonths, for example, the shares of the largest banks of Greece,Italy, Spain and France have sunk 30 percent to 50 percent. Evenscarier, the costs to insure against the failure of those banksreached the same levels last week as they did here for LehmanBrothers a few weeks before its collapse. And the costs to insureagainst the complete default of Greek, Italian and Spanish gov-ernment debt — financial Armageddon — have risen 60 per-cent to 80 percent. Merkel, Sarkozy and the Dutch and Finnishmembers of the Eurozone — in effect, should pledge their owngood credit to guarantee the same for the Eurozone’s profligatesouthern countries. So far, they’ve thrown a lot of money atGreece, hoping it would satisfy global investors. We now knowthat hasn’t worked, and that much harder adjustments lay ahead.In fact, Europe’s crisis is even more serious than our own in 2008...The Eurozone’s rescue fund so far has focused on delaying Greece’sdefault. In the next two weeks, it will have to, at once, inject capitalinto unknown numbers of large banks and buy massive amountsof Greek, Spanish, Italian and Portuguese debt on the open mar-ket. The politics of pulling that off are daunting, because it will re-quire the unanimous support of 17 Eurozone governments.The European Central Bank could underwrite it — it still saysno to that — or the rescue mechanism could guarantee losses ofup to 20 percent on sovereign bonds.If the Eurozone can find its way to guaranteeing the sovereigndebts of all of its members, their future debts will have to be cen-trally and uniformly constrained. In short, the solution to the cri-sis could spell the end of each government’s autonomous right toconduct its own spending and tax policies, since that’s what gen-erates sovereign debt. That would require fundamental revisionsof the long-time social contracts these governments have withtheir peoples.
Robert J. Shapiro is Co-founder and Chairman of Sonecon, llc.In addition to chairing Sonecon, Dr. Shapiro is also a Senior Fel-low of the Georgetown University School of Business, advisor tothe International Monetary Fund. From 1997 to 2001, Dr.Shapiro was U.S. Under Secretary of Commerce for EconomicAffairs
Dilma Rousseff, President of Brazil, speaks during the general debate of the 66th session of the
United Nations General Assembly at United Nations headquarters in New York City | EPA/Justin Lane
By David Cronin By Dr. Robert J. Shapiro
Page 8 | New Europe NEW EUROPE
ANALYSISOctober 2 - 8, 2011
The NewWay
There is a sense of New Way in Europe. Where peo-ple know who they are and have a strong commit-ment with the values of freedom, social justice anddevelopment. This is the reason to believe that a newstandard of Democracy in Europe, more than a pos-sibility, is an individual and collective necessity forall of us, effective European citizens. Karl Popper ismore than ever present – the difference of Europewill be in the exercise of the capacity of the individ-ual participation as the central contribution to thereinvention of the collective society. This is a process that is not determined by law. It iseffectively constructed by all the actors in a free andcollaborative strategic interaction.In a certain sense,we need a new third way for Europe. When AnthonyGiddens spoke about this special global capacity ofcreating a new commitment between the Europeanstoward the challenge of the future, he was in factspeaking about this commitment with a NewDemocracy in Europe. Based in new standards ofSocial Innovation, this kind of New Way is aboveall the confirmation that in Europe the individualperformance in a complex society is possible, desir-able and above all necessary for the future.Europe must regain its Internal Competitive Ad-vantage but at the same time must be able to rein-force its Global Situation. In this way it´s essential tolearn the lessons that more than ever emerge from aEurope that is trying to rebuild its competitive ad-vantage and to reinvent its effective place in a com-plex and global world. In the New Global Economyand Innovation Society, Europe has a central role toplay towards a new attitude connected with the cre-ation of value and focus on creativity. In a time of change, Europe can´t wait. Europe mustconfirm itself as an “enabler actor” in a very de-manding world, introducing in the society and in theeconomy a capital of trust and innovation that is es-sential to ensure a central leadership in the future re-lations with America and the more and moredynamic developing world. The actors from Europeshould be more and more global, capable of drivingto the social matrix a unique dynamic of knowledgebuilding and selling it as a mobile asset on the globalmarket. Europe is facing a new strategic challenge. Rein-venting Europe and giving the European Actors(States, Universities, Enterprises, Civil Society) theopportunity of developing new challenges focused oninnovation and creativity is in a large sense giving acentral contribution to a New Global Order. TheReinvention of Europe is the reinvention of its peo-ple and institutions. An active commitment, in whichthe focus in the participation and development ofnew competences, on a collaborative basis, must bethe key of the difference.
Francisco Jaime Quesado is the General Manager ofthe Innovation and Knowledge Society in Portugal,a public agency with the mission of coordinating thepolicies for Information Society and mobilizing itthrough dissemination, qualification and research ac-tivities. It operates within the Ministry of Science,Technology and Higher Education
New Europe content partner
French football legend, Michel Platinijoined the Council of Europe in call-ing for sterner action against matchfixing by betting syndicates.
“European sport is afraid because ofa match-fixing phenomenon that isdeveloping in connection with large-scale online betting activities. Thegrowth of betting-related match fixingis alarming, especially because it is aproblem to which no sport and nocountry is immune,” he told the Com-mittee of ministers, who had just ap-proved a recommendation to memberstates on the promotion of the in-tegrity of sport.
Platini is President of UEFA, thebody overseeing 53 European footballassociations.
Match fixing is as old as the sport,with one early scandal between Man-chester United and Liverpool occur-ring in 1915, when players on bothteams had been betting on a 2 – 0Mancunian victory. More recently, agroup of Croatian fixers have con-fessed to arranging the results of alarge number of matches, including aWorld Cup Match, and an under-21national team, Champions League,Europa League and games in 9 differ-ent countries.
There have also been investigationsin the UK, Turkey, Italy, and Finlandwhich revealed that organized crimehas turned match fixing into a billiondollar industry.
The international football associ-ation, FIFA has also had to dealwith financial scandals and allega-
tions over vote buying that have tar-nished the organization and thesport. FIFA President, Sepp Blatteragrees with Platini over the dangersof match fixing, saying, ““Fans willno longer go to football matches ifthey know they’re fixed and if thathappens everything that’s been cre-ated in 107 years in FIFA will countfor nothing.”
Blatter has sought to fight the men-ace by signing accords with Interpoland planning an anti-corruption cen-tre in Singapore. The move came afterinvestigations into illegal betting inAsia during last year’s World Cup. Theoperation led to 5,000 arrests and theseizure of $26 million, part of an esti-mated $2 billion wagered in illegalgambling dens. FIFA is also providing€20 million to Interpol, over 10 years,to investigate match fixing.
There is concern that FIFA’s tar-nished image could damage their at-tempts to clean up the sport.
Another concern amongst crimefighters is that tampering with resultsis a high profit, low risk crime.
Platini addressed this in his speechto the Council of Europe, saying, “thecriminalisation of sports fraud is farfrom universal. And this deficiency is,in part, why match fixing is still goingon. Its international nature aggravatesthe situation further still.”
He called for action, “This is why Ibelieve the Council of Europe nowneeds to intervene. It needs to inter-vene in order to encourage its memberstates to criminalise sports fraud and itneeds to act in order to promote theindispensable cooperation between
public authorities and sports govern-ing bodies required in this regard.” Headded, “It is a question of responsibil-ity, a question of ethics, a question ofjustice.”
His call was supported by investiga-tive journalist Declan Hill, author ofthe best selling ‘The Fix: OrganisedCrime and Soccer’ which has beentranslated into 15 languages. Hill toldNew Europe, “This is excellent. Pla-tini, as an ex-football player, has reallytaken the lead in fighting against cor-ruption in sport. His speech is justwhat is needed.”
He added, “The onus is now on Eu-ropean governments and politicians toensure that the right laws are on thebooks to stop corruption in sport.This is not brain surgery. Put the leg-islation up for debate. Pass it. (Whowould possibly oppose it?) And helppreserve sport.”
Hill is regarded as the world’s lead-ing expert on match fixing, and has in-terviewed all those involved in thecrime, from players and officials tomafia bosses and hitmen.
With this experience, he says, “Thereal issue is the devastation that cor-ruption can cause to sport. I haveworked in Asia. I have seen first-hand the destruction of sports -shrinking attendance, faltering TVrevenue, but most importantly, feweryoung people playing sports - allcaused by fundamental corruption.”
He stressed the necessity of urgentaction, “We do not want this phenom-enon in Europe. We have a few shortyears to put measures in place, to stopit. Platini's speech is a good start.”
SPORT
Platini: Let’s give a red card to match fixing
Zimbabwean President, Robert Mugabe and FIFA chief, Sepp Blatter join forces to fight corruption.| EPA/AARON UFUMELI
By Andy Carling
By Francisco Jaime Quesado
The troika of the representatives of theEU-ECB-IMF which monitors and fi-nances the Greek economy, finallylanded last week in Athens, after theyhad broken off negotiations with theGreek government at the beginning ofSeptember. At that time Athens hadasked for a postponement of its obliga-tions, with most important amongstthem an increase of the allowed deficitsfor 2011 from 7.5% of the GNP to any-thing around 9%. These deficits are fi-nanced by the European Union, theEuropean Central Bank and the Inter-national Monetary Fund along with theold debts which gradually mature.
Obviously, the new deficits are addedto the old ones, making it even more dif-ficult to attain a long term equilibriumand render impossible a regular marketservicing of the country's obligations.After two weeks of flip flop the Greekgovernment agreed to do what it hadsigned and sealed. The problem is thatthe long list of additional measures pre-sented last Thursday to the minister ofFinance, Evagelos Venizelos, by thethree representatives of the EU-ECB-IMF contain far stronger policies thatGreece seems impotent to apply.
STRUCTURAL DIFFICULTIESCentral amongst these measures are
new taxes on property and income,new and large reductions of pensionsand public sector wages and last, butnot least, an extended programme ofstructural changes in the labour andservices markets along with a long listof privatisations.
While Athens appears ready andable to proceed to new cuts in pensionsand government sector wages, it ap-pears very difficult to honour the struc-tural reshuffle demanded by the troika.In this respect, despite the fact that thedeep restructuring of the economy andthe state machine are long overdue, theGreek government has being reluctantor unable to make any progress. Let’ssee why.
It is now clear to all onlookers that thepolitical structures in this country are in-terwoven with the distortions in thefunctioning of the economy and thestate machine, which produce hefty in-comes for some groups.
For example, the functioning of thetaxation system permits, if it does notpromote, the private “negotiations” be-tween the tax men and citizens, to thedetriment of what finally is paid to thestate coffers. In this way almost 80% ofprofessionals and small businessmen areallowed to declare an annual incomebelow the taxable level. Then the tax au-thorities begin “negotiating” privately
with those citizens about the truthful-ness of the tax returns. Only wage earn-ers and pensioners duly pay their taxobligations.
Unfortunately, all the new taxes im-posed by the Papandreou governmentover the past eighteen months are leviedon those who dutifully pay their obliga-tions to the state, leaving the tax evadersuntouched.
Then come the services market,where lawyers, notary publics, pharma-cies, charted accountants, engineers,whole sale trade in a number of prod-ucts and the entire transport sector, areall being well protected from competi-tion forces, with legally imposed fees ,margins and controls.
Last but not least, the overstaffing inall and every public service as well as themal-functioning of some of them withcrucial importance for the economy asfor example the Urban Planning Offices,the Forest Service and many others, hasnot been under serious screening by thegovernment. In reality the entire statemachinery, local authorities included,seem to be there just to serve the peopleoperating them and not the society andthe economy as a whole.
In the unholy alliance to blockchanges in all those fronts, are all po-litical parties of the Parliament, fromthe extreme right to the CommunistParty of Greece. For example in highereducation the unproductive “coopera-tion” between student unions and themanagement of schools, is under the“protection” of the two left Parliamen-tary parties.
Then comes the hurdle of privatisa-tion. Public utilities, sea ports, air ports,gambling and many other lucrative sec-tors are controlled and operated by statesector firms, with most of them operat-ing in the red. Decades of petty politicalparty practices, backed also by the tradeunions, have led to overstaffing and cor-ruption, and have created very strongand wealthy minorities. For example,GENOP-DEH the trade union of the
Public Power Corporation, the statecontrolled electricity monopoly, has de-clared that they will undermine the gov-ernment decision to impose a propertytax which is to be cashed in through theelectricity bills.
It is very characteristic that thestrongest opposition to the privatisa-tion drive and the much needed struc-tural reform in all these fronts, comesfrom within the governing PASOKparty and all the other parties in theParliament irrespective of “ideology”,left and right alike.
The leader of New Democracy, An-tonis Samaras, declares on every occa-sion that if he was prime minister therewould have been no layoffs in the statesector, that he would have reduced tax-ation, put again the economy in agrowth path and re-negotiate theneeded changes with the lenders to thecountry. The left parties follow evenmore populist rhetoric promoting the“den plirono” (I don't pay) destructivemovement. Even the Chambers ofCommerce all over Greece depend ongovernment subsidies, while participa-tion in them is compulsory, irrespectiveif their members really need or not asubscription.
In view of all that, the private sectorof the real economy, or what is left of it,has abandoned hope. The problem isgetting worse and worse every day, be-cause the government and along withthem the entire political party system,does not want to see its grip on thecountry being relaxed.
All those distortions, however, needyears to correct, even if the correctivepolicies are wholeheartedly applied andfinally lead to a new and bright growthera. In the short term thought the coun-try will not be able, to serve a still grow-ing sovereign debt. This becomes everyday more evident and after the 6th in-stallment of financial aid/loan to Greecefrom the troika of EU-ECB-IMF to beprobably released this week, there wouldsurely be a hair cut.
ANALYSISNew Europe | Page 9
NEW EUROPEOctober 2 - 8, 2011
All kinds ofeverything
There are seven candidates in this year’s presidential elec-tion in Ireland; not an astonishing fact in itself, but re-markable considering that last time out there was only,sitting president, Mary McAleese. Presidential elections are usual prosaic events in Ireland, theoffice often seen as a mere rubber-stamper, but following theelevation of the presidency to something approachinggrandeur by the last two incumbents, McAleese and MaryRobinson, plus the fractured nature of the general electionearlier in the year, which changed the Irish political landscape,everyone is seemingly up for a grand ideological battle.Media attention so far has been focussed heavily on theentry to the race of Sinn Féin’s Martin McGuinness, cur-rent Deputy First Minister in the Northern Ireland As-sembly. McGuinness, a self-confessed previous member ofthe provisional IRA, which he claims to have left as far backas 1974, has been largely playing up his role as peacemaker,as bringing Sinn Féin, the political wing of militant re-publicanism, into the political fold, and being a key com-ponent of the 1998 Good Friday peace agreement. Few candoubt his progress in this regard, and the trust he has helpedforge between both communities of Northern Ireland havewon him many plaudits from both sides of the political andsectarian divide. His ‘chuckle brothers’ routine with theReverend Ian Paisley became an iconic media representa-tion of the path both sides had taken to power-sharing. McGuinness no doubt feels that elevation to president willcement him as a true statesman. It will certainly representSinn Féin’s elevation to the mainstream. Right now, how-ever, his party, which scored its best ever results in the Irishgeneral election in February, is still seen as something of anoutsider. As such, McGuinness knows that he can play theoutsider card, the victim card, and history be damned. Themedia have already shown signs of backing off, concentrat-ing instead on his knowledge of, and connection with, theRepublic of Ireland and its political and diplomatic struc-tures; apparent bullying will only play into his hands. In contrast, Dana Rosemary Scallon, former MEP and Eu-rovision Song Contest Winner Dana, is a late entry to therace. As a former presidential candidate, she is not totallyremoved from things, and will no doubt score a respectableshare of the vote. But her old-time Catholicism, her strongviews on abortion and the like will not endear her to themajority of the population, despite potentially picking upvotes from discarded Fianna Fáil voters, whose party, sodominant in past elections, have failed to field a candidatethis time out. Certainly not the the supporters of DavidNorris, who polls suggest is one of the frontrunners alongwith McGuinness and Michael D Higgins from theLabour Party. Norris, an early favourite who previously withdraw fromthe campaign after it emerged he had written a letter to anIsraeli court pleading clemency for a former partner, EzraNawi, who was accused of statutory rape of a 15 year-oldboy, has managed to claw his way back, and is now regardedas a very serious contender for the post. Norris, a Joyceanscholar and openly gay, is seen with a certain amount of af-fection form the electorate, despite his often bombasticimage (his frequent media tag of ‘flamboyant’ is seeminglyboth a euphemism for his public persona as well as his sex-uality). He is both a contrast to Dana’s buttoned-up cam-paign, as well as providing a magnet for the liberal-left, keenfor some form of supposedly radical change, but not will-ing to let things go too far.
EVERYTHING BUT ARMS ECONOMY
Greece gradually shapes its fateThe 6th loan installment to be released but not a 7th one
Citizens wait in line at a tax bureau office for the payment of the solidarity special tax inAthens, Greece, 30 September 2011. |EPA/ALKIS KONSTANTINIDIS
By Dionyssis KefalakosBy Cillian Donnelly
Page 10 | New Europe NEW EUROPE
ANALYSISOctober 2 - 8, 2011
Since the April 2010 Deepwater Horizon Inci-dent in the US Gulf of Mexico, governmentsaround the world have scrambled to determinewhether changes are needed to prevent and ad-dress similar incidents. The European institu-tions are currently considering proposals thatwould harmonize and tighten requirements foroffshore activities at the European level, expandthe Environmental Liability Directive (“ELD”)to include all marine waters, which are currentlyexcluded from the Directive’s scope, and poten-tially require that European-headquartered com-panies apply EU standards to their activitiesworldwide. These pending proposals, however,are premature and need to be assessed carefullyrelative to status quo and other alternatives.
The Commission’s October 2010 Report“Facing the challenge of safety of offshore oil andgas activities” identified areas where action wasdeemed necessary to maintain environmentaland health safety for offshore activities in Europe.This report was followed by opinions from twocommittees of the European Parliament, and aParliament resolution setting forth recommen-dations to prevent offshore oil spill incidents andaddress them if they were to occur, including pos-sible expansion of the ELD to all marine waters.These proposals would be necessary to “closegaps” in the European legislative framework.Clearly, offshore drilling and safety is an issue ofgreat interest to both private and public sectorsalike, as evidenced by nearly 75 submissions --ranging from individual citizens to industrialcompanies to government authorities to NGOs-- in response to the April 2011 DirectorateGeneral of Energy public consultation on im-proving offshore safety in Europe. Opinions onwhether expansion of the ELD and more regu-lation are effective ways to prevent and addressoff-shore oil spills, however, diverge.
The EU is considering expansion of the ELD’sscope, although the experience with the ELD
regime is very limited. In 2007, the Environ-mental Liability Directive established a commonframework for the prevention and remedying ofenvironmental damage to land, water and pro-tected species and habitats. The ELD was to beimplemented in the Member States by 30 April2007, but it was not until July 2010 that it was infact transposed into the national laws of all 27Member States. Actual case experience is stillnascent, including the determination of applica-bility of the ELD to specific incidents; whetherdamage is “significant”; to what extent remedia-tion is required to offset environmental damage,and which of several remediation options is themost appropriate option. As noted by anotherCommission report issued in October 2010, theELD itself continues to be a developing regime;as such, its actual effectiveness is not proven andapplication among Member States is inconsis-tent. While the ELD, if properly applied, has thecapacity to prevent and remedy environmental
damage to land, inland water and protectedspecies and habitats, it is too early to expand theELD’s scope to all marine waters.
Fortunately, there is a more suitable mecha-nism for addressing the issue of off-shore acci-dents. Extensive experience with environmentaldamage liability suggests that the extension of theexisting international liability regimes would bea preferred option. These international regimesare driven and managed by industry and govern-ment jointly, and have been successful in ad-dressing oil spills in international waters. Sincethey are not limited to EU off-shore waters, theywould be also apply where the ELD does not.After all, off-shore oil pollution does not respectnational boundaries and some of the affectedcountries will not be part of the EU.
Likewise, proposals for additional command-and-control regulation, which would supplementthe expanded liability program, assume that thegovernment is able to specify in detail how com-
panies can prevent incidents. In fact, there is lit-tle empirical support to back the theory that in-creased government control leads to betterprevention, more safety and ultimately fewer ac-cidents. The proposition that EU-headquarteredcompanies should be required to apply EU stan-dards to all of their activities worldwide, or risklosing their EU licenses, would lead to counter-productive responses, such as restructuring toavoid this responsibility or moving headquartersto outside the EU, and thus be ineffective. In-stead of imposing liability and sanctions, the EUshould collaborate with industry to prevent fu-ture offshore accidents through measures such asencouraging self-reporting of non-complianceand unsafe situations so that they can be ad-dressed in a proactive manner.
The pressure to adopt new, more stringent andexpanded legislation in response to the Deep-water Horizon Incident is understandable; how-ever, superimposing new requirements, without“truth testing” them relative to the underlyingneed for such change, may not be prudent. Astronger course would be for the internationalcommunity to examine, expand, and bolster viamore rigorous enforcement or modifications, asnecessary, the current schemes in place to pre-vent and address oil spills in international waters.The strong base of existing international oil pol-lution conventions and treaties can address theconcerns of governmental authorities and othersand would enable a truly international and ef-fective approach. An international regime couldprovide proper incentives to companies, no mat-ter where they are headquartered in the world,to prevent, mitigate and effectively respond tooffshore incidents. In this way, the response tothe Deepwater Horizon Incident can be a trulyinternational and effective one.
Prof. Lucas Bergkamp is a Partner at Hunton &Williams, Brussels Barbara J. Goldsmith is the Founder & Presidentof Barbara J. Goldsmith & Company, Brussels
The BP Deepwater Horizon oil rig, which exploded in July 2010, dumping oil into the Gulf of Mexico | EPA/Bob Pearson
ENVIRONMENT
Off-shore oil spills require government-industry co-operation, not more regulation and expanded liability
Speaking in Hong Kong,Tony Tyler, CEO of the In-ternational Air TransportAssociation, slammed theEU’s planned EmissionsTrading Scheme, due tostart in 2012, and called foraction via the International
Civil Aviation Organisa-tion(ICAO).
“IATA is not opposed toemissions trading. We sup-port the concept as a possi-ble mechanism for thefourth pillar of our environ-ment strategy. But the EU’sunilateral and regional ap-proach to ETS could not bemore misguided. It is dis-tracting governments fromfocusing on the real solution- a global approach throughICAO,” he told delegates ata ‘Greener Skies’ conference.
He also claimed that thescheme breached nationalsovereignty.
Tyler continued, “Eu-rope’s plans contravene in-ternational law with theextra-territorial applicationof taxes. What right doesEurope have to charge anAustralian carrier for emis-sions over China? It is an at-tack on sovereignty that isbeing challenged by govern-ments. China, India and theUS are among states for-mally opposing the EU
ETS. And the US is evenprocessing a bill that willprohibit its carriers fromparticipating. While the EUsees its actions as supportinga positive environmentalagenda, the rest of the worldsees it as an attack on sover-eignty.”
He added, “While the EUsees the ETS as environ-mental policy, the rest of theworld sees it as an attack onsovereignty. The colonialera, when Europe imposedtaxes on the world ended
some time ago. “ He also re-marked, “And finally, there isno requirement for moniescollected through the Euro-pean ETS to be spent onenvironment projects. Theyjust go to the general treas-uries of governments. This isnot acceptable.”
He did see value in trad-ing schemes, but insistedthey had to be global. “Man-aging carbon emissions is aglobal problem. Aviation is aglobal industry. And weneed a global solution. All
roads lead to ICAO. It istime for Europe to refocuson a Plan B that is centeredon a global solution throughICAO.”
He said that the ICAO hada work program in place forthe 2013 Assembly to agree toa global framework, but hesaid, “Unfortunately, Europe’sETS plans are distracting at-tention from this importantwork.”
Tyler heads an organiza-tion of 230 airlines from 118countries.
ENVIRONMENT
Aviation chief calls EU Emissions Trading System ‘misguided’“Europe’s plans contravene international law”
By Lucas Bergkamp & Barbara J. Goldsmith
Tony Tyler, Director and CEO ofIATA
The current application of EU’s Com-mon Agricultural Policy (CAP) must notbe allowed to continue to undermine itsstated goals of ending global inequalitiesin farming, a leading NGO has said.
Speaking on the occasion of the launchof a new report complied by ActionAidon 27 September, Trine Pertou Mach,Chair of ActionAid Denmark, said thatthe CAP has an in-built obligation to enddeficiencies in global food and agriculturemarkets. “On a political level, CAP can-not be a negative force. It cannot under-mine those gaols,” she said.
The report, Milking the Poor, illustrateshow subsidised EU milk is causing unfaircompetition to poor farmers inBangladesh, suppressing investment inthe dairy industry and undermining EUinvestments in food security.
In addition it contends that Europeantaxpayers continue to “fund the EU toharm the livelihoods of poor dairy farm-ers” in the developing world, while “at thesame time as funding aid programmesdesigned to help them”.
According to the report’s finding’s €5billion is given per year to dairy farmersin the EU,while the lack of export limitsallows farmers to raise production and selltheir milk products outside of Europe atbelow cost prices. It also says that subsidy-driven EU milk exports are damaginglocal markets in developing countries, andthreatening the livelihoods of millions ofpeople employed in the dairy industry inBangladesh. It’s release comes as the Eu-ropean Commission prepares to release alegislative proposal on the CommonAgricultural Policy (CAP) on 12 Octo-ber. The CAP reform is obliged to ensurethat the global food system is equitable,
says Trine Pertou Mach. “It is statedclearly that the CAP end all elements thatdistort competition for developing coun-tries. It has to fight hunger and poverty.The EU is obliged to live up to this goal”.
The report highlights the exampleof the joint Swedish-Danish dairygiant Arla Foods, which producesLurpak butter and DANO milk pow-der and has received nearly €1 billionin CAP subsidies since 2000, as an ex-ample of a subsidy-heavy producerthat is causing market distortion inBangladesh. “Bangladeshi farmers canhardly sustain a living,” says PertouMach. “Due to subsidies, Danish pro-ducers are able to export, even withouta great amount of export subsidies.Without this help, the country would-n’t be able to produce enough for itsinternal market”. Instead, EU-sub-sidised exports to countries like
Bangladesh are destroying local mar-kets, driving-down prices and forcingfarmers into a situation that “canhardly sustain a livelihood”.
Local farmers, she says, are not af-forded the opportunity to increase theirmilk production. If such an opportunitywas available, the local industry wouldbe able to create between 40 and 50times more jobs than currently exist.The equation is simple, she says, “morejobs means better revenue, means betterlives for families.”
“The CAP and the EU is obliged tolive up to that goal,” she says of the pol-icy’s supposed commitment to creatingfair global market for agriculture. “We arenot looking for a phase-out of the CAP,just a change to those distorting elementsof it. We need to take all those elementsout, and ensure that the global food sys-tem works for everyone.”
ANALYSIS
New Europe | Page 11NEW EUROPEOctober 2 - 8, 2011
Dairy farming in the EU. A new report by NGO ActionAid highlights the negative effects the sub-sidy-heavy European dairy sector has on countries in the developing world, such as Bangladesh. | BELGA
COMMON AGRICULTURAL POLICY
CAP must uphold its equitable goals
The answer to life,
the EUniverse and
everything
The state of the union speech by President Barroso wasthe highlight of the week for EU nerds. The Commis-sion had plugged the event on Twitter and asked peo-ple to use the hashtag #soteu. Thus, we were able to geta snapshot of the global reach of the speech.Using websites that can match use of the hashtag to ge-ographic location, we found that those following theofficial tag were almost entirely in Brussels. The one ex-ception, in Copenhagen was quickly traced to JonWorth, the tireless commentator on the EU, who was ata conference there. Of course, this was a little odd asthe speech was given to the Strasbourg plenary.According to the hashtag, few, if any at all, of the goodcitizens of Alsace had any interest in the historic event.In a moment of glorious timing, the day before Bar-roso’s state of the union speech (which should have con-sisted solely of a prolonged primal scream), it wasdiscovered by Bruno Waterfield of the UK Telegraph,that the parliament was planning spending an addi-tional €30 million on larger offices in the city, thatwould be used for one day a week.These are the people lecturing Greece about fiscal re-sponsibility.It was a better than average session, with more passionthan usual, and the sight of the surprisingly full cham-ber was a pleasant change.The main topic was the financial crisis. The scene wasenlivened by the very real possibility that the roof mightfall down again, a metaphor made real.But the speech did answer questions about Europe, thebailouts, and the hopes and dreams emanating fromBerlaymont. Sadly, the answer was the same for everyquestion: More Europe!This was announced to a parliament that, despite tensof millions being spent on promoting the institution,fewer and fewer citizens have any interest in. At eachelection two things happen; The EU announce surveyresults showing voter turnout will rise significantly, andlater, the actual figures show turnout has, yet again,dropped.More Europe! There is little sign that the half a billionpeople who live in the EU want more Europe, and lesslikelihood that they are going to be asked. This raisesthe prospect that More Europe means that the EU willbecome more distant from the citizens. This gap is al-ready uncomfortably large and it remains Brussels’ dirtylittle secret. We occasionally, just occasionally, refer to‘democratic deficit’. It is hard to see how More Europewill do anything but widen that gap, possibly to break-ing point.If we are to have more Europe, can we have a fiscally re-sponsible Europe? Could more Europe mean having amodern parliament, you know, in just one place. Youdon’t see the House of Commons buggering off to theShetland isles every month. Can the new improved Eu-rope be one that listens to the citizens?The people want Strasbourg closed and as long as it re-mains an occasional residence, the message from theEU has gone out, loud and clear to all: We don’t give adamn what you think.That’s the problem. We may need More Europe, but that issecondary. What we need before then is a better Europethat puts citizens above the interests of the lobbyists.
CONSTRUCTIVE AMBIGUITY
By Cillian DonnellyBy Andy Carling
Europe will get better access to medical infrastructureresearch with the inception of a new transnational re-search network on 1 October.
EATRIS, a pan-European network of translational re-search infrastructures in medicine initiated by the Euro-pean Strategic Forum on Research Infrastructures(ESFRI), aims to improve the translation of biomedicalresearch into medicines, diagnostics and medical devices.
It will provide a “one-stop-shop access to the tech-nologies and expertise residing in Europe’s best researchinstitutions and companies and other research groupscollaborating with it can expect more effective transla-tion of their fundamental scientific breakthroughs intopromising products. Key disease areas are cancer, cardio-vascular, neurology, immunological, metabolic and infec-tious diseases.”
According to Giovanni Migliaccio, Scientific Director
of EATRIS, “the pharmaceutical industry yearly spends$ 60 billion on R&D of new medicines, many healthcarechallenges remain.
Only 10% of the medicines under development,mostly for treatment of common diseases, will reach themarket and this makes novel medicines extremely ex-pensive.
Moreover, even the medicines which are approved are(to variable extent) only effective in a small proportion ofthe indicated patient group and hence a paradigm shiftis needed in which academics and industry share facili-ties and expertise.” The new coordination & support of-fices of EATRIS are located on the campus of the VUUniversity Medical Center in Amsterdam. Key objectivesinclude creating a simple and effective ‘one-stop-shop’access platform via the coordination office, and bringingthe infrastructure consortia to project readiness.
HEALTH
European medial research network launched
As international pressure continues tomount on Syria's treatment of peace-ful protesters, Britain's ambassador inDamascus released on official blogpost condemning the regime's be-haviour.
Simon Collis' blog titled, “Thetruth is what big brother says it is,”lashes out against the Syrian govern-ment's response to protests for reformand how they have controlled the
media to prevent the truth from com-ing out.
“The cruel reality in Syria is thatthey are doing all they can to pull theshutters down. Foreign journalists arerefused entry. Any non-Syrian localcorrespondents are kicked out –sometimes after a beating. Syrian cor-respondents, bloggers and citizenjournalists are systematically trackeddown and imprisoned,” writes Collis.
Collis also discusses the regime'sattempts at reform and how they fall
well short of their lofty aims. “Likepretty much all of its reform pro-gramme to date, the regime’s answerto its critics was to announce thatthere would be a new media law; andthat a committee had been set up todraft it. But you don’t need a new lawto decide to let journalists in. Youdon’t need a new media law to pre-vent the big brother mentality thatprevails here,” he said. Despite everyeffort to repress images of unrest inSyria, Collis points out there have
been some people risking their livesto tell the truth. “Brave individualscontinue to find ways through to getout video clips that show Syrian se-curity forces firing into crowds of un-armed protesters, or abusing detainees– you can search for them onYouTube. I’m constantly amazed attheir skill, daring and ingenuity infinding ways to capture and uploadpictures of events on the ground insomething close to real time,” he said.
Since the uprising in Syria began
six months ago, the United Nationshas estimated that over 2,700 peoplehave died. Protesters began rallying inDamascus for government reform.The Syrian regime, headed by Basharal-Assad, has violently cracked downon the protests and demonstrations.Many, including the United Statesand the European Union, have con-demned Syria's actions, but none oftheir statements have grasped the sit-uation quite as well or said it asbluntly as Collis' blog.
EU WORLDPage 12 |New Europe NEW EUROPEOctober 2 - 8, 2011
ARAB SPRING
British Ambassador slams Syria's regime
BERLIN – Regardless of whether democrati-zation in the “new Middle East” succeeds orauthoritarian forms of government prevail onceagain, one fundamental change has already be-come clear: no one will be able to govern with-out taking into account domestic publicopinion.
This change will shift the foreign-policy pa-rameters of the Middle East conflict (under-stood as both an Israeli-Palestinian conflict andas a conflict between Israelis and Arabs moregenerally). Despite wars in Lebanon and Gaza,and the intifadas in the occupied West Bank,these parameters have proven surprisingly sta-ble for decades, anchored by the peace agree-ments with Egypt and Jordan and the Osloaccords with the Palestinians.
All this is about to change. And, while thetectonic shift in the region was triggered by the“Arab Awakening,” its players are not limitedto the Arab world or to the confines of theMiddle East conflict. The United States, Eu-rope, Turkey, and, in a certain sense, Iran all playa role – some more directly than others.
Let’s begin with the US. President BarackObama’s speech in Cairo two years ago createdgreat expectations, but few or none have beenfulfilled. Instead, the US allowed a political vac-uum to form in the absence of any movementon the part of Israel’s government. This vacuumhas now been filled by the Arab Awakening.
Europe, meanwhile, is preoccupied with itsown crisis. But, in the last few years, the Euro-peans, led by German Chancellor AngelaMerkel and French President Nicolas Sarkozy,have de facto slammed the door to EuropeanUnion accession in Turkey’s face. As a result,Turkey has embraced a “neo-Ottoman” foreignpolicy, in which the Arab world – even morethan the Caucasus, Central Asia, and theBalkans – plays the central role.
Of course, Turkey, in accordance with its po-litical, security, and economic interests, has nochoice but to pay close attention to its southernneighborhood, and must try to prevent chaoticdevelopments there. Turkey would be facing
the same risks even if it were integrated into aEuropean context, but its priorities would thenbe completely different.
Because of Europe’s short-sightedness,Turkey has in effect abandoned its ambitionsfor EU membership and opted for the neo-Ot-toman project of becoming a Middle Easternpower – a policy shift that reflects both interestsand ideology. On the one hand, Turkey viewsregional dominance as a stepping-stone to agreater global role; on the other hand, it viewsitself as a role model for successful moderniza-tion of the Middle East on an Islamic-demo-cratic basis.
This bid for regional preeminence willsooner or later bring Turkey into serious con-flict with neighboring Iran. If Turkey prevails,Iran and the radicals in the region will becaught on the losing side of history – and theyknow it.
While Turkish Prime Minister Recep TayyipErdoğan’s government is trying to maintaingood relations with Iran, its ambition to be-come the leading Sunni power means that
Turkey must sooner or later contest Iran’s in-fluence in Iraq, as well as in Syria and Palestine.And that means conflict.
The drastic deterioration in Turkey’s relationswith Israel is related to this emerging Iranian-Turkish rivalry. To be sure, this rivalry also hasa positive side from the Israeli point of view –the weakening of Iran and other regional rad-icals. But, for Turkey as an aspiring regionalleader, the interests of the Palestinians are nat-urally more important than its relations withIsrael. This has become all the more true inlight of the revolutionary changes in the Arabworld, and is at the root of Erdoğan’s foreign-policy reorientation.
As a result, Israel is in an increasingly difficultsituation. Without a strategic re-orientation ofits own – to remain passive is a risky endeavorin a rapidly changing world order – Israelwould further delegitimize and isolate itself in-ternationally. A viable Israeli answer to the dra-matic changes in the region – and to theiralready foreseeable consequences – can onlytake the form of a serious offer of negotiations
to Mahmoud Abbas’s Palestinian government,with the objective of signing a comprehensivepeace treaty.
Security questions must be taken seriously,but they carry less and less weight, because asufficiently long period can be left between thetreaty’s conclusion and its full implementationto resolve them by mutual agreement. But Is-rael’s current passivity – with all of its negativelong-term consequences for the country – islikely to continue as long as Prime MinisterBinyamin Netanyahu considers his coalition’ssurvival more important than a decisive peaceinitiative.
At the same time, the pressure of the Arabrevolutions is transforming the Palestinians intoa dynamic political factor. For example, in viewof the looming fall of Syria’s President Basharal-Assad, the pressure of the Egyptian revolu-tion, and the new role of Islamism in the re-gion, Hamas’s alliance with Iran is becomingincreasingly problematic. It remains to be seenwhether, in the end, the “Turkish course” willprevail against the radicals in Gaza or not.
In any case, Hamas faces some risky andconsequential decisions of its own – all themore so should its main rival, Abbas’s Palestin-ian Authority, succeed in its current diplomaticcampaign at the United Nations. Obama hadpromised a Palestinian state within one year,and Abbas is now building upon that promise.
But what happens next is crucial. Will Abbasbe able to keep the Palestinians on a diplomaticpath, or will the situation degenerate again intoviolence and another disaster? And what willthe Palestinian road towards peace look likeafter the UN decision to recognize some formof statehood for Palestine?
Given the current pace of change in theMiddle East, we might not have to wait longfor answers – or for more questions.
Joschka Fischer, Germany’s foreign ministerand vice-chancellor from 1998 to 2005, was aleader in the German Green Party for almost20 years.Copyright: Project Syndicate/Institute forHuman Sciences, 2011.
POLITICS
Which new Middle East?
Libyan Amazigh people attend a rally at Martyrs' square on 2011 in Tripoli, Libya, 27 September. | EPA/Mohamed Messara
By Joschka Fischer
By Jordan Shapiro
The Arab Spring provided an unprece-dented foreign policy dilemma for the Eu-ropean Union and the United States. As theold Arab regimes unravelled, both super-powers were left scrambling and on thesidelines.
For the European Union, the response tothe uprisings were less than harmoniousand with the exception of a NATO led in-tervention in Libya, tepid. The reaction tothe Arab Spring demonstrated how foreignpolicy differences at the member-state levelundercut European interests.
“European states were in the lead, butonce again Europe was not. Europeans haveno collective idea whatsoever of their role assecurity providers in their own neighbour-hood,” said Sven Biscop, Europe in theWorld Programme Director, in the EU-Washington 2011 Forum debate.
Likewise, the United States, still reelingfrom widely unpopular wars in Iraq andAfghanistan, was hesitant to involve itselftoo closely in the conflicts. The US had tocope with unpopular sentiment amongst itsown citizens, a divided government and asignificantly damaged reputation in theArab world.
“For Mr Obama, it has been crucial toavoid any suspicions being raised of a USleadership role on the ground, be it in Iranor Egypt. It is the protesters who should beleading the process,” said Sebastian Grafe ofHeinrich Böll Stiftung in the Forum.
Given their problems on the home frontand the disdain for outside intervention bythe rebels, the EU and the US have had tostrike a delicate balance in the region. Theyhad to figure out how to exert their influ-ence and yet at the same time remain onthe sidelines and simply let the revolutionsunfold.
“They favoured reform in principle, butthey feared the unpredictable consequences
of prolonged instability. To cap it all, thewestern powers’ credibility with the new de-mocrats of the Arab street, after decadesspent backing reform in theory while prop-ping up the dictatorships in practice, was al-most zero,” said Simon Tisdall of TheGuardian.
The Western leaders lack of response tothe Arab Spring was due in part to a lack ofleverage to intervene as well as divided pol-icy goals in their respective institutions. ForEurope the division occurred with differentinterests at the member-state level, while inthe United States President Obama was atodds with Congress over sidestepping theirauthority. Congress was not happy to be leftout of the Libya decision and tried to un-dercut the President at every corner.
Europe had its own problems with form-ing a united front on Libya. While NATOpressed forward with the air strikes underthe leadership of the United Kingdom andFrance, Germany and Poland opted not toparticipate at all.
“Rather than showcasing post-Lisbon
EU leadership, European reactions to theArab Spring were all too familiar as a ca-cophony of voices from individual Euro-pean capitals drowned out Brussels-basedinstitutions and personalities,” said EvaGross of the Institute for European Stud-ies in the EU- Washington Forum.
These divisions and therefore limited in-volvement in the Arab Spring pose signifi-cant questions about future Western
endeavors and how the world's two largesteconomies will work together. The EU'sfailure to come together and impose aunited front will damage its cooperationwith Washington. Why would the US workwith the EU, where it gets mixed signals,when it could work with the UK?
“Washington should continue to workwith national governments who share itsapproach to tackling the threats of todayand tomorrow, and Brussels should simplyget out of the way,” said Sally McNamara ofthe Heritage Foundation.
Until the EU can adopt a truly cohesiveforeign policy strategy it will be left on thesidelines again, just as it was for the ArabSpring. The US, however, must address itsreputation in the Arab sphere, brought onby years of meddling and a close unwaver-ing relationship with Israel.
“The US is currently facing a tremendousloss of influence in the region. ChangingUS policy toward authoritarian regimes hasbeen like turning an oil tanker,” Grafe said.
Both the EU and US have significantchallenges ahead in dealing with the Mid-dle East, from Iran's nuclear program toPalestine's UN application for statehood.The answer lies in the EU setting aside na-tional interests for the good of Europe andfor the US to try again in the region.
EU WORLDNew Europe | Page 13NEW EUROPE
October 2 - 8, 2011
ARAB SPRING
EU-US criticised for ‘tepid’ responseMember states, not EU in the lead say experts
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Egyptians hold banners and shout slogans during a protest in September 2011 in Cairo. The ArabSpring has brought significant questions on the ability of the EU and US to influence global develop-ments. | EPA/Mohamed Omar
By Jordan Shapiro
States should be prepared toadopt a new, broader notion ofwhat constitutes the media,which includes social mediaand video games, according tonew recommendations putforward by the human rightsbody, the Council of Europe(CoE).
Speaking in Nairobi on 27September on the issue ofStrengthening the protectionof cross-border internet per-sonal data, CoE Deputy Sec-retary-General, Maud deBoer-Buquicchio, said that this
year marks the 30th anniver-sary of the Council of EuropeConvention for the Protectionof Individuals with regard toAutomatic Processing of Per-sonal Data (Convention 108).“Its purpose,” she said, “whichis to secure for every individualthe right to privacy, remains asvalid today as it was 30 yearsago. The increased use of In-ternet, the borderless nature ofdata flows and the develop-ment of new technologies leadto new data protection chal-lenges.” He comments come as
the Council of Ministers of theCoE, adopted on 23 Septem-ber two recommendations andtwo declarations calling on itsstates to uphold the value offree speech and online access toinformation.
According to the CoE’sdeclaration on internet gover-nance, countries should,amongst others, ensure tomaintain that the internet up-holds the principles of humanrights, democracy and the ruleof law, as well as allowing forcultural and linguistic diversity.
INTERNET
New media landscape has to uphold human rights principles
On 29 September, the Delegation ofthe European Union to Russia wasdue to host a final conference of theEU-funded project “Support to e-Government in the Russian Federa-tion – Government-to-citizenselectronic services.” This €2-millionproject aimed to increase administra-tive efficiency and improve access togovernment electronic services byRussian citizens. The project startedin August 2009 and run for 27months, the EU Delegation to Rus-sia said in a press release.
The project was designed to sup-
port the government’s various initia-tives to promote e-Government as aprimary instrument in the reform ofpublic administration in the RussianFederation.
It has specifically contributed toimproving the relations betweengovernment and citizens bystrengthening transparency and ac-countability of the state to its citizens,increasing administrative efficiencyand improving access to governmentservices. The project has increasedthe co-operation within and betweenRussian regions and established a
sustainable co-operation on the e-Government issues with the EUpartners.
This project was built on the re-sults achieved under the previousEU-funded projects in the areas of e-Government what were imple-mented between 2004 -2009 in theregions of the North-Western Fed-eral Okrug, namely, in Arkhangelsk,Kaliningrad, Novgorod, Petroza-vodsk and Saint-Petersburg. Thistime, the G2C project has coveredthe entire Russian Federation withspecific e-services implemented in
regions.The project touched about 25,000
people, mainly civil servants, from thewhole of Russia. The project has pro-vided training for 3,000 civil servantsfrom 53 different regions. It has de-veloped 9 e-Government services forthe authorities of six different re-gions. The project has produced aswell an important quantity of workson legal and strategic issues. Theteam took an active part in 56 con-ferences and roundtables about e-Gov issues across Russia. From theearly stages, the project was designed
to meet the priorities of the regionsinvolved.
The project was implemented by aconsortium led by GDSI (GalwayDevelopment Services Interna-tional). On the Russian side, theMinistry of Economic Developmentand the Ministry of Communica-tions and Mass Media acted as theproject partners with four pilot re-gions (Kaliningrad, Karelia,Ulyanovsk, Vologda) and three asso-ciated regions (Astrakhan, Khanty-Mansiisk and Petro pavlo vsk-Kamchatsky).
EU-RUSSIA
From the Baltic Sea to the Pacific Ocean: EU-Russia wrap up e-government project
STRASBOURG – In a debate at the Eu-ropean Parliament in Strasbourg last week,just before the Eastern Partnership Summitin Warsaw, MEPs expressed their concernsabout the fate of Ukrainian former primeminister and leading opposition politicianYulia Tymoshenko and the objectivity of theUkrainian judiciary.
But MEP Adina Valean from Romania, amember of the delegation to the EU-Ukraine Parliamentary Co-operation Com-mittee, told New Europe that Brusselswould continue working with Kiev. Ukraineis expected to conclude talks with the EUbefore a bilateral summit in December.
Asked if the outcome of the outcome ofthe handling and the outcome of the Ty-moshenko trial could affect the signing ofthe Association Agreement at the Decem-ber summit, Valean said, “I think we mustcontinue and conclude the AssociationAgreement and strengthen our partnershipwith Ukraine. The Timoshenko case willnot delay the signature of the Associationagreement but its ratification may well bedelayed in some Member States who con-sider that the rule of law is not re-spected. The Timoshenko trial is also aquestion of political families and their in-terest for pushing the game in one way oranother.”
Nevertheless, Ukrainian President ViktorYanukovych faced criticism in Warsaw overthe contentious trial of Tymoshenko. Euro-pean leaders talked about the democraticbacksliding in Ukraine rather than the freetrade and visa deals, according to news re-ports.
Yanukovych carefully avoided any men-tion of the issue during pre-summit pressappearances with Polish officials, insteadtouching upon stronger economic relationswith the EU and the Euro 2012 football
tournament, according to the reports.Tusk, however, stressed the "very high
standards" that countries seeking associa-tion agreements and free trade deals withthe EU must meet, including "the demo-cratic fundamentals" related to the treat-ment of the opposition.
EU President Herman Van Rompuy saidat the summit that the 27-country bloc "ac-knowledges the European aspirations andEuropean choice of some partners" and isready to support them. But in the run-up tothe meeting, EU heavyweights France andGermany clearly ruled out giving the East-ern Partnership countries any sense thatthey may eventually be able to join the bloc.
Ukraine is the country in the EasternPartnership that is furthest along in rap-prochement talks with the EU and the keygas transit country for Russian gas supplies
to the EU.Regarding energy co-operation, Ukraine
operates one of the world's largest naturalgas transportation systems and is responsi-ble for shipments of up to 80% of Russia'sEurope-bound gas supplies.
Valean ruled out another gas crisis in Eu-rope in the event of another dispute be-tween Russia and Ukraine. “I do not thinkthere will be another gas crisis because theaccumulation of conditions which made theprevious crisis possible are not present any-more, hence the political context is not thesame either,” she told New Europe. “In ad-dition, aware of our interdependence, theEU should continue strengthening its en-ergy policy by including its close neigh-bours. This should be done throughinvestments, developing and upgrading en-ergy networks and infrastructure intercon-
nections with our neighbours and prioritis-ing projects of EU interest within the manyframeworks we have at our disposal, such asthe European Neighbourhood Policy, theEastern Partnership and the Energy Com-munity. Now we may need less round-tablesand more actions,” Valean added.
But Guy Verhofstadt, leader of the Lib-erals and Democrats (ALDE) group at theEuropean Parliament, was less optimistic.Asked whether there will be another gascrisis between Russia and Ukraine in thecoming months, Verhofstadt told New Eu-rope in Strasbourg: “It is always possible butthere are the new links in the north of Eu-rope who are now there and could help.” Hewas referring to the Nord Stream pipelinethat could see natural gas from Russia startflowing to Germany through the Baltic Seaas early as October.
European Commission President Jose Manuel Barroso, left, European Council President Herman Van Rompuy, second left, Polish Prime Minister Donald Tusk, second right, andHungarian Prime Minister Viktor Orban hold a joint press conference after the plenary session at the Eastern Partnership summit in Warsaw, Poland, 30 September 2011. Earlierlast week in Strasbourg, MEPs expressed their concerns about the fate of Ukrainian former prime minister and leading opposition politician Yulia Tymoshenko and the objectivity ofthe Ukrainian judiciary. |EPA/TOMASZ GZELL
EU WORLDPage 14 | New Europe NEW EUROPEOctober 2 - 8, 2011
EU-UKRAINE
MEP rules out another gas crisis, sees closer co-operation with Ukraine
By Kostis Geropoulos
ENERGY & CLIMATE
New Europe |Page 15NEW EUROPEOctober 2 - 8, 2011
STRASBOURG - MartinSchulz, leader of the Socialists &Democrats (S&D) group in theEuropean Parliament, told NewEurope on 27 September that apotential major discovery southof Cyprus could help boost EUenergy security. Despite Turkishobjections, the US companyNoble Energy started drillingoffshore on behalf of Cyprus inan area termed Block 12, southof the island.
Asked if it would decrease re-liance on Russia, Schulz said inan interview at the EuropeanParliament in Strasbourg thatdiversification of energy supplyis a co-element of the EU energystrategy. “It ’s not only Cyprus.We need gas imports fromnorthern Africa, oil importsfrom northern Africa, we’re in aclose co-operation with Algeria,for example, for the gas fields soI think it ’s reasonable and it isneeded to look if Cyprus has gasfields,” Schulz said. “The Euro-pean Union to be independentmust be carefully to spread theenergy supplies so you are rightand the question is right weshould not be dependent neitherfrom one side - Russia for exam-ple - nor exclusively fromNorthern Africa. Therefore, ‘yes’it is on our own interest thatTurkey is looking behind thepossibility to get gas in thisarea,” Schulz said.
Turkish Prime Minister RecepTayyip Erdogan has called thedrilling “madness,” saying thatexploration should wait untilafter a political settlement on theisland. As retaliation, Ankarasent the Koca Piri Reis, a Turk-ish research vessel, into disputedwaters south of Cyprus in search
of oil and gas. The Turkish gov-ernment described the vessel'smission as a reply to Cyprus’ ex-ploratory drilling in the region.
As Members of EuropeanParliament prepared to debate“Tensions between Turkey andthe Republic of Cyprus” later on27 September, the S&D leader,who is considered a shoo-in forthe Presidency of the EuropeanParliament in 2012, urged theTurkish government to act “in amore constructive way” regard-ing Ankara’s conflict withCyprus over energy rights in theeastern Mediterranean and ex-pressed his concern regardingtensions between Turkey and Is-rael. Schulz said that nobody is
preventing Turkey from lookingfor oil and gas in the Mediter-ranean but this must happen inthe frame of mutual trust andconfidence, not in any kind ofimplied military threat. The wayin which Turkey is actingagainst Cyprus, making a refer-ence to the split of the countryand the northern part of the is-land shows that it is not aboutenergy, he told New Europe. “Itis about policy and about thestrategy of the Turkish govern-ment concerning NorthernCyprus and this is a mistake andmy recommendation to theTurkish government is to try tosolve the problem in a moreconstructive way,” Schulz said.
An agreement between Israeland Cyprus sets out the exclusiveeconomic zone where Noble En-ergy started working on 18 Sep-tember. The deal has furtheraggravated the already tense re-lationship between Turkey andIsrael. “I think the developmentin the Middle East and in theMediterranean as a whole is veryfragile. The relations betweenTurkey and Israel for the stabil-ity in the region are of the high-est importance and I’m worriedabout the tensions betweenTurkey and Israel for today,”Schulz said. “I think we shouldtake into account that there aretwo developments. If the statesof the ‘Arabian Spring’ would de-
velop in a direction like Turkey,which is more or less a parlia-mentary democracy, I would behappy and if Erdogan con-tributes in countries like Egyptor Tunisia or Libya in such a di-rection that is helpful. On theother hand I’m worried aboutthis aggressive rhetoric againstIsrael and also the aggressive re-action of Israel against Turkey sothere is a tension and absolutelyunacceptable,” he added.
Schulz also said that the threatthat Turkey, which is a candidatestate to the EU, expressedagainst Cyprus, which a memberof the EU, concerning the gasfields in the Mediterranean isabsolutely unacceptable.
Asked if Turkey’s threat tosend warships in the area coulddisrupt Turkey’s relations withthe EU, Schulz said, “Turkey is acandidate state and Cyprus is amember state and I think theTurkish government should un-derstand to join the EuropeanUnion they need at the end theapproval of all members of theEuropean Union and this is notan encouragement neitherCyprus nor for other countriesto consider them as a construc-tive partner.” But he highlightedTurkey’s importance to the EUas a key partner. “The negotia-tions are going on. We need eachother. They need us, they needthe European market and weneed Turkey as a partner. Thiswas my opinion since I’m heremember of the European Parlia-ment,” Schulz said. “But my im-pression is that in Turkeyslightly the view on the Euro-pean Union is changing and Er-dogan is looking more to otherparts of his neighbourhood thanto Europe and this is, in my eyes,not meaningful.”
ENERGY|POLITICS
Schulz slams Turkey as Cyprus drills for gas
On 27 September, a blast hit an Egyptianpipeline that transports gas to Israel, Jordan,Syria and Lebanon, according to a statementby Ampal-American Israel Corporation. Thepipeline is run by Gasco, Egypt's gas trans-port company, a subsidiary of the national gascompany EGAS. “Neither [East Mediter-ranean Gas Co.] EMG's site nor EMG'spipeline were damaged as the affectedGASCO's pipeline is not a part of the EMGpipeline system,” Ampal said.
There have been six attempts on thepipeline since the February ouster of former
president Hosni Mubarak. The last, botched,operation was in August, prompting armyand police forces on the Sinai to step up se-curity to protect the pipeline. Both Israel andJordan depend heavily on Egyptian naturalgas, with it generating 40% and 80% of theirenergy needs respectively.
Unknown individuals attacked the pipelinein the village of al-Meedan, around 25 kilome-tres west of al-Arish city in Egypt's northernSinai Peninsula, witnesses said, DeutschePresse-Agentur (dpa) reported. Initial investi-gations showed that the blast was caused by a
remote-controlled bomb. There was also a land-mine that did not explode in the attack. Firetrucks and ambulances rushed to the scene inthe early hours of 27 September as flames anda column of smoke rose from the site, witnessesadded. No casualties were reported, and no sus-pects were detained following the attack, whichcaused damage to several nearby houses. Gasexports to Israel are unpopular among Egyp-tians, even though the country has been pump-ing the gas to Israel since 2008 under a 15-yeardeal with preferential terms. Egyptian officialshave been trying to amend the deal for the past
seven months.Six former Egyptian officials, including for-
mer petroleum minister Sameh Fahmi, werecharged in April with crimes related to thedeal, including harming the public interestand corruption.
The blast comes as relations between Egyptand Israel suffer their worst crisis sinceMubarak was unseated. A group of Egyptiansstormed the Israeli embassy in Cairo earlierthis month, angered over the August killing ofsix Egyptian soldiers in the Sinai peninsuladuring an Israeli airstrike.
ENERGY|GAS
Egypt's gas pipeline to Israel, Jordan sabotaged again
Martin Schulz, leader of the Socialists & Democrats (S&D) group in the European Parliament, delivers a speech at the European
Parliament in Strasbourg, France. He told New Europe the Turkish government should act “in a more constructive way” regarding
Ankara’s conflict with Cyprus over energy rights in the eastern Mediterranean and expressed his concern regarding tensions be-
tween Turkey and Israel. |EPA/CUGNOT MATHIEU
By Kostis Geropoulos
ENERGY & CLIMATEPage 16 | New Europe
NEW EUROPEOctober 2 - 8, 2011
Germany is holding back attempts by the Eu-ropean Union to cut car emissions of carbondioxide (CO2) as part of its efforts to limit cli-mate change, a report by environmental lobbygroup Transport & Energy (T&E) said on 29September. "Germany (is) holding Europeback," ran a headline in T&E's latest report,called "How Clean are Europe's Cars."
The EU is forcing carmakers to reduceemissions to an average 130 grams of CO2per kilometre (g/km) by 2015. Last year, emis-sions dropped to 140 g/km, leading the Eu-ropean Environment Agency to predict thatthe 2015 target will be met ahead of sched-
ule.But, while the EU as a whole achieved a
3.7% reduction over 2009-10, Germanyscored only a 1.8% improvement, T&E re-ported. In its ranking of the progress achievedby the EU's 27 members, Germany was 26th.This could be due to weak German tax in-centives to buy fuel-efficient vehicles - a prob-lem that is expected to grow worse under anew, green labelling system that undulyfavours large, gas-guzzling models such asSUVs, T&E said. T&E suggested that theend of a generous car scrapping scheme in2009, which had boosted sales of low-CO2
vehicles, may also explain Germany's disap-pointing performance.
According to T&E's calculations, Italy'sFiat group sold the cleanest fleet of new carsin the EU in 2010, with average CO2 emis-sions of 126g/km, followed by Japan's Toyotaand France's Peugeot-Citroen.
Volkswagen, the highest-ranked Germanmanufacturer in the list and the largest carproducer in Europe, was 8th.
Meanwhile, across the Atlantic, the US En-ergy Department said it was investing morethan $8 million to develop technology to im-prove the efficiency of vehicle engines. Proj-
ects in Michigan, Massachusetts and Wis-consin would use federal money to focus onmaking engines and powertrain systems moreefficient. This, the Energy Department said,would help improve fuel economy standardswhile reducing fuel costs and US demand foroil imports. "By encouraging innovations tohelp make America's vehicle fleet more fuelefficient, the Obama administration is work-ing to improve the nation's energy securityand reduce our reliance on imported oil," En-ergy Secretary Steven Chu said. US PresidentBarack Obama unveiled new fuel efficiencystandards for cars and light trucks in July.
ENVIRONMENT|CO2
Environmentalists: Germany holding back EU on cutting car CO2 emissions
On 30 September, Nabucco GasPipeline International GmbH wel-comed Bayerngas’ intent on be-coming one of the Nabuccoshareholders, the company said in apress release. “Negotiations with thesix current shareholders will beginimmediately to determine the fu-ture share split within the consor-
tium. Bayerngas’ intention to jointhe Nabucco consortium will bediscussed at a meeting between theAustrian Minister of Economy, Dr.Reinhold Mitterlehner and theBavarian State Minister for Econ-omy, Mr Martin Zeil in Viennatoday,” the press release read.
Reinhard Mitschek, Managing
Director, Nabucco Gas Pipeline In-ternational, stated: “This is a greatstep forward for Nabucco. A strongdownstream market is an importantasset for the pipeline and some-thing that a new shareholder suchas Bayerngas will be able tostrengthen. The Nabucco consor-tium is open to new shareholders as
the project enters a new advancedphase. The start of negotiationswith Bayerngas sends a strong mes-sage to the markets.”
Nabucco envisages gas suppliesfrom the Caspian region and theMiddle East to the EU countries.Participants of the project are Aus-trian OMV, Hungarian MOL,
Bulgarian Bulgargaz, RomanianTransgaz, Turkish Botas and Ger-man RWE companies. Each ofparticipants has equal share to theamount of 16.67 percent. The pro-ject's construction is planned tostart in 2013. The pipeline's maxi-mum capacity will hit 31 billioncubic meters per year.
ENERGY|GAS PIPELINE
Bayerngas plans to become new Nabucco shareholder
On 29 September, Energy Commissioner Günther Oet-tinger discussed plans for the completion of the internal en-ergy market. In 'Getting to 2014', Oettinger stressed theneed for full member-state compliance in implementingthe market: “We would have 27 markets in Europe, withwidely diverging market rules and network operation rules.Gas and electricity would not flow freely across borders.Energy companies would not be able to take full advantageof economies of scale. The level of competition would bemuch lower, and meeting our climate change objectiveswith 27 markets would be much more expensive and muchless efficient."
Problems have arisen however, with only 17 of the 27member-states adopting the third energy package in thefield of electricity and 18 in the field of gas. Oettinger saidthat the European Commission is to start formal legalproceedings against countries failing to adopt the EU's2009 third energy market opening package into nationallegislation.
The third energy package is an attempt by the EU to“separate the operation of gas and electricity providing net-works from the business of providing gas or generatingpower”.
Meanwhile, on 27 September, the European Commis-sion used EU competition law to carry out raids on 20 gascompanies in 10 mainly central and eastern EU countries,including Austria's OMV, German utilities E.ON andRWE, Poland's PGNiG, Russia's Gazprom Export andSlovakia's SPP.
"The Commission is investigating potential anti-com-petitive practices in the supply of natural gas in Central andEastern European member states," it said in a statement,noting that the inquiry is focused "on the upstream supplylevel." The Commission said it suspects the companiesdivvied up markets among themselves, blocked competitorsfrom accessing pipelines and possibly drove up prices.
"Gazprom has nothing to hide and calmly awaits the in-vestigations," said Burkhard Woelki, spokesman ofGazprom Germania.
OMV spokesman Sven Pusswald said: "I can confirmthat we are cooperating with the commission," a positionechoed by E.ON and Gazprom. OMV is active in severalCentral and Eastern European countries.
Bulgaria's dominant state-owned natural gas firms Bul-gargaz and Bulgartransgaz as well as private Overgas, 50%controlled by Russia's Gazprom, said on 28 September EUinvestigators were carrying out checks at their offices.
None of the three companies commented on the sub-stance of the allegations.
A day later, the Commission denied that the raids on gascompanies accused of price-fixing were politically moti-vated, saying they were solely a matter of competition law.
The Energy Ministry in Moscow issued a statementdemanding that no harm be done to the rights and in-terests of the Russian owners. It said they were entitledto protection under international agreements on invest-ment and on gas supplies. Gazprom itself said it was co-operating with the inquiry and was open to dialogue withthe Commission.
A spokeswoman for Joaquin Almunia, commissioner forcompetition issues in Brussels, replied that the Commis-sion would not let itself be influenced by the bad mood ofany one company. It would intervene wherever it suspectedbreaches of competition law.
Bulgaria’s Economy and Energy Minister TraichoTraikov said the EU raided the offices of 21 companies inEurope, mainly looking into long-term gas supply contractswith Gazprom and said Sofia was fully cooperating. "Youknow that the European Commission wants to look intothese contracts. But there are some problems for the na-tional companies to hand them out because of confiden-tiality clauses," Traikov was quoted as saying by the press."In this case, (EU's) Directorate General for Competitionhas decided that they can take them this way from all these21 companies in Europe," he said.
ENERGY|MARKET
Oettinger calls for internal energy market as EU raids companies
The blue lights of an ambulance car are pictured next to the company logoof Gazprom Germania headquarters in Berlin, Germany, 28 September2011. During a trans-European raid, the facilities of different gas companieswere searched. The European Commission suspects unfair competition andlaunched a raid in different European countries. Investigators focused onEON Ruhrgas and Gazprom Germania in Germany. |EPA/HANNIBAL HANSCHKE
ENERGY & CLIMATENew Europe|Page 17NEW EUROPE
October 2 - 8, 2011
On 27 September, Russian gas monopoly Gazprom an-nounced it was aggressively expanding its capital investmentplan for 2011 to around $40 billion, as it steps up gas develop-ment and transportation projects in the Arctic, eastern Siber-ian and the Pacific Ocean regions.
Gazprom, the world's biggest producer of natural gas, hadplanned some $25.2 billion of capital investments in 2011, butcontinued high demand for gas produced by the firm hadbrought substantial extra income, the company said in a state-ment said.
Russian President Dmitry Medvedev and Prime MinisterVladimir Putin have called the expanding access to the coun-try's vast energy resources a top national priority, and have saidstate-owned Gazprom must take a lead role in pushing the de-velopment. Gazprom is betting heavily on the Bovanenkovofield on the Yamal peninsula in Russia's Arctic and the Kirin-skoye field off Russia's Pacific coast, according to reports. Bothfields’ developments require construction of new pipelines.Gazprom also said it would spend more on its Medvezhye andUrengoy gas fields development.
ENERGY|BUSINESS
Gazprom to increase capital investment
The Trans Adriatic Pipeline (TAP) andthe Slovenian transmission system op-erator Geoplin plinovodi have signed aMemorandum of Understanding andCooperation to support the develop-ment of natural gas markets in South-east Europe and to enhance security ofsupply in this region, TAP said in a pressrelease. Earlier this year TAP concludedsimilar memorandums with Croatian
TSO Plinacro, Bosnia TSO BH-Gas,and the governments of Montenegroand Albania, all of which support theIonian Adriatic Pipeline (IAP) project.Given the proximity of the IAP route toSlovenia, the memoradum betweenTAP and Geoplin plinovodi providesthe Slovenian TSO the potential to ac-cess new natural gas supplies from theCaspian region via a new transport route.
Furthermore, this initiative supports thedevelopment of the gas market in Slove-nia and the wider Southeast Europe bybringing gas supplies to meet theirgrowing demand, the press release read.“We believe that the Slovenian trans-mission system could play an integralrole in the future development of this gasmarket,” Geoplin plinovodi CEO Mar-jan Eberlinc said.
ENERGY|GAS PIPELINE
TAP, Slovenian company ink memorandum
Can the sun save Greece?
STRASBOURG - Helios, the Greek word for sun. Thepersonification of the sun in Greek mythology was a hand-some god crowned with the shining aureole of the sun,driving his chariot across the sky each day to earth-circlingOceanus, and, through the world-ocean returned, to theEast at night. It is the power of the sun which may nowhelp pull the debt-ridden Mediterranean country out of itsworst financial crisis. The Greek government has an-nounced that it is discussing with German companies pro-posals for the installation of 3-10GW of solar plants inGreece with an estimated investment cost of €10-30 bil-lion, not including investments in transmission lines, GreekGreens MEP Michalis Tremopoulos told New Europe inStrasbourg, France, on 28 September. “Especially in thesetimes of economic hardship, foreign investment in greensectors in Greece is welcome,” he said.A day earlier in Berlin, Greek Prime Minister George Pa-pandreou, following his meeting with German ChancellorAngela Merkel, issued an invitation to German industrial-ists and entrepreneurs to invest in renewables in Greece,addressing the Federation of German Industry (BDI.) “InGermany you have shown the way in developing renew-able energy. With our natural assets, Greece has every rea-son to follow your lead. One of our most ambitious newprojects is called Helios,” Papandreou said, adding thatGreece plans to develop and export solar energy to coun-tries such as Germany. “And investment in Greek sun yields50% more than in Germany, for obvious reasons: sunshine.This is a win-win project for us both. Both green energyand waste management are at a nascent stage in Greece. Sohere there is a dynamic emerging market ripe for invest-ment. So these are only some of the many bright prospectsGreece holds out in the near future,” Papandreou added.Sounds too optimistic?Tremopoulos noted that the whole discussion still lies inthe sphere of ideas, revealing a worrying lightness in theapproach of such important issues. “It is noteworthy thatthe Greek government has discussed its plans only withthe German investors and not with any stakeholder backhome, despite the fact that it is about a huge project thatcould transform Greece and its economy,” he said. TheMEP said the whole project is about investments in re-newables, not about Germany importing solar energystraight from Greece. “The transmission costs would beenormous for that and many countries in between wouldlike to have a share of that electricity. We should also notethat even the power produced from 10GW of PV inGreece would only cover just 2% of Germany's electricityconsumption,” he said. Still, Greece is closer than Africawhere the EU is planning its Desertec project, which aimsto cover much of North Africa with solar panels to sup-ply electricity to Europe.Tremopoulos cautioned that Greece is still off track to meetits 20% RES target for 2020 which translates to a 40% RESshare in electricity, saying: “We need commitments that anyelectricity produced under the Helios project will be addi-tional to what is required under our RES target and thatthe Greek power system will no longer import electricityfrom third countries, on the contrary.”
[email protected] on twitter @energyinsider
ENERGY INSIDER
On 26 September, Russian gas monop-oly Gazprom Chairman Alexei Millersaid that a deal it to take a major stakein a strategic Belarusian pipeline usedto deliver natural gas to Europe is"practically ready." "These talks havebeen extremely successful," Belapanquoted Miller as saying. "Belarus is anextremely important partner forGazprom." Miller's comments in theBelarusian capital Minsk came aftermeetings between Gazprom executivesand Belarus's authoritarian leader, Pres-
ident Aleksander Lukashenko. "I amextremely pleased with the results,"Lukashenko said. "I hope we can con-tinue in this spirit."
Russian and Belarusian negotiatorshave agreed on contract terms by whichGazprom would purchase a 50% stakein the Belarusian natural gas trans-portation company Beltranzgaz, the re-port said. Gazrprom also will buy intoother Belarusian companies supportingBelatranzgaz, which would allow majorRussian investment into Belarus' gas
transportation infrastructure,Lukashenko said. A final signing of theBeltranzgaz share sale agreement, alongwith a new contract for Russia naturalgas deliveries to Belarus for 2012,should take place by the end of De-cember, Miller said. Russia current shipsapproximately one-fifth of its naturalgas exports to Europe via pipelinescrossing Belarus. The bulk ofGazprom's natural gas exports to Eu-rope arrive to market via Ukrainianpipelines.
ENERGY|GAS PIPELINE
Gazprom to take major stake in Belarusian pipeline soon
The compressor plant of the gas pipe line Yamal-Europe, Nesvisg, Minsk region, 100 kilometres west from Minsk. |EPA/MAXIM MALINOVSKY
By Kostis Geropoulos
ARTS & CULTUREPage 18 | New Europe
NEW EUROPEOctober 2 - 8, 2011
France - Paris- SLICK- 20 to 23 October2011For the second consecutive year, the 2011SLICK ART FAIR will be pitching a2,000m2 marquis tent on the esplanade be-tween the prestigious Palais de Tokyo andParis’ Museum of Modern Art. More than40 international galleries and thousands ofphotographs, drawings, paintings, sculptures,videos and installations will be unveiled dur-ing the fair – through solo shows and col-lective exhibitions.Since 2006, SLICK has become synony-mous with emerging artistic talent and
renown as a space for introducing the up-and-coming art scene to both a French andinternational public. In recent years, certainwellestablished galleries that present at theFIAC have joined the SLICK ART FAIRto showcase their emerging artists and con-tribute to the forefront of today’s contem-porary art scene.This October, special projects (installationsand monumental works) by select gallerieswill also punctuate exhibition space, offer-ing pockets of artistic inspiration. In orderto highlight the increasingly important roleplayed by the private sector in contemporaryart developments, the fair will also welcomeprestigious, private-sector collections in anexhibition that will bring together approxi-mately thirty works.Three of the four young galleries presentingat SLICK have decided to organize collec-tive shows in order to demonstrate theirartistic direction to the general public.Opened in May 2011, White Project (Paris)will present a group show that brings to-gether four artists: Clément Cogitore, RafaelCarneiro, Paulo ClimacHausta and FabianoGonper. Didier Gourvennec Ogor gallery,which has just opened a space in Marseille,will undertake the same approach,representing artists such as Dieter Detzner,Timothée Talard, Rob de Oude, Régis Per-ray and Giancarlo Caporicci. Inception(Paris), managed by Mannan IbrahimChaudry – the former curator for “SlickOrient” in 2010 – will open this Septemberwith a Sarah Mapple solo show and an AiWeiwei show in December.
SLICK 2011
Monet to Picasso -The Batliner Collection
Austria - Vienna - Albertina - until 16October 2011New presentation of the permanent col-lection since March 23, 2011 The Al-bertina’s permanent collection hasreturned to Vienna after having been seenby about 500,000 visitors at the NationalGallery in Prague and the National Mu-seum in Seoul during its successful inter-
national tour. 210 works from the collection are on ex-hibit in a new presentation in the Al-bertina’s Kahn Galleries, which openedon March 23, 2011. The exhibition FromMonet to Picasso. The Batliner Collec-tion unfolds the most fascinating chap-ters from one hundred years of art history.Paintings by Claude Monet, Pierre-Au-
guste Renoir, Paul Cézanne, AmedeoModigliani, Henri Matisse, Joan Miró,Pablo Picasso, Ernst Ludwig Kirchner,Paul Klee, Wassily Kandinsky, MarcChagall, and Kazimir Malevich providea survey spanning from the art of FrenchImpressionism and PostImpressionismand the Fauves to German Expression-ism, the Bauhaus, the Russian avant-garde, and Minimalism. The new presentation is realized in twosteps: the first, chronologically arrangedpart covers the period from Impression-ism to postwar art around 1960. The sec-ond part dedicated to contemporarypainting will be presented in the BastionHall from June 2011. The Batliner Collection, which is one ofthe most important private collections ofModernism, has enriched the Albertinaand Vienna, the city of museums, sincethe autumn of 2007. By transferring theirprecious collection to the Albertina, theart collectors and patrons Herbert andRita Batliner have laid the foundation forthe establishment of a permanent collec-tion spanning from the late nineteenthcentury to contemporary painting, whichhas been a vital cornerstone in the Al-bertina’s repositioning.
Tomma Abts, Tys, 2010 Privatsammlung Köln
Italy - Firenze - Palazzo Strozzi - CCCS- until 22 January 2012The exhibition Declining Democracyproposes a critical reflection on the con-cept of democracy. Through works by in-ternational contemporary artists, theexhibition explores the contradictionsand paradoxes of democracy, and itschanging nature in our troubled world.They provide a reflection on the valuesand the inconsistencies that typifytoday’s society. They investigate suchthemes as the clash between the individ-ual and the community, the growing gap
between the man in the street and thepolitical classes, the power and influenceof economic lobbies and of the massmedia, and the problem of immigrationand the sharing or refusal of civic and po-litical rights. At the same time, they ex-plore the possible forms of democraticparticipation enabled by innovations incommunication technologies, which havegiven people new tools with which toshare opinions. This has led to a new in-terpretation of the notion of political andsocial participation and of the principleof the right to an opinion.
Germany - Dusseldorf - Kunsthalle Düsseldorf- until 9 October 2011Born in 1967, German artist Tomma Abts ranks amongthe outstanding female painters of her generation. Shewas awarded the Turner Prize in 2006, and her work hasfeatured in solo exhibitions at such renowned institutionsas Kunsthalle Basel, the Hammer Museum in Los An-geles and the New Museum of Contemporary Art inNew York. The show at the Kunsthalle Düsseldorf will bethe London based artist's first solo exhibition at an insti-tution in the Rhineland, where she has been teachingsince summer 2010, having taken up a professorship atthe Kunstakademie Düsseldorf.
TOMMA ABTS
Declining Democracy
Paul Cezanne Gehöft in der Normandie, um 1885-86Öl auf Leinwand © Albertina, Wien - Sammlung Batliner
Thomas Kilpper Installation view at CCC Strozzina, Palazzo Strozzi, FirenzePhoto: Martino Margheri
FASHION & STYLENew Europe | Page 19
NEW EUROPEOctober 2 - 8, 2011
It would seem that a desire for adventurein far away places inspired Milan’s de-signers this season, as their collections
were filled with ‘Orientalist’ clichés and
stereotypes. Moorish ornaments, Chinois-eries, Japanese prints, African motifs andNew Spain memories expressed their searchfor ‘otherness’.
The Latin American and Caribbean her-itage was a favorite theme.
To begin with, Norwegian-born designerPeter Dundas for Emilio Pucci presented amore romantic than sexy version of the pi-rate princess: silk printed dresses in almostpastel hues, black and red lace detailing,fluffy ankle-length skirts with baroquetouches, the iconic black crucifix necklaceand typical Pucci scarves would all make abeautiful Hispanic genre painting.
Following a similar path, Angela Missonishowed Mexican-inspired designs: flashybright colors, poncho skirts, flounced neck-lines, asymmetrical tailoring and ethnic-striped prints, an overall daring andbrilliantly thought-out collection.
At Moschino, Rossella Giardini carriedon with her torero theme, while addingFrida Kahlo’s hairstyle and taste for vibrantyellow to the recipe. Giardini’s well-knownMatador jackets were embellished with goldembroidery, as Mediterranean black wasomnipresent.
Also Hispanic but even more Caribbeaninspired, was Anna Molinari’s Blumarineshow. Colorful as usual, Molinari’s collec-tion took a neon twist, with tropical floralprints, violet and pink raffia trims and flar-ing skirts with statement earrings and shoes.Palm trees in Hawaii and scuba diving inHawaii…
In contrast, Antonio Marras’s remainedfaithful to his favorite Asian designs and flo-ral motifs while adding a spicy maid touch tothe second half of his show. Pastel wallpaperprints, minute fan decorations, giant camel-lias, and lantern red adorned Marras’s pecu-liarly retro Chinese collection.
Asian influences were also noticeable inTommaso Aquilano and Roberto Rimondi,a.k.a Aquilano.Rimondi’s collection, partic-ularly in their use of embroidered flowers,pastel combinations, geometric bands, theirlean, vase-like silhouettes and minute prints
on saturated, monochrome backgrounds, thatreminded us of Chinese folding screens.
African culture and its avatars, the Jazz Ageand Art Deco design inspired Veronica Etro’ssummer 2012 collection. Her prints havebenefitted from an innovative method thatinvolves printing and pleating a fabric severaltimes over to create new burnt ink effects.Geometry and ‘broken collage technique’have contributed in rendering a vibrant, mod-ern, and young Etro silhouette.
Louise [email protected]
EMILIO PUCCIphoto: Venturelli
© Getty Images
AQUILANO.RIMONDI© Aquilano.Rimondi
ANTONIO MARRAS© Antonio Marras
ETROphoto: Karl Prouse/Catwalking
© Getty Images
MISSONI© Missoni
MOSCHINOphoto: Daniel Dal Zennaro
© EPA/ANSA
BLUMARINE© Blumarine
Un Viaggio EsoticoMILAN FASHION WEEK: SPRING/SUMMER 2012
BRUSSELS AGENDA Page 20 | New Europe | NEW EUROPEOctober 2 - 8, 2011
BRUSSELS AGENDA New Europe | Page 21
NEW EUROPE October 2 - 8, 2011Welcome to NE’s Brussels Agenda. All youneed to know for a complete professionaland personal life in Brussels.
Would you like to advertise in New Europe’s BrusselsAgenda? Ask for more info [email protected] ordon’t hesitate to call us at +32(0)2 5390039
An initiative of the Foundation for the Arts, Brussels
LAST MINUTE TICKETS FOR SHOWS & CONCERTS AT -50%
Avec le soutien de LA COMMISSION COMMUNAUTAIRE FRANÇAISE
Tickets for half price for performances and concerts on the same day. Arsène 50 offers you every day a wide range of performances, advises you in your choices and takes care of your reservation.
www.arsene50.be
Ticket sale: - At BIP, 2-4 rue Royale (Place Royale) 1000 BruxellesTuesday to Saturday, from 12.30 pm to 5.30 pm- Online on www.arsene50.beTuesday to Saturday, from 2 pm to 5.30 pm
Salle à l’étage ● Banquets - réunions - Terrase en été
Cosmo Cuisine
Av. de Tervueren,1051040 Etterbeek - Bruxelles
Tel: 02/ 732 43 31Fax: 02/ 733 61 17
Samba! Samba! Samba! Brussels Agenda 5-14 October
TAKE A LOOK
On Avenue Louise and five otherlocations around Brussels, these ZenCars can be found. They are 100%electric cars, contributing no pollu-tion to the environment and are apart of an effort for Green Mobility.These Zen Cars can be rented topeople who drive responsibly and areover 21 years of age. The manufactur-er of the car is Tazzari Zero, an Italianbased company who wanted to pro-vide the world the first electric urbansports vehicle.
How To Eliminate Hazardous ChemicalsFrom Consumer Articles?5 Oct – 8:45-17:00Rue Belliard 99-101The conference aims to present differentexperiences and approaches on main con-sumers’ concerns on the use of hazardouschemicals in articles and propose ways for-ward. ANEC, ASI CC and BEUC have longbeen involved in promoting consumers’ rightsand interests with regards to risks arising fromhazardous chemicals in products.
Considering To Invest In China Or In HongKong: How To Do This In A (Tax) EfficientWay?10 Oct – 13:30-16:30Radisson Blue EU Hotel BrusselsThe meeting will discuss in detail on all crossborder tax aspects of direct business in Chinaas well as business in China through HongKong. In addition, the aspects of setting up abusiness in China and Hong Kong.
Renovate Europe Day: Can we afford not toRenovate Europe? An initiative of EuroAce Hosted by Fiona Hall MEP11 Oct – 12:00-15:30
Stanhope Hotel, 9 rue du CommerceRenovate Europe day takes place in the con-text of the environmental, social and econom-ic challenges that Europe faces. RenovateEurope will be asking policymakers and repre-sentatives of industry, workers and the envi-ronmental movement whether Europe canafford not to renovate its buildings by 2050.
Building The Future Of E-Financial Services11 Oct – 20:00-22:00Rue Wiertz 60As the trend toward digital currency continuesto gain momentum, consumers increasinglyexpect to make their purchases through a vari-ety of solutions and technologies. This dinnerdebate aims at highlighting the current trendsin these sectors, as well as the regulato-ryframework in which they operate and theopportunities and challenges that they entail.
World Standards Day 2011 Conference:Competitiveness Through Standardisation14 Oct – 8:00-16:15Charlemagne Conference Centre Rue de laLoi 170This year, the event will be devoted to theexamination of the support that standardisa-
5 Oct-Avant and Premiere La Source defemmes (presence of the director)20:00, Centre for Fine Arts
The story takes place in current times, ina small villages somewhere betweenNorth Africa and the Middle East. Thewomen fetch water from a mountaintopspring in the blazing sun. They've donethat since the beginning of time. Leila, ayoung bride, urges the women to launcha love strike: no more hugs, no more sexuntil the men run water into the village.
6 Oct-Diptych Series – Jerome Latteur10:00-21:00, Centre for Fine Arts
In 2007 the Belgian photographerJerome Latteur found inspiration for aseries of diptychs in the Centre for FineArts. Dreamlike interiors the black andwhite can be seen alongside mono-chrome pictures that zoom in on mater-ial textures. Latteur's work offers anunexpected angle on the ingeniousnessof Horta's architecture and handling ofdetail.
9 Oct-Xzibit20:00, Ancienne Belgique
Alvin Nathaniel Joiner (born September18, 1974 in Detroit, Michigan), betterknown by his stage name Xzibit, is anAmerican rapper, actor, and host ofMTV's Pimp My Ride. He began hismusic career as a member of the LikwitCrew, a loose collective of West Coastrappers including King Tee, Defari, andTha Alkaholiks. He released his solodebut album 'At The Speed Of Life' in1996 and has since released 5 morealbums, his latest being Full Circle,released in 2006.
11 Oct-SBTRKT20:00, Ancienne Belgique
Young electronica god who, togetherwith Mount Kimbie, James Blake andMagnetic Man, is pushing the post-dub-step genre into the charts. SBTRKT(consonants for Subtrakt) is the alias ofBritish producer Aaron Jerome who -prior to signing to Young Turks – has
already released tracks and providedremix-work on various labels for the likesof Radiohead, Goldie and Modeselektor.Now he's here with a brand new debutfull of detailed beats & bleeps that havebeen enriched by fine vocal contributionsfrom the likes of Sampha and LittleDragon’s Yukimi Nagano (listen to thesingle ‘Wildfire’).
PLAYsuggest your event for our agenda: [email protected]
RESTO BITES
Il Viticolo Restaurant Rue Archimède 18-20
There are Italian restaurants and then there's Il ViticoloRestaurant. If there's better Italian food to be had inBrussels, I'd like to know where. Having worked as achef for 13 years, Giuseppe Schichilone and his wifeAurore took over the restaurant in the middle of theEU Quarter earlier this year and have already acquireda reputation for producing top-notch Mediterraneancuisine.Such is his desire to get things right, the Sicilian-bornowner even imports his mozzarella from Italy becausehe says that available in Belgian does not compare.Since taking over the 32-seat restaurant, they havechanged the décor and menu,which is a terrific mix ofFrench and Italian food including seafish and fois grasin pasta. There is also a particularly impressive collec-tion of Italian wines. Open only on weekdays. Highlyrecommended.
Tarsila do Amaral, Operários. Courtesy of Acervo Artístico-Cultural dos Palácios do Governo doEstado de São Paulo - Europalia International
Centre for Fine Arts Rue Ravenstein
Stemming from the 19th centurymodern Brazilian art has reflected theneed for a specifically Brazilian identi-ty. Breaking from its colonial past, theBrazilian art movement reflects how apeople with a distinct identityemerged. This flagship exhibitionoffers a portrayal of an interesting andlittle known artistic period, illustratedby paintings and sculptures by thegrand masters, and key works of
Brazilian archaeology and anthropolo-gy. First, the exhibition offers an offi-cial and academic portrayal, inspiredby the monarchy and Europe, repre-senting Brazil's colonial past. Then theportrayal by travelling artists, enrichedwith observations of ethnic, social andgeographical diversity. Finally, theexhibit offers the portrayal by themodernists who, in the 20th century,returned to the origins of Braziliandiversity to reveal the very soul of theircountry in their art.
Brazil.Brasil
tion will continue giving to the competitiveness of theEuropean economy in order to ensure innovation andgrowth for Europe in the world. The Conference willfeature three panel debates: "How standardisation sup-ports Intelligent Transport System (ITS)", "Standards asa tool for Security Industrial Policy" and"Standardisation for interoperability and competitive-ness in Space"
The Social Dimension In European Higher Education- Is European Higher Education Socially Balanced?14 Oct – 8:30-16:40Rue d'Egmont 11Key experts will present latest research findings. Amongthem are a soon-to-be released EURYDICE study onthe issue, the brand new EUROSTUDENT 2011report and the external evaluation of the social dimen-sion in the Bologna Process. The seminar will also show-case the work of the 'Official Bologna Working Group'on the Social Dimension. The European Commissionwill present its latest policy position paper on highereducation and the OECD will provide intelligence on ifand how our universities and colleges are catering to stu-dents from migrant communities.
WORKsuggest your event for our agenda: [email protected]
15 OctoberCentre for Fine Arts Rue Ravenstein
During this special samba night some ofthe big names of the genre will be per-forming. Go see Velha Guarda da Portela(an ensemble that worked with GilbertoGil and Marisa Monte, among others),
Teresa Cristina (nominated for a LatinGrammy), Mart'nália, and Gafieira 8. Inaddition to these acts, the night will alsoincludes dance, activities, and films focus-ing on this unique Brazilian form ofmusic. The samba is a sociological phe-nomenon and a distinctive way of lifedeveloped in Brazil.
OrchestrePhilharmoniqueRoyal de Liege8 October 20:00Centre for Fine Arts RueRavensteinComposed in 1888, Sheherazade,Rimsky-Korsakov's most popularwork, is inspired by the tales of the1001 Nights. The work focuses onSheherazade, who tells the sultana story every night in order to havehis lover's life, who is destined to die. The sultan is eager to hear what happens next, sohe keeps postponing his mistress's execution to the following day. Hear the story unfoldas the orchestra's music and brilliance bring to light a classic lover's tale.
Domingo Hindoyan courtesy of Y Petit
IN THE BLOGSPage 22 | New Europe | NEW EUROPEOctober 2 - 8, 2011
A round-up of interesting blog posts ofthe past week, because bloggers deservetheir voice.
Read a blog post that you want to suggestfor our new ‘In The Blogs’ section? Send us an email: [email protected]
This morning, EU Commission President Barroso delivered his“State of the Union”. We at Bloggingportal.eu have called for aBarroso Buzzword/Bullshit Bingo to be played, and I have proposedmy own list of 10 words/phrases to be said during the speech.Here is how I succeeded:
• Europe 2020 – check 1x• Crisis – check 2x English, 10x French• EU tax – not exactly, but: “savings tax within the European
Union”• EFSF – check 4x• Solidarity – check 5x• Leadership – check 3x• Credible currency – not exactly, but: “a really credible euro area”• Fiscal consolidation – check 1x• Commitment – check 2x English, 1x French (“engagement”)• Necessary actions – not exactly, but “the instruments necessary”
That gives me 7 out of 10 possible points, with some bonus for closehits… PS.: The speech was better than the one last year, better written andwith a better delivery. Let’s see whether words will be followed byactions.
Barroso’s State of the Union 2011: My SOTEU bingo results
All aboard the euro crisis merry-go-round An idea for next year’s#SOTEU – deliver itto the EP and theEuropean Council
Barroso has just finished delivering his State of theEuropean Union address to the European Parliament.While – as before – we had a bit of a chuckle in the blo-gosphere with buzzword bingo, this was a serious occa-sion and Barroso rose to it, delivering a speech full ofdetermination that contained a commitment to a finan-cial transaction tax and a strong ideological appeal for acommunitarian solution to the sovereign debt crisis fac-ing the EU.
While the speech was fine (and indeed I was moreimpressed than I thought I would be), the real issue willbe how any of this will change the way the EU movesforward. Importantly what reaction – if any – will therebe from Heads of States and Governments from theMember States of the EU? Sadly rather little I fear.
The lesson from this year must be this: that next yearBarroso’s speech must be delivered to a special joint ses-sion of the European Council and the EuropeanParliament. Confronting and challenging MemberStates, in public, would be a vital step in the EU’s politi-cal and democratic development.
It is presumptuous of the UnitedStates' Treasury Secretary and Britain'sChancellor of the Exchequer to be lec-turing eurozone leaders. But – a weekafter the International Monetary Fundsaid there was a serious chance of areturn to recession – TimothyGeithner's warning that there was "notvery much time" to get a grip on thedebt crisis and George Osborne's insis-tence that there were six weeks to savethe euro only reflected their fears ofhow much worse things could get.
As President Barack Obama put it,what is going on in Europe is "scaringthe world". And yet – despite, or per-haps because of, the scale of the crisis –European Union leaders and govern-ments, drawn almost exclusively fromthe same centre-right political back-ground, have consistently failed tobuild a consensus for decisive action.Measures agreed back in July toexpand the size and scope of the euro-zone bail-out fund, the €440bnEuropean Financial Stability Facility,are only this week crawling throughreluctant national parliaments inGermany, Finland and elsewhere. At
the weekend a new plan emerged thatwould see the EFSF leveraged to €2tnbut it was no surprise when theGerman and Spanish finance ministerslater insisted that the fund would, infact, not be expanded any further.
At the centre of the mayhem is Greece,which is collapsing under the weight ofenforced austerity even as PrimeMinister George Papandreou insistedthat it was "not a poor country". In theface of ongoing strikes and protests a newproperty tax has won the support of par-liament as the government seeks to per-suade the troika that it has done enoughto secure the next €8bn tranche offinancing it needs to avoid bankruptcy inOctober. But the arguments go back andforth. The €8bn is part of Greece's firstbail-out; now euro area countries areembroiled in disputes about its second.The Financial Times reports that asmany as seven countries want privatecreditors to take a bigger hit on Greekdebt than the 21 per cent agreed at thatnow infamous July summit.
The cacophony of voices all advocatingdifferent solutions and pulling in differ-
ent directions is deafening. Many ana-lysts say Greece must default and leavethe euro. In his state of the union addresstoday, European Commission PresidentJosé Manuel Barroso was adamant thatno country would be thrown out of thesingle currency. Federalists such as GuyVerhofstadt have called for the creationof common eurobonds, a Europeanfinance minister and deeper economicintegration. Yet, outside the eurozone,members of British Prime MinisterDavid Cameron's Conservative partysee the crisis as a "once in a generation"opportunity for "serious reform" to pullthe United Kingdom away fromEurope. And plenty of others appearcontent to muddle through between onelast chance and the next.
It is a never-ending merry-go-round,with markets buffeted one way or theother as hopes of progress increase, dis-sipate then rise again. In the New YorkTimes the economist Paul Krugmanwrote that he was "both terrified andbored" by the endless negotiations overhow to respond to the crisis. He isprobably right that many others inEurope and beyond share that senti-ment. Unfortunately, it doesn't looklike going away any time soon – noteven after the Osborne ultimatum.
By: Ronny PatzFrom: http://tinyurl.com/neweurope517
Barroso’s State of the EU speech was followed by EU bloggers, who organized a game ofbuzzword bingo. Here’s one contestant’s verdict:
By: Jon WorthFrom: http://tinyurl.com/neurope514
Bingo master's breakout.|EPA
By: Daniel MasonFrom: http://tinyurl.com/neweurope516
FRANCE · GERMANYNew Europe | Page 23THE EUROPEAN UNION
October 2 - 8, 2011
The EU's executive Commission last Monday approvedVolkswagen's acquisition of truck maker MAN, whichGermany's biggest automaker eventually plans to mergewith Scania, The Local reported on 27 September. "TheCommission concluded that the proposed transactionwould not significantly impede effective competition... be-cause the merged entity would continue to face strongcompetition from other well established manufacturers," itsaid in a statement.
Volkswagen announced plans in May towards a merger ofGerman MAN and Scania of Sweden, in which it alreadyowned considerable stakes, to create Europe's top truck makerand number two bus manufacturer. It noted anti-trust re-strictions have posed hurdles for a tie-up of heavy vehicle ac-
tivities from all three brands, however. "To enable a more in-depth cooperation among MAN, Scania and Volkswagen,merger control clearance and further increase of Volkswagensholding in MAN are required," Volkswagen said in a state-ment at the time.
Volkswagen raised its stake in MAN to above 30%, oblig-ing it to make a mandatory share offer and seek anti-trust ap-proval. VW owns 45.66% of the shares in Scania, along with70.94% of the voting rights. MAN owns another 13.35% ofScania's stock. Volkswagen said in August when requestingthe European Commission's approval for the takeover thatcloser cooperation between Volkswagen, MAN and Scaniawould allow it realise significant synergies and savings in pur-chases, development and production.
VW gets green light to acquire MAN
GERMANYAUTO INDUSTRY
On 29 September, French PresidentNicolas Sarkozy gave strong backing tothe political reforms of Morocco's KingMohammed VI, pledging political andeconomic support to the North Africancountry. France "welcomed" the king's"vision," Sarkozy said in the northernMoroccan city of Tangier after launchingthe construction of a high-speed railwayline together with the monarch,Deutsche Presse-Agentur (dpa) re-ported. He also mentioned the "excep-tional success" of the referendum on aconstitutional reform which was held inMorocco in July. The reform, which wasapproved with an overwhelming major-ity, increases the powers of the primeminister. It was the king's response tomonths of demonstrations demandingmore democracy in an echo of the "Arabspring" protests in other countries.
Moroccan protesters have criticisedthe constitutional reform as insufficient.Sarkozy said that Morocco "continuedto move towards democracy." Togetherwith the king, he launched the construc-tion of a French-built high-speed TGVrail line which Sarkozy described as thefirst in the Arab world.
The 20-billion-dirham ($2.5-billion)line will cover the 400-kilometre distancebetween Tangier and Casablanca start-
ing in December 2015. It is expected todraw up to 8 million passengers annu-ally. Travelling at more than 350 kilome-tres per hour, the TGV will halve thetravel time between two of Morocco'smost important cities to 2 hours 20 min-utes. Moroccan sources gave the budgetas 20 billion dirhams. It will be paid outby Morocco, France, and funds in SaudiArabia, Kuwait and Abu Dhabi, as wellas the Arab Fund for Economic and So-
cial Development. The trains will be as-sembled in Morocco, in the first such op-eration by the French company Alsthomoutside its home country. The MoroccanTGV was seen as a rare internationalsuccess for Alsthom, which has so faronly sold TGV technology to Spain,Italy and South Korea. The first agree-ments between the French and Moroc-can rail companies - SNCF and ONCF- were signed in 2007.
Sarkozy backs Moroccan democracy reforms
FRANCEDIPLOMACY FRANCE|DIPLOMAVY
Sarkozy congratulates Merkel for parliament approvalOn 29 September, French President Nicolas Sarkozy con-gratulated German Chancellor Angela Merkel for securingthe German parliament's approval of an extension to the eu-rozone bailout fund. In a statement, Sarkozy's office said theFrench president had telephoned Merkel to congratulate herover the "very large majority" that approved changes to thefund, calling it "an important step" towards stabilising theeurozone. The president and the chancellor urged other eu-rozone members that had not yet legislated to inject moreflexibility into the European Financial Stability Facility todo so "in the shortest possible timeframe." The two leadersalso expressed satisfaction at the adoption by the EuropeanParliament of the so-called "six pack" of reforms on eco-nomic governance, the statement added.
GERMANY|AUTO INDUSTRYContinental, Draxlmaier to invest in Romania The German car-parts makers Continental and Draxl-maier want to invest up to €169 million in Romaniathrough 2013, Romania’s Economy Minister Ion Aritonsaid, Business Review reported on 26 September. Aritonmet previous week with representatives of two Germancompanies that want to extend their investments in Ro-mania. The meeting took place during the Romanian-German Conference for SMEs. Continental is planning a€15.7mn expansion of the Contitech Fluid Automotiveplant. Another € 71mn will be put for expansion works inthe western Romanian city of Timisoara. A new unit willbe opened in Sibiu city, with a price-tag of €35mn, and anew fuel-pump plant worth €20mn will be opened inBrasov city. Draxlmaier is looking to invest € 26.8mn inRomania, according to Ion Ariton who met with the man-agement of the German company.
GERMANY|AUTO INDUSTRYChina approves Daimler's Chinese Truck JVGerman auto maker Daimler AG received final approvalfrom China's Ministry of Commerce for a truck-makingjoint venture between Daimler Trucks and Beiqi FotonMotor, the company said on 26 September. In a statement,Daimler said its 50% stake in Beijing Foton Daimler Auto-motive would give it a 50% stake in Foton's medium- andheavy-duty truck business. The joint venture would useFoton's Auman brand "as a platform to grow business inChina and look at cooperation opportunities outside ofChina," the statement said. The joint venture will have a pro-duction capacity of 160,000 trucks per year, the statementsaid. The Chinese partner in the JV, Foton Motors, which isa unit of Beijing Automotive Industry (BAIC), sold 105,000vehicles last year.
French President Nicolas Sarkozy, left, and Morocco's king Mohamed VI during a ceremony tolaunch the construction in Tangier-Casablanca high-speed rail, in Tangier, Morocco, on 29 September2011. |EPA/AZZOUZ BOUKALLOUCH/MAP HANDOUT
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UNITED KINGDOM · IRELANDNew Europe | Page 24 THE EUROPEAN UNIONOctober 2 - 8, 2011
Britain's leading defence manufacturer, BAE Systems, said itwill cut around 3,000 jobs as a result of "huge pressures" on thedefence budgets of customer’s nations.
The cuts, from a total of 40,000 BAE employees in Britain,will fall mainly in the company's military aircraft division, fol-lowing a slowdown in production rates for the Euro-fighteraircraft and the F-35 fighter aircraft from the United States.
"Our customers are facing huge pressures on their defencebudgets and affordability has become an increasing priority.Our business needs to rise to this challenge to maintain itscompetitiveness and ensure its long-term future," said BAEchief executive Ian King.
The biggest job cuts will be at sites in the northern countiesof Lancashire and Yorskhire, where the Euro-fighter - named
the Typhoon in Britain - is built. A BAE statement said that the four European partner na-
tions in the Euro-fighter programme had agreed to slow pro-duction rates to help ease their budget pressures.
In addition, "pressure on the US defence budget and top levelprogramme changes mean the anticipated increase in F-35production rates will be slower than originally planned, againimpacting on our expected workload," said BAE. The proposedjob cuts were aimed at putting the "business into the rightshape to address the challenges," it added. The announcementcame at a time when the Conservative-led British governmentis under pressure to prove that a programme of severe publicspending cuts is accompanied by signs of economic growththrough increased manufacturing and exports.
BAE Systems to cut 3,000 jobsUNITED KINGDOMDEFENCE
The Irish Dairy Board opened an office in Oran in Algeriathis month.
The board said the move is the first in a series of internationalexpansions for the Irish dairy sector and that the office will helpIrish products to reach the North African market of almost200 million consumers.
Last year Algeria was Ireland's second biggest market forcheese.
The board has also announced it is opening a Kerrygoldpackaging plant in Algeria with the capacity to pack 4,000tonnes of Kerrygold products a year.
Kevin Lane, the Irish Dairy Board chief executive said theboard has been exporting to Algeria for almost 15 years. ''It hasproven a stable and robust market that has grown consistentlyto become our second largest market for cheese worldwide,''he added.
Irish Dairy Board continues Algeria expansionIRELANDBUSINESS
Pizza delivery firm Domino's Pizza UK& Ireland said it was on track to meetfull year expectations after sales growthaccelerated, benefiting from the launchof new stuffed crust and 'Gourmet'ranges. The company, which runs theBritish and Irish franchises of the globaldelivery brand, said its stuffed crustrange had proved popular after beinglaunched in response to customer de-mand. It added the 'Gourmet' range,which it hopes will appeal to a new sec-tor of potential customers, had also beenwell received with its launch coinciding
with Domino's sponsorship of high pro-file television show 'Red or Black'.
Domino's, which operates 702 shopson a franchise basis, has performedstrongly throughout the economicdownturn, benefiting from cash-strapped customers staying in and or-dering takeaways rather than going outto eat.
"Although the economy as a whole isstill very tough we are on track and con-fident that we will finish the year in linewith market expectations," said chief ex-ecutive Chris Moore.
Domino's said sales for the thirdquarter to 25 September rose by 9.8% to£127 million. Sales at its 605 shops openmore than a year grew by 3.9%. For theyear to date, total sales were up 9.2% to£ 385.4 million, with comparable salesup 2.9%. Domino's said strong salesgrowth in Britain had offset a decline insales in Ireland where trading remainedtough. The company confirmed thatMoore will step down as chief executiveat the end of the year to be replaced bycurrent deputy chief executive and ex-Tesco Mobile boss, Lance Batchelor.
Domino's Pizza continues to growUNITED KINGDOMBUSINESS
IRELAND | AVIATION
Avolon seals deals withRyanair and AirAsiaIrish aircraft leasing company Avolon has announced newdeals with Ryanair and AirAsia, according to RTE Ireland.The company is leasing five Boeing 737s to Ryanair andfour Airbus A320 planes to AirAsia, which is Asia's largestlow cost carrier with a 95 plane fleet. Seven of the planes willbe delivered this week with two more scheduled for earlynext year. Avolon's fleet now stands at 88 aircraft with 25customers in 18 countries. Its total fleet is valued at over $ 4billion. The company also said that it has increased its com-mitted debt facilities by $ 600 million to $ 2.6 billion. It saidthis reflects the increasing ability of the business to access abroader range of debt structures and products. “The Avolonteam has a long history of doing business with both airlineshaving completed our first transaction with Ryanair in 1996and with AirAsia on its launch in 2001,” commented thecompany's chief commercial officer John Higgins.
UK | PRESS
Daily Mail profits shrinkBritish media group Daily Mail & General Trust expectsfull-year earnings to be at the lower end of forecasts afterweak advertising, particularly in travel and retail, hit its con-sumer business. The company, whose flagship Daily Mailnewspaper is Britain's top-selling mid-market tabloid, saidunderlying revenue at its A&N consumer media businesswas down 3% in the 11 months to the end of August, dueto higher printing costs and weaker ad revenues. The fallovershadowed a much stronger performance from thebusiness unit, which hosts events and provides informa-tion on property, financial and other markets. Its underly-ing revenue was up 9%. But the fall in underlying adrevenues in the 11 weeks to 18 September showed a sig-nificant improvement on the previous quarter. Chief fi-nancial officer Stephen Daintith said the Metro newspaperhad performed strongly in terms of advertising and said alladvertising categories had started to recover at the DailyMail. He said operating profits would be down by a mid-single digit percentage on last year and said he was stillworried about the company's first quarter that starts in Oc-tober. "Despite our continued focus on operational effi-ciency, the weak consumer advertising environment meansthat full year group operating profit will be lower than lastyear," chief executive Martin Morgan said. "We expectsome growth in earnings per share compared to last year,given lower finance and tax costs, but at the lower end ofmarket expectations," he said. Analysts are expecting op-erating profit for the full year of £ 298 million.
IRELAND | TECHNOLOGY
Twitter to set up shop in DublinThe social networking company Twitter will establish aninternational office in Ireland. IDA chief executive BarryO'Leary said Twitter's decision to locate in Dublin wouldbe a fantastic addition to Ireland's digital media cluster.The Minister for Jobs, Enterprise and Innovation RichardBruton welcomed the announcement which he said was amassive win for Ireland. He said it showed that, despite ourdifficulties, Ireland has real strengths as an economy. Thecompany is to begin recruiting immediately for roles in fi-nance, user support and marketing. Twitter is setting up aninternational headquarters which will service users outsidethe US. Files at the company records office show that itestablished a new company called Twitter International inIreland earlier this month. It is hoped that the organizationcould employ up to 140 characters.
Visitors admiring the new US fighter jet F35 Joint Striker. The programme has slowed due to demands on defence budgets. | EPA/DPA-Ralf Hirschberger
ITALY · SPAIN · PORTUGALNew Europe | Page 25THE EUROPEAN UNION
October 2 - 8, 2011
Parliament dissolved ahead of November electionSpain's conservative opposition People'sParty (PP) would take a landslide victoryin the 20 November elections, an opinionpoll found on 26 September as SocialistPrime Minister Jose Luis Rodriguez Za-patero dissolved parliament. Parliamentwill be reconstituted by 15 Decemberfollowing the elections. The PP couldwin a up to 189 seats, a clear majority inthe 350-member parliament, its best re-sult ever, according to the poll publishedby the Barcelona daily Periodico deCatalunya, cited by dpa.
The elections were initially due inMarch 2012, but Zapatero moved themforward after coming under increasingpressure over the economic crisis. Spainhas risen out of recession.
However its 20% unemployment isthe Eurozone's highest and growth re-mains slow. There has been concern thatit might follow Greece, Ireland and Por-tugal in being bailed out by the EuropeanUnion and the International MonetaryFund. The government would not adopt"significant" new economic measuresahead of the elections, given that Spain'sfinancial credibility had increased, Zapa-
tero said at a press conference. Zapatero'sSocialist government had been "a gov-ernment for banks and markets" whichhad "undermined the interests of work-ers and of the social majority," far-leftleader Cayo Lara said in a reference tothe government's austerity policies.
Zapatero is not seeking a third term inthe elections. The Socialist candidate forprime minister is former interior minis-
ter Alfredo Perez Rubalcaba, who willchallenge PP leader Mariano Rajoy. Atthe press conference, Zapatero also com-mented on an eventual surrender by thearmed Basque separatist group ETA. Hesaid that moment was coming "closer"after the majority of imprisoned ETAmembers announced they were adheringto a non-violent strategy in the campaignfor Basque independence.
SPAINPOLITICS
Portugal’s Foreign Minister Paulo Portas appeared overtlyoptimistic about his country’s chances of winning “the battleagainst the debt crisis" while addressing the press at a jointconference with his US counterpart Hillary Rodham Clin-ton in Washington recently. Portas said the Portuguese gov-ernment’s aim “is to meet our goals on the fiscal considerationand economic reform, to honour our commitments to theinternational institutions, to fulfil the program with the Eu-ropean Union and the IMF.” He said that once the countrymanages to get its deficits well behind the red mark, the in-ternational observers would get to see Portugal as a statewhich “honours its word and is making a tremendous effortto recover its autonomy.”
The Portuguese minister canvassed although the conferencehis government’s efforts to rein in the ballooning deficit figures."Tough efforts, but we know the goal is a better society, a bet-ter economy, and we'll win this battle against the debt," headded. Responding to US president Barack Obama's comment
that "the crisis in Europe is scaring the world," and that he be-lieved that "the political leaders in Europe have not taken themeasures good enough to deal with the crisis," Portas said thatEurope, which has a strong trans-Atlantic link with the UnitedStates, "can win together the battle for a better economy, forjobs creation, and economic growth."
Clinton applauded Portugal's actions. She said PortugueseParliament's approval of 85% of the Prime Minister's pro-gramme for the next four years is a resounding show of sup-port under difficult circumstances that included a package ofausterity measures that actually went beyond what the IMFand the EU had demanded in the original agreement.
Clinton said the United States encouraged countries tocontinue reform measures that would bring about renewedgrowth and improve competitiveness for the future. She citedthat Portugal had been given a very positive report in Augustby the so-called troika -- the IMF, the EU, the ECB -- fol-lowing its first quarterly review.
Portas: There’s still hope of recovery PORTUGALECONOMY
On 26 September, Italian energy majorENI said it has resumed oil productionin Libya months after the conflict inthe North African country brought itsoperations to a halt. "ENI restarts pro-duction in 15 Libyan wells in Abu-At-tifel, located at 300 kilometres south ofBenghazi," the company said in a state-
ment released in Milan. "Abu-Attifelfield was the first 'giant oil field' dis-covered in Libya by Eni in the 1960's,"according to the statement.
ENI has been active in Libya since1959, where it says it is the largest for-eign investor in terms of hydrocarbonproduction.
Libya sits atop Africa's largest provenreserves of conventional crude, andwith a population of only six million,raked in $40 billion last year from oiland gas exports. Still, experts say itcould take about a year or more to getLibya back to its pre-war production of1.6 million barrels a day.
ENI resumes oil production in LibyaITALYENERGY
ITALY|TRADERSSpain and Italy extend bans on market short selling Market short selling bans implemented by the govern-ments of Italy and Spain are set to be renewed, noteda European regulator on 28 September. The bans hadbeen set to expire on 28 September. The European Se-curities and Markets Authority said the moves, insti-tuted in August to minimize market turmoil, had beentaken in close consultation with the regulator. In shortselling, traders sell shares with the intention of repur-chasing them later at a reduced price, essentially a betthat the item will lose value.
ITALY|ENVIRONMENTEU tells Italy to sort out Naples garbage againOn 29 September, Italy received a fresh warning fromthe European Union's executive to sort out the garbagecrisis in Naples and the surrounding Campania region- and was reminded of the heavy fine it risks if it doesnot act. Because the EU Court of Justice has alreadycondemned Italy's failure to address the situation, thebloc's executive, the European Commission, can askjudges to punish the country for failing to end thelong-drawn-out crisis. EU Environment Commis-sioner Janez Potocnik took an intermediate step on 29September, sending Italy yet another letter of warning.But he also signalled that payday was getting closer. "IfItaly fails to comply, the Commission may bring thecase back to the Court and ask for fines," the EU ex-ecutive said in a statement.
SPAIN|ECONOMYSpain warned of sluggish growthThe already active austere measures adopted by theSpanish government have fallen short of taking thecountry’s economy back in black, a recent caution voicedby the Central Bank of Spain indicated. The latestmonthly report from Bank of Spain said that a majorrecovery is unlikely to be experienced by the countrythis year as the economic activities in the third quarterfailed to reach the required momentum. The bank’s out-look practically contradicted the hopes of the govern-ment which, despite the risk of an erosion of theirsupport base, pushed with painful cuts to heed to theeconomic markers. In real terms that meant Spain’s con-servative opposition People's Party (PP) received someextra impetus over their socialist contender led by PrimeMinister Jose Luis Rodriguez Zapatero and has beentipped to win the upcoming elections in November.However it had yet to be determined how much thegovernment was responsible for the bleak figures andto what extent were the contributions made by the on-going economic hullabaloo in Europe, more specificallyin the Eurozone. According to the central bank’s state-ment released on 28 September, the data available thusfar for the third quarter of the year showed “generallylethargic activity.” The bank’s economists voiced cau-tion over a trend of low spending by Spanish house-holds as that would undermine the hopes for a modestrecovery. The depressing figures for the Spanish econ-omy coupled with the towering 20.89% unemploymentrate posed a serious concern for world markets, expertsnoted. Most analysts shared the view that Madridwould struggle to erase the red ink in its accounts andpay off its long-term sovereign debt. They noted thatthe latest central bank figures cast in serious doubt thegovernment's target for growth of 1.3% this year.
Spanish deputies vote during the last session of the term in the Spanish Parlia-ment in Madrid, Spain, 22 September 2011.The next Spanish general electionwill be held on 20 November 2011.|EPA/SERGIO BARRENECHEA
AUSTRIA · SLOVENIA · MALTA
New Europe | Page 26 THE EUROPEAN UNIONOctober 2 - 8, 2011
AUSTRIA|AVIATION
FW grounds new hiringThe new chairmen of Flughafen Wien AG (FW) havepresented a strict cost-cutting programme, Austrian in-dependent reported on 23 September. Julian Jager andGunther Ofner, who took over at the company whichmanages Vienna International Airport (VIA or VIE)on 1 September, announced they would not hire any ad-ditional staff in the coming years. FW currently employs4,200 men and women. The firm’s new leadership ex-plained employees who retired would not be replaced.The new FW board also pledged to reduce material ex-penses by 20% by 2015. FW envisages investing around€ 650 million in its facilities at the same time. Never-theless, Jäger and Ofner ruled out a capital increase. Thecity government of Vienna and the provincial parliamentof Lower Austria are FW’s main stakeholders. Both po-litical bodies have a 20% interest in the firm whichachieved a turnover of € 280.3 million in the first sixmonths of this year. Jager and Ofner promised to blockall attempts of politically interference. The new FWbosses also revealed their incomes yesterday. They saidtheir annual salaries were € 250,000 each. Bonuses couldhelp them to double these amounts. The decision to dis-close their wages is seen as an attempt to disassociatethemselves from their successors Herbert Kaufmann,Ernest Gabmann and Gerhard Schmid. The new FWboard’s promise to improve FW’s facilities to increasecustomers’ satisfaction comes after managers of AustrianAirlines (AUA) managers expressed criticism about thestate the arrival area and other parts of the airport werein. The airline bosses claimed many travellers were ap-palled by VIA’s appearance. AUA is FW’s most impor-tant business partner since more than one in twodepartures and take-offs are services of AUA and its af-filiates. AUA officials have called on FW to reduce thefees it charges airlines as the airport’s service quality al-legedly fails to match standards reached elsewhere inCEE. FW is understood not to implement a rise ofcharges aviation firms must hand over when operating atthe aerodrome. Around 80 airlines are currently doingbusiness at the airport which is situated south-east ofVienna. Swiss carrier SkyWork Airlines (SkyWork) be-came the latest to do so earlier this month. The airline,which was established in 1983 – now operates betweenVIA and Bern-Belp Airport (BRN) in Switzerland. Al-most 2.08 million passengers were registered at VIA lastmonth, 4.3% more than in August 2010. Especially thenumber of people on planes to destinations in EasternEurope (EE) soared by 14.7%.
SLOVENIA|AVIATION
Slovenia seeking five newroutes for budget carriersSlovenia wants to increase the number of tourists arriv-ing by air and plans to attract new budget carriers by co-financing the marketing budgets for at least five newroutes, according to plans unveiled by the governmentand the Slovenian Tourism Board (STO), Invest Slove-nia reported on 27 September. The move is in line witha decision taken by the government yesterday to pro-mote new routes linking Slovenia to the key tourist mar-kets in 2012, which is one of the key measures toimprove the competitiveness of Slovenian tourism. Theco-financing will be carried out based on a public call forapplications that the STO is expected to release shortly.Slovenia is currently served by two budget carriers. UK-based no-frills carrier Easyjet operates Ljubljana-Lon-don Stansted and Ljubljana-Paris routes and a start-up,Golden Air, has recently announced it will offer sched-uled flights between Maribor and London Stanstedfrom October.
Adria will be sold in 2013The CEO of Adria Airways, Klemen Boštjančič, has said thatthe Slovenian state carrier will begin the search for a newowner at the end of March 2012, with the process to be com-pleted by the start of 2013, Balkans reported on 27 September.
The comments came a week after the state, together withthe country’s banks, bailed Adria from an impending bank-ruptcy.
Bostjancic added that in the next few months the airline willbegin a difficult restructuring process which, when completed,
will make the airline more attractive to potential investors andpartners. The airline cannot be sold in its current state andneeds to be partially restructured before any talks with poten-tial new owners can begin.
“The restructuring process aims to cut costs and stop theairline from bleeding”, Boštjancic said. He added that Adriahas had major problems with its accounting department whichhas, in the past, distorted the airline’s financial performance byrepresenting losses to be much lower than they actually were.
SLOVENIAAVIATION
Over 500 Austrian truck drivers whowere made redundant in the crisis couldreceive millions of euro to help them finda job, Austrian Independent reported on23 September.
Laszlo Andor, the European Com-missioner for Employment, Social Af-fairs and Inclusion said the EuropeanCommission (EC) decided to supportthe 502 Austrians with €3.6 million. Themoney will come from a fund of his de-partment. The European Parliament is
expected to give the payment the go-ahead later this year.
The Austrian government coalition ofSocial Democrats (SPÖ) and the con-servative People’s Party (ÖVP) asked theEC for support after the 502 lorry driv-ers lost their jobs in 2009 when thealpine nation and countries across theworld felt the full impact of the eco-nomic downturn.
All of the affected professional mo-torists were working for cargo companies
and transport firms based in theprovinces of Lower Austria and UpperAustria. Firms of the branch argued asharp decline of assignments left themwith no other option but reducing theirworkforce.
More than 8% of Austrians aged 25 oryounger are currently out of work. Thecountry’s overall jobless rate was 4% inJune. Eurostat, the EC’s statistics au-thority, underlined that this was the low-est percentage figure in the EU.
Sacked truckers set to get €3.6 mln
AUSTRIA JOBS
On 26 September, Malta Enterprise re-opened The Libya Commercial Officewhich will provide a central point of con-tact for all services and support for busi-nessmen and entrepreneurs seeking orwilling to establish or further commer-cial and business links with Libya.
More than 100 businesses have ex-pressed their interest in a business delega-tion that will be visiting Libya. Enterprisesin both countries – whether Maltese com-panies interested in doing business withLibya or vice-versa – will thus have a focalpoint that could also provide them with a
range of practical services designed to fa-cilitate business. Amongst others, these in-clude assistance in the establishment ofcontacts, provision of business advisoryand market research services, as well asidentification and transmission of businessopportunities including through a tenderinformation service.
The Minister responsible for theEconomy, Tonio Fenech said this duringexplained that “Government’s prioritywas to ensure that jobs at these companiesare safeguarded, but at the same time wealso took care of those who lost their job,
and through the ETC developed a Per-sonal Action Plan to provide these work-ers with free courses to support them inlooking for alternative employment.”
Since the beginning of the conflict,Malta Enterprise has assisted around 70Maltese companies who had a commer-cial interest or presence in Libya with al-most 200 separate issues. These rangedfrom speeding up payments owed to thecompanies by Government departmentsor entities, to deferring payments theyowed themselves such as tax, VAT andsocial security.
The Libya Commercial Office reopened
MALTABUSINESS
EU Commissioner of Employment, Social Affairs and Inclusion Laszlo Andor is helping jobless truckers.|EU
BELGIUM · NETHERLANDS · LUXEMBOURG
New Europe| Page 27
THE EUROPEAN UNIONOctober 2 - 8, 2011
Support for UN struggleagainst sexual violence in warIn the margin of the 66th GeneralAssembly of the United Nations inNew York, Deputy Prime Ministerand Minister for Foreign AffairsSteven Vanackere on September 22attended a mini-summit on the fightagainst sexual violence during armedconflicts. This meeting was organ-ised by the UN Special Representa-tive Margot Wallström. The BelgianMinister for Foreign AffairsVanackere confirmed that Belgiumwholly supports this effort and an-nounced a support contribution of250,000 euro by the Belgian govern-ment. “Women in conflict areas fallvictim to sexual violence on a dailybasis. This reprehensible form of vi-olence all too often goes unnoticedand unpunished. It is of great im-portance that the international com-munity gives these women a voice,and engages in this fight against im-punity determinedly and continu-ously,” minister was quoted as saying.
In the presence of the UN Secre-tary-General Ban Ki-moon, the for-
eign affairs ministers of variouscountries were in attendance, amongthem South Sudan, Liberia andBosnia-Herzegovina. The team ofexperts in this matter, created in
1999 by UN Resolution 1888 andtasked with supporting countries inconstructing effective policies tocombat this terrible form of violence,put forward its progress report.
BELGIUMCONFLICT
The Association of the Luxembourg Fund Industry(ALFI) on September 27 announced that it has set out itsambition for the Luxembourg Fund Centre, to be a globalcentre of excellence for the asset management industry,thereby creating opportunities for investors, fund profession-als and the global community as a whole.
The five key objectives set out in ALFI’s ambition paperare aimed at ensuring UCITS remains the best-in-class forinvestor protection, to help fund managers and institutionalinvestors to leverage the development of regulated Europeanalternative funds, with AIFMD. They are aim to stimulateinnovation within the funds industry, to facilitate cross-bor-der fund distribution and to ensure Luxembourg remains thepartner of choice for the asset management industry.
Marc Saluzzi, Chairman of ALFI, comments ““With amarket share of over 30% Luxembourg has become the lead-
ing fund centre in Europe, thanks to its early adoption ofUCITS. However, the recent crisis has demonstrated that in-vestor protection is key and ALFI aims to highlight thatUCITS already provides outstanding safety to investors. ThisAmbition Paper aims to tackle these issues, and centres ontwo statements which are very close to our hearts, first, thatfunds are good for you and, second, that Luxembourg is goodfor funds.
Mr Saluzzi continued: “By providing quality service to in-vestors, asset management “made in Luxembourg” will alsobenefit the community as a whole - in Luxembourg, in Eu-rope and internationally. It will help renew trust in long-termsavings, facilitate capital investment, increase business confi-dence, create highly skilled jobs and fulfil the asset manage-ment industry’s role in generating prosperity in the globaleconomic value chain.”
ALFI aims to boost asset management profile
LUXEMBOURG FINANCE
THE NETHERLANDS|DIPLOMACY
UN urged to pass sanctions on SyriaThe Dutch Minister of Foreign Affairs Uri Rosenthalhas asked UN Secretary-General Ban Ki-moon to pressfor UN sanctions against the Syrian regime. Accordingto Mr Rosenthal, it is high time for the UN to adoptsanctions against Assad's regime. The EU imposedsanctions, including an oil embargo, last month. Thesemust now be extended to global UN sanctions, the min-ister argued on 27 September. Mr Rosenthal discussedthe issue with the Secretary-General in the margins ofthe annual United Nations General Assembly in NewYork. Mr Ban said that Syria was one of his central con-cerns and agreed it is vital that the UN take a clear standon Syria. He added that the Syrian president would ul-timately be held responsible for atrocities committedagainst the Syrian people. The Secretary-Generalthanked Mr Rosenthal for the Netherlands' contribu-tion to the international operation in Libya and its ef-forts to curb the spread of nuclear weapons. He alsothanked the Netherlands for hosting the Organisationfor the Prohibition of Chemical Weapons in TheHague.
LUXEMBOURG|MINING
ArcelorMittal commences iron ore production in LiberiaArcelorMittal, the Luxembourg-based world's largest steeland mining company, commenced commercial iron ore pro-duction from its mining operations in Liberia. The launchof commercial mining operations represents an importantmilestone in the recovery of Liberia's economy, which wasdevastated by 14 years of civil war. ArcelorMittal first en-tered this market in 2005, realising the potential of the coun-try's rich mineral resources to facilitate repair of the country'sindustrial and social infrastructure. "It gives me great pleas-ure to announce the formal launch of our mining operationsin Liberia," comments Lakshmi N. Mittal. Developing asustainable mining operation in Liberia has necessitatedfinding solutions to a number of challenges. To date, Arcelor-Mittal invested $800 million in repairing roads and infra-structure, whilst also supporting the need for education andhealthcare amongst the local population, through projectsincluding the reconstruction of a 240 km railway, port, hos-pital and school facilities - developments that will serve localcommunities as well as enabling the iron ore mining opera-tion to operate efficiently. By 2012, ArcelorMittal aims toship four million tonnes of iron ore from Liberia each year.
THE NETHERLANDS|SOCIETY
Number of first-time fathers over 40 rising According to the data published by the Statistics Nether-lands, the number of fathers over the age of 40 at childbirthis growing. One in six had passed the age of 40 last year. Inrecent years, the average age of first-time fathers was 32.4years. First-time mothers are on average 3 years younger.Dutch parents are generally a bit older than parents in otherEuropean countries. Over 184 thousand children were bornin the Netherlands in 2010. More than 60% of the fatherswere in their thirties, as against 66% in 1996. In the over-30age category, the share of fathers beyond the age of 35 hasalso increased in recent years. A growing number of fathersare in their forties. Last year, one in seven fathers were in the40–50 age bracket at childbirth versus one in eleven in 1996.The proportion of fathers older than 50 years varies around1%. The age of first-time fathers averaged 32.4 years in 2010,ie 3 years younger than the average first-time mother. Theaverage age of all fathers at childbirth was 34.0 years, also 3years older than the average mother.
Delhaize Group, the Belgian inter-national food retailer, will offer 7-year non subordinated bonds due2018 (the Bonds) for a minimumamount of 250 million euro. TheBonds will bear interest at a fixed an-nual gross rate of 4.250%, the Bel-gian food retailer announced onSeptember 28.
The Bonds will be offered via anoffer to the public in Belgium and inthe Grand Duchy of Luxembourgwith BNP Paribas Fortis acting as
global coordinator. BNP Paribas For-tis and KBC Bank act as joint leadmanagers and joint bookrunners, andDexia and ING Belgium are co-man-agers under the Bond Offering. Thesubscription period will start as ofSeptember 30, 2011.
Pierre-Olivier Beckers, Presidentand Chief Executive Officer of Del-haize Group said: "This retail bondissue is the first in its kind for Del-haize Group and is a great new op-portunity for us to broaden our
investor base as well as offer the gen-eral public the opportunity to be partof the successful operations of a wellknown brand.”
The proceeds from this issue willhelp fund the continued implementa-tion of our New Game Plan strategyaimed at accelerating top line andprofit growth whilst being a more ef-ficient and sustainable operator, andwill for a part be used to re-finance ex-isting debt recently acquired as part ofthe Delta Maxi acquisition, he added.
Delhaize offer 7 year bonds
BELGIUMFINANCE
Outgoing Foreign Minister and Minister of Institutional Reforms Steven Vanackere
delivers a speech, Saturday 24 September 2011, at the United Nations General As-
sembly in New York City, USA. |BELGA PHOTO BENOIT DOPPAGNE
POLAND · HUNGARY · CZECH REPUBLIC
Page 28 |New Europe THE EUROPEAN UNIONOctober 2 - 8, 2011
CZECH REPUBLIC|TELECOMS
T-Mobile chooses Alcatel-Lucent Telecom infrastructure and solutions provider Alcatel-Lu-cent has bagged a major contract to empower T-Mobile’snetwork in Czech Republic with more data speed. A com-muniqué from the company recently revealed that selectportions of T-Mobile's fiber-optic backbone network inthe Czech Republic would be upgraded using its technicalhelp to support transmission speeds of 100 gigabits per sec-ond, a benchmark required to be achieved to address theneeds of enterprise customers. The operator is gearing upto provide individual services connecting data centers andinternational transit traffic at that speed. The new networkwould serve as the backbone for T-Mobile’s 3G networksupporting the company’s broadband vision, the commu-niqué claimed. “Development of fiber-optic communica-tions has always been one of T-Mobile's priorities. Ourfiber-optic backbone network now covers communicationbetween more than 60 of the largest cities and towns in theCzech Republic,” Frank Meywerk, technology director atT-Mobile Czech Republic, said in a statement. “New typesof cloud services and particularly high-definition video areleading to a 35% year-on-year increase of transmitted datavolumes,” said David Grundel, managing director of Alca-tel-Lucent Czech. “This trend is forcing us to continuouslydevelop technological innovations, one of which is un-doubtedly the 100G,” he added.
POLAND|ECONOMY
Warsaw and New York Stock Ex-changes to strengthen cooperation Polish President Bronisław Komorowski met with theBoard of the New York Stock Exchange (NYSE). Duringthe meeting the parties discussed the issue of strategicpartnership between the Warsaw Stock Exchange and theNew York Stock Exchange in the context of co-operationin Central and Eastern Europe. The partnership is part ofa currently implemented concept of “Warsaw - RegionalFinancial Center” and is aimed at strengthening the role ofPolish market in this part of Europe. While stressing itssupport for the leading role of Warsaw in the region, theBoard declared that the NYSE will continue its strategicco-operation with the Warsaw Stock Exchange.
CZECH REPUBLIC|ENERGY
Czech-Poland gas pipeline operative An interconnector gas pipeline connecting Czech Republicand Poland was formally put into operation last week throughan opening ceremony attended by both the Czech and thePolish prime ministers. The pipeline, stretching approxi-mately 31.5 km between the countries, has been lined upthrough a joint venture between Czech transmission systemoperator Net4Gas and Polish gas transmission operator Gaz-System. The interconnection project consisted of two parts.Gaz-System built a 22 km gas pipeline from the Polish-Czech border in the Cieszyn region to Skoczow, as well as ametering station in the region of Cieszyn which augmentedthe already constructed pipeline on the Polish side of the bor-der. This section of the project was completed in 2010 andthe metering station was completed in August this year. Onthe Czech side, Net4Gas constructed an approximately 9.5km gas pipeline running from the Polish-Czech border tothe Czech transmission system connection point in Tranovice,in the cadastral area of Zpupna Lhota. The inaugural cere-mony was held at the Polish town of Cieszyn and on theCzech side near the village of Chotebuz. Both sections havebeen constructed with 20 inch diameter pipes and have anoperating pressure of 6.3 MPa.
Erste Bank Hungary to cease cooperation with loan brokersErste Bank Hungary will cease its co-operation with loan brokers from 1 Oc-tober because of the unfavourableeconomic and regulatory environment,but it will not pull out of Hungary, thelender said on 23 September, BudapestBusiness Journal reported.
The bank's lending products will onlybe available at Erste Bank Hungarybranches from October.
Erste Group's management con-firmed their intention to continue thebank's activity as a defining and capital-strong player on the domestic bankingmarket, Erste Bank Hungary said. Thebank also wants to maintain its strategicties to Magyar Posta, Vienna InsuranceGroup and ING Biztosíto, it added.
Hungary's government is makingbanks shoulder the costs of an early re-payment scheme for foreign currency-denominated loans at a discounted
exchange rate. Erste Group chairman-CEO Andreas Treichl warned that themeasures by the government couldcause investors to take their business tothe Czech Republic, Romania or Slo-vakia for the short term.
He said Erste Group would not in-vest resources earmarked for businessdevelopment in Hungary. It will, how-ever, ensure sufficient capital for capitaladequacy and liquidity to its Hungar-ian unit, he added.
HUNGARY
FINANCE
Misdemeanor set to be stripped off Czech residencyThose who repeatedly commit delin-quent acts are now set to be repelled bydecision of their respective municipali-ties if a bill that was preliminarily en-dorsed by the Czech lower house lastweek would finally be turned into law.
At the first reading on 27 September,the Czech lower house gave its approvalto the bill that would make it possiblefor municipalities to ban the residencyof people who repeatedly commit mis-demeanors. The bill -- drafted by agroup of coalition MPs led by the for-mer chief magistrate of Chomutov,Ivana Rapkova -- survived a motion toreject it by the opposition social de-mocrats and was headed to variouscommittees for review.
Once turned into law, the bill wouldempower the municipal authorities toban misdemeanors such as begging,consuming alcohol or prostitution inplaces where municipal ordinancesforbid such activities and the author-ities would be able to ban those whorepeatedly commit misdemeanorsfrom residing on their territories forup to three months. Even though theMP's bill was submitted as a coalitioneffort, the cabinet of Czech PetrNecas reportedly expressed a negativeview of it. Some even remarked thatthe bill was aimed against the inter-ests of the Roma community.
Stanislav Krecek, press spokesper-son for the Czech social democrats
(CSSD), warned against adoptinglaws that apply only to certain peopleand certain places. "That is the road tohell," he said, adding that he doubtedrestricting people's residency wouldmake any sense as a sanction. How-ever, Rapkova claimed that the pro-posed law wouldn’t amount tosomething to be termed as “anti-Roma law” but it would be a lawagainst all who disturb public order.The bill must pass through the secondand third reading phases, duringwhich amendments to it will be dis-cussed and its overall wording will beestablished. It would then have to bediscussed by the Czech senate andsigned into law by the president.
CZECH REPUBLICPOLITICS
Prime Minister Donald Tusk attended the ceremony of the 5thanniversary of the University of the Third Age at the WarsawSchool of Economics. The head of government announced anincrease of funding for the senior programme, from the next yearon. The Prime Minister underlined that the level of engagementin voluntary services by older people in Poland remains very low.“Our programme Świetliki, realised on the commune and districtscale, will be devoted to encouraging older people to be active,” heunderlined. “This task will not only be fulfilled by Universities ofthe Third Age. We want a national network of health workshopsto be launched, which will make mutual aid possible throughhealth education, meetings with doctors and introduction of theelements of rehabilitation,” the head of government explained.
“Wisdom, common sense, readiness to be active even if the
circumstances not always make it possible - this is what makesyou priceless people, also from the perspective of the interests ofthe whole state,” said Donald Tusk.
The University of the Third Age has been operating at theWarsaw School of Economics since 2006. Around 650 studentsattend the classes organised by the School. The University of theThird Age at the Warsaw School of Economics is a founder ofthe National Memorandum on the Universities of the Third Ageassembling 55 institutions in the whole of Poland.
All in all there are over 300 Universities of the Third Age op-erating in Poland, with over 100,000 students. The first Univer-sity of the Third Age was established in Poland in1975, inWarsaw. It was one of the first institutions of this kind in theworld.
Funding increased for the senior programme at University of the Third Age
POLANDEDUCATION
A cyclist passes by a branch of Erste Bank, an affiliate of the Austrian owned bank by the same
name, in Budapest, Hungary, 20 September 2011. |EPA/SZILARD KOSZTICSAK
SWEDEN · DENMARK · FINLANDTHE EUROPEAN UNION
New Europe | Page 29
October 2 - 8, 2011
Spotify and Facebook ‘in a relationship’Facebook CEO Mark Zuckerbergannounced a new partnership withSwedish firm Spotify, to make itspopular music streaming service anintegral part of the social media web-site's platform.
Spotify is growing fast and re-ported this week that it now num-bers more than two million payingusers for its unlimited music servicein nine countries worldwide.
US firm Facebook has launched aslew of changes to the presentationand function of its platform recentlyand Zuckerberg presented the firm'splans, with Spotify founder andCEO Daniel Ek the first to join himon stage. "This is a big day for Face-book and big day for Spotify, music-lovers and artists," Ek said.
Spotify is among 33 Europeanlaunch partners to roll out "socialapps" on Facebook as the social net-working site seeks to move towardentertainment, including video, films,music, books and television.
Spotify's application will allowFacebook users to listen to musicwith their friends and share theirfavourites and music listening habitsvia their profile. Facebook's 800 mil-lion users will gain access to musicfor free, while ensuring that artistsare compensated for their work.
Spotify was founded in 2006 bySwedes Daniel Ek, then in his twen-ties, and Martin Lorentzon.
The service first launched in 2008in Sweden and says it has since be-come the world's largest streamingservice with over 10 million usersworldwide.
TECHNOLOGYSWEDEN
Jyske Bank announced that it wouldseek to reduce the size of its work-force by 6.5% as part of an effort tosave 400 million Danish crowns an-nually, according to the CopenhagenPost.
Some 150 employees lost their jobseffective immediately last week, whenthe bank also announced it was clos-ing six of its branches in the Jutlandarea. Another 100 positions will beeliminated, but the bank said ithoped most of those losses wouldcome through natural attrition.
Jyske Bank, the country’s thirdlargest bank, reported profits of 318million crowns for the first sixmonths of 2011 and was criticised foreliminating jobs before it was neces-sary. But according to managing di-rector Anders Dam, the lay-offscame after the bank’s growth predic-tions for the coming year proved to
be “over-optimistic”.He added that although Jyske
Bank was seeing an influx of newcustomers, just as many of the bank’sborrowers were paying off theirdebts.
As part of its savings package, JyskeBank will also increase its interestrates.
But even as it was announcing lay-offs, Jyske Bank also said it plannedto acquire the leasing company Fi-nans Nord from the Spar Nord sav-ings bank and keep all 50 FinansNord employees. Dam defended thedecision as part of an “overall plan” ofworking towards reducing costs whileat the same time seeking to generaterevenue.
Finans Nord has been a successfulbusiness unit for Spar Nord, but at atime when borrowing money wasmore expensive for banks, it chose to
focus on its banking operations.Jyske Bank is just the latest of the
nation’s largest banks to announcethat it was seeking to reduce the sizeof its workforce in order to deal withrising costs of borrowing money andfalling income.
Danske Bank, the nation’s largestbank, said it does not have any im-mediate plans to eliminate employ-ees, but it said it could reduce itsworkforce by as many 1,500 over thenext seven years through attrition.
On 21 September, Danske Bankalso announced an interest rate hikeas a way to generate more revenue.
Nordea Bank Denmark also an-nounced at the end of August that itwould be cutting 2,000 jobs, includ-ing 650 in Denmark. Here too, bankofficials said that lay-offs would bejust one of a number of measures thebank takes to get costs under control.
Jyske Bank prepares for lay-offsFINANCE
DENMARK
DENMARK | TRANSPORT
DSB to lay-off hundredsState rail operator DSB is preparing a lay-off round inorder to deal with a revenue shortfall, according to theCopenhagen Post. “I can confirm that hundreds of em-ployees may be fired,” union chairman Ulrik Salmonsensaid. DSB would neither confirm nor deny the reports thatlay-offs were pending, but chairman Peter Schutze said ex-ternal consultants, working together with the TransportMinistry, have reviewed DSB in order to recommend howit can be streamlined. Salmonsen said that he predicts thatas many as 1,000 employees will lose their jobs. On thechopping block are between 234 and 544 locomotive driv-ers and between 70 and 500 conductors and station em-ployees. He said that the cuts are a result of theapproximately 800 million Danish crowns shortfall fol-lowing problems with DSB’s privately owned rail operatorDSBFirst. According to Salmonsen, the lay-offs will forceDSB to cut nearly half of its departures, and that will hurtoperations because many train conductors and operatorsalready work overtime. Christian Roslev, DSB’s managingdirector, wants both a better financial outlook and morepassengers. But that’s a tall order, according to Niels Lunde,a journalist and columnist for financial daily Børsen. Hesaid Roslev is stuck between a rock and a hard place. DSB’schallenge is to put more trains on the tracks even thoughthe company faces deeper financial problems than Roslevforesaw when he took the job on 1 August.
FINLAND | LABOUR
Finnish PM rejects return to wage talksJyrki Katainen, the Finnish prime minister, told reportersthat the government would lend its support to the nextwage and conditions talks round but stressed that there wasno going back to tripartite incomes policy talks, accordingto News room Finland. "The government stands ready tosupport [a moderate wage] solution, but it will stand or fallas a result of bipartite talks," Katainen said. Katainen re-fused to be drawn on the scale of tax incentives for mod-est wage demands by the unions, saying only that theycould not be large.
FINLAND | BUSINESS
STX to build cruise ship at Finnish yardSouth Korean shipbuilder STX said in a statement on 27September it had won a cruise ship order from Germantourism and logistics group Touristik Union International(TUI) and said the new vessel will be built in Finland. "Theproject will bring some 5,500 man-years of labour to STXFinland's Turku shipyard," the statement added. The 295-metre ship, with a capacity of 2,500 passengers and 1,000crew members, is scheduled to be delivered in 2014. Themonetary value of the order was not disclosed.
FINLAND | YOUTH
Scouts association to cut jobsThe Guides and Scouts of Finland said on 26 Septem-ber it would launch talks about cutting jobs, which wouldaffect all 23 workers at the association's headquarters, ac-cording to News room Finland. Heidi Jokinen, thechairwoman of the association, said that membership ina number of youth associations was falling, resulting inthe need to look for job cuts. With about 60,000 mem-bers, the Guides and Scouts is the country's largest youthassociation.
Spotify co-founder and CEO, Daniel Ek, delivering a speech at the 'Mobile World Congress' inBarcelona, Spain, on 17 February 2010. | EPA/Xavier Bertral
LATVIA · LITHUANIA · ESTONIA · SLOVAKIAPage 30 | New Europe THE EUROPEAN UNIONOctober 2 - 8, 2011
LATVIA|CITIZENSLatvians residing abroadcan get dual citizenshipLatvian Prime Minister Valdis Dombrovskis pledged tointroduce necessary amendments to the existing laws toallow dual citizenship status for Latvians staying abroad.While addressing the annual meeting of the World Fed-eration of Free Latvians (WFFL) on 28 September,Dombrovskis made the promise which he said would becomplied with in the near future, though no time framehas yet been specified. WFFL President Ints Rupnersalso stressed on the necessity to allow persons to registeras dual citizens once again in Latvia. According to Rup-ners, this would help the Baltic country with significantcontributions swelling its coffer. Rupners also said thatRussian and South American citizens of Latvian eth-nicity who still have links to Latvia, but have never hadcitizenship, should be given the opportunity to becomecitizens of the country for its own benefits.
SLOVAKIA|POLITICSGoverning coalition gets partner’s support on ESFSA junior coalition party of the Slovak government lastweek indicated that they had agreed on terms with PrimeMinister Iveta Radicova on the issue of expanding theEurozone bailout fund. The expansion of the fund, aimedat providing another lifeline to the highly indebtedGreece, had already been facing strife to get pass throughthe parliaments of several EU member states. "We wantto reach a solution that would meet two conditions: wewon't block other countries from creating the rescue fundand it won't cost Slovak taxpayers anything," Jozef Kol-lar, chairman of the Freedom and Solidarity (SaS) cau-cus said after talks with the Slovak premier.
SLOVAKIA|TELECOMSMobile operators' first appeal rejectedSlovakia’s Telecommunications Office has turned downthe appeal of telecommunications operators OrangeSlovensko and Slovak Telekom (T-Mobile) against the€88 million in fees they have been ordered to pay for ex-tension of their operating licences for ten years, Slovakspectator reported on 27 September. Roman Vavro,spokesman for the authority, told SITA that the chair-man of the Telecommunications Office and the secondinstance authority will now review the appeal by bothcompanies. The deadline for that ruling is thirty days,with a possible further extension. The Telecommunica-tions Office chairman's ruling is final and takes effect onthe day of its delivery to complainants.
SLOVAKIA|AUTO INDUSTRYKia ups production to meet demand in SlovakiaKIA Motors Slovakia will start hiring 1,000 new em-ployees beginning on 26 September due to the produc-tion of new KIA models and the launch of three shiftsper day beginning in the first quarter of 2012, Slovakspectator reported. “New jobs will especially be created inproduction and they will be suitable for candidates witha technical education and work experience,” said DusanDvorak, spokesperson for KIA Motors, adding that therecruitment process will last until the end of the 2011.New employees will attend a general, one-week trainingprogramme and then specialised training focused ontheir future job, the SITA newswire reported.
The latest data from Latvia’s CentralStatistical Bureau showed constructioncosts in the Baltic country declined mar-ginally in August, thanks to the plum-meted costs, both in labour andconstruction materials. In monthly com-parison, Latvian construction costs de-creased on average by 0.1% in August,being aided by a 0.5% decline in labourremuneration and 0.3% reduction inprices of building materials.
The breakdowns showed that the de-crease in labour remuneration was mostlyobserved in the construction of transport
facilities as there was a noticeable drop inwork volume. On the other hand, main-tenance and operational costs of machin-ery and equipment increased by 0.7%.Decrease in costs for reconstruction andconstruction of industrial, agricultural andtrade buildings had the greatest loweringimpact on the overall level of constructioncosts. Year-on-year, the overall level ofconstruction costs grew by 1.9% in Au-gust with maintenance and operationalcosts of machinery and equipment hav-ing increased by 14.2%.
However, prices of building materials
diminished by 2.0% and labour remu-neration of workers decreased by 1.8%.The price data on construction resourcesare obtained from more than 150 con-struction enterprises and 30 trade enter-prises. Construction enterprises provideprice data for all resources, including re-muneration of workers employed in theconstruction, while trade enterprises in-dicate only the prices of building mate-rials. The samples taken by the centralstatistical agency included constructionenterprises with the highest value of ownaccount construction works in 2010.
Construction costs declines in AugustLATVIA CONSTRUCTION
Estonia's Central Bank Governor An-dres Lipstok wrote in an article publishedin business daily Aripaev last week thatthe governments of the Eurozone mem-ber countries should take an even proac-tive role if they have to creep back inBlack. He noted that the market turmoilshould be calmed with some solid assur-ances followed by justifiable actions.
The governments must take rapid andclear action to calm markets as the cur-rency bloc struggles with the spill over
from its debt crisis, Lipstok wrote. "Inlight of the uncertainty on the markets,it is important that Eurozone govern-ments act quickly and that the accompa-nying message is unified," Lipstok added.
Estonia adopted the euro in January,making Lipstok the country's represen-tative on the governing council of theEuropean Central Bank. Lipstok saidnations in the 17 member Eurozoneshould "implement fully and withoutdelay" their 21 July agreement to tackle
the growing debt crisis by increasing theEuropean Financial Stability Facility's(EFSF) lending capacity to €440 billion.He underlined that despite concerns, theEurozone is not doing worse economi-cally than other industrialised nations. "Inlight of the criticism of Europe, it is im-portant to keep in mind that in the Eu-rozone as a unit, the main economic andfinancial indicators are in similar or bet-ter shaped than in other industrial states,"he wrote.
ESTONIAECONOMY
Estonian Central Bank head urges action
Lithuania has called on the European Commission to increaseits efforts in negotiating the possible terms of a trade agree-ment with Ukraine. In a EU meeting in Brussels last week,Lithuania’s Deputy Foreign Minister Egidijus Meilunas com-municated their position on the issue. The meeting was focuson discussing the progress of the EU-Ukraine negotiations ona comprehensive free trade agreement. Also Russia's accessionto the World Trade Organization (WTO) and other impor-tant issues of EU foreign trade policy were discussed at themeeting. Negotiations between the EU and Ukraine are on-
going since 2008 and thus far agreements on many importantissues have been reached. Lithuania called on the EU executiveto make every possible effort to complete the negotiations thisyear. Agreement between the EU and Ukraine would implynot only the mutual opening of markets, but also the harmon-isation of Ukraine's legal acts and the EU law. The agreementwould promote trade and economic relations between the EUand Ukraine which is expected to significantly benefit Lithuan-ian businesses. The same would also facilitate Ukrainian mar-ket access for Lithuanian exports.
Vilnius calls on EU to complete deal with UkraineLITHUANIADIPLOMACY
Estonian Central Bank Governor Andres Lipstok |EPA/VALDA KALNINA
GREECE · CYPRUSNew Europe | Page 31THE EUROPEAN UNION
October 2 - 8, 2011
On 30 September, French President NicolasSarkozy and Greek Prime Minister GeorgesPapandreou were to hold talks on Greece'sprogress in implementing a cost-cutting pro-gramme that is vital to secure fresh bailoutfunds. Sarkozy said that his meeting with theGreek premier would be the occasion to say"exactly what our strategy is concerning thesupport we owe a European country likeGreece." There is broad support in France formore intervention to shore up the euro.
Prior to his arrival in Paris, Papandreou trav-elled to Warsaw for the bloc's Eastern Partner-ship summit, where he met with EuropeanUnion officials, including France's Prime Min-ister Francois Fillon.
Papandreou's trip to Paris comes as interna-tional auditors continue their review of Athens'austerity programme. Inspectors from the EU,the European Central Bank (ECB) and theInternational Monetary Fund were sent to theGreek capital to evaluate whether Greece haddone enough in terms of implementing theausterity measures needed to secure a sixthtranche of bailout loans. Greece needs thefunds to avoid a payment default. France is thesecond-biggest contributor, after Germany, tothe eurozone bailout fund that is propping upthe Greek economy. French banks are also themost exposed of European banks to Greeksovereign debt.
Papandreou's visit to Paris comes just daysafter he travelled to Berlin to assure Germansthat Greeks were making "big sacrifices" in re-turn for Europe's support.
Greek lawmakers on 27 September passedfresh measures which included a property taxbill, to be gathered through electricity bills to
make it easier for the state to collect, instead ifgoing through the country's inefficient tax sys-tem. Finance Minister Evangelos Venizeloshas drafted a plan which seeks to cut thebudget shortfall to 7.6% of gross domesticproduct this year. Under the plan the govern-ment will cut the more than 750,000 publicsector workforce down to a fifth and reduce thepublic wage bill by 20%. It will also lower over-all pensions by 4% in addition to a 10% cut al-ready agreed in previous plans.
On 29 September, the German parliamentoverwhelmingly approved an extension of theEuropean Financial Stability Facility (EFSF).
In her meeting with Papandreou on 27 Sep-tember, German Chancellor Angela Merkelsaid: "We know that the people of Greece arebeing made to endure a great deal at the mo-ment." She said that Greece must fulfil all theterms to receive the aid.
Earlier, speaking at a meeting of the Ger-man Federation of Industry (BDI) in Berlin,Merkel moved to face down critics of her han-dling of the crisis, declaring that Germany willdo whatever it takes to overcome the financialproblems that have engulfed Greece. "We reallyrespect what Greece has done with respect tostructural change," she said. "We all wish tostrengthen Greece." Merkel said that Germany"will give any support possible to Greece ... sothat we will not have bad news month aftermonth." In his remarks to the BDI, Papan-dreou warned that the battle to haul Greeceback from the brink could take years but in-sisted that Athens would meet its commit-ments. Papandreou told the business leaders:"Greece will live up to its promises (and) fightits way back to prosperity."
GREECEECONOMY CYPRUS|EU AFFAIRS
MEPs debate tensions between Turkey and Cyprus On 27 September, in a debate with High RepresentativeCatherine Ashton and Enlargement Commissioner ŠtefanFüle, MEPs were united in their concern at the rising tensionsbetween Turkey and Cyprus in the dispute over oil and gas ex-ploration. They condemned Turkey's threats and stressed thatany threat against one Member State was a threat against thewhole EU. A number of Members pointed to the growing im-portance of Turkey as a player in the region and underlined theneed for good neighbourly relations, stressing that Turkey, acandidate for EU membership, must accept Cyprus as an EUMember State. Many underlined that Cyprus has the right toexplore for natural resources in its own economic zone whilesome suggested that both communities on the island shouldbenefit from any exploitation of oil and gas resources.
GREECE|ENERGYTAP submits first environmentalstudy to GreeceThe Trans Adriatic Pipeline (TAP) has submitted a Prelimi-nary Environmental Impact Assessment (PEIA) to the GreekMinistry of Environment, TAP said in a press release. This ap-plication is an addition to the scoping documents that TAPsubmitted earlier this year in preparation for its full Environ-mental & Social Impact Assessment (ESIA). In addition tocomplying with Greek law, TAP has also decided to carry outits impact assessment in accordance with the stringent inter-national guidelines from the European Bank for Reconstruc-tion and Development (EBRD) to ensure that the projectoptimises environmental and social performance, the press re-lease read.
European Central Bank's (ECB) Klaus Masuch, left, and European Commission Director Matthias Morse enter the Finance Minister's office in Athensfor talks with Greek Finance Minister Evangelos Venizelos, 29 September 2011. |EPA/ORESTIS PANAGIOTOU
Auditors continue Greek review
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BULGARIA · ROMANIAPage 32 | New Europe THE EUROPEAN UNIONOctober 2 - 8, 2011
Economy to continue improving in 2012
Bulgaria's economy will continue togrow in 2012 despite the debt crisis inthe euro zone, according to a report byMKB Unionbank. For the rest of 2011,the analysts expect that the economywill improve at a slower pace, irrespec-tive of the tough external environment.In addition, exports to emerging coun-tries outside the European Union areseen to play an important role in Bul-garia's development.
MKB Unionbank projects that thecountry's gross domestic product(GDP) will grow by 2.3% in 2011, risingfurther to three% next year. Foreign di-
rect investments are forecast to increaseby 2.4% in 2011 and by 4.2% in 2012,while inflation is seen to go up by four%and 3.5% in 2011 and 2012, respectively.
The country's economic growth forthe rest of 2011 will be closely linked tothe economic health of its major tradepartners - Germany, Italy, Romania,Turkey and Greece, which account for46% of the country's exports.
Since 2010, there has been a gradualchange in the geographical structure ofBulgarian exports, the analysts said.
The share of exports to long-standingEU members contracted to 50.6% in
2009 from 45.6% in 2010. At the sametime, the share of sales to countries out-side the EU (Turkey, Russia and someAsian countries) in the same periodgrew by 3.9 percentage points to 39.1%.MKB Unionbank's analysis shows thatthe trend was maintained in the firstmonths of 2011. "This suggests greaterstability of the export sector in case of amore serious slowdown in Europeaneconomies and shrinking orders to localbusinesses as economies such as Turkeyand China are expected to continue togrow between six% and eight% in thecoming years," the report said.
BULGARIAECONOMY
The European Bank for Reconstruction and Development(EBRD) has launched a new financing facility for SMEs inRomania, worth €60 million, according to the institution. Thefunds will be channelled to the real economy of Romania,through local financial intermediaries such as banks and leas-ing companies, Romania Insider reported on 26 September.
The EBRD is extending the first loan under RoSEFF,worth €20 million, to Banca Comerciala Romana (BCR), Ro-mania’s largest commercial bank and part of the Austrian ErsteGroup. Individual sub-loans are limited to €1mn and thus the
focus is on smaller-scale investments. Sub-borrowers under-taking energy efficiency investments will be reimbursed by upto 10 to 15% of the sub-loan amount on the successful com-pletion of the works, according to EBRD.
The Romanian SME Sustainable Energy Financial Facil-ity (RoSEFF) will help local companies maximise energy sav-ings and improve their overall competitiveness, whilecontributing to a reduction in the country’s high energy in-tensity. EU supports the implementation of RoSEFF by agrant amounting to €12.05 million.
EBRD sets up energy efficiency financingROMANIAENERGY
CRG Nexia, part of the global networkconsultancy Nexia, plans to double itsbusiness in Romania until 2012, afterpartnering Group Expert Consulting2000, according to the company, Ro-mania Insider reported on 27 Septem-ber. The resulting company will operateunder the CRG Nexia brand and willtarget the top 10 ranking in the audit,accounting and consultancy business.The partnership should be completed
by the end of this year. “This move ispart of our five year global strategy, ap-proved last November in Dubai, pro-viding the consolidation of the globalnetwork, simultaneous to the recruit-ment of new partners at a local level,”said Kevin Arnold, CEO NEXIA In-ternational. CRG Nexia currently hastwo offices in Romania, one in the cap-ital city and one in the city of Con-stanta, but plans to open new offices
across the country, in cities like Sibiu,Timisoara, Brasov. According to a studyconducted by CRG Nexia, the BigFour companies in Romania, namelyDeloitte, PriceWaterhouseCoopers,Ernst&Young and KPMG, remainedthe leading providers of audit, consul-tancy and accounting services in 2010in Romania, even though their sharefees decreased from 76.5% in 2009 to72.12% in 2010.
Nexia plans to double business in RomaniaROMANIABUSINESS
BULGARIA|DIPLOMACY
Bulgaria, South Korea discuss co-operationBulgarian Prime Minister Boyko Borisov and his visitingSouth Korean counterpart Kim Hwang-sik have discussedbilateral economic, commercial and cultural ties, FOCUSNews Agency reported. “My visit to Bulgaria aims at re-viewing the past 20 years and discussing bilateral relationsin the next 20 years,” the South Korean premier said. He ex-pressed satisfaction with his meeting with Borisov, addingthat Bulgaria offered many business opportunities for Ko-rean companies. “There is not a better investment oasis thanBulgaria,’ Borisov said later at the opening of a Bulgarian-Korean business forum. Bulgaria has the lowest taxes in theEU, a stable fiscal policy, 3% budget deficit and currency re-serve, Borisov said, adding that the country was investingEuropean funds in infrastructure projects.
BULGARIA|ENERGY
Premier Power to install16.2 MW of PV in BulgariaPremier Power said it will build four photovoltaic powerplants in Bulgaria, totalling 16.2 megawatts (MW). Thecompany said the plants will be located in Dimitrovgrad and,when complete, are expected to represent an over 75% in-crease in the country’s installed photovoltaic capacity sincethe beginning of 2011. The project is the result of a jointventure between Premier Power and Plaan Czech, s.r.o.While no project specifics have yet been released, the fourinstallations will reportedly range between three and fiveMW in size. They will be funded by an unnamed, privateinvestment company based in the Czech Republic. Mean-while, construction is scheduled to start this month, with op-erations beginning by the end of the year. Bjorn Persson,executive vice president of European operations at PremierPower, said, "We look forward to building our presence inBulgaria as the country aggressively targets its goal of reach-ing 16% renewable power by the year 2020."
ROMANIA|RETAIL
Zara to open store in SibiuSpanish retailer Inditex has leased a 1,500 square metre build-ing in the Romanian city of Sibiu, where it will open a Zarastore, the third high street store under this brand in Romania,Romania Insider reported on 28 September. The building onNicolae Balcescu St downtown Sibiu is owned by a subsidiaryof BCR and has an underground level, a ground floor and twofloors, and will undergo renovation. The lease has been inter-mediated by DTZ Echinox. The new Zara store is the retailer’sthird high street store in Romania after Bucharest and Pitestiand is located in Sibiu’s pedestrian area, in a villa which will berenovated. Inditex has 57 stores in Romania under the brandsZara, Pull&Bear, Bershka, Stradivarius, Oysho, Zara Homeand Massimo Dutti. Zara had sales of € 58 million in 2010 inRomania, up from €45.8 million in 2009.
ROMANIA|HEALTH
Medicover opens new centre in BucharestPrivate health care services supplier Medicover would opena new diagnostic centre in Bucharest last week and hopes toinaugurate a hospital North of Bucharest by the end of 2011,news agencies reported. The new diagnostic centre, to beopened on September 28, is located on Dr Grozovici St inthe second district of Bucharest. Medicover currently runsfour clinics in Bucharest and one in Cluj-Napoca, Constanta,Focsani, Iasi, Ploiesti, Timisoara and Brasov.
A man chops firewood at an open air wood market in Sofia. Bulgaria's economy will continue to grow in 2012. |EPA/VASSIL DONEV
NORWAY · ICELAND · SWITZERLANDNew Europe | Page 33PARTNERS
October 2 - 8, 2011
Atomic power station switched on after repairsThe Mühleberg power station near Bern has been restartedafter three months of annual checks and safety improvements,Swiss Info reported on 26 September.
The Federal Nuclear Safety Inspectorate gave the go-aheadat the weekend for the plant to continue operations.
The operator BKW Energy company said the checks on theplant – one of the oldest in Switzerland – had guaranteed itssafety and “long-term use”. High-tech analyses were done on
cracks in the shell of the reactor core and deemed them safe, thecompany said. The technology used enabled a closer inspectionof the cracks, determining their length and depth. The com-pany said the tests confirmed the tendency of cracks to sta-bilise. Alarm systems, turbines, alternators and electricalprotection systems were also tested.
Anti-nuclear protestors said the shell cracks are a securityrisk.
SWITZERLANDENERGY
Construction workers rally for a better dealThousands of construction workersgathered in Bern on 24 September toprotest against wage dumping and callfor better health protection, Swiss Inforeported.
Organisers said 12,000 people hadmarched through the city centre to a rallyon the square outside the parliamentbuilding.
The demonstration was called by theUnia and Syna trades unions tostrengthen their position in negotiationsfor a nationwide labour contract. The
current deal with the Swiss building en-trepreneurs’ association expires at the endof the year.
Their main demands are for wages tobe paid in full in case of illness and acci-dent, rather than at the rate of 80% as atpresent, for better job protection for olderworkers and union activists, as well as formeasures against wage dumping.
The unions said the building industryincreased its turnover by 3.1% last year,although it employed 3.5% fewer work-ers. They want employees to benefit from
the boom in the industry through wagerises and an increase in minimum pay.
Hansueli Scheidegger of Unia said theemployers were dragging out discussions,and warned that if necessary the con-struction workers were prepared to go onstrike
For their part, the employers have saidit needs more time to hammer out anagreement, and they have offered to ex-tend the current one for six months.They have accused the unions of unwill-ingness to compromise.
SWITZERLANDLABOUR
Increased tax on diesel powered carsThe Government is announcing increased sales tax on diesel
powered cars in the coming years, after it has become clear thatthere is more pollution from diesel engines than previously es-timated, Norway Post reported on 26 September.
The lower tax on diesel powered cars was introduced in 2009,
when it was believed that diesel engines polluted the local en-vironment less than gasoline engines, Aftenposten wrote. Newresearch showed that this not correct.
In Norway today, seven out of ten new automobiles are dieselpowered.
NORWAYAUTOS
The Icelandic government intends to at-tribute €6.3 million per year to reinforcepublic transport in the capital region inthe next ten years.
Minister of the Interior OgmundurJonasson stated the initiative will savevast sums of money for the commu-nity, Iceland Review reported on 25September.
A declaration of intent to that extentwas signed by Jonasson, Minister of Fi-nance Steingrímur J Sigfússon and rep-resentatives of the Icelandic RoadsAdministration and local authorities inthe capital region on 22 September.
The main goal is to double the use ofpublic transport in the region. Iceland isbehind neighbouring countries in termsof public transport usage, more oftenthan not Icelanders prefer private vehi-cles over buses.
Jonasson explained that the initiativeincludes all means of transport such as
bicycles. In addition to the funds pro-vided by the state, local authorities willalso participate in the funding of thejoint campaign.
The minister admitted that the initia-tive is expensive but hopes that it willsave significant amounts for the com-munity in the long run.
Iceland to boost public transport with more funding
ICELANDTRANSPORT SWITZERLAND|BUSINESS
Mugabe munches NestleSwiss food giant Nestle is one of 12 multinational com-panies being forced to sell 51% of its Zimbabwean oper-ations to local citizens, Swiss info reported on 26September. A law enacted in March 2010 requires anyforeign company with assets valued at over $ 500,000(453,000 Swiss Franks) to sell 51% to indigenous Zim-babweans. Nestlé, along with Barclays Bank and BritishAmerican Tobacco amongst others, has until the end ofSeptember to comply with the law or risk facing losing itslicense to operate in the country. “Nestle Zimbabwe pro-posed a plan relating to indigenisation in November 2010,”a Nestle spokeswoman said. “We have also responded toa letter received from the Indigenisation Minister on 18August, 2011, and have been in contact with the authori-ties since then.” Nestle has been present in Zimbabwe for50 years. The company employs some 200 people in itsfactory in the capital Harare, which produces cereals andpowdered milk for the local market. In 2009, the factorywas forced to close temporarily following pressure fromgovernment authorities to purchase milk from certain sup-pliers which were not under contract by the company.
SWITZERLAND|BUSINESS
Aryzta's yearly revenues and profits soarSwiss based bakery group Aryzta said its revenues for theyear to the end of July rose by 53.5% to € 2.58 billion, asgroup earnings increased by 44% to €393.3 million, RTEIreland reported on 26 September. Its chief executive OwenKillian said that the year had been one of substantial repo-sitioning for the firm. He said that acquisitions completedthe previous year and a doubling of bakery volumes sawAryzta's food group revenue double. Aryzta's food revenuesin Europe rose by 10.5%, while its North American rev-enues increased by 112% and revenues in the rest of theworld jumped by 403%. The company also said that it hadreduced its net debt by over 10% to € 955.5 million sincethe first half of the year. Aryzta said that consumer confi-dence improved during the year. ''It remains a tough eco-nomic environment for consumers who are now alsodealing with higher food costs and less disposable income'',commented Owen Killian. ''We remain focused on work-ing with our customers to manage input price inflation inan effective manner to maintain affordability without com-promising quality or service,'' he added. The company'sCEO said that at this early stage of the year, the company'sfull year consensus forecasts appear reasonable and 'ourstated earnings goals for 2013 are still attainable'.
NORWAY|BUSINESS
Qatar aluminium plant in full productionNorwegian aluminium producer Hydro has announcedthat the Qatalum aluminium plant in Qatar, a 50/50 jointventure between Qatar Petroleum and Hydro, hasachieved full production capacity, Norway Post reportedon 26 September. "This marks an important milestone inthe Qatalum history. From being in a ramp-up phase, theplant will now transfer into an operational phase. Qatalumwill be counted in the top league of the aluminium indus-try," said Hilde Merete Aasheim, head of Hydro's PrimaryMetal business area. Qatalum, which reached full produc-tion capacity on September 21, can produce 585,000 met-ric tonnes of high-quality primary metal per year from its704 cells. In addition to Qatalum's twin 1.2-kilometer-long potlines, the plant complex in the Mesaieed IndustrialCity outside Doha includes a carbon plant, port and stor-age facilities, as well as a captive power plant.
Iceland’s outstanding natural beauty, such as the Gullfoss or ‘Golden waterfall’ may be only abus ride away.| O Palsson
CROATIA · ALBANIA · SERBIA · BOSNIAPage 34|New Europe CANDIDATESOctober 2 - 8, 2011
BOSNIA | EU AFFAIRS
Bosnia may lose EU visa privilegesThe European Commission announced it is consideringcanceling Bosnia and Herzegovina’s visa-free privileges.The Commission has confirmed reports that citizens ofBosnia and Herzegovina, an EU hopeful for which Brus-sels lifted visa requirements in November 2010, could againbe subjected to the cumbersome procedure, due to the largenumber of asylum-seekers from this country. The EU coun-tries which have recently experienced increases in Bosnianasylum-seekers are Germany, Belgium, Sweden and Lux-embourg. Commissioner Cecilia Malmstrom sent a letterto the Ministers of the Interior from Serbia, Albania, Bosniaand Herzegovina, Montenegro and FYROM, asking forthem to inform the Commission on the practical measuresthey have put in place to address the increased number ofasylum seekers in EU member states. Malmstrom hopesthat the current situation will be addressed adequately andwithout delay and calls for the full support and engagementfrom Western Balkan countries in order to avoid that neg-ative developments endanger this otherwise successfulprocess. “The forthcoming Justice and Home Affairs EU-Western Balkans ministerial forum in Ohrid (3-4 October)will provide an opportunity to discuss the current situation,”Michele Cercone, Malmstrom's spokesperson said. Theshocking warning to the Bosnian authorities came from therecent EU-Western Balkans Ministerial Forum on Justiceand Home Affairs. The European Commission could rein-troduce visas for Bosnia-Herzegovina citizens due to theextremely high number of asylum seekers. Brussels is con-sidering all measures contained in the control mechanismfor the visa-free regime which were introduced right afterthe opening of European borders.
ALBANIA | ECONOMY
PM: Albanian economy staying clear of euro crisisPrime minister Sali Berisha said that after 20 years Albaniais among countries with the highest middle incomes, acountry with a functional democracy, rule of law, free speech,free elections and full respect of minorities' rights and ex-cellent religious tolerance. He made the speech while ad-dressing the 66th UN General Assembly in New York.Commenting on the world economic crisis, the premier saidthat Albanian economy remains one the fewest economiesnot affected by crisis, which did not register any recession.Noting the economic and social situation in the country,Berisha stressed that Albania fully backs Partnership for anOpen Government, initiated by US president, BarackObama and Brazilian President, Dilma Rousseff.
SERBIA | DIPLOMACY
Putin to visit SerbiaRussian prime minister and presidential candidate VladimirPutin is scheduled to visit Serbia for second time this yearon 22-23 October. Earlier the Russian premier visited Ser-bia on 23 March and met Serbian president Boris Tadic,the Serbian government and prime minister MirkoCvetkovic to discuss political and economic cooperation.The sources mentioned that Putin had presented to theSerbian government a list of local energy and infrastructureprojects and companies in which Russia has expressedstrong interest. As a result, there is a possibility that this issuemight be a topic at the upcoming meeting. Meantime, thePutin’s decision just seven months later to revisit Belgradetriggered surprise among leading Serbian officials. The visitshould be taken as part of his international activities aheadof the Russian parliamentary elections in December andpresidential elections in March, Danas writes.
Croatia a step closer to EU
Polish Prime Minister Donald Tuskrecently paid a visit to Zagreb to re-ceive the draft of the EU accessiontreaty with Croatia. After talks withCroatian premier, Jadranka Kosor,Tusk said that the draft of EU acces-sion treaty of Croatia will be signedin December paving the country’sway to become a full fledged mem-ber-state in 2013.
“When Croatia joins the EU, it isgoing to be an important influx ofoptimism and confidence for the fu-ture of the EU,” Tusk said.
The Croatian premier Kosor saidthat the draft of the EU accessiontreaty will enable the country toachieve its strategic and historic goal.Kosor went on to say that Croatiaalso needs to achieve a lot for its ownwelfare and not merely for the EU'sgood.
“Looking back, Croatia wentthrough many difficulties not experi-enced by other member countries.Croatia's delay … was of political na-ture, and it took quite an amount ofluck, wit and courage to sustain it,”political expert Vedran Obucina said.
SDP MP Tonino Picula suggestedthat Croatia should adhere to the re-forms strictly to avoid any unneces-sary sanctions after succession ashappened in Bulgaria.
“I think this is the indicator of thesituation we are in; but I am alsoquite sure and I hope that this publicarrogance and the indifference ispointed at the current government,not at the EU itself,” Picula said.
Picula noted that support forCroatia’s EU accession has declinedbut a majority of Croats still supportit.
However, Picula pointed out nocandidate country has been in a situ-ation like the one Croatia is currentlyfacing. During the final phase of EUaccession, the ruling party faced sev-eral controversies. For exampledeputy Prime Minister DamirPolancec was among the accused whowas alleged of misappropriations of€54 million from local food producerPodravka.
Following the scandal, the deputypremier resigned from his post. Tak-ing into account the upcoming De-cember vote, Picula said, Kosor hasthe same political destiny in this mo-ment as former prime minister IvicaRacan as both did very importanttasks on the EU front in the lastmonths of their mandates, and thenlost the parliamentary elections.
CROATIAEU AFFAIRS
Serbian Prime Minister Mirko Cvetkovic recently an-nounced that his country has fulfilled all requirements forbecoming an EU candidate country.
He was pleased to state that Serbia has made greatprogress in recent months in fulfilling the conditions of theAction Plan for obtaining EU candidate status. The premierstressed that Serbia has no influence on whether the EUmember states will set additional conditions in order to ac-cept its candidacy, but he is positive such a situation will nottake place.
After talks with EU officials, the premier said that gov-ernment has had a positive opinion regarding the EuropeanCommission on Serbia's candidacy.
Regarding the situation in Kosovo-Metohija, the primeminister underlined that the most important thing is that dis-puted issues be resolved peacefully and that the authorities inSerbia are willing to reach agreements. The premier said that
the citizens will never give up on its people in Kosovo-Meto-hija and called on citizens of the southern Serbian province toexpress their dissatisfaction in a peaceful way.
He expressed the will of his country to prevent crime andcorruption in Kosovo and also cooperate with the interna-tional community. The premier also made it clear that he hasno objection to EULEX taking control over administrativecheckpoints in accordance with the UN Resolution 1244.
Speaking about the adoption of laws on restitution andpublic property, the Prime Minister observed that a major-ity is in favour of these laws, but there is a possibility tochange the suggested solutions with some amendments. Theadoption of the laws on restitution and public property willbe a public step and is mere determination of the Serbianauthorities to remedy injustices and enable more efficientmanagement of public assets, rather than result of conditionset by EU.
Serbia close to becoming EU candidateSERBIA
EU AFFAIRS
Croatian Prime Minister Jadranka Kosor (R) shows a copy of the draft of the accession agreement between the European Union and Croatia
standing with her Polish counterpart Donald Tusk | EPA/Antonio Bat
Mark Lewis, the International Mon-etary Fund’s senior representative inTurkey, recently submitted the up-dated version of the World GlobalOutlook report. Lewis revised itsprojections for Turkey's economicgrowth from an earlier 6.5% to 7.5%after the country's growth figures inthe second quarter turned out higherexceeding IMF projection, Zamanreported. “The growth figure in sec-ond quarter outpaced our expecta-tions and therefore we had to reviseour projections,” Lewis said. IMFbased its revision based on many fac-tors, such as the macroeconomic en-vironment in a country, the inflationand the current account deficit(CAD).
The bank predicted that theTurkish economy will grow by 7.5%by the end of this year and will slowdown 2.5% by 2012. In an earlierreport, the IMF projected thatTurkey would grow by 6.5% and2.25 in 2011 and 2012, respectively.Since the Justice and DevelopmentParty (AK Party) regime, Turkeyhas made significant progress overthe last seven to eight years. Despitea contraction of 4.8% in 2009, thecountry clinched an 8.9% growth in2010, became the fastest growingcountry in the world with 11% in
this year's Q1 and achieved an 8.8%growth in the April-June period ofthis year.
Earlier in September, TurkishEconomy Minister Zafer Çaglayanhas said that Turkey's growth figurein the second quarter of the year isexpected to slow down to 8%, addingthat the annual growth expectationthis year will be around 7%. Onbeing asked whether the IMF ismaking a negative projection forTurkey's future growth figures,
Lewis said their growth expectationsshould not be seen as negative. TheIMF report states that the global rateof growth will fall to 4% both thisyear and in 2012.
The rate was 5% in the past year.Moreover, the report also under-lined that the average growth rate ofdeveloped economies would be1.6%, meaning that emerging coun-tries would be driving force behinda 4% growth figure by the end ofthis year.
TURKEY · FYROM · MONTENEGRONew Europe |Page 35CANDIDATES
October 2 - 8, 2011
FYROM|BUSINESSGreek businessmen express interest in FYROM firms Entrepreneurs from Chalkidiki, Greece recently attended abusiness forum at the Economic Chamber of FYROM. TheGreek entrepreneurs who made an attempt to establish directcontacts with FYROM firms, have expressed interest for co-operation with FYROM companies in the field of construc-tion, food industry, agriculture, textile, real estate, MRTOnlinereported. Speaking at the forum, Georgios Gilis, chairman ofthe Chalkidiki chamber of commerce said, “We believe thereis lots of room for cooperation and that is why we have 35 com-panies here today. We believe meetings with local companieswill yield good results. This is the goal of the two chambers.” Hemade it clear that Greek investors would not withdraw fromFYROM if the situation worsened in Greece, believing theywould overcome problems. “Greek export has risen in the re-cent period, and on the other hand the European bank says itwould continue to support Greek banks. Therefore, I believethere will be no problems in this regard,” Gilis said.
FYROM|ECONOMYGDP records 5.3% growth According to the State Agency for Statistics data released forthe second quarter, the FYROM economy witnessed GDPrecording growth of 5.3%. This is the second largest GDPincrease for FYROM amid a time when most countriesaround the globe are facing debt crisis. The biggest increaseever was recorded also in the second quarter, in 2008, whenthe GDP went up by 6.3%. In the first quarter, FYROM reg-istered 5.1% in the first quarter. Experts claimed that the trendwill continue if the country will surpass its expectations forthis year. IMF earlier this year predicted growth of FYROM'seconomy at a minimum of 3.5%.
MONTENEGRO|DIPLOMACYFinance minister meets IMF, World Bank officials A state delegation headed by Montenegro’s Finance Minis-ter Milorad Katnicis recently paid a visit to United States toparticipate in the regular annual session of the World Bankand International Monetary Fund IMF in Washington,Montenegro Times reported. A credit agreement was offi-cially inked in Washington which the World Bank approvedMontenegro in September. In addition to meetings with of-ficials from the World Bank and IMF, members of the del-egation meet with representatives of a large number offinancial institutions and investment funds (Deutsche Bank,Credit Suisse, HSBC, JP Morgan, BNP Paribas, UBS In-vest, Societe General). In addition, the delegation met envoysof the American administration (State Department), the of-ficial from the Ministry of finance said in a statement.
MONTENEGRO|TENDER Montenegro announces tender for lease of Lastavica The government of Montenegro recently invited experiencedinternational investors to participate for long-term lease of is-land Lastavica with fortress Mamula – Herceg Novi, Mon-tenegro times reported. The investors are required to havefinancial capacity and experience in the design, constructionand management of complex tourist facilities, interested inlong-term lease for a period of 30 years, with possibility of ex-tension up to 90 years of the tourist resort Lastavica. The po-sition of island Lastavica, together with the fortress Mamularequires the concept of an exclusive tourist resort, with ameni-ties for recreational activities and relaxation.
Turkish Economy Minister Zafer Caglayan speaks during a opening ceremony of the Istan-bul Finance Summit in Istanbul, Turkey on 28 September 2011. Turkey clinched an 8.9%growth in 2010, became the fastest growing country in the world with 11% in the first quar-ter of 2011 and achieved an 8.8% growth in the April-June period of 2011. |EPA/TOLGA BOZOGLU
Khalil bin Abdullah al Khonji, chairman of Oman Chamberof Commerce and Industry (OCCI), recently met in Mus-cat with Arshad Hurmuzlu, Turkish president's senior ad-viser for the Middle East affairs, Zaman reported. In thecourse of talks, both sides discussed bilateral co-operation andways to promote current relations between the two countriesin order to promote development and improve economic andcommercial sector in the Sultanate and Turkey. The sides arealso willing to cooperate in education, vocational training, ex-periment exchange in scientific and research sectors.
The OCCI chairman invited Turkish firms in the Sul-tanate and the Turkish private sector representatives to co-
operate in employing the Omani youth and providing themwith on-the-job training due to its significance in reinforcingthe labourer's capabilities and skills. Citing the deep and lat-est development of ties between the two countries, Al Khonjimentioned spoke on fostering the inter-trade and economicrelations.
The sides stressed the significance of activating the role ofthe Islamic Chamber for Commerce and Industry and thechambers of commerce to play more positive roles in terms ofboosting trade ties with Turkey. The chambers were consid-ered as a nexus between the Arab and Islamic markets andthe Turkish and European markets.
Oman, Turkey discuss trade, economic tiesTURKEYDIPLOMACY
Standard & Poor's Ratings Services recently raised upgraded itssenior unsecured and long-term local-currency sovereign ratingon the Republic of Turkey into investment grade territory. Thereason for the raise in the country’s local-currency ratings wasthe current improvements in the financial sectors and the deep-ening of local markets, reads a press release. The outlook is pos-itive. The one-notch upgrade, to triple-B-minus fromdouble-B-plus, lands the ratings on the lowest rung of invest-
ment grade territory and also increased stocks in Turkey. Therating agency said that adequate capitalisation in the Turkishbanking system entailed the upgrade. The ratings firm also notedthat government debt is now predominately denominated inTurkish lira and issued at fixed, nominal rates. The ratings onTurkey could increase if the country is able to curb its current ac-count deficits and slow domestic credit growth without hinder-ing its fiscal accounts or financial-sector stability, S&P said.
S&P increases Turkey's local-currency ratingsTURKEYECONOMY
IMF revises year-end growth projection to 7.5%
TURKEYECONOMY
UKRAINE · MOLDOVA · BELARUSPage 36 |New Europe NEIGHBOURHOODOctober 2 - 8, 2011
UKRAINE|EU AFFAIRSYanukovych to visit Brussels in OctoberUkrainian President Viktor Yanukovych will make a visit toBrussels in October. The meeting was scheduled during thepresident's meeting with European Council President Her-man Van Rompuy and European Commission President JoseManuel Barroso in Warsaw on 30 September. The meetingtook place at the office of the Polish premier, where on 30September a plenary session of the Eastern Partnership sum-mit took place. During a meeting with Yanukovych and VanRompuy expressed a positive evaluation of Ukraine's strivingfor European integration. He said that the EU is awaiting aUkraine-EU summit scheduled for December. According tothe president of the European Council, work on bilateral doc-uments should be finished by that time, so that Ukraine andthe EU could take their relations to a new level. He alsostressed the importance of further reform in Ukraine. In turn,Barroso said that he supports Ukraine's course towards Eu-ropean integration. He said Ukraine has an opportunity tobecome the first country of the Eastern Partnership project tosign an association agreement. Yanukovych said, "I highly ap-preciate this open, constructive dialogue between us and I amready to continue it."
BELARUS|EASTERN PARTNERSHIP Minsk turns back on EU summitafter crackdown criticism On 30 September, Belarus was squarely back in the spotlight onthe second day of the European Union's Eastern Partnershipsummit in Poland, after withdrawing from the event followingblistering criticism over its crackdown on opposition figures,Deutsche Presse-Agentur (dpa) reported. The Belarusian For-eign Ministry accused Brussels of "discrimination," saying thatsummit organizers had prevented senior members of its dele-gation from attending the Warsaw talks. But a spokesman forthe Polish EU presidency said that Belarus had made the de-cision to walk away on its own accord. "We regret that theregime decided to isolate the country's 10 million people fromfruitful European cooperation within the framework of theEastern Partnership," Konrad Niklewicz was quoted as sayingby the press. Polish Prime Minister Donald Tusk neverthelessoffered Belarus an olive branch as he welcomed leaders from theEU and its five other Eastern Partnership neighbours - Arme-nia, Azerbaijan, Georgia, Moldova and Ukraine - to the sum-mit's first plenary session. "There is a spot waiting for Belarus -symbolically today, but also a spot in the European family," Pol-ish Press Agency PAP quoted him as saying. Diplomats toldthe agency that the summit would now issue a separate decla-ration on Belarus, which would be harsher in light of the with-drawal. Earlier on 26 September, German Chancellor AngelaMerkel had described the Belarusian regime's handling of theopposition as "unacceptable."
MOLDOVA|DIPLOMACYMoldovan, Ukrainian parliamentspeakers sign agreementMoldova’s Acting President, Parliament Speaker MarianLupu and the Chairman of Ukraine’s ParliamentVolodymyr Lytvyn have broadened the consolidation andfosterage of the good friendship relations between Moldovaand Ukraine in all the fields of common interest Moldpressreported. The parliament speakers also exchanged opinionson the Transnistrian issue and signed an agreement of bi-lateral cooperation between the Moldovan parliament andthe Ukrainian Verkhovna Rada. In the context, Lytvyn ad-vocated the fosterage and consolidation of the bilateral po-litical, economic, scientific and cultural ties, mentioning theimportance of the inter-parliamentary cooperation in thisrespect and the need to develop joint projects.
On 29 September, EU EnergyCommissioner Gunther Oettingerassured Ukraine that it will continueto be the main transit route forRussian natural gas supplies to Eu-rope, and agreed to disburse $308million to upgrade its gas pipelinesystem. Meeting with UkrainianEnergy and Coal Industry MinisterYuriy Boyko to discuss the plans,Platts quoted Oettinger as sayingthat the money will be disbursed tomake sure modernisation of the sys-tem begins in 2012.
Ukraine will continue to be themost important country for transit ofRussian gas to the European Union,Oettinger said at a joint press confer-ence with Boyko. Oettinger said themoney will be discussed in detail thisweek at a meeting involving officialsof the World Bank, the EuropeanBank for Reconstruction and Devel-opment (EBRD), and the EuropeanInvestment Bank (EIB).
Russia has officially stated its inter-est of jointly developing Ukraine’s gastransportation system. However, Rus-sia wants to own at least 50% of theUkrainian pipes
Meanwhile, Ukraine is negotiatingwith Russia a lower gas price for theformer Soviet republic. Ukraine wantsa steep discount in the price it is pay-ing for Russian natural gas – to $230per 1,000 cubic metres from the cur-rent $355. Ukrainian President VictorYanukovych also wants his nation topursue a free-trade agreement withthe European Union, something thatwould preclude Ukraine joining aRussian-led Customs Union.
Russia, on the other hand, says
Ukraine is paying a fair market pricefor its natural gas and that further dis-counts would require Yanukovych toabandon the EU free trade hopes infavour of joining the Customs Unionwith Russia, Belarus and Kazakhstan.
Ukraine operates one of the world'slargest natural gas transportation sys-tems and is responsible for shipmentsof up to 80% of Russia's Europe-bound gas supplies. Ukraine earnsabout $2.7 billion annually from ren-dering gas transportation services toGazprom of Russia, but those earn-ings would come under threat if Rus-sia continues to build bypassingpipelines like Nord and South Stream.A price dispute between Russia andUkraine has led to disruption of EU-bound gas supplies twice before.
Yanukovych said he hopes to solveUkraine-Russia energy cooperationissues. At the beginning of a meetingwith Russian President DmitryMedvedev, Yanukovych stressed thatthere are a lot of questions that needto be addressed, among them theholding of the meeting of the Ukrain-ian-Russian Intergovernmental Com-mission.
In a statement on talks withMedvedev, and Russian Prime Min-ister Vladimir Putin at the presidentialresidence in Zavidovo of Russia’sTverskaya Oblast on 24 September,Yanukovych said "progress" was made.“During our talks, significant progresswas achieved which gives reason tohope that concrete results in the in-terests of both countries will beachieved in the near future,” he said.
Yanukovych was quoted as sayingduring the meeting with Medvedev
that important issues have piled upbetween Russia and Ukraine whichneed to be solved, starting with energyrelations. During the talks withMedvedev, Yanukovych stressed thatconstructive resolutions need to befound. “I do not hide that there is con-cern over the energy question, but Iam certain that in light of what wehave achieved in the last year and ahalf - stabilising bilateral economic re-lations and much more - that here wewill be right and constructive in solv-ing this issue," Yanukovych wasquoted as saying to Medvedev.
Ukraine and Russia have movedaway from an open confrontation andcontinue gas talks, but the Russiansare unlikely to jeopardize relations,member or Parliament from the pro-government Party of Regions factionVladimir Vecherko said on 28 Sep-tember. He opined that the leaders ofRussian and Ukraine do not want toaggravate relations between the twocountries, especially on the eve of elec-tions to the Russian Duma and theRussian presidential elections.
He also said that representatives ofthe two countries may soon turn tothe theme of diversification of gassupplies through Ukraine, as well asthe establishment of a gas consortium."The Ukrainian gas transport systemhas a throughput capacity of 240 bil-lion cubic metres of natural gas. Nei-ther North nor South Stream gas canreach such amount," he said.
In his opinion, Ukraine should es-tablish a joint management of its gastransportation system, which will in-clude representatives of the RussianFederation and the EU.
EU sees Ukraine gas transit role for years to come
UKRAINEENERGY
Ukrainian President Viktor Yanukovych, centre, meets with Polish Prime Minister Donald Tusk, left, and European Council President Herman VanRompuy prior to the official dinner at the Copernicus Science Centre in Warsaw, at the start of the two-day Eastern Partnership Summit, in Warsaw,Poland, 29 September 2011. |EPA/RADEK PIETRUSZKA
KAZAKHSTAN · TAJIKISTAN · TURKMENISTANNew Europe | Page 37NEIGHBOURHOOD
October 2 - 8, 2011
Tajik president Emomali Rahmon recently met with ToddSchneider, the head of the International Monetary Fund(IMF) mission.
During the meeting, both sides discussed issues related tobilateral cooperation between Tajikistan and the Fund as wellas coordination of activities of donor countries, Asia-Pluslearnt from the presidential press service. The sides werepleased with level of bilateral cooperation and development ofthe country’s economy despite the effect of the external factors,in particular rise in food and fuel prices. They were confidentthat Tajikistan’s economic growth this year would stand at noless than 6% and inflation will be curbed at satisfactory rate.This would be possible due to implementation of an efficienttax and monetary policy, the sides said in a statement.
At the conclusion of the visit, Schneider said, “Discussionswere productive and there was progress on the set of policiesand actions for the rest of 2011 and 2012.” The IMF envoysaid that Tajikistan’s economic recovery continues to take hold.Real GDP growth reached 6.9 % through the first half of2011. Rising remittances supported domestic trade and serv-
ices, but growth is also seen in agriculture, construction, and in-dustry. Inflation has been a significant challenge peaking at14.8 % in May but since declining moderately. He predictedthat real GDP growth should reach at least 6 % this year, par-ticularly if prices for key exports remain high, and regionalpartners continue to grow. Global food and fuel prices are ex-pected to stabilize in the coming year, but the mission wel-comes the authorities’ intention to carefully coordinate fiscaland monetary policies to protect macroeconomic stability.
Over the medium-term, the mission advises the authoritiesto develop and utilize targeted social programs to provide so-cial assistance to the poor. “Financial sector indicators havestabilized in recent months, but the mission urged the Na-tional Bank of Tajikistan to implement the Financial SectorStability Plan, aimed at addressing non-performing loans inthe banks, and to strengthen accounting and supervisory stan-dards. Over time, this should help to bolster public confidencein Tajikistan’s banks, create room for private sector credit, andthus help support economic growth and employment,” saidSchneider.
Tajik president, IMF mission head discuss cooperation issuesTAJIKISTANRELATIONS
President of Turkmenistan GurbangulyBerdimuhamedov met with CEO ofBoeing Commercial Airplanes JamesAlban in New York, Turkmenistan.rulearnt from the press service of the Turk-men government.
In the course of talks, the Turkmenhead said that the largest Americancompany has been renewing the civilaviation fleet of Turkmenistan over re-cent years. “Turkmenistan intends tocontinue replenishing its civil aviationfleet, purchasing modern aircrafts fromthe world's leading aircraft manufac-turer, which has an advanced experienceand newest technologies,” the Turkmenleader said.
He reaffirmed Turkmenistan's interestin continuing mutually beneficial coop-eration, one of the important aspects ofwhich is the sphere of services and train-ing of qualified professional personnel,including flight crews, technicians andflight attendants. The President notedthat the American company’s sound ex-perience is beneficial for Turkmenistan.Alban, in turn, expressed his "sincere ap-
preciation for the desire to continue ac-tive cooperation, stressing that Boeing isproud of reputation of a reliable andlong-term partner of Turkmenistan".
In an exchange of views on the stateand prospects of bilateral cooperation
the representative of Boeing manage-ment briefed the President of Turk-menistan on the pace of implementationof the agreements reached earlier, takinginto account comments and wishes ex-pressed by the head of Turkmenistan.
Turkmenistan to continue cooperation with Boeing
TURKMENISTAN AVIATION
Speaking at the sitting of the Nur Otanfraction, Kazakhstan’s prime ministerKarim Massimov said that the country’sGDP last year exceeded the combinedGDP of 4 Central Asia states twofold,Gazeta.kz reported. “In 2010 the na-tional GDP exceeded $148 billion, twicemore than the joint GDPs of the 4 Cen-
tral Asia states Uzbekistan, Turk-menistan, Tajikistan and Kyrgyzstan”,Massimov said.
He said that currently Kazakhstan ispositioned among middle income coun-tries such as Brazil, Malaysia and Turkey.The premier also recalled that externaldebt of the Kazakhstan’s banking sector
for the last three years had been reducedby almost $30 billion from $46 billion inDecember 2007 to $16.6 billion inMarch 2011. This year the list of permitsand licenses for business has been re-duced by 331 items as part of move toenhance the business climate, addedMassimov.
2010 GDP exceeds 4 Central Asia states twofoldKAZAKHSTAN FINANCE
KAZAKHSTAN|SPACE
Kazakhstan eager to join Belarusian-Russian orbital group of satellitesSpeaking at a recent meeting, Charge d'Affaires of the Repub-lic of Kazakhstan in the Republic of Belarus Farkhat Abdukha-lykov said that Kazakhstan is interested in joining theBelarusian-Russian orbital group of satellites, Gazeta.kz reported. Abdukhalykov said that cooperation in the space industry withinthe framework of the Customs Union is enticing for Belarus,Russia and Kazakhstan. “We have been cooperating, includingcooperation with Russia, in the space industry for a long time.We are interested in developing this partnership both with Russ-ian scientists and Belarusian ones in the future,” said Abdukha-lykov. It was reported that a Belarusian satellite will be insertedinto orbit together with a Russian one by the same booster rocket.Belarus will no longer have to buy space data collection and pro-cessing services from other countries. In the future Belarus andRussia plan to create a group of satellites that will be used for thebenefit of the Union State. Meantime, Russia and Kazakhstan areplanning to set up a joint air-defense system in the very near fu-ture, Col. Gen. Valery Gerasimov, deputy chief of the GeneralStaff of Russia's Armed Forces, said. “We already have such bi-lateral regional air-defense systems with Belarus and Armeniaand in future we are planning to build a similar air-defense sys-tem with Kazakhstan,” the senior Russian military official said. At present Kazakhstan's air-defense system is part of the inte-grated CIS air-defense system. A bilateral air-defense system withKazakhstan could be created "in the very near future," he added.
TAJIKISTAN|BUSINESS
EBRD supports enterprisesin TajikistanThe European bank for Reconstruction and Development re-cently announced a syndicated loan of up to $8 million to BankEskhata, the fifth largest bank in Tajikistan and enjoys a domi-nant position in terms of branch coverage and number of clientsin the North of the country, second largest and economically ac-tive region after capital. The loan is part of EBRD’s strategy tosupport the development of the market economy in Tajikistan,reads a press release. The loan will enable the Bank to support itsmaturing micro and small business customers and also to reachout to new clients in the emerging small and medium-sized busi-ness sector. The EBRD will provide $2 million of its own funds,with the remainder syndicated to FMO, the Dutch developmentbank, which is providing $5 million, and to Germany’s BANKIm Bistum Essen providing $1 million. Successful syndicationof the loan with commercial lenders will introduce the bank to theinternational financial market. It was reported that for the firsttime, the German bank BISTUM, a cooperative bank commit-ted to socially responsible lending, has invested in Tajikistan.
TURKMENISTAN|BUSINESS
Appraisal activity law to advanceTurkmen market relationsThe Majlis in Turkmenistan recently adopted a law “On appraisalactivity” which will act as a tool to foster development of marketrelations, and concretizes economic interests of business and gov-ernment through effective property management, Turk-menistan.ru reported. Maral Paltaeva, a member of the Turkmenparliamentary committee on economy and social policy, said thereason for adoption of the law and forming an institute of pro-fessional appraisal in the country is program of transfer to Inter-national Financial Reporting Standards, which is currently underimplementation. She said that a method of determining valuebased on costs of purchase, adopted in accounting, takes into ac-count only the initial costs and amortization charges, which comeunder generally accepted accounting principles. However, theproperty can have a market cost greater or less than the cost ofpurchase and correction for accumulated depreciation at any con-crete time.
They flew to Ashgabat. More Boeings to join fleet.|BOEING
IMF assesses Kyrgyz economy
UZBEKISTAN · AZERBAIJAN · KYRGYZSTANPage 38| New Europe
NEIGHBOURHOODOctober 2 - 8, 2011
An International Monetary Fund (IMF)mission has returned from a 7-21 Sep-tember trip to Kyrgyzstan with sugges-tions for the Kyrgyz economy. IMF teamleader Christian Beddis praised the Kyr-gyz economy for “recovering stronglyfrom the last year’s political turmoil andeconomic downturn,” according to anIMF statement. He predicted 7%growth in real GDP this year and notedBishkek’s adherence to “tight monetarypolicy.”
According to him, the IMF executiveboard approved a three-year programmefor Kyrgyzstan. “It is supported by theexpanded financing mechanism. Thetotal amount is about $106 million forthree-year period. The second trancheshould be $15mn. We expect to intro-duce the necessary documents for theExecutive Board at the end of November2011,” Beddis said. “Our mission havingworked over the past two weeks wel-comes the intention of Kyrgyzstan tocontinue tight credit policy, the restora-tion of safety in the area of macroeco-nomic policy and fiscal consolidation
namely the reduction of the budget inthe medium term. Deficit reduction overthe medium term will be supported by areasonable policy in the costs sphere, ad-ministration of tax policy. The authori-ties should continue targeted help inorder to promote economic growth,”Beddis said. “The mission also recom-mended to finish the banks reorganisa-
tion efficiently as well as monitoring andcontrol system-banks,” he said.
According to Beddis, the mission willcome back to Kyrgyzstan in February-March 2012 “to discuss the status of theprogramme to the end of December.” “Ifall the indicators are fulfilled, there willnot be any reasons not to give a positiveevaluation,” he stressed.
KYRGYZSTANECONOMYKYRGYZSTAN|HUMAN RIGHTS
UN: Otunbayeva to implement recommendationsThe head of Kyrgyzstan Roza Otunbayeva needs to im-plement the key recommendations made by the Kyr-gyzstan Inquiry Commission in regard to last year ethnicclashes in the southern Kyrgyzstan, UN Secretary Gen-eral Ban Ki-moon said in a statement. He stressed the sig-nificance of national reconciliation amid upcomingpresidential elections, Irinnrews.org reported. Ki-Moonencouraged the Kyrgyz authorities to implement the rec-ommendations contained in the report of the KyrgyzstanInquiry Commission and also expressed the willingness ofthe United Nations to offer its help, said a UN spokesper-son. During the presidential elections UN would continueto render wider assistance in stabilization efforts in Kyr-gyzstan, said Ki-Moon. The message also reads, “TheSecretary-General confirmed the commitment of the UNto provide technical assistance for the ballots, and he alsonoted the personal efforts of Otunbaeva to ensure that theelections are transparent and credible.”
AZERBAIJAN|ECONOMYIMF forecasts 7% GDP growth in 2012The International Monetary Fund (IMF) report on WorldEconomic Outlook September 2011 reads that IMF hasupdated forecasts for economic growth in Azerbaijan in2011-2012, Trend news agency reported. The latest fore-casts states that in late this year GDP growth will reach 0.2%in Azerbaijan. In 2012 GDP growth is forecasted at 7.1%and in 2016 at 2.3%. IMF predicted that in late this year in-flation in Azerbaijan will reach 9.3%, whereas earlier theFund forecast inflation for the current year was at 10.3%.IMF forecasts inflation for 2012 at 10.3% (7.5%), and in2016 at 5.4% (5%). According to IMF forecasts, inflation inDecember 2011 will amount to 11.2% compared to De-cember 2010, and 9.5% in 2012.The Fund’s estimates statesthat Azerbaijan will have a payment balance surplus of22.7% of GDP in late September, in 2012 at 19.3% and in2016 at 8.2%. Meantime, Asian Development Outlook Up-date for 2011 revised GDP growth and inflation expecta-tions for Azerbaijan in 2011 and 2012. The recent ADBreport shows that a 3% growth in GDP for Azerbaijan in2011 and 4.5% in 2012. ADB kept inflation forecasts forAzerbaijan unchanged, with 7.5% in 2011 and 7% in 2012.The Azerbaijani government revised nominal GDP growthforecast in the summer, increasing it from 40.197.3 billionmanat to 44.788.8 billion manat. Compared with the pre-vious year, the growth in 2011 is expected to reach 7.66%.Azerbaijan's GDP growth rates by the end of 2010amounted to five% and 7.9% the non-oil sector.
UZBEKISTAN|ENERGYADB backs electricity metering projectThe Asian Development Bank (ADB) recently an-nounced a loan of $150 million for an advanced electric-ity metering project in Uzbekistan. The government ofUzbekistan and Uzbekenergo will provide counterpartfunds of $50 million, Trend news agency reported. Over-all the project which amounts to $200 million is scheduledto complete by the end of 2014. The loan has a 25-yearterm with a grace period of five years and annual interestdetermined in accordance with ADB's LIBOR-basedlending facility. ADB will fund the installation of digitalsmart electricity meters for one million residential andsmall commercial power users in the cities of Bukhara, Jiz-zakh and Samarkand. The meters will operate using anautomated management system that will allow the utilitycompany to reduce power losses and increase revenues.
The World Bank and Azerbaijan recently inked a loan agree-ment on Capital Markets Modernisation Project (CMMP).This is the 52th World Bank project in the history of Azer-baijan which is financed by the World Bank and the State Sec-retariat for Economic Relations of Switzerland (SECO).
The SECO grant is designed for technical supportwithin CMMP. SECO’s assistance will be aimed at ac-complishment of capital market’s legislative and regula-tory base, tackling of shortages and contradictions, workon development of the market’s infrastructural architec-ture. For implementation of the grant programme theSECO is to sign the management agreement with theWorld Bank. During the signing ceremony, State Securi-ties Committee of Azerbaijan Chairman Rufat Aslanlisaid that CMMP is meant for technical, information andorganizational support for implementation of the securi-
ties market development program adopted this year, Trendnews agency reported.
Aslani stressed that ongoing reforms in the sector, affectinglegislation, infrastructure and management practices aimed tocurb operating and transaction costs in the stock market.CMMP supports development of management and clearingand settlement infrastructure of modern capital markets, im-proved access to capital markets, raising awareness of enter-prises and potential investors about the tools of various capitalmarkets and strengthening the potential of the State SecuritiesCommittee (SSC). CMMP is designed to support medium-term growth of the private sector by providing opportunities forsustainable and alternative financing, thereby contributing tothe first challenge of Country Partnership Strategy (CPS),adopted by the World Bank on Azerbaijan for 2011-14 -strengthening the non-oil economy.
World Bank, Baku ink agreement on capital marketsAZERBAIJANLOAN
During a recent visit to Tashkent, Chi-nese top legislator Wu Bangguo had ameeting with president of the UzbekSenate Ilgizar Sabirov, Uzbekreport.comreported. Wu visited Uzbekistan upon theinvitation of Sobirov and the speaker ofParliament Legislative ChamberDilorom Tashmukhamedova. Wu, chair-man of the NPC Standing Committeesaid that NPC is ready to maintain high-level visits and friendly exchanges withthe parliament of Uzbekistan and supporteach other on major issues concerningcore interests to contribute to nation-to-nation relations. Wu called on the legisla-tures of the two countries to speed up the
approval of agreements to facilitate coop-eration on large projects related to energy,minerals and high technology. Hestressed that it would benefit both coun-tries if they exchange experience on howto promote economic development andsecure social harmony, and take more ef-fective legislative measures to improve theinvestment environment and protect thelegal rights of enterprises and people. Healso called on the two sides to enhancecoordination within multilateral parlia-mentary organizations to play their con-structive role in helping boostcomprehensive cooperation within theframework of the Shanghai Cooperation
Organisation. For his part, Sabirov said Uzbekistan re-
garded China as an honest ally and an im-portant cooperative partner. He expressedhis country’s willingness to cooperate withChina in such areas as politics, and workwith China to combat the "three forces" tosafeguard regional security. During themeeting the sides mulled the developmentof bilateral cooperation in various spheres,including politics, trade, economics, andculture. They particularly noted the coop-eration between two countries' parlia-ments, on the basis of legal agreementsachieved during the meeting of the twocountries' heads.
Tashkent, Beijing agree on closer parliamentary exchangesUZBEKISTANDIPLOMACY
A local Kyrgyz woman washing linen and clothes near her house, in the village of Shalta, 30 km southfrom Bishkek, Kyrgyzstan, 13 September 2011. The Kyrgyz economy recovered strongly from the lastyear’s political turmoil and economic downturn, the IMF said. |EPA/IGOR KOVALENKO
RUSSIA · GEORGIA · ARMENIANew Europe |Page 39NEIGHBOURHOOD
October 2 - 8, 2011
Russia's Prime Minister Vladimir Putinwill likely return to power as presidentnext year after President DmitryMedvedev nominated him on 24 Sep-tember as the ruling political party's can-didate for the March 2012 presidentialelections. The announcement signalledMedvedev's willingness to step downafter a single term in office, and to yieldleadership to Putin, who served twoterms as president 2000-08 but wasbarred from running again in 2008 dueto term limits.
The move ended speculation aboutthe country's likely next leader. “It is nogreat surprise. Putin has given plenty ofclues that he intends returning to thepresidency in 2012,” Chris Weafer, chiefstrategist at Moscow’s Troika Dialogue,wrote in an e-mailed note to investors.“The concept of a lame-duck presidency,i.e. for the remainder of the Medvedevterm, is not relevant. It is clear that Putinhas continued calling the shots since heformally left office in May 2008. The
reason for making the announcement soearly is to shift the focus in the Dumaelection from United Russia to aplebiscite on Putin. Given United Rus-sia's failing popularity and the real risk ofa very low voter turnout, making theelection a trial run for the presidentialvote offers the party the best chance ofretaining its current share of Dumaseats,” Weafer wrote. “There will not bea return to the government style andagenda priorities of the previous Putinadministration. That simply is not an op-tion. It is clear that the current economicmodel, i.e. reliance on oil wealth, cannotsustain growth in economy. To achievethe targeted 5.0%-5.5% growth Russiawill need to attract a significantly largervolume of investment and the involve-ment of foreign investors,” Weafer wrote.“I expect Putin will establish a very pro-business and pro-reform cabinet.
Membership of the WTO is a prior-ity. I do not expect any market reaction tothe news - investors are more concerned
about global events and the weakeningoil price,” Weafer wrote.
Medvedev's nomination of Putin trig-gered sharp criticism from Russia's op-position, which condemned theproposed power swap as an anti-reformmove that will lead to economic stagna-tion. After the March elections, Russia'snext president will serve six years insteadof the previous four-year terms, under aconstitutional change. Boris Nemtsov,deputy prime minister in the late 1990s,condemned the move as a "horror sce-nario." "Putin returns and everyone elseleaves. Foreign capital will flee, and peo-ple will emigrate," he said.
Putin said Medvedev should leadUnited Russia's party list for parliamen-tary elections scheduled on 4 December.If, as is considered highly likely by Russ-ian political observers, United Russiawere to win the 4 December elections,Medvedev would almost certainly takethe job of prime minister, replacingPutin.
Russia's Prime Minister Vladimir Putin, left, and President Dmitry Medvedev greet United Russia party members at the XIIth United Russia Party Con-gress in Moscow, Russia, 24 September 2011. Putin becomes the next presidential candidate of the United Russia party, Medvedev announced at the con-gress. |EPA/YEKATERINA SHTUKINA/RIA NOVOSTI/KREMLIN POOL
RUSSIAPOLITICS GEORGIA|DIPLOMACY
Tbilisi, Tehran to expand co-operation On the sidelines of the 66th UN General Assembly session,Georgian Foreign Ministers Grigol Vashadze and his Iran-ian counterpart Ali Akbar Salehi discussed the willingnessof both countries to expand mutual cooperation in all fields,Civil Georgia reported. The sides explored avenues for ex-pansion of bilateral ties. Citing age old ties between the twocountries, Salehi said that the current level of cooperationdoes not reflect the real potential of both sides adding it isnecessary to identify and mobilise the possibilities and takethe existing opportunities. In turn, Vashadze said he also waspleased with the growing ties between Tehran and Tbilisi.He called on both sides to further enhance the bilateral re-lations to a new level up through activating the two coun-tries' cooperation.
GEORGIA|EU AFFAIRSEU-Georgia free trade talks to begin soonEU and Georgia made a great headway in identifying thelast remaining steps in order to be able to soon start negoti-ations on deep and comprehensive free trade agreement(DCFTA), Gunnar Wiegand, a senior official from the Eu-ropean External Action Service in charge of Russia, EasternPartnership, Central Asia and regional cooperation, said aftera session of Georgia-EU cooperation committee in Tbilisi,Civil Georgia reported. The EU official said that EU andGeorgia will start talks on free trade area if Georgia takes allpre-requisites required for launch of these negotiations. Thedate of talks is not finalised yet but the parties plan to startnegotiations before the end of the year. Georgia’s Ambassa-dor to the EU Salome Samadashvili said earlier in Septem-ber that free trade talks with EU would start before the endof this year. After meeting with Polish Prime Minister Don-ald Tusk, Georgian President Saakashvili said that Georgiawas expecting “a serious breakthrough” this autumn on itspath of European integration. Tusk, whose country nowholds EU’s rotating presidency, said that Moldova andGeorgia made a significant progress in recent years.
ARMENIA|EU AFFAIRSEU calls on Yerevan to work on visa facilitationRaul de Luzenberger, head of the EU Delegation in Yere-van, recently called on the Armenian authorities to adoptconcrete measures to address European Union concernsabout illegal migration. Such a move will help Armenia tosecure less stringent visa requirements for Armenians trav-elling to EU, added the senior European diplomat, Arme-nia Liberty.org reported. Armenia is entitled to signing a visafacilitation agreement with the EU as part of its involvementin the latter’s Eastern Partnership programme for six formerSoviet republics. The agreement would enable Armenia tohelp EU immigration authorities expedite the repatriation ofArmenian illegal immigrants.
ARMENIA|ECONOMYGovernment reports faster growthDuring a weekly session of his cabinet, Armenian PrimeMinister Tigran Sarkisian recently announced that eco-nomic growth in Armenia has accelerated in recent monthsand is expected to reach a target rate of 4.6 % projected bythe authorities in Yerevan. The statistical data released by thegovernment showed that the country’s Gross DomesticProduct increasing by only 1.2 % year on year for the firstquarter of this year.
Putin nominated as president
Former deputy prime minister and finance minister Alexei Ku-drin said on 27 September that his resignation a day earlier wasnot spontaneous and acknowledged that it was directly linkedto the weekend announcement by Russian Prime MinisterVladimir Putin and President Dmitry Medvedev that theywould swap jobs next year. Kudrin's resignation on 26 Sep-tember followed a televised spat with Medvedev in whichMedvedev called on Kudrin to resign because the latter criti-cised Medvedev's policies in public. The two have a long-run-ning disagreement over government spending priorities. “Inconnection with the numerous commentaries about my resig-nation, I would like to clarify the following. My statement
about how I do not see myself in the Cabinet of 2012 (after theelections) was well-thought out and considered. First, over thecourse of several months, despite my numerous objections, in-cluding public ones, decisions were made in budget policy thatwithout doubt raise the risks to the budget. And risks to thebudget linked most of all to inflated appropriations for defenceand the social sector would inevitably spread to the entire na-tional economy,” Kudrin’s statement read.
“Second, on 24 September, the structure of the authoritiesin our country was determined for the long term. And I alsomade my determination, explaining my position. Emotions hadabsolutely nothing to do with this.
RUSSIAPOLITICS
Kudrin resigns following spat with Medvedev
