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New Europe Print Edition Issue 1032

New Europe Print Edition Issue 1032

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New Europe Print Edition Issue 1032
New Europe Print Edition Issue 1032

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Published by: New Europe Newspaper on May 26, 2013
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21
st
Year of Publicationnumber 103226 maY - June 1, 20133.50
 W 
hen Sweden enteredthe European Unionin 1995, one of thesine qua non conditions was toget derogation from the ban, validall over Europe, on snus tobacco. When the services of Commis-sioner John Dalli were working onthe Tobacco Products Directive,the Commissioner was approached by Swedish interests to lift the banon snus tobacco but the Commis-sioner stubbornly refused.From the correspondencepublished on page 32, the Direc-tor General of the Department of  John Dalli (SANCO), the Secre-tary General of the Commissionand the Director General of theLegal Service appear to have hada meeting, where the Commissionagreed to modify the Tobacco Di-rective to the lift the ban on snus,5 weeks before the dismissal of the Commissioner and the relatedcorrespondence was disclosed toselected recipients but not to theCommissioner (although fully incharge), nor to his Cabinet.Last Thursday, New Europe hassent the correspondence in ques-tion to the Secretary General andasked (a) to confirm the authentic-ity of the message, and, (b) to re-lease the attachments mentioned inthe correspondence.Next morning, the Berlaymontacknowledged receipt of the re-quest, informed New Europe that would reply concerning the docu-ments request within 15 days, butkept silent with regards to the au-thenticity of the document.The beauty of the exercise is thatif John Dalli, on 16 October, 2012 would have surrendered and hadsigned the resignation that Jose Bar-roso ordered, nothing would havehappened afterwards as the Com-mission would have lifted the snus ban, to the total satisfaction of theSwedish friends, and the innocent John Dalli would have disappeared,humiliated in Malta. His refusal to walk away was the “black swan. which turned the course of eventsupside down.
The black swan effect.|
EPA/RONALD WITTEK
 Todor Zhivkov Resurrected
 W 
hat exactly is happening withthe pensions of the staff inthe European institutions? And, mostimportantly, what is going to happenin the future? The creation of theEU institutions established a pensionfund for its employees into which thecontributions of both staff and mem- ber states were placed. However, withthe accession of the United Kingdomto the European Union this fund dis-appeared. The UK convinced the Eu-ropean Council that the EU budgetshould include pension contributionson the part of administrative expens-es. Thus, the amount already accumu-lated in the previous pension fund wastransferred to the EU budget. Thishappened to all the amounts receivedfrom the member states from previ-ous pension contributions, for staff that choose to transfer them to theirEU pension scheme. As the numberof staff in the institutions increased, sodid their personal contributions, and,supposedly, the contributions of themember states.However, in the last decade, aprogressive increase in staff recruit-ment during the 1980s has led tothe retired and, subsequently, therequired amount for pensions in cur-rent expenditure, which constantly increases. Today, this accounts for al-most 50% of administrative expenses,and is counted to several billion eurosper year. In addition, the Neil Kin-nock reforms of 2004 changed re-cruitment, working conditions, andsalary conditions drastically for newly recruited staff. As a result, their pen-sion contributions, as a percentage of their now (inferior) salaries are lessthan before. In parallel, the adminis-trative expenses of the budget relatedto pensions, are constantly increasing.
BULGARIA Page 09
 When DalliIgnored Barroso
 More on page 32
EDITORIAL
 A 
s the European socio-polit-ical crisis deepens and themiddle-class is depleting,citizens and young politicians all overthe continent are demonising people,issues and situations for real or evenimaginary, big or small transgressions.One of the situations that willsooner or later come under the mi-croscope of public anger is the ap-parently “privileged relationship”of certain quarters of the EuropeanCommission with the ocean-goingshipping industry.During the years, special relations between the Commission services andshipowner associations and individualshipping magnates have developed.This practice has led to special habits,rather favorable to shipowners andconsequently not fair to the rest of us.For the third consecutive five- year term, the Directorate General forTransport maintains in the same sen-sitive post of Director of Maritime,the person that the representatives of the London based shipping commu-nity (mostly Greeks and Cypriots),have publicly requested. This is unac-ceptable and may become shamefulif the good Director is promoted toDirector General in the same Direc-torate General!The European Commission hasexcluded the maritime industry fromthe payment of any carbon dioxide tax until the year 2050! The less intelligent,trucks, cars, aircrafts and land-basedfactories they are already regulated andpay for the pollution they create. When a land-based factory pol-lutes for any reason, it pays for dam-ages until the last cent, as insuranceobligation is unlimited. According tothe International Maritime Organisa-tion Convention the pollution limitper accident used to be half a billionEuro but under public pressure, it wasdoubled. Yet it is a technical lie, as theIMO has not means to enforce it andthe European Commission, whichhas the enforcement means, does nottranspose (since 2003) the new Con- vention in to Community law, despitethe sad experience of ecological disas-ters of Erika in France and Prestige inSpain. In this way, shipowners, thanksto their good contacts in the Commis-sion, pay significantly less insurancepremiums and every body is happy.Nice arrangement! We look with greatinterest at this “privileged relationshipas we cannot explain why the Presi-dent of the European Commission Jose Barroso himself, who dismissedan honest Commissioner based on“circumstantial” evidence (which laterproved false), sees no “circumstantialevidence,” in this “privileged relation-ship,” which concerns billions of lossesfor the Community budget and, mostimportantly, the loss of faith of half a billion citizens in “project Europe,” onthis path the European Union is head-ing to collapse.
 
It's time to clean the sea
The phone-tapping scandal in Bul-garia that involved the previousgovernment of Boyko Borisov, and,in particular, the former interiorminister, Tsvetan Tsvetanov, was brought to the attention of Brus-sels after the President of the Party of European Socialists (PES) andleader of the Bulgarian Socialist Par-ty, Sergei Stanishev, along with thepresident of the Progressive Allianceof Socialists and Democrats (S&D)group in the European Parliament,Hannes Swoboda, urged the Euro-pean Commission to intervene inthe scandal.The commission, some claim un-der the influence of the Bulgariancommissioner, others claim underpressures from the centre-right Eu-ropean People’s Party (EPP), havedone nothing so far.The civil liberties committee in theEuropean Parliament, however,decided on 7 May to raise the issueat political levels as phone-tappingis a practice that recalls the politi-cal culture in Bulgaria under TodorZhivkov. see page 9
 What next for EU pension funds?
 
02
ANALYSIS
NEW EUROPE
www.neurope.eu
26 May - June 1, 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,SwitzerlandSFr4,UKGBP4.5,USA$2.95,allothercountriesEURO6
 Amilestonein relations
TheEuropeanCouncilandtheEU-West-ernBalkansSummitofThessaloniki,whichtookplaceonJune19-20andJune21,respectively,markedanimportantstepintherelationshipbetweentheEuropeanUnionandtheWesternBalkancountries(Albania;BosniaandHerzegovina;Croat-ia;theformerYugoslavRepublicofMace-donia;andSerbiaandMontenegro).
 editorialp.2
 Alookbackin history
ThehistoryofthefirstcontemporaryOlympicGamesin1896stillremainsanunknownchapterforthemajority.FewpeopleactuallyknowtheGreeks'activitiesduringthosetimes.
 p.11
EconomicreformsOK 
ChancellorGerhardSchroeder'sGreenscoalitionpartnerapprovedagovernmentreformpackageaimedatrevivingthestag-nanteconomy.Morethan90percentof 700delegatesataGreenscongressvotedinfavouroftheeconomicliberalisationplans whicharenowexpectedtobeapprovedbyparliamentlaterthisyear.
 p.14
Postcardfrom Spain
Imagineacountryestateplacedintheheartofamajormetropolis.Thiscountryestateiswithinwalkingdistancetosomeof theworld'stopmuseumsandrestaurants.ItisclosetosomeofthebestshoppingMadridhastooffer...
 p.21
Iran under duressabout nuke arms
NOTEBOOK 
Eurozone in structural trade surplus
The first estimate for Eurozone tradewith the rest of the world was a 3.0 bil-lion Euro surplus in April compared to4.6 billion Euro in the same month of last year. Exports, seasonally adjusted,increased by 1.6 percent compared to March 2003, while imports decreased by1.2 percent. It wasn't very long ago that this newspa- per advocated that the parity of Eurowith the dollar would change in favour  of the single currency. Our main argu- ment for this forecast was that Euro rep- resents an economy -- the strongest export machine of the world and the Eurozone -- that was and will remain a surplus trade area in the foreseeable future.Conversely the dollar altogether sits on huge deficits. The federal budget has been operating in the red for decades and the total amount of the US fiscal deficit carries so many zeros it is impos- sible to read it without rubbernecking.The same is true for the US State Depart- ment, of which nobody knows the exact figure. With respect to the trade gap, it is so huge that it can be sustained only bythe country that controls the machinewhich prints legal dollars and dollar  bonds. This arrangement could not con-tinue, however. Then came the war in Iraq. But if the United States faces in theimmediate future insurmountable politi-cal and military impediments in its questto exploit the Iraqi oil reserves, the weak- ness of the dollar will continue.On the other side of the Atlantic the Eurozone is a well oiled exporting  machine in goods and services; this despite its huge energy deficit thatincreased to 32.1 billion Euro in the first quarter of 2003 compared to 26.4 billion Euro in the same period of last year.
EE
uropeanUnionleaders warnedIranoveritsnuclearfuelprogrammeandcalledonTeherantoopennuclearfacilitiestointernationalinspections.Leadersofthe15EuropeanUnionnations,inadraftstatement,underlinedsupportfortheInternationalAtomicEnergyAgency(IAEA)toconductacomprehensiveexaminationofIraniannuclearplants."TheEuropeanCouncil...expressesseriousconcernatsomeaspectsoftheIranianprogramme,inparticularasregardstheclosingofthenuclearfuelcycle,especiallytheuraniumcentrifuge,"saidthestatement.TheEUcalledonIrantocooperatewiththeIAEAandto"unconditionally"sign,ratifyandimple-mentandadditionalprotocoltoitsSafe-guardsAgreement.EUleadersunder-linedtheywouldcontinuetocloselymon-itornotonlyIraniannucleardevelop-mentsbutalsohumanrightsincludingthehandlingofrecentdemonstrations."Progressinthesemattersandstrength-eneddialogueandcooperationareinter-dependent,essentialandmutuallyrein-forcingelementsofEU-Iranrelations,"thestatementconcluded.EarlierGreekForeignMinisterGeorgePapandreousaid,"BoththeUnit-edStatesandEuropeseetheneedforcleartransparency...althoughthisisnotafact,wewouldnotwanttoseethedevel-opmentofnuclearweapons."TheIAEAhadcalledonIrantocon-tinueitstransparencyregardingitsnuclearobjectives.StressingthatallegationsaboutTeheran'snuclearambitionsareyettobeproved,IAEAheadMohamedElBaradeisaidatameetingoftheVienna-basedIAEA:"Thejuryisstillout."
 p.3
www.new-europe.info11
th
Year,Number526
T
HE
E
UROPEAN
W
EEKLY
June22-28,2003
New Europe
EU remainsunaccountable!
The European citizen orhis elected representative,the member of EuropeanParliament, still has noidea of how, where, whenand by whom the hard-earned taxpayers' money isspent or misspent. The EU,however, has been doing alot of lip service aboutreforms with emphasis ontransparency to rebuild thereputation, which nose-dived after the crisis of theSanter Commission.But despite all the forward-looking statements, amedia blitz of events andpromises being churnedout day after day, the actu-al answers that a commonEuropean citizen gets isbleak, translucent andintentionally misleading.In an eye-opening account,comprised of a dialogue intwo letters between aBritish European citizen, achartered accountant,qualified to carry the weight of what he is sayingand a British MEP, electedto serve the interests of European citizens, NewEurope lets the readersdecide for themselves howfar (or how little) thepromises of transparency inthe European Union havecome.
 p. 3
 
“Hear my roar” 
 EU warns Iran on nuclear fuel programme, backs inspections
Dnipropetrovsk,keyfor Ukraine-EU ties
 A 
presentation of the Dnipropetrovsk region will beheld in Brussels on June 26. Last November, theinternational conference "Agenda 2004: Europeanintegration of Ukraine" provoked certain Europeanpublic interest and we have an opportunity to contin-ue talks at a new level, which is more objective andopen as it should be between good neighbours,Dnipropetrovsk regional state administration headMykola Shvets said.This approach fully corresponds to the Ukrainianvision of implementation of the concept "Wider Europe- Neighbourhood" outlined Ukrainian PresidentLeonid Kuchma, in his recent speech at the Eurocon-ference in Athens. He emphasised its great importancefor extension of a stable area of wealth, Shvets said."Declaring today that Dnipropetrovsk region isopenforcooperationwiththeworldwecanconfidently statethatitisoneofthemostpowerfulregionsof Ukrainewhichisattractiveforinvestorsfromeconom-icpointofview,"hesaid,addingthattheregionisrichinresourcesandhasadvancedspacetechnology.
 p. 35
NewEuropebylines
VictorKalnyk
 onUkraineseeksnewforeigninvestmentopportunities,p.34
 AthanasePapandropoulos
 onThedemiseofthe dollarandtheriseofEuro,p.9
 TheShootingGallery
Denmark is revealed to be behind Obama’s new Drone policy |
AFP PHOTO/Emmanuel Dunand
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
dIrEctor
 Alexandros Koronakisakoronakis@neurope.eu
ExEcutIvE lAyout producEr
Suman Haquesuman@neurope.eu
SubScrIptIoNS & dIStrIbutIoN
subscriptions@neurope.euSubscriptions are available worldwide
INdEpENdENcE
New Europe is a privately ownedindependent publication, and is notsubsidised or financed in any wayby any EU institution or other entity.
bruSSElS hEAdquArtErS
Av. de Tervuren/Tervurenlaan 96,1040 Brussels, Belgium Tel. +32 2 5390039Fax +32 2 5390339info@neurope.eu
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ExtErNAl coNtrIbutIoNS
SignedContributionsexpresssolelytheviewsofthewritersanddonotnecessarily reflecttheopinionofthenewspaper.NEis printedonrecycledpaper.
© 2013 New Europe all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any formby any means, electronic or otherwise, without express permission. The Publishers accept no liability for third party views published, nor damage caused by reading, viewing or using our content. All information is correct at the time of going to print, we accept no liabilities for consequent changes.
   N   E   W    E   U   R   O   P   E
    I    S    S    N    N    u    m    b    e    r   :    1    1    0    6  -    8    2    9    9
 A decade ago, EU leaders got tough with Iran,over their nuclear programme and demanded co-operation, transparency, inspections and so on.The International Atomic Energy Authority gently reminded that the allegations of a secret weaponsprogramme were, so far, only allegations. The issuestill rumbles on today. We were raising the issue of financial accountabil-ity of the EU and the Eurozone had good news -remember that far back - as imports were down,exports up and there was a trade surplus of €3 bil-lion. This was down, by €1.6 billion on the previ-ous year, but, who was complaining?But there was talk of the Euro surpassing the Dol-lar, so something was different a decade ago.
 n e  1 0  Y e A  R  S  A GO
M
M
The European Union is clamping down on tax fraud; evasion, ha- vens, “aggressive tax planning” and the like. It is all dependent, of course; dependent on finalising an agreement with Switzerlandand others outside the EU, dependent on Luxembourg openingup its secretive banking system, and dependent on the G8 andG20, without them they can be no global standard, a prized goalof European Commission president, Jose Manuel Barroso.It makes sense for the EU to go after tax evaders; corporate cheatsare perhaps the only class of people deemed lower than Europe-an politicians right now. However, despite optimism and stateddetermination to clamp down on tax fraud, when leaders met inBrussels on 22 May, somewhat unsurprisingly nothing concrete was decided, just a vague promise to have it all worked out by theend of the year.It is estimated that around €1 trillion of public money is lost toEurope each year. According to a newly published report by de- velopment NGO Oxfam there currently exists about €14 trillionstashed in tax havens worldwide, enough for twice the requiredmoney needed to lift every person above the level of “extremepoverty,” those living on less than $1.25 a day. About two-thirds of this offshore wealth (€9.5 trillion) is hiddenin EU-related tax havens, such as Luxembourg (already, like Cy-prus, under the watchful eye of the US) and Malta. The UK, withtax havens in the Channel Islands, the Isle of Man and elsewhere,accounts for half the European share. Countries like Andorra,Lichtenstein and Switzerland continue to facilitate tax evasion(although they are moving to eradicate this through a new deal with the EU). Ireland has been identified by the US Congress asa country that aids corporate tax fraud. The Netherlands is alsounder suspicion.The financial crisis has not shown-up the best qualities of Euro-pean leaders. For too long there has been the mantra that publicspending cuts are the only thing that will get Europe out of reces-sion. Now, as the crisis drags on, and with European Parliamentelections a year away, the argument has shifted towards growthpolicies. Even long-term commission holdouts have softenedtheir position on austerity. EU Budget Commissioner, Janusz Le- wandowski has also weighed-in on the debate. Tax fraud, though,had always been off the table, but recent high-profile cases, suchas those involving Apple and Starbucks, have forced the issuesomewhat. There is momentum; both in Europe and the US, andthat momentum should not be lost.The slow response to the issue of tax fraud has proved to be afailure of policy and a moral scandal. Speaking at the EuropeanParliament on 21 May, Barroso was adamant that a deal could bereached, at least on information exchange. But more is needed; acommon definition of tax havens, a blacklist, a re-write of exist-ing transnational banking agreements that facilitate evasion, morestringent transparency rules for corporate accounting.So far, the will has been weak. But with the poor and hungry get-ting restless, all the while wondering what to do with their anger,and with a political class under pressure (fearing the polls, the voter response), something good may just come about, however belatedly. There is no time to stall further.
 A taxing issue
 
03
ANALYSIS
NEW EUROPE
www.neurope.eu
26 May - June 1, 2013
T
he annual report of the European Un-ion’s fraud busters, OLAF is showingthat the organisation has improved itsprocedures and efficiency, Director General,Giovanni Kessler said.The figures showed that the case selectionprocess was reduced from 6.8 to 1.4 months,a reduction of 80% compared to 2011. Inves-tigations were also getting better and faster,he said. In 2012, the duration of investigationand coordination cases took an average of 22.6months including the selection phase, a 22%decrease on the previous year.Kessler also noted that there was an in-crease of 21% in the number of reports the or-ganisation was receiving from the public andpublic bodies.The larger number of complaints OLAFreceived had put an additional burden on theorganisation but with improved procedures,Kessler said that a new unit to screen cases, todecide which ones should be investigated hadled to the opening of 718 cases, compared to178 opened in 2011.Kessler said that 465 investigations had been completed, with recommendations onrecovering a total of €284 million. Their ad-ministrative budget for the year was €57.4 mil-lion. Kessler said this “demonstrate OLAF’scommitment to efficiency and high quality investigations. To achieve the full impact inour fight against fraud, the cooperation of ourpartners and Member States is essential. Swiftand decisive actions are crucial in recoveringmisused EU money and in bringing perpetra-tors to justice.”The case that made the headlines, of theirinvestigation of then Health Commissioner John Dalli had hotly debated consequences, which continue, but Kessler defended his or-ganisation against allegations of using illegalmethods such as wiretaps.Kessler denied doing anything illegaland said that an “apocryphal” version had been reported widely in the media, but theSupervisory Committee never said “illegal”and OLAF was confident they had not actedillegally.He said it was normal to have some inves-tigative acts challenged in the court. In theactivity report of the supervisors, and said he was unable to fully answer detailed questionsdue to confidentiality. “If I do so, I might dis-close confidential information but you can,from your unknown sources, especially in theGerman press.” He criticised “one sided leaks.”“If I lied, I should go to jail, not resign,”Kessler said. He added that there would beseveral others in OLAF who would also beheading in the same direction.
By 
 Andy Carling 
OLAF headquarter office at the Brussels Rue Joseph II / Jozef II straat, the European office of anti-fraud office, Friday 05 December 2003. |
BELGA PHOTO HERWIG VERGULT
Leaner, stronger, faster says chief 
Kessler defends institution, himself 
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The European Summit, which took place on22 May, sought to clarify outstanding issues of energy and economics; in the last issue, pri-marily clamping down on tax fraud, a big issuein the wake of a series of high-profile cases of tax evasion and what has become known as“aggressive tax planning” involving the likesof Starbucks and Apple. After decades of in-action, it seems the EU leadership, no doubtprompted by a backlash against politics ingeneral and Brussels-based austerity in par-ticular, is finally prepared to take charge.On this, there is large support from EUmember states, who are feeling the pressurefrom the electorate to act accordingly afterthe evasion scandals from big corporations,such as the ones mentioned above. However,despite optimism by European Commissionpresident, Jose Manuel Barroso, expressed atan appearance before the European Parlia-ment in Strasbourg on 21 May, the day beforeEU leaders gathered to discuss the tax issue,nothing definite was concluded. Luxem- bourg, the big holdout on any new EU tax ar-rangements, continued to be sceptical aboutopening up its secretive banking system, de-spite its onetime ally, Austria, consenting tothe prevailing mood against tax fraud and ha- vens. “It’s a bad day for tax cheats,” Chancel-lor Werner Faymann said after the meeting,unlike the Luxembourg leader, Jean Claude Juncker, who struck a cautious note when hesaid his country would sign up to a deal only after other secretive nations, such as Swit-zerland and Andorra also agreed to give upinformation on evaders. A recently struck deal with these, andother, countries, suggests that this may in-deed happen before the commission-prizedend of year deadline. Luxembourg may haveto concede defeat.The other big issue was energy. A lesscontentious issue, and one, it was alleged,the council used to distract the split in thetax issue. The “brief but effective” summiton 22 May, as European Council presidentHerman van Rompuy put it, the heads of state agreed to push forward on a single ener-gy market (see page 12). As a first step, they promised to keep energy prices low, as afterall, according to Barroso, “most of us are onthe side of the citizens.” Member state gov-ernments broadly agreed to investment inenergy infrastructure and greater energy ef-ficiency. Unfortunately, there was also com-mitment to “exploit renewable sources morecheaply” and diversify supplies – includinga commitment to investigate domestic sup-plies of shale gas.Unsurprisingly, the low price issue wastriumphed following the meeting.The Greens weren’t so impressed, callingthis a “red herring.” According to the group’sco-president in the European parliament,Rebecca Harms, “EU leaders are looking toEurope’s energy past and seeking to cater toa rag-tag collection of dirty and dangerousenergy sources from yesteryear: This will donothing to reduce the energy bills of indus-try and consumers,” she said.
EU summit: a taxing time for energy policy 

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