20th Year of Publication number 1023 24 - 30 march, 2013 € 3.50

this was the week that europe and its aspirations of being a global force were exposed as

the eurozone faced its latest and gre-atest man-made crisis.

the crisis started in the early hours of 16 march morning, when dazed and confused officials announced that there had been a deal to save cyprus’ banks. the cypriot President, nicos anastasiades had, according to whom you believe, either succumbed to Ger-man bullying, or volunteered a haircut for his islanders.

as dawn rose and clearer heads looked at the deal, the problem beca-me obvious.

by closing the banks, prohibiting electronic transfers, and offering or-dinary people a removal of 6.75% of their savings a line had been crossed and in the rest of the eu, many won-dered if their savings were safe, not from crooks and swindlers, but from the safe hands of the eurogroup.

the eurozone leaders had of-fered €10 billion on condition that cyprus raised €5.8 billion and it was this latter sum that was to come from the banks customers.

experts and analysts around the world were staggered that such a small sum, under €6 billion, could lead the euro to the brink. around the world, markets fell, but not as quickly or deeply as the reputations of the political leaders, who were roundly condemned by all sides.

in the safety of the brussels bub-

ble there was disbelief and shock as the consequences began to manifest themselves.

if investors are looking for safety, then there’s always belgium, despite their government debt of €371.86 bil-lion. When a belgian bank collapsed €100 billion was quickly found.

Why? because, belgium is the home of the eu. Should this nation’s fortunes require a visit from the troi-

ka, it would only require a short tram journey. but, angry mobs would only be a short distance away from the institutions and be the neighbours of the eu employees, with obvious difficulties for the smooth running of the institutions.

So, we’ll show our concern to those on the fringes of europe, but we’ll show Wb Yeats wrong, the cen-tre will hold, but onto what?

Dalligate: key witness lied

Cypriot empoyees of the Laiki (Popular) Bank take part in a protest outside the Parliament on 21March, 2013 in Nicosia.|AFP PHOTO PATRICK BAZ

the eu’s anti-fraud body, olaf, has al-legedly told a key player in the Dalligate affair to stick to his original story sug-gesting the former health commissioner accepted a bribe through an associate, despite knowing that a key witness lied about the meeting in which she alleged Dalli wanted a €60 million pay-off to change the contents of the eu’s tobacco directive.

the witness, Gayle Kimberly, lied about a meeting central to the investigation, according to a representative of Swedish match, the firm at the heart of the story.

The ticking clock...John Dalli has never signed any written resi-gnation, despite being offered a resignation text in the presence of two witnesses and un-der tremendous psychological pressures. as time passed, the detailed version of events the former commissioner as carefully explained has remained constant. John Dalli’s account has not changed in even the smallest detail. he has not had to ‘clarify’ a single remark.

africa Page 14

economY Page 10

Don’t bank on late night summits making good decisions

Page 32Page 06

estonia: the success story

eu banking union should ‘protect citizens’

corporations hold europe captive

cyprus, russia hold talks as eu stands firm

ruSSia Page 31

banKinG union Page 05

PenSionS Page 04

buSineSS Page 07

Things fall apart

02 ANALYSIS NEWEUROPEwww.neurope.eu24 - 30 March, 2013

Australia $3.4, Austria EURO 1.81, Balkans EURO 4, Belgium

EURO 3.50, Holland EURO 2.69, Central Asia USD7.5, Central

Europe USD5, Canada $5, Denmark: DKK 19,95, Eastern Europe

USD7.5, France EURO 3.04, Germany EURO 3.57, Greece EURO

4, Hungary HUF400, Japan Y900, Italy EURO 3.62, Nordic coun-

tries USD7, Pacific Rim USD8.5, Russia USD 4, Switzerland

SFr4, UK GBP 4.5, USA $2.95, all other countries EURO 6

Doves flying in Iraq

US President George W. Bush seemspretty isolated on the issue of the "nextday" in Iraq once the war is over.

(editorial p. 2)

DearProfessor

Full text of the letter from 3 MEPs toEC President Romano Prodi. p. 3

EU hand for post-war Iraq

The EU and the US must work togeth-er to provide humanitarian relief toIraqi civilians and rebuild the countrypost-Saddam, a top visiting US officialsaid in Brussels. p. 5

Olympichospitality

With the occasion of the 2004 OlympicGames, the hotel map of Athens hasradically changed to ensure that thecapital city will be able to deal with thewave of Olympic visitors. p. 11

Congress backs resolution talks

Seventeen members of the US Con-gress have called on the US administra-tion to use all available political anddiplomatic means to persuade Turkeyto work constructively to resolve theCyprus question in a manner consistentwith the UN process. p. 24

Croatia-USties okay

Croatian Prime Minister Ivica Racanwas recently involved in talks concerningthe latest international events with USAmbassador to Croatia LawrenceRossin. Racan noted that relationsremained on a friendly basis despite cer-tain disagreement that exist especially inthe case of the Iraq crisis. p. 41

EU mulls actionfor the day after

NOTEBOOK

The ombudsman, guarantor of transparencyOutgoing European Ombudsman JacobSoderman presented his Annual Reportfor 2002 to the Committee on Petitions ofthe European Parliament last week. Thereport gives an overview of the ombuds-man's busiest year to date and highlightsthe results achieved for EU citizens. Thisis the last report by Soderman, as Niki-foros Diamanduros will take over thepost. The European Parliament electedDiamanturos to this position unani-mously and his prestige will thus bestrengthened. So everybody expects a lotfrom him.

It is certain that the new ombudsman willwork to serve the complaints and peti-tions of the European citizens. NewEurope believes that the institution of theombudsman can serve as a guarantor ofgood conduct of the EU apparatus andDiamanturos will certainly work towardsthis direction too.

It is interesting to note that the number ofcitizens' complaints exceeded for the firsttime the benchmark number of 2,000 in2002. Complaints sent via the Internetrose at an exceptional pace and accountnow for almost half of the total. Theombudsman opened more inquiries in2002 than ever before (up by 8 percentcompared to 2001) and handled thembefore the end of the year. All but fourinquiries had been closed within the one-year target. Much was achieved for Euro-pean citizens in 2002.

The ombudsman can exert stronger pres-sure on all European institutions andmake clear to everybody that its powerswill be exercised to the fullest. The ECand the Council should understand theyhave to work under full transparency andconsider the citizens' complaints. Theombudsman must continue to applypressure on the EU institutions to imple-ment the Charter of Fundamental Rights.

TThe war is on and the dimen-sion of the emerging human-itarian crisis is already beingcalculated by various aid

agencies. Although the United Stateswent to war only with a handful of allies,the domestic pressure on British PrimeMinister Tony Blair is already evident ashe has joined the doves in Washingtonto pressure US President George W.Bush not to further alienate the interna-tional community.

The top US officials are already

courting the European Union supportfor a post-Saddam order in Baghdad.But it is still not clear how much of thatsupport is for political equations to setup the new regime or just to open theEU money coffers in the name ofhumanitarian aid.

The best quote on the subject camefrom Anna Diamantopoulou, the soft-spoken European commissioner forSocial Affairs: "The US fights, Europefeeds." While attending a session withthe Foreign Press Association of

Greece, the commissioner was answer-ing a question from New Europe aboutthe Catch-22 situation of European citi-zens not wanting a war and then payingto rebuild the damages.

French President Jacques Chiracrecently set the tone saying, "France willnot accept a resolution to legitimise mil-itary intervention and give the belliger-ents - the United States and Britain - theright to administer Iraq," adding wryly,"We are currently destroying and do notknow what we will have to reconstruct."

www.new-europe.info11th Year, Number 514

THE EUROPEAN WEEKLY

March 30 - April 5, 2003

New EuropeSerbianpolice turn a new leafSerbia acted swiftly with an ironhand to track down the killersof Prime Minister ZoranDjindjic resulting in finallyclaiming that the police defi-nitely had the weapon, whichfired the shots that killed Djind-jic. Ballistic experts confirmed"beyond doubt" that the Heck-ler and Koch sniper rifle foundburied in New Belgrade wasthe murder weapon, the Interi-or Ministry said in a statement.A top officer of the Serbianpolice special operations unit(JSO), Zvezdan Jovanovic, 38,was arrested when the govern-ment ordered JSO to disband.The unit was formed in 1991 bySerbian state security. The gov-ernment proclaimed a state ofemergency immediately afterthe killing and allowed policeexpanded authority to investi-gate and detain suspects behindlocked doors. The massivecrackdown on crime apparent-ly unearthed plenty of evidenceproving the nexus betweenJSO, mafia bosses, politicians,judiciary officials and evencelebrities. For the war-tornBalkans caught in the web ofcorruption the successful crack-down is something new and ishailed as a new step in the rightdirection.

cyanmageyelloblack

An idyllicsetupof theAmericandream

US steps up efforts to open EU purse strings

Russia to pressure USto honour oil contracts

in post-war Iraq

Russia has vowed to defend the interests of its oilcompanies suffering damage from the Iraq war.

Unlike many foreign oil companies, Russian oil companiesare already suffering direct damage from the Iraq war,Russian Deputy Prime Minister Viktor Khristenko said.

"Surely, in this context, we should do everything possi-ble to defend Russian oil companies' interests," Khris-tenko said. But this is an issue for the future, as theseefforts are now being hampered by the "roar of bombs andthunder of rockets," he added. Many Russian companieshave evacuated their personnel from the Persian Gulfafter the start of attacks on Iraq and Russian tankersoperating in the area have also been recommended not toapproach Iraq's seaports in the near future. The head ofYUKOS, one of Russia's biggest oil companies, has saidthat Russia would have to negotiate business in Iraq withthe regime that emerges there after the military operationhas finished. Russia will have to negotiate involvement inthe restoration of Iraqi oil fields. (p. 47)

The Shooting Gallery

Basically, I’m for anything that gets you through the night - be it prayer, tranquilizers or a bottle of Jack Daniels. - Frank Sinatra | AFP PHOTO JOHN THYS

MANAGING EdItor

A lia Papageorgiou alia@neurope.eu

SENIor EdItorIAl tEAM

K ostis Geropoulos (Energy & Russian Affairs) kgeropoulos@neurope.eu

C illian Donnelly (EU Affairs) cdonnelly@neurope.eu

A ndy Carling (EU Affairs) acarling@neurope.eu

A riti Alamanou (Legal Affairs) aalamanou@neurope.eu

L ouise Kissa (Fashion) lkissa@neurope.eu

A lexandra Coronakis (Columnist) acoronaki@neurope.eu

dIrEctor

A lexandros Koronakis akoronakis@neurope.eu

ExEcutIvE lAyout producEr

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After the Iraq war began, thoughts finally turned to winning the peace. Steadfast Bush ally, Tony Blair was trying to reposition himself as a humanitarian, but it was becoming clear that Europe, which failed to offer much in the way of troops, was expected to help with clearing up the mess afterwards. This was summed up by then Social Affairs commissioner, Anna Diamantopoulou as „US fights, EU feeds.“ France‘s President Chirac said he wouldn‘t accept a resolution that allowed the „belligerents“ UK and US to administer Iraq. Moscow, meanwhile, was concerned about its oil contracts in Iraq.The US was also concerned about peace... in Cyprus, where Congressmen were asking Turkey to resolve the divided island peacefully, and without noticing the irony, through the UN.

ne 10 YeARS

AGO

MMThe Eurogroup has a communications problem. At least according to Jeroen Dijsselbloem,the president of the Eurogroup – the member go-vernments of the single currency, who told a meeting of the European Parliament’s economic and finance committee on 21 March that the group had fudged, if only from a public relations point of view, the hand-ling of the Cyrus bailout affair.Those Cypriot citizens on the ground, the ones who have been frozen out from accessing money from their banks accounts owing to a stalemate in the political process – that is, the negotiations between Cyprus and the European Union – may not feel so acquiescent in the official explanation.The financial establishment, fearing a run on the banks, has shut-down. Likewise businesses dealing in credit cards, such as petrol stations, who fear that they may not be guaranteed the money, leading to the situation of Cyprus being a cash-only economy.There has been lots of scrambling around, both before and after Dijsselbloem’s appearance before the committee, an obligation he has to face in his capacity as head of the Eurozone, which happened to be co-in-cidentally complicated by the recent deal between international creditors and Cyprus, which said that the EU, ECB and IMF would provide around €10 billion to prop-up the economy, if the Cypriot government stumped-up around €6 billion. They decided to do this by raiding bank accounts. Initial reports were that it was an imposed necessity of being given fi-nancial help by international creditors, organisations dominated by Ger-many. Wolgang Schaüble, the German finance minister, denied such an accusation, saying that it was not a centrally-mandated imposition, and that the precise terms of the bailout agreement, which necessitated that the Cypriot government stumped-up about €6 billion of their own. The rejection of the bailout terms by the parliament, on was therefore, a re-jection of domestic policy, not an EU, federally-imposed, policy. The two sides, with Russia looking eagerly on from the sidelines, have decided to come to another arrangement. The Eurogroup president admitted that the panic spread in the press, so-cial media and elsewhere, was the result of bleary-eyed negotiations in the early hours of 16 March, a meeting which followed on from the Spring summit, in which EU leaders gathered the discuss the Cypriot economic crisis, as well ans other pressing issues. The communication people, ap-parently driven by a kind of narcoleptic autopilot, didn’t quite explain the work of the group.This wasn’t to suggest that the story wasn’t largely true, and that the ci-tizens wouldn’t have to shell out of their own hard-earned cash reserves, but that, it wasn’t the fault of the dreaded EU.Amid all the other problems brought about by the crisis, communication may seem to be a diminished issue; but increasingly proper communica-tion is a massive part of decision making, from wearing the right kind of shirt in public to verbal nuances. In serious situations, like those increa-singly dominating the Eurozone, it is essential; a word out of place can lead to all sorts of panic, which, in turn leads to panic upon panic.Members of the European Parliament have been quietly murmuring, suggesting that the questionable, possibly non-transparent deals, made at 6AM, are undermining faith in EU decision-making. At a time when arguments against the Union are increasing, largely in reaction to fiscal policies imposed by the central powers on national governments, there may be a legitimate reason t alter the way things are done at the top level. No more all-nighters, maybe; after all, clearer heads prevail.

Panic in the streets

03ANALYSISNEWEUROPEwww.neurope.eu24 - 30 March, 2013

The introduction of a levy on savings depo-sited in Cyprus does not represent a threat to the savings deposit guarantee scheme in Euro-pe, the head of the Eurogroup, Jeroen Dijssel-bloem has said.Speaking in the European Parliament on 21 March, Dijsselbloem said that the one-off tax on savings more akin to a wealth tax rather than a scheme to undermine existing legislation.His comments come after the Cypriot parlia-ment rejected the terms of a bailout deal from international creditors that would have seen ci-tizens face a one-off tax on their savings. Rene-wed discussions are now under way as to pos-sible alternative levy charges, such as allowing

those with under €20,000 in savings being im-mune from the tax. According to Dijsselbloem, the Eurogroup is of the opinion that “big and small depositors should be treated different-ly,” suggesting a larger levy on deposits over €100,000 than the original 9.9%.Banks in Cyprus are currently closed, as wor-ries remain about a bank run, while speculation remains about a possible exit from the single currency, similar to previous speculation about Greece.Dijsselbloem said that it is very important from a Eurogroup to have “fair burden-sharing” from the Cypriot side. This, he said, is the main reason that the levy has been placed on all bank accounts, both for residents and non-residents, and that there should be “a larger share for

larger depositors, rather than smaller ones.” Russia, currently, has a lot of money tied-up in the island, and has loaned Cyprus €2.5 billion, although this may increased; something Dijs-selbloem says the Russian government has told EU leaders it will not do, but the loan could still be extended, or interest rates lowered.Under the terms of the bailout, Cyprus is to receive €10 billion form the European Union, European Central Bank and International Mo-netary Fund, with around €6 billion to raised from the Cypriot side. In return, the country is to introduce structural reforms, privatisation efforts and is expected to curb its public debt.There are, says Dijsselbloem, “very exceptio-nal circumstances” in Cyprus that have lead to the bailout. The financial sector, specifically,

he says, “needs to be downsized”. However, he says, “we must not lose sight of the gaol to have strong inclusive growth that preserves the Eu-ropean social model.”He told members of the parliament’s economic and monetary affairs committee that the EU “must allow Cyprus to make a restart on a su-stainable path,” although, more ominously, he said that in the current climate, budget cuts are “unavoidable.”Despite the current financial crisis, and the pro-blems in Cyprus and other troubled Eurozone economies, he said that the single currency is still at the heart of EU thinking, with Latvia due to become the latest member of the Euro-zone in 2014. The euro “is a relevant and attrac-tive prospect for the European Union,” he said.

Authorities work on ‘plan B’ as European Cen-tral Bank closes the net and citizens feel the squeeze

The prospect of a bank levy for bank de-positors in Cyprus remains on the cards, after legislators have been desperately trying to re-draw the terms of the EU-imposed bailout.

Parliamentarians rejected the original deal agreed with Eurozone leaders in the ear-ly hours of 16 March, which would have seen international creditors lend Cyprus around €10 billion to assist its troubled banking sector, on condition that the island came up with another €5.8 billion. The shortfall was proposed to be made-up through a levy on bank savings of 6.75% on deposits under

€100,000 and 9.9% on those over €100,000.One of the fears was that this violated exi-

sting bank savings guaranteed under EU law, an allegation dismissed by Eurogroup president, Jeroen Dijsselbloem, when he appeared before the European Parliament on 21 March, saying it was instead more representative of a one-off wealth tax, which will not spread to other Eu-rozone economies as part of a concerted policy.

Time, however, is against Cyprus, as the European Central bank, one of the internatio-nal creditors along with the European Union and International Monetary Fund, have given the authorities until 25 March to come to a decision, leading to speculation of an exit from the single currency.

On 22 March, it was announced that the Greek Piraeus Bank would buy-up the Greek-based units of the Bank of Cyprus and Laiki Bank. Reform of the Cypriot banking sector, which is alleged to be a haven for money-laun-dering, is key to the terms imposed by the cre-ditors.

Following the parliamentary rejection, Finance Minister, Michalis Sarris, travelled to Moscow to discuss a possible deal with Russia, which has key financial interests in the country, and which has already loaned Cyprus €2.5 bil-lion. However, Sarris returned on 21 March ha-ving failed to reach a deal, either an extension of the loan, a lowering of interest rates or, crucial-ly, more money. That same day, Dijsselbloem

told the European Parliament that this last opti-on was off the table.The following day, speaking alongside European Commission President Jose Manuel Barroso on 22 March at the con-clusion of the EU-Russia summit in Moscow, Russian prime minister, Dmitri Medvedev said that his country “fully supports the euro area,” and that it “wants to see it stable.”

As the authorities atempt to work things out, reports continue to suggest that banks may not be open again until 26 March. They have remained shut during the crisis over fears of a run on the bank as panicking customers have descended on branches countrywide to secure their savings, leaving Cyprus operating as a cash-run economy. CD

By Cillian Donnelly

Employees of Cyprus Laiki (Popular) Bank gather outside the parliament in Nicosia during a protest on 22 March. Cyprus is locked in “hard negotiations” with a troika of lenders to save the eurozone member’s banking system and economy in general from ruin. |AFP PHOTO/PATRICK BAZ

Cyprus on the edge

Eurogroup chief: Cyprus bank levy no threat to EU savings

04 PENSION REPORT NEWEUROPEwww.neurope.eu24 - 30 March, 2013

Estonia, the success storyEstonia has been an economic success

story in the Central Europe and Bal-tic region, with high levels of growth

achieved through the computer, IT and au-tomotive industries, but it’s also a country which is still developing, as reflected in its pension system.

The pension apparatus is split into three pillars, firstly the defined benefit state pen-sion, the old age pension, that is funded through tax contributions.

The basic amount the state pension pro-vides is €120,2069, the full amount is calcu-lated after the length of employment, that includes the years which are deemed equal to bringing up children and compulsory milita-ry service.

Additionally there is an insurance com-ponent, where the amount received at pensi-on age, is dependent on how much social tax has been paid from the salary of a pensioner since 1 January,1999.

The amount paid out by the component equates to the sum of ‘annual factors’ of pen-sion insurance. An annual factor shows the ratio of the social tax paid on the individual salary, compared to the average salary natio-nally. For those who are not entitled to a pen-sion that is related to work contributions, the second part of the state pension, the national pension, is invoked if they have lived in Esto-nia for at least five years, the amount of the national pension is €134.

Following in the footsteps of most other European countries, the ceiling on the pensi-on age is set to increase from its current level

of 63. In April 2010 the Estonian parliament adopted the State Pension Insurance Act, that raised the pension age to 65.

The transition period for this begins in 2017, and will effect citizens who were born between 1954 and 1960, where the retire-ment will increase by three months every year, eventually reaching the age of 65 in 2026. The second pillar of the pension sys-tem is a defined contribution mandatory fun-ded scheme, and is labour market based, in support of the basic state pension.

It works by each participant contributing two percent of his or her gross salary to the pension fund, the state will then add four per-cent of the social tax paid by employees.

Employers will administrate the pay-ments by withholding the two percent of sa-lary, and then transferring it to the national Tax and Customs department. As it is now a mandatory system, anyone who has entered the labour market who was born in 1983 or after is to contribute, whereas before the le-gislative change the fund was an optional scheme.

The third pillar, or the supplementary funded pension, is also a defined contributi-on scheme, which remains a voluntary part of retirement contributions in Estonia.

This is the most flexible part of the three pillars of the pension system, as how much you pay can be increased or decreased, or sus-pended if necessary on a temporary basis, at the discretion of the individual.

If the contributor wishes, all of the mo-ney which has been invested can be taken out before retirement age, if it is desired to spend the money for now rather than tomorrow.

Andres Võrk, an analyst of labour and social policy of the Tallin based think tank Praxis, warns that the pension process has yet to fully mature: “The Compulsory and volun-tary pension schemes have not matured yet, very few people receive pensions from the se-cond and third pillar. Up to the end of 2012 about 636,000 people have joined the second pillar, from a population between the ages of 18-64 of 863,000.”

“Looking at the voluntary scheme, about 68,000 people have a third pillar insurance contract up to the end of last year. The be-nefits of this pension have started to filter through, with 8,627 people receiving money, and out of those 2,851 were older than 55. In general for the Estonian retirement structure, the major issue is finding the balance bet-ween adequacy and sustainability.”

As part of the modernising process, pu-blic sector pensions are likely to become more streamline and less advantageous, if the centre-right coalition government manages to get its own way.

Some of the favourable conditions that state employees enjoy include early retire-ment, alongside ‘top ups’, that are usually re-ceived by military personnel, judges and the police, that the government argues reduces flexibility in the labour market, obscuring fis-cal obligations over a long period of time.

An interesting twist in Estonia’s pension mosaic, is the breakdown of how pension providers invest their assets on the markets. In a global culture where the safety of bonds have replaced the reliance on equities since the financial crash, according to the Melbour-ne Mercer Global Pension Index, that used

OECD pension statistics from 2011, Estonia invests in the ‘other’ markets far more than any other country in the Index.

This is mostly due Melbourne Mercer say, to the comparatively inordinate faith in private investment funds, these usually have less than 100 investors, and are often given hedge fund status, usually member investors of huge personal wealth are included. The political discourse over the last couple of ye-ars has centred mainly around the economic crises, that has caused the pay as you go state pension system to run a deficit that may take decades to close.

This has led to the suspension of social tax transfers to the mandatory scheme last year, this followed a similar suspension for 18 months from June 2009.

Although according to an EU report, the pressure on the Estonian pension system is derived from high dependency rates, where only 30 percent of the population receive any kind of state pension.

The policy recommendations from Brus-sels to eradicate this are to have an effective retirement age, using current expenditures more efficiently in targeting poverty, or incre-asing voluntary savings.

Recently the Income Tax Act, as of the 1 January, 2012, employers can contribute to a voluntary pension scheme up to the amount of 15 percent of an employee’s annual salary, without paying the fringe benefit taxes.

Perhaps one step forward in encouraging employees to look to the voluntary third pil-lar in the system, as part of the development of a pension scheme that has still yet to fully evolve.

By Peter Taberner

A land of stable economy and a wonder kid in Europe as far as finances and the pensions system are concerned Estonia being placed so high in geographical terms also gets to enjoy the Aurora borealis, photo taken 17 March, 2013 shows the northern lights, as seen in Tallinn. |AFP PHOTO/ RAIGO PAJULA

05ANALYSISNEWEUROPEwww.neurope.eu24 - 30 March, 2013

A European banking union should re-present the interests of the citizens and not those of the financial sector,

a senior MEP has said.Speaking at an open conference of presi-

dents’ session in the European Parliament in Brussels on 20 March, Guy Verhofsatdt, for-mer Belgian prime minister, and leader of the liberal group in the parliament, said that the banking union, a compromise deal which was reached by agreement between the parliament and council (EU heads of states) the previous day should “protect the customers, not the banks and shareholders”.

With particular relation to Cyprus, he said “a banking union must protect the bank customers, especially the ordinary depositors rather than the bond holders and creditors,” saying that the decision to allow a one-off levy on savings does nothing to “break the link bet-ween banks and sovereigns. It is totally incom-prehensible and undermines the credibility and legitimacy of the EU and its new financial structures to restore stability.”

He said that, if it failed to do that (so far, political agreement, rather than a final legisla-tion has been agreed), it would represent “the opposite” of the spirit of solidarity that such a union should represent.

He called on the European Parliament President, Martin Schulz, to sanction an in-quiry into the possible consequences of the failure to implement watertight legislation in the banking sector in Europe.

A few minutes earlier, European Com-mission Vice-President, Maroš Šefčovič, had said something similar, but suggested that any such debate should be widened to include members of the International Monetary fund, European Central Bank and Eurogroup, a con-

cept rejected by Verhofstadt.The deal, reached by parliament and coun-

cil on 19 March, would see the introduction of the Single Supervisory Mechanism (SSM), under the control of the ECB, to oversee the Eurozone’s biggest banks.

The deal still has to be agreed by parlia-ment during a plenary vote. Earlier in the day,

during a committee meeting to discuss the ban-king regulation, MEPs from across the political spectrum expressed reservations about certain member state interference into the scheme, sa-ying that the only solution to banking supervi-sion across the Eurozone should come from the EU itself, not national regulators.

Speaking in committee, Green MEP Phil-

lipe Lamberts said that “some legislation is ju-stified,” when it comes to curbing the excesses of the kind of banks that caused the current economic crisis, those “players in the market that are enjoying a market position that is not justifiable.”

He said that banks should not be allowed to be “above governments, above democracy.”

EU banking union should ‘protect citizens’

An employee of Cyprus Laiki (Popular) Bank reacts as he takes part in a protest outside the parliament in Nicosia on 22 March, 2013 | AFP PHOTO/PATRICK BAZ

NGOs call for recognition of Islamophobia as form of racismAhead of the International Day for the Elimi-nation of Racial Discrimination on 21 Mar-ch, the European Network Against Racism (ENAR) called on the European Union (EU) institutions to recognise Islamophobia as a specific form of racism.

The call came after 12 March the Europe-an Parliament hosted a debate on strengthe-ning the fight against hate crime, racism and xenophobia in Europe. During the debate, the EU justice commissioner Viviane Reding said that racism, xenophobia and hate crimes, as well as anti-Semitism, Islamophobia anti-gypsyism, were all manifestations “incom-patible with European rules” and with “the basis on which Europe is founded”. However, the European Parliament did not include the term “Islamophobia” in the adopted text of its resolution and referred only to “religious intolerance.”

The plea also comes with the release of

ENAR’s shadow report 2011/2012 on ra-cism in Europe which the EU-wide network of NGOs presented on 20 March. The key findings of the report highlight, in particu-lar, the experiences of Muslim communities, while the study is claimed to be the first pan-European qualitative survey of Islamophobia.

Discrimination against Muslims in Euro-pe is widespread, the report said. According to the study covering 26 national reports, Muslims continue to experience discrimina-tion in a range of areas, more specifically in employment, education and access to goods and services.

“Muslim women and girls are most affected and face double discrimination on the basis of both their religion and their gender”, Sarah Isal, an ENAR Bureau member, told reporters at the launch press conference in Brussels. She further explained that for this reason, Islamo-phobia needs to be addressed as a gender issue in addition to being a religious one.

Moreover, Isal stressed that increasing hatred against Muslims in Europe manifests itself as opposition to, as well as protests against, the building of mosques and proper-ty damage to Islamic places of worship. The ENAR representative gave the height restric-tions for mosques in Austria and the attacks by activists of the Bulgarian party ATAKA on the Sofia mosque and Muslim worshippers as examples of this type of Islamophobia mani-festation.

The newest ENAR report also found that Islamophobia is promoted both by extremist political parties, as well as mainstream parties to gain votes and popularity. Isal gave Italy as an example, where Mario Borghezio from the Lega Nord Party and current member of the European Parliament (MEP) recently propo-sed taxing Muslims who have too many child-ren in order to ‘slow down the great Islamic advance in Europe’.

Last but not least, Isal pointed out that

media has contributed to the rise of Islamo-phobia in Europe through biased reporting. In Belgium, for example, 51% of complaints on the ground of religion targeting Muslims in 2011 related to media and the Internet.

The shadow report 2011/2012 also loo-ked at other communities vulnerable to ra-cism in Europe, such as Roma and Black Afri-cans, concluding that they continue to be the most vulnerable to discrimination, together with immigrants.

More specifically, the study found that the public perception of ethnic minorities in most countries remains negative, highlighting that segregation of Roma pupils in education remains a pressing problem in some countries and one which some governments “appear re-luctant to address or uncertain how to do so.”

Moreover, ENAR’s report said that Na-tional Roma Integration Strategies, even ad-opted, are still lacking satisfactory levels of quality and implementation.

By Cillian Donnelly

By Stanislava Gaydazhieva

06 ANALYSIS NEWEUROPEwww.neurope.eu24 - 30 March, 2013

Dalligate: Swedish Match say their own witness lied about bribery meeting

The EU’s anti-fraud body, OLAF, has allegedly told a key player in the John Dalli affair (‘Dalligate’) to stick to his

original story suggesting the former health commissioner accepted a bribe through an associate, despite knowing that a key witness lied about the meeting in which she alleged Dalli wanted a €60 million pay-off to change the contents of the EU’s tobacco directive.

The witness, Gayle Kimberly, lied about a meeting central to the investigation, accor-ding to a representative of Swedish Match, the firm at the heart of the story.

EU Health Commissioner, John Dalli, re-signed on 16 October 2102, after it was alle-ged by the tobacco firm Swedish Match, that he had solicited a €60 million bribe to alter the EU’s tobacco directive through an inter-mediary.

However, new revelations by Green MEP, José Bové in the European Parliament on 21 March reveal that Gayle Kimberly, a lawyer hired by Swedish Match lied about a crucial meeting during which Silvio Zammit, a po-litical associate of Dalli, allegedly asked for a sum of €60 million to influence the contents of the directive.

Bové held a meeting with two officials of Swedish Match on 20 March at his office in the European Parliament in Brussels, during which one of them, Johann Gabriellson, said that a meeting described by Swedish Match lawyer, Gayle Kimberly, in which she met with Zammit, who then asked for the money in return for a favourable directive, never in fact took place.

If the allegations turn out to be true, then the case against the former commissioner is likely to fall down, according to EU political sources.

The revelations come two days after Her-bert Bösch MEP, former chair of the Europe-

an Parliament’s budgetary control committee, and current member of the supervisory com-mittee of OLAF, the EU’s anti-fraud body, told a meeting of his former committee that OLAF has engaged in illegal wire-tapping activities in the course of its investigations. Bösch has also said that OLAF Director Ge-neral, Giovanni Kessler, may have been aware of such activities.

He told the committee on 19 March that

the supervisory committee has “information that OLAF uses illegal methods to investi-gate.” He also suggested that interviews were taped without the participants’ knowledge, and that Kessler may have has knowledge of the tactics.

The supervisory committee is due to publish a report on the working practices of OLAF in April. On 14 March, the European Council and Parliament came to a decisi-

on on the first reading of the revision of the statute regulation governing OLAF, with re-quires full parliamentary consent. According to Green MEP Bart Staes, vice-chair of the budgetary control committee, and one of the drivers behind the instigation of a new special committee on good governance in the EU in-stitutions, “we cannot give our consent to the OLAF regulation as legislators, as we do not know what goes on in OLAF.”

He said these revelations cast “serious doubts about how OLAF carries out its work.”

OLAF is central to the Dalli investiga-tions. According to José Bové, the organisati-on had pressured Gabriellson into adhering to the story that two meetings had indeed taken place, thereby upholding Kimberly’s version of events. The parliament, however, currently have no access to documents relating to the affair and have no way of confirming the facts of the investigation.

As part of the proposed special com-mittee, Staes is calling for access to full do-cumentation, currently off limits to parlia-mentarians. The committee, the creation of which has been under discussion between the political groups in the European Parlia-ment since the beginning of the year, aims to looks at ways of improving the way the EU institutions does business with lobbyists, using concrete examples from good and bad practices, including the Dalli affair. Since the inintiative was announce in January, the poli-tical groups have held internal discussions on the make-up of such a committee, including its terms of reference.

On 21 March, the Greens released their terms of reference for such a committee. The terms have been submitted to the other poli-tical groups, and will be discussed at the next conference of presidents meeting on 11 April.

According to Staes, following these latest allegations, “I don’t think any group will not want to see this.”

By Cillian Donnelly

By Andy CarlingOLAF, the European Union’s anti-fraud body has denied allegations made against the body by MEPs and the tobacco company, Swedish Match.

In a statement OLAF said, “OLAF denies that it has attempted to influence the evidence given by any witness. All evidence was colle-cted lawfully,” and, “OLAF denies that it has conducted wiretapping or has illegally recor-ded telephone conversations.”

The fraud fighters added that they were independent and, “Only the Courts have

competence to determine whether or not bre-aches of the law have taken place.”

They said that they were unable to address the charges in detail, citing sub judice. Ho-wever, in reponse to reports in New Europe and elsewhere, thay stated that they were “ful-ly aware of these facts” before their investiga-tions were concluded and their “Final Report was drafted accordingly.”

MEPs are now demanding to see the re-port.

The EPP Group Spokeswoman in the Budgetary Control Committee of the Euro-

pean Parliament, Inge Gräßle MEP has called on OLAF Director General Giovanni Kessler to resign.

She said, “Mr Kessler himself conducted the investigations in the case of the former EU Health Commissioner John Dalli, who, in light of the preparation of the proposal for a new Tobacco Products Directive, has been exposed to allegations of corruption.”

A short while earlier, the OLAF Super-visory Committee had pointed out to Parlia-ment severe breaches of fundamental rights – the recording of a telephone conversation and

its evaluation without a judicial authorisation, as well as the instigation of third persons to produce such records of telephone conversa-tions. “Now the instigation of a third party, in this case Swedish Match, to make a false statement in front of Parliament adds to this record”, said Gräßle.

She added, “‘The Presidents have to stop covering up for the breaches, everything has to be put on the table now’, said Gräßle. She said that it is unacceptable that her own Insti-tution covered up the fact that it has been lied to all along.”

Pressure grows as OLAF deny allegations of improprietyAnti-fraud outfit accused of breaching rights, law

Former EU health commissioner, John Dalli, was dismissed in October 2012 following allega-tions that he accepted a bribe to change legislation. New revelations suggest that a witness in the affair lied about a key meeting . |EPA/CHRISTOPHE KARABA

Tobacco firm claims pressure from OLAF into changing story

07ANALYSISNEWEUROPEwww.neurope.eu24 - 30 March, 2013

Corporations hold Europe captive The middle finger on José Manu-

el Barroso’s right hand has been in constant action lately. It has

been used to deliver an “up yours” salute to 99% of the world’s population.

A few weeks ago, I wrote about how the European Commission chief had appointed Edmund Stoiber, a giant in German politics, to prepare a bonfire of labour and green laws.

No sooner had I turned in my co-lumn than I learned that a coalition of trade unions and health, environment and consumer protection advocates had complained to Barroso about how they had been excluded from recent discus-sions held by the “high level group” on “administrative burdens” that Stoiber heads. The alliance asked that a mee-ting of the Stoiber group scheduled for 7 March be postponed until the group’s membership list was revised. As things stand, the group is controlled by private sector representatives, whose primary motivation is to maximise profits.

Barroso ignored the appeal and the meeting went ahead as planned.

Even though the Commission is able to cite “procedural delays” for stalling on a decision about involving public in-terest defenders in the group, it has no problem in allowing a lobbyist for the cigarette industry participate.

Pavel Telicka was the Czech Republic‘s first EU commissioner before being hired to advise British American Tobacco on “social responsibility”.

Most of us concerned about pre-venting cancer could give BAT very clear advice on how to act responsibly. It would run like this: stop peddling tobac-co. Not Telicka: he has stoutly defended the cigarette industry. When anti-smo-king campaigners brought a case aimed at banning the sale of cigarettes to the European Court of Justice in 2010, Te-licka protested vociferously. He has been nominated to Stoiber’s select club by the European Policy Centre, a “think tank” which has been financed by the tobacco industry since its inception.

The continuing participation of a ci-garette champion in the group is all the more disturbing when you consider that Stoiber used (maybe that should read “abused”) his position last year to lobby against an EU “tobacco products” law then under preparation.

Powerpoint presentations made at the 7 March meeting suggest that Stoiber and his chums are hostile to the law.

The British Department of Business

gave a summary of a paper boasting how in 95% of cases David Cameron‘s go-vernment doesn’t place EU regulations on the country’s statute books ahead of deadline for doing so. This is part of a practice known as “gold-plating”.

It seems bizarre that a rule-making body like the European Commission has given its blessing to a forum which recommends that rules shouldn‘t be re-spected until the very last minute - and then tries to scrap the rules altogether. Yet this fits into a broader pattern, where-by the EU‘s initiatives are fashioned with the objective of indulging - or at least placating - big business.

One vivid manifestation of this pat-tern is the new climate change “package” that the Commission will shortly pu-blish. It incorporates a discussion paper about how to stimulate investment in “carbon capture and storage” (CCS), a process designed to take greenhouse gases from plants burning fossil fuels and bury them underground.

As things stand, the supposed bene-fits of CCS are unproven. Climate chan-ge, on the other hand, is a proven reality. In the past few weeks, Brussels has had the kind of balmy sunshine associated with May followed by sub-zero tempera-tures and snow: a strong indication that the planet’s equilibrium has been upset. More importantly, the vast majority of the world‘s scientists agree that the earth‘s temperatures are rising up becau-se of man-made activities.

If logic and sanity prevailed, policy-makers would be concentrating on pro-moting renewable energy and emission reduction strategies, not being sidetra-cked by CCS. But the Commission has allowed itself to be captivated by the wi-

zards of CCS - or the oil industry, as they are better known.

The Commission’s new paper floats the idea that the EU‘s emissions trading system could be tweaked so that reve-nues raised from auctioning pollution permits are used to stimulate CCS. I was able to trace the origins of this re-commendation: it can be found in a July 2012 blueprint from the Zero Emissions Platform (ZEP).

Assembled by the European Com-mission, the ZEP is comprised of BP, Shell, Statoil and Total: all firms that have a vested interest in hampering ur-gent action against climate change so that they can keep on burning fossil fuels. To give the impression of inclusivi-ty, the platform has some “environmen-talists” sitting on it, too. These belong to the Bellona Foundation, which is head-quartered in Norway, and the London-based E3G. After checking how the two groups are financed, I realised that Bellona has taken donations from Statoil and E3G from Shell. Having a “green” campaign financed by the oil industry is a bit like having an anti-racism campaign financed by the Ku Klux Klan.

I am sick and tired of Barroso posing as an action man on climate change. He and his flunkies are rubber-stamping plans written for them by the very peo-ple who are wrecking the planet. Genu-ine ecologists have been locked out of the room - indeed, not even told where the room is - when vitally important dis-cussions are taking place.

There is only one way of improving the situation: by public pressure. Building and sustaining a movement against the corpo-rate capture of politics are probably the most important challenges of our times.

EU Commission President Jose Manuel Barroso (L) congratulates former Bavarian Premier Edmund Stoiber on the occasion of his 70th birthday, at a reception in Munich, Germany, 28 September, 2011.|EPA/MArC MUELLEr

By David Cronin

The Venice Commission’s opinion on Hungary’s latest constitutional amendment

By Gutenberg

When constitutional controversy hits the headlines, you can be sure that the Council of Europe’s legal advisory group – the Venice Commission – is an important port of call.The Hungarian Parliament passed a fourth amendment to its con-stitution that sparked criticism this month from Strasbourg and Brussels to Washington DC – and provoked protest in Budapest.This latest change to Hungary’s “Fundamental Law” seems to curb the powers of Hungary‘s top court and reintroduce contentious measures its judges had rendered void in recent months.In a joint statement following its passage, Council of Europe Secre-tary General Thorbjørn Jagland and European Commission Pre-sident José Manuel Barroso said the amendment raises concerns with respect to the principle of the rule of law, EU law and Council of Europe standards. All eyes are now set on the Venice Commissi-on, after Secretary General Jagland requested an opinion from its experts on Hungary’s constitutional change.The European Commission for Democracy through Law – known as the Venice Commission, as its four annual plenary sessions are held in Venice – is the Council of Europe’s advisory group on con-stitutional matters. It was created in 1990 as an independent legal think tank, following the fall of the Berlin Wall, in order to help former communist countries draft new constitutions. Since then, the commission has played a leading role in adopting constitutions that conform to the standards of Europe‘s combined constitutional heritage. It regularly provides advice to governments on legal and constitutional reform. Commission members include legal scholars and former presidents, prominent current and former politicians, and judges and former judges of high courts. The commission’s glo-bal importance is reflected in its 11 non-European members. Most recently – in February 2013 – following a request by the United States government, the US was invited to accede to the commissi-on by the committee of ministers of the Council of Europe. The members and substitutes that make up the Venice Commission are not meant to represent their own countries but act as independent experts. A commission statute asserts that when a state is concer-ned by an opinion, individual members from this state do not have the right to vote. This provision maintains the impartiality of the members. The commission’s approach is “non-directive” – it stres-ses dialogue whilst seeking to shine spotlights on injustice. Before the Venice Commission issues opinions, it usually sends working groups to the countries concerned. These delegations meet with all relevant political actors and representatives of civil society including NGOs in order to ensure the most objective and thoroughly infor-med opinion. Opinions are often accepted by the states concerned, although sometimes resistance is encountered. Solutions are ne-ver imposed, but – should they occur – the commission is not shy about pointing out problems with or violations of the three pillars of the Council of Europe: human rights, the rule of law, democracy. Several examples arose in the latest plenary session held earlier this month in Venice. Members of the commission agreed an opinion on a law adopted by the Georgian parliament in December 2012 granting amnesty for political prisoners. Although the authorities’ resolve to address the situation quickly was praised, the commissi-on concluded that the law failed to comply with certain principles of the rule of law and suggested a more legally transparent mechanism involving courts to judge the cases of those still in prison for seemin-gly political reasons. The commission recently made headlines in Moldova, too, after it criticised a parliamentary decision to prohibit the use of communist symbols, declaring that that decision could violate articles of the European Convention of Human Rights gua-ranteeing freedom of expression.The Arab Spring has given the Venice Commission a new constitu-tional impetus. Tunisia joined the commission in 2010, for exam-ple, and over the past year, the commission has been working with members of Tunisia’s National Constituent Assembly to assist in drafting that country’s new constitution. The commission is wor-king with other countries in North Africa and the Middle East.Stay tuned then for the much awaited opinion from the Venice Commission on Hungary’s latest amendment to its constitution, but also for opinions other countries that will be adopted at the commission’s next plenary session in June 2013. For more informa-tion: http://www.venice.coe.int/webforms/events/

COUNCIL OF EUROPE

08 ANALYSIS NEWEUROPEwww.neurope.eu24 - 30 March, 2013

The European Securities and Markets Authority (ESMA) has found positives and negatives,

in its second annual report into the me-thods of credit rating agencies (CRA).

The findings are the conclusions found from a year of supervisory work from ESMA, building on the recom-mendations from last year, and ensuring that they comply with the regulations in place from the 2012 report.

Progress was identified by ESMA, a supervisory body for the agencies in en-suring financial stability in Europe, in the areas of the disclosure of methodologies and ratings, internal control resources, and involvement of senior management in governance and record-keeping prac-tices.

There was also improvements made following the 2012 report with internal control mechanisms, in establishing ap-propriate record-keeping and documen-tation processes, improving data quality, and in increased transparency in the pre-sentation of ratings.

Although the EU authority is not convinced that the agencies have placed all of their main requirements of the CRA’s in their organisations, with im-provements needed in several areas.

They include the consistent appli-cation and comprehensive presentation of rating methodologies, the empower-ment and resourcing of analytical and control functions, the monitoring and

surveillance of ratings, and the reliability of IT infrastructures.

The bank rating methodologies of Fitch, Standard and Poor and Moody’s were also stringently examined as part of the report.

In respect of the monitoring and re-view of rating methodologies, the imple-mentation of methodologies throughout the rating process, the internal mecha-nisms to ensure consistent application of rating methodologies, and the disclosu-re of methodologies.

Several shortcomings were exposed in the disclosures and the implementa-tion of changes in bank methodologies, due to what was found the ESMA put forward a raft of measures as part of an action plan for the big three CRA’s to follow.

These are to incorporate all relevant factors, models, assumptions and criteria in their methodologies, and to improve methodological exposures.

Adequate records with reference to analytical specifications of rating instru-ments must be maintained, with the de-velopment of proper procedures relating to changes in methodologies.

The internal review process of per-formance of the methodologies must also be improved, and to ensure mini-mum standards of information quality, that are delivered at the necessary times.

A spokesperson for ESMA ex-plained: “We have been concerned about some of the methodologies used, and what the public is being presented

with, and we wanted to recommend some changes with that. For example about the updating of information in a number of areas, we have identified the areas that need an action plan to rectify any short comings and failures.”

“We have always tried to maintain a cooperative relationship with the credit rating agencies, but I don’t know how they feel about some of the criticisms that we have put forward. It’s only our se-cond annual report, and it’s a fairly new process to both sides at the moment, it’s the first time that the agencies have been regulated by a European instituti-on, and we wish to have a collaborative approach.”

So far the big three rating agencies have responded calmly to some of the criticisms made in the report.

Moody’s spokesperson, Daniel Piels reflected:

“Moody’s is fully committed to com-plying with the European regulation, and to further enhancing the transparency, performance and processes surrounding our ratings as part of ESMA‘s continuing supervision of our industry.”

Meanwhile Standard and Poor have confirmed that they will enhance any part of the ratings process that was dee-med to be inadequate, and say they are committed to any improvements that the ESMA recommend.

Fitch have also agreed to address any issues raised in the report, and has also pledged that they will be receptive to meeting any regulatory obligations.

By Peter Taberner

The collaborative government

By Francisco Jaime Quesado

We live the time of the Collaborative Government. The stra-tegical reinvention of the Government, as “Platform of Cen-trality” where converge the dynamics of qualification of the different social actors, demands for a new order that cannot be solved only by single operative specifications associated with the so-called E-Government or organizational adjustments associated to specific arrangements in the different Public Departments. If it is important, as Francis Fukuyama does not stop to claim, that Civil Society is able to carry out a dynamic of leadership in the change processes, there is no doubt that the Government must be able to conduct and control such a challenge.The Government exists to serve the Citizens and they must understand this as a sense of urgency in a permanent Contract of Trust. When author of Reinventing Government, David Os-born speaks about the increasing opportunity and necessity of putting in the agenda the “Reinvention of Government”, he is clearly giving evidence to one of the central elements of the Competitive Modernity of Europe. It matters more than never to ensure the reposition of the Central Government as “enabler” of the organization and control of a New Europe and to use to advantage of the qualifying dimensions of knowledge, innovation and competitiveness as attributes capable of giving citizens a new confidence in Europe.In the New Global Economy and Innovation Society, the Col-laborative Government has a central role to play towards a per-manent insatisfaction with the creation of value and a focus on creativity. In a time of change, the Government can´t wait. The Government in Europe must confirm itself as an “enabler actor” in a very traditional system, introducing in the society and in the economy a capital of trust and innovation that is essential to en-sure a central leadership in the Europe of Lisbon, the effective platform for the strategic competetiveness for the future.The Government in Europe should be more and more a global actor, capable of driving to the European social matrix a unique dynamic of knowledge building and selling it as a mobile asset on the global market. To ensure this objective, the Government must aggregate in an innovative way the commitment of the so-called three T – Technology, Talents and Tolerance. These are in fact the “drivers of change” for the Government in Europe and civil society must be able to understand this new challenge and address effective answers to the different stakeholders of the system.David Osborne is right in insisting in the actuality and im-portance of the challenge of the Reinvention of the Govern-ment. It is essential in the modern Innovation Society to con-solidate strategical mechanisms that make us believe. This is the role of the Government. Government is today an attitude of promotion and qualification of the Active Citizenship. It matters to the Government to be excellent. It matters to the State to be an Operator of Modernity. That´s why, never as now the Reinvention of the Governmentis a challenge of and for all. The Reinvention of the Government is in a large sense the Reinvention of our Society.

Francisco Jaime Quesado is the General Manager of the Innovation and Knowledge Society in Portugal, a public agency with the mission of coordinating the policies for Information Society and mobilizing it through dissemination, qualification and research activities. It operates within the Ministry of Science, Technology and Higher Education

Questioning credit rating agenciesESMA report looks at last year for credit rating agencies

An employee of an exchange office adjusts the number of the Euro exchange rate in Budapest, Hungary 22 December 2011. The credit rating agency Standard and Poor’s on 21 December 2011 lowered its long- and short-term foreign- and local-currency sovereign credit ratings on Hungary to ‘BB+/B’ from ‘BBB-/A-3’, with a negative outlook. The downgrade followed a similar step taken by Moody’s Investors Service last month. The euro was traded at HUF 306.58 according the official exchange rate of the National Bank of Hungary. |EPA/PETER KOLLANYI

09ANALYSISNEWEUROPEwww.neurope.eu24 - 30 March, 2013

Pakistan’s Manipulation of the status of Gilgit- Baltistan

Gilgit- Baltistan is the northernmost geographical area of Pakistan occupied Kashmir. It was also known as the Nort-hern Areas in Pakistan. It shares borders with Afghanistan’s Wakhan Corridor in the North, China in the East and Nor-theast, Indian administered Jammu and Kashmir to the Southeast and Azad Kashmir to the Southwest. Gilgit Balti-stan is highly mountainous and covers an area of 72,971 km squared. It has a population of about a million people.

Gilgit Baltistan came into being by the merger of Ladakh Wazarat, Balti-stan Districtm Gilgit Agency and the states of Nagar and Hunza. Both Azad Kashmir and Gilgit-Baltistan make up the disputed region of Pakistan admi-nistered Kashmir, as per International organizations and the United Nations. In India it is known simply as Pakistan occupied Kashmir.

In 1947 when erstwhile India was divided into the two states of Pakistan and India, the state of Jammu and Kash-mir was under the rule of Hindu Raja Hari Singh, even though the majority population was that of Muslims. Upon the division of India Hari Singh kept his state of Jammu and Kashmir as an Independent state. It was neither a part of India nor Pakistan. But, Pakistan atta-cked his state with the help of the We-stern Muslim tribesmen in Kashmir and almost reached the current Kashmiri Capital of Srinagar. The Raja could not handle the onslaught and as per Gene-ral Mountbatten’s suggestion, asked for help from India. In return India asked the Raja to sign the Instrument of Ac-cession, which made the whole territo-ry of the princely state of Jammu and Kashmir – Indian Territory.

The then Indian Prime Minister Jawaharlal Nehru, asked the UN to in-tervene and the United Nations passed the “United Nations Security Council Resolution 47” which stipulated that Pakistan withdraw all its forces from Kashmir. This was to be followed by a plebiscite to decide the fate of the enti-

re state of Kashmir. But, the withdrawal never happened and the area which re-mained under the control of Pakistan is known as Pakistan administered Kash-mir and Gilgit- Baltistan is a part of the same.

Pakistan constituted the Sunni ma-jority areas into one administrative unit called Azad Kashmir and the Shia ma-jority areas of Gilgit and Baltistan were called the Northern areas of Jammu and Kashmir. These areas had been leased by the King Hari Singh to the British and once Pakistan overtook these areas, they were incorporated into Pakistan and have since been ruled directly from Islamabad.

The Pakistan government approved a self-governance and reforms package for the Northern Areas which entails that the strategically-located Northern Areas will have rights akin to those of Pakistan’s four provinces, (Punjab, Sind, NWFP, Balochistan). The “Gilgit- Bal-tistan Empowerment and Self Gover-nance Order 2009” also aims at giving the Northern Areas “full internal auto-nomy” and changing the region’s name to Gilgit-Baltistan. Under the new sys-tem, the Northern Areas will have a pro-vince-like status without actually being conferred such a status constitutionally. The region will vote for a legislative as-sembly, elections to which are to be held in the next three months and a chief mi-nister will govern the region, replacing direct rule by Islamabad

Since then various governments in Pakistan have tried to merge Gilgit-Bal-tistan into their political structure and the 2009 announcement by Pakistani government, which espoused the idea of Gilgit Baltistan Empowerment and Self-Governance, probably stemmed from the fact that the 2007 EU Kashmir report which was passed by overwhel-ming majority had put the Pakistani go-vernment under a lot of pressure.

In her report Baroness Emma Ni-cholson, who also was the Vice-Chair-man of the European Parliament‘s Com-mittee on Foreign Affairs at the time, deplored the outbreaks of violence in Karachi and said that the overwhelming need of the hour, is to „secure an inde-pendent justice system to address the situation of the people of Pakistan, and particularly those of AJK (Ajad Jammu and Kashmir) and Gilgit and Baltistan“.

She also stated that Pakistan has consistently failed to fulfill its obliga-tions to introduce meaningful and re-presentative democratic structures on its side of Kashmir and expressed her concern about the fact that the region enjoys no form of democratic represen-tation whatsoever.

People in Gilgit-Baltistan feel that in the name of “Empowering people”, the Pakistan government actually wants to annex Gilgit-Baltistan just as they had annexed the state of Chitral, which is now a part of Malakand Division of Pa-kistan.

By Jürgen Creutzmann MEP

Jürgen Creutzmann MEP, Member of the European Parliament, Member of the Group of the Alliance of

Liberals and Democrats for Europe from Germany

A new hope

By Andy Carling

Constructive Ambiguity

Tearful crowds gathered outside the Justus Lipsius building last Monday morning after news broke that Herman Van Rompuy was quitting politics after five years as European Council president. Strangely, when the mournful mass was told that Van Rompuy would not be leaving immediately, but staying on till November 2014, the sobbing and wailing grew even louder.His announcement was as discrete as all his public duties, slipped into an early morning Flemish TV show, it was several days before word spread that the Herminator was filing himself under retired. What better way to depart, this humble man who wasn’t even a household name in his own home.In the style that made him loved throughout the Union, he broke with tradition and became a recluse before retirement. It’s not known what his future plans will be, but few expect him to retire to Cyprus, mind you, it’s not as though he’d be recognized.Of course, this left the European leaders with something of a problem. How to replace the Chief Monk?Despite the eye watering salary, Hermie, as he likes to be known, interpreted the job as essentially Mrs Merkel’s private secretary crossed with being Stan Laurel to Barroso’s Oliver Hardy.Big shoes to fill. So, who next? The ‘election’ isn’t onerous, there’s no formal declaration of candidature, no hustings, manifesto or those tedious pledges the ordinaries insist upon. In fact, apart from dropping a word in the right ear the only actual effort is giving a speech to the Bilderberg Group and all you have to do there is praise the free market and fake concern for the poor. By poor, we mean middle class. Obviously, not the actual ‘got no money’ poor..The only real qualification required for the job is not being Tony Blair.There is only one front runner, who has had the good fortune to rejoin the job market recently: Joseph Aloisius Ratzinger.He is a global figure, known all over the world, having experience of leading a major world institution.He represents the Vatican City State, one of the smaller parts of the EU, but is associated with one of the larger states. This is geographical box-ticking par excellence.Excellent ‘waving at crowds’ skills. From the double upraised arms to the slight gesture, this man has it all covered.He is no longer German, which is a tremendous help, but he really is. He can write long, dense, unreadable tracts in a language that few understand. We’ll mark this as a ‘no change’ characteristic.If you can handle a papal conclave then summits should be a breeze, although the outfits are far less flamboyant, as the style tends towards ‘sober and suited’ rather than the ‘out and proud’ Cardinal about town look.There’s a chance he can pull off that bread and fishes trick, which will help feed the press without blowing the EU budget each summit. Though, the water, wine thing is a lot less welcome, as these summits to go on a bit and it’d be a bit obvious if the presidents and prime ministers were crawling out of the room to the press room, after a long session.But most importantly of all, the European People’s Party daren’t stand in his way.

A butterfly sits on a flower in a garden in Hyderabad, Pakistan, 17 April 2011. Scattered rain and thunderstorm occurred in provinces of Punjab, Khyber Pakhtoonkhawa, Upper Sindh, North East Balochistan, Gilgit-Baltistan and Kashmir in last 24 hours. |EPA/NADEEM KHAWER

10 ANALYSIS NEWEUROPEwww.neurope.eu24 - 30 March, 2013

By Yannos Papantoniou

Yannos Papantoniou, a former economy and finance minister of Greece (1994-2001), is President of the Center for Progressive Policy Research.

A global ‘new deal’ATHENS – The International Monetary Fund’s belated admission that it significant-ly underestimated the damage that austerity would do to European Union growth rates highlights the self-defeating character of “or-thodox” recipes to address the causes of the debt crisis that followed the financial crash of 2008-2009.

Conventional theory suggests that a sin-gle country (or group of countries) consoli-dating its finances can expect lower interest rates, a weaker currency, and an improved trade position.

But, because this cannot happen for all major economies simultaneously – one country’s (or group of countries’) austeri-ty implies less demand for other countries’ products – such policies eventually lead to beggar-thy-neighbor situations. Indeed, it was this dynamic – against which John May-nard Keynes fought – that made the Great Depression of the 1930’s so grim.

Today’s problems are compounded by a lack of sufficient private demand – particu-larly household consumption – in the advan-ced economies to compensate for demand losses stemming from austerity. During the last two decades, consumption drove these countries’ economic growth, reaching histo-rically high GDP shares.

Moreover, major advanced economies, such as the United States, Germany, and Ja-pan, face longer-term fiscal problems in the form of aging populations or oversize wel-fare states, limiting their capacity to contri-bute to demand management. Recent moves to ease monetary policy have been a step in the right direction; but, so far, they have not proved to be a game changer.

For domestic demand to act as an engi-ne of growth, policies should shift resources from investment to consumption. While the magnitudes involved are huge, they must be attained if an extended period of low growth, high unemployment, and declining living standards among the world’s poorest is to be avoided.

International economic policy coordi-nation should be significantly strengthened in order to deal effectively with changes on such a scale. Start with Europe. It is by now patently obvious that austerity and do-mestic reforms are not enough to pull the eurozone’s periphery out of deep recession. Growing awareness of the failure of current policies is causing social discontent, civil disorder, and political instability, with the recently concluded Italian elections and the growing popular resistance to Greek reform efforts serving as a bellwether.

Returning the eurozone’s peripheral eco-nomies to the path of growth requires more than structural reforms and fiscal consolida-tion. It also requires a substantial reform of

the monetary union’s system of economic governance, aimed at restoring financial stability and lowering borrowing costs, to-gether with a boost in external demand in order to compensate for the effects of auste-rity.

Reforming governance implies signifi-cant progress toward economic unification: centralising European debt through Euro-bonds, mobilising sufficient rescue funds, allowing the European Central Bank to in-tervene in the primary bond markets, and es-tablishing both a fiscal and a banking union.

This is a tall order, in view of the re-luctance of most EU member states to cede competences to European institutions. But Europe should move more decisively in this direction. Otherwise, speculation on mem-ber states’ national debt will persist, keeping borrowing costs at levels that are inconsi-stent with the conditions required to sustain economic recovery.

Concerning external demand, intra-Eu-ropean help in the form of reflationary poli-cies in stronger economies is unlikely to pro-ve sufficient, owing primarily to the fiscal and political conditions prevailing in Ger-many. Implementing a Marshall Plan-type initiative by mobilising EU budget resour-ces and additional lending by the European Investment Bank to finance investments in weaker countries could be an alternative, but

it lacks political support.On a global scale, neither the US nor Ja-

pan is in a position to provide significant ex-ternal stimulus. Only the emerging and de-veloping economies of Asia could effectively contribute to lifting global demand through a coordinated effort aimed at boosting do-mestic consumption, which, in turn, would stimulate additional investment. Recent IMF experience suggests that, through ap-propriate coordination, private funds could be mobilized for big private-public part-nership projects linking demand expansion with infrastructure investment.

In other words, a global “New Deal” – combining policies designed to achieve an orderly realignment of consumption and investment worldwide – seems to be re-quired. The advanced economies should promote productivity-enhancing structural reforms with renewed vigor. The eurozone should solidify its currency union. And the emerging and developing economies should support domestic sources of growth.

For such a deal to become possible, cer-tain preconditions must be met. First, inter-national policy coordination by the G-20 must be tightened by creating a permanent secretariat to make policy proposals and recommendations concerning macroeco-nomic and financial developments. The se-cretariat should actively cooperate with the

IMF to benefit from its analysis, notably re-garding exchange rates.

Second, global financial reform must proceed at a faster pace. The financial sector requires tougher regulation, strengthened supervision, and internationally consistent resolution mechanisms to address the pro-blems posed by very large, global institu-tions that are considered too big (or too complex) to fail. Such reform is essential if the international financial system is to me-diate the sizeable resource transfers that will underpin the required changes in the struc-ture of global demand.

Finally, a new trade pact – possibly, but not necessarily, within the Doha Round – is needed to ensure the major trading powers’ access to foreign markets. This is critically important for inspiring confidence in Asi-an countries, which might be persuaded to favor domestic, as opposed to external, sources of demand. Moreover, trade liberali-sing will also increase consumer confidence worldwide.

The time is right for a new global settle-ment that targets growth, addresses crisis conditions in certain parts of the world, and rebalances the global economy to set it back on a path of strong and steady growth.

Copyright: Project Syndicate, 2013. www.project-syndicate.org

The loading terminal “Eurokai” in the harbour of Hamburg, northern Germany. A contraction in the German economy at the end of last year was a hiccup, analysts said on 22 February, 2013, as data showed business confidence in Europe’s economic powerhouse soaring this year. |AFP PHOTO /

FABIAN BIMMER

11EU-WORLDNEWEUROPEwww.neurope.eu24 - 30 March, 2013

The World Health Organisation (WHO) says that 1000 people are falling victim to tuberculo-

sis every day in Europe, over 380,000 a year.

Dr Roberto Bertollini MPH, the WHO Chief Scientist and representa-tive to the EU says that while many, par-ticularly in western Europe may view the disease of one of the past, “The problem in Europe never disappeared, some countries still have problems with it, but when we’re talking about Europe we’re also including the former Soviet states so it’s much larger than the EU.”

He adds, “Today, we have around 380,000 new cases a year. There are some EU countries that are a concern and a number of cases that are resi-stant to antibiotics. We have half of the world’s cases of such multi-drug resi-stant TB and some that are extremely resistant to treatment.”

TB has often seen described as a di-sease of the poor, Bertollini says, “This is a problem that we should address with more dedication and energy.”

While Bertollini feels that TB can-

not be entirely eradicated, because many can ‘carry’ the disease without showing symptoms or being infectious, only a small percentage are taken ill by the di-sease. How many people are infected? “Around two billion worldwide.”

The more worrying drug resistant strains are of great concern, brought about by people not continuing their treatment for the full six months, says Bertollini, and they are much more costly to treat.

New treatments are becoming available that will make treatment ea-sier says Bertollini, pointing out that the latest medical breakthroughs to get approval is a course of treatment can diagnose the illness in just two days, instead of the two months it has taken. He also says that a new treatment will cut the treatment time down from six months to just two.

“I urge MEPs to not only discuss these innovations in Brussels, but back in their constituencies and countries, to encourage health care workers to be aware of the disease and the new treat-ments.”

However, the core of the strategy to, if not beat TB, to lessen its impact and

turn the disease into a minor worry, is access to healthcare and treatment, free of charge or at as low a fee as possible.

There has been concern, amplified by Europe’s political extremes, that im-migration is bringing the illness back into Europe. The WHO expert says that it is not the case, for the most part, of people coming into Europe with TB, rather migration within the EU.

“We protect ourselves by being op-en and inclusive,” he says, arguing that migrants and people on societies mar-gins need to be able to feel able to get health checks and medicine, either free or at a price they can easily afford, wit-hout fear of being stigmatized or being worried about immigration police or similar.

As Bertollini says, diagnosing and treating TB is far cheaper than coping with a wider outbreak, which could be the consequence of not prioritizing fighting the illness.

In particular, the WHO doctor says that public service cuts in budgets af-fecting fighting TB would be a “false economy” bringing about extra costs and, more importantly, an increase in suffering.

WHO calls for access to treatment

By Andy Carling

1,000 cases of TB a day in Europe

TB or not TB? Afghan women receiving treatment for the disease in Kabul. | EPA/S. SABAWOON

A government for all?The European Commission is set to become politicised; news, no doubt, to that those who just presumed it already was. It is, after all, the body responsible for initiating European legisla-tion. However, new rules relating to the way the commission president is to chosen will, according to Justice Commissioner, Viviane Reding, add a new political bite to the institution.From 2104 onwards European political parties will be able to nominate their own choice of candidate for president; cur-rently the commissioners are nominated by member states, and who gets what portfolio and what position is thrashed out in a back room deal. While this will still largely remain – why abolish a grand tradition – the idea is to bring about a greater public involvement with EU decision-making, with citizens, albeit politically-engaged citizens, being able to have a say in who gets the commission‘s top job.There are some, including former commissioner, Romano Prodi, who feel that moves like this will lead to a kind of po-litical gridlock at the heart of the EU executive. Others, like Reding, disagree. Indeed, she suggests that one day the Eu-ropean Commission will be scraped in favour of a ‚European government‘.She wasn‘t being literal, instead speaking in semantic terms; people, she reasons, understand better the functions of a go-vernment, while the workings of a commission are sometimes vague or difficult to communicate to the public.Whether or not, literally or semantically, the EU gets its go-vernment, the logical conclusion of the federalist argument, the future will decide.But Reding may have a point; EU policymakers, politicians all, know the game, both in real and linguistic terms. During a recent debate on the EU‘s economic outlook, attended by current European Commission President, Jose Manuel Bar-roso, the MEP Stephen Hughes was in a bullish mood, his ire centred on the “consistently wrong” policies of Economic Commissioner, Olli Rehn. He contended that, in domestic terms, if Barroso was a prime minister, and Rehn his finance minister, he would certainly have relieved him of his portfo-lio through a cabinet reshuffle (something that only really happens, in EU terms, for political opportunism – a return to national politics, for instance). But the comparison was clear and easy to understand.At a time when the European institutions debate divisive issues like the Union‘s long-term budget and the common agricultural policy, as well as the more recent constitutio-nal changes in Hungary, there have been calls from within the parliament for new kind of political thinking; for MEPs to think and act only in terms of Europe, a political process removed from the domestic party line. Daniel Cohn-Bendit, leader of the Greens in the European Parliament, for examp-le, has been staunch in his criticism of those “Trojan horses”, who infect the house with their domestic agendas. Others have made similar remarks.A separate way of behaving for MEPs, and, presumably, party- or government-sponsored commissioners, may never, like the European government, transpire. True, the politics of Europe, its institutional and legislative set-up, is different to national sys-tems, and does require some form of adaption from its partici-pants. But the germ of something is there. Now for the lengthy debate and byzantine paper trail of legislation. To the polls. Concordia

TRANS-EUROPE EXCESS

12 EnErgy & climatE NEWEUROPEwww.neurope.eu24 - 30 march, 2013

EU calls for a more European approach to renewablesOn 19 March, the European

Parliament’s Energy Committee ad-opted a non-binding resolution on

renewable energy, calling for a more integra-ted system at EU level for promoting renew-ables, the issue of adopting new targets for the period after 2020 and possible solutions that could help boost investments.

“The report gives a realistic overview about the challenges ahead for renewable en-ergies, but also the opportunities they bring. We all expect the share of renewables to grow, but we will only be able to accommodate such growth if the required infrastructures are in place. Intermittent renewables need not only flexible back-up and energy storage, but also a modernisation of the existing grid-infrastruc-ture. That is quite expensive, so we should do everything we can to bring costs of renewables down. Our current arrangement with a wide variety of different support mechanisms is certainly not ideal, especially with regard to

the internal energy market. In the future we should find a more European approach. The enormous potentials of the different Member States have to be used,” rapporteur MEP Her-bert Reul from Germany said.

As a result of disparities between national market features, different potentials, as well as different stages of technology patterns and maturity, a wide variety of different schemes for promoting renewables currently coexist in the EU, says the text. This variety creates pro-blems such as inefficiencies in cross-border electricity trading. MEPs stress that a more integrated system at the EU level could help to provide a more cost-effective framework and they ask the Commission to assess the poten-tial of an EU-wide mechanism for promoting renewables. 

Members of the Energy Committee suggest that targets and milestones should be set for the period to 2050, and given Commission‘s assumption that renewables

will have a share of more than 30% in the EU‘s energy mix, MEPs suggested that the EU should try to achieve an even higher sha-re, while asking the Commission to assess the costs and benefits of introducing a mandatory EU-wide target for renewables for 2030. An amendment calling for a “binding target of 40-45% for 2030” was rejected with 18 votes in favour to 31 against.

Access to capital for investments is a cru-cial factor in the further deployment of renew-

ables whilst there is an increasing need for a stable policy framework to provide economic guarantees concerning the availability of reser-ve capacity mechanisms as well as for system and balancing services, says the text. Energy Committee members call on the Commission to take action to remedy obstacles to trade to help EU companies to access non-EU markets and highlight the need to facilitate a competi-tive environment for the operations and inter-nationalisation of SMEs.

ASTANA - The United States and India may not be the only main “conductors” of the Turkme-nistan, Afghanistan, Pakistan and India Pipeline (TAPI), but China as well, a political analyst and expert from Washington, Yuri Sigov said.

“It is not so much for the United States to be the main ‘conductors’ of the TAPI project, but China mainly, and on the other hand - India, whose presence in the Central Asia and Caspian region is extremely weak,” [Sigov said in a letter responding to the request from New Europe.]

He recalled that the TAPI pipeline is a very expensive project. And the question was who would invest the money and how ready would the gas market be to welcome the emergence of such a pipeline as TAPI?

According to him, many foreign potential investors were held back by Turkmenistan‘s gu-arded stance.

“However, there is a desire of the Turkmen to promote the project in the international arena. And there is a pragmatic approach of investors, who in the case of the TAPI will risk not only billions of dollars, but political fallout. As for the most ‘financial’ participants of the project, the US energy companies, the government ‘hinted’ that for them it would be more profitable to par-ticipate in such a venture,” the expert said.

According to him, the White House can not officially tell the management of the same Che-vron or Exxon-Mobil to invest in the Turkmen-

Indian gas pipeline.“But given the long-term interest of the Uni-

ted States in Afghanistan even after withdrawal of a significant number of the forces of the coa-lition, guarantees by Washington for a major American business is not an empty phrase,” he stressed.

At the same time, according to Sigov, it should be noted that Washington may advise their companies to participate in TAPI, but can-not guarantee the government of Turkmenistan, which is again extremely wary to any possible expansion of the US business presence in the country.

“Besides, no one will give guarantees to the Americans on pipeline security in Afghanistan. So that the good intentions of the US business to TAPI are not all that reliable for their real partici-pation required,” said Yuri Sigov.

The expert said that American companies have already indicated their interest in participa-ting in the Trans-Asian gas pipeline. It is getting permission from officials in Ashgabat to develop the Turkmen shelf of the Caspian gas that is the next step. “And it is not so much TAPI, but far more significant economic interests of the Uni-ted States in the region, while they are not really approved by Turkmen side, and should adequa-tely disturb the neighbours of Ashgabat in Cen-tral Asia (and not only there),” he stressed.

According to Sigov, to date, China and seve-ral Arab countries are already well positioned in the Turkmen energy sector. In his view, for the

United States Turkmenistan is still attractive, but remains a very specific energy market, where personally, Turkmen President Gurbanguly Ber-dimuhamedov is not ready to let US companies roam on a large scale.

“But the business part of India and Pakistan in the project is beneficial for them and for Turk-menistan. Unlike the Americans and represen-tatives of Western European companies (who will surely indirectly remind Ashgabat of human rights, democracy, freedom of the press and po-litical party issues through political leadership of their respective country), India and Pakistan will be excited only by the business aspects of the proposed project,” Sigov said.

According to the expert, the plan for Turk-menistan is more important at this stage to try to enlist the financial support of these two coun-tries, as well non-gas exporters of the Persian Gulf (Saudi Arabia, Kuwait, Bahrain), for whom such a project could be a good investment of available free funds. As for Russia, according to Sigov, it would participate not only in the TAPI, but, most likely, will do its utmost to prevent im-plementation of the project.

“After all, in fact, Turkmen gas, which has recently been supplied exclusively to foreign markets by Ashgabat, is now diverted to other routes. But the Russian side, however, remains with nothing. Similarly TAPI is disadvantageous for Qatar and the UAE, who are working with the Indian gas market, and they do not want to get a competitor of Turkmenistan even distant

from India,” he stressed.Meanwhile, according to Sigov, the Chinese

are observing TAPI, for them it does not matter that Turkmenistan along with the Chinese tube can supposedly fill in trans-Asian gas pipeline in sufficient quantity.

“Here we have to take into account the fact that China intends to invest seriously and work in Afghanistan and, accordingly, if this country at least stabilises their economic position, this will then make it much easier for Chinese companies to conduct their affairs in Afghanistan,” the ex-pert said.

According to him, Beijing is now offering Ashgabat to sign a new agreement on export of gas which goes by a pipeline of 1,830 kilometres length to Xinjiang Uyghur Autonomous Region from Turkmenistan. This year, capacity of the pipeline will reach 30 billion cubic metres of gas, also the Chinese expressed desire to invest in one more gas pipeline Turkmenistan-Afghanistan-Tajikistan-China, or, if no luck with Afghanistan, to build a similar pipeline through Kazakhstan and Kyrgyzstan.

“It is also worth bearing in mind that China would like to raise the volumes of gas from Turk-menistan up to 65 billion cubic metres by 2015. Each country in Central Asia (and they will all, in that case, be involved in these ideas) will be very tightly connected with the Chinese energy mar-ket, which will give Beijing another important lever of influence both economically and at the right time - politically,” Sigov concluded.

China could help in TAPI pipeline implementationBy Kulpash Konyrova

Illustration shows the solar screens on the roof of the prison at the inauguration of two new wings of the prison in Wortel, 9 October 2012. On 19 March 2013, the European Parliament’s Energy Committee adopted a non-binding resolution on renewable energy, calling for a more integrated system at EU level for promoting renewables. |BELGA PHOTO LUC CLAESSEN

13EnErgy & climatENEWEUROPEwww.neurope.eu24 - 30 march, 2013

On 19 March, the Trans Adriatic Pipeline (TAP), and members of the Shah Deniz Consortium selected  Société Générale Corporate & Investment Banking  to provide financial guidance to the project during its preparatory and construction phases, TAP said in a press release. The decision was made by TAP, its sharehol-ders Axpo, Statoil and E.ON Ruhrgas, and Shah Deniz Consortium members SOCAR, BP and Total as potential inve-stors in TAP.

Société Générale will initially assist TAP’s management team with structu-ring the pipeline‘s project finance strate-gy, carrying out a bankability review and formulating a credible and deliverable

funding plan.Following the Shah Deniz

Consortium’s selection of its preferred pipeline to Europe and TAP’s sharehol-ders’ Resolution to Construct, expected in September 2013, Société Générale will support TAP in the implementation of the plan and the raising of any required capital, TAP said.

“I am pleased that TAP, its sharehol-ders and members of the Shah Deniz Consortium, have worked together and come to a final decision in selecting a fi-nancial advisor. Today’s nomination is another step in making the Trans Adriatic Pipeline a reality. TAP’s financial strength is well-known - our offer remains the most

strategic and compelling commercially, not least because we are the only pipeline that does not require public funds,” TAP Managing Director Kjetil Tungland said.

“As we approach the next stage in TAP’s development, Société Générale will support us in structuring financing for the project, enabling us to deliver the highest value to our customers and investors. We’re delighted to be working with an organisation of their pedigree and expertise. This appointment is further va-lidation of the strength of our proposal.”

TAP’s shareholders are Axpo of Switzerland (42.5%), Norway’s Statoil (42.5%) and Germany‘s E.ON Ruhrgas (15%).

A joint Ukrainian-Polish conference on shale gas production in Ukraine and Poland will be held in Warsaw on 11 April, Interfax quoted acting director of the Ukrainian Foreign Ministry‘s In-formation Policy Department, Yevhen

Perebyinis, as saying. “The event will be held under

the auspices of the Ukrainian-Polish Chamber of Commerce and with the assistance of the Foreign Ministry and the Economy Ministry of Poland,” Pe-

rebyinis told a briefing. The main subject of the event will

be shale gas production in Ukraine and Poland, as well as co-operation bet-ween the two countries in this sphere, the Foreign Ministry said.

Putin, Xi to focus on oil and gasMOSCOW - On 22 March, new Chi-nese President Xi Jinping is expected to  push for  more oil and  gas supplies from Russia and reconfirm increasingly warm bilateral ties when he arrives for a three-day visit to Moscow.

Xi is expected to meet with Russi-an President Vladimir Putin and Prime Minister Dmitry Medvedev and  could see as many as 30 agreements signed, mostly in the energy sector.

Despite competition for influence in the former Soviet states of Central Asia, ties between Moscow and Beijing have warmed recently. However, ana-lysts warned against expecting major breakthroughs in energy talks, especial-ly on the issue of gas prices.

Chinese Deputy Foreign Minister Cheng Guoping said the  two sides would strike deals on increasing oil tra-de and building a natural gas pipeline.

Russia and  China are considering a project that would see China finance the construction of a branch of a major new pipeline in  the Russian Far East, Gazprom’s Chairman of the Board of Directors Viktor Zubkov said.

Russia and China are also consi-dering building an  oil refinery in  the Chinese port city of  Tianjin, a  plan that would require additional supplies of  Russian oil, Deputy Prime Minister Arkady Dvorkovich said.

China and Russia have been involved for years in talks over Russia providing as much as 68 billion cubic metres of gas

per year in a new pipeline have bogged down over pricing. “Gazprom’s talks with China are quite complicated,” Dmirty Abzalov, vice president of the Centre for Strategic Communication, said in Mo-scow on 22 March at the third day of a forum organised by the Civic Chamber of the Russian Federation, focusing on investment attractiveness of Russia. “To-day the new president of China will visit Russia but the issue of gas will not be discussed because they could not agree on the price of gas,” he said, explaining that China wants to pay about $150 per 1,000 cubic metres while Germany pays around $450 per 1,000 cubic metres. “The difference is too big,” he said.

Russia is eager to boost oil and gas sales to  China and  reduce its de-pendence on  the European market. “Co-operation with China pressed talks with Europe,” Abzalov said, responding to a question from New Europe.

However, Gazprom has shifted the focus of its negotiations with China from the Altai Pipeline to a more rea-listic eastern route, the so-called Power of Siberia gas pipeline. “All new deposit will be introduced in East Siberia. From a logistic point of view it will be easier to deliver this gas to China,” he said, ad-ding that internal consumption in Chi-na is growing much faster than demand in the EU.

China’s President Xi at the Great Hall of the People in Beijing, 19 March 2013. Xi was expected to start a three-day visit in Moscow on 22 March. |AFP PHOTO/POOL/ANDY WONG

South Stream lessens Gazprom’s interest in Ukraine

By Kostis Geropoulos

Energyinsider

MOSCOW - Russia may take part in a consortium to manage Ukraine‘s gas transport system (GTS) if its interests in this pro-ject will be well ensured, Russian Prime Minister Dmitry Med-vedev has said. Moscow is concerned that EU energy regulati-ons may hurt Russian gas monopoly’s interests. Medvedev said an alliance between Russia and Ukraine may exist only if Ukra-ine leaves a large number of institutes, including the agreement on joining the Energy Charter. “If Ukraine is not interested in this, then, please, we will develop in our own way and Ukraine may remain a part of any international agreement,” he said.Gazprom has started building the South Stream gas pipeline that will bypass Ukraine.“As to the consortium, Ukrainians should understand them-selves what they need. If they need this consortium, either bila-teral or trilateral, they should make us interested in taking part in it,” Medvedev told reporters.This proposal will be interesting to Russia, if the interests of Gazprom and the state are guaranteed in the consortium, he said. The guarantee deals with the fact that “we will not get in a situation when they in certain conditions will just oust us from the consortium or will find us falling short of certain European rules or provisions of the agreement that defines [Ukraine‘s] relations with the Energy Charter,” the Russian premier said.The talks on Ukraine’s gas pipelines are underway. “Our Uk-rainian colleagues send us signals from time to time, but there is nothing but signals,” Medvedev said. “If there are interesting ideas how to work, if we feel that we are viewed as a full-fledged long-term partner, we will of course continue this conversati-on,” he said.Ukraine has tried to convince Russia to lower gas prices. But Medvedev and Russian President Vladimir Putin have tied lowering gas prices to Ukraine joining the Customs Union of Russia, Belarus, and Kazakhstan.On 19 March, Ukrainian Prime Minister Mykola Azarov told a press conference in Kiev that Ukraine intends to obtain obser-ver status in the Customs Union.Azarov also said the creation of the trilateral consortium for the management of Ukraine‘s GTS depends on European partners.Konstantin Simonov, head of Russia‘s National Energy Security Fund (NESF) in Moscow, told New Europe in Moscow that, according to his sources in Ukraine, Kiev is also looking at the possibility of leasing Ukraine’s GTS to Russia but the terms Kiev will ask for have not been decided.Dmirty Abzalov, vice president of the Centre for Strategic Communication, told a forum organised by the Civic Chamber of the Russian Federation on 22 March that Ukraine does not want to sign the Custom Union agreement anytime soon.After South Stream is constructed, Ukraine’s GTS will not be needed, Abzalov said. He noted that Russia proposed three years ago to form a consortium to upgrade Ukraine’s gas transit system and it was rejected. “After we begun South Stream we don’t need that consortium. At the latest talks, the Russian party is not as interested because so much investment is involved in the under-water part of South Stream,” he said. “If we pour so much money in South Stream and in parallel become involved in the consorti-um to upgrade Ukraine’s pipelines it will not be rational,” he said. KGeropoulos@NEurope.eu follow on twitter @energy insider

TAP, Shah Deniz pick Société Générale as financial advisor

Warsaw to host Ukrainian-Polish shale gas conference

By Kostis Geropoulos

14 EU-WORLD NEWEUROPEwww.neurope.eu24 - 30 March, 2013

Africa’s image is changing, and rightly so. Perceived for many years by the Western world as a continent mar-

red by conflict, hunger and poverty, Africa is turning into an economic poster child. According to the IMF’s latest World Econo-mic Outlook, Africa is home to seven of the 10 fastest-growing economies in the world. But Africa needs its partners in the West to accelerate this growth promise. Investing in Africa at this critical moment in time is not just a business opportunity; it’s also a policy opportunity.

We are at a juncture which makes invest-ment in Africa good business. Our economies are growing, financial markets are getting stronger and new and smart partnerships are being used to unlock agricultural potential. Up until recently, we all looked at agricul-ture through a development lens. We need a fundamental shift in approach if we want to unlock its potential for wealth generation. We must look at agriculture as a business, not as a development program.

Increasing agricultural productivity is the pinnacle for realizing sustainable growth, not only to reduce the hunger still affecting one quarter of our population, but also to cre-ate jobs. We need to solve the paradox that despite an abundance of arable land, Africa remains a net importer of food.

As the continent’s most populous nation, Nigeria is tackling this challenge through its Agricultural Transformation Agenda aimed at expanding food production and creating jobs. We want to sustain the momentum in-itiated by the above average GDP growth ra-tes we have achieved over the past decade by broadening the base of the country’s econo-mic success. We have set course to diversify our economy from dependence on crude oil to agriculture. With two thirds of our peo-ple still living in rural areas, only targeted investments in agricultural value chains and commodities sector will ensure employment creation and growth as well as lead us on the path to food security.

Significant foreign and local investments have already led to a number of proven suc-cesses in job creation as well as expanding domestic food production, reducing import

dependency, and expanding value addition to locally produced agricultural products. Our approach may well be the model for the whole region showcasing the positive role the agricultural sector can play in economic di-versification, building resilience and reducing need for dependency on development aid.

There is recognition at the international level of the need to reform the global food system and to emphasize the role of African agriculture in advancing the food and nutri-tion security agenda. Given the enormity of the challenges ahead of us it will be critical that the issue remains a top priority for the international community, especially at the forthcoming G8 Summit. There is still room for improvement especially when it comes to advancing the food security pledges made at L’Aquila G8 in 2009. Donors continue to play an important role in food security but the emergence of new resources for develop-ment may be the impetus we all need. Private sector-led initiatives like the New Alliance

for Food Security and Nutrition put Africa in charge of its own development on our own terms.

Making Africa an investment destination of choice, especially in the agricultural sector, will help us advance the global food security agenda and realize our future growth potenti-al. Shrinking aid budgets, resulting from the impact of the financial crisis on Europe’s eco-nomies, underline the critical role and con-tribution of the private sector in the global development space. While the EU recently decided not to cut aid budgets for poor coun-tries as part of its multiannual financial frame-work, maintaining development funding re-mains a challenge for Western governments, who are starting to feel the heat of long-term austerity measures. But to move away from a dependency on aid and into self-determined growth, Africa must also be given the possibi-lity to develop agriculture into a viable future export sector.

While we know that we need to drive regi-

onal integration and gradually open our mar-kets internationally, we must be clear about the terms for granting this access in order not to negatively impact our economies in terms of employment, growth and household inco-mes. Coming to a fair and equitable solution will also help advance recent efforts to jump-start the stalled Economic Partnership Agree-ment negotiations between West Africa and the EU. What we want from Europe is a real partnership and expanded access to markets for African farmers to stimulate economic growth, create jobs, reduce rural-urban mi-gration and improve security.

Ultimately, a smart policy that helps Afri-can farmers prosper can ensure domestic and global food security. Only if we all pull in the same direction will Africa be able to realize its full potential to be the world’s next region of growth.

Dr. Akinwumi Adesina, Minister of Agriculture of Nigeria

‘How does one govern such a big country like China?’

He has just made his first overseas visit since being elected the new President of China. As well as a state visit to Russia, Tanzania, Sou-th Africa and the Republic of the Congo, Xi Jinping also attended the fifth BRICS leaders´ meeting.In a recent interview, he talked about China‘s policies and position on its bilateral relations with Russa. China-Africa relations, BRICS cooperation and China‘s reform were also up-

permost in his thoughts.He said, “During my meetings with some fo-reign leaders, they asked me in amazement: How to govern such a big country as China? Indeed, it is not easy to govern a country with 1.3 billion people. To get to know the situa-tion is already a difficult task. I often say, it takes much effort to know China and it is not enough to just visit one or two places. China has 9.6 million square kilometers of land, 56 ethnic groups and 1.3 billion people. Thus, to get to know China, one needs to avoid the mi-

stake of drawing conclusions based on partial information.”He went on, “As an ancient Chinese proverb goes, ´Prime ministers used to be lowly offi-cials; great generals rise from the ranks.´ The system for selecting officials in China requires local work experience. For instance, I have worked in the rural areas as the Party branch secretary of a production team. I have also served in county, municipal, provincial and central governments. Extensive experience gained form working at the community-level

enables an official to develop a people‘s per-spective and know what the country is truly like and what the people need. To accumulate experience and professional knowledge and enhance skills and capabilities in the course of practice is essential to doing one‘s job well.“He conceded that “much work” needs to be done to meet people‘s daily necessities, ensu-re smooth running of the society and normal functioning of state organs, and in building and managing the governing party.

By Dr. Akinwumi Adesina

By Martin Banks

Africa’s moment, Europe’s opportunity

What Europe has to learn from Africa. The Nigerian Minister of Agriculture writes this week in New Europe on how there is quite a lot to be learnt, still. |PHOTO/AFP

15EU-WORLDNEWEUROPEwww.neurope.eu24 - 30 March, 2013

West failing to halt flow of illicit funds

Election observer warns aid cuts could cause instabilitySierra Leone made real progress, needs further support

The western world is “failing” to curb money laundering and corruption in the developing world, a banking ex-

pert has said.Speaking at a hearing in the European Par-

liament in Brussels on 19 March, Raymond W Baker, director of Global Finance Integrity, an international organisation that aims to eradi-cate the illicit cross-border flow of illegal mo-ney, said that despite intentions, instances of illegal money-flow “is continuing to rise.”

“We are not succeeding, we are failing,” he said of efforts stem the practice. Cross-border crime, he says, “has exploded in the past 20 or 25 years.”

According to Baker, the failure is perpetu-

ated by the continued insufficiently regulated existence of the shadow banking system, no-banking financial institutions, such as hedge funds, that allows for the proceeds of corrupti-on or criminal activity in the developing world to be transferred to western accounts. “As long as we hold open the shadow banking system, we cannot assume to curtail corruption,” he says, adding that over the past couple of de-cades “billions of dollars has moved out of the developing world into western economies” through the drug trafficking, counterfeiting, trade-based laundering and the like.

Illicit money, he says “flows through the shadow financial system which we created.” for example, he says, in the 1960s there were “only a handful of tax havens,” now “there are

more than 60 spread around the globe.”“It is a fallacy that we can hold on to our

shadow banking system, while getting others to give up theirs. We can succeed only when we address all aspects,” he says, with incre-asing emphasis on Europe taking a lead in ending cross-border money laundering (“the centre of gravity has moved to Europe from the US,” he says).

He says that there are two main areas that need to be addressed tax fraud and beneficial ownership, the declaration of who actually own accounts. “There is no argument in favour of not knowing who are are doing business with,” he says, adding that eliminating shelf compa-nies (“what a radical thought!”) should be a key step in stamping out money laundering. Accor-

ding to Baker, a clause in the USA Patriot Act, brought-in after the 11 September attacks, and which makes it illegal for a US financial insti-tution to receive money or do business with a shelf bank or company, has reduced the global number of such institutions “from thousands to a handful, just like that.”

He also says that initiatives such as pu-blic registries of financial entities - “the state and the public have a right to know who own what” - and a clamping down on the mis-pri-cing of trade that defrauds various tax reve-nues, such as VAT and excise duties also need to be shored-up in Europe.

“I would encourage the EU to strengthen these two aspects, fraud and beneficial owner-ship,” he says.

The European Union must continue to sup-port developing countries after the elections are over, Richard Howitt MEP (S&D,UK) told the parliament’s Development committee (DEVE).

The British deputy was Chief Observer for the European Union Election Observation Mission in Sierra Leone and saw for himself how the fragile state’s status as the bottom ranked nation in the World Health Organisa-tion affects people, with over a third of the 30 strong team of long-term observers, having to be evacuated suffering from typhoid or mala-ria. Howitt said, “You can see the deep pover-ty of the country was brought home to us as Europeans, which is the everyday reality for the citizens of Sierra Leone itself.”

Presenting the final report from the elec-tion observers, Howitt noted that the election was certainly in a “post-conflict situation” and that, although there were some incidents of vi-olence, “these incidents were sporadic, didn’t spiral out of control and - the biggest test of all - no-one died. It enabled us to conclude that the elections were largely peaceful.”

Many people had told Howitt that the pre-sence of the EU mission had given them con-

fidence in the election, howitt added, “There is no better testimony to the role the EU can play.”

The MEP called for European support to Sierra Leone in particular for voter education, better representation of women, for regulation of campaign funding and judicial reform.

He told the committee, Sierra Leone is a country where there was the first ever peace-ful transfer of civilian power anywhere in Sub-Saharan Africa. It is important in the country but also outside of it, that the conditions for a similar transfer - at this and at future elections - are maintained.

I want to say there is a strong case for the EU to sustain its engagement with the coun-try, even more important - as is likely - if the UN downgrades its own activities there in the next twelve months.

There is no inevitability that peace and democracy will be maintained. And when there is much discussion about how we ‚draw down‘ military resources after military inter-vention in countries abroad, this is a country where we have to be very careful about how we ‚draw down‘ development resources, kee-ping in mind the very same objective of doing so whilst wanting to maintain peace as well as democracy.”

The City of London, the UK’s financial hub, and one of the European locations for suspected illicit money transfers from the developing world. |AFP PHOTO / CHRISTOF STACHE

By Cillian Donnelly

By Andy Carling

16 ARTS & CULTURE NEWEUROPEwww.neurope.eu24 - 30 March, 2013

Liverpudlians take pride in the unique musical and artistic culture of their city. It’s one that’s distinctively deta-

ched from the rest of the UK and has its roots in the history of one of the great world ports.

“They really look at themselves and belie-ve they have an identity that is separate from the UK and the rest of England,” said Patrick Henry, the director of the festival. “It‘s con-nected in it’s own right to the international community.”

It is in this attitude and spirit that Liverpool’s international photography festival LOOK/13 was created and is ready to kick-start this upcoming summer.

“We’re building upon a very strong infra-structure that already exists here in Liverpool,

said Henry. “There‘s a strong foundation for the arts and especially photography in this re-gion.”

LOOK/13 is very much a grassroots fe-stival that is meant to draw upon Liverpool’s cultural individuality. The historical issues however, lurking in the shadowy corners of Liverpool are an undeniable part of for-ming that artistic richness. The decline of the docks, economic slumps and 1980s riots nearly gave political leaders justification to abandon the city and leave it to its seemingly inevitable ruin.

But the push to see the city excel as a Euro-pean cultural capital is evident. 2012 was the city’s year to regenerate, politically and cultu-rally. The inaugural LOOK festival happened in 2011, and now that it’s back this summer, Henry said there is a reinvigorated enthusi-

asm and support for photography. “People have had a bit of time to reflect

and think of how they would respond to what we did in 2011,” he said. “And the thing is the responses are each vibrant and diverse and bringing a lot back to the culture of the city and the art of photography.”

“There’s a bigger array of spontaneous fringe events that are popping up,” Henry said. “Festivals are about things that cause a sense of occasion and event, so people have respon-ded to LOOK/11 and what we’re doing by getting their own events into the LOOK/13 festival month and it’s creating a bigger cultu-ral impact.”

The most striking evidence of the kind of fringe events is the Parallel Program, he said.

LOOK/13 is about uniting history archi-ves and cutting-edge contemporary photogra-phy on a global scale. The festival will feature influential and established photographers, presented alongside international emerging talent. The dynamic line-up of artists will par-ticipate in solo and group gallery productions, projects and more. Through the festival the artists will explore the idea of subjectivity and selfhood, summing up it’s central theme in the question, “who do you think you are?”

“The theme for the festival in 2011 was re-ally a call to action, we were interested in the way people use photography as a political tool, Henry said. “What happens why you point your camera at the thing you want to change? This year we decided to completely reverse that logic. What happens when we turn the camera on ourselves? So the festival’s about portraits and self-portraits and really expan-ded autobiographical projects. The 1960s stu-

dio portraits, black and white galleries – all of it comes back to moments that really capture moments in the city’s history. ”

It’s the combination of an introspective theme of the LOOK/13 and Liverpool’s deep, artistically rooted history that makes it a spe-cial pairing. Photographers and festivalgoers are given a chance to look inside themselves and the city’s past to develop a renew sense of appreciate for art and photography.

“Liverpool has a very strong collection of galleries and museums,” Henry said. It’s wide-ly regarded to be the second cultural capital city of the country after London. There’s a really strong history of photography. There’s a great history of people coming to Liverpool and making important bodies of work here, like Martin Parr and Tom Wood, both who are represented at the festival. But point being there’s a strong legacy of excellent photogra-phy. We’ve worked hard at bringing in this hi-storical dimension.”

In addition to Parr and Wood’s collabo-rative exhibit, other influential artists at the festival will include Adam Lee, Rob Brem-ner, Eva Stenram, Charles Freger, Rankin and Keith Medley.

“We’re excited about what we have created with LOOK/13,” Henry said. “It’s ambitious, but the UK really needs some great photo-graphy festivals. There are scores of them in France. Liverpool has the cultural base for it, and there’s a bigger impact to be made.”

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Reaffirming the city’s cultural heritage and futureBy Clare Murphy

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17ART & CULTURENEWEUROPEwww.neurope.eu24 - 30 March, 2013

Tate Modern, in collabora-tion with the Art Institute of Chicago, and with the

support of the Washington Na-tional Gallery of Art and Paris’ Centre Pompidou, hosts a unique retrospective dedicated to the em-phatically American Pop artist, Roy Lichtenstein (1923-1997), which will run until May 27th, 2013.

This is the first major exhibi-tion since the artist’s death, and it displays a selection of 160 works,

created in a wide range of media be-tween 1950 and 1997, and themati-cally covers Lichtenstein’s entire career.

As the curators, James Rondeau and Sheena Wagstaff state in the exhibition catalogue: “Lichtenstein’s contribution predicated on the elegant resolution of an uneasy, still potent collision of commercial and fine art, defined the enduring legacy of Pop…One understands today…that access to lived experience is entirely mediat-

ed by signs and symbols, endlessly rep-licated by omnipresent mass media.”

Indeed, although Roy Lichten-stein, who taught art and drawing for a great part of his life, perfectly mastered the academic art lan-guage, his main sources lied in the ‘low’, popular art of advertising, comic strips, commercial clichés, product packaging and graphic arts... a whole array of dull house-hold imagery and cheap mass-pro-duced objects that he enhanced and glorified.

However, the ‘American dream’ seems too good to be true and Li-chtenstein’s hyperbolic portrayal of 1950s -1960s American mid-dle class values and consumerism is at times more than satirical, and in fact quite subtly subversive. Li-chtenstein’s ‘forging’ talent could easily mislead the viewer into thinking that his strokes and dots are stencilled ‘fakes’, when they were actually meticulously painted onto the canvas by hand.

The exhibition is divided into 13 sections, from ‘Early abstrac-tions’ to the ‘Pop art’ years, to ‘War & Romance’ cartoon-inspired se-ries; Ben Day dotted ‘landscapes’, ‘Art history’, with Lichtenstein’s interpretations of works by Picasso, Matisse, Mondrian, Monet, Delac-roix and Cezanne, ‘Perfect/Imper-fect’ totally abstract canvases, Pop ‘Nudes’, and ‘Landscapes in the Chinese style’.

Roy Lichtenstein’s best-known works are certainly the ‘War & Ro-

mance’ paintings inspired by comic strip scenes, which showed action men opposing ‘blonde chick’ types. Neurotic or capricious women were either hanging by the phone and crying, or going through iden-tity crisis with depression, mood swings and paranoia.

Lichtenstein ironically refers to post-war sexist popular romance cartoons, which were heavily cen-sored, and chose to promote mar-riage and family values, female obedience and passivity, while dis-couraging women’s entrance into the workforce and their desire for independence. Cartoon bubbles,

short texts and onomatopoeias, complement the violent colours of the war pieces, while parodying the machismo of the wartime propa-ganda discourse.

Less known and yet equally im-pressive are the artist’s Art Deco-inspired brass and glass sculptures and his Pop Art glazed ceramics.

It’s definitely worth noting that even an artist as iconoclastic as Roy Lichtenstein, who once said: “Don’t look for ideas”, when referring to his art, has since become a leading figure of the modernist canon.

Louise Kissa lkissa@neurope.eu

Comically fakeLICHTENSTEIN: A RETROSPECTIVE – TATE MODERN, LONDON

ROY LICHTENSTEIN, ‘WOMAN:SUNLIGHT,MOONLIGHT’,1996

© EPA/KIKO HUESCA

ROY LICHTENSTEIN, ‘FROLIC’, 1977

© EPA/ANDY RAIN

ROY LICHTENSTEIN, ‘OH, JEFF...I LOVE YOU, TOO...BUT...’, 1964Collection Simonyi/© Estate of Roy Lichtenstein/DACS 2012

ROY LICHTENSTEIN, ‘MASTERPIECE’, 1962Private Collection/© Estate of Roy Lichtenstein/DACS 2012

ROY LICHTENSTEIN, ‘WHAAM!’, 1963

© Estate of Roy Lichtenstein/DACS 2012

18 BRUSSELS AGENDA NEWEUROPEwww.neurope.eu24 - 30 March, 2013

UpcoMiNG EvENtS

Skip the Use Ancienne Belgique 29.03 – 8pm

Funky disco infused electro-pop is headed to the Ancienne Belgique on 29 March with Skip the Use. They’ll be performing music from their se-cond album ‘Can Be Late’ their infectiously catchy music you can’t help but dance to.

Previously known as punk band Carving, the French quintent took their name change as a ca-talyst for a new direction. The result is the rigid electro-rock sound that has earned them praise as their homeland’s answer to Bloc Party.

The five-man group of front man Mat Bastard, bassist Jay Gimenez, keyboardist Lio Raepssa-et, guitarist Yan Stefan and drummer Mana-max Cattelion joined together in Lille, France

2008. They first caught the attention of music lovers in 2009 with their self-titled debut album. Following a European and Canadian tour and the release of the EP Sound from the Shadow, they paired up with LCD Soundsystem producer Tim Goldsworthy to record their latest album.

Last summer the band performed in Brussels and Paris, uniting both cities in a love for their sound.

“The surprise of the weekend proved Skip The Use, a French rock group that hilarity to hyperki-nesia covenant,” wrote music journalist Gunter Van Assche (De Morgen). “Dirty, noisy and exci-table: as we know that French people do!”

The band Veto will open for Skip the Use. They mix electro with progressive rock (think Friendly Fires, Delphic, Bloc Party). Their de-but album is expected in spring 2013.

Asaf Avidan Ancienne Belgique 27.03 8PM

The chart toping song “One Day” has brought Asaf Avidan to the forefront of pop music fame. It held the number one position for weeks on both Flemish and French speaking radio stations.

Before making it big, this Israeli folk-rock sin-ger was born in Jerusalem in 1980, and grew up in places like Jamaica and New York.

In 2006 he recorded a six-track debut EP abo-ut the break up with his long-term girlfriend. To promote the self-released record, Avidan pulled together some musical friends and performed

as the band Asaf Avidan and the Mojos. Then came the 2008 album entitled The Reckoning, followed by the 2009 release of Poor Boy/Lucky Man. By 2010 and their third album Through the Gale, the Mojos disbanded to pursue solo projects, and Avidan continued to play acous-tic shows.

In 2012, German DJ Wanklemut used part of Avidan’s “Reckoning Song” in his remix of “One Day.” That song reached the top spots in charts around Europe and spring boarded Avidan’s ne-west album Different Pulses into popularity.

Avidan’s voices is raw, falling somewhere between Janis Joplin and Jeff Buckley. His sound is unique to today’s folk and rock scene.

Le Petit BaigneurRue du Rivage 11, SeneffeTel 064 458358www.petitbaigneur.beinfo@petitbaigneur.be With so many restaurants in Brus-sels you may ask why it’s worth ever venturing outside the city boundary to eat. Well, this restaurant in Brabant Walloon in one very good reason.Run by the very friendly Marie Leur-quin and Benoit Detournay, it combines an excellent restaurant and adjacent bras-serie, both serving mouth-watering dishes.There’s a superb range of meat and fish dishes, each of them ‚classics‘ but served with a mo-dern twist and, considering the quality, very reasonably priced. The separate brasserie menu features old favourites like carbonnade and croquettes and a particularly impressive drinks list.Special mention should perhaps go to sommelier Pol Lommel who really is a guy who knows his wines. The service, like the food, is tremendous. The tastefully-decorated restaurant, opened a year ago in what is a former friterie, overlooks a pleasant canal and rolling fields and has a 50-space car park. It’s proved a big success with workers at a nearby industrial park while local people make up the bulk of the evening clientele. However, if you fancy a relatively short drive of Brussels for a particularly delightful meal then head for Le Petit Baigneur – you will not be disappointed.Open Noon-2.30pm and 7pm-10pm. Closed Saturday lunch and Sunday evening.

Resto Bites

19ARTS & CULTURENEWEUROPEwww.neurope.eu24 - 30 March, 2013

The Photographer’s Gallery, 16 – 18 Ramillies Street, London W1F 7LW 19 April to 30 June, 2013

The four artists shortlisted for the Deut-sche Borse Photography Prize 2013 are Mishka Henner, Chris Killip, Cristina De

Middel and the artist duo Adam Broomberg & Oliver Chanarin. The winner will be announced at a special ceremony at The Photographers’ Gal-lery on 10 June, 2013. Works by the shortlisted photographers will be shown in an exhibition at The Photographers’ Gallery followed by presen-tations at the Deutsche Borse headquarters in Frankfurt/Eschborn and at C/O Berlin, Forum for Visual Dialogues.

The Deutsche Borse Photography Prize 2013 is presented by The Photographers’ Gal-lery, London. The annual award of £30,000 re-wards a living photographer, of any nationality, for a specific body of work in an exhibition or publication format, which has significantly con-tributed to photography in Europe between 1 October 2011 and 30 September 2012.

The four shortlisted artists have been nomi-nated for the following projects:

Adam Broomberg (b. 1970, South Africa) & Oliver Chanarin (b. 1971, UK) are nomina-ted for their publication War Primer 2 (2012, MACK). The limited edition book physically

inhabits the pages of Bertolt Brecht’s publication War Primer (1955). In the original, Brecht mat-ched WWII newspaper clippings with short po-ems that sought to demystify press images, which he referred to as hieroglyphics. In War Primer 2 Broomberg & Chanarin choose to focus on the ‘War on Terror’; sifting through the internet for low resolution screen-grabs and mobile phone images, the artists then combined them to reso-nate with Brecht‘s poems. Through this layering of photographic history, Broomberg & Chanarin offer a critique of photographs of contemporary conflict and their dissemination—a theme that has been at the centre of their practice for fifteen years.

Mishka Henner (b. 1976, UK) is nominated for his exhibition No Man’s Land at Fotografia Festival Internazionale di Roma, Museum of Contemporary Art, Rome, Italy (20 September - 28 October 2012). In No Man’s Land Henner ex-plores the margins of European urban and rural environments with images produced using Goo-gle Street View. Identifying geographic locations from online forums where men share informati-on on the whereabouts of sex workers, Henner visits and records these sites using the mechani-cal gaze of car-mounted cameras. Henner’s work poses complex questions about the blurring of boundaries between voyeurism, online informa-tion gathering and privacy rights.

Chris Killip (b. 1946, UK) is nominated for his exhibition What Happened Great Britain 1970 - 1990 at Le Bal, Paris (11 May - 19 Au-

gust 2012). In this series of stark black and white images Killip chronicles the disintegration of in-dustrial Britain in working class communities in the north of England. Immersing himself in the lives of the people he documented, Killip tells personal stories of men at work set against a back-drop of socio-political upheaval.

“This year’s shortlist once again shows the broad variety of different approaches to the me-dium of contemporary photography - from tra-ditional to innovative positions. We thank the jury for their excellent selection and look very much forward to the exhibition next year,” said Julia Taeschner, Head of Corporate Responsi-bility for Deutsche Borse Brett Rogers the Di-

rector of The Photographers’ Gallery and Chair of the Jury said that this year’s jury selected four artists whose work represents “four distinct and significant positions within contemporary photography - Chris Killip for his singular and timeless vision reinterpreting the possibilities of documentary practice; Broomberg & Chanarin for their surgical examination of images of con-flict using Brecht’s War Primer as their source; Mishka Henner for appropriating the archive of Google Street View photographs to examine the landscape of today’s sex workers and Cristina De Middel’s ‘mockumentary’ on the Zambian space programme which confidently blurs the bounda-ries of fact and fiction in a highly original way.”

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Deutsche Borse Photography Prize 2013

The Afronauts, Cristina de Middel I, 2012

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21TECHNOLOGYNEWEUROPEwww.neurope.eu24 - 30 March, 2013

As governments like the United States and Israel are moving from missiles to malware in order to attack their adversa-ries, a group of specialists from NATO have drafted the first guidelines to tackle the so-called cyberwar.

The Tallinn Manual on Internati-onal Law Applicable to Cyber Warfare was published by NATO’s Cooperative Cyber Defense Center of Excellence (CCD COE), which is based in Estonia‘s capital, and drafted by two dozen ex-perts from around the world.

According to the book, computer grids, networks and systems are incre-asingly becoming the target of foreign agents. Besides, it highlights that it is not an official document, but instead an ex-pression of opinions of a group of inde-pendent experts.

Currently, only few laws formally exist governing the use of cyberwea-pons, according to Michael Schmitt, a professor with the US Naval War Col-lege and the editor of the manual.

“Everyone was seeing the Internet as the ‘Wild, Wild, West,’” Schmitt told the AP. “What they had forgotten is that in-ternational law applies to cyberweapons like it applies to any other weapons.”

Therefore, Schmitt met experts

from law schools and military forces in Tallinn during the last three years, in or-der to establish new rules that might be adopted.

The Tallinn Manual contains 95 “black letter rules”, which are partially taken from existing battlefield behavi-our guidelines like those developed in the 1868 St. Petersburg Declaration, but adapted to methods used in twenty-first century warfare.

The report affirms that a cyberattack can be defined as a cyber-operation, eit-her offensive or defensive, “that is reaso-nably expected to cause injury or death to persons or damage or destruction to objects.”Despite civilians cannot be law-fully targeted with those kinds of attacks,

persons unaligned to a military can still be considered fair game for assault if they pose a threat, the file highlights.

For instance, if a targeted hacktivist who conducted several cyber attacks is no longer engaged to these actions, “he or she would have remained targetable beyond the period”, as this person repre-sents a threat.

“An act of direct participation in ho-stilities by civilians renders them liable to be attacked, by cyber or other lawful means,” reads the manual.

The 302 pages-report is just a com-pendium of suggestions, but its crea-tors aim to transform it in more than recommendations for North Atlantic countries.

In July 2012, the European Commissi-on adopted a proposal for a directive on collective rights management (CRM) and multi-territorial licensing of rights in online content. However, this direc-tive is far from being approved, unless all stakeholders involved achieve an agree-ment which benefits both creators and consumers.

During a debate celebrated on 20 March at the Forensic Technologies International‘s (FTI) office in Brussels, it became clear that different points of view are slowing down the creation and appli-cation of a copyright legislation across the European Union.

According to Konstantinos Komaitis, Policy Advisor at the Internet Society, technologies are advancing rapidly and current laws are not updated. Therefore, a new copyright law is needed, but first of all “we have to think about digital content in a more wider way”, he said.

The urgent necessity of a single Euro-pean legal framework for online content was expressed by all the panellists. Never-theless, not all of them agreed on the way of application of such measures.

Wally Badarou, Member of the board

of directors of Sacem and musician, ex-plained that “creating is not about dupli-cating, it is about generating something new” and all creators have the right to ask consumers to pay when they use their works.

“When you buy, for instance, a CD, it is still property of the creator, not of the consumer”, he explained, and added that “copyright is the only source of income for authors.”

Christian Engström, MEP from the Pirate Party, considered this affirmati-on “ridiculous” and stated that creators shouldn‘t have to receive benefits after creating a song, book or movie. “Once authors have a property and make it pu-blic, they just want to punish people who want to listen or copying it”, he said.

Copyright ensures that authors, per-formers, producers and broadcasters can determine how their creation can be used and receive remuneration for it. Accor-ding to Engström these rules are making users look like criminals, “and we don‘t want this kind of society”, he added.

Despite Engström supports the idea of a new copyright law, he considers that will be complicated to balance those

measures and Internet freedom. That‘s why Niklas Lagergren, Senior Vice Pre-sident of News Corporation, highlighted the importance of analyse and think about “what kind of Internet we want.”

Besides, there is still a misunderstan-ding between openness in the technolo-gical sense of the word and openness in the democratic sense. These two notions only have in common the word “open-ness” and “many people think that the technological sense leads the other, and this is a big mistake”, he said.

Balance and transparency are needed in order to avoid proposals like ACTA, SOPA and PIPA, explained Kostas Ros-soglou, BEUC Senior Legal Officer. “We have to talk more about content. It is not only about copyright, it is also about ac-cess”, he said and emphasised that “every-one has the right to know what is happe-ning with the copyright law.”

Meanwhile, the directive is still being discussed at EU-level. On 18 March, a public hearing was celebrated at the Eu-ropean Parliament in an attempt to shed light on collective management of copy-right and related rights.

NR

Europe looks for copyright consensus

NATO targets hacktivists in new cyberwar directiveBy Nerea Rial Rise of the net activist

By Jennifer Baker

Earlier this month thousands of digital civil liberties activists bombarded the European Parliament with emails protesting against a proposed law to ban on internet pornography.There was just one problem, such a law didn‘t exist. MEPs were so swamped with emails that a spam filter was initiated to block them.So how did this all start? An own- initiative report from the FEMM committee in the Parliament was drawn up asking the European Commission to consider legislation to eliminate ge-nder stereotyping in the European Union. In this report refe-rence was made to a 1997 call to ban all pornography in the media. But a report from a minor Parliamentary committee is a very long way from a proposed law.Pirate Party founder Rick Falkvinge nonetheless encouraged people to lobby their MEPs. He hailed it as a victory that the line calling for a ban on pornography was deleted. “We should be proud of ourselves as activists to having made noise on the issue. If we had not raised hell, the horrifying points 14 and 19 above would almost have been sure to pass in silence,” he said.In the last year we have seen digital civil liberties groups pro-testing against CETA (the Canada-EU trade agreement) and SOPA (the Stop Online Piracy Act) and even now are taking on the might of international tech giants in TAFTA (the Trans-Atlantic Free Trade Area).Digital rights groups have been growing in power ever since the massive success of the anti-ACTA campaign last year.ACTA (the Anti-Counterfeiting Trade Agreement) caused huge concern. Lines such as: “A party may … order an online service provider to disclose expeditiously to a right holder in-formation sufficient to identify a subscriber whose account was allegedly used for infringement” could have made Internet Ser-vice Providers (ISPs) the unofficial policemen of the net.The proposed agreement also sought to place sanctions against any device or software that is marketed as a means of circum-venting access controls such as encryption or scrambling that are designed to prevent copying. It also wanted legal measures against knowingly using such technology. This would have had implications for so-called dual-purpose technology, which also has totally legitimate applications. Thousands of protesters took to the streets and ACTA was eventually blocked by the European Parliament. However it continued to raise zombie-like from the dead with the CETA deal initially including many paragraphs lifted directly from ACTA. These were all in turn shot down.Many of those protesters were angry with what they saw as the United States trying to impose its standards on Europe and the movement snowballed. With TAFTA currently under discus-sion, Trade Commissioner Karel de Gucht, who also negotia-ted ACTA, will be anxious to avoid another embarrassment.But civil liberties groups have not yet won the war and distrac-tions like the non-existent pornography ban may do more harm than good. With many extremely complex issues surrounding copyright, intellectual property and patents, ordinary citizens must feel there is a source of information they can trust. The pornography ban debacle may have undermined that. The Pi-rate Party risks becoming the boy who cried wolf. ACTA was certainly a big, nasty wolf that would have impinged on civil liberties, and there are doubtless more out there, but even die-hard activists can tire of pointless campaigning.Civil liberties campaigners have many allies in the European Parliament – Marietje Schaake, Christian Engstrom and Sophie In‘t Veld to name a few. However, with even Schaake saying that there will be “enough time for substance and talk of IP later”, campaigners would do well to heed her advice and choose their battles.

Brussels Geek

22 EUROPEAN UNION NEWEUROPEwww.neurope.eu24 - 30 March, 2013

LATVIA | ECONOMY

ABLV Bank, AS issues subordi-nated bonds worth $20 millionContinuing with the gradual replacement of long-term depo-sits with bonds, ABLV Bank, AS, a private bank inLatvia, per-formed another bond issue under ABLV Bank, AS Second Bond Offer Programme. The issue was of discount bonds for raising subordinated capital to the amount of $20 million. The size of Second Bond Offer Programme, which was implemented in full, was 150 million Latvian Lats. Commenting on the bon-ds issue, Ernests Bernis, ABLV Bank Chief Executive Officer (CEO), said that having performed this bond issue, « we com-pleted the bank’s Second Bond Offer Programme. The program-me size was LVL 150 million, and it was implemented in full. In total over the last year and a half we have already performed 12 public issues. We plan to approve another bond issue program-me soon, under which we will perform public offering of bond issues amounting up to LVL 200 million”. Under the issue in US$, code: ABLV SUB USD 180323, there were 200,000 bon-ds issued. The face value of one bond is US$100. Initial place-ment price: 80.05 percent of the face value. The issue date was 18 March, 2013 with a maturity date of 18 March, 2023. In five years, the bank may perform premature redemption of the bon-ds. The demand for the bonds considerably exceeded the offer, and thus applications of most investors were satisfied partly. The bonds were purchased by 36 customers of the bank. Like pre-vious bond issues, this one will be also be included in the NAS-DAQ OMX Riga list of debt securities in order to begin public quotation of the bonds and make those available to investment funds and other professional investors.

FINLAND | BUSINESS

Ikea founder acquires Finnish brewery OlviIkea founder, multimillionaire Ingvar Kamprad, has taken a 10 percent stake in the Finnish brewery Olvi whose products inclu-de Angry Birds soft drinks, a statement released last week expla-ined. According to the Olvi market announcement, the Kam-prad Foundation now owns 10.37 percent of the brewery’s sha-res. The Kamprad stake stock market value in Olvi is approxi-mately €47 million. Olvi has produced beverages for 134 years in Iisalmi, Northern Finland and currently operates in Finland, Belarus and the Baltic states. Last year the company had net sales of €312 million, and made €30 million profit. The Swedish fur-niture mogul, whose flat-pack furniture chain operates around the world, is estimated to be worth of $43 billion. He is now the second largest shareholder in Olvi after Olvi Foundation, whi-ch holds 16% of the company.

GERMANY | BANKING

Danske Bank may pay dividend this yearDenmark’s biggest financial institution, Danske Bank, has said it hopes to start paying dividend as early as this year and that the bank has now reached a turning point, RTE Ireland repor-ted on 18 March. Danske Bank Chairman Ole Andersen told the annual general meeting that he was disappointed that they had not been able to pay a dividend to shareholders in five years but that he hoped that 2013 would be different. Late last year the bank closed its 27 National Irish Bank branches, as part of a rebranding of its Irish operation to Danske Bank. „It is cle-arly the Board of Directors’ goal that, with the earnings plans that have been laid, we can resume dividend payments soon - as early as for this year, we hope”, he said. Danske Bank made a fourth quarter pre-tax profit of 2.26 billion Danish crowns (€ 303.1 million).

German rail operator Deutsche Bahn said on 21 March that profits rose shar-ply last year as passenger numbers hit record levels amid soaring petrol prices, The Local reported. Deutsche Bahn‘s net profit rose by 10.9% to € 1.48 billion ($ 1.9 billion), underlying or operating profit jumped by 17.3% to € 2.7 billion

on a 3.7% increase in revenues to € 39.3 billion. The group said it cut its net debt by 1.4% to € 16.4 billion in 2012.

With fuel prices soaring, passengers are simply switching to rail travel and that meant the number of people who travelled onGerman trains last year in-creased by 49 million to a record 1.97

billion, the statement said.At the same time, the volume of

freight transported declined by 5.4% to 105.9 billion tonne-kilometres given the weak economy. “Even if some uncer-tainties remain for 2013, we remain cau-tiously optimistic for the current year,” said chief financial officer Richard Lutz.

Deutsche Bahn profits up

A Deutsche Bahn train riding through the countryside. |RAILWAYS.FR

ST-Ericsson, the mobile technology venture between Ericsson and STMicro, has announced it will cut up 1,600 jobs worldwide after breaking their business relation.

According to ST-Ericsson the re-structuring could impact over 1,600 em-ployees, out of which 500 to 700 will be Europeans. Around 400 and 600 of those positions are based in Sweden and 50-80 in Germany.

In 2012, ST-Ericsson had a head-count of around 5,000, mostly in Sweden, Germany, India and China. However, after the division of both firms, Ericsson

will count with 1,800 workers, while the Franco-Italian company will have a work-force of 950 for remaining activities, mo-stly in France and Italy.

After announcing an 8 billion kronor lost for ST-Ericsson in the fourth quarter of 2012, the Swedish company also ex-plained its intentions to save 500 million kronor ( €59,9 million) for restructuring charge in the fourth quarter this year. Which is lower than the $500 million it predicted at the end-January.

The announcement takes place after months of speculation about the future of chip joint venture ST-Ericsson, whose

orders made by Nokia dropped during the last months.

Due to the big competition against chip-makers in Asia, ST-Ericsson made a net loss of $133 million in the fourth quarter of last year.

“All possible scenarios were consi-dered but the option announced today was always a real possibility,“ STMicro chief executive Carlo Bozotti said on 18 March.

Besides, he highlighted that the firm will keep making products for ST-Erics-son customers as long as they needed them.

ST-Ericsson to cut up 1,600 jobs, breaks joint venture

Finnish engineering and technology company Metso has received a repeat or-der for two complete tissue production lines from Hayat Kimya of Turkey, it was reported late last week.

Each production line will include an Advantage DCT 200 TS tissue ma-chine, and they will be installed at the company’s new mill sites near the city of Alabuga, Tatarstan, in Russia, and in the

city of Mersin in southern Turkey.The start-up of the tissue machine to

be installed in Russia is planned for the second half of 2014, and the second tis-sue machine will start up in Turkey at the end of 2015. The value of the order has not been disclosed.

The order follows the successful start-ups of two similar tissue lines sup-plied by Metso in 2010 and 2011.

Separately Metso has announced that it has again received an order for a tissue production line from Syktyvkar Tissue Group in Russia

The new tissue machine will be in-stalled at the company’s new site in Se-mibratovo, about 220 kilometres from Moscow. The start-up of the machine is scheduled for mid 2014. The value of the order has not been disclosed.

Tissue orders up for Metso

SWEDEN | TECHNOLOGY

FINLAND |RETAIL

GERMANY | TRANSPORT

23EUROPEAN UNIONNEWEUROPEwww.neurope.eu24 - 30 March, 2013

SLOVENIA | RETAIL

Revenue jumps for Spar SlovenijaSpar Slovenija, a part of Dutch-based grocery chain Spar, genera-ted €720.8 million in sales revenues last year, an increase of abo-ut one percent over 2011, Invest Slovenia reported on 19 Mar-ch. Considering the economic crisis, CEO Igor Mervic was hap-py with the results, which indicated that Spar managed to increa-se its market share last year. While there is no official information on market shares yet, Mervic estimated that Spar controls about 20 percent of the market. The CEO said the retailer's profit re-mained flat, but did not provide figures. Employing some 300 pe-ople, Spar allocated € 22 million for investment last year, increa-sing the number of its shops by two to 88. According to Mervic, investments will continue to rise this year, reaching €50 million.

IRELAND | AVIATION

Bigger dividends approved for Aer Lingus A court ruling would allow Aer Lingus to increase reserves that can be distributed to shareholders, the airline said last week, RTEIreland reported. The ruling in the High Court means the trustees of an employee pension scheme that is in deficit will not be able to limit the distribution of funds to shareholders, Aer Lin-gus said. The airline could now increase its distributable reserves to €542 million from the current €42 million, boosting the pot from which it could pay future dividends. Aer Lingus said it wel-comed the court ruling. Last month, the airline said it had inten-ded to pay a dividend of about €21.4 million, representing €0.04 per share for 2012, in May. This payout is subject to shareholder approval at its AGM in April. ''Our current dividend policy, whi-ch we announced in May 2012 is to pay a dividend for those futu-re years in which we make a profit, provided that payment of such dividend is appropriate and prudent in the context of our finan-cial position, strategic objectives and prospects,'' the airline said.

HUNGARY | ENERGY

E.ON gas business buyout by MVMThe assembly of state-owned energy group MVM Zrt has approved the purchase of the natural gas business of German peer E.ON, Budapest Business Journal reported on 20 March. The sides involved, E.ON and the Hungarian state, have alre-ady finalised the terms of the purchase, clearance from MVM was the last step in the process, allowing the deal to be conclu-ded shortly. The exact value of the deal is unknown, but the government has committed to guaranteeing up to 80% of the privately agreed purchase price and earmarked €875 million for the purpose in this year’s budget. Local business daily Napi Gazdasag reported today that the contract will be signed in the second half of March.

BELGIUM | ECONOMY

Government debt rises to 359 billionThe Belgian Federal Government Debt amounted to €371.86 billion as of 28 February, 2013. Debt issued or taken over by the federal government amounted to € 371.50 billion, and the insti-tutions for which the federal government supports the debt ser-vice, registered a debt of EUR 0.36 billion. In net terms (i.e. de-ducting financial deposits and investments, as well as securities owned by the Treasury), the Federal Government Debt amoun-ted to €359.71 billion.

The UK's three main political parties have agreed to create a new system to regulate the country's newspapers, RTE Ireland re-ported on 18 March.

It came after a public inquiry exposed a culture of industrial-scale phone hacking and other unethical behaviour.

The deal will establish a new press regulator and introduce fines of up to £1 million (€1.2 million). There will also be an obligation on newspapers to print pro-minent apologies where appropriate. The system will be voluntary, but there will be strong financial incentives to encourage newspapers to opt into it. The government came under pressure to create a new regu-latory system after the judge-led Leveson inquiry and a series of arrests laid bare a disturbing culture of phone hacking and malpractice in some parts of the press.

However, concerns that any deal would imperil press freedom delayed agreement.

Some press barons threatened to boy-cott a new regulatory regime, while cam-paigners for tougher regulation accused Cameron of being in thrall to the press.

The Conservatives, Labour and the Liberal Democrats had been divided over whether a new press regulator should be enshrined in law and over how its mem-bers would be chosen.

They reached a compromise after

agreeing to enact legislation to ensure the new system cannot be easily altered later.

Index on Censorship, a group that campaigns for free speech, said it was a "sad day for press freedom in the UK".

"The involvement of politicians un-

dermines the fundamental principle that the press holds politicians to account," said Kirsty Hughes, its CEO.

"Politicians have now stepped in as ringmaster and our democracy is tarnished as a result."

Press regulation deal passes

British TV executive Mike Hollingsworth, Jane Winter, Founder of the Hacked Off campaign Brian Cathcart, British novelist and journalist Joan Smith, Former Crime-watch presenter Jacqui Hames, Baroness Sheila Hollins and British Liberal Democrat politician Evan Harris hold a Hacked Off press conference in London, on 18 March, 2013, following the cross-party agreement on a new system of newspaper self-regula-tion that resulted from negotiations sparked by the Leveson Inquiry's review of press standards. Hacked Off, a campaign group that advocates for victims of press abuse, welcomed the cross-party agreement on implementing the Leveson recommendations on press self-regulation. |AFP PHOTO / ANDREW COWIE

Former French President Nicolas Sarko-zy has been placed under formal investi-gation over allegations that he received illegal donations from the richest woman in France, L’Oréal heiress Liliane Betten-court.

According to France 24, the move came after Sarkozy was unexpectedly summoned by Bettencourt’s staff for a private meeting to discuss about the alle-gations that he accepted envelopes stuffed with cash from Bettencourt, which were illegally used to finance his 2007 election

campaign. According to the official alle-gations, Sarkozy exploited the weakness of Bettencourt since she did not have all her faculties. L’Oréal heiress is now 90 ye-ars old, and has been in poor health since 2006.

Investigators suspect that Sarkozy took up to four million euros from Betten-court. Back in 2010, the former accoun-tant of the L’Oréal heiress, Claire Thibout, told police that she had handed envelopes stuffed with cash to Bettencourt's right-hand man, Patrice de Maistre, on the

understanding it was to be passed on to Sarkozy's campaign treasurer, Eric Wo-erth. Lawyer Antoine Gillot told French TV i-Tele that Judge Jean-Michel Gentil in the city of Bordeaux had placed Sarko-zy under formal investigation, after hours of questioning on Thursday.

The lawyer of the former French President Thierry Herzog said his client would be “fighting back immediately.” Sarkozy faces up to three years in prison, a fine of €375 thousand and a five-year ex-clusion from any political activity.

Sarkozy under formal investigation

British online fashion retailer ASOS po-sted a 37% rise in second quarter sales, buoyed by a better than expected home performance and strong overseas growth, RTE Ireland reported on 20 March.

ASOS retail sales had risen to £186 million in the three months to 28 Febru-ary. That was better than a market fore-cast for a 34% sales rise, and ahead of a 30% jump in its first quarter.

Sales had jumped by 41% in Decem-ber alone after strong Christmas demand in Britain.

"Our UK performance remained ahead of expectations," Chief Executive Nick Robertson said. "We remain posi-tive in our outlook for the year to 31 Au-gust 2013 and continue to trade in line with expectations."

While the traditional high street has suffered as consumers worry about jobs and squeezed household incomes, on-line retailers are faring far better, with ASOS in particular.

The firm, which targets young women looking to emulate the designer

looks of celebrities like Nicole Scherzin-ger and Cara Delevingne, modestly de-scribed its performance in the first half of the year as "robust" and reaffirmed its positive outlook.

The group said its home market re-mained ahead of expectations in the se-cond quarter with sales up 28% to £75.5 million, compared to 12% growth a year ago.

International sales rose 45%, up from a 34% rise in its first quarter, to almost £111 million.

ASOS says online sales are up

FRANCE |POLITICS

UNITED KINGDOM |MEDIA

UNITED KINGDOM |RETAIL

24 EUROPEAN UNION NEWEUROPEwww.neurope.eu24 - 30 March, 2013

ENI Angola, a subsidiary of Italian group ENI, and Angolan oil company Sonangol said they have found more oil in the deep waters of the Angolan sea, increasing the resource base  of the West Hub project. The oil discovery is in Block 15/06, with the drilling of the well-1ST Vandumbu, located approximately 150 kilometres from the coast. The well was drilled at a water depth of 976 metres and reached a total depth of 4,107 metres.

According to initial indications the well has potential production of over 5,000 barrels of oil per day.

ENI Angola is the operator of Block 15/06 with a stake of 60 percent and its partners are Sonangol P&P and Total, each with 15 percent and Falcon Oil Holdings Angola and Statoil Angola Block 15/06, each with 5 percent .

This discovery confirms Angola as one of the core countries in ENI’s organic growth strategy. ENI has been present in the country since 1980 with a net production of 102,000 barrels per

day in 2011. Angola is a member of the Organisation of Petroleum Exporting Countries and ranks second behind Nigeria in terms of oil production in Sub-Saharan Africa.

The US Energy Agency’s Energy

Information Administration said Angola aims to produce as much as two million barrels of oil per day by next year. ENI said that its net production in 2011 in the country from Angola was 102,000 barrels per day.

ROMANIA|RECYCLING

Retailer Cora to install recycling devices in storesRetailer Cora has installed recycling devices for used home appli-ances, electronic devices, plastic bottles and metallic cans in all of its hypermarkets starting last Monday. With the help of Gre-en Group, the retailer offers to those who recycle shopping vo-uchers which can be used in the retailer’s shops, Business Revi-ew reported on 19 March. Recycling equipment costs €20,000, while the maintenance fees bring its cost to €30,000, which will be invested by recycling companies. The agreement signed wi-th the Environment Ministry is that retailers will cover the cost of vouchers, while the Ministry will cancel the 16% tax for the re-cyclers and the 35 tax on recycling aluminium cans. According to the Environment Ministry, Romanians are currently recycling only 3% of their aluminium waste, while the European average is 70%. The Ministry has recently launched a project aiming to im-prove the collection rate of aluminium cans and PETs. Target for January 2014 is to collect 55 percent of its aluminium cans. Ru-bbish dumps currently receive 10 tons of aluminium cans a year, according to the Ministry.

ROMANIA|TELECOMS

Vodafone opens regional network operations centreVodafone Romania announced the official inauguration of its Danubius Regional Network Operations Centre which caters for several of the group’s divisions in Europe. The centre has two technical headquarters located in the Pipera and Avrig areas of Bucharest. Starting July 2011, the Danubius centre provided ser-vices to four networks, Vodafone Romania, Vodafone Italy, Vo-dafone Greece and Vodafone Germany. However, over the ne-xt two weeks, the centre will cater for other three Vodafone ne-tworks, Vodafone Netherlands, Vodafone Czech Republic and Vodafone Albania.  

ROMANIA|DAIRY 

Danone withdraws products over possible contaminationDairy producer Danone recently announced it would withdraw several products from the Romanian market as a precautionary measure after it emerged that they could be contaminated with aflatoxins toxic carcinogenic substances, Business Review repor-ted on 18 March. The dairy maker also blocked 75 tonnes of pro-ducts in its warehouses after discovering aflatoxin in the milk de-livered by one of its suppliers. The news follows the withdrawal of milk from shops after alflatoxins were found in two batches of milk. The food-safety alert over milk infested with aflatoxin be-gan two weeks ago after milk containing aflatoxin above the legal limits was reportedly found in Romanian farms, collection cen-tres and processing facilities. 

ROMANIA|BANKING

Unicredit Tiriac Bank posts €40mn net profitUniCredit Tiriac Bank ended 2012 with a net consolidated pro-fit of some €40 million, up 11.3% on 2011, as revenues increa-sed and provisions went down, according to the bank, Romania Insider reported on 18 March. The bank’s operational revenu-es were up 2.1%, to some €280 million, with revenues from inte-rest being negatively impacted by a drop in reference index and the margins for loans. Meanwhile, financing costs went up, and were only partially offset by the 9% increase in financing volume.

An offshore platform of Italian oil major ENI. |ENI

On 20 March, a 41-year-old man in Bul-garia set himself on fire, becoming the sixth person in the country to do so in protest of poverty and government cor-ruption, news agencies reported. The man, who is in critical condition, is from the Danube River town of Silistra and is jobless.

Silistra  police say he had been

alone at the village sports field when the fire burst.

On 18 March, a miner from the we-stern town of Bobovdol also set himself on fire. Simeon Simeonov, 59, poured ga-soline on his body before the very eyes of his son. Before the desperate act he had called his wife telling her he felt useless for not being able to help his family.

The dramatic self-immolations have continued, despite an appeal by Bulgaria‘s influential Orthodox Church that such desperate actions must stop. They also have been part of nationwide protests that recently brought down the country‘s centre-right government as pu-nishment for its inability to fight poverty and injustice.

Sixth protester sets self on fire

State-owned rail-freight company CFR Marfa expects to post losses of around  €47 million in 2013, more than double the loss last year, Romania Insider reported on 19 March. Last year, CFR Marfa’s budgeted income was a little over 1.22 billion Lei while outgoings were es-timated in May 2012 to nearly 1.32 bil-lion Lei (€274.2 million against  €288.8 million). This left just over a €20 million (95 million Lei) shortfall.

The last time CFR Marfa recorded an annual profit was in 2007. Between 2008 and 2011, the rail-freight company has posted cumulative losses of 1.1 bil-lion Lei (some  €270 million). The ove-rall number of employees is expected to fall in 2013, from 9,162 at end-2012 to

9,053 at the end of this year, according to reports in the local media. In light of the approaching privatization of CFR Mar-fa, the government announced a new technocrat management team for the rail company around a month ago.

The management team could stay in place until July or slightly longer, with the deadline for announcing winners in the CFR Marfa privatisation set for 20 June, but with chances of delay in the transfer of ownership.

Transport Minister Relu Fenechiu said at the time that they would have to fix what could be fixed, but added that they would not be directly involved in the privatisation process. By end-Febru-ary, seven – eight companies had shown

interest in the privatisation of CFR Mar-fa, the minister said, without disclosing more details.

Lower debt and an investor test will be the prerequisites for Romania selling off its rail freight company CFR Marfa, with the privatisation process which star-ted in the beginning of February.

Both of them need to be first appro-ved by the European Commission. CFR Marfa’s debt end-2011 was some  €420 million, and over €280 million of it was to the state budget or public institutions. The Transport Ministry estimated that the state should get some €61.5 million from the sale of its 51percent package in CFR Marfa, after paying all the legal pri-vatisation expenses.

CFR Marfa expects to double losses in 2013

BULGARIA|LABOUR

ITALY|ENERGY

ITALY|TRANSPORT

ENI, Sonangol make oil find offshore Angola

25ENLARGEMENTNEWEUROPEwww.neurope.eu24 - 30 March, 2013

TURKEY | ECONOMY

Malaysia eyed as next foreign investment target Speaking at a meeting on Turkey’s new investment incentive programme, Turkish Ambassador to Malaysia Serap Ataay said that Turkeywill encourage more Malaysian companies to in-vest in the country, Zaman reported. The incentive program-me comprised four schemes, namely regional scheme, large-scale scheme, strategic scheme and general scheme, said Ataay. Under these schemes, some of the supports provided inclu-de value-added tax and customs duty exemptions for machi-nery and equipment and tax deductions as well as land allo-cation, depending on the availability of locations preferred by investors. She informed that bilateral trade between Ma-laysia and Turkeyis expected to reach $5 billion in less than fi-ve years. Raw materials items such as palm oil and rubber as well as electronics parts and components are some of Turkey’s imports form Malaysia. According to Ataay, the financial sce-narios of Turkey seem healthy now, registering 6% annual eco-nomic growth. According to the data unveiled by the Turkish Ministry of Economy, Turkey’s exports to Malaysia last year amounted to $166 million while its imports were worth over $1.2 billion). Malay Businessmen and Industrialists Associati-on of Malaysia (Perdasama) president Datuk Moehamad Izat Emir called on business circles of Malaysia to tap into the ha-lal food and construction sectors in Turkey.

FYROM | ELECTIONS

Opposition will take part in March 24 local electionsFollowing talks with Ambassador of the Organisation for Secu-rity and Co-operation in Europe (OSCE) in FYROM, Geert-Hinrich Ahrens, FYROMn President Gjorge Ivanov said that his country is capable of organising fair and democratic elections, while the FYROMn citizens have the political awareness and maturity to help for the organisation of such elections, MRTOn-line reported. He underlined that the organisation of the electi-ons is one of the key criteria for the implementation of FYROM’s strategic goals. He said that the election competition will be regu-lar and constructive. FYROM’s main opposition party, the Soci-al Democratic Alliance (SDSM), will take part in the country’s local elections, scheduled for March 24. The political crisis be-gan last December when SDSM members of parliament (MPs) were thrown out of the national assembly. As a result, SDSM de-cided to boycott the local vote but the boycott was resolved in early March, after a mediation effort by European Commission’s Enlargement Commissioner, Stefan Fule and European Parlia-ment rapporteur for FYROM, Richard Howitt.

ALBANIA | ENERGY

Hydroelectric plant underway with Shala EnergyShala Energy has inked a concession agreement with Albania’s Ministry of Economy, Trade and Energy for the development of a hydroelectric project on the Shala River. The proposed project will have an installed capacity of 127.6MW and is ex-pected to be completed within four years of the commence-ment of construction. As per the agreed terms, the company will handle construction as well as operation of the hydroelec-tric plant for the next 35 years, reports the Hydro World. To-tal value of the project, including the civil works, equipment, transmission lines and other costs is pegged at $272 million with 30 percent of the investment to be provided by Shala’s sha-reholders. In addition to the fore-mentioned project, the Al-banian government approved the construction of three other, smaller hydropower plants earlier in 2013.

On his recent visit to Israel, US President Barack Obama will urge Israel to mend ties with Turkey. He urged both Turkey and Israel to make amends as the current conflict between the two allies is acting as a barrier fro US policies on Iran and Syria, Zaman reported. Obama considers the formation of a new government, which includes centrists like Yair Lapid and Tzipi Livni and a diminished role for the hawkish Avigdor Liberman.

This suggestion will prove to be a good opportunity for both Ankara and Jerusalem to heal ties. NATO had also called on Israel and Turkey to repair ties. It was recalled that Turkey and Israel en-

joyed close diplomatic and business re-lations for many years but the ties went bitter after the May 2010 Gaza flotilla incident. There were clashes between pro-Palestinian activists and IDF troops aboard the Gaza blockade-busting Mavi Marmara ship which killed nine activities of eight were Turkish citizens and several Israel soldiers suffered injuries. Since this incident, relations between Turkey and Israel have worsened and Turkey is de-manding an apology from Israel and com-pensation for the families of those killed.

However according to sources, senior Turkish opposition parties asked Israel not to apologise Turkey as they believe

that Turkish Prime Minister Recep Tayyip Erdogan is interested only to insult Israel on the international platform. Meantime, Israel is willing to adopt necessary steps if similar pressure is placed on the Turkish leadership. However they doubt whether Erdogan actually want to mend ties. This year in February, Erodagn had triggered international criticism when he described Zionism as a “crime against humanity” on par with anti-Semitism and fascism. Isra-el, the US, Germany and United Nations Secretary-General Ban Ki-moon and se-veral numerous Jewish and international human rights groups slammed Erdogan’s remarks.

Obama calls on Israel, Turkey to mend ties

Turkey’s Capital Markets Board recently announced that it has appointed three independent board members to Turk-cell, Turkey’s biggest mobile operator, to improve corporate governance, Za-man reported. In a statement on its web site, the regulator said it appointed Atil-la Koc, Mehmet Hilmi Guler, who are ex-government ministers, and Ahmet Akca to the board of Turkcell. Mehmet Bülent Ergin, Tero Erkki Kivisaari and Oleg Adolfovic, who represented each of Turkcell‘s three major shareholders are three members who were removed by the regulator from the board. Turkcell‘s board has six members in ad-dition to its chairman. With the latest ap-pointment, the number of independent members has increased to four. Ayse Co-lak, an analyst with Tera Brokers in Istan-bul expressed doubt whether changed board of directors would make any diffe-rence about the payment of long awaited cash dividend since the final decision rests with the General Assembly as far as we know which failed to convene last year. Turkcell is at the centre of a legal battle for control by its partnersTurkey‘s Cukurova Holding, Nordic telecoms group TeliaSonera, and Russia‘s Alti-mo. Their dispute has delayed both an

agreement on the composition of the board and distribution of dividends. A US court has charged Cukurova Hol-ding, several fines ranging from between $10,000 to $50,000 for contempt amid the company’s attempts to secure control of, Turkcell, by raising billions for a se-parate case. The case in New York involves majo-rity stake-holder of Turkcell, TeliaSo-nera, which is pursuing $932 million in damages imposed on Cukurova by a tribunal of the Geneva-based Interna-

tional Chamber of Commerce. Nordic telecoms group TeliaSonera, who owns 37% of Turkcell, appealed to US District Court requesting Cukurova to provide information about its corporate struc-ture. However, Cukurove refused to pro-vide nay information on the ground that this case is directly related to its disputed case with Russian partner Altimo, which holds 13.2% of Turkcell. Britain’s Privy Council heard final arguments from Cu-kurova and Altimo over a disputed con-trolling stake in Turkcell.

Regulator appoints three members to Turkcell board

FYROM has extended visa-free travel in Russia until 15 March, 2014. The coun-try will also continue a visa-free policy for the citizens of Russia, Ukraine, Kazak-hstan and Azerbaijan for the period bet-ween 15 March 2013 and 15 March 2014, MRTOnline reported.

It is expected this move to contribute

to increasing the number of tourists from these countries and boosting tourism co-operation. It also opens doors to improve the chances for intensifying overall econo-mic collaboration and foreign exchange.

The current visa-free regime, which was introduced by FYROM in March last year, allows the citizens from the four

ex-Soviet states to stay in the country wit-hout visas for a period of 90 days.

Those who plan to conduct business or study in the country must still acquire respective visas, the press service said. It should be noted that FYROM is a mem-ber of the United Nations and the Coun-cil of Europe.

Visa-free travel for Russians for another yearFYROM |DIPLOMACY

ALBANIA | MID EAST RELATIONS

TURKEY |TELECOMS

Turkcell appoints three new members to its board. |TURKCELL

26 ENLARGEMENT NEWEUROPEwww.neurope.eu24 - 30 March, 2013

SERBIA|LEGAL ASSISTANCE

Belarus, Serbia sign agreement on legal assistanceSerbia and Belarus recently inked an agreement on legal assis-tance in civil and criminal matters. The agreement was sigend during a recent working visit of the President of the Republic of Serbia Tomislav Nikolic to Belarus, Beta news agency learnt from the Justice Ministry of Belarus. The agreement will be effec-tive once it is ratified by both Serbia and Belarus. The agreement will ensure the protection of rights and legal interests of Belarusi-an citizens and legal persons, contribute to the development and strengthening of the Belarusian-Serbian co-operation in com-bating crime, including transnational organized crime. In addi-tion, the agreement will also formalise the issues relating to the enforcement of court orders in civil and criminal matters, recog-nition and enforcement of court verdicts of one state in the ter-ritory of another, and foster the interaction between investigati-ve bodies of Belarus and Serbia in the prosecution of offenders.

BOSNIA-HERZEGOVINA|AIRLINES 

BH Airlines resume flyingAn airline official of BH Airlines recently announced that the Bosnian airline resumed flying. It was noted that the bank had unblocked BH accounts which froze due to outstanding debt, Fars news agency reported. BH Airlines is moving just like many other struggling flag carriers with bank freezing accounts over unpaid leasing loans as losses are increasing. BH which is un-der control of Bosnia’s autonomous Muslim-Croat Federation was grounded as the Bosnian arm of Austria’s Hypo Alpe Adria Bank claimed some $4.7 million. Early in February, the bank fro-ze the airline’s accounts over an unpaid leasing loan of 5.5 milli-on marka for two ATR 72 aircraft and a 1.5 million marka reha-bilitation loan. Goran Jovanovic, the president of BH Airlines’ supervisory board said that the accounts were unblocked but now the airline is launching flights.

CROATIA|DIPLOMACY

Zagreb, Baku to boost economic co-operationDuring his official visit to Zagreb, Azerbaijani President Ilham Aliyev met his Croatian counterpart Ivo Josipovic. President Aliyev is confident that his visit would be a success. Expansion of the economic relations between the two countries topped his agenda at the meeting, Javno reported. Noting the growing rela-tions between Azerbaijan and Croatia in all sectors, Aliyev no-ted a good potential for deepening the economic co-operation. Azerbaijan’s President Ilham Aliyev noted the necessity of buil-ding and developing mutually beneficial relations between Azer-baijani and Croatian entrepreneurs. In this regard, he mentioned that business circles would play a bigger role in developing eco-nomic ties between Azerbaijan and Croatia. He outlined seve-ral fields especially transport and tourism as areas of co-opera-tion between the two countries. He briefed Croatian head with economic processes and business environment in Azerbaijan, adding that favorable climate had been ensured in the country for foreign businessmen and foreign investment. Aliyev also hailed the activities of Croatian companies in Azerbaijan. The Croati-an businessmen acquainted Aliyev with activities of their com-panies and expressed readiness to forge co-operation with their Azerbaijani counterparts. The President called on the Croatian businessmen to build closer relations with Azerbaijan. Aliyev has issued a declaration on Azerbaijan’s approaches to the economic co-operation with Europe. He stated that the results of the pro-jects on Azeri gas transportation to Europe will enable to enhan-ce Azerbaijan’s investments abroad outside the energy sector.He considers it very important to make Azerbaijani investments in other spheres.

A delegation of the European Bank for Reconstruction and Development (EBRD) Board of Directors recently paid a working visit to Sarajevo, Bosnia and Herzegovina. The Bank’s envoys met with authorities at State level as well as with officials in the Federation of Bosnia and Herzegovina and Repu-blika Srpska. The Directors of the bank also met with international officials, ci-vil society representatives, investors and entrepreneurs, reads a press release.

Members of the Board delegation comprised of James Hudson, Director for the USA, Andras Karman, Director for Hungary, Czech Republic, Slovak Republic, Croatia and Georgia, Jorma Korhonen, Alternate Director for Fin-land, Norway and Latvia, Klara Krol, Alternate Director for Czech Republic, Hungary, Slovak Republic, Croatia and Georgia, Johannes Seiringer, Director for Austria, Israel, Cyprus, Malta, Kazak-hstan and Bosnia and Herzegovina and

Sergey Verkashanskiy, Alternate Direc-tor for the Russian Federation, Belarus and Tajikistan.

After their meetings in Sarajevo the Board Directors will visit EBRD-fi-nanced projects and also travel to Banja Luka. The EBRD had invested around €1.5 billion in 100 projects in Bosnia and Herzegovina with special emphasis on infrastructure development, support for small and medium-sized enterprises and strengthening the financial sector.

EBRD to finance projects

Bosnian people in Sarajevo. The EBRD had invested around €1.5 billion in 100 projects in Bosnia and Herzegovina. |EPA/FEHIM DEMIR

Speaking at a German Business forum held in the Croatian Chamber of Com-merce (HGK), German Vice Chancellor and Minister of Economy and Techno-logy Philipp Roesler said that German companies are willing to invest in Cro-atia. However he stressed that German companies have expressed concern over the security of their investments and ur-ged for simpler procedures concerning the issuance of various permits and ex-pedite implementation of decisions, Jav-no reported. Roesler went on to say that

Croatia need to be more attractive hub for investments and need to continue combat against corruption and improve the system of dual education.

Noting the growing interest of German companies to invest in Croatia, Roesler said Croatia need to eliminate admi-nistrative barriers and ensure that the labour market is more flexible through reforms of the administrative and social systems. According to Roesler, the signals of Croatia’s accession to EU are positive and will garner partnerships and econo-

mic cooperation between Germany and Croatia. Croatian Economy Minister Ivan Vrdoljak agreed that green field invest-ments is possible if the country continue with reforms, combat against corruption, strengthen competitiveness, invest in in-novations and technology and improve the education system. Impressed with the excellent economic ties between Croatia and Germany, he said there is still scope for further improvement particularly with regard to Croatia‘s entry to the EU on 1 July.

German companies eyeing Croatia

United Arab Emirates recently an-nounced multi million euro investments in Serbia including the construction of a large cargo centre at Belgrade Nikola Tesla Airport. Abu Dhabi plans to invest in Serbia in sectors such as agriculture, infrastructure and air transportation.

The Serbian government has offered UAE national carrier Etihad Airways a minority stake in the Serbian airline, Jat Airways. Talks between the Serbian authorities and Etihad Airways regarding the takeover of Jat Airways will com-mence at end of this month, Beta news agency reported.

Etihad is interested in incorporating Jat into its network.

The Serbian government is ready to allow the Emirati carrier to name its own management for Jat. Etihad requested documentation from Jat, asking it to for-ward all of its international agreements and contracts.

Government sources claimed that Etihad would also take part of Jat’s pilots and base them in Abu Dhabi.

Etihad Airways already has minority shares in Air Berlin, Air Seychelles, Aer Lingus and Virgin Australia.

Late this March, Serbian Minister for

the Economy, Mladjan DInkic, as well as the Deputy Minister in charge of aviati-on, Milutin Popovic, will visit Abu Dha-bi to discuss the potential takeover of Jat and the sale of Jat Tehnika to the Muba-dala Investment Company.

It was reported that in past few months, relations between UAE and Ser-bia is growing stronger, with a dozen vi-sits from Serbian and Emirati officials to each country in the past few weeks. Few weeks back, Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahy-an, had spent vacations on the mountain resort of Kopaonik in Southern Serbia.

Serbia offers a minority stake to Etihad AirwaysSERBIA|AVIATION

CROATIA|BUSINESS

BOSNIA-HERZEGOVINA|POLITICS

27PARTNERSNEWEUROPEwww.neurope.eu24 - 30 March, 2013

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Norwegian energy provider Statoil and co-venturer ExxonMobil have an-nounced their third high impact discove-ry in Block 2 offshore Tanzania in a year.

Statoil said the discovery of 4-6 TCF of natural gas in place in the Tangawizi-1 well will bring the total in-place volumes up to 15-17 TCF.

“The success in Block 2 is the result of an ambitious and successful drilling campaign. We have so far completed five wells within 15 months and will con-tinue with further wells later this year. Recoverable gas volumes in the range of 10-13 TCF brings further robustness to a

future decision on a potential LNG pro-ject”, said Tim Dodson, executive vice president for Exploration in Statoil.

The Tangawizi-1 discovery was made in sandstone of tertiary age. The new discovery is located 10 kilometres from the Zafarani and Lavani discove-ries. It is located in water depth of 2,300 metres and was drilled by the Ocean Rig Poseidon drilling rig.

Statoil and co-venturer ExxonMobil are also working to mature additional prospects in Block 2 and have recent-ly acquired 3D seismic data in areas of Block 2 so far covered only by 2D seis-

mic. Statoil said in a press release that the successful drilling results from Block 2 demonstrated how the company‘s strategy of focusing on high-impact op-portunities is paying off and supports the company’s ambition of international growth. Statoil operates the licence on Block 2 on behalf of Tanzania Petrole-um Development Corporation (TPDC) and has a 65% working interest, with Ex-xonMobil Exploration and Production Tanzania Limited holding the remaining 35%. Statoil has been in Tanzania since 2007, when it was awarded the operator-ship for Block 2.

Major new find offshore Tanzania for Statoil

Iceland’s Foreign Minister Ossur Skarphe-oinsson announced the making of a con-tract to build Iceland’s first platform sup-ply vessel for servicing oil exploration and production in the waters off north and east Iceland, Iceland Review reported on 21 March. At $ 58 million (€45 million) the ship is the most expensive in the Ice-

landic fleet and due to be completed and delivered to its owners, Fafnir Offshore, in July 2014, as stated in a press release.

Ossur said in a press release that Ice-landers were ready to face the challenges of a changing Arctic. “I welcome the ini-tiative of Fafnir Offshore and I predict this heralds a new chapter in the indus-

trial history of Iceland as this is the first vessel specially built for future services to offshore fields north of Iceland. Already, the first licenses have been issued in the Dreki area and I feel certain that the con-tract on the new vessel is the beginning of a prosperous offshore service industry inIceland.”

Iceland purchases first oil exploration ship

NORWAY | ENERGY

Statoil awarded 15 leases in Gulf of MexicoStatoil was the highest bidder on 15 leases in the central region US Gulf of Mexico lease sale last week. With the ad-dition, Statoil will control more than 340 leases in the Gulf of Mexico, Norway Post reported on 21 March. This will further secure the company’s significant lease holder positi-on, Statoil said. “We are pleased with today’s outcome,” said Erik Finnstrom, Statoil senior vice president of Exploration for Statoil in North America. “This addition of leases allows us to further build upon our broad-based strategy for explo-ration in the U.S. Gulf of Mexico and further upgrades our core position in this prolific and proven basin.”

NORWAY | TELECOMS

Sound quality up says TelenorMobile sound quality is now upgraded to provide clearer sound quality during calls that filters out background noise. As of today, Telenor has become the only mobile operator in Norway to offer HD Voice across its network, The Com-pany reported on 19 March.“During the last few years, there has been a rapid development of mobile technology: we‘ve got a faster network, smarter phones, and new services. Soon there won‘t be anything that you can‘t do with your mobile phone. But one area has been lagging behind. Sound quality during calls has not seen any significant improve-ments since the introduction of GSM in the early 90s,“ said Berit Svendsen, CEO of Telenor Norway. With HD Voice, of which Telenor is the only provider in Norway, Telenor‘s customers will experience greatly improved sound quality compared to standard mobile sound quality.

SWITZERLAND |FINANCE

Calastone opens new office in SwitzerlandGlobal fund transaction network Calastone has launched its new Swiss office in Zurich, in a bid to boost its presence and capabilities as an enabler of domestic and cross border funds STP, it was reported on 18 March. Vittorio Pujatti will join as director of Swiss Sales & Business Development in a move to explore and develop business opportunities in the Swiss market. Having over 25 years in high-level sales and managerial experience in the Swiss and Interna-tional securities firms, and financial investments houses, Pujatti has also worked with UBS Investment Bank in Zu-rich as head of US-Equity Proprietary team and as mana-ging director/branch manager at Instinet Schweiz, among others. With over 400 customers and 2,500 active trading links in 17 domiciles including the UK, Switzerland, Hong Kong, Taiwan, Singapore and Australia, Calastone routes over £12 billion of fund transactions per month through its global network.

UBS is coming under fire after signifi-cant payouts and bonuses for top brass were divulged for 2012 despite the bank’s 2.5-billion Swiss Franks loss, The Local reported on 15 March.

In a compensation report issued previous Thursday, Switzerland’s largest bank said it paid out 70 million Franks to executive committee members, around the same as the previous year when it raked in a net profit of 4.2 billion Franks.

CEO Sergio Ermotti, received a sa-lary and bonuses of 8.9 million Franks, up from 6.35 million in 2011, a year in which he spent less than four months as chief executive.

The bank said its total bonus pool for senior managers and staff fell by 27% in 2012 to 2.5 billion Franks from 2.7 billion the previous year. However, the number of employees also dropped significantly over the period after UBS last year announced a multi-year plan to shed 10,000 jobs. UBS Chairman Axel Weber, who was appointed chairman in

May 2012, received total compensation of more than 4.2 million Franks, inclu-ding shares valued at over two million Franks. In its compensation report, UBS said the bank’s underlying performance

was better than the net loss posted, no-ting more than three billion Franks in goodwill impairments, plus 1.4 billion Franks in fines and costs relating to the Libor rate-fixing scandal.

UBS reports heavy bonuses despite losses

UBS Bank has given its top bankers some bonuses on exit. |AFP PHOTO

Switzerland’s watch exports dipped 2.5% to 1.6 billion Swiss Franks ($1.69 billi-on) in February from the same month a year earlier, the Federation of the Swiss Watch Industry said on 21 March, The Local reported.

The slowdown follows a period of

strong growth for the watch industry in recent months, coming after exports rose 10.8% in January.

The watch federation said that last month only watches selling at more than 3,000 Franks saw increases in or-ders.

Sales to Hong Kong and China fell sharply from the previous year. The United States slowed slightly but conti-nued to grow. The situation continued to be favourable for most markets in Europe, apart from France which was down by 11.7%.

Watch exports reverse in February

NORWAY ENVIRONMENT

ICELAND |ENERGY

SWITZERLAND | BANKING

SWITZERLAND | WATCHES

28 EASTERN PARTNERSHIP NEWEUROPEwww.neurope.eu24 - 30 March, 2013

GEORGIA|POLITICS

Venice Commission mulls proposals for Law of GeorgiaThe Venice Commission considered the several sugge-stions put forward by different sides regarding the Law of Georgia on the Courts of General Jurisdiction. However, the discussion process has become contentious triggering misunderstanding among the public, The Messenger re-ported. Amendments to the Organic Law of Georgia on the Courts of General Jurisdiction suggested by the new government have improved many provisions of the organic law and will bring this law closer to European standards. Commenting on formation of the High Council of Justice, the Commission said that the main functions of HCOJ is to organize qualification exams of judges, the selection and appointment of judges of trial and appellate courts, discipli-nary proceedings, legislative drafting and analytical work, quality management and ties with the public. High Coun-cil of Justice comprises of 14 members of which two were appointed by the president and four are parliament mem-bers. According to the current changes, the president will no longer appoint the members, which was readily accepted by the commission. MPs will not be presented there as well. Instead, parliament will confirm the six members from the NGO sector. The other eight members of the council are judges who were confirmed by the self-governing body of the Conference of Judges.

GEORGIA|BUSINESS 

Georgian-Israeli business forum in TbilisiAn Israeli delegation led by Ambassador Yuval Fuchs and Georgian government members recently attended a Geor-gian-Israeli business forum Georgia Gateway 2013, held in Tbilisi. The Israeli delegation comprised of representatives of companies operating in areas such as industry, agricul-ture, communications, and pharmaceuticals. The event was organised by the Israeli Embassy in Georgia, Civil Georgia reported. The forum offered a unique opportunity to dee-pen the co-operation between Georgia and Israeli entrepre-neurs, the Embassy said in a statement. Around 25 Israeli companies and more than 100 Georgian companies atten-ded the forum.

AZERBAIJAN|TRANSPORT

Azerbaijan eyes investments in railwaysAsian Development Bank  (ADB) Vice President Xiaoyu Zhao said the Azerbaijani government has declared its in-terest in co-operation with the ADB in the development of the domestic railway system. “The co-operation can be organized during the new strategic period,” the office said. Back in 2010 the government refused from the use of Bank’s finances under the formal pretext of lack of investment pro-ject. Now the government’s position has changed in relation to the plans for restructuring of OJSC Azerbaijan Railways (ADY). In 2010, ADB planned to approve the first tranche in the amount of $200 million with overall MFF loan to the sum of $500 million. The Bank-drawn consultants fulfilled successfully the first stage of technical assistance by 13 April 2010. The second stage of work of the technical assistance (feasibility study and preliminary designing of first tranche of MFF) was not carried out, according to ABC.az. The Bank expected result of its technical assistance by the end of 2009, but ADY restructuring carried out in summer made its correctives.

During a recent visit to Baku, Ukrainian Mi-nister of Energy and Coal Industry Eduard Stavitski was welcomed by First Deputy Prime Minister of Azerbaijan Yagub Ey-ubov, news agencies reported. Stavitsky met with Industry and Energy Minister Natig Aliyev and also took part in a mee-ting which was attended by representatives of the State Oil Company of Azerbaijan (SOCAR) and Azerenerji OJSC, the Mini-stry of Energy & Coal Industry of Ukraine said in a statement. In course of talks, Ali-yev and Stavitski discussed Azerbaijani gas transportation to Ukraine. The issue about transportation of compressed or liquid Azeri gas to Ukraine would be researched by working groups under the Ministries.

Ukraine’s minister, however, did not disclose volume of Azeri gas to be exported to Ukraine. Ukrainian Minister did not spoke about volume of Azeri gas to be ex-ported to Ukraine. During meeting with Eyubov, Stavitsky discussed the matter of Azeri oil supplies to Ukraine, implementa-tion of gas transport projects TANAP and AGRI LNG.

The use of the Ukrainian gas transport system for the supply of Azeri gas to Europe was also discussed. It was also offered the supply of Ukrainian pipes for gas pipeline TANAP, construction of LNG-terminal in

Ukraine for the supply of Azeri gas to this country. At the meetings, Stavitsky made it clear that energy sector will remain a key sector of co-operation between Ukraine and Azerbaijan, adding that the realisation of the Euro-Asian Oil Transport Corridor (EOTC) certainly remains one of the prio-rities in the energy sector of Ukraine. Other topics covered includes course of project EOTC, preparation for signing of a five-si-ded intergovernmental agreement. Delive-ry of the first shipment of Azeri oil via this corridor will begin in early 2016.

Stavitsky said that Ukraine is interested

to resume Azeri oil supplies to Ukrainian refineries. The Ukrainian party has created all the technical prerequisites for Azeri oil transit through Ukraine to markets of Euro-pe, including the Czech Republic, Slovakia and Hungary with the use of Odessa-Brody pipeline and system Druzhba. According to sources, Ukraine has also offered services in implementation of the hydropower po-tential of Azerbaijan, especially the possibi-lity of re-equipment and modernisation of existing hydropower plants and the design, construction and commissioning of new hydropower plants.

Baku, Kiev discuss TANAP, AGRI pipelines

A Russian gas-measuring station near the Ukrainian border, Russia. Baku and Kiev discussed recently supplies of Azeri gas to Ukraine. |EPA/SERGEY DOLZHENKO

Interior Minister of Morocco Mohand Laenser was recently welcomed in Baku by President of Azerbaijan Ilham Aliyev. The Moroccan guest extended the gree-tings and the best wishes of the king of the country Mohammad VI to Aliyev, news agencies reported.

He thanked the President for the high level of organisation of the international conference on strengthening co-operati-on in fighting terrorism in Baku.

He noted that Baku has undergone a great way of development since his last visit in 2006.

For his part, Aliyev said that bilateral ties between Azerbaijan and Morocco are developing successfully.

He stressed that both countries con-duct active co-operation within interna-tional organisations and always support each other.

Azerbaijan, Morocco discuss fighting terrorism

Georgian Parliament Chairman  David Usupashvili recently paid his first official visit to the United States as Chairman of the Georgian Parliament. Addressing Georgian media in Washington, he said that Georgia’s new administration will not make any new changes its relations with US, Civil Georgia reported.  Usu-pashvili, Chair of the Committee on Foreign Relations, Tedo Japaridze, and member of the Committee on Defence and Security, Irakli Chikovani, visited George Washington University and experts interested in Georgia issues at-tended a round table. The Georgian de-legation members discussed the foreign policy direction of the new government in detail and domestic political issues.

Georgian officials said that bilateral relations with US had further enhanced and improved in economics and trade sectors. Georgia will continue its posi-tive relations with US in all directions as initiated by previous government. The delegation members said that Georgia will find new directions with US espe-cially in economic and trade sectors. After the talks, Usupashvili stated that its US partners are mostly interested in the development of democracy in Georgia. US Deputy Secretary of State Maria Ivanovich and Deputy Assistant Secretary of State for European and Eu-rasian Affairs Eric Rubin also had talks with Usupashvili. They discussed issues of strategic co-operation, NATO inte-

gration, democratisation of the country and the constitutional changes. Rubin hailed the efforts of Usupashvili and his team in the parliament and appre-ciated his work together with leaders of the opposition on the resolution on Georgia’s diplomatic foreign policy and security orientation, on its Euro-Atlan-tic aspirations.

Rubin affirmed that he supports constitutional reform in Georgia.  The Georgian delegation also met with re-presentatives of the state department, who work on Europe, Caucasus and Ge-orgia issues. The parties discussed the planned constitutional changes in the country and agreed that the constituti-on shall not be adjusted to one person.

Usupashvili pays first official visit to USGEORGIA|POLITICS

AZERBAIJAN|DIPLOMACY

AZERBAIJAN|ENERGY

29EASTERN PARTNERSHIPNEWEUROPEwww.neurope.eu24 - 30 March, 2013

On 20 march, Ukraine’s President Vik-tor Yanukovych and US Undersecretary of State Wendy Sherman discussed the case of the jailed opposition leader and former Ukrainian prime minister Yulia Tymoshenko in Kiev.

Tymoshenko, who led the 2004 Orange Revolution protests that derailed Yanukovych's first bid for the presidency, was jailed for seven years on abuse-of-office charges in 2011. She is now facing

a fresh trial on tax evasion and embezzle-ment charges.

Sherman urged Kiev to “step back from this very dangerous moment,” de-scribing the case against Tymoshenko as “political prosecution”.

Meanwhile, Tymoshenko's suppor-ters held a Maslyana celebration near the hospital in Kharkiv where she is un-dergoing medical treatment. Lawmaker Arsen Avakov of the Batkivschyna Party,

joined by members of the party's local organisation, sent “smiling” red balloons up to Tymoshenko's windows. Tymo-shenko greeted her supporters by waving a sheet of paper at them.

“We have gathered here to support Yulia Tymoshenko. Spring is coming, the bad times are going, the current authori-ties will be supplanted by new, which we hope will be more adequate and amend the mistakes made,” Avakov said.

MOLVOVA|EU AFFAIRS

EU Praises MoldovaThe European Commission has presented its annual Euro-pean Neighbourhood Package, detailing political and econo-mic development in its six eastern neighbours, as well as coun-tries in the southern Mediterranean. This year's report shows that Moldova is one of the countries that have reformed the most in the recent year and will benefit from additional funds from Brussels.

BELARUS|DIPLOMACY

Minsk, Vatican discuss tiesAmbassador of Belarus to the Holy See Sergei Aleinik met with Vatican Secretary of State Cardinal Tarcisio Bertone and pre-fect of the Congregation for the Oriental Churches Cardinal Leonardo Sandri on 20 March, BelTA quoted the press service of the Belarusian Foreign Ministry as saying.  The parties dis-cussed prospects for further development of Belarusian-Vati-can co-operation in various fields. Aleinik also handed over to Bertone the original of the felicitation message from Belaru-sian President Alexander Lukashenko to Pope Francis on the occasion of the beginning of his pontificate.

BELARUS|ENERGY

Oil exports down in JanuaryIn January 2013 the exports of Belarusian oil products redu-ced by 14.8% from January 2012 to almost 1.397 million ton-nes. The average price for oil exports went down 7.8% to $802 per tonne, data from the National Statistics Committee of Be-larus showed. In January 2013 the exports of oil products to the CIS rose 17.8% to 346,000 tonnes. The average price ma-de up $930 per tonne. Export of petroleum products to non-Commonwealth of Independent States (CIS) went down by 22% as compared with January 2013 to 1.051 million tonnes. The average price fell by 4% to $760 per tonne. The crude ex-port decreased by 2.3% and reached 136,100 tonnes. The pri-ce averaged $796 per tonne, up 3%. The oil was delivered to countries outside the CIS. Belarus exported 37.895 thousand tonnes of liquefied gas, which was up by 54.6% as against Ja-nuary 2013. The average price per tonne declined by 0.7% as compared with the same period in 2012 and made up $794.

BELARUS|DIPLOMACY

Belarus, Tunisia hold talksBelarus President Alexander Lukashenko has sent his best gre-etings to President Moncef Mazrouki and the people of Tuni-sia as they celebrate Independence Day, the press service of the Belarusian head of state reported. Lukashenko expressed confidence that productive cooperation between Belarus and Tunisia will be increasingly vibrant in all areas.

BELARUS|VISA

Belarus, Singapore ink dealOn 21 March, Belarus and Singapore signed an agreement on the mutual waiver of visa requirements for holders of di-plomatic and official passports, said the Ministry of Foreign Affairs (MFA). Belarus Foreign Minister Vladimir Makei, who was accompanying Lukashenko on state visit to Singapore, inked the agreement with Minister in Prime Minister's Offi-ce, Second Minister for Environment and Water Resources and Second Minister for Foreign Affairs, Grace Fu. The Fo-reign Ministry also said in a statement to the media that Presi-dent Tony Tan hosted Lukashenko to a state dinner at the Is-tana. After the ceremony, Lukashenko met with Prime Minis-ter Lee Hsien Loong.

Following a meeting with Russian Presi-dent Vladimir Putin, Belarus President Alexander Lukashenko agreed on setting up Rosbelavto holding company.

The merger of MAZ and KamAZ to form Rosbelavto holding company promises to be quick after the two-year negotiations. Sources in the Belarusian Council of Ministers say several draft agreements on giving the Minsk Auto-mobile Plant under control of the future holding company are being prepared, Ga-zeta.ru reported.  

“The process of setting up technolo-gical alliances between enterprises of the two countries gains momentum, which seems especially important to me. The work to set up Rosbelavto holding com-pany, which will unite MAZ and KamAZ – the leaders of Russian and Belarusian truck industry, has been started,” Pu-tin  said in St Petersburg after a meeting of the supreme state council of the “union state” of Russia and Belarus and talks with Lukashenko.

Russia’s Industry and Trade Minister Denis Manturov said after Putin's state-ment that the sides were to determine the management system for Rosbelavto hol-ding company by 15 April.

“It will be a separate holding company that must perform the functions of mana-ging two production enterprises of MAZ

and KamAZ,” he noted. Manturov added that the holding company will be founded on a parity basis. “As for the option for a purchase of one share to acquire the con-trolling stake [in MAZ], that is the main question, we have to define the terms by 15 April,” the minister stressed. He was referring to the situation, when the Bela-rusian side is ready to give Rosbelavto a controlling interest in MAZ minus one share. It would allow the Belarusian go-vernment to quit the alliance at any mo-

ment and regain control over the plant's assets. To make the process of setting the holding company definitive and irreversi-ble, the Russian side wants Belarus to give an option for this share to make a control-ling interest in MAZ.

Belarus has been reportedly dragging the process of Rosbelavto formation for two years increasing the assessed valuati-on of its part of industrial assets and pro-posing new conditions on MAZ's stake in the holding company.

MAZ and KamAZ to form Rosbelavto by 15 April

Russia's President Vladimir Putin, left, and his Belarus counterpart Alexander Lukashenko attend their joint press conference at the Konstantinovsky palace in Strelna just outside St Petersburg, after a meeting of the Russia-Belarus Union State's Supreme State Council, 15 March 2013. | AFP PHOTO / RIA-NOVOSTI POOL/ ALEXEY DRUZHININ

Moldova exported 1100 batches of wine and brandy on the Russian market since the beginning of 2013 until 18 Mar-ch, which amounts to 792.5 thousand dekalitres, the Rospotrebnadzor Russian Federal Sanitary Service has reported.

According to the Russian sanitary ser-vice, all of the Moldovan spirits and wine samples that had been subject to experti-se in Rospotrebnadzor’s laboratories in January-March 2013 complied with the

hygienic norms.Rospotrebnadzor said only 16 Moldo-

van companies are currently exporting wine on the Russian market. Almost 50 Moldovan companies are now delivering alcoholic goods on the Russian market, af-ter several wine producers received autho-risation to export their goods to Russia in 2012. Rospotrebnadzor announced in late 2012 that it requested samples and documents from four more Moldovan

companies in order to register them in compliance with the state registration procedure, so that their goods would be authorised to be exported on the Russian market.

Acting Agriculture and Food Industry Minister Vasile Bumacov said the low amount of exports in early 2013 was due to the relatively small number of Moldo-van companies, which export their alco-holic products on the Russian market.

Moldova wine exports to Russia low in 2013

Sherman, Yanukovych discuss Tymoshenko case

MOLDOVA|WINE

BELARUS|AUTO INDUSTRY

UKRAINE|HUMAN RIGHTS

30 EURASIA NEWEUROPEwww.neurope.eu24 - 30 March, 2013

TAJIKISTAN | HEALTH

$33 mln on education, health care Chairman of the parliamentary Foreign Affairs Committee Kanybek Imanaliyev recently had a meeting with the Executive Director of the World Bank Jorg Frieden in Bishkek. At the mee-ting, Frieden said that the Bank will allocate Kyrgyzstan $33 milli-on for education and health care development, Irinnews.org repor-ted. The World Bank envoy said that the Bank has already appro-ved $ 16.5 million project for support of the education sector. The project provides issuance of three million textbooks for elemen-tary and middle school classes. The same amount will be alloca-ted to Kyrgyzstan to support the health care and social protection. In the first half the year, the country will receive $33 million, $14.8 million of them is the grant aid. In late April the Executive Direc-tor of the World Bank and the Swiss Foreign Ministry delegation will pay a visit toKyrgyzstan.During the meeting, Imanaliyev al-so asked the World Bank to cancel its debt in exchange for ecolo-gical projects and help to return stolen assets. He appreciated the Bank and IMF for assistance to Kyrgyzstan, expressing hope that both parties have good chances for productive relations. Imana-liyev suggested considering creation of a new mechanism for de-creasing external debt of developing countries.

UZBEKISTAN |ENERGY

Gas production increasesRussian hydrocarbons giant Lukoil is increasing gas production in Uzbekistan. Growing widespread shortages have urged Uzbek con-sumers to double their intake of dirty coal, as gas is shippedfrom abroad. Lukoil in response has boosted gas production to about 4.3 billion cubic meters (bcm) in 2012 reports, up from 2.6 bcm the year before. Output at the Khauzak-Shady-Kandym-Kungrad field increased by 24.2% and production at Gissar, which started operating in late 2011, reached almost one bcm. This year Lukoil plans to extract 4.4 bcm, 5.2 bcm next year and 8.2 bcm in 2015. Da-ta released by government statistics showed that Uzbekistan's total gas production stayed roughly level at 62.9 bcm in 2012. It would seem that all this gas would alleviate Uzbekistan’s chronic energy shortfalls but with the increasing gas exports, widespread shorta-ges and an increasing reliance on coal is reported.

KYRGYZSTAN | SEcURITY

central Asia security to be discussed in BishkekNikolai Bordyuzha, Secretary General of the Collective Secu-rity Treaty Organisation recently paid an official visit to Bishkek, Kyrgyzstan. During his stay in Bishkek, he briefed the Kyrgyz Pre-sident Almazbek Atambayev that the security of Central Asia issue will be discussed in Bishkek on the initiative of CSTO, Irinnews.org learnt from the President’s press service. At the meeting, Bordyuzha and Atambayev discussed priority issues of the cooperation, arran-gements effected under the aegis of CSTO, including a summit planned for May 2013 to be chaired by the president of Kyrgyzstan.

TAJIKISTAN |FOREIGN AFFAIRS

UK – Tajik coordination on Afghan withdrawal Colin Roberts, Director of the Eastern Europe and Central Asia Di-rectorate of the British Foreign and Commonwealth Office (FCO) recently paid an official visit to Dushanbe, Asia-Plus learnt from the British Embassy in Dushanbe. This was Roberts first visit to Cen-tral Asia. He met with senior representatives of the Tajik Govern-ment to discuss bilateral relations, the situation in Tajikistan, Cen-tral Asia and Afghanistan. During his stay in Tajikistan, Roberts visi-ted Gorno-Badakhshan Autonomous Province (GBAO) and met with envoys of the international donor community.

A recent revised prognosis of the Interna-tional Grains Council (IGC) states that in 2012-2013 world trade overall in wheat flour will decline by 11% from the record level of the prior year. IGC’s prediction for the global flour trade in the aforesaid period is increased by 560,000 tonnes compared to the August forecast. Ho-wever despite the increased forecast, the volume of global flour trade in this season is expected to be 1.7 million tonnes lower than in the 2011-2012 season.

The latest forecast for the current season is at 12,870,000 tonnes of wheat equivalent, compared to the 2011-2012 historical peak of 14,580,000 tons. The reduction by over 500,000 is due to cut-backs in wheat production in key milling nations, especially Kazakhstan. World Grain reported that Kazakhstan as a re-sult has reduced its wheat flower export expectations, Gazeta.kz reported. Still, despite the reduction, the Central Asi-an Nation will continue to lead globally as flour shipping nation. For 2012-2013 season, Kazkahstan’s expected shipment witnessed a slump to 2.8 million tons of grain equivalent compared to the peak of 2011-2012 that was set at more than 3.6 million tons.

According to World Grain, in 2011-2012 season, Kazakhstan’s shipments was equal to more than 50 million hundred-weights of flour equivalent. This indicates that Kazakhstan was the single nation

which registered a near record total of flour exports in a crop year. This 20% reduction this season was due to smaller wheat crop produced in Kazakhstan fol-lowing a severe drought.

World Grain also sees that in 2012-2013 season, Kazakhstan’s leading posi-tion in the world flour market might be challenged by its closest rival Turkey. It was noted that Turkey sought a major po-sition in flour export trade and was ran-ked in second position last season when it shipped 3.05 million tonnes of wheat flour. Latest forecast shows that Turkey’s flour export in 2012-2013 is at 2.8 million tonnes of wheat equivalent, same as latest prospects for Kazakhstan.

The European Union was ranked third by flour export in 2011-2012 as it shipped 1.3 million tonnes, against 1.156 million tonnes in 2010-2011. This season no changes are expected in its exports. In CIS countries, in particular Uzbeki-stan and African countries, flour import might reduce. Despite of the decrease, Uzbekistan still remains the largest flour importer in the world. Uzbekistan as an importer and Kazakhstan and Turkey as exporters accounted for most of the incre-ase to a new peak in 2011-2012. In 2010-2011, Kazakhstan exported 2.526 million tons of wheat flour and 3.514 million tons in 2009-2010, accounting for 26% of the global flour exports in 2011-2012.

The flour market deconstructed

Wheat production increases in Kazakhstan and hits new heights. |AFP PHOTO THOMAS

An oil and gas road show-2013 in Dubai would be held by the Turkmen Ministry of Petroleum and Mineral Resources, the country's Chamber of Commerce and the British Summit Event Ltd company, Turk-menistan.ru reported.

The forum aims to enhance interna-tional cooperation, attract investments of interested oil and gas companies and integrate advanced innovation technolo-gies of the world.

Delivering a message to the event par-ticipants, Turkmen President said that the international forum will be crucial

for production of hydrocarbon resources of Turkmenistan, intensifying exploratory operations, increasing volume of oil and gas processing, development of oil and gas and chemical industry.

The Turkmen Head is confident that this conference will become the most im-portant event, which will allow Turkme-nistan to achieve the desired goals. Leading managers of the Turkmen fuel and energy complex are expected to address the forum. Turkmenistan is well positioned for large-scale investment as reflected in the latest results of an independent audit which af-

firmed that the super giant Galkynysh field is the second-largest natural gas reserve in the world. Turkmenistan is placed in fourth rank in the world in terms of gas reserves. Turkmenistan is one of the key players in the energy market in the Caspian region, exporting raw materials to Russia and Iran for a long time and a new route to China was opened in 2009.

The Turkmengeologiya State Concern reported that the country has 38 oil and 82 gas condensate fields and 153 gas fields, in-cluding 142 onshore fields and 11 fields on its sea shelf.

Oil and gas road show in Dubai

While announcing the draft amendments into the country’s retirement legislation in Kazakhstan’s Majilis (lower chamber), La-bor Minister Serik Abdenov said that plans are to gradually raise the retirement age for women from the current 58 to 63 within a decade, Gazeta.kz reported. Stressing that the changes in the retirement legislation would be gradual, the minister said that women who will retire prior 2018, the re-

tirement age will be annually raised by half a year within the following 10 years. Avde-nov explained that at present women are currently responsible for 3800,000 pensi-on savings accounts. The average savings amount is 25 percent lower than that for men. He added, “The difference in savings is assigned to maternity and child care lea-ves and earlier retirement of women as compared to men.” He mentioned that

currently women retire at 58. Another rea-son he outlined was gender gap regarding salaries. In this regard, he said that for the last five years the average monthly salary of women has been standing at 66-68% of the average salary of men. It was recalled that last year in September when Abdenov was appointed as Minister of Labor and Social Protection, he objected to increa-sing the retirement age.

Changes to pension systemKAZAKHSTAN |SOcIET Y

UZBEKISTAN | FOOD

TURKMENISTAN |ENERGY

31RUSSIANEWEUROPEwww.neurope.eu24 - 30 March, 2013

RUSSIA|NGOS

NGOs checked for foreign agents, extremismActing on  instructions from  the Prosecutor General‘s Office, government inspectors in at least nine Russian re-gions have conducted hundreds of  unannounced checks on  non-governmental organisations, including well-known human rights, environment and religious groups, the Moscow Times reported. The  checks are designed to catch organisations that receive foreign funding and are involved in political activities but have failed to register as foreign agents, as required by a law passed in 2012. After tens of thousands of protesters took to the streets of Mo-scow to  demand free elections beginning in  December 2011, officials accused groups that receive foreign funding and are seen as opposition-leaning of being foreign pup-pets bent on  destabilising Russia. Vote monitor Golos, one of the groups often accused of being a foreign agent, saw its Samara office inspected on 18 March, Kommersant reported.

RUSSIA|ADOPTIONS

Moscow angry over adoptive boy’s death in USOn 19 March, the Russian Foreign Ministry criticised a decision by United States authorities not to file charges against the adoptive parents of a Russian-born boy who died in January, sparking a diplomatic row between the two countries. Russian officials claim toddler Max Shatto - born Maxim Kuzmin - was tortured and murdered by his adoptive US mother, whipping up a storm of controversy less than two months after Moscow banned US adoptions. On 18 March, a Texas official said there was no “evidence to support holding anybody criminally responsible” for the death of the three-year-old, adopted in Texas by Alan and Laura Shatto. “The Texas authorities’ decision not to press charges against the Shatto couple over the tragic death of Maxim Kuzmin raises serious questions,” said Konstantin Dolgov, the Russian foreign ministry’s special representative for human rights.

RUSSIA|LOANS

EIB loan to support SMEs in Russia signedThe European Investment Bank (EIB) is lending €200 mil-lion to Vnesheconombank to finance projects promoted by SMEs and mid-caps to help mitigate the effects of the financial crisis in the Russian Federation. The EIB funds will co-finance projects fostering the development of the private sector, improving social and economic infrastruc-ture and addressing climate change mitigation and adapta-tion. “The development of a strong SME sector, one of the strategic goals of the Partnership for Modernisation bet-ween the European Union and the Russian Federation, is of key importance for the diversification and modernisation of the Russian economy,” EIB Vice-President Anton Rop said. This loan is in line with the EIB’s priority of providing better access to long-term finance in particular to SMEs to help mitigate the effects of the financial crisis. To this end, the EIB is joining forces with well-established financing in-stitutions like Vnesheconombank and its subsidiary banks, which know the local market and have SMEs and mid-cap companies as their customers. This credit line loan is being granted in the framework of the EU-Russia Partnership for Modernisation (P4M) launched at the 25th EU-Russia Summit held on 31 May – 1 June 2010 in Rostov.

MOSCOW – On 19 March, Russia and Cyprus held last-minute talks trying to find a way out of the bank levy deadlock. After Cypriot lawmakers overwhelmin-gly rejected an  EU bailout proposal  that would have required a tax on deposits in the country‘s banks, Cyprus‘s Finance Minister Michael Sarris flew to Russia for tense talks. Sarris had tendered his resignation but Cyprus President Nicos Anastasiades rejected it.

Political observers in Moscow say that pressure from Russia may have factored in Cyprus’ decision to reject the EU propo-sal, snubbing Brussels and Berlin.

Russian business leaders and govern-ment officials angrily criticised the EU’s proposed levy on Cypriot bank deposi-tors. Cyprus is one of the largest investors in Russia. But eurozone leaders, particu-larly in Germany, argue that a significant proportion of the Russian funds flowing through Cypriot bank accounts are being laundered.

Russian President Vladimir Putin has called the proposed measure “unfair, un-professional and dangerous,” his spokes-man Dmitry Peskov said. He said Putin held a special meeting on 18 March to discuss developments in Cyprus.

Prime Minister Dmitry Medvedev told a meeting of the Supervisory Board of Vnesheconombank that Russia will ad-just its relations with Cyprus in the event the island nation taxes bank deposits. He said the move “looks just like confiscation of people’ money”. He said this practice was very well known and is familiar to many Russians from the Soviet period. “But Cyprus is a country with market eco-

nomy, a member of the European Union,” Medvedev quipped.

Russian billionaire Mikhail Prokho-rov said that Europe has set a dangerous precedent in encroaching on the sanctity of private property.

Meanwhile, AlfaBank‘s chief econo-mist  Natalia Orlova told New Europe on 18 March that, according to some figures, there are around $20 billion of Russian deposits in Cyprus but this is “basical-ly the money that flew to Cyprus in the 1990s”. The island is a haven for offshore Russian wealth.

She said that in the last 10 years Cyprus was not used by big banks or companies. “While we still have some companies which are keeping Cyprus-ba-sed subsidiaries, in reality Cyprus was not perceived as a key counterpart for Russian banks or companies,” Orlova said.

“Unfortunately there are few offi-cial figures we can really rely on, but my feeling is that Cyprus was the sort of the transition economy for Russian banks and companies rather than a counterpart per se,” Orlova said, explaining that this money was transferred to other European countries or US accounts or even went back to Russia.

She noted that $20 billion is not a lot of money for Russia because its annual capital outflow is $60 to $80 billion. She added that $20 billion is 2% of the local retail and corporate deposits in Russian banks so it’s a very small part of overall Russian savings.

The Alfa Bank economist said an im-portant question raised by Moody’s are how at risk are Russian banks and compa-nies to problems in the Cypriot banking sector and how likely are Russian deposi-

tors and creditors to get their money back after an EU-managed bailout.

Orlova also noted that Russia could also incur indirect costs from the freeze on bank transfers, as its banks have large outstanding loans to Cypriot companies.

Cyprus is also seeking an extension to a €2.5 billion loan it received from Russia in 2011, which expires in 2016.

There are reports that Putin might not go ahead with a bailout loan to Cyprus. It’s not quite clear if Russia will provide any financial support bailout to Cyprus, Orlova said. “While before this proposal to introduce the deposit hair-cut, the Cyprus bailout was maybe $10 billion now we are talking about much higher amounts because there will be banking panic, because there is a freeze in the banking transactions and probab-ly will be very negative on the overall European banking system,” Orlova said. “Now given how the situation around Cyprus is developing, I’m not sure Rus-sia really has an interest to intervene,” she said.

Meanwhile, Russia is also interested in potential gas deposits discovered off-shore Cyprus. Gazprom has reportedly offered Cyprus a plan in which Russian gas monopoly will undertake the restruc-turing of the country’s banks in exchange for exploration rights for natural gas in Cyprus’ exclusive economic zone.

Experts say Russia could also retaliate potentially against the EU if the deposits of its citizens remain targeted for a levy. Germany is becoming increasingly reli-ant on Russian gas supplies through the construction of the Gazprom-backed Nord Stream pipeline, giving Moscow ex-tra leverage in the dispute.

Cyprus, Russia hold talks as EU stands firm

Russian President Vladimir Putin speaking during the Russia - EU Summit in Moscow, 21 March, 2013.| AFP

RUSSIA|ECONOMY

By Kostis Geropoulos

KASSANDRA32

Kassandra@NEurope.eu

NEWEUROPE

Follow me on twitter @Kassandra_NE

24 - 30 March, 2013Once upon a time in Brussels...MEPs have found the agree or disagree options for voting a little limited, and have slowly begun to introduce emoticons into their votes.

The clock is ticking for Dalligate accusersI have been together with John Dalli,

the Health Commissioner who was dismissed by the President of the

European Commission Jose Manuel Bar-roso on 16 October, 2012 without even being given the opportunity to learn what he was accused of, and without even gi-ving him the chance to consult with his lawyer and family. Dalli never signed any written resignation despite being offered a resignation text in the presence of two witnesses and under tremendous psycho-logical pressures.

Since the first day of this crisis, I have listened to his story, asked him many que-stions and became quickly certain that he was the victim of a conspiracy.

As time passed, the detailed version of events the former commissioner carefully explained to me has remained constant.

John Dalli‘s account has not changed in even the smallest detail. He has not had to ‚clarify‘ a single remark.

This cannot be said for those who have been making accusations against him. Their story gets more twisted and convoluted every month.

Today, the ‚official‘ version of events is completely incompatible with the sto-ries that are now emerging.

We believe in the rule of law and in the accountability of our political leaders and the administrations they control. This is why we have pursued this story and we are getting to the moment when we can say what happened, name those who are guilty of corruption and maladministra-tion, the day when we will speak truth to power.

Now it is Dalli’s time; the time of truth which will be unveilled in the Courts.

On 6 December, 2012, John Dal-li accompanied by his Belgian lawyers Fernand Schmitz and Sophie Cuykens filed a «Plainte avec constitution de par-tie civile» that is a penal suit, against the company Swedish Match, responsible for filing a Complaint against Dalli with the European Commission.

On 20 March, 2013, John Dalli testi-fied before Olivier Hastir of the Belgian judiciary police on the case. His state-ment lasted three and a half hours and among other actions, Dalli deposited the tape recording of the conversation bet-ween MEP Olivier Bové and two officials

of Swedish Match, recorded the day be-fore at Bové’s office at the European Par-liament in Brussels. During this conver-sation, one of them, Johann Gabriellson, said that a meeting described by Swedish match lawyer, Gayle Kimberly, in which she claimed to have met with Zammit, who then asked for the money in return for a favorable directive, never in fact took place.

Now it is not excluded that the Bel-gian authorities will invite the various Commission officials involved, to testify.

Furthermore, on 24 December, 2012 the lawyers of John Dalli, Ariti-Marina

Alamanou, member of the Athens Bar, Laure Levi and Stéphane Rodrigues, members of the Brussels Bar, filed an ap-plication with the European Court of Ju-stice (case D9160) on his behalf against the European Commission for violation of Article 245 of the Treaty.

Until today, the Commission did not present their first comments despite the two month (plus 10 days) deadline, to present their case, expiring in the begin-ning of March.

On 17 October, 2012, during the Eu-ropean People’s Party Congress in Bucha-rest, when the Commission president was asked to explain the party what happened the day before with John Dalli (an EPP Commissioner) he replied, «The Dalli case is closed, trust me.»

It should be noted that the European People’s Party, never asked any explana-tion from Dalli about the dismissal, limi-ting itself to the «trust me» assurances of Barroso. Whether this attitude was politi-cally correct is something our readers will judge.

On my side, all I can say is that John Dalli is an innocent man and the well set trap did not work, simply because the unpredictable happened. Indeed, while everybody involved in this case was confi-dent beyond any doubt that Dalli would be scared by Barroso and under the intimida-tion or terror he would have immediately signed his resignation, he did not.

This was the “black swan” which acted as a strange attractor in the unfol-ding chaotic explosion, which may affect even the re-election of President Barroso for a third term.

Basil A. Coronakis

Letter to the editor

When we are talking about communica-tions it looks like the European Institutions prefer glitter to effectiveness, and once again they are ready to demonstrate their impressive ability to spend taxpayers’ mo-ney on projects destined for failure. One example is Europarl TV, which had cost €9 million per year between 20008 and 2011 and is now comfortably cruising at €7.5 million per year, with €51 million spent so far for a total audience that has ne-ver been communicated officially. Reliable estimates are that this enormous expen-diture of public money results in only a few dozen visitors per day.After the expensive fiasco of Europarl TV, created on behalf of the European Parlia-ment, by a Brussels agency, the same agen-

cy is on the verge of reproducing the failu-re for the Europa portal of the European Commission.Now, in 2013, the biggest and most impor-tant communication tool of the Commissi-on, the Europa web portal looks likely to go to those responsible for the above failure.Reliable sources report that the Europa portal maintenance tender (€70 million over 4 years!) is on its way to be awarded to the same communications “experts” of Europarl TV. If this would be the case a lot of questions will definitely arise and it would be in-teresting for DG COMM to explain how their evaluation processes repeatedly lead to such failures. Giovanni Santini Strasbourg , France

John Dalli is about to be completely vindicated.| BELGA PHOTO BERNAL REVERT