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New Europe Print Edition - Issue 962

New Europe Print Edition - Issue 962

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November 20 - 26, 2011
November 20 - 26, 2011

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Published by: New Europe Newspaper on Nov 20, 2011
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Gazprom to become a competitor to European energy suppliers |Page 16
 NEWEUROPE
19thYear of Publication | Number 962 | November 20 - 26, 2011 | € 3.50
 www.neurope.eu
IN THIS ISSUE
EU Policy 
Against odds, Eurozoneeconomy expands|Page 5Parliament approves law for taming CDS|Page 13
EU-World
EU-US urge Israel to scraplegislation against civil society|Page 13Putin: Russia ready tohelp the eurozone|Page 14
Energy & Climate
EU pushes for transportingCentral Asia gas to Europe|Page 15 Turkmenistan, Pakistan agreeto speed up TAPI pipeline|Page 16Russia to meet APECenergy market demand|Page 17
Country news
Sarkozy launches war onFrench ‘sick leave syndrome’|Page 23New Italian government tofocus on eliminating budget deficit|Page 25New Greek government resumestalks with international creditors|Page 31Committee recommends EP speaksout for Tymoshenko|Page 36Russia’s GDP increases 4.8% in Q3|Page 39
Editorial & Opinion
Eurozone is a dangerous place unless|Page 2 The last tango in Rome|Page 8Is the West broke?|Page 9Is this the final count down to a globalfinancial calamity ?|Page 10Should we ban cigarettes?|Page 11
On 16 November in Doha, Russia’s Energy Minister Sergey Shmatko won the supportof the powerful Gas Exporting CountriesForum (GECF) over the need to co-oper-ate in developing projects for productionand sale of the “blue fuel” to raise pricesand boost supply. In a declaration, the world’s 12 largest natural-gas exportersexpressed the need to reach a fair price fornatural gas based on gas-to- oil pricesindexation. Given that Gazprom andChina disagree over the price for a poten-tial long-term gas supply agreement andGazprom and EU consumers disagree overthe existing long-term contracts, it wasimportant for Russia to gain support fromother members of the GECF.But talks in Qatar’s capital stayed away from the creation of a Gas-OPEC. “Thisis just talk about the potential formationof the gas prices but it is not a settled for-mula for global price formation,”Moscow-based oil & gas analyst at AlfaBank Maria Yegikyan told New Europeon 16 November. She said that Gazpromdoes not necessarily want to have a glob-al gas price. “That would make it neces-sary for the company to basically takeaway its monopoly for the pricingbecause currently Gazprom’s price ismuch higher than prices on the globalmarket,” Yegikyan said.A worrying development for theEuropean Commission, although it had nospecific comment, could be an agreementbetween gas-producing majors Russia,Qatar and Algeria to co-operate in theEuropean natural-gas market. The EU haslooked at Qatar and Algeria as part of itsdiversification efforts. Meanwhile, theEU’s reliance on Russia gas will increaseeven more as the second line of the NordStream natural gas pipeline betweenRussia and Germany is going faster thanplanned.
Russia, Qatar and Algeria to co-operate in EU gas market
·Pages 14, 17
Gas OPEC looms over EU
Russia’s Energy Minister Sergey Shmatko smiles with satisfaction as he won the support of the Gas Exporting Countries Forum summit in Doha. |
EPA/STR 
Gaultier with an ‘L’Page 19
BLACK SEA
 Tzvetan Vassilev, Chairman of theSupervisory Board, Corporate CommercialBank, tells NE that co-operation within theBlack Sea region can be a driver of econom-ic growth and development
·Page 3
EUROZONE
More than one member of ECB's govern-ing council say that the European CentralBank will do whatever it takes to save themoney zone's financial markets from run-ning out of cash
·Pages 4, 6, 7
EU WORLD
For the EU the APEC meeting sent a clearsignal. The US was turning full speedtowards the Asia-Pacific region whichObama described as “absolutely critical” toAmerica's prosperity 
·Page 13
INTERVIEW 
Bulgarian Transport Minister IvayloMoskovski answers NE's questions oncurrent policy in the country, as well asBulgaria's role in Europe's wider transportambitions
·Pages 6, 7
FASHION & STYLE
 
 ANALYSIS
Page 2 | New Europe
 
NEW EUROPE
November 20 - 26, 2011
NE
15 YEARS AGO
“Is it safe?”|
EPA/ALEXEI NIKOLSKIY MANDATORY CREDIT/RIA NOVOSTI
 TheShootingGallery 
In November 1996, Bill Clinton won a second term in the White House, while in Russia the star of Boris Yeltsin had already lost its glow, thus leaving the American leader as indisputable world supremo. This was the main fuel that Wall Street used torecord a straight ten days continued rise of its basic indexes. The US leadership in the world was not threatened in any way. Itmust have been this sense of absolute supremacy that led the only super power of the world to a series of blunders like the futileinvasions of Afghanistan and Iraq. Their immense cost, together with the twin American deficits in the foreign trade and thefederal and states budgets, led the US to be over indebted to China.
Eurozone is a dangerousplace unless...
It is quite alarming, seeing the Eurozone turning to politi-cal solutions that in reality constitute a deviation from stan-dard democratic procedures.At the same time, the rest of the world, as it has expressedthrough the so-called markets, seems to be becoming moresceptical about Europe's ability to effectively face to its sov-ereign debt problem.In short, the brief replacements of the governments inGreece and Italy by unelected technocrats, together withthe fact that Berlin and Paris do not seem able to overcometheir timidity vis-à-vis the real causes of the problem, whichis none other than the politically inflicted inability of theCentral European Bank to effectively cope with the crisis.All this paints an alarming political tableau and questionsthe ability of the Eurozone to solve the problem.Unfortunately, markets have come to the conclusion thatthese threats are becoming more severe every day.And infallible indicator of this is the 7.5% interest rate that world investors are now demanding, in order to continuefinancing Italy and 3.6% in the case of France. These inter-est rates are more than what Greece will be charged for itsnew €130 billion package, which means that France and of course Italy will finance Athens with loans carrying 3.5%interest rate, at very high cost to their taxpayers. This last problem will add to the instability of the political tur-moil that prevails all over the Eurozone, and increase the dan-ger of voters turning to extreme parties, as has happened inFinland and Holland. Even in debt-ridden Greece, the surpris-ingly high acceptance of Papademos by the public (to the tuneof 73%, an all-time high) creates the danger of even greater dis-illusionment in the coming months, which may drive centre-right voters to extreme-right parties, which are at present ridinghigh on anti-immigration and anti-European policies. The same is true for Italy – the initial wide acceptance of Mario Monti’s government will turn into equally wide-spread anger, when the citizens come to understand thattheir new prime minister stands for severe austerity mea-sures and deep cuts in public spending.In both cases, Rome and Athens may turn into more explo-sive political situations, when austerity will be felt by every-body and people realise that technocrats have even worsesolutions than politicians. The US had exactly the same financial problems after thecredit meltdown that followed the real-estate crisis. Europe,however, does not possess the two American policy toolsthat helped Washington overcome its own crisis. For onething, the American central banks, the Fed, did not hesitateto help the government and the banking sector by supply-ing them both with unlimited freshly printed liquidity, acritical tool that the ECB is not allowed to use. The next important advantage that the US had in compari-son with Europe was that it was one state and one govern-ment, while in the Eurozone there are 17 and, while the ECBdrawback may in the end be overcome if things turn moresour, the “one government” advantage is to remain only American, unless the entire Eurozone is being governed by technocrats appointed by the Berlin Paris axis, if indeed theFranco-German political bond survives the crisis. The markets and political arenas of the Eurozone havereached a point at which the incorrect steps will be very dif-ficult to rectify – it will take a truly central banking institu-tion in Frankfurt and a real Eurozone financial ministry inBrussels to truly overcome this crisis. Even Angela Merkelthe German Chancellor recognises that what it is done toface up to Eurozone's debt problems is not enough. Sosooner rather than later the EU has to come up with longterm sustainable ground braking solutions.
EDITOR
Dennis Kefalakosdkefalakos@neurope.eu
SENIOR EDITORIAL TEAM
Kostis Geropoulos (Energy & Russian Affairs)kgeropoulos@neurope.eu Andy Carling (EU Affairs)acarling@neurope.euCillian Donnelly (EU Affairs)cdonnelly@neurope.eu Ariti Alamanou (Legal Affairs)aalamanou@neurope.eu Alexandra Coronakis (Columnist)acoronaki@neurope.euLouise Kissa (Fashion)lkissa@neurope.eu
ONLINE EDITOR
James Drew jdrew@neurope.eu
DIRECTOR
 Alexandros Koronakisakoronakis@neurope.eu
MARKETING & ADVERTISING
Panos Katsampanispkatsampanis@neurope.eu
EXECUTIVE LAYOUT PRODUCER
Suman Haquesuman@neurope.eu
SUBSCRIPTIONS & DISTRIBUTION
subscriptions@neurope.euSubscriptions are available worldwide
INDEPENDENCE
New Europe is a privately owned independentpublication, and is not subsidised or financed inany way by any EU institution or other entity.
BRUSSELS HEADQUARTERS
 Av. de Tervuren/Tervurenlaan 96,1040 Brussels, BelgiumTel. +32 2 5390039Fax +32 2 5390339info@neurope.eu
PUBLISHERSBRUSSELS NEWS AGENCY SPRL
 Avenue de Tervueren 961040 Etterbeek BelgiumTel. +32 2 5390039info@neurope.eu
EXTERNAL CONTRIBUTIONS
Signed Contributions express solely theviews of the writers and do not necessarily reflect the opinion of thenewspaper.
NE is printed on recycled paper.
    N    E    W    E    U    R    O    P    E
© 2011
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
By Dionyssis Kefalakos
 
 ANALYSIS
New Europe |Page 3
NEW EUROPE
November 20 - 26, 2011
All countries in the Black Sea region needstate and private investments in energy infrastructure to solve a number of problems such as the need to increaseenergy production in response to growingenergy demand, overcoming externalenergy dependence, diversification of energy supplies, and environmentalprotection, Tzvetan Vassilev, Chairman of the Supervisory Board, CorporateCommercial Bank told New Europe. Thetop banker, who later took part in theBlack Sea Energy and Economic Forumin Istanbul on 17-18 November wasorganised by the Atlantic Council’sPatriciu Eurasia Center, noted that intimes of global hardship, co-operation within the Black Sea region can be adriver of economic growth anddevelopment.Asked by New Europe in which areasopportunities lie, the banker called forefforts to build a single energy market, which will result in growing energy production, diversification of energy supply and transport routes, increasingrevenues, attracting higher investments,and enhancing the competitiveness of theenergy sectors in the Black Sea region. Allthis would inevitably lead to increasedeconomic growth.He also highlighted harmonisation of national energy laws and strengtheningtrade relations between countries, as wellas the elimination of barriers to trade; co-operation in the field of security to createfavourable investment conditions;preventing or limiting capital outflowsfrom the region and fostering bankingsector integration; co-operation in thefield of environmental protection; andbuilding an institutional framework  which provides incentives for intra-regional investments and strengthens thepower of the Organisation of the Black Sea Economic Co-operation and theBlack Sea Trade and Development Bank.Vassilev also said that unresolved warconflicts, efforts of some countries in theregion to reinforce their role asmonopolists on the energy market, andconcerns of some countries that deeperintegration could threaten their nationalsovereignty are the main challenges to co-operation and integration in the region.Vassilev stressed that the active role of the state entails providing tax reliefs,funding and other legal and politicalinitiatives regarding the energy sector.“There is growing consensus among theBlack Sea countries that these problemscan be solved effectively only through theestablishment of a stable, integratedenergy market. The first step towards thecreation of such a market is theinvestment in joint infrastructureprojects,” he said.Vassilev noted that the main challengefacing the countries from the Black Searegion is growing energy consumption, which is at the core of an ever increasingneed for investments in their energy sectors. Investments in all levels of thesupply chain are critical for ensuringsustainable energy supply. As concerns thepetroleum industry, in particular, thisincludes exploration, extraction,transportation, refining and distributionof the refined products to the end users.“Russia and Azerbaijan are the drivingforces of the Black Sea region petroleumindustry. They act as a magnet for foreigninvestments in this area as they are theleading producers and the main exportersof crude oil in the region,” Vassilev said. The investment climate improvementsin Russia since 2000, achieved mainly through new regulatory instruments andfixed tax rates, have brought to thecountry international investors such asExxonMobil, British Petroleum, andConoco Philips. What is more, Russia isone of the few countries in the Black Searegion which continues to implementsubstantial investment programmes in itsoil and petrochemical industries. The significant investments inAzerbaijan’s oil sector have boosted theeconomy of the country. The “Contract of the Century”, allowing majorinternational companies to develop of theAzeri, Chirag, Guneshli oil fields, resultedin double-digit growth of Azerbaijanigross domestic product. This illustrateshow the combination of natural resourceendowments of a country and significantinvestments in its energy productionsector can foster economic growth, evenin a relatively small economy, Vassilev said. The other countries in the region arehighly dependent on oil imports, whichmake the creation of alternative crude oiltransportation routes their main priority.Among them, Turkey intends to becomea key regional energy hub and investsheavily in transportation and shipment of crude oil, as well as in the construction of new petroleum refineries (as in the case with Ceyhan). This in turn will boostdomestic production and decrease importdependence.Vassilev said that the growing demandfor natural gas, combined with theincreasing importance of the resource forthe countries from the Black Sea region, will attract more and more investments inthe gas market over the coming years,distributed in two directions – explorationand development of new gas fields andconstruction of transport infrastructure,such as the EU Southern Gas Corridorand South Stream Pipeline. The majority of these investments will be concentratedin Russia and Azerbaijan – the mainproducers and exporters of natural gas inthe region. While Russia invests heavily in keeping its leading position, the EUperceives Azerbaijan as the mainalternative to Russian gas supplies for theEuropean market and large investments will be made in the development of gasreserves in the country.In view of the substantial coal reservesavailable in the Black Sea region, the mainpriorities of the countries are thefollowing: encouraging investment in themining sector in order to increaseproduction and the share of coal in theenergy mix, reducing dependence onimports, improving quality andimplementing technologies forenvironmental protection. Maininvestments are expected in Ukraine,Russia and Turkey, Vassilev said.In response to growing electricity demand, net electricity generation hasbeen rising, both at regional andinternational level. In order to meetdomestic demand for energy at reasonableprices, ensure sustainable development of the electricity market, and fulfil theirenvironmental commitments, promptedby climate change, countries from theregion have to improve security of domestic power generation and open upenergy markets to competition. It is only through the liberalization of energy markets that the Black Sea states canattract the investments necessary for themodernization and refurbishment of theinefficient and, in many cases, obsoletepower infrastructure. It is expected thatthe share of nuclear power in the totalpower mix of the Black Sea countries willincrease in the long term, as at least half othe countries in the region are planning torefurbish the existing power plants or tobuild new ones (Russia, Ukraine, Bulgaria,Romania, Armenia and Turkey). The Black Sea countries have greatpotential for development of renewableenergy sources (RES), Vassilev said.Government incentives promotingrenewable power generation, such aspreferential tariffs and guaranteedpurchase of renewable electricity, areamong the key drivers of investor interestof both local and foreign companies onthe RES market. The countries with thegreatest potential for attractinginvestments in the field of hydropower are Turkey and Georgia; in solar energy –Greece and Bulgaria; in biomass –Ukraine, Bulgaria, Russia and Romania;in wind energy – Turkey, Greece, Bulgariaand Romania.“The strategic geographic location of Bulgaria makes it one of the key playersin the realization of a number of large-scale energy projects in the Black Searegion. The country has the potential tobecome an energy ‘corridor’ for theEuropean market and an importantenergy hub of the Balkan Peninsula, by  virtue of the oil and gas pipelines whichare projected (the EU Southern GasCorridor, South Stream Pipeline),”Vassilev said.Some of the main prospects forinvestments in Bulgaria’s energy sectorinclude construction of Belene NuclearPower Plant, implementation of cleancoal technologies and RES development. The growing interdependence betweenproducing, consuming and transitcountries in the Black Sea region requiressharing of responsibilities andstrengthening partnerships among them. The concept of economic integration of the countries in the region is attractiveand widely supported by the Black Seacountries themselves, and by theEuropean Union and the United States,as well. A possible future integration of the energy markets in the region wouldhave positive multidimensionalconsequences, such as rising energy production, diversification of energy supply and transport routes, increasingrevenues, attracting higher investments,and enhancing the competitiveness of theenergy sectors in the Black Sea region. Allthis would inevitably lead to increasedeconomic growth. The creation of a single energy marketin the region entails harmonization of national energy laws, strengthening traderelations between the countries,identifying existing barriers to trade andinvestment in the sector and seekingopportunities to remove or reduce them. The implementation of large-scale energy projects and the establishment of acommon energy market will play a crucialrole for the achievement of socialcohesion and economic integration of theBlack Sea region.
BLACK SEA REGION|ECONOMY 
Energy, economic co-operation withinthe Black Sea region to boost growth
 Tzvetan Vassilev, Chairman of the Supervisory Board, Corporate Commercial Bank.

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