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Trans-Anatolia, Nabucco, South Stream bet on Turkey |Page 14
NEWEUROPE19th Year of Publication | Number 968 | January 8 - 14, 2012| € 3.50 www.neurope.eu
IN THIS ISSUE EU PolicyInternet finds voice as citizens cry for freedom|Page 7
EU-WorldThe free-market – myth|Page 11
Energy & ClimateCongratulations to Vitoria-Gasteiz,European Green Capital 2012!|Page 10Gazprom, Total, Statoil postpone investment decision until March|Page 12ASN urges French nuclear plants to increase safety|Page 13
Country newsEuropean Commission rejects Belgian budget|Page 20Kozloduy nuclear plant safe from earthquake threat|Page 242012 to be better for Bosnia: High envoy|Page 26Saudi, Turkey sign deals to boost trade, investment|Page 27Tymoshenko prison transfer contested by defence|Page 28Putin sends New Year’s greetings to all Russians|Page 31
Editorial & OpinionForget Iran; Israel is a bigger threat to world peace|Page 4A future without precedent|Page 5Gullible’s Travels|Page 9
A planned EU oil embargo and other effortsto halt Iran's nuclear programme, includingUS sanctions signed into law New Year'sEve by President Barack Obama, may beprompting Tehran to reconsider its threats toshut the Strait of Hormuz. Iranian ForeignMinister Ali Akbar Salehi said Tehranwould like to reopen talks with the West onits nuclear programme. On 5 January,Ankara delivered a Western offer to Tehranto renew negotiations. “I think the sanctionsare working because the Iranian regime issquirming,” Fadel Gheit, a senior energyanalyst at Oppenheimer in New York, told
New Europe. “The Iranians are making allthese big threats on supply and the Strait ofHormuz. The fact of the matter is closingthe Strait of Hormuz could really underminethe regime in Iran because they would bebasically declaring war at the world,” he said.
The EU is mulling an embargo on Iraniancrude oil imports. Gheit said the EU couldimport more African oil and other countriesfrom the Middle East could increase theirexports. “Libya is trying to be back on its feetas quickly as possible, so there are a lot ofoptions,” he said.
Some EU member states, including cash-
strapped Greece and Italy, are pushing for adelay in order to shield their economies. AEuropean Commission spokesman toldNew Europe the Commission is looking atwhere alternative supplies could come from.“Since no decision has formally yet beenmade and no decision as to when such adecision would be fully applicable, no defi-nite reorganisation of crude oil supplies hasyet been made. On oil shocks, theCommunity has its 90 day oil stocks regula-tion (covering crude and products) and liais-es very closely with the IEA in Paris foremergency situations," the spokesman said.
But no definite reorganisation of oil supplies has yet been made
·Pages 4, 5, 6, 13, 19
EU mulls Iranian embargo
Iranian navy fires a Mehrab missile during the Velayat-90 naval war games in the Strait of Hormuz in southern Iran, 1 January 2012. Closing the Strait of Hormuz could really underminethe Iranian regime. | AFP PHOTO/JAMEJAMONLINE/EBRAHIM NOROOZI
EUROZONEThe possibility of the fall of the Eurozoneexists only in the minds of those who fearthat the euro may become the largestworld reserve currency, leaving the dollarin second place ·Page 3
Faustian Dreamer Page 15
UNITED KINGDOMBritish Premier David Cameron hasadmitted that his “veto” during the lastBrussels summit has done nothing to pro-tect British businesses and the UK's finan-cial industry
·Page 6
ENERGYDebt-stricken Greece, which currently hasthe least exploration for hydrocarbons inthe region, is vowing to exploit its oil andgas reserves
·Page 12
HUNGARYAs pressure continues to mount on theHungarian government, financial realitymay be the defining factor that sees con-ciliation on the part of Prime MinisterViktor Orban ·Page 8
ARTS & CULTURE
ANALYSIS Page 2 | New Europe NEW EUROPEJanuary 8 - 14, 2012
NE 15 YEARS AGOCould you be quieter when you play Angry Birds, you might wake up Mr Brok| PHOTO/FREDERICK FLORIN
The Shooting Gallery
German Chancellor Helmut Kohl landed in Moscow in January 1996 to convince the Russians that the West had enough, andthere will be no more expansion on the ruins of the ex USSR after the destruction of the Warsaw Pact. Germany had gainedthe most after the fall of the Berlin Wall. For a long decade during the 1990s, Moscow was politically in limbo, both internallyand in its foreign policy. At home, the Oligarchs were tearing apart the remnants of the Soviet era industry, with the oil wealthand the other natural resources, along with the 'privatisations' of state business being conquered at gun point and not in courtrooms. On the foreign front, Russia was retreating all over the world, leaving vast empty spaces for the Americans and the WestEuropeans to expand their spheres of influence.
Eurozone's fundamentalsin good shape
On 30 December 2011, New Europe On Line (neurope.eu)reported that, according to the EU’s statistical service Eurostat, theEurozone recorded a trade surplus of €1.1 billion in October lastyear, following another significant positive foreign trade balance inthe preceding month of €3.1bn.In reality, the Eurozone has been and will continue to be a posi-tive external trade economy, a fact that lies behind the strong per-formance of the euro against the dollar, even during these times ofgrave financial difficulties.According to any economic theory, foreign trade surpluses consti-tute the most important and unshakable foundation for a curren-cy's external value and the euro is solidly based on such a surplus.In view of this, the current sovereign debt problem in someEurozone countries does not diminish the fact that the Eurozonehas proved itself able to support its currency’s foreign value.Of course, sovereign indebtedness can undermine the value of amonetary unit, but even from this point of view the Eurozonedoes not have a worse problem than US or Japan, in fact it is inmuch better shape. The overall sovereign indebtedness of the Eurozone is around85% of GDP, while the US is at more than 100% and Japan morethan 200% of GDP. In fact, the Eurozone as a whole seems verysolidly based on much better foundations than the US and Japan.Now what about Greece, Ireland and Portugal? All those threeeconomies taken together accounted for less than 5% ofEurozone's total weight. Their combined problem could be con-tained and actually was solved just by creating a €400bn financialbacking facility at the beginning of 2011.In reality nothing seemed to threaten the foreign value of the euro,until contagion affected Italy. Rome's total sovereign debtamounted to the ‘impressive’ total of more than €1.8 trillion – andany doubts over Italy's ability to pay back its debts may trigger anunpredictable chain reaction.International money 'sharks' have also rushed to profit and, giventhe complete chaos in the global financial markets where nothingis clear or controlled, the Italian problem may threaten the entireglobe. Fortunately, more than half of the Italian sovereign debt isfinanced at home, but investors have nevertheless been alarmedand have exited Italian bonds in panic. The problem was aggra-vated by the inability of the European Central Bank (ECB) to actas the American of Japanese central banks would and buy upRoman debt paper, due to the fact that the ECB is not allowed tofinance governments.The stalemate over Italian- and Greek-debt refinancing has takenon global dimensions, given that the New York and Londonfinancial markets expressed alarm at the prospect of an Athens orRome default, and that US and British money spinners who hadbeen playing with Greek and Italian bonds in peculiar ways, wereset to lose out.Given, however, that the stalemate continued, towards the springof 2011 the ECB began buying Greek government bonds in thesecondary markets, initially from French and German banks. TheECB also intervened during October 2011 in the Italian sec-ondary sovereign debt market to buy up old bonds, after Berlinand Paris had traded this assistance to Rome for a change in theItalian government. Then the ECB, just days before 2011 ended,provided almost half a trillion euro to more than 500 Eurozonebanks in soft liquidity loans.This kind of money to banks, along with the €800bn allocated bythe 9 December EU Summit to EFSF/ESM financial supportmechanisms and the IMF, are seemingly enough to see that noEurozone country defaults. There is no doubt that ECB's half tril-lion changed the rules of the game and shaped a way out fromEurozone's indebtedness problem.
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ISSN number: 1106-8299
By Dionyssis Kefalakos
ANALYSISNew Europe |Page 3NEW EUROPEJanuary 8 - 14, 2012
Despite the fact that many English-lan-guage commentators and economists pre-dicted the fall of the Eurozone even beforethe introduction of the euro, and a lot ofmoney-spinners are now betting on thesame thing, the probability of this happen-ing is in fact non-existent.
The reason is simply that a number ofmajor world economic and political powersare attached to it, with France being a largeworld nuclear power and the fact that theother two major powers, the US and Russia,are controlling each other’s arsenals, butParis is not controlled by anyone and there isno way of knowing France's real nuclearabilities.
In short, the possibility of the fall of theEurozone exists only in the minds of thosewho fear that the euro may become thelargest world reserve currency, leaving thedollar in second place and squeezing outpound sterling into a simple national mon-etary unit.
It is another discussion, however, if a Eu-rozone currency reverts to its former na-tional currency. In this respect, we alreadyhave a precedent, with Greece’s formerprime minister George Papandreou.
When he announced at the end of No-vember his intention to put his country's po-sition in or out of the Eurozone to areferendum, Aeolus released all his northerlywinds and, in a matter of days, he had losthis job, a clear indication of the strength ofthe political forces that keep the Eurozonetogether.
Berlin and Paris stop being pleasant whenit comes to the euro, so even the possibilityof one or more countries leaving the Euro-zone must be considered as being out ofquestion.
All that said, what are the prospects of thesingle European money zone concerning itssovereign debt problems? Let us elaborate.
ITALY AND SPAINWith Greece, Portugal and Ireland being
the first countries to ask for help in order toavoid a sovereign debt failure, the stakeswere small enough and the rest of the Euro-zone proved able to support them, mainlydue to small aggregate size.
The three countries were amply sup-ported, and none failed during the past twoyears. However, when the contagion effectreached the third- and fourth-largest Euro-zone economies, namely Italy and Spain, thestakes became large enough to take the en-tire bloc down.
THE LONG TERMTo avoid this, France and Germany asked
the 27 EU countries to back their proposalto build ‘firewalls’ against bankruptcy. 26 re-
acted positively, with the exception of theUK. Almost one trillion euro was madeavailable, with €200 billion from the Inter-national Monetary Fund, as back-up mech-anisms for countries in peril. But even thisamount of money will not be enough to saveItaly and Spain, if both go down together.
In light of this obvious problem, the Eu-rozone put forward two new policies. In thelong term, the creation of a solidly runmoney zone, as far as fiscal deficits and sov-ereign debt issues are concerned. To this ef-fect 26 EU countries, again with theexemption of the UK, are to create a fiscalunion within the EU, making sure that nocountry is running budget deficits above a3% of GNP threshold. But what happens inthe short term?
THE SHORT TERMThe European Central Bank (ECB)
comes into the picture. To overcome its in-stitutional inability to directly help govern-ments in distress via direct purchases of statebonds and bills, the ECB resorted at first tolimited purchases of Greek, Italian andSpanish government debt in the secondarymarkets. This operation was designed tokeep the interest rates of such debts on arazor’s edge of sustainability. In the case ofItaly, the rate was 7% and it was this mech-anism that forced Silvio Berlusconi to resign.But what if pressures increase and investorschoose to abandon those bonds? And this isnot the only problem. What about the Eu-rozone banks with large exposure to thesebad assets? Some French banks had dollarliquidity problems already from last Sep-tember – the mechanism to counter thesenegative developments was revealed in De-cember; the ECB formed an alliance withthe world’s major central banks (Fed, Bankof England, Bank of Japan, Swiss NationalBank, and Bank of Canada), all guaranteeingunlimited liquidity to each other’s banks.
What is more important, however, is thatthe ECB released almost half a trillion euroin soft loans with three-year maturities tomore than 500 Eurozone banks, at an inter-est rate of only 1%.
On top of this, in order to reassure themarkets, the ECB states that such opera-tions could be repeated in the future for as
long as needed. What more could the bankshave expected? Fortunately, all the ECB in-terventions did not omit governments indire straits.
Of course, there is still no possibility fordirect help, but who is to stop the commer-cial banks from making very good profitsjust by using some of that half trillion euroto buy government debt? This money coststhem only 1% and they can invest it in gov-ernment bonds old or new, which can yieldup to 7%. Of course, there are risks attachedto Greek, Italian and Spanish bonds butthose banks are an integral 'part of the game'in their home markets and have a much bet-ter understanding of such risks than the rat-ing agencies.
The ECB is amply financing every Euro-zone bank and through them their govern-ments as well. In this last case, however,indirect sovereign financing is meticulouslycontrolled, not to give the relevant govern-ments the impression that they are being ‘for-given’ for their sins. Austerity must continue,but not to the extent that many believe.
In this way, the Eurozone is countering itsshort-term problems and can have the timeneeded to assemble a long-term solid fiscalunion to avoid similar crises in the future.
Still standing|AFP PHOTO PHILIPPE HUGUEN
By Dionyssis Kefalakos
www.greenpowerconferences.com+44 (0)20 7099 0600
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ECONOMY
Three months that will shake the Eurozone
Page 4| New Europe NEW EUROPE
ANALYSISJanuary 8 - 14, 2012
Last week, the markets released a positive appraisal ofthe Eurozone, together with a warning. The good newscame in the form of two successful debt-paper auc-tions, one by the French treasury and the other by theEFSF, the EU's capital markets’ arm.As for the warning, it came after Spanish FinanceMinister Luis de Guindos, in an interview with the Fi-nancial Times, said that his country's commercialbanks needed new capital injections of at least €50 bil-lion, a statement that was, however, not exactly newsfor many. As market observers know, a statement canhave a different impact on markets, depending on whomakes it.Up to now many analysts and the stress test conductedon Eurozone banks, have arrived at the same conclu-sion, but when the Financial Times published their in-terview with the most competent source on the matter,then the ‘news’ had a completely different impact onmarkets.
What are markets? One should never forget that major trends in any mar-ket tend to be based on the prevailing ‘public opinion’among its players. This is built into the way that mar-kets function, and that is why there is never real equi-librium in them, despite the fact that many armchaireconomists believe that there is – markets always movetowards either a bubble or a crisis, which means that ifthe leading players in any market sit down at a dinnertable, they can push it the way they choose.
Hitting the EurozoneReturning to the Eurozone, the application of a littlemarket theory tells us that the Financial Times is thereto support the London financial industry and poundsterling. The newspaper has acted accordingly on manyoccasions, having repeatedly announced the prospectof the dissolution of the Eurozone – not that they re-ally want this, but to press the markets to a certain di-rection. In conclusion, the Eurozone proved this pastweek that it can still sell debt paper at very low premi-ums, while the need for recapitalisation of its majorcommercial banks is well known, and De Guindos toldthe FT that in Spain this could be achieved via the fu-ture profitability of its banks, but this extra informa-tion was communicated at a secondary level.
Further attacksThere has been an additional unsubstantiated attackon the Eurozone – another major English-languageinformation source, the Wall Street Journal, carried avery detrimental report, saying that many Eurozonecountries are preparing to return to their old curren-cies.Unfortunately, this damaging allegation was based onlyon vague information, which came not from one of theEurozone's 17 central banks or the ECB but from asource in Montenegro, a tiny and obscure WesternBalkans country that is notorious for lawlessness andtrafficking – thus, another hit 'below the belt' for theEurozone and the single currency.
At last, some honestyUnfortunately, we are living in a time when even thegovernor of the Swiss National Bank (SNB) and hiswife are accused of using inside information to profitfrom the money markets, and this concerning themajor step taken by the SNB to peg the franc to theeuro.It would appear that there is seemingly no fortress ofintegrity left in the world, and that there is a real wargoing on out there, so we all had better create the safestpossible refuge, in case the battle comes our way.This is not the first time that humanity has movedbackwards from its achievements – progress in notguaranteed and everything depends on us.
By Dionyssis Kefalakos
There is a warout there inmarkets
Is a war with Iran inevitable? I don’thave the answer to that question. ButI do feel a sense of déjà-vu when I scanthe headlines. Iran is capable of as-sembling a bomb within a year, LeonPanetta, the US defence secretary, toldCBS News recently. Though not asoutlandish, his “warning” carried achilling reminder of Tony Blair’s claimthat Iraq could deploy weapons ofmass destruction within 45 minutes.
One especially unsavoury aspect ofthe debate around Iran is how it isbeing driven by “public relations” pro-fessionals, who try to dress up theirbloodlust in respectable clothing.Without exception, these “opinion-formers” are supporters of Israel, a statefounded on ethnic cleansing, weddedto apartheid and addicted to war. Fol-lowers of Zionism, a racist ideology,are unable to offer objective analysis;yet few in the media bother to ques-tion the motives of such people orhighlight the egregious double stan-dard of demanding robust actionagainst Iran’s nuclear “ambitions”,while keeping mum about the nuclearwarheads that Israel has alreadyamassed.
Moshe Kantor, president of the Eu-ropean Jewish Congress (EJC), issued acomical statement in December last. Itreferred to “reports” – the source ofwhich went unmentioned – that Iranmay be preparing to strike Germany inresponse to an American attack on Iran-ian nuclear installations. “Whether ornot these reports are valid is beside thepoint, we know certain facts and theyare that Iran sees much of Europe as itsenemy,” he added.
Can someone who makes a big hul-labaloo about new “reports” and thenargues it’s irrelevant if they are accu-rate be regarded as credible? Of course,he can’t. Yet Kantor enjoys the kind ofaccess to political leaders that mostlobbyists can only dream of. His or-ganisation’s website tells of how he hasspent years bending the ears of seniorfigures in all of the European Union’sinstitutions about the “threat” fromIran.
It should be emphasised that theEJC does not represent all Europe’sJews, despite how it purports to do so.I have a number of Jewish friends andacquaintances who disagree sharplywith its agenda.
Emanuele Ottolenghi is anotherZionist hawk who has carved out aniche for himself as an “Iran expert”.Formerly the Brussels director of the
American Jewish Committee, he nowworks for the Foundation for the De-fence of Democracies, a neoconserva-tive outfit that includes Richard Perle,a cheerleader for the invasion of Iraq,on its board of advisers.
In a recent article for Standpointmagazine, Ottolenghi asked: “Is Is-rael’s air force – the one that bombedthe Iraqi nuclear reactor in 1981 andthe Syrian one in 2007 – gearing upfor the most daring airstrike in avia-tion history?” He concluded his pieceby arguing that the “internationalcommunity” (translation: the US andits cronies) has until the Spring of2012 to “stop Iran”. After that, Israelmight act alone.
I am tired of reading about howDavid Cameron risks leaving Britainisolated in Brussels. The truth is thatthe UK has an unhealthy level of cloutin European and international affairsand shows no sign of repenting in anymeaningful way for its blood-stainedhistory.
The “experts” who are so adamantthat democracy be brought to Iranusually neglect to remind their readersand listeners that it was Britain andthe US which destroyed democracy inIran. In 1953, MohammedMossadegh, Iran’s elected prime min-ister, was overthrown in a coup stagedby the West. The reason why he wastoppled was simple: Britain felt itowned Iran’s oil and could not tolerateMossadegh’s decision to nationalisethis resource.
Fast forward to December 2011,when George Osborne, the Chancel-lor of the Exchequer, was guest of ho-nour at the Conservative Friends ofIsrael annual lunch at a plush Londonhotel. Osborne was interviewed on-
stage by the right-wing pundit DannyFinkelstein, who asked his views onthe “threat” from Iran. “Well, first of allI think Israel is right to identify this asone of the greatest threats to peace andhuman life in the world at the mo-ment,” Osborne replied, before speak-ing of “this government’sdetermination to use all the tools atour disposal to stop Iran getting a nu-clear weapon.”
Pause for a moment and considerthose lines. Osborne thinks Israel isright to identify Iran as one of thegreatest threats to world peace. If hebelieves his own baloney, he shouldbrush up on world affairs. Iran is notoccupying the land of another people.By contrast, Israel occupies the WestBank and Gaza, as well as parts ofLebanon and Syria. Iran’s most recentwar was with Iraq in the 1980s. Israelattacked Gaza as recently as the pastfew weeks.
Iran may be less than candid aboutits nuclear ambitions but it has signedthe nuclear Non-Proliferation Treaty.Israel has not.
True, Iran’s human rights record isdeplorable. It was the world’s secondhighest user of the death penalty in2010. But invoking that as a casus belliwould be grossly hypocritical, whenone considers that the US was at num-ber five on the global executions table.
My (sadly unrealistic) wish for 2012is that Europe’s leaders stop theirmacho posturing towards Tehran andthat they address a bigger threat toworld peace. The name of that threat isIsrael.
David Cronin’s book Europe’s Al-liance With Israel: Aiding the Occu-pation is published by Pluto Press.
Iranian 200-kilometre (120-mile) range Qader (Ghader) ground-to-sea missile is launched on the lastday of navy war games near the Strait of Hormuz in southern Iran on 2 January. |AFP
PHOTO/JAMEJAMONLINE/EBRAHIM NOROOZI
POLITICS
Forget Iran; Israel is a biggerthreat to world peace
By David Cronin
ANALYSISNew Europe |Page 5NEW EUROPEJanuary 8 - 14, 2012
JERUSALEM – In my nearly ninedecades of life, I cannot recall a time inwhich the past was so irrelevant to poli-cymaking. All of today’s significant devel-opments went unpredicted by anyone.Experts studied the past, but, constrainedby old paradigms, they could not discernthe future.
Today’s dynamic complexity, in which ascience-based, fast-changing global econ-omy makes so many more phenomena in-terdependent, prevents us from foreseeingthe future through linear extrapolations ofthe past. The only certainty is that the fu-ture will be defined by scientific progressand innovation, which cannot be knownahead of time.
As a result, the traditional power ofstates and leaders is declining; in today’sglobal economy, innovators, not politi-cians, wield the most influence. The glob-alized economy affects every state, yet nosingle state can determine the outcomes,because science and technology are bor-derless. Global companies wish to dobusiness worldwide, eroding not just sov-ereignty, but also racism and prejudice, aswell as significantly weakening national-ism. This transformation has placed theworld in the hands of a younger genera-tion, more technologically savvy than theirparents and connected to one anotherthrough social networks that are not con-fined by territory, language, or govern-ment. The young leaders who createdFacebook and Google have had a greaterglobal impact than many statesmen andgenerals.
These young people are also the leadersof erupting political protest movements.The “Arab Spring,” the tent demonstra-tions in Israel, Occupy Wall Street, andthe protests in Russia reveal not a clash ofcivilizations, but a battle of generations.The young generation understands thatthe way states and economies are currentlyrun is unfit for the new era.
Yet there are political “hitchhikers” whowant to exploit the recent awakening, notby promoting an agenda of freedom, butby imposing a different type of coercion.In the Arab world, it is mainly extreme Is-lamists who are hijacking the young gen-eration’s wave, stealing their revolution.Israel has reacted positively to the will ofthe young generation, but it cannot andshould not intervene in events in the Arabworld. Our hearts are with the rebellingyoungsters and their legitimate yearningfor freedom and basic rights to expressthemselves, choose their leaders, and earntheir own living.
Israelis wait for the day when our coun-try will no longer be the region’s only
democracy, because being an island ofprosperity in a sea of poverty is unnatural.Yet there is a real concern that the ex-tremists, who are politically well organ-ized, are seeking to gain control by theballot over less-organized liberals, thuspreventing peace and stability.
Fundamentalist radicals cannot providereal solutions to the region’s basic prob-lems. The social changes now underwaythreaten their way of life, which includesdiscrimination against women and a banon modern education. But only profoundreforms of traditional authority can pavethe way towards freedom and growth.
Israel can serve as an example to othersstriving to reach economic prosperity andsocial freedom, because its success is dueto the fact that the country had absolutelynothing at the start. We returned to ourhomeland, rich with history, but devoid ofnatural resources. Israel was left with onlyone resource: its human capital. So we in-vested in education and science, and todaywe have the world’s highest percentage ofscientists and patents per capita. Roughly95% of our agriculture is hi-tech. We useless water and yield more crops per acrethan any other country in the world.
What Israel can do, others can do aswell. We will gladly offer a helping handto whoever is willing to reach for it. To-gether, in peace with our neighbors, we
can create a region of hope, development,and success.
In particular, we must do everything inour power to end the conflict with thePalestinians. Israel was not born, and it isnot Israel’s destiny, to govern another peo-ple. We are sincerely interested in the es-tablishment of a Palestinian state livingpeacefully side-by-side with Israel, thedemocratic state of the Jewish people. Forus, peace is both a moral imperative and anational-security strategy, because resolv-ing the conflict would help to stabilize theregion by neutralizing the extremists whoseek to manipulate today’s popular move-ments to advance their radical agenda.
The international community can sup-port these efforts by providing incentivesto countries that choose freedom andprogress. At the same time, determinedand decisive policies must be taken againstextremists. In particular, Iran is a fount ofmoral corruption that spearheads extrem-ism and halts reform, crushing the legiti-mate protest of its own citizens and actingagainst the brave Syrians now fighting fortheir freedom. Iran also uses proxies to in-stigate terror against moderate forces inthe Palestinian Authority, Lebanon, andIraq.
If Iran is successful in its plan to acquirenuclear weapons, its leaders could shakethe Middle East and encourage more ex-
tremism and violence. Israel will defenditself if Iran continues to call for its de-struction. However, the threat is not to Is-rael alone; Iran is a danger to the peaceand stability of the entire world. Theworld’s democracies have declared thatthey will not allow Iran to possess nucleararms; it is their duty to follow through onthat commitment, before doing so be-comes impossible.
Beyond the short-term challengesahead, we all have a duty to profoundlychange the way we prepare our children tocope with today’s new world. In an erawhere yesterday has become almost irrel-evant and we can hardly predict tomor-row, the role of education must allow allchildren to reach their highest potential.Today’s educators should inspire our chil-dren towards creativity and innovation.Self-expression is as important as free ex-pression.
I write this in the 88th year of my life, butnot because I have learned from experience.On the contrary, experience is overrated,often constraining the courage needed toface tomorrow and build an unprecedentednew world. The future is already here; thereis no point in looking back.
Shimon Peres is President of Israel.Copyright: Project Syndicate, 2011.www.project-syndicate.org
Representatives of the Middle East peace Quartet including former British PM Tony Blair (C top) meet with Israeli and Palestinian negotiators inthe Jordanian capital Amman.|AFP PHOTO / HO / PETRA
By Shimon Peres
POLITICS
A future without precedent
Page 6 | New Europe NEW EUROPE
ANALYSISJanuary 8 - 14, 2012
Besides the simplistic -but true- notionthat Greece’s problems begin from aconsistent failure in Accounting 101,everything else is about managingchange. Or, if we reverse it, we need tochange, in order to start producingsomething that we can sell to others,here or abroad. Thus, we could stop bor-rowing money we cannot afford givingback.
Embracing change could do the trickin a country that, for the time being,seems essentially unwilling to alter theircitizens’ idea of being. For instance, beingofficially busy throughout many work-ing hours has always been a routine foraverage salary earners who wanted to seetheir lives improved. Now, the degree towhich professional moonlighting wasassociated with real productivity (or af-fected the effectiveness of the day job) aswell as with taxed -thus official- pay, isanother story. A great number of em-ployees in the public sector hold secondjobs, either in the black or official econ-omy. Some of them keep businesses aswell, like a case I know who ownsrestaurants and bars, but still remains incivil service to secure the pension. Many
others hold small tourist accommoda-tion units in islands and the mainland.
These luxuries (at an individual level)and distortions (for society at large) arenow over. Dramatic stories will followthe clean up process under way. Civilservants being active in the black econ-omy will see their second jobs vanished(since employers cannot bribe tax col-lectors any more to look the other way),whereas things can go even worse foraloof employees who could be made re-dundant, since their interest towards thesecure income flow (public sector job)was next to zero.
Traditional media will be flooded bystories of public servants who after manyyears of work will found themselvesjoining their redundant friends from theprivate sector. In structural terms, thiscould be a blessing. The key for the fu-ture is not to find a way to subsidise pen-sions of 60-year olds, but make themdiscover the abundant unexplored GreekGDP that lays around, from abandonedold family farms to new online businessideas.
Dr. Demetris Kamaras is Editor of thedailyGreece.net
ECONOMY
Change and collateral damage in Greece
The British premier, David Cameron, has admitted that his'veto' during the last Brussels summit has done nothing to pro-tect British businesses and the UK's financial industry.
When challenged on what safeguards he had secured forthe UK during an interview on Radio 4's Today programme,David Cameron said, "What I stopped was that if you have atreaty within the framework of the European Union that did-n't have safeguards on the single market and on financial serv-ices, Britain would have been in a worse position. He added, "Iam not making some great claim to have achieved a safeguardbut what I did do was stop a treaty without safeguards. Is that
clear enough?"In response to his comments Nigel Farage, UKIP Leader,
said, " David Cameron has finally admitted that he has notachieved some great safeguard for British business - nothinghas changed.
"It is also clear that he has no idea of the details of whatis planned in Brussels for the new treaty, yet earlier thisweek the European Commission announced that both itand member states had forwarded proposed changes tothe treaty. Cameron appears not to know this whichshows he is totally out of the loop."
People march in front of the Greek Parliament during a protest in Athens |BELGA/AFP
David Cameron is on the defensive over his 'veto' |EPA
By Dr. Demetris Kamaras
UK
Cameron can’t name summit ‘veto’ safeguardsEscalating sanctions:
Managing the crisis
There are two types of sanctions policy. The first is a set ofmeasures designed to show diplomatic displeasure, butforeshadowing no real expansion of sanctions or escalationof tension. This was the case with United States sanctionsagainst China after suppression of the Tiananmen demon-strations and United States sanctions against Pakistan forits nuclear weapons policies. The second type is a set ofmeasures designed to force strategic submission by an op-posing state through the progressive expansion and tight-ening of sanctions. This was the case with the internationalsanctions against South Africa intended to force it to endthe apartheid policies. Sanctions are a form of coercion. They may not be in-tended by the perpetrators to signal an intent for war, andare most often not conceived with that end point in mind.Nevertheless, there are situations where economic sanc-tions are understood to be a less lethal option in the rangeof instruments that states should apply to exhaust all peace-ful means before a decision for war is made. There are alsosituations where, regardless of the intent of the perpetra-tors, the sanctioned state will see the pressure as an act ofwar and respond accordingly, thus setting in train a count-down for war or some other form of military clash if thesanctions are not lifted. Once the countdown is set in mo-tion, regardless of who does it and which side is right, thepolicy dynamics become those of crisis management. The parallels are far from exact, but this was more or lessthe case with the Cuban missile crisis. What type of sanctions policy do we now have in placeagainst Iran? Regardless of intent or who is right, we arenow clearly in the escalatory type, in a crisis managementmode to prevent war. This was already the case before thepolitical drama associated with the Iranian naval exercise inthe Strait of Hormuz in late December 2011. The rheto-ric from Iran on this occasion was in one sense overblown,but it should not mask the seriousness with which the Iran-ian leaders approach this. The alleged plot by Iranian offi-cials to assassinate the Saudi Ambassador in the UnitedStates, if true, would be a very solid indicator of just howserious the crisis is viewed in Tehran. More importantly, the alleged plot is a better indicator ofwhere to look for possible Iranian breakout strategies thanthe recent naval exercise might be. The place to look is therealm of covert operations. Iran has two options: one is indirect agitation of militia allies in Iraq and Lebanon, orstaging of provocations in expatriate work forces in theneighboring Arab states. A second option is in the area ofcyber operations. The Iranian Cyber Army, to all intentsand purposes an unofficial group, does have ties to the gov-ernment. The countries applying the sanctions on Iran aredeeply vulnerable in the cyber domain.Another area to look, in the diplomatic domain, may be tothe relationship with Pakistan. If I was an Iranian leader, Iwould be working hard to forge a new strategic alliancewith Pakistan, now so severely estranged from its ally, theUnited States.Whatever the choice, one thing is certain. The Iranianleaders are reviewing their crisis response options. Theseoptions probably have little to do with nuclear policies ornuclear talks with the EU. The question is this: are theleaders who are making sanctions decisions in the EUready for this emerging crisis? Are they fully briefed onIranian breakout options and the risks?
EWI is a New Europe content partner
By Dr. Greg Austin
July 1956: Writers, journalists, and stu-dents started a series of intellectual fo-rums, called the Petőfi Circles, examiningthe problems facing Hungary. Later, inOctober 1956, university students inSzeged snubbed the official communiststudent union, which led to students ofthe Technical University to compile a listof 16-points containing several nationalpolicy demands. Days after, 20,000 pro-testers convened organised by the writer'sunion, which grew to 200,000 in front ofthe Parliament, all chanting the censoredpatriotic poem, the “National Song”.
December 1964: The Free SpeechMovement (FSM) at the University ofCalifornia at Berkeley was started by stu-dents who had participated in Missis-sippi's 'Freedom Summer'. Later, inFebruary 1965, the United States beginsbombing North Vietnam. Students for aDemocratic Society (SDS) organisedmarches at the departure point for manytroops bound for Southeast Asia. In April1965, 15,000-25,000 people gathered atthe capital, an unprecedented turnout.
December 2010: Mohamed Bouaziziproclaimed that there was police corrup-tion and ill treatment in Tunisia. Thissparked revolutions well into 2011 inTunisia and Egypt, a civil war in Libya re-sulting in the fall of its government; civiluprisings in Bahrain, Syria, and Yemen,major protests in Algeria, Iraq, Jordan,Kuwait, Morocco, and Oman, and less inLebanon, Saudi Arabia, and Sudan.
The parallels between all three of theseiconic uprisings are that the protests haveshared techniques of civil response in sus-tained campaigns involving strikes,demonstrations, marches and rallies. Allwere themselves the epitome of the prin-ciple of freedom of expression.
The differences rest with the tools usedto mobilise and organise. As the formertwo were based on word of mouth andmedia such as newspapers and TV, thelatter one saw the largest uprising to haveused the social media to communicateand raise awareness in the face of state at-tempts at repression and internet censor-ship. It was truly a behemothic momentfor the internet, as its potential was finallyreached.
The internet has become a wave ofuntamed power that still has not re-vealed its full force. As people haveincreasingly turned to the internet toconduct important aspects of theirlives, the fundamental principle offreedom of expression with internetcensorship have become ever so del-icately intertwined, yet so frighten-ingly blurred. However, as JusiceJohn Paul Stevens once said: “Theinterest in encouraging freedom ofexpression in a democratic society
outweighs any theoretical but un-proven benefit of censorship.”
Activists are no longer only fighting forhuman rights on the ground, but now alsoonline. internet freedom goes beyondfighting for only a platform to freely ex-press, practice one's faith, or peacefully as-semble, but the benefits of the networkitself grow as the number of users onlinegrow. More and more now, governmentsare increasing their efforts to help andpromote internet freedom throughout theworld, but especially in regions wherecyber dissidents and bloggers are beingsuppressed and persecuted.
Take a look at Russia, where prominentanti-corruption blogger Alexei Navalnywas jailed for 15 days after taking part inanti-government protests over ballot-stuffing and other irregularities in theparliamentary elections.
THE CITIZENThus, with such a possibility tingling
the senses, governments see that to en-courage a movement of magnitudes thatcould even minimise declaring wars in thesake of democracy is the empowermentof the citizen, which will eventually leadto social justice and democratic rule. Theability of people to manage their lives, torecognize and meet their needs, and tofulfil their potential as creative, responsi-ble and productive members of society tothe extent compatible with the empow-erment of others is the ultimate goal, andcitizens have seen the power of the inter-net to help them achieve this state. This isthe very reason why the EU and US havebeen spending money in trying to makethe internet free in repressive locations,which will use the citizens to instil dem-ocratic ideals and empower the people todemand for change.
As Aristotle emphatically wrote, theunderlying principle of democracy is free-dom, since only in a democracy the citi-zens can have a share in freedom. Inessence, that this is what every democracyshould make its aim, and since everyone is
equal according to number, not merit,people should be able to live as theyplease, under the very notion that one fac-tor of liberty is to govern and be governedin turn. As he made clear, “...in democra-cies the poor are more powerful than therich, because there are more of them andwhatever is decided by the majority issovereign”. It is through the internet thatcitizens have grasped Aristotle’s words soeffectively.
Thus, the internet is currently on atrajectory of salvation. Although thereare still paths for the internet that leadto emptiness, the users have found a wayto band together, through new tech-nologies and models that are used toconnect to one another in a meaningfulway. Even governments have seen thatthe users have become ubiquitous andthey themselves are the tools to take theinternet into a different path than it wasoriginally projected. Ideas and ideals arenow being formulated, discussed anddefended online; there are no social bar-riers. The users have created online so-cial structures that are being formed toprovide solutions with creativity andthrough true collaboration.
This trajectory will continue in theyears but with greater force. The scope ofit will widen, bringing unprecedentedchange to our way of lives; it will becomethe new crude oil. A war will wage againstthe technology companies and repressivegovernments against online activists andsupportive governments; a fight betweencontrol and freedom.
A friend told me that I was extremelyfortunate to be able to share my thoughtsand speak out without being restrictedfrom any outside forces. Man's creativeinstinct yearns to break the chains of re-striction on his very core of being. Manyof us have been given a key to unlock andfree thyself from these chains, and that iswhy my voice have joined millions of oth-ers online speaking for those who havenot yet been given a key so that our voicetogether will become sovereign.
ANALYSISNew Europe | Page 7
NEW EUROPEJanuary 8 - 14, 2012
MEDIA
Internet finds voice as citizens cry for freedom
Cyberworld activists fight against censorship, proclaiming their right to express | EPA/NIC BOTHMA
By Stratis G. Camatsos
Does Labourhave the Balls?
The new year has barely begun and already the opening salvoof the new political term in the UK has been discharged;writing in the Guardian Ken Livingstone has outlined histhoughts on the battleground for the London mayoral elec-tions. According to Livingstone, the former mayor who in-tends to run once again for Labour, the May election will bea referendum of Conservative economic policy.Livingstone will be facing off against incumbent BorisJohnson, Eurosceptic and Bullingdon Club pal of primeminister David Cameron, who, claims the challenger, rep-resents the privilege and otherworldliness that current To-ryism stands for. In the week that Cameron approved aknighthood for Paul Ruddock, a hedge fund manager andConservative party donor, Livingstone may have a point;the ruling party is out of touch, and, despite the PM’s cud-dly rebranding, it remains insidiously committed to the oldorder of advantage and avarice. Europe is central to all this. David Cameron may have stoodup to the EU by refusing to go along with the bloc’s plans forrescuing the single currency, but the rapacious anti-Europevoices in his own party haven’t been silenced, Johnsonamongst them. With a large section of his backbenchers op-posed to EU membership (not to mention his Euro MPs),and with prominent Eurosceptics like Johnson and Ian Dun-can Smith haunting the corridors of power, Cameron has farfrom made a truce with his troublesome mutineers, settlinginstead into an uneasy lull.One of the key points of Cameron’s argument against de-fending the euro, was that any extended power that the Eu-ropean Union might now have over economic policy woulddamage the City of London. Once again, the prime minis-ter sought to defend the status of the few and the favoured,in a seemingly instinctual defence of the financial sector.It is probable that the London mayoral elections will in partbe a judgement on the British government, these things usu-ally are, and while the Tories undoubtedly have strong sup-port in the capital, there is also a growing number of votersangry at what they see as the disregard for the ordinary citi-zen in favour of big business and the wealthy classes. Thequestion is, can these voices be marshalled into an effectiveopposition? Livingstone is hoping they can, and that theyall vote Labour.This may be wishful thinking. Detractors may grumble aboutJohnson, Cameron and the rest, but Labour Party solidaritywith the working class, the unemployed and the underpriv-ileged, has long been jettisoned. It simply doesn’t mean whatit once did, and the ideological battle that Ken Livingstonewould like to see fought in London is unlikely to play out inthe way he wants.Under the uninspired leadership of Ed Miliband, Labourseems to be receding evermore into blandness, as typified bythe leader’s new year message in which he mildly chastisedDavid Cameron for being a bit gloomy. If Livingstone is cor-rect, and that economics will be the vote winner, then Labour,in the shape of shadow chancellor Ed Balls, needs some rad-ical polices if they want to successfully counter those ofGeorge Osborne, himself every bit as atavistic a figure asBoris Johnson. But in the week when shadow defence minister Jim Murphy,echoing former advisor Lord Glasman, has said that oppos-ing all the government’s budget cuts is unwise, it seems thatradicalism still comes hard to the Labour Party these days, butunless a serious effort is made to be a real opposition party,then the London election, which could be the first major vic-tory of a political comeback, may prove elusive.
EVERYTHING BUT ARMS
By Cillian Donnelly
Page 8 | New Europe NEW EUROPE
ANALYSISJanuary 8 - 14, 2012
The IgnoranceSociety
Daniel Innerarity, a famous Spanish Thinker that wrotethe famous book about the “Democracy and its Enne-mies” published recently a small essay about the dangerof the Ignorance Society. Despite the global flows ofknowledge, the continuous investment in Technologyand Expertise, people are not able to manage such atremendous amount of ideas and the danger of all thisbecome the basis of an unexpected new ignorance so-ciety is a reality. In a time of change, with new chal-lenges to a complex and uncertain society, people mustuse the knowledge as the right tool for a new collec-tive agenda of economic and social development.This collective war against the Ignorance Societymust be built through an effective Partnership Con-tract between all the actors , in order to build a realStrategy of Confidence in the implementation of thedifferent policies. The focus on Innovation andKnowledge as the drivers of creating added value withinternational dissemination is a unique challenge thatmay be the answer to a new way of interaction be-tween those who have the responsibility of thinkingand those that have the responsibility of producinggoods and services.This collective war against the Ignorance Society mustbe built through the development of an active entre-preneurial culture and attitude - people have most ofthe times an effective negative attitude towards the fi-nancial risk, the focus on innovation and the share of aculture of positive dynamic. We want a more open andcollaborative society. The Knowledge Society –the op-position to the Ignorance Society must be able to bethe real Platform of a more entrepreneurial attitude.,centered in new areas of knowledge and new sectors ofvalue. In a global dynamic and creative world there isno space to the Ignorance Society.Daniel Innerarity is teaching in the Basque Country.The story of the Basque Country is largely the story ofa land of people that want to develop a new contract ofdevelopment against the Ignorance Society. People thatknow that the basis for an effective society of partici-pation and collaboration is the opportunity of drivingan agenda of change based in new ideas and new solu-tions. The message of Daniel Innerarity is in this senseof message in confidence in a better future. A better fu-ture against the undesired possibility of the IgnoranceSociety. We don ´t want the Ignorance Society. We want theopportunity of new ideas and new solutions. These arein fact the “drivers of change” for the world and civilsociety must be able to understand this new challengeand address effective answers to the different stake-holders of the system. The challenge of the KnowledgeSociety – in opposition to the Ignorance Society - is ina large sense giving a new opportunity to the reinven-tion of society. The Reinvention of Society is the rein-vention of its people and institutions. It ´s theconviction that in fact we have a future as individualsand society.
Francisco Jaime Quesado is the General Manager ofthe Innovation and Knowledge Society in Portugal, apublic agency with the mission of coordinating thepolicies for Information Society and mobilizing itthrough dissemination, qualification and research ac-tivities. It operates within the Ministry of Science,Technology and Higher Education
New Europe content partner
As pressure continues to mount on theHungarian government, financial realitymay be the defining factor that sees con-ciliation on the part of prime minister Vik-tor Orban.
With the introduction of the new con-stitution on 1 January, which sough to re-place the existing 1989 charter thatestablished basic democratic freedoms inthe wake of the collapse of communism ineastern Europe, Orban, and his rulingFidesz party, have faced accusations fromboth within and without the county’s bor-ders of what is routinely being described asa backslide to the cold war.
Following the enactment of the consti-tution, which was celebrated with an elab-orate event by Orban, thousands ofdemonstrators took to the streets of Bu-dapest to protest its terms, characterised asanti-democratic and existing only to putpower into the hands of the governingparty; and it is this notion of an overtlyparty political control over the central bank,judiciary, religious beliefs, the media andfamily and sexual freedoms that hasprompted accusations of a return to thepast.
The concerns, renewed in the light ofthe final coming into being of the consti-tution, are not altogether new. Controver-sial laws governing the media, whichcoincided with Hungary taking over thepresidency of the European Union,prompted a wave of condemnation fromEurope. The laws sought to establish thecreation of a government-influencedmedia council, as well as heavy penalties fornews coverage that was considered “unbal-anced”, which many interpreted as simplybeing critical to the government, and “anaffront to human dignity”. There was alsoconcerns that they could also includedbloggers and social networking sites, suchas Twitter and Facebook. Under pressurefrom the Council of Europe, as well as theEU commissioner for digital agenda,Neelie Kroes, the government agreed toamend the laws to make them more in linewith existing EU legislation.
But the controversy still hasn’t ceased.Two journalists, Balazs Nagy Navarro andAranka Szavuly, who have been on hungerstrike since 10 December, protesting whatthey see as blatant government interferencein the media, were sacked shortly afterChristmas from the state broadcaster,prompting a fresh wave of condemnation.In a new year message, Guy Verhofstadt,former Belgian prime minister and leaderof the Liberals in the European Parlia-ment, said that Orban has “done little tomake Hungary more modern and demo-cratic,” and that “cutting back on mediafreedoms, independence of [the] Consti-
tutional court and Central Bank, freedomof religion and sexual orientation drivesyou closer to [the] communist past.”
As the constitution comes into force, theHungarian government has come underrenewed pressure amend the text. On 20December, the Green group in the Euro-pean Parliament wrote to European Com-mission president, Jose Manuel Barroso,outlining the group’s concerns over the im-minent enactment. Subsequently, on 5 Jan-uary, the group called for the initiation ofan article 7 procedure against Hungary,which establishes a “serious breach” of EUvalues and rules, and provides for sanc-tions, such as a suspension of voting rights.
“The European Parliament has repeat-edly condemned, in very clear terms, theattempts by the government of ViktorOrban to cement his rule with illegitimate,undemocratic methods,” said the letter,signed buy group co-presidents, RebeccaHarms ans Daniel Cohn-Bendit, “How-ever, citizens are beginning to doubt thatthe EU is taking its own principles seri-ously...[we] call upon the European Com-mission, as the Guardian of the Treaties, toinvestigate, impartially but thoroughly, asto whether Hungary is still adhering to thecore values upon which the EuropeanUnion was established. Should the inves-tigation have any doubts on this, we expectthe Commission to act accordingly, in anunequivocal manner, and to do everythingin its power to bring Hungary back on thepath of the Union's basic principles.”
There have been other such calls. In ad-dition to his new year statement, Verhofs-tadt, whose ALDE group has beenamongst the vociferous opposition to boththe media laws and the constitution, hasalso called on the EU institutions to applysome pressure to the Orban govern-ment.”The recent developments in Hun-gary such as undermining of press freedomand the dismissal of journalists are pro-foundly worrying and confirm the strong
concerns we expressed this time last year.The European Commission was right torequest the withdrawal of legal acts under-mining basic principles of freedom anddemocracy, “ he said. “Unless there is a will-ingness to do so, the EU now must takefurther action.”
“It is no longer a matter of exchange ofletters’ between the Commission and theOrban government: the time has nowcome to initiate legal and political sanc-tions by the EU institutions, on the basis ofthe EU treaties, and agreed by the Com-mission, the Council and the EuropeanParliament.” Like the leaders of theGreens, he also said the commissionshould invoke article 7 of the treaties.
Vice president of the parliament’s So-cialist group, Hannes Swoboda, also joinedthose calling for sanctions against Hun-gary. “We stand on the side of the Hun-garian population which has beenincreasingly put under pressure and strainby Orban’s Government. The applicationof Article 7 of the EU Treaty should be se-riously considered if Orban’s Governmentcontinues to defy European law and val-ues,” he said in a statement.
According to spokesperson, OlivierBailly, the commission is currently revisingthe legal situation as to whether or notthere is an infringement of existing EUlaws. If this proves to be the case, “the com-mission will act in order to make sure thatthe Hungarian law is in line with EUtreaties.”
The EU and the International Mone-tary Fund (IMF) have currently suspendedtalks with Hungary, which is heavily in-debted and facing financial crisis. On 4January, the forint fell to a new low againstthe euro, and the government suspended abond auction as its yield rose to over 10%,which has led to media reports that thegovernment may be willing to make cer-tain compromises on the constitution inreturn for possible financial assistance.
ECONOMY
Criticism of Hungarian constitutiongrows as country’s finances shrink
By Cillian Donnelly
By Francisco Jaime Quesado
A man holds a banner with a sinking ship of the governing Fidesz party in front of the Opera in Bu-dapest on 2 January, 2012. Tens of thousands protested against Hungary's new constitution which crit-ics said curbed democracy, while the governing centre-right government celebrated the new law at agala event. |AFP PHOTO / ATTILA KISBENEDEK
ANALYSISNew Europe | Page 9
NEW EUROPEJanuary 8 - 14, 2012
This photograph sums up a lot of 2011. Atableau worthy of a great artist, this fleetingmoment says so much that the photo has avalue beyond a mere record. The focus is onthe American side, with the President nextto the world’s most powerful woman. On theother side, the firures of Presidents Barrosoand Van Rompuy are blurry, out of focusand, oh let’s lay on the metaphor, CathyAshton is out of shot, invisible.This is an official photo and we’re not al-lowed to use it as a caption competition,but the urge is hard to fight back. Whathas just been said? Hillary Clinton is takenaback, the ever gracious Obama is show-ing shock and concern. A man hides in hisdrink. At the rear, two men who have theair of men who have seen it all, controltheir reactions… almost.It shows the difference between pretendand actual power. Look at how Clintonand Obama fought a long, bloody battle infront of the public to compete for the Ovaloffice. Compare that to how the nearsidegot to become presidents.This was, in all truth, a meeting betweenBrobdingnag and Lilliput.And what a Lilliput we have become.
As the raft of New Year’s greetings camefrom European leaders, we could takecomfort in the thought that none of themdid a Howard Beale during the delivery.There was something sadly familiar aboutall the messages, basically saying ‘we’redoomed but we’ll all get through this if youplebs make enough sacrifices’.It was impossible to declare 2011 as anythingbut a disaster and many were brave enough toadmit that this year is going to be worse. Nonetook any responsibility for the economic chaos,
the fudging and dithering that made the cri-sis much deeper and much more expensive.They all asked their populations to make sac-rifices, dig deeper, work for the common good;all attributes missing from the negotiations atthe endless summits.There used to be an advert on televisionseveral decades ago, for an insurance com-pany and the slogan, typifying their pro-fessional seriousness was “We don’t make adrama out of a crisis.” The EU made adrama that could compete with the Wag-
ner’s Ring Cycle.We’ve just got to do better. This is a great opportunity to look at the EU,to see how we can really open it up, how wecan reach out to the citizens, who are toooften regarded as an inconvenience. They arenot. They are an untapped asset, but out ofreach to the institutions with their tired oldcommunication strategies, that hand ourmissives from on high. The EU is obsessedwith communication, but like a geographyteacher at a school disco, they’re on a differ-ent rhythm to the rest of us.More Europe is the cry, but what we needis something different; Better Europe. Thecase for a fundamental redesign of the in-stitutions is obvious and not addressing itwill store up problems for the near future.There may be a test case coming up. GivenDavid Cameron’s poll boost by his veto, itcan’t be long before Ed Milliband an-nounces that an EU membership referen-dum will be in Labour’s election manifestoand the other parties will follow. It is nottoo daring to predict such a referendumwithin six months of the next UK election.I think that vote can be won, but the pro-EU case needs to be made now. What ex-actly is it again?
CONSTRUCTIVE AMBIGUITY
By Andy Carling
Gullible’s Travels
PHOTO CREDIT: The Council of the European Union
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Page 10 | New Europe NEW EUROPE
ANALYSISJanuary 8 - 14, 2012
Janez Potočnik, European Commissionerfor the Environment, handed over thetitle of the European Green Capital, fromHamburg to Vitoria-Gasteiz for 2012, on15 December in a ceremony organised inpartnership with the Committee of theRegions. Vitoria-Gasteiz is the livingresult of over 30 years of commitment tosustainability. With its good practices inrecycling, mobility and waterconsumption, the city has become anexample for Europe.
Vitoria-Gasteiz in Spain takes theEuropean Green Capital crown fromHamburg and Stockholm. Thisprestigious award, established in 2010,recognizes and rewards cities at theforefront of environmentally friendlyurban living. The winners are chosen fortheir successes in addressing complexenvironmental issues, and for theinspirational example they set for othercities. In a Brussels ceremony filled withemotion, State Secretary Holger Langefrom Hamburg and Javier Maroto, themayor of Vitoria-Gasteiz, describedinitiatives and projects that have alreadyproduced significant results.
I am very pleased that the title of GreenCapital 2012 has been awarded toVitoria-Gasteiz. The award is now in itsthird year, and for the first two the titlewas held by large cities in the north ofEurope. This year the award has gone to asmaller city in southern Europe. It is alsoour first inland city, and an importantindication that cities everywhere – largeand small – have many valuable lessonsthey can share when it comes toimproving the environment.
Vitoria-Gasteiz dates back to medievaltimes and has been the capital of theBasque Country since 1980. It is amedium-sized city, although itspopulation has tripled to nearly a quarterof a million since the sixties, thanks to itsindustries and the jobs they create. It wonthe award for a range of achievements,including its smart mobility, its water andenergy efficiency, the way it is tackling airand noise pollution and stimulating agreen economy, raising awareness, itssocially inclusive approach, and itssuccesses in preserving a greenenvironment.
The city is organised in concentriccircles, with the old city at the centre. Thisis surrounded by the "Green Belt", a semi-natural green area some of which has beenreclaimed from degraded areas. The thirdcircle is chiefly forest and mountains. Thecity has a very high proportion of greenpublic areas, so the entire population liveswithin 300m of an open green space. A
conscious effort to protect the biodiversityof the area means that many fragileecosystems have been preserved. As aresult, Vitoria-Gasteiz has a rich selectionof flora and fauna. Four municipal areasare part of the Natura 2000 network,including the Zadorra River and theSalburua Wetlands.
The Green Capitals title isn't the firstaward won by Vitoria-Gasteiz, which canboast several other international awardsfor its urban development. Since 65 % ofits CO2 emissions come from transportand factories, the city has put in place acoherent set of long-term policies andactions involving all the local politicalparties. It has signed the Covenant of
Mayors, committing the city to go beyonda 20 % reduction of its greenhouse gasesemissions by 2020. A wide range ofrenewable energies are produced locally:biogas, photovoltaic solar power, solarthermal energy, geothermal energy andwind energy.
Actions to improve transport includeswitching from cars to public transportand non-motorised transport. Thepromotion of a new bus network, togetherwith tram routes and new parkingregulations has led to a 44 % increase inthe number of journeys made by publictransport. There has been an active policyto encourage eco-friendly transport bydesignating pedestrian areas and creating
a network of cycle lanes. Special attentionhas been paid to land-use planning and toimproving energy efficiency in new andexisting constructions (including bio-climatic buildings, energy certificationand domotics), enabling the city to absorbthe growth in its activities and aburgeoning population. Theconcentration of the built-up areas meansthat half of trips are made by foot, withcars responsible for only 37 % of journeys.
Vitoria-Gasteiz also has an ambitiousobjective to reduce domestic waterconsumption to below 100 litres perperson per day.
Water consumption has fallen steadilyfor a decade, thanks in part to an Agenda21 environmental action plan thatimproved water quality and supply,reducing losses and promoting sustainableconsumption. The Plan also includedmeasures to improve waste watertreatment and to protect the overallecological quality of water.
The city is also working to cut waste,and in 2000 it passed a new IntegratedWaste Management Plan based on the"five Rs" of the European waste hierarchy:reduce waste, reuse, recycle, rejectunrecyclable products – and responsibilityfor those who generate waste. It is alsotrying to prevent waste generation atsource, promoting the selective collectionof different waste streams andencouraging public participation in wastemanagement.
But perhaps the most striking thingabout Vitoria-Gasteiz is the extent towhich the whole city is committed tosustainable living. Walking around, onesenses the cohesion.
This is not just an example of anenlightened municipal authority but of awhole community that works together –industry, businesses, local associations,schools and ordinary citizens. This awardgoes to all of them. With its motto "Weare green!" Vitoria-Gasteiz will serve asan inspiration for other cities throughoutEurope. Visit in 2012, if you can.
Karl Falkenberg is Director-General forthe Environment, European Commission(www.europeangreencapital/index_en.htm)
Janez Potocnik, EU Commissioner for the Environment (L) and Javier Maroto, the mayor of Vitoria Gasteiz, shak-ing hands over the Green Book, symbol of the European green Capital title.
State Secretary, Holger Lange from Hamburg (on the left the Green Book symbol) and Javier Maroto, the mayorof Vitoria-Gasteizof (on the right of the Green Book symbol).
ENVIRONMENT
Congratulations to Vitoria-Gasteiz,European Green Capital 2012!
By Karl Falkenberg
What is the deeper sense and meaning ofan economy? Certainly not to make thepeople living in it poorer, but richer. An eco-nomic order that results in a lower standardof living for the vast majority while leavingexisting economic capacity unused and de-prive millions of people of participating in aproductive work, as well as public life, ac-cording to their abilities and qualificationsthus contributing to economic and socialwealth, such an economic system has com-pletely failed big time. And, an economicmodel that destroys the natural habitats aswell as human existence like a bulldozer hasno legitimacy, but is rather a danger to lifeon Earth.
There are no objective reasons for a con-stantly declining standard of living. Socalled “globalisation” opens new productioncapacities in emerging- and developingcountries and there is absolutely no reasonfor this going hand in hand with the loss ofjobs and subsequently impoverishment ofmillions in industrialised nations. Globali-sation is not a process that is happening tous like a Deus ex Machina and it is anythingbut a natural development that we wouldhave to adjust to, it is rather the other wayaround: we have to make it be useful to ushuman beings and our long term goals.
Globalisation under the auspices of majorcorporations and financial institutions does-n’t play along the lines of humankind’s longterm goals as the living conditions of thevast majority of people on this planet areworsening day by day.
An increased life-expectancy in industri-alised nations is also not the reason for in-creasing poverty as productivity rises muchquicker than the share of seniors in the pop-ulation. Even the ecological that requiresdifferent technologies and new, renewable,resource management, doesn’t lower thestandard of living at all but forces us tochange our production patterns, away fromshort term useable products that waste re-sources for a quick turnover and huge prof-itability towards a sustainable production oflong lasting quality products.
Up to now, the necessary ecologicalchange has not been pursued radicallyenough so it can hardly be seen as the rea-son for the decline of standard of living.
So what is it that deprives us of increasedwealth if it is not modern technologies, theinternationalisation of production structuresor the natural givens and demographic de-velopments? It is the way how our presenteconomic system is organising the produc-tion of goods and provision of services, thecriteria that govern economic decisions andgoals to which these are subordinated.
Whoever still maintains what the Ger-man initiative for a new social market econ-omy (a kind of right-wing think-tank)upholds as their ultima ratio, namely that
“private ownership and private economic,competition-driven, entrepreneurial activitymost favourably warrant an efficient use ofresources and the adjustment to a changingenvironment” is either blind or a lobbyist.
For a longer historic period there hadbeen reasons for believing in this dogmaand for a few tiny areas of our economy itmay still be valid, but it is less true the big-ger a company is.
In Germany, officially, the definition forSMEs (kleine und mittlere Unternehmen‚KMU’) cover companies of up to 250 em-ployees and/or a total turnover of 50 mil-lion Euros. These are 99.7% of all 3 millionGerman companies. Of all German em-ployees 65.8% are working in a KMU /SME which account for only a third of thetotal turnover by German companies.
These companies usually face tough com-petition in an open market. Not so the8,500 major corporations in Germany whoaccount for two thirds of all turnover. The8,500 German majors are mainly owned bythe same structures leaving some 3,500 re-ally independent major corporations. Athird of the 3,500 corporations are ownedby family clans of which the top 100 are theactual power structure in Germany.
Absurd priorities set forth by managers ofstock market listed companies make themaximisation of profitability the highestcriteria for economic decisions and not thequality of the product or service. That’s whyprecarious work replaces qualified labourleading to immense pressure on the work-force and wage dumping while social stan-dards are axed by the political leadership.Lay-offs and redundancies create a climatein companies as well as the entire societythat let’s the motivation of the workforce
shrink at the same pace rate that it’s pro-ductivity and efficiency declines.
Exorbitant bonus payments and divi-dends draw liquidity from the companies’substance and minimise the required fundsfor investment, innovation, developmentand research.
Free market and competition no longerdiscipline major corporations because thepower of a few global players is too over-whelming. This power allows the unsanc-tioned pursuing of the anti-productivestrategy by imposing pressure on SMEswho produce the intermediate capitalgoods.
On those markets selfishness and profitmaximisation are not, as Adam Smith hadhoped for, be guided by an invisible handleading the economy to be beneficial to allof society.
For the conservative management theo-rist Fredmund Malik, the underlying reasonand “use of a company is to create by itsmarket performance satisfied customers”
In sharp contrast to the prevailing share-holder-value, the philosophy of our presenttimes, Mr Malik is convinced that “profit ashighest goal” destroys the profitability of acompany and inevitably leads it into bank-ruptcy , because the real reasons for goodperformances of companies are “innovation,marketing and productivity” by which oneshould be guided long before any profit oreven gain could be envisioned. FredmundMalik expressly writes that “profit shallnever be the highest aim for managementdecisions” as profit has to be understood asthe measurement of how good an enterprisefulfils it’s task while it is clear that profitmay only be seen as such an indicator in atruly free market based on a functioning real
competition. For Fredmund Malik the most important
question is not the one for profit-maximumbut for profit-minimum: “what minimumof profit requires a company to be in busi-ness also tomorrow?”
“Real entrepreneurs”, Fredmund Maliksays, “maximise the value-added producingcapacity of the enterprise by the best-per-forming product and service for customerand maximise their market position and nottheir growth. They maximise the use for thecustomer and not the dividends. They max-imise the innovation and not the share-holder value.”
But, it is the owner of a company, theshareholder, who determines under whichcriteria the enterprise is being managed.Therefore, the most important questionnowadays has to be whether the presentownership structures benefit the economyunder Malik’s criteria or do they make itimpossible and by this let our system be-come anti-economical?
The fact that a few major corporationscontrol most of the economic output of thisplanet while economic capacities are de-stroyed proves that there is no free marketbut only dreadful concentration
Thanks to these major’s ability to manip-ulate the most important variables of eco-nomic life such as investment decisions andlabour conditions, the global players holdthe public hostage and dictate national pol-itics and not vice-versa, resulting in themacroeconomic disastrous developmentsthat we are currently living through for thefifth time in 400 years.
Ralph T. Niemeyer is the Editor-in-Chiefof EUchronicle ([email protected])
EU WORLDNew Europe | Page 11NEW EUROPE
January 8 - 14, 2012
Robert Halver (R), financial expert of the Baader-Bank stands in front of the German share index (DAX).|EPA/FRANK RUMPENHORST
ECONOMY
The free-market – mythCompetition in a free market only exists for SMEs, not for major corporations
By Ralph T. Niemeyer
Russian gas monopoly Gazpromalong with French oil and gas majorTotal and Norwegian Statoil -- theshareholders in Shtokman Develop-ment AG (SDAG) -- delayed a de-cision on whether to invest in theShtokman natural-gas project offRussian Arctic shores until the endof March. The Shtokman field is lo-cated 600 kilometres northeast ofMurmansk in waters up to 340 me-ters deep.
“Following discussion of the cur-rent situation the shareholders de-cided to postpone the Finalinvestment decision until the endof March 2012. This timetableto take FID is necessary given theimportance and size of the Shtok-man project,” SDAG said in a pressrelease.
Gazprom has a 51% stake inSDAG, Total has 25% and Statoil –24%.
“Shtokman is a strategic Projectfor all of the partners,” saidGazprom CEO Alexei Miller, whois president of the SDAG boardof directors. “In this context theFID must be well prepared takinginto account scale and complexityof the Project. The shareholdersand SDAG are determined to con-tinue their good and close co-oper-ation,” he said.
Total is seeking exemptions from
Russian gas taxes with the support ofFrench Prime Minister Francois Fil-lon. Russia raised the mineral extrac-tion tax for gas producers by 61% thisyear and plans to more than doublethe rate next year. The Russian Fi-nance Ministry has agreed to con-sider tax holidays for the gas fieldwhen the partners submit a develop-ment plan.
The Shtokman field is one of thelast unexploited natural gas fields in
the world, estimated to hold 3.8 tril-lion cubic metres of gas. But the proj-ect will be a technological challengeto develop, experts say. Under currentplans, the gas is to be extracted by avessel anchored at sea and thenpumped 550 km to shore for pro-cessing and liquefaction. By contrast,Yamal LNG, a rival project led by in-dependent producer Novatek inpartnership with Total, will be fed bygas from onshore fields.
ATHENS - Debt-stricken Greece, whichcurrently has the least exploration for hy-drocarbons in the region, is vowing to ex-ploit its oil and gas reserves.
On 2 January, the Ministry of Environ-ment, Energy and Climate Change(YPEKA) invited investors through anOpen Door process to bid to exploit hydro-carbon reserves in three blocks estimated tohold around 250 million barrels of oil. Thefirst two blocks, Patraikos Gulf andKatakolo, are located off the western coast,and the third block - Ioannina – is in thenorthwest of the mainland. Investors mustsubmit offers by 2 July.
The bidding contest is part of Greece’sstrategy to reduce energy dependence andboost security of energy supply through thedynamic development of domestic energysources, George Papaconstantinou, Greece'sminister for the environment, energy and cli-mate change, said in an emailed statement.Already planning to develop renewablesources of energy, the Greek government’s ef-forts to exploit the country’s hydrocarbon re-serves are an integral part of this strategy.“Today’s invitation to investors is an impor-tant step in this direction,” he said.
Deputy Minister Yiannis Maniatis saidthat Greece has begun the first round of in-vitations for the three blocks as previouslyannounced: “In conjunction with theprogress of bidding contest for seismic ex-ploration in the Ionian Sea and south ofCrete, as well as the creation of the GreekHydrocarbons Exploration Company thatwas legally established last August, we havemanaged in four months to cover a fifteen-year period of inertia. We are confident thatthe current invitation will draw interestfrom serious companies in the internationaloil market. With transparency, speed andefficiency and respect to the environment,we plan to develop all of Greece’s re-sources.”
On 3 January, the deputy minister briefedGreek Prime Minister Lucas Papadimosabout the latest developments, saying that
Athens aims to have the first oil drill on itsterritory by the end of 2012.
The area south of Crete is expected to holdprimarily gas reserves. US firm Noble En-ergy’s recent offshore discovery of major gasreserves in Cyprus is boosting Greece’s hopesthat there may be “satisfactory” reserves inGreece as well. “All these discoveries and es-pecially the latest one south of Cyprus in-crease optimism that also in Greece – becausethere is a geological connection to a certainextent – there will be discovered satisfactoryamounts of primarily natural gas but also oil,”a source at the Ministry of Environment, En-ergy and Climate Change told New Europeon 3 January.
“After we complete seismic exploration inthe Ionian and south of Crete, it is esti-mated that we can offer 10-15 blocks in thefirst round.”
Fadel Gheit, a senior energy analyst atOppenheimer in New York, told New Eu-
rope on 3 January that oil and gas majorsmay become interested in hydrocarbon ex-ploration and extraction offshore Greece.He noted that natural gas discoveries in theEastern Mediterranean, that is Cyprus andIsrael, “will be a tremendous boost obviouslyfor Europe”.
“There aren’t too many large companiesinvolved, but I think this area is going to getvery busy in the next six months or so as thebigger companies take note. Noble Energyis a very small company and Noble Energyis seeking partners. But because it’s the onlycompany that does business in Israel thathas no other interest in the Middle Eastthat is easy on them,” Gheit said. “ButExxonMobil cannot get there because it hasobviously stronger ties with the MiddleEast, with the Arab countries, and they donot want to take the risk of doing businessin Israel because they would be on the blacklist of the Arab world. But if there is actu-
ally oil offshore Greece or Italy you aregoing to see the big guns coming in –Exxon, Shell, BP, ENI, Total, Statoil – allthese companies because obviously it’smuch easier for them; it’s lower risk politi-cally and financially so it makes a lot ofsense. So it’s really good for everybody.”
Regarding the areas of Patraikos Gulf,Katakolo and Ioannina, the ministry sourcesaid that 15 years ago some companies hadcome to these areas but due to the low priceof oil and other reasons their efforts did notmaterialise. “Now with the price of oil above$100 and the overall mobility, it seems thatthere is interest. Already in preliminarytalks it appears that there are companiesready to submit their bids under the settimeframe,” the ministry source said.
However, Gheit added: "250 million bar-rels of oil is very small. In Greece they drinkmore coffee than they consume oil so I don’tthink that is a big amount of oil”.
Energy & ClimatePage 12 |New Europe NEW EUROPEJanuary 8 - 14, 2012
Noble Energy’s Homer Ferrington platform , where exploration drilling for hydrocarbons is taking place. Noble Energy’s recent offshore discovery of major gas re-serves in Israel and Cyprus is boosting Greece’s hopes that there may be “satisfactory” reserves in Greece as well. |AFP PHOTO/PIO/CHRISTOS AVRAAMIDES
ENERGY|GAS
Gazprom, Total, Statoil postpone investment decision until March
ENERGY|OIL & GAS
Greece speeds up exploration for oil and gas By Kostis Geropoulos
ENERGY & CLIMATENew Europe|Page 13NEW EUROPE
January 8 - 14, 2012
On 4 January, Uzbekistan cut supplies ofnatural gas to Tajikistan, RIA Novostiquoted Tajik Foreign Ministryspokesman Davlat Nazriev as saying.“TajikTransGaz applied to Uztransgazto sign an agreement on supplying nat-ural gas in 2012, but the Uzbek partypostponed the signing of the contract,”Nazriev said.
Nazreiv added that on 22 Decem-ber, Tajik Deputy Prime MinisterMurodali Alimardon sent an officialletter on signing the agreement toUzbek First Deputy Prime MinisterRusatm Azimov.
In his reply, Azimov wrote that theissue of supplying Uzbek natural gas hadnot been resolved with the main buyers,
i.e. China and Russia, so “the signing ofthe agreement between Uzbekistan andTajikistan does not seem possible.”“Today the Uzbek ambassador inDushanbe received a letter from TajikPresident Emomali Rakhmon to IsalmKarimov,” said Nazriev. In November,Uzbek company Uztransgaz raised theprice of natural gas for Dushanbe.
ENERGY|GAS
Uzbekistan cuts gas supply to Tajikistan
On 2 January, energy trade research group EurObserv'ER saidin its Barometer report released in Paris that Europe modestlygrew the share of renewables in its total energy consumptionto 12.4% n 2010. The increase for renewables in the energymix amounted to a 0.9-point year-on-year increase comparedto 2009.
Its numbers also showed Europe consumed 145 million tonsof oil equivalent in renewable energy compared to 131.6 Mtoein 2009 -- a 10% increase, which handily beat 2009's jump of2.1% over 2008 levels.
Some 19.8% of Europe's electricity consumption was sup-plied by green energy sources in 2010, up from 18.2% in pre-vious year.
But while encouraging, Europe needs to maintain the mo-mentum to reach the EU's targets for levels of renewable en-ergy consumption, the report's authors warned. They notedEurope needs to boost its green energy consumption by 10Mtoe in each of the next nine years to do so. "EU membersshould produce an extra 100 Mtoe of final energy from re-newable sources to achieve the 2020 legally binding target of20% of renewable energies in the EU-27 final energy grossconsumption," EurObserv'ER said.
Sweden tops the list of renewable energy share of gross finalenergy consumption with 46.9%, followed by Latvia (34.3%)and Finland (33.6%). The United Kingdom (3.3%), Luxem-bourg (2.6%) and Malta (0.3%) occupy the last three spots.
ENERGY|RENEWABLES
EU modestly grows energy share of renewables
A Mexican standoff betweenIran and the West
A planned EU oil embargo and other efforts to halt
Iran's nuclear programme, including US sanctions
signed into law New Year's Eve by President Barack
Obama, may be prompting Tehran to reconsider its
threats to shut the Strait of Hormuz. Iranian Foreign
Minister Ali Akbar Salehi said Tehran would like to re-
open talks with the West on its nuclear programme,
suggesting the talks could be held in Turkey. “I think
the sanctions are working because the Iranian regime is
squirming,” Fadel Gheit, a senior energy analyst at Op-
penheimer in New York, told New Europe. “The Irani-
ans are making all these big threats on supply and the
Strait of Hormuz. The fact of the matter is closing the
Strait of Hormuz could really undermine the regime in
Iran because they would be basically declaring war at
the world,” he said.
Strangling Middle East oil supplies will definitely be a
big blow to the global economy and jack up oil prices
significantly. “Just forget about all the empty threats. If
an oil tanker is attacked, if an oil tanker is hit or sunk,
then we are talking about very high probability of mili-
tary response of huge magnitude. I hope the Iranians
don’t reach a point of no return and they just cool down
a bit before it gets out of control,” Gheit said. “I think
they are crazy but not that crazy to shoot themselves in
the foot.” Obama is getting a lot of pressure from both
Democrats and Republicans. “It’s a presidential election
year in the US so in order for him to respond to criti-
cism and the threats of the Iranians he might take mili-
tary action and the Iranians are going to be pretty sorry
if that goes through,” Gheit said.
But what about an EU embargo on Iranian crude oil im-
ports? Gheit said the next step is going to be tightening
the financial handling of oil revenue. Some EU member
states, including Greece, are pushing for a delay in order
to shield their economies. A European Commission
spokesman told New Europe the Commission is look-
ing at where alternative supplies could come from. “Since
no decision has formally yet been made and no decision
as to when such a decision would be fully applicable, no
definite reorganisation of crude oil supplies has yet been
made. On oil shocks, the Community has its 90 day oil
stocks regulation (covering crude and products) and li-
aises very closely with the IEA (International Energy
Agency) in Paris for emergency situations," the
spokesman said. European countries bought about 18%
of Iranian oil in 2010, about 450,000 barrels a day, with
most of the rest of Iran's 2.6 million daily barrels going
to Asia, mostly China and Japan.
Oil represents about 60% of Iran's economy and oil ex-
ports are an important source of foreign currency. “The
world can live without Iranian oil for a lot longer than
Iran can live without oil-export revenues,” Gheit said. It
is a question of who can hold off longer in this Mexican
standoff. “The world can survive a total embargo on
Iranian oil but Iran cannot survive an embargo even sixty
days.”
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ENERGY INSIDER
On 3 January, Nuclear Safety Authority(ASN) as part of an inspection ofFrance's nuclear industry in the light ofthe 11 March nuclear catastrophe inFukushima, called for France’s nuclearplants to increase safety. But no reactorfaced any immediate shutdown, it said.
The recommended measures, whichwere handed to Prime Minister FrancoisFillon, will require "tens of billions ofeuros in investment," ASN PresidentAndre-Claude Lacoste told reporters.
"The ASN believes that the installa-tions that have been assessed have a suf-
ficient level of safety to warrant it not torequest any immediate shutdown," theagency said. "At the same time, the ASNbelieves that continuing operations re-quire existing safety margins to bestrengthened as swiftly as possible."
It gave operators until 30 June to spellout measures to strengthen safety in re-sponse to floods and earthquakes, pro-viding for instance backup systems forpower, coolant and plant operations, andtheir procedures for handling an emer-gency.
French nuclear power operator Elec-
tricite de France (EDF) will need to in-stall flood-proof diesel generators andbunkered remote back-up control roomsat its 19 plants across the country or elseface having to shut down some of its 58reactors, the ASN added. EDF will alsohave to set up, before the end of 2012, anemergency nuclear task force to inter-vene on the site of an accident within lessthan 24 hours.
Recommendations by France's nu-clear watchdog agency to beef up safetyat plants will cost EDF up to €10 billion,an EDF senior executive said recently.
NUCLEAR
ASN urges French nuclearplants to increase safety
A member of the nuclear plants special security squadron patrols at the Avoine nuclear plant, France, 6 January 2012. |AFP PHOTO/ALAIN JOCARD
By Kostis Geropoulos
EU WORLDPage 14 | New Europe
NEW EUROPEJanuary 8 - 14, 2012
Competition in the so-called SouthernGas Corridor from the Caspian Sea basinto Europe is heating up. In December,Turkey and Azerbaijan signed an agree-ment to build a pipeline to carry naturalgas to Europe from the Caspian region.The Trans-Anatolia pipeline (TAGP) willhave a capacity of 16 billion cubic metresa year and cross 2,000 kilometres. Thefirst delivery of gas is planned for 2017.Turkish Energy Minister Taner Yildizand Azerbaijan's Energy Minister NatikAliev inked the deal for the Trans-Anato-lia pipeline’s construction. The agreementalso established that Azeri state oil com-pany SOCAR will build the pipeline withTurkish Pipeline Corporation (BOTAS)and TPAO.
“But TAGP is not very well defined yet.It seems firstly the BOTAS gas transmis-sion system will be used; later anothertransmission pipeline may be built next toit,” Gokhan Yardim, general manager ofAngoragaz Import Export Wholesale Inc.in Ankara, told New Europe on 5 January.“I have doubt about how capacity reserva-tion for local existing system will be donefor local shippers. Will Azerbaijan have apriority, then what about non-discrimina-tory principals written in Turkish MarketLaw 4646? Whether the legal issueswould be solved in the same pipeline bythe Turkish legal system or by interna-tional arbitration has to be clarified. But ifTAGP is a separate pipeline then every-thing will be very easy,” Yardim added.
The pipeline may be linked withNabucco, the OMV-led project designedto bring Caspian gas to Europe, Yildiz hassaid.
The deal comes as Azerbaijan and part-ners at the BP-led consortium developingthe Shah Deniz field in the Caspian Seaexamine pipeline projects included in theSouthern Gas Corridor, includingNabucco. Other projects competing forgas from the Shah Deniz II project are theTrans-Adriatic Pipeline (TAP) and theInterconnector Turkey-Greece-Italy(ITGI). BP and its partners have delayedselecting a pipeline for its gas exports. TheShah Deniz partners include Norway’sStatoil, France’s Total, Russia’s LUKoil,National Iranian Oil Co. and TurkiyePetrolleri, as well as BP and SOCAR.
Meanwhile, Russian gas monopolyGazprom, the world’s biggest gas pro-ducer, plans to build South Stream, a gaspipeline competing against Nabucco thatmay transport as much as 63 billion cubicmetres of gas under the Black Sea tosouthern and central Europe.
In December, Turkey gave its formalpermission to build South Streamthrough its Exclusive Economic Zone.
The heads of Gazprom and BOTASsigned the deal in Moscow. The agree-ment - witnessed by Yildiz, RussianPrime Minister Vladimir Putin andDeputy Prime Minister Igor Secin - hadbeen a stumbling point for Moscow toproceed with the offshore part of theSouth Stream project. Putin described theagreement as "a New Year's gift for Rus-sia". "I would like to thank the govern-ment of the Turkish Republic for itsdecision to permit construction of theSouth Stream pipeline in Turkey's eco-nomic zone," he said.
Yardim told New Europe that Nabuccois in trouble. “The plan was to get gas notonly from Azerbaijan but also from Iraqand Egypt. It may also get gas from Iranif the climate between Iran and westernworld improves. That is why it has aplanned capacity of 31bn cubic metres.But now only 10bn cubic metres are goingto be transported through Turkey and itwill be dedicated only for Azeri gas. So wecan say that Nabucco will be delayed atleast 10 or more years so South Streamwill be built at that time and there will beno need for Nabucco,” Yardim said.
South Stream spokesman SebastianSass told New Europe late December thatTurkey’s permission to build SouthStream through its economic zone opensup the way for the pipeline to deliver itsfirst gas on schedule. “2015 is still the dateand having this resolved now with Turkeyconfirms for us that we are on track to de-liver at goal,” Sass said. “This is basicallythe most solid invitation that South
Stream will be constructed and put intooperation on schedule to deliver first gasin 2015 so this is for us the most impor-tant milestone or one of the most impor-tant milestones so far on our way to thefirst gas delivery 2015,” Sass said.
Russia aims to allay energy securityconcerns through its Nord Stream gaspipeline through the Baltic Sea and theplanned South Stream project for south-ern Europe.
Gazprom said recently that it is com-mitted to move forward with plans forSouth Stream regardless of the status ofnegotiations with Ukraine. "Even if wetake into account the Nord Stream, theSouth Stream, the Nabucco and liquefiednatural gas, all the same, the shortage ofgas supplies to Europe will be some 15-10 billion cubic metres," said AlexanderMedvedev, head of exports for Gazprom.
Kiev is pressing Moscow for a betterdeal for natural gas. Ukraine pays around$400 per 1,000 cubic metres of gas fromRussia. Ukraine's Prime Minister MykolaAzarov has threatened that his govern-ment may take Gazprom to court ifMoscow doesn't agree to a lower price atthe talks.
Gazprom has suggested construction onSouth Stream depended on the status ofnegotiations with Ukraine. But it also saidit might be cheaper to build anotherpipeline like South Stream than it wouldup upgrade the Soviet-era pipeline net-work through Ukraine. Gazprom Chair-man Alexey Miller reported to Putin thatUkrainian partners estimate that the
Ukrainian gas transmission system willcost $20 billion. In addition, the GTS up-grade, according to various estimates, willrequire another €2–3 to €7–8 billion.Moreover, the Ukrainian party insistson the Russian gas price discount, whichwill cost Gazprom some $9 billion a year.While the South Stream project is esti-mated to cost €16.5 billion, €10 billionout of this amount will be spent on theoffshore section and €6.5 billion – the on-shore section.
Putin ordered to continue negotiationswith Ukrainian partners, “on the assump-tion that Ukraine has always been,it is and, I hope, will remain a strategicpartner of ours”, yet to speed up the SouthStream project so that construction wouldstart by the end of 2012 instead of in 2013as previously planned.
Asked by New Europe if South Streamis considering going through Ukraine, thepipeline’s spokesman Sass said: “No, weare not! And we have partners from West-ern Europe who own 50% in the offshoresection and who, for good reason, are in-vesting specifically into this route andwhich we believe is viable as such consid-ering the need for more reliable importsfrom Russia and for more routes fromRussia and for additional gas in the fu-ture.” “We believe that this is a worth-while investment. It includes companiesfrom almost one-fourth of EU-Memberstates so there are a large number of com-panies who support this investment andtherefore we believe it will take place inany case,” Sass said.
EU-RUSSIA|ENERGY
Trans-Anatolia, Nabucco, South Streampipelines bet on Turkey
Russia's Prime Minister Vladimir Putin, left, speaks with his Deputy Igor Sechin during their meeting in Putin's Novo-Ogaryovo residence outside Moscow, on 30December 2011. Following the agreement between Russia and Turkey two days earlier, Putin ordered to speed up the South Stream project so that constructionwould start by the end of 2012 instead of in 2013 as previously planned. |AFP PHOTO/RIA-NOVOSTI/YANA LAPIKOVA
By Kostis Geropoulos
ARTS & CULTURENew Europe | Page 15
NEW EUROPEJanuary 8 - 14, 2012
Pursuing a career as a high-level professional classicalmusician is definitely an ob-stacle course. At 24, Geor-
gian-born Khatia Buniatishvili hasaccumulated enough successes togranther admission into the closed circle ofinternational concert pianists. Afterstarting the piano under the instruc-tion of her mother at age 3, Khatia at-tended the Tbilisi Central Music School,before entering the Tbilisi State Con-servatory. At the 2003 Piano Compe-tition in Tbilisi, she met OlegMaisenberg who advised her to trans-fer to Vienna’s Academy for Music andthe Performing Arts. She later wonawards at prestigious competitions likethe Arthur Rubinstein InternationalPiano Competition (2008), collaboratedwith BBC orchestras as a BBC NewGeneration Artist (2009), participatedat high profile music festivals like Ver-
bier and appeared with some of theworld’s most distinguished orchestras.The whole was crowned by the recentsigning of an exclusive worldwide con-tract with Sony Classical, which re-leased her first album entirelydedicated to Franz Liszt (1811-1886),her favorite composer.
Incidentally, 2011 was marked bythe celebration of the 200th anniversaryof the birth of the Hungarian-borngenius pianist and composer.
We met charming Khatia Buni-atishvili during her short stay inGreece, after performing Lizst’s Sonatain B minor and Mephisto Waltz No.1,Chopin Scherzos 1,2 & 3 and 3 parts ofStravinsky’s piano version of Petrushkaat the Athens Concert Hall.
L.K: What does the life of a youngconcert pianist ‘sound’ like?
K.B:Well, at the moment I perform
about 90-100 recitals a year. The pianois an instrument that is ‘self-sufficient’,which means that I mostly play solorecitals. Being a concert pianist ismainly about constant traveling, seeingdifferent halls, hotels, airports, and in away leading a solitary life. Fortunately, Imeet many people, essentially fellowmusicians and conductors, when I per-form with orchestras around the worldand have the opportunity to share mo-ments with others through music.
L.K: Your album refers to the Faus-tian myth, an old German legend thathas inspired literature, poetry, operaand music for over four centuries! It’sa dark, romantic theme par excellence!Berlioz, Gounod, Boito, Spohr andBusoni, all contemporaries or stu-dents of Liszt but even Stravinsky orProkofiev, his Russian ‘heirs’ of the fol-lowing generation, created their ownversion of Faust. What does the Faus-tian myth symbolize for you?
K.B: Actually, the First MephistoWaltz was based on a Faustian poem,which was originally written in Ger-man by the Hungarian writer NikolausLenau in 1836. Liszt was a true inno-vator and one of the first to believe thatmusic and the use of bold soundscould describe moods, plots and ab-stract ideas as well as words or imagescould. As an unequalled master oftechnique, his experimentations led tothe discovery and use of new ‘dramatic’sound effects, completely revolution-izing the musical perception of whatwas harmonious/disharmonious aswell as pushing the limits of what wasphysically possible at the keyboard.The Mephisto Waltz musically ex-presses lust, seduction, madness, sus-
pense, greed, excess and excitement.Mephisto’s devilish satisfaction con-trasts the delicate voice of poor littleMarguerite, the fresh and innocentvoice of love, and the desperate, search-ing voice of Faust. All three charactersare intertwined in a single piece andmay reflect the complex, doubting na-ture of the artist.
L.K: Your technique is amazing !Any thoughts on composing?
K.B: Thank you! My first finished‘composition’ was inspired by a Geor-gian folk rhythm and I played it lastnight as an Encore! I was reallytouched because there were manycompatriots in the audience who rec-ognized the tune and brought me
flowers at the end of the recital. Besidesthat, I recently got a proposal to com-pose a soundtrack for a documentaryfilm…I might try because I’m alwaysexcited about new projects.
L.K: Apart from music, do youhave time for other activities?
K.B: Yes! Reading has always beenmy second passion– if I were to namemy favourite authors, I’d certainlymention Dostoyevsky and ThomasMann as well as Georgian writerGrigol Robakidze, of course. I am alsovery attracted to video art, as I came upwith the idea of a promotional videofor my CD, which was filmed inHamburg. Louise Kissa
Louise Kissa with Khatia Buniatishvili, December 2011photo: Basilhs Zampikos
Khatia Buniatishviliphoto: Esther Haase
© Sony Music
Portrait of Franz Liszt
Franz Hanfstaengl, 1858'Mephistopheles flying over Wittenberg'
Litograph by Eugène Delacroix, 1828
'Goethe's Faust'
Richard Roland Holst, 1918
Faustian DreamerEXCLUSIVE INTERVIEW: KHATIA BUNIATISHVILI
BRUSSELS AGENDA Page 16 | New Europe | NEW EUROPEJanuary 8 - 14, 2012
BRUSSELS AGENDA New Europe | Page 17
NEW EUROPEJanuary 8 - 14, 2012Welcome to NE’s Brussels Agenda. All you
need to know for a complete professionaland personal life in Brussels.
Would you like to advertise in New Europe’s BrusselsAgenda? Ask for more info [email protected] ordon’t hesitate to call us at +32(0)2 5390039
In an elegant and pleasant environment, George Tsigkalidis invites you on a journey to discover the gastronomic pleasures of Greece.
Th is year, L’Ouzerie also opens its doors during lunchtime, and invites you to experience the fi reworks of fl avour.
Ouzerie Mezedopolio235 chaussée d’Ixelles à 1050 Bruxelles T: +32(0)2 646 44 49 M: +32(0)476 28 35 47
Email: [email protected]/ouzerie
Open for lunch: Monday-Friday 12:00 to 14:30 dinner: Monday-Saturday 19:00 to 23:30
An initiative of the Foundation for the Arts, Brussels
LAST MINUTE TICKETS FOR SHOWS & CONCERTS AT -50%
Avec le soutien de LA COMMISSION COMMUNAUTAIRE FRANÇAISE
Tickets for half price for performances and concerts on the same day. Arsène 50 offers you every day a wide range of performances, advises you in your choices and takes care of your reservation.
www.arsene50.be
Ticket sale: - At BIP, 2-4 rue Royale (Place Royale) 1000 BruxellesTuesday to Saturday, from 12.30 pm to 5.30 pm- Online on www.arsene50.beTuesday to Saturday, from 2 pm to 5.30 pm
RESTO BITES
3 Jan-28 FebruaryCinematek, 3 Rue Ravenstein
“I have ten commandments. The first nine are, thou shalt notbore. The tenth is, thou shalt have right of final cut.” Billy Wilder Billy Wilder, whose death ten years ago this excellentCinematek tribute marks, was simply among the finest direc-tors ever to have emerged from and subverted the Hollywoodstudio system.With 39 films spanning Wilder’s work as both director andscreenplay writer, Brussels audiences will have the chance torediscover classics in their new-print, big-screen glory.There are almost too many to name, but let’s have a go – as
director, Wilder gave us Ace in the Hole (1951), with itsscathing satire on media morality, Sunset Boulevard (1950),about growing old tragically in Hollywood, The Seven YearItch (1955), that skirt, those legs, Witness for the Prosecution(1957), one of the finest courtroom dramas, period and, ofcourse, Some Like it Hot (1959), no description needed.With only a couple of exceptions (he never really touched sci-fi or horror, for example, apart from certain sequences in Fedora(1978)), the Austrian-born Wilder proved himself as a masteracross the full range of genres, from social drama, hilariouscomedy and markedly different perspectives on establishedclassics, such as The Private Life of Sherlock Holmes (1970).All of the above, and many more, await your delectation atCinematek – seriously, what are you waiting for? “An audience is never wrong. An individual member of it maybe an imbecile, but a thousand imbeciles together in the dark -that is critical genius.” www.cinematek.be
20 Jan, 20:00, Ancienne Belgique
The UK music scene in 1978, when the
Bunnymen are first formed (Echo being
their then drum machine), was different
in each city. London went behind punk,
which back then was also a Manchester
led revolution, but the Manc lads discov-
ered Joy Division, the sound on industrial
decline.
Things were different in Liverpool,
where the tight and fractious local scene
moved in differing directions, but the
Bunnymen came to be seen as the sound
of modern Liverpool.
They have regrouped, without their
original drummer, Pete de Frietas, who
died in a motorbike accident in 1989, to
perform their first two albums, Crocodiles
and Heaven Up Here in their entirety.
Crocodiles was released in 1980, minus
two tracks that the head of Warner Bros
thought contained naughty words. The
cover was judged by the lead singer, Ian
McCulloch as “better to look at than the
Mona Lisa,” with his typical modesty that
led to him being called ‘the mouth of the
Mersey’. The music was a mixture of
steady rhythms and dark yet colourful gui-
tars underneath McCulloch’s vocals,
described in a four star review in Rolling
Stone, saying he “specializes in a sort of
apocalyptic brooding, combining Jim
Morrison-style psychosexual yells, a flair
for David Bowie-like vocal inflections and
the nihilistic bark of his punk peers into a
disturbing portrait of the singer as a young
neurotic."
A year later, they came out of the studio
with their second album, Heaven Up
Here, a more majestic development and
continued their themes of isolation and
despair, but there was always an edge of
optimism. Their manager, Bill
Drummond, hated it "The album is dull as
ditchwater. The songs are unformed, the
sound uniformly grey," he said.
Many thought him wrong. Here’s your
chance to see a highly influential band,
performing two recordings now seen as
classics, that bridged the divide from the
breakthrough sound of punk into the
eighties, where pop wasn’t such a bad
thing. McCulloch thinks you should come
along, promising that the evening will be
an event, “It would be a masterclass for
anyone who's ever been in a band that isn't
quite as good as the band I'm in."
The Liver Boys -Echo and the Bunnymen
Billy Wilder season
Madagasikara, rue de Flandre, Brussels
Tel 0473 444074
www.madagasikara.be
Don’t be mistaken by this unassuming little restaurant, near
Place Catherine. It may not seat that many but if you are
lucky enough to get a seat you won’t regret it.
The pleasant and welcoming couple who run it used to
work for the Best Western hotel chain but, after 13 years,
decided to go it alone. The result is one of the few, possibly
the only, restaurant in Brussels serving authentic food from
the luxury holiday island of Madagascar.
The food is delicious with the starters, each priced 14 euros,
including so-called East and West coast salads and skewers
of very tasty meat.
The main courses, priced between 18-35 euros, include
chicken with coconut , the ‘famous’ Ravitoto port with rice,
tiger shrimps cooked the ‘Malagasy way’ and duck with
ginger.
The Madagascar influence does stop at the food as the
drinks list also includes Madagascar rum and cocktails.
Another plus is that the website comes in English as well as
French. Highly recommended.
TAKE A LOOK
Angel Fingers
A mourning angel in Laekencemetery. Apart from hostingearthly remains, the cemeteryalso features an original bronzecast of Rodin’s The Thinker,purchased in 1927 by the anti-quarian and art collector JosefDillen to use as his own memo-rial. Next to the entrance, thereis a small museum dedicated tothe sculptor Ernest Salu (1845-1923) and his successors.The calm and reflective atmos-phere of this fine example of acemetery is a welcome changefrom the city’s bustle.
EDDIE VAN 3000
10 Jan - Eurobonds - Stability And Growth
For The Euro Area?
15:00 - 18:30, European Parliament
The liberal ALDE group will not only dis-
cuss the different views on Eurobonds but
also the different options and possible alter-
natives. The overall aim of the seminar is to
identify what kind of policies would foster
stability and growth to the Euro area and
what role Eurobonds can play.
10 Jan - Communications for Life
18:30, European Parliament
Sayeed Kamal MEP introduces the work of
Télécoms Sans Frontiéres and an exhibi-
tionof the crucial work that TSF has done
on the ground in Italy, Chile, Libya,
Thailand, Haiti, Pakistan, El Salvador and
Turkey. It will show both the help they offer
people affected by adversity and their col-
laboration with humanitarian organisations.
12 Jan - Assessing the Code of Conduct
13:00 – 14:00, CEPS, Place du Congrès 1
Diana Wallis, MEP, Gerald Hafner, MEP
and Lukas Obholzer of VoteWatch.eu dis-
cuss the Code of Conduct and legislative
footprints: Their impact for MEPs, interest
representatives and transparency.
19 Jan - Electricity Markets At The
Crossroads: Which Market Design for the
Future?
08:30 - 17:15, Hotel Marriott, A. Orts 3-
7/Grand Place
The development of a truly European elec-
tricity market in the face of a large market
penetration of intermittent generation is
becoming an increasingly pressing issue. At
the same time, European energy and cli-
mate change legislation over the last few
years has intensified, leading to a more com-
plex set of Directives and Regulations with
-sometimes - unclear mutual implications.
The ability of electricity markets to drive
progress towards a carbon-neutral society,
integrate a high level of intermittent gener-
ation and fulfill mandatory energy efficien-
cy targets remains largely untested.
For more events see www.agenda.be
Billy Wilder seasonTo 28 February
Cinematek, 3 Rue Ravenstein
One of the most brilliant and versatile film-
makers of Hollywood’s golden Age is hon-
oured by a season of the best of his 60 films.
11 Jan - Maria João Pires & Antonio
Meneses
20:00, BOZAR
Too rarely heard, either live or on disc,
Maria João Pires returns to the Centre for
Fine Arts after an absence lasting five sea-
sons. She does so in the context of
europalia.brasil to accompany one of the
most emblematic cellists of his generation,
the Brazilian Antonio Meneses, who is
renowned above all as a member of the
Beaux Arts Trio. Their programme is made
up of classics by Schubert, Brahms, and
Mendelssohn.
11 Jan – The Computers
20:00, Botanique
A four-piece blues / punk / hardcore band
from Exeter, signed to Fierce Panda. Loud.
14 Jan – Tickets for Rusalka on sale
10:00, La Monnaie
Not an event, but the chance to see a spe-
cial event, Antonín Dvořák's Rusalka,
which is certain to quickly sell out. Turn up
at 9am to get your queuing number and
you’ll be first as online and telephone tick-
et sales start at noon, if there are any left!
14 Jan – Chantal Goya
14:30 – 17:00, Forest National
A show written by Jean-Jacques Debout
entitled The Curious Case of the Haunted
Castle. The story takes place in Russia, in a
forest in the Urals. The children of a wood-
cutter concerned about not seeing their
father come back. They think right away
that the witch is responsible for his disap-
pearance. The arrival of a young girl,
touched by the hospitality of the villagers,
will change everything. Indeed, it decides to
confront the witch ...
Brussels Agenda 9 – 19 January
WORKsuggest your event for our agenda: [email protected]
PLAYsuggest your event for our agenda: [email protected]
FRANCE · GERMANY· SPAIN · PORTUGALNew Europe | Page 18 THE EUROPEAN UNIONJanuary 8 - 14, 2012
SPAIN|NUCLEARSpain selects site for nuke storageThe central Cuenca province would be hosting Spain’s usednuclear fuel storage facility. Local reports last week revealedthat a small town of the province, Villar de Canas, emergedas the winner in the bid contested by fourteen Spanish lo-calities. The project drew considerable interest since it wastabled as it is expected to provide a good number employ-ment for a long term. Now, Villar de Canas is expected tobenefit from the creation of up to 500 construction jobsand then skilled work for around 60 years.
SPAIN|RETAILAiling retailers slash prices to lure buyersAiling retailers started deep discounts in their post-Christ-mas sales, local media reported last week. The deep dis-counts, at least primarily, were paying off, the reports said.Meanwhile, a survey of 2,000 consumers carried out by theFederation for Independent Consumers predicted thatthree-quarters of Spaniards had plans to spend moremoney during this post-Christmas sales period. Thebiggest discounts hitherto were on offer at chain stores, es-pecially those selling clothes. The Christmas discountshelped boost sales at clothing retailers in December, whichinched up 1% compared to a decline of 3.0% in the previ-ous year, according to Acotex. The group predicts that forall of 2011, sales will be down around 1.0%, a fourth con-secutive yearly decline, but will stabilise this year. Spanishretailers have been hit especially hard by the economicdownturn. Over 37,000 small- and medium-sized storesclosed their doors last year, according to the Spanish Con-federation of Commerce.
SPAIN|ENERGYT-Solar raises $145mn from loansSpanish thin film solar company T-Solar Group recentlyinked three loan agreements for a total of $145 million,local reports revealed last week. The amount is likely to beinvested in the company’s ongoing projects in Peru whereT-Solar is building two PV thin film solar power plants.Reportedly, the United States' Overseas Private InvestmentCorporation (OPIC), the Netherlands' FMO and France'sProparco will co-fund the projects which are valued at over$165mn. OPIC, as reported, has agreed to provide $131min senior debt partially guaranteed by US credit insurancecompany Assured Guarantee, with FMO and Proparcolending up to $14.3m in mezzanine debt. The two plantswill be built in the Arequipa region in southern Peru andgenerate a total capacity of 44 megawatts once online. Theinstallations are expected to be connected to the nationalgrid by the second half of 2012.
GERMANY|AUTO INDUSTRYInvestors sue Porsche over failed VW mergerA group of investment funds is suing Porsche for € 2billionin damages after the German luxury sports car firm's mergerwith the Volkswagen group failed in 2008, the fund's lawyerssaid on 1 January, The Local reported. The money is sup-posed to cover fund losses after Porsche stunned marketswith its announcement in October 2008 that it was acquir-ing 75% of Volkswagen, leading to a massive surge in thevalue of VW shares, lawyers said in a statement. Porsche'sbid to take over VW ultimately failed and the indebted lux-ury car maker was in turn saved by Volkswagen.
On 3 January, France’s President NicolasSarkozy said his country will soon see anincrease to the national rate of valueadded tax and a reduction to the manda-tory social security contributions paid byemployers. The VAT rate increase isaimed at raising extra revenues whichwill be used to fund Frances’ troubled so-cial security system, and the extra surpluswill allow the French government to re-duce the rate of employers’ payroll con-tributions. In a speech given in Paris,Sarkozy said that the changes will workin unison and boost the country’s eco-nomic production, increase the employ-ment rate, and lower labour costs. Thecurrent VAT rate in France is 19.6%, andthe standard rate for social security con-tribution is 8%. Sarkozy said the changesshould be approved by April 2012.
With less than four months to go topresidential elections, Sarkozy is seekingways to reduce labour costs, stem risingunemployment and boost growth with-
out hurting consumer spending anddriving the country further into the red.He plans to meet with labour and busi-ness leaders on 18 January to discussways of cutting the cost of labour by re-ducing the role of social charges onsalaries in paying for France’s welfarestate. French Finance Minister Francois
Baroin said the government hasn’t de-cided how to cut labour costs. “The VATraise is an option, but we cannot excludeothers,” France Info radio quoted him assaying. “There is a French weakness andit’s labour costs. So we must imaginemeasures to lower them, that’s the polit-ical project.
Sarkozy confirms tax increaseFRANCEECONOMY
BASF is participating with $30 million through BASFBiorenewable Beteiligungs GmbH & Co. KG in the Amer-ican technology firm Renmatix Inc. The BASF subsidiary leda $50mn financing round, joined by new and existing in-vestors, The Company reported on 3 January.
The technology company Renmatix has developed thePlantrose™ platform. With this patented process, industrialsugar can be produced from lignocellulosic biomass (wood,cane trash or straw).
This technology makes it possible for the first time to pro-duce industrial sugar in large quantities and at competitive
cost from non-edible plant mass. In the Plantrose technol-ogy, biomass is split into cellulose and sugar in supercriticalwater at high temperature and pressure in a two-step process.Since the Plantrose technology utilizes non-edible biomass asfeedstock, it is not in competition with feed and food pro-duction. Industrial sugars are important renewable resourcesfor the chemical industry and can be used, for example, toproduce biofuels or basic chemical products and intermedi-ates by fermentative processes. The availability of industrialsugars in sufficient quantities and at favourable cost is there-fore important for the competitiveness of the products.
BASF participates in US company RenmatixGERMANYCHEMICALS
France's President Nicolas Sarkozy reviews troops at Lanveoc-Poulmic naval airbase prior to deliver hisNew Year wishes to French army in Lanveoc, France, 3 January 2012. Sarkozy confirmed that the coun-try will soon see an increase to the national rate of value added tax and a reduction to the mandatory so-cial security contributions paid by employers. |AFP PHOTO/POOL/MICHEL EULER
Unemployment Spain’s greatest problemSpain currently faces the toughest chal-lenge in trimming the number of joblessSpaniards, the country’s EconomyMinister Luis de Guindos, recentlycommented. He reiterated that Spain’spublic deficit for 2011 may be higherthan previously expected.
The initial estimation of Spanishdeficit stood at around 6% but that hadto be revised upwardly soon, thanks tothe burgeoning deficit problems in the
country and the Eurozone as a whole. The last official estimation on the
deficit put the figure at around 8% butthis time Guindos indicated that thedeficit may be even higher. This is whilethe official unemployment rate in Spainhas risen to a new high, with 4.42 mil-lion jobless registrants recorded at theend of 2011. The figure, released re-cently by the Spanish labour ministry, isthe highest set in the country since
1996. “Figures for the number of regis-tered unemployed for the month of De-cember confirm the deterioration of theeconomic situation during the secondhalf of the year,” the labour ministrystatement said, cited by local media.
Meanwhile, Spain's statistical officereleased a separate survey in which itfound that the country's unemploymentstood at 4.978 million in the third quar-ter of 2011.
SPAINLABOR
The Portuguese government would need to borrowaround €17.4 billion this year to keep the economy afloat,the country’s treasury and debt agency estimates. Localreports last week said citing a statement from the agencythat the government would continue its strategy of issu-ing three-month and six-month treasury bills most of
the year, except in March, when it would issue fourth-month bills.
Besides short-term financing, the agency reportedlynoted that the Portuguese coffer would also obtain fundsfrom the European Union and International MonetaryFund’s €78 billion bailout.
Portugal will borrow €17.4 billion this yearPORTUGALECONOMY
AUSTRIA · SLOVENIA · ITALY · MALTANew Europe| Page 19
THE EUROPEAN UNIONJanuary 8 - 14, 2012
AUSTRIA|AGRICULTURE
Farmers face tax advantage axeThe Social Democrats (SPO) want to spend hundreds ofmillions of euro less on the agricultural sector, Austrian In-dependent reported. The Kurier disclosed that the govern-ment party planned to get rid of farmers’ tax benefits helpingthem to acquire tractors and fuel for less. The party ofChancellor Werner Faymann is also planning a reform oftaxation measures of profits achieved by farmers and forestryfirms, according to the paper. The state’s budget could beincreased by over €350 million if those measures came intoeffect, the SPO’s team of debt limit negotiators said. TheSPO’s coalition partner, Vice Chancellor Michael Spinde-legger’s conservative People’s Party (ÖVP) is expected toshow some effort in avoiding higher tax pressure on farm-ers. Businesspeople operating in the agricultural sector areimportant group of voters for the party which recentlydropped from second to third place in opinion polls behindthe Freedom Party (FPO). Civil servants are another keygroup of OVP supporters. This aspect was decisive in the re-cent wage negotiations of government officials and union-ists. Works council chiefs representing Austria’s publicservants warned about starting a labour dispute if the coali-tion rejected their calls to compensate people for the infla-tion rate. Civil servants’ representatives demanded a salaryincrease of more than three per cent from next month whileSPO Minister for Public Servants Gabriele Heinisch-Hosek suggested a rise of only 2.5%. Asked by the Kurierabout the expected slowing down of economic growth andausterity measures, Karl Aiginger of the Institute for Eco-nomic Research (WIFO) said he was concerned that fi-nancial support for education and innovation may wane.Aiginger called for an increase of Austria’s budget for theseissues. The economist suggested spending more thanplanned on the creation of broadband internet connectionsacross the country. Aiginger said such a step would reducethe gap which currently separated industrialised areas fromeconomically struggling countryside regions.
SLOVENIA|AVIATION
Adria will resume services toLondon in 2012 summer seasonThe Slovenian national carrier Adria Airways has startedthe year bearing good news. The airline will resume servicesto London Gatwick Airport during the 2012 summer sea-son, after it was suspended due to low profitability in Octo-ber 2011, Balkans reported. Announcing the route launchon its Twitter account, the news comes as the airline imple-ments the first phase of its restructuring program, which ithopes will bring it back into profitability. The route launchwill come as welcome news to passengers, Slovenian tourismand Ljubljana Airport which is in need of more passengersafter a disappointing 2011.
MALTA|RELATIONS
Libya to get jets backThe Maltese foreign minister, Tonio Borg, announced thatthe Libyan jets, flown to Malta by defecting pilots duringthe fighting, will be returned to the country’s new govern-ment “soon”. The pilots had refused to carry out orders tobomb civilians. There was also more news on Malta’s rela-tions with the Arab states. An agreement with Saudi Arabiawas reached on measures against drug trafficking and or-ganized crime. There was also an agreement on double tax-ation, after talks between Borg and his Saudi counterpart,Prince Saud bin Faisal bin Abdul-Aziz Al Saud. There arecurrently 10 companies registered with the Malta FinancialServices Authority (MFSA) with Saudi shareholding. In an-other development, Kuwait was granted authority to open anembassy in Malta.
Young businesspeople expect a worsening of the economicclimate – but they are also convinced of being able to weatherthe turmoil, Austrian Independent reported.
The Association of Young Entrepreneurs said it inter-viewed 2,200 self-employed Austrians in the past weeks.Around seven in 10 of them expect a new crisis but only twoper cent fear being incapable of getting through it.
The interviewed businesspeople – who are all youngerthan 40 – also identified personal savings and subsidies astheir main funds. The new survey reveals that 77% of themsaid restrictions in borrowing money from banks were thebiggest hurdle in starting a business.
Almost 30,000 companies are established in Austria eachyear. KSV 1870 (KSV), an organisation for the protectionof creditors, said last month that the number of Austrianbusiness bankruptcies declined by eight per cent from 2010to 2011 when 5,856 firms went bust. KSV stressed that thisdevelopment represented a decrease of 15%. KSV said it did
not expect an increase this year. The association announced:"Politics and the EU (European Union) might suffer a cri-sis at the moment, but not the domestic economy."
KSV’s figures also reveal that the number of private bank-ruptcies shot up by more than six per cent from 2010 to 2011when nearly 9,600 Austrians declared themselves broke.Lower Austria recorded the strongest rise of private bank-ruptcies in 2011 at 22 per cent. Lower Austria is located inthe north-east of the country. It is Austria’s most populousprovince.
The Viennese Institute for Economic Research (WIFO)said last month that it expected the Austrian gross domes-tic product (GDP) to rise by 0.4 per cent from 2011 to 2012.Only in September, WIFO predicted a growth rate twice ashigh. WIFO also said in December that the average GDPof the Eurozone’s 17 member states would not achieve anygrowth in 2012 – a year which could, according to the re-search group, feature periods of recession.
Entrepreneurs gear up for troubleAUSTRIA
BUSINESS
Slovenian retailer Mercator announcedit has acquired its franchisee Vesna,Balkans reported. Vesna operates sevenfranchised retailers in north-easternSlovenia. Mercator's acquisition, whichis still subject to conditions, was assessedby financial advisor KPMG. A figure for
the sale was not disclosed.Croatian rival Agrokor is attempting
to buy a majority stake in Mercator butnegotiations have repeatedly come to astandstill. Last month, the Nova Ljubl-janska Banka (NLB), a bank which isone of 12 parties looking to sell their
combined stake, announced a halt toproceedings over the as-yet unexplaineddeparture of CEO Bozo Jasovic.
In November, Mercator's manage-ment refused to support talks to sell thestake to Agrokor, citing concerns overthird-party involvement.
SLOVENIA BUSINESSMercator acquires franchisee Vesna
Sanctions suspicion. Italian prime minister Mario Monti.| AFP PHOTO / GABRIEL BOUYS
Mario Monti, Italy’s premier hasraised concerns about the plannedEU sanctions against Iranian oil ex-ports. The financially troubled stategets 13% of its oil from Iran.
“An oil embargo is conceivable aslong as it remains gradual and ex-cludes the deliveries that serve to re-
imburse the billion euros in debtsthat Iran owes to Eni, our nationalcompany,” Monti told France’s LeFigaro. “We have to encourage anopen and transparent dialogue withIran,” he added.
Monti raised his objection afterGreece said that it would go along
with the planned sanctions. Greeceobtains 14% of its oil from Iran. Enisaid on 8 December it is owed under$2 billion by Iran.
Brent oil for February settlementrose as high as $114.64 a barrel, thehighest intraday level since Nov. 14,in London futures markets.
Monti queries Iran oil banITALYSANCTIONS
UK · BELGIUM · NETHERLANDS · LUXEMBOURGPage 20 |New Europe THE EUROPEAN UNIONJanuary 8 - 14, 2012
UK|BUSINESS
JBM Group acquires majoritystake in UK's Tesco GOAuto component-maker JBM Group said it has ac-quired a 51% stake in UK-based Tesco GO for anundisclosed sum as part of plans to strengthen itsbusiness in the country as well as overseas markets,Economic Times reported. The billion-dollar group,which acquired the majority stake in Tesco GOthrough subsidiary JBM Cadmium, said the acqui-sition will add another $20 million to its overall rev-enues by the end of this fiscal. "The acquisition willopen new avenues for us... We will leverage the en-gineering and technical expertise of Tesco GO andfind ways to strengthen our existing segments orenter into new domains," JBM Group Executive Di-rector Nishant Arya told reporters here. He said thegroup has been focusing on heavy trucks, cars andrailways. "Using the expertise of Tesco, we will alsolook at entering aerospace, which they have beengood at," Arya said. JBM is also looking at expand-ing its base in overseas markets, particularly inemerging markets like China and Mexico. At pres-ent, 4% of its revenues come from international mar-kets, which includes countries in Western Europeand North America. While the group did not pro-vide details on the size of the deal, the company saidTesco GO had a turnover of $20 million last yearand has been providing engineering services to autogiants like Mercedes Benz/Daimler, Ford, Tata, Fiat,Lamborghini, Bajaj and Piaggio, among others.Talking about expansion plans, Arya said the groupwill also look at setting up plants outside the coun-try, while continuing to enhance its existing facili-ties in India. He, however, declined to give detailson proposed capacity expansion of the company'sexisting facilities in India.
NETHERLANDS|DEVELOPMENT
South Sudanese cops get Dutch trainingFrom 2012, Royal Netherlands Marechaussee person-nel as well as police officers will provide training andcoaching to the South Sudanese police. The govern-ment decision to participate in a UN mission in thisAfrican country was backed by a majority in the Houseof Representatives. The team of military and policepersonnel, with a maximum strength of 30, will carryout its task unarmed. The security of its members willbe ensured by UN military personnel from mainlyAfrican and Asian countries. In addition to buildingup the police apparatus, the mission may also involvesending rule-of-law and human rights experts. Thisreflects the fact that the Netherlands opts for a com-prehensive approach to stabilisation and de-escalation,capacity-building, and addressing the causes of theconflict.
LUXEMBOURG|LEGAL
Divorce at Bonn Schmitt SteichenA disagreement over the Luxembourg independentlegal firm has led to the creation of two new outfits,Bonn & Schmitt and Bonn Steichen & Partners, whocame into existence with the new year. Former man-aging partner Alex Schmitt and Guy Arendt, teamedup with 27 lawyers to form Bonn & Schmitt. BonnSteichen & Partners is led by Alain Steichen with an-other seven former Bonn Schmitt Steichen partnersand just over 40 associates and counsel.
Around 1,600 jobs are to go at shoe retailer Barratts Price-less after attempts to find a buyer for the concessions businessfailed, administrators in the UK said, RTE Ireland reported.
It was announced previous week that nearly 200 jobs werebeing lost with the closure of 18 stores in the UK and Ire-land. Administrator Deloitte said it would continue to tradethe remaining 173 stores as it sought a buyer for all or partsof the business as a going concern.
But it said that it had been unsuccessful in finding a buyerfor the concession business. The concessions are mainly inDorothy Perkins and Outfit stores.
The 173 stand-alone stores are unaffected by the an-nouncement as attempts to seek a buyer continued.
The administrators said failure to find a buyer for the con-cessions "will unfortunately result in redundancies of Barratts
Priceless staff across units in the UK and the Republic of Ire-land". The administrators are in talks with the various con-cessionaires to see how many of the affected people they couldeither employ or absorb into their existing businesses. Theyare also in active discussions to rescue a significant part of theremaining business, they added.
It was announced last Wednesday that 18 stores would shuttwo days later.
Five Barratts and 13 Priceless stores were closing previousFriday, with the loss of 127 jobs, and a further 60 staff mem-bers at the head office in Bradford, West Yorkshire, were alsobeing made redundant.
The shoe chain collapsed into administration earlier thismonth, after unseasonably mild weather further exacerbatedalready difficult trading conditions.
Flat footed: Barratts collapse to cost 1,600 jobsUNITED KINGDOMRETAIL
British sportswear retailer JJB Sports said trading improved inits second half and it achieved a Christmas outcome in linewith expectations that were revised down after an Octoberprofit warning, RTE Ireland reported.
JJB, which counts America's richest man Bill Gates amongits major shareholders, said that sales at stores open over a yearincreased 5% in the four weeks to 26 December. That per-formance meant like-for-like sales for the 47 weeks to 26 De-cember fell 13.5%.
In October the firm, which trades from nearly 200 UKstores competing with larger rival Sports Direct as well as su-permarkets and online retailers, issued the latest in a long line
of profit alerts, warning on the full-year outcome alongside awider first-half loss.
At the same time JJB, which came close to collapse last year,said its net funds had fallen to £17 million even though it hadraised £97 million over the past year to fund a turnaroundplan.
"Looking ahead, the ongoing credit squeeze on consumersand weaker UK employment numbers creates a tough envi-ronment. We continue to implement our turnaround aware ofthe importance of the periods of the January sales, Europeanfootball championships and London Olympics," said chiefexecutive Keith Jones.
JJB Sports says trading improves in H2UNITED KINGDOMRETAIL
The European Commission has re-jected Belgium’s proposed budget for2012. According to Belgian newspaperDe Morgen on 6 January, the govern-ment was informed of the commission’sdecision the previous week in a lettersent to prime minister Elio Di Rupo.
According to the commission, thefigures presented by Belgium were toooptimistic. Under the government’sproposed budget, the country will as-sume 0.8% growth in 2012, with adeficit of 2.8% GDP. The commission,
however, estimates that with a growthof 0.8%, the Belgian deficit for the com-ing year will be 3.1% GDP, which putsit above the 3% ‘sinner’ threshold.
The commission’s letter did not godown well with the new government,which, following a series of emergencymeetings, has decided to ignore its rec-ommendations.
In a reply to the EU economic com-missioner, Olli Rehn, the governmentargued that a 2.8% deficit is achievablein the year, and a new budget control
will be held in February, after which fig-ures for growth and deficit may be ad-justed. This split could prove to betroublesome for the nascent Belgiangovernment, formed, after a record-breaking 541 days of negotiations, at thebeginning of December. The six waycoalition, headed by francophone ElioDi Rupo was eventually secured largelydue to the partners being able to cometo an agreement on the budget in thewake of a looming economic crisis forthe country.
EC rejects Belgian budget BELGIUMFINANCE
Belgian Prime Minister Elio Di Rupo meets with EU Commissioner for Economic and Monetary Affairs Olli Rehn at the European Commission
headquarters, in Brussels 12 December 2011. |BELGA PHOTO BERNAL REVERT
POLAND · HUNGARY · CZECH REPUBLIC THE EUROPEAN UNION
New Europe | Page 21
January 8 - 14, 2012
POLAND|TELECOMS
Polska Telefonia Cyfrowa S.A toprovide mobile telephony servicesThe Shared Services Centre (Centrum Usług Wspólnych)signed an agreement with Polska Telefonia Cyfrowa S.A,the operator of the T-Mobile network in Poland, to pro-vide mobile telephony services for public administration,together with the supply of mobile phones and modems.The agreement will decrease the cost of mobile-phoneservices. The costs will be slashed by 31.4 million Polishzloty, ie more than 60%. The central procurement has in-volved 107 State agencies and offices, and the service willbenefit 633 administrative units. The PTC’s bid was re-garded to be the most advantageous of all the bids sub-mitted as part of the procurement. The bid has been for18.9 million Polish zloty. The Contractor offered to providethe service for the following net prices: rate for a minute ofconnection within Poland - 0.03 zloty, rate for an SMSwithin Poland - 0.04 zloty and the rate for MMS withinPoland - 0.33 zloty. The estimated net value of the primarycontract was 50.3 million zloty, while a gross amount of61.8 million zloty have been available for the funding ofthe contract. The other companies which submitted theirbids were: PTK - Centertel Sp. z o.o., Warsaw, andPolkomtel S.A., Warsaw. PTK submitted a bid with a netvalue of 24.1 million zloty, which offered savings of 26.1million zloty. The Polkomtel’s bid value was 19.1 millionzloty, with savings of 31.1 million zloty. The Shared Serv-ices Centre (CUW) operates under the supervision ofTomasz Arabski, the Head of the Prime Minister’s Office.The CUW started operating on 1 January 2011 pursuantto Government decision of 12 October 2010, replacing theformer KPRM Service Centre.
CZECH REPUBLIC|EXPORTS
Budding exports upThe Czech Republic based brewer Budejovicky Budvar(BB) last week posted its full year figures reporting ahealthy 5% surge in beer sales by volume last year. Thecompany attributed the performance principally to itsoverseas sales. Thanks to exports, BB’s beer volumes in-creased by 5.5% for the 12 months to the end of Decem-ber 2011, to 1.32 million hectolitres. Exports achieved anew record for the second consecutive year, rising by 7.8%year-on-year. Exports accounted for 49.4% of total vol-umes in 2011, the company informed. Budvar also re-ported a 3.4% rise in domestic volumes sales, despitetough economic conditions and duty tax rises on beer. Itsflagship lager brand, Budweiser Budvar, led the perform-ance, said the state-owned brewer. "Last year, BudweiserBudvar sold the second highest volume of beer in its 116-year history," the group’s business manager Robert Chrtwas quoted as having said in a statement. However, Chrtwarned that group net sales rose more slowly than vol-umes, up by 1.9% for the year.
CZECH REPUBLIC|TELECOMS
Telefonica formsnew Czech entityThe Czech chapter of Spanish telecommunication giantTelefonica Czech Republic recently established a sub-sidiary that would help in providing customer service, localmedia reports reveled last week. The new company namedInformacni linky has reportedly been formed by a contri-bution of part of enterprise – the organisational unit infor-mation and assistance services that provides customersinformation services on telephone numbers 1180, 1181 and1188. The spin-off includes all components of that part ofthe enterprise including employees who are now trans-ferred into the daughter company.
Hungary rejects two foreign companies from mobile tenderHungary’s National Media and Info-communicationsAuthority (NMHH) on 2 January said it excluded a Ro-manian company and a Vietnamese company from bid-ding in a frequency auction because of shortfalls in theirregistrations to participate, Budapest Business Journal re-ported.
Romania’s RCS and RDS failed to meet a requirementconcerning market regulator fees and Viettel Group’sregistration contained "several serious formal deficien-cies that could not be corrected", NMHH said.
NMHH accepted the registrations of the three com-panies that share Hungary’s mobile telecommunicationsmarket at present - Magyar Telekom, Telenor Mag-yarorszag and Vodafone Magyarorszag - as well as of anewcomer, a consortium of the state-owned MagyarPosta, the Hungarian Electricity Works (MVM) and aunit of the Hungarian Development Bank (MFB).
The deadline for registering to participate in the auc-
tion for frequency blocks in the 900 MHz band was 8December. The bidding period will start on 5 January,NMHH said.
The NMHH announced the tender for the frequen-cies on August 4. A 5MHz "A" frequency block is beingoffered at a starting price of net HUF 4bn. 1MHz "B"frequency blocks are being offered at a starting price ofHUF 700m apiece, and 0.8MHz "C" frequency blocksare being offered at a starting price of HUF 560 million.
Bidding will take place in the first phase of the tender.Blocks will be assigned in the second phase.
The winner of the "A" block will also get an option forthree 1,800MHz blocks and three 2,100MHz blocks.
If the first round of the tender is closed without result,bids may again be submitted for the "A", "B" and "C"blocks in the second round.
Participants may win no more than a combined7.8MHz in the band.
HUNGARYTELECOMS
Footing health costs. Kangal fish, also called Doctor fish, nibble the feet of a customer on 7 October at a Thai Medical center at Wenceslav square in
Prague. |AFP PHOTO / JOE KLAMAR
Govt won’t pay for ‘luxurious treatments’
The Czech health care reform ispoised to identify the sectors of med-ical treatment those can be deemedas luxury and expensive as well andwould terminate any generous sub-sidised treatments in these segments,local media reports revealed lastweek.
According to a report in the dailyHospodarske noviny (HN), the statewould clearly outline shortly whichtreatments it couldn’t finance out ofpublic money. In those cases, the au-thority is likely to advise doctors toopt for reasonable pricing of thetreatments.
According to HN, Czech HealthMinister Leos Heger would soonissue instructions to the doctors andmedical facilities to assess whetherthe benefit of a new method of treat-
ment is proportional to its costs. Acommission set up by the ministrystarted working on these issues sinceFebruary 2011.
However, the new propositions, asreported, wouldn’t be pressed uponthe contemporary system. Initiallythere will be a test run to identify thescopes of additions and alterationsbefore putting it as law.
The new system, as interpreted byobservers would mean, it will be upto the doctors and experts to assessand decide whether the new devicesor artificial joints, for instance, couldbe financed from the state coffer.
The HN report said it would be atwo-phase process in which repre-sentatives of the state, health insur-ers, doctors and the public will havevoting right.
A similar approach is to be appliedto medicines as of 2013. The argu-ment of the government remains thesame.
They say the state can’t afford topay everything that medicine offersand hence, making the right choice– discretionary according to critics –is inevitable. Consequently, healthinsurers will not cover some brandnew methods in the future thoughthey might help patients more than aless expensive treatment.
According to the World HealthOrganisation (WHO) a new med-ical technology pays only if a year ofa good-quality life it secures does notcost more than a triple GDP levelper capita. According to data cited byHN, it is now some 1.092 millioncrowns in the Czech Republic.
CZECH REPUBLICHEALTH
SWEDEN · DENMARK · FINLAND· IRELANDPage 22 | New Europe THE EUROPEAN UNIONJanuary 8 - 14, 2012
SWEDEN|AUTOS
Mahindra & Mahindra eyes Saab AutomobileAs per the sources, India’s biggest sport-utility vehi-cle manufacturer, Mahindra & Mahindra (M&M) iseager to buy parts of the bankrupt Swedish car man-ufacturer, Saab Automobile. After purchasing a partof Ssangyong, the Mumbai based automobile com-pany is reportedly looking forward to arrange talkswith the two court-appointed administrators who arein charge of the Saab’s bankruptcy case, it was re-ported on 2 January. The report about buying sharesof the Swedish car makers have been denied byRoma Balwanin, the spokesperson for Mahindra.The news could not be confirmed as Bharat Doshi,Chief Financial Officer was not available to com-ment on this matter. After 9 months battle in court,Saab Automobile was declared bankrupt on 19 De-cember, 2011. In 2010, General Motors (GM) soldthe Sweden based company, Trollhaettan to Dutchsports car manufacturer, Spyker Cars NV (SWAN)and thereafter, the company was renamed as SwedishAutomobile NV. According to Victor Muller, ChiefExecutive Officer, there are many potential compa-nies from Sweden and other nations that are inter-ested in purchasing a part or whole of the SaabAutomobile. Earlier this year, Mahindra and Mahin-dra bought 70% stakes in Ssangyong Motor Co thatwas previously owned by SAIC Motor Corp. Buyingshares in Ssangyong costed M&M around $ 368million. After investing the huge amount, the com-pany would look forward to gain profit from Pyeong-taek, the South Korea based company of technologyand international sales network. Like Saab, Ssangy-ong too sought bankruptcy protection in the year2009 after it failed to entice customers in SUV seg-ment. Apart from M&M, a Turkish company is alsorumoured to be interested in purchasing the SaabAutomobile. Saab Automobile’s 3600 employees arebeing paid salary by the Swedish Government underthe country’s bankruptcy law. However, this assis-tance is provided by Government for a limited timeperiod. The company is eagerly looking for investorswho can bring things back on track.
DENMARK|BANKING
Maersk denies planning tosell Danske Bank stake Denmark's AP Moller-Maersk A/S has no plans todivest its minority stake in the country's largestlender Danske Bank A/S , the industrial conglomer-ate said on 3 January in response to a media reportthat advisory firm McKinsey & Company has rec-ommended such a sale. "We have no plans to sell ourstake in Danske Bank. Both our chief executive andour supervisory board chairman have clearly statedthat such a divestment isn't part of our strategy,"Maersk spokesman Michael Storgaard said. Danishnewspaper Jyllands-Posten had reported earlier lastTuesday that a McKinsey & Company report listeda divestment of Danske Bank as one option inMaersk's strategy to strengthen the focus on its ship-ping and oil businesses. Sources close to the processtold Jyllands-Posten that Maersk's managementviews the report's recommendations positively, butdoesn't consider the time right for such a sale.Maersk owns just over 20% of Danske Bank's sharecapital, making it the lender's largest individualshareholder. Storgaard wouldn't confirm the exis-tence of the report or its conclusions, but underlinedthat "Maersk considers the Danske Bank stake along-term investment".
New law gives transport operators the green light
Swedish government is to allow privatetransport companies to provide publicbus services, in a bid to improve serv-ices and prompt people to use publictransport, The Local reported on 2January.
“We see opportunities to comple-ment other public transport and we areplanning a number of pilot projects in2012,” confirmed Ingvar Ryggesjo, In-formation Officer at Swebus in dailynewspaper Metro.
The new law on public transportcame into effect on 1 January but ever
since the initiative was launched, notjust Swebus, but many companies haveshown an interest and have enrolled forthe government’s pilot project.
Authorities believe co-operation be-tween public and private organisationswill be beneficial to all areas of Swe-den, although the pilot project for 2012is primarily focused on the Oresundregion.
“Many commute across the channeland they don’t have a great deal ofchoice in terms of transport operators,”said Ryggesjo.
It is a matter of finding public trans-port connections where it would beprofitable to run such business.
However, the time it takes to travelstill remains an issue and in some areasit is faster to travel from A to B by car.
“In the Stockholm region we are in-terested to see the impact on the cross-link connections, such as theTaby-Kista line. It takes fifteen min-utes to go by car but nearly an hour totravel by public transport,” said RolfKolmodin, Communications Officer atpublic transport operator Nobina.
TRANSPORT SWEDEN
Ireland's second-largest general insurer FBD has sold itsbrokerage arm, FBD Brokers, to Britain's Jardine LloydThompson ( JLT) for € 8.5 million, the company said on30 December, RTE Ireland reported.
The subsidiaries - FBD Insurance Brokers, Interna-tional Loss Control Services and FBD Risk ManagementServices - are being sold to JLT Insurance Brokers Ire-land. FBD Brokers was set up in 1973 by to manage thecommercial insurance needs of large commercial and cor-porate clients. Based in Dublin, it employs 33 staff andprovides insurance broking services to the agri-food, wastemanagement and renewable energy sectors.
JLT Ireland is the fifth largest insurance brokerage inIreland and has offices in Dublin and Cork, employing100 staff. JLT Ireland is part of the Jardine Lloyd Thomp-
son Group plc.The deal includes an initial payment of € 6.75 million,
an additional payment of € 500 million based on workingcapital on completion and a deferred payment of up to €1.25 million, payable in 2013 based on FBD Brokers' fi-nancial performance in the year following completion ofthe deal.
FBD Brokers generated a profit before tax of around €1.2 million in 2010.
"Today's announcement of the sale of FBD Brokers isanother significant strategic step for FBD, which willallow us to focus on our core insurance underwriting busi-ness and to pursue further growth in the business insur-ance market through the broker channel," said FBD chiefexecutive Andrew Langford
FBD sells broker businessesIRELANDFINANCE
Packaging group Ardagh has agreedto buy the Boxal group of companiesfrom Exal Corporation in a dealworth around € 85 million, RTE Ire-land reported.
Boxal makes aluminium containers,and supplies aerosols and bottles to awide variety of industries including
cosmetics, pharmaceutical, food anddrinks. It has manufacturing plantslocated mainly in France and theNetherlands.
Ardagh Group CEO Niall Wallsaid the Boxal deal would help thegroup to further diversify into the alu-minum can market.
Ardagh Group produces metal andglass packaging for many of theworld's leading food, drink and con-sumer product brands. It operates 88manufacturing plants in 25 countries,employs 14,000 people and has an-nual global sales of more than € 3.2billion.
Ardagh buys aluminium container makerIRELANDBUSINESS
Wanted, more busses and fewer vehicles in Stockholm’s roads and tunnels.| AFP PHOTO / SVEN NACKSTRAND
LATVIA · LITHUANIA · ESTONIA · SLOVAKIANew Europe | Page 23THE EUROPEAN UNION
January 8 - 14, 2012
SLOVAKIA|ECONOMYEnergy prices, austerity measures boost inflation The inflation rate in Slovakia in 2011 probably was thehighest in the last three years, thanks to the growth in en-ergy prices coupled with the government initiated austeritymeasures, local reports revealed last week citing analysts. Areport in the online version of The Slovak Spectator on 3January showed consumer prices in Slovakia grew by 4.5%in 2011, according to estimations of bank analysts. This, ifconfirmed, would be the highest growth of consumer pricessince 2008. According to the report, the growth of consumerprices accelerated significantly in early 2011 due to higherenergy prices for natural gas, heat and electricity as well asto the government’s fiscal measures aimed at reducing thedeficit such as increasing the VAT rate from 19% to 20%and cancelling various tax exemptions. Some analysts alsoshared the view that the escalating food prices also madesignificant contributions to the inflation. Official figuresshow that in the second quarter of 2011, the growth of con-sumer prices reached 4%. The second round of energy priceincreases for households in summer pushed the inflationrate up to 4.5% in the third quarter. This year, analysts are ex-pecting some cool down of the prices, principally attribut-able to the apprehended economic slowdown which shoulddampen price increases as well.
SLOVAKIA|RETAILHenkel Slovensko fined over a cartel agreementSlovakia's Antimonopoly Office (PMU) has issued a fine of€ 194,000 against Henkel Slovensko and its parent com-pany Henkel Central Eastern Europe Gesellschaft, Slovakspectator reported on 5 January. The companies were finedfor having concluded a cartel agreement with Procter &Gamble International Operations SA and its Slovak sub-sidiary. Within this contract the firms agreed on prices oflaundry detergents in Slovakia and on limiting the volumeand frequency of ads promoting them in central Europe.The PMu said on 4 January that the companies had nego-tiated restriction of the volume and frequency of promotionof washing powders in the central-European region fromthe second half of 1999 until late 2004, adding that by theend of 2002 they agreed to leave prices of new, smaller-sizepackaging at the original level. The antimonopoly author-ity stated that the companies had been exchanging sensitiveinformation. Procter & Gamble was not ultimately finedsince it was the first to inform the Antimonopoly Officeabout the existence of the cartel agreement.
SLOVAKIA|AGRICULTUREADM acquires three grain elevators in SlovakiaArcher Daniels Midland Company ADM +1.66% on 4January announced it has acquired three grain elevatorsin Slovakia from the companies Palma Group a.s. andPolnonakup Hont a.s. The new assets are ADM's firstin the country, it was reported on 4 January. "The acqui-sition of these elevators extends ADM's origination net-work into Slovakia and along the Danube River,advancing our strategy to grow our reach in Central andEastern Europe," said Tido Boehle, ADM general man-ager, Origination and Terminals, Europe. "The facilitieswill store and supply crops for our European processingfacilities and will help us better serve the local farmingcommunity by connecting local crops to export markets."Located in Levice, Hontianske Nemce and Secovce, inthe south and east of Slovakia, the silos will enable ADMto secure additional rape and sun seed, as well as cornand wheat from new supply sources.
The contemporary eurozone situation is likely to affect theamount of wage growth in Lithuania, Prime Minister An-drius Kubilius cautioned last week. He however assertedthat wages will grow next year though to a lesser extentthan had been projected. “As our forecasts suggest, wagesare to increase this year, however, not that much as we ex-pected back in September.
The forecasts were updated because of the eurozone cri-
sis,” Kubilius said. He didn’t made any firm comment onthe EU situation saying that it is “quite hard” to predict.“Some are talking about even a graver crisis. Our publicbudget with a 3% deficit lets us think that Lithuania is ba-sically ready to withstand even a challenge as big as that,”the premier said to the National Televisionon. TheLithuanian Finance Ministry had forecasted that wagesshould go up by 2.5% in 2012 and by 4.5% in the next year.
Wages to see less increase than plannedLITHUANIALABOUR
Whether Russian will be treated as the official sec-ond language of Latvia is set to be decided through areferendum.
Local media reported last week citing Latvia’s CentralElection Commission that the nationwide referendumwould be held on 19 February.
For the Russian language to acquire the status of beingthe country’s second official language, more than one halfof Latvia’s residents, which makes about 772,000 people,must vote for it.
Out of Latvia’s total population of 2 million people,nearly 16%, mainly ethnic Russians, have no citizenshipand, thus, no right to vote. In total, Russians make 44%of Latvia’s population, according to news reports. Themovement in support of the rights of Russian speakersstarted in Latvia on 7 March last year.
According to the latest available data, over 12% of thecountry’s population supports the initiative. However,neither the president nor the parliament hitherto backedthis initiative.
Latvia to hold referendum on Russian languageLATVIA SOCIETY
The latest data from the Union ofAutomobile Dealers and ServiceCompanies (AMTEL) showed alto-gether 15,350 new cars were sold inEstonia last year which accountedfor a notable growth in the perform-ance of the sector. In percentageterms, the car sales last year saw ahuge 73.5% leap on 2010 figure.
In December alone, which is amonth of weak car sales, dealershipsof automobiles sold 1,156 cars, com-pared to only 729 during the samemonth in 2009. AMTEL head JaakUudla hopes that sale of new cars
will grow by 10-15% this year. Despite huge growth, sales still re-
mained much weaker compared tothe pre-recession years. For instance,30,902 new cars were purchased in2007, and 24,347 in 2008.
Sales of all cars, new and used,peaked in 2006, reaching 74,000.Uudla said that as compared to boomyears, when over 30,000 new cars ayear were sold, the number of the pastyear was still modest. The AMTELattributed the growth to factors in-cluding disposal of cars older then tenyears and generous stance taken by the
leasing companies, among others. Asreported, Estonians bought 1,454 newcars in November.
This was by 9% more than duringthe previous month and a growth of70% from November last year, saidthe car dealerships association. Themost popular car make was Toyota,of which 180 cars were sold. It wasfollowed by Skoda and Volkswagenwhich sold by just one car less. Thebest times of new car sales in recentyears were in May and June of 2007when 3,192 and 3,039 cars were soldrespectively.
ESTONIAAUTO INDUSTRY
Estonian car sales grow in 2011
Latvian Prime Minister Valdis Dombrovskis, left, and Lithuanian Prime Minister Andrius Kubilius hold a press conference. Kubilius said the contem-porary eurozone situation is likely to affect the amount of wage growth in Lithuania. |AFP PHOTO/PETRAS MALUKASS
GREECE · CYPRUS · BULGARIA · ROMANIAPage 24 | New Europe THE EUROPEAN UNIONJanuary 8 - 14, 2012
Bulgaria's sole nuclear power plant, Ko-zloduy, is capable of withstanding natu-ral disasters, technical failure or acombination of both, the country’s Nu-clear Regulatory Agency said on 5 Jan-uary. "The organisation for emergencyplanning, the resources of the plant to actin emergency conditions, as well as thecurrent operational and technical meas-ures confirm Kozloduy's readiness tomanage serious breakdowns," the reportsaid.
Following the accident at earthquake-stricken Japanese NPP Fukushima, allEuropean nuclear plants were mandatedto make similar stress checks to identifymeasures to improve safety.
The stress tests, using the methodol-ogy adopted by the European Commis-sion, found that both Kozloduy andBelene, found that both sites could dealwith breakdowns and emergency situa-tions and their designs could withstandthe strongest possible earthquakes possi-ble in their areas. The report has beensent to the European Commission. Thetests agreed on at European level were toassess whether nuclear power stations inthe EU could safely withstand incidentsfrom accidents and natural disasters toterrorists attacks. A final report encom-passing all nuclear power stations in thebloc is expected in April 2012.
In November 2011, NPP Kozloduy
Executive Director Alexander Nikolovannounced some of the recommenda-tions in the report.
One of them provides for Kozloduy todraw up a plan how they will act if thereis a break in the wall of the hydrologicsystem Zhelezni Vrata (Iron Gate),which is 250 kilometres from the Bul-garian nuclear plant, on the Serbian-Romanian border.
Formally Belene is not mandated toconduct such checks, but assessmentwith the methodology and scope of Eu-ropean stress tests has been done anyway,Sofia Echo reported. The report resultswill be used in the licensing process forthe approval of the project.
Kozloduy nuclear plant safe from earthquake threat
BULGARIAENERGY
The Romanian government has de-cided that it will continue to set a limitto the number of work permits for for-eigners this year as well, Business Re-view reported on 4 January. Thethreshold for the work permits is 5,500in 2012, the same as last year. The ex-ecutive has axed the number of autho-risations for permanent workers andcross-border workers. This measureensures “the control of the number offoreigners who enter the Romanian
territory for work purposes and limitsthe number of detached workers forwhom no social insurance contribu-tions are paid in Romania,” accordingto the Romanian officials.
Of the total number of 5,500 workpermits, 3,000 will be authorisationsfor permanent workers, while last year4,000 authorisations were approved.Also, 700 authorisations will be ap-proved for detached workers, while lastyear, 600 were approved.
Last but not least, there will be 100authorisations approved for seasonalworkers, compared to 200 approved in2011. A total of 1,000 work permitswill be granted for highly skilled work-ers coming from abroad.
On 30 June 2011, there were 59,566foreigners registered legally in Roma-nia, of whom 49,301 were temporarystaying in Romania and 10,256 wereregistered as permanently staying inRomania.
Govt to keep limits on work permits for foreignersROMANIALABOUR
Cenk Demir Turkish Group is interested in Romania's re-newable energy market and announces important invest-ments in the local clean energy, ACT Media News reportedon 4 January. The Group allocated €30 million to the firststage of the project, which is expected to put out 100MW.“Dobrogea is an attractive area for such business and there-fore it is here that we plan to start our project. The feasibil-
ity studies will be carried out in 2012, and massive invest-ments are due over 2013-2014,” Cenk Demir TurkishGroup CEO Cenk Kucuk said. “At the moment, we are notworking with either private or state-run Romanian partnercompanies, but we do not exclude the possibility, in the fu-ture. Eighty percent of the manpower to work in the proj-ect is Romanian,” Kucuk said.
Cenk Demir to invest in Romania's green energyROMANIAENERGY
GREECE|ECONOMY
Athens expects to wrap up debt talks by end-JanuaryOn 4 January, Greek Prime Minister Lucas Pa-pademos told a meeting with union delegates inAthens that his government expects to wrap up talksseeking a 50% write-down on its debt owed to credi-tor banks by the end of January after banks appearedto make concessions on the terms that they would ac-cept under a new bailout. But the Greek premier hasalso warned that his country could default on its debtsand possibly leave the eurozone if it cannot make con-vincing progress in the next few weeks on long-promised economic reforms. European Union andInternational Monetary Fund (IMF) officials willbegin talks this month about a new and expanded in-ternational bailout designed to carry Greece for atleast three more years. Papademos said Greece faceda “disorderly default” in March, when a large bondpayment is due, if the government was seen as stallingon those changes and talks with the banks or inter-national lenders broke down. “If we do not make thenecessary adjustments, it is to be taken for grantedthat we cannot expect that the other EU countriesand international organisations will continue to fi-nance a country that does not adjust to reality anddoes not tackle its problems,” he said.
CYPRUS|DIVIDED ISLAND
Leaders to continue UN-backed talksOn 4 January, the Secretary-General’s Special Adviseron Cyprus, Alexander Downer, said that the leaders ofthe Greek Cypriot and Turkish Cypriot communitieswill continue to make efforts to reach agreement oncore issues when they meet near New York later thismonth for talks aimed at reunifying the island ofCyprus, according to the UN press centre. Downer toldreporters in Nicosia after the meeting between GreekCypriot leader Dimitris Christofias and TurkishCypriot leader Dervis Eroglu on 4 January that thereare outstanding core issues to be thrashed out on gov-ernance and power-sharing, property rights, territoryand citizenship. Those issues will be the focus of the22-24 January talks at the Greentree Conference Cen-ter outside New York, Mr. Downer said. “… there isstill in some cases quite a lot more work to be done andwe really want to see that work done by the end [of theGreentree meeting],” he said. “Obviously there are el-ements in all of those chapters which have beenagreed,” he said. “But there is still in some cases quitea lot more work to be done and we really want to seethat work done by the end” of the Greentree meeting,he added. Downer said he was today due to have ameeting with Eroglu and confer with Christofias sep-arately tomorrow before the two leaders meet again inNicosia on 9 January. “We’ll be having meetings againwith the two sides during the course of next week aswell so it is going to be a busy couple of weeks aheadof us and perhaps into the third week. But certainlythe next couple of weeks is going to be a busy time andwe are very much looking forward to it.” In response toa reporter’s question, Downer said the two leaders haveproduced draft outline papers on their visions of anagreement. “We are having some discussions withthem and [at] a certain point, pretty soon, in the nextfew days, they will exchange those papers,” he said. TheUN-facilitated talks began in 2008 with the aim ofeventually setting up a federal government with a sin-gle international personality in a bi-zonal, bi-commu-nal country, with Greek Cypriot and Turkish Cypriotconstituent states of equal status.
The dry cask storage for spent nuclear fuel near the town of Kozloduy, some 200 kilometres north from Sofia, 12 May 2011. Kozloduy is capable to with-stand natural disasters, technical failure or a combination of both, the country’s Nuclear Regulatory Agency said on 5 January 2012.|AFP PHOTO/NIKOLAY DOYCHINOV
NORWAY · ICELAND · SWITZERLANDNew Europe | Page 25PARTNERS
January 8 - 14, 2012
UK equity firm buys OrangeThe British equity firm Apax Partnersclinched a deal previous Saturday to buyOrange Switzerland for €1.6 billion,Radio Switzerland reported.
The operator has just over 17% of theSwiss telecoms market, putting it inthird position.
Apax Partners has confirmed it isnow considering taking over the secondbiggest operator Sunrise.
A merger between Sunrise and Or-ange will not be tolerated, however,warns the Federal Competition Com-mission.
A representative for CVC declined tocomment on plans to pursue a mergerwith Apax.
Comco already blocked a merger at-tempt back in 2010.
Orange Switzerland is the country'sthird-largest operator with 17.3% mar-
ket-share. Sunrise has 20.6% andSwitzerland's dominant player Swiss-
com AG has a 62% share of Swiss mo-bile subscribers.
SWITZERLANDTELECOMS
Swiss private banking group EFG International has agreed tosell EFG Bank Denmark to SEB Wealth Management, a di-vision of SEB, it was reported.
EFG International said the move is part of its business re-view program to reset businesses and locations.
Financial terms of the transaction are not disclosed.EFG International is a global private banking group offer-
ing asset management services and its group of private bank-
ing businesses currently operates in 30 countries, with circa2,500 employees.
The company has a number of other private banking sub-sidiaries including EFG Private Bank in the UK and EFGCapital in the US.
SEB Wealth Management activities include managementof mutual funds, individual investment portfolios, Level 2Pension assets.
EFG International to sell Denmark unit to SEB Wealth Management
SWITZERLANDBANKING
Frontline, the largest independentglobal oil tanker operator, has success-fully completed its restructuring, it said,a move it earlier said was needed to en-sure the survival of the company, it wasreported. As part of the restructuring,Frontline spun off its new builds andfour Suezmax ships into a new entity,called Frontline 2012, at fair marketvalue of $1.12 billion.
In addition, Frontline 2012 has as-sumed $666 million in bank debt at-tached to the vessels and new-building
contracts and $325.5 million in re-maining new-building commitments.
Further, Frontline will receive pay-ment for working capital related to theassets sold. The estimated book value ofthe assets sold, including the remainingnew building commitments, on 31 De-cember, 2011 is $1,428 million. The as-sets have been sold at fair market valuesassessed by three independent ap-praisals. As a consequence of the re-structuring, the Company's sailing fleet,excluding the non recourse subsidiary
ITCL, is reduced from 50 units to 40units. The new-building commitmentsare reduced from $ 437.9 million to$112.4 million, which relates to twoSuezmax tanker new-buiding contracts,and bank debt is reduced from $679million to zero, following a prepaymentof $13 million associated with a vesselwhich is not part of the transaction withFrontline 2012. The cash proceeds forFrontline following the completion ofthe transaction is approximately $70million.
Frontline successfully completes restructuringNORWAY
BUSINESS
Aker Solutions has been awarded a contract by Statoilfor the engineering, procurement and construction of asubsea production system for the Svalin project on theNorwegian continental shelf, Norway Post reported.
The contract value is approximately 400 million Nor-wegian crowns. Scope of work includes two subsea trees,one four-slot integrated template structure with processdistribution manifold, subsea and topside productioncontrol systems, wellhead systems and remote connec-tion systems.
"We are very proud to be awarded this subsea produc-tion system project from Statoil and pleased to be fur-ther involved in the development of delivering
standardised subsea solutions for fast-track develop-ments," said Alan Brunnen, executive vice president ofAker Solutions' subsea business area.
Management, engineering and procurement of thesubsea production system will be primarily performed atAker Solutions' headquarters in Oslo, Norway. Fabrica-tion and manufacturing will take place in Tranby andEgersund in Norway and Aberdeen in the UK. Final de-liveries will be made in Q3, 2013. Svalin is a fast-track oilfield project located in the middle part of the North Sea,about eight kilometers southwest of the Grane field andapproximately 185 kilometres west of Haugesund, in awater depth of approximately 120 meters.
Aker Solution awarded subsea production systemNORWAY
ENERGY
SWITZERLAND|AVIATION
Swiss airline more popular than everSwiss International Air Lines has carried a record numberof passengers this year, surpassing the 15-million mark. Theairline – a subsidiary of Germany’s Lufthansa - said its pre-vious high was 14.17 million, which it set in 2010, SwissInfo reported. Swiss was created after the collapse of thenational carrier Swissair ten years ago under a mountain ofdebts. After getting off to a rocky start, the fledgling airlinewas bought out by the Lufthansa group in 2005. Under thewing of Lufthansa, Swiss has not only survived the finan-cial crisis and boom in oil prices but has become one of themost commercially successful airlines. The company has aglobal workforce of 7,521. From next year it will expand itsfleet of 81 planes with the delivery of five Airbus 330-300s,two Airbus 221s and two Airbus 320s.
ICELAND|BUSINESS
Amer Sports buys Icelandicclothing brand Nikita ehfIn line with Amer Sports strategic priority to grow fasterin soft goods, Amer Sports is acquiring Nikita ehf, a snow-boarding inspired Action Sports apparel brand which fo-cuses on female consumers, it was reported. Net sales ofNikita ehf is approximately € 8 million. "Action Sportsapparel is a large and dynamic market driven by youngpeople who skate, surf and snowboard and the acquisitioncomplements Amer Sports portfolio in Action Sports.With Salomon snowboards, Bonfire apparel and now,Nikita, we have a great opportunity to expand our presencein Action Sports, bring a broader range of exciting, au-thentic products to market and reach new consumergroups", stated Andy Towne, President of Amer SportsApparel. Nikita offers apparel "For Girls Who Ride" witha full year offering. Nikita sales are mostly in Europe anddistributed selectively also in North America and Asia.Nikita originates from Iceland and the sellers are individ-ual and institutional owners. "Amer Sports Apparel cate-gory will bring benefits to Nikita as we can leverage thescale of our brands in design, sourcing and in go-to-market activities", Towne continued. The transaction willnot have a material impact on Amer Sports 2011 financialresults or balance sheet. Amer Sports Corporation is asporting goods company with internationally recognisedbrands including Salomon, Wilson, Atomic, Arc'teryx,Precor, Suunto and Mavic. The company's technically-advanced sports equipment, footwear and apparel improveperformance and increase the enjoyment of sports andoutdoor activities.
NORWAY|ENERGY
Archer lowers profit guidanceNorwegian drill and well service company Archer loweredits fourth-quarter profit guidance, citing weaker-than-expected operations in November, and said its chief exec-utive would depart, Economic Times reported. Thecompany now expects its fourth-quarter earnings beforeinterest, taxes, depreciation and amortisation (EBITDA)in the mid-$80 million range, below November guidancefor a figure in the lower $90 million level, it said in a state-ment on 1 January. "Following a slow month of Novem-ber with lower than expected results in pressure pumping,fourth quarter 2011 operational EBITDA, excluding ex-ceptional items, is now expected to level in the mid-eight-ies," it said. It added that Jorgen Rasmussen will"transition out" of his role as group chief executive to pur-sue other interests and Fredrik Halvorsen will serve asVice-Chairman and Chief Executive until a permanentreplacement is found.
A man walks past Sunrise and Orange stands in a shop in Zurich.| AFP PHOTO / SEBASTIAN DERUNGS
CROATIA · ALBANIA · SERBIA · BOSNIAPage 26|New Europe CANDIDATESJanuary 8 - 14, 2012
CROATIA|ECONOMY
New govt aims for 5% growth by 2015Newly appointed Croatian Prime Minister Zoran Mi-lanovic recently stated that the government aims to increasethe economic growth rate to 5% by 2015. It should be notedthat the economic programme of the government is basedon projections of strong economic growth, reduced govern-ment spending, and change of the system of social values,Javno reported. The government plans to reduce the un-employment level and also cut the share of budget expensesin Gross Domestic Product (GDP) by about 4.5%. Neces-sary measures would be adopted by the government to revivethe national industries and to direct at least 50% of industrialoutput towards export. In addition, the government alsoaims to reduce illiquidity, align legal time limits for paymentswith EU legislation, strengthen financial policy measures toreduce interest rates on loans to the business sector and urgefor closer coordination of fiscal and monetary policies. The government will prepare a plan for comprehensive fis-cal consolidation in the short and medium terms in order toreduce the consolidated government deficit to under 3% ofGDP and the primary deficit to zero, reducing the share ofbudget expenses in GDP by about 4.5%, and bringing theshare of public debt in GDP under 60%. "Consolidation inthe short term will be based on a reduction of public spend-ing and budget expenses.’ The plan reads, “The last line ofdefence' will be pensions, salaries and welfare benefits for themost vulnerable groups.” The government will aim to putthe shipyards and railways in order, relieve the budget bur-den, work out a plan for the development of contemporaryindustrial sectors such as biotechnology, the pharmaceuticalindustry and nanotechnology. The government will also un-derline the course for the development of traditional indus-tries such as the food, wood, textile, chemical, petrochemicaland oil industries. Some of the priorities as outlined by thegovernment are to remove barriers to investment and spurinvestment in tourism, energy, infrastructure sectors includ-ing irrigation and the environment. Modification of the taxsystem was also mentioned in the plans without increasingtaxes in order to encourage enterprise. In regional policy, thegovernment will adopt economic measures to carry out threespecial regional development projects such as restructuringagriculture and the food industry to increase their prof-itability, linking tourism and agriculture and strengtheningthe country's maritime orientation. According to the sectionin charge of agriculture, state-owned farmland will not beprivatised but let out on a long-term lease under favourablefinancial conditions, water and forest management will re-main the responsibility of the government and that mar-itime resources will be protected against excessiveexploitation. Regarding the section focusing on environ-mental protection, the government said it will encourage de-velopment of renewable energy sources to ensure that theirshare in overall energy consumption surpass 20%.
ALBANIA|AVIATION
Tirana Airport plans new terminalAlbania’s Mother Teresa International Airport recently an-nounced plans to construct a new passenger terminal in nexttwo years. The decision of new expansion phase of Albania’sonly international airport was taken after double-digit growthin travelers was registered last year, AENews reported. “2011was a generous year for the airport, with a growth of 18 percent with 1.8 million passengers,” said Mother Theresa Air-port’s Director of Operations Rolf Castro Vasquez. Currently,13 airlines fly in and out of Tirana, connecting the Albaniancapital directly with 30 destinations. The construction of thenew terminal will require €7 million. The airport said in astatement, “Planning for the expansion will begin in 2012and will be completed in the following year.”
Croatia needs funds for EU regulations Nikola Ruzinski, former state secre-tary for environmental protectionand Croatian negotiator with the EUfor Environmental Protection andEnergy recently stated that Croatiawill need about €10.5 billion for di-rect investments to adjust to EU’s en-vironmental protection regulations.In addition with direct investments,the amount is expected to be much
higher, Javno reported. Ruzinski said that together with
agriculture, this will be the most ex-pensive area of EU harmonization.The ministry states that waste watertreatment and sewage accounts for€3.5 billion, water supply will cost€1.7 billion, waste management €2billion, air protection and reductionof industrial pollution €2.5 billion.
The remaining amount will go to na-ture preservation, monitoring andother necessary investments. Around€6 billion will be invested in renew-able energy, while major investmentsare also required in energy efficiencyand transport. The EnvironmentalMinistry expects most of the moneyto be offered from EU’s structuraland cohesion funds.
CROATIAEU
Council of Ministers in Bosnia re-cently reached an agreement onmeasures to resolve concrete issuesregarding the EU, High Representa-tive in Bosnia-Herzegovina ValentinInzko said. As a result of the agree-ment, Inzko expects this year to bebetter for Bosnia-Herzegovina eventhough 2011 has been lost, Fars newsagency reported.
The envoy stressed that last yearBosnia-Herzegovina failed to meetthe expectations of the citizens whileits neighbors made a great headway inthe Euro-Atlantic integrations. It wasnoted that long trem problems stilllingers in Bosnia-Herzegovina. Citingthe global fiananicla crisis being tack-led by the globe, the governments wereusing all resources at their disposal inorder to survive economically. In thisregard, Inzko stressed that it meanspay emphasis and coordinating initia-tives to start investments and createnew jobs, protect workers, pensionersand families, maintain social servicesand social protection system. Heslammed the political circles n Bosniafor attaching importance to the wrongpriorities.
He pointed out that the politicianswasted energy on political scuffles
rather than solving real challengesfacing the country. Inzko expects thisyear to be better if political envoyswork on results of their agreementand realise the urgency of the situa-tion through joint collaboration. Heurged the new leadership to adoptthe fiscal framework and state budgetfor 2012 that would ensure function-ing of the state institutions and allowBosnia-Herzegovina to meet its in-
ternational duties. Inzko also stressedthe necessity of emergency measuresto be undertaken by the governmentin order to boost the economy andpromote employment.
In addition the emergency meas-ures will also allow Bosnia-Herze-govina to make progress in EUintegration and also ensure imple-mentation of the Action Plan forNATO membership.
2012 to be better for Bosnia: High envoy
BOSNIA EU
A meeting of the IMF Executive Board dedicated to the firstreview of the stand-by arrangement with Serbia was stalled.The Office of the IMF Resident Representative in BelgradeBogdan Lissovolik said that the meeting was delayed to secureadditional time for talks on law on 2012 budget, Beta newsagency reported.
Until early January, the IMF Board of Directors post-poned a decision on the first precautionary arrangement,which Serbia concluded with that financial institutionlast year, IMF headquarters in Washington said in astatement. Last November IMF and Serbia had reachedan agreement on the first review of the precautionaryarrangement worth €1.1 billion, which sets the 2012budget deficit at 4.25 percent of GDP. Serbia will be
able to withdraw €190 million if IMF Board of Direc-tors approves the first review of the arrangement in earlyJanuary.
During a recent debate in the parliament on Serbian budget2012, Serbian Prime Minister Mirko Cvetkovic noted that itwas drawn amid conditions of slow economic growth and theeurozone crisis. He recalled that the republic budget sets rev-enues at RSD 750 billion, expenditures at RSD 890 billion,and deficit at RSD 140 billion, which will be mostly coveredby loans. The premier said that entire deficit will be tappedfor capital investments, and incentives to local demand withthe aim of boosting Serbia's economy.
He informed that social responsibility and reform elementswere built into the 2012 draft budget.
IMF, Serbia discuss stand-by arrangement SERBIAFINANCE
High Representative of the International Community to Bosnia and Herzegovina, Austrian diplo-
mat, Valentin Inzko.| AFP/ELVIS BARUKCIC
An official trade delegation headed byTurkish Economy Minister ZaferCalayan recently paid a visit to SaudiArabia, Zaman reported. Saudis at-tached great importance to this visit asevident in the royal treatment given tothe Turkish delegation from landing atthe airport to meetings with high-levelSaudi officials. The delegation held talkswith Saudi Commerce and IndustryMinister Tawfiq Bin Fawzan Alrabiah,Minister of Transport Jabara Al-Seraisry, Finance Minister Ibrahim Al-Assaf, Housing Minister Shuwaish BinSaud Al-Dhuwaihi and Municipal andRural Affairs Minister Prince MansourBin Miteb.
The business forums held both inJeddah and Riyadh brought togetherhundreds of businessmen from bothsides. At the business meetings,Caglayan said that Turkey needs Saudiexperience and investment in refining,petrochemical and energy developmentto curtail our current account deficit fig-ures. Turkey is eager to welcome Saudiinvestments in the country’s key indus-tries even as the government eyes a big-ger slice in multi-billion dollar Saudiinfrastructure and construction projects.
In Jeddah, the business forum wit-nessed the signing of agreements be-
tween the Jeddah Chamber of Com-merce and Industry ( JCCI) and theMakkah Chamber of Commerce andTurkey’s business interest group the In-dependent Industrialists and Business-men’s Association (MUSIAD).Caglayan and his Saudi counterpartinked an agreement on cooperation inthe construction sector between Turkeyand Saudi Arabia. The petrochemicalindustry is one of the six categories of
industries highlighted by the Turkishgovernment as contributing most to thecurrent account deficit problem inTurkey. Others in the list were iron andsteel, machinery, automotive, textile andagriculture. Caglayan said that the gov-ernment is aware of the specific sectorsand sub-sectors that contribute to thecurrent account deficit, and is lookingfor ways to manufacture these items do-mestically rather than importing.
TURKEY · FYROM · MONTENEGRONew Europe |Page 27CANDIDATES
January 8 - 14, 2012
MONTENEGRO|EU AFFAIRSPejovic to head Montenegro's negotiations with EUMontenegrin Prime Minister Igor Luksic recently an-nounced at a government session that Montenegro's Am-bassador to the EU in Brussels Aleksandar Pejovic will beappointed as the country's head negotiator in talks with theEU, Montenegro Times reported. The government also ap-pointed Chief Negotiator for EU accession and CustomsAdministration Director Bozidar Vuksanovic new actingChief of Police. The EU Council had gave a green signal toMontenegro’s accession talks in June this year unless it meetscertain conditions related to rule of law by this time. Brus-sels expects Montenegro to form a structure for the negoti-ations and name the head of its team as soon as possible.Montenegro’s head negotiator with EU will form a teamwhich will comprise of experts. The Montenegrin Cabinetintroduced a number of measures aimed at restructuring thepublic administration for better efficiency, improving thehealthcare system and boosting economic growth in 2012.The Economic Policy Guidelines 2012 document definesconcrete development goals the Government has set in thepre-accession economic programme which serves as amedium-term macro-economic and fiscal framework forMontenegro. The priorities in the Guidelines are the boost-ing of the economy’s credibility, long-term economic growthand increased employment. The Government has restruc-tured the public administration in a way that will enablemore efficiency and interconnectedness of various depart-ments. The thrust of the new measure, implemented in ac-cordance with the new Law on Public Administration whichthe Parliament adopted in late summer, is to make most stateadministration bodies part of competent ministries.
MONTENEGRO|ECONOMYPM outlines Montenegro’s 2011 achievementsA recent meeting in Cetinje, Montenegro’s Prime MinisterIgor Luksic discussed the achievements made by the govern-ment last year in particular in EU accession process, economicrecovery from the crisis and World Trade Organization ac-cession, Montenegro Times reported. Citing the importanceof partnership and social dialogue which are considered askey principles of the government, the Premier said that thegovernment has proved that social divides could be success-fully handled through partnership and dialogue between po-litical and social stakeholders. The recent development ofMontenegro was evident in EC decision to commence EUaccession talks with Montenegro in June this year. Every sec-tor of Montenegro has made a great headway. Structural re-forms have been conduced in education, science, health,pension system and social welfare. The government will con-tinue to reform the defense system as well, added Luksic.
FYROM|ENERGYSkopje to spend around €650 mln for energy This year total consumption of energy compared to last yearwill increase by 4%. FYROM will provide 54% of total needsfor energy from home sources and 46% of import for which€650 million would be spent, MRTOnline reported. Theelectricity will be spent by 2.2%, natural gas by 10.1% and oilderivatives by 4.8%. From this month itself, the electricityprice will rise by 6.95% while a hike in the heating price inSkopje is also expected. According to energy balance, theelectricity will be dominant sources of energy with partici-pation of over 40%. The production of electricity from homesources is expected to amount 6.000 GWh and the rest to bepurchased from import. This year the consumption of oiland oil derivatives will witness a rise by 6.6%.
Turkish President Abdullah Gul, left, and Jeddah governor Prince Mishaal bin Majed binAbdul Aziz at Jeddah's King Abdul Aziz airport upon the latter's arrival in the Red Sea cityfor an official visit to Saudi Arabia on August 13, 2011. Turkey and Saudi Arabia recently re-iterated their commitment to boost trade. |AFP PHOTO/AMER HILABI
Central Bank of Turkey Governor Erdem Basci recentlystated that Turkey will face inflation ate close to 5% this yeardue to a weaker Turkish lira and higher commodity priceseases. He made the statement at a meeting in Ankara whilediscussing the bank's monetary and exchange rate policy in2012, new agencies reported. The governor also said that thetargete inflation would be 55 in 2013 and 2014 in accordancewith the government’s Medium-term Economic Program(OVP). Data released by the Turkish Statistics Institute(TurkStat) showed that the annualised inflation of consumerprices increased to 9.48 % in November from 7.66 % a monthbefore, inching closer to a double-digit mark by the end of2011. Taking into account the optimism of the inflation tar-get, the bank revised its year-end inflation forecast from 6.9
% to 8.3 %. Turkstat attributes the base effects on prices ofprocessed food items and the weakening of the lira for thesoaring inflation. The base effect from hikes in October ofthe private consumption tax (OTV) on certain products suchas cars, mobile phones, tobacco and alcoholic beverages alongwith soaring prices for crude oil in global markets also en-tailed November's high figures. Under Basci leadership thebank plans for monetary tightening to stem the rise in infla-tion and is confident that its measures will yield a fruitful out-come. “We will start seeing the impact of this tightening oninflation from the first months of the year,” he said but warnedthat the annualized inflation rate will remain high for somemore time due to the accumulated effects of exchange ratemovements.
Central bank confident inflation to near 5% targetTURKEYECONOMY
Addressing Turkish ambassadors inAnkara, Turkey’s Culture andTourism minister Ertugrul Gunaysaid that despite political turmoil thecountry witnessed more than 30 mil-lion tourists in 11 months of 2011, ex-ceeding their expectations, Zamanreported. Gunay was glad to an-nounce that for the first time Turkeyhas registered 30 million tourists in
2011 which is an important edge intourism history of the country. Lastyear Turkey lost many tourists due tothe unrest sweeping across the Mid-dle East but the number of touristsvisiting Turkey relatively increasedcompared to 2010. Gunay said thatthe global financial crisis I past theeyears has been affecting countriesacross the globe but the tourism in-
dustry of Turkey was least affected.Gunay said Turkey hosted only 13million tourists in 2003 and now thenumber reached to 30 million todaywhich was possible due to the pro-gressive efforts of his government. Theminister said Turkey received 28.6million tourists in 2010 and manytourist reservations were canceled in2011 because of the Arab Spring.
30 million tourists visit Turkey in 2011TURKEYTOURISM
Saudi, Turkey sign deals to boost trade, investment
TURKEYDIPLOMACY
UKRAINE · MOLDOVA · BELARUSPage 28 |New Europe NEIGHBOURHOODJanuary 8 - 14, 2012
Russian gas monopoly Gazprom and Moldovan-Russiancompany Moldovagaz have extended the terms of the gassupply and transit contracts in force until the first quar-ter of 2012, Gazprom said in a press release.
Moldova hopes Gazprom will lower prices for gas,which the former Soviet republic now buys for $400 per1,000 cubic metres. "The expert group that represents theinterests of Moldova is striving to turn Russia's attentionto the formation of mutually acceptable economic rela-tions. The government of Moldova is trying to negotiatea more acceptable price for gas imports, as in 2011 thepurchase price increased by almost 35%, the tariff rose,which resulted in a reduction of consumption. The pub-lic is forced to economize on gas, and a number of largeenterprises have stopped using it," a Chisinau newspaper
quoted the chief executive of Moldovagaz, AlexanderGusev as saying in December. Moldova's governmentconsiders the price of gas imports to be "onerous for thecountry's economy and population," and is asking for adiscount. As of the end of September, Moldovagaz hadaccumulated a debt of $88 million since the start of 2011for gas supplied by Gazprom.
In December 2006 Gazprom and Moldovagaz signedthe gas supply contract for 2007–2011. Pursuant to thedocument, between 2008 and 2010 the price was calcu-lated under the formula based on market principles, whilediscount rates were used in determining the price between2008 and 2010.
Gazprom and Moldovagaz annually enter into con-tracts for natural gas transit across Moldova.
Gazprom: Gas contracts with Moldova extended
MOLDOVA
ENERGY
BELARUS|MEDIA
Minsk to restrictInternet access Belarus will curb access to a range of foreign and domesticwebsites deemed "extremist" in what appears to be a move byauthorities to further restrict the opposition's activities. Thenew law, which was expected to come into force on 6 Janu-ary, will also require local Internet vendors to register in theex-Soviet republic and imposes fines on companies sellinggoods in Belarus through foreign websites. Under the newregulations, cybercafes are required to monitor their cus-tomers' Internet use and record and store personal informa-tion about those users and the sites they visit. And individualswho let others use their computers can be fined if the usersvisit foreign or banned sites. The restrictions come amid anexpanding crackdown on the opposition by authoritarianPresident Alexander Lukashenko. His administrationclaimed the law in no way limit people's access to foreignwebsites and is only meant to ensure "transparent" retail op-erations and help protect people from dangerous and porno-graphic sites. "This does not limit citizens' use of Internetresources in any way. Their access to foreign websites is notbeing restricted," said a statement from Lukashenko's officialinformation and analysis centre. But foreign-based opposi-tion websites said the list of organisations deemed extremistincludes leading human rights centres Vyasna (Spring) andCharter 97. The wave of restrictions was extended last yearfollowing his controversial re-election and now includes aban people's right to stage any form of protest on the streetswithout the authorities permission.
BELARUS|DIPLOMACY
Obama approves new sanctions against BelarusOn 3 January, US President Barack Obama signed into lawthe Belarus Democracy and Human Rights Act of 2011,which envisions new sanctions against Belarus, WhiteHouse spokesman Jay Carney was quoted as saying by thepress. The bill, approved by the Senate in mid-December,expands the list of Belarusian officials and law enforcementofficers that will face visa restrictions and financial sanctions.It also calls for on the International Ice Hockey Federationto “suspend its plan to hold the 2014 International WorldIce Hockey championship in Minsk until the governmentof Belarus releases all political prisoners.”
BELARUS|ENERGY
No petrol duties for Customs Union, Minsk saysThe Ministry of Taxes and Levies of Belarus has deniedinformation that on 1 January, Minsk imposed customsduties on imports of petrol, diesel and domestic fuel fromthe Customs Union. "No levying of duties in mutual tradewith the Customs Union can be made within a single cus-toms territory of the Customs Union," the ministry said.It noted that the legal entities and individual entrepre-neurs, engaged in import of gasoline, diesel and domesticfuel of all types in vehicles into the territory of Belarus,are required to pay for it in the national budget, BelTAreported. Cash payments are made with acquisition ofcontrol symbols for marking the supporting documentson the oil fuel imported into the territory of Belarus byroad from countries with abolished customs control andcustoms clearance. It allows controlling the legality of theimportation of petroleum liquid fuel. Paid monetary re-sources are to be offset against tax liabilities unsettled, fu-ture payments to the national budget and the funds to beincluded as a condition for the import of the next party offuel. They can also be returned to the payer's account afterthe import of petroleum liquid fuel.
On 5 January, Ukrainian prison offi-cials said that the transfer of formerprime minister Yulia Tymoshenkofrom a Kiev penitentiary to one inKharkov was lawful. Tymoshenko'sdaughter and defence lawyer, Euge-nia Tymoshenko, called the movefrom the detention centre to thepenal colony "absolutely outrageousand illegal," ITAR-Tass reported on3 January. Eugenia said she was notinformed of the move at the time.
The State Penitentiary Servicesaid that the Pecherskyi DistrictCourt of Kiev's decision to sentenceTymoshenko to seven years in prisonhas come into effect in accordancewith the Kiev Appeal Court's deci-sion of 23 December 2011. In con-nection with this, the PecherskyiDistrict Court issued a directive onimplementation of the sentence andsent it to the Lukianivka remandprison. "According to Article 87 ofthe Penal Code of Ukraine, personssentenced to imprisonment are to besent to the place where they willserve their sentence no later than tendays after the sentence comes intoforce," the State Penitentiary Servicesaid.
Simultaneously, according to theState Penitentiary Service, the inves-tigator in charge of the other crimi-nal case in connection with whichdetention of Tymoshenko was or-dered has informed the administra-tion of the Lukianivka remandprison that there is no need to keepher at the remand prison. "Thus, thetransfer of Tymoshenko Yu. V. fromthe Lukianivka remand prison to theKachanivska women's penal colonyin Kharkiv on 30 December 2011was in accordance with the activelegislation and within the period es-
tablished by law," the State Peniten-tiary Service said in the statement. Intotal, the State Penitentiary Serviceinforms that 209 prisoners whosesentences had come into effect weretransferred from the Lukianivka re-mand prison to the relevant penal in-stitutions during the week before theNew Year in accordance with theprocedures established by law.
Defence counsel Serhiy Vlasenkosaid the former prime minister'shealth has deteriorated in prison."Despite the bravura statements bythe Health Ministry, she cannotmove unaided, so it is difficult for meto judge what they mean by satisfac-tory health condition. Probably, themain task of the Health Ministry'smedical commission is to misinformthe international community aboutthe health condition of Yulia Ty-moshenko," he said outside theprison on 5 January.
On 5 January, more than one hun-dred supporters of Tymoshenkoprotested outside the prison whereshe is being held, calling for her to befreed.
The former premier was sentencedon 11 October to seven years inprison for abuse of power during hertime in office. Tymoshenko’s convic-tion was followed by charges of fi-nancial crimes, allegedly committedwhile she was head of the statepower company in the 1990s, whichcould keep her in prison even if theoriginal case against her is over-turned. The Tymoshenko affair hassparked tensions between Kiev andthe European Union which suspectsthat the probes against the opposi-tion leader, which started soon afterthe election of Ukrainian PresidentViktor Yanykovich, are politicallymotivated. Yanukovych has deniedsuch claims.
Tymoshenko prison transfercontested by defence
UKRAINEJUSTICE
Supporters of Ukraine's jailed former prime minister Yulia Tymoshenko gesture as theytake part to a protest outside the women's prison where she is being held, in Kharkiv on 5January 2012. |AFP PHOTO/MIKHAIL KUCHNEV
KAZAKHSTAN · TAJIKISTAN · TURKMENISTANNew Europe | Page 29NEIGHBOURHOOD
January 8 - 14, 2012
In December 2011 the Russian au-thorities offered the Tajik governmentthe opportunity to discuss issues relatedto indicative balance of Russian oilproduct deliveries to Tajikistan inMoscow. The proposal was initiatedduring visit of the Tajik PresidentEmomali Rahmon’s to Moscow to at-tend the informal summits of the CIS,the Eurasian Economic Community(EAEC) and the Collective SecurityTreaty Organisation (CSTO), Asia-Plus learnt from the Ministry of En-ergy and Industries (MoEI).
A source at MoEI said that Tajik-istan’s government is currently consid-ering the Russian proposal and a Tajikdelegation is expected to depart forMoscow in few days. However a sourceat the government said it is still unsurewho will head the Tajik delegation andexact date of the visit to Moscow is alsonot confirmed yet.
“The Tajik side has prepared a draftgovernment-to-government agree-ment, which specifies the indicativebalance of Russian oil product deliver-ies to Tajikistan and it is precisely this
document that will be discussed inMoscow,” said the MoEI source. Al-though the export duty issues arelinked with these issues but will not bediscussed at the meeting and it cannotbe ruled out that these issues will beconsidered as well.”
The draft document states that a cer-tain volume of oil products that will beexported to Tajikistan free of tariffs, ac-cording to a source in the government.MoEI recalled that the indicative bal-ance was prepared by the Tajik side insummer 2011, but the Russian author-ities did not agree with the volume ofduty-free oil products stated in the doc-ument. In summer the figure men-tioned was some 2 million tons but itwas reduced to little more than 1 mil-lion tons. It was reported that Tajikistanwas exempted from paying Russiantariffs on oil and gas exports from1995-2010.
On May 1, 2010, Russia cancelledTajikistan's tax exemption and the Russ-ian government has regulated the exportduty on light oil since the beginning ofthis year. Under the Russian govern-
ment’s decree, export duty on light oilwas decreased from $271.50 per ton to$259.30 beginning on November 1,2011. The export duty for gasoline wasdecreased from $370.20 to $353.70.This was the fourth decrease in exportduty for Russian oil products in 2011.
The first decrease in export duty forRussian oil products was reported onJuly 1 last year, when the export duty onlight oil decreased from $309.60 to$298.20 per ton and the export duty forgasoline was decreased from $415.80 to$400.50, the second decrease was re-ported on August 1, when Russia de-creased export duty on light oil from$298.20 per ton to $293.60 and the ex-port duty for gasoline from $400.50 to$394.40, and the third decrease was re-ported on October 1, when Russia de-creased export duty on light oil was from$297.00 per ton to $271.50 and the ex-port duty for gasoline was decreasedfrom $399.00 to $370.20. Russia nowaccounts for some 90% of Tajikistan’sfuel imports and an average gasolineprice in Tajikistan has increased report-edly risen 59% since early 2011.
Tajikistan, Russia discuss fuel issue in Moscow TAJIKISTANRELATIONS
A Commonwealth observer mission will be headed byChairman of the CIS Executive Committee, SecretarySergei Lebedev for monitoring the presidential elections inTurkmenistan scheduled to take place on 12 February thisyear, Turkmenistan.ru learnt from the CIS Executive Com-mittee's website.
Apart from national observers monitoring of the forth-coming elections in the country will be carried by observersand experts from other states and reputable international or-ganisations, which 'confirms the openness of Turkmenistanand its interest in an equal constructive partnership'. The in-cumbent president of Turkmenistan Gurbanguly Berdy-muhamedov, nominated from public organisations, will takepart in the elections as well as other candidates. The presi-dent announced that elections this year will be held on ademocratic, alternative basis, as per principles of democracy,
openness and transparency. CEC of Turkmenistan informed that two more action
groups were registered. Among them a group for the nom-ination of Yagmyr Orazov, director of the research instituteof cotton and Begench Bordzhakova, governor of the Gur-bansoltan eje district of the Dashoguz region. EsendurdyGayypov, chief of the Lebapgurlushyk industrial associationunder the auspices of the Ministry of Construction, was alsonominated as a candidate at a meeting of members of thecountry's Architects Union.
The Constitution states that eligibility criteria for a Pres-ident is that he must be a citizen of and born in Turk-menistan, aged at least 40 and no older than 70 years, knowthe state language, have resided in Turkmenistan over thepast 15 years and have worked in state bodies, public asso-ciations, enterprises, institutions and organisations.
CIS observers to monitor upcoming elections in Turkmenistan TURKMENISTAN ELECTIONS
TURKMENISTAN|2011
Turkmenistan sum up 2011 results An expanded cabinet meeting was recently held in Turk-menistan to summarise 2011 results and outline tasks onsocio-economic development of the country for this year,Turkmen President Gurbanguly Berdimuhamedov saidin a statement, Turkmenistan.ru reported. The Presidentalso reported that the Cabinet of Ministers had 53 meet-ings in 2011, which is one meeting more than the previ-ous year. In addition, 24 video-teleconferences and 15meetings on various issues were held. The Presidentstressed that the issues were successfully resolved whichwas possible due to the proper organisation of work andtaking the right decisions by the Cabinet. He was im-pressed with the inspired, purposeful and coordinatedwork of the cabinet staff. In a New Year message to thenation, the President stressed that the outgoing year wasmarked by "the wide variety of unforgettable events inthe life of the country.” “As you know, in 2011 we havedone a great job for the sake of prosperity of our belovedhomeland, aspiring like a fast horse to new heights ofprogress. We have continued radical reforms in all spheresof life and laid the groundwork for future large-scaletransformations,” he said. The speech was broadcast onall national TV and radio channels, as well as TV screensinstalled in the central squares of the capital and regionalcentres. Berdimuhamedov said that “as a whole, the yearof 2011 finished with great successes and labor victories.”This year he said as per will of the Almighty, Turk-menistan would continue the rapid pace of the large-scaletransformation work in all areas, and further expand thescope of work. The head of state wished that for each cit-izen of Turkmenistan the year of 2012 would turn into“the year of happiness and prosperity, the year of realizedhopes, good luck and great successes.”
KAZAKHSTAN|ECONOMY
Kazakhstan’s property market to grow in 2012Experts recently announced that mortgage market inKazakhstan will yield positive changes this year mainlydue to soaring demand in the real estate market andother positive incentives, Gazeta.kz reported. Accordingto experts, the current situation in the country’s real es-tate market is demonstrating a positive trend. It was re-ported that last year the number of transactionsincreased by 10-15%. In addition, the Customs Unionsaw an inflow of Russian customers in the real estatemarket of Kazakhstan. The market participants said thatpeople can now easily afford mortgage loan rates due toseveral segments which are expected to revive this year.Andrei Timchenko, Managing Director, Kazkommerts-bank JSC said, “There is currently no speculative bubblein the market. So, the market’s recovery is due to real de-mand or rising incomes of people, internal migrationand also international migration.: He also highlightedthat growing number of people are also shifting to largecities like Almaty and Astana and the demand for hous-ing is increasing accordingly. It was recalled that priorthe onset of crisis, Kazakhstan was leading in real estatesales with the soaring housing market along with theprocess. However the crisis entailed a slump in apart-ments price. Andrei Timchenko, Managing Director,Kazkommertsbank JSC said, “Rates won’t increase forsure. But I don’t think it they will decline either. Nowthe banks offer an average annual interest rate at 12.5%to 14.5%. This is significantly lower than the rates 2-3years ago during the recession when rates were at thelevel of 18% and 20%.” Foreigners are exempt from anyban on purchasing housing or lands in Kazakhstan withexception to applied to agricultural lands.
Russian President Dmitry Medvedev (R) and Tajik President Emomali Rahmon (L) are fuelling more discussions.| EPA/VLADIMIR RODIONOV
US has offered $1bln to Kyrgyzstan for 20 years
UZBEKISTAN · AZERBAIJAN · KYRGYZSTAN
Page 30| New EuropeNEIGHBOURHOODJanuary 8 - 14, 2012
The United States has offered $1 billionto Kyrgyzstan for 20 years, US Ambassa-dor Pamela L. Spratlen was quoted astelling citizens of the former Soviet re-public. She recalled that US PresidentGeorge H.W. Bush on December 1991had officially recognised Kyrgyzstan’s in-dependence. Bush expressed eagerness ofUS to establish diplomatic ties and forgenew relations with Kyrgyzstan.
The ambassador said that since the es-tablishment of diplomatic relations be-tween the two countries 20 years ago, US
have contributed over $1bn in assistancethrough the United States Agency for In-ternational Development (USAID) andother US government institutions. Hestressed that US will strictly adhere to co-operating with the government and peo-ple of the Kyrgyz Republic to meet themost urgent development needs through-out the country. With the improvementof the business environment, both coun-tries expressed hope to expand trade andinvestment ties.
On 1 February 1992, the US flag was
raised above the first foreign embassy inBishkek. The ambassador said that USSecretary of State Hillary Clinton has at-tributed Kyrgyzstan’s achievements to“the strong character of the Kyrgyz peo-ple, the incredible resilience shown sinceindependence and the path of democracychosen by this Central Asian nation. “Youare pioneers. Look around you in this re-gion. You are trying to do something thatno one else has done,” Clinton said.Presently, Kyrgyzstan has a new constitu-tion and a government.
KYRGYZSTANAID
AZERBAIJAN|DIPLOMACYForeign Minister meets outgoing US ambassadorAzerbaijani Foreign Minister received outgoing US am-bassador to Azerbaijan Matthew Bryza. During themeeting, Mammadyarov said he was pleased with the de-velopment of bilateral relations between Azerbaijan andUS, news agencies reported. Mammadyarov highly as-sessed Bryza’s diplomatic activity in Azerbaijan andwished successes to Bryza in his future activities. "Ourembassy has done good work in establishing strategicpartnership and friendship between the US and Azer-baijan in the past year," Bryza said in Baku to review hisyear as ambassador to Azerbaijan. Bryza noted that hefunctioned for the extension and development of rela-tions between the countries and thanked the ForeignMinistry for the beneficial co-operation. The ambassadorsaid that both countries saw most development last yearin the energy and security sectors describing security, en-ergy and domestic reforms as the most strategically in-teresting areas in bilateral relations. The ambassadordescribed work in Azerbaijan as very interesting and dif-ficult, but at the same time easy. He said it was easy inthat, whatever the issue, embassy staff met with an openapproach of partnership from the Azerbaijani side. “Sev-eral defence programmes were carried out in the field ofsecurity. The process of creating a Caspian security infra-structure has been stepped up. The United States sup-ported the establishment and strengthening of the CoastGuard as part of its co-operation with Azerbaijan.” Heinformed that at least 5,000 US planes use the Azerbai-jani air corridor every year to deliver cargo to Afghanistan.
UZBEKISTAN|TAXES Karimov offers tax preferences to mediaUnder a decree recently inked by President of UzbekistanIslam Karimov, delivery services of the media and books areexempt from value added tax. This came into force from 1January this year. The aim of the decree is to provide addi-tional tax benefits and preferences for the further develop-ment of the media, Uzbekreport.com re p o rted. PrimeMinister Shaukat Mirziyoyev is in charge over executionof the decisions. The measures aim to create favourableconditions and prerequisites for further development ofmass media, publishing houses, printing companies andorganisations for the dissemination of press, independentmedia, strengthening their role in the development of in-formation society and the establishment of public controlover the activities of state power and control.
KYRGYZSTAN|ENERGYGovernment to work out energy security strategyNatalya Nikitenko, parliament member of Kyrgyzstan re-cently said at a meeting that the government should beentrusted with a task to work out complex strategy for en-ergy security, news agencies reported. The minister statedfull preparedness to winter though repair was not made forages and the energy sector wasn’t developed. He pointedout irregularities in electricity supplies. Another parlia-ment speaker, the deputy Asiya Sasykbaeva noted AtaMeken party being the member of the majority coalitionwill have impact on the situation from within. She stressedthat officials responsible for electricity, heating and gassupplies to houses of townspeople should bear personalresponsibility adding that a new development strategy forthe capital must be developed for decades ahead. Sheurged that the officials are required to take stock of citizensliving not only in Bishkek but in its suburbs as they are ad-ditional consumers of heating and electricity.
Azerbaijani President Ilham Aliyev recently issued and also in-structed to approve the National Action Plan to improve theprotection of the rights and freedoms in Azerbaijan, newsagencies reported. The statement was made at a recent pro-gramme which was held in Azerbaijan on the successful workof building the rule of law, development of civil society, effec-tive protection of human rights and freedoms. In 1998, Aliyevapproved the first in independent Azerbaijan fundamentaldocument to ensure the country’s human rights, the State Na-tional Programme.
"National Plan of Action for the Protection of HumanRights in Azerbaijan” passed in 2006 marked a new stage in the
process of human rights and served as a foundation of a newuniversal and regional co-operation strategy entailing the cre-ation of partnerships between civil society and state. TheOmudsman of Azerbaijan recommended guiding the activitiesof the Coordinating Working Party on the implementation ofthe programme; the Presidential Administration requested anevaluation of the results of a National Action Plan and submittheir suggestions for improving this work.
In the document, the Milli Majlis, the Supreme Court, theProsecutor General, the Ombudsman of Azerbaijan, JudicialCouncil, Bar Association, the Broadcasting Council of Azer-baijan encouraged to actively participate in the programme.
Aliyev approves National Action Programme
AZERBAIJANHUMAN RIGHTS
A round table which discussed the con-ceptual directions of the development ofrenewable energy sources (RES) inUzbekistan, was recently organised bythe parliamentary faction of the SocialDemocratic Party of Uzbekistan Adolatin collaboration with Uzbekenergo,Uzbekreport.com reported. The meetinggarnered leading scientists and experts inthe field of energy and energy efficiencyof the Academy of Sciences, representa-tives of relevant ministries and depart-ments, enterprises and organisations.
The Chairman of the Board ofUzbekenergo presented a report on con-ceptual directions of the developmentand use of renewable energy sources.Uzbekistan has created a sound scientificand technological base of large-scale useof renewable energy. Some specific ex-amples affirmed high efficiency of theuse of renewable energy sources, domes-tic developments, which are quite popu-lar outside the country. Comparing withthe fuel energy, the speaker gave ananalysis of the development of technolo-gies and equipment for renewable energy,hydropower resources, solar and windpower using systems, combined renew-able energy.
Achievements of the company to userenewable energy were shown with spe-
cific examples. Especially wind powerplant with capacity of 750 kW in thedeep lake, solar collectors and panels forheat and electricity in Tashkent,Samarkand, Navoi, and other areas aresuccessfully operating. It was reportedthat Uzbekistan has more than 150plants for heat and energy supply basedon renewable energy.
According to lawmakers and scientists,despite number of normative documentsregulating the relations in the field of re-newable energy, practical steps to create
new, unique technologies and innovativeproducts bear only separate and non-sys-tem character. This is mainly due to lackof proper regulatory framework and in-centives for the development of clean en-ergy. At the same time, relatively lowprices for traditional energy make re-newable energy economically attractive.At the end of the meeting, recommen-dations regarding the development of al-ternative energy were made. In addition,improvement of legislation in the afore-said areas was also discussed.
Tashkent mulls renewable energy sources development
UZBEKISTANENERGY
Solar panels at solar farm. Solar collectors and panels for heat and electricity in Tashkent,Samarkand, Navoi, and other areas are operating. |AFP PHOTO/PRAKASH MATHEMA
RUSSIA · GEORGIA · ARMENIANew Europe |Page 31NEIGHBOURHOOD
January 8 - 14, 2012
On 31 December, Russian PrimeMinister Vladimir Putin sent NewYear’s greetings to all Russians, eventhose protesting his 12 years in powerand his plans to return to the presi-dency for at least six more years. Putinsaid sarcastically that he wished well-being and prosperity “to all our citi-zens regardless of their politicalpersuasion, including those who sym-pathise with leftist forces and those
situated on the right, below, above,however you like.”
Two demonstrations in Decemberdrew tens of thousands in the largestshow of discontent since the SovietUnion fell in 1991. A third demonstra-tion has been set for 4 February.
On 31 December, at least 60 demon-strators were detained in Moscow afterthe latest wave of protests against Putinand his ruling United Russia
party. Chanting, “Russia will be free,” op-position activists took to Moscow’s Tri-umph Square on 31 December todemonstrate for their right to assembly,which is guaranteed by Article 31 ofRussia’s constitution, news agencies re-ported. The government refused to sanc-tion the rally, and protesters were met byhundreds of police in full riot gear. Manywere forcefully taken away into awaitingpolice vans.
Russian Prime Minister Vladimir Putin wishes the nation a happy New Year at the Novo-Ogarevo residence outside Moscow, Russia 31 December 2011.|EPA/ALEXEY DRUZHINYN/POOL/RIA NOVOSTI
RUSSIAPOLITICS GEORGIA|DIPLOMACY
Saakashvili: Ties with Ankara vital for TbilisiA Turkish delegation recently had a meeting with Geor-gian President Mikheil Saakashvili in Tbilisi. The delega-tion comprised of representatives of ruling party of justiceand development and envoys of the representatives ofPublic republic party, the Georgian President's office said.During the meeting, Saakashvili said present ties betweenTbilisi and Ankara are important for Georgia. He saidTbilisi considers Turkey as great friend both politically andeconomically. In course of talks with members of TurkishGrand National Assembly, Saakashvili spoke about rela-tions between the two countries and joint projects.Saakashvili stressed bilateral relations existing between thetwo countries and leaders of the two countries and reiter-ated the importance of strategic relations with Turkey.Saakashvili called the free trade agreement, signed be-tween the two countries in 2007, important as a result ofwhich, Turkey became number one foreign trade partnerof Georgia. “Trade between the two countries increasespersistently in both sides which is important for the de-velopment of economies of Georgia and Turkey,” he said.
ARMENIA|DIPLOMACYKuwait's first envoy submits credentialsArmenian President Serzh Sargsyan recently received cre-dentials of the newly appointed Kuwaiti Ambassador to Ar-menia Basam Muhammed al-Qabandi. Al-Qabandi praisedArmenia's firm position towards the issues of the State ofKuwait outlining the expansion of bilateral relations betweenthe two countries. In turn, Sargsyan wished the friendly Stateof Kuwait further progress and conveyed his greetings to itsleaders. Sargsyan congratulated the Kuwaiti envoy on his ap-pointment and hailed the ties between Armenia and Kuwait.He stressed that Armenia attach great importance to devel-oping relations with the Arabian Gulf nations. The openingof Armenia's Embassy in Kuwait and Kuwait's Embassy inArmenia reflects the willingness of the nations for compre-hensive development of bilateral relations, he said. Ambas-sador al-Qabandi also had talks with Armenian ForeignMinister Edward Nalbandian.
ARMENIA|ECONOMYPensions, poverty benefits increaseThe government of Armenia recently gave a nod to rise inmodest pensions and other social benefits paid to hundredsof thousands of people. From this month the averagemonthly pension in Armenia will rise from AMD 28,700 to31,300 dram ($82), Armenia Liberty.org reported. The gov-ernment said that the minimum pension will be raised byabout 24% to 13,000 dram. Retirement benefits are beingprovided to more than 500,000 Armenians, or about 16% ofthe country’s population. Prime Minister Tigran Sarkisian’scabinet also announced a 9% rise in the average amount ofpoverty benefits paid to some 105,000 low-income families.This year it will stand at 29,350 dram a month. Labour andSocial Affairs Minister Artur Grigorian said this year severalpoor families will be included in the social security net as thegovernment has eased eligibility criteria for this assistance. Inaddition, the government also plans more than 20% rises ineven more modest monthly benefits paid to people with dis-abilities and families of deceased army soldiers. Meantimeoppositions slammed the decision of the government as theyargue that social security payments will still be below theper-capita poverty line set by the government entailing in-creased cost of life in Armenia. “I do realise that the amountof pensions is such that we still cannot declare that we paypensioners enough to meet their needs,” Grigorian said.
Putin sends New Year’s greetings to all Russians
Oil output in Russia edged up 1.2% to reach a new post-So-viet high in 2011, as the world's top crude producer eased taxburden and launched pipeline flows to China, the Russian En-ergy Ministry said on 2 January.
Preliminary data from Russia's Energy dept shows averageoil production at 10.27 million barrels for 2011, peaking at10.35mn in both October and November. Of that, approxi-mately, 7.2mn was exported as either crude or product. “Thatmakes Russia both the world's biggest producer and the biggestexporter. The average price for Urals export in 2011 was $109.3p/bbl. That works out at almost $800mn every day for the totalvalue of oil exports and over $1 bn, on average, every day in2011 when the value of gas exports is add,” Chris Weafer, chiefstrategist at Moscow’s Troika Dialogue, wrote in an e-mail toinvestors.
Crude futures traded near their highest price in almosteight months as investors speculated that tension over Iranwill tighten supplies. On 3 January, the futures climbed4.2% to $102.96 per barrel in New York, the highest clos-ing level since May 2011, before slipping 0.4% to $102.56a barrel on 4 January.
Russia aims to maintain annual oil production at around510mn tonnes, or just over 10mn bpd, in the next 10 years. Italso sees its crude oil export flat at 250mn tonnes in 2012.
The main driver behind the increase was the new Vankoroilfield, developed by Russia’s Rosneft, which reached a pro-
duction target of 300,000 bpd last year. The field is slated asthe main source of Russia's pipeline export to China via theEast Siberia - Pacific Ocean (ESPO) link, which is shipping300,000 bpd of oil to Daqing in China from Russia'sSkovorodino. In 2012, Russia plans to finish the second stageof ESPO, which will terminate at the Pacific port of Kozmino.This year is also expected to see the launch of the Baltic portof Ust-Luga.
On 29 December, the oil arm of Russia's gas export mo-nopoly Gazprom - Gazprom Neft - said it plans to increasetotal hydrocarbon output by 4% in 2012 to 59.6mn tonnes.Gazprom Neft said in a statement its 2011 production stoodat 57.2mn tonnes of oil equivalent, more than 7% above 2010levels.
“We have approved a massive investment program for 2012that will allow record oil output and the continuation of refin-ery modernisation,” Chairman Alexei Miller said in the state-ment. Investment in the Omsk and Moscow refineries is set toreach 25 billion rubles ($780 million) in 2012 through 2014.Gazprom Neft plans to expand in Iraq, Venezuela and Africaand develop Siberian fields. Gazprom Neft’s SeverEnergiaArctic gas and condensate project with Italy’s Enel, ENI andRussia’s Novatek is due to begin production in 2012. The com-pany will also add more than 20mn tons by 2020 from its shareof output in Russian fields at Orenburg, Messoyakha andNovoport.
RUSSIAENERGY
Record year for oil production in Russia
KASSANDRABelgian cops are planning to charge€100 to take drunks home. How willthis look on expenses?
Page 32 | New EuropeJanuary 8 - 14, 2012
Once Upon A Time in Brussels ...
Follow me on twitter @Kassandra_NE
The Brussels austerity psychosis should be curedWith the ‘Greek tragedy’ still unfolding,following two years of austerity pro-grammes that have sent the economy toits deepest-ever recession and almostcompletely dissolved political and socialcohesion, the final outcome is that theend of 2011 found the government ac-counts in a worse position than at the endof 2010.
Obviously, there is something (every-thing?) wrong with the policies imposedon Greece by its creditors, the EU-ECB-IMF troika, with these now in charge ofthe country's rehabilitation programmedrafted by the International MonetaryFund (IMF) and the European Commis-sion.
Unfortunately for the Eurozone, it isnow not only Greece that is facing moredead ends than a year ago. Italy is bor-rowing money at ridiculously high ratesand its economy is heading also for adeep recession.
And that is not all. The new Spanish gov-ernment, under Prime Minister MarianoRajoy, has just revealed that the 2011deficits must have exceeded the targets byfar. Instructions from Brussels led the newprime minister to introduce a new pack-age of austerity measures in a country
with an overall unemployment rategreater than 20% of the working age pop-ulation, and in the region of 50% foryoung people – a clear recipe for socialunrest and riots.
Then what are those people in Brussels?Are they lunatics or what? In any casethey are not 'scientists'.
It is not 'economic science' that powers
the EU Commission's dictums but ratherideological convictions, which dictatethat unemployment is not a bad thing forevery economy, leading as it does to a re-duction in real wages and improved com-petitiveness. Ollie Rehn sets theideological pace in Brussels. He believesthat his ideas are solidly based on eco-nomic science but he is totally wrong. Heis just an idealist with deep austere con-victions that threaten us all and he must
see a psychotherapist soon. Probably as achild he was punished by his parents foreating too many sweets and now he hasto redeem himself by making us all payhis bill.
For God's sake somebody tell him thatthe European Mediterranean region is thecradle of our Western civilisation. Hishome country Finland owes a lot to theGreeks and the Italians. Interestinglyenough however, something seems tochange in Paris, probably in Berlin andBrussels too, and now a lot of people havestarted talking about employment. A goodchange from focusing in banks' profits.
Finally it is all politics, and this will bemade clear in the 9 January meeting be-tween French President Nicolas Sarkozyand Chancellor Angela Merkel. Well-in-formed sources say that Merkel andSarkozy will come up with new ideas,about supporting employment. Germansseem to have been finally convinced thatother people too should have employ-ment.
Already, EU Council President HermanVan Rompuy has got the message and hascalled an extraordinary meeting of the 27EU leaders on 30 January, with 'employ-ment' being the only item on the agenda.
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A Commission official vetting national budgets for suitable austerity measures.
