new europe print edition issue 1003

NEWEUROPE19th Year of Publication | Number 1003 | 21 - 27 October, 2012 | € 3.50 www.neurope.eu

At a time where my fellow Europeanmembers of the Conservative partyhave just gathered in Bucharest for theEuropean People’s Party (EPP)Congress summit, it is important toestablish some facts around the contextin which this meeting took place.

Romania is a young democracy witha constitution forged from the lessonswe learned after Ceausescu’s dictator-ship. The constitution is specificallydesigned to avoid giving one persontoo much power and to ensure properchecks and balances are in place.Having keenly felt the inherent dangerof the emergence of a strongman with-in the country the Romanian constitu-tion also allows for the suspension of

the President – a rarity amongst otherEuropean countries.

In the eight years of his presidency,Traian Băsescu - a former member ofthe communist party nomenclaturaunder Ceausescu and a socialist leaderuntil 2005 - has progressively takenmore power than any of his predeces-sors – including myself.

To this end, he has not shown arespect for the spirit of the constitutionand its legal terms.

Earlier this year the constitutionalcourt made it clear that he had abusedhis position as president, thereforelegally justifying the procedure for hissuspension which was initiated by theruling coalition of liberals and socialists(USL).

The Tobacco Products Directive is dead,

John Dalli has said.

In an exclusive interview with New

Europe, Dalli, whose resignation as

European Commissioner for Health on

16 October is the subject of ongoing con-

troversy, said that the directive has effec-

tively stalled until 2015.

He denied any knowledge of a Maltese

businessman, who reportedly offered an

industry representative €60 million to

amend the legislation, and which trig-

gered an investigation by the EU’s anti-

fraud body, OLAF.

Speaking about the directive, Dalli said

that the tobacco industry stands to gain

“billions of euros” for each year the direc-

tive is stalled, which, he says is contrasted

with “a gain for the citizens if this directive

is passed through, because hundreds of

thousands of lives will be saved and other

billions will be saved from our health sys-

tems all over Europe. Is so important to

make our health systems sustainable in the

future”.

The directive, which has been in prepa-

ration for months, was due to be launched

imminently, and was due to tackle smoke-

less products as well as new forms of prod-

ucts like flavoured cigarettes.

“We consider that Snus' tobacco prod-

ucts are very dangerous, because they can

be a start-up in the nicotine addictive

process, specially for younger children and

for women. This is why we consider these

type of products as dangerous”, says Dalli.

“But again, I have to say here that who-

ever was proposing a change on the treat-

ment of Snus in Europe is crazy because

having a court case it is political suicide to

try and change anything like this.”

“What I would like to happen is that

the deadline of 22 October is maintained,

so that the Tobacco Directive will contin-

ue on its course, and be debated within the

services of the Commission as is usually

done, and then on to the Parliament and

Council for their deliberations.”

“This is what I would like to happen,

but what is going to happen, is that this

is frozen until a new Maltese commis-

sioner is appointed. It means that taking

into account that new commissioner

would not go to the whole process, even

if he or she was named tomorrow, and

before January. Probably it would take a

month before the new directive is put

through the service consultation, which

means this will push the tobacco indus-

try out of the time frame during this leg-

islature, which means that in 2015 we

will start all over again.”

Industry to gain 'billions' from stalled legislation

What Romanians want

· Page 5

Tobacco directive deadECONOMYCreating a single supervi-sion mechanism for creditinstitutions is an importantstep to strengthen the Euro-pean single market...

·Page 4

·Page 7

ASIAThe recent squabblingbetween China and Japanover the Diaoyu/Senkakuislands constitutes a seriousthreat to the region’s peacefuldevelopment... ·0

ENERGYOn 15 October, EU ministersagreed a new set of sanctionsagainst Iran that ban naturalgas imports from the IslamicRepublic...

·Page 13

DEVELOPMENTSeveral days after the EuropeanUnion received the Nobelpeace prize, its worthiness wasstill being debated. At theEuropean Development Daysconference... ·Page 15

John Dalli in the midst of an interview at New Europe on 19 October outlines his position following

a change to his position which leaves the EU Commission Health Directive in suspended animation.

The soporific calm of the Commission’smidday briefing was disturbed, when thesubject rose of the salaries and perks ofCommission staff.Not something they were willing to dis-cuss. “We’re high flyers, not burger flip-pers” haughtily replied the Commission’sspokeswoman, a remark that showed thedeeply ingrained sense of entitlement forthemselves and disdain for others, espe-cially those in low paid jobs, you knowthe ones most European citizens have totake to survive.

Fries with that?

·Page 32

The Dancers and

the Magician

Page 17

FASHION & STYLE

NE 10 YEARS AGONo, Francois, I don't have a Twitter account, why do you ask?|AFP PHOTO / JOHN THYS

The Shooting Gallery

How things change, or stay the same. The Member States have continued to blame 'Brussels' or 'meddling eurocrats' forjust about everything and it is as true today as it was ten years ago, that many premiers and presidents say one thing inEurope and something very different at home. But these were optimistic times when the prospect of a titular head wasbeing discussed, alongside the preparations for the changeover in the rotating presidency, as Denmark's premier, AndersFogh Rasmussen prepared to hand over to Greece's Costas Simitis. Since then Rasmussen has had a stellar career, Simitisless so. Terrorism was in the news as the UK and US discussed the bombing of a tourist nightclub in Indonesia, but theyweren't going to be distracted from their planned assault on Iraq.Easyjet acquired 180 planes from Airbus, together withthree more operating bases and slots at Gatwick. That year they flew 11 million passengers, last year it was 54 million.

Fighting over banks,banking on a fight

The European Union has agreed on a single superviso-ry mechanism for its Eurozone banks. The deal,reached at latest leaders summit on 18-19 October isseen as a triumph of compromise between France andGermany – the very reason European integration waslaunched in the first place, and, seemingly, one of thereasons why the Union won its recent Nobel peaceprize – and the first step on the way to a full bankingunion.The mechanism (SSM), headed by the EuropeanCentral Bank, will have the power to intervene in anyof the estimated 6,000 Eurozone banks that may findthemselves in trouble; Germany had wanted only to befor the biggest banks, and argued that budget disci-pline should rather be a priority. The SSM can direct-ly inject cash into failing banks, wiping them off thenational budget; a vital development for Spain, forexample, which now has some manoeuvrability aheadof local elections.The decision on the recapitalisation of Spanish bankswill take place in the next couple of weeks, accordingto Eurogroup Chairman, Jean-Claude Junker. TheSpanish government has so far not asked for any finan-cial aid (a pre-requisite for bailout assistance). Duringa press conference following the conclusion of thesummit, Prime Minister Mariano Rajoy, said that,although he feels no compulsion from his Eurozonepartners to take the money, he says it is nice to knowthe safety net is there. Meanwhile, the Greek primeMinister Antonis Samaras said that the summit endsonce and for all speculation about whether or not hiscountry will depart the single currency, and Irelandseems to have been forgotten altogether. The UK is sit-ting on the sidelines, obsessing over the single market.Unsurprisingly, details have not been fully worked out.A legislative framework should be in place at thebeginning of 2013, with, after more negotiations, theECB taking control of bank supervision later in theyear, or early in 2014. France wants the mechanism tobe up and running as early as possible, with Germanywanting to take longer in getting it under way;German banks coming under outside supervision is apolitically sensitive area in the country. The two will beattempting to hammer out a deal over the next weeksand months.Announcing the agreeemnt on banking supervision,both Jose Manuel Barroso and Herman Van Rompuystressed that this was a good deal, or the beginnings ofa good deal, for Europe. The conclusions evoke theNobel peace prize, saying that EU leaders have a per-sonal responsibility now to live-up to the prestigiousaccolade. Let’s hope a certain two member states takeheed.

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© 2012 New Europe all rights reserved. No part of this publication may be reproduced, stored ina retrieval system, or transmitted in any form by any means, electronic or otherwise, withoutexpress permission. The Publishers accept no liability for third party views published, nor damagecaused by reading, viewing or using our content. All information is correct at the time of going toprint, we accept no liabilities for consequent changes.

ISSN number: 1106-8299

02NEW EUROPE21 - 27 October, 2012 ANALYSIS

BRUSSELS – Five years after the out-break of the financial crisis, Europe’s eco-nomic and political situation remainsfragile. A mild recession is expected in Europethis year, and unemployment is on therise. Beyond deficit reduction, we need toimplement a €120 billion ($155 billion)European investment plan, and deepenthe European Single Market to unleashits growth potential.

But we also need other structural meas-ures. The European Union must put anend to the negative feedback loop be-tween individual member states and theirnational banking systems.

Between 2008 and 2011, EU taxpayersgranted banks €4.5 trillion in loans andguarantees. In some countries, the threatof bank recapitalisation with public fundshas resulted in a drop in market confi-dence and a huge rise in interest rates.

The European Central Bank (ECB) hastaken decisive action to break this viciouscircle. Moreover, there is now a consensusthat the 17 eurozone countries need abanking union to accompany their com-mon currency. The European Commis-sion has proposed a single rulebook forbanks’ capital requirements; mutual sup-port between national deposit guaranteeschemes; and Europe-wide rules for re-solving failing banks that place the mainburden on bank shareholders and credi-tors, not on taxpayers.

On 29 June, European heads of stateand government committed themselves tothe creation of a single European super-visor for banks in the eurozone. This isgood news for both financial stability andpublic finances: once the single supervisoris in place, supervision will be more cred-ible and impartial, which is important fordealing with ailing banks and managingtheir return to viability.

The European Commission also putforward a set of legislative proposals to es-tablish the single supervisory mechanismand confer key supervisory tasks on theECB. This proposal must now beamended and approved as soon as possibleby the European Parliament and theCouncil of Ministers if we are to have achance of activating the European Stabil-ity Mechanism (ESM) and proceedingwith the other essential pillars of a bank-ing union.

Further work, however, is still needed inseveral areas:

• The scope of the new supervisory mechanismSome member states favor restricting

European supervision to systemically im-portant banks. But the Commission be-lieves that it should cover all 6,000 banks

in the eurozone. After all, “systemicallyimportant" is impossible to define. Thefailures of banks like Northern Rock,Dexia, and Bankia are reminders thatsmall and medium-size banks can endan-ger the entire financial system. And itwould be inherently unstable to have twosupervisory mechanisms for banks oper-ating in the same market.

• The participation of non-eurozone countries in the new supervisory schemeThe Commission’s proposal confers

powers on the ECB for the supervisionof all banks in the eurozone. For non-eu-rozone countries, the proposals providefor a mechanism to join on a voluntarybasis and submit to the ECB’s authority.But the EU treaties make it complicatedto give these non-eurozone countries fullvoting powers. I do not see any politicalproblem with giving these countries a fullvoice in shaping the decisions of the Eu-ropean supervisor, but creativity will beneeded to find a legally sound and fairsolution.

• National supervisors’ role in the new systemClearly, the European Council has de-

cided on a paradigm shift: powers aremoving to the ECB. But national super-

visors will be members of the board thatwill take key decisions, which they willprepare and implement. In the current ne-gotiations, we can still fine-tune the rolesof the European and national supervisors,but ultimate authority must rest with theECB.

• Non-eurozone EU members that do not want to join the single supervisory mechanismThese countries have expressed con-

cerns about the new powers conferred onthe ECB. In particular, they question theECB's voting rights within the EuropeanBanking Authority, which will remain incharge of developing a single rulebook forall 27 countries in the EU’s single marketand enhancing convergence of supervisorypractices. We need to find ways to pre-serve fully the influence of non-eurozonecountries within the European BankingAuthority.

• Democratic accountability for the ECB’s new supervisory powersThe ECB must, of course, maintain its

full monetary-policy independence, de-spite its new role. So a key question ishow, in addition to giving an importantrole to the European Parliament, nationalparliaments can play their part in over-seeing supervisory decisions.

• TimingAccording to some EU countries, the

Commission’s proposal is too ambitious toenter into force at the beginning of 2013.But an effective single banking supervisoris a prerequisite for the ESM’s direct recap-italization of banks. Only with this possi-bility and strong unified supervision willEurope be in a position to break the viciouscircle between banks’ balance-sheet weak-ness and sovereign debt, and thus resolvethe eurozone crisis. Entry into force in Jan-uary 2013 would bring about supervision bythe ECB of banks that have received or re-quested public funding. Only in July 2013would all banks of major systemic impor-tance be subject to ECB supervision. Theremaining banks would be subject to thenew mechanism at the start of 2014.

Intense discussions are normal for such ahigh-stakes project. Countries like Ger-many, Finland, and the Netherlands areright to argue that rapid progress cannotcome at the expense of the new supervisorystructure’s quality. But EU countries have tostick to the commitment that they made inJune and strike a deal in time for a gradualentry into force in January 2013.

Michel Barnier, European Commissioner for theInternal Market and Services, is a former Frenchforeign minister and minister for Europe.Copyright: Project Syndicate, 2012.

ECONOMY

A new year’s banking unionBy Michel Barnier

03NEW EUROPE21 - 27 October, 2012

ANALYSIS

French President Francois Hollande (C) talks with European Council President Herman Van Rompuy (L) and Belgian Prime Minister Elio Di Rupo at the start

of the second day of an EU summit in Brussels on 19 October. EU leaders agreed to bring banks under EU-wide supervision next year, but failed to pin down an

exact date, dashing hopes of a quick move towards a full banking union.

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ANALYSIS

Creating a single supervision mechanismfor credit institutions is an important stepto strengthen the European single marketand severe the link between the sovereignand banks. By establishing a Single Super-visory Mechanism, the European StabilityMechanism (ESM) will be able to intervenein the direct recapitalization of Spanishbanks as indicated in the Eurosummit con-clusions of 29 June.

For this reason, there is no time to lose inapproving the new single supervision.

The ECB will be at heart of the supervisorymechanism. Conferring on the ECB specifictasks on the banking prudential supervision ofcredit institutions is in line with the institutionaltraditions of the Eurozone where 14 out 17Member States confer prudential supervisionon their central banks.

Some major points need, however, to bestressed.

The first one is the geographical scope ofthe mechanism: the Single SupervisionMechanism should be fully open to the par-ticipation, on an equal footing, of non-euromember states, albeit with appropriate dif-ferentiation of rights and obligation. It willalso be important to preserve the responsi-bilities of European Banking authority inbringing about not only a single rule book,but also uniform supervisory practices (thesingle handbook), in order to prevent fur-ther segmentation of the Single Market forbanking services.

The second point is about the scope interms of business model, size and risk aver-sion of the banks.

It is vital to preserve the singleness of the su-pervisory mechanism. In this regard, the ECBshould be legally responsible for all banks.However, Frankfurt can not supervise directlyall the banks, in particular the smallest ones. Ibelieve that the ECB intervention should becalibrated taking into account the differentcharacteristics of the credit institutions. Aregime in which legal responsibility for super-vising all banks is given to ECB but supervi-sion of the smallest is decentralised to nationalauthorities should be considered. Other options

may also be considered such as the establish-ment of SSM based on the example of the Eu-ropean Competition Network wherecentralised decision-making powers combinewith a degree of decentralisation in imple-mentation.

The third point is about accountabilityand transparency. It is vital to ensure dem-ocratic accountability, among other thingsby appointing executive members of thenew Supervisory Board with the procedurein place for the appointment of the ECBexecutive board; and by making the Super-visory Board fully accountable to the Euro-summit and the European Parliament.

The new supervisory powers will have sig-nificant consequences for individual institu-tions. This will result in increased contact withprivate interests in the banking industry.

Transparency International has rightlypointed out the importance for the ECB tobecome a member of the TransparencyRegister, a EU register established to regu-lated contacts between the EU Parliamentand Commission and interest groups.

It is also important to better manage pos-sible conflict of interest as there is the risk ofa large staff mobility between the ECB andthe banking industry.

The ECB will play a pivotal role in the Sin-gle Supervisory Mechanism. This is an impor-tant acknowledgment of the work done byFrankfurt to stabilise the European monetarysystem. However, we should not forget that giv-ing more powers to the ECB might have sub-stantial implications on the democratic modelof the European Union. The ECB should notbecome a "benevolent dictator" in charge ofmost of the regulatory and economic policiesof the EU while free of democratic control. Astrong ECB needs to be offset by a vibrant sys-tem of check and balances.

Giani Pitella is a Vice President and Mem-ber of the European Parliament for theS&D Group, he is a Member of the Bureauof the European Parliament, is on the Com-mittee for Culture and Education, and aMember on the Delegation for relationswith Albania, Bosnia and Herzegovina, Ser-bia, Montenegro and Kosovo.

ECONOMY

A more transparent and democratic banking union

European Commission President Jose Manuel Barroso (L) and European Council President Herman Van Rompuy

give a press conference at the end of the first day of the EU summit in Brussels on 19 October. EU leaders vowed to

set up a banking union during the course of 2013.

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By Gianni Pitella MEP

Member states need to recognize the presenceof criminal organisations throughout the Eu-ropean Union and develop a unified methodof stopping them, according to the specialcommittee on organised crime, corruptionand money laundering.

Rapporteur Salvatore Iacolino (Italy/EPP)presented key findings from the working doc-ument on organised crime, 15 October. Fourthematic papers covering drug cartels, humantrafficking, cybercrime and asset confiscationwere also offered, and MEPs who participatedin a delegation to Serbia reported back onwhat they saw.

MEPs agreed that while certain regionswarrant more scrutiny than others, no areascan afford a soft approach to the evolving na-ture of organised crime, which has bothspread geographically and infiltrated the lawand financial sector.

"There is not one [EU] country that doesnot have to deal with mafias,” Iacolino said.“There is not a single significant business areathat is waterproof, where there is not any con-crete sign of this phenomenon… gambling,organs, weapons – there’s a huge range of ac-tivity. An entrepreneurial flair is demonstratedin various ways.”

The committee was set up in March 2012following a Parliament resolution in October2011.

Its term lasts for one year and may be re-newed for an additional six months. Its pur-pose is to analyse areas of organised crime –which the thematic papers address – and drawup a comprehensive plan to combat itthroughout the EU.

Iacolino said the EU’s existence has onlymade mafia activities easier because of openborders. The committee’s studies have uncov-ered an alarming number of links betweencriminal organisations in different countries.

No longer are they limited to southern Italy, apopular misconception.

Different legal definitions of organisedcrime limit the efforts to combat it across theEU. Italy has a specific criminal code forthem; countries like Spain and the UK haveloose codes; and Denmark and Sweden haveno specific laws at all. A single legal definitionof mafia-type criminal activity that fully cov-ers the phenomenon is therefore essential, Ia-colino said.

EU treaties allow for the implementationof a principal prosecutor, and the committeesuggests the EU act on this provision. How-ever, the EU also has to be aware that mostcriminal organisations are deeply embeddedin communities, so it will take considerablecoordination with local as well as national au-thorities to actually have any sort of impact.

Once arrests are made, law enforcementalso has to curtail rights of due process to sus-pected criminals. Agencies should be allowed

to seize criminal property before a convictionso that organisations don’t have time to movetheir assets. This is how law enforcementworks already in Italy, the UK and Ireland. Inaddition, convicted mafia bosses should havelimited access to communicate with associ-ates from prison. They are frequently able torun their businesses from behind bars.

Drawing from the Italian and Spanish legalsystems, Mr Iacolino also suggested allowingconfiscated assets, such as buildings or vehi-cles, to be allocated for social uses benefittingthe community.

While MEPs were generally satisfied withthe results of the working document, MEPBill Newton Dunn (UK/ALDE) asked thatthey also address low-level crime and figureout how local police will get the resourcesneeded to fight organised crime. EmmaMcClarken (UK/CRG) agreed that a mech-anism of implementation must be defined be-fore the committee can go forward.

By Andrew Wagaman

CRIME

EU orders hit on organised crimeMafias have infiltrated all member states, committee says

The John Dalli affair has had one significantcasualty for the European consumer; the To-bacco Products Directive. Dalli came to NewEurope's Brussels HQ on the morning of 19October for a followup interview by Alexan-dros Koronakis, challenging the findings of theOLAF investigation, and the discussing the se-rious impact that this affair will have on the to-bacco directive, essentially saying that thedirective is now dead.

It’s been alleged that the Maltese businessmanasked for €60 million to change legislation. Isthe Commissioner bribeable?Absolutely not, and these are really fantas-tic figures.

A critical question, which I know you’ve an-swered before: did you or did you not haveknowledge that this businessman was askingfor money to alter legislation.Absolutely not. I did not have any idea orawareness about any communication about thisissue.

Did you have any knowledge that he wasspeaking to the tobacco lobby on your behalf?I had no knowledge of this communication.

I have in front of me a report issued by PhilipMorris on 9 August, where OLAF DirectorGeneral, Giovanni Kessler, is quoted as sup-porting their position in the Italian parliament,where in June of this year, he said that alteringthe tobacco packaging as of course is expectedin the Tobacco Products Directive would makecounterfeiting easier and cheaper. Can youcomment on that?My only comment on this is that anybody whois investigating Giovanni Kessler knows this asan ambiguous circumstantial evidence.

Let’s talk about this Tobacco Products Direc-tive. Can you tell us some of the key elementsthat were expected from the directive?The key elements, as you have just said, are thebetter control of the package itself by givingmore space were consumers and citizens wouldbe informed on the damage that tobacco isdoing to them, and also on help lines to stopsmoking.Then we are also proposing a control of the

flavourings, what we called characterisingflavourings, that we use on tobacco; not the in-gredients that are required to manufacture thecigarette itself, especially when one is using suchtobacco as the type that is grown in Europe tomake it processable into cigarettes. We are notgoing to touch those, but we are going to touchthe flavourings like, for example, vanilla flavours,chocolate flavours, strawberry flavours, thatmake the cigarettes much more attractive toyounger smokers, specially young females.We are also going to control the small-class to-bacco, like Snus, and also other types of newproducts that the industry is inventing, and thatwe feel can get people addicted. And then suchthings like electronic cigarettes, which we wantto to also regulate as to the amount of nicotinethat the cartridge must contain before it comesa candidate for prioritisation into the market.Another issue that we were considering is theissue of the traceability of the cigarette, so thatwe will make sure that there are no counterfeitcigarettes on the market.

What is the financial gain to the industry forevery year of delay to the directive?I think it is billions of euros what we are talk-ing about here, but there is a gain for the citi-zens if this directive is passed through, because

hundreds of thousands of lives will be saved andother billions will be saved from our health sys-tems all over Europe. Is so important to makeour health systems sustainable in the future.

For how long has this project been prepared sofar?We have been working on this for manymonths. We are now ready to launch this di-rective, with inter-service consultation being thefirst step. We were ready, in fact, on the 25 Au-gust, but it was stopped, and then again it wasstopped, and then again on 22 October, it hasbeen stopped.

On the day the story unfolded we read an opin-ion piece by a representative of Imperial To-bacco suggesting Snus should not be banned,and suspecting the commission has a quote –hatred of tobacco. Is this the case, and can youtell us some more about Snus?The case of Snus, as I have said, is a case wherewe have a court judgement which bans it inEurope except for a Sweden, which has a dero-gation for marketing.We consider that Snus tobacco products arevery dangerous, because they can be a start-up in the nicotine addiction process, spe-cially for younger children and for women.

This is why we consider these type of prod-ucts as dangerous.But again, I have to say here that whoever wasproposing a change on the treatment of Snus inEurope, is crazy because having a court case, itis political suicide to try and change anythinglike this.

What can we expect to happen with the direc-tive now; can you give us a timeline and a bestcase scenario?What I would like to happen is that the dead-line of 22 October is maintained, so that theTobacco Directive will continue on its course,and be debated within the services of the Com-mission as is usually done, and then on to theParliament and Council for their deliberations.This is what I would like to happen, but whatis going to happen, is that this is frozen until anew Maltese commissioner is appointed. Itmeans that taking into account that new com-missioner would not go to the whole process,even if he or she was named tomorrow. Prob-ably it would take a month before the new di-rective is put through the service consultation,which means this will push the tobacco indus-try out of the time frame during this legislature,which means that in 2015 we will start all overagain.

John Dalli: The Tobacco Products Directive is deadCommissioner urges action to save ‘hundreds of thousands of lives.’

0521 - 27 October, 2012EXCLUSIVE INTERVIEW

John Dalli further explains to New Europe on 19 October what the current situation on the Tobacco Directive is and where this would be leading European legislation on

health matters, delving further into the ramifications not only on EU citizens' health but also to the alleged benefits to the tobacco industry by this move.

NEW EUROPE

TOBACCO INDUSTRY

Tobacco lobby inside the European ParliamentJust before last Wednesday’s midday briefing forjournalists at the European Commission, one ofNew Europe journalists received a phone call andan email from inside the European Parliament,suggesting that we ask a ‘helpful’ question for thetobacco lobby. “We are one of the few parties ac-tually working with the Tobacco industry. Andfor a number of reasons we have been rather in-volved in the Tobacco initiative that was the ori-gin of this rather "interesting" issue.“So we are wondering if it would suit your timeschedule to participate in today's Commissionmid-day briefing asking about the Commission's

law making? Surely there must be some stan-dards even here? Or is it comme-il faut to buyyour way to favourite laws? And what more,based on these interesting dealings, will the di-rective be scrapped and rewritten?”In the phone call, they named Swedish Matchas the company they were “working with”. Of course, we declined this offer and insteadasked the Commission to produce a resignationletter, which they have failed to do.We are, of course investigating the sender’s linksto the tobacco lobby.At around the same time, 12:18 to be exact, as

the Midday briefing began, persons unknownadded three paragraphs to the Wikipedia pagefor Snus, the controversial smokeless tobacco. “In October 2012, the European Union's com-missioner for health and consumer policy, JohnDalli, resigned, following an investigation byOLAF, the European Anti-fraud Office, into acomplaint made in by tobacco producer SwedishMatch. “ Well, as it was known by that point, theCommissioner had put out a statement and helda video interview with New Europe where hesaid in the clearest terms that he had not resigned.“OLAF found that an unnamed Maltese entre-

preneur approached Swedish Match using hiscontacts with Mr. Dalli, and seeking payments inexchange for influence over possible snus legisla-tion, the new EU's Tobacco Products Directiveexpected during autumn 2012.” And now thefinal paragraph added: “Swedish Match com-mented that she expects that proven scientificfacts regarding snus, are considered in a fair legalprocess for the proposal of a new Tobacco Prod-ucts Directive.” That does look a little out of placeto some. The interesting point is that the edit wasmade from a computer with an IP address reg-istered to the European Parliament in Brussels.

The European Investment Bank (Eib)alongside the Government of Luxem-bourg Directorate for Development andCooperation have launched a EUR 4 Mil-lion programme to support the develop-ment of the microfinance sector inTunisia.

It is hoped that the Micro MEDTunisia programme will encourage eco-nomic growth and job creation in Tunisiafollowing the upheavals of the ArabSpring, and was encouraged by the in-cumbent administration, who wanted ex-perienced western help to develop itsmicrofinance sector.

The aim of the programme is to pushforward the ability of microfinance insti-tutions to grow, and improve the regula-tory environment in which they work in.

This is to be done by increasing capac-ity building to the microfinance compa-nies, widening the transparency of thesector, and will look especially to youngentrepreneurs in facilitating the emer-gence of relevant financial products.

As the EIB works with local micro fi-nance institutions, it relies on its partnersto identify the most promising or needysectors for microfinance support. TheEIB does not target or prescribe particu-lar sectors such as rural agriculture.

On the other hand, in countries such asTunisia, it is increasingly concerned to en-sure that microfinance reaches all regions,and particularly the poorer regions of thecountry which are economically disadvan-taged. The local offices in Morocco,

Tunisia and Egypt are set to play a use-ful role in listening to the needs of localcommunities and micro financing institu-tions.

The EIB are confident they can buildon the current 800,000 active borrowersin the Southern and Eastern Mediter-ranean region, following EUR 27 millionworth of investment over the last ten years

Phillipe de Fontaine Vive Curtaz, EIBVice-President, said “The MicroMEDTunisia programme is an excellent exam-ple of how partners can come together insupport of a higher objective, which is thepromotion of financial inclusion throughour projects. In concert with the Govern-ment of Luxembourg and ADA, we canachieve a greater outcome by better as-sisting the development of the Tunisianmicrofinance sector. We hope that in thenear future we can replicate this promis-ing initiative to the other countries in theregion”

The initiative was originally announcedat the 10th Facility for Euro-Mediter-ranean Investment and Partnership(FEMIP) conference dedicated to SMEsin the Mediterranean partner countries.

FEMIP also plan to support the agenda,as part of their role as a key player in therelations between the European Unionand the Southern and Eastern Mediter-ranean in modernising and growingeconomies.

Although the most prominent partnerin the project, the Luxembourg develop-ment cooperation has already contributedto an array of education and training ini-tiatives in Tunisia, looking to bolster thecountry’s progress through pragmatic so-cial schemes.

After 20 years experience in micro fi-nancing, it is believed that the coopera-tion can deliver the necessary leverage, sothat growth can be achieved for potentialenterprises that are currently little morethan proposals.

The programme will be operated byAppui au Développement Autonome(ADA), who will put plans in place to berolled over the next five years.

ADA has 15 years of experience in themicrofinance sector, and so far this thisexpertise has been at developing researchand development by engaging with prac-titioners in the industry, by means of pub-lished paper and virtual debates promotediscussion amongst experts, and also col-laborates with research institutions anduniversities.

Information awareness in also high on

their list of priorities that has looked tolaunch new partnership schemes and alsolooks at finding alternative fundingsources.

They also initiate and develop new in-clusive financial products, for examplesavings, credits, insurance and supportsmicrofinance institutions in their devel-oping process.

Micro financing has proven a contro-versial method of attempting to bringthose out of poverty in developing coun-tries across Asia, Africa and Latin Amer-ica, and the EU along with USAID andthe World Bank have been strong sup-porters of the system.

After an extensive study of micro fi-nance programmes, David Roodman, oneof the most respected voices on micro fi-nance, revealed in his book Due Diligencethat the benefits of micro finance projectsare dubious, even leaving some borrowersof projects worse off than what they wereoriginally.

He said: “The micro finance systembegan in small origins and was, and stillis, a useful tool to improve poverty by pro-viding credit, but as it has grown there isevidence that in some cases it does notreduce poverty but actually increases it.There have even been reports of suicidesin some countries.”

“The problem is that we have gone

from having one provider of micro financeto having four or five of them in a smalltown, and that has resulted in a lot ofcheap credit that can plunge people in todebts they can’t pay back. This happenedin India up to 2010, and this can be dan-gerous.”

“We have had our problems with creditin the west, and purely because mortgagepackages failed does not mean that wedon’t have mortgage banks any more.What we could do is have industry ratingsgiving a red or green light to some microfinancing providers, an certifying of whichloans are responsible ones.” He added.

“Some of the recent changes have fo-cused on the proliferation of mobilephone use, in Kenya there is the mobilemoney transfer system, that provides afund service that is clear and more flexi-ble.”

Awareness of the problems of micro fi-nance is being targeted by the world wideSmart Campaign, in an effort to unitemicro finance providers with a set ofclient protection principles.

They include, appropriate product de-sign and delivery, prevention of over-in-debtedness, transparency, responsibilityfor pricing and fair and respectful treat-ment of clients, plus the privacy of clientdata mechanisms to create a complaintsprocedure.

POLITICS

EIB investment in Tunisia part of a 'higher objective'

By Peter Taberner


ANALYSIS

Tunisian President Moncef Marzouki gives a speech on October 16, 2012 at a meeting of Tunisian political parties to discuss the contents and calendar for adopting a new

constitution in the capital Tunis. The European Investment Bank and the Luxembourg government have promised to invest in economic growth and job creation in the

wake of the Arab Spring.

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ANALYSIS

It was a moment to savour when a helicopterwhisked George W Bush away from Washingtonin early 2009. On the ground beneath him,Barack and Michelle Obama waved gracefully.Millions of us felt that some of the world's prob-lems would disappear into that serene sky.

We were wrong. Over the past four years, Obama has extended

the war against Afghanistan, started another onein Libya, and threatened to attack Iran. He hasordered drone strikes against Pakistan, Somaliaand Yemen. He has increased military aid to Israel.He has kept Guantanamo Bay open. He has in-carcerated Bradley Manning for spreading thetruth about America's crimes. He has supporteda coup in Honduras and a dictatorship in Egypt.He has approved weapons sales to Bahrain andSaudi Arabia. He has refused to act decisivelyagainst global warming or the power of GoldmanSachs. Has he done anything positive? Apartfrom supporting the right to gay marriage andushering in minor improvements to the health in-surance system, I am struggling to think of exam-ples. His withdrawal of troops from Iraq is hardlypraiseworthy, considering the devastation inflictedon that country. And please don't ask me to en-dorse the execution of Osama bin Laden. It isnever excusable to kill an unarmed suspect, who

could have been apprehended and put on trial.Obama has in some respects been worse than hispredecessor. Bush lied about Saddam's non-exis-tent weapons of mass destruction. But there wasa general honesty to Bush's aggression. Bush neverpurported to be anything other than a vulgar oilmerchant, who referred to the captains of indus-try as "my base" and patently didn't care aboutblack folk left homeless in New Orleans. Obamahad worked with deprived communities inChicago and befriended the Palestinian intellec-tual Edward Said. Even if he was no radical, hestill offered the prospect of change - or so we be-lieved.

We were wrong.Every time I hear Europeans talk about how

important it is that Obama gets re-elected, I wantto scream.

The question of whether the Democrats or theRepublicans are in power matters to some Amer-icans. Democrats tend to be marginally smarterand less inclined to say offensive things about rapevictims than Republicans. Democrats do not tendto give as many tax breaks to the super-rich as Re-publicans do. In that sense, it might be preferableto have Obama running the show, instead of MittRomney.

On this side of the Atlantic - and in most ofthe world - it makes little difference who sits in theOval Office. Both of the main candidates are be-

holden to corporate donors. Both think that theUS may intervene in other nations' affairs when-ever it sees fit. Both are believers in American su-premacy, an ideology as toxic as any that deemsone group of people to be more important thananother.

Whichever man wins, he will hear the sameadvice from the CIA and the State Department.The Pentagon will still see NATO as a vehicle forprojecting US power. The International Mone-tary Fund - an institution largely controlled by theUS - will continue to demand that Ireland scrapsits minimum wage and Greece robs its pension-ers. The European Union will still be expected toact as a lapdog for an imperial leviathan. Belgiumwill continue to store some of America's nuclearweapons. The US Air Force will still operate inItaly. Germany will retain the dubious honour ofhosting the US command for Africa.

The granting of the Nobel Peace Prize to theEU doesn't alter reality. Some of us thought thatBarack Obama might behave slightly less bel-ligerently after he picked up that same award.

We were wrong. Change does not come from the top. It comes

from gatherings in town halls and city squares. Itcomes from the Occupy! movement. It comesfrom the protests against the Keystone XLpipeline and the tar sands that neighbouringCanada hopes to use in accelerating climate

change. It comes from Codepink and Studentsfor Justice in Palestine. It comes from the nunswho fought the poverty-increasing budget cham-pioned by Paul Ryan. It comes from trade unionactivists in Wisconsin and Illinois.

Sure, you can quibble with the list I have justcompiled. You can point to how those hardy soulswho camped out near Wall Street this time lastyear are now tucked up in warm beds. You canargue that DIY placards are worthless when con-fronted with the tasers and pepper spray of thepolice. But dissent is seldom futile. Declassifiedpapers show that Lyndon Johnson ruled out a nu-clear strike on Vietnam because he was petrifiedof the public outrage it would engender. Why hasObama tried to keep reams of information abouttoday's wars secret? The only plausible explana-tion is that he is too cowardly to incur the wrathof his people. Rather than trying to decide theoutcome of the election on Facebook, the bestthing us Europeans can do is to build allianceswith the decent Americans struggling for realchange. Regardless of what happens on pollingday, America will be the world's only superpowerfor some time to come. If you think handing theWhite House to the guy you like better makesthe US any less dangerous, then please reflect onsomething all of us should have been learned overthe past four years.

We were wrong.

POLITICS

America's meaningless election By David Cronin

At a time where my fellow European members ofthe Conservative party have just gathered inBucharest for the European People’s Party (EPP)Congress summit, it is important to establishsome facts around the context in which this meet-ing took place.

Romania is a young democracy with a consti-tution forged from the lessons we learned afterCeausescu’s dictatorship. The constitution isspecifically designed to avoid giving one persontoo much power and to ensure proper checks andbalances are in place. Having keenly felt the in-herent danger of the emergence of a strongmanwithin the country the Romanian constitutionalso allows for the suspension of the President – ararity amongst other European countries.

In the eight years of his presidency, TraianBăsescu - a former member of the communistparty nomenclatura under Ceausescu and a so-cialist leader until 2005 - has progressivelytaken more power than any of his predecessors– including myself. To this end, he has notshown a respect for the spirit of the constitutionand its legal terms. Earlier this year the consti-tutional court made it clear that he had abusedhis position as president, therefore legally justi-fying the procedure for his suspension whichwas initiated by the ruling coalition of liberalsand socialists (USL).

I am a Christian Democrat, not a Socialist, soyou should not expect me to defend Victor Ponta,

the Romanian Prime Minister. But as an anti-communist and freedom fighter, I cannot acceptthe systematic abuse of the constitution by Presi-dent Băsescu, his rejection of cohabitation, his de-termination to block real reforms, his repeatedintervention in the judiciary and his efforts tostymy the fight against corruption. This view isalso shared by an immense popular majority thatsupported his suspension in the hope that it wouldopen the doors for the modernisation of a coun-try in much need of change.

Anticipating this sentiment, Băsescu changedthe law of the referendum and introduced an ar-tificial threshold of 50 per cent of registered vot-

ers to validate its result. Although 87.52 per centof those that voted in the referendum agreed withhis suspension, the threshold was not met becauseBăsescu publically asked for a boycott – some-thing which contradicts basic democratic stan-dards. Furthermore, his strongest ally in Europethe Hungarian Prime Minister, Viktor Orbán didthe same. As a result of which there was a signif-icant abstention from the Hungarian communityliving in Romania, which accounts for 11 per centof the total population. The overwhelming choiceof the people was thus invalidated.

The EPP Congress which takes place thisweek does so in the midst as the political cam-

paign for Romania’s parliamentary elections on9th December starts to gather pace. Althoughmuch can always change in an election campaignthe early signs are that the ruling coalition will re-main in government. According to an IRESopinion poll taken last month, 63 per cent of Ro-manians believe the coalition will win the elec-tions, with only 24 per cent believing that BăsescuPDL party is capable of winning.[1] The party ispaying the price for the poor performance ofBasescu’s governments.

The European Conservative movement mustact responsibly in these circumstances. PresidentBăsescu must respect the will of the Romanianpeople, and he must also cooperate with the coali-tion and the Prime Minister to ensure that thispolitical crisis does not endure. Regardless ofwhether we, Conservatives, agree with the gov-ernment’s political agenda or not, we cannot allowpersonal feelings to get the better of our demo-cratic principles. There is surely no better time orplace to make this heard than at the EPP Con-gress in Bucharest.

The past political crisis has led to a substantialdepreciation of the Romanian currency and cre-ated uncertainty for investors. Euro-scepticismand anti-German sentiments also rose very sub-stantially this summer in Romania when bothBrussels and German conservative leaders de-cided to side with Băsescu. This is not conduciveto a prosperous, strong and united Europe and Isincerely hope that it will not happen again. Ro-mania is a pro-Europe country and we have long-standing economic and social ties with Germany.We must all play our part in reinforcing these his-toric ties and fostering economic development,but we can only achieve this by respecting the willof the Romanian people.

Emil Constantinescu, Former President ofRomania

By Emil Constantinescu

A young man waves a bunch of EU and Romanian flags on 1 January 2007, when Romania officially

joined European Union. "Romania is a pro-Europe country and we have long-standing economic and

social ties with Germany. We must all play our part in reinforcing these historic ties", says former Presi-

dent Emil Constantinescu

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What Romanians want

During the September meeting of theCommittee on Petition, the first after thesummer recess, my colleagues and I havecome back to work with a crucially impor-tant issue on the table. Mr. Jo Leinen andMr. Andrew Duff, fellow MEPs, a fewmonths ago presented a petition to theEuropean Parliament -- on behalf of theEuropean Union of Federalists (EUF) --concerned with the realization of a FederalUnion in Europe. This is, it almost goeswithout saying, a topical issue and thissame concept, if with different hues, wasboldly brought to the institutional table bythe European Commission’s President --Mr. José Manuel Barroso -- in his recentaddress to the plenary of the EuropeanParliament in Strasbourg.

Europe’s financial instability and eco-nomical woes have reinforced the convic-tion, by some, that a tighter common

engagement, through the adoption of a fis-cal union and a real common budgetarypolicy, linked to greater investments in theemployment sector, may very well be theonly way out of this crisis. The petitionerscall on the European Parliament to drawup a comprehensive agenda for a new con-stitutional convention charged to modifythe Treaties accordingly. Not a small featbut one that we look forward to stimulat-ing and to promoting. The debate in theCommittee was lively and intensive, takingall different positions in consideration.

It would seem, at this particular point intime, that Europe faces two possible out-comes: either the demise of the Union aswe know it, and the ensuing acknowledge-ment of the Europeist’s programme defeat,or, conversely, a bigger and bolder engage-ment to stay together and show greater sol-idarity in the face of difficulties. Ponderingabout this scenario, I have to admit , Iwould have no doubt on the direction to

take. In my opinion, in fact, a Europe ofpeace has been the biggest achievement,and political masterpiece, of the last 70years. And it seems as though I am not theonly one that thinks so!

With that in mind, and based on thevery substantial debate that took place inboth the September and October meet-ings, the Committee on Petitions is proudto launch and invite you all to a publichearing to be held in 2013 -- quite aptlyduring the European Year of Citizens -- togive and hear the voice of civil society,NGOs and petitioners/citizens on thisparadigm-shifting issue. Details on datesand programme will be released as they arefinalized and it will be our intention to beas inclusive as possible and to give an in-depth look to many a burning issue.

Erminia Mazzoni is a Member of theEuropean Parliament and Chair of theCommittee of Petitions

By Erminia Mazzoni

EU

2013: Year of the Europeancitizen and its challenges!


ANALYSIS

During a recent visit to Brussels theChairman and CEO of FinnmeccanicaGiuseppe Orsi sat down for an interviewwith New Europe and talked industry.The answers are below.

How can innovation help Europe inthis moment of crisis?

Today we are going to talk about inno-vation, industry, engine and growth in Eu-rope. Each of these words expresses avalue. All together, they represent what hasalways distinguished my commitment ascitizen, worker and manager. They con-tinue to be the targets on which the Fin-

meccanica Group devotes all its energy.They express then, here in Brussels the

capital of the European Union, a particu-lar meaning even more exciting and evenmore challenging because of the continu-ation of this systemic crisis affecting ourcountry and with different intensities, allof our old continent. The economic modelthat had prevailed in the world over thelast 20 years' enter in crisis, triggering aprocess that has come to involve the eco-nomic / financial structure of the Euro-pean Union, leading someone to evenspeak about the end of the euro.

I'm not so pessimistic, at the contrary,because of my character and experience I

normally see the crisis as a challenge to facewith the desire to solve the problems andto start again and go further, working tobuild a better future for the coming gener-ations. Going further and look to the fu-ture, I think this is the turning point. Whatthe crisis has shown is a model in whichfinance has taken a role, not in the rightway in my opinion and also prevaricating,as the centre of gravity of global develop-ment.A center of gravity that seems itcould ignore the so-called real economy.The world of finance and banking has al-ways played and will always play a vital rolein the economy, but It will have to play thisrole in a more balanced way.

INNOVATION

Finmeccanica draws on innovation

The handover of a European citizens' petition against the anti-counterfeiting trade agreement (ACTA) to the petitions committee of the Euro-

pean Parliament, 28 February 2012.

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The new competition

The European Leaders are discussing a New Model ofGovernance. The citizens are tired, demand more andmore new ideas and new solutions for a New Gover-nance Model for Europe. This idea is an effective chal-lenge for Change in a Europe that must face theexpectations of a New Society, more demanding andmore capable of driving the imperative of excellence.Europe.gov must be the right expression of a new timewhere a new social capital musr be shared by all theclasses in a Europe of change. Unemployment is highr in the European Union area, theeuropean companies are facing more and more the strongcompetition from companies from Middle East and Asia,Public Accounts of most of the european countries arefacing unsustainable deficits. That´s why a Governancefor Europe is more and more an imperative. The NewEurope must be supported by some strategic proposalsthat demand for a new operational agenda: This New Governance Model must be supported bysome strategic proposals that demand for a new oper-ational agenda. According to Habermas, Europe mustknow how to integrate in a positive way its citizens. So-cial cohesion is done with the constructive participa-tion of the citizens and it is more and more necessaryan effective attitude of mobilization for this effort. Ed-ucation must be the right tool for this strategic ambi-tion for Europe.Most European Leaders insist that Innovation andTechnology are the “enablers” for competitiveness inEurope. Universities and Companies must perform anew strategic partnership centered in the objectives ofthe added value, creativity and knowledge. This is thebasis for a future effective implementation of the Lis-bon Agenda. Europe has still a strong opportunity toimplement an agenda of innovation – the opportunityis more and more know and it can´t be lost.Most European Mayors are clear - The excellence of Eu-rope is more and more the excellence of its Regions. Thedevelopment of strategic projects like the Poles of Com-petitiveness, Clusters of Innovations and KnowledgeCities and Regions is the effective confirmation that thebasis for a new agenda in Europe depends on the capac-ity of its regions. A New Europe is more and more theconfidence of the development of New Regions.Finally, , Europe has a unique identity based on its strongculture. The European Culture is a unique asset. Europemust be able to involve other global partners in the con-struction of integrated projects focused on the developmentof culture as a driver for development. The reinvention ofculture is itself a very innovative way to involve more andmore the European actors in this project for the future.We need a Europe of the citizens. Where people knowwho they are and have a strong commitment with thevalues of freedom, social justice and development. Thisis the reason to believe that this renewal of Europe,more than a possibility, is an individual and collectivenecessity for all of us, effective European citizens.

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

New Europe content partner

By Francisco Jaime Quesado

By Federico Grandesso

Presidentfor a day

It’s hard to escape the conclusion that the Grand Eu-ropean Project is about to implode and that the Euro-pean Union is being killed off, not by eurosceptics, butby those who profess to love Europe the most. I’ve beensaying this for a few years, but these people seem deter-mined to realize my worst fears.There was sarcasm and derision from all the usual sus-pects when the Nobel Peace Prize was announced, withthe occasional good point drowned out by the meanspirited tone. The EU does deserve the award but whynow? That’s the question many are asking.It may be that the jury gave it as a reminder of the goodwork and as an incentive to, and they would put it bet-ter than this, pull their fingers out and stop messingaround.The EU, in particular its leaders, can always be reliedupon to drag one last defeat from the jaws of victoryand so we see not one, not two, but three presidents ofthe EU turning up to collect the award.I can’t think of any other organization that would sendthree people who basically detest each other to collect apeace prize. We can only imagine the fighting behindthe scenes, but it shows the promise of Lisbon to let Eu-rope speak with one voice has utterly failed.There is a way out of this, if we look over the Atlantic andback in time. In the 1950s there was a popular game showon television, Queen for a Day, where women would an-swer questions about their lives and hardships, the winnerbeing crowned Queen and being handed a pile of prizesdonated by sponsors and advertisers. A leading critic de-scribed the show as "tasteless, demeaning to women, de-meaning to anyone who watched it, cheap, insulting andutterly degrading to the human spirit."But we can get past that and look for the positives.Why not use the format to produce President for a Day!By doing this, we can have a cheap to produce pro-gramme which if disseminated on Europarl TV, couldgive the troubled broadcaster a viewership in tens, pos-sibly reaching a new record of near 100.If we have this as a temporary but ceremonial role, itwould have two benefits. First of all it will allow the EUleaders to concentrate on doing their jobs, rather thanpointless prancing on the world stage and it willbroaden and deepen citizen involvement in the EU.There will have to be some checks, possibly made intoentertaining rounds in the TV competition. They wouldhave to show that they’re not allergic to floral bouquets,children and cheap sparkling wine and cardboard nib-bles that so many prestigious events involve.There should be some reward for ordinary citizens whotake up this burden, maybe we can give them a fewpackets of Snus or something.The citizens will be far cheaper too. They don’t need allthe pomp and glitz our leaders have grown accustomedto and even though there are some costs, it will be farlower than currently.But, if this idea is taken up as seriously as it should, wecould see almost 2,000 individuals representing theUnion in each five year mandate. Just imagine the di-versity that could show the world, far more than threemiddle aged men.That trio would be much better dressing up as the Bev-erly Sisters and giving morale boosting concerts to thetroops.

[email protected]

By Andy CarlingThe European Parliament (EP) has animage problem, often being blamed for ap-pearing remote, abstract, bureaucratic anddull. Some go one step further and call it in-effectual since it does not have the samepowers national parliaments hold.

These accusations are harsh, but notcompletely incorrect.

In the context of the EP's role and re-sponsibilities, these accusations are far fromaccurate. The EP is one of the three decisionmaking institutions of the EU, along withthe Council of the European Union and theEuropean Commission. The Parliamenthas co-decision powers, provided by the2009 Lisbon Treaty, which (with a few ex-ceptions) place it on an equal footing as law-maker with the Council.

Furthermore, the EP is the only institu-tion directly elected by European citizens;as such it brings democracy to an organisa-tion that is largely run by un-elected offi-cials. The above mentioned allegations aremore exact when referring to the way theEP is run. The European Treaties set theworking places of the EP at three venues:committee meetings are held in Brussels,Strasbourg hosts the plenary sessions andLuxembourg City provides the officialworking place of EP staff.

The split into the three working locationshas long been disputed between the Coun-cil and the EP.

Being democratically elected, Membersof Parliament feel we have the right to de-cide when and where we meet.

This notion faces the strong objection ofthe Council, comprised of chiefs of theMember States, which relies on EU treatiescontinuing to allow what has been knownas the "travelling circus".

The financial cost of maintaining threeplaces of work is estimated by the Parlia-ment administration to be around €180million per year. The extra cost of maintain-

ing the working places in Luxembourg andStrasbourg is set at €148m. This figure doesnot include fixed costs

The building in Strasbourg, which is usedfor 60 days a year, cost around €400m tobuild. In Luxembourg City, the Parliamentnow faces a decision to construct a newbuilding for 3000 staff members at an esti-mated cost of €416 million.

Besides these expenditures, the EuropeanParliament is also reimbursing "mission ex-penses" to staff members travelling betweenthe three seats. According to the 2009 Dis-charge report of the EP, in 2009 7,052 mis-sions were undertaken betweenLuxembourg and Brussels at the total costsof €1,343,428m, and 2,499 between Brus-pand Luxemburg at a cost of €567,015.

Acceptance by the Council of a single seatfor the EP and its staff members will be ademonstration of financial responsibility, es-pecially in the current economic reality.Moreover, it will improve the image prob-lem for the Parliament, which could be seenin the exceptionally low turnouts in Euro-pean elections.

The campaign for a single seat reached amomentum over the past year with theNetherlands and the UK featuring the seatquestion in their respective coalition agree-ments, and the Polish Foreign Minister, Ra-

doslav Sikorski, expressing public supportfor the one seat in a speech he gave in No-vember last year in Berlin.

Martin Schulz, elected President of theEuropean Parliament also reaffirmed hissupport for a single seat for the EP on sev-eral occasions.

The Alliance of MEPs pro-single seat inthe EP also had some success rallying sup-port for the single seat in a series of succes-sive plenary votes; the 2010 EuropeanParliament Discharge report, voted on 10May, and the Parliament’s estimates of rev-enue and expenditure for 2013, voted on 29March. Both reports showed extensive sup-port by Members for the one seat.

The Single Seat MEP Alliance also suc-cessfully included respective amendmentsin the 2013 Budget of the European Parlia-ment as well as the Multi-Financial Frame-work Interim report for 2014-2020.

Both reports will be put to vote in the ple-nary session of 22-26 October.

While these achievements provide sig-nificant milestones in reaching our objec-tive, the 2014 European elections willpresent an opportunity to accelerate andmagnify these efforts.

Incorporating the question of a singleworking place for the whole EP in our cam-paigns will allow us to better communicateto our voters the financial and environmen-tal consequences of three working places. Itwill also allow us to actively engage EU cit-izens in taking action, either by voting, or bycalling on their national governments topress harder on the issue at the EuropeanCouncil.

Only with the active participation of ourcitizens can we move forward to create anefficiently run, economically responsible in-stitution which reflects the will of its voters.

Lidia Geringer de OedenbergQuaestor, Member of the European Parlia-ment Bureau Member of the Single SeatMEP Alliance


ANALYSIS

CONSTRUCTIVE AMBIGUITY

Lidia Geringer de Oedenberg

EUROPEAN PARLIAMENT

European Parliament fightfor the rights to a single seatBy Lidia Geringer de Oedenberg

The EU is making “a mockery” of its com-mitments to curb carbon emissions, onecampaigner has said as the EuropeanCommission launches a new proposal onbiofuels.Speaking to New Europe on 17 October,Belinda Calaguas, head of Campaigns andAdvocacy Unit at development NGOAcionaid, said that the commission’s pro-posals serve only to “confuse” the situationwith regard to climate change as well as thedisplacement of people in the developingworld. The EU’s biofuels policy has comeunder fire from campaigners, who arguethat it causes unfair competition betweencrops grown for food and fuel, and, at a

time when global food prices are rising, isa major factor in price inflation.While Calaguas recognises that certainparts of the proposals, unveiled by En-ergy Commissioner Günther Oettingeron 17 October, such as a commitmentto cap food for fuel at 5% by 2015, shesays that this still doesn’t go far enough.“Symbolically, it is very important thatthe European Commission acknowl-edge that there is a problem. The biofu-els target has been a catastrophe, andplaces a monstrous competition betweenfood and fuel, which sees many smallfarmers displaced, and has led to hugeincreases in food prices. In many cases,families spend up to 90% of their mea-gre income just to feed themselves”.

“The policy was meant to support the Eu-ropean community to show more sensitiv-ity to climate change”, she continues, “butit is driving land-grabbing. It is great thatthe commission has recognised that thereis a problem. We now no longer have todebate that”.She says that the commission needs to gofurther, and advocates a 0% target of foodcrops being used for fuel. Problems, shesays, will still persist. “What signals doesthis send?”, she asks of the current propos-als. “Producers can still use food for fuel,and land-grabbing can still go on. And itdoesn’t send a clear signal to industry, andencourage them to look at 2nd and 3rdgeneration biofuels. The policy just con-fuses things”.

ENERGY

EU biofuel policy ‘confuses’ things furtherBy Cillan Donnelly

The recent squabbling between China and Japan

over the Diaoyu/Senkaku islands constitutes a se-

rious threat to the region’s peaceful development.

It raises once more the question whether Asia’s

evolution towards a distinct regional state system

will follow the path of peaceful intercourse or slide

into interstate rivalry, and possibly, violent con-

flict. Optimists argue that China and Japan are

economically too interdependent to slip into war.

While China is Japan’s biggest trading partner,

Japan is China's third-largest trading partner after

the European Union and the United States.

Two way-trade between the two economies

rose 11.7 percent in 2011 to a record $345 billion.

Japan's outbound direct investment in China

reached 1 trillion yen in 2011, up 60 percent from

2010. Although, China's direct investment in

Japan fell sharply to 8.9 billion yen in 2011 from

27.6 billion yen the year before, it remained well

above the 2005 level of 1.3 billion yen. Beijing and

Tokyo have indeed good reasons to keep their

win-win relation afloat, and the latest squabble

about a few clumps of rock will probably die

down, just as others have in the past.

All this sounds reasonable like it did in Europe

in the period before the First World War. Back

then nobody in Europe had an economic interest

in conflict. In 1909 the utopian liberal Norman

Angell argued compellingly that war had become

an illusion because in modern times territorial con-

quest is extremely expensive and politically divisive

as it severely disrupts international commerce.

History decided otherwise as Germany grew

ever more frustrated over the lack of recognition

of its status by the other great powers and nega-

tive nationalism spread all around Europe.

At this very moment a major power transition

is also happening in Asia while at the same time

a wave of growing nationalism is making its way.

With each new squabble between China and

Japan, attitudes on both sides appear to harden and

trust tends to wear down. Beijing and Tokyo need

to grasp how much damage their bickering over a

few tiny islands is in fact causing. For the sake of

the prosperity of Asia and the rest of the world

they need to find constructive ways out of the

present dilemma they have locked themselves into.

Gustaaf Geeraerts, Director,Brussels Institute of

Contemporary China Studies (BICCS)

POLITICS

The deeper meaning ofthe Diaoyou/Senkakudispute


ANALYSIS

A family walks past the Taipei City Hall where a huge poster hangs outside featuring Taiwan's claim over the disputed is-

land chain in the East China Sea. The islands, known as the Diaoyu in Chinese and Senkaku in Japanese, have been at the

centre of a major dispute between Taiwan, China and Japan.

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David Cameron and Alex Salmond haveagreed on a date for a referendum on Scot-tish independence. It will be autumn 2014;and although this seems still a long way off,already the countdown, or, depending onone’s political view, falsified injection of ur-gency, has begun. The initial details haveonly been signed, and yet, both sides areclaiming victory.The UK prime minister, and the Scottish firstminister, signed in Edinburgh on 15 Octobera deal that would allow for a referendum onScottish independence within two years,which would mean an autumn 2014 vote, ayear which has certain resonance for the na-tionalist cause; 24 June will be the 300th an-niversary of the battle of Bannockburn, adecisive victory in the Scottish wars on inde-pendence, and, as such, remains a sentimentallandmark in the nationalist psyche, as well asbeing the year that Scotland hosts golf ’sRyder Cup, and the year of the Common-wealth Games. As such, Scotland, therefore,is hoping to benefit from a little bit of a post-sporting feel-good bounce, a la London 2012.Conceding these things to the Scottish Na-tional Party (SNP), which, under Salmond,hold the balance of power in the Scottish as-sembly, may seem like a concession too far forthe government in London, however, all hasnot been given away.While it is true that Cameron favoured an

earlier vote in 2013, a referendum the follow-ing year does not automatically give victory tothe SNP. The Scottish nationalists had origi-nally wanted two questions on the ballot; oneasking for complete independence, the otherfor so-called ‘devo max’, a heightened form ofexisting power, which transfers added powersto the Holyrood parliament, but which stopsshort of full-scale independence. By insistingon their preferred date, the SNP have forcedvoters into a very stark yes or no decision. There is no certainty that this is an easychoice for voters; economic uncertainty andan indecisive position in Europe won’t appeal

to the more secure middle class, while thosesuffering the crisis will simply want securityno matter who provides it. In forcing a voteon one issue alone, the SNP cannot be guar-anteed the appeal of their sentimental argu-ment will be the defining factor. A widerstrategy will be needed.Nor will the extension of the franchise to 16and 17 year-olds, again a concession won bythe pro-independence side, be a guarantee ofvictory.; they will effectively be relying onabout an added 2% of the electorate to givethem their support, something that will re-quire dual mobilisation; overcoming voter ap-

athy – a current problem amongst the youth– and persuading those that do vote, to votefor independence. The SNP cannot simplygive the youth the vote, and expect the youthto be reciprocal with its unequivocal gratitude. The European elections in 2014 will also be afactor. The SNP, pro-EU as well as pro-inde-pendence will no doubt campaign heavily onindependence advancing their position withinthe European Union. The problem is, withthe Electoral Commission (another of Lon-don’s insistences) in charge of defining thelimits of finance, the nationalists have a seri-ous choice of where to splah their money –especially when the campaign is predicted tobe anything up to 16 weeks.Following the signing of the initial agree-ment between Cameron and Salmond on15 October (what Salmond has dubbed theEdinburgh Agreement), the latter acknowl-edged in a press conference that certainforces were against him, but insisted that his-tory (albeit recent) was behind him; his partyhad not expected victory in the 2011 elec-tions, but came from behind. Seemingly, hesees this as an equivalent position to wherehe is now, something that is hardly a deci-sive statement of intent.Both Cameron and Salmond agree that this isa historic moment for the United Kingdom,albeit from different perspectives. The ques-tion at this early stage is, whose preliminarywrangling s have already given them an ad-vantage out of the starting gates?

Scottish independence not sure thingBy Cillian Donnelly

By Gustaaf Geeraerts

David Cameron (L) and Alex Salmond: Deal agreed, but vote far from won| EPA/SALLY STIMSON/MOD/HO

I feel deeply troubled by the fact that manyJapanese companies suffered much damagefrom the anti-Japanese movement in numer-ous regions in China. The extent of the damageto the Japanese companies includes, looting,vandalizing and arson. Under no circumstancesshould acts of violence be condoned among thecivilized community of nations. Provocative ac-tions taken by Chinese government-ownedvessels and activists’ boat around the Senkakuislands of Japan are also causing mounting con-cern. While calling on differing opinions to beexpressed in a calm and peaceful manner, forthe benefit of your readers, I would like to ex-plain the views as follows:

1. First of all, the rule of law is a principlethat Japan upholds with the utmost vigour.Prime Minister Noda emphasised in hisspeech at the United Nations General As-sembly in September that “the rule of law isessential to preventing and resolving conflictsin a peaceful manner, and it plays a criticalrole in maintaining a stable and predictablesociety; thus it must be further enhanced.”

Forcible realisation of a claim disregarding in-ternational rules cannot be justified.

2. Secondly, let me reiterate that Japan con-tinues to cooperate closely with all neighbour-ing countries for the peace and prosperity of theAsia Pacific region. As a responsible actor in theregion, Japan continues to deal with any issuewith calm to ease tensions, fulfilling its respon-sibility in accordance with international law. Itis essential that China assumes a constructiverole, upholding “the rule of law,” just like Japandoes, in order to achieve stability and prosper-ity in the region as well as the world.

3. Thirdly, the Senkaku Islands are an in-herent part of the territory of Japan, in lightof historical facts and based upon interna-tional law. The San Francisco Peace Treaty,signed in 1951 after World War II, legallydetermined the post-war boundary of Japan’sterritories and constitutes the foundation ofinternational order after the war. FollowingArticle 2 of the Treaty, Japan renounced For-mosa (Taiwan) and the Pescadores, whichhad been ceded by China as a result of theSino-Japanese War. The Senkaku Islandswere NOT treated as part of Taiwan or the

Pescadores and were treated as part of theterritory that had already belonged to Japan.The Senkaku Islands were put under UStrusteeship as part of the Japanese NanseiArchipelago under Article 3 of the San Fran-cisco Peace Treaty, which reverted to Japanin 1972. It was only after a UN report in1968, which pointed out potential petroleumresources in the areas surrounding the Is-lands, that China and Taiwan abruptlystarted making their claims. Prior to this,there had never been any objection expressedby China nor Taiwan to Japan’s sovereigntyover the Senkaku Islands.

4. Originally, Japan acquired the Islandspeacefully and lawfully by occupation of terranullius (or No Man’s Land), which is an estab-lished method of acquiring uninhabited islandsunder international law. Japan conducted thor-ough surveys from 1885 through which it wasconfirmed that the Islands were uninhabitedand showed no trace of having been under thecontrol of China and therefore incorporatedthem in January 1895. The process had noth-ing to do with the settlement of the Sino-Japanese War by the Treaty of Shimonoseki,

signed in April 1895 and came into effect inMay 1895, by which Taiwan and thePescadores, which do not include the SenkakuIslands, were ceded to Japan by China. There-fore, allegations that Japan obtained the islandsthrough the Sino-Japanese War of 1894 arecompletely against the facts.

5. The Japan-China relationship is one of themost important bilateral relationships for Japan.Our economies are already closely intertwined.Hence, we are, we should and we will continueto be good friends with each other. The days ofusing force or coercion, whether military oreconomic, to solve disputes over land should beleft in the last century. Let us not forget that weare already deep into the 21st century.

6. For further details on the Senkaku Islands,please refer to:

http://www.mofa.go.jp/region/asia-paci/senkaku/senkaku.html. There you will findnot only an extensive account of the legal andhistorical aspects of the issue but also the abun-dant facts that back it up.

Kojiro Shiojiri, Ambassador of Japan to theEuropean Union

LETTER TO THE EDITOR

On Japan


ANALYSIS

Japanese Defence Ministry on October 16, 2012 shows a Chinese warship ship cruising in waters between two Japanese islands in Okinawa prefecture, in the East China Sea. Chinese warships, including two destroyers,

were spotted in waters near a Japanese island on 16 October, the defence ministry in Tokyo said, further stoking tensions with Beijing over a disputed archipelago.

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In a press conference held in Tbilisi, EUEnlargement Commissioner Štefan Fülecongratulated Georgia on its recent demo-cratic elections.The commissioner said he approved of theresults of the ballot, and expresed the EU'ssupport for the country in bringing itselfcloser to EU.In the recent parliamentary elections, Pres-ident Saakshvilli conceded defeat to Bidz-ina Ivanishvill, who will form the newgovernment. These elections were very im-

portant for Georgia’s post-Soviet history.For the first time the elections were con-ducted democratically and peacefully, with-out rivals between the opposed politicalparties. These elections mark the transitionto a democratic era.President Saakshvilli will continue to exer-cise his duties until the end of next Octo-ber. After this period the Georgiaconstitution will change the presidentialsystem will shift to parliamentary system.For more than 12 months the two men will

have to work together in order to designthe foreign and economic policy of theircountry. “President Saakashvili and MrIvanishvili have put their country’s best in-terests first and we salute their statesman-ship and their patriotism. The EuropeanUnion counts on them to continue to worktogether in this constructive spirit” saidŠtefan Füle. The commissioner met with Ivanishvili,several of his new Ministers, as well as withthe President Saakashvili and his outgoing

government. The main topic of their dis-cussions was the formation of a dynamicbilateral agenda. Europe supports the po-litical association and economic integrationof Georgia. “We want to develop this inte-gration process still further, as long asGeorgia continues to show that it is ourwilling partner accepting EU values andstandards. We very much appreciate thereadiness of the incoming governmentteam to maintain continuity in these ef-forts” said the commissioner.

EU

Georgia comes closer to EU

By Kojiro Shiojiri

In case of confirmation of withdrawal ofthe American ConocoPhillips from Ka-shagan, new entries will not keep anyonewaiting. The main “trump card” of thedomestic oil industry Kashagan again be-came the main intrigue of the VII Eura-sian Forum Kazenergy, which recentlywas held in Astana. Under the journalists’pressure, Kazakhstan’s Minister of Oiland Gas Sauat Mynbayev said the UScompany ConocoPhillips yet announcedits intention to withdraw from the pro-ject. Although, he immediately addedthat the company hasn’t made an officialrequest.

Rumours about the fact that one of theshareholders of international consortiumdeveloping world’s largest oil field Kasha-gan, ConocoPhillips, intends to withdrawfrom the project has long been exaggeratedin oil industry of the republic.

However, oil industry and governmentofficials, particularly, from the Ministryof Oil and Gas, an authorised body of thecountry's oil and gas projects, denied therumours.

Mynbayev has long avoided commen-ting on the issue. But this time surroun-ded by the journalists, who were onwatch for him at the hall of the Palace ofIndependence, he admitted that Conoco-Phillips may withdraw from the project."They have the intention to sell theirshare," said Mynbayev under pressure ofreporters.

However, the Minister immediatelyadded that this intention was not an-nounced officially and that "the desire tosell their share is still at the level oftalks."

“ConocoPhillips only informed that itcould sell its stake – it ’s all we know sofar. It is their right - when and what tosell, I know that they intend to sell theirshare, I know nothing about the rest," hesaid.

Despite the fact that its only intentionwithout written request yet, this time,this news left everyone perplexed, afterall “the first Kashagan oil” is expected in6 month. It seems like in a little while theoil gusher will appear from the depth ofthe Caspian Sea.

The Kashagan project has experiencedseveral delays. Yet again the shareholdersassured the government of Kazakhstanthat long-awaited breakthrough willhappen in the first half of the next year.Let us recall that the world is waiting forthis moment since 2005.

As for the seriousness of ConocoPhil-lips to withdraw from the shareholders ofthe North Caspian Operating CompanyB.V. consortium, their intention is fairlyexplicable.

The main reason is the financial diffi-culties of the company after the globalcrisis. As it was announced by the foreignmedia, in fact, ConocoPhillips is execu-ting its three-year plan, according towhich the company will sell its assetsequivalent to $15-20bn. In 2010-2011alone the company sold its assets in anamount of $10.7bn.

Among the assets of ConocoPhillipsfor sale there are number of projects inVietnam, Canada, Nigeria and Russia,where the company has been working fordecades.

ConocoPhillips all this time was andcontinues to be in a difficult dilemma.On the one hand: circumstances whichmake the company seriously “tighten thebelt”, on the other hand the hopes thatpromises Kashagan.

Kashagan is a trump card of Kaza-khstan when negotiating with foreign in-vestors about cooperation. Kashagan isone of the largest oil fields in the worlddiscovered in the last 40 years. Accordingto some analysts, the Kashagan will allowKazakhstan to enter the five largest oilproducers in the world.

According to the Kazakh geologist, inplace reserves of the oil field are estima-ted 4.8bn tonnes. According to the ope-rator of the project, the total oil reservesare 38bn barrels or 6bn tonnes, 10bn ofwhich are recoverable. Also Kashagan haslarge natural gas reserves – over 1trl cubicmetres.

Hesitations in decision taking whetherwithdraw or retain the share in such anambitious project as Kashagan were cau-sed by the difficult negotiations with theKazakh government on the budget thefirst phase of the project. On one side –future profits, on the other side huge in-

jections in projects which are necessarytoday and will be necessary in the comingyears. Hence, the absence of an officialstatement and widely blown rumours.

Apart from the large investments thereis one more thing – the line of the Ka-zakh authorities to increase Kazakhstaninterest in oil and gas projects. It is clearthat the country's goal is to get awayfrom dependence on natural resourcesand become an industrially developedstate. Wherefore, today raises the issue ofthe possibility for Kazakh oil and gasequipment manufacturers to participatein such a multibillion project.

That’s right, but the quality of Kazakhenterprises do not always meet interna-tional standards and the shareholders ofthe international consortium have theobligations to their foreign companions- suppliers, and the responsibility forpossible environmental emergency situa-tions that may occur in the case of low-quality equipment.

Let us recall that the project of thefield development of Kashagan is amongthe most difficult ones. According toTimur Kulibayev, the chairman of theKazEnergy Association, the investmentsin the first phase of the Kashagan figu-red up to $45bn.

Among the main reasons that compli-cate the development of the field are en-vironmental sensitivities of the NorthCaspian Sea, a high content of sulfur dio-xide and shallow water, which makes itdifficult for logistics.

That is why, without going into detailsthe head of KazEnergy keeps repeatingthat while following the support policyof Kazakh enterprises, yet still the issueof quality is regarded as of paramountimportance. "The main criterion for joi-

ning the project is the competitiveness ofyour products, which will be ensured byits high quality," - he said.

Again, returning to surmises about Co-nocoPhillips, its withdrawal from theproject is an open question. At a pressconference, following the VII KazEnergyForum, Vice - Minister of Oil and GasBerik Tolumbayev had tougher stand,when he was asked a similar question.

"The Ministry has no official state-ment of ConocoPhillips on its withdra-wal from the project. All this on the levelof journalistic conversations," Tolumba-yev said.

The statement of the Minister of Oil andGas about the decision of ConocoPhillipsgave rise to new questions. Responding tothe subsequent questions about whether heis aware if one of the other shareholders hasa desire to buy a stake of ConocoPhillips,Mynbayev said that "someone has alreadyexpressed interest."

"But it probably depends on their long-term plans, so I cannot comment until wewill have something specific," Mynbayevsaid. "Who will be the buyer of the Co-nocoPhillips’ share in case of a final deci-sion to leave the project? The state[Kazakh government-owned oil and gasfirm KazMunaiGas (KMG)] is has apriority right to purchase, and then theexisting shareholders have a priority rightto purchase. If one of them expresses adesire to buy, probably they will buy it.We do not know," Mynbayev said wi-thout elaborating.

And there are number of candidateswho are willing to buy a share in such arisky but promising project. After Myn-bayev’s quotations spread among theforum participants, thanks to the newsagencies, number of versions immediatelyappeared.

Some mentioned the Chinese CNPC -which has big money and it’s not a secrethas a desire to enter the shelf of the Ca-spian Sea, which the company has longtried to enter - and India’s state-ownedcompany, which is financially as good asChinese company.

Meanwhile, amid officially unconfir-med information about the intentions ofConocoPhillips to resign from the con-sortium, there is information that goesagainst the first.

Well-informed sources in the same Mi-nistry of Oil and Gas reported that someNCOC shareholders submitted to the go-vernment of the republic the offer to pro-long the Kashagan contract for another 20years, which is from 2040 to 2060.

This means that the hope for a goodprofit from Kashagan oil still remainsamong investors and, in spite of all thedifficulties, continues to keep them inthis project.

ENERGY|OIL

China’s CNPC, KazMunaiGas, eye ConocoPhillips’ Kashagan stake

By Kulpash Konyrova


ENERGY & CLIMATE

The manmade islands that are home to the giant Kashagan oilfield project in the shallow waters of the Caspian Sea.

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On 13 October, Russia and Serbiasigned a gas supply agreement for deliv-eries of Russian natural gas to Serbiauntil 2021, Russian Deputy EnergyMinister Anton Inyutsin said. "Thisagreement envisages a guarantee ofRussian gas supplies to Serbia over thecourse of ten years," he said.

Russian Energy Minister AlexanderNovak and Serbian Energy, Develop-ment and Environmental ProtectionMinister Zorana Mihajlovic signed theagreement.

The deal calls for Russian gas monop-oly Gazprom to send Serbia 5bn cubicmetres of natural gas per year and for Ser-bia to pay back $30mn for Russian gassupplied from November 2000 until Jan-uary 2001 and about $10mn for suppliesbetween 1995 and 2000. The debt mustbe paid off in tranches by the end of 2014.

Russia is the main supplier of naturalgas to Serbia. Gazprom delivered 1.4bncubic metres of gas to Serbia in 2011.

The Russian government approved thedraft document this August, but the sign-

ing was delayed due to several demandsfrom the Serbian side regarding an in-crease in oil amounts and preferences onprices. At the moment, gas is deliveredalong a chain to Serbia: Gazprom exportto Yugorosgaz (a joint venture betweenGazprom, SerbiaGas and Centrex) toSerbiaGas. This agreement was necessaryfor the signing of a long-term gas supplycontract with Serbian state-owned com-pany SerbiaGas, which was complicatedafter the country adopted a new energylaw, Interfax reported.

ENERGY|GAS

Russia, Serbia ink gas supply agreement

On October 15, European Union minis-ters agreed a new set of sanctions againstIran that ban natural gas imports from theIslamic Republic. The EU measures banfinancial transactions with Iranian banksunless the transfers deal with humanitar-ian goods and are approved in advance.They also include tighter restrictions onbusiness with Iran's Central Bank, a ban onimporting Iranian natural gas, and a ban onsending graphite and metals that Irancould use for its weapons programme.

Among the more than 30 firms and in-stitutions listed in the EU's Official Journalas targets for asset freezes in Europe werethe gigantic National Iranian Oil Com-pany (NIOC), one of the world's largestcrude exporters, and the National IranianTanker Company (NITC). Justifying thedecision, EU governments said bothNIOC and NITC provide financial sup-port to the government.

A press officer for EU foreign policychief, Catherine Ashton told New Europeon 18 October that the measures againstIranian energy companies follow and en-hance earlier measures in Iran's energy sec-tor such as in particular the oil embargo,and the new import ban on gas, which pre-vent any import to the EU of Iranian oil orgas. “The companies referred to are listed,which means that any assets in the EU arefrozen and EU persons and entities can-not make funds available to them. Themeasure is in line with the policy to targetthe energy sector as it constitutes an im-portant source of revenues of the Iranianregime which are used to finance the nu-clear programme,” the press officer said.

Putting sanctions on these state compa-nies, is like putting an embargo on thewhole nation, Manouchehr Takin, SeniorPetroleum Upstream Analyst with theCentre for Global Energy Studies(CGES) in London, told New Europe on16 October. “It’s unfair that because of po-litical considerations to put sanctions oncommercial and economic issues whichhistory has shown is a very blunt tool in

public policy and politics. It causes the or-dinary people to suffer,” Takin said.“Putting sanctions on every companywhich is related to state and government islike putting sanctions on the whole coun-try, which is not justifiable. It is not theUnited Nations Security Council. It isagainst international law,” he added.

With 34trl cubic meters of natural gasreserves, Iran has the world's second-largestnatural gas reserves after Russia. But Iran’sgas reserves remain mostly undeveloped.However, an Iranian natural gas industryofficial said recently the country's naturalgas production from South Pars gas fieldwill hit 800mn cubic metres per day beforethe end of 2015, which will exceed theQatar’s output from the field.

Meanwhile, Iran’s Foreign Ministryspokesman Ramin Mehmanparast said thesanctions will not affect Iran's nuclear work.He said on 16 October the new sanctionsimposed by the EU are “inhumane”.

Iran has engaged in three rounds of talkswith the five permanent members of theUN Security Council plus Germany sinceApril, but has refused to scale back ura-nium enrichment unless major interna-tional sanctions are lifted.

Tehran denies Western accusationsthat it is trying to develop nuclearweapons under cover of a civilian energyprogramme.

Meanwhile, EU foreign policy chief

Catherine Ashton said on 15 October shehoped turning up the heat on Iran wouldpersuade it to make concessions and thatnegotiations could resume very soon.

German Foreign Minister Guido West-erwelle was more pessimistic. “Iran is stillplaying for time,” he told reporters. “Wedon’t see a sufficient readiness for substan-tial talks about the nuclear programme”.

Iran-US relations deteriorated furthertwo weeks ago when a former US govern-ment official said American authorities be-lieve that Iranian hackers, likely supportedby the government, were responsible for re-cent cyber attacks against oil and gas com-panies in the Persian Gulf. Iranian officialsdenied any role in the attacks.

Meanwhile, the European Parliament isplanning to send a delegation to Tehran.The seven-day trip, scheduled for 27 Oc-tober, was confirmed by the parliament'sDelegation for Relations with Iran at a Julymeeting. The trip could include up to 14members of the parliament. Iranian offi-cials also confirmed that the October visitis on their agenda.

But on 16 October European Parlia-ment Vice-President Alejo Vidal-Quadrastold a conference that in these circum-stances the Friends of a Free Iran inter-group call for the cancellation of this trip.“We in Europe should not send mixedmessages to the Iranian regime," Vidal-Quadras said.


ENERGY & CLIMATE

Obama-Romney

energy debate:

It's a Drill, Baby!

GOP presidential nominee Mitt Romney blamedhigher gasoline prices on President Barack Obama asthey met on 16 October for their second debate. Intheir face-to-face exchange Romney argued Obamaisn’t doing enough to make the US energy-secure andlower prices. On the other hand, Obama noted thatoil and gas production rose under his presidency,while promoting a strategy that’s also heavy on greenenergy and auto efficiency.But both men did not really discuss any detailed plan.“Romney was blaming higher gasoline prices onObama and this is not right,” Fadel Gheit, a seniorenergy analyst at Oppenheimer in New York, toldNew Europe on 19 October. “And Obama, on theother hand, is saying that production rose under hisfour-year term. But between you and me he didn’tpush the industry to invest more or to produce more.It’s that the higher oil price was good enough reasonfor these companies to produce more oil so they canmake more money.”Longer term, the situation in the Middle East isgoing to get a lot worse and the sooner the US be-comes energy independent the better off the wholeworld will be, Gheit said.It is unlikely that whoever wins the next presidentialelection will change American energy policy. The USwill only react to global events. “All we need is awakeup call: A threat on the Saudi regime becausethat would get everybody’s attention,” Gheit said. Oilprices rose with the Arab Spring – Tunisia, Libya,Egypt, Yemen and now Syria. But they are not reallymajor oil producing countries or exporting countries.“Saudi Arabia is the lead threat in my view and anypotential for a regime change will send shockwavesaround the world. And then you can see much higheroil prices,” he said.On a positive note, shale gas production has boomedin the US and will keep increasing as technology con-tinues to improve. Moreover, consumption is comingdown, efficiency is moving up and a lot of renewablescome into the supply chain. “It’s not because the gov-ernment is pushing for it, it’s because the industry isable to make money pushing all the unconventionalenergy,” Gheit said.Washington cannot single-handily change the priceof oil or the price of gasoline. Whoever is in theWhite House is not going to be a dramatic change.“George Bush was president for eight years. What didyou get out of it? He’s an oil man. Mitt Romney does-n’t know the alphabet of oil,” Gheit said. “But at leastGeorge Bush knew what the hell was going on andnothing happened for the eight years when he waspresident.”Obama and Romney have also sparred on Iran. “Obama is putting all the sanctions he can. Romneyis going to drop bombs. I mean this is not going tosolve the problem but sanctions are effective,” Gheitsaid. “Romney is trying to show his toughness. Allthis rhetoric is very easy ... Romney and everybodyelse will grow up very quickly when they get into theWhite House and sit at the big desk and make thedecisions. It becomes reality; it ’s not a dream any-more.”

[email protected] on twitter @energyinsider

By Kostis Geropoulos

ENERGY INSIDER

Among the companies listed as targets for asset freezes in Europe was the National

Iranian Tanker Company (NITC).

ENERGY|GAS

EU puts fresh sanctions on Iran, angering Tehran

A new joint programme launched by theEuropean Commission and UN womenaims to empower women politically andeconomically in the South Mediter-ranean region following last year’s ArabSpring.

On Wednesday 17 October EU Com-missioner Stefan Füle and UN Womenofficial John Hendra signed the €8.2 mil-lion programme, “Spring Forward forWomen.” It will help fund initiatives byinstitutions and civil society organisationsin South Mediterranean countries thatwant to ensure women’s engagement indecision-making and create more educa-tional opportunities for women, amongother goals. Seven million comes from theCommission, and 1.2 million comes fromthe UN.

“Arab women, like all women aroundthe world, have a crucial role in shapingthe evolution of their societies and hencethe future of their countries,” said Füle,commissioner for enlargement and Eu-ropean neighbourhood policy. “We needto ensure that women’s voices remain atthe heart of the transformation process sothat South Mediterranean countries con-tinue to strengthen the inclusive nature ofthe transition and respond to the calls ofArab women.”

The signing came during the Euro-pean Development Days, at whichHendra, the UN Women assistant sec-

retary general and deputy executive di-rector of policy and programmes, mod-erated a conference on the role ofwomen entrepreneurship in reshapingthe economy. Hendra and the otherspeakers reiterated some common sensethat is often overlooked when dis-cussing women’s rights: they can’t hap-pen in a vacuum. As women make upmore than half of the world’s popula-tion, the economic derivatives of equalopportunities benefit everyone.

This is especially true in the SouthMediterranean region, which is trying torestructure in a constructive way.

“(Spring Forward) comes at an impor-tant juncture, with transformations tak-ing place in many countries and women’svoices calling for lasting change,” Hendrasaid. “This programme is a critical steptowards advancing women’s rights againstthe backdrop of the developments takingplace in the region.”

Women played a role in initiating rev-olutions in many of the Arab Springcountries. A female blogger spurred peo-ple to action in Egypt, and similar eventshappened in Libya and Tunisia. Never-theless, women were not afforded thesame liberties following the successfulrevolution. In Libya, for example, the pre-vious regime had been providing increas-ingly more opportunities for women.Such practices were thus seen as antago-nistic following the revolutions. In addi-tion, since the rising factions were mostly

Islamist groups, women’s rights were notemphasized on some of the new agendas.

“The Arab Spring didn’t really happenfor Arab women,” said Sameera Al-Tuwaijiri, the UN Women regional di-rector of the Arab States. “What gains wehad there quickly evaporated.”

The central role that women tookwithin the Arab Spring has created newmomentum for meaningful citizenshipand political empowerment despite glob-ally low levels of political participationand economic engagement amongwomen. AlTuwaijiri argued that morewomen should be involved in politics andeconomics because of their ability to pri-oritize the right and necessary thingswhen creating a budget. Also, as womenin certain South Mediterranean countriesare going to high school and college, itmakes sense to utilize this investment.

“It’s a waste of money if we are payingfor women’s higher education but thenthey are not allowed to do anything withtheir education,” AlTuwajiri said.

Spring Forward follows a partnershipagreement between the Commission andUN Women this past April. If it is suc-cessful in providing ample opportunities,AlTuwajiri predicts “very quick gains,”particularly in reducing poverty.

“You have untapped potential,” shesaid. “Poverty is self-propagating whenthere are no opportunities. … You el-evate one aspect, and there will be adomino effect.”

FOREIGN AFFAIRS

EU-UN partnership powers Arabwomen to ‘spring forward’Commission, UN Women will support regional initiatives in South Mediterranean

By Andrew Wagaman


ANALYSIS

Syrian women living in Jordan shout slogans against Syrian President Bashar al-Assad during a protest in front of the Syrian embassy in Amman, Jordan, 23

December 2011

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As President Barack Obama and Governor Mitt Romney’s re-spective campaigns have each devoted the overwhelming ma-jority of time and resources attempting to tarnish the image of theother, the tension at Tuesday’s debate has been long expected.The debate, billed as “town hall” style, allowed for undecided vot-ers in the audience to ask questions of the candidates. These ques-tions were largely very general, allowing for each candidate toanswer with well-rehearsed lines about energy, taxes, and women’srights. For each answer, candidates carefully described their own view,while being sure to point out why that particular view is betterthan that of the opposition. Very quickly the debate escalated.From the outset, both Governor Romney and President Obamainsisted on having the last word on each topic, at times inter-rupting or talking over moderator Candy Crowley. By the timethe final question was asked, each candidate refused to stand be-hind the other, which resulted in an almost comical competitionof who would stop stepping forward first.The first significant disagreement occurred during responses tothe second question, about gas prices and the government’s abil-ity to control them, was received by both candidates as an oppor-tunity to outline their energy policies. Mr. Romney spoke ofNorth American energy independence, support for the pipelinefrom Canada, and deregulation. He accused the Obama ad-ministration of overregulation, to the point where coal plants canrealistically no long survive under the Environmental ProtectionAgency’s policies. He also accused President Obama of cuttinglicenses for oil companies to operate on public land in half dur-ing his presidency.President Obama’s response was simple; “that’s just not true”.Obama explained that his administration had indeed taken awaylicenses from oil companies who held public land but were not yetusing it. He said that he would not allow companies to hold theresources until they could be sold at a much higher profit some-time in the future. Obama further stressed the need for cleanerand renewable energy sources, defending his investments in windand solar power that have been heavily scrutinized by Romney’ssupporters. The subject of discussion was then shifted to taxes.Mr. Obama made the accusations this time by questioning themath of Romney’s proposed plan, the details of which have beenlargely unclear. He estimated that the cost of lowering tax ratesacross the board would be US$5 trillion in the next decade. Anincrease in military spending to 4% of GDP, something thatObama regularly notes has not been requested by the military,would cost another US$2 trillion in the same time period. A re-turn to Bush-era tax cuts, rather than allow them to expire as theObama administration largely favors, would cost an additionalUS$1 trillion. Governor Romney has not fully explained how hewould pay for this spending while promising to lower taxes. Theonly cuts he has specifically proposed are to such small-scale fund-ing efforts as National Public Radio, the Public BroadcastingService, and Planned Parenthood. Obama noted that these pro-grams are not remotely large enough to offset such revenue losses,so the result would either be increasing the deficit or increasingtaxes on middle-income families. Ms. Crowley asked Mr. Rom-ney what his administration would do if the numbers did not, forsome reason, add up. “Of course they will add up” replied the for-mer governor, noting his budget experience as a business execu-tive. Still, Romney did not offer any further details.In the final question, candidates were given the opportunity todecry the misleading pictures that have been painted of them.Here, Obama took the moment to remind voters of Romney’s“47 percent” comments, a video showing him criticizing 47 per-cent of Americans for being entitled and considering themselvesvictims. Governor Romney’s closing statements painted a pictureof him as a caring individual, saying that Americans deserve bet-ter than what they are being given now.

By Sam Stewart

WHO WILL BE POTUS?US ELECTIONS UPDATE

Accusations andemotions at debate

Several days after the European Union re-ceived the Nobel peace prize, to muchcongratulation, self-congratulation andbafflement, its worthiness was still beingdebated. At the European DevelopmentDays conference, which took place inBrussels on 17-18 October, it, unsurpris-ingly, came up a couple of times. Withinthe first morning alone, both EuropeanCommission President Jose Manuel Bar-roso, as well as Development Commi-sioner, Andris Piebalgs, brought the prizeinto play.

“The European Union is very proud ofgetting the Nobel peace prize”, AndrisPiebags said at a press conference, admit-ting that a lot of conversations post-awardhave been about “whether this was justi-fied or not”. His answer to that was un-equivocal. “Being Latvian, I would say yes.Yes, you can say that economically my sit-uation has changed, but that is not all: myfreedom and dignity have also changed”.For Piebalgs, this is the point; economicfreedom going hand in hand with funda-mental freedoms. You can’t have one with-out the other.

European Commission President, JoseManuel Barroso, was still accepting theplaudits in the days after the prize. Alsospeaking at Development Days, Barrososaid the prize was a “very strong recogni-tion” of the Union’s policy on foreign rela-tions and development, and the linking ofregional stability and long-term peace.Development policy, he said, should offer“not just glimmers of hope” but somethingstronger. At a critical moment for theworld economy, finance is still only onepart of the wider policy. It also means that“fundamental questions are asked aboutour social model”.

The challenge, now, for developmentpolicy, said Barroso, which was echoedelsewhere by Piebalgs is “how do we en-sure global growth is inclusive and sus-tainable?” Both are keen to, in the wordsof the commission president, “push for-ward the global development agenda”, andboth see this as an opportune moment,with statistics showing that, despite the

crisis, European citizens are willing to seean increase in development aid. Piebalgssaid that development policy should “godeeper”, and concentrate on on certain keytopics . “We should be more focussed on avery few areas”, he said. “Food security,drinking water, health, education. Thisshould be our main mandate”. This raiseda few concerns from some conference del-egates, who wondered had the commis-sion dropped its commitments to thehuman rights agenda.

Earlier Barroso had spoken about thisin his opening address, saying that with-out fundamental rights stable develop-ment is “impossible”, but Piebalgsappeared to be less emphatic, saying thatalthough “human rights should be re-spected”, and “governments should beelected”, there is “no contradiction” be-tween this policy and dealing with gov-ernments with a bad record on humanrights.

This appeared to be an allusion toChina, a middle-income country, like

India, that still has, in the commissioner’swords, “pockets of poverty”. However, hesaid, post 2015, the development agenda’s“focus should be on the least developedcountries”. The EU, he said “is not goingto replace governments”.

Symbolically held on World Food Dayand International Day for the Eradicationof Poverty, both Barroso and Pibalgs, aswell as other representatives form thepublic and NGO sectors, spoke of the 1billion chronically undernourished peoplein the world. Speaking in a post-Rio con-text, Barroso said that sustainable devel-opment goals (SDGs) need to“embedded” in the new multi-annual fi-nancial framework, which will see the de-velopment budget get €100 billion for theperiod 2014-2020, an increase of 20%.Humanitarian Aid Commissioner,Kristalina Georgieva, also said that “cli-mate change is not going to make thingsbetter”.

Critics however, will not won over soeasily. There was much criticism by politi-

cians and NGOs of the commission’s newbiofuels proposals, unveil on 17 October,which many arguing that food price in-creases and land-grabbing in the develop-ing world will continue. Barroso’sinsistence that the private sector “has acrucial role to play” in development pol-icy looks similarly to be met with some re-sistance.

However, post-peace prize, the com-mission is on something of a high, clearlybelieving that development policy is per-haps the most visible way of demonstrat-ing its commitment to global peace andstability (Piebalgs even said that the EUneeds to be “more visible” in its partnercountries). For Barroso, development pol-icy is not simply about financial aid, butabout values, and he extension of co-op-eration to like-minded partners. “Democ-racy, human rights and the rule of law –without them it is impossible to have sta-ble development”, he said. “We will notturn our back on our friends. That is notthe European way”.

EUROPEAN DEVELOPMENT DAYS

A sustainable future for development?


ANALYSIS

Andris Piebalgs: "we can now really talk about the eradication of poverty".

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There has been a substantial increase inthe number of free trade agreements(FTAs) in the Asian region and betweenAsia and other major economic partnerssuch as the EU and the US. Despite thisflourishing of FTAs, Taiwan has not beenincluded as part of this trend with the ex-ception of a major economic agreementwith China, an ‘Investment Promotion

and Protection Accord’ with Japan, andcurrent negotiations with Singapore andNew Zealand.The recent FTAs between South Koreaand the EU and US, as well as the foreseenFTA between the EU and Japan, couldhave a serious competitive impact on Tai-wan. I think we have a responsibility towardsTaiwan, not to leave it to one side. Weneed to negotiate a trade arrangement

with it, preferably an FTA. This appliesboth to the EU and the US. There would be real trade advantages insuch an agreement which have been cal-culated to be in the order of between $20-30bn dollars for the EU and substantialimprovement in the area of non-tariffbarriers could also be expected. In addi-tion to trade advantages there are someimportant investment benefits whichcould be upgraded.

Taiwan’s current political relations with themainland will make for a more constructiverelationship between the EU, Taiwan andChina, as well as the US, especially if it is basedon a more open trading relationship.

Brian McDonald was Head of the Euro-pean Economic and Trade Office inTaipei and served as Ambassador andHead of Delegation of the EU to theRepublic of Korea.

TRADE

‘Don’t forget Taiwan’

By Cillian Donnelly

By Brian McDonald

Mention Ypres to most people and they

will probably think of one thing – the

First World War.

There is, in fact, rather more to this

pretty small town than The Great War.

But, with the landmark 100th anniver-

sary fast approaching of the end of that

devastating chapter in European history,

you have to say that the bitter conflict

remains the town's main pulling power.

One good reason to visit (or revisit)

Ypres is the wonderfully newly-restored

In Flanders Fields Museum in the centre

of the town.

First opened in 1998, the museum

closed last November for a major facelift

and re-opened on 11 June.

It was always a success, attracting some

2.8m visitors since its launch but as

Fernand Vanrobaeys, of the very helpful

Toerisme Iper, explains the 'new version'

is proving just as popular, already pulling

in over 1,000 visitors a day.

As Fernand points out, "As the last

witnesses have now passed away, the

museum is more than ever the portal to

the First World War in Flanders."

The focus at the museum is on different

themes: WW1 and literature; the multicul-

tural aspect of the war; the reconstruction,

the refugees and executions.

The new museum is, in fact, 50 per

cent bigger, with a completely new

scenography, including video projections,

touch screens and soundscapes.

The renovation goes much further

than mere size, though. There are lifelike

characters, hundreds of authentic objects

and the interactive aspect has been

extended with the emphasis definitely on

the 'personal' stories of the countless

young men who perished in WW1.

Visitors also have the chance to climb

the belfry tower – all 231 steps of it - and

enjoy some exceptional views of this once

troubled region.

Every visitor receives a personal

'poppy' bracelet on arrival. The

microchip in the bracelet automatically

sets the language choice and enables the

visitor to discover four personal stories

throughout the exhibition.

The bracelet costs just €1 which is

refunded on departure. Alternatively, you

can keep it as a 'unique' souvenir of your

visit.

It is not just the museum, based in the

Cloth Market, that has got a full

makeover.

Its website (www.inflandersfields.be)

has been fully updated and extended as

well.

After a visit to the museum you can get

active with one of the many themed

walks, cycle trips or car circuits in the

area and the nearby Hooge Crater war

museum, which is crammed full of WW1

memorabilia, is also worth well worth a

visit.

Every evening in Ypres at 8pm a deeply

moving ceremony takes place under the

vast arch of the Meniln Gate: the traffic

stops and buglers from the local fire

brigade play `The Last Post`. The cere-

mony was begun in 1928 and the buglers

have performed it faithfully ever since.

Other places of interest locally include

the Cloth Hall, St Martin´s

Cathedral,the old fish market and a walk

around the town´s ramparts, said to be

the best preserved in the whole country.

There's so much to do here that you

really should try visit.

For further details contact:Ieper Toerisme, Grote Markt 34, IeperTel: 057 239 222; www.ieper.be;www.toerisme-ieper.be

17NEW EUROPE21 - 27 October, 2012FASHION & STYLE16NEW EUROPE

21 - 27 October, 2012ARTS & CULTURE

24 octobre - 18 novembre 2012 Theatre desGalleries RoyalIn a Jean Anouilh production, directed by

Fabrice Gardin Wendy Piette, Bernard Sens,

Benoît Verhaert, Nicolas d’Oultremont,

Toni d’Antonio, Kevin Ecobecq, Manon

Hanseeuw and Louise Rocco will begin the

winter season of the 'Galleries' with the clas-

sic 'Antigone'.

Antigone is condemned to die for having

offered a sepultre to her brother Polynice fol-

lowing the specific request from her Uncle

Creon, King of Thebes that this was forbid-

den. The Antigone constructed by Anouilh

is inspired by the ancient myth but steps

away from the classic notions of Greek

tragedy.

Antigone is the personification of 'la

Resistance', she goes against the rule of law,

that she deems inadequate as laid down by

Creon.

She refuses the easy road and prefers to

rebel, not wanting to fall victim to a pre-

ordained death.... Creon, for his part, takes

his vengeance by creating a 'messy' situa-

tion because that is his role, and someone

has to do it. If Antigone is forever contem-

porary, it is because she is a resistant figure,

sublime and sincere. Propelled by her

enjoyment of life and her strong will,

Antigone is perfectly placed in the indig-

nant movement begun by Stephane

Hessel. Antigone, is the story of a young

girl that chose to say “NO”. This revolt

based on dignity is a balancing act, and

timeless.

ADVERTISEMENT

In Flanders Fields

AntigoneT

his autumn, Paris pays tribute toits worldwide known Opéra cos-tume ateliers, through two unique

exhibitions. The first one ‘L’étoffe de la Modernité,

Costumes du XXème Siècle à l’Opéra deParis’, held last September at the PalaisGarnier, traced back a whole century ofthe famous theatre’s history.

The second one is held until December31st 2012, in central France’s small town ofMoulins, at the CNCS (National Centerof Stage Costumes and Scenery), a muse-um that gives us the chance to take a clos-er look at the wonderful work of CouturierChristian Lacoix who designed costumesfor the ‘La Source’ ballet, presented at the

Palais Garnier in 2011.The exhibition shows go through each

step in the setting up of this ballet perfor-mance, from inspiration boards, to thechoreography (by Jean-Guillaume Bart)and scenery sketches (by Eric Ruf).

The Paris National Costume Workshopsemploy 153 people for 44 productions a yearfor both the Palais Garnier and OperaBastille.

Each performance can count up to 530costumes, as was the case for director YvesBeaunesne’s ‘Carmen’. For the ‘La Source’ballet, 128 costumes had to be made, 55 formale dancers and 73 for female ones.

The Opéra’s workshops include severaldepartments: sewing, millinery, jewellery,costume decoration, footwear, knitwear,fabric library, and wig and makeup units. Inaddition, there are wardrobe units with 32dressers, a refurbishment workshop and alaundry/dry-cleaning one.

Mastering all the Haute Couture tech-niques, these ateliers have also receivedspecialized training for stage costumes,which enables them to design pieces fromdifferent historical periods just as well asmore contemporary outfits like tuxedos.Their exciting but difficult task requiresendless hours of handiwork and a constantsearch for creative and practical solutions,all on a tight schedule as they prepare sev-eral productions plus international tours allat once.

‘La Source’ was a challenge for the the-atre as it was a ‘remake’ of a typicallyFrench ballet in two acts and two‘tableaux’, initially staged in 1866. It tellsthe ‘Orientalist’ tale of a cruel Khan and hisharem, nymphs, a Spring Goddess and thetormented love story of Hunter Djemiland the beautiful Nouredda.

Having designed costumes for numerousballets (‘Tarnished Angels’ for KaroleArmitage and ‘Gaîté Parisienne’ forMikhail Baryshnikov’, etc) and Opera pro-ductions (‘Thaïs’ by Jules Massenet at theMET, New York, 2009 and ‘Agrippina’ byHandel at the Berlin State Opera in2010), in the past, Couturier ChristianLacroix was very enthusiastic about thisnew project.

After closing his Couture House in Fall2009, Lacroix stated that: “(his) approachwas never a purely ‘fashion’ approach; onthe contrary, (he) used stage techniques inorder to produce (his) Couture ideal, since(he) was always more or a theatrical, oper-atic designer than a trendsetter or a‘streetwear’ designer...” (cited in ‘FashionDesigners at the Opera’, HelenaMatheopoulos, Thames & Hudson, 2011)

When asked about ballet costumes’ char-acteristics, Lacroix explained that they mustbe ‘readable’ from far away, just like thescenery, which they must complement, onthe contrary to Haute Couture outfits,which are meant to be seen and examinedfrom up close. Costumes need to beextremely lightly adorned and the weight ofthe decorations used (pearls, Swarovski crys-tals, etc) has to be spread across the wholesurface of the garment. All different pieces

are sewn together to guarantee the artist’scomfort, while minimizing dressing andundressing time, as dancers usually have lessthan four minutes to change costume.

The Opéra Garnier has a long traditionof employing famous painters for itsscenery (Maurice Denis, Georgio DeChirico, André Derain, Jean Cocteau,Marc Chagall and Victor Vasarely in1984) but the use of acclaimed designersfor its costumes dates back to the ‘BalletsRusses’ and Serge Diaghilev who was thefirst to commission Coco Chanel for the‘Train Bleu’ costumes in 1924.

Ever since, numerous famous designershave experimented with ballet costumes, likeYves Saint Laurent (‘Notre Dame de Paris’,1965) or Kenzo Takada (‘The EnchantedFlute’, 1989), among many others.

Louise [email protected]

'The Nymphs' in 'La Source', Palais Garnier, 2011

© Anne Deniau

Alexis Renaud as 'the Khan', Charline Giezendanner as 'Dadjé' and the odalisques, Palais Garnier, 2011

© Anne Deniau

Designer Christian Lacroix in the ateliers of the

Opéra Garnier, working on a tutu prototype for

Naila's character

© Anne Deniau

Sketch for the Nouredda costume

© Christian Lacroix

Sketch for the Caucasian costumes

© Christian Lacroix

The Dancers and the MagicianBALLET COSTUMES & FASHION: CHRISTIAN LACROIX AND ‘LA SOURCE’

18NEW EUROPE21 - 27 October, 2012 BRUSSELS AGENDA

Welcome to NE’s Brussels Agenda. All you need to know for a complete professional and personal life in Brussels. Would you like to advertise in New Europe’s Brussels Agenda? Ask formore info [email protected] or don’t hesitate to call us at +32(0)2 5390039

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

Salle à l’étage ● Banquets - réunions - Terrase en été

Cosmo Cuisine

Av. de Tervueren,1051040 Etterbeek - Bruxelles

Tel: 02/ 732 43 31Fax: 02/ 733 61 17

RESTO BITESEccetera 402 Ch.de Wavre, BrusselsTel 02 514 4995www.eccetera.com Tucked just off Place Jordan close to the bustling EU quarter isthis real gem of a restaurant.The food, which heavily features truffle imported from Italy aswell as lovely pasta dishes, is wonderful but so too are the littletouches that set it apart from many other eating establishmentsin the city. For example, you don’t get a conventional menu herebut, rather, choose your dish from the wide selection printed onthe walls. The pasta (and wines) that adorn the shelves sur-rounding you are not there merely for decoration but to stockproduce all of which is used in the kitchen. There are three typesof menu: classic, regular and the range of specials which changeevery ten days. Everything is freshly cooked and the deserts arehomemade. Also different is the way the house wine is served –you pay according to the amount you drink which is measured onthe bottle.If you don't want to finish the bottle you simply pay forwhat you have consumed.

Novel notesGraphicology, Brussels Jazz Orchestra24 October Flagey Graphicology is a collaboration be-tween big band jazz and the graphicnovel to create a visual jazz score. Nov-elist Philip Paquet, noted for his loveof jazz in the past, has selected a seriesof existing graphic novels while writ-ing two new ones for the event. Pac-quet is best known for his graphicnovel about famous jazz musiciansLouis Armstrong and Jelly Roll Mor-ton. The stories selected for Graphicologyhave been edited into original videosprojected on a large screen behind theFrank Vaganée-directed Brussels JazzOrchestra, which plays a soundtrack ofsorts to the images. It’s both an intro-duction to jazz for graphic novel loversand an introduction to graphic novelsfor jazz lovers. It’s also another example of the Brus-sels Jazz Orchestra’s ability to composeinventive and unique music that high-lights its orchestral sound. Tickets are 20 euros, and the show be-gins at 20.00.

Morrocan rollDabateatr Citizen, Jaouad Essounani andDriss Ksikes, 23 and 25 October Les Halles DABA Maroc, the series of fall events dedi-cated to Moroccan culture, have invited thisRabat-based theatre group to perform at LesHalles. In Rabat, director Jawad Essounaniand playwright Driss Ksikes organize a weekeach month full of musical acts, dance, newwriting presentations and the staging of spon-taneous events. Started in 2009, the regularityof the initiative helped to reinstate the theaterin the city, or of "ritualized theatrical practice”in Ksikes’ words. To recognize this effort,DABA Morocco invites DABAteatr for amonth-long residency in Belgium. Besides thetwo shows in Brussels, the group is playing inCharleroi, Malines and Mons. The theme ofthe residency is based around the process ofcreating breaking news, or how to mold mediamaterial through theater. Essounani is one ofMorocco’s most prominent activist directorsand tries to highlight the complexities of thecountry through the art of realism. Ksikes isthe former editor-in-chief of Tel Quel maga-zine and now the editor of Nichane magazine.He has written two plays and a novel. On 23October, Ksikes will give a lecture. On 25 Oc-tober, the group will perform.

Brussels agenda 22 Oct - 1 Nov. In the Moog for loveScreening of Moog, a documentary byHans FjellestadAncienne Belgique, 3 November, 18:30One of the roots of modern electronicmusic is the Moog synthesizer, whose in-ventor, Robert Moog patented in 1969and continually developed ever since.Without the Moog, would the world havediscovered and enjoyed Kraftwerk, theHuman League and techno?Los Angeles based musician and filmmaker, Hans Fjellestad had previouslymade a movie on the electronic musicscene in Tijuana, Mexico before turninghis attention to Moog, having encoun-tered his first Moog synthesizer at the ageof 8.In the early ’60's Bob Moog started de-veloping oscillators, envelope generatorsand eventually, in 1966, the unique MoogLow Pass Filter.Moog always remained in direct contactwith the users of his (modular) synths andsoon understood that there was a need fora compact synth in which you could con-nect various modules in a logical manner.The result was the Minimoog, the leg-endary synthesizer with 3 oscillators andthe famous filter. In this film we follow Bob Moog both athome and visiting many old friends (usersof his synths), and in the Moog factories.He gives us a peek into the creative men-tal process and how his ground-breakingcreations came into being. Moreover, there are many well-known

and less well-known Moog synth userswho have their say (Keith Emerson, LukeVibert, Money Mark, Gershon Kings-ley,…) and it becomes apparent what aninfluence the man's design has had on en-tire generations of musicians.This film is an exciting story with andabout the creative mind who gave us oneof the most inspiring electronic instru-ments ever.Places can be reserved by emailing [email protected] (subjectMoog)

Robert Moog, the father of the syntheziser EPA

When he was in Ankara two years ago, theBritish Prime Minister David Cameroncame with a fulsome declaration of supportfor Turkish EU membership. and at thesame time declared Britain’s intention todouble its mutual trade with Turkey overthe next five years. A recent visit by a Britishtrade delegation led by Deputy Prime Min-ister Nick Clegg underlines this intention.

However, as Naz Masraff from EurasiaGroup has pointed out in a guest post in Fi-nancial Times, the Sledgehammer case hasraised questions regarding the rule of lawthat could undermine Turkey’s appeal to in-vestors. Among other barriers to foreign di-rect investment she mentions the country’sinefficient dispute resolution mechanismsand the slow pace of judicial review.

Hürriyet Daily News’ Barçın Yinançtouched on the same issue when she in aninterview with the Turkish economistKemal Derviş asked whether Turkey couldhave an international finance center with-out a fair justice system.

The European Council’s decision inHelsinki in 1999 to recognize Turkey as acandidate country paved the way for a flurryof reforms, which in October 2004 led tothe EU Commission’s decision that Turkey

had sufficiently fulfilled the political criteriafor the start of accession talks. The so-calledCopenhagen criteria for membership in-cludes a guarantee for the rule of law andhuman rights, but Turkey’s track record hassince demonstrated that this is a convenientfiction for the benefit of gullible Europeanpoliticians.

But not all European politicians have been

fooled. At least, not all the time. Liberal De-mocrat MEP, Andrew Duff, who has been aprominent cheerleader for Turkish EU mem-bership, has now revised his opinion and ad-vocates a strategic partnership rather than fullmembership. In Duff ’s view the sentences inthe Sledgehammer case were not justified andinnocent people with non-Islamic back-grounds were being punished.

When it comes to the number of judg-ments against it, Turkey is still the frontrunner at the European Court of HumanRights, although Turkey has been overtakenby Russia when it comes to the number ofapplications. Nevetheless, last October therewere 19,988 cases against Turkey pendingreview.

The EU Commission noted in its 2004recommendation that the business climatein Turkey would be improved by strength-ening the rule of law, but when an invest-ment in Turkey goes wrong, there are fewmechanisms in place to protect the foreigninvestor, who in most cases can only find re-dress in Turkish law.

The UK-Turkey IPPA (Agreement forthe Promotion and Protection of Invest-ments), which entered into force in 1996,stipulates in Article 2 (2) that “Admitted in-vestments …. shall at all times be accordedfair and equitable treatment and shall enjoyfull protection and security in the territoryof the other Contracting Party.” However,as any British investor who has fallen foulof the Turkish legal system knows, this pro-vision is non-operative.

Robert Ellis is a regular commentator onTurkish affairs in the Danish and interna-tional press

DIPLOMACY

The great Turkish rip-off By Robert Ellis


EU WORLD

Reforms are afoot but Turkey is still the front runner at the European Court of Human Rights,

but has been overtaken by Russia when it comes to the number of applications.

EP

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HUMAN RIGHTS

New aid strategies to tackle long-standing humanitarian challenges

Over the past 60 years the humanitarian aidmodel has followed a familiar pattern. A cri-sis would occur and the international com-munity would arrive, often bringingeverything they needed with them, includingtents, food, water and medicine. The em-phasis was on responding to the emergencyin the shortest time possible. This responsephase would take several weeks and oftendelay the reconstruction period, before reha-bilitation and long-term development pro-grammes could begin. The charities involvedtended to buy their goods in the more de-veloped countries of South and South EastAsia – China, India, Pakistan – and thenship them (or fly them) into Africa.Whilst the “fast response” model was un-doubtedly well intentioned and sometimespractical, it did not always take advantage ofthe role the local community could play – ei-ther as interested parties who could be activein preparing for a flood or drought, or as po-tential suppliers of goods once a crisis actu-ally hits. In light of this shift in the model ofaid delivery, the theme of AidEx this year is“The Changing Face of Aid” - bringing to-gether major humanitarian aid and develop-ment agencies, organisations and suppliersfrom across the world - to meet in Brusselsand uncover new and innovative strategies

for optimising aid resources.NGOs have previously complained of an ‘allor nothing’ approach to their funding, wherethere is very little money around before anemergency happens and then a wave ofmoney straight afterwards. This has often re-sulted in organisations and governments try-ing to procure the same goods from the samesuppliers, pushing up prices and pushingdown quality. Anticipating the area of thenext crisis or disaster helps the humanitar-ian aid community to stockpile goods closerto the centre of this future emergency. Thisnew approach saves lives by delivering vitalresources into the hands of those affected ina much quicker timeframe.Supply chains have therefore come under thespotlight. Humanitarian and developmentorganisations are forming strategic alliances,partnerships and teaming arrangements withhome-grown suppliers to deliver a more lo-calised approach to aid, and at the same timeinjecting money and self-sufficiency intolocal economies. And at the institutionallevel, the EU's emergency and developmentbranches are working together more closelyto ensure that unexpected natural catastro-phes, food crisis or economic shocks do notundermine the progress of their work in de-veloping countries.In addition to the trend of sourcing localsuppliers, the humanitarian aid community

is investing more resources in assessingwhere the next crisis is likely to break andbuilding the resilience of people to with-stand the impact of the next crisis or disas-ter. As noted by Commissioner forinternational cooperation, humanitarianaid and crisis response, KristalinaGeorgieva, every euro invested in disaster-preparedness, saves between four and seveneuros on disaster response. Taking the EU’sefforts in the Horn of Africa as a case inpoint, the European Commission initiatedSHARE in 2011 - “Supporting Horn ofAfrica Resilience”. The goal is to boost theability of the region to withstand and re-cover from humanitarian disasters such asdrought, famine and political instability,and provide long-term solutions forrefugees and uprooted populations.SHARE has been allocated over€270 mil-lion in 2012 and 2013 with a focus on re-source management, as well as improvingthe income opportunities for populationsdependent on livestock.At a strategic level, prioritising local Africansuppliers and using domestic stockpiling fa-cilities can massively reduce transport costs.In particular, the process of airlifting wastesa huge amount of money on cargo planesand causes unnecessary carbon emissions. Inan age where we are right to worry about fi-nancial and fuel resources, these are all im-

portant considerations. This is why forAidEx this year we launched our ‘Develop-ing World Supplier Zone’. We have invitedand funded 25 unique sub-Saharan Africanand South East Asian suppliers to come toBrussels to demonstrate how their equip-ment and services can be used to deliver a lo-calised approach to aid. Exhibitors includedReltex Tarpaulins Africa, Sunfire Solutionsand the Ghana Bamboo Bikes Initiative,winner of the 2012 World Business and De-velopment Award.Overall, the international aid system is ex-periencing considerable transformations andthe priorities have changed towards a focuson risk assessment, disaster-preparednessand resilience, while putting an emphasis onthe empowerment of local communities inAfrica and Asia. This is critical as we enter aphase where mega trends such as climatechange, population growth and urbanisationadd further layers of complexity to alreadydifficult humanitarian situations. In years tocome we can expect humanitarian crises tobecome more complicated and larger inscale. But the creativity and forward thinkingwe are seeing today gives me hope that wehave already found some of the solutions tomeet those challenges tomorrow.

Nicholas Rutherford is the Director ofAidEx

By Nicholas Rutherford

“The ICT industry has enormous potentialto address challenges related to rapid urban-ization through the implementation of intel-ligent solutions that help manage increasinglycomplicated information systems with a focuson sustainability”, said Edward Chen, Pres-ident of Huawei’s Corporate Social Respon-sibility Committee at the “Connected City –the Greener Future” workshop celebrated inShenzhen, China, on 16 October.The tendency of moving into big cities is in-creasing day-by-day, and solutions should betaken in sectors like energy, housing andtransport. The workshop aimed to find thoseanswers and promote sustainability, by joiningforces and experiences from companies andorganizations around the world.“Sustainability is part of Huawei’s DNA anda strategic focus on sustainability manage-ment across our operations has helped ourcompany to be more competitive and stable

in the long-term”, said Chen. “We have been working closely with variouspartners to build connected cities through theadoption of ICT technologies and have de-veloped a series of e-city solutions that seek toconstruct safe, well-managed, and greencities”, he added.To promote green development, the Chinesecompany has designed a portfolio of compet-itive and efficient, end-to-end e-City greensolutions. For instance, smart transportationallows the sharing of transportation infor-mation over great distances; smart grids ad-dress problems such as safety and efficiency;and smart financial solutions automatisesbusiness operations, enhancing connection ofthe financial industry as a whole.Edward Chen highlighted the importance ofthe workshop as a way to collaborate with its“partners, customers, employees and localcommunities to promote the developmentand application of green and sustainable ini-tiatives everywhere we operate.”

By Nerea Rial

Huawei outlines plan for green e-Cities


TECHNOLOGY

Huawei

In March, Google introduced its new PrivacyPolicy, which, among others, integrates users'information from all its services, and after sev-eral months of investigation the 27 EU DataProtection authorities have published theircommon findings.According to the letter, it's not possible to de-termine that Google respects the principles oflimitation, data quality, data minimization, pro-portionality and right to object. Besides, the Pri-vacy policy doesn't contain any limit concerningthe collection and use of users' data.Due to the questions raised when the giant an-nounced the changes on 24 January, the Arti-cle 29 Working Party ordered the French dataprotection authority CNIL to lead an investi-gation into Google's new line.The company didn't provide satisfactory an-swers to key issues, such as the description of itspersonal data processing operations, asked intwo questionnaires. Therefore, and afteranalysing some documents, experts from CNILhave led EU Data protection authorities todraw their conclusions and make recommen-dations. They ask Google to provide clearer andmore comprehensive information about thecollected data and purposes of each of its per-sonal data processing operations. They recom-mend, for instance, to present a three-level detailto not degrade users' experience.

“The investigation confirmed our concernsabout the combination of data across services”,says the letter. Because the American companydoesn't provide user control over this issue, itshould modify its practices by reinforcing citi-zens' consent and their opportunity to chose;improving the right to object (opt-out); andadapting combination tools to specific purposes(e.g. by differentiating the tools used for securityand those used for advertising).ICOMP, which supports principles that are es-sential to a healthy online environment, believesthe investigation has shone a light on Google’sbusiness model which depends on amassing asmuch data on individuals as possible in order tosupport its advertising business."The only reason that users have not movedaway from Google over their faulty privacypractices is that they are so dominant”, saidICOMP Director Auke Haagsma, adding that“if online markets were genuinely competitivepeople would have alternatives and couldchoose companies that better protected theirprivacy." "We recognize Google’s key role in theonline world. Our recommendations do notseek to limit the company’s ability to innovateand improve its products, but rather tostrengthen users’ trust and control, and to en-sure compliance with data protection legisla-tions and principles”, ends the letter. NR

EU urges Google to change Privacy policyThe giant should provide clearer information to users

Online privacy is a significant concern for mostEuropean citizens and businesses, making theissue one of the main discussions among insti-tutions, companies and political bodies.

The European Parliament presented earlierthis year its General Data Protection Regula-tion proposal (GDPR) to harmonise Europeanrules related with consumers' rights and theirpersonal data. However, the current existenceof the Directive on Privacy and ElectronicCommunication (e-Privacy Directive), gener-ates a co-existence that cannot offer data-pro-tection legislation, technology and serviceneutrality.

The first Directive was launched in 1997, butthe telecommunication sector has changed, andrapidly, since then. Despite the GDPR intro-duces some of the elements included in the e-Privacy Directive into general privacy rules, itdoesn't address other problems, and, therefore,solutions are needed to differentiate betweenthe big range of today's services and consumers.

Clarity and consistency are required betweenthe two instruments in order to create effectiveprivacy experiences and drive the digital econ-

omy. To give some examples of this inconsis-tency, the e-Privacy Directive covers only EUestablished companies, while the EP proposalincludes also companies abroad which targetEuropean customers.

Harmonisation is not only necessarythroughout Europe, it includes also countrieslike US and China, explained the MEP LaraComí, during a seminar in Brussels organisedby GSMA Europe and ETNO on 16 October.She added that she doesn't “feel confident withthe overlapping” and that all the institutionsshould work together “to make this regulationmarket-friendly.”

Comí considers that the discussion will notgenerate big problems in the European Parlia-ment, but may have some difficulties in theCouncil, “I'm realistic”, she said.

"Communication today generates a greatamount of sensitive data, and it is clear that in-consistencies within the e-Privacy Directivewould call for review in order to apply the samerules to all similar data services. It is a questionof consumer consent, which should be in-formed, specific, free and unambiguous", saidPeter Hustinx, European Data Protection Su-pervisor (EDPS).

Inconsistencies between both documents willaffect over all consumers, which “must be ableto expect that if they want to be protected they

don't have to worry about privacy”, said LarsKindervater, member of GSMA Europe, andalso telecommunication companies that will bein disadvantage in comparison with their rivals.

The GDPR will not be approved before thenext parliamentary term and meanwhile dis-cussions on how to address the incompatibilitywill take place. Nevertheless, according toGiuseppe Abbamonte, from European Com-mission DG Connect, negotiations will taketime but “timing and content is still unknown.”

In the other hand, Joe Mcnamee, from EDRi(Digital Civil Rights in Europe) explained dur-ing the seminar that the e-Privacy is not neces-sary as is covered by the GDPR andKindervater added the the document has to bechanged. “We have a problem and we have todeal with it now”, he stated.

Both the GSMA and ETNO welcomed theoverhaul of the European data protection rulesand consider it an appropriate opportunity toharmonise the handling of personal data acrossEurope. The associations will continue to workwith the relevant policy makers to ensure a soundregulatory regime for the benefit of all. NR

e-Privacy Directive, GDPR inconsistencies must be solvedThe co-existence of both elements can affect EU consumers and businesses

It is not clear whether Google's Privacy policy respects the privacy data principles | EPA/JULIAN STARATENSCHULTE

MEP Lara Comí doesn't “feel confident with the

overlapping”

A new cyber espionage tool linked to theFlame virus has been infecting computersin Lebanon, Iran and other regions, ac-cording to security researchers fromKaspersky Lab.

The “miniFlame” was discovered in Julyand is "a small and highly flexible mali-cious program designed to steal data andcontrol infected systems during targetedcyber espionage operations”, said the firm,which also discovered the Flame virus inMay.

The company explained tat the smallerversion is based on the same architecturalplatform as the previous one, which waslinked by The Washington Post as part ofa US-Israeli effort to slow Iran's nuclearactivities. Besides, the virus can operateindependently and is able to make screenshots and also to spy instant messagesprogrammes and browsers, such as Inter-net Explorer and Mozilla, or even Mi-crosoft Office and Adobe Acrobat.

This is "a high precision, surgical attack

tool” that can be used against objectives,over all Lebanon, France, US, Lithuaniaor Iran. "Most likely it is a targeted cyberweapon used in what can be defined as thesecond wave of a cyber attack”, accordingto Alexander Gostev from Kaspersky Lab.

"We believe that the developers ofminiFlame created dozens of differentmodifications of the program," Kasperskysaid. "At this time, we have only found sixof these, dated 2010-2011."

Flame was linked to Stuxnet, anothervirus that attacked systems used to man-age water supplies, oil rigs, power plantsand other critical infrastructure, speciallyin Iran.

Last week, US Defense Secretary LeonPanetta, confirmed that Iran was behindthe cyber threatens in the Persian Gulfduring the summer. Despite his wordsdidn’t blame directly the Middle East re-gion, he explained that the US is workingon defense systems to avoid a “cyber PearlHarbor.” Likewise, he added that the cur-rent situation is a “pre-9/11 moment” andthe government must “defend the nation.”

By Nerea Rial

“Mini Flame” virus spies Middle East

21NEW EUROPE21 - 27 October, 2012TECHNOLOGY

MiniFlame virus was designed in July designed to steal data and control infected systems

Anonymous threatens Dutchinternet service providers

At the beginning of the month, hackersfrom Anonymous announced the start ofOperation Dutch Pirate Bay (OpDutchPi-rateBay) as a way to protest against the blocksestablished to the sharing-site by someNetherlands’ Internet service providers(ISPs.) The operation was supposed to start a cou-ple of days ago on 13 October and the targetswere supposed to be organizations such asanti-piracy outfit BREIN, Tele2, Ziggo,UPC and KPN. However, the sites wereforced to take these measures by a ruling ofthe Dutch court; they didn't decided to takeit voluntarily. All of them have appealed butit’s unsure when the court will serve the case.All the providers are preparing for the attack,which didn't take place yet. For instance,Tele2 has send an email to all their businesscustomers warning them on the possible fu-ture consequences. In the other hand, UPCand Ziggo didn't inform their costumers, but

are also taking measures against the action. “We are very displeased”, Anonymous hack-ers said in the initial video statement. “The onlyones that actually profit from the Pirate Bayblockade are the sick millionaires of the enter-tainment industry and some more sickeningparasites, but this doesn’t profit the artists, northe Internet users and citizens at all.”The Anonymous member who publishedthe threaten did it without consent of theothers “brothers and sisters”, therefore an-other statement appeared later apologisingfor telling hacktivists to focus their efforts onDutch ISPs.“I agree with the fact that something mustbe done against the blockade, but this is notthe way to do it,” the second message says.“No, attacking providers is a huge mistake.We must focus on the people that caused thisblockade: BREIN Anti-Piracy and the cor-rupt judge. Our utmost apologies for the in-convenience, it shall not happen again.” NR

from YouTube

A few weeks ago it was thought that Applewould announce the iPad Mini on 17 Oc-tober, but because there were no event-in-vitations sent to the media the launched isexpected to take place one week later.

If these suppositions are correct, the pres-entation will be just days before Microsoftwill launch Windows 8 and its Surfacetablet which is a rival to the existing iPad.

According to a screen-shot of an inventoryleaked and posted by MobileGeeks, the newmini tablet will come in 16 different modelsand will have a prize between €249 and €649.Besides, there will be four different storageoptions: 8GB, 16GB, 32GB and 64GB.

Likewise, the device will be available inblack or white with Wi-Fi only or Wi-Fiand cellular date totalling 16 combinations.However, what it's not clear is whether thetablet will be 3G or 4G.

Despite the tech company didn't confirmthe rumours, several web sites started to“imagine” how will be the iPad mini. For in-stance, the site PC-Tablet published thatthe product will sport a 7.85 inch diagonalscreen, a Lightning port and maybe a A 6processor. Nevertheless, it will not haveRetina Display.

On 19 September the rumours of a newdevice were confirmed when the Chineseblog BoloPad leaked pictures of someoneholding a small iPad in his hand. Also, ac-cording to The Wall Street Journal, Appleset orders for more than 10 million iPadmini units on 8 October.

For the moment, the rumours were notconfirmed, so the only thing we can do nowis wait and see whether a new product willfight in the tablet market against KindleFire, Nexus 7 and Surface. NR

iPad mini to launch on 23 October

FINLAND | TRANSPORT

Capacity tops for Poyry railwayPoyry, the global consulting and engineering firm, has beenengaged in a project which will improve railway capacityon Swiss-German border. Poyry's Urban business group-led consortium is managing and supervising refurbishmentof the German - Swiss cross border railway line Erzingen- Beringen, a section of the Hochrheinbahn (Upper RheinRailway), it was reported on 12 October. According to aPoyry press release, improvements will enable more frequentpassenger traffic across Germany and Switzerland.Hochrheinbahn is owned by German DB AG, but ap-proximately 95% of the line is located on Swiss territory.The investment for the whole rail section totals €80 million.The work is carried out in consortium with German engi-neering consultant PTB Magdeburg Gmb, and Poyry'sshare of the assignment is approximately 50%.

GERMANY | COSMETICS

Douglas perfume chain set to be soldFounders of German perfume and cosmetics retailer Douglassaid on 15 October that they would be teaming up with USprivate equity group Advent International to launch a €1.5 bil-lion takeover of the group, The Local reported. Advent is of-fering €38 per share for all outstanding shares in thepublicly-listed retailer, Douglas said in a statement. With €39.4million shares in issue that would value the company at €1.497billion. Douglas said the group's three main family sharehold-ers - Oetker with 25.8%, Kreke with 12.78% and Muller with10.8% - had all agreed to accept the offer and Advent so far hadassurances for at least 50.5% of the company's share capital.Upon completion of the takeover, the Kreke family would thentake a 20% stake in the investment vehicle making the offer,Beauty Holding Three AG, with the other 80 percent held byinvestment funds operated by Advent International.

LITHUANIA | POLITICS

European Liberals congratulate election results Following announcement of the preliminary results of theParliamentary elections in Lithuania, Guy Verhofstadt thePresident of the European Liberal Democratic Party statedthat he was very please to acknowledge that Liberal andDemocrats in Lithuania scored a convincing victory in theParliamentary elections. “I would like to congratulate Vik-tor Uspaskich (ALDE MEP) and his Labour Party (Darbopartija) that has doubled its support and with 20% of thevote, as the largest political party is poised to form the in-coming government. This is an excellent result for theLabour Party that in the opposition party has worked vig-orously and consistently in support of its electorate.

FINLAND | E-GOVERNANCE

Basware buys Certipost’s e-invoicing networkFinnish purchase-to-pay and e-invoicing company Baswarehas bought parts of the Certipost business of Belgium’sbpost for €18.2 million, it was reported on 16 October. Byacquiring the network and e-Invoicing business of Certi-post, Basware will become the market leader in e-Invoicingin the Benelux market. This is Basware’s second acquisitionin 2012, after its acquisition of the leading e-Invoice Ger-man operator First Businesspost. Basware is the globalleader in purchase-to-pay solutions with more than a mil-lion users in over 60 countries. In 2011, Certipost had morethan 85,000 clients using its technology to exchange doc-uments electronically and it reaches over 100,000 compa-nies in Europe through roaming.


EUROPEAN UNION

What is the role of Smart Cities inCopenhagen?

At a time with fewer resources andmore city assignments it is necessary tothink smart.

The overall strategic objectives inCopenhagen revolve around the ambi-tion of combining the ability to developan attractive city for its citizens with eco-nomic growth, innovation and job cre-ation. The Green Growth strategy alonedelivers a range of answers to howCopenhagen can employ its strong posi-tion in the area of sustainable urban de-velopment, energy supply etc. to promotegrowth, innovation and employment.The efforts of the municipality regardinggreen growth have sought to change therole of the municipality from only beinga public authority and purchaser to be-come a partner in solving the challengesthe city is facing.

The Copenhagen Municipality SmartCity effort should take as its startingpoint a more efficient concerted planningand collection and application of the city’sdata. Such an approach will build on theexisting work with partnerships on devel-oping the city in the area of green growth.

The specific approach can be describedwith reference to two areas. An effort tomerge data across the public-, private-,and municipal sectors and to make thesedata available for Stakeholders in the mu-nicipality

The Copenhagen urban space facili-tates a number of data registrations anddata flows with different purpose, own-ership and application. The ownershipspreads across utility suppliers, energy op-erators, traffic operators, social servicesand last but not least, a range of munici-pal departments.

This challenges the possibilities of op-timal control of the city’s resources re-garding energy, water, traffic, waste,service and construction work. It also en-tails that the market does not have accessto developing new commercial services,which are demanded by the citizens andcan contribute to handling the city’sstrategic challenges.

On this background three primarytarget groups can be defined regardingthe merging of data and data availabil-ity: The municipality by creating a bet-ter overview and control of improvedmanagement information from merg-ing and real time collection of data aswell as development of public servicesfor the citizens.

Market agents by creating innovationand developing new commercial prod-ucts for the benefit of the city (intelli-gent traffic information, energy control,for example) The citizens of Copen-hagen both as data suppliers and dataconsumers. Mobile cell phones can forinstance register citizens’ movement inthe city (CPH real time) and they canactively deliver data for improvement ofthe city (through the application “Giv

os et praj” (Tell us) for instance). Thiscan help formulate the vision of thesmart city.

- An effort to integrate a digital infra-structure as a central element in the fu-ture development of the city.

Smart City is on the one hand aboutbetter exploiting the data already existentin the city, and on the other hand to inte-grate thinking about data flow and datacollection in the way we plan future cityareas. As a supplement to the physicalplanning a smart city should thereforeconsider how the city’s digital infrastruc-ture shall look like.

Copenhagen owns a range of ”dead” in-frastructure in the shape of lamppost,road signs, bicycle lanes, traffic lights etc.When we develop new parts of the cityin the future, we should make an assess-ment whether the new infrastructurewith advantage could collect data. Fur-thermore the municipality should focusfar more on using data to promote flexi-bility and focus on application of data inthe development of the city. Examples areapplication of data registration to changethe use of roads and squares during nightand day. The municipality should play aproactive role to ensure that different in-terests in the city’s development such asproperty owners, developers, utility com-panies, electricity companies etc. developcommon plans for construction of utilityinfrastructure etc.

Copenhagen is currently involved inthe EU-funded FP7 Program in theTransform Consortium.

What major projects is the SmartCities initiative currently working on inCopenhagen?

Copenhagen is currently working onThe efforts described above are guidedby the following focus points:

• Ensure a more optimal resource use

in the city ranging from energy to eco-nomic resources

Example: Optimal visibility and coor-dination of construction- and wire workfor instance in city development areas sodigging only has to occur once.

• Apply the market to develop newproducts and (public)services for the ben-efit of the city and its citizens

Example: Municipality data are madeavailable for commercial use. At the sametime private agents are encouraged tomake their data available so data may becombined to create new solutions acrosssectors and organizations.

• Create better tools for governing thecity’s energy, traffic flow etc.

Example: Shared energy data fromNorthern Harbor (Nordhavn). Detaileddata about energy consumption in build-ings in Northern Harbor are connectedwith building data BBR-data and mu-nicipal demography data for use in energyplanning, energy saving campaigns, expe-rience for energy renovation, traffic app,Smart Grid etc.

• Support the development of solutionsfor the city which are needs-based and es-tablishes the framework for creating amore flexible and organic city based onthe citizens needs and application.

Example: Direct communication withthe citizens of Copenhagen and censorsin the urban space, as well as readingsfrom cell-phones etc. can give informa-tion about real and desired use of squaresand roads, which can ensure lighting inthe right places and in the right hours, ac-cording to the wishes of the citizens.

• To create the framework for a moreoperational and strategic use of the assetsof the municipality (companies and in-frastructure) in order to secure economicgrowth.

• Establish a foundation for interna-tional branding of Copenhagen.

Copenhagen Smart City, an insightDENMARK|TECHNOLOGY

A computer animation from January 2011 by BIG Bjarke Ingels Group on 10 February 2011 of the

new Waste-to-Energy Plant at Amager, Copemhagen, Denmark. Located in an industrial area near the

city center, the new Waste-to-Energy plant will be an exemplary model in the field of waste manage-

ment and energy production, as well as an architectural landmark in the cityscape of Copenhagen.

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23NEW EUROPE21 - 27 October, 2012EUROPEAN UNION

BELGIUM | BANKING

KBC proposes sale of treasury sharesKBC has announced the proposed sale of its treasury sharescurrently held on its balance sheet and representing 5.1% ofits total share count of 358 million shares via an institu-tional private placement by way of an accelerated book-building limited to institutional investors. The results of theprivate placement will be announced as soon as possible.KBC’s strategic plan, as approved by the European Com-mission in November 2009, included the sale, within anagreed timeframe, of 18.2 million treasury shares held byKBC on its balance sheet.

AUSTRIA | COMPETITION

EU clears Austria's Andritz to buy German SchulerThe European Union's antitrust body said on 16 Octoberit is clearing the proposed acquisition of German metalforming company Schuler AG by Austrian technology andindustrial company Andritz AG, it was reported. "Thetransaction would not raise competition concerns, becauseit would not significantly alter the market structure and themerged entity would continue to face sufficient competi-tion," the commission, which has antitrust powers in theEU, said in a statement.

BELGIUM | BUSINESS

Royal Friesland Campina buys IDB BelgiumRoyal FrieslandCampina, a Dutch company which pro-vides milk products including dairy-based beverages, infant& toddler nutrition, cheese, butter and cream, has success-fully completed acquisition of IDB Belgium. The companyfrom Genk is a pre-packer of hard and semi-hard cheesesand packs cheeses for a number of international clients. Italso sells its products domestically and exports to elevencountries. With this acquisition FrieslandCampina expandsits market position with pre-packed cheese for both retail-ers and the food service industry (catering and restaurants).IDB Belgium will become part of FrieslandCampinaCheese, Butter & Milkpowder but continue to operate in-dependently. It has one production facility that comprisesfifteen packaging lines with a large variety of slicing andpackaging forms and size options, from 15 grams to sixkilograms. The plant employs around 160 people.

AUSTRIA | TRANSPORT

Rail partnership with far India Transport ministers from India and Austria have signed anagreement which aims to strengthen relations between thetwo countries, it was reported on 15 October. Indian Rail-ways Minister, CP Joshi has signed a memorandum of un-derstanding (MoU) with Doris Burse, Federal Minister ofTransport, Innovation & Technology of Austria, to build along-term relationship and bilateral cooperation on rail,road infrastructure and transportation technology matters.Speaking on the development, Joshi said: “The areas of co-operation have been identified in the fields of tunnelingtechnology, training and upgrading of skills like a psycho-logical qualification test for locomotive drivers, track main-tenance as well as track monitoring and mechanised layingof track, signalling & telecom and traction and rollingstock.” Indian Railways is looking forward for Austrian par-ticipation in massive capacity augmentation, modernisationand safety enhancement plans of railways in the comingdecade, which includes setting up of the dedicated freightcorridors, increased production and procurement of rolling-stock, the minister said.

Solvay, an international chemical andpharmaceutical Group based in Bel-gium, announced on October 18 thatit is reinforcing its leadership on thegrowing world market for SOLEFPolyvinylidene fluoride (PVDF) bystarting up new production capacityat its Tavaux plant, France. Solvayinvested 26 million Euro to increasethe PVDF production capacity atthe plant by 50%.

Solvay's SOLEF PVDF is, amongothers, used for demanding applica-tions in oil & gas extraction, asbinders and in separators inLithium-Ion and Lithium-Metal-

Polymer® (LMP) batteries in hybridand electric cars, in semiconductormanufacturing, in water purificationmembranes for waste water filtrationequipments or in batteries and ca-pacitors which enable energy storagein a wide range of electronic devices.The outstanding properties ofSOLEF® PVDF combined with themultiple available processing tech-niques make this fluorinated poly-mer a prime material for newapplications in various demandingenvironments and applications.

“Global demand for PVDF grewmarkedly in the last five years. Our

SOLEF® PVDF with its impressivecompetitive edge resulting from itsproduct quality and consistency isclearly benefiting from such a signif-icant market demand,” commentedAugusto Di Donfrancesco, GeneralManager of Solvay's Global BusinessUnit Specialty Polymers. “Beingused in an increasing number of ap-plications that benefit from theglobal megatrends, we expectSOLEF® PVDF demand growth tocontinue. Our customers know theycan build on our long experience andstrong track-record as PVDF pro-ducer,” he added.

Solvay increases capacity in France

BELGIUM|INVESTMENT

Slovay's capacity expands in France © Emerson

Raiffeisen Bank announces downsizing in SloveniaSLOVENIA|BANKING

The Slovenian subsidiary of Aus-tria's Raiffeisen Bank has announcedit will reduce its scope of operations.The gradual adjustment will involvelayoffs, which could affect half of thebank's workforce, according to unof-ficial sources, Invest Slovenia re-ported on 16 October.

The business daily Finance quotedlast Tuesday unofficial sources as an-nouncing the sacking of around 150of what are presently 326 Raiffeisenemployees in the country.

The first redundancies at the bank,which recorded a € 5.5 million loss

last year, were allegedly already seenthis spring.

The bank's representatives saidthat the move was a result of thecompetitive environment in Sloveniaand an optimisation in the distribu-tion of funds within the Raiffeisengroup. Funds will be reduced across alonger period.

They confirmed that this wouldalso involve layoffs, but would notprovide any details, saying that talkswith local authorities and employeeswere still under way. RaiffeisenBanka plans to keep all of its present

17 branch offices in Slovenia, sayingthat service to customers would notbe disrupted.

It added that Slovenia is a smalland relatively saturated bankingmarket, while Raiffeisen had a lim-ited potential, which had made it thetenth largest bank on this market.

This situation is specific withinthe group, which is why the meas-ures are specific for the Slovenianmarket, the bank said, explainingthat the funds of the Slovenian sub-sidiary accounted for around 1% ofthe group's total funds.

BULGARIA|LEGISLATION

CRPD provisions followedThe Bulgarian government approved during its meeting on17 October a plan to bring the existing legislation in linewith the provisions of the Convention on the Rights of Per-sons with Disabilities(CRPD). The two-year action plancontains measures aiming at bringing the legal frameworkand policies for people with disabilities in accordance withthe provisions of the international document. According tothe Bulgarian authorities, the successful implementation ofthe convention as part of the domestic law required compli-ance with a clear plan for carrying out commitments whichto outline the specific steps and to clearly define the rolesand functions of various government authorities and stake-holders. The approved action plan covers ten objectives, in-cluding, inter alia, establishment of bodies responsible forthe coordination and monitoring of the Convention; ratifi-cation the Optional Protocol to the convention; preparationof the first report to the UN Committee on the Rights ofPersons with Disabilities; raising awareness and changingattitudes in the country on the issue of the rights of personswith disabilities and preparation of a long-term nationalstrategy on the rights of people with disabilities in the con-text of the implementation of CRPD. Bulgaria signed theCRPD in 2007 and ratified it in March this year. However,so far the country only signed the additional optional pro-tocol in 2008. Up until now, the convention was ratified by125 countries, 23 of them members of the European Union.According to Stig Langvad, one of the eighteen independ-ent experts at the United Nations Committee on the Rightsof Persons with Disabilities, the fact that so many EU mem-ber states have signed the CRPD showed commitment andthat the European Union in general was in favour of theconvention and its provisions.

(Stanislava Gaydazhieva)

ROMANIA|AUTO INDUSTRY

Magna to open factory Canadian company Magna, a producer of exterior and in-terior car parts, which has contracts with car maker Ford,will inaugurate its factory at Craiova, in Romania, at theend of October, Romania Insider reported on 16 October.An opening ceremony is scheduled for 25 October inCraiova. According to local media, the factory already em-ploys 100 people. The Magna Exteriors & Interiors factoryis located on Henry Ford St, close to the Ford factory.

ROMANIA|AGRICULTURE LAND

Conditions on foreigners Romania plans to impose strict conditions on foreignersbuying agricultural land in order to protect local farmersand prevent speculation, Agriculture Minister Daniel Con-stantin said on 16 October, Balkans reported. The govern-ment will either cap the number of hectares that a foreigneris allowed to purchase or request that the buyer has farm-ing experience, Constantin said. "We must take steps toprotect Romanian farmers from the European ones, whohave more money," the minister said.

ITALY|ECONOMY

Aid package for Spain Italy's share of a potential €100bn aid package for Spainwould represent the equivalent of 1.5% of Italy's gross do-mestic product, Italian Finance Minister Vittorio Grilli toldLa Repubblica. "If there is a package for Spain of no lessthan €100bn, Italy's share would be the equivalent of 1.5%of GDP," he said. "We have to be generous but we also haveto evaluate with prudence the impact on public finances.Especially since we are going through a phase that is stillvery, very difficult," he added.


EUROPEAN UNION

ATHENS - German Finance Minis-ter Wolfgang Schaeuble’s declarationon 14 October that Greece would notdefault and Chancellor AngelaMerkel’s statement during her visit toAthens two weeks ago that she wishesthat Greece remain a member of theeurozone are very important in estab-lishing investor confidence in thedebt-ridden country, German MEPJorgo Chatzimarkakis, who is also thePresident of DHW-German GreekBusiness Association, told New Eu-rope in Athens on 15 October.

Speaking on the sidelines of an IHTinvestors forum “Moving Forward”,Chatzimarkakis noted that the politicalclimate changes. He said attracting in-vestors to come back to Greece is a verysensitive issue. “Investors want to see athorough and rock-solid basis for theinvestment and this unfortunately is notthe case right now. But what is the pre-condition for that change is politicalchange. Now the statements that havebeen made by Mrs Merkel and MrSchauble that they wish Greece to stayin the eurozone - Mr Schauble alreadysaid that he can’t imagine a default ofGreece - are very, very important,”Chatzimarkakis said. “Because all thischatting rubbish, especially in Germany,about Greece’s exodus from the euro-zone did a lot of harm. As a chairper-son of the German-Greek BusinessAssociation I know many investors whofelt not encouraged at all to come toGreece because of this talk of Germanpoliticians about the exodus,” he added.

“Now since Mrs Merkel’s visit inGreece I think we can say this talk isover. But it would immediately start

again if the Greek government relaxesand the Greek government stops the re-forms. This goes hand-in-hand andthere is a unique opportunity at the mo-ment to continue the programme –maybe not the troika programme – butthe programme of reforms in order tocontinue to change the political climateand then the investment climate wouldchange also,” the German MEP toldNew Europe.

His statement came as Greece strug-gles to seal a deal with its creditors onnew austerity measures.

The change in tone reflects a re-assessment by Merkel of the costs andbenefits of her tough public stance to-wards Greece. Asked if Merkel haschanged her position in light of theproblems facing Spain, Portugal andItaly, Chatzimarkakis said the debt cri-sis inherited from the Lehman Broth-ers crisis, from the bank crisis, madeher an unwilling geo-economic rulerof Europe. “Her approach to the crisiswas a small-step approach. Definitelythese small steps had one advantage –small steps can be rectified easilyrather than big steps. Nevertheless, thedisadvantage was that all these stepswere in the wrong direction,” he said.If Merkel and Schauble dispelled fearsof a euro breakup by ruling out a de-fault of Greece at the very beginningthe crisis would have been muchcheaper to overcome, Chatzimarkakissaid. “She did that mistake unfortu-nately. She questioned the Greek casebecause she was afraid that would shegive a guarantee then Greece wouldnot reform herself. Now she has evi-dence that Greeks will reform thecountry and that changes the wholestrategy,” the German MEP said.

But Greece is not the only problem.“The problem of course, as you said, isthe PIGS – Portugal, Italy, Greece andSpain - the southern countries and thebig, big problem is that 20 years afterfounding the single market in Europewe have to understand that especiallythe south has fallen out of competitive-ness,” he said, adding that these coun-tries became markets for products fromcentral European states but they werenot acknowledged also as producers.“That was a mistake by us all of us thatwe have to rectify now. And I think thenew approach of Mrs Merkel to go forthe so-called fiscal union which is noth-ing else than a federal state when itcomes to the common management ofthe currency but also fundamental partsof the economy is the right way,” Chatz-imarkakis said.

The President of DHW-GermanGreek Business Association also calledfor investments in smaller units thathave an impact on the local and re-gional economy. “I think big effortsfailed. I followed the Helios projectquite intensively and I have to say ifit’s not clear and sure that big parts ofthe turnover will stay in Greece theproject won’t fly,” he said, referring to aproject for the production of electric-ity from photovoltaics in Greece andits export to Germany.

He said Greeks were rightfully stub-born about opening the country inorder to be sold out because that wouldbe the big danger at the moment. “It hasto be made sure that the projects thatforeigners invest in will lead to a raise ofeconomy at the local and regional levelwith significant effect on the job marketand on productivity in Greece,” Chatz-imarkakis said.

MEP: Merkel ends damaging Grexit talk but Greece must stay alert

GREECE|ECONOMY

German Chancellor Angela Merkel and German Finance Minister Wolfgang Schaeuble said Greece would not default.


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TURKEY | ECONOMY

Deficit to decline to 7.5% predicts IMF A recent International Monetary Fund (IMF) prognosisstates that Turkey is expected to witness a 3% economicgrowth and a revived domestic demand should push Turkeyto resume its impressive growth next year. On concludingmission in Turkey, the International Monetary Fund (IMF)recently unveiled a report 2012 Article IV consultation forTurkey. "The conditions for resumption in domestic demandgrowth are in place, with unemployment at a 10 year low, rel-atively healthy private sector balance sheets, and more sup-portive macroeconomic policies," the IMF said in the report.The report reads, “Beyond 2012, the economy is in a goodposition to return to its long-term trend growth rate ofaround four percent.” It also warned that the country's cur-rent account deficit remains a risk. Turkey’s current accountdeficit might decline to 7.5% of GDP as of this year and thereare chances of additional modest improvements in both in-flation and the external deficit for 2013, Zaman reported.IMF said that the moderate pace of growth is helping toloosen imbalances. Macroeconomic policies have started todeliver disinflation and a reduction in the current accountdeficit. IMF say, “Inflation-headline and core-is deceleratingbut is expected to end the year above the top of the centralbank-s inflation target band.” IMF expects the medium-termfiscal plan for 2013-15, which is currently underway, to setgoal of strengthening the budget structure given that the2012 budget deficit target will be missed. The Bank suggestedthe Turkish authorities to follow a narrow policy path.Macroeconomic policies should remain supportive of eco-nomic growth as long it is in harmony with disinflation anda further reduction in the external deficit. Turkish authoritiesneed to tighten the macroeconomic stance in order to accel-erate growth, undermining inflation and current account ob-jectives, said IMF. The Bank noted a great headway insupervision and regulation to strengthen financial stability.The banking supervisor (BRSA) is expanding the coverageof consolidated supervision and tightening the rules on assetclassification and provisioning requirements. Such measuresare expected to close some of the gaps in the regulatory andsupervisory framework.

FYROM | ECONOMY

India looks at investments in industry FYROM’s vice prime minister and minister of finance ZoranStavreski, recently attended an interactive session on ‘Emerg-ing investment and trade opportunities in FYROM’ organ-ised by the Confederation of Indian Industry in India,MRTOnline reported. Within the framework of the session,the minister said that his country is seeking opportunities toattract investments from India, for two upcoming hydropower plants with a total capacity of 650-Mw involving re-quiring an investment of €700 million. Besides looking for in-vestment for these large power projects, FYROM is alsoenticing investment for sectors including real estate, agricul-ture, infrastructure, pharmaceuticals, IT and automotive.FYROM, a fast-growing emerging economy in the south-eastern part of Europe also has free-trade agreements to pro-vide access to markets in 41 countries with over 650 millionconsumers. Stavreski said that the country is eyeing privati-sation of up to 49% of its state electricity generation com-pany for around $1.2 billion. Such a move will help FYROMto completely liberalise its energy market by 2015. The min-ister also informed that the country which attracts 4-8% for-eign direct investment (FDI) of its gross domestic product(GDP) every year, will offer a single-window for adminis-trative services, besides low real estate costs and utilities.FYROM’s constitution envisages fair treatment to foreigninvestors, allowing 100% foreign ownership of a company,Stavreski said. It was reported that FYROM has proposedthe procedure of signing a double-taxation treaty with India,which is expected to be closed by January 2013.

The European Parliament agrees withthe Commission that Albania should begiven EU candidate status if the countrycontinues to address necessary reforms.

On 18 October, a week after the Com-mission released its Progress Report onAlbania, a Parliament delegation pre-sented its own recommendations to theforeign affairs committee. Its conclusion:Albania has made significant progress inrelieving political polarisation. With ad-ditional efforts made to stop corruption,discrimination and media restriction, itsentry into the EU should be seriouslyconsidered.

“Albania is genuinely trying to complywith relevant preconditions,” rapporteurNikolaos Chountis (NGL, Greece) said.“We’ve had very fruitful cooperation, andif it comes out with requisite reforms, itshould get accession status. It’s extremelyimportant we give Albania clear encour-agement to continue the efforts it is un-dertaking.”

Chountis highlighted Albania’s role inmaintaining regional stability and foster-ing good relations with other WesternBalkan countries. He also emphasizedthat Albania’s desire to join the EU doesnot belong just to the current governmentany longer. Many opposing politicianshave shown an interest as well.

This has demonstrated progress towardfulfilling Copenhagen political criteria.The country recently ended a politicalimpasse that began in June 2009, whenthe results of parliamentary elections werecontested and the opposition party boy-cotted parliament. The success of thecountry’s parliamentary elections nextspring – whether or not they can be heldunder international standards – wouldlikely affirm Albania’s candidate status.

“Internal political problems have been

a long-time obstacle,” delegation chairEduard Kukan (EPP, Slovakia) said. “Al-bania has made pertinent amendments…I would like to be optimistic, and hopethe upcoming elections don’t hamper theprocess.”

The delegation reiterated the Com-mission report’s demand for rule oflaw implementation at all levels ofgovernment. The adoption of consti-tutional amendments limiting the im-munity of high officials and judgesmarked an important step in the fightagainst corruption.

However, it’s necessary for further im-provements to strengthen the accounta-bility and independence of the judiciary.This includes the strengthening of inves-tigations, prosecution and convictions incorruption cases, particularly organisedcrime. Only once adoption has led to ac-tual implementation, Kukan said, can Al-

bania talk about tangible progress. Other areas of concern in Albania in-

clude the conditions of social institutionssuch as prisons, orphanages and hospitalsfor the mentally ill. Some delegationmembers raised issues about Albania’scontinued resistance to LGBT rights.Others maintained Albania must allowfor more freedom of the press to prove itis serious about the democratic criterianecessary to join the EU.

MEP Maria Koppa (Socialists andDemocrats, Greece) specified the areas ofcorruption to which Albania is still vul-nerable – specifically, human trafficking.She also said it needs to have more a hu-mane judicial system in dealing with mi-nors.

Given the steps Albania has taken,Chountis suggested the EU make an ef-fort of its own in recognizing theprogress.

Albania making progress, Parliament agrees Delegation lauds political reform, says Albania should get candidate status

ALBANIA|EU

Princess Mathilde of Belgium pictured during a visit at Durres Archeological Museum and

Amphitheatre on the third day of the visit of WHO's Special Representative for Immunization,

Princess Mathilde of Belgium, in Tirana, Albania, Friday 30 March 2012. Princess Mathilde is

committed to focusing on health care workers, and recognizing their critical role in immuniza-

tion, she visits Albania from 28 to 30 March.

Power project brings together Abu Dhabi’s TAQA, EUASTURKEY|ENERGY

Abu Dhabi National Energy CompanyPJSC (TAQA) in collaboration with Elec-tricity Generation Co. Inc. (EUAS) recentlycompleted a pre-feasibility study and pre-pared an investment model for a majorpower project in the Afsin-Elbistan regionof southern Turkey, Zaman reported.

The government of the Republic ofTurkey and the government of theEmirate of Abu Dhabi inked a "jointdeclaration" which envisage strong sup-port for the co-operation betweenEUAS and TAQA regarding invest-ment in and optimisation of an existinglignite power plant in the Afsin-Elbis-tan region, the development of minesand the establishment of new powerplants in the same region.

To this effect, talks on an Intergovern-mental Agreement are expected to con-

clude prior this year. Signatories to thedeclaration were His Excellency TanerYildiz, Turkey's Minister for Energy andNatural Resources, and His ExcellencyHamad Al-Hurr Al-Suwaidi, Memberof the Executive Council of the Emirateof Abu Dhabi and Chairman of the De-partment of Finance of Abu Dhabi in thepresence of His Excellency Khaled AlMu'alla, Ambassador of the UAE to theRepublic of Turkey.

The joint declaration was held aftermeetings between His Highness SheikhMohammed bin Zayed Al Nahyan, HisExcellency Abdullah Gul, the Presidentof the Republic of Turkey, and His Ex-cellency Recep Tayyip Erdogan, thePrime Minister of the Republic of Turkeyin February 2012 and a subsequent agree-ment to explore energy investment op-

portunities in Turkey, announced in Maythis year.

Regarding the joint declaration, Al-Suwaidi said that it bolsters ties betweenturkey and Abu Dhabi and has been asuccessful follow-up to the official visitmade by His Highness General SheikhMohamed bin Zayed Al Nahyan, CrownPrince of Abu Dhabi and DeputySupreme Commander of the UAEArmed Forces. Carl Sheldon, Chief Ex-ecutive Officer of TAQA, said that thecompany considers Turkey as a new andexciting market which is in accordancewith its strategy to expand in the MiddleEast, North Africa and Europe.

Sheldon said that Turkey has greatgrowth dynamics and entice foreign di-rect investment to develop its indigenousenergy resources.

By Andrew Wagaman

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SERBIA|EU AFFIAIRS

EU membership a prioritySerbian Foreign Minister Ivan Mrkic recently stated thatEU membership still remains the foreign policy goals ofthe country, Beta news agency reported. In this context hesaid that Serbia needs to develop its ties with all other coun-tries as well. The minister regards Russia as extremely im-portant due to Kosovo. He said, “It is important to us thatRussia is protecting our territorial integrity with its posi-tion and that is only natural.” In addition, other westernpartners and China were also considered as importantcountries for Serbia.

SERBIA|ECONOMY

Inflation seen at 12%Governor of the National Bank of Serbia (NBS) Jorgov-anka Tabakovic stated that the inflation rate in Serbia wouldtotal 12% by the end of the year. It will peak in the thirdquarter of 2013, after which it should return to the targetlimits around the middle of the year, she stated. Tabakovicunderscored that granting inter-loans between companiesas a necessity because of the non-payment of dues and thelack of financial discipline constitute important inflationgenerators which NBS cannot affect.

MONTENEGRO|POLITICS

Ruling coalition winsOn October 14, Montenegro's ruling coalition won the coun-try's parliamentary election. Estimates put the ruling coalitionled by political veteran Milo Djukanovic's Democratic Party ofSocialists in a comfortable lead with more than 46% of thevote, Montenegro Times reported. This is the third parlia-mentary election in Montenegro since the country's break-upfrom Serbia in 2006, with a high turnout of some 70% of morethan 500,000 registered voters. The government had calledearly elections in a bid to capitalise on the European Union'sdecision to open accession talks with Podgorica in June.

BiH|DIPLOMACY

Sarajevo, Karachi up tiesBosnian President Bakir Izetbegovic recently paid a visit toPakistan to explore new avenues of co-operation to furtherenhance the existing good relations between the two coun-tries, Fars news agency reported. Izetbegovic led a high leveldelegation which comprise of bankers, businessmen andthe university rectors. Pakistan’s Prime Minister Raja Per-vez Ashraf hosted a luncheon in honour of the President ofBosnia & Herzegovina. Both sides discussed ways to en-hance bilateral co-operation in various fields and issues ofmutual interest. In course of talks, the pakistaani premiersaid both Pakistan and Bosnia and Herzegovina needed towork on Preferential Trade Agreement so that economicrelations between the two countries are on firm foundation.

CROATIA|DIPLOMACY

Iran, Croatia discuss tradeCroatian Ambassador to Tehran Esad Prohic recently con-cluded his diplomatic mission in Tehran. Speaking at thefarewell ceremony of the ambassador, Iranian Foreign Min-ister Ali Akbar Salehi said that his country plans to boostcloser ties with Croatia, Javno reported. He called on bothcountries to forge closer co-operation in trade and eco-nomics field. In turn, the Croatian official commendedIran's attempts to expand bilateral relations between thetwo countries and efforts in the promotion of mutual co-operation with Croatia. He presented a report on his activ-ities in different political, economic and cultural fieldsduring his tenure in Tehran.


ENLARGEMENT

On 16 October, Radovan Karadzic for-mer Bosnian Serb leader was due to de-fend himself in Hague against thecharges of genocide, war crimes andcrimes against humanity.

Karadzic, 67, denies the accusationsand at the hearing he is going to call asfirst witness Col Andrey Demurenko,the chief of UN peacekeeping force inSarajevo on 1995.

According to Peter Robinson, legaladvisor of former Serb leader, “He[Radovan Karadzic} will expose his per-sonal views on the crimes listed in theindictment.”

Robinson said Karadzic will chal-

lenge the scale of the massacre. “Hedoes not know how many people werekilled, but according to him it's certainlynot 7,000…no policy was implemented(at Srebrenica), he did not know pris-oners would be executed,” legal adivosrcontinued.

The genocide charge againstKaradzic, is because of the death ofmore than 7,000 Bosnian muslims inSrebnica in 1995. He is also prosecuted,for the 44-month siege of Sarajevowhich led to the death of more than12,000 civilians.

According to Al Jazeera, the wartimeSerb leader will call 300 witnesses to

testify including Greek President ofDemocracy Karolos Papoulias. Papou-lias was Greece’s Foreign Minister dur-ing the war in former Yugoslavia.

Karadzic said that Papoulias testi-mony will prove that he is not guilty forthe shelling of Sarajevo’s Markale mar-ket on February 1994, in which 67 peo-ple died.

The poet and trained psychiatrist, isalso accused for his involvement in thetaking of UN observers and peace-keepers as hostage using them ashuman shields during a NATObombing mission against BosnianSerb targets in 1995.

Taradzic opens genocide defence at Hague

BiH|WAR CRIMES

EIB offers €49mn to support local economyMONTENEGRO|LOAN

The European Investment Bank (EIB)has signed in Podgorica four contractsworth €49mn in favour of the local econ-omy in order to support the country’s Eu-ropean integration, Montenegro Timesreported.

“Thanks to this operations we continueto support the country in the central sec-tor of small and medium enterprises andin the reconstruction process after theflood,” EIB Vice-President Responsiblefor the Western Balkans Dario Scanna-pieco said. The loan signed by the EIBand the Investment and DevelopmentFund of Montenegro (IDF) concerns thefirst €25mn tranche of a total €50mn loanaimed at supporting small and medium-

sized enterprises (SMEs) and other proj-ects in the country.

The operation will finance small andmedium sized projects carried out bySMEs as well as final beneficiaries of anysize and ownership, including local au-thorities, in the fields of the environmen-tal protection throughout the country, incompliance with EIB eligibility criteria.A minimum of 70% of the loan amountwill be allocated to SME projects. €20million will go for a project which con-tributes to repairing and reconstructingthe major damage to the public infra-structure (roads, bridges, water supply, hy-draulic infrastructure) due to theexceptional rainfall and flooding of No-

vember and December 2010 as well as forthe acquisition of some new equipmentto improve weather forecasting and floodwarning. €3.5mn are slated for sewagetreatment in Pljevlja.

This agreement refers to a EuropeanUnion contribution in the form of a grantfrom the IPA (Instrument for Pre-Ac-cession) National programme for Mon-tenegro in support of investment inPljevlja co-financed by the EIB loansunder the project entitled “Montenegrowater and sanitation”. €0.6mn fundingwas allotted to rebuild the water supplysystem in Cetinje under the provision ofthe Western Balkans Investment Frame-work (WBIF).

Belgrade: Export ban in line with CEFTA agreementSERBIA|TRADE

Serbia’s Foreign and Internal Trade min-istry recently stated that the regulationbanning export of sugar beet, sunflowerand soy, adopted by the government doesnot flout the rules of the World TradeOrganisation (WT0). The ministry alsosaid that the ban also does not violate the

CEFTA agreement, Beta news agencyreported.

The statement was made after Croat-ian Agriculture Minister Tihomir Jakov-ina stated that Serbia had violatedCEFTA agreement by not allowing thepreviously contracted export of sugar beet

to Croatia. Last month the Serbian min-istry discussed with Croatia about a pos-sibility that the regulation would beadjusted so to allow export of sugar beetto Croatia for the merchandise that hadbeen paid for in advance before the regu-lation came into effect.

Former Bosnian Serb leader Radovan Karadzic enters the courtroom on the first day of his defence against war crime charges at the International Crim-

inal Tribunal for the Former Yugoslavia in The Hague, Netherlands, 16 October 2012.

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SWITZERLAND | BANKING

UBS looks at cutting 2000 tech jobs UBS is set to axe around 2,000 jobs in information technologyas part of a larger cost-cutting programme, sources close to thebank said on 13 October, Economic Times reported. The jobcuts, which are still being hammered out, would come along-side an undisclosed number of further job cuts from UBS busi-ness units, Tages-Anzeiger reported. UBS's main business armsare a flagship private bank for the wealthy and an investmentbank. According to Tages-Anzeiger, IT staffers fear that UBScould ultimately shed as many as 20% of overall jobs, whichwould translate to cuts of more than 12,000 people in total. Aspokesman for UBS declined to comment on potential jobcuts in IT or elsewhere. UBS Chief Executive Sergio Ermottiis struggling to unite his 12-person top management boardbehind cuts he says are necessary to improve profitability andhit targets. Although his managers agreed on the need for cuts,infighting has emerged over details such as how to centralizework, which would crimp the division heads' responsibility.UBS has already pledged to cut 3,500 jobs as part of earliercost cuts, but this is seen as too little by most analysts given adramatic slowdown in investment banking business and tightercapital rules governing riskier business. Some analysts expectUBS to disclose further restructuring steps as soon as its third-quarter earnings release on 30 October.

ICELAND | RESEARCH

Reykjavic University nominated for cloud tech Cloud Engineering has been nominated for a start-up awardat Arctic 15, a conference held in Helsinki in October. Theteam behind the firm includes two RU Computer Sciencestudents. The public can vote for the company online. CloudEngineering is nominated in the category Best EnterpriseStartup. The Arctic 15 conference in Helsinki is intended forinvestors and entrepreneurs in the Nordic and Baltic area.The company has developed the Datatracker software, whichfacilitates simple processes for automatic data access online.An example of a Datatracker user could be a company thatneeds to watch the competitor´s pricing and have until nowneeded specialist IT services. Datatracker thus allows formore operational efficiency and cost reduction.

SWITZERLAND | BUSINESS

Coca Cola Hellenic turns SwissCoca Cola Hellenic confirmed moving its corporate basefrom Greece to Switzerland, and transferring its primarylisting from Athens Stock Exchange Market to London.According to Deutsche Welle, the company wanted a morestable business and taxation environment. The Greekmultinational was country's biggest firm by market valuewith a capitalisation of €6 billion. According to Reuters, thecompany represented “about a fifth of the Athens bourse’stotal.” “A primary listing on Europe's biggest and most liq-uid stock exchange reflects better the international charac-ter of Coca Cola Hellenic's business activities andshareholder base…Athens Stock Exchange is dominatedby mostly domestic companies, London is more suitablegiven our international activities” the company announced.The announcement adds, “the main reason for the move istaxes and the fact that since Greek banks are waiting to berecapitalized, they no longer have money to lend to com-panies.” The company firmly believes that the move toSwitzerland will grant better access to equity and debt cap-ital markets and facilitate flexibility in raising new funds.Kostis Hatzidakis, Greek Development Minister com-mented that he is not happy with the departure, but he can-not dictate to each company what moves it should make ornot. “What we can do beyond the fiscal measures is con-tinue down the road of structural reforms,” minister said.

Two weeks after a free trade agree-ment between Switzerland and HongKong came into force, the Swiss busi-ness network Osec has opened a hubin the Chinese metropolis to take ad-vantage of its newly opened door toSwiss markets, Swiss Info reported on15 October.

At the opening of the organisa-tion's 19th such business centre lastweek, Osec president Daniel Küngcalled Hong Kong the “gate to China”and noted its importance as a regionalmelting pot for exports from Switzer-land and the European Union. HongKong is Switzerland’s third-largestAsian trading partner, after China andJapan.

While exports to mainland Chinafrom Switzerland dropped by 15%over the last year, Swiss exports toHong Kong rose by 19% last year to6.3 million Swiss Franks ($ 6.75 mil-lion) and have seen a nearly 20% jump

in the first eight months of 2012.Roughly half of those exports are

watches, which are bought up by some25 million Chinese tourists in HongKong every year.

About 190 Swiss businesses arecurrently operating in Hong Kong,many of them banks, producers ofluxury goods and trading companies,according to Osec. However, otherexport markets have had a hardertime establishing themselves in theonetime British colony: chemicaland pharmaceutical products makeup barely six per cent of Swiss ex-ports to Hong Kong, machineryproducts just five per cent.

The hub, which will be based out ofthe Swiss consulate in Hong Kong,will especially cater to small andmedium-sized businesses in the bio-medical engineering, electronics, in-formation technology, multimedia andenvironmental arenas. It will help

businesses establish contacts in the re-gion and will serve as a liaison be-tween markets in Switzerland andHong Kong.

The new Swiss business centre willalso be responsible for improving ex-ports from Hong Kong to Switzer-land, according to State Secretariat forEconomic Affairs (SECO) presidentMarie-Gabrielle Ineichen-Fleischwho spoke at the grand opening. Overthe past year, exports from HongKong to Switzerland increasedroughly 3.1% to 1.15 billion Franks.

The free trade agreement withHong Kong was signed by Switzer-land and European Free Trade Asso-ciation (EFTA) member statesLiechtenstein, Norway and Iceland inJune of 2011. It went into effect abouttwo weeks ago.

Osec operates business hubs insome 18 countries around the world;the first was opened in Italy in 2001.

Business hub to pool Asia focused investors

SWITZERLAND|TRADE

Hong Kong announced on October 19, 2012 measures to cut down emissions from power companies starting in 2017, in an ongoing effort to tackle air

pollution in the often-smoggy southern Chinese city.

Hydro and Orkla form new companyNORWAY|ENERGY

Norsk Hydro and Orkla have agreedto combine their respective profiles,building systems and tubing business,creating the world’s leading alu-minium solutions provider, NorwayPost reported on 15 October.

The new combined company, to benamed Sapa, will be a 50/50 joint ven-ture owned by Orkla and Hydro.

The agreement covers Profiles andBuilding System, as well as Extrudedand Welded tubes, of Orkla’s fully-owned Sapa and all of Hydro’s Ex-truded Products business area.

Based on 2011 figures, the com-bined company will have around 47billion Norwegian crowns in annualrevenues, underlying EBITDA ofaround 1.9 billion and approximately25,000 employees. The new companywill have leading positions in Europeand North America, and strongfootholds in emerging markets, in-cluding Brazil, Argentina, China,India and Vietnam.

Completion of the transaction is ex-pected to take place in the first half of2013, following approvals from relevant

competition authorities. Sapa will haveits headquarter in Oslo, Norway.

”Together we are creating a strongercompany with a broader competencebase and a highly experienced man-agement team. In today’s very chal-lenging market conditions, thecombined company will be better po-sitioned for restructuring and valuecreation. This will strengthen Orkla’sability to successfully capture the valuepotential of our aluminium business,”said Orkla’s President and CEO AgeKorsvold.

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GEORGIA|POLITICS

Ivanishvili’s citizenshipOn 16 October, Georgian President Mikhail Saakashvilirestored the citizenship of Georgian Dream coalition leaderand likely next Prime Minister Bidzina Ivanishvili, newsagencies reported. Ivanishvili also holds French citizenship,and during the electoral campaign it was also made illegalfor political candidates to have dual citizenship. MananaManjgaladze, spokesperson for Saakashvili, said a decisionwas made on the basis of articles 27 and 33 of the law onGeorgian citizenship, and that the president gave Georgiancitizenship to Ivanishvili, which will come into force as soonas his French citizenship is suspended.

AZERBAIJAN|DIPLOMACY

Baku, Kiev discuss tiesWithin the framework of the celebration of the 15th an-niversary of GUAM, Azerbaijan’s Foreign Minister ElmarMammadyarov met with his Ukrainian counterpartKostyantyn Gryshchenko during a visit to Ukraine. Incourse of talks, both sides discussed prospects for bilateraland multilateral co-operation in Kiev, the News Service ofthe Ministry of Foreign Affairs of Azerbaijan said. Thesides also exchanged views over prospects to enhance co-operation within international organisations. Agenda of themeeting of Council of Foreign Ministers of GUAM beingheld in Kiev on the occasion of the 15th anniversary of theorganisation was also discussed at the talks.


Spanish companies visitSpanish companies paid a visit to Azerbaijan on 14-18 Oc-tober to hold meetings with local government and privatecompanies and attend the Azerbaijan-Spain businessforum. The visit of the Spanish firms to Azerbaijan was or-ganised by Spanish Agency PromoMadrid and accreditedSpanish Embassies in Turkey with support and initiative ofthe Embassy of Azerbaijan in Spain. Azerbaijan was rep-resented at the forum by company Azpromo. Spanish firmsexpressed interest to develop ties with Azerbaijan in trans-port, railways, engineering, infrastructure, water segment,the environment, energy, architecture and the oil-gas sector,news agencies learnt from report of the Embassy of Azer-baijani in Spain.

AZERBAIJAN|TRADE

Baku, Berlin ties expandAzerbaijan’s Economic Development Minister ShahinMustafayev recently had talks with visiting former secre-tary of state of Germany Otto Hauzer, news agencies re-ported. Both interlocutors were pleased with the economicand trade co-operation between Azerbaijan and Germany.They stressed the importance of the activity of the high-level working group on trade and investments betweenAzerbaijan`s Economic Development Ministry and Fed-eral Ministry of Economics and Technology of Germany,as well as business forums and meetings.

ARMENIA|POLITICS

Georgian-Armenians positiveArmenian deputy from Georgian Dream party RuslanPoghosyan recently stated that the government has justformed in Georgia and it is too early to make commentsabout new precise programmes. However he said that Ar-menians residing in Georgia have great expectations fromthe new government, Armenia Liberty.org reported.Poghosyan said, “The question of integration is of a specialimportance for Armenians living in Georgia.


EASTERN PARTNERSHIP

The outcome of the third session of theintergovernmental commission on eco-nomic co-operation was a protocolsigned between Azerbaijan and Hun-gary, Azerbaijan’s Ministry of EconomicDevelopment reported.

Signatories to the protocol were co-chairmen of the intergovernmentalcommission - Azerbaijani Minister ofEconomic Development ShahinMustafayev and Hungarian State Sec-retary Peter Szijjarto. At the meeting,

both sides signed a pact on co-operationin education, science and culture sectors.They also plan to collaborate in indus-try, agriculture, construction, transport,mutual investment, information andcommunication technologies, trade, sci-ence, education, tourism, culture andenvironment sectors.

Mustafayev noted that relations ineconomic and cultural fields betweenthe two countries yielded successful re-sults. Currently a strong legal basis has

been created for co-operation betweenAzerbaijan and Hungary. The ministerinformed that both countries have so farinked 30 documents on various areas ofco-operation.

In turn, Szijjarto said that Hungaryhighly values its ties with Azerbaijanand stressed the relevance of develop-ment of relations between the twocountries. The minister expressed inter-est of Hungary to expand co-operationwith Azerbaijan.

Baku-Budapest to co-operate in several sectors


View of Baku’s modern skyline. Azerbaijan and Hungary will co-operate in various sectors, including education, science and culture.

Georgia pledges peaceful power transferGEORGIA|POLITICS

At the presidential palace, Georgian Pres-ident Mikheil Saakshvili recently pledgedthat his party would turn over powerpeacefully to Bidzina Ivanishvili, the win-ner of recent parliamentary elections, TheMessenger reported.

The Georgian Dream party led bybillionaire Bidzina Ivanishvili won on 1October parliamentary elections, de-feating Saakashvili’s party. “We, as re-sponsible authorities, and I as thepresident who is the guarantor of theconstitution, will ensure that the trans-fer of government functions happenswithout any excesses,” Saakashvili saidafter the 40-minute meeting at the pres-idential palace in Tbilisi.

Describing the transfer as a historical

event for the country, Saakashvili said,marking the first time the Caucasian re-public has changed governments demo-cratically in its post-Soviet history. Thesurprise victory of Ivanishvili overSaakashvili’s once dominant party in therecent parliamentary polls triggered fearsof political turmoil. However, Ivanishvilisaid his coalition would treat the oppo-nents with honor. “Me and my team havemanaged to create a precedent for thedemocratic transfer of power in Georgiaand this will have its deserved place inGeorgia’s history,” he said.

Ivanishvili, during his campaign, saidhe wanted to improve relations withRussia, but stressed that he will maintainSaakashvili’s staunchly pro-Western for-

eign policy. “We have a common opinionon foreign policy, which our both sidesstated before. Europe and Euro-Atlanticspace is an essence of our strategy andthere will be continuation of the courseof the previous government,” hesaid. The president of Georgia and thenewly elected prime minister stronglyagreed that joining NATO is one of themain goals of Georgia. “We will be as-piring towards Europe, we will be stead-fast and Georgia will surely manage tobecome a NATO member very soon,”said Ivanishvili.

He pledges to normalise ties withGeorgia which was strained due to a briefwar between the former Soviet neigh-bours in 2008.

Defence minister visits BrusselsARMENIA|DIPLOMACY

During a recent visit to Brussels, Ministerof Defence of the Republic of ArmeniaSeyran Ohanyan had meetings with EUofficials.

At the meeting, both sides discussedmatters regarding prospective of EU-Ar-menia programmes in the realm of secu-

rity and defence, Armenia Liberty.orglearnt from Information and Public Rela-tions Department of Ministry of Defenceof the Republic of Armenia.

Ohanyan took part in the sessions ofMinisters of Defence of countries partici-pating in NATO missions in Afghanistan

and Kosovo under the supervision of Cen-tral Station of NATO. The Armenianminister also met with ministers of De-fence of countries allocated under theNorthern command in Afghanistanwhich was organised by Minister of De-fence of Germany.

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29NEW EUROPE21 - 27 October, 2012EASTERN PARTNERSHIP

UKRAINE|ENERGY

New hydro units at Dnister On 17 October, Ukraine’s Energy and Coal Industry Min-ister Yuriy Boyko said his country is preparing to launch inoperation two new hydropower units at the Dnister Hydro-electric Pumped Storage Power Plant (HPSPP), the largestsuch facility in Europe. The units will be commissioned afterOctober 20 and will triple the plant’s current power output.“We have a major event coming after October 20,” Boykotold President Viktor Yanukovych at a government meetingbroadcast by the state television. “We have implemented yourorder and will be launching in operation the second stage ofthe largest [in Europe] Dnister plant.”

BELARUS|DIPLOMACY

Next Putin meeting in Dec. Belarus’ President Alexender Lukashenko told journalistsrecently that his meeting with Russian counterpartVladimir Putin in Sochi on 15 September was conductedin an absolutely friendly tone. “I left in a mood with the un-derstanding that it would be hard for us to find friends inthis world. And we must keep together, the two, so to say,Russian, on a large scale, peoples, or else we will be beatenwhen apart,” he said. According to Lukashenko, the nextmeeting with Putin will take place on 18-19 December, justafter a meeting of the Belarusian and the Russian Prime-Ministers. The meetings will bring “solutions to urgentquestions in Belarusian-Russian relations”.

BELARUS|TRAFFICKING

Combat against slave tradeInternational co-operation for the sake of combating slavetrade should be more effective, Valery Voronetsky, said Be-larus Resident Representative in International Organiza-tions in Vienna. Valery Voronetsky led the Belarusiandelegation at the sixth session of the conference of the UNmember states, which are parties to the UN ConventionAgainst Transnational Organized Crime. Voronetsky madea report about how Belarus fulfils the international obliga-tions specified by the convention.

BELARUS|ENERGY

Oil pressure increasesRussia has shortened the volume of the supplies of carbohy-drate raw materials to Belarus in the fourth quarter and forcesBelarusian authorities to fulfil other obligations, which arecompletely unprofitable for Minsk, local media reported. Inparticular, Moscow keeps insisting on Belarus to supply its oilproducts to the Russian market, news agencies reported. Inthe current year Belarus exported to the West the major vol-ume of the oil products made from Russian oil. In January-August 12.94mn tonnes of oil products were exportedincluding 5.8mn tonnes to the Netherlands and 1.83mntonnes to Latvia. Significant amount of Belarusian oil prod-ucts was exported to Ukraine – 3.15mn tonnes.

BELARUS|DIPLOMACY

Ambassador to NamibiaAmbassador of Belarus to the Republic of South Africa (theRepublic of Angola, the Republic of Mozambique and theRepublic of Namibia on concurrent) Andrei Molchan pre-sented his credentials to President of Namibia HifikepunyePohamba on 17 October, the press service of the Foreign Min-istry of Belarus reported. Molchan and Pohamba exchangedviews on the development of relations between the two coun-tries. The diplomat noted the readiness of Belarus to further de-velop mutually beneficial co-operation in all areas, stressing theimportance of strengthening trade and economic interaction.

On 15 October, the EU Foreign Af-fairs Council decided to prolong byone year the sanctions on Belarus.Council’s statement said that EU “re-mains gravely concerned about thelack of respect for human rights,democracy and the rule of law”.

EU called upon the Belarusian au-thorities to stop the harassment of civilsociety, the political opposition andthe independent media, asking the im-mediate release of political prisoners.

“As not all political prisoners havebeen released and no released prisonerhas been rehabilitated…the Councildecided to prolong the existing re-strictive measures until 31 October2013,” the EU statement mentions.

Moreover, the Council expressed itsdisappointment on the September 23,parliamentary elections, “in which all109 winning candidates came frompro-establishment parties.” The sanc-tions include targeting individuals andcompanies associated with PresidentAlexander Lukashenko’s government.

On the other hand, the BelarusianForeign Ministry issued a statement,saying that the EU move “practicallyfreezes” the relations between the twoparts at the level “that does not suit the

interests of either side.”The statement continues “We be-

lieve that this policy goes contrary tothe notion of neighbouring rela-tions…to overcome the existing dif-ferences both sides must meethalfway.”

Despite the sanctions Minsk an-nounced that it has no intention of al-

lowing back European ambassadorswho were proclaiming human rights.Swedish Ambassador Stefan Erikssonwas expelled from the country over ac-cusations for pro-democracy activities.

Lukashenko is in power since 1994and is described as Europe’s last dicta-tor by former US president, GeorgeW. Bush.

Extended EU Sanctions on BelarusBELARUS|HUMAN RIGHTS

Authoritarian Belarussian President Alexander Lukashenko speaks as he attends the Dazhynki

harvest festival in the town of Gorki, some 270 kolometres east of Minsk, 21 September 2012.

Lytvyn: EU-Ukraine dialogue to continue after electionsUKRAINE|POLITICS

The Chairman of Ukraine’s Parliament –the Verkhovna Rada, Volodymyr Lytvyn,has said that his country and the EuropeanUnion will resume their dialogue on theAssociation Agreement if Ukraine holdsdemocratic parliamentary elections on 28October 28. "I think we should solve theproblems step by step. The key task todayis to hold the elections in Ukraine accord-ing to acceptable standards. I think that ifwe manage this task, the range of oppor-tunities for dialogue with the EuropeanUnion will expand significantly," Lytvyntold journalists on 19 October, while com-menting on a statement of Chairman ofthe Committee on the Affairs of the EUof the Bundestag Gunther Krichbaum onthe possible blocking of the signing of theEU-Ukraine Association Agreement ifformer Ukrainian prime minister and op-position leader Yulia Tymoshenko is notreleased.

Lytvyn said the situation has moved sofar that the problem of Tymoshenko hasbecome a problem for Ukraine and the

EU. He added that this problem shouldbe solved only via legal ways, although thiswas also difficult.

Earlier, Krichbaum stated that the Bun-destag, Germany's parliament, will blockthe signing of the EU-Ukraine Associa-tion Agreement if Tymoshenko is not re-leased from prison. "The AssociationAgreement between the European Unionand Ukraine will be blocked. As a chair-man of the Committee on the Affairs ofthe European Union of the Bundestag, Iwill recommend that this be done until thecase against Yulia Tymoshenko is closed…For us, this case is a symbol of Ukraine'sattitude towards human rights anddemocracy," he said.

Meanwhile, Tymoshenko, in her state-ment to the congress of the EuropeanPeople's Party (EPP), has asked Europeanpoliticians to restrict the freedom of move-ment in European countries for represen-tatives of the current Ukrainian authorities."Most importantly, it is time to restrict thefreedom of those who are killing democ-

racy in my country. Do not let the regimemembers and cronies travel freely to yourcountries to disseminate propagandist poi-son there. Do not let them make corrupttransactions via your countries and start in-vestigating the cases," reads the ex-pre-mier's address, which was posted onBatkivschyna's Web site.

She also called on European politiciansnot to let the families of Ukrainian offi-cials "indulge in your luxuries with moneytaken fraudulently from Ukraine's hard-working people".

"Only by denying these freedoms tothose who are denying their fellow citizensfreedom will the Yanukovych regimebegin to realize that there are real conse-quences to its contempt for law and forEurope," Tymoshenko said.

She also asked European politicians tosend official observers to Ukraine to mon-itor the parliamentary elections on 28 Oc-tober and "shout out at every fraud theymay see, but not only on the election day,but already now".

Chisinau to lease military base to NATOMOLDOVA|DEFENCE

Breakaway republic Transdniestria'sDefence Minister Vladislav Finaginsaid Moldova is planning to permitNATO to lease a military base nearBulboaca, Vestnik Kavkaza reportedon October, citing NezavisimayaGazeta. Moldova has been insisting

on withdrawal of the OperativeGroup of Forces (Russia) togetherwith peacekeepers from Transdnies-tria for a long time. The recentamendments to the Constitutionturn out to be targeting NATO,rather than Russia.

Kishinyov has been using the USand Romania to build up forces inthe last half a year. Their specialistsare preparing special subdivisions ofthe Interior Ministry and the Servicefor Information and Security ofMoldova.

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KAZAKHSTAN | TECHNOLOGY

New ICT development fund set up in AstanaAn Information and Communication Technology Devel-opment Fund was recently established in Astana. AskarZhumagaliyev, the Minister of Transport and Communi-cations said that the aim of the fund is to help the citizensof Kazakhstan implement innovative projects, Gazeta.kzreported. Teams, as well as individuals who have undergonethe evaluation procedure and proved their product’s com-mercial potential is eligible for the contest. The winners ofthe fund will receive funds to implement their ideas. At theearliest, a competition of start-up projects will also be held.Local communications service operators will actively assistthe Information and Communication Technology Devel-opment Fund. Zhumagaliyev said that the fund is vital forthe development of the ICT sector, giving new impetus tothis area and the emergence of a number of new companies.

KYRGYZSTAN | INVESTMENT

Looking at the climate for investment An International Monetary Fund mission headed byChristian Beddis was recently welcomed by Kyrgyz Prime-minister Zhantoro Satibaldiyev. In course of talks, the sidesdiscussed issues of the investment climate improvement inKyrgyzstan, Irinnews.org reported. Both sides agreed tocollaborate in budget and credit area, taxation system as wellas the development of the country's financial market. Theparties will extend the work of joint IMF-Kyrgyz workinggroup on the implementation of reached agreements.IMF predicted that Kyrgyzstan's economic growth whichwas gravely affected by an output collapse at a flagship gold-mine, is set to slow to just 1% this year. Prudent fiscal andmonetary policies will help keep inflation at 8% this yearand 7.5% on average in 2013-14, the IMF said, also stress-ing the need to fight corruption and the funding of terror-ism. IMF will also give a nod to the third review of theeconomy by the end of the year, making a new tranche ofsome $15 million available to the country. The Fund is ex-pected to approve the third review of the economy by theend of the year, making a new tranche of some $15-millionavailable to the country. Lower output of Centerra-operatedKumtor gold mine has prompted the government to slashits original 7.5% GDP growth forecast to a modest 1.8%rise. GDP expanded by 5.7% in 2011.

KAZAKHSTAN | ENERGY

Kazakhs eye Indian coal During a visit to India, Ambassador of Kazakhstan in India,Doulat Kuanyshev recently announced that his country iseyeing coal development projects in India. He said thatKazakhstan is ready to work with those involved in coalprojects in India by offering its skills and expertise to them.Stressing that Kazakhstan contains central Asia’s largest re-coverable coal reserves, the ambassador said that that hiscountry has different kinds of coal reserves and several skillsto offer in the coal sector, Gazeta.kz reported. He noted thatboth countries have potential to develop these coal projects.In turn, energy hungry India is considering huge oil reservesin this Central Asian nation. It was also learnt that Indianand Kazakhstan also intend to cooperate on hydrocarbonsand uranium as well as renewable energy sources. On thehydrocarbons front, OVL (ONGC Videsh Ltd) has alreadyacquired a 25% stake in the Satpayev off-shore oil block.Noting that India and Kazakhstan are strategic partners,Kuanyshev noted that the current economic tie between thetwo countries does not reflect the real. He expressed hopethat bilateral relations between the two countries will pros-per and expects it to expand further in future. Last year bi-lateral trade stood less than $300 million and inJanuary-June a sod this year, it was just $215 million.


EURASIA

Turkmen president GurbanguliBerdimuhamedow recently paid a work-ing visit to Switzerland to meet UN HighCommissioner for Refugees AntonioGuterres, Turkmenistan.ru reported. Themeeting took place in the UN Palace ofNations in Geneva In course of talks, theTurkmen Head said thatTurkmenistan isready to broaden productive cooperationwith UN High Commissioner forRefugees. The UN envoy believes thatworld society attaches great value to thepurposeful activity of Ashgabat on aid torefugees and protection of their rights.This was emphasizes at the May 2011 in-ternational conference on Refugees in theIslamic World.

The result of the forum was the Ash-gabat declaration which was an impor-tant milestone in the process. It was learntfrom the talks that work on implementa-tion of general statements of internationallegal acts were implemented inTurk-menistan in recent years, entailing theformation of a stable legislative base reg-ulating the legal standing of refugees inTurkmenistan and guaranteeing theirrights and freedoms. It was recalled thatthe Turkmen parliament approved thelaw draft on Refugees in August.

The grounds and procedures for therecognition of foreign citizens and state-less persons as refugees in Turkmenistan,the economic, social and legal safeguardof protection of their rights and legal in-terests in line with the Turkmen Consti-tution and recognised principles and rulesof international law were defined. In2011, under the decree N 3318 ofBerdimuhamedow, people without citi-zenship residing on the territory of Turk-menistan had received Turkmencitizenship.

During his stay in Switzerland, Turk-men Head also met with Hamadoun

Toure, the Secretary General of the In-ternational Telecommunication Union(ITU) - the leading UN agency for in-formation and communication technolo-gies (ICT). The sides discussed aspects ofcooperation, including the newly createdNational Space Agency of Turkmenistanand the upcoming space launch of theTurkmen communication satellite.

The Turkmen Head noted the in-creasing usage of wire lines, mobilecommunications and internet in Turk-menistan. The number of communica-tion channels is also increasing owing tothe laying of high-tech fiber-optic com-munication lines.

“The widespread use of scientific ad-vances, new highly profitable technolo-gies in all the spheres of life, including inthe field of communication - this is theposition that modernTurkmenistan hasmade one of its development priorities,”

the President said. In turn, the SecretaryGeneral of the ITU said that the organ-isation is willing to build up a productivedialogue, noting the huge potential andopportunities for effective partnershipwith Turkmenistan.

Berdimuhamedov also met Sven Alka-laj, the Executive Secretary of the UNEconomic Commission for Europe(UNECE), at the United Nations Officeat Geneva. Issues related to the long-termcooperation between Turkmenistan andthe UNECE, as well as current interna-tional issues of mutual interest were dis-cussed. The Turkmen Head commendedUNECE support for Turkmenistan's ini-tiatives in building a new global architec-ture of energy security throughdevelopment of an effective internationallegal mechanism, in order to guaranteereliable and stable supply of energy re-sources to the world markets.

Refugees in the spotlight as President visits Geneva

TURKMENISTAN|DIPLOMACY

OSCE holds seminar on air pollution monitoringKAZAKHSTAN|ENVIRONMENT

An OSCE-supported seminar on airpollution monitoring was recently held inTemirtau in Central Kazakhstan. Theevent is part of OSCE move to help es-tablish an autonomous public capacity formonitoring the environment.

The organizers of the event compriseof non-governmental organisation Socio-Ecological Foundation, which is a mem-ber of the affiliation of environmentalists'organisations EcoForum of Kazakhstan,in partnership with the OSCE Centre inAstana, the Environmental ProtectionMinistry and two American non-gov-ernmental organisations, the Centre forSafe Energy and Global CommunityMonitor.

The seminar was attended by 30 rep-resentatives from non-governmental or-

ganisations, industry and government.Topics discussed at the event were relatedto training on air monitoring as per in-ternational requirements, Gazeta.kzlearnt from the press service of theOSCE Centre in Astana.

Alexander Peytchev, the OSCE Cen-tre in Astana's Economic and Environ-mental Officer said that such an initiativeon part of OSCE was meant to spur acommunity-based approach to environ-mental security, train people who wouldbe able to independently address envi-ronmental issues in the regions, and helpdevelop tools and networks for non-gov-ernmental organisations catering needsof the communities.

Zulfikhar Zholdassov, the Head of theKaraganda Environmental Department

stressed the relevance of the project forthe Karaganda Region, and particularlyfor the city of Temirtau, hub of largeKazakhstani enterprises.

He noted that public monitoring ofair pollution is a valuable contributionby civil society in addressing environ-mental concerns. Kaisha Atakhanova,the Chair of Socio-Ecological Founda-tion said the event played a vital role incontributing to enhance environmentaltransparency and public access to reli-able information, especially on air pol-lution in industrial cities. After theevent in Temirtau on air pollution, an-other pilot project on Kazakhstan'sCaspian Sea coast dedicated to marineand wetlands pollution is scheduled totake place.

Actress and Goodwill ambassador for the U.N. High Commissioner for Refugees Angelina Jolie (R)

and the U.N. Refugee chief Antonio Guterres (2-R), meet with migrants at the immigration center in

Lampedusa, Italy, 19 June 2011. The tiny Italian Island of Lampedusa, which has been overwhelmed in

recent months by refugees fleeing Tunisia and Libya, is getting some VIP visitors: U.N. envoy Angelina

Jolie and the U.N. Refugee chief Antonio Guterres arrived in Lampedusa on Sunday a few hours ahead

of Jolie, who last week traveled to Turkey's border with Syria to meet some of the thousands of Syrian

refugees fleeing the conflict there.

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31NEW EUROPE21 - 27 October, 2012RUSSIA

RUSSIA|DEFENCE

Spending to increase by 59%Moscow plans to increase annual defence spending by 59%,to nearly 3trl rubles ($97bn), by 2015, the head of theDuma's defence committee said on 17 October, RIANovosti reported. “Targeted national defence spending aspercentage of GDP will amount to 3.2% in 2013, 3.4% in2014 and 3.7% in 2015,” Defence Committee chairmanVladimir Komoedov said in the committee’s conclusion onthe draft budget for 2013-2015. The proposals provide fi-nancing to "re-equip units with new weapon systems, mil-itary and specialty equipment and provide housing andsocial safeguards for service members" among other issues,Komoedov said. He also noted that Russia plans to spend101.15bn rubles on nuclear weapons in 2013-2015.

RUSSIA|ENERGY

Gazprom goes to Switzerland Russian gas monopoly Gazprom will register its overseas as-sets in Switzerland, where a company does not have to set uptwo independent branches as required by the EuropeanUnion's energy regulations, an official said, RIA Novosti re-ported on 17 October. Under the EU’s legislation, starting from2013 oil and gas companies will be banned from selling andshipping fuel in Europe. Like many other energy giants,Gazprom is forced to undergo a structural reform.

RUSSIA|ENERGY

Gazprom sees ENI compromiseRussian gas monopoly Gazprom expects to find a solutionshould Italy’s ENI demand revision of the take-or-pay rulein its gas supply contracts, Vedomosti reported, citing anunidentified official at the Russian gas exporter. ENI hasn’tformally requested the change, the daily said after ENICEO Paolo Scaroni questioned the rule that forces gas buy-ers to take volumes set by the contract or pay for them. Sca-roni said ENI could “not renew take or pay contracts and tryto rework the ones that are still in force,” La Repubblica re-ported. Gazprom's current contract with ENI expires in2035. In 2011 losses from the company's gas sales sector to-talled €600mn. Earlier this year Gazprom revised tariffs withGermany’s Wingas, France’s GDF Suez, Austria’s EconGasGmbH, Slovakia’s SPP AS and Sinergie Italiane Srl.

RUSSIA|ENERGY

Gazprom mulls LNG increaseRussian gas monopoly Gazprom’s Board of Directors hasreviewed global gas production and consumption scenariosand discussed measures to increase LNG production andsupplies to the domestic and foreign markets. The com-pany's Management Committee has been tasked withpreparing proposals on updating the Gazprom LNG Pro-duction and Supply Strategy to strengthen Gazprom’s po-sitions of the largest hydrocarbon feedstock supplier in theglobal gas market.

RUSSIA|ECONOMY

Economy still slowsRussia's economy is struggling to maintain its recent growthmomentum, data released on 17 October by the State Sta-tistics Service showed. Retail sales rose by 4.4% in Sep-tember compared with a year earlier, a marginal increase on4.3% growth registered in August. The growth rate wassluggish compared to the first half of the year, when retailsales grew by an impressive 7.3. A rapid increase in house-hold consumption had enabled Russia to shrug off the im-pact of a slowing international economy and post relativelystrong economic growth of 4.5% in the first half of 2012.

British oil giant BP is in the process ofaccessing bids for its 50% stake inprofitable but troubled Russian-British joint venture TNK-BP afterthe bids closed at 9am on 18 October,a BP spokeswoman in London toldNew Europe.

She would not reveal who the biddersare. Russian oil majors Rosneft and AlfaAccess Renova (AAR), a consortium offour oligarchs (Len Blavatnik, MikhailFridman, German Khan and Viktor Vek-selberg), who own half of TNK-BP, arethe only two that have said publicly thatthey may table an offer that would alsoenable them to buy out the British oilmajor.

A 90-day exclusivity period for “goodfaith” negotiations with AAR expired atmidnight on 17 October. BP had invitedbids for its stake by 9am on 18 October.

“We are reviewing options, includingany offers that we have received,” a BPspokeswoman said, adding that there isno timeframe as to when a decisionwould be made. “The bid closed obvi-ously at nine o’clock this morning [18October] and this is a process we have togo through in accessing.” The spokes-woman would not comment on whether

Rosneft and AAR were the bidders.Given that AAR is reportedly also

looking to sell its stake to Russian state-owned oil company Rosneft, it is unlikelythat it bid for BP’s stake, sources say.

According to sources, Rosneft report-edly offered a cash-and-stock deal on 18October to acquire BP’s stake in TNK-BP. BP’s CEO Robert W. Dudley wasexpected to meet with Rosneft’s Presi-dent Igor Sechin on 18 October. The dealwould open up opportunities for BP toexplore the Russian Arctic together withRosneft, similar to a partnership deal thatwas thwarted by AAR last year.

On 17 October, AAR reportedly alsoagreed to sell their stake to Rosneft. Ros-neft will reportedly pay the Russian ty-coons $28bn.

After the potential three-way deal, theKremlin-controlled Rosneft could takecontrol of the whole of the joint venture,reshaping the global oil sector by gettingcontrol of a greater share of Russia’s largeenergy reserves. Meanwhile, BP andBlavatnik, Fridman, Khan and Vekselbergcould emerge with minority stakes in anenlarged Rosneft plus billions of dollarsin cash in exchange for TNK-BP. Thecombined group would be producing wellover 4mn barrels of oil and gas a day.

Russian President Vladimir Putin has

held talks with Dudley recently and givenhis blessing to Rosneft taking control ofTNK-BP. On 18 October, Russia’s En-ergy Minister Alexander Novak echoedPutin’s statement, saying that a possibledeal by Rosneft to buy half or all ofTNK-BP poses no threat to marketcompetition.

Asked if a possible purchase of TNK-BP by Rosneft could monopolise the do-mestic oil market, Novak replied: “I don’tthink so. There is still BP, other share-holders and quite a normal market struc-ture. There will be no monopoly positionas there is quite tight competition in alarge market.”

BP has for years clashed with its Russ-ian partners in the TNK-BP venture andannounced in June a plan to sell its stake.BP's decision put pressure on the oli-garchs to agree in principle to sell theirhalf of the business first and get a higherprice, experts say.

The TNK-BP saga has had manytwists and turns and could still holdmany surprises. “If you go back a fewweeks they (AAR) wanted to buy, theywanted to sell, they wanted to buy halfof BP’s stake. They have been a fewdifferent variants over the last coupleof months,” an industry source toldNew Europe on 17 October.

Rosneft closes in on TNK-BP but AAR still unpredictable

RUSSIA|ENERGY

The Kremlin is reflected in the polished company plate of the state-controlled Russian oil giant Rosneft at the entrance of the headquarters in Moscow.

Russia to target Turkey with new missiles

RUSSIA|DEFENCE

A new anti-aircraft weapons systemin Russia will target Turkey, Hurriyetreported 17 October. Russia hasbegun installing the new state-of-the-art anti-aircraft weapon systemin its southern military region. Theinstallation will be completed by theend of this year, said RussianColonel Igor Gorbul, adding that theS-400 anti-aircraft missiles were ca-pable of destroying all types of air-

planes, as well as ultra-stratosphericand ballistic missiles.

Turkish-Russian tensions rose twoweeks ago after Ankara forced down aSyrian passenger plane en route fromMoscow to Damascus.

Turkish Foreign Minister AhmetDavutoglu said the aircraft wasgrounded based on information that itmight be carrying “certain equipmentin breach of civil aviation rules.”

However, Russian Foreign Minis-ter Sergei Lavrov said, “There were,of course, no weapons on the planeand could not have been any. Therewas a cargo on the plane that a legalRussian supplier was sending in alegal way to a legal customer”. ButLavrov also moved to defuse tensionsby saying the country’s bilateral rela-tionship would not be damaged bythe incident.

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The soporific calm of the Commission’s midday briefing was disturbed, when the subjectrose of the salaries and perks of Commissionstaff.

Not something they were willing to discuss. “We’re high flyers, not burger flippers”

haughtily replied the Commission’sspokeswoman, a remark that showed thedeeply ingrained sense of entitlement forthemselves and disdain for others, especiallythose in low paid jobs, you know the ones mostEuropean citizens have to take to survive.

Then she left for urgent business, a chat onTwitter with half a dozen people. Not busy, asthe spokeswoman noticed as she sent out adesperate message on the social media service,“Seems the Tweeps are TwEating for themoment rather than joining our #EUChat :-)”

Or perhaps too busy flipping burgers in orderto provide for their austerity stricken families.

Anyway, the fuss centres on a letter sent byeight national delegations, Austria, Denmark,Finland, France, Germany, Netherlands andSweden on 17 September to the EuropeanCommission.

The letter, titled, ‘Contributions requestingcalculations on savings in the context of theStaff Regulations Review’ notes that “However,we have asked the Commission on variousoccasions to provide a more thorough anddetailed financial impact assessment of itsproposal. We have also requested that theCommission provide us with modelsdemonstrating how its proposal will result incost savings. These requests have still not beenmet, making it difficult for the Council to arriveat an informed opinion on the review of theStaff Regulations.”

The aggrieved delegations continue, “Withthis in mind, at the General Affairs Council inMarch 2012, a number of MS requested thatthe Commission provide a modeldemonstrating where extra savings of €5 billion,€10 billion and €15 billion from its currentproposal for 2014-2020 could be found viachanges to the Staff Regulations, in line with asimilar level of savings being implemented innational civil services. This request has still notbeen met by the Commission.”

Helpfully, they set out five areas “which wethink could help achieve more meaningfulsavings.”

Pensions:“Member States are very concerned about

the future increase forecast in expenditure onthe pensions of EU staff from €1235 million in2010 to €2490 million by 2045, at constantprices.”

They make a number of suggestions and askfor savings these could generate, including “staffpension contribution of 40% (option 1) and50% (option 2), which is in line with actualpractice and with trends in other relevantinternational organizations.”

Career Structure:“Promotion based only on merit is vital to the

modernization and attractiveness of theEuropean civil service.”

A number of suggestions includinglengthening the time between automaticpromotions and lowering the promotion ratesfrom up to a third to a low of 10%.

Staff reductions:“The Commission is also invited to make

calculations on further reductions beyond theproposed 5% and the impact of phasing thereductions in more quickly.”

Solidarity levy:“The proposed increase of the solidarity levy

from 5.5% to 6% is only applied to a part of thebasic salary due to exemptions and deductions;it should be further increased.”

They also suggest applying the levy topensions and…

Allowances:“We would like to ask for proposals for

more ambitious measures with respect to allallowances that would lead to furthersavings. We therefore ask the Commissionto make calculations to this effect, especiallyconcerning the expatriation allowance.”

The fight gets a little more complicatedas there are rumblings from Council that ifthe Commission doesn’t make savings theCouncil will impose them.

Speaking to New Europe, a Commissionofficial said that legal advice appears to saythat the Council cannot make such achange.

The issue of Commission salaries is oftenhighlighted by eurosceptics, who oneguesses, would like to see officials onminimum wages, but also by some memberstates, playing to a domestic audience.

Salaries and allowances certainly could berationalized and some are hard to justify, butofficials say that they’ve already deliveredsavings.

A respected Commission official toldNew Europe that, in some cases, salaries aretoo low to attract ‘high flyers’ from thebetter off Member States, a situation theydescribed as very serious. Asked what theCommission would look like in ten ortwenty years if this trend continues, theofficial, speaking off the record said, “Therewould only be Belgians, Bulgarians andRomanians here.”

KASSANDRANow the ECR Group has started pre-summitgatherings, perhaps they will meet here next time!

Page 32 | New Europe21 - 27 October, 2012

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Once upon a time in Brussels...

Follow me on twitter @Kassandra_NE

Want fries with that directive?

The European institutions have been incelebratory mood of late. It is, after all, amomentous occasion; the 20th anniver-sary of the launching of the (still incom-plete) single market, an event precipitatedby the signing of the Masstricht Treaty in1992, and which has been celebrated in aweek-long series of events in the EU in-stitutions.

Such an iconic and monumentalachievement, must, surely, deserve a cele-bration worthy of its status. Maybe; butthat isn’t how the current crop of Euro-crats see it. On Monday 15 October, atthe opening ceremony of Single MarketWeek in the European Parliament, an

event attended by, not only current Euro-pean Parliament President Martin Schulzand EU Commissioner for Internal Mar-ket, Michel Barnier, but also legend of theEuropean project, former commissioner,Jacques Delors.

Sadly, this star line-up didn’t appear tobe enough to fill the stalls. Such was thelacklustre turn-out that an emergency callwas put out by Deputy Director-Generalof DG Internal Market, Pierre Delsaux,who, in a gesture of inter-institutionalsolidarity, advised those in his unit toquickly send as many friends or col-leagues to the meeting as the room was“dangerously empty”.

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Herman, this is how you do a press conference.| AFP PHOTO / RALPH GATTI

Internal market solidarity Public prefer porn to presidents

There was an air of gloom as people gatheredat the start of the summit, only this time itwasn’t the usual pre-summit blues, nor was itthe grey skies over Brussels.It was more than that. The news had spreadthat Sylvia Kristel, who starred in the Em-manuelle films that taught a generation theneed for lower arm strength and the dangersof RSI.One of the Council’s more endearing commspeople was rather unimpressed, especially

when she turned to Twitter and saw the chat-ter. She tweeted her thoughts, “We live in a worldwhere #emmanuelle is trending worldwideand not #euco. 'Get over it' is my mantra fortoday :)”It’s a funny thing, but we don’t think HvR willbe quite as much of a turn on to Europeanyouth as Ms Kristel, but that’s not surprisingbecause unlike the Dutch actress’ films, EUsummits rarely end in a climax…

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