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21ST YEAR OF PUBLICATION
SOCHI Page 27
9 -15 FEBRUARy, 2014
by Ariti-Marina AlamanouPage 07
EU-CHINA SPECIAL REPORT
Against the backdrop of recent strategic decisions in Beijing and the EU-China summit that marked the beginning of a new 10-year cooperation agreement, New Europe is focusing on this new era in the relationship between two of the world’s major actors. China and the EU are currently implementing extensive reforms offering extensive areas for co-operation that may provide synergies useful to both. European and Chinese experts, including EU Commissioner for Agriculture and Rural Development, Dacian Cioloș, and the head of the Mission of China to the EU, Ambassador Yang Yanyi, analyse these opportunities.
A New Era of Cooperation and Understanding
As we move towards creating a European Prosecutors Office, part of a grander vision of Europe, will the member states provide enough support? It may also open a debate into a bolder future for the EU, criticised for being too timid and lacking ambition.
interview with Daniel Guéguen Page 05
"Bureaucracy working for itself "
Stagnation by design
‘Too difficult’ for EU to examine corruption within
VASSO KOLLIAPage 10
Gender inequality in Europe
BY CHRISTIAN ENGSTRÖM, MEPPage 06
The fundamental framing right
he long delayed report into corruption in the EU was finally released by the European Commission in their Berlaymont headquarters by Commissioner Malmstrom. The report revealed that corruption costs the EU €120 billion a year, mainly by impropriety in public procurement. Malmstrom said, “Corruption undermines citizens' confidence in democratic institutions and the rule of law, it hurts the European economy and deprives States from muchneeded tax revenue.” The pre-announced chapter on the evaluation of corruption levels within the EU institutions, which was also identified as a problem that needed to be dealt with. Asked about this, Commissioner Malmstrom replied that finally “it was not possible to open this chapter, because it would lack credibility since it would be a “self-evaluate” process. The report was unusual. There was no ratings of individual countries, against standard practice and information about individual countries are presented as a series of ‘factsheets’ and not collected together. But the failure to include the EU institutions was concerning many. Transparancy International said, “"We would have hoped that the Eu-
Lukewarm reception for overdue anti-corruption report.
ropean Commission also took a look at corruption risks at European level. We think that any government and thus also the EU institutions should have the capacity to self-assess.” The European Ombudsman, Emily O’Reilly also criticised the omission, "The EU administration has to live up to the very highest standards, especially when it comes to transparency, strict rules concerning conflicts of interest, and high integrity standards in the area of public procurement," said O'Reilly. She continued, "In most of these areas, the EU institutions already
have high standards in comparison to many national administrations. I encourage the Commission to take account of the forthcoming work of Transparency International on the integrity system of the EU institutions and to include the EU institutions in the next Anti-Corruption Report." However, a special Eurobarometer survey, published with the report, showed that almost half of Europeans believed that bribery was common in public tenders, over half feel that corruption has increased in their own countries.
9 -15 February, 2014
A growing number of people these days are starting to wonder what’s wrong with the political leaderships across Europe, as proliferating scandals expose widespread corruption among politicians and civil servants. On February 3, the European Commission published a new report about corruption in the European Union and what the member states are doing to fight it. Even though the report, in a purely diplomatic manner, is very general and makes only vague references, the mere fact that it was drafted is of great importance. It is a recognition that a problem exists. Another fact about the report is that it avoids making any reference to a specific country. It is a fact that is being interpreted by some political analysts as a courtesy concession of sorts to the usual suspects - the countries of the south. But not so fast. The entire house of Europe from north to south and east to west - does not want to have its dirty laundry aired. Corruption exists in every country, at different levels of course, but present and active nonetheless. Corruption corrodes political parties via the donations they accept and it taints politicians in many ways and constitutes a major threat to democracy. It is common knowledge that you have to “oil someone’s palm” in order to get something in many countries. This is mostly true in the southern countries. But let us not forget the most recent scandals involving some huge companies in the rich countries of the north that quite openly bribed public servants in order to push their products. What is more, corruption also rears its ugly head in the role of different personalities of organised crime rings that have managed to infiltrate mainstream politics through donations to political parties or to charity organisations. This is the reality in many countries. In the current financial crisis, corruption emerges as a particularly crucial problem and is a real threat to the foundation of our civilisation and our dream of a European Home. Corruption has also fuelled the growth of eurosceptic movements gaining ground in Europe and more specifically the far-right at the local level. Corruption is a direct threat to democracy. It helps to constitute a class of privileged people - people who can think in a different, more “clever” way. This privileged group is made up smiling politicians, unscrupulous businessmen and high and medium level civil servants and intermediaries of all kinds. It is a group that has formed a modern Mount Olympus in the eyes of the average citizen. Of course, it is a world with hierarchy in which the big fish eat the small fish. But all of its inhabitants are connected by the same thing: their use of non-transparent and illegal methods in order to secure wealth and privilege. The message that is being sent to the average person - the voter, the person who pays taxes and who backs the implementation of the programmes of their government - is that Ancient Greek Mythology is back and that there is a modern-day Mount Olympus. This gives rise to the questions: Why did the European Commission publish such a vague report? Why didn’t the report provide details or specific cases of corruption and outline what needs to be done to fight it? Why didn’t the commission outline a plan of action in order to combat corruption? Is there any specific anti-corruption policy? Why doesn’t the commission conduct a public opinion survey? Wouldn’t it be useful to know what corruption means for the average citizen? If not, Vox Populi could be expressed in a rather bitter, if not dangerous, way in the upcoming European Parliament elections.
Vox Populi vs Mount Olympus?
The Shooting Gallery
If only there was some kind of common message we could send to Brussels... AFP PHOTO / PRESIDENIAL PRESS-SERVICE POOL / MYKHAYLO MARKIV
cyan mage yello black
12th Year, Number 559
recruiting 780 new staff at the Commission. Presenting the updated budget, Commissioner Michaele Schreyer said: “With this move, the budget is ready for enlargement. The year 2004 will see the phasing in of all expenditures agreed and the opening on equal grounds of all EU programmes for our 75 million new citizens.” But EU Monetary Affairs Commissioner Pedro Solbes warned the 10 countries slated to join the EU in May “need to reform and consolidate their public finances” as well, if they want to adopt the Euro currency in future. “Sound public finances are, also for the new member states, a prerequisite to address the longer-term challenges of ageing populations,” Solbes said. But the interesting point to note is that the actual budget deliberations will start in 2006 and the “new members” will be full members with voting rights then. p. 9
THE EUROPEAN WEEKLY
Commission updates budget
Real task of dealing with EU coffers in 2006
February 8 - 14, 2004
New Europe bylines Parma to host EFSA,
By Giuseppe Nistico, p. 5
he European Commission last week approved a 12 billion Euro package earmarked for the 10 future member states in 2004. And Brussels indicated that there was more in the pot, because there is a “considerable margin of 11.8 billion Euro” left before the EU hits its maximum spending limit. Within the budget agreed, there is 770 million Euro to spend in order to prepare the EU institutions for the enlargement to 25. This will include
US and Turkey strive to deepen relations,
By Mevlut Katik, p. 34
RS A E Y 0 1 NE AGO
Ten years ago, the centre-right European Peoples’ Party promised a transparent Europe. Their VP predicted the outcome of the 2009 elections when he declared, “We are the clear majority of today and will be the great majority of tomorrow.” Then president, Hans-Gert Pottering said that the party would not accept a Commission president “unless the results of the election were taken into account.” The commission found €11.8bn in the budget as preparations began for the new ten members. Russia was worried over the eastward expansion of the EU. We were also discussing the limitations being put on the new citizens freedom of movement, supposedly a fundamental freedom of membership. The Latvian government collapsed after failing to agree a coalition and the PM was accused of authoritarianism.
Real convergence needed
Both the European Central Bank (ECB) and the European Commission (EC) do not chew their words when it comes to the introduction of the Euro money. Editorial p. 2
Reiterates parliamentary voice in the nomination of Commission
EPP promises transparent Europe
The two-day 16th congress of the European People’s Party Congress that took place in Brussels February 4-5, 2004 saw a glittering gathering of delegates from 64 political parties, including 12 prime ministers, opposition leaders, regional authorities, several European commissioners and other personalities. The congress slogan “The EPP: Your majority in Europe,” reflected the fact that the EPP is Europe’s largest political party. The President of the EPP-ED Group in the European Parliament, Hans-Gert Poettering, called upon the delegates to work intensively during the coming months to ensure that the member parties will win the European elections and that the EPP-ED Group can remain the largest political group in the European Parliament. Poettering reiterated that the group would not, if it remains the largest group in parliament, accept the appointment of a Commission president unless the results of the election have been taken into account. Costas Karamanlis, president of Nea Demokratia and vice president of the European People’s Party, in his address stressed: “We are the clear majority of today and will be the great majority of tomorrow.” With an eye on the upcoming Greek national election next month, Karamanlis exuded confidence, saying, “In about a month, Nea Demokratia, the historical European Party of Greece that I have the honour to lead, will join you in this avenue of change - this time, as another government of the EPP family.” p. 3
Crunch in labour conflict
Germany’s most powerful labour union, IG Metall, resumed talks with representatives of the country’s biggest industrial groups last Monday amid pinpoint strikes. p. 15
Meciar to run for president
Former Slovak Prime Minister Vladimir Meciar will be a candidate in the April 3 presidential election, he recently confirmed at a special press conference in Bratislava. p. 28
XVIth EPP Congress in session. Seen above Joelle Milquet, chairman of the Belgian CDH Party
Coalition collapses in Latvia
atvian Prime Minister Einar Repse’s government L resigned after attempts to form a parliamentary majority failed last Thursday sinking the Baltic state deep into political crisis. Repse’s centre-right cabinet, whose New Era party had governed with a four-party coalition for 14 months, had lost its majority in parliament two weeks ago after the liberal First Party of Latvia (LLP) withdrew from the coalition. Repse initially continued as acting head of government while trying to win a new cabinet partner. “Everything was in free fall. In the interest of the state this situation could not be continued,” he said. The crisis was overcome but broke out again after members of the ruling First Party joined an opposition initiative to set up a parliamentary commission to probe Repse’s financial dealings. President Vaira Vike-Freiberga now has to nominate a new candidate for the office of prime minister within the next three weeks. “I first want to talk with all parliamentary parties,” she said last Friday. In total eight parties are represented in the country’s Saeima assembly. Repse’s New Era holds 26 of the 100 seats in parliament. His style of government had frequent been criticised as to authoritarian in the past. The Baltic country is due to join the European Union on May 1.
The EU of many speeds and people
limitations on the right of the newcomers to settle on their soil. In this way the 75 million people of the new member states will be something like the pariahs of the wealthy Union that jealously protects the right of the “old” people of Europe. It must be reminded that the very idea of the internal market is the free movement of labour, capital and goods. Only in this way will the European economy take full advantage of the development potential that the 25 countries have as an integral economic entity. So in the first two years following the accession of the new member states, access to the labour markets of current member states will depend on national measures and policies, as well as bilateral agreements they may have with the new member states. Member states have no obligation to notify the Commission formally of the measures to be taken.
Moscow worries about bigger EU
Less than three months before the European Union’s historic enlargement to include 10 new member states, Russia expressed worries concerning possible negative consequences caused by expansion. p. 35
Despite the fact that the free movement of persons within the European Union is one of the fundamental freedoms guaranteed by Community law and includes the right to live and work in another member state, the reality for the citizens of the 10 new countries will be totally different. After the enlargement on May 1, there will be transitional periods limiting the free movement of workers from new member states, which have been set out in the Accession Treaty. In reality the 15 old member states of the EU will introduce their own legislation limiting the right of the citizens of the 10 new countries to live and work in another state. All this will end up in a mosaic of laws and there will be confusion over who has what right. Britain, Sweden, Denmark and The Netherlands, which had initially said they would open their borders to the newcomers, now contemplate introducing severe
Odessa-Brody operation on
The Ukrainian cabinet has decided that the Odessa-Brody oil pipeline will be operated as originally planned, with the oil pumped through it from Odessa to Brody, and not vice-versa, Deputy Prime Minister Andry Klyuyev said. p. 41
Australia $3.4, Austria EURO 1.81, Balkans EURO 4, Belgium EURO 3.50, Holland EURO 2.69, Central Asia USD7.5, Central Europe USD5, Canada $5, Denmark: DKK 19,95, Eastern Europe USD7.5, France EURO 3.04, Germany EURO 3.57, Greece EURO 4, Hungary HUF430, Japan Y900, Italy EURO 3.62, Nordic countries USD7, Pacific Rim USD8.5, Russia USD 4, Switzerland
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9 -15 February, 2014
Corruption in the EU: European EU staff ask ‘Are we all criminals now?’ Commission goes diplomatic
Some Berlaymont staff fear pretty much everything - others laugh
By Andy Carling Those of us who work around the EU institutions are used to a certain sense of ‘entitlement’ from some of the staff. Some take this and the outrage of the puffed up bureaucrat to quite exceptional levels. This is not the behaviour of all and a significant part - often made up of the more competent end of the ability spectrum, are aghast and horrified by some of their antics. A campaign - Save Europe - has been set up by the more hyperventilating staff. Of course they interpret saving Europe as saving their perks and privileges. Well, not saving exactly, more like ‘increasing.’ We are unable to use the descriptions of their message sent by many people in the Commission who are more than alarmed, because of the difficulty of translating extreme profanity. In a recent email Save Europe sent to staff, they asked “Are we all criminals now?” Interesting question. But what has upset the delicate sensibilities of the Saviours of Europe? Having their passes checked. Their email continues by describing the utter Hell of their lives: “Your access card: an electronic bracelet authorising you to enter your own home under surveillance. Your workplace: “a prison under maximum surveillance”. Your employer: is he anticipating political criticism of his application of the 40 hours? It is a pity that he is not so rigorous about other matters.” That’s the issue, having to work 40 hours a week. Their whining continues, Because, although we have a statutory obligation to work 40 hours a week, the Staff Regulations in no way provide for methods of control worthy of the most totalitarian legal systems; they do not all suggest that we be treated like convicted criminals released on probation. In fact, this is what awaits you: you will have to go through a “badge check” when entering each building (as at present) but also each time you move from a “social space” (meeting room, atrium, ...) to an “administrative space” (office). Security gates will be installed to isolate work zones like prison gates.” It gets worse. “The cherry on the cake: if a meeting room is situated near your cafeteria, you will have to go through a “badge check” to get into the cafeteria and then again to return to the “administrative space”. Shouldn’t someone inform Amnesty International? This interferes with their human right to subsidised snacks and booze. “So what about “convivial” working meetings which are held in cafeterias? This is not a flight of fancy but already the reality in certain Commission buildings. The excuse of security will certainly be used by our administration, but what excuse?” The horror, the horror. But there are sinister motives at work say the indignant pen-pushers, “Perhaps we will one day move to the RFID technology principle used to pinpoint your location in the Commission buildings without your knowledge. This to satisfy Article 55 of the Staff Regulations which stipulates that: “Officials in active employment shall at all times be at the disposal of their institution”. The scale of the oppression staggers. “SAVE EUROPE says NO to this world of high surveillance, on occasion for security reasons, and invites you to boycott as far as possible this attack on our freedom of movement in our very place of work, through civil disobedience as practised by Gandhi.” If only Mandela was still alive! “SAVE EUROPE has called for concertation (sic) with its partners so that the intended controls are implemented in a transparent, coherent, equitable and respectful manner. “SAVE EUROPE calls for suspension of these controls until a control system identical for all is obtained.”
By Christina Vasilaki
he European Commission published Monday a report on the anti-corruption fight in the EU. Overall, the report’s aim was not to propose sanctions or new EU laws, but to give an overview of the corruption in all 28 member states and also offer countryspecific analyses and recommendations. Commissioner Malmstrom insisted that the report’s purpose was neither to rank the EU countries, saying that other organisations have already done this. Also, in an effort to stay diplomatic, the Commission avoided referring to specific countries during the presser or exposing corruption incidents over the report, repeating that it is better if at this stage the focus stays on “horizontal”, EU-wide issues. Transparency International, the NGO specialised in this area, had recently published a report ranking EU countries according to their corruption levels, with the “most corrupt” being Greece, Bulgaria and Italy, and the least Denmark, Finland and Sweden. In the national chapters of the EU executive report, one can find some examples which would be worth to be highlighted. One Italian case mentioned in the respective chapter, concerns an MP investigated for links with the Camorra – the Casalesi criminal group – related to the financing of his electoral campaign in exchange for exerting political influence at national level, notably in the area of recycling toxic waste. In the German chapter, the report states that German MPs are not obliged to declare their assets, without however, mentioning specific cases. It has been thoroughly reported earlier this year that Angela Merkel’s Christian Democrats received almost €700.000 in donations from major shareholders of German car company BMW. That happened just after Germany convinced the
Flying the flag for fighting corruption?
BELGA PHOTO HERWIG VERGULT
other Member States to agree to block EU car emissions law. In the general report the examples referred to stay even more vague. For example: “In two Member States” there is no restriction on anonymous donations. The publication of accounts of political parties is not mandatory in “one of these Member States”. Or, “in one Member State”, numerous cases of alleged illegal party funding at central or regional level were also linked to organised crime groups. The EC also dropped the pre-announced chapter on the evaluation of corruption levels within the EU institutions, which was also identified as a problem that needed to be dealt with. Asked about this, Commissioner Malmstrom replied that finally “it was not possible to open this chapter, because it would lack credibility since it would be a “self-evaluate” process. “We are trying to find ways to
do it. Probably it will be the UN’s anticorruption body, Greco, who will do it. But, don’t forget that we already have yearly reports from the Court of Auditors on this topic,” she said during a presser held on Monday. However, Transparency International is currently conducting an independent study on this subject which is due at the end of April and will look, amongst others, into the regulation of conflicts of interests, of whistleblowing and of public procurement at EU-level. “We would have hoped that the European Commission also took a look at corruption risks at European level. We think that any government and thus also the EU institutions should have the capacity to self-assess. The fact that they don’t do it leaves questions over the capacity or independence of the EU’s anti-fraud office (OLAF), which could have provided such an assessment,” TI told New Europe.
Emily O’Reilly, the European Ombudsman has asked the European Commission to include itself in the annual anticorruption report released yesterday by Commissioner Malmstrom. “The EU administration has to live up to the very highest standards, especially when it comes to transparency, strict rules concerning conflicts of interest, and high integrity standards in the area of public procurement,”said O’Reilly. She continued, “In most of these areas, the EU institutions already have high standards in comparison to many national administrations. I encourage the Com-
Ombudsman demands EU include own performance in next Anti-Corruption Report
mission to take account of the forthcoming work of Transparency International on the integrity system of the EU institutions and to include the EU institutions in the next Anti-Corruption Report.” A planned chapter on the institutions was dropped from the report, which was published after a long delay. The Commissioner said it was because of difficulties in being impartial. The report, released as a series of individual ‘factsheets’ that were not collated together, as in standard practice. Neither were member states compared or rated as is, once again, standard prac-
tice. Commissioner Malmstrom said there were “no appropriate tools” for making such a comparison. However, public procurement was a significant problem, said the Commissioner. The European Ombudsman said that they were investigating a number of complaints “for example about lack of transparency, alleged conflicts of interest, “revolving doors”, and other ethical concerns.” Ombudsman O’Reilly has written to the Commission asking for details on how it handles conflicts of interest. NEOnline
9 -15 February, 2014
Short film made on a shoestring gets half a million hits in weeks By Andy Carling While there has been criticism over some expensive videos produced for the European Commission, one of their biggest hits has more to do with independent film making than the commercial scale used by the big companies. The two-minute video encourages young Europeans to take advantage of Erasmus+, the new EU funding programme that will, over the next seven years, give four million Europeans the chance to study, train, gain work experience or volunteer abroad. Since the clip was published in early December, over half a million people have watched it, making it already one of the most-watched videos from the European Commission. But that’s not the most remarkable part. It was made in-house, quickly and cheaply. In fact there wasn’t a budget at all for it. The script was written by Dennis Abbott, spokesman for Commissioner Vassiliou and Jonathan Hill from her cabinet. Abbott then found Laura Houlgatte from the Federation of European Publishers and Tomas Kniukšta from DG Education and Culture to present the video, which they did free of charge because they support the project. The film was directed and edited by Raymond Maxwell and Stefaan Fortemps from the Commission’s production team. Commissioner Vassiliou also helped out by appearing in the film. Abbott says the aim was to try to reach a wide audience and not to produce something too institutional. He appreciates the teamwork that went into making the video – and subtitles in all EU languages will be added in the coming days. He says of the team, “I’m proud that we put something together that was quick, professional and popular – without needing to break the bank.” By using staff, in-house facilities and willing volunteers, Abbot may have pioneered a new approach that is good for viewers and great for taxpayers.
Erasmus+ video races to top of EU charts
MEPs criticises Council for time wasting on SRM
Parliament’s report on SRM was endorsed in yesterday’s plenary session
By Karafillis Giannoulis
he European Parliament backed the MEPs report on the Single Resolution Mechanism (SRM) for ailing troubled European banks. Parliament’s negotiators, led by Elisa Ferreira (S&D, PT), told MEPs that the EU Member States’ position has significant drawbacks which endanger the system’s core objective, which is that of ensuring that the taxpayer is not first in line to bail out for banks that run into trouble. The Member States are proposing an overly complex and politicised decision-making process for winding up banks, and a bank-financed fund which MEPs say would struggle to be credible in the first years of its life. The Group leaders of the European political parties stressed that the Council’s stance is leading to a waste of precious time. The Parliament proposal on SRM calls for an efficient decision-making system capable of winding up a bank over a weekend. It
The Euro logo is pictured in front of the European Central Bank (ECB) in Frankfurt/ Main, Germany. AFP PHOTO / DANIEL ROLAND
also entrusts key roles to the banking supervisor and resolution authority so as to ensure that the process of shutting down a bank is immune to political pressures. Moreover, it stresses the need for a bank-financed resolution fund to tap loans in its early years, so as
to ensure that its firepower would be immediately credible. Any loans taken out by the fund would be repaid by the banks, on top of their annual contributions to it. ECOFIN President and Greek Finance Minister, Yannis Stournaras said that there are fundamental principles on the SRM that both Parliament and Council agree on, stressing that all parties involved in the negotiations should now move ahead to adopt the legislation before the end of the parliamentary term. Speaking at the end of the second debate on Thursday, EP President Martin Schulz said that, upon request of the political groups, he would send a request to Council for an extraordinary ECOFIN meeting to be convened earlier than the one scheduled for the 17th February so as to avoid a two week delay to the negotiations. Until now the Parliament only voted the amendments to the Commission’s proposal and not closed the first reading, as an agreement with the Council has not been reached.
Parliament adopts regulation on seasonal workers
The European Parliament voted in favour of the EU Directive on seasonal workers, aiming to end exploitation and to prevent temporary stays to become permanent. On 5 February, Parliament’s rapporteur Claude Moraes (S&D, UK) said about the EU Directive on seasonal workers. “We have tried to say to the good employers of seasonal workers ‘carry on doing what you are doing’, but we have said to bad employers ‘you must have minimum standards to protect seasonal workers’…This is the first legal migration dossier since the Lisbon Treaty and we should be proud of it, because although it will not cure all the problems of vulnerable seasonal work and exploitation that we see repeatedly across the EU, we have broken a barrier and we have done it with great consensus.” According to the seasonal workers Directive, any application to enter the EU as a seasonal worker will have to include a work contract or a binding job offer specifying essentials such as pay and working hours. Moreover at MEPs’ request, it will also have to include evidence that the worker will have appropriate accommodation. In cases which accommodation is arranged by the employer, the rent must not be excessive or be automatically deducted from a worker’s wage, the adopted text underlines. Employers in breach of their obligations will face penalties and will have to compensate the seasonal worker concerned. Moreover, employers could also be banned from employing seasonal workers. European Commissioner for home affairs, Cecilia Malmström, welcomed the Parliament’s vote and said. “Migrant workers coming to the EU for seasonal work make an important contribution to the European economy. Yet, too often, they find themselves in vulnerable situations, exposed to exploitation. Under the new ‘Seasonal workers Directive’ they will be granted a secure legal status for the entirety of their stay. They will benefit from the same rules as EU nationals, notably on working hours, minimum wage, leave and holidays, as well as health and safety requirements.”K.G.
EU GM maize debate raging
GMOs, Genetically Modified Organism, are back on the agenda as France plans a new law to restore a ban on a modified corn maize which was annulled by its top courts will Germany reportedly plans to abstain from a Council vote on the cultivation of a new type of genetically modified maize. After the annulment politicians in Paris are now trying to ban the cultivation of any GMO maize, and not just MON810, a variety created by Monsanto , currently the only one allowed for cultivation in Europe. The ban though was overturned in France by the country’s highest court as lacking sufficient scientific grounds. The French public is strongly opposed to GMOs and the politicians hope that they can pass the bill before the time comes from sowing this spring, Reuters news agency says. Meanwhile in Germany a different debate is raging. The government there plans to abstain from an EU vote o n whether the cultivation of a new type of genetically modified maize, that would end Monsanto’s GMO monopoly in Europe, will be allowed. “The German government has agreed to abstain ... It is normal procedure to abstain on
France tries to ban, again, only variety allowed in Europe while Germany plans to abstain on crucial vote
a dossier where there are different opinions within the government on the matte,” German government spokesman Steffen Seibert said on February 5. Some in Germany are worried that the abstention could be effectively green-lighting the cultivation of the DuPont and Dow Chemican instect-resistant maize named Pioneer 1507. But Reuters reports that EU officials have told it they anyway expect Tuesday’s Council of Ministers’ meeting to fail to reach a definitive agreement. The German grand coalition has yet to agree a policy on GM crops, however French officials told Reuters they were disappointed at Berlin’s decision. The news agency adds that Paris lobbied heavily on the issue. Should a deadlock in the Council of Ministers occur, the Commission could go ahead unilaterally with allowing the crop’s cultivation. However, with opinion divided so strongly, this is unlikely, Reuters quotes its EU source saying. Environmentalists and public opinion in Europe are deeply opposed to the introduc(NEOnline) tion of GMOs.
9 -15 February, 2014
“Bureaucracy working for itself ”
aniel Guéguen, a seasoned lobbyist and vicepresident of Europolitics, one of the main Brussels press agencies specialised in European affairs, talked to Dan Alexe about the functioning of the Commission and other EU institutions after the Lisbon treaty : Daniel Guéguen: “With the Lisbon treaty --a very bad text, by the way--, power in the EU institutions became nebulous, its functioning, difficult to grasp, endangering the EU as a whole. Power is now in the hands of a great number of middle-rank fonctionnaires, who have a purely bureaucratic approach to EU affairs. For them, the EU legislation is just a series of guidelines adopted in an opaque way. But the political power that should be exercised by those in the higher echelons is feeble. Barroso, Van Rompuy, Ashton have been chosen because they are weak and ready to leave the driving seat to the capitals of the member states. With them, bureaucracy rules.” New Europe: Who holds then the dayto-day power? DG: ”The real day-to-day power in the Commission under Barroso ended in the hands of the lower echelons. It is power by the bottom. Important decisions are taken, let’s say, by some desk officer in the DG Sanco. These are people who can block and twist processes. Bureaucracy has become stronger than politics. I would call this an anti-democratic type of power.” NE: How does this reflect itself in the internal functioning of the Commission? DG: “Each Directorate-General is autonomous and you will never have one of them sticking its nose into the affairs of another one. The main mentality is: You leave me alone and I will leave you alone. There is even a rule that people generally ignore, which is that it is not the Commissioner who is the boss of a director-general. The real boss is the secretary general Catherine Day. Even the capitals do not understand how the system really functions. It is a bureaucracy working for itself. I would say that the system is so opaque that even lobbyists are sometimes at a loss. It is a system that breeds suspicion.” NE: What kind of a Commission President would be needed for this to change? DG: “The future Commission will need a President with a charisma and a real authority. Such a person would be able to renovate the system. To start, he should surround himself with a first quality cabinet. Jacques Delors’s collaborators were brilliant people, which cannot be said about those around Barroso, who surrounded himself with barnacles. Just think: Delors had Pascal Lamy,
Interview with lobbyist Daniel Guéguen about the functioning of the Barroso Commission
Watching me watching you watching me.
The real boss is the secretary general Catherine Day
had François Lamoureux. Those people had guts, they weren’t afraid of the hierarchy, they knew how to give precise instructions to the services, and when things didn’t function, they knew how fix them by shouting aloud. Today, everybody functions autonomously, under a floppy and diluted political power. Secondly, the role of the Commission President is to have a political vision, in coordination with the member states. If you only look for consensus, then you are just a spectator, going from G1 to G2, then to G20, etc... We need someone with a political vision, and we need services that only execute what they are told to do. Now we even have two cabinets : there is Barroso’s own cabinet, then there is the BEPA, the Bureau of European Policy Advisors... What is the use of that? What’s it use, except for giving jobs to some people? The system itself is dysfunctional. We have become too politically correct and we have forgot how to react with indignation. Look what they did in Ashton’s case: they call her High Representative and “chief of the EU’s diplomacy”, but there is no EU diplomacy. Regardless of her person, the function itself is dubious: she has one leg in the executive and one leg in the legislative. This is unacceptable. Earlier, we had a system that didn’t function well. After the reforms, it became monstrous. We have now a President, Van Rompuy, who permanently watches Barroso, who in turn is closely watching him and stays with him all the time in order not to be double-crossed. At the same time, in the Commission we have Barroso and Ashton... Ashton, who also chairs the council of EU foreign ministers. Think also of Moscovici’s proposal that the Commissioner in charge of the economy be at the same time president of the Eurogroup. There are moments when you feel like shouting: Stop!” NE: Would you say that this opaqueness might also encourage corruption? DG: “One of the results of this opaqueness is indeed that by making more and more information unavailable, one encourages internal corruption. When information supposed to be public is not found on the internet, when you have to look for it where it’s hidden, someone will want to pay for it. Who do you think will sell them what they need? Those who have privileged access to that kind of information.
The system has become so complicated, that there are relatively few people who still can understand how it works, and also very few people working inside who would dare speak up. It is the system itself that breeds suspicion. It can favorise internal corruption. Just think: the most important person in the case of a legislative proposal is the rapporteur’s assistant!… Given the opaqueness of the system, that person can have a huge influence on the course of the adoption of a document. Horse trading between MEPs takes place behind closed doors, sometimes in the form of a barter, under the influence of lobbyists. It is for this that, although a lobbyist myself, I am totally in favour of an obligatory reglementation of lobbying activities. We’ve had enough of this phony “Transparency Register”. This is totally ridiculous: being listed in it is not obligatory, lawyers are not concerned by it, one can declare whatever one wants, there is no control of anything and there are no sanctions. That means the whole thing is totally useless. Me myself I am not a member of it and I wrote to the Commission explaining why.” NE: How do you view the fact that the Commission contracts do not foresee in any way a possible conflict of interest on the side of the communication agencies they work with? DG: “This is incomprehensible for me. As a lobbyist, I wouldn’t sign a contract without having a non-disclosure agreement and a confidentiality clause, let alone a possible conflict of interest. Everything in this Commission seems approximative and improvised.” Dan Alexe
9 -15 February, 2014
In copyright debate, we must first get the fundamental framing right
By Christian Engström
Christian Engström Member of the European Parliament Piratpartiet - The Pirate Party
A member of New Europe’s Knowledge Network
opyright is a set of exclusive rights in civil law that has some extensions into criminal law. Lobbyists have been working overtime to frame the legislative debate in a completely false setting, in order to get a favourable result: “Stealing” is so bad an analogy for copyright infringement, that a US court has banned it as misleading and deceptive. We’ve all heard the tantrums from the copyright industry. “They’re stealing our content, you must punish them!”. “Online file sharing is theft!”. This makes for no good policy, because it is a fundamental misrepresentation of what is happening - which, in turn, is why legislation has now drifted so far from public perception of justice, that the entire net generation genuinely hates copyright and everything it stands for. That’s a situation that must be resolved. The analogy of “stealing” - if not the asserted equivalent - is deliberately deceptive language intended to frame the copyright debate into a position where the copyright industry wants it to be, regardless of how little that framing has to do with reality. Being deceptive is bad. Being deliberately deceptive, and toward lawmakers, is worse. The analogy of “stealing” is so wrong, that the US Supreme Court has explicitly said in a verdict that infringement of copyright is not stealing, to clear that up once and for all. Obviously, lawyers of the copyright industry in the US are aware of this - that’s their job as lawyers.
Going round in circles?
They just pretend it didn’t happen. Actually, it’s even worse than that. The “stealing” and “theft” monikers are so false, deceptive, and misleading as analogies for online sharing of culture and knowledge, that a US court has explicitly banned the copyright industry from using those analogies in court proceedings. “Stealing” simply has nothing to do with infringement of the monopoly we know as copyright, nothing in the slightest, and the courts have come down on the copyright industry like a ton of bricks when they try to mislead the public in this egregious but tenacious fashion. That hasn’t stopped a single lobbyist in the European Parliament and Commission from insisting with a painted-on smile that stealing is “an excellent analogy”, again and again and again. The fact that courts have said no, no, and
no again, it’s a deceptive, false and misleading statement and if you keep using you you’ll be in contempt of court, has not had any effect at all on these lobbyists and the messages you hear every day. But in order to make good policy, we must first understand the issue in depth. If online sharing of culture and knowledge isn’t stealing, then what is it? It’s manufacturing. Somebody is using their own property to rearrange magnetic patterns patterns that exist entirely on their own property - to match a pattern that they can observe first-hand, as if they were manufacturing a painting using their own oil paint and canvas by observing a picture in the distance. Again, this is crucial. To make good policy around the net, sharing, and copyright, understanding the concepts in depth is paramount.
In online sharing of knowledge and culture, no property changes hands, and therefore, the activity quite obviously isn’t even remotely related to theft. No copy is “sent” through the Internet; no object travels through the wires and no property is physically moved - that would be physically impossible. What does travel is a set of instructions and observations of a pattern, observations that allow somebody to manufacture their own similar magnetic pattern, using nothing but their own property (computer, network, and hard drive). What this manufacturing does is to violate a duplication monopoly, a monopoly that is one of the few activities reserved for a copyright holder, regardless of whose property it is. This monopoly - copyright - is a limitation of normal property rights, as you can’t rearrange your own property into something you observe first-hand, and a limitation on freedoms of speech, as it prevents you from expressing a piece of culture thus monopolized. The first thing we should be aware of in the copyright debate as lawmakers is the utter disingenuousness of the copyright industry lobbyists as they falsely try to frame this manufacturingwithout-a-license as “stealing”, when they’re fully aware that courts have deliberately banned them from doing so in courtrooms because it’s an egregious misrepresentation of facts. It’s manufacturing. In online sharing of culture and knowledge, somebody is using their own property to rearrange it into an observed pattern. It stops and starts with that. But arranging that particular pattern is under a monopoly - the monopoly we know as the copyright monopoly, which is designed to reduce normal property rights. If we grasp these fundamentals, we are able to make much better policy, regardless of loudmouthed special interests.
Female defence ministers make waves at security conference
By Beata Stur Never before has the sound of high heels clicking on the floor been so audible at an international security conference. For the first time in history, a meeting of the world’s most powerful defence ministers - a male-dominated bastion – turned into a female affair. Meeting on the sidelines of the gathering at Munich’s Bayerischer Hof hotel last week, the defence ministers of Norway, Sweden, Germany and the Netherlands - all women - sat for one of the most-talked about photos in Europe these days. It all started when the Dutch defence minister, Jeanine Hennis-Plasschaert, asked someone to take a photo of her and the other three defence ministers. The photo went viral on Twitter and other social media. It was retweeted almost 2,000 times, including once by Sweden’s foreign minister, Carl Bildt, who added the comment: “True Power Girls”. But the former Swedish prime minister was widely criticised for being sexist and condescending. For many political commentators it is evidence that the last of the male bastions - defence - is now open to women. In an interview with the Guardian, HennisPlasschaert said: “[The Dutch politician] Neelie Kroes once said to me that old boys’ networks are the oldest form of cartels we have in Europe. She was right, but things are changing, and women can do similar things now”. According to the Guardian, when Pieter De Crem, Belgium’s (male) defence minister spotted his four female counterparts, he jokingly said: “Oh, I’d better get out of the picture”. All four defence ministers are affiliated with liberal-conservative parties in their countries. The Swedish and Norwegian ministers are the third and fifth female politicians in their posts, while the German and the Dutch are the first. When Hennis-Plasschaert , 40, entered the cabinet in November 2012 she made newspaper headlines with her comment: “It doesn’t matter if you have a willy or not”. In an interview with the Guardian, she said: “I don’t think the military officers that we work with see us any differently than if we were men. And if they do, they don’t show it. But there is a public debate about women taking more influential political roles, and that’s healthy”. In Sweden, there are only four women with professional experience in the armed forces. The 47-year-old Karin Enström is one of them. She holds the rank of captain in the Swedish marines. Norway’s Ine Eriksen Søreide, 37, is one
Meet the female force
of the most popular politicians in her country. She entered politics at the age of 29. But it is Germany’s Ursula Von der Leyen, who is considered destined for much greater things. After her stint at the defence ministry, the 55-year-old is seen as the most obvious successor of Chancellor Angela Merkel. A doctor by profession and the mother of seven school-age children, Von der Leyen became popular several years ago when she openly supported parental leave during her time as labour minister. As defence minister, however, she is making a name for herself as a strong leader. Since taking office, Von der Leyen has spoken out about Germany’s need to join military action overseas, mainly in Africa and in wartorn Libya. She recently told Germany’s topselling newsmagazine Der Spiegel that globalisation is bringing distant conflicts much closer to Europe.
9 -15 February, 2014
By Ariti-Marina Alamanou
NE Editor Legal Affairs, Attorney at Law
Putting Lisbon into practice: what way forward for a European Public Prosecutor’s Office?
he political dimension T of the EPPO
The proposal to establish a European Public Prosecutor’s Office (EPPO) as tabled by the European Commission last July raises, beyond technical aspects, a fundamental political issue: what kind of Europe do we really want? Do we want to stick to the current scenario of the EU, in which each Member State continues to set its priorities for criminal investigations and prosecutions, or do we want to take a significant step towards a more integrated approach at Union level? Setting-up an EU prosecutorial body empowered to carry out criminal investigations and to prosecute the authors of certain criminal offences according to common European rules would undoubtedly need the political backing of the Member States. Without such a political will, any initiative of to establish the EPPO would have little chances of success. This is of course a delicate matter. By supporting the initiative, Member States would have to give up part of their national sovereignty in a specific area, criminal law, which has for centuries been one of the main expressions of the States’ own power. At the same time, Member States could also seize this opportunity and moment in time to make significant progress in achieving a true common space of European justice. In the same vein as establishing a common market for goods, by supporting this proposal, Member States could lay the ground for a common institution to effectively protect the EU budget from fraud. As the European Union comprises dozens of different judicial systems, it is impossible to conceive a common system that is the perfect synthesis of each of them. This is why, in order to comply with the proportionality principle and to take account of the originalities of each national system, the Commission’s proposal has the merit of creating a EU prosecutorial body without be-
The EU is looking closely at fraud and corruption.
IMAGeS OF MONeY
ing excessively intrusive when it comes to the criminal procedure to be followed in EPPO investigations. Indeed, the proposal is based on a decentralized structure of a European office. It relies significantly on the application of the national law for the execution of investigative measures in a Member State. The Commission hoped that this solution would go a long way in convincing national governments of the merit of its initiative. However, the proposal has not been free of controversy. On the one hand, the Commission has been criticized - mainly by academics - for its alleged lack of ambition and of a truly “European vision”. Such critics believe the Commission could have put forward a fully-fledged set of European procedural rules directly applicable in each Member State. On the other hand, the proposal has triggered the severe criticism of the National Parliaments for the exactly opposite reason: it has been considered too invasive in the national systems. The truth is that such divergent interpretations depend on one’s view of Europe: do we want more or less of it? This is why the EPPO proposal goes beyond the technicalities of set-
ting up yet another EU institution. Following the path of the Lisbon Treaty vision, it opens a key debate for the future of the European construction.
Before one can draw any rushed conclusions on the Commission’s proposal, it is however important to carefully consider the core features of the envisaged institution. The EPPO should investigate, at least at a first stage of its establishment, only criminal offences affecting the EU financial interests and, to a very limited extent, some further offences connected to them. It should protect, therefore, only European interests. This should thus fully justify a “European” view of the Office’s structure and powers. Furthermore, statistical figures show that so far the Member States have not always been very proactive in the protection of the European budget at criminal level. The background to this poor protection is probably the idea that the Union budget is something belonging to a farther
he merits of the T Commission proposal
entity, the Union, which is other than the Member States. Protecting the EU budget has not become a national priority. This is a clear mistake of perspective: the Union’s interests are the Member States’ and the European citizens’ interests. The protection of the Union’s budget is essential for the member States and for the European taxpayers; if the member States fail to protect effectively the Union budget at criminal level, a reaction from the European institutions makes absolute sense. There are therefore good reasons for the Union to establish the EPPO as a real European body. However, this obviously requires the cooperation of the Member States. They should accept a European prosecutorial body in which the prosecutors are appointed by the European institutions and not by the Member States; that can carry out criminal investigations in the territory of the Member States through a very well-conceived system of national delegated prosecutors working for the EPPO; and that overcomes the current system of the cross-border investigations based on mutual assistance among Member states or on the mutual recognition. The EPPO prosecutors will not need such instruments. They will belong to the same European Office that can decide whether or not to prosecute a case through a decision taken at European level. In a nutshell, the Commission’s proposal is very well balanced. It seeks to achieve good results through a strong European costs-neutral structure (making use of the existing expertise in the Institutions), and avoids excessive intrusion into national legal systems. There is no doubt that the European element of the EPPO structure is an interesting step towards a new scenario of criminal investigation and prosecution in the Union. It is now up to the Member States and to the European Parliament to decide what they want: supporting the European elements of the proposal and accepting this new space of justice in Europe, or watering down the proposal and depriving it of any added value. This is a decisive choice that goes beyond this specific case: it is a choice about what type of Europe we want in the coming years. The question remains open.
by Christina Vasilaki
Malmstroem to Greece: “Pushbacks are illegal”
have denied these accusations. Commissioner Malmstroem who was also present in the debate acknowledged that there are “severe allegations” of illegal pushbacks of migrants by the Greek authorities. However, she said that based on the information so far it was a search and rescue operation. “Pushbacks are illegal according to European and International law,” she underlined. Venizelos called for more solidarity from the rest of Europe to help the border countries, such as Greece and Italy, deal with an influx of migrants. “Our means are not sufficient. The tragedy of Farmakonisi is one more example of this pressure,” he said. “The priority of the Greek Presidency is to set up an integrated strategy of border management.” Malmstroem replied that “apart from solidarity, we also need responsibility”. “We provide Greece with help to deal with this influx. Financial, technical, human resources help. Migrants are getting in these vessels because there are no legal ways to come to Europe. There are very serious allegations of pushbacks and ill treatment of migrants in Greece. We need to shed full light”. Greek independent MEP Kritonas Arsenis attributed to Minister Venizelos political responsibilities for the drama Pharmakonisi calling the Greek cost guards “executioners”. He also conveyed to the Parliament some testimonies of
“An independent investigation is underway. We want to find out the complete truth,” Greek deputy Prime Minister and representative of the Council, Evangelos Venizelos promised Wednesday during a debate in the European Parliament. Twelve immigrants, including children, were drowned few weeks ago near the Greek island Farmakonisi, while trying to reach European ground. Greece faced harsh criticism following the deadly accident as some survivors claimed that their boat was capsized while being towed by a Greek cost guard toward Turkey. Greek officials
the victims: “ The coastguard did not come to save us, they wanted to drown us”. “I lifted a baby so that they see we are women and children”. “The women screamed for help and the coastguards were insulting them.” Greek MEP, Maria Eleni Koppa denounced the government’s reaction in the wake of the accident. The Greek minister responsible for Maritime Affairs, Miltiadis Varvitsiotis had said that these accusations aim to cause political problems to the Greek government. Venizelos repeated that “these debates are often used for political ends” and he stressed that “the Greek authorities are ready to cooperate whenever asked.”
By Francisco Jaime Quesado
9 -15 February, 2014
A member of New Europe’s Knowledge Network
The European Comission is launching a New Strategy towards Innovation. An Innovation Europe must be a commitment between Governments and Civil Society, with a primal role to universities, companies and centers of innovation as the active drivers of competitiveness in the system. More than ever, we need to focus on added value as the basis of a new society, more equal and more competitive. The answer for this challenge is strongly based in this Innovation Europe challenge. The Innovation Europe 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 betwen the different social and economic players. These new actors 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. Universities and Companies have a central role in this new Innovation Europe. They must perform a new strategic partnership centered in the objectives of the added value, creativity and knowledge. This is the basis for a future effective implementation of the EU 2020. Most of the countries still a strong opportunity to implement an agenda of innovation – the opportunity is more and more know and it can´t be lost. The Innovation Europe is the key to the future, centered in a new agenda of value promoted by the social and economic actors. The Innovation Europe must also be based in central projects like the Poles of Competitiveness, Clusters of Innovations and Knowledge Cities and Regions. These projects are the effective confirmation that the basis for a new agenda depends on the capacity of universities, companies and centers of innovation developing a new strategic agenda of excellence. A Innovation Europe is more and more the confidence of the development of new solutions based in new products, new services, more connected with the new challenges of a more global and complex society. The Innovation Europe allows people to know who they are and have a strong commitment with the values of freedom, social justice and development. In times of Change and Uncertainty, Nations must regain its Strategic Competitive Advantage but at the same time must be able to reinforce its Social Dimension. In this way it´s essential to learn the lessons that more than ever emerge from a world that is trying to rebuild its competitive advantage and to reinvent its effective place in a complex and global network of relations. In the New Global Economy and Innovation Society, people and companies have a central role to play towards a new attitude connected with the creation of value and focus on creativity. 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
Gagauzia: the Golden Apple of Discord between East and West!
By Theodoros Benakis
agauzia has become the latest Golden Apple of Discord between the European Union and Russia after Transdnistria! Gagauzia is a little-known area of Eastern Europe. It is a part of Moldova, but few people know this and fewer have even heard of it. Surprisingly enough, the tiny Gagauzia has emerged as a giant threat to the stability of Moldova. On February 2, a controversial referendum, which was ultimately declared illegal by the Moldavian authorities, sounded the alarm. Even Štefan Füle the European Commissioner for Enlargement and European Neighbourhood Policy, had visited Comrat, the capital of Gagauzia, in hopes of preventing the Moscow-driven secessionist movement from gaining momentum. Small as it is, Gagauzia has secured the status of an Autonomous Region in Moldova. Since Moldova gained independence from the Soviet Union, the world’s attention has been focussed on the Russian-speaking Transdnistria and its efforts (backed by Moscow) to secure independence. In recent days, however, Transdnistria has been overshadowed by Gagauzia. And it is all in connection to Moldova’s decision to embark on a European path and to move closer to the European Union. Gagauzia is a geographically discontinuous region located in the southern part of Moldova. Its total area is just 1832Km² and its population numbers 155,000. What’s more, the Gagauz are Turkish descendants and speak Turkish and Russian. They are not Muslims, but Russian Orthodox. But most importantly is that their heart seems to be in Moscow and not in Chisinau, the capital city of Moldova. The people of Gagauzia never really assimilated with the Romanian-speaking Moldavians. They had enjoyed a special status of privilege during the Soviet Era thanks to the then complex system of national quotas. This is why they were not pleased when Moldova gained its independence. Officials in Chisinau knew this. Following Transdnistria, the issue with Gagauzia escalated into a crucial problem. This is why Moldova decided to grant Gagauzia the status of an Autonomous Region by the name of the Autonomous Territorial Unit of Gagauzia (Gagauz Yeri). Still, Gagauzia remained largely unknown. Until now. Today, Gagauzia has attracted the attention of an international audience largely because of its local authorities calling for a referendum of dubious legality and posing a threat to Moldova’s integrity. The referendum highlighted
Gagauzia has secured the status of an Autonomous Region in Moldova
an openly anti-European feeling. According to its supporters, the reason for such a radical change in local politics is the agreements of Vilnius last November between the EU and Moldova. As they point out, the people of Gagauz widely believe that further rapprochement with the EU will ultimately mean the enhancement of Moldova to Romania. In short, the Gagauz fear they will find themselves encircled by a huge and unfriendly Romanian population. This is why the Gagauz leadership decided to take matters into their own hands. With the support of the local Popular Assembly, they called for a referendum on February 4. As already mentioned, the referendum was ruled illegal by the courts. The referendum posed two questions. The first was rather innocuous. Voters were asked whether they prefer Moldova’s affiliation with the EU or the Russia-backed union. The second question was rather threatening. Voters were asked if they believe they have the right to seek independence if the integrity of the country is at stake. The entire campaign of Gagauz was advertised by Russia. This is why Fule visited Comrat. The commissioner wanted to personally discuss these issues with students, and other citizens. As regards the results of the referendum, some have compared them to the results of the elections in North Korea. A vast majority (97.2%) of the voters said they are in favour of the Russian trade association and against any ties with the EU. But probably the most dangerous finding is that 98.9% of the voters said they are in favour of their right to declare
their independence if and when they consider it to be necessary. As Gagauz leaders explain, they want the right of secession in order to protect the integrity of the country. Despite the surrealism of such a statement, the situation remains critical. Meanwhile, the old art of the Soviets to falsify and mutate problems is omnipresent. The Gagauz leadership is laying the groundwork for the dissolution of Moldova in the name of defending the integrity. Unfortunately, the Gagauz arguments found an uninvited ally in the president of Romania. Speaking on national television, Traian Basescu said that “the next big project of Romania will be its reunification with Moldova” Was Basescu’s statement just plain irresponsible or was it a deliberate attempt to add fuel to the fire? It isn’t clear yet. What is clear is that it is a stab in the back for Moldova. If one is to consider the role Russia is playing as regards the secessionist movement of Transdnistria, in Gagauzia one can observe yet another attempt by Moscow to create obstacles in the EU‘s enlargement to the east. It is clear that Europe’s path for Moldova has annoyed Russia. It is also clear that Russia is driving the secessionist efforts in Transdistria, which is a de-facto independent region and at the same time under the absolute control of Moscow. The Gagauzia and the new front that has opened up against the government of Chisinau and the integrity of Moldova is just another strategic move in a rather odd game of chess that is being played by Russia in the region.
9 -15 February, 2014
By Andy Carling
Lisbon Treaty in full swing - how the year 2014 will change Europe
Changes in the functioning of the institutions will alter the present networks of influence, which do not correspond anymore to the reality of power in member countries.
Excitement mounts ahead of the European elections and the introduction of candidateds for Commission president. BELGA PHOTO NICOLAS MAETERLINCK
By Dan Alexe
he year 2014 will bring a series of major changes in the functioning of the EU institutions. The May parliamentary elections, and the change of the composition of the EU Commission that will follow in the autumn, will alter and replace the present networks of influence, most of which do not correspond anymore to the reality of the power in the member countries. But also, the Treaty of Lisbon (adopted 2009) will this year come into full swing, replacing the provisions go the Nice Treaty (adopted 2001). The most obvious and effective changes will be those that will modify the system of voting inside the Council of Ministers. Qualified majority will be introduced, dropping the unanimity rule, except in matters of national security. Thus, one direct effect of the Lisbon Treaty will be the redistribution of powers inside the institutions. The Parliament will gain new attributions and competencies. The Council of Ministers has already seen its attributions much reduced, mainly by the use of qualified majority voting procedures in almost every policy area outside taxation and foreign policy. The present system of voting in the Council, based on the Nice Treaty, which will be kept in function until November, when the future Commission will already be formed, is extremely complicated and cumbersome. It has been used for the last decade and it is reputedly
incomprehensible for outsiders. For the time being, under the Nice Treaty, voting inside the Council remains based on a triple majority threshold. For any piece of legislation to be adopted, one needs to gather 74 % of member states’ votes, 62 % of the population of the EU, plus a majority of member states. One immediate problem was that under this system the threshold was set so high, that it led to permanent backstage horse trading between the capitals. The Lisbon Treaty came to change all this. What came to be known as the Treaty of Lisbon was meant initially to be a European Constitution, but French and Dutch voters rejected the idea in two separate referendums in 2005. That was a fatal blow to the project of an EU Constitution, given that both Netherlands and France are among the founding member states of the EU. The draft Constitution then became the Treaty of Lisbon (in 2009). It is practically a surrogate Constitution that doesn’t say its name. One major change this year will thus be that from November on, after the EU elections and the formation of the future EU Commission, when all the political haggling between capital will have stopped (a haggling that has already started, and which includes not only the EU top jobs, but also the election of a NATO secretary general), voting will be based on a a double majority threshold of 65 % of the EU’s population and 55% of the number of member states. To prevent a coalition of big coun-
tries like Germany, France and UK, that could permanently block any legislation, it was also decided that such a blocking coalition must consist of at least 4 member states. As for the European elections, the Lisbon Treaty paves the way for a more powerful European Parliament. It also establishes a slightly lower threshold of deputies than the present one: a maximum of 751, as compared to the present 766. The treaty also introduces an exit clause for members wanting to withdraw from the Union. Some important Lisbon provisions are already in place. Such was the creation of a long-term President of the European Council and of a High Representative of the Union for Foreign Affairs and Security Policy. The Treaty also made the Union’s bill of rights, the Charter of Fundamental Rights, legally binding. On the other hand, in order not to offend any of the smaller member states, one major provision of the Lisbon Treaty has been quietly dropped. The Treaty of Lisbon stated that the size of the Commission will reduce from one Commissioner for member state to one for two thirds of member states from 2014, with an equal rotation over time. This was meant to end the arrangement which has existed since 1957 of having at least one Commissioner for each Member State at all times. In front of the opposition of most smaller states, the European Council decided in December 2008 to revert to one Commissioner per member state.
I would like to announce my intention to run for the position of President of the European Commission. I recognize there is a certain presumptuousness -- a certain audacity -- to this announcement. I know I haven’t spent a lot of time learning the ways of Brussels. But I’ve been there long enough to know that the ways of Brussels must change. Like many Europeans, I’ve been looking at how the contest would develop, but the continent is on a journey and it’s one we should take together, hand in hand as we march with undeserved confidence into a future even more terrifying than the recent past. I offer three things to this continent that has formed, shaped and bored me. First of all, I am not Jose Manuel Barroso. I’m not Martin Schulz, Guy Verhofstadt or the other one. This should make me the obvious choice. Secondly, I am not in any of the pan-European parties, thus showing my commitment to democracy. Finally, I am not some MEP, using the elected chamber as a springboard for my ambition and vanity. I will crack down on corruption in the institutions, allowing OLAF to use waterboarding. This is a vital step and one that any candidate who is serious about rebuilding Europe must make. I will wager, however, that I will be the only candidate to make this commitment. Will one of my fellow candidates pledge a deep investigation into corruption in the highest offices of the institutions? Friends, I doubt it. I’ve just spent a week being Europe, although just on Twitter, a sort of online forum for people with a combination of righteous anger and short attention spans. There’s a username of @i_am_europe that is shared amongst residents of our fine continent, one person a week. Organisers say it is an experiment to increase pan-European communication. Fellow citizens, I pledge that I will not communicate through expensive and pointless advertising campaigns. If selected, and I say selected because this is Europe and ‘elected’ isn’t the right word. But if selected by both the European electorate and the Bilderberg group, I shall reach out and touch Europeans, individually, personally, even intimately. When appropriate. My story is also the story of Europe, a story of far too many pages and an uncertain ending and dubious character development. There are chapters, margins and a bold new font. My spine is slightly foxed and there are scuff marks, a sign of occasional use. I offer a bold vision, a new vision for Europe. A Europe that can achieve the lofty ambitions we had a decade ago and completely screwed up. Select me and you’ll be sending out a sign that this time we mean it. Or at least we’re more serious than last time. Slightly. I accept the challenge of a tough fight in this election, against confident opponents, at a crucial hour for our continent. My opponents are confident because they think it can be stitched up as easily as their nominations were. Sadly they are compromised by their support for my predecessor, who I recall that Mr Schulz couldn’t be bothered standing against. Indeed he was the only person in the whole European left who had even slight interest in the Commission presidency. Juncker has the support of Germany, his victory will only show the world that Europe is Berlin and everyone else is in the second division. Select me or all is lost.
The People’s president
9 -15 February, 2014
The unbearable cost of gender inequality in Europe… and the Greek presidency
By Vasso Kollia
Secretary General for Gender Equality, Hellenic Ministry of Interior.
he question of gender equality gains eminence on the agenda of the Greek Presidency of the European Council, which kicked off on January 1st, 2014. On the face of it, this appears unusual, not least because of widespread ignorance of the significance of the challenge at hand. The bottom line is this: inequality costs. The cost is economic, social and political. But, ignorance of this fact is well founded everywhere. In the mature and developed economies of the West, which in former decades enjoyed affluence, gender equality was recognized as a right, that is, in principle. In practice the demand was faced by decision making bodies with a condescending attitude, as “one more obligation” that, amidst financial hardship, may even appear as a luxury. How much truth is in this claim? The global crisis in public finances presents before us a simple equation, which has not as yet been fully grasped, either on the upper echelons of power or by the grassroots: more women in employment means greater per capita income. In Europe, the OECD estimates that bridging the gap between male and female employment accounts for a quarter of GDP growth since 1995. In Japan, the stagnation was somehow smoothed by the advance of female participation in the labour market, shielding the economy from deeper recession. In Latin America, working women helped to reduce poverty in nucleus family households from 40% to 26% by 2007. In other words, unequal access to the labour market has a tangible opportunity cost. The IMF estimates that only half of the potential female labour force is in the labour market, which translates into lower GDP growth of up to 27%. And another case of “opportunity cost” calculation; if women in Europe did have a share in the digital economy at par with men, the European GDP would increase by 9 billion Euros, that is, a figure equal to Malta’s GNP. A small share of women in employment means reduced economic autonomy and, thereby, consumption of goods and services. The significance of this observation is proved by the fact that, globally, female global consumption accounts for 20 trillion dollars market. If we really believe that half the global population is a “niche market,” then we really need to reflect on our business model. Even more “condescending ignorance” is evident in economic, political and scientific
Cleaning staff sweep the entrance to the Zappion hall in Athens on January 8, 2014 prior to a meeting of the EU commissioners with Greek officials, as Greece takes over the rotating European Union presidency for six months. AFP PHOTO / LOUISA GOULIAMAKI
decision-making centers. Numbers speak for themselves. Recent studies suggest that female participation in corporate leadership is associated with increased profit margins, long term strategies and greater investment in human resources. Companies with at least one third female board membership, outperform male dominated ones in terms of profit margins by 42%; and in terms of returns on equity by 53%. Nonetheless, women make up only for 11% of board members in listed companies and occupy less than 3% of managerial positions. Hence, it is easy to deduce that more gender inequality means less profitability. In financial decision-making institutions women occupy only 17% of the positions of power. In the field of research and development, women represent only a third of the researcher’s population, one fifth of university teaching staff and one seventh of the pool of directors in higher education research bodies. This is despite the public funds already invested in female education. Almost across Europe, there are more female university graduates than men, with over 50% holding a degree. In sum, inequality is a clear waste of human resources. Despite the cost of gender inequality, the crisis has not been turned into an opportunity. The female population of the European South is disproportionately hurt by the recession. The level of employment in the labour market remains consistently lower for women compared to men. According to the Joint Assessment Framework, an analytical tool allowing evidence based policy-making under the Europe 2020 Employment Guidelines, in
2012, the level of employment for women was only 62,4% compared to 74,6% for men. Disproportionately high are the levels of long term unemployed women, a target group that is hard to reintegrate in the labour market. Unemployed women once again are the best candidates to assume as a whole the care of households and family dependents. Through this unilateral renegotiation of the social contract women are made to return in their “natural” unpaid, uninsured and socially invalidated labour. But, this “enforced altruism” corners women to a role without prospects, for what prospects are there in the margins of the knowledge economy? How are women to survive when technological literacy is a sine qua non of responding to a variety of social roles, such as that of a citizen, a parent, a patient, a voter, a social subject. If there is an element of “luxury” in equality, this lies in treating equality as a utopian “value”, not as a reality-driven political necessity. We cannot afford to address the question of gender inequality with condescendence, given the enormous social cost of this deficit. In the General Secretariat for Gender Equality of the Hellenic Ministry of Interior, we are developing and actualizing an up-todate policy framework for gender equality with a clear developmental dimension. We believe that in improving the level of female participation in the labour market, in fighting against female poverty and exclusion, by facing up to domestic violence and other harmful social phenomena, we serve society as a whole, not women alone. That is the basic rationale in the agenda we put forth during the Greek Presi-
dency of the European Council, whose central pillar is “Women and the Economy.” Through this theme, we seek to respond to adverse international economic conditions, pave a way for national economic and social recovery and contribute to the objectives of the strategic reference text “Europe 2020.” For the materialization of a European vision of sustainable development and social cohesion, we must put in place policies of conscious solidarity: between member states, North and South, Center and Periphery, the Continent and island regions, among linguistic, cultural and ethnic groups, generations and genders. However, this objective necessitates the empowerment of the fundamental social actors, men and women. For this reason, today, in Greece, we are unfolding a public awareness campaign with the motto “more Greek women in the European Parliament, stronger Greek representation in Europe.” This is a dimension of our greater effort for balanced representation in all decision-making bodies, in a national and European context. We ask from society, men and women, to choose more women amongst the running candidates at this critical moment for the fate of our country and Europe as a whole. We believe that 2014 will prove to be a good year for Europe in general and specifically Greece, as the foundations for fiscal consolidation and credit-market stabilization has been laid. In this difficult path toward a sustainable future, Europe must not leave its women behind. Because inequality comes at a cost we all share.
9 -15 February, 2014
By Joseph E. Stiglitz
A Nobel laureate in economics, is University Professor at Columbia University.
Stagnation by design
NEW YORK – Soon after the global financial crisis erupted in 2008, I warned that unless the right policies were adopted, Japanese-style malaise – slow growth and near-stagnant incomes for years to come – could set in. While leaders on both sides of the Atlantic claimed that they had learned the lessons of Japan, they promptly proceeded to repeat some of the same mistakes. Now, even a key former United States official, the economist Larry Summers, is warning of secular stagnation. The basic point that I raised a half-decade ago was that, in a fundamental sense, the US economy was sick even before the crisis: it was only an asset-price bubble, created through lax regulation and low interest rates, that had made the economy seem robust. Beneath the surface, numerous problems were festering: growing inequality; an unmet need for structural reform (moving from a manufacturing-based economy to services and adapting to changing global comparative advantages); persistent global imbalances; and a financial system more attuned to speculating than to making investments that would create jobs, increase productivity, and redeploy surpluses to maximize social returns. Policymakers’ response to the crisis failed to address these issues; worse, it exacerbated some of them and created new ones – and not just in the US. The result has been increased indebtedness in many countries, as the collapse of GDP undermined government revenues. Moreover, underinvestment in both the public and private sector has created a generation of young people who have spent years idle and increasingly alienated at a point in their lives when they should have been honing their skills and increasing their productivity. On both sides of the Atlantic, GDP is likely to grow considerably faster this year than in 2013. But, before leaders who embraced austerity policies open the champagne and toast themselves, they should examine where we are and consider the near-irreparable damage that these policies have caused. Every downturn eventually comes to an end. The mark of a good policy is that it succeeds in making the downturn shallower and
Running out of fizz.
BELGA PHOTO JOHANNA GERON
shorter than it otherwise would have been. The mark of the austerity policies that many governments embraced is that they made the downturn far deeper and longer than was necessary, with long-lasting consequences. Real (inflation-adjusted) GDP per capita is lower in most of the North Atlantic than it was in 2007; in Greece, the economy has shrunk by an estimated 23%. Germany, the top-performing European country, has recorded miserly 0.7% average annual growth over the last six years. The US economy is still roughly 15% smaller than it would have been had growth continued even on the moderate pre-crisis trajectory. But even these numbers do not tell the full story of how bad things are, because GDP is not a good measure of success. Far more relevant is what is happening to household incomes. Median real income in the US is below its level in 1989, a quarter-century ago; median income for full-time male workers is lower now than it was more than 40 years ago. Some, like the economist Robert Gordon, have suggested that we should adjust to a new reality in which long-term productivity growth will be significantly below what it has been over the
past century. Given economists’ miserable record – reflected in the run-up to the crisis – for even three-year predictions, no one should have much confidence in a crystal ball that forecasts decades into the future. But this much seems clear: unless government policies change, we are in for a long period of disappointment. Markets are not self-correcting. The underlying fundamental problems that I outlined earlier could get worse – and many are. Inequality leads to weak demand; widening inequality weakens demand even more; and, in most countries, including the US, the crisis has only worsened inequality. The trade surpluses of northern Europe have increased, even as China’s have moderated. Most important, markets have never been very good at achieving structural transformations quickly on their own; the transition from agriculture to manufacturing, for example, was anything but smooth; on the contrary, it was accompanied by significant social dislocation and the Great Depression. This time is no different, but in some ways it could be worse: the sectors that should be growing, reflecting the needs and desires of
citizens, are services like education and health, which traditionally have been publicly financed, and for good reason. But, rather than government facilitating the transition, austerity is inhibiting it. Malaise is better than a recession, and a recession is better than a depression. But the difficulties that we are facing now are not the result of the inexorable laws of economics, to which we simply must adjust, as we would to a natural disaster, like an earthquake or tsunami. They are not even a kind of penance that we have to pay for past sins – though, to be sure, the neoliberal policies that have prevailed for the past three decades have much to do with our current predicament. Instead, our current difficulties are the result of flawed policies. There are alternatives. But we will not find them in the self-satisfied complacency of the elites, whose incomes and stock portfolios are once again soaring. Only some people, it seems, must adjust to a permanently lower standard of living. Unfortunately, those people happen to be most people. Copyright: Project Syndicate, 2014. www.project-syndicate.org
Jorgo Chatzimarkakis unveils his party, the “Hellenic European Citizens”
MEP Jorgo Chatzimarkakis, who has served two terms in the European Parliament representing Germany in the ALDE group, has decided to run for Greece in the next European Elections. He founded his own political party, the ‘Hellenic European Citizens’ in Athens on January 23 2014. “I want nothing more than support of the Greek citizens to use the expertise and relationships that I have created this last decade in Brussels to their benefit”, notes Mr Chatzimarkakis. The elections are a critical battle, both for Greece and the EU; a last chance for Europe to find its way.” The negative image of Greece in Europe throughout the euro crisis has been a sore subject for Mr Chatzimarkakis, who fundamentally believes that citizens need to reclaim their Jorgo Chatzimarkakis rights and make more demands on government for a more inclusive, social and solidary European Union. The Hellenic European Citizens strive towards a more federal Europe, which bases itself on the principles that the EU was founded upon but does not allow for gaping inequalities between the North and South, but rather on equal opportunities for all citizens across member states. “The Hellenic European Citizens are,” he said, “a strong voice, demanding fair treatment for Greeks at the very heart of Europe. We want to have a strong representation in the European Parliament for all Greek citizens, from the drivers of Greece’s economy to our unemployed youth.” Among the Hellenic European Citizens’ founding principles is the concept of direct democracy, in which citizens can engage in every
day (hence the party’s name). Alongside propagating the end of austerity policies and their replacement with growth oriented policies, the Hellenic European Citizens strive for the autonomy of the individual, the family, the city and municipality, the region and the Member State within the EU. “We believe in a vision of European integration,” he concluded and emphasized that “we must be present in the heart of Europe to ensure that the mistakes of the past are not repeated and that the crisis is put to an end. The next European elections are a last chance that must not be lost.”
ENeRGY & CLIMATe
9 -15 February, 2014
By Kulpash Konyrova
Russia favours shipping crude to China through Atasu-Alashankou pipeline
ASTANA - The Customs Union between Russia, Belarus and Kazakhstan aims to create an economic union, including closer energy ties, between the former USSR states and has led to a growth of mutual trade of the three countries by 16% since its creation. In mid-2010, the internal borders for the three countries’ own goods and bringing immediate benefits to the member states were removed. Currently, Kazakhstan, Belarus and Russia are members of a so-called Common Economic Space. The main difference between the Common Economic Space and the Customs Union is that the Customs Union removes borders just for the goods, while the Common Economic Space provides the same freedom for the services, capital, and workforce. Lately, the increased co-operation between the two neighbours – Russian and Kazakhstan – has yielded substantial results. In energy, the two countries have agreed to duty-free supplies of crude oil from Russia, among other goods, on the territory of the economic union. According to the experts’ calculations, this new arrangement will save Kazakhstan approximately $1.15 billion annually. A regular meeting of an expert club under the auspices of a non-government foundation “The World of Eurasia” has recently discussed the pluses and minuses of integration of the two closest neighbours in production, processing, and transport of oil and gas resources. The topic of the discussion was “Russia-Kazakhstan Projects in Oil and Gas Industry: New Reality of Integration”. The Kazakhstan-Russia relations in the oil and gas industry began in the Soviet past where large volumes of Kazakhstan crude transited through Russia on their way to the export markets. “The system of pipelines and refineries in Kazakhstan has always been oriented to Russian crude. If you look at the fuels and lubricants segment, approximately 60% the petroleum products available in Kazakhstan are either made in Russia or made from Russian oil,” political analyst Marat Shibutov said. “Also, there is one other thing – crude oil is
Russian oil major Rosneft and other companies are going to ship crude to China through Kazakhstan’s Atasu-Alashankou pipeline, whose pumping tariffs are low. EPA/STEFAN SAUER
several times cheaper in the domestic market than it is outside, so it is not economic for the oil producers to supply crude to the Kazakhstan refineries,” he added. However, after the 2013 Kazakhstan-Russian negotiations, Russian crude, like all the other goods within the Customs Union, will be delivered to our country duty-free, which will allow Kazakhstan to save approximately $1.15 billion a year. In addition, Rosneft and other companies are going to ship crude to China through Kazakhstan’s Atasu-Alashankou pipeline, whose pumping tariffs are low. “We, on the other hand, will make sure to fill the pipeline, which will be beneficial for both us and the Chinese. So, we can say that Kazakhstan achieved a great success in the oil and gas sector last year,” Shibutov said. According to another political analyst, Anton Morozov, Kazakhstan practices a pragmatic approach to its crude oil’s future sales markets and transport routes. It diversifies the export routes and maximises the use of the pipeline system. At the same time, in spite of Kazakhstan’s statements on many occasions that the Russian
direction remains the main one for its hydrocarbon exports, the expert believes that the Caspian Pipeline Consortium throughput capacity growth is limited. “This is caused by the fact that the oil tanker throughput capacities of the Turkish Straights of Bosphorus and Dardanelles have reached their critical levels,” Morozov said. According to him, the Burgas–Alexandroupolis pipeline project had attempted to solve that problem, but was stopped because of Bulgaria’s standpoint. On the whole, Russia has been sympathetic to Kazakhstan’s desire to diversify its energy export routes. “In particular, it supported the project of filling the east-bound Atasu-Alashankou pipeline. This, of course, was pragmatic of Russia, as it exports the crude from its Western Siberia fields to China through that pipe. The experts believe that this arrangement for crude oil exports to China may become a serious contribution to the creation of a common energy system of the Shanghai Cooperation Organization,” Morozov said. According to the Chief Researcher of the
Institute of Economics of the Ministry of Education and Science of the Republic of Kazakhstan, Professor Oleg Yegorov, a progress in the Kazakhstan-Russian relations is evident. “At the same time, the participation of the Russian companies in Kazakhstan’s oil and gas sector is limited to exploration, production, and transport of crude oil. I believe it is time they participated in processing-related projects,” he said. In particular, Yegorov mentioned the issue of refinery upgrades, citing the Pavlodar refinery as one working on Russian oil. “Therefore, it is the Russian companies that know best what is needed to upgrade it. Kazakhstan produces crudes of unique qualities. But the metals and paraffin compounds contained in those crudes are still not separated as independent products, and the deposits of bituminous rocks are still not being developed. Maybe, this is where the joint efforts should be stepped up,” Yegorov said. Academic secretary of the Kazakhstan Institute of Strategic Studies under the President of Kazakhstan, Bela Syrlybayeva, argues that Kazakhstan currently has a fairly diversified package of proposals for oil and gas. “And we can see that priority is given to the western companies and China, while the Russian companies do not occupy the largest segment of the market and lack many complex technologies that are needed. There are no Russians in Kashagan, for example, and they will not go there, as it has proved to be the most costly and risky project in the world. The oil there will be expensive, so the question is what to do with that oil. So, it’s my analysis that transport and refined petroleum products will remain the Russians’ priorities,” Syrlybayeva said. According to expert Sergey Smirnov, Kazakhstan’s refineries are currently underutilised, as it is more beneficial to export crude oil. “Presently, Kazakhstan has low customs duties, so the oil will be also flowing to the West. Therefore, from the point of view of integration with Russia, customs duties for crude could be raised and, much as they have done in the Russian Federation, some producers could be forced to supply crude to our refineries. There is simply no other way out,” Smirnov said.
Some of the $4.2 billion in oil revenue freed by nuclear agreements is on its way to Iranian accounts, Iran’s chief nuclear negotiator Abbas Araqchi said, adding that the funds would be deposited in an Iranian bank account in Switzerland. “As far as I know, all necessary measures have been taken and transfers are under way,” Islamic Republic News Agency quoted him as saying. The Iranian Students News Agency reported the first transfer totals $550 million. Iran, under the terms of a six-month nuclear agreement reached with Western powers
Iran says it expects oil revenue freed by nuclear agreements
in November, secured access to funds frozen by international sanctions. In return, Iran agreed to suspend some of its nuclear research activity. Iranian oil officials said they would announce a new framework governing oil contracts at a London energy conference in July. Meanwhile, Wendy Sherman, the under secretary of state for political affairs, said the recent easing of US sanctions on Tehran is “limited” and “temporary,” and noted that “Tehran is not open for business because our sanctions relief is quite temporary, quite limited and quite targeted”. Sherman testified before the Senate Foreign Relations Committee, adding that US officials have told foreign businesses that “we will in fact go after them, that we will sanction them … if they evade our sanctions”. Under new Iranian President Hassan Rouhani, the government said it’s expecting major new investments in its energy sector. Last week, Iran urged foreign companies to return to its oil sector as a major French business delegation visited Tehran in the hope Western sanctions may soon be lifted. In a speech to the delegation, Deputy Oil Minister Ali Majedi said Iran’s latest five-year
plan, running from 2010-2015, calls for $230 billion (€170 billion) of investment in its petroleum industry, of which $150 billion would go to upstream activities, according to the official IRNA news agency. In his remarks to dozens of representatives from the French employers’ union Medef, he added that Iran was reviewing its contracts to encourage foreign investment. He said nearly all downstream projects, for refineries and distribution, would be offered on a build-operate-transfer (BOT) or build-ownoperate-transfer (BOOT) basis.
9 -15 February, 2014
ENeRGY & CLIMATe
By Kostis Geropoulos
n 6 February, European Commissioner for Climate Action Connie Hedegaard said the European Union’s study on energy prices shows the climate mitigation policies are not the primary driver of increased energy prices. At the two-day European Energy Forecast Summit, Hedegaard said the lack of interconnectors, smart grids and infrastructure, and the failure to complete the internal market, were responsible for higher prices and that EU action on climate change should not be watered down on the basis of perceived cost. Hedegaard also dismissed concerns that her fellow commissioners are not behind the 2030 package. She said that the package was “a decision that the whole Commission took” and that “the whole Commission is defending the package, including the 40% target, which is at the core of the package”. On 5 February, the European Parliament called for a 40% cut in CO2 emissions, a 30% target for renewable energy and a 40% target for energy efficiency by 2030, under the EU’s new long-term climate-change policy. These targets should be binding, MEPs said. Hedegaard hailed the resolution, saying that “it is good the Parliament keeps the bar high. It is a good and strong signal to national governments. I hope they listen to this”. The European Parliament called on the Commission and EU countries, in its resolution adopted on 5 February by 341 votes to 263, with 26 abstentions, to set a 2030 EU target to reduce domestic greenhouse gas emissions by at least 40% from 1990 levels. It also said it wants an energy efficiency target of 40%, in line with research on the cost-effective potential, and a commitment to producing at least 30% of total final energy consumption from renewable energy sources. These targets should be binding, MEPs said, and implemented through individual national targets, taking account of each member state’s situation and potential. “We supported ambitious and
Hedegaard: Climate policy not responsible for high prices
Shale Gas Fear Leaves UK Vulnerable
European Commissioner for Climate Action Connie Hedegaard during a press conference on the 2030 climate and energy package, Brussels, 22 January 2014. AFP PHOTO|GEORGES GOBET
binding targets, and I am very pleased with this result” said environment committee chair Matthias Groote from Germany. “This resolution shows that what the House considers necessary in terms of climate policy is miles away from the short-sightedness shown by the European commission. “In terms of climate policy, we have to think outside the box. That’s what political drive means. And the Commission, once again, has proven unable to take this seriously,” he added. “The price of energy seriously affects companies, industry and, more specifically, our citizens. If we want to reduce our energy imports we have to produce more in Europe, by making better and more efficient use of our resources,” said the co-rapporteur for the environment committee, Anne Delvaux from Belgium. “If we have a broad energy mix with greater energy efficiency, this is the best option to reduce
to reduce greenhouse gas emissions, to encourage new technologies and innovation, create jobs, and change our economies into greener economies. This is why we need three binding objectives,” she added. The non-binding resolution follows up the Commission’s March green paper which triggered a debate on a 2030 framework for climate and energy policies after the current policy framework runs out in 2020. The Commission tabled proposals on 22 January setting less ambitious targets, which were met with scepticism from MEPs, who expressed their deep concern about the proposals. For MEPs, the Commission communication is short-sighted and unambitious on a number of levels, specifically as regards the lack of national targets for renewable energy and of any meaningful new action to incentivise energy efficiency, they said.
The Centre for Global Energy Studies, a consulting firm founded by a former Saudi Arabian oil minister, said it’s closing after 24 years. CGES, established in January 1990 by Sheikh Ahmed Zaki Yamani, has provided professional analysis to the oil and gas industry and often correctly predicted the course of oil prices.
Centre for Global Energy Studies to close after 24 years
“After all these rewarding years it is with regret that we have to inform you that as of 31st March, 2014, the Centre’s operations will sadly come to an end,” the CGES said in an e-mailed statement. “We would like to take this opportunity to express our deepest gratitude to everyone who has supported us over the years and who has contributed in this
way to our achievements, enabling us to enjoy the global reputation we have gained,” it said. “We would also like to thank our Founder and Chairman, H.E. Sheikh Ahmed Zaki Yamani, for his vision and generosity in supporting and funding the Centre for Global Energy Studies during all this time,” CGES added.
Cuadrilla Resources, one of the energy firms hoping to exploit the UK’s shale gas resources, has announced two new exploration sites in Lancashire. But drilling for shale gas in Britain is going to be extremely controversial. “There is potential but the level of public reaction to it is extremely negative at the moment and anybody trying to carry even testing at the moment is finding a lot of demonstrations,” Justin Urquhart Stewart, Director of Seven Investment Management in London, told New Europe on 7 February, adding that the government of British Prime Minister David Cameron is going to find it very difficult to actually get it through. “The potential is there but realistically I think they’re going to run into a lot of public concern unless it can be proven not to be dangerous to local communities,” Urquhart Stewart said. Unlike America, Britain is a crowded island and has a much bigger impact on a smaller area, he said. Last month, speaking during a visit to Gainsborough, Cameron defended plans to drill for shale gas, saying environmental concerns would be assuaged once people saw the benefits of fracking. “Cameron is strongly behind it but with an election coming up next year, I wouldn’t be at all surprised if it became a divisive subject in the run-up to the election and therefore what is a clear stance now may change before then,” ,” Urquhart Stewart said. “Companies looking at Britain as being a reliable developer of shale gas I suggest should wait until after the summer of 2015,” he added. Julian Lee, senior energy analyst at London’s Centre for Global Energy Studies (CGES), told New Europe on 7 February that it is very early days for shale in the UK. “We are only at the very first stage of exploration. The politicians hope that it will prove a major new source of gas for the country and enhance our energy security, reducing future dependence on imports, either as LNG or via Nord Stream,” Lee said. Russian gas monopoly Gazprom is considering the expansion of its Nord Stream pipeline. A new line to the UK would satisfy Britain’s growing gas demand. Lee said there is opposition to hydraulic fracturing from local communities, often whipped up by the anti-fossil-fuel lobby, who will oppose any form of oil or gas development – yet seem remarkably quiet about new licences in the North Sea. Most people in the UK are generally in favour of shale gas in a theoretical sense – as long as it doesn’t happen near them. There is fear of earthquakes and pollution, but little understanding of the real risks, he said. From a geological perspective, not everybody is convinced. “One major oil company pointed out to me that the shale is the source rock for oil and gas generation and that, if it is to be successful as a source of future production, it ought to have supported conventional oil and gas discoveries in the rock lying above the shale. This has not happened in the UK. There is no significant onshore conventional oil and gas production from rock layers lying above the shale in Lancashire, for example,” Lee said. “For this reason, that particular company says that it is unlikely to invest in UK shale,” he added. KGeropoulos@NEurope.eu follow on twitter @energyinsider
9 -15 February, 2014
There’s something brewing in Brussels
By Federico Grandesso ven Gatz, the managing director of the Federation of Belgian Brewers, speaks to New Europe about the city’s Brewery Museum where visitors can not only enjoy a glass of their favourite brew, but see how it is made. The museum entices visitors with its displays of implements, brewing and fermentation tubs, as well as a boiling kettle and the material found in an 18th Century brewery. They are also shown the latest in brewing technology as well as the raw ingredients (malt, hops, yeast) that are used to make beer. And they learn about how today’s malt industry functions and how computers are perfecting the filtering methods and cooling processes. There are high-tech bottling and packaging lines and impressive cylindro-conical maturing and fermentation tanks, which are used by most breweries today. The Belgian brewers will also happily offer you a glass of beer at the museum’s café. When did you start presenting Belgian beers?
Beer, a Belgian speciality! |
30,000 visitors every year. We welcome a lot of Americans, more and more Russians and Asians and many visitors from the EU. This is mainly a tourist attraction for the international public, but 5% of our visitors are Belgian. They come mostly in groups to enjoy an aperitif before dinner. Based on nationality, are there any particular tastes? It’s difficult to say, but an Asian public would often be seduced by a more fruity taste, while an Anglo-American public would be more charmed by Abbey or Trappist beers. But we do not want to turn it into a competition because we represents the entire sector and not just one single brand. This is why we serve only two beers at a time. You can’t have a profound tasting experience because we want you to visit the large number of bars in Brussels. We try then to rotate as much as possible to give the possibility to a larger number of our members to present their products. Are there any new projects you are working on for the future? Yes, we are working together with the city of Brussels and the Brussels Capital Region, to open a bigger Belgian beer “temple” just a few hundred metres away in the old stock exchange building. We would like to tell the story of Belgian beer in a larger space. This is why we started this new project a few years ago. We hope to open it in 2017. The old museum will remain open for another two or three years while this new project will make our museum 15 times bigger. Finally, it will not be only a museum, but a place where you will be able to feel, taste and experience the beer culture.
BELGA PHOTO NICOLAS MAETERLINCK
The museum was opened in 1992 to tell the story of beer and especially Belgian beer.
We are based in a building in the historical Grande Place and, if I remember correctly, we are the only trade association in the world still being in its old guild medieval house. At our museum, first you start learning about the ancient breweries of 150-200 years ago and then you get to the actual brewery and finally you can taste some beers of our members at our café. What can you tell us about the visitors? We are happy because we have around
Tens of EU funded movies in Berlinale
Berlinale festival will start on 6 February
By Karafillis Giannoulis Nearly 30 films supported by MEDIA programme, part of Creative Europe, participate at Berlinale festival. Berlinale starts on 6 February and the European Commission announced today that the films participating at the festival received €2.2 million in EU funding. Androulla Vassiliou, Commissioner for Education, Culture, Multilingualism and Youth, said about the success of the EU funding. “We are honoured that the festival has selected so many films supported by MEDIA for this year’s programme. The Berlinale is without doubt one of the most prestigious film festivals in the world and a beacon for the best in European film-making. The Creative Europe programme demonstrates our commitment to supporting cultural and linguistic diversity in the European film industry, as well as helping it to make the most of the opportunities created by digitisation and globalisation.” The MEDIA-backed films at the German festival represent a variety of European countries, stories, genres and artistic approaches. The four competing for Berlinale’s top prize, are: Aimer, boire et chanter (France), Aloft (Spain-Canada-France), Zwischen Welten (Germany) and Kraftidioten (Norway-Sweden-Denmark). Commission stressed that over the next seven years more than 800 European films will receive a total of €800 million in development and distribution support from MEDIA. The bulk of funding from the EU financial scheme, part of the new Creative Europe programme, will support the international distribution of European films outside their country of origin. Berlinale is a great cultural event and very important for the international film industry. More than 300,000 sold tickets, almost 20,000 professional visitors from 124 countries, including around 3,700 journalists: art, glamour, parties and business are all inseparably linked at the festival.
9 -15 February, 2014
ARTS & CULTURE
Red Light Secrets Museum opens in Amsterdam
By Toby Sterling, Associated Press AMSTERDAM — On any given evening, thousands of tourists stroll down the narrow canal-side streets of Amsterdam’s famed Red Light District, gawking at ladies in lingerie who work behind windows, making a living selling sex for money. Now a small educational museum is opening Thursday in the heart of the district to show reality from the other side of the glass. Organizer Melcher de Wind says the Red Light Secrets museum is for those who want to learn more about how the area works without actually visiting a prostitute. It’s located in a former brothel, one of the narrow buildings typical of Amsterdam. Visitors enter the museum by passing a hologram of a beckoning prostitute. Then the displays attempt to place prostitutes as part of society. There’s a short film showing the many people who work with them: those who clean or repair their rooms, do their laundry, or run over to their windows with coffee or food during shifts. Prostitutes rent windows on a half-day basis and can work shifts that are 11 hours long, six days a week. They spend a lot of time waiting for customers. In their free time, they visit local hairdressers, nail salons and clothing shops. There’s also a nursery school in the heart of the Red Light District, right next to the windows. In one scene in the film, a middle-aged prostitute in red leather receives an afternoon visit from her grade-school daughter. The museum makes only a passing attempt to document the history of prostitution tolerance in Amsterdam — starting from the 16th century, when it was a port city flush with wealth from the spice trade and authorities turned a blind eye when sailors went ashore looking for women. Or during the Napoleonic Wars, when prostitutes first began to have mandatory medical checkups to combat venereal disease among soldiers. The museum focuses on the era since 2000, when prostitution became legal in the Netherlands. Since then the city has been struggling — it says with some success — to eradicate pimps and human trafficking. Yolanda van Doeveren, who manages the city’s prostitution social programs, says the district is regulated by police officers, social workers, health workers, tax authorities and civil rights groups. A new girl who appears in a window will be noticed in a matter of hours and must be able to show that she’s old enough and has approval to work. The legal age to work as a prostitute in Amsterdam has recently been raised from 18 to 21. Van Doeveren says trafficking remains at the heart of the Dutch debate over the ethics of prostitution. There’s also an acknowledgement, however, that the worst abuses of underage girls or prostitutes being exploited by pimps now take place out of sight in underground brothels — an ongoing challenge for police. At the museum, the tour resumes: In one hallway, there’s a work roster on a white board showing who’s working in which room on what days, along with times for client appointments. There’s
Red Light Secrets
The museum, in the Amsterdam Red Light District, gives an inside view of the world of the Dutch prostitutes.
AFP PHOTO / ANP / KOEN VAN WEEL
A long history in Amsterdam
also a chance to take a seat in an actual window in front of passers-by. And then the tour proceeds to a typical “peeskamer,” Dutch for “workroom.” Ilonka Stakelborough, an escort who heads a sex-workers union called “the Geisha Institute,” says the rooms, about nine feet long and six feet wide (3x2 meters) have a standardized look that could really use an update — black lights have been nearly universal since the 1970s. The beds are low and strong, near a sink and a small cabinet of lubricants, cleansers, condoms and sex toys. “No perfume,” Stakelborough says. “Because then the smell rubs off on a man’s clothes and he has problems with his wife when he gets home.” Are married men the main customers? No, you can’t generalize, Stakelborough says. Men of all types, married, unmarried, young or old visit prostitutes at all hours, she says — some even on their way to work in the morning. How do you know who’s just coming to look and who wants to do business? “Eye contact,” she said. Very few women who work as prostitutes ever earn more than a middle class income at best — and usually it’s worse, according to Stakelborough and Van Doeveren. Stakelborough says it’s not the prettiest or youngest girls who get the most customers or earn the most. And escorts and high-end brothel prostitutes don’t necessarily do better — they have fewer customers, longer sessions and lots of costs, for taxis or splitting profits with brothel owners, she said. A window typically rents for €150 for a half-day. Given the standard cost of about €50 for a 15-minute session, their take-home pay before taxes is only €150 after seeing six clients, or €250 after eight. Approximately 75% of the women are from poorer countries, often Romania or Bulgaria. “Almost all the women who are here are here ‘voluntarily’, in the sense that they come knowing what they’re going to do,” van Doeveren says. “But you can ask yourself what their other options were.” At the end of the museum there’s a wall of quotes from prostitutes. “This job is not for the faint-hearted,” wrote
Eva from Holland. “I have become much harder.” “It makes me feel lonely my mother doesn’t know what I do,” wrote Carmen from Romania. Visitors can write down their own sexual secrets in a mock-up confessional booth before heading back out onto the street.
_____ If you go: The “Red Light Secrets” Museum of Prostitution is located on the Oudezijds Achterburgwal 60-62 in Amsterdam. The museum is open daily from noon to midnight.
The Prostitutes themeselves
In the window
9 -15 February, 2014
St. Vincent + Glass Animals
“Team of the Blind” art exhibition
17 Feb. – Ancienne Belgique, 20:00 St. Vincent, an American pop artist who has collaborated with David Byrne and Sufjan Stevens, will be performing at Ancienne Belgique along with the Oxford group Glass Animals. Glass Animals, comprised of Dave Bayley, Drew MacFarlane, Edmund Irwin-Singer and Joe Seaward, has been compared to Alt-J and Animal Collective. Their sound is quirky—they once de-
scribed it as “occult bunny lagoon.” Quirkiness, perhaps, is the theme of the night. St. Vincent, whose real name is Annie Clark, is known for her complex instrumentation paired with simple lyrics, as well as a bold stage presence. After spending three years at the Berklee School of Music in Boston, St. Vincent dropped out and moved to New York. She said listening to records and playing shows educated her more than any formal music class.
Unitl 16 Feb.—Ifa Gallery Ifa Gallery is celebrating its grand opening in Brussels with an exhibition of works by the Chinese artist Wu Junyong. The exhibition, which pays tribute to the painting “The Parable of the Blind” by Peter Brueghel, uses the entire gallery to bring the viewer into the surrealist world he has created. Junyong, a graduate of the prestigious Chi-
na Academy of Art, was greatly influenced by Flemish Renaissance paintings and has channeled this influence into many of his works, in a number of different mediums. Junyong’s work has been shown all over the world, including the Netherlands, Australia, China and the US. This is the first solo exhibition of his work in Europe. The exhibition will be on display at Ifa Gallery until 16 Feb. and is free.
Bombay Bicycle Club + The Ramona Flowers
Restaurant 1815 367 Route du Lion, Waterloo Tel 02 384 9884
www.restaurant1815.be If you fancy a relatively short trip out of town for an extra special dining occasion this place should be top of your list. Run by the very-friendly Maxime Vantal, it´s located close to the famous Battle of Waterloo site. As you sit enjoying the fine cuisine created by the restaurant´s renowned head chef Gregory Rousselle, the view of the famous Lion mound allows your mind to drift back to Wellington´s famous victory. Under new management since January 2011 and very tastefully refurbished, this is a cosy yet trendy place to dine. It offers a varied a la carte menu of Belgian-Franco favourites, such as parmentier de canard and gratine de St Jacques, all presented with a modern twist and at very affordable prices. There´s also equally impressive desert and wine lists. It seats 120 or 200 for a walking dinner and there´s a 30-seat private room and a particularly wonderful garden. Lunch is also a good option with three menus, ranging in price from a mere €11 to a threecourse choice at just €19.50. Well worth the excursion and, as Napoleon might have said, “superbe”!
Feb. 9—Botanical—20:00 Bombay Bicycle Club, a British pop-rock group hailing from London, has often been compared to the Arctic Monkeys. The fourman group is led by front man Jack Steadman, along with Jamie MacColl on guitar, Suren De Saram on drums and Ed Nash on bass. The group recently released their fourth studio album, So Long See You Tomorrow.
They will be accompanied by The Ramona Flowers, a five-man group from Bristol that mixes electronic and rock. The band’s sound has been likened to early Radiohead or U2, particularly because of lead singer Steve Bird’s unique vocals. The group released their most recent album, Brighter, in September 2013. Doors open at 19:30; the show starts at 20:00. Tickets are €20.
9 -15 February, 2014
Vietnam successfully completes human genome
HANOI - A group of scientists from the University of Technology under Vietnam National University (VNU) have successfully completed a Vietnamese human genome, said the university a few days ago. The group announced the initial results of the study on building and analyzing Vietnamese genome in capital Hanoi, said the website of VNU. Accordingly, the group, led by Dr. Le Sy Vinh, lecturer at the University of Engineering Technology and head of the program of key research on information technology, biology and pharmaceutical of VNU, received data of a Vietnamese human genome of over 108 billion nucleotides in late 2013. The genome map of the Vietnamese indi-
Dutch researcher says Earth food plants able to grow on Mars
vidual revealed a total of over three million SNPs (single nucleotide polymorphism), with many of them were found only in the genome of the Vietnamese individual. The building and analyzing human genome map have major impacts on many areas, including medicine, biotechnology and anthropology. Genetic analysis also plays important role in early detection and treatment of diseases. Dr. Le Sy Vinh said on the website of VNU that the success of building a Vietnamese human genome was the first step in the process of other projects over genetic system, laying a foundation for further studies on biodiversity and the relationship in genetic variations among Vietnamese people and others in Asia and the world. (Xinhua)
Mars could look like this one day say Dutch researchers.
BELGA PHOTO KURT DESPLENTER
THE HAGUE - The cultivation of various plant species, also food plants, is possible on soil of planet Mars, ecologist Wieger Wamelink of the Dutch research institute Alterra of Wageningen University told Xinhua recently. Researchers investigated whether it is possible to grow different types of plants in the soil of Mars and on the moon. They did an experiment with 14 plant species on artificial Martian and lunar soil, provided by NASA. The experiment lasted 50 days. “The outcome was quite a big surprise,” said Wamelink. “Some species such as rye and cress were already sprouting within 24 hours. Eventually plants on Mars soil were even blossoming. We we fertilized them with a brush, with some even seeding. It was exciting to watch. Tomato plants were growing and carrot plants even had small carrots, cress formed seeds.” A total of 840 pots were planted with 4,200 seeds. Mars and moon sand, supplied by NASA, so-called regolith, is the best possible imitation of real Mars and moon sand. The basis for this is volcanic soil of Hawaii and sand from Arizona. “We did not know what would happen when we added water to the soil. What turned out is that the Martian soil holds water well, while the moon sand did not.” All plants germinated in the Martian soil. The seeds of agricultural crops such as rye and cress germinated best, some wild plants germinated a lot worse. After 50 days in the greenhouse, a large proportion of the plants were still alive. Compared to the nutrient-poor river sands of the Rhine from 10 meters deep layers, the plants did even better in the Martian soil. Lunar soil did not prove fruitful. The germination was significantly less and the growth of all species was much worse. Many germinated plants died before the end of the experiment on moon soil. In addition, the crops did relatively poorly, but after 50 days a few plants were still alive like rye, carrot, cress, reflexed
stonecrop and red fescue. “There are a few reasons for the poor performance on the moon, besides that it does not hold water well,” said Wamelink. “We send the sand to our lab. Moon sand contains aluminium, which is poisonous for plants. In addition, the soil pH (acidity) is too high. There is not enough acid in the soil. But it would certainly be possible to grow plants on the moon. Only you have to manipulate the sand. This could be done by planting some specific plants absorbing the aluminium from the soil. And acidity can be easily lowered by adding acid.” With the results of the pilot in the pocket, Wamelink hopes his research group can continue with the experiment. “We want to know more,” he said. “What is the effect of gravity? This differs on Mars, the moon and Earth. How do plants respond to it? What about light? Mars is darker than Earth. Although the days have the same length, Mars is farther away from the sun. What about the colours of light? They are different on Mars. We also want to make the soil more suitable, by adding nutrients.” “We want to see when the plants are safe to eat,” the ecologist said. “In the next phase, we want to grow a tomato. We want to see if it is possible to yield enough to feed people.” The project was funded by the Dutch Ministry of Economic Affairs. Wamelink expects people to move and stay at the moon within 10 to 15 years. “If you go there and want to do research, you should try to grow your own food, fresh food,” he said. “That saves a lot of extra costs. Mars will take more time, with a one-way journey of more than six months to get there. I am 47 years old and do not want to go to Mars, but I would definitely like to go to the moon and back. It will take time, but eventually humans will grow food on the moon and Mars. It’s good to know that you do not need to carry (Xinhua) sand with you.”
Poland’s first face transplant earns world recognition
WARSAW - Poland’s first-ever face transplant has been recognized as the world’s best example of reconstructive surgery of 2013 at a recent annual meeting of the American Society for Reconstructive Microsurgery (ASRM) in Hawaii, Poland’s local media reported Thursday. The surgery was carried out in May 2013 at the Institute of Oncology in Gliwice of southern Poland by a team headed by Prof. Adam Maciejewski. A 33-year-old patient had had his face virtually ripped off during an accident while he was operating a machine that cuts stones. The accident had left him with no chance of survival without the operation. The ASRM is an organization of around 500 specialists in the field from around the world and Maciejewski is a Polish member. The patient who underwent the transplant is recovering well, local media reported, citing the doctors in Gliwice. Maciejewski’s team carried out a second successful face transplant in December 2013 on a 26-year-old woman suffering from a rare tumor disorder. (Xinhua)
First European had blue eyes and dark skin
Dark skin, brown hair and blue eyes. This, according to scientists, is what ancient Europeans looked like. The hunter-gatherers who walked the earth more than 7,000 years ago were not fair skinned, as some scientists initially thought. New genetic testing conducted by the Institute of Evolutionary Biology in Barcelona, Spain, suggests quite the opposite. The research findings were recently published in the journal Nature. According to the lead author, Dr Charles Lalueza-Fox, the lighter skin colour probably evolved much later than was previously assumed. The scientists tested two hunter-gatherer skeletons that had been discovered in a cave in north-west Spain in 2006.They were able to extract DNA from a tooth from one of the skeletons. Scientists had initially thought the first Europeans became fair soon after leaving Africa about 45,000 years ago. According to Lalueza-Fox, this was based on the assumption that they were going from Africa to higher latitudes where the UV radiation is very low. “It is obvious that this is not the case, because this guy has been in Europe for 40,000 years and he still has dark skin,” said Lalueza-Fox. Another remarkable finding from the DNA test is that the early European was probably lactose-intolerant and unable to digest starch. According to David Reich, a professor at Harvard Medical School in the United States, the Spanish findings are “significant”. “The dark skin is a very interesting finding, as light skin is nearly universal across Europe today,” said Reich. “These results suggest that the light skin seen across Europe today is a development of the last at least 7,000 years... It will be very interesting to see how general this result is across ancient pre-agricultural Europe once additional genome sequences become available.”
9 -15 February, 2014
Good news for homeowners in Denmark
Danish homeowners can relax! So said Denmark’s Deputy Prime Minister Margrethe Vestager, who promised property taxes will not be increased (at least not any time soon). Vestager, the parliamentary group leader the Danish Social Liberal Party, also serves as the economy minister. She appointed Morten Østergaard to the treasury ministry as part of the government reshuffle. Østergaard, however, is known for his views in favour of increasing property taxes. “The tax freeze should be removed starting in 2016,” Østergaard told reporters in the run-up to the 2011 elections. “Property taxes should be based on a property’s value. If housing prices do not rise, then no extra taxes would be due.” After appointing Østergaard to the treasury ministry, Vestager was quick to stress that his campaign rhetoric will not become reality. “Every minister should adhere to governmental policy,” she said. “A large majority in parliament agrees that property taxes should be frozen for a long, long time.” GERMANY|EdUCATION
Only 40% German students finish study as intended
Only 39.9% of German students graduated in the so-called standard period of study in 2012, announced by German Federal Statistical Office on Monday in Wiesbaden. In Germany, 6-semester bachelor program and 4-semester master program are the so-called standard period of study in which students should complete their studies in the university. Bachelor’s graduates with 49.4% are among the highest graduation rate in standard period of study, as the study said. Compared to 2010 and 2011, when a total of 38.6% and 38.5% of graduates could finish their studies in the normal period respectively, the rate of 2012 goes a little bit higher. However, the most German students don’t need much longer than the standard period of study, as 77% of German students graduated two semesters after the standard period of study and master graduates reached even the highest rate of 90.5%, when they could study two more semesters. According to the study, the students graduated fastest in subjects like management scientist, human medicine, social services, math, science and special education in Germany, whereas the slowest graduates are from subjects like sports science, philosophy, history, protestant theology and German. (Xinhua) POLANd|ChILdREN’S POVERT Y
Germany is secretly planning to export 100 patrol boats to Saudi Arabia, according to a classified letter leaked to Der Spiegel, Germany’s leading newsmagazine. If Saudi Arabia agrees to purchase the German-made boats, this €1.4 billion deal will be the first major weapons export to the Gulf region by the newlyappointed government, which is led by Chancellor Angela Merkel’s conservatives and the centre-left Social Democratic Party. The letter leaked to Der Spiegel was signed by Germany’s deputy finance minister Steffen Kampeter and was tabled to the parliamentary budget committee for review. In the letter, Kampeter explains the “high importance in terms of economic and employment” of the deal, which includes contracts for the Bremen-based Lürssen Shipyard. A deal with Saudi Arabia, however, is likely to put Germany - one of the world’s largest arms exporters - back in the hot seat. Three years ago, Germany was heavily criticised for its decision to sell its Leopard 2A7+ main battle tanks to Saudi Arabia.
Germany selling arms to Saudi Arabia, again
GERMANY | ARM MARKET
German made battle tank ‘Leopard 2 A7+’ sold to Saudi Arabia.
The latest deal is still being discussed by the country’s Federal Security Council, whose members include Chancellor Angela Merkel and several ministers. Last year, the council approved more than a billion euros’ worth of shipments to Bahrain, Kuwait, Oman, Qatar, the
United Emirates and Saudi Arabia. But Germany’s defence contracts in the Gulf region are the subject of intense debate. Economy Minister Sigmar Gabriel, for instance, is calling for a ban on the delivery of repressive instruments to authoritarian regimes.
SWEDEN |SECRET DONATIONS
Sweden under pressure to outlaw secret donations to political parties
The European Commission is calling on Sweden to fight corruption by banning anonymous political party donations. Sweden is one of few European Union member states that does not regulate political party donations - something which has also been criticised by the Council of Europe. This could soon change. The government has announced plans to draft legislation before the next elections scheduled to be held in September. But this issue is just one of several highlighted in the commission’s anticorruption report. While Sweden is one of the least corrupt countries in the bloc, the report said the government must do more as regards corruption at the local (municipal and county) level. One measure proposed by the commission is to secure transparency in public contracts with private companies. Another major issue concerns the Swedish judicial system and the prosecution of corporations for bribery in other countries. The commission is calling on Sweden to raise the fines and hold intermediaries or third-party agents accountable for such crimes. According to a recent opinion poll, 40% of Swedes believe that corruption is rife in their country.
A life of poverty for 1.4m children in Poland
More than 1.4 million children in Poland - more than a quarter of all children - are living in poverty, according to the findings of a new study conducted by the country’s Central Statistical Office. These children live in families with incomes below the poverty level - 1,824zł (€429) a year for a family of four. Children in large families and in small towns are the hardest hit, according to the official data. In an interview with the Polish daily Rzeczpospolita, Professor Katarzyna DuczkowskaMalysz said: “Unlike in the countryside, where there’s the opportunity to take advantage of what nature offers, such as one’s own farm products, in small towns one has to buy everything.” The official data shows that more than 500,000 children do not eat meat, fish or poultry once every two days because their parents cannot afford it. Other findings show that 600,000 children do not visit the dentist and that a third of Polish families cannot afford to take a week-long vacation once a year.
BERLIN - Germany must act decidedly in response to the crisis in Ukraine and sanctions against the government should be used as a threat if efforts seeking to find a political solution are rejected, German Foreign Minister Frank-Walter Steinmeier said Monday. Steinmeier described the situation in Ukraine as “highly explosive” in an interview with Germany’s ARD television late on Monday. “I think we must now show sanctions as a threat,” the minister said, adding that Germany had to be ready to opt for these measures if talks between the government and opposition did not lead to “expected and demanded progress.”
German FM threatens sanctions against Ukraine
Talks between Ukrainian President Viktor Yanukovych and opposition leader Vitali Klychko are planned for Tuesday in Kiev, which is also expected to be attended by EU foreign policy chief Catherine Ashton, reports said. The sanction comments of Steinmeier, who called for engagement of German government to help create a political solution to end the Ukrainian crisis, strike a different tone from the line taken so far by Chancellor Angela Merkel, who said last week there was no question of sanctions at the moment. Ukraine has been hit by more than two months of protests following a government decision to put on hold an association
GERMANY | SANCTIONS
agreement with the European Union and opt for closer relations with Russia. Demonstrations turned violent on Jan. 19, when radical activists attacked riot police with fireworks and petrol bombs. At least four people were reportedly killed and hundreds of others, including police officers, injured during clashes between protesters and the government forces in the past two weeks. Ukrainian Foreign Minister Leonid Kozhara said on Saturday at the Munich Security Conference that Ukrainian government had met all the requirements of the opposition and the latter should do their part to end the crisis in the East European country. (Xinhua)
9 -15 February, 2014
Ireland’s consumer sentiment returns to 2007 peak levels
London housing market under price bubbles risk
LONDON - Housing market in London is beginning to show signs of bubble-like conditions, said a research report issued by Ernst and Young Item Club (EY ITEM Club) on Monday, while asking the government to monitor the trend closely and be prepared to intervene. The EY ITEM Club forecast showed the average house price in London is expected to reach nearly £600,000 by 2018, some 3.5 times the average price in Northern Ireland and more than 3.3 times the average in the North East. It said the average house prices in Britain growing by 8.4% this year and 7.3% in 2015, before cooling to around 5.5% in 2016. House prices would show a regional divergence. Outside of London and the South East, the regions with the highest levels of house price growth are expected to be the South West and East of England, both set to grow by 6.2% from 2013-18. In contrast, the North East is expected to have the lowest level of price growth at 4.2%, with Scotland at 4.5% and the West Midlands at 4.6%. The report said income multiples are now back to pre-financial crisis levels in London, with homeowners taking on ever larger mortgages. Caution on the part of borrowers and lenders should prevent a serious problem developing. The EY ITEM Club suggested a macro prudential intervention over higher interest rates, so the Bank of England’s Financial Policy Committee (FPC) would need to play a central role. If it decides to intervene
UNITED KINGDOM |HOUSiNg MARkET
House prices going through the roof.
AFP PHOTO / CARL COURT
it should be to impose a formal limit on income multiples. Andrew Goodwin, senior economic advisor to the EY ITEM Club comments: “House prices across most of the country remain well below their pre-crisis peaks and there seems little danger of a bubble developing. But London, which is suffering from a combination of strong demand and a lack of supply, is increasingly giving us cause for concern.” “Some have suggested that Help to Buy should be altered or cancelled but this is a red herring. The scheme has only a very limited impact on the capital and withdrawing it could risk choking off the recovery in housing transactions across the rest of the UK without solving any of Lon-
don’s issues,” Goodwin said. Goodwin says that while recent trends had been very encouraging, it would also be advisable for the government to do more to ensure that the pickup in housing supply continues. He suggested the government to do more to resolve rigidities in the planning system, with a particular focus on ways to increase supply in and around the London area. “The government still owns a sizeable amount of brown field land which could be sold off to house builders more quickly than it is currently,” he said. “On a larger scale there is also a case for the government to use its own low borrowing costs to fund a program of house building, “ he concluded. (Xinhua)
DUBLIN - Ireland’s consumer confidence has returned to the 2007 peak levels, according to the latest monthly sentiment index. The index showed consumer sentiment increased in January to 84.6 from 79.8 in December. The 3-month moving average increased from 75.7 last month to 78.5 in January. The index, based on telephone surveys with 800 consumers, is jointly compiled by KBC Bank Ireland and the Economic and Social Research Institute (ESRI). “Consumer sentiment gained further in January, following an upbeat December. The index improved from 79.8 last month to 84.6, a level not seen since May 2007,” said ESRI research assistant Kevin Timoney. He said every year of the survey has begun with a boost to the buying climate for durable consumer goods, supported by the January sales. He also said improved perceptions for the labour market over the coming year also “contributed to the increase in sentiment.” Meanwhile, Austin Hughes, chief economist of KBC Bank Ireland, said Irish consumers began in 2014 in “a more positive mood” as it seems they expect the Irish economy to improve and unemployment to fall further in the coming year. “We don’t think this means consumers see current conditions as normal,” Hughes said. “The circumstances facing Irish consumers have varied so much through this period that we can’t interpret the January reading in this way. However, last month’s results suggest consumers sense that some improvement from the difficulties of the past few years is taking hold.” He said about 70% of the rise in the sentiment index between December and January is “due to a largely seasonal boost to spending plans that reflects the influence of Christmas sales.” “There is likely to be some reversal of this factor in the February data that might even mean a weaker reading overall this month. However, we think the underlying trend in consumer sentiment is still modestly positive and any setback is likely to be temporary,” he added. (Xinhua) LATViA|RUSSiAN ScHOOLS
TOKYO - British ambassador to Japan Tim Hitchens urged the country to admit historical mistakes and create better environment for improving ties with neighbouring countries, local media reported on Monday. Hitchens told a conference hosted by the Research Institute of Japan that the British government “would be worried by actions which heightened regional instability.” The ambassador indirectly asked Japanese Prime Minister Shinzo Abe not to visit the war-related Yasukuni Shrine again, Japan’s
British ambassador urges Japan to admit historical wrongs
Jiji Press reported. When talking about Japan’s historical problem, the British diplomat said the best way for a nation to correct historical mistakes is to admit its own errors. Hitchens also stressed the importance of holding meetings of Asian leaders, as well as increasing private sector exchanges. Even if Japan cannot build perfect relations with its neighbours right away, the country should make preparations for a good opportunity in the future, Hitchens said, calling for mechanisms to nurture trust
UNITED KINGDOM | JAPAN’S HiSTORicAL MiSTAkES
Does Latvia need Russian schools?
between Japan and its neighbours. Abe visited the Yasukuni Shrine that honours 14 Class-A convicted war criminals along with Japan’s war dead on Dec. 26 last year. It is the first time in seven years that a sitting Japanese prime minister visited the controversial shrine. The move triggered strong criticism from neighbouring countries that suffered tremendously under Japan’s brutal aggression and colonial rule during the first half of the 20th century. (Xinhua)
EU: Latvia needs to step up the fight against corruption
Despite some progress in preventing and addressing corruption, Latvia still needs to do more, according to the European Commission’s Anti-Corruption Report. In its report, the commission applauded Latvia (a member of the European Union since 2004) for creating a searchable online database of political donations and for its ongoing efforts to develop and improve its anti-corruption laws. What is missing, however, is Latvia’s political will to implement the legal framework. According to the commission, Latvia
should strengthen the independence of its Corruption Prevention Bureau and ensure it is not influenced by politics. Another measure proposed by the commission is to promote e-procurement policies and to increase the transparency of state-owned companies.
A proposal to open a Russian school in Latvia has been criticised by the mayor of Riga, Nils Usakovs. He told LNT, a major private television network in Latvia, last week that it “makes no sense”. Usakovs, a Russian-speaking naturalised Latvian citizen, is a member of the proRussian Concord Centre party. His statement to LNT was in response to plans announced by Russia’s foreign minister, Sergei Lavrov. According to Usakovs, there is no need to open Russian schools in Latvia because Russian children already attend minority schools in which they learn the Russian language. In response to the mayor’s statement, Russian Ambassador to Latvia Alexander Veshnyakov explained that Russia’s plan is for a Sunday-school style education establishment, not full-time schools. But even this will not be easy to set up. Latvia’s Education and Science Minister Inda Druviete said it is unlikely that Russia will be able to secure the required licences and permits to establish this type of school. Meanwhile, more than a third of the country’s population is Russian and Russian speakers make up 44% of Latvia’s 2 million population. Latvian, however, is the official state language and Russian is considered as a foreign language. The Russian language was actually rejected as an official second state language at a referendum held in 2012. At public schools and kindergartens, however, children are still taught in both Russian and Latvian languages.
FRANCE |IRaN’S MaRKET
9 -15 February, 2014
Austria’s central bank governor’s take on Hungarian banking crisis
AUSTRIa|HUNGaRIaN BaNKING CRISIS
Ten years ago, Hungary boasted one of the healthiest banking and financial systems in Central Europe. Not today. In fact, the situation is a big issue in Austria where the governor of the country’s central bank, Ewald Nowotny, is openly discussing the withdrawal of Austrian banks from Hungary. He is, however, hoping for a “workable and fair” solution to the problems the banks are facing in Hungary. “Close relationships are not necessarily always easy relationships,” Nowotny told a banking conference in Budapest last week. “Our two central banks recently faced some difficult issues revolving around some foreign-owned banks. I am quite confident that at the end of the day, we – and our governments – will find such [workable and fair] solutions. “We all know very well that in the affairs of external and internal affairs there may be situations of disagreement but history teaches us that we should never go so far as to see each other enemies,” he added. Earlier this year, Austria’s Raiffeisen Bank International rejected an offer tabled by semi-state owned Hungarian lender Szechenyi Bank Zrt to buy its unprofitable Hungarian unit Raiffeisen Bank Zrt. LUXEMbOURG|AID GROUPS
Luxembourg helps three international aid groups
Three Luxembourg-based international aid organisations were granted more than €22m to finance their development projects around the world. The funding was approved by Luxembourg’s ministry for cooperation and humanitarian action. The groups, Handicap International Luxembourg, Nouvelle Pro Niños Pobres and SOS Faim – Action Solidarité Tiers Monde, run more than two dozen projects around the world. Handicap International was granted €10.1m for four years, SOS Faim was awarded €9.5m and Nouvelle Pro Niños Pobres received €2.8m. The funding agreement is based on a 1996 law that allows the government to fund organisations up to 80%. The three organisations are part of a bigger group of 94 non-governmental organisations that are officially registered with the state. Only 17 have signed a funding agreement with the state. SlOVaKIa|EMPlOYMENT
Slovakia earmarks €10m to aid young people to start businesses
TEHRAN - A French delegation has arrived in Iran to explore business opportunities as Tehran is opening up its economy to the international business amid West's partial easing of sanctions, official IRNA news agency reported on Monday. The French visit aims to explore ways to boost economic ties with Iranian traders and economic activists as well as paving the way for investment in Iran, the report said. On Monday, the delegation with over 100 members held a meeting with members of Iran's Chamber of Commerce, Industries, Mines and Agriculture, as well as with the officials from Iranian key ministries. The delegation, comprised of industrialists from auto-making and mining sectors as well as other entrepreneurs, is also scheduled to hold talks with other Iranian business officials, according to IRNA. The visit follows the recent landmark interim nuclear deal between Iran and the world powers. The agreement eases some of the Western sanctions placed against the Islamic republic, leading business entrepreneurs and political leaders to scramble to establish relations. Directors of the largest private-funded union of employers in France would travel to Tehran in early February to explore ways to invest in different fields of economy in Iran, the vice president of the Movement of the Enterprises of France (MEDEF) Thierry Courtaigne announced earlier. "We want to resume relations with Iran," Courtaigne said, adding that "We have already met with the French ambassador to Tehran, a number of French investors as well as the chairman of the Iran-France Joint Chamber of Commerce regarding the French delegation's travel to HUNGARY |TaXES
France eyes Iran's market amid West's ease of sanctions
A thaw point?
AFP PHOTO/ATTA KENARE
Iran." French consultants, designers and investors would travel to Tabriz, capital of Iran's northwestern East Azerbaijan province, in the form of holding firms to implement urban projects, Iran Daily reported. A visiting French group of consultants and designers expressed their readiness to collaborate on Tabriz Municipality projects, Tabriz Mayor Sadeq Najafi was quoted as saying. "Establishment of a tourism zone, recreational winter complex and Baghlarbaghi Park plan are among the projects discussed with the French delegation," Najafi said. In the past months, delegations from Italy, Turkey, Germany and the Netherlands as well as the Republic of Korea (ROK) visited Iran in search for trade opportunities. Following the deal signed between Iran and the P5+1 group including the United States, Russia, China, France, Britain and Germany, in Geneva last Nov.
24 to resolve the country's controversial nuclear program, the Islamic republic is seeking foreign investment in its diverse economic projects. Under the deal, the United States and its allies have started to lift part of sanctions on Iran in the fields of petrochemicals, auto industries and civil aviation. They have also agreed to unfreeze part of Iran's blocked assets in western banks. As an evidence of an ease on the financial sector of the country, Iran received $550m as the first instalment of its frozen assets in western banks, local media quoted the government spokesman as saying on Monday. Unblocked money, the first instalment of 4.2 billion U.S. dollars in frozen assets, was deposited in a Swiss bank account as a part of nuclear deal between Iran and world powers clinched last year, Iran's Deputy Foreign Minister Abbas (Xinhua) Araqchi said.
BRATISLAVA -Slovakia will provide €10m to help hundreds of people under the age 25 to support their enterprises, local newspaper reported Tuesday. The fund was provided by the a national program called "Securities for the youth in Slovakia", reported by local daily Hospodarske Noviny. Created by the Department of Employment, Social Affairs and Family of Slovak Republic, the program aims mainly to support for the youth employment. The program is focused on youth under 25 years of age. The funds have been allocated by the European Union's program "Youth Employment Initiative". "Our main goal is to support existing jobs for the youth, youth prequalification and further qualification processes and to help the youth through employment practice, or internships," the Department of Employment, Social Affairs and Family was quoted as saying. Matej Ftacnik from The Spot organization, which helps start-ups in Slovakia, said that analysis of data has shown that 80% of supported projects have been in a 5 year period, fully integrated in the job market and had a reasonably high income. (Xinhua)
Warning: high-income Hungarians will pay if leftists take power
Hungary’s former prime minister and president of the Democratic Coalition party, Ferenc Gyurcsány, warned last week that salaries above HUF 500,000 (€1,600) would be taxed by as much as 30% if the left-wing opposition coalition wins the upcoming elections. In a recent televised interview, he said the tax revenue would be used to stuff the central government purse. Speaking at his party caucus last week, Gyurcsány also warned that a left-wing coalition win will mean that “there will be no more money available in the short term” and “fiscal adjustments will certainly be needed”. According to the 2013 edition of an international tax survey published by the Organization for Economic Cooperation and Development (OECD), Hungary is one of the countries in the region that is most reliant on tax revenues. Two years ago, the country had a tax to GDP ratio of nearly 39%, compared to 37.4% in Slovenia, 35.5% in Czech Republic, and 28.5% in Slovakia.
The Netherlands’ reputation as a country to emulate in terms of fighting corruption and bribery is starting to suffer. According to the European Com-
Brussels calls on Dutch to improve transparency
mission’s new report (its first on measures to combat corruption within the 28-member bloc), the Dutch have made little progress transparency in politics. Under current rules and regulations,
THE NETHERLANDS |TRaNSPaRENcY
senior officials and former ministers are allowed to take any job in the private sector. Government officials are also safe from any checks as regards potential conflicts of interest with the state.
9 -15 February, 2014
New law could benefit Romanian prisoners
Spanish government figures show that the number of people registered as unemployed has risen by 113,097 as temporary job contracts created over Christmas come to an end, AP reported. On 4 February, the Labor Ministry said the reduction put the total number of those registered in unemployment offices at 4.81 million in January. Year-onyear, the figure was down 166,343. Quarterly unemployment surveys - seen as more accurate by economists - show Spain’s unemployment rate was 26% in the fourth quarter of 2013, with six million people out of work. The rate is the second highest in the 28-country European Union after Greece. Spain is battling to recover from a two-year recession. However, the government insists the economy is improving and will create jobs in 2014. Almost 100,000 people were laid off from the services sector, while employment also fell in agriculture, by 8,110 people and in industry, by 3,577. “This month’s figure remains significantly better than previous years, considering that in the last five years regisITALY|ECONOMY
Jobless total spikes
Romanian prison authorities say some 400 inmates could be in line for parole or more lenient sentences under a revised criminal code, AP reported. The National Penitentiaries Administration said Monday that 122 inmates had been released 1 February, when the code became law, and 176 people are eligible for reduced sentences. Other cases are being analysed. In December, Parliament approved amendments to the penal code that critics said would give its members and other elected government officials immunity from corruption charges while in office. Several former senior politicians, including former Prime Minister Adrian Nastase, are currently serving prison sentences for corruption. Reports say they could be eligible for parole under the new code which also reduces punishments for sex with minors, drunk driving and prostitution. ROMANIA|ENERGY
A Coca-Cola employee makes noise as he and around 2,000 people take part to a march to protest against the closure of four Spanish plants, in Madrid, 2 February 2014. AFP PHOTO/DANI POZO
Oltenia to borrow €200 million from EBRD for upgrades
tered joblessness has risen by an average of 544,000 people on an annual basis,” Spain’s Employment Secretary Engracia Hidalgo said. The Spanish economy emerged from a two-year recession in the second half of last year, prompting many econo-
mists to raise their economic forecasts and the government to forecast net job creation for 2014. But for many Spaniards, making ends meet remains a constant struggle. Jobs are scarce and, when they do become available, wages are often low.
On 5 February, Italy’s Court of Auditors confirmed it was investigating the world’s leading international credit rating agencies over a series of downgrades at the height of the eurozone crisis that allegedly failed to take into account Italy’s cultural heritage, news agencies reported. The 2011-2012 downgrades by Standard & Poor’s, Moody’s and Fitch resulted in a sharp increase in Italy’s risk indicators and contributed to a rise in its borrowing costs, forcing then-premier Silvio Berlusconi to be replaced by a technocrat cabinet. Italy’s Audit court said the probe was at a preliminary stage, however, and might be shelved and that it was premature to talk of suing for damages. “It is still a preliminary investigation, therefore the case could also be thrown out, after (credit rating) agencies present their explanations
Audit Court probs rating agencies over downgrades
and counter-observations,” auditors said in a statement. “Never in its ratings did they point out Italy’s history, art or landscape which, as universally recognised, are the basis of its economic strength,” wrote the Corte dei Conti. According to the Financial Times, the Corte dei Conti may sue S&P alone for as much as €234 billion. The Corte dei Conti is an institution with the constitutional role of “safeguarding public finance and guaranteeing the respect of the jurisdictional system”. Before the statement was released, Raffaele De Dominicis, the prosecutor handling the case, said that the agencies had two months to respond to the Corte dei Conti. Prosecutors would then have a further four months to decide how to proceed. Italy’s Economy Minister Fabrizio Saccomanni said he could not comment directly on the report but endorsed the notion
Romanian energy holding Oltenia has signed an agreement to borrow around €200 million from the European Bank of Reconstruction and Development (EBRD), the Romanian Economy Ministry said, SeeNews reported. The company will use the funds to upgrade one of its power production units, the economy ministry said in a statement. The Oltenia holding, set up in 2012, includes state-run mining company SNLO and the Craiova, Turceni and Rovinari thermal power generation complexes. Romania’s economy ministry holds a 77.17% stake in Oltenia and blue-chip investment fund Fondul Proprietatea [BSE:FP] owns 21.54%. BULGARIA|ENERGY
that rating agencies should not be taken too seriously. “I don’t make direct comments. But I always found that the role of ratings agencies as risk assessor for a country was excessive, and I believe that our action, both at the government and as the Bank of Italy, is to clarify that the judgement of the ratings agencies is not the only one,” Saccomanni said. “I believe that today we measure the valuation that investors give Italy more on treasury bond interest rates which are falling to very low levels, and by the interest they have in our privatisation and marketopening activities”. Nevertheless, Italy’s Culture Minister Massimo Bray said, it raised the issue of how Italy should do more to exploit its cultural heritage. Italy is home to three-quarters of the world’s artistic and archeological treasures, a priceless trove whose exact value has never been assessed.
BEH says NEK, ESO plit-up completed
SBulgarian state-owned electricity company NEK and Electricity System Operator (ESO) completed on 4 Februar the last phase of their split-up, regarding the unbundling of the ownership of the network and the associated assets, the Bulgarian Energy Holding (BEH) said, SeeNews reported. The unbundling will allow ESO, as the owner of the grid, to start the process of its certification as an independent transmission operator as a further step in the development of a competitive and financially stable energy market, BEH said in a press release. The split-up of the two companies is required under the EU’s Third Energy Liberalisation Package. Bulgarian Energy Holding (BEH) - a state-owned holding company set up in 2008 which controls Mini Maritza-Iztok, NEK, ESO, Bulgargaz and the country’s sole nuclear power plant Kozloduy - took full control of ESO from NEK in 2013. BULGARIA|BUSINESS
President sees serious prospects of talks resuming
On 6 February, Cyprus’ President Nicos Anastasiades said there were “serious prospects” that long-stalled talks to reunify the island could resume between the estranged Greek and Turkish Cypriot communities, local press reported. Anastasiades said negotiations between the two sides on drafting a joint communique outlining principles of a settlement were at a “delicate point”. “Today, it appears serious prospects are being created for a substantive joint communique, which satisfies … the basic principles of the solution of the Cyprus problem,” Anastasiades said during a televised address. The President said he had briefed the party leaders earlier on the develop-
ments and was departing for Athens for talks with the Greek leadership. “With the conclusion of the consultations, I intend to address the people of Cyprus and inform them analytically, but also in depth, about the actual facts. That is why I avoid commenting on what is being said,” Anastasiades added.
PM sees huge potential in public-private partnership
Bulgarian Prime Minister Plamen Oresharski said that publicprivate partnerships and private investment could contribute much more to the development of his country amid the limited state resources, Xinhua reported. “A huge untapped potential for financing the government efforts is hidden in field of public-private partnership,” Oresharski said at a meeting of the Consultative National Security Council, as quoted by the Government Information Service (GIS).
TURKEY | ISRaEl
9 -15 February, 2014
Turkey on the defence to boost economy
Turkey’s defence industry is booming, according to the latest data released by the Turkey Exporters Assembly (TIM). The data show domestic defence production increased from 10% to 50% and that military exports reached a whopping $1.4bn last year, compared to $600m in 2008. According to Latif Aral Alis, who heads Turkey’s Defence and Aerospace Industry Exporters’ Association, the projection for this year is to maximise production and reach $2bn worth of exports. At this rate, the value of defence exports could reach as high as $25bn in the next 20 years. In a recent statement, he said: “Turkey has become a country that is able to manufacture and export a large part of its defence equipment such as helicopters, unmanned aerial vehicles, warships, training aircraft and missile guidance systems”. According to Turkey’s Prime Minister Recep Tayyip Erdogan, 50% of the country’s defence industry products are “produced in the country”. The government’s determination to expand the country’s domestic defence industry is tied to the country’s economic development. Sinan Ulgen, who chairs the Centre for Economics and Foreign Policy Studies in Istanbul, says it will allow Turkey to reduce its current account deficit by developing a new and important export base and decrease its reliance on foreign suppliers. In turn, this will help the country overcome some of the deficits in its strategic capabilities in the areas of air and missile defences. But not everyone is convinced. Gareth Jenkins, of the Silk Road Studies Programme’s Turkey Initiative, is sceptical about the defence industry figures that were announced. He says the official data is “misleading”. “There is no doubt that the local defence industry is much more developed than it was 10 years ago,” Jenkins said. “However, it would be a mistake to assume that Turkey is on its way to become a major defence industry manufacturer and exporter. For example, Erdogan recently gave a speech about Turkey producing its own fighter jet... Even if Turkey was able to manufacture a fighter jet that was equal in terms of technology and capabilities to those being made by other countries with long-established defence industries, it would probably be so expensive that nobody would want to buy it.” TURKEY|EU ACCESSION
By Adam Gonn, Xinhua
Israel-Turkey reconciliation still faraway despite Israeli payment offers
JERUSALEM - Israel has offered to increase the compensation it would pay Turkey for the lives lost in 2010 when the Israeli Defence Forces raided the Mavi Marmara, a ship that was heading to Gaza as a part of international convoy set to break Israel’s maritime blockade of the Palestinian enclave. Israel intercepted the ship filled with civilian activists, killing nine Turkish men in the process, and Turkey immediately broke off all diplomatic relations with Israel. Israel has signalled that it is willing to deposit compensation into a fund for the affected families. However, as David Kushner, a professor from the University of Haifa, told Xinhua on Monday, the compensation is just one of the issues to be resolved if Israel want to reconcile with Turkey. Since the infamous incident, Turkey has demanded that Israel apologize officially to the Turkish people, lift the blockade on Gaza and pay compensation to the families of the victims. For Israel, the amount of the compensation is a minor issue, although lawsuits against the soldiers and officers involved in the raid that have been brought forward by families of those killed on the Mavi Marmara remains a thorny issue. When Turkey recalled its ambassador in the days following the raid, it signalled a low point in Israeli-Turkish relations, which in the past had included civilian and military trade as well as joint military exercises. The breakdown meant that not only did Israel lose an important export market but also a regional ally. Initial progress was made when Israel did apologize last year when U.S. president Barack Obama during the last moments of his visit to Israel in March 2012 facilitated a phone call between Israeli Prime Minister Benjamin Netanyahu and his Turkish counterpart Recep Tayyip Erdogan. Analysts say the reason why Israel waited to apologize was that the government wanted to assure that the apology, which in effect implies that it was Israel who was responsible for the deaths on the Mavi Marmara, wouldn’t be used against Israeli ALBANIA |CRImE
Thousands of Turkish protestors greets from harbour and boats the Mavi Marmara ship as it returns to Istanbul after Israel’s deadly raid on an aid flotilla bound for Gaza Strip on 31 May, in Istanbul, Turkey on 26 December 2010. EPA
Merkel remains sceptical about Turkey’s EU accession
soldiers in Turkish courts. “The important part is the legal aspect,” said Alon Liel, a professor from The Hebrew University of Jerusalem. “Even more important than that is the will of the Turkish government because if it would make a real effort, this would have been settled already.” Proponents for protecting Israeli soldiers are hoping the Turkish parliament will pass a bill that would make impossible for any of the families to try to prosecute the soldiers and officers involved in the raid. “There isn’t enough will on the Turkish side to remove the legal claims,” said Liel, adding that the families of the deceased are “ideological” and that the money wasn’t “the critical thing” for them. Despite little sign of the bill progressing, a number of positive signs have emerged, including the resumption of negotiations between lower level government officials from the two sides in December 2013 when an Israeli delegation visited Turkey following an invitation. The first rounds of talks were held almost immediately after Obama’s visit, but after the Washington Post claimed that Erdogan had passed information on Israeli Mossad agents to Iran, they broke down.
BERLIN - German Chancellor Angela Merkel said on Tuesday that talks on Turkey’s membership of the European Union (EU) are a “open-ended process” and she remains sceptical about a full membership for the country. Germany supports moving forward the negotiation process by intensifying talks about regional policy and opening sections that address issues such as justice, Merkel said during a press conference with visiting Turkish Prime Minister Recep Tayyip Erdogan. However, the chancellor said she remains sceptical about whether Turkey should join the bloc and won’t put a time limit on the negotiation process. Earlier in the day, Erdogan gave a speech to a German think tank, saying the EU could also benefit from Turkey’s presence at the bloc’s table. He urged Germany to step up support for Turkey’s entry bid, acknowledged at the same time that his country must also press on with reforms. Turkey has been an EU candidate since 1999 and began its formal membership talks in 2005. The talks, however, have long been stalled, primarily over its dispute with Cyprus. Instead of a full entry, Germany has been in favor of a “privileged partnership” between the EU and Turkey. (Xinhua)
However, according to the Hurriyet Daily, the last round of talks was successful and if concluded, the first step would be to reappoint ambassadors. Prior to the December meeting, Turkey eased its demand that Israel lift its blockade on Gaza when Turkish Foreign Minister Ahmet Davutoglu in November said the changes that Israel made on which goods would be allowed in to Gaza was to Turkey’s satisfaction. In December, Israeli Minister of Environmental Affairs Amir Peretz became the first Israeli minister to visit Turkey since the incident when he took part in a four-day UN conference on environmental issues in and around the Mediterranean. Kushner characterized the events of the last couple of months as “a little defrosting,” saying: “things that we thought wouldn’t happen, did happen in recent weeks and months.” He added that there is a chance formal diplomatic relations will be restored but cautioned that it will not happen today or tomorrow. “Eventually there will be a change but it takes time and the situation now in Turkey is perhaps not conducive to a quick solution. The municipal elections are in March and Erdogan has been responsible for (much) of what has happened in IsraeliTurkish relations,” Kushner said.
Albania reaffirms determination to fight crimes
TIRANA - The Albanian Interior Ministry on Sunday reaffirmed the government’s determination in fight against street crime, organized crime and corruption. The ministry issued a statement in response to the opposition Albanian Democratic Party’s accusation that the State Police have failed to bring down the crime rate. The statement noted the completion of an operation by the State Police to dismantle an infamous criminal gang, while criticizing the opposition for trying to “drag the State Police’s reputation through the mud.” Albanian Interior Minister Saimir
Tahiri in December 2013 voiced the government’s commitment to fight against organized crime and corruption. Tahiri said the issue remains one of the key elements in the process of Albania’s bidding for the membership of the European Union.
9 -15 February, 2014
Bosnia to put up for sale Energopetrol stake
Unpaid Bosnian workers clash with police
Bosnian police and several hundred unpaid workers have clashed in the northern city of Tuzla when the protesters tried storming a local government building. Several thousand people, mainly unemployed workers and retirees, marched to the government building of Tuzla Canton, demanding better treatment. The protest turned violent when some protesters began to smash cars on the street, and police intervened, police said. Meanwhile, protesters accused police of overreaction. Six protesters and 12 police were injured, mostly with minor injuries, local newspapers reported. Other reports said at least 17 police officers were injured, two of them seriously. A total of 11 cars were damaged, local media reported, adding that 27 protesters were detained. Most of the protesters are former workers from local companies which went bankrupt. The demonstrators wanted to confront local officials in Tuzla whom they blame for allowing the city’s major state-owned companies to go bankrupt between 2000 and 2008 after being privatised. SERBIA|DIPLOMACY
The government of Bosnia’s Muslim-Croat Federation will offer for sale its 22.12% stake in local fuel retailer Energopetrol in a bourse auction this week for an initial 8.3 million marka (€4.2 million), the entity’s privatisation agency said on 5 February, SeeNews reported. The state-owned stake, comprising of Energopetrol’s 1,215,111 shares, will be put up for sale on the Sarajevo Stock Exchange on 12 February at starting price of 6.8 marka per share, the entity’s privatisation agency said in a statement on its website. Energopetrol’s capital is divided into 5,492,922 shares. The Muslim-Croat Federation is one of the two autonomous entities that form Bosnia and Herzegovina. The other is the Serb Republic. SERBIA|ENERGY
Serbian utility EPS to set up unit in Slovenia
Bosnian police in central Sarajevo. Bosnian police and several hundred unpaid workers have clashed in the northern city of Tuzla. EPA/FEHIM DEMIR/FILE PICTURE
Hospital official Adis Nisic told reporters most of the injuries from the clashes on 5 February were from being hit by stones. The four former state-owned companies, which included furniture and washing powder factories, employed most of the population in Bosnia’s number three city. They were sold to private owners and the contracts obliged them to invest
in and make them profitable. But the owners sold the assets, stopped paying workers and filed for bankruptcy. “This is the start of the Bosnian spring,” protester Sakib Kopic told Bosnian state radio, alluding to the wave of popular protests that shook the Arab world from 2011. “No political party is behind this protest, just the people.” At 27.5%, Bosnia’s unemployment rate is the highest in the Balkans.
On 4 February, Serbian state-owned power utility EPS said its supervisory board has approved plans to set up a unit in Slovenia in a bid to strengthen the company’s position on the regional electricity market. EPS said in a statement the planned launch of the EPS Trgovanje unit will give it a toehold on the market of an EU member state, enabling it to trade with electricity within the bloc and added that it first plans to start direct trading on the Hungarian power exchange. EPS Trgovanje will be incorporated after the move is approved by the Serbian government. SERBIA|ENERGY
Kosovo, Serbia favour improving relations
On 2 February, Serbian Prime Minister Ivica Dacic and Kosovo’s Prime Minister Hashim Thaci expressed gratitude at the Munich Security Conference to EU foreign-policy chief Catherine Ashton for leading the peace-making negotiations, saying the process of normalising relations between Belgrade and Pristina has benefited both sides, news agencies reported. Dacic and Thaci also agreed they were in favor of building a new highway between Kosovo and Belgrade and suggested the EU fund the project. The three-day Munich Security Conference, which gathers global political leaders and defense officials, ended on 2 February. Meanwhile, Dacic said he will take part in the UN Security Council (UNSC) session concerning Kosovo-Metohija on 10 February. Addressing a news conference, Dacic said that Thaci would also attend the UNSC session and added that the Belgrade-Pristina dialogue in Brussels would be resumed two days later, on 12 February. The UNSCE session in New York will cover the regular quarterly report of UN Secretary General Ban Ki-moon. The previous UNSC session on Ko-
Morava TPP to undergo overhaul in 2015
sovo was held on 19 November 2013. In his report, the secretary general pointed to the importance of the success of local elections, especially in northern Kosovo which is home to Serb majority population. Ban said that this will affect the consolidation of peace and stability in the area, as well as the aspirations of Serbia and Kosovo concerning European integration. Ban said that both Belgrade and Pristina demonstrated more intense commitment to prevention of tensions in the field so as to secure the continuation of the dialogue and implementation of the agreements reached so far.
Serbian Energy Minister Zorana Mihajlovic said that the 125 megawatt (MW) Morava thermal power plant (TPP) will undergo a €20 million overhaul in 2015, SeeNews reported. Adding a new unit to the TPP by 2013 is under consideration, a statement issued by the energy ministry quoted Mihajlovic as saying during a visit to the power station to mark the 45th anniversary of its launch into operation. TPP Morava is part of the TENT thermal power complex with total installed capacity of 3,288 MW. TENT is part of the state-owned utility group EPS. MONTENEGRO|TRANSPORT
Bar-Boljare high-way construction contract inked
Minister presents reports on racial discrimination
On 5 February, Montenegro’s Minister for Human and Minority Rights Suad Numanovic presented in Geneva the Second and the Third Reports on the Implementation of the Convention on the Elimination of All Forms of Racial Discrimination in Montenegro, the country’s government said in a press release. The reports have been made in line with the United Nations’ general guidelines, with an emphasis on the recommendations from the UN Committee on the Elimination of Racial Discrimination (CERD) with respect to the 2009 initial report. In his opening remark, Numanovic referred to Montenegro’s efforts related to anti-discrimination and respect for human
rights, stressing the concrete results and progress in developing and creating a stable regulatory and institutional system for safeguarding and promoting human rights and freedoms. Members of the CERD, who took part in the discussion, commended the significant progress Montenegro made in the period between the two reports.
On 1 February, representatives of the government of Montenegro and the Chinese CRBC company inked the contract on the project-work, purchase, and installation of equipment and materials for the construction of the Bar-Boljare high-way priority section (SmokvacMateševo), Minister of Transport and Maritime Affairs Ivan Brajovic said. He added that the negotiations, which began on 10 January, ended successfully. Outlining the next steps, he said first comes the negotiations about financing the project with the Exim Bank, than the adoption of a law on the highway, and finally submission of all three documents to the Government and Parliament for the required procedures. Brajovic told reporters that he expects the entire procedure to be completed at the spring session of the Parliament.
ICELAND |NATO NATO fighter jets conducted air defencerelated flying exercises over Iceland last week as part of the country’s Air Meet 2014. Participants include Norway, the Netherlands and the United States - all members of the North Atlantic Treaty Organisation, as well as partner countries Finland and Sweden. NATO Secretary General Anders Fogh Rasmussen, a wellknown Danish politician, said: “This is a further step forward in NATO’s excellent cooperation with Finland and Sweden - the first time that we have flown together over Iceland”.The training exercises include air combat between dissimilar aircraft types, counter-air operations and highvalue airborne asset attack and protection. Some 300 people, including ground crews and fighter controllers, were called to take part.According to the head of the Icelandic Coast Guard, Georg Lárusson, the training is very useful as regards preparation to deal with emergencies such as natural disasters, military threat or search and rescue.
9 -15 February, 2014
Norway’s PM says there is no housing bubble
Is there a housing bubble in Norway? The answer depends on who you ask. If you ask Nobel Prize winner Paul Krugman - America’s celebrity economist, the answer will be a resounding yes. He recently warned of a steep and lasting price increase over a long period of time, and that Norwegian households’ debt is over 200% more than their disposable income. If you ask Norway’s prime minister, however, she will flatly deny the existence of a housing bubble. Erna Solberg was quick to dismiss Krugman. “Very often I experience that foreign economists, for example with an American point of view, have a different frame of reference when they analyze the Norwegian economy,” Solberg told reporters. “Our basis is that as long as employment, job creation and competition can be maintained, the housing market and the individual debt that families have are not in danger.” In response, Krugman says the prime minister’s statement is evidence that there is a bubble. “I had not expected political reactions to this,” he said. “Can you imagine a president or state leader going out in the public to declare that there aren’t any bubbles in the market? That can quickly end in humiliation. When politicians say that everything is ok, that is a sign of a bubble-situation.” NORWAY|ShADOW ECOnOmY
NATO flying high above Iceland
‘Cod sir, ‘undreds of em’
AFP PHOTO / PATRICK BAZ
Norway’s shadow economy continues to grow
A new report drafted by the Norwegian Association of Lawyers with the help of the police and various government agencies warns of mafia-like networks in Norway that are laundering hundreds of billions of Norwegian Krone. In fact, Norway’s underground crime rings are among the worst in Western Europe, amounting to a whopping 420bn krones. This is 14% percent of the country’s gross GDP. “We cannot know what the actual numbers are for the underground economy. That’s the nature of it. The money is hidden,” said Curt A Lier, the president of the lawyers’ association. According to the report, if the underground economy continues to grow over the next decade, its size will be comparable to the size of the country’s oil fund, which is currently the biggest in the world and worth a whopping 5.11 trillion krones ($828.66bn). The report recommends the confiscation of gains from criminal activity. But this is difficult, if not impossible, to track. NORWAY|FOREIGn COnTRACT
India’s Central Bureau of Investigations has launched a high-profile investigation into allegations that one former official and his son accepted a bribe from a Norwegian-based chemical fertiliser company. According to reports in the media, the unnamed official and his son received a $1m gift from Yara International in exchange for their help to facilitate the company’s joint venture with Krishak Bharati Cooperative Limited (an Indian
India digs up Norwegian fertiliser bribe
cooperative that manufactures fertiliser) back in 2007. Sources at the CBI say a preliminary inquiry was launched based on statements from Yara and Norwegian prosecution agency Okokrim. Earlier this year, Norway slapped Yara International with a fine of $48m in the form of a corporate penalty in connection with corrupt dealings in India, Libya and Russia. “Our acknowledgement of guilt and acceptance of a fine reflect that the Okokrim
findings are in line with those of our own investigation. The penalty is severe but we accept it,” Bernt Reitan, Chairman of the Board of Yara International, had said in a statement. Yara had launched its own internal investigation into the allegations in India. In 2012, the company said the evidence suggests that “an unacceptable payment of $1m in 2007 to a consultant in India is documented”. But the Indian cooperative has denied that any of its officials had accepted a bribe from Yara.
Swiss govt tightens tech security over NSA spying
GENEVA — The Swiss government has ordered tighter security for its own computer and telephone systems that could block foreign companies from key technology and communications contracts. The governing Federal Council’s decision Wednesday cited concerns about foreign spies targeting Switzerland. ICELAND |HEALTh National Security Agency leaker Edward Snowden, who worked for the CIA at the U.S. mission to the U.N. in Geneva from 2007 to 2009, has released documents indicating that large American and British IT companies cooperated with those countries’ intelligence services.
SWITZERLAND | NSA Sp YInG
Norwegian firm wins contract for 2D seismic survey in E. Africa
NAIROBI - Norwegian seismic firm, SeaBird, said Monday it has been awarded a contract worth around $16m with an undisclosed client to shoot a 2D seismic survey off East Africa. The shoot, expected to kick off imminently, will be carried out over a stretch of between 16,000 and 20,000 km by a pair of vessels, Northern Explorer and Hawk Explorer, working for up to 100 days each. “Commencement of the Survey is within the next few days, with expected duration of 90-100 days per vessel. The survey has a value of about 16 to $17m,” the firm said in a statement issued in Nairobi. Explorers are focusing on East Africa after a series of gas discoveries by the likes of Anadarko Petroleum, Eni and Statoil have confirmed significant prospectivety in the emerging play. AdTech Ad Because of the fact that the discoveries only happened recently, East Africa region is facing severe shortage of oil and gas talent, forcing oil exploration companies to import workers. It also offers a chance to develop local content that will enable more locals to benefit from the oil and gas sector. (Xinhua)
According to a Swiss government statement, contracts for critical IT infrastructure will “where possible, only be given to companies that act exclusively according to Swiss law, where a majority of the ownership is in Switzerland and which provides all of its services from within Switzerland’s borders.” (AP)
Teen binge drinking not popular in Iceland
Teenage binge drinking in Iceland isn’t cool, according to the findings of a recent survey published in the journal Pediatrics. Only 6% of the adolescents polled reported binge drinking at least once. “Icelandic youth had the lowest rates of binge drinking, whereas youths in the Netherlands, Scotland and Germany had the highest,” said the journal. “Factors that were associated with binge drinking included peer drinking, sensation seeking and rebelliousness, school performance, age and sibling drinking.” According to the lead author, Dr Reiner Hanewinkel, of the Institute for Therapy and Health Research in Keil, Germany: “The drinking cultures in countries like Scotland, Germany and Holland are the same, but in Iceland they are different because people have maybe one or two drinks with a meal. They don’t drink in binges.” The youth in Iceland also do not drink
as much as their peers did 15 years ago. According to the journal, 42% of 15-year-olds reported drinking alcoholic beverages 15 years ago. Today, only 5% reported drinking alcohol. Experts are scheduled to gather in Reykjavik in March to attend a conference about youth. One of the planned discussions is titled: “The Icelandic Model, a method of substance prevention used in Reykjavík for the past 15 years”.
9 -15 February, 2014
Gazprom Transgaz Belarus sets gas delivery record
Verkhovna Rada to work on constitution bill
On 6 February, the parties in Ukraine’s Parliament, the Verkhovna Rada, agreed to try to draft a joint bill on constitutional amendments that could be put to a vote as early as this week, said Speaker Volodymyr Rybak, from President Viktor Yanukovich’s Party of the Regions, news agencies reported. Opposition leaders, backed by protesters in the streets, want a return to a constitution enacted in 2004 that would move substantial powers over the government from the president to parliament - a proposal rejected by Yanukovich and his supporters, who have had a majority in the legislature. Rybak said leaders of the parliamentary groups would meet in committee with himself and representatives of the president with the aim of producing a bill within the next few days. Meanwhile, the European Union’s foreign policy chief Catherine Ashton said on 5 February that the threat of new protest violence in Ukraine is tapering off but the country’s two-month-old political and economic crisis remains far from being resolved. Ashton spoke after meeting with Yanukovych. An uneasy truce between police and protesters has held since late January after the protests erupted into four days of violent clashes. Officials say three people died in the melee, two of them of gunshot wounds. “Although there is a sense that violence is decreasing, there is still great concern about the situation on the ground,” Ashton told reporters. She said 28-nation EU has been discussing financial aid to Ukraine, but dismissed suggestions floated by some opposition leaders that the country deserves something akin to the Marshall Plan, the successful US initiative to rebuild European economies after World War II. The perilous state of Ukraine’s economy, which relies on energy-inefficient heavy industries and gas imports from Russia, is a key issue in the crisis. Ukraine’s reserve funds fell some 25% GEORGIA|EU AFFAIRS
Riot policemen deploy while a few thousand opposition demonstrators march around the so-called “government district,” that includes the parliament, the Cabinet of the ministers and the presidential office in Kiev, 6 February 2014. AFP PHOTO/SERGEI SUPINSKY
over the past year and in December officials said the country would need at least $10 billion in the near future to pay its debts. Ashton met on 4 February with one of the opposition leaders heading the protests against Yanukovych. AP quoted opposition leader Arseniy Yatsenyuk as saying that that no specifics of Western aid were put forth by Ashton in their talks. He also charged that Ukraine’s president was “targeting ways how to buy time and drag us into never-ending talks and discussions”. The Ukrainian currency, the hryvna, has fallen some 7% since the protests began in late November and some Ukrainians think Yanukovych sees the drop as working in his favor. “Yanukovych thinks that the collapse of the hryvna is scaring Ukrainians and they will stop the protests. But the collapse of the economy will only speed up the exit of these talentless authorities,” said Oleg Ternovskiy, a small businessman in Kiev. In late November, Yanukovych backed off from an expected agreement to deepen economic relations with the EU, fearing that the bloc was not offering
an adequate cushion for the trade that could be lost with Russia, which wanted Ukraine to join a Moscow-led customs union. Yanukovych subsequently obtained a $15 billion aid package from Russian President Vladimir Putin, including getting lower gas prices from Russia. The turn toward Moscow angered those who resent the long shadow that Russia casts on Ukraine. The protests began on that note but have since morphed into demands for more human rights, less corruption, Yanukovych’s resignation and a new election. EU officials have indicated that aid to Ukraine could be sweetened but no specifics have been offered. The West likely would seek a resolution of Ukraine’s political crisis before offering more aid. No resolution is in sight, however. Prime Minister Mykola Azarov resigned two weeks ago so the cabinet is operating only as a placeholder. The leader of his party’s faction, Olexander Efremov, said on 5 February that he expected a new premier to be nominated next week. Yanukovych offered the premiership to Yatsenyuk, who turned it down.
The daily delivery of natural gas to customers in Belarus by Gazprom Transgaz Belarus has set a new record — 102 million cubic metres per day, the company’s public relations and mass media communications office said, BelTA reported. The record was set on 30 January. The same day witnessed a record high collection of natural gas from underground gas storage facilities — over 17 million cubic metres, including 10 million cubic metres from the modernized underground gas storage facility in Mozyr. Gazprom Transgaz Belarus underlined that those are absolute records over the 50 years of history of the Belarusian gas transportation system. The considerable increase in natural gas consumption in Russia, Belarus, and other countries is attributed to the long frosty days in January. The smooth operation of all the daughter enterprises of Gazprom in the extraction, processing, and transportation of natural gas kept Belarusian consumers well supplied with natural gas, said the source. In Belarus the gas transportation system of Gazprom Transgaz Belarus includes 7,950 kilometres of trunk pipelines and gas pipeline branches, five line gas-compressor station, 232 gas distribution stations, seven gas-measuring stations, and 26 automobile gas refueling compressor stations. The gas transportation system also includes three underground gas storage facilities: the Osipovichskoye one and the Pribugskoye one that use water-supplying structures and the Mozyrskoye one that uses rock salt deposits. The trunk pipelines, which are located in Belarus, are used to deliver Russian natural gas to Russia’s Kaliningrad Oblast, to Lithuania, Ukraine, and Poland. BELARUS|CUSTOMS UNION
Justice Ministry drafts Eurasian Economic Union Treaty
Preparing the draft treaty on establishing the Eurasian Economic Union is one of the priorities in the work of the Belarusian Justice Ministry in early 2014, Belarusian Justice Minister Oleg Slizhevsky told media on 5 February. “For now, it will be one of the main areas that we are going to work on in early 2014,” he said. “The preparation of the document is rather vigorous. Among other things debates with our colleagues from Russia and Kazakhstan are very vigorous. Naturally every side has its own opinion. Discussions held at various levels are supposed to produce a compromise, optimal formulas that will satisfy the three sides,” Slizhevsk said. ARMENIA|ECONOMY
Minister sees no sharp inflation after Customs Union
Georgia closer to EU Association Agreement
On 4 February, European Council President Herman van Rompuy said signing an Association Agreement with Georgia in 2014 was at the top of his agenda. Van Rompuy met on 4 February with Georgian Prime Minister Irakli Garibashvili in Brussels. Van Rompuy said the bilateral relationship with the government of Georgia is strong and the meeting was emblematic of a “very broad and deep relationship”. Georgian President Giorgi Margvelashvili vowed to move Georgia closer to the EU when he took office last year. Both sides endorsed an association agreement during a European summit held in November in Lithuania. “One of our main
objectives this year is to sign the association agreement, including the deep and comprehensive free trade area, which we initialed in Vilnius last November,” van Rompuy said in his statement. Garibashvili said in Brussels that Georgia is on track to meet European standards within three to five years.
Armenia will not experience any sharp inflation after it joins the Russian-led Customs Union later this year, Economy Minister Vahram Avanesyan told a Cabinet meeting. A roadmap to such a union was approved by the three countries currently making up the Customs Union and was published by the Armenian government last weekend, local press reported. According to some officials in Moscow, Armenia may finalise its membership in the bloc as early as next May or June. Asked by Prime Minister Tigran Sargsyan to clarify the matter connected with possible changes in the inflation rate, Avanesyan stressed that the media publications speculating on the subject do not correspond to the reality. According to the Ministry’s estimation, the inflation caused by Customs Union membership, which will mean a change of customs dues for a certain group of imported goods, would add up to only 1.5% maximum.
TAJIKISTAN |BAIKONur COSMOdrOME
9 -15 February, 2014
Uzbek president (finally) visits Prague
It has been more than 10 years since a Czech president visited Tashkent. Now, Uzbekistan’s President Islam Karimov is planning to pay a reciprocal visit to Prague on February 21. The invitation was extended by Czech President Milos Zeman. Last week, Zeman, who has been in power since March, received Armenian President Serzh Sargsyan. For Karimov, who recently celebrated 25 years of authoritarian rule, his visit to Prague will be his third visit to a European Union member state. He visited Latvia last year and Brussels in 2011. Uzbekistan’s relations with EU countries soured in 2005 when Karimov’s regime ordered tanks to disperse protestors demonstrating in the city of Andijan. Several hundred protestors were killed. During his two-day visit, Karimov is scheduled to meet with Zeman to discuss visa affairs, Uzbek students at Czech universities and business cooperation. An issue that is not likely to be raised is human rights. "This is of course an example of the new diplomacy where economic interests and money are the most important. And Central Asian states have a lot of money thanks to gas," said Czech lower house foreign affairs committee head Karel Schwarzenberg. According to the latest available figures, Czech exports to Uzbekistan in 2011 totalled $57m, while Uzbekistan exports to the Czech Republic were worth only $10m. Czech firms export mostly tyres, medicines and machinery to Uzbekistan and Uzbek cotton is imported to the Czech Republic. KAZAKHSTAN|ENErGY
Russia, Kazakhstan relations take off at Baikonur
Moscow and Astana may have finally settled a long-running dispute over the use of the Baikonur Cosmodrome - the world’s first and largest space launch facility - located in the desert steppe of Kazakhstan. One year of difficult negotiations has ended with the signing of a roadmap agreement to chart the use of the facility, which was the main space launch site of the former Soviet Union. According to Kazakhstan’s space chief, Talgat Musabayev, who welcomed the roadmap as a “great step”, the negotiations were tough. “This step did not come easily to us, to be frank,” Musabayev told Russian daily Izvestiya. Under the new roadmap, Kazakhstan has limited concessions over jurisdiction at Baikonur, which is leased by Russia for $115m per year under an agreement running until 2050. The dispute between Russia and Kazakhstan escalated last summer when a Russian Proton rocket crashed on takeoff and spilt toxic fuel. The crash resulted in $89m in damage. Under the new agreement, the two countries agreed to modernise the facility’s Zenit system so that one day it can replace Russian Proton launches, which are very controversial because Proton fuel is highly
A Russian Soyuz-U booster carrying an unmanned cargo spacecraft Progress M-22M is transported to a launch pad at the Russian leased Kazakhstan's Baikonur cosmodrome early on February 3, 2012. AFP
Kazakhstan plans to open ‘future energy’ centre
A new centre will be created to study the country’s long-term prospects for energy development, according to Kazakhstan’s Environment and Water Resources Minister Nurlan Kapparov. "One of the options is the establishment of the [centre] on the basis of the Center for Energy Studies, operating under Nazarbayev University and having a finished material and technical base, laboratories, personnel structure, and established mechanism to attract world-renowned scientists," the minister said. Kapparov also said the government is planning to create an interdepartmental working group to develop an action plan for the organisation and financing of the new centre. As traditional sources of energy are already beginning to run out, experts warn that Kazakhstan has to find alternative and renewable energy sources by 2030. A whopping 85% of Kazakhstan's electricity is currently being generated at coalfired power plants and close to 9% of the electricity comes from hydroelectric power plants. KYrGYZSTAN|DEFENcE
toxic. Environmentalists say it can cause acid rain and doctors warn it is linked to cancer. Numerous protests and demonstrations have been organised outside the Baikonur launch pad. Environmental concerns are just one side of the problem. The other is national sovereignty. Under the terms of the lease,
Russia has control over the territory. This means that people living in the town of Baikonur are not subject or protected by Kazakhstan’s laws. Russia, however, has agreed to allow Kazakhstan national curriculum in schools in Baikonur and to establish government services in the town.
Russia to boost fighting potential at its Kyrgyzstan’s airbase
Russia will reportedly continue to supply arms to Kyrgyzstan and to secure the fighting potential of its airbase in the country’s Kant city. “We intend to increase the fighting potential of the Russian airbase in Kant regularly," Russia’s Defence Minister Sergey Shoygu said during negotiations with his Kyrgyz counterpart Taalaybek Omuraliyev. The Russian-leased airbase in Kant is located just 20km outside Kyrgyzstan’s capital Bishkek. It was established in 2003 and currently has 10 Sukhoi fighters, two Mi-8 helicopters, and about a dozen other transport and training airplanes. Under a deal approved by the two countries in 2012, Russia is allowed to continue operating the airbase until 2032 in exchange for Russia writing off some $500m debt owed by Kyrgyzstan.
Tajikistan is one of the world’s least gayfriendly countries, despite the fact that homosexuality is no longer (as of 1998) considered a criminal offence. According a recent report broadcast by Radio Free Europe, most Tajiks treat homosexuality as if it were a mental disorder. In an exclusive interview, Komil said he was only six-years-old when he realised he felt like more like a girl than a boy. Before he knew it, he was undergoing medical treatment intended to cure him of his “disease”. Komil is now 32-year-old and he has never shared his secret with anyone - up to now. "People here think homosexuality is just a treatable illness," he says. "For many years, my parents took me to doctors, faith
Why Tajik gays and lesbians are still locked in the closet
healers, and mullahs. They took me to mosques, where mullahs tried to exorcise evil spirits from my body. They told me a female genie had taken over my body, and that is why I was attracted to men." Desperate for their son to be “normal”, Komil’s parents even arranged for him to be engaged to a woman. She had no idea about this homosexuality. When Komil finally broke off the engagement, his family, including his brothers, stopped talking to him. He had disgraced his family. Komil continues to suffer in silence. He longs for the day he can be himself, but he has come to the conclusion that this day will never come in Tajikistan. Worse still is that he cannot afford to pick up and start a new life in another country. "I understand that I will never be ac-
TAJIKISTAN | HuMAN RIGHTS
cepted in society," Komil says. "I just ask for a bit of space, for a bit of understanding, because I'm also a member of this society and I have nowhere else to go." Komil’s story is not unique. According to Elena Ibrohimova, a Dushanbe-based gay-rights activist, parents pressure their gay children to "fit in," and many try to force them to marry or to seek therapy. There are many psychologists in the country who promise to cure homosexuality. One of them is Zarrina Kenjaeva, who says she has treated gays and lesbians. She says homosexuality can be treated like any other addiction. “We can awaken [gay] men's true, masculine identity through treatment," she says. "It's like treating smoking addicts. Step by step they give up their habit."
The central hospital in Tajikistan’s Baljuvon region will get a new wing thank to a $113,000 grant from Japan, as part of the country’s international humanitarian security programme. The news was officially
Japan to finance new hospital wing in Tajikistan
announced by Japan’s embassy in Tajikistan on February 3. The grant was discussed last week by Japanese Ambassador to Tajikistan Hiroyuki Imahashi and Foteh Aminov, the chairman of the Baljuvon dis-
trict. Japan has assisted Tajikistan on various of humanitarian, social, transport and communications projects in the past. Officials describe Tajik-Japanese relations as being in a stage of development.
9 -15 February, 2014
Sochi Olympics loom large over Russia and Putin
AT&T sets a Sochi example against anti-LGBT Russian policies
Speaking ahead of the Sochi Olympic Games opening ceremony Lousewies van der Laan, Vice President of the ALDE Party said: “the world’s media attention will be on Russia for the next two weeks yet unfortunately the world’s attention is not equally on the ever deteriorating situation of fundamental human rights. Members of sexual minorities have been facing increasing discrimination and violence over the past months.” “European Liberals welcome the news that corporations such as AT&T and prominent public figures such as liberal EU Commissioner Neelie Kroes have publicly taken a stand condemning the anti-LGBT law in Russia, thereby setting a strong example that should be followed by other Olympic sponsors,” he added. In an announcement on 4 February, AT&T noted that “The Olympic Games in Sochi allow us to shine a light on a subject that’s important to all Americans: equality. As you may know, the lesbian, gay, bisexual and transgender (LGBT) community around the world is protesting a Russian antiLGBT law that bans “propaganda of non-traditional sexual relations.” To raise awareness of the issue, the Human Rights Campaign (HRC) has called on International Olympic Committee (IOC) sponsors to take action and stand up for LGBT equality.” “AT&T is not an IOC sponsor, so we did not receive the HRC request. However, we are a long-standing sponsor of the United States Olympic Committee (USOC), we support HRC’s principles and we stand against Russia’s anti-LGBT law.” “AT&T has a long and proud history of support for the LGBT community in the United States and everywhere around the world where we do business. We support LGBT equality globally and we condemn violence, discrimination and harassment targeted against LGBT individuals everywhere. Russia’s law is harmful to LGBT individuals and families, and it’s harmful to a diverse society.” “We celebrate the diversity of all Olympic athletes, their fans, Russian residents and all people the world over – including and, especially, our employees and their loved ones”. “As the games begin, we’re here to support and inspire American athletes who’ve worked hard and sacrificed much to achieve their dreams. We also want to be on record with our support for the LGBT community, and we hope that others involved with the Olympic Games will do the same.” HRC President Chad Griffin issued the following statement: “Today, AT&T courageously recommitted itself to fairness, equality and basic human rights. AT&T should be recognized for showing true leadership in opposing this hateful Russian law, and other sponsors that have failed to lead should take corrective action immediately. A company that claims to support LGBT equality should do so wherever it operates, not just in the United States, and we call on all Olympic Sponsors to follow AT&T’s lead and publicly denounce Russia’s anti-LGBT law.” RUSSIA|ENERGY
A Honour Guardsman marches past the flags during the team welcome ceremony prior to the start of the 2014 Sochi Winter Olympic Games, 6 February 2014. AFP PHOTO/ADRIAN DENNIS
By Kostis Geropoulos With the 2014 Winter Olympics due to begin on 7 February, all eyes are on Sochi. “The Sochi Olympics loom large over the country and the political leadership. Only after the event is completed we will be better able to assess the impact in terms of politics, economics and the foreign perception of Russia,” Chris Weafer, a partner at Macro Advisory, a Moscow-based consultancy, wrote in an e-mailed note to investors. The transformation of the Black Sea resort is the culmination of a years-long effort by Russian President Vladimir Putin, who has bet much of his personal prestige and Russia’s modern image on hosting successful Games at Sochi. At an estimated cost of around $50 billion, it would be the most expensive Olympics ever held. But not much of this huge amount would make an impact on Russia’s GDP growth, an economy heavily dependent on exporting Russia’s abundant energy resources. Natalya Orlova, chief economist at Russia’s Alfa Bank, told New Europe that sentiment-wise hosting the Winter Olympics in Sochi is definitely a favourable event. “However, in terms of the implications for the GDP growth it will very close to zero,” she added. Orlova reminded that all this big project construction is taking place in one reRUSSIA|DIPLOMACY
gion. “In Russia we have eight regions. So the impact on the entire Russian economic growth just by definition cannot be very strong,” she said. Orlova explained that the positive effect on the investments is already incorporated in previous figures and positive impact “can be seen on the regional level of Krasnodar Region but for the entire Russian country I wouldn’t accept any material impact which would accelerate GDP growth from the current level”. Moreover, it’s unlikely that the sport facilities will be efficiently used once the Games are over, Orlova said. But, at the same time, Sochi could become a competitive destination for Russian tourists who so far prefer to spend their rubles abroad. “The fact that the government and state corporations invested a lot in infrastructural projects in Sochi, that is definitely positive. Sochi is attractive tourist city that has developed its infrastructure so potentially – we have very huge Russian tourist flows Russian travelling abroad, about 10 million people a year — the Sochi infrastructure is a way to create a sort of competition between local cities and international cities,” the chief economist at Russia’s Alfa Bank said. But Orlova stressed that the institutional environment and security environment need to be improved to reap long-term benefits. Sochi borders Russia’s
six autonomous North Caucasus republics and there credible terrorism concerns. “If you decide to spend your summer vacation in Turkey or in Sochi, you will compare the price level, you will compare the security level, you will compare a lot of things. I think in the long run we should not expect favourable effect to come from the investments in the Olympic facilities, but to have this effect come just from the infrastructural projects,” she said. Orlova stressed that the Olympic Games attract attention to what’s happening in Russia. For this reason, Russia will definitely try to deliver some positive results, she said. Orlova noted that if this $50 billion infrastructural budget was spent in Moscow, the impact would be stronger because “here we already have critical amounts of big investors, of foreign investors”. However, the Moscow-based economist said she was not surprised that Sochi was chosen as the city to host the 2014 Winter Olympics because this region can be developed to compete against foreign destinations for summer and winter vacation. “It’s a good initiative to develop the tourist industry there and, by the way, this Olympic construction and investments boosted some small companies in the region. But again we are not talking about some revolution at the economic level,” Orlova said.
US ambassador to Russia stepping down
The US ambassador to Russia has announced that he is stepping down after two turbulent years in Moscow, AP reported. Michael McFaul is considered the architect of President Barack Obama’s effort to reset relations with Russia. McFaul points to many successes in US-Russian relations, including the negotiation of a new strategic arms treaty and cooperation on the NATO-led military campaign in Afghanistan. But his tenure also has brought disappointments in the face of the rising anti-Americanism in Russia that accompanied Vladimir Putin’s return to the presidency.
Gazprom Neft sees output from Iraq’s Badra in spring
The ambassador announced his departure in a blog post on 4 February, saying he would leave after the Sochi Winter Olympics. A longtime Stanford University professor, McFaul said he would be returning to California. His wife and two sons had returned home last year.
Gazprom Neft, the oil arm of Russian gas monopoly Gazprom, intends to start commercial oil production in spring at its Badra oilfield in Iraq and hopes for an average output of 15,000 barrels per day in 2014, Reuters quoted Vadim Yakovlev, a first deputy chief executive of Gazprom Neft, as telling reporters on 5 February. Gazprom Neft earlier postponed initial production at Badra due to safety concerns and logistical problems. “We plan to start production in spring ... the target of this year is to reach output of 15,000 barrels per day,” Yakovlev said. Output at Badra has been estimated to reach 170,000 barrels per day of crude oil by 2017.
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