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New Europe Print Edition Issue 1023

New Europe Print Edition Issue 1023

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New Europe Print Edition Issue 1023
New Europe Print Edition Issue 1023

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Published by: New Europe Newspaper on Mar 24, 2013
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07/10/2013

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th
Yr oPublictionnumbr 102324 - 30 mrch, 20133.50
t
s ws  wk  pd s sps     w xpsd s z d s s d s d ss.t ss sd   y s 16 m , w dzdd sd s d  d   d  sv cyps’ ks. t cyp Psd, ns ssds d, d  w y v,  sd  G y,  vd   s sds. s dw s d  dskd   d,  p  vs.by s  ks, p ss, d  dy pp  v  6.75%   svs   d  ssdd   s   u, y wdd   svs w s,  ks d swds,   s ds   p.t z ds d d €10   d cyps sd €5.8  d  wss  s  ws    ks ss.xps d yss d  wd w sd  s s s, d €6 , dd     k. d wd, ks ,   sqky  dpy s  ps  p ds, w wdy dd y  sds.i  sy   bsss    ws ds d sk s sqs   ssvs.i vss  k  sy, ’s wys b, dsp v d  €371.86 . W  b k psd€100  ws qky d. Wy? bs, b s    u. Sd s ’ss q  vs   tk,  wd y q  s  jy. b, y s wd y   s ds wy  ss d   s  u pys, w vsds   s    ss.S, w’ sw   s   s  p,  w’ sw Wb Ys w,   w d,   w?
Dalligate: key witness lied
Cypriot empoyees of the Laiki (Popular) Bank take part in a protest outsidethe Parliament on 21March, 2013 in Nicosia.|
AFP PHOTO PATRICK BAZ
t u’s d dy, ol, s dy d  ky py   D  sk  s  sy ss    sspd     ss,dsp kw   ky wss d    w s dD wd  €60  py   s   u’s dv.t wss, Gy Ky, d      vs,d   psv  Swdsm,        sy.
Te ticking clock...
 J D s v sd y w s, dsp  d  sx   ps  w wsss d d ds psy psss. s pssd,  dd vs  vs  ss s y xpds d s. J D’s s  d  v  ss d.h s  d  ‘y’  s k. ricPage 14conomY Page 10 
D’ k    ss k d dss
Page 32Page 06
s: ssssy u k sd‘p zs’cpsd ppvcyps, rssd ks s usds f
ruSSi Page 31bnKinG union Page 05PnSionS Page 04buSinSS Page 07
 Things fall apart 
 
02
ANALYSIS
NEW EUROPE
www.neurope.eu
24 - 30 March, 2013
Australia$3.4,AustriaEURO1.81,BalkansEURO4,BelgiumEURO3.50,HollandEURO2.69,CentralAsiaUSD7.5,CentralEuropeUSD5,Canada$5,Denmark:DKK19,95,EasternEuropeUSD7.5,FranceEURO3.04,GermanyEURO3.57,GreeceEURO4,HungaryHUF400,JapanY900,ItalyEURO3.62,Nordiccoun- triesUSD7,PacificRimUSD8.5,RussiaUSD4,SwiterlandSFr4,UKGBP4.5,USA$2.95,allothercountriesEURO6
DovesflyinginIraq
USPresidentGeorgeW.Bushseemsprettyisolatedontheissueofthe"nextday"inIraqoncethewarisover.
(editorial p. 2)
DearProfessor
Fulltextoftheletterfrom3MEPstoECPresidentRomanoProdi.
 p. 3
EUhand forpost-war Iraq
TheEUandtheUSmustworktogeth-ertoprovidehumanitarianrelieftoIraqiciviliansandrebuildthecountrypost-Saddam,atopvisitingUSofficialsaidinBrussels.
 p. 5
Olympichospitality
Withtheoccasionofthe2004OlympicGames,thehotelmapofAthenshasradicallychangedtoensurethatthecapitalcitywillbeabletodealwiththe waveofOlympicvisitors.
 p. 11
Congressbacksresolutiontalks
SeventeenmembersoftheUSCon-gresshavecalledontheUSadministra-tiontouseallavailablepoliticalanddiplomaticmeanstopersuadeTurkeytoworkconstructivelytoresolvetheCyprusquestioninamannerconsistent withtheUNprocess.
 p. 24
Croatia-UStiesokay
CroatianPrimeMinisterIvicaRacan wasrecentlyinvolvedintalksconcerningthelatestinternationaleventswithUS Ambassador to Croatia LawrenceRossin. Racan noted that relationsremainedonafriendlybasisdespitecer-taindisagreementthatexistespeciallyinthecaseoftheIraqcrisis.
 p. 41
EU mulls actionfor the day after
NOTEBOOK 
 The ombudsman,guarantor oftransparency 
Outgoing European Ombudsman JacobSoderman presented hisAnnual Report for2002 to theCommitteeon Petitionsof theEuropean Parliament last week. The report givesan overview oftheombuds- man'sbusiest yearto dateand highlightstheresultsachieved forEUcitizens. Thisisthelast report bySoderman, asNiki- forosDiamanduroswill takeoverthe post. TheEuropean Parliament elected Diamanturos to this position unani- mously and his prestige will thus be strengthened. So everybodyexpectsa lot fromhim. It iscertain that thenew ombudsman will work to servethecomplaintsand peti-tions of the European citizens. New Europebelievesthat theinstitution ofthe ombudsman can serveasa guarantorof  good conduct oftheEUapparatusand Diamanturoswill certainlywork towardsthisdirection too. It isinteresting to notethat thenumberof  citizens' complaintsexceeded forthefirsttimethebenchmark numberof2,000 in 2002. Complaintssent via theInternet roseat an exceptional paceand account now foralmost halfofthetotal. The ombudsman opened moreinquiriesin 2002 than everbefore(up by8 percent compared to 2001)and handled them beforetheend oftheyear. All but four inquirieshad been closed within theone- yeartarget. Muchwasachieved forEuro- pean citizensin 2002.Theombudsman can exert strongerpres- sureon all European institutionsand makeclearto everybodythat itspowers will beexercised to thefullest. TheEC and theCouncil should understand they haveto work underfull transparencyand considerthecitizens' complaints. The ombudsman must continue to apply pressureon theEUinstitutionsto imple- ment theCharterofFundamental Rights.
TT
hewarisonandthedimen-sionoftheemerginghuman-itariancrisisisalreadybeingcalculatedbyvariousaidagencies.AlthoughtheUnitedStates wenttowaronlywithahandfulofallies,thedomesticpressureonBritishPrimeMinisterTonyBlairisalreadyevidentashehasjoinedthedovesinWashingtontopressureUSPresidentGeorgeW.Bushnottofurtheralienatetheinterna-tionalcommunity.ThetopUSofficialsarealreadycourtingtheEuropeanUnionsupportforapost-SaddamorderinBaghdad.ButitisstillnotclearhowmuchofthatsupportisforpoliticalequationstosetupthenewregimeorjusttoopentheEUmoneycoffersinthenameof humanitarianaid.ThebestquoteonthesubjectcamefromAnnaDiamantopoulou,thesoft-spokenEuropeancommissionerforSocialAffairs:"TheUSfights,Europefeeds."WhileattendingasessionwiththeForeignPressAssociationof Greece,thecommissionerwasanswer-ingaquestionfromNewEuropeabouttheCatch-22situationofEuropeanciti-zensnotwantingawarandthenpayingtorebuildthedamages.FrenchPresidentJacquesChiracrecentlysetthetonesaying,"Francewillnotacceptaresolutiontolegitimisemil-itaryinterventionandgivethebelliger-ents-theUnitedStatesandBritain-therighttoadministerIraq,"addingwryly,"Wearecurrentlydestroyinganddonotknowwhatwewillhavetoreconstruct."
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New Europe
Serbianpolice turna new leaf 
SerbiaactedswiftlywithanironhandtotrackdownthekillersofPrimeMinisterZoranDjindjicresultinginfinallyclaimingthatthepolicedefi-nitelyhadtheweapon,whichfiredtheshotsthatkilledDjind- jic.Ballisticexpertsconfirmed"beyonddoubt"thattheHeck-lerandKochsniperriflefoundburiedinNewBelgradewasthemurderweapon,theInteri-orMinistrysaidinastatement. AtopofficeroftheSerbianpolicespecialoperationsunit(JSO),ZvezdanJovanovic,38, wasarrestedwhenthegovern-mentorderedJSOtodisband.Theunitwasformedin1991bySerbianstatesecurity.Thegov-ernmentproclaimedastateof emergencyimmediatelyafterthekillingandallowedpoliceexpandedauthoritytoinvesti-gateanddetainsuspectsbehindlockeddoors.Themassivecrackdownoncrimeapparent-lyunearthedplentyofevidenceprovingthenexusbetweenJSO,mafiabosses,politicians, judiciaryofficialsandevencelebrities.Forthewar-tornBalkanscaughtinthewebof corruptionthesuccessfulcrack-downissomethingnewandishailedasanewstepintherightdirection.
 Anidyllic setup ofthe American dream
US steps up efforts to open EU purse strings
Russia to pressure USto honour oil contractsin post-war Iraq
ussia has vowed to defend the interests of its oilcompanies suffering damage from the Iraq war.Unlike many foreign oil companies, Russian oil companiesare already suffering direct damage from the Iraq war,Russian Deputy Prime Minister Viktor Khristenko said."Surely, in this context, we should do everything possi-ble to defend Russian oil companies' interests," Khris-tenko said. But this is an issue for the future, as theseefforts are now being hampered by the "roar of bombs andthunder of rockets," he added. Many Russian companieshave evacuated their personnel from the Persian Gulf after the start of attacks on Iraq and Russian tankersoperating in the area have also been recommended not toapproach Iraq's seaports in the near future. The head of  YUKOS, one of Russia's biggest oil companies, has saidthat Russia would have to negotiate business in Iraq withthe regime that emerges there after the military operationhas finished. Russia will have to negotiate involvement inthe restoration of Iraqi oil fields.
(p. 47)
 TheShootingGallery
Basically, I’m for anything that gets you through the night - be it prayer, tranquilizers or a bottle of Jack Daniels. - Frank Sinatra |
 AFPPHOTOJOHN THYS
MANAGING EdItor
Alia Papageorgioualia@neurope.eu
SENIor EdItorIAl tEAM
ostis Geropoulos(Energy & Russian Affairs)kgeropoulos@neurope.euCillian Donnelly (EU Affairs)cdonnelly@neurope.euAndy Carling (EU Affairs)acarling@neurope.euAriti Alamanou (Legal Affairs)aalamanou@neurope.euLouise Kissa (Fashion)lkissa@neurope.euAlexandra Coronakis (Columnist)acoronaki@neurope.eu
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 Alexandros Koronakisakoronakis@neurope.eu
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 After the Iraq war began, thoughts finally turned to winning the peace. Steadfast Bush ally, Tony Blair was trying to reposition himself as a humanitarian, but it was becoming clear that Europe, which failedto offer much in the way of troops, was expected tohelp with clearing up the mess afterwards. This wassummed up by then Social Affairs commissioner, Anna Diamantopoulou as „US fights, EU feeds.France‘s President Chirac said he wouldn‘t accepta resolution that allowed the „belligerents“ UK andUS to administer Iraq. Moscow, meanwhile, wasconcerned about its oil contracts in Iraq.The US was also concerned about peace... in Cyprus, where Congressmen were asking Turkey to resolvethe divided island peacefully, and without noticingthe irony, through the UN.
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The Eurogroup has a communications problem. At least according to Jeroen Dijsselbloem,the president of the Eurogroup – the member go- vernments of the single currency, who told a meeting of the EuropeanParliament’s economic and finance committee on 21 March that thegroup had fudged, if only from a public relations point of view, the hand-ling of the Cyrus bailout affair.Those Cypriot citizens on the ground, the ones who have been frozen outfrom accessing money from their banks accounts owing to a stalemate inthe political process – that is, the negotiations between Cyprus and theEuropean Union – may not feel so acquiescent in the official explanation.The financial establishment, fearing a run on the banks, has shut-down.Likewise businesses dealing in credit cards, such as petrol stations, whofear that they may not be guaranteed the money, leading to the situationof Cyprus being a cash-only economy.There has been lots of scrambling around, both before and afterDijsselbloem’s appearance before the committee, an obligation he has toface in his capacity as head of the Eurozone, which happened to be co-in-cidentally complicated by the recent deal between international creditorsand Cyprus, which said that the EU, ECB and IMF would provide around€10 billion to prop-up the economy, if the Cypriot government stumped-up around €6 billion. They decided to do this by raiding bank accounts.Initial reports were that it was an imposed necessity of being given fi-nancial help by international creditors, organisations dominated by Ger-many. Wolgang Schaüble, the German finance minister, denied such anaccusation, saying that it was not a centrally-mandated imposition, andthat the precise terms of the bailout agreement, which necessitated thatthe Cypriot government stumped-up about €6 billion of their own. Therejection of the bailout terms by the parliament, on was therefore, a re- jection of domestic policy, not an EU, federally-imposed, policy. The twosides, with Russia looking eagerly on from the sidelines, have decided tocome to another arrangement.The Eurogroup president admitted that the panic spread in the press, so-cial media and elsewhere, was the result of bleary-eyed negotiations in theearly hours of 16 March, a meeting which followed on from the Springsummit, in which EU leaders gathered the discuss the Cypriot economiccrisis, as well ans other pressing issues. The communication people, ap-parently driven by a kind of narcoleptic autopilot, didn’t quite explain the work of the group.This wasn’t to suggest that the story wasn’t largely true, and that the ci-tizens wouldn’t have to shell out of their own hard-earned cash reserves, but that, it wasn’t the fault of the dreaded EU. Amid all the other problems brought about by the crisis, communicationmay seem to be a diminished issue; but increasingly proper communica-tion is a massive part of decision making, from wearing the right kind of shirt in public to verbal nuances. In serious situations, like those increa-singly dominating the Eurozone, it is essential; a word out of place canlead to all sorts of panic, which, in turn leads to panic upon panic.Members of the European Parliament have been quietly murmuring,suggesting that the questionable, possibly non-transparent deals, madeat 6AM, are undermining faith in EU decision-making. At a time whenarguments against the Union are increasing, largely in reaction to fiscalpolicies imposed by the central powers on national governments, theremay be a legitimate reason t alter the way things are done at the top level.No more all-nighters, maybe; after all, clearer heads prevail.
Panic in the streets
 
03
ANALYSIS
NEW EUROPE
www.neurope.eu
24 - 30 March, 2013
The introduction of a levy on savings depo-sited in Cyprus does not represent a threat tothe savings deposit guarantee scheme in Euro-pe, the head of the Eurogroup, Jeroen Dijssel- bloem has said.Speaking in the European Parliament on 21March, Dijsselbloem said that the one-off tax on savings more akin to a wealth tax rather thana scheme to undermine existing legislation.His comments come after the Cypriot parlia-ment rejected the terms of a bailout deal frominternational creditors that would have seen ci-tizens face a one-off tax on their savings. Rene- wed discussions are now under way as to pos-sible alternative levy charges, such as allowingthose with under €20,000 in savings being im-mune from the tax. According to Dijsselbloem,the Eurogroup is of the opinion that “big andsmall depositors should be treated different-ly,” suggesting a larger levy on deposits over€100,000 than the original 9.9%.Banks in Cyprus are currently closed, as wor-ries remain about a bank run, while speculationremains about a possible exit from the singlecurrency, similar to previous speculation aboutGreece.Dijsselbloem said that it is very important froma Eurogroup to have “fair burden-sharing”from the Cypriot side. This, he said, is the mainreason that the levy has been placed on all bank accounts, both for residents and non-residents,and that there should be “a larger share forlarger depositors, rather than smaller ones.”Russia, currently, has a lot of money tied-up inthe island, and has loaned Cyprus €2.5 billion,although this may increased; something Dijs-selbloem says the Russian government has toldEU leaders it will not do, but the loan could still be extended, or interest rates lowered.Under the terms of the bailout, Cyprus is toreceive €10 billion form the European Union,European Central Bank and International Mo-netary Fund, with around €6 billion to raisedfrom the Cypriot side. In return, the country isto introduce structural reforms, privatisationefforts and is expected to curb its public debt.There are, says Dijsselbloem, “very exceptio-nal circumstances” in Cyprus that have lead tothe bailout. The financial sector, specifically,he says, “needs to be downsized”. However, hesays, “we must not lose sight of the gaol to havestrong inclusive growth that preserves the Eu-ropean social model.”He told members of the parliament’s economicand monetary affairs committee that the EU“must allow Cyprus to make a restart on a su-stainable path,” although, more ominously, hesaid that in the current climate, budget cuts are“unavoidable.”Despite the current financial crisis, and the pro- blems in Cyprus and other troubled Eurozoneeconomies, he said that the single currency isstill at the heart of EU thinking, with Latviadue to become the latest member of the Euro-zone in 2014. The euro “is a relevant and attrac-tive prospect for the European Union,” he said. Authorities work on ‘plan B’ as European Cen-tral Bank closes the net and citizens feel thesqueezeThe prospect of a bank levy for bank de-positors in Cyprus remains on the cards, afterlegislators have been desperately trying to re-draw the terms of the EU-imposed bailout.Parliamentarians rejected the originaldeal agreed with Eurozone leaders in the ear-ly hours of 16 March, which would have seeninternational creditors lend Cyprus around€10 billion to assist its troubled bankingsector, on condition that the island came up with another €5.8 billion. The shortfall wasproposed to be made-up through a levy on bank savings of 6.75% on deposits under€100,000 and 9.9% on those over €100,000.One of the fears was that this violated exi-sting bank savings guaranteed under EU law, anallegation dismissed by Eurogroup president, Jeroen Dijsselbloem, when he appeared beforethe European Parliament on 21 March, sayingit was instead more representative of a one-off  wealth tax, which will not spread to other Eu-rozone economies as part of a concerted policy.Time, however, is against Cyprus, as theEuropean Central bank, one of the internatio-nal creditors along with the European Unionand International Monetary Fund, have giventhe authorities until 25 March to come to adecision, leading to speculation of an exit fromthe single currency.On 22 March, it was announced that theGreek Piraeus Bank would buy-up the Greek- based units of the Bank of Cyprus and LaikiBank. Reform of the Cypriot banking sector, which is alleged to be a haven for money-laun-dering, is key to the terms imposed by the cre-ditors.Following the parliamentary rejection,Finance Minister, Michalis Sarris, travelled toMoscow to discuss a possible deal with Russia, which has key financial interests in the country,and which has already loaned Cyprus €2.5 bil-lion. However, Sarris returned on 21 March ha- ving failed to reach a deal, either an extension of the loan, a lowering of interest rates or, crucial-ly, more money. That same day, Dijsselbloemtold the European Parliament that this last opti-on was off the table.The following day, speakingalongside European Commission President Jose Manuel Barroso on 22 March at the con-clusion of the EU-Russia summit in Moscow,Russian prime minister, Dmitri Medvedev saidthat his country “fully supports the euro area,”and that it “wants to see it stable.” As the authorities atempt to work thingsout, reports continue to suggest that banks may not be open again until 26 March. They haveremained shut during the crisis over fears of arun on the bank as panicking customers havedescended on branches countrywide to securetheir savings, leaving Cyprus operating as acash-run economy.
CD
By Cillian Donnelly 
Employees of Cyprus Laiki (Popular) Bank gather outside the parliament in Nicosia during a protest on 22 March. Cyprus is locked in “hard negotiations” with a troika of lenders to save the eurozonemember’s banking system and economy in general from ruin. |
AFP PHOTO/PATRICK BAZ
Cyprus on the edge
Eurogroup chief: Cyprus bank levy no threat to EU savings

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