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New Europe Print Edition Issue 997

New Europe Print Edition Issue 997

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Published by: New Europe Newspaper on Sep 09, 2012
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19thYear of Publication | Number 997 | 9 - 15 September, 2012 | € 3.50
Russian gas monopoly Gazprom said it wasready “to co-operate in good faith with theEuropean Commission” and to proceed with a constructive dialogue after the EU’sexecutive launched a competition probe intoits gas sales. However, Gazprom warnedthat the investigation should “duly respect”its legal rights and legitimate interests, not-ing that Gazprom is registered outside the jurisdiction of the EU. On September 4, theCommission said it opened a formal inves-tigation into Gazprom on concerns the nat-ural gas giant is hindering competition inCentral and Eastern European gas markets,in breach of EU antitrust rules. The Commission said in a press releasethat it’s investigating three suspected anti-competitive practices in Central andEastern Europe. The investigation will focuson Gazprom’s dealings in Bulgaria, theCzech Republic, Slovakia, Poland, Estonia,Lithuania, Latvia and Hungary, which wereonce under Soviet control and are now EU-members but still depend on their formermaster for gas supplies.Konstantin Simonov, head of Russia'sNational Energy Security Fund (NESF) inMoscow, told New Europe on 4 Septemberthat he thinks the EU probe is politically motivated decision. He added that the latestEU probe into Gazprom will increase themisunderstanding between the EU andRussia “and the gap between our positions will be more and more serious”. “[RussianPresident Vladimir] Putin is thinking thatall ideas and all steps of the European Unionare anti-Russian ... And that is why Putin will try to react.”Following the meeting of the GoverningCouncil of the European Central Bank on6 September 2012 at its premises inFrankfurt am Main, Germany, MarioDraghi President of the ECB announcedthe decision to allow unlimited buying of bonds , a weight to be shifted to condition-ality on actions form the Member Statesand that marketable debt instrumentsdenominated in currencies other than theeuro, namely the US dollar, the pound ster-ling and the Japanese yen, and issued andheld in the euro area, are eligible to be usedas collateral in Eurosystem credit operationsuntil further notice. The series of measures unveiled by thePresident of the European Central Bank seem to have struck a positive cord, in whatEconomic Think Tanks such as Bruegelhave termed, a third time lucky approachtowards stability in the Euro. The measures mostly refer to ECB bondbuying in the secondary markets followingthe bank’s latest Governing Council meet-ing, that he hopes will safeguard the Euroand reduce borrowing costs across theEurozone. The transactions will be knows as theOutright Monetary Transactions (OMTs), where the conditions will be attached to theEuropean Financial Stability Facility (EFSF) or European Stability Mechanism(ESM) programme. This will take the form of a fullEFSF/ESM adjustment strategy, or a pre-cautionary programme where the purchaseson primary markets would be considered.Member states who are currently under-going macroeconomic adjustment may alsobe considered for OMT’s if they are lookingto re-enter the bond markets.In a bid to increase transparency there will be a weekly publication of the aggre-gate OMT’s and their market values, inaddition to a monthly report on theaverage duration of the OMT’s hold-ings, with a breakdown of those holdingsin each euro area country.Although it has yet to be clarified whether OMT’s will accept the same legalfooting as private bond creditors, withrespect to bonds being issues by Eurzonecountries, it is also unconfirmed when theEurosystem intends to make this clear.In the press conference Draghi confirmedthat there were no decisions made by theGoverning Council on further LTRO’s, anddeclined to say whether it was under con-sideration to buy Spanish banks’ debt orcorporate debts, but invited the IMF to takepart in the OMT scheme.
Markets rally on the back of ECB announcement 
EU Gazprom probe threatens ties
· Pages 2, 4
 Third Time's a Charm
 The European Commission ispreparing to release an addi-tional €50million in humani-tarian funding to help Syriancivilians caught up in theircountry's crisis...
·Page 3·Page 12
 The ICT solutionsprovider Huawei signed apartnership with Intel Cor-poration at the CloudCongress in Shanghai on5 September...
·Page 19
 Just before the world marksthe eleventh anniversary onthe 9/11 atrocities, New Europe interviewed a for-mer Guantanamo prisoner...
·Page 11
Russian President VladimirPutin said APEC states should work together to address thechallenge of supporting sustain-able growth by promotinginnovation...
·Page 31
European Central Bank President Mario Draghi said the ECB's purchases of bonds from debt-stricken and struggling countries could be unlimited. |
Ahead of one of the most importantpublic holidays, the Day of Unification commemorated on 6September, the Bulgarian govern-ment decided at its meeting on 5September to give a new meaning toits relations with the neighbourcountries.
Bulgaria re-examinesrelations
·Page 24
Inner reflection
Page 18
"I'm sorry about the mess, Mr Samaras often does than when he comes for talks."|
In May 1997, Ivan Kostov was elected as Bulgaria's President, after a mass protests took place against Bulgarian SocialistParty's government which had led the country to hyperinflation and a complete crisis, and those protests ultimately led tothe fall of the government. This became the country's first post-communist government to serve its full 4-year term.He iscredited with turning around his country's fortunes, starting sustainable economic growth, and establishing a path towardsBulgaria's complete integration with the West. Under his government, long-delayed economic reforms were carried out,including privatization of state-owned enterprises was carried on a large scale and the country started long-sought acces-sion talks with the European Union. However, there were serious allegations of massive mismanagement and corruption.A number of major enterprises were sold out apiece under the label of "privatization", and all of them eventually bank-rupted. Capital stocks of state companies were deformed by government officials, while their equipment was sold.
It's conditionality, stupid
Europe's problems have apparently been solved, Mario Draghi theillustrious President of the European Institution based inFrankfurt that is the European Central Bank has officially declared that Euro bonds can now be bought in unlimited quan-tities and this will be the key for the road to recovery. It may justbe the saving grace Europe needed.On the same day as his announcement, the markets rallied, thecurrency rose and positive statements were the only course of the day.Draghi did not fail to also state that his outlook was downwardand that the situation remained at low growth and high inflationbut that 2013 could be different, further details on that press con-ference and wider repercussion are on page 4 by our correspondentPeter Taberner, including Draghi's persisting phrase that “theECB would go to all costs to ensure the stability of the Euro.” This was a week of hard figures, the Eurostat indicators releasedshowed a first estimate for the second quarter of 2012, where theEuropean Union of 27 Member States showed a current accountsurplus of €4.6 billion, a €32.5 billion surplus on trade in services.European Commission President Jose Manuel Barroso said that,"The logic of integration cannot be only economic. Bankingunion requires a single European supervisor for the Euro area.Further economic union, too, requires supervision of the memberstates' economic policies, joint supervision. It is therefore logicalbut also right and just that there is further political or institution-al integration as well."Calling for a tighter and more democratic political unionPresident Barroso stressed the pertinence of a Banking Union andthe accountability this required.On the 12th this month President Barroso said he would be pre-senting his “proposal for a single supervisor on the Euro area.""We must end this vicious circle when rescuing banks weakensthe governments' budgets while increasing risk-averse banksstop lending to businesses and that can undermine the econo-my further.""The single banking supervisory mechanism does not require a Treaty change and should be in place by January 2013."On an upbeat note from the world markets due to this shift fromthe ECB, a mixed figure came from the US economy whichadded 96,000 jobs in August according to the U.S. Bureau of Labor Statistics, a figure lower than expected however unemploy-ment did drop to 8.1% from 8.3%.In Strasbourg this week President Barroso is expected to focus on ways to tackle the Eurozone crisis and to advocate an ambitiouslong-run EU budget for growth and as far as the Banking Unionis concerned, MEPs will quiz Commissioner Michel Barnier onhis banking union plans.European economic think tank Bruegel's senior research fellow Andre Sapir commented on 7 September that the word of the day  was “conditionality”, going back to the essence of the matter on what Member States implement or not is the key for futuregrowth.Ever looking for a closer political, Fiscal Union and conditionali-ty from the Member States was a repetitive cry from Jean Claude Trichet, the former President of the European Central Bank, whostated in an op-ed last week that what was necessary was theestablishment of “a eurozone finance ministry … responsible foractivating economic and fiscal federation when and where neces-sary, and for managing new crisis-management tools like theEuropean Stability Mechanism..Also be responsible for oversee-ing the banking union, and it would represent the eurozone in allinternational financial institutions and informal groupings.But, most important, “federation by exception” would ultimately cease to be an exception. The finance minister would be a mem-ber of the EU’s future executive branch, together with the otherministers responsible for other federal departments.From this perspective, the Commission presages a futureEuropean democratic government, as German Finance Minister Wolfgang Schäuble, who has proposed instituting an elected pres-ident, has suggested. The Council, meanwhile, appears to antici-pate the European Parliament’s future upper house, with the lowerhouse already elected by all EU citizens.More Federation to come? Is that the only answer for the Euronow?
Cillian Donnellycdonnelly@neurope.eu
Kostis Geropoulos (Energy & Russian Affairs)kgeropoulos@neurope.eu Andy Carling (EU Affairs)acarling@neurope.euIvan Delibasic (EU Affairs)idelibasic@neurope.eu Ariti Alamanou (Legal Affairs)aalamanou@neurope.euLouise Kissa (Fashion)lkissa@neurope.eu Alexandra Coronakis (Columnist)acoronaki@neurope.eu
 Alexandros Koronakisakoronakis@neurope.eu
Suman Haquesuman@neurope.eu
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New Europe
all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic or otherwise, without the permission of New Europe.
ISSN number: 1106-8299
9 - 15 September, 2012
 The European Commission ispreparing to release an additional €50million in humanitarian funding tohelp Syrian civilians caught up intheir country's crisis. This will bringthe Commission's total contributionto €119 million. The release of the funds will beginas soon as the European Parliamentand the Council have approved thedecision a news item from the EUNeighbourhood Info Point releasedon 7 September said. According to the Commission'spress release this would bring the as-sistance from the European Com-mission and Member States to €200million - roughly half of all interna-tional humanitarian aid to the crisis. This puts the European Union in aclear lead in responding to the UN'scall for more funding."The humanitarian situation inSyria is worsening almost daily now that the hostilities have slipped intocivil war. There are already tens of thousands of Syrian refugees inLebanon, Jordan, Turkey and Iraq. This calls for massive and effectivehumanitarian aid to reach those inurgent need of medical supplies anditems such as baby food. This is why  we are stepping up our assistance inthis desperate situation”, said Com-missioner Kristalina Georgieva, re-sponsible for Humanitarian Aid,Civil Protection and Crisis Re-sponse, said: . The Commissioneralso called once more on all partiesto the conflict to respect the lives of innocent civilians caught up in thefighting through no fault of theirown. The latest contribution from theEU will cover health care for the wounded or those in need of emer-gency treatment, basic healthcareservices, shelter, food, water, sanita-tion and household items for boththe displaced within Syria and therefugees abroad. The target benefici-aries include more than 1.5 millionpeople in Syria and a large propor-tion of the almost 200,000 Syrians who have fled to Jordan, Lebanon, Turkey and Iraq. Assistance will alsobe provided to some 500,000 Pales-tinian refugees and another 87,000Iraqi refugees who live in Syria. The funding will be channelledthrough the European Commis-sion's humanitarian partners includ-ing UN agencies, the Red Cross/RedCrescent family and non-govern-mental organisations.On the same day as the Commis-sioner's decision it was reported thatFrance had decided to send direct aidto Syria's opposition representing ahuge break break for the rebels fol-lowing months of hesitation from Western powers to become involved.Fears of the weapons not falling inthe right hands and a commonstance of non participation had pre- vailed till now.Reports showed that France's aid was going to three regions in the last week where the controlling power was deemed unsteady or lost.Peter Maurer, president of theInternational Committee of theRed Cross (ICRC), returnedfrom Syria on the same date of 7September following a three-day  visit during which he held talks with the Syrian president, Basharal-Assad, and the ministers of foreign affairs, the interior, healthand national reconciliation. Mau-rer also visited areas affected by the fighting in Rural Damascusto witness at first hand how civil-ians are coping in a context of ex-treme violence."I was shocked by the immensedestruction of infrastructure andhomes in several areas I visited inMu’dhamiya, Qaboun and Harasta. And I was deeply moved by the sto-ries of distraught children who losttheir parents in the fighting," saidMaurer. "I visited several medicalposts in Rural Damascus and wasalarmed by the situation there.Health workers face tremendous dif-ficulties in performing their duties.Many men, women and children who could be saved are dying on adaily basis because they lack access tomedical care. Volunteers of the Syr-ian Arab Red Crescent continue toshow admirable courage as they carry out their life-saving work in ex-tremely difficult conditions. Health-care facilities and workers must beprotected.""Since the conflict erupted therehave been many casualties, and now the situation is rapidly deterioratingeven further," he said. "President al- Assad agreed on the necessity of ur-gently boosting humanitarian aid by making it easier to bring in goodsthat would enable us to step up ouractivities and adequately respond tothe needs that have been growing with gathering speed.""I also discussed with Presidental-Assad our outstanding request to visit all persons detained in Syria inconnection with the current events– persons held in all facilities, in-cluding those managed by the secu-rity authorities and those used forinterrogation. President al-Assadexpressed his readiness to addressthis issue," said the ICRC presi-dent. "Since March 2011, tens of thousands of people have been de-tained in the country. Their basicrights must be upheld and they must be able to get in touch withtheir families.""The positive commitments I re-ceived during my meetings will obvi-ously have to be followed up andtested in the coming weeks," said MrMaurer. "Each day that passes bringsmore casualties and human suffering.I will personally pay the closest at-tention to how the outcome of ourdiscussions materializes on theground.""The rules of international hu-manitarian law must be adhered toby all parties to the conflict to avoidcivilian loss of life," he said. "It is theresponsibility of the parties to pro-tect civilians in their conduct of hostilities." The ICRC is also in regular con-tact with opposition groups in Syriaand abroad to share its concerns anddiscuss issues relating to compliance with international humanitarian law and to the protection of civilians anddetainees. The continuing daily counts of  wounded and fleeing have been con-tinuing since the situation heated uplast October, non authenticated re-ports talk of Ministers of Syria meet-ing in Turkey to form new strategiesto overthrow Assad, the numbers of Refugees has surpassed that of 200,000 in surrounding countries of  Jordan, Turkey, Lebanon and as far as Algeria. At the time of going to print a nexplosion had been reported by Al Jazeera news at a large mosque inDamascus, figures not yet released onhow many people may have been in- jured.European Foreign Ministers havesent a message chastising the UnitedNations Security Council late 7 Sep-tember as they arrive in Cyprus for aForeign Affairs meeting for not up-holding a more uniform approachand the continuous lack of changefrom the Russian and Chinese mem-bers who will not acquiesce to an in-tervention on the ground."Can we let a civil war take holdindefinitely because some countriesare exercising their veto right in theSecurity Council?" Belgian ForeignMinister Didier Reynders added.
Commission to release further €50 million in Syria aid
By Alia Papageorgiou
9 - 15 September, 2012
EU commissioner for International Cooperation, Humanitarian Aid and Crisis Response Kristalina Georgieva gives a press conference on on the latest developments in the EuropeanCommission's humanitarian assistance to Syria on September 7, 2012 at the EU Headquarters in Brussels.
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