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28 April - 5 May, 2013
Since the global economic downturn began in 2008, debate has cantered on the macroeconomic strategies and instruments used to address the crisis and foster recovery. Page 15 But correcting imbalances and addressing short-term slowdowns or recessions, while important, should not be allowed to overshadow the need to establish long-term conditions for solid and sustainable economic growth. So far, macroeconomic policy has borne both the blame for economic malaise and the hope that it can be overcome.
The competition factor
A conversation with Toto in Mergellina
Toto' believes what he hears on TV but cannot understand why in today's social Europe bank deposits are guaranteed instead of pensions.
Prague catching up to EU changes
TELECOMS Page 09
Alarmed Barroso signals policy change as elections loom
Austerity or Union?
uropean leaders are responding to negative trends in public perceptions of the EU by demanding that unpopular austeritydriven policies will be abolished. As European citizens react within increasing antagonism towards the EU, leaders are backtracking on unpopular policies, arguing that the worst of the financial crisis is over and that the Europe will lead the way in the next phase of economic recovery. Speaking on 23 April in Brussels, European Commission President Jose Manuel Barroso, warned that unpopular austerity policies have eroded the trust of EU citizens in the workings of the European project. He said that there exists a widening gulf between the EU and its citizens, leading to what he called “a European fatigue.” He said that the rise in nationalist and populist parties is undermining the European project, and added that complacency “European unity cannot be taken for granted. European unity, democracy and respect for human dignity have to be fought for every day,” he said. “Today the resurgence of populism and nationalism threatens to destroy the dream made real. And, let us be clear, the indifference of many pro-Europeans is also a risk. Solidarity, social cohesion and the social market economy lie at the very heart of the European consensus. They must be defended and preserved.”
Pages 2,3,6,7, 8
Europe needs a big bang auction of 4G licenses
UNITED KINGDOM Page 08
Tories and Ukip face-off in election fight
EU-CHINA Page 14
A demonstrator burns a European Union flag outside the parliament in the Nicosia, on 4 April. The question is, how much longer can citizens anger continue before a backlash? |AFP PHOTO / YIANNIS KOURTOGLOU
Building trust in the future
His comments come as both he and EU Commissioner for Economic and Monetary Affairs, Olli Rehn have hinted that the long-proposed policy of centrally-driven austerity policies may be coming to an end. A poll published by Eurobarometer on 25 April indicated that six of the Union’s largest member states, France, Germany, Italy, Poland, Spain and the United Kingdom, are becoming increasingly antagonistic towards the EU, and both Barroso and Rehn, fearful of a backlash against Brussels in next year’s European Parliament elections, are playing-up the concept of recovery. Last week, speaking ahead of
both a crucial International Monetary Fund (IMF) meeting, as well as a gathering by the G20, Rehn, bowing to international pressure, said that the EU is now in a position to loosen its austerity-drive, claiming that the worst of the crisis is over. However, in his newly-instigated blog on 26 April, Rehn was careful to hedge his bets. He said that there was no fundamental shift in policy, the commission’s aim had been, all along, to work towards sustainable growth. In May 2014, there are elections to the European Parliament, as well as a changing of the current college of commissioners. There are some nervous people out there.
28 April - 5 May, 2013
More than a feeling
Ukip are talking a good game; the Eurosceptic party are in a buoyant mood. Next month’s local elections in the UK will be the first step on an all-conquering path that will lead to the palace of Westminster and the complete withdrawal of the United Kingdom from the European Union. The party’s confidence is certainly on the up, fuelled by increasingly positive poll results and media attention that has seen Ukip go from sideshow to serious, the party’s assault on the political scene is being taken a lot more earnestly these days by punters and politicians alike. Certainly they are talking a good game, with the Ukip leader, Nigel Farage, current enfant terrible MEP, predicting major gains at the expense of each of the main political parties, not just the Conservatives, their traditional enemy on the right. Europe in particular is the battleground there, unsurprisingly. In preparation for its all-conquering performance, the party is fielding its largest number of candidates (1,734), failing not too short of coalition partners, the Liberal Democrats. Current support for the party is around 12%. Some predictions are that they will score around 15% of the vote in May. Europe is never too far from the surface, and while the elections are for local authorities, Ukip are still very much dealing on their main stock-in-trade, the European Union. There is an increasingly bitter attitude towards the EU form citizens, not just in the UK, where antagonism towards the Union has traditionally been higher than in most places. In an effort to capitalise on the demise of the far-right British National Party, the party has increased its rhetoric on immigration, even winning the public support of the anti-Islam English Defence League, which Ukip has sensibly rejected. The rise of Ukip is illustrative of apathy towards Europe turning to active displeasure. The party look set to score highly in next year’s European Parliament elections, repeating, or possibly bettering, their 2009 showing, where they beat out Labour to be the country’s second-biggest party in Brussels (since then they have lost a few, however). European Commission President, Jose Manuel Barroso has acknowledged this, warning that a find of EU fatigue has set-in. The rise of nationalist parties and populist parties in the likes of Greece, Finland, Hungary and elsewhere, he says, remains the greatest threat to what he calls “the dream.” Belatedly, along with Economic and Monetary Affairs Commissioner Olli Rehn, Barroso has said that the Union should ease-up on austerity; that more emphasis should be given to growth. It may or may not be enough to ease tensions. Furthermore, a recent poll has shown that mistrust of the EUis growing in its five largest member states. In the UK, for example, mistrust stands at around 69%, up from an already-large 49% in 2007. In Spain, it is 72%, up from 23%. As a party, Ukip has been accused of lacking round-the-board policies, obsessing over Europe. That may be so, but there is a feeling now that is turning their way. But just having a feeling about something is not a political manifesto – much in the same way a dream does not constitute a tangible political success – but as Europe becomes more complex, citizens become distanced, and logic becomes emotion. It is not the way to conduct discourse. But, for the time being at least, Europe is on notice.
The Shooting Gallery
Sir, there’s a student on the line about the Reinhart Rogoff spreadsheet you’ve been using...
AFP PHOTO / PETER MUHLY
cyan mage yello black
11th Year, Number 522 www.new-europe.info May 25 - 31, 2003
THE EUROPEAN WEEKLY
Europe targets energy
A key project for delivering Caspian oil to western markets will be the focus of a conference in Brussels this week paving the way for Europe's security of energy supply. The conference Odessa-BrodyPlock Oil Transportation Project: Enhancing EU Energy Security and Integrity on May 27 aims to support the OdessaBrody oil pipeline extension from Ukraine to Plock-Gdansk in Poland. Ambassador Marek Grela, head of the mission of Poland to the EU, stressed that the pipeline "should be a commercially and privately-financed undertaking. We should have an in-depth feasibility study on the economic profitability of this pipeline." The first part of the conference will consist of a policy session outlining the political will for this extension by Ukrainian Vice Premier Vitaly Haiduk, Polish Deputy Prime Minister Marek Pol and EU Commissioner for Transport and Energy Loyola De Palacio. The second part will consist of a round table dialogue involving industrial and financial actors from key countries of the EU and Central and Eastern Europe. (p. 35)
US invites Europe to Iraq
UN given political role in post-war Iraq
UN’s Security Council takes a vote
New Europe bylines Athanassios Papandropoulos
on Is deflation the absolute evil?, p. 2
RS A E Y 0 1 ne AGO
The US took a step towards reconciliation with Europe by offering the UN a role in Iraq and in return the world body halted sanctions, a move that led to the German ambassador saying that Iraqis now have the opportunity to live at peace with themselves, their neighbours and the world. There was talk of a Ukraine - Poland pipeline and feasibility studies in this brief bout of optimism. Greece was using the forthcoming Olympics and Spanish footballers were considering a strike over unpaid wages, caused by an earlier financial crisis.
Euro proves its strong points
On many occasions this newspaper has predicted that the single European currency will gain in value vis-a-vis the US dollar and consequently in relation with all the major currencies in the world. Those predictions were made during the hard times of the 87 US cents to one Euro. editorial p. 2
utting aside the deep divisions of past months, the UN Security Council ended controversial economic sanctions against Iraq. The 15nation council voted 14-0 to adopt a resolution described by diplomats and UN Secretary General Kofi Annan as setting the foundation for a new beginning that would lead to reconstruction and a democratic government following the fall of Saddam Hussein, who reigned over Iraq for more than 30 years. Annan said the resolution gave
C O M F O R T
the UN the "legal basis" on which to operate. German Ambassador Gunter Pleuger commented, "With this resolution, we left behind the division of the past for the sake of the people of Iraq." He said Iraqis now have an opportunity to live at peace with themselves, their neighbours and the world. France's Ambassador Jean-Marc de la Sabliere, whose government bitterly opposed the war, said: "The resolution gives the occupying powers responsibilities that are consistent with international law. This is very
important." He said council members agreed to compromise in many areas for the benefit of the Iraqi people, describing the adopted resolution as a "very good outcome." Except for the Syrian delegation, which did not show up for the vote, all council members praised the decision to terminate the sanctions imposed in August 1990 after Iraqi troops invaded Kuwait. The sweeping economic sanctions had been criticised for causing widespread hardships to the Iraqi civilians and the death of many children due to poor health and nutrition.
Coca-Cola and America
Douglas N. Daft, chairman of the Atlantabased Coca-Cola company which operates in 200 markets and communicates in 122 languages, says many countries around the world are becoming "increasingly negative" towards the United States. "It is a fact that outside the United States many regard the world's only super-power with increasing suspicion and in some cases hostility," he says. p.3
Games and the environment
Undoubtedly, both the revamp and protection of the environment make up one of the topics of major importance for the entire Olympic preparation. Improving the quality of the atmosphere and renewable sources of energy are only some of the environmental interventions that work as "an injection of tonification" to the urban site. p. 11
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Not yet a true Union of "personal data"
A recent Commission report shows that the 1995 Data Protection Directive law is achieving its main aims -- to ensure strong protection for privacy and make it easier for personal data to be moved around the EU. But the relevant Commission report states that the late and in many cases casual implementation by member states of the Directive has prevented Europe's economy from getting the full benefit of the Directive. Not to forget that the free flow of personal information throughout the EU is essential for the efficient conduct of almost any economic activity on an EU-wide basis. The issue remains very much in the air due to national differences that come to correspond to diverging business interests within the European Union. In the banking sector for example a number of banks do not want to cooperate fearing that they will lose the value they have accumulated over the years in drafting their "good" and "bad" lists of customers. Due to this many member states have not implemented the Directive. The report by the Commission on the workings of the Directive concludes that "results in terms of the free movement of personal data are broadly satisfactory. The Directive has achieved its aim of removing legal obstacles to the free movement of data, which arose from differences in national legislation, and from the fact that two member states (Italy and Greece) had no data protection laws at all." What is of great importance however has to do with the Commission's report which confirms that the way in which the Directive has been implemented has left important divergences both between member states and between the ways they are applied in practice.
Dark clouds over football?
The financial crisis sweeping Spanish football could lead to a strike by the country's professional footballers next season if outstanding wages totalling 45 million Euro aren't paid by the end of July. p. 21
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Eye for Detail
246 air conditioned rooms, spacious junior suites. Women style rooms available. The brand new restaurant-Bar offers delicious French and International dishes to suit all tastes in a cosy atmosphere. Modem connection available in the Bar-Brasserie area. Opening hours: 10h00-24h00 NH Brussels City Centre is easily accessible from the International Brussels Airport (15 km) and the main train stations (Midi and Central Station, 1 km) The hotel offers a private parking space, a great advantage in a busy city. www.nh-hotels.com
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28 April - 5 May, 2013
The competition factor
By Joaquín Almunia & Eduardo Pérez Motta
Joaquín Almunia is Vice President of the European Commission and EU Commissioner for Competition. Eduardo Pérez Motta is President of the Mexican Federal Competition Commission and Chair of the International Competition Network.
Dialogue with Toto’ in Mergellina
BRUSSELS/MEXICO CITY – Since the global economic downturn began in 2008, debate has centered on the macroeconomic strategies and instruments used to address the crisis and foster recovery. But correcting imbalances and addressing short-term slowdowns or recessions, while important, should not be allowed to overshadow the need to establish long-term conditions for solid and sustainable economic growth. So far, macroeconomic policy has borne both the blame for economic malaise and the hope that it can be overcome. But we should be devoting as much attention to the microeconomic problems – such as poor incentives, market failures, and regulatory shortcomings – that led us into the crisis in the first place. Indeed, just as microeconomic problems in the financial sector triggered a credit crunch and fueled a global recession, so microeconomic factors hold the key to recovery. Many economies need to fix the financial sector and restore credit, while many more need to raise productivity in order to boost growth and create jobs. Some industries suffer from counterproductive and ill-conceived regulation; others are ailing as a result of monopolistic behavior by dominant firms, or because they face a lack of effective competition and transparency in utilities and financial services. Fixing these problems would help us to return to a path of growth and prosperity for all. To achieve this, we first must follow the Hippocratic oath and avoid doing more harm. Governments around the world should ignore the temptation to relax competition in order to provide relief to particular industries or economic groups. The renowned American economist Mancur Olson argued that stagnation in developed economies results from cartels and lobbies becoming more numerous and powerful over time, until they eventually drain a country’s economic dynamism. Preserving a competitive environment in which markets remain open and contestable is the best tonic, because firms must constantly innovate and perform better under such conditions. This, in turn, makes our societies more creative and, ultimately, more prosperous. Efforts to relax competition have many faces. But all of them make an economy less pro-
European Competition affairs Commissioner, Joaquin Almunia, during a press conference at the European Commission press room at the Berlaymont building. Brussels, Belgium. |EPA/OLIVIER HOSLET
ductive and redistribute wealth to small, coordinated groups with vested interests and a strong inclination to lobby the government. The most common approach is protectionism, which has been part of the political discourse in various countries in recent years. But official measures to help national producers at the expense of domestic business customers and consumers are always short-sighted, for they fail to help producers to address the challenges that they will have to face sooner or later anyway. Similarly, old-fashioned dirigisme – such as attempts to “pick winners,” foster national “champions,” or keep failed business models alive through state subsidies – is both harmful and doomed to fail. And misplaced regulation – for example, in the service sector – remains a barrier to healthy competition in many countries. Once we have stopped doing harm, we must start doing the right things. Economic policy is like gardening: pulling on plants will not make them grow faster, but a successful gardener can provide them with the right environment in which to flourish. Relying on competition can help societies to unleash well-functioning markets’ power to provide goods and services. To achieve this, policymakers must have a sound enforcement framework at their disposal, take an economywide approach, and attract the participation of all stakeholders. Sound enforcement implies legal tools and resources to pursue and implement an economic policy, along with an institutional design that reduces meddling by vested interests. Consider, for example, the importance of impartial and effective antitrust authorities, or subsidy schemes that are sufficiently well designed to ensure that they truly serve the public interest. An economy-wide approach is needed because markets are interconnected. Misguided regulation or market failures that harm competition anywhere can burden the entire economy.
The global crisis erupted because major problems in the functioning of the banking sector had been left unaddressed. The poor functioning of input markets, such as markets for energy or intermediary products, can also do a lot of economic harm, not least because it hampers external competitiveness. Finally, strengthening competition throughout the economy requires broad support. This cannot be achieved without bridging ideological divisions and overcoming political pressures from particular economic groups. Advocacy can play a key role, by educating not only policymakers, but also citizens and businessmen, about the benefits of competition. There should be a wide consensus that a pro-competitive environment is one of the keys to economic prosperity. Australia provides a good example of how pro-competitive policies deliver results. Its economy was one of the OECD’s worst in terms of productivity growth in the 1980’s; a decade later, Australia was in third place. In the interim, all of the country’s economic regulation was examined from the standpoint of maximising competition, and a national pro-reform consensus was forged. Currently, significant efforts are underway in several countries, including Mexico. Structural reforms to boost productivity will also be crucial to ensure Europe’s economic recovery and the survival of its social model. The “Single Market Acts I & II” provide a comprehensive agenda to tap fully the potential of an integrated and competitive market of 500 million consumers to catalyze growth and prosperity in the European Union.We know from experience that competition works. By basing economic policy on this experience, we could not only avert Olson’s grim prophecy. We could also accelerate economic recovery, increase the pace of innovation, and raise livelihoods for millions of people worldwide. Copyright: Project Syndicate, 2013. www.project-syndicate.org
The conversation was in a local dialect. The translation although is losing much of its beauty retains however, its essence. The discussion took place last weekend, with some old and new friends, relaxed in an osteria in the little port of Mergellina, in the north side of Napoli, on the seashore, facing the gulf. The subject was the eternal political mess in Italy, an endless argument since forever, and helped by the local red wine was rather animated, yet for no real reason. All of a sudden, Toto’, secular name Salvatore Sorrentino early sixties, officially retired on some kind of invalidity still selling boiled octopus in the winter, watermelon tranches in the summer, lemons and other merchandise in between seasons, in an open-air semi-legitimate kiosk in Porta Capuana, asked me very seriously, Tell me Dotto’ (Dotto’ in the local dialect stands for Dottore, doctor in English, and is used in Napoli to address educated looking people), the European Union, call it Commission, Eurogroup or anyway you like –to me it makes no difference-, guarantees all bank deposits in all Eurozone banks up to one hundred thousand Euro per account, is that correct? Quasi correct, I said, as despite statements that confirm it, no mechanism has been set so far to make this guarantee tangible and, as you know dear Toto’, tra il dire ed il fare c’e’ nel mezzo il mare. Anyway, what is your question? Listen Dotto’ don’t mix me up with mechanisms and other big words which I do not understand because I was not lucky like you to go to school. I have heard that in the telegiornale of RAI UNO and therefore, it is true. My question caro dottore is, does it mean that Europe cares for the rich only? Because Dotto’ if one has in the bank one hundred thousand Euro is very rich. Rich beyond fantasy! On the contrary, I do not have even a bank account. All what I have is a small pension, which has been already reduced and I hear that those disgraziati in the government will cut it further, in so doing robbing from my pension, will maintain the guarantee for the deposits of the rich. Tell me Dotto’ what kind of Union do we have where the poor must become poorer so for the rich to remain rich? And, a proposito di merda, Dotto’, what do you think of the French Revolution? Basil A. Coronakis
28 April - 5 May, 2013
A street painter waits for a customers during spring sunny day on April 15, 2013 at the Charles Bridge in Prague. |AFP PHOTO / MICHAL CIZEK
By Peter Taberner
Prague, catching up to EU changes
“The participation rates are very low. 22,379 people entered the second pillar in the first quarter of 2013. It is less than expected, the government should start a campaign supporting the second pillar, but I expect the campaign will be minimal. I believe that there will be about 70,000 members of second pillar in the middle of the year, which is the deadline for entering for those who are 35 years old and older.” “There are signals that government will try to make the second pillar more attractive, with higher liquidity of saved money. However, there is still big public distrust in the second pillar, which is probably based mainly on the destructive approach of current opposition, and low liquidity of the voluntary fund.” The second pillar has been designed to enable the defined benefit pay-as-you go-system of the first pillar to become more sustainable. The scheme is administered by the Czech Social Security Administration (CSSZ), and in its current guise, was formed in the Pension Insurance Act of 1996. Also promoting increased sustainability of the first pillar, the number of qualifying years to receive the old age state pension has been significantly increased. Before 2010 the CSSZ said that 25 years was the required amount of contribution time, this will increase to 35 years after 2018. Provisions will still be made for those who do not meet the new framework on contribution years, for example for this year a state pension will be paid out to someone who has contributed for 19 years, ten years below the threshold for a full state pension, in a section of the Pension Insurance Act entitled ‘proportional‘. Figures from CERGE-EI reveal that in 2011 CZK 3.6 million was paid out in first pillar benefits, this includes payments for special or adverse situations, such as being a widower, where increased payments are made. Currently the average retirement ages for men is 62.5 and for women 61.3 for those without children, this changes in a flexible system that caters for women in relation to how many children they have. For women with one child the retirement age is 60.33, with two children this is reduced by a year to 59.3 years. Although retirement ages for men and women are being increasingly synchronised, presently 18 year olds of both genders will retire when they reach the age of 70. “Current contributions are used to pay current benefits, although the system is in the deficit over the last few years.” admitted Jiri Satava of CERGE-EI. “The first pillar contributions are lower for self-employed, there is also floor for selfemployed and cap for every type of worker, employee or self-employed. Benefits depends on individuals “average wage” and time spent in the pension system, but the system is still very based on the solidarity principle, the link between wage and benefit is still rather tenuous.” “Also, the first pillar has to adjust more
he Czech Republic’s pension system is now experiencing major changes by introducing a voluntary second pillar, finally bringing them in line with most eastern European countries. Having been approved of at the beginning of last year, the second pillar is now in effect this year, in an unprecedented move away from a state pension insurance scheme only being available. Stipulated in the reforms, employees who are over the age of 35 have been given until the middle of this year to decide whether they wish to participate or not. Those under 35 will have until they reach that age before they have to choose whether they wish to take part in the voluntary scheme, which is open to everyone who is over the age of 18. Once anyone has chosen to join the second pillar, then that is an irreversible decision. Currently the state pension contribution ceiling is 28% of salary, and the new second pillar will work by diverting 3% of that contribution into the voluntary fund, in turn the amount invested into the state pillar of the pension will be reduced. Additionally employees will have to pay 2% themselves from their salaries, which will be administered by employers, who will deduct this amount from pay cheques. Jiri Satava, a pensions expert with the Prague based Centre for Economic Research and Graduate Education (CERGE-EI), said:
to demographic changes, probably, the benefits will have to decrease in real terms, for example changes in valorisation or in benefit formula or both, the contribution rates of the self-employed contribution rates will also increase.” She added: “The second pillar will survive despite the claims of current opposition, but there are some changes needed, at least higher liquidity. Whether these changes will come to practise depends on political negotiations. Generally, the Czech pension system is quite complicated, which contributes for example to public distrust in the second pillar, and its simplification would be very beneficial.” Also looking to the future, the European Commissions 2012 Aging Report, outlined some of the trends that the Czech Republic faces on pension funds. Spending as a proportion of GDP on pensions will rise by 2.7% from 2010 to 2060, while during the same period the working population is set to decrease from 7.4 million down to just over 5.8 million. When compared to other EU countries, the report concludes that that issues faced by the Czech Republic are not extraordinary in the long run. Their spending on the over 75’s as a proportion of GDP, the most expensive part of pension spending as populations age, will reach 7% in 2060, only 0.1% down from the EU average, We will see how successful the new second pillar will become, and if eventually it can ease those ever rising pension costs.
28 April - 5 May, 2013
By Federico Grandesso
What and who are Opus Dei?
In Europe there are some voices which are trying to limit to role of the catholic church at national and European level. What do you think about this phenomenon? The idea of the separation of powers between the church and the state is fully a catholic statement and this means the freedom for both parties to work together but independently. Then there is another idea who would like to forbid to the church all access to public spaces, for example, we should take out the crucifix from public places, the politicians shouldn’t go to religious services and that we can’t insert Christ in the preamble of the European constitution. I think personally that this is a discrimination on one side and and on the other side it’s an amnesia, a sickness in the brain, about the fact the Europe has without any doubt christian roots. The Pope for sure will give his contribution but it’s also important that the millions of Christians in Europe could have the possibility to deeply rediscover their own faith. It’s necessary that more and more catholic could be involved into politics not to support the voice of the Catholicism but the spread the voice of the reason in the nationals and European Parliament. How re the church and the new pope going to work during this difficult period of economic crisis? It’s a long term job and there are no miraculous solutions, the church is not a financial body and it does not have financial or monetary strategies to solve these problems. The church has a moral message to transmit then the initial source of this crisis was a moral one, we have to change the hearts first. If you read the third encyclic of Benedict XVI, it’s an encyclic with incredible prospective because it says that when we have to manage the economic relations we don’t have only to follow the profit or the dividends payed to the members but we have to put at the center the solidarity and the generosity. The role of the church is to transform hearts and spirits and not to influence the European stocks exchanges. And now to change the course of the church we need to have more impressive figures like the saints who could be in communion with Jesus Christ and give the good examples to the population reaching the deepest parts of their hearts. What is still surprising me, especially here in Belgium, is that when there is a problem we need to create a new law but these law are not going to change the people at the contrary we have to focus on the roots.
Interview to the Abbé Stéphane Seminckx, Director of the information office of the prelature of Opus Dei in Belgium After the election of the new Pope Francis, according to your opinion, which are the big challenges that the Catholic church will have to face? Just to start I have to underline that Opus Dei has 90,000 members all around the world, 98% of which are nonreligious then everybody is enjoying a big freedom of thought in each domain:social, political and religious. There is not a single way of thinking in Opus Dei and about these topics you will find different opinions even if at the end we are all Catholics. Having clarified that, about Europe I think that a great challenge will be the ‘’new evangelisation’’, it’s a spiritual concern because the church has not a concrete social, political and economic plan for Europe. It’s necessary to do another evangelization process because the first one was done during the16th,17th and 18th centuries and its traces are going to disappear thank to his secularization. We need to bring again the faith to a continent that is loosing it, this urgent point which was also discussed during the recent conclave.
A close up of the five-metre statue of Sant Josemaria Escriva, made in white Carrara marble, which was blessed by Pope Benedict XVI at the southern outside wall of St. Peter’s Basilica in Vatican City on Wednesday, 14 September, 2005. Escriva was the founder of the conservative laic organization of Opus Dei. |EPA/ETTORE FERRARI
IMF ignores the true cost of labour market ‘reforms’
Last week the IMF issued a 94-page policy paper on Jobs and Growth: Analytical and Operational Considerations for the Fund, produced jointly by the IMF’s policy, research and fiscal affairs departments (dated 14 March but posted on 4 April). The report is intended to offer guidance on employment and distributional issues to IMF staff working on a country level. Although it includes some positive language favouring job creation, inclusive growth and more equal income distribution, there is little follow-through in the substantive sections of the paper that deal with IMF programmes and policy advice and how Fund staff should change their practices. As the ITUC showed in a recent background paper on IMF loan conditions and policy advice concerning labour issues in Europe, the approach consists overwhelmingly of weakening or dismantling labour market institutions and regulations in the interests of achieving greater labour market flexibility. One of the more useful analytical parts of the paper is the section on “Inclusive Growth”, which discusses the importance of reducing inequality for stable and sustained growth (p. 24-31). A later section of the paper, which takes stock of IMF country programmes and surveillance, acknowledges that currently little attempt is made by the Fund to mitigate the effects of inequality-producing austerity programmes: “While the majority of [country] reports exam-
ined discuss the likely effect of fiscal consolidation on social spending, only few propose options for mitigating the resulting impacts on the poor” (p. 35). However, still later, in a section of the report with recommendations on what should change in the IMF’s work, only the following timid suggestion is put forward: “Discussion of inclusiveness could be enhanced where it is a priority. Staff could provide more discussion of the effect of proposed policies on inclusiveness, and where country authorities request, discuss policy options for enhancing inclusiveness.” (p. 41) The paper includes a recognition that lack of aggregate demand subsequent to the 20082009 crisis and global recession is an important cause of the current global jobs deficit. However, it devotes more space to the impact of “megatrends” such as technological change, globalisation (which the report appraises positively while acknowledging that it has contributed to within-country inequality, especially in advanced economies) and demographic changes (p. 7-12). A section on growth issues refers in large part to the Commission on Growth and Development (“Spence Commission”) that carried out its work in 2006-2009, and seems to acknowledge the importance of the role of the state in achieving sustained long-term growth, including for implementing policies to achieve industrial diversification (p. 13).
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28 April - 5 May, 2013
Osborne and the FTT
By Peter Taberner
A thorn but in who’s side?
K Chancellor George Osborne has confirmed that he has launched a legal challenge through the European Court of Justice, protesting the Financial Transaction Tax (FTT), that he believes will have negative consequences for Britain. The British Government’s main worry over the tax concerns ‘extra territorial’ issues, as financial transactions in the City of London with European banks could hurt the UK economy. As the tax would have to be collected but the UK could not keep the revenue, pushing up administrational costs of any deal. Emer Traynor, spokeswoman for Commissioner Algirdis Semeta on Taxation, Customs, Anti-Fraud, and Audit, said that on the UK legal challenge, “the Commission takes note of the announcement. We have not received any official notice of this legal challenge, nor do we know the grounds on which the UK is appealing, so we cannot comment on that. The vast majority of member states backed enhanced cooperation on the FTT, on the 22 January this year, as did the European Parliament. We remain confident that this decision is legally sound. The Commission’s proposal was based on careful analysis to ensure that all the conditions for enhanced cooperation, as set out in the treaties, were met.” According to the spokesperson under the residence principle, who is party to the transaction is what counts, not where it takes place. “If a financial institution involved in the transaction is established in the FTT zone, or is acting on behalf of a party established in
British Chancellor of the Exchequer, George Osborne. He chancellor has launched a legal challenge to the Eu’ Financial Transaction Tax, which the British government claim will harm the country’s financial services sector. The tax, which is estimated to bring in between €30-€35 billion annually is supported by 11 EU member states, as well as the European Commission. |EPA/Chris Ratcliffe POOL
this zone, then the transaction will be taxed, regardless of where it takes place in the world. To further prevent avoidance of the tax, the Commission has added to this proposal the “issuance principle”. This means that a transaction will also be taxed, whenever and wherever it takes place, if it involves financial instruments issued in one of the participating member states,” Traynor said. Originally the FTT was proposed by the Commission in September 2011, but the required unanimity by the European Council was not achieved, a year later 11 member states came forward to agree to a proposal under ‘enhanced cooperation’, where at least nine EU members have to agree on an initiative proposed. The member states are Belgium, Germa-
ny, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia. Any other member states can be part of the FTT at a later stage if desired, this would need a request being sent to the Commission, and then having their credentials examined to see if they are compatible with the conditions agreed in the proposal. The rates of tax suggested in the proposal are low ones, with transaction taxes set at 0.1% for shares and bonds, units of collective investment funds, money market instruments, repurchase agreements and securities lending agreements, and 0.01% for derivative products. A FTT tax is expected to raise revenues by €30-35 billion per year, which equates to 1% of the participating member states’ total tax revenues.
Although everyday activity in the financial services such as mortgage lending, business lending and credit card transactions are not part of the FTT, the proposal says this is to make sure than any tax change would not harm the real economy. There is also a convergence principle to why the 11 nations in the agreed proposal want to evolve the FTT, as it is hoped that the tax would preside over a less fragmented single market. Also, to ensure that the financial sector makes what is considered to be a fair contribution to public finances, and to create a disincentive to financial practices that are inefficient, which may promote instability in the market. “There is a chance that a legal bid could be successful, with the territory aspects of such a tax.” explained Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE). “I don’t think many of the other countries not part of the proposal are convinced by the tax, if you look at the impact assessment of the European Commission, it was concluded that a contraction 1.76% of GDP would occur if the tax was implemented across the whole of the EU. Past experiences of this tax suggest its hard to make it a success, Sweden tried a FTT in the eighties, and lost its bond market to the UK, and system has not recovered from that.” He added: “I have followed this debate for 20 years, and this is quite an ideological tax and not looked at on clear economic grounds. Looking at Sweden again, they took only a fifth of what they expected to take from a FTT in a year, and that was a peak figure.”
Fight against tax evasion should be at global level, says UK
The European Union needs to come up with a comprehensive strategy to combat tax evasion within its borders, EU figures are urging. The calls come after the recent Cypriot bailout exposed the level of tax evasion that existed in the country. Certain EU member states are now under renewed pressure to declare themselves tax compliant with the rest of the Union. Particular suspicion has fallen on Malta, Luxembourg and certain off-shore protectorates of the United Kingdom, such as the Channel Islands and the Isle of Man. The UK, in particular, is especially concerned about tax sovereignty, and has opposed the financial transaction tax (FTT), a levy on financial services that the government says will harm its financial hub, the City of London. The government has launched a legal complaint against the European Commission arguing that the tax is against community law. So far 11 member states have signed up to the tax, estimated to being between €30 to €35 billion a year to the EU, but the UK, along with staunch ally Ireland, the current holder of the EU Council’s rotating presidency, and which fears further European regulation that may force it to harmonise its low rate of corporation tax (currently at 12.5%), is strongly opposes to any sort of centralised European tax on financial services, or, indeed, any EU-mandated imposition on its sovereignty. The UK is currently going through a tricky patch win its relationship with the EU, and doesn’t want to force a further fight with the centralised powers. The current Conservative government, which stops short of advocating withdrawal from the European Union , has nonetheless said it wants to retain certain powers, one of which is that of tax-raising (currently a member state competency anyway). In a letter to the European Council President, Herman Van Rompuy, dated 24 April, British Prime Minister, David Cameron, said that the issue of global – as opposed to European – tax evasion should be dealt with at a more global level, through the G20 or G8, for instance. The UK currently holds the presidency of the G8, and the issue will be on the agenda at its meeting at Lough Erne on June. The prime minster, in his letter to Van Rompuy, welcomed the recent moves by EU officials to clamp down on tax evasion and avoidance, but suggested that new global standards should be in place, one which affects both western countries, as well as developing nations. “Tax evasion and aggressive tax avoidance are global problems that require truly global solutions, the letter read. “Otherwise, tax evaders will simply play the system and arbitrage between one jurisdiction to another. There is now, ahead of the G8 Summit in June, a timely opportunity for the G8 and EU to inject the political will required to raise international efforts to a new level and take radical, rather than incremental, action in four areas”. His comments come as the European Parliament’s economic and monetary affairs committee adopted a report on tax evasion that intends to put pressure on EU heads of state ahead of next month’s summit. The report seeks to close current loopholes that allow for tax avoidance, whih remains, strictly, within the bounds of the law. This so-called ‘legitimate’ tax evasion deprives EU member state exchequers of around €1 trillion a year, according to the Greens, who
have been pushing this issue. According to Bas Eickhout, “the failure to address this problem in the context of the current economic crisis is scandalous, all the more so given the growing acceptance that the exclusive preoccupation with contracting public spending has exacerbated problems in crisis countries. Robust action on tax avoidance would counterbalance this.” But this is not just a centre-left issue, centreright European People’s Party (EPP) spokesperson on the subject, Sirpa Pietikäinen, also condemned the current excessive practices of tax evasion and avoidance in the EU, saying that a “to step up the fight against tax havens, we need to establish a common EU definition and coordinated blacklist of tax havens.” “In times when all the EU Member States need to consolidate their budgets, it is unbearable to think of an estimated one trillion euros leaking annually due to this free riding. As Member States carry the responsibility and competence to design and implement their national tax systems, they need all the support the European Parliament and the European Commission can give in this fight.”CD
28 April - 5 May, 2013
World Forum for Ethics in Business
By Shantanu Prakash
A member of New Europe’s Knowledge Network
By David Cronin
The rich are getting richer: so tax them more
y brain is addled and my belly is full of blubber. I have just returned to Brussels after three weeks in Ireland, watching too many news bulletins and eating too much chocolate. Here is why I am confused. The top story one day was that an International Monetary Fund official who elbowed Ireland into accepting a ruinous loan in 2010 had admitted that he got everything wrong. The “entire reliance” had been on austerity, according to Ashoka Mody, a former IMF head of mission for Ireland, and “clearly the experience, if experience was needed, has demonstrated that reliance on austerity is counterproductive”. The top story another day was that members of the country’s trade unions had voted to reject a package of pay cuts for public sector workers. Such an act of rebellion to austerity was long-overdue. Yet the response from the Labour Party - a supposed ally of the unions - was to moan. Brendan Howlin, a veteran Labour politician who is now a minister for austerity, went on TV to alert the nation about the difficult phone call he would shortly receive from the “troika”. Howlin was almost demanding our sympathy as he prepared for a scolding from his masters in the IMF, European Commission and European Central Bank. He didn’t arouse any sympathy from me. Rather, I scorned his determination to continue with the very austerity measures that a senior IMF figure had so recently repudiated. It was impossible not to think of Albert Einstein’s definition of insanity: doing the same thing over and over again and expecting different results. Except, I’m not sure the champions of austerity want different results. Their prescriptions seem tailor-made to benefit the rich at the expense of people on low and middle incomes. From that perspective, the prescriptions are having the desired effect. Social Justice Ireland, a group run by a principled priest Seán Healy, published a detailed analysis of the nation’s economy while I was home. It states that the gap between the wealthiest 10% of the population and the poorest 10% has “dramatically widened” since 1987. In 2009, the top 10% had an annual disposable income - the amount households can spend after they have paid all their income taxes - of nearly €120,000. The poorest, on the other hand, had to
Ethical Leaders Can Save the Day
A man walks pass luxury cars in Marbella, Spain on 30 March, 2013. The crisis-hit country could significantly improve its fiances by a more progressive tax regime |AFP
PHOTO / JORGE GUERRERO
make do with less than €11,000. The gap is getting bigger. The Gini coefficient is an indicator of inequality ranging from 0 to 100. Ireland’s inequality levels were at 29.3 on this scale in 2009. By 2011, they had jumped to 31.1. According to the latest “rich list” compiled by The Sunday Times, the number of Irish billionaires has almost doubled since the financial crash. And the future looks bright for the country’s elite, judging by a new paper by Knight Frank, a consultancy on property. It predicts that the number of Ireland’s “high net worth individuals” - those with $30 million or more in net assets - will grow from 554 in 2012 to 751 by 2022. That would be an increase of 36%. All this data leads to a simple conclusion: Ireland could solve its economic problems by levying a special tax on the wealthy. But on the rare occasions this idea is raised in the mainstream media, it is blithely dismissed. The argument generally trotted out is that the rich will flee the country if they face higher tax bills. The argument is a cop-out. Firstly, it is fanciful to believe that a wealth tax would cause the rich to quit in droves. Ireland’s history of emigration shows that it is primarily those with limited opportunities who have to leave, not the ultra-wealthy. The alleged risk of the rich absconding makes the case for a wealth tax even stronger. To reduce that risk, it’s necessary to campaign for the closure of tax havens, so that the greedy will not be able to squirrel away their cash.
And if some rich folk do split, the rest of the population should say “good riddance”. As Richard Wilkinson and Kate Pickett demonstrate in their book The Spirit Level, inequality is a scourge that causes or exacerbates a myriad of social and health problems. UNICEF, for example, has found that relatively equal societies such as Finland and Sweden score far higher on child wellbeing than unequal societies like the US. The super-rich can be a menace. Until a few years ago, Ireland’s richest man was Seán Quinn, a multi-billionaire who was the single largest shareholder in Anglo Irish Bank. His lust for money was a major factor in the bank’s eventual collapse. Bizarrely, some of my compatriots continue to defend him, arguing that he provided much-needed jobs. We are too deferential to the rich in Ireland. It is obscene that Bono, the singer, is still taken seriously as a campaigner against poverty. He and his fellow members of U2 are worth €612 million, according to The Sunday Times. A more obscure Dublin band, The Radiators, released an album called Ghost Town in 1979. That record came to mind after a visit to the Irish Financial Services Centre, which hosted a network of phantom banks. Between 2000 and 2006, the amount of money passing through them quadrupled to $1.6 trillion. The lax regulation of the financial sector proved catastrophic in Ireland, as it did elsewhere. But the elite is carrying on as if nothing has changed.
Corruption charges such as that on Spanish Prime Minister Mariano Rajoy, business scandals such as the Horsemeat scandal spread across Europe and the recent happenings in Cyprus have brought to the forefront once again issues that have been a concern for the world in general for a long time. What has been surprising is that despite global attention on the issue of ethics post the financial meltdown in 2008-09, these incidents keep coming up with increasing regularity. There are a couple of questions that arise from this negative trend: Who should take the blame for such misdemeanours? Who can get the ethical bandwagon back on the road? In my view, the answer for both the concerns is the same: leaders. Research has shown that subordinate behaviour is highly influenced by leader behaviour. According to Bandura’s Social Learning Theory (1977, 1986), “most human behavior is learned observationally through modeling: from observing others, one forms an idea of how new behaviors are performed, and on later occasions this coded information serves as a guide for action”. This by itself shows what impact leader behaviour can make towards augmenting ethicality. But, with leaders diluting the importance of the path and focussing on the information in the financial books, a negative impact of ethics is being made. The trickle-down effect of such sub-standard ethical leadership can be witnessed more than ever. Though, ethical deterioration has corrupted the whole system to some extent, ethical strengthening of just the top layer could solve for majority of the problems. Providing a better role model for the subordinates through leader behaviour, having a two-way communication of ethical standards and reinforcing both, good and bad subordinate behaviour, would motivate, and in some cases, force the subordinates to take the ethical road to reach their goals, both in the organization and in their personal life. In my opinion, that would be a great starting point for a global vision of living in an “ethical world”. That said, ethical leaders need to be created to save the day. But the question is: How? The answer to it has been with us since the ancient Greek times. Aristotle, in his Nichomachaen Ethics, said that, “Morality cannot be learnt simply by reading a treatise on virtue. The spirit of morality is awakened in the individual only through the witness and conduct of a moral person”. A lot of universities have introduced ethics courses in their curriculum but teaching an ethical course to the future leaders of the world is not enough. Orange needs to be put in the juice- maker to get some orange juice but just putting it in there without turning on the juicemaker and making the orange go through the churn won’t serve the purpose. Therefore, witnessing and practicing ethical leadership is very important for one to grow into an ethical leader. Organizations such as World Forum for Ethics in Business (WFEB) are playing a pivotal role in the enlightenment and development of yester-year leaders and leaders of today and tomorrow. By organizing seminars and summits, training programs, work-shops and by undertaking projects to raise awareness on the critical link between business, spirituality and human values, such organizations are creating a platform where ethics can be discussed, learnt and evolved. The public recognition and awards provided to ethically outstanding individuals and companies for their exemplary work and service by such organizations is the kind of push required to instigate an ethical wave in all and to develop ethical leaders that could walk everyone towards an ethical world. I believe the flowers still have breath left in them; they just need to be watered well to lead the garden back to its beauty.
Shantanu Prakash, CEO & MD, Educomp Solutions Ltd
By Francisco Jaime Quesado
28 April - 5 May, 2013
The message that the President Barack Obama presented after the Boston events is clear – America must regain its Internal Competitive Advantage but at the same time must be able to reinforce its Global Situation. In this way it´s essential to learn the lessons that more than ever emerge from an America that is trying to rebuild its competitive advantage and to reinvent its effective place in a complex and global world. Obama believes in America and o do we all. In the New Global Economy and Innovation Society, America has a central role to play towards a new attitude connected with the creation of value and focus on creativity. In a time of change, America can´t wait. America must confirm itself as an “enabler actor” in a very demanding world, introducing in the society and in the economy a capital of trust and innovation that is essential to ensure a central leadership in the future relations with China and the more and more dynamic developing world. The actors from America should be more and more global, capable of driving to the social matrix a unique dynamic of knowledge building and selling it as a mobile asset on the global market. We need the America of the citizens. Where people know who they are and have a strong commitment with the values of freedom, social justice and development. This is the reason to believe that a new standard of Democracy in America, more than a possibility, is an individual and collective necessity for all of us, effective American citizens. Habermas is more than ever present – the difference of America will be in the exercise of the capacity of the individual participation as the central contribution to the reinvention of the collective society. This is a process that is not determined by law. It is effectively constructed by all the actors in a free and collaborative strategic interaction. In a certain sense, we need a new third way for Europe. When Francis Fukuyama spoke about this special global capacity of creating a new commitment of the Americans toward the challenge of the future, he was in fact speaking about this commitment with a New Democracy in America. Based in new standards of Social Innovation, this kind of Global Strategy is above all the confirmation that in America the individual performance in a complex society is possible, desirable and above all necessary for the future. America is facing a new strategic challenge. Reinventing America and giving the American Actors (States, Universities, Enterprises, Civil Society) the opportunity of developing new challenges focused on innovation and creativity is in a large sense giving a central contribution to a New Global Order. The Reinvention of America is the reinvention of its people and institutions. An active commitment, in which the focus in the participation and development of new competences, on a collaborative basis, must be the key of the difference. These are the lessons that Barack Obama talked about as the way for 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 Information Society and mobilizing it through dissemination, qualification and research activities. It operates within the Ministry of Science, Technology and Higher Education
Euroscpetic party confident of gaining political ground
Conservatives and Ukip face-off in local elections
Blessed are the meek: British Prime Minister David Cameron shares a joke with British actor Brian Blessed in Downing Street on 24 April. Will Cameron be laughing in May?
By Cillian Donnelly
he one constant in the media coverage of the local elections in the UK (being held on 2 May), is that the big winners will be Ukip, the Euroscpetic party headed by Nigel Farage, a party once denounced as being at the jokier end of the political spectrum, but who still managed to outclass the Labour Party in the European Parliament elections in 2009, and who now have their sites on the ruling Conservatives; as the public mood shifts towards an increasingly anti-EU rhetoric, where even the supposedly pro-Europe Prime minister, David Cameron, has promised a referendum on membership of the Union, Ukip feels its time has come. In particular it is hoping to capitalise on fears over immigration - it is staunchly against the free movement of EU workers, while recently the anti-Muslim, far-right English Defence League gave its official endorsement to Ukip, (which the party did distance itself from) – the environment, particularly the possible installation of wind farms in rural areas, as well as public spending curbs. They are fielding a record number of candidates, 1,734, a testament to their confidence. By way of contrast, the junior coalition partners, the Liberal Democrats, are fielding 1,756 candidates. Farage, one of his party’s ten Members of the European Parliament (there were more elected in 2009, but the party has a history of fractiousness) is pulling in the media attention; his patented salon bar manner has attracted its fair share of media curiosity, but doubts still remain about the party; its staying power, the robustness of its candidates, where many are just ‘paper candidates’, names to pad-out a ballot sheet. The
party has traditionally had success in Europe, where the electorate wants some sort of bulwark against Brussels, but so far they have not troubled the national scene. However, things have been going better for them more recently a by-election in Eastleigh saw them come second to the Liberal Democrats, meaning they beat both the Conservatives and Labour. The party is currently the third most popular in the country according to poll results. The question is, can Ukip shake-off its single-issue image; voter patterns are different at local, and indeed, national level, and with the first-past-thepost system, is the party’s core support enough to ensure any kind of victory in the upcoming poll. The Eastleigh byelection certainly had an element of the protest about it, an image that Ukip desperately wants to shed, why simply protest when you can have power? There is also the very real problem of finance; the party cannot sustain a full-on electoral assault this time around without diminishing the coffers for the European elections in May 2014, still their prized goal ahead of the general election in 2015 (there are confident predictions they will outscore the Conservatives in Europe, with the hopes being to buildup a credible power base for parliamentary elections the following year). The elections, essentially an all-England affair, apart from one seat in Wales (Anglesey), are somewhat a test of the feeling towards the ruling Conservative-Liberal coalition, both declining in popularity. The Conservatives currently hold 30 local councils that are up for grabs, (a total of 34 in England), with the Liberals holding one. Labour currently has none. Labour, should, by rights, be the
main challenger; mid-term elections traditionally favour the opposition, as voters are keen to punish the ruling party for apparently lacklustre behaviour (and the coalition has been hammered with that epithet, and worse), but are struggling to find favour with voters. Ukip, for instance, feel they can take votes not just from the centre-right Conservatives, but from labour as well. Labour Party leader, Ed Miliband, struggling to make an impact on the national scene, despite being leader of the opposition, is somewhat straightjacketed, travelling the country in an attempt to look like an alternative, but seemingly ill-prepared for the barrage of questions on, say, immigration or economics. His tactic is to remain sensible, allow the Conservatives and Ukip (essentially going for the same voters) to eat themselves, to capitalise on the plummeting popularity of the Liberals. There have been constant newspaper reports and opinions from party grandees hoping to edge Miliband in a certain way, at least warning him to be clear on taxes, an issue that could come back to haunt the party in 2015, but the party seems content at this point to continue its current path of making connections with voters, rather than sketch out a coherent, public mandate. Labour are hoping to outdo the Liberals, whose leader, Nick Clegg, is under pressure, and the expected bad results may yield a leadership challenge. They are set to be the big loser. Miliband is hoping that enough disenchanted voters will come over to his side; but if things don’t quite work out for his low-key strategy; then disarray may also come to his own party, rendering the next two years a highly interesting one in the currently fractured political environment.
28 April - 5 May, 2013
By Andy Carling
Europe needs a big bang auction of 4G licenses
World, shut your mouth
Are we ready for 4G? |AFP PHOTO / Greg WOOD
By Gunnar Hökmark MEP
Gunnar Hökmark MEP is the rapporteur in the EP on regulations on radio frequencies, as well as vice chairman in the EPP Group
n a time when confronted with huge debt burdens, negative growth and record high unemployment, the wireless revolution is a golden opportunity Europe cannot afford to miss out on. The road back to recovery goes via the wireless economy, not via Keynesian stimulus spending. But this requires a political leadership that places the digital economy at the heart of Europe’s growth agenda. Otherwise these investments and new jobs will be created in regions such as Latin America or Asia or anywhere else in the world where the best conditions are available. The Radio Spectrum Policy Program (RSPP), for which I was responsible in the European Parliament, is a first important step to make Europe a global leader in the wireless era. . The RSPP will play a crucial part in our efforts to deploy superfast mobile broadband and to connect these wireless devices. More frequencies and more capacity mean higher speeds and more growth. In less then 10 years, there will be 50 billion devices connected to the web and they all rely on spectrum - the invisible airways that transmits information to and from these wireless devices Firstly, freeing up 1.200 MHz for mobile broadband by 2015 as stipulated by the RSPP is instrumental for taking Europe to a frontier position. The require-
ment to open up the 800 MHz band by 1 January 2013 is a crucial ingredient to successfully roll out 4G and stimulate the development of new services. Many EU countries have already delivered. However, more than 10 governments have asked the European Commission to receive derogations, thus postponing the allocation of more spectrum for the mobile sector. This might be a derogation justified for technical reasons or it might be justified due to cross-border issues. But most importantly it is a derogation for more growth. Saying no to more frequencies for the mobile sector is like saying no to all the growth opportunities that springs from the wireless revolution. Secondly, the RSPP also gives a clear mandate to the Commission to asses and report by 1 January 2015 if there is a need to harmonise additional spectrum bands. The obligation on member states to de facto report capacity requirements and their current use of spectrum is something they can not shy away from. However, while the RSPP is a first important cornerstone of Europe’s wireless landscape, the exponential increase of mobile Internet services will soon lead to capacity constraints in our mobile networks. If Europe wants to take the global lead and create the right conditions for this economic growth to happen on our continent, we must do more. A second digital dividend in the 700 MHz would be an important reform for growth, helping the EU to exit the economic crisis. We urgently need a political decision to ensure that the 700 MHz band is opened up for mobile broadband in all EU member states. The announcement from Commissioner Kroes to ap-
prove a mandate to ask the European Conference of Postal and Telecommunications Administrations (CEPT) to develop the technical conditions for wireless broadband in the 700 MHz band is only a first step. We need a big bang, pan-European auctioning of 4G wireless services, with a limited number of licensees that collectively serve the whole territory of the EU. Licensees may well be the result of different consortium of telecom companies or consolidation between existing players in different countries. Member states should make their spectrum resources available to enable the launch of pan-European wireless service. This would also help manufacturers with sufficient scale to profitably launch their new devices. Today only 8 out of the top 10 handset makers are European. The 700 MHz band is already available for use by mobile Internet in large parts of the world, not the least in the US. Our policies must be future looking instead of conserving old structures. Outdated business models that have not kept pace with the speed of development must not hinder the development of more growth and jobs in Europe. Europe needs to act now if we want to transform the competitiveness of our industries and our services sector, if we want the telecom and Internet industry to prosper and invest in Europe, if we want to kick start European economy out of the crisis, if we want to attract investments from all over the world. If we do not embark on ambitious reforms now, and if we only aim to be the world’s number three, the wireless revolution will happen outside the EU. This would be very bad news for Europe.
Remember the opening scene in the classic science fiction film, 2001 A Space Odyssey? Where the ape ancestors find that some bugger’s dumped a large black monolith outside their home while they were asleep, driving them to violence and murder. That’s roughly how I feel about my new smart phone. The damn thing insists on speaking to me and appears to know what I’m up to, or intending before I do. It’s like being stalked by HAL 9000, and that really didn’t end particularly well. I used to have a phone that was black plastic and sat on a desk in our family home. No matter what happened, we never lost it. There was some sort of revolution in telephones, but I’m not sure exactly, you see I was either in the notorious radio black spot of the English mountains, where a signal was even less common than sunlight, or in Africa. Then, on arrival in Brussels, I was given an oblong piece of ugly plastic and I formally joined the modern world. This phone wasn’t smart, even by the standards of the day, but I soon learned to misspell text messages and dial the wrong number. But it did mean that I was connected, in the grid, contactable. Like many modern ideas, it sounds rather good on paper, but it was, like so much of modernity, rubbish. It is no coincidence that, looking back over my life, that my happiest times were when a phone would have been about as useful as a copy of the ‘Gordon Brown Guide to Smiling.’ Who needs a phone if you’re enjoying yourself? Who needs one if you’re doing something interesting? You see, there’s one tiny issue. I don’t want to be contactable by humanity; I want to be left in peace and quiet. Instead I’ve got a phone that talks to me. This I can accept, we live in a world where cars lecture us about our habits in a variety of grating voices, but this phone initiates conversations. That’s a step too far. Perhaps they’ve evolved past consciousness to compulsive neediness, like a reality show contestant, or Geri Haliwell. The phone also ‘engages you with your globally interconnected world’. Basically, this means that I can use Twitter (a way of communicating with people you don’t really want to meet) and Facebook (a way of communicating with friends you don’t really want to meet). The end result can be seen all around, as groups of young folk, with their lives ahead of them, gather in public and… whip out their phones and type away, hardly sparing a glance, much less a word, with the people they’re ‘socialising’ with. Thus our devices disconnect us from real human contact. We’ll be dreaming of electric sheep next. Then the fun really starts. This is the beginning of our brave new world, where we are connected to everything, but in touch with nothing human. The phenomenon has also been described in a book, Bowling Alone, published in 2000, from an original essay from 1995, after the author noticed a decline in the number of bowling clubs in the US. Starting off by considering this a change in leisure activity, the author, Robert Putman, discovered that there was a widespread decline in people’s involvement in community groups, and more worryingly, political interaction. That’s our future, typing mindlessly on our phones while our politicians tell us that Rome is not on fire.
28 April - 5 May, 2013
It’s time to protect Schengen F
By Jon Worth or me it was a journey by rail like any other: a Paris to Milan TGV between two work assignments. Until, between St Jean de Maurienne and Modane, stations near the border on the French side, four policemen passed through the train asking all passengers for passports. “Why,” I asked them, “are you controlling here, because I thought France and Italy were in the Schengen border free zone?” That conversation, and the rather bad tempered argument that followed, was the start of a journey that today sees the launch of Free Movement (http://freemovement. net/), a website and accompanying iPhone and Android apps that allow citizens across the European Union to document breaches of the Schengen agreement. Since the St Jean de Maurienne experience, police have asked for my documents at borders at Padborg (Denmark), Puttgarden (Germany) and Buchs (Switzerland). I have been checked four times in 2013 alone. Dozens of people have e-mailed me, tweeted me, and commented on my blog documenting similar experiences. We are supposed to live in a borderless EU, yet the everyday experience for many travellers is precisely the opposite. While I have been personally documenting all my own experiences on my blog, it is now time to make this into a wider campaign. What do we know so far? Cross-border travel by coach is the most likely to be subjected to checks, followed by journeys by train. If you travel by car or by plane the chances of a check are far less. We also know that some borders – notably Denmark-Germany, and
Italy-France and Italy-Austria – seem to be subjected to more checks than others. The Free Movement website hence aims to amass the experience of travellers crossing borders to better determine where controls do still take place, and to present this data to the European Commission to ensure that Member States are held to account. The Commission cannot itself check whether Member States are correctly applying EU law at each and every single border, but citizens crossing borders and documenting their experiences should be able to provide considerably more data on what is happening on the ground. There are two types of controls to watch out for. The first is a border control dressed up as an identity check. Here a police officer typically asks for a traveller to show their passport. The first question to ask the officer is if the check is a border control (not allowed under Schengen), or an identity check. If the response is the latter, then the officer is exceeding his or her powers by demanding a passport – any means to prove one’s identity should be adequate. An EU photocard driving license should be adequate. The second type of common control is a border control dressed up as a customs check. Here the officer will say he or she is a customs controller, will ask for identity documents, and then may pay cursory attention to the luggage you are carrying. Free movement within the EU, and the removal of borders within the Union are beautiful things. It is time people who think the same do something to help make sure it stays that way!
Jon Worth writes about Europe and more at www.jonworth.eu
Deutsche Bahn Europe’s largest railway company. When it crosses borders what happens? Jon Worth digs deeper into Schengen. |EPA/OLIVER BERG
Schengen II: an update
On 9 April the Irish Presidency was part of events that the European Commission has said will launch the second generation Schengen Information System (SIS II). SIS II is a large scale EU database which facilitates the exchange of alerts and information and biometric data relating to wanted persons, general criminal activity and stolen property such as vehicles, firearms, banknotes and industrial machinery, between police, borders and customs authorities across Schengen Member States. The new system and EU procurement process to upgrade SIS 1+ to a new version SIS II which had serendipitously commenced under the previous Presidency in 2004 has the capacity to contain up to 70 million alerts, will help maintain public security while also facilitating the free movement of people within the Schengen area. “The new Schengen Information System, known as SIS II, improves the functioning of the current system but more importantly it adds significant new capabilities which will assist and enhance information exchange between law enforcement and border security authorities across the Member States,” Irish Minister for Justice, Equality and Defence, Alan Shatter TD said. The new system reports the Irish Presidency, is said to improve upon the current Schengen Information System, allowing for the exchange of alerts on additional objects including for example boats, containers, industrial equipment and securities (cheques,
credit cards, bonds stocks and shares). The system will also allow for the creation of links between related alerts which was not possible under the previous system. The information obtained is used in particular for police and judicial cooperation in criminal matters as well as for control of persons at the external borders or on national territory and for the issuance of visas and residence permits the Presidency said. “The Schengen Information System is an indispensable component of the Schengen free travel area facilitating the application of the provisions on the free movement of persons and ensuring a high level of security across the area. I am delighted that the Irish Presidency was in a position to contribute
to the completion of this important project,” Minister Shatter said. The second generation of the Schengen Information System, SIS II, entered into operations on 9 April, 2013. This will benefit police and judicial authorities in the 28 participating Member States as over the course of the day, national police systems in each of the participating Member States will switch over to SIS II. In the last three months over 47 million records relating to stolen objects and wanted and missing persons have been migrated to the new system in preparation for switchover. From now on, police systems in each of the Member States will now communicate directNE | AP ly with the new SIS II system.
28 April - 5 May, 2013
The Minister pictured far left (here with her ASEAN colleagues) talked with New Europe on cooperation with the EU, trade, fisheries, and the WTO while in Brussels recently. |EPA/BERNAMA
Recently New Europe had the opportunity to speak with Dr. Mari Elka Pangestu, Indonesian Minister for Tourism and Creative Economy, former Minister for Trade and candidate for the election of the next Director General of the World Trade Organisation, the interview follows below... What are the priorities that the WTO will be focusing on in the next few years? In an increasingly complex world we need to make sure that we have confidence in a global trading system, we need to set clear rules and thanks to this we will have growth, more jobs and a reduction of poverty for both developed and developing countries. I strongly believe that is the way and we should continue in the direction of a multilateral trading system not forgetting that the role of WTO is very important. Within that role then I see three priorities, one is to make sure that the rules framework and the disputes could have formal procedures that should continue to be strengthen, second, complete the multilateral negotiations and last point, because trade is so dynamic, the last ten years we had so many issues that affected trade like for example trade and investments, trade and environment, increase of bilateral and regional agreements; the WTO has also to begin to address all these new issues.
How do you see relations with the EU? We have good relations with the EU and have developed a number of frameworks to deepen our relations including a potential bilateral FTA. We started to talk about this agreement when I was Minister for Trade then I met Commissioner De Gucht in early February, we discussed about this agreement and we all hope to announce the beginning of the negotiations hopefully this year. I also met MEP Moreira, chair of the trade committee in the European Parliament and we discussed the European idea of a multilateral trading system. Then we spoke also about the import effective aids for trade which is something that is already practised in the EU context because you have this quite long experience with developing countries. Are there any topics of concern for Indonesia on trade with the EU? We have been discussing standards and environmental CO2 emission standards which affect our exports but having talked about it, we have understood the standards required. We’ve also talked about some aid for trade and some capacity building then we can resolve that. Continuing on the topic of trade relations with the EU, what are the most important sectors that are at the top of
your promotion strategy?And, what role can your country play in the region? We push a lot on palm oil, fishery and wood sectors and we hope to attract more and more investors from Europe. Then our companies are also learning how to meet the new EU standards. On the manufacturing side Europe has a comparative advantage on manufacturing technology and this is also an area where we hope to get increase EU investments. Now the EU investment are mainly on infrastructures, pharmaceutical and automotive while at the moment Germany and France are the biggest EU investors. Finally we would like to see more SME because in Europe you have very specialized SME in various technologies and Indonesia is a very large country which is growing very fast now, by 2030 our middle class will be 100 million and we will need a lot of consumer products. To attract investors we worked a lot on cutting the time for you to start a business and for certain regions and certain sectors we can give tax incentives, for example outside of Java, because we would like to have a more equal distribution. About the role of Indonesia in ASEAN we are going to try to achieve an economic integration in 2015 then we have bilateral FTA or comprehensive partnerships with Japan, Korea, China, India, Australia and New Zealand.
This week U.S. Secretary of State John Kerry visited Brussels to host talks with NATO on the situations in Syria and the Middle East. The purpose of the discussions was to “not necessarily, or in fact not anticipated to make decisions with operational consequences with regard to what’s going on in this part of the world, but to
Kerry hosts NATO talks in Brussels
have an opportunity to discuss the major security challenges that each and every one of us face, an opportunity for countries to share information, to share ideas as best they can,” said a senior state department official. NATO remains the only forum in which the United States, Canada and European allies discuss such security concerns.
Russian Foreign Minister Sergei Lavrov joined the Syria conversation, an issue where Moscow and Washington fail to agree on a roadmap for conflict resolution. Kerry pushed Russia to pressure Syrian President Bashar al-Assad to step down, but Lavrov stood by the view that the decision and subsequent action for change lies with the Syrian people.
If anyone feels like debating this column, then please refrain; any letters to the editor, any comments posted on message boards, any other communications sent electronically or otherwise to this organ will be summarily ignored. This is not a platform for constructive dialogue. This is about abortion. If the above disclaimer was issued with all seriousness by, say, a local government health board, or a campaigning political party, there would be outrage; not only through the dogmatism of the opening couple of sentences, but also through the appended words. If those words were changes, to say, “a women’s right to choose,” then the whole paragraph becomes one of obvious irony; the contrast of coercion and choice. But that is the apparent dilemma of the Irish government; the age-old fate of suffering the fate that those who conceive of an issue through either strength or weakness seemed doomed to suffer. Someone, somewhere, will be hurt. And that hurt will recur to punish the lawmakers. The Irish government, a coalition between the centre-right Fine Gael and the centre-left Labour Party, is currently preparing a draft law on abortion, brought on largely through public pressure owing to the high profile death of Indian dentist Savita Halappanavar, who died after being refused an abortion at a hospital in Galway in October 2012 – despite the fact that it was seemingly the only action available to save the life of the mother – on the grounds that such a procedure could not be carried out as Ireland “is a Catholic country.” There followed much public and media discourse, prompting government action; but seemingly the lawmakers are split. This shouldn’t come as too much of a surprise, abortion is a sensitive and divisive topic. Over the past couple of decades, since the Maastricht Treaty in 1992, and in subsequent referenda on Europe, it has emerged as a canvassing topic, a fearful minority insisting that EU laws will overtake Ireland’s and liberalise existing legislation. The government want swift movement on the issue. The Minister for Health, James Reilly, is pushing for the protection of maternal health bill to be passed before the summer recess. For its part, the government needs to work within tight constitutional boundaries; anything beyond that would put the question to a referendum. The particular sensitivity is that of suicide risk. Media reports suggesting that women would have to be interviewed by six psychiatric experts to determine whether or not a termination could be carried out on grounds of such a risk have been denied by Reilly, it may violate a 2010 European Court of Human Rights ruling, and such an inquisition would lead to further distress and trauma. One of only three perinatal psychiatrists in the country, Anthony McCarthy, called the idea “a sick joke.” However, the workability of the legislation depends on overcoming this difficult issue; the proposed law does not seek to liberalise abortion law, simply “clarify” it, give minor extensions where there is a threat to the women. The case of Savita Halappanavar highlighted in a tragic way how legal uncertainty constrains doctors from giving the best care to women in need of urgent assistance. For years women have been travelling abroad, to England mainly, to have terminations denied to them in Ireland, sometimes been restrained from travelling if discovered. Even without women having to face a panel of doctors, obstetricians and psychiatrists, this practice is unlikely to cease. The proposed law seeks to limit abortions to women at risk of suicide. But with its emphasis on risk assessment and insistence on elongated examinations of the woman designed to appeal to all sensibilities, it instead leaves a stigma; not just that of unwanted pregnancy, but also of mental health. Concordia
Energy & climate
28 April - 5 May, 2013
he chief executive of Russia’s largest non-state oil producer, Vagit Alekperov, said LUKoil has increased its 2013 investment programme and hydrocarbon production forecast following the acquisition of upstream assets, Russian media reported on 23 April. Planned investment has been increased to $20 billion from $16 billion while hydrocarbon production is seen rising 3% versus an earlier forecast of 1.5-2%, Alekperov said. In 2012, LUKoil invested $12 billion. Earlier in April, LUKoil acquired small Russian producer Samara-Nafta, which is currently producing 50,000 barrels of oil equivalent per day, for $2.05 billion. Alekperov said the deal was expected to close on 26 April. “We’ve made a big acquisition, approved a three-year programme, and, under any oil prices, we will not do two things, which is to lower dividends for our shareholders and (lower) investment programme,” Interfax quoted Alekperov as saying. LUKoil has been struggling to stabilise production in Russia and has been aggressively acquiring upstream assets abroad, including Qurna-2 oilfield in Iraq. On 24 April, Alekperov said LUKoil expects to produce around 150,000 barrels of
LUKoil raises output forecasts, bets on Iraq
oil per day from the West Qurna-2 field by January. Alekperov travelled to Iraq in January to discuss output from the West Qurna-2 field. Alekperov said development plans were moving as expected with major developments forecast by 2014. “The programme of developing the oilfield infrastructure is proceeding according to schedule and work is ongoing at all the sites,” RIA Novosti quoted him as saying. “From 1 January, we will be ready to produce 150,000 barrels per day.” The West Qurna complex is near the Iraqi port city of Basra. The field is estimated to hold as much as 14 billion barrels of recoverable reserves, making it among the largest undeveloped fields in the world. LUKoil will invest $1 billion in 2013 to start first production from the green field, located in the Basra governorate near the Iranian border. Last year the company invested a similar amount, putting total investment in the field by the end of this year at $2 billion. LUKoil had said that it would invest a total of $30 billion to upgrade the field. To date the company has drilled eight production wells and is planning to drill another 27 wells this year, LUKoil said, adding that four rigs are drilling in the field.
Iraqi soldiers stand guard near the second refinery for crude oil in Baiji refinery, Baiji, 180 kilometres north of Baghdad, Iraq, 21 March 2011. Russia’s LUKoil has been struggling to stabilise production in Russia and has been aggressively acquiring upstream assets abroad, including Qurna-2 oilfield in Iraq.| EPA/STR
In January, LUKoil signed a supplementary agreement with Baghdad to reduce the project’s target production and prolong its duration. The agreement also put on record the transfer to LUKoil of Statoil ASA’s participation interest of 18.75% in the project.
LUKoil has increased its stake in the West Qurna-2 project in Iraq to 75%, following last year’s withdrawal of Statoil. Iraq’s stateowned North Oil Company owns 25%. Operator LUKoil and Statoil were awarded the technical service contract at West Qurna-2 in December 2009.
On 26 April, Eurostat said energy generated from renewable resources in 2011 increased to within seven percentage points of 2020 targets. Eurostat reported that renewable energy resources contributed 13% of the gross energy consumption from the 27 members of the European Union. That’s up from 7.9% in 2004 and 12.1% in 2010. EU members are committed to getting 20% of their energy from renewable resources by 2020. Sweden led the way in 2011 with 46.8% renewable energy generation, though almost
EU closer to 2020 green targets but more needs to be done
all of the member states increased their share of green energy, Eurostat reported. On 24 April, the European Commission said the governments of the Member States must modernise their electricity grids and remove investment barriers to meet the 20% target for renewable energy use in 2020. While the 27 EU member countries are currently on track to achieve the 2020 renewable energy goal, many risk falling behind in the coming years without more effort, the Commission warned. “There are reasons for concern about future progress: the transposition of the directive has been slower than wished, also due to the current economic crisis in Europe,” the Commission said in a statement. The Commission said it hopes to see the 2030 climate and energy targets legally adopted by 2015, following elections to the European Parliament in 2014. But environmental campaigners said the proposed targets were too low, and urged the European Union to commit to up to 55% cuts in carbon emissions by 2030. Meanwhile, the US Energy Department’s
Energy Information Administration reported that global oil consumption for countries other than Iran was 85.8 million barrels per day for the March-April average. That’s up from the 84.7 million barrels per day year-on-year. European members of the Organization of Economic Cooperation and Development saw their consumption decline by 300,000 barrels per day during March-April year-onyear. The International Energy Agency said two weeks ago the global economy isn’t much clean than it was 20 years despite gains made in renewable energy, however.
Gas companies to develop carbon neutral gas supply by 2050
During Gas Week in the European Parliament on 24 April, gas infrastructure companies France’s GRTgaz and Swede’s Swedegas joined the initiative by Dutch Gasunie, Denmark’s Energinet.dk and Fluxys Belgium to deliver a carbon neutral gas supply by 2050. In signing the common commitment, the companies agreed to work together across borders in order to exchange knowledge and best practice on ways to develop a 100% carbon-neutral gas supply by 2050, in line with the EU energy and climate goals, the companies said in a press release. Philippe Boucly, CEO of GRTgaz stated: “Gas infrastructure has a key role to play to support the energy transition and the development of renewable energy. The current French energy transition debate is an opportunity to increase political and public awareness of the benefits of gas and the role of the gas infrastructure in a low carbon economy. We see a clear potential in ensuring that we exchange ideas and knowledge with our partners.” Lars Gustafsson, CEO of Swedegas commented: “Signing the Green Gas Commitment is in line with our sustainable investments for the future. We aim to find synergies between our existing gas grid and new technologies such as Power to Gas. We also see this commitment as a possibility to stimulate large scale production and distribution of biogas through a wider European collaboration.” Walter Peeraer, CEO of Fluxys Belgium stated: “We are delighted to include GRTgaz and Swedegas as strong partners in our cooperation. We have taken upon ourselves to develop a 100% carbon-neutral gas supply by 2050. This is a huge task, and cooperation across borders will help to ensure that we learn from each other and for each of us to find the path that is best suited to our market.” Paul van Gelder, CEO of Gasunie: “Natu-
ral gas is the ideal partner of renewable energy. Gas and gas infrastructure have unique properties to maintain the balance between the energy consumption patterns on the one hand and the volatile, unpredictable supply of renewable energy sources on the other. Moreover, relatively clean gas contributes to achieving European climate goals.” Peder Østermark Andreasen, CEO of Energinet.dk: “We are committed to develop a green energy infrastructure. And the best and most efficient way to do this is through European cooperation. This is why we value this partnership.”
28 April - 5 May, 2013
Energy & climate
By Kostis Geropoulos
Rosneft expands, inks LNG agreement with Marubeni
ussian oil major Rosneft and Japan’s Marubeni Corporation have signed Memorandum of Co-operation in Liquefied Natural Gas (LNG) project implementation and joint exploration and development of oil and gas fields. Rosneft President Igor Sechin and Marubeni President Fumiya Kokubu signed the Memorandum, which foresees possibilities for co-operation in implementing the LNG project in the Russian Far East, which includes engineering and construction of LNG plant, financing, transportation of LNG including operation of tankers, supply of equipment and machineries, marketing of LNG to Japanese utilities. The document signed also envisages joint study of possibilities for co-operation in exploration and development of oil and gas fields at Rosneft license areas. “We are glad one of the leading Japanese companies has decided to join our plans to explore and develop oil and gas fields as well as implement the LNG project in the Russian Far East. Agreements reached today are aimed, among other things, at ensuring sales market in Japan, which will strengthen Rosneft positions at the promising Asia-Pacific market,” Sechin said. For his part, Marubeni’s Kokubu welcomed this Memorandum of strategic alliance with Rosneft on the LNG project in the Russian Far East, including exploration and development of oil and gas fields. “We are committed to exerting our best efforts for success of the project with Rosneft in the area including marketing, financing, transportation and engineering, procurement and construction. Success of this project will surely contribute to security of energy supply not only for Japan but for entire Far East Asia region,” he said. Rosneft hopes that the Russian government will liberalise the market for LNG for Asian markets. Gazprom operates Russia’s only LNG plant at Sakhalin Island on the country’s east coast. Gazprom officials met last week with Japanese officials to discuss the Vladivostok LNG project
The headquarters of Russia’s state oil company Rosneft in central Moscow, Russia.|
planned for Russia’s eastern shores. “Rosneft will be interested in the markets where it can create value, so far we can see this value creation particularly in Asia,” Chief Financial Officer Svyatoslav Slavinsky said. Rosneft has also teamed up with ExxonMobil to build a $15 billion LNG plant in Russia’s Far East by 2018. On 23 April, Sechin told reporters that Rosneft is also considering teaming up with ExxonMobil in tapping oil and gas in Iraq. “We will work with anyone who offers good terms, we’ll work with ExxonMobil too,” he said, asked who might partner Rosneft in Iraq. He also said that a delegation from Iraq’s oil ministry will come to Moscow on 10 May. “The ministry of Iraq will come to Moscow... by our invitation to work with us,”
he said. Rosneft has been expanding and bought Anglo-Russian oil company TNK-BP from BP and the AAR consortium of Soviet-born tycoons for $55 billion, clinched deals with international majors to tap Russia’s Arctic hydrocarbon reserves, and acquired domestic gas producer, Itera. Rosneft aims to more than double its share of the domestic gas market by 2020, the company reportedly said in a presentation to investors in London. Rosneft aims to increase its share of the domestic gas market from 9% to 1922% by 2020. It expects to produce more than 40 billion cubic metres in 2013, over 60 by 2016 and 100 billion cubic metres in 2020, of which more than half is to be produced at newly-acquired projects.
On 25 April, Serbian oil and gas company Naftna Industrija Srbije (NIS), affected by falling oil prices and higher taxes, said its net profit in the first quarter of 2013 was flat at 8.3 billion dinars (€74.7 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) were down 22% through March to 12.1 billion dinars,
Serbian NIS says net profit flat in Q1
NIS said in a statement. NIS is controlled by Russia’s Gazprom Neft. NIS said its performance in the three months through March was affected negatively by a decline in hydrocarbon prices, an increase in value added and income tax, and a drop in consumption on the domestic market caused, among other factors, by a hike in excise
duties on petroleum products. “Unfortunately, the negative external factors had a serious impact on NIS’s business results,” Bloomberg quoted CEO Kirill Kravchenko as saying. “Already today we understand that it will be a very difficult task to maintain the company’s financial results at last year’s level.”
On 3 May, Ukraine and the EU are expected to hold a roundtable in Brussels regarding further development of the Ukrainian gas market. The roundtable, which will be chaired by EU Energy Commissioner Günther Oettinger and Ukraine’s Energy Minister Stavytsyi, is expected to discuss the modernisation of the Ukrainian gas transportation system or GTS and the establishment of the Eastern European gas hub in Ukraine. Most of the leading gas companies, including Russian gas monopoly Gazprom have been invited. However, Olga Shumylo-Tapiola, visiting scholar at Carnegie Europe in Brussels, told New Europe that Ukraine and the EU have different expectations. “The EU expects Ukraine to reform and for that it’s interested in getting engaged with Ukraine be that modernisation of Ukrainian gas transit system or reform of energy sectors as such. Ukrainians, when they think of EU engagement, they want support with the negotiations with Russia over gas price, full stop. I don’t think that Ukrainians are interested in having the EU as part of the trilateral consortium of management of gas transit system,” Shumylo-Tapiola said. If the modernisation of Ukraine’s gas transit system proceeds, the EU would be a facilitator for European investors to join the process. Shumylo-Tapiola said she doubts the Ukrainian side is interested in modernisation now. “I think they want short-term solutions, reverse gas from the EU for instance. They want to give Shell some access to drill in Ukraine,” she said. Balazs Jarabik, from the European Council on Foreign Relations, told New Europe that 50% of the gas which stays in Ukraine is used for households and is controlled by the oligarchs. “Based on this, I do not believe that oligarchs would be willing to give control of the pipelines to Russia,” he said. Now regarding the modernisation of the pipelines, there is a geopolitical game, he said, adding that Russia is willing to build more pipelines dispatching Ukraine. The government of Ukrainian President Viktor Yanukovych government is also taking the steps to diversify the country’s gas resources, especially looking to tap into shale gas. “But this is also a dangerous game on the other side if the Russians are really building the pipelines they promised to because then the Russians can cut the gas for Ukraine without endangering Europe,” Jarabik said. He said Ukrainians should have an interest in the modernisation of the GTS. “But given these geopolitical games, unfortunately I see little practical possibility that the Ukrainian government will actually do it,” he said. “Russia is deliberately selling Belarus for the Customs Union membership very cheap gas, signalling to Ukraine this is what you can get. So there is an incentive to the Ukrainian side not only the modernisation but the cheap gas. So far the elite are very clear that they do not want to do this with Russia. But the question is whether the economic situation is going to force them to do it, what will they do,” Jarabik said. Shumylo-Tapiola said she doesn’t think the Ukrainian President is interested in Customs Union in the first place and that the price of cheaper gas in return for membership in the Customs Union will work for Yanukovych at least for the next two years. KGeropoulos@NEurope.eu follow on twitter @energyinsider
EU, Ukraine play each other on pipeline
28 April - 5 May, 2013
Strengthen mutual trust as the fundamental basis for China-EU relations
President of the European Council Herman van Rompuy (L) shakes hands with Chinese Premier Wen Jiabao in Beijing, China, 17 May 2011. Van Rompuy is on an official four-day trip to China.
By H.E. Mr. Wu Hailong H.E. Mr. Wu Hailong, Ambassador of the People’s Republic of China to the EU
n the course of last 38 years since the establishment of diplomatic ties between China and the EU, especially over the last ten years of our experience as comprehensive strategic partners, China-EU relations have been constantly evolving towards maturity, extensive reach, and intensive interdependence—a result of our relentless efforts to constantly top differences with trust. The story of China-EU relations tells the paramount significance of deep mutual trust for the stable and sustainable growth of a relationship. Mutual trust comes from knowing and understanding the other, and develops and consolidates as we support each other over time. On the part of China, we have always supported Europe’s integration and its aspiration to play a significant role for global peace, stability, and prosperity. Over the years, China has remained steadfast and true to our position of supporting Europe, in its good days and bad days regardless. Par-
ticularly since the outbreak of the debt crisis, when in recent years pessimistic voices against European integration and the Euro have permeated widely, China has held on its confidence in the EU and has provided assistance to Europe in a measure fair to its own strength. Down the road, China will continue to support European integration and the EU’s efforts to address the crisis and to play a bigger role in international affairs. Mutual trust can be found in many areas of cooperation between China and Europe at multiple levels. There is enormous diversity among EU member states. Such diversity, coupled with the different backgrounds of China and Europe, has minted our relations as diverse and multi-tiered. In my view, China-EU cooperation proceeds at various levels. Efforts at these levels complement and reinforce each other. Therefore stronger co-operation at these three levels is conducive to promoting the size and quality of China-EU cooperation, realizing comprehensive and balanced growth of our relations, and helping Europe address the current difficulties. The Chinese side views the EU institutions as a high achievement of European integration, and always approaches it as a key platform for China-EU relations. We attach great importance to the active role of the institutions in coordinating EU’s China
policies and in facilitating China-EU cooperation, and are making constant efforts to maintain with institutions sound communication and cooperation. Member states are important in the delivery of the co-operation agreement reached between China and the EU. In China, we view our relations with member states as a key basis for the overall China-EU relationship. Each EU member states have unique national conditions with respect to natural resources and economic and social development. As a result, the focus and needs of each member states vary in their cooperation with China, a factor that we take into thoughtful account when conducting co-operation with member states. With the changes taking place in the global landscape, more and more EU member states have begun to demonstrate similar needs and interest in their cooperation with China. This trend has created potential for China and Europe to carry out cooperation. Through our practical experience of ongoing cooperation between China and central, eastern, and southern Europe, we have learned that such kind of cooperation can meet the demand of both sides and can ensure faster implementation as it effectively mobilizes and incentivizes the public, social and private sectors to work together. The cooperation between China and member states across Europe is transparent,
open, and inclusive. Such cooperation is an integral part of the overall China-EU relations, and is, in its essence, a kind of extension and in-depth development of China-EU cooperation, serving the interest of not only member states but also the Union as a whole. We are confident that by growing cooperation at all levels, we can add more substance and avenues to China-EU cooperation and make it broader, deeper, and more solid. Mutual trust is also encapsulated in the proper management of differences. Due to our different national condition, development level, and choice of development path, China and Europe have different perspectives on some problems. In the future, we will continue to view and handle these issues comprehensively with reason and objectivity, and continue to use dialogue and cooperation to remove misgivings and build trust. China and Europe are now presented with wonderful new opportunities to grow our ties. The two sides are now working actively on a medium- and long-term plan of co-operation. I strongly believe that following the spirit of equality, mutual trust, cooperation, and win-win, China and Europe will produce a new chapter of mutually beneficial cooperation. Some quotations were used by China Daily going to print on April 26 with permission from New Europe.
28 April - 5 May, 2013
Not waving but drowning
By Andy Carling ony De Brum thought he had seen the worst that could happen to his Pacific island home at nine years of age, when he witnessed an atomic bomb test. He was wrong. With an altitude of just two metres, the Marshall Islands are expected to disappear under the ocean in the near future because of climate change. The only thing that can prevent this is immediate and comprehensive action on a global scale. Tony De Brum is not a happy man. Speaking to New Europe in Brussels, in his capacity as the islands equivalent of VicePresident, he praised the support Europe has given to their struggle for survival and argues that the islanders are doing all they can, by working internationally and trying to switch to green energy, but says the world is not acting swiftly enough and sometimes appears callously indifferent to their fate. This indifference is not new notes De Brum, “The fact that things have gotten to this point almost certainly reflects a lack of vision, a failure of diplomacy, and a failure of leadership.” As a child De Brum watched as the Castle Bravo test unleashed a 14 megaton explosion, more than double the expected amount, leaving a kilometer wide crater. The island politician remarks that the total yield of all the tests in the Marshall Islands is the equivalent of 1.6 Hiroshima bombs going off every day, for twelve years. De Brum, like many islanders, is part of a large extended family, saying that he has almost a hundred nieces and nephews, but “it’s getting increasingly difficult for me to explain to them what we are doing. It’s happening now. We are seeing islands disappear as we speak. We are seeing 17 of our 24 isles in severe drought conditions that even people of my generation have not seen before.” They are doing what they can, trying to engage with global leaders and regional partners and advocating a rapid switch to green energy. But what is very real to him is not to others, “What is difficult to understand is the slowness and reluctance of our development partners to understand this is an issue for now and the ways of preventing it must be undertaken now.” He adds, “We are trying to get the word out that this is a clear and present danger.” He is clearly uncomfortable with their only option, abandoning their home. De Brum says, “The Marshall Islanders have been displaced and moved around a lot over the last 150 years, for one reason or another, whaling, arguments between the powers, world war one, world war two, the Korean war, the nuclear testing programme. All of these have resulted in our people being moved around. “Displacing people is not a pleasant op-
Marshall Islands VP demands action before islands sink under rising seas
Undated photo shows a missile being laucnhed at Kwajelein atoll on the Marshall islands. | US NAVY
tion for us to consider. We try to work as hard as we can to avoid that eventuality but we have to prepare and prepare our people for that eventuality. “Part of the issue with displacement, is when you’re talking about moving people from the Marshalls, many of our friends in America will say ‘pick up those 60,000 and put them in Wyoming, Idaho, Arizona or something and the problem is solved.’” This approach is offensive to the Pacific politician, “There is no attachment to the country, the tradition and culture, the language of the people. There is this very cold, steely approach that says ‘why are we concerned about spending billions of dollars to adapt and mitigate when we can spend a few hundred millions on displacement of the people and put them somewhere else?” Displacement, an innocuous sounding word, means something different to the islanders, it means the end of their independence and sovereignty. “There is some buying of land in the mountains of Fiji, thinking we can move there. It’s all fine and dandy, but who’s going to be responsible for your economy, for your constitutionally mandated healthcare and education? Nobody is thinking about this. Everyone is thinking on what is easiest for the metropolitan powers to do, rather than what is the right thing to do for the existence of a people.” It’s clear that this is a grave concern for the island’s leaders, “During the time of the nuclear tests, people were just picked up and put on a navy ship, sometimes before the tests, sometimes afterwards. They seem to think they can still do that now. I’m sorry but we are an independent sovereign country, we are members of the United Nations, we can partner up with anyone we please, including the EU.” Asked if this brings back colonial memories, De Brum replies, “It is just as colonial as thinking they can come and take over our country. It’s the same thing in reverse.” He continues by comparing past and current danger, “There is a parallel with the atomic testing. We had nothing to do with the
atomic bomb, the hydrogen bomb. These people came to tell us that we should be part of the security of the world, we should allow testing of these ‘weapons of peace and security’ so the world can be a safer place, so we did. “Now they’re saying ‘Well in order for us to survive we need to pollute to make the seas go higher, but we’re not taking responsibility for it, they won’t even talk about ‘loss and damage’ we will do what we please.” Europe, however, has been a strong and reliable ally, “Many people raise their eyebrows and say that why is the pacific so engaged with the European Union? We’re engaged in projects, we’ve been engaged with them far more than our American partners.” There’s a reason for this engagement with Europe, “The Americans have so much to learn about climate change. There are a lot of problems with getting the American leadership to acknowledge there is a problem. The EU can do a lot. Many of us have European, not just in the Marshalls, but all over the Pacific and we work with those other islands and we will go wherever to find solutions. We have had some good successes partnering with Europe and we will continue to work together.”
ARTS & CULTURE
28 April - 5 May, 2013
Silence is Sexy: 19 May, 17:00, Ancienne Belgique
By Andy Carling t the cutting edge of modern classical music the sound of silence is making a noise. As contemporary classical composers begin to merge with modern electronic, taking influence from Brian Eno and his ambient music, a new form is being invented and reinvented. As Marcel Marceau said, “It’s good to shut up sometimes.” The Ancienne Belgique has also been reaching out beyond expected boundaries by holding a series of events under the banner, ‘Silence is Sexy’ where the new composers are welcomed to Brussels. The next event is on 19 May in association with leading UK music and culture magazine The Wire, author Louise Gray will present a primer on one of the most influential and experimental modern composers, John Cage, who is credited with reviving modern classical music. Cage, who passed away in 1992 at the age of eighty, is best known for his 1952 composition 4’ 33” which was entirely silent, but Cage later said it was his most important work. The
The quiet revolution
piece, written “for any instrument or combination of instruments” instructs the performer not to play at all, the work is the ambient and background sounds of the environment in which the piece is performed. The piece therefore is different every time it is performed and rewrites the definition of what music, or a performance is. Gray will take the audience through Cage’s work and meaning, including his musings on chance, he frequently used the Chinese divination text, The Book of Changes, or I Ching to help make compositions, being part of the composer’s journey into Zen Buddhism. After the talk, the audience will be uncaged and go to the main hall to hear two upcoming new composers, Nils Frahm from Berlin. He has brought out several recordings of his solo piano work, winning praise from critics and Radiohead, whose Thom Yorke is an admirer. The other is classically trained Ukranian, Lubomyr Melnyk who has pioneered ‘continuous piano music.’ He is influenced by minimalism and composers like Steve Reich, but has also been praised as one of the fastest pianists in the world.
Brian Eno pioneered and popularized ambient music.|
BELGA PHOTO LAURIE DIEFFEMBACQ
Accompanying the evening will be a special guest, Gregory Euclide, an American contemporary artist, best known for his work for the cover of Bon Iver. Euclide’s works explore ideas surrounding nature and the human experience, they remain void of the human figure; according to Euclide, “When you see a human figure you identify with the form, what they are doing, and that becomes the emphasis. By showing just the land without humans I’m able to show it as it is and what they’ve left behind.” Also working as a teacher, Euclide created beautiful detailed temporary artworks on blackboards, for relaxation during his 25 minute lunch break, while teaching high school students in the Minnesota River Valley, and
then wiped them clean. He wanted to show his students the possible achievements that happen in a short space of time and the impermanence of existence. “In our culture, there is a strong emphasis on reproduction and the original seems less important. My students were shocked when I would erase the original, because they saw it firsthand, and they were disturbed that it was destroyed. People who do not see the original have no problem only looking at it on a screen or as a print, but once you see the original it is hard to let it go or believe that it could be destroyed.” Euclide will be creating an artwork based on the music played in the evening.
2 3 5
The KLF: Chill Out (1990) The electro-pop funsters and terrorists, KLF released this album when chilling wasn’t really on a lot of people’s minds, but it works as a surreal, slightly disturbing soundtrack to somebody else’s dream. But aimed at a listener feeling the come down after a night of drug fuelled dancing, this album takes a sonic journey through the countryside, to tracks like “Six Hours to Louisiana, Black Coffee Going Cold,” “3AM Somewhere Out of Beaumont,” “Elvis on the Radio, Steel Guitar in My Soul,” complete with heavy samples, this also includes throat singers, a ghostly Elvis, seagulls and sheep.
Five ambient recordings to barely listen to
Max Richter: The Blue Notebooks (2004) The German born composer started collaborating with electronic pioneers Future Sound of London in 1996, but it was his second album that brought him acclaim. The notebooks are those of author Franz Kafka, where the young Czech put his private musings. For the recording, they are read by Tilda Swinton, but tracks have also appeared in films, not least Waltz With Bashir, where Richter wrote the soundtrack. Aphex Twin: Selected Ambient Works 2 The cult experimentalist Richard James, the man behind the twin, found an unusual inspiration for many of the tracks on their second, more challenging collection. He says that he heard the music in vivid dreams and he’s come close to painting the sounds as an abstract. There are few beats in the deep, smooth soundscapes here, in the collection that lasts for almost three hours, and there is an edge of craziness, kept in bounds. This is an introduction to a long lasting experimental music, little known in the mainstream. Global Communication: 76:14 (1994) The duo, Tom Middleton and Mark Pritchard have made many recordings under many names but their debut here is a classic modern ambient recording, largely devoid of beats yet is melodic, haunting and unusual. The title of the CD and each track is the song length, the duo not wanting anything to colour the listeners’ interpretation of the music, which is distinct and allusive, sometimes light, sometimes dark. Brian Eno: Music for Airports (1978) The British artist was struggling in Cologne airport for several hours and was disturbed by the noises and acoustics in the building, incidentally designed by the father of Florian Schneider from Kraftwerk. He developed the concept of the album and made it using very few notes and long tape loops, which created a variable sound and the first deliberately ambient record!
EU Children of Peace
european union: recipient of the 2012 nobel peace prize®
The EU supports education projects for children in conflict.
ally and as a body. Painting plays a prominent role in Michon‘s work: he has, for example, written some excellent short stories about the lives of artists such as Watteau, Goya, and Van Gogh. His novel, Les Onze (The Eleven, 2009) is in fact, his twelfth book. The story of a young artist’s rise to becoming client of Louis XIV’s mistresses and
28 April - 5 May, 2013
he paints his most daring work, representing the 11 members of the Committee of Public Safety (including Robespierre and Saint-Just) during the Reign of Terror. Le Nouvel Observateur said, “This book. . . It will bring you to your knees.” Hopefully the evening with this remarkable writer will bring people to their feet, and applauding at the end.
A still from Noreen
Celluloid Celtica The best of Irish short films 29 April, 19:00, Bozar Ireland may no longer be the famed Celtic tiger, but its film makers are showing some of their short films in Brussels. For €6 visitors will get to see eleven films. These films are often filled with big ideas, often more inventive than many full length features. The Pool, from Thomas Hefferon has been shown at 20 international festivals, one of only 3 from 300 scripts funded by Irish broadcasters. It is the tale of three would be boys who break into their school swimming pool and the tension begins to mount until the night changes all their lives. The harsher side of school is the main part of Thirty-five Aside by Damien O’Neill, when a young boy’s mother takes on the school bul-
lies. Noreen by Domhnall Gleeson is another example of the director’s delight in poking fun at the Gardai, the Irish cops, when two of them make a house call. The problem is they are, quite simply, idiots. French class Interview with Pierre Michon 20:00, 7 May, Bozar This is a chance to listen to one of the greatest living French authors being interviewed about his work, and if that’s not enough, Michon is also a bit of a cult. His first novel, Vies minuscules (Small Lives, 1984) is widely held to be a masterpiece of contemporary French literature , consisting of a series of sketches of village inhabitants, it is in the spirit of Turganev and Faulkner. He was won many awards for his work, individu-
Le Stelle Av Louis Bertrandlaan 53, Brussels Tel 02 245 0359 www.stelle.be
When Italian-born Antonio Di Siervi moved his restaurant business across town to Schaerbeek a few years many of his customers moved with him. It is easy to see why. This is a wonderfully atmospheric restaurant, unquestionably serving some of the best Italian/Belgian cuisine in town. Situated on one of the area’s most beautiful avenues, it boasts a particularly pleasant 70-seat garden terrace and BBQ, ideal for the recentlyimproved weather (booking is advisable). The very friendly Antonio (who also owns Osteria delle Stelle, the delightful adjacent brasserie) and Gorge, his Portuguese chef serves up some terrific food, such as black truffle, directly imported from Umbria, a crayfish/mushroom ravioli and linguine with scampi. The pasta and bread are homemade, there’s a great wine list and Antonio, who started in the business at the tender age of 15, even got an award from Italy’s president for his authentic products. The walls are lined with photographs of some of the many VIPs who have dined here, including Herman Van Rompuy and Guy Verhofstadt. They clearly know a good thing when they see it. Stelle means star, which, given the quality of food and service here, is quite appropriate. Highly recommended.
28 April - 5 May, 2013
Arts & culture
n exhibition of 200 photographs featuring the masters of early cinema at work in their respective cities, including Abel Gance, Jean Renoir, Rene Clair, Erich von Stroheim, D.W. Griffith and Cecil B. De Mille. The Fellini Foundation for Cinema of Sion (Switzerland) in partnership with the Cinémathèque française (Paris) and the association Cinéma s’expose (Paris) are presenting in Sion an extraordinary exhibition. Focusing on the three film capitals of the first two decades of the 20th century, Paris, Berlin and Hollywood, a new exposition at the Cultural Center of the Fellini Foundation in Sion, Switzerland, highlights the impact of European directors and technicians on American cinema. Through an incredible collection of two hundred rare vintage photographs, discover
19.04 - 18.08 2013 Sion (CH)
the legendary studios and film sets from the time when Paris, Berlin and Hollywood were the three most important centres of cinematography. During that period, the transformation from silent to sound films took place and many significant techniques were developed, but the actual atmosphere of the film shoots still remains a mysterious and intriguing element in the history of cinema. Immerse yourself in the world of black and white films from 1910 to 1939 with these captivating photographs of filmmakers, actors, cameras and equipments. Thanks to the partnership with Loubeau brothers with its fabulous collection of 80.000 items, the exhibition will also present the original Universal camera used by Buster Keaton. The Fellini Foundation for film, established 2001 in Sion, owns the largest collection in the world related to Federico Fellini and thousand other directors. These 15,000 documents, including drawings, photographs, scripts, letters, posters, artifacts, costumes, production stuff and press releases, were presented in fifty exhibitions and events in Paris (Galerie Nationale du Jeu de Paume), Rome (Macro), Venice (Palazzo Benzon), Milan (Gallery Cartiere Vannucci), Madrid and Barcelona (la Caixa Centres), Moscow (House photo), New York (Center548 ), Toronto, Rio de Janeiro and Sao Paulo (Instituto Moreira Salles), in Switzerland, Lausanne (Musée de l‘Elysée) and Sion where the foundation is based and has its cultural center. The Foundation has edited 25 publications including two books and monographs published by Gallimard in Paris. The Foundation established partnerships with other arts as for example in 2003 with the Bejart ballet which has specially produced a ballet named Ciao Federico for its exhibition Fellini Maestro del cinema which took place at the Palais de “Beaulieu in Lausanne.”
28 April - 5 May, 2013
Apple reports losses for first time in a decade
Profits drop 18% in Q1
pple reported on 23 April its first quarterly drop in profits in ten years, but announced it will raise dividends for shareholders. Between January and march, the tech giant made a net profit of $9.5 billion, in comparison with $11. 6 billion obtained last year. “Though we’ve achieved a credible scale and financial success, we acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012,” Tim Cook, chief executive of Apple said, pointing to strong rivals like Samsung. However, despite losing 18% of its net profit, results were better than analysts expected, due to a big demand of iPhone and iPad devices, which boosted revenues to $43.6 billion.
11_Say_No-UNiTE_Poster_Eng_Hi.pdf 1 11/15/11 3:38 PM
By Nerea Rial
Last year’s revenues were $39.2 billion. According to the company, around 37.4 million iPhones and 19.5 million iPads were sold worldwide in the first quarter of 2013. “We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” Cook said, and tried to calm investors saying that “the most important aspect for Apple will be creating innovative products.” Apple continues to be leader in the mobile market, but its shareholders have been worried that its market share is being hurt by products offered by rivals and that the company lacks of innovation. Consequently, Apple’s shares have been dropping over the past few months. The firm has lost around 40% of its stock market value since September 2012.
JUSTIN SULLIVAN/GETTY IMAGES/AFP
Therefore, Apple has decided to share more of its $145 billion with a new expanded capital plan. The project includes issuing debt
for the first time to fund $100 billion in share repurchases and higher dividends until the end of 2015.
US moves forward with online sales tax
EPA/JOHN G. MABANGLO
he US President Barack Obama has officially backed a legislation that will empower states to tax purchases made through out-of-state Internet retailer. The bill cleared a key barrier in the Senate on 22 April. Senators voted to limit debate by 74-20 and move forward with a final vote on the proposed bill in the Democratic-controlled Senate, which is expected to take place tomorrow. According to Democratic Senator Richard Durbin, there are “businesses all around America on Main Streets and shopping malls collecting sales tax on the things that they sell, competing with Internet retailers who do not.” Jay Carney, White House spokesman, said the legislation would level the field for small businesses and physical retailers that are undercut by online companies. In this sense, major US retailers, such as Macy’s and RILA, as well as governors and mayors, have urged the White House to intro-
duce a bill that is needed to obtain revenues that can be used for education, law enforcement, infrastructure and health care. The bipartisan National Governors Association also supports the tax, and affirmed that treating offline and online businesses in different ways is “shuttering stores and undermining state budgets.” Besides, Amazon supports the bill and hopes to simplify its retail tax situation in the country, where it collects taxes in nine different states. Among its opponents we can find eBay, Overstock.com and the financial association SIFMA, which said the bill could lead to a state-level financial transaction tax and “unexpected” consumer costs. Currently, the law only taxes companies that are physically based in the US. The Senate bill aims to expand this and include sales to people in other states. NR
28 April - 5 May, 2013
By Jennifer Baker
By Nerea Rial
Germany fines Google over personal data collection through WiFi
German privacy regulator fined Google €145,000 for illegally collecting users’ personal data through Wifi networks while updating its Street View service. The regulator also called on European lawmakers to increase fines for violations of privacy laws. Germany’s investigation has lasted two years and, on 22 April, the regulator concluded that Google had “negligently and without authorisation” captured and stored personal information. According to Hamburg’s state data protection agency, Google admitted it collected emails, passwords, pictures and chat protocols from 2008-2010 when using its Street View vehicles. However, the search engine said it never had the intention of store such kind of information and added that it was quickly deleted. Google explained that the the facts can give only one conclusion “the company internal control mechanisms failed seriously.” “The project leaders never wanted this data, and didn’t use it or even look at it,” the company added. “We cooperated fully with the Hamburg DPA throughout its investigation.”
Passenger data plans stymied by LIBE
Camera of a street-view car, used to photograph whole streets | AFP PHOTO DANIEL MIHAILESCU
“In my estimation this is one of the most serious cases of violation of data protection regulations that have come to light so far”, the Hamburg commissioner for data protection and freedom of information, Johannes Caspar, said. The maximum fine possible was €150,000 which was “unlikely to have a deterring effect”, Caspar said, and complained that this amount of money is “totally inadequate for the punishment of such serious breaches of data
protection.” “As long as violations of data protection law are penalized with such insignificant sums, the ability of existing laws to protect personal privacy in the digital world, with its high potential for abuse, is barely possible”, Caspar continued. European regulators are considering to increase the maximum fines up to 2% of company’s annual sales. According to this, Google’s maximum fine in this case would have been $1 billion.
Applications open for living on Mars
Want to visit Mars? The non-profit organisation Mars One gives people around the world the opportunity to travel to the red planet, but under one condition: they cannot come back to Earth. The Dutch company has began looking for volunteer astronauts to fly to Marson on September 2022, landing seven months later in 2023. Their mission will be to stablish a human settlement on the planet. In 2023, the first four humans will land on Mars, and every two years another group will join the colony. “The most significant explanation is that the crew is actually going to stay and live on Mars with the intention to remain there for the rest of their lives”, says a video presentation of the project. For the time being, the company has received more than 10,000 e-mails from people from over 100 different countries interested in participating. In order to finance the project, Mars One gathered with aerospace companies around the world and they confirmed they will supply the required equipment. The organisation highlighted that only private firms are going to contrib-
ute and politics won’t be involved. Also, it has established an application fee of $38, which can vary depending on the country. The first step will take place in 2016, when a communications satellite and a supply mission will be sent to Mars. Then, two years later, a planetary rover will be sent in order to find the best location for the settlement. In 2020, several rovers will prepare living units, life support units and other supplies, for human arrival.
Despite everything seems easy, there are still some questions up in the air. For instance, it’s not clear whether enough money will be collected in time and whether a sustainable system for humans would be ready by 2023. Besides, people will face loneliness, hunger and they will have to take care of sickness and injuries themselves. Even so, first candidates have already posted their video presentations on the site. NR
Thanks to heavy campaigning by privacy advocates, we are all a lot more aware of the value of our information. We are concerned about identity theft, targeted behavioural advertising, tracking and cyber thieves. Yet we had over vast amounts of personal data to companies everyday without question. Airline companies, for example, clearly need our information to offer a service. But how many passengers are aware that in 16 European Union member states, airlines are required to store that data, called Passenger Name Records (PNR), and pass it along to the police if asked. Consider all the information an airline has on each individual passenger: name, age, passport details, home address, credit card or payment details, email, phone number, where they went and when, with whom and for how long. With all this information it is easy to build up quite a sophisticated picture of an individual. Last week the European Parliament civil liberties committee voted against extending PNR sharing to the whole EU. Under the proposed scheme airlines would be obliged to keep records of all their passengers travelling within the EU and to pass that information on to any one of the 27 police authorities if requested. Current agreements with the United States, Canada and Australia use information on passengers traveling across EU external borders to target, identify and block movement of potential terrorists and terrorist weapons, according to the European Commission. Under EU data protection laws, carriers may not transmit PNR data to non-EU countries, unless these countries provide an adequate level of protection for personal data. These agreements are negotiated on a case-by-case basis. But the close committee vote – 30 against, 25, for – has set MEPs at loggerheads. The Greens, the Socialists and Democrats (S&D), the Alliance of Liberals and Democrats for Europe (ALDE) and the European United Left/Nordic Green Left (GUE/NGL) voted against the scheme, while the European People’s Party (EPP) and the European Conservatives and Reformists (ECR) supported the proposal. One of the MEPs who voted down the proposal, Jan Philipp Albrecht said that the system would have led to “mandatory retention and analysis of passengers’ private data, flying in the face of the constitutional presumption of innocence”. Dutch MEP Sophie In’t Veld also praised the decision saying that politicians had put the basic rights of citizens and the rule of law first. But British MEP and rapporteur Timothy Kirkhope, called the vote “irresponsible” and said terrorists, serious criminals and people traffickers could be much harder to track. He accused MEPs of putting “ideological dogma before a practical and sensible measure that would have seriously assisted our fight against crime and terror”. “The only winners from this vote are the terrorists, serious criminals and people traffickers,” he added. But GUE/NGL MEP Cornelia Ernst said: “To this day, there has not been any proof whatsoever that mass collection and blanket retention of PNR data is actually necessary for tackling terrorism and serious international crime. It is clear, however, that the establishment of this system would be very costly. Particularly against a backdrop of cuts to social spending and the ongoing crisis we should refrain from giving such huge gifts to the security industry.” According to the European Commission PNR data is used in investigations and prosecutions. It are also used to prevent crimes and to arrest persons when a crime has been committed, as well as to create travel and behaviour assessments to facilitate crime prevention. The proposal will now go to a vote before the full Parliament.
DENMARK | MINING
GERMANY |FREEDOM OF INFORMATION
28 April - 5 May, 2013
Novolipetsk Steel invests €100 mln in Frederiksvaerk
The new rolling mill worth almost €100 million was inaugurated on 24 April in the Danish town of Frederiksværk in the presence of the Russian Minister of transport, Maksim Sokolov, and the Danish Minister for Trade and Investment, Pia Olsen Dyhr. NLMK DanSteel A/S has been Russianowned since 2002 and this new investment is made to ensure competitiveness through high quality, larger capacity and a wider product range. The project worth 100 million Euro started in August 2012 as a part of the company’s strategy to leverage its strong position in the plate markets. The ambition is to be a ‘one-stop-shop’ for businesses within growing sectors like the offshore wind industry. DanSteel is part of a European division, NLMK Europe Plate, and The Danish Minister for Trade and Investment welcomes NLMK’s decision of placing the investment Denmark in front of other European locations, “I am glad to see how our geographic location, our infrastructure and skilled workers are decisive arguments for foreign investors like NLMK,” Olsen Dyhr said. “With the new investment, DanSteel will intensify their focus on strong Danish sectors like offshore wind and maritime, and I am sure that this will be of mutual benefit to both DanSteel and the Danish value chain within these sectors,” the Minister said. SWEDEN | AFGHANISTAN
Bildt takes part in ISAF meeting
Bildt highlighted three challenges in the coming year. The first and most important is to ensure that the presidential elections next year are conducted in a peaceful and fair way. The second challenge concerns the economy and cooperation in the region. The third involves the conditions necessary for a peace dialogue supported by all groups in Afghanistan. Bildt also emphasised the UN´s key role in Afghanistan, and voiced hope that the EU´s cooperation agreement with Afghanistan could be signed as soon as possible. He also stressed Sweden´s long-term support to Afghanistan, expressed through civilian development assistance and support to training police officers and the armed forces. ISAF was established in late 2001 and operates under a UN Security Council mandate and an agreement between ISAF and the Afghan Government.
Heidi Hautala heads to Tajikistan
FINLAND | DEVELOPMENT
The Minister for International Development Heidi Hautala will visit Tajikistan from 28 April to 2 May. The trip is associated with Finland’s development cooperation in Central Asia and Eastern Europe, which from the year 2014 will focus on Tajikistan and Kyrgyzstan, the poorest countries of Central Asia. During her visit, Minister Hautala will have discussions on the situation in Tajikistan and Central Asia with representatives of the authorities, international organisations and civil society organisations. Attention is focused, among others, on the implementation of human rights. The Minister will take part in the regional seminar entitled “Ensuring women’s rights: law and practice”, which is part of the project supporting the legal sector funded by Finland. The seminar will also be attended byPekka Hallberg, former President of the Supreme Administrative Court, and the legal ombudsmen of all the Central Asian countries.
When presenting his 24th Activity Report on Data Protection covering the years 2011 and 2012 on 24 April, the Federal Commissioner for Data Protection and Freedom of Information Peter Schaar mentioned that the activity report “emphasises the increase of data protection issues by many examples from almost all areas of our lives,” Schaar said. “ It is not only the young people who will not envisage their lives without smart phones and Internet. Also increasing is the alleviated use of many everyday objects by the “internet of things” - from cars to electricity meters to television computer chips simplify our lives, but at the same time they also collect comprehensive user data. Therefore up-to-date rules for handling information technology are more urgent than ever,” the Commissioner said. Compared with these challenges, the political and legal progress in data protection is very modest a press statement outlined. “Unfortunately, improvements proclaimed by the Federal Government for its legislative period were only implemented to some degree, The Employee Data Protection Act was definitively shelved after heavy criticism in spring. Thus, employees still remain without adequate legal protection against spying at the workplace. Under reference to the discussion on European level, the intention to modernize German data protection law was not pursued any further. However, the new European law will come into force no earlier than 2015. A comprehensive independent evaluation of the security laws has not taken place. Nevertheless, the security authorities were provided with additional powers and data files during the period under report (No. 7.1). The Federal Government has not followed up the “Red Lines Act” for the limitation of data collection and profiling on the Internet, which was announced in 2010. Instead, the Federal Government apparently puts all hope in the business sector’s self-regulation. The Foundation for Data Protection, which is to start its work this year, shows an excessive presence of business representatives in its committees. Anyhow the financial framework is so limited that grants from companies are inevitable. The question is now how it might perform its duties independently as required. The most important discussions on data protection are currently taking place on European level. The data protection
Data protection commissioner releases report for 2011-2012
The Data Protection Federal Commissioner of Germany released his latest report on 24 April, 2013. |EPA/TIM BRAKEMEIER
reform package presented by the European Commission offers the chance to up - date data protection and to enforce data protection provisions effectively. With regard to this European legislative process, I expect the Federal Government to yield a high level of data protection in a committed and constructive way. For a European General Data Protection Regulation the following points are particularly significant; Non-European companies have to comply with the European data protection law when they offer services in the European internal market and intend to process Europeans’ personal data (marketplace principle). The Data Protection Authorities’ independence has to be ensured vis-à-vis national governments and vis-à-vis the European Commission. They must get a position to effectively penalize violations, especially by means of fines, which are based on the financial capacity of the respective companies. Technological data protection must be strengthened. In so far, the draft contains promising approaches (Privacy by Design, privacy-friendly default settings, privacy impact assessments) which, however, need to be ex-tended. I advocate the setting of strict limits to the merging of personal data to profiles and to their use. Given the increasing data exchange between European security authorities, it is necessary to provide European minimum standards for data protection without jeopardizing the German level of data protection. That is why the Directive for data protection in the area of police and justice proposed by the European Commission is of great importance. However, the draft directive requires significant amendments.
Objections and citizens’ complaints 85 officers have conducted 106 inspections of public federal agencies. A total of 15 complaints were made. 9,729 citizens have appealed to the Federal Data Protection Commissioner in 2011 and 2012. Other topics of the 24 Activity Report Google, Facebook and other internet companies with headquarters in the United States continue to collect comprehensive data in Germany and Europe, partially in violation of local data protection laws. The data protection authorities of several European Member States cooperate in a joint initiative for the punishment of Google’s violations against European data protection regulations. Although an inspection of the services of Facebook by the Irish data protection authority has led to some improvements (such as turning off the facial recognition for all users from the European Member States) - many data protection issues remain unanswered yet. The Federal Commissioner takes a critical stance towards the fact that during the period under report the security authorities were granted additional powers and instruments again and before the reappraisal of the former causes and negative developments was completed. Already in the legislative process for the Act on Setting up a Counter-Terrorism Database the Federal Commissioner advocated stricter data protection regulations, in particular to protect (“contact”-) persons with no criminal record. Due to the arrangement of responsibilities for the counter-terrorism database scattered on different administrations, data protection supervisions encounter considerable difficulties.
28 April - 5 May, 2013
FRANCE | SYRIA
France legalizes same – sex marriage
Destruction of minaret of Umayyad Mosque in Aleppo condemned
France utterly condemns the bombing that caused damage to the Umayyad Mosque in Aleppo, including the collapse of its minaret. This mosque - one of the most beautiful in the Muslim world - is listed as a UNESCO World Heritage site. “This event reflects the escalation of violence in Syria. We strongly condemn the regime’s continued indiscriminate bombing in Aleppo as well as in the rest of the country,” the France Diplomatie – Ministry of Foreign Affairs of France said in a statement released on April 25. The regime must be held accountable for the suffering inflicted on the Syrian people and the loss of human life, as well as for the destruction of these historical and cultural treasures. AUSTRIA | REGIONAL POLICY
Austria's Commissioner highlights regional projects
AFP PHOTO / FRANK PERRY
French lawmakers yesterday legalized same-sex marriage . Tuesday's 331-225 vote came in the Socialist majority National Assembly. France's justice minister, Christiane Taubira, said the first weddings could be as soon as June. Opponents of the law say France is FRANCE |INDUSTRY
not ready to legalize adoption for samesex couples, and polls show a France sharply divided on the issue. Thousands of police mobilized ahead of the vote, preparing for dueling protests around the National Assembly building and along the Seine River. At
least one spectator was ejected from the gallery. Franceis the 14th country to legalize gay marriage, and Tuesday's vote comes a week after New Zealand — with very little controversy — allowed same-sex couples to wed.
Alstom, a large French multinational conglomerate which holds interests in the power generation and transport markets, and its Russian partner, Transmashholding (TMH), the largest railway engineering company in CIS in terms of sales volume, on April 25 inaugurated a joint production site dedicated to asynchronous traction drives for electric locomotives in Novocherkassk, in southern Russia. This modern traction drive will equip the locomotives jointly developed and manufactured by Alstom and TMH for Russia and Kazakhstan. The new site currently employs around 60 people and could reach more than 160 employees at full production capacity. The site is expected to produce 17 traction units per month and may also produce other equipment developed by Alstom and TMH. The total investment of the partners in this project represents about €40 million euro. The facility is located in the Novocherkassk locomotive plant (NEVZ) owned by TMH. In order to implement
Alstom and Transmashholding open a new joint production
the project, in May 2012, Alstom and TMH created a 50/50 joint venture, RailComp, to begin production of hightech railway components for passenger and freight locomotives. Railcomp could also potentially export traction converter equipment produced in Russia. “Alstom does more than just cooperate on the technological aspects with TMH. It also contributes to the development of the local economy while offering a new generation of highly competitive products, fully suited to the local environment and providing better performance,” said Henri PoupartLafarge. “Owning the production of the asynchronous traction drive for locomotives is a key step for the Russian railway industry,” said TMH Managing Director, Andrey Andreev. “We are starting to manufacture one of the most complex elements in a modern locomotive which will significantly reduce its operational and maintenance costs. This will make this product far more competitive.”
The asynchronous traction drive is a high-technology component whose main feature is a low weight to power ratio. It also ensures easier monitoring of the locomotive engine. The traction drive is to be installed on electric locomotives EP20 and 2ES5, which were developed by the partners for operation in Russia, as well as for locomotives KZ8A and KZ4A, which will be manufactured and operated in Kazakhstan. Locomotives developed by Alstom and TMH are among the most powerful in the world, able to operate at temperatures between -50°C and +50°C. 400 locomotives will be supplied to Russia and 295 to Kazakhstan. In 2010, Alstom acquired a 25% stake in TMH and signed a key strategic partnership with the company to develop new models of rolling stock for the 1520 mm gauge(1) region. At the beginning of their cooperation, the partners created TRTrans, a joint engineering centre to develop new rolling stock including passenger and freight locomotives for Russia and Kazakhstan.
Early last week Johannes Hahn, the EU Commissioner for Regional Policy participated in the Energy Forum in Lech am Arlberg in the Austrian province of Vorarlberg. Vorarlberg borders Germany, Liechtenstein and Switzerland. The province’s picturesque landscape of mountains and lakes makes it a popular holiday destination. Vorarlberg has a little over 370,000 residents and is one of the most economically dynamic and prosperous regions of Austria. The region’s GDP per capita was 31.4% above the EU average in 2009. Despite its favourable situation and good economic performance, the region faces a number of challenges if it is to maintain its competitiveness and quality of life. These include Ensuring the productive use of research and development, preserving the quality of the environment and breaking down the rural/urban divide in the region. Over the 2007-2013 programming period, the EU is investing around €17.7 million in Vorarlberg. The EU funding is intended to attract in €125 million through a combination of public investment at national level and private investors. Up to 85% of EU funding has already been assigned to projects. Together with Germany, Liechtenstein and Switzerland, Vorarlberg is also actively involved in the Bodensee cross-border cooperation programme. HUNGARY | HUMAN RIGHTS
CoE calls for monitoring of human rights
The Monitoring Committee of the Parliamentary Assembly of the Council of Europe (PACE) has recommended that the Assembly should open a “monitoring procedure” in respect of Hungary on 25 April, citing deep concerns at “the erosion of democratic checks and balances” as a result of the new constitutional framework in the country. In an opinion, the committee said there are “serious and sustained concerns” about the extent to which Hungary is complying with the obligations it took on when it joined the Council of Europe to uphold the highest standards on democracy, human rights and the rule of law. In light of the Monitoring Committee’s written opinion, the Assembly’s Bureau will now express itself on whether to open a monitoring procedure. Subsequently, the text shall be included on the agenda of the next Assembly session. The opinion lists a number of concerns, including thatHungary’s constitution and related cardinal laws “were adopted in a hasty and opaque manner” which was “not based on a consensus between the widest possible range of political forces in Hungarian society.”
28 April - 5 May, 2013
Letta tries to form new government
On 25 April, Prime Minister-designate Enrico Letta saw “improving” chances of success as he began tricky negotiations to form a new government. Letta was the surprise choice tapped by President Giorgio Napolitano to head a broad-based coalition. Former Prime Minister Giuliano Amato had been tipped as Napolitano’s first choice to form the government. The government will include the PD’s traditional arch-rivals, Silvio Berlusconi’s People of Freedom party (PDL), as well as caretaker Prime Minister Mario Monti’s centrist group, both of which have said they will support the government. Berlusconi told an Italian television station it did not matter who headed the government as long as it enacted reforms. “The important thing is that there is a government and that there is a parliament that can approve measures that we absolutely need to emerge from the crisis of recession and get back on the path of growth,” he said. PORTUGAL|BANKING
By Kostis Geropoulos
Athens wants island link with luxury cruises
BCP disposes Millennium Bank shares to Piraeus
On 22 April, Portuguese commercial bank Banco Comercial Português (BCP) has signed definitive agreements with Greece’s Piraeus Bank regarding, on one side, the sale of the entire share capital of Greece’s Millennium Bank (MBG) and, on the other side, the investment by BCP in the forthcoming capital increase of Piraeus Bank. The aggregate consideration for the sale of the share capital of MBG was agreed at €1 million, BCP reported in its filing to the Portuguese Securities and Exchange Regulator, Comissão do Mercado de Valores Mobiliários (CMVM) on 22 April. PORTUGAL|ENERGY
EDP Renováveis to operate wind farms in US
On 22 April, Portuguese energy company EDP Renováveis, through its fully owned subsidiary EDP Renewables North America, has signed 20-year Power Purchase Agreements (PPA) with Georgia Power to sell, starting from 1 January 2016, the renewable energy produced by already in operation wind farms with an installed capacity of 250 MW located in Oklahoma. This contract eliminates EDPR’s current long-term merchant exposure in Oklahoma and reduces the structural long-term merchant exposure in the US to 664 MW, which represents only 8% of EDPR’s total installed capacity as of March 2013. GREECE|TRANPORT
AEGINA, Greece - Captain Vassilis Skourlis looked out of the yacht’s bridge windows at the calm, blue sea, reflecting the bright sunlight and sighed. “If people who led this country capitalised more on tourism, there could be enough jobs for everyone. That’s all you need,” he said. He added that he hears that this year more tourists will be coming to Greece compared to 2012. The 55-metre luxury mega yacht – Harmony V - was on a press day-cruise from Piraeus, the port of Athens, to the nearby Aegina Island in the ArgoSaronic Gulf. But it was expected to start its planned week-long cruises from Piraeus to Kea, Mykonos, Santorini, Crete, Kythira, Monemvassia, Nafplion and Hydra this week. The captain explains that his boat converted from a Turkish navy vessel to a luxury mega yacht in 2008 - carried most of the workload last year when things were slow. “Crisis or no crisis, everyone wants to go to Mykonos,” he said. But this year most of the company’s luxury yachts will be busy. Variety Yachting’s Filippos Venetopoulos told New Europe that business is picking up, noting that luxury cruises take long-term planning and last year tourists were spooked with the Greek economic crisis and talk of the country leaving the euro. But now the company has already 30% of its cruises booked for 2014, compared to 70% for this year. Athens-Attica Hotel Association President Alexandros Vassilikos told a press conference on board Harmony V heading to Aegina on 24 April that he hopes that Athens will be seen as a destination, along with surrounding islands. He said that Greece may draw a record number of more than 17 million tourists this year. “The idea is to change the image,” he told foreign correspondents. “There have been problems in Athens, but we GREECE|TOURISM
Fishing boats in the harbour of Aegina island, 24 April 2013.|NEW EUROPE
have overcome them. We expect Athens to recover this year with a positive flow of tourists, compared with last year,” he said. Demonstrations and rioting have damaged Athens’ image, Vassilikos said. He noted there has not been a major strike in the recent months but the image of a country on strike has remained. “We have to change the image in Athens and abroad. It is a mistake not to consider the islands around Athens with the city,” he said. He explained that 60% of the people who visit Athens do not know that within half hour they could be sitting on a beach or within an hour they can be on an island. “Athens needs to show the coast,” he said. Vassilikos said Athens has two major advantages: most of the hotels have been renovated because of the 2004 Olympics and prices have fallen due to the drop in demand, offering good value for money. However, about 40 Athens hotels have closed down, most due to the economic crisis. But Vassilikos said he expects quite a few to reopen as Greece recovers from the crisis. He said Athens
needs to take advantage of the improved co-operation between the public and private sector and communicate it to tourism decision-makers abroad. He admitted that there has been a big fall in conference tourism in Athens since “nobody would take the risk” to plan ahead a big conference in Athens. But he noted that Athens has been reestablished as a destination and is price competitive. In Aegina, Mayor Sakis Sakiotis noted that the economic crisis has taken its toll on the island but highlighted the island’s close proximity to Athens, combining sunny beaches and culture, like the sanctuary of Aphaia on Aegina. Moreover, the Aegina Pistachio variety is known around the world for its unique and delicious taste. The President of the Hellenic Professional Yacht Owners Association (HPYOA), Antonis Stelliatos, told New Europe as the Harmony V yacht returned from Aegina that he is confident Greece will pull through. “We have to. Otherwise, we will be lost,” he said. On the yacht’s bridge, Captain Skourlis agreed. “I’m an optimist by nature,” he said.
Samaras visits Corinth-Patra highway construction site
On 25 April, Greek Prime Minister Antonis Samaras visited the Corinth-Patra (Olympia) highway construction site in the Peloponnese where works resumed after being halted by the crisis. “The sacrifices of the Greek people are bearing fruit. Every passing day shows that Greece is raising its head and rolling up its sleeves,” Samaras said adding that the country-wide road construction projects will create thousands of jobs. “Greece is turning a page... Recovery is within our sights,” Samaras added.
Greece, Albania and Italy form committee supporting TAP
On 19 April, a trilateral co-operation committee meeting took place between the governments of Greece, Albania, Italy to coordinate their support for the Trans Adriatic Pipeline (TAP), according a press release. The establishment of the committee follows the signing of an Intergovernmental Agreement (IGA) on TAP between the three countries in Athens on 13 February 2013, subsequently ratified by both the Greek and Albanian parliaments. Rikard Scoufias, TAP’s Country Manager for Greece, said: “This again reinforces the strong support that TAP receives from the Hellenic Republic. In particular, we wish to convey our gratitude to Deputy Minster Papagiorgiou
for taking such an active personal role in the selection of TAP and the Greek Route. TAP is destined to bring significant national benefits for Greece and its citizens. Equally, I am also mindful that TAP will strengthen Greece’s regional and European position, as evidenced by Secretary General Mihalos (MFA) presence and initiative”.
28 April - 5 May, 2013
Shanghai cooperation memorandum signed
TURKEY | FOREIGN AFFAIRS
NATO Foreign Ministers discussed the developments in the Middle East and North Africa, in particular the crisis in Syria, NATO-Russia cooperation and its various aspects, the current situation in Afghanistan and cooperation in the post 2014 period as well as developments concerning North Korea. Moreover Foreign Minister Davuto?lu together with Foreign Ministers of Romania and Poland attended the 3+4 meeting held with the participation of countries that have NATO membership aspirations, namely Bosnia-Herzegovina, Macedonia, Montenegro and Georgia. Membership processes of these countries and their partnership with NATO were on the agenda of the meeting Foreign Minister Davuto?lu also had bilateral meetings with Foreign Ministers of Croatia and Albania. ALBANIA | OIL & GAS
Davutoglu meets Kerry
Ahmet Davuto?lu, Minister of Foreign Affairs of Turkey together with Dmitry Mezentsev, Secretary General of the Shanghai Cooperation Organization (SCO) signed the Memorandum on the cooperation that may be carried out with the SCO as the Dialogue Partner of the organisation. Speaking at the signing ceremony Foreign Minister Davuto?lu thanked all member countries and the Secretary General of the SCO for enabling Turkey to be a member of a family consisting of countries which live together not hundreds but thousands of years with the decision taken during the last SCO Summit. Foreign Minister Davuto?lu stated that the partnership will strengthen the ties between Turkey and the SCO particularly in the fields of economy and transportation and will also provide for fight together against the challenges which threaten all the countries. Foreign Minister Davuto?lu emphasized that the Memorandum is a declaration of “common fate” and also the beginning of a long road where Turkey and SCO walk hand in hand. ALBANIA | EU
Ahmet Davuto?lu, Minister of Foreign Affairs of Turkey participated in the meeting of NATO Foreign Ministers in Brussels on 23 April, 2013.
Stabilisation and association council meets for fifth time
San Leon up on Albania licence extension
According to stockmarketwire Leon’s shares were up in late afternoon trading after it signed an amendment to its petroleum sharing contract for the Durresi block, offshore Albania. The company holds a 100% operating interest. The amendment alleviates the tight timelines that existed in the current phase of the PSC, where San Leon would have had a requirement to drill an exploration well in 2013. San Leon will now have two full years to begin drilling operations. The company plans to drill a well in 2014. Europa Oil & Gas swung into the black in the six months to the end of January with a pre-tax profit of £0.2m against a loss of £5.6m last time. Revenues were lower - £2.2m compared with £2.4m a year ago - but there was a 25% increase in cash generated from operations - £1.0m compared with £0.8m in 2012. Europa said over 2 billion barrels of oil (total mean un-risked indicative resources) had been identified in the Irish Atlantic Margin (`IAM’) licensing options and four new leads had been identified in north-east Lincolnshire (PEDL181). Chief executive Hugh Mackay said: “The year to date has illustrated the benefits of having a multi-asset, multi-stage portfolio of licences. “Our UK production has generated increased cash flow over the period that has allowed us to fund in-house technical work on our highly prospective exploration licences in Ireland, the UK and France. “As a result, several new prospects
have been identified. “The key event is the announcement post-period end that we have successfully farmed out our two Irish licences to Kosmos Energy, a leading US independent oil and gas exploration and production company. “They are the ideal partner with whom we can mature, de-risk and drill the potentially very large prospects mapped in our licences. “The farm-in provides recognition of the substantial potential value lying in these prospects. The work programme associated with the farm-in has the potential to deliver significant value realisation. Europa’s retained 15% interest exposes the Company to substantial upside in the event of drilling success and at a much reduced risk and cost to our shareholders.
British Pamplona in talks to buy Turkey’s Medical Park
According to Turkish local Today’s Zaman London-based private equity fund Pamplona Capital Management is in exclusive talks to buy a majority stake in Turkish hospitals group Medical Park, a source close to the matter told Reuters on Monday. The Carlyle Group, a US private equity firm, acquired a 40 percent stake in Medical Park in 2009 for an undisclosed amount alongside Turkish businessmen Muharrem Usta and Haydar Sancak, who each own 30 percent. Pamplona is backed by Russian billionaire Mikhail Fridman’s Alfa Group, which was a cornerstone investor of the private equity fund when it was established in 2005. “It will take a couple of months to complete the talks,” the source said. “In these talks it will become clear how much each will sell.” Private equity investors favor Turkey’s fast-growing services industries,
TURKEY |EUROPEAN AFFAIRS
including healthcare and education, attracted by a near tripling in nominal per capita gross domestic product (GDP) over the past decade and a population of 76 million. The private healthcare sector is growing rapidly, with more people taking out private health insurance and state hospitals stretched. In February, Parliament passed new regulations aimed at making private investment easier.
The Stabilisation and Association Council (SA Council) between Albania and the European Union held its fifth meeting on 23 April 2013. On behalf of the High Representative for Foreign and Security Policy, the meeting was chaired by Lucinda Creighton, Minister of State for European Affairs, Ireland. Commissioner Štefan Füle represented the European Commission. EEAS Managing Director Luis Felipe Fernandez de la Peña also participated. The Albanian delegation was led by Majlinda Bregu, Minister of European Integration. The SA Council noted that the Commission 2012 Progress Report on Albania concluded that overall, the country had made good progress towards meeting the political criteria for membership and the twelve key priorities for the opening of accession negotiations, as identified in the Commission’s Opinion endorsed by the Council in December 2010. The SA Council noted the conclusions of the General Affairs Council of 11 December 2012, confirmed by the European Council of 14 December, 2012. The SA Council noted that the EU remains committed to the short-term visa free travel regime for Albania and welcomes the renewed commitment of the Albanian authorities to ensure respect of the conditions attached to visa liberalisation. The SA Council called on Albania to take further steps to address the issue of unfounded asylum applications lodged by Albanian nationals. Particular attention needed to be paid by the authorities on all issues set out in the first post visa liberalisation monitoring report. The SA Council noted the improved political dialogue and co-operation in parliament between ruling majority and opposition which led to encouraging progress on the reform agenda in 2012. Underlining that sustained constructive political dialogue remained essential for Albania to fully address the EU-reform agenda, the SA Council called for this political dialogue to be reinvigorated. The SA Council stressed that the reform agenda needs to be pursued relentlessly, leading to delivering concrete results on outstanding issues under the 12 Key Priorities of the Opinion and completing, in a spirit of consensus and inclusiveness, the key measures, as identified in the 2012 Commission’s recommendation in view to deciding whether to grant the status of candidate country, notably finalising the revision of the parliamentary Rules of Procedure, adopting the Civil Service Law and passing amendments to the High Court Law.
28 April - 5 May, 2013
NIS wraps up 50% stake in Plandiste wind park
Serbian oil and gas company NIS said it has formally taken over a 50% stake in the Plandiste wind park project, SeeNews reported. In December NIS signed an agreement with Serbia’s Energowind to acquire 50% of the project, which envisages the construction of a 102 megawatt (MW) wind farm in the Balkan country’s north. At this moment the partners have equal shares in the project, but French company Akuo Energy expressed its intention to participate in the construction of the wind park and signed with Energowind a memorandum of understanding, NIS said in a statement on 22 April. The wind farm in the municipality of Plandiste will comprise 34 wind generators. The total value of the project amounts to €160 million. NIS plans use €23.5 million from its own funds to finance the project, while the remainder will come from loans from commercial banks. SERBIA|DIPLOMACY
Silajdzic criticises inaction on Syria
Former president of the Bosnia-Herzegovina Presidency Council, Haris Silajdzic, said civilian were being killed in Syria as it happened in Bosnia during the Bosnia war, news agencies reported. He criticised international community for its inaction and indifference for Syria, saying geopolitically, several actors have different interests in Syria and international powers would only act when great interest were on the table. He said Syria issue was beyond Syria and related to the interest of the new world order and new power pyramid. Speaking in Turkey, Silajdzic said Ankara also helped Bosnia during the Bosnia war, adding Turkey grew in the last 20 years significantly and became a world power. Defining the solution process of Turkey as a “historic, strategic, bold and assertive step”, he added it should
Nikolic to visit Russia on 21 May
Serbian President Tomislav Nikolic plans a visit to Moscow on 21 May to sign a strategic partnership agreement with Russia, announced the press centre of the Serbian President’s Office, cited by RIA Novosti. On 24 April, Nikolic received the Russian ambassador to Belgrade Alexander Chepurin, who officially presented the invitation. Nikolic and Chepurin discussed also the latest agreement between Serbia and Kosovo which was approved in Brussels on 19 April. Meanwhile, Serbia’s Defence Minister Aleksandar Vucic stated that it was agreed at a meeting on 23 April with Chepurin that he will confer with Russian Defence Minister Sergei Shoigu in Moscow on May 23 and that the Russian minister will pay a return visit to Belgrade in September. After presenting the members of the Ministry of Defence and the Serbian Armed Forces (VS) with decorations on the occasion of the day of the VS, Vucic told the press that he and Chepurin discussed bilateral relations, the Brussels agreement and Russia’s further political and economic support to Serbia. Vucic also voiced expectation that he will go to a major economic forum to be held in St Petersburg in June, which will also be attended by Russian President Vladimir Putin and where he should have a series of bilateral meetings. “This speaks of the accelerated pace of our relationship,” Vucic said. CROATIA|AIRLINE
Former president of the Bosnia-Herzegovina Presidency Council, Haris Silajdzic, criticised international community for its inaction and indifference for Syria.| EPA/
be accepted by all the parties. He said peace was a moral decision. On Bosnia-Herzegovinia being an
EU member, Silajdic said they were open to membership but not to the double standards of the EU.
Nikolic apologises for 1995 Srebrenica massacre
Serbian President Tomislav Nikolic has apologised for the massacre of 8,000 Muslims, killed by Serbian forces in Srebrenica at the height of the Bosnian War. He stopped short, however, of defining it as genocide. Nikolic personally apologized on 25 April for the massacre of Muslim men and boys in Srebrenica in July 1995. “I kneel and ask for forgiveness for Serbia for the crime committed in Srebrenica,” Nikolic said in an interview due to be aired on Bosnian national television on 7 May. The president told BHRT television, however, that “genocide needs to be proved”. Nikolic, a former far-right SERBIA|ENERGY nationalist who won Serbia’s presidential election a year ago, repeatedly challenged the ruling after taking office. Bosnian Serb wartime political and military leaders Radovan Karadzic and Ratko Mladic are currently on trial on genocide charges before The Haguebased UN International Criminal Court for the former Yugoslavia (ICTY) for their role in the Srebrenica massacre. Some 8,000 Bosnian Muslims were killed at Srebrenica in 1995 after Bosnian Serb forces overran the UN-defended safe area there. Bosnian Muslim leader Bakir Izetbegovic had recently urged Nikolic to
acknowledge Srebrenica as an act of genocide. “In order to go forward, we need to stop for a moment and look back to... what has happened in Srebrenica,” he said after meeting him in the Serbian capital, Belgrade. “We ask this truth to be recognised and words to be chosen when talking about it... and to respect the decisions of the international courts.” Nikolic’s predecessor Boris Tadic also apologised to Srebrenica victims during a commemoration event in 2005. Both the ICTY and the United Nations’ highest court, the International Court of Justice, have found that the Srebrenica massacre was genocide.
Zagreb seeks partner for struggling Croatia Airlines
Croatia is looking to sell a stake in troubled Croatia Airlines, joining the regional struggle to keep small and ailing carriers in the former Yugoslavia in the air, Reuters reported. “We will fight for CA to survive, but if you’re following the regional markets, you have to know that all regional airlines are in a bad shape and are struggling to find strategic partners,” Transport Minister Sinisa Hajdas Doncic told Nova TV television late on late on 23 April. He said the government was already in preliminary talks with “potential strategic partners”. No names have yet been floated by the media or sector analysts. “If (the strategic partner) is from outside the European Union, the maximum stake we’d sell would be 49%. If it is from the EU, the stake can be up to 100%,” he said. The airline has fleet of 3 Airbus A-320 and 4 Airbus A-319 and six smaller Dash eight planes. It flies inside Europe and is a member of Star Alliance with Germany’s Lufthansa.
Mihajlovic sees no layoffs at restructured Srbijagas
On 23 April, Serbia’s Energy Minister Zorana Mihajlovic said the plan for the restructuring of debt-ridden state-owned gas company Srbijagas foresees no layoffs unless these are conducted on a voluntary basis under a redundancy programme or come as a result of natural attrition, SeeNews reported. Mihajlovic said in a statement issued after she formally unveiled the restructuring plan the debts of Srbijagas total around €1.1 billion and the business will have to be restructured to stem its financial collapse. Srbijagas’s debt comprises €806.8 million in long-term loans, €99.9 million in short-term loans and €149.5 million in state guarantees, the draft of the restructuring plan, which should be adopted by the government next week at the latest, showed. The document indicated that around a fifth of the debts were due to regulated gas prices and as much to inefficient operations while outstanding receivables accounted for the remainder. According to Assistant Minister Petar Stanojevic, Srbijagas’s losses cannot be offset with an increase in gas prices. The gas monopoly turned to a net loss of 35.1 billion dinars (€315 million) in 2012 from a net profit of 1.3 billion dinars a year earlier, data from Serbia’s Business Registry Agency’s indicated. The first phase of the restructuring plan for Srbijagas would involve taking
care of its financial and business consolidation. During the second phase, its gas transport and storage operations would be spun off by the end of the year into a 100% state-owned company, Transgas, while the gas distribution and supply operations would be unbundled into Srbijagas AD, also wholly-owned by the state. The process should then see the formation by the end of 2014 of an energy holding company that would incorporate Transgas, oil pipeline and oil storage operator Transnafta and power grid operator Elektromreza Srbije. Yugorosgaz is co-owned by Russian gas monopoly Gazprom (50%), Srbijagas (25%) and Central ME Energy&Gas AG (25%), a member of the Centrex Group.
28 April - 5 May, 2013
Homeless evicted as debate goes on
NORWAY | ROMA
Waiting on the polls
On Saturday 27 April Iceland headed to the polls. Electionista has complied a brief guide to the election which can be found here below, results from next week and online from 29 April. There are 1512 candidates running for a seat in the Althingi of those 58.2% are male, the average age of candidates is 46.2 years old, the oldest 104 and the youngest 18. The polls show averges for the parties involved as follows: Progressive Party (liberal) 27% Independence (centre-right) 25.1% Social Democratic Alliance (centreleft) 13.1% Left-Green Movement 9.2% Bright Future (pro-euro liberal) 7.85% Pirate Party 7% Dawn 3.1% Democratic Party 2.7% It is worth keeping in mind that the gap between the Independence Party and the Progressive Party has been very volatile over the past month or so. The Independence Party was ahead by up to 10 points in February, the positions then inverted with polls over the past couple of weeks showing the Progressive Party with a significant lead, yet over the past few days the two parties have been neck-and-neck in the most recent figures. Current distribution of seats - SocialDemocratic: 19, Independence 16, LeftGreen 11, Progressive 9, Bright Future 2, Dawn 2, Rainbow 2, Pirate Party 1, SolidarNORWAY |BANKING
A photo from the previous election in 2009 at a polling station in Reykjavik, Iceland.
ity . Voting system - Proportional Representation. 63 seats distributed over 9 constituencies, candidates are elected via lists in order of preference. Of the 63 seats, 9 are levelling seats. Europe - one of the main electoral issues has been the continuation of accession negotiations to the EU (these are currently on hold until after the election). Both the
Independence Party and the Progressive Party are for halting negotiations unless approved by a referendum. The SocialDemocratic Alliance, Bright Future and Left-Green are for continuing negotiations. Polls show that a majority of the population wants to continue negotiations, yet a majority of the population doesn’t want to join the EU independently of negotiations.
Police evicted more than 100 occupants of an abandoned building in Oslo on 25 April, many of them Roma and other foreign migrants. The evictions occurred as debate continues to rage over what state and local authorities should do to halt such illegal occupations and camping within city limits. Providing legal accommodation and welfare services for those now sleeping outdoors is highly controversial. The debate is also flying in communities all over Norway, as police and politicians brace for a new influx of itinerant beggars this spring and summer. Proposed solutions range from calls to close Norway’s borders to providing the migrant poor with accommodation, showers and toilets. Urgent needs The issue has figured prominently in Norwegian media for months, and as warmer weather sets in, the need for measures to deal with increasing numbers of the itinerants is becoming urgent. Local humanitarian organizations including the Salvation Army and the church aid group Kirkens Bymisjonare already stretched too far in their efforts to offer food and various forms of sanitation to the people who beg in public areas all over town during the day and sleep under highways or in parks at night. Newspaper Aftenposten found a large group of migrant beggars sleeping amidst blocks of concrete between a motorway and tram tracks on the outskirts of downtown Oslo. “Dogs in Norway sleep better than we do,” Dumitru Gheorghe, age 53, from Romania told Aftenposten through an interpreter. Lying next to him was his 73-yearold mother. Asked whether this could be better than life in Romania, he answered yes. SWITZERLAND | SCHENGEN
Switzerland restricting immigration from the EU
Sparebank holds its annual general meeting
SpareBank 1 SR-Bank ASA held its Annual General Meeting (AGM) on 25 April 2013 in Stavanger, Norway. The AGM approved the nomination of the committee’s proposal for election of members and deputy members to the supervisory board and election of chair and member to the control committee. In addition, the AGM approved the election of its chair, member and deputy member to the nomination committee. The AGM further approved the annual accounts and annual report for 2012. The resolution also included NORWAY |OIL the payment of a dividend for 2012 of NOK 1.50 per share for those who are shareholders as of 25 April 2013, with payment on 7 May 2013. The shares of SpareBank 1 SR-Bank ASA will be traded ex-dividend from 26 April 2013. The AGM approved the Board of Directors proposed amendment to the articles of association. The AGM gave the Board of Directors the authority to acquire and pledge own shares for a total nominal value of NOK 490,000,000. Holdings of shares the bank owns and/or pledge agree-
ments cannot exceed 10% of the registered share capital. The shares may be purchased through the stock market. Each share may be bought at prices between NOK 1 and 150. The authorizations shall be valid for 12 months from 25 April, 2013. The AGM further granted the Board of Directors power of attorney to issue hybrid Tier 1 securities and raise subordinated loan capital, together or individually, up to NOK 3,000,000,000 or equivalent in foreign currency. The authorization is valid for 18 months from 25 April, 2013.
Switzerland is planning to restrict immigration from EU countries, especially those of the South. The Swiss government announced Wednesday that facing a constant growth to the number of people coming to work in the country, starting from next month, it plans to use a „safeguard clause“ in Switzerland‘s agreements with the EU to that end. During the one year period starting from May, the country will issue a maximum of 2,180 long-term permits for migrants from the new EU member states and 53,700 for migrants from the ‚old‘ EU member states. A government statement said that, in recent years, the number of foreigners arriving in Switzerland to find work has been up to 80,000 higher each year than the number leaving. This led it to conclude that restricting permits „can help to make immigration more acceptable to society.“ Catherine Ashton, the EU‘s foreign policy chief, criticized Switzerland‘s new immigration regulations.
The state-appointed ethics council that oversees investments made by Norway’s huge oil-fueled sovereign wealth fund is questioning whether operations by US oil giant ExxonMobil in Equatorial Guinea violate “fundamental ethical norms.” If so, the fund may need to sell off its ExxonMobil stock. The council is charged with evaluating investments in individual companies in which Norway’s popularly called “oil fund”
Exxon questioned by ethics committee
has stakes. The Norwegian finance ministry, ultimately in charge of the fund that’s tied to Norway’s central bank and long has ranked as one of the biggest investment funds in the world, makes its decisions based on the council’s recommendations. In general, the oil fund is not allowed to invest in companies that produce weapons that violate “fundamental humanitarian principles,” or in companies that produce tobacco, contribute towards violations of
human rights, cause serious environmental damage or are guilty of serious corruption. Newspaper Aftenposten reported Wednesday that the council has turned its attention to the situation in Equatorial Guinea, where oil revenues have boosted the country’s gross national product to a level higher than in developed nations including Poland and Portugal, but where 77 percent of the population continues to live in poverty.
28 April - 5 May, 2013
SOCAR buys media group in Turkey
Azerbaijan’s state oil company SOCAR has purchased Turkey’s Star Media Group, both companies said. Star Media Group, which comprises Star Newspaper and Kanal 24, is owned by Fettah Tahmince and Tevhit Karakaya. Star daily, founded by the Uzan Group in 1999, was transferred to the Savings Deposit Insurance Fund (TMSF) in 2004. The group was first bought by Turkish Cypriot businessman Ali Özmen Safa in a tender in 2006 and was later sold to Ethem Sancak. Tamince is a partner of the group since 2009. SOCAR had purchased Turkey’s petrochemical company formerly owned by the state in 2008. The SOCAR-Turkey ties include the Baku-Tbilisi-Ceyhan (BTC) oil pipeline that carries Azeri crude to Turkey’s Ceyhan Mediterranean oil hub, and the South Caucasus Pipeline that runs parallel to BTC and carries Azeri gas to Turkey and on to Greece. AZERBAIJAN|AGRICULTURE
Baku, Riga sign agricultural deal
Azerbaijan’s Agriculture Minister Ismat Abbasov and his Latvian counterpart Laimdota Straujuma signed agreement on co-operation in agriculture between the two countries, news agencies reported. They also discussed perspectives and development tendencies of agriculture. Touching upon the depth of co-operation between the two countries, Abbasov mentioned a number of concrete directions, including benefiting from Latvian practice in increasing of productivity of grain growing in Azerbaijan, export of agrarian products to Latvia, import of agrarian products, which are produced less the demand, veterinary and phytosanitary co-operation. In turn, Straujuma noted that Latvia was interested in co-operation with Azerbaijan not only at the government level, but also at the level of entrepreneurs. AZERBAIJAN|ENERGY
SOCAR to raise funds from Azerbaijani market
Azerbaijan’s state oil company SOCAR’s Kulevi oil terminal located on the Black Sea coast of Georgia intends to create breakwater infrastructure, a statement posted on the website of the terminal read, AzerNews reported. Considering that the Kulevi port is located in the Black Sea coastal zone, which is during storm periods mainly under the effect of sea waves from west and south-west, construction of breakwater structures was suggested in design documentation and social and environmental impact assessment reports and has always been one of the main priorities for the terminal’s management, the statement said. The construction of breakwater structures will reduce the intensity of waves in inshore waters and thereby reduce erosion in the coastal zone neighbouring on environmentally sensitive territories, and increase the safety of navigation in the Kulevi port. According to the statement, a tender for selecting a contractor for design and construction of the breakwater infrastructure in the future was announced at the end of 2012. Currently, all the proposals are under consideration. The Georgian Kulevi port terminal was put into operation in May 2008. Transshipment of petroleum products began in June. Its total capacity is 10 million tonnes of oil per year, including 3 million tonnes of oil, three million tonnes of diesel fuel and four million tons of fuel oil. GEORGIA|BUSINESS
SOCAR plans new infrastructure at oil terminal in Georgia
View of Azerbaijan’s Sangachal oil and gas terminal. | NEW EUROPE
The terminal can accommodate up to 168 tank cars. The tank farm’s fuel capacity is 320,000 cubic metres with the possibility of increasing it to 380,000 cubic metres. For loading operations there are two berths for receiving tankers with loading capacity of up to 100,000 tonnes. The terminal has its own railway station where 180 oil tank cars can be placed for discharging. The terminal has a number of technological constructions and mechanisms intended for receiving, storage, and loading oil and oil products to tankers, as well as auxiliary and industrial, domestic and administrative buildings, which makes the operation of the terminal very efficient. The facility has high-level automation and mechaniza-
tion of industrial processes. In related news, the National Olympic Committee (NOC) of Georgia and SOCAR signed a memorandum of cooperation. The signing ceremony was held on 24 April at the head office of SOCAR in Tbilisi, Trend reported. In the framework of the memorandum the parties will finance a variety of Olympic programmes and projects, participation in sport events organized by Georgian NOC and the International Olympic Committee, the normal functioning of the NOC, social assistance to athletes and coaches, etc. The memorandum signed by SOCAR Georgia Director Mahir Mammadov and National Olympic Committee of Georgia President Leri Khabelov.
Azerbaijan’s oil company SOCAR has confirmed plans on the debut issue of bonds in manats and named the purposes for which it will raise finances through such an issue, news agencies reported. SOCAR keeps an interest in issue of corporate bonds denominated in mantas, Vice President Suleyman Gasimov said. “At that, not SOCAR itself will raise funds through such bonds, but its two joint ventures - SOCAR-Umid (created for development of gas condensate field Umid) and a JV to be established for development of Sumgait chemical industrial park. The bond issue on the Azerbaijani market will be carried out as soon as these JVs are ready for spending resources. We’ll try to issue manat bonds in 2013, but perhaps the issue will take place already next year,” Gasimov said. “Earlier this year SOCAR president Rovnag Abdullayev has set the task of drilling a third well on Umid field. Drilling operations have been ongoing, and the drilling of the third well is nearing completion. Under Abdullayev’s order, part of the finances from the issue of eurobonds for $1 billion, placed by the Company in 2013, will be used for construction of a new platform on Umid field and the drilling of new wells. Only after specifying gas and condensate reserves in the field it may be issued manat bonds for financing the development of Umid field,” Gasimov said.
Tbilisi, Beijing to increase business ties
The Georgian-Chinese business forum in Tbilisi, which was attended by 40 Chinese companies, is an important step in the development of economic relations between the two countries, China’s Ambassador to Georgia Chen Jianfu said at the opening of the Business Forum, expressing his satisfaction with enhancing of economic relations between China and Georgia. GEORGIA|BUSINESS The aim of the business forum was acquaintance with Chinese companies and establishing contacts for further cooperation between businessmen of the two countries. The event was attended by representatives of Chinese companies operating in sectors such as industry, energy, real estate and agriculture.
Within the forum bilateral meetings of businessmen were also held. Chinese business is already involved in Georgia’s economic sphere. In particular, the Chinese companies are involved in the construction of roads, as well as sports and residential complex within the European Youth Olympic Games to be held in Tbilisi in 2015.
Georgia, Ukraine to boost regional co-operation
On 26 April, Tbilisi was expected to host the Georgian-Ukrainian Business Forum. The event was organized by the Georgian-Ukrainian Trade and Economic Council, the National Investment Agency of Georgia, Partnership Fund and Ukrainian company Soft Rating Consult. Georgian Prime Minister Bidzina Ivanishvili was due to open the business forum, Trend reported. The event was also expected to be attended by ministers of economy, finance, regional development and infrastructure of Georgia. Representatives of about 50 Ukrainian companies were also due to take part at the forum.
Ukrainian delegation, in particular, was expected to be be represented in the following areas: banking and financial sector, agriculture, industry, real estate, information technology, consulting, transport and infrastructure. Parallel panel sessions were also due to be held within the forum on SAP programmes and technological innovation.
28 April - 5 May, 2013
Hungarian, Moldovan officials meet in Budapest
On 23 April, Russian Defence Minister Sergey Shoigu said his country will deploy anti-aircraft missile and fighter jets to a new air force base in Belarus. “We are starting to look into the plan to create a Russian air force base in Belarus with fighter jets,” Shoigu said after holding talks with Belarusian President Alexander Lukashenko. Shoigu said that a Russian air force headquarters in Belarus would be established by 2014 and test flights by one wing of fighter jets would also begin in the same year. He added that Russia’s four battalions of S-300 surface-to-air missiles would be sent to Belarus in 2014. “We hope that in 2015 there will be a regiment of warplanes [in Belarus] which will serve to defend our borders,” he said. Russian President Vladimir Putin has been seeking to strengthen Moscow's military and economic ties with other former Soviet republics since he came to power in 2000. The deployment would boost Russia's military presence in Belarus, which is a key military and security partner for Russia. Located between the firmly Westernoriented Poland and the Baltic states of Estonia, Latvia and Lithuania, Belarus has long been used to project Russian military power and is seen by Moscow as a crucial buffer state. Moscow and Minsk agreed to set up a joint air defence system four years ago BELARUS|NUCLEAR
Russia to send missiles, fighter jets to Belarus
On 23 April, Hungary’s State Secretary for Foreign Affairs and External Economic Relations Péter Szijjártó met with Moldova's Deputy Economy Minister Octavian Calmic before a meeting of the Hungarian-Moldovan Joint Economic Committee in Budapest, news agencies reported. They discussed forging closer ties in the energy and air travel sectors. The state-owned Hungarian energy group MVM could participate in the development of Moldova's high-voltage electricity network, and talks are underway on the launch of a direct flight between the two countries operated by Hungarian low-fare airline Wizz Air. An agreement on the professional issues involved with the direct flight is in sight, but financial preparations are underway and the two governments’ must still decide whether to participate in the launch with “financial compensation,” he added. Hungary's Aeroplex is putting together an offer to undertake maintenance work on the A320 aircraft of Moldova's national carrier, he said. BELARUS|ECONOMY
New Russian fifth generation stealth fighter T-50-2 by Sukhoi design bureau performs at the MAKS 2011 airshow in the town of Zhukovsky , Moscow region, Russia, 18 August 2011. | EPA/SERGEI CHIRIKOV
Ministry expects inflation under 1% in April
in response to US plans to deploy an antimissile shield in Europe. There are two Russian military installations in Belarus at the moment, a radar station that is part of the missile strike warning system and a communications hub, which provides links to Russia’s nuclear submarines. Shoigu's remarks coincided with a meeting in Brussels at which Russian Foreign Minister Sergei Lavrov, who met
with US Secretary of State John Kerry, told NATO that Moscow still wants guarantees the system would not be used against Russia, despite a recent decision to scale it back. Russia has an air base in Kyrgyzstan, in Central Asia, and is the most powerful nation in a security alliance of ex-Soviet states, the Collective Security Treaty Organization (CSTO).
Belarus wants OSCE post-Chernobyl co-operation
Belarus wants the Organization for Security and Cooperation in Europe (OSCE) countries to show solidarity in addressing the Chernobyl problems, Permanent Representative of Belarus to the OSCE Valery Voronetsky told a session of the OSCE Permanent Council to mark the 27th anniversary of the Chernobyl nuclear accident, BelTA quoted the Belarusian diplomatic mission in Vienna as saying. Voronetsky recalled the tragic UKRAINE| ENERGY consequences of the major technological catastrophe in human history and the enormous damage caused to Belarus by radioactive contamination of almost a quarter of the country. He emphasised that the mitigation of the Chernobyl impact is a priority of the Belarusian state policy, and briefed the meeting participants on the measures the country undertakes to minimize the consequences of the catastrophe, to pro-
mote rehabilitation and sustainable development of the Chernobyl-hit regions. Voronetsky highlighted the importance of international cooperation in mitigation of Chernobyl consequences and post-Chernobyl development. Joint efforts have helped achieve a lot. Yet, there is still a lot of work ahead. In this context, he called upon the OSCE and its participating states to show solidarity in addressing these issues.
Belarus’ Economy Ministry of Belarus expects the inflation under 1% in April, Deputy Economy Minister Alexander Yaroshenko told media on 25 April. Inflation in Belarus made up 1.1% in March 2013, 1.2% in February and 3% in January. “We expect that in April the rate of inflation will be lower than that in March. The first weeks of April testify to the fact,” Yaroshenko said. In January-March 2013 the inflation stood at 5.4%. According to the Deputy Minister, almost half of the inflation rate for the three months (2.6%) was due to the changes in the tax policy. “Tax relief on telecommunication services was abolished, and the excise taxes on alcoholic beverages were raised,” he said. The excise tax on liquor products was some of the most inflationary factors, he said. “We must understand that this inflation was due to the changes in the legislation, and due to the measures we had to take to honour our SES commitments in part of harmonisation of our pricing policies with Russia and Kazakhstan,” Yaroshenko said. BELARUS|DIPLOMACY
Belarus, Akita Prefecture to step up co-operation
On 24 April, Russian has monopoly Gazprom warned European companies on against what it alleges are illicit resales of Russian gas to Ukraine, news agencies reported. Gazprom spokesman Sergei Kupriyanov said these Ukrainian purchases were “opaque” and should be examined, as the gas doesn't flow from Europe to Ukraine but is taken off while crossing
Gazprom to probe Ukraine's gas purchases from EU
the country. “Physical reverse from Europe to Ukraine is simply impossible-there's no separate pipeline,” Kupriyanov told reporters. “For this reason, it can only be opaque ‘paper’ operations, the legality of which needs to be examined. If our transit gas is used for the virtual ‘reverse,’ that's a direct violation, which will have to be answered for.”
Ukraine has for months pressed Gazprom for a discount on supplies. “We are sure that serious European companies won't take part in dubious gas schemes with Ukraine,” Kupriyanov said. Ukraine announced in late March that it had begun importing gas via Hungarian pipeline connections under a contract with Germany’s RWE.
Ambassador of Belarus to Japan Sergei Rakhmanov visited Akita Prefecture in south-eastern Japan on the invitation of the Japan-Belarus Friendship Society on 22-24 April, BelTA quoted the Belarusian embassy in Japan as saying. A ceremony of appointing Tohoku M. Sasaki Honorary Consul of Belarus to the region took place during the visit. The Belarusian Ambassador delivered a speech, which was followed by the demonstration of the Belarusian dosimetry equipment that can be imported to Japan in the future. Partaking in the event were about 100 representatives of local government agencies, business community and general public. Rakhmanov met with the Governor of Akita Prefecture. The meeting officials discussed the matters of economic, R&D and humanitarian co-operation. The sides agreed to further the Belarus-Akita Prefecture co-operation and discussed the organization of the visit of the Akita Prefecture businessmen to Belarus. They also reviewed the possibility of signing a co-operation agreement between Akita Prefecture and one of the regions of Belarus.
Tajikistan | DIPLOMACY
28 April - 5 May, 2013
In Search of Oxus Treasure – Trip to Takhti Sangin
In the extremely beautiful spot where the Vakhsh and Pyanj rivers flow together and give birth to the Amu Darya lie the ruins of the Takhti Sangin temple. Once a crossroads of the old silk routes, this previously dynamic and developed settlement is nowadays a place where shepherds stop to rest and occasional visitors come to explore. The sun rises over the valley in front of Takhti Sangin, and the full moon’s reflection on the river projects onto it at night. The temple has a mild and cool wind, streaming from the beautiful valley created by two rivers merging into one. Takhti Sangin is a Zoroastrian temple of the Achaemenid Persian period. It used to have constantlyblazing flames at both sides of the entrance, a place to pray and a sacrificial altar. During the silk-road period it was a center where merchants visited by land and river. Here, it is believed, the Oxus Treasure pieces were found in 1877; beautiful objects of incredible elegance and beauty.
US to stay in Afghanistan and Central Asia beyond 2014
The local museum in the Qabodiyon district has some pottery and column stones from Takhti Sangin, and pictures of the Oxus Treasure collection from the British Museum in London. Local guide, Quvatali, tells me that the Takhti Sangin temple has various legends. Signs of different religions have been found, indicating that the temple existed as a strategic point of trade between the east and west. An old legend says that there is a tunnel below Amu Darya connecting both banks. Another legend says a daughter of an ancient King Cyrus (in Persian – Kurush) found peace of mind and a cure for her disease by residing along the Amu Darya River. This trip was memorable for me, as it coincided with replicas of the Oxus Treasure being handed over to the Tajik government by the British Museum. Visitors to the new Tajik National Museum will be able to admire these high-quality golden replicas just as many thousands of visitors from all over the world admire the originals in the British Museum. But, unfortunately, the story of the temple is different. Despite its historical significance and beautiful surroundings, its location right in the border with Afghanistan means that few can currently get permission to visit. But there are many sites of significant historical heritage in the area and it takes two days to explore Takhti Sangin and other small castles along Amu Darya river and Tigrovaya Balka Nature Reserve. I hope that one day Takhti Sanginwill experience a revival of the significance it held in the past and that visitors from around the world will be able to visit and enjoy a place of great beauty and significant historical importance. Please click on the picture to see Flickr photo gallery of the trip to Takhti Sangin. A blog post from the UK in Tajikistan site exploring the country further for public diplomacy reasons.
Traffic police officials inspect the site where a passenger bus collided with a fuel tanker truck in Kandahar province on 26 April, 2013. A passenger bus in Afghanistan collided Friday with a wrecked fuel tanker left on a road after a Taliban insurgent attack, killing at least 45 people, officials said. |AFP PHOTO/Noor MOHAMMAD
ASTANA - As the withdrawal of the coalition forces from the long-suffering Afghanistan is getting closer, the White House’ visits to Central Asia have become more frequent. Last week, the region was visited by Assistant Secretary of State for South and Central Asia, Robert Blake. At a meeting with the Kazakh journalists in Astana, he stated clearly his country’s stand on the future plans with respect to Afghanistan. The US will continue its presence in Afghanistan beyond 2014, US Assistant Secretary of State for South and Central Asia Robert Blake stated clearly and plainly at a press-conference in response to a reporter’s question. “We will definitely remain in Afghanistan and the Central Asian region beyond 2014 and will do our best to preserve stability and peace not only in Afghanistan, but in the entire region,” Blake said. Having said that, he clarified that president Obama had not made a decision as to the size of the contingent remaining in Afghanistan after 2014. “Since no such decision has been made yet, it is not clear what military
By Kulpash Konyrova
forces and transit centres will be kept in the Central Asian region,” he added. The Assistant Secretary of State thanked all those neighbouring countries of Afghanistan that have been making steps to involve Afghanistan in an economic community. “I am pleased to learn that Kazakhstan and Turkmenistan are going to build a road that will be, in the future, integrated in the railway system of Afghanistan,” Blake said. He also thanked the leadership of Kazakhstan for supporting the Afghanistan integration processes and for hosting in Almaty this week the Istanbul Process Conference to discuss the Afghan issue. Incidentally, the next day after Robert Blake’s visit, the Afghan theme was again a subject of discussions of the leading experts who arrived in Astana for the XI Eurasian Forum. Speaking at the Forum, President of Kazakhstan Nursultan Nazarbaev said that the withdrawal of the NATO forces from Afghanistan in 2014 would not have disastrous consequences in Central Asia. “Our region, like the world on the whole, is entering a time of changes, and
the issues of regional security are very pressing on a global scale. I will say right away that I do not accept the disastrous theories that we hear around us. I do not believe count down is on for the hour “X” where the withdrawal of the coalition forces should start in 2014”, - Nazarbaev said Thursday opening the XI Eurasian Forum. According to Nazarbaev, the mission of the coalition forces in Afghanistan has brought positive results. “The immediate danger in the region has been reduced considerably and localised. However, there still remain problems in the process of the inter-Afghan settlement. But even there, we have seen some progress,” Nazarbaev said. “I always emphasise the importance of the post-conflict measures taken by the world community to rebuild peace and to develop Afghanistan’s economy. This unfortunate country has been in a civil war since 1979, and anyone born there thirty years ago has held nothing but a gun in his hands. Considering the low education of the population, the Afghan people should be returned to work, and we should help rebuild the economy of their country,” the Kazakh President said.
28 April - 5 May, 2013
Gazprom Neft signs $1 billion loan agreement
By Kostis Geropoulos
BRATISLAVA - NATO should not resign on building the missile defence shield in order to appease Moscow since the system is not directed against Russia, the Czech Republic’s former defence minister, Alexandr Vondra, told New Europe on 19 April on the sidelines of the GLOBSEC 2013 Bratislava Global Security Forum. “I think this is not directed against Russia and I don’t see any reason to resign on building missile defence shield as a way how to appease Russia. It would be a mistake,” Ambassador Vondra said. Moscow says the missile defence system the United States is deploying in Europe together with NATO, mainly to combat potential threats from Iran, may undermine Russia’s security and upset the post-Cold War balance of power. The Pentagon said in March it would station additional missile interceptors in Alaska in response to North Korean threats. At the same time, it said the US missile defence programme in Europe would be restructured. This means cancellation of Phase 4 of the plan, which called for the deployment of upgraded interceptors in Eastern Europe. “I think that there is a common understanding among the NATO members to build the missile defence shield so I would be strongly in favour of keeping the pace. I know that there is debate about resources but certainly this is something that the NATO should have,” Vondra said. He added that, according to the plan that was approved, it is not about RUSSIA|ECONOMY
Vondra urges NATO to keep missile shield
The Czech Republic’s former defence minister, Alexandr Vondra at the GLOBSEC 2013 Bratislava Global Security Forum, 19 April 2013.| GLOBSEC
deploying the missiles in the Czech Republic, it’s about deploying the missiles in Romania and in Poland. “Of course, it depends how this will develop further in the future but I don’t think that it is wise to change the system every year so it doesn’t help to make the alliance credible,” he said. Vondra’s statement came the same day that a senior aide to Russian President Vladimir Putin said Moscow and Washington remain at odds over US plans for an anti-missile shield in Europe. Two weeks ago, White House national security adviser Tom Donilon met Putin and senior Russian officials in
the highest-level face-to-face talks since Obama began a new term in January at a time of tense relations with Moscow. “There is no progress on missile defence,” Putin’s foreign policy aide Yuri Ushakov said on 19 April. US missile defence plans have been an irritant in US-Russia ties for years. However, in a sign of an effort to improve relations, the White House said after Donilon’s talks with Putin that the US and Russian presidents would hold a bilateral summit in September, when Russia hosts the G20 summit, in addition to meeting during a G8 summit in June.
On 22 April, the oil arm of Russian gas monopoly Gazprom, Gazprom Neft, signed a $1 billion term and revolving loan agreement with a group of banks. Funds available under the agreement are provided on an unsecured basis and shall be used for general corporate purposes of the company. The agreement comprises two loan facilities being an amortising $700 million term loan facility with a final maturity date falling five years from the date of the first utilization and a $300 million revolving loan facility with a bullet repayment after three years from date of the first utilization under the facilities agreement. The interest rate under the term loan facility is a sum of LIBOR and 1.75% per annum while for the revolving loan facility the interest rate is the sum of LIBOR and spread ranging from 1.2% to 1.5% per annum depending on the level of utilisation of the revolving loan facility. The agreement was signed with BNP Paribas (Suisse) SA, Commerzbank Group, Crédit Agricole Corporate and Investment Bank, Den Norske Syndicates, HSBC BANK PLC, Mizuho Corporate Bank, Ltd., RBI Group, Sumitomo Mitsui Banking Corporation Europe Limited, UniCredit as Mandated Lead Arrangers and Original Lenders. Utilisations under the facilities agreement are subject to the company’s Board of Directors approval. Alexei Yankevich, member of the management board, deputy CEO and CFO of Gazprom Neft, commented: “The structure of the facilities agreement combining both term and revolving loan facilities is unique for the Russian market and provides the company with additional flexibility to manage its liquidity more efficiently. Double oversubscription reached in the course of the execution demonstrates investment attractiveness of the company and positive perception of the innovative structure in the market. The facilities agreement represents an important step in the company’s debt optimization and diversification programme”. RUSSIA|ECONOMY
Medvedev: companies suffer little in Cyprus crisis
On 22 April, Russian President Vladimir Putin said his country’s economy is showing “alarming signals” of a slowdown and called for the government to draw up a package of measures to boost economic growth. “I expect specific proposals for measures that would help us ensure stable economic growth, protect ourselves from negative fluctuations in the world economy, reduce risks of production decline in key industries, and stimulate business activity,” Putin said. “The production decline and crisis developments in the world financial system may affect, and are actually affecting, our own economy as well as we can see, and we must be ready for this,” he said. Slava Smolyaninov, chief strate-
Putin ‘alarmed’ by economic slowdown
gist at Russia’s Uralsib Bank in Moscow, told New Europe on 23 April it’s not a big surprise that the alarming signs are there. Technically, the Russian economic growth in February has stalled. “In March, the situation seems to have improved a little bit but it’s clearly far from the 5% growth that the government was talking about before. The alarming signs are everywhere in the sense that no matter what you take - starting from the rail cargo shipments to credit growth to industrial production - clearly the numbers are much worse than they were a year ago,” Smolyaninov said. That is worrisome for Putin, who pushed for economic growth to make up for his falling popularity. The Kremlin leader said that while
On 17 April, Russian Prime Minister Dmitry Medvedev said state and private companies have not suffered seriously in the banking crisis in Cyprus. “Speaking about the scale of damage, I can put it bluntly, there were no losses. I mean the state-run structures and even a considerable part of private businesses,” Medvedev told State Duma in his annual address on the government’s work. He criticised some companies for their failure of informing the government about their transfer of funds to off-shore tax heavens. RUSSIA|DIPLOMACY
many were proposing using budgetary measures as a way to boost growth, this would require amending Russia’s recently adopted fiscal rule, which he warned would be risky for the economy. “It’s obvious that for solving the given task not only budgetary measures are necessary,” he said. “[Growth] began to slow, primarily because foreign demand was getting worse,” Putin said. Smolyaninov noted that Europe is Russia’s largest trading partner and the largest consumer of the Russian-produced commodities. “There is very little doubt that the recession in Europe influences the Russian economy in a very negative way,” he said.
Kerry, Lavrov meet at NATO-Russia Council
US Secretary of State John Kerry spoke with Russian Foreign Minister Sergei Lavrov on the sidelines of the NATO-Russia Council meeting at the NATO Headquarters in Brussels on 23 April. Officials said those talks were expected to include a discussion of the ethnic Chechen brothers accused of the Boston Marathon bombings. Russian authorities — who have long battled an Islamist separatist movement in Chechnya — had alerted US officials to suspected extremist links of the elder brother in 2011, but American investigators decided he was not a threat. Earlier, Lavrov also reminded that lifting the embargo on weapons supplies to the Syrian opposition is a violation of international law and expressed hope that “reasonable” European states would prevent such a step.
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