NEWEUROPE19th Year of Publication | Number 1010 | 9 - 15 December, 2012 | € 3.50 www.neurope.eu

The multi-faceted crisis currently rock-ing the countries of Europe and the solu-tions devised by the European institu-tions has, ironically, given a fresh impulseto the debate on "political union": thisphrase is absent from the conclusions ofthe European Council meeting held inJune 2012 but it occasionally presentedas a goal to be achieved in the middleterm. It is more important than ever topush this debate forward on the basis ofseveral key ideas, ahead of the EuropeanCouncil meeting scheduled for 13 and14 December and above all of theEuropean elections in 2014.

The debate raging over the projects for a"budgetary union", an "economic union"and a "banking union" generates very highexpectations the European Council of mid-December should not disappoint. It has the

merit of reminding us that the commonexercise of certain competences is the centralissue which must underpin discussions onthe "political union", which must absolutelybe put into perspective to ensure the settingup of stable and thriving EMU.

To go further, we need to be clear aboutexactly what the expression "politicalunion" covers, because it is understood invery different ways from one Europeancountry to the next, with the result thatthis profusion of different meanings hasbeen fuelling a spate of sterile debates, asindeed it was the case with the expression"economic governance". Thus it needs tobe stressed that political union is already aEuropean reality, incomplete and whichneeds to be deepened, as does the"Federation of Nation States" which theEU is too.

The EU Institutions are at war over poten-tial changes to the copyright system over aspat that handed joint responsibility onlegislating for copyright to Neelie Kroes,the commissioner for the digital agenda.

Kroes, who had previously maintainedthat in the absence of legislation on copy-right reforms by the end of this year, herdepartment would push for legislation.Michel Barnier, whose internal marketportfolio had until now regulated thisarea, has conceded joint responsibility tothe digital agenda portfolio, headed byKroes, and the culture portfolio, headedby Androulla Vassiliou.

The decision puts the commission atodds with the European Parliament,which assumed that previous arrange-ments, whereby the institutions wouldseek arrangements until the end of 2013,and then, in the absence of agreement,seek legislative options, would still hold.

It now looks extremely unlikely thatthere will be any sort of satisfactorymovement on the issue before the 2014elections to the European Parliament.

Swedish MEP, Christian Engström,who has been heavily critical of Barnier’sposition in the past, said that the currentimpasse is effectively ‘waging war’ oninternet users. He told New Europe thatthe EU needs to modernise copyrightrules, and legalise file sharing.

Following a meeting on 5 December,Kroes welcomed the decision to allow herdepartment consultation into the copy-

right issue. She has been a long-standingadvocate of a review of the 2001 copy-right directive so as to facilitate cross-bor-der access to online content, however,Barnier has previously opposed this, argu-ing that it should be the exclusive realm ofthe internal market directorate.

On 7 December, Kroes issued a state-ment outlining her department’s inten-tions. She has claimed that the decision toallow her joint responsibility for copyrightreform will modernise the issue.

While Kroes is holding this decision upto be a victory for her own department,

the bigger issue is one of institutionalinfighting, a top Brussels specialist on thematter told New Europe.

“The decision is first of all a ‘no confi-dence’ vote of the Barroso commissionagainst the European parliament andMartin Schulz”, he said. “The agreedapproach, of seeking contractual arrange-ments with the industry during 2013,and, in the absence of success, legislativeproposals in 2014, in reality will avoidsending a proposal of amendments to thecopyright directive before the next elec-tions to the European Parliament”.

Commission sidelining parliament after ACTA

Eurozone: core of the EU

· Page 3

Copyright clash

ETHICS The World Forum for Ethicsin Business (WFEB) held itsinternational leadership sym-posium on business ethics inthe European Parliament inBrussels... ·Pages 14-15

·Page 4

DALLIGATE The Commission has astrong argument overDalli, a historical prece-dent of an oral resignation,an utmost case of democ-ratic legitimacy... ·Page 24

DEVELOPMENTAccording to the latest statis-tics provided by the UN's Foodand Agriculture Organisationlast October, there are 870 mil-lion people in the world whoare chronically... ·Page 3

WORLDInternational Crisis Grouptook to Twitter to tackleGulnara Karimova overUzbekistan's record on tor-ture and human rights...

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Neelie Kroes (L) and Michel Barnier: power struggle looks set to undermine European Parliament.

Vladimir Putin and Recep TayyipErdogan emphasised their countries’deepening economic ties, signing aseries of bilateral economic agreementsand highlighting Russia’s constructionof Turkey’s first nuclear power plant.

Putin talksTurkey

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Costas Gavras in Brussels

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ARTS &CULTURE

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NE 10 YEARS AGOSo, how long are you staying? | AFP PHOTO GEORGES GOBET

The Shooting Gallery

There was something different a decade ago, there were real hopes that the upcoming summit would be a great suc-cess, taking East and West Europe into the future together. But not Turkey. Former French President, Valery Giscardd'Estaing took time out from drawing up the "Convention on the Future of Europe" to complain that Turkey's entryin the Eu would lead to the end of the union, something that is could be argued that his eventual convention near-ly achieved! Elsewhere, there was another grand alliance forming, between China, India and Russia, who were con-cerned with fighting terrorism, but not entirely unhappy to form a bloc to challenge the single superpower status ofthe United States.

Strange bedfellowsBoris Johnson thinks that the UK should radicallychange its relationship with the European Union. TheMayor of London has said that the country shouldn’tsever its ties with the European single market altogeth-er, but instead renegotiate a relationship based on wider,freer trade. It’s a variation on the old Harold Macmillanpolicy; fill the vacuum left by the collapse of the oldempire by maintaining a position of global commerce.Let Britannia keep ruling the waves.It is no surprise that Johnson, a noted Eurosceptic andleadership threat to Prime Minister David Cameron,should come out against the EU; in the past he hasadvocated holding a referendum on the UK’s member-ship of the Union, posing a straightforward in-outquestion, although now he has modified his positionsomewhat. Instead of a simple one-shot referendum, hehas suggested a renegotiation of the relationshipsbetween the parties, and holding a referendum on that.If it is rejected by the electorate, then is the time for asecond ballot.In his job as Mayor, Johnson is often to be found drum-ming-up business for London in overseas territory. Heis fiercely protective of the city, and maintaining it as afinancial hub. One of the big fears amongstEurosceptics is that regulation from Brussels will causea mass desertion of financial and banking services formthe city. It is one of the favoured battle lines.Unsurprisingly, Johnson, in line with a lot of his rulingConservative Party, plus the entire apparatus of the cen-tre-right United Kingdom Independence Party (UKIP),is increasingly hostile and with Europe, and exhaustedat the perceived stifling of British political and businessprogress by the dreaded forces of European federalism.Britain, on the issue of Europe, is moving rightward.Cameron, wavering between bowing to the public andpleasing his European partners, is seemingly ripe forattack.The opposition Labour Party, essentially pro-Europeanbut who lost votes to UKIP at the last EuropeanParliament elections in 2009, voted against the govern-ment in a recent debate on the EU’s long-term budget.The prime minister and his senior party colleagues, aswell as coalition partners, the Liberal Democrats, reject-ed the notion that the budget should be reduced out-right, arguing instead for a real time freeze in line withinflation. The prime minister suffered a serious blow inthat debate, losing the vote due to a combined force ofopportunistic Labour MPs, and, much more worryingly,53 government backbenchers.The Labour Party may have been acting opportunisti-cally, sensing a weak underbelly, but combined with theconservative rebels, presumably feel they can take downthe prime minister, under pressure as well on press reg-ulation, a topic labour are also chipping away atCameron.It is plain that Cameron’s enemies, both inside and out-side the party, are hoping to heap humiliation upon thePM at a time when, on the surface at least, he seemsvulnerable. But assuming the pressure gets too muchand the scalp is taken, then who fills the void, and willthe opposition be proud of their part in the demise?

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ISSN number: 1106-8299

02NEW EUROPE9 - 15 December, 2012 ANALYSIS

03NEW EUROPE9 - 15 December, 2012

ANALYSIS

This week I had the pleasure to open the con-ference 'Combating Malnutrition: An All-Stakeholders Breakthrough Summit' organisedin Brussels by the Public Advice InternationalFoundation in cooperation with the CyprusEU Presidency

The problem of malnutrition prevents men,women and children from meeting their mostbasic needs. According to the latest statisticsprovided by the UN's Food and AgricultureOrganisation last October, there are 870 mil-lion people in the world who are chronicallyundernourished. This is by all accounts unac-ceptable.

As a politician, what makes the prevalence ofunder-nutrition all the more appalling is thatthis problem has, at its core, a deeply politicalcause. No-one has put this across more force-fully than the Nobel Economics Price winnerAmartya Sen. On his now classic study 'Povertyand Famines' (1981), he noted that famines aremost often not a direct consequence of therebeing not enough food for everyone, but ratherof some people not being able to access foodbecause of their lack of entitlements to thisfood. Ultimately, any political system that al-lows this lack of entitlements to continue mustbear some responsibility.

In an increasingly globalised world, this is aglobal entitlement problem: whereas markets,including those for basic foodstuffs, have goneglobal, the right to sufficient food, and its en-forcement, has not done so. This lack of en-forcement is often linked to other problemssuch as violent conflict or state fragility. The re-

cent crises in Somalia - where famine was de-clared in 2011 - and in the Sahel, which thisyear has faced an important food crisis, exem-plify this.

Before Christmas break I will be in Khar-toum, Sudan, to meet representatives of the Su-danese Parliament in order to stress my supportand my will to relaunch a concrete debate onthis important issue, combating malnutrition,at European level. Sudan, Somalia or the Sahelarea, are just some example of countries wherepeople seem "abandoned" to their destiny. We

have to thank the several NGOs, as Emergencyfounded by Gino Strada, which are operatingin this difficult situations with few financial re-sources but with a very big and positive impacton the population.

The international community is respondingto the emergencies but it's not enough. TheEuropean Union have provided over €1 billionin humanitarian aid since 2011. Nonetheless,international partners should remain engagedwith these situations and seek to address thebroader elements that allowed these crises to

appear in the first place. The central case for combating malnutrition

and its consequences is a political and moralone. But there is also an important economicargument to be made. Now that everyone isconcerned with austerity and 'doing more withless', it is difficult to think of a more cost-effec-tive intervention than combating malnutrition.Some studies have shown that, in general, aidcreates an economic return to recipient coun-tries and to donors. When aid is furthermoredirected towards combating malnutritionamong children it can unlock a huge potential.

Ending hunger and malnutrition is a moraland political imperative. And one that will, fur-thermore, become more pressing in comingyears due to increasing food prices, populationpressures and the impact of climate change onfood production.

The 2008-2009 food crisis was a strong wakeup call for political leaders of the need to takethis matter seriously. The current increase in theprice of some foodstuffs - notably wheat -serves as a reminder that this remains a press-ing matter. I'm convinced the EU must remainengaged and become a global leader in com-bating malnutrition through development aidand a wider range of policies.

This task cannot be undertaken by a singleactor. Much can be achieved through the col-laboration of all of us working with a single ob-jective but bringing onboard different assets,skills and perspectives. European Union shouldbe the guide to this approach.

Gianni Pittella MEP, first vice president of theEuropean Parliament

HUMANITARIAN AID

Fighting malnutrition is a moral and political duty

By Gianni Pittella MEP

United Nations-African Union Mission in Darfur (UNAMID) staff member of the Teaching Hospital in El-Geneina

in West Darfur preparing a vaccine against yellow fever.

The European Parliament has been given ablow by the commission over the decision tohand over co-responsibility for reform ofcopyright laws to Neelie Kroes.According to insiders, this is a case of thecommission delaying movement on the issueover fears that the parliament, which hasbeen pushing for a definitive change to copy-right reform before the 2014, will scupperongoing reform plans.The commission is worried of a repeat of theparliament’s objections to the Anti-Coun-terfeiting Trade Agreement (ACTA), whichundid the proposed laws in June this year.The Swedish MEP, Christain Engstrom,told New Europe that the EU needs tospeed-up copyright reform, the failure ofwhich is effectively discriminating againstinternet users.“Europe needs to modernise copyright leg-islation in the digital era, and legalise filesharing. It makes no sense to wage a waragainst the entire young generation”, he said.“If this is a move towards a more sensible

policy, it is a good thing. But the Europeanparliament needs to be involved in allstages of the procedure. Copyright reformis an issue that citizens care about, and itmust be decided in a democratically trans-parent way, not by stakeholders behindclosed doors”.A reliable Brussels source told New Europethat the decision to effectively stall things isdown to the fear that the European Parlia-ment has previously scuppered progress onACTA. “Following what happened withACTA, letting the parliament meddle withthe copyright discussion is a nightmare thatthe industry, clearly on the defensive, wants toavoid at all costs”, he told New Europe. Theparliament, he said, “can know say thank youto Barroso and Barnier” for the delay in pro-ceedings.Kroes, who had previously maintained thatin the absence of legislation on copyright re-forms by the end of this year, her departmentwould push for legislation. Michel Barnier,whose internal market portfolio had until

now regulated this area, has conceded jointresponsibility to the digital agenda portfolio,headed by Kroes, and the culture portfolio,headed by Androulla Vassiliou.The decision puts the commission at oddswith the European Parliament, which as-sumed that previous arrangements, wherebythe institutions would seek arrangementsuntil the end of 2013, and then, in the ab-sence of agreement, seek legislative options,would still hold.It now looks extremely unlikely that therewill be any sort of satisfactory movement onthe issue before the 2014 elections to the Eu-ropean Parliament.Following a meeting on 5 December, Kroeswelcomed the decision to allow her depart-ment consultation into the copyright issue.She said that with her input, Europe canmodernise current copyright legislation inthe digital era.The Dutch commissioner has been a long-standing advocate of a review of the 2001copyright directive so as to facilitate cross-

border access to online content, however,Barnier has previously opposed this, arguingthat it should be the exclusive realm of theinternal market directorate.On 7 December, Kroes issued a statement onher website outlining her department’s in-tentions. She has claimed that the decisionto allow her joint responsibility for copyrightreform will modernise the issue.While Kroes is holding this decision up to bea victory for her own department, the biggerissue is one of institutional infighting, NewEurope’s Brussels sources said.“The decision is first of all a ‘no confidence’vote of the Barroso commission against theEuropean parliament and Martin Schulz”,he said. “The agreed approach, of seekingcontractual arrangements with the industryduring 2013, and, in the absence of success,legislative proposals in 2014, in reality willavoid sending a proposal of amendmentsto the copyright directive before the nextelections to the European Parliament”.

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COPYRIGHT

EU institutions in spat over copyright

The multi-faceted crisis currently rocking thecountries of Europe and the solutions devisedby the European institutions has, ironically,given a fresh impulse to the debate on "politi-cal union": this phrase is absent from the con-clusions of the European Council meeting heldin June 2012 but it occasionally presented as agoal to be achieved in the middle term. It ismore important than ever to push this debateforward on the basis of several key ideas, aheadof the European Council meeting scheduledfor 13 and 14 December and above all of theEuropean elections in 2014.

1. Political union, a partial reality and an in-dispensable perspective

The debate raging over the projects for a "bud-getary union", an "economic union" and a "bank-ing union" generates very high expectations theEuropean Council of mid-December should notdisappoint. It has the merit of reminding us thatthe common exercise of certain competences isthe central issue which must underpin discussionson the "political union", which must absolutely beput into perspective to ensure the setting up of astable and thriving EMU.

To go further, we need to be clear about ex-actly what the expression "political union"covers, because it is understood in very dif-ferent ways from one European country tothe next, with the result that this profusion ofdifferent meanings has been fuelling a spateof sterile debates, as indeed it was the casewith the expression "economic governance".Thus it needs to be stressed that politicalunion is already a European reality, incom-plete and which needs to be deepened, as doesthe "Federation of Nation States" which theEU is too.

This "European political union" is indeedbased on three factors: the EU member stateshave decided to exercise certain responsibilitiestogether, and to this end they have set up com-mon institutions, acting under the citizens' su-pervision.

Such a political union faces a crucial dead-line in June 2014, with elections that will notonly be electing new MEPs for the Europeanparliament but will also have to ensure that thePresident of the new Commission is designatedin a more democratic manner. In this perspec-tive, the political parties need to start identify-ing their candidates and preparing theirEuropean agendas and platforms ahead ofthese elections. It is by reference to such anevent that all supporters of a more efficient andmore legitimate European integration must bemobilised.

2. Combining efficiency and legitimacythrough "differentiation"

The euro zone crisis has already fostered acertain amount of often belated (yet nonethe-less welcome) progress of European integra-tion on the basis of a joint strengthening ofthe solidarity and supervision exercised by theEU: the approval of the "European StabilityMechanism" and the adoption of the "FiscalCompact" are the most notable instances ofthat progress at this stage. All EU countriesdo not take part to this progress but thosewilling to were able to be involved, withoutbeing hindered.

But above and beyond the present crisis, it isa matter of organising better our "unity in di-versity" in order to allow the European peopleto respond together to a good many of the in-ternal and external challenges they currentlyface.

In each instance, setting up mechanisms al-lowing for a sharing of the exercise of sover-eignty that is at once both effective andlegitimate, to the benefit of the EU's memberstates and of its citizens should be the objective.An improvement in "functional federalism" al-ready operating within the EU is the most re-liable way of achieving this (as opposed to thenotion of a "federal leap").

The drive to combine efficiency and legiti-macy must also lead to move to "differentia-tion" within the EU, as in the past (for instancein connection with Schengen and with theeuro) and as the recent crisis impels us. TheEMU should then be implemented throughthe enhanced cooperation procedure, i.e on thebasis of the current treaties, so as to ensure ef-fective dovetailing with the functioning of theEU27.

3. The euro zone, centre of gravity of Euro-pean integration

The current crisis has clearly, and sometimespainfully, confirmed the economic, financialand political interdependence of euro zonemember states and citizens, prompting them toact in order to safeguard and to strengthen it. Itreminded us that belonging to the euro zone isbased on specific rights and duties as far as dis-

cipline and solidarity are concerned. It also un-derlined the flaws due to the imbalance be-tween monetary union and economic union,and it must now lead to firmly address the con-sequences and causes of such an imbalance.

This crisis made the euro zone appear likethe natural core of an increased integration,which must be based on parallel continuing actsof solidarity and control: the creation of a Eu-ropean supervision of banks under the aegis ofthe ECB, and extension of the rescue funds tobanks; a partial mutualisation of the issue of theeuro zone member countries' debt (via "Euro-bills" or "Eurobonds") and a further strength-ening of the Commission’s powers of controland sanction; an improvement of European co-ordination of economic and social policies inorder to curb the excesses and abuses thatthreaten the proper functioning of the mone-tary union, through financial incentives offeredto member states within a contractual frame-work; the creation of a "cyclical adjustmentfund" playing the role of an insurance policyamong the members countries…

On the institutional level, "euro zone sum-mits" are already held to adopt the broad guide-lines for the euro zone to follow and to reachdecisions in times of crisis. The Commissionmust play its role to the full in defining thesebroad guidelines and in exercising all of thepowers conferred on it by the treaties. The Eu-ropean Parliament must remain a crucial playerin the adoption of the European legislative andbudgetary decisions. In the spirit of article 13of the "Fiscal Compact", cooperation betweennational parliamentarians from euro zonecountries and European parliamentarians mustat last ensure a more open political dialogue andreinforce democratic oversight for the eurozone executive entities. National parliamentsmust be assigned a more important role in themain budgetary decisions of the euro zonewhen such decisions have an impact on na-tional budgets or when they concern a newbudget for the zone.

A further integration of the euro zone, opento all European willing countries, must natu-rally go hand in hand with the launching of ini-tiatives involving all EU countries. For example,within the single market, necessary efforts for afurther social and fiscal harmonisation are re-quired; it is within the EU27 that we must setin the project of a "European energy commu-nity" that we promote; or that we must en-courage common actions related to foreign andsecurity policies, on the basis of the proposalsof the "Westerwelle report".

It is by combining this double perspective –euro zone and EU – that EU countries will bestbe able to better deepen their action in all fieldsof common interest and so deepen the "Euro-pean political union".

* The European Steering Committee (ESC)brings together high-profile European figures todiscuss subjects of fundamental importance to thefuture of the EU. It has a role in orienting the workof Notre Europe – Jacques Delors Institute and pro-poses ways forward for European integration. Thecomplete list of the signatories is available:www.notre-europe.eu

ECONOMY

The euro zone, core of a political unionBy Jacques Delors

04NEW EUROPE9 - 15 December, 2012

ANALYSIS

Former Commission President Jacques Delors

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Germany balancesbudget

Adolescents cannot be blamed for thepolicies of autocrats. So why did 15-year-old Manouchehr Esmaili-Liousihave to die because the West wants topunish Iran's leaders?

Manouchehr lost his life when nomedicine could be found to treathaemophilia. Iran used to importdrugs for this disease but has been un-able to recently because it is subject toa trade embargo.

This young boy may be the first vic-tim of sanctions imposed on Iran byAmerica and the European Union. Heis unlikely to be the last. In November,The New York Times - not a journalrenowned for decrying US imperialism- reported that Herceptin, a cancermedicine, had "disappeared" fromTehran's hospitals and pharmacies.Theoretically, humanitarian supplies arenot covered by the sanctions. In prac-tice, the ban on financial transactionswith Iran is so comprehensive that it hasaffected supplies of essential drugs.

The death of Manouchehr serves asa depressing reminder of what hap-pened in neighbouring Iraq. Deniedequipment, medicine and even blood,Iraqi doctors struggled and oftenfailed to provide the most rudimentaryof care to their patients. UNICEF es-timated that 600,000 children diedover a decade as a result of sanctions.

According to the official narrative,everything was Saddam Hussein's fault.Saddam was blamed for the sanctionsagainst his country because he would-n't allow scrutiny of the nuclear andchemical bombs he was suspected tohave been developing. Eventually,America invaded Iraq based on a packof lies. Saddam had no weapons of massdestruction. And he had nothing to dowith the atrocities committed on 11September 2001.

Iran has replaced Iraq as the bogey-man we are supposed to fear most. InOctober this year, the EU's foreignministers agreed to extend the scopeof their sanctions on Iran, citing"deepening concerns" over the coun-try's nuclear programme. The sanc-tions were "not aimed at the Iranianpeople," we were told.

If that assurance was genuine (and Idon't believe it was), then our govern-ments must immediately lift the em-bargo. In 2004, EU officials drew upguidelines for the use of sanctions as atool "to maintain and restore interna-tional peace and security". Theseguidelines state that sanctions shouldbe carefully targeted so that any "ad-verse humanitarian effects or unin-tended consequences" can be avoided

"to the maximum extent possible". The EU's sanctions against Iran run

counter to those principles. Ratherthan being focused on the Tehran au-thorities, they prohibit all dealings be-tween European and Iranian banks,except under "strict conditions". Thisamounts to economic warfare.

Why has Iran been singled out inthis way? The International AtomicEnergy Agency (IAEA) recently re-ported that Iran was not providing itwith the "necessary cooperation" todetermine whether or not the coun-try's nuclear programme has "militarydimensions". That is worrying. But itis hardly poses a greater threat toworld peace than what Australia hasdone this year. Julia Gillard, the Aus-tralian prime minister, has clinched adeal with India to supply it with ura-nium. Whereas Iran has signed thenuclear Non-Proliferation Treaty,India and its enemy-next-door Pak-istan have refused to.

Did the EU introduce sanctionsagainst Australia for giving the keyraw material required for nuclearweapons to India? Did it denouncethe Canberra elite for helping to exac-erbate tensions in South Asia? I'vechecked all of the statements that themain EU institutions issued aboutAustralia over the past twelve months.Not one of them was critical ofGillard's reckless behaviour.

There is much that the EU could doabout nuclear proliferation at home.The NPT requires signatories thathave nuclear weapons to get rid ofthem. Britain and France have ratifiedthe treaty but, the last time I looked,both of them still had nuclearweapons. With the Labour Party stillin power, Britain's House of Com-mons voted in 2007 to renew its Tri-

dent nuclear submarine programme.David Cameron has indicated that heremains committed to that objectiveand that a decision will be made onthe matter in 2016. It follows thatCameron is way more dangerous thanMahmoud Ahmadenijad. Yet I haven'tseen any EU countries threateningBritain with sanctions over its endur-ing love affairs with nukes.

If the Union was serious and consis-tent about tackling the radioactivemenace, it would be overseeing disar-mament within its own borders. Thatwould put it in a strong moral positionto advocate the establishment of a nu-clear-free zone in the Middle East.There is one major obstacle to givingthe Middle East this status. It is Israel,another NPT rejectionist. Declassi-fied documents show that the US hasknown that Israel possessed nuclearweapons since at least 1975. In 1999,the US Defence Intelligence Agencyestimated that Israel possessed be-tween 60 and 80 nuclear weapons.Others believe it has more. YetWilliam Hague, the British foreignsecretary, has stated in recent days thatthere is no appetite among theUnion's governments to penalise Is-rael. He was speaking about Israel'songoing colonisation of the WestBank. The same double standardsapply to nuclear weapons.

The most plausible explanation forwhy Iran is being harried is that it re-fuses to act as the West's doormat. In1953, Mohammad Mossadegh's gov-ernment was overthrown as it had theaudacity to suggest that Iran's oil re-sources didn't belong to Westernfirms. Europe and the US are hopingfor another regime change today. Tobring it about, they are robbing pillsfrom cancer wards.

POLITICS

Is Europe starving Iran of vital medicines?

The German Federal Finance Ministry have announcedthey will have a balanced budget for this year, two yearsbefore this was originally forecast. In a statement the ministry said that budget stabilityhad been achieved due to tax revenues being better thanexpected at federal, regional and municipal levels, andlower financing costs due to historically low interestrates. Only a few months ago Berlin had announced that itwas projecting a deficit ratio of 0.5% for this year, whichwould have been an improvement on the 0.8% deficitfor 2011. There was even more good news for German financesas over the next two years a modest surplus of 0.5% hasbeen projected, before coming down to zero in 2015 and2016. If these figures prove prescient, then they will bein line with one of the European Fiscal Treaty’s mostpivotal rules of putting a cap on a nation state’s struc-tural deficit of 0.5% of GDP. Also relating to Europe the figures will be even morepleasing as there has been an estimated €10 billion inspending on new financial regulations from Brussels,including the European Stability Mechanism and thesteps forward to increase the capital of the EuropeanInvestment Bank. A spokesperson for the finance ministry said: “This hashappened because of the much higher than expected taxrevenues at the regional level, we also have virtually fullemployment that helps us achieve a balanced budgetwithin our socials security system as we are not payingout on benefits, so we also have lower government ex-penditure as part of the equation.” “The tax revenues coming through did not make these fig-ures a huge surprise to us and previous projections are some-thing that we forecast and this is not an exact science.Growth may have slowed down this year, but the budget hasbeen balanced also on last year’s performance.” For the third quarter this year according to the GermanNational Statistical Office, the economy was growingat 0.2% but this was 0.3% down from the first quarterof this year. Unemployment is currently at 5.4% say figures fromEurostat again for the third quarter of this year, almosthalf the EU average from all of the 27 states, highlight-ing what the budget has been balanced earlier thanwhat was originally expected. “What we are seeing the fruition of structural reforms overthe past decade not that any austerity plan has worked inthe German economy’s favour. This has increased our com-petitiveness that as we can see has given us a healthy labourmarket position, the results of this are higher tax revenuesand more in social contributions.” Explained MatthiasSchaefer head of the Economic Policy Team for the Kon-rad-Adenauer-Stiftung think tank. “The is a kind of message to the rest of the Euro Zone coun-tries that financial stability is achievable if you implementthe reforms necessary, you can fulfil this kind of balance andit does not only have to happen in Germany.” With federal elections set for next year, the latest fig-ures will be a boost to Angela Merkel’s re-election cam-paign as she attempts to hold her ruling coalitiontogether, most recent polls make her firm favourite toremain in power for the third consecutive election. “Of course this is good news for her and the economy willbe the most pivotal issue for Germans when they cast theirvote, although you never know what can happen over thenext ten months.” Schaefer added. “The stability of the EuroZone will also be a major factor from the German perspec-tive, and whether Europe can deliver a sensible budget.”

By Peter Taberner

06NEW EUROPE9 - 15 December, 2012

ANALYSIS

Iranian President Mahmoud Ahmadinejad wants more medication.

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By David Cronin

07NEW EUROPE9 - 15 December, 2012

Greece is in a deep and protracted eco-nomic recession. Austerity measures arehitting researchers in the country hard intheir pockets. The economy shrank 18.4%in the past four years and the IMF fore-casts it will contract another 4% in 2013as Athens struggles to reduce debt in ex-change for billions of loans.

Athens got a €110 billion bailout in2010 from eurozone members and theIMF to rescue its embattled economy. Anew € 130 billion bailout was approvedthis year. In return for the loans, Greece ismaking major austerity cuts which haveconsequences also for R&D in the coun-try. Wages in the public sector, where a lotof scientists are employed, were reducedby 20%. More than a hundred thousandpublic sector jobs shall be cut, through ahiring freeze and abolition of all tempo-rary contracts. Public funding for univer-sities and research institutes was cut up to50%. Hiring of new staff has mostlystopped and the appointment of newlyelected academic staff is delayed.

The country has requested internationalresearch organisations like ESA to tem-porarily reduce its annual contributionfrom €14 million to €8 million for 2012,and it is under negotiations with CERNfor a similar reduction.

But while Greece received billions ofhelp from the Troika (EC, ECB, IMF)overseeing its bailout, a little money isgoing to the Greek government to pay forimportant public services. Instead, most ofit is flowing directly back in the lenderspockets. The bailout that was supposed tohelp Greece is mainly servicing the inter-est on the country’s debt. Meanwhile, theGreek economy continues to decline, andtogether with it country’s R&D.

The high unemployment which reacheda rate of 25.1% this year, is leading to afurther challenge. The country loses in-creasing numbers of their best and bright-est to top universities and careers outsidethe country.

Thousands of highly educated workersare fleeing Greece as the crisis batterstheir homeland.

Successful academics and scientists areleaving for better pay and work condi-tions. Some have even gone without a joboffer, usually to places such as US, Aus-tralia, Canada or Germany. The most de-structive brain drain is of the young. Since2008, ever more young people have gone,often to foreign universities.

Nevertheless, Hellenic research infra-structure could be sustained by the EUStructural Funds and the EU’s SeventhFramework Programme for Research(FP7). For Greece there is €1 billion ear-marked for R&D from the country's2007–2013 EU Structural Funds. Thechallenge is to absorb these funds and usethem efficiently

According to the Innovation UnionCompetitiveness Report 2011 of the Eu-ropean Commission, R&D in Greece re-mained stagnant at 0.58 % of GDP in thelast decade. The stagnation is due to thefact that the already limited private in-vestments in R&D further decreased. TheEU average expenditure is 2.01%. Of theEU27, only Bulgaria (0.45%), Cyprus(0.44 %) and Romania (0.52%) invest lessin their R&D.

Another important issue for the lowR&D performance is the inflexible re-search and university system in Greece.Conditions within the country are notcompatible with researchers' aspirationsfor a fulfilling scientific career. There isluck of mechanisms to reward researchand multiply its impact. There is notenough competition and evaluation ofperformance.

However, Greek research is of a gooddegree of quality and shows a considerableachievement. The country is well placedregarding scientific production, reachingclose to the average EU figures: 438 co-publications per million inhabitantsagainst 491 for the EU average.

Several internationally competitive re-search institutes have managed to flourishdespite low government investment.Greek scientists have also been very suc-cessful in winning funding from the Eu-ropean Commission's SeventhFramework Programme (FP7) of research.

As of March 2011, a total of 8.157 eli-

gible proposals were submitted in re-sponse to 248 FP7 calls for proposals, in-volving 12.177 applicants from Greece(4.57% of EU-27) and requesting€3.798,98 million of EC contribution(4.30% of EU-27)

Greece participates in 1.205 signedgrant agreements, involving 14.476 par-ticipants of which 1.769 (12.22%) arefrom Greece benefiting from a total of€3.950,69 million of EC financial contri-bution of which € 481,91 million(12.20%) is dedicated to participants fromGreece.

There are also some encouraging initia-tives like for example the cooperationwith China. The General Secretariat forResearch and Technology (www.gsrt.gr)has launched in February 2012 the firstcall with a budget of €6 million for a bi-lateral R&D programme supporting col-laborative research between Greek andChinese companies.

Corallia (www.corallia.org) is a public-private partnership project meant to boostcompetitiveness, entrepreneurship and in-novation through cluster-developmentsupport activities.

ETEAN SA, the Hellenic Fund of En-trepreneurship & Development(www.etean.com.gr) was established byLaw 3912/2011 (GG A17/17.2.2011),with an initial share capital of €1.7 billion, of which €1.5 billion are Greek govern-

ment bonds and the rest cash. It serves asan additional tool to the financial marketfor SMEs support.

BIC of Attika, the Business and Inno-vation Center of Attika (www.bicofat-tika.gr), is a full member of the EuropeanNetwork of BICs. It is a non-profit andnon-governmental organisation, offeringconsulting services to private companiesand local authorities in order to enhancetheir competitiveness and efficiency.

The next few years will undoubtedly beextremely tough for Athens. Actions tofoster the research and innovation capac-ity will depend significantly on: the fi-nancing from EU Structural Funds;finding better ways of absorbing EUfunds; the successful reform of the ineffi-cient research and university system; thecapacity to reinforce local innovation; amore dynamic relationship between pub-lic and private sector; simplifying bureau-cracy and cutting red tape in order toimprove access to finance for SMEs. Suchactions will lead to an important job cre-ation and a win-win situation for bothpublic and private sector.

Stavros Papagianneas is CommunicationsConsultant at StPCommunications.com.He worked as Information and Commu-nication Officer at the European Com-mission, DG Research and Innovation,and as Press Officer at the PermanentRepresentation of Cyprus in Brussels.

The mechanical arms of the first robotic machine capable of performing surgery, presented by the Athens Medical Centre in 2006.

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R&D in Greece and the debt crisisBy Stavros Papagianneas

ANALYSIS

08NEW EUROPE9 - 15 December, 2012

ANALYSIS

The NewMexico

The new President of Mexico Enrique Pena Nieto hasthe opportunity to construct a new agenda of hope inthis important country of Central America, The NewMexico agenda is above all a possibility to the futureof a world in change where innovation and competi-tiveness are the keys for new strategic impacts and re-sults. Mexico has a strong agenda for the future and itis an imperative for Europe to have the collective in-telligence of sharing it in a strategic way.Mexico is a big challenge to Europe. The global eco-nomic situation of Europe is becoming difficult: theeuropean companies are facing more and more thestrong competition from companies from Middle Eastand Asia, Public Accounts of most of the europeancountries are facing unsustainable deficits, Unemploy-ment is very high. That´s why a New Contract of Trustfor Europe is more and more an imperative. The NewEurope must be supported by some strategic proposalsthat demand for a new operational agenda. This New Contract of trust between Mexico and Europemust be supported by some strategic proposals that demandfor a new operational agenda. Europe must know how tointegrate in a positive way most of the mexican citizens thatcome to develop new businesses. Social cohesion is donewith the constructive participation of the citizens and it ismore and more necessary an effective attitude of mobiliza-tion for this effort. A positive integrative policy is a signalthat the relations between Europe and the Mexico will havenew challenges.On the other hand, Innovation and Technology mustbe the “enablers” for competitiveness in Europe andMexico. Universities and Companies must perform anew strategic partnership centered in the objectives ofthe added value, creativity and knowledge. This is thebasis for a future effective implementation of the NewEu2020 Strategy, which must be followed by Mexico.Europe and Mexico have still a strong opportunity toimplement an agenda of innovation – the opportunityis more and more know and it can´t be lost.The excellence of Europe and Mexico is more andmore the excellence of their Regions. The developmentof strategic projects like the Poles of Competitiveness,Clusters of Innovations and Knowledge Cities and Re-gions is the effective confirmation that the basis for anew agenda in these two countries depends on the ca-pacity of its regions. A New Europe and a New Mex-ico are more and more the confidence of thedevelopment of New Regions.Europe and Mexico have a unique identity based ontheir strong culture. The European and the MexicanCultures are a unique asset. Europe and Mexico mustbe able to involve other global partners in the con-struction of integrated projects focused on the devel-opment of culture as a driver for development. Thereinvention of culture is itself a very innovative way toinvolve more and more the European and the Mexicanactors in this project for the future.

Francisco Jaime Quesado is the General Manager ofthe Innovation and Knowledge Society in Portugal, apublic agency with the mission of coordinating thepolicies for Information Society and mobilizing itthrough dissemination, qualification and research ac-tivities. It operates within the Ministry of Science,Technology and Higher Education

New Europe content partner

By Francisco Jaime Quesado

Member states at the latest ECOFINmeeting agreed to have a further meetingon the Single Supervisory Mechanism(SSM), as they edged closer to an agree-ment on the issue paramount to achievingthe EU vision of a banking union.

The gathering is thought to be takingplace on the 12 December, a day beforethe next European Council meeting,where it is hoped that negotiations will befinalised to implement a legal frameworkon the new regulation by the end of theyear, in keeping with the 1 January 2013deadline decided at the OctoberECOFIN meeting.

There is thought to be an imbroglio onfour major issues that so far have pre-vented a full agreement, they comprise ofthe failure to agree on European BankingAuthority voting rights, where there aretwo options currently on the table.

Disagreements have also risen on therelationship between the ECB and thenational banking authorities, how the ad-visory board within the ECB will dealwith those countries that are non- EuroZone members, and also how the newbanking system will be phased in.

The terms of the draft ECB regulationwhen agreed will require a full unanimousvote to be adopted by the Council, oncethe consultation with the European Par-liament and the ECB has been concluded.

A deal between the Council and theParliament is also thought to be close onthe ‘two pack’ proposals that cover regula-tion for enhanced monitoring and assess-ment of draft budgetary plans of EuroZone member states, and increased sur-veillance on Euro Zone states that are ex-periencing dire financial turbulence.

An EU official said: “The problem sur-rounds the Commission statement on the

regulations that followed a disagreementon the structure of the debt, where theParliament said that they would not agreewith growth targeted investments beingblacklisted and seen as a debt enhancingmeasure. A number of member statescould not agree to this and that is wherethe Commission has stepped in to makea report.”

Negotiations between the Council andParliament began in July after several sig-nificant changes to the texts on the regu-lations.

The Council was also briefed onprogress with the Parliament over bankcapital requirements, with the commit-ment for an agreement reaffirmed to bereached by the end of the year on capitallevels for banks and investment firms.

The terms discussed were on the regu-lations establishing prudential require-ments that institutions need to respect,and a directive governing access to de-posit-taking activities.

It is aimed that both of the regulationsbe transposed into the “Basel III” agree-ment on banking supervision, that wasconcluded by the G20 at their summitmeeting in November 2010.

The latest talks on the introduction ofthe Financial Transaction Tax (FTT)using the "enhanced cooperation" proce-dure produced steady progress, the Coun-cil is ready to work on the regulation text,once approval has been received from theParliament on the draft decision thatwould authorise enhanced cooperation.The Council have said that if consent isgiven they will continue to work with theParliament over the FTT texts, and anymodifications on the tax.

In October the Commission put for-ward a proposal where eleven memberstates Belgium, Germany, Estonia,Greece, Spain, France, Italy, Austria, Por-

tugal, Slovenia and Slovakia said theywished to impose the FTT.

Greece have been handed two moreyears to correct it’s out of control budgetdeficit, this is following an agreementwith the “troika” of the creditors the IMF,ECB and the Commission. It has nowbeen pushed back to 2016 when Greecewill have to reduce its current deficit tobelow 3% of GDP in line with the EUfiscal treaty.

Nicolas Veron, a senior fellow with theeconomic think tank Bruegel said “Theseare complex negotiations and it comes asno surprise that no final decision has beenmade, and maybe the deadline for SingleSupervisory Mechanism may not bemet.”

“The proposal to have a supervisorybody that operates inside the ECB issomething that could be revised and otheroptions considered. The non-Euro Zonestates cannot have totally equal status, andwould need safeguards to protect themagainst decisions that may have beenmade against them in the ECB.”

The Commission were also at themeeting and presented their annualgrowth strategy, which focused on fivemajor strategies including pursuing dif-ferentiated growth-friendly fiscal consol-idation, restoring normal lending to theeconomy, promoting growth and com-petitiveness, tackling unemployment andthe social consequences of the crisis, andmodernising public administration.

Finance ministers though did not dis-cuss the strategy at any great length, andthere will be a meeting in February nextyear between the Economic Policy Com-mittee and the Economic and FinancialCommittee, who will be asked to askedto prepare a draft on differing views onthe Commission’s proposals when theyconvene.

European Finance Ministers council at the EU council headquarters in Brussels.

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FINANCE

ECOFIN faces difficult meeting ahead of next summit

By Peter Taberner

Going local,going loco

If there’s anywhere better to read a newspaper than a shed,it’s a shed on a mountain. While I was working on the LakeDistrict fells one of the highlights of the week was Fridaylunchtime, when we’d get out the weekly local paper, theWestmorland Gazette, once edited by Thomas de Quincey,who like the artistically inclined local poets, enjoyed hisopium in quite alarming amounts.One feature that we enjoyed was ‘Spot the Dog.’ A modifi-cation of the old football competition, where the ball wasremoved from a match photo and whoever put a cross near-est it, won. Ours was from a sheep trial and the winner hadthe harder task of putting an X where they thought thesheepdog’s nose was.I tell people about this, but few believe me.I’ve missed its golden years; William Wordsworth wrote let-ters to the editor so often he was offered the editor’s chair.One can only wonder at what a newspaper edited by the fa-mous daffodil lover would have been like. Another corre-spondent was Beatrix Potter, who founded the NationalTrust that has done so much to keep the area’s special char-acteristics and natural beauty.What makes the paper, is not its news coverage – they hada bit of publicity a few years ago when they covered the localfiremen attending a fire… a burning office chair.The lack of major news for local papers is highlighted in aweblog a friend started called ‘Dull News in Local News-papers.’ It is exactly what you expect, a long list of stories oflittle importance. I’m not alone in suspecting that the read-ers are newspaper hacks up and down the land.But the stories do give a picture of Britain, a wonderful, glo-rious picture that the nationals just can’t provide. The Maidenhead Advertiser reports on a retired scientist’sattempt to sail a metre long model boat from the UK to theBahamas hours after its launch. In Somerset an unnamed“distressed woman” was released from a locked public toiletby firemen “using small tools.” The Basingstoke Gazette demonstrated the storms thatlashed the land with a series of photos of a puddle outsidetheir offices. The Norwich Evening News headline, “Wal-let reported stolen found at home” is a warning to us all.Newbury Today had a touch of celebrity glamour when theyannounced “Two walls erected in front of Marco PierreWhite’s Carnarvon Arms without planning permission havebeen lowered.”The Brighton Argus cried out to their readers, “Can yousolve the mystery of the abandoned paper donkey?” The an-imal, described as “Vaguely resembling Winnie the Pooh’sfriend Eeyore” was left by a bin, presumably because its own-ers wanted rid of it.The Whitby Gazette reported “Burger attack sparks cullcall” after a woman had her fast food grabbed by a passingseagull. The Eastbourne Herald had “Strange noises in skiesabove town.” The story noted, “People suspected it was amilitary aircraft, UFO or a large plane’s engines cutting outbut it is thought to have been an aircraft with two propellerswhich creates an unusual noise.”While all this is amusing, I’m not writing this to make funof local newspapers.What these stories show is that these local publications havea flavour and essence of the local community. Wheneveryou’re in a new place, for work or pleasure, buy a local paperand you’ll learn more about the area in its paper than any-where else. Support your local newspapers, they are as im-portant as the nationals.

ACarling@NEurope.eu

By Andy Carling

09NEW EUROPE9 - 15 December, 2012

ANALYSIS

CONSTRUCTIVE AMBIGUITYGREEN TRANSPORT

Moving towards low or zero-carbon urban mobility in Europe

If there was just one statistic thatneeded to be highlighted during theclimate talks in Doha (which are stillongoing as I write), it is that accord-ing to the International EnergyAgency, the world is on course for anincrease in temperature of up to 6° by2100 if current trends prevail, with theresulting catastrophic effects thiswould have on the environment.

Globally, emissions have increasedby 50% since the Kyoto protocol wasfirst signed in 1990 and are continu-ing to do so, growing by 3.1% as re-cently as 2011. This means thatmassive efforts are now required to re-duce emissions and fast if tempera-tures are to be stabilised at an increaseof 2°. In Europe today, urban mobilityis a significant energy user, consumingsome 140 million tons of oil equiva-lent per year and emitting 470 milliontons of CO2 equivalent, making up 8%of total emissions. Low or zero carbonmobility with low energy consumptionis essential, therefore, to contribute to-wards a sustainable future and com-petitive cities where people, businessesand culture can thrive.

In 2011, the European Commissionpublished its Roadmap to a Single Eu-ropean Transport Area targeting a20% reduction in transport emissionsby 2030 (compared to 2008 levels) ris-ing to 60% by 2050 (compared to1990). Working with the InternationalEnergy Agency, we found that the2030 objective cannot be met by tech-nological advances alone, or what wecall ‘business as usual’; we need a com-bination of technology and policymeasures to encourage a significant

modal shift towards sustainable trans-port modes.

Electrification is one way to decar-bonise transport; the proportion ofpublic transport powered by electricityin Europe today ranges between 40-50% so there is certainly room for im-provement, providing of course, thatthe electricity is sustainably sourced.This is still an area where public trans-port holds a competitive advantageover private modes: greenhouse gasemissions of electric cars range from76-262 grams per passenger kilometrecompared to between just 17 and 48for public transport. Nor does individ-ual electro-mobility do anything tosolve congestion; a green traffic jam isstill a traffic jam.

Therefore, the best and most effi-cient strategy towards low-carbon mo-bility is to encourage a significantmodal shift away from private mo-torised modes towards public trans-port, walking, cycling and combinedmobility (car-sharing, car pooling,taxis etc.). This also includes supplyand demand measures to make an at-tractive service part of urban lifestyle.In order for public transport to be-come citizens’ mode of choice, how-ever, we need for it to also become themode of choice for decision-makers,who can adopt integrated urban poli-cies that both optimise the benefits ofpublic transport and help to steer de-mand towards it.

Local authorities can also play a cru-cial role in the reduction of emissionsby providing better operating condi-tions for collective modes. Measuressuch as priority at traffic lights and re-served lanes are simple yet effective; anincrease of 5km/h of commercial

speed on a busy line equals 20% lessconsumption and reduced greenhousegas emissions.

Public transport is helping cities toreduce energy consumption and hasbeen doing so for more than a centuryalready. What’s more, the public trans-port sector is able and willing to fur-ther reduce its carbon footprint. Forexample, 95% of buses, which cur-rently account for around half of thetotal public transport offering in Eu-rope, are still powered by diesel fuels.Long-term decarbonisation of buseswould therefore focus on electrifica-tion, but also on second-generationbiofuels. Rail transport in urban areasruns almost exclusively on electricityand in the last decade alone passengerrail transport reduced its energy con-sumption by some 22%. Further gainscan also be made with innovation inweight-saving and energy recuperationdevices.

A significant modal shift towardspublic transport, walking and cycling,as well as further electrification ofpublic transport, will mark a consider-able step forwards to reducing emis-sions and energy consumption inEurope’s (and the world’s) cities. TheEuropean Commission estimates thatthe development of low-carbon energyand transport systems will require anannual public and private investmentof €270bn over the coming 40 years; ifthis is what it takes to liberate ourcities from congestion and pollutionand to revitalise the European econ-omy, then that could be consideredmoney well spent.

Alain Flausch, Secretary General,UITP

By Alain Flausch

Are electric busses the future? The Brussels public transport company is committed to phasing out diesel vehicles by 2015.

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10NEW EUROPE9 - 15 December, 2012

ANALYSIS

In September, the European Commissionopened an antidumping investigation onthe biodiesel produced in countries like Ar-gentina. How will this affect consumers?

If you take out Argentinean biodiesel,which counts for 10-12% according to theyear, we will take out almost 20% of foreignbiodiesel used in transport. After that therewill not be chance of substitution in Europedue to the costs and conditions of produc-tion in the EU. In this scenario it is clearthat if you exclude foreign suppliers theconsumer will have to pay more for thediesel.

Then, if there will be any kind of importduties against Argentine biodiesel, it meansthat less soy bean meal will be exported tothe EU (it is the basic raw material for an-imal feeding of European pork and poultryindustry, we export around 15 millions tonsper year), with great consequences on meatprices in Europe.

Is there a protectionist trend in this field?Recently, CARBIO observed an increase

in the adoption of protectionist policies inthe individual EU member states in thefield of renewable energy.

Spain and Italy are on track to imple-ment questionable quota and authoriza-tion policies. In Germany, domesticbiodiesel producers are suggesting closingthe national market for biodiesel importsfrom Argentina by declaring that thisbiodiesel cannot be counted towards thenational targets according to national leg-islation. This is only a very broad overviewof the various protectionist policies thatare on their way in the EU MemberStates, which will make the import ofcompetitive Argentine Biodiesel more

difficult or impossible in the future.The EU, as a member of the World Trade

Organization (WTO) and a strong advo-cate of trade liberalization must view thesedevelopments with concern. These policies,in addition to the Anti Dumping investiga-tion can lead to detrimental results for theEU in achieving its energy and environmentobjectives at a lowest possible cost.

The Commission is consulting on an In-direct Land Use Change (ILUC) proposal

I have to underline that since the begin-ning, we adopted in Argentina all the sus-tainability requirements asked by the EU inthe directive. About ILUC, we took part toall the consultation meetings with the EUCommission and we expressed clearly ourposition on this matter.

Now we are very disappointed with theBrussels because this new proposal will havea negative impact on production in com-

petitive countries like Argentina, Indonesiaand Malaysia.

Going into detail, Indirect Land UseChange (ILUC) is a concept not yet suffi-ciently developed, not founded on reliableevidence and without a robust methodologyof determination. Any decision taken onILUC will be premature and without solidscientific grounds. In consequence, the in-troduction of ILUC policies may create bar-riers for production and trade withoutproper scientific foundation, and thereforewould be incompatible with the obligationsof WTO contracting parties.

Considering the new draft EU proposalon ILUC, there is no scientific explanationto support the ILUC factor of 55 grams ofCO2 equivalent per mega joule for oilcrops. Therefore, the new proposal will se-riously restrict producers' access to fuelmarkets because of suppliers opting forother biofuels.

In addition, the draft proposal reduces theconsumption of biofuels derived from foodcrops in the transport sector by 2020 to 5%,a measure that will severely impact existinginvestments in developing countries, andweakening the security of the European en-ergy supply.

In particular, the new draft does not con-sider an ILUC factor for those biofuelswhich use a by-product of a food product astheir feedstock.

The primary purpose for cultivating soy-bean is for food production. Soybeans con-tain just 18 % oil, with 82 % comprisingvarious components of protein meal used ina variety of livestock segments (poultry, beef,dairy, swine, etc.) destined for human food.

Given that a relatively small proportionof the soybean is used in soybean oil pro-duction, then soybean oil is considered as aby-product. Moreover, although soybean oilis used for cooking and other industrial pur-poses, it is recommended to be used inmoderation and in small quantities in thehuman diet. Clearly then, the main purposefor planting this crop is protein meal forfood production.

There is no economic incentive to culti-vate soybeans only for their oil component,whatever that oil is used for, if the produc-tion of meal were not profitable. Therefore,in the case of soybeans it will be necessaryto consider a new category of net ILUC,calculating only the factor for the percent-age of the raw material used for the pro-duction of biofuel.

Gustavo Idigoras, trade advisor for Carbio (Camara Argentina de Biocombustibles) andformer agricultural minister counsellor forthe Argentinian government spoke to NewEurope about his concerns over proposedchanges from Brussels

KLM became the first airline in the world to fly on biokerosene with passengers on board in 2009.

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Industry says biodiesel limits will hurt consumers

By Gustavo Idigoras

The European Union should do its best toensure that its member states comply withhuman rights laws, rather than focus on thesituations in outside territories, a seniorRussian official has said.Konstantin Dolgov, commissioner forhuman rights and the rule of law at theRussian ministry for foreign affairs, said inBrussels on 6 December that. With regardto the global human rights, and with anoblique reference to the supposed denial ofrights to Russian minorities in the Balticstates, said that, “it is high time our Euro-pean partners start changing the situation,and make sure all EU countries fulfil theirobligations”.His comments come following the publica-

tion of the Russian government’s report onthe human rights situation in Europe.Dolgov told New Europe that human rightsin Europe “have not been persecutedenough, but not been tackled enough”. Headmitted that in the eyes of its critics, Rus-sia has a poor reputation in the EU formaintaining human rights standards, but in-sisted that the country has a better standardthan has been suggested. He said this report,

and a recent one on the situation in the US,serve to contribute to the international de-bate on human rights. Russia and the EU,he said, have a good strategic partnership,but “in the humanitarian field are laggingbehind” in co-operation. He said that it would be very unfortunate ifthe report was misread as a kind of tit-for-tatpolitical posturing; “you can’t trust us, so wecan’t trust you”. He said that it is importantfor the EU to look at the human rights sit-uation “east of Vienna, and west of Vienna”.“Basically in the age of austerity”, said Dol-gov, “human rights suffer. His commentsecho those by philanthropist George Sorosat a human rights conference in Budapest on27 November. He said that in Europe, therecontinue to be examples of violence againstthe rights of minorities, including prisoners,

legal migrants, women and people with dis-abilities”. He also aid there “was an obviousproblem of the freedom of the mass media”.His comments came before he was due for ameeting with the EU’s human rights envoyStavros Lamprinidis. According to Dolgov,the envoy should “not lecture others” abouthuman rights, but instead address the resid-ual problems that exist within the EU; theprimary one being the rise of neo-Nazismthat has erupted since the advent of the fi-nancial crisis.“There is a definite difference betweenright-wing populist parties and neo-Nazis”he says. “Those parties that “don’t want amulti-cultural, multi-ethnic, multi-religiouspace are very dangerous indeed”, he said.Governments, he said, have distinguish be-tween the two. “IT’s for public opinion to re-ject one or the other, to be determined onthe basis of the certainty of the law”, such ashate crime legislation or laws on displayingextremist memorabilia. “We cannot the les-sons of history”, he said.

HUMAN RIGHTS

‘High time’ Europe looked at internal human rights situation

By Cillian Donnelly

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There has been a lot of talk in Brusselsabout how social media is going to bringchanges, and there was one case of advocacypossibly beginning a dialogue with thetyrannical regime in Uzbekistan, over Twit-ter last weekend.

On one side, there was AndrewStroehlein, Director of Communications forthe International Crisis Grou (ICG), theother was Gulnara Karimova, daughter ofthe nation’s ruler and described as ‘the mosthated woman in Uzbekistan.’

Stroehlein tackled her over torture inUzbekistan and managed to have a discus-sion which both sides promised to continue.Stroehlein talked about the exchange withNew Europe.

What were you trying to do when youinitially tweeted her?

My first tweet was just an @ mention ofher, pointing out her recent attacks on oth-ers. I didn't think she'd respond.

Why do you think she responded?You'll have to ask her that. I've really no

idea. If you take her words at face value,she's interested in a dialogue, but to whatend, if indeed to any specific end, I don'tknow. Ask her.

What did you accomplish?Accomplish in real terms for any of the

subjects we were talking about? Nothing. Ifin opening up a dialogue, that leads tosomething, well, I'm very sceptical. This is a

regime that has used forced labour - in-cluding forced child labour - and systematictorture for decades. They massacred some700 or more protesters in Andijan back in2005. It's been under the same brutal dicta-tor, her father, for decades... It's one of themost oppressive regimes in the world by anyindicator you'd care to refer to. Does any ofthat - ie, the stuff that actually matters -change because Gulnara Karimova is en-gaging people on Twitter? No, of course not.

The interesting thing is that she is en-gaging, however, particularly as she's wellknown for not taking interview requests

from journalists. So, why this suddenopenness?

Perhaps she's doing this to clean up herimage abroad - perhaps she thinks thatbeing seen to be open with critics will im-prove her reputation. But if that's the case,dialogue alone is not going to help her re-brand herself any more than her forays intojewelry, music videos and perfume did. Thisstuff fails because it never gets to the heartof the matter: she represents this repressiveregime. No perfume can cover the smell ofthat. Only her actively working to end therepression in Uzbekistan and showing visi-

ble improvements on the ground can cleanup her terrible image.

What actions would you like her to take?Does she have the leverage for that?

I don't think she can snap her fingers andchange this poisonous regime in an instant.But she could stand up and denounce thingslike systematic torture and forced childlabour in Uzbekistan (which she surelyknows about, so her asking for more info isdisingenuous) and promise to help end them.That would set her out on a very difficultpath, to be sure, and she may then lose someprivileges and so on. But she most likely hasenough money to live very comfortably with-out being tied to the regime anymore (if itcame to that) so she surely has some roomfor maneuver. She's a powerful person, andshe keeps explaining how she wants to dosome good... Is it impossible to think shemight actually say those things and work inthat direction? Well, OK, it seems pretty im-possible, but then, her having twitter conver-sations with her critics seemed prettyimpossible a few days ago.

Where next, will you be in touch?We've started an email conversation. I'll

be sending her some specific cases and ask-ing her to look into them. (I'll also put thosecases on my blog or somewhere public, soeveryone can follow if she's actually doinganything or not.) I am highly sceptical thiswill lead to much, to be frank, but sincenothing else has ever moved this regime inthe direction of respecting basic rights, thereseems little harm in trying this.

UZBEKISTAN

International Crisis Group tackle dictator’s daughterDirector challenges her to stand against torture

11NEW EUROPE9 - 15 December, 2012

ANALYSIS

There was widespread outrage in Brussels last year when President Barroso welcomed the President of

Uzbekistan, Islam Karimov.

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Sometimes, one single word can change anopinion, one sentence can modify a point of view,but just one blog or blogger can transform awhole country. This is what happened during theArab Spring in 2011, when journalists in theMiddle East were forced to reinvent themselvesto provide truthful news coverage to citizens.However, such power can be banned in a matterof seconds if governments consider this kind ofinformation harmful for their interests. But evenafter detentions, murders or censorship, bloggerscontinue to fight for a better world and for theright of freedom of expression, stated four ofthem at the European Parliament on 5 Decem-ber, at the conference Bloggers for Democracy.During the revolution in Egypt, social networksencouraged average citizens to protest and takethe streets. Several people considered it a Face-book or Twitter revolution, but it wasn't, becauseat the end people were sacrificing their lives, andnot their social accounts, explained Sarrah Ab-

delrahman, a 24-year-old Egyptian blogger. Online technologies opened the way towardsdemocracy in the country, but without the helpfrom several European activist groups it would-n't have been possible. Telecomix, a decentralizedcluster of net activists, facilitated information touse landlines circumventing state blockages ofbroadband networks in Egypt. Besides, they di-verted all connections to the Syrian web, andredirected netizens to a page with instructions tobypass censorship.Nevertheless, not all organizations have good in-tentions. “Main operators are interested in mak-ing money by creating an equal Internet”, saidMartin Löwdin, Swedish activist and Telecomixmember, “this undermines the fundamental ideaand principles of the net.”Bloggers objective is not only to defeat dictator-ships; they also want to defend the right of free-dom of expression, something that hasdisappeared in countries considered as demo-cratic governments. For instance, Azerbaijan isworking hard to present itself as a modern and

democratic country, but recent actions againstbloggers or journalists are showing a differentpicture. “We have bloggers because we don´thave free media”, explained Arzu Geybullayeva,creator of one of the most critical blogs in the re-gion, and added that online activists are consid-ered “crazy people.”Social sites like Facebook are important in thesecountries because are the best way to join all cit-izens together with a common cause. Thank youto these sites “in 2011 was the first time that peo-ple in Azerbaijan did something”, Geybullayevastated, making reference to anti-governmentdemonstrations lead by young activists.The situation in Russia and China is not muchbetter. On 2 November, Vladimir Putin approveda law which allows the government to ban web-sites containing what it considers harmful mate-rial for Russian citizens. The rule, defined as anew step for censorship, can be only combatedwith social networks and blogs.According to the Russian blogger Oleg Kashin,Internet is the enabler for more inclusive democ-racy and revolution in the country. Moreover, heexplained that these actions show that authoritiesare terrified of online criticism and its power.Meanwhile, China is famous for its strong onlinerules, but this doesn't mean that the countrywants their citizens to be disconnected. They use

Chinese versions of Facebook, YouTube or Twit-ter, such as Weibo, to keep the people happy andsatisfied, explained Michael Anti, blogger andjournalist in China. However, these networks arealso controlled by a centralized server and by theguideline "Methods for Governance of InternetInformation Services."Therefore, what can the EU do to change thissituation in those countries? Within the manyactions that are taking place in different Member,in November the MEP Marietje Schaake pre-sented a report on a Digital Freedom Strategy inEU Foreign Policy. The document defends theimportance of an open Internet, which alongwith mobile phones and ICTs “have impactedon human rights and fundamental freedoms.”Regarding to the Data Protection Regulation,Linus Nordberg, member of the Tor Project, af-firmed that some aspects of the proposed legis-lation should be reviewed. For instance, thedefinition of “privacy by design” included in theRight to be Forgotten is more privacy by policy,because users have to ask the regulator. Privacyby design should be based on engineering, he ex-plained. Because the number of technologies try-ing to violate individuals' rights is increasing, EUinstitutions, bloggers and citizens must “continuechallenging” these authorities, concludedSchaake.

ONLINE MEDIA

A weapon called blog

By Andy Carling

By Nerea Rial

Despite differences over Syria, Russian Presi-dent Vladimir Putin and Turkish Prime Mini-ster Recep Tayyip Erdogan emphasised at theirIstanbul meeting their countries’ deepeningeconomic ties, signing a series of bilateral eco-nomic agreements and highlighting Russia’sconstruction of Turkey’s first nuclear powerplant. Russia is to spend over $20bn to financethe Turkish nuclear electricity project in Ak-kuyu in Mersin Province. Russia has also said itwould like to be involved in the construction ofother nuclear plants in Turkey.

Moreover, Russia is Turkey’s largest gas provi-der. The Blue Stream carries 16bn cubic metresof gas from underneath the Black Sea to Turkeyand the West Line has a capacity of 6bn cubicmetres. The latter will be soon used by four pri-vate firms rather than by the Turkish state.

Last week, private Turkish companies con-cluded 30-year contracts with Russian gas mo-nopoly Gazprom. A year ago, Ankara gaveGazprom permission to build its South Streamgas pipeline through Turkish territorial waters.

After emerging from a session of the Rus-sia-Turkey Co-operation Council, Putin saidthat Russia is stepping up its gas supplies toTurkey by the Blue Stream pipeline laid under

the Black Sea.A day before Putin’s visit, Russian Energy

Minister Alexander Novak said Russia wouldbe willing to increase its gas supplies to Turkeythis winter if Ankara asked it to and an agree-ment was reached. "As has happened manytimes in the past, we have always helped Turkeywhen they have experienced problems mana-ging during the winter," Novak told reportersduring a visit to the Turkish Black Sea town of

Karasu east of Istanbul.Gazprom is Europe's natural gas supplier but

is seeking to diversify its markets away from theEuropean Union, on which it relies for 80% ofits exports. Therefore, the growing Turkishenergy market is appealing to Gazprom. JulianLee, senior energy analyst at the Centre forGlobal Energy Studies (CGES) in London,told new Europe on 3 December that Turkey atthe moment is a separate market for Russia.

“Russia’s aim for getting gas to Europe is stilldelivering through South Stream so Turkey isseen as a separate market.”

Turkey’s dependence on Russia for oil andgas may increase further because of the impactof unilateral US sanctions targeting energy pur-chases against Iran. But Erdogan told a jointnews conference with Putin on 3 Decemberthat Turkey will continue to buy natural gasfrom Iran despite the prospect of tighter USsanctions. Erdogan said Iranian gas importswere vitally important for Turkey. “When [theAmericans] say, ‘you need to comply,’ we say,‘we can’t because this is strategically importantfor us’,” he said.

Regarding Syria, Putin and Erdogan dow-nplayed differences over the civil war, sayingthey shared the common goal of trying to endthe humanitarian crisis in Syria. Putin, one ofSyrian President Bashar Assad’s few remainingallies, said he understood Turkish concernsabout its border security after Syrian shells hitTurkish territory in recent months. But theKremlin leader warned that Ankara's requestthat NATO deploy Patriot missiles on its bor-der with Syria could escalate fears of a widerconflict.

German energy company RWE’s plans to exitthe Nabucco project will not be a problem forthe gas pipeline, an analyst told New Europeon 3 December. RWE is reportedly discussingthe sale of its 16.1% stake to Austrian oil andgas company OMV. The latter also owns a 16%stake.

But Julian Lee, senior energy analyst at theCentre for Global Energy Studies (CGES),said by phone from London that even if OMVdoes take this stake from RWE, there will def-initely be further changes in the ownershipstructure of the pipeline at a later time. TheNabucco consortium also includes Hungary'sMOL through its gas pipeline operator FGSZ,Turkey's Botas, Bulgarian Energy Holding andRomania's Transgaz.

Recently the Nabucco consortium submit-ted plans for a smaller Nabucco West pipelinewhich would deliver gas from Azerbaijan’sShah Deniz II field. Nabucco West foresees theconstruction of a pipeline that will run from theBulgarian/Turkish border to Austria’s Euro-pean gas hub Baumgarten.

Azerbaijan is expected to choose to supplyeither Nabucco or the Trans Adriatic Pipeline(TAP) by mid-2013.

TAP will transport Azeri gas from theGreek-Turkish border, taking it via Greece andAlbania, and across the Adriatic Sea to south-ern Italy, and further into Western Europe. Itsshareholders are EGL (Switzerland, 42.5%),Statoil (Norway, 42.5%) and E.ON Ruhrgas(Germany, 15%). The Shah Deniz partnershave an option to acquire as much as 50% ofTAP.

Shah Deniz partners -- BP and Azeri state

oil and gas company SOCAR -- could take astake in Nabucco West, Lee said. “We are in asituation at the moment where the Shah Denizpartners are looking to take stakes in thepipelines that might carry gas beyond the Turk-ish border. They’ve already negotiated entryinto any possible TAP pipeline. They have cer-tainly talked about a change in shareholderstructure in Nabucco West that would givecompanies like BP and perhaps SOCAR astake in Nabucco West,” Lee said.

“I don’t think this is going to be a big prob-lem for them [RWE exiting Nabucco]. Therewas going to be a shakeup in ownership any-way. The existing partners were going to have totake smaller stakes if room was going to bemade for the Shah Deniz partners,” he added.

Asked if RWE’s departure would affectNabucco and if OMV would snap up the share,Nabucco spokesperson Christian Dolezal toldNew Europe on 3 December that it cannotcomment on the shareholder structure until aspecific decision has been taken by the NabuccoSteering Committee. But he added that its ne-gotiations with the Shah Deniz II consortiumfor the Cooperation Agreement are progressingwell.

Regarding plans for Nabucco between nowand the final decision, Dolezal said theNabucco consortium “is currently focused onfinalising the co-operation agreement withthe Shah Deniz consortium, which is expectedto take place this year or early next year. Wecontinue to work on concluding gas supplyalong the SEE [southeast Europe] route forEuropean customers in the coming months”.

Officials from the European Union and theUnited States have said that regardless of whichpipeline is chosen – Nabucco or TAP – it

would have to also supply the Balkans region,which currently relies almost exclusively onRussian gas.

Dolezal said Nabucco is ideally placed toaccess the markets of South Eastern Europeand the Balkans with minimum additionalinfrastructure investment. Interconnectorsare available between Hungary-Croatia,Austria-Slovenia, Bulgaria-Serbia and Bul-garia-FYROM. In addition, there are over16bn cubic metres of combined storage ca-pacities along the Nabucco route, whichpromotes energy security and business op-portunities in the countries, he said. “Giventhe dependence in these countries on a sin-gle energy source, the markets in thesecountries are very open to diversification.This makes Nabucco a win-win propositionfor consumers in these countries and alsofor the producers,” Dolezal said.

Nabucco is also facing competition fromRussia’s South Stream pipeline, which is in-

tended to transport up to 63bn cubic metres ofnatural gas to central and southern Europe.Construction will start in December 2012.

But Lee said that even though South Streamis catering for the same market as NabuccoWest, the real completion is TAP.

Meanwhile, SOCAR is working on theTrans-Anatolian (TANAP) project, which en-visages construction of the pipeline from theTurkish-Georgian border to Turkey's borderwith Europe to supply gas from Shah Deniz toEurope through Turkey. TANAP will connectwith Nabucco or TAP.

“Nabucco and TAP are going to be compet-ing for the onward delivery of Azerbaijani gas,”Lee said. “And it seems to me that Azerbaijanigas is not likely to go through South Stream. Ifone accepts that Azerbaijani gas is going tocome to Europe through TANAP, then I thinkwe see the competition as being betweenNabucco West and TAP to carry that gas on-wards into Europe.”

ENERGY|GAS PIPELINE

Shareholder shakeup not a problem for Nabucco

ENERGY|DIPLOMACY

Putin, Erdogan downplay Syria differences, hail energy projects

By Kostis Geropoulos

12NEW EUROPE9 - 15 December, 2012

ENERGY & CLIMATE

Russian President Vladimir Putin, left, and Turkish Prime Minister Recep Tayyip Erdogan applaud after a signing cer-

emony during a press conference in Istanbul, 3 December 2012.

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Nabucco and TAP plan to lessen the Balkan countries' dependence on Russian gas.

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Russia’s crude oil and condensate out-put climbed to a post-Soviet record of10.5mn barrels a day in November, or1.5% greater than the same month in2011, according to preliminary oil sta-tistics from Russia’s Energy Ministry.Regarding Russia’s oil production,“talk of demise has been greatly exag-gerated,” Chris Weafer, chief strategistat Moscow’s Sberbank Investment Re-search wrote in a note to investors on3 December.

Rosneft is the country’s largest oilproducer with 2.39mn barrels per dayand this is soon to rise to 4mn barrelsper day once the absorption of TNK,

including its share of Slavneft produc-tion, is completed, Weafer wrote. “Intotal, based on November data, thestate will control 49.2% of Russianproduction once the Rosneft-TNKdeal is done. The private sector willcontrol 39.4% while the ‘others’ cate-gory, including PSAs, will account for11.4%,” Weafer concluded.

Russian President VladimirPutin has called for Russia to maintainproduction at above 10mn barrels aday for at least the next decade and or-dered the government to prepare newtax breaks to encourage developmentof the continental shelf and unconven-

tional oil reserves.Russia ranks number two in oil pro-

duction behind Saudi Arabia. Lastyear, it was the largest producer ofcrude oil in the world, averagingaround 9.8mn barrels per day, the USEnergy Department's Energy Infor-mation Administration said. Most ofthe Russian oil production comes fromthe Priobskoye and Samotlor fields inWestern Siberia, according to the EIA.

Meanwhile, natural-gas productionwas 57.64bn cubic metres, accordingto the data. Output at Russian gas mo-nopoly Gazprom was 42.5bn cubicmetres in November.

ENERGY|OIL

Russia oil production increasing

On 1 December, a Russian diplomatcalled a potential pipeline linking gas-richTurkmenistan with Europe via theCaspian Sea a political project of the Westthat could cause tensions without ensur-ing Europe’s energy security. “The Trans-Caspian pipeline will have practically noinfluence on Europe’s energy secu-rity,” Russian ambassador to Turk-menistan Alexander Blokhin toldjournalists in a briefing in Ashgabat.

He said that the pipeline’s 10bn-cubic-

metre capacity was too little in compari-son with Europe’s total consumption ofgas to have any impact.

The pipeline project aims to transportnatural gas underneath the Caspian Seafrom Turkmenistan to Azerbaijan, to feedinto other pipelines in Europe’s so-calledSouthern Corridor, bypassing Russia.

The five Caspian nations, which alsoinclude Russia, Iran and Kazakhstan,needed to make such infrastructural deci-sions together, Blokhin said, warning that

“otherwise there will be complete havocin the Caspian... and we will get anotherhotbed of tension”.

The European Union launched talksover the pipeline last year as part of itslong-term goal to reduce Europe’s de-pendence on Russia for about a quar-ter of its gas supplies. The UnitedStates is also a big support of theTrans-Caspian pipeline since it wouldreduce the 27-bloc’s reliance on Russ-ian gas supplies.

ENERGY|GAS PIPELINE

Russia against Caspian gas pipeline

On 6 December, Moscow and Beijingsigned an inter-governmental agree-ment under which Russia will buildtwo new reactors at China’s Tianwannuclear power plant. The bilateral pro-tocol on the construction of Tainwan’sthird and fourth reactors was signed inthe presence of Russian Prime Minis-ter Dmitry Medvedev and his visitingChinese counterpart Wen Jiabao.

Construction work will begin thismonth, Rosatom civilian nuclear powercorporation head Sergei Kiriyenko said.“At the end of 2012, the first concretewill be poured for the foundation of thethird and fourth reactors,” Kiriyenkosaid, adding the nuclear power station’ssite could accommodate as many aseight reactors.

The Tianwan nuclear power plant isthe largest facility the two countries havebuilt under a bilateral co-operationagreement. Its first stage includes twopower units with VVER-1000 reactorsand was put into commercial operationin 2007.

Russia’s Atomstroyexport and theJiangsu nuclear power corporationsigned a general contract to build theNPP in 1997. Atomstroyexport wascharged with design work, equip-ment and material supplies, con-

struction and assembly work, puttingit into operation and training Chi-nese personnel.

The day before Medvedev and Wenmet in Moscow, there was a meeting ofthe ninth round of the Russia-ChinaEnergy Dialogue. On 5 December, Rus-sia and China signed agreements on co-operation in coal and electricityfollowing meetings between top officials

in Moscow. Meanwhile, Russian state-controlled

oil company Rosneft CEO IgorSechin and Chinese Deputy PrimeMinister Wang Qishan on 4 Decem-ber discussed an intergovernmentalagreement on creating favourable con-ditions for the construction and use ofan oil-refining and petrochemicalsplant in China.

13NEW EUROPE9 - 15 December, 2012

ENERGY & CLIMATE

Russia, Chinain gas pricestalemate

When I started writing this col-umn six years ago, negotiations onsales of Russian gas to China wasa key issue in energy relations be-tween Moscow and Beijing. Butthe two sides have repeatedlyfailed to reach a final agreementon gas supplies amid disagree-ment over price.On 6 December, Russian Prime Minister DmitryMedvedev met his Chinese counterpart Wen Jiabao inMoscow. However, officials from both countries ap-peared to make little progress on the price and route ofRussian natural gas deliveries to China.“Neither side has shown the flexibility that is needed tomake these gas sales actually happen,” Julian Lee, sen-ior energy analyst at London’s Centre for Global En-ergy Studies (CGES), told New Europe. “I’ve beenhearing since 2006 that a deal on gas sales is imminent.Six years on, we are waiting for it,” he said.Europe remains the main market for Russian gas. On 6December, Konstantin Simonov, head of Russia's Na-tional Energy Security Fund (NESF) in Moscow, toldNew Europe that the main driver in Russia’s negotia-tions with China is still the position of the EuropeanUnion. The EU has called for gas-to-gas competi-tion and has launched an anti-trust probe into Russiangas monopoly Gazprom. “The European Union is try-ing to press Russia with the idea of diversification,” hesaid. “So Mr. [Russian President Vladimir] Putin is try-ing to find an answer to this challenge. And a very sim-ple answer is: ‘If you don’t want to buy our gas, we’ll giveit to China,’” Simonov said, adding that the gas fields inWestern Siberia, including Urengoy, are the resourcebase for Europe. “With the help of Altai pipeline it’sthe easiest way to show to Europe that we really can sellthis gas to China,” he said.In the context of the Chinese Premier’s visit to Russiaon 6 December, Gazprom Chairman Alexey Miller andChina National Petroleum Corporation (CNPC) Pres-ident Zhou Jiping confirmed their interestin the Altai project, which envisages building a gaspipeline to supply natural gas from fields in WesternSiberia to China via the western part of the Russian-Chinese border. But Gazprom noted that the Altaipipeline construction will start only after a gas purchaseand sale agreement is inked with the Chinese side.I wouldn't hold my breath on a price deal though. Si-monov noted that in the western half of China there isno shortage of gas and its economy lags behind thecoastal regions of eastern China. “For Russia there is nocommercial need to build this pipeline. There is onlypolitical need. That is why we don’t want to give dis-counts to China and China also doesn’t want to give inthis process of negotiations,” Simonov said. “Speakingabout economy, in my opinion there is no need to buildthe Altai pipeline,” he said.He said Russia and China should begin negotiationsabout the price of gas from East Siberia. Gazprom hasannounced plans to begin the construction of a gaspipeline from Yakutia to Vladivostok. Simonov said themore logical step is to sell gas to eastern China. “Maybewith the help of this pipeline we can have some break-through with China.”

KGeropoulos@NEurope.eufollow on twitter @energyinsider

By Kostis Geropoulos

ENERGY INSIDER

Russian Prime Minister Dmitry Medvedev, right, and his Chinese counterpart Wen Jiabao

meet in Moscow, 6 December 2012.

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ENERGY|NUCLEAR

Russia, China ink nuclear deals

The World Forum for Ethics in Business(WFEB) held its international leadershipsymposium on business ethics in theEuropean Parliament in Brussels on 30November. The symposium, which wasentitled Rethinking Capitalism, broughttogether top business leaders and politicalfigures to discuss the strengthening ofhuman values and ethics in the businessworld, and how to shift the debate fromadvocacy to action.

Following the event, the WFEB Presi-dent, Rajita Kulkarni, answered NewEurope’s questions about the symposium,and how the current debate can be trans-lated into action in the future.

First of all; can you give a brief outlineof what you learned from the conference,and where World Forum for Ethics inBusiness (WFEB) might take these ideason in the future?

What I learned form the conference isthat there is a huge global awareness aboutthe need for ethical business and ethicalleadership. It was great to see leaders fromacross all sections of society comingtogether to share their experiences and toreinforce their commitment to be ethicalleaders.

The WFEB’s 8th International Lead-ership Symposium on Ethics in Businesswas structured in a very interactive for-mat, allowing for active participation,discussions and ideas from all the dele-gates and speakers. At the end of theconference, we were able to come up witha very solid charter of actions around thethemes of Leadership and Education,Integrity and Ethics in the Workplaceand Open Contracting, which we wouldlike to take ahead in the coming years.WFEB has also resolved to create avibrant global community of practice andtowards that we will introduce a numberof engagement mechanisms like regularnewsletters, WFEB partnership opportu-nities, satellite conferences around theworld and more.

Four meeting dates for 2013 havealready been announced to elaborate on anethics curriculum that will take intoaccount views & inputs from stakeholdersacross all sectors.

( February, Bangalore, India; April,Netherlands; May,Washington DC; June,Berlin.) Few satellite conferences arealready in the process of finalisation for2013 (for exampl,e India, Slovenia,Switzerland). This will further createglobal advocacy for ethical business.

The title 're-thing capitalism' is ambi-tious: Is capitalism simply one specificbusiness/financial model, or does it meandifferent thinks to different people? Howpiratical, then, is it to simply overhaulexisting structures?

Right here in Europe, five of the region’scountries – Greece, Portugal, Ireland, Italy,and Spain – have, to varying degrees, failedto generate enough economic growth tomake their ability to pay back bondholdersthe guarantee it was intended to be.

The crisis has far-reaching conse-quences that extend beyond their bordersto the world as a whole. The BRICS haveseen their economies slow significantly.And what is the full humanitarian impactof this economic crisis? On food costs, fuelcosts, the effect on social securities, healthand infrastructure development because offinancial austerities of Governments? TheArab Spring, The India Against Corrup-tion, The Occupy Wall Street movementssought to bring attention to issues of socialand economic inequality, greed, corruptionand the undue influence of corporationson government.

This is good enough indicator that Cap-italism in its traditional form is not servingus any more. And at the core of some ofthese crises is a breakdown of ethics, abreakdown of human values .The themeof our conference this year was intended tochallenge us, provoke us, inspire us, onRethinking Capitalism. Mahatma Gandhifamously said that “There is enough in theworld for everyone’s need, but not every-one’s greed.” This is so true for us today.

If we don’t Rethink Capitalism now, itwill lead to great societal unrest and anar-chy in the world. It may not be easy, but itwe have to begin.

Can you tell me a little about what youdefine by 'a values-based approach to cap-italism'?

Some values are universal, for example,fairness, honesty, integrity, transparency. Itis about each one of us to bring our corevalues to the work place and to conductourselves at work as we would conductourselves at home, and more importantlyhow we would like our children to conductthemselves. Ethics begins at the individual

level; no system can be ethical if its playersare not. Spirituality can help blossomthese values in an individual by helpinghim rid of stress and have a calm, stressfree mind. Ethics is not in a office cubicleor policy manual, it is a core value insideeach of us.

To inspire and promote ethical conduct,the WFEB has created an oath of ethicsthat individuals can take on WFEB’shomepage.

How is this different fro current think-ing on corporate social responsibility(CSR)?

Clearly there are some organizations,like Tata in India, and Unilever and Volk-swagen AG in Europe, who have embed-ded CSR as their corporate culture andtherefore we have even awarded them withthe WFEB Ethics in Business Award.

However, for many organizations, CSRtoday remains a lip service, somethingwhich is good to have. This needs tochange. If organizations get in touch withevery sections of society they will be ableto serve their stakeholders better and willbe able to create culture of contributionrather than accumulation.

And when this culture permeatesthroughout the organization it enablesemployees to even work more ethicallytowards their goals because they thinkwhat they can contribute rather then onlytheir personal gains.

How can these values infiltrate deci-sion-making - a top-down leadershipapproach, or from a wider discourse, saythrough fora like the one in the EuropeanParliament?

I believe when an individual’s mind iscalm and stress free, he/she naturally actsin a fair and ethical manner. So we have tobegin with ourselves.

One of the prestigious partners ofWFEB, the International Association forHuman Values (IAHV) has developed a

fantastic leadership program called Trans-formational Leadership for Excellence,which offers powerful tools, techniquesand knowledge to enable leaders tobecome stress free. When you are stressfree, you are more aware & connected toyourself thus connecting easily with oth-ers. This becomes the basis of creatingstrong teams, which can then commit andtake responsibility for the organization.

The unique approach of WFEB is tobring together leaders and stakeholdersfrom all sections of society (public sector,private sector, NGOs, media, academics)and share these ideas on a common plat-form so that they can take them back,integrate them and benefit from them intheir own life and business.

The WFEB conference offers a power-ful platform of interaction, which thenleads to inspired action for a sustainableimpact. Leaders have the responsibility tolead by example.

We are living in a global business envi-ronment - what can different cultures,with a different spiritual approach to life,teach each other with regards to ethics inbusiness?

What the worlds needs today is to thinkglobal and act local.

Now, if not ever, is the time for us toappreciate and honour the good fromevery part of the world and have a holisticway of life. This will build tolerance andan appreciation of each other’s points ofview, and build a bigger sense of connect-edness.

Corruption happens only outside ourboundary of connectedness. A lack ofconnectedness or sense of belongingnessbreeds corruption in society. No one canbe corrupt towards the people theybelong to.

Technology has enabled us to connectwith somebody 1000 of miles away but weare loosing human touch with our ownneighbours, colleagues at work .Spirituallycan help us bridge this gap. By revivinghuman values of caring, sharing and com-passion, it can bring a sense of belonging-ness to every individual that cuts acrossthe prejudice of nationalities and religions.

According to Sri Sri Ravi Shankar thefounder of WFEB, we need 5 Cs to com-bat corruption:

connectedness, a bigger sense of con-nectedness to every section of society;courage to stand up and do what is right;compassion for the lesser served in theworld; caring and sharing, rather than self-ish personal accumulation and a cosmicunderstanding of life- of the bigger pur-pose of life & the short life span we haveto achieve it. No matter how much weaccumulate, we don’t carry it along whenwe depart!

If we have this broad vision and under-standing of life, our actions will most sure-ly be more ethical.

INTERVIEW| RAJITA KULKARNI

Reviving human values in businessBy Cillian Donnelly

14NEW EUROPE9 - 15 December, 2012

ANALYSIS

World Forum for Ethics in Business President, Rajita Kulkarni (R) with Huguette Labelle, chair of

Transparency International

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15NEW EUROPE9 - 15 December, 2012

EU WORLD

With the almost daily reports of wrong-doing by business or governments, NewEurope discussed how to move forwardwith Prof. Charles Sampford, Director ofAustralia’s Institute for Ethics, Gover-nance and Law.

Business and ethics has been theunderlying theme in major news storiesfor the last few years, how close is ethicsto business?

Ethics can’t have a separate word.Either you act ethically or not. Ethics isnot sat on some surreal cloud. Ethics isabout people doing everyday jobs andthinking about their values, asking hardquestions about those values and living bythem. If you do, you have integrity and actethically. If you don’t, the first person youcheat is yourself, because you’re not theperson you told yourself you are.

You also cheat other, but that’s second-ary. This is individual ethics and one ofthe problems of talking about publicethics, or business ethics is that it con-cerns how an organization works, not justan individual. It’s not the matter of anunethical corporation and an ethical sainttrying to do the right thing. What weneed is for business ethics to go throughthe same process as an individual. It needsto ask hard questions, give honest andpublic answers and live by it.

Now a corporation has many peoplewith different views. So it’s a more com-plex process, but one that is absolutelyessential. Leaders need to lead a processwhere they and their colleagues ask thesequestions and ask ‘what’s this organiza-tion for?’ and ‘How is the community bet-ter off ?’

It’s critical that every organization justi-fies itself to the community it is part of. Inwhat way does it make the community abetter place? This isn’t to say that businessshould act like a charity. They can servethe community and make a profit. It’s veryimportant to make sure they do.

This involves thinking where are the pit-falls, the temptations? It’s not enough tohave a code of ethics. There must also beaccountability mechanisms and sanctions.

This has to be an ever more complexissue in a globalised world?

Companies should have an overall justi-fication of what it does and adapt to eachcommunity it works in. If it operates in onecountry to the detriment of the communi-ty it should be honest about it. I think theyshould make sure to say, before they enter acommunity, how they will benefit the com-munity and then live up to it.

Shareholders need to think about theirvalues and they should invest where theirvalues are preferred. If there’s a companythat is acting unethically, they shouldbecome shareholder activists and try toensure the corporations they invest in live

up to defensible values.

Is this about long term rather thanshort term thinking?

In downturns, people are tempted to cutcorners and there is a real problem withshort-termism and the way the financialmarkets operate is a real problem. Withincorporations there are some who thinklong term and others who think shortterm. The investors have long term inter-est, they may not see any money for a longtime.

One of the problems is that all theintermediaries between investors and thecorporation are into short term interests.That makes it hard for investors long terminterests are being diverted. Planninginvolves long and short term but there’stoo much short term right now.

Is the concept of ethical business taking off ?In Australia there has been some very

serious crisis in corporations and govern-ment. There’s a lot of talk about ethics. Iwas asked if it was a sea change and I saidit was more like a tidal movement. Waittill the stock market picks up again! Thosewho want to engage in governmentreform have an opportunity; hopefullyeach time there is a scandal we canimprove a little bit. But there’s a tempta-tion to go the other way when the marketimproves. Ethics in business is a long termgame.

ETHICS

Ethics comes when business justifies itselfBy Andy Carling

Financier Bernard Madoff (R) exits Federal Court in New York.

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The Open Data Institute (ODI), which isa collaboration between businesses, entre-preneurs, researchers, government andsociety, will officially open on 4 Decemberafter receiving an investment of $750,000from the Omidyar Network.ODI was founded by the “father of theweb” Tim Berners-Lee and Professor NigelShadbolt, Professor of Computer Scienceat the University of Southampton. Thenon-profit and independent institute wasannounced in 2011 by the UK govern-ment, which has put £10 million in fund-ing.The organisation aims to develop the ideaof open data and also generate new ways tobe used, through research and as a businessincubator.Besides the money obtained from theBritish government, the ODI has received

a $750,000 donation from OmidyarNetwork, which is a 'philanthropic invest-ment firm' set up by eBay founder PierreOmidyar. When both creators presented their pro-posal, explained that open data “will helpthe public sector to use its own data more

effectively. Working with private compa-nies and universities, it will also developthe capability of UK businesses to exploitopen data, fostering a generation of opendata entrepreneurs.”And they were right. According to a reportpublished by Deloitte, country's

gov.data.uk site, based on open data, hasmore daily visits than both data.gouv.fr inFrance and data.gov in the US. The docu-ment also says that between January 2010and September 2012, demand for opendata on data.gov.uk, has grown by 285%.For those who are worried about privacyon a “database state”, where only the pow-erful have access to it, ODI said that theinternet and the web “have democratiseddata”, which will be distributed as “a newpublic good, a new economic and socialresource.”Omidyar Network policy chief MartinTisné said in a statement that the ODI"will unlock supply, generate demand, andcreate and disseminate knowledge toaddress local and global issues."ODI's offices are based in Shoreditch andwill attract local tech start-ups that arealso interested in open data. Currently, theorganisation is supporting four start-ups:big data firm Mastodon C, transportationapp provider Placr, house-hunting serviceLocatable and company filings repositoryOpen Corporates. NR

Open Data Institute opens its doors in UKBritish government has put £10 million in funding for the project

As the Internet and technologiesevolve, the number of risks is increasingand users want to know what is hap-pening with the data they share onsocial sites, with their mobile applica-tions or in other kind of online services.Due to the significant importance ofdata protection for all Europeans,including businesses, companies andcitizens, the European Commissionpresented in January its proposal for areform of the data protection law, whichis not completely accepted by all stake-holders.

The proposal consists of a GeneralData Protection Regulation (GDPR)as well as a Directive, and both had gen-erated several debates, discussions andquestions since their presentation at thebeginning of the year, explained Jan-Phillipp Albrecht, MEP andRapporteur of the GDPR, during the3rd Annual European Data Protectionand Privacy Conference in Brussels.

“In Europe, data protection is a fun-damental right and it's here to stay”, hesaid, adding that the new legislationmust “be adjusted to the new challengesof the digital age.” Albrecht also high-lighted that the GDPR will be clearand simple, based on previous rules togenerate harmonisation withinMember States.

The US Ambassador to the EU,William E. Kennard, also welcomed thenew legal framework, by saying thatboth the US and the EU share twoimportant values: privacy protectionand the free flow of data. Besides, this isthe perfect time to work towards a sin-gle digital marketplace, "we have an his-toric opportunity, policy makers onboth sides of the Atlantic to work toget -her to find common success", he stated.

But the welcoming was followed bycomments considered “controversial” bythe attendants. Kennard revealed thatthe US is concerned “to see that thedraft regulation gives broad authority tothe Commission to unilaterally pre-scribe technical standards for data pro-tection (delegated and implementing

acts), without the full participation ofindustry interests.”

According to him, “government-imposed standards often fail to keep upwith technological developments andtherefore have a tendency to slow downinnovation.” The draft directive couldhave negative consequences on the EUMember States, the US and othercountries, but this is not “the intent ofanyone”, he continued.

Giving some examples, the Amba -ssador explained that the requirementof explicit consent of consumers is notfeasible and that the implementation ofthe so-called Right to be Forgotten(article 17) could lead to “moral hazard,where defaulting parties demand thattheir credit histories be deleted, puttingthe European financial system at risk.”

Despite his point of view, Kennardstated that the US wants to work withthe EU to achieve “global interoperabil-ity of data protection” and provide jobs,growth and good conditions for busi-nesses to innovate in a global market-place.

Christopher Graham, UK Infor -mation Commissioner, was also very

clear with his words and said the regu-lation “it's sometimes over-prescribedand over-detailed but it's a modern textof best practice.” He added that BritishICO welcomed that the Commission“appears to be listening” and highlight-ed that legislation should be concernedwith “privacy, not process”. Besides, dataprotection officials shouldn't be consid-ered as “ knee jerk enforcers.”

Viviane Reding, VP and Com -missioner for Justice, FundamentalRights and Citizenship, defended theimportant role of the proposal. "Gooddata protection rules are good forgrowth and society", she said, and addedthat one clear rule is needed to beimplemented and create businessesacross all Member States.

"Sanctions are needed to be the biteof the rules" and "business need toknow responsibility is needed whenhandling data”, Reding said.

Maybe speakers don't agree in theway the new legislation will beenforced, but all of them concluded thatdata protection rules are needed toobtain citizens' confidence and to boostinnovation in Europe.

By Nerea Rial

16NEW EUROPE9 - 15 December, 2012 TECHNOLOGY

ODI aims to develop the idea of open data and also generate new ways to be used

Commissioner Redin affirmed that the GDPR can generate growth and businesses

Yahoo announced on 4 December the acquisition of thefive-person video chat company OnTheAir, the second dealsigned by new Chief Executive Marissa Mayer to reinforcefirm's mobile capabilities. OnTheAir was launched ninemonths ago and allows friends chat and content producerswebcast single or split-screen interviews. This tool could bethe best player to compete against Google Hangout orcould also give the possibility to build new mobile commu-nication apps.The start-up was acquired for an undisclosed sum, but afterthe deal, shares of Yahoo were up 1.5% at $18.82 in trading.Its five members will be from now on working with Yahoo'smobile group. They are: Erik Goldman, former Facebookintern and Apple iCloud employee; Cooliris founding teammember Josh Schwarzapel; former Meebo interactiondesigner Abel Allison; Gmail interaction engineer DanHopkins; and Apple OS X engineer Mike Kerzhner. “We are excited”, says a post on their site. “We had dreamsof building a company that made a difference in the dailylives of millions. Our pursuit was challenging: We put inlate nights together. We debated intensely. We worked likecrazy to build a product we were proud to put our name on.”The acquisition marks the second small, mobile-orienteddeal since Marissa Mayer, who worked for Google before,became CEO in mid-July. In October, Yahoo acquiredStamped, a New York-based mobile start-up that allowsconsumers to share information about their favouriterestaurants and music on their smartphones. The strongpresence of Facebook and Google on the mobile market isurging Yahoo to be at the same level, and instead of creat-ing a new app, it decided to buy it and be in the “battle field”more rapidly. CEO Mayer explained that her top priority isto create a coherent mobile strategy for Yahoo and that sheintends for at least half of the company's technical work-force to be working on mobile products.Her main objective is to revive the firm and also give it anew direction. The decision of signing a deal with theChinese e-commerce firm Alibaba in September offeredYahoo extra budget to finance these acquisitions or hire newtalents in the way to growth. NR

Yahoo acquiresvideo chat start-up

OnTheAir was launched nine months ago

Data Protection Regulation welcomed, but...The US are concerned about Commission's “broad authority”

17NEW EUROPE9 - 15 December, 2012TECHNOLOGY

Commission proposes web accessibility for disabled peopleOn the International Day of People withDisability, the European Commission hasproposed new rules on standardisation ofpublic sector bodies' websites to makethem accessible for all European citizens.

From the end of 2015, the proposal fora Directive on the accessibility of thoseweb pages will introduce new accessibili-ty features for 12 different types of sites,such as social security and health ser-vices, job searches, university applicationsand issuing of personal documents andcertificates.

Besides, the rules will define “web acces-sibility” and governments would beencouraged to apply them across all theirservices, not only the mandatory list.

Europe's 80 million citizens with dis-abilities and 87 million aged over 65 willbenefit from these rules. For instance, visu-ally impaired people will hear descriptions

of images and the hearing-impaired willsee written captions for audio files.

European Commission Vice President

Neelie Kroes expressed the importance tohave “equal access to government servicesonline” and stated that the proposal will

make this a reality. “It would create bettermarket conditions, more jobs, and make itcheaper for governments to make theirwebsites accessible”, she said.

Ioannis Vardakastanis, President of theEuropean Disability Forum affirmed thatthe new rules will ensure citizenship rights.This is the “first step to the removal of allbarriers to access internet products and ser-vices in the single market”, he stated.

In addition, the proposal will improvethe internet experience of all users anddevelopers will have the opportunity tooffer their products and services across theEU without extra adaptation costs andcomplications.

Despite 21 Member States already havenational rules on web accessibility, itsestablishment is still slow. Therefore, allcountries would have to put national rulesand regulations in place by 30 June 2014.

In 2013 the number of mobile phone sub-scriptions will be 7.5 billion, overtakingthe world’s population, according to ananalysis which Ericsson made to globaltelecoms networks.

The study reveals that 600 millionmobile subscriptions will be added thisyear to the current number, meaning atotal figure of 6.6 billion users. It's impor-tant to highlight that in the third quarterof this year, 40 million mobile subscrip-tions were added in China alone.

If this increase continues, mobile phonepenetration will average more than 90%across the world., says the Swedish tele-com, which also affirms that these“signups” will continue rising up to 9.6billion by 2018.

Due to the rapid adoption of internetservices for mobile phones, the volume ofdata traffic is today the double, if we com-pare it with last year's figure. Besides, over40% of the devices sold around the worldin the third quarter were smartphones,such as the Samsung Galaxy S3 or Apple'siPhone 5, up from 30% last year.

Mobile traffic, like video, is also expect-ed to grow 12 times between 2012 and2018. The “traffic mix of applications dif-fers between device types, but one findingis that video is the biggest contributor to

mobile traffic volumes”, explains the doc-ument.

“Mobility is becoming an increasinglysignificant part of our daily lives; wealways have devices within arm’s reach,allowing us instant access to information,entertainment and social interaction”,explained Douglas Gilstrap, senior vice-president and head of strategy atEricsson.

Ericcson’s analysis suggests that in 6years, almost all handsets in WesternEurope and North America will be smart-phones, but only around one-third ofhandsets for Middle East and Africa andAsia Pacific.

China was the number one this year innumber of new subscriptions, followed byBrazil, with 9 million, Indonesia with 7million, and the Philippines with 5 mil-lion.

LTE mobile networks, or 4G, will alsoincrease its users. “LTE is the fastest-developing system in the history ofmobile communications in terms ofbuildout and uptake. LTE is currentlybeing deployed and built out in allregions, and total subscriptions willincrease from around 55m at the end of2012 to an estimated 1.6bn in 2018,” saysthe report.

Mobile subscriptions to pass world population

The Commission will introduce new accessibility features for 12 types of sites

Joaquin Almunia and Jon Leibowitz,the top European and US antitrust offi-cials who are leading separate investiga-tions over Google, met on 3 Decemberto discuss about the search engine andother cases.According to a EU official familiar withthe matter, they talked about “a fullrange of issues”, including “their inves-tigation of search giant, Google andcompanies’ alleged abuse of standard-essential patents”.The FTC and the EuropeanCommission have been investigatingindependently whether Google abusedits dominance in Internet search tofavour its own services and harm com-petitors. The US agency is expected tomake a final decision by the end of theyear, but small groups of lawyers andlobbyists believe that Google has con-vinced Jon Leibowitz to stop enforce-ment actions.European Commission fear that theAmerican firm could succeed in con-vincing FTC's regulators, somethingthat could harm the European case.However, Google’s enemies stated thatthey will continue to fight in the USStates even if Leibowitz will not take

up their cause. Months ago, Almunia called on Googleto make changes to how its searchengine works, or face formal antitrustenforcement action. In the past, thisdecision forced Microsoft to pay bil-lions in fines, besides facing legal feesand damaging its reputation.Meanwhile, Google's CEO Larry Pageand FTC officials met last week inWashington, D.C. Leibowitz won aninside-the-Beltway “battle” to run theUS antitrust investigation of the searchengine rather than the Department ofJustice.Rumours related with the meetingbegan one week ago, but FTC declinedto confirm its existence. A spokes-woman only affirmed that Leibowitzwas in Europe on several matters butdeclined to ensure the existence of suchappointment with CommissionerAlmunia.Google spokesman Adam Kovacevichsaid that the company will "continue towork cooperatively with the FederalTrade Commission and EuropeanCommission and are happy to answerany questions they may have.”

NR

EU, US antitrust officials todiscuss Google investigations

European Competition affairs Commissioner Joaquin Almunia |EPA/OLIVIER HOSLET According to Ericsson, by 2018 mobile subscriptions will be 9.6 billion

18NEW EUROPE9 - 15 December, 2012 ARTS & CULTURE

“Le Capital”, the new film from CostaGavras unveils the aspects of capitalism,through the perspective of a politicised di-rector, for a world where the only ethicalvalues are money and glory. After all, «LeLuxe est un droit» (Luxury is a humanright) and 10,000 layoffs big profits andbonuses for a banker, who holds the powerto determine the fate of thousands of fam-ilies. Gavras doesn’t show the humanitarianconsequences from such an act on purpose,in order to underline the complete indiffer-ence of capitalism for the unknown “pro-ductive unit.” One of the most powerful andtragic scenes in the movie, is when MarcTourneuil (Gad Elmaleh) stands in front ofa megascreen, which shows thousands of hisemployees standing clueless and excitedpreparing to cheer for him. “Trust the Pres-ident and the Government which doesn’treact!” the perfect combination for a gamewhich is taking place behind their back,until the day the situation turns around forthose who pull the strings too....

On a recent trip to Brussels Gavras satdown with New Europe to discuss the film,Europe, Greece and the ins and outs of'Capital'ism, the interview follows.

Your movies are dealing with issues de-riving from political and social life, underthe prism of a protest. In your new movie“The Capital”, based on the book ofStephane Osmon, we see an everyday mantransformed into a ruthless capitalist, assoon as he comes into contact with power.Did you refer to certain figures or facts, asyou did in “Z”?

No, not exactly. Even though the movieis based on real people, they are not historicentities. I am referring to certain people butI don’t mention their names.

2. Was it easy for a man like you, whocomes from a different ideological back-ground, to understand such neo-liberal is-sues often found at the core of big banksand co-operations? Did economists andpeople who are related with those particu-lar sectors, help you out?

3.That is a tough question. I did a lot ofresearch and discussed with many peopleworking in big businesses and great banks.They welcomed me but they didn’t give meall of the information. However, I found theinformation I needed, from real bankersworking mainly in Paris. They welcomedme much easier, but obviously they didn’ttell me all of their secrets.

According to the American writer MarkTwain “happy people should know that themore the glass is full, the more easily spills.”Is there any correlation between the quota-tion and the protagonist of the movie? Is ithappiness or vanity the feeling that some-one has when he reaches to the top?

We all aim to reach to the top, but it de-

pends on the means we use. In order toreach the top and stay there, someone willuse all of the unethical means available.During his presence at the top, the share-holders will decide if he is going to staythere. If they are not satisfied, they will sim-ply change him.

According to your opinion, what is themost suitable punishment for the peoplewho proliferate at the expense of other peo-ple lives, and what kind of punishmentshould be presented in the movie in orderfor the protagonist and the viewers reachcatharsis?

I’m not talking for punishment, becauseI’m not a judge. Moreover, I avoided usingthe ancient Greek tragedy element ofcatharsis. My purpose in the movie was toimpose some questions. I wanted the viewerto leave the theater troubled and not happy.

The screenplay from your previous movie‘The Axe’ (Le Couperet) was inspired bythe incident with the unemployed and thehostages in Komotini, Greece. However, atthe end of the film, the serial killer becomesendearing to the viewer. Is it the feeling ofunfairness and the need to deliver justicethat makes us justify such extreme and des-perate acts?

Violence cannot be justified with any par-ticular way. The film makes us think on theissue of violence and unemployment. Theunemployed is trying to find a job and havea normal social life. Apparently, the time-frame of the movies should be reversed and

first release ‘The Capital’ in which the fir-ings are taking place and then the ‘Axe’which presents the consequences.

Is it possible for a movie which doesn’tmake a commercial success when it’s re-leased to become popular afterwards, be-cause of the fact that its theme is in thelimelight?

It happened many times in Cinema. Peo-ple are interested on subjects relevant withthe current events.

As a director, do you intervene in yourown plot, as you might do in someone else’sscreenplay, or do you leave it intact?

Of course [I intervene], it’s the same.

Do you believe that the crisis we live rightnow is the result of a generalised moraldegradation, which is caused by money?

It was created most definitely by themoney, but money is simply an object. Inreality people led us to the crisis; the moneyis just the mean. It’s the old myth of the Antand the Grasshopper; most of us lived likegrasshoppers instead of ants. This didn’thappen only in Greece but everywhere else.

In the international but also the nationallevel, the dominant opinion is that fortoday’s situation in the country the blameis mainly to the mentality of the Greek peo-ple. Do you agree or disagree?

I partially agree. But the main fault lies inthe Greek politicians. The common peoplehave responsibility, as far as concerns the

election of the politicians. But education isanother reason. Since you are a teacher, youshould know better today’s deficits. The Eu-ropean Union has a tremendous responsi-bility, too. They didn’t care for years. Theylet debt keep rising. They corrupted politi-cal figures in order to continue their work:Tsohatzopoulos, Voulgarakis…Some ofthem are already in jail.

Do you believe that simply up until nowwe were not able to find the right person(the Messiah) who will manage to save usfrom the economic crisis, which spreads allaround the world? Is it an issue ofleader/regime/political system/politicalparty/people’s mentality?

It is all of the above.

Do you believe that Greeks stands unitedagainst the crisis, we live as a country?

No. There are those who perceive Greeceas their motherland and those who chosemoney instead. The last are the ones wholive in Switzerland. And as my grand-mother used to say: “the one who is fulldoesn’t believe the one who is hungry.”

What is your opinion about the rise ofNazism in Europe in general, and aboutGolden Dawn in specific.

I don’t believe that Greeks are Nazi. Ourfatherland always had its barbarians, butthey were always a small minority. Theymultiplied now because of the politicians. Itis ridiculous to believe that Golden Dawnwill give an answer to the crisis.

An unknown threat of our moderntimes?

Immorality.

In one of your previous interviews youstated that the reason you don’t shootmovies in Greece is because you don’t wishto become judgmental about your owncountry.

No. Once I wanted to make a story aboutKoskota, but when I found out the realstory behind I strongly believed that itwould be a bad advertisement for Greece.That is why I didn’t want the story to travelaround the world with my movie.

However, you said, that the emotionalburden it’s the thing that makes you choosethe themes of your movie. In such a histor-ical moment, don’t you feel the need to em-phasise the good side of Greece and itspeople, as a counterbalance to the interna-tional image of the country.

You are right. I am trying to make such amovie. However, the film has a story and Idon’t want to shoot it right now, when thecountry lives in misery.

Voula Kagiasa is an educator based in Brus-sels who's postgraduate studies are in The-ater practice and theory, she is a freelancewriter for New Europe.

EUROPEAN CINEMA

Costas Gavras in Brussels By Voula Kagiasa

19NEW EUROPE9 - 15 December, 2012BRUSSELS AGENDA

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RESTO BITES't Ganzeke A.Vandepeereboomplein 5, Ieper057 200 009ganzeke@telenet.beIf you fancy a change from Brussels' Christmas market youshould head to Ypres, just over an hour away, which boasts ter-rific festive attractions of its own.A terrific place to grab some delicious food is this cosy restaurantwith view on the Cloth Hall and the cathedral. It has an exten-sive and affordable menu, including a vast range of snacks. You enjoy your meal while taking in the collection of authenticlithographys which adorn the walls and the 300 geese scatteredaround (the restaurant's name means 'little goose').Owner Bea Leeman, formerly head cashier at a local theme park,had no experience of the restaurant trade before she took over 12years but you wouldn't know it judging from the fantastic qual-ity and range of the cuisine. Special mention too for Bea's hard-working staff for whom 'service with a smile' comes naturally.It seats 140 with a terrace seating 64, plus an upstairs private func-tion room, and offers something for all tastes, from scrumptioussteaks to perfect pancakes. Open daily from 10.30am 'til late andclosed Mondays. 't Ganzeke attracts lots of guests, including Brits,visiting the nearby WW1 cemeteries but, even if you do little elsein Ypres, it is well worth the relatively short excursion from Brus-sels. Highly recommended.

Meet a GreeterBrussels has a constant flow of people, tourists, stu-dents and expats working or visiting for a short while.How can they all get the best out of their time in theheart of Europe? Guidebooks are an obvious source ofinformation and ideas, but there’s a new concept in tow,the Brussels Greeters.The idea began in New York in 1992 and has spread toa dozen cities.Part of a global network, the Brussels Greeters are lo-cals who can show you around the city and let you intoits many hidden corners and history. A Greeter is nota professional guide but a volunteering ambassador ofhis/her city, without charge. In fact, the Greeter paysfor all their expenses, transport, food, drinks, entrancefees and are strictly forbidden to accept a cent, for anyreason.Greeters are volunteers but the Greeters organisationis a professional one under the umbrella of the activi-ties of association Tourisme autrement. The network

Get your chips outWorld Poker Tour, Viage Casino11 – 18 February 2013The World Poker Tour is making its first visit toBenelux next year, being held at the GrandCasino Brussels Viage from the 11th until the18 of February 2013.The buy-in for the main event is €1,500 + €150.Apart from the main event there are varioussatellite tournaments and side events held dur-ing the WPT National Brussels. The buy-in forthe satellites and various side events ranges be-tween €50 and €750, entry fees included. A satel-lite for WPT National Cannes, that will be heldfrom 11 - 15 April, will also be organised. Thebuy-in will be €225 + €25.The contest will be televised and is expected tobring in poker’s biggest names as well as localgamblers, wanting to see how they fare againstthe very best.

Zounds!Zornik, Ancienne Belgique20:00, 15 DecemberThe legends of the Brusselsscene play a pre-Christmansconcert in one of Brusselsfinest venues, where the ambi-ence brings the music alive.Formed in 1999, the band hasdone well, with a strong fanbase in Belgium and Nether-lands. They celebrated their10th anniversary at the AB,they return with anotheralbum just completed ‘Less >More’ they’re going to playnew stuff and old hits.Brussels has a lively local musicscene, far better than you canexpect from such a small city,so check out some of the bestmusic the city has to offer.

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is not pursuing a commercial aim and is supportedby public institutions and private sponsors.The project is an alternative form of tourism. Its in-tention is to enable authentic meetings betweenBrussels’ visitors and inhabitants. It is based on theprinciple of mutual respect, with an emphasis onhospitality, accessibility and multicultural exchange.It fosters the discovery of Brussels region, throughthe eyes, habits and knowledge of the inhabitants,who, for a few hours, become volunteer hosts.Anyone wanting to find a local guide, or become onecan find all the information they need on www.brusselsgreeters.be

MONTENEGRO|TOURISM

BBI outlines projectBouygues Batiment International (BBI), the internationalbuilding division of Bouygues Construction, recentlyformed a partnership with Integrated Property ContractorServices (Montenegro), a wholly-owned subsidiary of in-vestment firm Future Capital Partners (FCP). Both sidesinked a memorandum of agreement which envisaged thatBBI will construct a luxury development in Montenegro,Montenegro Times reported. “Montenegro’s potential andFCP’s experience and skill in financing and managing proj-ects like this, made this a highly attractive opportunity forBBI,” Bouygues Batiment International Development Di-rector Christophe Petit said.

MONTENEGRO|ECONOMY

Growth seen at 0.5%At a recent session of the cabinet, the government of Mon-tenegro adopted the Analysis of Macroeconomic Trendsand Structural Reforms in 2012, which corresponds withprevious prognosis that states the economic growth of thecountry of 0.5% as of this year. The economic and financialactivities were gravely affected due to the negative economictrends in the region and Europe, as well as bad weather con-ditions in the first quarter of this year. As a result, the econ-omy declined to 2.4% in January-April of this year.

BOSNIA-HERZEGOVINA|VISAS

BiH may not abolish visasBosnia-Herzegovina Presidency Chairman Nebojsa Rad-manovic recently stated that visa regime might not be abol-ished. The statement was made when commenting on thepossible abolition of the visa-free regime for the citizens of theregion, including Bosnia and Herzegovina, Fars news agencyreported. According to him, abolition of visa regime for BiHwould punish not the politicians of this country but theBosnia-Herzegovina citizens who actually don’t deserve it.

CROATIA|EU AFFAIRS

Fule holds EU talksDuring his visit to Croatia, Commissioner for Enlargementand European Neighbourhood Policy Stefan Fule had meet-ings with Croatian President Ivo Josipovic, Prime MinisterZoran Milanovic, Deputy Prime Minister Neven Mimicaand President of the Parliament Josip Leko. He also attendedthe 4th Balkan Civil Society Forum. At the meetings, Fulestressed the need for the country to make certain final re-forms in order to be fully prepared for its EU accession. Fulewelcomed the strong commitment of Croatian partners tomove the process forward. Fule said he is confident thatCroatia will successfully complete the ratification process re-lated to its EU membership. “We expect significant progressin the coming months, in view of our next Monitoring Re-port, to be published in the spring. I am confident that Croa-tia will make it and will be able to assume the obligations ofmembership on the 1st of July next year,” he said.

CROATIA|PAPER

Chinese firm to build millChina International Investment Stock Ltd in collaborationwith Zagreb based PAN Papirna Industrija announcedplans to invest $415mn in the construction of a paper millin Croatia, Javno reported. Winston Chia, CEO of theChinese group, said in Zagreb that the paper and cellulose-making facility and a geothermal plant to supply power willbe built in Slatina, west Croatia. The Qingdao-based firmwill on 70% stake in the investment while PAN Papirnawill own the rest.

20NEW EUROPE9 - 15 December, 2012

ENLARGEMENT

European Bank for Reconstruction andDevelopment (EBRD) recently an-nounced a €10mn credit line to the localsubsidiary of French banking group So-ciete Generale Montenegro (SGME) foron-lending to small and medium enter-prises (SMEs), reads a press release.

The loan to SGME is being extendedunder the EBRD's Western Balkansand Croatia Financing Frameworkworth €250mn. The framework was setup to provide financial institutions inthe region with a full range of financialproducts, including senior debt facilitiesand SME financing. It should be notedthat SMEs comprise the vast majority

of the private sector in Montenegro.These companies require loans at longor medium-term tenors to support thecountry’s economic recovery. Under thecredit line, the average loan size will be€250,000 and the average tenor will beno shorter than three years. For thiscredit line the EBRD has asked SGMEto increase the proportion of loans itmakes to small and medium businessesoutside Podgorica.

EBRD Financial Institutions Directorfor the Western Balkans and CroatiaHenry Russell said the EBRD is pleasedto work with Societe Generale BankaMontenegro in bridging the funding gap.

He said that small and medium busi-nesses are crucial for recovery of Mon-tenegro and will prosper if they get thecorrect kind of financing. He added thatthe Bank offered the credit line amid timewhen several lenders in Montenegro arereluctant to lend to SMEs beyond theshort term. Branka Pavlovic, CEO of So-ciete Generale Banka Montenegro is verypleased to continue its successful cooper-ation with the EBRD. “We are expectingto continue with this growth, as small andmedium enterprises already recognise usas a reliable partner ready to help themmaximise their chances of further devel-oping their business,” he said.

EBRD offers €10m to smallbusiness in Montenegro

MONTENEGRO|LOAN

Russia discusses loan, South Stream with Serbian officialsSERBIA|DIPLOMACY

Serbia's Prime Minister and Minister ofthe Interior Ivica Dacic and RussianDeputy Prime Minister Dmitry Rogozinrecently agreed in Belgrade that co-oper-ation between the two countries is im-proving further, Beta news agencyreported. At the meeting, both sides areeyeing options for greater presence ofRussian investments, the economy andbanks in Serbia and joint participation ofcompanies of the two countries on the

market. During talks with to SerbianPresident Tomislav Nikolic, Rogozin af-firmed that Russia has approved afavourable loan to Serbia.

In turn, Nikolic said that his country isinterested in co-operation with Russia inmany areas. The interlocutors noted thatthe project of South Stream gas pipeline,which should be completed by 2016, is animportant step in the economic coopera-tion. Nikolic also desires to advance Ser-

bian-Russian co-operation in other eco-nomic fields beyond the energy sector. Healso said Serbia is prepared to secure hugequantities of agricultural products for theRussian market. Meantime after talkswith Rogozin, Serbian Defence Ministerand First Deputy Prime Minister Alek-sandar Vucic said that Serbia and Russia"will draw up an analysis of the possibili-ties for improvement of military and eco-nomic co-operation".

EU urges Bosnia to pursue reform on minoritiesBiH|HUMAN RIGHTS

During a recent visit to Sarajevo, EUCommissioner for Enlargement StefanFule said that he was impressed with theprogress made in the country on many as-pects of Bosnia-Herzegovina's EU acces-sion efforts. However, he expressedconcern over the official exclusion of Jew-ish and Roma minority groups from high

political office, Fars news agency reported.The EU official said that Bosnia-Herze-govina needs to implement a court rulingbanning political discrimination againstJews and Roma before it can join Europe.It was recalled that in 2009 EuropeanCourt of Human Rights upheld the com-plaints of Dervo Sejdic, a Bosnian Roma,

and Jakob Finci, a Bosnian Jew, whoprotested a law holding that only ethnicBosniaks, Serbs and Croats could serve aspresident or in the upper house of Parlia-ment. By November 2011, Bosnia-Herze-govina had to abide the court's ruling asper European Convention on HumanRights but failed to meet the deadline.

A skiing resort near Kolasin, Montenegro. EBRD recently announced a €10mn credit line to support small and medium enterprises in the country.

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21NEW EUROPE9 - 15 December, 2012EASTERN PARTNERSHIP

GEORGIA|DEFENCE

Changes in defence systemAt a recent meeting, Chairman of the Defence and Secu-rity Committee, Irakli Sesiashvili discussed the cases thatrequire a reinvestigation. He outlined the measures to beadopted by the Defence and Security Committee and theMinistry of Defence. The Ministry of Defence decided tocreate a committee that will revise the legality of soldiers’dismissals. This decision was welcomed by Sesiashvili whorequested the Defence Ministry and upcoming committeeto ensure a transparent revision process to show that thecommittee worked fairly and selected the worthy people,Civil Georgia reported. Sesiashvili also noted that the dig-nity of many soldiers was flouted and it requires immedi-ate attention. He assured that efficient troops will not becreated unless the soldiers are given due respect.

GEORGIA|ENERGY

Electricity tariffs downAt a recent government session, Prime Minister BidzinaIvanishvili said that halving tariff for household electricityand gas consumption is not possible but will be reduced by10% in 2013, Civil Georgia reported. He stressed that halv-ing of tariffs was not part of the Georgian Dream’s pre-election pledges but said, “We have been talking about itduring discussions and possibly it was an exaggeration.” Hespecified that reduction of tariffs would take place in thebest case from the New Year or later. The government isstill evaluating the mechanism through which it would bepossible to reduce the tariffs. Households in Tbilisi pay50.62 tetri per cubic meter of gas. Tariffs are different in thevarious provinces. Since 2006 a three-step electricity tariffscheme is effective in Georgia and rates vary for consumersin Tbilisi and in provinces.

GEORGIA|INVESTMENT

Israel Business forum 2013The Government of Israel in collaboration with the Min-istry of Economy of Georgia hosted a business forum “Is-rael Business in Georgia – 2013” in Tbilisi, Civil Georgiareported. The forum took place on December 7-9. Israelicompanies which conducted 50 investment projects inGeorgia in real estate, tourism, agriculture, communications,aviation and others sectors, were presented at the ceremony.President of the Georgian-Israeli Business Chamber ItzikMoshe and representative of the Chamber Ia Chantladzesaid this is not the first forum for the Business Chamber.Moshe said that the format of the forum is different thisyear. He informed that 50 investment projects, whichshould be implemented in Georgia, were presented. Theprojects are worth $250mn of investment. “Some $300mnwas received from Israel in 2004-2008. And that's just pri-vate investment. It doesn't include tender, as well as largeamounts that come from the World Bank and other insti-tutions,” Moshe said.

AZERBAIJAN|INVESTMENT

Azeri-Polish co-operationPolish Information and Foreign Investment Agency (PAlilZ)Iwona Chojnowska-Haponik recently stated that aircraft andautomotive industries are on advanced level in Poland. Theaim of PAIiIZ is to boost the inflow of foreign direct invest-ments in Poland, attracting overseas investors to place theircapital in Poland, news agencies reported. She said that thegovernment has expressed interest in attracting foreign, in-cluding Azerbaijani, investors for co-operation in the afore-said areas. She also outlined electronics manufacturing, theagricultural sector, the food industry, in the heavy chemicals,coal power and the scope of alternative energy as promisingareas of possible activities for Azerbaijani companies.

Azerbaijani Prime Minister Artur Ra-sizade met with a visiting Turkish dele-gation led by Chairman of the TurkishGrand National Assembly Cemil Cicek,news agencies reported. At the meeting,Rasizade noted that the Azerbaijani-Turkish relations develop at high level onthe basis of friendship and brotherhoodprinciples, underling the importance ofbilateral visits.

Citing Turkey as a neighbour of Azer-baijan, Rasizade said relations betweenthe two countries are rooted to ancienthistory and there are ample opportunitiesto develop them further. Stressing inten-sive co-operation in all spheres, Rasizadehighlighted the role of inter-parliamen-tary co-operation.

Speaker of the Turkish ParliamentCemil Cicek said he witnessed a great de-velopment process going on in the coun-

try. "This development may seem normalfor local resident, but guests coming toyour country are really amazed of thesechanges in a positive sense," he said. Heproudly claimed that Azerbaijan is ashining star of the whole region, wholeCaucasus, and it will keep shining in thefuture.

The Turkish speaker also stressed high-level relations between the two countriesand called on for strengthening of stabil-ity and co-operation in the region. Cicekalso spoke about successful developmentof bilateral relations between Azerbaijanand Turkey in all areas including Inter-parliamentary.

Referring to the Armenian-Azerbai-jani Nagorno-Karabakh conflict, the sidesexpressed hope for early peaceful solution.

Azerbaijan’s President Ilham Aliyevwho also met the delegation, hailed the

role of Turkey in the ongoing globalprocesses. He emphasised the importanceof Azerbaijan-Turkey unity for the ex-pansion of regional co-operation. Aliyevnoted that Azerbaijan-Turkey co-opera-tion in political, economic, energy, trans-port, commercial and other fieldscontribute to the development of thewhole region.

Aliyev also stressed the role of theTurkey-Azerbaijan High-LevelStrategic Co-operation Council forthe development of bilateral co-oper-ation. Aliyev said Turkey and Azerbai-jan have close Inter-parliamentary tiesand always support each other withinthe various international organisations.He expressed hope that visit of theTurkish delegation will give anotherimpetus to the expansion of bilateralrelations.

Baku, Ankara to boost tiesAZERBAIJAN|DIPLOMACY

Azerbaijan's President Ilham Aliyev, left, and Turkey's Prime Minister Recep Tayyip Erdogan in Istanbul, Turkey, 22 December 2010. Aliyev recently said

co-operation in political, economic, energy, transport, commercial and other fields contributes to the development of the whole region.

Tbilisi expects US to normalise ties with RussiaGEORGIA|DIPLOMACY

US Deputy Assistant Secretary of State forEuropean and Eurasian Affairs EricRubin recently paid a visit to Georgia. Hehad meetings with Georgian governmentofficials, non-government officials andother international representatives, TheMessenger reported. During talks withGeorgian Prime Minister Bidzina Ivan-ishvili at a meeting at the Georgian StateChancellery behind closed doors, Rubindiscussed relations between Tbilisi andMoscow.

After the talks, Ivanishvili expressed

hope for the US assistance in bringingGeorgian-Russian relations back to nor-mal. He noted that in past 20 years, US re-mained a true partner for Georgia. Thepremier also discussed with Ruben bilat-eral ties between Georgia and US andhopes to intensify future relations betweenthe two friendly countries. “This was awarm and friendly meeting. I thankedRubin for the assistance the US is render-ing us,” he said. Ivanishvili assured that thenew Georgian administration would doeverything to further promote relations be-

tween Tbilisi and Washington. He alsosaid that US will support Georgia in theirpath to integration with the West. In turn,Rubin also expressed the readiness of USto continue its supportive policy and helpthe Georgian people in meeting its goals.“We are completely committed to sup-porting Georgia, the Georgian people andthe Georgian government in achieving theaspirations it set for itself,” he said. He re-iterated support of Washington for Geor-gia’s territorial integrity and positions in theGeneva Talks.

Baku offers continued support to KarachiAZERBAIJAN|DIPLOMACY

A delegation of Pakistan headed by thedeputy of lower house of parliament- Pak-istani National Assembly Fazal-ur-Rehman recently paid a visit to Baku, thedelegation was warmly welcomed byAzerbaijani Foreign Minister ElmarMammadyarov, news agencies reported.

In course of talks, the sides discussed co-operation between the parliaments of thetwo countries and the contribution of thiscooperation in the relations between thetwo countries. They stressed the need todevelop ties between the two countries inseveral sectors. Mammadyarov thanked

Rahman for recognition of Khojaly geno-cide by Pakistani Parliament. He assuredthat Azerbaijan will continue to supportPakistan. Other topics discussed were theIslamophobia tendencies in the world, theimportance of strengthening dialogue andsolidarity among the Muslim countries.

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EASTERN PARTNERSHIP

BELARUS|UNIFORMS

Belarus supplies Russian armyBelarusian companies will make military uniforms and ac-cessories as part of Russian defence orders. The relevantagreement was reached by the Belarusian state light indus-try concern Bellegprom and the Russian light industrycompany Roslegprom at a meeting in Moscow, the Belleg-prom press service reported. Bellegprom Deputy Chair-woman Lyudmila Tyaglova and Roslegprom PresidentAlexander Kruglik discussed the need to form a commonBelarusian-Russian register of companies involved in man-ufacturing military uniforms and accessories as part ofRussian defence orders for the sake of enabling equal con-ditions for Belarusian and Russian manufacturers.

BELARUS|FOOD

Nestle sales restrictedBelarus has restricted sales of the chocolate powder NestleNesquik, representatives of the Belarusian Trade Ministrytold BelTA. The measure was put in place after the USFood and Drug Administration agency published infor-mation about the voluntary recall of the chocolate powderNestle Nesquik from circulation due to the possibility thepowder may contain salmonella. The available informationindicates that the product had been distributed only in theUS, however, the possibility that it may have been tradedin other countries cannot be ruled out, said the BelarusianTrade Ministry.

BELARUS|CUSTOMS UNION

Minsk, Moscow hold talksBelarus President Alexander Lukashenko has held a meet-ing with his Ukrainian counterpart Viktor Yanukovychwithin the framework of the session of the Commonwealthof Independent States (CIS) Heads of State Council inAshgabat on 5 December, BelTA reported. The presidentsdiscussed Belarus-Ukraine co-operation and relations be-tween Ukraine and the Customs Union of Belarus, Russiaand Kazakhstan.

BELARUS|ENVIRONMENT

Belarus to raise €40mnBelarus plans to raise €43.255mn in loans from the Euro-pean Bank for Reconstruction and Development (EBRD)and the Nordic Investment Bank to implement an envi-ronmental project. The environmental project aims to re-duce emissions of polluting agents into water and to expandthe use of renewable energy sources. Belarus Housing andUtilities Minister Andrei Shorets was authorised to holdtalks on the loan agreements. Belarusbank will act as anagent bank of Belarus. It will service the loans provided inline with the loan agreements.

UKRAINE|BUDGET

Imported gas seen at $421The head of the ruling Party of Regions faction in theUkrainian parliament, Alexander Yefremov, said the Verk-hovna Rada has started debating the 2013 draft budgetbased on an average price of natural gas imported fromRussia equal to $417 per 1,000 cubic metres, RIA Novostireported. “As for the price of gas [imported from Russia],the budget is based on $417 [per 1,000 cubic metres]. Thisis the calculation price which exists today,” Yefremov told re-porters in Kiev. The draft budget for next year, which willsee Ukraine continue heavily subsidising gas prices for do-mestic customers despite pressure from the InternationalMonetary Fund (IMF), was submitted to the Ukrainianparliament on 3 December.

On 3 December, Ukraine’s PresidentViktor Yanukovych accepted the resig-nation of Prime Minister MykolaAzarov. Appointed premier in 2010soon after Yanukovych was elected pres-ident, Azarov is to continue headinggovernment until parliament approves anew premier and cabinet. The other 17members of the cabinet also stood down,in line with Ukrainian legislation. Themove comes as a new parliament pre-pares to meet after 28 October legisla-tive elections which raised new concernsabout democratic standards underYanukovych.

Azarov’s resignation sets the stage fora new government to renew negotiations

on a multi-billion-dollar loan pro-gramme with the International Mone-tary Fund (IMF). Ukraine is battling aneconomic slowdown, with its currency,the hryvnia, under pressure in recentweeks. Ukraine has said it wants to tapfunds from the IMF to help it pay offaround $10bn in foreign debts in 2013.

Azarov has strongly opposed elimina-tion of costly subsidies on householdnatural gas prices, a key IMF loan con-dition. His government also failed toconvince Russia to reduce prices on nat-ural gas imports. Kiev has expected theEU to take a more proactive position inregard to the energy dispute, Azarov hassaid. A new cabinet may push through

rises in household gas and heating tariffsonce the weather warms up in thespring.

Ukraine's economy contracted by1.2% in the third quarter of this year, andseveral banks fear the country is headingfor zero growth in 2012.

Ukrainian parliament speaker Volod -ymyr Lytvyn said that a decision on thecomposition of the new governmentcould be taken on 13 December or 14December after the new parliamentconvenes. The presidency explained themass resignation by saying that Azarovhad decided to take up a parliamentaryseat rather than staying on as primeminister.

Government resigns due to economic crisis

UKRAINE|POLITICS

Ukrainian Prime Minister Mykola Azarov and his government resigned on 3 December immediately after approving the next year's budget.

Germany to share innovation promotion solutionsBELARUS|INNOVATION

Germany is ready to share its expertise inpromoting innovations with Belarus,Deputy Ambassador of the Embassy ofGermany in Belarus Peter Dettmar tolda roundtable session on 5 December,BelTA reported. “Germany’s experienceis not an example to follow, but one of theoptions to consider,” Dettmar said.

Chairman of the Kunyavsky BusinessUnion of Entrepreneurs and Employers

Georgy Badei emphasised the need topromote market relations in the sphere ofinnovations. Belarus has many interest-ing ideas that need to be promoted andmaterialised.

According to Deputy Chairman of theBusiness Promotion Council of Belarus,Director General of COOO HenkelBautechnik Sergei Novitsky, the countryneeds to complete a large-scale economic

upgrade program using innovative tech-nologies; therefore the experience ofother countries in commercialising inno-vative solutions will be of great use.

In Belarus the system of promoting in-novations is based on special tax regimesthat are applied in free economic zones,the High-Tech Park, small settlements, insci-tech companies, for producers ofhigh-tech or innovative products.

Visa liberalisations plan enters second stageMOLDOVA|VISAS

On 30 November, European Commis-sion President Jose Manuel Barroso an-nounced during his speech at theNational Palace Nicolae Sulac inMoldova that the country’s visa liberali-sation action plan has entered the secondand last phase. “This brings us one stepcloser to our shared goal of visa-freeregime when the necessary conditions arein place,” Barroso said. “I am certain thatthis objective can be achieved in a not-too-distant future.”

Barroso welcomed the political-eco-

nomic reforms that took place inMoldova and said that the visa freeregime together with the Common Avi-ation Area will lead to greater mobilityfor ordinary citizens of Moldova to EUdestinations. The President of the Com-mission said that because of the compe-tition that is going to be created by theAviation agreement the tickets for Euro-pean countries will get lower and for thatreason they will be affordable for the con-sumers.

Regarding the developments in the

Association Agreement talks, Barrososaid that there’s been a good progress andthere is great chance of completing theAgreement before the end of next year.However, the President stressed that theDeep and Comprehensive Free TradeArea is a crucial element to the comple-tion of the negotiations. “It is about usingthe same norms and standards, so as tobecome part and parcel of the same sin-gle market…It is a quality mark: a signthat the Moldovan economy meets cer-tain standards,” he said.

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RUSSIA|TAXES

Reinstating sales taxRussia’s Prime Minister Dmitry Medvedev said his gov-ernment will discuss reinstating the sales tax, a levy thatmay replace the value- added tax. “The Finance Min-istry always had serious arguments, but it seems to me thetime has come to discuss the issue again,” Medvedev tolda meeting outside Moscow with the Russian Union of In-dustrialists and Entrepreneurs, according to a tran-script published on the government’s website. Thegovernment doesn’t want to raise the tax burden on theeconomy, according to Medvedev.

RUSSIA|DEFENCE

Ballistic missile testOn 5 December, the Russian Defence Ministry dismissedmedia reports saying the Bulava sea-based ballistic missilewill be test launched from the Alexander Nevsky nuclearsubmarine next July. A Defence Ministry spokesman saidthe reports were sheer “speculation” and “out of sync with re-ality.” The Bulava is Russia’s newest submarine-launchedthree-stage solid propellant ICBM, capable of hitting tar-gets up to 9,000 kilometres away. “All test launches of ad-vanced strategic missile systems are conducted stage bystage, strictly in compliance with official test plans,” the De-fence Ministry spokesman said. “Any unofficial media in-formation citing a date for the tests of the Bulava strategiccomplex is a product of its authors’ imagination and doesnot merit serious attention,” he added.

RUSSIA|ENERGY

LUKoil to drill in AfricaOn 5 December, Russia’s LUKoil Overseas President An-drey Kuzyaev said the company will drill five wells in Africain 2013 at a cost of $600mn. Russia's second-largest oil pro-ducer will drill three wells in the Ivory Coast, one in Ghanaand one in Sierra Leone, he said on the sidelines of the En-ergy Intelligence conference in Moscow.

RUSSIA|ENERGY

Gazprom to work in Kurdistan Russia’s Gazprom Neft, the oil arm of Russian gas exportmonopoly Gazprom, is in a position to work with the au-thorities in Iraq and Kurdistan simultaneously, Sergei Vaku-lenko, the head of the Russian oil company’s strategicplanning department, told an Energy Intelligence conferencein Moscow on 5 December. Baghdad has been angered bythe autonomous region of Kurdistan signing its own inde-pendent deals with multi-national oil companies. Lastmonth, the Iraqi government told Gazprom to give up dealsin Kurdistan, or face losing the lucrative Badra oilfield. Thefield is close to the border with Iran. "Iraq sent a letter toGazprom at the end of October asking the company for anofficial reply, that it should cancel deals signed with KRG orpull out completely from Badra oilfield," Faisal Abdullah, aspokesman for Deputy Prime Minister for Energy HussainShahristani, said in early November. In 2011, Gazprom saidit expected to start production at Badra, with output of15,000 barrels per day in August 2013. The field, which isestimated to have 100mn barrels of reserves, is operated withTurkey's TPAO, Kogas of South Korea and the Malaysianenergy group Petronas. The autonomous northern region ofKurdistan has been independently endeavouring to developits oil and gas industry. Gazprom acquired interests in twoblocks with the Kurdistan Regional Government (KRG) inAugust, after similar moves by rivals such as Exxon and Total.US oil and gas giant ExxonMobil was given a similar ulti-matum, but reacted by telling the oil ministry in Baghdadthat it was looking to sell its stake in a big oilfield in southIraq, a sign that it favours contracts in Kurdistan instead.

On 5 December, Russian Prime MinisterDmitry Medvedev called for the coun-tries of the Shanghai Cooperation Or-ganization (SCO) to speed up work tocreate mechanisms to finance joint proj-ects. SCO is considering various financ-ing options, including ones involvingexisting banking institutions as well asnew mechanisms, he said. "This wouldallow for more effective investment injoint economic projects," Interfax quotedMedvedev as saying in Kyrgyz capitalBishkek.

As part of the effort, member statesplan to create the SCO DevelopmentBank aimed at facilitating economic co-operation inside the organisation.Medvedev said SCO countries shouldproceed with further integration of theireconomies to ensure sustainable develop-ment and resist the slowdown of theglobal economy.

Medvedev called on his SOC counter-

parts to finalise the SOC DevelopmentBank mechanism. The mechanism wouldprovide a major stimulus for project activ-ity within the organisation, he said. “Todaywe have to determine an action plan forenhancement of projects activity withinthe SOC,” Medvedev noted. “We alsohope to see your interest in a joint Russ-ian-Chinese proposal to create a personalmobile satellite system that can be used asa mobile phone and for remote educationand telemedicine,” he said. At the sametime Medvedev highlighted the transportinfrastructure development issue.

Meanwhile, Russia has proposed theSCO establish a new credit rating agency.Dmitry Mezentsev, head of the RussianBusiness Council, made the proposal at ameeting of the SCO Council of Headsof Government. "We all know that theranking of countries and businesses de-pends on ratings," Mezentsev said,adding the existing international rating

agencies "are often far from the SCO".Mezentsev said establishing a new rat-

ing agency would not be easy, but neces-sary. Regarding security, Medvedev saidSCO member states should strengthenanti-terror co-operation to ensure re-gional security. He said terrorism, ethnicseparatists, and religious extremists werethe "three evil forces" which threatenedregional security. He said that not onlySCO members but observer countriesshould be actively involved in counter-terrorism operations, strengthen co oper-ation, and jointly eliminate the regionalterrorist threat.

SCO comprises Russia, China, Kaza-khstan, Kyrgyzstan, Tajikistan andUzbekistan. On 5 December, Russia offi-cially took up the SCO presidency fromKyrgyzstan, with Mezentsev being ap-pointed the new secretary general of theorganisation. The SCO secretaries gen-eral change every three years.

Medvedev calls for jointfinancial mechanism

RUSSIA|SHANGHAI COOPERATION ORGANIZATION

Russia's Prime Minister Dmitry Medvedev speaks at a summit of the Shanghai Cooperation Organization (SCO) at the Ala-Archa state

residence in Bishkek, 5 December 2012.

Russia eyes more investments as its index rating improvesRUSSIA|CORRUPTION

On 5 December, Transparency Interna-tional watchdog said Russia has movedup to 133 in 2012 from 143 in 2011 interms of corruption levels. In the civil so-ciety organisation’s annual CorruptionPerceptions Index, published on its web-site, Russia scored 2.8 points and wasranked 133 out of 176 countries, along-side Kazakhstan, Iran and Honduras.Among other Commonwealth of Inde-pendent Countries (CIS) countries thelist had Uzbekistan and Turkmenistan atnumber 170, each with 1.7 points. Azer-baijan scored 2.7 and was number 139.Ukraine obtained 2.6 points and took the144 spot and Belarus with 3.1 points wasnumber 123.

Transparency International reckonsGeorgia is in a better position than its

neighbours and put it at number 51 with5.2 points. Russia’s recent anti-corruptioncampaign came too late to influence the2012 rating, but will be reflected in nextyear’s study, Yelena Panfilova, head ofTransparency International Russia, saidat the survey’s presentation in Moscow on5 December.

Russia’s improved position in this year’sindex reflects the much more active cam-paign against corruption since the forma-tion of the new government and theclearer commitment made by VladimirPutin during the last election campaign.“There has been much more focus ontackling corruption within state structuresover the past six months than has beenthe case for the preceding 10 years,” ChrisWeafer, chief strategist at Moscow’s Sber-

bank Investment Research, wrote in anote to investors on 3 December.

In November, Russian Defence Minis-ter Anatoly Serdyukov was fired over agraft case against his subordinates.

“The continuing high level of corrup-tion, both real and perceived, is one of themajor issues regularly highlighted by for-eign business leaders as a reason why theyremain wary of Russia risk. The high levelof ‘everyday’ corruption is consistentlyranked along with concern about risingprices in the list of issues that most con-cern Russian people,” Weafer wrote,adding that the annual Corruption Per-ceptions Index is one of the indicatorscovering this subject that is widely fol-lowed by investors as a measure of reformprogress.

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Among the replies to the 154 questionsposed to the European Commission overthe Dalli “resignation,” the CommissionSecretariat says, “Mr Dalli resigned as amember of the Commission on 16 Octo-ber having agreed with the President thathis position had become politically unten-able.” Dalli himself stated that he neversigned any resignation. Under the circum-stances, the reply to the question will comefrom the Court.

The argument of both parties is basedon eyewitnesses. Barroso claims there aretwo eyewitnesses (both commission em-ployees) of the resignation. Dalli claimsthat Barroso himself said in front of thewitnesses that “Dalli had resigned” butDalli said nothing.

On the other hand Dalli claim four eye-witnesses of which only one is a Commis-sion employee (temporary) who can testifythat the Head of Dalli’s Cabinet asked herboss to sign his resignation telling himthat “the president is waiting for your writ-ten resignation.”

Dalli, read the proposed text, first hemade a correction deleting one phrase,then he turned to his Head of Cabinet andtold her, “I will not sign it.” With the re-fusal of Dalli to accommodate the wishesof the president, the good Head of Cabi-net left the office with empty hands.

However, the Commission has a strongargument over Dalli, a historical precedentof an oral resignation, an utmost case ofdemocratic legitimacy, which is a facsimile

to the Dalli case as to the circumstances andmay give an idea of its political impact.

On 15 July, 1965, King Konstantine IIof Greece, invited in the Royal Palace thethen Prime Minister Georgios Papan-dreou and asked him orally for his resig-nation. Without waiting for a writtenresignation, the then King announced im-mediately "the resignation of the PrimeMinister" and appointed a new PrimeMinister.

The political impact of that "resigna-tion" was the Colonels’ coup of 21 April,1967, which graced Greece a 7-year dicta-torship that ended on 23 July, 1974, afterTurkey had occupied one third of the in-dependent Republic of Cyprus, which isstill occupied.

KASSANDRASome people can't wait until Oslo, so the EPP made

their own Nobel medals for their MEPs. S&D Group

chose T shirts reading I Won A Nobel Prize

Page 24 | New Europe

9 - 15 December, 2012

Kassandra@NEurope.eu

Once upon a time in Brussels...

Follow me on twitter @Kassandra_NE

EuroparlTV reborn?An urgent report on the future of the muchcriticized EuroparlTV service, costing €9 mil-lion a year, is suggesting drastic changes beforethe 2014 European Parliament elections.The parliament has been reluctant to mentionviewing figures, but the report helpfully in-cludes detailed statistics on the broadcaster’sviewership. In 2010, the average was under30,000 a month, a lowly thousand a day.The report, seen by New Europe, comes afterMEPs voted for an investigation into how costscan be cut and the effectiveness of the broad-caster can be increased. The report hopes therewill also be an external evaluation to be com-missioned “with external experts.” Of course,the service was introduced in 2008 following“the recommendations of a feasibility study car-ried out by external consultants.” We can onlyhope the second set of expensive consultantswill prove to be a lot better than the first seemto have been. Before the evaluation, the report,signed by Klaus Welle, Secretary General of theEuropean Parliament, is proposing that “theobjective is a substantial reorientation of the‘ready to be used’ web video capacity available tothe European Parliament and its full integra-tion in the broader online communicationsstrategy as laid down by the Bureau.”The authors claim that this will allow signifi-cant savings. In practice, they are asking forfewer translations and more productions thatcan be run ‘as is’ by partner broadcasters. In areturn of the ‘Going Local’ campaign of timespast, regional broadcasters are to be the prior-ity. Another priority is “an awareness campaign”to let deputies know about the broadcaster andincorporate videos in their Facebook pages.Another idea is to host videos on the EP’sservers to cut down hosting costs. The name,EuroparlTV, so expensively branded, is to beditched, as it gives the impression that it is a 24hour news service, and as the report notes the“WebTV model, thought popular and wide-spread at the time of EuroparlTV’s creation,has become outmoded in the contemporaryonline environment.” The report also notes “theproposed steps for internal improvement donot imply the need for new tenders.”

President Barroso remains under pressure after the controversial dismissal of Commissioner Dalli

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Kessler in CoCoBuIn the Committee of the Budget Control, theDirector General of OLAF, Giovanni Kesslerwas invited to speak about the relations ofOLAF and its Supervisory Committee. Dur-ing the meeting, Kessler explained the relationswith the Supervisory Committee informing theParliamentarians that since the introduction ofthe OLAF manual on 1st February, 2012, allthe requests of the Supervisory Committeewere fully satisfied.However it took several months, until the 1stof September to set all procedural issues whichresulted to some delays, which however, were allsatisfied. None of these cases was concerningthe Dalli case. Since September the 1st that theprocedures have been finalized and set all re-quests for information by the SupervisoryCommittee to OLAF are immediately satis-fied and the cooperation between OLAF andits Supervisory Institution are smooth.

During the meeting, the Parliamentarians ex-pressed their concern over the lack of satisfac-tory replies to part of the 154 Parliamentaryquestions to the Commission and one Parlia-mentarian openly criticized President Jose Bar-roso stating that in all democratic governmentsof the world, when a Minister voluntarily or in-voluntarily resigns, the next morning the PrimeMinister goes public and explain to the peoplewhat were the reasons were for the resignation.For the record, in Great Britain, when a Min-ister leaves his office, regardless of the reasonsand circumstances, the outgoing minister goesto the House of Commons and addresses thechamber explaining his story.It is exactly the following of this procedurewhich signified the beginning of the end ofMargaret Thatcher, when Geoffrey Howe crit-icised the Premier's policy on, what else but Eu-rope. Thatcher resigned nine days later.

DALLIGATE

There was shock and dismay in the EuropeanParliament, when MEPs received an email fromBelgian S&D Group MEP, Marc Tarabella:Dear colleagues, I'm sorry to tell you that "Saint Nicolas" won'tbe able to be there tomorrow in the EP corri-dors. It's not directly connected with theBudget 2013 or any political negociations; it'sjust a question of timing.But i swear that in 2013, you will meet again"Saint Nicolas" at the European Parliament.I will personally sign his accreditation :)Marc TarabellaReaders may like to know that Christmas Dayfalls on 25 December this year, as previously,so what the problems with timing could beare anyone's guess.Could it be that Santa can't land on the par-

liament's roof out of safety concerns?In the meantime, we hear that the shops havebeen doing a roaring trade with Deputiesbuying mistletoe in large quantities, thus ful-filling their pledge that this season, no stagierewill go unkissed.

'I've got an urgent appointment with Herman van

Rompuy' he shouted as he was dragged away. |

EPA/ARIEL MARINKOVIC

No ho ho ho in the European ParliamentSocialist Scrooge cancels Christmas!

The Strong Argument of the Commission on the Dalli “Resignation”