21st Year of Publication number 1073 16 - 22 march, 2014 3.50

www.neweurope.eu

Two months, just two months before the European elec-tions, the European Com-mission decided to grant more than 11 billion Euro to Ukraine. Mostly in the form of loans, but the figure, eleven billion, is on the table, just two months before the election.

Ukraine is not a Member State, has never applied for EU Membership and the people of Ukraine are rather fa-vorable towards joining the Common-wealth of Independent States rather than the European Union.

This money will never reach Ukraine because there are no mech-anisms to make sure that it will reach the final beneficiaries and not the Ukrainian mafia.

The perception, however, that Brussels will give such money to Ukraine, will contribute to the growth of far right parties in the EU.

The anticipated strong presence of the far right parties in Brussels, after the May elections, is a prob-lem much more serious and delicate than the PR exercises with Ukraine. It will be a real problem, the legacy of the Barroso Commission which others will have to address.

The European Parliament is a politically sensitive institution, which has progressed and devel-oped in vitro where theoretical (not applied) democracy and liter-ary legitimacy were the essentials for its growth. That means the next European Parliament will face a far right group, composed mostly

of 'street-fighters', organized with military discipline and neo-Nazi at-titudes, that it will not be capable of handling. While this will be a tech-nical problem for the new Parlia-ment, the real political problem that unfortunately Brussels has not yet perceived is another.

The far right may achieve 10% of the popular vote throughout Eu-rope, which implies that it reflects fifty million Europeans. In this mis-fortune, the ironic anomaly is that fifty million Europeans who voted for neo-Nazis and neo-Fascists, have nothing to do with such ideologies and beliefs.

This will be a political discrep-ancy never seen in Europe and will

create a political vacuum difficult to foresee how it will be filled.

The millions of Europeans that will vote far right in May are neither by neo-Nazis nor neo-Fascists, al-though they will be represented by neo-Nazis and neo-Fascists. They are ordinary people, mostly originating from the moderate left, who lost their jobs, properties and dignity.

That they vote far right out of desperation is due to the fact that the good President and Lady proved to be small time politicians, while in the absence of real political leader-ship, the European Commission, instead of communicating Europe is busy with machinating tenders.

Behind the curtain. BELGA PHOTO JOHN THYS

Wildlife Page 19

AfricA Page 11 Page 07

Golden Virginia, for some!New Europe does a view source of the europa.eu portal to the EU. Behind the scenes, the tender for managing the site went to one of Brussels most for-tunate communications company, Mostra. This tender didnt go to the lowest bidder as, somehow, in the evaluation, the lower bidder, ESN Consor-tium, scored one whole point less than the winner, even though their bid was 17 million lower.

KASSANdRA Page 32

for a stronger european Union

interview with didier reynders Page 09

eU-ASeAN partners in integration

by AmbAssAdor olof skoog Page 10

The Grand Bluff

(More on Ukraine on pages 3-4-6)

EU needs concrete, progressive policyFotis Kouvelis, head of the Greek Demo-cratic Left Party blames the rise of the far right on many factors, including the state of the economy and high unemployment.He adds that Europe must tackle social problems and become more unified or centrifugal forces will strengthen the extremes. With the European elections approaching, Kouvelis also says that poor communications and policy from Brus-sels has weakened support for the union and advocates Europe moving towards the citizens through concrete and pro-gressive policy based on increasing social cohesion.

eU weighs environments cost on energy

interview with fAbrizio bArbAso Page 12

Poor EU communications aids far right election hopes

This week in

michAel emerson Page 06

mAe JemisonPage 14

interviews with

02 ANALYSIS NEWEUROPEwww.neweurope.eu16 - 22 March, 2014

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

Belgium EURO 3.50, Holland EURO 2.69, Central Asia

USD7.5, Central Europe USD5, Canada $5, Denmark:

DKK 19,95, Eastern Europe USD7.5, France EURO 3.04,

Germany EURO 3.57, Greece EURO 4, Hungary

HUF430, Japan Y900, Italy EURO 3.62, Nordic countries

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

How to fill thetechnology gap

There is an undeniable productivity gapbetween the European Union and theUnited Sates. Overall, productivity in theUS is more than 10 percent higher than inthe EU. Editorial p. 2

Decisions on ECB, IMF posts

Eurozone finance ministers last Mondayput off a decision on appointing a newmember of the European Central Bank(ECB) board but said their choice wouldbe made just before a meeting of Euro-pean Union leaders on March 25. p. 6

Laws to facilitate working mothers

Italian President Carlo Azeglio Ciampilast week appealed to lawmakers to makeit easier for women to have more childrenas a means of countering the countryschronically low birth rate. p. 17

New Russiancabinet smaller

President Vladimir Putin unveiled lastTuesday a new government in which thenumber of top posts was cut to 17 from 30and the number of ministries slashed to 14from 24. p. 35

EU entry seen

by 2007

Ukraine hopes to win associate member-ship of the European Union, or agreeterms for EU entry, by 2007, the countrysdeputy foreign minister said recently. p. 40

Massacre of democracy

NOTEBOOK

How to increase returns to education Education and training that was once thestrong point of Europe is now suffering of rigidi-ties, lack of modern attitudes and has no waysto follow the rapid changes that happen in thelabour market. This in turn leads to a series ofproblems in the renovative powers of the societyas a whole and the economy suffers of an obvi-ous lack of qualified people. It is a sad thing tosee Europe to produce so many doctors andlawyers but not enough engineers and artists.

To this effect the Commission adopted onMarch 9 a Communication on The new gen-eration of Community education and trainingprogrammes after 2006. This Communica-tion outlines the content of two major newCommunity programmes in the field of educa-tion and training, which the Commission willformally propose in the summer. These are anintegrated programme in Lifelong Learning, formobility and cooperation between EU,EEA/EFTA and the candidate Countries anda Tempus Plus programme, for the countriesneighbouring the EU, focusing on cooperation

and development in higher (university-level)education, vocational training, school andadult education.

In the field of education and lifelong learning,recent years have seen the rise of programmessuch as Socrates and Leonardo da Vinci, anda growing awareness among member states ofthe importance of placing education and train-ing at the heart of the Lisbon strategy aimed atmaking Europe the most competitive knowl-edge-based economy by 2010.

The communication adopted on this subjectresponds to a number of major challenges andlays down ambitious objectives to ensure from2007 a successor for current programmes sup-porting mobility and cooperation in the fields ofeducation and training. Another target is toestablish a single and unique integrated pro-gramme for education and lifelong learningbringing together the member states, the mem-ber countries of EFTA and the candidatecountries.

SSpain mourned for three daysnearly 200 dead and morethan thousand injured crowd-ed the city hospitals. But for a

nation living under the threat ofdomestic terrorism this was unexpect-ed. Humanity wept silently as mayhemreined supreme in the Spanish capitalMadrid last week with the near simul-taneous going off of bombs during therush hour period when ordinary citi-zens were going to work or children toschool. There was no discrimination ofcaste, creed or race as the aim of theruthless, blood thirsty terrorist act wasto incite terror among the masses andsend a word of inevitability to the gov-ernments fighting the war on terror.

According to unconfirmed claimsa group linked to al-Qaeda that hasclaimed responsibility for the Madridtrain massacre threatened the UnitedStates faced attack soon through awarning sent to a London-based Ara-bic newspaper.

The newspaper, Al-Quds al-Arabi,said it had received an e-mail warningfrom The Brigade of Abu Hafs al-Masri. This is part of settling oldaccounts with Spain, the crusader, andAmericas ally in its war against Islam,it said in apparent reference to Spains

support for the US-led invasion of Iraqlast year.

Al-Quds editor Abdel Bari Atwansaid, In the past, the same organisa-tion sent us similar letters. The

attacks came on the eve of nationalelections but political observers deniedthe explosions had any electoral impli-cations. p. 3

www.new-europe.info12th Year, Number 564

THE EUROPEAN WEEKLY

March 14 - 20, 2004

New EuropePutin isRussias manWith no one obstructing hisway, Vladimir Putin, 51, isracing toward a resoundingre-election victory as Russ-ian president on March 14.A total of 109 million peo-ple are entitled to vote inthe presidential elections.Fifty-percent turnout isrequired for the polls to bevalid, which gives incum-bent Putin more to fearthan his five challengers,who are all rank outsiders.If the turnout is less, a sec-ond round must be called.Putin faces CommunistNikolai Kharitonov, liberalIrina Khakamada andSergei Glasyev, formermember of the Motherlandbloc. Upper parliamentchamber speaker SergeiMironov, who said he isrunning to help the pres-ident, and Oleg Malyshkin,shaven-headed formerbodyguard to ultranational-ist Vladimir Zhirinovsky,are also contenders. But while Putin is riding ona swell of popular support,concerns are quietlymounting at home andabroad about where heintends to lead the countryin his second term. Povertyis still widespread and thewar in Chechnya even nowlooms over Russias future.

p. 4

cyanmageyelloblack

Mourning the dead: Flags flying half mast

Explosions to harm democratic principles, freedom of movement

EU warns Romania over corruption, entry date

Members of European Parliament have warned Roma-nia that its projected 2007 EU entry is under threatunless it speeds up political and democratic reforms,reported AFP last Wednesday. A report detailing criticismsof Romania has been passed at the European Parliaments626-member strong plenary session in Strasbourg by abarnstorming share of 374 to 10, with 29 abstentions. Cor-ruption and failure to abide by the rule of law lie at the heartof Romanias problems. Romania must go beyond the cos-metic, said Emma Nicholson, the author of the report.

EU Enlargement Commissioner Guenter Verheugencalled on Romania last Wednesday to go after the bigfish in a crackdown on corruption, as the country battlesto keep its EU hopes on track, reported AFP. The fightagainst corruption has to tackle the political system. It isntenough to take low-level civil servants to court. The big fishalso have to face trial, Verheugen told the EuropeanUnion assembly.

President Ion Iliescu declared last Thursday that thereport of the Commission on external policy of the Euro-pean Parliament (EP) does not change the basic data of theproblem, it only emphasises certain joint preoccupationsin regard to which the Romanian authorities must showresponsibility and efficiency. p. 33

New Europe bylines

Italy needs a reform of the judiciary

By Marcello Dell/Utri, p. 17

Contingent successes of Slova-kia

By Peter Mihok, p. 28

The Shooting Gallery

All progress comes from underneath. All real achievements are collective. Tony Benn (1925 - 2014) EPA/BEN STANSALL

Time is not always a healer. A decade ago, it was Spains turn to feel the terror of al Qaeda when a series of bombs killed almost 200 hundred people and the nation - and much of the globe spent three days in mourning for this assault on democracy and humanity. As we knew then, we know today: This will never defeat Europeans, neither would it start the sort of apocalyptic war between civilisations any more than it did in 1939 when another madman im-posed his fantasy on the world.Putin was heading to an overwhelming victory, run-ning for the presidency against five unknowns. Eu-rope was warning Romania that corruption in the nation could postpone their membership of the EU. It didnt, much to the continuing anguish of many in Brussels.In Ukraine, their deputy FM was proclaiming that they would have either an associate membership of the EU, or have agreed terms by 2007.

ne 10 YeARS AGO

MMWe are only two months away from the European Parliament elections. This is the good news. The bad news is that the pre-election campaigns in many European Union countries are leaving a rather bitter taste in the mouth.The overall pre-election atmosphere, from the parties election platforms to the candidates speeches, is missing something. Europe is absent. There is little or no mention of European affairs - the programmes, the ideas and proposals to make Europe better, friendlier and more united. It is true, the economic crisis (especially in the southern European coun-tries) has monopolised debates and left little room for any other discus-sion. It is also true that, in the minds of the majority of European citizens in all 28 member states, Europe is something virtual and unrealistic, if not negative and hostile.We have already written about how European politicians must feel they are responsible for Europes bruised image today. One, however, could have expected the European Parliament elections to spark a newfound pride in promoting the European idea and achievements. Instead, the de-bates in almost every single EU member state are focussed almost entirely on regional and local matters.Take Italy for example. The country is currently in a vortex of a politi-cal crisis with the economy at its worst place in years. And now, Matteo Renzi, the new and very young prime minister, is using the European Par-liament elections to score a domestic victory. The situation is very similar in Spain. The country is focussed on the au-tonomous region of Catalonia and its bid for independence. The results of the pro-independence parties in the European Parliament elections will certainly have a serious impact in the Spanish domestic politics the day after the vote. This means that the focus is more on regional issues at home than in European affairs. Greece and Cyprus, too, are living their own drama. In Greece, the debate is focussed on the countrys disastrous economic crisis that has left nearly a third of all workers jobless. In Cyprus, its a political crisis triggered by the debate over a possible solution to the Cyprus Problem - the decades long Turkish occupation of the northern part of the island.In France, politicians are debating the countrys newfound role as an emerging super power overseas. The countrys involvement in Africa has ushered in a new wave of fear that French jihads could attack. And so, the pre-election debate in Paris is more about Islam, refugees and immigra-tion than any other broader European issue. Its a situation that can be easily hijacked by the far-right in the run-up to the European Parliament elections.The story is the same in just about every EU member state. Local and regional issues are prevailing over European issues. It is not without irony that the candidates who are talking about Europe are the Eurosceptics and those affiliated with far-right nationalist parties. Yes, this is the bitter truth. Those who are against Europe and the idea of a united Europe are the ones who are talking the most about Europe in their pre-election campaigns. From this point of view, the debate in the UK is dominated by Scotlands referendum for independence and by the rise of the Eurosceptic party UKIP. In France, it is the far-right National Front party that is questioning the future of the EU and debating European affairs. At the end of the day, however, it is the idea of a politically unified Europe that is being negated and severely undermined. It is completely absent from the pre-election debates. Ultimately, what this means is that Europes potential as a united entity, as dreamed by its founding fathers, has been banished from its own home.

Europes great vanishing act!

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03ANALYSISNEWEUROPEwww.neweurope.eu16 - 22 March, 2014

By Dan AlexeAs Crimea was preparing for the referendum on reunion with Rus-sia, on Friday evening, the meeting in London between US Secretary of State John Kerry and Russian For-eign Minister Sergei Lavrov on the Ukraine crisis had ended with no result. Before the meeting, Kerry had warned that the West would take very serious steps if Russia goes ahead with the annexation of Crimea. The meeting ended with no common position.

Ceding to Russian pressure before the Sunday referendum in Ukraine, the United Nations de-ployed human rights monitors throughout the country, including in Crimea, to establish the facts sur-rounding claims of rights abuses. One of Russias main arguments had been the supposed persecutions of Russian-speaking citizens in Crimea and across Ukraine.

In a statement on Friday, Assis-tant Secretary-General for Human Rights Ivan Simonovic said that plac-ing monitors in Ukraine was neces-sary in order to clear up the pre-ponderance of competing narratives about what exactly has transpired in the country since November.

Simonovic said warning signs about violations had been neglected for years and that there are serious concerns about the weakness of rule of law institutions, lack of account-ability, and ensuing impunity for hu-man rights violations.

Simonovic expressed concern about allegations of excessive use of force and extrajudicial killings in Ukraine, including by snipers, tor-ture, disappearances, and arbitrary

detentions.Russia used allegations of vio-

lations of the rights of Russians or Russian-speakers in Crimea to jus-tify its military intervention, and it is significant that the UN accepted to deploy human rights monitors throughout Ukraine at the very mo-ment when the referendum for uni-fication with Russia was held in the Crimean peninsula.

On Thursday, Russias Foreign Ministry brought another argument and said that recorded violence in eastern Ukraine demonstrated that authorities in Kiev were losing con-trol and that Russia should reserve its right to protect Russian-speaking citizens of Ukraine.

In a statement Friday, the Foreign Ministry noted the tragic events in Donetsk on March 13, 2014, when blood was shed. It blamed the vio-lence on radical right-wing groups.

The ministry said these groups attacked peaceful protesters who were rallying against the destructive positions of people who call them-selves the Ukrainian authorities.

The Foreign Ministry said Rus-sia is aware of its responsibility for the lives of fellow citizens and compatriots in Ukraine and reserves the right to take people under its protection.

The statement noted that one person was killed in the violence in Donetsk. Organizers of the pro-EU rally said the dead man, who was stabbed to death, was from their group.

Behind the scenes, on Thursday also, Former Ukraine Prime Minis-ter Yulia Tymoshenko held talks in Berlin with former Russian oil ty-coon Mikhail Khodorkovsky. The press service of Tymoshenkos Bat-

kivshchyna (Fatherland) party said Khodorkovsky visited Tymoshenko in the Charite clinic in Berlin on Thursday.

The two discussed the situa-tion in Ukraine. Tymoshenko also thanked the Russian intelligentsia -- presumably including Khodorko-vsky -- for supporting Ukraine at this dramatic time.

In Brussels, Crimean Tatar fig-urehead Mustafa Jemilev says NATO should intervene in Crimea, as it did in Kosovo.

He added: NATO intervention usually only happens when there is a massacre; we want it to happen be-fore there is a massacre.

Jemilev was speaking before a meeting with NATO Deputy Secre-tary-General Alexander Verbow.

In Brussels also, EU experts have drawn up a list of 120 to 130 names of senior Russian officials who could be subjected to travel bans and asset freezes as part of EU sanctions over the crisis in Crimea.

Reuters quotes EU officials as saying the five-page list was drawn up by diplomats with experience in Russia and that it contains the names of generals and others from the top echelons of Russias military and po-litical establishment.

Germanys Bild newspaper re-ports the list for visa bans includes Defense Minister Sergei Shoigu, Deputy Prime Minister Dmitry Ro-gozin, head of the presidential ad-ministration Sergei Ivanov, the secre-tary of the National Security Council Nikolai Patrushev, as well as several advisers of President Vladimir Putin.

EU officials were expected to discuss the list ahead of an EU for-eign ministers meeting on Monday.

Tense diplomatic confrontations, as Crimea goes to vote The Ukrainian economy and the

EU generosity

By Christos Kissas, Phd

The Ukrainian economy is in big mess; the country has shown zero percent growth for the last two years, while prospects for this year remains fragile. Unemployment is (officially) around 7.5 percent, and the Hryvnia, the national currency, is plummeting. Last January, the National Bank of Ukraine limited individuals purchas-es of foreign currency and also intro-duced other measures to support the currency, such as limitations of early loan repayments and investments abroad, but without great success. Ukraine used to be a big exporter of agricultural products, mostly grain; although it still has a great potential in this sector, its exports are crum-bling due to the lack of moderniza-tion and low farm income. Indus-trial production fell by five percent in 2013, consumer confidence is low, and the government owes billions to its foreign creditors, including nearly $2 billion to Russia for gas.

There is a huge black market, with international estimates ranging between 30 and 100 percent. This fact, on one hand deprives the gov-ernment from valuable tax resources, but on the other hand dampens the impact of the current crisis and leaves some hope that the economic de-cline is less than the official statistics suggest.

Finally, widespread corruption, (unusually high even by east-Eu-ropean standards), is a serious pre-dicament to the attraction of foreign investment, a fact well reflected in the World Banks ranking of Ukraine in its 2013 Doing Business Report, where Ukraine ranked 137 out of 183 territories for foreign investment.

The bilateral trade relationship Ukraine- European Union is also relatively small at 38 billion euro in 2012; however, the European Un-ion is Ukraine`s top trading partner, representing about a third of the country`s total trade, slightly more than with Russia. This might ex-plain the reasons why the European Commission agreed on Tuesday to give nearly 500 million euro worth of trade benefits to Ukraine, which had been on the brink of default even before pro-Western unrest started in Kiev. This agreement is not without consequences for Europe. The Com-missions plans to remove duties on a wide range products in order to support the Ukrainian economy could irritate Russia, and lead the lat-ter to close its borders to Ukrainian

imports or sue the EU to the World Trade Organization for unfair treat-ment of a trading partner.

More to this, this initial agree-ment between Ukraine and the EU is a first step towards a full trade agreement to be signed later this year, which would practically open the doors of the European markets to Ukrainian exports; depending on the speed of the approval process, tariff reductions could be effective as soon as next June. In return, Ukraine will also have to provide extra access to EU exports. Such agreements come at a moment when similar negotia-tions between Ukraine and Russian are put on hold, sending a clear sig-nal as to the geopolitical nature of the trade agreements.

But the European appetite for help to Ukraine doesnt stop here. Brussels offered an even bigger aid package, totaling $ 15 billion, in loans and grants, to support the economy to get back to its feet. According to the Commission president Jose Ma-nuel Barroso, the combined pack-age could bring an overall support of at least 11 billion euros over the next couple of years, with the mon-ies coming from the EU budget and EU-based international financial in-stitutions. Such package is designed to assist a committed, inclusive and reforms-oriented Ukrainian govern-ment, and poses the condition of Ukraine signing a deal with the Inter-national Monetary Fund.

The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), will be two of the institu-tions to be involved in the aid pack-age for significant amounts.

All this seems extremely gener-ous, while one cannot but be sur-prised by the speed of the decisions. Especially, when one compares them with the difficulties encountered and the lengthy discussions it took to make similar decisions for bailing-out the southern-European euro-zone states. And while the situation is far from being resolved in the euro-zone area, with unemployment rates around 30 percent in Greece and Spain, Brussels see no problem in finding 15 more billion euro to sup-port a non-EU, non-euro member state. Of course its about geopolitics, but with a view to the coming elec-tions of May, isnt such decision an unexpected gift to the euro-skeptics around Europe?

Cossacks volunteers and Simferopol residents sit on benches in a park next to Crimeas regional parliament building, in Simferopol, on March 14, 2014. AFP PHOTO / DANIEL LEAL OLIVAS

04 inside eU NEWEUROPEwww.neweurope.eu16 - 22 March, 2014

By Kostis Geropoulos

On 12 March, Members of the Euro-pean Parliament in Strasbourg called on Russia and Ukraine to immedi-ately come to the negotiating table, but Rus-sian State Duma Deputy Vyacheslav Nikonov told New Europe that there is no way Russia can talk with what it considers to be an uncon-stitutional government.

Russian MPs were in Strasbourg on 12 March to meet MEPs to present the Russian position on the situation in Ukraine. This question was raised by our European coun-terparts, but I dont think its possible because theres no way Russia can work with this rev-olutionary Ukrainian government. It came to power with an illegitimate way by violent coup, violating all the norms of the constitu-tion, Nikonov argued, claiming that this is an unconstitutional government which is not recognised by many Ukrainians also in eastern parts of Ukraine and there is no way Russia can talk to it.

He noted, however, that the Russian MPs and the European Members of Parliament found some common ground on certain is-sues. There is common ground that we should continue contacts and discussions. There is also common ground that all the deaths in Ukraine should be independently investigated because we are really interested in knowing the truth on what happened in Ukraine. There is common ground that Nazis should be prevented in Ukraine as elsewhere, Nikonov said, speaking by phone. These are probably the things we agree on. As on the rest, including the legitimacy of the Ukrainian government, I dont think its possible to find any common ground.

Regarding the decision of Crimeas par-liament voting to join Russia and setting a referendum for 16 March on the decision in

a dramatic escalation of the crisis over the Ukrainian Black Sea peninsula, the Russian Duma state deputy said Russia will be pre-pared to recognise the will of the Ukrainian people in this referendum.

Letting Crimean people vote for their fate is not a gross violation of international law, if at all, compared to the war in Iraq, in Afghanistan, in (former) Yugoslavia, in Libya and many other places and the West, he said. We should take the situation as it is. That was not our choice and that was a sequence of events we could not fore-see and at this point, he argued.

The United States and Europe have de-clared the referendum illegitimate, saying Ukraines central government must be in-volved in decisions about its territory. EU member states are preparing sanctions on Russia, including travel restrictions and asset

freezes against those responsible for violating the sovereignty of Ukraine. The restrictive measures will be taken against Moscow if it does not reverse course in Crimea and start to engage with international mediators on efforts to resolve the crisis.

But Nikonov warned that there will be symmetrical steps on the Russian side if that happens. If there are sanctions on the EU side, there will be countersanctions. Russia I think will add them on mirror-like basis.

He reminded that Russia-EU trade is at approximately $460 billion. It can suffer. No one ever tried to sanction the fifth largest economy on earth, he said.

He tried to calm fears that Russia will be-come involved in eastern Ukraine, saying that so far the situation is pretty peaceful and there is no point for involvement. We will

wait and see what happens in eastern Ukraine and other parts of Ukraine when people do not get their salaries and pensions. Ukraine is almost a failed state at this point, he said.

Asked if the crisis between Russia and the EU could escalate to an energy war, he said that would hurt both the 28-country bloc and Russia. That would be the end of the Euro-pean economy. Almost a third of all European energy has Russian origin. I hope that will never happen, Nikonov said. We are energy interdependent, which is in everybodys inter-est. If Europeans want to risk relying on sourc-es from Northern Africa or the Middle East, God bless them - but even this choice that will take time. American gas can reach the Euro-pean continent but not too soon. America will have energy self sufficiency probably in the 2030s not before, he said.

By Federico GrandessoIn an exclusive report about the crisis in Ukraine, New Europe presents the opinions of three lead-ing members of Italys opposition. They were asked to comment on the possibility of support-ing Ukraine with an important funding interven-tion. Ahead of the European Parliament elections and amidst the rising tide of anti-Europe groups, the question now is whether this operation will have an impact on public opinion in the south-ern countries that have been hit by the economic crisis.

Arturo Scotto, member of the Foreign Af-fairs Committee ( SEL) and the Committee on Europe of the and Europe Committee of the Italian parliament

Europe missed a good chance to shine in the eyes of a democratic movement of civil society that is asking for Europe. The European Unions answer at that moment was not rapid or punc-tual. While Russia was ready to impose other

numbers with a fund of $15bn which has pro-duced. Europe should have acted from a political level and not through the juxtaposition of NATO through a military expansion strategy that didnt help the resolution of the problem. Today, Eu-rope has to help Ukraine not only at the financial level, but, more importantly, at a political level. Europe has to support a dialogue between Mos-cow and Kiev by putting diplomacy at the centre. The economic aid then should have been more substantial before. At the beginning, Europe gave the impression to be more a spokesperson of a military expansion strategy and of an action of the International Monetary Fund. Now we cant turn back in front of this situation. We then imagine a solution based on the Finnish model - a double agreement of association of Ukraine with the EU, but also with the Euro-Asian customs union pro-posed by Russian President Vladimir Putin. We see Ukraine like a demilitarised and neutral zone, this is the only way to avoid a fragmentation of the country or worse a civil war. In this context, Europe must play a role here because the extreme

euro-skepticism could bring us paradoxically to a dangerous scenario on the military field. The problem in Ukraine is not only economical, but also political and diplomatic.

MEP Lorenzo Fontana, leader of the Lega Nord in the European Parliament

We are against the announced funding of 11bn for Ukraine in this period of crisis. This amount of money should be allocated to Europe to support the large number of unemployed and also the entrepreneurs who are the engine of growth in Italy and the rest of Europe. Talking about a possible euro-skeptic reaction ahead of the European Parliament election, I think that during this period of crisis it is difficult to explain to our public why we are sending public funds to third countries.

MEP Carlo Fidanza (Fratelli dItalia-Al-leanza Nazionale)

As an introduction, I would like to highlight that if a sort of FTA is put in place, we will have

a less stringent visa regime at the risk of hav-ing a large number of immigrants coming from Ukraine. So, we will have to support the Ukrain-ians through the funds and with a future FTA that is going to be beneficiary mostly for Ukraine. For example, we will have agricultural products that are going to enter the market at the expense of the EU producers. This operation in Ukraine risks being expensive and also not effective from a political point of view. About a possible euro-skeptical reaction, I think that its very likely and even understandable. The scenario is the fol-lowing: we have to provide a big financial con-tribution, then we will receive a large number of immigrants coming to the EU and finally more agricultural products creating unfair competition in our market. I would call this scenario euro-realism because we are carrying out a bad opera-tion that will be especially negative for some EU countries. About the FTA that is going to be vot-ed soon, I havent decided yet which way to vote. I will have to analyse the whole package because we are not demagogic.

Italian MEPs on EU funding intervention

Russia MPs reject Ukraine, reach out to EU lawmakers

The European Parliament in Strasbourg, 11 March 2014. Russian MPs were in Strasbourg on 12 March to meet MEPs to present the Russian position on the situation in Ukraine. AFP PHOTO/FREDERICK FLORIN

NES PROMO BIGBOOK.indd 1 12/03/14 16:24

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06 ANALYSIS NEWEUROPEwww.neweurope.eu16 - 22 March, 2014

By Theodoros BenakisMoscows unyielding aim to influence

Ukrainian policy has opened a new cold pe-riod with the West - the European Union and the United States - on one side and Russia on the other.

Everyone understands the serious conse-quences of the crisis and there are many: po-litical, diplomatic, financial and possibly even military. But there is another lesser-known con-sequence in Crimea.

The future of the Crimeas Muslim Tatar minority is in limbo. The possibility that they will be targeted in pro-Russian Crimea has been widely discussed by the media over the past couple of days. The small Tatar minority, which represents 12% of the population, could become the biggest victim in Russias new Crimean war.

The issue is even being debated in Turkey, where Prime Minister Recep Tayyip Erdogan and members of his Islamist-rooted Justice and Development party (AKP) have repeatedly de-clared themselves the champions of Islam and

Turkism. From an ethnic point of view, the members of the Tatar minority are the not-so-distant cousins of the Turks. They were expelled from the Ukraine by Joseph Stalin during the Second World War and were sent to the East. They didnt start returning to Crimea until after the birth of the Republic of Ukraine in 1991.

However, Erdogan can do very little to de-fend this ethnic-Turkic minority. Turkey, one of the fastest growing countries among the emerg-ing economies, depends on Russia for natural gas. This is why Erdogan might not be too quick to play the role of protector.

What is more, supporters of the Turkish gov-ernment view Russias involvement in Crimea as a positive development. Some political analysts are highlighting the similarities with the Turkish occupation of Cyprus a large part of its terri-tory has been under Turkish military occupation since 1974. According to the analysts, if a power-ful state can impose, by force, its alleged defence of co-nationals, it would legitimise what the Turks did some 40 years ago.

Meanwhile, on the other side of the Russian

border, in the East, Moscows Central Asian al-lies are starting to loosen their ties.

Kyrgyzstan, which shares a border with China, has been one of Moscows most loyal allies. Yet, the Kyrgyz government has declared that the ousted Ukrainian president Viktor Ya-nukovych, who is backed by Russia, cannot be considered the legitimate leader of the country. Kyrgyzstans stand on the matter has distanced it from Russia.

Also, Kazakhstan, which is Russias most im-portant trading partner since the formation of Russias Commonwealth of Independent States in 1991 and a member of the Moscow-led Eura-sian Economic Union, has also taken an anti-Russian turn.

Kazakhstans position, however, should not come as a surprise. This Central Asian coun-trys borders were delineated by Stalin under his plan to divide all the nations in the region. In addition, during the Soviet era, the huge mo-bilisation of ethnic groups and the installation of Russian settlers in the east territories was a common practice. Thanks to Stalins re-mapping

campaign, the countries in Central Asia have large groups of Russians. In Kazakhstan, for in-stance, Russian descendents make up 23.3% of the population. In the 1990s, these Russians (many of them second and third generation Ka-zakhs), were the victims of widespread or racism and discrimination.

So, the recent events in Crimea are spreading panic that they could be repeated in Kazakhstan.

Economically, most of the countries in Cen-tral Asia are moving closer to China, which is the biggest trading partner in the region. And, Russias determination to reintegrate Crimea is jeopardising its relations with Central Asian countries. One last question concerns the Baltic States, especially Latvia and Estonia, which also have large ethnic-Russian communities 26.9% in Latvia and 24.8% in Estonia.

During an official visit to Estonia last week, Germanys Foreign Affairs Minister Frank-Wal-ter Steinmeier pledged Baltic States will be pro-tected by the West.

Even though the mere thought that Russians are preparing to invade Baltic States again after 1939 is nothing more than a nightmare scenario, it is one that has got these countries worried.

Crimeas smaller international impact

nterview with Michael EmersonBy Dan Alexe

I would hope Putin is still capable of serious calculations, rather than having gone completely insane.

On Friday, New Europe received in its TV studios Michael Emerson, a former EU ambassador to Moscow, presently associate research fellow at the Centre for European Policy Studies in Brussels, for an analytical discussion about the situation in Ukraine and EUs attitude towards Russia. The first question was whether the EU had done enough, except for verbal threats directed at the Kremlin and promises of billions in loans and grants to Ukraine?

Michael Emerson : I think those who are dismissive towards the sanctions process are missing something. The first step is a list of rather symbolic sanctions, indeed, but it is clear from official statements that if Russia says yes to Crimea secession, or if it decides to invade East-ern Ukraine, then there would be a huge step-up in the sanctions. And there is a perception inside Russia that not everybody is happy with the pre-sent drift.

NE: You mean the Russian oligarchs could turn against Putin, feeling that in case of a war, or deterioration of the situation, their own interests might suffer?

ME: Not only the oligarchs, but even poli-ticians like Aleksey Kudrin, the former finance minister, who is widely seen as a potential future prime minister, has said that the effect of West-ern sanctions on Russian economy can quickly

become devastating, by cutting off Russian banks and enterprises from major Western fund-ing. This could easily drive Russia into recession and cause a lot of damage. Then comes the ques-tion whether Putin would still remain popular in the Russian public opinion.

NE: Coming to the 11 billion euros the EU promised to Ukraine, a package that looks strangely similar to the 15 billion dol-lars package that Putin promised to Yanu-kovych back in December (15 billion dollars = 11 billion euros): where will this money come from?

ME: It is indeed a strange confidence, the 11 billion to 15 billion package especially after Barroso has said so many times that we wont get into an auction with Ukraine. Well, 1.5 bil-lion are grants, on the EU Commission budget.

Another 1.5 billion are part of a micro-financial assistance that the EU is paying together with the IMF...

NE: Money that Ukraine will have to pay back?

MEYes. Then we have 3 billions from the EIB, and another big chunk of 5 billion from the EBRD in London, which isnt owned by the EU, but it still is majority-owned by it.

NE: But how can one sell in Europe the idea of giving so many billions to Ukraine when some people in a country like Greece are queuing up for free soup and bread?

ME: It is very simple. We have to decide whether in a case like Ukraine we are dealing with an expanding domain of a renewed Soviet Union, or whether it is an expanding domain of

democracy and human rights. People should un-derstand this.

NE: How about the comparison with Ko-sovo?

ME: This is clearly an abuse of the facts. In the case of Kosovo, the people had suffered a grave injustice. Milosevic had embarked on a campaign that was credibly coming close to gen-ocide. External intervention was fully justified. But all that is completely irrelevant for Crimea.There has been no abuse of the rights of the Rus-sians in Crimea. The only documented abuses have been against the original Tatar population of Crimea, and Tatars, who have been deported under Stalin, have indeed all the reasons to fear a new Russian domination.

NE: Can NATO do something to stop Pu-tin from annexing Crimea?

ME: No. The question of whether Putin should be met with military action from the West is simply off the table, even if by interna-tional standards, Putins actions over Crimea are already at the level that would have provoked the Second World War.

NE: It has been said that Putin cannot be stopped, simply because he might have gone mad, or cannot back off because of the fear of losing face.

ME:I would hope that he is still capable of serious calculations. After all, he comes from the analytical department of the KGB. So, he should still receive and digest information. I hope that this is still the case, rather than hav-ing gone insane.

Putins gamble in Ukraine

Men in military fatigues pass by the statue of a jet fighter close to the Belbek air base, Sevastopols military airport, on March 14, 2014. AFP/DANIEL LEAL OLIVAS

07INTERVIEWNEWEUROPEwww.neweurope.eu16 - 22 March, 2014

By Konstantin Tsapogas - von Taube

The president of the Greek Democratic Left Party (DIMAR), Mr Fotis Kou-velis sat at New Europe Studios with NE Managing Editor, Konstantin Tsapogas-Von Taube.

Excerps from the interview:

KT: You have a special perspective since, until recently, you participated in the Greek government, the government of a country that was the first to, lets say, expe-rience the European solidarity during the crisis and that was some sort of a guinea pig for the troika. And at the same time, it is the first country that exhibits the most signifi-cant consequences as a result of this policy. I am referring mostly to the rise of extreme political powers and the risk to see them in the European Parliament for the first time in the upcoming elections.

FK: It is evident that you are referring to the presence of Golden Dawn, this far-right, Nazi party. Mr Tsapogas, the phenomenon of Golden Dawn is due to many factors. It was fuelled by the crisis, by the absence of social policy; it was strengthened by the sky-high unemployment rate but of course, regardless of these factors, the far-right existed in Greece even before the crisis. As a result, the multi-factorial phenomenon of Golden Dawn needs to be tackled in multi-factorial way. But it is not only that

Europe must proceed with its political unification and tackle problems of social co-hesion, of the people of Europe. Otherwise it will empower day by day the so-called Euro-pean centrifugal forces. It will strengthen dis-trust towards the Europe Union and of course allow the presence of euroskeptic and anti-Eu-ropean powers. As a consequence, it is impor-tant that all those who believe in Europe and in the European perspective, and those who believe that the progressive outlook of Europe is necessary, are present in the upcoming EU elections.

KT: I know that you took part in the Progressive Economics Forum here in Brussels organized by the S&D group. Based on the discussions at the forum and your personal opinion of course, what is the road toward hope for Europe so as to stop heading down this destructive path?

FK: A shift to the European society. Of course, claims can be positive and program-matic choices can be positive as well, in terms of progressiveness, but proper application of these is needed, mr. Tsapogas; proper im-plementation is needed for the future course and evolution of the European reality. This depends on the shaping of the political cor-relations in the European Parliament: which powers will prevail, which powers will be able to write down, in terms of political decision-making, the new path of Europe.

KT: Do you believe that the electoral body understands that?

FK: Not to a satisfying degree. It is signifi-cant that according to polls, euroskepticism has increased in our country and the number of anti-European voices has also risen. This has to do with the fact that the European reality and in particular, the EU, did not have the necessary and useful communication with the citizens. There are too many citizens that view the EU as something distant, alien in relation to every-thing that worries and defines the Greek inter-nal reality and this is a big issue. This issue needs to be addressed. The EU should come closer to the European citizen; not generally, vaguely, not abstractly, but with a concrete and progressive policy that will be based without oscillations on social cohesion.

KT: This phenomenon you are describ-ing is evident, but, setting asside the EU and its institutions, arent you politicians in the EU Member States responsible for this as well? In the sense that politicians have not explained the role of the EU to society, but instead focus mostly on internal matters; also, when politicians participate in a gov-ernment, they tend to undermine the image of the EU by either blaming it for anyt thing bad and attributing everything that is good to themselves by sending people whom they just want to get rid of the political state of play to the EU and, in any case, not the ideal persons to represent the EU Member States in Europe.

FK: This is wrong. And I have to tell you that there are many MEPs from Greece that are very good in their work. The thing is that an MEP, a Greek MEP for instance, does not always have the necessary publicity so that the Greek citizens get to know him better and become able to understand what is the Eu-ropean Parliament, what kind of decisions it takes. Of course there is also the lack of col-lectivity of the functioning of the EU. Lets not forget that important decisions are taken in a summit and not through the collective and representative body of the EU Member

States that is the European Parliament You are right, the Greek society is not famil-

iar with the European Parliament or the Euro-pean Union. And politicians are also undoubt-edly responsible for this. But this is not only a Greek phenomenon. The same happens in other countries as well.

KT: The situation in Ukraine is of course a very important matter that concerns the EU and affects the future of its external re-lations, mainly with Russia. I am not sure whether the significance of this matter has been fully understood in Greece

FK: Yes, I think the majority of the Greek people understand the importance of the Ukrainian issue. Ukraine is part of Europe but the EU, mr. Tsapogas, once again was perceived as an awkward power. It did not have any initia-tive concerning its moves and now it is follow-ing the events. But the EU only has to promote a political solution. Neither threat of sanctions can produce results nor other kind of threats in relation to Russias isolation

... But the fact that Europe did not react, did not intervene, besides the fact that it did not intervene on time and when it intervened, only some Member States intervened on their own: Germany, France, Poland. But this is not a united Europe. This is not a substantially united European Union.

KT: But mr. President, this is what we said before about the quality of people EU Member States governments tend to send to Brussels. For example, as you know, an or-ganization that is supposedly in charge of the EUs foreign policy has been created based on the Lisbon Treaty, but EU Member States deliberately made it weak in order for each Member State to exercize its own foreign policy. Dont you think that this approach should change and the EUs central institu-tion be strengthened so as to exercize this policy?

FK: Of course it is necessary What you mentioned mr. Tsapogas is nothing but a long-standing EU denial to not only shape a common

foreign and defence policy but also to exercize a common foreign policy. Because not exercizing a common foreign policy leaves huge gaps that Member States exploit with a view to exercizing their own foreign policy. Of course this is not the case for all countries We are talking about the more powerful countries. And since we mentioned the German, French and Polish ac-tions everyone in Europe has to understand that we dont want a German Europe, we want a European Germany.

KT: Since you mentioned this, European socialists recently selected mr. Schulz, the current European Parliament President, as candidate for the presidency of the Euro-pean Commission. Do you think this is a right choice? Since this choice could bring another German to lead the Commission, at a time when Germany gives the impression of ruling the entire Europe.

FK: Yes, correlations of powers are still pre-sent. Mr. Schulz, to whom I wish that he wins the elections, is German indeed but the ques-tion is which policy he is positively bound by, whether he is indeed moving towards the path we mentioned earlier in favour of the evolution of the European reality. ..

Even during yesterdays forum that you mentioned, he repeated his visionary policy and its necessary implementation.

KT: Since you spoke about the forum that is organized by the S&D group, does your presence there has anything to do with the decision of the Democratic Left confer-ence to have any MEP that will be elected MEP from its ranks to participate in this group?

FK: Of course. Any elected MEP from our party in the upcoming elections will participate in the S&D group. But whether the Democratic left will also join the European Socialist Party is a whole other story. For instance, there is an Italian party that has belonged to the European S&D for the last 5 years and only yesterday at the conference in Rome decided to join the E Socialist Party party. Our conferences decision is clear. Our MEP or MEPs will belong to the European S&D group.

KT: As far as I know the head of the group, mr. Hannes Swoboda, has stated that he will provide support to all socialist par-ties

FK: equally

KT: This cooperation with the European group mostly consists of social and demo-crats; is DIMAR a social-democratic party?

FK: No. DIMAR is a party that serves the social and democratic ideology. And in Greece we make an effort to form a progressive pole that will bring together social, social-democrat-ic, central-left and green powers. The outlook is very positive. Developments are very good. The first core of this progressive cooperation has al-ready been established and we move on.

EU is an awkward power says DIMARs president KouvelisShift to the European society wanted

08 ANALYSIS NEWEUROPEwww.neweurope.eu16 - 22 March, 2014

The Internet Europe

By Francisco Jaime Quesado

Europe is facing New Internet Challenges. Information and communication technology (ICT) now permeates virtually all aspects of our lives. The Internet Challenges are strongly con-nected with our desire as a collective society for a prosperous and competitive economy, a sustainable environment, and a more democratic, open, healthy society. The Internet Chal-lenges should be seen as a key positive element, empowering EU citizens, growing businesses and helping us build an open, innovative, secure and sustainable innovation society.More than ever, Europe needs clear and balanced Internet Challenges based on a full understanding of the policy issues and of the context in which they are adressed. A pragmatic strat-egy is needed for sustainable growth and prosperity so that Eu-rope can respond to the following main challenges:

-Transforming Europe into the high skill / high employ-ment economy needed in a globalised environment;

- Tackling the effects of an ageing population while improv-ing the major services for the public;

- Doing so in a way that takes account of foreseeable ex-penditure and environmental constraints;Is is very important that the European Comission is able to understand the extreme importance of these issues in terms of promoting real effective Internet Challenges understood by the European Citizens as decisive enablers of change. The effective implementation of the Internet Challenges in Eu-rope demands an Action Plan centered in the main following priorities:

- The Innovation Economy - driver of future wealth;- The Knowledge Society participation for all;- Green ICT support for an eco-efficient economy;- Next Generation Infrastructure : balancing investment

with competition;- Soft Infrastructure : investing in Social Capital;- SMEs and ICT supporting Europes small enterprises;- A single information market enabling cohesion and

growth;- Transforming Egovernment rethinking delivery of pub-

lic services;- Online trust a safe and secure digital world;- Clear leadership rethinking the EUs policy making pro-

cessThe Internet Challenge demands an effective Partnership Contract between all the actors (States, Universities, Compa-nies, Civil Society), in order to build a real Strategy of Confi-dence in the implementation of the different policies. The focus on Innovation and Knowledge as the drivers of creating added value with international dissemination is a unique challenge that may be the answer to a new way of interaction between those who have the responsibility of thinking and those that have the responsibility of producing goods and services. In the New Global, Innovation Society, Internet Challenges have a central role to play towards a permanent insatisfaction with the creation of value and a focus on creativity. In a time of change, the Internet Challenges cant wait. The Internet Chal-lenges in Europe must confirm itself as an enabler actor in a very traditional system, introducing in the economy a capital of trust and change that is essential to ensure a central leadership in the future.

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

A member of New Europes Knowledge Network

A iming to put an end to all the cross border tax planning strate-gies, in July 2013, the Organisa-tion of Economic Cooperation and De-velopment (OECD) released its Action Plan on Base Erosion and Profit Shifting (BEPS), identifying 15 points of actions which would be the focus of its work over the following two years. These actions aim at redesigning the current set of interna-tional tax rules and adopt new consensus-based approaches, including anti-abuse provisions, designed to counter corporate tax-avoidance and enhance transparency.

Governments all over the world seem to share a common view that, though tax audits remain a key source of relevant infor-mation, they suffer from a number of con-straints and lack the relevant tools for an early detection of aggressive tax planning.

In order to enable tax administrations to get a big picture view of multinational enterprises (MNE) groups global value chain, Action 13 of the BEPS Action Plan intends to develop a common template as part of transfer pricing documentation; such template will provide information on MNE groups global allocation of income, as well as its economic activity and the tax-es paid to thecountries where they majorly operate.

Globally, tax administrations view transfer pricing as a mechanism adopted by MNEs to shift profits from high tax ju-

risdictions to low or no tax jurisdictions by entering into inter-company transaction which may not be at arms length.

On 30 January 2014, OECD released a discussion draft on transfer pricing docu-mentation and introduced the concept of a country by country reporting (CBCR) template. Such template would become an integral part of the standard transfer pric-ing documentation.

The template provides for country by country allocation of the groups rev-enues, earnings before taxes, withholding taxes paid, number of employees, capital and reserves, tangible assets and royalties, interest, and service fees paid to or re-ceived from associated enterprises (AEs), thus leading to a so called super transpar-ency for tax administrations. Further, the OECD plans to expand the scope of the template so as to include information rel-evant to other aspects that might be of in-terest to tax administrations.

In our view, the CBCR template be-ing a number-based allocation of a groups results, should not form an integral part of the transfer pricing documentation. This is because the template does not provide any conclusive evidence on the arms length nature of global income or expense allo-cation among the various entities of the group. Further, the reporting requirements of the template are beyond the scope of information needed for a routine transfer pricing examination.

It is unclear how such a number-based document like the CBCR template will help tax administrations to understand the tax planning strategies adopted by mul-tinational groups, or conclude that there was a fair allocation of profits among the

jurisdictions in which they operate. For example, an entity operating in a particular country may incurr higher employee ex-penses than its associated companies with-in the same group operating in other coun-tries. This is not enough to conclude that the activities performed by this entity are critical activities and hence, higher profits from inter-company transactions should be allocated to this jurisdiction. Thus, it is questionable whether such super trans-parency will enable tax administrations to gain a better insight of multinational groups operations.

It is also unclear whether the CBCR template should be prepared and main-tained only by the groups holding com-pany or by all the groups entities. It looks more rational that only the holding com-pany prepares the template, and tax au-thorities of other countries request such template on a need basis, through the exchange of information clause in the tax treaty with the holding companys country. This would not only help to reduce com-pliance costs, but also would help to avoid unintended use of the CBCR template for the purpose of fishing expeditions. It is also worth mentioning that, for country-by-country numbers in such template to be comparable, they should be accounted for using some common financial report-ing standard, such as the International Fi-nancial Reporting Standard (IFRS).

Finally, a clear guidance is needed in order to effectively use and apply the CBCR template, which, as it stands now, it may prove highly detrimental, in case tax and transfer pricing audits of international groups entities are unduly influenced by this template.

OECDs Country by Country Reporting (CBCR) TemplateA move towards super transparency?

OECD Secretary General Angel Gurria AFP PHOTO/JOHN THYS

International Tax Specialist

By Sagar Wagh

09INTERVIEWNEWEUROPEwww.neweurope.eu16 - 22 March, 2014IntervIew:

Why Belgiums FM is in favour of a stronger European Union

I n an exclusive interview with New Eu-rope, the Belgian foreign affairs min-ister talks about the economic crisis and how the European Union succeeded in helping crisis-stricken Greece, Portugal and Ireland. Didier Reynders also stresses the need to shift the current debate away from the Eurosceptics. The minister says he is concerned about the growing divide between those who are for and against a stronger union in Europe.

Edited excerpts of the interview follow.

New Europe: What do you think will be the long-term consequences of the economic crisis?

Didier Reynders: We are living a cri-sis in various countries of Europe with heavy consequences. From a social and economic point of view, Europe was able to take important political decisions and save the euro.

Europe was able to take measures to manage the crisis, help banks, help the economy and even if it was complicated, we succeeded to help Greece, Portugal and Ireland. These mandates to act were only possible thanks to the political EU pro-ject. Then, at a second stage, we were able to give some remedies to the causes of the crisis and to avoid a step back for the future.

One of the answers is the banking union which is going to bring us more Europe when we talk about monetary and economic union. We finally then absorbed the banking shock, but apart from the rules, solidarity is now the big issue for Europe. As we know, the north-ern countries are pushing for a more responsible budget management, while others are pushing for more solidarity. I think that we will need both ideas. We started pushing on the budget respon-sibility with good results in Spain and Portugal and then also Ireland restarted

to give positive indications. At the same time, we slowly put in place a solidarity mechanism to help countries gain access to the financial market. The actual diffi-culty is that we must continue to believe that Europe is the solution!

We have to reinforce the idea of a fed-eral Europe, even if in this period of crisis the public opinion is blaming Europe for this negative period.

The consequence is then protection-ism and nationalism like in the north of Belgium, in Catalonia, in the Basques Countries and in the north of Italy. There is also an idea of economic protectionism. In France, for instance, we can see the cam-paign Lets buy French.

Over the next few months, we will have to resist the idea of putting up barriers, - like what we recently saw in Switzerland where voters said it would be better to close the borders.

I understand this attitude at the in-dividual level from people who just lost their job, but at national level this is as-tonishing. We all know that its the open-ing to the world of international trade which has brought about positive devel-opments in Europe. I hope finally that these little positive economic trends are going to produce a stronger engagement on a European federalism.

Do you think austerity was really so necessary?

I think that in a certain number of cases we should work with a mid-to-long term vision and that we may have been asked to act too quickly with rather brutal meas-ures. Having said that, however, austerity means putting a countrys finances in order. Otherwise, we should convince the other Europeans to pay for the debts of southern countries and at the moment I dont see such a condition.

So we are obliged to go through a phase of restructuring weak budgets in Europe. When I served as finance minister, I always said about Greece and Portugal that we should have worked more with a long-term strategy. Now we are putting in place meas-ures, a true European intervention tool, and I think that in the future we will have a sys-tem of euro bonds. If Europe will be able to build up a strong system of budget respon-sibility, and this means a federal budget, there will also be the possibility to build up more integrated solidarity instruments and to have a long-term vision.

The EU crisis has given rise to euro-scepticism. How can we fight this?

Yes, Im concerned, but I see again a blocked debate between the pro-Europe and the anti-Europe. There is a risk that we will not vote [in the European Parlia-ment elections in May] on European is-sues, but against the national policies like in France, for example. The danger is to have one-third of the next EU parliament composed of euro-sceptical and populist groups whose members are rejecting the European values.

About this, I see two solutions: First, we should elect candidates to the presi-dency of the EU commission from every EU party so that these candidates will have a clear European project for the future. This will also give more visibil-ity to the European debate. The second important element is that the candidates should make the debate more political on concrete topics like employment, fis-cal regulations and not only about anti-Europeanism.

We should have a say about the kind of politics we want for the future of Europe. This will give citizens a feeling that their vote means something. In the end, we have to support a strong project of Europe.

In continent

By Andy Carling

Constructive Ambiguity

Like many sensible people Ive often felt strangely uncom-fortable on large land masses. Theres an unease of being somewhere too large to fathom, and island life is more pref-erable.Continents are dull, overblown and unwieldy. Isles have a geographical purity and of course a glorious variety.Britain is often referred to as an island and the natives plucky class ridden anarchism is presented as an example of the self-reliant, freedom loving nature of many islanders, but this is not quite right. Britain is an island that is utterly convinced it is a continent. So, lets disregard it.Other large islands dont feel like they are islands in spirit. Australia, for example, home to just about every poisonous creature in the world, just feels like a desert, parked just out of reach of Antarctica. Others, like Java and Manhattan are just too full of people.The dangers of introducing continentalists to islands are ob-vious, best shown by William Goldings cautionary tale, Lord of the Flies.Sometimes islands can get confusing, for example the glo-riously named Treasure Island, in Canada is worlds largest island in a lake in an island in a lake. The tautological Name-less Island, also in Canada, is the largest island in a lake in an island in a lake in an island, the Fibonacci of geography.Theres also the issue of phantom islands, ones that may ap-pear on maps but do not exist. Before the advent of GPS and satellite monitoring, is would be extremely difficult to disprove a claimed isle. For example, in 1683, the Bachelors Delight (in truth, a 40 gun ship) had their captain record, We continued to the SW to 47S where we saw an unknown and uninhabited island which I named Pepys. It is a good place for fresh water and tinder. Its harbour is excellent with safe anchorage for a thousand ships.Lord knows where they actually were, but it wasnt Pepys Is-land.Others have been more canny. Phelipeaux Island was named after a French minister, who just happened to be responsi-ble for financing voyages of exploration, and was as real as Atlantis. New South Greenland is now believed to have been a par-ticularly good mirage and some islands that appeared on maps for decades may well have been icebergs, fog banks or simply down to intoxication on a long, lonely sea voyage.Islands have also played a part in our culture, and the term is-lomania that describes someone obsessed with islands was, of course, first used on Corfu by Lawrence Durrell.We could also ask where much of todays music would be if it werent for islands like Jamaica. On the other hand, look at what has been done to isles. The Marshall Islands are set5 to disappear under the ocean as a result of global warming, a change they have no responsibility for. Were also used the Marshalls for testing nuclear weapons.Islands may seem like remote bits of rock in a wild ocean, but thats not how islanders see it. They view the seas as a con-nector not an isolator.They can also be surprisingly cheap. There are dozens on sale for less than a small house in London will cost yes, there is a specialised market in selling islands. Although relo-cating would mean a complete change, it would bring about a more self-sufficient approach to living; the biggest benefit would be not living in London.

Belgiums Vice-Prime Minister and Foreign Minister Didier Reynders pictured during a visit to the Independence Square, 9 March 2014, in Kiev, Ukraine. BELGA PHOTO ERIC LALMAND

10 ANALYSIS NEWEUROPEwww.neweurope.eu16 - 22 March, 2014

R ecently a senior delegation from the ten ASEAN coun-tries visited Europe to discuss experiences of practical integration with the EU. Hundreds of prominent visi-tors descend on Brussels each day, but the ASEAN delegation was particularly significant.

ASEAN represents 600 million peo-ple and is the most promising regional cooperation framework in Asia. ASE-AN is the major political and economic cooperation structure in Asia which is why countries such as the USA, China, Australia, Japan, India and Korea are all lining up for a closer relationship. You dont need to spend many days in the region to feel the dynamics of economic growth and increased political confi-dence. An ambitious agenda on how to connect the ten countries and their peo-ples is now being rolled out. A Master-plan on connectivity has been presented identifying infrastructure projects need-ed to bring the economies closer. Barri-ers will be removed and a freer flow of people, goods and services facilitated.

No other region has gone further than EU on the path of integration. While ASEANs integration is different in origin and objectives, much of what we have achieved in Europe can serve as ideas as indeed ASEAN will also learn from what has worked less well. As ASEAN launches their Economic Community 2015, the successful Single Market of the European Union, will be a source of inspiration.

Inspiring closer cooperation and integration in other parts of the world is in the enlightened self- interest of Europe. Our world turns increasingly more complex, more interdependent and in many ways less predictable. To-day, the global economy pumps elec-tronic goods and textiles, tourists and traders, money and services around the world at an unprecedented level and speed. The well-being of our citi-zens depends on these flows running smoothly. Current economic difficul-ties - noticeable more in some parts of the world than in others - demonstrate how interdependent we have become. Regional integration is an inevitable response to this development. ASEAN governments have realised this and it is in Europes interest to support it.

The ASEAN Masterplan spells

out what needs to be done in each area of integration but also underlines the challenges - the existing digital and eco-nomic divide among ASEAN nations, the need to step up coordination and to remove investment and legal impedi-ments. It also highlights the enormous financial efforts needed in public infra-structure. As integration proceeds there is growing awareness of the need to strengthen transparency and the demo-cratic legitimacy of the process.

The EU is ASEANs third largest trading partner and the largest source of foreign direct investment. As the centre of global economic gravity swings to-wards Asia, ASEANs strategic impor-tance increases. Stability of trade flows in the contested and congested sea lanes of the region is key to the EUs continued growth as the biggest trade actor in the world. The European experience of a rules-based system of political and eco-nomic integration as the most effective tool in building peace and prosperity is very quickly gaining ground also in Asia with ASEAN as the driving force.

The EU has been a trusted dialogue partner to ASEAN for many years and is now stepping up its engagement. We will provide know-how on reducing trade barriers and building a common economic space. We will assist the ASEAN secretariat with trade negotia-tions and to ensure that ASEAN mem-bers fulfil WTO agreements including on market access and trade facilitation. We will step up development coop-eration with those ASEAN countries most in need and transfer technol-ogy and expertise in other areas. We will be looking at blending grants and loans for investments in environmen-tally friendly infrastructure projects.

We will amplify university coopera-tion and student exchanges under the ERASMUS programme and support regional efforts similar to the Bologna process in Europe. We are setting up a dedicated team in Brussels and Jakarta to work with ASEAN on its connectiv-ity agenda as a follow up to the recent visit.

We are exploring the possibility of an EU-ASEAN aviation agreement to promote further people-to-people con-tacts beyond the over 10 million pas-sengers a year travelling between EU and South-east Asia today. We will assist further in the area of disaster manage-ment and foster sustainable livelihoods and clean renewable energy sources, as negative effects of climate change are be-ing increasingly felt. The EU is already a partner in the ASEAN Centre for Hu-manitarian Assistance on Disaster Man-agement

At the same time we are stepping up political dialogue including in seek-ing convergences on areas like human rights, popular participation and good governance. This should cover broader security issues as well such as maritime cooperation and the peaceful resolution of disputes. The upcoming EU-ASEAN ministerial meeting is a stepping-stone for taking the relationship to the next strategic following up Cathy Ashtons visit to the ASEAN Secretariat as well as in several ASEAN countries in the last year.

Going forward we must keep up the momentum and ensure that EU and ASEAN can fully capitalise on the spe-cial quality of two sophisticated regional integration projects working together with different historic backgrounds but connected through globalization.

The EU and ASEAN partners in integration

Christian Engstrm Member of the European Parliament Piratpartiet - The Pirate Party

European Union (EU) Trade Commissioner Karel De Gucht delivers his speech during the opening ceremony of The 1st Association of Southeast Asian Nations (ASEAN) - European Union (EU) Business Summit as part of ASEAN Summit in Jakarta, Indonesia, 05 May 2011

EU Ambassador to ASEAN, Indonesia and Brunei

By Olof Skoog

Telco industry will never make broadband widely available

By Christian Engstrm

The Telco industry has worked diligently to make itself synonymous with the internet service provider industry, in a strategic effort dating back over a decade. From the deceptive renaming of IT to ICT in order to include the Telco industry, via the buyout of all small ISPs to consolidate power with the old national Telco monopolies, all is part of a regulatory capture to prevent the Internet. The telephony industry is ob-solete. It has no further value proposition to the market. It tries to charge me ten cents per minute for a 9,600 bits-per-second connection when I have an always-on 100,000,000 bits-per-second connection at a flat rate. In addition, the telephony connection can only be used for a low-grade voice application, whereas my hundred megabits are general-purpose. In short, the Telco industry has no value proposition whatsoever. The problem is that the Telco industry understands this, that their industry is dead in the water in the face of the internet, and has therefore worked diligently to prevent the Internet from reaching critical household mass. They have done this both in terms of preventing bandwidths where its cash cow - voice calls - are threatened as a concept, and by outright sabo-taging voice applications such as Skype in their networks. The old na-tional Telco monopolies see it as their duty to protect their old voice call cash cow, and force people to use it if they are also using the underlying data services. This is the kind of behaviour we normally drag into court for illegal anticompetitive behaviour.This tragedy started in the late 1990s as the old national Telco monopo-lies, usually privatized to some degree, bought all the small mom-and-pop ISPs before they had grown to a major threat. The old national monopolies understood perfectly what was about to happen. On one of the few markets where this didnt fully succeed, in Sweden, apartments were fibered with 100 megabits per second full-duplex as early as 1999 - fifteen years ago. Thats what could have been in all of Europe, fifteen years ago. Instead, in most other markets and member states, the Telco industry managed a regulatory capture to prevent the futures most criti-cal infrastructure from taking hold and threatening their previous, now obsolete, business.The Telco industry has pulled a number of stunts toward legislators in trying to convince legislators they will provide bandwidth for house-holds, when in reality, there are not and were never any such plans. They are, and have been, stalling for time. There is no intention whatsoever to eliminate their obsolete industry by providing modern communications lines to everybody. This is obvious to anybody who sees the Telco indus-trys long-term strategic incentive, and how it goes completely counter to the public interest. In the United States, studies have arrived at the breath-taking observation that Telcos who were given billions of US dollars to roll out household broadband basically took the money and did nothing. This comes as a surprise to absolutely nobody who under-stands either the Internet or strategic corporate management.The Cable TV industry is in a similar position - the concept of high-bandwidth household connectivity will obliterate their entire business model, which is essentially the ability to send video streams into homes using highly specialized equipment. If you have generalized equipment and connections that can do this much better and cheaper, the whole industry becomes obsolete overnight. Therefore, high-speed DSL is a contradiction in terms used only by the same Cable TV industry.To sum up, if we want high-speed competitive broadband in Europe, it needs to come from small independent providers that dont have the luggage of the old Telco monopolies or cable TV companies. Those old monopolies will try every trick in the book attempting to avoid the already-evident obsoleting.What we need is municipal household fibre for Europe, as important as water and electricity. We need municipal Wi-Fi wherever there is street lighting. And we specifically need that to be provided by an ac-tor who doesnt have old luggage to protect on their balance sheet. The Telco industrys continued entrusting with internet infrastructure goes completely counter to the public interest.

Pirate Cove

A member of New Europes Knowledge Network

11ANALYSISNEWEUROPEwww.neweurope.eu16 - 22 March, 2014

By Meghan Boggess

The time to invest is now and the place to invest is Africa, according to several innovation experts. In re-cent years many African countries growth has accelerated, and the African economy could see a significant boost from increased funding.

Barbara James, founder and CEO of Henshaw Capital Partners, which pro-motes the private equity and venture capital industry in Nigeria, said there isnt nearly enough investment in Africa.

Despite past rhetoric concerning the rise of the African economy, James said this time its for real.

I know weve been saying this for a few decades now, but it is really happen-ing, James said. This development is based on structural integration, and its future will depend on making sure everyone is included.

Thus, the future lies in inclusive design, said Lizbeth Goodman, Chair of Creative Technology Innovation at University Col-lege Dublin. There is no absolute defini-tion of inclusive design, according to the Inclusive Design Research Centre website. Rather, it can be defined along three di-mensions: design that recognizes diversity and uniqueness, using inclusive processes and tools, to create a broader beneficial im-pact. More simply put: design that consid-ers the full range of human diversity.

In order to achieve this type of design, Goodman said a wide variety of people must be allowed to contribute in a demo-cratic way, such that one persons individual need is shared by all.

No one is themselves isolated or damaged or in need in an inclusive design model, Goodman said. It is our need, our collective need as citizens of the world.

This type of design has already been implemented in Morocco, when Good-mans team gave away digital cameras and got back much more than they expected.

The stories that came back to me in particular were from the womens commu-nity, Goodman said, many about abuse. These stories would not have been told out-loud otherwise. Unless our tool had been provided, then the stories would not have come to us. Those womens stories led to the creation of Safety Net, a charity benefiting global anti-domestic violence programs. It started from the amazing, strong women of Morocco, Goodman said. They took a tool intended for Inter-active Shakespeare and they made it a tool for what they needed.

Of course, good ideas are made possi-ble by funding, which, according to James, needs to come from the private, rather than the public, sector.

Africa has its fair share of challenges, in energy, deficit reduction, jobs, climate and other areas, James said. To combat these is-sues, Africa has to create jobs.

Those jobs will not be created by the government, because we are looking to re-duce the size of government, but they will be created by the private sector. Many of our solutions, James said, will come from the private sector.

James said venture capital and private equity are essential in funding the private sector. The percentage of both forms of capital in relation to GDP in Africa is still low compared to that of Europe or the US.

Europe can help Africa build up its cap-ital supply, James said, by making financing available from the European Investment Bank, as well as by encouraging private Eu-ropean investors to look to Africa for their next investment.

There is a lot of work to be done around creating an enabling environment for venture capital and that can be done us-ing grants and using some other techical as-sistance facilities for people who have that kind of money, James said.

Europe has already made some contri-bution. Many of us who studied in Europe and came to European universities are back home in Africa now and helping to create this change and drive this growth in the economy, James said. But you must re-member that we are starting from very low in the levels of development so there is a lot of head room for us.

Attracting a more international com-munity will be easier as future generations become increasingly globalized.

The whole world is a lot more accessi-ble and a lot closer to us, said Jennie Yeung, President and Founder of the United Na-tions Education Science Cultural Health Advancement Foundation.

Yeung said in order to collaborate with others, you first have to like them, and this comes back to underlying cultures and reputations. The Internet allows different groups to connect and grow closer, Yeugn said. Future generations will also benefit from ease of travel.

Once we start traveling, I think thats a natural call for new friendshps, Yeung said. So once you can get over the hump of knowing each other, understanding well the culture, understanding that theres new opportunities, people will start collaborat-ing. This collaboration should eventually lead to innovation, as unique individuals come together to find new uses for existing technology.

Its about integrating what is available to deliver new products, said Kurt Zat-loukal, Professor of Pathology at Medical University of Graz.

Former astronaut Mae Jemison said much of the space technology you see to-day was developed years ago for another purpose.

Goodman sees the same potential for todays technologies, and hopes that inno-vation will move society past a big, clunky, deep, old computer chained to a desk, and toward technologies which support the way that we live, and allow us to develop new and more creative and engaging ways of living.

The future, it seems, will be rampant with innovation, and by directing funding towards the African continent, that innova-tion could mean a more stable and depend-able African economy.

Yeung said what happens in between doesnt matter, as long as you keep learn-ing: whether its the east coming to the west or the west going to the east. Whatev-er direction, theres always a learning path, but once you get through it the sky is blue.

Dr. Greg Austin, Professorial Fellow, the EastWest Institute (New York)

More private funding could mean a bright future for the African economy

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