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New Europe Print Edition Issue 988

New Europe Print Edition Issue 988

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Published by: New Europe Newspaper on May 27, 2012
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Year of Publication | Number 988 | 27 May - 2 June, 2012 | € 3.50 www.neurope.eu
As EU leaders met on 23 May to dis-
cuss which course of action should be
taken to ensure economic growth,
Germany and France were already at
loggerheads over the issuance of
‘Eurobonds’, which would be under-
written by all 17 eurozone states.
This is one of several options that
the EU and eurozone countries can
ponder over, as calls to implement
measures to boost growth increased
following the G8 summit at Camp
David, where budget doves can claim a
small victory in that there was a
change of emphasis from purely aus-
terity measures.
The declaration in Washington makes
it clear that the re- energising economies
should now to be priority of governments,
while recognising different approaches.
“Against this background, we commit to
take all necessary steps to strengthen and
reinvigorate our economies and combat
financial stresses, recognizing that the
right measures are not the same for each
of us.”
The leaders were keen to stress that its
does not need to be a choice of austerity
or growth, and that both can be part of
the same package as this line in the com-
muniqué suggests.
“We welcome the ongoing discussion
in Europe on how to generate growth,
while maintaining a firm commitment
to implement fiscal consolidation to be
assessed on a structural basis.”
Time is running out for the European
Union to come up with a solution to
the ongoing debt crisis, one senior
European politician has warned.
According to Pier Luigi Bersani,
leader of Italy’s opposition
Democraticici Di Sinistra (Democratic
Left) party, Europe needs to pull
together in this time of financial
uncertainty. Furthermore, he says,
European citizens are willing at this
point in time to accept European lead-
ership – if only the political leadership
was there.
Without solidarity in the EU, says
Bersani, the Union will collapse. He
compares the situation to the Agatha
Christie novel, Ten little Indians: “ In
the novel, even the strongest one of the
Ten little Indians, at the end of the day,
if he remains alone, he collapses”, he
says. “Therefore we have to react, but
we don’t have enough time any more.
We need to put in place reactions that
have a concrete basis”.
“The idea that the austerity measures
can be combined with the recession is
not a reality”, he says. “You can have a
contagion, a kind of illness, not only of
the financial system of the countries,
but one that will also affect the eco-
nomic system and the political one,
and the social one”.
This, he says, could potentially lead
to an even bigger crisis than the one
that Europe is facing right now. “That
syndrome will trigger radicalisation in
the political system, with an increased
populism, and power given to populist
forces, which will have an impact on
the way those societies will be gov-
erned. So we need to do something
very fast – right now”.
The EU, and solidarity between
member states, he continues, is the best
way to combat both the financial crisis,
and the possible attendant political cri-
sis. He says that “European actions”,
which, while they don’t strip member
states of their national responsibilities,
do “create a mechanism for a collective
measure”, which “can start a new
thinking, a new mentality, because they
can show public opinion that from the
community method they can find real
“This is the paradox we are facing: in
the most critical time for Europe, we
have a historic chance to link European
solutions to the common feeling of
public opinion. The idea of a European
ideal, like modernity and peace, can
now be linked to the issue of social
issues and job issues.”, he says.
Without solidarity, Europe will collapse
Austerity and growth: a fine balancing act
· Page 3
Ten little Indians
Growth is today at the heart
of the EU and global con-
cern. Nevertheless, in order
for this objective to gain sub-
stance it has to be directly
linked to... ·Page
·Page 5
When Nassim Taleb wrote his
best seller “The Black Swan,”
he tried to describe outliers,
that is: very rare and highly
improbable events, that carry
extreme impact...
·Page 36
Turkey has recently been at
the forefront of interna-
tional economic and politi-
cal debates. On the one
hand, despite the economic
·Page 6
The leader of the Serbian
Progressive Party (SNS),
Tomislav Nikolić, was elected
president of Serbia on 20 May,
managing to capitalise on the
·Page 11
Pier Luigi Bersani, leader of Italy’s opposition Democraticici Di Sinistra party : "in the most crit-
ical time for Europe, we have a historic chance to link European solutions to the common feeling
of public opinion". |EPA/ALESSANDRO DI MEO
Less than two months ago, on 8 April,
New Europe said that he US
Ambassador in Sofia James Warlick
would be soon revoked as FBI had
launched an investigation in his
Embassy. Two days later, the good
ambassador twittered, “New Europe
news report saying I have been recalled
isn't true.”Yet his joy lasted little as last
week he was recalled back to State. We
wish him the best and we hope in the
next post will be more careful in
choosing his friends.
Famous last words
·Page 36
should ‘not
close its eyes
to corrupt
Page 20
Page 2 | New Europe
27 May - 2 June, 2012
Mr President, this is the new artic warfare camo for NATO that has been designed by a committee of EU member
states.|AFP PHOTO/Mandel NGAN
The Shooting Gallery
After the initial economic catastrophe which hit all the central European countries, as a result of their complete u-
turn, from the a centrally planned productive machine to a market led supply chain, some of them, like Bulgaria man-
aged to apply sooner than others the needed tough reforms, cashing in early dividends. The Sofia government after
winning the May 1997 elections, applied a vigorous economic programme aiming at facilitating the development of
the local production dynamic in all facets of agriculture, industry and services. The tough measures started paying
dividends, with the support of the younger generations. Bulgaria managed to trigger growth without extensive use of
borrowed capital. This helped all the subsequent governments to follow development policies based on structural
measures and not on public borrowing.
Inactivity and expectations
There is a rule of thumb in politics, or, for that matter, the
world of business or the economy, which suggests that you
never hold a meeting if you are not sure of the outcome.
Yes, it is a cynical interpretation of things, and when the
27 leaders met as part of the EU’s informal summit in
Brussels on 23 May, there was, as per the predictions, no
real outcome. Behind the scenes indications were that
nothing concrete would be decided, yet still the meeting
went ahead as planned. Franocis Hollade, the newly-
elected president of France, and cheerleader for a
European growth strategy, was the star attraction, and he
got to spar with German Chancellor, Angela Merkel, aus-
terity holdout, in front of his European peers.
Both leaders are at loggerheads over the issue of
Eurobonds, and, as such, have divided the other EU lead-
ers; there are two clear tribes, and two very obviously con-
trasting strategies for the EU to follow as it attempts to
ease its way out of the debt crisis.
Following the informal dinner, which dragged-on unex-
pectedly long, Hollande and Merkel spoke to the press,
unlike some of the other leaders, and attempted to appear
genial. Differences, yes, but nothing like an all-out war.
Elsewhere, an increase in EIB project funding was touted
as something of a victorious outcome, which in a way it
was, but not one as startling as many had hoped for. Now,
EU leaders will meet again in June – at the usual, sched-
uled Spring summit – where a lack of progress cannot be
an option.
The sense of compromise and inconclusiveness was pal-
pable following the summit, or informal diner as it was
billed. European Commission president, Jose Manuel
Barroso, talked growth, but also fiscal responsibility.
David Cameron dismissed the idea of a financial transac-
tion tax (FTT), which is been demanded by most
European leaders and citizens.
Certain EU leaders even abandoned their usual national
de-briefing sessions. The Irish Prime Minister, Enda
Kenny, didn’t quite get his good news to take back to the
electorate ahead of his country’s referendum on the fiscal
compact on 31 May.
Of course, Greece was the hot topic. Herman Van
Rompuy, President of the European Council, said that, in
response to ongoing speculation, that the country would
definitely not leave the single currency. No one expected
him to say differently. The speculation continues.
Meanwhile, time is of the essence. Whatever about his
impressions given at the summit, Hollande’s calls for
growth on the campaign trail adjusted the political debate
across the political spectrum, although more rigorously on
the left. Growth, and investment for jobs, is needed in
Europe, as more and more are demanding. Germany is
the main supporter of fiscal responsibility, France the
champion of growth.
The twin engine of the European project are, however
they want to downplay it, at odds.
Now ‘Merkozy’ is gone, a new Franco-German relation-
ship is beginning to emerge. So far, the two have been cir-
cling each other, cautiously. The next time they meet in
the arena, some kind of decision will be expected. How
likely that is, remains to be seen.
Cillian Donnelly
Kostis Geropoulos (Energy & Russian Affairs)
Andy Carling (EU Affairs)
Ivan Delibasic (EU Affairs)
Ariti Alamanou (Legal Affairs)
Stratis Camatsos (EU Affairs)
Louise Kissa (Fashion)
Alexandra Coronakis (Columnist)
Alexandros Koronakis
Panos Katsampanis
Suman Haque
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ISSN number: 1106-8299
New Europe |Page 3
27 May - 2 June, 2012
Time is running out for the European Union
to come up with a solution to the ongoing debt
crisis, one senior European politician has
According to Pier Luigi Bersani, leader of
Italy’s Partito Democratico (Democratic party),
Europe needs to pull together in this time of
financial uncertainty. Furthermore, he says, Eu-
ropean citizens are willing at this point in time
to accept European leadership – if only the po-
litical leadership was there.
Without solidarity in the EU, says Bersani,
the Union will collapse. He compares the situ-
ation to the Agatha Christie novel, Ten little
Indians: “ In the novel, even the strongest one
of the Ten little Indians, at the end of the day,
if he remains alone, he collapses”, he says.
“Therefore we have to react, but we don’t have
enough time any more. We need to put in place
reactions that have a concrete basis”.
For Bersani, time is critical. Speaking on 23
May, at the leaders meeting of the party of Eu-
ropean Socialists (PES) on the afternoon of the
informal summit of EU leaders, tasked with as-
suring the citizens that growth and jobs have
as much place in EU thinking as austerity, he
strongly rejects the notion that austerity is the
best policy in the midst of the ongoing Euro-
pean debt crisis.
“The idea that the austerity measures can be
combined with the recession is not a reality”, he
explains. “You can have a contagion, a kind of
illness, not only of the financial system of the
countries, but one that will also affect the eco-
nomic system and the political one, and the so-
cial one”.
This, he says, could potentially lead to an
even bigger crisis than the one that Europe is
facing right now. “That syndrome will trigger
radicalisation in the political system, with an in-
creased populism and demagogy, which will
have an impact on the way those societies will
be governed. So we need to do something very
fast – right now”.
And acting “very fast”is something that can
not be underestimated if pro-European parties
are to win the ongoing battle for hearts and
minds in the EU, says Bersani. “Out of all the
range of things we can do, there are two we can
do right now. The first, would be to use the sys-
tem of the redemption fund, the mutualisation
of the exceeding quota (over 60%) of the na-
tional debts. This will create the basis for a win-
win situation, because, given the fact that each
country will keep its own debt, this will allow a
new system of compensation. The first positive
outcome of such a measure would be the de-
crease in interest rates, which will generate
enough resources for new investment, and this
will trigger a new economic cycle”.
The second, he says, is the fight to have a Eu-
ropean financial transaction tax (FTT), which
is currently splitting EU leaders. At the summit,
UK Prime Minister, David Cameron, said that
he felt the notion of a levy on financial transac-
tions misguided. Other member states, most
notably France, whose newly-elected President,
Francoise Hollande made growth and wealth
redistribution a large part of his victorious cam-
paign, disagree, believing it a lucrative way of
generating revenue in the current climate.
Bersani is firmly in the latter camp. Further-
more, he says, the entire financial system, the
current roots of which can be traced back to the
rule of Florentine leader Lorenzo de Medici in
the 15th century, has been allowed to stagnate,
and become corrupted.
“We are obviously in a system largely out of
control when it comes to the financial banking
system”, he says, adding that the recent news of
a new potential crisis related to the derivatives
titles, which amounts to 5-6% of worldwide
GDP, is further bad news for citizens.
This situation, he says, has been allowed to
happen owing to a lapse “in serious regulation”,
which “ leads us to the conclusion that finan-
cial speculation is nowadays strong enough to
over ride national sovereignty, and with that
mechanism, with that way of working and that
system, no single country is able to resist the of-
fence. There will always be a country among us
that is on the frontline”.
The EU, and solidarity between member
states, he continues, is the best way to combat
both the financial crisis, and the possible atten-
dant political crisis. Referring back to his
thoughts on the redemption fund, as well as the
FTT, he says that these amount to “European
actions”, which, while they don’t strip member
states of their national responsibilities, do “cre-
ate a mechanism for a collective measure”,
which “can start a new thinking, a new men-
tality, because they can show public opinion
that from the community method they can find
real solutions”.
“This is the paradox we are facing: in the
most critical time for Europe, we have a his-
toric chance to link European solutions to the
common feeling of public opinion. The aim set
at the beginning of the European integration
process of a European ideal of modernity and
peace, can and must now be linked to social jus-
tice and fighting unemployment”, he says.
But, he concludes, decisions need to be made,
and time is running out. A second European
Council summit is scheduled for the end of
June, and EU leaders need to seriously come up
with solutions that can satisfy an increasingly
alienated European electorate. Inaction, he says,
will only make things worse. Solidarity is
needed.“Not finding a solution can make the
situation worse. So at least on some of the
points I talked about, I expect some decisions.
Unfortunately the crisis is felt in a different way
from country to country, and the idea that one
can save himself on his own is an idea that is
running in Europe, but is a deeply wrong idea.”.
Time is running out for EU leaders
Pier Luigi Bersani: “The idea that the austerity measures can be combined with the recession is not a reality”| EPA/ALESSANDRO DI MEO
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Page 4| New Europe
27 May - 2 June, 2012
As expected, the EU summit of 23
May did not produce any concrete de-
cisions about the much expected new
conciliation between fiscal stability
and growth. After the meeting the
Italian prime minister Mario Monti
described perfectly the outcome by
saying that a large majority of the lead-
ers supported the sharing of the fiscal
burden through the issuing of a com-
mon debt or eurobonds to help the
weak member states but Germany and
some other rejected it and asked
Greece to do more.
As for the French President François
Hollande, he did not push his argu-
ments in favour of eurobonds to ex-
treme limits, saying that “there was no
confrontation”. Seemingly the German
Chancellor Angela Merkel had let oth-
ers, like Finland and Austria, to oppose
the shared debt idea, avoiding a direct
challenge to Hollande.
Within the Eurozone, the camps are
already well formed. On the growth
and Eurobond side France, Italy and
Spain are heading the alliance of al-
most all the smaller countries, with the
exception of some austerity loving
northerners, who side with Germany.
The two camps choose at the summit
not to push their differences to ex-
treme limits, hoping for a compromise,
according to the EU tradition.
But it is not only the prospect of a
future compromise that stopped
Merkel and Hollande from openly
confronting each other on last
Wednesday's extraordinary EU sum-
mit. The Greek elections of 17 June
may turn things upside-down. At this
point it must be noted that after the
recent meeting of the G8, all the Eu-
ropean leaders and the American Pres-
ident Barack Obama 'advised' the
Greeks that their next election is not
like others, because this poll is actually
a referendum deciding the country's
position 'in or out the Eurozone'. Her-
man Van Rompuy, the President of the
European Council, in his remarks on
yesterday's summit when it comes to
Greece he does not repeat the referen-
dum argument. He choose to remind
to the Greeks what the EU has spent
on them, but he refrained from saying
that all those funds were just loans and
not gifts.
“We also had at the end of the meet-
ing an exchange of view on the politi-
cal and economic situation in Greece”,
Van Rompuy said. “On behalf of euro
area leaders, I reaffirms that we want
Greece to remain in the euro area
while respecting its commitments. We
are fully aware of the significant efforts
already made by the Greek citizens.
The eurozone has shown considerable
solidarity, having already disbursed to-
gether with the IMF nearly 150 billion
euro in support of Greece since 2010.
We will ensure that European struc-
tural funds and instruments are mo-
bilised to bring Greece on a path
towards growth and job creation”.
In any case the outcome of the next
Greek election is crucial by all stan-
dards. The slightest reference that the
country may leave the euro sends the
world markets and the euro to histori-
cal lows. And until the 17 June night
the financial climate will continue
along those lines, with the most im-
portant news coming from Athens or
from those who prepare for the worse.
As for the other burning issues, the
growth factor and the issuance of Eu-
robonds, Van Rompuy's remarks con-
tained the seeds of a future
compromise, saying, “we need to step
up our efforts to finance the economy
through investments and better access
of Small and Medium-sized Enter-
prises to credit. Reforms must go
hand-in-hand with investment and
EU funds can play an important role
in this regard. To this extent, the board
of the European Investment Bank is
invited to consider an increase of its
capital by June for financing projects
across the EU. We welcome also the
political agreement of the Council and
the European Parliament on the EU-
EIB Project Bond initiative, in order to
launch the pilot phase this summer as
a first step. The Commission will re-
port in June on the reprogramming of
the current Structural Funds to sup-
port growth, jobs and training”.
In reality, the only concrete policy
towards a shared fiscal effort for
growth is the increase of the European
Investment Bank's capital by €10 bil-
lion. In the face of it this might not
mean any direct burden to the Euro-
pean taxpayers, but it the future it may
come to this.
The President of the European
Commission, Jose Manuel Barroso,
was more concrete of this issue. “The
European Investment Bank capital in-
crease was also mentioned already in
September by the Commission in the
State of the Union address and now we
see this in movement”, he said. “I think
it is a very cost-effective way of in-
creasing investment in SMEs and in
infrastructure. An increase of €10 bil-
lion would allow the EIB to increase
its lending capacity by €15 billion a
year for the next 4 years to around €65
billion per annum, instead of cutting it,
as it is happening now because of the
exposure to some vulnerable countries.
That is why we already discussed with
the EIB the possibility of using the
structural funds as a guarantee, so that
the EIB can indeed perform an even
more important role at the service of
the real economy”.
The EU summit had almost nothing
new to say about both burning issues,
the Greek position in the Eurozone
and the Eurobonds. Compromises and
decisions will then be postponed for
the EU summit towards the end of
June. In reality everybody is waiting for
the outcome of the Greek 'referen-
dum', because either way there will be
ground-breaking repercussions. Not
forgetting that on 31 May the Irish
are also voting in a referendum to ac-
cept or reject the fiscal pact and the
austerity it imposes.
EU summit: burning
issues still unresolved
European Commission President Jose Manuel Barroso (L) and European Council President Herman Van
Rompuy speak during a press conference after a meeting of European Union leaders in Brussels early 24 May
2012. France and Germany crossed swords over how to spur growth in the debt-stricken eurozone at an EU
summit tinged by plunging markets and the euro hitting a near two-year low. |AFP PHOTO/ JEAN-CHRISTOPHEVERHAEGEN
The best way
to recapitalise
Eurozone banks
The most probable need of recapitalisation of
Spanish banks has institutionalised the discus-
sion about a direct disbursement of European
Financial Stability Facility/European Stability
Mechanism (EFSF/ESM) money directly to
banks and not through governments.
In the case of the recapitalisation of the Greek
banks, the procedure used inflated the sover-
eign debt of the country and undermined the
prospects of Greece's return to markets. If the
same method is used for the Spanish banks, and
the recapitalisation money passes through the
exchequer inflating the sovereign debt, it is
more than certain that the interest cost Spain
will then be obliged to pay for its new debt will
reach the sphere of the unsustainable.
For one thing such a prospect will send Spain
directly to the intensive care unit, near Greece,
Portugal and Ireland.
And nobody wants that within or without Eu-
rozone. The issue has been going around for
quite some time now, but last week on the oc-
casion of Bankia's partial nationalisation by the
Spanish government, the possibility of direct re-
capitalisation of Eurozone's banks with
EFSF/ESM resources, became again a primary
subject matter.
On top of this the now openly discussed prob-
ability of a Greek exit from Eurozone, with un-
predictable repercussions on the entire western
financial system, poses in a much more pressing
manner the issue of allowing the EFSF/ESM
directly support the capital of Eurozone banks.
In such an eventuality it is more than certain
that the British and the Americans will take
care of their banks in an effective way.
In this way, it is understandable why the Euro-
pean Central Bank and the International Mon-
etary Fund have repeatedly expressed a positive
view on institutionalising a direct link between
the commercial and investment banks of Euro-
zone and the EFSF/ESM. In this case the Eu-
ropean stability mechanisms will need a
banking licence. Consequently this new 'bank'
might some time in the future be needing itself
more capital at the expenses of Eurozone tax-
payers and more so of those in Germany.
That is why Berlin has been vigorously repelling
the idea of giving a banking licence to the
EFSF/ESM. On top of that once the
EFSF/ESM is turned into a bank, there might
be more appetite for direct financing also to
governments. And again this will weight more
on German taxpayers.
Understandably the whole issue of Eurozone
banks' recapitalisation will be discussed tonight
in the EU summit, along with the other hot is-
sues of the issuance of Eurobonds to finance
large infrastructure projects. This could be a first
step towards sharing fiscal burdens between the
17 Eurozone countries. Again Germany is re-
fusing to accept even the discussion of such a
Note Book
By Dennis Kefalakos
New Europe |Page 5
27 May - 2 June, 2012
Charles Dallara, the CEO of the Interna-
tional Institute of Finance (IIF), a private
body regrouping all the major banking
firms of the world, speaking in an inter-
view repelled the 'analysis' by various
commentators who argue that Eurozone
banks do not run any grave danger from a
Greek exit from the common European
currency zone.
He stressed that such an eventuality will
destabilise not only the entire western
banking system but also the global econ-
omy. Dallara was representing the private
holders of the Greek debt, that is the
banks, in the three month negotiations
this winter which led to the Private Sec-
tor Involvement (PSI) in alleviating the
Greek debt by cutting it down to 46.5%
of its nominal value. The CEO of the IIF
speaking to the prestigious Italian finan-
cial newspaper 24 Ore asked the Euro-
zone to institutionalise urgently a
mechanism to guarantee banks deposits.
He stressed that a Greek exit form the
Eurozone would have automatic and
grave repercussions onto a large number
of major banks, the European Central
Bank and weak countries like Italy,
Spain and Portugal. He went on by say-
ing that the Eurozone authorities must
identify the problem and strengthen the
financial and legal powers of the Euro-
pean Financial Stability Facility and the
European Stability Mechanisms
(EFSF/ESM) so as they have the power
to inject directly funds to commercial
and investment banks. He concluded his
interview by saying that the Eurozone
has to adopt its brutal fiscal correction
policies so as it doesn't kill any traces of
growth. It seems that the fears about the
potential dangers of a Greek exit from
the Eurozone overtook the European
stock markets and turned their positive
readings into the red towards the after-
noon of Friday, 25 May.
The same attitude prevailed also to the
money markets and the euro which was
gaining a few cents with the dollar re-
turned to negative grounds and barely
kept the 1.25 threshold parity with the
American monetary union. If nothing
changes the climate over the European
markets, things will continue to be nega-
tive all next week.
Brutal fiscal correction kills growth
As EU leaders met on 23 May to discuss
which course of action should be taken to
ensure economic growth, Germany and
France were already at loggerheads over
the issuance of ‘Eurobonds’, which would
be underwritten by all 17 eurozone states.
This is one of several options that the
EU and eurozone countries can ponder
over, as calls to implement measures to
boost growth increased following the G8
summit at Camp David, where budget
doves can claim a small victory in that
there was a change of emphasis from
purely austerity measures. The declara-
tion in Washington makes it clear that the
re- energising economies should now to
be priority of governments, while recog-
nising different approaches. “Against this
background, we commit to take all neces-
sary steps to strengthen and reinvigorate
our economies and combat financial
stresses, recognizing that the right meas-
ures are not the same for each of us.”
The leaders were keen to stress that its
does not need to be a choice of austerity
or growth, and that both can be part of
the same package as this line in the com-
muniqué suggests. “We welcome the on-
going discussion in Europe on how to
generate growth, while maintaining a firm
commitment to implement fiscal consoli-
dation to be assessed on a structural basis.”
Growth figures do not make good read-
ing for the first quarter of 2012, as Euro-
stat figures revealed the eurozone in a
state of inertia at 0%, with the EU crawl-
ing slowly behind on 0.1%
Alongside Eurobonds, some of the al-
ternatives that the EU has include in-
creased paid in capital to the European
Investment Bank (EIB), and French Pres-
ident Francoise Hollande has even sug-
gested that the remedy to cure the recent
downgrading of several Spanish banks
would be to recapitalise them with the
bailout fund.
EU Project Bonds may also be an op-
tion as they were agreed upon in principle
at the Copenhagen summit on the 1-2
March, where it is hoped that the bonds
will increase demand for the capital debt
markets. It is an initiative that will be fi-
nanced by the EIB, in the attempt to at-
tract long investors such as insurance and
pension funds.
Imaginative ways of creating growth
will be necessary as dipping into the pub-
lic purse to pay for stimulus measures
could be deemed to be unrealistic, with
Eurostat declaring that the collective debt
of all the EU member states stood 82.5%
of GDP by the end of last year. For ex-
ample when Spain informed Brussels that
they could not keep to the 3% of GDP
agreed in the fiscal pact, the markets were
unforgiving in their bond yield rates.
Janis Emmanouilidis, a senior policy
analyst with the European Policy Centre,
opined: “First of all there will not be a re-
sult from the 23 May meeting, and its
more of a precursor to the June summit.
The question is to what level the actual
effect on growth will be from the choices
made, it’s not about an emphasis on one
decision on a single way of thinking , its
about producing a package.”
“The devil is really in the detail of the
measures for growth to be used, the mem-
ber states have to reduce public expendi-
ture and deficits as the overall levels of
debts are unsustainable. There will be no
miracle happenings for economies such as
Greece and Portugal, that will be a long
process that will take years.”
Looking to the future it’s the PIIGS
economies that will need to be pulled up if
the EU is to recover sustain ably.
Emmanouilidis added: “If we have a
growth pact that targets the whole of the
EU the effects will not be great. Part of
the structural problem for EU member
states is that there has not been a conver-
gence of European economies, the diver-
gences has contributed to the crises, and
the vulnerable countries are the ones that
need help.” This may come from more or-
ganic measures, such as robust free trade
agreements mentioned in the Camp
David communiqué, in support of the
WTO’s anti-protectionist stance. A free
trade agreement between the EU and the
US has been suggested, where a High
Level Working Group on Jobs and
Growth that was set up at the November
2011 EU-US summit continues to nego-
tiate terms, with trade regulations already
reduced in agriculture. Fitch Ratings, a
unwavering supporter of hawkish deficit
reduction, in their “Basecase Scenarios”
paper, outlined the direction they believe
the eurozone needs to go, with policy-
makers needing to implement additional
measures that will facilitate a smoother
path to growth.
In the financial sector, a greater pooling
of the responsibility for financial supervi-
sion is a necessity, with an increased su-
pervisory role for the European Banking
Authority, with greater fiscal sharing to
enhance bail-out funds.
The ECB should continue with its ex-
pansion of its balance sheet, with more
credit lending available, as long as the
private sector and investors are reserved
in providing liquidity to solvent financial
Charles Dallara, Director of the Institute of In-
ternational Finance (IIF). |EPA/ELIZABETH RUIZ
German Chancellor Angela Merkel and French President Francois Hollande pictured at an informal
dinner for the heads of State or government of the European Union, Wednesday 23 May in Brussels.
The two leaders are at loggerheads over the issue of Eurobonds. |BELGA PHOTO BENOIT DOPPAGNE
By Peter Taberner
By Petros Papoulakos
Austerity and growth: a fine balancing act
Page 6 | New Europe
27 May - 2 June, 2012
CHICAGO– Turkey has recently been at the
forefront of international economic and politi-
cal debates. On the one hand, despite the eco-
nomic crisis engulfing neighboring Europe,
Turkey remains the world’s second-fastest
growing economy, after China. On the other
hand, there is almost no issue on the global
agenda – from Iraq and Afghanistan to Soma-
lia, Iran, and the Arab Spring, and from sus-
tainable development to a dialogue among
civilizations – on which Turkey is not playing a
visible role.
This is a rather new phenomenon. Until a
decade ago, Turkey was regarded as no more
than a staunch NATO ally. That began to
change in 2002, when an era of political stabil-
ity dawned, giving rise to a vision for a stronger
Turkey – and a firm commitment to realizing
that vision.
To this end, Turkey’s governments since
2002 implemented bold economic reforms that
paved the way for sustainable growth and pro-
vided a firewall against the financial crisis that
hit in 2008. As a result, in less than a decade,
GDP has tripled, making Turkey the world’s
16th largest economy. Moreover, the country
benefits from strong public finances, prudent
monetary policy, sustainable debt dynamics, a
sound banking system, and well-functioning
credit markets.
At the same time, we expanded the scope of
individual rights, which had long been subor-
dinated to security concerns. We streamlined
civil-military relations, guaranteed social and
cultural rights, and attended to the problems of
ethnic and religious minorities. These reforms
transformed Turkey into a vibrant democracy
and a more stable society, at peace with itself
and able to view its external environment in a
different light.
Quite simply, we stopped viewing our geog-
raphy and history as a curse or disadvantage.
On the contrary, we began to regard our loca-
tion at the crossroads of Europe, Asia, and the
Middle East as an opportunity to interact si-
multaneously with multiple players.
As a result, we began to reach out to coun-
tries in our neighborhood and beyond.We tried
to expand political dialogue, enhance economic
interdependence, and strengthen cultural and
social understanding.And,while ten years is too
short for a definitive assessment of such an am-
bitious policy, we have undoubtedly covered
considerable ground. For example, we have
quadrupled our trade volume just with our
On several occasions, we have also been in-
strumental in facilitating peace and reconcilia-
tion. But, what is more important, Turkey has
become a model of success that many countries
around us now seek to emulate.
And yet, until a year or two ago, some polit-
ical pundits were asking, “Who lost Turkey?”or
“Whither Turkey?”– the assumption being that
Turkey had shifted its foreign-policy axis away
from the West. In fact, Turkey’s external orien-
tation has remained constant, because it rests
on the values that we share with the free world.
What has changed is our increased assertive-
ness in our efforts to ensure greater stability and
human welfare in our region, evident in our ad-
vocacy of freedom, democracy, and accounta-
bility not only for ourselves, but also for others.
This approach has been reflected in the Arab
Spring, which Turkey ardently supported from
the outset. We have not hesitated in siding with
those fighting for their rights and dignity. In-
deed, in countries like Tunisia, Egypt, Libya,
and Yemen, which are now attempting to in-
stitutionalize change,Turkey is their most active
partner, sharing our own experience and pro-
viding tangible assistance in the form of eco-
nomic cooperation and political capacity
In Syria, on the other hand, the revolution
has not yet come to fruition, owing to the
regime’s brutal repression of its opponents.
Every day, scores of people there die in pursuit
of dignity. Turkey is doing all that it can to al-
leviate the Syrian people’s suffering. Unfortu-
nately, the international community as a whole
has so far performed poorly in providing an ef-
fective response to the crisis.
Turkey’s position on Iran’s nuclear program
has been similarly clear: we are categorically op-
posed to the presence of weapons of mass de-
struction in our region. Attempts to develop or
acquire WMDs might well trigger a regional
arms race, leading to further instability and
threatening international peace and security.
That is why we have always called for the es-
tablishment of a WMD-free zone in the Mid-
dle East, including both Iran and Israel.
We support Iran’s right to use nuclear energy
for peaceful purposes. But Iran’s program must
be transparent, and its leaders must assure the
international community of its non-military
nature. The key is to close the confidence gap
and pave the way for meaningful dialogue. In
April, we hosted the inaugural round of revived
talks between the international community and
Iran. Let us be clear: there is no military solu-
tion to this problem. Military intervention
would merely further complicate the issue,
while creating new layers of conflict in our re-
gion and beyond.
In this and other matters, Turkey strives to
act as a “virtuous power,” which requires us to
align our national interests with values such as
justice, democracy, and human dignity, and to
achieve our foreign-policy goals through mu-
tual cooperation rather than coercion.
Effective multilateralism is a key facet of this
vision. Turkey served as a member of the
United Nations Security Council in 2009-
2010, and is now seeking another term in
2015-2016. Given the crucial importance of
developments in our part of the world, Turkey’s
contribution to the Council’s work promises to
be highly valuable.
In 2015, moreover, we will assume the pres-
idency of the G-20, and we are committed to
using our means and capabilities to make it a
more effective organ of global governance.
Turkey’s internal transformation over the
past decade has placed it in an ideal position to
benefit the region – and thus the global com-
munity. While we have accomplished much al-
ready, more is required of us. Given the
challenges of our neighborhood, and the re-
gion’s central role in global affairs, Turkey will
not refrain from taking on new responsibilities.
Abdullah Gül is President of Turkey.
Copyright: Project Syndicate, 2012.
Turkey’s new course
US President Barack Obama shakes hands with his Turkish counterpart, President Abdullah Gul, at the
NATO summit at McCormick Place in Chicago, on 21 May, 2012. |AFP PHOTO/ TURKISH PRESIDENTAL PRESS OFFICE
By Abdullah Gül
Not long ago, there was a popular
joke. What’s the difference between
Ireland and Iceland? One letter and
six months.
Whether the joke was funny is de-
batable but it certainly isn’t now. The
causes of the two countries’ economic
woes were remarkably similar. Both
had deregulated their financial serv-
ices and let the banks run amok. In
Ireland, major banks were able to loan
up to three times the national income.
Iceland’s banking industry acquired
assets worth 10 times the country’s
gross domestic product.
Yet the way Reykjavik and Dublin
have dealt with their crises differed
radically. Iceland allowed its banks
collapse and default on their loans. Its
former prime minister and some ti-
tans of finance are now on trial. Ire-
land’s government, on the other hand,
decided to guarantee the bank’s de-
posits with the money of its taxpayers.
Nobody has been held to account for
the reckless behaviour of the super-
Iceland is now faring better than
Ireland. This is due in no small part to
how Iceland is not part of the Euro-
pean Union and still retains its own
currency. Ireland does whatever its
slavemasters in Brussels and Frankfurt
tell it to do.
Fortunately, one thing the Irish
haven’t lost is their sense of humour.
The funniest thing I have seen lately
was on a website about the EU’s fiscal
treaty set up by the Irish Business and
Employers Confederation (IBEC). As
part of its campaign for a Yes vote in
the imminent referendum (31 May),
IBEC is underscoring how “Ireland
keeps Europe ticking”. This boast is
based on how the country “exports
more than 1 million heart stents per
I wonder did some “public relations”
consultant come up with that gauche
metaphor. If so, IBEC should proba-
bly withdraw the juicy fee promised to
that consultant and instead give him
or her a grant to become a stand-up
comedian. The Celtic Tiger has now
become the Celtic Ticker.
Enda Kenny, the Irish prime minis-
ter, was elected last year on a promise
that his party, the centre-right Fine
Gael, would “burn the bondholders”.
The promise that he would valiantly
take on French and German bankers
who had supplied too much credit to
the Irish banking system in the boom
years has not materialised. “We will
not have ‘defaulter’ written on our
foreheads,” Kenny has said.
There are more appropriate words
that should be branded on his brow.
How about “coward” or “cheat”? Not
only has he broken the pledge he
made to voters, he has so far refused
to take part in a live TV debate with
opponents of the fiscal treaty. The
only plausible explanation for his re-
fusal is that he is too scared to do so.
It is customary for the Irish elite to
avoid serious debate on crucial issues.
The country signed up to the euro –
thereby sacrificing control over its
monetary policy – without any proper
discussion about the wisdom of this
The referendum in a few days’ time
says nothing about an Irish commit-
ment to democracy. The Irish Times
has documented how the Dublin gov-
ernment connived with its EU slave-
masters to find a formula that would
not necessitate putting the fiscal treaty
to a vote. Máire Whelan, Ireland’s at-
torney general, eventually recom-
mended that a referendum should
take place. Her advice has not been
published but it is blindingly obvious
that it was motivated primarily by po-
litical expediency. She knew well that
the “No” side was waiting to challenge
the treaty in court if it was put on the
statute books without a referendum.
She knew that – unlike her political
masters – not all Irish people are will-
ing to be slaves.
I fervently hope that my compatri-
ots will reject this pernicious treaty.
Yet I am not under any illusions about
the effect of a “No” vote. A Dublin
uppercut won’t deliver a knock-out
blow to the EU’s austerity agenda. It
will, however, discomfit the establish-
ment and underscore that the danger-
ous economic experiment being
undertaken across the Union is reviled
by large sections of public opinion.
Activists in Greece have been
known to hold placards saying “we are
not Ireland; we resist”. The activists
had a point: for the most part, my
compatriots have proven too pliable.
When Irish politicians have recited
the Thatcherite mantra “there is no al-
ternative”, the public has generally
rolled over. There have been some
protests in Dublin but they have been
pathetic when compared to the mass
demonstrations in Athens and
One hundred years ago this
month, the Irish trade union move-
ment decided to establish the Labour
Party following a proposal by James
In a speech to mark this anniver-
sary, former Labour leader Dick
Spring has recalled that 345,000 had
emigrated from Ireland in the decade
before that decision.
Labour is the junior party in the
Irish ruling coalition today and has
betrayed the socialist principles to
which Connolly dedicated his life.
Once again, Irish people are quitting
the country in droves.
Less than four years after the deci-
sion to found Labour, Connolly
played a leading role in a revolution
against British rule. He was captured
and executed by forces loyal to the
I don’t believe that Connolly’s re-
bellious spirit will ever be rekindled by
Labour. But the spirit remains vibrant
among many community activists in
Ireland’s towns and cities. By saying
no to the EU’s diktats, the Irish can
show that we’ve stopped rolling over.
And started to resist.
New Europe | Page 7
27 May - 2 June, 2012
Come on, Ireland: resist
the EU’s diktats
By David Cronin
“In the June election the Greek voters will choose to ei-
ther remain in the euro area or exit from it”, the British
Prime Minister David Cameron said last week from the
United States, where he was attending the G8 and the
NATO summits.
At the same time he asked the Eurozone leaders to draft
strong contingency plans for every possible outcome in
Athens. He went on by stressing that “now is the time
to send a strong message to Greeks that they have to
either choose Eurozone and apply the needed economic
austerity measures or vote differently and abandon the
single money zone”.
The British PM's statement that turns the 17 June leg-
islative elections in Greece into a referendum for the
country position in or out of Eurozone, comes after
similar comments by the German Chancellor Angela
Merkel, who in a telephone conversation with the
Greek President Karolos Papoulias is reported to have
asked him to hold a referendum with this question, si-
multaneously with the election. Later on a representa-
tive of the the Berlin government commented that the
Chancellor did not said exactly that to the Greek Pres-
ident. Merkel, however, is not the first German digni-
tary to have told the Greeks that in the next election
they are about to answer an existential question, in ref-
erence to their country's position in the Eurozone. The
German minister of Foreign Affairs Guido Westerwelle
and his colleague of Finance, Wolfgang Schäuble, have
on different occasions said exactly this, that the Greeks
are now voting for their position in the Eurozone.
Schäuble also clarified that they lie to Greeks those who
tell them that it is possible to stay in the Eurozone
without applying the needed austerity measures. Schäu-
ble went on and observed that some people in Greece
believe that they can avoid austerity because, “those in
Brussels cannot do without Greece”.
He concluded that an exit of Greece from Eurozone
can be avoided, but this country has to honour its obli-
gations. In a different climate however vis-a-vis Greece
was the new French minister of European Affairs,
Bernard Cazeneuve. In no case he made any reference
to Greece's exit from Eurozone. He stressed that, “we
send a strong message of support to Greece ” and he
added “we have to save Eurozone and Greece has to stay
in it and we are working hard so that Greece has the
backing it needs in its efforts”. It wasn't like that how-
ever with the newly appointed French Foreign Minis-
ter. Speaking in an interview on a French radio station
the new Laurent Fabius noted that “we (in France) have
to explain without arrogance to our Greek friends that
if they want to remain in the euro – and I think that is
what the majority wants – they cannot support parties
that will make them abandon it.”
As for the Francois Hollande, the French President he
refrained from 'advising' the Greeks how to vote in the
next election but he confirmed that the country has to
honour its obligations. It seems that the generalised 'ad-
vice' to Greeks on the referendum character of their
next legislative election, was formulated duringin the
G8 meeting in Camp David, hosted by the American
President Barack Obama. While commenting on
Greece Obama said that the country's position is within
Eurozone. He avoided however to give advise but he
asked for protection against a negative development in
Greece. He said :"We've got to put in place firewalls
that ensure countries outside of Greece aren't harmed
just because markets are skittish and nervous...".
There is no doubt that the entire world prefers Greece
to stay in the euro area and they draw the attention of
voters in this country to think twice before casting their
Enda Kenny talks to journalists as he leaves after a meeting of European Union leaders in
Brussels, May 24 2012. The Irish prime minister was elected on a promise to "burn the bond-
Telling Greeks how to vote
Page 8 | New Europe
27 May - 2 June, 2012
The Digital
One of the relevant aspects of the New Horizon 2020 is
the challenge of the Digital Europe. Information and
communication technologies (ICT) now permeates vir-
tually all aspects of our lives. The Digital Europe is
strongly connected with our desire as a collective society
for a prosperous and competitive economy, a sustainable
environment, and a more democratic, open, healthy soci-
ety. The Digital Europe should be seen as a key positive
element, empowering EU citizens, growing businesses
and helping us build an open, innovative, secure and sus-
tainable innovation society.
More than ever, we need a clear, balanced Digital Europe
based on a full understanding of the policy issues and of the
context in which they are adressed. A pragmatic strategy is
needed for sustainable growth and prosperity so that Eu-
rope can respond to the following main challenges:
- Transforming Europe into the high skill / high employ-
ment economy needed in a globalised environment;
- Tackling the effects of an ageing population while im-
proving the major services for the public;
- Doing so in a way that takes account of foreseeable ex-
penditure and environmental constraints;
Is is very important that the European Comission is able to
understand the extreme importance of these issues in terms
of promoting a real effective Digital Europe understood
by the Citizens as a decisive enabler of change.
The effective construction of a Digital Europe demands an
Action Plan centered in the main following priorities:
- The Innovation Economy - driver of future wealth;
- The Knowledge Society – participation for all;
- Green ICT – support for an eco-efficient economy;
- Next Generation Infrastructure : balancing investment
with competition;
- Soft Infrastructure : investing in Social Capital;
- SMEs and ICT – supporting Europe´s small enterprises;
- A single information market – enabling cohesion and
- Transforming Egovernment – rethinking delivery of pub-
lic services;
- Online trust – a safe and secure digital world;
- Clear leadership – rethinking the EU´s policy making
The challenge of the Digital Europe demands an effective
Partnership Contract between all the actors (States, Uni-
versities, Companies, Civil Society), in order to build a real
Strategy of Confidence in the implementation of the dif-
ferent policies. The focus on Innovation and Knowledge as
the drivers of creating added value with international dis-
semination is a unique challenge that may be the answer to
a new way of interaction between those who have the re-
sponsibility of thinking and those that have the responsi-
bility of producing goods and services.
In the New Global, Innovation Society, the Digital Europe
has a central role to play towards a permanent insatisfac-
tion with the creation of value and a focus on creativity. In
a time of change, the Digital Europe can´t wait. The Dig-
ital Europe must confirm itself as an “enabler actor” in a
very traditional system, introducing in the economy a cap-
ital of trust and change that is essential to ensure a central
leadership in the future.
Francisco Jaime Quesado is the General Manager of the
Innovation and Knowledge Society in Portugal, a public
agency with the mission of coordinating the policies for In-
formation Society and mobilizing it through dissemination,
qualification and research activities. It operates within the
Ministry of Science, Technology and Higher Education
New Europe content partner
By Francisco Jaime Quesado
Insurance giant Prudential are agonis-
ing whether to pull out of the EU al-
together in protest at the Solvency II
regulation, which they deem as un-
This is due to the guidelines’ insis-
tence that companies stockpile more
capital, with the aim to create a more
sensible risk management structure
that will increase the protection for all
The Prudential believes that this
will hamper their lucrative US busi-
ness arm, Jackson National Life, if the
EU do not recognise US insurance
laws as being equal to their own, as
this would force Jackson National Life
to have to hold more capital than its
local competitors.
So far no decision has been made,
and the Prudential have indicated that
a move to Asia could be on the hori-
zon if its lobbying campaign to gain
concessions is unsuccessful. Solvency
II is due to come into effect in January
2014, and its expected that affected
companies will benefit from a five year
grace period.
A spokesperson for the company ex-
plained: "Solvency II represents a
major overhaul of the capital adequacy
regime for European insurers. We are
supportive in principle of the develop-
ment of a more risk-based approach to
capital but are concerned about some
aspects of the latest set of Solvency II
proposals. If implemented in certain
ways, these proposals could have a sig-
nificant impact on our US business,
Jackson’s, ability to compete with do-
mestic US insurers”
The Prudential say they are com-
mitted to working with officials in Eu-
rope in trying to come to a sensible
“With the continued delays to pol-
icy development, the final outcome of
Solvency II remains uncertain. We are
continuing to engage directly with our
peers, policymakers and regulators so
that the industry ultimately operates
under a fair, effective and reasonable
capital adequacy regime. Lack of cer-
tainty over the policy content and
timetable continues to impede the in-
dustry's ability to prepare fully for the
new regime.” The spokesperson added.
“Therefore, in parallel to continuing
our preparation for eventually imple-
menting the Solvency II rules, we also
evaluate actions to mitigate the possi-
ble negative effects. We regularly re-
view the range of options available to
us to maximise the strategic flexibility
of the Group. Among these options is
consideration of optimising the
Group’s domicile, including as a possi-
ble response to an adverse outcome on
Solvency II."
The regulation has been brought in
to replace Solvency I, which was in-
troduced in the early seventies, this al-
lowed for differing regulatory regimes
in different countries, with no de-
mands regarding governance and risk
management within company prac-
Solvency II aims to cover these areas
with the three pillars that the regula-
tion is based on. Pillar one focuses on
capital adequacy, and defines what a
company needs to do to be considered
solvent in ensuring that the policy
holder is fully protected.
The Solvency Capital Requirement
is the level of capital requirement that
will give 99.5% confidence to cover all
liabilities for the following year. Addi-
tionally the Minimum Capital Re-
quirement is the level of capital
necessary to ensure that a national su-
pervisor has 85% confidence that for
the next 12 months there are sufficient
funds available.
Pillars two and three are often re-
ferred to as pillar five due to some of
their similarities, with the second pil-
lar attacking governance issues and
risk, focusing on risk-management
strategy, risk policies and processes,
and internal reporting procedures.
The third pillar aims to promote
greater transparency in the industry
combining public and private report-
ing, this will comprise of two methods
of providing information to improve
market discipline. The Solvency and
Financial Condition Report, which
would be made public, and the Regu-
lar Supervisory Report, a private re-
port between a firm and its national
supervisor. Europe’s insistence on Sol-
vency II asks the question just how
balanced has regulation been on the fi-
nancial industry since the 2008 crash.
Paul Clarke, global Solvency II
leader for Price Waterhouse Coopers
remarked: “I would start by saying that
I support the ethos behind Solvency
II, and the pillars on capital adequacy,
greater protection for the policy holder
and transparency makes sense, these
practices are right. Generally since the
crash Europe has been heading in the
right direction in terms of the balance
of regulations. “
“It is necessary to update Solvency I
which was no longer fit for purpose.
Although the work on Solvency II re-
ally predates the 2008 financial crash,
and there has been general encourage-
ment that more caution was needed as
the amount of capital being used for
risks was out of proportion.”
“Although the insurance industry
would say that it has weathered the fi-
nancial crises far better in comparison
to within the banking sector, and it has
survived in relatively far better health.”
Prudential mulls European future
Prudential: the insurance giant believes the EU's Solvency II regulation is uncompetitive | EPA/YM YIK
By Peter Taberner
New Europe | Page 9
27 May - 2 June, 2012
or die
They make a desolation and call it… solidarity. As TV news
crews filmed middle class Greek pensioners raiding rubbish
bins for food, not being able to buy any, Martin Schulz ar-
rived in Athens to articulate the solidarity so deeply felt in
Brussels towards the austerity battered Greeks. He gave a
speech, essentially saying, “Oh dear, aren’t things terrible, but
do what you’re told or else.”Of course, he went on for con-
siderably longer than that, but that is the sum total of his
message. Or perhaps it was a rare sighting of that unusual
beast; European Values.
This is the grotesque nature of the European Union today,
where one nation dictates to others, where the home of
democracy can be threatened with Armageddon for the
crime of not voting the right way in general elections.
This is the union that toppled the Greek Prime Minister
for uttering the ‘R’ word; referendum. Papandreou wanted
one to gain the public seal of approval for the bailout deal he
had negotiated. Well as far as you can negotiate with a gun
at your head. For that sin Greece was rewarded with regime
Oh, the anger, the outrage, the fury from Brussels at his sug-
gestion that putting the deal to the public was needed, not
only for political reasons, but because, well, democracy and
all that unimportant stuff.
Now we can see the wisdom in Papandreou’s suggestion and
that the consequences of keeping the public away from pol-
icy were even worse than a referendum.
The public across Europe are voting against austerity and
it’s easy to see why. The people know that the current crisis
is a result of the financial crash, and that was because the
politicians, kneeling at the altar of business, permitted the
financiers to run wild, without rules, and they blew it, they
crashed the world.
And the EU has decided that the poor of the continent must
pay back the bankers the money the bankers gambled away.
Austerity is seen by the poor as a punishment for the crimes
of the wealthy. Who, in their right mind wants to be in a
union of this value? Who thinks that such a union can last?
Well, they do in Brussels where the cry of ‘more Europe!’ is
the new magic mantra. What we need is better Europe, one
that is more bottom-up, one that puts citizens first.
We also need to do something about leadership. The mem-
ber states cannot be trusted on this vital matter. They have
shown a desire to pick the weakest, most pliable candidates.
We also need a central point, a single European president, if
you like. We need someone, elected on a manifesto to be Mr
or Ms Europe. The public have been looking for guidance,
inspiration, someone who can talk to them and represent
them. Instead, they saw Barroso and Van Rompuy.
I make the suggestion that candidates do not stand on be-
half of a political group. One cause of the cancer in the Eu-
ropean body politic is the political group who stitch up deals
in closed offices, remote meeting places. These people have
had another idea, the promotion of pan-European political
parties.Yet another top-down idea that will alienate the elec-
torate further, increasingly distancing them from their po-
litical representatives. Isn’t it funny, how there’s a need for
deep austerity but out politicians and their parties seem
strangely exempt from cuts.
But if we don’t make root and branch changes to the way the
EU is run, we’re doomed.
Constructive Ambiguity
By Andy Carling
Growth is today at the heart of the EU
and global concern. Nevertheless, in order
for this objective to gain substance it has
to be directly linked to investment which
is vital for growth and job creation and a
necessary precondition for securing a
competitive EU economy and laying the
foundations for a sustainable economic
recovery and economic cohesion.
My own-initiative report "Attractive-
ness of investing in Europe" aims to put
forward innovative methods and coordi-
nating instruments targeted at attracting
investments in Europe, taking advantage
of the benefits the euro, the structural
funds and the internal market offer, and
exploiting the comparative advantages of
the EU regions to attract foreign direct
investment (FDI) and encourage domes-
tic investments. The report urges for an
integrated and coherent strategy at both
national and European level in parallel
with ensuring fiscal consolidation and
restoring confidence in international mar-
kets. This strategy will strengthen the ef-
forts of the EU towards achieving
sustainable growth especially in countries
that face weak growth or recession as is
the case in Greece.
The EU remains the first investment
destination globally but it faces growing
competition from emerging countries
while the prolonged sovereign debt cri-
sis is weakening this position. I have
proposed the creation of an ad hoc Eu-
ropean Observatory for foreign direct
investments, to strengthen the coordi-
nation of policies in this field and, si-
multaneously, provide a better
monitoring of the policies applied, eval-
uate the progress achieved and provide
the appropriate elements to promote
Europe as an investment destination.
That observatory, established within the
European Commission and operating
in close cooperation with Eurostat,
could constitute a complementary
mechanism to the scoreboard (designed
in the framework of the new economic
governance package) in order to better
assess macroeconomic, commercial and
regional imbalances among Member
States, focusing particularly on indica-
tors that affect attractiveness of foreign
direct investment and their impact on
the real economy and employment in
the EU regions.
Towards that direction, I have stressed
the importance of negotiating and con-
cluding free trade agreements (FTAs)
with major partners as a key to opening
new markets for goods and services and
increasing investment opportunities. Eu-
rope must also play a key role in driving
forward the global agenda, on open and
free trade, international financial regula-
tion, coordination in the fields of taxation
and monetary stability in order to protect
its competitiveness.
The report calls on the Commission to
prepare a communication on the attrac-
tiveness of investing in Europe, in com-
parison with our main partners and
competitors, identifying the advantages as
well as the weaknesses of the EU and de-
velop an integrated strategy and specific
policies and recommendations, to im-
prove the EU’s investment environment.
The report also highlights the impor-
tant role that innovative financial instru-
ments can play, such as project bonds and
the ones based on public-private partner-
ships and sovereign wealth funds.
I also advocate a greater role for the
European Central Bank in the secondary
debt markets in order to inject liquidity
and reduce excessive financing costs that
many countries face, as well as the Euro-
pean Investment Bank for national or
cross-border investment. At the same
time, the report is calling for greater fiscal
coordination on both the revenue and ex-
penditure sides, including coordination of
tax systems and social imbalances be-
tween Member Sates and strengthening
cooperation of economic actors and com-
plementarities between EU economies.
Making Europe an attractive place to
invest and work requires ensuring that
businesses can compete openly and fairly.
The Single market is one of the EU’s
most significant advantages in develop-
ing a friendly and motivational environ-
ment for businesses and consumers.
Moreover, the report highlights the im-
portance of the completion of the internal
market given its added value in all EU
and Member States' policies, such as en-
couraging institutional investors to par-
ticipate in European venture capital funds
that can particularly benefit start-up com-
panies, and hence boost entrepreneurship
and job creation.
Fully exploiting EU structural funds, by
reducing bureaucracy and increasing effi-
ciency, can contribute significantly to a
friendly investment environment in dif-
ferent regions. The EU and Member
States should also invest more on educa-
tion, research and innovation, highlight-
ing their comparative advantages, given
Europe's significant unexploited growth
potential in those fields.
It is time for Europe to set "investing"
at the core of the EU2020 Strategy.
Rodi Kratsa-Tsagaropoulou (EL,
EPP) is a member of the European
Parliament’s Economic and Monetary
Affairs Committee.
Investing in Europe
Europe needs to become more attractive
for investments, both foreign and local
We must put in place steps to growth say EU leaders.|EPA/BORIS ROESSLER
By Rodi Kratsa-Tsagaropoulou MEP
Page 10 | New Europe
27 May - 2 June, 2012
Adam Foulds is a promising young British nov-
elist and poet who has received nominations and
awards for the most prestigious literary awards,
including winning the 2011 EU Literature Prize.
Often described as intense, Foulds has an open
manner and a quiet seriousness. It is in his work
that intensity shows, as he tries to write some-
thing that will produce a lasting effect on the
After discussing his latest work, a short story
for Granta magazine, at Sterling’s bookshop in
Brussels, the author spoke to New Europe.
How did you feel about winning the EU
It made a difference to me personally, as I
came to Brussels to receive the prize and I
was able to spend time with the other writ-
ers and make their acquaintance, and get a
sense of life for novelists in other languages
and countries. I think winning was less sig-
nificant for me than them, because they
come from small language countries, like
Montenegro, Malta and others. For them it
is a significant moment of recognition out-
side of their country and an opportunity for
translation. The prize does sponsor transla-
tion, that’s a very big part of the value of the
prize and it helps enormously.
What did you learn about a writer’s life in Eu-
Well,being a fiction writer,wherever you are is
always challenging.You’re unlikely to live from it,
financially, say if you’re Montenegrin, numeri-
cally, it’s impossible, so a lot of the challenges are
the same. But what was great about it was the
very strong sense of a kind of fraternal warmth
between writers from very different places.
There’s solidarity between us.
Is European literature in good health?
That’s hard to say. The British publishing
scene has only a limited space for works in
translation but it seems to be in good health
from seeing some of the people I met and read-
ing their works, but it is impossible to general-
ize beyond that.
There’s a rethink over copyright becoming
digital, what does this mean for an author?
The life of an author is much more interac-
tive than it used to be and there’s more events
like this author’s talk going on. A lot of authors
tweet and use social media, but I don’t myself. I
would say the big changes in publishing are
nothing for authors like myself to worry about,
literary, mid-lit as we’re called. Copyright isn’t
much of a problem as the numbers are so low,
piracy isn’t really a problem. I think the people
who are most worried are the traditional ink and
paper publishers, they’re the ones having to deal
with how things are changes. In general, the
book industry has learned from the music in-
dustry and have done a pretty good job of pro-
tecting copyright.
It’s hard to earn a living from just writing,how
do you balance creating and earning?
I teach a little, I enjoy doing it,, but really, all
professions have a struggle with the work life
balance.But writing full-time is not a good thing
of itself, I think it’s good to go out and think
about other things, it allows time for things to
gestate and when the pressure builds, you go
back to your desk.
When I look at a lot of more popular fiction,
it often seems to have been written with half an
eye on a film script,you’re not like that,your work
is an end of itself,hot a pitch for another format.
It’s worked out ok so far.I’ve sold a few books.
There are moments when I feel, wouldn’t it be
nice to be a different type of writer, a less ambi-
tious one, but it’s not what I’m interested in.
Are writers valued enough?
Well,I am! If I’m being honest in what I’m try-
ing to achieve or experience myself, then that’s a
minority pursuit and inevitably it breaks you out
of your normal perceptual range.Good art is dis-
turbing,is one way of putting it,but not everyone
wants to be disturbed, to go through the emo-
tional maelstrom of Beethoven’s Fifth or Wuther-
ing Heights.But for those who like that intensity
and steer by it in some ways, it’s essential.
Any advice for a youngster beginning to feel
the urge to write?
Read.Read a lot and the classics.They’re often
a little archaic,but they have lasted,shown them-
selves to have a value that lasts, so read them.
The promotion of literature
EU prize winning author, Adam Foulds talks to New Europe
By Andy Carling
Adam Foulds and his EU Prize winning novel,
The Quickening Maze.|ANDY RAIN
The leader of the Serbian Progressive
Party (SNS), Tomislav Nikolić, was
elected president of Serbia on 20 May,
managing to capitalise on the compla-
cency of his counterpart's supporters and
accomplishing a major upset.
According to the official results, Nikolić
won 49.54% of votes, while the incumbent
president and leader of the centre-left
Democratic Party (DS), Boris Tadić, got
Nikolić announced in his victory speech
that Serbia will continue its progress to-
wards the EU, but then scheduled a flight
to Moscow.
In a reprint of their premature statement,
presidents of the European Council and the
European Commission, Herman Van
Rompuy and José Manuel Barroso, stressed
that the “Serbian people have given a very
clear signal of support to the continued Eu-
ropean orientation of government policy”
and urged “President Nikolić to pursue this
direction with particular determination in
order to achieve the additional progress that
would allow the European Commission to
recommend the opening of accession nego-
tiations and the European Council to take
this decision”.
Nikolić's election, despite many fears,
seems not to interfere much with the for-
mation of the next Serbian government.
Though, according to the Serbian consti-
tution, the president has competence to
give a mandate for forming a government,
meaning that Nikolić could influence the
process, he pledged to give the mandate to
a person which first comes to him with a
parliamentary majority. He even openly
asked Tadić to make a decision whether
he wants to be the prime minister and of-
fered to give him a mandate to form a
government (see page 30).
Nikolić also resigned his post as SNS
president on 24 May and left the party,
saying that he wants to be the president
of all Serbia's citizens. He is doubtlessly
aware that his party does not have capac-
ity to fill in the required places in a po-
tential new government, but also that,
regardless of his resignation, he would be
perceived as responsible for some critical
and painful reforms Serbia is deemed to
With the option of taking the moral
high ground, and with no responsibility
and limitless potential to criticise over the
course of the next five years, building and
strengthening his party structures and rat-
ings in the process, Nikolić's best long-
term option would be to allow the DS to
form a pro-European government. That
would also ensure him international ac-
ceptance and give him a statesman-like
reputation, possibly even a sort of political
amnesty for his and his party members'
It should be remembered that Nikolić
served as a deputy to Vojislav Šešelj, who
is currently indicted for war crimes before
the ICTY in the Hague, with the title of
Chetnik Duke. He also served as deputy
prime minister of Serbia in 1998 and
1999, during the ethnic cleansing of Al-
banians in Kosovo and NATO campaign
against then-Federal Republic of Yu-
goslavia (FRY), as well as deputy prime
minister of (FRY) in 1999-2000.
Before winning on 20 May, he ran for
president four times as a candidate of the
Serbian Radical Party and several times
announced withdrawal from politics if he
would lose. His party also conducted
demonstrations in support of war crimi-
nal Ratko Mladić, charged with genocide
in Srebrenica and even 'renamed' a boule-
vard named after assassinated reformist
Serbian prime minister Zoran Djindjić to
avenue of Ratko Mladić.
Nevertheless, Nikolić pledged that “Ser-
bia will not stray from the European
path”, and added that he will “not forget
his people in Kosovo and Metohija". He
promised to fight the crime, party oli-
garchy and low natality and “to assure that
Serbia becomes a modern, normal coun-
Nikolić seemingly accepted the warning
from Brussels that “it will be essential to
see the momentum of reforms continuing
in order to confirm that Serbia sufficiently
fulfils the political criteria, and makes fur-
ther progress in the dialogue between Bel-
grade and Pristina with a view to a visible
and sustainable improvement of rela-
tions”. It was speculated in Belgrade that
he even pledged to the US ambassador
that his party would not create a govern-
ment with anti-EU Democratic Party of
Serbia (DSS) of the former prime minis-
ter Vojislav Koštunica.
Notably, Nikolić and his SNS party
have repeatedly expressed their interests
in joining the largest European political
family – the European People's Party
(EPP). The only party outside their pre-
electoral coalition which supported
Nikolić for president in the second round
– DSS – has recently left the EPP to pre-
empt being kicked out for their anti-EU
stance. A government inducing the DSS
could potentially be a setback in SNS as-
pirations to join the European main-
stream and thereby achieve a complete
absolution of all political sins from the
Though the western leaders have re-
peatedly highlighted that they would not
influence any decisions regarding the fu-
ture of Serbia's governance, both Nikolić
and Tadić have been under immense pres-
sure to ensure continuity of a pro-Euro-
pean policies of Belgrade. On 25 May, the
European Council President Van
Rompuy, while addressing the parliament
of Slovenia, reiterated that the EU re-
mained “hopeful that Serbia's new leaders
will continue on the European path with
conviction and commitment”.
However, Nikolić has announced that
his first foreign visit as president-elect
would be to Moscow, where he will attend
the congress of Russia's ruling party,
United Russia on 26 May. He was,
granted, invited to the event of Vladimir
Putin's party before the elections and in
his capacity of the head of the Serbian
Progressive Party, which has a co-opera-
tion agreement with United Russia. He
will address the United Russia congress,
and it is possible that he will also meet
with the Russian President Putin at the
margins of the congress.
Yet, though still not inaugurated,
Nikolić will visit Russia as the president-
elect and it will be his first trip abroad in
that capacity. At the same time, it will be
the only capacity in which he will act in
Moscow, after resigning all posts in the
Whether or not it is an indicator of
Nikolić's future foreign policy, this visit is
certainly consistent with his approach to
international relations, which stipulates
the same level of ties with Brussels and
Finally, Nikolić's election could have
far-reaching consequences on regional co-
operation in the Balkans. Though heads
of state and government of the countries
in the region acknowledged his elections
as a democratic decision of a sovereign na-
tion, it is hard to imagine that he will be
accepted in Zagreb or Sarajevo as well as
Tadić was. As recent as the last year,
Nikolić was talking about Greater Serbia,
which inevitably will reflect on Zagreb-
Belgrade relationship in the next half a
The biggest unknown, however, remains
Nikolić's attitude towards Kosovo. His
policies so far and his electoral promises
were much closer to hard-liners' than to
what the EU and the international com-
munity would like to see. Belgrade-
Pristina relations will have a momentous
impact on Serbia's EU perspective, too.
New Europe | Page 11
27 May - 2 June, 2012
Nikolić wins: now what?
Which way will Nikolić take Serbia - towards Brussels or Moscow? |AFP PHOTO / ANDREJ ISAKOVIC
The only way out of Shabunda is to walk
350 km to Bukavu through the jungle or to
fly. Residents do not have the money to fly.
Many of them live and die without leaving
Shabunda. Goods here can cost up to four
times more than elsewhere in the Demo-
cratic Republic of the Congo (DRC). Res-
idents can rarely afford them.
In Shabunda, a town in South Kivu, I vis-
ited a small NGO-run legal clinic estab-
lished to facilitate access to justice for rape
victims. In the jungle area where various
armed groups often target civilians, rape is
“Last year we took up 30 cases and got
seven convictions. We managed to bring
victims and witnesses to Bukavu” says
proudly Ismael Wikalilwa who runs the
clinic. Just a few years ago, the idea of seek-
ing formal justice for human rights viola-
tions was hardly heard of in the area.
“However, until today none of the vic-
tims has received any reparation,” Wikaliwa
admits. This discourages others from tak-
ing legal action. Some people even mock
the rape victims involved in litigation,
telling them that those who accept out of
court settlements at least get something: a
goat or two.
Access to justice should not be difficult
for the people of Shabunda. The local ad-
ministrator showed me brand new court
premises built and equipped through for-
eign aid; the government has yet to staff
them. With no incentives or housing, mag-
istrates do not want to come to this remote
Shabunda is a microcosm for the DRC:
a rich country of poor people. The country
is rich with mineral resources, oil, timber
and fertile land.
But the Congolese people may never see
these natural resources put to their benefit
unless important reforms are made. The
riches are now controlled and used by war-
lords, unscrupulous international business-
men, and a small number of corrupt
The security forces, poorly and irregu-
larly paid, often survive on looting. Soldiers
live in mud huts surrounded by children
they cannot afford to feed properly nor
send to school.
It is a dangerous job fighting rebels who
are often paid much better than they are. It
is no wonder that government soldiers and
rebels trade places at an amazing rate.
Communications in the whole country
are extremely poor.
In Shabunda, the cost of repairing the
350 km access road would, in the long run,
be far less than flying people and merchan-
dise in and out.
Investment in infrastructure across the
country would boost the economy. But it
does not create any direct personal profit
for anyone. So the government has largely
been unable or unwilling, so far, to develop
The situation in the Democratic Repub-
lic of the Congo is bad, but it is not hope-
less. Like the enthusiasts at the legal clinic,
a number of Congolese, including vibrant
and articulate NGOs, fight for democracy,
rule of law, human rights and social justice.
From their government, they demand secu-
rity and protection, rule of law and the use
of natural resources for social development.
Some courageous officials of the Congolese
military justice system have been instru-
mental in seeking justice for victims. They
are to be credited, in partnership with the
UN and NGOs, for an emerging trend of
convictions of officers and militia members
for rape, war crimes and crimes against hu-
“I fully agree that security and protec-
tion of civilians, creating a more profes-
sional and efficient army and police force,
respecting human rights and strengthening
the justice system and the end to chronic
impunity are priorities”, the newly-ap-
pointed Minister of Foreign Affairs, Ray-
mond Tshibanda, told me a day after his
government was confirmed by parliament.
All this costs money and takes time, but
the minister was optimistic.
“Everybody should be equal before the
law” he says. For the DRC, this would rep-
resent a major step forward.
Curbing corruption and ensuring trans-
parent political processes and business
dealings are prerequisites for attracting se-
rious investors. This will not be easy. Cor-
rupt officials who are used to sharing the
spoils with foreign sharks will resist re-
There is a long way to go before the
DRC is able to use its resources for the
benefit of its people. It is important for the
new government to speedily and visibly
take the first steps in the right direction be-
fore the honeymoon is over.
With foreign aid shrinking due to the
global recession, only demonstrated com-
mitment to priorities like professionalizing
the army and police, improving respect for
human rights, and strengthening the justice
system and rule of law can generate the
much needed international support.
The DRC needs to come out of the
shadow of its past elections. It is encourag-
ing that the public prosecutor agrees that
investigations into human rights violations
committed in connection with the recent
presidential and parliamentary elections
should be completed ahead of the forth-
coming local and provincial elections. This
is crucial for building popular trust in the
electoral process and fostering a culture of
The new government needs all the sup-
port it can get. It will have to earn it.
Ivan Šimonović, United Nations Assistant
Secretary-General for Human Rights, vis-
ited the Democratic Republic of the Congo
2 – 10 May 2012
Page 12 |New Europe
27 May - 2 June, 2012
Three Congolese women stand during a meeting between members of the "Association de mamans actives pour le
développement, la réconciliation et la cohabitation pacifique" (AFADERCOP - Association of mothers for develop-
ment, reconciliation and pacific cohabitation), a mother's association in the town of Rutshuru in D. R. Congo's
North Kivu province, on May 23, 2012.|AFP PHOTO/ PHILMOORE
Rich country, poor people
By Ivan Šimonović
Being the world’s largest donor of aid
to developing countries is already a
huge burden on the EU and its 27
member countries, who provided a
combined €53 billion – or half the
world’s total – in 2011.
In these troubled times of low
growth,austerity and high unemploy-
ment, that weight becomes even
harder to bear.
EU policy makers believe they have
the answer: Concentrate aid where it
is needed most and where it can do
the greatest good,and rely more heav-
ily on the private sector to fill in the
gaps and help break the cycle of aid
The proposed policy shift is out-
lined in the Agenda for Change, un-
veiled by the European Commission
last October and endorsed by EU de-
velopment ministers May 14 in Brus-
sels. “Today’s decisions will enable the
Commission to move ahead in its ob-
jective of making EU aid more strate-
gic,targeted and results-oriented,”EU
Development Commissioner Andris
Piebalgs said after the ministerial
“While we’ve made good progress
in the fight against poverty over the
last 10 years,”Piebalgs said,“the world
has changed, new donors have
emerged, and new challenges are fac-
ing developing countries.”
During the meeting, he said efforts
are still needed for the EU to meet its
target of contributing 0.7% of gross
national income by 2015,compared to
0.42% in 2011.
To ensure that “every euro reaches
those that need it most,” the Com-
mission wants to focus aid on coun-
tries making progress towards
sustainable and inclusive growth.
In practical terms, that means fo-
cusing on the most strategic and
growth-oriented sectors including
agriculture, food security and energy,
as well as social protection, health and
education.It will also prioritize aid for
countries where it can have the great-
est impact in reducing poverty,like the
so-called neighborhood countries
closest to the EU and sub-Saharan
Africa. But governments cannot do it
alone.Last year,EU aid to developing
countries dropped for the first time in
a decade, with countries such as
Greece and Spain massively slashing
budgets in the wake of the financial
crisis. In the future, the EU will rely
more heavily on the private sector to
help fill in the gaps, as foreseen in the
Agenda for Change.
That is already happening to a large
extent, as shown in a report (‘Interna-
tional Finance Institutions and the
Private Sector’) published during the
World Bank-IMF Annual Meetings
last April. The study, produced by 31
international finance institutions,
shows that development banks fo-
cused on the private sector have
quadrupled their commitments over
the past decade to $40 billion a year.
It also shows that every $1 given to
development banks can lead to $12 in
private sector project investment.Suc-
cess stories range from rehabilitating
a slum in India to putting up wind
farms in Cape Verde.
“At a time of scarce public resources,
the private sector is critical for job cre-
ation and growth,”said Lars Thunell,
executive vice president and CEO of
the World Bank’s International Fi-
nance Corp. “By focusing on areas
where we can add the most value, we
can also help ensure that every dollar
we invest makes a difference in peo-
ple’s lives.”
Not everyone is convinced the EU
is moving in the right direction.
Europe’s development NGOs are
especially concerned about a lack of
concrete commitments for eradicating
poverty, and are sceptical about allo-
cating development assistance based
on a country’s economic growth.
“This over-focus on economic
growth is wide of the mark,” Olivier
Consolo, director of Europe develop-
ment NGO confederation Concord,
has said, noting that 75% of the
world’s poorest live in middle-income
countries where poverty is still a prob-
lem.“They should not face aid reduc-
tions from the EU just because they
are termed advanced developing
NGOs are also worried about rely-
ing too heavily on the private sector.
Natalia Alonso,head of Oxfam Inter-
national’s EU office in Brussels,argues
that “we cannot sit on our hands and
assume that the benefits of the private
sector will simply trickle down to
those most in need.”
To ensure that aid does get to
those most in need is also a corner-
stone of the Commission’s plan to
focus on sectors that are key for long-
term and inclusive growth. These in-
clude sustainable agriculture and
clean energy so that countries can be-
come more self-sufficient, generate
jobs and turn challenges of food se-
curity and climate change into op-
portunities for growth.
Commissioner Piebalgs say he is
determined to make a difference in
fighting poverty, which he sees as the
EU’s “insurance policy”for a more sta-
ble and prosperous world. Time will
tell if he’s going about it the right way.
New Europe | Page 13
27 May - 2 June, 2012
By Renee Cordes
Crisis-driven EU development ministers
OK policy shift, stress private sector
European Commissioner, Latvian Andris Piebalgs (R), visits the deprived area of Cerro de
La Popa, in Cartagena de Indias, Colombia, to watch the progress made with 250 families
who are benefitiaries of the EU funds.|EPA/RICARDOMALDONADO
September 2012
International Convention Centre
Westin Resort
Nusa Dua

Page 14 |New Europe
27 May - 2 June, 2012
“Today, the community radio movement
presents important challenges”, says
Francesco Diasio, the Italian ex-journal-
ist who is now AMARC´s General
Secretary in Europe, the international
non-governmental organization that sup-
ports and contributes to the development
of community and participatory radio
along the principals of solidarity and
international cooperation.
After working in different radios, such
as Spectrum Radio in London and Radio
Città Futura in Rome, he became mem-
ber of AMARC´s board. From 2003,
Francesco Diasio is involved in national
and European political lobbying for the
sustaining and promotion of community
media, and in projects for the defense of
freedom of speech and expression in the
Middle East and North Africa Region
The community radios are part of the
third sector of communication, separated
from public and commercial media.
“They have not lucrative objectives and
they are participative; with democrat par-
ticipation, plurality and cultural diversi-
ty”, Francesco told New Europe. “They
exist almost worldwide, but the develop-
ment in each continent and country is
very different.”
These differences are visible, especially,
in Eastern Europe. While countries like
Italy, Germany, Ireland, France or Spain
have a long tradition about this kind of
media, for other nations, such as Poland,
Check Republic or Ukraine, that “are
completely new experiences” and “some-
times their existence is complicated
because of the lack of a clear legislative
frame and a very strong media commer-
The definition of community radios
also changes between continents. “In
Africa exists a big number of rural media,
but in Latin America educative radios are
more common”, added Francesco. These
specific cases are the main reason of
AMARC´s birth in 1985, in Canada.
AMARC was the first organization
created to “help, support, create a politi-
cal lobbying, develop projects and build a
network of solidarity between countries”,
within the sphere of community radios.
During the last thirty years, it has devel-
oped globally and today has members in
every continent and helps more than
4,000 radios.
The current challenges in Europe are
completely different to the challenges in
other continents.
Now days the two principal issues in
the continent are “a total recognition of
the third sector, in regions where it is not
recognized as a legal system; and the
transition to the digital radio.”
Last 9 May, AMARC defended at the
European Parliament the communication
rights in the digital spectrum. The equi-
table distribution of this digital space
between public, commercial and commu-
nity broadcasters is the principal objec-
tive that the organization wants to obtain
at this moment in Europe. “Community
radios are a public and social good, so
access to the spectrum should be public
too”, stated Francesco.
In a world where technological
advances happen every day, community
radio should make changes to be at the
same level.
Regardless, some opinions that think
radio´s destiny is to disappear, Diasio is
sure that this historical media has “a large
following in, for example, Latin coun-
tries” and “the movement is increasingly
present in universities”, where young
people create radios to express their
The transition to digital radio means
not only a big technical challenge; it also
has “social, political and economic conse-
quences.” With all the conferences, meet-
ings and debates through Europe,
AMARC is trying to obtain an equitable
distribution of the spectrum; but all these
encounters are not enough and they “still
have a long road ahead”, affirmed
Throughout its history, AMARC has
achieved some victories that improved
and supported community radios all over
the world. In 2004, Australian
Democrats decided to support communi-
ty broadcasters; the same year, communi-
ty radios became legal in UK; they fight
for the inclusion of women in the media
in countries like Iraq; and they created
new radio stations in different communi-
ties, like the Mapuches in Argentina,
among others.
The organization wants to add the
spectrum´s distribution to their achieve-
ments, and their next step will be the cre-
ation of a legislation system in countries
like Portugal or Greece, where communi-
ty radios are not recognized. But all these
actions also need governments support,
“we can fight and achieve all these pro-
jects, but each country has to work at
national-level. Countries have the final
decision”, concluded Francesco Diasio.
Supporting community radios is not
only a matter of money. This media needs
the funding that they receive from
NGOs, companies or government’s bud-
gets destined for these actions; however
the first things they need are support, co-
operation and recognition, something
basic to not disappear and grow to defend
Francesco Diasio: 'AMARC still has a long road ahead'
By Nerea Rial
During EU Green Week, held between 22-
25 May, the European Commission show-
cased its awareness campaign on resource
efficiency called Generation Awake, which
was officially launched in October 2011. It
was developed by Ogilvy Brussels for the
Commission, and it is promoted by DG
Environment in the context of the Re-
source Efficient Europe Flagship Initiative
under Europe's 2020 strategy for growth.
Generation Awake is a movement that
promotes smart consumption choices. It
aims at opening people's eyes to their con-
sumer choices and the consequences these
have on earth's natural resources. Specifi-
cally, though, its aim is to target young
urban adults and families to increase aware-
ness and help change consumer behaviour.
Resource efficiency has consistently been
the message of DG Environment because
it suggests that we use resources sustainably.
As Environment Commissioner Janez Po-
točnik has said: “We need to do more with
less and minimise impacts on the environ-
ment. It's not about consuming less but
consuming differently.”
The launch of the campaign consisted of
going live with www.generationawake.eu
and also the Facebook page www.face-
There is also an animated film that ac-
companies the movement as well as conta-
gious jingle.
Generation Awake is also seeking public
and private organisation interested in
spreading the movement's message. As the
Commission made clear, by becoming a
supporter, not only can you “promote your
organisation's environmental conscien-
tiousness or resource-efficient ways of pro-
viding services and doing business, but you
can also become part of a real movement to
educate the younger generation” how to be
more responsible with their consumption
and to be more respectful of their precious
The United Nations Conference
on Sustainable Development
(UNCSD) is being organised in
pursuance of General Assembly
Resolution 64/236, and will take
place in Brazil on 20-22 June
2012 Most people would have
heard this conference as the
Rio+20 conference.
The conference will focus on
two themes: 1) a green economy in
the context of sustainable devel-
opment poverty eradication; and
2) the institutional framework for
sustainable development. The
preparations for Rio+20 have
highlighted seven areas which
need priority attention. The areas
include decent jobs, energy, sus-
tainable cities, food security and
sustainable agriculture, water,
oceans and disaster readiness.
At EU's Green Week, a look at
the preparations of Rio+20 was
discussed and what is expected
concerning water-related aspects.
It reflected on the implementation
of internationally agreed goals for
water and sanitation, best prac-
tices, and lessons learned. The
panel looked into interdependen-
cies between water, energy and
food as the underlying natural re-
sources water, land and soil and
discuss what should be the result
of Rio in the area of water and re-
lated areas.
Environment Commissioner
Janez Potočnik led the panel in
talking about the expectations for
Rio+20. He said that in his opin-
ion, "promoting green growth is
the pathway towards economic
growth, jobs and social improve-
ment and limiting the pressure on
our ecosystems. In the EU, we
have decided to focus increasingly
on resource efficiency – through
more efficient use of energy,
chemicals, soils, water, etc. An
economy that is more resource ef-
ficient, is one that is sustainable.
We need to do more with less."
He continued: "Rio is an opportu-
nity to promote a much more effi-
cient management of water
resources. We need to ensure sus-
tainable use of water so that its
quality and quantity is able to
meet the needs of humans, nature
and the economy. Following the
Johannesburg Plan of Implemen-
tation ( JPOI), a number of issues
have not been addressed suffi-
ciently and a number of areas need
urgent attention. One potential
area of progress is integrated water
resource management at river
basin level."
Although quite positive, Po-
točnik did not allude to the prob-
lems that will be faced at Rio. It
will be difficult to have a positive
outcome and to reach an agree-
ment because opinions are already
diverged between the countries,
especially among the big players.
As it stands now, there is a long-
standing 'North-South' debate
that is being played out on a big
stage. Unfortunately, the reality is
not what the actors are revealing.
Countries like China, India,
Brazil do not want any new obli-
gations to be agreed at Rio.
Therefore, they are playing the 'we
are developing nations' card,
where in reality, everyone knows
that they are not developing na-
tions. On the other hand, the
United States will be a weak player
in the negotiations; not that they
are complaining. Nothing will be
expected from them and with up-
coming, crucial elections, it suits
them well to watch from the side-
lines and see the other players
duke it out.
Thus, that leaves the EU. All
eyes will be focused on it which
places it in a bad position because
the EU is the only major player
that is pushing desperately for an
outcome. As Deputy Director
General of the German Federal
Ministry of Environment Dr.
Fritz Holzwarth said at the panel
discussion: "The green economy
approach is just simply not ac-
cepted by the developing
economies." Many developing
countries are concerned that the
concept might not go far enough
to promote social justice and sus-
pect it could bring about trade dis-
putes and reduce competitiveness.
In response to this, Potočnik had
previously said: "I have the feeling
that the logic and importance of a
green economy is not yet being
taken as something which is really
needed for future sustainability."
Nevertheless, all participants
agreed that water is a vital ingre-
dient for the transition to a green
economy, for poverty reduction
and for sustainable development
in all countries. Emphasis was
placed that the Conference out-
comes should include a sustainable
development goal for water secu-
rity as part of an agreed green
growth agenda. Continued effort
is needed to improve cross-sec-
toral integration: in particular the
linkages between water, food and
The positive response to the call
for integrated water resources
management and water efficiency
plans, as agreed at the World
Summit on Sustainable Develop-
ment in 2002, needs to be trans-
lated into implementation. This
includes increased focus on water
productivity and climate adapta-
tion to ensure every drop of water
contributes as much as possible to
inclusive economic growth. When
asked what would be the one
thing that should come out of the
Rio+20, President of Global
Water Institute Valerie
Ndaruzaniye said: "Integration
with coordination."
The Chair of the Mediter-
ranean Region of the Global
Water Partnership, Professor
Michael Scoullos said: "We need
to capitalise on what we have
achieved until now."
What the EU has achieved until
now will be hard to capitalise at
Rio because of the resistance
brought on by the other emerging
powers. However, the Conference
should kick-start a process for set-
ting a green growth agenda
through to 2030. The agenda must
take account of financial and eco-
nomic realities, climate change
and adaptation, demographic
shifts, and the impact of emerging
economies. Green growth requires
ensuring water security for future
generations and providing solu-
tions that achieve more growth
with less resource use.
This is the true goal which
should transcend national borders
and personal interests. Policy in-
tegration we may see at Rio+20,
but political integration will be
hard ticket to sell.
New Europe | Page 15
27 May - 2 June, 2012
Commission promotes Generation Awake movement
By Stratis G. Camatsos
By Stratis G. Camatsos
Rio+20 in the water pipeline
The Rio+20 banner outside the United Nations building| Credit: United Nations
On 24 May, oil prices rose to near $92 a barrel
as negotiations between six world powers and
Iran about its nuclear programme appeared to
be stalling. By early afternoon in Europe,
benchmark oil for July delivery was up 89 cents
to $90.79 a barrel in electronic trading on the
New York Mercantile Exchange. On 23 May,
the contract fell $1.95 to settle at $89.90, the
lowest since 21 October.
In London, Brent crude for July delivery was
up 52 cents at $106.08 per barrel on the ICE
Futures exchange.
Later on 24 May, Tehran and six world pow-
ers closed two days of tough nuclear talks with
little more than an agreement to meet again.
The participants agreed to meet in Moscow on
18-19 June after sharp disagreements over the
way forward.
Earlier this year, tensions with Iran, OPEC's
second-largest producer, drove up oil prices. The
US and Europe have imposed sanctions against
Iran's oil exports. Tehran has agreed to talks in
order to head off the introduction of more se-
vere embargo terms on 1 July.
Julian Lee, senior energy analyst at the Cen-
tre for Global Energy Studies (CGES) in Lon-
don, told New Europe on 24 May that Saudi
Arabia could increase its production by another
2mn barrels a day if it wished to do so.
Moreover, Riyadh could increase its produc-
tion capacity further by investing more money
in developing new fields and boosting capacity,
but it doesn’t choose to do so at the moment. “It
believes that its assessment of global supply and
demand indicates that its current production ca-
pacity of 12.5mn barrels a day is adequate,”Lee
“At the moment Saudi Arabia is worried and
has been worried about the negative impact of
very high oil prices on the global economy, on
economic recovery and as result of that on oil
demand and I think that they have come
around to the IMF’s view that high oil prices
are contributing to some extent to the current
weakness and that a spike on oil prices would
do serious damage again to the global economy,”
the CGES analyst said. “I think that Saudi Ara-
bia got worried when oil prices were going up to
above $120 per barrel in March and so have
been increasing their production in order to try
to bring oil prices back down to a level they
think is reasonable, which they currently peg to
$100 a barrel,” Lee said.
In fact, oil fell to a seven-month low on 23
May with Brent heading to $100 a barrel. He
noted that the worries over euro and the worries
over what’s going to happen with Greece are
having a negative impact on oil prices. “Is
Greece going to stay in the eurozone? Is it going
to drop out of the eurozone? Will the second
elections in Greece result in a government at all
and if it does will that be a sort of pro-euro, pro-
austerity programme government or will be a
government that rejects the agreements and ef-
fectively I think forces Greece’s withdrawal
from the euro? I think they are very considerable
worries over that and what the impact of that
could be not just on the European economy but
the knock on effects on Europe’s trading part-
ners, the Asian countries that supply goods to
Europe. I think that’s having a negative impact
on oil prices,” Lee said.
He reminded that Saudi Arabia has raised its
production considerably since the beginning of
this year, partly to make sure that there is ade-
quate oil available in the event of a serious dis-
ruption of Iranian oil supplies. However, those
growing volumes have left people feeling a lit-
tle more comfortable about the availability of oil
over the summer, Lee said.
Moreover, the fact that the six world powers
and Tehran are actually talking about the Iran-
ian enrichment programme is also seen as a pos-
itive sign, Lee said. “So all these things are
contributing to the easing of oil prices that we
have seen and we have seen them come down
from $128 at one point down to currently $105-
$106,” he concluded.
Page 16 |New Europe
27 May - 2 June, 2012
Putin, Borisov discuss South Stream
Oil prices pick up again on stalled Iran talks
By Kostis Geropoulos
An oil refinery on the east coast of Saudia Arabia near the Persian Gulf city of Dhahran. |EPA/HO
On 23 May, Russian President Vladimir Putin
and Bulgarian Prime Minister Boyko Borisov
discussed by phone several key energy issues,
including the planned South Stream gas
pipeline, the price of natural gas and negotia-
tions on the settlement of money due for the
newly built Russian nuclear reactor for the
abandoned Belene nuclear power plant project.
Borisov told reporters regarding Belene that
Russian and Bulgarian experts are working
hard, they argue and numerous claims for pay-
ments are presented which Bulgaria has not
On 18 May, Bulgaria’s Ministry of Energy,
Economy and Tourism in Sofia said Russian
gas export monopoly Gazprom will sign an
agreement to cut gas prices for supplies to Bul-
garia by 11.1%. The price reduction was agreed
on during a meeting in Moscow between Bul-
garian and Gazprom officials earlier this week
and the documents will be signed in May, the
ministry said on its website.
Gazprom pumps 17.8 billion cubic metres
of gas a year to Bulgaria, about 3.5 billion cubic
metres of which is consumed there. The rest
goes on to Turkey, Greece and FYROM under
a 30-year contract signed in 2006.
On 19 May, Borisov reiterated his country’s
support for South Stream, noting that the
Russian-backed gas pipeline is a project of high
priority for Bulgaria. Borisov has pointed out
the financial benefits of projects like South
Stream that make use of his country's
geostrategic location.
“It’s very rare for Gazprom to make conces-
sions on its gas pricing without something in
return and I’m not really sure what that ‘some-
thing in return’might be,”Julian Lee, senior en-
ergy analyst at the Centre for Global Energy
Studies (CGES) in London, told New Europe
on 24 May.
The South Stream pipeline is intended to
transport up to 63bn cubic metres of Russian
natural gas to Central and Southern Europe
annually, diversifying Russian gas routes away
from transit countries such as Ukraine.
The pipe will go from Russia to Bulgaria via
the Black Sea; in Bulgaria it will split in two –
with the northern leg going through Serbia,
Croatia, Hungary, and Slovenia to Austria and
Northern Italy, and the southern leg going
through Greece to Southern Italy.
“We’re seeing a general sort of shift at the
moment in the region of countries that are
favouring South Stream. There is a realisation
that Nabucco is not going to happen, at least
in its original form. Although there will still
presumably be large volumes of Azerbaijani gas
probably crossing the Balkans. It may not go
through Nabucco but it will go through
TANAP and whatever carries gas onwards
from the western end of Turkey,”Lee said.
New Europe|Page 17
27 May - 2 June, 2012
High-ranking government officials,
senior business executives and energy
experts from the countries of South
East Europe will meet in Thessaloniki
on 30-31 May to participate in this
year’s energy dialogue, organized by
the Institute of energy for South-East
Europe (IENE), under the auspices of
the Greek government and with the
support of leading international or-
Gazprom-Export, Edison, EON, TAP,
PFC Energy, the Iranian National Gas
Export Company (NIGEC), JP Srbija-
gas of Serbia, Bulgartransgaz EAD of
Bulgaria, Turkey’s T-Dinamik Energy
Co., as well as other companies from the
region will be present.
The energy sector of Greece will be
represented by PPC Renewables, Pro-
tergia and M & M Gas Co of Mytili-
neos Group, Hellenic Petroleum,
DEPA, Energean Oil & Gas and Ves-
tas Hellas. Officials of regulatory au-
thorities and electricity transmission
operators along with associations of
professionals from South East Europe
will discuss the necessary reforms and
changes so that the region can meet
new challenges.
Redefining South East Europe’s energy map
Russia’s LUKoil, which is the third private oil company by
proven hydrocarbon reserves in the world, intends to further ex-
pand its presence at the Caspian region. LUKoil President Vagit
Alekperov and Kazakhstan's national company KazMunayGas
CEO Lyazzat Kiinov signed a Memorandum of Understand-
ing which sets the basis for co-operation of Russian companies
in studying of geological-geophysical data of free unlicensed on-
shore and offshore sites in Kazakhstan.
LUKoil possesses 1.0% of global oil reserves and 2.2% of
global oil production, 17.8% of total Russian oil production and
18.2% of total Russian crude oil refining. LUKoil is the third oil
and gas company in the world by proved oil reserves, the fifth
largest company in the world by oil production, and the second
largest company in Russia by the revenue after Russia gas giant
Gazprom. LUKoil has long since been operating in Kazakhstan
and the Caspian Sea. It is suffice to mention two major projects
such as the Kumkol field in Kyzylorda Oblast and Karachaganak
in the west. In addition, there are plans for joint development of
promising structures as Khvalynskoye and Central field at the
Caspian Sea. Alekperov discussed LUKoil’s plans in the Caspian
region and the CPC (Caspian Pipeline Consortium).
Vagit Alekperov, what is the purpose of your company by
signing a Memorandum of Understanding on research the ge-
ological-geophysical data of free unlicensed sites located on-
shore and offshore at the territory of Kazakhstan?
This document indicates that we intend to continue our joint
co-operation, which began 20 years ago. Over the years, both
companies have proved to be good partners. We have a desire to
work together here in the exploration and development fields,
both onshore and at the Caspian Sea. After signing the MOU,
the joint group of KazMunayGas and LUKoil will analyse the
received set of the geological material of Kazakhstan. If we iden-
tify the sites, that we think it is advisable to operate, and take in
this regard a joint decision, we will immediately proceed to the
exploration and mining. So, as you can see, LUKoil maintains a
desire to expand its activities in the Caspian region.
According to the signed MOU how much LUKOIL is going
to invest in searching for the new oil and gas fields in Kaza-
It's too early to answer to this question because we have got
only a "geological material." It cost us $3mn. And as I said above,
this set of the materials will be studied by our and Kazakhstani
experts. This is analytical work which will take at least a year.
And only then it will be possible to determine the amount of
projected investment.
Previously, LUKoil and KMG announced that by the end of
this year the negotiations on participation of KMG in the de-
velopment Khvalynskoye field will be completed. How matters
stand now?
Yes, we have two joint projects with KazMunayGas at the
Caspian Sea: Khvalynskoe and Central fields. As to Khvalyn-
skoe, preparatory works of Russian Government and Russian
State Duma are going on to develop the Production Sharing
Agreement. I hope that the negotiation process will be com-
pleted by the end of this year. As to “Central”structure, now the
establishment of the joint company is going on. In the near fu-
ture it will be registered and exploration and production license
will be issued on this joint venture.
Do you have plans to transport the oil produced at the
Caspian region to China?
Today we have no interest in supplying oil to the Chinese
market; for us it is economically profitable and more attractive to
transport to the West through the Russian system of Transneft.
In this case, does LUKoil intend to transport the oil produced
at the northern part of the Caspian Sea through the Baku–Tbil-
isi-Ceyhan pipeline?
LUKoil has never been of interest to transport its oil through
Baku-Tbilisi-Ceyhan oil pipeline because originally all the oil
produced by our company in the north of the Caspian Sea we
ship via the CPC. In the future, too, we will not need to transit
through the BTC pipeline, as in 2015, after expanding the CPC
we will give preference to this route.
President of Russian oil company LUKoil Vagit Alekperov |EPA/OLIVIERHOSLET
LUKoil wants to ‘expand
activities in Caspian region’
By Kulpash Konyrova
Saudi Arabia
challenges Russia
as top producer
Russia oil production is less than the country's CDU
(Central Dispatch Unit), the production-export moni-
toring agency of the Energy Ministry, says and now
Saudi production is greater, according to JODI ( Joint
Organization Data Initiative). The report notes that
Russian production fell from 10.370mn barrels per day
in December to 9.920mn in March, marginally less than
Saudi Arabia's 9.923mn barrels per day that month.
But the Energy Ministry's data showed daily average
output was steady at about 10.33mn barrels per day in
early 2012, up from 10.31mn barrels in December.
JODI is supervised by the Riyadh-based International
Energy Forum, according to Bloomberg. “I’m confused
by these Russian figures that JODI has published,” Ju-
lian Lee, senior energy analyst at the Centre for Global
Energy Studies (CGES) in London, told New Europe
on 24 May. “I really don’t understand where these Russ-
ian numbers are coming from that show Russian oil
production falling below 10mn barrels per day. It does-
n’t sort of gel with any other figures that I have seen
from any source for Russia,” Lee added.
Chris Weafer, chief strategist at Moscow’s Troika Dia-
logue, said Russia's CDU has been very consistent with
its methodology for the past ten years at least. More-
over, the data published by CDU has always tied up al-
most exactly barrel for barrel with the data separately
published by Russia's oil producing companies, by
Transneft, the refiners and by the export terminals.
OPEC-member Saudi Arabia has criticised non-mem-
ber Russia for capitalising on high oil prices and ex-
porting as much as it can. “The Saudi's never really
forgave Russia for making no effort to support OPEC's
efforts to prop the oil price in 1999 or in 2008/'09. The
accuse Russia of taking advantage of OPEC, ie mainly
Saudi actions to support oil,” Weafer said.
He added, “This report [reportedly by the Saudi-funded
initiative] is trying to raise doubts about Russia's sus-
tainable production as part of efforts to keep an oil risk
premium in place, i.e. to caste doubts about future sup-
ply from traditional sources at a time when new sources
and new energy is becoming available”.
Nevertheless, Lee noted that Saudi production is cer-
tainly rising and the CGES has accessed April Saudi
production at about 9.96mn barrels a day.
The CGES analyst noted that Riyadh has effectively
for a long time taken a political decision to limit the
volume of its oil production. “The general view is that
if Saudi Arabia wished to do so within the space of
three months or so it could lift its production to close
to 12mn barrels per day. Now Russia couldn’t do that.
Russia, if we take the Energy Ministry’s figures at
face value, Russia is producing somewhere 10.2 and
10.3mn barrels a day but it can’t increase that quickly
because the only way Russia can increase its produc-
tion is to drill more wells and develop more fields and
offset the decline in Siberia whereas Saudi Arabia has
got that capacity already installed that it can bring
into operation very quickly,” Lee said. “I don’t think
that capacity is really limited by Saudi Arabia’s re-
serves; it’s limited by the decisions taken by the King-
dom, by the government, and by the state oil
follow on twitter @energyinsider
Energy Insider
By Kostis Geropoulos
Page 18 | New Europe |
27 May - 2 June, 2012
New Europe | Page 19
27 May - 2 June, 2012
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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.
Ticket sale:
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Behind the Curtain -The Aesthetics of
the Photobooth, 13 June - 19 August,
Le Botanique
Did photobooths serve as a snapshot
into a moment in your life? Do you still
use them as a source of photography?
“Behind the Curtain -The Aesthetics of
the Photobooth” at Le Botanique will
bring together over 600 images from 60
international artists to reveal the influ-
ence of photobooths within the artistic
community. The event runs every
Wednesday to Sunday from 13 June
until 19 August. The exhibition is the
first to delve into the aesthetics of pho-
tobooth images and their different
functions. The exposition is divided
into six themes that explore different
elements of photobooth art: the booth,
automatism, the strip, who am I? Who
are you?, and who are we?.
Surrealists first saw the true beauty in
the images created by photobooths. The
first photobooths were set up in Paris in
1928, and Surrealists used them as a
cheap and easy form of photography.
Artists like Andy Warhol and Arnulf
Rainer soon followed the trend and cre-
ated an artistic business from the simple
strips of images. Andy Warhol turned
the images into true art when he used
photobooth portraits of models for
Harper’s Bazaar in 1963. His obsession
with the images continued for the next
three years. The fascination of photo-
booths has carried over into the work of
present-day artists such as Gillian
Wearing and Cindy Sherman.
Relive the history of photobooths at
this unique exposition.
Midi Station
26 Place Victor Horta, Brussels
tel 02 526 8800
This is a fantastic story of howa business can bounce back from
the brink of collapse and go on to become a rip-roaring success.
After about 18 months of its launch, Midi Station his financial
problems and faced possible closure. But, having been saved
froman early demise, it is back with a bang and serving some of
the best food in town.
Part of the reason is the general manager Dirk De Prins who
was perhaps best known for his appearance on the TV reality
show Mijn Restaurant!
Another reason is the new chef Kurt Coosemans who clearly
knows a thing or two about satisfying even the most demanding
of palates.
As well as the truly delicious food, there is a two-for-one
cocktails during Happy Hour from 5pm-6pm every
Tuesday to Friday.
In the evenings, fromThursday to Saturday, the 150-seat Midi
Station hosts resident DJs, live music and also provides free,
secured parking after 7pm just 50 metres from the entrance.
There ´s also a great three course business lunch costing just 20
euros.Try the oyster bar and admire staff hard at work in the
open-plan kitchen.
Highly recommended.
As Brussels melts under an
unexpected heatwave, the
Grand Place becomes central
to evenings in Brussels. The
famous square, listed as a
World Heritage Site,
becomes a venue for events
and a lively place to wander
around, stopping off for a
beer at the many cafes ring-
ing the plaza.
30 May -The Impact Of Social
Networks On MEPs Daily Work
8:00 – 9:30, European Parliament
Members' Salon
This EIF Breakfast Debate will
explore how Social Media is chang-
ing the world of policy making.
Internally, in the way Social Media
changes the daily life of policy
makers and externally, in the way
Social Media allows policy makers
to connect with their constituencies
in a more open and transparent
way. Speakers include Alexander
Alvaro, Vice-President of the
European Parliament; Franck
Debie, Senior Political Adviser,
European Parliament.
31 May - Europe and the Arab
9:30 – 16:00, Bibliothèque Solvay,
Park Léopold
Hard-headed realism is replacing
the euphoria of the Arab spring.
The Arab world’s new policymak-
ers face the double challenge of sat-
isfying popular pressure for democ-
ratic governance and greater
accountability, while introducing
rigorous reforms to open markets
and become more competitive.
5 June - ICTs and Agriculture in
Africa: An Unexpected Alliance
12:30 – 14:30, Delegation generale
de la Région Rhone-Alpes, 62, rue
du Trone
Agriculture is central to Africa’s
development. As the continent
grows it will need increasing sup-
plies of food. To achieve a more
productive, sustainable agriculture
it is crucial to help small farmers
improve their productivity and
access to the market so that they
can feed their populations and pro-
tect their land from being overrun
by foreign, export-oriented
agribusiness. In this context, how
can information and communica-
tion technologies (ICTs) play a
Some events may require registration
29 May -The Rise of The Bio-Based
9:00 – 14:00, Bibliothèque Solvay,
Park Léopold
Questions under discussion will
include how the bio-based economy
can address challenges such as
resource scarcity, sustainable agricul-
ture and climate change, while also
being profitable for farmers. It will
highlight the technological edge
Europe has over others, and look at
what other regions are doing to pro-
mote the bio-based economy. What
are the key barriers to the move
towards a bio-based economy? What
is the role of policymakers in ensuring
that Europe keeps the lead and trans-
lates its potential into reality?
29 May - Alternatives to Austerity:
The Policy and the Politics
12:15 - 14:00, International Trade
Union House, Room B, Boulevard du
Roi Albert II, 5
Main speaker is Robert Kuttner, Co-
editor The American Prospect, and
senior fellow Demos. The banker-
afflicted European Union is punishing
Greece rather than finding a way to let
it grow. In the United States, relief is
denied to underwater homeowners
because debt contracts are sacred, even
as the policy prolongs the agony.
Everywhere, budget austerity is adver-
tised as the road to growth— though
it denies the economy its productive
potential. These issues are treated as
either impossibly technical or as non-
debatable. They are neither and there
is a need to democratize the money
issue once again, Kuttner will argue.
29 May -The Evolution Of Social
20:00 - 22:00, European Parliament
Members' Salon
The social web is also a driver for eco-
nomic growth in Europe and around
the world. Businesses are using social
media to connect with their cus-
tomers, to advertise more effectively
and to build brand identity. European
businesses that build apps for social
media platforms employ thousands of
people and are constantly growing.
For more on events in Brussels check
28 May – Julia Holter
20:00, Ancienne Belgique
Visiting Belgium for the first time, this
LA singer produced ethereal and slightly
dreamy pop, in the manner of Laurie
Anderson meets Joni Mitchell. About to
release her second album, recorded in her
bedroom, there is a lot of expectation and
excitement for this young talent.
29 May – Bach Collegium Japan
19:30, Bozar
Masaaki Suzuki and his Bach Collegium
Japan have been steeped in the works of
Bach for many years now - since 1995
they have been working on recordings of
his complete cantatas. The authenticity of
their revival of Bach's world is stunning.
The highlight of this concert is surely the
grandiose Magnificat, in which Bach
achieves a wonderful balance between the
spiritual and dramatic aspects of the text.
1 June – Macy Gray
20:00, Ancienne Belgique
The award winning soul singer is per-
forming some of her many hits and cov-
ers. She never really intended to try for
stardom. While at college in California,
she was asked to write some songe for a
friend, who was wanting to make a demo
tape to show around. Gray wrote a few
tracks, but when the singer failed to
appear, Gray stepped up to the mike,
despite disliking the sound of her own
voice. Thankfully, this was an opinion not
shared by others and she soon began her
recording carreer.
3 June – Bob Mould performs Copper
20:00, Ancienne Belgique
It was 20 years ago today, when Bob mold
taught Sugar to play. The band’s first
album, Copper Blue, was their break-
through, recognized as a classic as soon as
it hit the shops by critics from all over the
world. The former Husker Du frontman
will be performing the whole album.
28 May – 7 June
Brussels Agenda
suggest your event for our agenda: agenda@neurope.eu
suggest your event for our agenda: agenda@neurope.eu
Progressive rocking
The Mars Volta, 20:00, 26 June,
Ancienne Belgique
In 2008, Rolling Stone magazine named
them “Best Prog-Rock Band,” and in
2009 the band won a Grammy award for
the “Best Hard Rock Performance” cate-
gory. Now, they are coming to Ancienne
Belgique to put on an award-winning
Progressive-rock band The Mars Volta
recently released their sixth album,
“Noctourniquet,” after four years of
silence. The album is a collaboration of
inspirations from 80s rock band The
Godfathers, comic villain Solomon
Grundy, and the Greek myth of
Hyacinthus. The 13-song album has
been praised by some and hated by oth-
ers. It has been criticized for its over-
simplistic tempos and for not pushing
the boundaries enough. Others have
praised the simplicity of the new songs
because it makes the album much more
accessible to a wide audience. Band
member and songwriter Cedric Bixler-
Zavala has also won over critics and fans
for his emotionally powerful lyrics in
songs such as “Empty Vessels Make the
Loudest Sound.”
The members of The Mars Volta are
known for having a long history of con-
flict. The band was formed in 2001 after
the break-up of the post-hardcore band
At The Drive-In. The band first
declared an “indefinite hiatus” but even-
tually broke up for good. Bixler-Zavala
took some blame for the break-up, say-
ing that his interests were straying in a
different direction than the band’s.
Bixler-Zavala and Omar Rodriguez-
Lopez stayed together to create The
Mars Volta, but At The Drive-In
announced a reunion earlier this year
and has six concerts scheduled.
The Mars Volta concert is on 26 June at
20:00. Tickets for the concert are
Capturing aesthetics
Egyptian film director Yousry Nasral-
lah, who is in competition at this year’s
Cannes film festival with his film, After
the Battle, talks to Federico Grandesso
about recent political events in his
How do you see the political situation in
Egypt especially in this crucial moment?
During the last year there were a lot of
manipulations from the old regime, the
army and the Islamists in order to keep
the structures of the dictatorship intact.
A lot of thing happened during the year,
people just came out and it’s going not to
be easy to go back to the old way of gov-
ernance. I think that they will have hard
time trying to repress as they did before,
for this reason the form of repression
might be worse than before.
There were some presidential candidates
that couldn’t take part to the election.
Did you have a preference for one of
I think the only good candidate was El-
Baradei and he decided not to take part
of what he called a farce.
How can you become a president with-
out knowing your job because there is no
constitution yet. This is the crucial ma-
noeuvre that has been going on for a year
in order to keep the old structure intact
How Europe can help Egypt in this dif-
ficult period?
First of all I think that European tourists
should come back to Egypt, millions of
tourists used to come when the Egyp-
tians were suffering the Mubarak regime
and now that we are trying to stand up
again and do something about our lives. I
find this a little bit irresponsible. I’m not
an idealist but there is always a way to
blow facts out of proportions and scare
people, this is also the strategy of some-
one who wants to keep old structure.
Then spreading constantly this feeling of
instability and fear people will be asking
for more repression and demanding for a
Then again Europe should choose better
his economic partner, and not close its
eyes to corrupt dictators.
Was it difficult to work on a movie like
this in your country in this particular pe-
riod? How did you work with the actors?
It’s always difficult to make a movie but
the specific difficulty about this movie
was to tell a story and at the same time
to stay open to the outside world and try-
ing to integrate what people in Egypt is
thinking in that particular moment
rather then allowing them to be some-
thing against the film.
If your head is constantly preoccupied
about what is happening outside you usu-
ally make a bad film so we started from
the fact that we are preoccupied about
what’s happening outside then let’s use
this as a driving force for the film rather
then an enemy.
Then about my job with the actors, they
need to see that you like what they do
and that you trust them. But I don’t want
to generalise because every actor has his
demons and anxieties.
Then, I‘m very physical with them and
I give them instructions about move-
ments and afterwards I watch them so
I can see how they are going to deal
with the space, the dialogues and the
body language.
How do you see the other revolutions in
Tunisia and in Libya?
I think that they were experiencing the
same kind of problems that we have, may
be in different proportions, even though
the pattern is the same with a corrupt
structure who needs to be rebuild again.
Page 20 |New Europe
27 May - 2 June, 2012
Academy Award winning actor, Cuba Gooding
Jr, celebrates FilmAid’s work in Cannes
Europe should ‘not close its eyes to corrupt dictators’
Egyptian film director Yousry Nasrallah,
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At this year’s Cannes film festival, a new
short film documenting the work of Fil-
mAid an organisation formed in 1999 with
the belief that movies could have a healing
effect on refugees and displaced people,
specifically those fleeing war in Kosovo, is
being screened.
FilmAid is a non-profit organisation that
uses the power of film and media to tran-
scend language and literacy, bringing life-
saving information, psychological relief and
much-needed hope to refugees and other
communities in need. It currently operates
two ongoing programmes in Kenya: the
Kakuma Refugee Camp (93,000,000 peo-
ple) on the border of South Sudan and the
Dadaab Refugee Camp on the border of
Somalia (nearly 500,000 people). These
programmes serve refugees from Sudan,
Somalia, Uganda, Rwanda, Congo, Burundi
and Ethiopia. FilmAid also works with
challenged communities within Kenya, in-
cluding the Mathare and Kibera Slums. In
late 2009 FilmAid started working with
Burmese refugees in Thailand, and in 2010
began work with Internally Displaced Per-
sons in Haiti, following the devastating
New Europe asked the actor how he be-
came involved in this project
“I travelled to Nigeria where there are so
many young actors who wants to make a
statement about their community and in
doing so you learn so much about them. I
grew up in Los Angeles in a violent envi-
ronment and I remember that when in my
neighbourhood the community broke off in
my area, we had colours representing your
block and because you were from a certain
block you couldn’t speak or interact with
people from other blocks and that’s where
violence started. I think violence is created
by ignorance and ignorance is supported by
the lack of knowledge of your enemy and
how can you for example drop a bomb in a
country if you don’t know who those people
are. So working with them was for me the
best way to understand a society and giving
my camera I could show them that we are
all part of the humanity. This experience re-
ally educated me about how they live their
live and to be closer to them also because
we have the same skin colour even if we talk
a little bit in a different way. FilmAid then
came in their hometown and allowed them
to create the world they are living and show
to the entire world how they live. Commu-
nities in crisis need information and em-
powerment and FilmAid provides both
through the power of film.”
Caroline Baron, FilmAid Founder, con-
cluded, “FilmAid was formed in 1999 with
the belief that movies could have a healing
effect on refugees and displaced people,
specifically those fleeing war in Kosovo.”
New Europe | Page 21
27 May - 2 June, 2012
n Western imagination, the Orient
represents a geographical and cultural
space that stretches from the Strait of
Gibraltar to the Indian Ocean, a set of
countries along the southern and eastern
coast of the Mediterranean that includes
Maghreb, Egypt, Greece, Turkey and Pales-
tine, as well as the Middle East. This is the
old Levant, which is, for us, inextricably
linked with Islam but also the birthplace of
our Judeo-Christian civilization.
Moorish Spain architecture, Genovese
and Venetian trade, Ottoman missions, Ro-
mantic literature, wars of conquest or arche-
ological expeditions in Palestine and Egypt
have fed our vision of the Orient while col-
orful Kasbahs, vast deserts, narghiles, tiles
and carpets have added a new repertoire of
motifs and subjects to XIXth century Ori-
entalist Art.
Furthermore, languorous Odalisques,
Turkish bath and harem scenes have offered
Western art the opportunity to renew the old
theme of the feminine nude in an exotic fan-
ciful oriental décor, with a slightly voyeuristic
display of exuberant eroticism. The sunlight,
the bright warm colors, the sense of minute
detailing and decoration, make the Orient all
the more seductive.
When looking back at the history of cos-
tume, one finds that Europe’s attraction for
oriental dress is very ancient. Made popular
by costume books, the Turquerie style (XVIth
– XVIIIth Century) with its loose, flowing,
embroidered gowns, turbans, luxurious tex-
tiles, with stripes or floral stylized motifs,
pantaloons, fitted sleeve-less boleros, long
transparent veils and bejeweled headbands,
reflects the growing trade relations between
East and West.
Indeed, in 1914, the Orient had kept its
hypnotic powers and was still a favorite
source of inspiration as French Couturier
Paul Poiret, nicknamed ‘Le Pacha de Paris’,
designed caftans, ‘harem pants’ and turbans
trimmed with exotic feathers… without hav-
ing ever traveled to the Middle East!
Geometrical motifs, gold embroidery and
the layering of different pieces of clothing,
both transparent and opaque, arranged to re-
veal all materials separately, are some of the
elements borrowed from Arab, Persian and
Ottoman traditions, and reinterpreted by
Couturiers since the 1920’s, for a wealthy
Western clientele.
However, nowadays, French and Lebanese
Couturiers propose sumptuous evening gowns
and daytime wear to Middle Eastern royalty,
who, despite the Chinese and Eastern Euro-
pean markets’ growing demand for luxury
goods, remain Haute Couture’s most faithful
clients. Gulf princesses, for instance, with nu-
merous weddings and parties to attend to,
have a much busier social agenda than Amer-
ican or European jetsetters.
Western designers have assimilated the
contrast between the private and public
spheres that defines Middle Eastern women’s
social life. While they can wear any high-end
designer model at home, their public appear-
ance must respect Islamic modesty etiquette:
non-revealing garments, headpieces, long
sleeves, long skirts and high necklines.
French Couturier Stephane Rolland, for
instance, successfully designs elegant, ‘closed’
gowns in a contemporary, almost futuristic
style, for the beautiful HRH Sheikha
Mozah bint Nasser Al Missned of Qatar, a
prominent figure and role model for women
in the Middle East, and an active fashion
supporter, having created the Qatar Luxury
Group in 2008 and planned Qatar’s first
Fashion Week, which should take place in
Doha, in November 2012.
In a different spirit, talented Lebanese de-
signer Basil Soda adds refined oriental
touches with transparent fabrics, golden em-
broidery and draped layers of luxurious tex-
tiles, to his discreetly sensual mermaid gowns.
Last but not least, we see the rise of Mid-
dle Eastern designers such as Omani Nawal
Al Hooti, who is well known for her lumi-
nous exceptional colors and a respect for her
homeland’s traditions that doesn’t exclude so-
phistication and glamour.
Louise Kissa
HRH Sheikha Mozah bint Nasser Al Missned of
Qatar in Stephane Rolland Haute Couture, Offi-
cial visit, Matignon, Paris, June 2009
Fall/Winter 2012
© Nawal Al Hooti
Haute Couture Spring/Summer 2012
© Basil Soda
Haute Couture Spring/Summer 2012
© Stephane Rolland
Patio in Tangiers (1869-70)
Guezireh Museum, Cairo
Oriental encounter
New Europe | Page 22
27 May - 2 June, 2012
launch of a new satellite
internet service
Optimus and Skylogic, a subsidiary of Eutelsat Commu-
nications,have just signed a Tooway business broadband in-
ternet service distribution agreement, a service which will
be provided to the Portuguese market using a high yield
KA-SAT satellite. Eutelsat Communications, the holding
company of Eutelsat S.A, has 26 commercial satellites pro-
viding cover of continental Europe, as well as the Middle
East,Africa,India and other significant parts of Asia and the
Americas,and is,in terms of revenues,one of the three main
satellite operators in the world. The solution allows busi-
ness customers of Optimus to now have broad band cover
with speeds of up to 10 MB in any part of the country, in
particular in remote areas, which today are not covered by
other access technologies. Based on the Global Vsat Cover
technology, the Tooway service provides users with down-
load speeds of up to 10mb per second and uploads of up to
4mb per second, with similar quality levels to land based
ADSL services.João Ricardo Moreira,Optimus’Businesses
Marketing Manager, says “this new technology will allow
Optimus to continue to provide a service of high quality,
supported by an outstanding network, maximising its cov-
erage of the Portuguese mainland with this addition to its
product offer. We are convinced that this solution will give
greater flexibility and a more cost effective solution to all
companies, with clear benefits for our business customers”.
France’s business
confidence tumbles
Data from INSEE last week showed France’s business
confidence slipped more than expected in May. According
to the INSEE survey data, the business confidence indica-
tor for the manufacturing industry dropped to 93 in May
from April's 95, remaining significantly below its long-term
average. The general production outlook indicator fell
sharply to -29 from -14, the agency said. The personal pro-
duction outlook index, meanwhile, improved slightly to -4
from -5. The agency was not much optimistic in its fore-
cast for the coming months saying that manufacturing ac-
tivity may not be dynamic.
EFSA waters down
French GM maize ban
The French stand on a variety of genetically modified maize
has met with a sizeable challenge from the European au-
thority. The European Food safety Authority (EFSA) has
officially turned down the grounds for France’s ban on a
strain of GM maize. Despite an adverse court’s ruling, the
French government vowed earlier this year to continue with
its 2008 ban on Monsanto’s MON810.This variety of maize
is grown out of an insect-resistant strain and is widely in use
in several European countries. The court in its ruling em-
phasised that the governmet couldn’t furnish enough evi-
dence to prove that the crop posed a significant risk to health
or the environment. However the French authority said they
intended to maintain the ban. But in a scientific opinion
published on its website 21 May,the EFSA announced that
its GMO Panel concluded, based on the documentation
submitted by France, that “there is no specific scientific evi-
dence,in terms of risk to human and animal health or the en-
vironment,”that would support’the ban or invalidate EFSA’s
previous risk assessments of the GM maize. A spokesman
for EU Health Commissioner John Dalli was quoted as hav-
ing said in local media that the executive body would con-
sider how to follow up on this ruling and could “technically
ask France to raise its ban”on MON 810.
Some 800,000 metalworkers in the south-western Ger-
man state of Baden-Württemberg won a 4.3% pay rise
after marathon negotiations, their union IG Metall said
on 19 May, The Local reported.
The regional deal, the first to be signed in Germany
this year, sets a benchmark for wage negotiations in other
regions for a sector that employs 3.6 million people and
is the backbone of Germany's export-driven industry.
IG Metall had demanded a rise of 6.5% over 12
months, pressuring the businesses of the sector with
country-wide strikes since the end of April, notably by
employees of Bosch, Siemens and Daimler.
Wages had stagnated, but workers have been embold-
ened by Germany's resistance to the eurozone crisis to
demand a bigger a piece of the pie.
But they have not done as well as Germany's two mil-
lion civil servants, who last month secured a 6.3% pay
hike over two years.
Yet hot on the heels of the agreement came a specific
conflict between the union and General Motors over
fears that an Opel factory in Bochum could be closed.
“We are in a position to lead a very tough conflict with
Opel and GM,” said Armin Schild, leader of IG Metall
“Opel and GM managers should know in advance
what they are letting themselves in for,” he said on 19
US auto giant GM, which owns Opel, confirmed that
it would stop producing the Astra car in Germany, mov-
ing the work instead to the UK where workers have
agreed lower wages and a 24-hour, 7-day-a-week regime
- and Poland.
But capacity at the Russelsheim factory will continue
to be used, the company said, leading to speculation that
production of the Zafira compact van could be moved
from the Bochum factory to Rüsselsheim.
Metalworkers get pay rise, vow to take on Opel
Spain appoints auditors
to look into banks
Whatever the critics may say about
the state of their banking sector, the
Spanish government now is set to
have their answer. In a bid to dispel
doubt about the state of Spanish banks
as also to unveil their real state of
being, the government recently hired
Roland Berger and Oliver Wyman to
The firms, as reported by local
media, would focus their task on find-
ing the state of the property assets of
Spanish banks on calculating the ac-
tual amount of exposure the banks
have to the troubled properties, popu-
larly dubbed as the toxic assets in Eu-
rope now.
However, the government report-
edly claimed that the appointment of
the firms weren’t any indication that
the government might need a foreign
bailout to save the banks which are be-
lieved to be struggling with their prop-
erty sector exposure since the bubble
burst in 2008.
According to observers, the gov-
ernment’s move was aimed at assur-
ing the investors regarding the real
state of Spanish economy of which
the banking sector forms an integral
part. Despite Madrid's reassurances,
many investors believe the property-
related losses have not been fully
Some even fear that the state may
have to take over much of the banks'
bad loan portfolio resulting in in-
creased pressure on Spain's sovereign
credit rating. The latest measure came
on top of the new banking reform
which requires the banks to set aside
another €30 billion in 2012 to cover
probable losses on toxic debts.
That was appurtenant to €53.8 bil-
lion in provisions required under re-
forms enacted in February. Alongside
the new measures, the government
promised to name independent audi-
tors to verify banks' balance sheets.
According to available data, the
Spanish banks held €184 billion in
problematic loans at the end of 2011,
60% of the total property portfolio.
"The aim of this initiative is to in-
crease transparency and definitively
clear up doubts about the valuation of
banking assets in Spain," a Bank of
Spain (BoS) statement was quoted as
having said.
As explained by the central bank,
the review led by German-based
Roland Berger strategy consultants
and by Oliver Wyman, which is part
of the New York-based Marsh &
McLennan consultancy group, would
have two parts. The first would be a
general valuation of banking balance
sheets in Spain and their capacity to
resist an adverse scenario, it said.
The results were due in the second
half of June. The second "fundamen-
tal" part of the review would be to
contrast how each banking group esti-
mates the value and deterioration of
its assets, BoS said.
Spanish Economy Minister Luis
de Guindos meanwhile claimed at a
forum that the country had no need
of foreign help for its banks and he
was optimistic about the banking
sector review. "No external help of
any kind is needed," he said, adding:
"I am fairly confident that the valu-
ations will not reveal further require-
Spain's Minister of Economy Luis de Guindos gestures as he holds a press conference.| EPA/CHEMAMOYA
New Europe| Page 23
27 May - 2 June, 2012
Italian farmers suffer
loss on quake
The devastating earthquake that struck Italy on 20 May
caused severe harm to the country’s agriculture sector raking
up around €200 million in damages. The Coldiretti farmers’
association reportedly estimated the cost by calculating the
loss of 400,000 wheels of parmesan cheese, damage to farm
buildings and machinery and the loss of animals. The Emilia
Romagna region felt the worst quake in around 700 years
that killed at least seven people. The quake was followed by
170 aftershocks. The government had yet to put an estimate
on the total damage. Around 3,500 people slept in tents and
cars after their homes were damaged by the quake or they
were too scared to return. Prime minister Mario Monti re-
turned early from a NATO summit in Chicago to lead the
government’s response to the disaster.
Malta Enterprise
suspends energy grants
The energy companies looking to benefit from Malta’s gen-
erous Energy Grant Scheme suffered a “temporary” hit last
week after Malta Enterprise announced temporary suspen-
sion of the scheme due to some irregularities in quotations
submitted by beneficiaries. As explained in local reports, the
grant allows companies to apply for up to a 50% refund on
approved projects which include energy saving measures and
renewable energy technology. "During the course of routine
checks, Malta Enterprise has noticed that certain quotations
submitted by beneficiaries of the Energy Grant Scheme may
not be in bona fide," a ME statement reportedly noted. It
added that the case had already been referred to the police
for investigation and the corporation had also asked the in-
ternal audit committee to review compliance with internal
procedures.Addressing the market concern regarding the un-
certainty ME said the relevant beneficiaries would be in-
formed individually of this development and claim processing
would re-commence “once the final results of the investiga-
tion are known and any necessary corrective actions taken.”
Adria expected to be
privatised this year
The Slovenian national carrier Adria Airways is expected to
be privatised this year under a cloud of heavy financial losses,
sliding passenger numbers and rising fuel prices. The tender
call for the privatisation of Adria will be prepared by next
month, according to a statement released by the airline,
Balkans reported. Rumours have circulated that both Qatar
Airways and Turkish Airlines have shown interest in Adria.
However, similar speculation was made for other privatisa-
tion attempts of former Yugoslav carriers, all of which ulti-
mately turned out to be false. Adria has been unable to either
lease or sell two of its grounded aircraft as there is simply no
interest on the market. The carrier has also reacted to Wizz
Air’s new flights to Ljubljana. Adria said that while the pub-
lic have blamed the airline for reducing the mobility and
connectivity of Slovenians to the rest of the world, Wizz Air
will launch flights on routes already operated by Adria (Brus-
sels and London). The airline said that it is yet to make a
decision whether to extend its seasonal flights to London
throughout the year, but adds that Wizz Air’s arrival will be
taken into account. Meanwhile, Adria Airways Tehnika, the
airline’s technical division which it sold to Ljubljana Airport
as well as the state run PDP restructuring firm, have pub-
lished an international call to offload their 100% holding of
Tehnika. The maintenance company has been plagued by
financial losses and further impacted by the loss of its second
busiest customer, Spanair, which declared bankruptcy ear-
lier in the year.
Austrian postal services company Post
AG has managed to increase its turnover
and earnings, Austrian Independent re-
The partly state-owned firm said it
achieved a turnover of €605.7 million in
the first quarter, six per cent more than in
the same period of 2011. Earnings be-
fore interest and taxes (Ebit) climbed by
14.4% to €48.8 million.
Post AG has around 23,000 full-time
staff. With over 19,000, the lion’s share
is employed in Austria. Post AG boss
Georg Polzl said his firm was currently
checking the potential for takeovers in
the now liberalised postal services market
of Eastern Europe. He refused to dis-
close further details concerning these
plans. Post AG bagged a 26% interest in
PostMaster, a Romanian company, in
October 2010.
OIAG, the Federal Industry-Holding
Stock Corporation, manages the Re-
public of Austria’s 52.9% stake in Post
AG. The holding is also on charge of the
state’s 31.5% interest in energy sector top
dog OMV AG and its 28.4% Telekom
Austria (TA) stake.
Post AG’s turnover improved by more
than four per cent in 2011, to €2.3 bil-
lion, despite the declining number of let-
ters and postcards. Post AG’s employees
received a per capita bonus of €750 per
capita due to the company’s strong per-
formance last year. Post AG’s Ebit shot
up by over seven per cent to €168.3 mil-
lion from 2010 to 2011.
Post AG is expected to keep expand-
ing the network of Post Partners. More
than 1,200 private enterprises are cur-
rently operating as Post Partners across
the country. They offer basic postal serv-
ices to compensate for the closure of reg-
ular post offices. Customers of Post
Partner groceries, call shops and
newsagents can post letters and pick up
parcels. Polzl said Post AG was saving
€40,000 a year with each new Post Part-
ner cooperation. He said a poll had
shown that around 90% of Post Partner
clients were happy with the service.
The future of the Koper Port was in
focus at a maritime panel held on 22
May, Invest Slovenia reported.
Luka Koper CEO Gregor Veselko
stressed the importance of a strategic
partner for the long-term development
of the port, while economist Joze
Damijan sees the future in creating a
port authority with at least two conces-
Port operator Luka Koper is looking
at large infrastructure projects which are
“extremely capital intensive’’,Veselko told
the panel. He said the company could
alone finance investments only up to a
certain extent, but for anything more al-
ternative sources would need to be found.
“In this context a question of a strategic
partner is likely to arise very soon,’’ he
With trans-shipment on the increase,
Luka Koper is at a watershed moment,
Veselko said, adding that if things are to
be move forward, a concrete form of co-
operation with a strategic partner would
become urgently necessary.
Luka Koper is stagnating and is cur-
rently in a very bad capital condition, and
would as such need a strategic partner, he
In the long run, a port authority would
need to be formed, together with at least
one more concessionary in addition to
Luka Koper. The second concessionary
would build a third pier and a second rail
track between Divaca and Koper, Dami-
jan believed.
Some of the problems Luka Koper is
facing are also due to state ownership, he
believes. If the port operator was to be
privatised through a strategic partner and
the state stake reduced to say 25%, then
the politics would lose its influence and
this would have beneficial effect on the
port's future growth, he pointed out.
Koper Port at watershed moment, Maritime Panel hears
Post capitalism as Austria’s Post AG is looking at growth.| APA/ROBERT NEWALD
Post AG turnover up by 6%
Mexican tycoon Carlos Slim is looking to buy a share in
Telekom Austria and has reportedly had initial discussions with
Ronny Pecik and Austrian state holding firm OeIAG, the op-
erator’s two biggest investor groups, it was reported.
Pecik has a 20% stake in Telekom Austria, with partner
Naguib Sawiris, while OeIAG holds a 28.4% share in the op-
erator. According to Format, both these shareholders may con-
tinue to hold their shares in the Austrian operator for up to
two years before selling it.
According to Reuters, the report could not be confirmed.
Slim's company America Movil’s spokeswoman declined to
comment on this development to Format.
This news followed just after Slim offered to purchase a stake
in Dutch operator KPN previous week.
Slim eyes share in Telekom Austria
Page 24 |New Europe
27 May - 2 June, 2012
WABCO to supply braking
tech to South America
WABCO Holdings Inc., a Brussels-based supplier to the
commercial vehicle industry, has entered into a long term
agreement with IVECO to supply anti-lock braking tech-
nology for IVECO’s platforms of light- and medium-duty
trucks produced in Brazil from 2013 onward. IVECO, a
global manufacturer of commercial vehicles, is headquar-
tered in Turin, Italy. WABCO’s new agreement with
IVECO is consistent with the Brazilian federal govern-
ment’s mandate for compulsory anti-lock braking systems
(ABS) on new trucks, buses and trailers to further increase
vehicle and road safety. According to Brazilian legislation,
40 percent of total commercial vehicles produced in Brazil
in 2013 must be equipped with ABS and 100 percent in
2014. Presently, a small percentage of new commercial ve-
hicles registered in Brazil are equipped with ABS which
prevents locking of a vehicle’s wheels when road friction is
not sufficient to transmit braking forces. WABCO pio-
neered ABS for commercial vehicles in 1981 and is by far
the local market’s leading technology supplier.
Cargolux has a
weekly Brazilian run
Cargolux Airlines International S.A, the Luxembourg-
based leading cargo airlines company announced the ad-
dition of Manaus, Brazil, to its network of worldwide
destinations. Manaus is the capital of the federal state of
Amazonas and counts nearly 2 million citizens. It is a free
trade zone that has developed into one of Brazil’s major
industrial centers for electronic and consumer goods. Man-
aus’Eduardo Gomes International Airport is Brazil's third
largest cargo airport in terms of freight movements. ‘Brazil
is an important market for Cargolux, it is the economic en-
gine of the region,’said Frank Reimen, Cargolux President
and CEO. ‘The presence of multinational companies has
stimulated demand for fast and reliable air cargo transport,
which is precisely what we offer our customers.’ Reimen
added. Brazil, the largest country in Latin America, has
been served by Cargolux since 1997. The country plays an
important role in world trade as a major exporter of trans-
port equipment, footwear, cars and iron ore. On the de-
mand side, rapid economic growth has fueled imports of
machinery, chemical products, oil, electronics and automo-
tive spare parts.
Drop in house prices
more substantial
Prices of existing owner-occupied dwellings sold in April
2012 were on average 5.2% down on April 2011. Ac-
cording to the price index of existing residential prop-
erty – a joint publication by Statistics Netherlands and
the Land Registry Office – the price decrease was more
substantial than in the preceding month, when residen-
tial property prices were 4.7% down on one year previ-
ously. The index reflects price changes of existing
owner-occupied dwellings in the Netherlands sold to
private individuals.Just as in the preceding months, res-
idential property prices fell across all provinces. All types
of dwellings were cheaper in April 2012 than in April
2011. More than 8 thousand existing owner-occupied
dwellings were sold in April. House sales were more than
18% down from April 2011. The downward trend was
observed in all provinces and applied to all types of
dwellings. The total number of house sales in the period
January 2012 – April 2012 was just over 32 thousand,
i.e. 16% down on the same period in 2011.
BSkyB no longer dominates the British
pay-TV movie market following the ar-
rival of new entrants Lovefilm and Net-
flix, a regulator has said, RTE Ireland
This was a boost to the broadcaster
by reversing its initial findings.
"Competition between providers of
movie services on pay TV has changed
materially and, as a result of these
changes, consumers now have much
greater choice," said Laura Carstensen,
chairman of the Competition Com-
mission investigation.
"Lovefilm and Netflix offer services
which are attractive to many consumers
and they appear sufficiently well re-
sourced to be in a position to improve
the range and quality of their content
further," she said.
Given the findings, the regulator said
it would now not propose any remedial
action. It will review responses to its re-
vised finding before reaching its final
verdict. The provisional finding was a
reprieve for BSkyB which has clashed
repeatedly with regulators in recent
years over its dominance of pay-TV,
putting at risk its ability to lure cus-
tomers with the offer of exclusive movie
and sports content.
The Competition Commission had
previously found that Sky's subscriber
base of more than 10 million homes
gave it an advantage over rivals who
struggled to bid for the rights to first-
run Hollywood movies.
While the commission noted that
BSkyB still held the rights to the
movies of all six major Hollywood stu-
dios for the first subscription pay-TV
window, it said Netflix and the Ama-
zon-owned Lovefilm had already ac-
quired rights to several other studios.
UBS analyst Polo Tang said the an-
nouncement was a small positive for
BSkyB, which would add to the solid
trading, scope for price rises and the po-
tential for more share buybacks, which
have supported the group through the
economic downturn.
BSkyB cleared in UK
pay-TV movie probe
British bank Barclays said it will sell its 19.6% holding in US
asset manager BlackRock, worth $6.1 billion and which it
has held for almost three years, RTE Ireland reported.
Tougher global regulations mean banks have to hold more
capital against their stakes in asset managers and other firms,
making it less profitable.
Barclays chief executive Bob Diamond is attempting to get
the bank's return on equity back above 13%. He is doing this
by selling or shutting businesses or investments that do not
stack up.
Barclays said the shares would be sold by way of an offer-
ing and a related buyback by BlackRock of up to $1 billion of
the stock. Bookbuilding was expected to take a couple of days
before the price of the share sale is finalised.
Barclays holds BlackRock common stock and convertible
stock that represent 19.6% economic interest in the firm. The
holding dates from BlackRock's $13.5 billion purchase of
Barclays Global Investors in June 2009.
That made BlackRock the world's largest money manager,
almost doubling its size to give it roughly $2.8 trillion of as-
sets under management, and gave the Barclays a much-
needed capital boost.
Barclays toss BlackRock stake
SES, the Luxembourg-based Europe's
premier direct-to-home (DTH) satel-
lite operator, has signed new contracts
with the African telecommunications
carrier, Gateway Communications
Africa for capacity on its NSS-703
satellite at 313 degrees East and its
NSS-5 and NSS-7 satellites positioned
at 340 degrees East, it was announced
on May 21.
The additional capacity will allow
Gateway Communications to expand
its business with mobile network oper-
ators (MNOs) and internet service
providers (ISPs) on the African conti-
nent. "These organisations face infra-
structure issues in Africa due to the vast
territories to be covered and this is
where satellite coverage is used to alle-
viate some of the mobile backhaul lim-
itations", states Ibrahima
Guimba-Saidou, Vice President and
General Manager, of SES for Africa.
SES currently has eight satellites
serving the African continent, with a
further two planned for launch during
the course of 2012.
"Satellite connectivity remains a core
tool in connecting our customers to
each other and to the rest of the world.
As subsea cables bring more capacity to
the coast of Africa, investing in satellite
and building terrestrial networks have a
great future across Africa," said Phil
Braden, COO for Gateway Commu-
Gateway Communications is a pan-
African wholesale telecommunications
carrier supporting Africa's foremost
mobile operators and helping many of
the world's largest telecoms company
connect across Africa.
SES provides satellite capacity for gateway communications in Africa
Netflix and Lovefilm’s offerings get BSkyB off the hook.|NETFLIX
New Europe | Page 25
27 May - 2 June, 2012
Dial T for Tax
Parliament approved a proposal to introduce a HUF
2 per minute tax on telephone calls from 1 July, Bu-
dapest Business Journal reported. Service providers
will also have to pay HUF 2 per text message under
the new law. The new tax will be collected from the
service providers from 1 August. The government ex-
pects to collect HUF 44.4 billion per year from the
telephone tax. The tax would be capped at HUF 700
per month per capita. Companies would be paying a
maximum HUF 2,500 per month. The first ten min-
utes' worth of phone calls would be exempt from the
tax for private individuals, and emergency calls and
the calling of phone numbers raising funds for char-
ity will also be exempt.
Necas set to push tax
rises with slim majority
The government of Prime Minister Petr Necas last
week agreed in principle to push ahead with some un-
popular reform measures including tax hikes which
are likely to face uphill battle when placed in parlia-
ment for approval. In the lower house, the government
just has a wafer thin majority with the help of break-
away deputies from former ruling party Public Affairs
so it is likely to face the stiffest test to get parliamen-
tary approval of its plans. As part of its bid to over-
haul the Czech economy, the government now is
poised to push ahead with plans to raise the sales tax
from next year and introduce a tax on top earners.
Other measures would include scrapping a cap on
state health insurance contributions and raising the
tax on real estate transfers. All these measures were
announced in April as part of the government’s plan
to manage and maintain the deficit level within the
3% threshold. The austerity package, which is de-
signed to generate 105.7 billion crowns ($5.35 billion)
in new income in 2013-2016, will see the two value-
added tax rates rise by 1% to 15% and 21% from next
year until 2015. Probably adding to the public ire, the
measures will also see the introduction of a 7% "soli-
darity tax" on people making more than 100,000
crowns ($5,100) per month, or four times the average
salary. The government aims to cut the fiscal deficit
to 2.9% of GDP next year, 1.9% in 2014 and 0.9% in
2015. Observers noted that pushing ahead with these
measures now would be the stiffest challenge for the
Necas government as it now heavily relies on a bizarre
formation curved out with the breakaway fraction of
Public Affairs. Necas's centre-right government sur-
vived a confidence vote on 27 April with the help of
these breakaway deputies from Public Affairs, which
had been thrown out of the government when one of
its leaders was convicted of bribing party colleagues.
The Czech cabinet almost collapsed in April after the
split in the smallest of the three coalition parties. The
measures to be put in practice now were agreed in
April as part of a plan worked out between the lead-
ers of a three-party ruling coalition that dissolved
shortly after and halfway through a four-year term.
But the present revamped coalition only gives the
government exactly half of the seats in the 200-mem-
ber lower house, making it necessary to convince some
independent deputies to support the tax plans.
Whether one or more would be available was still not
certain. The ruling parties' popularity has plummeted
following years of budget savings and tax rises that
have hit many workers' pockets and hurt domestic de-
mand. The largest anti-government rally in the coun-
try's post-communist time took place in April.
Opel has high hopes for Hungary
The Hungarian Opel plant sees a jump
in production volumes ahead, as a re-
sponse to which it expects to hire several
hundred new employees over the next
three years, portfolio Hungary reported.
Opel projects to produce 40% more
engines at its Szentgotthard facility in
Hungary this year than in 2011
(222,000). The actual volume, of course,
depends on how large orders Opel will
get, but it already seems certain that
total output could be between 300,000
and 320,000 units. Two thirds of the
output is manufactured for US sales and
for the Mexico-based plants of General
Motors,but China and South Korea are
also on the client list.
Opel Hungary ships 1.6-litre and
1.8-litre engines overseas. These will
be used in Chevrolet Sonic and Cruse
models. The plan had a successful trial
production completed in the first
weeks of May and the results show
they can start the serial production of
the 1.6-litre gasoline unit, the first of
the three-member engine family, said
Tamas Solt, director of the Szentgot-
thard plant.
Opel Hungary expects production to
increase considerably and to hire several
hundred workers in the following three
years. Headcount at Opel Szentgot-
thard Kft grew by 178 last year and is
currently at 800. The plant plans to add
200 employees in 2012, in the second
half of the year.
Opel, which invested €735 million
between 1991 and 2010 in the Szent-
gotthard plant, will create 800 new jobs
in four years with its latest € 500 million
investment project. By 2015 it will op-
erate with a 1,400-strong headcount.
The European Investment Bank (EIB)
is lending 155 million Polish zloty
(some €39 million) to finance the pur-
chase of new rolling stock and imple-
mentation of infrastructure
improvements for the light regional
railway line connecting the south-
western parts of Warsaw with neigh-
bouring communes and smaller
The borrower is Warsaw’s regional
rail company (WKD), which signed a
15-year Public Service Contract for the
provision of passenger rail services with
the Mazowiecki region in 2009. This
will be further enhanced by a Support
Agreement to be signed between the
region, the EIB and WKD. The Pub-
lic Service Contract and the Support
Agreement provide the main security
for the EIB loan.
This railway modernisation will have
positive impacts on transport safety and
passenger comfort. It will help to in-
crease the mobility of the people em-
ployed in the Polish capital and so
increase their quality of life and the
competitiveness of the whole region.
The EIB loan will support the
purchase of fourteen new Electrical
Multiple Units, each with a maxi-
mum capacity of 500 passengers, of
which 120 may be seated. The proj-
ect also covers various infrastructure
improvements required for the new
rolling stock to be used efficiently, i.e.
track improvements, upgrading of
the power supply, an improved pas-
senger information and monitoring
system, and the installation of a fibre
optic cable.
The new rolling stock will almost
entirely replace the existing fleet and
the improvements will enable transport
capacity to be increased by some 17%
thanks to the higher speeds and re-
duced maintenance requirements of
the new trains.
EIB to aid upgrade of Warsaw railways
PPF Group may bid for Czech spectrum
One of the largest European private-equity firms PPF Group
is mulling its options of joining the vie for Czech mobile fre-
quency bandwidth which the Czech operator plans to table
by the end of this year, local reports revealed last week. It was
however not confirmed whether then group would finally
take part in the tender.
A PPF official reportedly unveiled their interest in the
bid though noted that their final decision on participa-
tion would depend on the final conditions of the tender.
Czech Republic based PPF, led by Czech financier Petr
Kellner, is the country's largest privately backed finan-
cial company by assets and has stakes in major energy,
industrial, insurance and consumer lending companies
throughout central and eastern Europe.
Thus far 29 companies or legal entities have expressed in-
terest in participating in the auction for the new frequencies,
according to the Czech telecommunication office (CTU).
Telefonica SA, Deutsche Telekom AG and Vodafone PLC
are named by the media as the frontrunners. The CTU plans
to review comments and submissions from the 29 potential
bidders until the end of June, start discussions with them in
July, and have the terms of the auction finalised by the end of
the year.
Czech Industry Minister Martin Kuba said earlier in May
that one of the goals of boosting competition in the local mar-
ket is to drive down mobile telephony prices, while the cash-
strapped government is eager to raise additional revenue from
the sale of frequency bandwidth.
Laszlo Keller from Budapest instructs Hungary's Prime Minister Viktor Orban (R) in the workings
of a 1911 Opel Torpedo's handbrake during Orban's visit to Opel in Ruesselsheim, Germany, 28
Page 26 | New Europe
27 May - 2 June, 2012
Need fuel? Put a fish
in your tank
Neste Oil has begun to produce renewable diesel from waste
fat sourced from the fish processing industry at its Singa-
pore refinery. The fat in question comes from the gutting
waste generated when processing freshwater pangasius
farmed in Southeast Asia after the fillets have been removed
for human consumption, it was reported. Neste Oil stated
that the renewable diesel produced from the batch cuts
greenhouse gas emissions by approximately 84% when com-
pared to fossil diesel and calculated over the fuel's entire life
cycle. “It makes good ecological sense to use waste and side
streams to produce advanced, premium-quality renewable
fuel,which is why our goal this year is to increase the amount
of by-products and waste we use as raw materials by hun-
dreds of thousands of tons compared to 2011, said Matti
Lehmus, Neste Oil's Executive Vice President, Oil Prod-
ucts and Renewables. As with all the other renewable in-
puts used by Neste Oil, this batch of waste fish fat complies
with the strict sustainability requirements of the European
Union’s Renewable Energy Directive. The batch can be
traced all the way back to the fish farm. Waste fish fat is also
accepted as a raw material for renewable fuel in the USA.
Skyways files for bankruptcy
Swedish budget airline Skyways Express has cancelled all
flights after it and its City Airline subsidiary filed for bank-
ruptcy on 22 May morning, The Local reported. "Skyways
Express AB with its daughter company City Airline AB
have today been forced to stop all payments," the company
said in a statement issued on the company's website. "As a
consequence all flights have also been cancelled with im-
mediate effect. Both companies will apply for bankruptcy in
the morning." The airline advised passengers with reserva-
tions on flights scheduled to depart last Tuesday to avoid
going to the airport, as there are no longer any scheduled
Skyways departures. The airlines flew to around 20 destina-
tions mainly in Sweden, but also serviced a number of Eu-
ropean cities,including Helsinki,Copenhagen,Prague,Riga,
Tallinn, Kiev, Birmingham, Manchester, Lyon and Zurich.
The company explained that Skyway's owners "decided not
to fund the company any longer", prompting the decision
to suspend all payments and cancel all flights.Sweden's main
airport Arlanda alone had 31 cancelled flights last Tuesday
due to the bankruptcy, and Swedish public radio reported
that some 12,000 people held tickets for scrapped flights.
Around 350 pilots, flight attendants and ground personnel
were at risk of losing their jobs, it reported.
Agilent to buy
Denmark's Dako
Electronics testing equipment maker Agilent Technologies
Inc will buy Danish cancer diagnostics company Dako
from Sweden-based private equity group EQT for $2.2 bil-
lion in cash to expand its life sciences business, Economi
Times reported. Dako is one of the leading global providers
of cancer diagnostics tools. Dako's products are sold in
more than 100 countries, and in 2010 its annual revenue
was approximately $340 million. The company employs
more than 1,000 people, primarily in Denmark, in Carpin-
teria, Califfornia, and other parts of the world. Acquisition
will strategically complement Agilent's research technolo-
gies and will accelerate growth in rapidly expanding seg-
ments of diagnostic markets. "Agilent's strategy in acquiring
Dako is about strengthening the company's presence in life
science and about revenue growth," said Bill Sullivan, Ag-
ilent's chief executive officer.
Ryanair has reported record profits but warned that surging
fuel costs and a worsening economic outlook in Europe meant
profits were likely to fall in the coming year.
The airline also confirmed it would pay out €483 million to
shareholders in its second dividend payout since floating in
1997. Ryanair posted a net profit of €503 million for the year
to the end of March, a 25% increase on the €401 million re-
ported the same time last year. It also was slightly better than
average analysts forecasts of €491 million. Revenues for the
year rose by 19% to €4.325 billion from €3.630 billion while
passenger numbers grew by 5% to 75.8 million from 72.1 mil-
lion despite the grounding of up to 80 planes during the win-
ter months. The airline said its fuel bill rose by €360 million
during the year as oil prices increased by 16%.
Ryanair said that worsening economic conditions in Europe
and stubbornly high fuel costs would cut its profit to between
€400-440 million in the 2013, making it the first year since
2009 that profit has fallen. See how Ryanair shares are doing
in Dublin here.
"We remain concerned about next winter as we have zero
yield visibility but expect recession, austerity, currency concerns
and lower fares at new and growing bases in Hungary, Poland,
provincial UK and Spain will make it difficult to repeat this
year's record results," Ryanair's chief executive Michael
O'Leary said. He said he expects that any increase in fares will
only partially offset higher fuel costs in the coming year and
says Ryanair's fuel bill will rise by €320m.
He also said that it expects more European airlines to fail
this year, as higher oil prices and recession continues to hit the
air industry.
Ryanair reports record annual profits
65 new jobs are to be created in Co
Waterford following a deal between
McDonald's Ireland and Dawn Meats,
RTE Ireland reported.
The Co Waterford based company
has won a five-year contract, worth € 300
million, to process up to 18,000 tonnes
of Irish beef annually for McDonald's.
The deal has led Dawn Meats to invest
€14.5 million in a new purpose built
processing facility in Carrolls' Cross, Co
100 jobs were created during the con-
struction of the plant which started last
The deal came after a review of beef
processing capacity across McDonald's
Europe which identified the need for an
additional processing plant in Europe to
meet current and future growth require-
ments. Ireland was identified as a strate-
gically important market with the
potential for long term assured supply
and Dawn Meats, who have partnered
with McDonald's for the past 25 years,
were given the opportunity to extend
this relationship on the value added pro-
cessing side. Previously, Irish beef was
transported to the UK and Europe for
processing, before entering the McDon-
ald's supply chain in those markets. The
move means that the products to be ex-
ported from Ireland are higher value add
finished beef products, instead of un-
processed beef.
McDonald's is the single largest pur-
chaser of Irish beef by volume, purchas-
ing approximately 40,000 tonnes of Irish
beef annually and it expects to grow this
further in the years ahead. The company
exported €110 million worth of Irish
beef in 2011, up from €80 million in
18,000 Irish farmers supply beef into
the McDonald's system. Currently, ap-
proximately 20% of all beef used in Mc-
Donald's Europe is of Irish origin
meaning one in every five hamburgers
purchased in McDonald's restaurants
across Europe is made of Irish beef.
McDonald's signs deal with Dawn Meats
AVTECH Sweden receives Chinese patent
AVTECH Sweden is awarded Chi-
nese patent on AventusNowcast,
once again proving global
patentability on its aircraft wind
optimization product system, a key
element in advancing the company's
commercialization process and im-
plementation of Performance Based
Operations (PBO), Swedish wire
The Chinese Aviation market is the
fastest growing market in the world.
With the approval of AVTECH's
AventusNowcast system patent in
China, AVTECH now holds patents
for the air and ground system applica-
tions in Sweden, Europe, USA and
China, thereby securing its position in a
fast moving and highly competitive
technology marketplace.
Through a continuous display of
patentable products, AVTECH is
showing strong commitment to con-
tinued innovation whilst effectively
moving the company along the com-
mercialization path.
"As we are now witnessing the imple-
mentation of Time Based Operations
(TBO) in the Middle East with Emi-
rates Airlines in Dubai and progressively
in Europe 2013 through the SESAR
project, the operational benefits and the
commercial value of AventusNowcast?
will increase accordingly", said Lars GV
Lindberg, CEO at AVTECH Middle
East LLC.
Wind is the external factor with the
largest influence on the capability of an
aircraft to fly an optimal, safe and fuel-
saving trajectory through the air. If the
flight is time-based, i.e. is set to follow
an exact timetable, it's imperative to
have detailed and updated information
about the wind conditions along the
flight's computed trajectory, and to
have that information fed to the on-
board computers at the correct time,
position and intervals.
The US fast food giant believes that I rish beef is in a field of its own.| AFP PHOTO / SAID KHATIB
New Europe | Page 27
27 May - 2 June, 2012
Slovakia to pay €260mn to
permanent bailout fund
Slovakia will have to pay a first instalment of almost
€132mn towards the founding capital of the European Sta-
bility Mechanism (ESM), the eurozone's new permanent
rescue mechanism, within 15 days of the date when the
agreement to set it up takes effect, Slovak spectator reported
on 18 May. The Finance Ministry has already submitted a
draft bill regulating Slovakia's position within the new res-
cue mechanism for review by various ministries. Slovakia
should pay a second instalment of almost €132mn into the
rescue fund later this year. Later, Slovakia should settle fur-
ther three instalments in 2013 and 2014 amounting to al-
most €396mn, reads a clause on impacts to the draft bill
on the ESM. To settle the first instalment, amounting to
€131.8mn, the government plans to use existing state rev-
enues without further increasing the national debt. How-
ever, to pay later instalments of the founding capital, further
debt will have to be issued. In addition to the €659.2mn in
five equal instalments that Slovakia will have to pay into
the ESM as its paid-up stake, it will be on call to contribute
more than €5bn in extra funds, as needed.
Riga eyes increased births
to offset brain drain
Latvia’s depleting human resource has alarmed the Latvian
authority as also the European experts. A 2011 survey re-
vealed the Latvian population shrank from 2.2m in 2000 to
just 2m as of last year -- plunging 13% in little more than
a decade. According to a recent economy ministry study, if
nothing is done to tackle the exodus, the population could
drop to 1.6 million by 2030 leaving the country with inad-
equate workforce. Some hope that return of some immi-
grants might plug the holes but most experts aren’t such
enthusiastic. According to reports in local media, some un-
official studies have found that after three years the num-
ber who are planning to come back in the short run drops
from 10 to 3%. To counter the situation, centrist Prime
Minister Valdis Dombrovskis set up a special task force on
demography. Their initial suggestions, as aired locally, sug-
gests initiatives for boosting the birth rate and coaxing sci-
entists to come home. Latvian Economy Minister Daniels
Pavluts said stopping emigration is a "priority" and efforts
to draw back the diaspora are a "second stage." Attracting
skilled labour from abroad should be "a labour supply of
last resort," he added. Improving access to kindergartens
and reviving fertility programme funding that was slashed
during the crisis top the central task force's list of priorities.
Dombrovskis has also floated the idea of using EU funds
to give expatriate scientists good reasons to return. Ac-
cording to the premier, the main reason behind emigration
is the economic situation: lack of jobs, and lack of well-paid
jobs. “That's what we need to concentrate on if we need to
deal fundamentally with emigration," he has said.
OECD cuts outlook
on Estonian economy
The Paris based Organisation for Economic Cooperation
and Development (OECD) last week published its spring
economic outlook with trimmed outlook on Estonia. The
OECD now expects the Estonian economy to advance by
2.2% this year, down by 1% from the figure forecasted in
autumn. In 2013, OECD says Estonian economy would
see 3.6% growth. The Estonian finance ministry’s own
forecasts are by 0.5 and 0.6% more optimistic. OECD
noted that the reason for the cut of economic growth fore-
cast was the insecure state of the world economy.
Tethys Oil started drilling at the Skomantai-1 well on the
Gargzdai license onshore Lithuania, the company said in a
press release last week, local reports revealed. The Gargzdai
license is owned by Lithuanian Company UAB Minijos
Nafta. Tethys Oil has a 25% indirect interest in the licence
through an agreement with Odin Energi A/S. The drill site
is located two kilometres north of the Pociai field, in west-
ern Lithuania.
According to the reports, the primary target of this ex-
ploration well is a previously undrilled oil prospect near pro-
ducing fields. The well would also penetrate a thick shale
section which would be evaluated for potential unconven-
tional hydrocarbons.
Drilling operations are expected to last for two months.
Reportedly, the Skomantai-1 well is planned to be drilled to
a total measured depth of 2,381 metres, and a true vertical
depth of 2,042 metres.
The well would target potential oil in Cambrian sand-
stones, which is the same as in all the producing oil fields on
the license. The well would also investigate potential for un-
conventional hydrocarbons in the Silurian source rock
shales, located above the Cambrian sandstones.
Tethys starts drilling at Lithuanian well
Data published by Latvia’s Central
Bureau of Statistics on 22 May showed
Latvian job seekers are experiencing a
tough time in finding new job. In the
first quarter, the unemployment rate
increased to 16.3% from 15% in the
preceding quarter. Though the figure
increased concern in households, stat-
isticians noted that it was still lower
than 17.6% recorded in the first quar-
ter of 2011.
The breakdowns showed there were
approximately 166,700 unemployed
persons in the country during the first
quarter, up from about 155,000 in the
preceding quarter. Meanwhile, the em-
ployment rate dropped to 54.5% dur-
ing the three-month period from 55%
in the three months ended December
The number of employed persons
decreased to 857,600 from around
876,700 in the fourth quarter.
Meanwhile, the total value of goods
in foreign trade of Latvia surged by
15.6% reaching 3453.5 million lats in
the three months to March, provisional
data of the Central Statistical Bureau
showed last week. Overall, the value
surged by 466.7 million lats of which
export value grew by 172.9 million lats
or 13.0%, whereas import value rose by
293.9 million lats or 17.7%. In the
quarter, there had been a decline in the
foreign trade balance, as the export
share in the total foreign trade volume
decreased till 43.5% compared to
44.5% recorded in the corresponding
quarter of 2011.
Latvian unemployment increases in Q1
The Estonian statistical agency Statis-
tics Estonia reported on 21 May that
the producer price inflation in the
country was on wane in April. The
breakdowns showed Estonia’s pro-
ducer price index increased 2.6% on
an annual basis in April, slower than
the 3.2% growth seen in March. Pro-
ducer prices in the manufacturing sec-
tor rose 2.1% annually, while mining
output advanced 2.2%.
There was a 6.9% annual growth in
the production of electricity, gas and
steam as well as air conditioning sup-
ply. On a monthly basis, output prices
moved up 0.2% in April. The monthly
growth was influenced mainly by an
increase in prices of electronic prod-
ucts, wood and wood products and
chemicals and chemical products, the
agency said.
Estonia's export prices decreased
0.6% month-on-month in April,
while on an annual basis, they rose
2.2%. The import price index moved
up 0.6% sequentially, taking the an-
nual growth to 5.5%, the data showed.
Output price inflation slows
Interior of a dairy in Tallinn. Estonia reported on 21 May that the producer price inflation in the country was on wane in April.
Page 28 | New Europe
27 May - 2 June, 2012
The Dutch minister of immigration, in-
tegration and asylum affairs, Gerd Leers,
said on 22 May that he was optimistic
about the future accession of Bulgaria to
The Dutch minister met the Bulgar-
ian Minister of Interior, Tsvetan Tsve-
tanov, during his official visit to the
Netherlands. The two ministers signed
an agreement on cooperation in border
control which is expected to have a pos-
itive effect in the fight against illegal mi-
gration. During the official meeting,
Tsvetanov and Leers discussed the fu-
ture cooperation between Bulgaria and
the Netherlands and, in particular, the
Dutch conditions on accession of Bul-
garia to Schengen.
The Dutch minister of immigration
stated that ‘the system of open boarders
can exist only on the basis of mutual
trust’ and therefore it was the opinion of
a majority of the Dutch parliamentari-
ans that ‘not only the technical criteria of
good boarder management must be met,
but also the political criteria, as agreed in
the Cooperation and Verification
Mechanism (CVM)’.
Furthermore, Leers said ‘We must be
sure that the fight against corruption and
organized crime is effective and sustain-
able. This is why accession to Schengen
is possible only after the CVM criteria
are met’. The Dutch immigration min-
ister stated ‘I am optimistic for the Bul-
garian accession to Schengen because I
saw the input, achievements and
progress made by the country’. However,
he explained that the Netherlands was
waiting to see the Commission CVM
report in July, because it was to show
whether this progress was sustainable.
Furthermore, Leers pointed out that he
Dutch cabinet was ready to reconsider
its position, if the report from the Com-
mission was positive.
The Dutch minister also said ‘We ap-
plaud the efforts made by Bulgaria in
order to fulfil all of the Schengen crite-
ria’, but also mentioned that the process
of assuring a positive Dutch position on
the Bulgarian accession to Schengen de-
pended also on ‘the opinion of the par-
ties in parliament, not only the
government’. On the other hand, the
Bulgarian minister of interior explained
that even Bulgaria and the Netherlands
had some differences in relation to the
entry of the new EU member to Schen-
gen, this did not affect the successful po-
lice operational cooperation. He stated
further ‘we know that we should never
make a compromise on the subject of se-
curity’and that ‘Schengen is perceived by
Bulgaria not as a privilege, but as addi-
tional responsibility for every member of
the EU which should be part of the
Union’s collective security’.
During his visit to the Netherlands,
Tsvetan Tsvetanov also had a meeting
with the Europol Director, Rob Wain-
wright. The two discussed bilateral co-
operation and future implementations of
joint operations.
Rob Wainwright stated that ‘cooper-
ation with Bulgaria is very strong now’.
He also praised the work of the Bulgar-
ian interior ministry and the successfully
conducted operations against counter-
feiting and credit card fraud. Wain-
wright and Tsvetanov jointly stated that
due to the efforts of both sides in the
past two years, the bilateral exchanges of
information between Europol and Bul-
garia have increased by 375%.
New Europe reminds that France re-
iterated its support for Bulgaria’s acces-
sion to Schengen and also expressed
conviction that the upcoming report of
the European Commission on CVM in
July would be positive.
Dutch minister optimistic about
Bulgaria’s accession to Schengen
The Bulgarian President, Rosen Plevneliev, stated at the
NATO summit in Chicago that the country will participate in
financing the Afghan security forces with $500,000 per year
after 2014. All member states, participating in the summit, an-
nounced their financial commitments under the NATO plan
for security assistance to Afghanistan after 2014. The total
amount of state contributions to the security assistance plan
after this date is expected to be $4.1bn per annum. The plan
also foresees that Afghanistan itself participates in building up
this amount with a contribution of its own.
Plevneliev announced that Bulgaria will participate in the
process of educating and training Afghan security forces and
will contribute $500 000 per year after 2014 for a period of
three years. The amount was decided during the last Council
of Ministers meeting on 9 May. Furthermore, the Bulgarian
president stated “We went to Afghanistan together and we
will leave Afghanistan also together.This is the clear and strong
message of the Summit”. In addition, during the Chicago
summit, the state and government leaders attached a state-
ment to the approved plan of the alliance, in this way trans-
ferring the responsibility for security in the country to the
Afghan security forces.
In relation, the Bulgarian president pointed out, “We will
stay in Afghanistan after 2014, but our mission will no longer
be fighting, but rather training and support”. The next NATO
summit, planned for 2014, will most probably deal with the
enlargement of the Alliance. In that respect, Plevneliev said
that Bulgaria was open to accept every state, as long as its
“words and deeds show that it shares the common European
and NATO values”.
The announced Bulgarian sum of $500,000 per annum is
the minimum amount which eligible NATO members could
contribute. In addition, the total amount of $4.1bn per year
will be divided the following way: $2.8bn to be covered by the
US, while the rest $1.3bn by the other members of the inter-
national coalition in Afghanistan.
Bulgaria to finance Afghan security forces
Nicosia, Vienna to boost
economic and trade ties
The opportunities and the possibilities offered for the further
enhancement of the economic and trade relations between
Cyprus and Austria are many, also due to the research for hy-
drocarbons in Cyprus, Cypriot President Demetris
Christofias said on 22 May, underlining the excellent politi-
cal relations between the two countries which can constitute
the background for further economic co-operation. “With
the foundations that exist in the political relations,a more sta-
ble construction of multilateral economic relations can be
built,”Christofias said while speaking to the journalists in Vi-
enna where he held political consultations with Austria’s Pres-
ident Heinz Fischer. “The opportunities and the possibilities
offered are many, also due to the need to address the eco-
nomic crisis, as well as due to the research for hydrocarbons
in Cyprus,”Christofias said. It is well-known that Cyprus is
a big economic centre,investments between the two countries
are high, on either side, and what is needed is to further de-
velop trade, he said. “I believe that the business forum be-
tween the commercial chambers of Cyprus and Vienna
constitutes a great opportunity and a good background on
which we could build,”he added. Speaking at a special cer-
emony held in the afternoon at the Vienna City Hall, where
he was welcomed by Mayor of Vienna Michael Haupl,
Christofias,who was given said,“We need to put people at the
centre of our attention.”
Rio Bucovina aims for
14% increase in sales
Romanian bottled water producer Rio Bucovina hopes to
have €30mn in turnover at the end of this year, a growth of
14% on 2011, Romania Insider reported on 23 May. The
company hopes that the long, hot summer will push con-
sumption up and help the market grow by up to 7%, above
the initial 3% increase estimation, according to Camelia
Hoinarescu, marketing manager of Rio Bucovina. Last year’s
turnover for the company – of some €25m, was below the
company’s 2011 estimates, but it was achieved “in a difficult
economic context and in very competitive market condi-
tions,”said Hoinarescu.
COSMOTE Romania reduces
roaming tariffs within EU
On 22 May, Greek mobile operator Cosmote’s Romanian
unit, Cosmote Romania, announced the reduction of by
17.1% the roaming tariffs for all calls originated from EU
countries to any other EU country and with 27.2% those re-
ceived within the EU space, as of July 1st, according to the
European Commission’s regulations. The new tariffs apply to
all Cosmote customers.Both subscribers and prepaid will ben-
efit from the Roaming Avantaj tariffs of 0.29 euro/min (VAT
not included) for initiated calls,of 0.08 euro/min (VAT not in-
cluded) for the calls received within the EU countries and 0.09
euro/SMS (VAT not included).For data traffic,COSMOTE
customers will benefit of a tariff reduction of 65%, so,starting
with July 1st the tariff for roaming data usage in the EU space
will be 0.70 euro/MB (VAT not included),charged per 1 KB.
Additionally, the Data Cap of 50 Euro will be also applicable
for customers while Roaming in any country,worldwide.“Re-
ducing roaming prices within EU and extending the Data
Cap service to all countries worldwide come in the advantage
of all COosmote customers,either travelling on business pur-
poses or for leisure, who will enjoy more using their phones
while abroad, worry free and much more relaxed regarding
costs”, Oana Cristea, Wholesales Department Senior Man-
ager, Cosmote Romania, stated.
Dutch Minister for Immigration and Asylum Policy Gerd Leers. |EPA/PHILNIJHUIS
By Stanislava Gaydazhieva
New Europe | Page 29
27 May - 2 June, 2012
REC open research center in China
The Norwegian solar energy company Renewable Energy
Corporation ASA (REC), announced that it intends to
open a new applications and research center, in Shangyu,
China. The STAR Center (Silicon Technologies Applica-
tions and Research Center) will be a technology develop-
ment and training facility that provides localized support
for REC Silicon customers. Additionally, the company will
exhibit at the sixth Annual SNEC International Photo-
voltaic Conference in Shanghai this week, where Tore
Torvund, Executive Vice President, REC Silicon, delivered
a keynote presentation at the silicon materials session (see
attached presentation).
The STAR Center will allow customers to evaluate
silicon materials, equipment and processes that impact
yield and cost in manufacturing mono and multicrys-
talline polysilicon ingots for the solar and semiconduc-
tor industry.
Kurt Levens, VP of Commercial Development and
Planning, REC Silicon, commented, "The STAR Center
will be our regional customer support and applications fa-
cility with the express purpose of teaching our customers
how to use our products and teaching ourselves how cus-
tomers should use our products. In doing this, we can bet-
ter determine the value proposition of our material in our
customers' processes." Additional benefits include defect
determination / reproduction in a non-operating environ-
ment in order to trouble shoot or recreate customer com-
plaints or problems, and optimization of customer
processes utilizing our materials.
The STAR Center will be wholly owned by REC; how-
ever REC has partnered with equipment manufacturer
Jingsheng M&E, a leading polysilicon ingot and furnace
manufacturer, based in Shangyu, China. The two compa-
nies will engage in collaborative research at the STAR Cen-
ter to investigate product attributes and processes, as well as
yield and packing efficiency improvements.
Hydro considers closing Australian plant
After curtailing one of three pot lines
at its Australian Kurri Kurri alu-
minium plant in January, Norsk
Hydro ASA is initiating consultation
with the plant's workforce with a view
to curtailing the remaining operations,
Norway Post reported on 23 May.
"Our Kurri Kurri workforce has
worked intensively to improve the
plant's cost position and no stone has
been left unturned. Despite extensive
efforts to improve profitability, we are
faced with a very challenging situation
at Kurri Kurri," said Hilde Merete
Aasheim, executive vice president of
Hydro's Primary Metal business area.
The profitability of Hydro's Kurri
Kurri plant has suffered as a result of
the continued weak macro-economic
conditions, with low metal prices and
an uncertain market outlook, as well
as the strong Australian dollar.
Following a thorough review, Hydro
stated in a press release, it is clear that
the plant will not be profitable in the
short term with current market prices,
while long-term viability will be neg-
atively affected by a number of factors
including increasing energy costs and
the carbon tax.
"The current cash losses are signifi-
cant, with no sign of improvement
anytime soon. We have therefore
started to consult about full curtail-
ment and will maintain a close dia-
logue with employees, unions and
local stakeholders," said Aasheim.
Customers' contracts will be sup-
plied through Hydro's global metal
products supply system, if the Kurri
Kurri plant is fully curtailed.
Hydro became owner of the Kurri
Kurri primary aluminium plant
through its 2002 acquisition of VAW
aluminium AG.
There were 69,200 job vacancies in
the 1st quarter of 2012 compared to
68,900 in the 1st quarter of 2011.
Administrative and support service
activities had the highest number of
job vacancies in the 1st quarter of
2012, with 10,800. Then followed
domestic trade with 7 100, Statistics
Norway reported.
The job vacancy rate in the 1st
quarter of 2012 was 2.8; the same as
in the 1st quarter of 2011. The job va-
cancy rate in administrative and sup-
port service activities was 7.5% in the
1st quarter of 2012, which is an in-
crease of 0.6 percentage points. The
job vacancy rate was 4.6 per cent in
residential care activities, which is a
decrease of 1.4 percentage points from
the 1st quarter of 2011. In informa-
tion and communication it was 4.2%,
which is about the same level as the
1st quarter of 2011.
In the 4th quarter of 2011, Germany
had the highest rate of job vacancies
among the countries in the EU/EEA
area, at 3%. The comparison with other
countries is based on the 4th quarter of
2011, as the figures of the 1st quarter of
2012 have not yet been published.
Norway had the second largest per-
centage of job vacancies in the 4th
quarter of 2011, with a rate of 2.5%.
Austria followed next with 1.8%. The
job vacancy rates of Sweden and Fin-
land were 1.3% and 1.6% respectively.
The EU countries combined had a job
vacancy rate of 1.5% in the 4th quarter
of 2011.
No further growth in job vacancies
Bank Wegelin shirks
second court hearing
Swiss Bank Wegelin has again failed to appear for a
hearing in a District Court in New York. As in Feb-
ruary, neither a bank employee nor a legal representa-
tive showed up for last Wednesday’s hearings, Swiss
Info reported.
Wegelin is accused of helping its clients hide more
than $1.2 billion (1.15 billion Swiss FranCs) in off-
shore bank accounts. The case is part of a United
States crackdown on alleged tax fraud. The indictment
of Wegelin, which was founded in 1741, marks the
first time that the US has accused a foreign bank –
rather than individuals – of helping Americans com-
mit tax fraud.
Federal prosecutor Daniel Levy said in court last
Wednesday that Swiss authorities had hand-delivered
a court summons and a copy of the indictment to
Wegelin executive Konrad Hummler on 2 May.
Already in February, the bank argued that the sum-
mons had not been delivered correctly. Levy said that
this time, the bank is contesting the second summons
under Swiss law.
At the hearing, Judge Jed Rakoff said once again, as
he had in February, that it is “rather hard to arrest a
corporation”. But he also asked why prosecutors had
not sought a warrant to arrest individual Wegelin
Prosecutor Levy answered that there was “some reason
to believe the Swiss authorities would not execute
such a warrant.” However, the prosecutors would con-
tinue to consider doing so.
Rakoff warned the prosecutors that if the government
does not “undertake reasonable efforts” to catch fugi-
tives, indictments against them can eventually be dis-
Just days before the US government indicted Wegelin
in February, the bank had announced the sale of its
non-US activities to Swiss cooperative bank Raif-
Rakoff said that if a US bank tried to pull something
along those lines, the government might argue that
this was “fraud upon fraud” and a sort of tacit admis-
sion of guilt.
Judge Rakoff also said he was concerned that the bank
didn’t show up, as this showed “a disrespect for the
process of the American justice system.” He added
that he thought this should be a worry “not only to
the US government, but also to the people that con-
stitute the Swiss government.”
Approached by the media after the hearing, prosecu-
tor Levy declined to say whether he would try to get
an arrest warrant for Wegelin executive Konrad
Hummler, who had been handed the summons in per-
son. In a press release published after Wednesday's
hearing, Wegelin & Co. stated that the Swiss law the
US had attempted to use to serve Wegelin was not ef-
fective to begin the legal process for a US court case,
as Swiss law explicitly states that “whoever accepts a
summons to appear before a foreign authority shall be
under no obligation to comply.”
Wegelin declined to attend the hearing, in part, be-
cause of the fear that the US court might issue an
order that could require it to violate Swiss law, the
press release stated.
Wegelin & Co. again stressed that, together with its
lawyers, it would be “willing to cooperate with the US
authorities and to resolve the matter within the
boundaries of Swiss law.”
Wegelin is one of 11 banks in Switzerland being tar-
geted by US tax investigators in a row over American
clients’ undeclared assets in offshore accounts.
Wegelin has no branches outside of Switzerland.
Norwegian companies are setting up in China in their quest for solar power and afjiord-
Page 30|New Europe
27 May - 2 June, 2012
Slovenia will not hamper
Croatia's EU accession
Slovenian Prime Minister Janez Janša clarified that his gov-
ernment will not sabotage Croatia's EU accession. Talking
with journalists ahead of the European People's Party sum-
mit on 23 May, Janša pointed out that the agreement was
reached with Croatian side on all issues and that Slovenia
would not hamper the accession schedule of its eastern neigh-
bours. Janša did not specify when he was planning to put the
Accession Treaty to ratification by the parliament,but assured
that it would be done timely. He added that relations with
Croatia and its newly elected centre-left government is very
good, joking that he is seeing Croatian prime minister more
often than his own wife. Janša's previous government long
delayed Croatia's negotiations over the disputed patch of
coastal territory and the access to the open sea. However, the
centre-left coalition managed to reach an agreement with
Zagreb on an arbitrage which should settle the dispute once
and for all, allowing Croatia to join the EU. Nevertheless, the
recent insinuations by the Croatian government that they
may revisit the outstanding debts of a Slovenian bank to-
wards Croatian citizens, previously agreed to be treated as a
part of former Yugoslavia succession negotiations, caused
concerns that another dispute between Ljubljana and Zagreb
could hamper Croatia's EU membership.
Presidential elections threatens
new political stalemate
Albania's parliament started the procedure for the election
of a new head of the state, with the ruling Democratic Party
under pressure to select a candidate based on consensus. Ac-
cording to the Constitution, candidate must have the back-
ing of 20 out of 140 MPs to be eligible for the election in the
parliament on May 30. Prime Minister and Democrat's
leader, Sali Berisha's said the election of the new president
should be fair, transparent and negotiated with the Socialist
opposition. "The majority has its numbers to elect the pres-
ident, but the process should go through transparent nego-
tiations, involving all political parties," he said. Berisha added
that the candidate must be a Democrat, which was rejected
by the Socialist opposition, who fears that the a crony pres-
ident would create an unprecedented concentration of power
in Berisha's hands. The opposition has been blocking the
much needed electoral reform and if no agreement is
reached on the election of the president, the political stale-
mate in the country could continue.
BiH government to collapse
after failed budget negotiations?
Coalition government of Bosnia and Herzegovina may face
restructuring, after only several months since its formation,
after a failure to reach an agreement on the national budget
between all parties of the ruling coalition. BiH House of
Representatives adopted on 24 May the 2012 budget,
amendments to the Law on Service in the Armed Forces of
BiH, and amendments to the Law on Salaries and Remu-
nerations in the Institutions of BiH without the votes of the
largest Bosniak party, the Party of Democratic Action
(SDA). The SDA leader, Sulejman Tihić, told media that
leaders of the six parties of the governing coalition failed to
reach an agreement acceptable to his party and therefore,
SDA withheld its consent. That would also mean that the
SDA would most likely leave the national Council of Min-
isters and cause a restructure of the government. Represen-
tatives of Bosnian Serbs in the government insisted that
SDA could not remain a part of the ruling coalition if they
did not support the basic financial plan of the government.
Co-habitation seems to be the
most likely outcome of Serbian
elections, after the parties which
participated in the previous govern-
ment managed to secure the major-
ity in the parliament and ostensibly
reached an agreement on forming a
new government.
Only a day after the incumbent
president and leader of the Demo-
cratic Party (DS), Boris Tadić, lost
the run-off against the populist
challenger, Tomislav Nikolić, and
stated that he would not consider
becoming the next prime minister
of the country, the DS leadership
met and insisted that Tadić should
lead the next government.
The main coalition partner of the
DS, the Socialist Party of Serbia
(SPS) of the former Yugoslav dicta-
tor Slobodan Milošević, also stated
on 22 May they would prefer to see
Tadić as the new prime minister.
The DS Presidency decided on 21
May to start talks on forming a
government with its potential coali-
tion partners.
Aside from the centre-left DS
and the Socialists, the governing
coalition should include the liberal
democrats and the centre-right
United Regions party.
The DS Presidency members
agreed to ask Tadić to become the
prime minister in a new govern-
ment, despite his previous rejec-
tion of such a possibility and in
case of his ultimate rejection, they
suggested newly re-elected Bel-
grade mayor, Dragan Đilas, to take
that position. Đilas, however, also
repeatedly denied being interested
in becoming Serbia's next prime
The SPS vice-president Dijana
Vukomanović said that both Tadić
and Đilas are acceptable solutions
for the head of the government.
Nevertheless, with neither of them
nominally willing to take over the
responsibility, and with four lists,
combining dozens of parties, being
poised to form the government,
personal solutions for the next gov-
ernment will not come easy.
However, Serbia has already lost
invaluable time for reforms and
harmonisation with the European
standards and values. The country
can hardly allow a painfully long
process of government formation
and additional lost of momentum
for the EU integrations.
Both the EU and the US, there-
fore, started putting pressure on all
major political actors to proceed
without delays with forming the
next government. Consequently,
the SPS issued the statement say-
ing that, in accordance with the
overall electoral result, the DS
should be entitled to have the
prime minister and even the acting
president of the SNS, Aleksandar
Vučić, stated that his party would
not object government formation
under the DS leadership.
Following a series of foreign in-
terventions and around the clock
calls to the DS leader from various
instances in Europe and the US, in-
cluding the former German Chan-
cellor Gerhard Schröder, who was
one of greatest allies of the DS and
the assassinated prime minister
Zoran Đinđić, and who was the
most responsible for the party's de-
cision to join the Party of European
Socialists, Tadić summoned on 25
May the DS presidency to decide
whether to accept the mandate or
Tadić is also supposed to meet
with Nikolić on 28 May to discuss
the formation of the new govern-
ment, indicating that the agreement
has been reached. The SPS leader,
Ivica Dačić, confirmed on 25 May
that his party and the coalition
around it would only participate in
the government with the DS and
stressed that “there is no dilemma
about it”.
However, there were also specu-
lations that there are pressures
"from the West" for the DS and the
SNS to from a grand coalition to
avoid cohabitation. Dačić said that
his party, under no circumstances
would partake in such a govern-
ment, and it is also unlikely to ex-
pect the SNS to be willing to take
responsibility for difficult decisions
which lay ahead of Serbia on its EU
A government led by the DS
would, in fact, represent a continu-
ity of policies conducted during the
past four years. However, the DS
president is aware that, considering
challenges ahead and the moral
highgrounds that now former SNS
leader Nikolić will have as the
country president, his party may
suffer at the next elections.
Calculations over what would be
the best for individual parties and
the country in short and long terms
could make an important element
of decision-making in creating the
new government.
Co-habitation likely in Serbia?
Tadić to take responsibility, Nikolić moral highground? | AFP PHOTO / ANDREJ ISAKOVIC
On 22 May, Pakistan and Turkey
signed nine documents for co-oper-
ation in various fields particularly in-
vestments, energy and
communications in a bid to further
strengthen their bilateral relation-
ship. Turkish Prime Minister Recep
Tayyip Erdogan and his Pakistani
counterpart Syed Yusuf Raza Gilani
witnessed the signing of accords in
The documents included an agree-
ment on bilateral investment, five
Memoranda of Understanding
(MoUs) mainly on energy, education
and communication and two proto-
cols on Joint Ministerial Commis-
sion and co-operation on archives.
The agreement concerning the re-
ciprocal Promotion and Protection
of Investments was signed by
Turkey's Economic Minister Zafar
Caglayan and Pakistan’s Chairman
Board of Investment Saleem Mand-
On 21 May, Gilani said Pakistan
is seeking more Turkish invest-
ments in multifarious sectors and is
ready to offer special incentive
package and exclusive investment
zone for Turkish entrepreneurs and
companies. Speaking at a dinner
hosted in honour of Erdogan, Gi-
lani said, “Pakistan would warmly
welcome more Turkish investments
in infrastructure, including energy,
construction and communication as
well as in urban development and
agriculture sectors”. “We are ready
to consider a special incentives
package and establishment of an
exclusive investment zone for Turk-
ish entrepreneurs and companies
desirous of setting up their busi-
nesses in Pakistan,” he added. He
said he was convinced that the sec-
ond High-Level Cooperation
Council (HLCC) would set a new
roadmap for expanding strategic
partnership between Pakistan and
Turkey, especially in economic and
commercial fields.
“We, in Pakistan, admire the giant
strides that Turkey has made on the
road to socio-economic progress
under your visionary leadership. The
people-centric policies and the wel-
fare agenda of your government have
made a deep impact in improving
the lives of ordinary citizens in
Turkey. We would like to learn from
Turkey’s experience,” Gilani said.
For his part, Erdogan said that
Pakistan and Turkey enjoy cordial re-
lationship and time tested friendship.
Turkish government and people al-
ways deem Pakistanis their brother.
Both the countries share the mo-
ments of contentment as well as dis-
tress of each other.
“During the destructions of the
past both Pakistan and Turkey pre-
sented a precedent in front of world
by continuing mutual co-operation.
Turkey would ever be grateful to
Pakistan for helping in the hard
times during war of independence.
There is not any example round the
globe of such a warm friendship. The
people of Turkey consider Pakistan
their second home,” Erdogan said.
New Europe |Page 31
27 May - 2 June, 2012
Montenegro, Azerbaijan
discuss co-operation
Azerbaijan’s President Ilham Aliyev, who was in Chicago for
a working visit, has met Prime Minister of Montenegro Igor
Luksic. They praised the development of the bilateral rela-
tions between Azerbaijan and Montenegro. They said the
strengthening of political relations was boosting the bilat-
eral cooperation in other areas, in particular in the economic
one. Aliyev and Luksic said there were good prospects for
cooperation in many fields, including energy, tourism and
transport infrastructure. They expressed confidence the
Azerbaijan-Montenegro relations would further expand.
FYROM disappointed over
delayed NATO invitation
Skopje is disappointed over the delayed invitation for
NATO membership, FYROM President Gjorge Ivanov
told the participants in the discussion held in the frames of
the NATO summit in Chicago, Vecer daily reported. He
claimed that Skopje has met all membership criteria and
“plays a non-proportional role in NATO peacekeeping op-
erations. This fact means membership”. In 2001, FUROM
was faced with a real challenge for Europe, but also for the
world. It managed to overcome a conflict through an agree-
ment that is a model for many generations, Television pro-
gramme Porta quoted former NATO chief George
Robertson as saying.
Chicago summit hails
Montenegro path to NATO
Following the first day of NATO Summit in Chicago,
heads of NATO member states and governments adopted
the declaration in which they unreservedly welcomed the
significant progress Montenegro has achieved in its NATO
bid. They in particular praised Montenegro’s track record in
pursuing important political, economic and defence re-
forms towards full NATO membership. “We welcome the
significant progress that Montenegro has made towards
NATO membership and its contribution to security in the
Western Balkans region and beyond, including through its
active role in regional cooperation activities and its partic-
ipation in ISAF. We also welcome the increasing public
support for NATO membership in Montenegro, and will
continue to assist this process. Montenegro’s active en-
gagement in the MAP process demonstrates firm com-
mitment to join the Alliance. Montenegro has successfully
implemented significant political, economic and defence
reforms, and we encourage it to continue on that path so it
can draw even closer to the Alliance. We will keep Mon-
tenegro’s progress towards membership under active re-
view,” the Declaration says. The Declaration also thanked
the four NATO aspiring countries (former Yugoslav Re-
public of Macedonia, Montenegro, Bosnia and Herzegov-
ina, and Georgia) for their commitment to global security
and contribution to NATO-led operations. NATO will
continue to encourage Euro-Atlantic integration of the
Western Balkans, the Declaration continues, stressing the
significance of regional cooperation in achieving lasting
peace and stability. “Together, Allies and partners of the re-
gion actively contribute to the maintenance of regional and
international peace, including through regional coopera-
tion formats,” the Declaration concluded. Montenegro’s
Prime Minister Igor Luksic voiced satisfaction with “the
message of strong encouragement” for Montenegro’s
NATO bid that was sent from the Chicago Summit,
adding that Montenegro needs to continue its efforts.
The Organization for Economic Cooperation & Develop-
ment (OECD), an international economic organization of
34 countries, projected that Turkey would grow 3.3% in 2012,
and 4.6% in 2013. According to economic outlook report of
OECD for the first quarter of 2012, the ratio of Turkey's cur-
rent account deficit to its gross domestic product would be
8.9% in 2012, and 8.4% in 2013.
The report projects Turkey's unemployment rate as
9.5% in 2012, and 9.1% in 2013. The report also said that
accelerating the structural reforms in production and
business market would help reducing and re-balancing
the pressure of inflation.
OECD sees Turkey's growth as 3.3% in 2012
On 21 May, Turkish Development
Minister Cevdet Yilmaz, addressing
the Turkey-Iran Joint Business Coun-
cil in Tehran, said that they recorded
progress on the way for a preferential
trade agreement between the two
countries. Within one year, the two
countries aimed to finalise this agree-
ment which was an important step for
free trade agreement, Anadolu Agency
quoted Yilmaz as saying.
Turkey showed a great performance
in economy as a result of sound macro-
economic policies supported by re-
forms that have been continued since
2002, he said. Yilmaz said the number
of Iranian companies established in
Turkey in 2011 increased remarkably.
Trade volume between Turkey and
Iran which was $2.3bn in 2003
reached $16bn in 2011, he said.
Yilmaz: Ankara, Tehran to finalise trade deal
Ankara, Karachi sign 9
co-operation agreements
Turkish Prime Minister Recep Tayyip Erdogan, left, and his Pakistani counterpart Yousuf Raza Gi-
lani at a joint press conference in Islamabad, Pakistan, 22 May 2012. |AFP PHOTO/AAMIRQURESHI
Page 32 |New Europe
27 May - 2 June, 2012
Six Moldovan water
utilities launch tender
On 23 May, the European Bank for Reconstruction and
Development (EBRD) said that six Moldovan water util-
ities have invited bids in a tender for vehicles supply in a
water system upgrade project co-financed by the bank.
The EBRD has extended a €10mn loan to support the
modernisation of Moldova's water system in six towns -
Floresti, Soroca, Hancesti, Orhei, Leova and Ceadar-
Lunga. The tender is divided into two lots - one for cars,
vans and pick-up trucks supply and the second one for
the supply of specialist vehicles, the EBRD said in a pro-
curement notice on its website. The bidding deadline is
0800 GMT on 12 July. The total cost of the upgrade proj-
ect is €30mn. It is co-financed by a €10mn grant from the
EU's Neighbourhood Investment Facility.
Belarus seeks investors to
construct hydropower plants
Belarus needs to attract foreign investors to the construc-
tion of hydropower plants, Belarusian Premier Mikhail
Myasnikovich told media as he visited the Grodno hy-
dropower plant on 23 May. “We are planning a hy-
dropower engineering development program, but here we
should look into financing resources. We should use a
modern scheme where investors build, use and then hand
it over to the state. It will considerably ease the burden on
a borrower,” the PM said. Now Belarus is in talks with
Turkish investors on the construction of two hydropower
plants. Analysing the construction of the Grodno hy-
dropower plant, Belarus Prime Minister Mikhail Myas-
nikovich stressed that the plant will be put into operation
in August. He added that the construction of the hy-
dropower plant is a promising project for Belarus. Despite
small capacities it is diversification of energy resources
and, hence, better energy security. The head of govern-
ment stated that the preliminary works for the NPP con-
struction are in full swing. According to Myasnikovich,
the project meets the schedule. During his working trip to
Grodno Oblast Mikhail Myasnikovich was updated on
the construction of the Grodno ring-road.
Delegation of Novosibirsk
Oblast to visit Belarus
On May 29-31, a delegation of Russia’s Novosibirsk
oblast, chaired by the Governor Vasiliy Yurchenko will
visit Belarus. The Russian delegation will meet with the
Government of the Republic of Belarus. The programme
includes visits to the Belarusian industrial enterprises,
among them Amkodor, MAZ, Minsk Wheel Tractor
Plant, Minsk Tractor Works. The delegation of the
Novosibirsk oblast is invited to visit the National Acad-
emy of Science of Belarus and the High Technologies
Park. The representatives of the Russian business circles,
making part of the delegation, will participate in a match-
making session with Belarusian enterprises, organized by
the Belarusian Chamber of Industry and Commerce. On
May 30, the Forum of Business Co-operation between
Belarus and Novosibirsk oblast will be organised under
the chairmanship of the Minister of Architecture and
Construction, Anatoliy Nichkasov, and the Governor of
the Novosibirsk oblasv Vasiliy Yurchenko. During these
events the sides will discuss the state of the bilateral trade
and economic co-operation, including the prospects of
the bilateral trade, contacts in the sphere of agriculture,
industrial co-operation, construction, the sphere of prac-
tical science.
The European Parliament has strongly
criticised the legal and humanitarian sit-
uation of the imprisoned former
Ukrainian prime minister Yulia Ty-
MEPs strongly protested against a re-
cent decision of the High Court of
Ukraine to postpone decision on Ty-
moshenko's appeal against her seven-
year prison sentence for a political
decision she made as the prime minister
of the country. European lawmakers
condemned delaying the legal proceed-
ings and deplored the use of force against
Tymoshenko by prison guards.
Parliamentarians demanded that doc-
tors must be allowed to treat Ty-
moshenko and insisted that the court
proceedings against her are supervised,
reminding of the agreement reached last
week in Brussels between the Parliament
President Martin Schulz and Prime
Minister Mykola Azarov. They urged
creation of an independent international
panel responsible for monitoring of and
reporting on possible violations of fun-
damental rights Tymoshenko's case, as
well as other opposition politicians.
"The democratic struggle for political
decisions must take place in parliament
-- and must not be destroyed by person-
ally or politically motivated acts of crim-
inal prosecution and manipulated
judgements in the criminal courts",
MEPs stressed.
Parliamentarians urged European
politicians who will not boycott Euro
2012 football matches in Ukraine in
June to visit political detainees in prison
and to attend in their private capacity.
With the co-operation agreement be-
tween the EU and Ukraine put on hold
and the next parliamentary elections in
Ukraine coming later this year, MEPs
pointed out that the current problems in
relations can only be solved if the
Ukrainian authorities show willingness
to carry out the necessary reforms.
At the moment, Tymoshenko has not
yet passed a blood test for deep diagnos-
ing. It remains unknown when Ty-
moshenko, residing now for the 16th day
in the Central Clinical Hospital of the
Ukrainian Railway under the supervi-
sion of Ukrainian and foreign doctors,
will hand over all necessary for any di-
agnosis and treatment of clinical tests. In
particular, on 23 May she was not ready
to talk to chief doctor Mikhail
On 23 May, Ukraine’s parliament, the
Verkhovna Rada, started again dis-
cussing release of Tymoshenko. The bill
establishing the potential for release of
convicted persons from punishment be-
cause of illness was included in the
agenda of Parliament. According to the
text of the document by a court convict
can be released from punishment if the
convict is seriously ill. At the same time,
the convict is sent to a medical facility in
Ukraine. However, the pro-government
parliamentary majority refuses to accept
the document again insisting that it is
not going to change the laws of Ukraine
for one individual.
Meanwhile, the Tymoshenko case
continues to undermine Kiev’s relations
with the West. After a frank appeal of
Western politicians to boycott the Euro
2012 in Ukraine and the cancellation of
the summit in Yalta, Ukrainian President
Viktor Yanukovuch received yet another
diplomatic slap in the face. At the
NATO Summit in Chicago on 22 May,
German Chancellor Angela Merkel re-
fused to talk with Yanukovych. Standing
on the sidelines, Yanukovych spoke with
several politicians, while Merkel was
close by. The German Chancellor passed
by without stopping to talk to him.
However,Yanukovych's adviser and head
of the Main Department of Interna-
tional Relations, Andrei Goncharuk,
commenting on the incident, said that
Yanukovych allegedly did not plan to
meet with Merkel. It is worth noting
that during the summit, Yanukovych
met only three presidents - Romania,
Poland and Afghanistan.
European Parliament slams
Ukraine over Tymoshenko
Belarus is set to expand co-operation with Cuba and Ecuador,
Belarus’ Foreign Ministry spokesman Andrei Savinykh told a
briefing on 24 May, BelTA reported.
On 23-30 May, a Belarusian delegation led by Deputy For-
eign Minister of Belarus Sergei Aleinik was expected to visit
Cuba and Ecuador. The delegation included representatives
of the Industry Ministry, Ministry of Architecture and Con-
struction, Ministry of Natural Resources and Environmental
Protection, Belneftekhim Concern and a number of Belaru-
sian companies.
The delegation was due to meet with representatives of the
Central Committee of the Communist Party of Cuba, the
Council of Ministers, Ministry of Foreign Affairs, Ministry
of Foreign Trade and Foreign Investment, Industry Ministry,
Ministry of Energy and Mines, Agriculture Ministry, Con-
struction Ministry, Transportation Ministry and Armed
Forces Ministry.
During a visit to Ecuador, Aleinik was expected to meet
with top officials of the Presidential Administration, repre-
sentatives of the Ministry of Foreign Affairs, Ministry of En-
ergy and Mining, Agriculture Ministry, Construction
Ministry, Transportation Ministry and Defence Ministry.
Minsk to deepen co-operation with Cuba, Ecuador
A supporter of former Ukrainian prime minister Yulia Tymoshenko holds a portrait of her
during a rally in the industrial Ukrainian city of Donetsk, 24 May 2012. Improved ties be-
tween the EU and Ukraine depend on the former Soviet nation reforming its justice system,
the EU said as European officials suggested an observer attend Tymoshenko's appeal trial.
New Europe | Page 33
27 May - 2 June, 2012
“No” to the dollar, “Yes” to the national
currencies. With such an appeal ad-
dressed to his colleagues a representative
of the Association of Regional Banks
"Russia" Alexander Murychev, speaking
recently on the Eurasian Business Con-
gress at the V Astana Economic Forum.
Other experts believe that in the era of
globalisation, the issue of creation of a
global supranational currency of a great
importance. Discussions on this topic
are in progress.
Entrepreneurs from different coun-
tries, which are gathered at the Eurasian
Business Congress, shared their vision of
international cooperation in the current
environment of open borders. The dis-
cussion on the future of the US dollar
was of great interest. "We strongly de-
cided to refuse the mediation of dollar
and create the conditions and incentives
to move to the payment in national cur-
rency," Murychev said. He added that
today the Russian bankers and his col-
leagues in the Customs Union intend to
coordinate efforts in terms of exchang-
ing the experiences on convertibility of
national currencies. It will be recalled
that US dollar is still used as a third cur-
rency when doing mutual payments.
This topic was further discussed at a
press conference during the Astana
Economic Forum, which was attended
by leading international scientists.
Thus, the deputy chairman of the co-
ordinating council of the Eurasian Eco-
nomic Club of Scientists, Barbaner
Hanon, said that today it is very impor-
tant to establish a supranational world
currency. According to him, this idea is
stimulated by the effects of the globali-
sation, when crisis in one country in-
evitably affects the other country.
"In 2006 I introduced the term world
polysystemic crisis. At that time it
seemed that this term is a kind of purely
scientific formulation. The past years
have shown that the world is really en-
tering a period of world polysystemic
crisis," said the scientist. He believes that
many countries should put collective ef-
forts. "In these circumstances the idea of
G-global seems to me one of the most
breakthrough ideas. When we say that
we have structures such as the G-8 or
G-20, in fact it is a club of the privileged.
A global polysystemic crisis dictates a
mass participation of the majority of the
world. And in this sense, the idea of the
G-global of current concern, said the
According to him, it is necessary to
form such structures as G-global so that
countries could successfully emerge
from a continuous crisis. "And they can
be formed only on the basis of interna-
tional integration," Barbaner concluded.
Russian bankers, Customs
Union to coordinate currencies
On 23 May,Turkmenistan signed ground-breaking agreements
to supply natural gas to Pakistan and India,moving a step closer
to building a US-backed pipeline running across Afghanistan.
Turkmen state gas company Turkmengaz signed gas sales and
purchase agreements with Pakistan’s Inter State Gas Systems
and Indian state-run utility GAIL.“The implementation of this
project will give a powerful impetus to the social and economic
development of all the participant countries,”Turkmenistan’s
Deputy Prime Minister Baimurad Hojamukhamedov said be-
fore the signing ceremony held in the resort area of Avaza on the
Caspian Sea. Under the agreements, Turkmenistan, with the
world's fourth largest natural gas reserves,will supply 90mn cubic
metres of natural gas a day through the proposed TAPI (Turk-
menistan-Afghanistan-Pakistan-India) natural gas pipeline,
which is backed by the Asian Development Bank (ADB).
The bulk of the exported natural gas will help meet growing
energy demands in India and Pakistan, where energy needs are
likely to double by 2030. The remainder of the gas will go to
Afghanistan to help alleviate chronic power shortages in the
war-ravaged nation.
The idea for an 1,800-kilometre pipeline connecting the four
nations was first put forward in the early 1990s, but civil war in
Afghanistan prevented its realisation.The project is expected to
be completed within five years, at an estimated cost of $7.6bn.
India's Oil Minister S. Jaipal Reddy said that his fast-grow-
ing nation was waiting impatiently for the pipeline to be ready,
noting that India's energy demands would quadruple by 2017.
Afghanistan's Mining Minister Wahidullah Shahrani said
that the project will "spread peace and help our region flourish."
Turkmenistan is also being courted by the West and China for
its immense gas reserves.The country is also keen on diversify-
ing its export routes which remain dependent on its former So-
viet master Russia with whom it has had occasionally prickly
relations.It has already begun exporting gas to China through a
pipeline that was opened by China's President Hu Jintao in De-
cember 2009.
Ashgabat inks trans-Afghan gas pipeline deal
World Bank concerned with
studies of Rogun project
On 23 May,World Bank Vice President for Europe and Cen-
tral Asia, Philippe Le Houérou, completed a visit to Tajikistan
after meeting with President Emomali Rahmon and discussing
development projects financed by the World Bank.Le Houérou
noted the critical importance of Tajikistan's energy sector and the
country's vast water resources."Over the years,the World Bank's
engagement in the energy sector has been supporting the Gov-
ernment of Tajikistan's efforts to ensure reliable electricity to
consumers,deal with severe winter energy shortages,reduce elec-
tricity system losses, and strengthen the financial management
of the energy sector. In addition, the Bank is undertaking a
power supply options study to assess the alternative energy
sources available to Tajikistan," the World Bank said in the re-
lease. In response to a request by the Government of Tajikistan,
the World Bank has also provided financing for two studies to
evaluate the viability of the proposed Rogun Hydropower Proj-
ect (HPP) according to international standards - the Techno-
Economic Assessment Study and the Environmental and Social
Impact Assessment. As agreed with the government, the two
international Panels of Experts will participate in the studies and
provide independent advice and recommendations."In meetings
with the President and senior Government officials of Tajik-
istan, the World Bank discussed the status of the Rogun HPP
assessment studies. During these meetings, the Bank reiterated
its concerns related to the process and methodology of the as-
sessment studies," the World Bank said.
Tajikistan faces low
growth in housing
Tajikistan and Kyrgyzstan witness the lowest growth in hous-
ing, while in Kazakhstan this rate is highest in the Common-
wealth of Independent States (CIS).Kyrgyzstan is experiencing
the lowest growth in construction. Referring to the website of
the Interstate Statistical Committee of the CIS, CA-NEWS
has announced that in the first quarter, the country introduced
149,500 square metres of housing.Low rates were also reported
Tajikistan, where in the 1st quarter a little over 80,000 square
metres of housing was introduced. By contrast, Kazakhstan is
showing the best results in the CIS. During three months, the
country built about 2mn square metres of housing.
Kashagan’s foreign partners
reach deal with government
On 23 May,an agreement on settlement of certain questions of
the North-Caspian project was signed between Kazakhstan’s
government and the contracting companies of the North-
Caspian project (KMG Kashagan B.V,Agip Caspian Sea B.V,
Exxon Mobil Kazakhstan inc.,Shell Kazakhstan Development
B.V and Total E&P Kazakhstan - 16.81%, Conocophillips
North Caspian Ltd.- 8.4% and Inpex North Caspian Sea Ltd.,
- 7.56%). In accordance with the reached agreements, the Par-
ties approve an Amendment to the Plan and Budget of De-
velopment of Kashagan, allowing to reach Kashagan
commercial production during the period from December
2012 till June 2013.To provide further mutually beneficial co-
operation between the parties in implementation of the North-
Caspian project within the framework of the Settlement
Agreement, the parties agreed: to fund a share of investments
of NC KazMunayGas JSC in the project at the expense of the
Consortium for the period of 2012-2013; to sign a long-term
contract of purchase and sale of Kashagan gas of Phase 1 be-
tween KazTransGas JSC and Contractor companies, which
provides delivery of up to 83% of this volume of gas to the do-
mestic market by 2041; not to recover a certain part of expenses,
made by the Contractor, a press release read.
Foreign currency rates against the Belarus ruble in Minsk, Belarus, 20 October 2011. Russian bankers and his colleagues in the Customs Union intend to coordinate
efforts in terms of exchanging the experiences on convertibility of national currencies. |EPA/TATYANAZENKOVICH
By Kulpash Konyrova
Bishkek, NATO sign
land transit agreement
Page 34| New Europe
27 May - 2 June, 2012
On 22 May, Kyrgyzstan and NATO
have signed an agreement on the tran-
sit of cargo by land through Kyrgyzstan
for the NATO-led International Secu-
rity Assistance Force in Afghanistan,
the Foreign Ministry said Wednesday.
The agreement was signed at the
NATO summit in Chicago, the For-
eign Ministry's press service said.
The ministry believes that the accord
"is important for the further develop-
ment of bilateral co-operation between
Kyrgyzstan and NATO in the interests
of stabilising the situation in
Afghanistan and ensuring security in
Kyrgyzstan and the Central Asian re-
gion," it said.
At the signing ceremony, NATO
Deputy Secretary General Alexander
Vershbow thanked Kyrgyzstan for the
support, saying the agreement was an
important contribution to stabilising
the situation in Afghanistan.
Kyrgyz Foreign Minister Ruslan
Kazakbaev said his country will con-
tinue to assist the international com-
munity, including NATO, in security,
peace, stability and further economic
and social development of Afghanistan.
The Manas Military Base near
Bishkek, set up by the United States in
2001, is the main transit hub for
NATO forces in Afghanistan.
Kyrgyz President Almazbek Atam-
bayev announced plans in November
last year to shut the base down by 2014,
when the NATO-led International Se-
curity Assistance Force are due to end
combat in Afghanistan.
Water supply networks
need reconstruction
In Kyrgyzstan,70% of water supply networks are fully de-
teriorated, the spokesperson’s office for the State Agency
for Construction and Regional Development of Kyrgyzs-
tan said, local press reported. Reportedly, 23m soms are
needed for their reconstruction. “Taking into account the
seriousness of the problem it is necessary to take urgent
measures to provide the rural population with drinking
water.In 2002 Kyrgyzstan signed the loan agreement with
the Asian Development Bank and World Bank at $69.5m
for construction, reconstruction and rehabilitation of rural
water supply system,”the spokesperson said.At present the
implementation of the second phase of projects worth
$40m,including $30m- ADB grant,$10m - World Bank
grant keeps on going.“For this money it is planned to build
water supply system in 148 villages,where 281.5 thousand
people live,”the Spokesperson added.
Investors of all free
economic zones unite
A new organisation will unite the companies working in
Bishkek Free Economic Zone and Free Economic Zone
of Kyrgyzstan for collective defence of interests and co-
operation with foreign investors, local press reported. “In
Kyrgyzstan, free economic zones investors are created a
great deal of administrative and other obstacles for pro-
duction development.This slows down the process of de-
cision making on new investment projects and leads to
drain and freezing of enterprises’ assets, discredits the in-
vestment attractiveness of free economic zones in Kyr-
gyzstan,”the message of Bishkek Business Club read.
AIOC cuts daily oil
production by 0.8%
In the first quarter of 2012 the BP–led consortium Azer-
baijan International Operation Company (AIOC) de-
creased oil production from contract field block
Azeri-Chirag-Gunashli in the Azerbaijani sector of the
Caspian Sea by 0.8% compared to the 2011 average level.
BP Azerbaijan said over the past quarter of 2012 the
block produced on average 711,800 barrels per day
against 717,600 barrels per day on average for 2011. For
the 1st half of 2011 it was produced 775,700 barrels per
day and 823,100 barrels per day in 2010. As a result it
was produced 8.8m tonnes of oil for the 1st quarter of
2012 (64.8m barrels) against 35.4m tonnes of oil
(261.9m barrels) for 2011 and 300.4m barrels (40.6m
tonnes) for 2010. In 2009 daily output at the block made
817,000 barrels on average which enabled to produce
40.3m tons (298m barrels).
BP planned investments
remain on schedule
BP and the partners stick to 49% increase of investments
for 2012 in all oil and gas and pipeline projects imple-
mented in Azerbaijan: in the first quarter their capital in-
vestments made 20,4% of the plan for the year and
operational expenditures- 27,3%. BP Azerbaijan reports
that in the first quarter summary expenditures of the
partners for projects in the country made $1.05bn. Cap-
ital expenditures on all implemented projects for 2012
reached $800,1mn with plan for $3.926bn and opera-
tional expenditures- $250.6mn with plan for $919.5mn,"
the report read.
An Azerbaijani delegation of officials
and businessmen took part in a wine fes-
tival in the French city of Auxerre on 18-
21 May, the Ministry of Economic
Development of Azerbaijan said on 23
May, Trend reported. At the site, Azeri
wines were exposed and opportunity was
provided to get acquainted with the cui-
sine and music of the country.
As part of the visit the delegation of
Azerbaijan visited the vineyards and
wine production facilities. During the
visit, the Azerbaijani cities of Ganja,
Shamkir, Goygol and Balaken and the
Supreme Council of the Joigny com-
munity of Burgundy signed a memo-
randum of understanding. The
organisers of the visit were the Azer-
baijani Embassy in France and the
Azerbaijan Export and Investment
Promotion Foundation.
Azeri, French cities sign memoranda of understanding
On 21 May, Uzbekistan Foreign Minister Abdulaziz
Kamilov addressed the Afghan problem at the Meeting of
the NATO Summit on Afghanistan.
Kamilov said the establishment of the Contact Group
under auspices of the United Nations with participation
of the neighbouring countries, as well as the United States,
NATO and Russia that have an immediate relation to re-
solving the Afghan problem could become the most ac-
ceptable thing in terms of organising and coordinating this
He said Uzbekistan was one of the first to allocate its
territory and infrastructure to ensure deliveries of human-
itarian and non-lethal goods into Afghanistan by opening
up the Khairaton Bridge over the Amudarya River which
is practically the only railroad link which connects
Afghanistan with external world. “The tens of motorway
bridges and automobile roads have been built in the terri-
tory of Afghanistan. At the moment, Kabul is provided
with electricity along the electricity power line Khairaton
-Puli-Humri - Kabul. Afghanistan has joined Uzbekistan's
fiber-optical communication line,” Kamilov said.
“Since 2011 the railroad route Khairaton - Mazari-Sha-
reef, built by the Uzbek specialists, has been functioning
which acquires a special significance for the future of this
region. The continuation of construction of the section
Mazari-Shareef - Shibergan shall pave way for imple-
menting the Trans-Afghan transport corridor project
which will ensure the shortest route for the transit of goods
from Central Asia to seaports,” Kamilov said.
“Starting from February 2002 a trans-shipment station
based on the Termez Airport has been operating in the
territory of Uzbekistan which is actively utilised by the
Federative Republic of Germany and several other NATO
participating countries to support the ISAF mission,” he
“Today Uzbekistan is a key link in the Northern Distri-
bution Network, the transport and communication corri-
dor, which connects the harbours of the Baltic and Black
Seas with Afghanistan and fulfils the crucially important
role to support the ISAF contingent. Since the time when
the Northern Distribution Network began to operate,
more than 27,000 railcars of non-lethal goods in the
amount of about 400,000 tonnes have been transported
through the territory of Uzbekistan,” Kamilov concluded.
Tashkent to help resolve situation in Afghanistan
US mechanics inspect military planes in the US Centre of Transit Shipments for support the anti-ter-
rorist operation in Afghanistan at the Manas airport outside Bishkek, Kyrgyzstan.|EPA/YURI KOCHETKOV
New Europe |Page 35
27 May - 2 June, 2012
On 21 May, Russian President
Vladimir Putin named a new Cabi-
net, keeping several key ministers, in-
cluding finance, foreign and defence,
at their posts, but also replacing the
most unpopular ones.
The new Cabinet led by Prime
Minister Dmitry Medvedev should
continue the course set in previous
years, Putin said, who recently again
swapped seats with Medvedev in
Russia’s powerful tandem. "The situ-
ation in the global economy is un-
clear, there are quite a lot of factors
that make it opaque," Putin, who
was inaugurated on 7 May, said in
televised remarks to the new Cabi-
net. "You will have to fulfil a pro-
gramme of Russia's development in
these conditions."
Putin, 59, extended his influence
over economic policy by keeping close
ally Igor Shuvalov as first deputy
prime minister in charge of finance
while handing the vital industry sec-
tor to Medvedev's former adviser and
privatisation-proponent Arkady
Dvorkovich. Finance Minister Igor
Siluanov also remains at his post.
“This is the Cabinet of compromise
between Putin and Medvedev. Be-
cause you have number of people like
Shuvalov and Siluanov coming from
the former Cabinet,” Natalya Orlova,
chief economist at Russia's Alfa Bank,
told New Europe on 21 May. “This is
rather a Cabinet focused on stability
as supposed to a Cabinet focused on
reforms, not necessarily because of
general power in Russia but also be-
cause the global environment defi-
nitely favours a rather cautious
Senior Cabinet veteran Andrei Be-
lousov was named the new economic
development minister. Vladislav
Surkov, the architect of Putin's do-
mestic policies who was transferred to
the Cabinet last fall, also has retained
a seat of deputy prime minister.
The point is whether the new
Cabinet will be able to deliver mar-
ket-focus reforms. “Now with the
resignation of [Elvira] Nabiullina
and nomination of Andrei Belousov
as Minister of Economic Develop-
ment my sense is the development of
privatisation programme is an issue
because Belousov in my view has
much better experience working on
state investments projects rather
than working with financial markets.
In a way I would not be surprised if
the privatisation agenda will maybe
taken by Dvorkovich and will con-
tinue to be developed by Dvorkovich
as supposed to the Minister of Eco-
nomic Development. But this is a
grey area at the moment,” Orlova
told New Europe.
Dvorkovich, who at the beginning
of 2000 used to be deputy minister of
economy, has very good experience
working in the Cabinet in different
positions, is a well known economist
and always maintained communica-
tion with financial market, she said.
“He is the person who is probably in
the best position to continue this pri-
vatisation agenda and offer this de-
velopment of Russia as the world
financial centre,” Orlova said.
Putin also reappointed the long-
serving Foreign Minister Sergei
Lavrov and Defence Minister Ana-
toly Serdyukov.
Russia's current energy czar Igor
Sechin -- viewed as one of Putin's
most powerful and trusted allies --
left Medvedev's Cabinet. However,
Sechin was still expected to keep
broad influence over industry and fu-
ture oil and gas deals. He was recently
nominated to the board of the state
oil firm's natural gas unit and has
been mentioned for a post as a possi-
ble Putin adviser in the Kremlin to
orchestrate industrial issues. Sechin
and Dvorkovich have clashed previ-
ously over the pace at which Krem-
lin-controlled banks and industries
should be sold off to private investors
in a bid to stimulate Russia's stalling
Meanwhile, some of the most un-
popular ministers, including those
who were in charge of the health,
education, and interior affairs, have
left the Cabinet. Interior Minister
Rashid Nurgaliyev has been re-
placed by Moscow police chief
Vladimir Kolokoltsev. Health and
Social Development Minister
Tatyana Golikova has been replaced
by her deputy, Veronika Skvortsova.
The highly unpopular former Edu-
cation Minister Anatoly Fursenko
was succeeded by Dmitry Livanov,
the rector of the Moscow Steel Uni-
Following the wave of large
protests, the reshuffling in the interior
ministry and health and social min-
istry suggests that the focus will also
be on healthcare, social affairs and se-
curity and that Russia’s president and
premier wish better communication
in this area. “I believe these new nom-
inations in two areas reflect the will-
ingness to have better communication
with society on this and in a way bet-
ter way to address the issues,” Orlova
Russia's President Vladimir Putin, centre, meets the new Cabinet in the Kremlin in Moscow, 21 May 2012. |AFP PHOTO/RIA-NOVOSTI/POOL
Tbilisi devotes 3mn
lari to flood relief fund
Three million lari has been transferred to the reserve fund of
the Tbilisi Mayor’s Office to assist those families affected by the
recent flooding, the Messenger reported. As members of city
council explained on 16 May, this money will be cut from the
New Life of Old Tbilisi rehabilitation project.The new amend-
ment to the capital’s budget became the subject of debates at a
session on 16 May.Republican Party member Tina Khidasheli
demanded copies of documentation of how this money would
be used. Stressing that government officials should have made
relevant preparation against the recent rain,Khidasheli doubted
the efficacy of tenders the Mayor’s Office had announced for the
water drainage system in previous years.Calling it a “force major”
situation,United National Movement members explained that
it is not time to talk about documentation when hundreds of
families are waiting for their help and when even one hour can
be decisive.Although the final financial tally of damage from the
recent floods has yet to be determined,council estimates that it
may exceed 3m lari. Finance-Budget Commission Chair
Tamaz Shoshiashvili said the council has a complete list of ap-
proximately 400 families affected by the flood, and promised
that each family will receive corresponding aid. Christian-De-
mocratic Movement member Zaza Gabunia suggested giving
financial compensation to the families together with everyday
goods. Gabunia also stressed the need for prevention mecha-
nisms against natural disasters so that people could feel com-
pletely safe in their homes.
Yerevan-Tbilisi train
passenger number steady
According to recent statistics, Yerevan-Tbilisi-Yerevan train
transported 6,400 passengers in January-April 2012. The
volume of passenger traffic over the same period 2011 re-
mained the same. The number of passengers South Cauca-
sus Railways (SCR) CJSC serviced in January-April 2012
totalled 144,400. SCR CJSC adheres to its policy of gradu-
ally boosting passenger service quality, the level of comfort in
trains of local and international communication. Accord-
ingly, the railway upgrades the rolling stock, expands the list
of services and increases train speed.
Yerevan to support
stability in Afghanistan
On May 21 in Chicago a meeting at the level of Foreign
Ministers dedicated to the Security Assistance Force in
Afghanistan headed by the Minister of Foreign Affairs Ed-
ward Nalbandian. Delivering a speech at the Ministerial
meeting, the Armenian Minister of Foreign Affairs reaf-
firmed Armenia’s commitment to continue to support the
efforts undertaken towards the establishment of peace, secu-
rity, stability and national solidarity in Afghanistan. “Security
and positive shifts are obvious, surely more efforts are needed
to make this process irreversible. Unfortunately, we witness
every day that smooth transition period is not an easy task,”
Nalbandyan said. “Destructive forces of peace and stability
hinder to the establishment of the security in Afghanistan. It
is important to ensure the process of positive change in
Afghanistan; to prevent those destructive forces of terror that
ravage not only their own soil but at times spread far away as
mercenaries , in order the whole region will become a posi-
tive driving force and make use of its natural riches for the
benefit of the Afghan people, the development of the coun-
try and region." Nalbandian underscored that Armenia
would continue to contribute to the establishment, mainte-
nance and strengthening of peace, security and stability in
Afghanistan as up to the withdrawal of the international se-
curity assistance forces in 2014, as well as afterwards.
Putin and Medvedev’s
Cabinet of compromise
By Kostis Geropoulos
AS the PES gathered for a pre-summit meet-
ing where were the Brits? We hear Ed
Miliband had a scheduling conflict, the term
for 'can't be bothered'
Page 36 | New Europe
27 May - 2 June, 2012
Once Upon A Time in Brussels ...
Follow me on twitter @Kassandra_NE
Warlick recalled
The American ambassador to Bulgaria, James Warlick has been recalled and will leave
Sofia before the end of his three-year mandate. However, Washington did not state
the reasons behind this decision.
Warlick’s place will be occupied by Marcie Ries, former U.S. ambassador to Albania and
Deputy Political Counsellor in U.S. Mission to the European Union in Brussels. Ries
has 31 years of diplomatic experience in Europe, the Caribbean and the Middle East.
She was also counsellor at the U.S. Embassy in London, participant in missions to Wash-
ington in Turkey and the Dominican Republic. At the time of her appointment, she
was assistant secretary for nuclear and strategic policy in the State Department.
James Warlick was appointed ambassador to Bulgaria in 2010 and the first rumours
of his premature departure appeared in April. New Europe first reported on 8 April
that the FBI was carrying out investigations in the American Embassies in Belgrade
and Sofia, despite having no authority outside the US and named this as the main rea-
son for Warlick’s expected stepping down.
Later, on 10 April, Warlick posted on Twitter: “New Europe news report saying I
have been recalled isn't true. But my time in Bulgaria is passing too quickly”, thus im-
plying that he is due to leave Sofia sooner, rather than later.
On 20 April, the now former ambassador quoted the famous writer Mark Twain in
an interview for the Bulgarian bTV and stated ‘the reports of my death have been
greatly exaggerated’. In this way, he obviously tried to persuade the public that ru-
mours around his leave were ‘speculation’ and untrue.
The reasons behind this decision are still unclear, but the main motive for Warlick to
be recalled is considered to be his failure to defend American interests in relation to
shale gas exploration in Bulgaria. The former ambassador denied this to be the main
reason behind his stepping down, but also refrained from comments.
This week’s EU summit in Brussels was
not less, not more than a big nothing.
Germany rejected the French Eurobond
proposal, The UK blocked the financial
transaction tax.
In the same context, all leaders decided to
wait for the Greeks (10 million people at
the end of the half-a-billion people em-
pire) to vote on June 17, to find out what
the future of the common European cur-
rency will be. As if in the United States
there would be waiting for the election re-
sult of Delaware to shape the future of the
US dollar.
Mean while, nobody speaks that while
Europe has a common currency (thanks
to the British who are not part of the
Euro) it does not have (a) a common fis-
cal policy, (b) a central controlling au-
thority of European stock markets, and
(c) a common scheme for deposits guar-
At the same time, the sailing team of the
EU institutions is preparing a cruise in
the Aegean so to enjoy the Greek catas-
trophe from their yachts with fresh fish,
spaghetti with lobster and retsina (light).
Brussels Eurocrats and MEPS are finding
innovative ways of coping with the
stresses and strains of austerity. With
their own yacht club, the Sailing Club of
the EU Institutions.
The Eurocrats not only enjoy the club for
a mere €40 a year, and you can add your
favourite intern for just €10 (wink wink),
allowing even the most impoverished of
functionaries to dream of clear blue water,
but also have yachts provided for them.
“Membership is open to any official or
agent working at the European Institu-
tions as well as to their family members
or friends.”
But, when the world’s oceans are your
playground, where to go?
The Greek islands. From 7 – 14 July, 25
August to 8 September, the cosseted eu-
rocrats will be having the time of their
lives sailing round the Greek islands. The
Greeks will, of course, be having consid-
erably less fun.
Holding subsidized luxury holidays for
officials while Greece burns… Dare we
call it insensitive?
When Nassim Taleb wrote his best seller “The
Black Swan,” he tried to describe outliers, that
is: very rare and highly improbable events, that
carry extreme impact on the social, political, or
financial system. What we see nowadays is that
those black swans are not as rare as Taleb
thought and, over the last three years, they tend
to happen more and more often, to the point
that we have become accustomed to them, es-
pecially in the financial sphere.The last “bird”of
this sort carries the name JP Morgan Chase–
the largest financial firm in the United States.
Without getting into too much detail, in
2011, the bank made profit by betting that
credit conditions would worsen; in early 2012,
London traders of JP Morgan changed their
view and took opposite positions. As a result,
the bank now has a losing portfolio of long and
short positions with a face value of roughly
$100 billion in a derivative index tracking the
health of corporate debt, the Markit CDX
North America Investment Grade Index.
Things got more complicated by the fact that
JP Morgan itself controls a large part of the
trading in this index; thus, unwinding its own
positions might influence the index negatively,
and further hurting its own results. So far, the
estimated loss is between $2 and $5 billion, but
none can exclude it might shoot higher. Total
loss in stockholder value is over $30 billion, and
To make the story more exciting, one must
note that JP Morgan’s Chairman and CEO
James Dimon was considered as the best risk
manager of the banking industry; that the trade
was approved by him personally, although he
was not aware of its execution details; and, fi-
nally, the position was handled by a London
trader nick-named as “the whale” due to the
size of his trades. And of course, all this hap-
pened under the wise supervision of roughly 70
(yes, seventy) people assigned by the relevant
market watchdog, the Office of the Comptrol-
ler of the Currency, which proudly carries the
logo “Ensuing a Sound National Banking Sys-
tem for all Americans.”
Now, on the serious side, all this debacle
raises two important remarks.
First, JP Morgan is not exactly a bank, but
the result of the merger of four large financial
institutions, namely: JP Morgan, Chase Man-
hattan, Manufacturers Hanover, and Chemical
Bank. Those institutions were large enough in
their own right to carry significant risk by their
operation as separate entities; their combina-
tion has created a monstrous structure that is
not only too-large-to-fail, but also too-com-
plex-to manage. It seems that the message of
the 2008 crisis didn’t get through, and financial
institutions kept growing, both in terms of as-
sets and of trading books.
Then, comes (again) the question of financial
modelling and its use and abuse by the finan-
cial industry in evaluating risks. Most banks use
the now famous VaR or Value-at-Risk model
as their main tool for evaluating the total risk of
their portfolios. The objective is to have a sin-
gle metric capable of capturing all the risks of a
portfolio, after netting the long and short posi-
tions. The problem is that this metric system-
atically underestimates the total risk.
The funny thing is that the VaR model was
largely developed and promoted by JP Morgan
itself. And the troubling point is that the
model’s flaws have been widely known for a
long time, to the point that a US House of
Representatives’ “Subcommittee on Investiga-
tions and Oversight” was convened on Sep-
tember 10, 2009, a year after the crash, to
examine “Risk models and specifically a
method of risk measurement known as Value-
at-Risk... [an important factor to] risk-taking
that has led to a global recession with trillions
of dollars in direct and indirect costs imposed
on US taxpayers and working families.”
Three years later, the case of JP Morgan
shows that the lessons from the 2008 crisis have
not been learnt, and the taxpayers and working
families will be called again to pay the bill,
through the massive transfer of income that
constitutes the zero percent lending policy of
the Fed to the banks.
Christos Kissas, PhD is a Financial Economist
People walk past the JP Morgan Chase Building on Park Avenue, 15 May 15 in New York. The US Jus-
tice Department has opened an investigation into JPMorgan Chase's more than $2 billion trading loss
that the Wall Street bank announced last week. |AFP PHOTO TIMOTHY A. CLARY
By Christos Kissas
The JP Morgan debacle
-guess who’ll pay the bill

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